UFL Charters Limited v The Ship "No 203 Melilla"

[2020] NZHC 128

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-409-1384

[2020] NZHC 128

BETWEEN

UFL CHARTERS LIMITED

Plaintiff

AND

THE SHIP “NO. 203 MELILLA”

Respondent

Hearing:	10 February 2020
Appearances:	H Matthews and K Anderson for the Plaintiff No Appearance by or for the Respondent
Judgment:	11 February 2020

JUDGMENT OF MANDER J

This judgment was delivered by me on 11 February at 3.15 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:     .

UFL CHARTERS LIMITED v THE SHIP “NO. 203 MELILLA” [2020] NZHC 128 [11 February 2020]

[1]    On 21 April 2015, the applicant, UFL Charters Ltd, obtained judgment by default against the defendant, The Ship “No. 203 Melilla”, in the sum of $2,478,410.26 together with interest of $283,570.83 and costs of $10,156. The ship was arrested by order of the Court on 4 September 2015, and subsequently ordered to be appraised and sold in February the following year. On 23 September 2016, the ship was sold and the proceeds of $377,638.92 are held by the Court.

[2]    Application is now made for determination of the quantum of the producer fund claimed by UFL Charters Ltd and the order of priority of the claims against the proceeds of sale of the defendant ship pursuant to r 25.52 of the High Court Rules. Further, it seeks that the balance of the funds held by the registrar be paid out to it in partial satisfaction of the judgment.

[3]    The producer fund comprises the costs incurred by UFL to preserve the ship and to arrange its arrest and sale for the benefit of all creditors. I am satisfied that the producer fund comprises the following costs totalling $175,581.36:

(a)legal costs incurred in connection with the arrest of the vessel in the sum of $26,069.05;

(b)disbursements incurred in connection with the arrest of the vessel in the sum of $10,618.21;

(c)maintenance and preservation expenses incurred in respect of the ship, including inter alia berthage, storage and pest control, in the sum of

$138,894.10.

[4]    UFL also seeks interest on the producer fund at five percent per annum from the date each expense was paid to the date of reimbursement, pursuant to s 87 of the Judicature Act 1908.

[5]    The producer fund as calculated together with interest is to have first priority against the proceeds of the ship. The only other known potential claim concerns a

separate claim made by a Mr Abdul Aziz and 42 other plaintiffs who were employed as crew on the ship.

[6]    A copy of the application and the affidavit in support was sent on 20 December 2019 to Mr Peter Dawson who was the solicitor on the record for Mr Aziz and the other 28 plaintiffs in  the  related  proceeding.  Upon  receipt  of  the  application,  Mr Dawson advised that he had not heard from any of the crew for some four years “after their wage claims were resolved”. He has attempted to contact the crew’s translator in an endeavour to track down members of the crew but has received no response. Mr Dawson notes that even with that person’s assistance it would be very difficult to get instructions from over 60 crew as they would be scattered around the world on various fishing vessels.

[7]    In the circumstances, and particularly having regard to the indication that the crew’s wage claim has been resolved, and the unlikelihood of successfully locating and communicating with them, I consider the applicant’s general claim for the balance of the funds held by the registrar in partial satisfaction of the judgment debt should in the circumstances be determined as having second priority. Accordingly, it is ordered that the proceeds of the sale of the ship that totals $377,638.92 are to be paid to the applicant in full in satisfaction of the judgment debt after payment of the $175,581.36 that comprises the producer fund.

Orders

[8]    Accordingly, having read the affidavit of Mr Andre Kotzikas of 20 December 2019 filed in support of the application, pursuant to r 25.52 of the High Court Rules and the Court’s inherent jurisdiction, I make the following orders:

(a)The applicant’s total costs of $175,581.36 plus interest at 5 percent per annum are to be determined to have first priority against the proceeds of the ship;

(b)The judgment sum due on the judgment of this Court of 21 April 2015 is determined to have second priority against the proceeds of the ship;

(c)Accordingly, the proceeds of the sale of the ship are to be paid to the applicant in full.

Solicitors:

White Fox and Jones, Christchurch Dawson and Associates, Nelson