Ufl Charters Limited v The Ship 'No 203 Melilla'

[2015] NZHC 794

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001384 [2015] NZHC 794

BETWEEN

UFL CHARTERS LIMITED

Plaintiff

AND

THE SHIP "NO. 203 MELILLA" First Defendant

THE SHIP "NO. 201 MELILLA" Second Defendant

Hearing:	Dealt with on the papers
Judgment:	21 April 2015

JUDGMENT OF GENDALL J

[1]      This proceeding has been discontinued against the second defendant The Ship

No. 201 Melilla.

[2]      The plaintiff now applies for judgment by default in this proceeding against

the first defendant, “The Ship No. 203 Melilla”.

[3]      The proceeding was served on the first defendant on 16 August 2013 and an affidavit of service dated 19 August 2013 is before the Court.  There has been no opposition or statement of defence filed by the first defendant to the plaintiff’s claim against it.

[4]      The  plaintiff  has  now  applied  for  judgment  by  default  against  the  first defendant.  Before that judgment can be entered the Court needs to be satisfied that the claim is one in respect of which an action in rem may be brought under ss 4 and

5 of the Admiralty Act 1973 (the Act).  Here, the plaintiff’s claim is brought pursuant

to charter agreements commencing 1 July 2010, 1 October 2011 and 1 October 2012

UFL CHARTERS LIMITED v THE SHIP "NO. 203 MELILLA" [2015] NZHC 794 [21 April 2015]

for the charter of the first defendant’s ship which is a fishing vessel owned by Tae Jin

Fisheries Co Limited (Tae Jin) a company having its registered office in Korea.

[5]      Turning first to consider this admiralty jurisdiction issue, I am satisfied that the plaintiff’s claim here does fall within the admiralty jurisdiction in reliance on s 4(1)(h) of the Act which provides that:

The Court shall have jurisdiction in respect of the following questions or claims:

…

(h)       Any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship.

[6]      Clearly s4(1)(h) is drafted rather broadly so that here it will apply to a claim arising out of the charter agreement/s so long as the agreement/s relate/s to the use of a ship.

[7]      Here, the agreements relied on by the plaintiff, I am satisfied, are charter fishing agreements.  They do not relate to the carriage of goods but instead relate to the use of the ship in question and in particular its use as a fishing vessel.

[8]      Those  charter  fishing  agreements  relied  on  commenced  on  1  July 2010,

1 October 2011 and 1 October 2012 and each provided at page 3:

CThe parties have agreed that Tae Jin will use its vessels to catch, under the terms of this agreement, the catching entitlements held by UFL and made available to Tae Jin under this agreement.

[9]      In Reef Shipping Co Ltd v The Ship Fua Kavenga1 it was held that s 4(1)(h)

of the Act applied to charter party agreements and the Court said at 559:

There is, of course no argument but that a charter party is an agreement relating to the hire of a ship and a claim for breach of a term of a charter party is one “arising out of” that charter party.

1      Reef Shipping Co Ltd v The Ship Fua Kavenga [1987] 1 NZLR 550

[10]     On all of this, I am satisfied that the fishing undertaken here was clearly the use of a ship and so the charter fishing agreements in this case are agreements relating to the use of a ship within the meaning of s 4(1)(h) of the Act.

[11]     Next, it is clear that s 4(1)(h) is broad enough to cover any claim arising out of an agreement for the use of a ship.  The amount claimed must “arise out of” the agreement relating to the use of a ship and I am satisfied that is the case here.

[12]     To summarise, I find that the plaintiff’s claim here against the first defendant,

The Ship “No. 203 Melilla” falls within s 4(1)(h) of the Act as:

(a)      The claim arises out of agreements for the use of a ship as a fishing vessel;

(b)As the agreements are for the use of a ship, any claim arising out of the agreements falls within s 4(1)(h);

(c)       All of the amounts claimed arise out of the agreements; and

(d)There is no requirement that the amounts claimed themselves be for the use of a ship.

[13]     Also, from the affidavit of Andre Kotzikas sworn 17 November 2014 filed in this proceeding herein on behalf of the plaintiff, I am satisfied that at the date this proceeding was filed on 12 August 2013 the first defendant, The Ship “No. 203

Melilla” was owned by Tae Jin.

[14]     Turning now to the terms of the charter fishing agreements generally, these are before the Court and in the affidavits filed by the plaintiff in support of its claims, the following matters are clear:

(a)      The plaintiff held annual catch entitlement for a quantity of fish, in particular,  specified  species  to  be  caught  within  the  exclusive economic zone of New Zealand;

(b)      Tae  Jin  owned  and  operated  the  fishing  vessel  The  Ship  “No.

203 Melilla”  and  this  was  a  suitable  vessel  for  catching  the  fish included within the plaintiff’s catch entitlement;

(c)      It was agreed that Tae Jin would use its ship “No. 203 Melilla” to catch the fish in question, that the plaintiff would make available its catch entitlement to Tae Jin for this purpose for periods of time and that payments would pass between the parties for this purpose;

(d)In this regard, the plaintiff was to pay Tae Jin a charter fee based on the  fishing  catch  made,  less  a  sum  equal  to  certain  operational expenses incurred by the plaintiff for general expenses relating to the vessel, certain payments for wages, salary, travel and accommodation costs, additional administration and financial costs and the like.   A charter fee statement was to be provided by the plaintiff to Tae Jin on a monthly basis and the final balance in that statement was to be paid either  by  the  plaintiff  to  Tae  Jin  or  by  Tae  Jin  to  the  plaintiff depending on calculations within the same month.  Interest was to be payable on all unpaid balances as set out in the charter agreements.

[15]     It seems the charter agreement arrangements have now come to an end and that following detailed reconciliation of charter fees and operational expenses under the agreements, a sum which is not disputed as outlined in the plaintiff’s statement of claim filed 4 October 2013 amounting to $2,478,410.26 is due and owing to the plaintiff.  This is for payments made on account of the first defendant, The Ship “No.

203 Melilla” (and also pursuant to the charter agreements on account of the related

ship “No. 201 Melilla”).

[16]     As I have noted above, the first defendant ship has not served a statement of defence or taken any other steps in this proceeding and the amount claimed by the plaintiff is effectively undisputed.  The plaintiff has put before the Court sufficient, as  I  see  it,  to  justify  its  claim  here  and  judgment  by  default  is  accordingly appropriate.

[17]     That  said,  the  plaintiff’s  claim  against  the  first  defendant  succeeds  and judgment is now given against the first defendant, The Ship “No. 203 Melilla”, by default as follows:

(a)       In the sum of $2,478,410.26; and

(b)Interest on this sum at the 90 day bill rate of 2.65% plus 4% as provided for in the charter agreement from 1 August 2013 to the date of this judgment, 21 April 2015 (628 days)   being an amount of

$283,570.83; and

(c)       The costs of and incidental to this proceeding as claimed in the sum of

$10,156.

...................................................

Gendall J

Solicitors:

Dawson & Associates Limited, Nelson

White Fox & Jones, Christchurch