Atlas Baltic OÜ v The Owners and all Persons Claiming an Interest in the Lady Magda

• Jurisdiction: Ireland
• Judge: Mr. Justice McGovern
• Judgment Date: 18 July 2018
• Neutral Citation: [2018] IEHC 426
• Docket Number: [2017 No. 6557 P.]
• Court: High Court
• Date: 18 July 2018

[2018] IEHC 426

THE HIGH COURT

McGovern J.

[2017 No. 6557 P.]

IN THE MATTER OF THE M/V LADY MAGDA

BETWEEN

ATLAS BALTIC OÜ

PLAINTIFF

AND

THE OWNERS AND ALL PERSONS CLAIMING

AN INTEREST IN THE M/V ‘LADY MAGDA’

DEFENDANT

Breach of contract – Disbursements – Liability – Plaintiff seeking the sum of €95,381.49 alleged to be due and owning from the defendants to the plaintiff in respect of the disbursements made by the plaintiff on behalf of “Lady Magda” – Whether the defendants had liability in the proceedings

Facts: The plaintiff, Atlas Baltic OÜ, applied to the High Court claiming the sum of €95,381.49 alleged to be due and owning from the defendants, the owners and all persons claiming an interest in the “Lady Magda”, to the plaintiff in respect of the disbursements made by the plaintiff on behalf of “Lady Magda”. The claim was based on breach of contract. The defendants stated that they never entered into any agreement with the plaintiff for the provision of agency or any other services, they never requested the provision of such services nor did they obtain the benefit of such services. They therefore claimed that they had no liability in these proceedings and that the plaintiff was not entitled to judgment against the security which was offered for the release of the vessel.

Held by McGovern J that this claim was based on breach of contract and the defendants were never a party to that contract; there was no evidence of a contractual relationship between the plaintiff and the defendants. McGovern J held that the fact that the claim was one for disbursements merely went to the issue of the admiralty jurisdiction to arrest the vessel; it was not determinative of whether or not the vessel could be condemned for this claim. McGovern J adopted the judgment of Finnegan P in Campus Oil Ltd v MF/V Avro Hunter [2004] 4 JIC 2701 and was satisfied that there was no liability on the part of the defendants in respect of the claim made in these proceedings and that therefore neither the vessel nor the security provided could be condemned in respect of that claim.

McGovern J held that he would dismiss the plaintiff’s claim and hear counsel on any ancillary orders to be made.

Claim dismissed.

JUDGMENT of Mr. Justice McGovern delivered on the 18th day of July, 2018

1 The plaintiff's claim is for the sum of €95,381.49 alleged to be due and owning from the defendant to the plaintiff in respect of the disbursements made by the plaintiff on behalf of ‘ Lady Magda’. The claim is based on breach of contract.

2 The vessel is registered in and flies the flag of the Kingdom of the Netherlands. The claim in these proceedings is in respect of disbursements made by the plaintiff at ports in Latvia and Estonia.

3 As the plaintiff claims that the sums due have not been paid, it sought and obtained a warrant to arrest the vessel when it came to this jurisdiction. The warrant for arrest was obtained on the basis that the claim constituted a ‘ maritime claim’ within the meaning of Article 1 of the 1952 International Convention relating to the Arrest of Seagoing Ships (‘ the arrest convention’) which has been incorporated into our law by virtue of the jurisdiction of Courts (Maritime Convention) Act, 1989.

4 The warrant of arrest issued on 19th July, 2017 and on 21st July, 2017 an appearance was entered by the defendants. In due course security was put up for the release of the vessel. The vessel has been sold since these proceedings commenced.

5 The defendants” position is quite simple. They state that they never entered into any agreement with the plaintiff for the provision of agency or any other services, they never requested the provision of such services nor did they obtain the benefit of such services. They, therefore, claim that they have no liability in these proceedings and that the plaintiff is not entitled to judgment against the security which was offered for the release of the vessel.

6 There is very little dispute on the facts. The defendants have not contested the sum being claimed nor do they take any issue with the invoices save and except that the invoices were not issued to them and they maintain they had no liability to pay them.

7 Although the statement of claim pleads that the defendants entered into a series of contracts with the plaintiff for the provision of services for reward and that those services were provided by the plaintiff to the defendants, this was not the claim that was made when it replied to a notice for particulars on 4th December, 2017. The defendants sought particulars of each and every invoice pleaded in the statement of claim and each in every case the plaintiff stated ‘ the plaintiff entered into an agreement to provide agency and other services to the vessel at the request of Dennis Maritime Oy Limited’. Dennis Maritime Oy Limited (‘ DM’) is a Finnish company unconnected with the defendant. Although there is no dispute between the parties on these facts the plaintiff contends that notwithstanding that the service was requested by a third party who is not before the court that the plaintiff is entitled to a judgment against the owners of the vessel. The defendants reject this contention arguing that the claim for disbursements does not give rise to a maritime lien which only arises in the case of the personal liability of the owners.

8 The plaintiff raised seventeen separate invoices all addressed to DM. At the time when the services were requested by DM they were time charters of the vessel. Mr. Kekkonen on behalf of the plaintiff gave evidence that the plaintiff had provided ship agency services at the express request of DM since 2012 and they were usually provided on the basis of written appointments sent by the DM operations department.

9 He also gave evidence that DM paid debts on behalf of the vessel and other vessel debts but failed to pay the invoices which are the subject matter of these proceedings on the basis that they were...