Atlas Baltic Oü v The Owners and All Persons Claiming an Interest in the M/v “Lady Magda”
| Jurisdiction | Ireland |
| Judge | Mr Justice Maurice Collins |
| Judgment Date | 18 January 2021 |
| Neutral Citation | [2021] IECA 7 |
| Docket Number | Court of Appeal Record Nos 2018/324 |
| Court | Court of Appeal (Ireland) |
| Date | 18 January 2021 |
In the Matter of the M/V “Lady Magda”
[2021] IECA 7
Collins J
Binchy J
Pilkington J
Court of Appeal Record Nos 2018/324
THE COURT OF APPEAL
CIVIL
Disbursements – Contractual liability – Personal liability – Appellant seeking payment due in respect of disbursements made by the appellant on behalf of a merchant vessel and/or her owners – Whether the appellant had demonstrated personal liability on the part of the respondents for the disbursements made by the appellant or for the agency fees charged by them
Facts: The appellant, Atlantic Baltic OÜ (the Agents), appealed to the Court of Appeal from a judgment and order of the High Court (McGovern J) of 18 July 2018. For the reasons set out in that judgment, the Judge dismissed the Agents’ claim against the respondents, the owners and all persons claiming an interest in the M/V “Lady Magda” (the Owners), in respect of “disbursements” (primarily port expenses but also including agents’ fees) said to have been made by the Agents on behalf of the Lady Magda. These proceedings and this appeal raised issues relating to the liability of the owners of a vessel where it is let on time charter. Similar issues were considered by the Court in its decision in The Almirante Storni [2020] IECA 58. While the correctness of that decision was not directly challenged on this appeal, it was said to be distinguishable as a matter of fact.
Held by Collins J that there was no material difference between the facts in The Almirante Storni and the facts presented in this case. He held that the Agents’ claim was based on contract but it had not established any contract with the Owners or any contractual liability on their part. He held that, as was the case in The Almirante Storni, the disbursements at issue were made at the request of the charterers, Dennis Maritime Oy Ltd (the Charterers), not at the request of the Owners. He held that there was no evidence that, in their dealings with the Agents, the Charterers were acting, held themselves out as acting and/or were understood by the Agents to be acting, on behalf of and/or with the authority of the Owners or with permission to pledge their credit. He held that the evidence disclosed no involvement by the master of the Lady Magda in the dealings between the Agents and the Charterers. Thus, even if it was the law that the master of a ship is to be taken as having ostensible authority to pledge the credit of the shipowners in circumstances such as those in this case – and that was, in his view, very questionable –that did not avail the Agents. He held that no personal liability on the part of the Owners for the disbursements made by the Agents or for the agency fees charged by them had been demonstrated. He held that no such liability arose directly from the transactions between the Agents and the Charterers and neither did such liability arise by way of any supposed ratification of those transactions by the Owners.
Collins J held that it was common case that, in the absence of such personal liability on the part of the Owners, no claim could be pursued against them. That being so, Collins J held that the appeal must be dismissed and the judgment and order of the High Court affirmed.
Appeal refused.
JUDGMENT of Mr Justice Maurice Collins delivered on 18 January 2021
The Appellant, Atlantic Baltic OÜ (“ the Agents”) brings this appeal from a judgment and order of the High Court (McGovern J) of 18 July 2018. For the reasons set out in that judgment, the Judge dismissed the Agents' claim against the Respondents ( “the Owners”) in respect of “ disbursements” (primarily port expenses but also including agents' fees) said to have been made by the Agents on behalf of the Lady Magda.
These proceedings and this appeal raise interesting issues relating to the liability of the owners of a vessel where it is let on time charter. Similar issues were considered by this Court in its recent decision in The Almirante Storni [2020] IECA 58. While the correctness of that decision was not directly challenged on this appeal, it is said to be distinguishable as a matter of fact. For the reasons I explain in this judgment, there is no material difference between the facts in The Almirante Storni and the facts presented here.
The Agents' claim is based on contract but it has not established any contract with the Owners or any contractual liability on their part. As was the case in The Almirante Storni, the disbursements at issue here were made at the request of the charterers, Dennis Maritime Oy Ltd (“ the Charterers”) not at the request of the Owners. There is no evidence that, in their dealings with the Agents, the Charterers were acting, held themselves out as acting and/or were understood by the Agents to be acting, on behalf of and/or with the authority of the Owners or with permission to pledge their credit. The evidence discloses no involvement by the master of the Lady Magda in the dealings between the Agents and the Charterers. Thus, even if it is the law that the master of a ship is to be taken as having ostensible authority to pledge the credit of the shipowners in circumstances such as those here – and that is, in my view, very questionable – that does not avail the Agents. No personal liability on the part of the Owners for the disbursements made by the Agents or for the agency fees charged by them has been demonstrated. No such liability arises directly from the transactions between the Agents and the Charterers and neither does such liability arise by way of any supposed ratification of those transactions by the Owners.
It is common case that, in the absence of such personal liability on the part of the Owners, no claim can be pursued against them. That being so, the appeal must be dismissed and the judgment and order of the High Court affirmed.
Agents are an Estonian company providing agency services to ships. At all times relevant to these proceedings, the Owners were the owners of the M/V Lady Magda, a Dutch-flagged general cargo vessel built in 1993, with a gross tonnage of 2561 tons.
The circumstances in which the Agents' claim arises can be stated relatively briefly, though it will be necessary to consider some aspects in more detail in due course.
Since 2012, and throughout 2016, the Lady Magda was let on time charter to the Charterers, a Finnish company. I will refer further to some of the terms of the charterparty in due course but for present purposes it is sufficient to note that, for 2016 at least (but presumably for earlier years also), 1 it took the form of the Baltic and International Maritime Council (BIMCO) General Time Charter Party (commonly referred to as Gentime). The Gentime form is used for time charters where the vessel is to be used for the carriage of dry cargo. The evidence does not disclose any connection or legal relationship between the Charterers and the Owners other than that arising from the time charter.
The Agents and the Charterers had been dealing with one another since 2012 and in the period since then ship agency services had been provided by the Agents in Estonian and Latvian ports for the Lady Magda and also for a significant number of other ships owned and/or operated by the Charterers. The evidence before the High Court disclosed that such services were usually provided on the basis of written appointments sent to the Agents by the operations department of the Charterers.
These proceedings arise from various appointments of the Agents as port agents for the Lady Magda in the period between the June and October 2016. In accordance with the practice just referred to, those appointments were made in writing (by email) by the operations department of the Charterers.
As port agents, the Agents made disbursements to third parties for items such as port dues, navigation dues, berth dues, pilotage dues and the like. They also charged agency fees in consideration of their services. The Agents invoiced the Charterers from time to time for these disbursements, as well as for their agency services. The invoices relevant to this appeal date from the period June – November 2016. While they differ as to the items and amounts, they are all in the same format. Each identifies the Charterer as “ debtor”, identifies the Lady Magda as the ship and identifies “ Magda C/O Wijnne & Barends Cargadoors” as owner. 2
Such invoices were discharged by the Charterers until, at the end of 2016, difficulties began to emerge in terms of delayed/missed payments. The Charterers acknowledged these difficulties in March 2017 and in April 2017 the Agents and the Charterers entered into an agreement for the deferred payment of outstanding invoices. However, the Charterers did not adhere to the agreed payment schedule and the deferred payment agreement was terminated by the Agents. The Charterers were ultimately declared bankrupt in August 2017.
In April 2017, a law firm in Estonia wrote to the Charterers, copying the Owners, giving particulars of unpaid invoices amounting to €99,334.72, demanding payment of that amount and referring to the possibility of the arrest of the Lady Magda on foot of the “ maritime lien” which, it was said, the Charterers were entitled to. That letter did not result in any payment being made and the firm wrote again in May 2017, notifying the addressees (the Owners now being the primary addressee, with the Charterers copied) that the Lady Magda would be arrested if the outstanding balance (now stated to be €95,381.49) was not paid within 3 days. To this the Owners responded by observing that they did not know the status of any agreed services as the Lady Magda had been chartered out to the...
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Atlas Baltic Ou v Interest in the MV Lady Magda
...with the costs of this appeal. It should be read with my earlier judgment of 7 January 2021 (with which Binchy and Pilkington JJ agreed): [2021] IECA 7. That judgment sets out in detail why the Agents' appeal was 2 At the conclusion of that judgment, I expressed the view that it appeared to......