In 1964, cargo belonging to the plaintiffs was carried from Canada to England on the Monica Smith, a ship wholly owned by And Smith Rederi AB (Smith). The plaintiffs made a claim but no settlement was reached. On 11 November 1966, the plaintiffs issued a writ in rem in respect of the claim against the Monica Smith. The defendants were described as the owners of the Monica Smith. At the date of the issue of the writ, the Monica Smith was still wholly owned by Smith.

On or before 4 January 1967, before the writ had been served, the Monica Smith was transferred by Smith to another company, Rederi AB Tankoil (Tankoil) and the name was changed to Monica S. On 9 February 1967 [the judgment erroneously says 1966], the writ was amended without leave and the description of the property proceeded against was altered to 'the ship Monica Smith now known as Monica S'. The description of the defendants was altered to 'the owners of the ship formerly called Monica Smith and now known as Monica S'. On the same day, the writ was served on the Monica S.

Tankoil entered a conditional appearance on 16 February 1967 and filed notice of motion to set aside the writ or service thereof. On 30 March 1967, Tankoil sold the Monica S to Stavros A Daifos who registered the Monica S in Greece. During the hearing on 26 April 1967, Brandon J gave leave to Tankoil to amend the notice of motion to ask for:

1. An order setting aside the amended writ and service thereof;
2. An order disallowing the amendment of the writ;
3. An order staying all proceedings against Tankoil or the Monica S; or
4. A declaration that no lien or charge or other right against the Monica S arose by reason of the issue of the writ or service of the amended writ.

The grounds for motion were also amended and were that:

1. Tankoil, who were the owners of the ship at the date of the amended writ, were not the owners at the date of issue of the writ or when the cause of action arose;
2. Tankoil were not and never had been persons who would be liable in personam on the claim;
3. the claim did not give rise to a maritime lien or other lien or charge on the ship;
4. Tankoil bought the ship on or about 23 December 1966, and registered the ship in their name in Sweden on 4 January 1967 without notice of any claims outstanding against any former owners of the ship;
5. the amendment of the writ was invalid and not in accordance with RSC Ord 20 r 1.

The plaintiffs opposed all the orders asked for in the amended notice of motion.

Held: Application dismissed.

The admiralty jurisdiction of the High Court and the manner in which it may be invoked are governed by the Administration of Justice Act 1956 (the Act). The Act provides that the High Court in admralty can hear and determine 'any claim of loss of or damage to goods carried in a ship' (s 1(1)(g)) and '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' (s 1(1)(h)). The admiralty jurisdiction of the High Court 'may be invoked by an action in rem against the ship or property in question' (s 3(2)). Section 3(4) provides that:

In the case of any such claim as is mentioned in paragraphs (d) to (r) of s 1(1) of this Act, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or control of, the ship, the Admiralty jurisdiction of the High Court … may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against –

(a) that ship, if at the time when the action is brought it is beneficially owned as respects all the shares therein by that person ...

The plaintiffs relied on those sections to entitle them to begin and continue the action. They argued that their claim was within paras (g) and (h) of s 1(1), and therefore a claim within the admiralty jurisdiction of the court. They further said that the claim arose in connection with a ship, namely the Monica Smith, now Monica S; that Smith, who would be liable on the claim in an action in personam, was the owner of the ship when the cause of action arose; and that, when the action was brought by issuing the writ, the ship was beneficially owned as respects all the shares therein by the same company.

Tankoil contended that the Act should be interpreted in the light of decisions prior to it, and that those decisions showed that a statutory right of action in rem only became effective on arrest of the res; and that s 3(4) of the Act was, as regards non-maritime lien actions against a ship, merely declaratory of the pre-existing law. Tankoil further submitted that a statutory right of action in rem was a procedural right or remedy, and not a substantive right.

The difficulty with the distinction between procedural and substantive rights can be artificial. The defence of limitation of time under the Limitation Act 1939 is a procedural defence, whereas a defence of limitation of time under art 3.6 of the Hague Rules is a substantive defence. But mostly the practical result of either defence if valid, is the same - the claim fails. Although a statutory right of action in rem is a procedural right, it does in practice enable claimants to be paid claims out of the proceeds of ships which they might not otherwise be able to enforce at all.

Upon a thorough examination of the authorities, Tankoil's contention that the law in force before the Act, a change of ownership after issue of writ but before service or arrest defeated a statutory right of action in rem is, on the balance of authority, wrong. Brandon J further stated that if this conclusion was erroneous, he would hold that the law was altered by the Act, because the terms of the Act are plain and admit only one construction.

Under s 3(4) of the Act, there are two requirements for proceeding in rem against a ship in connection with which a claim falling within paras (d)-(r) of s 1(1) arises. First, the person who would be liable on the claim in personam should have been the owner or charterer of, or in possession or control of, the ship when the cause of action arose. Second, at the time when the action is brought, the ship should be beneficially owned as respects all shares in it by that person. These are the only express requirements. There is no reason to imply a further provision that, in cases where the claim does not give rise to a maritime lien, if there is a change of ownership after an action is brought but before service or arrest, the right which is given to proceed in rem against the ship is thereupon to lapse. The jurisdiction which is invoked by an action in rem whether under ss 3(2), 3(3) or 3(4) is the jurisdiction to hear and determine the questions and claims listed in s 1(1). There is no reason why, once a plaintiff has properly invoked that jurisdiction by bringing an action in rem, the plaintiff should not, despite a subsequent change of ownership of the res, be able to prosecute it through all its stages, up to and including judgment against the res, and payment of the amount of the judgment out of the proceeds.

Tankoil are therefore not entitled to any of the relief asked for in their amended motion, and the motion must accordingly be dismissed.