AN ARRESTED SHIP

Evening Star, Issue 20312, 22 October 1929, Page 8

AN ARRESTED SHIP

CLAIM FOR CREW’S WAGES UNUSUAL CASE IN SUPREME COURT An unusual case, brought to recover sums advanced as wages to the crew of a small steamer, the -owners of which had gone into liquidation, was heard in the Supremo Court to-day by His Honour Mr Justice Kennedy. The action was brought by Messrs A. J • Allen, Ltd., Dunedin, to recover sums advanced by them as wages to the captain and crew of the steamer Oreti, and also for necessaries paid for and supplied to the steamer. Mr W. G. Hay appeared for the plaintiffs; Mr Lascelles for the Oreti Shipping Company, Ltd.; and Mr J. S. Sinclair for Alexander Dunn, the mortgagee of the ship. The facts were that the steamer was subject to a mortgage to Alexander Dunn, of Lellington, for £7OO, and, at the instance of the plaintiffs, she was arrested in Dunedin and by consent of the parties she was sold by the marshal of the court, the proceeds amounting to £625. The first mortgage on the steamer, however, amounted to £7OO, and there was not enough to pay it. The present action was to establish that the plaintiffs had a maritime lien in respect of their claim which took priority, and should therefore bo a first charge on the proceeds of the sale of the ship in accordance with Admiralty law. As regarded the claim for necessaries, this had been abandoned, leaving only the claim for the seamen’s wages and dock dues. Mr Hay said the action was brought in accordance with the Admiralty jurisdiction of the court. The ship was admitted to be a New Zealand ship, and was owned by the Oreti Shipping Company, which was incorporated m Christchurch. The ship was arrested in March, and after the arrest two parties intervened —the Oreti Company and Mr Dunn, who held the mortgage on the ship. Before the institution oi the proceedings for the arrest of the ship the company went into liquidation. Then the liquidation asked lor leave to sell the ship, and that was granted by the court, with the consent of Mr Dunn. Instead of proving a valuable asset, however, the ship proved to be worth only £625. The object of the present action was to make a claim upon the proceeds of the sale in accordance with Admiralty law. The claim for necessaries would not be maintained, but the plaintiffs contended they were entitled to the amount of the wages by a maritime lien which took priority over the mortgage. The plaintiffs acted as agents in Dunedin for the boat, and wore personally responsible to' the Harbour Board for harbour dues. The Harbour Board itself had a right by distress to recover its dues, and in those circumstanccs there should not be a dispute that the plaintiffs were entitled to the dues (paid. , . Mr Sinclair said the question of dock dues would be disputed Mr Hay said the amount of the claim for wages was £167 Is Bd, and for clock dues, £43, 7s lOd. It. was claimed that plaintiffs had a maritime lien, particularly in respect to wages. The person who paid the wages ot the crew of a boat stood in the shoes of the seamen and captain in regard to their maritime lien. Willian Thomas Grant, manager ot A. J. Allen and Co., gave evidence of his company’s transactions in regard to the s.s. Oreti, and stated that monthly statements were rendered. Since witness had acted as manager, the boat had been owned by the Oreti Shipping Co., Ltd. The ship traded between Dunedin. Invercargill, Oamaru, and Port Craig. It usually carried freight southward, and brought up timber. In October last, the mill at Port Craig closed down, and after that there was very little inward trade at all. His company continued its expenditure of money on behalf of the steamer, and statements wore rendered for expenditure made in January and February. In January, the captain asked witness for a cheque to pay the wages of the officers and crew, and gave him a receipt for £167 Is Bd. Witness also paid harbour and dock duos for. which the company was liable as agents for the vessel. No part of the ‘•■in foment for January had been paid. All his statements and accounts showed that lie had given credit to the steamer. To Mr Lascelles: It was a fact that his company was a shareholder in the Oreti Shipping Co., but he was not aware that the Oreti Shipping Co. was a shareholder in A. J. Allen, Ltd. Ho knew that Reese Brothers, Ltd., were managing agents for the Oreti Shipping Co., Ltd. Until the Oreti Shipping Co., Ltd. went into liquidation, his requests for cheques always went to Reese Brothers, Ltd. The dock dues were paid after the ship’s arrest. He admitted that he protected his company’s interest to some e:;tent by holding a certain amount of freight money. It had all been paid out in disbursements. Practically every month prior to January 1929, during the period of his company’s agency, he had made advances to the company for wages. To Mr Sinclair- Ho was always under the impression that a company looked to a vessel to meet its accounts and not to the shipping company which owned the vessel. Re-examined by Mr Hay, witness said his company had never received a dividend from the Oreti Shipping Co. His company was now the only one holding many shares in the Oreti Company, the others having been transferred to the Marlborough Timber Company, which was now in liquidation. His company held 500 shares and and the Marlborough Timber Company 4,457 shares. Arthur Joseph Allen, a director of A. J. Allen, Ltd., gave evidence as to the opening of his company’s account with the s.s. Oreti in 1923. Witness did nqt know whether D. Reese or the Marlborough Company owned the vessel. When the Oreti Shipping Company was formed, witness understood it had taken over the vessel, but his company earned on the former arrangement. Witness was not actually accp'ainted with the financial position of the Oreti Shipping Company, and although he had been a director, lie had not attended any meetings. To Mr Lascelles: Witness understood there was a mortgage on the ship hut to whom it was and its amount he did not know. They looked to Mr D. Reese to keep them acquainted with what was happening in regard to tire Oreti Shipping Company. Mr Reese had told him there was no need to attend the meetings of directors and that the sending out of notices was a mere formality. Witness learnt casually only in May or June of this year that M'Callum and Co. had held a mortgage of £3,274 on the vessel. They had looked to Reese Brothers, Ltd., for payment of the moneys they had expended notwithstanding that they wore aware that Ree c e Brothers were agents r the Oreti Shinning Company. Mr Lascelles said that his contention

•vas that just as the necessaries claim Tailed so would the claim for wages in the action fail. He submitted that before plaintiff could establish a right to appear in the suit and found a mari-

time lien ho must show first of all that he had become subrogated to one _ or other or both of the common maritime liens. He would have to establish that the master and seamen in this case hard a lien for the particular wages, and that the plaintiff company had obtained an assignment of the master’s _ right, that the payment by the plaintiff was a payment made upon the credit of the ship. The evidence would show that A. J, Allen, Ltd., looked to the Oreti Company for payment, and not to the ship. , Evidence was given by Leslie C. Petrie, secretary, of Christchurch, who said he wms the liquidator of the Oreti Shipping Company. He was employed by Reese Bros. Witness explained the basis on which A, J. Allen, Ltd., were employed as agents, and said the cheques sent to A. J. Allen were drawn on the account of the Oreti Shipping Company. . . To Mr Hav: Reese Bros, originally had 1,000 shares in the company, and at present held only one. Mr Hay; All the shareholders except A. J. Alien transferred their shares to the Marlborough Timber Company, the original shareholders retaining one share each? Witness: Yes. The Marlborough Company is now in liquidation?—Yes. The only substantial shareholder in the Oreti' Company is A. J. Allen, Ltd.? —Quite correct. In further reply to Mr Hay witness said he did not doubt A. J. Allen, Ltd., when they said they did not know anything about M'Callum and Co.’s mortgage. He agreed that it looked ns if Allen had not troubled about the financial condition of the Oreti Company. The boat ivas still in the hooks at £7,000. The purchase price of it was £4.500. Mr Las'-elles: Although the books show the boat at_ £7,000, did you expect to get anything like that amount "or her? Witness said he could not say, T’mt was a matter for experts. Legal argument was commenced, and the case was adjourned till the afternoon.