Alston Kent v The Owners of the Ship M.v “Glorious”

• Jurisdiction: Grenada
• Judge: Glasgow, J
• Judgment Date: 10 January 2018
• Judgment citation (vLex): [2018] ECSC J0110-1
• Docket Number: CLAIM NUMBER: GDAHAD 2017/0003
• Court: Supreme Court (Grenada)
• Date: 10 January 2018

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

IN THE HIGH COURT OF JUSTICE

(CIVIL)

CLAIM NUMBER: GDAHAD 2017/0003

Admiralty Claim in Rem against the ship M.V “Glorious”

Between:

Alston Kent

Claimant/Respondent

and

The Owners of the Ship M.V “Glorious”

Defendant

Kim Ceasar Jomo De Coteau

Applicants

Appearances:

Anselm Clouden of counsel for the Claimant/Respondent

Derick Sylvester and Cathisha Williams of counsel for the Defendants/Applicants

Glasgow, J

1 On 30 ^th October 2017, the Applicants filed an application supported by affidavit in which they seek the discharge of an arrest warrant issued against the vessel “Glorious” (“Glorious”). The grounds of the application are twofold – (1) that the claimant, Alston Kent (“Mr. Kent”) failed to disclose material information to the court granting the arrest warrant. The arrest warrant must be discharged for the alleged material non-disclosure; and (2) the claim and the resulting arrest warrant is of no effect since the claim is one in personam and not a claim in rem.

2 Mr. Kent obtained the arrest warrant following the filing of a claim against Glorious. The claim, as amended, sought relief in the form of –

• (1) A declaration that Mr. Kent is the owner of 32/64 shares in Glorious;

• (2) An order for possession of Glorious;

• (3) An order for an account to be taken of the vessel's earnings and disbursements;

• (4) Judgment against Glorious in the sum of $120,000.00;

• (5) Interest;

• (6) An order for appraisement and sale of Glorious;

• (7) Further and other relief; and

• (8) Costs

3 Mr. Kent's complaint on his claim is that he sent or gave money to his nephew, Jomo De Coteau to purchase Glorious further to a verbal agreement that he would be part owner of the vessel. His claim avers that the money that he gave to Mr. De Coteau was used to purchase and outfit Glorious. However, besides a few payments made by Mr. De Coteau, he has not received the benefit of his investment or an account of the profits earned from Glorious. Additionally, Mr. De Coteau has refused to hand over possession of the vessel to him.

4 Initially, Mr. De Coteau applied to the court on 23 ^rd October 2017 for the vessel to be admitted to bail. However, 7 days later on 30 ^th October 2017, Mr. De Coteau and Mr. Kim Caesar (“the applicants”) who are registered owners of Glorious, made the discharge application.

The Applicants' Arguments for the Discharge of the Arrest Warrant Material Non-disclosure

5 In respect of material non – disclosure, the applicants allege that Mr. Kent failed to disclose on his request for the arrest warrant that –

• (1) They are the registered owners of Glorious;

• (2) They obtained a loan from Republic Bank for the purchase of Glorious which loan was used to cover the full purchase price for the vessel. Lands belonging to the applicants' parents, a guarantee from their father and a life insurance over the life of Mr. Ceasar were given to the bank as the security for the loan; and

• (3) The sum of $35,000.00 which Mr. Kent alleged to have been part of the sums given to Mr. De Coteau was in fact a deposit made by Mr. Kent to his bank account and not a withdrawal therefrom.

6 The above stated facts are said to be in the knowledge of Mr. Kent and should have been disclosed to the court. The court ought to vacate the arrest warrant because of Mr. Kent's failure to make the necessary disclosure. In support of these contentions, the applicants rely on the Rainbow Spring 1 to make the point that the duty of disclosure applies to arrest warrants in admiralty proceedings. The applicants further argue that CPR 70.9 which specifies the procedure to be followed to obtain an arrest warrant for a vessel is identical in material parts to Order 70, rule 4 of the Singaporean rules of court. The Rainbow Spring is a decision of the courts of Singapore.

7 The duty to make a full and frank disclosure of all material facts in cases of an application for a warrant of arrest of a ship is said to be underscored by the fact that the application is indeed one for an order made ex parte. In the circumstances, ‘ the ordinary rules of disclosure with regards to such applications apply.’ 2

The applicants rely on the pronouncements of Donaldson J in Bank Mellat v Nikpour 3 to the effect that –

This principle that no injunction obtained ex parte shall stand if it had been obtained in circumstances in which there was a breach of the duty to make the fullest and frankest disclosure is of great antiquity. Indeed, it is so well enshrined in the law that it is difficult to find authority for the proposition; we shall know it; it is trite law. But happily we have been referred to a dictum of Warrington LJ in R (on the application of Princess Edmond de Polignac). v Kensington Income Tax Commissioners [1917] 1 KB 486 at 509. He said:

‘It is perfectly well settled that a person who makes an ex parte application to the court – that is to say, in the absence of the person who will be affected by that which the court is asked to do – is under an obligation to make the fullest possible disclosure of all material facts within his knowledge, and if he does not make that fullest possible disclosure, then he cannot obtain any advantage he may have already obtained by means of the order which has thus wrongly been obtained by him. This is perfectly plain and requires no authority to justify it.’

8 These views were echoed by Gibson LJ in Brink's Mat Ltd v Elcombe 4 to the effect that

The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p. 504, citing Dalglish v. Jarvie (1850) 2 Mac. & G. 231, 238, and Browne-Wilkinson J. in Thermax Ltd. v. Schott Industrial Glass Ltd. [1981] F.S.R. 289, 295.

9 The material facts said to be undisclosed on the application for the arrest warrant or falsehoods therein are –

• (1) The allegedly false assertion that the claimant is the owner of 32 shares in Glorious and that he contributed US $17,228.00 towards the purchase price of US $53,000.00. The applicants say that the vessel is in fact registered in the name of the applicants and as such Mr. Kent is not the owner of 32 shares in Glorious;

• (2) The purchase of the vessel was fully financed by a loan obtained by the applicants from Republic Bank. The loan was secured in the manner stated above in this ruling.

10 The applicants submit that while the court retains the discretion to discharge the arrest warrant for non – disclosure, it is not every non – disclosure that may trigger an automatic discharge of the arrest warrant. The applicants again rely on the learning in the Brink's Mat case where their Lordships instructed that –

(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the application or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the application to make all proper inquiries and to give careful consideration to the case being presented.

(7) Finally, it ‘is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded’: per Lord Denning MR in Bank Mellat v Nikpour [1985] FSR 87, 90. The court has discretion, notwithstanding proof of material nondisclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on term:

‘When the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant … a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed’ per Glidewell LJ in Lloyds Bowmaker Ltd v Britannia Arrow Holdings plc [1988] 1 WLR 1337, p 1343H–1344A.

11 The applicants' further submit that 5–

Whether the fact is relevant to the making of the decision whether or not to issue the warrant of arrest, that is, a fact which should properly be taken into consideration when weighing all the circumstances of the case, though it need not have the effect of leading to the different decision being made.

12 Applying the recited dictum in The Damavand to the present facts, the applicants argue that the original claim filed before the arrest warrant was obtained should be scrutinised by the court as this was the material on which the court relied to issue the warrant of arrest. In this regard, the applicants present section 18 of the Shipping Act, Cap 303 (the Act) as the basis for their claim that Mr. Kent is not the owner or part owner of the Glorious. The applicants' submission is that section 18 of the Act 6 —

Provides for the registration of fishing vessels, like the subject ship and that the property in a registered ship shall be divided into sixty – four (64) shares. Thus only the registered owner can hold shares in the vessel. The inference to be drawn from the registration certificate in the name of Jomo De Coteau and Kim Caesar … is that they are the joint owners and the holders of 64 shares in the ship.

13 The applicants ask the court to find that in the face of the state of the registration of Glorious, the statement on Mr. Kent's claim that he is the owner to the extent of32/64 shares is materially false. The applicants' disclosure of the mortgage raised to purchase the vessel also serves to demonstrate...