XCHRX THE TAT YAU 8

HCAJ13/97 and AJ26/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY JURISDICTION NOS.13 OF 1997 & 26 OF 1998

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J U D G M E N T

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1. On the night of 16th January 1997, seven containers were stolen from a barge, the "Tat Yau 8", whilst she was berthed near the Wah Luen Warehouse on Tsing Yi Island. This single larcenous act in turn spawned one in personam and two in rem actions in the High Court, together with a summons dated 3rd April 1998 urgently taken out by barge owners in the two admiralty actions, which application has been the subject of spirited debate over the course of three separate hearings.

2. This, then, is the judgment upon that application, which has involved, inter alia, examination of the somewhat arcane law and practice relating to bail bonds. Before turning to the substance of the debate, however, I should, I think, set the scene.

The Background Facts

3. The basic facts are in short compass, and in themselves are relatively uncontroversial.

4. The story starts with the carriage of twelve container loads of TV colour picture tubes which were to be shipped from Busan, Korea to Fuzhou, China, with transshipment to take place in Hong Kong. In fact, the cargo was carried by the MV "Ocean Brilliancy" from Busan to Hong Kong, where it was discharged onto the dumb steel lighter "Tat Yau 8", pending onward carriage to Fuzhou by another vessel, the "Lu Yan".

5. And it was whilst the containers containing the TV picture tubes were on the "Tat Yau 8" that the theft of the seven containers occurred, the circumstances of which, it is alleged, are such as to give rise to an inference that the barge owners, as bailees of the cargo, failed to exercise proper care of the cargo in their possession; in this connection I am told that the stolen cargo in fact comprised 224 cartons containing 6,144 colour TV picture tubes having a total value of some $4.4 million.

The Ensuing Litigation

6. As a result of these events, three pieces of litigation were commenced in Hong Kong. Two of these actions were by owners of this cargo of TV tubes :

First, in AJ 26 of 1998, wherein by writ in rem issuing from the Registry on 15th January 1998, cargo interests sued Owners of the "Tat Yau 8" in bailment, negligence and conversion for the loss of the picture tubes in the seven stolen containers; and

Second, in CL 13 of 1998, wherein by writ issued on 16th January 1998, cargo interests sued, as 3rd Defendant therein, Dongnama Shipping Co. Ltd. ("Dongnama"), the carrier which had issued two Bills of Lading, both dated Seoul, Korea, 10th January 1997 in respect of the carriage and delivery of the cargo from Busan to Fuzhou via Hong Kong, and as 1st and 2nd Defendants therein the individual owners of the barge "Tat Yau 8".

7. In addition to being the 3rd Defendant in CL 13 of 1998, Dongnama had, almost a year earlier, also issued their own in rem proceedings, namely AJ 13 of 1997 commenced on 24th January 1997, but one week after the theft of the seven containers in question; in that action Dongnama maintained suit against Owners of the "Tat Yau 8" in bailment, negligence and conversion, claiming in addition "an indemnity and/or contribution towards any liability the Plaintiffs have incurred or may incur to any third parties ..." At this early stage Dongnama clearly were anticipating a claim by cargo interests against themselves arising from the loss of the cargo, and apparently were getting in first, so to speak.

The 1st Arrest of the "Tat Yau 8"

8. On 25th July 1997 the "Tat Yau 8" was arrested for and or behalf of Dongnama, the Plaintiff in AJ 13 of 1997, whereby security was sought against the invoice value of US$557,312 relating to the contents of the seven stolen containers of television tubes.

9. An appraisal of the barge valued the vessel at HK$2.5 million, (a figure which has not been contested during the present hearing) and security to Dongnama was provided, and the barge released from arrest, by way of a Bail Bond dated 30th July 1997 issued pursuant to Order 75 rule16(1) by The Ming An Insurance Co. (HK) Ltd., and signed by a Director thereof, one Mr Cheng Kwok Ping. In the circumstances of this case it would assist, I think, to set out in full the particular terms of this Bail Bond as issued to the Hong Kong Court in AJ 13 of 1997 :-

"__________________

BAIL BOND
(O.75 R.16(1))

__________________

WHRERAS this Admiralty action in rem against the above-mentioned property is pending in the High Court and the parties to the said action are the above-mentioned Plaintiffs and Defendants.

NOW, THEREFORE, WE The Ming An Insurance Co (HK) Ltd, 14/F China Insurance Group Building, 141 Des Voeux Road Central, Hong Kong hereby submit ourselves to the jurisdiction of the said Court and agree that if they, the above-mentioned Defendants, do not pay what may be adjudged against them in this action, with costs, or do not pay any sum due to be paid by them in consequence of any admission of liability therein or under any agreement by which this action is settled before judgment and which is filed in the said Court, execution may issue against us, our executors or administrators, goods and chattels, for an amount unpaid or an amount of HK$2,500,000 (say, Hong Kong Dollars Two Million Five Hundred Thousand) together with interest thereon to be assessed.

	(Sgd)____________________
	Director Cheng Kwok Ping The Ming An Insurance Co (HK) Ltd"

The 2nd Arrest of the "Tat Yau 8"

10. Shortly after the issue of the writ in AJ 26 of 1998 in mid January 1998, cargo interests, through their solicitors Messrs Clyde & Co., also arrested the "Tat Yau 8" on 31st March 1998, and it was this second arrest which led to the expedited application, on behalf of the barge owners, to release it from arrest.

11. In this connection, Mr Sheppard of Messrs Holman, Fenwick and Willan, acting for Owners, took out a short-served summons on the afternoon of Friday, 3rd April 1998, for the following categories of relief :-

First, the release of the "Tat Yau 8" from arrest on the ground of material non-disclosure;

Second, a procedural order for the effective consolidation of the three existing actions, including the transfer of Action No.CL 13 of 1998 to the Admiralty list; and

Third, and as an alternative to the release of the vessel, an application that the Bail Bond already filed in AJ 13 of 1997 be amended so as to reflect the claims as they now existed in the three Actions.

12. In the event, it was not possible to resolve the case that afternoon (two further hearings were ultimately required for the completion of argument), and in the interim the practical solution was devised whereby a conditional Bail Bond was put up by Owners' insurers to effect the release of the vessel from this second arrest, with the provision for that Bond to be withdrawn or to be made unconditional dependent upon the result of Owners' application. And so it is to the substance of this application that I now turn, under what seem to me to be the three relevant heads as they were canvassed during argument.

1. Material non-disclosure

13. Mr Sheppard forcefully submitted that in securing the arrest of a vessel, the Plaintiffs' obligation was to disclose all information material to the exercise by the Court of its discretion : see The "Harima" [1987] HKLR 770, applying The "Vasso" [1984] 1 Ll LR 235. In this case, said Mr Sheppard, cargo interests failed to disclose all relevant information in the affidavit leading to the arrest sworn on 23rd January 1998 in that they did not disclose (a) that on 16th January 1998 cargo had commenced proceedings in personam in CL 13 of 1998 in respect of the same loss against both Barge Owners and Dongnama; and (b) (and more importantly) the fact that on 9th January 1998 cargo interests had obtained full and adequate security for their own claim against Dongnama in CL 13 of 1998, as had been confirmed by fax dated 17th January 1998 from Dongnama's solicitors, Messrs Richards Butler, to Messrs Holman, Fenwick & Willan; or, put another way, that Cargo Owners effectively were secured in full for what were essentially the same claims as those for which the vessel had been arrested for a second time.

14. Both these matters were known to the solicitors for cargo interests, and were facts clearly material to the grant of the warrant of arrest which had been taken out to obtain additional security in respect of the same loss, submitted Mr Sheppard. And even if cargo interests were not then aware of the first arrest of the barge, and the provision of bail, they were under a continuing duty to advise the Court of any information relevant to the exercise of the Court's jurisdiction. This was just such a relevant matter, and the appropriate course for cargo to have taken, asserted Mr Sheppard, was to have applied to intervene in the existing rem proceedings, that is AJ 13 of 1997, and to have sought to have been added as a beneficiary in respect of the Bail Bond which had already been provided.

15. In response, Mr Heath, and latterly Mr Clifford Smith, on behalf of cargo interests, disputed these contentions on the basis of materiality and relevance. In his Affidavit of 3rd April 1998, in dealing with the double security point, Mr Heath makes no bones about the fact that he approved the terms of the affidavit in question, and asserts his responsibility therefor. He says, in part, :-

"... I did so with full and direct knowledge of the security provided for the Plaintiffs' claim against Dongnama Shipping Co Limited (hereinafter 'Dongnama') in respect of the same loss which is the subject matter of the claim against the Defendants in this action. I did not believe nor do I believe the fact of the full security from Dongnama for the Plaintiffs' claims against Dongnama was, is or could be in any way a matter which might be material, let alone would be material, to the application of the arrest of the 'TAT YOU 8' nor that it should be disclosed to the court on the basis of full and frank disclosure in the context of an application to arrest the 'TAT YOU NO 8' to secure the Plaintiffs' claim against the Defendants in this action."

16. In that Affidavit Mr Heath further distinguished between the Plaintiffs having obtained full or adequate security for their contractual claim against Dongnama from the Plaintiffs' entitlement to proceed with their action and secure their claim in tort against the Defendants, submitting that "One or other or both of the Defendants in this action and Dongnama may be liable for the Plaintiffs' claims, and in my submission the Plaintiffs are at liberty to pursue their claim against one or other or both of these parties."

17. In addition, Mr Clifford Smith on behalf of cargo interests emphasized that the potential liability of Dongnama and barge owners is and was not a joint liability, the parties being liable in different causes of action, one in contract and the other in tort; accordingly, the material non-disclosure argument was misconceived, he submitted. It was not alleged that cargo interests had obtained satisfaction for their claim, and there was no basis for the contention that cargo came under any duty to disclose either the existence of the earlier in personam action against Dongnama, namely CL 13 of 1998, or the fact that security had been obtained from Dongnama; it was only in the event that Dongnama were to satisfy cargo interests' claim for the loss of the cargo that the action against barge owners would cease to be maintainable. Moreover, the amount ultimately recoverable from Dongnama may turn out to be significantly less than that recovered from barge owners, he said, not least by reason of Dongnama's possible right to limit its liability under its own contractual terms.

18. In my judgment this latter point carries considerable weight. As Mr Heath's second Affidavit points out, with reference to the terms of the Bills of Lading issued by Dongnama, there will be different issues applicable to the Plaintiffs' claim in contract against Dongnama and the Plaintiffs' claim in tort or bailment against the Owners of the "Tat Yau 8", and I accept the contention that it would be premature to conclude that if the Plaintiffs' claim succeeds against barge owners, the Plaintiffs' claim will also succeed for the full amount against Dongnama.

19. Additionally, Mr Heath's second Affidavit confirms :-

" ... that neither I, nor to the best of my knowledge and belief anyone else in my firm, had any knowledge whatsoever of the Bail Bond provided by the owners of "TAT YAU 8" in High Court Action AJ13 of 1997 as security for Dongnama's claim until the 1st April 1998 when a copy was sent by fax by Holman Fenwick & Willan. Indeed I do not think my firm had any means of discovering the existence of the Bail Bond, unless advised of it by other parties while we were not until 1st April 1998. A copy of the security for the Plaintiffs' claim against Dongnama which was received on the 9th January 1998 (refer paragraph 10 of my first Affidavit) is exhibited (pages 30 - 31 JMH-2'). This secures the Plaintiffs' claim for a total loss of 224 cartons of TV tubes carried under the Bills of Lading exhibited to this Affidavit up to the sum of US$570,000 plus interest and costs. As could be expected, this security only covers sums due from Dongnama to the Plaintiffs."

20. In my view Mr Smith is correct in his contention that in arguments of this nature, materiality constitutes the crucial benchmark, and that it is non-disclosure upon the issue of jurisdiction, and satisfaction of the statutory jurisdictional requirement to bring the action in rem, which is the key. In this context Mr Smith referred me to the judgment of Sir Alan Huggins, V-P in The "Harima", op. cit., in particular at page 774, a case in which the Court of Appeal had dismissed an appeal from the judgment of Hunter J (as he then was), who himself had dismissed an application to discharge a warrant of arrest on the ground of material non-disclosure. For present purposes, I think that I can do no better than to quote from the judgment of Hunter J in that case, wherein the learned Judge observed :-

"It seems to me that on an application for a warrant under O 75 r 5, the Court's first concern is to see whether the facts alleged prima facie bring the plaintiff within one or other of the relevant subsections in section 20(2) [i.e. now section 12A of the Supreme Court Ordinance]. That is the main purpose of the filtering process established by Rule 5."

21. It is noteworthy that this dictum of Hunter J also found favour in the Court of Appeal in The Owners of Cargo lately laden on board the Ship or Vessel "Trust", Civ App No.164 of 1991 (unreported), an authority not referred to in argument before me. In that case the Court of Appeal rejected the allegations of non-disclosure relating to an undertaking given by the Plaintiffs against release of cargo and other matters sounding to the merits of the action, and in my view the broad approach of the Court in the "Trust" is consistent with Mr Smiths' point that in this context materiality essentially goes to jurisdiction.

22. Accordingly, notwithstanding the forceful submissions which have been addressed to me by Mr Sheppard, I am not minded to accede to his contention that this arrest should be set aside on the basis of material non-disclosure, in particular on the basis that there had been non-disclosure of the security obtained by the Plaintiffs in its claim against Dongnama. Nor do I accept his assertion in this regard that the arrest of a vessel is an 'exorbitant' jurisdiction. Whilst very considerable care must be devoted to accurate compliance with the statutory requirements for arrest, the centuries old exercise of jurisdiction by service of proceedings upon the res within our waters is simply a facet of the territoriality principle which constitutes the primary basis for the establishment of jurisdiction under our legal system.

23. The application in paragraph 1 of the Summons is dismissed.

The Issue of Consolidation

24. I can, I think, deal with this aspect of the case shortly. It seems to me that for present purposes, this relief is premature. Whilst there may well be cogent arguments in support of "consolidation" in some form - I can, for example, see obvious merit in arranging to try these actions before the same judge at the same time or one after the other - in my view there is also merit in the suggestion advanced by Mr Heath on behalf of cargo interests that this is a matter best delayed and considered when the pleadings in the respective actions are fully constituted, and it can be seen how these claims have developed; indeed, at this point I understand that the Plaintiffs' Writ in CL No.13 of 1998 has not even been served.

25. So that I agree with the submission that to make any procedural order as to concurrent hearings of these actions, or to order the transfer of CL 13 of 1998 into the Admiralty list, is to jump the gun somewhat. In my judgment this issue can be conveniently revisited when the pleadings in these three actions have been completed.

26. It follows therefore that so far as the relief sought at paragraph 2 of the Summons is concerned, I order that this aspect of the application be adjourned sine die with liberty to restore.

Amendment of the existing Bail Bond

27. The precise form of relief claimed in the alternative to an order for the discharge of arrest on the grounds of material non-disclosure is as follows :-

"The terms of the Bail Bond filed in AJ-13 of 1997 be altered in the form attached in order to cover both claims of the Plaintiffs in the consolidated action and the Plaintiffs in AJ-13 of 1997."

28. Mr Sheppard's argument on behalf of barge owners runs essentially thus : Owners have already provided a bail bond in respect of Dongnama's claim in the sum of HK$2.5 million, which represents the full value of the res. Moreover, Owners had offered, via their solicitors' fax of 1st April 1998, to seek amendment of the bail bond already provided to cover Dongnama's indemnity claim and to cover also cargo interests' direct claim against barge owners. And it is right that the barge owners should only be required to put up a single bail bond, amended in the terms proposed, in respect both of the carriers' indemnity claim and cargo's direct claim, because both claims arise from the same incident and represent the same loss, the bail bond represents the res (there being no controversy as to the figure of HK$2.5 million), it is vexatious and oppressive in the circumstances for cargo interests to require barge owners to provide security twice over, and that as a matter of policy any result that discourages the provision of bail should be discouraged.

29. For his part Mr Heath, for cargo interests, says in his affidavit evidence that he is not aware of any ground upon which barge owners legitimately can object to the provision of security up to the value of the vessel "twice over" for two different claimants with different claims arising out of the same loss, pointing out that the claims of cargo interests and carrier against barge owners are different in specie however much they may be categorised as arising from the same incident.

30. Whilst Mr Hirst on behalf of Dongnama, the Plaintiff in AJ 13 of 1997, whose client of course already has its bail bond in hand, strongly objects to any interference with his client's security which has been in place since July 1997, emphasising the differing causes of action and the respective losses in the respective actions by cargo and Dongnama against Owners, and asserting further that the existing bail bond in favour of Dongnama could not and cannot be varied as a matter of jurisdiction.

31. When the bond was initially provided to Dongnama, there was no suggestion that it would constitute a fund for all claimants, Mr Hirst submitted; in fact, for all practical purposes there was no effective difference between a present day bond and the ordinary (and more common) P & I Club Letter of Undertaking. Mr Hirst also contrasted the proffering of a bail bond with the other well-defined avenues open to owners at the time of arrest in Admiralty actions, such as the issuance of limitation proceedings, which if successful will result in the ascertainment of a calculated fund, or in permitting the vessel to be sold by the Court, thereby washing the vessel clean of all liens and claims. These established alternatives were clearly distinguishable, he said, from the putting up of a bond which in each case "will respond to a particular judgment", and such a bond in no sense represented a common fund for each and every claimant arising from a particular loss.

32. In a nutshell, therefore, Mr Hirst's argument was that the risk in each case was and is to the full value of the bond in question, subject only to the Owner's statutory right to limit. To the contrary, that which Mr Sheppard was attempting to do on behalf of Owners, he said, was to embark upon a de facto limitation exercise for all claims, not by means of a free standing limitation action, the established statutory option, but via the amendment of an existing bail bond in another Admiralty action, a bond which was responsive to judgment in that action, and in that action only. In short, having made his election at the time of arrest and having issued his bond, Mr Sheppard was in no position now to mitigate the rigours of that bond. This approach, contended Mr Hirst, was supported by authority and was entirely consistent both with principle and with the existing maritime conventions dealing with arrest and limitation.

33. Such therefore were the parameters of the argument, although no doubt such descriptive compression fails to do justice to the wide-ranging debate. Be that as it may. On the narrow issue of the variation of the Dongnama bail bond, which is, of course, the only issue before me on the face of the present summons, I have come to the conclusion that Mr Hirst is right, and that, absent consent both of the sureties and the Plaintiffs in that action, this Court has no jurisdiction to interfere with the wording of the bond so as to make it susceptible to claims of different parties in different actions. I should add, also, that if I am wrong as to jurisdiction, I should have been disinclined to exercise a discretion to amend, given the history and circumstances of the case and given the alternative courses of action which were undoubtedly open to the barge owners at the date of the arrest of which complaint is made. In my judgment, the bail bond, in its current incarnation at least, is indeed "personal to the action", to adopt Mr Hirst's attractive phrase; it represents the res in that action, and accordingly it is not susceptible to enforced amendment or variation as Owners now suggest.

34. This conclusion appears consistent not merely with principle but also with the views of learned commentators. See, for example, Thomas, Maritime Liens (1980) Vol.14, British Shipping Laws, at paragraphs 512-514 (at pages 287-290) for what is a useful survey of this area. And whilst the learned author does not refer specifically to the point in issue in these proceedings, he nevertheless observes as follows :-

"... bail operates not only to release the res but also to extinguish the right in rem against the res. Such a right is thereafter transferred against the bail which becomes the subject of the proceedings. The provision of a sufficient bail however extinguishes only the lien in respect of which it was given. It leaves untouched any other lien enjoyed by the same claimant and which arises from a separate cause of action. In addition it does not affect the rights of third party lienees who are not a party to the bail...."

It is also noteworthy that in footnoted support of this passage the learned author relies on the leading cases of The Saracen (1846) 4 Not Cas. 498, The Clara (1855) Swab.1 and also The Roberta [1938] P.1.

35. It seems to me to be tolerably clear from the foregoing extract that this authority is against Mr Sheppard's fundamental contention that, in effect, once a bail bond is in place then that suffices to constitute a fund against which all claimants against the vessel can take aim, so to speak, at least in instances of loss arising from the same incident.

36. I would add, further, that I do not consider that the analytical position is significantly advanced by two Canadian authorities which were uncovered by the diligence of Mr Sheppard towards the end of the argument, namely the decisions in The "Thrift" [1905] 10 Ex CR 97 and The "Tuo Hai" [1991] 48 FTR 59, wherein, upon broadly similar facts in each case, a vessel was arrested at the hands of one claimant and, prior to the provision of bail for the first arrest, there was a further arrest shortly afterwards by a second claimant, the claims of the first and second claimants arising out of the same incident.

37. In The "Thrift" it appears that the judge at first instance in fact did order separate bail up to the full value of the res to be provided in both actions, a decision that was not overturned upon appeal, so that it seems to me that Mr Hirst was correct in suggesting that, apart from the obvious distinction on the facts, this case does not support the Defendants' application in the present case, but rather supports the argument that owners of the barge should be required to provide separate bail to the value of the barge in Action AJ 26 of 1998 in addition to the bond already provided in AJ 13 of 1997.

38. It is further evident from the report of The "Thrift" that what the appellant had sought was for the two separate arrest actions to be consolidated and the vessel then to be released against the provision of bail in the consolidated action, and it is equally clear that the Court recognized difficulties of consolidation in that case, the Appellate court having difficulty with the proposition that, absent consolidation, owners of the"Thrift" could secure the release of the vessel by the provision of a single bail bond up to the value of the res. Accordingly, I attach little significance to the obiter observations of the Exchequer Court to the possibility of ordering one bail bond to be given for the benefit of all claimants, and the possibility that "the form of bail bond in use could be adapted to meet such a case"; indeed, at the conclusion of the particular passage upon which Mr Sheppard relies, the Court itself, in answer to such a hypothetical scenario, continues as follows :-

"... But that might possibly raise questions that would render the security to each claimant of less value than separate bail bonds. And it does not appear to me to be unreasonable for a judge under such circumstances to say to the defendants : If you wish to secure the release of your property by giving bail bonds, you must give the bail to each plaintiff that you would have to give if his action and claim were the only action and claim before the court ...."

39. So I do not think that The "Thrift" assists Mr Sheppard's argument. Turning now to The "Tuo Hai", I do not find this case particularly helpful either, in that it is not apparent whether what seems to be two arrest actions in fact were consolidated and single bail provided within that consolidated action; and in any event, as Mr Hirst points out, in observing that :

"From the authority of The' Thrift', a single fund of money or bond to the value of the res paid into Court ... is all that I can order",

Rouleau J seems to have misunderstood the actual decision in The "Thrift", so that on that basis also it stands as doubtful authority in support of Mr Sheppard's argument.

40. It follows from the foregoing, therefore, that I am against the applicants upon this third, and alternative, head of their summons, namely, the proposed amendment to the existing Bond, and I decline to order the relief prayed for at paragraph 3(a) thereof, with the consequence that sub-paragraphs (b) and (c) do not arise.

41. Strictly speaking this is as far as the Court presently needs to go, the summons having been dismissed in its entirety for the reasons given. It would, however, be unrealistic not to recognise that the ambit of the extended argument went further than was strictly necessary to deal with the relief sought on the face of the summons. As earlier alluded, a plank of Mr Sheppard's able submissions on behalf of barge owners was that even if owners were required in AJ 26 of 1998 to provide a separate bail bond to cargo interests up to the value of the barge, ultimately owners could not be liable to pay more than the value of the barge in satisfaction of all claims, the rationale being that the bail bond stands in lieu of and represents the arrested res, and that since in rem liability can be no more than the value of the arrested vessel, then one bond stands for all claims arising from the incident causing the loss. So that if separate bonds had to be put into place, then a form of rating within the terms of each bond must be effected to ensure that the ultimate recovery was no more, in total, than the agreed value of the barge. That at any rate was the gist. And if authority was needed for the proposition that Owners could not be liable to pay more than the value of the barge in satisfaction of all claims, support was derived from dicta in The "Thrift", wherein the Exchequer Court judge is reported as saying, op. cit. at 104 :-

"I shall decide as to the respective rights of the parties, and if the Plaintiffs succeed, I shall determine the amount for which the bail in each action will be liable in respect of the property under arrest ..."

42. Although initially there are attractions in a "rating solution", on reflection I am far from sure that this would be correct. I do not now finally decide the point since there is as yet no requirement for me so to do, the present application having been determined. But I am bound to say that, on reflection, such a rating approach does not seem to me to sit happily with principle, and it is not easy to see why the undertaking given to the Court by the surety in any particular bond in any particular action should be assimilated, in effect, to the proceeds of judicial sale of the res which remain in Court pending crystallization of claims and determination of priorities.

43. So far as the dictum from The "Thrift" is concerned, this statement does not appear necessarily to preclude each Plaintiff from enforcing their individual claim up to the full amount of that bail, assuming always that the Plaintiff is able to prove its claim to that level and that the ship owner has not moved to exercise his statutory right to limit his liability. On a more general level, also, Mr Sheppard's argument seems to run into difficulties. Just as bail in one action cannot, so it seems to me, represent the res and provide a fund for the benefit of all claimants in all actions, it appears also to be the position that the posting of a bail bond in lieu of the res in any one action arguably does not suffice to preserve the res sacrosanct if the amount of the bail is insufficient to meet the full amount of the judgment debt. In this connection Thomas on Maritime Liens, op. cit., comments as follows, at para.514 (p.290) :-

" Although a sufficient bail operates to extinguish existing liens it no longer secures for the res owner a total immunity from associated legal process. As observed earlier a defendant who enters an appearance submits his own personal liability in addition to that of the res, and is in consequence liable to the full amount of the judgment debt. In respect of any difference therefore between the value of the bail and the judgment decreed the res may additionally be taken in execution.

'Therefore, even if bail is given to the full value of the ship, the ship can be taken in execution by the sheriff if the bail proves insufficient to satisfy the amount of the judgment debt.' - per Bucknill J. in The Majfrid (1943) 77 LI. L.R. 127 at 129"

44. Whilst admittedly argument was not addressed to this aspect of the matter, it seems likely that the prospect of the res additionally being taken in execution is another feature serving conceptually to distinguish the owner's remedy of the provision of bail on the one hand from the alternative remedies of sale by the Court pendente lite or the issuance of limitation proceedings (and the possible payment into Court of a limitation fund). However, I shall make no further comment, for present purposes at least; I am perhaps in danger of venturing too far into uncharted waters, and I bear in mind that in the circumstances of this case this argument may be revisited in future applications.

Order

45. The result of what has been an interesting, if attenuated, application, is that paragraphs 1 and 3 of the Defendants' Summons in both AJ 13 of 1997 and AJ 26 of 1998 are dismissed, with paragraph 2 thereof being adjourned sine die to a date to be fixed; in this connection I note that no summons for transfer appears to have been issued in CL 13 of 1998, as to which no point is taken, and doubtless this omission can be remedied upon the hearing of the adjourned 'consolidation' application.

46. In the event, given the particular and highly unusual circumstances of this case, I will hear the parties on costs, and, if such be necessary, also upon the precise form of the Order.

47. Finally, I wish to express my appreciation to those who appeared on this application for the considerable assistance which was rendered to the Court.