Federal Court of Australia

Dan-Bunkering (Singapore) Pte Ltd v The Ship Yangtze Fortune (No 3) [2024] FCA 219

ORDERS

THE COURT ORDERS THAT:

1.    The amended interlocutory application filed by China Merchants Energy Trading (Singapore) Pte Ltd on 6 March 2024 be dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1    This is an application by China Merchants Energy Trading (Singapore) Pte Ltd (CMET) for, in effect, the following relief:

(1)    that it be granted leave to file and serve a statement of claim in the principal proceeding in respect of its claim against the proceeds of the sale of the mv Yangtze Fortune; or

(2)    that it be granted leave to be joined as plaintiff in the proceeding; and

(3)    timetabling orders in relation to the proof of its claim and the determination of priorities.

2    The two issues to be decided in considering whether to exercise a discretion in CMET’s favour to grant it leave to file and serve a statement of claim against the fund established from the proceeds of the judicial sale of the vessel are, first, whether it has established reasonable prospects of success in the claim that it wishes to pursue – it being common ground that if it has no such prospects then there is no point in granting it leave – and, second, whether its failure to commence a proceeding to enforce that claim at an earlier time when it should have done so has been adequately explained.

3    As will be seen, the question in relation to prospects of success boils down to the construction of and the inter-relationship between ss 18 and 24 of the Admiralty Act 1988 (Cth). More particularly, does CMET have reasonable prospects of success in contending that when “the proceeding” (in s 18(b)) is (or was) commenced the relevant person is (or was), or is to be regarded as, the demise charterer of the vessel. For the reasons that follow, I have concluded that CMET’s claim in that regard is bound to fail and for that reason leave must be refused. In any event, I have also decided that the explanation for CMET’s delay in commencing its proceeding does not justify the position that it took not to do so when it should have done so and for that reason leave should be refused.

4    On the question of joinder, for the reasons that follow I have concluded that CMET cannot as a matter of power or, alternatively, discretion, join the present admiralty action as a plaintiff against the objection of the existing plaintiff. That alternative route to the contention that since s 18(b) was satisfied when the present proceeding was commenced, it can be regarded as so satisfied for CMET, is also not available.

The relevant facts

5    In setting out the relevant facts, I do not purport to make final factual findings between the parties, in particular because this is an interlocutory application and some of the facts may be the subject of contest at the priorities hearing in due course. Rather, I make factual findings for the purposes of CMET’s interlocutory application based on the evidence adduced in that application.

6    Before and at the commencement of the events traversed below, the vessel was owned by Soar Harmony Shipping Ltd and bareboat chartered to Yangtze Fortune Co Ltd on an amended Barecon 2001 form.

7    On 10 November 2022, the plaintiff in the current proceeding, Dan-Bunkering (Singapore) Pte Ltd, issued a writ against the vessel naming Yangtze as the relevant person, ie the person who would be liable on the claim in a proceeding commenced as an action in personam (Admiralty Act, s 3(1)). That was on the basis that Dan-Bunkering sold bunker fuel supplied to the vessel to Yangtze. It relied on s 18 of the Admiralty Act for that claim.

8    On 11 November 2022, Yangtze gave notice to Soar Harmony that it was in “a very hard financial status” and could not perform its obligations under the charterparty. It purported to give “formal notice of termination” of the charterparty.

9    On 16 November 2022, Soar Harmony replied to the “formal notice of termination”, rejecting it and demanding continued performance.

10    On the material currently before me, there is nothing to suggest that Yangtze’s notice of termination was effective. For present purposes it must therefore be accepted that the bareboat charterparty continued after November 2022.

11    On 2 December 2022, the vessel was arrested in this proceeding pursuant to the claim by Dan-Bunkering.

12    On 16 December 2022, CMET issued a caveat against the release of the vessel from arrest. Its relationship with the vessel was described as “bunker supplier”. That caveat against release was withdrawn on 30 January 2023.

13    In the meanwhile, on 23 December 2022, I entered default judgment in favour of Dan-Bunkering in the sum of US$549,695 plus interest and costs.

14    On 11 January 2023, I made orders that the vessel be sold by closed bid tender process and that the proceeds of sale be paid into court.

15    On 14 February 2023, I made orders that the Admiralty Marshal accept the tender of the highest bidder.

16    On 21 February 2023, the Admiralty Marshal received a notarised power of attorney and certified conditions of sale from the highest bidder. However, despite being given extensions of time, the highest bidder failed to pay the requisite deposit and the sale fell through.

17    On 27 February 2023, I made orders that the Admiralty Marshal terminate the contract of purchase and sale with the highest bidder, and that the tender of the second highest bidder be accepted.

18    On 6 March 2023, CMET issued another caveat against the release of the vessel from arrest. Its terms were the same as the first caveat. Also on that day, the second highest bidder paid the required deposit (US$600,000).

19    On 7 March 2023, the second highest bidder executed the conditions of sale. It paid the balance of the purchase price, subject to adjustment for bunkers, on 8 March 2023 (US$5,400,000).

20    On 10 March 2023 at about 9.20 am in Sydney, Soar Harmony issued a writ against the vessel in a separate proceeding (NSD211/2023). Soar Harmony claims unpaid hire under the demise charter of the vessel to Yangtze. It therefore relies on s 18 of the Admiralty Act for that claim.

21    Later on 10 March 2023 (apparently at 4.49 pm in China), Soar Harmony gave notice of termination of the demise charter to Yangtze. Several grounds of termination are listed in the notice with reference to the terms of the charterparty. They include Yangtze’s failure to pay hire and that the vessel had been under arrest for more than 90 days – cll 44.1(a) and (h) read with cl 44.2 provided for termination on those events. Clause 28(a)(i) of the Barecon 2001 could also have been relied on to terminate for failure to pay hire.

22    There is a point to which I will return, which is whether Soar Harmony’s termination on 10 March 2023 was effective, either because the charterparty had already been terminated by frustration by the conclusion of the contract of sale or because Soar Harmony did not retake possession of the vessel.

23    On 14 March 2023, the Admiralty Marshal executed a bill of sale in favour of the second highest bidder, Hop Shun Shipping Co Ltd, and it and the Admiralty Marshal executed a protocol of delivery and acceptance. The latter document records that the purchaser accepted delivery, title and risk of and to the vessel on that day at 5.27 pm local time in Melbourne.

24    On 16 March 2023, I ordered the publication of a notice of application to determine priorities. That notice, which was published widely, stipulated that anyone who had a claim against the proceeds of sale of the vessel was required to file and serve a statement of claim in the present proceeding to enforce the claim before 13 April 2023. Order 5 made on that day required that “any person having a claim against the Fund who wishes to participate in the proceeding make any such claim against the proceeds of sale as set out in [the notice]”.

25    In April and May 2023, payments from the fund were authorised and paid for the highest ranking claims – the costs of arrest and sale and the crew’s claims. Some US$4.8 million remains in the fund for distribution.

26    A number of claims were made against the fund pursuant to the orders requiring that claims be made by 13 April 2023. One of those was by the Export-Import Bank of China which claimed as mortgagee of the vessel. That claim, if upheld, would have had the effect of rendering any claim by CMET (and the other remaining claimants) pointless because the mortgagee’s claim, which exceeded the value of the fund, would have had a higher priority. The other claimants are Dan-Bunkering which seeks satisfaction of its judgment, Australasian Global Exports Pty Ltd which seeks damages for breach or repudiation of a voyage charter of the vessel from Yangtze, and Soar Harmony for unpaid hire under the bareboat charter. CMET did not file a claim.

27    The mortgagee’s claim, to the knowledge of CMET at the time, was filed on 6 April 2023.

28    In August 2023, CMET instructed its Australian solicitors to terminate “the legal action against Yangtze”, although there was in fact no such legal action at that time. CMET was apparently referring to the caveat against release filed in March 2023 which had not been withdrawn. Filing a caveat does not in any sense commence a legal action, and once the vessel was sold it had no possible continuing efficacy. (The caveat against release procedure provided for in Pt II Div 2 of the Admiralty Rules 1988 (Cth) is available only against release from arrest and not against payment out from the fund, cf Australian Law Reform Commission, Civil Admiralty Jurisdiction (Report No 33, 1986) at [293] (ALRC Report No 33).)

29    On 15 September 2023, with leave, the mortgagee filed a notice of discontinuance of its claim. The result was that the remaining claimants had substantially increased prospects of being paid at least a proportion of their claims from the fund. The same was true of CMET, except that it had not made a claim.

30    CMET accepts that it was aware of the developments in the proceeding from time to time, including the order that any party having a claim against the fund file and serve a statement of claim by 13 April 2023. Its Australian solicitors, who held a watching brief, were advised of the relevant developments, including that the mortgagee’s claim was discontinued. I infer that they also had access to the Commonwealth Courts Portal where they could have followed all developments.

31    On 11 December 2023, CMET was advised by its solicitors that the mortgagee had discontinued its claim. As a result, CMET decided to seek to participate in the fund. CMET’s solicitor has deposed to an affidavit in which he explains why, although his firm was advised of the mortgagee discontinuing its claim on 15 September 2023, he did not advise CMET of that fact until nearly two months later. For reasons that will become apparent, that delay has no bearing on CMET’s ability to pursue the claim against the fund. It is therefore not necessary to go into the solicitor’s explanation for that delay.

32    On 31 January 2024, CMET filed the interlocutory application seeking the relief identified above. That is to say, it is only then that CMET sought to bring its claim against the fund. I granted leave to CMET at the oral hearing of its application on 6 March 2024 for it to file an amended interlocutory application, upon which it moves for the relief presently sought.

CMET’s case for late participation

33    CMET could have filed its claim before 13 April 2023 pursuant to the orders of 16 March 2023. Having failed to do so, it now seeks leave to enter the fray some 11 months later (having first sought such leave by filing its interlocutory application about nine and a half months after it should have filed its claim).

34    CMET’s claim, which is for the unpaid purchase price of bunkers supplied to the vessel in April, May and July 2022, depends on s 18 of the Admiralty Act to be within the jurisdiction of the Court. That is because, the “relevant person”, as defined in s 3(1) of the Act is the demise charterer of the vessel, Yangtze. CMET does not assert any claim against the vessel’s owner.

35    Section 18 of the Admiralty Act provides as follows:

Where, in relation to a maritime claim concerning a ship, a relevant person:

(a)    was, when the cause of action arose, the owner or charterer, or in possession or control, of the ship; and

(b)    is, when the proceeding is commenced, a demise charterer of the ship;

a proceeding on the claim may be commenced as an action in rem against the ship.

36    Section 24 of the Admiralty Act provides as follows:

Where, but for the sale of a ship or other property under this Act, a proceeding could have been commenced as an action in rem against the ship or property, the proceeding may be commenced as an action in rem against the proceeds of the sale that have been paid into a court under this Act.

37    Recognising that Yangtze must be, or have been, the demise charterer of the vessel “when the proceeding is commenced” (s 18(b)), CMET makes two principal submissions.

38    First, it submits that the demise charter to Yangtze was terminated by frustration when the conditions of sale were executed on 7 March 2023 with the result that the termination by Soar Harmony was ineffective on 10 March 2023 – something that is already terminated cannot be terminated. It then says, as I understand the argument, that because the demise charter was extant at the time of the sale (necessarily referring, again, to the execution of the conditions of sale), s 24 has the effect that for the purposes of any proceeding commenced against the fund after the sale the charter position as at the time of sale applies.

39    That is to say, CMET submits that because the demise charter was extant at the time of sale, a s 18 claim can be commenced after the sale even though the sale had the effect of terminating the charter. The submission goes further and says that even if, ignoring the sale, the charter would now long be at an end (whether by the 10 March notice of termination or subsequent hypothesised events), the s 18 claim could still be brought.

40    Secondly, it submits that the vessel was under demise charter to Yangtze when the current proceeding was commenced (ie the proceeding in which Dan-Bunkering is the plaintiff), and that it can rely on that commencement to satisfy s 18(b) by being joined to the proceeding as a plaintiff.

41    CMET submits that it can and should be joined as an additional plaintiff to the principal proceeding pursuant to r 9.02(1)(c) or r 9.03 of the Federal Court Rules 2011 (Cth). It submits that the Court has a discretion to extend the time within which claims had to be brought against the fund, and that that discretion should be exercised in its favour because no other party interested in the fund will be relevantly prejudiced. In that regard, the hearing on priorities, including the determination of the validity of the claims, has been listed for 17-18 June 2024 which gives sufficient time for the claim and any opposition thereto to be prepared.

The termination of the demise charterparty and s 24 of the Admiralty Act

42    CMET’s first argument fails at the first hurdle. For a number of reasons, the execution of the conditions of sale by the purchaser did not frustrate the charter.

43    First, the events said to give rise to frustration, being the arrest and then sale of the vessel, were caused by the fault of and breach by Yangtze, a party to the contract, so there could be no frustration: DGM Commodities Corporation v Sea Metropolitan SA (The “Andra”) [2012] 2 Lloyd’s Rep 587 at [18]-[20]; Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at 729; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 at 357 per Mason J and 376 per Aickin J.

44    Secondly, the consequence of the execution of the conditions of sale was not in the nature of an event that made the contractual obligations of a party incapable of being performed “because the circumstances in which performance is called forward render it a thing radically different from that which was undertaken by the contract”: Davis at 729; Codelfa at 357, 377 and 408. The sale could still have fallen through; the execution of the sale contract made no relevant change to the circumstances of the charter insofar as events relevant to frustration are concerned.

45    Thirdly, if execution of the conditions of sale frustrated the contract, then it had already become frustrated when the conditions of sale were executed by the highest bidder on or about 21 February 2023. On that hypothesis, CMET’s position would be even worse because there would be no basis to contend that the demise charter remained extant when the proceeding was (or is) commenced.

46    In any event, even if execution of the conditions of sale on 7 March 2023 had the effect of frustrating the demise charter and bringing it to an end, the “sale” as referred to in s 24 did not occur until 14 March 2023 – the events on 7 March could not have frustrated the demise charter because it was not until 14 March that the fund constituting the “proceeds of sale” referred to in s 24 came into being. That is to say, even if CMET’s submission that the demise charterparty position in respect of the vessel as at the “sale” referred to in s 24 became “frozen” at that point, enabling proceedings still to be commenced under s 18 after the sale, the vessel was not under demise charter to Yangtze at that time. The result is that s 18(b) could not be satisfied.

47    The remaining possibility for CMET on this aspect of the case is its submission that it may be that the demise charter did not terminate on 10 March 2023, notwithstanding Soar Harmony’s notice of termination. CMET makes two submissions in that regard. First, it submits that the notice of termination was ineffective until Soar Harmony retook possession of the vessel. It refers to The Ship ‘Hako Endeavour’ v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21; 211 FCR 369 at [64] where Rares J held that where there is a termination under cl 28 of the Barecon 2001 form, cl 29 has the effect that until the vessel is repossessed by the owners, the (erstwhile) charterers shall hold the vessel as gratuitous bailee only to the owners. Buchanan J reasoned similarly (para [159]), and Siopis J agreed with Rares and Buchanan JJ.

48    That reasoning does not assist CMET because underlying it is the acceptance that notice of termination under cl 28 has the effect of terminating the charterparty, with the erstwhile charterer retaining possession as bailee and not bareboat charterer. The same would be the position in respect of notice under cl 44.2 in reliance on occurrence of a termination event listed in clause 44.1 – Soar Harmony’s entitlement was “to terminate this Charter forthwith” by giving notice to Yangtze. That is the notice that Soar Harmony gave. There was no requirement to take repossession of the vessel.

49    There are many cases in addition to The Hako Endeavour where it has been held that notice of termination of a demise charter is sufficient to terminate the charterparty and that it is not necessary for the owner to have taken repossession of the vessel, and there are cases to the contrary. The cases are discussed in “The owner’s vulnerability to the liabilities of the demise charterer” (2015) 29 ANZ Mar LJ 85, as referred to by CMET.

50    Each case will depend on the terms of the relevant charter. I am bound to follow The Hako Endeavour in giving effect to the relevant clauses of the Barecon 2001 form, and cl 44.2 puts the matter beyond question. The result is that the charterparty terminated prior to the sale of the vessel.

51    CMET also submits that I should not determine that point at this stage, and that I should recognise that it may be that if it is allowed to pursue its claim, processes of discovery and the like might reveal that the termination of the charter on that date was not effective. I regard that possibility to be far too speculative. As mentioned, there is nothing before me at this stage to suggest that the termination on 10 March 2023 might not have been effective, and all indications are to the contrary. In those circumstances, CMET has failed to establish any reasonable prospects of success on the point.

52    I acknowledge that there are at least three competing possible constructions of s 24. On the one favoured by Soar Harmony, if a proceeding is sought to be commenced against a fund after the judicial sale of a vessel, for the establishment of the relevant jurisdictional criterion in ss 17(b), 18(b) or 19(b) with reference to “when the proceeding is commenced”, the court must have regard to what the likely position would have been at that time but for the sale. That is to say, a counterfactual must be postulated in which the judicial sale is wished away and the court enters into an inquiry as to what is likely to have happened in the intervening period had there been no sale.

53    The construction favoured by CMET is that the requirement that “a proceeding could have been commenced” is not to be answered with reference to when the proceeding is sought to be commenced against the fund, but rather to the time of sale. That is to say, the court enquires into whether “a proceeding could have been commenced as an action in rem against the ship” at the time that the vessel was sold by judicial auction. That construction would have the effect that if the vessel was subject to a demise charter at the time of the judicial sale, notwithstanding that the sale would doubtless have brought the charter to an end, claims could still subsequently be brought against the fund in reliance on s 18 on the fiction that the demise charter persisted. On that approach, the ownership and charter position of the vessel must be regarded as “frozen” at the time of sale.

54    A third construction is that the words “but for the sale” have the effect only of replacing the ship with the fund, and one looks to the factual circumstances as at the time the claim is commenced against the fund to determine whether the relevant jurisdictional criterion is met. The result of that approach is that a s 18 claim would never be able to be successfully commenced against the fund because the sale would inevitably have brought the demise charter to an end – a fund cannot be demise chartered. There would not be the same consequence for s 17 and s 19 claims because those depend on ownership and the owner of the ship that was sold remains the beneficial owner of the fund: The Sanko Mineral [2014] EWHC 3927; [2015] 1 Lloyd’s Rep 247 at [47] per Teare J.

55    In view of the inevitable consequence in this case that the demise charter was terminated prior to the judicial sale on 14 March 2023, it is not necessary to resolve that constructional choice. The same conclusion was reached in Taxidiotiki-Touristiki-Nautiliaki Ltd v The Owners, Demise Charterers of the Vessel 'Columbus' [2021] EWHC 310 at [12] per Davison AR.

Joinder as plaintiff

56    CMET submits that it can overcome the temporal difficulty it faces with regard to the demise charter having come to an end before the sale by relying on the fact that the existing proceeding was commenced before the termination of the demise charter and it being joined as a plaintiff to the existing proceeding.

57    I confess to having some difficulty in understanding CMET’s submission in relation to the construction of s 18 of the Admiralty Act. CMET submits the following:

The reference to “the proceeding” in s 18(b) is a reference to (in the circumstances of this case) these proceedings (ie NSD 958/2022). Whereas, “a proceeding” in the last line of the section refers to any proceeding brought “on the [maritime claim] claim” including claims filed where an application has been made to determine priorities in an existing proceeding: r 73, Admiralty Rules. The juxtaposition between the definite article in s 18(b) and the indefinite article in the final line – each immediately preceding “proceeding” – indicates a provision which, in different parts is pointing towards different things. The former is referencing the very proceeding in which a claim may be instituted; the latter is referencing the bringing of a claim (such as that presently in issue) within a proceeding which is already on foot (here, commenced in November 2022). Were it otherwise, there would be no reason for the final line to be framed by reference to “a proceeding on the claim” – rather, it would simply read “the proceeding” or “that proceeding.”

(Emphasis in the original.)

58    Aside from a possible textual nicety, although even that is doubtful, CMET’s construction has nothing to commend it. It would have the result that so long as s 18 jurisdiction had been established by a claimant commencing a proceeding in time, any other s 18 claimant could thereafter commence a proceeding even though at that time the s 18(b) criterion was not met. That would broaden the scope of application of s 18 beyond what was intended as apparent from the ALRC Report No 33 which preceded the Admiralty Act, and it would broaden it beyond what is available in analogous jurisdictions. The ALRC stated (at [136]) that an action in rem on a general maritime claim “should only be able to be brought where, when the action is commenced, the owner or a demise charterer of the ship is a relevant person in respect of the claim”. That is to say, when the claim arising from the demise charterer’s liability is sought to be enforced against the ship by the commencement of a proceeding, the ship must still be demise chartered to that demise charterer.

59    The words “the proceeding” in s 18(b) refer to the same “proceeding on the claim” referred to in the tailpiece of s 18. That is because the connection between the demise charterer and the ship required by s 18(b) must be established when the proceeding on the claim that s 18 authorizes (ie the proceeding referred to in the tailpiece of s 18) is commenced, which is upon the institution of that suit by the filing of a writ in rem in respect of that claim. Also, the proceeding in s 18(b) must be the proceeding in which the maritime claim referred to in the chapeau is commenced, which is the same proceeding as that referred to in the tailpiece of s 18. The section can make no workable sense if the proceedings that are referred to are or can be different proceedings.

60    The result is that even if CMET were joined as a plaintiff in the proceeding, its temporal difficulty with regard to satisfying the s 18(b) criterion would not be solved.

61    For completeness, I will nevertheless consider the question of joinder. The rules that CMET relies on are these:

9.02    Joinder in proceedings involving common questions etc.

(1)    Two or more persons may be joined (as applicants or respondents) in any proceeding:

(a)    if separate proceedings by or against each of them would give rise to a common question of fact or of mixed fact and law; or

(b)    if all rights to relief claimed in the originating application are in respect of, or arise out of, the same transaction or series of transactions; or

(c)    by leave of the Court.

(2)    Leave under paragraph (1)(c) may be granted before or after the originating application is filed.

(3)    If 2 or more persons are joined under subrule (1), the Court may at any stage of the proceedings order that proceedings by or against any party or parties be conducted separately.

9.03    Joinder of applicants with joint entitlement

If an applicant claims relief to which any other person is entitled jointly with the applicant:

(a)    each person so entitled must be joined as a party to the proceeding; and

(b)    any person so entitled who does not consent to being joined as an applicant must be made a respondent to the proceeding.

62    First, CMET relies on r 9.02(1)(c) and submits that that gives the Court a broad discretion to join a plaintiff to an existing proceeding. That is no doubt correct, but I do not see that that provision gives the power or, if it does, that the power should be exercised, to join a person as a plaintiff to a proceeding against the objections of and with competing interests to the existing plaintiff. Dan-Bunkering firmly opposes the joinder. Also, Dan-Bunkering and CMET have competing interests in the fund, it being in the interests of each to knock-out, reduce or lessen the priority of the claim of the other – the fund is insufficient to pay all remaining claims. It would be entirely unworkable for both to be plaintiffs in the same action. The rule could never have contemplated that.

63    CMET seeks to avoid the problem of Dan-Bunkering’s opposition and its competing interests by saying that once CMET has been joined, the Court can separate the proceedings under r 9.02(3). That approach, however, merely exposes the charade that the Court is being asked to entertain. The relief that CMET seeks in this part of the case is a transparent stratagem to overcome its failure to bring its own proceeding in time. Even if I had the power to do that, I would not exercise it.

64    Secondly, CMET relies on r 9.03. However, that rule is not available because there is no relief to which both Dan-Bunkering and CMET are said to be jointly entitled, as required by the chapeau. See Dauguet v Centrelink [2015] FCA 395 at [108] per Mortimer J. CMET submits that they would both be seeking payment from the same fund, and that that is sufficient to meet that requirement. Clearly it is not. The relief they each seek is relief to which they are separately, and not jointly, said to be entitled. Indeed, as explained, they have conflicting interests in respect of that relief.

65    I would therefore refuse the joinder relief.

Delay

66    As mentioned, CMET was fully aware that orders were made on 16 March 2023 requiring “anyone who has a claim against the proceeds of the sale [to] enforce that claim before 13 April 2023”. CMET failed to do so. I infer that that was a conscious decision. Certainly, there has been no suggestion in either CMET’s evidence or submissions that it was an oversight.

67    Also, CMET was aware that the mortgagee filed a claim in excess of the remaining value of the fund on 9 April 2023. It has explained in evidence that in August its managing director decided to “terminate the legal action against Yangtze”, ie not pursue any claim against the fund. It is explained that that decision was made because “CMET did not want to waste money and effort to pursue this case when there is little prospect of getting back that money”. There was therefore a deliberate choice at that point not to pursue the claim.

68    In the meanwhile, other parties incurred the potentially wasted trouble and expense of preparing claims and filing them, and Dan-Bunkering filed an application to set aside the mortgagee’s claim. Also, no reasonable analysis of the situation pertaining in relation to the mortgagee’s claim could have concluded that the fund was the only source of recompense for the mortgagee. Not only would the mortgagee have an in personam claim against the owner, which may or may not have had any real value, but a mortgagee in its position would almost invariably have available to it other security such as from guarantors and cross-mortgages. It was therefore not possible to confidently assume that the mortgagee’s claim would not be satisfied other than from the fund. Reasonable prudence required CMET to file a claim in time.

69    It is well known that, as a general rule, a party must live by the choices it makes in relation to litigation. CMET chose not to participate in the fund when it could have. To my mind, it has not justified why it should now be let in. All that it can say is that circumstances have changed following the discontinuance of the mortgagee’s claim and that no-one else will be relevantly prejudiced. But other parties have made decisions in relation to the conduct of their claims, including persisting with their claims before and after the mortgagee discontinued its claim, in the knowledge that there was no claim from CMET, and now CMET wishes to claim. It is not necessary to show that the decisions of others would have been different had they known of CMET’s participation before 13 April 2023; in my assessment it is unfair to them to now let CMET in which would have the effect of increasing the time and cost of determining the claims and the priorities and, if CMET’s claim is a good claim contrary to what I have concluded above, likely reducing their share of the fund. There is a considerable public interest in finality in litigation, and to reopen the date for claims at this stage on CMET’s explanation for doing so would be contrary to that interest.

70    Accordingly, even if I thought that CMET had a reasonably arguable claim, I would not exercise my discretion in favour of letting it in at this stage, whether by extending time or ordering joinder.

Conclusion

71    CMET’s interlocutory application must be dismissed with costs.

Associate:

Dated:    12 March 2024