Charles O'Connor Partner
Failure to acknowledge service of in rem collision claim results in default judgment
Tecoil v. Owners of Poseidon  EWHC 393 (Admlty)
A recently reported Admiralty Court decision has confirmed that judgment in default of an acknowledgment of service may be obtained in an in rem collision claim. On the current wording of the relevant procedural rules, this was not immediately clear.
The background facts
In July 2018, the Tecoil Polaris was at a berth at Albert Dock in Hull. The ship was stationary, without power or crew. A second vessel, the Poseidon, was manoeuvring in the dock and collided with the Tecoil Polaris, which was pushed heavily against the quay side, causing considerable damage.
Tecoil Polaris’s Owners, Tecoil Shipping Ltd (“Tecoil”), obtained security from the Poseidon’s insurers. The letter of undertaking provided for additional security to be given, if the original security proved insufficient, up to a maximum figure of US$ 500,000. However, when Tecoil sought further security from Poseidon’s insurers, the request was declined.
Tecoil issued an in rem claim against the Poseidon’s Owners, seeking damages, interest and costs. The claim form was served by affixing a copy of it to the Poseidon’s hull at Hull in accordance with the provisions of the Civil Procedure Rules (CPR).
The Poseidon’s Owners did not file an acknowledgement of service within the time permitted or at all. Tecoil applied for judgment in default of acknowledgement of service, with the damages to be assessed.
The Admiralty Court decision
The Court considered whether it had the jurisdiction to grant judgment in default of acknowledgment of service in an in rem collision claim.
CPR 61, which deals with Admiralty Claims, does not explicitly say that the claimant in an in rem collision action may obtain judgment in default of acknowledgment of service by the defendant. Whilst CPR 61 provides that judgment in default of acknowledgment of service is available for in rem claims, other than collision claims, the only circumstance in which CPR 61 refers to default judgment in an in rem collision claim is where one party has filed a collision statement of case and the other has not done so within the time allowed.
The relevant authorities cited to the Court took the view that the only circumstance in which default judgment may be obtained in an in rem collision claim is where there has been a failure to serve a collision statement of case. The issue for the Court was whether CPR 61 is intended to restrict the circumstances in which default judgment is available in an in rem collision action. Alternatively, where CPR 61 is silent on the failure to serve an acknowledgment of service in an in rem collision action, does CPR 12 (dealing with default judgments generally) enable a claimant to obtain default judgment under that provision?
It was clear that CPR 61.9(2) is the only rule in CPR 61 dealing expressly with the availability of default judgments in collision claims. However, that sub-section only deals with the situation where there has been a failure to file a collision statement of case. Tecoil argued that there is a lacuna in the CPR and that the Court ought to be able to give judgment in default of an acknowledgment of service in an in rem collision claim. Otherwise, if the Court could only give judgment in default of a collision statement of case, the defendant could unjustly deprive the Court of the power to give default judgment at all by not acknowledging service of the claim (because the obligation to file a collision statement of case is contingent upon an acknowledgment of service having been filed). Tecoil also pointed out that 61.9(3)(b) specifically refers to the provisions of CPR 12 for default judgment applications.
The Court stated that there was no sensible reason why a judgment in default of an acknowledgment of service may not be allowed in a collision claim. CPR 61.9 draws a distinction between other in rem claims and collision claims because, in a collision claim, the procedure is different and no defence is filed. The CPR do not contain a provision expressly preventing judgment in default of acknowledgment of service in an in rem collision claim. Moreover, CPR 12 is applicable to all claims, unless specifically excluded by another rule. Therefore, the Court could order default judgment and, in this case, it was appropriate to do so. The Court added that the Rules Committee might in due course consider amending the wording of CPR 61.9 so as to carve out only a failure to file a defence from the collision claims default judgment regime (because no defence is required).
Pursuant to CPR 61 and a requirement particular to Admiralty in rem claims, Tecoil was required to prove its claim to the Court’s satisfaction in order to obtain default judgment. Having viewed a CCTV recording of the Poseidon’s navigation in the Albert Dock and also read Tecoil’s collision statement of case (which it had voluntarily filed), the Court concluded both that the collision in fact occurred and that the Poseidon was solely to blame.
The Court, therefore, awarded Tecoil damages, interest and costs. However, it refused to award Tecoil enhanced costs under CPR Part 36, which may be sought in circumstances where a claimant obtains a judgment “at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer”. This was because the offer had been made to Poseidon’s insurers (Poseidon’s Owners having not participated in the proceedings at all), but the insurers were not themselves party to the proceedings. Furthermore, the offer (like the judgment) had been made partly in Sterling and partly in Euros and, when the two components were looked at in the same currency, the settlement offer was in fact higher than the judgment amount.
As noted above, CPR 61 provides an additional requirement that an applicant for judgment in default in an Admiralty in rem claim must provide evidence to prove its claim to the Court’s satisfaction. Therefore, even if there is a failure to acknowledge service (as here), there is an additional and significant burden to overcome. In this case, the CCTV footage provided sufficient evidence in support of the claim but this will not always be the case. An applicant may need to rely on the available electronic evidence, including VDR and AIS plotting, to establish fault. Whilst the Court may not be presented with evidence to the contrary, the exercise is considerably more onerous than simply establishing a failure to acknowledge service.