Litigation Recent Decisions 5/5/98

Decisions are taken from LAWTEL's Case Law database. LTL: Lawtel report; TLR: Times Law Reports; ILR: Independent Law Report.

Claim for seamen's wages

(1) Rafael Luis Cil & ors (first to fifteenth plaintiffs) (2) Pedro Espinosa Hernandez & ors (sixteenth to thirty-third plaintiffs) (3) Guincho Crewing Agency (thirty-fourth plaintiff) v (1) The owners of the ship Turridu (defendants) (2) First National Bank of Maryland (intervenor) (1998)

QBD Admiralty Court (Rix J) 23/4/9Whether the crew were entitled to the wages out of the proceeds of the judicial sale of the ship in priority to the claim of the bank holding a mortgage over the ship in circumstances where the bank submitted that the crew might have been employed not by the ship's owners but by a national seaman's agency in whose favour the crew had requested payment of, and the ship owners had contracted to pay, such wages.

The plaintiffs, former and current members of the crew of the ship Turridu and their crewing agency Guincho, claimed unpaid wages and (in the case of Guincho) agency fees as a debt against the security retained from the proceeds of the sale of the ship. An earlier judgment for the First National Bank of Maryland, ("the bank') as mortgagee, ordered the sale of the vessel but required the outstanding wages of the current crew to be agreed and paid as costs of the arrest. The parties could not agree those wages so the crew was paid that 30 per cent of the wages which their contracts said was to be paid out to them in cash and they were repatriated. The balance of their claim was reserved for future argument. The bank intervened in this action to dispute the crew's claims and thus protect its priority over the balance of the proceeds of sale reserved. The crew were Cuban nationals, recruited by Guincho and enrolled with a Cuban state-owned employment company called Agemarca, which provided Cuban manpower for foreign businesses. Under the contract of hire between Agemarca and Guincho, Guincho undertook to credit Agemarca with 70 per cent of the salary for each crew member, while 30 per cent was paid on board. The crewing contract between the shipowners and Guincho reflected this arrangement, as did the embarkation contract between the shipowners and Guincho as the agent of each individual crew member. Eventually the 70 per cent, after deduction of taxes and conversion into local currency at the official rate, was paid to the crew member or his dependents in Cuba. The shipowners did not appear and the issue between the crew and the bank was whether the crew was entitled to the wages out of the proceeds of the judicial sale of the ship in priority to the claim of the bank holding a mortgage over the ship in circumstances where the bank submitted that the crew might have been employed not by the ship's owners but by a national seaman's agency in whose favour the crew had requested payment of, and the shipowners had contracted to pay, such wages. Was such a claim properly called a claim for wages at all? Under s.20(2) Supreme Court Act 1981, claims under subs.(o) gave rise to a maritime lien and had priority over a mortgagee's claim, whereas any claim by an agent under subs.(p) carried no such lien and was therefore postponed to the claim of a mortgagee.