CACV239/2006

CACV239/2006

由此 A A B B CACV 234, 235, 236, 237, 238, 239, 240/2006 C C IN THE HIGH COURT OF THE D HONG KONG SPECIAL ADMINISTRATIVE REGION D COURT OF APPEAL E E CIVIL APPEAL NOS. 234, 235, 236, 237, 238, 239, 240 OF 2006 F (ON APPEAL FROM HCAJ NOS. 150, 151, 153, 268, 270, 271, 272 F OF 2003) G G ____________ H CACV 234/2006 H I ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL I “CONVENIENCE CONTAINER” (SINGAPORE FLAG) J J BETWEEN K K INTERNATIONAL TRANSPORTATION SERVICE INC. Plaintiff L L and M M THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL N N “CONVENIENCE CONTAINER” Defendants O and O P FLORENS CONTAINER INC. Intervener P ____________ Q Q CACV 235/2006 R R ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL “KINGDOM CONTAINER” (SINGAPORE FLAG) S S BETWEEN T T U INTERNATIONAL TRANSPORTATION SERVICE INC. Plaintiff U V V 由此 A -2- A B and B C THE OWNERS AND/OR DEMISE CHARTERERS C OF THE SHIP OR VESSEL D “KINGDOM CONTAINER” Defendants D and E E FLORENS CONTAINER INC. Intervener F F ____________ G CACV 236/2006 G H ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL H “LIBERTY CONTAINER” (SINGAPORE FLAG) I I BETWEEN J J INTERNATIONAL TRANSPORTATION SERVICE INC. Plaintiff K K and L L THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL M M “LIBERTY CONTAINER” Defendants N N and O FLORENS CONTAINER INC. Intervener O ____________ P P CACV 237/2006 Q Q ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL “CONVENIENCE CONTAINER” (SINGAPORE FLAG) R R S BETWEEN S T RUDOLF A. OETKER KG Plaintiff T and U U V V 由此 A -3- A B THE OWNERS AND/OR DEMISE CHARTERERS B OF THE SHIP OR VESSEL C C “CONVENIENCE CONTAINER” Defendants ____________ D D CACV 238/2006 E E ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL F “KINGDOM CONTAINER” (SINGAPORE FLAG) F G BETWEEN G H RUDOLF A. OETKER KG Plaintiff H I and I THE OWNERS AND/OR DEMISE CHARTERERS J J OF THE SHIP OR VESSEL “KINGDOM CONTAINER” Defendants K K ____________ L L CACV 239/2006 M ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL M “LIBERTY CONTAINER” (SINGAPORE FLAG) N N BETWEEN O O RUDOLF A. OETKER KG Plaintiff P P and Q Q THE OWNERS AND/OR DEMISE CHARTERERS R OF THE SHIP OR VESSEL R “LIBERTY CONTAINER” Defendants S ____________ S T T U U V V 由此 A -4- A B CACV 240/2006 B C ADMIRALTY ACTION IN REM AGAINST THE SHIP OR VESSEL C “MANDARIN CONTAINER” (SINGAPORE FLAG) D D BETWEEN E E RUDOLF A. OETKER KG Plaintiff F F and G G THE OWNERS AND/OR DEMISE CHARTERERS H OF THE SHIP OR VESSEL H “MANDARIN CONTAINER” Defendants I ____________ I J J Before : Hon Ma CJHC, Stone & Reyes JJ in Court K Dates of Hearing : 12 and 13 June 2007 K Date of Handing Down Judgment: 16 July 2007 L L M _______________ M JUDGMENT N N _______________ O O Reyes J:- P P I. INTRODUCTION Q Q 1. Powick Marine(S) Ptd Ltd. is a Singapore company. It is R registered in the Singapore Ship Register as the owner of the 4 ships R involved in these proceedings. It went into voluntary liquidation in S S Singapore on 13 May 2003. T T U U V V 由此 A -5- A B 2. On 10 May 2003 International Transportation Service Inc. B (ITS) issued an in rem writ against the “Mandarin Container,” one of the C C 4 ships. On 16 May 2003 ITS issued in rem writs against the 3 remaining D ships. Each of the writs claimed unpaid charges for stevedoring, wharfage D and dockage. E E F F 3. On 18 September 2003 Oetker issued 4 identical in rem writs against the 4 ships. The writs were amended on 24 October 2003 so that G G each writ alleged the breach of a specific charterparty in respect of a H H particular vessel. Powick acknowledged service of Oetker’s writs on I 30 September 2003. I J J 4. The 4 ships had been arrested in Hong Kong by creditors of K Powick (other than Oetker and ITS) on dates between 16 May and 2 June K 2003. Following an order of the Admiralty Court dated 13 June 2003, the L L 4 ships were sold on 7 July 2003. M M 5. In July 2003 and January 2004 respectively, Powick applied N N for the ITS and Oetker writs to be set aside. Waung J dismissed Powick’s O applications on 5 June 2006. Powick now appeals against that dismissal. O P P 6. Of the various grounds for setting aside the writs which Q Powick argued at first instance, two primarily are pursued on appeal. They Q are as follows:- R R (1) Argument 1: “The Liquidation Point” S S Since Powick went into voluntary liquidation before all of the T Oetker and most of the ITS writs were issued, Powick was no T longer the “beneficial owner” of the 4 vessels when ITS and U U V V 由此 A -6- A B Oetker brought such actions by the issue of the relevant writs. B Neither ITS nor Oetker could bring in rem claims against the C C particular vessels under High Court Ordinance (Cap.4) (HCO) D s.12B(4). This is because the section requires that, at the time D when a claim is brought, the beneficial ownership of the E E vessels should have remained in the person (Powick) alleged F F to be liable at the time when the cause of action arose. It was argued that under both Hong Kong and Singapore law Powick G G had ceased to be the “beneficial owner” by reason of its H H voluntary liquidation. Singapore law is said to be relevant I because the vessels are registered and the liquidation is taking I place in Singapore. J J (2) Argument 2: “The Judicial Sale Point” K K Since the sale of the 4 vessels on 7 July 2003 transferred title L to a third-party buyer, Oetker could not have brought an in rem L claim against the 4 vessels in September 2003. This is because M M Oetker could not meet the requirement of continuing beneficial N ownership in HCO s.12B(4). This ground (which only applies N to Oetker) was raised as a fallback position in the event that O O the Liquidation Point failed. P P 7. Underlying Powick’s application is a contest between the Q Q general body of Powick’s unsecured creditors on the one hand and ITS and R Oetker on the other. To the extent that ITS or Oetker can assert in rem R claims against all or some of the 4 vessels or their sale proceeds, there will S S be fewer (if any) monies available from the sale of the vessels for T distribution among Powick’s unsecured creditors. T U U V V 由此 A -7- A B 8. Powick (acting by its liquidators) essentially contends that ITS B and Oetker cannot invoke in rem jurisdiction to secure themselves against C C all or some of the 4 vessels or their proceeds. To the extent that Powick is D right, ITS and Oetker will only have unsecured personal claims against D Powick. E E F F II. DISCUSSION G G A. Argument 1: “The Liquidation Point” H H A.1 Background I I 9. The claims advanced by ITS and Oetker come within the J Admiralty jurisdiction of this Court defined in HCO s.12A. J K K 10. Oetker’s action is a claim “arising out of any agreement L relating to the carriage of goods in a ship or to the use or hire of a ship” L within the terms of HCO s.12A(2)(h). M M N 11. ITS’ action is a claim “in respect of the construction, repair or N equipment of a ship or in respect of dock charges or dues” within the terms O O of HCO s.12A(2)(m). P P 12. Consequently, ITS and Oetker may bring claims in rem if they Q Q meet the criteria in HCO s.12B(4). That provides:- R R “In the case of any such claim as is mentioned in section 12A(2)(e) to (q), where:- S S (a) the claim arises in connection with a ship; and T (b) the person who would be liable on the claim in an action in T personam (‘the relevant person’) was, when the cause of U U V V 由此 A -8- A B action arose, the owner or charterer of, or in possession or B in control of, the ship, C C an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the Court of First D Instance against:- D (i) that ship, if at the time when the action is brought the E relevant person is either the beneficial owner of that E ship as respects all the shares in it or the charterer of it under a charter by demise; or F F (ii) any other ship of which, at the time when the action is G brought, the relevant person is the beneficial owner as G respects all the shares in it.” H H 13. Mr. Charles Sussex SC (appearing for Powick) submits that I I ITS and Oetker cannot bring in rem claims because, at the time of the writs, J Powick (the “relevant person” for the purposes of HCO s.12B(4)) had J ceased to be the “beneficial owner” of the 4 vessels. K K L 14. The question is what is meant by the expression “beneficial L owner” in s.12B(4)(i). The HCO being a domestic statute, that expression M M is to be construed in accordance with Hong Kong law. I shall deal later N with the relevance of Singapore law. N O O A.2 The meaning of “beneficial owner”‘ P P A.2.1 Case law Q Q 15. In The “Andrea Ursula” [1973] QB 265 Brandon J construed R R the equivalent expression in s.3(4)(a) of the English Administration of S Justice Act 1956 (AJA 1956) as not just encompassing legal or equitable S ownership, but as including such “ownership” as may be said to reside in a T T demise charterer. More specifically, Brandon J thought that a vessel could U U V V 由此 A -9- A B be “beneficially owned” by someone who, although not the legal or B equitable owner of the ship, had full possession and control of the vessel in C C the way that a demise charterer might. D D 16. But in The “I Congreso del Partido” [1978] 1 QB 500 E E Robert Goff J disagreed. F F 17. Robert Goff J thought (at 538E-F) that the words “beneficial G G ownership” in AJA 1956 referred “only to cases of equitable ownership, H H whether or not accompanied by legal ownership, and are not wide enough I to include cases of possession and control without ownership, however full I and complete such possession and control may be”. J J K 18. He rejected the suggestion that a demise charterer could be a K “beneficial owner” merely by reason of its control over a vessel. L L M 19. He finally observed (at 541B) that the word “beneficial” may M have been added to “ownership” in AJA 1956 “very possibly to take N N account of the special English institution of the trust”. O O 20. When “Andrea Ursula” and “Congreso” were decided, the P P AJA 1956 equivalent to the conditions in HCO ss.12B(4)(i) and (ii) Q authorised the bringing of in rem claims against:- Q “(a) that ship, if at the time when the action is brought it is R R beneficially owned as respects all the shares therein by that person; or S S (b) any other ship which, at the time the action is brought, is beneficially owned as aforesaid.” T T U U V V 由此 A - 10 - A B 21. Following “Congreso”, the foregoing conditions in AJA 1956 B were amended by the Supreme Court Act 1981 (SCA 1981). SCA 1981 C C s.21(4) introduced identical wording to that in HCO ss.12B(4)(i) and (ii). D D 22. The SCA 1981 thereby permitted claims against a particular E E ship which was either within the beneficial ownership of the relevant F F person or chartered by demise to such person. That express distinction in SCA 1981 between a beneficial owner and a demise charterer has since G G been consistently regarded as a vindication of Robert Goff J’s conclusion in H H “Congreso” that a charterer by demise was not a beneficial owner. I I A.2.2 Powick’s critique J J 23. Mr. Sussex contends that “Congreso” was wrong or, at least, K K imprecise. He suggest that “beneficial ownership” in HCO s.12(B)(4) L cannot simply mean “equitable ownership” as Robert Goff J decided. L M M 24. Mr. Sussex begins his argument by pointing out that, when N someone is the absolute owner of a chattel (such as a ship), there is no N separate identifiable equitable estate. O O P 25. In support of his proposition, Mr. Sussex notes a dictum of P Lord Browne-Wilkinson in West-Deutsche Landesbank Girozentrale v. Q Q Islington Borough Council [1996] AC 669 (at 706F):- R “A person solely entitled to the full beneficial ownership of R money or property, both at law or in equity, does not enjoy an S equitable interest in that property. The legal title carries with it S all rights. Unless and until there is a separation of the legal and equitable estates, there is no separate equitable title.” T T U U V V 由此 A - 11 - A B 26. Mr. Sussex then points out that trusts of ships are rare. B Typically, in real life, “ownership” of a vessel will be commensurate with C C absolute ownership. The legal and equitable interests will not have been D separated in such situation. D E E 27. It follows (Mr. Sussex submits) that “beneficial ownership” in F F HCO s.12B(4) must denote something other than “equitable ownership”. This is because, the paradigm situation of ownership being one where the G G legal and equitable interests in a ship have not been separated, it will be H H meaningless (and wrong) to speak of there being an “equitable” owner. I I 28. Indeed, Mr. Sussex argues that by itself the word “owner” in J J s.12B(4) can refer to a legal or equitable owner. The word “beneficial,” on K the other hand, must add something more. It should (the argument runs) K connote some quality or attribute that is distinctive of the “bundle of rights” L L constituting full ownership. M M 29. Mr Sussex suggests that a key element of the bundle of rights N N associated with ownership must be the ability to enjoy the proceeds from O the sale of an asset. If a person is not free to use such sale proceeds as one O wishes, then it cannot be (Mr. Sussex submits) that such person is a P P “beneficial owner” of the asset. He does not “own” or hold the asset for his Q “benefit” but for the benefit of others. It is therefore in this sense that Q (according to Mr. Sussex) the concept of beneficial ownership in s.12B(4) R R should be construed. S S 30. Here (Mr. Sussex concludes), although it is the registered T T owner of the 4 vessels, Powick cannot be the “beneficial owner”. This is U U V V 由此 A - 12 - A B because Powick, in liquidation, cannot use the proceeds from the sale of B any of its assets (including the 4 vessels) as it wishes. Such proceeds are C C subject to the statutory regime imposed by the Singaporean insolvency law. D The proceeds from the sale of Powick’s assets must be held by its D liquidators for the benefit of the company’s creditors and not for Powick’s E E own enjoyment. F F G A.2.3 Evaluation of Powick’s critique G 31. I am not persuaded by Mr. Sussex’s argument. I would make H H three observations. I I J 32. First, one construes the meaning of “beneficial ownership” in J HCO s.12B(4) by reference to the purpose of the provision. K K L 33. The section allows claimants to treat ships (among other L property) as security for certain types of Admiralty claim. But ships should M M not be subject to such jurisdiction unless they are the property of a relevant N person. N O O 34. As a matter of general principle, in the absence of compelling P reason, property belonging to X (a stranger) should not be used to secure a P claim on which Y (a relevant person) is liable. The conditions in s.12B(4) Q Q are meant to ensure that, subject to an expressly recognised exception R covering demise charters, a stranger’s property is not used to discharge R someone else’s liability. S S T 35. Thus, as far as “beneficial ownership” is concerned, HCO T s.12B(4) must be concerned with title to property. “Beneficial ownership” U U V V 由此 A - 13 - A B cannot merely be about the control or administration of a vessel or even the B enjoyment of the proceeds from the sale of a vessel. C C D 36. A person can control a ship but have no title in it. By the same D token, a person may for a variety of reasons (including mortgage, charge or E E assignment) have put out of his hands the full enjoyment of the proceeds of F F sale from an asset. But that would not necessarily mean that the person is unable to pass good title in the asset to third parties. G G H H 37. By themselves, considerations of administrative control or I beneficial enjoyment of the proceeds of sale do not answer the key question I that needs to be addressed in determining whether in rem jurisdiction exists. J J I accept, of course, that factors such as administrative control and K enjoyment of the proceeds of sale may provide evidence which can assist in K answering the key question that needs to be addressed (see, for example, L L The “Nazym Khikmet” [1996] 2 Lloyds Law Rep 362). M M 38. And that key question is purely one about title. It is whether a N N particular ship is an asset in which a relevant person holds a proprietary O interest against which a claimant can enforce his claim. To put it in another O way, the question is whether a relevant person can sell or dispose of a ship P P and, in so doing, convey good title in the asset to a third party purchaser. Q Q 39. I am fortified in my view by authority. R R S 40. For instance, in The “St. Merriel” [1962] P 247, Hewson J S stated:- T T U U V V 由此 A - 14 - A B “‘Beneficially owned’ is not defined in [AJA 1956]; and there are B circumstances where a ship is owned by one person -- that is true ownership -- where that person is the only person with a right to C C sell and yet where the same ship is beneficially possessed -- if I may use that expression -- or beneficially controlled, by some D other person, such as in this case, where the ship is under charter D by demise. But the words of the Act are ‘as respects all the shares therein,’ and I conclude that the words are there for some E E purpose and that that purpose is to indicate the true owner, that is, the only person with a right to sell all the shares.” F F 41. In The Pangkalan Susu/ Permina 3001 [1975-77] SLR 252, the G G Singapore Court of Appeal construed the expression “beneficial H H ownership” in s.4(4) of the Singapore High Court (Admiralty Jurisdiction) Act in similar fashion. The latter section is identical to that from AJA 1956 I I considered by Brandon J in “Andrea Ursula” and Robert Goff J in J J “Congreso”. K K 42. At 254 F-H, Wee CJ said (echoing Robert Goff J in L L “Congreso”):- M “The question is what do the words ‘beneficially owned as M respects all the shares therein’ mean in the context of the Act. These words are not defined in the Act. Apart from authority, we N N would construe them to refer only to such ownership of a ship as is vested in a person who has the right to sell, dispose of or O alienate all the shares in that ship. Our construction would O clearly cover the case of a ship owned by a person who, whether he is the legal owner or not, is in any case the equitable owner of P all the shares therein. In our opinion, it would be a misuse of P language to equate full possession and control of a ship with Q beneficial ownership as respects all the shares in a ship. The Q word ‘ownership’ connotes title, legal or equitable whereas the expression ‘possession and control’, however full and complete, R is not related to title. Although a person with only full possession R and control of a ship such as a demise charterer, has the beneficial use of her, in our opinion he does not have the beneficial S S ownership as respects all the shares in the ship and the ship is not ‘beneficially owned as respects all the shares therein’ by him T within the meaning of s.4(4).” T U U V V 由此 A - 15 - A B 43. In my judgment, contrary to what Mr. Sussex submits, the B expression “beneficial ownership” in HCO s.12B(4) focuses simply on C C matters of title, namely, the right to sell or dispose of a ship. D D 44. Second, I have no difficulty in understanding Robert Goff J’s E E reading of “beneficial ownership” as covering the case where an owner is F F absolute owner and the legal and equitable interests have not been separated. G G H H 45. All Robert Goff J was saying was that a “beneficial owner” is I one of whom it could either be said that:- I (1) he is the owner of a particular ship at law or in equity; or, J J (2) at the very least, he is the owner of the particular ship in equity. K K L 46. Robert Goff J may have put it more succinctly by referring to L “cases of equitable ownership, whether or not accompanied by legal M M ownership”. But, teased out, his words are equivalent to what I have just N set out. N O O 47. The first limb of that expanded statement covers the common P situation where a ship’s registered owner is its full owner. The second limb P deals with the case where a nominee holds a vessel as trustee for and on Q Q behalf of a relevant person. The latter situation may be rare, but it remains R a possibility. R S S 48. I do not accept that there is the imprecision which Mr. Sussex T asserts. T U U V V 由此 A - 16 - A B 49. Third, if one takes “beneficial ownership” to refer to the B person who has title to sell the 4 ships here, the answer to the question who C C is the “beneficial owner” here is self-evident. The “beneficial owner” D within the meaning of HCO s.12B(4) can only be Powick. D E E 50. Liquidation simply has meant the disposition of the vessels, F F including the decision whether or not to sell them, rests with Powick’s liquidator and not with its board. But there is no question that full title to G G the ships remains vested in Powick. H H I 51. Just as any other assets of Powick, the 4 vessels are subject to I the insolvency regime detailed in Singapore’s Companies Act (Cap.50). J J By that regime any proceeds from the sale of assets not standing as security K for particular claims must go towards paying off creditors and cannot be K used for a company’s benefit. L L M 52. But that does not make Powick’s liquidator a trustee M (as opposed to a mere fiduciary). A sale of Powick’s assets by the N N liquidator is executed in Powick’s name, not that of the liquidator. O O 53. Nor does liquidation impress Powick’s assets with a trust P P (in the traditional sense) in favour of the body of its creditors. There has Q been no separation of the legal and equitable estates in the 4 vessels as a Q result of the liquidation. At law and in equity Powick remains their owner. R R S 54. It follows that at the time when writs were taken out by ITS S and Oetker the beneficial ownership in the vessels remained with the T T “relevant person”, namely, Powick. There is no basis to set aside the writs U U V V 由此 A - 17 - A B on the ground the by the time the writs were issued beneficial ownership B (in the sense identified above) had changed. C C D D A.3 Ayerst versus Lintner E E 55. Much of the discussion before Waung J (and some of the argument on appeal) considered the differing approaches to the F F construction of the term “beneficial ownership” in Ayerst (Inspector of G G Taxes) v. C & K (Construction) Ltd. [1976] AC 167 (HL) and Linter Textiles Australia Ltd. (in liquidation) v. Commissioner of Taxation (2005) H H 20 CLR 592 (H Ct of Aust.). I I J 56. I doubt that these 2 cases are more than peripherally relevant. J Nonetheless, in deference to counsel’s submissions, I propose to deal K K briefly with the approaches in the two cases, if only to articulate my doubt. L L A.3.1 Ayerst M M 57. In Ayerst a taxpayer bought the business of M Ltd., a company N N in liquidation. The taxpayer then sought to set off against its taxable profits O the losses and claims to capital allowances which M had accrued. Under O the Finance Act 1954, the taxpayer could do so if, despite liquidation, M’s P P assets (namely, the trading losses and claims to capital allowances just Q mentioned) remained within M’s “beneficial ownership”. Q R R 58. Lord Diplock (with whom the other Law Lords agreed) held S that M’s assets ceased to be under its “beneficial ownership” upon S liquidation. Following a line of authority (relating to companies in T T liquidation) starting with In re Oriental Inland Steam Co. (1874) 9 Ch App U U V V 由此 A - 18 - A B 557, he held that as a result of winding up M lost “the right of [an] owner to B enjoy the fruits of [its property] or dispose of [its property] for [its] own C C benefit”. D D 59. Although M’s liquidator was not a “trustee” and M’s property E E was not held on “trust” in the sense that such words are normally F F understood, Lord Diplock observed (at 178F) that:- G “It is no misuse of language to describe the property as being held G by the trustee [that is, the liquidator] on a statutory trust [that is, the insolvency regime set out in the Companies Acts] if the H qualifying adjective ‘statutory’ is understood as indicating that H the trust does not bear the indicia which characterise a trust as it I was recognised by the Court of Chancery apart from statute.” I J J 60. M’s property could thus no longer be said to be within its “beneficial ownership”. The effect of the statutory regime of insolvency K K was (at 180F):- L L “to give to the property of a company in liquidation that essential characteristic which distinguished trust property from other M property, viz., that it could not be used or disposed of by the legal M owner for his own benefit, but must be used or disposed of for the benefit of other persons.” N N O O 61. Lord Diplock then concluded his speech as follows (at 180G- 181D):- P P “My Lords, the expression ‘beneficial owner’ in relation to the Q proprietary interest of a company in its assets was first used in a Q taxing statute in 1927. Section 55 of the Finance Act 1927 provided for relief from capital and transfer stamp duty in cases R R of reconstruction or amalgamation of companies where shares in a transferee company were issued as consideration for the S acquisition of the undertaking of the transferor company. S Subsection (6)(a) (b) and (c) made provision for three exceptions to the right to this relief. The exception provided for in paragraph T (b) is expressed to depend upon whether within a period of two T years from a specified date the ‘... [transferor] ... company ceases, U U V V 由此 A - 19 - A B otherwise than in consequence of reconstruction, amalgamation B or liquidation, to be the beneficial owner of the shares so issued to it.’ From this can be inferred a recognition by Parliament that C C when a company is in liquidation it ceases to be the ‘beneficial owner’ of its assets within the meaning of that expression as used D by the draftsman in a taxing statute. D The expressions ‘beneficial owner’ and ‘beneficial ownership’ E appear again in section 42(2)(b) of the Finance Act 1930 in E connection with what companies were to be treated as associated companies for the purpose of relief from transfer stamp duty, and F F in section 42 of the Finance Act 1938. This dealt with the grouping of profits of parent and subsidiary companies for the G purpose of national defence contribution. The definition of G subsidiary company, which incorporates the reference to the requirement of ‘beneficial ownership’ of its shares by its parent H H company, is in the same words as the corresponding definition in section 17(6) of the Finance Act 1954. I I So when those words were repeated in the Finance Act 1954 not only was there a consistent line of judicial authority that upon J going into liquidation a company ceases to be ‘beneficial owner’ J of its assets, as that expression has been used as a term of legal art since 1874, but also there has been a consistent use in taxing K K statutes of the expressions ‘beneficial owner’ and ‘beneficial ownership’ in relation to the proprietary interest of a company in L its assets which started with the Finance Act 1927, where the L context makes it clear that a company upon going into liquidation ceases to be ‘beneficial owner’ of its assets as that expression is M M used in a taxing statute.” N N 62. It will be noticed that Lord Diplock was at pains to tie his O understanding of the meaning of “beneficial ownership” to the specific O contexts of liquidation and the Finance Acts. Since then, Ayerst has been P P frequently relied upon as authority for the proposition that on winding up a Q Q company loses the “beneficial ownership” of its assets. Two recent dicta may serve as examples. R R S S 63. In Mitchell v. Carter [1997] 1 BCLC 673, which considered T whether the Court could decide priorities in relation to the fruits of T U U V V 由此 A - 20 - A B garnishment proceedings brought against a company in liquidation, B Millett LJ said (at 636f-h):- C C “The making of a winding-up order divests the company of the D beneficial ownership of its assets which cease to be applicable for D its own benefit. They become instead subject to a statutory scheme for distribution among the creditors and members of the E company. The responsibility for collecting the assets and E implementing the statutory scheme is vested in the liquidator F subject to the ultimate control of the court. The creditors do not F themselves acquire a beneficial interest in any of the assets, but only a right to have them administered in accordance with the G statutory scheme. These principles were established in Ayerst... G They apply to all the assets of the company, both in England and abroad, for the making of a winding-up order is regarded as H H having worldwide effect.” I I 64. In Buchler v. Talbot [2004] UKHL 9, which concerned the J J Court’s power to order that liquidators be paid out of assets subject to a floating charge, Lord Hoffmann said (at §28):- K K “The winding up of a company is a form of collective execution L by all its creditors against all its available assets. The resolution L or order for winding up divests the company of the beneficial interest in its assets. They become a fund which the company M M thereafter holds in trust to discharge its liabilities: Ayerst... It is a special kind of trust because neither the creditors nor anyone else N have a proprietary beneficial interest in accordance with the N provisions of the Insolvency Act 1986: see In re Calgary and Edmonton Land Co. Ltd. [1975] 1 WLR 355, 359. But the trust O applies only to the company’s property. It does not affect the O proprietary interests of others.” P P 65. However widely Ayerst has been cited in relation to what Q Q constitutes a company’s “beneficial ownership” in a winding-up, no case R R has applied Ayerst to the Admiralty context. As we have seen, even in Singapore, the Courts have followed Robert Goff J in “Congreso”. S S T T U U V V 由此 A - 21 - A B A.3.2 Linter B C 66. In Linter the majority of the High Court of Australia C (Gleeson CJ, Gummow, Hayne, Cullinan and Heydon JJ) were critical of D D the Ayerst approach. Linter involved the question whether a taxpayer could E claim a certain deduction. It could do so, under the Income Tax E Assessment Act 1936, if a company “beneficially owned” its assets F F although in liquidation. G G 67. The majority thought (at §48) the trust analogy employed by H H Lord Diplock in Ayerst was “of no utility, and indeed is misleading”. I Instead they approved the following dictum of Menzies J in Franklin’s I Selfserve Pty Ltd. v. Federal Commissioner of Taxation (1970) 125 CLR 52 J J (at 69-70):- K K “Even if a company, being insolvent, goes into liquidation, I find difficulty in regarding the company itself as trustee for anybody, L notwithstanding that it can no longer employ its assets in its L business, nor dispose of them. The assets must be held for the purpose of its own liquidation in accordance with statute. Of M course its assets have to be realized by the liquidator and M distributed among the company’s creditors but this is done in N accordance with elaborate statutory provisions for bringing about N the result for which the statute provides. The matter is not left to the application of general law relaying to trustees and cestuis que O trust....” O P P 68. See also to similar effect the concurring analysis of McHugh J Q in Linter (at §§121-130). Q R R 69. The majority therefore held that a company in liquidation S remained the “beneficial owner” of its assets within the meaning of the S 1936 Act. T T U U V V 由此 A - 22 - A B 70. In his lone dissenting judgment, Kirby J in Linter nonetheless B rejected (as unnecessary) Lord Diplock’s recourse to a trust analogy in C C Ayerst. The important question for Kirby J was whether, on the facts, the D relevant company could be said to be the “beneficial owner” of its assets D within the meaning of the 1936 Act. That was wholly a matter of a E E consideration of the latter statute’s history and purpose and “the consistent F F meaning given to overseas equivalent statutory expressions”. G G 71. Kirby J’s view may be seen from the following passage:- H H “241. It was that notion of beneficial ownership of the company’s property after the commencement of winding I up that was given effect in In re Oriental Inland Steam..., I the 1874 decision that Lord Diplock regarded as establishing the principle applicable in Ayerst. In that case, J J James LJ had said of the effect of liquidation:- K ‘The English Act of Parliament has enacted that in K the case of a winding-up the assets of the company so wound up are to be collected and applied in discharge L of its liabilities. [That makes the property of the L company clearly trust property.] It is property M affected by the Act of Parliament with an obligation M to be dealt with by the proper officer in a particular way. Then it has ceased to be beneficially the N property of the company.’ N 242. The introduction of analogies, taken from the law of trusts, O O which occasions the attempt, in the joint reasons in this Court, to distinguish the settled line of authority on this P aspect of revenue law in the United Kingdom, is, with P respect, a forensic red-herring. It appears to have been introduced into these proceedings in a not unfamiliar Q reaction to keep the Australian waters of equity and trust Q law unsullied by foreign and supposedly deleterious intrusions, even where (as here) the intrusions originated R R in the country from which the law of equity and trusts itself derives. I have no sympathy for such parochial S inflexibilities. S 243. The reference to ‘trust property’ in the earlier English T T authorities was not, as such an attempt to import all of the features of the law of trusts into defined statutory U U V V 由此 A - 23 - A B relationships following a company liquidation. Self- B evidently, that could not have been intended by the knowledgeable and experienced judges involved. Instead, C C it was an attempt (in effect in an aside in the course of reasoning) to explain the construction and operation of a D statute in terms that would have been understood by D lawyers in the English Court of Chancery in 1874, who had the responsibility of applying the pertinent statute. E E The analogy was not the essence of the reasoning of the English judges. This can be seen by the simple expedient F of deleting the reference to the analogy of trust property F (shown in brackets in the foregoing quotation) from the reasons of James LJ. His Lordship’s reasons remain G coherent and convincing without the words in brackets. G The essence of those words was an attempt to draw on a familiar analogy to help explain the operation which the H H Act of Parliament had upon the property in question. By that operation ‘it has ceased to be beneficially the property I of the company’. I 244. In Ayerst, Lord Diplock noted that the holding in Oriental J Inland Steam Co, based on the relevant United Kingdom J legislation, had been repeated in successive editions of K Buckley on the Companies Acts ‘from 1897 to the present K day’. As such, it had clearly passed muster before a great many English lawyers of high distinction and experience, L who fully understood the law of company liquidation. L Lord Diplock recorded the invitation before the House of Lords to say that the reasoning was wrong ‘because it was M M founded on the false premise that the property is subject to a “trust” in the strict sense of that expression as it was N used in equity before 1862’. His Lordship rejected that N sterile argument. Instead, he grounded his interpretation of the phrase in the settled meaning of beneficial O O ownership in this context which was to be take as incorporated in revenue law when the notion of ‘beneficial P ownership’ was first used in a United Kingdom taxing P statute in 1927. He thus expressly considered, and rejected, the reasoning which prevailed in the Federal Q Court in this case and now finds favour with a majority in Q this Court. Not a single Law Lord dissented from Lord Diplock’s speech. R R 245. I can see no reason of legal authority, principle or policy S to justify this Court’s taking a different course from that S adopted by the unanimous opinion of the House of Lords on a precisely identical point of revenue law. Only an T T elaborate reasoning, founded on metaphors, similes and analogical references (and based on a somewhat parochial U U V V 由此 A - 24 - A B antipodean inflexibility concerning the law of trusts), B could persuade this Court to impose, on similar Australian statutory language, a construction opposite to that which C C has been followed for one and a quarter centuries in the United Kingdom. There is no reason why we should take D such a course. There are many reasons why we should D not.” E E 72. I have quoted Kirby J at length, because Mr. Sussex relies F F heavily on his dissenting judgment. But, properly understood, I do not G consider that the judgment of Kirby J assists Powick. G H H 73. Kirby J did not dissent by reason of an adherence to I Lord Diplock’s trust analogy. Instead, he thought that, within the special I context of revenue law statutes, in light of a line of authority following J J Ayerst, the expression “beneficial ownership” had acquired a settled K meaning in England and elsewhere in the Commonwealth. This meaning K treated a company in liquidation as having ceased to be the “beneficial L L owner” of its assets, whatever the strict position in equity and the law of M trusts. Kirby J felt (at §246) that “[t]his fact should ... make this Court M pause before striking out on the opposite approach in what, clearly, is a N N common problem of revenue law arising in many like jurisdictions”. O O P A.3.3 Relevance to present case P 74. I do not think that the debate which emerges from the Q Q judgments in Ayerst and Linter is pertinent to the outcome of this appeal. I R R have 2 reasons for this view. S S 75. First, plainly the expression “beneficial ownership” can mean T T different things in different contexts or statutes. Merely because the words U U V V 由此 A - 25 - A B mean X in one context does not mean that the words will have the same B meaning in other contexts. C C D 76. In Ayerst, at the end of his speech Lord Diplock went out of his D way to explain how in the specific context of the Finance Acts and E E liquidation, the phrase “beneficial ownership” has become a term of art. F F Kirby J expressly recognised this in his dissenting judgment in Linter and so confined himself to construing “beneficial ownership” within the field of G G revenue law. H H I 77. It follows that the construction of “beneficial ownership” in the I particular area of revenue law canvassed in Ayerst and Linter can only be J J of marginal interest in the wholly different context of Admiralty. Whether K the approach in Ayerst or that in Linter is ultimately to be preferred, is K neither here nor there in the present situation. The phrase “beneficial L L owner” in the HCO s.12B(4) must be construed in light of the purpose and M history of the Admiralty in rem jurisdiction. M N N 78. Second, before Waung J, it was suggested by Powick that for a O variety of reasons the Singapore Courts would prefer the Ayerst to the O Linter approach. I propose to ssume for the purpose of argument that such P P indeed would be the case. Q Q 79. By itself such assumption will not take the analysis very far. If R R context is everything, such assumption still would require an identification S of the specific circumstances in which the Singapore court would treat a S company as having retained or lost a “beneficial ownership” in the Ayerst T T sense. U U V V 由此 A - 26 - A B 80. Nevertheless, let me proceed on the basis that generally in a B winding-up the Singapore Court would follow the Ayerst approach. I shall C C make this assumption despite the actual position in Singapore not being so D clear-cut. See, for example, Low Gim Har v. Low Gim Siah [1992] 2 SLR D 593 (Chan Sek Keong J), Ng Wei Teck Michael v. Oversea-Chinese E E Banking Corporartion [1998] 2 SLR 1 (CA), Kuok (Singapore) Ltd. v. F F Commissioner of Stamp Duties [2003] 4 SLR 43 (Woo Bih Li J). I note that Mr. Sussex accepted that, insofar as “beneficial ownership” in the G G liquidation context was concerned, the position under Hong Kong and H H Singapore law was unlikely to be different. I I 81. Even then, a preference for Ayerst by the Singapore Courts in J J the liquidation context would not benefit Powick’s argument. K K 82. In light of my conclusion about the meaning of “beneficial L L owner” in HCO s.12B(4), if the writs here are to be set aside, Mr. Sussex M must show that, under Singapore law, as a result of liquidation the equitable M ownership of Powick’s assets have become vested in some person other N N than Powick. However, Ayerst does not go so far. O O 83. This is because, as Lord Diplock repeatedly acknowledges in P P Ayerst, there is no trust (in the strict general law sense) of a company’s Q assets upon liquidation. Thus, even if Ayerst is wholly right and Linter Q somehow wrong, the legal and equitable ownership of assets still would R R remain with Powick. Demonstrably, there has been no change in that S ownership, although the company’s assets are now to be administered by S the liquidator for the benefit of its creditors. The company (acting through T T its liquidator) retains the power to sell (and to give good title to) its assets. U U V V 由此 A - 27 - A B A.4 Conclusion on the “Liquidation Point” B C 84. Powick fails on this point. C D D B. Argument 2: “The Judicial Sale Point” E E 85. Mr. Sussex argues that, as result of the judicial sale of the F 4 vessels, their beneficial ownership must have changed. The Oetker writs F not having been issued until after that sale, Oetker should not be entitled to G G invoke the Admiralty in rem jurisdiction under HCO s.12B(4). H H 86. I disagree. I I J 87. In HCO ss.12B(4)(a) and (b) the references to “ship” clearly J indicate a ship in connection with which an in rem claim is being made. K K This is because, at the time when a cause of action arises, there cannot yet L have been an arrest and judicial sale of a relevant vessel. L M M 88. But the word “ship” in HCO ss.12B(4)(i) and (ii) must refer to N a particular “ship or the proceeds from the judicial sale of a ship”. This is N because, by time-honoured tradition in the Admiralty jurisdiction, the O O proceeds from the judicial sale of a res (such as a ship) are treated as P equivalent to the res itself. P Q Q 89. Mr. Sussex submits that HCO s.12B(4) cannot reasonably be R R read in the way which I have just set out. But I do not see why. In particular, it seems to me that the reference to “shares” in ss.12B(4)(i) and S S (ii) can be construed without any awkwardness as referring to “all the T T shares in the ship or the proceeds from the judicial sale of the ship”. U U V V 由此 A - 28 - A B 90. The purpose of a judicial sale following arrest is to prevent B wastage of an asset. For example, in the case of a ship, the expenses of C C maintaining her (including the employment of a skeleton crew) pending D resolution of a dispute, would diminish whatever value the ship may D eventually fetch at the end of the day. E E F F 91. It would be strange if the right to bring an in rem claim (especially one involving a statutory lien) were to be dependent on the G G timing of a judicial sale. Yet that would be the result if Mr. Sussex’ H H argument is right. I I 92. In On Demand plc. v. Michael Gerson plc [2003] 1 AC 368 (at J J §7), Lord Hobhouse explained the rationale behind a judicial sale as K follows:- K “An order for a sale pendente lite does not deprive parties of their L rights. It simply, for purely practical reasons, provides a L mechanism for allowing the parties’ rights as they existed immediately before the making of the order to be ascertained M M without in the meantime damaging the value of whatever those rights were. Thus perishable goods may be ordered by a master N of the Queen’s Bench Division to be sold and the proceeds paid N into court or a ship or cargo under arrest may be ordered to be sold by the Admiralty judge or registrar without affecting what O O were the rights of the parties and other potential claimants over the property sold....” P P 93. Mr. Sussex accepts that, within the body of Admiralty law, the Q Q proceeds from the judicial sale of a res are treated as the res. He also R R accepts the above dictum of Lord Hobhouse. But he contends that the S conversion of the res and the dictum just cited are beside the point. He says S that, by analogy with the situation of a private sale between 2 persons, T T following judicial sale a person who otherwise would have a statutory lien U U V V 由此 A - 29 - A B loses the right to bring an in rem claim as a result of a change in the B beneficial ownership of the res. C C D 94. I do not think that that submission is right. As Lord Hobhouse D noted, a judicial sale “does not deprive parties of their rights”. It is done E E purely as a matter of expediency to preserve a wasting asset. A private deal F F between 2 persons does not have that effect. In that case, the beneficial ownership would truly pass from one person to another. In contrast, since a G G res once judicially sold is treated as equivalent to its proceeds, it is wrong H H to say that the beneficial ownership in the res has been transferred to I someone else. I J J 95. Consequently, Powick also must fail on this point. K K III. CONCLUSION L L 96. I would dismiss Powick’s appeal. I would also make an Order M M Nisi that Powick pay the costs of ITS and Oetker in this appeal, such costs N to be taxed if not agreed. N O O Hon Stone J: P P 97. I have had the advantage of reading in draft the judgments of Q Q Reyes J and that of Ma CJHC. R R 98. I respectfully agree with the views expressed therein, and S S gratefully adopt the recitation of the facts and the case citations referred to T in the judgment of Reyes J. T U U V V 由此 A - 30 - A B 99. In deference to the quality of the argument from all parties B before the court, I wish to add a few words of my own. I take the issues in C C this case in the order in which they were advanced. D D E (i) ‘The Liquidation Point’ E 100. At bottom, the thesis advanced by Mr Sussex SC, for the F F appellants, was straightforward. It proceeded thus: G G 101. In order to establish in rem jurisdiction requirement within the H H terms of section 12B(4) of the Supreme Court Ordinance, Cap 4, it must be I I demonstrated that the target otherwise liable to the plaintiff in personam J also must be the ‘beneficial owner’ of the vessel in question. J K K 102. In the present instances there was no doubt but that the L defendants indeed were potentially so liable in personam; however, where L these actions fell down in jurisdictional terms, said Mr Sussex, was that M M there was a clear lack of coincidence of such beneficial ownership. N N 103. Such lack of coincidence, he argued, was because at the O O material time, which was the date of issuance of in rem proceedings, P defendant owners, Powick Marine (S) Pte. Ltd, had entered into creditors’ P voluntary liquidation in Singapore on 13 May 2003; pursuant to section Q Q 291(1)(a) of the Singapore Companies Act, the directors of Powick had R made a formal declaration of the company’s inability to continue its R business by reason of its liabilities, a provisional liquidator had been S S appointed, and a declaration to that effect had been lodged with the Court T Registrar and the Singaporean Official Receiver on the following day. T U U V V 由此 A - 31 - A B 104. The ineluctable result of this state of affairs, Mr Sussex B submitted, was that the jurisdictional criteria within section 12B(4) no C C longer was able to be satisfied, because at the material time Powick could D not properly be said to be the ‘beneficial owner’ of the vessels in question. D E E 105. Hence, the writs in question, all filed after Powick had entered F F into voluntary liquidation, should have been set aside, and the learned judge below had been in error in failing so to order. Hence this appeal. G G H H 106. The concept of ‘beneficial ownership’, maintained Mr Sussex, I “meant different things in different contexts”, and in the present context I this term denoted an “adjunct” to full ownership or a “bundle of rights co- J J extensive with full ownership”. K K 107. Thus, he said, where, as in the present cases, a right L L co-extensive with full ownership had been lost in the sense that the M company, now in voluntary liquidation pre-dating the issuance of Hong M Kong proceedings, no longer had the unrestricted right to use and/or N N dispose of the vessels in question; thus, ‘beneficial ownership’ in the true O sense could not be said to vest in Powick, and hence the disconnect which O sufficed to remove the basis of the purported exercise of the Admiralty P P jurisdiction. Q Q 108. This argument necessarily involved a revisionist interpretation R R (Mr Sussex delicately termed it a “refinement”) of the celebrated, and S widely adopted, judgment of Goff J (as he then was) in “1 Congreso, op cit., S wherein Goff J had equated the term “beneficial ownership” within the T T Administration of Justice Act 1956 with “equitable ownership”, his U U V V 由此 A - 32 - A B submission further seeking to drive a conceptual wedge between the terms B “equitable ownership” (which could not be separated from “legal C C ownership”) on the one hand and on the other “beneficial ownership”, D which, he said, must connote “something different”. D E E 109. Accordingly, Mr Sussex continued, once the unrestricted right F F to use/dispose of the vessels had been lost, Powick no longer possessed “beneficial ownership” properly so-called, and for present purposes it G G mattered not to whom such ‘beneficial ownership’ had passed, since it was H H sufficient merely to identify the fact that ‘beneficial ownership’ no longer I vested in Powick. I J J 110. With respect to an ingenious argument persuasively delivered, K in my view this contention suffered from the twin defects of being both K artificial and wrong. L L M 111. As Reyes J has emphasised in his citation of a passage from M the judgment of Hewson J in The “St. Merriel”, (op cit, at para 40), and as N N Mr Haddon Cave also submitted (“what the law of Admiralty jurisdiction is O all about”), such jurisdiction fundamentally is concerned is the concept of O the “true ownership” of the vessel(s) the subject of the exercise of such P P jurisdiction, and for my part I fail to grasp why pursuant a form of Q Singaporean statutory liquidation procedure the fact that administrative Q decisions involving the activities of Powick (including the right of disposal R R of the vessels owned by Powick) now are to be exercised by the provisional S liquidator acting in accordance with directions of the Singaporean court – S as opposed to the Board of Directors of Powick – should be regarded as T T U U V V 由此 A - 33 - A B having the effect of divesting that company of the ‘beneficial ownership’ B of the arrested vessels. C C D 112. This was a theme addressed both by Mr Wright and by D Mr Haddon Cave, wherein it was emphasised that Powick had not “at any E E stage” been divested of the right to dispose of the vessels consequent upon F F the voluntary liquidation procedure. G G 113. To the contrary, it was stressed that any sale/disposition would H H be performed in the name of Powick in accordance with the statutory I scheme and the directions of the supervising court; in this sense, therefore, I the liquidator, qua agent of the company, constituted merely a change in J J management structure, and there could be no doubt but that the company, K Powick, at the time of arrests, had remained the legal and beneficial owner K of the vessels. L L M 114. Nor, submitted Mr Haddon Cave, was there any justification M for bifurcating “equitable ownership” and “beneficial ownership”, as for N N the purpose of his argument Mr Sussex had attempted to do, whilst the O suggestion that, in effect, Goff J had been wrong or had been O misinterpreted in “1 Congreso”, op cit., was, he remarked, a somewhat P P surprising submission to advance, given that the approach of the learned Q judge in that case subsequently had been adopted in maritime cases by Q virtually the entirety of the common law world, and it was inherently R R unlikely that the true meaning of that judgment universally had been S misunderstood. S T T U U V V 由此 A - 34 - A B 115. I accept this submission. For my part, I have no difficulty in B agreeing with the conclusion of Reyes J (infra, at paras 43, 44) that the C C term “beneficial ownership” within section 12B(4) is an expression D connoting title vesting in an owner with the right to sell or dispose of a D vessel, and that the expression connotes a situation wherein the legal and E E equitable interests have not been separated; in addition to the judgment of F F Wee CJ in The Pangkalan Susu/Permina 3001, op cit., to which Reyes J has drawn attention (infra, at para 42), I note, for example, that this G G approach also has been adopted in the High Court of New Zealand: see H H Columbo Drydocks Ltd v. The ship “Om Al-Quora” [1990] 1 NZLR 608, I wherein Gallen J held that the words “beneficially owned as respects all the I shares therein” in section 5(2)(b)(i) of the equivalent legislation, the J J Admiralty Act 1973 (the wording of which substantially follows that of K section 3(4) of the Administration of Justice Act 1956, since superseded in K like terms by section 21 of the Supreme Court Act 1981) refer to title to L L rather than possession of a ship. M M 116. I further accept the contention that the ‘legal owner’ of a vessel, N N who possesses proprietary rights of title, also may be not inappropriately O described as the ‘beneficial’ owner or the ‘legal and equitable’ owner, and O that the phrase “beneficial owner of that ship as respects all the shares in it” P P in section 12B(4) emphasises the issue of title; it seems clear that the Q addition of the word ‘beneficial’ before the term ‘owner’ simply was to Q take account of the institution of the trust, thus ensuring that in the R R (admittedly rare) instance of a ship being operated under cloak of a trust, S those interested in the ship could not thereby avoid the arrest of the ship – S as indeed was recognized by Goff J in Congreso, op cit. T T U U V V 由此 A - 35 - A B 117. If the foregoing analysis be correct, it is difficult to see why in B this case there is any need to dwell upon a comparison of Ayerst, op cit., the C C tax case decided in 1976 in the House of Lords in which Lord Diplock held D that the beneficial assets of M Ltd, a company purchased by the taxpayer D had ceased to be “beneficially owned” upon liquidation, with that of the E E approach of the High Court of Australia in Lintner, op cit., wherein, as F F Reyes J has pointed out (at para 66 et seq.) the majority of that court declined to follow the approach of Lord Diplock in Ayerst, expressly G G rejecting Lord Diplock’s trust analogy when a company was placed in H H liquidation, and holding that a company in liquidation remained the I ‘beneficial owner’ of its assets within the meaning of the Australian I Income Tax Assessment Act, 1936. J J K 118. In the course of his argument Mr Sussex naturally placed great K reliance upon the speech of Lord Diplock in Ayerst, and also on the L L dissenting judgment of Kirby J – whom, he said, was the only judge in M Lintner who had understood the “true position” as to the meaning and M effect of ‘beneficial ownership’ – but it is clear that within the context of N N Lintner Kirby J had framed his remarks solely in terms of “a precisely O identical point of revenue law” which had attracted the unanimous O agreement of the House of Lords in Ayerst, and equally that it was this P P existence of such commonality which had caused him to take the view that Q he did. Q R R 119. In considering/construing the statutory ambit of Admiralty S jurisdiction in Hong Kong, and in particular the meaning to be attributed to S the phrase “beneficial owner” within section 12B(4), Cap 4, I do not find T T citation of tax jurisprudence in other jurisdictions of particular assistance, U U V V 由此 A - 36 - A B nor can I divine any reason as to why such assistance should be thought to B be in any sense determinative; as Kirby J himself observed (Lintner, op cit., C C at 661), “the meaning of beneficial ownership of property and rights in D property obviously depends on the context”, and in differing from the D majority in Lintner – and in holding that the interposition of a liquidator E E diminished, to the extent of the liquidator’s powers, the beneficial F F ownership of the shares in the relevant companies – Kirby J took pains to explain that he had reached his dissenting conclusion “for reasons of the G G statutory language; the statutory history; the statutory purpose and the H H consistent meaning given to overseas statutory expressions.” I I 120. For my part, therefore, I have no difficulty in considering the J J meaning to be attributed to statutory language framing the establishment of K in rem jurisdiction in Hong Kong untrammelled by the views of those K eminent judges in the highest courts of England and Australia whose focus L L solely was upon the concept of ‘beneficial ownership’ within the context of M the construction of particular tax statutes. M N N 121. If and in so far as this primary stance be incorrect, however, O and should this matter go further, I would also say that were it necessary O (and I do not believe that it is) for purposes of the present argument to P P come down on one side or the other in the Ayerst/Lintner debate as to the Q meaning of “beneficial ownership” – as a matter of precedent this court is Q bound by neither decision – then on the basis that the law of Singapore has R R not been demonstrated to be different in this regard from that of Hong S Kong (to the contrary, it is common ground between the experts that on a S winding up legal title to the company’s assets remains vested in the T T company), I should have preferred the approach propounded by the U U V V 由此 A - 37 - A B majority in Lintner, which decided that the change in control of the affairs B of the company by reason of the introduction of a liquidator (and thereby a C C change in control of the affairs of his company) had, for the purpose of the D legislation under consideration, no impact upon the ‘beneficial ownership’ D of that company’s assets. E E F F 122. Accordingly, I share the view of Reyes J and Ma CJHC that the ‘liquidation point’, as so characterised throughout this appeal, is not G G well-founded and must be rejected. H H I (ii) The ‘Court Sale’ point I J 123. In practical terms Mr Sussex’s second point potentially was the J more far-reaching; by way of introduction he observed that this was a point K K which he had never seen taken and upon which there appeared to be no L authority. L M M 124. This, he said, purely was a construction argument, which N culminated in the proposition that the term “that ship” within N section 12B(4)(i) must mean precisely that, and not ‘the proceeds of sale of O O that ship’. P P 125. On the present facts, it was accepted by all parties that this was Q Q an argument which applied only to the claims by Oetker, which had not R issued its writs until 18 September 2003, whereas following an order of the R Admiralty Court, the ships in question had been sold prior to that date, on S S 7 July 2003, and the sale proceeds duly paid into court. T T U U V V 由此 A - 38 - A B 126. Accordingly submitted Mr Sussex, given the well established B principle that the sale of a ship has the effect of defeating a claim in rem C C unless such claim already had been protected by issuance of a writ in rem D (see, for example, The “Monica S” [1968] P 741) there was no reason in D principle why a judicial sale should not have the like effect. E E F F 127. It was clear, he said, that section 12B(4) was concerned with the ship before it was sold, when the cause of action arose; plainly in this G G context ‘ship’ meant the vessel itself, and could not mean the ‘proceeds of H H sale’, words which themselves appeared (in contrast to ‘ship’) within I section 12B(6), and on ordinary principles of statutory interpretation the I word ‘ship’ necessitated a consistent reading throughout the section. J J K 128. Thus, the argument continued, a claimant such as Oetker in the K present case (albeit not ITS, which had issued its writs in May 2003, well L L before the court sale) plainly was not in a position to satisfy the M jurisdictional benchmark within section 12B(4) because the judicial sale M had had the effect of transferring the beneficial interest in ‘that ship’ to the N N purchaser thereof. O O 129. A decision on this point had significant commercial P P ramifications in the instant cases, said Mr Sussex, for if Oetker were to be Q permitted to invoke the Admiralty jurisdiction of this court, the size of its Q claims effectively would exhaust such funds as were available consequent R R upon sale, whereas if Oetker – which it was common ground had issued its S writs late in the day and subsequent to the judicial sale – were to be S precluded from maintaining its in rem claim, the liquidator of Powick T T U U V V 由此 A - 39 - A B would be successful in recovering the bulk of such funds for the benefit of B Powick’s creditors. C C D 130. In the present circumstances, therefore, he contended that the D learned judge below had been incorrect to construe the words “that ship” in E E section 12B(4) to mean, in effect, “that ship or the proceeds of sale of that F F ship”. G G 131. On behalf of Oetker Mr Haddon Cave in response was moved H H to characterize this argument as Mr Sussex’s “second heresy”, the first I presumably being that put forward in context of the ‘liquidation point’, and I the argument as to the change in “beneficial ownership” of the vessel co- J J terminus with the appointment of a liquidator within a foreign court K winding up. K L L 132. He emphasized the existing established practice within the M exercise of Admiralty jurisdiction, stressing that the sale of the res flowed M from the inherent jurisdiction of the court to preserve the subject-matter of N N the case and as far as possible was to preserve what essentially was a O wasting asset, given the monies necessarily and continually to be expended O upon a vessel which had been placed under arrest. P P Q 133. In the course of his submission Mr Haddon Cave made Q reference to a number of cases and authoritative texts on Admiralty practice R R and procedure, a review demonstrating that it was not unusual for writs in S rem to be issued subsequent to a court ordered sale – see for example, The S “Leoborg” (No 2), [1963] 2 Lloyd’s LR 441, in which Hewson J held, T T inter alia, that there must be a reasonable limit to time in which claims, a U U V V 由此 A - 40 - A B number of which were raised post-sale, could be brought against the fund B standing in court; and The “Silia”, [1981] 2 Lloyd’s LR 532, a case which C C decided that in the context of an action in rem the world “ship” in section 3 D of the Administration of Justice Act, 1956, included all property on board D other than that owned by someone other than the shipowner, and wherein E E Sheen J (as he then was) observed (at 536) that: F F “…For plaintiffs who issue a writ after the sale of a ship process is available against the fund in court which represents the res. In G such circumstances a writ in rem is served on the Admiralty G Registrar. (See The Eva, (1949) 84 LL.L.Rep.20). Judgments in rem are satisfied so far as possible out of that fund. If, after all H H claims have been met, there is further money remaining in Court, it will be paid to the shipowner.” I I J 134. The judgment of Reyes J (at para 92) aptly has cited the extract J from the speech of Lord Hobhouse in On Demand plc, op cit, also prayed K K in aid by Mr Haddon Cave, wherein his Lordship explained the soundly L practical effect of a sale of an arrested vessel pendente lite – “a mechanism L for allowing the parties’ rights as they existed immediately before the M M making of the order to be ascertained without in the meantime damaging N the value of whatever those rights were” – and I respectfully agree with the N observations of Reyes J (infra, at para 91) that it would be strange indeed if O O the right to mount an in rem claim were to be dependent upon the timing of P a judicial sale. P Q Q 135. Nor do I consider determinative Mr Sussex’s argument R focusing upon comparison of the position in a court-ordered sale with that R of a private sale, wherein he submitted that since in a private sale a S S potential claimant otherwise in possession of a statutory lien (in T contradistinction to a maritime lien, which ‘follows’ the vessel in any event) T loses the right to bring an in rem claim by reason of the change in U U V V 由此 A - 41 - A B beneficial ownership of the res, there is no good reason in principle why a B judicial sale should not be regarded as having the like effect. C C D 136. Initially plausible, this argument fails in my view because in D the instance of a private sale between owners and third party purchaser, E E upon payment the beneficial interest in and physical possession of the F F vessel immediately vests in the new owner with the seller divested of all interest therein, in contrast to the ‘judicial sale’ wherein the vessel G G notionally continues to exist in the form of the fund representing the sale H H proceeds standing in court, a fund in which owners possess a residual I interest in the (often unlikely) event of there being surplus monies after I satisfaction of all proven claims as have been brought in actions against the J J res. K K 137. Although canvassed by Mr Sussex purely as an argument of L L statutory construction of section 12B(4), I would also observe that I am far M from sure that this is a correct classification of the position, although if M properly a construction issue, I should be prepared to construe the word N N “ship” as “ship or the proceeds of sale thereof”. O O 138. It seems to me, however, that in cases of a sale pendente lite, P P wherein a fund in court has replaced the floating steel plate, the established Q juridical fiction (which has its origin in the inherent jurisdiction of the court Q to preserve the subject-matter of the action) continues to regard the fund R R representing the sale proceeds (less expenses) of “the ship”, and for my part S I see no necessary to become embroiled in nice arguments of statutory S interpretation to the effect that the term “that ship” may only connote the T T physical entity. U U V V 由此 A - 42 - A B 139. Were the situation to be otherwise, and were the validity of in B rem claims to be dependent upon the timing of the sale of the vessel or C C vessels, this would be a recipe for patent unfairness, and I see no reason D why potential valid claimants should thus be made to miss the boat, so to D speak, a result which in my view would conform neither with the intention E E of the legislature nor with established and hitherto unquestioned admiralty F F practice. G G 140. In my judgment, therefore, Waung J was right to reject this H H submission, which must have been anathema to a judge steeped in I Admiralty law and practice. Perhaps the learned judge was a little harsh in I his observation that this was a point which never should have been taken; J J in light of the fact that Mr Sussex has informed this court that he had been K aware of and had been waiting to take this point for fully thirty years, more K appropriate, perhaps, would have been the conclusion that Mr Sussex’s L L patience in this regard has proved entirely justified. M M (iii) The ‘extraterritoriality’ point N N 141. This point was taken essentially as a ‘fall back’ position on the O O part both of Mr Wright and Mr Haddon Cave. P P 142. As I understood it, the argument was thus: winding up orders Q Q do not have extraterritorial effect, and properly understood the power of the R foreign court seized of the winding up process to impose the ‘statutory R trust’ on assets of the entity the subject of such winding up necessarily is S S limited to its own territorial jurisdiction, with the result that the vessels T anchored in the Hong Kong harbour were not susceptible to claim by the T Singapore liquidators of Powick. U U V V 由此 A - 43 - A B 143. At the outset it should be borne in mind that this is not an Irish B Shipping case [Irish Shipping Ltd [1985] HKLR 423] in that the appellants C C did not commence parallel insolvency proceedings in Hong Kong – to the D contrary, the ships in question appear to have continued to trade after D 14 May 2003, the date of the formal commencement of the liquidation in E E Singapore. F F 144. Accordingly, it was submitted, the doctrine of comity does not G G require creditors in foreign insolvency proceedings to be preferred to local H H creditors, and, as Waung J held below, as a matter of policy there was very I good reason why Hong Kong maritime creditors should not be deprived of I their remedies in rem at the behest of a foreign liquidator. J J K 145. Were the position to be otherwise, submitted Mr Haddon Cave, K this would “fundamentally undermine” the efficacy of the right of arrest of L L sea-going ships, an ancient and well-established right in maritime law, M whilst Mr Wright observed that what was being attempted in the present M case was “unprecedented”: he argued that the liquidator of Powick was N N attempting now to take advantage of the successful execution by those who O had arrested the vessels and to “take the fruits” of such execution many O months later, and that the judge below was entirely correct to hold that P P there was no good reason for thus seeking to deprive the rights of Hong Q Kong maritime creditors; moreover, he said, in effect (and most unjustly) Q should any funds remain in court after claimants asserting in rem rights had R R been paid, the plaintiffs would be obliged to prove in the Singapore S liquidation in the same manner as other unsecured creditors who possessed S no rights in rem. T T U U V V 由此 A - 44 - A B 146. In response, Mr Sussex made light of the point, observing that B the “complete answer” thereto was to be found in the speech of Millett LJ C C (as he then was) in Mitchell and another v. Carter and another, Re D Buckingham International plc [1997] 1 BCLC 673, wherein the D fundamental question in dispute was whether under English law the E E company’s judgment creditors or its liquidators were entitled to debts F F sought to be attached in the United States by garnishment proceedings, notwithstanding the existence of an English winding up order. G G H H 147. Re Buckingham International was not a case involving I maritime jurisdiction, although it did involve conflict between the rights of I judgment creditors when set against the rights of liquidators wherein J J commencement of the liquidation in question had occurred after the K relevant judgments. K L L 148. What had happened in that case was that writs of garnishment M in respect of sums owed to Buckingham by seven of the company’s US M subsidiaries had been issued in Florida at the behest of judgment creditors N N of the company, Buckingham, and were applied to be stayed by liquidators O of that company appointed before the garnishment process in Florida could O be completed, the liquidators obtaining a temporary restraining order in the P P United States preventing the judgment creditors from commencing or Q continuing any proceedings against Buckingham in the United States. Q R R 149. Accordingly, the judgment creditors/applicants applied in the S company’s English winding up for an order that in the event of a winding S up the rights conferred on the liquidator by section 183(1) of the Insolvency T T Act 1986 in respect of the writs of garnishment obtained in Florida be set U U V V 由此 A - 45 - A B aside in favour of the applicants pursuant to section 183(2)(c), and a B declaration that the applicants be at liberty to retain the benefit of those C C writs of garnishment notwithstanding the winding up order. D D 150. The matter arose for decision in the form of a preliminary issue E E as to whether the court had the jurisdiction to determine the application F F under section 183(2)(c). At first instance Blackburne J held that the court had no such jurisdiction to make the order the applicants sought, holding G G that section 183 did not extend to attachments in foreign jurisdictions, and H H further that it was not appropriate for the applicants to seek to establish in I England, by declaration or otherwise, the propriety of that which they were I seeking by due process to achieve in the foreign jurisdiction. J J K 151. An appeal against this decision as to jurisdiction was allowed, K the Court of Appeal holding that whilst it was accepted that the court had L L no jurisdiction under section 183 of the Insolvency Act to make the order M sought as that section had no extraterritorial effect, nevertheless the court M did have jurisdiction to decide the question of priorities in an English N N liquidation, and thus whether the judgment creditors/appellants could retain O the fruits of the garnishment proceedings, if awarded to them, and to act by O way of declaration, was a matter of English law. The court had jurisdiction P P over liquidators, and had the power to act by declaration or injunction to Q restrain any act which would not be lawful, and thus if the court decided Q that the respondent liquidators were not entitled to any sum awarded by the R R United States court, the court could prevent the liquidators from pursuing S their proposed proceedings under section 304 of the US Bankruptcy Code S and seeking to recover that sum. T T U U V V 由此 A - 46 - A B 152. It was against this background that Millett LJ stated (op cit., at B 686-687), in the particular passage upon which Mr Sussex relies: C C “The making of a winding-up order divests the company of the D beneficial ownership of its assets which cease to be applicable for D its own benefit. They become instead subject to a statutory scheme for distribution among the creditors and members of the E company. The responsibility for collecting the assets and E implementing the statutory scheme is vested in the liquidator F subject to the ultimate control of the court. The creditors do not F themselves acquire a beneficial interest in any of the assets, but only the right to have them administered in accordance with the G statutory scheme. These principles were established in Ayerst G (Inspector of Taxes) v C & K (Construction) Ltd [1976] AC 167. They apply to all the assets of the company, both in England and H H abroad, for the making of a winding-up order is regarded as having worldwide effect. (Emphasis added) I I J 153. It was this latter sentence upon which Mr Sussex specifically J relied in response to the so-called ‘extraterritoriality’ point as taken against K K him. However, Millett LJ continued thus: L “The powers of the court are, of course, more limited. But it has L power to take whatever steps are open to it within the territorial limits of its own jurisdiction to enable the liquidator (one of its M M own officers) to get in and realize for the benefit of the creditors all the assets of the company which are the subject of the N statutory scheme, wherever in the world they may be. Where the N assets are overseas and are subject to an uncompleted process of execution, they are nevertheless subject to the statutory scheme. O Once the execution is complete, however, and the assets have O been successfully seized by the execution creditor, then they P cease to be subject to the statutory scheme and the liquidator’s P ability to collect them for the benefit of the creditors is defeated. This is because section 183 of the Insolvency Act applies only to Q execution proceedings in England and because the liquidator and Q the other creditors have no beneficial interest in the assets which could sustain a restitutionary claim. R R Accordingly, a creditor who successfully completes a foreign S execution is able to gain priority over the unsecured creditors. To S prevent this, the English court has jurisdiction to restrain creditors from bringing or continuing the foreign execution process…But T although the English court has jurisdiction to grant what amounts T to an anti-suit injunction in order to restrain execution U U V V 由此 A - 47 - A B proceedings in a foreign court which would restrain the liquidator B from getting in the assets, it has often been said that it is a jurisdiction to be exercised with caution. C C The position today is that stated by Hoffmann J in Barclays Bank D plc v Homan [1993] BCLC 680. There must be a good reason D why the decision to stop foreign proceedings must be made here rather than there. The normal assumption is that the foreign E judge is the person best qualified to decide if the proceedings in E his court should be allowed to continue. Comity demands a policy of non-intervention…” F F G 154. It is proper to record that this ‘extraterritoriality point’ was but G lightly argued: I apprehend that both Mr Wright and Mr Haddon Cave H H considered that they had bigger fish to fry. It is also fair to say that, I I although specifically raised, in light of the decision of this court upon the J two primary points it is strictly not necessary for this court to decide this J particular issue. In the circumstances, however, I consider it to be an K K argument worthy of comment. L L 155. In my view this is not an issue of ‘extraterritoriality’ properly M M so-called, nor, on the facts, is this truly a matter of ‘recognition’ of the N Singaporean winding up proceedings; there seems no question but that N these proceedings are ‘recognised’ in Hong Kong, but that said, this does O O not take the analysis very far. P P 156. It seems to me that Mr Sussex is correct in his contention that Q Q it is not open to the plaintiffs merely to assert that, since the vessels in R question were/are in Hong Kong, they are thus outwith the reach of the R Singaporean provisional liquidator, and that prima facie they are not S S susceptible or potentially subject to purported collection by the liquidator T of the worldwide assets of Powick. Accordingly, if and in so far as this is T U U V V 由此 A - 48 - A B the way this argument is framed by the plaintiffs, I am unable to agree with B it. C C D 157. The better argument, in my view, is that absent ancillary D winding up proceedings in Hong Kong, the mere fact of a liquidation of E E Powick in Singapore in itself does not impact upon the legitimate exercise F F of in rem jurisdiction by Hong Kong creditors of Powick. G G 158. This, it seems to me, is the very short point. In this context, H H I leave open the interesting additional question as to whether, on the I present facts, wherein the vessels have been arrested and sold pendent lite, I it may properly be said that by virtue of such arrest and sale such J J constitutes a “successful seizure” by the execution creditor amounting to a K “completed process of execution” so as to remove these vessels from the K potential reach of the Singaporean provisional liquidator in any event. L L M 159. An incidental point, as taken by Mr Wright in the course of M this aspect of the argument – although more appropriate perhaps in the N N context of the primary ‘liquidation point’ – was that there is a patent O inconsistency in the fact that this an application to set aside the in rem writs O was brought in the name of Powick. P P Q 160. Mr Wright submits that Powick has acknowledged service and Q has been defending these in rem actions on the basis that it is the party R R entitled to recover the proceeds of sale of the vessels, and that Powick’s S application to set aside the writs – which is the application the subject of S the judgment in the court below and of this appeal – properly could be T T brought in Powick’s name only if Powick had retained the beneficial rights U U V V 由此 A - 49 - A B to the vessels (or their sale proceeds) after payment of creditors entitled to B assert rights in rem; thus, said Mr Wright, thus gave the further lie to the C C jurisdictional argument mounted on behalf of the liquidators in terms of the D alleged lack of coincidence between in personal liability and beneficial D ownership. I agree. E E F F 161. It follows that, in so far as the so-called ‘extraterritoriality point’ is ‘live’ in this appeal, I would hold in favour of the plaintiffs, albeit G G upon a basis somewhat different from the way in which I understood the H H argument was framed. I I Conclusion J J 162. It also follows from the foregoing that for my part I too would K K dismiss this appeal, with costs to the respondents to be taxed if not agreed. L L Hon Ma CJHC : M M N 163. For the reasons contained in the judgment of Reyes J, I would N dismiss the appeals. I wish, however, to highlight a number of matters in O O relation to what Reyes J has called the Liquidation Point. P P 164. The ability to proceed against a ship (involving therefore in Q Q rem proceedings) is perhaps the single most distinctive feature of the R Admiralty jurisdiction in Hong Kong as well as in many other countries. R Section 12B of the High Court Ordinance, Cap.4 deals precisely with this S S aspect. Within that section is the provision with which these appeals are T concerned, namely, section 12B(4), which provides for a statutory right in T U U V V 由此 A - 50 - A B rem in relation to various categories of maritime claims (as set out in B sections 12A(2)(e) to (q) of the Ordinance). C C D 165. The objective of an action in rem is an obvious one but bears D repetition : it provides security for maritime claims that may be made, E E whether these involve maritime liens (in the true sense) or merely maritime F F claims for which statute has provided rights in rem. G G 166. The right to proceed against a ship (thereby obtaining security H H for a claim) under section 12B(4) is, however for the purposes of the I present appeals, conditional upon two matters : that the person who would I be liable on the claim in an action in personam was, when the cause of J J action arose, the owner or charterer of, or in possession or in control of, the K relevant ship and secondly, that when the action is brought the person who K would be liable in personam is either the beneficial owner of the relevant L L ship (or a sister ship) as respects all the shares in it or the charterer of it M under a charter by demise. Powick was undoubtedly the person who would M be liable in a claim in personam. But was Powick the person who was at N N the time the actions were brought in the present case the beneficial owner O of the relevant ships that were arrested? This was the focus of the O arguments on the Liquidation Point. P P Q 167. The concept of beneficial ownership in section 12B(4) has Q been acknowledged in numerous cases to refer to the legal or equitable R R ownership of a ship. The analysis of Robert Goff J in “I Congreso del S Partido” [1978] 1 QB 500 has been accepted in numerous jurisdictions, S including Hong Kong. There is little doubt in principle that this analysis T T must be correct and I would reject the submissions advanced by U U V V 由此 A - 51 - A B Mr Charles Sussex SC (for the Defendants) that the concept of beneficial B ownership meant only the enjoyment of rights associated with ownership of C C a ship including the right to dispose of and to enjoy the proceeds of sale if D the ship were to be sold : - D E (1) It is first important to bear firmly in mind that when construing E statutory provisions, a court must look at the statutory F F language, the statutory history, the statutory purpose and G meanings given to the term in cases from equivalent G jurisdictions : - see Commissioner of Taxation of the H H Commonwealth of Australia v Linter Textiles Australia Ltd (In I Liquidation) [2005] 220 CLR 592 at paragraph 223 per Kirby J. I J (2) The statutory language of section 12B(4) refers to the J beneficial ownership of a ship “as respects all the shares in it”. K K The quoted words are inapt merely to describe the enjoyment L of the ship but are singularly appropriate in context to refer to L legal or equitable ownership. The existence of these words M M was regarded as significant by Robert Goff J in Congreso : - at N 539D-E. N (3) As to statutory history and purpose, as stated earlier, the O O purpose of the right to proceed in rem is to enable a maritime P P claimant to obtain security against the person who would be liable in an action in personam. That security takes the form Q Q of a ship that is owned by such person. Ownership in this R R context must therefore mean the title to the ship in question, S whether this be legal or, where the circumstances dictate (for S example, a trust), equitable. It makes little sense in the context T T of a maritime claim and in rem proceedings if beneficial U U V V 由此 A - 52 - A B ownership meant something along the lines that the B Defendants have submitted. C C (4) The meaning that has been given to the term beneficial D D ownership in the context with which we are concerned is that E as analyzed in the Congreso. This, as has already been stated, E is the accepted view in nearly all, if not all, maritime F F jurisdictions. G G 168. The debate both in the court below and on appeal over the H H cases of Linter and Ayerst (Inspector of taxes) v C & K (Construction) Ltd I [1976] AC 167 has to be seen in the context of the particular statutes I considered in them (revenue legislation). The construction of J J section 12B(4) must be seen using the principles I have referred to earlier. K K 169. I make one final observation. In the winding-up of a company, L L while the enjoyment of its assets no longer vests in the shareholders of the M company and instead the assets become subject to the statutory scheme M regarding liquidation, those assets are still owned by the company if it has N N the title to them. Indeed, it is precisely because a company has title to O O assets that those assets become subject to the statutory liquidation scheme. A liquidator, when dealing with such assets, does so in the name of the P P company (unless somehow assets have been vested in the liquidator’s own Q Q name, for example, section 198 of the Ordinance, Cap.32). Just as in a winding-up, a company’s assets will be distributed for the benefit of R R creditors under the statutory scheme, so in an action in rem, the ship that is S S owned by the person who would be liable in an action in personam is liable T to be arrested to provide security. In both situations, the creditor T (or potential creditor) is looking to assets which truly belong to the U U V V 由此 A - 53 - A B company (in the case of a winding-up) or to the person who would be liable B in an action in personam (in admiralty proceedings where a maritime claim C C is made) to provide the necessary security or assets to satisfy their claim. D D 170. For the above reasons, it is ordered that the appeals be E E dismissed. There will also be an order nisi that the Defendants (Powick) F F pay the costs of the Plaintiffs in the appeals, such costs to be taxed if not agreed. G G H H I I J J K K (Geoffrey Ma) (William Stone) (A T Reyes) L Chief Judge, Judge of the Court of Judge of the Court of L High Court First Instance, High Court First Instance, High Court M M N N Mr Colin Wright, instructed by Messrs Johnson, Stokes & Master, for the O O Plaintiffs/Respondents in CACV 234, 235 & 236/2006 (ITS) P Mr Charles Haddon-Cave QC, instructed by Messrs Stephenson Harwood P & Lo, for the Plaintiffs/Respondents in CACV 237, 238, 239 & Q 240/2006 (Oetker) Q R Mr Charles Sussex SC & Ms Liza Jane Cruden, instructed by R Messrs Holman, Fenwick & Willan, for the Defendants/Appellants in all appeals S S T T U U V V