Admiralty Jurisdiction and Practice

Nigel Meeson and John A Kimbell

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6 Priorities

Introduction

6.1 Where the amount of claims exceeds the proceeds of sale, the court must determine the manner in which the proceeds should be distributed.1 It does this through the exercise of an equitable jurisdiction to rank claims according to an order of priority. However, before considering the manner in which the Admiralty Court exercises this jurisdiction, it is necessary to examine the position of three classes of creditors which effectively fall outside this scheme as the treatment of their claims may affect the amount to be distributed according to the order of priority. Those creditors are:

(i) a body with a statutory power of detention and sale,
(ii) a person with a common law possessory lien, and
(iii) a solicitor with a lien.

6.2 In summary, the right of the holder of a statutory power is superior to the right of the Admiralty Marshal, and thus the claim falls outside the order of priorities altogether.2 The right of the holder of a possessory lien, while inferior to the right of the Admiralty Marshal, will be acknowledged by the court so that he is not prejudiced by the arrest and dealing with the ship by the court. The lien of a solicitor effectively constitutes a charge which is recognised by the Admiralty Court in a similar way to any other charge on the property sold by the court.

Statutory power of detention and sale

Examples of statutory powers

6.3 Various statutes give power to public bodies to detain and sell vessels and cargoes. Probably the most important of these powers are the following3:

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Section 44 of the Harbours Docks and Piers Clauses Act 1847

6.4 This provides:

“If the Master of any Vessel in respect of which any Rate is payable to the Undertakers refuse or neglect to pay the same, or any Part thereof, the Collector of Rates may, with such Assistance as he may deem necessary, go on board of such Vessel and demand such Rates, and on Nonpayment thereof, or of any Part thereof, take, distrain, or arrest, of his own Authority, such Vessel, and the Tackle, Apparel, and Furniture belonging thereto, or any Part thereof, and detain the Matters so distrained or arrested until the Rates are paid; and in case any of the said Rates shall remain unpaid for the Space of Seven Days next after any Distress or Arrestment so made, the said Collector may cause the Matters so distrained or arrested to be appraised by Two or more sworn Appraisers, and afterwards cause the Matters distrained or arrested, or any Part thereof, to be sold, and with the Proceeds of such Sale may satisfy the Rates so unpaid, and the Expenses of taking, keeping, appraising, and selling the Matters so distrained or arrested, rendering the Overplus (if any) to the Master of such Vessel upon Demand.”

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