LD Commodities Rice Merchandising LLC & Anor v Styliani Z, Owners/Charterers of the Vessel

An inadvertent use of the wrong Admiralty claim form may constitute an error of procedure under CPR 3.10, even where the error has substantial consequences for service and limitation. The court must further the overriding objective by considering all the circumstances, including the information given to the defendant, prejudice, culpability, delay, proportionality and whether refusal would confer a time-bar windfall.

The distinction between claims in rem and in personam remains important, but it does not itself exclude CPR 3.10 or CPR 17. A claim form may, in an exceptional case, be amended from in personam to in rem where that is just and proportionate. An earlier step will not ordinarily be treated as good service under CPR 6.15 where it expressly contemplated that service would occur later.

The claimants sought approximately US$1.3 million for wet damage to rice cargo loaded aboard the vessel Styliani Z. They intended to issue an Admiralty claim in rem but inadvertently used the in personam form, naming a corporate defendant. The form was sent to the defendants’ P&I Club, but was not served within the four-month period applicable to an in personam claim. It was later amended to an in rem claim and served within the twelve-month period applicable to such claims.

The Admiralty Registrar disallowed the amendment, set aside service and refused relief under CPR 3.10 and CPR 6.15. The central issues were whether the wrong form constituted an error of procedure, whether the claim form could be amended, and whether the earlier email amounted to good service.

1. CPR 3.10. The claim form issued was an in personam claim form because it used Form ADM1A and did not proclaim an action against the vessel. The solicitor nevertheless intended to issue an in rem claim and had used the wrong form inadvertently. That was an error of procedure within CPR 3.10. The expression should not be given an artificially restrictive meaning.
2. Discretion to remedy. The court adopted the principles derived from Hannigan v Hannigan and Thurrock Borough Council v Secretary of State for the Environment: the discretion must further the overriding objective; all circumstances must be considered; the defendant’s knowledge of the nature of the intended claim, prejudice, culpability, limitation consequences and proportionality are relevant. Culpability and the loss of a limitation defence do not automatically bar relief.
3. The difference between in rem and in personam proceedings is legally significant and relevant to the exercise of discretion, but neither CPR 61 nor PD 61 excludes CPR 3.10 or CPR 17. The defendants’ P&I Club knew the claim’s nature, had not acted to its detriment, and the limitation defence arose only from the solicitor’s inadvertence. Refusing relief would prevent a merits determination and confer an unexpected windfall. The error was therefore remedied under CPR 3.10, on terms that the claimants pay the application and reasonable opposition costs.
4. CPR 17. “Amendment” is not confined to correcting details and may alter the wording or add a new claim. Although it would be very rare to convert an in personam claim form into an in rem claim after the in personam service period expired, that amendment was allowed here because the underlying cause of action was unchanged and the overriding objective supported it.
5. CPR 6.15. The appeal was dismissed on alternative service. The email enclosing the claim form expressly contemplated that service would occur later and therefore was not an appropriate step to declare good service.

The appeal was allowed under CPR 3.10 and CPR 17, and dismissed under CPR 6.15.

High Court (Admiralty Division): Allowed the appeal from the Admiralty Registrar’s decision on CPR 3.10 and CPR 17, but dismissed the appeal on CPR 6.15. The procedural error was remedied subject to costs.