In Club Cruise Entertainment & Travelling Services Europe BV v Department For Transport – Lawtel 19.11.08 the Commercial Court decided preliminary issues in a claim by the Claimant shipowner that the Defendant government department had unlawfully detained its ship. The Claimant’s ship had been scheduled for three cruises. On the first two cruises there were outbreaks of a gastrointestinal virus. Over 100 people were affected on the second cruise, including crew members. Before the third cruise, a surveyor, acting on behalf of the Maritime and Coastguard Agency, part of the Defendant department, issued two notices prohibiting the ship from going to sea on the grounds that it was dangerously unsafe within ss 94 and 95 of the Merchant Shipping Act 1995. The surveyor stated that there was a high risk that there would be a further outbreak of the virus, which could affect the crew impairing their ability to respond to an emergency. The preliminary issues to be determined were (i) whether the detention was valid as the surveyor had not identified the Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997 reg. 28 as the source of the power to detain the ship; (ii) whether the facts relied upon by the surveyor were reasonable grounds for detaining the ship; (iii) if the detention was invalid, whether the detention constituted the tort of conversion on the ship; (iv) whether the court had the power to order statutory compensation under s.97 of the Act.
It was held that the words of reg. 28(1) were predicated upon a surveyor, at a minimum, having in his mind at the time he issued a detention notice for non-conformity the standards that the Regulations required. Since the surveyor appeared not to have had the Regulations in mind when issuing the notices, he could not have formed a reasonable view on whether the ship conformed with the relevant standards. The detention could not be justified retrospectively by reliance on a power under that regulation. However, it would be an impracticably technical approach to require a surveyor, who was not a lawyer, to identify in the detention notice the specific section of the Act under which the power was being exercised. In addition, the reference in the notice to the 1995 Act was sufficient to encompass not only powers granted by the Act but powers granted under regulations which were made pursuant to the Act, including the 1997 Regulations. Whether the notices were issued under the Regulations or the Act, any defect in them would not in itself invalidate the exercise of the power of detention. Parliament could not have intended that: it would have been a triumph of form over substance when the object of the power of detention was to ensure the safety of ships and those on board. Technical defects in a notice of detention would not invalidate the exercise of the power of detention if it was otherwise valid, as the aim of detention was to ensure the safety of the ship and those on board.
In considering detention under ss 94 and 95 of the Act, the word "dangerously" added an important qualification to "unsafe". The presence of a gastrointestinal virus on a ship was not enough to render a ship "dangerously unsafe" under the Merchant Shipping Act 1995 s.94.
For someone not in possession of the relevant goods to commit the tort of conversion, there had to be dealing with the goods that either denied absolutely the right of the true owner or asserted a right inconsistent with the true owner's right. The Claimant had remained in possession throughout, and the detention notices had neither denied the Claimant's right nor asserted any right inconsistent with it. Even if invalid, the intention of the notices had merely been to prevent the Claimant from using the ship in a particular way for a short time, not to assume ownership of the ship. That was not conversion.
Section 97 of the Act conferred a power on an arbitrator appointed under the Act to award statutory compensation. There was no basis for a construction of the statute, whether by implication or otherwise, which would confer that statutory power on the court instead.