Lloyd's Maritime and Commercial Law Quarterly
EXPENSES IN CUSTODIA LEGIS, COURT COSTS AND ATTORNEY’S FEES
Professor William Tetley
Q.C., McGill University, Montreal.*
The present article defines and discusses “custodia legis” and its related ancillary right “court costs”. Together they rank first among maritime liens.
It is extremely important for all creditors of a ship or of bankrupt shipowner to know exactly which expenses, fees and costs will rank before all other claims. The article considers and compares the law of the United Kingdom, of the United States, of Canada and of France as well as the International Maritime Liens and Ship Mortgages Conventions of 1926 and 1967.
I. Introduction
Once a ship has been arrested, it must be determined whether the court costs of arrest and of sale may be recognized as a prior charge and whether expenses incurred during the period of “custody of the law” (custodia legis) will also be given priority status.
The civil law has no difficulty in recognizing costs of arrest and expenses in custodia legis because of the principle of “unjustified enrichment” found in every civil code1 either explicitly or implicitly. The 1926 Liens and Mortgages Convention at Art. 2(1) follows this tradition by giving a first right to expenses
“incurred in the common interest of the creditors in order to preserve the vessel or to procure its sale and the distribution of the proceeds of the sale”.
France, which adopted the 1926 Convention into its national law, emphasizes that this heading covers both court costs of arrest and of sale and expenses in custodia legis by quite logically dividing the Article into two at Art. 31(1) and Art. 31(2) of Law No. 67–5 of 3rd January 1967.
The 1967 Liens and Mortgages Convention at Art. 11(2) mentions only
* The author acknowledges the assistance of Brian McDonough, B.A., B.C.L., LL. B., and Allan Garber, B.A., M.A., in reading and correcting the text. The article will appear as a chapter of a book by Professor Tetley to be entitled Maritime Liens and Claims.
1 Article 1375 c.c. (France), Art. 1046 c.c. (Quebec). In Larsen v. New York Dock 166 F. 2d 687, 1948 A.M.C. 756, at p. 758 (2 Cir. 1948) the second Circuit awarded expenses in custodia legis noting that the Supreme Court decision 21 years earlier in The Poznan, infra, was based on the doctrine of unjust enrichment.
01