England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/07/2017

Mr. Justice Teare :

Introduction

1. This application for judicial review concerns a rare claim for salvage in respect of wreck (jetsam, flotsam, lagan and derelict).
2. The salvage claim concerns, in particular, 8 bronze cannon which are said to be worth between £96,000 and £1.2m. and are thought to be from an East India company vessel about 200 years old. The claim also concerns wreck from several other vessels, in particular, the Toward, the Latona and the Harlingen, said to be 96, 150 and 130 years old respectively. The recovered wreck from these vessels includes such items as tin ingots which are thought to be worth some £110,000 but also a mass of less valuable items (such as saucers, mugs, cups and chamber pots together with portholes and navigational lamps).
3. The salvor of such wreck is Mr. David Knight who has been diving on wrecks off the English coast for some 30 years. He has given evidence that it did not seem to him that there was any urgency in reporting recovered items to the Receiver of Wreck. That was unfortunate because section 236 of the MSA 1995 requires a person who finds or takes possession of wreck in United Kingdom waters (or finds or takes possession of wreck outside United Kingdom waters and brings it within those waters) to give notice to the Receiver that he has found or taken possession of it. He must then, as directed by the Receiver, hold it to the Receiver's order or deliver it to the Receiver. If a person fails to comply with his obligation under section 236 without reasonable excuse he is liable on summary conviction to a fine.
4. In April 2011 Mr. Knight gave notice of items which he had recovered between 2007 and March 2011; see the "droit" forms 35/11 – 48/11. Mr. Knight claimed salvage in respect of some of that wreck. The droit forms on which he purported to comply with section 236 stated that he wished "to claim salvage in respect of expenses incurred during the performance of these services" but in some cases he said he did not wish to claim salvage and in one case neither box was ticked.
5. In 2013 Mr. Knight was prosecuted for offences contrary to section 236 (and section 237 which requires cargo or other articles to be delivered to the Receiver) in respect of wreck taken from the Harlingen, three German submarines and the East India company vessel. It was alleged that the items in question had been taken into his possession in 2001, 2006 and 2007 but that he failed to give notice thereof to the Receiver without reasonable excuse.
6. In May 2014, on the second day of his trial, Mr. Knight pleaded guilty to certain of those offences and asked for 8 other offences to be taken into consideration. The District Judge described the scale of Mr. Knight's operation as "industrial" and said that his dive logs revealed "considerable skill and planning". He had also deployed "valuable and substantial lifting equipment". The District Judge fined Mr. Knight and his co-defendant, Mr. Huzzey, £7000 and £6500 respectively and ordered each to pay £25,000 in costs together with the victim surcharge of £120. Section 236 provides that on conviction a person shall forfeit any claim to salvage. There is no such provision in section 237. It is to be noted that the offence concerning the cannon from the East India company vessel to which he pleaded guilty was an offence contrary to section 237, not section 236.
7. On 21 November 2014 Mr. Knight and the Receiver met at the Dover Coastguard station. He suggested that he might be entitled to a salvage reward with regard in particular to the cannon and ingots. The Receiver replied that no salvage award would be paid and Mr. Knight said that he would consider his legal options.
8. On 4 December 2015 Mr. Knight emailed the Receiver stating that he would like to resolve the outstanding claims. On 21 December 2015 the Receiver said she would send a formal response shortly. On 26 February 2016 Mr. Knight sent a chasing email. On 29 February 2016 the Receiver said that her position had not changed. By letter dated 3 May 2016 Mr. Knight accepted that he was not entitled to a salvage reward in respect of the items included in the section 236 offences to which he had pleaded guilty. But he maintained his claim to salvage in respect of all other items and in particular the 8 bronze cannon and 56 ingots. He stated that he did not understand the legal basis for the Receiver's position.

The claim for judicial review

9. By letter dated 8 June 2016 the Receiver replied to the letter dated 3 May 2016 and referred to a subsequent letter regarding a proposed claim for Judicial Review. She referred to Article 18 of the 1989 Salvage Convention and said that in cases of salvor misconduct a salvor will be deprived of the whole or part of any payment due. She said that since "all of the items listed in your email formed part of the prosecution against you, it would be wholly inappropriate for any salvage award to be paid and would be contrary to public policy." She said that following the conclusion of the prosecution and sentencing in July 2014 the MCA (the Maritime and Coastguard Agency in which is to be found the Receiver of Wreck) considered the matter to be closed.
10. By letter dated 26 July 2016 Mr. Knight pointed out that it was only in respect of section 236 offences that the Act provided for the forfeiture of salvage claims. No such provision was made in respect of s.237 offences. Apart from the forfeiture provision in s.236 the only other basis for refusing a salvage reward was article 18 of the Convention which required fraud or other dishonest conduct during the salvage operations. There had been no such conduct and as a result the Receiver's conduct was unlawful. Further, the Receiver had failed to adopt a fair procedure. Mr. Knight had never been given an opportunity to respond to the suggestion that he had been guilty of fraud or other dishonest conduct. Finally, it was said that the Receiver, in saying that it was contrary to public policy to make a salvage reward in respect of items which formed part of the prosecution, was following a formulated but unpublished policy which was contrary not only to the Salvage Convention but also to Article 1 of the First Protocol of the European Convention on Human Rights.
11. By letter dated 12 August 2016 the Government Legal Department responded on behalf of the Secretary of State for Transport. It was noted that a salvage claim was sought in respect of the cannon and ingots which were the subject of a conviction under s. 237, not s.236. In response to the claim for salvage it was denied that the fraud or other dishonest conduct referred to in Article 18 had to be in the salvage operations. It was said that the Receiver had power to determine that there had been fraud or other dishonesty and that Mr. Knight had clearly acted in bad faith. Finally, it was said that Mr. Knight was out of time to bring Judicial Review proceedings. Such proceedings must be brought within 3 months after the grounds to make the claim first arose. The Receiver had communicated her decision in December 2014 and in February 2016. This last point has not been pursued.
12. Mr. Knight issued his claim for Judicial Review on 2 September 2016. In that claim he sought the quashing of the decision not to make a salvage reward, a declaration that he was entitled to salvage and an order that "damages" be assessed by the Admiralty Court. A detailed statement of facts and grounds accompanied the claim form. In a statement dated 30 August 2016 he denied that he had been guilty of any fraud or dishonesty.
13. The Secretary of State provided summary grounds of defence on 27 September 2016.
14. Permission to claim judicial review was granted by the court on 31 October 2016.
15. On 8 December 2016 the Secretary of State submitted detailed grounds of defence which, for the first time, alleged that Mr. Knight's claim for salvage was time-barred by reason of article 23(1) of the Salvage Convention which states that any action shall be time-barred "if judicial or arbitral proceedings have not been instituted within a period of two years. The limitation period commences on the day on which the salvage operations are terminated."
16. In response to this new defence Mr. Knight submitted a further statement dated 23 December 2016. He said that salvage operations on an old shipwreck on the sea-bed may take decades to complete. He provided information as to his salvage operations.

i) With regard to the cannon from the East India Company vessel the cannon were recovered and taken ashore in 2008. He said there are limited opportunities to dive on the wreck because it lies in deep water. He said that the salvage operations are still ongoing, that he has been endeavouring to find a bell and that in 2013 began a fully detailed survey of the site. Since 2010 he has required a licence to use an air-lift. He expects to be in a position to apply for a licence in late 2017. In September 2016 he recovered a brass barrel hoop. He submitted that the time limit in Article 23 has not yet started, let alone expired.

ii) With regard to the Toward he said that his operations will "continue indefinitely until I either sell that shipwreck or die".

iii) With regard to the Latona his salvage operations began in 2000 and continue; items were recovered in 2009 or 2010 and in 2015. "I expect to revisit in 2017 to see if more items are uncovered."

iv) With regard to the Harlingen he said that he recovered tin ingots between 2008 and 2011. The site is dark and opportunities to search are limited. He has continued to dive every season since 2011 and in 2014 located a further quantity of tin. He has not recovered it "due to the uncertainty of how my recoveries are to be treated". He intends to do so "when the situation is clarified." The operations continue.

17. Mr. Knight summarised his position by saying that salvage operations of a wreck on the sea-bed cannot be considered to be finished or complete until everything is raised from the sea-bed or the salvor abandons his operations.
18. The Receiver made a statement dated 31 March 2017 which explained her understanding of the rationale underlying the provisions of the MSA 1995 with which this court is concerned. She said, in particular, that the reporting process required by section 236 enables "salvage to be distinguished from looting". With regard to the limitation period she did not accept Mr. Knight's contention that salvage operations are never terminated until all possible salvage operations in respect of a wreck have been concluded. She commented upon his evidence with regard to his salvage operations. Mr. Knight in turn commented upon that statement in his statement dated 17 May 2017. Finally the Receiver commented upon that statement in her statement dated 9 June 2017.
19. There was a lack of clarity in the evidence as to the items of wreck in respect of which Mr. Knight claimed salvage and which were the subject of the judicial review challenge. However, counsel for the Secretary of State submitted, in reliance upon the correspondence exchanged between the parties, that Mr. Knight's challenge to the decision denying salvage related only to the wreck reported in April 2011 by means of droit forms nos.35/11 - 48/11. This appeared to be correct, although salvage was not claimed in respect of all the wreck reported in April 2011.

Unclaimed wreck

20. The statutory scheme dealing with wreck which is reported to the Receiver but which is unclaimed is to be found in section 243 of the Merchant Shipping Act 1995. Before that it was in section 525 of the Merchant Shipping Act 1984 and before that it was in section 471 of the Merchant Shipping Act 1854; see the survey of the legislative history by Sheen J. in Pierce v Bemis, The Lusitania [1986] 1 QB 384 at pp.391 and 398. The statutory scheme is therefore of some age.
21. Section 243 of the Merchant Shipping Act 1995 provides as follows:

"(1) Where, as respects any wreck found in the United Kingdom or in United Kingdom waters and in the possession of the receiver, no owner establishes a claim to it within one year after it came into the receiver's possession, the wreck shall be dealt with as follows.

(2) If the wreck is claimed by any person who has delivered the statement required by section 242 and has proved to the satisfaction of the receiver his entitlement to receive unclaimed wreck found at the place where the wreck was found, the wreck shall, on payment of all expenses, costs, fees and salvage due in respect of it, be delivered to that person.

(3) If the wreck is not claimed by any person in accordance with section 242, the receiver shall sell the wreck and pay the proceeds as directed by subsection (6) below, after making the deductions required by subsection (4) below and paying to the salvors the amount of salvage determined under subsection (5) below.

(4) The amounts to be deducted by the receiver are—

(a) the expenses of the sale;

(b) any other expenses incurred by him; and

(c) his fees.

(5) The amount of salvage to be paid by the receiver to the salvors shall be such amount as the Secretary of State directs generally or in the particular case.

(6) The proceeds of sale (after making those deductions and salvage payments) shall be paid by the receiver for the benefit of Her Majesty—

(a) if the wreck is claimed in right of the Duchy of Lancaster, to the receiver-general of the duchy or his deputies as part of its revenues;

(b) if the wreck is claimed in right of the Duchy of Cornwall, to the receiver-general of the duchy or his deputies as part of its revenues; and

(c) in any other case, into the Consolidated Fund."

22. It is to be noted that if wreck is not claimed within one year the Receiver shall sell such wreck and pay the proceeds to Her Majesty, the Duchy of Lancaster or the Duchy of Cornwall as appropriate after "paying to the salvors the amount of salvage determined under subsection (5) below". That subsection provides that the amount of salvage "shall be such amount as the Secretary of State directs generally or in the particular case." I asked whether there were general directions on this matter and was told by counsel for the Receiver that there were not. Thus in any case where salvage is claimed in respect of unclaimed wreck the Secretary of State must determine the amount of salvage. The Secretary of State would, I assume, assess the amount of salvage by having regard to the factors listed in Article 13 of the Salvage Convention. (By contrast counsel for the Secretary of State informed the court in Pierce v Bemis, The Lusitania [1986] QB 384 at p.393F that salvors of wreck usually received about 50% of the value of the wreck, more if there were very heavy expenses and the whole proceeds if the expenses exceeded the value.)

The limitation period

23. This argument, which only came to light in December 2016, is now the principal reason relied upon by the Secretary of State and the Receiver to justify the denial of salvage to Mr. Knight. If the Receiver's contention is correct the judicial review challenge must fail. If it is not correct then Mr. Knight's challenge to her decision denying salvage must be considered.
24. Article 23 of the Salvage Convention provides as follows:

"1. Any action relating to payment under this Convention shall be time-barred if judicial or arbitral proceedings have not been instituted within a period of two years. The limitation period commences on the day on which the salvage operations are terminated.

2. The person against whom a claim is made may at any time during the running of the limitation period extend that period by a declaration to the claimant. This period may in like manner be further extended."

25. The Salvage Convention is given the force of law in the United Kingdom by section 224 of the Merchant Shipping Act 1995. There is nothing in the Salvage Convention which specifically deals with the salvage of ancient wrecks but it was common ground that the Salvage Convention applied to such operations. There was controversy during the negotiations leading to the Convention as to whether wreck should be covered by it. Article 30(1)(d) of the Convention provided that signatories could disapply the Convention to maritime property of historic interest but the UK has not availed itself of this power; see Kennedy and Rose on the Law of Salvage 7^th.ed paragraph 4.064-4.066. There have been proposals in the international arena that activity relating to underwater cultural heritage should not be subject to the law of salvage; see Bryce on Maritime Law of Salvage 5th.ed. paragraphs 4-07-4.14.
26. The two year limitation period imposed by article 23 commences on the day on which "the salvage operations" are terminated. There was debate before me as to the meaning of the phrase "the salvage operations". The article is concerned with a time-bar in relation to "an action relating to payment under this Convention". The obvious such action is an action seeking payment of salvage but another example is a claim for special compensation pursuant to article 14. In either case the claim arises out of salvage operations. Thus article 12 provides that "salvage operations" which have a useful result give right to a reward and special compensation may be claimed under article 14 where "salvage operations" have been carried out in respect of a vessel which threatened damage to the environment. Article 1 defines "salvage operation" as any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever. I therefore consider that the day on which salvage operations are terminated is the day on which the activities to assist a vessel or any other property in danger and which have given rise to a claim under the Convention have been terminated.
27. However, it was submitted by counsel on behalf of Mr. Knight that the phrase "the day on which salvage operations are terminated" refers to termination of the final salvage operation in respect of the wreck of a vessel. This was particularly important in the case of salvage of historic wreck because, said Mr. Knight, such salvage operations may go on for years whereas commercial salvage operations (for instance, a towage to a safe port) may last only days or weeks. Counsel's submission reflected Mr. Knight's evidence that "salvage operations of a wreck on the sea-bed cannot be considered to be finished or complete until everything is raised from the sea-bed or the salvor abandons his operations."
28. The Salvage Convention does not define the event by which salvage operations are terminated. By contrast salvage under Lloyd's Form of Salvage Agreement ("LOF") identifies the salvor's obligation as being one to take the vessel and cargo to a named place, a deemed place of safety, or, if no such place has been agreed, to a place of safety. The service terminates when such place has been reached. LOF also provides the owners and contractor with a right to terminate the services when there is no longer any reasonable prospect of a useful result leading to a salvage reward. In the absence of any such agreement salvage operations may terminate when a useful result has been achieved. But equally, depending on the circumstances, the salvage operations may continue notwithstanding that a useful result has been achieved. For example, cargo may be recovered from one hold of a vessel in danger (a useful result) but the services may continue until cargo from all the holds has been recovered. Similar comments have been made in Bryce at paragraph 2.98 and in Fogarty on the Merchant Shipping Act 1995 at paragraph 8.66 (but contrast the discussion in Kennedy and Rose at paragraph 13.071). When salvage operations have been terminated is, it seems to me, a question of fact to be determined having regard to all the circumstances of the particular case.
29. Salvage operations are vulnerable to delay caused by tides, bad weather and unexpected incidents. Salvage operations are not terminated when work stops on account of such matters. The termination of the salvage operations is delayed until work can resume and be completed. In the case of commercial salvage operations the salvors will typically remain on site during the delay in order to protect the property being salved. For example one or more tugs may remain on site. Diving operations on historic wrecks are also subject to such delays. But in addition they are typically carried out during a short diving season in the summer months. Thus in the present case Mr. Knight refers to the diving "season". Typically, diving ceases, not just for short periods awaiting an appropriate tide or good weather, but for several months. If artefacts are recovered from a wreck in one diving season the impartial observer might well conclude that the salvage operations which gave rise to such recoveries terminated at the end of the diving season, notwithstanding that he knew that the diver intended to return in the future. Of course, if the operations are more complex and require parts of the wreck to be protected or secured over the closed season in order to facilitate future recoveries the impartial observer may conclude that the savage operations are continuing during the closed season. Salvage from historic wrecks may go on for some time. The salvage operations on Mary Rose, Henry VIII's warship, are probably an example. The salvage operations on the wrecks of vessels from Admiral Sir Clowdisley Shovell's fleet which sank in 1707 off the Scilly Isles (with the loss of 800 officers and ratings including the Admiral) may have been another example of such extended salvage operations; see The Association and The Romney [1970] 2 Lloyd's Reports 59 at p.62.
30. I am unable to accept the submission that salvage operations of a wreck on the sea-bed cannot, as a matter of law, be considered to be finished or complete until everything is raised from the sea-bed or the salvor abandons his operations. Take a case where in year 1 salvage operations by diving are conducted successfully with, for example, gold coin being recovered. The salvor knows that there are several cannon to be recovered which he intends to recover in the future but he is unable to raise the finance to hire the necessary lifting equipment. So there are no operations in years 2 and 3. But in year 4 he is able to hire the equipment and successfully raises the cannon. In my judgment the realistic conclusion to draw in such a case would be that there had been two salvage operations; one in year 1 involving diving only and the other, a more substantial and expensive operation, in year 4. It would be unrealistic to say that the salvage operations which had commenced in year 1 had continued in years 2 and 3 and were only terminated in year 4 when the cannon was recovered. Rather, it would be realistic to say that the salvage operations in year 1 ended in that year. The mere fact that cannon remained to be recovered and that the salvor intended at some point in the future to resume his salvage operations to recover the cannon is not by itself sufficient to show that the salvage operations are continuing when in fact nothing took place in years 2 and 3.
31. In my judgment the day on which salvage operations terminate is a question of fact to be determined in every case. It is therefore necessary to consider the facts of the present case as indicated by the evidence before the court. There was no application either to call Mr. Knight to give evidence or to cross-examine him. As a matter of practice it is only in very exceptional cases that oral evidence is permitted; see The Administrative Court Judicial Review Guide paragraph 10.2 and Judicial Review by Supperstone, Goudie and Walker 5^th.ed. paragraphs 19.30.4 – 19.30.6. The court must therefore determine the matter on the basis of the written evidence before it.
32. I shall consider first, the claim in relation to the cannon, second, the claim in respect of the ingots and, third, the claim in respect of other items.

Cannon

33. The cannon were recovered from the wreck of a vessel thought to be an East India company vessel in 2008. It appears that Mr. Knight hired the vessel SEA LIFT 3 to recover the cannon. They were taken ashore and placed in Mr. Knight's lorry in Dover Harbour and two were transferred into a trailer. They were placed in waterproof boxes so that the cannon could soak in fresh water. They were then taken to "somewhere near Ipswich" where they were cleaned using a special high pressure water jet. It appears that they remained there until delivered to the Receiver. Mr. Knight has said that the work of soaking the cannon was part of the salvage operations.
34. The Receiver requested delivery in September 2012. Mr. Knight delivered two in December 2012 but did not deliver the other six until June 2014. (That appears to be reason for his conviction of an offence contrary to section 237 of the MSA 1995 in respect of six cannon.)
35. Mr. Knight has stated that the salvage operations are still ongoing and that he has continued to work on the site. However, he has given no details of any work done on the site between 2009 and 2013 beyond saying that his "diving has been regular when conditions allow" and that his primary activity was searching for a bell. In 2013 he began a "fully detailed survey of the site" which work has "continued since then every season". He intends to excavate using an air-lift but since 2010 requires a licence. To obtain such a licence it is necessary to produce detailed survey reports. He expects to apply for the licence in 2017. In 2016 he found a brass barrel hoop which he reported to the Receiver.
36. On the basis of this evidence it is submitted on behalf of Mr. Knight that the salvage operations which have given rise to the claim for salvage in respect of the cannon have not yet been terminated. On behalf of the Receiver it is submitted that the evidence does not even begin to suggest that salvage operations to recover the cannon in 2008 have not been terminated.
37. The salvage operations in 2008 involved the use of a vessel SEA LIFT 3. There is no evidence that SEA LIFT 3 was hired for anything other than the recovery of the cannon in 2008. I infer that it left the site in 2008. There is no evidence that in subsequent years the wreck was marked by a buoy to indicate that Mr. Knight retained possession of it. Indeed, it would appear from Mr. Knight's evidence that he was keen to keep the location of the wreck secret. There is no evidence that the wreck was in any way secured or protected to facilitate future recoveries. Thus nothing happened on the site during the closed season and there was nothing to denote that a salvor was in possession of, or was conducting salvage operations, on the wreck. Mr. Knight said that he dived on the site in subsequent seasons when looking for a bell and that in 2013 he began surveying the site in preparation for applying for a licence to use an air-lift for the purposes of excavation.
38. The salvage operations conducted to recover the cannon in 2008 were substantial operations involving the hire of a specialist vessel. The operations to recover the cannon ceased in 2008. By comparison with such operations the diving operations which are said to have taken place in subsequent seasons in an endeavour to find a bell were of a much lesser order of magnitude. With the departure of SEA LIFT 3, the cessation of operations for several months and the absence of any indication on the site that operations were continuing the salvage operations which gave rise to the claim for salvage in respect of the cannon terminated, in my judgment, in 2008. The circumstance that the later diving operations were on the same wreck is not sufficient to justify a finding that they must be regarded as part of the same operations which started in 2008 and are still continuing in 2017. Salvage operations on an historic wreck can continue for several years but there is no evidence in the present case of that coherence, co-ordination and planning which one would expect to find in such a case.
39. Mr. Knight relied upon the work of preserving the cannon, once ashore, as continuing the salvage operations. That work apparently went on until 2014. This contention was not accepted by the Receiver but was not the subject of submissions by counsel. In my judgment the cannon had been salved by removing them ashore from the seabed. Once ashore they were, I infer, at risk of suffering damage by reason of being exposed to the air. But salvage is concerned with the rescue of property in danger on navigable or other waters. Once ashore the cannon had been rescued from such dangers; cf China Pacific v Food Corporation of India, The Winson, [1982] AC 939 at p.955-956 where salvage services to a cargo of wheat came to an end once it had been carried to a place of safety in Manila notwithstanding that the wheat then had to be stored in suitable accommodation under cover if it were not to deteriorate rapidly from exposure to the elements. I therefore do not agree that the salvage services to the cannon continued ashore "somewhere near Ipswich".
40. It must follow, in my judgment, that the salvage operations in which the cannon were recovered terminated in 2008 and that the two year limitation period in which to institute judicial proceedings to claim salvage in respect of the cannon expired in 2010.

Ingots

41. The ingots which were reported in 2011 and are the subject of this claim for judicial review appear to be from the Harlingen and the Latonia (see droits nos. 038/11 and 043/11).
42. The ingots from the Harlingen were recovered in 2008-2010 according to droit no. 038/11. Mr. Knight says in his evidence that they were recovered between 2008 and 2011. His statement in the droit form is more likely to be correct because he signed the form on 10 April 2011 whereas his witness statement was made in 2016. The droit form states that there were 6 dives and that a boat was used. Mr. Knight says that there are only a few days each year when it is possible to search the site properly. He says that he has dived each season since 2011 searching for further tin. He located some further ingots in 2014 but has not yet recovered them due to uncertainty as to how his recoveries are to be treated. He says that he has "recently" checked that they are still there. That is likely to be a reference to the 2016 season because his statement was dated 23 December 2016.
43. The ingots from The Latona were, according to droit no. 043/11, recovered in 2009-2010. There were 14 dives and a boat was used. According to his statement Mr. Knight first began recovering tin ingots from this vessel in about 2000. Originally he used an airlift but then ceased doing so. He says that "over the years" he made several holes in the shipwreck to allow the tide to wash away the silt and "over time" objects of wreck appear. He makes no reference to the recovery of any ingots after 2010 but states that he expects to visit the site in 2017.
44. Between 2008 and 2010 there was much activity on the wrecks of the Harlingen and the Latona. There were some 20 dives. But after the end of the 2010 diving season there was nothing on the sites to indicate, once diving had stopped and the boat had departed, that any salvage operations were continuing or that a salvor was in possession of the wrecks of those vessels. In my judgment the realistic and objective conclusion to be drawn is that the salvage operations in which the ingots were recovered from the wrecks of these two vessels terminated at the end of the diving season in which they were recovered. That cannot have been later than 2010. Any subsequent dives in later seasons were further salvage operations. Thus the limitation period ended no later than 2012.

Other items

45. Miscellaneous items were recovered from the Strathclyde in 2009-2010 (see droit no.36/11), from an unnamed vessel in 2008-2010 (see droit no.38/11), from the Toward in April-July 2010 (see droit no.39/11), from an unnamed vessel in September 2010 (see droit no. 40/11), from the Mindoro in 2010 (see droit form no.42/11) from the L'Orage in 2010 (see droit form no.42/11), from an unnamed vessel in 2007 (see droit no.44/11), from an unnamed vessel in March 2011 (see droit no.45/11) from an unnamed vessel in 2009 (see droit no. 46/11), from an unnamed vessel in 2007 (see droit no. 47/11) and from the Paris et London in 2009/9 (see droit no.48/11).
46. Mr. Knight has given evidence about only one of these vessels, the Toward. He says that he bought the wreck in 1990 and has raised several items of wreck from it over the years. He says his salvage operations will continue indefinitely until he sells the wreck or dies. However, I consider that the salvage operations during which he recovered the items in droit no.39/11 (6 dives and a boat) ended in July 2010. In any event he said on the droit form that he did not intend to claim salvage, presumably because he was the owner of the items in question.
47. With regard to the other recoveries in respect of which there is no evidence beyond that appearing in the droit forms I can only conclude that the salvage operations in question terminated on the last date mentioned in the droit forms.
48. Thus in respect of the miscellaneous items the salvage operations in question ended no later than 2011 and the limitation period ended no later than 2013.

The institution of judicial proceedings

49. The date on which Mr. Knight instituted judicial proceedings in respect of his claim for salvage was 2 September 2016, the date of his judicial review claim in which he sought a declaration that he was entitled to salvage with "damages" to be assessed by the Admiralty Court. In order for his claim to salvage not to be barred the relevant salvage operations had to have terminated not before 2 September 2014. For the reasons which I have given the relevant salvage proceedings terminated before that date. It must follow that Mr. Knight's claim to salvage is time-barred.
50. Had Mr. Knight given notice of the recovery of the cannon to the Receiver in 2008 and been denied salvage he would have had the opportunity to institute judicial proceedings for salvage before the expiry of the limitation period in 2010 by means of an application for judicial review and/or a claim in the Admiralty Court for salvage pursuant to the Senior Courts Act 1981 section 20(1) and (2)(j). The same comment, but with the dates slightly amended, can be made in respect of the ingots and the miscellaneous items. Instead, he chose not to give notice of his recoveries and kept the wreck in his own possession. Any person who wishes to claim salvage must be alert to the passage of time lest the limitation period provided by article 23 of the Salvage Convention bar his claim.
51. In the light of my conclusion that Mr. Knight's claim for salvage is now time barred the claim for judicial review of the decision of the Secretary of State for Transport refusing salvage must be dismissed.
52. It is therefore unnecessary for the court to consider the several grounds on which judicial review was sought. I shall express my views on the principal grounds shortly.

The first ground: Error of Law

53. Article 18 of the Salvage Convention provides:

"A salvor may be deprived of the whole or part of the payment due under this Convention to the extent that the salvage operations have become necessary or more difficult because of fault or neglect on his part or if the salvor has been guilty of fraud or other dishonest conduct."

54. The Receiver relied upon Article 18 of the Salvage Convention and its reference to fraud or other dishonest conduct when refusing the claim for salvage. That was said to have been an error of law because the fraud or other dishonest conduct referred to in the article is "confined to fraud or other dishonest conduct committed by the salvor in the course of the actual salvage operation". I am unable to accept that construction of article 18. In my judgment, the article provides that a salvor may be deprived of the whole or part of the payment due under the Convention in two circumstances; the first is when the salvage operations have become necessary or more difficult because of the salvor's fault or neglect and the second is when he has been guilty of fraud or other dishonest conduct. There is no requirement in article 18 that the fraud or other dishonest conduct of the salvor must be in the course of the salvage operations. It may be before such operations have commenced or after they have been terminated. However, unless the fraud or other dishonest conduct has some real connection with the salvage services or the making of the claim for salvage it is unlikely that the court or other tribunal applying article 18 (or the Secretary of State when dealing with a salvage claim in respect of unclaimed wreck) would regard the fraud or other dishonest conduct as having any relevance.
55. The discretion provided by Article 18 to deny the whole or part of a salvage claim is to be contrasted with the mandatory forfeiture of a salvage claim provided by section 236 of the Merchant Shipping Act 1995 which provides as follows:

(1) If any person finds or takes possession of any wreck in United Kingdom waters or finds or takes possession of any wreck outside United Kingdom waters and brings it within those waters he shall—

(a) if he is the owner of it, give notice to the receiver stating that he has found or taken possession of it and describing the marks by which it may be recognised;

(b) if he is not the owner of it, give notice to the receiver that he has found or taken possession of it and, as directed by the receiver, either hold it to the receiver's order or deliver it to the receiver.

(2) If any person fails, without reasonable excuse, to comply with subsection (1) above he shall be liable, on summary conviction, to a fine not exceeding level 4 on the standard scale and if he is not the owner of the wreck he shall also—

(a) forfeit any claim to salvage; and

(b) be liable to pay twice the value of the wreck—

(i) if it is claimed, to the owner of it; or

(ii) if it is unclaimed, to the person entitled to the wreck.

(3) Any sum payable under subsection (2)(b) above to the owner of the wreck or to the persons entitled to the wreck may, in England and Wales and Northern Ireland, be recovered summarily as a civil debt.

(4) In Scotland any sum payable under subsection (2)(b) above to the owner of the wreck or to the persons entitled to the wreck shall, for the purposes of the sum's recovery, be regarded as a debt due to the owner or, as the case may be, to those persons.

56. Thus, when a salvor is convicted of an offence contrary to section 236 he forfeits, by operation of law, his claim for salvage in respect of the wreck of which he did not give notice to the Receiver. The justification for this mandatory loss of salvage must be the importance attached by the legislature to compliance with the obligation to report contained in section 236. It was common ground that for this purpose offences taken into consideration were not convictions; see R v Howard [1991] 92 Cr.App.Rep. 223 at p.227.

The second ground: Unfairness

57. Mr. Knight complains that the Receiver failed to adopt a fair procedure before reaching the conclusion that Mr. Knight was guilty of fraud or other dishonest conduct. In particular, he was not informed of the charge against him and was not given an opportunity to respond; see R v Home Secretary ex p Doody [1994] 1 AC 531.
58. It is now accepted by the Secretary of State that Mr. Knight ought to have been informed of the charge against him and given an opportunity to respond. That did not happen. An allegation of fraud or dishonesty is very serious. The particular conduct relied upon as amounting to fraud or dishonesty must be identified with precision and the respondent must be given an opportunity to respond to the charge made against him. I would add that where that is done and the Secretary of State concludes that there has been fraud or other dishonest conduct the Secretary of State must then consider whether the reasonable and proportionate course is not to deprive the salvor of an award of salvage but whether deprivation of part only of the salvage award would be the reasonable and proportionate response.

The third ground: Irrationality

59. This ground also seeks to challenge the Receiver's conclusion that there had been fraud or dishonest conduct. It is unnecessary to consider this ground because the procedure adopted was unfair.

The fourth ground: Lack of reasons for loss of entire salvage reward

60. Again, in circumstances where the procedure adopted was unfair it is unnecessary to consider this ground.

The fifth ground: Unlawfulness and irrationality

61. This appears to repeat earlier complaints.

The sixth ground: Violation of Article 1 of the First Protocol of the ECHR

62. Reliance was placed on the decision of European Court of Human Rights dated 23 February 2010 in the case of Koivusaari v Finland that a legitimate expectation of obtaining an asset (an award of salvage) may in certain circumstances enjoy the protection of Article 1 of the First Protocol. In that case the claim failed because the applicant's claim to salvage was conditional and depended upon whether certain statutory requirements had been complied with. In those circumstances it was held that the claim to salvage was not an asset. It was suggested on behalf of the Secretary of State that the same conclusion should be reached in the present case because Mr. Knight's claim to salvage was conditional (a) upon not being deprived of salvage pursuant to Article 18 of the Salvage Convention and (b) upon the claim not being time barred pursuant to Article 23 of the Salvage Convention. I would prefer not to enter into this debate because detailed submissions on Koivusaari v Finland were not made and it is unnecessary for me to decide this point in circumstances where the salvage claim is time-barred.

The seventh ground: "policy" challenge

63. It was said that in rejecting the claim to salvage the Secretary of State had given effect to an unpublished policy; see R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245. I was not persuaded that the Secretary of State was pursuing an unpublished policy. It appeared to me that the Secretary of State was seeking to apply Article 18 of the Salvage Convention.

Conclusion

64. The claim for judicial review must be dismissed because the salvage claims are time barred by reason of Article 23 of the Salvage Convention.