Payment is due: the recovery and enforcement of unpaid ship, passenger and goods dues and pilotage charges

For most statutory harbour authorities (SHAs) their Schedule of Charges for 2024/25 will have taken effect on either 1 January or 1 April, setting (amongst other charges) the level of ship, passenger and goods dues, levied at their respective harbours. Similarly, competent harbour authorities (CHAs) will have done the same in relation to pilotage charges. 

This article explores the statutory powers and other options available to recover or enforce unpaid ship, passenger and goods dues and pilotage charges.

Harbours, Docks and Piers Clauses Act 1847

By virtue of section 26(3) of the Harbours Act 1964 (the 1964 Act), SHAs can exercise the powers contained in sections 44 and 45 of the Harbours, Docks and Piers Clauses Act 1847 (the 1847 Act), if incorporated into the SHA’s local legislation.

These sections provide:

• Section 44: the SHA may take, arrest or distrain the vessel, including its tackle, apparel and furniture. If ship dues remain unpaid for seven days after arrest or distraint, the SHA can sell the same, after two valuations have taken place. The amount outstanding plus the costs of taking, keeping, appraising and selling the same can be retained by the SHA, with the surplus (if any) being given to the master on demand.
• Section 45: in relation to unpaid goods dues, the SHA may arrest or distrain such goods as are on or in the vessel or otherwise within the limits of the harbour. If the goods that the goods dues relate to have already been removed, then the SHA may arrest or distrain any other goods in the harbour belonging to the person liable to pay. The goods may be sold at any time to recover the amount outstanding, with the surplus (if any) being given to the owner on demand. Additionally, court action is specifically available under this section. 

Although not a recovery option, there is also section 43 (if incorporated). This provides that where the master of a vessel/owner of goods evades payment of relevant dues, the SHA is empowered to triple the amount of rates evaded. They may be recovered in the same manner as other penalties under the Act or in court. 

As for CHAs and pilotage charges, section 10(7) of the Pilotage Act 1987 permits CHAs to recover unpaid pilotage charges in the same manner. This means that sections 44 of the 1847 Act, if incorporated, can also be relied on by CHAs to recover unpaid pilotage charges.

Local legislation

The powers described above are often supported by/in addition to express powers contained in local harbour legislation. Although different SHAs will have different powers, some common examples include powers:

• Permitting the increase of evaded rates (akin to section 43 of the 1847 Act above)
• Permitting the recovery of charges as debt (without limitation to statutory recovery methods)
• Permitting the harbour master to prevent the removal of any vessel from the harbour until evidence is produced of the charges having been paid. 
• Extending the power to charge ship, passenger and goods  dues to vessels or other marine structures, such as Jack-up barges or PWCs, that may not fall within the definition of ‘ship’ under the Harbours Act 1964.

We always recommend local legislation is checked thoroughly for all available powers before taking recovery or enforcement action. This is because the exercise of one power in the first instance may prejudice the future exercise of another and limit recovery or enforcement prospects.

Other options and what to do

Non-statutory options are also available. An example would be where the holder of a mooring licence breaches its terms and conditions by failing to pay ship dues (usually called annual harbour dues) for the vessel utilising the mooring. The threat of losing an allocated mooring can encourage harbour users to pay what is owed. Civil debt recovery options can also be explored. Where mooring charges are inclusive of ship dues, it is important that the ship dues are still separately identified on any invoices raised, for example as a sub category of the overall amount.

The first step in most cases is to write formally to the debtor setting out the basis on which ship dues/pilotage charges are owed and the recovery powers available. This is usually enough to encourage prompt payment or at least initiate a discussion on payment options. Failing that, the actual exercise of powers of arrest, distraint, recovery etc. may be necessary.  

Where there is a risk of the vessel leaving the SHA area and not returning or the debtor becoming insolvent then it may be necessary to exercise statutory powers very quickly, to try and obtain priority for the debt. On the other hand were a vessel is occupied, such as a houseboat, statutory powers should not be exercised without first taking legal advice. 

Finally enforcement of unpaid ship dues can be a useful tool to assist with removing unserviceable and abandoned vessels, albeit it cannot assist with the enduring issue of cost of such removal where the vessel owner has no money or assets.

If you would like advice, please contact Lara Moore or Tommy Fox in the marine team who would be happy to assist.