Lord Diplock gave the majority’s reasons in The Halcyon Isle22. He began by saying that priorities of claimants to a limited fund were a matter for the law of the forum under English conflicts of law rules23. He then observed that the classification of a claim against the former owners of a ship could be said to depend on the lex causae of such a claim and, if there were more than one, those laws may create different consequences. Lord Diplock identified two possible solutions, namely, either the use of the law of the forum to classify a claim based on the events on which it is founded and giving it the appropriate priority under that law; or alternatively, first, “applying a complicated kind of partial renvoi” by ascertaining the legal consequences of the lex causae in respect of the claim, apart from its treatment of priorities, and then, secondly, applying the law of the forum to determining the priorities of the competing claims so ascertained on the basis of how the forum would classify the events giving rise to each claim24.
He reasoned that it was “too simplistic” an approach to the questions of conflicts of law that are involved to omit the second of his suggested steps in the alternative scenario. One might observe that that step simply brought about the result of his first alternative so that each of his posited solutions arrived at the same result. Unsurprisingly, then, Lord Diplock concluded that his first alternative had the merit of simplicity and was preferable in principle25.
The result of that reasoning was that since English law did not recognize a maritime lien for necessaries men’s claims, their claim ranked after the mortgagee bank’s claim. The majority said that the charge created on a ship by a maritime lien was initially inchoate, and, unlike a mortgage, created no immediate right of property. Lord Diplock said that a maritime lien was devoid of legal consequences unless and until it was carried into effect by a proceeding in rem26. He said that if it were carried into effect, the maritime lien would date back to the time that the claim on which it was founded arose. Consequently, the majority expressed its ratio decidedi thus27:
“… any question as to who is entitled to bring a particular kind of proceeding in an English court, like questions of priorities in distribution of a fund,