About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Durban
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Durban
>>
2018
>>
[2018] ZAKZDHC 6
|
|
MS "Bonanza" Schiffahrtgesellschaft mbH & Co, KG and Another v Durban Coal Terminal Company (Pty) Ltd t.a Bulk Connexions and Another (A50/2017) [2018] ZAKZDHC 6 (29 March 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
(Exercising
its admiralty jurisdiction)
Case
No: A50/2017
Name
of Ship: mv “Julian
”
In
the matter between:
MS“BONANZA”SCHIFFAHRTGESELLSCHAFT
mbH & CO,KG
1
ST
APPLICANT
FORTYSIXTH
PHOENIX SHIPPING
INC.
2
ND
APPLICANT
and
DURBAN
COAL TERMINAL COMPANY (PTY) LTD
t/a
BULK
CONNEXIONS
1
ST
RESPONDENT
TRANSNET
(SOC)
LTD
2
ND
RESPONDENT
JUDGEMENT
MNGADI,
AJ
[1]
The applicants, proceeding in terms of s 1(1)(w) read with s
5(2) (a) of the Admiralty Jurisdiction Regulation Act 105
of 1983
claim, as a main relief, a declaratory order that the right of the
applicants, if any, to limit their liability in respect
of the claims
of any parties that might have suffered loss arising from the
collision of their ship mv ‘Julian ’with
the quay and
ship loading appliance within the port of Durban on 30 April 2017 is
to be determined in accordance with s 261(1)
(b) of the Merchant
Shipping Act 57 of 1951 (the Act) and that it be ordered that the
liability of all loss be and is hereby limited
to an aggregate amount
not exceeding 66.67 special drawing rights for each ton of the ship’s
tonnage ; the applicants be
authorized to establish with the
Registrar of this Court a limitation fund in the South African Rand
in an amount equivalent to
the product of the ships gross register
tonnage as certified by the South African Maritime Safety Authority
in terms of s 262(4)
of the Act; and that in the event that a
respondent obtains a final and unappealable determination of
liability against either
or both the applicants from a competent
court for damages arising from any claims pertaining to the loss
arising from the said
collision, such respondent on notice is granted
leave to move for directions as to lodging of claims against the
limitation fund
and the distribution thereof. The application
is opposed by the first respondent. The second respondent
abides the
decision of the Court.
[2]
The first applicant is MS “Bonanza”Schiffahrtgesellschaft
mbH & CO, KG a German limited liability partnership
business
entity that has corporate personality and registered in accordance
with the laws of Germany with its registered office
and place of
business in Haren, Germany. The second applicant is Fortysixth
Phoenix Shipping Inc., a company duly incorporated
and registered in
accordance with the Company Laws of Liberia with its registered
office and place of business at Monrovia in Liberia.
The first
respondent is Durban Coal Terminal Company (Pty) Ltd t/a Bulk
Connexions, a company duly incorporated and registered
in accordance
with the Company Laws of the Republic of South Africa which carries
on business as, inter alia, terminal operator
from its place of
business within the area of the jurisdiction of this Court in Durban,
KwaZulu-Natal. The second respondent
is Transnet (Soc) Limited
which is a State owned company duly incorporated and registered in
accordance with the provisions of
the Legal Succession of the South
African Transport Services Act 9 of 1989 and the Company Laws of the
Republic of South Africa
and which carries on business, inter alia,
as Transnet National Ports Authority in terms of the National Ports
Act 12 of 2005,
having its registered office in Johannesburg,
Gauteng, South Africa.
[3]
The applicants are the parties bearing the risk in and to the vessel
mv ”Julian”. The first applicant is the
owner of
the vessel and the second applicant is the bareboat charterer of the
vessel in accordance with a charter party agreement
subsisting all
times material herein.
[4]
The applicants seek a declaratory order confirming that the
applicants are entitled to enjoy such limitation of liability as
may
arise on the facts in accordance with the provisions of s 261 and s
263 of the Act. The main reason for the application
is that
they are likely to be sued in the Hong Kong and German courts for
damages arising from the collision. In those jurisdictions
the
limitation is far higher than the limitation stipulated in the Act.
The applicants intend to use the declaratory order
to force or
persuade the foreign courts to apply the South African limitation as
an issue that has been determined by the South
African court and that
it is part of the South African substantive law. The applicants
state ‘While the principle of
limitation is almost universally
accepted in international shipping, and the basic grounds for
invoking limitation are broadly
the same in different jurisdictions,
the value at which a limitation is set differs from country to
country both because of the
limitation provisions set in domestic
statutes or in consequence of reliance on various international
limitation treaties’.
[5]
Section 21(1) (c ) of the
Superior Courts Act 10 of 2013
provides
that a Division of the High Court has jurisdiction over all persons
residing or being in , and in relation to all causes
arising and all
offences triable within, its area of jurisdiction and in all other
matters of which it may according to law take
cognizance, and has the
power in its discretion , and at the instance of any interested
person,to enquire into and determine any
existing ,future or
contigent right or obligation, notwithstanding that such a person
cannot claim any relief consequential upon
the determination’.
[6]
The litigation arises from the following incident. The vessel
with a gross registered tonnage of 40 160 tons with
permission
granted by and under instructions of the second respondent’s
Durban harbor master and under the control and command
of a pilot
employed by the second respondent entered the port to berth with two
tugs crewed by employees of the second respondent
made fast to the
vessel by lines to the vessel. At the entrance of the port the
vessel collided with a quayside and a bulk
loading appliance adjacent
to the quayside. It resulted in substantial damage to the
vessel, the quayside and the bulk loading
appliance. The damage
to the bulk loader appliance is estimated at R269 million and the
damage to the ship at US$328,993.28
and to the quayside at R250,000.
The collision has given rise to multiple claims. The
second respondent has sued the
applicants in South Africa for the
damages to the quayside wall and for an indemnity in respect of
claims brought against it by
the first respondent. The first
respondent has pursued actions against the applicants both in Germany
and Hong Kong.
The applicants have sued the second respondent
in South Africa for payment in respect of the damages to the vessel
and for an indemnity
in respect of any claims the first respondent
may have against the applicants.
[7]
The first respondent is the terminal operator of of the bulk terminal
of which the laoding appliance forms part and the operator
of the
specialised loading appliance and the party bearing risk in and to
the ship loading appliance. The second respondent
is the owner
of the land and the quayside on which the terminal and ship loading
appliance are located. There are no
allegations of any
connection between the respondents. They are sued as separate
independent entities.
[8]
The pilot in question was an employee of the second respondent and he
was acting in the course and scope of his employment,
The two
tugs the vessel was made to fast were owned by the second respondent
, operated by the second respondent and crewed by
the employees of
the second respondent. The first respondent was the terminal operator
of the bulk terminal of which the specialized
laoding appliance
formed part and the operator of the said appliance and the party
bearing risk to the said appliance.
[9]
The first respondent has sought leave to file further affidavit.
The supplementary affidavit seeks to take further
the issue of proof
of the correct German law applicable by means of expert opinion.
During the hearing of the application
no address in this regard was
addressed to me by either party. It appears to me to be a
rounding off of an issue that has
been addressed by the parties.
It is in the interest of justice that it be admitted and no prejudice
has been shown, and
the same applies to the rest of the
averments in the supplementary affidavit. In due course I will
revert to the application
for the stay of proceedings in this matter
by the first respondent pending the finalization of the action in
Germany instituted
by the first respondent against the
applicants. It is premised on the basis that rather than this
court deciding the matter
against the first respondent, it stays
these proceedings pending the decision of the German Court on the
issue. The parties
stood by their submissions in the papers and
did not address me during the hearing on the application to stay.
The Admiralty
Jurisdiction Regulation Act 105 of 1983 , S 7 (1) (a)
provides:
’
A
court may decline to exercise its admiralty jurisdiction in any
proceedings instituted or to be instituted , if it is of the opinion
that any other court in the Republic or any other court or any
arbitrator, tribunal or body elsewhere will exercise jurisdiction
in
respect of the said proceedings and that it is more appropriate that
tye proceedings be adjudicated upon by any such other court
or by
such arbitrator, tribunal or body.
’
The
applicants contend in their papers that the case of the stay of the
proceedings has not been made. The view I take of
the matter it
is not necessary to deal with the application of the stay of the
proceedings.
[10]
Section 261 (1) of the Act provides that the owner of a ship shall
not, if damage is caused without his actual fault or privity,
be
liable for damage in respect of loss of or damage to property or
rights to an aggregate amount of exceeding 66,67 special drawing
rights for each ton of the ship’s tonnage. In today’s
terms the maximum liability of the applicants in terms
of s 261 of
the Act would be R45,677 million whereas in Germany in terms of the
Convention on Limitation of Liability for Maritime
Claims 1976 as
amended by the Protocol of 1996 is ZAR 431 458 946.90 (approximately
US$32 343 249.39).
[11]
The applicants’ case against the first respondent is two fold.
They claim that the first respondent is one of the
claimants as
envisaged in s 261 of the Act. As a result, they are entitled to
raise the s 261 limitation against the first respondent.
Secondly, despite the first respondent instituting action in the
German court, the s 261 limitation applies in respect of its claim
because the collision took place in South Africa and the first
respondent is a South African entity subject to the law of South
Africa. The s 261 limitation is a substantive law to be applied
to the action by the German Court and, therefore, they are
entitled
to a declaratory relief to this effect. The first respondent opposes
the application on the following grounds:
a)
It
does not intend to institute an action against the applicants in a
South Africa Court, instead as of right, it will institute
such
action in a foreign court with jurisdiction where a higher limitation
applies than that contemplated in s 261 of the Act.
b)
The
order sought by the applicants seek to impermissible to operate
extra-territorially. The South African Court has no
justification
to make an order placing limitation on an action to be
instituted in a foreign court.
c)
An
order sought by the applicants seeks to bind persons not cited and
beyond the jurisdiction of this court. Its effect is
not
limited to the respondents.
d)
It
is premature to determine whether the collision caused any personal
injury or loss of life.
e)
Its
position is that there is in fact actual fault or privity on the part
of the applicants. The second applicant is a front
of the first
applicant and it will seek to hold him liable in the German court as
such.
f)
It
is improper to raise limitation as a cause of action. It is
meant to serve as a defence.
[12]
Section 261 of the Act states:
‘
(1)
The owner of a ship, whether registered in the Republic or not shall
not, if any loss of life or personal injury to any person,
or any
loss or damage to any property or rights of any kind, whether movable
or immovable, is caused without actual fault or privity-
(a)
if no claim for damages in respect of loss of or damage to property
or rights arises,be liable for damages in respect of loss
of life or
personal injury to an aggregate amount exceeding 206,67 special
drawing rights for each ton of the ship’s tonnage;
or
(b)
If no claim for damages in respect of loss of life or personal injury
arises , be liable for damages in respect of loss or damage
to
property or rights to an aggregate amount exceeding 66,67 special
drawing rights for each ton of the ship’s tonnage; or
(
c ) if claims for damages in respect of loss of life or personal
injury and also claims for damages in respect of loss of or damage
to
property or rights arise, be liable for damages to an aggregate
amount exceeding 206,67 special drawing rights for each ton
of the
ship’s tonnage: Provided that in such a case claims for damages
in respect of loss of life or personal injury shall,
to the extent of
an aggregate amount equivalent to 140 special drawing rights for each
ton of the ship’s tonnage, have priority
over claims for
damages in respect of loss of or damage to property or rights , and,
as regards the balance of the aggregate amount
equivalent to 206.67
special drawing rights for each ton of the ship’s tonnage , the
unsatisfied portion of the first -mentioned
claims shall rank
pari
passu
with the last-mentioned claims.
(2)
The provisions of this section shall extend and apply to owners ,
builders, or other persons interested in any ship built at
any port
or place in the Republic, from and including the launching of such
ship until the registration therof under the provisions
of this Act.
(3)
The provisions of this section shall apply in respect of claims for
damages in respect of loss of life, personal injury
and loss of or
damage to property or rights arising on any single occasion, and in
the application of the said provisions claims
for damages in respect
of loss, injury or damage arising out of two or more distinct
occasions shall not be combined’.
Is
first respondent a claimant in the South African jurisdiction ?
[13]
It is common cause that the first respondent has advised the
applicants that it has no intention of suing the applicants
in the
South African court but it intends to pursue its claims in the
English and/or Gertman Courts. The second respondent
on
the other hand has submitted itself to the jurisdiction of the South
African Court. The applicants contend that
the first
respondent is a claimant in the South African jurisdiction
because of its connection with South Africa, the
collision
taking place in South Africa and the fact that second
respondent called for security for its claim and for the
indemnity of
the first respondent’s claim against it which security has been
furnished. It is argued that the Merchant
Shipping Act is a
South African statute that is binding on the first respondent.
The first respondent contends that
it is within its rights to sue the
applicants in a foreign court with jurisdiction. It is not
connected to the second respondent
and the second respondent is not
its agent. It has not claimed anything in South Africa from the
applicants. It has
nothing to do with what is happening between
the applicants and the second respondent. It admits that it gave
notice to the second
respondent of its intention to sue it for
damages arising from the collision but the second respondent cannot
rely on the provisions
of s 261 as it is not the owner of the ship.
[14]
In its founding affidavit the applicants aver that it is always open
to the owners of ships or bareboat charteres of
a vessel to select
the jurisdiction in which they seek to limit claims. That
choice is subject only to there being a reasonable
connection between
the jurisdiction in which the limitation is to take place and the
events which giving rise to the claims and
the court concerned having
jurisdiction over the parties against which the limitation order
operates. In my view, the
applicants seem to
overlook that s 261 limitaion is not based on equity but on policy
consideration. The question of
fairness does not arise.
As long as the statutory requirements are met, it becomes
applicable. It does not take into
account the actual damage nor
does it seek to protect South African citizens. On the
contrary, even if the persons who suffered
the loss at the hands of
foreign ships are South Africans, it applies to the prejudice of the
South Africans. It does not
require that the accident should
have occurred in South Africa. All that it requires is that the
claims be instituted in
South Africa. It arbitrarily on policy
considerations deprives the claimant from recovering a portion of his
actual loss.
It must be subjected to a restrictive
interpretation.
[15]
In my view, it is clear that s 261 of the Act does not prohibit
a South African entity to do forum shopping. If
it was, it
would be a provision restricting the choice of a litigant to sue in
any court with jurisdiction. Such a provision
cannot be implied
but it must be in express terms. It cannot be implied by giving
the word claims/claimants an extended meaning.
It must be
established that the person who sought to be restricted is a claimant
in the South African jurisdiction. Where
there is doubt whether
the person falls into a catergory of claimants but there is clear
evidence that from inception, he made
it clear that he is not going
to claim within the South African jurisdiction and he has not so
claimed, it would mean that he has
not been shown to be a claimant in
the South African jurisdiction for purposes of s 261 of the Act.
[16]
There is no dispute regarding the dictionary meaning of the
words used in s 261 of the Act. The Act has not assigned
any specific
definition to ‘çlaim or claimant’. Further,
by virtue of the collision taking place
in South Africa, the claims
arose in South Africa but it does not follow that the entities that
suffered the loss are claimants
in the South African jurisdiction.
Each entity may pursue his or her claim before any court with
jurisdiction. It matters
not whether the entity itself is a South
African entity . The s 261 limitation to be invoked requires that it
be a person with
a claim and the claim be instituted by proceedings
in South Africa. Therefore, the first respondent, in a restricted
sense, has
not been shown to be a claimant in South Africa.
There is no provision in the Act that if the claimant, as part of his
claim
claimed an indemnity for a claim against it, the entity that
called for the indemnity, will itself be regarded as a claimant
for
purposes of the provisions of s 261 of the Act. The first
respondent notified the second respondent of its claim.
It was
the second respondent’s decision to pursue its claim against
the applicants in South Africa, not that of the first
respondent.
In my view, indemnity with its conditions and terms is an issue
between the entity calling for indemnity and
the entity the demand
for endimnity is directed to. I have not been referred to or find any
authority to the contrary. The
authority dealing with when does
a claim arise does not address the point. I agree with the
applicants that it is not a requirement
for one to be a claimant in
the South African jurisdiction he must have commenced action in South
Africa. A stage may be
reached before the commencement of the
action in South Africa that one has reached a stage where he is a
claimant in the South
African jurisdiction.
[17]
Section 261 of the Act clearly envisages claims arising from the same
collision in South Africa being dealt with together,
but that must be
confined to claims lodged in South Africa relating to the collision.
Forum shopping is standard internal
practice, if the Act intended to
restrict it, it would have done so in clear terms. The
establishment of a limitation fund
in South Africa cannot be used to
deprive a person who has no intention of suing in South Africa of his
right to sue in any court
with jurisdiction.
J
Hare
Shipping Law and Admiralty in South Africa (2009) 2ed at 537 states
that
‘
limitation
of liability and its calculation is a statutory matter for the law of
the forum. Any claim for damages ,
both contractual and
delictual , brought in a forum of choice, of convenience,of
commission or otherwise , is subject to limitation
legislation ruling
in the country of that forum. It is a remedy of the forum which
is available to litigants in that forum,
whether
incolae
or
peregrine’
.
Therefore,
a limitation fund in South Africa is for the South African claimants,
namely; those who claimed in South Africa.
It cannot be used to
compel other persons to institute their claims in South Africa.
Forum shopping may result in two or
more competing limitation
funds in different jurisdictions arising from one incident. See
Hare
at
146. The first respondent is not a claimant in South
Africa and there are no legal basis to link it to the South
African
action(s). It is trite that the starting point in the
interpretation of a statutory provision is that the words employed
must be construed in accordance with their ordinary grammatical
meaning provided an absurdity does not arise. The language of s
261
of the Act, read in context and having regard to the purpose of the
provision, does not permit the inclusion of an entity
in the
position of the first respondent as having instituted a claim in the
South African Court.
Can
the first respondent be declared to be subject to s 261 limitation in
respect of actions instituted in foreign jurisdiction
?
[18]
In the English case of
The
‘Vovox ‘Hollandia
[1988] 2 Llyod’s Rep 361 the following principles were
restated:
The
right of shipowners to claim limitation is an ancient right and
recognized internationally. Its classic form is an action
by
shipowners claiming a decree of limitation against all acual and
potential claimants, commonly called limitation action.
It is
the right of shipowners alone to claim limitation , whether by action
or defence and/or counter-claim. It is not necessarily
unjust
or inconvenient for liability and limitation to be tried separately
and/or in different forums.
[19]
In
Hare
para
11-4, it is stated ‘
Limitation
of liability and its calculation is a statutory matter for the law of
the forum. Thus, any claim for damages both
contractual and
delictual brought in the forum of choice ,of convenience, of
commission otherwise, is subject to the limitation
legislation ruling
in the country of that forum. It is a remedy of the forum which
is available to the litigants in that
forum whether
incolae
or
peregrine
.
The forum’s limitation, if there is such in place, will
override a choice of law provision in a contract because limitation
is a matter of procedural and not substantive law, regardless of what
law created liability, in delict or in contract’ .
[20]
The applicants contend that limitation is a matter of substantive
law. Both German and Hong Kong courts will apply substantive
law of the
lex
loci delicti
even if that is foreign law. It is argued that
Hare
is wrong, he relied upon the American case
The
Titanic
which is a decision of the United States Supreme Court in respect of
the United States Limitation statute. The proposition,
it is
argued, is wrong because it does not mention the South African case
in which it was held that the limitation is a substantive
right
accruing to the party seeking to limit and that it does not accord
with proper interpretation of section 261; it does not
correctly
reflect the position in the United Kingdom or other commonwealth
countries with closer links to South African admiralty
law regarding
provisions similar to s 261; it does not accurately reflect the state
of United States law at the time of publication
of the work..
In my view, it is clear that the issue is not as simple as stated in
Hare
.
It is a complex issue and its resolution is far from predictable and
diffirent courts, even in the same jurisdiction, may
come to
different conclusions..
[21]
The applicants have extensively and strongly argued that the correct
position is that s 261 of the Act is a substantive law.
It
limits liability, and the nature and extent of delictual liability is
determined by
lex
loci
.
A forum considering delictual liability applies
lex
loci
.
In my view, it is not necessary, for the reasons that appear
below, to summarise in detail the arguments raised by the applicants.
The first respondent contends that these arguments are arguments to
be considered by the forum hearing the action or the forum
before
which limitation action is tried; it is not shown why the issue
should be prejudged for the forum that shall hear the matter;
the Act is a local statute applicable within the South African
territorial jurisdiction; the issue raised is academic and it will
not settle the dispute between the parties; and the decision of the
this Court shall not bind the foreign court. This court
,it is
argued,should exercise its discretion and refuse to determine the
issue raised and dismiss the application.
[22]
There is no dispute whether the s 261 limitation applies or not in
the actions before the South African Court. Therefore,
authority that limitation may be determined as a separate issue
is not applicable. There is also no dispute that for
an action
instituted in a foreign court, if there is dispute whether limitation
applies or not, that dispute may be subjected to
litigation in a
different forum. The dispute is whether the limitation
that applies will be the limitation of the foreign
jurisdiction
hearing the matter or the limitation in the South African
jurisdiction. In respect of all claims brought in
South Africa,
the South African court is the court to pronounce on the applicable
limitation. Therefore, the actions instituted
in the South African
Court have no bearing on the question of whether it is desirable for
the South African court to seek to determine
for the foreign court
the limitation to be applied by the foreign court. Such a
dispute, in my view, appears to be a dispute
that can appropriately
be heard by the court hearing the limitation action and its decision,
if it so wished, be appealed in the
hierarchy of courts in that
jurisdiction. It is for the parties to prove the law applicable to
the dispute including whether the
issue in dispute is a matter of
substantive law or procedural law. This may be a complex issue
and the foreign court applying
its own creteria will be better placed
to determine the issue. See
Kuhne
& Nagel
AG
Zurich
v
P A Distributors (Pty) Ltd
1981 (3) SA 536
(W) p538-p540;
Society
of Llyod’s
v
Price; Society of Llyod’s. v Lee
[2006]
SCA 87 (RSA) para10-20.
[23]
The applicants argue that they seek a decree against the world.
The difficulty is that they seek a decree which might
not be
enforceable and therefore, constitute an academic exercise. A local
court will naturally eschew deciding the issue that
should be decided
by another court. Courts generally, jeoulously guard against
interference with their jurisdiction.
[24]
In
Cilliers
et al
Civil Practice of the High Courts of South Africa 5
th
ed Vol 2 at 1438F it is stated: ‘
Courts
will not deal with abstract, hypothetical or academic questions in
proceedings for declaratory order. A court has a
discretion
whether to grant or refuse an application for a declaratory order.
Some factors which could be taken into account are
the utility of the
remedy, and whether , if granted it will settle the question at issue
between the parties, the existence or
absence of an existing dispute
,must appear to flow from the grant of the order sought, and that ,
despite the fact that no consequential
relief is being claimed or
could be claimed, yet justice and convenience demands that a
declaration be made, or that the order
will be of practical
significance, the considerations of public policy, the availability
of other remedies’
.
It may be added that the declaratory order sought by the applicants
has a pre-emptive element in it. It seeks an order
deciding an
issue which has not, but is to be decided by the foreign courts.
It is an endeavor to be discouraged rather than
be encouraged. In
Oceanic
Steam Navigation Co. v Mellor
,
[1914] USSC 171
;
233 U.S. 718
(1914) at Mr Justice Holmes said:
’
We
see no absurdity in supporting that, if the owner of the Titanic were
sued in different countries, each having a different rule
affecting
the remedy there, the local rule should be applied in each case.
It can be imagined that, in consequence of such
diverse
proceedings,the owner might not be able to comply with local
requirements for limitation, as it also is conceivable that,
if it
sought the advantage of an alien law, it might as a condition have
possible difficulties is no suffifient reason for not
applying the
statute as it has been construed , on the whole, it would seem with
good effect.
[25]
The applicants, as stated above, have instituted action for damages
in this court against the respondents. It is claimed
the second
respondent failed to adopt policies and procedures regulating the
proper pilotage of vessels in the port of Durban and
failed to ensure
that its pilots were properly trained as well as the crew for the
tugs. The second respondent has pleaded and
countered that the cause
of the collision was the negligence of the master and crew of the
vessel. In their plea to the counterclaim,
the applicants raise
the issue that, if found liable , they are entitled to apportionement
and that their liability is subject
to the limitation prescribed in s
261 of the Act. Likewise, the first respondent has instituted
action for damages in Germany
against the applicants. The issue
of whether it is the limitation in s 261 of the Act or the
German
Convention of Liability in Maritime Claims
that applies is raised.
[26]
The limitation of liability of the owner of a ship is a maritime
claim as contemplated in the Admiralty Jurisdiction
Regulation
Act, 1983. Rule 23 of the Rules Regulating the Conduct of the
Admiralty Proceedings of the Several Divisions of
the Supreme Court.
The Act provides;
‘
(1)
In order to avoid a multiplicity of actions the court may make an
order that any action pending before it be regarded as a a
test
action and that any other action to which one or more of the parties
to the action so pending are parties and in which the
same questions
would arise abide the result of the test action and may make any
order as to the procedure and representation in
the said action as
the court deems fit.
(2)
Where any person claims to be entitled to a limitation of liability
referred to in paragraph (w) of the definition of maritime
claim in
section 1 (1) of the Act, the court may give such directions as it
deems fit with regard to the procedure in any such
claim, the staying
of any other proceedings and the conditions for the consideration of
any such claim, which may include a condition
that such amount as the
court may order to be paid to abide the result of the consideration
of the said claim, or that the claimant
be required to admit for all
or any claims made against him or her, or any other condition which
the court deems fit
’
The
sub rules regulate multiplicity of actions within the same
jurisdiction or issue an order relating to local proceedings in view
of proceedings in foreign courts. . They have no direct
application in actions instituted or pending in foreign courts.
Section 7(1) (a) of the Admiralty Jurisdiction Regulation Act 105 of
1983 as amended provides that ‘
A
court may decline to exercise its admiralty jurisdiction in any
proceedings instituted or to be instituted , if it is of the opinion
that any other court in the Republic or any other court or any
arbitrator , tribunal or body else where will exercise jurisdiction
in respect of the said proceedings and that it is more appropriate
that the proceedings be adjudicated upon by any such other court
or
by such arbitrator, tribunal or body’
The
provision authorizes the court to decline rather than to force the
court to hear the matter. The provision entrenches
the doctrine
of
forum
non conveniens
.
See
MT
TIGR , Bouygues Offshore
SA
and Another v Owners of the MT Tigr and Another
1998 (4) SA 740
C at p741-p742.
[27]
The issue is the determination of the appropriate forum to hear and
determine the limitation proceedings pertaining to the
first
respondent. In my view, it is abundantly clear that it is
undesirable to determine the issue of which limitation is
applicable
in separate local proceedings which will immediately result in a
question whether the judgement is binding to the foreign
court
hearing the limitation action. The proper course is for the
issue to be raised in an action before the forum
hearing the action,
and if a party is not satisfied with the outcome can appeal the
decision of the particular court within the
hierarchy of courts in
that jurisdiction. There is nothing stopping the foreign jurisdiction
applying the South African law to
apply the South African limitation
if it is found that it is the applicable limitation. But a local
court should eschew to determine
the applicable limitation for a
foreign court. See
Caspian
Basin v Bouygues
Llyods Law Reports Vol 2 p510. In
Bouygues
it
was said
the
right to claim limitation whether by action or defence and/or
counterclaim , is a right which belongs to the shipowner alone….there
can be nothing surprising or inappropriate about a limitation action
being commenced in the same forum as a claimant action to
establish
liability, but equally there is nothing unusual about a limitation
action taking place in a different forum from that
in which liability
is being litigated’.
[28]
In essence, the applicants seek a declaratory with the
implication that arising from the collision, the s 261 limitation
applies wherever the action may be instituted. The following is
common cause:
1)
For actions instituted in South Africa the s 261 limitation applies
and there is no dispute relating thereto.
2)
The South African court is asked to make a declaratory which has no
relevance to the actions pending before it, if the first
respondent
is not a claimant in the South African court.
3)
The determination of whether s 261 limitation applies is not
necessarily connected to the establishment of the limitation fund.
In other words the establishment of the limitation fund in a
particular jurisdiction does not mean that limitation actions must
be
heard in that jurisdiction.
4)
The crucial issue , whether s 261 limitation applies in foreign
actions, is only if s 261 limitation is found to be substantive
law
and not procedural law. It the issue for determination by the
forum before which the limitation action has been lodged.
5)
In the South African actions the issue of whether s 261 limitation is
substantive law or procedural law does not arise at all.
6)
The question is then on what basis is the South African court
required to determine an issue which has no relevance for the actions
before the South African court.
7)
Even if the South African court would embark on determining whether s
261 limitation is substantive law or procedural law, such
a decision
might be of little or no value to the foreign court seized with the
issue.
8)
Lastly, it is common cause that the issue of whether s 261 limitation
is substantive or procedural law may be raised and
be
determined by the foreign court.
[29]
The crisp question is whether the South African court is clearly or
distinctly shown to be the forum in which the identified
limitation
issue can suitably be tried for the interests of parties and for the
ends of justice. See
Volvox
Hollondia
at 373. In my view, it remains more appropriate that the
question of whether s 261 limitation applies in respect of the first
respondent’s foreign claims , ought to be determined by the
court for which such determination has significance and relevance.
[30]
Lord Justice Dillion
in
Volvox Hollondia
at 376 stated
’
in
a multiple claims case, where there are several claims of several
claimants arising out of the occurrence, and the question of
whether
the shipowner can limit his liability must be decided in an action in
rem to bind all claimants , that the shipowner who
alone can start
such action can choose the forum in which to start it. But I do
not see that it follows that the shipowner
has an overriding or
unchallengeable right to choose the forum in a single claim case
where the issue of limitation and all other
issues can be decided in
proceedings in personam between the claimant and the shipowner.
That would be to give the shipowner
a special procedural priviledge,
of deciding the forum, which is not necessary to give effect to his
right to limit in a single
claim case and which other litigants
involve in litigation in personam do not have
’
.
In my view, the actions in South Africa are actions in rem and the
South African limitation binds all claimants in that forum
but not
claimants instituting proceedings in personam in foreign courts.
[31]
In
Caltex
Singapore PTE Ltd and Others v BP Shipping Ltd
1996 Vol 1 Llyod’s Reports 286 wherein the defendant , a
British company, in respect of claims arising out of an incident
in
Singaporean waters, applied for a stay of the action in England on
the grounds that the claim should be heard and determined
in
Singapore, the reason being that the limit of the defendant’s
liability is likely to be greater in England than in Singapore.
The plaintiff, a Singaporean company, wanted to proceed in England
where the limitation was greater than in Singapore. The
court
(Mr. Justice Clarke)stated at p289:
’
Principles
to be applied ,derived from the speech of Lord Goff in the
Spiliada
at pp.10 to 12; pp.476 to 478, may be summarized as follows:
1.
The
Court will only grant a stay where it is satisfied that there is some
other available forum, having competent jurisdiction,
which is the
appropriate forum for the trial of the action; that is where the case
may be tried more suitably for the interest
of all parties and the
ends of justice.
2.
The
problem should be approached in two stages. At stage one the burden
is on the defendant to show both that England is not the
natural or
appropriate forum for the trial of the action and that there is
another forum which is clearly and distinctly more appropriate
than
England.
3.
If
the defendant discharges that burden , it is necessary to move to
stage two. It is then for the plaintiff to persuade the
Court
that there is some special circumstance which requires that the trial
should take place in England.
[32]
Mr Justice Clarke at p289 proceeded : ‘
As
limitation of liability , no question arises under English law
because the limitation fund is greater than the plaintiff’s
claim. Thus the question whether BP is entitled to limit its
liability under the law of Singapore will arise in Singapore,
but
will only arise in England if BP is entitled to rely upon the law of
Singapore as the lex loci delicti. As will be seen
below , I
have reached the conclusion that the Singapore law of limitation of
liability should be characterized under English law
as procedural and
not substantive. If that is correct, it follows that the
question whether BP is entitled to limit its liability
will not arise
in England and that Singapore is the only forum in which that
question can arise’. In our case,
as stated above,
the question is which courts are better placed to determine which
limitation applies in the claims before those
courts. The
answer is, in my view, the German and Hong Kong courts. These
courts applying their own law will determine
whether it is their
limitation of liability that applies or the South African
limitation. If they find that South African
limitation is
substantive law they will apply it as lex loci delicti.’
[33]
The applicants,correlty, relying on
Akai Pty People’s
Insurance Co. Ltd
.[1988] 1 Llyod’s Rep 90 at 108;
Sesmic
Shipping Inc & Anor v Total E & P UK Plc
[2005]
EWCA Civ 985
at 50-51,contend that ‘no court can bind another
independent court situated in a foreign and sovereign jurisdiction.
The recognition and enforcement of foreign court orders is always a
matter for the foreign State to permit or disallow as a matter
of
policy, and for a court in such foreign State to apply or not,
depending on the factual circumstances and the application of
the law
of such State. The position is accordingly that a German or
Hong Kong Court is at liberty, in the application of
its own law, to
determine whether it will apply a South African limitation decree or
not’. The contention begs the question,
is there really any
need for the South African Court to determine the issue or is it a
futile exercise ?. Section 261
of the Act has nothing in it
justifying a construction that it was intended to apply
extra-territorially. Therefore, it is
subject to the
presumption against extra-territorial application.
Conclusion
[34]
I have found that the first respondent is not a claimant before the
South African forum and therefore the s 261 limitation
does not, on
those grounds, apply to it.
Secondly.
the critical question in the second inquiry, is whether s 261
limitation is substantive law or procedural law.
If is
found to be substantive law, it may justify the granting of the
declaratory relief. In my view, the German and the
Hong Kong
courts are the forums better placed and it is in the interest
of justice that they be the forums that determine
the issue. Taking
into consideration the above-mentioned factors, it appears to me that
there is no basis to exercise my discretion
in favour of deciding the
issue raised. I find, therefore, that there is a
compelling case to execise my discretion
against granting the
declaratory order. The first respondent submitted that if the
outcome of the main application is in
its favour, its application to
stay falls away and need not further be considered. There was
no arguments addressed to me
whether the costs relating to the the
granting of leave to file supplementary affidavits and the stay
application should be treated
differently from the costs of the main
application, and I see no reason to do so.
[35]
As stated above, the second respondent has not taken part in these
proceedings. It filed a notice to abide. It
means the
second respondent is not opposing the granting of the relief as
claimed in the notice of motion. There is no indication
that
the second respondent, at any stage, resisted that its claim against
the applicants in South Africa is subject to the s 261
limitation.
The second respondent has instituted action against the applicants in
South Africa. It has not, and it
appears to have no basis, to
claim that its claim against the applicants is not subject to s 261
limitation. Of concern
is the wide terms of the relief
sought which may result in unintended consequences. Without
prejudging the issue, it has not been
shown that it is necessary to
issue the relief as claimed against the second respondent. The
focus of the applicants is the
first respondent. In the
circumstances, I see no reason to make any order against the
second respondent. However,
if it is found necessary, the
applicants are granted leave on the same papers, supplemented as it
may be necessary, to seek an
appropriate order against the second
respondent.
[36]
I, accordingly,make the following order.
The
application is dismissed with costs including the costs of two
counsel.
…………………
MNGADI,
AJ
APPEARANCES
Case
Number: A 50/2017
For
the Applicants: Adv. P D F Irish SC
Instructed
by: Messrs. Edward Nathan Sonnenberg Inc.
Durban
For
the first respondents: Adv. G D Harpur SC
Instructed
by: Messrs. Norton Rose Fulbright South Africa Inc.
La
Lucia,Durban
Matter
argued on: 23 March 2018
Judgement
delivered on: 29 March 2018