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[2013] ZAKZDHC 29
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Kalahari Mining Logistics (Pty) Ltd and Others v Wilest International Pvt Co. Ltd (A18/2013) [2013] ZAKZDHC 29; 2013 (5) SA 12 (KZD) (30 May 2013)
IN THE KWAZULU-NATAL HIGH
COURT, DURBAN
REPUBLIC OF SOUTH AFRICA
(EXERCISING ITS ADMIRALTY
JURISDICTION)
CASE NO.: A18/2013
Name
of Ship:
MV “HUA QIANG”
In
the matter between:
KALAHARI
MINING LOGISTICS (PTY) LTD
...................................................
First
Applicant
BAOBAB
HOLDINGS (PTY) LTD
...............................................................
Second
Applicant
INDEPENDENT
FREIGHT CARRIERS (PTY) LTD
.......................................
Third
Applicant
INDEPENDENT
FREIGHT CARRIERS LOGISTICS (PTY) LTD
.................
Fourth
Applicant
and
WILEST
INTERNATIONAL PVT CO. LTD
..........................................................
Respondent
IN
RE:
WILEST
INTERNATIONAL PVT CO. LTD
.................................................................
Plaintiff
and
A
CARGO OF 16892.78 METRIC TONS OF IRON
ORE
LADEN ABOARD THE MV “HUA QIANG"
....................................................
Defendant
JUDGMENT:
Date delivered: 30 May
2013
SR MULLINS AJ:
1. On
6 January 2013, Wilest International PVT Co. Ltd (a Mauritian
Company) commenced an action
in rem
in which the defendant was described as "a cargo of 16,892.78
metric tons of iron ore laden aboard the mv ‘‘Hua
Qiang”.
The
in rem
summons contained the allegation that “
the
plaintiff is the owner of the defendant cargo"
and the prayer in the
in rem
summons was for “
delivery of
the aforesaid Defendant cargo;
alternatively,
payment of R23,127,29.00, being the
equivalent value of the Defendant cargo
”,
alternative relief and cost of suit.
2. The arrest was effected,
but security was subsequently establishing the sum of R23,127,229.00
and the mv “Hua Qiang"
was allowed to proceed on her
voyage with the iron ore on board. The provision of security had the
result that there remained a
“deemed arrest” of the
defendant iron ore cargo in terms of Section 3(10) of the Admiralty
Jurisdiction Regulation
Act ("the Act”).
3. In due course the
applicant companies (all part of the “IFC Group”) brought
an application, as a matter urgency,
for the setting aside of the
deemed arrest and return of the security and, in the alternative, an
order reducing the quantum of
the security to an amount of
R3,800,875.78.
4.
Before dealing with the basis of the challenge to both the arrest and
the amount of the security, it is necessary to sketch the
background
to the
in rem
action.
Wilest International PVT Co. Ltd (to which I refer hereinafter simply
as “Wilest”) had arranged to acquire bulk
iron ore from
the “Help-'n-Bietjie mine in the Northern Cape Province which
was operated by a company, Timasani (Pty) Ltd.
Wilest negotiated with
Baobab Holdings (Pty) Ltd (one of the companies within the "IFC
Group”) to collect quantities
of ore from the mine, arrange for
the iron ore to be transported to Saldanha Bay and retained there at
an agreed contract price
of R450.00 per metric ton. Once sufficient
stocks were available in Saldanha, Wilest would sell the cargo and
either it or an IFC
Group company on its instructions, would secure a
vessel to carry the cargo to its export destination.
5. It
would appear that a formal written agreement was not concluded. The
standard form contract of Baobab Holdings (Pty) Ltd was
extensively
amended by representatives of Wilest but it would appear that no
agreement on the final terms was ever reached. Nevertheless
the IFC
Group uplifted from the mine and transported to its Saldanha
stockpile the aforesaid quantity of 16,892.78 metric tons
of iron
ore. Wilest, however, did not make payment of the agreed charge of
R450.00 per metric ton for the removal of the iron ore
to Saldanha.
This and similar issues surrounding the IFC Group companies’
dealings with Manganese or on behalf of Wilest,
led to an impasse by
December 2012. By letter dated 13 December 2012, the Johannesburg
based attorneys representing the IFC Group
recorded “
You
are furthermore advised that my client holds a lien over all
materials in its possession and on which funds are owing. If payment
is not made as contracted my client will bring an order to sell the
materials in its possession to defray costs which are currently
due
and owing by Wilest. From the proceeds my client will deduct that
which your client admits is due owing and any disputed balance
can be
held in trust pending resolution
’’.
By mid- January, the impasse had not been resolved. On 16 January
2013, the Johannesburg based attorneys of Baobab
Holdings (Pty) Ltd
addressed the attorneys of Wilest. They asserted that their client
held and would not relinquish a
lien
over the cargo and requested payment “
within
the next month".
They proposed
further that, if payment could not be made,
my
client sells the 16,892.9 mt together with other comparable stock to
increase the current stockpiles to a sellable quantity’'.
6. Notwithstanding that
communication, and on the same day, the IFC Group sold a quantity of
some 25,000.00 metric tons of iron
ore, including the 16,892.78
metric tons held on behalf of Wilest, to Metmar Trading (Pty) Ltd.
Pursuant to that sale, the iron
ore was loaded on to the mv “Hua
Qiang” commencing on Monday 28 January 2013, loading being
completed on 31 January
2013.
7. On
29 January 2013, that is whilst the iron ore was already in the
process of being loaded on board the vessel pursuant to the
sale to
Metmar Trading (Pty) Ltd, the Johannesburg attorneys of the IFC Group
wrote to the plaintiff’s Johannesburg attorney
advising that
their client was prepared, in principal, to discuss a settlement of
the claim, recording that Baobab Holdings (Pty)
Ltd “
had
no intention of giving up its lien and other rights”.
8.
Wilest heard rumours to the effect that arrangements were being made
by the IFC Group to dispose of some manganese held on its
behalf and
suspected that the same was true of the iron ore. It brought
interdict proceedings in the South Gauteng High Court on
31 January
2013 and obtained an interim order, subject to a
rule
nisi,
preventing the IFC Group
companies from alienating or otherwise disposing of the ore and
authorising the sheriff or his deputy
to attach the ore. The
rule
nisi
included a provision that the
iron ore be redelivered to Wilest against payment of an admitted
liability in the sum of R7,601,751.00
and the provision of security
for a further R9,000,000.00. When the sheriff in Saldanha Bay sought
to effect the attachment, it
became apparent that the iron ore is no
longer at the port, the mv “Hua Qiang” having sailed with
it on board on 1
February 2013.
9.
The mv “Hua Qiang”, however, called at the port of
Richards Bay en route to China. It was there that, pursuant to
the
in
rem
summons and an arrest warrant
issued on 6 February 2013, the defendant “cargo” was
arrested. The
in rem
summons alleged that Wilest was the “
owner
of the defendant cargo
”,
referred to the terms of the order granted by the South Gauteng High
Court on 31 January 2013 and alleged that the cargo
had, without the
authority of the plaintiff, been shipped on board the vessel for
carriage to China. It was then alleged that “
the
plaintiff is entitled to delivery of the defendant cargo,
alternatively to payment equivalent to the value of the defendant
cargo at the spot price of US$154/mt as at 4 February 2013, namely
R23,127,229.00 and to any damages suffered by the plaintiff[
which
damages are claimable from one or more of the Respondents in the said
application and possibly other persons at present not
identified by
the Plaintiff
’. The
in
rem
summons had annexed to it copies
of the order and the application papers in the application brought
before South Gauteng High Court
under Case No. 2013/03670. The
vindicatory claim was alleged to be a maritime claim as defined in
sub-sections 1(1)(aa), (dd) or
(ee) of the Act.
10. Having provided
security, the IFC Group companies brought this application to set
aside the arrest with the alternative of a
reduction in the amount of
the security.
11.
Mr Fitzgerald SC, who appeared together with Mr Wallis for the IFC
Group, submits that the test to be applied in regard to the
application to set aside the arrest is that set out in
The
Thalasini Avgi
1989 (3) SA 820
(A),
adapted to acknowledge the fact that the “claim” asserted
is vindicatory in nature. Mr Shaw QC, who appeared together
with Ms
Mills and Mr van Nieuwenhuizen for Wilest, contended in the heads of
argument that, because the arrest had been made by
virtue of a
summons, this test was not relevant and the IFC Group was required to
show that the summons was an irregular proceeding
in terms of
Admiralty Rule 20. The contention is to the effect that IFC Group
accordingly had to demonstrate that the issue of
the summons was
procedurally defective or that there was no basis in law for its
issue.
12.
In my view, (although it may ultimately not make a great deal of
difference in this case) the test set out in
The
Thaiassini Avgi
(supra) is
applicable. Whilst the judgment in
The
Thaiassini Avgi
related to an
application to set aside a security arrest secured
ex
parte
in terms of section 5(3) of
the Act, the test was approved (at page 834) on the basis that it had
been correctly applied in the
context of applications to set aside
in
rem
arrests procured in terms of
section 3(4) and (5) of the Act in
Transgroup
Shipping SA (Ptv) Ltd v Owners
of
the MV Kvoiu Maru
1984 (4) SA 210
(D) and
Transol Bunker BV v MV
Andrico Unity and others
1987 (3) SA 794
(C). The test was first approved in relation to
actions
in rem
(where the arrest is obtained ex
parte
and more often than not without the sanction of a judge) and then
extended to apply to security arrests.
13.
The test is accordingly that described in
The
Thaiassini Avgi
. Wilest, as the
party which obtained and seeks to sustain the arrest, must satisfy
the court:
13.1. on a balance of
probabilities (a) that its claim is a “maritime claim” as
defined in section 1 of the Act which
is enforceable in rem in terms
of the Act and (b) that the defendant “cargo” is the
property against or in respect
of which its vindicatory claim lies;
13.2.
prima
facie
(in the
sense that there is evidence which, if believed, would establish the
case) that it has a valid vindicatory claim, which
is to say that it
is the owner of the defendant “cargo" and entitled to
delivery thereof.
14. Of course, reference to
the nature of the onus is relevant only where the disputes between
the parties are factual in nature.
Where the question is a matter of
law, Wilest must satisfy the court that its contentions are correct
if it is to sustain the arrest.
The grounds upon the IFC
Group rely in challenging the arrest
15.
In challenging the arrest, the IFC Group initially contended that,
since the iron ore claimed by Wilest had been comingled with
other
iron ore purchased by Metmar Trading (Pty) Ltd, the whole had become
the property of Metmar Trading (Pty) Ltd (so that no
claim to
ownership could be advanced by Wilest) and, in any event, that
because it was no longer identifiable as distinct from
the other iron
ore with which it had been comingled, it could not be subject to a
vindicatory action. Those contentions could not
be sustained and were
ultimately not persisted in. If Wilest had been the owner of the
relevant quantity of iron ore, it would
have become a co-owner of the
comingled whole once its iron ore was comingled with other iron ore.
Mr Shaw referred in this regard
to
Grotius
2.8.8 in support of this proposition. See also
Voet
41.1.23, which is clear authority for the proposition that where
solids of the same class and owned by different persons are mixed
together so as to form an inseparable whole, that whole is co-owned
by the original owners in proportion to the share which belonged
to
each before the merger. As was pointed out by Mr Shaw, there could be
no objection in principle to the arrest of property even
if it is
co-owned by some third party. See also
Bort
Arresten
5.4. It is further not
relevant that the defendant in the
in
rem
action is described as a
particular quantity of cargo rather than as an undivided share of the
whole. The arrest is effectively
directed at Wilest’s divisible
(as opposed to “separable”) share of the whole, Gane's
Translation of
Voet
2.4.55 (v) reads as follows:
'(v)
Common property may be arrested to extent of debtor's ownership.
-
Hence
there can be no doubt that a creditor proposing to bring an action
rightly arrests a thing that is common to his debtor with
another
;
since the ownership of that
thing is in the debtor at least to the extent of an undivided share.
So much indeed is this so that
arrest is not prevented even by the
fact that perhaps the common thing is in its nature indivisible. In
such a case the whole thing
can appear to be burdened with the arrest
The other owner of the common thing can then get his damages in
having lost the use of
his share from the partner whose default gave
cause for the arrest, in a partnership action or one for the division
of common property
.'
See
also
The Wisdom (No 2)
SCOSA B 201 (D) at 214-215.
16. The IFC Group’s
challenge to the arrest was based upon the contentions that:
16.1.
Wilest was not the owner of the iron ore in question and was unable
in evidence to establish ownership even
prima
facie;
16.2.
The claim to ownership and the entitlement to vindicate the iron ore
was not a recognised maritime claim as defined in Section
1(1) of the
Act, so that no admiralty proceedings,
in
rem
or otherwise, were competent for
the enforcement of the claim; and
16.3.
In any event a vindicatory claim with regard to movable property
other than a ship was not recognised as enforceable by way
of an
action
in rem
so that no
in rem
summons ought to have been issued and no warrant authorising the
in
rem
arrest of the iron ore was
permissible.
17. Additional allegations
were made to the effect that there had not been proper compliance
with Admiralty Rule 4(2) and that,
at 6 February 2013, the
allegations in the Gauteng application papers (annexed to the
summons) were misleading and constituted
“misrepresentations”
which would justify the court setting aside the arrest in any event.
18. In the alternative, it
was contended that the security which had been required and provided
was excessive and that, if the arrest
was maintained, the amount of
the security should be reduced.
19.
I deal with these issues below.
Ownership of the iron
ore
20.
There is no dispute with regard to the fact that the quantity of
16,892.78 metric tons of iron ore to which Wilest lays claim
was
arrested pursuant to the
in rem
warrant. Wilest has accordingly demonstrated that the arrested
property is that “against or in respect of which” its
claim lies. The IFC Group submits, however, that Wilest has failed,
even
prima facie
,
to establish a claim to ownership of the iron ore in question. This
challenge was advanced on two basis, namely:
20.1.
it is contended that the evidence relied upon by Wilest to establish
its ownership of the iron ore does not in fact provide
a
prima
facie
basis for concluding that it
was at any time the owner of the iron ore; and
20.2.
it is contended that the terms of the agreement between Wilest and
Baobab Holdings (Pty) Ltd afforded the latter a
lien
and a contractual right of
parate
executie
which it exercised, validly
alienating the iron ore to Metmar Trading (Pty) Ltd.
21. With regard to the
former proposition, Wilest relies upon the following documentary
evidence as supporting the assertion that
it had acquired ownership
of the iron ore:
21.1. An “Irrevocable
Holding & Title Certificate” dated 9 October 2012 issued by
Timasani (Pty) Ltd and signed
by a Mr Andre J Posthumus, a director
Timasani (Pty) Ltd, which it is said demonstrates that the operator
of the mine recognised
that it held the iron ore on behalf of Wilest
as the owner thereof prior to itsremoval from the mine by Baobab;
21.2. Invoices issued by
Timasani (Pty) Ltd to Wilest and payments made by Wilest to Timasani
(Pty) Ltd in respect of iron ore;
and
21.3. documents prepared by
Timasani (Pty) Ltd recording the delivery of iron ore (identified as
part of an ordered 20,000 metric
tons) for the client Wilest to the
haulier Baobab in October and November 2012.
22. IFC Group submits that
the Irrevocable Holding & Title Certificate is not consistent
with the notion that Wilest had become
the owner of the iron ore and
points to the failure on the part of Wilest to reconcile the invoices
and the payments to the particular
quantity of iron ore and to the
Certificate.
23. The Certificate is not
entirely free of ambiguity. It is addressed to “Dear Sirs”
and reads as follows:
“
Helpebietjie
Mine, processed by Timasani (Pty) Ltd, hereby certifies that we have
been instructed by Wiiest Internationai Pvt Co.
Ltd to hold and
transfer title of the goods described below (hereinafter referred to
as (<the goods”) on your behalf and
to your order.
The
undersigned holds the 20 OOOmt of iron ore (Fe) listed on the Annex
attached hereto on Helpebietjie Mine processed by Timasani
(Pty) Ltd
free of payment claims, liens and/or attachments by any third
parties, including any and all creditors
,
and unencumbered to your
order.
The
stock listed on the attached sheet are pledged to Scipion LLP
...
London
...
who have full title to and
immediate right of possession of the material described beiow (free
from adverse interests) and deliverable
only in accordance with
written instructions from Scipion LLP.
We confirm that the Iron
Ore described below will be kept safe, secure, in good condition, and
segregated from any other goods and
clearly identified as your
property. We will also comply promptly with your instructions and
requirements so as to give full effect
with the purpose and intent of
this certificate.
You or your duly
appointed representative(s) have full right of access to inspect
and/or remove the goods and all rights necessary
for that purpose.
Helpebietjie Mine - Timasani (Pty) Ltd, remains bound by its delivery
obligation in respect of such iron ore.
[Description and
location of iron ore]
We are fully empowered
and entitled to issue this certificate and to undertake the
obligations contained herein.
This Irrevocable Holding
& Title Certificate shall be governed by and construed by laws of
Republic of South Africa and subject
to the nonexclusive
jurisdiction of the High Court of South Africa.
Any disputes arising out
of or in connection ....”
24. The two invoices,
addressed by Timasani (Pty) Ltd to Wiiest, are (a) dated 25 September
2012, in the sum of R1,693,320.00 and
described as relating to “Iron
Ore Provisional payment” and (b) dated 12 October 2012 in the
sum of R4,125.549.00 with
the description “Iron Ore ... first
provisional payment for 20 OOOmt ex Helpebietjie”.
25.
Payments were made by electronic fund transfer to Timasani (Pty) Ltd
in the sums of R1,000,000.00 on 14 August 2012; R1,000,000.00
on 30
August 2012; R1,749,739.19 on 5 September 2012; and R1,693,320.00 on
24 September 2012. The payment on 24 September 2012
was clearly
reflected in the invoice “Iron Ore Provisional payment”
in the same amount dated 25 September, the day
after the payment was
made. The net result is that the payments totalled R5,443,058.19
whereas the two invoices totalled R5,818,869.00.
The explanation
provided, namely that there were exchange- rate fluctuations, is not
entirely convincing, but then, at the level
of establishing a
prima
facie
case, it need not be.
26. It seems to me that the
“Irrevocable Holding & Title Certificate” was
intended to serve a dual purpose. It was
intended to record that the
iron ore was, at the time of the issue of the certificate, held for
Wilest but it was also to serve
as a “certificate of title”
so that, at least whilst still held at the mine, the delivery of the
certificate to a third
party would have the result that Timasani
(Pty) Ltd would hold the iron ore on behalf of the holder of the
“title certificate”.
It is true that there is some
confusion with regard to the reference to Scipion LLP having “full
title to and immediate right
of possession of the iron ore which is
said to be pledged to it, but it seems to me that the document is
consistent with the notion
that ownership in the iron ore in question
had passed to Wilest.
27.
There are two other pieces of evidence which I consider have a
bearing on the question of Wilest’s alleged ownership of
the
iron ore in question. It is common cause that Baobab Holdings (Pty)
Ltd uplifted the iron ore from the mine, clearly with the
consent of
Timasani (Pty) Ltd. There is nothing to suggest that the mine had any
difficulty with Wilest dealing with the ore as
its own property. In
addition, in the replying affidavit, Mr Patrick Driscoll of the IFC
Group referred to an e-mail of 29 November
2012 addressed by Mr
Willie Hough (of Wilest) to
inter
aiia
Mr Patrick Driscoll, a
representative of Scipion Capital and, apparently, a Mr Andre
Postumus, a director Timasani (Pty) Ltd and
the person who signed the
“Irrevocable Holding & Title Certificate”. In that
e-mail Mr Hough referred to the “first
batch of 20k mt mined
and put forward for loading and shipping of which product was paid
for by Wilest on presentation of stock
holding certificate”.
28. I
am satisfied that there is evidence, which if believed, would justify
the conclusion that Wilest had acquired ownership of
the iron ore.
Wilest has discharged the burden of establishing
prima
facie
that it had acquired ownership
of the iron ore.
29.
The second argument, whilst set out in the heads of argument, was not
ultimately advanced before me. The proposition that the
IFC Group had
alienated the ore relied, firstly, on the notion that the Baobab
standard trading terms and conditions applied to
the contract between
Baobab and Wilest (because of reference to standard trading
conditions in e-mail correspondence) notwithstanding
that the
standard terms had been extensively altered by Wilest and no final
agreement had been reached with regard to those alterations.
It was
further dependent on the notion that the IFC Group could legally
transfer ownership to Metmar, which pre-supposes a valid
exercise of
the
parate executie
provision in its standard trading terms. Whilst such a clause is
enforceable, it can only be enforced after resort to, and authority
from, a court. (See in this regard
Juqlal
NO and Another v
Shoprite
Checkers (Ptv) Ltd t/a OK Franchise Division
2004 (5) SA 248
(SCA) at paragraph [11] and
SA
Bank of Athens Ltd v van Zvl
2005
(5) SA 93
(SCA)). The IFC Group had plainly not complied with the
constitutional requirement for the exercise of the right to sell
under
the
parate executie
provision.
It follows that a conclusion with regard to the incorporation of the
relevant clause is not required.
A
maritime claim enforceable
in
rem
against the iron ore
30.
It is convenient to approach the two related issues, namely (a)
whether Wilest’s claim is a Maritime claim and (b) whether,
if
so, it is enforceable
in rem
against the iron ore, in reverse order. I deal firstly therefore with
the question as to whether the Act makes provision for a
remedy in
the form of a vindicatory action
in
rem
against a plaintiff’s own
property consisting in goods or “cargo” on board a ship.
31.
Sections 3(3) and (4) of the Act deal with actions
in
rem.
The provisions read as follows:
“
(4) Without
prejudice to any other remedy that may be available to a claimant or
the rules relating to the joinder of causes of
action a maritime
claim may be enforced by an action
in
rem -
(a) if the claimant has a
maritime lien over the property to be arrested; or
(b)
if the owner of the property to be arrested would be liable to the
claimant in an action
in personam
in respect of the cause of action concerned.
(5)
An action
in rem
shall be instituted by the arrest within the area of jurisdiction of
the court concerned of property of one or more of the following
categories against or in respect of which the claim lies:
(a) the ship, with or
without its equipment, furniture, stores or bunkers;
(b) the whole or any part
of the equipment, furniture, stores or bunkers;
(c) the whole or any part
of the cargo;
(d) the freight;
(e) any container, if the
claim arises out of or relates to the use of that container in or on
a ship or the carriage of goods by
sea or by water otherwise in that
container;
(f) a fund.”
32.
It has been held that section 3(4) does not create a
numerus
clausus
of actions
in
rem
and that a vindicatory claim by
an alleged owner of a ship may be enforced by action
in
rem
against the ship in question.
That was the conclusion reached by Bristowe J in
Dias
Compania Naviera SA v mv Al
Kaziemah
& others
1994 (1) SA 570
(D) and
by Howie J in
Great River
Shipping Inc v Sunnvface Marine Ltd
1994 (1) SA 65
(C) (decided in 1989 and 1991 respectively).
33.
It has, however, been held, by Blignault J, in
The
Atlantic Pride
SCOSA B224 (C) that
the remedy of an action
in rem
to enforce a vindicatory claim is limited to an action
in
rem
against a ship.
34.
In
Great River Shipping Inc
(Supra), Howie J concluded that:
34.1.
The provisions of section 6(1 )(a) of the Act, in rendering English
Law applicable in regard to “any
matter
in respect of which a court of admiraity of the Repubiic referred to
in the Colonial Courts of Admiralty Act, 1890, of the
United Kingdom,
had jurisdiction immediately before the commencement of this Act
...
in
so far as that law can be applied
’
imported
all aspects of English Admiralty Law not repugnant to the Act, and so
included a vindicatory action
in
rem
in
respect of a ship; and
34.2.
In any event, section 3(6) of the Act (which relate to proceedings
in
rem
against an associated ship) in
the form in which it appeared prior to its amendment in 1992,
recognised the existence of the remedy
of an action
in
rem
in respect of a claim relating
to ownership of a ship.
35.
In
the Atlantic Pride
,
the plaintiff, alleging that it was the owner of sonar equipment
installed on the fishing vessel sought to vindicate the equipment
by
way of an
in rem
action in which the equipment was cited as the defendant. Blignault J
concluded that, whilst English law afforded the remedy of
an action
in rem
in respect of a vindicatory claim, the remedy of an
in
rem
action was available only in
respect of a claim to ownership and possession of a ship.
36.
Mr Fitzgerald argues that, even if Wilest’s claim can be
categorised as a martime claim, it is nevertheless not enforceable
by
action
in rem
against the iron ore and that, in those circumstances, the arrest
falls to be set aside. In support of that argument, Mr Fitzgerald
argues that the available authority makes it clear that the
vindicatory action
in rem
in English Admiralty law was expressly restricted to an action
against a ship. It did not extend to any other movable property.
He
refers,
inter aiia,
to
Roscoe: Admiralty Jurisdiction and
Practice
(1987) 5th Edition at pages 37 and 38, which reads as follows:
"Under
ordinary circumstances, when the owner of a personal chattel is
wrongfully deprived of it, his only remedy is a personal
action
against the wrongdoer, but where a ship is wrongfully detained, the
ship itself] by Admiralty process, may be at once arrested
and
proceeded against, and a specific decree obtained, restoring it to
the owner's possession. This jurisdiction is of a highly
beneficial
nature, for unless it were exercised, a shipowner might in many cases
sustain serious injury, and be without remedy
.
If the shipowner could only
sue the wrongdoer, the latter might be unable to pay the value of the
ship, and might, pending the suit,
send it out of the country. Where
then the owner is deprived of the possession of his ship he may
institute proceedings in Admiralty
to have her delivered over to him
and on application at the Admiralty Registry, he may at once obtain a
warrant for her arrest
.”
37. An important footnote
to the above passage (relating to the “ordinary circumstances”
in the opening portion of statement)
is to the effect that:
“
The plaintiff in
an action at common law for the detention of any chattel could not
before the passing of a modern statute obtain
execution for the
return of the chattel, without giving the defendant the option of
retaining such chattel upon paying its value.
The Common Law
Procedure Act 1854 s 78.
38.
It is not suggested by Mr Shaw for Wilest that the above quoted
statements from Roscoe do not reflect the English Admiralty
Law as
referred to in section 6(1 )(a) of the Act. Mr Shaw contended,
however that (a) the iron ore in question was “cargo”
and
therefore to be distinguished from “a personal chattel”
as referred to in Roscoe; (b) as is evident from section
3(5) of the
Act, actions
in rem
are permissible against cargo as opposed to “any chattel”.
In support of the proposition that English Admiralty practice
recognised the availability of the procedure of an action
in
rem
in respect of vindicatory
proceedings with regard to property other than a ship, Mr Shaw
referred to a passage from
Coote’s
Admiralty Practice
(1860). At page
12 of that work the author, in dealing with warrants of arrest, said:
“
The action having
been entered, and the plaintiffs affidavit filed, as I have shown, a
warrant will be granted under the seal of
the Court to arrest the
res.
In causes of possession
and bail for safe return, the warrant is moved for by counsel before
a surrogate. The warrant is addressed
either to the Marshal or ... It
directs and authorises them to arrest or cause to be arrested the res
(wherever it may be), and
the same so arrested to keep under safe and
secure arrest until they shall receive further orders, and also to
cite at the premises
all persons in general having or pretending to
have any right, title or interest therein, to appear on a day named
to answer to
the plaintiff in his cause.”
39.
whilst the general reference to the “res” in the above
quoted passage may be regarded as lending support for Mr
Shaw’s
contention, it seems to me that it cannot be regarded as overriding
the clear statement of the position as contained
in
Roscoe
.
There is, of course, also the absence of any evidence that a
vindicatory action
in rem
has been successfully instituted in England and Wales (or any of the
jurisdictions in which in which Colonial Courts of Admiralty
were
established) in relation to cargo. The position appears to be that,
in English Admiralty Law, a vindicatory action
in
rem
against property alleged to be
owned by the claimant was expressly restricted to an action
in
rem
against a ship. Blignault J in
the
Atlantic Pride
apparently approached the matter on the basis that the “exception”
allowed in English law with regard to a vindicatory
claim enforced
in
rem
against a ship should be
construed narrowly, so that it would not extend to the “equipment”
of a ship (which is property
which is also capable of being arrested
in rem
,
as distinct from the ship, in terms of section 3(5)(b) of the Act).
40.
In those circumstances, the remedy of a vindicatory action
in
rem
against cargo cannot be found In
section 6(1 )(a) of the Act. No other source for such a remedy is
apparent and I accordingly conclude
that an action
in
rem
was not a remedy available to
Wilest as a means of vindicating the iron ore in question. It follows
that the arrest was not authorised
by the Act and cannot stand.
41. It is consequently not
necessary to deal with the (ultimately complex) question as to
whether Wilest’s vindicatory claim
is a maritime claim, or the
other issues which were argued before me.
42. The only remaining
issue relates to costs. The applicants (the IFC Group of companies)
have plainly been successful. Ordinarily
that fact would entitle the
applicants to an order that the respondent pay the applicants’
costs, and in this case of the
costs consequently upon the employment
of two counsel.
43.
The applicants go further and contend that costs should be awarded in
their favour on the punitive scale as between attorney
and client.
They complain,
inter alia,
that the security demanded in order to permit the vessel to sail was
excessive and that the respondent’s unreasonable demands
were
designed to compel a commercial settlement. For the reasons set out
below, I consider that it is more appropriate that no
order is made
as to costs.
44. I have a limited
discretion to deprive the applicants of their costs and, in my view,
that is a discretion which I ought properly
to exercise. My reasons
are briefly the following.
45. The respondent could,
adopting a different procedure, have secured the attachment of the
iron ore. The applicants have succeeded
on the basis of a challenge
to the procedure adopted by the respondent. The applicants had no
right to dispose of the iron ore
and had plainly acted unlawfully in
doing so. The iron ore was being held on behalf of the respondent
and, as dealt with above,
the applicants’ disposal thereof was
accompanied by misleading statements and proposals communicated to
the respondent’s
attorneys. The unavoidable conclusion is that
the applicants’ representatives did not wish the respondent to
become aware
of the fact that the iron ore was being sold and shipped
out of the country. I naturally do not suggest that the applicants’
attorneys were aware of the position.
46.
The applicants chose to take the law into their own hands. Their
surreptitious behaviour suggests that they knew, or at least
must
have suspected, that the respondent could secure a court order
preventing their actions had it obtained knowledge thereof
in time.
The amount of the security sought by the respondent may well have
been overstated (although not to the extent to which
the applicant
suggest), but I do not consider that this alters the approach which I
should adopt. I consider that I am fully justified
in depriving the
applicants of their costs. I refer in this regard to the decision in
Abbott v
von Theleman
1997 (2) SA 848
(C) at 854B-D.
47.
In the circumstances, the order I make is the following: The deemed
arrest
in rem
under case number A 18/2013 be and is hereby set aside.
S.
R. MULLINS AJ
APPEARANCES:
APPLICANTS’
COUNSEL: M J Fitzgerald SC
P
J Wallis
Instructed
by Shepstone & Wylie
(Q
van der Merwe)
RESPONDENT'S
COUNSEL: D J Shaw QC
J
F Nicholson
H
P van Nieuwenhuizen
Instructed:
by van Velden Pike
(A
Govender)
Date
of hearing: 25 March 2013.
Date of judgment delivered
: 30 May 2013.