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[2013] ZAKZDHC 62
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CH Offshore Ltd v PDV Marina SA and Others (A113/2013) [2013] ZAKZDHC 62 (5 November 2013)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL LOCAL
DIVISION DURBAN
Case no A113/2013
REPORTABLE
Name of Ship: MT
Rio
Caroni
(previously the MT
Amarylis
)
In the matter between:
CH OFFSHORE LTD
........................................................................................
Applicant
And
PDV MARINA SA
................................................................................
First
Respondent
THE RIGHT, TITLE AND
INTEREST OF
THE FIRST RESPONDENT
IN AND TO
THE MT
RIO CARONI
INCLUDING ALL
BUNKERS, LUBRICATING
AND OTHER OILS,
SPARE PARTS,
PROVISIONS
AND OTHER EQUIPMENT
............................................................
Second
Respondent
ALCOT
SHIP MANAGEMENT CO
....................................................
Third
Respondent
ASTILLEROS DE
VENEZUELA CA
...............................................
Fourth
Respondent
THE MASTER OF THE MT
RIO CARONI
..........................................
Fifth
Respondent
Order:
(i) The application for
the reconsideration of the order of 5 October 2013 succeeds.
(ii) The right, title and
interest of the first respondent in and to the MT Rio Caroni is
released from the arrest referred to in
the order.
(iii) Paragraphs 7 and 8
of the order are recalled.
(iv) The applicant is
ordered to pay the costs of the application for the reconsideration
of the order, including those consequent
on the employment of two
counsel.
___________________________________________________________________
Judgment
Date: 05 November 2013
____________________________________________
_______________________
Ploos van Amstel J
[1] This is an
application for the reconsideration of an order made in terms of
section5(3) of the Admiralty Jurisdiction Regulation
Act 105 of 1983
(the AJRA) for the arrest of certain rights in a ship. The
respondents are in terms of Uniform Rule 6(12)(c) entitled
to have
the order reconsidered as it was made pursuant to an urgent
application and in their absence.
[2] It is the usual
practice for applications for security arrests to be brought
ex
parte.
See
Cargo Laden and Lately Laden on Board the MV
Thalassini Avgi v MV Dimitris
1989 (3) SA 820
(A) at 833G. In an
application for a reconsideration of the order the applicant who
obtained the order for the arrest retains the
onus of satisfying the
court that it was entitled to the order. This is also the case where
an application is brought to set the
arrest aside. See
MV
Orient
Stride:
Asiatic Shipping Services Inc v Elgina Marine Co Ltd
[2008] ZASCA 111
;
2009
(1) SA 246
(SCA) para 5.
[3] The order authorised
and directed the arrest of the second respondent for the purpose of
providing security to the applicant
for its claims against the first
respondent for payment of hire and other charges arising out of the
charter of vessels by the
first and fourth respondents, which claims
the applicant has advanced or intends to advance in arbitration and
High Court proceedings
in London.
[4] The first
respondent,PDV Marina SA, is the owner of the property which was
arrested, with the exception of the bunkers, which
have been
released. It is a company based in Venezuela and is a wholly-owned
subsidiary and the shipping arm of Petroleos de Venezuela
SA, which
is Venezuela’s state oil company. I shall refer to the first
respondent as PDVM.
[5] The second respondent
is described in the founding affidavit as ‘the right, title and
interest of PDV Marina SA in and
to the MT Rio Caroni, including all
bunkers, lubricating and other oils, spare parts, provisions and
other equipment’.
[6] The MT Rio Caroni is
a crude oil tanker which is lying at anchor outside Durban harbour.
The right which the applicant sought
to arrest is said in the
founding affidavit to arise from a bareboat or demise charter-party
over the vessel. The applicant contends
that these are real rights
which are located wherever the vessel is, and therefore susceptible
to arrest by this court when the
vessel is here. PDVM’s
contention is that its rights are contractual and not located within
the jurisdiction of this court.
I shall return to these submissions
in due course.
[7] The background is
briefly as follows. The applicant is CH Offshore Limited, a company
in Singapore which provides offshore support
services. In January
2008 PDVM chartered two vessels from the applicant. They were both
anchor-handling tugs and supply vessels.
Both charters were for a
period of four years and in each case the daily rate was USD 47 600.
In March 2008, with the agreement
of the applicant, PDVM assigned the
charter-parties to the fourth respondent, a company in Venezuela, on
the basis that PDVM would
remain liable, with the fourth respondent,
for payment of the hire charges.
[8] Within a few months
after delivery of the tugs the fourth respondent started to default
with the payment of the hire charges.
They were either paid late or
not at all. When the tugs were eventually redelivered to the
applicant in January 2013 its claim
for arrear hire, additional hire
and demobilisation charges exceeded USD 50million.
[9] The claim was not
paid and the applicant instituted proceedings in London against PDVM
and the fourth respondent. This is the
claim in respect of which it
sought security by the arrest of the second respondent.
[10] Section 5(3)(a) of
the AJRA provides as follows:
‘
A
court may in the exercise of its admiralty jurisdiction order the
arrest of any property for the purpose of providing security
for a
claim which is or may be the subject of an arbitration or any
proceedings contemplated, pending or proceeding, either in
the
Republic or elsewhere, and whether or not it is subject to the law of
the Republic, if the person seeking the arrest has a
claim
enforceable by an action
in
personam
against
the owner of the property concerned or an action
in
rem
against
such property or which would be so enforceable but for any such
arbitration or proceedings.
’
[11] It was not contended
before me that the arrest of the movables on board the vessel was not
in order, save for the bunkers,
which are owned by the current
time-charterer of the vessel and which have been released by
agreement. The application for a reconsideration
of the arrest
relates only to PDVM’s interest in the vessel and I will make
no further reference to the movables.
[12] Although it is
customary to refer to a party’s ‘right, title and
interest’ in something, we are really concerned
with rights.
Harms JA said in
MV
Snow Delta
: Serva Ship Ltd v Discount
Tonnage Ltd
2000 (4) SA 746
(SCA) at 753B, that the phrase ‘right,
title and interest’ can only refer to rights because the law
does not protect
titles and interests that do not translate into
‘legal’ rights.
[13] PDVM does not own
the vessel. It is the charterer of the vessel in terms of a bareboat
charter-party which incorporates a contract
of purchase and sale on a
hire-purchase basis. What needs to be considered is the nature of its
rights in and to the vessel, where
these rights are situated and
whether they are susceptible to arrest for the purposes of providing
security. I should mention that
although the second respondent is
described in the founding affidavit as ‘the right, title and
interest of PDVM in and to
the MT Rio Caroni’ it is said
elsewhere in the affidavit that the application for the arrest
relates to PDVM’s right,
title and interest ‘in the
bareboat charter of the vessel and in and to the vessel itself by
virtue of its physical and legal
possession thereof…’.
It was not contended by counsel for the applicant that the
application for the arrest related
to the contractual rights of PDVM
in the charter-party. The matter was argued on the basis that those
contractual rights are not
located here and that what was arrested
were PDVM’s rights in and to the vessel, which counsel referred
to as possessory
rights.
[14] Both counsel
referred in argument to The
MV Snow Delta
. In that case an
order was obtained, on an ex parte basis, for the attachment of the
respondent’s possessory right, title
and interest in the
vessel, including any possessory right which may arise from its
possession and control of the vessel in terms
of a demise
charter-party. It later appeared that the respondent had chartered
the vessel in terms of a time charter-party and
not a demise
charter-party, with the result that on the return day the rule nisi
was discharged. On appeal the Full Court overturned
the judgment and
confirmed the rule nisi in other terms. What was then attached was
‘all of [SSL’s] right to and interest
in the use and
employment of the MV Snow Delta… which [SSL] might have by
virtue of a time charter-party concluded between
[SSL] and the said
vessel’s owner…’
[15] On appeal to the
Supreme Court of Appeal the order of the Full Court was set aside and
the order which discharged the rule
was reinstated. The basis for the
decision was that the Full Court had failed to distinguish between
the personal right against
the debtor and the vessel which was the
subject-matter of the agreement. Harms JA said the charterer’s
rights in terms of
the time charter-party were personal rights and
their
situs
was where the debtor (the disponent owner)
resided. They were therefore not within the jurisdiction of the South
African courts
and could not be attached here.
[16] I have to determine
whether the position is different in the case of a demise
charter-party, where the charterer has control
and possession of the
vessel. Some of the remarks in the
MV Snow Delta
suggest that
the position may be different. Harms JA said the following at page
750E-F:
‘
This
appeal is concerned essentially with the question whether the rights
of a charterer (the hirer) of a ship in terms of a time
charter-party
can be said to be “property” which is located wherever
the ship may be from time to time. A time charter-party
does not
entitle the charterer to the possession and control of the ship; in
other words, the charterer has no real rights in relation
to the ship
but only contractual rights against the owner.’
What was attached at the
ex parte
hearing was 'all of [SSL’s] possessory right,
title and interest in the MV Snow Delta (the vessel) currently lying
alongside
at the port of Cape Town, including any possessory right
which may arise from [SSL’s] possession and control of the
vessel
in terms of a demise charter-party concluded between [SSL] and
the vessel’s owners’.
At 750 I-J Harms JA said:
‘
It
will be immediately apparent to the reader that the order related to
the attachment of real rights flowing from a demise charter-party
(the charterer under a demise charter-party being regarded as the
owner of the ship during the term of the charter) and not from
contractual rights flowing from a time charter-party. The reason for
this was that at the time of the launch of the application
DTL
believed that SSL had possession of the vessel in terms of a demise
charter-party’
.
[17] The nature of the
demise charterer’s rights and where they were located was not
in issue in the appeal and what Harms
JA said in this regard was
obiter
. He was obviously correct in saying that the
time-charterer had no real rights in the vessel, but what I must
consider is the position
of a demise-charterer in the context of an
arrest in terms of s 5(3).
[18] In a different
context section 1(3) of the AJRA provides that for the purposes of an
action
in rem
, a charterer by demise shall be deemed to be, or
to have been, the owner of the ship for the period of the charter by
demise. Section
3(4) provides that a maritime claim may be enforced
by an action
in rem
if the claimant has a maritime lien over
the property to be arrested or 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. The effect of these
sections appears to be that the owner of cargo carried on the
ship
can enforce a claim for the loss of his cargo by way of an action
in
rem
against the ship if the demise charterer would be liable to
him in an action
in personam
. In other words, the ship may be
sold in execution to satisfy a debt for which the shipowner was not
liable. He is however invariably
indemnified against his loss by a
clause in the charter-party. Section 1(3) applies to actions
in
rem
instituted in this country. It does not apply to arrests for
the purpose of providing security for claims in proceedings
elsewhere.
A security arrest in terms of s 5(3) is not a proceeding
in rem
. Wallis says in
The Associated Ship and South
African Admiralty Jurisdiction
, at 309, that it is correctly
described as a ‘stand alone’ procedure unconnected with
any action before a South African
court. He refers to
Shipping Law
and Admiralty Jurisdiction in South Africa,
where Hare refers at
84 to the procedure as ‘a stand-alone entitlement to arrest
maritime property for security and for security
only’. Also see
MV
Rizcun Trader
(4); MV
Rizcun Trader
v Manley
Appledore Shipping Ltd
2000 (3) SA 776
(C) at 785G.
[19] In the context of an
arrest in terms of s5(3), the deeming provision in section 1(3) does
not apply. It is also not what Harms
JA was referring to in
The
Snow Delta
. When the judgment was delivered subsection (3) was
not yet in existence. It was added to section 1 by section 10 of Act
65 of
2000, the date of commencement of which was 20 June 2003. The
expression that the demise charterer is regarded as the owner of the
ship during the term of the charter, to which Harms JA referred, is
encountered in several reported cases and in academic writing.
But
what does it mean?
[20] Let us first
consider the position of the owner of a shipwhich has been
demise-chartered to a third party. He does not transfer
ownership of
the vessel to the demise-charterer.That much is clear from the terms
of demise charter-parties. There is no intention
to pass or receive
ownership. The owner does not disappear for the duration of the
charter. He retains the right to demand that
the vessel be maintained
and kept in a seaworthy condition. If the hire is not paid he can
terminate the charter and take the ship
back. In a situation of
casualty the master has authority to act on behalf of the owner in
connection with the salvage, although
he is not his servant, and the
owner will be liable to the salvors.See
CE Heath & Co (Marine)
Ltd v Crimson Navigation Corporation SA
1988 (1) SA457 (D) at
460G. It seems plain that the vessel remains an asset in the estate
of the owner.
[21] What then does it
mean to say that the demise charterer is regarded as the owner of the
ship for the duration of the charter?
And how is this applied in
practice?
[22] In this context
there is an important distinction between bareboat or demise charters
on the one hand and time and voyage charters
on the other. Shearer J
put it as follows in
CE Heath & Co (Marine) Ltd
at 460D-E:
’
That
the charter is on demise means that there is a complete handing over
of possession of the vessel to the charterers so that
no element of
possession remains with the owner. This distinguishes it from a time
or voyage charter in which what is let to the
charterer is the
services of vessels, crew and master. The owner remains in
possession. In the demise charter, since possession
is given to the
charterer, generally speaking the master and crew are the employees
of the charterer and not of the owner of the
vessel.
’
[23] It seems to be the
transfer of possession and control of the vessel and the fact that
the demise charterer employs the master
and crew which form the basis
of the expression that the charterer ‘becomes’, or ‘is
regarded’ as ‘the
owner’ or the ‘
de facto
owner’ of the ship.
[24] In
Sandeman v
Scurr
(1866) LR 2 QB 86
, Cockburn CJ said in a demise charter
‘the charterer becomes, for the time, the owner of the vessel,
the master and crew
become to all intent and purposes his servants,
and through them the possession of the ship is in him’.
[25] In Halsbury’s
Laws of England
4 edpara 403 it is said that in the case of a
demise charter-party the charterer ‘becomes for the time being
the owner of
the ship; the master and crew are, or become to all
intents and purposes, his employees, and through them the possession
of the
ship is in him. The owner, on the other hand, has divested
himself of all control either over the ship or over the master and
crew,
his sole right being to receive the stipulated hire and to take
back the ship when the charterparty comes to an end. During the
currency of the charterparty, therefore, the owner is under no
liability to third persons whose goods may have been conveyed upon
the demised ship or who may have done work or supplied stores for
her, and those persons must look only to the charterer who has
taken
his place’.
[26] In
The Law of
Admiralty,
Gilmore and Black, 2 ed, an American text book, the
learned authors say the following at 242:
‘
The
most important consequences of the distinction between the demise and
the other forms of charters flow from the fact that the
demise
charterer is looked on as the owner of the vessel
pro
hac vice
.
In consequence, he qualifies as the
“‘
owner”
for purposes of the statutes relating to limitation of liability; he
can thus limit under those statutes where the
voyage and time
charterers clearly cannot. Far less palatable are some of the other
consequences of standing in the owner’s
position. In general,
all in personam liabilities arising out of the ship’s operation
are brought home to the demise charterer.
It may be of immense
economic importance to him that he, as owner, is the warrantor of
seaworthiness of the vessel to seamen who
work aboard her, and that
he in consequence may be held liable for personal injuries suffered
as a result of breach of the absolute
duty to provide a safe place to
work and safe implements to work with. He is the “employer”
for purposes of personal
injury liabilities to seamen under the Jones
Act, since the crew is hired by him. The vessel, so far as third
persons are concerned,
is his vessel, and the men are his men; such
of their defaults as are attributable to the owner and employer under
respondeat superior
doctrines are his to answer for.
’
[27] In Payne and Ivamy,
Carriage of Goods by Sea
, 12 ed, Professor Ivamy says at 8-10
that a charter-party by demise is a lease of the vessel. He says:
‘
The
master and crew are the charterer’s servants, and the
possession and control of the ship vest in him. Consequently, the
shipowner has no responsibility in connection with goods shipped
while the vessel is thus leased
.
’
[28] Davis says in
Bareboat Charters
,2 ed 2005, at 1, that a charter by demise
operates as a lease of the ship pursuant to which possession and
control passes from
the owners to the charterers. He says it is usual
for the owners to supply their vessel ‘bare’ of officers
and crew,
in which case the arrangement may correctly be termed a
‘bareboat’ charter, although the phrases bareboat charter
and
demise charter are commonly used interchangeably. He says the
charterers become for the duration of the charter the de facto
‘owners’
of the vessel, the master and crew act under
their orders, and through them they have possession of the ship.
[29] Derrington and
Turner,
The Law and Practice of Admiralty Matters,
Oxford
University Press, 2006, at 87, refer to a demise charter as a
contract of hire of the ship, under which possession of the
ship
passes to the charterer. They point out that the words ‘beneficial
owner’ in s21 of the Supreme Court Act of 1981
refers to title
rather than possession of the ship and refer to
The I Congreso
[1977] 1 Lloyd’s Rep 536 where Goff J held that the words
‘beneficially owned’ in the previous Act referred only
to
cases of equitable ownership, whether or not accompanied by legal
ownership, and were not wide enough to include cases of possession
or
control without ownership, however full and complete such possession
and control may be.
[30] In Tetley,
Marine
Cargo Claims,
14 ed vol 1 at 578-9 it is said that a charterer by
demise generally replaces the shipowner and is often referred to as
an owner
pro hac vice
in the United States. He says the demise
charterer replaces the shipowner as carrier, and this is confirmed by
the signing of the
bills of lading by the master or his authorised
agent, who does so as agent of the demise charterer. The demise
charterer would
thus be liable as a defendant in a cargo claim in the
same way as a shipowner, and in some circumstances the owner and the
demise
charterer may be held liable jointly.
[31] In
The Giuseppe
di Vittorio
[1998] 1 Lloyd’s Rep 136 at 156, Evans LJ said:
‘
What
then is the demise charter? Its hallmarks, as it seems to me, are
that the legal owner gives the charterer sufficient of the
rights of
possession and control which enable the transaction to be regarded as
a letting – a lease, or demise, in real property
terms –
of the ship. Closely allied to this is the fact that the charterer
becomes the employer of the master and crew. Both
aspects are
combined in the common description of a “bareboat” lease
or hire arrangement’.
[32] In
The Chevron
North America
[2002] 1 Lloyd’s Rep 77 [HL] the vessel
berthed at a terminal in Shetland for the purpose of loading crude
oil from the terminal
into her cargo tanks. The terminal was owned
and operated by BP Exploration Operating Co Ltd. The vessel’s
mooring winches
rendered during heavy weather and she moved off the
berth, causing damage to the loading arms on the jetty to which she
was attached.
In the action instituted by BP it relied,
inter
alia
, on section 74 of the Harbours, Docks and Piers Clauses Act,
1847, which provided inter alia:’…The owner of every
vessel… shall be answerable… for any damage done by
such vessel… to the harbour, dock, or pier or the quay
or
works connected therewith…’ One of the issues on appeal
was whether, where a vessel is hired out under a bareboat
demise
charter-party, section 74 imposes liability on the registered owner
of the vessel or on the charterer. The Law Lords were
unanimous in
holding that the word ‘owner’ in the section was a
reference to the registered owner of the vessel, and
did not include
a bareboat charterer. At 101 Lord Hobhouse referred to the judgment
of Goff J in
The I Congreso
where he said the following at
561:
‘
It
is true that a demise charterer has in the past been described
variously as “owner pro hac vice”…or as a person
who is “for the time the owner of the vessel”…or
as a person with “special and temporary ownership”…
I doubt however if such language is much in use today; and its use
should not be allowed to disguise the true legal nature of a
demise
charter… A demise charterer has, within limits defined by
contract, the beneficial use of the ship; he does not have
the
beneficial ownership as respects all the shares in the ship
.
’
Lord Hobhouse said the
importance of this judgment is that it demonstrates the limits of
basing arguments upon the use of the expression
‘owner pro hac
vice’ and recognises that if modern legislation is intended to
use the word ‘owner’ as meaning
demise charterer it is
likely to say so expressly. The
I Congreso
was followed and
applied in
The Father Thames
[1979] 2 Lloyd’s Rep 365
in preference to
The Andrea Ursula
[1971] 1 Lloyd’s Rep
145.
[33] I am conscious of
the fact that these decisions were decided in a context different
from the present one. They nevertheless
demonstrate the point that a
demise charterer does not during the period of the charter step into
the shoes of the owner in all
respects, and that the statement that
the charterer ‘becomes, for the time, the owner of the vessel’
should not be
taken literally.
[34] I think this
approach is supported by the discussion of the demise charter-party
in Hare
Shipping Law and Admiralty Jurisdiction in South Africa,
at
580 and further. The learned author says at 581 that as a lease, a
charter by demise carries with it the general consequences
of a
contract of letting and hiring of movables. And these would derive
from the South African common law of letting and hiring,
and not from
the contract of carriage. At 583 he lists the likely legal
consequences of the hiring of a vessel by demise charter,
all of
which appear to me to be consistent with what I have said in this
regard.
[35] The statement that
the demise charterer is regarded as the owner seems to me to refer
generally to his obligations arising
out of the operation of the
vesseland as the employer of the master and crew, rather than to his
rights in the vessel. The reality
is that he leases the vessel.
Hisrights flow from the charter-party. Whatever rights he may have in
and to the vessel are not based
on his ownership or deemed ownership
of it.
[36] It remains to
consider what rights the demise charterer has in and to the vessel
and where the situs of those rights is.
[37] The charter-party in
question is headed ‘Bareboat Charter Party
(Bareboat-Hire-Purchase). It was concluded on 27 May
2013. The owners
are Noah Maritime Company of Marshall Islands. Clause 2records that
in consideration of the hire the owners had
agreed to let and the
charterers had agreed to hire the vessel for a period of 72 months on
a bareboat-hire-purchase basis. Clause
6 records that the vessel
shall be employed worldwide in lawful trades for the carriage of
suitable lawful merchandise. Clause
9 records that the charterers
would at the time of delivery take over and pay for all bunkers,
lubricating oil, unbroached provision,
paint, ropes and other
consumable stores (and spare parts if any) on board in the vessel.
Clause 10(a) records that during the
charter period the vessel shall
be in the full possession and at the absolute disposal for all
purposes of the charterers and under
their complete control in every
respect. Clause 10(b) records that the charterers shall at their own
expense and by their own procurement
man, victual, navigate, operate,
supply, fuel and, whenever required, repair the vessel during the
charter period. It also records
that the master, officers and crew of
the vessel shall be the servants of the charterers for all
purposeswhatsoever even if for
any reason appointed by the owners.
Clause 13(a) records that during the charter period the vessel shall
be kept insured by the
charterers at their expense against hull and
machinery, war and protection and indemnity risks. Clause 28(a)
records that the owners
shall be entitled to withdraw the vessel from
the service of the charterers and terminate the charter with
immediate effect if
the charterers fail to pay hire in accordance
with the charter party and clause 29 records that in that event the
owners shall
have the right to repossess the vessel from the
charterers. The charter party provides for the purchase of the vessel
by the charterers
on a hire - purchase basis with a down payment of
USD 13million, charter hire at the rate of USD 24 800 per day for a
period of
72 months and a final purchase payment of USD 9,75million.
Clause 48 records that on expiration of the charter the vessel shall
be taken over by the buyers, provided that they have fulfilled their
obligations in terms of the contract.
[38] What then are the
possessory rights in the vessel which have been arrested? A
distinction is drawn between the right to possess
something (the
ius
possidendi
) and the entitlements and privileges which flow from
the fact of possession (the
ius possessionis
). A
ius
possidendi
can flow from either a personal right, like a
contract, or a real right (eg ownership). On the other hand, a
ius
possessionis
denotes all powers and privileges flowing from the
mere basis of being in possession of a thing. See Silberberg and
Schoeman,
The Law of Property
, 5 ed at 273. They say an owner,
for example, will have both a
ius possidendi
and a
ius
possessionis
, whereas a thief will only have the latter. A
ius
possidendi
is thus not a requirement for acquiring possession,
nor is it a requirement for the protection thereof. They point out
that the
protection of possession by way of the
mandament van
spolie
does not distinguish between a
ius possidendi
and a
ius possessionis
. Instead, one of the consequences of
possession is that the possessor has to be protected against
dispossession. The learned authors
say that an age-old debate centres
around the question whether possession should be regarded as a
factual situation or as a right,
more particularly a real right. They
say the question is mainly of academic interest as there is agreement
as to the various legal
consequences of possession. Sonnekus and
Neels,
Sakereg Vonnisbundel
, 2 ed at 125-6 point out that if
possession constituted a real right it should be an asset in the
estate of the possessor. But
it cannot be said that the
ius
possessionis
of a thief is an asset in his estate. They say that
recognising mere possession as a real right would also have the
consequence
that there cannot be unlawful possession of a thing,
which is not the case. In an article in 1988
Tydskrif vir
Hedendaagse Romeins-Hollandse Reg
276 AJ Van der Walt provides an
interesting insight into the debate, which dates back to Roman times.
He says with reference to
the impossibility of an ‘unlawful
right’:
‘
Hierdie
voorbeeld bewys dat dit onmoontlik is om al die regsgevolge van besit
aan die hand van die handhawing van subjektiewe regte
te verklaar.
Dit is meer akkuraat om te stel dat besit (feitelike beheer) ‘n
feitelike toestand is wat bepaalde regsgevolge
het, sonder om al
daardie regsgevolge noodwendig aan die hand van subjektiewe regte te
probeerverklaar’
.
[39] In
Smit v
Saipem
1974 (4) SA 918
(A) the majority of the court said the
traditional approach in our law is that the possessor of land in
terms of a hire-purchase
agreement does not have a real right and
referred to it as ‘a lastige kwessie...- ‘n gebied wat
met moeilikhede besaai
is’. Rabie JA, in a dissenting judgment,
said categorically at 941A-B that a hire-purchaser has no real right
in the thing
which he purchased and has in his possession.
Perumal
v Messenger of the Court and others
1953 (2) SA 734
(N) is to the
same effect. The case concerned the rights of a purchaser of land in
terms of a hire-purchase agreement. Selke J
said at 737H-738A:’
…a right under a hire-purchase agreement is,
prima facie
,
a right
in personam
; and if one of the terms of the contract
is that the hirer/purchaser shall enter into immediate occupation of
the property bought,
it seems to me that the possession is still
based upon a right
in personam
.’
[40] A lessee of
immovable property has a real right in the land and is protected by
the
huur gaat voor koop rule.
See AJ Kerr,
The Law of Sale
and Lease
, 3 ed at 437, and Silberberg and Schoeman,
The Law
of Property
, 5 ed at 432.Zimmerman,
The Law of Obligations,
at
351, says the rule does not apply to leases over movables, and CG Van
der Merwe,
Sakereg
2 ed at 68 and 599 saysit has not yet been
accepted in our law that the hirer of a movable has a real right by
virtue of his possession
of it.
[41] The rights of PDVM
in the charter-party are contractual rights. They constitute
incorporeal property and have a value. Their
situs
is where
the owner of the ship resides, as was held in the
MV Snow
Delta
.Those rights can therefore not be attached here. Counsel
for the applicant did not contend otherwise. His contention was that
PDVM’s
possessory rights in the vessel are real rights which
accompany the ship wherever it goes. I am not persuaded that this is
so.
PDVM has possession of the ship (a moveable) pursuant to a lease
agreement. If its
ius possessionis
is a right and not merely a
factual situation then it seems to me, in the light of the
authorities to which I have referred, that
it is not a real right.Its
situs
is therefore where the shipowner resides.
[42] The conclusion that
PDVM’s possessory rights in the vessel (as opposed to its ius
possidendi in terms of the charter-party)
cannot be arrested as
security for the applicant’s claim seems to me to accord with
the practicalities.In
Zygos Corporation v Salen Rederierna AB
1984
(4) SA 444
(C) at 461E Friedman J said the purpose of giving security
is to make available assets with which a judgment creditor can
satisfy
a judgment in his favour.Wallissays at 309:
‘
The
security arrest under section 5(3) is a procedure whereby property
can be arrested and detained and ultimately, if no alternative
security is provided, sold to satisfy a claim. In that sense it is
more closely akin to the process of execution than it is to
any form
of action.’
[43] When Foxcroft J
discharged the rule in the
MV Snow Delta
he said ‘It
also seems to me to be plain common sense that the attachable right
cannot simply be a notional right but a right
which sounds in money’.
(See the judgment of the Cape Provincial Division in the
MV Snow
Delta
1998 (3) SA 636
CPD at 643B.) The
ius possessionis
,
without PDVM’s rights under the charter-party, will be of no
commercial value to anyone.It was not suggested by counsel
for the
applicant that the purchaser of those rights will be entitled to
operate the vessel. It is difficult to see on what basis
the
ius
possessionis
is an asset in the estate of PDVM and ‘property’
for the purposes of s5(3). If execution cannot be levied against the
property arrested the only purpose of the arrest would have been to
pressurise the charterer or the owner to put up security. I
do not
believe that this is a legitimate basis for an arrest under s 5(3).
This difficulty does not apply to the charterer’s
rights under
the charter-party, but those rights are situated elsewhere and cannot
be arrested here.
[44] I conclude therefore
that the order for the arrest of PDVM’s rights in and to the
vessel should be recalled.
[45] The order which I
make is as follows:
(i) The application for
the reconsideration of the order of 5 October 2013 succeeds.
(ii) The right, title and
interest of the first respondent in and to the MT
Rio Caroni
is released from the arrest referred to in the order.
(iii) Paragraphs 7 and 8
of the order are recalled.
(iv) The applicant is
ordered to pay the costs of the application for the reconsideration
of the order, including those consequent
on the employment of two
counsel.
_______________________
PLOOS VAN AMSTEL J
Appearances:
For the Applicant
:
Adv. M Wragge SC / Adv. P J Wallis
Instructed by :
Shepstone & Wylie
Durban
For the
FirstRespondent
:
Adv. S R Mullins SC / Adv. J D Mackenzie
Instructed by
:
Bowman Gilfillan Inc
c/o Van Velden Pike Inc
Westville
Durban
Date of Hearing :
18October 2013
Date of Judgment :
05 November 2013