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[2006] ZAWCHC 16
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Taxfield Shipping Limited v Cargo Currently Laden on Board the MV New Market and Others (AC29/06) [2006] ZAWCHC 16; 2006 (5) SA 114 (13 April 2006)

Reportable
in
the high court of South Africa
(cape
of good hope provincial division)
Exercising
its Admiralty Jurisdiction
Case
No AC29/06
Name
of Vessel:
MV
new market
In
the matter between:
taxfield
shipping limited
Applicant
and
the
cargo currently laden on board
the mv
new market
First
Respondent
parmex
limited
S
econd
Respondent
ibeto
cement company limited
Third
Respondent
access
bank plc
Fourth
Respondent
asiana
marine inc
Fifth Respondent
judgment:
delivered 13 april 2006
Griesel
J:
The
applicant, Taxfield Shipping Limited, is the owner of the MV
New
Market
(
the vessel
). A cargo of 29 594 mt of
Portland cement (
the cargo
) is currently on board the vessel.
The cargo was arrested
in rem
pursuant to a warrant of arrest
issued out of this court on 9 March 2006 at the instance of the
second and third respondents. The
second respondent is Parmex
Limited (
Parmex
) and the third respondent is Ibeto Cement
Company Limited of Nigeria (
Ibeto Cement
). The basis of the
arrest was a claim that either Parmex or Ibeto Cement is the owner
of the cargo, of which they claim delivery.
(It has subsequently
become evident that Parmex is currently the holder of the original
bill of lading, and that Ibeto Cement will
be entitled to the bill
of lading when ownership of the cargo passes by delivery.)
Pursuant
to the arrest of the cargo, the applicant launched the present
proceedings as a matter of urgency, seeking an order setting
aside
the arrest of the cargo. The application is being opposed by Parmex
and Ibeto Cement, whereas the fourth and fifth respondents,
Access Bank Plc (
Access Bank
) and Asiana Marine Inc (
Asiana
Marine
), play no active role in these proceedings and abide the
decision of the court. I shall accordingly refer herein to Parmex
and Ibeto Cement collectively as ‘the respondents’, except
where it is neces­sary to refer to either of them individually.
The
urgency of the present application is not in issue and arises,
inter
alia
, from the fact that the cargo of cement is of a perishable
nature, which may cause such cargo to deteriorate and, in the
process,
cause damage to the vessel.
Factual
background
On
23 September 2005, the applicant and Asiana Marine entered into a
voyage charterparty on the Gencon (1994) form in terms of which
the
vessel was chartered for a voyage from China to Port Harcourt in
Nigeria. The vessel arrived at the port of Taizhou, China
on 10
October 2005 and commenced loading the cargo shortly afterwards. It
completed loading and departed from the port of Taizhou
on 15
October 2005. On the same date, a bill of lading was issued on the
Congenbill 1994 form on behalf of the master of the vessel
pursuant
to the terms of the charterparty.
On
24 November 2005, the vessel arrived at the port of Port Harcourt in
Nigeria. A notice of readiness was tendered during the early
hours
of 25 November 2005 and the vessel was by that time ready to
discharge the cargo. However, during the next three months,
no-one
presented the bill of lading to take delivery of the cargo. It
appears from the documentary evidence that the cargo was
due to have
been imported by the Parmex, as seller, for Ibeto Cement, as
purchaser, under the authority of an import permit issued
by the
Federal Ministry of Industry of Nigeria on or about 6 September
2005. This import permit was, however, cancelled by the
Nigerian
president on or about 19 October 2005 – approximately four days
after the vessel had sailed from the port of loading
– with the
result that the vessel was not permitted to discharge the cargo at
Port Harcourt. The applicant was not informed of
the cancellation of
the import permit.
By
23 February 2006, after all efforts to obtain the requisite
per­mission had failed, and based on the advice of its experts,
the vessel was ordered to the next convenient port where the cargo
could be discharged and sold.
Proceedings
in Hong Kong
In
the meanwhile, the applicant’s attempts to obtain agreement from
the other parties for the sale of the cargo were likewise
unsuccessful. On 25 February 2006, the applicant accordingly caused
an originating sum­mons to be issued out of the High Court
of
the Hong Kong Special Adminis­trative Region, Court of First
Instance (
the Hong Kong court
). In the summons, the applicant
sought an order authorising it to sell the cargo without prejudice
to the rights of the other parties
to the action and, after sale, to
pay the proceeds, after deducting the expenses thereof, into an
escrow account to be held by
the applicant’s solicitors or into
court to abide the outcome of an arbitration to be held in Hong Kong
in terms of the charterparty
and the contract of carriage evidenced
by the bill of lading.
At
the hearing that took place on 7 March 2006, Ibeto Cement was
represented by solicitors and applied for a postponement of the
matter, which application was refused by the court. None of the
other parties opposed the relief sought. The court accordingly
granted an order as prayed.
Arrest
of the cargo in Cape Town
The
vessel arrived off Cape Town on or about 8 March 2006. When the
vessel put into port to take on bunkers, the cargo was arrested
at
the instance of the respondents in terms of the aforesaid writ. In
the summons, issued by the registrar on the same day, Parmex
and
Ibeto Cement alleged that each of them, in the alternative, was the
owner of the cargo, and sought judgment for delivery of
such cargo.
The
applicant thereupon launched the present application, seeking an
order setting aside the aforesaid writ on a variety of grounds.
Failing the setting aside of the order on any of the grounds
advanced, the applicant seeks the enforce­ment of the Hong Kong
order, which will achieve the same result.
Discussion
Locus
standi of the applicant
In
opposing the application, the respondents raised a point in limine,
with which it is necessary to deal at the outset. The point
relates
to the locus standi of the applicant and is based on an allegation
that the applicant had transferred its right to claim
demurrage and
damages to Asiana Marine. This appears from a letter, dated 13
February 2006, addressed by Asiana Marine’s Hong
Kong attorneys,
Lin & Associates, to Access Bank, reading as follows:
‘
We
are acting
on behalf of
the
carrier/charterer, Asiana Marine Inc, which has suffered demurrage
and detention loss damages and has the right to claim against
your
company for remedy accordingly. The shipowners – Taxfield Shipping
Ltd – have transferred their right to demurrage and detention
loss
to our client.’
In
the result, so the respondents argued, the applicant, had ‘no right
to exercise any rights in terms of the charter party’ when
it
launched the present application.
In
reply, the applicant denied that a transfer of such rights had in
fact occurred, as alleged by the attorneys. In support thereof,
the
applicant attached an email message from the same attorneys, stating
as follows:
‘
We
wish to clarify that although the original intention was for our
client, Asiana Marine Inc, to obtain the assigned rights to claim
from the shipowner of the “NEW MARKET”, namely Taxfield Shipping
Limited, for demurrage against Access Bank Plc, that the owner
in the
final instance did not sign or provide such a letter of assignment of
rights to our client and that even though we had advised
Access Bank
Plc that our clients had the rights to claim they in fact did not
obtain such rights in the end effect. Therefor the
owner of the “NEW
MARKET”, Taxfield Shipping Limited, should still be vested with the
right to claim as far as we know.’
This
explanation was described by the respondents’ counsel as
‘unsatisfactory’ in view of the unequivocal statement contained
in the earlier letter from the attorneys. In my view, however, the
point
in limine
cannot succeed:
The
first, and obvious, point is that the allegation regarding transfer
of rights did not emanate from the applicant, but from attorneys
acting on behalf of Asiana Marine. The applicant cannot be held
accountable for statements made by outsiders regarding its rights.
Secondly,
the applicant has furnished an explanation for the state­ments
made, which explanation appears to be corrobo­rated
by the party
who made them in the first place.
Thirdly,
the allegation that no transfer of rights had taken place is
corroborated by the fact that Asiana Marine has not at any
stage –
either in the Hong Kong Court or in this court – come forward to
assert any transferred rights, notwithstanding its
status as a party
in both applications.
In
these circumstances, it appears to me that the weight to be attached
to the initial hearsay statement by the attorneys for Asiana
Marine,
insofar as it affects the applicant’s locus standi herein, should
be minimal.
1
I
accordingly turn to consider the individual grounds relied on by the
applicant in support of the application to set aside the
arrest.
Impossibility
of performance
The
first ground was that it is impossible for the applicant to give
effect to the order sought by the respondents by delivering
the
cargo to the respondents in the port of Cape Town. This is so,
because there are no facilities in the port of Cape Town for
the
discharge of a bulk cargo of cement. Furthermore, the City and
National Port authority will not permit the import of an
‘environmentally
unfriendly’ cargo such as bulk cement.
The
respondents acknowledged this obstacle. They contended, how­ever,
that the cargo may be dis­charged in Durban and they
sought to
achieve this goal by apply­ing (on the eve of the hearing before
me) in terms of s 5(2)(
c
) of the Admiralty Act for an
order directing the vessel to sail to Durban and for the cargo to be
discharged in that port. Simultaneously,
application was made in
terms of s 9(1) of the Act for leave to sell the cargo. Counsel
for the respon­dents was unable
to refer to any precedent for
such an order, nor have I been able to find any. He argued, however,
that the court has a ‘very
broad discretion’ to exercise its
jurisdiction in terms of s 5(2)(
c
) and relied in this
context on a judgment of Nicholson J in
The Wisdom (No 2)
.
2
In
the view that I take of the matter, this ‘counter-application’
by the respondents only becomes relevant if the applicant’s
other
grounds for setting aside the arrest are dismissed and the arrest
remains in place. I accordingly turn to consider those
other
grounds.
The
applicant’s possessory lien
The
applicant’s main ground for setting aside the arrest is based on
its alleged lien for the damages that it claims to have suffered
arising from the breach by Parmex and/or the holder of the original
bill of lading issued in respect of the cargo. The applicant
relied
in this regard on the lien clause in the charterparty, reading as
follows:
‘
8. Lien
Clause
The Owners shall have a lien on the cargo and on all
sub-freights payable in respect of the cargo, for freight,
dead­freight,
demurrage, claims for damages and for all other
amounts due under this Charter Party including costs of recovering
same.’
The
applicant contended that this clause was incorporated in the
contract of carriage evidenced by the bill of lading. This was
disputed
on behalf of
the respondents.
They referred to clause 1 of the conditions of carriage, contained
on the reverse of the Bill of Lading, which
provides:
‘
All
terms and conditions, liberties and exceptions of the Charter Party,
dated as overleaf
, including the Law and Arbitration Clause,
are herewith incorporated.’
[my
emphasis]
They
pointed out that no charterparty was in fact attached to the bill of
lading or is to be found ‘overleaf’. Instead, the printed
clause
‘
CHARTER PARTY Dated -----
’ on the face of the bill has
not been completed inasmuch as no date has been inserted to identify
the charterparty. In these circumstances,
so it was argued, no
charterparty was incorporated by reference, as a necessary
pre-condition to such incorpo­ration is absent.
I
find this argument rather contrived and unpersuasive. The
respon­dents are in effect asking the court to regard the whole
of clause 1 as pro non scripto due to the failure to complete the
clause identifying the charterparty in question. To my mind,
a far
more reasonable and businesslike interpretation would be to have
regard to surrounding circum­stances in order to identify
the
charterparty in question. This is an approach regularly followed by
our courts in the sphere of contract law.
3
I
am fortified in this conclusion by no less an authority than Lord
Denning MR in the Court of Appeal,
4
where he pointed out that it not infrequently happens that, when a
printed form bill of lading provides for the incorporation of
a
‘charter party dated ---’, the parties omit to fill in the
blank. In response to a submission that the result of the blank
is
that the incorporation clause is worth nothing as it is not possible
to incorporate a charter which is not identified in any
way, the
learned Master of the Rolls held:
5
‘
I
cannot for a moment agree with that contention. It seems to me plain
that the shipment was carried under and pursuant to the terms
of the
head charter. The blanks were left because the master and the other
people in Recife did not know its date and the parties
to it so as to
be able to fill them in. The head charter was the only charter to
which the shipowners were parties: and they must,
in the bill of
lading, be taken to be referring to that head charter. I find myself
in agreement with the statement in
Scrutton
on Charterparties
(18ed (1974) at p 63):
A
general reference will normally be construed as relating to the head
charter, since this is the contract to which the shipowner
, who
issues the bill of lading, is a party ….. It not infrequently
happens that, when a printed form bill of lading provides for
the
incorporation of the “charter party dated----”, the parties omit
to fill in the blank. It is submitted that the effect is
the same as
if the reference were merely to “the charter party” and the
omission does not demonstrate an intent to negative the
incorporation.’
I
respectfully adopt the reasoning set out in these authorities.
Applying that approach to the facts of the present case, the
applicant
is the owner of the vessel and is party to the
charterparty with Asiana Marine. The bill of lading was also issued
on behalf of
the master of the vessel, who represents the applicant.
I agree therefore that, notwithstanding the fact that the date of
the charterparty
was not inserted on the bill of lading, the effect
of clause 1 on the reverse side of the bill of lading is to
incorporate the
terms, conditions, liberties and exceptions of the
head charterparty.
I
find, therefore, that the applicant established that it has a
contractual lien over the cargo for all amounts due under the
charterparty
and any claim for damages and for the costs of
recovering such damages. It may well be, as argued by the applicant,
that it also
enjoys a lien as bailee or a common law lien arising
from expenses incurred in protecting and preserving the cargo. In
view of
my foregoing conclusion regarding the applicant’s
contractual lien, however, it is not necessary to come to any firm
finding
regarding these further issues. It is likewise unnecessary
to consider the interesting arguments addressed to me on the
question
whether it is possible for an owner to vindicate movable
property, other than the ship itself, by way of an action
in rem
against that property.
6
It
follows that the applicant is entitled to exercise a possessory lien
over the cargo until it has been compensated by the cargo
owner for
these charges in accordance with the relevant provisions of the
charterparty. In the circumstances, the arrest falls
to be set
aside.
Order
For
the reasons set out above, the following order is issued:
(a) The
arrest of the first respondent cargo is set aside.
(b) The
second and third respondents jointly and severally are ordered to pay
the costs of the application.
B
M Griesel
Judge of the High Court
1
See s 6(4) of the Admiralty Jurisdiction Regulation Act 105 of
1983, as amended (‘the Admiralty Act’);
Cargo laden and
lately laden on board the MV
Thalassini
AVGI v MV
Dimitris
1989 (3) SA 820
(A) at 842H.
2
Handed down on 31 January 2003 in the Durban and Coast Local
Division, reported in M Stranex
Shipping Cases of South Africa
B201 at B209H–B210A.
3
See eg Christie
The Law of Contract
4ed (2001) 135 and
authorities referred to therein.
4
The ‘San Nicholas’
[1976] Vol 1 Lloyd’s Rep 8 (CA).
5
At 11. See also
The ‘Sevonia Team’
[1983] Vol. 2 Lloyd’s
Rep 640 (QB) at 644;
The ‘Nai Matteini’
[1988] Vol. 1
Lloyd’s Rep 452 (QB) at 459.
6
See in this regard the provisions of s 3(4) of the Admiralty
Act and the interpretation of that sub-section by Blignault J
in
The
‘
Atlantic Pride
’: Siyadoba Fishing (Pty) Limited v Marine
Radio Acoustic Devices CC
(judgment delivered on 21 November
2003, reported in M Stranex
Shipping Cases of South Africa
at
B224).