Meihuizen Freight (PTY) Ltd v Transportes Maritimos de Portugal lda and Others (AC 128/02) [2002] ZAWCHC 63 (15 November 2002)

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[2002] ZAWCHC 63
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Meihuizen Freight (PTY) Ltd v Transportes Maritimos de Portugal lda and Others (AC 128/02) [2002] ZAWCHC 63; 2003 (5) SA 148 (C); [2002] 4 All SA 737 (C) (15 November 2002)

IN THE HIGH COURT OF SOUTH AFRICA
(Cape of
Good Hope Provincial Division)
REPORTABLE
Case No. AC 128/02
In the matter
between
MEIHUIZEN
FREIGHT (PTY) LTD
Applicant
And
TRANSPORTES
MARITIMOS DE PORTUGAL LDA First Respondent
MAVIGA UK
LIMITED
Second Respondent
THE
SHERIFF OF THE HIGH COURT, CAPE TOWN Third Respondent
NEDCOR
BANK LTD
Fourth Respondent
In
re:
Case No. AC
121/02
MAVIGA
UK LIMITED
Applicant
And
TRANSPORTES
MARITIMOS DE PORTUGAL LDA First Respondent
MEIHUIZEN
FREIGHT (PTY) LTD Second
Respondent
­­­­­­­
JUDGMENT DELIVERED 15 NOVEMBER 2002
DAVIS J
INTRODUCTION:
Applicant has
acted as a ship’s and cargo agent, for the vessel ‘Sagittarius’
since March 1998. During July 2002 applicant procured
second
respondent’s cargo to be carried on the ‘Sagittarius’. The
cargo was to be carried from Durban to Lobito, Angola.
The owner of
the vessel, being first respondent, allegedly breached the contract
of carriage in several respects,
inter alia
that the vessel
was unseaworthy and unfit for its intended voyage. Second respondent
took the view that, as a result of this alleged
breach and consequent
total loss of the ‘Sagittarius’ and its cargo including second
respondent’s property, it had suffered
damages in the amount of
the value of the cargo, being Euro 806,130.00.
Second respondent duly paid the freight in the
amount of $124 020.00 to applicant on 17 July 2002, being the agent
for first respondent
as it was required to do in terms of the
contract of carriage. This amount represented freight money which was
paid for a carriage
which was not performed as the vessel sank and
stranded on the voyage. Second respondent received this freight money
as agent of
first respondent and credited the latter in terms of its
accounting practice with the rand equivalent thereof, being R1240
200.00.
On 26 July
2002 second respondent obtained an order from
Nel J
in which
the Sheriff of this Court was authorised and directed to attach and
arrest the right, title and interest in and to the freight
moneys of
first respondent held by applicant’s bank Nedcor Bank Ltd (fourth
respondent) which freight moneys were held for and
on behalf of first
respondent. The order further provided that
the
said attachment is to found and confirm this Court’s jurisdiction
over the First Respondent for claims which the Applicant
intends
bringing against the First Respondent in this Honourable Court
That
the arrest stands as security for the Applicant’s claim against
the First Respondent to be brought in Lisbon, Portugal for
damages
suffered by the Applicant as a consequence of breaches by the First
Respondent of the terms and conditions of a contract
for the
carriage of cargo of maize from Durban, South Africa to Lobito,
Angola, which cargo has been lost following the wreck of
the First
Respondent’s ship mv ‘TMP Sagittarius”, together with the
interest and cost as follows:
Eur
806 130.00;
Interest
on the said amount at 15% p.a. for three years;
Costs
of R150,000.00’
On 29 July
2002 the Sheriff duly arrested and attached the right, title and
interest in the freight moneys in accordance with the
order granted
by
Nel J.
To make the arrest and attachment effective and to
retain control over the money, the Sheriff (third respondent) and
Nedbank, the
fourth respondent, transferred such money into a
separate bank account.
Applicant now
has approached the court for relief, framed in the following terms:
‘2. That the arrest Order for the arrest and/or attachment obtained
(and to the extent that it has been effected) by the Second
Respondent in this application (herein referred to as “the
Applicant”) in terms of, and the relief as provided for in,
paragraph
4 of the said Order be discharged and/or set aside;
3. That
Applicant and/or the Sheriff of the above Honourable Court (the Third
Respondent herein, referred to as “the Sheeriff”)
and/or Fourth
Respondent (herein referred to also as “Nedbank”) be authorised
and directed to take all such steps as may be necessary,
forthwith
to:
3.1 Release the monies (in the amount of R1 258 803 (“the monies”),
to the extent that it might have been arrested and/or attached
in
and/or transferred from Second Respondent’s account held with
Nedcor Bank Ltd, Cape Town with number 100935339 (“the account”)
by or at the behest or with the cooperation of the Sheriff and/or
Applicant and/or Nedbank on or about 29 July 2002, from arrest
and/or
attachment;
3.2 Restore the monies to the account;
3.3
Alternatively to the aforegoing
, and only in the event of
the above Honourable Court finding that moneys in Second Respondent’s
account equal to the amount found
to be due by Second Respondent to
First Respondent (“the credit”) as at the time of service of the
Order on Second Respondent,
was subjected to arrest and/or attachment
and/or transfer as set out in paragraph 3.1 above, that the
difference between the amount
of the moneys so transferred and the
amount of the credit, be released and restored as set out in
paragraphs 3.1 and 3.3 above.
Applicant’s
Contentions
.
Applicant
seeks its relief on the basis of a series of contentions being,
The
freight money was mixed with applicant’s own money.
The
money was not the property of first respondent and therefore not
subject to attachment.
Third
respondent was not entitled to transfer the money.
The
freight money became applicant’s because of a cessional
arrangement.
Due
to cession or set off only an amount of R97 407 was available for
attachment.
When the
matter was argued, Mr Steenkamp, who appeared on behalf of applicant,
concentrated his argument on three bases.
First
respondent had not instituted
in rem
proceedings against the
freight. Instead the Sheriff attached the right to title and
interest to freight but not the freight per
se.
Monies
which were attached were not the ownership of first respondent; and
Save
for R97 000, all the money in this account had been dispersed on
behalf of first respondent.
The
question of freight.
Mr
Steenkamp placed considerable emphasis upon the wording of the notice
of attachment as prepared by third respondent pursuant to
the order
granted by
Nel J
. The notice of attachment provided as
follows. ‘The first respondent’s right, title and interest, claim
and demand in and to
the freight monies held by the second
respondent’s bank Nedcor Bank Ltd in account No. 1009-365339. The
amount of R1 258 803-00.’
Mr Steenkamp
contended that the wording employed by third respondent was
indicative that the freight
per se
had not been attached. In
submitting that there was a material difference between the
existence of right, title and claim to freight
and freight
per se
he referred to the judgment of
King J
in
Sunnyface
Marine Ltd v Hitoroy Ltd (Trans Orient Steel and another
intervening)
;
Sunnyface Marine Ltd v Great River Shipping Inc
1992(2) SA 653(C).
In
Sunnyface’s
case applicant obtained an order in terms
whereof a cargo of approximately 60715 tons of iron ore laden on
board a vessel and all
the respondent’s right to title and interest
therein was attached
ad fundandam
et confirmandam
juristictionem
in an action to be instituted by applicant against
respondent for damages and payment of the balance of freight and
demurrage allegedly
due by respondent to applicant. Before
King
J,
applicant sought the confirmation of the attachment. The onus
was clearly on applicant to establish, on a balance of probabilities,
that respondent had an attachable interest in the cargo. In dealing
with the question of respondent’s attachable interest in the
cargo,
King J
held ‘That respondent’s so-called right, title and
interest, on incorporeal, is something separate and distinct from the
corporeal
to which the right relates is apparent from such disparate
decisions as
Menzies Motor Co (Pty) Ltd v Turkstra
1955(3) SA
408(T);
Ramdaie v Ganesh and Others
1959(1) SA 535 (D)….
Thus in any event the attachment of a cargo
per se
cannot be
justified on the basis that respondent has an interest therein’ (at
656 C).
Mr Steenkamp
also referred to Meeson
Admiralty Jurisdiction and Practice
(2
nd
ed) at 141 where the author concludes that
freight cannot be arrested separate from the ship or cargo and so
freight which has already
been paid to ship owners by the consignees
cannot be arrested. Meeson cites
Kaleten
(1914) 30 TLR 572
in
support of this proposition.
On the
strength of this authority Mr Steenkamp submitted that no attachment
of the freight
per se
had been made. Furthermore there was no
legal basis to attach freight once the freight had already been paid
to the ship owners
by the consignees.
Mr Burger,
who appeared on behalf of second respondent, submitted that the
‘paper work of the Sheriff’ as he described the notice
of
attachment was less relevant to the present dispute than the wording
of the order granted by
Nel J.
In paragraph 2 of that order,
the Sheriff was authorised to attach and arrest first respondent’s
right, title and interest in and
to the freight monies held by the
second respondent’s bank’ Paragraph 4 of the order provided that
the second respondent ‘should
advise the Sheriff immediately if
freight monies are received on behalf of First Respondent and the
Sheriff shall then forthwith
arrest or attach such freight monies’.
Mr Burger thus contended that the very wording of the order was
dispositive of the dispute
being that an order had been made out not
only to attach the right, title and interest to freight but the money
which in effect represented
the freight, upon the latter being
received on behalf of second respondent.
He also referred to the fact that the second
respondent had sought and obtained a security arrest in terms of
section 5(3) of the
Admiralty Jurisdiction Regulations Act 105 of
1983 as amended (‘the Act’). Section 5(3)(a) provides that 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, in the Republic or
elsewhere and
whether or not 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 enforced but for
any such
arbitration or proceedings.
Mr Burger referred to section 3(5) of the Act
which provides that 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:
The
ship, with or without its equipment, furniture, stores or bunkers;
the
whole or any part of the equipment, furniture, stores or bunkers;
the
whole or any part of the cargo;
the
freight;
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;
a
fund;
Thus on
the basis of s 3(5), Mr Burger contended that freight was a form of
property recognised by the Act and hence the phrase ‘the
arrest of
any property’ in section 5(3)(a) had to be taken to include the
arrest of freight. In other words, section 3(5) provided
an
interpretive guide to the concept of property as employed in section
5(3) notwithstanding applicant’s submissions that the
arrest had
been made pursuant to section 5(3) and not section 3(5) of the Act.
The question
therefore arises as to the meaning of freight. Carver
Carriage
by Sea
(13
th
ed) at 1164 defines freight as
‘remuneration payable for the carriage of goods in a ship’.
Carver further contends ‘when
the contract does not make the
payment of freight depend on delivery of goods, as where the payment
is to be on shipment, or at
a definite period after the ship has
sailed, the payment becomes due at the defined time and it continues
to be due if not paid,
although, owing to the loss of the ship or the
goods, it may have become impossible to carry the goods to their
destination’. (at
1183).
If the
contentions of applicant are accepted, an attachment of freight
before the money is paid could never take place. An applicant
would
only have a right and title to remuneration for carrying the goods in
the ship. This right would fructify, for example, upon
delivery of
the goods or when the contract so provides. But if an applicant, as
in the present case, sought an order to attach the
right to freight,
being the right to the remuneration, on Mr Steenkamp’s line of
argument such an attachment would not be possible.
Once the
obligation to remunerate had been discharged by means of payment to a
bank account of the shipowner it would be the bank
and not the ship
owner who would be owner of the freight and accordingly an attachment
order would also not be competent.
Mr
Steenkamp’s solution was that money, like any other species of
property, may be interdicted if it can be shown that the money
to be
interdicted was identifiable with or earmarked as a particular fund
to which the plaintiff claimed to be entitled. See in particular
Stern & Ruskin NO v Appleson
1951(3) SA 800(W) at 811 F-H.
Mr Steenkamp submitted that the bank was the owner of funds in its
accounts. In a current account
where the account reflect a credit
balance, the customer to which the account relates has only a
personal claim against the bank
for making available the funds in
terms of its banker – client relationship.
In
Dantex
Investment Holdings (Pty) Ltd v National Explosive (Pty) Ltd
(
in
liquidation
) 1990(1) SA 736(A) at 748 F-H
Milne JA
held
that ‘the bank is undoubtedly the owner of funds in the
(customer’s) account.. However he went on to say ‘As the bank’s
customer,
Natex
had a personal claim to any credit balance in
the account’.
An argument
about the legal ownership of the money must not be allowed to
obfuscate the wording of the order or the purpose of
s 5(3) of the
Act. In my view the order granted by
Nel J
was worded in
sufficiently wide terms to permit the attachment of the claim of
applicant to the money which is owned by fourth respondent
as its
banker.
Some support
for this conclusion can be found in the word ‘fund’ in section
3(5)(f) of the Act. A fund is a sum of money held
by the Registrar,
being the proceeds from the sale of the ship. For this reason a fund
could never be the owner of the proceeds in
the context employed by
Mr Steenkamp. The word ‘owner’ in relation to the words freight
and indeed fund must be given a wider
meaning to mean a person
entitled to receive the money whether it is ‘freight’ or ‘fund’.
In the present case, the attachment
is of a claim which applicant has
against the bank, being of the funds which are in fourth
respondents’ account, and to which
it (applicant) is entitled.
In my view
this approach gives proper and adequate meaning to the word ‘freight’
as it appears in section 3(5) of the Act, being
a category of
property which can be attached pursuant to section 5(3)(a) of the
Act.
This approach
to the attachment of freight finds favour in
Carver
at 1227:
‘Thus where proceedings
in rem
are taken against a ship
which has carried goods for damage done by her to another vessel, the
parties complaining may proceed against
the freight as well as
against the ship herself; and they may for that purpose arrest the
cargo for security until payment is made’.
Significantly,
as authority for this proposition Carver cites Roscoe
A Treatise
on the Jurisdiction and Practice of the Admiralty Division of the
High Court of Justice
(5
th
ed). In the first edition
(1878 which is the only edition available to me) at 124, Roscoe
writes as follows:
‘The
freight itself cannot be arrested, but when it remains unpaid the
cargo can be arrested as representing it (The Leo…). Nor
can the
cargo be arrested in a damage suit, except as representing freight
(The Flora….). But in the usual way of proceeding against
the
freight is to move the judge to issue an order commanding those from
whom the freight is due to pay the money into Court. The
freight due
on the whole of the cargo at the time a lien attaches is payable as
well as on that part which is on board at the time
of the arrest’.
This line of
argument is reflective of a purposive approach to the attachment of
freight. As the resolution of this dispute must
be found in the
wording of the Act, the use of comparative law must be designed to
assist in the interpretation of the Act. In my
view, the arguments
to be found in Carver and Roscoe add interpretative weight to a
conclusion which gives purpose to s 5(3) read
with s 3(5) of the Act.
The
question of disbursements.
Mr
Steenkamp relied upon a
dictum
of
Melunsky J
in
Smith
v Daniels and Another
1997(4) SA 711 at 714 G-H to the effect
that any monies that could be attached, are monies which could be
identified as money to which
the applicant was entitled. See also
Stern and Ruskin NO v Appleson
,
supra
at 811 G. In
short money which is liable to attachment is money to which
applicant is entitled. To the extent that first respondent
owed
amounts which represented disbursements which had been properly
incurred by applicant prior to the attachment order, it could
not be
held that these monies constituted amounts to which first respondent
was entitled.
It was common
cause that an amount of R750,058.00 was not paid out at the time of
the attachment order. Two amounts were however
subject to dispute,
namely R62,010.00 which was paid out after attachment representing
freight commission to applicant which the
latter alleged was earned
before attachment and a further amount of R18,603 which related to
the conversion of dollars to rands.
I deal first
with the commission. The monies were remitted in US dollars on 17
July 2002 after the loading of the vessel had been
completed. In
accordance with an established arrangement and understanding with
first respondent in terms of which applicant received
a commission of
5% of cargo freight which it secured for first respondent, applicant
was entitled to claim and receive commission
on receipt by first
respondent of payment of freight. Having received the freight
payment into its own bank account in terms of
this arrangement,
applicant was entitled immediately to claim and deduct such
commission. The commission amounted to R62,010.
I turn now to
the foreign exchange question. On 17 July 2002 applicant was notified
by fourth respondent of a remittance from second
respondent’s
agent ‘Brewed Product Distribution CC trading as DAS Forwarding in
Johannesburg in the amount of US dollars 124
020.00. These funds
having been placed at applicants disposal by first respondent in
terms of its standing arrangements and after
considering its overall
US dollar balance and expected dollar liability, applicant instructed
fourth respondent to credit the dollars
to its US dollar account.
Fourth respondent accordingly credited the funds to applicants US
dollar account, which at the close of
business on 17 July 2002,
reflected a credit balance of US dollar 356 029,07.
According to
Mr Steenkamp, had applicant chosen instead to sell the dollars to
fourth respondent on 17 July 2002 in exchange for
South African
rands, it would have purchased these dollars at a rate close to its
published ‘TT buying rate’ for that date which
was R9.9500 to the
dollar. DAS Forwarding, having been placed in funds by second
respondent, chose to remit the funds in US dollars
to applicant on 17
July 2002. Accordingly, first respondent was credited with R1,240
200.00 on 17 July 2002 at an effective rate
of exchange of R10.00 to
the US dollar.
The
subsequent sale of US dollars in applicant’s account, whether
applied to disbursements or for other reasons was, in Mr Steenkamp’s
view, not relevant to first respondent as it had no claim at any time
or interest in any funds in applicants US dollar or South African
rand account. Rather it had an interest in the net result in South
African rand arising from the voyage of the Sagittarius and the
balance on the current account of first respondent as reflected in
the accounting system of applicant.
The
accounting entry reflected receipt of freight to the current account
of first respondent at R1 240 200. to which first respondent
had not
objected. For this reason Mr Steenkamp submitted that the argument by
second respondent, that for the purpose of establishing
applicants
liability to first respondent, the rate of exchange to be applied to
the US dollar receipt should be the rate of exchange
actually
realised when applicant chose to disburse the dollars (period 17 July
2002 to 25 July 2002, 3 amounts disbursed), or when
it sold the
dollars to Nedbank on 26 July 2002 was not equivalent to the real
rate applied to the credit of first respondent’s
account on 17 July
2002.
In my view,
the correct amount was the quantum of rand in the account for the
benefit of first respondent on 17 July 2002. That amount
was
equivalent to R1 240 200,00. For these reasons therefore the rand
amount in the account of fourth respondent to which applicant
was
entitled was R750,058.00.
COSTS
.
In my view,
applicant has had some success in this application; it has
successfully ensured that over 40% of the attached amount be
released. But second respondent has resisted the attack on the
balance. It is thus not appropriate to make an award of costs.
On the basis
of these findings the following order is made:
The
arrest and/attachment obtained by second respondent on 26 July 2002
in terms of and the relief as provided in paragraph 4 of
that order
is confirmed, subject to the provisions of paragraph 2 of this
order.
Applicant
and/or the Sheriff of this Honourable Court and/or fourth respondent
are authorised and directed
to
take all such steps as may be necessary, forthwith to release the
amount of R508 745 from second respondent’s account which
has
been attached and/or transferred from second respondent’s account
held with Nedcor Limited Cape Town with number 1009365339
by or at
the behest of or with the co-operation of third respondent and/or
applicant and/or fourth respondent on or about 29
July 2002 from
arrest and/or attachment.
to
restore the amount of R508 745 to such account.
There
is no order as to costs..
________________
DAVIS J
.