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[2020] ZASCA 120
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Martrade Shipping and Transport GmbH v United Enterprises Corporation and MV 'Unity' (1085/ 2019) [2020] ZASCA 120 (2 October 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
No: 1085/ 2019
In
the matter between:
MARTRADE
SHIPPING AND TRANSPORT GmbH
APPELLANT
and
UNITED
ENTERPRISES CORPORATION
FIRST RESPONDENT
MV
'UNITY' SECOND
RESPONDENT
Neutral
Citation:
Martrade
Shipping and Transport GmbH v United Enterprises Corporation and MV
'Unity'
(1341/18)
[2020] ZASCA 120
(2 October 2020)
Coram:
NAVSA, MAKGOKA and SCHIPPERS JJA and
EKSTEEN and GOOSEN AJJA
Heard:
31 August 2020
Delivered:
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email, publication on
the
Supreme Court of Appeal website and release to SAFLII. The date and
time for hand-down is deemed to be 09h45 on 2 October 2020
Summary:
Interpretation of court order –
manifest purpose of the order – consideration of language used
in light of ordinary
rules of grammar – whole of the order to
be read – where ambiguous a sensible, practical interpretation
to be adopted
which fosters purpose for which order granted.
ORDER
On
appeal from
: The
KwaZulu-Natal High Court, Pietermaritzburg (per Bezuidenhout, Gyanda
and Chili JJ) sitting as court of appeal:
1.
The appeal is upheld
with costs.
2.
The order of the court
below is set aside and substituted as follows:
‘
(a) The appeal is upheld with
costs, including the costs related to the withdrawn cross-appeal;
(b) The order of the court below is set aside and
substituted as follows;
“
The application is dismissed
with costs”.’
JUDGMENT
Goosen
AJA (Navsa, Makgoka and Schippers JJA and Eksteen AJA concurring)
[1]
This appeal concerns
the proper interpretation of a court order granted in relation to a
claim for security in a maritime dispute.
The central question is
whether the order obliged the furnishing of security with a period of
15 days of the date of granting the
order.
[2]
The principles which
apply to the interpretation of court orders are well-established.
Trollip JA observed in
Firestone
South Africa (Pty) Ltd v Gentiruco AG
[1]
that the same principles apply as apply to construing documents.
Thus,
‘
..(T)he court’s intention is to be
ascertained from the language of the judgment or order as construed
according to the usual,
well-known rules… Thus, as in the case
of a document, the judgment or order and the court’s reasons
for giving it
must be read as a whole to ascertain its intention.’
[3]
The starting point, it
was held in
Finishing
Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Limited
and others
[2]
,
is to determine the manifest purpose of the order. This was endorsed
by the Constitutional Court in
Eke
v Parsons
[3]
.
This court, in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[4]
,
described the process of interpretation as involving a unitary
exercise of considering language, context and purpose. It is an
objective exercise where, in the face of ambiguity, a sensible is to
be preferred to one which undermines the purpose of the document
or
order.
The facts
[4]
The appellant, Martrade
Shipping and Transport GmbH (Martrade Shipping) caused the second
respondent (the MV Unity) to be arrested
in the Durban port on 21
February 2014. The arrest was in terms of s 5 (3) of the Admiralty
Jurisdiction Regulation Act
[5]
(the Admiralty Act) to provide security for Martrade Shipping’s
claims against the first respondent , United Enterprises
Corporation,
(United Enterprises) in ongoing arbitration proceedings in London
(the arbitration proceedings). United Enterprises
thereafter gave a
letter of undertaking as security for the claims and obtained the
release of the MV Unity from arrest. The MV
Unity however, was deemed
to be under arrest in terms of s 3 (10) of the Admiralty Act.
[5]
In April 2014 United
Enterprises brought an application in the KwaZulu-Natal Division of
the High Court (the high court) to set
aside the arrest of the MV
Unity. In the event that the arrest was not set aside, United
Enterprises sought counter-security for
its claims against Martrade
Shipping in the arbitration proceedings. The application was
dismissed. However, it granted the application
for counter security.
It is this order which is the subject of the interpretation dispute.
[6]
The relevant part of
the order read as follows:
‘
2.1 The respondent [Martrade Shipping] is
directed to give security in a form acceptable to the applicants,
alternatively to the
Registrar of the above Honourable Court in the
event of the parties not reaching agreement, in the amount of US$
978 868.69
within fifteen (15) days of the gran.t of this Order
in respect of the first applicant’s [United Enterprises] claim
in the
London arbitration proceedings;
[6]
…
2.2 Failing compliance with paragraph 2.1 above
within thirty (30) days of the date of granting this order, the
respondent [Martrade
Shipping] is directed to return to the
applicants [United Enterprises] the letter of undertaking given by
the applicants pursuant
to the arrest order of 21 February 2014, and
the arrest of the second applicant [MV Unity], shall lapse.’
[7]
It was common cause
that the 15-day period in paragraph 2.1 of the order expired on 18
January 2017, and that the 30-day period
in paragraph 2.2 expired on
5 February 2017. Martrade Shipping’s insurer tendered a letter
of undertaking as security on
17 January 2017. United Enterprises
refused to accept the tendered undertaking. Accordingly, on 18
January Martrade Shipping referred
the determination of the form of
security to the registrar for a decision. The registrar approved the
tendered security on 1 February
2017 and it was provided to United
Enterprises on that date.
[8]
On 22 March 2017 the
respondents commenced an application to set aside the directive
issued by the registrar on 1 February. They
also sought orders
declaring that the arrest of the MV Unity had lapsed, and directing
the return of the letter of undertaking
provided by United
Enterprises. That application was heard by Maharaj AJ who, on 15
March 2018, granted the relief sought. The
order also provided for
the reduction of the amount of security provided by Martrade Shipping
to an amount of US$500 000.
[9]
Martrade Shipping
appealed against the order of Maharaj AJ declaring the provision of
security out of time and that the arrest had
lapsed. United
Enterprises prosecuted a cross-appeal against the order reducing the
security to be provided to US$500 000.
The appeal was heard on 7
June 2019. By then the cross-appeal issue had become moot and it was
withdrawn subject to the costs being
costs in the appeal. On 28 June
2019 the full court dismissed the appeal. The appeal is with the
special leave of this court.
The purpose of the order of 23 December 2016
[10]
The description of the
background to the present appeal points to an essential underlying
purpose of the order to be interpreted.
What was before Henriques J
was a common conundrum faced in maritime claims: the balancing of the
interests of contending parties
to security for their claims where
the dispute is being adjudicated in a foreign jurisdiction and where
the effectiveness of a
future judgment must be ensured.
[11]
In
MV
NYK Isabel; Northern Endeavour Shipping Pte Ltd v Owners of the MV
NYK Isabel and Another
[7]
this court set out the approach to the resolution of such conundrums
in the exercise of a court’s admiralty jurisdiction.
‘The [Admiralty] Act is a special statute
dealing with maritime matters and it is directed at meeting the needs
of the
shipping
industry
in enforcing maritime claims. It provides the Court with very
extensive powers to deal with maritime cases. In regard
to the
breadth of these powers I draw attention to section 5(1), which
empowers the Court, to join a person as a party "notwithstanding
the fact that he is not otherwise amenable to the jurisdiction of the
Court", and to section 5(2) (a), which provides that
a Court may
decide any matter arising in connection with a maritime claim
"notwithstanding that any such matter may not be
one which would
give rise to a maritime claim". These powers take account of the
reality that maritime defendants are mobile
and transitory in their
presence in any particular jurisdiction. Perforce they compel
maritime claimants to become "wandering
litigants of the world",
in the colourful expression of Didcott J recorded in
The Paz
,
but without the pejorative overtones with which he used it. In order
to address this problem the Act provides wide-ranging powers
of
arrest, both for the purpose of instituting actions in South Africa
and to enable claimants to obtain security for proceedings
in other
jurisdictions.
It follows in my view that the provisions of
the Act should be given a generous interpretation consistent with its
manifest purpose
of assisting maritime claimants to enforce maritime
claims. That construction is also consistent with the right of access
to Courts
afforded to everyone in terms of section 34 of the
Constitution. There is, however, a need for balance when the Courts
exercise
the expansive powers of arrest and attachment of vessels
embodied in the Act. Section 5(2) (b) and (c) give Courts the means
to
balance the interests of claimant and defendant by ordering
counter-security in appropriate cases and attaching conditions to
orders
of arrest or attachment. Thus, it is commonplace for an arrest
to be subject to the provision of security for the costs of an
application
to set the arrest aside, or for any loss suffered in
consequence of that arrest if it is subsequently set aside.’
(Footnotes
omitted)
[12]
The court went on to
state that where the requirements for security and counter-security
are established and the merits of the claims
are evenly balanced
‘considerations of fairness suggest that either both parties
should have security or neither’.
[8]
[13]
It is in the light of
these general principles that the order of Henriques J must be
understood. She stated in her judgment that
the requirements of s 5
(3) of the Admiralty Act were met. She was therefore satisfied that
an order be made in terms of s 5 (2)
(
c
)
of that Act. The section provides that a court may, in the
exercise of its admiralty jurisdiction,
‘
(c) order that any arrest or attachment
made or to be made or that anything done or to be done in terms of
this Act or any order
of the court be subject to such conditions as
to the court appears just, whether as to the furnishing of security
or the liability
for costs, expenses, loss or damage caused or likely
to be caused, or otherwise;’
It is apparent therefore that Henriques J considered
that counter-security for United Enterprises’ claims should be
provided.
The meaning and effect of the order
[14]
The appellant’s
argument was that the 15-day period provided in paragraph 2.1 of the
order was not to be read as the period
within which the security was
to be furnished. Paragraph 2.2 qualifies paragraph 2.1 by providing
for compliance within 30 days
of the date of the order.
[15]
Counsel for the
respondents however, argued that paragraph 2.1 of the order must be
read to mean that Martrade Shipping was obliged
to deliver security
for the amount stipulated within 15 days of the date of the order.
The 15-day time period was one that applied
to both circumstances
envisaged by the order, irrespective of whether the form of security
was agreed between the parties or it
was determined by the registrar.
[16]
Clause 2.2 of the
order, if seen in this light, relates not to the provision of
security but to the re-delivery of the letter of
security which had
been provided to secure the release of the MV Unity from arrest. Thus
the 30-day period stated in the order
is not to be construed as a
period within which security could be furnished, nor as upon expiry
of which the arrest lapsed. The
30-day period was therefore to enable
the administrative process of surrendering the letter of undertaking
to occur.
[17]
There are, as I shall
demonstrate, several difficulties with this construction. There is
nothing in the record or indeed in the
prevailing circumstances to
suggest that re-delivery of the letter of undertaking required any
elaborate administrative process.
Nor was it a matter which the court
was called upon to consider and to which it applied its mind. Counsel
conceded that in this
instance no such ‘administrative’
considerations arise. It was also conceded that the terms of the
letter of undertaking
are such that upon the lapsing of or release
from the arrest, the
causa
upon which the letter could be perfected falls away. The re-delivery
or return of the letter of undertaking carried no consequence.
[18]
Moreover, there are
textual difficulties with the construction advanced on behalf of the
respondents. Paragraph 2.1 employed the
word ‘alternatively’.
In doing so it posited two options or possibilities which governed
the furnishing of security.
The first option was the provision of
security in a form acceptable to United Enterprises, ie in a form
agreed between the parties.
The second option arose in the event that
agreement was not reached. In that event the registrar was to
determine the form of security.
These options accord with the
practice that governs the provision of security. The textual
difficulty arises with the phrase ‘within
fifteen days of the
grant of the order’. It either qualified the giving of security
in a form which was agreed or gave rise
to a textual conflict with
paragraph 2.2 of the order.
[19]
Paragraph 2.1 of the
order dealt with two distinct issues, namely the obligation to
furnish security, and the determination of the
form in which security
was to be provided. Paragraph 2.2 on the other hand, dealt with the
consequences of non-compliance with
the obligation to furnish
security. It also dealt with two distinct issues, namely the lapsing
of the arrest of the MV Unity and
the return of the letter of
undertaking.
[20]
Counsel for the
respondents suggested the 30-day period concerned only the delivery
of the letter of undertaking. That is not how
the order reads. The
phrase ‘within 30 days of the date of this order’
qualifies ‘the failure to comply’
with paragraph 2.1 of
the order. It does so in a grammatical structure that describes the
consequences of non-compliance, namely
the directive to return the
letter of undertaking and the lapsing of the arrest of the MV Unity,
as flowing from that failure to
comply.
[21]
Thus, when paragraph
2.2 is read as it was written, the different time periods in 2.1 and
2.2, sensibly interpreted, must mean that
the court intended that a
period of 15 days be available to the parties to reach agreement as
to the form of security and a further
15 days within which to provide
security in a form acceptable to the registrar. A court is enjoined,
where ambiguity presents itself,
to interpret a document or order so
as to avoid impractical, unbusiness-like or oppressive consequences
which would undermine the
purpose of the order.
[9]
[22]
Henriques J afforded
the parties an opportunity to agree to the form of security to be
provided. This, in my view, is what paragraph
2.1 was intended to
allow. When the order is read as a whole and is considered in
context, the construction applied by the full
court cannot be
sustained. That interpretation was based upon a misreading of
paragraph 2.2 of the order. At para 13 of its judgment
the full court
held that:
‘
Paragraph 2.2 of the order provides that if
security was not provided within the 15 day period the letter of
undertaking must be
returned and grants a further period of 15 days
to do so.’
[23]
That is not what
paragraph 2.2 states. For the reasons set out above, such
interpretation does not accord with the grammatical structure
of the
language used in both paragraphs of the order. It follows that the
appeal must succeed.
The order
[24]
As indicated at the
outset, the cross-appeal was abandoned before the full court. It was
agreed that the costs be costs in the appeal.
Paragraph 4 of the
order granted by Maharaj AJ accordingly need not be addressed.
[25]
In the result:
1.
The appeal is upheld
with costs.
2.
The order of the court
below is set aside and substituted as follows:
‘
(a) The appeal is upheld with
costs, including the costs related to the withdrawn cross-appeal;
(b) The order of the court below is set aside and
substituted as follows;
“
The application is dismissed
with costs”.’
________________________
G GOOSEN
ACTING
JUDGE OF APPEAL
Appearances
For
appellant: L M Mills
Instructed
by: Bowmans, Durban
Matsepes
Inc, Bloemfontein
For
respondent: P J Wallis
Instructed
by: Shepstone & Wylie
Webbers
Attorneys, Bloemfontein.
[1]
Firestone South Africa (Pty) Ltd v Gentiruco
AG
1977 (4) SA 298
(A) at 304; [1977]
4 All SA (A) at 604.
[2]
Finishing Touch 163 (Pty) Ltd v BHP Billiton
Energy Coal South Africa Limited and others
2013 (2) SA .204 (SCA) para [13] [2012] ZASCA 49.
[3]
2015 (11) BCLR 1319
(CC) para [29].
[4]
2012 (4) SA 593
(SCA) para [18].
[5]
105 of 1983.
[6]
The other part of the order sets out, in a number
of sub-paragraphs, specified claim amounts and specified interest
claims. These
are not reproduced here since they are not relevant in
determining the purpose and meaning of the order.
[7]
MV NYK Isabel; Northern Endeavour Shipping Pte
Ltd v Owners of the MV NYK Isabel and Another
2017 (1) SA 25
(SCA) para [44] –
[45] (
Northern Endeavour).
[8]
Northern Endeavour
par
[58].
[9]
Endumeni
para
[26].