Mt 'Argun' v Master and Crew of The Mt 'Argun' Claiming Under Case No AC127/99 and Others (653/2002) [2003] ZASCA 87; [2003] 4 All SA 139 (SCA) (19 September 2003)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2003
>>
[2003] ZASCA 87
|

|

Mt 'Argun' v Master and Crew of The Mt 'Argun' Claiming Under Case No AC127/99 and Others (653/2002) [2003] ZASCA 87; [2003] 4 All SA 139 (SCA); 2004 (1) SA 1 (SCA) (19 September 2003)

REPUBLIC OF SOUTH
AFRICA
IN THE SUPREME COURT OF
APPEAL
OF SOUTH AFRICA
Case number: 653/2002
Reportable
In the matter between:
MT ‘ARGUN’
Appellant
(Defendant)
and
THE MASTER AND CREW OF THE MT ‘ARGUN’
CLAIMING UNDER CASE NO. AC127/99
First Respondent
(Plaintiffs)
THE FORMER CREW OF THE MT ‘ARGUN’
CLAIMING UNDER CASE NO. AC134/99 S
econd
Respondent
(Plaintiffs)
THE MASTER AND CREW OF THE MT ‘ARGUN’
CLAIMING UNDER CASE NO. AC4/02
Third
Respondent
(Plaintiffs)
CORAM
: MARAIS, FARLAM, NAVSA,
CLOETE JJA et JONES AJA
HEARD
: 16 MAY 2003
DELIVERED
: 19 SEPTEMBER 2003
SUMMARY:
Maritime
law – admiralty – whether action
in rem
lapses when arrest
by which it was instituted lapses – whether judgment given in
action
in rem
after lapse of arrest can be executed against
vessel under arrest in another action – date from and rate at which
interest on amounts
adjudged to be due to be determined – whether
sheriff’s preservation costs and remuneration correctly included in
costs order.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
FARLAM JA
INTRODUCTION
[1]
This is an appeal from judgments delivered on
13 August 2002 and 12 September 2002 by Foxcroft J in the Cape
Provincial Division of
the High Court, sitting as a court of
admiralty in terms of the Admiralty Jurisdiction Regulation Act 105
of 1983 (to which I shall
refer in what follows as ‘the Act’). In
the first judgment on appeal the learned judge dealt with two
admiralty cases which were
heard before him. The first was case no
AC127/99, in which the master and crew who were serving on board the
MT ‘Argun’ when
she arrived in Cape Town on 25 May 1999 claimed
various amounts in an action
in rem
against the vessel in
respect of wages due as at various dates as well as interest and
costs of repatriation. The master also claimed
an amount in respect
of work done and expenses incurred. In what follows the plaintiffs in
case no AC127/99 will be referred to as
‘the first respondents’.
[2]
The second case was case no 134/99. This was
also an action
in rem
against the vessel. In this case the
plaintiffs were the master and crew of the MT ‘Argun’ who had
served on board the vessel
during the period 25 July 1995 to 31
January 1996. The main claim was in respect of unpaid wages due as at
24 July 1996. They also
had an alternative claim for an amount
allegedly due to them in terms of a settlement. In what follows I
shall refer to the plaintiffs
in case no AC134/99 as ‘the second
respondents’.
[3]
In the second judgment on appeal the learned
judge dealt with these two cases as well as a third case, which was
case no AC4/2002.
The plaintiffs in this case, also an action
in
rem
against the vessel, were the first twenty-one plaintiffs in
case no AC127/99. Their claims were in respect of wages due and
unpaid
for the period 1 July to 13 October 1999, being the day before
they were repatriated to Russia. In what follows I shall refer to
them as ‘the third respondents’.
[4]
The arrest by which the first action
in
rem
(case no AC127/99) was instituted took place on 14 July 1999
and the arrest by which the second action
in rem
(case no
AC134/99) was instituted took place on 23 July 1999.
[5]
On 30 July 1999 the Sheriff of Cape Town
applied to the Cape Provincial Division for an order
inter alia
declaring (i) that various parties at whose instance the vessel had
been arrested (the first and second respondents and two other
companies who are not parties to the present appeal) were jointly and
severally liable with such of the arresting parties to the
extent
that the vessel was under the arrest at their instance during the
said period, for all the sheriff’s expenses reasonably
incurred in
the preservation of the vessel as well as his reasonable remuneration
in relation to such expenses; in respect of the
period during which
the vessel was under arrest at the instance of that party, and (ii)
that the continued arrest of the vessel at
the instance of each of
the arresting parties be made conditional upon that party reimbursing
the sheriff within 10 days of demand
for his reasonable expenses for
the preservation of the vessel incurred during the period the vessel
was under arrest at the instance
of that arresting party, as well as
for his reasonable remuneration in relation to such expenses.
[6]
This application was dismissed by Cleaver J
in the High Court but succeeded on appeal to this Court. This Court’s
judgment, which
was delivered on 1 June 2001, is reported as
MT
Argun;
Sheriff of Cape Town v MT
Argun,
Her Owners and All
Persons Interested in Her and Another
2001 (3) SA 1230
(SCA).
[7]
The first and second respondents did not
reimburse the Sheriff of Cape Town for the preservation expenses and
remuneration referred
to in this Court’s order after he had
demanded such reimbursement and on 21 June 2002 at the instance of
the vessel’s owner Foxcroft
J declared that the arrests of the
vessel at the instance of the first and second respondents had lapsed
by operation of the order
made by this Court on 1 June 2001.
[8]
The vessel had in the meantime been arrested
on 21 February 2002 at the instance of the third respondents in case
no AC4/2002. Despite
the fact that the arrests at the instance of the
first and second respondents had lapsed Foxcroft J directed that the
first and second
actions proceed to trial together with the third
action. Special pleas to the effect that the first and second actions
had lapsed
when the arrests in those actions lapsed were dismissed in
the first judgment on appeal and the actions then proceeded to trial.
[9]
On 12 September 2002 Foxcroft J delivered the
second judgment which is now on appeal. He ordered the defendant
vessel, which is the
appellant before us, to pay:
(a) the capital amount of the plaintiff’s claims in
all three actions (amended in slight respects);
(b) interest at the rate of 15.5% per annum with effect
from the end of each month for which each plaintiff had claimed
wages;
(c) the plaintiffs’ costs of suit on a party and party
scale, including:
(i) the necessary travel costs of the master;
(ii) the sheriff’s reasonable and necessary costs
incurred in preserving the vessel and his reasonable remuneration
earned in respect
thereof from the date of her arrest until:
(aa) in the first and second actions, the lapsing of
each arrest; and
(bb) in the third action, the release of the vessel from
arrest; and
(iii) the costs of discovery.
He further ordered that the costs in each of the three
cases be paid by the defendant vessel and by her owner, the Russian
Federation.
In addition he declared that the first and second
respondents were entitled to execute their judgments
in rem
obtained in respect of the vessel against the vessel.
ISSUES ON APPEAL
[10]
Six issues were argued on appeal,
viz:
1. Whether the first and second actions lapsed when the
arrests by which they were instituted lapsed;
2. Whether the judge in the court below was justified in
ordering that the first and second respondents were entitled to
execute against
the appellant their judgments
in rem
obtained
against her;
3. Whether he was correct in ordering the appellant to
pay interest on the amounts adjudged to be due to the respondents
with effect
from the end of each month for which they had claimed
wages;
4. Whether he was justified in ordering the appellant to
pay interest on the capital amounts adjudged to be due to the
respondents
at the rate of 15.5%;
5. Whether he was empowered to order that the sheriff’s
preservation costs and remuneration in respect of the vessel during
the
period of her arrest in each of the actions should constitute
part of the respondent’s costs of suit; and
6. Whether the respondents should, irrespective of the
outcome of the appeal, be ordered to pay the costs of an additional
volume
of the appeal record which the respondents prepared for
inclusion therein and to which the appellant objected, as well as the
costs
of perusal thereof.
DID THE FIRST AND SECOND ACTIONS
IN REM
LAPSE
WHEN
THE ARRESTS LAPSED?
[11]
In regard to this issue Mr
Wragge,
who
appeared on behalf of the appellant, pointed out: that the first and
second respondents’ claims arise from contracts entered
into, not
with the owner of the MT ‘Argun’, ie the Government of the
Russian Federation, but with two companies, National Pacific
G.S.C.
SA in the case of the first respondents and Inaqua Co. in the case of
the second respondents; that it is not alleged that
the owner of the
vessel at the time of her arrest was personally liable to them; and
that the arrests by which the first and second
actions
in rem
were
instituted were based upon the fact that the respondents had maritime
liens over the vessel in respect of their claims.
[12]
Counsel submitted that in order to determine
the nature of the first and second respondents’ claims and the
maritime lien which
underpins their actions
in rem
and the
arrests by which they were instituted, it is necessary to have regard
to the relevant provisions of the Act and the rules
promulgated
thereunder against the backdrop of English Admiralty law as it was on
1 November 1983 when the Act was brought into operation.
He contended
that this was so because the ‘matter’ or issue between the
appellant and the first and second respondents is the
effect which
the lapsing of their arrests had on their actions
in rem.
This
issue is a matter in respect of which a Court of Admiralty of the
Republic sitting pursuant to the provisions of section 2(1)
of the
Colonial Courts of Admiralty Act 1890, 53 and 54 Vict, c 27, had
jurisdiction before the commencement of the Act on 1 November
1983.
This is because in terms of section 6 (1) of the Act the law
applicable is the law ‘which the High Court of Justice of the
United Kingdom in the exercise of its admiralty jurisdiction would
have applied with regard to such a matter’ at the commencement
of
the Act ‘insofar as that law can be applied’. (The reference to
‘the High Court of Justice of the United Kingdom’ was
presumably
intended to be a reference to the Supreme Court of England and Wales
as constituted by the Supreme Court Act, 1981: see
Brady-Hamilton
Stevedore Co and Others v MV
Kalantiao
1987 (4) SA 250
(D)
at 253 D and
MV
Stella Tingas :
Transnet Ltd v Owners of
the MV
Stella Tingas
and Another
2003 (2) SA 473
(SCA) at
479 G-H.)
[13]
Mr
Wragge
dealt in his argument with
various theories regarding the origin of the concept of the maritime
lien in English maritime law as well
as the ambit and effect of the
maritime lien in English Admiralty law and in particular with
maritime liens for seamen’s wages
and for master’s wages and
disbursements. On this part of his argument he relied heavily on the
judgment of this Court in
The MV
Andrico Unity
1989 (4)
SA 325
(A). He put particular emphasis on the following
dictum
of
Corbett JA (at 332 B):
‘The lien is asserted by the arrest of the ship in a proceeding
in
rem
and it then relates back to the time when it first attached.’
[14]
Counsel relied on a
dictum
of Lord
Diplock in The Halcyon Isle:
Bankers Trust International Ltd v
Todd Shipyards Corporation
[1981] AC 221
(PC) at 234 F-G (which
was approved in the court below in
The MV
Andrico Unity
1987 (3) SA 794
(C) at 805 H – 806 G). The
dictum
reads:
‘... any charge that a maritime lien creates on a ship is initially
inchoate only; unlike a mortgage it creates no immediate right
of
property; it is, and will continue to be, devoid of any legal
consequences unless and until it is “carried into effect by legal
process, by a proceeding
in rem”.
’
[15]
He contended further that proceedings
in
rem
are made up of two interdependent parts, the action
in rem
and the arrest of the maritime
res
and that it is the
arrest of the
res
which gives the action
in rem
utility
and effectiveness by affording the plaintiff pre-judgment security
and a potentially executable asset.
[16]
In the course of his argument Mr
Wragge
traced the development of the action
in rem
in England
culminating in the decision of the House of Lords in
Republic of
India and Another v Indian Steamship Co Ltd
(No 2)
1998 AC 878
(HL(E)) (reported in Lloyds Reports as
The Indian Grace
(No 2)
[1998] 1 Lloyds Rep 1
(HL)). In that case, which arose under s 34 of
the Civil Jurisdiction and Judgments Act 1982 (c 27), it was held
that the action
in rem
brought by the Republic of India
(Ministry of Defence) against the
Indian Endurance,
a sister
ship of the
Indian Grace,
in respect of damage to the
government’s cargo which was being carried on the
Indian Grace,
was barred because the Indian Government had previously started
an action in the subordinate judge’s court in Cochin against the
owners of the
Indian Grace
for damages in respect of part of
the cargo on the
Indian Grace
which had been jettisoned and it
obtained judgment on its claim some three and a half months after the
Indian Government’s writ
in rem
was issued.
[17]
The House of Lords held, agreeing on this
point with the Court of Appeal, that the English action
in rem
was
‘between the same parties, or their privies’, within the meaning
of section 34 of the Civil Jurisdiction and Judgments Act
1982, as
the action in which the government obtained judgment in Cochin; and
that ‘for the purposes of section 34 an action
in rem
is an
action against the owners from the moment that the Admiralty Court is
seized with jurisdiction’. In coming to this conclusion
Lord Steyn,
with whose opinion all the other law lords agreed, held that at least
as far as an action
in rem
based on a statutory right
in
rem
(as opposed to a maritime lien) is concerned, the procedural
theory as to the origin of the action
in rem
(in terms whereof
the proceeding
in rem
is to be regarded as an exceptional form
of procedure employed in order to compel the defendant’s
appearance) is to be preferred
to the personification theory (in
terms of which the ship is treated as a juridical entity endowed with
a measure of personality
and the action
in rem
is seen as a
proceeding against the vessel). Lord Steyn, in a passage in his
opinion to which Mr
Wragge
referred, made it clear that the
case before the House of Lords was not concerned with maritime liens.
‘That’, as he said (at
908H), ‘is a separate and complex
subject which I put to one side.’
[18]
Mr
Wragge
submitted that before the
Act came into force the characteristics of the South African action
in rem
were the same as the characteristics of the English
action
in rem
as at 1 November 1983. He submitted further that
it was against this backdrop that the Act and the Admiralty
Proceedings Rules which
were made pursuant to section 4 of the Act
and which came into operation on 1 December 1986 were drafted and
enacted. He argued that
under the Act and the Rules, for a claim to
remain enforceable by an action
in rem,
there must be a
co-existent arrest of the defendant maritime
res
with the
result that if an arrest lapses the action instituted thereby lapses
also because the utility and effectiveness provided
by the arrest has
been lost.
[19]
As far as the Act is concerned counsel
referred to s 1(2)(b)(iv) which made it clear that an action which
commenced
inter alia
by the giving of security, or an
undertaking as contemplated in s 3(10)(a) (ie where there was a
deemed arrest), would lapse if the
property were deemed to have been
released and discharged (because no further step was taken in the
proceedings within a year after
the security or undertaking was
given). In other words, the Act makes it clear that an action
commenced by a deemed arrest will lapse
if there is a deemed release.
He contended that it cannot have been contemplated by the legislature
that there would be a different
result where there is an actual
release following on the lapsing of an actual arrest.
[20]
As far as the rules are concerned
Mr
Wragge
relied strongly on rule 6 (3) read with rule 6 (2), in
terms of which a person who has an interest in the property concerned
and who
has given notice of intention to defend an action
in rem:
‘shall not merely by reason thereof incur any liability and shall,
in particular, not become liable
in personam,
save as to
costs, merely by reason of having given such notice and having
defended the action
in rem.’
(Rule 6 of the Admiralty Rules which came into operation
on 1 December 1986 has been replaced by Rule 8 of the Admiralty Rules
which
came into operation on 19 May 1997 but the wording is the same.
In what follows I shall refer to this rule by its new number.)
[21]
This subrule is important, so counsel
submitted, because it reverses for our practice the rule in the
English case of
The Dictator
[1892] P 304
in which Sir Francis
Jeune P held that when in an action
in rem
the owners enter
appearance, judgment can be given against them for the full amount of
the claim (even if such amount exceeds the
value of the
res
).
This judgment represented what Lord Steyn (at 908B) called ‘the
breakthrough’ and provided the particular characterisation
of the
action
in rem
which came to be known as the procedural theory.
Indeed Mr
Wragge
contended that it is evident from the
provisions of the Act and the Rules to which he referred that there
has been a departure in
South African Admiralty law from a general
application of the procedural theory and an adoption of certain
material attributes of
the personification theory.
[22]
Mr
Burger,
who appeared on behalf of
the respondents, submitted that English law does not require a
continuing arrest for an action
in rem
to be able to proceed.
He relied,
inter alia,
on the decision of the Probate, Divorce
and Admiralty Division in
The City of Mecca
(1879) 5 P 28.
In
this case it was held by Sir Robert Phillimore that the admiralty
division had jurisdiction to entertain an action
in rem
to
enforce what was regarded as substantially a judgment
in rem
given
by a Portuguese court in proceedings instituted against
The City
of Mecca
while she was in Lisbon, despite the fact that she
subsequently left Lisbon without giving security.
[23]
Mr
Burger
submitted that this case
indicates that the court did not consider a continuing arrest of the
vessel to be essential for the Portuguese
court to be able to give a
judgment
in rem
enforceable in England and it accordingly
demonstrates, so he submitted, that a continued arrest of a vessel
(or substitute security)
at all times was not necessary to pursue an
action
in rem
which had been commenced when the vessel was
arrested.
[24]
Mr
Wragge’s
answer to this argument
was that
The City of Mecca
indicated no more than that the
English court was prepared to recognise and enforce a
foreign
judgment
in rem
given after the vessel concerned was no
longer under arrest but that it did not follow from this that it
would have held that an
English
judgment
in rem
would
have been given if the original action
in rem
had been
instituted in England and the vessel had then left the jurisdiction
without giving security. In my view Mr
Wragge’s
contention
in this regard is correct and
The City of Mecca
cannot be
regarded as authority for the proposition that in English law an
action
in rem
will continue even if the arrest by which it was
instituted has lapsed.
[25]
In regard to the present position in England
it is clear that, as Lord Brandon of Oakbrook put it in
The August
8
[1983] 2 AC 450
(PC) at 456:
‘[b]y the law of England, once a defendant in an Admiralty action
in rem
has entered an appearance in such action, he has
submitted himself personally to the jurisdiction of the English
Admiralty Court,
and the result of that is that, from then on, the
action continues against him
not only as an action in rem but also
as
an action
in personam ....’
(My emphasis.)
[26]
If the present case had been heard in
England, therefore, on the lapsing of the arrest of the vessel the
actions would at the very
least have continued as actions
in
personam
against the vessel’s owner. That that is not our law
is clear from rule 8(3), the material provisions of which are quoted
in para
[20] of this judgment. In fact neither counsel was able to
refer us to authority directly in point on the issue to be decided.
[27]
Mr
Burger
relied, by way of analogy,
on the decision of this Court in
Thermo Radiant Oven Sales (Pty)
Ltd v Nelspruit Bakeries (Pty) Ltd
1969 (2) SA 295
(A), a case
involving an attachment to found jurisdiction at common law where it
was said that a valid attachment at the commencement
of the action is
sufficient to establish jurisdiction and that, even if the property
attached is destroyed during the course of the
proceedings, the court
retains jurisdiction. The applicable rule, which is based on civilian
authority cited in Voet, was formulated
as follows (at 310 D-E):
‘Jurisdiction having once been established at such time [ie, the
commencement of the proceedings] it continues to exist to the
end of
the action even though the ground upon which the jurisdiction was
established ceases to exist. (see Voet, 5.1.64;
R v de Jager,
1903
TS 36
at p38).’
[28]
Mr
Burger
contended that the
legislature clearly intended attachments (to which the rule set out
in
Thermo Radiant
applied) and arrests to be treated in the
same way and that if an additional jurisdictional requirement (a
continuing arrest) had
been intended to apply in the case of an
action
in rem
instituted by an arrest, the legislature would
have said so.
[29]
The difficulty I have with the arguments of
both Mr
Wragge
and Mr
Burger,
which are based on what
the legislature presumably intended, is that there is no clear
provision in the Act dealing with the point
at issue. The contentions
advanced by Mr
Wragge
(in paragraph [18] above) and Mr
Burger
(in paragraph [27] above) are both explicable on the basis, at
best for the side advancing them, that the legislature appears to
have
assumed that the law was as counsel submitted it to be. But
there is clear authority for the proposition that the fact that
Parliament
appears to have enacted a provision on a certain
assumption as to what the law was does not make that assumption
correct: see, eg,
Trivett & Co (Pty) Ltd v Wm Brandt’s Sons
and Co Ltd
1975 (3) SA 423
(A) at 435 B-C.
[30]
I have a further problem with Mr
Wragge’s
submission in this regard. If anything, Parliament appears to
have thought that it is not enough that an arrest has fallen away for
the action to lapse. A specific provision to that effect (s
1(2)(b)(iv)) appears to have been thought necessary, which undermines
the contention that the lapsing of an arrest automatically and
without more leads to the lapsing of the action.
[31]
I think, however, that the answer to the
problem is to be found in the rule of the civil law to which
reference was made in the
Thermo Radiant
decision. That the
rule in question was a general one appears from the decision of the
Transvaal Supreme Court in
R v De Jager
1903 TS 36.
In that
case a Transvaal court which had commenced hearing a criminal trial
in respect of an offence committed in the district of
Vryheid, which
was then in the Transvaal, was held on the basis of the rule to have
retained jurisdiction in the case despite the
fact that the district
of Vryheid was excised from the Transvaal after the commencement of
the trial and added to Natal.
[32]
Browne,
in his classic treatise on
the law of admiralty,
A Compendious View of the Civil Law and the
Law of Admiralty,
published in 1802, says at page 34 of volume 2
that the law ‘by which the proceedings of the court of admiralty
[were] governed
[was] composed of those parts of the civil law which
treat of maritime affairs (as far as the decisions of the Roman code
upon those
subjects have with us been deemed equitable), blended with
other maritime laws; the whole corrected, altered and amended, by
acts
of parliament and common usage’.
[33]
It must also be remembered that until the
High Court of Admiralty Act 1859, 22 & 23 Vict, cap 6, extended
the right to practise
in the High Court of Admiralty, the civilian
practitioners of Doctors’ Commons had the monopoly of admiralty
practice. I am satisfied
that the rule of the civil law applied in
R
v De Jager, supra,
and referred to in the
Thermo Radiant
case
would have formed part of the law that would have been applied in the
admiralty court before 1859 if the point presently under
consideration had come up for decision and that nothing that happened
thereafter, when common lawyers gained the right of appearance
in the
court and the court became part of the Supreme Court of the
Judicature on the enactment of the Judicature Acts 1873 – 1875,
would have altered the position.
[34]
It follows in my view that the court did not
lose jurisdiction in the first and second actions
in rem
when
the arrests lapsed and those actions continued. This conclusion
renders it unnecessary to express an opinion on the interesting
questions raised by Mr
Wragge
regarding the procedural and the
personality theories in relation to the development of the action
in
rem,
particularly in a case such as this, which, unlike
The
Indian Grace
(No 2),
supra,
concerns a maritime lien. (For
a useful discussion see Jonsson, ‘The Nature of the Action in Rem’,
(2001) 75
ALJ
105.)
In the circumstances the contentions
raised by Mr
Wragge
in regard to the first issue must be
rejected.
ARE THE JUDGMENTS IN THE FIRST AND SECOND ACTIONS
IN REM
EXECUTABLE AGAINST THE APPELLANT?
[35]
I turn to deal with the issue as to whether
Foxcroft J erred in ordering that the first and second respondents
were entitled to execute
their judgments
in rem
obtained in
respect of the vessel against the vessel notwithstanding that the
arrests had lapsed.
[36]
In arguing this part of the case Mr
Wragge
submitted that the judgments in the first and second actions did
not give rise to any personal liability on the part of the owner
and
were therefore not enforceable against the owner’s assets, such as
the vessel.
[37]
I do not agree with this contention. Once it
is accepted that the appellant must fail in respect of the first
issue it follows that
the judgments given in the first and second
actions
in rem
must stand. Indeed Mr
Wragge
conceded
that, if he failed on the first point, the judgments given in the
first and second actions could be sued on in an action
in rem
in
a foreign admiralty court if the vessel were found within such
court’s area of jurisdiction. He contended, however, that they
could only be executed upon against the vessel in the jurisdiction of
the Cape admiralty court if further actions
in rem
were
instituted and judgments given thereon. The contention cannot be
upheld. It is of course necessary, in order to enforce a judgment
in
rem
given against a vessel in a foreign admiralty court, to ask a
domestic admiralty court in an action
in rem
to order that it
be enforced because such a judgment would not be executable without
more in that domestic jurisdiction. But it would
be absurd if a
litigant armed with a judgment of a South African admiralty court
against a particular vessel had to approach that
same court for a
further order allowing its own earlier order to be enforced against
that very vessel while she is within its own
area of jurisdiction. I
am accordingly satisfied that Mr
Wragge’s
contentions on the
point must also be rejected.
THE INTEREST ISSUES
[38]
In my opinion the two issues relating to
interest can be taken together.
Section 5 (2) (f) of the Act, which deals with the
court’s powers in the exercise of its admiralty jurisdiction,
provides as follows:
‘(2) A court may in the exercise of its admiralty jurisdiction ─
. . .
(f) make such order as to interest, the rate of interest in respect
of any sum awarded by it and the date from which interest is
to
accrue, whether before or after the date of the commencement of the
action, as to it appears just’.
The section confers a wide and unfettered jurisdiction.
[39]
No evidence was placed before the court
a
quo
to enable it to decide what rate would be just or what date
should be fixed upon as the date from which interest at that rate
would
be calculated.
[40]
The approach to be adopted by this Court in
deciding whether it would be appropriate to interfere with the
exercise by the court
a quo
of its discretion in a comparable
situation was set out in
Adel Builders (Pty) Ltd v Thompson
2000
(4) SA 1027
(SCA), a decision on
section 2A
of the
Prescribed Rate of
Interest Act 55 of 1975
.
Section 2A
(5) of that Act provides as
follows:
‘(5) Notwithstanding the provisions of this Act but subject to any
other law or an agreement between the parties, a court of law
... may
make such order as appears just in respect of the payment of interest
on an unliquidated debt, the rate at which interest
shall accrue and
the date from which interest shall run.’
[41]
At 1032 H – J of the
Adel
case
Howie JA said:
‘Acting in terms of ss (5), it was open to the Court, in fixing the
date from which interest was to run, to give effect to its
own view
of what was just in all the circumstances. No question of
onus
was
raised then or in the notice of appeal. Nor could it have been. The
discretion afforded by s 2A(5) was of the nature referred
to in a
long line of cases in this Court from
Ex parte Neethling and
Others
1951 (4) SA 331
(A) onwards. Plainly, if parties wish
certain facts and circumstances to be weighed in the exercise of such
a discretion they must
establish them. But there are no
facta
probanda.
No enquiry arises as to whether a necessary fact has
been successfully proved. Similarly, absence of proof does not result
in failure
on any issue. Indeed, there are no evidential issues to
attract any onus.
[42]
In terms of the decision in
Ex parte
Neethling and Others, supra,
to which reference was made in the
Adel
case, the Court is only entitled to interfere with the
exercise of a discretion of the kind here under discussion if it
comes to the
conclusion that the court below did not exercise a
judicial discretion. The reason for this given in the
Neethling
case at 335 H is that:
‘in cases of this kind the Appeal
Court, because of the nature of the case, has only a limited power of
correction’.
[43]
In the present matter no basis was put
before us for concluding that Foxcroft J did not exercise his
discretion judicially. It follows
that the appeal on these two issues
must fail.
PRESERVATION COSTS AND EXPENSES
[44]
The next issue to be considered is whether
the judge erred in holding that the costs incurred by the Sheriff of
Cape Town in preserving
the vessel and his reasonable remuneration
earned in connection therewith during the period that the vessel
remained under arrest
should properly constitute part of the
respondents’ costs of suit in enforcing their claims.
[45]
It will be remembered that the court
a
quo
ordered that the respondents’ costs of suit in all three
actions were to be paid by the appellant vessel and the Russian
Federation.
The effect of ordering that the sheriff’s preservation
costs and his reasonable remuneration in respect thereof are to be
included
in the costs of suit therefore means that the burden of
paying such costs rests not only on the appellant but also on the
vessel’s
owner, the Russian Federation.
[46]
It is clear from rule 8 (3), the wording of
which has been quoted in paragraph [20] above (which enacts the rule
laid down by Dr Lushington
in
The Volant
[1842] EngR 451
;
(1842) 1 W Rob 383
,
166 ER 616
, that although the liability of an appearing owner in an
action
in rem
is not
in personam
and
is limited
to the value of the
res,
he can also be held liable
in
personam
for costs) that Foxcroft J’s decision to order the
owner of the vessel, which had appeared to defend the actions
in
rem,
to pay the respondents’ costs of suit therefore cannot be
faulted. The question for consideration, however, as has been stated
is
whether he correctly included the sheriff’s preservation costs
and remuneration in the costs of suit.
[47]
Mr
Wragge
submitted that a clear
distinction is
drawn in the Act between preservation costs and
costs of suit. He referred in this regard to ss (4)(a) and (10) of s
11, which deals
with the ranking of claims. Subs 4(a) provides that
a claim ‘in respect of costs and expenses incurred to preserve the
property
in question or to procure its sale and in respect of the
distribution of the proceeds of the sale’ ranks for payment as a
first
charge against the proceeds of the sale of the vessel. Subs
(10) deals,
inter alia,
with the costs of enforcing a claim
and provides that such costs ‘shall for the purposes of this
section [
ie,
s 10, the ranking section] be deemed to form part
of the claim’.
[48]
While it is true that preservation costs and
expenses are differentiated, for ranking purposes, from the costs of
enforcing the claim,
this cannot detract from the fact that a costs
order covers not only the costs of instituting a claim and
prosecuting it to judgment
but also the expense of (a) executing
against property belonging to a judgment debtor, (b) preserving it
until the execution sale
and (c) the sale itself. I do not think that
the fact that such expenses were incurred in this case before
judgment and not, as is
usually the case in non-maritime cases,
thereafter can operate so as to deprive them of their character as
costs. It is true that
where they are incurred
before
judgment
it is not clear at that stage that they will be subject to a
subsequent order that the defendant is to pay them; but where
a costs
order is given in due course against the defendant there is no reason
why they should not be covered thereby. The fact that
portion of such
costs enjoys a higher ranking than other portions cannot affect the
position. It follows that Mr
Wragge’s
contentions on this
part of the case cannot be upheld.
COSTS OF THE ADDITIONAL VOLUME
[49]
The last issue to be considered is the
question whether the respondents should bear the costs of an extra
volume of the record which
they caused to be prepared. This volume
included documents which were before the court at an earlier stage in
the proceedings as
well as the judgment given by Foxcroft J declaring
that the arrest of the vessel at the instance of the first and second
respondents
had lapsed by operation of the order made by this Court
in the Sheriff’s appeal.
[50]
Mr
Wragge
conceded that on the
authority of the judgment of the Full Bench of the Transvaal
Provincial Division in
Anastassiades v Argus Printing and
Publishing Co Ltd
1955 (2) SA 349
(T) at 353 A – B the record
should contain all the documents which were before the court below
and that it is not for an appellant
to decide unilaterally to omit
what he or she thinks is immaterial. (It is, of course, another
matter if both or all parties agree
that certain documents are
immaterial. If one party insists on unnecessary documents being
included or both do not agree on their
exclusion an appropriate costs
order can be made.)
[51]
In the present case the only argument
advanced on behalf of the appellant is that the documents in the
additional volume were not
before the court below. The short answer
to that contention is: they were. They related not to different
proceedings, as Mr
Wragge
argued, but to an earlier chapter in
the same proceedings. Moreover, included in the volume was the
judgment declaring the arrests
to have lapsed to which Mr
Wragge
himself referred in his argument. In the circumstances it is
clear that the appellant’s contentions on this point must fail.
COSTS ON APPEAL
[52]
It remains to consider what costs order
should be made on appeal.
[53]
As has been pointed out earlier in this
judgment, in terms of rule 8(3) of the Admiralty Rules a costs order
may be made against an
owner who has defended an action
in rem
brought against his ship. The bringing of an appeal against an
order made in such an action against a ship must be regarded as an
extension of the defending of the action. It follows that it is
competent for a costs order to be made against the Russian Federation
in the appeal.
[54]
Marais JA, who was a member of the Court
which heard the appeal, was as a result of indisposition unable to
participate in the finalisation
of the judgment. This judgment is
accordingly the judgment of the court in terms of s 12(3) of the
Supreme Court Act 59 of 1959.
[55]
The following order is made:
1. The appeal is dismissed.
2. The appellant and the Russian Federation are ordered,
jointly and severally, to pay the costs of the appeal.
……………
..
IG FARLAM
JUDGE OF APPEAL
CONCURRING:
NAVSA JA
CLOETE JA
JONES AJA