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[1992] ZASCA 95
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Weissglass NO v Savonnerie Establishment (288/90) [1992] ZASCA 95; 1992 (3) SA 928 (AD); [1992] 2 All SA 275 (A) (29 May 1992)
\CCC
CASE NO 288/90
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the
matter between
DOV WEISSGLASS NO
APPELLANT
and
SAVONNERIE ESTABLISHMENT
RESPONDENT
CORAM
: CORBETT CJ, E M GROSSKOPF, NESTADT,
VAN DEN HEEVER JJA et HOWIE AJA
DATE HEARD
: 10 MARCH 1992
DATE
DELIVERED
: 29 MAY 1992
JUDGMENT NESTADT, JA
:
This appeal arises from an order made in the Cape Provincial Division in the
exercise of its
2
admiralty jurisdiction under the Admiralty Jurisdiction Regulation Act, 105
of 1983 (the Act).
The respondent (Savonnerie) is a Lichtenstein corporation
carrying on business as financiers. On 24 January 1986 it brought an application
in the Cape Provincial Division for an order attaching two motor fishing
vessels. They were the "Azgad IV' and the "Hashomer". The
boats were berthed in
the Table Bay docks. They were the property of an Israeli company called
Atlantic Fishing Shipping Company
Ltd (Atlantic). It carried on the business of
fishing in South African waters. The object of the attachment was to found
jurisdiction
in an action which Savonnerie wished to institute in the Cape
Provincial Division against Atlantic for payment of the sums of 300
000 and 45
000 US dollars. Atlantic was cited as the first
3
respondent. The appellant (Weissglass), an advocate practising
in Israel, was joined as the second
respondent. He was sued in his capacity as what is termed the "receiver" of
Atlantic. This would appear to correspond to our judicial
manager. Atlantic had
been placed under receivership by order of an Israeli court in September 1985.
Savonnerie's application was
brought ex
parte
and as a matter of urgency.
It came before ROSE-INNES J who granted the relief claimed. The vessels were
attached. On 21 February
1986 Weissglass, having been served with the order and
acting in his official capacity, brought an application against Savonnerie
to
set the order of ROSE-INNES J aside. He also sought the release of the boats
from attachment. Savonnerie opposed Weissglass's
application. Answering and
replying affidavits having been filed, the matter
4
was argued before NEL J. Save for directing that Savonnerie's claim for 45
000 US dollars be reduced to R80 000, the learned judge
ordered that the
application be dismissed. So the attachment of the vessels to found jurisdiction
remained. Weissglass now appeals
against that order. He does so with the leave
of the judge a
quo
.
The broad issue that arises for determination is whether the application to
attach the two vessels was correctly granted. This issue
must be considered with
the Act in mind. For, as will be seen, Savonnerie's application was founded on
and ROSE-INNES J's order was
made in terms of the Act. It will be apparent from
what has been said that both Savonnerie and Atlantic are
peregrini
of the
Republic as a whole. At common law
5
therefore, no additional
ratio jurisdictionis
being present, the
attachment of Atlantic's property would not have sufficed to found jurisdiction
in the Cape Provincial Division
and would have been refused. The Act, however,
mitigates the inconvenience of this rule (Shaw:
Admiralty Jurisdiction and
Practice in
South
Africa
49). Sec 2(1) confers admiralty jurisdiction
on the various provincial and local divisions of the Supreme Court in respect of
any
"maritime claim" irrespective of the place where it arose or the residence
or domicile of the owner of the ship. One of the ways
such a claim may be
enforced is by an action in
personam
(sec 3(1)). In terms of sec 3(2) (b)
such an action lies
inter alia
against a person whose property within the
court's area of jurisdiction has been attached to found or to confirm
jurisdiction. Sec
6
4(4)(a) deals with such attachment. It provides:
"Notwithstanding anything to the contrary in any law relating to attachment
to found or confirm jurisdiction, a court in the exercise
of its admiralty
jurisdiction may make an order for the attachment of the property concerned
although the claimant is not an
incola
either of the area of jurisdiction
of that court or of the Republic."
I must revert to the concept of a maritime
claim. It follows from what has been said that the
existence of such a claim is a fundamental prerequisite
to the exercise by the court of its admiralty
jurisdiction. The term "maritime claim" is
comprehensively defined in sec 1(1)(ii). Twenty-six
categories are enumerated. The two which are relevant
are contained in sub-paragraphs (1) and (z). They
read:
"(1) any claim in respect of goods supplied or services rendered to a ship
for the employment or maintenance thereof;"
7
"(z) any claim not falling under any of the previous paragraphs which a court of
admiralty of the Republic referred to in the Colonial
Courts of Admiralty Act,
1890 (53 and 54 Victoria, C.27), of the United Kingdom, could have heard and
determined immediately before
the commencement of this Act, or relating to any
matter in respect of which any court of the Republic is empowered to exercise
admiralty
jurisdiction."
Paragraph (z)
requires some explanation. As SHAW
op cit
, at 1-2 puts it, the section
is one of those in
the Act which does not "relieve the South
African
practitioner of the burden of history". Briefly
stated, its effect is to render applicable those
principles of the law relating inter alia to claims
for necessaries supplied to ships which the English High
Court would have applied in 1890 (cf
Beaver Marine (Pty)
Ltd vs Wuest
1978(4) SA 263(A) at 274). The source of
these principles is two English Admiralty Court Acts.
8
In terms of sec 6 of the 1840 one (3 and 4 Vict. c. 65),
jurisdiction is conferred to decide "all claims...for necessaries supplied
to
any foreign ship or sea-going
vessel". Sec 5 of the 1861 Act
(24 Vict, c.10)
extends jurisdiction by
conferring it "over any claim for necessaries supplied to any ship elsewhere
than in the port to which the
ship belongs" unless the owner is domiciled in the
country. These provisions have, as will be seen, been considered and applied by
the English courts in a number of cases and, seeing that paragraph (z), read
with sec 6(1) of the Act, enjoins the application of
English law, it is to those
cases that one must look in order to determine what are necessaries and
therefore what is a maritime
claim under this head.
Savonnerie's case was that the payment of sums referred to were loans by it
to Atlantic giving rise
9
to maritime claims which it was entitled to enforce by
an action in.
personam
against Atlantic in terms of
the
Act. Savonnerie therefore relied on sec 3(2)(b) read
with sec 4(4)(a).
Whether this was well-founded must
be decided against the background of the
following
undisputed facts. Atlantic had been carrying on
fishing
operations for a number of years prior to 1986. Its
agent in Cape
Town was a company called Quick, Louw and
Moore (Pty) Ltd (QLM). It handled
the provisioning of
Atlantic's ships, their bunkering and repair,
port
facilities, the hiring of crew and the shipment of fish
caught to
Israel (where it was, in the main, marketed).
Up to 1985 Atlantic's business
was financed by Atlantic
itself. It would remit funds from Israel to QLM
in
payment of QLM's charges and disbursements. By the
beginning of 1985
however Atlantic's financial position
10
had deteriorated. It owed QLM certain monies in respect
of
disbursements that QLM had already made. Moreover,
there were a number of accounts for services rendered to
Atlantic's
vessels that were due for payment. The
crisis was such that Azgad IV was unable to be
provisioned and fitted in order to put to sea to fish.
And Hashomer had been ordered not to return to port for
fear of her arrest or attachment there by creditors. On
21 February 1985 the manager of Atlantic's office in
Cape Town, a Mr Tsemach, sent the following message (by
means of what is referred to as a "fax") to Atlantic in
Israel:
"4.
FUNDS - FUND REQUIREMENTS
Based on 'Nola' arriving next call 10.4.1985
one vessel operating - 40 days fishing
(i) bankers R130 000-00 (Azgad 4)
(ii) agency 68 000-00
(iii) cold store 50 000-00
(iv) cartons 20 000-00
(v) stevedores 15 000-00
(vi) blue continent 6 000-00
11
(vii) I & J 8 000-00
(viii) Teescape 22 000-00
(ix) Victor 20
000-00
(x) Appeldoorn 20 000-00
(xi) Various creditors 45
000-00
(xii) Salaries
80 000-00
R484 000-00" (My numbering.)
"Nola" was a vessel which was on 10 April 1985 to ship
fish caught by
Atlantic from Cape Town to Israel. The
catch was to come from forty days of
fishing by Azgad
IV. It was therefore essential that it put to sea as
soon as possible. To this end the goods and services
listed in the fax had immediately to be paid for. At
about the same time QLM demanded from Atlantic that it
be furnished with a guarantee for 300 000 US dollars.
Failing this it refused to disburse any further amounts.
On behalf of Atlantic a Mr Mila Brener of Israel dealt
with the matter. He was Atlantic's chief executive
officer and also held a substantial minority
12
shareholding in the company. In addition he was the
chief
executive officer of Savonnerie. At his instance the Bank of America in
Luxembourg on 25 February 1985 sent a telex to Atlantic
confirming its
preparedness to guarantee payment by Atlantic to QLM of 300 000 US dollars. On
the following day a letter to this
effect was sent by the bank to QLM. On the
strength of this QLM paid for the items listed in the fax. This enabled Azgad IV
to leave
port to fish. And Hashomer returned to port whereafter it again put to
sea to continue fishing. But financial problems continued.
By April 1985
Atlantic's account with QLM stood at R704 000. On 18 April QLM informed Atlantic
that it would on 10 May 1985 (later
extended to 14 May 1985) "call up" the
guarantee (it was still operative) unless its indebtedness were discharged by
then. On 14
May 1985 the bank paid QLM 300 000 US dollars (equivalent to
13
R574 162,68) and QLM released the bank from its
guarantee. A Mr Louw, a director of QLM filed an affidavit in support of the
application to set aside the attachment. According to
the affidavit the money
was "in substitution of the guarantee in order to enable QLM to recoup its
charges and disbursements made
by it over the preceding months". These would
have included the amount of R484 000 referred to in the fax dated 21 February
1985.
(Details of the further expenditure incurred by QLM on behalf of Atlantic
are not given. Nor is it explained how the shortfall of
some R130 000, being the
difference between the sums of R704 000 and R574 162,68, was met.)
What has been stated relates to Savonnerie's claim for 300 000 US dollars. I
turn now to the facts relevant to its other claim, viz
for 45 000 US dollars.
Atlantic obtained its fuel requirements (for the two
14
vessels in question) from Mobil Oil Southern Africa
(Pty) Ltd (Mobil). Atlantic had an account with Mobil and from time to time
made payments in reduction of its indebtedness to Mobil
in respect of the fuel
it had purchased. By May 1985 however the credit afforded by Mobil to Atlantic
had reached its limit. Mobil
informed Atlantic that no further fuel (Brener uses
the word "bunkers") would be supplied unless a "cash payment" was made. This
led
to the transfer on 29 May 1985 from a bank in Israel of 45 000 US dollars to
QLM's bank account in Cape Town. On Tsemach's instructions,
QLM then paid Mobil
the sum of R80 000 (being slightly less than the rand equivalent of 45 000
dollars) on Atlantic's behalf "in
respect of Mobil's existing account" (I have
quoted from Louw's affidavit).
The Act does not expressly empower a court to
15
set aside an attachment order granted under sec 4(4)(a). Nevertheless, it was
not in dispute that the court a
quo
had this power at common law (cf
Cargo Laden and Lately Laden on Board the MV Thalassini AVGI vs MV Dimitris
1989(3) SA 820(A) at 834 C) . Although Weissglass was in this respect the
applicant, Savonnerie bore the onus of proving that its
application for an
attachment order was correctly granted. The principle is that a party cannot by
obtaining ex
parte
an order in his favour secure a more advantageous
position than he would have been in if the other party had, consequent upon
notice,
had an opportunity of opposing (
Bradbury Gretorex Co (Colonial) Ltd
vs Standard Trading Co (Pty) Ltd
1953(3) SA 529(W) at 531 B-C; the
MV
Thalassini
case at 834 D-E). What Savonnerie had to prove was a prima facie
case on the merits; ie it had to tender evidence which, if
16
accepted, established a cause of action (
MV Thalassini
at 831 H-I). But in seeking to do this, Savonnerie was not confined to the
allegations made in its application for an attachment order.
It was entitled to
rely on what is alleged in its answering affidavit filed in opposition to the
application to set aside the attachment
(see
MV Thalassini
at 834 F-G
where what was stated by MARAIS J in
Transol Bunker BV vs MV Andrico Unity
and Others
1987(3) SA 794(C) at 799 is approved).
On behalf of Weissglass, Mr
Mitchell
submitted in the first place that
there were a number of factors which, cumulatively regarded, should have
resulted in Savonnerie's
application being refused. In summary they were (i)
whilst rule 4(1) of the Admiralty Proceedings Rules authorises an application
for the attachment of property to found jurisdiction to be made
17
ex
parte
, the circumstances of the present matter
were
such that notice should have been given; (ii) there had been a (probably
deliberate) non-disclosure of certain material facts by Savonnerie;
(iii) its
application was brought with an ulterior motive; and (iv) it was not urgent. It
was further argued that sec 4(4)(a) afforded
the court a discretion whether or
not to grant the attachment order and that the factors referred to should have
led the court to
exercise its discretion against Savonnerie.
I deal with the last-mentioned point first. It is true that there is
authority in support of the proposition that sec 4(4)(a) confers
a discretion on
the court (as, for example,
Mediterranean Shipping Co vs Speedwell Shipping
Co Ltd and Another
1986(4) SA 329(D) at 336 C; see too
Shaw
,
op
cit
, 49-51). But in
18
my view this is not correct. Save possibly where the
application is an abuse of the court's process or in some other exceptional
case,
the remedy provided by the section is not a discretionary one. The use of
"may" in a statute is not conclusive of the legislature
having intended to
confer a discretion on the court. It may indicate the conferral of a power
coupled with a duty to use it (
CIR vs I H B King and A H King
1947(2) SA
196(A) at 209). This is the position here. At common law the court has no
discretion to refuse an attachment to found
jurisdiction if the requirements of
such an application are satisfied (
Longman Distillers Ltd vs Drop Inn Group
of Liquor Supermarkets (Pty) Ltd
1990(2) SA 906(A) at 914 E-F). Sec 4(4) (a)
extends the scope of common law attachments to found jurisdiction to admiralty
matters.
Parliament must therefore be taken
19
to have intended that the relevant principles of the common
law should apply to applications under this section (even though a
peregrinus
may be the applicant). Consistent with this approach,
MV
Thalassini
(at 833 B-C) decided that there was no discretion to decline to
exercise the power conferred by sec 5(3)(a) of the Act. This section,
too, uses
the word "may" (in relation to a court ordering the arrest of property in
actions
in rem
) .
I have taken account of the detailed submissions advanced in support of the
factual basis of the argument under consideration, ie
that set out under
(i)-(iv) above. Suffice it to say that although the argument is not without
merit, I remain unpersuaded that it
should succeed. In my judgment there is
insufficient warrant for finding that Savonnerie should have given
20
notice of its application or that there was any material
non-disclosure or that the application was not urgent or that an ulterior
motive
can be inferred.
A second argument advanced on behalf of Weissglass amounted to this: that
Savonnerie had not shown that it had any claims against
Atlantic at all, ie
whether maritime or otherwise. Plainly, if this be correct, its application for
an attachment order was bound
to fail. No
prima facie
case would have
been established. In his application Weissglass sought to make out the case that
the transfer of the sums of 300
000 US dollars and R80 000 came not from or on
behalf of Savonnerie but from Atlantic's own funds. In the light of Savonnerie's
opposing
affidavit however Mr
Mitchell
wisely abandoned this point. Both
amounts
21
were manifestly transferred at the instance of Savonnerie and
must be regarded as payments by it to
Atlantic. But counsel advanced a further argument. It
was
that it had nevertheless not been shown that such
payments were (as was
Savonnerie's case) loans by it to
Atlantic; the payments were made on account of the
purchase price of fish which Atlantic had during the
approximate period from February to April 1985 sold and
delivered to Savonnerie. The argument is deserving of
serious consideration. Savonnerie's affidavits on the
issue
are open to criticism. In its application
Savonnerie baldly alleges that
"arising out of an
agreement entered into" between Atlantic and
Savonnerie
the amounts of 300 000 and 45 000 US dollars were lent
and
advanced. The court is left in the dark as to when
the loans were requested,
whether the agreement was oral
22
or written and who acted for Atlantic. Nothing is said
regarding the terms of the loans, when they were repayable and whether interest
was to be charged. No extracts from the books of account of either Atlantic or
Savonnerie were produced to substantiate Savonnerie's
version. Its founding
affidavit states that an advocate Talmon of Tel Aviv "represented (Savonnerie)
in the aforesaid transactions".
On the other hand, according to its opposing
affidavit, it was Brener who did this. I have explained earlier that the 300 000
US
dollars was paid in substitution of the guarantee for this amount. There is
no mention of this in Savonnerie's application. Savonnerie
does not dispute that
it purchased fish from Atlantic (for the sum of approximately 500 000 US
dollars). The allegation is however
that this indebtedness was discharged not
by
23
means of the 300 000 and 45 000 US dollars but by other
payments. But little detail and no documentary evidence of these payments
is
adduced. Another factor which it
is said casts suspicion on the truthfulness of Brener and indicates that the
underlying transaction is contrived is the following.
In November 1985 Brener
admittedly requested QLM to treat the amounts remitted to it on Atlantic's
behalf as loans to QLM and to
include such amounts in the maritime claims which
QLM had against Atlantic.
That these are unsatisfactory features of Savonnerie's case cannot be
gainsaid. They detract from the veracity of the allegations
on which it is
based. It must also be borne in mind that the remedy of attachment to create
jurisdiction is an exceptional one which
is to be applied with care and caution
(Ex Parte
24
Acrow Engineers (Pty) Ltd
1953(2) SA 319 (T) at 321
H;
Thermo Radiant Oven Sales (Pty) Ltd vs Nelspruit Bakeries (Pty) Ltd
1969(2) SA 295(A) at 302 C) . Even
so, I do not think that it can be said that Savonnerie failed (for this
reason) to establish a
prima facie
case. For this conclusion to be
warranted it would have to be quite clear that it has no action or cannot
succeed (
MV Thalassini
at 832 A-B). In my opinion, giving full weight to
the criticisms referred to, this has not been shown. We must be careful not to
enter into the merits of the case or at this stage to attempt to adjudicate on
credibility, probabilities or the prospects of success.
It was only in the
replying affidavit that it was pertinently alleged on behalf of Weissglass that
the payments by Savonnerie to
Atlantic were in respect of the fish. So
Savonnerie has not had a proper opportunity of dealing with the point. If
then
25
this
causa
for the payments is left out of account and
seeing a donation is not presumed (especially in a
commercial transaction
between companies), the only other rational explanation for the payments is that
they were a loan. In the absence
of evidence that a time for repayment was
agreed upon, Atlantic would have been obliged to repay it on the lapse, after
notice, of
a reasonable time. In its application Savonnerie alleges that a
demand for repayment was made on 6 September 1985. We do not know
the terms of
the demand but Weissglass has not alleged that a reasonable period was not
given. Brener explains why he requested QLM
to include Savonnerie's payments to
Atlantic as part of QLM's claim against Atlantic. Such explanation cannot at
this stage be said
to be an unacceptable one. For the rest, the matters relied
on by Weissglass would be
26
for the trial court to determine. The argument
under
consideration must fail.
A further point raised on behalf of
Weissglass was that the court a
quo
should in its discretion have
declined to exercise its admiralty jurisdiction in terms of sec 7(1)(a) of the
Act. It provides
"A court may decline to exercise its
admiralty jurisdiction in any proceedings instituted or to be instituted, if
it is of the opinion that the action can more appropriately
be adjudicated upon
by another court in the Republic or by any other court, tribunal or body
elsewhere."
The section would seem to give the court a discretion,
namely to decline to exercise jurisdiction on the ground
of
forum non conveniens
(
Katagum Wholesale Commodities
Co Ltd vs The MV PAZ
1984(3) SA 261(N) at 266 I). The
submission that this should have been done rested on the
following propositions: (i) the disputed transactions
relate in large measure to events which occurred in
27
Luxembourg and Israel; (ii) Atlantic is an Israeli company
which is under receivership in Israel; (iii) the parties were already engaged
in
litigation in Israel arising from the operation of the vessels in question which
litigation has not been concluded; (iv) when
the matter goes to trial it would
be more convenient that the litigation be conducted in Israel as most of the
witnesses and relevant
documentation are there; (v) both parties are
peregrini
; (vi) the law applicable to the transactions in issue is not
South African law but that of Israel or some other foreign law. I am
not sure
how cogent these points are. But in any event there is a short answer to the
argument. It seems to me that a respondent
who seeks to rely on sec 7(1)(a) as a
defence should generally raise the issue in his papers. Weissglass did not do
so. He did not
specify which
28
forum he considered to be the appropriate one. It would in the
circumstances be unfair to non-suit Atlantic on this ground (which
is not dealt
with by the
court a
quo
).
This brings me to the fourth main submission advanced on behalf of
Weissglass. It was that the payments in question did not give rise
to a maritime
claim. NEL J held that they did. A preliminary question is whether this finding
is appealable. On behalf of Savonnerie,
Mr
Hofmeyr
submitted that it was
not. Counsel relied on sees 7(2) and (4) of the Act. They read:
"(2) When in any proceedings before a
provincial or local division, including a circuit local division, of the
Supreme Court of South Africa the question arises as to whether
a matter pending
or proceeding before that court is one relating to a maritime claim, the court
shall forthwith decide that question,
and if the court decides that -(a) the
matter is one relating to a maritime
29
claim, it shall be proceeded with in a court competent to exercise its admiralty
jurisdiction, and any property attached to found
jurisdiction shall be deemed to
have been attached in terms of this Act; (b) the matter is not one relating to a
maritime claim,
the action shall proceed in the division having jurisdiction in
respect of the matter: Provided that if jurisdiction was conferred
by the
attachment of property by a person other than an
incola
of the court, the
court may order the action to proceed as if the property had been attached by an
incola
, or may make such other order, including an order dismissing the
action for want of jurisdiction, as to it appears just.
(4) No appeal shall lie against any decision or order made under subsection
(2)."
The argument was that the application before
the court
a
quo
was a "proceeding"; that the question had arisen
as
to whether the matter related to a maritime claim;
that this question had been decided (affirmatively);
accordingly no appeal lay. I am unable to agree.
30
To accede to the argument would mean that where the
existence of a maritime claim is in issue, there is no
appeal from the grant or refusal of an application to
set aside an attachment order in terms of sec 4(4)(a).
Such an interpretation would require clear language. I |
have no doubt that secs 7(2) and (4) were not intended
to and do not have this far-reaching effect. Mr
Hofmeyr
emphasised that "proceedings" ("verrigtinge") is
a word capable of bearing a wide meaning. That is true
(see
S vs Swanepoel
1979(1) SA 478(A) at 488 E-H). But
it was not used in the opening part of sec 7(2) to
include an application for an attachment order. The
respective references in sub-paragraphs (a) and (b) to
"property attached" and "attachment of property"
postulate a proceeding which is already pending. In
31
particular the section applies to the case where
the
court is seized with an action. That is clear from the
reference in
sub-paragraph (b) to "the action shall
proceed". And if one has regard to the
signed Afrikaans
text, the same applies to "it shall be proceeded with"
in
sub-paragraph (a). The "it" is given as "die
aksie". Where in such an action
there is a dispute as
to whether the claim sought to be enforced is
a
maritime claim, the court must forthwith "decide" the
issue. It has to
classify the claim. As in the
legislation under consideration in
Nasionale
Vervoerkommissie van Suid-Afrika vs Salz
Gossow
Transport (Edms) Bpk
1983(4) SA 344(A) at 356 A - 357
D,
this means coming to a decision on the merits. If the
claim is a
maritime one the action proceeds in the
admiralty courts. Otherwise the
division of the
32
Supreme Court having jurisdiction will consider the claim in
the exercise of its ordinary jurisdiction
(unless the action is dismissed in terms of the proviso to sub-paragraph
(b)). And in order to achieve finality sec 7(4) precludes
an appeal. In this way
protracted litigation on a jurisdictional issue is avoided. These considerations
do not apply to an application
for attachment. It is but a preliminary step to
the institution of an action. There is no decision on the merits. The matter is
brought
ex
parte
and adjudicated on affidavit. Only a prima facie case
has to be made out. In terms of sec 12 of the Act a judgment of a court in
the
exercise of its admiralty jurisdiction is subject to appeal as if such judgment
was that of a provincial or local division of
the Supreme Court in civil
proceedings. NEL J's judgment was appealable in
33
accordance with this provision.
As I have said, Savonnerie
relies on subparagraphs (1) and (z) of the definition of maritime claim. It is
convenient to begin with
sub-paragraph (z). The question is whether Savonnerie's
claim is one for necessaries. There are really two aspects to the enquiry.
The
first is: what are necessaries? The term has been given a wide meaning by the
English courts. It is not confined to what is absolutely
necessary. Nor is any
distinction drawn (as it used to be) between necessaries for the ship and
necessaries for the voyage. In
The Riga
26 LTR (1872) 202, Sir R
Phillimore adopted the compendious description of necessaries as meaning
whatever the owner of a vessel,
as a prudent man, if present, would have ordered
as being "fit and proper for the service on which a vessel
34
is engaged". (For a South African case in which this
definition was applied, see
In re The SS. "Manqoro"
1913 NPD 67
at 82-3.)
So it is a question of what is reasonably necessary (Williams' and Bruce's
Admiralty Practice
, 3rd ed, 194). Typical examples of necessaries are
goods such as anchors and cables, provisions, crew's wages, ship's charges,
repairs
and fuel.
The other enquiry is: who may claim for necessaries? The English cases show
that there are three categories of persons who may have
this right. Firstly,
those who supplied the necessaries; the so-called "necessaries men". Secondly,
the person who pays for necessaries
supplied to a ship has as good a claim as
the person who actually supplied them (
Foong Tai & Co vs Buchheister
& Co
1908 AC 458
(PC) at 466). This person will usually be the
ship-owner's agent.
35
Examples of cases where this type of claim was allowed are
The Underwriter
25 LTR (1871) 279;
The Riga
;
The Arzpeitia
[1921] All ER Rep 523
(PDA) and
The Moqileff
37 TLR (1921) 549. There is
a qualification to the right to claim on this basis, namely where the agent has
agreed to look to the
personal liability of the principal alone (
The
Mogileff
at 553). Thus the English courts have refused to exercise the
powers conferred by the 1840 and 1861 Acts to enforce the payment of
the balance
due on an ordinary mercantile account between ship-owner and agent (
The
"Comtesse de Frègeville
"
[1861] EngR 729
;
167 ER 146
; see too Williams' and Bruce's
Admiralty Practice
192). On the other hand it is immaterial that the
agent's claim against the ship-owner is for reimbursement in respect of
necessaries
paid for by the agent in accordance with his prior mandate after
their supply by the necessaries man.
The "N R Gosfabric
k"
166 ER 1160
is
not in conflict with this principle. There
36
the claimant was not the ship's agent. He was a third party
who only came into the picture and paid the butcher after the vessel had
been
supplied with meat.
The third class of person who may have a claim
for
necessaries supplied to a ship was described by Lord
Atkinson in
Foong
Tai
(at 466) as "he who advances
money to the person who thus pays, for
the purpose of
enabling him to pay". Such claimant, it was said,
"stands
in the same position as the person to whom the
money is advanced". It would
seem however that his
remedy is subject to somewhat restrictive
requirements.
As I understand the principles of English admiralty law
the
person who advances money (usually to the ship's
agent) by way of
reimbursement for necessaries which
have already been supplied will not,
unless he had
before their procurement undertaken to pay for them,
have a
claim for necessaries within the meaning of the
37
1840 and 1861 Acts. This in my opinion is the effect of the
statement of Lord Atkinson which I have quoted. It is to be read as referring
to
a situation where the
advance is made to enable the necessaries not only to
be paid for, but also to be obtained. Only then is there a claim for
necessaries.
The closing remarks of Dr Lushington in
The India
9 LTR
(1863) 234 support this approach. So does
The "N. R. Gosfabrick
". The
type of claim now under consideration cannot, as the court a
quo
seems to
have done, be equated with that of a ship' s agent. For it to succeed there
would have to be an extension of the remedy to
persons twice removed, so to
speak, from the necessaries man. This would result in the link between the
advance of the money and
the supply of the necessaries being too tenuous. The
element of urgency, of immediate necessity, which was the original
38
rationale behind a necessaries claim (
The "comtesse de
Frèqeville
" at 148) would be absent. It is true that an agent's claim
to be reimbursed for necessaries which have already been supplied may
be said to
be similarly tainted. But this is not really so. In this situation the
necessaries would usually have been supplied on
the strength of the agent's
creditworthiness. On the other hand, it is difficult to imagine the
creditworthiness of a person in Savonnerie's
position being a factor in the
material man's transaction with the agent. The
Proceeds of the Albert
Crosby
Vol III Admiralty and Ecclesiastical Cases (1869-1872) 37 was a
special case. A, being master and sole owner of a vessel, put her
into a
shipwright's dock for repair. The shipwright repaired the vessel and refused to
allow her to leave his dock until his bill
for the repairs was paid for. A,
39
having no funds, the plaintiff lent him money to pay the
shipwright's bill, and A paid the bill with the money
lent. It was held that the money having been advanced for the purpose of
releasing the ship from the possessory lien of the shipwright,
the plaintiff was
entitled to recover the amount of the loan in a suit for necessaries. It is
clear that the necessaries in respect
whereof the plaintiff undertook to lend
the money was not the repair of the ship but the release of the vessel from the
lien and
that the loan having preceded this, the claim was a good one.
I revert to the facts. Savonnerie's claim for R80 000 in respect of Mobil's
fuel account relates to necessaries (for Azgad IV and
the Hashomer). The nature
of the claim for 300 000 US dollars is less clear. Here the question is whether
the expenditure
40
referred to in the fax dated 21 February 1985 is
in
respect of necessaries. Many of the items listed ((ii),
(vi), (vii),
(viii), (ix), (x) and (xi)) give no
indication of the type of goods or
services involved.
Others ((iii), (iv) and (xii)) either appear not to
be
necessaries or are so lacking in particularity as to
make it difficult
to conclude that they fall into this
category. That leaves "bankers" ((i))
and "stevedores"
((v)). It was argued that the first was a typing
error
for "bunkers", ie fuel (for Azgad IV). I am not sure
that this can
be accepted. And, as regards
"stevedores", there is uncertainty. It is not
said how
the amount of R15 000 is calculated or why it is not
included
under salaries. In
The Riga
one of the claims
(for €150) was
disallowed on the ground that "though it
is alleged in general terms that
that sum was advanced
41
for necessary expenses, it is not stated, as it ought
to
have been, what these necessary expenses were" (at 204).
Relying on
this and the other deficiencies referred to,
counsel for Weissglass argued that on this basis alone
the claim for 300 000 US dollars must fail. |
I do not propose to decide the point. It would not dispose of the matter.
There would still be the claim for R80 000. Nor is it necessary
to consider
whether Atlantic's two ships were of the kind referred to in the 1840 Act,
namely "foreign" or whether the goods and
services were supplied "elsewhere than
in the port" to which the ships belonged as required by the 1861 Act. There is a
more fundamental
difficulty that Savonnerie faces in regard to both payments. In
order to have a claim for necessaries, it must bring itself within
the third
category of person claiming for necessaries. There is no question of QLM having
acted
42
as Savonnerie's agent in paying for the necessaries. Nor did
Savonnerie at any time prior to their supply undertake to pay for them.
This
being so and applying the principles of English law referred to, the payments by
Savonnerie must have been made to enable QLM
to procure the supply of the items
listed in the fax and the fuel. Only then would Savonnerie have a maritime claim
in terms of sub-paragraph
(z) of the definition section of the Act. Savonnerie
has not shown this. The payment of 300 000 US dollars was to reimburse QLM for
expenditure previously incurred by it in paying for (what I assume to be)
necessaries already supplied. Whilst it was only consequent
upon the payment of
the 45 000 US dollars that QLM paid Mobil's account for R80 000, the fuel had
also by then been supplied to Atlantic.
It was argued however that if the
payment of 300 000 US dollars had not been made, QLM would have
43
ceased to act as Atlantic' s agent. That may be so.
But
this is not the test for determining what are necessaries.
The remaining issue is whether Savonnerie's claim falls under sub-paragraph
(1). It will be recalled that it defines a maritime claim
as "any claim in
respect of goods supplied or services rendered to a ship for the employmnet or
maintenance thereof". Does it afford
Savonnerie any wider basis for relief than
sub-paragraph (z) ? One must see sub-paragraph (1) in its historical
perspective. It would
seem to be derived from inter alia sec 20(2)(m) of the
United Kingdom Supreme Court Act of 1981. In terms of this section, read with
sec 20(1)(a), admiralty jurisdiction is conferred on the High Court to determine
"any claim
44
in respect of goods or materials supplied to a ship for her
operation or maintenance". According to D. C. Jackson:
Enforcement of
Maritime Claims
50 this head of claim "incorporates much that was covered by
the age-old claim for 'necessaries'". Indeed, the British Act no longer
refers
to necessaries as such. In
The "Fairport" (No 5)
[1967] 2 Lloyd's Rep 162
BRANDON J held that the claims covered by sec 1(1)(m) of the Administration of
Justice Act, 1956 were "certainly
no narrower than the claims which were
formerly described as claims for necessaries". (Sec l(l)(m) is in the same terms
as sec 20(2)(m)
of the 1981 Act, its successor.) And in
The River Rima
[1988] 2 All ER 641
(HL) at 646 d the same learned judge (now Lord Brandon) said
that "what is now called a claim in respect of
45
goods or materials supplied to a ship for her operation or
maintenance is the equivalent of what used to be called a claim for necessaries,
but without the
restrictions which formerly applied to such a claim". I shall
assume that our sub-paragraph (1) should be similarly interpreted. Otherwise
it
would in the light of sub-paragraph (z) be tautologous. But that I think is as
far as it goes. For the reasons stated, advances
to reimbuse an agent in respect
of necessaries already supplied cannot found a claim for necessaries. (The
"Fairport
" was not such a case. The plaintiffs were ships' chandlers.
Their claim was in respect of wages paid by them.) Neither the language
of the
subparagraph nor any other considerations justify subparagraph (1) being given
an extended meaning so as to
46
include such a claim. In this respect, so it seems to me,
sub-paragraph (1) is no wider than sub-paragraph (z).
To sum up. Savonnerie in my opinion failed to show whether
prima facie
or otherwise that its claims against Atlantic were maritime ones. The
application to set aside the attachment order should therefore
have
succeeded.
The following order is made:
(1)
The appeal succeeds with
costs. Such costs are to include the fees of two
counsel.
(2)
The order of the court a
quo
is set aside. The following order is
substituted:
"1. The order granted on 24 January
1986 by this Court in the exercise of its admiralty jurisdiction in terms of Act
105 of 1983 under
case no 623/86 is set
47
aside.
2. The Deputy Sheriff is ordered to
release
the motor fishing vessels "Azgad IV" and "Hashomer" which are presently berthed
in Table Bay docks from the attachment made in case
no 623/86.
3. The respondent is directed to pay the
costs of this application including
the
costs of two counsel and the applicant's
costs arising out of case no
623/86".
NESTADT,
JA
CORBETT, CJ ) E M GROSSKOPF, JA ) CONCUR VAN DEN HEEVER, JA) HOWIE, AJA )