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[2014] ZAWCHC 154
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Viking Inshore Fishing (Pty) Ltd v Mutual And Federal Insurance Company Limited (AC 22/07) [2014] ZAWCHC 154 (17 October 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
(Exercising its
admiralty jurisdiction)
CASE
NO: AC 22/07
DATE:
17 OCTOBER 2014
REPORTABLE
In the matter
between:
VIKING INSHORE
FISHING (PTY)
LTD
.........................................................
Plaintiff
And
MUTUAL &
FEDERAL INSURANCE COMPANY LIMITED
.......................
Defendant
Admiralty action
in personam
Coram: N J
Yekiso, J
Dates of Hearing:
2, 3, 4, 8 & 11 September 2014
Date of Judgment:
17 October 2014
Summary
Promissory
warranty: imposes strict obligations on the insured to comply with
conditions stated in the warranty
Vicarious
liability `not the basis of liability
Inchmaree clause:
Promissory warranty not having an effect of negating the Inchmaree
clause
JUDGMENT
DELIVERED ON 17 OCTOBER 2014
YEKISO, J
[1] Viking Inshore
Fishing (Pty) Limited (“Viking”), a company with limited
liability duly incorporated in accordance
with the company laws of
the Republic of South Africa, was the owner of a fishing vessel MFV
“Lindsay” . In the early
hours of 8 May 2005, a collision
occurred between “Lindsay” and a bulk juice carrier
vessel MV “Ouro do Brazil”
some 18 nautical miles off
Sardinia Bay, but within the district of Port Elizabeth. As a result
of the collision, the “Lindsay”
sank almost immediately
and 14 of the 16 crew serving on board the “Lindsay” were
tragically lost.
[2] It is contended
on behalf of Viking that the collision was caused by the negligence,
incompetence and/or error of judgment of
the persons on the bridge of
the MV “Ouro do Brazil” and/or the negligence of the
officers and/or crew of the MFV “Lindsay”
(“the
Lindsay”).
[3] The defendant,
Mutual & Federal Insurance Company Limited (“Mutual &
Federal”) denied these allegations.
It did so despite the fact
that a matter of a collision between the “Lindsay” and MV
“Ouro do Brazil”
was common cause and in circumstances
where Mutual & Federal knew full well that the allegations
relating to the occurrence
of the collision were true. This denial
could well be described as a tactical denial. This tactical denial
is one of the issues
raised by Viking in an interlocutory application
which served before Davis AJ on 12 September 2013. In paragraph 27
of her judgment
delivered on 30 October 2013 Davis AJ held that the
matter of a tactical denial which Viking complained about falls to be
decided
with reference to the pleadings as they stand and in
accordance with those legal principles set out in authorities such as
Joseph
v Black & Others 1930 (WLD) 327; and Nieuwoudt v Joubert
1988 (3) SA 84
(SE) amongst other authorities referred to in her
judgment.
[4] The Lindsay was
insured under a written marine hull policy issued by the defendant,
Mutual & Federal Insurance Company Limited
(“Mutual &
Federal”), in favour of plaintiff, Viking Inshore Fishing (Pty)
Ltd. In terms of the policy, the hull,
machinery and equipment of
Viking’s fleet, which included the Lindsay, was insured against
loss, damage, liability or any
expense incidental thereto in the
manner provided for in the policy. As a result of the collision
Viking lodged a claim with Mutual
& Federal for indemnity arising
from the loss it suffered as a result of the sinking of the Lindsay.
[5] The policy,
amongst others, provided an indemnity subject to the Institute
Fishing Vessels Clauses (“the Vessels Clauses”)
and
subject to the Institute Additional Perils Clauses – Hulls
(“the Perils Clauses”). The institute referred
to is
the Institute of International Underwriters at London (previously
Institute of London Underwriters).
[6] By way of a
letter dated 8 October 2005 addressed to Viking, Mutual & Federal
repudiated liability on the basis that:
“1. At the
time of the collision, there was not an Able Seaman or rating holding
a Proficiency in Survival Craft on board
the MFV ‘Lindsay’
as required by Regulation 18 of the Regulations to the Merchant
Shipping Act, No 57 of 1951 (‘Merchant
Shipping Act’);
2. furthermore, at
the time of the collision, and in the time leading up to the
collision, there was not a certificated officer
on the bridge of the
MFV ‘Lindsay’ as required in terms of Regulation 6, read
with annex 1, to the regulations of the
Merchant Shipping Act; and
3. during the course
of the policy, [Viking] failed to take reasonable and/or diligent
steps to ensure that the watchkeeping standards
referred to in
Regulations 4 and 6 of the Merchant Shipping Act were complied with
by the Master and crew of the MFV ‘Lindsay’.”
[7] Following upon
the repudiation of its claim, Viking, the owners of the “Lindsay”,
instituted these proceedings out
of this court. In these proceedings
Viking claims an indemnity from Mutual & Federal in terms of a
marine hull insurance policy.
The policy provided insurance cover to
various companies affiliated and associated with Viking and included
Viking. Attached
to the policy was a schedule referred to in the
policy as schedule “A” which contained several fishing
vessels covered
in terms of the policy. The “Lindsay”
was one of the vessels included in Schedule “A” attaching
to and
forming part of the policy.
[8] In response to
the claim by Viking, Mutual & Federal has proffered two defences
based upon a warranty and a proviso contained
in the policy, these
being the Merchant Shipping Act Warranty (“MSA Warranty”);
and the due diligence proviso which
is included at the end of clause
6.2 of the Institute’s Fishing Vessels Clauses and clause 3 of
the Institute’s Additional
Perils Clauses – Hulls. In
terms thereof Mutual & Federal can avoid liability if either the
MSA Warranty or the due
diligence provisos have been breached.
[9] The relevant
portions of the Vessels and the Perils Clauses read as follows:
“Vessels
Clauses
6.2 This insurance
covers loss of or damage to the subject matter insured caused by
…
6.2.3 Negligence of
the Master Officer’s crew or Pilots;
…
provided that such
loss or damage has not resulted from the want of due diligence by the
Assured, Owners or Managers.”
“Perils
Clauses
1. In consideration
of an additional premium this insurance is extended to cover
…
1.2 Loss of or
damage to the vessel caused by an accident or by negligence,
incompetence or error of judgment of any person whatsoever.
…
3. The cover
provided in clause 1 is subject to all other terms and exclusions
contained in this insurance and subject to the proviso
that the loss
or damage has not resulted from a want of due diligence by the
Assured, Owners or Managers.”
[10] The indemnity
provided by the policy was further subject to a warranty which
provides as follows:
“Merchant
Shipping Act Warranty
Warranted that the
provisions of the South African Merchant Shipping Act and the
regulations pertaining thereto shall be complied
with at all times
during the currency of this policy, provided that this warranty shall
be effective only to the extent of those
regulations which are
promulgated for the safety and/or seaworthiness of the vessel(s).
It is understood and
agreed that this warranty shall in no way be construed to nullify the
‘inchmaree’ Clause, or any
part thereof in the Institute
Clauses attached to this Policy.”
[11] There is
something that has to be said about the Inchmaree clause referred to
in the last paragraph of the warranty clause.
Authority has it that
the Inchmaree clause derives its origin from a landmark decision in
Thames & Mersay Marine Insurance
Co Limited v Hamilton, Fraser &
Co
(1887) 12 AC 484
in which the steamer, Inchmaree, sustained damage
to a donkey engine which was used for pumping water into her main
boilers. Her
donkey engine, as part of the machinery of the
Inchmaree, was covered by an insurance policy. The donkey engine was
damaged because
a valve was closed which ought to have been kept
open, forcing water into the airchamber of the donkey pump and
causing it to split
open.
[12] Professor Hare
in his work: Shipping Law & Admiralty Jurisdiction in South
Africa 1999, para 19-22 at p746 states that
the closing of the valve
was either accidental or due to the negligent act of an engineer, but
was demonstrably not due to wear
and tear. Although the use of the
donkey engine was incidental to navigating the vessel, the House of
Lords rejected the argument
that the explosion of the donkey engine
should be a “peril of the sea” or indeed a “like
peril” requiring
a sui generis interpretation of the extent of
cover.
[13] Subsequent to
the decision in the Inchmaree, the Institute Underwriters included
clauses to extend the indemnity provided in
marine hull insurance
policies beyond perils of the sea, to include additional named
perils. It is submitted that although these
are commonly known as
Inchmaree clauses, they actually extend cover beyond the cure to the
Inchmaree problem and have added additional
perils so that this
clause is rather the “cousin” to the “liner
liability clause”.
[14] It is against
the background set out in the preceding paragraphs that clause 1.2 of
the Perils Clauses and clause 6.2.3 of
the Vessels Clauses referred
to in paragraph [9] of this judgment do form part of the Inchmaree
clauses which are attached to and
form part of the insurance policy.
Viking’s claim is based on the Inchmaree clauses
THE INTERPRETATION
OF THE POLICY
[15] There appears
to be a common thread as regards the general approach in interpreting
insurance policies. Authorities such as
Fedgen Insurance Limited v
Leyds
1995 (3) SA 33
(A) at 38A-E; French Hairdressing Salons Limited
v National Employers Mutual General Insurance Association Limited
1931 AD 60
at 65; Kliptown Clothing Industries v Marine & Trade
Insurance
1961 (1) SA 103
(AD) at 106H-107D are but some of the
authorities that demonstrate such an interpretive approach. The
approach appears to be that
any provision which purports to place a
limitation upon a clearly expressed obligation to indemnify must be
restrictively interpreted;
that in interpreting insurance contracts
it is the duty of the insurer to make it clear what particular risks
he wishes to exclude;
that the court should incline towards upholding
the policy and against producing a forfeiture; that the construction
of a warranty
is generally taken in favour of the assured and against
the insurer and so forth.
[16] With regards to
the onus, it has been held in authorities such as Van Zyl v Kiln
Non-Marine Syndicate No 510 of Llyods of London
2003 (2) SA 440
(SCA)
that the ordinary rule is that the insured must prove himself to fall
within the primary risk insured against whilst the
onus is on the
insurer to prove the application of an exception. It is submitted on
behalf of Viking that both in terms of the
general approach in our
law and on the basis of international authorities such as Secunda
Marine Services Limited v Liberty Mutual
Insurance Co
[2006] NSCA 82
(the Novia Scotia Court of Appeal) that Mutual & Federal bears
the onus of proving both of the defences upon which it relies.
It
has already been pointed out that such defences are based on the
alleged breach by Viking of the MSA Warranty and the alleged
breach
of due diligence provisions.
[17] It appears that
initially there was a dispute between Viking and Mutual & Federal
as regards whether Viking’s claim
is based on the Inchmaree
clauses. However, it appears that that dispute has since been
resolved at an interlocutory stage of
the proceedings when the matter
served before Davis AJ. It appears that, in the course of those
interlocutory proceedings, Mutual
& Federal conceded that the two
clauses upon which Viking’s claim is premised, being clauses
6.2 of the Institute Fishing
Vessels Clauses and clause 1.2 of the
Institute of Additional Perils Clauses, are both Inchmaree clauses.
This concession was repeated
by Mr Gordon SC (with him Mr Voormolen)
in the defence’s opening remarks. This being so, so it is
submitted on behalf of
Viking, Mutual & Federal ‘s
defence, based as it is on the application of the MSA Warranty,
cannot be invoked and sustained
as the application thereof shall have
the effect of nullifying the Inchmaree clauses, or any part thereof,
in the Institute Clauses
attached to the policy. The second
paragraph of the MSA Warranty records that the warranty shall in no
way be construed to nullify
the Inchmaree clauses, or any part
thereof in the Institute clauses attached to the policy.
[18] It is thus
submitted on behalf of Viking that any construction which has, as a
consequence, that the MSA Warranty does apply
in the instance of this
matter, will inevitably lead to the nullity of the Inchmaree clauses
on which Viking’s claim is premised.
The submission boils down
thereto that the application of the MSA Warranty, based on the
natural meaning of the last paragraph
of the warranty clause, cannot
apply in the instance of this matter as the application thereof shall
have the effect of nullifying
the Inchmaree clauses.
[19] On the other
hand it is contended on behalf of Mutual & Federal that Viking’s
interpretation is not a competent interpretation.
It is contended
that the warranty and the Inchmaree clauses both form part of the
policy and must be read together and that the
two are not mutually
destructive. It is further contended that in marine insurance
practice the word “warranty” is
used in the sense of a
promissory warranty. It must be complied with and that the breach of
this warranty discharges the insurer
from liability. Based on this
approach, it is thus contended that the interpretation by Viking,
which effectively draws a line
through the first paragraph insofar as
the Inchmaree clauses are concerned, is not a sensible interpretation
of what is meant by
the second paragraph of the MSA Warranty.
Viking’s interpretation, so the contention goes, also does not
sit comfortably
with the language used. It is thus contended on
behalf of Mutual & Federal that the meaning of the second
paragraph of the
warranty does not render ineffective the additional
cover provided by the Inchmaree clauses. Mutual & Federal
contends that
Viking has the insurance cover in the Inchmaree clauses
but that insurance cover is nevertheless subject to the warranty. I
am
perfectly in agreement with this approach. The approach adopted
by Viking, effectively drawing a line through the first and the
second paragraph of the MSA Warranty clauses is not consistent with
the interpretive approach pertaining to the need to interpret
a
provision in the contract, not in isolation, but in relation to the
contract as a whole. It therefore follows, in my view,
that the MSA
Warranty clause does not have an effect of nullifying the Inchmaree
clauses as Viking would seek to contend. Thus,
the Inchmaree clauses
do not have an effect of precluding Mutual & Federal‘s
reliance on the MSA Warranty as a defence.
ALLEGED BREACH OF
WARRANTY
[20] In its plea
Mutual & Federal alleges that Viking breached the warranty in a
number of respects, and in doing so, relies
on a breach of the
regulations appertaining to the South African Shipping Act
promulgated for the safety and/or seaworthiness of
a vessel. The
regulations referred to are the Merchant Shipping (Safe Manning)
Regulations, 1999. In paragraphs 28 to 35 Mutual
& Federal sets
out the specific regulations on which it relies for the alleged
breach of warranty. Mutual & Federal relies
on three regulations
in its defence, and these are, Regulation 4(1); Regulation 6 read
with annex 1 thereof; and Regulation 6(B).
[21] In contending
that Viking breached the regulations appertaining to the South
African Shipping Act, Mutual & Federal pleads
as follows in
paragraph 35 of its plea.
“In breach of
the said Regulations and therefore in breach of Warranty:
(i) there was no
officer in charge of the navigational watch either at all times or at
all relevant times or at the time immediately
before the said
incident; and
(ii) The said Owner
did not prepare or, alternatively, preserve the said Schedule with
the consequence that the defendant is not
liable to plaintiff for the
claim and became entitled to reject the claim, as it did.”
[22] The Schedule
referred to in paragraph 35(ii) of its plea is a schedule of duties
referred to in Regulation 6(B) of the Merchant
Shipping (Safe
Manning) Regulations which the owner of a vessel is required to
prepare and to preserve for a period of five (5)
years.
REGULATORY MATRIX
[23] Regulation 4(1)
of the Merchant Shipping (Safe Manning) Regulations, 1999 provides as
follows:
“(1) The Owner
of every ship shall ensure that –
(a) (i) no ship’s
officer takes charge of a navigational or engineering watch on the
ship unless he or she holds appropriate
valid certification entitling
him or her to do so; and
(ii) no rating
forms part of a navigational or engineering watch on the ship unless
he or she holds appropriate valid certification
entitling him or her
to do so.”
[24] In turn,
Regulation 6 under the heading “Watchkeeping Standards”
provides as follows:
“Watchkeeping
Standards
6 The owner and
master of a ship shall ensure that their watchkeeping standards set
out in annex 1 are complied with on the ship
at all relevant times.”
[25] Annex 1
referred to in regulation 6 deals with matters such as watchkeeping
principles and arrangements; principles to be observed
in keeping
navigational watch; principles to be observed in keeping engineering
watch; principles to be observed in keeping radio
watch; and all
those other matters referred to in Part 4 up to Part 9 of matters
dealt with in annex 1.
[26] Regulation 10
of annex 1 under the heading “Principles to be Observed in
Keeping Navigational Watch” provides as
follows:
“10. The
officer in charge of the navigational watch is the master’s
representative and is primarily responsible at
all times for the safe
navigation of the ship and for complying with the collision
regulations.”
[27] Furthermore,
Regulation 38 under the same heading provides as follows:
“38. The
office in charge of the navigational watch shall notify the master
immediately-
(a) if restricted
visibility is encountered or expected;
(b) if the traffic
conditions or the movement of other ships are causing concern;
(c) if difficulty is
experienced in maintaining course; and
(d) on failure to
site land, a navigational mark or to obtain standards by the expected
time.”
[28] Regulation 6(B)
provides that the owner of every ship of 100GT or more shall comply
with this regulation and further provides
that the owner is obliged
to prepare a schedule of duties and to cause it to be preserved for a
period of five (5) years. All
these regulations relate to
watchkeeping.
[29] I have already
made a point in paragraph [19] of this judgment that the Inchmaree
clauses do not have an effect of precluding
Mutual & Federal from
raising MSA Warranty as a defence. The meaning of the term “warranty”
has had the attention
of our courts over a period of time. In Lewis
v Norwich Fire Insurance Limited
1916 AD 509
at 514 and 515 Innes CJ
said the following:
“A warranty,
in the sense in which that term is used in insurance transactions, is
a statement or stipulation upon the exact
truth of which, or the
exact performance of which, as the case may be, a validity of the
contract depends. Courts of law will
construe such stipulations as
they would any other conditions of the policy; but when once the
meaning has been ascertained a warranty
must be exactly complied with
whether it is material to the risk or not. … A strict
observance of its terms is a condition
precedent to the incidence of
liability.”
[30] As recent as
2006 the following was stated by the Supreme Court of Appeal in
Parsons Transport (Pty) Ltd v Global Insurance
Co Limited
2006 (1) SA
488
(SCA) at para 6 where the definition of the term “warranty”
as espoused in Lewis Limited v Norwich Union Fire Insurance
Limited,
supra, was qualified as follows:
“A breach of a
warranty by the insured provides the insurer with a defence to any
claim brought subject to a breach …
the policy is not
automatically rendered void by the breach, but the breach entitles
the insurer to elect to exercise his right
to avoid the policy and
repudiate liability.”
[31] Based on the
abovementioned authorities it is thus clear that the insurer does not
have to prove a causal connection between
the loss and the breach of
the warranty. In Lewis Limited v Norwich Union Fire Insurance
Limited, supra, the insured warranted
that he would keep a complete
set of books in connection with his business and that the books would
be locked in a fireproof safe
or removed to another building at night
and at time when the premises are not actually open for business.
The insured in that
case claimed an indemnity in respect of stock and
fixtures insured with the insurance company which had been destroyed
in a fire.
Plainly, the keeping of a complete set of books had no
causal connection to the loss occasioned by the fire. Nevertheless,
the
warranty had to be complied with, in the words of Innes CJ,
whether it was material to the risk or not.
[32] In the event,
the appeal by the insured against repudiation of its claim by the
insurance company was dismissed. It is against
this background that
I have to determine, in the first instance, the question of the
alleged breaches of the warranty by Viking
and, if need be, an
alleged breach of due diligence provisions by Viking, based on
evidence led at trial.
ALLEGED BREACH OF
REGULATION 4(1)(a)(i) and 6
[33] The evidence
tendered for Viking regarding the watchkeeping duties may be
summarised as follows:
[33.1.] The Master
of the “Lindsay” was the officer in charge of the
navigational watch during daytime. There ought
to exist a document
which reflects the times when other officers were to commence their
navigational watch duties. At some point
during the evening prior
to the collision Captain Landers, who was the Master of the ship,
handed over the charge of the navigational
watch to the Mate. It
would appear that this is indeed what happened on the evening before
the collision with “Ouro do Brazil”.
At the time of the
collision, the Master was asleep in his cabin.
[33.2.] After
Captain Landers had handed over the watch to the Mate, Mr Lavendal,
but before the collision occurred, Captain Landers
walked through the
bridge to the deck of the “Lindsay”, to urinate. When he
walked through the small confines of the
bridge of the “Linday”,
he only saw two persons on the bridge. Again when he returned from
the outside to go back
to his cabin, he walked through the bridge in
the opposite direction and only saw two persons in the small confines
of the bridge
of the “Lindsay”. In his evidence at trial
Captain Landers initially stated that he had seen three persons on
the
bridge of the “Lindsay” but when confronted with his
evidence at the Court of Marine Enquiry, he conceded that the
evidence given at the Marine Enquiry was the more accurate.
[33.3.] The Mate had
standing orders from Captain Landers to call him in the event of the
“Lindsay” coming within 2
miles of another vessel. In
his evidence at trial, Captain Landers initially stated that the
orders were to call him if the “Lindsay”
came within 1
mile of another vessel, but conceded in cross examination that the
evidence given by him at the Marine Enquiry was
the more accurate.
[33.4.] Captain
Kieron Michael Tesling Cox, a Class One Mariner, was called by Viking
to testify as an expert. His evidence related
to the positions of
the three vessels, “Umgeni”; “Ouro do Brazil”;
and “Lindsay” prior to
the collision; reconstruction of
their movements upto the point and the moment “Ouro do Brazil”
and “Lindsay”
collided with each other
[33.5.] Captain Cox
is of the opinion that the primary cause of the collision between the
MV “Ouro do Brazil” and the
MFV “Lindsay” was
the 13º change of course made by the MV “Ouro do Brazil”
which commenced at 00h30.
The change of course created a dangerous
close-quarter situation with the MFV “Lindsay”. This was
compounded by the
fact that thereafter, the MV “Ouro do
Brazil”, as the give-way vessel, was obliged to change her
course by making a
bold turn to starboard, which she could easily
have done, should have done and failed to do. Not only that, but the
MV “Ouro
do Brazil” should have kept a proper lookout for
the MFV “Lindsay” and would have acquired the vessel on
her
Automatic Radar Plotting Aid (“ARPA”) long before she
did, which should have assisted her to take appropriate avoiding
action in good time. As it turned out MV “Ouro do Brazil”
and the MFV “Lindsay” collided and the MFV
“Lindsay”
sank almost immediately.
[33.6.] The only
survivors on board the “Lindsay” were the Master (Captain
Landers) and a “sparehand” (Mr
John Ehlers). Evidence
tends to suggest that Royden Koeries, a “deckhand”, also
found himself in the water. If this
be so, this would mean that
Koeries had also gotten off the ship. It is suggested on behalf of
Mutual & Federal that the three
who got off the ship probably
could have come from the bridge, whereas the Mate, Mr Lavendal, who
should have been on watch, was
not seen and not found.
[33.7.] Within days
of the collision, an official of the SA Marine Safety Authority
(“SAMSA”) (Captain Nigel Campbell)
was appointed to
investigate the circumstances surrounding the collision. Captain
Campbell, amongst other persons he interviewed,
interviewed Mr
Ehlers. Mr Ehlers, in the course of the interview, told Captain
Campbell that he (Mr Ehlers) and Mr Royden Koeries
(a deckhand) were
on the bridge of the “Lindsay” prior to the collision,
but there were no officers on the bridge with
them. Particularly,
the skipper was asleep, the Mate was in his cabin and the bosun was
similarly in a cabin, sleeping.
[34] Mr MacWilliam,
SC, for Viking, objected to any reference to the evidence procured
from Mr Ehlers by Captain Campbell on the
basis that such evidence
constitutes inadmissible hearsay evidence and that no reliance should
be placed thereon in the absence
of confirmation of that evidence, at
trial, by the deponent thereof in the person of Mr Ehlers. Once this
objection was raised,
I ruled that the hearsay evidence complained of
would be provisionally allowed and that the matter of the
admissibility thereof,
coupled with probative value to be attached to
such evidence in the event it being finally admitted, be addressed in
argument.
It is worth pointing out at this stage of this judgment
that Mr Ehlers could not be located and thus did not testify in this
trial.
Mr Craig Bacon, the Operations Director at Viking,
testified under cross examination that Viking had received a request
from
“the insurance company” which, it would appear, was
a reference to Mutual & Federal, to locate Mr Ehlers and that
Viking had sent someone to Mr Ehlers’ address. However, Mr
Ehlers could not be found and no information of his whereabouts
could
be obtained.
[35] In argument
before me it was submitted on behalf of Mutual & Federal that I
should allow the introduction of the hearsay
evidence of Mr Ehlers
into the corpus of the evidence tendered in this trial and in support
of this submission Mutual & Federal
relies on the provisions of
section 6(3) and (4) of the Admiralty Jurisdiction Regulation Act,
105 of 1983 (“the Admiralty
Act”).
[36] Section 6(3) of
the Admiralty Act provides as follows:
“(3) A court
may in the exercise of its admiralty jurisdiction receive as evidence
statements which would otherwise be inadmissible
as being in the
nature of hearsay evidence, subject to such directions and conditions
as the court deems fit.
(4) The weight to be
attached to the evidence contemplated in sub-section 3 shall be in
the discretion of the court.”
[37] The application
of the provisions of section 6(3) and (4) was considered in
authorities such as Cargo Laden and Lately Laden
on Board the MV
“Thalassini Avgi” v MV “Dimitris”
1989 (3) SA
820
(A) at 842D-H. In that authority Botha JA, writing for the full
court, made the following observation:
“The
Legislature has given no indication of how a Court should approach
the exercise of its discretion under s 6(3) if regard
is had to that
subsection by itself. It seems to me, however, that ss (3) must be
read with ss (4), and that the latter subsection
provides the clue as
to the general approach to be adopted in applying ss (3). In terms
of ss (4) the weight to be attached to
hearsay statements, if allowed
under ss (3), is itself left for assessment in the discretion of the
Court. Subsection (4) is,
I consider, of overriding importance in
the scheme of the procedure envisaged in the combined provisions of
the two subsections.
Accordingly, in my view, the general approach
to be adopted in the application of s 6(3) should be lenient rather
than strict;
the Court should, speaking generally, incline to letting
hearsay statement go in and to assess the weight to be attached to
them
under s 6(4) when considering the case in its totality; and a
decision to exclude such statements should normally be taken only
when there is some cogent reason for doing so.”
[38] In further
support of its submission that I should allow the hearsay statement
into the body of evidence, Mutual & Federal
relies on the
provisions of section 3 of the Law of Evidence Amendment Act, 45 of
1988 (”Evidence Amendment Act”).
Section 3 of the
Evidence Amendment Act also makes provision for admission of hearsay
evidence in both criminal and civil proceedings,
provided that the
admission of such hearsay evidence is in the interest of justice. In
considering whether the admission of hearsay
evidence is in the
interest of justice, the court is enjoined to have regard to all
those factors listed in section 3(c). In the
process of considering
whether it will be in the interest of justice to admit hearsay
evidence the court shall have regard to all
those factors listed in
section 3(c)(i) to (vii) and, on the basis of all those factors,
considered cumulatively, and any other
factor that may be taken into
account in the determination of whether or not it is in the interest
of justice to allow into the
body of evidence such hearsay evidence.
[39] In Giesecke &
Devrient Southern Africa (Pty) Ltd v Minister of Safety &
Security
2012 (2) SA 137
(SCA) at p147 par [28] D-E Brandt JA, made
the following observation with regards to the application of the
provisions of section
3(1)(c), it being an exception to the rule
against the admission of hearsay evidence:
“As explained
in S v Ndhlovu (supra) para 15, the very purpose for the introduction
of s 3(1)(c) was to ‘supersede the
excessive rigidity and
inflexibility – and occasional absurdity – of the
common-law position’ by creating another
avenue for the
admission of hearsay evidence which turns on what the interest of
justice require.”
[40] And in
paragraph [31] of the same authority Brandt JA went further to make
the following observation:
“The section
requires that the court should have regard to the collective and
interrelated effect of all the considerations
in paras (i)-(iv) of
the section and any other factor that should, in the opinion of the
court, be taken into account. The section
thus introduces a high
degree of flexibility to the admission of hearsay evidence with the
ultimate goal of doing what the interests
of justice require.”
[41] In further
support of the submission to allow the statement made by Mr Ehlers to
Captain Campbell in the body of evidence it
is contended on behalf of
Mutual & Federal that Mr Ehlers could not be located for the
purposes of the trial in this court;
Mr Ehlers was the only survivor
of the collision who was awake at the time that the collision
occurred and that, therefore, the
only eyewitness; the statement and
answers given to Captain Campbell by Mr Ehlers were given shortly
after the collision (approximately
8 days) and that there can be no
doubt that the dramatic events leading up to the collision must still
have been fresh in the Mr
Ehlers’ mind.
[42] Several months
later, Mr Ehlers also testified at the Court of Marine Enquiry. At
that enquiry, Mr Ehlers changed his evidence.
He testified at that
enquiry to the effect that, and contrary to his earlier statement
made to Captain Campbell that there was
no Mate on the bridge when
the collision occurred, that indeed there had been a Mate on the
bridge of “Lindsay” and
that his earlier contrary
evidence had been given to Captain Campbell because he wanted to “get
back” at the Mate who
had denied him a promotion.
[43] It is thus
suggested in the submissions on behalf of Mutual & Federal that,
applying the lenient approach advocated in
the Dimitris, supra, and
the highly flexible approach advocated in Giesecke, supra, the proper
approach would be to admit all of
the evidence of Mr Ehlers, both in
the form of a statement made to Captain Campbell as well as the
evidence under oath given at
the enquiry where Mr Ehlers was also
cross-examined by counsel.
[44] The submission
goes further to suggest that while the evidence of Mr Ehlers, on its
own, should be treated with caution (because
of the contradiction),
that does not necessarily mean that none of his evidence can be
believed. Relying on the authority of Stellenbosch
Farmers’
Winery Group Ltd & Another v Mantell et Cie & Others
2003 (1)
SA 11
SCA at para 5 that a court, when confronted with two
irreconcilable versions, and where all other factors are equipoised,
the probabilities
should prevail. It is suggested in those
submissions that there are a number of probabilities, in the instance
of this matter,
which support the initial statement by Mr Ehlers that
he and Mr Koeries were alone on the bridge without the Mate when the
collision
occurred. These would include:
[44.1.] after
Captain Landers had handed over the watch to the Mate, but before the
collision, Captain Landers walked through the
bridge to the deck of
the “Lindsay” to urinate. When he walked through the
small confines of the bridge of the “Lindsay”,
he only
saw two persons on the bridge. Again, when he returned from the
outside to go back to his cabin, he walked through the
cabin in the
opposite direction and only saw two persons in the small confines of
the bridge of the “Lindsay”.
[44.2.] the Mate had
standing orders from Captain Landers to call him in the event of the
“Lindsay” coming within 2
miles of another vessel, yet he
was not called to the bridge prior to the collision (he was woken by
the sound of the impact).
It is suggested on behalf of Mutual &
Federal that this strongly suggests the Mate was not on the bridge
because the Mate
would, both in terms of the standing orders given by
Captain Landers, and in terms of Regulation 38(B) of Part 1 of the
Safe Manning
Regulations, have been obliged and required to call
Captain Landers to the bridge when the “Lindsay” was
close to another
vessel.
[44.3.] the
“Lindsay” did not sound its horn when it was in close
proximity to the “Ouro do Brazil”. Captain
Landers would
have heard the horn (according to his own evidence) had it been
sounded. The collision regulations require that
five short blasts be
sounded as a “wake up call” from the “Lindsay”
to the “Ouro do Brazil”.
The Mate, who was by all
accounts experienced, would have known to sound the horn and the fact
that the horn was not sounded is
strongly indicative thereof that the
bridge was not manned by an experienced officer.
[44.4.] the
“Lindsay” made a turn to port which placed it on a
collision course with the “Ouro do Brazil”.
Viking’s
expert in the person of Captain Cox did not criticise the turn to
port per se but criticised the turn for not being
positive enough.
The collision regulations which would be known by an experienced
officer such as the Mate, require that such
a manoeuvre be made
positively. This, so submission goes, suggests that the person on
the bridge was not an experienced officer.
The probabilities are
that the “Lindsay” endeavoured to cross the bow of the
“Ouro do Brazil” but failed
to do so.
[45] The position of
Viking with regards to admission into evidence of the statement by Mr
Ehlers to Captain Campbell is limited
merely to pointing out that in
his first statement to Captain Campbell, he made no mention of the
Mate, let alone that the Mate
was not on the bridge. Furthermore,
so the submission goes, even when answering Captain Campbell’s
questions at the very
end thereof he watered down a fact of his
answers when he volunteered the information that the Mate had made a
U-turn “by
us” and that Mr Koeries had mentioned the
other vessel to the Mate when he came to the bridge.
[46] Thus, the
position of Viking with regards to the admission of the hearsay
evidence is that such evidence should be ignored
in as much as Mr
Ehlers subsequently testified at the Court of Marine Enquiry where he
virtually recanted the earlier statement
made to Captain Campbell.
[47] In the
circumstances of this matter, and taking into account that Mr Ehlers
could not be located for purposes of tendering
evidence at this
trial; that he (Mr Ehlers) is the only survivor of the collision who
was awake at the time the collision occurred
and, hence, the only
eyewitness; and the fact that the statement and answers given to
Captain Campbell were given shortly after
the collision when the
dramatic events leading up to the collision would still have been
fresh in his mind, the factors I have
mentioned, constitute a
sufficient basis to admit such hearsay evidence in the interest of
justice.
[48] On the basis of
the statement by Mr Ehlers made to Captain Campbell, it is probable
that there were no officers on the bridge
of the “Lindsay”
prior to the collision; that only he (Mr Ehlers) and Mr Koeries were
on the bridge shortly before
and when the collision occurred and that
Lavendal, to whom Captain Landers had handed over the navigational
watch duties, probably
could have been in his cabin when the
collision occurred. Ostensibly, this would mean that there was no
officer holding an appropriate
valid certification in charge of the
navigational watch shortly before and at the time the collision
occurred as required in terms
of Regulation 4(1)(a)(i) of the Safe
Manning Regulations. Mr Ehlers, a “sparehand” and Mr
Koeries, a “deckhand”,
who were on the bridge shortly
before and at the time the collision occurred were not holders of
appropriate valid certification
entitling them to do navigational
watch duties.
REGULATION
4(1)(a)(i)
[49] Regulation
4(1)(a)(i) of the Safe Manning Regulations place obligations on the
owner of the vessel to ensure that no ship’s
officer takes
charge of navigational or engineering watch on the ship unless such
officer holds an appropriate valid certification.
The evidence of Mr
Bacon was that the owners of the “Lindsay” relied on the
skipper of the vessel and the Mate when
it came to keeping the
navigational watch. He testified that there were indeed proper
practices and procedures in place to ensure
that “Lindsay”
was properly crewed and well-run; that Viking only employed properly
qualified and certificated people
to work on the “Lindsay”;
that Viking ensured that all of its skippers were properly trained;
Viking ensured that all
their skippers first served under one of
their top skippers before being given their own command; Viking
ensured that only certificated
officers were on board their vessels;
always crewed their vessels and “Lindsay”, in particular,
according to the requirements
of the Safe Manning document; Viking
vessels’ masters and officers had all received comprehensive
training with regard to
the proper watchkeeping as part of their
training and they practised proper watchkeeping on a daily basis.
Viking was in daily
contact with the “Lindsay” while at
sea either by way of e-mail or mobile phone.
[50] The evidence of
Mr Bacon boils down thereto that Viking, in the management of its
vessels, ensured that each vessel is properly
staffed and that the
persons on board are competent and capable to man their vessels
whilst at sea. Viking, the owner of MFV “Lindsay”,
is a
company that can only act through its human agents in the form of its
board of directors and other officers of the company,
in other words,
persons whose actions are attributed to the company itself and who
are charged with the responsibility of management
of the affairs of
the company. All other duties which are carried out outside the
sphere of management of the affairs of the company,
as for an
example, management of vessels at sea, can only be carried out by
employees entrusted with the responsibility of managing
such vessels
at sea. The view boils down thereto that whatever commissions or
omissions there could be on the part of the persons
managing the
vessel at sea cannot, on the basis of vicarious liability, be
attributed to Viking.
REGULATION
4(1)(a)(ii)
[51] As has already
been pointed out in paragraph [23] of this judgment, Regulation
4(1)(a)(ii) provides that no rating forms part
of a navigational or
engineering watch on the ship unless he or she holds an appropriate
valid certification entitling him or her
to do so. In its
submissions Viking makes a point that regulation 4(1)(a)(ii) refers
only to an appropriately certificated rating
being part of the
navigational watch. Rating, so the submission goes, is defined in
the Safe Manning Regulations to be “a
seaman other than an
officer”. Both Mr Koeries and Mr Ehlers were seaman, so the
submission goes. Both Mr Koeries and Mr
Ehlers, as ratings, must hold
valid certification but that the Safe Manning Regulations do not
specify what that certification
is.
[52] In an attempt
to show that both Mr Koeries and Mr Ehlers were holders of
appropriate valid certification, ostensibly entitling
them to form
part of a navigational watch, Viking called Captain Gustav Louw, a
principal officer based at the Cape Town regional
office of the SA
Marine Safety Authority (“SAMSA”). His evidence was
intended to show that the certification of Mr
Ehlers and Mr Koeries
constitutes compliance with the provisions of regulation 4(1(a)(ii)
of the Safe Manning Regulations. On
25 January 2013 Captain Louw
issued a “To Whom It May Concern” letter wherein he
sought to indicate that fishing vessels
of 100gt or more only require
one certificated rating on board to be compliant with the
regulations. Mutual & Federal objected
to that evidence on the
grounds that the interpretation of the law, which would include the
interpretation of the provisions of
the Safe Manning Regulations, is
a matter on which the court must decide and that whatever opinion
Captain Louw holds with regards
to the Safe Manning Regulations, is
irrelevant. In the light of this objection, the evidence of Captain
Louw was merely limited
to confirmation that he in fact is the author
of a “To Whom It May Concern” letter dated 25 January
2013.
[53] On the other
hand, Mutual & Federal called Captain Campbell of SAMSA who
testified, amongst other things, about the requirements
for
completing a Pre-Sea Safety Induction course. Captain Campbell’s
evidence was that the course provides basic training
for persons who
go to sea and who typically do not have any knowledge of how to be
safe at sea, which would include topics such
as how to react when a
man falls overboard. He testified that the Pre-Sea Training
Certificate referred to in the evidence of
Captain Louw, as well as
his letter of 25 January 2013, has nothing to do with watchkeeping.
[54] In contrast to
the Pre-Sea Safety Induction course referred to in the evidence of
Captain Louw, Captain Campbell testified
about the requirements for
certification as an ordinary seaman, which require training in,
amongst other things, watchkeeping.
Captain Campbell went further to
testify about the contents of such a training programme. His
evidence concludes that neither
Mr Ehlers nor Mr Koeries are
certified as an ordinary seaman.
[55] And, finally,
there is a matter of Regulation 6B which requires the owner of every
ship of 100gt or more to produce a schedule
of duties complying with
the relevant regulation. The evidence of Mr Bacon related to a
roster which ostensibly is being kept
on board the “Lindsay”
which deals with duties of personnel on board the “Lindsay”.
Under cross-examination
Mr Bacon conceded that Viking did not know
of the existence of regulation 6B. In the course of his evidence he
was referred to
the evidence he gave at the court of Marine Enquiry
which was to the effect that Viking, as opposed to the captain, did
not prepare
a schedule of duties as required by regulation 6B.
[56] It is clear on
the basis of evidence that Viking did not comply with the provisions
of regulation 4(1) and regulation 6B despite
the Merchant Shipping
Act Warranty which imposes a duty on Viking to comply with such
regulations. The warranty referred to in
the insurance contract is a
promissory warranty. It imposes a strict duty on the insured to take
certain steps in an attempt,
on the part of the insurer, to control
and diminish the risk after the conclusion of the insurance contract.
Such warranty is
intended to give the insurer some measure of
control over the risk that it runs, by imposing certain duties on the
insured after
the conclusion of the contract aimed, if not at
reducing them, at least at controlling that risk. A breach by the
insured of such
a warranty amounts to breach of the insurance
contract. It follows, in my view, that Mutual & Federal has
succeeded to prove
the breach and that Viking’s claim, based on
the marine hull policy issued by Mutual & Federal, must fail. In
the light
of this conclusion, it is not necessary for me to deal with
a further defence raised by Mutual & Federal based on want of due
diligence.
[57] In the result
the following order is made.
(1) The Plaintiff’s
claim is dismissed.
(2) The Plaintiff is
ordered to pay the Defendant’s costs, duly taxed or as agreed,
including costs consequent upon employment
of two counsel.
N J Yekiso
Judge of the High
Court
REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
(Exercising its
admiralty jurisdiction)
CASE NO: AC 22/07
In the matter
between:
VIKING INSHORE
FISHING (PTY) LTD Plaintiff
And
MUTUAL & FEDERAL
INSURANCE COMPANY LIMITED
Defendant
Admiralty action in
personam
Coram: N J
Yekiso, J
Judgment: N J
Yekiso, J
Counsel for
Plaintiff: RW F MacWilliam SC
Attorneys for
Plaintiff: Webber Wentzel (Mr Bowley)
Counsel for
Defendant: Adv D A Gordon SC
Adv V
Voormolen SC
Attorneys for
Defendant: Cox Yeats (Durban – Mr Clark)
Dates of
Hearing: 2, 3, 4, 8 & 11 September 2014
Date of
Judgment: 17 October 2014