Weissglass NO v Savonnerie Establishment

• Jurisdiction: South Africa
• Judge: Corbett CJ, E M Grosskopf JA, Nestadt JA, Van den Heever JA, Howie AJA
• Judgment Date: 29 May 1992
• Citation: 1992 (3) SA 928 (A)
• Hearing Date: 10 March 1992
• Court: Appellate Division

B Nestadt JA:

This appeal arises from an order made in the Cape Provincial Division in the exercise of its admiralty jurisdiction under the Admiralty Jurisdiction Regulation Act 105 of 1983 ('the Act').

The respondent ('Savonnerie') is a Liechtenstein corporation carrying on business as financiers. On 24 January 1986 it brought an application in C 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 Co 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 D institute in the Cape Provincial Division against Atlantic for payment of the sums of US$300 000 and US$45 000. Atlantic was cited as the first 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 E 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 F Savonnerie to set the order of Rose-Innes J aside. He also sought the release of the vessels from attachment. Savonnerie opposed Weissglass's application. Answering and replying affidavits having been filed, the matter was argued before Nel J. Save for directing that Savonnerie's claim for US$45 000 be reduced to R80 000, the learned Judge ordered that the G 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 H 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, 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. I The Act, however, mitigates the inconvenience of this rule (Shaw Admiralty Jurisdiction and Practice in South Africa at 49). Section 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 J ship. One of the ways such

Nestadt JA

A a claim may be enforced is by an action in personam (s 3(1)). In terms of s 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. Section 4(4)(a) deals with such attachment. It provides:

B '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 C prerequisite to the exercise by the Court of its admiralty jurisdiction. The term 'maritime claim' is comprehensively defined in s 1(1)(ii). Twenty-six categories are enumerated. The two which are relevant are contained in subparas (l) and (z). They read:

'(1) (A)ny claim in respect of goods supplied or services rendered to a D ship for the employment or maintenance thereof;

. . .

(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 & 54 Victoria, c 27), of the United Kingdom, could have heard and determined immediately before the E 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 F 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 v Wuest 1978 (4) SA 263 (A) at 274). The source of these principles is two English Admiralty Court Acts. In terms of s 6 of the 1840 one (3 and 4 Vict c 65), jurisdiction is conferred to decide 'all claims . . . for necessaries G supplied to any foreign ship or sea-going vessel'. Section 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 H English Courts in a number of cases and, seeing that para (z), read with s 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 to maritime claims which it was entitled to I enforce by an action in personam against Atlantic in terms of the Act. Savonnerie therefore relied on s 3(2)(b) read with s 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 J Quick, Louw and Moore (Pty) Ltd ('QLM'). It handled the

Nestadt JA

A 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 had deteriorated. It owed QLM B certain moneys 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 C 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 (Azgad IV)
(ii) D agency	68 000
(iii) cold store	50 000
(iv) cartons	20 000
(v) stevedores	15 000
(vi) blue continent	6 000
(vii) I & J	8 000
(viii) E Teescape	22 000
(ix) Victor	20 000
(x) Appeldoorn	20 000
(xi) Various creditors	45 000
(xii) Salaries	80 000
	F R484 000'

(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 40 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 G Atlantic that it be furnished with a guarantee for US$300 000. 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 shareholding in the company. In addition he was the chief executive officer of Savonnerie. At H 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 US$300 000. 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 I fishing. But financial problems continued. By April 1985 Atlantic's account with QLM stood at R704 000. On 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 US$300 000 (equivalent to R574 J 162,68) and QLM released the bank from its guarantee. A

Nestadt JA

A Mr...