Bocimar NV v Kotor Overseas Shipping Ltd

• Jurisdiction: South Africa
• Citation: 1994 (2) SA 563 (A)

Bocimar NV v Kotor Overseas Shipping Ltd
1994 (2) SA 563 (A)

1994 (2) SA p563

Citation	1994 (2) SA 563 (A)
Case No	332/93
Court	Appellate Division
Judge	Corbett CJ, Joubert JA, Goldstone JA, Nienaber JA and Kriegler AJA
Heard	November 22, 1993 November 23, 1993
Judgment	March 9, 1994

Flynote : Sleutelwoorde B

Shipping — Admiralty action in personam — Application for arrest of ship in terms of s 5(3) of Admiralty Jurisdiction Regulation Act 105 of 1983 — What must be proved in such application — Section 5(3) amended by s 4(d) of Admiralty Jurisdiction Regulation Amendment Act 87 of 1992 — Principal alteration effected by amendment to include case where person seeking C arrest has claim enforceable by action in personam — Facts to be proved remain the same except that first requirement that applicant has claim enforceable by action in rem against ship or associated ship to be expanded to include claim enforceable by action in personam.

D Shipping — Admiralty action in rem — Application for arrest of ship in terms of s 5(3) of Admiralty Jurisdiction Regulation Act 105 of 1983 — Requirement that applicant has genuine and reasonable need for security in respect of claim — Onus of proof — As matter of policy, there should be no deviation from normal standard of proof, ie balance of probabilities — If applicant who already holds security wishes to obtain additional security, E genuine and reasonable need for additional security to be established on a balance of probabilities.

Practice — Applications and motions — Dispute of fact — Referral for oral evidence — Lack of any indication as to what oral evidence to be led — F Such increasing difficulty of making favourable assessment of prospects of oral evidence tipping scales in favour of applicant.

Headnote : Kopnota

What an applicant for a security arrest of a ship in terms of s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 must prove was laid down by the Appellate Division in the case of Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris1989 (3) SA 820 (A). This G decision was given in respect of s 5(3)

1994 (2) SA p564

A prior to its amendment by s 4(d) of the Admiralty Jurisdiction Regulation Amendment Act 87 of 1992 (which came into operation on 1 July 1992), but since the principal alteration effected by the amendment was simply to include the case where the person seeking the arrest has a claim enforceable by an action in personam, the Thalassini case remains an authoritative exposition of what an applicant must establish to achieve the arrest of a ship to provide security. In view of the amendment of the B subsection, requirement (a) (of the requirements set out at 832I-833A of the Thalassini case), namely 'that he has a claim enforceable by an action in rem against the ship in question or against a ship of which the ship in question is an associated ship', should be expanded to include, as an alternative, that he has a claim enforceable by an action in personam against the owner of the ship concerned or against the owner of the ship in relation to which the ship in question is an associated ship. (At 578G/H-579D/E.)

C As a matter of policy, there should be no deviation from the normal standard of proof, ie balance of probabilities, when it comes to the question whether an applicant under s 5(3) of the Act has established the requirement 'that he has a genuine and reasonable need for security in respect of the claim' (the Thalassini case supra at 833A). (At 581H-I.) If an applicant who already holds security wishes to obtain additional security, then he must be prepared to establish the genuine and reasonable need therefor on a balance of probabilities. (At 583E/F-F.)

D In the present case, the Court upheld the decision of the Provincial Division (in a successful application by the respondent in the Court a quo for the setting aside of the arrest by the appellant of a ship under s 5(3) of the Act as additional security for the appellant's action in rem against the respondent) that the appellant had failed to establish that the existing security (a ship arrested in the port of Rotterdam by order of a Netherlands Court) was inadequate and, therefore, that there was a genuine and reasonable need for the arrest of the ship in question in the E present case, which was berthed in the harbour of Saldanha Bay, in order to provide additional security. The appellant had also sought an order that, in the event of the Court a quo coming to such conclusion, the Court should direct that oral evidence heard. This application was also refused. The Court on appeal also upheld this decision of the Provincial Division, pointing out that there was a lack of any specific indication as to what oral evidence the appellant had in mind and that this increased the F difficulty of making a favourable assessment of the prospects of viva voce evidence tipping the balance in favour of the appellant. (At 587G.)

The dictum in Kalil v Decotex (Pty) Ltd and Another1988 (1) SA 943 (A) at 979H-I applied.

The decision in the Cape Provincial Division in Kotor Overseas Shipping Ltd v Bocimar NV confirmed. G

Case Information

Appeal from a decision in the Cape Provincial Division (Scott J), exercising its admiralty jurisdiction. The facts appear from the judgment of Corbett CJ.

Bertrand Hoberman SC (with him Russell W F MacWilliam) for the appellant: The leading case dealing with s 5(3)(a) of the Admiralty Jurisdiction H Regulation Act 105 of 1983 is Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris1989 (3) SA 820 (A). In that case the Court considered the provisions of s 5(3)(a) prior to its amendment by the Admiralty Jurisdiction Regulation Amendment Act 87 of 1992. However, insofar as the present appeal is concerned, nothing turns on those I amendments. At 832I-833A the Court summarised the requirements which an applicant must meet in order to obtain an order in terms of s 5(3)(a) of the Act. As regards requirement (a), it is common cause that the Kordun and the Gora are associated ships as defined in the Act. It is also common cause that, in the event of Zeta being personally liable to Bocimar as alleged by Bocimar, then Bocimar would be entitled to enforce its claim by J an action in rem against the Gora. As regards

1994 (2) SA p565

A requirement (b), the Court a quo found, correctly, that Bocimar had established a prima facie case. As regards requirement (c), the Court a quo found that Bocimar had failed to establish that it had a genuine and reasonable need for security. This appeal is against that finding. The Court a quo came to the conclusion that the third requirement set out in the Thalassini case supra has to be established on a balance of B probabilities. The learned Judge erred in this respect. It is sufficient if an applicant for an arrest in terms of s 5(3)(a) of the Act establishes prima facie that he has a genuine and reasonable need for security. The third requirement set out in the Thalassini case supra was considered in the earlier case of Katagum Wholesale Commodities Co Ltd v The MV Paz1984 (3) SA 261 (N) at 267I and 269I-270B. In the Thalassini case supra Botha C JA at 832F-G made the following observations in regard to these two passages:

'An applicant for an order in terms of s 5(3)(a) must satisfy the Court that he needs security in respect of his claim. This requirement was fully discussed in the case of The MV Paz (supra) by Friedman J at 268B-C and by D Didcott J at 269I-270B. In that case, the main proceedings had already been commenced and were pending in Hong Kong, and in view of the circumstances of that case particular aspects of the need to obtain security in a South African Court required to be emphasised (see eg per Friedman J at 268C-E). The need for such emphasis does not arise in the present case where the main proceedings are yet in contemplation. Subject to that observation, however, we are, with respect, in general agreement E with what was said in the MV Paz case on this score. By way of summary it may perhaps be said that an applicant must satisfy the Court, in the words of Didcott J, "that his need for security is both genuine and reasonable", a criterion which would embrace the further refinements mentioned in the judgments, such as that the applicant must explain that he is not bent on merely harassing the other side, and so forth.'

F Botha JA did not expressly consider the standard of proof required in regard to the need for security. However, what was said in the MV Paz case in the passages approved by Botha JA strongly suggests that the need for security - like the applicant's prospects of success in the main action - must be established only on a prima facie basis. The words 'allege and G explain' employed by Friedman J at 268B are particularly significant. While the first and second requirements prescribed in the Thalassini case appear from s 5(3)(a) itself, the third requirement is one which has been laid down by this Court. In laying down that requirement, this Court did not intend that the requirement should be established on a balance of H probabilities. This is so for the following reasons: (1) Had Botha JA in the Thalassini case supra intended that the applicant must satisfy the Court on a balance of probabilities that he needs security in respect of his claim, it would have been unnecessary for the learned Judge to have made the further point that the applicant must satisfy the Court that his need for security 'is both genuine and reasonable'. Having established his need for security on a balance of probabilities, the applicant would I thereby of necessity also have established that his need was genuine and reasonable. If, on the other hand, the need for security must be shown only prima facie...