Continental Illinois National Bank and Trust Co of Chicago v Greek Seamen's Pension Fund

• Jurisdiction: South Africa
• Judge: Thirion J
• Judgment Date: 14 December 1988
• Citation: 1989 (2) SA 515 (D)
• Hearing Date: 22 April 1988
• Court: Durban and Coast Local Division

Thirion J:

On 7 April 1984 the Greek vessel MV Tatiana was arrested off Richards Bay Harbour in an action in rem instituted against it by the present applicant in this Court in the exercise of its Admiralty jurisdiction. On 17 August 1984 the Court, on the application of the H applicant, granted an order in terms of s 9 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act) authorising the sale of the Tatiana and directing that the balance of the proceeds of the sale remaining after deduction of certain costs and expenses and a sum payable in terms of s 31 of the South African Transport Services Act 65 of 1981 be held as a 'fund in the Court to be paid in accordance with s 11 of Act 105 of 1983'. Pursuant to this order the Tatiana was sold I by auction and the balance of the proceeds of the sale was paid into Court.

On 20 September 1984 Wilson J on application of the applicant ordered 'that claims with regard to the fund in Court constituted by the proceeds of the sale of the vessel MV Tatiana be paid subject to the conditions' set out in the order. The 'conditions' set out in the order were that all claims had to be filed with the referee appointed in J terms of the order and that

Thirion J

A every claim so filed had to be supported by an affidavit and by such documentation as would be appropriate to prove the claim. In the order a referee was appointed'for the purpose of receiving, considering and reporting to the Court on any claims so filed, with power:

(a)

to call for further information with regard to any such claim;

(b)

B to call for representations from any person who wishes to make representations with regard to any such claim;

(c)

to require that any such information or representations be made within such time as he may decide with power to extend any such time;

(d)

C to adopt with regard to the consideration of any such claim such procedure as he deems appropriate to enable him to report thereon;

(e)

to engage any person, whether or not such person is an attorney acting for any party who has filed or proposes to file a claim, to perform any function or render any assistance to the referee as the referee may require with power to arrange with the D said person for remuneration;

(f)

to report to the Court on the said claims with his recommendations as to the acceptance or otherwise and as to the ranking of any such claims.'

The order further directed that:

'(i)

E When the referee has submitted his report to this Court he shall notify all persons who have filed claims that he has so reported.

(ii)

Any person who has filed a claim shall be entitled to obtain from the Registrar a copy of the said report.

(iii)

Any such person shall be entitled to cause the matter to be F set down on a date arranged with the Registrar, of which notice shall be given to all persons who have filed claims, for the purpose of obtaining the decision of this Court as to the giving effect to or variation of the said report.'

G Finally the order provided for the remuneration of the referee and gave directions as to the manner of publication of the order.

The referee appointed in terms of this order reported to the Court in December of 1984. It appears from the referee's report that some 37 claims were lodged with him. He considered these claims and the information on which they were based and recommended to the Court the acceptance of certain of the claims. He reported on the ranking of H the claims and their order of preference.

Among the claims lodged with the referee was a claim by the present respondent, the Greek Seamen's Pension Fund. The referee reported as follows on this claim:

'50.

There was one claim lodged with me in regard to which a preference was claimed in terms of s 11(1)(c)(i), namely a claim by I the Greek Seamen's Pension Fund in an amount of US $56 098 in respect of contributions due in respect of the master and crew of the vessel to various funds operated by the claimant and which amounts it is obligatory for the shipowner to pay and, in regard to a portion thereof, to deduct from wages, in terms of an agreement (known as the Greek Collective Agreement) concluded between the Greek trade unions J representing the seamen and the association of Greek shipowners.

Thirion J

51.

A This claim is not one which was capable of being enforced by way of an action, either in personam or in rem before this Court sitting in the exercise of its Admiralty jurisdiction, inasmuch as that jurisdiction is restricted to a jurisdiction to deal with maritime claims as defined and the only relevant category of claim would be that set out in s 1(1)(ii)(n) of the Act which deals with

'any claim by a master or member of the crew of a ship arising out B of his employment'.

As the Greek Seamen's Pension Fund is neither a master nor a member of the crew it would not have been entitled to institute proceedings before this Court to enforce its claim. Cf The Acrux [1965] 2 All ER 323 (PDA).

52.

However, the wording of s 11(1)(c)(i) of the Act, which deals with claims in respect of

C '(w)ages and other sums due to or payable in respect of the master, officers and other members of the ship's complement, in connection with their employment on the ship'

(my italics) is considerably wider than those used to define a maritime claim....

53.

It seems to me clear that the Legislature intended to widen D the scope of the preference traditionally extended by way of maritime lien to the wages and emoluments of the master and crew by including amounts payable to third parties in respect of the master and crew and enuring to their benefit, whether such amounts are paid under a statute or under a contract.

54.

Whilst therefore the sums claimed do not, on the authority of The Acrux (supra), constitute emoluments of the crew they seem to me E clearly to be 'other sums payable in respect of the master, officers and other members of the ship's complement in connection with their employment on the ship'. In my view therefore this claim is entitled to preference in terms of s 11(1)(c)(i) to the extent that funds to which contributions fall to be made enure for the benefit of the master and crew which appears to be the case insofar as the claims are in respect of the NAT Pension and Provident Funds; the amount of F family allowances and possibly auxiliary insurance.

55.

The information furnished to me is, however, insufficient to raise more than a prima facie case that the amounts claimed are owing and it would be necessary in order to resolve this question and the question of whether the funds enure for the benefit of the master and crew to examine at least the Greek Collective Agreement and possibly the documents in terms of which these funds are constituted. That G might take some time and it would be unfair to other creditors to delay this report further whilst waiting for this information. I have accordingly in annexure 'H' hereto provided for this claimant to furnish further proof of its claim and provided further for the claim to be examined and tested by the applicant, which is the only creditor which would be detrimentally affected by the claim being admitted.'

H The referee set forth in a draft order his recommendations for the distribution of the fund and the order of preference in which the claims should be paid. Paragraphs 2 - 8 of the draft order dealt with the respondent's claim. Paragraph 2 reads:

'The claim by the Greek Seamen's Pension Fund is declared to the extent that it represents payments to a fund or funds which enures to I the benefit of the master and crew of the MV Tatiana to be entitled to a preference against the fund in terms of the provisions of s 11(1)(c)(i) of Act 105 of 1983.'

As the referee was unable to determine on the available information the amount of the claim he set forth in paras 3 - 8 of the draft order his proposals for the procedure to be adopted for the computation of J the claim.

Thirion J

A On 14 February 1985 this Court on the application of the present applicant issued a rule nisi calling upon all interested persons to show cause why an order should not be granted giving effect, with certain amendments, to the report of the referee as embodied in the draft order prepared by him. One of the proposed amendments was that paras 2 - 8 of the draft order be deleted. This proposed amendment, if carried B into effect, would have meant that the respondent's claim would have been excluded from participation in the distribution of the fund. The respondent accordingly opposed confirmation of the rule nisi and filed a notice of opposition asking that an order be granted in terms of paras 2 - 8 of the draft order prepared by the referee.

C On 8 March 1985 this Court granted an order confirming the rule nisi with certain amendments which are not now relevant and ordered that the issues raised by the respondent's opposition be dealt with in accordance with a procedure to be agreed upon between the parties and, failing agreement, to be laid down by the Court. The Court also ordered that the fund be distributed in accordance with the report of the referee, D save that an amount be retained sufficient to cover certain disputed claims, including the claim of the respondent.

All disputes regarding the distribution of the fund save that raised by the respondent's opposition to the rule nisi have been settled. The E respondent has filed further affidavits in amplification of its claim and the applicant has responded thereto.

The issues raised in the affidavits between applicant and respondent are now before me for decision.

The parties are in agreement that I need decide only the following of the issues:

'1.

F Whether or not the respondent's claim is a 'maritime claim' as...