Elgin Brown & Hamer Proprietary Ltd v Sheriff Duly Appointed Deputy of the High Court Durban Coastal and Others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Olsen J
• Judgment Date: 27 October 2022
• Docket Number: A24/2022
• Hearing Date: 10 August 2022
• Court: KwaZulu-Natal Local Division, Durban
• Citation: 2022 JDR 3189 (KZD)

Olsen J:

[1]

This application comes before the court exercising its admiralty jurisdiction because it involves, inter alia, a claim to possession of a floating crane, a "ship" as defined in the Admiralty Jurisdiction Regulation Act, 105 of 1983. The applicant is or was the owner of the floating crane: Imvubu which was sold in execution on 10 May 2022. The first respondent is the Sheriff under whose office the sale was conducted.

[2]

The second respondent was formerly an employee of the applicant. He obtained a "default award" against the applicant from the CCMA for payment of an amount of R658 862.83. The sale in execution of the Imvubu was at the instance of the second respondent for recovery of the amount of the award.

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Olsen J

[3]

The third respondent bought the Imvubu at the sale. After the sale it was removed to the quay abutting premises leased by the fourth respondent. The fourth respondent has taken no part in these proceedings.

[4]

The application was launched as an urgent one. The urgent relief was aimed principally at preventing the release to the second respondent of the proceeds of the sale, and preventing the first respondent from taking any steps to register transfer of ownership of the Imvubu to the third respondent. Urgent relief was also sought to interdict the third and fourth respondents from dealing in any way with the floating crane. I was informed from the bar that undertakings with regard to the interim relief had been given pending the determination of the application.

[5]

The principal relief sought was an order setting aside the sale in execution. Consequential orders were also sought, that the purchase price should be repaid to the third respondent, that the second respondent pay the wasted costs incurred by the first respondent in connection with the sale, and that the vessel be returned to the possession of the applicant.

[6]

Under the heading "Background Information", the founding affidavit described how the applicant had got into difficulty as regards its liquidity as a result of the Covid-19 pandemic and the consequent global lockdown. It had found it necessary to make an offer of compromise to creditors, the details of which were apparently regarded as unnecessary for the purposes of the present application. The affidavit asserted that the second respondent had agreed to participate in a distribution under the terms of the compromise. Notwithstanding this the Imvubu was attached on or about 4 March 2022 as a result of which Mr Mthethwa, the deponent to the applicant's affidavits and its managing director, contacted the second respondent to confirm that he was participating in the compromise and would not be proceeding with the execution process upon which he had embarked. According to Mr Mthethwa the second respondent said that he would instruct his attorneys to withdraw the attachment. The second respondent denies that any such undertaking was given by him or that his claim under the award from the CCMA was submitted to

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Olsen J

participate in the compromise. To the extent that the relief sought by the applicant rests upon these exchanges, it cannot be granted. The disputes of fact in connection with the issue are material and cannot be resolved without oral evidence.

[7]

Nevertheless, according to Mr Mthethwa it came as something of a surprise to the applicant to learn that a sale in execution had taken place on 10 May 2022, and that the Imvubu had been sold for approximately R800 000, a price considerably below the value of the vessel, and also below the price at which the applicant had earlier sold the vessel to a third party. Mr Mthethwa had not seen any advertisement of the sale and he states that he would have applied to interdict the sale if he had received prior notice that it was due to take place, upon the basis that the second respondent had bound himself to participate in the compromise.

[8]

In the founding affidavit it is contended that during the night of 11 May 2022 or the early morning of 12 May 2022 "someone unknown to the applicant came by vessel to the applicant's premises and towed away the floating crane. This was done without the applicant's knowledge and was only established by the applicant on 12 May 2022". It is asserted that at the time the applicant was in peaceful and undisturbed possession of the Imvubu and that the applicant was entitled to spoliatory relief, in the way of the immediate return of the vessel.

[9]

This claim to spoliatory relief is hotly contested on the papers. There are substantial material disputes of fact. In short the third respondent asserts that the vessel was removed to the quay adjacent to the fourth respondent's premises openly and with the knowledge of the applicant's employees and the authority of the first respondent. I do not propose to furnish an account of these factual disputes in this judgment. When the topic of spoliatory relief arose in argument I understood counsel for the applicant to accept the proposition that, unfortunately for the applicant, success on the basis of spoliation could only be achieved upon a resolution of the relevant factual disputes favourable to the applicant, something which could not be achieved on paper. Counsel did not address me on the

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Olsen J

subject of how it might be possible to resolve those material disputes without going to oral evidence.

[10]

I should deal at this stage with another contention of the applicant, raised to address the contingency that its attack upon the validity of the process of execution (a subject to which I must still turn) is unsuccessful. It is a claim which rests upon the proposition that the third respondent cannot assert that the sale, and consequently its right to possession of the Imvubu, is unimpeachable in terms of s 70 of the Magistrates' Courts Act, 32 of 1944, until and unless the third respondent has acquired ownership of the vessel. The Imvubu is a vessel registered in terms of the Ship Registration Act, 58 of 1998. The applicant contends that ownership of a registered vessel can only pass by following the procedures with regard to registration set out in the Ship Registration Act, something that has not been done.

[11]

Putting aside the fact that, in the case of movable property such as the vessel, the operation of s 70 turns on delivery, and not on transfer of ownership, in my view the applicant's reliance on the Ship Registration Act is misplaced. Section 31(7) of that Act is to the effect that the transfer of a share in a ship is governed by Schedule 1 to the Act. Schedule 1 is headed "Private Law Provisions for Registered Ships". Item 3 of Schedule 1 is to the effect that a ship or a share in a ship is transferred by registration of a bill of sale made in the prescribed form. That is what the applicant says has not happened. But the provisions of Item 3 are expressed to be "subject to item 4". Item 4(1) of the Schedule reads as follows.

'Where any interest in a ship or a share in a ship is transmitted to a person by any lawful means other than by a transfer in terms of item 3 and the ship continues to be entitled to be registered, that person must make a declaration of transmission in the prescribed form and must lodge that declaration, together with the evidence of the transmission that may be prescribed, with the Registrar within 14 days of that transmission taking place or within the further period that the Registrar may allow in special circumstances.'

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Olsen J

Item 4(2) is to the effect that subject to other considerations not relevant hereto, the Registrar must "thereupon enter in the Register the name of that person as owner of the ship or share."

[12]

The "transmission" of the vessel Imvubu to the third respondent was, subject to the validity of the sale in execution, achieved by "lawful means". If the sale was valid the third respondent acquired ownership of the vessel and is entitled to secure the registration of its rights as owner. This understanding of Schedule 1 accords with the view expressed by G Hofmeyr, Admiralty Jurisdiction Law and Practice in South Africa 2 ed (2012) Note 38 at 26 - 27, that "while registration in a ship's register constitutes acceptable evidence of ownership, registration is not conclusive proof of ownership". (See also the two judgments referred to in that note.)

[13]

I turn then to the applicant's attack upon the process of execution as the basis for an order that the sale in execution should be set aside.

[14]

Section 143(5) of the Labour Relations Act, 66 of 1995 is to the effect that

'an arbitration award in terms of which a party is required to pay an amount of money must be treated for the purpose of enforcing or executing that award as if it were an order of the Magistrate's Court.'

The applicant's first line of attack is that the attachment of the vessel made on 4 March 2022 was invalid because the first respondent had purported to exercise the power of attachment in execution not under the Magistrates' Courts Act, but "in accordance with the provisions of the Supreme Court Act 59 of 1959, as amended." The words just quoted appear on the notice of attachment immediately below the upper portion of the document which identifies the parties. However in my view the applicant takes too narrow a view of the document, which must be considered as a whole. In this Division we are still accustomed to receiving returns of service with the endorsement just quoted above. Nothing is made of it. Speaking for myself I disregard it on the assumption that the Sheriffs utilise software for the...