Lendalease Finance (Pty) Ltd v Corporacion De Mercadeo Agricola and Others

• Jurisdiction: South Africa
• Judge: Rumpff CJ, Jansen JA, Corbett JA, Viljoen AJA and Miller AJA
• Judgment Date: 17 August 1976
• Citation: 1976 (4) SA 464 (A)
• Hearing Date: 24 May 1976
• Court: Appellate Division

Corbett, J.A.:

On 5 June 1975 appellant, Lendalease Finance (Pty.) Ltd. (hereafter referred to as 'Lendalease') made an urgent application to the Cape Provincial Division for the attachment ad fundandam jurisdictionem of a cargo of bulk maize B aboard the ship 'M.V. Mariannina', then in dock at the Cape Town harbour, and, if not already released to the shipper, of the full set of negotiable bills of lading relating to this cargo, together with certain ancillary relief. On 12 June 1975 the Court gave judgment (per DE KOCK, J., BAKER, J., concurring) dismissing the application and, save for some specific matters in respect of which special orders were made, C ordering Lendalease to pay the costs. This judgment has been fully reported (see Lendalease Finance Co. (Pty.) Ltd. v Corporacion De Mercadeo Agricola and Others, 1975 (4) SA 397 (C)) and it is, consequently, necessary to repeat only the salient facts and features of the matter.

In Venezuela maize is the staple food of the people. Large quantities of bread, particularly for persons in low income D groups, are made from maize. The annual consumption of maize by the people of Venezuela greatly exceeds the annual production of the country and consequently this commodity is imported on a large scale. In March 1974 a Venezuelan trade mission, consisting of Government officials, visited South Africa in order to purchase maize for the State of Venezuela. E As a result of this visit a contract for the purchase of approximately 250 000 tons of maize was concluded between the Maize Board of South Africa (hereafter referred to as 'the Board') and first respondent, Corporacion De Mercadeo Agricola of Caracas, Venezuela (hereafter referred to as 'CMA'). The reason for the purchase of so large a quantity was that there had been a maize crop failure in Venezuela. In October 1974 a F second Venezuelan trade mission visited this country with the same objective, and in that month a second contract for the purchase of, this time, 130 000 tons of maize was concluded between the same parties. It is only this second contract (which I shall call 'the maize contract') which is of relevance in this case.

It was provided in the maize contract, inter alia, that the G maize was to be shipped f.o.b. by the Board in ten separate cargoes of approximately 13 000 tons each. Two shipments were to take place in March 1975, four in April 1975 and four in May 1975. In each case the port of shipment was stated to be 'East London and/or Cape Town'. The contract obliged CMA to arrange for the necessary shipping to convey the maize to Venezuela. To this end it was made incumbent upon CMA to present 'suitable H tonnage' in respect of each cargo at the port of shipment nominated by the Board and to give the Board appropriate notification of the shipping periods in each month, of the actual chartering of freight, of the fitness and readiness of each individual vessel to receive and carry a full cargo of maize in bulk and of the readiness of the vessel to load. The contract further provided for the delivery of the maize in bulk into the ship's hold at an average rate of not less than 1 500 tons per day, or in bags to be provided by the purchaser and

Corbett JA

for the quantities delivered for shipment to the purchaser to be determined by mass certificates issued by the South African Railways Administration, (The cargo in question was loaded in bulk). The relevant portions of the clauses of the contract relating to delivery and payment read as follows:

'7. Delivery:	Delivery shall be free on board unstowed and A untrimmed the vessel presented by the buyer... and bills of lading supported by mass certificates... shall be proof of delivery.
10. Risk:	All risks after delivery shall be for the account of the buyer.
11. Payment:	(1) The buyer shall at least 10 days prior to the first day of the shipping period of each cargo furnish the seller with an irrevocable confirmed letter of credit issued by a bank acceptable to the B seller, covering the value of the maize to be shipped calculated at the price mentioned in clause 3, and stipulating that the amount payable by the buyer in terms of this contract shall be paid in cash on presentation by the seller of the following documents duly stamped and signed by a consul of a country which is friendly to Venezuela:
	(a) C Charter party bill of lading (full set clean on board to 'order' and endorsed in blank) marked 'freight payable as per charter party'. ............ (d) Mass certificates issued by the South African Railways Administration. ............

D Shortly after the conclusion of the maize contract and also in October 1974, CMA concluded an agreement with a corporation known as Leo Raphaely and Sons (Pty.) Ltd. (hereafter referred to as 'Raphaely'), of Johannesburg, whereby the latter undertook to convey the entire purchase of 130 000 tons of maize from South Africa to Venezuela and generally to take over E 'all the obligations and functions, rights and duties' of CMA pertaining to the maize contract, except those relating to the cost of the maize and the insurance thereof. This contract (which I shall call 'the shipping contract') provided, inter alia,

(i)

that payment of the agreed freight was to be effected by CMA by the provision of an irrevocable confirmed F letter of credit 14 days prior to the month of loading and by payment against one non-negotiable 'on board' bill of lading; and

(ii)

that the 'domicile of this contract' should be the city of Caracas, in the Republic of Venezuela, and that both parties accepted the jurisdiction of the Venezuelan courts in that city.

G The shipping contract was never implemented. Raphaely made arrangements for the conveyance of the first March shipments but CMA, despite demand, failed to provide the necessary irrevocable letter of credit for these shipments on due date, i.e., 14 February 1975, or indeed at all. During the last week of February a director of Raphaely, Mr. Gabriel Cutayar, was informed by Raphaely's representative in Venezuela that CMA was 'not happy with' the freight rate fixed by the shipping H contract and wished to re-negotiate this aspect of the agreement. Negotiations ensued, but to no effect. Thereafter CMA contracted with another company, Servicios Internacionales S.A., of Panama (hereafter referred to as 'Servicios'), to undertake the conveyance of the maize to Venezuela and the performance of its (CMA's) obligations in that regard under the maize contract.

Raphaely claimed-and continues to claim-that CMA unlawfully repudiated the shipping contract and that as a result of such repudiation and breach of contract Raphaely suffered damages in an amount of R1 970 340.

Corbett JA

In view of CMA's status as a peregrinus in the Courts of South Africa, Raphaely found it necessary to obtain an attachment of assets belonging to CMA ad fundandam jurisdictionem in order to pursue an action for damages for breach of contract against CMA in a South African Court. During April 1975 attempts were made A to effect the attachment of two cargoes of maize, one aboard the 'Adamas' and the other aboard the 'Kapitan Xilas' but, for reasons which need not be canvassed, neither attempt bore fruit.

Early in June 1975 loading of the last cargo under the maize contract, comprising approximately 13 000 tons of maize, on board the 'Mariannina' was commenced in the docks at Cape Town. The 'Mariannina' is owned by second respondent, Astro Venturoso B Compania Naviera SA (hereafter referred to as 'Astro'), and was then under a time charter to third respondent, Tramp Shipping Ltd. (hereafter referred to as 'Tramp Shipping'). For the purpose of conveying this cargo from Cape Town to Venezuela in terms of its contract with CMA, Servicios had chartered the 'Mariannina' from Tramp Shipping under a voyage charter party. C On 5 June the aforementioned application was made on notice of motion for the attachment of this cargo to found jurisdiction in respect of the action for damages for breach of the shipping contract. The application was brought not by Raphaely but by Lendalease, to whom Raphaely had on 3 June 1975 ceded and assigned all its right, title and interest in its claims against CMA for breach of contract. Only CMA was cited as D respondent but during the course of the initial hearing, on 5 and 6 June, Astro, Tramp Shipping and Captain Gregory Gregoriadis, in his capacity as master of the 'Mariannina', sought and evidently obtained leave to intervene as additional respondents. Affidavits were filed opposing the application on behalf of all the respondents and they were represented by E counsel. After the hearing the Court a quo issued a rule nisi, operating also as an interim interdict upon the ship leaving Cape Town, calling upon CMA and the master of the 'Mariannina' to show cause on 10 June why the deputy-sheriff should not be directed to attach and remove from the vessel the entire cargo of maize then on board. On the return day (10 June) the parties were again fully represented. At this hearing, which appears to F have occupied three days (10, 11 and 12 June) the Court heard and dealt with two preliminary applications and then proceeded to the merits of the matter. One of these applications, made on behalf of Astro, Tramp Shipping and the master, was for the dismissal of the application on the ground that the cession of its right of action by Raphaely to Lendalease was not a bona G fide one and that, therefore, Lendalease had no locus standi in judicio. In this connection it was emphasised that the admitted purpose of the cession was to overcome possible jurisdictional problems in regard to an incola of the Transvaal obtaining an attachment order in the Cape Provincial Division over property situated within the area of...