Mak Mediterranee Sarl v the Fund Constituting the Proceeds of the Judicial Sale of the MC Thunder (S D Arch, Interested Party)

• Jurisdiction: South Africa
• Judge: Scott J
• Judgment Date: 26 August 1993
• Citation: 1994 (3) SA 599 (C)
• Docket Number: AC 118/93
• Court: Cape Provincial Division

Scott J:

The questions in issue in this matter relate mainly to the ranking of competing claims in terms of s 11 of the Admiralty Jurisdiction Regulation Act 105 of 1983 ('the Act'). Before stating what they are, it is necessary to sketch briefly the circumstances in which they arise.

F On 28 August 1992 the vessel, MC Thunder, was arrested in Cape Town harbour at the instance of a local creditor, Globe Engineering Works (Pty) Ltd, in pursuance of an action in rem for the payment of moneys due for repairs and work done and material supplied. Various further arrests followed at the instance of other creditors and subsequently, on 16 November 1992, an order was granted authorising the sale of the vessel in G terms of s 9 of the Act. The sale took place on 27 November 1992 and the vessel realised an amount of US$900 000 (R2 716 200). This amount was duly invested in the name of the Registrar with a savings bank so as to earn interest ('the fund'). On 3 December 1992 this Court confirmed the sale and appointed an attorney as referee. In terms of the Court's order all H claims against the fund were to be filed with the referee by no later than 29 January 1993. In due course the referee filed his report containing his recommendations as to the acceptance or otherwise of the various claims against the fund and their ranking. The present application, which is brought by one of the claimants against the fund, is for an order directing the Registrar to effect payment to claimants in accordance with I the recommendations of the referee as set out in his report. A rule nisi was issued on 3 May 1993 and subsequently extended. On the extended return day the granting of a final order was opposed by one of the claimants, namely S D Arch ('Arch'), which is a firm carrying on business as architects, engineers and planning consultants at Dubai, United Arab Emirates.

J Initially the objection to the referee's report was made on several

Scott J

A grounds, but when the matter was heard, counsel for Arch limited the objection to two grounds only. The first was that the referee had incorrectly ranked one of Arch's claims ('the first claim') as a claim in terms of s 11(4)(f) of the Act, instead of s 11(4)(c)(v), and the second was that the referee had ruled that another of Arch's claims ('the second B claim') was not a maritime claim within the meaning of s 1 of the Act. On behalf of Arch it was contended that the second claim was indeed a maritime claim and that it should be ranked as a claim in terms of s 11(4)(c)(i) or, alternatively, s 11(4)(c)(v) or, alternatively, s 11(4)(f) of the Act. The parties were agreed that the issues arising from these objections were the only issues the Court was called upon to determine. C Indeed, by consent an order was made confirming the remainder of the recommendations of the referee.

The circumstances in which Arch's claims arose are as follows. On 2 May 1992 Arch and M C Marine Inc, being the former owner of the vessel, entered into a written agreement in terms of which the former loaned and D advanced to the latter the sum of US$350 000 which was repayable on 2 November 1992. It is not in dispute that the purpose of the loan was 'to fund renovations and maintenance work on the MC Thunder and to pay all running expenses'. As far as the first claim is concerned, it was accepted by the referee that the amounts set out below were used from the amount so advanced by Arch to pay for necessaries for the vessel obtained or E procured subsequent to 2 May 1992. The sums in question are R167 121,60; US$127 445,12; FF35 096,23 and DHS (Dubai Dirhams) 43 130.

As far as the second claim is concerned, it is not in dispute that from the amount so advanced the sums of US$27 812,30 and R300 were expended on F wages and advances on wages for the master and crew. Save for an amount of US$5 608, which was paid in respect of arrear wages, the amounts so expended all related to services rendered by the master and crew subsequent to 2 May 1992.

Before turning to the reasoning of the referee in making the recommendations he did, it is convenient to refer to the relevant G provisions of the Act. The term 'maritime claim' is defined in s 1(1) of the Act by reference to 32 categories of claim which are lettered (a)-(ff). Prior to the substitution of the definition by s 1(d) of the Admiralty Jurisdiction Regulation Amendment Act 87 of 1992, there were 26 such categories. In the previous definition the words 'any claim' were H repeated in each category and were linked to the subject-matter of that category by one of various prepositions or prepositional phrases such as 'to', 'for', 'relating to', 'in respect of', 'arising out of', 'in the nature of' and 'in regard to'. In the new definition the words 'any claim' are not repeated in each category and the same preposition and prepositional phrases now apply to each category of claim. The definition I at present thus begins - 'maritime claim means any claim for, arising out of or relating to' - and is followed by the 32 categories which, as I have said, are lettered (a)-(ff). The relevant categories in the present case are (m), (s) and (dd). They read:

'(m) the supplying of goods or the rendering of services for the employment, maintenance, protection or preservation of a ship;

J . . .

Scott J

(s) A the employment of any master, officer or seaman of a ship in connection with or in relation to a ship, including the remuneration of any such person, and contributions in respect of any such person to any pension fund, provident fund, medical aid fund, benefit fund, similar fund, association or institution in relation to or for the benefit of any master, officer or seaman;

. . .

(dd) any matter not falling under any of the previous paragraphs in B respect of which a Court of admiralty of the Republic referred to in the Colonial Courts of Admiralty Act, 1890 (53 and 54 Vict c 27), of the United Kingdom, was empowered to exercise admiralty jurisdiction immediately before the commencement of this Act, or any matter in respect of which a Court of the Republic is empowered to exercise admiralty jurisdiction.'

C The other relevant provisions are those dealing with the ranking of claims and are contained in s 11. It is sufficient for present purposes to reproduce ss (1)-(10) only. They read:

'11. Ranking of claims.

(1)(a) If property mentioned in s 3(5)(a)-(e) is sold in execution or constitutes a fund contemplated in s 3(11), the relevant maritime D claims mentioned in ss (2) shall be paid in the order prescribed by ss (5) and (11).

(b)

Property other than property mentioned in para (a) may, in respect of a maritime claim, be sold in execution, and the proceeds thereof distributed, in the ordinary manner.

(2) The claims contemplated in ss (1)(a) are claims mentioned in ss (4) and confirmed by a judgment of a court in the Republic or proved in E the ordinary manner.

(3) Any reference in this section to a ship shall, where appropriate, include a reference to any other property mentioned in s 3(5)(a)-(e).

(4) The claims mentioned in ss (2) are the following, namely -

(a)

a claim in respect of costs and expenses incurred to preserve the property in question or to procure its sale and in respect of the F distribution of the proceeds of the sale;

(b)

a claim to a preference based on possession of the property in question, whether by way of a right of retention or otherwise;

(c)

a claim which arose not earlier than one year before the commencement of proceedings to enforce it or before the submission G of proof thereof and which is a claim -

(i)

contemplated in para (s) of the definition of "maritime claim";

(ii)

in respect of port, canal, other waterways or pilotage dues;

(iii)

in respect of loss of life or personal injury, whether occurring on land or on water, directly resulting from employment of the ship;

(iv)

in respect of loss of or damage to property, whether occurring H on land or on water resulting from delict, and not giving rise to a cause of action based on contract, and directly resulting from the operation of the ship;

(v)

in respect of the repair of the ship or the supply of goods or the rendering of services to or in relation to a ship for the employment, maintenance, protection or preservation thereof;

(vi)

I in respect of the salvage of the ship, removal of any wreck of a ship, and any contribution in respect of a general average act or sacrifice in connection with the ship;

(vii)

in respect of premiums owing under any policy of marine insurance with regard to a ship or the liability of any person arising from the operation thereof; or

(viii)

J by any body of persons for contributions with regard to the

Scott J

A protection and indemnity of its members against any liability mentioned in subpara (vii);

(d)

a claim in respect of any mortgage, hypothecation or right of retention of, and any other charge on, the ship, effected or valid in accordance with the law of the flag of a ship, and in respect of any lien to which any person mentioned in para (o) of the definition of "maritime claim" is entitled;

(e)

B a claim in respect of any maritime lien on the ship not mentioned in any of the preceding paragraphs;

(f)

any other...