Malilang and Others v MV Houda Pearl

• Jurisdiction: South Africa
• Judge: Corbett JA, Miller JA, Botha JA, Hefer JA and Nicholas AJA
• Judgment Date: 27 February 1986
• Hearing Date: 12 November 1985
• Court: Appellate Division

Corbett, JA.:

This is an appeal from a judgment of HOWARD J delivered in the Natal Provincial Division sitting as a Court B of Admiralty in terms of the Colonial Courts of Admiralty Act 1890 (32 and 54 Vict Ch 27). The judgment has been reported (see Magat and Others v MV Houda Pearl 1983 (3) SA 421 (N)). The proceedings in the Court a quo took the form of a consolidated action in rem by a number of seamen claiming wages due to them by the owner of the MV Houda Pearl. In pursuance of the action writs of summons were served and the Houda Pearl was C arrested in Durban harbour on 6 March 1980. After certain preliminary proceedings (as to which see the judgment a quo at 422A - D) the matter came to trial on 29 November 1982. At that stage only four of the original 13 plaintiffs appeared to prosecute their claims. At the conclusion of the trial HOWARD J gave judgment for the defendant with costs as against all four D plaintiffs. Leave to appeal having been granted in terms of s 20 (1), read with s 20 (4) (b), of the Supreme Court Act 59 of 1959, as amended, three of the unsuccessful plaintiffs, viz R R Malilang (first appellant and fourth plaintiff in the Court a quo), R B Valdecantos (second appellant and fifth plaintiff in the Court a quo) and A A Asaula (third appellant and eleventh plaintiff in the Court a quo) appeal to this Court against the E dismissal of their claims. The undisputed facts, as they appear from the viva voce evidence and evidence on affidavit adduced before the Court a quo, are shortly as follows.

At the time of the events with which this case is concerned the Houda Pearl was owned by the Jovial Maritime Co Ltd ("Jovial") F of Limassol, Cyprus and was managed by the Sultan Shipping Co Ltd ("Sultan"), also of Limassol. The vessel was registered in Cyprus and sailed under the Cypriot flag. The director and "owner" of Jovial was a Mr Gandur. He also owned, through a company called Springfield Shipping Corporation, the MV Houda G Star. This vessel too was registered in Cyprus, sailed under the Cypriot flag and was managed by Sultan. Both the Houda Pearl and the Houda Star are cargo vessels.

The Houda Pearl has a complement of 24, including the master. Appellant Malilang was engaged as a quarter-master and the appellant Valdecantos as an ordinary seaman, in terms of a written "crew agreement" entered into in Manila, Philippines, H on 9 August 1978 through the manning agency, Multi-Marine Phils Inc. Appellant Asaula was taken on as an electrician in terms of a written "shipboard employment contract" signed in Manila on 3 December 1978 through the manning agency, Philindo Shipping Corporation. The duration of each contract was one I year.

The appellants - and their fellow crew members - are all Filipinos. The Government of the Philippines encourages its nationals to obtain employment as seamen and in order to regulate the terms and conditions upon which Filipino seamen are engaged a Government agency known as the National Seamen Board ("NSB") has been established. Contracts entered into in J the Philippines for the employment of Filipino nationals

Corbett JA

A (usually concluded through a manning agency, acting on behalf of the owner) are governed by the law of the Philippines, which requires such contracts to be approved and registered by the NSB. Contracts not so registered are unenforceable by Philippine law.

A powerful influence on labour relations in the maritime field B is the International Transport Workers Federation ("ITF"), a federation of seamen's trade unions, with branches in many parts of the world and its headquarters in London. One of the main objectives of ITF is to obtain for seamen optimum wages and the best possible conditions of employment. It does so by C inducing shipowners to enter into an agreement (termed a "special agreement") in terms whereof the shipowner undertakes to employ seamen in accordance with certain stipulated working conditions and rates of pay as laid down in what is termed "the current ITF Collective Agreement for World-Wide Trading" and to incorporate these provisions into the individual contract of employment of each seaman. Recalcitrant shipowners are pressurized by a process known as "blacking". This is done in D ports where the ITF has a strong influence; and it amounts to ITF using that influence to induce the ship's crew to go on strike, and the port services, including stevedores, dockers, tug-men, pilots and others to refuse to handle the ship, with the result that the ship cannot be loaded or unloaded or in any way attended to and cannot leave port. Only when the shipowner has signed the required agreements does the "blacking" process E cease. (There have been a number of cases in England and elsewhere relating to ITF "induced" contracts, in which the "blacking" process is fully described: see eg Star Sea Transport Corporation v Slater, Laughton and Collarbone (The Camilla M) [1979] 1 Lloyds Rep 26 (CA) at 28 - 30; NWL Ltd v Woods ; NWL Ltd v Nelson and Another [1979] 3 All ER 614 (HL) at F 617 - 8, 631; Universe Tankships Inc of Monrovia v ITF (The Universe Sentinel) [1982] 2 All ER 67 (HL) and [1980] 2 Lloyds Rep 523 (QB and CA).)

The Government of the Philippines and the NSB are well aware of the aims and activities of ITF. They, however, take the view that if Filipino seamen demand the high wages laid down by the G ITF in the Collective Agreement they will have difficulty in obtaining employment in the face of competition by seamen from other countries. At the same time the Government of the Philippines is anxious to see that its nationals find employment as seamen. Accordingly, the NSB approves contracts of employment for seamen at wage scales far below those laid H down by the ITF. The seamen concerned are happy to accept lower wages in order to find employment. The NSB is happy that they should find such employment. And the shipowner, not unnaturally, appreciates the reduction in his wage bill. The only dissatisfied party is ITF.

Thus, by way of illustration, the appellants, Malilang and I Valdecantos, accepted under their crew agreement monthly salaries of US $210 and US $180 respectively; and in terms of his shipboard employment contract Asaula became entitled to a basic wage of US $500 per month. The corresponding ITF rates of pay were, it appears, US $644 for Malilang, US $462 for Valdecantos and US $920 for Asaula.

In October 1978 the Houda Pearl's sister ship, the Houda Star, entered the port of La Spezia, in Italy, in order to load a J cargo of iron. It, too, had

Corbett JA

a Filipino crew. After arrival in the port the crew went on A strike, demanding that they be paid according to ITF scales. Representatives of ITF appeared on the scene and the ship was "blacked". It seems to be a fair inference that the strike by the crew was inspired by ITF. The master of the Houda Star, one Kotroniys, immediately telephoned Sultan's office in Cyprus and as a result Mr Filippou, an employee of Sultan, came to La Spezia in order to negotiate with ITF. He and the master had B discussions with the representatives of ITF. At a certain point a lawyer from Genoa was called in to assist them in their negotiations. As a consequence of the pressure induced by the strike and the "blacking" of the vessel, Filippou, acting on behalf of the owners, entered into the required special C agreement with ITF and also agreed to distribute among the crew an amount of between US $100 000 and US $120 000 (Filippou could not recall the exact amount) as representing the difference between the wages paid to the crew to date and what they would have received in terms of the corresponding ITF rates of pay. In addition, in terms of the special agreement, D new crew agreements incorporating ITF wages and terms of employment were entered into.

During the course of the negotiations the ITF representatives made it clear to Kotroniys and Filippou that the same fate would befall the Houda Pearl in a port controlled by ITF unless the owner made similar arrangements with ITF. It was also E stated by the ITF officials that if the Houda Pearl was "put on the same basis" as the Houda Star there would be "no claim for back wages". The owner was sufficiently impressed with what had happened at La Spezia to respond positively to this suggestion. The precise sequence of events is not entirely clear, but it would seem that the crew signed new individual employment contracts and new ship's articles with the owners; F and that thereafter Filippou concluded, on behalf of the owners, a special agreement with ITF in respect of the Houda Pearl. The special agreement and the individual employment contracts signed by the appellants are all dated 27 January 1979 and are stated to take effect from 1 February 1979. In terms of the individual employment contracts and the ship's G articles the crew were to be paid at ITF rates of pay as from 1 February 1979. There is some indication that the individual employment contracts were actually signed in December 1978, but nothing appears to turn on this. For convenience I shall refer to the original contracts of employment signed by the crew members as the "NSB contracts" and the new contracts of H employment as the "ITF contracts".

According to Filippou, he signed these various agreements on behalf of the owners merely in order to avoid problems with ITF. There was, however, no intention on the part of the owners to pay wages on the ITF scales; and this was in fact not done. The crew continued to be paid in accordance with the scales I laid down in their NSB contracts. Apparently, in order to hoodwink ITF, the master periodically issued to the individual crew members "receipts" in each of which it was stated (falsely) that the member concerned was receiving the difference between the wage laid down in his original NSB contract and that prescribed in...