MV Akkerman Fullwood Shipping SA and Another v Magna Hellas Shipping SA

• Jurisdiction: South Africa
• Judge: Thring J
• Judgment Date: 12 April 2000
• Citation: 2000 (4) SA 584 (C)
• Docket Number: AC 155/98
• Counsel: MJ Fitzgerald SC (with him P Eia) for the applicants. M Wragge for the respondent.
• Court: Cape Provincial Division

Thring J:

Factual background

On or about 23 November 1998 the respondent caused the MV Akkerman (which is now the second applicant, but to which I shall refer as 'the vessel') to be arrested in the port of Cape Town. D It then instituted an action in rem in this Court against the vessel for the payment of US $493 126 together with interest and costs, alleging that this amount was due to it in respect of certain repairs carried out to another ship, the MV Nikita Mitchenko, at Odessa in 1996. The repairs were allegedly effected E pursuant to a written contract concluded at Odessa on or about 3 May 1996 between the respondent and the owner of the Nikita Mitchenko, viz the Black Sea Shipping Co (which is referred to in the papers, and to which I shall refer, as 'Blasco'). The respondent avers that the vessel is a ship associated with the Nikita Mitchenko within the meaning of s 3(6) and (7) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (to which I shall F refer as the Act). The first applicant is the owner of the vessel. On 8 December 1998 the first applicant furnished a bank guarantee in respect of the respondent's claim and the vessel was released from arrest.

The applicants have delivered their plea to the respondent's claim, as well as a special plea and a claim-in-reconvention. In the latter G the applicants aver that, pursuant to the repair contract, Blasco paid the respondent the sum of US $300 000; that the contract is invalid ab initio according to Ukrainian law and is accordingly unenforceable against Blasco; and that Blasco is consequently entitled to be repaid this sum by the respondent. Alternatively, it is alleged that the repairs were completed only 37 H days after the expiry of the period of 55 days stipulated in the contract; that in terms of the contract the respondent is obliged to pay Blasco US $5 000 per day in respect of this delay; and that the respondent is accordingly liable to Blasco in the sum of US $185 000. However it has since become apparent, and it is conceded by the applicants, that, by virtue of another provision of the contract, I this claim is limited to US $79 312. The applicants aver that Blasco has ceded its claims against the respondent to the first applicant. The first applicant consequently claims in reconvention from the respondent the sums of US $300 000, alternatively US $185 000 (presumably to be reduced to US $79 312) together with interest and costs. J

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The respondent is yet to plead to the applicants' claim-in-reconvention. A

The application to dismiss the respondent's action

On 19 November 1999 the second applicant served on the respondent a notice in terms of Rule 47(1) of the Uniform Rules of Court in which it demanded security in the sums of R353 646,67 in B respect of its South African costs of defending the respondent's action and \P42 105 in respect of its English costs on the ground that the respondent is a peregrinus of this Court and owns no assets within this Court's jurisdiction against which the second applicant could execute any order as to costs which it may be granted. C No security was furnished and in terms of Rule 47(2) the matter was referred to the Registrar of this Court for him to determine the amount thereof. On 15 December 1999 an Assistant Registrar determined the amount of security to be furnished in the sums demanded in the notice. Both the applicants and the respondent were represented before the Assistant Registrar. The period of ten days stipulated in Rule 47(3) D elapsed on 4 January 2000 without any security being forthcoming and on 10 January 2000 the applicants served on the respondent a notice of motion in which they applied to this Court for an order directing the respondent to furnish the required security within five days of the date on which the order was to be made, failing which its action against the vessel would be dismissed. E

On 12 January 2000 legal representatives of both the applicants and the respondents were present in this Court when Comrie J made an order in the following terms:

'1.

The respondent is directed to furnish security to the applicants in a form acceptable to them or, failing agreement between F the parties as to the form thereof, in a form acceptable to the Registrar of this Court, such security to be in the amount of R353 646,67 and GBP 42 105, being in respect of the applicants' South African and English costs respectively, as determined by the Taxing Master of this honourable Court and relating to the G respondent's claim in convention filed under case No 155/98.

2.

The security referred to in para 1 above shall be furnished within 15 days of the date upon which this order is made.

3.

Should the respondent fail to provide the security in the amount and within the time stipulated in paras 1 and 2 above, the H applicants are given leave to apply to this honourable Court on the same papers, amplified as may be necessary, for an order that the respondent's action brought under case No AC155/98 be dismissed with costs and that the arrest of the MV Akkerman effected on 23 November 1998 at the instance of the respondent be set aside. I

4.

The costs of this application shall stand over for later determination.'

All the terms of this order were agreed to by the parties, save for the period mentioned in para 2 thereof. The respondent's attorney did indicate to the applicants' legal representatives, however, that the J

Thring J

respondent was contemplating instituting proceedings to have the A Registrar's determination of the amount of the security reviewed. The aforesaid period was disputed on behalf of the respondent and was fixed by the learned Judge at 15 days. This period elapsed on 2 February 2000 without the respondent furnishing the security. The applicants now apply in terms of para 3 of the order for the respondent's action to be dismissed with costs and for the arrest of B the vessel to be set aside.

The respondent resists the application.

On or about 26 January 2000 the respondent instructed its Cape Town attorneys to apply for the Registrar's determination of the amount of the security to be reviewed by this Court and the applicant's attorneys were requested on that date not to proceed to C implement the provisions of para 3 of the order pending the outcome of the review. However, the applicants regarded this as a delaying tactic on the part of the respondent and indicted that they intended to proceed with their application for the dismissal of the respondent's action, which they then did. On the same day as their application was D served, 4 February 2000, the respondent served on the applicants' attorneys its application to review and set aside the Registrar's determination. The respondent has brought a counter-application for an order in the following terms:

'1.

The order granted by this honourable Court on 12 January 2000 under case No AC155/98 is hereby stayed pending the outcome of the E review application filed under case No AC774/2000.

2.

Applicant's application to strike out respondent's action is hereby stayed pending the outcome of the review application filed under case No AC774/2000.'

It is clear that the respondent has failed to comply with the terms of para 2 of the order and that, prima facie, the F applicants are entitled to an order dismissing the action.

It was not clear to me what precisely was envisaged in prayer 1 of the respondent's counter-application by the phrase '(t)he order . . . is hereby stayed . . .' as there is no provision of which I am aware in the Rules or elsewhere for the 'stay' of an order of this Court. However, in the course of counsel's argument it became apparent G that what the respondent really seeks is an order that effect should not be given to Comrie J's order pending the outcome of the review proceedings: in effect, a kind of stay of execution.

It becomes necessary to consider what the effect on the order would be of success for the respondent in the review. Mr H Fitzgerald, who with Mr Eia appears for the respondent, submitted that in such an event it would be open to the respondent to approach this Court at some future time for a variation of the order so as to reflect the reduced amount of security as determined by the reviewing Court. He argued, first, that this Court I would have inherent power to vary the order so as to prevent an abuse of its process. He disavowed any reliance on the provisions of Uniform Rule 42 and, in my view, rightly so: for the order was not sought or granted erroneously in the absence of any party affected thereby; nor does it contain any ambiguity, patent error or omission; nor was it granted as the result of a mistake common to the parties. Nor do the J

Thring J

provisions of Uniform Rule 31(2)(b) avail the respondent for it has not been in default of delivery of a notice of intention to A defend or of a plea.

At common law a final judgment can be set aside or varied by the Court which granted it only on grounds of fraud, justus error (on rare occasions), in certain exceptional circumstances when new documents have been discovered and where the judgment has been granted by default: see Erasmus Superior Court Practice at B B1 - 307 and the authorities there referred to. None of these grounds exist in this matter and if Comrie J's order is a final judgment it will not be susceptible of being set aside or varied by this Court in the exercise of its common-law powers. I hasten to add that no leave has been sought by the respondent to appeal against the order to a Court of higher jurisdiction. C

But Mr Fitzgerald argued that the order was not a final judgment: he contended that it was no more than a simple interlocutory order or ruling. That being so, he submitted, it could at any time before final judgment in the action be varied...