MV Alina Ii (No 1)Transnet Ltd v Owner of Alina Ii

• Jurisdiction: South Africa
• Judge: GRIESEL J
• Judgment Date: 20 October 2010
• Citation: 2011 (6) SA 40 (WCC)
• Docket Number: AC 04/10
• Hearing Date: 14 September 2010
• Counsel: RWF MacWilliam SC (with DJ Cooke) for the applicant. AM Stewart SC (with M Steenkamp) for the respondent.
• Court: Western Cape High Court, Cape Town

Griesel J:

[1] This is the extended return day of a rule nisi granted ex parte by Baartman J on 23 March 2010. In terms of the order, the sheriff for the district of Vredenburg was authorised and directed to attach 'the first I and second respondents' right, title and interest in the MV Alina II and her bunkers (the vessel)'. The application was brought for purposes of 'founding and/or confirming the jurisdiction of this court' for a claim in personam that the applicant, Transnet Ltd (Transnet), intends instituting against the respondents for payment of some R45 million, together with interest and costs. J

Griesel J

A [2] The owner of the vessel, a peregrinus in this court, [1] has been cited as the first respondent, with the demise charterers of the vessel being joined as the second respondent. However, it became common cause (for purposes of the present application at least) that there are no demise charterers in relation to the vessel, with the result that the second respondent as cited has fallen out of the picture. I accordingly refer to the B owner of the vessel herein simply as 'the respondent'.

Factual background

[3] At the time the order was granted, the vessel — a bulk carrier — was C berthed at the Langebaan Iron Ore Terminal in the port of Saldanha Bay. The vessel berthed and commenced loading a cargo of Sishen iron ore on 29 October 2009. The loading operation was completed on 31 October 2009, when it was noticed that the vessel had taken on a port list and her draught/trim had changed by approximately 50 cm by the head. Subsequent investigations revealed that the vessel's hull had D pre-existing damage and that there had been ingress of water into one of the ballast tanks, caused by a fracture in the hull. As a result of the damage and the fracture, the vessel could not safely depart from the terminal as the damage rendered her unseaworthy. In the result, the cargo had to be discharged to other smaller vessels, which entailed a E difficult and time-consuming operation. The vessel ultimately only left the berth and sailed from Saldanha Bay on 27 March 2010, ie some five months later.

[4] The port of Saldanha Bay is operated by Transnet. Its port operations are divided into two divisions: Transnet National Ports Authority F (TNPA), which manages, inter alia, the marine operations of the port, and Transnet Port Terminals (TPT), which manages the cargo-handling operations. The particular terminal at the Saldanha Bay harbour consists of two berths. As a consequence of the vessel's continued occupation of the one berth, only one berth was available for Transnet to conduct its G other business during the period in question.

[5] Arising from these, facts, Transnet claims to have suffered damages, which it is seeking to recover from the vessel by way of two separate actions in rem. On 13 January 2010 it accordingly caused the arrest of the vessel in terms of s 3(5) of the Admiralty Jurisdiction Regulation Act 105 of 1983 H (the Act). In case No AC 104/09 Transnet claims damages amounting to R34,8 million sustained by TPT, and in case No AC 3/10 it claims that the damages sustained by TNPA amount to some R10,3 million. In both actions Transnet's causes of action — save for the quantification of damages — are pleaded in identical terms: first, Transnet relies on a contractual claim, alleging that the owner of the vessel I breached a term of a contract between the parties that the vessel would be in a seaworthy and structurally sound condition upon her entry into port and maintained in such condition while in port. In the alternative, Transnet relies on a delictual claim in which it is alleged that the owner

Griesel J

of the vessel, either directly or vicariously through its employment of the A crew of the vessel, negligently breached a legal duty that it had to ensure that the vessel was in a seaworthy and structurally sound condition when she entered port and while she remained there.

[6] After the actions in rem had been instituted and security for the B release of the arrest had been provided, Transnet formed the view that its security for the in rem actions would be 'wholly insufficient' to satisfy its claims in full, regard being had to the value of the vessel and claims instituted against her by other creditors. Transnet accordingly decided to institute an action in personam against the respondent, in addition to and based on the exact same causes of action as the two pending actions C in rem. As a precursor to the proposed action in personam, the present application for attachment was launched, which forms the subject of the present application.

[7] Copies of the attachment order were duly served by the sheriff, as directed by the order. Thereafter, on 27 March, the respondent's D Protection & Indemnity club furnished Transnet with security for its claim in the form of a letter of undertaking. The vessel was thereupon released from attachment and sailed from the port of Saldanha Bay on the same day, as mentioned earlier.

[8] In due course the respondent delivered an answering affidavit in the E present application, in which it opposes the confirmation of the rule nisi on several different grounds, not all of which need to be considered for purposes hereof.

Abuse of court process

[9] The respondent's main defence to the application was that the F attachment is 'improper, an abuse of process [and] prohibited by lis pendens'. In amplification, the respondent contended that the contemplated action in personam is 'in effect a duplication' of the in rem actions that had already been commenced against the vessel. This is so (according to the respondent) because the actions in rem and in G personam are based on the same underlying cause of action and arise from the same in personam liability. In fact, the alleged in personam liability of the owner of the vessel forms the very foundation to and underpins the actions in rem by virtue of the provisions of s 3(4)(b) of the Act. [2] Having elected to pursue its claims by way of proceedings in rem, so the respondent argued, the applicant cannot now seek to pursue H the same claim in a separate action in personam. If this were to be allowed, so it was argued, it would in effect mean that there would be three separate actions pending in the same court between the same parties and founded upon the same causes of action, which would offend against the principle of lis alibi pendens and thus amount to an abuse of the court's process. I

Griesel J

A [10] Secondly, in view of the preceding arrests of the vessel by the applicant in rem, the applicant's claims were 'properly and sufficiently secured'. In these circumstances the applicant is not entitled to bring the attachment application for the purpose 'of obtaining additional security over and above the value of the vessel in circumstances where the same claims were well secured by the arrest of the vessel and its bunkers in the B in rem proceedings'.

[11] The applicant countered by relying on the provisions of the Act as well as the Admiralty rules, pointing out that the action in rem is in C substance, and not only in form, a separate proceeding with a different defendant to an action in personam. Thus, the property arrested in rem must be named as the defendant [3] and the summons must be served on the property itself. [4] Proceedings in personam, on the other hand, carry with them important advantages. In particular, the judgment is granted against the owner of the property, not the res, and the judgment is not D limited to the value of the res. Thus, in an action in personam execution can be levied against any property belonging to the owner and is not limited to the property arrested. The corollary is that, if a claimant in an action in rem were not to obtain satisfaction from the proceeds of the res, it would be entitled to sue the owner in personam for the balance. [5] It E follows further, according to the applicant, that lis alibi pendens does not arise because the in rem and in personam proceedings are entirely distinct. In these circumstances, so the applicant argued, there is nothing precluding it from proceeding simultaneously both by way of an action in personam and an action in rem — even though the underlying causes of F action may be the same. Counsel referred in this regard to s 3(1) of the Act which expressly states that, subject to the provisions of the Act, 'any maritime claim may be enforced by an action in personam'. Moreover, s 3(4) permits a claim to be enforced by an action in rem '(w)ithout prejudice to any other remedy that may be available to the claimant'. These provisions, according to the applicant, entitle a claimant to bring G an action simultaneously in rem and in personam in the same or separate proceedings. [6] Reliance is placed in this regard on the provisions of admiralty rule 22(5)...