MV Jute Express v Owners of the Cargo Lately Laden on Board the MV Jute Express

• Jurisdiction: South Africa
• Judge: Corbett CJ, Botha JA, Milne JA, Goldstone JA and Howie AJA
• Judgment Date: 27 March 1992
• Citation: 1992 (3) SA 9 (A)
• Hearing Date: 17 February 1992
• Court: Appellate Division

Howie AJA:

The question raised by this appeal is whether, in terms of the Admiralty Jurisdiction Regulation Act 105 of 1983 ('the Act'), an J admiralty action in rem is commenced by arrest or by the issue of summons.

Howie AJA

A The appeal is brought, with the leave of the Court below, against the dismissal of appellant's special plea to the effect that respondents' action in rem was time-barred. The parties agreed, and the Court a quo ordered, that the issue raised by the special plea be decided separately from the other issues in the case.

B In the judgment of the Court below, which is reported in Owners of the Cargo lately laden aboard the MV Jute Express v MV Jute Express 1991 (3) SA 246 (D), the nature of the claim and the basic facts are set out by Howard JP as follows at 247H-248C:

'The plaintiffs sue by way of an action in rem for damages for delivery in a damaged condition and short delivery of cargo carried by the C defendant from Santos to Durban. The plaintiffs sue as holders of a bill of lading which embodies the terms and conditions upon which the cargo was carried. Clause 2 of the conditions of carriage renders the Hague Rules applicable to this transaction, and art 3(6) of the Hague Rules provides that

"(i)n any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one D year after delivery of the goods or the date when the goods should have been delivered".

It is common cause that the cargo was discharged at Durban and delivered between 12 and 20 July 1989, and that any cargo which the defendant failed to deliver should have been delivered by 20 July 1989.

On 21 July 1989 the defendant furnished security for the plaintiffs' claim, by way of a letter of undertaking which refers to the action which E the plaintiffs "intend to institute" and states that in consideration of the plaintiffs refraining from arresting the ship or an associated ship the Standard Steamship Owners Protection and Indemnity Association (Bermuda) will pay any amount not exceeding US$332 977,50 for which the defendant accepts liability or is found to be liable. The summons in the action was issued on 13 September 1990, more than a year after the goods in question were delivered or should have been delivered.'

F The learned Judge President concluded that the action was in time, it having commenced with the giving of the undertaking. For a proper consideration of his reasons and the arguments advanced on appeal it is appropriate at this juncture to refer to the various statutory and regulatory provisions central to the issue.

G Section 1(2) of the Act reads as follows:

'(2) For the purposes of any law, whether of the Republic or not, relating to the prescription of or the limitation of time for the commencement of any action, suit, claim or proceedings, an admiralty action shall be deemed to have commenced -

(a)

by the making of an application for the attachment of property to found jurisdiction if the application is granted and the attachment carried into effect;

(b)

H by the issue of any process for the institution of an action in rem if that process is thereafter served;

(c)

by the service of any process by which that action is instituted.' I

Section 3(5) provides:

'An action in rem shall be instituted by the arrest . . . of property . . . against or in respect of which the claim lies. . . .'

Section 3(10) reads as follows:

'(a)

Property shall be deemed to have been arrested or attached and to be under arrest or attachment if at any time, whether before or after the arrest or attachment, security or an undertaking has been given to prevent the arrest or attachment of the property or to obtain the release thereof J from arrest or attachment.

Howie AJA

(b)

A That security shall for the purposes of ss 9 and 10 be deemed to be the freight or the proceeds of the sale of the property.'

Section 9 empowers the Court to order at any time that the arrested property be sold and the proceeds be held as a fund in the Court or otherwise dealt with. Section 10 is not presently material. Section 11 lays down the order in which maritime claims rank. It is clear from that B section that such claims are met either out of a fund in the Court or security given in terms of the Act or the proceeds of property sold pursuant to an order or judgment in terms of the Act.

The Admiralty Proceedings Rules were promulgated in terms of the Supreme Court Act 59 of 1959, read with s 4 of the Act.

C The relevant provisions of Rule 3 read as follows:

'(1) An arrest in an action in rem shall be effected by the service of a warrant in accordance with these Rules.

(2)(a) A warrant shall be issued by the Registrar and shall be in a form corresponding to Form 2 of the First Schedule.

(b) D The Registrar may refer to a Judge the question of whether a warrant should be issued.

(c) Any such question shall be so referred if it appears from a certificate contemplated in Rule 3(3), or if the Registrar otherwise has knowledge, that security or an undertaking has been given in terms of s 3(10)(a) of the Act to prevent arrest or attachment of the property in question.

(d) E If a question has been so referred to a Judge, the Judge may authorise the Registrar to issue a warrant, or may give such directions as he thinks fit to cause the question of whether a warrant should be issued to be argued.

(e) If a question has been so referred to a Judge, no warrant shall be issued unless the Judge has authorised the Registrar to issue the warrant.

(3) Save where the Court has ordered the arrest of the property, the F Registrar shall issue a warrant only if summons in the action has been issued and a certificate signed by the party causing the warrant to be issued is submitted to him stating:

(a) that the claim is a maritime claim and that the claim is, or that on the effecting of the arrest the claim will be, one in respect of which the Court has or will have jurisdiction;

(b) that the property sought to be arrested is property in respect of G which the claim lies or, where the arrest is sought in terms of s 3(6) of the Act, that the ship is an associated ship which may be arrested in terms of the said section;

(c) whether any security or undertaking has been given in respect of the claim of the party concerned, or to procure the release, or prevent the arrest or attachment of the property sought to be arrested and, if so, what security or undertaking has been given and the grounds for seeking arrest notwithstanding that any such security or H undertaking has been given; and

(d) that the contents of the certificate are true and correct to the best of the knowledge, information and belief of the signatory and what the source of any such knowledge and information is.'

As regards the requirement in art 3(6) of the Hague Rules that 'suit (be) brought', Howard JP held, firstly, that to 'bring suit' was to I commence the appropriate proceedings for enforcing the claim and, secondly, that the question as to when suit was brought was to be determined by the law of the country and the practice of the Court where suit was brought. In support of the first conclusion the Court a quo referred to The Merak; T B & S Batchelor & Co Ltd (Owners of Cargo on the Merak) v Owners of SS Merak [1965] 1 All ER 230 (CA) at 238 and Dave Zick J Timbers (Pty) Ltd

Howie AJA

v Progress Steamship Co Ltd 1974 (4) SA 381 (D) at 383-4. As to the second, reference was made to Tetley Marine Cargo Claims 2nd ed at 343. Those conclusions were not disputed before us and can be accepted for present purposes as being correct. A

Concerning the relevant provisions of s 3 of the Act, the Court a quo B reasoned as follows. In s 3(5) the word 'institute', according to the ordinary meaning of that word as defined in leading dictionaries, and adopted in Msomi v South African Eagle Insurance Co Ltd 1983 (4) SA 592 (D) at 596E-G, meant to begin, commence, initiate, start or set on foot. Consequently, in terms of that subsection, an action in rem generally C commenced with the arrest of the property concerned. That basic provision was subject to the terms of s 1(2)(b) of the Act, whereby such an action...