MV MSC Susanna: - Owners and Underwriters, MV Msc Susanna and Another v Transnet SOC Ltd and Others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Navsa JA, Wallis JA, Schippers JA, Mbatha JA and Gorven JA
• Judgment Date: 01 September 2021
• Court: Supreme Court of Appeal
• Hearing Date: 01 September 2021
• Citation: 2022 (2) SA 85 (SCA)
• Counsel: SR Mullins SC (with PJ Wallis SC) for the appellants. CJ Pammenter SC (with D Cooke) for the respondents.
• Docket Number: 1039/20 [2021] ZASCA 135

Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring):

[1] On 10 October 2017, during a substantial storm in the port of Durban, the MSC Susanna broke her moorings and, while drifting in the

Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring)

port, collided with several vessels, including the FNS Floreal. The Floreal was a French naval vessel under the control of the second respondent, the Ministère des Armées (the Ministry) of the French Republic. The MSC Susanna also collided with cranes and other infrastructure owned by the first respondent, Transnet SOC Ltd — the National Ports Authority of South Africa (the NPA). The NPA sued the appellants, respectively the owners and underwriters on the one hand, and the demise charterer on the other, of the MSC Susanna, for damages in an amount of some R23 million arising out of this incident. The Ministry's response to the appellants' action for a declaration of non-liability in relation to the damages to the Floreal was to lodge a counterclaim for damages amounting, together with interest and costs, to nearly €10 million.

[2] Given the value of the actual and potential claims against the appellants, on 7 November 2019 they issued a writ of summons in a limitation action against the NPA, contending that their total liability for damages arising out of the events of 10 October 2017 should be limited in terms of the provisions of s 261(1)(b) of the Merchant Shipping Act 57 of 1951 (the MSA). On the same day they launched the present proceedings seeking the joinder of the Ministry to the limitation action. The application was resisted by the Ministry on the grounds that, as the owner of a foreign naval vessel, the right to limit was excluded as against it by the provisions of s 3(6) of the MSA. That point was upheld by Mngadi J in the KwaZulu-Natal Division of the High Court, Pietermaritzburg, sitting in the exercise of its admiralty jurisdiction. The present appeal is with his leave.

[3] In terms of the provisions of SCA rule 8(8) the parties have sensibly agreed on the following statement on the issue in this appeal:

'The parties agree that the appeal turns on whether the owners and demise charterers of a merchant ship may, in circumstances where a merchant ship causes damage to a ship belonging to a defence force as contemplated in s 3(6) of the Merchant Shipping Act, 1951 . . . seek a limitation of liability in terms of s 261 of the Act in respect of the claim of that defence force.'

That admirably encapsulates the issue in this case. It is common cause that, if the answer favours the appellants, the High Court should have ordered the joinder of the Ministry. If it is against them, then the High Court judgment was correct. [1] While it is expressed in these succinct terms, it is 'a question of very great difficulty', as Viscount Simonds LC said in Nisbet Shipping Co Ltd v Reginam, [2] a case to which I will revert.

Tonnage limitation

[4] The right of shipowners and certain other parties to limit their liability for damages arising from the operation of the vessel is an ancient one. Legislation providing for shipowners to limit their liability to the

Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring)

value of the vessel is to be found in statutes dating from the 1600s in various parts of Europe, particularly the Netherlands. [3] It was introduced in England in 1733 by legislation enacted in response to the decision in Boucher v Lawson, [4] in which a cargo of gold bullion was entrusted to the master of a vessel, who proved unable to resist temptation and absconded with it. The owners of the vessel were held liable to the full extent of the value of the gold, which vastly exceeded the value of the vessel. Parliament intervened by passing the Responsibility of Shipowners Act, [5] limiting the liability of shipowners to the value of the ship, its equipment and any freight due for the voyage. Similar legislation was introduced in the United States of America in 1851. Three international conventions on limitation of liability by shipowners were concluded in the last century, although complete uniformity has not been achieved. [6] It has been described as 'a time honoured and internationally endorsed practice' which is now embodied in our domestic legislation. [7]

[5] For our purposes it is sufficient to note that until the passage of the MSA, South Africa did not have domestic legislation dealing with limitation. The English Merchant Shipping Act, 1894, remained of application in South Africa [8] and made provision for limitation of liability calculated on the gross registered tonnage (GRT) of the vessel. [9] This changed with the passage of the MSA in 1951. Section 261 of the MSA is headed 'When owner not liable for whole damage' and s 261(1)(b), which is the provision relied upon by the appellants, reads:

Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring)

'The owner of a ship, whether registered in the Republic or not, shall not, if . . . any loss or damage to any property or rights of any kind, whether movable or immovable, is caused without his actual fault or privity —

. . .

(b)

if no claim for damages in respect of loss of life or personal injury arises be liable for damages in respect of loss of or damage to property or rights to aggregate amount exceeding 66,67 special drawing rights for each ton of the ship's tonnage; . . . .'

[6] The basis for the Ministry's contention that the appellants may not invoke this provision in respect of its claim is to be found in s 3 of the MSA. Section 3(3) provides that the Act binds the state, subject to the entitlement of the Minister of Transport to exempt vessels owned by the Government of South Africa or Transnet from a range of provisions dealing with crew and the recovery of wages. Section 3(6), on which the Ministry relied, reads:

'The provisions of this Act shall not apply to ships belonging to the defence forces of the Republic or of any other country.'

The Ministry contended that, as the Floreal was part of the French navy and therefore part of the French defence force, the provisions of s 261 did not apply in relation to its claim against the appellants.

[7] The appellants' contention was that s 261(1)(b) conferred an internationally recognised right upon them as the owners [10] of the MSC Susanna to limit their liability and that they were invoking limitation against the Ministry, as the party making a claim against them, and not against the Floreal. They submitted that the right to limit is conferred in relation to claims for loss of life or personal injury, or any loss of or damage to any property of any kind, whether movable or immovable. The effect of the Ministry's contention is to introduce an unwarranted qualification to the broad and unqualified words 'any property of any kind' by adding 'save a naval vessel owned by the defence force of any nation'.

Discussion

[8] The issue is one of the proper interpretation of ss 261(1)(b) and 3(6) of the MSA. It is, so far as the argument and the authorities to which we have been referred go, entirely novel. As always, one starts with the words of s 261(1)(b). [11] Its terms are clear and comprehensive. The right to limit is given to the owner of a vessel, an expression given an extended meaning in s 263(2), in respect of all loss or damage to any property or rights of any kind, whether movable or immovable. That language

Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring)

encompasses all types of property, without qualification. It is clearly wide enough to include the loss or damage embodied in the claim by the Ministry. Counsel rightly conceded that if this section and the others that are contained in part IV of ch 5 of the MSA were contained in a separate statute without s 3(6), the right to limit would be available on this language in respect of the Ministry's claim. That means that the focus must necessarily fall on the effect of s 3(6).

[9] It is indisputable that s 3(6) excludes the bulk of the provisions of the MSA from application to both South African and foreign vessels forming part of their country's defence forces. These vessels can conveniently be referred to as naval vessels, although it is conceivable that there might be vessels forming part of branches of the defence force other than the navy. The MSA's provisions, dealing with the administration of the MSA (ch I); matters concerning the registration of vessels in the South African registry (ch II); certificates of competency and service of crew (ch III); engagement, discharge, repatriation, payment, discipline and general treatment of seafarers (ch IV); safety of ships and life at sea (ch V, parts I, II...