MV Snow Delta: Discount Tonnage Ltd v Serva Ship Ltd

• Jurisdiction: South Africa
• Judge: King DJP, Thring J, Viljoen AJ
• Judgment Date: 11 March 1998
• Citation: 1998 (3) SA 636 (C)
• Docket Number: A316/97
• Hearing Date: 02 February 1998
• Counsel: DJ Shaw (with him M Wragge) for the appellant JJ Gauntlett (with him RWF MacWilliam) for the respondent
• Court: Cape Provincial Division

Thring J:

The appellant, a peregrinus of this Court carrying on business, inter alia, in the field of the marine G carriage of goods at St Helier, Jersey, wishes to sue the respondent in this Court for damages for breach of contract. The respondent is also a peregrinus, being a company incorporated in accordance with the company laws of the Isle of Man and carrying on business there. The appellant's claim against the respondent is a maritime H claim as defined in s 1 of the Admiralty Jurisdiction Regulation Act 105 of 1983, to which I shall refer as 'the Act'. In terms of s 3(2) of the Act:

'An action in personam may only be instituted against a person -

(a)

. . .

(b)

whose property within the Court's area of jurisdiction has been attached by the plaintiff or the applicant, to found or confirm jurisdiction; . . . .' I

Accordingly, on 2 September 1996 the appellant applied ex parte in this Court for an order, which was granted by Lategan J, and the relevant parts of which read as follows:

'2. The sheriff for the district of Cape Town be and is hereby authorised and directed to attach the following property belonging to the respondent: J

Thring J

2.1 all the respondent's possessory right, title and interest in the MV Snow Delta (''the vessel'') currently lying alongside at A the Port of Cape Town, including any possessory right which might arise from the respondent's possession and control of the vessel in terms of a demise charterparty concluded between the respondent and the vessel's owners;

. . .

the attachment being to found the jurisdiction of this honourable Court in an action in personam to be instituted by the B applicant against the respondent in which action the applicant (as plaintiff) will claim against respondent (as defendant):

(a)

payment of the sum of US $239 000 000 being damages arising from the respondent's failure to fulfill its obligations in terms of an agreement entered into between the applicant and the respondent on 18 January C 1995;

(b)

interest on the aforesaid amount of US $239 000 000 a tempore morae;

(c)

further and/or alternative relief;

(d)

costs of suit.

. . .

4. A rule nisi do issue calling upon all persons interested to show cause, if any, for [sic] this honourable Court on Monday, D 16 September 1996 why the said attachment should not be confirmed.'

The MV Snow Delta, to which I shall refer as 'the vessel', was then off Cape Town, within this Court's jurisdiction, awaiting the respondent's instructions regarding the loading of a northbound cargo of fruit. The vessel was duly attached pursuant to the order. E

On 16 September 1996, the return day of the rule nisi, however, when the matter came before Foxcroft J, he discharged the rule with costs and the vessel sailed shortly afterwards, despite attempts by the appellant to prevent her from leaving, first by applying for and being granted leave to appeal to this Court against the order of F Foxcroft J and then by unsuccessfully applying for an interdict preventing the vessel from sailing. The judgment of Foxcroft J is reported as The MV Snow Delta: Discount Tonnage Ltd v Serva Ship Ltd 1997 (2) SA 719 (C), and a subsequent judgment of Selikowitz J in which he held that the vessel was no longer under any order of G attachment issued by this Court and was free to leave the jurisdiction of the Court forthwith is reported under the same name at 1996 (4) SA 1234 (C).

This is an appeal against the judgment of Foxcroft J.

When the appellant launched these proceedings it was under the impression that the vessel was under demise charter to the respondent and para 2 of the rule nisi was couched accordingly. Subsequently, however, it H transpired that this was incorrect: the respondent is, in fact, the charterer of the vessel in terms of a time charterparty concluded at Hornchurch on 25 August 1995 on the New York Produce Exchange ('NYPE 93') form for a period of five years. I shall refer to this document as 'the head charterparty'. The disponent owner of I the vessel appears to be the Blue Star Line Ltd 'of London', represented in concluding the head charterparty by its agents, Star Reefers. I shall refer to Blue Star Line Ltd as 'the owner'. On 13 September 1996, and before the matter came before the Court a quo on 16 September 1996, the appellant delivered an affidavit made by one of its directors, Mr M C Pickstone- J

Thring J

Taylor (the second deposed to by him), in which he placed the correct facts before the Court, attaching a copy A of the head charterparty to his affidavit. He said, inter alia:

'4. At the time of deposing to my founding affidavit I was under the bona fide impression that the MV Snow Delta (''the vessel'') was the subject of a demise charterparty entered into between the respondent and the vessel's owners, the Blue B Star Line of London. It was for this reason that I believed that the respondent would be the owner of the assets referred to in subparas 2.1, 2.2, 2.3 and 2.4 of the provisional order granted by his Lordship, Mr Justice Lategan on 2 September 1996.

. . .

11. As I have indicated above, when the provisional order of attachment was sought and granted the applicant believed C that the right, title and interest which the respondent had in the vessel was one arising from a demise charterparty of the vessel. This appears to be incorrect.'

It was nevertheless submitted by Mr Pickstone-Taylor that para 2.1 of the rule nisi was 'wide enough to encompass the respondent's right, title and interest as a time charterer'. D

Clause 18 of the head charterparty provides:

'18. Sublet

Unless otherwise agreed, the charterers shall have the liberty to sublet the vessel for all or any part of the time covered by this charterparty, but the charterers remain responsible for the fulfilment of this charterparty.' E

The respondent did, indeed, 'sublet the vessel': on 1 July 1996 it concluded a time charter on the same 'NYPE 93' form with Universal Reefers Ltd, to which I shall refer as 'the subcharterer', in terms of which it chartered the F vessel to the subcharterer until 30 September 1996 at a slightly higher rate of hire than that payable by the respondent to the owner under the head charterparty.

In discharging the rule nisi the learned Judge a quo, who dealt with the matter urgently (the vessel was due to sail at 6 pm on the same day), came to the conclusion that the respondent's rights under the head charterparty (and, G perhaps, also under the subcharterparty) were not amenable to attachment by this Court to found or confirm its jurisdiction because they were not situate within this Court's jurisdiction. After referring to several authorities, including Randfontein Estates Gold Mining Co Ltd v Custodian of Enemy Property 1923 AD 576 and Nahrungsmittel GmbH v Otto 1993 (1) SA 639 (A), the learned Judge said (at 723F--H and 724J--725D): H

'To my mind one cannot speak of an incorporeal right existing in any way other than at the same place where the person who exercises that right finds himself or herself. The right cannot exist independently.

I therefore agree, with respect, with the thinking in the Appellate Division that insofar as incorporeal rights are concerned one must identify the place where the person who is exercising the right is before saying where the right exists. Just I because the vessel is physically present in Cape Town in the territorial waters of this Court, does not, to my mind, mean that if anybody exercises a right in regard to that vessel the right is being exercised here. As far as I am concerned, the person who exercises the right does so in the place where that person is, not where the ship is.

. . . J

Thring J

To my mind the fallacy in the argument of applicant put in para 24, namely that ''it is submitted that the respondent's right A to the use and employment of the vessel, is situate where the vessel is from time to time'' consists in what I have already said. It consists in the belief that because one has the right to the use and enjoyment of the vessel, one exercises that right at the place where the vessel is.

It also seems to me to be plain common sense that the attachable right cannot simply be a notional right but a right which sounds in money. As I have pointed out, the right which Serva in fact exercises in this case which sounds in money B is the fact that it can subcharter the use to somebody else for a higher rate than it has to pay to the owner. That is the right which sounds in money and that, to my mind, is what is decisive of the question because that right to receive the higher rate is in no way connected to the vessel's mere presence in Cape Town.

For these reasons I am satisfied that applicant has not made out a proper case for the confirmation of the rule in any of C the respects in which the rule was granted. The rule must, in my view, be discharged with costs, such costs to include the costs of two counsel.'

It is against this conclusion that the appellant appeals.

However, before dealing with the merits of the appellant's attack against the judgment, it is necessary to consider D two contentions which, although not mentioned in the judgment in the Court a quo, have been advanced before us on behalf of the respondent in resisting this appeal.

The first of these is that this Court should not entertain this appeal because, the vessel having now left the jurisdiction of the Court, the question whether or not its attachment was correctly ordered by Lategan J on 2 E September 1996 has become of merely academic interest and only the question of costs remains in practical issue. Mr Gauntlett who, with Mr MacWilliam, appears for the respondent, relied in this regard inter alia on the decision in Lendalease Finance (Pty) Ltd v Corporacion de Mercadeo Agricola and...