MV Snow Delta Serva Ship Ltd v Discount Tonnage Ltd

• Jurisdiction: South Africa
• Judge: Hefer JA, F H Grosskopf JA, Harms JA, Olivier JA, Melunsky AJA
• Judgment Date: 31 August 2000
• Docket Number: 263/98
• Hearing Date: 18 August 2000
• Counsel: J J Gauntlett SC (with him R W F MacWilliam) for the appellant. H J Benade for the respondent (the main heads of argument were drawn by D J Shaw QC and M Wragge).
• Court: Supreme Court of Appeal

Harms JA:

[1] The general rule is that where the plaintiff and the defendant are both peregrini, a recognised ratio jurisdictionis as well as arrest of the defendant or attachment of his property are essential to found jurisdiction in a High Court C (Siemens Ltd v Offshore Marine Engineering Ltd 1993 (3) SA 913 (A) especially at 928F - G). The position is different where a High Court exercises admiralty jurisdiction in terms of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act). According to s 2(1), admiralty jurisdiction exists in relation to a maritime claim irrespective of the place where the claim arose, ie irrespective of the existence of some ratio jurisdictionis. D One implication of s 3(2)(b) read with s 4(4)(a) is that an action in personam may be instituted by a peregrine plaintiff against a peregrine defendant 'whose property within the Court's area of jurisdiction' has been attached by the plaintiff to found or to confirm jurisdiction (The Shipping Corporation of India Ltd v Evdomon Corporation and Another 1994 (1) SA 550 (A) at 562C - H). This appeal is concerned E essentially with the question whether the rights of a charterer (the hirer) of a ship in terms of a time charterparty can be said to be 'property' which is located wherever the ship may be from time to time. A time charterparty does not entitle the charterer to the possession and control of the ship; in other words, the charterer has F no real rights in relation to the ship but only contractual rights against the owner.

[2] The facts of this case have been reported and do not require much by way of elaboration. The present respondent (DTL), a peregrinus from Jersey, believes that it has a maritime claim for damages, mainly because of a breach of contract, against the G present appellant (SSL), also a peregrinus but from the Isle of Man. The cause of action has no connection with this country. Litigation began with an ex parte application before Lategan J in the Cape High Court in which DTL obtained an order authorising the Sheriff of Cape Town to attach

'all of [SSL's] possessory right, title and interest in the MV Snow Delta (the vessel) currently lying alongside at the H port of Cape Town, including any possessory right which may arise from [SSL's] possession and control of the vessel in terms of a demise charter-party concluded between [SSL] and the vessel's owners'

to found jurisdiction for the alleged claim. At the same time a rule nisi was issued calling upon all interested I parties to show cause why the attachment should not be confirmed. It will be immediately apparent to the reader that the order related to the attachment of real rights flowing from a demise charterparty (the charterer under a demise charterparty being regarded as the owner of the ship during the term of the charter) and not from contractual rights flowing from a time charterparty. The J

Harms JA

reason for this was that at the time of the launch of the application DTL believed that SSL had A possession of the vessel in terms of a demise charterparty. In this regard DTL erred.

[3] The fact of the matter was that SSL had chartered the vessel in terms of a time charterparty entered into on the Isle of Man from the disponent owner (Blue Star Line, a concern in the United Kingdom) and, further, had entered into a subcharter by time chartering B (leasing) the vessel to yet another Manx company, Universal Reefers Ltd. In spite of having been made aware of these facts, DTL persisted in its application, alleging that SSL still had 'a right in the vessel arising from the time charter' which was susceptible to attachment. It did not, however, persevere with an application for the amendment of C the interim attachment order. In the event, on the return day, Foxcroft J was not prepared to confirm the rule nisi and discharged it (The MV Snow Delta: Discount Tonnage Ltd v Serva Ship Ltd 1997 (2) SA 719 (C)). His reason essentially was that the contractual obligation of the disponent owner was not 'property' within the area of jurisdiction of the Cape High Court. D

[4] Having been granted leave to appeal to the Full Court, DTL contended that the ship had to remain under attachment pending the finalisation of the appeal and the Sheriff refused to release the ship. This led to an urgent application by SSL for a declaratory order, declaring that the ship was no longer under attachment. This E application before Selikowitz J was successful (The MV Snow Delta: Discount Tonnage Ltd v Serva Ship Ltd 1996 (4) SA 1234 (C)).

[5] On appeal the Full Court overruled the judgment of Foxcroft J and confirmed the rule nisi in other terms (MV Snow Delta: Discount Tonnage Ltd v Serva Ship Ltd 1998 (3) F SA 636 (C), per Thring J, King DJP and Viljoen AJ concurring). What was attached was

'all of [SSL's] right to and interest in the use and employment of the MV Snow Delta . . . which [SSL] might have by virtue of a time charterparty concluded between [SSL] and the said vessel's owner . . .' G

(at 655G - H). The instant appeal is, with special leave, against this order.

[6] It is convenient at the outset to say something about the judgment of Selikowitz J. The ratio of the decision was based on SAB Lines (Pty) Ltd v Cape Tex Engineering Works (Pty)...