MV Vogerunner TMT Bulk Co Ltd v Bunkers Laden Aboard MV Vogerunner and Another (Billion Gain Enterprise Co (HK) Ltd Intervening)

• Jurisdiction: South Africa
• Citation: 2010 (3) SA 138 (WCC)

MV Vogerunner
TMT Bulk Co Ltd v Bunkers Laden Aboard MV Vogerunner and Another (Billion Gain Enterprise Co (HK) Ltd Intervening)
2010 (3) SA 138 (WCC)

2010 (3) SA p138

Citation	2010 (3) SA 138 (WCC)
Case No	AC 26/2009
Court	Western Cape High Court, Cape Town
Judge	Binns-Ward J
Heard	October 28, 2009
Judgment	October 28, 2009
Counsel	M Wragge SC (with R Howie) for the applicant.; A Stewart SC (with B Vaughn) for the respondents.

Flynote : Sleutelwoorde E

F Shipping — General maritime law — Charterparty — Time charterparty — Ownership of fuel bunkers — Interpretation of standard-form time charterparty — Standard time charterparty, properly constructed, providing for sale of bunkers to charterer — Deletion of standard clause and addition of rider G clause — Rider clauses read with remainder of charterparty clearly providing for sale of fuel bunkers to charterer — Delivery in form of constitutum possessorium having taken place — Fuel having become property of charterers for duration of charter — NYPE 93 Time Charterparty, clauses 2 and 3, and rider clauses 33(d) and 37.

H Shipping — General maritime law — Charterparty — Time charterparty — Construction — Fact that time charterparties having typical features should not detract from appreciation of fact that parties may regulate details of their contractual relationship according to their wishes — Erroneous to adopt a priori approach to construction of charterparties.

Headnote : Kopnota

I The principal issue before the court was whether all or part of the fuel bunkers on the MV Vogerunner belonged to the second respondent (Transfeld) or to the intervening party (BG). It appeared that the applicant (TMT) had obtained an order under s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 for the arrest of the bunkers aboard the Vogerunner. BG, which claimed that it was the owner of the bunkers, subsequently applied for an J order setting aside the arrest. Counsel were agreed that TMT, as the

2010 (3) SA p139

arresting party, bore the onus of justifying the arrest by proving that at the A time of the arrest the bunkers had belonged to Transfeld.

It appeared that Transfeld and BG had concluded a standard NYPE 93 time charterparty under which BG had subchartered the Vogerunner from Transfeld. The vessel was delivered to BG with a certain tonnage of fuel on board. Clause 2 of the charterparty provided that, while on hire, the charterers (BG) would 'provide and pay for all the fuel except as otherwise B agreed', which had been authoritatively construed to mean that the charterer was the owner of the fuel provided to and paid for by it during the currency of the charterparty. BG contended that its purchase of the bunkers was further evidenced by the provisions of the specially framed clause 33(d) of the rider clauses to the charterparty, which set out the bunker quantities and price-per-unit measure at the commencement and termination of the C contract period. Clause 37 of the riders then provided the charterers 'shall pay the first hire and value of bunkers on delivery within three banking days upon delivery. . .'. TMT argued that clause 33, read in the context of the standard NYPE charterparty, did not constitute a contract for the sale of the bunkers, particularly in view thereof that clause 3, which provided that 'the Charterers, at the port of delivery, and the Owners, at the port of redelivery, D shall take over and pay for all fuel remaining on board the vessel at the current price in the respective ports, the vessel to be delivered with not less than . . . tons and not more than . . . tons and to be re-delivered with not less than . . . tons and not more than . . . tons', had been deleted from the standard agreement. This wording had in the past been held to be evidence of a contract of sale from the owners to the charterers of the bunkers already E on board at the commencement of the hire period, and thus, according to TMT, their deletion meant that there had been no intention to sell the bunkers to BG. For this argument TMT relied on the judgment in Frosso Shipping Corporation v Richmond Maritime Corporation (Ideomar SA Intervening) 1985 (2) SA 476 (C), in which it was held that the deletion of the standard-form clause 3 pointed to a lack of intention to sell the fuel bunkers F to the charterer. Frosso was also cited by counsel for TMT as providing authority for the proposition that time charterparties did not give the charterer physical possession and control of the vessel, but only the facility to use the cargo space on agreed terms for the provision of a carrier service to be rendered by the shipowner, so that there was no delivery, and thus no sale, of the bunkers to the charterer. G

Held, that Frosso had to be read in the light of the subsequent judgment in Pritchard Properties (Pty) Ltd v Koulis 1986 (2) SA 1 (A), in which it was held that words deleted from an agreement did not form part of the agreement and therefore could not be had regard to in its construction. (Paragraph [20] at 145G - H.) H

Held, further, that clause 33(d), read with clause 37, of the rider clauses to the charterparty clearly contained all the elements essential to a contract of sale, and that this impression was further strengthened by the incidence of clause 33(d) in a contract that also contained the above-mentioned clause 2. The price to be paid by TMT as the disponent owner on redelivery was plainly directed at the acquisition by it of the bunkers purchased by and in the ownership of BG, as the charterer, in terms of clause 2, during the hire I period. (Paragraph [24] at 146G - 147A.)

Held, further, that the view of the significance of the deletion of standard clause 3 adopted in Frosso significantly influenced the judge's construction of the remainder of the charterparty as not providing for the sale of the fuel bunkers. This approach to the construction of the charterparty was, in view of the decision in Koulis, supra, clearly wrong, and counsel for TMT's J

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A reliance on Frosso for his argument that there had been no sale was therefore fatally undermined. (Paragraph [28] at 148F - G.)

Held, further, that the view endorsed in Frosso that in the context of time charterparties, bunkers had to be considered an integral part of the ship, was wrong. It ran counter to the notion that the word 'ship' did not in its ordinary meaning include fuel, and also to the common practice for the fuel B to be the property of the time charterer. The construction of clause 33(d) as providing for the sale of the bunkers to BG resulted in the recognition of the parties' intention to regulate the proprietorship of the bunkers in accordance with said common practice. (Paragraph [30] at 148H - 149B.)

Held, further, that the above did not mean the endorsement of an a priori approach to the construction of time charterparties — on the contrary, their C interpretation had to be approached with due appreciation for the ability of the parties to freely regulate the detail of their contractual relationship while nevertheless remaining true to the typical features of the time charterparty. (Paragraph [30] at 149B - 149D.)

Held, further, that the interpretation contended for by counsel for TMT also did not make commercial sense. It was unlikely that Transfeld and BG would D have entered into an arrangement for some form of joint or partial ownership of the bunkers, thereby unnecessarily exposing themselves to the risk of attachment of their property at the instance of the creditors of the other. (Paragraph [32] at 149G - 150A.)

Held, further, that there had, in addition to the contract of sale, also been delivery in the form of constitutum possessorium. (Paragraph [33] at 150C - D.)

E Held, accordingly, that BG was entitled to the order applied for, namely the setting-aside of the order authorising the arrest of the bunkers. (Paragraph [34] at 150F.)

Cases Considered

Annotations

Reported cases F

Southern Africa

Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A): referred to

Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A) ([1995] 2 All SA 635): G referred to

Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 447 (A): dictum at 454F - 455C applied

Ex parte Terminus Compania Naviera SA and Grinrod Marine (Pty) Ltd: In re The Areti L 1986 (2) SA 446 (C): referred to

Frosso Shipping Corporation v Richmond Maritime Corporation (Ideomar SA Intervening) H 1985 (2) SA 476 (C): criticised and not followed

KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA) ([2009] 2 All SA 523): dictum in para [39] applied

Lendalease Finance (Pty) Ltd v Corporacion de Mercadeo Agricola and Others 1976 (4) SA 464 (A): dictum at 489H - 490A applied

Mankowitz v Loewenthal 1982 (3) SA 758 (A): dictum at 766B - G applied

Marcard Stein & Co v Port Marine Contractors (Pty) Ltd and Others 1995 (3) SA 663 (A): dicta at 667D and 671H - J applied I

MV Heavy Metal: Belfry Marine Ltd v Palm Base Maritime SDN BHD 1999 (3) SA 1083 (SCA): dictum in para [65] applied

Pritchard Properties (Pty) Ltd v Koulis 1986 (2) SA 1 (A): applied

Shoreline Universal Ltd BVI v America's Bulk Transport Ltd and Others [2007] 3 All SA 183 (D): J referred to

2010 (3) SA p141

The MV Prosperous: Cobam NV v Aegean Petroleum (UK) Ltd and Another A 1996 (2) SA 155 (A): referred to

Ultisol Transport Contractors Ltd v Bouygues Offshore and Another 1996 (1) SA 487 (C): dictum at 492H - 493H applied

Universal Group Ltd t/a Island View Shipping Co v The Fund Created by the Sale of the MV Maharani, Ex MV Claire A Tsavliris, and Another 1990 (2) SA 480 (N): applied B

Yorigami Maritime Construction Co Ltd v Nissho-Iwai Co Ltd 1977 (4) SA 682 (C): dictum at 692D - E...