The Merak S Sea Melody Enterprises SA v Bulktrans (Europe) Corporation

• Jurisdiction: South Africa
• Judge: Hefer Ap, Nienaber JA, Farlam JA, Mpati JA and Lewis AJA
• Judgment Date: 27 March 2002
• Citation: 2002 (4) SA 273 (SCA)
• Docket Number: 178/2000
• Hearing Date: 15 February 2002
• Counsel: D J Shaw QC for the appellant. M J D Wallis SC as amicus curiae.
• Court: Supreme Court of Appeal

Farlam JA: A

[1] This is an appeal from a judgment of Niles-Dunér J, sitting in the Durban and Coast Local Division of the High Court, who dismissed the appellant's application for a reduction in the amount of a bank guarantee given by the appellant to secure the release of the vessel Merak S from arrest and for an order calling upon the respondent, at whose instance the vessel had been arrested, to B furnish the appellant with security for the claims it proposed bringing against the respondent. The judgment of the Court a quo has been reported: see [2000] 1 Lloyd's Rep 619 [SA Ct].

[2] The appellant's vessel had been arrested in terms of an order granted under s 5(3) of the Admiralty Jurisdiction Regulation C Act 105 of 1983 in order to provide security for claims which the respondent, which had chartered the vessel from the appellant under a time charter, intended pursuing against the appellant in arbitration proceedings in London. The security which the appellant sought from the D respondent related to the claims which the appellant averred it had against the respondent arising from the same charter.

[3] After Niles-Dunér J had granted the appellant leave to appeal to this Court against her judgment dismissing its application it appeared that the respondent was not proceeding with its claims in E the arbitration. Subsequently the appellant obtained an order for the return of the guarantee which had been given on its behalf. It is thus clear that an order allowing the appeal would have no practical effect. The appellant contended, however, that this Court should exercise the discretion it has in terms of s 21A of the Supreme Court Act 59 of 1959 to hear and dispose of the appeal. The Maritime Law Association of F South Africa arranged for Mr Wallis SC, who had appeared for the respondent in the Court a quo, to be available to present argument in support of the judgment of Niles-Dunér J as an amicus curiae, if that course were to be approved by this Court. Mr Wallis was thereafter appointed as amicus curiae. We are grateful to him for appearing and arguing in support of the judgment given in the Court below. G

[4] In view of the importance of the questions of law which arise in this matter, the frequency with which they arise and the fact that at the time of the decision in the Court a quo and of the granting of leave to appeal those questions were, as Mr Shaw for the appellant put it, 'live issues', I am H satisfied that this is an appropriate matter for the exercise of this Court's discretion to allow the appeal to proceed: cf Coin Security Group (Pty) Ltd v SA National Union for Security Officers and Others 2001 (2) SA 872 (SCA) at 875 (para [8]) and Natal Rugby Union v Gould 1999 (1) SA 432 (SCA). I

[5] In view of the fact that the respondent is not proceeding with its claims and the appellant has obtained an order for the return of the guarantee given on its behalf it is unnecessary for the facts giving rise to the application to be summarised. Indeed the appellant asked this Court, if it was minded to allow the appeal, to grant declaratory relief instead of J

Farlam JA

the orders asked for in the Court below. It is sufficient to state that if the appellant's contentions A are correct it would have been entitled to the orders sought.

[6] It will be convenient to set out the statutory provisions which have a bearing on the issues to be considered.

Section 3(10)(a) of the 1983 Act before it was amended by s 1 of Act 87 of 1992 read as follows: B

'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 from arrest or attachment.'

Since the amendment it has read as follows: C

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

Section 11(9) of the 1983 Act read as follows:

'Notwithstanding the provisions of this section any undertaking or security given with respect to a particular claim shall be applied in the first instance in satisfaction of that claim.' E

The subsection, now renumbered 11(12), has read, since it was amended by s 9 of the 1992 Act, as follows:

'Notwithstanding the provisions of this section, any undertaking or security given with respect to a particular claim shall be applied in satisfaction of that claim only.'

Section 1(2)(a)(iv) of the Act, as amended by F s 1(e) of...