The Nantai Princess Nantai Line Co Ltd and Another v Cargo Laden on the MV Nantai Princess and Other Vessels and Others

• Jurisdiction: South Africa
• Judge: Levinsohn J
• Judgment Date: 19 June 1995
• Citation: 1997 (2) SA 580 (D)
• Hearing Date: 02 March 1995
• Docket Number: A12/94
• Counsel: D J Shaw (with him GO Van Niekerk) for the applicants V Soni for the second and fourth respondents C E Puckrin (with him JP Vorster) for the third respondent

Levinsohn J:

On 20 January 1994 the applicants instituted an action in rem against the cargo on board the vessel MV Nantai Princess and other vessels. The action was a maritime claim within the meaning of s 1(1)(i), (ee) and (ff) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (as amended) ('the Act'). In the said action D the first applicant claimed payment of the amounts of R142 889,60 and R2 739 756 respectively. The second applicant's claim was for R694 192,50. As far as the first applicant was concerned, it was alleged that it was owed amounts in respect of ocean freight charges and in respect of transfer and storage (also known as overstay), release E and terminal handling charges said to be due in terms of the contract of carriage.

As far as the second applicant is concerned, its cause of action was said to be a claim for indemnity in respect of storage charges incurred and disbursed on the first applicant's behalf to the South African Container Depot ('SACD'). Simultaneously F with the institution of the said action the defendant cargo was arrested by the Sheriff of this Court, the goods in question being identified by container numbers and bills of lading.

Following the arrest the applicants applied for an order authorising the sale of the arrested goods in terms of s 9 of the Act. The second and third respondents were joined in this application. The applicants, after setting out details of their respective G claims, disclosed that the third respondent had served notices claiming a lien over the said containers. The serving of these notices resulted in a situation where the containers could not be cleared by customs and remained in storage at the SACD.

The application for the sale of the goods was opposed. One Barend Gert Steyn de H Wet, in his capacity as the provisional liquidator of the second respondent ('the company'), deposed to an affidavit resisting the relief sought on certain grounds which I shall deal with presently. The third respondent, represented by his legal adviser, one Booysen, likewise deposed to an affidavit in opposition to the relief sought. The third respondent asserted that the arrest of the cargo in question was void; in the alternative, I the third respondent alleged that if the Court was disposed to order the sale of the goods, such sale should be subject to a lien in the favour of the third respondent in terms of s 114 of the Customs and Excise Act 91 of 1964. It was also alleged that certain of the containers had already been seized in terms of s 88 of the Customs and Excise Act.

This application came before the Court on 22 April 1994. On that J

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date it was settled and an order by consent was made by Didcott J. The Court A directed that the contents of the containers would be sold by the provisional liquidators, who would act as the agents of the Court for that purpose. The order contained detailed directions in regard to the manner in which price realised should be dealt with. B

Importantly, the order recorded that it was made without prejudice or waiver of any of the rights the parties to the litigation may have. In para 6 the parties reserved the right to reinstate the application on the same papers duly supplemented with a view to determine any matter raised. Furthermore, all questions of costs were reserved. C

Subsequent to the order and pursuant thereto the cargo was sold. The applicants now seek the relief which was set forth from pp 232–7 of the application papers before me. The applicants, inter alia, claim the following principal relief:

'1.

That the arrest by the applicants of the first respondent and the cargo contained in containers numbered NTLU2241506 and NTLU2222738 be D and is hereby confirmed.

2.

That the seizures and detentions of 115 containers containing the first respondent in terms of ss 88 and 114(2) respectively of the Customs and Excise Act 91 of 1964 be and are hereby declared to be void. E

3.

That the fund constituted pursuant to para 3(i) of the order of this Court made on 22 April 1994 ("the fund") be and is hereby declared to be a fund constituted in terms of s 9(2) of the Admiralty Jurisdiction Regulation Act 105 of 1983 as amended ("the Act"). F

4.

That the fourth respondents be and are hereby joined as parties to this application pursuant to s 5(1) of the Act.

5.

That the fourth respondents be and are hereby ordered to pay into the fund the sum of R793 000 together with interest accrued at 11,5% per annum calculated at a daily rate of R249,85 from 26 July 1994 to 30 September G 1994 and thereafter at a rate of R263,34 to date of payment, such payment to be made within five days of the date of this order.'

There is also provision in the order for the appointment of a referee. I should also mention that the liquidators of the second respondent are now formally joined as the fourth respondents. H

Once again the application is opposed by the third and fourth respondents and it is this part of the litigation which is now before me.

It is common cause that the cargo contained in 93 containers of the total of 115 containers was owned by the company. The balance of the containers of the cargo I contained in 22 containers was owned by an associate company called Pampoloni Clothing (Pty) Ltd. The liquidators of the company sold the businesses and assets, including the cargo of the company, Pampoloni Clothing and another company called Baywood Design (Pty) Ltd to Gooseberry Sales (Pty) Ltd for R24 000 000. By agreement the pro rata share of the proceeds of the sale apportioned to the cargo sold was R7 000 000. After deducting commissions paid to the J

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auctioneers, Aucor, the liquidators paid an amount of R5 385 846,15 to the Registrar A in accordance with the terms of the aforesaid consent order dated 23 April 1994.

A number of factual and legal issues fall to be decided in the present application. I record at the outset that Mr Soni, who appeared on behalf of the fourth respondents, B during argument abandoned the points in limine which had been foreshadowed in the fourth respondents' opposing affidavit. Also, all parties accept that the factual dispute in regard to the payment of the commission cannot be resolved on the papers. I need say no more about these matters. It seems to me that the principal issue which falls to C be decided in this application is the validity of the arrest of the cargo in question. Both the third and fourth respondents challenge this. It is accepted that if the arrest was invalid, the subsequent sale of the cargo could not have resulted in the creation of the fund envisaged by the Act, nor could that fund be disposed of in terms of the Act. The D respondents, relying on the provisions of s 348 of the Companies Act 61 of 1973 ('the Companies Act'), contend that when the arrest of the cargo took place in January 1994 the winding-up of the second respondent had already commenced and a concursus creditorum had been established. The section provides:

'A winding-up of a company by the Court shall be deemed to commence at the time of the presentation to the Court of the application for the winding-up.' E

The chronology and sequence of events in the winding-up proceedings were common cause between counsel. These are:

(1)

the winding-up application was filed with the Registrar of the Witwatersrand Local Division on 16 June 1993;

(2)

it came before the Court on 3 August 1993 and was then postponed until 7 September 1993; F

(3)

on 7 September it was postponed until 12 October 1993;

(4)

on 12 October 1993 the application was adjourned sine die; and

(5)

on 8 March 1994 it was re-enrolled for hearing and, in accordance with the practice of the Witwatersrand Local Division, a final winding-up order was made. G

The respondents contend that the crucial date is 16 June 1993. That is the date of filing, consequently the date when the application for the winding-up was presented to the Court.

In Rennie NO v South African Sea Products Ltd 1986 (2) SA 138 (C) at 141 and H Venter NO v Farley 1991 (1) SA 316 (C) at 320, two cases decided under the Companies Act, it was held that 'presentation to the Court means when the application is filed...