The Polaris Southern African Shipyards (Pty) Ltd v MFV Polaris and Others

• Jurisdiction: South Africa
• Citation: 2018 (5) SA 263 (WCC)

The Polaris
Southern African Shipyards (Pty) Ltd v MFV Polaris and Others
2018 (5) SA 263 (WCC)

2018 (5) SA p263

Citation	2018 (5) SA 263 (WCC)
Case No	AC 42/2017
Court	Western Cape Division, Cape Town
Judge	Boqwana J
Heard	April 18, 2018
Judgment	April 18, 2018
Counsel	G Brown for the applicant.; T Mayosi for the respondents.

Flynote : Sleutelwoorde

Shipping — Admiralty law — Maritime claim — Enforcement — Arrest — Sale of arrested property — Property ringfenced from other claims — Court may C order sale of maritime property where owner subsequently placed in business rescue — Admiralty Jurisdiction Regulation Act 105 of 1983, s 9 and s 10; Companies Act 71 of 2008, s 133(1).

Company — Business rescue — Moratorium on legal proceedings in relation to property belonging to company — Not applying to property already under D maritime arrest — Admiralty court may order sale of arrested property — Admiralty Jurisdiction Regulation Act 105 of 1983, s 10; Companies Act 71 of 2008, s 133(1).

Headnote : Kopnota

The applicant applied to sell property (a ship) under maritime arrest. The issue was whether such a sale could be ordered when the owner had been placed E in business rescue. The respondents argued that the moratorium on legal proceedings against companies in business rescue contained in s 133 of the Companies Act 71 of 2008 [*] prevented the court from ordering the sale.

The court held that s 10 of the Admiralty Jurisdiction Regulation Act 105 of 1983 [†] excluded property already under maritime arrest from the moratorium in s 133, and granted the application for the sale of the ship (see [62], F [67], [70] – [71], [79], [81]).

Cases cited

Southern Africa

Bouygues Offshore and Another v Owners of the MT 'Tigr' and Others [1996] 2 All SA 176 (C): referred to G

Brooks v Taxing Master and Another 1960 (3) SA 225 (N): compared

Cloete Murray and Another NNO v FirstRand Bank Ltd t/a Wesbank 2015 (3) SA 438 (SCA) ([2015] ZASCA 39): dictum in para [14] applied

Commissioner, South African Revenue Service v Van der Merwe NO and Others 2017 (3) SA 34 (SCA) ([2017] 2 All SA 335): dictum in para [22] applied H

Dias Compania Naviera SA v MV Al Kaziemah and Others KZD A77/98: referred to

2018 (5) SA p264

Ex A parte Minister of Justice: In re R v Jekela 1938 AD 370: dictum at 377 applied

Ex parte Nell and Others NNO 2014 (6) SA 545 (GP): dictum in para [53] applied

Gendor Holdings Ltd v City Fishing Holdings (Pty) Ltd; Breemond Trust (Intervening Party) [2007] 3 All SA 400 (C): dictum in para [28] applied

Gormley B v West City Precinct Properties (Pty) Ltd and Another [2012] ZAWCHC 33: referred to

Merchant West Working Capital Solutions (Pty) Ltd v Advanced Technologies and Engineering Company (Pty) Ltd and Another [2013] ZAGPJHC 109: referred to

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) C ([2012] 2 All SA 262; [2012] ZASCA 13): dictum in para [18] applied

Nedbank Ltd v Bestvest 153 (Pty) Ltd; Essa and Another v Bestvest 153 (Pty) Ltd and Others 2012 (5) SA 497 (WCC): referred to

Rennie NO v South African Sea Products Ltd 1986 (2) SA 138 (C): compared and applied

Southern D Palace Investments 265 (Pty) Ltd v Midnight Storm Investments 386 Ltd 2012 (2) SA 423 (WCC): referred to

The Nantai Princess: Nantai Line Co Ltd and Another v Cargo Laden on the Nantai Princess and Other Vessels and Others 1997 (2) SA 580 (D): dictum at 590J – 591B applied.

Australia

The E Ship 'Sam Hawk' v Reiter Petroleum Inc (2016) 246 FCR 337: referred to.

Canada

Holt Cargo Systems Inc v ABC Containerline NV (Trustees of) [2001] 3 SCR 907 (FCA): compared.

United States F

Re Atlas Shipping A/S 404 BR 726 (2009): referred to.

Legislation cited

Statutes

The Companies Act 71 of 2008, s 133(1): see Juta's Statutes of South Africa 2016/17 vol 2 at 1-385.

Regulations

The Admiralty Jurisdiction Regulation Act 105 of 1983, s 10: see Juta's Statutes of South Africa 2016/17 vol 1 at 2-93 G

Case Information

G Brown for the applicant.

T Mayosi for the respondents.

The H return day of a rule nisi. The rule was made final (see [90]).

Judgment

Boqwana J:

Introduction I

[1] This matter raises an interesting issue which is yet to receive treatment before our courts, that is, the interface between s 10 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (AJRA) and s 133 of the Companies Act 71 of 2008 (the 2008 Companies Act).

[2] In this application the applicant seeks leave to sell a motor fishing J vessel (known as MFV Polaris, alternatively the vessel), her equipment,

2018 (5) SA p265

Boqwana J

furniture, bunkers and her cargo in terms of s 9 of AJRA, and for the A appointment of a Referee.

[3] The application was launched on 18 January 2018 and served on the respondents the same day. It was set down for 30 January 2018 on an unopposed basis. A rule nisi was granted by Davis AJ with a return date being 15 February 2018. The matter became opposed on the return day B and an order was taken by agreement between the parties before Henney J, in terms of which the rule nisi was extended to 15 March 2018 and the respondents allowed to file their answering papers by close of business on 1 March 2018, with the applicant to file its replying affidavit by 8 March 2018. The matter was set down for 15 March 2018. C The respondents, however, failed to file their opposing papers as provided for in the order of 15 February 2018.

[4] On the date of the hearing of the matter before me, ie 15 March 2018, a copy of an answering affidavit was handed up in court by Mr Mayosi, who appeared on behalf of the respondents. Mr Brown, who D appeared for the applicant, advised the court that the applicant was opposed to the admission of the answering affidavit on the basis that it was clearly late and that the matter was urgent. The applicant, as well as the court, had not had any opportunity to consider this late affidavit, as well as the accompanying condonation application. Mr Brown pressed that his instructions were that the answering affidavit should be disregarded E and the matter be argued on the papers that were already before the court, namely, the applicant's papers. The respondents had raised a point in limine which Mr Brown submitted the applicant was ready to argue.

[5] Having considered the matter, I was of the view that it would be F appropriate to postpone it to the following day to afford the applicant an opportunity to file its replying papers, which it agreed to do. That postponement would also afford the court an opportunity to consider the condonation application, the intended answering affidavit, as well as the applicant's reply thereto.

The applicant's case G

[6] The applicant conducts business as a shipyard and provides ship repair services in respect of vessels such as the MFV Polaris. It has its principal place of business in Durban, KwaZulu-Natal. The applicant's claim is premised on the fact that in February 2016, MFV Polaris was delivered by the third respondent to its shipyard in Durban in order for H repairs to be effected to it.

[7] The MFV Polaris is a fishing vessel of 37,5 metres with a gross tonnage of 412. It has onboard facilities which are used for the processing of fish livers (usually shark livers) into fish oil. It apparently has approximately I 10 to 12 metric tones of fish oil (the cargo) on board. It is alleged to be under the flag of the Republic of Cameroon. The vessel is currently under arrest, at the instance of the applicant and a number of other creditors, at the Port of Cape Town which is within the jurisdiction of this court. The third respondent carries on business as ships agents at Table View in Cape Town and is the registered owner of the MFV Polaris. J

2018 (5) SA p266

Boqwana J

[8] A According to the applicant, it duly effected the requested repair services and, between February 2016 and March 2016, submitted invoices to the third respondent in respect of such services. In or about April 2017 the third respondent communicated its inability to make payment to the applicant. As a result the applicant refused to release the MFV Polaris from its shipyard.

[9] B During April to June 2017 various meetings took place between the representatives of the applicant and the third respondent, and a number of emails were exchanged, the aim of which was to attempt to reach an arrangement in terms of which the vessel would be released from the applicant's shipyard.

[10] C Representatives of the third respondent provided an undertaking to the applicant that should the applicant release the vessel from the shipyard, the third respondent would utilise it to procure a cargo of fish oil and that the applicant would be paid the outstanding amount from the proceeds of that cargo.

[11] D Pursuant to that undertaking and on 1 June 2017 the applicant and the third respondent entered into an acknowledgement of debt in an amount of R2 142 151,15. The acknowledgement of debt included payment obligation by which the third respondent undertook to discharge E its indebtedness to the applicant. In terms of its acknowledgement of debt the third respondent would pay the applicant 50% of the outstanding debt, namely the sum of R1 071 075,57 within 70 days calculated from the commencement date of the acknowledgement of debt, being 5 June 2017. Fifty percent of the outstanding capital was accordingly due by no later than 16 August 2017. In the event of the F payment not being made as undertaken, the full amount of the outstanding debt would immediately become due and payable; interest of 9% per annum would accrue and would be calculated on the full outstanding capital amount calculated from 5 June 2017 until date of payment and, in the event of the applicant having to institute legal...