Action in Personam:

Look at Summons – in the KZN high court exercising its admiralty

jurisdiction – ship is the defendant.

In the western cape – application – two parties as respondents, owner of

mv and demise charterers – this is an action in personam – against the
owner, not the ship.

Ex-parte – no notice given to respondents.

AJRA-

S1 – cause of action must be maritime claim;

S2(1) – jurisdiction to hear any maritime claim

S3 – action in rem or personam

S3(2) action in personam can only be instituted against person that is a

resident or carrying business at any place in the business, or whose
property is within the courts area of jurisdiction – can be attached to found
or confirm jurisdiction.

Consent or submission to jurisdiction of court – cannot attach in this

instance.

S3(3) – which court to commence proceedings in – cant institute action in

personam if courts area of jurisdiction is not adjacent to the territorial
waters of the republic, unless in the case of a claim as per s1 a, b, j,u of
AJRA, or claim arises out of an agreement concluded within courts area of
jurisdiction

Or claims per g and h, goods shipped under a BOL to or from a place

within the area of the jurisdiction of that court.

S4(4) – can proceed with attachment if claimant isn’t an incola. Are you
founding jurisdiction – no other basis for court to exercise jurisdiction or
you can

Attachment to confirm jurisdiction – confirm an existing jurisdiction to

strengthen court’s jurisdiction. The contract or breach occurred in SA
territory – one is confirming an existing jurisdiction.

S4(4) (b) provides that a court may make an order for the attachment of
property not within the area of jurisdiction of the court at the time of the
application or of the other, and such an order may be carried into effect
when the property comes into the jurisdiction of the court. Essentially,
one can make an order for the attachment of property not yet within
jurisdiction of the court, can execute when it comes into the jurisdiction.

The above is clearly a discretionary power. You are not entitled as of right
to go to court for an attachment order until you can show on your papers
that the property is within the courts area of jurisdiction. There are
exceptional circumstances if property is passing through SA for a certain
period of time and it would be extreme; One can still apply to attach
certain property, such as bunkers

Applicant for attachment must show:

 He has a prima facie case

 Defendant is a peregrinus
 On balance of probabilities the defendant owns property in the
courts jurisdiction capable of attachment.

Prima Facie case exists as a requirement for an application to attach in

terms of common law. There are number of cases dealing with this. Look
at Dimitris case – S5(3) application where the action doesn’t take place in
SA but in a foreign jurisdiction – in order to apply for a security arrest –
must show that you have a prima facie case.

The test is whether the applicant can tender evidence which if accepted
will establish a cause of action. The mere fact that evidence is
contradicted will not disentitle the applicant to relief, not even if the
probabilities are against the applicant. Look at 1989 (3) SA 820(A) It is inly
where it is quite clear that the applicant has no action, or cannot succeed,
that an attachment should be refused.

This means that in their FA, the applicant must set out the facts which
give rise to their cause of action. They must be able to put forward
evidence, in the form of affidavit evidence with supporting documents
attached thereto, which would make out a cause of action if it was
accepted at a trial. The court is not deciding if the evidence is true. It’s
taking evidence at face value to see if it would be sufficient to make out a
cause of action. Of course, in being an application, the respondents may
oppose and will then file answering affidavits or opposing affidavits.
Therein they will set out countervailing evidence, contradicting and
denying the assertions made by the applicant by putting up contrary
evidence to show that its not true. But because this is a preliminary
proceeding, the fact that the applicant’s evidence is contradicted does not
disentitle them to relief. They may still obtain relief in the form of an
attachment application even if the probabilities appear to favour the
respondent, the court will still grant the attachment application. Only will
the application be refused if it is evident that te applicant has no cause of
action. Look at Holzer Righte v Gooder? And Pascalla de lagag

MV PASQUALE DELLA GATTA –this case was an application for a security

arrest. Here the court discussed the requirement of a prima facie case. In
para 19-20 they summarize what that entails. Para 21 – 23 discuss the
fact that in S5(3) applications the court can take into consideration
allegations made in the respondents affidavits – they can take it into
account where it appears that the applicant is unable to contradict that
version. It must be weighed as part of the courts discretion to grant the
order. The court here was quite careful to distinguish a security arrest
from an attachment application. An attachment we discuss today is truly
preliminary – the court is not going into the merits of the matter because
there will be an admiralty action going to trial before our courts, and so
the court will not prejudge the probabilities in the application. The court
has slightly wider discretion in a 5(3) application because in a sense that
proceeding is final and security will be provided as an outcome of the
order. The part to focus on is para 24 – reiterates that the FA must contain
facts, what the court refers to as evidence, and if you ask court to draw
inferences from that evidence, there must be reasonable inferences
capable of being inferred on the basis of proven facts. They cannot be
tenuous or farfetched or purely speculation. Please look at whether in fact
the applicants were relying on the proven facts and inferences or whether
they simply made unfounded and speculative allegations.

The second requirement is that the defendant must be a peregrinus –

provided that the defendant does not reside in SA, they are a peregrinus.

The third requirement does pose a number of problems – in exam, it is

difficult for an applicant because the onus is much more stringent. Here
the applicant must be able to show on a balance of probabilities that the
property to be attached belongs to the peregrinus or that there is some
beneficial interest. This is a strong test – if a balance of probabilities is not
discharged, the court will not grant the application.

Lendalease Finance (Pty) Ltd v Corporation de Mercadeo Agricola 1976

(4) SA 464 (A) 489B-C:

What property was being attached and what was the difficulty in proving
ownership of that property?

In this matter, it involved an attempt to bring action against a foreign

corporation based in Argentina – in order to do so an attachment of
property was necessary. They were not trying to attach the ship but cargo
that the corporation had purchased and loaded onboard a ship which was
in SA port. This raised the question as whether as the buyer of that cargo
they were the owners thereof or was it owned by the seller?? The cause of
action had nothing to do with this ship or cargo, but had arisen in relation
to an earlier shipment were there was a breach of a charter obligation and
damages flowing from that breach of contract. But to pursue those
damages in an action in personam in SA against a foreigner they needed
to attach property belonging to that foreigner situated in the courts area
of jurisdiction – so they cast their eyes on a shipment of maize sitting
aboard a ship in Richards Bay. To determine ownership, cast your mind all
the way back to law of property and law of sale – this was an international
sale of contract on what we call FOB terms (Free on Board for Bulk Cargo)
– this deals with passing of risk but not ownership – this term is frequently
used for bulk cargo and it means that the buyer will arrange the charter of
a vessel to carry the cargo from a port of shipment at their own expense,
the seller delivers the cargo when they place it onboard the vessel and
risk passes at that point. On that basis the application was made that the
cargo was already loaded on board the ship, which had been chartered by
the respondent who was the buyer of the maize therefore the ship was in
effect holding the cargo on behalf of the buyer. As delivery had been
made, the maize must now belong to the buyer. This also relates to the
difference between cash and credit sales – when a sale is for cash one
must also show that there has been payment. And only if there has been
payment and delivery, has ownership passed to the buyer. In a credit sale
when date for payment is delayed, ownership can pass as soon as delivery
is made and even before payment. This was the argument of the
applicant. What the court focused on is the role of the BOL, which was
issued when the cargo was loaded onboard it is signed by the master of
vessel, it serves three functions – a receipt for the goods, recording their
condition and quantity and any reservations as to those that the master
wishes to make, it is a recordal of the terms of the contract of carriage and
most importantly, operates as a document of title. The BOL is issued by
the master to the shipper which is the seller of the goods – in this case the
seller still held what is in fact a set of three original BOL. While these
remain in the hands of the seller, nobody else can claim delivery of the
cargo from the vessel. The bills would have to be endorsed and handed
over to the buyer – this usually happens in an exchange mediated by the
banks under a letter of credit, where against payment, the BOL and docs
are transferred to the buyer. The buyer can then at the port of discharge
hand in an original BOL/tender an original BOL and obtain receipt of the
goods. So the court analyzing that function held that the seller did not
intend to transfer ownership of the goods – they still held the BOL and
therefore the seller of the cargo was still the owner. This means that the
Argentinian buyer had not yet acquired ownership. The necessary result
was that the attachment application had to fail.

Unfortunately it does not end there as the could still be other problems
which pop up. One that has been referred to as bit of a conundrum is
when must there be the owner, as ownership is passing in this scenario of
a sale of goods where we seek to attach the goods themselves from a
buyer to a seller. The court in Numill Marketing CC v Sirtra Wood Products
Pty Ltd 1994 (3) SA 460 (C) at 466G held that one must establish at the
moment the court is requested to issue an order of attachment that the
respondent owns the goods. The court means that there must be an
owner when the judge hears the application for the attachment of goods.
That may be an application which is ex parte to hear in chambers and at
that point when he grants the order ownership must be established. It is
not when registrar issued the papers with a case number nor is it when
the matter might be argued at a return date to set aside the order if it was
granted as a rule nisi to set aside the rule. It is at the date when the court
first ordered the attachment.

Secondly, property need not be the same value as the claim, but must
not be negligible with nothing – Thermo Radiant Oven Sales (Pty) Ltd v
Nelspruit Bakeries 1969 (2) SA 295 (A). 301C-F, 302C, 310D-H - Whatever
the value of the property when you attach to obtain the release of the
property, the security that is furnished must be equal to the claim,
interests and costs. So that is a significant advantage for an applicant who
might attach relatively low value cargo like bunkers which might cost a
couple of 10s of thousands of dollars, but they attach for a claim of
millions of dollars. Security required to release the cargo is security to the
value of the full claim regardless of the value of the property that is being
attached.

You can attach incorporeal property, such as the right in title and interest
under a contract. The principle is that the property must be situated in the
courts area of jurisdiction. Regarding this type of property, it is situated
where the debtor resides. The right under a contract does not travel with a
ship to which the contract relates. Charterparties – may incur liabilities
under BOL, cargo may be damaged and charterer may be sued as carrier
under BOL. But the charterer does not own the ship, so you cannot attach
the ship – the question is whether you can attach their right, title and
interest under the charterparty over a ship? Look at mv Snow Delta: Serva
Ship Ltd v Discount Tonnage Ltd 2000 (4) SA 746 (SCA) – the court held
that you cannot attach a time charterers right, title and interest – because
the debtor under that contract is the owner of that vessel or a charterer
higher up on the chain who has chartered it and where they reside is
where the debt resides – it hasn’t travelled with the ship into SA waters.
More recently in the mv Rio Caroni: CH offshore Ltd v PDV Marina SA
ZAKZDHC/2013/63, the court held that you cannot attach the right, title
and interest of a demise charterer on the above basis – a demise charterer
takes over full possession of the vessel whereas a time charter does not.
The difference is that a time charter is almost like a hire of a ship but the
crew and master remain as employees of the owner. The time charterer
directs them as to where to sale and what cargo to load and presents BOL
for the master to sign. Under a demise charter, the charterers own crew is
placed onboard a vessel – taking over the whole ship. The court held that
this possessory right is not a real right and doesn’t travel with the vessel ,
or if it does, doesn’t have a value making it capable of attachment. You
can however arrest a vessel under a demise charter under S1(3) of AJRA.

What do charterers own to attach? Bunkers onboard the vessel, even

under the time charter as the charterer will take over and pay for fuel.
Bunkers are property, they have a value and can be attached.

We have dealt with the three requirements – look at practical

implementation aspects – you bring this application exparte. No notice is
given until court has made the interim attachment order. Sheriff will serve
the order to the respondents. The respondents may oppose the order,
ordinarily you obtain the order as a rule nisi with a return date where we
would oppose the confirmation of the order. If the attachment was
obtained in the form of a final order, they can still apply to have it set
aside. This procedure is in APR 5(1) – ONE CAN PROCEED EXPARTE
UNLESS COURT ORDERS OTHERWISE. The court will not go into the merits
of the matter. Once an application has satisfied the requirements for an
attachment, a court seized has no further discretion to refuse the order.
Attachment to found or confirm jurisdiction will be considered as an
exceptional remedy which should be applied with care and caution. Look
at Weissglass! 936G onwards regarding discretion.

Because this order is granted exparte, it is provisional only and may be

set aside by court which made it upon good cause shown by any party
directly affected. Even if party is not named as a respondent but they
have an interest in the order and will be directly affected by it, they can
bring an application for leave to intervene. The court will grant them leave
and they will be joined as an intervening party. Remember that in the
subsequent hearing when the court is considering whether to set aside
the attachment the onus of proof remains on the original applicant and so
you cannot obtain an exparte order and then secure for yourself some
kind of procedural advantage. The courts have emphasized that the
peregrinus will always be given the opportunity of putting counter
allegations before the court, and the applicant will retain the onus.

Ito Thermo Radiant Oven, the jurisdiction secured by attachment is not

lost even if the property is destroyed.

Remember that if defendant has submitted to the jurisdiction, you may

not attach. Subsequent proceedings which might result from the
attachment – you cause delasys in the port and massive financial loss to
the owners and in the chartering and sale chain that might result in
additional actions against you including under S5(4) for wrongful
attachment. Will the court have jurisdiction? Anyone who invokes the
jurisdiction of our courts for relief is taken to have submitted to our
jurisdiction for any remedy under the act for loss or damage flowing from
his action – Mediterranean Shipping Co v Speedwell Shipping Co Ltd 1986
(4) SA 329 (D) 334A-B

Remember if you have already arrested a vessel in rem and there has
been entry of an appearance to defend, obviously the defendant is the
ship but some person has instructed lawyers to file the ATD, and defend
the action – by doing so, they submit to court’s jurisdiction and this means
that you may not bring an application to subsequently attach their
property to sue them in personam. You can sue in personam but on the
basis of their submission to jurisdiction you will not be able to secure the
advantage of attaching the property and obtaining security for the value
of the claim. – Alina 2