On 7 April 1984 the Greek vessel MV Tatiana was arrested off Richards Bay Harbour. On 17 August 1984 the Court granted an order in terms of s 9 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act) authorising the sale of the Tatiana and directing that the balance of the proceeds of the sale remaining after deduction of certain costs and expenses and a sum payable in terms of s 31 of the South African Transport Services Act 65 of 1981 be held as a fund in the Court to be paid in accordance with the Act. Pursuant to this order the Tatiana was sold by auction and the balance of the proceeds of the sale was paid into Court.

On 20 September 1984 Wilson J ordered 'that claims with regard to the fund in Court constituted by the proceeds of the sale of the vessel MV Tatiana be paid subject to the conditions' set out in the order. The referee appointed in terms of this order reported to the Court in December of 1984. It appears from the referee's report that 37 claims were lodged with him. He considered these claims and the information on which they were based and recommended to the Court the acceptance of certain of the claims. He reported on the ranking of the claims and their order of preference.

Among the claims lodged with the referee was a claim by the respondent, the Greek Seamen's Pension Fund. The referee ruled that '[t]he claim by the Greek Seamen's Pension Fund is declared to the extent that it represents payments to a fund or funds which enures to the benefit of the master and crew of the MV Tatiana to be entitled to a preference against the fund in terms of the provisions of s 11(1)(c) (i) of Act 105 of 1983'.

On 14 February 1985 this Court issued a rule nisi calling upon all interested persons to show cause why an order should not be granted giving effect, with certain amendments, to the report of the referee as embodied in the draft order prepared by him. One of the proposed amendments would have meant that the respondent's claim would have been excluded from participation in the distribution of the fund. The respondent accordingly opposed confirmation of the rule nisi.

The issues for the Court are whether: (1) the respondent's claim is a 'maritime claim' as defined in the Act; (2) the respondent has a claim against the fund in the light of the fact that it did not cause the vessel to be arrested prior to its sale; (3) the respondent's claim ought to be restricted to only those amounts which are due to it and not include the amounts due to other organisations on whose behalf it purports to claim; (4) the respondent's claim is a claim falling within the ambit of s 11(1)(c) (i) of the Act; (5) on the papers, the respondent has established the quantum of its claim, or whether this matter should be referred to a referee in terms of s 5(2)(e) of the Act; and (6) the costs of the application.

Held: (1) The respondent's claim is a maritime claim as defined in s 1(1)(ii) of the Act;
(2) The respondent has a claim against the fund despite the fact that it had not had the vessel arrested;
(3) The respondent is entitled to claim in respect of the amounts due to the other organisations on whose behalf it has claimed, except KNE and NEE;
(4) With the exception of that part of the claim which is made in respect of contributions due to KNE and NEE and the penalties, respondent's claim is a claim falling within the ambit of s 11(1)(c)(i) of the Act;
(5) The respondent has established the quantum of its claim. The respondent is therefore entitled to payment from the fund created by the sale of the MV Tatiana of an amount of USD 50,247, together with interest thereon at 12% per annum from 14 September 1984 to date of payment; and
(6) the applicant is ordered to pay the respondent's costs of suit.

The applicant's claim is a claim in respect of a mortgage. Counsel raised the question whether, applying the law of Greece as the Court is required to do, the applicant's claim does not rank preferent to respondent's claim. Both Argyrocostas and Emmanuel gave opinions on how the applicant's claim would rank according to Greek law in relation to the respondent's claim. Argyrocostas, after giving details of the contributions payable to the various funds here in question, said:

In accordance with law 1085 of 1980 art 28 para 4, all the above contributions of ship owners and seamen and which are paid to NAT for distribution to the various bodies and/or funds are considered as part of and are recoverable as members of crews for seamen [sic] and enjoy the same preference as the rest of their salary. In Greek law the claims of crews rank preferent to claims of mortgagees.

The material parts of Emmanuel's opinion are contained in the following passages:

Under Greek law the claim of NAT against MV Tatiana does not enjoy a preferential status against the claim of the preferred mortgagee which in this case is Continental Bank, as the above vessel has been registered under the Greek flag pursuant to the provisions of art 13 of Legislative Decree 2687 of 1953.

The only claims which would enjoy a preferential status against the preferred mortgage on the above vessel are the claims provided by art 2 of the Brussels International Convention of 1926 'Pour l'unification de certaines regles relatives aux privileges et hypotheques maritimes'. The above are provided in art 19 of the relevant Ministerial Decision for the above vessel issued pursuant to the terms of the aforesaid art 13 of LD 2687 of 1953. The Greek Courts have accepted that NAT contributions for vessels registered under the aforesaid LD 2687 of 1953 (such as is the MV Tatiana) do not form part of the crew members' salaries (judgment No 7421/84 of the Athens Multimembered Court of First Instance; judgment No 617/80 of the Piraeus Court of Appeals) and therefore do not enjoy a preferential status against the mortgagee's claim.

In this respect, the Tatiana Ministerial Decision 54259 of 1978 contains a provision pursuant to which Tatiana could be encumbered with preferred mortgages which upon enforcement would rank in priority over all maritime and other liens provided by Greek law with the exception of those provided in art 2 of the International Convention of Brussels of the year 1926. 'Pour l'unification de certaines regles relatives aux privileges et hypotheques maritimes' (hereinafter the 'Brussels Convention'). Subsequent to her registration under the Greek flag, Tatiana was encumbered with a first preferred mortgage in favour of Continental Illinois National Bank and Trust Co of Chicago (hereinafter 'Continental Bank'). Such mortgage in accordance with the terms of the Ministerial Decision enjoys a preferential status over all liens determined as such by Greek law with the exception of the liens provided for in art 2 of the Brussels Convention. (The validity and effectiveness of such provision in the Ministerial Decision(s) has repeatedly been upheld by judgments of the Greek Supreme Court. One of the latest such judgments is the one under No 229/1983 of such Court (sitting in plenary session).)

With regard now to question of the status of the contributions of seamen (and also of their employers) to NAT and the other respective funds (TPAEN, TPKEN, Seamen's Home, ELEON, FLFN, KNE, NEE and KEAN) collection whereof is made by NAT, the position of Greek law is that they are not considered as enjoying a preferential status over the mortgagee's claim(s). Indeed, under the provisions of art 2 of the Brussels Convention as it has been interpreted by the Greek Courts (see our letter dated 9 July 1986) they do not form part of the seamen's wages. The Greek Courts have held (see judgments recited in our letter dated 9 July 1986) that the provisions of art 28 para 4 of Law 1085 of 1980 which determine the aforesaid contributions to NAT and the above funds, as forming part of seamen's salaries, do not apply to vessels (like Tatiana ) registered under Greek flag pursuant to Ministerial Decisions issued under art 13 of LD 2687 of 1953 as such provisions of Law 1085 of 1980 constitute a nonpermitted amendment of the relevant terms of the Ministerial Decision which by reference to art 2 of the Brussels Convention determines the ranking of liens among which the contributions to NAT (and other funds) are not included.

Conclusion: Under Greek law, NAT's claim against the auction proceeds of Tatiana is not considered a claim for seamen's salaries and it does not enjoy a preferential status against the first preferred mortgage in favour of Continental Bank.

Among the liens listed in art 2 of the 1926 International Convention of Brussels for the Unification of Certain Rules relating to Maritime Law and Mortgages (the MLM Convention 1926) are: 'Claims arising out of the contract of engagement of the master, crew and other persons hired on board.'

As appears from the passages quoted above from the opinions of the two Greek lawyers, they differ, as is to be expected of experts. Argyrocostas refers to a statutory provision as the basis of his view. Emmanuel relies on certain Ministerial decrees having the force of law in Greece which provide that certain mortgages rank before other maritime liens with the exception of liens listed in art 2 of the Brussels Convention, one of which is the seafarer's lien for wages. Emmanuel says Greek Courts have accepted that NAT contributions do not form part of the seafarer's wages and therefore are not excepted from the provisions of the ministerial decrees. The opinions of both experts are unsatisfactory. Neither of them gave any reasons of their own for their conclusions. Emmanuel referred to certain decisions of certain Greek Courts without stating the reasoning by which the Courts reached the conclusion that the contributions payable to respondent for the various funds do not arise out of the contract of engagement of the seafarers and therefore do not fall under art 2 of the Brussels Convention which constitutes an exception to the Ministerial decree and maintains the preferential status which seafarers' wages claims enjoy against 'preferred' mortgages in Greek law. It is not enough for the expert merely to refer to the decision of a foreign Court in which that Court has given an interpretation of the meaning and effect of a statute. The expert should at least state the ratio of the decision on which he or she relies. The Court is not bound to apply a decision of a foreign Court as evidence of foreign law if it is satisfied on all the evidence that the decision does not accurately represent the foreign law.

The point at issue is whether the respondent's claim would in Greek law be a claim arising out of the contract of engagement of the crew of the Tatiana within the meaning of art 2 of the Brussels Convention and whether the provisions of Law 1085 of 1985 'constitute a nonpermitted amendment of the Ministerial Decision'. Since Emmanuel did not try and justify his interpretation of art 2 of the Brussels Convention with reference to any special rule of construction of Greek law this Court is free to apply its own interpretation of it.

The terms of art 2 of the Brussels Convention are plain and unambiguous. It does not admit of any doubt that if an amount is deducted from a seafarer's wage and withheld from him or her the moneys so deducted and withheld by the employer do not change in character to something other than seafarer's wages and the seafarer would be able to claim them as such. The claim in respect of the contributions which the employers should have made to the funds is just as plainly a claim 'arising from the contract of engagement' of the crew of the Tatiana.

It is not clear from the opinion of Emmanuel whether the ratio of the decisions of the Greek courts would apply to the contributions in respect of all the funds. If it would, it is clearly wrong in any law and language. On the construction which the Court puts on art 2, the respondent's claim is in Greek law a claim arising out of a contract of engagement within the meaning of art 2 and therefore it ranks in Greek law before the claim of the applicant.

In any event, since the applicant has failed to prove what principles would be applied in Greek law in the interpretation of art 2 of the Brussels Convention, the presumption that the rules of interpretation in Greek law would be the same as in South African law remains undisturbed.