The MV Forum Victory was arrested in Durban harbour at the instance of a creditor, Hans K Madsen CV. Further arrests followed and the vessel and its bunkers were sold on 26 February 1997 under s 9 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the Act). A fund was constituted with the proceeds and a referee appointed to investigate claims. The referee lodged a report containing his recommendations as to the ranking of claims in terms of s 11 of the Act. On 18 September 1997 a rule nisi was issued calling on interested parties to show cause why the referee's recommendations, subject to certain modifications, should not be confirmed. Den Norske Bank ASA (the ship's mortgagee and appellant) objected on various grounds. It argued that the claims of various creditors, including those of the respondents whose claims would otherwise fall within the ambit of s 11(4)(c)(v), arose more than one year before the commencement of proceedings to enforce them or before submission of proof to the referee.

Accordingly, the appellant argued that these claims were not claims within the meaning of that section and had to be ranked at the back of the queue and after the claim of the appellant. The size of the appellant's claim, however, was such that it would swallow up the fund and leave nothing for the claims ranking after it. On the extended return day of the rule nisi the issue of ranking was ordered to be argued and decided separately from the remaining issues. On the appointed day the presiding Judge was informed that there were conflicting decisions of the Natal Provincial Division on the point and he accordingly referred the matter for argument before the Full Court. That Court found in favour of the respondents. The appellant appealed.

Held: The appeal is allowed. The order of the Natal Provincial Division is set aside and there is substituted an order declaring that, for the purposes of s 11(4)(c) of the Act, the claims of the respondents arose when the goods were supplied or the services rendered or the repairs effected, as the case may be, notwithstanding any postponement of the due date of payment.

In arriving at the conclusion it did, the Court below elected to follow the decision of Wilson J in Banque Paribas v The Fund Comprising the Proceeds of the Sale of the MV Emerald Transporter 1985 (2) SA 452 (D) in preference to that of McLaren J to the contrary in MV Golden North: Governor and the Company of the Bank of Scotland v Fund Constituting the Proceeds of the Judicial Sale of the MV Golden North (Maritime Technical Co Ltd Intervening) 1999 (1) SA 144 (D). In the former case Wilson J was concerned with the expression 'claims which arose' in s 11 prior to its substitution. He held that the claims referred to were claims which were due and enforceable and not those which had merely come into existence. The sole basis for arriving at this conclusion was the dictionary meaning of 'claim', being a demand for something 'due' (at 463A E). This reasoning was criticised by McLaren J in The Golden North, who pointed out that the real question was what was meant by the expression 'claims which arose' and not the word 'claim' without qualification (at 149A B). It was necessary, he said (at 149I J), that 'one must have regard to the context in which the word is used and to the nature, scope and apparent purpose of the legislation C in which it appears in order to determine its meaning'. This is undoubtedly so. The Court is accordingly unable to agree with the view of Hurt J (with whom Howard JP and Combrinck J concurred) in the Court below that there was much to be said for Wilson J's 'uncomplicated interpretation of s 11(1)(c)'.

Hurt J in the Court below furthermore found support for the construction he placed on s 11(4)(c) in the provisions of the International Convention for the Unification of Certain Rules Relating to Maritime Liens and Mortgages 1926 (the MLM Convention 1926), and the subsequent Convention with the same title of 1967 (the MLM Convention 1967). Article 8 of the latter Convention admittedly contains the expression 'when the claims ... arose' but the Court is unable to find anything of assistance in either Convention. In this Court counsel on neither side sought to rely on the Conventions.

The words 'a claim which arose' in s 11(4)(c) of the Act are to be construed as I meaning 'a claim which came into existence' and not 'a claim which became enforceable'. The appeal must accordingly succeed.