This was an application brought by the owner of the MV Madiba 1 for leave to appeal against the Court's earlier judgment dismissing its application to amend its plea in an action in rem instituted by a creditor of Meltt (Pty) Ltd (in liquidation) (Meltt): see Van Niekerk v The MV 'Madiba 1' [2022] ZAWCHC 125 (CMI1900). It was alleged in the particulars of claim that Meltt was the charterer by demise of the vessel when it incurred the debt giving rise to the maritime claim.

Held: The application is refused.

The arrest of the vessel for the purpose of the action in rem was effected in terms of s 3(4)(b) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the AJRA). Section 3(4)(b) contemplates the arrest of a vessel for the purpose of instituting an action in rem where the owner of the property to be arrested would be liable to the claimant in an action in personam in respect of the maritime claim concerned. Here, the plaintiff’s maritime claim does not lie against the owner of the vessel. It lies against Meltt, allegedly the demise charterer of the vessel. The plaintiff was nonetheless able to rely on the provisions of s 3(4)(b) of the AJRA to institute proceedings against the vessel by virtue of the deeming provision in s 1(3) of the AJRA, which provides: ‘For the purposes of an action in rem, a charterer by demise shall be deemed to be, or to have been, the owner of the ship for the period of the charter by demise.’

It was common ground that the evident object of s 1(3) of the AJRA was to give effect domestically to art 3.4 of the Arrest Convention 1952. The policy considerations informing the adoption of such legislation and the practical effect of the pertinent provisions were discussed in The Chem Orchid [2015] SGHC 50, [2015] 2 Lloyd's Rep 666.

The interpretation of s 1(3) of the AJRA adopted by this Court is consistent with the construction of the provision in all the previous South African reported cases in which the import of the deeming provision has been considered. The South African jurisprudence has construed s 1(3) of the AJRA to consistent effect with the equivalent, albeit differently worded, statutory provisions found in other maritime jurisdictions. It is an interpretation that has allayed the concerns expressed by various academic commentators shortly after the insertion of s 1(3) into the AJRA in 2000 about the possible far-reaching consequences of construing the provision to make the demise charterer the actual owner’s proprietary substitute; something that they all agree cannot have been intended by the lawgiver.

The interpretative approach adopted by this court (and in the other South African judgments in which s 1(3) has been considered) is consistent with that stated in The Andrea Ursula [1973] QB 265, 270-1 (a case with interesting parallels concerning the construction of domestic legislation to give effect to art 3.4 of the Arrest Convention 1952):

Recent decisions of the Court of Appeal show that, where the meaning of an English statute intended to give effect to an international convention to which the UK is signatory is not clear, the court can and should look at the terms of the convention to assist it in construing the statute; and further that, having done so, the court should so construe the statute as to give effect, so far as possible, to the presumption that Parliament intended to fulfil, rather than break, its international obligations. ... I turn accordingly, to consider the relevant provisions of the International Convention relating to the Arrest of Sea-going Vessels, and the provisions of the Act of 1956 intended, or apparently intended, to give effect to them.

South Africa, like Singapore and Australia, is not a signatory to the Arrest Convention but, as already noted, it is common ground that art 3.4 of the Convention was the begetter of s 1(3) of the AJRA. The evident legislative object was to bring South Africa’s admiralty jurisdiction rules into line with those widely applicable internationally.

As explained in The Chem Orchid, the object of art 3.4 of the Arrest Convention was to put the actual owner of a vessel at risk in respect of the maritime claims of creditors of the demise charterers of the vessel. It is to give such creditors a right to proceed in rem against the vessel as if it were the property of the charterer; a remedy which the creditors did not enjoy before the introduction of provisions such as s 1(3) of the AJRA and its international equivalents. This consideration informed this Court’s finding that s 1(3) of the AJRA accordingly has nothing to do with transferring any of the proprietary incidents of ownership from the actual owner to the charterer. It is about attaching risk, not transferring rights. As the owner conceded in its argument of the application for leave to appeal, s 1(3) is in essence a purely jurisdictional provision, widening the previously more circumscribed circumstances in which a vessel can be liable to arrest for the purpose of instituting proceedings in rem: compare Taxidiotiki-Touristiki-Nautiliaki Limited (t/a Aspida Travel) v The Owners and/or Demise Charterers of the Vessel ‘Columbus’ [2021] EWHC 310 [2] (Admlty) in relation to the equivalent UK statutory provision.

There is no sound rational basis for concluding that there is a reasonable prospect that another court would, on appeal, adopt the construction of s 1(3) of the AJRA or s 359(1)(b) of the Companies Act 1973 that would be necessary to give the owner’s proposed amendments traction. There is also no other compelling reason to grant leave to appeal. There are no conflicting judgments in point. On the contrary, the weight of authority lies against giving s 1(3) the import contended for by the owner.

The owner argued, however, that a good reason to grant leave to appeal was that the legal questions presented by the owner’s intended amendments were res nova. The owner is correct that there is no precedent in a case on all fours with this one. But the fact that an obviously bad point has not previously been raised and rejected does not afford a compelling reason for a court of first instance to grant leave to appeal when such a point is first raised and predictably rejected.