Seychelles Shipping Lines Ltd v Taurus International Ltd and another (ECJ 2004/013) [2003] ZAECHC 4 (20 February 2003)

FORM

A

FILING

SHEET FOR EASTERN CAPE JUDGMENT

ECJ NO : 013/2004

PARTIES: SEYCHELLES

SHIPPING LINES LTD APPLICANT

AND

TAURUS INTERNATIONAL LTD 1ST RESPONDENT

CLAREMONT FARMING CC 2ND RESPONDENT

RERENCE NUMBERS -

Registrar: 45/03

DATE HEARD: 13 FEBRUARY 2003

DATE DELIVERED: 20 FEBRUARY 2003

JUDGE(S):

SANDI J

LEGAL REPRESENTATIVES -

Appearances:

for the State/Applicant(s)/Appellant(s): JC KINCAID for the accused/respondent(s): SH COLE

Instructing attorneys:

Applicant(s)/Appellant(s): SCHäFERS

ATTORNEYS Respondent(s): NETTELTONS

CASE INFORMATION -

Nature of proceedings : RETURND DAY OF PROVISIONAL ORDER

Topic: ATTACHMENT

TO FOUND JURISDICTION

IN

THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION)

Case no: 45/03

Heard: 13/02/2003

Date delivered: 20/02/2003

In the matter between:

SEYCHELLES SHIPPING LINES LTD Applicant

And

TAURUS INTERNATIONAL LTD 1st Respondent

CLAREMONT FARMING CC 2nd Respondent

JUDGMENT

SANDI J.

[1] This is the return day of a provisional order to found jurisdiction. It is opposed by both respondents.

[2] The applicant and the first respondent are peregrini of this Court. The second respondent is a close corporation registered and incorporated in South Africa.

[3] On 17 January 2003 this Court issued an order in the following terms:

“1. THAT the Sheriff of the High Court, East London be and is hereby authorised and directed to attach all the right, title and interest of the First Respondent to:

its claim against the Second Respondent arising out of the payments made by it to the Second Respondent as follows:

USD50 000,00 (R428 000,00) made on 14 January 2003; USD275 000,00 (R2319 680,00) made on 10 January 2003;

Whether for the delivery of cattle, repayment of the money or whatever;

the costs order awarded in favour of the First Respondent by this Court in

its judgment in Case nos. EC10/ 2003 and EC11/ 2003;

the said attachments being to found jurisdiction in an action by the Applicant against the Respondent for payment of the sum of USD 386 500,00, interest and costs.”

[4] A Rule nisi was further issued on the same day calling upon all interested persons to show cause before this Court on 30 January 2003 why the attachment order should not be confirmed.

[5] On 30 January 2003 the matter was postponed to 13 February 2003 with costs reserved. On that day the matter was argued before me.

[6] The facts upon which the application is based may be summarised briefly as follows: The applicant alleges that on 1 July 2002 and at Durban a written charter agreement (the memorandum of understanding, annexure “TV1” in the application papers) was entered into between it and first respondent and that, arising out of an alleged breach of the agreement by first respondent, the applicant suffered damages as a consequence thereof. Thereafter the applicant launched an application and was granted by the East London Circuit Local Division an order attaching property allegedly belonging to first respondent in order to found jurisdiction (the first application). On the return day of the rule nisi, the first application was dismissed with costs.

[7] The applicant then launched the present proceedings in which it joined the second respondent. It appears from the founding affidavit in this matter that in the course of the first application the applicant discovered that two payments, namely USD 50 000,00 and USD 275 000,00, had apparently been made by second to first respondent and by first to second respondent, respectively. These transactions were described in the second respondent’s bank documents (annexures TV7 (i) to (iii) of the applicant’s papers) as “merchandise export” and “advance payments”. From the description “advance payments” the applicant inferred that the second respondent “must have some contractual obligation” to the first respondent in return for that money. It further alleged that “the first respondent clearly has a right to claim performance of a contractual obligation from the second respondent and it is this right which the applicant contends it is entitled to attach to found jurisdiction in this matter”. The applicant confessed in its affidavit that it is unable to furnish any further details as to the precise nature of the transactions referred to above.

[8] On the other hand, the first and second respondents admit that payments were made by the first respondent, acting as agent of Zebu Ltd of Mauritius, to second respondent in respect of two consignments of cattle sold by second respondent to Zebu Ltd. Any alleged indebtedness of the first respondent to the second respondent was denied. According to the respondents there are no contractual obligations existing at present or in the future between them.

[9] The respondents’ above averments are supported by one John Alexander Page (Page), a member of the second respondent. Page reiterates that the first respondent is an agent facilitating the export of livestock from South Africa to Mauritius, acting on behalf of certain companies based in Mauritius, including Zebu Limited. He states further that no agreement exists between first and second respondents for the sale of any commodity by the second respondent to the first respondent. He says that a balance of R393 182,50 is still owing by Zebu Ltd to second respondent.

[10] Further support for the respondent’s version is to be found in the affidavits of one Patrick Russell Vice, a chartered accountant and financial manager of the second respondent as well as one Richard Punjoo, the director of Zebu Limited.

[11] Regarding the term ”advance payment” contained in the bank statement of the second respondent one Liesel Groenewald, employed by First National Bank Corporate Division in East London as a Foreign Exchange dealer, explains that on or about 10 January 2003 she processed the payment made to second respondent’s First National Bank account from Mauritius for purposes of customer application to sell foreign currency. She chose to describe the nature of the transaction as “advance payments” as she had been informed that two consignments of cattle were to be shipped to Mauritius.

[12] In reply to this averment the applicant offers no comment thereto while seemingly accusing the bank of having deviated from its standard practice by divulging the above information.

[13] I now deal with the arguments presented by both counsel.

[14] A point in limine was raised by the respondents for the first time during argument. It concerns the locus standi of the applicant to bring this application.

[15] Mr Cole, appearing for the first and second respondents, argued with reference to SA Milling Co (Pty) Ltd v Reddy 1980 (3) SA 431 (SE) at 436 F to 437 and Wilson v Zondi 1967 (4) SA 713 (W) at 717 (C-D), that, in the absence of applicant’s resolution authorising the deponent to bring this application on its behalf, the deponent has no locus standi to bring the application.

[16] Counsel went further to submit that even a subsequent resolution of the applicant conferring proper authority on the deponent and ratifying his actions would not assist the applicant. Interboard SA (Pty) Ltd v Van der Berg 1989 (4) SA 166 (O).

[17] During argument on this point Mr Kincaid, for the applicant, handed up a resolution of the applicant granting authority to the deponent and ratifying steps already taken in this matter.

[18] As stated above this point was taken for the first time during argument. In answer to the deponent’s assertion in the founding papers that he had been authorised to depose to the founding affidavit and to bring his application the respondents stated that they were unable to comment thereto and there was therefore no challenge to deponent’s locus standi.

[19] In my view the applicant’s resolution, though belated, has had the effect of supporting the averment of authority made in the founding papers and if there was any doubt regarding the deponent’s authorisation it has been laid to rest and such defect to his authority, as there may have been, has been cured retrospectively. I refer to what was said by Claassen J in Fourways Mall v SA Commercial Catering and Allied Workers Union 1999 (3) SA 752 (w) at 758 G-H:

“In my view there is no substance in the first respondent’s point in limine in this regard. The required allegations of due authorisation were in fact made in the founding affidavit but were not substantiated by documentary proof thereof. In the replying affidavit such documentary proof of authorisation and/or ratification is supplied. This case, in my view, is on all fours with the facts in Moosa and Cassim NNO v Community Development Board 1990 (3) SA 175 (A) at 180 H-181C. In the latter case the Appeal Court approved the procedure which was also adopted in the present case relating to proof of authorisation and/ or ratification. The second point in limine is therefore also dismissed.”

[20] In my view the point in limine must fail.

[21] Mr Cole submitted that the applicant failed to make out a prima facie cause of action entitling it to the attachment order. In particular he submitted that the cause of action pleaded by the applicant is not supported by the evidence.

[22] In attachment proceedings the onus is on the applicant to show that there is evidence which, if accepted, will establish a cause of action. In deciding this issue the Court is not entitled to go into the merits of the action, (Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 at 831 H-I; Butler v Banimar Shipping Co. SA 1978 (4) SA 753 at 757 C-G.

[23] The applicant alleges that the cause of action is based upon a written charter party agreement and in support of this allegation annexed a document headed “memorandum of understanding” (annexure “TV1”). The body of the document provides for the completion of a “fully fledged memorandum of agreement” to be prepared by the parties’ attorneys in Mauritius. It further states that “it (the first respondent) will enter into a charter party agreement with SSL (the applicant).

[24] In its papers the applicant acknowledges that no further agreement, other than “TV1”, was entered into between the first and second respondents but avers that subsequent to the signing of “TV1” the parties conducted business in accordance with the terms of thereof.

[25] The applicant further avers that since signing “TV1” it transported livestock from South Africa to Mauritius on behalf of second respondent and that two payments were made to it by first respondent in August and September 2002 for such transportation.

[26] The breach alleged by the applicant to have been committed by the second respondent is its failure to make further payments in terms of “TV1” for the months of October 2002 to January 2003. It says it has a demurrage claim in the sums of USD 16 000,00 and USD 35 000,00 plus further damages of USD 220 000,00.

[27] It is averred by the applicant that the amount claimed is calculated in respect of the remainder of the contract period which was to terminate in June 2003.

The allegations made by the applicant were denied by the first respondent which does not admit the existence of the agreement upon which the claim is based.

[28] During argument, Mr Kincaid disavowed any reliance upon an oral agreement as applicant’s cause of action.

[29] At face value it seems to me that annexure “TV1” is not a final binding agreement between the parties. As the document says, a fully fledged agreement, which was not entered into, would be prepared by the attorneys in due course. This has not been done.

[30] In my view the applicant has failed prima facie to establish the existence of a written charter party agreement on which to base the present application. Therefore its claim against the first respondent should fail on this ground alone.

[31] Regarding the attachment of the claims in the possession of the second respondent there does not seem to be a genuine denial by the applicant of the version proffered by the respondents. The applicant does not know what the payments were made for, the circumstances under which they were made and is unable to comment on the explanation given by Groenewald that she herself chose the description “advance payments”. More importantly the evidence of the respondent that the first respondent acted as agent for Zebu Limited, stands unchallenged and seems to be the more probable evidence and acceptable version in the circumstances.

[32] I am unable to decide this issue in favour of the applicant. In fact I am more inclined to accept the respondent’s version in this regard.

[33] However, Mr Kincaid referred me to certain discrepancies between the affidavits filed in support of the first application (EC10/ 2003) and the present application, and submitted that I should refer to oral evidence the determination of the circumstances under which the transactions between the first and second respondents were made.

[34] Firstly, in light of the conclusion I have reached that the applicant has failed to prove a prima facie cause of action, no useful purpose would be served by referring the matter to oral evidence; even in the light of the apparent discrepancies between the two matters.

[35] It follows that the attachment of the costs order against the applicant in favour of the first respondent should also fail, firstly, on the ground, as stated above, that the applicant has not discharged its onus of establishing a prima facie cause of action against the first respondent.

[36] Secondly, as was conceded by Mr Kincaid, the costs do not have a separate existence to that of the applicant. They are located where the applicant (the debtor) is. See Serva Ship Ltd v Discount Tonnage Ltd 2000 (4) All SA 400 (SCA) at 405 (f-g).

[37] Having said so I need not consider Mr Cole’s submission that costs can only be attached after taxation. Suffice it to say that, in my view, these costs are an asset in the estate of the applicant which may be attached at the instance of an interested party even though still unquantified.

[38] The applicant must fail on this leg as well.

[39] On 30 January 2003, being the return day for this application, the applicant made a substantive application for a postponement. Because the papers were not paginated and indexed and no heads of argument had been filed by the applicant the Judge presiding postponed the matter and reserved costs. No argument was heard on that occasion. Though the respondent had prepared heads of argument and was ready to proceed with the matter, the applicant was not. It had not filed replying affidavits. Amongst the reasons advanced for seeking a postponement was that the applicant required time to obtain a copy of the transcript of counsel’s argument (annexure “TV10”).

[40] This application was launched and the provisional order granted on 17 January 2003 was returnable on 24 January 2003. The respondents’ answering affidavits were served and filed at approximately 09h45 on 24 January 2003.

[41] By the time this application was launched the applicant was aware of the nature of the argument which was presented by the respondent’s counsel in the first application.

[42] In any event the applicant sought an indulgence which was granted. The matter was urgent and the respondents had every reason to seek a speedy resolution of the matter.

[43] I do not understand Mr Kincaid’s argument to the effect that once the attachment order was granted the urgency ceased to exist as only the first respondent’s “right, title and interest” to the claims was attached and not the assets themselves.

[44] Albeit obiter, Harms JA said that “the phrase ‘right, tittle and interest’ can only refer to ‘rights’ because the law does not protect titles and interests that do not translate into legal rights”. Serva Ship Ltd v Descount Tonnage Ltd 2000 (4) All SA 400 (SCA) at 404 (f-g).

[45] By the same token, in casu the respondents were entitled to treat the matter as urgent. The second respondent’s asset has been attached and it can not utilise it.

[46] Having considered all the circumstances pertaining to this issue, I am satisfied that the applicant should bear the wasted costs occasioned by the postponement on 30 January 2003.

[47] It now remains for me to consider the costs of the application. For the purpose of taxation I record that the point in limine which was unsuccessful did not occupy more than 30 minutes of the Court’s time.

[48] The respondents must be awarded the costs of this application. The second respondent was not a party to the issue of the costs’ attachment which took about 5% of the papers and of the Court’s time. But for the remainder of the application I am satisfied that the second respondent has a real and substantial interest in the matter and is entitled to its costs.

[49] In the circumstances the following order is made:

1. The point in limine is dismissed with costs.

2. The Rule is discharged and the attachment order set aside with costs, such costs to include the wasted costs of the postponement of 30 January 2003.

B. SANDI

JUDGE

OF THE HIGH COURT

1. Applicants’ Attorneys: Shafers Attorneys, Grahamstown

2. Applicant’s Counsel: Adv: Kincaid

First and Second Respondents’ Attorney: Nettletons, Grahamstown

Respondents’ Counsel: Adv: Cole

Date heard: 13/03/2003

Judgment: 20/03/2003