THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No. 263/98
In the matter between:
SERVA SHIP LIMITED
Appellant
and
DISCOUNT TONNAGE LIMITED
Respondent
In re: M.V.  SNOW  DELTA
Coram:
HEFER, GROSSKOPF, HARMS, OLIVIER JJA
and MELUNSKY AJA.
Heard:
18 AUGUST 2000
Delivered:
31 AUGUST 2000
Subject:
Jurisdiction - situs of rights in personam -
maritime claims
JUDGMENT

HARMS JA
HARMS JA:
[1] The general rule is that where the plaintiff and the defendant are
both peregrini, a recognised ratio jurisdictionis as well as arrest of the
defendant or attachment of his property are essential to found jurisdiction
in a high court (Siemens Ltd v Offshore Marine Engineering Ltd 1993
(3) SA 913 (A) esp at 928F-G).  The position is different where a high
court exercises admiralty jurisdiction in terms of the Admiralty
Jurisdiction Regulation Act 105 of 1983 (“the Act”). According to s 2(1),
admiralty jurisdiction exists in relation to a maritime claim irrespective of
the place where the claim arose, i. e., irrespective of the existence of
some ratio jurisdictionis. One implication of s 3(2)(b) read with s 4(4)(a)
is that an action in personam may be instituted by a peregrine plaintiff
against a peregrine defendant “whose property within the court's area of

jurisdiction” has been attached by the plaintiff to found or to confirm
jurisdiction (The Shipping Corporation of India Ltd v Evdomon
Corporation and Another 1994 (1) SA 550 (A) 562C-H.)    This appeal
is concerned essentially with the question whether the rights of a charterer
(the hirer) of a ship in terms of a time charter-party can be said to be
“property” which is located wherever the ship may be from time to time.
A time charter-party does not entitle the charterer to the possession and
control of the ship; in other words, the charterer has no real rights in
relation to the ship but only contractual rights against the owner.
[2] The facts of this case have been reported and do not require much
by way of elaboration.  The  present respondent (“DTL”), a peregrinus
from Jersey, believes that it has a maritime claim for damages, mainly
because of a breach of contract, against the present appellant(“SSL”),
also a peregrinus but from the Isle of Man.  The cause of action has no

connection with this country.  Litigation began with an ex parte
application before Lategan J in the Cape High Court in which DTL
obtained an order authorising the sheriff of Cape Town to attach
“all of [SSL's] possessory right, title and interest in the MV 'SNOW DELTA' ('the vessel')
currently lying alongside at the Port of Cape Town, including any possessory right which
may arise from [SSL's] possession and control of the vessel in terms of a demise charter-
party concluded between [SSL] and the vessel's owners”
to found jurisdiction for the  alleged claim.   At the same time a rule nisi
was issued calling upon all interested parties to show cause why the
attachment should not be confirmed.  It will be immediately apparent to
the reader that the order related to the attachment of real rights flowing
from a demise charter-party (the charterer under a demise charter-party
being regarded as the owner of the ship during the term of the charter)
and not from contractual rights flowing from a time charter-party.  The

reason for this was that at the time of the launch of the application DTL
believed that SSL had possession of the vessel in terms of a demise
charter-party.  In this regard DTL erred.
[3] The fact of the matter was that SSL had chartered the vessel in
terms of a time charter-party entered into on the Isle of Man from the
disponent owner (Blue Star Line, a concern in the United Kingdom) and,
further, had entered into a sub-charter by time-chartering (“leasing”) the
vessel to yet another Manx company, Universal Reefers Ltd.  In spite of
having been made aware of these facts, DTL persisted in its application,
alleging that SSL still had “a right in the vessel arising from the time
charter” which was susceptible to attachment.  It did not, however,
persevere with an application for the amendment of the interim attachment
order.  In the event, on the return day, Foxcroft J was not prepared to
confirm the rule nisi and discharged it (The MV “Snow Delta”:

Discount Tonnage Ltd v Serva Ship Ltd 1997 (2) SA 719 (C)).  His
reason  essentially was that the contractual obligation of the disponent
owner was not “property” within the area of jurisdiction of the Cape High
Court.
[4] Having been granted leave to appeal to the full court, DTL
contended that the ship had to remain under attachment pending the
finalisation of the appeal and the sheriff refused to release the ship.  This
led to an urgent application by SSL for a declaratory order, declaring that
the ship was no longer under attachment.  This application before
Selikowitz J was successful (The MV Snow Delta: Discount Tonnage
Ltd v Serva Ship Ltd 1996 (4) SA 1234 (C)).
[5] On appeal the Full Court overruled the judgment of Foxcroft J and
confirmed the rule nisi in other terms (MV Snow Delta: Discount
Tonnage Ltd v Serva Ship Ltd 1998 (3) SA 636 (C), per Thring J, King

DJP and Viljoen AJ concurring).  What was attached was
“all of [SSL's] right to and interest in the use and employment of the MV Snow Delta . .
. which [SSL] might have by virtue of a time charter-party concluded between [SSL] and
the said vessel's owner . . .”
(at 655G-H).  The instant appeal is, with special leave, against this order.
[6] It is convenient at the outset to say something about the judgment
of Selikowitz J.   The ratio of the decision was based on SAB Lines (Pty)
Ltd v Cape Tex Engineering Works (Pty) Ltd 1968 (2) SA 535 (C)
where Corbett J had held that the granting of interim relief as an adjunct
to a rule nisi is to provide protection to a litigant pending a full
investigation of the matter by the court of first instance.  Once that interim
order is discharged, it cannot be revived by the noting of an appeal.  This
approach was and still is generally accepted as correct.  Dissenting views
were, however, expressed in Du Randt v Du Randt 1992 (3) SA 281 (E)
and Interkaap Ferreira Busdiens (Pty) Ltd v Chairman, National

Transport Commission, and Others 1997 (4) SA 687 (T).   The essence
of these judgments was that Corbett J had failed to have regard to the
common law rule as received by our courts that an appeal suspends the
execution - or, in the words of Rule 49 (11), the operation and execution
- of an order (cf Reid and Another v Godart and Another 1938 AD 511).
Unfortunately, the criticism was based upon a misunderstanding of the
concept of suspension of execution.  For instance, an order of absolution
from the instance or dismissal of a claim or application is not suspended
pending an appeal, simply because there is nothing that can operate or
upon which execution can be levied.  Where an interim order is not
confirmed, irrespective of the wording used, the application is effectively
dismissed and there is likewise nothing that can be suspended.  An
interim order has no independent existence but is conditional upon
confirmation by the same court (albeit not the same judge) in the same

proceedings after having heard the other side (Chrome Circuit
Audiotronics (Pty) Ltd v Recoton European Holdings Inc and Another
2000 (2) SA 188 (W) 190B-C).  Any other conclusion gives rise to an
unacceptable anomaly:  If an applicant applies for an interim order with
notice and the application is dismissed, he has no order pending the
appeal; on the other hand, the applicant who applies without notice and
obtains an ex parte order coupled with a rule nisi and whose application
is eventually dismissed, has an order pending the appeal.
[7] The order of Selikowitz J gave rise to an argument by SSL before
the Full Court that the appeal to it had become moot and was of
academic interest only: the ship had left and there was no longer anything
within the court's jurisdiction to attach to give effect to the order.  When
this Court raised the issue of mootness under s 21A of the Supreme
Court Act 59 of 1959, SSL had second thoughts about the matter. The

Full Court judgment has far-reaching implications for foreign ships that
enter South African waters and that, at least for that reason, this Court
should consider its correctness.  There is a discretion and not an
obligation to refuse to hear a moot appeal.  In any event, there is much
force in the argument, in the light of a passage quoted by the Full Court
(at 644C-G) from Thermo Radiant Oven Sales (Pty) Ltd v Nelspruit
Bakeries (Pty) Ltd  1969 (2) SA 295 (A) at 310D-H, that the matter is not
moot.   The passage contains the following statement:
“. . . the crucial time for determining the jurisdiction of a court to entertain an action is the
time of the commencement of the action. Jurisdiction having once been established at such
time, it continues to exist to the end of the action even though  the ground upon which the
jurisdiction was established ceases to exist. . . ..  If, therefore, at the time of the institution
of the action there is an asset which will in all probability still exist at the time of judgment,
such an asset is capable of attachment to found jurisdiction. If such an asset is, for some
reason or other, destroyed before institution of the action, such attachment ought on
application to be set aside. If the asset is, however, destroyed after the institution of the
action, jurisdiction will, in accordance with the principle enunciated above, not cease to
exist.”
Unfortunately, the generally sound analysis by Thring J on this aspect of

the case (at 643G - 644C), suffers from a malady to which I shall return
in that it fails to distinguish between the attachment of the vessel and the
attachment of the contractual rights flowing from the time charter-party.
[8] Since the rule nisi was premised upon the existence of a demise
charter, DTT argued in the courts below that it was not possible to make
a final order based upon a time-charter;  it would amount to the
confirmation of a rule on completely different facts giving rise to different
rights.  The Full Court may have been correct in dismissing this objection
(at 646D-649H) but if correct in the result, the reasoning is not at all
appealing.  I will confine myself to one or two observations relating to the
interpretation of the rule nisi (at 648C-G).  The Full Court in my view
strained the ordinary and commonsense meaning of the rule nisi. The
phrase “right, title and interest” can only refer to “rights” because the law
does not protect titles and interests that do not translate into “legal”

rights. To hold that an order may encompass more than the evidence
justifies (at 648F) is untenable. Assuming the rule nisi to have been open
to another interpretation, the Full Court was not justified in closing its
eyes to the contents of the application in order to establish its meaning.
It was in the position of the judge who had to consider the matter on the
return day.  The whole case is before such a judge and the record is not
extrinsic evidence at that stage of the proceedings.   Having said this, I
refrain from pursuing the matter any further because the appeal has to
succeed on another ground.
[9] The central question is whether the rights of the charterer (SSL)
flowing from the time-charter between SSL as charterer and Blue Star
Line as disponent owner can be said to be “property” which was in Cape
Town because the ship, the subject-matter of the charter-party, itself was
there for the time being.  Some trite observations may be necessary to

introduce a discussion of the subject.  Rights in relation to the
(contractual) performance (obligatio) of another have since time
immemorial been classified as incorporeal.   The obligation of the debtor
is not property; it is the right (often referred to as the “action”) of the
creditor.  Obligations can therefore not be attached because they do not
form part of the patrimony of the creditor whereas rights can be attached
and do form an asset in the estate of the creditor.   Intangibles by their
very nature cannot have a physical locality.  They do not attach to the
objects to which they relate.  For purposes of, for instance, jurisdiction
the law had to make an election based upon practical considerations by
deeming incorporeals to have a location.  They are not located where the
obligation has to be performed (Voet 1.8.30).  Voet preferred the view
that they are located at the domicile of the creditor (in this case SSL, not
DTL), but proceeded to deal with the merits (which he recognised) of the

opinion of Grotius (Consultatien part 3 no 151) which was that the situs
of an incorporeal right is where the debtor (in this case Blue Star Line)
resides.
[10] Our courts have adopted the view of Grotius.  The first reported
judgment is Union Government v Fisher's Executrix 1921 TPD 328
(Wessels JP, De Waal J concurring).  This judgment was approved and
followed by this Court in Randfontein Estates Gold Mining Co Ltd v
Custodian of Enemy Property 1923 AD 576.  Innes CJ (at 581)
pertinently held that the only attribute of locality that personal actions
possess must relate to the locality where the debtor resides; it is only
there that incorporeal rights can be regarded as localised.  He also noted
that he knew of no principle of our law which justifies the merger of the
personal rights evidenced by a negotiable document in the instrument
itself (at 582 in fine).  Solomon JA, in a concurring judgment, pointed out

that the rule adopted was in accordance with English law (585-586).  The
question in that case was whether the rights reflected in bearer shares and
bearer debentures of a company registered in Transvaal  were “property”
within this country where the company was resident or whether they
should be regarded as localised at the situs of the documents.  Since the
documents, although bearer documents, are not the right but merely
evidence the right (at 579 in fine - 580), and applying the Grotius
approach, the judgment held that they were property in this country,
irrespective of where the documents were.
[11] Two further judgments of this Court confirmed the approach
(Longman Distillers Ltd v Drop Inn Group of Liquor Supermarkets
(Pty) Ltd 1990 (2) SA 906 (A) and Nahrungsmittel GmbH v Otto 1993
(1) SA 639 (A) 647F-649C).  Both related to taxed bills of costs and
especially the latter judgment made it clear that the certificate of the taxing

master did not constitute the right but merely evidenced it and that the
right is located where the debtor is.  (It may be mentioned that there may
be an inconsistency in Nahrungsmittel.    On the one hand it held that the
court of first instance had correctly held that incorporeal movables did
not have an existence separate from that of the creditor (at 647G-J) and
on the other that the incorporeal had its situs where the debtor resided (at
649B-C).  For purposes of that or this case it does not matter because all
the parties involved were peregrini.)
[12] The Full Court, apparently relying on the doctrine of effectiveness,
held that incorporeal property can be at more than one place at the same
time (at 653B-E).  In reaching this conclusion it relied on an inappropriate
analogy, namely that a company may be sued at either its registered office
or its principal place of business.  We are concerned with the situs of
property.   The situs of incorporeals exists by virtue of the analogy

between corporeals and incorporeals.  Corporeals have only one situs
and by analogy the same ought to apply to incorporeals.   The error in
relying on the doctrine of effectiveness is similar to the one exposed by
Nienaber AJA in Ewing McDonald & Co Ltd v M & M Products Co
1991 (1) SA 252 (A) 259I-260C.  The flaw in the Full Court's approach
can be easily demonstrated with reference to its consequences.  If a
personal right has the ability to exist at more than one place at a time, it
would mean that it could be attached by more than one creditor and sold
to more than one execution purchaser.  And if the charter-party related to
more than one vessel, is the charter-party divisible?  The law would be at
sea if, for instance, the situs of a loan would be wherever the debtor had
money or the situs of the sale of a movable wherever the article sold was.
[13] The ultimate ratio of the Full Court (at 654D)   was that -
“during the period that the vessel spent here they [the rights in personam] were indeed

located here, inasmuch as they constituted intangibles (rights in personam) which were
exigible here as long as the tangible property to which they related (the vessel) was here.”
The argument is circuitous: it assumed that the right was enforceable in
Cape Town in order to find that it was “property” which was within its
area of jurisdiction whereas the ability to enforce the time-charter
depended on its location.  The Court never considered the question why
the rights were exigible in Cape Town during the period of the vessel's
stay.  The reasoning fails to distinguish between the personal right (or
claim) against the debtor and the vessel which is the subject-matter of the
agreement.  Although the Full Court purported to attach personal rights,
it does not appear to have been clear in its own mind whether the ship or
rights in the ship were being attached (e g at 643F-H, 648F, 653I and
654A).  Counsel for DTL was unable to state whether the ship could have
left the harbour after the attachment of the rights in personam and, if not,

why not, since the Full Court had made it clear that personal rights can
exist at more than one place at the same time.  Once again the court
elevated an interest in an object to a right therein.  A simple example will
illustrate the point I am trying to make.  If the rights of a hire-purchase
seller in the agreement are attached, the article sold on hire-purchase is
not attached, even though the seller may still have an interest therein.
Neither are the obligations of the purchaser attached (cf Pistorius Pollak
on Jurisdiction 2nd ed 106 n10).
[14] Without wishing to belabour the point, it appears to me that the
Full Court did not succeed in distinguishing clear authority binding on it.
That raises the question whether this Court should, on policy
considerations, reconsider Grotius's rule.  I think not.  Apart from the
fact that it was not suggested that our law in this regard is out of step with
the international position, it has often been said that our courts should not

easily assume jurisdiction in favour of peregrini against peregrini in
relation to litigation which has no connection to this country. Such an
assumption of jurisdiction may prevent potential peregrine defendants
from trading here and put them to unnecessary inconvenience and
expense in requiring them to litigate here.  There is also no reason why
our limited public and judicial resources should be expended in respect
of disputes which are unconnected to and between persons who have no
relationship with our country.  (Cf the quotations in Siemens especially
at 922A-B and 926A-C.)   These considerations raise the further question
namely whether an applicant for attachment, and not the respondent as
the Full Court held (at 654D-655D), is not invoking the exercise of the
court's discretion to attach.  In other words, should such an applicant not
place facts before the court which show that the court is the convenient
forum for the litigation?   Since this aspect was not argued, it is preferable

to say no more about it.
[15] In the result the appeal must succeed and the order of Foxcroft J
discharging the rule nisi be reinstated.  The following order is made:
(a)
The appeal is upheld with costs, including the costs of two
counsel.
(b)
The order of the Full Court is set aside and for it is substituted an
order that “the appeal is dismissed with costs, including the costs
of two counsel.”
_________________
L T C HARMS
JUDGE OF APPEAL
AGREE:
HEFER JA
GROSSKOPF JA
OLIVIER JA
MELUNSKY AJA