Unlawful arrest

Michael Tucker, partner at Cape Town-based Fairbridge, Arderne & Lawton, documents a recent constitutional attack on South Africa’s in rem arrest provisions

SOUTH Africa attracted worldwide attention in 1983 when its arrest laws were amended, revamping the sistership arrest concept to provide that the alternative (associated) ship arrested need not be under the same beneficial ownership as the offending ship but need only be under common control, thus effectively countering the anti-arrest policy underlying the one-ship company.

Last month the Cape High Court was seized with an application by a local boat owner whose vessel had been arrested in an action in rem in respect of a claim for contractual damages for an order declaring that certain sections of the 1983 Admiralty Jurisdiction Regulation Act which permit the arrest and further disposal of property belonging to an incola (local) of the court's jurisdiction are in breach of certain constitutional provisions and accordingly unlawful.

The background to the litigation lay in the allocation of commercial fishing rights in terms of the provisions of The Marine Living Resources Act. The allocations effected in terms of that legislation were initially for a single calendar year and were, accordingly, subject to renewed application and allocation each year. This mechanism enabled the tonnage historically awarded to the established role players in the several fisheries to be gradually reduced in favour of new entrants, particularly those from historically disadvantaged communities. Eventually, the first medium-term rights were granted during 2001, for a four-year period.

The applicant was a new entrant who had entered into agreements with two separate marketing entities in order to maximise its return on fish caught. These agreements, perhaps inevitably, gave rise to disputes concerning entitlement to delivery of fish, prices achieved and reciprocal claims for damages. The vessel was arrested for alleged breaches of those agreements.

The owner of the vessel then launched an application seeking an order setting aside the warrants of arrest and writs of summons and for an order directing that the vessel be released from arrest. In its founding affidavit it was alleged that the provisions of the Admiralty Act entitling the claimant to arrest its vessel, insofar as they apply to South African persons resident within the jurisdiction of the court that issued the writ, are at odds with the provisions of the constitution and the purpose and the import of the allocations. Only after the exchange of affidavits in the application did the owner seek to join the Minister of Justice and Constitutional Development in respect of its constitutional challenge to these legislative provisions. Leave was granted to the vessel owner to join the minister, and to the Maritime Law Association of South Africa to intervene as amicus curiae.

The owner alleged that various provisions of South Africa's admiralty regime breached its constitutional rights as contained in Sections 9(1), 10, 25(1) and 34 of the Constitution. These provisions read as follows:-

"9(1) Everyone is equal before the law and has the right to equal protection and benefit of the law."
"10. Everyone has inherent dignity and the right to have their dignity respected and protected."
"25(1) No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property."
"34 Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum."

As to the attack based on Section 25(1), it was submitted by the owner, with reference to an earlier Constitutional Court decision, that to the extent that the impugned provisions authorise a restraint upon ownership, and which therefore constitutes an interference with the use, enjoyment and exploitation of property, an in rem arrest is tantamount to a deprivation of property as envisaged by Section 25.

As to its arbitrariness, the owner referred to an earlier decision of the Constitutional Court in which it was concluded that a deprivation of property is arbitrary as meant by Section 25 when the "law" referred to in Section 25 does not provide sufficient reason for the particular deprivation in question or is procedurally unfair. It was contended that the purpose of an action in rem, achieved by the deprivation, is to obtain the appearance of the defendant in court. The defendant has to lodge security in order to have the res freed from arrest. The procedure is thus a means of giving the plaintiff in an admiralty action in rem security in circumstances where it would not otherwise be afforded similar protection. Moreover, the deprivation could result in loss of ownership of the vessel, thereby negatively impacting on the property rights of the vessel owner without regard to the extent or validity of the claim which resulted in the arrest.

It was also suggested that in some instances arrests are invoked in circumstances where there is no proportionality between the interests of the plaintiff seeking to protect its rights by arresting the vessel and the hardship suffered by the vessel owner as a result of the arrest. The infringement, so it was contended, is exacerbated by the absence of any mechanism or judicial discretion to prevent injustices and the absence of a speedy procedural hearing which allows the respective interests of the vessel owner and creditor to be balanced through the exercise of a judicial discretion prior to the arrest of a vessel in a manner which is procedurally fair.

Fortunately, or not, as the case may be, these submissions were never adjudicated upon as the Maritime Law Association had raised a preliminary point to the effect that the constitutional challenge was moot as the underlying claim for contractual damages between the parties to the original application had been settled. (That notwithstanding, the applicant had persisted in seeking declarations of constitutional invalidity in respect of the legislative and subordinate legislative provisions which had been assailed by it.) However, at the hearing, the judge only heard argument on the point raised by the Maritime Law Association and, notwithstanding a spirited attempt by counsel for the vessel owner, upheld the Maritime Law Association's preliminary submission and dismissed the application on this basis.

Interestingly, in the US, admiralty procedures have been subject to constitutional challenge on two separate but related due process grounds. Neither kind of constitutional challenge was apparently successful.

The due process clause of the Fifth Amendment of the United States Constitution forbids the taking of life, liberty or property without due process of law. As appears from an affidavit filed in the Cape High Court proceedings on behalf of the Minister, the first ground of constitutional challenge was that the mere presence of a ship or other property does not justify the assertion of the jurisdiction by a court when the owner of the property is not resident in the jurisdiction. However, the US courts have apparently consistently held that an assertion of admiralty jurisdiction based solely on the presence of property within the jurisdiction does not violate the Fifth Amendment's guarantee of due process.

The second ground of constitutional challenge was that the Supplemental Admiralty Rules violated the Fifth Amendment's due process guarantee because they permit a ship to be arrested or attached without prior notice to the owner and others interested in the vessel, and without giving the owner an opportunity to be heard. A series of Supreme Court decisions in non-admiralty cases establishes that pre-judgment seizure of property violates the constitutional guarantee of due process unless the property owner is given notice and a meaningful opportunity to be heard before seizure unless "exigent circumstances" justify an ex parte seizure.

However, when the constitutional validity of the Supplemental Admiralty Rules was challenged on these grounds, US courts held either that maritime law was historically so different from common law that the common law principles were irrelevant, or that the special circumstances attendant on ship arrests amounted to exigent circumstances so as to warrant jettisoning the ordinary constitutional safeguards in every case.

Apparently the notice provisions of the Supplemental Admiralty Rules now require examination of the request for seizure by a judicial officer, except in exigent circumstances, and also a hearing promptly after the seizure.

It is probably only a matter of time before the South African maritime fraternity faces another and possibly better formulated attack on the constitutionality of the in rem provisions, and possibly also on the popular security arrest provisions as they appear in the Admiralty Jurisdiction Regulation Act.

Until then, it's business as usual.