The "Forum Victory" - Supreme Court (Vivier, Harms, Scott, Streicher and Cameron JJA) - 23 March 2001

Admiralty practice - Priorities - Section 11(4)(c) of Admiralty Jurisdiction Regulation Act 105 of 1983 - When does a claim arise within the meaning of the section?

The vessel Forum Victory was arrested and sold pursuant to a court order. A fund was constituted and a referee appointed to investigate claims. The referee lodged a report containing his recommendations as to the ranking of claims in terms of section 11 of the Admiralty Jurisdiction Regulation Act 105 of 1983 (“the Act”). A rule nisi was issued calling on interested parties to show cause why the referee’s recommendations should not be confirmed. The vessel’s mortgagees objected on the ground inter alia that the claims of various creditors, including those of the respondents, whose claims would otherwise fall within the ambit of section 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. The mortgagees said that the respondent’s claims were not claims within the meaning of that section and had to be ranked at the back of the queue and after the mortgagee’s claim.