Meihuizen Freight (Pty) Ltd v Transportes Maritimos de Portugal LDA and Others

Meihuizen Freight (Pty) Ltd acted as ship and cargo agent in South Africa for TMP, a Portuguese shipping company that owned the vessel mv 'TMP Sagittarius'. Maviga UK Limited, an English commodity trader, contracted with TMP for the carriage of white maize from Durban to Lobito, Angola. On 17 July 2002, the vessel developed a severe list after departing from Durban, was refused entry to East London, lost power, and drifted onto rocks near Leach Bay. By 26 July 2002 the vessel broke in two and the cargo was totally lost. Maviga alleged the loss was due to the unseaworthiness of the vessel and TMP's breach of the contract of carriage. Freight payable by Maviga to TMP (US$124,020.00) had been paid to Meihuizen's bank account as TMP's authorized agent to receive payment. Maviga sought to attach and arrest this money in Meihuizen's bank account to found jurisdiction and provide security for its claim against TMP. Nel J granted an ex parte order authorizing the sheriff to attach the 'freight moneys' in Meihuizen's bank account. Nedbank subsequently transferred R1,258,803.00 from Meihuizen's account to an account controlled by the sheriff. Meihuizen applied to have the order set aside. Davis J partially upheld Meihuizen's application, ordering the release of R508,745 (which was owed to Meihuizen by TMP) but confirming the attachment of the balance. Meihuizen appealed.

• Whether money paid to a third party agent (Meihuizen) on behalf of a principal (TMP) in discharge of a debt can be attached as property of the principal to found admiralty jurisdiction
• Whether the court could properly attach money in Meihuizen's bank account rather than TMP's right to claim payment from Meihuizen
• The proper interpretation of 'property' under section 3(2)(b) and section 3(4)(b) read with section 3(5)(d) of the Admiralty Jurisdiction Regulation Act, No 105 of 1983
• Whether money deposited in a bank account retains its character or identity as 'freight moneys' capable of separate attachment
• The distinction between attaching a debt and attaching money representing that debt in a third party's bank account

The appeal was allowed with costs. The orders of Nel J and Davis J were set aside and replaced with an order: (1) authorizing the sheriff to attach TMP's right to the debt owed by Meihuizen in the sum of R750,058.00 arising from freight paid by Maviga; (2) providing that such attachment shall found or confirm jurisdiction over TMP for maritime claims relating to cargo loss; (3) ordering restoration of all money transferred from Meihuizen's bank account to the sheriff's account; (4) granting Maviga leave to sue TMP by edictal citation in Portugal; and (5) ordering Maviga to pay Meihuizen's costs of procuring discharge of Nel J's order insofar as it purported to attach money in Meihuizen's bank account.

Once money is paid to an agent on behalf of a principal in discharge of a debt, the debt is extinguished and the only property of the principal capable of attachment is the incorporeal right (debt) to be paid by the agent, not the actual money in the agent's bank account. Money deposited in a bank account becomes the property of the bank, with the account holder acquiring only a personal right to claim payment. Money is fungible and does not retain separate identity based on its historical source. Under sections 3(2)(b), 3(4)(b) and 3(5)(d) of the Admiralty Jurisdiction Regulation Act, attachment to found or confirm jurisdiction must be of the actual property owned by or in which the defendant has an interest - in this case TMP's debt claim against Meihuizen, not money in Meihuizen's account. Attachment of an unsecured debt does not entitle a creditor to sequester or attach equivalent funds in the debtor's bank account, as this would improperly convert an unsecured debt into a secured one.

The court noted that attachment to found jurisdiction should not be confused with anti-dissipation interdicts which may be granted where a debtor is intent on disposing of or secreting assets to frustrate creditors' claims. However, even such interdicts do not convert unsecured debts into secured debts; they merely preserve assets for the benefit of all creditors. The court also observed that an order for security for potential foreign proceedings should not be granted 'merely for the asking' in the absence of any reason to suppose it is necessary. The reference in the original orders to future freight payments from any source was unnecessarily broad where only freight from Maviga was at issue and had already been paid.

This case establishes important principles regarding attachment of property to found admiralty jurisdiction under the Admiralty Jurisdiction Regulation Act. It clarifies that when payment is made to an agent on behalf of a principal, the property capable of attachment is the principal's personal right (debt) against the agent, not the actual money in the agent's bank account. The judgment reinforces fundamental principles about the nature of money as a fungible and the legal relationship between a bank and account holder. It confirms that attachment cannot be used to convert an unsecured debt into a secured one by sequestering equivalent funds in a third party's account. The case is significant for maritime practitioners in understanding the proper scope and limits of attachment procedures under the Act, and for distinguishing between attachment of debts and attachment of physical property or money.