2010 YEAR IN REVIEW


INTRODUCTION

For the firm the 2010 year was no less active than previous years, but of course the year was dominated by the 2010 World Cup which, although positive for the country as a whole, certainly had an effect on productivity during that magic month.

1. MARITIME LITIGATION

Particularly in the first half of the year there appeared to be an increase in the number of security arrests of Capesize vessels which we were involved, which most likely was attributable to the Rule (b) attachment of funds procedure in the United States no longer being available to creditors and of course also due to the downturn in the global economy. This would have resulted in many breaches of charter party agreements where freight rates simply became unaffordable in the new global economic regime.

On the marine insurance front, the highlight of our year was the victory in the Supreme Court of Appeal in the “Mieke” matter where the Appeal Court confirmed the Cape High Court decision which ordered Lloyds of London to pay out to the owner on a hull policy. The case, like many Appeal Court cases is precedent setting and may have an affect on how foreign insurers place cover in South Africa in the future.

A further interesting trend in this year was the number of marine liquidations the firm was involved in, again due to the downturn in the global economy. Many of the liquidation proceedings were on behalf of financial institutions recovering on marine bonds and as such, trying to secure higher ranking on liquidation rather than in admiralty proceedings.

2. ENVIRONMENT AND FISHERIES

In the fisheries sector the focus of the year was on the performance review process which fishing rights holders were obliged to participate in. Many hours were spent reviewing clients’ submissions and advising thereon. At this stage we are yet to receive the results of the review process from the Department of Agriculture, Forestry and Fisheries (“DAFF”). Notwithstanding the downturn in the global and local economy, there were a number of fishing companies who required us to apply for the entry of new vessels into various sectors which were carried out successfully.

2010 was another year in which frustration has grown with regard to Section 21 rights transfer applications with no Section 21 decisions (that we know of) having been made by the State in any of the commercial sectors. An interesting development were the court applications brought by Oceana and Foodcorp respectively. Oceana’s matter was postponed with the State undertaking to reconsider its policy. In the Foodcorp-matter, the Cape High Court found in favour of the State and effectively extended Section 21 to the transfer of shares within a fishing rights holding company. This decision is now under appeal by Foodcorp. As such, Section 21 still remains a grey area for fishing industry participants and continues to make life difficult in any commercial transactions relating to the use and transfer of fishing rights and/or shares in rights holding companies.

Regarding environmental and policy issues, in 2010 our firm has acted for almost all the industry associations dealing with matters such as the regulation of Marine Protected Areas, contesting proposed environmental authorisations for Eskom’s nuclear power plants on the Eastern Cape Coast and making substantial submissions on the latest small scale fisheries policy published by DAFF.

2010 was also another busy year in our environmental / fisheries compliance department with our firm contesting and negotiating the release of vessels and fish stock from seizure, and defending criminal charges against rights holders, skippers and vessel owners alike.

The extent of our involvement in these compliance matters has escalated to such a degree that our specialist compliance attorney, Alistair Downing, has developed a fully comprehensive power point compliance seminar which during 2010 he has presented to fishing companies and industry associations along the entire South African fishing coast line with very positive feedback from clients and other industry participants.

3. COMMERCIAL

On the commercial side, we continue to be a leading firm with regard to the sale of fishing businesses including rights and vessels, particularly in a year where small to medium fishing operations struggled to make ends meet causing a number of forced sales.

Notwithstanding the downturn in the economy, there was still a steady flow of marine bond instructions from financial institutions and other lenders – in many cases as a result of the restructuring of debt, rather than the granting of new loans.

As the fishing and maritime industry is one which seems to constantly evolve, in 2010 our firm was involved in a number of unique and specialised commercial transactions which required lateral thinking solutions and drafting ability.

4. CONCLUSION

In conclusion 2010 has strengthened our firm’s position and ability with 2011 promising to be another exiting year, particularly with regard to the prospect of a strengthening global economy which will hopefully encourage greater and more productive trading. Locally it will be interesting to see how the new Ministers for the Department of Agriculture, Forestry and Fisheries as well as Environmental Affairs implement new policies / legislation and seek to change old ones.

As a firm, we are continually blessed with challenging and interesting matters from a wide range of varied local and foreign clients. We thank all of our clients and service providers for their continued support as we enter our 15th year in practice and wish everyone an enjoyable festive season and a prosperous 2011.

Yours faithfully

PETER EDWARDS

MANAGING DIRECTOR OF DAWSON EDWARDS & ASSOCIATES – MARITIME AND COMMERCIAL ATTORNEYS



GETTING A DECISION!


Matters have arisen recently and historically in the fishing industry where parties have struggled in vain to obtain a decision from the Minister or the responsible Department.  We are often asked by frustrated clients what can be done in situations like these.

Fortunately, our law does cater specifically for situation like these.  Section 6 of the Promotion of Administrative Justice Act (Act No. 3 of 2000) (“PAJA”), sets out the various grounds of judicial review of an administrative action.

Section 1 of PAJA defines administrative action to mean “any decision taken, or any failure to take a decision”.

Section 6(2)(g) of PAJA provides for a High Court review application if “the action consists of a failure to take a decision”.  This ground of review will be present in circumstances where –

  • There is a duty on an administrator to take a decision and the administrator has refused to do so; and
  • The administrator has failed to take a decision within a reasonable period of time (where no time period is prescribed), or has failed to take a decision within the prescribed time period.

Section 8 of PAJA provides for remedies in proceedings for judicial review, and in particular Section 8(2) provides for a court to grant an order that is just and equitable, including orders directing the taking of a decision.

As to what constitutes an unreasonable delay in taking a decision, some guidance can be found in our case law:

  • In Mahambehlala v Member of the Executive Council for Welfare, Eastern Cape Provincial Division and Another, three (and not seven) months was considered to be a reasonable time for a decision to be made by the Minister of Welfare and Population Development about an application for a social disability grant in terms of Section 2(a) of the Social Assistance Act 59 of 1992.  In the cases of Vumazonke v MEC for Social Development, Eastern Cape and the MEC, Department of Welfare, Eastern Cape v Kate, there were found to be similar unreasonable delays in the taking of decisions.
  • Likewise in Mbanga & MEC for Welfare Eastern Cape & Another, three (and not thirty two) months was considered a reasonable period for the Minister of Population and Social Welfare to take a decision on an application for a social grant in terms of the Social Assistance Act 59 of 1992;
  • In Ruyobeza & Another v Minister of Home Affairs & Others, three months was considered to be an unreasonable delay, in the absence of any explanation, for taking a decision (in an application in terms of Section 27 of the Refugees Act 130 of 1998) whether to certify that an applicant refugee will remain a refugee indefinitely;
  • Much earlier and prior to PAJA in Cape Furniture Workers Union v McGregor N.O. a delay of more than three months for the taking of a decision to register a trade union, was found to be unreasonable.

In the context of the Marine Living Resources Act (“MLRA”), other than the 30 day period within which the initial decision maker must send a written report to the Minister where an appeal has been lodged in terms of Section 80, there are no prescribed time limits within which decisions must be taken.  Accordingly, a decision must be taken by the relevant administrator in terms of such legislation within a reasonable time.  What constitutes a reasonable period for taking a decision will depend on the nature of the decision and the circumstances of the particular case.

From a fisheries perspective, in the unreported Cape High Court matter of Glen Duncan v The Minister of Environmental Affairs and Others, the Court considered what constituted an unreasonable delay in the context of an appeal decision to be taken in terms of Section 80 of the MLRA.  The applicant in this matter was an applicant for a long term fishing right in terms of Section 18 of the MLRA.  Following its application being unsuccessful, the applicant lodged an appeal in terms of Section 80 of the MLRA on the 26th April 2006.  By the lodging of such appeal, Regulation 5(3) of the MLRA was triggered which meant that the initial decision maker, in that case, the Chief Director, was obliged to submit a report to the Minister within 30 days of the lodgment of such appeal which was the 26th May 2006.  Despite several letters from the applicant’s attorneys expressing the urgency of the matter and requesting finalisation of the appeal, the Chief Director in breach of the Regulation 5(3) provision, only provided his report to the Minister on the 14th August 2006.  The Minister thereafter decided the applicant’s appeal on the 22nd August 2006.

The court stated that what constitutes an unreasonable delay is dependent on the facts of each particular case.  The court further went on to state that it took into account that the Minister and the Department had to deal with different categories of fishing rights applications at the time which applications had to be dealt with in a certain order, dictated by seasonal considerations and in addition that a great number of applications had to be considered and a substantial number of appeals handled.  In considering how the State was trying to invoke a lack of capacity and/or resources as an explanation for the delay, the court stated that “the extent to which it is free for a public administration to invoke [such an explanation for delay] in the face of the constitutional imperatives binding on it, is highly contentious”.  The court accordingly held that the 4 month period from the lodgment of the appeal until the decision by the Minister was an unreasonable delay in the circumstances of the particular case.  In fact, the court held that in its view, the appeal could reasonably have been disposed of prior to the end of June 2006, i.e. within a 2 month period.

Accordingly, practical examples of delays in decision making under the MLRA which would appear unreasonable would be the following:

  • If no decision had been taken on a Section 18 application for a fishing right where the current rights were about to expire within a period of say 30 days.  In such circumstances there would be insufficient time for the appeal procedure to run its course prior to the expiry of the existing right;
  • In circumstances where a practice has developed for fishing permits and licenses to be issued within a period of 7 days from application, a period of say 2 months from date of application for the permit could be deemed to be unreasonable, particularly where such permit was required in order to operate on a fishing right or operate a vessel and in circumstances where the current permit/license had already expired and the next fishing season had commenced;
  • With regard to other ad hoc decisions in terms of the Act, one would assume, subject to any real urgency, that a period of 6 months from the date of submission of the relevant application or letter requesting a decision would be more than sufficient time for a decision to be taken.

Tips to assist parties applying for or requesting a particular decision would be to ensure that with the initial application and in all subsequent correspondence it is set out why time is of the essence in respect of the decision in question.  Regular follow-up letters, ultimately putting the decision maker to terms would be advisable so that when court proceedings have to be instituted in terms of PAJA, there is a consistent paper trail which paints the applicant as a reasonable requestor for the assistance of the court in directing a decision.

Matters which have previously gone before our courts under the MLRA with regard to unreasonable delay relate to appeal decisions in terms of Section 80 and exemption decisions in terms of Section 81.  Looking into the future, unless there is a sudden turnaround by the Department and the Ministry with regard to considering and taking decisions on Section 21 rights transfer applications, we foresee that parties will have no other option but to bring these “delay applications” to court to get decisions.

It is our view that industry needs to be more assertive when it comes to demanding decisions and that by not enforcing their rights, industry can in fact create apathy within the relevant Department in that the Department starts to assume that it can take as much time as it wants with decisions in the knowledge that industry is not following through with the enforcement of its constitutional and administrative law right to receive a decision within a reasonable period.

P. A. EDWARDS