THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case no:  369/03
In the matter between:
SWIRE PACIFIC OFFSHORE SERVICES (PTE) LTD    Appellant
and
MV ‘ROXANA BANK’

First Respondent
THE CARGO PRESENTLY ON BOARD THE
MV ‘ROXANA BANK’
Second Respondent
_____________________________________________________
Coram
:
SCOTT, FARLAM, NUGENT, CONRADIE
et  CLOETE JJA
Date of Hearing :
20 AUGUST 2004
Date of delivery :
16 SEPTEMBER 2004
Summary:
Salvage – no closed list of categories of persons entitled to
salvage reward – persons entitled to reward in respect of services
rendered by a salving vessel not limited to the owner or demise
charterer.
___________________________________________________
JUDGMENT
_____________________________________________________
SCOTT JA/…

SCOTT JA:
[1] On the morning of 25 January 2002 the MV Roxana Bank
experienced mechanical problems with her main engine while lying
at anchor off the town of Mossel Bay on the east coast of South
Africa. The prevailing weather conditions caused her to drag her
anchor and drift in a north-westerly direction close to a submarine
oil pipeline which runs from a single buoy mooring to the oil
terminal at Mossel Bay. A pilot who had boarded the Roxana Bank
requested assistance from the MV Pacific Lance which was
anchored nearby. In response, the latter took the Roxana Bank
under tow out to sea. Arising from this incident, the appellant
subsequently commenced proceedings in rem in the Cape High
Court against the Roxana Bank, as first defendant, and against her
cargo, as second defendant, (now the respondents) in which it
claimed a salvage reward totalling R1 000 000 together with
interest and costs. The claim is a maritime claim within the
meaning of para (k) in the definition of ‘maritime claim’ in s 1(1) of
the Admiralty Jurisdiction Regulation Act 105 of 1983.
[2] The appellant alleged in its particulars of claim that it was
‘the operator’ of the  Pacific Lance and that her master and crew in
rendering the salvage services had acted in the course and scope

of their employment with the appellant or ‘alternatively in terms of
their duties, having been seconded by Swire Pacific Ship
Management Ltd to the [appellant].’ The evidence adduced by the
appellant at the trial revealed that while it had effective control over
the disposition of the vessel, it was neither the owner nor the
charterer of the vessel in terms of a demise charterparty; nor was it
the employer of her master and crew. At the end of the appellant’s
case the respondents applied for and were granted absolution
from the instance by the court a quo on the ground that the
appellant had failed to make out a prima facie case that it had the
necessary locus standi to claim a salvage reward based on the
services rendered by the Pacific Lance. The appeal is with the
leave of the court a quo.
[3] The respondents concede that the evidence adduced at the
trial, although disputed, was sufficient to establish prima facie that
the services rendered by the Pacific Lance were such as to render
the owners of the Roxana Bank liable for the payment of a salvage
reward. For the purpose of the appeal, therefore, this may be
assumed. The question in issue is whether the evidence adduced
was of such a nature as to establish a relationship between the

appellant and the Pacific Lance which in law would justify a
salvage award being made to the appellant.
[4] The appellant is a member of a group of companies known
as the Swire group, as are the companies that respectively own
the Pacific Lance and employ her master and crew. At the head of
the group is Swire Pacific Ltd, a public company registered in
Hong Kong. The group is divided into five divisions. One is the
shipping division which comprises about six companies. What was
referred to as the ‘holding company’ of this division is a Bermudan
company, Swire Pacific Offshore Holdings Ltd. (This company is
itself a wholly owned subsidiary of another Bermudan company
which in turn is a wholly owned subsidiary of Swire Pacific Ltd of
Hong Kong.) One of its subsidiaries is Swire Pacific Offshore Ltd,
also of Bermuda, which in turn holds all the shares in the
appellant. The latter is registered in Singapore. The Pacific Lance
is owned by a Panamanian registered company, Swire Marine
Corporation Ltd, which is another wholly owned subsidiary of Swire
Pacific Offshore Holdings Ltd. Her master and crew are, or were at
the relevant time, employed by a Hong Kong company, Swire
Pacific Ship Management Ltd, which is a wholly owned subsidiary
of the company at the head of the group, Swire Pacific Ltd.

[5] The appellant’s business is the provision of marine services
to the offshore industry. This involves providing support for
offshore oil rigs, oil platforms, drilling barges and the like. For this
purpose the appellant employs a number of ships, one of which is
the Pacific Lance. Mr Brian Townsley, who is a director of the
appellant as well as other companies in the shipping division of the
group, testified that the appellant is, as he put it, ‘the head office’ of
the shipping division of the group and carries on its business with
the support of other companies in that division. He explained that
Swire Marine Corporation Ltd was established to do no more than
own the Pacific Lance and other ships, and that it had no
employees in Panama where it was registered. In summary, his
evidence was to the effect that although there was no written
agreement between the appellant and Swire Marine Corporation
Ltd regarding the employment of the Pacific Lance, the former,
with the concurrence of the latter, effectively controlled the
disposition of the vessel in every respect as if it were the owner.
[6] At the time the salvage services were rendered, the Pacific
Lance was under charter to Soekor E and P (Pty) Ltd (‘Soekor’).
The agreement, called a ‘service agreement’, was concluded
between the appellant and Soekor and commenced in September

1999. Its terms largely reflect the relationship between the vessel
and the appellant described by Townsley. The appellant is styled
‘the owner’. The vessel is defined as meaning ‘the MV Pacific
Lance  owned,  chartered  or  leased  by  [the]  owner  [ie
appellant] . . .’.  The hire is payable to the appellant as ‘owner’,
who is to deliver the vessel at Mossel Bay Harbour on the
commencement date and provide a master and crew ‘in numbers
and classifications as set out in [an] appendix’. There are detailed
provisions relating to the suspension of ‘the services’ by the
‘owners’ for the purpose of engaging in a salvage operation and for
the sharing with Soekor of any salvage reward paid to the ‘owners’
after deducting various specified expenses. Finally, the ‘owners’
are obliged to procure at their own cost various insurances for the
duration of the agreement, including ‘workmen’s compensation
insurance’, ‘hull and machinery insurance for the full value of the
vessel’, ‘P & I risks as covered by a full entry of the vessel in a
recognised P & I club . . .’ and ‘insurance to the full value of the
bunkers on board the vessel’.
[7] As indicated above, the master and crew of the Pacific Lance
are employed not by the company that owns the vessel, but by
Swire Pacific Ship Management Ltd. According to Townsley, their

wages are paid by the latter with funds transferred to it by the
appellant expressly for that purpose. Furthermore, the master acts
on the instructions of the appellant, not Swire Pacific Ship
Management Ltd. Townsley explained that these were conveyed
on a day to day basis to the vessel via regional ‘out ports’ which
had one or two managers. Similarly, when instructions were
sought by the master they were obtained from the appellant by the
same means. The evidence of the master, Captain Stephen
Holden, was to the same effect. It appears that in 1993 Swire
Pacific Offshore Ltd, being the company that owns the shares in
the appellant, entered into a written agreement with Swire Pacific
Ship Management Ltd in terms of which the latter undertook to
recruit and provide the former with crew for the vessels entrusted
to it by their owners. Townsley explained, however, that by reason
of a subsequent restructuring of the group’s activities this
agreement no longer correctly reflected the position as Swire
Pacific Offshore Ltd had ceased to be actively involved and Swire
Pacific Ship Management Ltd reported directly to the appellant.
[8] In the court a quo Davis J correctly held that the law to be
applied was the English law as it existed on 1 November 1983. A
South African court of admiralty immediately before the

commencement of the Admiralty Jurisdiction Regulation Act 105 of
1983 (‘the Act’) would have had jurisdiction to entertain a claim for
salvage by virtue of s 6 of the Admiralty Court Act of 1840 (3 & 4
Vict.Cap.65). Accordingly, and in terms of s 6(1) of the Act, the law
to be applied is the law which ‘the High Court of Justice of the
United Kingdom’ would have applied on the date on which the Act
commenced. (The reference to the ‘High Court of Justice’ must be
understood as a reference to the Supreme Court of England and
Wales. See MV Stella Tingas: Transnet Ltd v Owners of the MV
Stella Tingas and another 2003 (2) SA 473 (SCA) at 479G-H.)
However, by reason of s 6(2) of the Act, the application of that law
is subject to the provisions of any law of the Republic applicable to
salvage. It follows that in the event of a conflict between English
law and the Wrecks and Salvage Act 94 of 1996, incorporating as
it does the International Convention on Salvage 1989, the latter
must prevail. As far as the present case is concerned, there would
appear to be no such conflict. In this regard it is to be observed
that the Pacific Lance is not a South African ship within the
meaning of the definition of such a ship in s 1 of the Wrecks and
Salvage Act.

[9] Having held English law to be applicable, the learned judge
appears to have accepted or proceeded on the assumption that
there was a numerus clausus of categories of persons entitled to
recover a salvage reward. He concluded his discussion on the
issue thus:
‘To summarise: the position in terms of English law (which is to be applied in
this case as South African law) is that the master, crew, owner or demise
charterer represent the categories of persons to whom a salvage reward may
be due.’
Thereafter, in response to counsel’s invitation to do so, he
considered whether there was any justification for lifting the
corporate veil to enable the appellant ‘to locate [itself] within the
existing categories by use of a peep through the corporate
structure of the Swire Group’ and decided there was none. The
judge was also not prepared on the facts of the case ‘to extend’
the categories of persons entitled to a salvage reward to ‘an
operator’. He accordingly granted absolution from the instance.
[10] In this court counsel were in agreement that there was no
closed list of categories of persons entitled to claim a salvage
reward. This is undoubtedly so. Brice on the Maritime Law of
Salvage 3 ed at para 1-177 says this:

‘There is no arbitrary limitation upon the class of persons or bodies who are
entitled to recover salvage remuneration provided, however, that the same
are recognised in law as volunteers and they render salvage services.’
In The Sava Star [1995] 2 Lloyds Rep 134 (Adm Ct) Mr Justice
Clarke, after quoting with approval the above passage (in the
second edition at para 1-154), concluded at 141:
‘There are no rigid categories of salvor. They include any volunteer who
renders services of a salvage nature.’
Although ‘salvor’ is not defined in the Salvage Convention 1989 it
is clear that the above approach is consistent with its terms. See
Kennedy and Rose Law of Salvage 6 ed para 444. In the present
case, however, we are concerned not with a situation where the
salvor personally rendered the salvage services, but with a
situation where a ship was the means by which those services
were rendered. The question that arises is whether in such
circumstances a person other than the owner or demise charterer
can become entitled to a salvage reward.
[11] It is well established that the owner of a salving vessel is
entitled to a salvage reward due in respect of the services
rendered by the vessel. This is so even if the vessel is subject to a
time charter. It is the owner who has the power to control the
disposition of the ship and whose property or interests are placed

at risk. But the element of risk, if a requirement in the past, is no
longer one; it is relevant only to the quantum of the claim. See
Kennedy and Rose paras 454-458.
[12] It has also long been recognised that where the salving
vessel is subject to a charter amounting to a demise, it is the
charterer who is entitled to the reward. Such a charterer, it is said,
becomes pro hac vice the owner for the duration of the charter. In
Elliot Steam Tug Company Ltd v Admiralty Commissioners; Page
and others v Admiralty Commissioners  [1921] 1 AC 137 the
House of Lords accepted that the demise charterer was so
entitled, but without an in depth analysis and seemingly on no
more than the assumption of a rule that it is the demise charterer
who acquires the right to the salvage reward. Kennedy and Rose
contend that what really underlies the entitlement of the demise
charterer to the reward is the power that he (or she) has to direct
the salving vessel to render the services and to bear the risk of her
loss. They say at para 473:
‘Demise charterparties are commonly regarded as putting the charterer in the
position of the owner for the duration of the charterparty, so that he
automatically assumes both the liabilities and rights of the owner. In fact, of
course, there is merely a transfer of possession and what really provides the
charterer with the right to salvage is the power given to him (additionally to the

rights he would normally have under the employment and indemnity clause in
a time charterparty) to order the ship to provide salvage services and to bear
the risk of any loss to the vessel – for which he must indemnify the owner –
during salvage. He has the right to decide on the employment of the ship, so
he is able to contribute its services, and it is he who bears the risk.’
They add at para 474:
'It is for those reasons, and not simply because he acquires the appearance of
ownership, that the demise charterer can claim salvage. The owner foregoes
the services of and risk to the vessel during the demise and can be said to
contribute nothing to salvage.’
This analysis strikes me as correct and I readily endorse it. The
question is whether there is any reason why some person other
than the owner or demise charterer who similarly has the power to
provide the services of a salving vessel and who will bear the loss
of the vessel (or possibly other financial loss) should not be
entitled to a salvage reward. In principle, once one accepts, as I
do, that there is no closed list of categories of persons who may
claim salvage, I can think of no such reason; nor was counsel able
to advance one in argument. In my judgment, therefore, it must be
accepted that such a person is entitled to a salvage reward.
[13] To return to the facts of the present case, what is apparent
from Townsley’s evidence is that the power to control the

disposition of the vessel was vested in the appellant. Although the
employment contracts of the master and crew were concluded with
Swire Pacific Ship Management Ltd, the inference is that the
appellant was pro hac vice their employer. It was the appellant
who instructed the master and it was the appellant to whom the
master turned when he sought instructions. In this way the
appellant effectively exercised the day to day control over the
vessel. Townsley’s evidence that the appellant controlled the
disposition of the vessel in every respect is moreover supported by
the existence of the Soekor agreement which the appellant
entered into in its own name as ‘owner, charterer or lessee’ of the
Pacific Lance.  Counsel for the respondent submitted that the
inference arising from the evidence was that the appellant was no
more than an agent and that it had entered into the Soekor
agreement as agent for and on behalf of an undisclosed principal,
being Swire Pacific Ship Management Ltd. Such an inference is
not only inconsistent with the terms of the Soekor agreement, it is
also not in accord with the direct evidence of Townsley; nor was it
put to him in cross-examination. A more likely inference is that
there existed, at the least, a tacit agreement between the owner
and the appellant to the effect that the latter was to possess and
exercise full control over the disposition of the Pacific Lance.

Indeed, it is clear from the evidence that the appellant’s
possession and control of the vessel was with the concurrence of
the owner. The appellant’s counsel sought to categorize the
agreement as being ‘akin to a demise charterparty’, but no
purpose is served by attempting to give it a tag.
[14] As far as the element of risk is concerned, it is apparent even
from the terms of the Soekor agreement that the appellant would
suffer financial loss through a failure to perform in the event of the
vessel’s being lost or damaged in the course of a salvage
operation. But apart from that, the appellant’s possession of the
vessel of another gives rise, in the absence of evidence to the
contrary, to the natural inference that the appellant will ultimately
be obliged to return the vessel to the owner or indemnify the owner
for its loss. Some support for this is to be found in the appellant’s
undertaking in the Soekor agreement to procure amongst others
hull and machinery insurance to the full value of the vessel.
[15] In order to survive absolution, the appellant was obliged, as
far as inferences are concerned, to show no more than that the
inference on which it relied was one which was reasonable. See
Gordon Lloyd Page & Associates v Rivera and another 2001 (1)
SA 88 (SCA) at 92H-I.  In my view the appellant succeeded in the

circumstances in establishing prima facie that it bore the risk of the
loss of the vessel. It follows from what I have said above that on
these facts the relationship between the appellant and Pacific
Lance was such as to entitle the appellant in law to a salvage
reward in respect of the services rendered by the vessel.
[16] It was contended on behalf of the respondent that the case
the appellant ultimately sought to establish was not the case made
out in its particulars of claim and that the appellant was therefore
precluded from relying on the former. The case pleaded, said
counsel, was that the appellant was entitled to a salvage reward as
employer of the master and crew who were acting in the course
and scope of their employment with the appellant or had been
seconded to it, while the case sought to be established was that
the appellant was effectively in control of the disposition of the
vessel which in turn was the means by which the salvage was
effected. The distinction between the two is, of course, a valid one,
but I do not think that the particulars of claim must be construed as
precluding the latter. It is clear from the allegations made in the
particulars of claim that the appellant’s case was always that it was
the services rendered by the vessel that effected the salvage and
not simply the services of the master and crew acting in the course

and scope of their employment. But the allegation that they were
so employed or were seconded to the appellant makes it clear that
the appellant was in a position to control the disposition of the
salving vessel. The argument, therefore, cannot succeed.
[17] It follows that in my view the appeal must be upheld.
The following order is made:
(1)
The appeal is upheld with costs, such costs to include
the  costs  occasioned  by  the  employment  of  two
counsel;
(2)
The order of the court a quo granting absolution from
the   instance   is   set    aside  and  the  following  is
substituted in its place –
‘The  application  for absolution from the instance is
dismissed with costs including the costs occasioned by
the employment of two counsel.’
D G SCOTT
JUDGE OF APPEAL
CONCUR:
FARLAM
J
NUGENT     J
CONRADIE J
CLOETE      J