Introduction
I was recently asked by a reader to explain in very simple terms what interpleader proceedings in the Magistrate’s Court are. I gladly do so hereunder.
Definition of interpleader proceedings
These are court proceedings where a third party who owns property that has been attached or removed by the messenger of court pending sale in execution institutes the proceedings to safeguard his or her property from being sold in execution of a court judgment.
Let me explain what usually leads to the need for interpleader proceedings. When a plaintiff or someone suing a debtor gets a court judgment against the debtor he or she becomes the judgment debtor and the defendant who is being sued becomes the judgment debtor. For a matter being handled through the Magistrate’s Court the judgment creditor issues a warrant of execution and instructs the Messenger of Court to attach and remove the property of the judgment debtor. The property can then be sold in execution, usually through a public auction. The judgment creditor is then paid from the proceeds.
It may very often happen that the property attached or removed by the Messenger of Court, on instruction of the judgment creditor, may not belong to the judgment debtor. That property may belong to a third party. In the case of spouses, the property may even belong to a spouse who has nothing to do with the judgment.
Interpleader proceedings then allow the third party who owns the property to stop his or her property from being attached, removed or sold in execution. The third party who is called a judgment claimant will claim that his or her property was wrongly attached or removed. This is done in terms of the Magistrate Courts (Civil) Rules (2018), currently Order 27.
Interpleader proceedings
The important stages can be summarised as follows:
- Interpleader affidavit.
- Messenger of court writes to parties.
- Interpleader summons.
- Notice of opposition by judgment creditor.
- Heads of arguments by judgment creditor and judgment claimant.
- Court appearance.
- Decision of the court.
Interpleader affidavit
The aggrieved third party seeks the services of a legal practitioner. The third party will depose to an interpleader affidavit claiming that the property is his or hers and was wrong attached or removed and will include the necessary documentary evidence to prove ownership. The legal practitioner will then write to the messenger of court requesting the messenger to issue out and serve the interpleader affidavit on the judgment creditor and judgment debtor.
Messenger of court writes to the parties
The messenger of court then writes to the parties, attaching the letter from the judgment claimant’s lawyers and the interpleader affidavit. The messenger will ask the judgment creditor if the property must be released or the messenger should proceed with interpleader proceedings.
Interpleader summons
If the judgment creditor replies to the effect that the property should not be released then the messenger will issue interpleader summons which are then served on the parties i.e. the judgment creditor and judgment debtor. The interpleader summons usually have a court appearance date.
Notice of opposition
The judgment creditor will then prepare a notice of opposition to oppose the interpleader affidavit filed by the judgment claimant. Essentially the judgment creditor will be opposing that the judgment claimant owns the property in question. It is common to allege collusion between the judgment debtor and the judgment claimant.
Heads of argument
There is usually limited time such that when parties meet in Court for the first time it will be for purposes of agreeing on time frames for filing heads of arguments and possible court appearance. The notice of opposition serves to address the facts of the matter whereas in the heads of arguments the law which applies to the dispute and the facts is argued. In other words the laws is applied to the facts.
Court appearance
Parties may agree whether to appear in the Court again or the Court will decide the matter on the papers.
Conclusion
Interpleader proceedings are used widely to protect property which has been wrongly attached or removed. However at times the process may be abused by judgment debtors who will be trying to frustrate attachment, removal or execution. That is when collusion between the judgment debtor and the judgment claimant is alleged.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), ACCA (Business Valuations) MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, commercial arbitrator, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He was recently appointed to sit on the Council of Estate Administrators in Zimbabwe. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.
