John has a big problem. He is living in a fully furnished flat that he is renting. The furniture in the flat is not his but belongs to his landlord. Some time ago, John made a series of bad choices that led to a few judgments being granted against him. John calls his attorney in a panic, he says that the Sheriff visited him at home and made a list of all the furniture in the flat and advised him that the goods are being attached due to money owed by him. He needs advice on how to handle this situation, especially since the furniture that the sheriff has attached does not belong to him.
What is a warrant of execution?
A warrant of execution is issued at Court after the judgment was granted in favor of a Plaintiff. The judgment usually is for a specific amount in money and the Plaintiff is entitled to issue a warrant which authorizes the sheriff to demand payment of the judgment amount, costs and interest from the person against whom the judgment was granted.
The sheriff is specifically authorized to demand from the debtor the amount as per the warrant, and if the debtor cannot pay the amount in cash, the sheriff if authorized to take any movable assets that he or she finds on the premises, into attachment. If you are unsure what assets the sheriff may attach, read this article What Can The Sheriff Attach? • Vermeulen Attorneys (vermeulenlaw.co.za). This literally means that the sheriff will compile a list of all attachable goods on the premises and thereafter warn the debtor that these assets are under judicial attachment and may not be removed from the premises.
What happens after the attachment?
Once goods are judicially attached, the sheriff reports to the instructing attorney and presents to them a list of goods under attachment. The instructing attorney may now give the sheriff instruction to return to the debtor’s premises and to remove the goods placed under attachment. After the removal of the goods from the debtor’s premises, the attorney for the creditor will make the necessary arrangements for a sale in execution to be held in order that the goods under attachment may be sold in execution. The funds raised from the sale of these movable assets are then paid to the judgment creditor in satisfaction with the judgment debt.
It is important to note that, if the money raised in such a sale in execution is insufficient to cover the judgment debt, interest and cost, further execution steps may be taken by the judgment creditor.
What should John do?
Once the goods are placed under judicial attachment, but before the goods are sold in execution, it is imperative that the owner of the goods should dispute the attachment on the grounds that the goods so attached does not belong to John.
These proceedings are referred to as Interpleader Proceedings. Interpleader Proceedings are governed by Section 69 of the Magistrate’s Court Act, 32 of 1944 read with Ruel 44 of the Magistrate’s Court Rules; and Rule 58 of the Supreme Court Act,59 of 1959, depending whether the matter is in the Magistrate’s of High Court.
These rules and acts give the sheriff the right to bring an application before Court in which he or she asks the Court to determine the true ownership of the goods taken into judicial attachment.
Prior to Interpleader Proceedings being launched, John may an attempt to prevent judicial interference by obtaining an affidavit from the owner of the goods that have been placed under attachment, in which affidavit the owner confirms that he or she is the true owner of the goods listed, and that the owner may present proof of such ownership of the goods. The proof may take various forms, but proofs of purchase is best. Other forms of proof may be submitted however if no proofs of purchase is available. The Court will in each instance determine on the facts and documents presented who it deems the true owner of the goods.
In our case study it may be good to present the lease agreement in which John contracts with his landlord and the lease evidences which assets/ furniture is included in the lease.
Once this affidavit has been presented to the sheriff, the sheriff will in turn present it to the attorneys for the judgment creditor. In many instances, it is evident from the affidavit that the goods do indeed belong to a third party and the judgment creditor will request the sheriff to release the goods from attachment and the need to refer the matter to Court falls away.
Should the judgment creditor however not be satisfied on paper that the goods to indeed belong to the third-party claimant, the sheriff should refer the matter to Court to determine who the true owner of the goods are.
Here is a handy article on the legislative issues regarding Interpleader Proceedings Interpleader Matters | South African Board for Sheriffs
John is concerned that his landlord will now incur costs in the determination of the true ownership of the goods by Interpleader Proceedings and that the goods may be sold in a sale of execution before the Court has determined the true ownership.
In answer to these questions it must be noted that, the costs of the Interpleader Proceedings will be decided by the Court as it deems fit. The general principle is that the costs will be allowed to the successful party. This means that failure to admit a claim by a third party which is later allowed by the Court, may carry a cost order against the execution creditor. The costs issue is however left open by the rules and the Court will award costs on a basis if fairness as it deems fit.
in further answer to the above questions, it is noteworthy that Interpleader Proceedings place a stay on the execution of a warrant and further proceedings. This literally means that the matter will be stayed until the Interpleader has been dealt with and the execution creditor cannot merely issue a further warrant.
It is imperative that John acts quickly in informing his landlord of the issue he is facing and thereafter visits an attorney to obtain the right assistance to uplift the attachment on his landlord’s movable assets. Vermeulen Attorneys – Contact Us – Divorce, Litigation, Collections & Labour Lawyers (vermeulenlaw.co.za) It is always best to obtain legal advice sooner rather than later when faced with unknow legal issues, most especially in instances such as a warrant where time is of the essence.