Marigold Hotel Developer (Pty) Ltd v Acting Deputy Sheriff Windhoek and another (SA 51-2021) NASC [2023] (3 November 2023)
Facts
Litigation background
The second respondent in this appeal (the first claimant in the interpleader proceedings) as the plaintiff (Ingo Hasse) instituted an action against a firm cited as Marigold Hotels. In that action, the plaintiff claimed N$1 102 792,83 against Marigold Hotels, in respect of the balance owing for the sale and installation of goods. Attached to the particulars of claim was a detailed proposal addressed to the Marigold Hotel Project, and several delivery notes in respect of equipment addressed to Marigold Hotel and signed for without qualification. The plaintiff’s summons was accompanied by a notice in terms of rule 42(5), (6), and (7) of the High Court Rules, calling upon the defendant, thus cited as a firm called Marigold Hotels, to provide particulars such as the full name and residential address of the proprietor or partners at the relevant date, as contemplated by rule 42(5). The notice also required that the defendant must, concurrently with its response, serve the notice and summons on the persons referred to in that response, as is contemplated by rule 42(7).
In response to the rule 42(5) notice, the defendant’s erstwhile legal practitioner attached company registration documents of Marigold Hotel Developer (Pty) Ltd, the appellant in this appeal and the second claimant in the interpleader proceedings. The directors of the appellant were identified in the notice as Qiaoxia Wu and Songgen Huang, and were provided with a notice (as contemplated in Form 15) by the defendant’s erstwhile legal practitioner under rule 42(7).
The defendant entered an appearance to defend, and the plaintiff applied for summary judgment. The papers in the summary judgment proceedings have not been provided. Summary judgment was granted in the amount claimed. The defendant was represented in those summary judgment proceedings.
It is also apparent from the record that the plaintiff thereafter proceeded to execute his judgment. The deputy sheriff attached movable goods under a writ of execution, which included the goods sold and delivered, as referred to in the particulars of claim. Following the attachment, the appellant (Marigold Hotel Developer (Pty) Ltd) claimed ownership of the attached goods.
The interpleader proceedings
Following the claim of ownership, the deputy sheriff, as applicant, brought an interpleader application under rule 113 of the Rules of the High Court, citing the plaintiff as the first claimant and the appellant as the second claimant.
The interpleader proceedings were heard on 23 April and 11 May 2021. Neither party applied to lead evidence, and merely argued their cases on the papers filed of record. The judgment was delivered on 11 June 2023. The High Court found that the appellant as the second claimant had not established its claim to the attached goods, pointing out that no sufficient or satisfactory evidence had been placed before the court to prove its claim to the goods.
The High Court ruled that the appellant and any person claiming under it were barred as against the deputy sheriff and the plaintiff from claiming the attached goods. The appellant was also directed to pay the other parties’ costs.
The appeal was lodged against that judgment.
Discussion
SMUTS JA (SHIVUTE CJ and FRANK AJA concurring) considered the appeal as follows:
Nature of interpleader proceeding
‘[23] Interpleader proceedings, as provided for in rule 113 of the Rules of the High Court, are the means to adjudicate rival claims to property which is attached in the course of executing a judgment, as occurred in this instance. It is clear from rule 113 that it contemplates an expeditious procedure to determine rival claims to property which has been attached in execution.
[24] Given the way in which execution occurs, interpleader proceedings are invariably brought by the deputy sheriff as applicant to obtain a ruling from the court concerning the rival claims made upon attached goods. The applicant’s interpleader notice in accordance with rule 113 calls upon the rival parties to file particulars of claim for their respective claims to the attached goods, warning that the failure to file same or to appear may result in a claimant being barred.
[25] Claimants are required to set out their particulars of their claim to the goods by providing the material facts which are the basis of their claim and set out a valid cause of action. The court’s powers in dealing with interpleader proceedings are set out in rule 113(10).
The interpleader proceedings before the High Court
[26] In this instance, neither party applied to lead evidence and merely argued their respective cases on the papers filed of record. The plaintiff as judgment creditor set out the litigation history and attached the particulars of claim and pointed out that the attached goods were the very goods which were sold and in respect of which the outstanding balance had been claimed in the action.
[27] The appellant merely asserted ownership of the goods without placing any supporting averments or documentation in support of that claim, asserting that the defendant against whom summary judgment was granted did not have legal personality.
[28] The High Court has in respect of interpleader proceedings made it clear in Deputy Sheriff of Tsumeb v Koch & another that a claimant is required to set out the material facts upon which its claim to the goods is based.
[29] In the absence of any request for the leading of evidence, the court made its determination based upon the particulars of claim and papers filed. It was entitled to do so in the absence of the parties seeking to call witnesses.
[30] The appellant, which was called upon to put forward facts in its particulars of claim in support of its claim to the goods, elected not to seek to lead evidence and cannot subsequently complain when it failed to set out any factual matter in its particulars of claim for its bold and unsupported assertion of ownership.
[31] The court was entitled to reject its unsupported claim in the circumstances. For this reason alone, the appeal falls to be dismissed.
[32] There is however a more fundamental reason why the appeal and the appellant’s invocation of interpleader proceedings must fail. It is evident from the uncontested facts which served before the court that the appellant had absolutely no basis to invoke interpleader proceedings and that its attempt to do so was contrived and completely without foundation.
[33] The particulars of claim in the action after all cited a firm, Marigold Hotels, as defendant, accompanied by a notice in terms of rule 42 of the rules of the High Court. That rule envisages and deals with the position when proceedings are instituted against firms. The rule defines a firm to include a business carried on by a body corporate. It expressly provides in rule 42(2) that a firm may be sued in its name.
[35] In this instance the plaintiff sued the firm Marigold Hotels, as is permitted by rule 42(2), and delivered a notice under rule 42(5) to that defendant calling for particulars of the proprietor.
[36] In response to the plaintiff’s notice in terms of rule 42(5), (6), and (7), the defendant’s legal practitioner provided what was termed ‘our client’s registration document’, attaching a certificate of the appellant’s name change from Marigold Investments Two (Pty) Ltd to Marigold Hotel Developer (Pty) Ltd.
[37] The appellant’s directors were served with a notice referring to Form 15 as contemplated by rule 42(7) by the defendant’s legal practitioner which calls upon a party in the position of the appellant to provide a notice to defend if it disputes its liability as owner or proprietor of the defendant firm and that it was a partner or proprietor of the firm. The last paragraph of Form 15 is of relevance to these proceedings:
‘If you do not give such notice you will not be at liberty to contest any of the above issues. If the above-named defendant is held liable you will be liable to have execution issued against you, should the defendant’s assets be executed in execution and be insufficient.’
[38] Rule 42(9) is also relevant to these proceedings. It provides:
‘A person served with a notice in terms of subrule (7) or (8) must be regarded as a party to the proceedings with the rights and duties of a defendant.’
[39] Not only does rule 42(9) provide that the appellant, thus served with a notice under rule 42(7), must be regarded as a party to the proceedings with the rights and duties of a defendant, but the defendant’s own legal practitioners accepted that Marigold Hotel Developer (Pty) Ltd was the defendant and listed its directors and their address and provided notices under rule 42(7) to those directors.
[40] Overlooked by both sides in this dispute, is the clear wording of s 23 of the High Court Act 16 of 1990 which provides under the margins heading ‘Execution of process in respect of association, partnership or firm’:
‘Any warrant or other process for the execution of any judgment or order issued against any association of persons, corporate or unincorporated, or any partnership or firm may be executed by attachment of the property or assets of such association, partnership or firm.’
[41] The goods which were attached were those sold and installed at the instance of the firm cited as the defendant.
[42] The approach of the appellant in subsequently asserting in the interpleader proceedings that it was not a party to the proceedings is in direct conflict with what is provided for in rule 42(7) and (9) and the purpose of that rule. But even worse for the appellant, its approach is utterly untenable, given the clear and unambiguous concession that it is, in fact, the defendant, made on its behalf by its erstwhile practitioners in the reply to the notice in terms of rule 42(5), (6) and (7) dated 6 August 2019. Its claim is not only baseless on the facts read with rule 42, but further exposed as baseless by virtue of s 23 of the High Court Act.
Held that:
In the absence of any request for the leading of evidence, the court was entitled to determine the interpleader proceedings based upon the particulars of claim and papers filed.
By electing not to lead evidence when it was called to put forward facts in its particulars of claim to the goods, the appellant cannot subsequently complain when it failed to set out any factual matter in its particulars of claim for its bald and unsupported assertion of ownership.
It is further held that, a more fundamental reason why the appeal and the appellant’s invocation of the interpleader proceedings must fail is that the appellant had absolutely no basis to invoke interpleader proceedings and that its attempt to do so was contrived and completely without foundation.
Held that, the approach of the appellant in asserting in the interpleader proceedings that it was not a party to the proceedings is in direct conflict with what is provided for in rule 42(7) and the purpose of that rule as well as s 23 of the High Court Act 16 of 1990 which provides for the execution of process in respect of associations, partnerships or firms.
Held that, the appellant is thus the defendant for the purpose of the action and the execution of the ensuing summary judgment.
Held that, the invocation of interpleader proceedings by the defendant (the appellant), being without any basis at all, has only served to delay execution and frustrate the administration of justice. This constitutes an abuse and will not be countenanced and warrants a special order as to costs.
As a result, the appeal was dismissed.
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