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[2009] ZAGPJHC 40
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Amrich 159 Property Holding CC v Van Wesemb Eeck (25846/09) [2009] ZAGPJHC 40; 2010 (1) SA 117 (GSJ) (21 August 2009)
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO: 25846/09
In the matter between:
AMRICH 159 PROPERTY HOLDING CC APPLICANT
and
ERIC PRUDENT L VAN WESEMB EECK RESPONDENT
_____________________________________________________________
JUDGMENT
_____________________________________________________________
MATHOPO J:
[1]
The
applicant launched an urgent, ex parte application for the arrest of
the respondent
tanquam
suspectus de fuga
.
The allegation was that the respondent had made arrangements to
depart from South Africa with the intention of evading or delaying
payments of his debts, and in particular the one owed to the
applicant. Moshidi J granted an order for the arrest of the
respondent
on the 25 June 2009.
[2] The
respondent
was arrested and taken to Sandton Police Station where he was
detained. An application for the reconsideration of Moshidi
J’s
order was sought, on the basis that it was an order made in the
absence of a party (respondent). On the 26 June 2009
the respondent
was unsuccessful in this application with the result that he remained
detained at Sandton Police Station.
[3]
On
Saturday, the 27 June 2009 the matter came before me in the urgent
court and after expressing some discomfort with the continued
detention of the respondent at the Police Station, I immediately
ordered the release of the respondent subject to the surrender
of his
passport to the applicant’s attorneys. The matter was then
postponed to Monday 29 June 2009 for argument on whether
the rule
nisi granted by Moshidi J should be discharged or not. After hearing
argument I dismissed the application with costs,
discharged the rule
and indicated that I would give my reasons later. These are my
reasons:
[4]
The
circumstances giving rise to this application arise out of the
litigation between the applicant and the respondent.
[
5] It
appears to me that when the original
ex
parte
application
was sought before Moshidi J he was satisfied that there was a prima
facie proof of the fact that the respondent’s
contemplated
departure was with the intention of evading or delaying payment of
his debt or at least that the applicant had reasonable
grounds for
such apprehension. Now with all the information that is available
before me I must decide whether there is sufficient
proof to sustain
the applicant’s case.
[
6] The
applicant alleges that the respondent failed to comply with his
contractual obligations in terms of the sale agreement concluded
between the parties on the 10 December 2006 for the purchase of the
property situated at 9 Riet Avenue, Woodmead Extension 4.
[7] The respondent took occupation of
the property on the 18 December 2006, and was liable to pay
occupational rent from that date.
[8] The deposit of the purchase price
was to be held in trust by an attorney or agent and the money was
then to be invested in an
interest bearing account. The interest was
to be paid to the applicant in respect of the respondent’s
occupational rent.
[
9] The
deposit paid by the Respondent was initially held in trust by the
applicant’s attorneys and later transferred to the
respondent
attorneys who according to the applicant inexplicably paid out the
money to the respondent on the 06 May 2009, that
money included the
interest that was due to the applicant in lieu of occupational rent.
[
10]
The applicant further relied on the fact that the respondent at the
hearing of the matter on the 11 June 2009, stated in an
affidavit
that he has no income in South Africa and that the only funds
available to him are those that were remitted to Belgium.
It was
submitted this was sufficient evidence that the Respondent intended
to leave South Africa permanently and with the purpose
of evading or
delaying payments of his debts.
[11] Mr Roos who appeared on behalf
of the applicant submitted that the summons were issued against the
respondent on the 29 May
2009 and he entered appearance to defend on
the 17 June 2009. Any judgment obtained against the respondent would
be a hollow judgment
because he has no assets in South Africa or
security for the satisfaction of any judgment to be obtained against
him. It was submitted
that the court should infer from the
respondent’s conduct in purchasing air tickets engaging
contractors and obtaining quotations
for the removal of his assets,
as sufficient evidence of someone who was desirous of leaving the
country permanently with that
intention.
[
12] He
further submitted that if the respondent could not furnish any
sufficient security for the payment of any judgment to be
granted in
favour of the applicant, he should be detained, and to secure his
release he must remit the funds which he transferred
to Belgium or
find some suitable security. It was submitted that the respondent is
also indebted to the applicant for untaxed
costs orders obtained
against him and to permit his release without providing any security
thereof would defeat the applicant’s
claim if successful in due
course.
[1
3] Mr
Sutherland who appeared on behalf of the respondent submitted that
the applicant had not made out a case for the order sought,
because
the applicant has failed to prove the essential element of flight
from the creditors by the respondent. It was submitted
that on the
undisputed facts, the respondent had always intended to return to
Belgium and this was after spending a year in South
Africa being
unable to secure a suitable employment. The respondent purchased air
tickets, engaged and obtained quotations from
the contractors to
remove his personal assets also prior to the service of the summons.
The timing of the departure was arranged
to coincide the respondent’s
son who had just completed his matric and about to commence further
tertiary studies, and not
to evade or delay payment of his debts.
[
14]
In my view, service of the summons by the applicant, the purchasing
of tickets and obtaining of quotations for the removal
of the assets
by the respondent
per
se
does not
constitute sufficient ground to warrant arrest. The undisputed facts
reveal that the respondent made arrangements to
depart from the
Republic of South Africa well before the summons were issued and
served on him. He purchased the tickets on the
3 June 2009 and
arranged to fly to Belgium on the 30 June 2009. On the 17 June 2009
he instructed his attorney to file a notice
of intention to defend
action.
[15] On the 4 June 2009 (before the
summons were served on him) his attorneys wrote a letter to the
applicant’s attorneys
informing them that the Respondent
intended instituting an action for reduction of the purchase price
due to the applicants alleged
fraudulent misrepresentation and latent
defects present on the property. The idea of the counter claim was
already in the mind
of the respondent before the service of the
summons. On the respondent’s version such counter claim would
exceed the applicant’s
unliquidated claim.
[1
6] The
sole purpose of the procedure of arrest is prevent flight with the
intention of evading or delaying payment of one’s
debts. The
intention to depart is to be inferred from circumstances of each
case. A distinction must be drawn between a departure
with an
intention to evade or delay payment and an innocent departure which
may coincidentally lead to that result. The onus rests
on the
applicant seeking such an order to satisfy the court that there is
prima facie proof of that fact or at least show that
there is a
reasonable apprehension that the flight is being undertaken with the
requisite intention. All that the respondent has
to do is to show
absence of intention to flee.
[1
7] In
my view the procedure of arrest was not devised to prevent a debtor’s
departure from the Court’s jurisdiction
but to prevent flight
i.e. to prevent his departure with the intention of evading or
delaying payment. The reason for leaving
the country with the
intention of evading or delaying payment of his debts must account
for all the proven facts. It is not the
effect but the requisite
intention which is material.
[18] After considering all the
objective factors in this case, I am of the view that the applicant
has failed to prove that the
respondent made the arrangements to
depart with the intention of evading or delaying payment of his
debts. Service of the summons
cannot turn an already planned
innocent departure into a flight with the requisite intention. The
respondent did not have the
requisite intention to depart from South
Africa permanently with the intention of evading or delaying payment
of his debts. I
accept as having merit the submission by Mr
Sutherland that flight as a motive has not been proved by the
applicant.
[1
9] As
a result I come to the conclusion that the contemplated departure is
not a flight and that the respondent is not subject to
arrest. On
this basis alone, the application must fail. Another reason why this
application should be dismissed is the constitutionality
of the
arrest.
[
20] Mr
Roos relying on the authority of the judgment in
Elliot
v Fourie
1992 (2) SA 817
(CPD)
submitted that, at common law the court’s jurisdiction to order
an arrest
suspectus
de fuga
has not
been ousted by section 1 of the
Abolition
of Civil Imprisonment Act 2 of 1977
(The Act). The latter section provides as follow.
“No
court shall have the power to order the civil imprisonment of a
debtor for his failure to pay the sum of money in terms
of any
judgment”.
[
21] He
further submitted that an arrest
suspectus
de fuga
at common
law is aimed at preventing a debtor from fleeing in order to avoid
paying a debt and in support of his argument relied
on the authority
in
Shell South
Africa Edms Bpk v Gross h/a Motor Maintenance
1980 (4) SA 151
(T)
,
where De Villiers J held that there was nothing in the Act to
indicate that it was in the intention of the legislature to restrict
the court’s common law right to order an arrest
suspectus
de fuga
. He
further held that, at common law the procedure was not limited to an
arrest before judgment, it included an arrest where
the debtor’s
intention was to flee in order to escape the judgment. On the basis
of this judgment, he argued that, at common
law, it cannot be said
that the arrest is unconstitutional and submitted that the cases
relied upon by Mr Sutherland on this point
were clearly
distinguishable from the present matter and not apposite.
[22]
This
judgment was criticised and not followed by Flemming J in Gouveia v
Da Silva
1988 (4) SA 55
(W), in essence, he held that the court has a
discretion and refused to exercise that discretion in favour of an
applicant who
sought an order for the arrest
suspectus
de fuga
of the
respondent against whom he had obtained a judgment. At paragraph 62
F-G stated as follows:
“
The
imprisonment which is sought, in its reason, nature and object so
closely approximates that civil imprisonment to which the
1977
legislation refers that, if not covered thereby, the modern policies
regarding imprisonment for debt cannot be lost sight
of. No marked
injustice will follow if the applicant is left to the enforcement of
the judgments in that country to which the
respondent moves. In the
overall picture there was no justification for exercising the Court’s
discretion, if any exists,
in applicant’s favour”.
[24] Finally at paragraph 58H
Flemming J stated that:
“because
civil imprisonment is not longer possible, this court has to
distinguish what the Dutch writers could afford to blur”.
[
23] Mr
Sutherland submitted that since the constitutional court in
Coetzee
v Government of Republic of South Africa
1995 (4) SA 663
(CC),
a
case which dealt with the provision of
section
65 of Magistrate Court Act 32 of 1944
,
declared civil imprisonment unlawful, there is equally good reason to
declare an arrest under such circumstances unlawful. He
argued that
to order or an arrest, under these circumstances would not only be
draconian but a serious intrusion to the debtor’s
personal
freedom which is guaranteed in section 11 of the constitution.
[25
] He
further relied on the judgment of
BID
Industrial Holdings (Pty) Ltd v Strang & Another
2008 (3) SA 355
(SCA),
a case
dealing with the arrest to found jurisdiction where Howie JA remarked
as follows at page 365 paragraph 41.
“
Apart
from the fact that arrest does not serve to attain jurisdictional
effectiveness it cannot be “just cause” to coerce
security or, more especially, payment, from a defendant who does not
owe what is claimed or who, at least, is entitled to the opportunity
to raise a non-liability in the proposed trial. If there is no legal
justification for incarcerating a defendant who has been
found
civilly liable there cannot be any for putting a defendant in prison
whose liability has not yet been proved. And as to
the function of
arrest to enable the court to take cognisance of the suit, that could
be appropriately achieved if the defendant
were in this country when
served with the summons and there were, in addition, significant
factual links between the suit and South
Africa”.
[2
6] He
further referred me to the passage in para 46 of the latter judgment
where the court observed that no other country, to its
knowledge
currently utilises arrest as a prerequisite for the exercise of civil
jurisdiction.
[27] Finally he submitted that since
no decision of the superior court has been reported which directly
addresses the constitutionality
of Rule 9 of the uniform rules of the
High Court or the common law principles of such arrest and detention,
the decisions in the
BID Industrial and Coetzee cases cited above,
should be adopted and the common law should be developed to reflect
the constitutional
imperatives.
[2
8] Neither
counsel referred me to any legislation or case law after 1994 which
justifies the arrest of an individual pending the
provision of
security. In the present matter, since the summons were served on the
respondent in South Africa, jurisdictional problems
do not arise or
exist. To order the arrest of the respondent on the basis that he is
unable to give security, would in my view
offend his right to
dignity, equality and freedom of movement as enshrined in the Bill of
Rights. The continued arrest in such
circumstances would be
tantamount to coercing security or payment especially where it is
manifestly clear that his liability has
still not been established
and is disputed.
[2
9] I
do not think that the cases cited by Mr Roos are authority for the
proposition that the arrest is constitutional because all
these cases
were decided before the adoption of the Constitution. These cases
are all silent on the individual’s rights
to liberty and
freedom of movement.
[30
] I
align myself with the judgment in BID Industrial Holdings supra,
where Howie JA remarked that if there is no obligation for
incarcerating a defendant who has been found civilly liable there
cannot be any for putting a defendant in prison whose liability
has
not yet been proved. In the present matter the liability of the
respondent has not been determined. To order his arrest particularly
since he has a counter claim which on his version exceeds the
applicant’s unliquidated claim would be contrary to the spirit
of the Constitution.
[31
] I
do not agree with the applicant’s submission that, for as long
as a litigant fails to pay security, he should be detained
indefinitely. In my view it is unfair to expect a litigant who is
detained
suspectus
de fuga
to litigate
under such handicaps ( in prison). To rule or order otherwise would
mean that a foreign national who enters into a
contract with a
resident plaintiff, if there is a dispute and is unable to pay any
security, must be prevented from returning to
his home country until
the case has been finalised. If this were to be sanctioned such
conduct would seriously erode the confidence
which the rest of the
world has in our legal system. Our constitution frowns upon such
conduct especially where rights of individuals
(debtors) are limited
because of yet to be determined debts.
[32
] The
practice of arrest and attachment came about to assist an applicant
incola who would otherwise have to sue abroad. The position
is
different in this matter, jurisdictional problems do not arise. The
only concern which the applicant has in this matter is
one of
execution of the judgment if successful in the main action.
[
33] In
my view if a creditor (or alleged creditor) in the position of the
applicant wishes to protect his position in respect of
the person
leaving the country it must use other legal remedies that do not
allow or violate the personal freedom of the debtor
(Respondent).
[3
4] I
have no doubt that there are better and less restrictive means to
enforce a debt short of arrest, because creditors are able
to have
the judgment made a judgment of a court in a foreign country to which
the debtor may flee, the difficulty regarding execution
is not
insurmountable, for example the sheriff in that country may be able
to do what the sheriff in South Africa is capable of
doing i.e
attaching the assets of the respondent (debtor) in the event of a
judgment..
[35
] I
finally conclude that to the extent that the common law may be at
odds or variance with the Constitution it should be developed,
because an arrest under such circumstances cannot pass the limitation
test in section 36, as it is contrary to the spirit, purport
and
objects of the bill of rights. However since this point was not
argued extensively by the parties I will refrain from making
any
pronouncements in this regard. In the light of my earlier finding my
views are obiter particularly since no notice of the
declaration of
invalidity was served on other interested stakeholders inter alia
Minister of Justice.
[36] In the light of the above facts,
I would dismiss the application.
In the result I make the following
order:
The application is dismissed
The applicant is ordered to pay the
costs of this application which costs shall include the costs of two
counsel as well as the
reserved costs on the 27
th
June 2009.
____________________________
R MATHOPO
JUDGE OF THE HIGH COURT
Appearances
For
the Applicant : ADV ROOS SC
Instructed
by : JORDAAN & WOLBERG ATTORNEYS
For
the Respondent : ADV SUTHERLAND SC
ADV
M AUGUSTINE
Instructed
by : BARRY AARON & ASSOCIATES
Date
of hearing : 29 JUNE 2009
Date
of Judgment : 21 AUGUST 2009