IN
THE COURT OF APPEAL OF SWAZILAND
APPEAL
CASE NO.
In
the matter between:
VARIOUS
CREDITORS
And
DIVERS
DEBTORS
CORAM :
LEON J
A
:
STEYN J
A
:
TEBBUTT J
A
FOR
THE APPELLANTS : MR. FLYNN
FOR
THE DEFENDANTS : MR. DUNSEITH
JUDGEMENT
Leon
J
A:
This
case has been referred to this Court by the Chief Justice in terms of
Section 17 of Act 74 of 1956.
Concerned
about the effect of certain matters on the motion court roll which
had been brought in terms of Rule 45(13) (h) (sic) of the Rules of
the High Court of Swaziland the learned Chief Justice considered Rule
45(13) and in a written judgement dated 14th August 1998 held that
Rule 45(13) is ultra vires and that those proceedings which have been
taken in terms of the Rule are invalid. It followed that all pending
applications presently before the High Court in terms of the Rule
were dismissed.
The
relevant Rule in question is not Rule 45(13) (h) but Rule 45(13) (i).
The Rule provides that a debtor, against whom a judgement sounding in
money has been given, and who has not paid the judgment debt, can be
given notice by the judgement creditor to attend the Court
1
for
an enquiry to be held into his financial position. The object of such
enquiry is to determine whether the judgment debt can and should be
paid by way of instalments.
It
is pointed out by the Chief Justice that this Rule was imported from
a similar Rule which operated in the Supreme Court of South Africa
(Rule 45(12)(i)) but that the latter Rule has been abrogated and
removed from the Rules, so that those enquiries are no longer held in
what is now the High Court of South Africa.
Having
expressed the view that in many, if not most cases, the Rule has
proved to be an ineffective waste of time and money and that its only
virtue, if it be a virtue, is to provide some sort of coercion on
recalcitrant debtors, the Chief Justice goes on to say:
"The
coercion lies in permitting the creditor to summon the debtor to
court and compel the production of documentary evidence of his
financial position under pain of imprisonment for contempt for
failing to answer or comply with the notice issued by the creditor.
Indeed warrants of arrest have regularly been issued where the debtor
fails to appear in response to a notice served upon him. There are
relatively few cases where full enquiries have been held and fewer
still where orders have been made subsequent thereon. The virtue of
the Rule lies in the fact that in many cases the debtor negotiates
terms with the creditor extracurially albeit under threat of the
proceedings... failure to comply with the terms of the court order
cannot be visited with contempt proceedings..." (this is so
because the notice calling upon the debtor to attend the enquiry is
not a process of the court signed by the Registrar.)
The
judgement refers to the fact that the Rules of Court are made and
promulgated by the Chief Justice in terms of Section 10(1) of the
High Court Act No.20 of 1954. That provides for the Chief Justice
making Rules of Court for regulating the proceedings of the High
Court but, according to the judgement, neither the Rule nor any of
its sub-sections include the introduction of a procedure unknown to
the common law "which constitutes an infringement on the rights
of persons to liberty and privacy."
Reference
is made in the judgement to the case of UNITED REFLECTIVE CONVERTERS
(PTY) LTD VS LEVINE 1988(4) SA460 (W) which is to the effect that a
Rule of Court may be declared invalid if its provisions go beyond the
powers conferred on
2
the
rulemaking authorities e.g. where it goes beyond a Rule regulating
procedure but purports to create a substantive law.
It
was held by the learned Chief Justice that he cannot, by Rule of
Court, alter the substantive law and in particular create an offence
of not attending court in response to a notice issued by a creditor
or his attorney. Nor may he provide a method of execution
unrecognised by the common law, which impinges on the rights of
liberty making the debtor's wilful failure punishable by
imprisonment. The common law does not permit civil arrest for a debt
which, he felt, is the effect of the Rule. Nor does the common law
compel the attendance of any person at an enquiry into his affairs at
which he is obliged to produce his private documents and to submit to
examination under oath in relation thereto under pain of imprisonment
for default.
In
short, the learned Chief Justice held that Rule 45(13) was ultra
vires because: -
i) It
did not regulate merely procedure but introduced substantive law.
ii) The
substantive law introduced by the Rule was not in conformity with the
common
law.
It
would seem that the learned Chief Justice in holding Rule 45(13) to
be ultra vires struck down the whole of that Rule, thus also
declaring per incuriam Rule 45(13) a
-
g
to be ultra vires. There is no basis for such a conclusion. The real
attack was on Rule 45(13) (h)-(k) which provide:-
"h) Whenever
a court gives judgment for payment of a sum of money against a party
(hereinafter called "the debtor") the court may forthwith
investigate whether the debtor is able to satisfy the judgement and
for that purpose may require the debtor's attendance to give evidence
on oath, and to produce such documents as the court may direct, and
allow the judgement creditor to adduce such evidence as the court may
think fit.
i) Whenever
a return has been made to a writ of execution, that the officer
charged with the execution has been unable to find sufficient
property subject to attachment to satisfy the amount of the writ or
whenever a judgement debt remains wholly or in part unsatisfied after
the expiration of twenty-one days from the date of the judgment, the
judgement creditor may by notice call upon the judgement debtor or,
where the judgement debtor is a body corporate, any director,
manager, secretary or other similar officer thereof, or any person
purporting to act in any such capacity, to appear before the
3
court
on a day fixed by such notice, and to produce such documents as may
reasonably be necessary, in order that the court may investigate the
financial position of the judgment debtor.
j) Any
such person who, having been served with such notice under paragraph
(i) fails without good cause to appear, may be personally attached
for contempt of court; and whenever such person appears pursuant to
such notice the court may proceed as set fourth (sic) in paragraph
(h).
k) Whenever
the court is of opinion that the debtor is able to satisfy a debt by
instalments out of his earnings, it may make an order for payment of
such debt by instalments."
Before
us, Mr. Flynn appeared for the appellant while Mr. Dunseith appeared
as amicus curiae and we are indebted to him for having undertaken
this task and to both Counsel for their assistance.
Both
Counsel submitted that the learned Chief Justice had misconstrued the
nature and purpose of the financial enquiry provided for in Rules
45(13) (h)-(k). It was contended that the relevant sub-rules provide
for a procedure in terms of which the Court may forthwith investigate
whether a debtor is able to satisfy a money judgement and the Court
may require the debtor's attendance to give evidence on oath and to
produce such documents as the Court may direct. It was urged that
sub-rule (h) is a procedural rule which enables the court to hear
evidence of both the debtor and the judgement creditor prior to
exercising its discretion in terms of Rule 45(13) (k) to make an
order for the payment of the debt by instalments where the Court is
of the opinion that the debtor is able to satisfy that debt by
instalments out of his earnings. It was further contended that Rule
45(13)(i) is also a procedural rule in terms of which the judgment
creditor may secure the attendance of the debtor in order that the
Court may investigate his financial position in circumstances where
insufficient property subject to attachment has been found on
execution.
Subject
to the question as to whether the Court has power to imprison the
debtor for contempt of court under sub-rule (j), which I shall
consider later herein, there is abundant authority which supports the
submissions made by counsel that the rest of Rule 45(13) is not ultra
vires, and in particular Rules 45(13) (h) - (k).
4
In
GOUWS VS THEOLOGO AND ANOTHER 1980(2) SA 304 it was pointed out by
Nicholas J (as he then was) at page 305-6 that at common law, the
Court has a discretion whether or not to sanction the attachment of
earnings and as to the extent to which earnings may be attached. The
learned Judged stated that Rule 45(12)(j), which is the equivalent of
Swaziland Rule 45(13)(i), provides the procedure whereby the Court
may exercise its discretion to make an order for payment of a
judgement debt by instalments out of the debtor's earnings and for
the attachment thereof. It was held that Rule 45(12)(j) enshrined the
Court's common law discretion in express terms. It prescribes the
common law procedure whereby the common law discretion of the Court
may be invoked. (See also A & H JOPSON INVESTMENTS (PTY) LTD VS
PRINSLOO 1960(4) SA293 (E) at 296C. SHAW AND BOSMAN VS TATHAM 1912
WLD 75.
In
FOLEY VS TAYLOR AND ANOTHER 1971(4) SA515 (D) Miller J said this at
page 517(h):-
"The
circumstance that under the common law it was necessary to apply to
Court for leave to execute the debtor's salary in the hands of his
employer does not take that debt out of the category of movables
subject to attachment; it reflects a procedural step calculated to
give a measure of protection to the unfortunate debtor who might
otherwise be left destitute and unable to support his own life or
that of his dependants."
That
case, Gouws' case (supra) and NORWICH UNION FIRE INSURANCE SOCIETY
LIMITED VS MANKOWITZ 1966(3) SA573 (E) AT 575A show, as was correctly
contended, that the Rule's primary purpose is to protect the debtor's
rights.
Subject
again to the possible qualification relating to the imprisonment of
the debtor the learned Chief Justice was therefore not correct in
holding that the Rule is an "unwarranted and an unjustifiable
intrusion upon the rights of the debtors."
I
turn now to consider the question of whether the High Court has power
to imprison a judgement debtor for contempt of court by reason of his
failure, when able to do so, to pay a judgement debt of a commercial
character which the Court ordered him to pay in specified
instalments, on specified dates, at a specified time, to a specified
person.
5
In
HOFMEYER VS FOURIE 1975(2) SA590© the Court considered the
provisions of the then Rule 45(12)(i) of the Rules of Court which
then prevailed in South Africa. In a fully considered judgment Baker
J, with respect, analysed all the authorities on this topic admirably
and exhaustively.
The
relevant part of the headnote reads as follows: -
An
unsatisfied judgement ad pecuniam solvendam does not become a
judgement ad factum praestandum after the application of the
procedure provided by Rule of Court 45(12) to it. In each of two
applications the applicant had an unsatisfied judgement which the
Respondent debtor had been ordered, after an enquiry under Rule of
Court 45(12) to repay at a specified rate per month on a specified
date at the office of a specified person. No payments were made and
applications were made to commit the debtor for contempt of court for
failing to comply with an order ad factum praestandum.
Held,
that the orders were ad pecuniam solvendam. Held, therefore, that the
Court was precluded form granting the order.
In
the course of his judgement Baker J drew a distinction between
matrimonial cases and ancillaries thereof and other cases. In the
former class of case the Courts have committed a defendant to prison
for contempt who has failed to obey an order to pay money. (See the
cases collected in the judgement from page 594B - 597D). Such an
order has also been granted where a defaulting executor was ordered
to pay costs de bonis propriis, for such an order was said to be in
the nature of a penalty against the executor MASTER, SUPREME COURT VS
YATES NO (1910)) 20 C.
T.
R.
25; ASSISTANT MASTER VS VAN BLERK, 1934 G.
W.
L.
D.79.
Baker
J goes on to say (at page 597 f
-
g):
-
"The
fact is that the practice has never been applied to disobedience of
money judgements other than those mentioned above. Apart from those
cases, committal has up to now (with two exceptions mentioned
directly) has been granted only in cases where the disobedience was
of an order ad factum praestandum in the recognised sense."
6
Baker
J concludes (at page 598 in fine - page 599D) that the matter was
disposed of by the Full Bench of the Transvaal in METROPOLITAN
INDUSTRIAL CORPORATION (PTY) LTD VS HUGHES 1969(1) SA224 (T) where
Colman J said this at page 227: -
"Mr.
Lewis, in urging us to follow the first of these four cases, argued
that although a simple order to pay a sum of money is an order ad
pecuniam
solvendam, it is converted into an order ad
factum
praestandum when in pursuance of an enquiry under Rule 45(12)(j) or
in pursuance of an agreement made when that Rule has been invoked,
the Court orders that the debt be paid in instalments. That argument
was fundamental to his claim for relief because it is well settled
that a committal for contempt of court by reason of a failure to
comply with an order of court is proper only when that order was ad
factum
praestandum. It was not argued, and indeed it was not possible to
argue in the face of ample authority, that the remedy of contempt
proceedings is available to a creditor when the order in his favour
is an order ad
pecuniam
solvendam...
"There
is thus a great weight of authority against the view that an order of
Court directing the payment of money (whether it be made after a
judicial investigation or by consent) is an order ad
factum
praestandum merely by reason of the fact that it provides for a
series of payments on specified dates. An order whereunder the common
law obligation to maintain is to be carried out by means of
periodical payments of money is of that character, but an order to
discharge a commercial debt by instalments is an order ad
pecuniam
solvendam and a breach thereof cannot be penalised by an order for
imprisonment for contempt of Court."
The
first question to be determined therefore is whether any part of Rule
45(13) provides for imprisonment for a breach of an order ad
pecuniam
solvendam. If so, that part of the Rule will be ultra vires.
If
the effect of those sub-rules or any of them is to order the
imprisonment of a debtor for non-payment of a debt it would, save in
matrimonial cases, be ultra vires.
The
first question then is whether that is the effect of the sub-rules or
any of them. I think not.
The
attachment for contempt of court is provided for in Rule 45(13) (j)
but that only arises where the debtor fails without good cause to
appear in court in response to a notice issued by the judgment
creditor under Rule 45(13) (i).
7
However
Rule 45(13) (j) raises another question.
The
sub-rule provides for the imprisonment of a debtor where he fails to
respond to a notice issued not by the Court but by the judgement
creditor. Because the notice is not issued by the Court at all, I am
unable to see upon what basis it can be held that the debtor can be
in contempt of Court. He is in contempt of the notice. In my view
therefore, that part of sub-rule (j) which provides for the personal
attachment of the debtor for contempt of Court is ultra vires. This
conclusion is supported by the following remarks of Greenberg J in
HANKIN VS HANKIN 1932 WLD 190 at 192.
"In
the present case proceedings for contempt would lie if the order for
maintanance was one in which the Court by its own motion imposed upon
the respondent the obligation, and probably the same would apply
where the Court had the power to do so but made the Order on an
agreement between the parties."
The
emphasis was placed upon orders by the Court, and in DAVIDSON VS
DAVIDSON 1926 WLD 33 at page 34 the same learned Judge said this: -
"the
test whether an order for committal should be made is whether the
order sought to be enforced is an order ad
factum
praestandum."
(See also HOFMEYER VS FOURIE (SUPRA) AT PAGE 596
B
-
C)
In
the present case sub-rule (j) provides for committal where an Order
of Court is not involved at all; merely a notice by the judgement
creditor.
When
this difficulty was put to Mr. Flynn and Mr. Dunseith by the Court
they both correctly conceded that the following part of sub-rule (j)
is ultra vires.
"Any
such person who, having been served with such notice under paragraph
(i) fails without good cause to appear may be personally attached for
contempt of court."
The
remainder of sub-rule (j) which is clearly severable from the
offending part is not ultra vires. It
reads:-
"and
whenever such person appears pursuant to such notice the Court may
proceed as set fourth (sic) in paragraph (h)."
In
my view the appeal must be allowed save to the extent that, as stated
above, the aforesaid part of sub-rule (j) of Rule 45(13) is declared
ultra vires. The rest of Rule 45(13) is declared
8
