SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No: 710/11
Reportable

In the matter between:

SOUTH AFRICAN CONGO OIL COMPANY
(PTY) LTD
Appellant

and

IDENTIGUARD INTERNATIONAL (PTY) LTD
Respondent

Neutral citation:
South Africa Congo Oil Company (Pty) Ltd v
Identiguard International (Pty) Ltd (710/11)
[2012] ZASCA 91 (31 May 2012)

Coram:
MPATI P, CACHALIA, LEACH JJA and
KROON AND BORUCHOWITZ AJJA

Heard:
15 MAY 2012

Delivered:
31 MAY 2012

Summary:
Execution – garnishee proceedings – rule of court
45(12)(a) – whether attachment of debt in terms of
rule
45(8)
necessary
to
render
garnishee
proceedings effective.

___________________________________________________________

ORDER
___________________________________________________________

On appeal from: South Gauteng High Court, Johannesburg (Victor J
sitting as a court of first instance):

The following order is made:
The appeal succeeds with costs including the costs of two counsel;
The order of the court below is set aside and the following order
substituted for it:
‘The application is dismissed with costs, including the costs of two
counsel.’

___________________________________________________________

JUDGMENT
___________________________________________________________

BORUCHOWITZ AJA (MPATI P, CACHALIA, LEACH JJA and
KROON AJA concurring):

[1] This appeal is concerned with garnishee proceedings under the
Uniform Rules of Court for the attachment of a debt owed to a judgment
debtor by a third person (Rule 45(12)).

[2] On 28 February 2003, judgment by default was entered by the
South Gauteng High Court against the Government of the Democratic
Republic of the Congo (‘the DRC’) in favour of the respondent for

payment of US$576 000 and US$1 395 000, or the equivalent of these
sums in South African Rand, together with interest thereon and costs of
suit. Pursuant to a writ of execution issued on the strength of the
judgment, the respondent sold in execution an aircraft owned by the
DRC. The sale yielded an amount of R1 766 007.72. The respondent has
only obtained partial satisfaction of the judgment and the balance of the
judgment debt remains unpaid.

[3] The respondent invoked garnishee proceedings in terms of rule
45(12) against the appellant as a means of executing on the judgment
against the DRC. It is common cause that a sum of US$2 million (the
debt) was owed by the appellant to the DRC when the garnishee
proceedings commenced. On 16 September 2010 the respondent issued
two separate notices in terms of rule 45(12)(a). The first directed the
sheriff to attach the debt and the second, (which I will henceforth refer to
as ‘the garnishee notice’) called upon the appellant to pay the amount of
the debt to the respondent. The garnishee notice was served on the
respondent on 20 September 2010. The appellant refused to pay the
sheriff the amount demanded of it. As a result, the respondent approached
the South Gauteng High Court for an order in terms of rule 45(12)(b), that
the appellant show cause why it should not pay the sheriff the amount of
the debt in satisfaction of the respondent’s writ of execution. The
application was opposed. The appellant disputed that the respondent was
entitled to invoke the provisions of rule 45(12)(b) in the prevailing
circumstances and various grounds of defence were raised. The court
below dismissed these contentions and granted an order authorising the
garnishee notice. The appellant was also ordered to pay the costs of the
application. The present appeal is with the leave of the court below.

[4] The respondent contended, in limine, that the appeal was moot and
will have no practical effect or result as the appellant is, on its own
admission, not able to comply with a court order to pay the debt.
Moreover, the issues raised in the appeal are said not to be of any public
interest as to warrant this court exercising its discretion and hearing the
appeal.

[5] Section 21A(1) of the Supreme Court Act 59 of 1959 empowers
the court to dismiss an appeal if it would not have any practical effect or
result. It is well settled that mootness does not constitute an absolute bar
to the justiciability of an issue and that the court has discretion whether or
not to hear a matter. The test is one of the interests of justice. A relevant
consideration is whether the order the court makes will have any practical
effect either on the parties or on others, and in the exercise of its
discretion a court may decide to resolve an issue that is moot if to do so
will be in the public interest. This will be the case where it will either
benefit the larger public or achieve legal certainty (Van Wyk v Unitas
Hospital & another 2008 (2) SA 472 (CC) para 29.  See, also, Executive
Officer, Financial Services Board v Dynamic Wealth Limited and others
2012 (1) SA 453 (SCA) paras 43 and 44 and the reference therein to the
decision in R v Secretary of State for the Home Department, Ex parte
Salem [1999] 2 All ER 42 (HL) at 47d-f). See, also, Independent
Electoral Commission v Langeberg Municipality 2001 (3) SA 925 (CC)
para 9).

[6] In my view, it cannot be said that the appeal will have no practical
effect or result.  The respondent has indicated that it will in due course
apply for the winding-up of the appellant. In addition, the appeal
involves, a decision on an important question - the proper construction

and legal effect of garnishee proceedings brought under rule 45(12) and
its inter-relationship with the provisions of rule 45(8). It will therefore be
of benefit to the larger litigating public and it is necessary that legal
certainty as to interpretation of the procedural machinery provided for in
rule 45(12) be obtained. It is thus in the public interest that this court
entertain the appeal.

[7] I turn therefore to consider what is, essentially, the principal issue
in the appeal: whether it is a requirement of rule 45(12)(a) that the sheriff
should attach the debt in accordance with the procedure envisaged in
rule 45(8). The garnishee machinery provided for in rule 45(12), as far as
is relevant, reads:
‘(12) (a) Whenever it is brought to the knowledge of the sheriff that there are debts
which are subject to attachment, and are owing or accruing from a third person to the
judgment debtor, the sheriff may, if requested thereto by the judgment creditor, attach
the same, and thereupon shall serve a notice on such third person, hereinafter called
the garnishee, requiring payment by him to the sheriff of so much of the debt as may
be sufficient to satisfy the writ, and the sheriff may, upon any such payment, give a
receipt to the garnishee which shall be a discharge, pro tanto, of the debt attached.
(b) In the event of the garnishee refusing or neglecting to comply with any such
notice, the sheriff shall forthwith notify the judgment creditor and the judgment
creditor may call upon the garnishee to appear before the court to show cause why he
should not pay to the sheriff the debt due, or so much thereof as may be sufficient to
satisfy the writ, and if the garnishee does not dispute the debt due, or claimed to be
due by him to the party against whom execution is issued, or he does not appear to
answer to such notice, then the court may order execution to issue, and it may issue
accordingly, without any previous writ or process, for the amount due from such
garnishee, or so much thereof as may be sufficient to satisfy the writ.’ (emphasis
added)

[8] Rule 45(8) prescribes the manner in which an attachment is to be
made, and reads in material part as follows:
‘(8) If incorporeal property, whether movable or immovable, is available for
attachment, it may be attached without the necessity of a prior application to court in
the manner hereinafter provided:
(a)
...
(b)
...
(c)
In the case of the attachment of all other incorporeal property or incorporeal
rights in property as aforesaid,
(i)
The attachment shall only be complete when-
(a)
Notice of the attachment has been given in writing by the sheriff to all interested
parties and where the asset consists of incorporeal immovable property or an
incorporeal right in immovable property, notice shall also have been given to the
registrar of deeds in whose deeds registry the property or right is registered, and
(b)
The sheriff shall have taken possession of the writing or document evidencing
the ownership of such property or right, or shall have certified that he has been
unable, despite diligent search, to obtain possession of the writing or document;
(ii) The sheriff may upon exhibiting the original of the warrant of execution to the
person having possession of property in which incorporeal rights exist, enter upon the
premises where such property is and make an inventory and valuation of the right
attached.’

[9] Counsel were agreed that it is a requirement of rule 45(12)(a) that the
debt owed by the garnishee to the judgment debtor be attached, but
differed as to the manner in which this was to be achieved. The appellant
contended that the attachment must be effected in accordance with the
procedure outlined in rule 45(8)(c) whereas the respondent argued that
mere service of the garnishee notice on the garnishee serves as an
attachment. If the appellant’s contention is correct there was no effective
attachment as contemplated by the rule and this precluded the court below
from granting the relief it did.

[10] The appellant maintained that on a literal interpretation of
rule 45(12)(a) it is plain that an attachment of the debt is required. The
rule expressly provides that the sheriff may, if requested by the judgment
creditor, attach the debt and serve a notice on the third party.
Accordingly, that wording does not permit the construction sought to be
placed upon it by the respondent.

[11] The appellant also submitted that rules 45(8) and (12) should be
read together and in the context of rule 45 which regulates the execution
process. By reading rule 45(12)(a) in isolation, it was contended, the
provision for the attachment of the debt would not only be inchoate but a
departure from the long-standing practice in garnishee proceedings that
there be an attachment. Whilst the service of a garnishee notice may have
constituted an attachment of a debt under the common law, an attachment
of that nature only followed upon an application to court on notice to the
debtor and the creditor in respect of the debt and upon the court
sanctioning the issue and service of the garnishee order. (see Bergmann v
Colonial Government (1907) 24 (SC) 703 at 706; Reinhardt v Ricker and
David 1905 TS 179 at 186-188). Accordingly, it was submitted that
because notice was not given to the DRC, and no endeavour had been
made to effect an attachment in terms of rule 45(8)(c) the garnishee
proceedings were ineffective.

[12] On the other hand, the respondent invoked the case of Reichenberg
v Röntgen 1983 (3) SA 745 (W) in support of its contention that mere
service of the garnishee notice on the garnishee constitutes an attachment.
Its reliance on that decision was, in my view, misplaced. In that matter
the amount owing by the garnishee to the judgment debtor was attached
pursuant to two writs of execution. The court concluded (at 747H) that by

reason of the attachment the defendant had become obliged to pay the
debt to the judgment creditor. The judgment in Reichenberg is thus no
authority for the proposition that mere service of the garnishee notice
operates as an attachment of the debt. Nor is it authority for the
proposition that the recognised procedure for the attachment of
incorporeal property as set out in rule 45(8) is inapplicable.

[13] Respondent’s counsel also relied on several foreign authorities1 to
buttress its aforesaid contention. Since garnishee proceedings are
governed by the Uniform Rules, it is unhelpful, if not irrelevant, to rely
on foreign authorities as an aid to interpretation of the rules. Whilst
broadly similar procedures are followed in the jurisdictions referred to,
none of the authorities relied upon deals with the essential question under
consideration.

[14] A further argument advanced on behalf of the respondent was that
the attachment procedure in rule 45(12) applies to the exclusion of the
____________________
1 Reference was made to Rekstin v Severo Sibirsko & Co and the Bank for Russian Trade Limited
[1933] 1 KB 47 where the Court of Appeal held, (at 70), that –
‘[T]he effect of the service of garnishee order nisi is, according to Lord Watson in Rogers v Whiteley
(4), to make the garnishee ‘custodier’ for the court of the whole funds attached.’
In Rekstin (at 71) the court applied the finding of Atkin LJ in Joachimson v Swiss Bank Corporation
[1921] 3 KB 110 at 131, that –
‘[T]he service of the order nisi binds the debt in the hands of the garnishee – that is, creates a charge in
favour of the judgment creditor.’
The dictum of Atkin LJ was followed in Choice Investments Limited v Jeromnimon (Midland Bank
Limited, garnishee) [1981] 1 All ER 225 at 227 where Lord Denning stated that:
‘[A]s soon as the garnishee order nisi is served on the bank, it operates as an injunction. It prevents the
bank from paying the money to its customer until the garnishee order is made absolute, or is
discharged, as the case may be. It binds the debt in the hands of the garnishee, that is, creates a charge
in favour of the judgment creditor … the ‘attachment’ is not an order to pay. It only freezes the sum in
the hands of the bank until the order is made absolute or is discharged.’
Reference was also made to American jurisprudence and in particular to the case of Harbor Bank of
Maryland v Hanlon Park Condominium 153 Md. A pp 554, 834A 2d 993, 51.U.C.C. Rep. Serv. 2d 903
(2003) in which it was held that –
‘[A] writ of garnishment “preserves the assets of the judgment debtor by creating an ‘inchoate lien’ that
is binding and prevents the garnishee from disposing of those of the assets in his possession until such
time as a judgment is entered in the garnishment proceedings” . . . The general rule is that “once the
writ of garnishment is issued and laid in the hands of the garnishee, he is bound to safely keep the
assets of the debtor in his possession”.’

procedure contained in rule 45(8). The latter, it was submitted, deals with
a different subject matter, namely, execution against the judgment
debtor’s own property. This contention is clearly without substance.
There is no principled reason why the attachment of a debt in the hands of
a third party should be treated differently to the attachment of a judgment
debtor’s incorporeal property. The following remarks of Howie J in Cape
Town Municipality and Another v Allianz Insurance Co Ltd 1990 (1) SA
311(C) are apposite:
‘One must bear in mind that a “right” and a “debt” are, after all, merely opposite poles
of one and the same obligation…. Essentially, therefore, claiming payment of the debt
is no different in principle from enforcing the right to payment of the debt.’

[15] Finally, it was suggested that support for the respondents
contention is to be found in the following phrase which appears in
rule 45(12)(b):
‘the court may order execution to issue…without any previous writ or process, for the
amount due from such a garnishee… as may be sufficient to satisfy the writ.’
It was argued that the fact that rule 45(12)(b) provides that the court may
order execution ‘without any previous writ or process’ was an indication
that a separate or prior attachment of the debt was not required in order to
invoke garnishee proceedings under rule 45(12). It was also submitted
that in the light thereof the words ‘attach the same…’ which appear in
rule 45(12)(a) were tautologous. This contention is incorrect. As is
evident from the history of the rule as outlined below, the ‘previous writ
or process …’ was a reference to the proceedings, which under the
common law, had to be instituted against the garnishee before an
attachment of the debt could be made.

[16] Rule 45(12) must be viewed against the backdrop of the common
law and the procedural position that obtained immediately before its

introduction. Under the common law a special application to court was
always required in order to attach the debt owing by a third person to the
judgment debtor. (See the Bergmann and Reinhardt cases supra; Van
Zyl’s Judicial Practice 4th ed at 254 and Herbstein & Van Winsen The
Civil Practice of the High Courts of South Africa 5th ed at 1039.) The
requirement that an attachment of the debt be effected in garnishee
proceedings has consistently been followed by our courts, save that under
the present rules the attachment may be effected without the necessity of
a prior application to court.

[17] Rule 45(12) was inserted into the rules by GN R235 of 18 February
1966, and is based on the wording of the old Cape rule 39. Before the
introduction of the rule a creditor was obliged, except in the Cape and
Natal, after effecting an attachment of the debt, to approach the court by
way of application for an order calling upon the garnishee to show cause
why the debt should not be paid to the sheriff in satisfaction of the writ in
execution. The reason for the introduction of the rule was to provide a
uniform mechanism based on the old Cape rule obliging the garnishee to
pay the attached debt to the creditor and not the judgment debtor.

[18] The case of Simpson v Standard Bank of South Africa Limited 1966
(1) SA 590 (W) is illustrative of the position that obtained before the
introduction of rule 45(12). There, a divorced wife applied for an order
that a bank pay to her moneys due by her ex-husband. The moneys
standing to the credit of the bank account constituted a right of action
which her ex-husband (the judgment debtor) had against the bank. She
launched the application without first issuing a writ of execution and
effecting an attachment of her ex-husband’s claim against the bank.
Galgut J said the following in regard to the procedure followed:

‘… [I]t seems to me that the procedure which the applicant should have followed is,
firstly, to have issued a writ of execution as provided for in Rule 45(8)(c). In terms of
that writ the Deputy Sheriff will in the meantime attach the claim against the bank so
that the money in the bank account cannot be paid over to the ex-husband (cf. the
order made in Ex parte Crous, 1913 Transvaal Provincial Division 648 at pages 649
to 650). Thereafter or at the same time she could have approached the court by way of
application for an order calling upon her ex-husband to show cause why the bank (ie
the so-called garnishee) should not be directed to pay over to the Deputy Sheriff on a
fixed day so much of the moneys in their hands, to which her ex-husband is entitled,
towards satisfaction of the writ of execution issued out of this court, and in the event
of the bank having any reason for refusing to make such payment, directing the bank
to appear and show cause why it should not make the required payment to the Deputy
Sheriff …’.

[19] Simpson was delivered on 25 December 1965, shortly before the
introduction of rule 45(12). What emerges from that case is that rule
45(8) must be employed when effecting an attachment of incorporeal
property including the attachment of a debt owing by a third person to the
judgment debtor. Rule 45(12) did not, as was suggested by the
respondent, dispense with the attachment requirement, or create a discreet
attachment procedure. What it in fact did was to establish the machinery
necessary to oblige the garnishee to pay the attached debt to the judgment
creditor.

[20] The need to attach the debt is self evident. An attachment in
execution creates a pignus judiciale the effect of which is that control of
the property attached passes from the judgment debtor to the officer
entrusted with the execution of the writ, the dominium of the debt
remaining with the judgment debtor (see Liquidators Union and Rhodesia
Wholesale Ltd v Brown & Co 1922 AD 549 at 558-9). The necessity for

an attachment of incorporeal property such as a debt was described by
Innes CJ in Reinhardt supra at 187.
‘(T)he essential to be observed in all cases of the attachment of debts is that the debtor
should receive due notice, so that he may be warned not to discharge his obligation to
his original creditor, and so that he may have an opportunity of coming to the Court
for relief in case he wishes to raise the question of the validity of the debt, or any lien,
discharge or other matter which would operate in his favour.’

[21] Were the respondents contentions correct, only the garnishee, to
the exclusion of all other interested parties, including the judgment
debtor, would have notice of the attachment. This would redound to their
prejudice. By reason of rule 45(8)(c)(i)(a) an attachment is only complete
once the sheriff has given notice in writing ‘to all interested parties’. See
Stratgro Capital (SA) Ltd v Lombard NO and others 2010 (2) SA 530
(SCA) paras 15-17. Compare Schmidt v Weaving 2009 (1) SA 170 (SCA)
paras 15-21.

[22] The argument of the respondent fails to take account of the plain
language employed in rule 45(12)(a) and in particular the words
‘[a]ttach the same, and thereupon shall serve a notice on such third person…’
The adverb ‘thereupon’ ‘is of particular significance.’ The Shorter Oxford
English Dictionary 6 ed Vol 2 p 3234 ascribes the following meanings to
it:
(1) ‘Upon that or it; Upon that (in time or order)’;
(2)
‘On that being done or said; (Directly) after that’;
(3)
‘On that subject or matter with reference to that.’
Given the context in which the adverb appears in rule 45(12)(a) the first
two meanings ascribed thereto are appropriate.
Properly interpreted the phrase ‘[a]ttach the same, and thereupon shall serve a
notice on such third person…’ envisages two separate jural acts (a) an

attachment of the debt and (b) service upon the garnishee of the
prescribed notice.

[23] For these reasons I conclude that it is indeed a necessary
requirement of rule 45(12)(a) that the sheriff attach the debt in
accordance of rule 45(8)(c). Such attachment coupled with service of the
garnishee notice has the effect, as in English law and other foreign
jurisdictions, of prohibiting the person upon whom the garnishee notice is
served from parting or dealing with the debt pending the outcome of the
garnishee proceedings. It is by virtue of the attachment that the garnishee
becomes obliged to pay not the judgment debtor but the judgment
creditor (see Reichenberg (supra) at 747H in fin; as also the cases there
cited, namely Paramount Furnishers v Lezar’s Shoe Store & Outfitters
1970 (3) SA 361 (T) at 364-365 and African Distillers Limited and others
v Honiball and another 1972 (3) SA 135 (R) at 136H.

[24] In the present instance it is common cause that no notice was given
to the DRC and that no endeavour was made by the sheriff to effect an
attachment in accordance with rule 45(8)(c). Accordingly, the garnishee
proceedings were rendered ineffective and the court below had erred in
granting the order that it did. For these reasons the appeal should succeed.
This conclusion renders it unnecessary to decide the other issues raised in
the appeal.

[25] The following order is made:
The appeal succeeds with costs including the costs of two counsel;
The order of the court below is set aside and the following order
substituted for it:

‘The application is dismissed with costs, including the costs of two
counsel.’

__________________________
P BORUCHOWITZ
ACTING JUDGE OF APPEAL

Appearances:

Appellant:
A. O Cook SC (with him G M Ameer)
Instructed by
Norton Rose South Africa, Sandton
Webbers, Bloemfontein

Respondent:
L.J. Morrison SC (with him N Dayand-Ingroop)

Instructed by

Webber Wentzel, Johannesburg

Lovius-Block, Bloemfontein

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE
SUPREME COURT OF APPEAL
MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF
31 May 2012

STATUS: Immediate

South African Congo Oil Company (Pty) Ltd v Identiguard International 710/11

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal (the SCA) today upheld an appeal from the South
Gauteng High Court, Johannesburg, setting aside the order of the high court
authorising the issue of a garnishee notice in terms of rule 45(12) (a) of the Uniform
Rules of Court

The respondent Identiguard International had obtained a judgment against the DRC
Government (DRC). As it had only obtained partial satisfaction of the judgment it
invoked garnishee proceedings against the appellant in terms of rule 45(12).to
attach a debt owed to the DRC by the appellant It was common cause that no notice
was given to the DRC and no endeavour was made by the Sheriff to effect an
attachment of the debt. The appellant refused to pay the amount of the debt to the
Sheriff. The respondent then approached the high court for an order in terms of rule
45 (12) (b) to show cause why it should not pay the debt owing to the DRC to the
respondent.

The SCA held that it is a requirement of rule 45(12) (a) that the Sheriff attach the
debt in accordance with rule 45(8). It further held that rule 45(12) did not dispense
with the attachment requirement or create a discreet attachment procedure but

introduced the machinery necessary to oblige the garnishee to pay the attached debt
to the judgment creditor. The SCA further held that such attachment coupled with
service of the garnishee notice has the effect of prohibiting the person upon whom
the garnishee notice is served from parting or dealing with the debt pending the
outcome of the garnishee proceedings. The SCA also held that it is by virtue of the
attachment that the garnishee becomes obliged to pay not the judgment debtor but
the judgment creditor.

The appeal was consequently upheld.

-- ends --