Rule 45(8) and 45(12) allowing a judgment creditor to attach the bank account of a judgement debtor.
Many times, to great frustration and dissatisfaction, the movable property in the judgment debtor’s possession is not of sufficient value to satisfy the judgment debt. As per the court’s judgment in South African Congo Oil Co (Pty) Ltd v Identiguard International (Pty) Ltd interpretation is given to Rule 45 to assist the judgment creditor when wanting to execute on a judgment debt.
When a court orders that the unsuccessful party (judgment debtor) must make a payment to the successful party (judgment creditor), it becomes a judgment debt. Once the judgment creditor is entitled to payment of a judgment debt but the judgment debtor refuses to pay, the most practical way forward to enforce the payment is to issue and serve a Writ of Execution. This enables the judgment creditor to attach and sell the movable property of the judgment debtor to recover the monies owing to the judgment creditor in terms of the judgment debt.
Rule 45 of the Uniform Rules of Court (Rules) makes provision for the sale in execution of the movable property of the judgment debtor. More specifically, it also makes provision for the attachment of incorporeal property without first making an application to the court. (Incorporeal property is property which is intangible i.e. you cannot touch it physically, like a right to something). This means that issuing a Writ of Execution is sufficient to have the incorporeal property of a judgment debtor attached to satisfy the judgment debt.
The rule also makes provision for the attachment of debts which are subject to attachment and that are owed or have accrued to the judgment debtor from a third party. This raises the question of what a debt subject to attachment is, and what can be interpreted as a debt that is owed or has accrued to the judgment debtor.
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In South African Congo Oil Co (Pty) Ltd v Identiguard International (Pty) Ltd, the court ruled that all debts accruing or owing to the judgment debtor (unsuccessful party) by a third party may be classified as incorporeal property and can be attached in terms of Rule 45.
Incorporeal property
Incorporeal property can be either movable or immovable, and is categorised as the following:
- Leases, bills of exchange, promissory notes, bonds or other securities for payment of money;
- Interests of the judgment debtor in property pledged, leased or sold under a suspensive condition to or by a third party; and
- All other incorporeal property or incorporeal rights over the property.
Keeping the above in mind, is the money in the bank account of a judgment debtor incorporeal property subject to attachment in terms of Rules 45?
In Absa Bank Ltd v Hanley, the court established that a relationship between a bank and its customer is that of a debtor and creditor. Therefore, should the customer’s bank account be in credit, the bank will be the debtor to the customer. This means that, if the judgment debtor has a bank account in credit, the bank will be a third party with debts owing and accruing to a judgment debtor.
In light of the above, should it be brought to the sheriff’s attention (by the judgment creditor) that such debt that is subject to attachment exists, the sheriff may attach the debt in terms of rule 45, as being incorporeal movable property. After attaching the debt accrued and owing to the judgment debtor by a third party (in this case the bank), the sheriff must serve on the third party, who is known as the garnishee, a notice to pay an amount to the satisfaction of the judgment debt over to the sheriff.
The court in South African Congo Oil Co (Pty) Ltd v Identiguard International (Pty) Ltd stated that “it is by virtue of the attachment that the garnishee becomes obliged to pay not the judgment debtor, but the judgment creditor”. Therefore, when a bank is served with a garnishee notice and fails to pay the amount to the sheriff, the bank should explain to the court why it should not pay the amount due to the sheriff.
As a consequence of the reasoning above, it is not only the movable property in the possession of a judgment debtor which can be attached; another manner in which a judgment creditor can secure the money due to them is to attach the judgment debtor’s bank account.
This is good news for a judgment creditor where the judgment debtor’s property will be insufficient to satisfy the judgment debt. The route to attach the judgment debtor’s bank account is effective for both commercial debts owed and in the case of family law matters to secure maintenance payable as ordered by a court.
