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Interpleader Matters

What is the meaning of interpleader?

Interpleader is a kind of procedure whereby a person in possession of property not being his own, and being claimed from such person (possession) by two or more other persons (so called claimants), by which the matter can be brought to court for adjudication over ostensibly valid and enforceable competing claims over the property.

Magistrate’s Court Interpleader Procedure

This procedure is governed by Section 69 (1) and (2) of the Magistrates Court Act 32 of 1941 as well as Rule 44 (1) and (2) of the Magistrates Court Rules. Rule 44 (1) governs the action ito Section 69 (2) and Rule 44 (2) the action ito Section 69 (1).

Supreme Court Interpleader Procedure

The interpleader procedures in the High Court are controlled and regulated by Rule 58 of the Supreme Court Act 59 of 1959.

As opposed to the Magistrates Court Rules, no provision is made for a specific form which the interpleader notice has to take;

It is clear from Rule 58, however, that the intepleader notice should at least contain a few characteristics, normally that (a) the sheriff has the rights of an apllicant(b) the judgment creditor also has rights of a claimant;© (i) money:(ii) things capable of being delivered;and(iii) claims to immovable property should be dealt with in a particular way.

Since sheriffs have been obliged to keep a trust account, some Registrars prefer that, in the case of claims to money, the sheriff keeps the money in trust and then tenders the money to the Registrar as in the case of claims to a thing capable of being delivered.

In addition, the notice

(a) must state the nature of liability, property or claim in dispute;(b) must call upon the claimants to lodge particulars of their claims within the period stated in the notice, namely at least 15 days after service thereof;© state that at a later date, namely at least 15 days after the date mentioned in the notice for submission of claims, the applicant will apply to the court for a decision as to his or her liability or the validity of the various claims.

The interpleader notice must be accompanied by an affidavit in which the applicant undertakes that he or she

(a) will have no interest in the subject matter of the dispute other than to cover his or her costs therefrom;

(b) is not in collusion with any of the claimants;© is willing to treat the subject matter of the dispute as the court may order.

(Rule 58 (5) and (6) sets out the Court’s reaction if a claimnat defaults after delivery of the interpleader notice or if he or she delivers particulars of his or her claim and has appeared before the Court)

The issuing of an interpleader notice suspends proceedings in an action, pending the decision of the interpleader case, unless the Court orders otherwise at the request of any other party.

As a result of the high costs of litigation in the High Court, a sheriff should exercise extreme caution in issuing any interpleader notice in order to prevent any possible liabilty on his or her part.

A date for a hearing should therefore be set with care and taking into consideration

(a) the rules of the different provincial divisions of the High Court;

(b) recess periods of the High Court;© the court roll- liaison with the Registrar of the relevant Court must take place:

(d) the provisions of Rule 58 (3) (b) and

(e) the time needed for delivery of the interpleader notices.

The case must be placed on the roll in the proper manner and in good time.