The police arrive with a warrant against the husband and take the wife’s freezer; or seize a truck the bank still owns. The Act has a procedure for exactly this, called in the older language an interpleader.
The procedure
(1) If a claim is made to or in respect of goods distrained under a warrant of execution, or their proceeds or value, by a person not being a party against whom the warrant has issued, a Magistrate, on application by the officer charged with the execution, may issue a summons directed to the party obtaining the warrant and the party making the claim.
(2) On the issue of the summons, an action brought in respect of the claim shall, by the mere fact of service of the summons on the plaintiff in that action, be stayed, and the court in which it was brought may order the plaintiff to pay the costs of the action after service.
(3) A Court may adjudicate in the claim and make an order on it. (4) Subject to an appeal, an order under Subsection (3) is final and conclusive on all parties.
The Magistrates’ Manual explains the purpose: when a third party claims an interest in seized property ranking ahead of the debtor’s, that interest must be resolved before execution is completed, and the summons brings the issue before the Court with the execution stayed meanwhile. The claimant does not sue the officer or the creditor in trespass; that action is stayed by service of the summons, and the whole matter is decided in the interpleader.
The rules in section 179
| Rule | Paragraph |
|---|---|
| The claimant must, within 24 hours after making the claim, deliver to the officer or leave at the Clerk’s office particulars of the goods claimed and the grounds, or for a rent claim the amount, period and premises | (a) |
| The claimant’s name, address and description must be fully set out | (b) |
| Money paid to the Clerk under the execution is retained until the claim is decided | (c) |
| Particulars may be amended by leave, or dispensed with by consent | (d) |
| The summons is returnable on a day the magistrate fixes and served like an ordinary summons at least 48 hours before; by consent it may be returnable at once and service dispensed with | (e) |
| If the claim fails, the officer’s costs are retained out of the amount levied unless the Court orders otherwise, without prejudice to the creditor’s right against the claimant for that sum | (f) |
The 24-hour rule is tight and the claimant should act on the day of the levy. The forms are 55 (summons in case of adverse claims) and 56 (order).
Who typically claims
| Claimant | What must be shown |
|---|---|
| Spouse or relative living in the debtor’s house | That the goods are theirs: receipts, the source of the money, who uses them. Household goods bought jointly during a marriage are the difficult case |
| Bank or finance company | The chattel mortgage or hire-purchase agreement and the amount still owing; the Manual gives this as the standard example |
| Employer | That the vehicle or tools seized are the employer’s, issued to the debtor for work |
| Landlord claiming rent | Section 179(a)(ii) allows a claim for rent due for the premises where the goods were seized, which at common law ranked ahead of execution |
| Supplier of stock on consignment | That title had not passed to the debtor |
The hearing
The Court hears the creditor and the claimant; the debtor is not a party to the summons, though the Manual observes that he may be a useful witness and the Court can summon him. The claimant bears the burden of proving ownership or a prior interest, on the balance of probabilities. The Court may order the goods released to the claimant, or sold with the proceeds paid to the claimant to the extent of his interest, or sold for the creditor, with costs as section 179(f) provides. Regulation 46 lets the Court borrow the National Court’s interpleader practice under the National Court Rules where the section is silent.
Finality and appeal
Section 178(4) makes the order final and conclusive on all parties, subject to an appeal under Part XI. A claimant who loses cannot bring a fresh action for the goods; a claimant who wins is protected against the creditor. Either may appeal to the National Court within one month under section 219, and the creditor should ask for the goods to be held pending appeal, since once sold they cannot be recovered.
Third-party claims to a debt
The same problem arises in garnishee proceedings when the garnishee says the money belongs to someone else or is subject to a lien. Sections 187 and 188 provide the equivalent procedure: the third person is ordered to appear and state his claim, and the Court may try the issue and bar the claim to the extent of the debt. See garnishee.
The District Courts Act and Regulation are not on PacLII; both are on vLex (Act, Regulation).
Before relying on anything here, read the current text of the District Courts Act (Chapter 40) and check for later amendments. The Act is not on PacLII; the figures and time limits quoted in this series come from the consolidation to No 8 of 2000, and the District Courts (Amendment) Act 2009 changes some of them once it is brought into operation. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.