Some do’s and don’ts when it comes to attaching bank accounts
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Topics Banking & Finance Law | Dispute Resolution | Family Law
03 Nov 2020
When judgment is granted, the creditor may issue a document referred to as a warrant of execution at the Court that granted the judgment in question. The warrant of execution contains details of the judgment, like the amount and interest. Most movable goods owned by the debtor are eligible for attachment, for example, furniture, vehicles, cash or banknotes, cheques, bills of exchange, promissory notes, bonds, securities for money belonging to the execution debtor and also cash held in the bank.
When attaching a bank account, for example, the correct process must be followed. In a recent case, Booysen v Absa Bank Limited and First National Bank and another (Johannesburg High Court Case Number: 25718/2018), the facts of the matter were briefly as follows:
There was an application for rescission of a default judgment granted by the Registrar of this Court (“the default order”), consequent upon which the applicant’s bank accounts with the Second Respondent (“FNB”) were attached without any notice or warning to her. Despite her attempts to establish why her bank accounts had been attached and what steps she could take to have her access restored, it was only when she approached this Court for urgent interim relief that the party responsible for this conduct, the First Respondent (“ABSA”), explained why it had caused her accounts to be attached in the first place.
On or about 8 April 2005, Thuthuka Telecom CC (“the close corporation”), opened a cheque account with ABSA (“the cheque account”) and it was afforded an overdraft facility on the cheque account. On or about 9 May 2005, the applicant’s husband, Andre Booysen, to whom she was at the time married in community of property, signed an unlimited deed of suretyship in terms of which he bound himself as surety and co-principal debtor jointly and severally in favour of ABSA, for repayment on demand of any sum or sums owed by the principal debtor in terms of the overdraft on the cheque account. On the same day the applicant signed a form in terms of which she consented to the joint estate being bound by her husband’s suretyship.
On 8 February 2013, the applicant and her husband divorced. The joint estate was dissolved by way of a settlement agreement made an order of Court in terms of section 7(1) of the Divorce Act 70 of 1979. During 2016 ABSA issued a summons against the CC as well as the Applicant among others. On 7 March 2017, the Registrar granted the default order against the applicant and Mr Booysen, jointly and severally, the one paying the other to be absolved, for payment of the outstanding amount plus costs and Sheriff’s fees (“the judgment debt”).
On 1 June 2018 ABSA’s attorneys obtained a writ of execution (movables) from the Registrar directing the Sheriff to attach all the applicant’s funds held in her bank accounts with FNB. On 13 June 2018, the Sheriff served the writ of execution (movables) on FNB as well as a notice of attachment under Rule 45(8) and 45 (12) attaching her right, title and interest in and to any or all her bank accounts held with FNB.
The Applicant submitted that a declaration of unlawfulness in the present matter is justified by the following:
- Firstly, the facts and circumstances relating to ABSA’s attachment to the applicant’s bank accounts;
- Secondly, that such attachment was without judicial authority and therefore wrongful;
- Thirdly, ABSA’s strict liability for the wrongful attachment regardless of fault;
- Fourthly, the harm the applicant suffered during her one month ordeal of being denied access to her bank account, and the justification for an award of general damages, alternatively that the quantification of damages be referred to.
The Supreme Court of Appeal has applied the requirement of judicial oversight to garnishee orders: South Africa Congo Oil Company (Pty) Limited v Identiguard International (Pty) Limited. The SCA held that an attachment in the form of a garnishee order “only followed upon an application to the 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.” The SCA clearly linked this rule to the common law: “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 to attach the debt owing by a third person to the judgment debtor.”
The Court granted the rescission of judgment as well as declared the warrant null and void. On attaching bank accounts, which is a valuable debt collection tool, it is essential to follow the correct procedure and to ensure that such action is Court sanctioned. University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others; Association of Debt Recovery Agents NPC v University of Stellenbosch Legal Aid Clinic and Others; Mavava Trading 279 (Pty) Ltd and Others v University of Stellenbosch Legal Aid Clinic and Others (CCT127/15)  ZACC 32; 2016 (6) SA 596 (CC); (2016) 37 ILJ 2730 (CC); 2016 (12) BCLR 1535 (CC) (13 September 2016).
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Mrs Nicolene Schoeman – Louw founded the firm in 2007, aged 24, and is now the Managing Director of the firm. Nicolene is an admitted Attorney of the High Court... Read more about Nicolene Schoeman-Louw