Solomon Okorley Ph.D, College of Johannesburg, and affiliated with the Analysis Centre for Personal Worldwide Legislation in Rising Nations on the College of Johannesburg.
Introduction
South Africa is without doubt one of the most developed nations on the African continent and a key nation within the Southern African Growth Group (SADC) and the BRICS (Brazil, Russia, India, China, and South Africa) financial bloc. Its standing in non-public worldwide legislation on the African continent is evinced because the nation on the African continent the place two very important devices of personal worldwide legislation had been adopted: the Conference on Worldwide Pursuits in Cell Gear (Cape City Conference) and the Mining, Agricultural and Development Protocol (MAC Protocol). Additionally it is a member of the Hague Convention of Personal Worldwide Legislation. Thus, growth in its non-public worldwide is prone to considerably influence the neighboring nations within the SADC area and the continent.
Within the latest case of Lindsey and Others v Conteh (774/2022) 2024 (3) SA 68 (SCA), the South African Supreme Court docket of Attraction dismissed an enchantment for the popularity and enforcement of a Californian judgment. The South African Supreme Court docket of Attraction held that “The California Court docket Orders don’t represent a liquid doc evidencing an unconditional acknowledgment of indebtedness, in a set sum of cash. The enchantment should accordingly fail” (para 35).
This case is critical as a result of the case addresses the popularity and enforcement of international judgment in South Africa and issues regarding provisional sentence. It’s, subsequently, a case that different SADC nations and customary legislation jurisdictions would discover useful when recognizing and imposing international judgments, particularly below the frequent legislation regime.
Details
The case outlined beneath considerations the popularity and enforcement of a Californian international judgment in South Africa. The temporary information of the case is as follows: The sixth appellant, African Wi-fi Integrated (AWI), is an organization registered when it comes to the legal guidelines of the State of Delaware in america of America; and the primary to fifth appellants are the shareholders of AWI. The respondent is a businessman and citizen of america of America and now resides in South Africa. The appellants filed a swimsuit in opposition to Mr Conteh, the respondent. The idea of the swimsuit was that the respondent had transferred some shares of AWI to corporations belonging to him with out the requisite permission of AWI.
Consequently, the appellants obtained a judgment by default. Additional, the Californian Superior Court docket ordered the respondent to show over the shares to the appellants. The courtroom additionally positioned a price upon the shares ‘for bond functions solely’. The appellants then introduced an ex parte software, which inter alia sought to transform the sooner courtroom order to a financial judgment. Nonetheless, the appliance was dismissed.
The case earlier than the Excessive Court docket
The appellants argued that the international default judgment and the post-judgment enforcement orders collectively constituted a ultimate and binding cash judgment. They additional argued that, by operation of legislation, the judgment was enforceable in the identical method as a “cash judgment for the worth of the shares”. It’s because it had been transformed right into a liquid and executable cash judgment below California legislation. Due to this fact, its nonpayment entitled them to hunt a provisional sentence. Nonetheless, the respondent contended that the international judgment was not a cash judgment; therefore, it was not a liquid doc. He averred that what was earlier than the courts was merely a judgment for the supply of shares.
The ruling of the Excessive Court docket
In keeping with the Excessive Court docket, ‘the judgment doesn’t represent prima facie proof of a debt enforceable by provisional sentence’, because it didn’t comprise a liquid doc. The courtroom decided that extrinsic proof on Californian legislation was essential to show that the order to show over the shares had been transformed right into a debt in financial phrases, thus constituting a cash judgment. The courtroom concluded that the necessity to resort to such extrinsic proof was inconsistent with South African courts’ common strict adherence to the necessities for granting a provisional sentence. Dissatisfied with this ruling, the plaintiffs appealed to the Supreme Court docket of Attraction.
Abstract of the Judgment of the Supreme Court docket of Attraction
The Supreme Court docket of Attraction extolled the significance of recognizing and imposing international judgment ‘in a world of ever higher worldwide commerce’ (para 26). It reechoed its earlier assertion in Richman v Ben-Tovim 2007 (2) SA 283 (SCA), the place it said that “it’s now properly established that the exigencies of worldwide commerce and commerce require ‘. . . that ultimate international judgments be recognised so far as is fairly attainable in our courts, and that impact be given thereto’” (para 25). The courtroom said {that a} courtroom judgment serves as prima facie proof of a debt owed and constitutes an acknowledgment of the indebtedness for the quantity specified within the judgment.
The central problem on this case was whether or not a collection of orders and two writs, granted by the Superior Court docket of California within the State of California, United States of America, cumulatively constituted a liquid doc that may be enforced by provisional sentence in South Africa. Thus, the Supreme Court docket of Attraction was invited to find out the true nature of the Californian courtroom orders in relation to the granting of a provisional sentence.
The appellants argued that the international judgment, when learn cumulatively, constitutes a liquid doc regardless of the preliminary judgment being for the turnover of shares. In keeping with them, as a result of a financial worth was ascribed to the shares and a writ of execution for the financial worth of the shares was issued, it’s ample to allow them to safe a provisional sentence.
The courtroom referred to the seminal case of Jones v Krok 1995 (1) SA 677 (A) to set out the situations to be met for the popularity and enforcement of a international judgment, particularly: ‘(i) that the courtroom which pronounced the judgment had jurisdiction to entertain the case based on the ideas recognised by our legislation just about the jurisdiction of international courts (typically known as “worldwide jurisdiction or competence”)? (ii) that the judgment is ultimate and conclusive in its impact and has not turn out to be superannuated? (iii) that the popularity and enforcement of the judgment by our courts wouldn’t be opposite to public coverage? (iv) that the judgment was not obtained by fraudulent means? (v) that the judgment doesn’t contain the enforcement of a penal or income legislation of the international state? and (vi) that enforcement of the judgment is just not precluded by the provisions of the Safety of Companies Act 99 of 1978, as amended…’. On this case, the events didn’t search to qualify these necessities (para 27).
In keeping with the courtroom, a provisional sentence is a “abstract treatment” that permits a judgment creditor with a liquid doc to acquire reduction rapidly with out initiating a trial motion (para 19). The liquid doc relied upon by the judgment creditor “should be a written instrument signed by the defendant acknowledging indebtedness unconditionally for a set sum of money,” and the judgment debt “should be fastened, definitive, sounding in cash,” which is “evident on the face of the doc” (para 21). Thus, the judgment creditor should fulfill the courtroom that the international judgment satisfies these situations so as to succeed below the proceedings for a provisional sentence. Beneath the proceedings for provisional sentence, the necessity for extrinsic proof nullifies the liquidity requirement. Nonetheless, over time, there was a shift away from the strict software of the precept of “the doc should converse for itself” in the direction of the necessity for “higher flexibility as to what proof extrinsic to the international judgment itself could also be permissible” (para 22).
The Supreme Court docket of Attraction said that the judgment debt contained within the California Court docket Orders was for the possession of property. That’s, the respondent ought to flip over the shares to AWI. Though the California courtroom decided the worth of these shares, it didn’t order Mr Conteh to pay an quantity; it solely required the respondent to ship up specified shares. On this problem, the Court docket of Attraction of the State of California had already held that the appellants ‘weren’t entitled to an precise cash judgment within the default judgment proceedings’ (para 11).
The SCA additional made two observations on the related provisions of California legislation. First, courtroom orders for the possession of property can’t be instantly enforced as a cash judgment upon issuance. Some steps have to be adopted: “The levying officer will need to have did not take custody of the property; made demand of the judgment debtor, if the debtor will be situated; the levying officer should then make a return that the property can’t be obtained” (para 31). It’s only when these steps have been adopted that the judgment for the possession of property can be enforced ‘in the identical method’ (para 31) as a cash judgment. Secondly, the Supreme Court docket of Attraction emphasised that though the related provisions of Californian legislation enable for the enforcement of the Californian Court docket Orders ‘in the identical method’ as a cash judgment, it doesn’t render the courtroom orders to be a cash judgment (para 31).
On why a courtroom order that may be enforced as a cash judgment below Californian legal guidelines shouldn’t be recognised and enforced by a South African courtroom, the Supreme Court docket of Attraction said that it “is a matter of sovereignty” (para 33). South African courts usually are not merely devices for imposing California courtroom orders. As well as, the summons by the appellants was for a provisional sentence and didn’t request a South African courtroom to implement the enforcement procedures of Californian legislation (para 34).
Most crucially, the courtroom said that as a result of the reason for motion set out within the summons was based mostly on a international judgment that isn’t a cash judgment, the provisional sentence can’t be granted (para 35). Additionally, the California courts didn’t represent a liquid doc for a set sum of cash. Thus, the Supreme Court docket of Attraction dismissed the case, however on a floor totally different from that of the excessive courtroom. The Supreme Court docket of Attraction reasoned that it was not the recourse of the appellants to extrinsic proof that rendered provisional sentence unavailable to them. As a substitute, the international judgment they relied upon is just not a cash judgment, therefore not a liquid doc (para 36). Consequently, the enchantment was dismissed.
Remark
This can be a case the place the judgment collectors sought the help of the South African courts to acknowledge and implement the California courtroom orders. It was a typical case of recognition and enforcement of international judgments. Nonetheless, the international judgment fell wanting the necessities to be glad when recognizing and imposing judgment sounding in cash. One of many acknowledged procedures for recognizing and imposing international judgment in South Africa is by means of provisional sentence. When making this software for a provisional sentence, the judgment creditor ought to be armed with a liquid doc. As a requirement, the judgment in query must be a cash judgment. Nonetheless, on this instantaneous case, based on the Supreme Court docket of Attraction, the California Court docket Orders don’t represent a liquid doc: the judgment obtained within the Californian courts was not a cash judgment. Consequently, based on each the Excessive Court docket and the Supreme Court docket of Attraction, as a result of this ‘mandatory’ requirement has not been met, the international judgment can’t be enforced by means of a provisional sentence.
In commonest legislation authorized programs, when recognizing and imposing a international judgment, one of many necessities is that the judgment ought to be a set sum of cash. Though it isn’t said clearly in SADC nations, it’s implicit within the process for imposing international judgments by provisional sentence summons, that are summons on liquid paperwork (para 21). On this case, the South African courtroom upheld this requirement and didn’t acknowledge the Californian courtroom orders, which didn’t represent a liquid doc. Though a financial worth had been positioned on the shares the respondent needed to switch, it was not deemed a cash judgment. Thus, the truth that a international courtroom order will be transformed right into a financial worth doesn’t change the character of the judgment right into a financial worth. For a judgment to qualify as a set sum of cash, it must be proven clearly within the international judgment that the judgment debtor is required to pay a particular sum of cash. Within the phrases of the courtroom, the debt should be “fastened, definitive, sounding in cash and evident on the face of the doc relied upon” (para 21). With out that, it doesn’t qualify as a financial judgment and can’t be acknowledged and enforced. The California judgment was not a cash judgment. Thus, it was not acknowledged and enforced by means of provisional sentence. It’s submitted that the Supreme Court docket of Attraction was proper to dismiss the enchantment on this floor. This determination by the Supreme Court docket of Attraction can be of nice significance to Southern African courts, that are influenced by the jurisprudence of South African courts (Standic BV v Petroholland Holding (Pty) Ltd (A 289-2012) [2020] NAHCMD 197).
This judgment additionally exhibits the clinging of South Africa’s courtroom to the frequent legislation concept of obligation (para 18). Per the idea of obligation, a international judgment will be acknowledged and enforced by initiating a brand new motion for the judgment debt. The rationale is that the international judgment imposes an obligation on the person in opposition to whom the judgment was rendered to pay the judgment debt. The declare to pay the judgment debt is separate from the unique explanation for motion that led to the judgment within the international jurisdiction. The judgment obtained on this new swimsuit, not the unique international courtroom judgment, is enforceable as a judgment within the home courts. Nonetheless, one shouldn’t be fast to pin this theoretical foundation on South Africa’s authorized regime. It’s because, in different instances of recognition and enforcement of international judgment which have come earlier than the South African courts, similar to Richman v Ben-Tovim (para 4) and the Authorities of Zimbabwe v Fick 2013 (5) SA 325 (CC) (para 56-57), different bases similar to comity and reciprocity have been talked about to be the premise for imposing a international judgment. One ought to thus be guided by the counsel of Booysen J in Laconian Maritime Enterprises Ltd v Agromar Lineas1986 (3) SA 509 (D), the place she noticed rightly that making an attempt to seek for a theoretical foundation was “a most fascinating and considerably irritating train to try to pin it down” (Laconian Maritime Enterprises Ltd v Agromar Lineas 1986 (3) SA 509 (D) 513). The courtroom thus noticed that the priority ought to be on the relevant authorized regime (that’s, whether or not frequent legislation regime or the statutory regime) and the stipulated situations for the popularity and enforcement of international judgment (Laconian Maritime Enterprises Ltd v Agromar Lineas 1986 (3) 509 (D) 516).
One other facet of this case considerations recognizing and imposing non-monetary international judgments. It’s submitted that the observe the place solely judgments sounding in cash are acknowledged and enforced is problematic and doesn’t mirror latest developments within the subject of recognition and enforcement of international judgment. A international judgment, past the requirement for the cost of a particular sum of cash, may additionally require that the judgment debtor carry out an act that features the switch of shares (like on this instantaneous case) or supply of property. There’s a want for growth in South Africa’s authorized regime to allow it to acknowledge and implement non-monetary international judgments.
Present legislative developments within the area of recognition and enforcement of international judgments enable for the popularity and enforcement of non-monetary judgments. As an illustration, the 2019 Hague Judgments Conference permits for recognizing and imposing non-monetary judgments. In keeping with the Garcimartín-Saumier Report, recognition and enforcement of international judgment “consists of cash and non-money judgments, judgments given by default.. and judgments in collective actions” (para 95). Additional, the Report provides that “Judgments that order the debtor to carry out or chorus from performing a particular act, similar to an injunction or an order for particular efficiency of a contract (ultimate non-monetary or non-money judgments) fall throughout the scope of the Conference”. Additionally, the Commonwealth Mannequin Legislation on Recognition and Enforcement of Overseas Judgment of 2018 permits for the popularity and enforcement of non-monetary judgments (Artwork 2). Even earlier than these legislative improvements, the Supreme Court docket of Canada, within the case of Professional Swing Inc v Elta Golf Inc ((2007) 273 DLR (4th) 663), had already held that the normal frequent legislation rule that limits enforcement to fastened sum judgments ought to be revised to permit for the enforcement on non-monetary judgments. Additionally, frequent legislation nations similar to Australia and New Zealand have all, by laws, performed away with the fastened sum of cash restriction (Australia: Part 5(6) of Overseas Judgments Act 1991; New Zealand: Part 3B of Reciprocal Enforcement of Judgments Act 1934).
These characterize present developments within the legislation, and thus, the courts in South Africa, as a part of their accountability to develop the frequent legislation (part 8(3) of South Africa’s 1996 structure), ought to incorporate this innovation so as to develop the frequent legislation on this regard the following time they’re seised with a case which requires them to acknowledge and implement a non-monetary international judgment.
Suppose South Africa’s authorized regime acknowledges and enforces non-monetary international judgments; the courtroom may need reached a unique conclusion relatively than outright dismissing the case and the enchantment. In that state of affairs, the California courtroom order, which required the respondent to switch shares to AWI, would have been able to being acknowledged and enforced by the South African courtroom. After the popularity and attainable enforcement of the order to switch the shares, the courtroom would subsequently be invited to find out how one can deal with the financial worth positioned on the shares to be transferred. Nonetheless, such a possibility was missed as a result of South African courts don’t acknowledge and implement non-monetary judgments.
