ARREST TO FOUND OR CONFIRM JURISDICTION IS UNCONSTITUTIONAL: A BRIEF LOOK INTO THE CASE OF BID INDUSTRIAL HOLDINGS (PTY) LTD V STRANG & OTHERS [2007] SCA 144 (RSA) – SALLY D’ARCY-DONNELY

Tuesday, May 06, 2008
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The enactment of the Constitution of the Republic of South Africa Act, 1996 (“the Constitution”) has brought many a change to our previous legislation which entitled the arrest of persons in civil litigation. The landmark case of Coetzee v Government of the Republic of South Africa; Matiso & Others v Commanding Officer, Port Elizabeth Prison & Others 1995 (4) SA 631 (CC) brought about the unconstitutionality of Sections 65A to 65M of the Magistrate’s Court Act which entitled the imprisonment of judgement debtors in the instance where they were unable to pay their debts. The Constitutional Court’s decision was premised on the finding that these provisions were inconsistent with the right to personal freedom entrenched in the Constitution.
 
Subsequent to this, the Magistrate’s Court Amendment Act 81 of 1997 was enacted for the purposes of abolishing all of the provisions in Sections 65A to 65M relating to the imprisonment of judgement debtors.
 
Section 19(1)(c) of the Supreme Court Act 59 of 1959 (“the Act”) dealing with the jurisdiction of the High Court presently provides as follows:
 
“(c)…. ,any High Court may-
 
(i)                  issue an order for attachment of property or arrest of a person to confirm jurisdiction or order the arrest suspectus de fuga also where the property or person concerned is outside its area of jurisdiction but within the Republic: Provided that the cause of action arose within its area of jurisdiction; and
 
(ii)                where the plaintiff is resident or domiciled within its area of jurisdiction, but the cause of action arose outside its area of jurisdiction and the property or person concerned is outside its area of jurisdiction, issue an order for attachment of property or arrest of a person to found jurisdiction regardless of where in the Republic the property or person is situated.” (my emphasis).
 
These provisions relate to founding or confirming jurisdiction of a High Court in instances where the defendant in a civil matter is not resident or domiciled in South Africa, in other words, he is a foreigner. The general principles relating to the jurisdiction of a High Court are that either the court within which area the defendant resides or is domiciled has jurisdiction to hear the matter or the cause of action (for example the contract or a delict) must have arisen within the court’s area of jurisdiction. In the former case, this principle cannot be applied to a foreigner.
 
Accordingly, our law has developed in order to allow a resident plaintiff access to our courts so as to avoid the expense of suing a foreign defendant in another country. However, to proceed on such a basis, the court in question has to have jurisdiction, which involves a two-pronged approach. The court must be in a position to take cognisance of the suit in question and secondly, be able to give effect to any judgement which is handed down, the latter being referred to as the doctrine of effectiveness.
 
Thus, irrespective of whether the cause of action (for example the contract or a delict) arose within the jurisdictional area of a court, if the defendant is a foreigner, then an attachment or arrest is necessary to found or confirm the jurisdiction of a South African court. The cause of action element merely determines whether the plaintiff is going to bring an application to found jurisdiction (where the cause of action did not arise within the court’s jurisdiction) or an application to confirm jurisdiction (where the cause of action did arise within the court’s jurisdiction).
 
Given the Coetzee decision (supra), it was a matter of time before the provision of arrest was challenged on constitutional grounds. In the Bid Industrial case (supra), the appellant sued the two respondents, who were resident and domiciled in Australia, for delictual damages. In order to found jurisdiction of the Johannesburg High Court, the appellant applied for an order for the respondents’ arrests.
 
The respondents opposed the application on two grounds, the one being that, on the merits, there was no prima facie case against the respondents and the second being that foreign nationals, whilst in South Africa, enjoyed the protection of the Constitution and their arrest would be contrary to the Bill of Rights. For the purposes of this article, the former ground will not be dealt with.
 
The Minister of Justice (“the Minister”) was joined to the application due to the constitutional challenge of the legislation. The Minister’s submission was that the legislation was not unconstitutional as the provisions were enacted to give effect to a plaintiff’s rights under section 34 of the Constitution (the right to access to courts). The court could also exercise its discretion in granting an application for arrest by balancing the rights of the plaintiff and the defendant. Lastly, the Act spoke of “arrest” only and not actual detention.
 
The Court, in handing down its judgement, reiterated that the crucial jurisdictional purpose of attachment and arrest was to enable the Court to hand down an effective judgement. In deciding whether arrest of a foreigner would achieve this purpose, the Court considered various aspects. The first was whether arrest infringes on the rights to freedom and security of the person.
 
The Court disagreed with the argument raised by the Minister that arrest in terms of Section 19(1)(c) of the Act was merely a symbolic act and did not require actual detention. The Court held that as there is no legal obligation on a foreigner to either consent to the jurisdiction of a South African court or to provide a monetary basis to avoid the arrest, the legislation could only have contemplated actual detention. Jurisdictional arrest is thus aimed at limiting the defendant’s liberty. In determining whether this is unconstitutional, the Court had to consider whether there was a “just cause” for such a limitation.
 
In considering whether the arrest of a defendant would result in an effective judgement, the Court distinguished between attaching property and arresting a person. In the former, there is no infringement of constitutional rights and the property itself would serve to secure the payment of any judgement handed down against the defendant. Arrest would achieve neither of these results. Arrest would only serve to coerce a defendant to make payment of the debt claimed or to provide security therefor in order to guarantee his liberty and prevent imprisonment. In both instances, it cannot be said that there is “just cause” in arresting the defendant.
 
To declare the provision of arrest unconstitutional, the Court had to give cognisance to whether the limitation requirements of Section 36 of the Constitution had been satisfied. As stated above, the purpose of jurisdictional arrest was to allow a resident plaintiff to institute proceedings against a foreigner in order to avoid the trouble and expense of suing abroad. The Court opined that there were less restrictive means to establish jurisdiction than arrest and the common law needed to be developed to provide alternative possibilities to jurisdictional arrest, especially in matters where attachment is not possible.
 
The Court went further to state that the common law, through case law, needed to be developed to decide whether jurisdiction against a foreigner can be established without arrest or attachment. Substitute practices, other than arrest, are required. The Court used the example of the enforcement of a foreign civil judgement in South Africa, where a South African court confers jurisdiction on a foreign court by the mere physical presence of the defendant in that country at the time of the institution of the proceedings.
 
In giving consideration to legally competent alternatives to arrest, the Court held that a court could consider a suit in an instance where the summons was served on the defendant whilst the defendant was present in South Africa and there was an adequate connection between the suit and the court’s jurisdiction, such as the cause of action arose in that court’s jurisdiction.
 
In light of the above, the Court declared the abolition of the common law rule of arrest and in lieu thereof, should attachment not be possible, then a “South African High Court will have jurisdiction if the summons is served on the defendant while in South Africa and there is sufficient connection between the suit and the area of jurisdiction of the court concerned so that disposal of the case by that court is appropriate and convenient.” Accordingly, Section 19(1)(c) of the Act was made redundant and ordered to be removed by legislative amendment and until this happens, the section must be read down.
 
Once again, the Constitution has resulted in face of civil procedure in South Africa changing to fall within the realms of what is considered by our courts to be “reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom” (Section 36(1) of the Constitution).
 
Sally D’Arcy-Donnelly is a senior associate at Bowman Gilfillan.