CREDITOR’S LIABILITY FOR IRREGULAR EXECUTION: SECTION 44 AS KNIGHT IN SHINING ARMOUR FOR INNOCENT THIRD PARTIES

When a party obtains a favorable money judgement [the judgement debt], they become a creditor to the party the said judgement disfavored [the debtor]. A judgement creditor may elect to enforce the judgement through, inter lia, a sale and seizure order [the warrant] to be executed by the Sheriff of Malawi [the Sheriffs]. By its very character, the warrant commands the Sheriffs to seize whatever goods of the debtor to satisfy the judgement debt.

It often occurs that instead of seizing the goods and chattels of the debtor, the Sheriffs irregularly seizes the goods of an innocent third party. In those unfortunate situations, the most popular remedy for the third party is to take out an interpleader summons/proceeding under Section 20 of the Sheriffs Act [the Act].

In the interpleader proceeding, the third-party claiming ownership of the seized movable property [the claimant] prays for an order for the delivery up of the goods from the Sheriffs upon proof of ownership of the seized goods.

For instance, in the cases of UK Security v Cargo Marketing International Ltd & Another Civil Cause Number 1733 of 2007 – HC – PR [UK Security] and Osman v The Registered Trustees of United Democratic Front Civil Cause Number 3307 of 2004 – HC – PR [Osman] the claimants’ interpleader summons taken under Section succeeded after the Sheriffs irregularly seized their goods instead of the actual debtors’ goods. The judgement creditors were also ordered to pay costs for the interpleader proceedings.  

Even though claimants have successfully repossessed irregularly seized goods through interpleader proceedings, we argue that the most effective way – in terms of both time and costs – is via Section 44 (3) of the Act. Our observation is that this is a path less trodden by most claimants.

Section 44 (3) of the Act [section 44 [3]] provides that:

In the execution of any process, all steps which may lawfully be taken therein shall be taken on the demand of the party who issued such execution, and such party shall be liable for any damage and costs arising from any irregular or illegal proceeding taken at his instance.

On close reading and true interpretation of section 44 [3], two things come out very clear. Firstly, the Sheriffs takes all lawful steps in levying execution on the demand of the party who issued the execution.

Secondly, section 44 [3] states that the party who issues execution is liable for any damage and costs arising out of any irregular or illegal proceeding taken at his instance. Admittedly therefore, section 44 [3] forms the very basis for placing liability for irregular execution by the Sheriffs on the doorsteps of the judgement creditor.

The Act does not define what an irregular or illegal proceeding is nor does it spell out what constitutes lawful steps. It is common knowledge however that a sale/seizure order or warrant of execution as used under the Act becomes lawful and regular after endorsement by the Court and the judgement creditor. In that sense, the judgement creditor only becomes liable under the provision for any irregular execution by the Sherriff where lawful steps are duly taken by the latter.

Interestingly, in the case of Country Wide Car Hire (2007) Ltd [Country Wide] v Tobacco Control Commission Civil Cause Number 268 of 2014 – HC – PR, the High Court declined to enter summary judgement against the defendant after the Claimant pleaded Section 44 of the Act. The Court opined that there was a serious dispute of law between the parties but never took the occasion to consider the section. Our most considered view is that the Country Wide case was decided per incurium Section 44 and cannot be authority for the proposition that a judgement creditor will not be liable to an innocent third party following irregular execution by the Sherriff.

The point to be made is that execution does not become unlawful merely because the Sheriff has seized goods of an innocent third party. Such execution remains lawful and only becomes irregular at the point of seizing goods of an innocent third party.

The import of Section 44 (3) therefore is that when levying execution, the Sheriff, as an ‘agent’, takes lawful steps to satisfy the demand of the judgement creditor as the principal and the party who issues the warrant. The liability of the judgement creditor for any damage and loss arising out of an irregular execution is in this sense grounded in the ‘agency’ relationship between the Sheriff and judgement creditor.

The general position at law is that the primary reason for holding the judgement creditor liable for wrongful execution is because the execution itself is procured at the instance of the judgement creditor. Judgement creditor benefits from regular execution. He must take the fall for irregular execution and make the claimant whole.

We submit that proceeding against a judgement creditor under Section 44 for any irregular execution by the Sheriff is therefore more advantageous and ought to be the claimant’s first port of call as opposed to taking out interpleader proceedings.

Unlike in interpleader proceedings where the claimant merely aims at recovering and taking possession of the irregularly seized goods, suing the judgement creditor directly in terms of Section 44 (3) ensures that the judgement creditor also pays the third-party damages for any loss occasioned because of the irregular execution.

If the claimants in the UK Security and Osman cases had elected to proceed against the judgement creditors pursuant to Section 44 (3), they would have easily recovered damages for inconveniences that arose from the irregular execution.

It is therefore hoped that innocent third parties victimized by irregular execution will in future utilize the section 44 remedy to directly sue the judgement creditor as opposed to merely taking out inter pleader proceedings. Section 44 is their knight in shining armour.