Lindsey and Others v Conteh

South Africa

06.02.2024

Company

Onus lies with the Plaintiff to establish the jurisdiction, finality and conclusiveness of a foreign judgment, if so challenged

The Respondent was a businessman and citizen of the United States of America, (Mr. Conteh), who now resided in Bryanston, Johannesburg. On 12 August 2014, the Appellants, in the Superior Court of California, filed a complaint against Mr. Conteh. The lawsuit was categorised as a shareholder derivative suit, similar to a derivative action in terms of Section 165 of the Companies Act, 2008 in South African law. The basis of the complaint was that Mr. Conteh allegedly transferred shares of companies without the requisite permission from AWI. Incidentally, the transfers of those shares were to companies wholly owned by Mr Conteh.

The Appellants obtained an order of judgment by default on 13 May 2016. On 29 August 2016, the appellants returned to the Californian Superior Court and obtained an order against Mr. Conteh, which instructed him, forthwith to turn over the shares to the appellants. Thereafter, a writ of possession was converted to a writ of execution on 28 February 2017 with the judgment value assigned as US$93 million.

The high court dismissed the appellants’ application for provisional sentence. The high court concluded that, the judgment did not constitute prima facie proof of a debt enforceable by provisional sentence, as it did not comprise a liquid document.

The high court was correct to refuse provisional sentence. The onus lies with the plaintiff to establish the jurisdiction, finality and conclusiveness of a foreign judgment, if so challenged. The judgment debt contained in the California Court Orders was for the possession of property. It did not order Mr. Conteh to pay an amount of money, rather, it required Mr. Conteh to deliver up specified shares. The Court further held that although, the California Court Orders for the possession of property may be enforced in the same manner as a money judgment for the value of the property, which value the California Court had determined. Their enforcement, however, was only made possible, once the return of the property could not be obtained, as if they were a money judgment. Thus, by operation of law, if the property could not be obtained, a means of enforcement was secured to execute upon the value of the property. But, if the shares could have been obtained under writ, there could have been no election to enforce the California Court Orders as a money judgment. The California Court Orders did not constitute a money judgment, even though they were capable of enforcement as such, under specified conditions.

South African courts would not generally apply foreign rules of procedure in the exercise of its own adjudicative functions. The process of the California Court did not run through the territory of South Africa. How such process could have been given effect to was regulated under statute in terms of Section 40 of the Superior Courts Act, 2013. The section set out the basis upon which letters of request in connection with any civil proceedings received from any state, territory or court outside of South Africa could have been given effect to. It thus, suffices that, for the purposes of deciding this appeal, the summons sought provisional sentence based upon a foreign judgment that was not a money judgment. Once that was so, provisional sentence could not be granted, on the cause of action set out in the summons. The California Court Orders did not constitute a liquid document evidencing an unconditional acknowledgement of indebtedness, in a fixed sum of money. Appeal dismissed.

Tags : Sentence Refusal Legality

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