Elscint (Pty) Ltd and Another v Mobile Medical Scanners (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Goldstone J
• Judgment Date: 10 December 1985
• Citation: 1986 (4) SA 552 (W)
• Hearing Date: 20 November 1985
• Court: Witwatersrand Local Division

Goldstone J:

The first applicant is a wholly-owned South African subsidiary of the second applicant. The latter is a F company duly registered and domiciled in Israel. On 31 December 1983 a written agreement was concluded for the purchase and sale of an X-ray machine known as the Elscint 2002M. In effect, the purchaser was the first respondent. The seller was the first applicant and the second applicant bound itself as surety and co-principal debtor for the due fulfilment G of all the former's obligations under the written agreement.

The first respondent alleges that the first applicant breached various obligations undertaken by it and in consequence thereof it has cancelled the written agreement. It has alleged claims for repayment of the purchase price of R2 755 708,27 and damages in the sum of R318 658,57 - a total claim, H therefore, of R3 074 366,84.

In terms of the written agreement the second applicant submitted to the jurisdiction of this Court. More particularly the provisions of clause 21 of the agreement read as follows:

"This agreement and the terms thereof shall be governed, construed and interpreted according to the laws of the Republic I of South Africa and the parties hereby consent to the jurisdiction of the Witwatersrand Local Division of the Supreme Court of South Africa in respect of any action which may arise out of this agreement or out of their respective relationships. This agreement of jurisdiction shall apply, notwithstanding the fact that the financial institution may be cited as a party to the proceedings."

The reference to "the financial institution" is not relevant J for the purposes of this judgment.

Goldstone J

A The main question which falls to be resolved in this application is whether, notwithstanding the submission to jurisdiction, the first respondent was entitled to attach property of the second applicant ad confirmandam jurisdictionem. It has done so by way of three ex parte applications to this Court. The applicants now seek to have B those orders, and the attachments made pursuant thereto, set aside.

In Thermo Radiant Oven Sales (Pty) Ltd v Nelspruit Bakeries (Pty) Ltd 1969 (2) SA 295 (A) the Appeal Court considered in some detail the approach of our Courts to the whole question of jurisdiction. The following statement of the law appears in the minority judgment of POTGIETER JA at 308G - H and was recently C cited with approval by HOEXTER JA in Barclays National Bank Ltd v Thompson 1985 (3) SA 778 (A) at 796H - J:

"Jurisdiction is, however, a somewhat abstract notion and I do not think that the word 'effectiveness' should be taken too literally. It should, I consider, not be equated with a guarantee that in every case the judgment of the Court would be satisfied completely. It has never been disputed that in our D law, as in English and American law, a Court has jurisdiction in respect of a resident incola on the principle of effectiveness; and the reason why the Court can give an effective judgment is because it considers that usually a person's possessions are where his home is, and that execution can be levied against those possessions. Yet it may happen that the amount of the judgment may to some considerable extent exceed the value of his possessions and that execution thereon E will, therefore, not satisfy the judgment. It has never been suggested that a Court can exercise jurisdiction in respect of a resident incola only if he has sufficient assets in the Court's territorial jurisdiction which will, on execution, completely satisfy the debt."

After citing that passage, HOEXTER JA said this:

"I would only add that it could hardly be successfully argued that a Court would lack jurisdiction in respect of a resident incola on the principle of effectiveness for the reason that he was a man of straw with no assets whatever."

F However, it was held in both the majority and the minority judgments in the Thermo Radiant case that the procedure of attachment to found or confirm jurisdiction is "... closely correlated with the principle of effectiveness". Per OGILVIE THOMPSON JA at 300H. However, as the learned Judge of Appeal observed, that principle -

G "... has been considerably eroded by the long-established practice of our Courts... to permit the attachment, to found or confirm jurisdiction, of property whose value bears no realistic relationship to the amount of the claim advanced in the proposed litigation. The authorisation of such attachments to found or confirm jurisdiction... has, no doubt, largely been actuated by the desire of our Courts to assist incolae to litigate at home."

H At 300H - 301A.

In Murphy v Dallas 1974 (1) SA 793 (D) at 797D - E LEON J said that:

"It may be correct to hold that the true reason for an attachment ad confirmandam jurisdictionem is not in order to render a judgment effective but in order to complete the Court's jurisdiction which, without such attachment, is only notional but not complete. I find it unnecessary, however, to express a firm view on this point because it seems to me that I the practice of our Courts and the authorities compel me to hold that an attachment is necessary."

Mr Cohen, on behalf of the first respondent, submitted that effectiveness was indeed the true reason for requiring such attachments. For the purpose of this judgment I shall assume that to be so. Whatever the true reason, Mr Cohen stressed that in any event a well-recognised second purpose of such J attachments is to enable the incola to execute on the attached property after judgment. The fact that one of the recognised

Goldstone J

bases for the attachment of jurisdiction is present, eg that A the contract upon which the incola sues was concluded within the jurisdiction of the Court, would not avoid the necessity of an attachment to confirm such jurisdiction. The incola is entitled to the benefit of the attachment and in that way to have some...