Dieter Schmidt v Birgitta Weaving

The respondent instituted an action against the appellant, a peregrinus who resided permanently in the United States of America. The respondent obtained an ex parte order from Foxcroft J authorizing the attachment ad fundandam or ad confirmandam jurisdictionem of the appellant's member's interests in three close corporations, including Le Cap International CC, TJ Walker CC, and Cape Skin Clinic CC. The deputy sheriffs attempted to attach these member's interests at the registered offices of the close corporations. The Registrar of Close Corporations was notified by letter that the member's interest had been attached, but no actual notice was given to the close corporations themselves. A copy of the court order was affixed to the main door of the registered office of Le Cap International CC at 8 Hampton Avenue, Newlands, where the occupier stated that neither the appellant nor the corporation was known to her. The appellant filed a special plea to jurisdiction, denying that any effective attachment had taken place.

• Whether a valid attachment ad confirmandam jurisdictionem of a member's interest in a close corporation requires actual notice to the close corporation itself
• Whether notice to the Registrar of Close Corporations is sufficient for a valid attachment of a member's interest
• Whether affixing a copy of the court order to the registered office under section 25 of the Close Corporations Act 69 of 1984 constitutes adequate notice for attachment purposes
• Whether jurisdiction can be founded or confirmed in the absence of a valid attachment

The appeal succeeded with costs, including those of two counsel. The order of the High Court dismissing the special plea was set aside and replaced with an order upholding the special plea with costs, including those occasioned by the employment of two counsel.

For a valid attachment ad confirmandam jurisdictionem of a member's interest in a close corporation, actual notice must be given to the close corporation itself. A member's interest in a close corporation constitutes a bundle of incorporeal rights against the corporation, analogous to a debt. Following the principle established in Reinhardt v Ricker and David, the debtor (in this case, the close corporation) must receive due notice of the attachment so that it knows not to discharge its obligation to the original creditor (the member) and has an opportunity to raise any relevant issues. Notice to the Registrar of Close Corporations is insufficient because the Registrar has no power to prevent transfer of a member's interest. Affixing a copy of the court order to the door of the registered office pursuant to section 25 of the Close Corporations Act does not constitute actual notice for attachment purposes, as that section only applies to documents required or permitted to be served under the Act or to service of process. Without a valid attachment, jurisdiction cannot be founded or confirmed over a peregrinus.

The court noted that it was unnecessary to decide whether the purported attachment was also invalid because the appellant's certificate of member's interest issued under section 31 of the Close Corporations Act was not attached. The court also found it unnecessary to determine whether the decision in Badenhorst v Balju, Pretoria Sentraal 1998 (4) SA 132 (T) could be distinguished and whether certain dicta therein (especially at 138J-139F) were correct. Additionally, the court did not need to decide whether the absence of a writ of attachment rendered the purported attachment invalid. The court observed that while the principle of effectiveness has been eroded to some extent (citing Thermo Radiant Oven Sales Ltd v Nelspruit Bakeries 1969 (2) SA 295(A)), jurisdiction will not be founded or confirmed if an article without saleable value is attached, and a fortiori if no valid attachment takes place at all.

This case establishes important principles regarding the requirements for attachment of incorporeal property, specifically member's interests in close corporations, to found or confirm jurisdiction over a peregrinus. It clarifies that actual notice to the close corporation is essential for a valid attachment of a member's interest, and that notice to the Registrar of Close Corporations or affixing documents to the registered office is insufficient. The judgment reinforces the principle that jurisdiction cannot be founded or confirmed without a valid attachment, and applies classical principles from Roman-Dutch law regarding attachment of incorporeals to modern corporate structures. It provides guidance on the scope and limits of section 25 of the Close Corporations Act 69 of 1984 regarding service of documents.