Interim Attachment - A New Diligence to Secure moveables
1 April 2008

Arrestment on the dependence has long been a tool for creditors when raising court actions. There was however a perceived gap in the available diligences on the dependence in that moveable goods in the hands of the debtor himself could not be secured in any way pending conclusion of a court action. That gap has now been filled by the introduction of the new diligence of Interim Attachment. This works very much along the lines of an attachment in execution of a decree. There are some differences that we note below.

Application for warrant to execute an interim attachment is made by the same method as now applies to warrants for interim diligences by either motion in ordinary actions or incidental applications in summary causes and small claims. The motion or incidental application is accompanied by a statement in either form G4a, 15a or 9a for these respective types of action.

The warrant may be granted without a hearing if the court is satisfied of the following:

  • the creditor has a prima facie case on the merits of the action
  • there is a real and substantial risk enforcement of any decree in the action in favour of the creditor would be defeated or prejudiced by reason of
    • the debtor being insolvent or verging on insolvency; or
    • the likelihood of the debtor removing or disposing of assets prior to any hearing
  • that it is reasonable in all the circumstances

The onus is on the creditor throughout the process to satisfy the court that the warrant should be granted. If the court decides that a hearing is required the warrant may still be granted at that hearing. A certified copy of the interlocutor granting the warrant is authority to officers of court to execute the attachment.

The attachment proceeds very much like a normal attachment whereby the officer will list assets belonging to the debtor and value them.

The list of items excluded from interim attachment is more extensive than for an ordinary attachment. Briefly, the exclusions are below;

  • Any item in a dwellinghouse
  • Any article excluded from attachment
  • A mobile home
  • Perishable items
  • Where the debtor trades any stock or materials for manufacture

In practice, accordingly interim attachments will be restricted to commercial premises and even there there are restrictions on stock and materials for manufacture

Contrary to what might have been expected, decree in the action does not give the creditor the right to sell the attached goods. Instead, once decree is granted the creditor has 6 months to attach the goods again failing which the interim attachment will fall. At that second attachment other goods belonging to the debtor may also be attached. It should be noted that both the expenses of the interim attachment and the attachment after the decree are recoverable from the debtor.

There are clear circumstances where the use of interim attachment is extremely restricted. On the other hand, there was a gap in diligence on the dependence as far as moveables was concerned and we have no doubt this will be a useful tool for creditors in the right circumstances.