INTERPLEADER PROCEEDINGS

Question 1

What is an interpleader proceeding?

Answer 1

• This is a proceeding filed by a person holding property that is being adversely claimed by two or more people
• It is filed by an interpleader for the court to determine who the lawful owner of the property is
• If the application is made by a defendant in a suit, the court may stay all further proceedings in the suit and proceed with the interpleader only (Order 34, Rule 3, CPR)

Question 2

How is an application for interpleader proceedings made?

Answer 2

The application is made by way of an Originating Summons, unless made in a pending suit, in which case it shall be made by way of a Chamber Summons (Order 34, Rule 1, CPR)

Question 3

What does the applicant need to satisfy in interpleader proceedings?

Answer 3

• The applicant must satisfy the court by way of an Affidavit that:
  a) The Applicant is a neutral party with no claim or interest whatsoever in the subject matter, other than
  costs/charges;
  b) There is no collusion between the applicant and either of the parties; and
  c) The claimant is willing and ready to deal with the subject matter in whatever manner the court directs (Order 34, Rule 2, CPR)

Question 4

How is an application for interpleader made?

Answer 4

• Where an action has been commenced by one or more claimants against the holder, the application is made by way of an interlocutory application
• Where an action has not been commenced, the application is made by way of an Originating Summons supported by an Affidavit (Order 34, Rule 1, CPR) * The summons must be served on all the parties that are claimant as against the property or money relief, if the proceedings have already been issued (Order 34, Rule 1, CPR) * If proceedings have not yet been issued, the court may either:
  a) Order that the issue be stated and tried, with a direction as to who should be the Plaintiffs and who the Defendants;
  b) If all the parties’ consent or the facts are not in dispute, summarily determine any question of law and resolve the dispute; and
  c) If a claimant fails to attend, order that they be barred from prosecuting their claim against the applicant
• An application for interpleader should be supported by an affidavit showing the following:
  a) That the applicant claims no beneficial interest in the property in dispute, other than charges or costs – an application is barred when they have no claim to the subject matter of the claim but have a financial stake in the result of the proceeding
  b) That the applicant has not colluded with any claimant to the property; and
  c) That the applicant is willing to deliver the property to the court or to dispose of the property as the court directs

Question 5

What are the CPR RULES FOR INTERPLEADER PROCEEDINGS?

Answer 5

CPR PROVISION WHAT IT STATES
Order 34, Rule 4 If the claimant appears in pursuance of summons, the court may order either a claimant be made defendant in any suit commenced, or issues between claimants be stated and tried, where the court will direct who shall be the plaintiff or defendant
Order 34, Rule 5 The court may, with consent of one or both of the parties, and with regard to the value of the subject matter, where desirable, dispose off the merits of the claim and decide on the matter summarily on such terms as may be just
Order 34, Rule 7 Should a claimant be served with summons o appear to substantiate their claim and they do not appeal or they do not comply with any order made after their appearance, the court may make an order declaring them and any other person claiming under them forever barred against the applicant
Order 34, Rule 7 No such order, however, shall be sustained against the Government, unless upon application by summons to be served not less than 7 days before the return day
Order 34, Rule 8 Where the issue is a question of law and facts are not disputed, the court may decide upon that question without the trial of an issue
Order 34, Rule 9 The applicant may be granted relief even if the titles of the claimant have no common origin and may be adverse to, or independent of, each other

Question 6

How does liability in Interpleader work?

Answer 6

• Liability in interpleader applications only lies when the applicant is liable to only one of the claimants in respect of the subject matter
• An interpleader relief will be refused where it appears that the applicant is liable to both the claimants (Greatovex v Shackle) * Interpleader applications are generally refused when the matter can be adjudicated upon in other proceedings
• An application for interpleader relief should be made immediately before or after the commencement of the proceedings
  and should not be granted where:
  a) A claimant has already obtained judgment against the applicant for a debt; or
  b) Where the applicant has already paid over the money to a claimant entitled to the relief; or
  c) Where the judgment has been given by consent (Plant v Collins)

Question 7

How is an application determined by the court in Interpleader proceedings?

Answer 7

• On hearing the application for interpleader relief, the court will usually grant an order releasing the applicant from the conflicting claims and order the payment of their costs and charges upon delivering custody of the property to the court
• The charges would include the applicant’s out-of-pocket expenses for their care and trouble with custody of the property
• The granting of interpleader relief is discretionary and cannot be claimed as a right
• The court will exercise its power when it is satisfied that, in the circumstances of the case, it is just and proper that relief
  should be granted (Ex Parte Mersey Docks and Harbours)