Legal assistance can help to regulate stokvel

2018-11-28 06:01

In an effort to recover money from a stokvel member who is in default, or who may misappropriate money, it is always advisable for the innocent members to call in the assistance of a legal practitioner.

Matimba Hlungwane, corporate attorney at Legal Aid South Africa, indicates that a summons will have to be served on the member by the sheriff within a period of three years from the date of the alleged misappropriation of money.

If this does not occur within the three-year period, the innocent members will no longer have legal recourse.

Upon receipt of the summons, the member has an option of admitting liability by consenting to judgment, or defending the claim.

“Where the member consents to judgment, the clerk of the civil court will enter judgment on behalf of the innocent members,” Hlungwane says.

“The guilty member may make payment arrangements or make a payment in full to settle the claim.

“In the event that the guilty member is unable to settle the claim, after judgment has been granted against him or her, the innocent members may issue a warrant of execution and instruct the sheriff to sell the member’s assets to recover the judgment amount.”

In the event that a member does not receive the full or expected contributions he or she made to the stokvel, Hlungwane says the member will have recourse against the stokvel, but not against its individual members.

“The member has to follow a civil route, unless the member’s claim will be that the other members unlawfully misappropriated the stokvel’s money. Should that not be the claim, the member can proceed by way of a civil action through the issuing of summons.”

If a contributing member passes away before he or she receives the contribution, the beneficiaries of the deceased member’s estate will ordinarily have a claim for the money the member would have been entitled to.

“However, the question as to whether the beneficiaries can claim against the stokvel or not will depend on the terms of the stokvel,” Hlungwane says.

“The prospective claimant will be guided by what the terms of the stokvel provides. “

Members have limited legal options if the stokvel has no constitution.

“Even where there is a constitution, there may be costs involved in recovering the money from the guilty party. It is always worthwhile to speak to a legal expert before esta­blishing or joining a stokvel.”

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