First Rand Bank Ltd v Mostert
| Jurisdiction | South Africa |
| Judge | HF Brauckmann AJ |
| Judgment Date | 30 July 2020 |
| Docket Number | 4050/18; 3269/19; 3166/19 |
| Hearing Date | 30 July 2020 |
| Citation | 2020 JDR 1499 (MN) |
Brauckmann AJ:
INTRODUCTION:
The Judge President of this, the newest Division of the High Courts of South Africa had this to say about access to justice in the context of plaintiffs issuing summonses against home owners ("consumers") in matters where the banks called up the security they held over immovable property in the Mbombela circuit Court (as it then was), whilst the debtors resided , and the immovable properties were situated closer to the Middelburg circuit Court:
"Our Constitution guarantees everyone the right of access to courts which are independent of other arms of government. But the guarantee in section 34 [1] of the Constitution [2] does not include the choice of procedure or forum in which access to courts is to be exercised. This omission is in line with the recognition that courts have an inherent power to protect and regulate their own process in terms of section 173 of the Constitution [3] to which I will turn in a moment. In Chief Lesapo v
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North West Agricultural Bank and Another [4] , the Constitutional Court underscored the importance of access to courts in these terms:
'The right of access to court is indeed foundational to the stability of an orderly society. It ensures the peaceful, regulated and institutionalised mechanisms to resolve disputes, without resorting to self-help. The right of access to court is a bulwark against vigilantism, and the chaos and anarchy which it causes. Construed in this context of the rule of law and the principle against self-help in particular, access to court is indeed of cardinal importance. As a result, very powerful considerations would be required for its limitation to be reasonable and justifiable.'" [5] [Own emphasis]
With this very often quoted paragraphs from the well-known judgment by the Constitutional Court in mind, and as background, I had to consider whether the matters referred to in the heading and the body of this judgment should have been instituted by the plaintiffs in this Court, or in the relevant Magistrates' Courts that had jurisdiction over the persons of the respective defendants/ respondents in the matters. All the matters came before me on the unopposed roll during the nation-wide lockdown on 06 July 2020.
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The appearance by legal representatives were the exception rather than the rule, and I decided to issue a directive to the parties' attorneys directing them to submit heads of argument on behalf of their clients addressing the question posed in the directive [6] . I also invited the local attorneys to file submissions, but only received heads of argument from the attorneys on behalf of Nedbank Ltd t/a MFC ("Nedbank") and Firstrand Bank Ltd ("FRB"). Of the heads of argument received, only those filed by the attorneys and counsel for Nedbank were of assistance, and I wish to thank them for their contribution. I was surprised by the fact that more attorneys did not join in the debate. The standard of FRB's attorney's heads of arguments was disappointingly poor and virtually of no assistance to the Court.
THE COURT'S DIRECTIVE AND CONCERN
In the directive issued to all relevant attorneys the following was stated:
The practitioners involved in the matters must file Heads of Argument with the Registrar and my secretary before 17
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July 2020 at 12h00 addressing the following pertinent questions:
4.1 Whether the Magistrates' Courts Act [7] ("The MCA") and National Credit Act, Act 34 of 2005 ("The NCA") in respect of NCA matters, and, in context, and through the prism of the Constitution of the Republic of South Africa 1996 proper effect to section 9 equality right and the section 34 right of access to justice can be achieved if magistrates' court matters (relevant to the NCA) being brought in the High Court, in the context of the creation by the legislature of specific methods and processes to afford the previously disadvantaged and currently financially deprived with specific means of access to the magistrates' courts as the appropriate forum.
4.2 Whether the provisions of the NCA, properly interpreted through the prism of the Constitution, create a specific set of structures and procedures relating to NCA matters which, read in context and on an interpretation, by necessary implication provides for the magistrates' court to be the court of first adjudication in all NCA matters, to the exclusion of the High Court as a court of first adjudication, save only in the event that there are unusual or
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extraordinary factual or legal issues raised which in the opinion of the High Court warrant them being heard first in the High Court.
5. Take note that the Court is not seized with the broader question whether the High Court should entertain matters that fall within the jurisdiction of the magistrates' courts; Or whether the High Court is obliged to entertain matters that fall within the jurisdiction of the magistrates' courts purely on the basis that the High Court may have concurrent jurisdiction; Or whether there is an obligation on financial institutions to consider the cost implication and access to justice of financially distressed people when a particular forum is considered. That is not before this Court at this stage" [8] [Own emphasis]
Many defendants that are sued by credit providers and financial institutions from out of this Court lives in the countryside towns and on farms surrounding the seat of the Court (Middelburg – Mpumalanga) as well as the Main Seat in Mbombela. When the financial institutions decide to take to the courts to enforce its rights in terms of the agreements, the defendants are normally in arrears with their obligations for some reason. There is an expectation that as a result of the COVID-19 pandemic, the resultant insolvencies of employers and large-scale retrenchments, the Courts will become inundated with legal processes that are issued to recover outstanding debts from consumers that defaulted and failed to comply with their obligations
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in terms of the credit agreements concluded in better times. Some defendants are indigent people, and often very poor. The NCA was, amongst other, enacted to help previously disadvantaged citizens to secure access to credit that they would in the past not qualify for, and to eventually protect them against some unscrupulous large finance houses and financially strong creditors. Before credit is granted to a consumer his or her ability to service these loans must also be considered by the financiers to prevent reckless credit to be granted to consumers who were for so long, unfairly deprived from access to credit.
Almost every town in this Court's jurisdiction has its own Magistrates' Office and civil Court. If a town does not have such an office, a periodic Court will be in close proximity of the town. Only Mbombela and Middelburg are home to seats of the High Court in Mpumalanga, and is situated a fair
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distance from most of the towns resorting under its jurisdiction. The distances to be travelled between these outlying towns and the High Courts sometimes constitutes a serious deterrent to consumers who are already financially distressed and reliant on public transport that becomes ever more expensive to attend Court. Not all the residents of these outlying towns have access to their own transport. Making use of the public transport has its own challenges as well. The economy has not exactly been performing at its best the last decade either. Many consumers are also farm workers, residing on farms dependent on the employers' goodwill to provide them with transport to the closest town in order to secure public transport to the Courts.
Every Magistrates' Court is manned by one or more properly trained and competent Magistrates, or judicial officers. They have competent staff and are capable of handling all civil matters coming their way. The judicial officers regularly attend training courses, and have generous access to all the acts, law reports and legal reference works to keep them updated on the developments in the law. They are also well versed in NCA-matters.
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This has been the state of affairs since the dawn of our democracy, and everybody should have access to the courts and the protection it offers through the capable judicial officers manning it applying the law and upholding the Constitution of South Africa. [9] However, I am of the view that most of our citizens are being deprived of equal access to the courts by credit providers instructing its attorneys to institute legal proceedings in matters based on the NCA in the country's High Courts as court of first instance and not in the Lower Courts as was the intention of the legislator when it drafted the NCA.
THE MATTERS BEFORE COURT AND THE NATURE THEREOF:
There were initially five matters that were included in the directive above, but two of the plaintiffs decided not to proceed with the matters. The attorneys initially filed "Notices to Transfer the Matters to the Magistrates' Courts". After I indicated that it was not an option considered by the Court, the attorneys for the plaintiffs simply withdrew their clients' actions without providing any reasons.
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This Court, when sitting as unopposed Court is inundated with cases issued by the Registrar that falls within the monetary jurisdiction of the Magistrates' Courts, most of which has its cause of action to be found in the NCA. In some of the matters the quantum is far below R 50 000.00. Matters that could more cost effectively have been dealt with by the Magistrates' Courts. So too matters in which the parties agreed, and consented to the jurisdiction of the Magistrates' Courts for the...
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