Supreme Court of Appeal (SCA) Judgement
Written by: Dylon Fisher and Salome Labuschagne
High Courts Have to hear matters even if quantum is within Magistrate’s Court jurisdiction.
In the past attorneys and financial institutions have been disallowed from instituting action out of the majority of the High Court where the quantum is less than R400 000, which has caused havoc with everyone’s processes and efficiency. We are pleased to note that this has now changed for the better.
In the matter of Std Bank vs Thobejane and Std Bank vs Mponga, the Supreme Court of Appeal which is the highest court in the country for these matters, has ruled that the High Court has to hear matters irrespective of the quantum, including those under R400 000 and there is no obligation in law for financial institutions to consider the cost implications and access to a court by a debtor to a court with competent jurisdiction.
In practice, this means that where a High Court and Magistrate’s Court both have jurisdiction, the Plaintiff can choose whether to proceed out of the High Court should they so choose, with the only provision being that the Plaintiff will only be awarded costs on a Magistrate’s Court Cost scale which makes it fair to the Defendant from a cost implication point of view.
Below is a complete summary of the judgement:
The Appeal concerned two matters[1], one handed down in the Gauteng Division of the High Court Pretoria and the other in the Eastern Cape Division of the High Court, Grahamstown. The matters concerned jurisdictional issues. The issues and disputes in essence were whether a High Court may refuse to hear a matter over which it has jurisdiction where another court has concurrent jurisdiction, the two circumstances which were presented were firstly when a High Court and the Magistrate’s Court both have jurisdiction in respect of the same proceedings, and secondly when the main seat of a Division of the High Court and the Local seat both have jurisdiction in respect of the same proceedings.
The reasoning of the jurisdictional disputes was twofold. Firstly, there was a concern that the rolls of the High Courts were being overfilled by matters which could have been heard in the Magistrate’s Court. The same reasoning applied to matters that could be heard in the local seat in Johannesburg rather than the main seat in Pretoria. Secondly, the argument was that poverty-stricken debtors were suffering prejudice in order to oppose a claim, they would have to travel to a High Court when the Magistrate’s court is more convenient to attend. There was a further concern as to the cost implications as in the event a debtor opted to oppose a claim, the cost implication would be much less in the Magistrate’s Court than the High Court.
THE GAUTENG COURT
The High Court held that suing for a sum which fell within the Magistrate’s Court jurisdiction was an abuse of the process and a violation of Section 34 of the Constitution which guarantees access to a court to address a dispute over any legal right. If a party is of the view that a matter falls within the Magistrate’s Court jurisdiction however decides it is more appropriate for the matter to be heard in the High Court Division, an application will need to be brought, setting out reasonable grounds as to why the matter should be heard in the High Court Division. The capability of other courts or more appropriately, the lack of capacity thereof, as well as the convenience of the Plaintiff, according to the High Court, would not constitute reasonable grounds. To remedy this, the Gauteng Court ordered that no matter, that could be brought in the Magistrate’s Court, could be brought out of the High Court and, in addition thereto, no matter that could be brough out of the Johannesburg seat of the High Court could be brought in the Pretoria seat. The High Court further ruled that only in exceptional circumstances and on application as aforementioned could the matter be brought to the relevant High Court.
THE EASTERN CAPE COURT
A majority of the Eastern Cape Court disagreed with the conclusion arrived by the Gauteng Court. The Court held that the National Credit Act (NCA) ousted the jurisdiction of the High Court when properly interpreted and that all matters that were regulated by the National Credit Act (NCA) should not fall within the jurisdiction of the High Court. In addition to the latter, the Court also held that in exceptional cases the High Court could hear such a matter.
SCA’s RESPONSE TO THE GAUTENG COURT
“The SCA held that the High Court has no power to refuse to hear a matter within its jurisdiction. The SCA rejected the idea that it was an abuse of the process to choose to sue in the High Court when the Magistrate’s Court also had jurisdiction. It held that such a choice could not be an abuse because the law gave a plaintiff or applicant exactly that right. A court could not, pursuant to its inherent jurisdiction, overturn that right. The inherent jurisdiction of a High Court to regulate and protect its process was available to address acts that exploited the process for improper purposes, but to exercise a right to choose a court of jurisdiction could not constitute such an abuse. Section 34 of the Constitution was not infringed as it did not go further than to guarantee that there must be a court that could hear any claim about a right”[2].
SCA’S RESPONSE TO THE EASTERN CAPE COURT
“The SCA examined the provisions of the National Credit Act and concluded that not only did the National Credit Act not reserve jurisdiction to the Magistrate’s Court but that there were several provisions that indicated plainly that the High Court has concurrent jurisdiction. The threshold to oust the jurisdiction of the High Court is high and there was no cogent reason to justify an inference that it had been ousted”[3].
THE RESULT
The SCA held that[4]:
- The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrate’s Court, if brought before it, because it has concurrent jurisdiction with the Magistrate’s Court;
- The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrate’s Court because the High Court has concurrent jurisdiction;
- The main seat of a Division of a High Court is obliged to entertain matters that fall within the jurisdiction of a local seat of that Division because the main seat has concurrent jurisdiction;
- There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings.
Contact Dylon Fisher or Salome Labuschagne at Hammond Pole Attorneys if you have any enquiries about the above judgement.
011 874 1800
[1] 25 June 2021- MEDIA SUMMARY: THE JUDGEMENT DELIEVERED IN THE SUPREME COURT OF APPEAL.
[2] 25 June 2021- MEDIA SUMMARY: THE JUDGEMENT DELIEVERED IN THE SUPREME COURT OF APPEAL.
[3] 25 June 2021- MEDIA SUMMARY: THE JUDGEMENT DELIEVERED IN THE SUPREME COURT OF APPEAL.
[4] Std Bank vs Thobejane and Others (38/2019&47/2019) and Std Bank vs Gqirana NO and Other (999/2019[2021] ZASCA 92