23 February 2021 by and Dispute Resolution Alert

Courts grappling with their own jurisdiction

Litigators would know that one of the many questions that must be asked when dealing with a new instruction, is which court has jurisdiction to deal with the particular matter. The purpose of this article is not to discuss what determines whether a court has jurisdiction over a matter, but it will discuss how at least two different divisions of the High Court have approached the question of their own jurisdiction to deal with certain matters. These approaches resulted in the Supreme Court of Appeal having to make a final determination on the question.

A simplified overview of jurisdiction of the various courts, based on the quantum of the claim only, can be summarised as follows: Magistrate’s Courts can deal with matters with a quantum up to R400,000.00 and the High Courts can deal with all matters. To illustrate the point, a plaintiff can sue a defendant in the Magistrate’s Court for a rand value not exceeding R400,000.00, and the same plaintiff can sue the same defendant in the High Court for any monetary amount. It is a well-established and accepted principle in our law that High Courts have concurrent jurisdiction over matters that fall within the jurisdiction of the Magistrate’s Court. As a disclaimer, it is generally not advisable from a cost point of view to pursue a defendant in the High Court for insignificant sums of money.

Most financial institutions that are forced, as a last resort, to repossess a debtor’s residential home prefer approaching the High Court for a number of reasons. By far the most compelling reason is that a debtor’s home is the roof over his and his family’s head, and in many instances, the single biggest asset of the debtor. The financial institutions prefer that the High Court oversees this process. The judicial system has recognised the importance of overseeing the repossession process, and in recent years has introduced amendments to the High Court rules ensuring that default judgments involving primary residences, and writs of attachment in respect thereof, can no longer be granted by a Registrar of the High Court. These matters must now be dealt with by a Judge in open court.

In 2018, the Gauteng Division of the High Court convened a full bench consisting of three judges. The full bench issued a Directive and called on interested parties to address, inter alia, the following issues: Why the High Court should entertain matters that fall within the jurisdiction of the Magistrate’s Court; and whether the High Court is obliged to entertain such matters falling within the jurisdiction of the Magistrate’s Court.

In a fairly scathing judgment handed down on 26 September 2018, the Gauteng Division of the High Court stated that it is an abuse of process to allow a matter which falls within the monetary jurisdiction of the Magistrate’s Court to be heard in the High Court. It further stated that irrespective of the principle of concurrent jurisdiction, the High Court is not obliged to entertain matters that could be argued in the Magistrate’s Court. The order that the High Court handed down was that with effect from 2 February 2019, all civil actions and applications where the monetary value claimed was within the jurisdiction of the Magistrate’s Court should be instituted in the Magistrate’s Court. In support of its findings, the High Court bemoaned the workload of the judges in the division, the lack of resources at their disposal and the number of applications and actions that are issued out of that division every day.

A similar scenario played itself out in the Grahamstown High Court in 2019. A full bench was convened and a directive, similar to the directive mentioned above, was issued, and interested parties were called on to make submissions.

In its judgment, the Grahamstown High Court voiced its view that there was some criticism that was rightfully directed at the Gauteng High Court’s judgment and that the judgment “…spreads the prohibition across the full range of actions and applications, without limit…“ and whether “…the result therein arose from an exercise by the Court of its inherent power to regulate its own process or a development of the common law.

The Grahamstown High Court accepted that for over a century the principle of concurrent jurisdiction has and still does exist, and that the High Court has inherent jurisdiction to regulate its own process by refusing to hear matters that constitute an abuse of process, a fact specific assessment being required in this regard on a case -by-case basis. It went as far as to say that a High Court does not have the power pre-emptively to prevent an abuse across all cases of a particular type unless empowered to do so by legislation or rules consistent with constitutional imperatives.

The Grahamstown High Court nevertheless made the following order. To promote access to justice in the context of the Magistrate’s Court Act and the National Credit Act, as read with sections 9 and 34 of the Constitution, and as from 1 August 2019, Civil Actions and/or Applications arising within the ambit of the National Credit Act should be instituted in the Magistrate’s Court having jurisdiction.

In respect of both judgments, the financial institutions that were parties to the matters and that were impacted by the orders, proceeded with applications for leave to appeal. In respect of the Gauteng matter, the full bench, after hearing lengthy argument, granted leave to appeal to the Supreme Court of Appeal. In respect of the Grahamstown matter, the full bench, on receipt of the various applications for leave to appeal, gave the leave without hearing any argument.

The two matters were consolidated for purposes of the appeal to the Supreme Court of Appeal. The appeals were argued under lockdown in August 2020 and the judgment is eagerly awaited.

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