Cape Town - The Constitutional Court will today hear the SA Human Rights Commission’s (SAHRC) case against three major banks for their tendency to apply for default judgments in the high court against debtors who owe amounts as small as R7000 on their home loans.
The three banks are Standard Bank, Nedbank and FNB, which are the first to third respondents, respectively. The fourth to 16th respondents are individuals against whom summonses were issued in the high court by the banks in various matters.
The cases involved instances where the banks were claiming payment in respect of alleged default on mortgages or motor vehicle credit and these were consolidated and heard by a full bench of the high court.
During that case, the Gauteng Judge President issued directions requiring the parties to argue, among other issues, whether financial institutions had an obligation to consider the costs implications and access to justice of financially distressed people when choosing a court before which to institute claims against such people.
The full bench ruled that either of the provincial and local divisions of the high court may transfer a case to the other if it is in the interests of justice to do so.
It ruled that there was an obligation on all litigants to consider access to justice when filing actions or applications, and that the courts had a duty to guarantee access to justice by exercising proper jurisdictional oversight.
The banks were unhappy with this ruling and appealed to the Supreme Court of Appeal (SCA), which said a high court lacked the authority to decline to consider a case that fell under its jurisdiction, and that it was in fact obliged to hear such matters.
At the Constitutional Court, the SAHRC is seeking leave to appeal against the SCA decision and has aligned itself with the position taken by the full court.
The SAHRC will argue that the Constitution does not oblige the high court to hear all matters falling within its jurisdiction.
The SAHRC’s lawyers will also argue no statute compels the high court to exercise the jurisdiction it may have over a particular matter and, as such, a high court was entitled to decline to exercise its jurisdiction over matters that can more appropriately be heard by other courts.
The SAHRC’s central argument is: “If banks are permitted to choose a high court, rather than a magistrate’s court, in which to bring their applications for default judgment against debtors, there is a substantial risk that poor debtors will be unable to defend their cases.”
They say that the principle that states that it is mandatory for a High Court to entertain matters that fall within its jurisdiction is not provided for in a statute and that it is actually a pre-constitutional common law principle which did not concern a case where there was a tension between it and fundamental rights.