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High court cases against mortgagers owing small amounts irrational, Concourt hears

Standard Bank, Nedbank and FNB have been accused of avoiding the magistrate’s court and rushing to the high court for applications that result in home repossessions.Image: Mark Humphery

Standard Bank, Nedbank and FNB have been accused of avoiding the magistrate’s court and rushing to the high court for applications that result in home repossessions.Image: Mark Humphery

Published May 19, 2022

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It is an irrational use of the judiciary that banks take “hundreds upon hundreds” of default judgment applications against home loan debtors to the high court, the Constitutional Court has heard.

Advocate Matthew Chaskalson SC has made this submission in his argument on behalf of the South African Human Rights Commission (SAHRC), which is squaring off with three major banks over their inclination to apply for default judgments in the high court against home loan debtors who owe amounts as small as R7 000.

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The commission accused Standard Bank, Nedbank and FNB of avoiding the magistrate’s court and rushing to the high court for applications that result in home repossessions.

It held that the magistrate’s court was “more accessible than the high court to impoverished respondents”, in terms of being closer geographically and less expensive.

The commission sought to convince the apex court to rule that a high court was entitled to decline to hear default judgment cases.

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It said applications should be referred to the magistrate’s court, which has concurrent jurisdiction on them.

On the other hand, the banks maintained that the high court was obliged to hear matters brought to it, but which can also be entertained in the magistrate’s court.

The Supreme Court of Appeal found in their favour last year, prompting the SAHRC to approach the Constitutional Court for an appeal application.

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Chaskalson told the justices of the apex court that it was irrational that the high court entertained default judgment applications that should be heard at the magistrate’s court.

“There are very limited judicial resources in this country. High court judges are superior court judges who go through a rigorous screening at the Judicial Service Commission who are picked on the basis that they have the legal skills necessary to handle the types of disputes that come to the high court,” he said.

“If those judges are going to be spending a substantial portion of their time doing jobs that really ought to be handled at magistrate’s courts level, then it’s an irrational use of judicial resources and that we submit does implicate independence of the judiciary.

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“It also implicates access to court for everyone, other than the banks, who then have less available court time because so much of the resources of the high court are being devoted to cases which ought really to be dealt with elsewhere.”

Chaskalson said concerns about banks clogging up the court roll with default judgments were there already when this matter was first heard at the North Gauteng High Court in 2016.

“It’s clear to those of us who argued in the high court matter that there were concerns about access to court, but there were also concerns about tying up high court judges with hundreds upon hundreds of default judgment applications on a weekly basis,” he said.

“That is a very serious issue relating to the administration of justice and, we submit, to the institutional independence of the judiciary.”

@BonganiNkosi87

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