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[2020] ZAWCHC 44
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Standard Bank of SA Ltd v Kekana; Standard Bank of SA Ltd v Mbedu; Standard Bank of SA Ltd v Mayaphi; Standard Bank of SA Ltd v Mbha; Standard Bank of SA Ltd v Van Zyl; Standard Bank of SA Ltd v Rodgers (19167/19; 16945/19; 16365/19; 17242/19; 14294/19; 21309/18) [2020] ZAWCHC 44 (25 May 2020)
REPORTABLE
Case
numbers: 19167/19
16945/19
16365/19
17242/19
14294/19
21309/18
In
the matters between:
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
LETLHOGONOLO
KEKANA
RESPONDENT
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
SANELE
MBEDU
RESPONDENT
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
THULANI
MAYAPHI
RESPONDENT
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
SIYAXOLA
MBA
RESPONDENT
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
DEREK
SANDY VAN
ZYL
RESPONDENT
STANDARD
BANK OF SA
LTD
PLAINTIFF
AND
JULIAN
ALROY
RODGERS
RESPONDENT
HEARD
:
29
JANUARY 2020
DELIVERED
: 25 MAY
2020
JUDGMENT
THULARE
AJ
[1]
The six matters are applications for judgment by default. They
served before the Registrar of the High Court in which
judgment was
refused in whole. The Registrar was of the view that the High
Court did not have jurisdiction in the matters
arising out of the
terms of the written agreement between the parties. The matters
were set down for hearing in open court.
The matter was heard
in the unopposed roll. After the hearing but before judgment,
the plaintiff filed the notice of
withdrawal of action in the second
case, that of Mbedu.
[2]
The issue is a clear and express choice of court clause in a contract
or simply the term of an agreement which provides for
a chosen forum.
[3] In the matter of
Kekana the applicable term is 25.8 and read as follows:
“
25.8 You
consent in terms of section 45 of the Magistrate’s Court Act,
for purposes of the Bank taking legal steps to enforce
any of its
rights in terms of this Agreement, to the jurisdiction of any
Magistrate’s Court having jurisdiction in the area
in which you
reside or work notwithstanding the amount involved. You do not
consent to the jurisdiction of the High Court
if the Magistrate’s
Court has concurrent jurisdiction.”
[4] In the matters of
Mayaphi, Mba and Van Zyl it is term 23.8 and read as follows:
“
23.8 This
agreement will be governed by and interpreted in accordance with the
laws of the Republic of South Africa and you hereby
consent in terms
of section 45 of the Magistrate’s Court Act 32 of 1944 (of) to
us taking legal steps to enforce any of our
rights in terms of this
Agreement, to the jurisdiction of any Magistrate’s Court having
jurisdiction in the area in which
you reside or work, despite the
amount involved. You do not consent to the jurisdiction of the High
Court if the Magistrate’s
Court has concurrent jurisdiction.”
Clause
23.5 of the agreement in the matter of Rodgers is in similar terms,
including the typographical error of the word ‘(of)’
after ‘1944’.
[5]
Kekana who resides in Bloubergstrand and Mba who resides in
Milnerton, are the only respondents who reside within the Magisterial
district of the Cape with a seat in Cape Town in which the High Court
has its main seat. Mayaphi resides in Langa in the
district of
Wynberg. Van Zyl resides in Sandbaai in the district of
Hermanus. Rodgers resides in Diazville in Saldanha
in the
district of Vredenburg. All are credit agreements related to
the purchase of a vehicle. Kekana concluded the
agreement in
Century City, Mayaphi in Parow, Mba in Khayelitsha, Van Zyl in
Hermanus and Rodgers in Ottery. All of them resided
within the
Regional Division of the Western Cape Magistrates’ Courts. Cape
Town, Wynberg, Vredenburg and Hermanus.
[6]
At the time that the plaintiff issued summons, the amount owing by
Kekana to the plaintiff was R50 949-62. The amount
owing by
Mayaphi was R183 035-47, Mba owed R270 221-96, Van Zyl owed R329
814-33 and Rodgers owed R257 334-28. Kekana and
Mayaphi’s
amounts fell within the jurisdiction of the district courts whilst
Mba, Van Zyl and Rodgers amounts fell within
the jurisdiction of the
Regional Courts.
[7]
It was clear to me what the initial concern was of the drafters of
the agreement on behalf of Standard Bank of SA Ltd (Standard
Bank).
This was specifically in relation to two questions. The
first was the determination of the forum for resolving
disputes
related to the agreement, depending on the amount owed at the time.
The second, which was also ancillary to the
first, was the
choice of the law, for instance the rules of court that would govern
recovery of the amount or the resolution of
a dispute. In my
view the mischief that the drafters identified was not pursued in
implementation. It did not find
support by those who were to
apply the terms and give effect to the agreement.
[8]
The parties in these agreements determined the forum in relation to
Standard Bank of SA Ltd (Standard Bank) taking legal steps
to enforce
its rights in terms of the agreement. The forum of first
instance was any Magistrate’s Court having jurisdiction
in the
area in which the defendant resided or worked, despite the amount
involved, if the amount was within the jurisdiction of
the
magistrates’ court. The pre-selection of a forum had its
benefits. It provided reasonable predictability
as to which of
the three courts would have jurisdiction at what point and which law
would apply.
[9]
The Republic of South Africa has a decentralized judicial system
[section 166 of the Constitution of the Republic of South Africa,
1996 (the Constitution)]. All the courts listed in section 166
of the Constitution have significant statutory as well as
operational
control over their own matters. The section listed the courts
in order of their hierarchy, starting with the
highest court in the
land at (a) (the Constitutional Court) and ending with the lowest at
(e) (any other court established or recognized
in terms of an Act of
Parliament, including any court of a status similar to either the
High Court of South Africa or the Magistrates’
Court). Of
significance, for purposes of this judgment, is (c) the High Court of
South Africa, which ranks above the Magistrates’
Courts at (d).
It is also necessary to point out that a court higher in rank
has appellate jurisdiction on the lower. Appeals
from the Traditional
Courts at (e) which exists in terms of the Black Administration Act,
1927, are justiciable in the Magistrates’
Courts, whilst
appeals from the Magistrates’ Courts are heard in the High
Court.
[10]
The change as regards the appellate jurisdiction appears in the ranks
from Magistrates’ Courts downward. Decisions of
the Small
Claims Court (at (e)) whose monetary jurisdiction is R20 000-00 are
not appealable in the Magistrates’ Courts.
In fact, they
are not appealable at all and a party may only apply for the review
of their proceedings, in the High Court.
Magistrates’
Courts are divided into the District Courts and the Regional Courts.
They are on the same rank.
They are similar but not equal
and as a result the Regional Courts do not have appellate
jurisdiction over decisions made
in the Magistrates’ Courts.
The monetary jurisdictions of the two courts also differ, and
the amounts of their jurisdiction
are determined by the Minister for
Justice. Currently the monetary jurisdiction of the District Courts
is R200 000-00 and the Regional
Court is R400 000-00.
[11]
Monetary jurisdiction of the High Courts (section 169(1)(b) of the
Constitution) and the Magistrates’ Courts
(section 29
of the
Magistrates’ Courts Act, 1944
) relate to our judicial system
(section 166 of the Constitution). It can safely be said that
the freely elected representatives
of the people, in order to improve
the quality of life of all citizens and to free the potential of each
person (preamble to the
Constitution) envisaged that monetary claims
as provided for in the Constitution and the
Magistrates’ Courts
Act, would
ordinarily be dealt with in the applicable courts. Two
objectives stand out in the preamble as the purpose given, by the
freely elected representatives of the people, for the establishment
of Magistrates’ Courts. It is their geographic
distribution throughout the national territory and the enhancement of
access to justice.
[12]
In my view, this is the ideal which the drafters of contracts for
Standard Bank individually and the parties collectively hoped
to
achieve. I do not understand the terms of the agreement to oust
the jurisdiction of the High Court. These were not
cases where
Standard Bank was deprived of its legal rights generally or prevented
from seeking redress at any time in the courts.
The
jurisdiction of the High Court was delayed to its proper position as
a court of appeal in matters justiciable in the Magistrates’
Courts in the ordinary course because of the amount involved. Simply
put, I understood the clause to mean that Standard Bank committed
to
the defendants that no right of action in the High Court would accrue
until the matter had been determined by a Magistrates
Court having
jurisdiction on any dispute that may arise between them. In my
view, the choice was made
bona
fide
. It
reasonably accorded with the general provisions of jurisdiction in
relation to the amounts related to the transactions
and therefore
legal. I understood it to be a consensual processes clause that
did not offend public policy as to procedural
fairness.
[13] The National Credit
Act, 2005 (Act No. 32 of 2005 (the NCA)) is applicable to all these
matters. The Magistrates’
Courts have court of first
instance jurisdiction in such matters,
section 29(1)(e)
of the
Magistrates’ Courts Act read
with
Section 172(2)
of the NCA.
Section 29(1)(e)
of the
Magistrates’ Courts Act read
:
“
29
Jurisdiction in respect of cause of action
(1)
Subject to the provisions of this Act and
the National Credit Act, 2005 (Act 34 of 2005), a court, in respect
of causes of action,
shall have jurisdiction in - …
(e) actions on or arising out of any
credit agreement, as defined in section 1 of the National Credit Act,
2005 (Act 34 of 2005).”
In
Nedbank v Gqirana
NO and others,
a decision of the Eastern Cape Division of the
High Court, Grahamstown, case number 1203/2018 dated 30 July 2019 the
following was
said in para 37.8, 37.9 and 75.6:
“
[37.8] The
provisions of Section 29(1)(e) of the Magistrates’ Court Act,
as read with Section 172(2) of the NCA, provides
that the
Magistrates’ Courts have jurisdiction over all NCA matters
whatever monetary sum.
[37.9] It was held by Bertelsmann J in
Myburgh (supra) 33 (in my view correctly) that (generally) issuing
summons in the High Court
for a debt that could be recovered in the
Magistrates’ Court runs counter to the express purpose of the
NCA. …
[75.6] The
provisions of the NCA however, properly interpreted through the prism
of the Constitution, creates a specific set of
structures and
procedures relating to NCA matters which, read in context and on a
generous interpretation by necessary implication,
provides for the
Magistrate Courts to be the Court of first adjudication of 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
extraordinary factual or legal issues raised
which in the opinion of
the High Court warrant them being heard first heard in the High
Court.”
[14]
“Although it is established law that the High Court exercises
concurrent jurisdiction with any magistrate’s court
in its area
of jurisdiction, it should be noted that the High Court has always
discouraged plaintiffs from approaching it with
a matter that can be
dealt with in the magistrate’s court at less expense to the
litigants (cf
Standard
Credit Corporation Ltd v Bester supra; Mofokeng supra)”
[M
Roestoff, H Coetzee, University of Pretoria, Journal for Contemporary
Roman-Dutch Law/ Tydskrif vir Hedendaagse Romein-Hollandse
Reg, Vol
71, No. 4, pp 678-668,
Consent
to Jurisdiction – Unlawful provision in a credit agreement in
terms of the
National Credit Act- Is
the jurisdiction of a Court
ousted thereby? Absa Bank Ltd v Mybyrgh
unreported
case no 31827/2007 (T);
Nedbank
Ltd v Mateman
unreported
case no 36472/2007 (T)
;
Nedbank v Stringer
unreported
case no 37792/2007 (T)]. The parties intended to delay the
jurisdiction of the High Court and intended that the
magistrate’s
court that is closest to the defendant’s residence or work
should have jurisdiction to hear the matter
first, where the amount
of the debt was within that magistrate’s court’s
jurisdiction. The agreement did not
change the fact that the
High Court exercised concurrent jurisdiction with the magistrate’s
court.
[15] To assert the
retention of jurisdiction does not mean that the High Court should
automatically be a court of first instance
where there is concurrent
jurisdiction with a magistrate’s court. Roestoff and
Coetzee (
supra)
said:
“
Finally, we
agree with the court in
Mateman
and
Stringer
that
the fact that the court in
Myburgh
did not strike the matter from the roll, but transferred it to the
magistrate’s court in Barberton, proved that the court
accepted
that the High Court retained its jurisdiction.”
Unusual,
extraordinary, difficult and complicated cases may force Standard
Bank to approach the High Court as a court of first instance
[
Koch
v Realty Corporation of SA
1918
TPD 356
at 359; Roestoff and Coetzee
supra
].
The papers do not show that any of the matters is such a case.
[16]
Standard Bank had a choice to determine out of which court to sue, as
dominus litis
in the event of its debtor’s breach. As in these matters,
Standard Bank understood that there would be instances where
more
than one court had jurisdiction. It made its election as part
of the terms of the agreement, exercising its freedom
of choice. The
defendants entered into the agreements, amongst others informed by
the term, with its benefits as to costs
and accessibility. The
parties agreed to protect the defendant against the unnecessary use
of the more expensive forum, that
is, the hardship of being subjected
to unnecessary and expensive proceedings often far out of town. The
parties did not by
an express choice of forum evade any mandatory
provision of the law. There is no public policy to the
contrary. The
clause was not exculpatory and did not provide
the defendant with any advantage to which in law they would not be
entitled. It
did not deny Standard Bank of its day in court,
including in the High Court if the need arose. It did not
present any grave
difficulty and inconvenience for Standard Bank, the
defendants or the courts. The agreement should be conclusive
and enforceable.
[17]
The derogation of a choice of forum is not explained by Standard Bank
in the papers. Standard Bank issued papers in the
High Court in
violation of an agreement between the parties. There was no
reason why Standard Bank should not be held to
its bargain. In
my view, it is the fair and right thing to do. There was no
reason why enforcement of this term of
the agreement would be
inequitable and unjust. It will not be in the interest of
justice that an indigent defendant be hauled
to the High Court when
the matter can be resolved by the Magistrates court, in circumstances
where parties have specifically agreed
that such matters should start
in the Magistrates’ Courts.
[18]
For these reasons I make the following order:
1.
The proceedings in the
High Court are terminated and these matters are hereby transferred to
the respective Magistrates’ Courts
having jurisdiction.
…………………………………………………………
.
DM
THULARE
ACTING
JUDGE OF THE HIGH COURT