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[2021] ZAWCHC 42
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First National Bank t/a Wesbank v Prins; Nedbank Limited v de Kock (4028/2020; 15702/2020) [2021] ZAWCHC 42 (26 February 2021)
THE REPUBLIC OF
SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case No:
4028/2020
In
the matter between:
FIRSTRAND BANK
LIMITED t/a WESBANK
Plaintiff
and
ADRE
SHAHIED PRINS
Defendant
Case
No: 15702/2020
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
EMIL
DE KOCK
Defendant
Coram:
Bozalek J
Heard: 12
February 2021
Delivered:
26 February 2021
JUDGMENT
BOZALEK
J
[1]
These two applications for
default judgment for an order for the return of motor vehicles
purchased in instalment sale agreements
were called on my Third
Division (unopposed motions) roll on 12 February 2021. Upon my
enquiry as to why the Registrar had declined
to grant default
judgment and referred the matters to open court I was advised that
the reason was the Registrar’s apparent
belief that he/she
lacked the jurisdiction to do so. More particularly, the Registrar
had interpreted the jurisdiction clauses
in the underlying agreements
as requiring that the claims be dealt with in the Magistrates Court.
[2]
The jurisdiction clause in
respect of the claim by Firstrand Bank Limited trading as Wesbank
reads as follows:
‘
28.2
In terms of sec 45 of the Magistrates Court Act, 32 of 1944
and at our option, any claim that may arise may be recovered
in any
Magistrates Court having jurisdiction and you hereby consent to the
jurisdiction of the Magistrates Court’.
[3]
In the claim brought by
Nedbank the jurisdiction clause reads as follows:
‘
20
Legal Proceedings
You
agree that any legal proceedings that may be brought in terms of this
Agreement may be heard in a magistrates court, regardless
of the
amount claimed’.
[4]
Both
clauses make it quite clear that the plaintiff retains a discretion
regarding the Court out of which it elects to issue summons.
The
clauses
permit
but do not compel the plaintiff to issue a summons out of the
Magistrates Court even though the claim would ordinarily fall within
the jurisdiction of the High Court and they imply a consent by the
debtor to the Magistrates Court jurisdiction should the plaintiff
elect to sue there
[1]
. They
certainly do not operate to deprive the plaintiff of the right to
institute proceedings in the High Court for a claim for
relief
arising out of cancelled instalment sale agreements even though the
value of the contract may fall within the monetary jurisdiction
of
the Magistrates Court. In the circumstances the Registrar erred in
each case in refusing, in terms of Rule 31(5)(iii), to grant
default
judgment on the ground that the High Court lacked jurisdiction.
[5]
Subrule 31(5) deals with
judgments by default and establishes a vital role for the Registrar
as the official who considers applications
for default judgment in
the first instance, thereby relieving the Judges of the Court of the
burden of hearing countless straightforward
default judgment
applications.
[6]
Unfortunately, these two
cases are not isolated instances. From my own experience and from
discussions with colleagues it appears
that over the past few months
it has become an increasing practice of the Registrar to refuse to
grant default judgments where
he or she considers that the amount of
the claim or value of the contract falls within the jurisdiction of
the Magistrates Court
and/or where the jurisdiction clause makes
reference to the plaintiff’s right to institute proceedings in
the Magistrates
Court. Ironically, the effect of this practice on the
part of the Registrar is to reduce the workload in that office and to
increase
the workload of the Judges presiding over the daily Third
Division roll.
[7]
This
practice has moreover been held to be ‘legally incorrect’
by Sievers AJ in the matter of
Absa
Bank Ltd v Treister
[2]
delivered on 28 November 2019. The judgment of Sievers AJ appears to
have had no effect and I shall therefore direct that that
judgment as
well as a copy of this judgment to be drawn to the attention of the
Chief Registrar for action.
[8]
I am
aware that the question of whether the High Court should allow
litigants to pursue claims in that Court where the claims falls
within the monetary jurisdiction of the Magistrates Court has been
the subject of several judgments over the past few years. In
Nedbank
Ltd v Thobejane and Similar matters
[3]
a full bench of the Gauteng Division of the High Court granted a
declaratory order to the effect that matters falling within the
monetary jurisdiction of the Magistrates Court should be issued in
those Courts and that should a party be of the view that a matter
falling within the jurisdiction of the Magistrates Court should more
appropriately be heard in that Division of the High Court,
an
application must be issued setting out reasonable grounds why, and
only once leave is granted may the summons be issued in the
High
Court.
[9]
A
different conclusion was reached by a full bench of the Eastern Cape
Division in
Nedbank
Ltd v Gqirana N.O. and Another, and Similar matters
[4]
where the majority of the Court held that, generally speaking, the
common law position of concurrency of jurisdiction remained
in place
and was not altered by the passing of the Constitution. This was so
unless the jurisdiction of the High Court was ousted
by legislation,
either expressly or by necessary implication. It held further that
the inherent jurisdiction of the High Court
to regulate its own
processes by refusing to hear matters that constitute an abuse of
process was case specific; a High Court did
not have the power to
pre-emptively prevent an abuse across all cases of a particular type,
(unless empowered to do so by legislation
or rules consistent with
constitutional imperatives).
[10]
Counsel advises that the
two above decisions are the subject of appeal to the Supreme Court of
Appeal and hopefully clarity should
emerge sooner rather than later.
[11]
For my
part I favour the rationale in
Nedbank
Ltd v Gqirana N.O.
and
the prior judgment in
Carlyn
Medical Extrusions (Pty) Ltd and Lighting (Pty) Ltd and others
[5]
where Van Oosten J held that, all things being equal, a party remains
entitled to a free choice of a forum in which to bring proceedings
on
condition that such Court has the necessary jurisdiction and subject
to the possibility of an order limiting or, if appropriate,
disallowing costs. I associate myself fully with the reasoning of Van
Oosten J in that matter and particularly with the quotation
from
Standard
Credit Corporation Ltd v Bester and Others
[6]
to
the following effect:
‘…
courts should be
extremely wary of closing their doors to any litigant entitled to
approach a particular court. The doors of court
should at all times
be open to litigants falling within their jurisdiction. If congested
rolls tend to hamper the proper functioning
of a court then a
solution should be found elsewhere, but not by refusing to hear a
litigant or to entertain proceedings in a matter
within a court’s
jurisdiction and properly before the court.’
[12]
I am
also aware of a practice directive issued by the Judge President of
this Division having effect from 1 February 2021
[7]
which directs that matters which fall within the jurisdiction of the
Magistrates Court should be brought within those respective
Magistrates Courts, arguably precluding litigants from bringing such
proceedings in the High Court. That directive obviously does
not
apply to applications for default judgment brought before that date.
Counsel acting for Firstrand Bank Ltd raised the question
of the
legality of such a practice directive contending that it may well be
ultra
vires
inasmuch as it is at variance with the provisions of
sec 21
of the
Superior Courts Act, 10 of 2013
.
Section 21(1)
provides that
Divisions of the High Court have jurisdiction ‘
over
all persons residing or being in, and in relation to all causes
arising in … within its area of jurisdiction’
.
[13]
The issue of whether the
relevant directive is
ultra
vires
does not arise
in the present matters however and therefore the question, if it
requires determination, must wait for another day.
[14]
As far as applications for
default judgments which are not hit by the provisions of this new
practice directive, the Chief Registrar
must ensure that her
officials perform their duties in terms of
Rule 31(5)
rather than
referring these applications for default judgment to open court on
the basis
inter alia
of misconceived interpretations of the underlying jurisdiction
clauses.
[15]
In both of these matters
the plaintiffs are entitled to default judgment and the appropriate
orders, which include costs orders
on the Magistrate Court scale, are
made. I further order that copies of this judgment and that of
Sievers AJ be provided to the
Chief Registrar for her notice and
attention.
______________________
BOZALEK
J
For
the Plaintiff in case no 4208/2020 Adv
E Nel
As
Instructed by
Jeff Gowar Inc
For
the Plaintiff in case no 156702/2020 Adv
M Garces
As
Instructed by
Kemp & Associates
[1]
Section
45 of the Magistrates Court Act permits parties to consent in
writing to an extension of that Court’s jurisdiction.
[2]
(WCHC
Case No: 17476/2019 delivered on 28 November 2019).
[3]
2019 (1) SA
594 (GP).
[4]
2019 (6) SA
139.
[5]
(GPJHC case
no: 16312/2013 delivered on 2 December 2013).
[6]
1987 (1) 812
(W).
[7]
Part
E of Directives (issued on 26 January 2021)
.