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[2015] ZAGPJHC 89
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Octagon Chartered Accounts v Additional Magistrate, Johannesburg and Others (16402/2014) [2015] ZAGPJHC 89 (22 May 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
Case No: 16402/2014
DATE: 22 MAY 2015
In the matter between:
OCTAGON CHARTERED
ACCOUNTANTS
.......................................................................
Applicant
And
ADDITIONAL MAGISTRATE,
JOHANNESBURG
...............................................
First
Respondent
REGISTRAR OF THE HIGH COURT,
JOHANNESBURG
..............................
Second
Respondent
GOODWIN SOUTH AFRICA (PTY)
LIMITED
....................................................
Third
Respondent
MIKO NO 143 (PTY)
LIMITED
............................................................................
Fourth
Respondent
MIKO NO 148 (PTY)
LIMITED
................................................................................
Fifth
Respondent
MIKO NO 151 (PTY)
LIMITED
...............................................................................
Sixth
Respondent
WINGPROP (PTY)
LIMITED
..............................................................................
Seventh
Respondent
JUDGMENT
FRANCIS J
1.This is an application to review and
set aside the order of the first respondent (the additional
magistrate) dated 5 April 2013
in the Magistrate’s Court for
the district of Johannesburg under case numbers 56584/12, 56586/12,
56589/12, 56592/12 and
56594/12 that in each of the aforementioned
case numbers the action (claim in convention) and counterclaim (claim
in reconvention)
and all proceedings forthwith be removed from the
Magistrate’s Court into the South Gauteng High Court or such
competent
Court having jurisdiction; and the decision and action of
the second respondent to allocate High Court case numbers to the
aforesaid
actions.
2. On or about 31 May 2012, the
applicant as plaintiff instituted action against each of the third,
fourth, fifth, sixth and seventh
respondents as defendants, in the
Johannesburg magistrate’s court for the recovery of fees in
sums falling within the jurisdiction
of the magistrate’s court.
3. On or about 15 January 2013, each of
the affected respondents delivered a plea and a claim in reconvention
in a sum far in excess
of the amount of jurisdiction of the
magistrate’s court.
4.On 22 January 2013, each of the
affected respondents launched an application in the magistrates’
court (the staying application)
for the following relief:
“1. Pronouncing that the
Defendant/Applicant’s claim in reconvention exceeds the
jurisdiction of this Honourable Court
in terms of Rule 20(5) of the
Rules Regulating the Conduct of Proceedings of Magistrates’
Courts of South Africa;
2. Both the claim in convention and the
claim in reconvention be removed to the South Gauteng High Court, as
contemplated in section
50 of the Magistrate’s Court Act 32 of
1944;
3.That the current action be stayed in
terms of section 47 of the Magistrate’s Court’s Act, 32
of 1944, pending the
finalisation of the action to be instituted by
the Defendant/Applicant in the South Gauteng High Court, Johannesburg
within 30
days from this order;
4. That the Plaintiff/Respondent be
ordered to pay the costs of this Application only in the event of
opposing same;
5. Further and/or alternative relief.”
5. The applicant did not oppose the
staying-applications. The applicant’s attorney of record
dictated the following letter
dated 28 March 2013, advising that the
applicant would not oppose the application:
“1. We refer to the matters above
as well as the applications set down on the Roll for hearing in the
Magistrates Court, Johannesburg
on Thursday, 4 April 2013.
2.Kindly be advised that our client
does not intend opposing the above applications that these matters be
removed from the Magistrate's
Court Roll, Johannesburg to the South
Gauteng High Court, Johannesburg.
3. To the extent that you have any
further queries in this regard, please feel free to contact the
writer.”
6. On or about 5 April 2013 the
applications proceeded on an unopposed basis in the absence of the
applicant. The orders made were
on identical terms in each instance
and were as follows:
6.1 The claim in reconvention exceeds
the jurisdiction of the magistrate’s court.
6.2 In terms of section 50 of Act 32 of
1944 all proceedings in the action are stayed. The action (claim in
convention) and counterclaim
(claim in reconvention) and all
proceedings are to be forthwith removed from this court into the
South Gauteng High Court or such
competent court having jurisdiction.
6.3 The affected respondent was to
furnish security as contemplated in section 50(1)(c) of Act 52 of
1944 for payment of the amount
claimed. Such security to include
security for costs in an amount of R3 000.00.
6.4 Each party to pay its own costs.
7. On 7 February 2014, the Clerk of the
Civil Court for the magistrate’s court addressed a letter to
the second respondent
- the Registrar, in respect of each the
actions, that an order for the removal of each of the action from the
Magistrate’s
court into the South Gauteng High Court had been
made. The Registrar thereafter allocated a case number in this High
Court Action
to each of the actions.
8. On or about 7 March 2014, each of
the affected respondents served a notice of application for a trial
date under the above numbers.
These notices were later withdrawn by
the affected respondents and on 3 April 2014, the affected
respondents served notices of
bar under each of the High Court case
numbers.
9. The affected respondents seek to
proceed with the matters as if all the pleadings in the magistrates’
court stand as pleadings
in the High Court and that there had been a
removal from the magistrates’ court to the High Court. In
response thereto on
9 April 2014, the applicant’s attorney
challenged the validity of the removal.
10. On 14 April 2014, the affected
respondents, as plaintiff, served five summonses in this Court on the
applicant, claiming identical
relief as that set out in the claims in
reconvention.
11. After this review application was
launched, the first respondent provided the following reasons for the
order made:
“3. The respondents had brought
their application in the Magistrate’s court in terms of Section
50 and also in terms
of Section 47 of the Magistrate’s court
Act 32 of 1944. It is not competent to grant orders in terms of
Section 47 and Section
50 at the same time. When one perused the
papers it became clear that the applicant was seeking an order in
terms of Section 50.
The section 50 order that was sought catered
for the remedy sought in terms of Section 47. It was therefore not
proper to grant
orders in terms of Section 47 and Section 50
simultaneously.
4. The court considered granting an
order in terms of Section 47 only. This would mean that the
applicants claim would have been
stayed for a period and allowing the
respondents to pursue their counterclaims in the High Court or other
appropriate forum with
jurisdiction. It was not necessary to follow
this route as the papers showed that the applicant was no longer
opposing the application
for the removal. Section 50 deals with the
removal while Section 47 deals with staying proceeding and allowing
the defendant time
to pursue a counterclaim in the appropriate forum.
The prayer in the application was clear that the removal of the
claim in convention
and claim in reconvention (my emphasis) was
sought. The founding affidavits also make out a case for a Section
50 removal.
5. The applicant elected to merely
dispatch a letter dated 28 March 2013 (indicating that the removal
would not be opposed) and
thereafter did nothing. The applicant did
not attend court on the day of the hearing of the application. The
applicant did not
follow up as to what order was ultimately granted
by the court. These are the circumstances under which the removal of
the main
action and counterclaims were made. The order was granted
in terms of Section 50 of the Magistrate’s court act. No order
was made in terms of Section 47 of the Magistrate’s court act.
6. Pursuant to the order for removal
the second respondent (Registrar) was obliged to receive the
Magistrate’s Court files
and open High Court files with new
case numbers. No fault can be attributed to the registrar. ‘He’
acted within the
course and scope of ‘his’ duties.”
12. The applicant seeks to review the
decisions of the first respondent to remove the proceedings to the
High Court as set out in
paragraph 2 of the orders dated 5 April 2013
on the grounds that such are ultra vires. Further that the granting
of the High Court
case numbers was not competent.
13. The application was opposed by the
third to seventh respondents on the grounds that the first respondent
in ordering the removal
of the claim, acted correctly since an
election by the applicant to require the removal could be properly be
inferred from the
decision, communicated in the applicant’s
letter not to oppose the application in which such removal was
sought. Further
that if the inference was held to be wrong, it was
at least one that could competently have been made, and so the
decision of
the first respondent cannot be challenged.
14. It was further contended by the
third to seventh respondents that the learned magistrate, in ordering
the removal of the counterclaim,
made his decision without
stipulating the provision under which its grant was authorised.
Since he was under no duty to make such
a stipulation, however his
failure to say where his powers were derived from is of no moment.
All that it signifies is that, in
law, he enjoyed the applicable
power. This requirement is met in the present case since section 50
of the Magistrates Court Act
32 of 1944 (the Act), alternatively
section 47, embodies such a power.
15. It was further contended that
should it be found that the first respondent committed an error
exhibiting excess of jurisdiction,
his discretion is nevertheless not
reviewable since the applicant suffered no material prejudice in
consequence of its grant, and
has, in any event, pleaded no such
prejudice in its founding papers. By expressly stating that it had
no reason to oppose the
removal of the matter to the High Court, the
applicant showed that it could suffer no prejudice by reason of such
a removal.
16. It is common cause that on or 31
May 2012, the applicant as plaintiff instituted action against each
of the third, fourth, fifth,
sixth and seventh respondents as
defendants, in the Johannesburg Magistrate’s court for the
recovery of fees in sums falling
within the jurisdiction of the
magistrates’ court. The defendants filed counterclaims against
the plaintiff which is in
excess of the magistrate’s court
jurisdiction. The respondents were desirous to remove the
counterclaim from the magistrate’s
court to the High Court.
They brought an application and sought an order in terms of rule
20(5) of the Magistrates Court Rules
(the rules) regulating for a
declarator stating the claim in reconvention is in excess of the
jurisdiction of the magistrate’s
court and to stay the action
under section 47 of the Act.
17. Rule 20 deals with claims in
reconvention. Rule 20(5) provides that a defendant delivering a
claim in reconvention may by notice
delivered therewith or within 5
days thereafter apply to court to pronounce that the claim in
reconvention exceeds the jurisdiction
and to stay the action under
section 47 of the Act. Prayer 1 of the third to seventh respondents
application sought such an order.
18.Section 47 of the Act deals with a
counterclaim exceeding jurisdiction. Section 47(1) provides that
when in answer to a claim
within the jurisdiction the defendant sets
up a counterclaim exceeding the jurisdiction, the claim shall not on
that action be
dismissed; but the court may, if satisfied that the
defendant has a prima facie reasonable prospect on his counterclaim
of obtaining
a judgment in excess of its jurisdiction, stay the
action for a reasonable period in order to enable him to institute an
action
in a competent court. The plaintiff in the magistrate’s
court may (notwithstanding his action therein) counterclaim, in such
competent court and in that event all questions as to the costs
incurred in the magistrate’s court shall be decided by that
competent court. Section 47(2) of the Act provides that if the
period for which such action has been stayed has expired and the
defendant has failed to issue and serve a summons in a competent
court in relation to the matters and the subject of the counterclaim
the magistrate’s shall on application either – (a) stay
the action for a further reasonable period; or (b) dismiss
the
counterclaim (whether the defendant does or does not reduce such
counterclaim to an amount within the jurisdiction of the court).
Section 47(3) of the Act provides that if the defendant has failed to
institute action within the further period or if the action
instituted by the defendant be stayed, dismissed, withdrawn, or
abandoned, of if the competent court has granted absolution from
the
instance thereon, the magistrate’s court shall, upon
application, dismiss the counterclaim and shall proceed to determine
the claim.
19.It is clear from the provisions of
rule 20(5) read with section 47 of the Act that the applicant’s
claim that falls within
the jurisdiction of the magistrate’s
court will be stayed if the respondents whose counterclaim exceeds
the jurisdiction
of the magistrate’s court brought an
application for its removal to the High Court.
20. It is clear from the third to
seventh respondents’ application to stay that they had sought
prayers 1 and 3 which are
competent orders in terms of rule 20(5)
read with section 47 of the Act. Such a finding cannot be interfered
with on review.
21. However the third to seventh
respondents also sought an order in paragraph 2 of their stay
application that both claim in convention
and the claim in
reconvention be removed to this Court in terms of section 50 of the
Act. They were also granted such relief.
The question that arises in
this application is whether the first respondent was competent to
grant the relief that it granted
in relation to removing the
applicant’s claim that falls within the jurisdiction of the
magistrate’s court to the High
Court.
22. This review takes issue with the
order that in terms of section 50 of the Act all proceedings in the
action are stayed. The
action (claim in convention) and counterclaim
(claim in reconvention) and all proceedings are to be forthwith
removed from the
magistrate’s court act to this Court or such
court having jurisdiction.
23.Section 50(1) of the Act deals with
removal of actions from court to a provincial or local division. It
provides that any action
in which the amount of the claim exceeds the
amount determined by the Minister from time to time by notice in the
Gazette, exclusive
of interest and costs, may, upon application to
the court by the defendant, or if there is more than one defendant,
by any defendant,
be removed to the provincial or local division
having jurisdiction where the court is held, subject to the following
provisions:
(a) notice of intention to make such application shall
be given to the plaintiff, and the other defendants (if any) before
the
date on which the action is set down for a
hearing; (b) the notice shall state
the applicant objects to the action being tried by the court or any
magistrate; (c) the applicant
shall give security as the court may
determine and approve, for payment of the amount claimed and such
further amount to be determined
from time to time by notice in the
Gazette, for costs already incurred in the action and which may be
incurred in the said provincial
or local division. Upon compliance
by the applicant with those provisions, all proceedings in the action
in the court shall be
stayed, and the action and all proceedings
therein shall, if the plaintiff so requires, be as to the defendant
or defendants, forthwith
removed from the court into the provincial
or local division aforesaid having jurisdiction. Upon the removal,
the summons in the
court shall, as to the defendant or defendants,
stand as the summons in the division to which the action is removed,
the return
date thereof being the date of the order or removal in an
action other than one founded on a liquid document, and, in an action
founded on a liquid document, being such convenient day on which the
said division sits for the hearing of provincial sentence
cases, as
the court may order: Provided that the plaintiff in the action may,
instead of requiring the action to be so removed,
issue a fresh
summons against the defendant or defendants in any competent court
and the costs already incurred by the parties
to the action shall be
costs in the cause. Section 50(2) of the Act provides that if the
plaintiff is successful in an action
so removed to a provincial or
local division he may be awarded costs as between attorney and
client.
24. It is clear that section 50 of the
Act does two things: first, it gives the defendant the ability to
obtain a stay of action
in the magistrate’s court provided the
three requirements referred to above are satisfied; secondly, it
gives the plaintiff
who is confronted by such a stay, the option of
seeking a removal of action to the High Court or instituting
proceedings de novo
in the self-same court. The action may only be
removed where the plaintiff requires that such an order be made.
25. Since the magistrate is a creature
of statute, he derives his powers from the four corners of the
statute. It is apparent from
the provisions of section 50 of the Act
that it is only applicable to an action that exceeds the jurisdiction
of the magistrate’s
court. Once the action exceeds the
jurisdiction of the magistrate’s court a defendant may bring an
application for the removal
of such an action. This does not apply
to an action that falls within the jurisdiction of the magistrate’s
court. If such
a claim falls outside the jurisdiction of the
magistrate’s court three other requirements must be complied
with. These are
that notice must be given by the defendant before
the date on which the action is set out at the hearing; the notice
must state
that the defendant objects to the action being tried in
the court or any magistrate’s court and defendant must give
security
as the court may determine. There is nothing on record that
indicates that the second requirement was given by the defendant.
26.The first respondent did not have
the power to order that the action be removed to the High Court. The
first dificulty is that
the action did not exceed the jurisdiction of
the magistrate’s court. Even if the letter that the
applicant’s attorney
had sent to the third to seventh
respondents’ attorney could be construed as consent, this was
subject to the three requirements
of section 50 of the Act be met and
namely that the defendant objected to the claim filed by the
plaintiff. There is simply no
proof of such objection. The section
only applies to actions exceeding the jurisdiction of the
magistrate’s court.
27. As stated earlier the applicant
does not take issue with paragraphs 1 and 3 of the relief sought in
the applicant’s application
and with paragraphs 1 and 3 of the
order granted by the first respondent. It takes issue with paragraph
2 which was the removal
of the action which the first respondent did
not have the power to do so. It follows that the first respondent
committed a reviewable
irregularity in that he did what he simply did
not have the power to do in terms of section 50 of the Act.
28. The application succeeds in part.
Since both parties have been partly successful in the application and
opposition thereof,
I do not believe that costs should follow the
result. An appropriate order is that each party is to pay its own
costs.
29. In the circumstances I make the
following order:
29.1 The order made by the first
respondent on 5 April 2013 is hereby reviewed and set aside and is
replaced with the following
order:
29.1.1 The claim in reconvention
exceeds the jurisdiction of the magistrate’s court.
29.1.2 The action is stayed and the
counterclaim is forthwith removed to the South Gauteng High Court.
29.1.3 Each party is to pay its own
costs.
29.2 Each party is to pays its own
costs.
FRANCIS J
JUDGE OF THE HIGH COURT
FOR PLAINTIFF :J PETER SC WITH E R
VENTER
INSTRUCTED BY FLUXMANS INC
FOR DEFENDANT :M BRASSEY SC
INSTRUCTED BY
SCHINDLERS ATTORNEYS
DATE OF HEARING : 11 MAY 2015
DATE OF JUDGMENT: 22 MAY 2015