October 3, 2018

Stern warning to corporate bullies and a relief for those indebted to them

On 26 September 2018, a full bench of three judges in the North Gauteng High Court ruled that as from February 2019, all civil actions in which the monetary value claimed falls within the jurisdiction of the magistrate’s and regional courts, must be instituted in those lower courts, unless the high court has granted leave to hear such a matter in the high court.

This ruling will surely be a hard pill to swallow for corporates and financial institutions as they will no longer be able to use the North Gauteng High Court specifically as a tool for intimidation and threat to get a defendant to come to the party.

The monetary jurisdiction works as follows:

  • Claims up to R200 000.00 are to be heard by the magistrate’s court;
  • Claims between R200 000.00 and R400 000.00 are to be heard by the regional court; and
  • Claims above R400 000.00 are to be heard by the high court.

Prior to this ground-breaking judgement and for as long as I have been practising, one often found some litigants and attorneys who would turn to the high court even for a trivial amount. The consequences of this include:

  1. Higher legal fees and rates, and more billable hours.
  2. A high court summons is generally more intimidating than a magistrate’s court summons.
  3. Unlike a magistrate’s court judgement, a high court judgment cannot be rescinded by consent or if the defendant has settled the debt – which will ultimately mean that even if a defendant settles the debt in full, the judgment will remain for 30 years. So, the plaintiff not only receives full payment, but also proves a spiteful point.

This judgment came about due to the increasing tendency by litigants, mainly banks and commercial institutions, to institute actions / applications in the high court for amounts falling within the jurisdiction of the magistrate’s courts, which choked the court roll and caused actual high court matters to be placed last in line to be heard. Further to this, the court is of the view that instituting actions in the high court when it was meant for a lower court’s adjudication poses a threat of the right of access to justice.

In his ruling Judge Tolmay stated that “justice delayed is justice denied” and this adage really hit home and I once again realised the importance of the sufficiency and accuracy of the services an attorney is to provide to his / her clients.

At the hearing, the representatives for the Banks argued that they choose not to institute actions in the magistrate’s courts. One of their reasons for this was that the administration and staff at the magistrate’s courts are inefficient and going to the high court is more convenient for them! As a litigation attorney, share their frustration with our lower courts, however a litigant cannot approach a high court merely for convenience or as a result of a perceived view that the lower courts are incompetent, as it simply does not justify the cause of action, especially for a summons in which an amount of R7 772.00 is claimed. The high court made it quite clear in its ruling that the inefficiency of other courts and the convenience of the plaintiff alone will not be entertained or considered as reasonable ground to grant leave for a matter to be heard by the high court.

This judgment will ensure that corporate bullies and their attorneys follow due process and procedure, which will make the right of access to justice and courts more practical and accessible to the defendant man in the street.

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