Fate of bond defaulters in Concourt’s hands

THE ball is now in the hands of the Constitutional Court justices to decide if banks should have their wings clipped in their approach to obtain default judgments against bond defaulters owing small amounts.

Counsels for the SA Human Rights Commission (SAHRC) and three major banks presented their clients’ positions before the apex court yesterday.

The SAHRC took on Standard Bank, Nedbank and FNB, which it accused of prejudicing bond defaulters owing as little as R7 000 by bringing default judgment applications against them in the high court.

It held that the magistrate’s court was more suitable to hear these matters, some of which resulted in home repossessions.

It submitted that they were “more accessible than the high court to impoverished respondents”.

Advocate Matthew Chaskalson SC advanced the SAHRC’s argument aiming to convince the apex court to rule that a high court was entitled to decline to hear default judgment cases.

The commission wanted the applications referred to the magistrate’s court, notwithstanding the common law stipulating that the high court held concurrent jurisdiction on default judgment matters.

The three 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.

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.

He said: “There are very limited judicial resources in this country. If (high court) 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 we submit does implicate independence of the judiciary.”

Advocate Kate Hofmeyer, representing Standard Bank, told the justices a proper analysis needed to be done to determine why mortgagers owing small amounts did not show up in court to defend their homes.

“They are issues that deserve attention. They require … a proper analysis to be done for the reasons why when there are relatively small amounts outstanding on debts with banks people are not defending those cases,” she said.

“There should also be a proper analysis of what shifting cases that can be brought in the magistrate’s court but are brought in the high court will do if they are all moved to the magistrate’s court.”

Advocate Alfred Cockrell SC told the court Nedbank, his client, believed the high court was more accessible to the defaulters than magistrate’s court.

“It’s not apparent to me that the costs would necessarily be less in the magistrate’s court rather than in the high court,” he said.

“Nedbank, in fact, says the costs are less in the high court rather than in the magistrates court.

“If you’re looking for pro bono representation, you may find it easier to find that in the high court in the big city rather than a far-flung area, for example, because that’s where the societies’ advocates are located and you may find a legal clinic happy to assist you.”

Judgment was reserved.