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Judgments Against Your Debtors

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Judgments Against Your Debtors


Banks often approach High Courts for Judgment against their debtors, even when relatively small amounts of money are owed.

As such the Judge President of the Pretoria High Court assembled a full bench of three (3) Judges to decide whether or not High Courts should be allowed to entertain cases in which monetary jurisdiction falls within that jurisdiction of the Magistrates Court, just because both Courts have jurisdiction. He also asked the Court to decide if there is “an obligation on financial institutions to consider the cost implication and access to justice of financially distressed people” in determining which Court to use.

The result of this Judgment is that Magistrates’ Courts should be the first port of call for financial institutions seeking Judgment against their Clients, where the Lower Courts’ monetary jurisdiction is applicable.

Paragraph 81 of the Judgment especially criticises the Banks for bringing matters before the High Court when they should be heard in the Lower Court. “Lamenting about perceived inefficiency of the magistrates’ courts does not constitute a valid reason to approach the high court as the court of first instance. The inefficiency, if it exists, must be addressed on another level. The banks must also adjust their thinking.”


Advantages for Banks to Rather Sue in the High Court than the Magistrate’s Court

One of the main reasons why Banks would rather sue in the High Court is to keep the pressure on a defaulting Client.  If they have a High Court Judgment against a Client in arrears, Banks can keep alive the threat of Sale in Execution, even if the Client pays the arrears. If they default a second time, the Bank can sell the person’s home without having to approach the Court again. This is less likely to happen in a Magistrates’ Court, where the order expires after a year.

Other reasons summarised in the Judgement are as follows:

  • There are long delays in the Magistrates’ Courts, and Banks have problems securing hearing dates.
  • There is a lack of uniformity in the granting of Orders in Magistrates’ Courts.
  •   Unnecessary queries are raised by Debtors.
  • Magistrates are reluctant to declare that Properties can be sold at auction by the Bank to recover debts.
  • Attachment Orders issued by Magistrates’ Courts lapse after a year, while in High Courts they do not lapse.
  • It is not always cheaper to litigate in the Magistrates’ Courts.

After hearing from both sides, the Pretoria High Court proceeded to rule that if Banks brought their cases to the High Courts when the Lower Courts have jurisdiction, the High Courts could move the cases down to the Lower Court.


Disadvantages for Debtors when Banks Sue in the High Court and Not the Magistrate’s Court

The Human Rights Commission (SAHRC) argued that distraught Debtors could not afford legal representation and were also prejudiced by the costs of travel and accommodation when cases were brought to the Pretoria High Court, while the Debtors lived elsewhere. The Commission argued that these costs would be substantially lower if the cases were heard in a Magistrates’ Court that was closer to where the Debtors resided, and who all have interpreters.

The Legal Resources Centre went further and offered a Constitutional and International perspective on the right to access Courts. They argued that “measures must be taken to reduce the economic, social and geographical barriers that prevent a respondent’s access to court” as required under the Constitution.

Except for the advantages and disadvantages explained above, the Court stated that another important part of the case is how these Applications have congested – and therefore slowed down – the High Courts.

The Pretoria High Court Judges confirmed that the number of new cases coming before the Pretoria High Court had increased to nearly 100,000 in 2016 from 74,000 in 2012. While in the Johannesburg High Court, the case load increased to nearly 50,000 in 2017 from about 48,000 in 2012.

“This results in inordinate delays in delivering judgments. Obviously, this is an untenable situation that needs to be addressed in the interests of justice,” reads the Pretoria High Court Judgment.

The tendency of Banks to launch proceedings in the High Courts’ poses a threat on two levels, says the Judgment: it affects the right of access to justice for poor litigants, and places an unsustainable burden on the courts.

“This judgment is far reaching and incredibly important in affirming the right to access to justice,” said the LRC in a statement. “We are pleased that the Court found in favour of impoverished clients who are burdened by the current system which allows for cases to be taken straight to the High Court, which may be geographically further, more expensive and not have designated interpreters available.”


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