Email this article	Comment on this Article	Print this article

Context of a jurisdiction clause contained in the plaintiff’s standard form covering a mortgage bond

In a recent judgment of the full bench in the High Court of South Africa (TPD) the issue of whether the NCA ousts the jurisdiction of the high court, and consequently also the jurisdiction of the registrar to deal with applications for default judgment falling under the NCA was considered (1).

Van der Merwe J (Du Plessis J and Visser AJ concurring) found that the NCA does not affect the jurisdiction of the high court and that the high court has retained its jurisdiction in matters where the magistrate’s court has concurrent jurisdiction.

The court pointed out that in respect of matters governed by the NCA the magistrate’s court has unlimited monetary jurisdiction ⁽²⁾.

In the judgement the following considerations were taken into account: 

1. It is settled law that the high court has concurrent jurisdiction with any magistrate’s court in its area of jurisdiction (3). 
2. It is also settled law that a plaintiff runs a risk if a plaintiff sues in the high court on a claim justicable in the magistrate’s court of only being allowed to recover costs on the magistrate’s court scale; 
3. There is a strong presumption against the ouster or curtailment of the high court’s jurisdiction (4); 
4. That it is a well recognised rule in the interpretation of statutes that the curtailment of the powers of a court of law is, in the absence of an express or clear indication to the contrary, not to be presumed (5); 
5. There need not be express words in a statute ousting the jurisdiction of the high court but then the inference that the jurisdiction is ousted must be clear and unequivocal (6); 
6. There is no express provision in the NCA ousting the high court’s jurisdiction, and consequently also that of the registrar, to deal with applications for default judgment governed by the NCA;

The court considered the effect (if any) of sections 90 and 127 of the NCA on the high court’s jurisdiction to deal with matters governed by the NCA.

Section 90 deals with unlawful provisions of a credit agreement and was considered in the context of a jurisdiction clause contained in the plaintiff’s standard form covering mortgage bond.

In terms of the jurisdiction clause the defendants consented to the jurisdiction of the applicable magistrate’s court, but the plaintiff reserved the right to institute proceedings in any division of the high court having jurisdiction over the defendants.

Section 127 deals with the surrender of goods and the court found that it does not deal, nor was intended to deal with the jurisdiction of the high court or the ousting thereof. 

The court found that Section 90 of the NCA did not affect the jurisdiction of the high court and held that the high courts retain their jurisdiction in terms of the relevant provisions of the Supreme Court Act (7).

According to the view expressed by the court section 90 was intended to outlaw forum shopping in credit agreements and to extend the scope and purview to the overall jurisdiction of the high court beyond mere clauses in credit agreements, would be to accord section 90 a meaning which was not sustainable or intended by the legislature. 

The court found that once the high court has jurisdiction to entertain a matter it cannot refuse to do so unless the action amounts to an abuse of the process of court.

Footnotes:

¹ Two cases being Case number 36472/2007 Nedbank v Ivan Godfrey Mateman and Julia Gwyneth Cordelia Mateman and Nedbank Limited v Daniel Thomas Stringer and Helena Beatriz Dry Case number 37792/2007. Nedbank vs. Mateman
² Section 172 (2) of the NCA and Section 29 (1)(e) of the Magistrate’s Court Act 32 of 1944
³ Standard Credit Corporation Limited v Bester 1987 (1) SA 812 (W)
⁴ Lenz Township Company (Pty) Ltd v Lorentz, NO and N Andere 1961 (2) SA 450 (A)
⁵ Schermbrucker v Klindt NO 1965 (4) 606 (A)
⁶ Reid – Daily v Hickman & Others (1981) (2) SA 315 (ZAD)
⁷ sections 19 (1) and 19 (3) of the Supreme Court Act 59 of 1959