Determination of constitutional validity of section 66 and 67 of Magistrates’ Courts Act 1944, which allows sale and execution of house without judicial oversight in certain cases; Nature of the right of access to adequate housing under art. 26 of the Constitution; Negative obligations within right to housing; Importance of judicial oversight.
The case was brought by two women who had borrowed minimal sums of money (about 27 and 35 US dollars respectively), had been charged significant interest and fell behind on their payments. This led to the sale and execution of their houses. The applicants argued that legislation permitting the sale in execution of people’s homes due to non-payment of trifling debts removed their security of tenure and violated their right to access to adequate housing recognized in section 26 of the Constitution. The law in question was sections 66(1)(a) and 67 of the Magistrates’ Courts Act 32 of 1944. According to the law, if the debtor failed to appear before the court, the creditor could obtain default judgment. This judgment then enabled the creditor to obtain an execution warrant, allowing a sale of the property. The process of sale did not need to involve the Courts when the judgment was entered by default.
The court recognised that if a recipient of a state housing subsidy, such as the two applicants, lost ownership of their homes in this manner, they would be unable to obtain other state-subsidised housing and would have no suitable alternative accommodation. The Court also recognized that the right of access to adequate housing carried negative obligations on the state not to interfere unjustifiably with any person’s existing access to adequate housing. Therefore the right did not just protect occupation of housing, but also protected security of tenure, and therefore a deprivation of that security infringed on rights protected under section 26. The Court, albeit implicitly, found that the negative obligation under section 26 applied to everyone, and not just state bodies. The Court ordered that such sales in execution could only be ordered with judicial oversight. It also listed factors that could be considered in this oversight circumstances and amount of the debt, attempts to pay off the debt, and financial situation of the parties.
Keywords: Jaftha v. Schoeman; Van Rooyen v. Stoltz 2005 (2) SA 140, Adequate, Standard, Living, Right
Section 66 of Magistrates’ Courts Act has still not been amended: it does not provide for judicial intervention when the assets (i.e. movable property) of the debtor are not sufficient to cover the debt. However, the courts have followed the precedent set by the Jaftha judgment to make their decisions in similar cases. As a consequence, South African Courts now have to oversee sales of homes due to debt.
In Jaftha, the court developed the nature of the right of access to adequate housing, stating that a limitation on security of tenure will always have to be justified. As specified in the enforcement section, this Judgment is now a precedent followed by South African Courts in similar cases[1]. It must be noted that in such cases, the protection provided by article 26 Constitution only applies when the immovable property constitutes “adequate housing”, that is, when the debtor may become homeless if his property is executed.[2]
[1] See for example the case Nedbank Ltd v Mortinson 2005 (6) SA 462 (W) of the High Court of Gauteng, available at : http://www.saflii.org/za/cases/ZAGPHC/2005/85.html.
[2] See the summary of a case of 2010, where the Court held that execution against a second property was valid, because the debtor did not risk to lose his access to housing at all: http://www.ita.co.za/index.php?option=com_content&view=article&id=315:losing-immovable-property-as-a-result-of-a-small-debt&catid=25:newsarticles&Itemid=89
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