The Superior Courts Act ushered in a new dispensation in territorial jurisdiction of the High Court

October 1st, 2021

Advent Oil (Pty) Ltd v Vuletjeni Trading and Projects (Pty) Ltd (MM) (unreported case no 4262/2019, 21-6-2021) (Sigogo AJ)

The Mpumalanga Division of the High Court in Mbombela, removed the matter of Advent Oil to the Middleburg Local Division of the Mpumalanga High Court. This was after Sigogo AJ said the Mbombela Seat of the Mpumalanga High Court did not have the jurisdiction to entertain the case. The court pointed out that the applicant sought an order for the respondent to be placed under final winding-up in the hands of the Master of the Mpumalanga High Court in Mbombela. The applicant’s application was brought in terms of ss 344(f) and 345(1) of the Companies Act 61 of 1973 (the 1973 Act), read with item 9 of sch 5 of the same Act on the ground that the respondent is deemed to be unable to pay its debt. Sigogo AJ added that winding-up of corporations is done in terms of provisions of the Companies Act 71 of 2008 (the 2008 Act). The choice of the applicable Act will primarily depend on the reason for winding-up of the company.

Sigogo AJ said that the Minister of Justice and Constitutional Development has since determined the areas under the jurisdiction (territorial jurisdiction) of the Mpumalanga Division of the High Court. The court pointed out that by now it should have been settled how territorial jurisdiction of the Mpumalanga Division operates. The court added that in the contrary this case is a living example that many litigants still approach territorial jurisdiction of the High Court in the manner it was under Supreme Court Act 59 of 1959 (the Supreme Court Act).

Sigogo AJ said that out of habit, without giving attention to the proclaimed jurisdictional boundaries of the Mpumalanga Division the applicant issued court process, falling under the Middleburg area of jurisdiction with the Local Seats. The court added that this is not a separate incident, and added that in discussion with other colleagues it was revealed that this practice is commonplace within the division. The court pointed out the judgment aims at addressing this notion.

The court held that the Superior Courts Act 10 of 2013 (the Superior Court Act) ushered in a whole new dispensation in as far as territorial jurisdiction of the High Court is concerned. The circumstances under which the High Court may exercise its jurisdiction to hear any matter is provided for under s 21 of the
Superior Court Act.

Sigogo AJ said that s 6(3) of the Superior Courts Act is couched differently from s 6(2) of the repealed Supreme Court Act. Under the Supreme Court Act the provincial of the Transvaal, Natal and Eastern Cape were given concurrent jurisdiction with their local divisions the Superior Courts Act whether the Main Seat of a Division will exercise territorial jurisdiction over the entire Province is left in the hands of the Minister who in consultation with the Judicial Services Commission will determine the necessary jurisdictional boundaries of the High Courts. The Main Seat of the same Division on issues of appeals. Put differently, the Superior Courts Act shifted the authority to determine territorial jurisdiction of Divisions of the High Court from the legislature to the executive.

Sigogo AJ pointed out that the areas of jurisdiction of the two seats of the Mpumalanga Division are captured as follows:

  • Name of Division: Mpumalanga
  • Main Seat: Mbombela
  • Area under jurisdiction of the Division: The following magisterial districts and sub-districts with Mpumalanga Province as described in GN492 GG39961/29-4-2016: Bushbuckridge (including Mhala sub-district); Chief Albert Luthuli (including Carolina sub-district) Emgwenya sub-district of eMakhazeni district; Mbombela (including White River and Nsikazi sub-districts); Nkomazi (including Komatipoort sub-district); Thaba Cheu (including Graskop and Sabie sub-districts) and Umjindi.
  • Local Seat: Middleburg
  • Area of jurisdiction of the local seat: The following magisterial districts and sub-districts within Mpumalanga Province as described in GN492 GG39961/29-4-2016: Dipaleseng; Dr JS Moroka (including Mbibana sub-district); eMakhazeni (excluding Emgweya sub-district) ; eMalahleni (including Ga-Nala and Vosman districts); Dr Pixley ka Isaka Seme (including Amersfoort and Wakkerstroom sub-districts); Govan Mbeki (including Bethal and Secunda sub-districts); Lekwa; Mkhondo (including Amsterdam sub-district), Steve Tshwete (including Hendrina sub-district); Thembisile Hani (including kwaMhlanga sub-district) and Victor Kanye.

Sigogo AJ added that in the instances where provincial division has concurrent jurisdiction with the local division, it remains in the hands of the plaintiff or the applicant, guided by the convenience and expense, to choose the forum to litigate from. The court held that the consideration of convenience and expense in these circumstances inevitably will, in the main, be practised in favour of the dominus litis much to the inconvenience and expense of the respondent/defendant. The court pointed out that the Superior Courts Act aims to correct this situation. Sigogo AJ said this is the position because it resonates well with s 34 of the Constitution.  The court added that the promise of the right of access to justice as enshrined in s 34 of the Constitution is a promise that will be realised if litigants are given access to court in their locality.

Sigogo AJ said that GN615 GG42420/26-4-2019 unequivocally makes it clear that the Main Seat of the Mpumalanga Division does not have concurrent jurisdiction with the Middleburg Local Division to hear matters other than matters of appeal. The court added that the clear intention of the Minister in this regard is demonstrated by the fact that even in respect to the border magisterial district between the two seats of the Division (eMakhazeni District), the two seats do not have concurrent jurisdiction instead the district is shared between the two seats of the Division.

Sigogo AJ said that during June 2018 the parties concluded an oral agreement for supply of diesel products on a cash on delivery basis. The agreement was later varied to allow payment within 14 days delivery. The respondent fell in arrears. On 25 September 2019 the applicant issued a letter of demand in terms of s 345 of the 1973 Act against the respondent claiming an amount of R 907 777,18. The said letter of demand was delivered by Sheriff at the respondent’s previous registered address, which fell  under the Main Seat in Mbombela on 30 September 2019.

On 14 October 2019 the applicant prepared the Notice of Motion for the final winding-up of the respondent. On 15 November 2019 the respondent’s registered address was changed at the Companies and Intellectual Property Commission (CIPC) from Barberton to Emalahleni, falling under the local seat in Middleburg. Thereafter, on 18 November 2019, the applicant’s Notice of Motion was issued by the Registrar of Court at the Main Seat in Mbombela.

On 9 June 2021 the matter appeared before him and on this date the respondent had filed its answering affidavit and the applicant had filed its replying affidavit. In its answering affidavit the respondent averred that the registered offices are not in Barberton but in Emalahleni. The court added that other than making this factual averment no issues were taken in respect of the court’s jurisdiction. Sigogo AJ pointed out that it was on those bases that he called on the parties to address the court in respect to jurisdiction of the Mbombela Main Seat to hear this matter. In response to that invitation counsel for the applicant, Mr Masombuka, argued that the High Court in Mbombela had jurisdiction to entertain the matter on the basis that Emalahleni is within Mpumalanga Province and that the Mbombela Main Seat of the Mpumalanga Division of the High Court has jurisdiction on the whole of the province.

The court held: ‘After I had drawn the counsel’s attention to Government Gazette number 42420 dated 26 April 2019, he then presented an alternative argument. He argued that this court has jurisdiction because the respondent did not object to the court’s jurisdiction, as such it has subjected itself to the court’s area of jurisdiction, contends the applicant’s counsel’. The court further pointed out that in reply to the respondent’s submission the applicant’s counsel urged the court, in the interest of justice and not placing form over substance, to continue to hear the matter even though the court does not have necessary territorial jurisdiction over respondent. Failing which, he argued, the court should invoke the provisions of s 27(1) of the Superior Courts Act.

Sigogo AJ said that having regard to the fact that both counsels did not appear to appreciate that his court lacked jurisdiction to hear the matter, he was satisfied that the respondent could be said to have subjected itself to the jurisdiction of the Mpumalanga High Court in Mbombela. The court pointed out that for a litigant to subject himself to a court’s jurisdiction such litigant must take a conscious decision to so subject itself. Sigogo AJ added that that meant that the respondent’s litigant must firstly know that the court does not have jurisdiction over him, but nonetheless elect to subject himself in that court’s jurisdiction. He must consent to the court’s jurisdiction.

The court said that to dismiss the matter for lack of jurisdiction will not take away the dispute between parties. ‘I did not find the dismissal of this matter to be an answer to the issue of jurisdiction. On the other hand, to proceed with the hearing of the matter as submitted by counsel for the applicant was going to perpetuate the wrong practice where the parties’ issue processes without firstly determining the correct forum having jurisdiction to hear the matter,’ Sigogo AJ said. The court arrived at the conclusion that the solution of the matter rested in s 27 of the Superior Courts Act.

The court pointed out that in light of the provisions of GN615 GG42420/26-4-2019 read with s 27 of the Superior Courts Act it became clear that the proceedings of this matter were supposed to have been issued in the Middleburg Local Seat. Sigogo AJ said that having heard counsel for both parties in this regard, he was persuaded that it will be in the best interest of justice that the matter be removed to the court having jurisdiction.

The court made the following order –

‘The Mbombela Seat of the Mpumalanga Division of the High Court of South Africa does not have jurisdiction to entertain this matter.

The Seat having jurisdiction to hear this matter is the Middleburg Local Division of the Mpumalanga Division of the High Court of South Africa.

In the circumstance the proceedings herein are removed to the Middleburg Local Division.

The Registrar of the main seat, Mbombela is ordered to forthwith transfer the Court file in this matter together with this order to the Registrar at the local seat Middleburg.

Reasons for the order shall be made available to the parties in due course.

There is no order as to costs.’

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2021 (Oct) DR 32.

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