The right to life, the right to equality and the right of access to courts

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Reference techniques

In this thesis, the style employed is similar to that applied in the Potchefstroom Electronic Law Journal, supplemented by The Oxford Standard for Citation of Legal Authorities (OSCOLA). Full details of sources of reference are not included in the text of the footnotes but may be found in the bibliography. Given the increased tendency for secondary sources, including academic and practitioners’ commentary, media reports, as well as codes, policies and practice manuals, to be accessible electronically via the internet, it was decided not to differentiate in the bibliography between secondary sources referred to in hard copy and those accessed via internet websites. Only sources specifically mentioned in the footnotes have been included in the bibliography. Given the case-driven nature of the development of this area of the law, in certain chapters there are numerous references, in the footnotes, to many different cases and paragraph numbers in judgments, with cross-references to judicial comment in relation to other judgments. In order to avoid confusion, the decision was made to specify the case name and relevant paragraph numbers in each footnote. Therefore, terms such as « ibid » and « idem » are not employed in the footnotes. This has resulted in repetition of case names, and other references, in successive footnotes. However, it is hoped that, overall, this will be more convenient for the reader.

Individual debt enforcement

According to Germanic custom, a debtor could be sold into slavery and, during the feudal regime, a debtor could be compelled to work for his creditor.147 Old Dutch handvesten permitted a debtor who was unable to pay his creditor to be handed over to him until the debt was paid.148 Apparently, before the introduction of cessio bonorum, 149 the law of Holland provided only for execution against the person.150 The early « selfhelp » procedure received judicial sanction in situations where the defendant refused to appear in court, the rationale being that an obstinate defendant should be deprived of the protection of the law. However, partly because of the sanctity of personal freedom, the defendant was required to be called three times to appear before a judge, with considerable intervals in between, before he was regarded as being in default. Wessels states this « tenderness towards the defendant always formed a marked feature in the procedure of the Dutch courts …

Collective debt enforcement

Originally, in the Netherlands there was no uniform insolvency system. Customs rooted in Roman law principles developed to deal with insolvent estates.173 In many places, common law rules applied174 while in some areas special ordinances were issued to deal with insolvent and other estates.175 Cessio bonorum was introduced into Holland in the fifteenth or sixteenth century.176 It was not available as of right to a debtor177 but was a privilege extended by the court, in its discretion, to a debtor whose insolvency arose because of misfortune.178 Full disclosure of the position of the debtor’s estate was required in what has been described as a complicated and expensive procedure, in a petition to court, with notice to creditors.179 Once a report was received from the burgomaster180 and governing authority of the place where the debtor was domiciled, the court would grant a rule nisi calling on persons to show cause why the provisional writ of cessio bonorum, known as brieven van cessie, should not be made final. The issue of the provisional writ prevented the arrest of the debtor and its confirmation effected a stay of execution against his assets which were placed in the custody of a curator.1

Real security

Mortgage,209 as defined by Grotius, is a « right over another’s property which serves to secure an obligation ».210 The ancient form of German pledge was not an accessory agreement but more a kind of « alternative payment » whereby the debtor delivered to the creditor, as provisional payment, something different from the object promised and which he could « redeem » once he performed his obligation. The debtor could choose not to perform what he had promised but to allow the object to remain with the creditor as fulfilment of their agreement. Further, if the creditor sold the object to a third party the debtor could not reclaim it. These aspects indicate that the creditor was regarded as the owner of the thing « pledged » and that, in a sense, credit was in fact not granted.211 In time, the Roman law principles relating to pignus and hypotheca were adopted so that by the time of Grotius the law of Holland, in relation to pledge, was similar to the Roman law of Justinian’s time.212 Initially, when immovable property was pledged, the creditor became dominus with full usufruct of the land on the basis that he had promised to transfer the land back to the debtor once the debt was paid. If the debt was not paid within the stipulated time, the mortgagee remained the owner.

Moratoria

General moratoria were extended as emergency measures in the Netherlands as a result of disasters, wars and revolution227 and, in addition to cessio bonorum, there were four benefits, originally based on the Roman law dilatio, available to debtors:228 brieven van inductie, 229 brieven van respijt, 230 seureté du corps231 and surchéance van betaalinge. 232 In terms of legislation issued in 1581, brieven van inductie233 could be issued by the High Court of Holland upon application by the debtor if the majority of creditors, who could bind the minority, agreed to a postponement of payment and the debtor provided security for payment upon the expiry of such period.234 This provided the debtor with a financial « recovery period » during which no creditor could sue him or execute against his property or his person.

Reception of Roman-Dutch law and English law in South Africa

In 1652, the Dutch East India Company established a halfway refreshment station, including a vegetable garden and a hospital, for ships travelling between the Netherlands and the East Indies. The commander of the settlement was Jan van Riebeeck who established a rudimentary judicial system, at first administered by himself and his staff, applying the laws of the Province of Holland. These events led to the Cape Colony being established and the introduction of Roman-Dutch law into South Africa.246 In 1656, a Justitie ende Chrijghsraet was created to deal with legal matters. Except for the introduction of civil courts, called the courts of landdrosten and heemraden, for more remote areas outside Cape Town and the substitution of the Justitie ende Chrijghsraet with the Raad van Justitie, this basic structure of the administration of justice remained until the end of the first period of Dutch occupation of the Cape in 1795.

Interpretation

Section 39(1)(a) requires a court when interpreting the Bill of Rights « to promote the values that underlie an open and democratic society based on human dignity, equality and freedom. »24 The duty to promote emphasises that « transformative constitutionalism » and « a socially interconnected and embodied concept of humanity » are envisaged.25 Significant, in this context, is the concept of ubuntu which is recognised as being one of the values that section 39(1) requires to be promoted.26 In S v Makwanyane, 27 Mokgoro J associated ubuntu with concepts such as « humanity » and « menswaardigheid » (« human dignity »)28 and Langa J described ubuntu as capturing, conceptually:

TABLE OF CONTENTS :

• Acknowledgements
• Abstract
• CHAPTER 1 INTRODUCTION
  • 1.1 Background
  • 1.2 Research statement
  • 1.3 Research objectives and methodology
  • 1.4 Delineations and limitations
  • 1.5 Terminology
  • 1.6 Reference techniques
  • 1.7 Overview of chapters
• CHAPTER 2 HISTORICAL OVERVIEW
  • 2.1 Introduction
  • 2.2 Roman law
    • 2.2.1 General background
    • 2.2.2 Individual debt enforcement
    • 2.2.3 Collective debt enforcement
    • 2.2.4 Debt relief measures available in Roman law
    • 2.2.5 Real security
    • 2.2.5.1 Forms of real security
    • 2.2.5.2 The creditor’s rights
  • 2.2.6 Significance of the family home in the Roman social and historical context
  • 2.3. Roman-Dutch law
    • 2.3.1 General background
    • 2.3.2 Individual debt enforcement
    • 2.3.3 Collective debt enforcement
    • 2.3.4 Real security
    • 2.3.5 Debt relief measures available in Roman-Dutch law
    • 2.3.5.1 Composition
    • 2.3.5.2 Moratoria
    • 2.3.5.3 Debt relief measures based on contract
  • 2.4 Reception of Roman-Dutch law and English law in South Africa
  • 2.5 Conclusion
• CHAPTER 3 CONSTITUTIONAL IMPACT AND IMPLICATIONS
  • 3.1 Introduction
  • 3.2 Application, interpretation and limitation of rights
  • 3.2.1 Application
    • 3.2.2 Interpretation
    • 3.2.3 Limitation of rights
  • 3.3 Rights potentially affected by the sale in execution of a debtor’s home
    • 3.3.1 The right to have access to adequate housing
    • 3.3.1.1 Background
    • 3.3.1.2 The right to have access to adequate housing as a socio-economic right
    • 3.3.1.3 The right to have access to adequate housing and its impact on private law
    • 3.3.1.4 The right to have access to adequate housing in eviction cases
  • (a) .. Analogies between eviction from and execution against the home
  • (b) The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act
  • (c) The state’s duty to provide housing
  • (d) « Meaningful engagement »
    • 3.3.2 Section 10: Human dignity
    • 3.3.3 Section 28: Children’s rights
    • 3.3.4 Section 25: Property
    • 3.3.5 The right to life, the right to equality and the right of access to courts
  • 3.4 Conclusion
• CHAPTER 4 LAW AND POLICY RELEVANT TO THE PROTECTION OF A DEBTOR’S HOME IN THE INDIVIDUAL DEBT ENFORCEMENT PROCESS
  • 4.1 Introduction
  • 4.2 Housing law and policy
    • 4.2.1 Statutory housing law and policy
    • 4.2.2 Sale of a state-subsidised home
    • 4.2.3 Housing delivery
  • 4.3 Select aspects of private law: contract and mortgage
    • 4.3.1 Enforcement of a contractual debt
    • 4.3.2. Debt relief measures available in the common law of contract
    • 4.3.3 Mortgage
  • 4.4 Select aspects of the individual debt enforcement procedures
  • 4.4.1 General
  • 4.4.2 Jurisdiction
  • 4.4.3 The magistrates’ courts
    • 4.4.3.1 Summons
    • 4.4.3.2 Judgment
    • 4.4.3.3 Execution against immovable property
    • 4.4.3.4 Property protected from seizure, attachment and execution
    • 4.4.3.5 Alternative orders for payment
    • 4.4.3.6 Administration order
    • 4.4.3.7 Sale in execution invalid in absence of judicial oversight
  • 4.4.4 The high court
  • 4.4.4.1 Summons
  • 4.4.4.2 Judgment
  • 4.4.4.3 Execution
  • 4.4.4.4 Assets protected from seizure
  • 4.5 The National Credit Act
  • 4.5.1 Overview
  • 4.5.2 Debt enforcement under the NCA
  • 4.5.3 Debt relief measures: debt review and « reckless lending »
  • 4.5.4 Difficulties experienced in interpretation and application of the NCA
  • 4.5.5 Preliminary observations regarding the NCA and forced sale of the home
  • 4.6 The Consumer Protection Act
  • 4.7 Conclusion
  • 4.7.1 The state’s duty to provide housing
  • 4.7.2 Contract and mortgage
  • 4.7.3 The debt enforcement process: substantive and procedural requirements
  • 4.7.4 Consumer debt relief
• CHAPTER 5 PROTECTION OF THE DEBTOR’S HOME IN THE INDIVIDUAL DEBT ENFORCEMENT PROCESS
  • 5.1 Introduction
  • 5.2 Jaftha v Schoeman
    • 5.2.1 The issue and the facts
    • 5.2.2 The decision of the high court
    • 5.2.3 The decision of the Constitutional Court
  • 5.3 Developments following Jaftha v Schoeman
    • 5.3.1 Background
    • 5.3.2 Divergent approaches in the high court
    • 5.3.2.1 Standard Bank v Snyders
    • 5.3.2.2 Practice Rules in the KwaZulu-Natal High Court
    • 5.3.2.3 Nedbank v Mortinson
  • 5.3.3 Comments on the position post-Jaftha v Schoeman
  • 5.4 Standard Bank v Saunderson
  • 5.4.1 Issues and the decision
  • 5.4.2 On appeal: Campus Law Clinic v Standard Bank
  • 5.4.3 Comments on Standard Bank v Saunderson
  • 5.5 Developments following Standard Bank v Saunderson
  • 5.5.1 Background
  • 5.5.2 ABSA v Ntsane
    • 5.5.2.1 The facts and the issues
    • 5.5.2.2 The decision
    • 5.5.2.3 Comments on ABSA v Ntsane
  • 5.5.3 Other issues arising during this period
  • 5.5.3.1 Wording of the summons
  • 5.5.3.2 Retrospective effect of Jaftha v Schoeman
  • 5.5.4 The impact of the NCA
    • 5.5.4.1 Background
    • 5.5.4.2 Standard Bank v Hales
    • 5.5.4.3 FirstRand Bank v Maleke
    • 5.5.4.4 FirstRand Bank Ltd v Seyffert
    • 5.5.4.5 FirstRand Bank v Siebert
    • 5.5.4.6 FirstRand Bank v Meyer
    • 5.5.4.7 January v Standard Bank
  • 5.5.5 Comments on developments after Standard Bank v Saunderson
  • 5.6 Gundwana v Steko and subsequent cases
  • 5.6.1 Background
  • 5.6.2 Gundwana v Steko
    • 5.6.2.1 The principle established
    • 5.6.2.2 The facts
    • 5.6.2.3 The issues, the arguments and the decision
  • 5.6.3 Nedbank v Fraser
  • 5.6.4 FirstRand Bank v Folscher
    • 5.6.4.1 Background
    • 5.6.4.2 Main aspects of the judgment
  • (a) The amended rule 46(1) and the decision in Gundwana v Steko
  • (b) The meaning of « relevant circumstances »
  • (c) Execution in the context of mortgage
  • (d) Abuse of process
  • (e) A list of relevant factors
  • (f) Informing the debtor
  • (g) Manner of obtaining information
  • 5.6.5 High court practice in Gauteng
  • 5.6.6 Standard Bank v Bekker
  • 5.6.7 Mkhize v Umvoti Municipality
  • 5.6.8 Comments on the position post-Gundwana v Steko
  • 5.7 Conclusion
• CHAPTER 6 TREATMENT OF THE HOME IN SOUTH AFRICAN INSOLVENCY LAW
  • 6.1 Introduction
  • 6.2 Overview of the applicable insolvency law and process
  • 6.3 Considerations pertaining to the insolvent’s home
  • 6.3.1 Constitutional considerations
  • 6.3.2 Possible eviction and homelessness after sequestration
  • 6.4 Sequestration procedures and consideration of debt relief measures posing alternatives to liquidation of assets
    • 6.4.1 Voluntary surrender
    • 6.4.2 Compulsory sequestration
    • 6.4.3 Alternatives to the liquidation of assets
    • 6.5 Estate property
    • 6.6 Excluded and exempt property
    • 6.6.1 Exclusions and exemptions currently applicable in insolvency
    • 6.6.2 Reform initiatives
    • 6.6.3 Considerations relevant to the insolvent’s home
  • 6.7 Vesting of the solvent spouse’s property
  • 6.8 Realisation of estate assets
  • 6.9 Rehabilitation and discharge from pre-sequestration debts
  • 6.10 Interaction between the Insolvency Act and the NCA
  • 6.10.1 Background
  • 6.10.2 Debt review does not preclude sequestration: Investec v Mutemeri
  • 6.10.3 Application for debt review as an act of insolvency: FirstRand Bank v Evans
  • 6.10.3.1 Facts and issues
  • 6.10.3.2 The decision
  • 6.10.3.3 Comments
  • 6.10.4 Applications for voluntary surrender and the NCA
  • 6.10.5 Abuse of process
  • 6.10.6 The need for alignment between the insolvency process and other debt relief mechanisms
  • 6.11 Implications for insolvency law of recent developments in the individual debt enforcement process
  • 6.12 Conclusion
• CHAPTER 7 COMPARATIVE SYSTEMS: TREATMENT OF A DEBTOR’S HOME IN FOREIGN JURISDICTIONS
  • 7.1 Introduction
  • 7.2 United States of America
    • 7.2.1 General and historical background
    • 7.2.2 The current homestead exemptions
    • 7.2.3 Bankruptcy provisions
    • 7.2.4 The recent recessions and related developments
    • 7.2.5 Comment
  • 7.3 Canada
  • 7.3.1 General and historical background
    • 7.3.2 The statutory home exemptions
    • 7.3.3 The individual debt enforcement process
    • 7.3.4 Treatment of the home in bankruptcy
  • 7.3.5 Comment
  • 7.4 New Zealand
  • 7.4.1 General
  • 7.4.2 Comment
  • 7.5 England and Wales
  • 7.5.1 General
  • 7.5.2 Historical background
  • 7.5.3 Statutory treatment of the debtor’s home
  • 7.5.3.1 General
  • 7.5.3.2 The individual debt enforcement process
    • (a) Where the debtor is the sole owner of the home
    • (b) Where the home is jointly owned 7.5.3.3 The bankruptcy process
    • (a) Where the debtor is the sole owner of the home
    • (b) Where the debtor is co-owner of a jointly owned home
    • (c) The interpretation of « exceptional circumstances » and the impact of the Human Rights Act
    • (d) Other relevant provisions of the Insolvency Act
    • (i) Trustee may obtain charging order
    • (ii) Restriction on sale of « low equity » home
    • (iii) Trustee to deal with home within three years
    • (iv) Individual Voluntary Arrangement
    • 7.5.4 The recent recessions and related developments
  • 7.5.4.1 Council of Mortgage Lenders’ commitment
  • 7.5.4.2 Mortgage Conduct of Business rules
  • 7.5.4.3 Regulation of sale-and-rent-back schemes
  • 7.5.4.4 Regulation of administration costs
  • 7.5.4.5 The Pre-Action Protocol
  • 7.5.5 Comment
  • 7.5.5.1 Comment on the position in England and Wales
  • 7.5.5.2 Comparative comment from a South African perspective
  • 7.6 Scotland
  • 7.6.1 General
  • 7.6.2 The individual debt enforcement process
  • 7.6.3 The bankruptcy process
  • 7.6.3.1 Sale of home by trustee
  • 7.6.3.2 The trust deed
  • 7.6.4 The proposed home exemption
  • 7.6.5 Comment
  • 7.7 Ireland
  • 7.7.1 General
  • 7.7.2 The individual debt enforcement process
  • 7.7.2.1 Statutory provision for family home protection
  • 7.7.2.2 Mortgage Arrears Resolution Process
  • 7.7.2.3 The proposed Family Home Bill
  • 7.7.3 Proposed insolvency reform
  • 7.7.4 Comment
  • 7.8 Other developments within the EU
  • 7.9 Conclusion
• CHAPTER 8 CONCLUSION
  • 8.1 The status quo
  • 8.2 Research undertaken and principal findings
  • 8.2.1 Historical insights
  • 8.2.2 Constitutional considerations
  • 8.2.3 Applicable law and policy forming background to the reported cases
  • 8.2.3.1 Housing
  • 8.2.3.2 The debt enforcement process and consumer debt relief mechanisms
  • 8.2.4 Treatment of the debtor’s home in the individual debt enforcement process
  • 8.2.5 Treatment of the debtor’s home in the insolvency process
  • 8.2.6 Comparative observations
  • 8.2.6.1 General
  • 8.2.6.2 Home exemption
  • 8.2.6.3 Postponement of forced sale of the debtor’s home
  • 8.2.6.4 Forced sale as a last resort
  • 8.2.6.5 Debt repayment plans
  • 8.2.7 Aspects providing useful lessons from abroad
  • 8.3 Proposals
  • ANNEXURE A

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Statutory regulation of forced sale of the home in South Africa