“I want to conclude a repayment agreement with a debtor for an amount which exceeds the magisterial jurisdictional amount of R400 000,00. I, however, do not want to abandon any part of my claim and would rather opt to insert a clause in the agreement where the debtor and myself consent to the jurisdiction of the Magistrates Court in order to save costs when action is brought due to the debtor failing to perform in terms of the agreement. Kindly explain this situation to me.”
Parties to a contract more frequently than not insert a “Consent to Jurisdiction” clause which allows the grieving party the opportunity to approach the relevant Magistrates Court without having to prove jurisdiction. Section 45 of the Magistrates Court Act reads as follows:
“45. Jurisdiction by consent of parties.
(1) Subject to the provisions of section 46, the parties may consent in writing to the jurisdiction of either the court for the district or the court for the regional division to determine any action or proceedings otherwise beyond its jurisdiction in terms of section 29(1).
(2) Any provision in a contract existing at the commencement of the Act or thereafter entered into, whereby a person undertakes that, when proceedings have been or are about to be instituted, he will give such consent to jurisdiction as is contemplated in the proviso to subsection (1), shall be null and void.
(3) Any consent given in proceedings instituted in terms of section 57, 58, 65 or 65J by a defendant or a judgment debtor to the jurisdiction of a court which does not have jurisdiction over that defendant or judgment debtor in terms of section 28, is of no force and effect.”
Section 29(1)(d) of the Magistrates Court Act (hereafter the “Act”) states that a Magistrates Court has jurisdiction in a cause of action resulting from or arising out of a liquid document where the claim does not exceed the jurisdictional amount. However, in terms of section 45(1) above, parties can confer or extend jurisdiction to the Magistrates Court by agreement between them subject to certain limitations.
In the case of Daljosaphat Restorations (Pty) Ltd v Kasteelhof CC, the court held that the conferral of jurisdiction cannot be made unto a court by litigants who otherwise did not possess such jurisdiction in the first place. Thus, section 28 is imperative as it addresses jurisdiction in respect of persons and holds that a court is deemed to have jurisdiction over a person if such person resides, carries on business or is employed within that specific jurisdiction. This means that the alleged debtor who will sign the repayment agreement and consent to the Magistrate Court’s jurisdiction will still have to reside, carry on business or be employed within the jurisdiction of the Magistrate Court. If this is the case, then the parties will be able to consent to such jurisdiction and therefore section 45(2) will have no application. Section 46 will also not be applicable in this instance.
With regards to the amount that is being claimed, in cases such as Truck and Car Co (Pty) Ltd v Ewart, Skead v Swanepoel and Pfeiffer v First National Bank of SA Ltd it was determined that the words appearing in Section 45(1) being “otherwise beyond its jurisdiction” has reference to the amount being claimed. Therefore, these words allow for a creditor to bring a monetary claim, which is above the magisterial jurisdictional amount, before the Magistrates Court if this was consented to by the parties.
When parties consent to the jurisdiction of the Magistrates Court, section 45(1) does not expel the High Court’s jurisdiction unless there is a clear indication that the parties intended the Magistrates Court to have exclusive jurisdiction in the matter. Thus, if the High Court is not expressly excluded in the agreement between the parties, then the High Court remains to have concurrent jurisdiction in the matter which conveys that any party may institute action resulting from the agreement between them in either of these Courts.
In conclusion, should the debtor reside, carry on business or be employed within the jurisdiction of this Magistrates Court; the parties are permitted to agree in writing to confer jurisdiction upon the Magistrates Court regarding the amount claimed. Should there be no clause to expressly exclude the High Court’s jurisdiction, then the Magistrates Court and High Court will have concurrent jurisdiction. This means that the Creditor will be within his rights to institute action in either the Magistrates Court or the High Court.
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