On Wednesday, a full bench of the Johannesburg High Court held that repossessed homes may no longer be sold at auction without reserve prices.
The case deals with process that a bank is required to follow to sell a person's home in execution. A sale in execution or bank repossession takes place when a debtor is unable to repay the monthly installments in terms of a loan they owe to a bank and the debtor’s property is sold at a public auction by the sheriff of the court to pay off the debt. Often, the property sold will be the debtor’s home. To sell a debtor’s home, a creditor or bank must approach a court to get a court order allowing it to sell the home.
In order to protect the rights of debtors, section 129(3) of the National Credit Act allows the debtor to “reinstate” a loan agreement at any time before the bank seeks to execute the loan agreement against him or her by paying their arrears and the bank’s reasonable costs occurred for enforcing the agreement.
Since section 129(3) of the National Credit Act has taken effect, the practice in the Johannesburg High Court has been to postpone applications to have a person's home declared specifically executable for a certain period in order to enable a debtor to bring up their arrears, thereby reinstating the credit agreement and ensuring that they do not lose their home.
The question raised in this case was about whether courts have the power to postpone a money judgment against a debtor for determination simultaneously with the application for leave to execute against the debtor’s home. A question that is linked to this is whether, if courts do not have this power, the execution of a money judgment precludes a debtor from reinstating the mortgage loan agreement in terms of section 129(3) of the National Credit Act.
SERI was invited by the Johannesburg High Court to make a submission as an amicus curiae (friend of the court) in the case. SERI argued that courts have the power to postpone money judgments and even have the power to refuse money orders in cases where the banks have established a contractual right to it. If the courts did not have this power, the purposes of section 129(3) and the possibility of reinstatement would be circumvented. SERI also argues that allowing a bank to claim a money judgment would preclude a debtor from reinstating the mortgage agreement, which would effectively mean that banks can circumvent section 129(3) of the National Credit Act.
On 12 September 2018, a full bench of the Johannesburg High Court held consistently with SERI’s submissions, that the application for the money judgment should always be postponed for determination together with the application for leave to execute. The Court further held that a reserve price should, save in exceptional circumstances, always be set. This means that repossessed homes may no longer be sold at auction without reserve prices.
Earlier this month, a coalition of civil society organisations called South Africa’s Ratification Campaign of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and its Optional Protocol (the Campaign) submitted a report on the South African government's progress in realising socio-economic rights to the United Nations Committee on Economic, Social and Cultural Rights (the Committee), the international treaty body responsible for monitoring the implementation of socio-economic rights by states. The Campaign's parallel report provides a civil society perspective on the realisation of socio-economic rights in South Africa, and raises questions about the state’s record in fulfilling these rights in order to promote greater accountability. It also reports on the compliance status of the South African government with regard to the ICESCR.
The Campaign's report responds to, and challenges some components of, the South African government's initial periodic report on the implementation of socio-economic rights, which was submitted to the Committee in April 2017. In its report, the South African government emphasised South Africa's progressive Constitution that includes socio-economic rights such as the right to social security, right to access to adequate housing, health and education.
The Campaign's report notes that actions to address the binding constraints to socio-economic rights realisation are increasingly urgent in the South African context of severe poverty and inequality. For this reason, the Campaign identifies the need for the state to address forced evictions and displacement; to assess the causes of under-expenditure on informal settlement upgrading; to address a lack of investment in infrastructure maintenance and services provision, and the urgent need to address intergovernmental cooperation issues that impacted severely in the management of the drought in the Western Cape. In its parallel report, the Campaign makes clear recommendations with respect to:
The Campaign's report is due for consideration by the Committee on 1-3 October 2018, during the Committee's 64th session. The Campaign’s Steering Group is comprised of the Socio-Economic Rights Institute of South Africa (SERI), Black Sash, the Dullah Omar Institute (DOI), the People’s Health Movement South Africa (PHM-SA), and the Studies in Poverty and Inequality Institute (SPII), and also draws on expert inputs from the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape, and Prof Lilian Chenwi and Prof Jackie Dugard at the University of the Witwatersrand.
On 5 September 2018, the Johannesburg High Court ordered that Hloniphokwawe Goge, a resident living in a temporary emergency accommodation facility and shelter in Johannesburg called Ekuthuleni, was allowed to remain in the shelter and continue occupying his room after the Christian organisation that manages the shelter, Metropolitan Evangelical Services (MES), tried to evict him by denying him access to his room.
In 2012, in accordance with an order of the Constitutional Court, Goge and 29 other unlawful occupiers living were accommodated at the shelter after they had been evicted from a commercial building on Saratoga Avenue in Johannesburg’s inner-city. Goge has been living there since. On 18 June 2016, Goge got into an argument with another shelter resident, Busi Nhlapo. During the altercation, Nhlapo threw a pot of boiling water over Goge. Goge left the shelter to tend to his injuries. Three months later, he returned, and re-occupied his room. However, the day after that, the shelter manager unlawfully evicted Goge by denying him access to his room. With nowhere else to go, Goge, with the assistance of SERI, approached the High Court for an order allowing him to reoccupy his room. The Johannesburg High Court ordered that Goge was entitled to reoccupy his room.
This decision was appealed by MES and the City of Johannesburg, who argued that Goge had voluntarily vacated the shelter, and that, if he had not, his eviction was nonetheless justified by the need to protect Nhlapo. MES and the City also argued that the shelter was not Goge's home, despite the fact that he had lived at the shelter for almost five years.
In a judgment of the Full Bench of the Johannesburg High Court, written by Judge Mashile, the court rejected MES and the City's arguments. The court found that any significant interference with a person's place of residence constitutes an eviction, including refusing a person access their home after a period of absence. The court held that section 26(3) of the Constitution and the Prevention of Illegal Evictions, and Unlawful Occupation of Land, Act 19 of 1998 (the PIE Act) also grant protection to people living in homeless shelters. The court also strongly disagreed with MES and the City's arguments that Goge had voluntarily vacated the shelter, saying that these claims were "quite fanciful, palpably implausible and far-fetched". As a result, the court found that the shelter manager's actions amounted to an unlawful eviction (as the eviction was not authorised by a court order) and that Goge was alloed to remain in the shelter.
On 2 September 2018, SERI researcher Tiffany Ebrahim participated in a panel discussion, entitled “Current Housing Struggles and Land Occupation in Gauteng”, at the Jozi Book Fair at the Workers Museum on Mary Fitzgerald Square in Newtown, Johannesburg. The panel, which was organised by the International Labour Research and Information Group (ILRIG), sought to unpack the housing and land challenges facing the urban poor in Gauteng and how the state has responded to these challenges.
Ebrahim's presentation was primarily focused on the existing constitutional, legislative and policy framework governing land, housing and evictions in South Africa. She also emphasised the mechanisms though which the security of tenure of informal settlement residents could be strengthened and how the state's ability to expropriate land could be used as an additional mechanism to realise the housing and land rights of the urban poor.
Ebrahim was joined on the panel by a representative from Lawyers for Human Rights (LHR) and the Gauteng Civics Association (GCA) - a community-based organisation that was established in May 2017 in response to a number of housing and development struggles facing communities in the south of Johannesburg, including Eldorado Park, Ennerdale and Freedom Park.
On 29 August 2018, the Good Governance Learning Network, a network of non-profit organisations that aims to share knowledge and collectively promote accountable and democratic local governance, published its annual publication on the state of local government in South Africa. The current issue, entitled Developmental Local Government: Dream Deferred?, allows member organisations to reflect on the complexities of development at local government level. SERI has been a long-standing member organisation of the network and contributed to the publication.
SERI’s contribution, written by SERI researchers Tiffany Ebrahim and Maanda Makwarela, is entitled “Local Democratic Space in Informal Settlements". The chapter reflects on how local communities in two informal settlements, namely Marikana informal settlement (in Phillipi in the Western Cape) and Siyanda informal settlement (in KwaMasha in KwaZulu-Natal), engage with government officials though formal and informal participatory channels to access basic services, avoid eviction and strengthen their tenure security. A key finding of the chapter is that ward councillors play a significant role in assisting or curtailing informal settlement communities' access to basic services. In essence, ward councillors act at gatekeepers to upgrading and are therefore a critical institution though which communities should advocate for the upgrading of their settlements.