IN THE EQUALITY COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NO: 050086/2024
REPORTABLE: NO OF INTEREST TO OTHER JUDGES: NO REVISED. 30/09/24 ………………… ……………………… Date ML TWALA
In the matter between:
STEPHEN CHAUKE APPLICANT
And
MEMBER OF THE EXECUTIVE COUNCIL FOR
PUBLIC WORKS, & INFRASTRUCTURE AND
HUMAN SETTLEMENTS OF GAUTENG RESPONDENT
JUDGMENT
TWALA J
Introduction
[1] The applicant, Mr Stephen Chauke, as a representative of members of the local community group known as the S[...] Wildebeesfontein Elected Civic Organisation (“Streweco”), and as a resident at S[...] Extension […] and a former client of Hlano Financial Services (Pty) Limited (“Hlano”), brought this application in terms of the provisions of the Promotion of Equality and Prevention of Unfair Discrimination Act, 4 of 2000 (“the Equality Act”) on behalf of the other residents of S[...] who are known as “the Excluded Hlano Borrowers” seeking the following order:
1.1 It is declared that the Member of the Executive Council for Public Works & Infrastructure and Human Settlements of Gauteng (“the Respondent”) unfairly discriminates in terms of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (“the Equality Act”) by failing and/or refusing and/or neglecting to settle the obligations due to Hlano Financial Services (Pty) Ltd (“Hlano”) for the S[...] Excluded Hlano Borrowers to receive their free and unencumbered title deeds.
1.2 It is declared that the Respondent unfairly discriminates in terms of the Equality Act by failing and/or refusing and/or neglecting to settle the obligations due to Hlano for all Excluded Hlano Borrowers in Gauteng to receive their free and unencumbered title deeds.
1.3 It is declared that the Respondent unfairly discriminates in terms of the Equality Act by failing and/or refusing and/or neglecting to honour the terms of the Process Agreement concluded between the State and Hlano to settle the loans of the Excluded Hlano Borrowers in Gauteng whilst the State settled the outstanding loans of members of the Banking Council, giving free and unencumbered home ownership to thousands of the beneficiaries.
1.4 It is declared that the Respondent unfairly discriminates in terms of the Equality Act in that during or about 2024 the Respondent settled some of the Hlano Borrowers home loans and handed over unencumbered title deed to them following litigation between Hlano and the Respondent but left 1535 Hlano Borrowers in Gauteng without their unencumbered title deeds.
1.5 As a result of the Respondent’s failure and/or refusal and/or neglect to settle the obligations due to Hlano for the S[...] Excluded Hlano Borrowers, the Excluded Hlano Borrowers continue to be prejudiced in that:
a. The Excluded Hlano Borrowers’ rights to housing is violated by the Respondent’s failure to pay and thereby to secure their tenure over their homes. Their homes remain subject to bonds, or have not been transferred to them, only because the Respondent has not, to date, effected payment.
b. The Excluded Hlano Borrowers live in, maintain, and improve their homes without the certainty that they will ultimately secure unencumbered title over the occupied properties. They cannot sell their properties to tailor their homes to their lifestyles – whether by upscaling, downsizing or moving to different areas altogether.
c. The Excluded Hlano Borrowers are unable to use their properties as collateral to raise money. This lack of access to credit causes considerable hardship and undermines their rights. It undermines their ability to transfer their wealth to their beneficiaries, thereby perpetuating the inability to create and transfer wealth building to the next generation.
1.6 The Respondent’s failure to pay timeously is detrimental to the public interest and is irrational because interest continues to accrue on their home loans. The Respondent’s delays in paying its obligations increase its total liability at the taxpayers’ expense.
1.7 The S[...] Hlano Excluded Borrowers be treated in the same manner as the Hlano Record of Understanding (“ROU”) Borrowers concluded between the State and Association of Mortgage Lenders.
1.8 The Respondent is ordered to settle the outstanding obligations of the S[...] Hlano Excluded Borrowers and all other the Excluded Hlano Borrowers in Gauteng and hand over their unencumbered tittle deeds within 30 days from date of this order.
1.9 Further and/or alternative relief.
1.10 Cost of suit.
[2] The application is opposed by the MEC for Human Settlements for Gauteng (“the MEC”), as head of a provincial sphere of government, who has filed a comprehensive answering affidavit which raised eight points in limine including the point that this Court does not have jurisdiction to hear this case. Two of these points in limine will become relevant in the discussion that will follow below.
[3] It is worth noting that at the previous case management of this case, the parties agreed that the MEC who was late in filing its opposing papers would file its papers including an application for condonation for the late filing of the papers and the MEC has accordingly obliged. Furthermore, it was agreed that, at this hearing the only issue for determination would be the issue of jurisdiction of this Court in terms of section 20 of the Equality Act.
[4] Going forward in this judgment, I propose to refer to Mr Chauke as the applicant and to the Excluded Hlano Browers as the applicants and the respondent as the MEC.
Preliminary Issue
[5] No opposition was filed to the application for condonation of the late filing of the answering affidavit by the MEC nor were any submissions made in court at the hearing of this case. It was left for the court to determine the issue of condonation on the papers. The MEC attributed the delay in that he/she only received notification of the application from the office of the Deputy President of the Republic more than a month after the application was served on the office of the State Attorney. The MEC then instructed its attorneys of record to source the whole application papers from the court online portal and it turned out to be a bulky application comprising of more than 400 pages.
[6] The MEC’s attorney of record had to familiarise herself with the issues in the papers and formulate a way forward after consultation with various members of the department of human settlement. Further, the attorney of record for the MEC had to consider the judgment and outcome of the litigation between Hlano and the MEC which was under case number 40390/2020. The actual delay is not of inconsiderate period, since it is only forty-six days from the time limits set by the applicant in its application.
[7] In Van Wyk v Unital Hospital and Another1 the Constitutional Court stated the following:
“[20] This Court has held that the standard for considering an application for condonation is the interests of justice. Whether it is in the interests of justice to grant condonation depends on the facts and circumstances of each case. Factors that are relevant to this enquiry include but are not limited to the nature of the relief sought, the extent and cause of the delay, the effect of the delay on the administration of justice and other litigants, the reasonableness of the explanation for the delay, the importance of the issue to be raised in the intended appeal and the prospects of success.”
[8] The Constitutional Court continued and stated that:
“[22] An applicant for condonation must give a full explanation for the delay. In addition, the explanation must cover the entire period of delay. And, what is more, the explanation given must be reasonable.”
[9] It is my considered view that the reasons proffered for the delay in filing the answering affidavit are sound and reasonable in the circumstances of this case. Further, none of the parties suffered any prejudice as a result of the delay and the applicant had an opportunity to and replied to the answering affidavit. Furthermore, this application is of utmost importance to the MEC as head of a provincial sphere of government and that finalising it without hearing the MEC’s version would amount to a miscarriage of justice.
[10] Since it is not for this court to close the door on a litigant who proffers plausible reasons for the delay in filing its papers, it would not serve the interests of justice to not grant condonation in this case. In cases of this nature, it is necessary and in the interest of justice to allow all the issues to be ventilated by the parties. The ineluctable conclusion is therefore that the Court condones the late filing of the answering affidavit.
Factual Background
[11] The genesis of this case started in the period between 1987 and 1997 when Hlano and other mortgage lenders advanced home loans to the homeowners in the low-income market which were secured by mortgage bonds registered over their properties. The applicants were amongst the homeowners who took the home loans which by 1995 were regarded as non-performing due to the bond boycotts that were instigated at the time.
[12] To alleviate the problem of the bond boycotts, in October 1994, the National Department of Housing concluded an agreement to be known as the Record of Understanding (“ROU”) with the affected lending institutions, the Association of mortgage Lenders (“AML”) in terms whereof the defaulting borrowers were to be assisted with relocation to State-subsidised houses. Hlano was part of the AML. However, in 1998 an entity known as the Banking Association of South Africa was formed which replaced the Council of South African Banks (“COSAB”). This banking association excluded Hlano for it was not regarded as a commercial bank.
[13] In order to assist the Hlano borrowers since Hlano was excluded by the formation of COSAB, in 2017 the MEC concluded a Process Agreement which was to resolve the issues of Hlano borrowers in Gauteng. The purpose was to settle the claims of Hlano so as to provide free and unencumbered title deeds of the housing units to the Gauteng ROU beneficiaries. However, the government introduced other requirements which had to be fulfilled by Hlano and its borrowers before settling the Hlano claims.
[14] Discontent with these new requirements, Hlano instituted legal proceedings against the MEC in 2020 which culminated in an order in favour of Hlano. It is on record that the Hlano claims which were part of the legal action have now been settled. However, the Excluded Hlano Borrowers are still outstanding – hence these proceedings.
The Parties Submissions
[15] It was contended by the applicant that the applicants were being discriminated against by the MEC when the Process Agreement was concluded specifically to settle their claims with Hlano in order for them to receive their unencumbered title deeds from Hlano. Although the MEC has settled the claims of Hlano as per the list that was part of the litigation between Hlano and the MEC, there remained 1561 other Hlano borrowers which have been left out with no apparent reason but were just discriminated against.
[16] The MEC says that it was dealing with Hlano at all times as the Agent for the STREWOCO. At the time there were disagreements between the MEC and Hlano, so it was contended, Hlano instituted legal proceedings on behalf of its clients and or borrowers which litigation culminated in an order that the MEC was liable to settle the Hlano claims as they were listed in those proceedings. If there was any exclusion of any of Hlano claims, it was Hlano who excluded those claims from its list and not the MEC.
[17] Further, so it was contended by the MEC, Hlano has not been joined in these proceedings as a party with substantial interest herein. For the applicants to receive their unencumbered title deeds, the MEC has to settle their claims with Hlano. Due to the non-joinder of Hlano in these proceedings, there is no evidence before this court as why Hlano did not include these 1561 borrowers from its list when it instituted the legal proceedings against the MEC.
Legal Framework
[18] These proceedings are before this Court in terms of Regulation 6(4) of the regulations relating to the Equality Act which provides that, within seven days of receiving the documentation relating to the matter, the presiding officer must decide whether the matter is to be heard in this Court or whether it should be referred to an alternative forum.
[19] It is apposite to restate the provisions of the Equality Act at this stage which are relevant and would be of assistance in the determination of whether this Court has jurisdiction to hear this matter. The Equality Act provides as follows:
“5 Application of Act
This Act binds the State and all persons.
If any conflict relating to a matter dealt with in this Act arises between this Act and the provisions of any other law, other than the Constitution or an Act of Parliament expressly amending this Act, the provisions of this Act must prevail.
This Act does not apply to any person to whom and to the extent to which the Employment Equity Act, 1998 (Act 55 of 1998), applies.
6. Prevention and general prohibition of unfair discrimination
Neither the State nor any person may unfairly discriminate against any person.”
Discussion
[20] As indicated in the preceding paragraphs, the issue before this court is whether this matter deserves the attention of the Equality Court. In order to make this determination, it is useful to consider the factual circumstances of this case and the point in limine that has been raised for the failure by the applicant to join Hlano in these proceedings.
[21] It has now become settled law that the joinder of a party is only required as a matter of necessity, as opposed to a matter of convenience, if a party has a direct and substantial interest in the case. Put in another way, it is necessary to join a party to the proceedings if his or her interest will be prejudicially affected by the judgment of the court in the proceedings concerned.
[22] In Absa v Naude NO2 the Court stated the following:
“[10] The test whether there has been non-joinder is whether a party has a direct and substantial interest in the subject matter of the litigation which may prejudice the party that has not been joined. In Gordon v Department of Health, KwaZulu-Natal 2008 (6) SA 522 (SCA) it was held that if an order or judgment cannot be sustained without necessarily prejudicing the interest of third parties that had not been joined, then those third parties have a legal interest in the matter and must be joined. That is the position here. If the creditors are not joined their position would be prejudicially affected; a business rescue plan that they had voted for would be set aside; money that they had anticipated they would receive for the following ten years to extinguish debts owing to them, would not be paid; the money that they had received, for a period of thirty months, would have to be repaid; and according to the adopted business rescue plan the benefit that concurrent creditors would have received namely a proposed dividend of 100 per cent of the debts owing to them, might be slashed to a 5,5 per cent dividend if the company is liquidated.”
[23] It is apparent from the record that the applicant was a client of Hlano whose claim was part of the list that was settled by the MEC as a result of the litigation between Hlano and the MEC and has now received his unencumbered title deed. There is no dispute that Hlano represented its borrowers throughout the engagements and negotiations with the government since 1994. At no stage did the borrowers represent themselves or negotiated with the government directly without the representation of Hlano.
[24] I understand the applicants to be saying that they are not part of the Process Agreement and they are not bound by it. It boggles the mind that the applicants reject their involvement in the process agreement when the process agreement was specifically concluded to assist Hlano and its borrowers. The applicants make a mere and unsubstantiated allegation of discrimination against them by the MEC and fail to demonstrate as to when did they engage with the government outside of the body of Hlano borrowers and how they were discriminated against. A mere and unsubstantiated allegation of discrimination does not ground this application within the prescripts of the Equality Act.
[25] It is undisputed that Hlano has a substantial interest in this matter for it is Hlano who has a hold on the title deeds of its clients, the borrowers, due to their failure of meeting their bond repayment obligations to Hlano. It is on record that Hlano submitted a list in its litigation with the MEC and that Mr Chauke’s claim and that of those Hlano borrowers who were on that list have been settled and are now in possession of their unencumbered title deeds.
[26] There is no evidence before this court as to why Hlano did not enlist these alleged 1561 borrowers in its litigation which has resulted in the settlement of those Hlano claims by the MEC. Once again, it is alleged that there are 1561 Hlano borrowers that have been discriminated against but there is no list of the names and full particulars of these 1561 borrowers. Hlano has a substantial interest in this matter which interest may be adversely affected by the judgment of this court. There is no evidence before this court that the discrimination complained of, if any, by the applicants is perpetuated by the MEC for it is Hlano who has been mandated by the applicants to deal with the issue of their title deeds with the government.
[27] The applicant takes the view that the Process Agreement is not binding on the Excluded Hlano Borrowers for the Excluded Hlano Borrowers are a separate entity which has distinct and separate rights from the other Hlano Borrowers and the MEC. However, the applicant fails to demonstrate how the MEC discriminated against these borrowers. There is no evidence before this court to show that these borrowers engage and or negotiated with the MEC at any stage and that the MEC knows of their case. It is only Hlano, who is a necessary party in these proceedings, that can testify as to why these borrowers were excluded from the body of the Hlano borrowers.
Conclusion
[28] I hold the view therefore that, the applicants have failed to demonstrate that there is any discrimination perpetuated by the MEC or anyone or at all against them. The applicants have failed to join a necessary party in these proceedings and such failure is fatal to its case. The unavoidable conclusion is therefore that the application falls to be struck from the roll.
Costs
[29] I am not persuaded by the MEC’s submission that costs in this case should follow the result. The applicant instituted these proceedings, although hastily, and failed to cite the respondent parties correctly and to join the necessary party, it did not act with malice. It acted with good intentions to assist its fellow borrowers who were somehow left out and were suffering for not having security of tenure with unencumbered title deeds to their properties. The applicant instituted these proceedings to address the injustice of the past.
[30] It is my respectful view that the Biowatch principle is applicable in this case in that, although the applicant was unsuccessful in these proceedings against the MEC, which is the head of a provincial sphere of government, it should not be mulct with a costs order since the application was not frivolous or vexatious or in any other way manifestly inappropriate.
[31] In the result, the following order is made:
The application is struck from the roll with no order as to costs.
____________________
TWALA M L
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION
For the Applicant: Advocate Motebang Ramaili SC
Instructed by: MK Setaka Inc
Tel: 010 140 1668
keiths@mksetaka.co.za
For the Respondent: Advocate Ramin Ram SC
Instructed by: Cheadle Thompson & Haysom Inc. Attorneys
Tel: 011 403 2765
shamima@cth.co.za
Date of Hearing: 19 September 2024
Date of Judgment: 30 September 2024
Delivered: This judgment and order was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to Parties / their legal representatives by email and by uploading it to the electronic file of this matter on Case Lines. The date of the order is deemed to be the 30 September 2024.
1 2008 (2) SA 472 (CC).
2 (20264/2014) [2015] ZSCA 97 (1 June 2015).
Cited documents 2
Act 2
| 1. | Employment Equity Act, 1998 | 544 citations |
| 2. | Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 | 212 citations |