A joinder application seeking permission for 70 new applicants to join a class action suit against the nation’s largest banks and home loan providers has been filed with the Constitutional Court.
The application brings the number of people seeking to participate in the civil claim against the likes of Nedbank, Absa, FirstRand, Standard Bank, Changing Tides 12 – a trustee of the SA Home Loans Guarantee Trust – and Investec, to around 300.
Moneyweb previously reported that the home loan providers face a R60 billion claim related to their alleged conduct in attaching and selling the homes of defaulting debtors at prices below market value.
This, after an application was filed by Advocate Douglas Shaw in August, to establish whether South Africa’s current law of sale in execution – whereby properties are sold at a public auction held by a Sheriff of the Court so as to recover home loan repayments that are in arrears – is constitutional.
The initial application claimed the current process is unconstitutional in that it allows properties to be sold for less than their market value “which is against the rights to property and housing”, as defined by the Constitution.
The latest application restates the applicants’ wishes to be granted direct access to the Constitutional Court. It’s argued that the case, which affects “the country as a whole”, is being brought by people who are “exceptionally poor” and so should be heard by the highest court in the land straight off the bat rather than first having to go through the Magistrates Court, High Court and Supreme Court of Appeal.
In referring to matters that have transpired since the initial application, the joinder outlines further reasons for direct access to the Constitutional Court. Such reasons include willingness of the civil society organisations named in the initial application to contribute their own views, which suggest that “the matter is of importance to the body politic and to civil society”.
The joinder also refers to a resolution to support the Constitutional Court action on behalf of applicants seeking damages for the auctioning of their houses below market value, contained in an interim report of Parliament’s Standing Committee of Finance and the Portfolio Committee on Trade and Industry on the Transformation of the Financial Sector.
“For parliament to come out in favour of a case is singular and quite astounding. That the Legislature itself has, remarkably, voiced its view, is an indication that this matter should be heard by this court [the Constitutional Court], the highest court of the land.”
The Constitutional Court is still to decide whether it will hear the matter directly. It is expected that further joinders will be filed as more applicants seek to join the case.