Division: Constitutional Court
Case No: CCT 74/03
Date of hearing: 11 May 2004
Date of delivery: 8 October 2004
Coram: Chaskalson CJ, Langa DCJ, Madala, Mokgoro, Moseneke, Ngcobo, Skweyiya, Van der Westhuizen and Yacoob JJ.
Is an act which permits the sale in execution of peoples' homes in terms of sections 66(1)(a) and 67 of the Magistrates' Courts Act 32 of 1944 (the Act) because they have not paid their debts valid in terms of section 26 of the Constitution because it removes their security of tenure and violates the right to have access to adequate housing?
Briefly, the facts of the case are as follows. Both appellants come from a small, poverty-stricken community in Prince Albert in the Karoo. They are unemployed, have few assets, and were threatened with losing their homes as a result of not paying initial debts of R250.00 and R198.00.
Both appellants bought their homes with state subsidies and if they were to lose them as a result of a sale in execution they would be disqualified from benefiting from future state subsidies.
The appellants therefore approached the High Court for an order setting aside the sales in execution and for interdicts restraining certain of the respondents from taking transfer of the appellants' homes pursuant to the sales in execution. They argued that the effect of the impugned provisions would be to render them homeless, potentially permanently, and that the impugned sections constituted an unjustifiable limit on their right of access to adequate housing.
The High Court was of the view that:
"[w]hat does not admit of any doubt is that the right of access to housing does not encompass an entitlement to the ownership of housing; an entitlement to a particular form of housing; or an entitlement to the occupation of a specific residential unit."
It held that the loss of the right of the appellants to occupy their homes was not caused by the sale in the execution process or as a result of eviction in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the PIE Act). Although the court acknowledged that the execution process brings the ownership of the judgment debtor to an end, it held that this does not violate section 26 of the Constitution because that section does not contain a right to ownership.
The Constitutional Court, per Mokgoro J in a unanimous judgment, upheld the appeal against the decision of the High Court. The appellants amplified their initial argument, in that they challenged the impugned sections on the basis that they are in conflict with the right to dignity under section 10 and the right against unlawful deprivation of property under section 25(1) of the Constitution. The reasoning was reached after a discourse on the right to adequate housing in international law, security of tenure in our historical context and the intention of section 26 to prevent the injustices of forced removals from land and evictions from homes as happened during Apartheid. The court also noted the extent to which access to adequate housing is linked to dignity and self-worth.
Section 26 therefore:
" ... is aimed at creating a new dispensation in which every person has adequate housing and in which the state may not interfere with such access unless it would be justifiable to do so."
The Court also noted that in its various statements it has found that there is a negative content to socio-economic rights. If section 26 were to limit the rights, it must be justified under section 36 of the Constitution. This section enjoins the courts to consider the nature of the right and the nature and extent of the limitation. These are of great importance when weighed against the importance of the purpose of the limitation.
The Minister, while not conceding that the impugned provisions violate the rights of the appellants, advanced argument to the effect that the measures are reasonable and justifiable. She contended that debt recovery is an important government purpose with procedures put in place to allow for execution in order to recover money owed. This is reasonable and, without it, the administration of justice would be severely hampered. She argued that it is not possible for every execution order to be overseen by a magistrate and that the process provided by section 66(1)(a) facilitates collection of debt in the most viable manner.
The court rejected this and helds section 66 to be sufficiently broad to allow sales in execution to proceed in circumstances where it would not be justifiable for them to be permitted and as such are a violation of section 26(1) of the Constitution. The problem is that:
"... it would be inappropriate for this Court to attempt to delineate all the circumstances in which a sale in execution would not be justifiable. There are countless ways in which the facts of a case might differ and it would not be possible to anticipate all these permutations. An appropriate remedy should be sufficiently flexible, therefore, to accommodate varying circumstances in a way that takes cognisance of the plight of a debtor who stands to lose his or her security of tenure, but is also sensitive to the interests of creditors whose circumstances are such that recovery of the debt owed is the countervailing consideration, in a context where there is a need for poor communities to take financial responsibility for owning a home."
The court agreed with the " ... appellants' contention that an appropriate remedy would require that once insufficient movable property to satisfy the debt has been found a creditor should approach a court to request execution against the immovable property of the debtor. It would then be for the court to order execution and only if the circumstances of the case make it appropriate."
Factors which the court might consider but to which it is not limited are: "... the circumstances in which the debt was incurred; any attempts made by the debtor to pay off the debt; the financial situation of the parties; the amount of the debt; whether the debtor is employed or has a source of income to pay off the debt and any other factor relevant to the particular facts of the case before the court."
Having found section 66(1)(a) of the Magistrates' Courts Act 32 of 1944 to be unconstitutional, the court orders that the section is to be read as though the words "a court, after consideration of all relevant circumstances, may order execution" appear before the words "against the immovable property of the party".