On 3 October 2018, the office of the Judge President of the Gauteng division of the High Court of South Africa released a Commercial Court Practice Directive which comes into effect immediately, creating a specialised Commercial Court administered as part of the High Court. The aim of the Commercial Court is to “promote efficient conduct of litigation in the High Court and resolve disputes quickly, cheaply, fairly and with legal acuity”.
As to what constitutes a matter worthy of being heard in the Commercial Court, the Directive defines a “Commercial Court case” as “a substantial case that has as its foundation a broadly commercial transaction or commercial relationship”.
Schedule 1 to the Directive sets out a list of the types of claims that the Commercial Court may hear and adjudicate. These claims include, among others:
- Import and export of goods;
- Insurance related claims;
- Banking and finance services;
- Commercial matters arising out of the business rescue and insolvency crisis; and
- Commercial matters effecting companies arising out of the Companies Act, No 71 of 2008 and its interpretation thereof.
It is important to note that Schedule 1 serves only as a guideline and is not an exhaustive list.
Both motion proceedings and action proceedings can be adjudicated in the Commercial Court. An application must be made by addressing a letter to the Judge President or Deputy Judge President setting out (i) an uncontroversial description of the case; and (ii) essentially, a motivation as to why the case should be treated as a commercial case heard by the Commercial Court.
On the face of it, it appears that the requirements for such an application in respect of motion and action proceedings differ. For action proceedings, the requirements are as follows:
- A broad and uncontroversial description of the case; and
- Why the case is a commercial case or should be considered as such, warranting treatment under the Commercial Court directives.
While the requirements for motion proceedings are as follows:
- A broad and uncontroversial description of the case;
- Motivation for the allocation of the case as a commercial case; and
- Motivation for the case warranting treatment under the Commercial Court directives.
On a closer analysis, it appears that the requirements are the same as essentially one must motivate to the Judge President or Deputy Judge President as to why the Commercial Court should hear the matter.
As to the stage at which such application can be made, in respect of action proceedings, Chapter 2 of the Directive states that “at any time after a summons has been issued out of the High Court, any party to the suit may apply to have the case allocated as a Commercial Court case”. In respect of motion proceedings, a party may seek to have the matter allocated as a Commercial Court case in three instances:
- Where a party has already instituted an application to the High Court;
- A party intends to institute an application to the High Court; or
- All the papers comprising the application have been filed and any party may apply for an expedited hearing of a matter as a commercial case for reasons of commercial urgency or on other grounds.
Another new feature is that all motion proceedings allocated to the Commercial Court must now undergo case management. The Judge President or Deputy Judge president will allocate a judge or two judges to case manage the matter. This essentially means that a case management conference must be held to determine, among other things, the time periods for filing of affidavits, heads of argument, and the date and length of the hearing. This was not previously required.
In respect of commercial urgency, the Directive now nullifies the general principal that “commercial urgency does not constitute urgency”. As eluded to above, any party may apply for an expedited hearing of the matter as a commercial case for reasons of commercial urgency or on other grounds. The Directive goes on to state that to institute an application on an urgent basis, depending on the degree of urgency, the applicant must make a written or telephonic request to have the matter allocated as an urgent commercial matter. In making such request, the applicant must set out the following:
- A broad and uncontroversial description of the case;
- A motivation for the designation of the case as a commercial case;
- The motivation for the case warranting treatment under the Commercial Court directives; and
- The reason why the applicant contends that the matter is urgent.
It is not exactly clear as to whom such requests must be made, but it is assumed, based on the reading of the entire Directive, that such requests must be made to the Judge President’s office or the Deputy Judge President’s office.
This is not the first specialised court in South Africa. It joins the likes of the Labour Court, Electoral Court, Tax Court, Land Claims Court, Competition Appeal Court, Equality Courts as well as several specialist criminal courts. Specialist courts are also not unique to South Africa as this is a growing trend across countless jurisdictions worldwide.
Some academics are of the view that specialised courts are more efficient, lead to higher-quality decision-making and will enhance uniformity in decision-making. Other academics believe that judges will develop too narrow a view of the matters before them due to the singular focus of specialised court.
This, in turn, could lead to lower quality decisions in the long run and less flexibility in the development of the law if judgments are always delivered by the same limited number of persons.
The Directive allows the Commercial Court to adjudicate on a very broad category of cases. Practically speaking, this could lead to a strained court roll. The Directive does, however, give judges a discretion as to which matters should be allocated to the Commercial Court and this could be the court roll’s saving grace.
Only time will tell whether the Commercial Court is a blessing or a curse.