Standard Bank blown in home repo case, referred to banking ombud

Written by Ciaran Ryan. Posted in Uncategorized

Official deposing for the bank was found to have made false allegations against the homeowners. From Moneyweb.

Judge Jacqueline Henriques said the bank failed to disclose key bits of evidence, such as what efforts were made to find alternative means of settling the debt without taking the drastic step of selling the home in execution. Image: Naashon Zalk/Bloomberg News
Judge Jacqueline Henriques said the bank failed to disclose key bits of evidence, such as what efforts were made to find alternative means of settling the debt without taking the drastic step of selling the home in execution. Image: Naashon Zalk/Bloomberg News

In a home repossession case before the KwaZulu-Natal High Court, Standard Bank was blown out of the water with a damning judgement handed down on Thursday (4 August), when it was found to have made false allegations against a couple who stood to lose their home after falling into arrears.

In unusually stern language for a case such as this, Judge Jacqueline Henriques said she was referring the matter to the Legal Practice Council and to the Ombudsman for Banking Services.

Read: Evidence of repossessed homes sold for a pittance can be used in R60bn class action suit – court

Judge Henriques said the bank failed to disclose key bits of evidence, such as what efforts were made to find alternative means of settling the debt without taking the drastic step of selling the home in execution.

Standard Bank claimed it made eight telephone calls and sent SMSs to the homeowners prior to launching legal proceedings, but provided no supporting documents to prove this.

A supplementary affidavit from the bank suggests the only efforts to resolve the matter occurred after summons was served before the court on 1 February 2022.

Failing to disclose payments

The bank also failed to disclose certain payments made by the homeowners to settle the arrears.

“Given the serious nature of these proceedings and the fact that defendants stand to lose their primary residence, one would expect a deponent to the affidavit to disclose all circumstances and to accurately disclose the circumstances in a founding affidavit,” reads the judgment.

“To say that this was a discrepancy pointed out by the court is factually incorrect and may well amount to an act of perjury. The deponent to the affidavit clearly deposed to an affidavit concerning allegations which were not true.”

The bank was found to have served summons on a post box owned by the homeowners, rather than in person, as is required by South African courts.

Where the bank is seeking default judgment as a prelude to repossessions of a person’s primary residence, summons must be served in person.

Lungelo Lethu Human Rights Foundation, which provides defence against unlawful evictions, says it has dozens of cases on file of neighbours and children being served summons by major banks, and in many cases where the arrears are proven to be fictitious.

The only time the homeowner finds out about the legal action is when a new owner, who generally acquires these properties at auction for a song, arrives to evict them.

In this case, Standard Bank was claiming arrears of R93 606, and on this basis was attempting to call up an outstanding loan of R382 000. It served summons on the couple with a view to executing on the property (selling it via a sheriff’s auction).

Read: Banks are still collecting on debts that have expired

Judge Henriques also berated the lawyers involved in the case on behalf of the bank for failing to make full disclosure of the facts before the court, as required in terms of rule 46A of the court rules and Section 26 of the Constitution which guarantees the right to adequate housing.

Also lambasted in the judgment was the bank’s home loans legal manager, Joy Ngcobo, who was found to have made incorrect statements to the court. The judge disagreed with her claim that these were discrepancies.

“The attorneys were either remiss or negligent in their obligations not only to the court but to the bank official to ensure that she deposed to an affidavit which was factually correct,” reads the judgment.

Read: The most and least-complained about banks in SA

“The conduct of the attorney and bank official is to be deprecated and the only suitable way apart from refusing the application is to ensure that the costs of the application not be recovered from the debtors or levied by the attorney of record,” it adds.

Standard Bank’s application for default judgment was dismissed, and the case referred to the Legal Practice Council in KwaZulu-Natal as well as the Ombudsman for Banking Services.

Responding to a Moneyweb request for comment, Standard Bank said in a brief statement that it has noted the judgment and is reviewing the matter.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.