A home repossession case in the KwaZulu-Natal High Court ruled against Standard Bank on Thursday (August 4) after it was found to have made false allegations against a couple who were expecting to lose their home after falling into debt.
Speaking unusually sternly for such a case, Judge Jacqueline Henriques said she was referring the case to the Legal Practice Council and the Banking Ombudsman.
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Judge Henriques said the bank failed to disclose key evidence, such as what efforts had been made to find alternative ways to repay the debt without taking the decisive step of selling the house in execution.
Standard Bank claimed to have made eight phone calls and text messages to the homeowners before the trial began, but did not provide supporting documents to prove this.
A supplemental affidavit from the bank indicates that the only attempts to resolve the issue were made after the subpoena was served on February 1, 2022.
The bank also failed to disclose some of the payments made by homeowners to pay off debt.
“Given the serious nature of this proceeding and the fact that the defendants may lose their primary residence, it would be expected that the deponent of the affidavit would disclose all the circumstances and accurately disclose the circumstances in the affidavit,” the decision said.
“To say that this was a discrepancy pointed out by the court is factually incorrect and may well amount to perjury. The affidavit expressly disclaimed the affidavits regarding the untrue statements.’
The bank was found to have served summonses to a post office box belonging to the home owners, rather than in person as required by South African courts.
If the bank is seeking a default judgment as a prelude to regaining the person’s principal residence, the summons must be served personally.
The Lungela Letu Human Rights Foundation, which provides protection against illegal evictions, says it has dozens of cases where neighbors and children are served with bank summonses, and in many cases the debt turns out to be bogus. The only time a homeowner knows about a lawsuit is when the new owner, who usually buys the property at auction for next to nothing, comes to evict them.
In this case, Standard Bank claimed a debt of 93,606 rand and on that basis sought to recover an outstanding loan of 382,000 rand. He served the couple with a summons to foreclose on the property (selling it by sheriff’s auction). ).
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Justice Henriques also reprimanded the lawyers appearing on behalf of the bank for failing to fully disclose the facts before the court as required by Rule 46A of the Rules of Court and Section 26 of the Constitution, which guarantees the right to adequate housing.
The judgment also condemned the bank’s legal affairs manager, Joy Ngcoba, who was found to have made false statements in court. The judge disagreed with her claim that these were inconsistencies.
“Counsel failed in their duty not only to the court, but also to the bank official to ensure that she provided an affidavit that was factually correct,” the ruling said.
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“The conduct of the solicitor and the bank official must be condemned and the only appropriate course of action, other than refusal of the application, is to ensure that the costs of the application are not recovered from the debtors and are not recovered from the solicitors,” it added.
Standard Bank’s application for a writ of habeas corpus was dismissed and the case was referred to the KwaZulu-Natal Legal Practice Council as well as the Banking Ombudsman.
The banking giant has yet to comment on the decision or say whether it will be appealed.