Bank to sell couple’s R2m home after losing bid to stop sale

A Johannesburg couple has lost their court fight to stop a bank from recovering more than R2.1m owed on their home loan after the court ruled that they had failed to present a valid defence.

Acting judge Shadrack Tebeile granted summary judgment in favour of Standard Bank, ordering Vernon Llewelyn Parsley Kock and Rochelle Amanda Kock to pay R2,111,892, plus interest and insurance premiums.

The court also declared the couple’s Gauteng home specially executable, meaning it can be sold to recover the debt. However, the judge suspended the execution order for five months, giving the couple one last chance to save their home by paying the arrears, interest and default administration charges.

The dispute stems from a home loan agreement signed in September 2010. Standard Bank advanced the couple R1.845m, secured by a mortgage bond over their property.

According to the judgment, the couple fell behind on their monthly repayments. The bank sent them default letters and notices in terms of the National Credit Act (NCA) in July 2022, warning them about the arrears and informing them of their rights, including the option of debt review.

However, the arrears were not settled and the bank later issued a summons.

The couple opposed the bank’s application for summary judgment and raised several defences. They questioned whether the bank’s representative had authority to conclude the loan agreement, argued that they should have been given a better opportunity to enter debt review and claimed the bank had failed to work with them on a recovery plan.

They also disputed the insurance premiums added to the loan account, alleged that the bank had not properly complied with the NCA, and argued that some of the bank’s evidence was based on inadmissible electronic records.

Tebeile rejected each of these arguments.

On the challenge to the bank representative’s authority, the judge found that the couple had signed the loan agreement, accepted the loan money and allowed the mortgage bond to be registered over their property.

“They [the couple] cannot now, after benefiting from the agreement, raise a bare denial of authority without any particularisation of the basis for the denial,” Tebeile said.

The court also found that the couple had been informed of their right to seek debt review after receiving the section 129 notices in 2022 but had not taken that step.

Tebeile said simply wanting to be placed under debt review was not a legal defence to the bank’s claim.

The judge further accepted the bank’s evidence that it had made several attempts to help the couple regularise their arrears through payment arrangements, but those efforts had failed.

The court found that the couple’s denials that they had breached the loan agreement were unsupported by evidence. It also ruled that the bank had properly complied with the NCA by sending the required notices to the couple’s chosen address.

In dismissing the remaining defences, Tebeile concluded: “On the totality of the defences raised, I find that the respondents have failed to disclose a bona fide defence. The defences are either bare denials, legally unsustainable, or raised without any supporting factual material. The applicant [bank] has demonstrated a clear and unanswerable claim.”

Though the court ruled in favour of Standard Bank, it considered the constitutional protection afforded to homeowners before allowing the property to be sold.

The judge set a reserve price of R1.7m, higher than the amount proposed by the bank, saying the sale price should fairly protect both parties’ interests.

If the couple pays the arrears together with the accrued interest and default administration charges within five months, the credit agreement will be reinstated and Standard Bank may not proceed with the sale of the property. If they fail to do so, the bank will be entitled to execute the order and sell the home in execution.

The couple was also ordered to pay the bank’s legal costs on an attorney-and-client scale.

Sowetan