A Johannesburg high court judge has rebuked Standard Bank for hardline tactics employed against a couple who fell into arrears on their home loan and for wasting the court’s time.
In addition, judge Stuart Wilson ordered the bank to pay all the costs of the litigation as requested by the couple's lawyer, describing this as “the least that should happen”.
The case involves Martin and Leeann Koorbanally, who took out a home loan with Standard Bank for their home in Meyersdal. They fell into arrears on their repayments, but managed to catch up a few months before the matter was set down to be heard in court on Monday.
Wilson commented that the National Credit Act enables consumers “to reinstate a credit agreement on which they have fallen into arrears” by paying the overdue amount along with the default administration charges as well as reasonable costs incurred by the credit provider in enforcing the agreement up to the time the default was remedied.
The Koorbanallys had fallen into arrears, prompting Standard Bank to issue them with a summons claiming payment in full for the full outstanding amount on the home loan in February 2020. The bank also issued an order declaring the Koorbanallys’ home specially executable.
The Koorbanallys defended the action, asking for time to bring their loan account up to date. The case went through a trial process and eventually an application to have the Koorbanally home sold off by Standard Bank to settle the debt was set down to be heard in the Johannesburg High Court this week.
However, a few months before the court date the Koorbanallys managed to pay their arrears in full. However, they were unable to pay the additional costs.
“This is because it was up to Standard Bank to quantify the reasonable costs of enforcing the loan agreement up to the time the default was remedied, and to demand them from the Koorbanallys,” Wilson said.
“For reasons I cannot fathom, Standard Bank refused to do this. It insisted that the matter should be brought to a hearing, purely for the purposes of obtaining a costs order on the scale as between attorney and client against the Koorbanallys.”
Wilson noted that the bank’s lawyer “Ms Swandile” had submitted that Standard Bank’s taxed bill would constitute its reasonable enforcement costs.
“This is the wrong approach. Standard Bank is only entitled to the ‘reasonable costs of enforcing the agreement up to the time the default was remedied’. Those costs obviously do not include the attorney and client costs associated with a hearing before me, which was held well after the Koorbanallys remedied their default by paying their arrears,” Wilson held.
“When the matter was argued, Ms Swandle was still unable to tell me what Standard Bank believed its reasonable costs of enforcement were. Nor had any effort been made to communicate that amount (whatever it is) to the Koorbanallys. For their part, on October 2 2024, almost two months before the matter was called, the Koorbanallys offered to pay just under R57,000 towards Standard Bank’s enforcement costs in three equal monthly instalments. That offer was ignored for weeks on end before finally being rejected on November 20 2024,” said Wilson.
“Having rejected the Koorbanallys’ offer, Standard Bank still refused to quantify its enforcement costs, or to make a counter-offer to the Koorbanallys in settlement of them.”
Criticising Standard Bank for its handling of the matter, Wilson said: “What a credit provider may not do is avoid engaging with a consumer by keeping the litigation hobbling along in the hope of obtaining a costs order. Yet that was the course Standard Bank chose.
“That conduct was high-handed, inconsistent with the applicable law and a waste of the court’s time.”
The Koorbanallys’ lawyer asked that Standard Bank be ordered to pay the wasted costs of an unnecessary court hearing for an outstanding home loan that had long been settled.
This prompted Wilson to remove Standard Bank's application from the roll and ordered it to pay all the costs of the hearing.
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