FirstRand taken to the dry cleaners in high court
· Citizen
FirstRand Bank’s attempt to repossess the home of customer Jan Dry at the Mahikeng High Court came unstuck last month after he challenged the bank’s accounting, the impartiality of its commissioner of oaths, and whether the bank had the legal standing to appear in court against him.
The bank was asking the court for summary judgment – where there is supposedly no dispute of fact.
Visit bettingx.bond for more information.
Judge Andrew Reddy wasn’t having it, pointing to several discrepancies in the bank’s case that required the matter to proceed to trial.
“Dry has disclosed facts which, if proven, would defeat or materially affect FirstRand’s claim. In sum, FirstRand’s case cannot be described as unanswerable. In these circumstances, the interests of justice require that the matter proceed to trial,” the judgment states.
Commissioner of oaths’ impartiality
The first issue raised by Dry concerned the impartiality of the commissioner of oaths who signed off on the bank’s founding affidavit.
The commissioner, Rita Nel, is a practising attorney at Glover Kannieappan Inc, one of the firms the bank uses for recovery litigation.
“A panel attorney has an indirect financial interest in the bank’s litigation, which strongly emphasises the appearance-of-impartiality requirement under the regulations. Whether this constitutes a disqualifying interest is, at the very least, a matter that raises reasonable doubt.
“In the context of summary judgment proceedings, such doubt cannot be resolved in favour of FirstRand,” ruled Judge Reddy.
Bank’s legal standing
Dry next attacked the bank’s legal standing, arguing the loan originated with Saambou Bank, later acquired by Board of Executors (BoE) and subsequently FirstRand.
A mortgage bond creates a real right that is enforceable only by the registered holder or through a properly registered cession at the Deeds Office. No proof of such registered cession was provided, argued Dry.
FirstRand also failed to comply with the Uniform Rules of Court by not annexing the full written agreements or transfer documents showing the complete chain from Saambou to BoE and then to FirstRand.
The bank’s deponent claimed personal knowledge of records that had passed through multiple corporate entities, but in the absence of documentary proof, this raised concerns of hearsay.
This, compounded with the other concerns in the bank’s legal argument, required the matter to go to trial.
Another issue highlighted by Dry was the capitalisation of legal costs on his mortgage account.
Courts can only grant summary judgment when the claim is ‘liquid’, meaning it is capable of prompt and exact computation. The inclusion of untaxed (unauthorised) legal fees in the claim undermines this requirement.
Discrepancies in arrears calculations
In November 2021, the bank issued a Section 129 notice in terms of the National Credit Act (NCA), reflecting arrears of R38 839. By the time it submitted a certificate of balance to the court in February 2026, this figure had jumped to R224 443.
Dry argued that this could not be correct, given the bank’s assertion that interest had been calculated and compounded monthly in accordance with the NCA.
“The mathematical accuracy of these calculations, especially given the fluctuating interest rates cited in the papers, cannot be determined without the benefit of cross-examination,” ruled Judge Reddy.
“The emphasis on the effect of the untaxed legal costs stands out for me,” commented consumer legal advocate Leonard Benjamin.
“If the bank has taken legal action against the consumer in the past, one can be sure that it has added untaxed legal costs to the debt, which has a knock-on effect on all aspects of the debt, including the size of the arrears. Banks can’t help themselves.”
Benjamin notes that in one case in which he was involved, the bank added almost R200 000 in untaxed legal costs to a customer’s account, when the amount being claimed was only R400 000.
“Interestingly, banks are guilty of reckless lending when they do so. Because of the widespread use of certificates of balance, it illustrates the need for people who are being sued to obtain a comprehensive statement of account using the court rules.
“Even better would be to ask for the statement of account as soon as the Section 129 notice is delivered.”
Section 129 notice
In the Dry case, the judge emphasised that a Section 129 notice must accurately reflect arrears, giving the consumer an opportunity to remedy the default.
“If the inclusion of untaxed legal costs inflates the arrears figure, the notice is not accurate, and the right to remedy the default is rendered nugatory.
“As I see it, the notice does not meet that requirement and provides a bona fide defence to enforcement,” the ruling concludes.
This article was republished from Moneyweb. Read the original here.