Court rejects Standard Bank's bid to foreclose on Zwelinzima Vavi's home over loan arrears
The Johannesburg High Court has ruled against Standard Bank in its legal bid to foreclose on the upmarket Sandton home of South African Federation of Trade Unions general secretary Zwelinzima Vavi.
The bank sought a money judgment and permission from the court to execute against Vavi's primary residence, because he and his wife had fallen behind on their home loan repayments.
However, what is curious about Standard Bank's legal bid is that the arrears date back three years, and Vavi and his wife had not only kept up with their bond repayments but had also worked to reduce the arrears from R170,000 to R85,000.
In handing down his judgment on Tuesday, Judge Stuart DJ Wilson rebuked the bank for seeking an execution order when the Vavis' repayment over the last 18 months showed 'an apparently perfect adherence to the Vavis' obligations to pay their monthly instalments'.
'Standard Bank has placed nothing before me that explains why execution against the Vavis' home is a proportionate means of recovering the arrears,' Judge Wilson said.
The court, referencing the Constitutional Court's stance in Gundwana v Steko Development CC, emphasised that the value or location of a property does not diminish the need for proportionality when a bank seeks to take away someone's home. 'Cases in which it would be disproportionate to authorise execution of a proven mortgage debt against such a property are likely to be rare. This is such a case,' the judgment noted.
What raised eyebrows was Standard Bank's demand for more than R160,000 in legal costs – almost double the outstanding arrears. The court found that the bank had effectively tied the settlement of the dispute to the payment of these costs, suggesting that the Vavis may have hesitated to pay legal fees that far exceeded their actual arrears.
The broader problem
Standard Bank's case against Vavi is not unique. Across South Africa, banks have been criticised for using aggressive tactics to address home loan arrears.
These include:
Initiating legal action for repossession even when homeowners are actively reducing their arrears;
Imposing excessive legal costs that quickly outpace the actual debt; and
Failing to engage meaningfully with customers before resorting to court action.
In 2024, Judge Wilson came down on Standard Bank for using 'high-handed' tactics by taking a Meyersdal couple to court over home loan arrears on which they had managed to catch up a few months before the matter was set down to be heard.
Earlier this year, the bank attempted to take the home of a Roodepoort homeowner who was attempting to catch up on arrears, but the case was dismissed with costs.
If the court had granted Standard Bank's order against Vavi, it would have given the bank the power to foreclose on the house and potentially sell it at a fraction of its value to recoup the R85,000 that it is owed. This has happened to countless South Africans over the years.
However, a R60-billion class-action suit against South Africa's leading banks – Standard Bank, Absa, FirstRand and Nedbank – is seeking to address this issue.
Led by Advocate Douglas J Shaw, the lawsuit highlights systemic issues with how banks handle mortgage arrears. Despite a 2017/18 legal victory that forced banks to set reserve prices at sheriff auctions – preventing sales at rock-bottom prices – Shaw reports that many homes continue to be sold for only 50% to 70% of their true value, and in some cases as low as 10%.
Former owners often remain liable for the outstanding bond balance while being left homeless and destitute for years.
Shaw further alleges that banks frequently proceed with sales even when foreclosure is not a last resort, such as when homeowners have regained employment, can rent out their properties or could subdivide them to meet obligations.
'We often see banks act in a manner we consider irresponsible. You cannot trust them to do what most people would see as 'the right thing',' Shaw said.
This ongoing class action underscores the concerns raised by the Vavi case – namely, that banks sometimes resort to heavy-handed enforcement tactics without adequately considering proportionality or alternative solutions. It also highlights the broader call for stricter regulation and more ethical conduct in mortgage enforcement practices across South Africa.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
9 hours ago
- IOL News
Standard Bank accused of 'frustrating the administration of justice' in Rand manipulation case
The Constitutional Court in Johannesburg listened to a third day of legal arguments relating to allegations of Rand-fixing, following an appeal by the Competition Commission. Image: Timothy Bernard / Independent Newspapers While Standard Bank accused the Competition Commission of 'sticking to its bloody-minded ignorance' by continuing to accuse the bank of allegedly being part of a cartel which manipulated the Rand/US dollar exchange, the commission had hit back to say the bank is pulling out all the stops in a bid not to face the music. Advocate Kate Hofmeyr, acting for Standard Bank, told the Constitutional Court this week that in 2017, when the commission told the media about its allegations that the banks were allegedly involved in an international cartel colluding to manipulate the Rand/US dollar, Standard Bank's share price dropped in a few days by 3.8%, which equated to R8.5bn. She argued that while the commission was investigating the case for a year and a half, it did not meet with Standard Bank at all to obtain information from it regarding the matter. Hofmeyr said because there was no proper investigation by the commission, it got its facts wrong. In turn, Standard Bank suffered reputational damages while these allegations are hanging over its head. She told the apex court that Standard Bank should not face the music and be subjected to a trial on the merits of the alleged Rand rigging issue, as it is not involved in the matter. The commission turned to the Constitutional Court to appeal the judgment of the Competition Appeal Court (CAC) issued last year, in which it found that the majority of the banks do not have to face a trial on the merits of the allegations. Local banks which form part of the appeal as respondents, together with various international banks, are Standard Bank, FirstRand Bank and Nedbank. In his rebuttal on Thursday following Standard Bank's submissions, Advocate Thembeka Ngcukaitobi, acting for the commission, argued that of all the respondent banks, Standard Bank is the most aggressive litigant. He said this matter has been running for the past 10 years because of procedural objections from the respondents, of which Standard Bank is the forerunner. 'We are subjected to protracted legal challenges by this bank, which pleads innocence.' Ngcukaitobi said while banks, such as Standard Bank had the financial resources to resort to these legal challenges, the commission did not have the same money to face these powerful entities. He accused the bank of frustrating the administration of justice in this matter. Ngcukaitobi said Standard Bank claimed that it did its own investigation into the allegations that there was a single overreaching conspiracy to manipulate the Rand/US dollar exchange. 'But they never told us what they found'. He argued that it would be irresponsible of the commission to simply not include Standard Bank in its referral to the tribunal simply because the bank said it is not part of the collusion. Three of the banks which lost their cases before the CAC – BNP, CSS and HBEU – meanwhile also appealed that ruling before the apex court. BNP submits that the CAC erred in dismissing its exception and argued that the commission's referral is contradictory, vague and embarrassing. It said that requiring it to answer to the allegations, violates its right to a fair hearing. CSS in turn argued that the commission never initiated a complaint against it, rendering its joinder unlawful and beyond the tribunal's jurisdiction. It also argued that the commission did not have jurisdiction over it as it does not have South African ties. The respondent banks that succeeded in the CAC meanwhile support that court's findings. They submitted that the commission has not pleaded sufficient facts to sustain a case against them, that the referral affidavit improperly conflates legal entities, and that the evidence relied upon is speculative and inconsistent with the required elements of a single overreaching conspiracy. [email protected]
Daily Maverick
12 hours ago
- Daily Maverick
How to invest extra money to maximise your retirement funds
When it comes to retirement, good planning can make a significant difference to your retirement savings as well as to the income you can get from your various savings pots. Question: My spouse has no pension or retirement fund. He has just sold a property and now has a few million rand in the bank. Can we put that into my pension or retirement annuity to boost our retirement income? I'm retiring in three years. Answer: Your spouse cannot invest directly in your retirement fund. Only the registered member can contribute. However, the money doesn't have to come from your own earnings. In South Africa, interspousal donations are exempt from donations tax. So, your spouse can give you the property proceeds and you can contribute in your name – completely legally and without tax leakage. But although this can be done, we need to see if it should be done. To answer this question, we need to understand the difference between compulsory and voluntary investments. Compulsory investments Compulsory investments are those that are made into your retirement funds, like your company's or your retirement annuity. You get the following tax breaks: Tax deduction: contributions up to 27.5% of your taxable income (maximum of R350,000 a year); and Tax-free growth in the investment. The trade-off for this is that you are compelled to use two-thirds of the proceeds of this investment to buy an annuity at some stage after the age of 55. This annuity will be taxed as income, so the normal income tax tables will apply to it. Voluntary investments Voluntary investments are investments that you make using money that you've already paid income tax on, typically unit trusts, exchange-traded funds, endowment policies and proceeds from a property sale. What is notable here is that you do not get any tax break on your investment. However, when you make a withdrawal from it, the bulk of it is classed as a capital drawdown and only a portion is classed as a capital gain. The gain is taxed at a rate of only 40% of your normal tax rate. The smartest retirement plans blend both compulsory and voluntary investments. Compulsory funds provide valuable tax deductions while you are earning, and they protect growth from tax until retirement. Voluntary funds give you liquidity, lower tax on withdrawals and the ability to top up income without triggering large tax bills. The real benefit comes in retirement planning, where you can design your income drawdown so that a portion comes from low-tax capital withdrawals, and a portion from annuity income, keeping your effective tax rate lower. Now, in your situation, you have money in a compulsory investment, being your company's retirement fund, and your spouse has money in the voluntary investment, being the bank. Managed correctly, your after-tax retirement income can be maximised. I would recommend the following: Move the proceeds of the property sale into an investment portfolio. The money in the bank will be triggering interest, which is fully taxable after the initial interest exemption. This is not the case in an investment portfolio. Also, the growth in the portfolio should be better than the growth you are getting at the bank. You would need to determine what percentage of your salary you're currently investing in retirement funds. If it is less than 27.5%, then I would recommend that your spouse donate the balance to you and that you take advantage of this allowance. The value is that you are currently being taxed at a higher rate than your spouse and any tax break you get will improve your retirement savings significantly. For example, if your current tax rate is 40%, a retirement contribution of, say, R100,000 would only cost you R60,000 as you would be getting R40,000 back as a tax rebate. There is no way your spouse would be getting that kind of return on the R100,000 investment. When it comes to retirement, good planning can make a significant difference to your retirement savings as well as to the income you can get from your various savings pots. The two of you are in a wonderful position as you have both compulsory and voluntary money, so we can find the optimum structure for you. I would recommend that you consult with a financial planner who can help you to check your current taxable income and contributions; maximise the annual deductible contribution until you retire; invest the rest in a flexible portfolio; and design a drawdown strategy that blends low-tax capital withdrawals with annuity income. DM Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at Send your questions to [email protected] This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
TimesLIVE
13 hours ago
- TimesLIVE
Updated Nissan Magnite offers more safety at a lower price
Nissan South Africa has announced price cuts of between 4% and 10% across its Magnite range, along with a R10,000 cash rebate on selected model grades. The Japanese carmaker said the move supports its efforts to offer value-packed compact SUVs at more competitive prices in line with changing consumer demands. The latest turbocharged Magnite variants are fitted with the firm's force-fed 1.0l three-cylinder engine making 74kW and 160Nm of torque. Buyers can pair it to a five-speed manual or Continuously Variable Transmission (CVT) transmission. Nissan claims the former offers a combined fuel consumption of 5.27l/100km, and the latter 6l/100km. The new Magnite is also among the safest compact SUVs on the market, thanks to a host of upgrades. With six airbags, advanced electronic stability control and other safety features, it achieved a five-star safety rating under Global NCAP's latest test protocols. Nissan has also bundled in three-point seat belts with pretensioners and load limiters, ISOFIX child seat anchors, ABS brakes with EBD, hydraulic brake assist, vehicle dynamic control, traction control, hill start assist and a tyre pressure monitoring system. Adjusted Nissan Magnite pricing:
