Bank was also claiming more than R160 000 in legal costs from Vavi and his wife – twice the value of their current repayment arrears.
Standard Bank has failed in its attempt to obtain authorisation for the foreclosure of a mortgage bond it granted over the Sandton primary residence of South African Federation of Trade Unions (Saftu) General Secretary Zwelinzima Vavi and his wife Noluthando.
The judgment highlighted the high legal costs that result from mortgage bond arrears and foreclosure, with the bank claiming more than R160 000 in legal costs from the couple – twice the value of their current mortgage bond repayment arrears.
Judge Stuart Wilson said Standard Bank had placed nothing before him explaining why execution against the Vavis’ home is a proportionate means of recovering the arrears.
He postponed the application brought by the bank indefinitely on Tuesday and ordered that each party should pay its own costs.
Wilson said a court asked to authorise foreclosure against a debtor’s primary residence must be satisfied that to do so would be proportionate.
He added that foreclosure is generally proportionate when there is little meaningful prospect of the debt secured against the residence being recovered in some other way – and when the interest of the creditor in obtaining payment outweighs the interest of the debtor in retaining ownership of the home.
Standard Bank was seeking a money judgment and leave to execute it against the primary residence of the couple, whose indebtedness arose from a mortgage bond passed over the property.
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Steps taken to reduce arrears – judge
Wilson said the fact that the property is, on the face of it, an expensive dwelling in a well-heeled suburb makes no difference to the fundamental inquiry – but cases in which it would be disproportionate to authorise execution of a proven mortgage debt against such a property are likely to be rare.
However, he said: “This is such a case. The Vavis owe around R1.68 million on their bond, and are in arrears to the tune of just over R85 000 – or around four months’ worth of instalments.
“The arrears were accumulated around three years ago, and since then the Vavis appear to have serviced their bond punctiliously while taking steps to reduce their arrears from just under R170 000 when the application was instituted to around R85 000 today.
“The latest home loan statement filed shows around 18 months of apparently perfect adherence to the Vavis’ obligations to pay their monthly instalments.”
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Legal costs and arrears ‘separate issues’
Wilson added that Standard Bank claims over R160 000 in legal costs against the Vavis – and it is apparent from the affidavits that the bank has tied the resolution of this dispute to the settlement of those costs.
“It is at least possible that the Vavis have balked at paying legal costs of twice the value of their current arrears.
“It seems to me that the Vavis would be entitled to rehabilitate the loan agreement by paying their arrears and then debating the reasonableness of those costs with Standard Bank as a separate issue, but I cannot say why the arrears have not been settled.
“Nevertheless, in the absence of more information, I cannot presently conclude that foreclosure against the Vavis’ home is a proportionate means of liquidating their arrears.”
Although the judge postponed the application sine die (indefinitely), Wilson said the bank may renew the application if and when it presents evidence that foreclosure would be proportionate.
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Financial woes
The Vavis have been in the news for other alleged arrears related to their Sandton home.
City Press reported in February 2024 that Vavi and his wife had been taken to court by the City of Johannesburg (CoJ) Metropolitan Municipality for allegedly failing to pay more than R400 000 in outstanding levies for their home.
It said the CoJ was seeking an order from the High Court in Johannesburg that would compel the couple to pay an amount stipulated as R433 493 after they had applied to the municipality for provision.
The article said it had previously reported on their financial woes, which it claimed began in 2022 when Standard Bank applied for a writ of execution on the same house after accusing them of non-payment.
It subsequently reported that Noluthando Vavi said they only became aware of the court papers when inquiries were made by City Press about their home, which they bought for R2 million in 2008.
It is unclear what happened to the CoJ’s arrears high court application.
This article was republished from Moneyweb. Read the original here.
