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Nedbank ordered to return R2m it illegally charged property developer

Nedbank is still reeling from a bloody nose it suffered recently when it lost a case after the Supreme Court of Appeal ruled in favour of the North Gauteng High Court’s judgment. Picture: Simphiwe Mbokazi/African News Agency (ANA)

Nedbank is still reeling from a bloody nose it suffered recently when it lost a case after the Supreme Court of Appeal ruled in favour of the North Gauteng High Court’s judgment. Picture: Simphiwe Mbokazi/African News Agency (ANA)

Published Jun 7, 2022

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Nedbank, which is facing a barrage of complaints against its customer service, is under a dark cloud of embarrassing judgments against it and in favour of its resilient clients who, instead of suffering in silence, have successfully turned to the courts for relief.

As a result of brave clients, the bank was left with more egg on the face when on May 4 the South Gauteng High Court ordered it to return more than R2 million that it illegally charged a property developer, Dissilio Investments.

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Judge Margaret Victor’s judgment came soon after Supreme Court of Appeal deputy president Judge Xola Petse slapped the bank with an embarrassing judgment in a separate matter.

Both judges have opened the public’s eyes to the fact that the banks are not entirely immune from repercussions when they mistreat clients although there are instances where they act without facing consequences.

Following a series of stories about the banks’ behaviour, Independent Media has received a number of complaints from alleged victims, including those who have not approached the court.

Judge Victor’s judgment followed a protracted court battle that started in 2019. Although Dissilio and its lawyers from the Beder-Friedland had not received a copy of Victor’s judgment, the bank has on May 25 through its legal team from Victor and Partners filed an application for leave to appeal the judgment against it either at the same South Gauteng High Court or at the Supreme Court of Appeal.

Nedbank’s spokesperson Annaleigh Vallie confirmed the bank has on May 25 filed the application for leave to appeal on the basis that Judge Victor had erred in his judgment.

Back in 2013, Dissilio took two separate loans to the tune of R118.8 million from Nedbank to build Heidelberg Shopping Mall in Heidelberg, Gauteng.

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The agreement was that the loan would be payable over a period of five years. However, after completing the construction and when they had already paid more than R16 million, Dissilio co-owners Jaron Jacob Tobias and Jacobus Marthinus Johannes Coetzer sold the building in November 2017 for an undisclosed profitable amount. They then immediately settled the outstanding balance of R102.6 million.

But to their shock, Nedbank declined the settlement until they paid what is called a breakage cost of more than R1 million and another R1 million for the early repayment fee.

Breakage cost, according to upcounsel.com, is “either a prepayment penalty on a fixed-rate loan or a fee that a lender charges to keep the borrower from refinancing a loan shortly after closing. These charges allow the lender to recoup the cost of the interest rate associated with fixed-rate funding.”

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Tobias and Coetze pleaded and begged the bank to terminate the loan without imposing penalties “and arrogance was something beyond anything”. The partners then took the matter to court and after a lengthy trial, Judge Victor made the judgment.

Tobias described Judge Victor’s judgment as a landmark since the major banks have “an attitude of doing whatever they like to their customers and taking whatever they like from the customers”.

“She told them that it (Nedbank) is despicable,” said Tobias.

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According to the Nedbank’s application for leave to appeal, Judge Victor ordered Nedbank to return to the company both amounts with interest from the date of the issue of the summons at the prescribed rate, to date of payment. The bank was also ordered to pay the costs of the action and pay the reserved costs of the previous trial date.

In the leave to appeal application, Nedbank maintained that Dissilio was continually liable to make payment of the breakage costs.

“The Learned Judge (Victor) further erred in finding that defendant (Nedbank) was not entitled to levy the early repayment fee, when the liability for the early repayment fee was in fact expressly provided for and it is common cause that the plaintiff (Dissilio) made an early repayment of its indebtedness under the loan as inter alia confirmed and recorded in the parties’ joint practice note,” read Nedbank’s application.

Although he has already seen the copy of Nedbank’s application, Tobias said Dissilio had not seen the copy of Judge Victor’s judgment.

Nedbank is still reeling from a bloody nose it suffered recently when it lost a case after the Supreme Court of Appeal ruled in favour of the North Gauteng High Court’s judgment.

The high court had found that Nedbank was wrong in refusing retired Judge Kees van Dijkhorst to terminate the bank accounts of his two companies Houtbosplaas and TBS Alpha Beleggings and move their funds to Absa.

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