Absa Bank has suffered a setback in its bid to recover R2.6m from a divorced couple after the high court in Bloemfontein found that it had failed to properly explain how the debt was calculated. The court ruling, delivered on Monday, refused the bank's application for summary judgment. Judge Nokuthula Daniso said she was not persuaded that Absa's claim had been properly verified. The bank had based its claim on two separate home loan agreements but relied on a single certificate of balance that referred to only one mortgage loan agreement.
The dispute stems from two mortgage loan agreements concluded between Absa and the couple on July 4, 2005, and March 8, 2007. The couple, who were married out of community of property, divorced on February 3, 2011. According to Absa, it advanced R660,000, together with an additional R132,000, under the first loan agreement. The amount was repayable in 53 monthly instalments. Under the second agreement, the bank advanced R1,066,667, repayable over 240 monthly instalments of R10,961.62.
Absa alleged that the former spouses had breached the agreements by failing to pay their monthly instalments. By January 2025, their arrears had allegedly reached R1,766,240. The bank said it had sent both respondents notices in terms of section 129 of the National Credit Act, warning them of the breach. The notices were served on January 29 and February 15, 2025. According to a certificate of balance attached to its application, the outstanding debt had increased to R2,628,453.85.
However, the former spouses challenged the bank's claim on different grounds. The first respondent did not dispute the loan agreements but argued that the bank could not enforce the debt because the second respondent had been under debt review since July 14, 2011. He said the debt review had not been terminated and that the required payments were being made. He also accused Absa of pursuing the same claim in another case.
The second respondent disputed liability under the first loan agreement, demanding that Absa produce the original agreements and supporting documents. Although she admitted signing the second loan agreement, she argued that she had signed it as the first respondent's spouse and not as the contracting party. She also relied on their divorce settlement, which was incorporated into the divorce order, arguing that her ex-husband had retained the property and that she had been indemnified against liability relating to it.
Judge Daniso pointed out that the account number reflected in the second loan agreement differed from the one appearing on the certificate of balance. The judge also noted that Absa's section 129 notices referred to monthly instalments of R110,840.45, which related to the first loan agreement. Despite relying on two separate agreements, the bank had made no attempt to set out the facts explaining how the total amount claimed had been calculated.
The application was refused, with costs to be costs in the cause. The bank had wanted the court to order the former spouses to pay R2,628,453.85, together with interest and legal costs on an attorney-and-client scale. The costs will be determined as part of the main case.
Key points
- The high court in Bloemfontein refused Absa Bank's application for summary judgment due to its failure to properly verify the debt.
- The bank's claim was based on two separate home loan agreements but relied on a single certificate of balance.
- The court costs will be determined as part of the main case.
