Durban man takes on FirstRand over home loan dispute – and gets court backing

A general view of FirstRand Bank on 14 August 2020 in Johannesburg. Picture: Gallo Images/Sharon Seretlo Homeowner Rajendra Pillai appeared alone in the Durban High Court to defend a claim by FirstRand, which alleged he owed R108 000 on a home loan and also asked the court for an order to sell the property at auction. Pillai successfully defeated the bank’s claim, arguing that he had already paid R114 000, but that the payment had not been properly credited to his account.

The court ruled in the homeowner’s favour and ordered the bank to debate the home loan account with Pillai to see what had happened to his R114 000 payment. The bank claimed it had lent Pillai R250 000 in July 2005 and extended the loan by another R112 000 five months later. It alleged that he had fallen into arrears and issued a summons against him.

Pillai disputed the bank’s version, arguing he had paid more than the bank demanded. The court found difficulties with both versions. The judge said FirstRand had not satisfactorily dealt with the R114 000 prepayment, but also observed that Pillai had failed to provide proof of the payment made in 2018.

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Despite the bank’s “huffing and puffing” over the lack of documentation to support the payment, it later admitted to receiving it into Pillai’s bond account. The bank indicated it would use this prepayment to make periodic drawdowns in settlement of the monthly bond payments. The bank provided account extracts to the court, but these did not show the drawdowns the bank said it made into Pillai’s bond account.

“I confess that I have some difficulty with the idea that drawdowns were made from the prepayment because the account extract reveals a balance owing of R81 345.49 as at 25 December 2017, and payment of R114 000 into the bond account would have settled the balance immediately. There would logically be no further instalments due after the prepayment and no need for any drawdowns,” the ruling stated.

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