Banks can expect a noisy reception over R60bn home foreclosure class action

The lawsuit claims R60bn in lost equity from over 100 000 homes sold below market value since 1994. It may prove to be the largest civil action in South African history. Picture: iStock The long-awaited R60 billion class action lawsuit against banks for repossessing and selling properties for a fraction of their worth, will be heard in Johannesburg High Court from 24 February and could last four days.

The case was initiated more than eight years ago by the Lungelo Lethu Human Rights Foundation – which was set up to protect homeowners facing eviction – and Advocate Douglas Shaw. Foundation president Nkululeko Xhelithole says the law has for too long been weaponised against consumers, and cites an example of a pregnant Soweto woman who was left homeless after being evicted from her home – having no idea it had been sold at a sheriffs’ auction. In another case, a Vosloorus man spent nine months in prison for supposedly “trespassing” in his own home after discovering it had been sold to a new owner.

He, too, had no idea he was in arrears or that his home had been sold at auction. “The abuses by the banks are particularly evident when it comes to home foreclosure, and it cannot be divorced from SA’s apartheid history,” Xhelithole says. “Back in the 1980s we fought against evictions on purely political grounds.

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Today, the evictions continue – but it is the banks that are doing it. “In case after case, legal papers are not properly served, or not served at all, and we’ve found syndicates operating out of the banks and sheriffs’ offices. Many township millionaires were made this way.

It’s time for some justice.” The case is likely to get bogged down in technical arguments from the outset. Banks have successfully blocked new affidavits being submitted as evidence, after the initial case was lodged with the court more than eight years ago. They have also asked for a de bonis propriis order against Shaw, which could amount to more than R5 million, for various perceived breaches of court rules. A de bonis propriis is a punitive order that holds counsel personally responsible for legal costs.

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