Bank fails in bid to enforce payment of debt
Al Baraka Bank has failed in its High Court attempt to enforce payment of a disputed debt owed to it by Cecita CC since 2015.
A Cape Argus report says the bank instituted winding-up proceedings against Cecita, which owns undeveloped land that is bonded to the bank as security for a loan.
The issue before KZN High Court (Durban) Judge Mokgere Masipa was whether the bank was entitled to bring its application to wind up Cecita, despite having already instituted an action which Cecita had defended, or whether this would be an abuse of process.
Al Baraka argued that Cecita breached the agreements by failing to pay the monthly instalments.
In its arguments, Cecita denied being insolvent. The company’s lawyers argued that Al Baraka had failed to appreciate their client’s defence, which was the bank’s failure to appropriate payments made to the correct account, together with inconsistency regarding the debt allegedly due.
Cecita also argued that the action between both parties was still pending and that after delivering its plea, Al Baraka did not apply for summary judgment.
Cecita argued that in the absence of a summary judgment application, Al Baraka’s conduct was tantamount to an admission that Cecita has a bona fide defence to the action and that the new application constitutes an abuse of process.
Masipa said that while the loan was not in dispute and a section 69 notice was issued, it was common cause that the bank instituted an action prior to launching this application based on the same debts.
‘There was no reasonable explanation why this avenue was not explored when it could have resulted in the applicant obtaining judgment much sooner than following a lengthy, protracted trial process,’ Masipa said.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
