The Gauteng High Court (Johannesburg) has overturned a 1994 judgment in favour of Standard Bank resulting in a three-decade battle between the bank and Soweto homeowner Mogudi Mosai.

Among several bizarre features of this case is that the home was repossessed by the bank in 1994 over alleged arrears of R109 000 and then sold at auction for R200.

Moneyweb reports that the court found this has ‘all the makings of a simulated transaction’.

Sales of homes for such paltry amounts were ‘an unhealthy practice which was particularly rife amongst banks at the time’. This despite constitutional protections already in place against arbitrary deprivation of property.

‘The bank provided no explanation at all for this abuse which resulted in (Mosai’s) right to the surplus after payment of the judgment debt being destroyed,’ reads the judgment.

The saga dates back to 1982 and covers a particularly dark period in SA history when a marriage between a black woman and a black man was assumed to be out of community of property unless a declaration to the contrary was made at least one month prior to the marriage.

Mosai was married to the late Howard Mogudi in 1982, and this apartheid-era confusion as to the status of the marriage formed a central pillar of the case. 

Moneyweb reports that it was eventually conceded by the bank that they were married in community of property, in which case any legal actions would have to cite both as respondents. However, this did not happen.

The couple acquired a leasehold property in Orlando West in 1991 and then mortgaged the property to the bank to fund a business venture.

The fact that Mosai did not sign any bond or transfer documents despite the marriage in community of property contravened the Matrimonial Property Act, which requires both spouses to be involved in such decisions.

The business venture ultimately failed, and the couple fell into arrears. Standard Bank issued summons in November 1993 for the claimed arrears of R109 000.

Mosai says neither she nor her late husband received any summons from the bank.

The sheriff’s ‘return of service’ notice shows the summons appears to have been served on a Mrs Lethollo, who was unknown to Mosai. Mosai and her husband were completely unaware that their property had been sold. 

Moneyweb reports that they continued to live undisturbed in the house until 2001, when Servcon Housing Solutions – purporting to be acting on behalf of the bank – approached Mosai and asked her to sign a lease agreement for the property.

Her husband was away in Kenya at the time, and advised her to sign the document although she was unaware of its significance.

Moneyweb reports that the lease agreement required payment of R904 in monthly rentals. In 2002, the bank sold the property for R50 000 to Tshenolo Monaapula, who appears to have worked for the SARB and had bought other properties under similar circumstances.

The property was transferred in 2004 into the new buyer’s name, and she commenced eviction proceedings against Mosai and her husband.

The couple were evicted from their home in 2005, but raised funds to mount a legal defence and managed to retain possession of the property pending finalisation of the matter.

In her court papers, Mosai says her husband – who passed away in 2013 – only became aware in December 2001 that the bank had purchased the property in 1994.

Mosai was subsequently appointed executrix of her late husband’s estate.

Full Moneyweb report

Judgment