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Monday Dec 24, 2012

Court refuses interdict against banks on property foreclosures

An urgent interdict by hundreds of consumers trying to stop banks from redeeming property and other assets due to non-payment was rejected by the High Court in Johannesburg on Friday.

Judge Brian Spilg described the application as "evidently not urgent" and could have been done with "ordinary processes".

"This is a gross abuse of court," he said.

The interdict, which sought to stop foreclosure on 1 200 houses and other assets because of non-payment over the holiday, was brought by the New Economic Rights Alliance (NewERA).

Advocate Douglas Shaw argued the interdict was in the public's interest, and was urgent, as some home owners would lose their houses over the holidays.

"It's extremely urgent and a matter of social import," Shaw said.

Judge Spilg rejected this, saying a court interdict would be wrong, as those facing foreclosure could seek relief individually, not as a group.

However, Shaw argued that it would be "highly difficult" for each applicant to approach the court as individuals.

Advocate Shem Symon, representing several banks, said notice of the urgent application had been improperly done.

He argued that credit providers had the right to reclaim property if a loan went into arrears and this should not be ignored.

The judge complained the application was being made on the last day of court for the year, with the filing given to him more than 1 000 pages long.

He said that while NewERA's urgent interdict was dismissed, they would be able to bring their regular court case on January 28.

The basis of NewERA's complaint is that banks are bundling and selling loans to third parties on bond markets and stock exchanges through securitisation.


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