The client registered a mortgage loan of R500 000 in 2013 with Standard Bank on a 20-year payment term. In October 2023, the bank instituted legal action on the allegation that the client was in arrears and demanded a payment of R120 000 to stop the sale in execution. The client paid the R120 000, and the auction was subsequently stayed.

Despite this, on 11 March 2025, an amount of R302 104.09 was debited to the account as “Legal Costs”. This charge was added notwithstanding the Constitutional Court judgment in the matter of Nomsa Nkata v First National Bank (CCT 73/15), which made the legal position very clear. In that judgment, Section 129(3)(a) was interpreted to mean that a debtor is required to pay arrears, including only “permitted default charges and reasonable costs of enforcing the agreement up to the time of reinstatement”. The High Court and Constitutional Court both confirmed that a bank cannot unilaterally impose legal costs unless such costs have been taxed or agreed.

Former Deputy Chief Justice Moseneke held that the bank in that case failed to give Ms Nkata notice of the legal costs. Because the costs had not been taxed or agreed, they were not considered reasonable, and therefore could not be due or payable.

In line with this binding precedent, Mr. Sim Tshabalala, Chief Executive Officer of Standard Bank, was informed that the client never agreed to any such legal costs, and since the costs were not taxed, the amount of R302 104.09 must be immediately reversed.

Message from the Webmaster to Mr. Tshabalala:

“Dear Simmy, it is astonishing that you, as CEO, continue to burden clients with unlawful charges to secure your annual bonus, which amounted to R78 million this year.”

As at the date of summons, the outstanding balance claimed was R1 012 239.