In 2011, I financed business loan a vess...

Asked by DesMet on 14-04-2021 20:11:01
Question posted in the General Law category relating to Eastern Cape

In 2011, I financed (business loan) a vessel with a local bank. Long story short, in 2015 it was repossessed and auctioned off. There was a balance left on the account and this was written off. No further communication was received for demand or any other correspondence from the bank over the years to date. Fast forward to April 2021, I did an ITC check and realised that the bank has listed me with a substantially increased balance (most probably compounded interests) and the status is changed and indicated as the account been handed over. All prior ITC checks indicated that the account was written off with the balance at the time.

My question is, what are my rights with regard to this action by the bank? Is it allowed to re-institute legal action after all these years? Is there no time limitations to re-open and pursue me again? How can I successfully defend myself and clear my name? 

Many thanks,

Dimitriv

Further information relating to Question:

The transaction was conducted in Namibia.

Answer to the Question

Posted by Att. Patrick on 15-04-2021 09:44:50

Hi there and thank you for your question, 

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow-up questions in order to clarify your question. If you have a new question, you must please open a new thread. 

I assume that the vessel was attached and auctioned off because you defaulted under the business loan and the bank then got a judgment against you and then sold off the vessel?

When a bank writes off the balance, all that means is that the bank has decided that it doesn't want to sue you for the balance owing. It is not a legally binding thing which means that the bank can never sue you, or proceed against you further. 

What I can tell you is that if the business loan was terminated and the vessel sold, then the bank would only have 3 years from that time to sue you for the balance. If they don't, then their claim has prescribed and in law the bank can't sue you. You have a defence to the bank's claim. 

ITC is a completely separate issue and the bank is allowed to list your name on ITC if you default under a credit agreement. 

Q: Is it allowed to re-institute legal action after all these years? --> Yes, but you would most likely have a defence of prescription which means that 3 years has gone by and the claim has now prescribed. 

Q: Is there no time limitations to re-open and pursue me again? --> Yes, 3 years. 

Q: How can I successfully defend myself and clear my name? --> You would need to defend the legal proceedings and file your prescription defence. You would then need to get hold of ITC and dispute the listing, possibly on the basis that the bank has written off the debt and also that the debt has prescribed!

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question. 

Att. Patrick 

Please remember this is a dialog if you have follow-up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted to be answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.

Information provided by client

Hi, Thank you for the prompt and detailed response.
I have not yet received any summons thus I would like to know how to proceed in order to defend this action?
Also, is it possible to appoint you to defend this case on my behalf?

Thanks
Dimitriv

Answer to the Question

Posted by Att. Patrick on 16-04-2021 08:56:11

Q: I have not yet received any summons thus I would like to know how to proceed in order to defend this action? --> You need to wait for the summons to be served on you. Or, you could telephone the bank and ask them which attorneys they have handed you over to, then telephone those attorneys and ask them if a summons has been issued or not. What you can also do is to write to the bank and tell them: "I hear you're trying to collect the outstanding amount; it has prescribed, so what are you doing; and if you instruct attorneys to issue a summons I will defend it".

Q: Also, is it possible to appoint you to defend this case on my behalf? --> Unfortunately no, because I might not even be in the same city as you. Also, we only answer questions online. If you want to appoint an attorney, you'll need to appoint a private attorney to assist. I can't refer you to a specific lawyer, but I can direct you to https://www.southafricanlawyer.co.za, where you can find a list of qualified lawyers in your area who will be able to assist you further!

Information provided by client

Thank you very much, advice highly appreciated.

Answer to the Question

Posted by Att. Patrick on 16-04-2021 10:24:09

It's a pleasure.

Answer Accepted

This answer was accepted on 16-04-2021 10:50:06

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