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Court criticises Absa's bookkeeping after bank fails to recover R6. 7 million
In 2021, Absa and Gola Trading and Projects signed a business loan, secured by a mortgage bond of R5.6 million and supported by personal guarantees from Arandana and Tswane Refineries.
Image: Absa/Facebook
Absa has lost a bid to attach property after it claimed that this was the best way to recover some R6.7 million it said was owed to it by two companies and Authar Arandana after they allegedly defaulted on a loan.
In dismissing the dispute over the multimillion-rand business loan, the South Gauteng High Court in Johannesburg was scathing in its judgement about the reliability of Absa's books. 'In any event, it seems clear to me that… it is evident the bookkeeping of the plaintiff was in disarray.'
The Judge, N.S. Kruger, said this conclusion was based on a review of communication between Absa as plaintiffs and defendants Gola Trading and Projects, Arandana, and Tswane Refineries. Kruger also considered 'various conflicting loan statements'.
Kruger said in the recent judgement that 'it seems that as far as [Absa] is concerned, the one hand is unaware of what the other is doing. In my view the defendants have succeeded in raising triable issues [matters that can be defended] in these respects'.
In 2021, Absa and Gola Trading and Projects signed a business loan, secured by a mortgage bond of R5.6 million and supported by personal guarantees from Arandana and Tswane Refineries.
The contract's date is in dispute, having been signed in either February or October 2021, but the court noted its structure and obligations are not. The loan included a capital facility of R5.535m, fees and VAT, and an additional amount for interest and potential legal costs.
According to the Absa, by mid-2023, Gola Trading and Projects had defaulted on payments, falling five instalments behind, which was more than R430 000. This, Absa claims, triggered a contractual clause allowing the loan to be cancelled and the full balance, of more than R5.27 million, to be called in immediately.
But the defendants contest this, saying no such arrears existed. They point to a series of loan statements showing lower arrears and argue that subsequent payments – including two of R90,000 and a larger one of over R194,000 – brought the account into a credit position. By 10 October 2023, they received a statement showing that no arrears were owed.
Despite this, Absa continued to chase the money, later adjusting the alleged arrears to R312,000 and seeking summary judgment. The amount claimed was later revised again to R4.27 million, which the judge said raised further questions.
The defendants argued that this pattern of inconsistencies undermines Absa's certificate of balance and suggested a material dispute that should be tested at trial.
Among the errors cited was an apparent reference to a '2019 agreement' in the bank's court papers – something Absa later admitted was a drafting mistake, the judgment noted. There were also discrepancies in the bank's internal calculations, leading to conflicting figures across statements and correspondence, the judge said.
The defendants argued that, even if the loan was technically in arrears at one point, Absa's subsequent conduct, accepting payments and requesting further instalments, effectively reinstated the contract.
They assert that no formal notice of breach was served before the alleged cancellation, and that the bank's changing demands demonstrate the agreement was still in place.
Adding to the complexity, the third defendant has since gone into voluntary liquidation.
Absa has postponed its claim against this party, focusing instead on recovering funds from Arandana and Gola Trading and Projects, and seeking a court order to declare the mortgaged property executable.
However, this matter will now have to be settled through mediation.
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