The complainant defaulted on repayment of the minimum monthly instalments due and payable in terms of an overdraft credit facility held at the bank. The bank instituted legal proceedings against the complainant and obtained a default judgment. In terms of the default judgment, the complainant is liable for payment of legal costs on a party-and-party scale.
The bank debited legal costs totalling R7 948.76 to the overdraft facility account between August 2021 and October 2021.
Our office recommended to the bank that they remove the legal costs from the overdraft facility account, as there was no legal basis for the bank to debit these costs to the overdraft facility account in the absence of the bank being able to furnish proof that the complainant agreed to make payment of same, or that the legal costs were taxed on a party-and-party scale in accordance with the default judgment granted against the complainant.
The bank responded to the recommendation and provided the complainant with two options: Option 1 is for the complainant to agree to make payment of the legal costs totalling R7 948.76, whereafter the legal costs will remain debited to the overdraft facility account. Option 2 - if the complainant does not agree to payment of the legal costs, the bank will reverse the legal costs debited to the overdraft facility account and have a bill of costs taxed by the Taxing Master.
Principle: Legal costs may only be debited to an account should the debtor agree to making payment of same; alternatively if the legal costs have been taxed by the Taxing Master.