The case is particularly interesting from at least one angle: Sasfin Bank pioneered securitisation in South Africa, and Greville claims that his loan has been securitised, thereby removing the bank’s legal standing to bring any action against him.
The judgment handed down by the court could be a major victory for the “securitisation defence” as it has come to be known. Securitisation is the practice of bundling loans together and on-selling them to investors, though the banks continue to act as collection agents for the new owners, which is expressly forbidden in terms of Section 78 of the Banks Act.
Once securitisation has occurred, the banks – in theory – lose all legal title to these loans and cannot proceed against borrowers. This has been validated by case law overseas, but the courts in South Africa have tended to give the banks a free pass on this shadowy practice. This latest judgment is therefore a major victory for those arguing the securitisation defence.
If anyone can provide Case Law relevant to the UK to share it would be appreciated.