Joburg high court has ordered a property developer Charles Baxter to repay Standard Bank a staggering R23-million after defaulting on his loan payment agreement.
According to court documents, Baxter took three loans from the lending institution for the development of properties in Plettenberg Bay in the Western Cape but failed to make good his indebtedness to the financial institution.
Standard Bank first loaned Baxter, the Sandton-based businessman, an amount of more than R3.1-million and subsequently bankrolled him with a further loan of R4.5-million and lastly a R15-million so that he could facilitate the purchase and development of properties in Plettenberg Bay. This included the construction of the Stonefield Polo Estate.
As security for the loans, the bank registered three bonds against the properties and thereafter advanced the loan to Baxter.
Later both parties agreed to restructure the second and third loans that had been granted to facilitate a further loan of R8-million in respect of which a further bond was registered in favour of Standard Bank to beef up collateral security.
Later, Baxter informed the bank he could no longer fulfill his obligations to them and instead offered to sell the properties to either a foreign or local buyer, but that too failed to come to fruition.
Baxter went through a rough financial squeeze and could not keep up with payment and subsequently, month by month, defaulted notwithstanding the bank’s demands to settle his obligations.
Baxter, as a way of paying off the debt, concluded an agreement of sale with Alistair Leigh, selling the properties for R12-million to Rare Earth Vineyards, a wealthy company with more than 16 wine farms from Harkerville to the Crags, including Plett Winelands and boutique wine farm, Kay, and Monty, all in the Western Cape.
Despite the R12-million windfall, after the properties were sold, Baxter failed pay the bank back what he owed.
According to court documents we have seen, the bank has undertaken to sell Baxter’s multimillion properties to offset the debt due to it. When Baxter reneged on his loan obligations, the bank saw red and dispatched two letters of demand to Baxter.
“Having not yet received payment of the R12 000 000 in liquidation of the indebtedness from the sale of the properties, the applicant sent two letters of demand to the respondent.
“Demands were made for amounts in the sums of R32 704 292,25 together with interest at the rate of 9.25% per annum calculated daily and compounded monthly in arrears from 10 September 2014 to date of payment and R3 779 841,32 together with interest thereon at the rate of 10.75% per annum calculated daily and compounded monthly in arrears from 10 September 2014 to date of payment,” reads the court document.
The bank furnished the court with updated certificates of balance, which reflected that after the deduction of the R12-million purchase price, including the sums due under the two loan agreements, as of July 6, 2022, amounts of R22 976 271,94 and R490 607,20 were owed.
Acting Judge PV Ternent ordered Baxter to pay Standard Bank an amount of R490 607,20 together with interest at a rate of 11.5% from 30 June 2022 to date of payment. Baxter was also ordered to pay the bank R22 967 27194 plus interest at the rate of 9.5% per annum from June 30, 2022, to date of payment. The judge dismissed his counter application with costs.
