REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
CASE NO: 2024-020685
DATE: 19 SEPTEMBER 2025
In the matter between:
FIRSTRAND BANK LIMITED t/a FIRST NATIONAL BANK Applicant
and
AMORICOM (PTY) LIMITED First Respondent
TERRENCE MATHEBULA Second Respondent
Coram: Adams J
Heard: 21 May 2025
Delivered: 19 September 2025 – This judgment was handed down
electronically by circulation to the parties' representatives by email,
by being uploaded to CaseLines and by release to SAFLII. The date
and time for hand-down is deemed to be 11:30 on 19 September
2025.
Summary: Monetary judgment – application for – written loan agreement
between the applicant and the first respondent – second respondent bound
(1) NOT REPORTABLE
(2) NOT OF INTEREST TO OTHER JUDGES
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himself as surety for and co-principal debtor with the first respondent in favour of
the applicant – loan also secured by a continuous covering mortgage bond in
favour of the applicant over the first respondent’s property – first respondent fell
into arrears with instalments – parties concluded a written ‘repayment
arrangement, incorporating a special power of attorney ’ in regard to the
property –
Pursuant to and in terms of the repayment agreement, property sold by the
applicant – shortfall after sale claimed in opposed motion court proceedings –
substantial portion of the shortfall relates to payment made in respect of arrear
municipal rates and taxes – respondents accepted that the applicant was entitled
to sell the property – however, they allege that the applicant acted unreasonably
in selling the property at the price it did – respondents allege that there were
better offers on the table than the one accepted by the applicant –
Held that, all things considered, the applicant acted reasonably – and that the
applicant exercised its discretion reasonably, or, as it is known in our law, arbitrio
bono viri –
Judgment granted in favour of the applicant against the respondents,
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ORDER
Judgment is granted in favour of the applicant against the first and the second
respondents, jointly and severally, the one paying the other to be absolved, for: -
(a) Payment of the sum of R1 481 090.83.
(b) Payment of interest on the sum of R1 481 090.83 at the applicant’s prime
lending rate (at the time being 11.75% per annum) plus 0.50% per annum,
calculated daily and compounded monthly in arrears , from 14 February
2024 to date of final payment, both days inclusive.
(c) Costs of the application on the attorney and client scale, including Counsel’s
charges on scale ‘C’ of the tariff applicable in terms of the Uniform Rules of
Court.
JUDGMENT
Adams J:
[1]. This is an opposed application by the applicant for judgment against the
first and the second respondents, jointly and severally, for payment of the sum of
R1 481 090.83, plus interest thereon and costs of suit. The applicant’s cause of
action is based on a written loan agreement concluded at Sandton between the
applicant and the first respondent on 30 August 2018 (‘the loan agreement’) in
terms of which the applicant lent and advanced to the first respondent an amount
of R3 850 000. The aforesaid capital sum of R3 850 000, together with interest
thereon and other charges provided for in the loan agreement, were to be repaid
by the first respondent to the applicant in sixty monthly instalments of R51 949.97
each.
[2]. The second respondent, in terms of a written Suretyship, bound himself
as surety for and co -principal debtor with the first respondent in favour of the
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applicant. The loan was furthermore secured by a continuous covering mortgage
bond in favour of the applicant over the first respondent’s property, being Erf 196,
Kempton Park Township, Gauteng Province (‘the property’) , for the sum of
R3 850 000.
[3]. By July 2022, the first respondent had fallen hopeless ly into arrears with
its monthly instalments payable in terms of the loan agreement, and, in an attempt
to assist the respondents and with a view to avoiding litigation, the parties on
20 July 2022 concluded a written so called ‘ Repayment Arrangement’,
incorporating a special power of attorney ( ‘the SPOA’) in regard to the property.
In terms of the Repayment Arrangement, the parties agreed that the respondents
would settle the ir admitted i ndebtedness and any other monies owing to the
applicant in terms of the Repayment Arrangement on or before 1 October 2022 .
In the event that the respondents breached any of the terms of the Repayment
Arrangement, the first respondent irrevocably and unconditionally authorised,
instructed and consented to the applicant disposing of the property on terms and
in the manner deemed appropriate by the applicant , and appropriating the
proceeds of the disposal in permanent reduction of the respondents’
indebtedness and any other monie s owing to the applicant in terms of the
Repayment Arrangement.
[4]. Simultaneously with signature of the Repayment Arrangement , the first
respondent executed an irrevocable and unconditional SPOA in favour of any
manager of the applicant, authorising the applicant's representative to take all
steps necessary to give effect to the disposal of the property upon the breach by
the respondents of any of the terms of the Repayment Arrangement. It was also
agreed that the applicant's representative would be entitled to inter alia at its own
discretion to sell the property by way of a closed auction or a public auction (with
or without a reserve price) or private treat y and/or to agree to a purchase
or without a reserve price) or private treat y and/or to agree to a purchase
consideration which the applicant's representative deems reasonable.
[5]. Subsequent to the conclusion of the Repayment Arrangement, the
respondents failed to settle the ir indebtedness on or before 1 October 2022.
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Accordingly, and, as it was entitled to do in terms of the Repayment Arrangement,
read with the SPOA, the applicant proceed ed with the disposal of the property
and on 21 April 2023 sold the property for R3 850 000, excluding VAT , as a
consequence whereof the applicant received the net proceeds of the sale in the
sum of R4 030 509.40, which it duly credited to the respondents’ account and
their indebtedness, leaving a net balance, according to the applicant, of the sum
of R1 481 090,83, plus interest thereon , payable by the respondents to the
applicant, which is the amount claimed by the applicant in these proceedings.
[6]. The transfer of the property to the purchaser took place on 24 November
2023. Importantly, in order to ensure that the registration of the transfer to the
purchaser proceeded, the applicant advanced payment on behalf of the first
respondent to the City of Ekurhuleni of the rates clearance figures in the amount
of R1 271 444.11 for purposes of obtaining the relevant rates clearance
certificate. This sum was debited to the respondents’ account and their
indebtedness to the applicant, as per and in terms of the Repayment
Arrangement. The aforegoing shortfall of R1 481 090.83, for which, according to
the applicant, the respondents remain liability, together with interest thereon.
Much of this indebtedness relates to the amounts paid by the applicant to the
local authority for purposes of obtaining a rates clearance certificate. All of the
aforegoing was done, in my view, in terms of and according to the letter and the
spirit of the Repayment Agreement, which incorporated by reference the SPOA.
[7]. The first and the second respondents accept that the applicant was
entitled, in terms of the Repayment Agreement, read with the SPOA, to sell the
property. However, they resist the application for judgment on the basis of a
denial that the applicant was entitled to sell the property, as it did, for the lesser
denial that the applicant was entitled to sell the property, as it did, for the lesser
amount of R3 850 000, excluding VAT, as , so the case on behalf of the
respondents go, the applicant unreasonably refused and/or failed to accept two
better offers procured by the respondents for R5 400 000 and R7 200 000
respectively. In sum, the application is opposed by the respondents on the
following two bases: (a) The a pplicant failed to properly execute its mandate as
the agent of its principal, the first Respondent; and (b) The applicant has failed to
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prove the quantum of its claim. The point about the latter defence is that,
according to the respondents, the quantum of the contractual damages claimed
by the applicant is wholly unreasonable and unrealistic.
[8]. The issue which I have to adjudicate is a factual one. I need to consider
whether factually the applicant has proven the amount claimed by it as
reasonable. Put another way, the issue for determination in these proceedings is
whether the applicant exercised its discretion reasonably, or, as it is known in our
law, arbitrio bono viri.
[9]. The applicant contends that its discretion was unfettered. In any event, so
the case on behalf the applicant goes, it did indeed exercise its discretion arbitrio
bono viri.
[10]. As indicated above, i n essence the case on behalf of the respondents is
that they procured two offers to purchase the property, in the sums of R5 400 000
and R7 200 000 respectively, which, had any one of these two offers been
accepted, would have raised sufficient proceeds to settle the debt to the applicant
and would have been sufficient to defray the amounts owing to the local authority.
[11]. The respondents further contend that the applicant, acting in terms of the
SPOA, had a duty to the first respondent not to sell the property for less than the
respondents’ outstanding indebtedness, together with arrear rates and taxes, ‘...
unless it could be shown that the reasonable market price of the property would
not realize a sufficient amount to cover the outstanding debt to the applicant and
the municipality’.
[12]. Mr De Oliveira, Counsel for the applicant, submitted that, objectively
considered and taking into account the history of the matter and numerous still -
born offers to purchase sent by the second respondent to the applicant over an
extended period of time , the applicant acted reasonably and rationally
throughout. I find myself in agreement with this contention. It is so, as submitted
throughout. I find myself in agreement with this contention. It is so, as submitted
by Mr De Oliveira, that t he reasonable man in the mercantile world would have
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done precisely as the applicant did. He would rightly have viewed the second
respondent’s communications with the applicant and its appointed auctioneers,
at the eleventh hour, with circumspection and avoided another delay in the sale
of the property, and losing the firm offer for R3 850 000, excluding VAT.
[13]. I therefore conclude that the applicant acted reasonably and rationally
when it proceeded to accept the offer of R3 850 000, excluding VAT. Its
representatives acted with good faith and honesty throughout. I come to this
conclusion on the basis of the considerations set out in the paragraphs which
follow.
[14]. The first offer relied upon by the respondents was emailed to the applicant
effectively in response to the representative of the bank advising the respondents
that it had obtained the offer which it ultimately accepted. Moreover, the first offer
relied upon by the respondents presented with serious discrepancies, which
made the applicant, rightly so, sceptical about the genuineness of the offer.
[15]. Moreover, by the time the applicant accepted the final offer for R3 850 000,
a period in excess of five months had transpired from the date on which the
respondents ought to have settled their indebtedness in full. During that period,
the respondents did not come up with any offers. It was only after the applicant
indicated to the respondents that they intended accepti ng the offer for
R3 850 000 and after they were afforded a further indulgence to come up with an
offer, that the respondents presented what a ppears to have been questionable
offers to purchase.
[16]. Sight should also not be lost of the history of the matter leading up to the
conclusion of the Repayment Agreement, which included a number of still-born
offers to purchase presented by the respondents. It is therefore understandable
that the applicant treated with circumspection the offers received ex post fact o
the final offer accepted by the applicant.
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[17]. For these reasons, I am of the view that the grounds of opposition as
raised by the respondents are devoid of merit.
[18]. Judgment should therefore be granted in favour of the applicant against
the respondents. As regards costs, same should follow suit. And, in that regard,
the agreements between the parties provided for the award of costs on the scale
as between attorney and client in favour of the applicant.
Order
[19]. In the result, Judgment is granted in favour of the applicant against the first
and the second respondents, jointly and severally, the one paying the other to be
absolved, for: -
(a) Payment of the sum of R1 481 090.83.
(b) Payment of interest on the sum of R1 481 090.83 at the applicant’s prime
lending rate (at the time being 11.75% per annum) plus 0.50% per annum,
calculated daily and compounded monthly in arrears , from 14 February
2024 to date of final payment, both days inclusive.
(c) Costs of the application on the attorney and client scale, including Counsel’s
charges on scale ‘C’ of the tariff applicable in terms of the Uniform Rules of
Court.
______________________ ___
L R ADAMS
Judge of the High Court
Gauteng Division, Johannesburg
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HEARD ON: 21 May 2025
JUDGMENT DATE: 19 September 2025
FOR THE APPLICANT: M De Oliveira
INSTRUCTED BY: Jason Michale Smith Incorporated,
Rosebank, Johannesburg
FOR THE FIRST AND THE
SECOND RESPONDENTS: C R Du Plessis
INSTRUCTED BY: Louanne Visser Attorneys Inc,
Ruimsig, Roodepoort