An appeal against FNB will go to the High Court after it didn't consider rates and taxes before selling a property.
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First National Bank is facing an appeal after the Gauteng High Court raised questions over whether a property should have been sold without fully accounting for outstanding municipal rates and taxes.
The dispute centres on a R3.85 million loan granted to Amoricom, which was secured by a mortgage bond over the company’s property. According to the judgment, the loan had fallen into default by July 2022.
A repayment arrangement concluded later that year authorised the bank to sell the property if the agreed terms were not met. The property was ultimately sold in April 2023 for R3.85 million excluding VAT. However, the sale still left a shortfall of about R1.48 million, largely because of unpaid municipal rates and taxes attached to the property.
The original judgment, delivered in September 2025, ordered the respondents to pay the bank R1.48 million linked to the loan agreement and suretyship signed by Mathebula.
In the latest court case, Judge Leslie Adams granted Amoricom and Terrence Mathebula, the respondents, leave to appeal to the full court following an earlier ruling in favour of FirstRand Bank.
They argued that the bank proceeded with selling the property without showing that the selling price was sufficient to cover both the outstanding bank debt and the municipal arrears owed on the property.
According to the judgment, the respondents argued that the bank, acting under a special power of attorney, “owed a duty of the utmost good faith” to the property owner and should not have prioritised its own interests above those of its principal.
The court recorded the respondents’ argument that the bank was aware of the outstanding municipal arrears, which “by and large” made up the shortfall for which judgment was later granted.
Amoricom and Terrence Mathebula further argued that the bank had a duty not to sell the property for less than the combined value of the outstanding debt owed to the bank and the arrear rates and taxes owed to the municipality unless it could show that the market value of the property would not have covered those amounts.
In the original 2025 ruling, the court found that the bank had acted reasonably and in good faith when accepting the R3.85 million offer and rejecting other offers submitted by the respondents.
Judge Adams said in the latest ruling that he was persuaded another court could reach different factual and legal conclusions to those he reached in the original judgment.
“I therefore conclude that there are indeed reasonable prospects of another court making factual findings and coming to legal conclusions at variance with my factual findings and legal conclusions,” Adams said.
The appeal will now be heard by the full bench of the Gauteng Division of the High Court.
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