First National Bank Faces Appeal Over Property Sale

What Led to the Dispute?

First National Bank lent R3.85 million to a company called Amoricom. The loan was secured by a mortgage on Amoricom’s property. By July 2022 the borrower had stopped making payments, putting the loan in default.

The Repayment Agreement and Subsequent Sale

Later in 2022 the bank and Amoricom worked out a repayment plan. The agreement said that if the plan wasn’t followed, the bank could sell the property. In April 2023 the property was sold for R3.85 million (before VAT). Even after the sale, the bank was still short about R1.48 million.

Original Court Ruling (September 2025)

The Gauteng High Court originally ordered Amoricom and its guarantor, Terrence Mathebula, to pay the bank the R1.48 million shortfall. The judge found that the bank had acted reasonably when it accepted the sale price and turned down other offers.

Why the Defendants Want to Appeal

Claim of Missing Information

Amoricom and Mathebula argue that the bank went ahead with the sale without showing that the price would cover both the bank’s debt and the unpaid municipal charges and taxes on the property.

Duty of Good Faith

They say the bank, acting under a special power of attorney, owed the property owner a duty of utmost good faith. Selling the property for less than what was needed to settle all debts allegedly put the bank’s interests ahead of the owner’s.

Awareness of Municipal Arrears

The court accepted that the bank knew about the outstanding municipal arrears, which largely explained the R1.48 million deficit.

Judge Adams’ Reasoning for Allowing an Appeal

Judge Leslie Adams noted that another court could reach different conclusions about the facts and the law. He said there is a realistic chance that a full court might disagree with his original findings, so he granted the defendants permission to appeal to the full Gauteng Division of the Supreme Court.

What Happens Next?

The case will now be heard by a full bench of judges. They will review whether the bank properly considered all debts—including municipal taxes—before selling the property, and whether the bank fulfilled its duty of good faith.

Conclusion

This appeal highlights the importance of banks checking all outstanding obligations before forcing a property sale. For teens learning about finance and law, the case shows how loan agreements, property rights, and municipal responsibilities can intersect, and why courts sometimes give parties a second chance to argue their side.