Ndubu v First Rand Bank Limited t/a Wesbank

First Rand Bank Ltd trading as Wesbank concluded four instalment sale (credit) agreements with Sizwe Personnel Service (Pty) Ltd for the purchase of two trucks and two trailers. The appellants bound themselves jointly and severally as sureties and co‑principal debtors for Sizwe’s obligations. Sizwe was later placed into voluntary liquidation. Various attempts were made by the appellants to settle or reduce the indebtedness, including three offers made by third parties and a related company to purchase the vehicles. The vehicles were ultimately repossessed by Wesbank and sold at public auction with the liquidators’ authorisation, resulting in a shortfall of approximately R700 000. Wesbank sued the appellants as sureties for the shortfall. The appellants raised multiple defences, alleging that Wesbank’s refusal or failure to accept the offers prejudiced them and released them from their suretyship obligations.

The appeal was dismissed and the appellants were ordered to pay the costs of the appeal jointly and severally.

The case reaffirms that a surety alleging release due to prejudicial conduct by a creditor bears a strict onus of proof. It clarifies that a creditor is not obliged to accept offers to purchase secured assets and that failure to do so does not, without more, constitute prejudice or a failure to mitigate damages. The judgment also provides guidance on the application of sections 83 and 84 of the Insolvency Act in the context of instalment sale agreements and liquidation.