FirstRand Bank Limited v Lourina Wilson N.O. and another

On 16 March 2017, FirstRand Bank Limited (FNB) and Mr Gavin Mark Baseley (the deceased) concluded a written loan agreement for R2.8 million, repayable over 180 months and secured by two mortgage bonds registered over the deceased's immovable property. The deceased passed away on 30 October 2017. Ms Lourina Wilson was appointed executrix of the deceased's estate on 13 December 2017. FNB lodged its claim for R3,509,477.53 against the deceased estate on 14 December 2017, which Ms Wilson admitted. On 4 October 2021, an amount of R1,336,044.35 was erroneously deposited into the deceased's mortgage loan account from the trust account of attorneys handling the sale of Ms Wilson's personal property. On 11 October 2021, Ms Wilson informed FNB that this payment had been made erroneously and demanded its repayment. On 30 November 2021, Ms Wilson sent an email stating that due to FNB's failure to respond, she now offered the amount paid into the account in full and final payment of any outstanding amount on the loan and regarded the matter as finalised. FNB rejected this offer unequivocally on the same day but retained the funds. On 4 April 2022, FNB issued a s 129(1) notice reflecting the reduced indebtedness of R2,003,415.96. FNB then instituted proceedings on 14 June 2022 for recovery of the outstanding debt and an order declaring the mortgaged property specially executable. Over seven years had passed since the deceased's death without the estate being finalised.

• Whether an offer of compromise was made by Ms Wilson's email of 30 November 2021
• Whether FNB's retention and appropriation of the funds, despite its express rejection of the offer, constituted acceptance of the offer
• Whether FNB should be permitted to supplement its founding affidavit to cure a defect in its pleadings regarding compliance with section 29 of the Administration of Estates Act
• Whether exceptional circumstances existed to justify granting an order under section 30 of the Administration of Estates Act permitting legal proceedings and execution against immovable property of a deceased estate

The appeal was upheld. The order of the high court was set aside and substituted with an order granting FNB leave to supplement its founding affidavit, judgment in favour of FNB against the deceased estate for payment of R2,003,415.97 plus interest at 10.25% per annum calculated daily and compounded monthly from 5 April 2022, an order declaring the mortgaged sectional title property specially executable, and costs on the attorney and client scale. The First Respondent was ordered to pay the costs of the appeal.

An offer of compromise that is explicitly and unequivocally rejected cannot be accepted by subsequent conduct such as retention of funds. The ordinary principles of offer and acceptance apply to compromises: there must be a clear offer and unequivocal acceptance. Where an offer is expressly rejected, no compromise can be concluded. A party's subsequent conduct inconsistent with the position that a compromise has been concluded (such as requesting a new settlement or referring to outstanding amounts) negates any inference of acceptance and demonstrates that no binding compromise was reached. The onus rests on the party alleging compromise to prove it on a balance of probabilities. While applicants must make out their case in their founding affidavits, courts retain discretion in exceptional circumstances to allow supplementation where it is in the interests of justice, particularly where the defect relates to formal, non-contentious facts and refusal would lead to wasted costs and further delay. Inordinate and unexplained delay in finalising a deceased estate, coupled with the position of a secured creditor holding an admitted claim, constitutes sufficient reason to grant an order under section 30 of the Administration of Estates Act permitting execution against estate property, as the statutory process should not be used to indefinitely frustrate undisputed contractual and real rights.

The court observed that the purpose of section 30 of the Administration of Estates Act is to allow the executor time to assess all claims and to prevent a single creditor from gaining an unfair advantage through early litigation. However, this purpose is not truly served by non-suiting a secured creditor whose claim was long since admitted, especially where estate administration has been subject to inordinate delays. The court noted that to dismiss an application on purely formalistic grounds where a creditor could simply re-launch on properly constituted papers would be an exercise in formalism leading to wasted costs and further delay. The court also noted approvingly the recognition in Nedbank Ltd v Steyn that the statutory claims procedure is not always speedy or inexpensive, and that creditors retain their common law rights to enforce claims against deceased estates. The court observed that Ms Wilson created confusion by trying to act in two capacities at once - personally and as executrix - which resulted in uncertainty about whether the payment was a reduction of the estate's indebtedness or Ms Wilson's personal money.

This case clarifies the principles of offer and acceptance in the context of compromise agreements, particularly where there is an express rejection of an offer. It establishes that conduct inconsistent with acceptance (such as an express rejection) cannot be overridden by subsequent acts of retaining funds, especially where explanations exist for such retention. The case also demonstrates the court's willingness to exercise its discretion to permit supplementation of founding affidavits in exceptional circumstances where the interests of justice require it, particularly where the defect is formal and refusal would lead to wasted costs. It reinforces that inordinate delay in finalising deceased estates, particularly where secured creditors have admitted claims, may constitute sufficient grounds for granting section 30 orders permitting execution against estate property. The case confirms that while the statutory claims procedure should generally be followed, it should not be used to indefinitely frustrate a creditor's undisputed contractual and real rights.