FirstRand Bank Limited v Lourina Wilson NO and Another

FirstRand Bank Limited (FNB) concluded a written loan agreement for R2.8 million with Gavin Mark Baseley in March 2017, repayable over 180 months and secured by two mortgage bonds over Baseley’s immovable property. Baseley died in October 2017. Ms Lourina Wilson, an heir, was appointed executrix of the deceased estate in December 2017 and admitted FNB’s claim of approximately R3.5 million. In October 2021, an amount of R1,336,044.35 was erroneously deposited into the deceased’s mortgage loan account from attorneys who had handled the sale of Ms Wilson’s personal property. Ms Wilson demanded repayment. Following correspondence, on 30 November 2021 she emailed FNB offering the retained amount as full and final settlement of the estate’s outstanding debt. FNB rejected the offer unequivocally on the same day, but retained the funds and allocated them to reduce the loan. FNB alleged that during a telephone call on 8 December 2021 Ms Wilson agreed the funds could remain; she denied this. On 4 April 2022 FNB issued a notice in terms of s 129(1) of the National Credit Act reflecting a reduced indebtedness of R2,003,415.96, and on 14 June 2022 instituted application proceedings for judgment, interest, and an order declaring the mortgaged property specially executable. FNB’s founding affidavit did not plead compliance with ss 29 and 30 of the Administration of Estates Act 66 of 1965, and it launched an interlocutory application for leave to supplement its papers. The High Court dismissed FNB’s claim, finding that a compromise had been concluded on 30 November 2021 and that FNB’s retention of the funds constituted acceptance despite its express rejection. The Master of the High Court, Cape Town, was cited as the second respondent but did not participate in the appeal.

• Whether a contract of compromise was concluded on 30 November 2021, in particular whether Ms Wilson’s email constituted an offer of compromise and whether FNB’s conduct in retaining and appropriating the funds amounted to acceptance despite its express written rejection.
• Whether the court should grant FNB leave to supplement its founding affidavit to cure a procedural defect relating to the failure to plead and prove compliance with ss 29 and 30 of the Administration of Estates Act 66 of 1965.
• Whether sufficient reason or exceptional circumstances existed to justify an order in terms of s 30(b) of the Administration of Estates Act granting leave to execute against immovable property of the deceased estate.

The appeal was upheld. The order of the Western Cape Division of the High Court was set aside and substituted with an order: (1) granting FNB leave to supplement its founding affidavit as prayed; (2) granting judgment in favour of FNB against the first respondent (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 to final payment; (3) declaring the immovable property (Section No. 3, Sectional Plan SS247/2008, Hatfield 109, Gardens, Cape Town) specially executable; (4) ordering the first respondent to pay the costs of the application, including the interlocutory application, on the attorney and client scale; and (5) ordering the first respondent to pay the costs of the appeal.

1. A contract of compromise is subject to the ordinary principles of offer and acceptance; an express and immediate rejection of an offer of compromise precludes a finding of acceptance based on subsequent conduct, particularly where the offeror’s own subsequent conduct negates any settled agreement. 2. The onus of proving a compromise rests on the party alleging it and must be discharged on a balance of probabilities. 3. A court has a discretion, to be exercised in the interests of justice, to grant leave to supplement founding papers where the additional evidence is formal and non-contentious and where rigid adherence to pleading requirements would result in sterile formalism, wasted costs, and delay. 4. In considering an application for leave to execute against a deceased estate’s immovable property under s 30(b) of the Administration of Estates Act, the primary consideration is fairness to all interested parties; inordinate and unexplained delay in finalising the estate, coupled with the applicant’s position as a secured creditor holding an admitted claim, constitutes sufficient reason to grant the order.

1. The purpose of s 30 of the Administration of Estates Act is to afford the executor sufficient time to assess all claims against the estate and to prevent any single creditor from gaining an unfair advantage through early litigation. 2. The statutory claims procedure under the Administration of Estates Act is not always speedy or inexpensive, and creditors retain their common law rights to enforce claims against deceased estates. 3. The court observed that Ms Wilson’s attempt to act simultaneously in her personal capacity and in her representative capacity as executrix created confusion regarding the nature of the payment.

The judgment reaffirms that a compromise is governed by ordinary principles of offer and acceptance and that an express, immediate rejection of an offer cannot be overridden by the offeree’s subsequent ambiguous conduct in retaining funds, especially where the offeror’s own later conduct contradicts any belief that the debt was extinguished. It also provides important guidance on the application of the Administration of Estates Act 66 of 1965, confirming that courts retain a discretion to allow applicants to supplement founding affidavits with formal, non-contentious facts in the interests of justice, and that execution against a deceased estate under s 30(b) does not require strictly ‘exceptional circumstances’ but rather a balancing of fairness, where inordinate delay and the applicant’s status as a secured creditor with an admitted claim are decisive factors. The case thereby reinforces the rights of secured creditors against administratively delayed estates while maintaining the protective purpose of the statutory claims procedure.