THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 198/2017

In the matter between:

DAVID CARL MOSTERT                                                             FIRST APPELLANT
DAVID CARL MOSTERT NO                                                  SECOND APPELLANT
LEE ANNE ELIZABETH MOSTERT NO                                     THIRD APPELLANT
SANDRA MARGARET MOSTERT NO                                   FOURTH APPELLANT

and

FIRSTRAND BANK LIMITED
t/a RMB PRIVATE BANK                                                         FIRST RESPONDENT
SHERIFF OF THE HIGH COURT                                        SECOND RESPONDENT

Neutral citation:  Mostert v Firstrand Bank t/a RMB Private Bank (198/2017)
[2018] ZASCA 54 (11 April 2018)
Coram:
Shongwe ADP and Van der Merwe JA and Rogers, Hughes and
Schippers AJJA
Heard:
15 March 2018
Delivered:
11  April 2018

Summary:   Debtor and creditor – remedying of default in a credit agreement in
terms of s 129(3) of the National Credit Act 34 of 2005 – s 129(3) requires payment
by or on behalf of the consumer – consumer relied on payments during 2013 and
2015 – not established that 2013 payment settled the arrears – 2015 payments did
settle the arrears but were not made by or on behalf of the consumer.
___________________________________________________________________

ORDER

On appeal from: Western Cape Division, Cape Town (Gamble J sitting as court of
first instance):
1 The appeal is dismissed.
2 The appellants are directed to pay the costs of the appeal on the scale of attorney
and own client, including the costs of two counsel, jointly and severally.

JUDGMENT

Van der Merwe JA (Shongwe ADP and Rogers, Hughes and Schippers AJJA
concurring)

[1] The first appellant is Mr David Carl Mostert. Mr Mostert and the third and
fourth appellants are the trustees of the Carpe Diem Trust IT561/1991 (the Trust).
The Trust is the owner of Erf 382, Bishopscourt, Cape Town (the property). The first
respondent, Firstrand Bank Limited t/a RMB Private Bank (RMB), obtained a
judgment in the Western Cape Division in terms of which the property was declared
specially executable. The second respondent, the sheriff of the Western Cape
Division (the sheriff), did not participate in the litigation relevant to the appeal.
The property is quite valuable (during August 2013 it was valued at R40 million) and
is the residence of Mr Mostert and his wife and family. The question in the appeal is
whether RMB should be prohibited from taking steps to execute the judgment in
respect of the property.

Background
[2] During March 2005 Mr Mostert and RMB entered into a written loan
agreement. In terms of the loan agreement RMB advanced the amount of
R20 million to Mr Mostert. This amount, together with agreed interest thereon, had to

be repaid over a period of 240 months at a rate of R176 742.14 per month. In terms
of the loan agreement the loan was inter alia to be secured by suretyships and a
mortgage bond over the property. In compliance herewith the Trust, New Port
Finance Company (Pty) Ltd (New Port) and a company now known as TPC
Marketing (Pty) Ltd (the sureties), each bound themselves jointly and severally as
surety and co-principal debtor in solidum for payment of all sums of money owing by
Mr Mostert to RMB. The suretyship of the Trust was supported by the registration of
a first mortgage bond in the amount of R30 million over the property in favour of
RMB. The loan agreement was amended in writing on several occasions, mainly in
respect of the amount of the loan and the monthly repayments. The last amendment
of the loan agreement was effected on 30 March 2007. In terms thereof the amount
of the loan was increased to R30 million and the repayment (over the remaining
period of 216 months) increased to the considerable sum of R311 235.06 per month.

[3] Mr Mostert failed to make payment in terms of the loan agreement. As a
result, during December 2009, RMB issued summons in the Western Cape Division
against Mr Mostert and the sureties, for payment of the full outstanding balance of
the loan, interest and costs. On 3 March 2010 a written settlement agreement was
entered into between RMB, Mr Mostert and the sureties. This agreement provided
for specified payments, which had to settle the arrears in terms of the loan
agreement by 1 March 2011. This agreement further provided that Mr Mostert would
cede all his shares in CSHELL 374 (Pty) Ltd (CSHELL) to RMB and would sign a
special power of attorney authorizing RMB to sell the shares in the event of default of
the settlement agreement.

[4] The settlement agreement was not complied with. RMB consequently brought
an application for default judgment against Mr Mostert and the sureties.
The application was opposed and answering and replying affidavits were filed.
On 12 September 2011, the Western Cape Division granted judgment against
Mr Mostert and the sureties jointly and severally for payment of the sum of
R33 625 364.58, interest thereon at a rate 11,75 per cent per annum from
12 November 2009 to date of payment and costs as between attorney and own
client. In addition, as I have said, the property was declared specially executable.

[5] On the same day Mr Mostert undertook to make payment of the amount of
R1 million by the end of September 2011 and to make quarterly payments of
R500 000 each until the arrears in respect of the loan agreement were settled.
The undertaking clearly envisaged that payment in accordance therewith would take
place in addition to the monthly instalments payable in terms of the loan agreement.
As a result of the undertaking RMB held execution of the judgment in abeyance.

[6] But Mr Mostert did not keep to his undertaking. He only made payment of the
amount of R920 000 in respect of his undertaking to pay R1 million by the end of
September 2011. He failed to make any payment in respect of the quarterly
payments of R500 000 each that he had promised would take place on
30 June 2012 and 30 September 2012. When RMB thereafter informed Mr Mostert
of its intention to have the property sold in execution, Mr Mostert took the stance that
RMB had lost the right to execute the judgment. He alleged that during
September 2011 RMB had agreed: (i) that he be granted the opportunity to settle the
arrears in respect of the loan agreement by inter alia making payments in
accordance with his undertaking and (ii) that once the arrears were paid RMB would
not be entitled to rely on the judgment and in case of default, had to commence legal
proceedings afresh. He further alleged that the arrears were settled ‘. . . during or
about June 2013’. He therefore contended that RMB was not entitled to execute the
judgment. During May 2014 Mr Mostert and the Trust (the appellants) instituted an
action in the Western Cape Division against RMB and the sheriff. Relying essentially
on the aforesaid allegations, the appellants claimed an order declaring that RMB is
not entitled to sell the property in execution.

[7] RMB, however, persisted in the contention that it was entitled to proceed with
the sale of the property. This was finally conveyed by RMB’s attorneys to
Mr Mostert’s attorneys in a letter dated 15 December 2015. In support of RMB’s
stance the letter inter alia stated that no payments had been made by Mr Mostert or
the Trust in respect of the judgment debt since August 2013. This prompted the
present application, which was launched by the appellants against RMB and the
sheriff during February 2016. In the founding affidavit the appellants essentially
relied on the allegations referred to above, namely that the agreement reached with
RMB during September 2011 and the compliance therewith by the settling of the

arrears by about June 2013, precluded execution of the judgment. In response only
to the allegation in the letter of 15 December 2015 that no payments had been made
since August 2013, it was stated in the founding affidavit that payments totaling
R7 739 476.40, representing the proceeds of the sale of shares in CSHELL, were
made to RMB during 2015.

[8] In the notice of motion the appellants claimed an interim interdict prohibiting
the sale in execution of the property pending the final determination of their 2014
action. In the alternative, and in the event that the court should determine that the
merits of RMB’s entitlement to execution of the judgment fell to be determined in the
application (rather than the 2014 action), they claimed an order declaring that neither
RMB nor the sheriff ‘. . .is permitted to take any further steps in regard to the
execution or disposal’ of the property. In addition, in view of the factual disputes
between the parties evidenced by the correspondence between the respective
attorneys, they claimed an order referring the matter for oral evidence. In effect
therefore, the alternative relief claimed was also of temporary nature, pending
determination of the alleged agreement of September 2011 by oral evidence.

[9] In the answering affidavit RMB denied the alleged agreement of September
2011 and the alleged payment of the arrears. In order to displace the impression that
Mr Mostert diligently adhered to his payment obligations, RMB attached a schedule
to the answering affidavit reflecting the installments due in terms of the loan
agreement and the amounts actually paid during the period from 30 September 2011
to 29 February 2016 (the schedule). The schedule reflected that an amount of
R925 181.00 had been paid on 31 May 2013 (the 2013 payment). RMB also
acknowledged receipt of the aforesaid payments during 2015, that is the amount of
R3 178 554.94 on 31 March 2015 and the amount of R4 million on
30 September 2015 (the 2015 payments), but pointed out that both these payments
were made by New Port. In the replying affidavit the appellants alleged, for the first
time, that the loan agreement had been reinstated in terms of s 129(3) of the
National Credit Act 34 of 2005 (the NCA) as a result of payments made during 2013
or the 2015 payments.

[10] The court a quo (Gamble J) correctly considered the matter on the basis that
interim relief was claimed. He analyzed the evidence and concluded that the
appellants did not prima facie establish the alleged agreement of September 2011.
Therefore the appellants did not show the first requirement for an interim interdict. In
its judgment the court a quo stated that it was common cause that by mid-2013 the
outstanding arrears due to RMB had been settled, but did not consider the
reinstatement of the loan agreement as a result thereof. In respect of the question
whether the 2015 payments remedied the default in the loan agreement in terms of
s 129(3), the court held that the point was raised only in the replying affidavit and
could not be relied upon by the appellants and that, in any event, the 2015 payments
were not made by the consumer as required by s 129(3). It consequently dismissed
the application with costs on the scale of attorney and client including the costs of
two counsel where so employed, such costs to be borne by the appellants jointly and
severally. The court a quo subsequently granted leave to the appellants to appeal to
this court.

[11] In this court the appellants abandoned any reliance on the alleged agreement
of September 2011. They contended that the loan agreement had been reinstated as
a result of the 2013 payment or that the 2015 payments remedied the default and
that the Trust was entitled to rely on s 129(3) to resist execution of the judgment
against it. The appellants asked that the order of the court a quo be replaced with a
final order declaring that RMB is not permitted to execute the judgment in respect of
the property.

[12] On behalf of RMB it was submitted that the reliance on s 129(3) was
impermissibly raised only in the reply and that the appeal should be dismissed for
that reason alone. On the merits RMB argued that it had not been established that
the 2013 payment settled the arrears. RMB conceded that the 2015 payments had
settled the arrears in terms of the loan agreement. However, it argued that the 2015
payments were not made by Mr Mostert. Therefore, so it was contended, the 2015
payments did not remedy the default in terms of s 129(3) and that even if they did,
RMB’s rights to execute against the Trust were not affected.

New case in reply
[13] It is trite that in motion proceedings the affidavits constitute both the pleadings
and the evidence. As a respondent has the right to know what case he or she has to
meet and to respond thereto, the general rule is that an applicant will not be
permitted to make or supplement his or her case in the replying affidavit.
This, however, is not an absolute rule. A court may in the exercise of its discretion in
exceptional cases allow new matter in a replying affidavit. See the oft-quoted dictum
in Shephard v Tuckers Land and Development Corporation (Pty) Ltd (1) 1978 (1) SA
173 (W) at 177G-178A and the judgment of this court in Finishing Touch 163 (Pty)
Ltd v BHP Billiton Energy Coal South Africa Ltd & others [2012] ZASCA 49; 2013 (2)
SA 204 (SCA) para 26. In the exercise of this discretion a court should in particular
have regard to: (i) whether all the facts necessary to determine the new matter
raised in the replying affidavit were placed before the court; (ii) whether the
determination of the new matter will prejudice the respondent in a manner that could
not be put right by orders in respect of postponement and costs; (iii) whether the new
matter was known to the applicant when the application was launched; and (iv)
whether the disallowance of the new matter will result in unnecessary waste of costs.

[14] I now consider whether the appeal should be dismissed for the sole reason
that the appellants raised reinstatement of the loan agreement only in reply.
It appears that only after the judgment of the Constitutional Court in Nkata v
Firstrand Bank Ltd [2016] ZACC 12; 2016 (4) SA 257 (CC), did the appellants
contend that the loan agreement had been reinstated despite the fact that judgment
had been granted and the property declared specially executable. I do not think that
that was unreasonable or indicative of carelessness. Apart from an obiter dictum in
Nedbank v Fraser [2011] ZAGPJHC 35; 2011 (4) SA 363 (GSJ) paras 39-42, this
meaning of s 129(3) and 129(4) was explained only in the judgment that went on
appeal in Nkata, reported as Nkata v Firstrand Bank Limited & others [2014]
ZAWCHC 1; 2014 (2) SA 412  (WCC).

[15] The appellants did not raise new facts in their replying affidavit. What they
said in reply was that the payments referred to in the founding affidavit had
reinstated the loan agreement by operation of law. RMB did not apply for the striking
out of the new matter in the replying affidavit, nor did it seek leave to file further

affidavits. On the contrary, RMB fully argued the merits of the matter in the court a
quo and in this court. Importantly, RMB did not at any stage indicate that it had been
prejudiced in any manner. I think that it is fair to say that counsel for RMB did not
press this argument. In my view the merits of the matter can properly be determined
on the evidence on record. Whether that evidence is sufficient to sustain the relief
claimed, is of course another matter, to which I shall return. A consideration that
weighs heavily with me is that the parties have since 2009 been involved in
protracted litigation in respect of the same subject matter, no doubt at considerable
expense. In my view it is in the interests of justice that the litigation between the
parties proceed to finalization. In the exercise of the discretion of this court in the
exceptional circumstances of this case, I conclude that the applicability of s 129(3)
should be considered in respect of the 2013 payment and the 2015 payments.

The 2013 payment
[16] In this regard it must in the first place be emphasized that the appellants now
seek final relief in motion proceedings. Therefore, where there is a dispute of fact on
the papers, the version of RMB must be accepted unless it is clearly untenable,
farfetched or could for some other reason be rejected out of hand.

[17] In respect of payment of the arrears during 2013, Mr Mostert said only the
following in the founding affidavit:
’30. I complied with the terms of the 2011 settlement agreement in 2011 and 2012, resulting
in the payment of the outstanding arrears and the revival of the original loan agreements
during or about June 2013. The First Respondent consequently reverted thereafter to
charging the pre-default interest rate under the loan agreements.’
Mr Mostert placed no evidence before the court in respect of what the amount in
arrears then was, what payments were made to settle the arrears and when they
were made. Not even in the replying affidavit did he do so, despite the fact that the
schedule reflected the 2013 payment.

[18] As I have said, RMB pointed out in the answering affidavit that Mr Mostert
failed to settle the arrears inter alia because he only paid the amount of R920 000 at
the end of September 2011 and did not pay the amount of R500 000 in terms of his
undertaking on both 30 June 2012 and 30 September 2012. RMB denied the

allegation that the arrears had been paid and denied that it reverted to the pre-
default interest rate as a result of payment during 2013. In amplification it mentioned
the possibility that its system may have read the 2015 payments as having settled
the arrears. In the circumstances RMB’s answer can hardly be described as a bare
denial and can certainly not be rejected on the papers. It also follows that the
statement by the court a quo that it was common cause that the arrears had been
settled by mid-2013 was clearly wrong and probably made per incuriam.

[19] In argument the appellants attempted to show that an analysis of the schedule
indicated that the 2013 payment had settled the arrears. But the schedule did not
deal with arrear amounts, it only reflected the instalments due and the payments
made during the period that it covered. At best for the appellants, the dictum of
Botha JA in Administrator, Transvaal & others v Theletsane & another [1990]
ZASCA 156; 1991 (2) SA 192 AD at 197D is applicable:
‘It is clear, in my view, that the room for deciding matters of fact on the basis of what is
contained in a respondent’s affidavits, where such affidavits deal equivocally with facts which
are not put forward directly in answer to the factual grounds for relief on which the applicant
relies, if it exists at all, must be very narrow indeed.’

[20] In the result the appellants failed to show that the 2013 payments settled the
arrears. It follows that it is not necessary to consider whether there was a duty on the
appellants to deal with the question whether RMB had demanded payment of its
prescribed default administration charges or of the reasonable costs of enforcing the
loan agreement up to 31 May 2013.

The 2015 payments
[21] As I have said, RMB conceded that the 2015 payments had settled the
arrears. In respect of the 2015 payments the papers are also silent on the question
of default administration charges and reasonable costs of enforcement. On the view
that I take of the matter, it is not necessary to delve into these aspects.

[22] The next question is whether a default in a credit agreement may be remedied
by payment that was not made by or on behalf of the consumer in respect of that
credit agreement. The answer must of course be found in the interpretation of s

129(3). It is trite that that exercise requires giving meaning to the words used in this
section within the broad context in which they were used. The context includes the
overarching aims of the NCA, and the purpose of s 129(3) within the context of s 129
as a whole.

[23] Section 129(1) and (3) provide:
‘129
Required procedures before debt enforcement
(1) If the consumer is in default under a credit agreement, the credit provider —
(a) may draw the default to the notice of the consumer in writing and propose that the
consumer refer the credit agreement to a debt counsellor, alternative dispute resolution
agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any
dispute under the agreement or develop and agree on a plan to bring the payments under
the agreement up to date; and
(b) subject to section 130 (2), may not commence any legal proceedings to enforce the
agreement before —
(i) first providing notice to the consumer, as contemplated in paragraph (a), or in section 86
(10), as the case may be; and
(ii) meeting any further requirements set out in section 130.
(2) . . .
(3) Subject to subsection (4), a consumer may at any time before the credit provider has
cancelled the agreement, remedy a default in such credit agreement by paying to the credit
provider all amounts that are overdue, together with the credit provider’s prescribed default
administration charges and reasonable costs of enforcing the agreement up to the time the
default was remedied.’

[24] The core objective of the NCA is the protection of consumers by securing a
credit market that is fair and equitable. The means by which it seeks to do so is by
balancing the respective rights and responsibilities of credit providers and
consumers. In line herewith it has been held that the correct interpretation of s 129 of
the NCA is one that strikes an appropriate balance between the competing interests
of the parties to a credit agreement. The purpose of s 129(1) is to ensure that the
attention of the consumer is drawn to the default under the credit agreement and to
advise the consumer of the options that he or she may utilize to remedy the default.
Thus, the aim of s 129(1) is to facilitate consensual resolution of credit agreement
disputes. See Sebola & another v Standard Bank of South Africa Ltd & another

[2012] ZACC 11; 2012 (5) SA 142 (CC) paras 40 and 46; Kubyana v Standard Bank
of South Africa Ltd [2014] ZACC 1; 2014 (3) SA 56 (CC) paras 19-23; Nkata
paras 53 and 92-98.

[25] The language of s 129(3) is clear. I find nothing in the context thereof that
justifies departure from the clear meaning of the words of s 129(3). On the contrary,
it fits neatly into the scheme and purpose of the NCA and s 129. Section 129(3)
provides a novel and extraordinary remedy (Nkata paras 100 and 142) only to a
consumer who is in default in respect of a credit agreement to which he or she is a
party. I believe that that is why Moseneke DCJ said the following in Nkata
(para 104):
‘At the outset, I observe that ss 129(3) and (4) start with what a consumer may and may not
do. It is the consumer who may reinstate a credit agreement. This she may do “any time
before the credit provider [cancels] the agreement”. So, as long as the agreement is current,
she may elect to reinstate it. The clear import is that for purposes of reinstatement the
consumer is the protagonist. She may disclose her design to the credit provider but she is
not compelled to give notice to or seek the consent or cooperation of the credit giver.’

[26] Payment in terms of s 129(3) may of course be made on behalf of the
consumer. Payment accepted on behalf or in the name of the consumer is equal to
payment by the consumer in person. But when payment is not thus made by the
consumer, it falls outside the scope of s 129(3). This accords with what I have said
before. When payment of arrears does not emanate from the consumer’s bona fide
effort to resolve the default, but from the credit provider having had to enforce rights
against a third party, the consumer is not deserving of the protection of s 129(3).

[27] The common law tells us how a payment by a third party is made on behalf of
a debtor. In The Law of Contract in South Africa, 2nd edition, volume II, Sir John
Wessels said at 606:
‘2133.  By the Civil Law, however, a creditor is not as a rule entitled to refuse payment from
a third party where it makes no difference to him by whom the contract is performed,
provided the performance is effective and in terms of the contract (Vinnius, ad Inst., 3.30pr.,
n.9; Pothier, Oblig., ss. 464, 494).
2134.  It must, however, be quite clear that the third party makes the payment for the benefit
of the debtor (Van Leeuwen, Cens. For., 1.4.32.3).’

In Commissioner for Inland Revenue v Visser  1959 (1) SA 452 (AD) the court
explained at 457H-458A that when the payment in that matter was made, the person
making the payment clearly professed to pay on behalf of another and in the latter’s
name and that the payment was accepted as having been so made. The court
proceeded to say:
‘The effect of such a payment may be gathered from the following passage in Part III, Chap.
1, art. 1 of Pothier’s Obligations (I quote from Evans’ translation at p. 330):

“It is not essential to the validity of the payment, that it be made by the debtor, or any
person authorised by him; it may be made by any person without such authority, or even in
opposition to his orders, provided it is made in his name, and in his discharge, and the
property is effectually transferred; it is a valid payment, it includes the extinction of the
obligation, and the debtor is discharged even against his will . . .”
Grotius, 3.39.10; Voet, 46.3.1 and van Leeuwen, Censura Forensis, 1.4.32.3, are to the
same effect.’
See also Absa Bank Ltd v Moore & another [2016] ZACC 34; 2017 (1) SA 255 (CC),
where Cameron J said (para 33) that our common-law jurisprudence and case law
hold that ‘. . . a debt paid by a third party in the name  of the debtor extinguishes the
debt, even when payment is unauthorised, or even when the debtor opposes it.’ (my
emphasis). The position is succinctly stated in GB Bradfield, Christie’s Law of
Contract in South Africa, 7th edition (2016) p 471, namely that ‘. . . a third party may
intervene and validly perform with or without the knowledge of the debtor and even
against the debtor’s will, provided the third party makes clear that it is performing in
the name and on behalf of the debtor.’

[28] The definition of ‘consumer’ in s 1 of the NCA includes a guarantor under a
credit guarantee. A credit guarantee is a credit agreement that meets all the criteria
set out in s 8(5). It suffices to say that s 8(5) includes a suretyship in respect of the
obligations in terms of a credit facility or credit transaction. Thus, a surety is a
consumer in respect of the credit agreement to which he or she is a party, that is the
suretyship. In terms of s 4(2)(c) the NCA applies to a credit guarantee only to the
extent that it applies to a credit facility or credit transaction in respect of which the
credit guarantee is granted. A surety may thus remedy a default in respect of the
suretyship in terms of s 129(3). The surety is not, however, a consumer in respect of
the credit agreement in respect of which the suretyship was granted. The surety may

make payment of arrears on behalf of the consumer but that will not always be the
case.

[29] The following is what happened on the facts on which this matter has to be
determined. Mr Mostert was the holder of shares in CSHELL. Mr Mostert and RMB
are in agreement that the shares were ‘pledged’ to RMB as security for the loan
agreement. It does not appear from the papers whether this means that the
aforesaid documents referred to in the 2010 settlement agreement were executed,
but in my view nothing turns hereon. What is clear, however, is that Mr Mostert
pledged the shares to RMB in consequence of the 2010 settlement agreement.
On the evidence that I have to accept, Mr Mostert was in arrears in respect of the
loan agreement at all times between the 2010 settlement agreement and the 2015
payments. Thus, at a time when he was in arrears in respect of the loan agreement,
Mr Mostert transferred the shares to New Port. This took place without the
knowledge or consent of RMB. Only when CSHELL was in the process of buying
back the shares from New Port did it come to the attention of RMB that Mr Mostert
had disposed of the shares. A buy-back agreement between CSHELL and New Port
was subsequently recorded in writing.

[30] RMB insisted that New Port cede the proceeds of the sale of the shares to
CSHELL to it on an out and out basis. It is common cause that the 2015 payments
were made by New Port and that they represented the proceeds of the sale of the
shares to CSHELL. Although a written out and out cession agreement between New
Port and RMB was only finalised during October 2015, there can be little doubt that
the 2015 payments were made only because of RMB’s conduct in following up its
security. In the result the 2015 payments were not made on behalf or in the name of
Mr Mostert. In fact, they were not even made pursuant to New Port’s obligation as a
surety. Because of RMB’s insistence New Port simply paid the proceeds of the sale
of the pledged shares directly to RMB. It follows that the 2015 payments did not
remedy Mr Mostert’s default in the loan agreement. It also follows that it is not
necessary to consider the question whether remedying of the default would have
inured to the benefit of the Trust.

[31] In the result the appeal must fail. Mr Mostert and the Trust are liable to pay
costs on the scale of attorney and own client, in terms of the loan agreement and the
suretyship respectively, and the latter provides for liability in solidum.

[32] The following order is made:
1 The appeal is dismissed.
2 The appellants are directed to pay the costs of the appeal on the scale of attorney
and own client, including the costs of two counsel, jointly and severally.

_________________________
C H G van der Merwe
Judge of Appeal

APPEARANCES
For Appellant:

R G Goodman SC, with him G Quixley

Instructed by:

Taylor Incorporated, Cape Town

Webbers Attorneys, Bloemfontein

For  First Respondent:
B J Manca SC, with him  J E Smit

Instructed by:

Werksmans Attorneys, Johannesburg

Symington & De Kok, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

11 April 2018

STATUS

Immediate

Mostert v Firstrand Bank t/a RMB Private Bank (198/2017) [2018]
ZASCA 54 (11 April 2018)

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal.

The first appellant, Mr David Carl Mostert, and the first respondent Firstrand
Bank Limited t/a RMB Private Bank (RMB), entered into a loan agreement in
terms of which RMB lent and advanced the amount of R30 million to
Mr Mostert. The loan had to be repaid in monthly instalments. The second,
third and fourth appellants, the trustees of the Carpe Diem Trust (the Trust),
bound the Trust to RMB as surety and co-principal debtor for the due
compliance by Mr Mostert of his obligations in terms of the loan agreement.
The Trust also registered a first mortgage bond over its property situated at
Bishopscourt, Cape Town (the property) in favour of RMB. The property is the
residence of Mr Mostert and his family.

Mr Mostert failed to comply with his obligations in terms of the loan
agreement. RMB consequently obtained judgment against Mr Mostert and the
Trust for the full outstanding balance in terms of the loan agreement and the

property was declared specially executable. The appellants brought an
application in the Western Cape Division, Cape Town, for an order prohibiting
RMB to execute the judgment against the property. The Western Cape
Division dismissed the application and the appellants appealed to the
Supreme Court of Appeal (SCA).

The appellants contended that the loan agreement had been reinstated in
terms of s 129(3) of the National Credit Act 34 of 2005 (the Act) by payment of
the arrears in terms of the loan agreement on 31 May 2013 (the 2013
payment) or during 2015 (the 2015 payments). RMB denied that the 2013
payment had settled the arrears but admitted that the 2015 payments had
done so. The 2015 payments were, however, made by a third party. The 2015
payments constituted the proceeds of shares which Mr Mostert had pledged
to RMB as security, but had disposed of without the knowledge and consent
of RMB. The third party sold the shares but paid the proceeds thereof to RMB,
only because of RMB’s insistent conduct in following up its security. The
appeal raised three issues:
(i)
Whether the appellants should be permitted to rely on s 129(3) of the
NCA for the first time in reply;
(ii)
Whether the 2013 payment had settled the arrears in terms of the loan
agreement; and
(iii)
Whether the 2015 payments remedied Mr Mostert’s default within the
meaning of s 129(3) of the NCA.

Today the SCA dismissed the appeal. It held that in the exceptional
circumstances of the case it was in the interests of justice to permit the
appellants to rely on the case made only in reply. It held that it was not shown
that the 2013 payment had settled the arrears. The SCA interpreted s 129(3)
of the NCA in its context and concluded that the remedying of a default in a
credit agreement in terms thereof takes place only by payment made by or on
behalf of the consumer. As the 2015 payments were not made by or on behalf
of Mr Mostert, but resulted from RMB’s enforcement of its rights against a
third party, they did not remedy his default. The SCA therefore held that the

Western Cape Division correctly dismissed the appellants’ application to
prevent execution of the judgment in respect of the property.

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