R39 Million Vanishes From A Zimbabwean Man FNB Account After He Dies

Barbra Gotora, executor of the estate of Obert Karombe who died in 2022, together with Triple Desire Trading and Projects 246, Honestytrade 327 (Pty) Ltd and Proxivox (Pty) Ltd (in liquidation), sued FirstRand Bank Limited t/a First National Bank in the Gauteng Division, Johannesburg, for payment of about R39 million ($2.38 million).

The plaintiffs allege that after Karombe died, unauthorised debits were made from his accounts and that the bank is liable delictually, alternatively for contractual negligence, for allowing the withdrawals to continue.

The matter came before Justice Du Plessis as an application for summary judgment. Instead of filing a plea, FNB elected to proceed under Rule 32(3)(a) of the Uniform Rules of Court, which allows a defendant to provide security to the satisfaction of the court for any judgment, including costs, that may be granted, to avoid summary judgment. FNB furnished a bank guarantee of R57 million ($3.48 million) as security for any judgment, including interest and taxed costs.

Gotora objected to the guarantee and sought to file a further affidavit, arguing that the amount was insufficient to cover future interest and costs if litigation became protracted, that it required a final unappealable judgment before payment, that it expired after ten years, and that it amounted to a so-called self-guarantee because it was issued by the bank itself.

The court refused to admit the further affidavit, holding that Rule 32(4) limits evidence in summary judgment proceedings to two affidavits and that no exceptional circumstances that could not have been reasonably anticipated had been shown. Reliance on the interests of justice alone, without identified facts, was not enough.

On the adequacy of the security, the court applied the test in Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture and held that Rule 32(3)(a) does not require absolute certainty about what judgment may be granted in future, nor a detailed taxation of projected costs. Security must at minimum cover the amount claimed, and the court must determine whether the amount and form protect the plaintiffs against prejudice.

The court found that the guarantee exceeds the capital amount pursued in summary judgment, constitutes a serious security measure, is a clear and unconditional undertaking by a reputable bank up to the stated maximum, and that Rule 32 does not require security to be provided by a stranger to the transaction. The court also took into account that FNB is a well-resourced litigant and there is no real doubt it can honour the guarantee and cover any reasonable shortfall.

In conclusion, the court held that R57 million ($3.48 million) is adequate to the satisfaction of the court and that the plaintiffs’ contention that it may prove insufficient if litigation is protracted does not justify a finding that the security is inadequate on the facts of this case.

The court refused summary judgment and ordered that costs be costs in the cause, meaning the trial court will decide who pays the costs of the application. The action will now proceed as if no application for summary judgment had been made.