Court explains why Nedbank won R15 million surety case
Nedbank recently secured a victory in the Western Cape High Court as the appeal lodged by Moussa Baba was dismissed. The court reaffirmed that Baba remains liable for a R15 million property loan he guaranteed.
A Surety’s Commitment
When Bestinver Company South Africa purchased a property in Hyde Park, it took out a R15 million loan from Nedbank. Moussa Baba signed as surety—and co‑principal debtor—to support the loan. However, Bestinver defaulted on its repayments in 2020. As a result, the surety agreement triggered Baba’s responsibility for the outstanding loan, plus interest and legal costs.
Dispute Over Trust Account Payment
In his appeal, Baba contended that the loan should have been extinguished because R14 million had been deposited into Nedbank’s attorneys’ trust account. This payment, originating from Elite Vision (a Baba‑family company), was meant to cover the purchase price. The sale fell through—due to delays in FICA documentation and the withdrawal of the liquidators—yet the funds remained in the trust account.
Baba argued that this deposit should have released him from his surety obligations. However, the court disagreed. It ruled that, once Bestinver defaulted, Nedbank was entitled to call on the guarantee immediately. The mere existence of funds in trust did not offset Baba’s liability.
Court Decision
The judge determined there was no reasonable prospect that Baba’s appeal would succeed. Consequently, the leave to appeal was refused, upholding the original ruling. Baba is required to repay the full R15 million, along with accrued interest and attorney‑and‑client costs.
This ruling highlights the seriousness with which South African courts treat surety agreements. Guarantees are strictly enforced—not only is the principal amount recoverable, but so are interest and legal fees. Even significant deposits into trust cannot negate a legally binding surety once a default has occurred.
For those involved in property financing, this case underscores the importance of understanding the full weight of any surety commitments and the potential ramifications should the primary debtor default.