Van Der Merwe & Anor v IIG Capital LLC

Van Der Merwe & Anor v IIG Capital LLC

The combination of the extended definition of 'Guaranteed Monies', the 'principal obligor' clause, the obligation to pay on demand, and the conclusive evidence clause in the guarantee are sufficient to displace the strong presumption against primary liability for private individuals. The guarantee imposes a primary obligation on the appellants to pay the amount certified by the lender, and they are contractually bound to pay upon demand without recourse to underlying defences available to the principal debtor.

Parties
Appellant/defendant: Fransina Johanna Van Der Merwe; Appellant/defendant: Gerrit Le Roux Van Der Merwe; Respondent/claimant: IIG Capital LLC
Jurisdiction
England and Wales
Judgment Date
13 November 2007
Procedural Posture
Civil Appeal / Appeal From Summary Judgment
Outcome
appeal dismissed
Legal Topics
Guarantees, Performance Bonds, Conclusive Evidence Clauses, Primary Vs Secondary Liability, Summary Judgment
Contract Law Banking and Finance Guarantees Performance Bonds Conclusive Evidence Clauses Primary Vs Secondary Liability Summary Judgment

Case Brief

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Parties

Fransina Johanna Van Der Merwe

Appellant/defendant

Gerrit Le Roux Van Der Merwe

Appellant/defendant

IIG Capital LLC

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment

Legal Issues

  1. 1 Whether the terms of the guarantee prevent the guarantors from raising defences available to the principal debtor under the loan agreement
  2. 2 Whether the guarantee imposes a primary obligation (akin to a demand bond) or a secondary obligation (suretyship)
  3. 3 Effect of a conclusive evidence clause in a guarantee signed by private individuals

Ratio Decidendi

The combination of the extended definition of 'Guaranteed Monies', the 'principal obligor' clause, the obligation to pay on demand, and the conclusive evidence clause in the guarantee are sufficient to displace the strong presumption against primary liability for private individuals. The guarantee imposes a primary obligation on the appellants to pay the amount certified by the lender, and they are contractually bound to pay upon demand without recourse to underlying defences available to the principal debtor.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed; summary judgment for the respondent stands.