Bechis v ABSA Insurance Company Limited (21730/19) [2023] ZAGPJHC 172 (20 February 2023)

Bechis v ABSA Insurance Company Limited (21730/19) [2023] ZAGPJHC 172 (20 February 2023)

The court found that the guarantee had not expired and the claim had not prescribed, as the necessary steps to trigger deemed completion under the JBCC agreement were not taken by the contractor. The guarantee is independent of the JBCC agreement, and the defendant, not being a party to the JBCC agreement, cannot rely on its deeming provisions. The plaintiff complied with all requirements under both clause 5.2 and clause 4 of the guarantee, making valid demands within the prescribed period. The defendant failed to establish fraud, as there was no evidence of bad faith or material misrepresentation by the plaintiff. The guarantee constitutes a liquid document as per its terms and relevant...

Citation
[2023] ZAGPJHC 172
Parties
Plaintiff: Luca Bechis; Defendant: ABSA Insurance Company Limited
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
20 February 2023
Case Number
21730/19
Procedural Posture
Provisional Sentence Action / Final Judgment
Outcome
Provisional sentence granted in favour of the plaintiff for the amount claimed.
Judges
D Dosio
Legal Topics
Performance Guarantee, Liquid Document, Prescription, Fraud Exception, Construction Contracts
Commercial and Corporate Civil Procedure Performance Guarantee Liquid Document Prescription Fraud Exception Construction Contracts

Case Brief

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Parties

Luca Bechis

Plaintiff

ABSA Insurance Company Limited

Defendant

Procedural Posture

Provisional Sentence Action / Final Judgment

Legal Issues

  1. 1 Whether the construction guarantee had expired and the claim prescribed.
  2. 2 Whether the plaintiff's claim under the guarantee was fraudulent.
  3. 3 Whether claims under clauses 4 and 5 of the guarantee are mutually exclusive.

Ratio Decidendi

The court found that the guarantee had not expired and the claim had not prescribed, as the necessary steps to trigger deemed completion under the JBCC agreement were not taken by the contractor. The guarantee is independent of the JBCC agreement, and the defendant, not being a party to the JBCC agreement, cannot rely on its deeming provisions. The plaintiff complied with all requirements under both clause 5.2 and clause 4 of the guarantee, making valid demands within the prescribed period. The defendant failed to establish fraud, as there was no evidence of bad faith or material misrepresentation by the plaintiff. The guarantee constitutes a liquid document as per its terms and relevant...

Court Disposition

Provisional sentence granted in favour of the plaintiff for the amount claimed.

Orders

  • Provisional sentence is granted in favour of the plaintiff to the amount of R1 120 007.70.
  • The defendant is to pay the costs.