Bulsara v Jordan & Co Ltd (Conshu Ltd) (406/92) [1995] ZASCA 106; 1996 (1) SA 805 (SCA); (21 September 1995)

Bulsara v Jordan & Co Ltd (Conshu Ltd) (406/92) [1995] ZASCA 106; 1996 (1) SA 805 (SCA); (21 September 1995)

The Supreme Court of Appeal held that the deed of suretyship was worded broadly enough to include liability for judgment debts arising from transactions of sale and delivery of goods. The judgment debt obtained against the principal debtor constituted a new and independent cause of action for which Bulsara, as surety, was liable. Prescription in respect of the suretyship debt commenced to run only when the judgment was given against the principal debtor and the amount became liquidated. Summons was served on Bulsara within the three-year prescriptive period applicable to the suretyship debt. Therefore, Bulsara's special plea of prescription could not succeed, and the appeal was dismissed.

Citation
[1995] ZASCA 106
Parties
Appellant: Hamant Bulsara; Respondent: Jordan & Co Ltd (Conshu Ltd)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
21 September 1995
Case Number
406/92
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Division, After Magistrate's Court and Special Plea of Prescription
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Joubert, EM Grosskopf, Van den Heever, Olivier, Scott
Legal Topics
Suretyship, Prescription Act, Judgment Debt, Contract Interpretation
Civil Procedure Commercial and Corporate Suretyship Prescription Act Judgment Debt Contract Interpretation

Case Brief

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Parties

Hamant Bulsara

Appellant

Jordan & Co Ltd (Conshu Ltd)

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape Division, After Magistrate's Court and Special Plea of Prescription

Legal Issues

  1. 1 Whether the judgment debt obtained against the principal debtor created a new cause of action for which the surety was liable.
  2. 2 Whether the creditor's claim against the surety had prescribed under the Prescription Act.
  3. 3 Whether the deed of suretyship covered liability for judgment debts as well as original debts.

Ratio Decidendi

The Supreme Court of Appeal held that the deed of suretyship was worded broadly enough to include liability for judgment debts arising from transactions of sale and delivery of goods. The judgment debt obtained against the principal debtor constituted a new and independent cause of action for which Bulsara, as surety, was liable. Prescription in respect of the suretyship debt commenced to run only when the judgment was given against the principal debtor and the amount became liquidated. Summons was served on Bulsara within the three-year prescriptive period applicable to the suretyship debt. Therefore, Bulsara's special plea of prescription could not succeed, and the appeal was dismissed.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.