First National Bank v Sterling Industrial Resources CC and Others (218/2017) [2017] ZAFSHC 236 (20 December 2017)

First National Bank v Sterling Industrial Resources CC and Others (218/2017) [2017] ZAFSHC 236 (20 December 2017)

The court finds that there is ambiguity between clause 1 and clause 3 of the suretyship agreement regarding the extent of the third respondent's liability. The dispute cannot be resolved on the papers due to conflicting interpretations and factual disputes. The matter requires oral evidence to determine the true intention of the parties at the time of contracting. The applicant should have foreseen the factual dispute and is ordered to pay wasted costs occasioned by the referral for oral evidence. The case is postponed and enrolled for trial to hear oral evidence on whether the third respondent is liable for the whole amount or only the limited portion specified in clause 3.

Citation
[2017] ZAFSHC 236
Parties
Applicant: Firstrand Bank Limited trading as First National Bank; Respondent: Sterling Industrial Resources CC; Respondent: Johannes Niemand; Respondent: Alec Daniel Sandenbergh
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
20 December 2017
Case Number
218/2017
Procedural Posture
Civil Application / Referral for Oral Evidence After Motion Proceedings
Outcome
The matter is referred for oral evidence to determine the intention of the parties regarding the extent of the third respondent's liability under the suretyship agreement. The applicant is ordered to pay wasted costs occasioned by the referral.
Judges
Legodi JP
Legal Topics
Suretyship, Contractual Interpretation, Motion Proceedings, Oral Evidence, Ambiguity in Contract
Commercial and Corporate Civil Procedure Suretyship Contractual Interpretation Motion Proceedings Oral Evidence Ambiguity in Contract

Case Brief

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Parties

Firstrand Bank Limited trading as First National Bank

Applicant

Sterling Industrial Resources CC

Respondent

Johannes Niemand

Respondent

Alec Daniel Sandenbergh

Respondent

Procedural Posture

Civil Application / Referral for Oral Evidence After Motion Proceedings

Legal Issues

  1. 1 Whether the third respondent is liable as surety for the whole amount owed to the applicant or only for a limited portion as per clause 3 of the suretyship agreement.
  2. 2 Whether the matter can be resolved on motion proceedings or requires oral evidence due to factual disputes and contractual ambiguity.

Ratio Decidendi

The court finds that there is ambiguity between clause 1 and clause 3 of the suretyship agreement regarding the extent of the third respondent's liability. The dispute cannot be resolved on the papers due to conflicting interpretations and factual disputes. The matter requires oral evidence to determine the true intention of the parties at the time of contracting. The applicant should have foreseen the factual dispute and is ordered to pay wasted costs occasioned by the referral for oral evidence. The case is postponed and enrolled for trial to hear oral evidence on whether the third respondent is liable for the whole amount or only the limited portion specified in clause 3.

Court Disposition

The matter is referred for oral evidence to determine the intention of the parties regarding the extent of the third respondent's liability under the suretyship agreement. The applicant is ordered to pay wasted costs occasioned by the referral.

Orders

  • The matter is referred for oral evidence to determine the intention of the parties.
  • The case is postponed and enrolled on the trial roll of the week of 23 April 2018 to hear oral evidence on the intention of the parties, specifically whether the third respondent is liable for the whole amount or only a portion as per clause 3.