Firstrand Bank Limited v Macroton CC and Others (5541/2014) [2016] ZAKZPHC 2 (5 January 2016)

Firstrand Bank Limited v Macroton CC and Others (5541/2014) [2016] ZAKZPHC 2 (5 January 2016)

The court found that the bank was entitled to judgment against the second and third respondents as sureties and co-principal debtors for the first respondent's debts, following the first respondent's default and breach of the loan and overdraft agreements. The contractual clauses allowing the bank to call up the facilities on demand and upon breach were commercially standard and not contrary to public policy or constitutional values. The bank acted reasonably in terminating the facilities, having given notice and communicated its dissatisfaction with the first respondent's conduct. The respondents failed to establish that reasonable notice was an implied term or that the clauses were...

Citation
[2016] ZAKZPHC 2
Parties
Applicant: Firstrand Bank Limited; Respondent: Macroton CC; Respondent: Jacobus Johannes Andreas van Wyk; Respondent: Martha van Wyk
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
5 January 2016
Case Number
5541/2014
Procedural Posture
Civil Application / Judgment
Outcome
Judgment granted in favour of the applicant against the second and third respondents, jointly and severally; counter-claim dismissed with punitive costs.
Judges
Lopes
Legal Topics
Suretyship, Facility Letter Enforceability, Contractual Termination, Public Policy in Contract, Implied Terms, Punitive Costs
Banking and Finance Civil Procedure Suretyship Facility Letter Enforceability Contractual Termination Public Policy in Contract Implied Terms Punitive Costs

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Parties

Firstrand Bank Limited

Applicant

Macroton CC

Respondent

Jacobus Johannes Andreas van Wyk

Respondent

Martha van Wyk

Respondent

Procedural Posture

Civil Application / Judgment

Legal Issues

  1. 1 Whether the bank was entitled to judgment against the second and third respondents as sureties for the first respondent's debts.
  2. 2 Whether the clauses in the facility letter and general terms and conditions are invalid or unenforceable.
  3. 3 Whether reasonable notice is an implied term in the agreements before termination by the bank.

Ratio Decidendi

The court found that the bank was entitled to judgment against the second and third respondents as sureties and co-principal debtors for the first respondent's debts, following the first respondent's default and breach of the loan and overdraft agreements. The contractual clauses allowing the bank to call up the facilities on demand and upon breach were commercially standard and not contrary to public policy or constitutional values. The bank acted reasonably in terminating the facilities, having given notice and communicated its dissatisfaction with the first respondent's conduct. The respondents failed to establish that reasonable notice was an implied term or that the clauses were...

Court Disposition

Judgment granted in favour of the applicant against the second and third respondents, jointly and severally; counter-claim dismissed with punitive costs.

Orders

  • Judgment is granted in favour of the applicant against the second and third respondents, jointly and severally, the one paying the other to be absolved, in the terms set out in paragraphs 1 and 2 of the Notice of Motion dated 15 April 2014.
  • The second and third respondents' counter-claim is dismissed with costs, such costs to be calculated on the scale as between attorney and client.