Frans Jacobus Kruger h/a Kruger Attorneys v Property Lawyer Services (Edms) Bpk (420/2010) [2011] ZASCA 80 (27 May 2011)

Frans Jacobus Kruger h/a Kruger Attorneys v Property Lawyer Services (Edms) Bpk (420/2010) [2011] ZASCA 80 (27 May 2011)

The Supreme Court of Appeal held that the letter of undertaking furnished by the appellant was not an independent obligation to pay the respondent regardless of the availability of sale proceeds. Instead, the undertaking was to pay the respondent from the proceeds of the sale of the properties upon registration of transfer. The factual context and the wording of the undertaking, as well as the bridging request and mandate to pay, made it clear that payment was conditional upon the receipt of sale proceeds. The cession of proceeds by the client to the respondent further reinforced that payment was to be made only from those proceeds. Since the sales of the company’s properties left a...

Citation
[2011] ZASCA 80
Parties
Appellant: Frans Jacobus Kruger h/a Kruger Attorneys; Respondent: Property Lawyer Services (Edms) Bpk
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 May 2011
Case Number
420/2010
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal upheld; order of the court below set aside and replaced with dismissal of the application against the appellant with costs.
Judges
Mpati, Brand, Lewis, Malan, Tshiqi
Legal Topics
Bridging Finance, Construction of Undertaking, Credit Guarantee, National Credit Act, Cession of Proceeds
Commercial and Corporate Civil Procedure Bridging Finance Construction of Undertaking Credit Guarantee National Credit Act Cession of Proceeds

Case Brief

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Parties

Frans Jacobus Kruger h/a Kruger Attorneys

Appellant

Property Lawyer Services (Edms) Bpk

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the letter of undertaking constituted an independent obligation or was accessory to the underlying bridging finance transaction.
  2. 2 Whether the undertaking was enforceable given alleged non-compliance with the National Credit Act 34 of 2005.
  3. 3 Whether payment was to be made regardless or only from the proceeds of the sale of the properties.

Ratio Decidendi

The Supreme Court of Appeal held that the letter of undertaking furnished by the appellant was not an independent obligation to pay the respondent regardless of the availability of sale proceeds. Instead, the undertaking was to pay the respondent from the proceeds of the sale of the properties upon registration of transfer. The factual context and the wording of the undertaking, as well as the bridging request and mandate to pay, made it clear that payment was conditional upon the receipt of sale proceeds. The cession of proceeds by the client to the respondent further reinforced that payment was to be made only from those proceeds. Since the sales of the company’s properties left a...

Court Disposition

Appeal upheld; order of the court below set aside and replaced with dismissal of the application against the appellant with costs.

Orders

  • The appeal is upheld with costs including the costs of two counsel.
  • The order of the court below is set aside and replaced by: 'The application against the first respondent is dismissed with costs.'