Friedman v Standard Bank of SA Ltd (19327/01) [2002] ZAGPHC 23 (29 August 2002)

Friedman v Standard Bank of SA Ltd (19327/01) [2002] ZAGPHC 23 (29 August 2002)

The applicant provided a reasonable explanation for his default, as the summons was served at an address he no longer occupied. The respondent did not dispute this explanation. The applicant established a bona fide defence by demonstrating that his liability as surety is contingent on compliance with the shareholders and loan agreements, particularly regarding phase 2 of the development. The benefit of excussion was not renounced, and the applicant is entitled to require the respondent to proceed first against the principal debtor. The amount recoverable from the applicant as surety depends on what could have been recovered from the principal debtor at the relevant time, which remains...

Citation
[2002] ZAGPHC 23
Parties
Applicant: Errol John Friedman; Respondent: The Standard Bank of SA Ltd
Court
High Courts - Gauteng
Jurisdiction
South Africa
Judgment Date
29 August 2002
Case Number
19327/01
Procedural Posture
Rescission Application / Application for Rescission of Default Judgment
Outcome
Application for rescission of default judgment granted.
Judges
Willis
Legal Topics
Rescission of Default Judgment, Suretyship, Benefit of Excussion, Shareholders Agreement, Loan Agreement
Civil Procedure Banking and Finance Rescission of Default Judgment Suretyship Benefit of Excussion Shareholders Agreement Loan Agreement

Case Brief

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Parties

Errol John Friedman

Applicant

The Standard Bank of SA Ltd

Respondent

Procedural Posture

Rescission Application / Application for Rescission of Default Judgment

Legal Issues

  1. 1 Whether the applicant has provided a reasonable and acceptable explanation for his default in entering an appearance to defend.
  2. 2 Whether the applicant has established a bona fide defence with a prospect of success to the respondent's claim based on suretyship.
  3. 3 Whether the benefit of excussion applies and affects the applicant's liability as surety given the contractual amendments and conduct of the parties.

Ratio Decidendi

The applicant provided a reasonable explanation for his default, as the summons was served at an address he no longer occupied. The respondent did not dispute this explanation. The applicant established a bona fide defence by demonstrating that his liability as surety is contingent on compliance with the shareholders and loan agreements, particularly regarding phase 2 of the development. The benefit of excussion was not renounced, and the applicant is entitled to require the respondent to proceed first against the principal debtor. The amount recoverable from the applicant as surety depends on what could have been recovered from the principal debtor at the relevant time, which remains...

Court Disposition

Application for rescission of default judgment granted.

Orders

  • The judgment granted on 25 October 2001 against the defendant for payment of R4 750 000, interest, and costs is rescinded.
  • The defendant is granted leave within seven days to enter an appearance to defend the action.