HNR Properties CC and Another v Standard Bank of SA Ltd (485/02) [2003] ZASCA 135; [2004] 1 All SA 486 (SCA); 2004 (4) SA 471 (SCA) (28 November 2003)

HNR Properties CC and Another v Standard Bank of SA Ltd (485/02) [2003] ZASCA 135; [2004] 1 All SA 486 (SCA); 2004 (4) SA 471 (SCA) (28 November 2003)

The Supreme Court of Appeal held that the facilities letter of 20 April 1998 did not constitute a written release of the appellants as sureties within the meaning of clause 15 of the deeds of suretyship. The letter made no reference to the existing suretyships or their release, and the security referred to was proposed, not existing. The evidence did not establish any intention on the part of the bank to release the appellants, and only the credit division had authority to do so, which was not exercised. The court further held that waiver, estoppel, and the reliance theory of contract could not override the express requirement for written release and the non-variation clause in clause 16....

Citation
[2003] ZASCA 135
Parties
Appellant: HNR Properties CC; Appellant: Another; Respondent: Standard Bank of SA Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 November 2003
Case Number
485/02
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed with costs.
Judges
Scott, Navsa, Nugent, Lewis, Motata
Legal Topics
Suretyship, Release of Surety, Non Variation Clause, Waiver, Estoppel, Reliance Theory of Contract
Banking and Finance Civil Procedure Suretyship Release of Surety Non Variation Clause Waiver Estoppel Reliance Theory of Contract

Case Brief

Summary, issues, holding and outcome

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Parties

HNR Properties CC

Appellant

Another

Appellant

Standard Bank of SA Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the facilities letter of 20 April 1998 constituted a written release of the appellants as sureties within the meaning of clause 15 of the deeds of suretyship.
  2. 2 Whether the appellants were released by virtue of waiver, estoppel, or the reliance theory of contract despite the requirement for written release.
  3. 3 Whether the conduct of the bank or its representatives amounted to a release of the sureties.

Ratio Decidendi

The Supreme Court of Appeal held that the facilities letter of 20 April 1998 did not constitute a written release of the appellants as sureties within the meaning of clause 15 of the deeds of suretyship. The letter made no reference to the existing suretyships or their release, and the security referred to was proposed, not existing. The evidence did not establish any intention on the part of the bank to release the appellants, and only the credit division had authority to do so, which was not exercised. The court further held that waiver, estoppel, and the reliance theory of contract could not override the express requirement for written release and the non-variation clause in clause 16....

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.