Incredible Sand (Pty) Limited v Bucon Development and Construction (Pty) Limited and Another (90421/2016) [2017] ZAGPPHC 430 (2 August 2017)

Incredible Sand (Pty) Limited v Bucon Development and Construction (Pty) Limited and Another (90421/2016) [2017] ZAGPPHC 430 (2 August 2017)

The court held that while Section 6 of the General Law Amendment Act requires the identity of the principal debtor to be embodied in the written contract of suretyship, the principle of incorporation by reference allows for supplementation of the written agreement by extrinsic evidence, provided the reference is clear and the evidence does not relate to prior negotiations. In this case, the suretyship agreement referred to the acknowledgment of debt, which identified the debtor and the amount owed. Both documents were signed on the same date by the same parties. The court found that extrinsic evidence could be admitted to identify the debtor and validate the suretyship agreement. However,...

Citation
[2017] ZAGPPHC 430
Parties
Plaintiff: Incredible Sand (Pty) Limited; Defendant: Bucon Development and Construction (Pty) Limited; Defendant: Anette Vos
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
2 August 2017
Case Number
90421/2016
Procedural Posture
Provisional Sentence Application / First Instance
Outcome
Provisional sentence summons refused with costs.
Judges
Kooverjie
Legal Topics
Suretyship Agreement, Acknowledgement of Debt, Incorporation by Reference, Extrinsic Evidence, Section 6 General Law Amendment Act
Commercial and Corporate Civil Procedure Suretyship Agreement Acknowledgement of Debt Incorporation by Reference Extrinsic Evidence Section 6 General Law Amendment Act

Case Brief

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Parties

Incredible Sand (Pty) Limited

Plaintiff

Bucon Development and Construction (Pty) Limited

Defendant

Anette Vos

Defendant

Procedural Posture

Provisional Sentence Application / First Instance

Legal Issues

  1. 1 Whether the suretyship agreement is void for failing to identify the debtor as required by Section 6 of the General Law Amendment Act.
  2. 2 Whether extrinsic evidence may be admitted to supplement the terms of the suretyship agreement and identify the debtor.
  3. 3 Whether the principle of incorporation by reference applies to the documents in question.

Ratio Decidendi

The court held that while Section 6 of the General Law Amendment Act requires the identity of the principal debtor to be embodied in the written contract of suretyship, the principle of incorporation by reference allows for supplementation of the written agreement by extrinsic evidence, provided the reference is clear and the evidence does not relate to prior negotiations. In this case, the suretyship agreement referred to the acknowledgment of debt, which identified the debtor and the amount owed. Both documents were signed on the same date by the same parties. The court found that extrinsic evidence could be admitted to identify the debtor and validate the suretyship agreement. However,...

Court Disposition

Provisional sentence summons refused with costs.

Orders

  • The provisional sentence summons is refused with costs.