Langston Clothing (Properties) CC v Danco Clothing (Pty) Ltd. (567/96) [1998] ZASCA 66; 1998 (4) SA 885 (SCA); (17 September 1998)

Langston Clothing (Properties) CC v Danco Clothing (Pty) Ltd. (567/96) [1998] ZASCA 66; 1998 (4) SA 885 (SCA); (17 September 1998)

The court held that the handwritten clause 16, stating 'This surety is valid until 31 December 1994', does not discharge the surety from liability for debts accrued before that date. Clause 16 merely sets the latest date for termination, relieving the surety of the need to give notice under clause 13, but does not affect liability for debts incurred prior to termination. The contract must be interpreted to give effect to all its terms and maintain business efficacy. There was no ambiguity warranting referral to evidence, and the intention of the parties was clear from the wording and context of the agreement.

Citation
[1998] ZASCA 66
Parties
Appellant: Langston Clothing (Properties) CC; Respondent: Danco Clothing (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
17 September 1998
Case Number
567/96
Procedural Posture
Civil Appeal / Appeal From Cape Provincial Division
Outcome
Appeal dismissed with costs.
Judges
Van Heerden, Smalberger, Howie, Schutz, Plewman
Legal Topics
Suretyship, Contractual Interpretation, Continuing Guarantee
Commercial and Corporate Suretyship Contractual Interpretation Continuing Guarantee

Case Brief

Summary, issues, holding and outcome

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Parties

Langston Clothing (Properties) CC

Appellant

Danco Clothing (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Cape Provincial Division

Legal Issues

  1. 1 Does the handwritten clause 'This surety is valid until 31 December 1994' terminate the surety's liability for debts incurred before that date?
  2. 2 Should clause 16 override clause 13 of the suretyship agreement?
  3. 3 Is the surety discharged from liability for accrued debts after 31 December 1994?

Ratio Decidendi

The court held that the handwritten clause 16, stating 'This surety is valid until 31 December 1994', does not discharge the surety from liability for debts accrued before that date. Clause 16 merely sets the latest date for termination, relieving the surety of the need to give notice under clause 13, but does not affect liability for debts incurred prior to termination. The contract must be interpreted to give effect to all its terms and maintain business efficacy. There was no ambiguity warranting referral to evidence, and the intention of the parties was clear from the wording and context of the agreement.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.