Lombard Insurance Company Limited v L & D Enterprises (Pty) Ltd and Others (32905/13) [2014] ZAGPJHC 414 (8 December 2014)
The court found that the applicant issued a construction guarantee at the request of the first respondent, supported by indemnity and suretyship agreements entered into by the respondents. The respondents admitted the existence of these agreements and the payment made by the applicant. Their defence, based solely on...
Source-derived case information.
- Citation
- [2014] ZAGPJHC 414
- Parties
- Applicant: Lombard Insurance Company Limited; Respondent: L & D Enterprises (Pty) Ltd; Respondent: Clidet No 1041 (Pty) Ltd; Respondent: Pieter Gabriel Knox; Respondent: Paulo George Fernandes Da Silva
- Court
- South Gauteng High Court, Johannesburg
- Jurisdiction
- South Africa
- Case Number
- 32905/13
- Procedural Posture
- Civil Application / Judgment
- Outcome
- Application granted. Orders made in terms of the amended notice of motion.
- Judges
- Makopo
- Legal Topics
- Suretyship, Indemnity, Construction Guarantee, Joint and Several Liability, Interest Award
Source-derived case record
Summary, issues, holding and outcome
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Parties
Lombard Insurance Company Limited
Applicant
L & D Enterprises (Pty) Ltd
Respondent
Clidet No 1041 (Pty) Ltd
Respondent
Pieter Gabriel Knox
Respondent
Paulo George Fernandes Da Silva
Respondent
Procedural Posture
Civil Application / Judgment
Legal Issues
- 1 Whether the respondents are liable to indemnify the applicant for payment made under a construction guarantee.
- 2 Whether the contracts of indemnity and suretyship are valid and enforceable.
- 3 Whether the respondents' defence regarding lack of reference to the employer in the guarantee defeats the applicant's claim.
Ratio Decidendi
The court found that the applicant issued a construction guarantee at the request of the first respondent, supported by indemnity and suretyship agreements entered into by the respondents. The respondents admitted the existence of these agreements and the payment made by the applicant. Their defence, based solely on the lack of reference to the employer in the guarantee, was not sufficient to defeat the applicant's claim, as there was no substantive denial of indebtedness. The court held that the respondents are jointly and severally liable for the amounts claimed, interest at the prime overdraft rate plus 2%, and costs on the attorney and client scale. The amendment to the notice of...
Court Disposition
Application granted. Orders made in terms of the amended notice of motion.
Orders
- The first and second respondents are ordered, jointly and severally, the one paying the other to be absolved, to pay the applicant R1,135,869.47.
- The third respondent is ordered to pay the applicant R56,793.47, jointly and severally with any payment in the above paragraph.
Full Case Text
Judgment text and source record
52 paragraphs
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION
CASE NO: 32905/13
DATE: 08 DECEMBER 2014
In the matter between:
LOMBARD INSURANCE COMPANY LIMITED...............................................................Applicant
And
L & D ENTERPRISES (PTY) LTD............................................................................First Respondent
CLIDET NO 1041 (PTY) LTD................................................................................Second Respondent
PIETER GABRIEL KNOX.......................................................................................Third Respondent
PAULO GEORGE FERNANDES DA SILVA........................................................Fourth Respondent
JUDGMENT
MAKOPO AJ:
[1] The Applicant seeks an order in the following terms that:
1.1 the first and second Respondent, jointly and severally the one paying the other to be absolved are to pay to the Applicant an amount of R1135869.47.
1.2 the Third Respondent be ordered to pay the Applicant an amount of R56793.47, jointly and severally with any payment in the paragraph
above.
1.3 the Respondents be ordered to pay the Applicant interest on the amounts above from 27 March 2013 to date of final payment at the prime overdraft rate of Nedbank Limited, plus 2% (two per cent).
1.4 the Respondents be ordered to pay the costs of suit on the scale
between attorney and client.
[2] The Applicant Lombard Insurance Company Ltd, hereinafter referred to as Lombard, is an insurer, it agreed to issue construction guarantees from time to time on behalf of the First Respondent, a construction company, in exchange for indemnity for or on behalf of the First Respondent and the provision of suitable security.
2.1 The First Respondent entered into the contract of indemnity that appears at “LOM3”.
2.1.1 “LOM3” is admitted[1].
[3] As a security, the Second Respondent entered into the contract of suretyship with Lombard that is “LOM4”.
3.1 “LOM4” is admitted[2].
[4] As further security, the Third Respondent entered into the contract of suretyship with Lombard “LOM5”.
4.1 “LOM5” is admitted[3].
[5] On or about 27 November 2012 Lombard (Applicant) at the instance and request of the First Respondent, issued a construction guarantee, hereinafter referred to as “LOM6” in the founding papers.
5.1 It is admitted in para 17 of the First; Second; and Third Respondents answering papers.
[6] On the 27 March 2013, Lombard (the Applicant) made payment of an amount of R1 135 869.47.
6.1 The First; Second; and Third Respondents admits that payment was made.
6.1.1 It is denied however,[4] that such payment was made in accordance with the guarantee.
[7] The First; Second; and Third Respondent’s defence is that the guarantee makes no reference to the Employer.
[8] The First; Second; and Third Respondents on its own admission admits payment and the contracts and suretyship agreements entered between the parties.
8.1 There is no allegation or denial of indebtedness either than the denial of the reference to the “Employer”.
[9] The First; Second; and Third Respondents defence does not have merit and there is no denial of indebtedness to the Applicant.
[10] I accordingly grant the amendment as set out in the amended notice of motion dated 11 August 2014.
[11] I accordingly make the following orders:
11.1 A draft order reflecting the amended prayers marked “X” is made an order of the court.
N MAKOPO
ACTING JUDGE OF THE HIGH COURT
Appearances:
For the Applicant : IB Currie
Instructed by : Frese Moll & Partners,
For the First; Second and Third Respondents : D L Williams
Instructed by: Malherbe Rigg & Ranwell Inc
Date of hearing : 13 August 2014
Date of Judgment : 08 December 2014
[1] See par 12 of the First; Second; and Third Respondents answering affidavit.
[2] See para 14 of the First; Second; and Third Respondents answering affidavit.
[3] See para 16 of the First; Second; and Third Respondents answering affidavit
[4] See para 20.