Lynn & Main Incorporated v Brits Community Sandworks CC (348/2007) [2008] ZASCA 100; 2009 (1) SA 308 (SCA); [2009] 1 All SA 116 (SCA) (17 September 2008)

Lynn & Main Incorporated v Brits Community Sandworks CC (348/2007) [2008] ZASCA 100; 2009 (1) SA 308 (SCA); [2009] 1 All SA 116 (SCA) (17 September 2008)

The Supreme Court of Appeal held that clause 11 of the deed of suretyship did not require prior written notice for a valid cession. The clause allowed Citibank to cede its rights at any time, and the requirement of written notice was only to make the cession effective against the surety, not to render the cession itself invalid. The summons constituted sufficient notice to the respondent, and there was no prejudice to the respondent in this regard. The court rejected the argument that notice was required to be given to both the respondent and Crocodile, as Crocodile was the debtor, not a surety. The appeal was upheld, and the respondent was ordered to pay the outstanding sum, interest,...

Citation
[2008] ZASCA 100
Parties
Appellant: Lynn & Main Incorporated; Respondent: Brits Community Sandworks CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
17 September 2008
Case Number
348/2007
Procedural Posture
Civil Appeal / Appeal From High Court, Pretoria
Outcome
Appeal upheld; order of the court a quo set aside and replaced with judgment in favour of the appellant.
Judges
MPATI, FARLAM, HEHER, KGOMO, MHLANTLA
Legal Topics
Cession of Rights, Suretyship Interpretation, Notice Requirement, Locus Standi, Contractual Construction
Commercial and Corporate Civil Procedure Cession of Rights Suretyship Interpretation Notice Requirement Locus Standi Contractual Construction

Case Brief

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Parties

Lynn & Main Incorporated

Appellant

Brits Community Sandworks CC

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court, Pretoria

Legal Issues

  1. 1 Whether written notice to the surety is a prerequisite for a valid cession of rights under the suretyship agreement.
  2. 2 Whether the cession of rights by Citibank to the appellant was valid and effective against the respondent.
  3. 3 Whether the summons constituted sufficient notice of the cession to the respondent.

Ratio Decidendi

The Supreme Court of Appeal held that clause 11 of the deed of suretyship did not require prior written notice for a valid cession. The clause allowed Citibank to cede its rights at any time, and the requirement of written notice was only to make the cession effective against the surety, not to render the cession itself invalid. The summons constituted sufficient notice to the respondent, and there was no prejudice to the respondent in this regard. The court rejected the argument that notice was required to be given to both the respondent and Crocodile, as Crocodile was the debtor, not a surety. The appeal was upheld, and the respondent was ordered to pay the outstanding sum, interest,...

Court Disposition

Appeal upheld; order of the court a quo set aside and replaced with judgment in favour of the appellant.

Orders

  • The appeal succeeds with costs, such costs to be taxed on the scale as between attorney and own client.
  • The defendant is ordered to pay to the plaintiff the sum of R550,932.02.