Nedbank Ltd and Another v Procprops 60 (Pty) Ltd (108/13) [2013] ZASCA 153 (20 November 2013)

Nedbank Ltd and Another v Procprops 60 (Pty) Ltd (108/13) [2013] ZASCA 153 (20 November 2013)

The court held that the guarantee was unambiguous in requiring the original guarantee to be presented with the first written demand, thereby limiting Procprops to a single claim. The phrase 'first demand' excluded subsequent demands, and the purpose of requiring the original guarantee was to ensure that the security could not be used again. The court rejected Procprops's argument based on subsequent conduct and mutual understanding, finding no evidence that Nedbank shared Procprops's interpretation. The guarantee was discharged when Nedbank paid the amount demanded and received the original guarantee. Accordingly, Nedbank was not liable for further payments under the guarantee, and the...

Citation
[2013] ZASCA 153
Parties
Appellant: Nedbank Ltd; Appellant: Top CD (Menlyn) (Pty) Ltd; Respondent: Procprops 60 (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
20 November 2013
Case Number
108/13
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal upheld; respondent's action dismissed; respondent ordered to pay costs of both appellants.
Judges
Brand, Maya, Bosielo, Leach, Van der Merwe
Legal Topics
Payment Guarantee, Contractual Interpretation, Bank Liability
Banking and Finance Commercial and Corporate Payment Guarantee Contractual Interpretation Bank Liability

Case Brief

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Parties

Nedbank Ltd

Appellant

Top CD (Menlyn) (Pty) Ltd

Appellant

Procprops 60 (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the guarantee issued by Nedbank permitted more than one payment to the landlord upon multiple demands.
  2. 2 Whether the requirement to present the original guarantee with the first demand limited the landlord to a single claim under the guarantee.
  3. 3 Whether subsequent conduct or mutual understanding of the parties could alter the plain meaning of the guarantee.

Ratio Decidendi

The court held that the guarantee was unambiguous in requiring the original guarantee to be presented with the first written demand, thereby limiting Procprops to a single claim. The phrase 'first demand' excluded subsequent demands, and the purpose of requiring the original guarantee was to ensure that the security could not be used again. The court rejected Procprops's argument based on subsequent conduct and mutual understanding, finding no evidence that Nedbank shared Procprops's interpretation. The guarantee was discharged when Nedbank paid the amount demanded and received the original guarantee. Accordingly, Nedbank was not liable for further payments under the guarantee, and the...

Court Disposition

Appeal upheld; respondent's action dismissed; respondent ordered to pay costs of both appellants.

Orders

  • The appeal is upheld and the respondent is ordered to pay the costs of appeal of both the appellants.
  • The order of the court a quo is set aside and replaced with: 'The plaintiff’s action is dismissed and the plaintiff is ordered to pay the costs of the defendant and the third party.'