Pangbourne Properties Ltd. v Gill & Ramsden (Pty) Ltd. (142/94) [1995] ZASCA 110; 1996 (1) SA 1182 (SCA); (21 September 1995)

Pangbourne Properties Ltd. v Gill & Ramsden (Pty) Ltd. (142/94) [1995] ZASCA 110; 1996 (1) SA 1182 (SCA); (21 September 1995)

The Supreme Court of Appeal held that clause 4 of the 'Cession' agreement constituted a valid and enforceable guarantee by the respondent for the obligations of Storm under the lease. The court found that the phrase 'subject to' in clause 4 did not create a suspensive condition, but rather indicated that the cession was subservient to the guarantee. The present participle 'guaranteeing' and the absence of a time limit in clause 4 supported the interpretation of an unconditional guarantee. The court rejected the respondent's argument that the guarantee was vague or subject to further formalities, noting that simple deeds of suretyship are enforceable if the intention is clear. Accordingly,...

Citation
[1995] ZASCA 110
Parties
Appellant: Pangbourne Properties Limited; Respondent: Gill & Ramsden (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
21 September 1995
Case Number
142/94
Procedural Posture
Civil Appeal / Appeal From Dismissal of Declaratory Application in Witwatersrand Local Division
Outcome
Appeal upheld. Declaratory order granted in favour of the appellant. Costs awarded, including costs of two counsel.
Judges
Harms, Joubert, F H Grosskopf, Van Den Heever, Olivier
Legal Topics
Suretyship, Guarantee in Commercial Contracts, Lease Agreement, Interpretation of Contracts
Commercial and Corporate Land and Property Suretyship Guarantee in Commercial Contracts Lease Agreement Interpretation of Contracts

Case Brief

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Parties

Pangbourne Properties Limited

Appellant

Gill & Ramsden (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Dismissal of Declaratory Application in Witwatersrand Local Division

Legal Issues

  1. 1 Whether clause 4 of the 'Cession' agreement constitutes a valid and enforceable guarantee by the respondent for the obligations of Storm.
  2. 2 Whether clause 4 is subject to a suspensive condition or is an unconditional guarantee.
  3. 3 How the phrase 'subject to' in clause 4 should be interpreted in the context of the agreement.

Ratio Decidendi

The Supreme Court of Appeal held that clause 4 of the 'Cession' agreement constituted a valid and enforceable guarantee by the respondent for the obligations of Storm under the lease. The court found that the phrase 'subject to' in clause 4 did not create a suspensive condition, but rather indicated that the cession was subservient to the guarantee. The present participle 'guaranteeing' and the absence of a time limit in clause 4 supported the interpretation of an unconditional guarantee. The court rejected the respondent's argument that the guarantee was vague or subject to further formalities, noting that simple deeds of suretyship are enforceable if the intention is clear. Accordingly,...

Court Disposition

Appeal upheld. Declaratory order granted in favour of the appellant. Costs awarded, including costs of two counsel.

Orders

  • It is declared that a valid and enforceable guarantee exists in the 'Cession' of 22 May 1989 (Annexure 'A6' to the founding affidavit), in terms whereof the respondent, as surety, guaranteed the obligations of Cul de Sack (Pty) Ltd (formerly M J H Storm's Services (Pty) Ltd) to the applicant for the remaining period...
  • The respondent is ordered to pay the costs of the appeal, including the costs of two counsel.