Waz Props (Pty) Limited and Another v Sentinel Mining Industry Retirement Fund and Another (31309/10) [2010] ZAGPJHC 145 (18 November 2010)

Waz Props (Pty) Limited and Another v Sentinel Mining Industry Retirement Fund and Another (31309/10) [2010] ZAGPJHC 145 (18 November 2010)

The court found that, on a proper interpretation of the agreement and applying the 'officious bystander' test, it was necessarily implied that the first respondent could not call up the guarantee if the Park Road Upgrading Project was not completed by 1 April 2009. The refund mechanism for cash payments indicated the parties' intention that the same principle should apply to guarantees. Since the project was not completed by the stipulated date, the first respondent was not entitled to retain the funds paid under the guarantee. The second applicant was entitled to repayment, as the guarantee was issued on its behalf and its bank account was depleted.

Citation
[2010] ZAGPJHC 145
Parties
Applicant: Waz Props (Pty) Limited; Applicant: Werlex Properties (Pty) Limited; Respondent: Sentinel Mining Industry Retirement Fund; Respondent: Fluxmans Attorneys Inc
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
18 November 2010
Case Number
31309/10
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted in favour of the applicants.
Judges
Willis
Legal Topics
Contract Interpretation, Implied Terms, Guarantee Liability, Specific Performance
Commercial and Corporate Civil Procedure Contract Interpretation Implied Terms Guarantee Liability Specific Performance

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 4 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Waz Props (Pty) Limited

Applicant

Werlex Properties (Pty) Limited

Applicant

Sentinel Mining Industry Retirement Fund

Respondent

Fluxmans Attorneys Inc

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the first respondent was entitled to call up the bank guarantee after the Park Road Upgrading Project was not completed by the stipulated date.
  2. 2 Whether a tacit term should be implied into the agreement preventing the first respondent from calling up the guarantee under these circumstances.
  3. 3 Which applicant is entitled to repayment of the sum paid under the guarantee.

Ratio Decidendi

The court found that, on a proper interpretation of the agreement and applying the 'officious bystander' test, it was necessarily implied that the first respondent could not call up the guarantee if the Park Road Upgrading Project was not completed by 1 April 2009. The refund mechanism for cash payments indicated the parties' intention that the same principle should apply to guarantees. Since the project was not completed by the stipulated date, the first respondent was not entitled to retain the funds paid under the guarantee. The second applicant was entitled to repayment, as the guarantee was issued on its behalf and its bank account was depleted.

Court Disposition

Application granted in favour of the applicants.

Orders

  • The first respondent is to pay to the second applicant the sum of R207 810.35 together with interest thereon calculated at the rate of 15.5 per cent a tempore morae and costs.