South Africa Case Law

First Rand Bank Ltd v Brera Investments CC (385/2012)

First Rand Bank Ltd v Brera Investments CC (385/2012) [2013] ZASCA 25; 2013 (5) SA 556 (SCA) (25 March 2013)

Court

Supreme Court of Appeal

Case number

385/2012

Judges

Lewis, Ponnan, Malan, Theron, Plasket

The Supreme Court of Appeal held that the payment guarantee issued by First Rand Bank was an independent obligation, not accessory to the underlying contract between the respondent and the contractor. Liability under the guarantee arose upon the respondent's compliance with the demand procedure set out in clause 3, specifically the failure of the contractor to issue a payment certificate within seven days of demand. The subsequent issuance of a payment certificate for a lesser amount did not affect the appellant's liability, as the trigger event for payment had already occurred. The court rej…

Source excerpt

• Construction Guarantee
• Performance Bond
• Interpretation Of Contract
• Payment Certificate
• Independent Guarantee