Merc - Topic 3 Case Laws.pdf

Nature of a Securities Interest Panamo Properties v Land & Agricultural Development Bank 2015 (SCA) -If the security covers indebtedness over and above the invalid or terminated obligation, it remains valid and enforceable to that extent. Tattersall v Nedcor Bank 1995 (A) -The principal obligation...

Nature of a Securities Interest Panamo Properties v Land & Agricultural Development Bank 2015 (SCA) -If the security covers indebtedness over and above the invalid or terminated obligation, it remains valid and enforceable to that extent. Tattersall v Nedcor Bank 1995 (A) -The principal obligation continues to exist irrespective of whether the security interest is extinguished. Mortgage Bond Bonheur 76 General Trading v Caribbean Estates 2010 (GSJ) -A co-owner of immovable property may pass a mortgage bond over his undivided share in the property without the knowledge or consent of the other co- owner. Pledge of Movables Bock v Duburoro Investments (Pty) Ltd 2002 (SCA) -The pledgee, if empowered by the agreement of the parties, may sell the pledged property privately without recourse to the court. Notarial Bond over Movables Bokomo v Standard Bank van SA Bpk 1996(C) -A notarial bondholder acquires a real right over the property hypothecated under the bond as though the property were pledged to him. Farmsecure Grains v Du Toit 2013 (FB) -The holder of a special notarial bond over movable goods has a possession-less pledge, which makes it unnecessary for him to take possession or control over the goods. Ikea Trading und Design AG v BOE Bank Ltd 2005 (SCA) -A member of the public must be able to establish from the information lodged at the deeds office whether particular assets of a debtor have been pledged Contract Forwarding (Pty) Ltd v Chesterfin (Pty) Ltd 2003 (SCA) -The holder of a general notarial bond does not enjoy a real right of security in the assets subject to the bond. There is nothing preventing the owner from dealing with or disposing the assets. Cession in securitatem debiti National Bank v Cohen’s Trustees 1911 AD -The cedent, as “owner” of a reversionary interest in a ceded right, may transfer it to a third party. If the estate of the cedent is sequestrated, the reversionary interest vests in the insolvent estate. Aussenkehr Farms (Pty) Ltd v Trio Transport CC 2002 (SCA) -When the secured debt is satisfied, the secured interest reverts automatically to the cedent, without the need for any re-cession by the cessionary. Grobler v Oosthuizen 2009 (SCA) - Trio Transport CC’s case also applies where the secured debt proves to be non- existent from the start. Suretyship Roomer v Wedge Steel (Pty) Ltd 1998 (N) -A party who signs a written suretyship without appreciating the effect of the document may be held liable in terms of reliance theory. Davids v ABSA Bank 2005 (C) - A party who signs a written suretyship without appreciating the effect of the document may be held liable in terms of reliance theory. However, he will not be held liable if his failure to appreciate the meaning of the document was due to an iustus error (fair or reasonable mistake). Manufacturers Development Co v Repcar Holdings 1975 (W) -When a deed of suretyship provides for more than one surety, it may be the intention of the parties that it should be a joint or individual suretyships. Industrial Development Corporation v See Bee Holdings 1978 (C) -Explicit provisions in a deed of suretyship take preference over implied provisions. Nedbank v Van Zyl 1990 (A) -A debt which is secured must be owed by someone other than the principal debtor. A person cannot stand surety for his own debt. Standard Bank v Lombard 1977 (W) -Although a partnership is not a separate legal persona from its individual partners, partners may still validly bind themselves as sureties to the partnership. Du Toit v Barclays Nasionale Bank 1985 (A) -A contract where a partner binds himself as surety of the partnership against a creditor is valid. Sassoon Confirming & Acceptance Co v Barclays National Bank 1974 (A) -If a promissor merely agrees to render a performance of the same content of the principal debt, this does not create a contract of suretyship. Hutchinson v Hylton Holdings & another 1993 (T) -If a promissor agrees to discharge debtor’s obligation irrespective of whether they default or not, this does not create a contract of suretyship. Solomon NO v Spur Cool Corporation 2002 (C) -The surety may undertake liability for less than the principal debt, but he cannot bind himself for more than the principal debt. Fedbond Nominees v Meier 2008 (C) -In general, the surety will be held liable only for what the words of the contract clearly state. SA Breweries Ltd v Van Zyl 2006 (SCA) -If the principal debt is ceded, the surety’s liability is transferred to the cessionary, limited to the principal debt at the time of the cession. Ideal Finance Corporation v Coetzer 1970 (A) -A surety may raise against the creditor any defence which the principal debtor has against the creditor, provided it relates to the obligation itself. Worthington v Wison 1918 TPD -If it is impossible for a creditor to excuss the principal debtor, he may be excused from doing so. Gaba v Ordra Trust and Investments 1954 (T) -The benefit of excussion does not apply when it is impossible or serves no purpose. Barnard v Laas 1929 (T) -An agreement may be implied that the surety will be liable for the costs of a full excussion. Douglas G Wylde & Co v Burger 1970 (E) -In certain cases, the surety may obtain an order compelling performance by the principal debtor Strachan v Fawcett 1933 (N) -A co-surety who has discharged the principal debt is entitled to recover a contribution from each of his co-sureties who is solvent. ASA Investments v Smit 1980 (C) -A co-surety does not have a right to recover a contribution unless he has discharged the entire debt. Gerber v Wolson 1955 (A) -If a thing can be done “by a torturous and expensive procedure”, the court should allow it to be done “by a more direct and cheaper method”. Jans v Nedcor Bank 2003 (SCA) -The suretyship obligation may be discharged in the same way as obligations generally. Kalil v Standard Bank 1967 (A) -A surety under a continuing guarantee has the right to bring his continuous liability to an end by duly notice to the creditor. Tsaperas v Boland Bank 1996 (A) -The surety retains a common law right to terminate his liability unilaterally by notice to the creditor. Standard Bank v Lewis 1922 (T) -Termination of the principal debt for any reason extinguishes the suretyship obligation, unless the surety contract says otherwise. ABSA Bank t/a Volkskas Bank v Page 2002 (SCA) -Payment by a principal debtor of an indebtedness which is co-extensive with the surety’s liability will discharge them both. Before that, a principal debtor’s payment discharges only his own debt. Standard Bank v Cohen 1993 (EC) -The surety is released if the creditor breaches a legal obligation or duty resting on him and the surety suffers prejudice as a result. ABSA Bank v Davidson 2000 (SCA) -An increase in the amount owed by the principal debtor does not release the surety if the increase falls within the terms of the principal agreement and the surety has undertaken liability for whatever the amount of the principal debt may be. Bock v Duburoro Investments 2004 (SCA) -An increase in the amount that the surety has to pay to discharge his liability does not release the surety if it is a consequence of the creditor acting in accordance with the principal agreement or the suretyship. Lien De Aguiar v Real People Housing 2011 (SCA) -A party cannot have an enrichment lien if he has agreed to relinquish possession of the property. Scholtz v Faifer 1910 (T) -Essential to the existence of any lien is possession of the property by the person claiming the lien. Marinus v Taljaard 1952 (C) -Lien is extinguished if possession is voluntarily relinquished, and it does not revive if possession is regained after. Hamilton Paneelkloppers v Nkomo 1991 (O) -If the lienholder is induced to part with the property by fraud, he may revive the lien by recovering possession, provided he does so in a lawful manner. Singh v Santam Insurance 1997 (A) -A party has no lien if he was not in possession of the property when he incurred the relevant expenditure. Sandton Square Finance v Viliotti 1997 (W) -The court may order the holder of a lien to give up possession of the property to the owner in return for some other adequate form of security. Tacit hypothec of a lessor of immovable property Bloemfontein Municipality v Jacksons Ltd 1929 (A) -Goods belonging to a third party may be subject to the hypothec if the third party’s conduct implies consent. Paradise Lost Properties v Standard Bank 1998 (N) -If the lessor becomes aware that goods belong to a third party, the goods are not subject to the hypothec.