Suertyship PDF

Should interest rates rise too much, Coolio will be unable to pay back his monthly premiums. In which ways would FNB be protected from bad debt in respect of Coolio’s home loan? (4) 10.2 In the event that Coolio didn’t own the home but rented the home from Bloem Rentals, would the sheriff be allowe...

Should interest rates rise too much, Coolio will be unable to pay back his monthly premiums. In which ways would FNB be protected from bad debt in respect of Coolio’s home loan? (4) 10.2 In the event that Coolio didn’t own the home but rented the home from Bloem Rentals, would the sheriff be allowed to seize your golf clubs in the execution of a warrant against Coolio for bad debt on his rental agreement with Bloem Rentals? The sheriff didn’t ask Coolio who the owner was as he assumed every item on the premises belonged to Coolio and Coolio was too shocked to even mention that it belonged to you. (4) The sheriff can indeed execute the warrant against Coolio for bad debt on his rental agreement with Bloem Rentals as the landlord’s tacit hypothec allows the lessor (landlord) of immovable property obtains a tacit hypothec over the movable property (including money) of the lessee (tenant), present on the property, as well as on the natural fruits produced by such property. This hypothec merely ensures the payment of arrears rent; it does not secure the satisfaction of any other debts owed by the lessee to the lessor. The hypothec comes into being by operation of law at the time when the rent is in arrears and it automatically lapses upon payment thereof. The lessor’s real security vests at the time of attachment of the lessee’s (movable assets, or if the lessee becomes insolvent, upon his sequestration. The sheriff need not have ask Coolio who the owner was as he assumed every item on the premises belonged to Coolio because someone else property can be attached if Attached property 1. Must be on the leased premises for use by the lessee 2. On the leased property for an indefinite period 3. The owner must be have consent to his goods being held on the property 4. The lessor must not be aware of the true state of affairs that the goods belong to a 3rd party. 10.3 The sheriff acting for Bloem Rentals left the green couch alone. Explain why he didn’t seize the couch in terms of the law as applied between creditor/debtor matters. (4) 10.4 The sheriff acting for Bloem Rentals did not leave the TV behind. Does this not infringe upon a South African’s right to support national sports teams? Coolio will now not be able to follow the Springboks in the 2023 World Cup in France. He knows you are studying law and approached you for advice. Advise your friend Coolio. (4) Coolio obtained a loan from a friend, Greedella, who insisted that she would keep his speedboat as a pledge for the loan. What are the legal implications if Coolio doesn’t pay back the loan to his friend within the agreed-upon timeframe? (4) The normal procedure in the case of default on the part of the pledgor is that the pledgee can, after obtaining an order of court, have the goods sold. The debt is then satisfied from the proceeds of the sale if that will be sufficient. However, the parties to a pledge may agree that the pledgee may sell the object without recourse to the court and satisfy his debt from the proceeds. This is the so-called clause for parate executie. Although such arrangements are generally valid, the pledgor may object to parate executie if he reasonably fears that it may be to his prejudice [Osry v Hirsch Loubser and Co Ltd 1922 CPD 531]. The courts have reviewed parate executie over the last number of years in view of section 34 of the Constitution of 1996, which deals with the right of access to the courts and due legal process that in general promotes the rule of law and militates against the principle of self-help. After judgments that ruled against the constitutionality of this principle, the Supreme Court of Appeal confirmed in Bock v Dubororo Investments (Pty) Ltd 2004 (2) SA 242 (SCA) that parate executie in a pledge agreement is valid. After Coolio paid off the loan to his friend Greedella, her husband, Tjita, promised to look after the speedboat for two months. Coolio agreed that Tjita could use the boat at his holiday home in East Londen. While using the boat, Tjita realised the previously repaired crack in the boat started to leak again resulting in urgent repairs of R30 000. The repairs prevented the boat from sinking. Coolio now refuses to repay the R30 000, and Tjita refuses to give his boat back. He again approached you for legal advice. Advise your friend Coolio. (4) Given that expenses are not expended in terms of an agreement between the person incurring the costs and the owner of the property, the lien serves to secure the amount of the enrichment of the owner. The general principle of enrichment entails that nobody shall be unjustly enriched at the expense of another the total amount expended is usually recover-able as the enrichment amount and the lien secures the payment thereof. A lien confers on the lienholder the right to resist a claim by the owner for the return of the object of the lien by way of a defence in law. The creditor may, therefore, in general, retain possession of the thing until satisfactory reimbursement has been made. The creditor who holds possession of the property is not entitled to use it for his own purposes and has the same duty of care towards the object as a normal pledgee. Furthermore, a lien confers a passive defensive right on the creditor, meaning that he cannot rely on it to directly enforce the debt via a sale in execution but can only retain possession of it and, until he receives payment, resist any attempts on the part of the owner to reclaim the object. The legal principle at play here is negotiorum gestio, which is a concept in South African law where a person (the gestor) voluntarily manages the affairs of another (the dominus) without their authorization, but in their interest. In this scenario: Tjita is the gestor who undertook the repairs to prevent the boat from sinking. Coolio is the dominus who owns the boat. Under negotiorum gestio, the gestor can claim reimbursement for necessary and useful expenses incurred during the management of the dominus’s affairs. However, the gestor must act reasonably and in the best interest of the dominus. Advice for Coolio: Reimbursement Obligation: Coolio may be obligated to reimburse Tjita for the R30,000 spent on necessary repairs, as these expenses were incurred to prevent the boat from sinking, which is in Coolio’s best interest. Possession of the Boat: Tjita’s refusal to return the boat could be seen as a form of retention lien (right of retention), which allows him to retain possession of the boat until he is reimbursed for the expenses. 10.7 In contrast to their home loan division, how would Wesbank (a subsidiary of FNB within the FirstRand Group) protect their rights as a creditor from Coolio defaulting on payments on the instalment sale agreement of his sports car? (4) Real security is essentially the same: in the event of non-payment by the debtor, the creditor may have the object sold in execution, and in case of the debtor’s insolvency the secured creditor has a preferent right to the proceeds of the object as opposed to the unsecured creditors. By separating a thing as the object of the security, the rights of the owner are restricted by granting to  another a limited real right to his property. This, for example, entails that the owner will not be entitled to evade his obligations by selling the burdened object and depriving the creditor of his security. If he wishes to alienate the pledge object, he will not be able to transfer ownership as long as the object is under the physical control of the pledgee How would their rights differ from the situation where Coolio is defaulting due to being sequestrated? (2) In the event of the sequestration of the debtor, the proceeds of the relevant property are, among others, applied to satisfy the debt of the secured creditor; he therefore has priority over the ordinary (unsecured) creditors up to the amount of the secured debt. 10.8 In the event of a fire destroying Coolio’s house and all his belongings inside, including the speedboat and motorcar, what happens to the rights of creditors involved? (4)