The trust lent and advanced a R20 million loan to the company under a written loan agreement. To secure the loan, a special notarial bond (SNB) was registered over the company’s vehicles, machinery and equipment. The company fell in arrears with its loan repayments and remained in breach of the loan agreement. The trust sought
Izak Lessing
Resolutions are not enough: court rejects loan claim against deceased’s estate
By Izak Lessing, Camille Kafula & Adrienne Hendricks on
The liquidators of a company failed in a claim for a sum of money and interest thereon against the executor of the deceased’s estate arising from an alleged loan by the company to the deceased (who was a former director of the company) because there was no proof that the deceased agreed to be bound…
Misunderstanding no defence: guarantor bound by terms of guarantee
By Izak Lessing, Camille Kafula & Adrienne Hendricks on
The bank brought a claim against the respondent based on a guarantee signed by him wherein he irrevocably and unconditionally guaranteed to pay any amount owing by the close corporation (the debtor) as if he was the principal debtor.
The respondent disputed the sum claimed by the bank in the certificate of balance alleging that…
The Constitutional Court confirms that quorate trustee meeting decisions are binding on the trust
By Izak Lessing & Siphosetu Matebese on
In August 2025, the Constitutional Court clarified a point in trust law that a decision taken at a quorate trust meeting will bind a trust even when a trustee does not attend the meeting despite receipt of reasonable notice. There is no need for a unanimous resolution and joint action by all trustees at meetings…
SCA cautions against attempts to circumvent principle of concursus creditorum
By Izak Lessing & Hannah Howell on
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In July 2025, the Supreme Court of Appeal dismissed an appeal concerning a payment made to a creditor pursuant to a sale of business agreement after the liquidation of the seller. The judgment reinforces the centrality of the concursus creditorum in South African insolvency law, (which…
Payment obligations under demand guarantees are independent and persist unless fraud is proven
By Izak Lessing on
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In July 2025, the high court again confirmed the well-established principle that demand guarantees are independent of the underlying contract. A guarantor must pay upon receipt of a valid demand, even if disputes exist between the parties to the underlying agreement. This obligation can only be…
Court confirms lender’s right to enforce security despite business rescue
By Izak Lessing & Adrienne Hendricks on
This blog was co-authored by Adriaan Lourens, Candidate Attorney.
In May 2025, the high court confirmed a lender’s right to enforce a pledge and cession agreement over a member’s interest in a close corporation (the debtor), despite the debtor having entered business rescue.
The lender had advanced two loans to the debtor. To secure the…
Oral termination of suretyship agreements
By Izak Lessing & Hannah Howell on
This blog was co-authored by Adriaan Lourens, a Candidate Attorney.
In a May 2025 High Court judgment, the court held that, in the absence of a contractual provision expressly requiring written termination, an oral termination of a suretyship agreement is legally valid. This judgment provides useful guidance on the distinction between the formation and cancellation…
Preserving creditor rights against sureties in business rescue plans
By Izak Lessing & Adrienne Hendricks on
In an April 2025 judgment, the High Court concluded that the defendant’s liability as a surety was not discharged by the release of the principal debtor under a business rescue plan (BR Plan). The BR Plan and the deed of suretyship were both clearly drafted to preserve the creditor’s right to claim from the surety.…
Securing the Uncertain: A cautionary tale for guarantors
By Izak Lessing & Anika de Kock on
The Supreme Court of Appeal clarified the scope and independence of on-demand guarantees, underscoring key principles that directly affect guarantors.
The guarantor issued three on-demand performance guarantees in favour of a developer for a large-scale housing project. The underlying construction contracts were cancelled and the guarantor received demands for payment under the performance guarantees. The…