Tag archives: Surety

No general ‘prejudice principle’ protecting sureties

The court in Firstrand Bank Limited v Barreiro reconfirmed that there is no general ‘prejudice principle’ which holds that a debtor or surety is released from their obligations to a creditor if the creditor does anything that prejudices them. The court reiterated that a surety can be released, either wholly or in part, from their obligations … Continue reading

Judicial oversight of execution against property requires full facts before court

Where an order was sought declaring immovable property specially executable but no facts had been placed before the court by the defendant, the court authorised the sale. The court held that to deny an order declaring a property specially executable where the summons clearly draws a debtor’s attention to their right to lead evidence and … Continue reading

Sureties may not be affected by business rescue plan

Without deciding the point, the Supreme Court of Appeal in New Port Finance Company (Pty) Ltd v Nedbank Limited held that the decision in Tuning Fork (Pty) Limited v Greeff may not be correct in saying that where the principal debts are diminished or expunged by a business rescue plan the sureties are released accordingly. … Continue reading

Business rescue and sureties

The latest appeal court decision of New Port Finance Co v Nedbank reinforces our view that every suretyship securing a company’s debts should specifically preserve the creditor’s rights against a surety despite discharge of any part of the principal debt by a business rescue plan and that creditors should ensure that claims against sureties are preserved … Continue reading

Can you claim against a surety if the debtor is in business rescue?

Every suretyship securing a company’s debts should specifically preserve the creditor’s rights to recover from the surety despite discharge of the principal debt in a business rescue plan. And every business rescue plan should, if possible, contain a provision preserving rights against sureties. If a debtor company is in business rescue, its creditors may call on … Continue reading