Supreme Court Awards Rs. 6 Lakh to Man Acquitted After 6 Years, Faults UP Police Probe  ||  Supreme Court: High Courts Can Restore Power on 50% Deposit in Arbitrary Theft Assessments  ||  Supreme Court: Cooperative Society Cannot Deny RTI Records as Personal if Registrar Can Access Them  ||  SC: CoC Cannot Withdraw Approved Resolution Plan Over Improved Corporate Debtor Finances  ||  Delhi High Court: 24-Week Limit Alone Cannot Restrict Medical Termination of Pregnancy  ||  Allahabad High Court Rejects Challenge to 18% GST on Online Legal Database Services  ||  Madras High Court: FIR Registration Does Not Decide Guilt; Prior Hearing of Accused Not Required  ||  Kerala High Court Orders Speedy Prosecution Sanction Process in Sabarimala Gold Theft Case  ||  Allahabad HC: Missing RT-PCR Report Cannot Bar COVID-19 Compensation if Records Confirm Infection  ||  MP High Court Directs Indore Police to Deploy Volunteers for Reporting Noise Pollution Violations    

Cloete Murray N O and Others vs. Humansdorp Co-operative Limited - (30 Dec 2022)

Once a guarantee is valid on the face of it, the contractual obligation of the bank is to pay the nominated beneficiary, if the conditions are met

Civil

In present case, the High Court dismissed the application brought by the liquidators of the Appellant, Cape Concentrate (Pty) Ltd. to set aside, as a payment without value, the payment of monies made to the Respondent from trust account of Pagdens (a firm of attorneys of which the business rescue practitioner was a director). The high court found that, the payment was a demand guarantees made by Cape Concentrate to the Respondent and was a disposition with value.

It was common cause that, a debt was owed to the Respondent by the Trust. While Cape Concentrate was under business rescue, the business rescue practitioner caused monies of Cape Concentrate to be paid into the trust account of Pagdens. Pagdens paid that money from its trust account to the credit of Standard Bank Third Party Trust Administration (TPFA) accounts, in order for Pagdens to cause guarantees to be issued by its utilisation of the Standard Bank’s online TPFA system. The guarantees were to secure the debts of the Trust to the Respondent. The Trust was not able to honour its debt to the Respondent, which made demand in terms of the guarantees. When demand was made, the guarantees were not presented to Standard Bank for payment, but to Pagdens.

It was not disputed that, the bank guarantees were binding on Standard Bank. Once those monies were credited to the Standard Bank TPFA account, they became subject to a pledge and cession in favour of Standard Bank. The fact that the cession was in respect of a property guarantee, as opposed to a demand guarantee, was irrelevant, said the SCA. Once a guarantee is valid on the face of it, the contractual obligation of the bank is to pay the nominated beneficiary if the conditions are met.

When the demand was made by the Respondent for payment under the guarantees, payment of the pledged and ceded monies was made by Pagdens on behalf of Standard Bank, in line with its obligations under the guarantees. The payment was therefore made by Standard Bank in satisfaction of the demand guarantee and not by Cape Concentrate. Appeal dismissed.

Tags : PAYMENT   DEMAND   BANK GUARANTEES  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved