Kerala High Court: Discretion of Appellate Court to Waive/Deposit of Minimum 20% Fine  ||  Del. HC: Article 21A of COI Not Applicable on Being Educated in a Particular School of Choice  ||  Kar. HC: Parties Can’t be Forced to Arbitration Proceed. if Not Signatory to Joint Venture Agreement  ||  Karnataka High Court: Judicial Powers Cannot be Exercised by Conciliators in Lok Adalats  ||  Mad. HC: Registering Authorities Not Empowered to Cancel Sale Deed Through Summary Proceedings  ||  Telangana High Court: Section 18 UAPA is Penal in Nature, Needs to be Proved by Prosecution  ||  Karnataka High Court: Rights of Adopted Child of Indian Parents Cannot be Left Marooned  ||  All. HC: No Authority to Additional Chief Medical Officer to File Complaint Under PCPNDT Act  ||  Kar. HC: Cannot Prosecute Second Spouse or Their Family for Bigamy Under Section 494 IPC  ||  Calcutta High Court: Person Seeking to Contest Elections is Deemed Public Interest    

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 2024 - All Rights Reserved