Intercontinental Exports (Pty) Ltd v Fowles

Intercontinental Exports (Pty) Ltd instituted action against F T Fowles to rectify a written deed of suretyship and to recover R2 178 844,43 owed by Security Depot (Pty) Ltd for goods supplied. The suretyship, adapted from a banking form, incorrectly described Mr Frank Fowles as the principal debtor and included a clause referring to banking facilities, although the true intention was that Fowles would stand as surety and co‑principal debtor for the company’s indebtedness. The errors were alleged to be due to a common mistake. The appellant sought rectification of the suretyship, payment of the debt, interest, and attorney‑and‑client costs. Default judgment was refused in the court a quo on the basis that the suretyship was formally invalid. The appellant appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the court a quo was set aside and replaced with an order rectifying the deed of suretyship, granting judgment against the respondent for R2 178 844,43 with interest at 24% per annum from 1 August 1997, and awarding costs on the party‑and‑party scale.

The case clarifies the approach to formal validity of suretyships under section 6 of the General Law Amendment Act, confirming that validity is assessed ex facie the document and that a suretyship should not be held invalid if it is reasonably capable of an interpretation consistent with validity. It also affirms the distinction between formal validity and substantive rectification, and confirms that courts retain a residual discretion on costs despite contractual provisions.