Tesven CC and Another v South African Bank of Athens

The respondent bank obtained summary judgment in the Witwatersrand Local Division against Tesven CC (first defendant) and its sole member, Margaret Muriel Gaganakis (second defendant), based on deeds of suretyship and a covering mortgage bond. The suretyships bound the defendants as sureties and co‑principal debtors for the obligations of the second defendant’s husband to the bank, limited to R500 000. The husband’s estate was later sequestrated. The defendants resisted summary judgment, alleging that the suretyships and mortgage bond did not reflect the parties’ common continuing intention and required rectification. They alleged that the suretyships were intended to operate only if the bank issued a R500 000 guarantee on behalf of the husband to a third party, which never occurred, and that the mortgage bond was intended only to secure a specific home loan. The High Court rejected these defences and granted summary judgment.

The appeal was upheld. The order granting summary judgment was set aside and replaced with an order refusing summary judgment and granting the defendants leave to defend. The respondent was ordered to pay the costs of the appeal and the condonation application, subject to limited disallowances.

The case is significant for clarifying South African law on rectification and the parol evidence rule, confirming that rectification may be based on a common mistake as to the effect of contractual wording. It also reinforces the cautious approach courts must adopt in summary judgment proceedings and affirms the discretionary power to refuse summary judgment where a defence may be bona fide, even if imperfectly articulated.