HNR Properties CC and Another v Standard Bank of South Africa Ltd

The appellants bound themselves as sureties in 1993 for the debts of HNR Computers (Pty) Ltd to Standard Bank. The suretyship deeds contained clauses requiring any release or variation to be in writing and signed by the bank. In 1998 HNR became part of the Infiniti Technologies group, and a facilities letter issued by the bank set out new group credit facilities and proposed new interlinking suretyships. The appellants contended that this facilities letter, alternatively the bank’s conduct, waiver, estoppel, or reliance-based contract, resulted in their release as sureties. Despite this, HNR continued to utilise facilities relying on the existing suretyships, and no express written release was ever issued. When HNR later failed, the bank sued the appellants on the suretyships.

The appeal was dismissed with costs, and the judgments against the appellants as sureties were confirmed.

The case reaffirms the strict enforcement of clauses in suretyship agreements requiring releases or variations to be in writing, and underscores the continued strength of the Shifren principle in South African contract law. It clarifies that waiver, estoppel, and reliance-based arguments cannot be used to bypass formal writing requirements in suretyships.