Standard Bank of South Africa Limited and Another v Mandlakomoya Trade and Projects CC and Another

The first applicant, Standard Bank of South Africa Limited, advanced monies to the first respondent, Mandlakomoya Trade and Projects CC, under a home loan agreement, a business revolving credit plan, and an overdraft. The second applicant, SB Guarantee Company RF (Pty) Limited, was the mortgagee under a mortgage bond arrangement. The second respondent, Nonele Mathe, was the sole member of the first respondent and had bound herself as guarantor and surety/co-principal debtor for the first respondent's debts. Prior to launching a money judgment application against the respondents, the second applicant initiated liquidation proceedings against the first respondent in the KwaZulu-Natal High Court, and the first respondent was placed in final liquidation on 3 September 2024. The applicants subsequently sought money judgments against the second respondent based on the suretyships and guarantees. In response, the second respondent brought a counter-application seeking a temporary stay of the main proceedings pending the finalisation of the liquidation proceedings, hoping the liquidation of the principal debtor's main asset (mortgaged property) would settle the claims wholly or partially, thereby reducing or eliminating the amounts claimable from her.

• Whether the court should exercise its inherent discretion under section 173 of the Constitution to temporarily stay the main money judgment proceedings against the second respondent as surety/guarantor pending finalisation of the liquidation proceedings of the principal debtor (first respondent).
• Whether the fact that the principal debtor is in liquidation provides a proper basis to stay proceedings against a surety or guarantor who has waived the benefit of excussion.
• Whether the second respondent's loss of income due to the liquidation of the first respondent is a factor justifying a stay of proceedings.

The counter-application for a stay was dismissed with costs, including the costs of counsel on Scale A.

A court should not exercise its inherent discretion to stay a money judgment application against a surety or guarantor pending the liquidation of the principal debtor where the surety has expressly waived the benefit of excussion and assumed primary liability, as this would effectively reinstate a waived defence and undermine the independent rights of the creditor to enforce security.

The court stated that the list of recognised categories in which proceedings may be stayed is not a closed one, but the power should only be exercised where there is proper reason to delay a claimant from pursuing relief to which he or she is in principle entitled. The court also noted that, to the extent the second respondent held herself out as guarantor, her obligation was a primary one and excussion would in any event not be available as a defence.

This judgment clarifies that sureties and guarantors who have waived the benefit of excussion cannot use the liquidation of the principal debtor as a basis to delay enforcement proceedings against them. It reaffirms the independent nature of a creditor's rights against sureties and the courts' reluctance to allow the stay jurisdiction to circumvent contractual waivers voluntarily assumed. It is also relevant authority on the proper exercise of the court's inherent power under section 173 of the Constitution to regulate its process.