Exxaro Coal Mpumalanga (Pty) Ltd v ABSA Bank Limited (2023/028000) [2025] ZAGPJHC 499 (27 May 2025)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Case
no: 2023-028000
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
(3)
REVISED.
SIGNATURE
DATE: 27 May 2025
In the matter between:
EXXARO
COAL MPUMALANGA (PTY) LTD
Applicant
and
ABSA
BANK
LIMITED
Respondent
JUDGMENT
WILSON
J:
1
The applicant, Exxaro, is the beneficiary of a demand
guarantee issued by the respondent, ABSA. The guarantee secured the
performance
of a third party, TDS Construction and Newrak Mining JV
(Pty) Ltd (“TDS”), under a contract between Exxaro and
TDS.
Under that contract, TDS would construct mining infrastructure
for Exxaro. It was a condition of the contract that TDS would secure
the guarantee, which ABSA ultimately provided.
2
In due course, a dispute arose on the contract, and Exxaro
made a demand on the guarantee. That demand, issued on 10 June 2020,
was for the full amount secured – just over R32 million. ABSA
rejected that demand, on the basis that it did not conform to
the
terms of the guarantee. On 19 June 2020, Exxaro attempted to activate
the guarantee again – this time in the amount of
just over R22
million.
3
ABSA did not reject the 19 June 2020 demand, but nor did it
pay out the amount demanded. It emerged during argument that ABSA’s
principal reason for refusing to do so was that it considered the 19
June 2020 demand to be no more than a renewal of the 10 June
2020
demand, which ABSA had already rejected. Because, so it was
submitted, ABSA was entitled to reject the first demand, and in
fact
did so, ABSA was also entitled to refuse to pay out in respect of the
second demand without formally rejecting it.
4
In my view, ABSA was entitled to reject the first demand, but
it was not entitled to treat the second demand as no more than a
renewal
of the first. There were two separate demands, to each of
which ABSA was required to respond as distinct attempts to call up
the
guarantee. While the second demand was defective in much the same
way as the first, the terms of the guarantee are such that any
defect
in a demand may not be relied upon if ABSA fails to reject the demand
within five days of it being made. In other words,
if ABSA fails to
reject a defective demand within five days, the demand must be
treated as if it conforms fully to the terms of
the guarantee, and
the sum demanded must be paid out.
5
ABSA ultimately disavowed any right to argue before me that it
could be released from the obligation to pay out on the second demand
because of the demand’s objective failure to conform to the
terms of the guarantee. ABSA accepted that it is precluded from
raising such a defect unless it rejects the demand within five days.
I am not sure that ABSA was correct to disavow that right,
because it
seems to me that a court’s jurisdiction to determine whether,
objectively, the conditions of a contract have been
fulfilled can
never be ousted by the terms of the contract itself. But since ABSA
does not wish to take that point, I consider
myself bound by its
election.
6
ABSA also contended that the guarantee had expired by the time
the second demand was issued, and that, in any event, to order ABSA
to meet the second demand would be unconscionable. Neither of these
contentions has any merit. The second demand was made on 19
June
2020, which is the day on which the guarantee was due to expire. On
the ordinary principles applicable to the interpretation
of
contracts, the second demand was made before the guarantee expired.
Furthermore, unconscionability is not a recognised ground
for
refusing to meet an otherwise effective demand, and even if it were,
there is nothing in Exxaro’s conduct that can reasonably
be
described as unconscionable.
7
Accordingly, ABSA is obliged to pay to Exxaro the amount
specified in the 19 June 2020 demand. In what follows, I set out my
reasons
for reaching these conclusions.
The
demands made
8
On 9 June 2020, Exxaro terminated its contract with TDS on the
basis that TDS had committed various unremedied breaches. TDS
apparently
disputed Exxaro’s allegations of breach, but
nonetheless accepted Exxaro’s termination as a repudiation of
the agreement.
This underlying contractual dispute has been referred
to arbitration. In that arbitration, Exxaro claims payment of
contractual
penalties roughly equivalent to the amount stated in its
second demand.
The
first demand
9
On 10 June 2020, Exxaro presented its first demand to ABSA. On
15 June 2020, ABSA rejected the demand, on the basis that it was not
clear on the face of the demand that the signatory was authorised to
make it. The guarantee requires that “[w]ritten demands
shall
be signed by a person who warrants that he/she is duly authorised to
sign”. While ABSA did not expressly invoke this
provision, it
is clear from the correspondence that passed between the parties that
ABSA was not satisfied of the signatory’s
authority, and that
ABSA rejected the demand substantially for that reason.
10
Exxaro suggests that ABSA did not really reject the first
demand, because the language ABSA used in its letter of 15 June was
inconsistent
with an unequivocal rejection. That, in my view, is
incorrect. ABSA’s letter of 15 June says that the Exxaro’s
demand
had been “deemed unfit for processing”. In the
context of the guarantee, which provides for multiple demands to be
made on the same basis, I fail to see what that could have meant
other than that the demand was rejected. All Exxaro had to do was
submit a further demand that was “fit for processing”.
11
In any event, the first demand was overtaken by negotiations
between Exxaro and TDS. On 11 June 2020, TDS contacted Exxaro and
asked
it to stay its hand. TDS asked Exxaro to suspend its demand for
a week in order to allow the parties to settle the underlying
contractual
dispute. Exxaro was obviously concerned that the
guarantee was set to expire on 19 June 2020. On 12 June, TDS offered
to procure
a revised guarantee in order to extend Exxaro’s
security while efforts to resolve the contractual dispute went on.
12
In response to these overtures, Exxaro wrote to ABSA on 12
June 2020 and suspended the first demand. ABSA’s response, on
15
June, was not a model of clarity. ABSA first complained that the
demand itself was “deemed unfit for processing”, but
it
then said that the letter suspending the first demand was not
acceptable either, because it was contained in an email. Obviously,
if the first demand was “unfit for processing”, then it
did not matter in what form the suspension letter came, because
there
was nothing to suspend.
13
Mr. Bothma, who appeared for Exxaro, argued that this
contradiction also entailed the underlying proposition that the first
demand
was never really rejected. I do not think that is correct
either. The 15 June letter says that neither the demand nor its
suspension
were acceptable. Since it came on the last day that ABSA
could have rejected the claim under the guarantee, I think the only
sensible
way to construe ABSA’s email is that the first demand
had failed.
14
In any event, by this time, Exxaro was in talks with TDS about
the possibility of an extended guarantee. On 15 June 2020, Exxaro
wrote to TDS and stated that it would suspend its first demand on
condition that TDS obtained a new or revised guarantee on the
same
terms as the existing guarantee, save that the amount guaranteed
would be lowered to R22 165 055.66. That new or
revised
guarantee would have to be obtained before the existing guarantee
expired, and would have to be valid until 30 November
2021. A further
condition was that TDS had to agree not to attempt to interdict any
call on the revised guarantee that Exxaro may
subsequently make.
The
second demand
15
That revised guarantee never materialised on these or any
other terms. Accordingly, on 19 June 2020, Exxaro hand-delivered the
second
demand to ABSA. The second demand purported to retract the
suspension of the first demand and to call up the guarantee in the
sum
of R22 165 055.66. ABSA never responded to this demand.
16
Mr. Amm, who appeared together with Mr. Peter for ABSA, argued
that there was only ever one demand, because Exxaro suspended, and
then purported to unsuspend the first demand, albeit by making a
demand on the guarantee in a substantially lower amount.
17
But this argument is contrived. It focusses only on the
language Exxaro chose to deploy in its correspondence with ABSA. It
requires
me to ignore the context in which that language was
deployed, and the sequence of events that the correspondence
followed. Despite
the sometimes vague language that emanates from
both ABSA’s and Exxaro’s messages, when it is read in
context, the
correspondence seems to me to bear only one sensible
interpretation. Exxaro issued two demands. ABSA rejected the first,
but did
not respond to the second.
18
Mr. Amm’s argument is also inconsistent with ABSA’s
own contention that the first demand was rejected. If that is true,
then any subsequent attempt to make a call on the guarantee could
only be treated as a separate demand, notwithstanding Exxaro’s
characterisation of the second demand as an upliftment of the
suspension it had placed on the first. Moreover, the fact that the
second demand was made in a different amount, based on different
considerations arising from Exxaro’s negotiations with TDS,
renders it artificial to treat the second demand merely as an
upliftment of the suspension Exxaro placed on the first.
19
Courts are not bound by how parties choose to describe their
conduct if those descriptions do not fit the facts. Here, the facts
evaluated as a whole are inconsistent with the proposition that there
was one continuous demand rather than two separate ones.
Moreover,
the terms of the guarantee do not provide for a demand to be made and
then suspended. The guarantee opts instead for
a scheme that favours
“the separateness” of demands: demands can be made, and
then withdrawn, and then made again without
prejudice to Exxaro’s
rights.
The
interdict application
20
On 22 June 2020, TDS applied to this court for an order
interdicting ABSA from making payment on the 10 and 19 June demands.
The
matter was enrolled before Lamont J on 2 November 2020. Lamont J
delivered judgment on 16 November 2020. Lamont J found that TDS
was
entitled to an interdict because neither of Exxaro’s demands
conformed to the requirements of the guarantee.
21
Lamont J found, in particular, that neither demand warranted
the signatory’s authority to make a call on the guarantee; that
neither demand specifically alleged that the amount demanded was due
and payable; and that neither demand was supported by a statement
setting out the respect in which TDS was in breach of its contractual
obligations (see TDS Projects Construction and Newrak Mining JV
(PTY) Ltd vs Exxaro Coal Mpumalanga (Pty) Ltd [2020] ZAGPJHC 445
(16 November 2020), paragraphs 19 to 21).
22
Lamont J went on to conclude that ABSA’s failure to
respond to the second demand made no difference to TDS’s
entitlement
to relief because, though there were two demands, both
demands “constituted one act of making demand”.
Accordingly,
Lamont J reasoned, the rejection of the first demand was
also a rejection of the second demand (see paragraph 24 of the
judgment).
For the reasons I have given, I cannot support this
conclusion. I find it particularly difficult to understand how the
second demand,
which Lamont J treated as factually separate from the
first, could have been rejected before it was made. Viewed in their
factual
and contractual setting, the two demands were plainly
separate acts “of making demand”.
23
In any event, Lamont J’s judgment was later overturned
by the Supreme Court of Appeal. In Exxaro Coal Mpumalanga (Pty)
Ltd v TDS Projects Construction and Newrak Mining JV (Pty) Ltd
[2022] ZASCA 76 (27 May 2022), the Supreme Court of Appeal concluded
that TDS had failed to show that it reasonably apprehended any harm
in the
event that ABSA paid out on the guarantee.
24
The essence of TDS’s case was that ABSA was not entitled
to pay out on Exxaro’s demand, because that demand failed to
conform to the guarantee. If ABSA did so, however, it did not
automatically follow that TDS would have to honour any claim for
the
sum so paid out. In circumstances where ABSA honoured a demand that
did not conform to the terms of the guarantee, TDS would
have “a
complete defence to any claim founded on the honouring of the
guarantee when ABSA was not obliged to do so”
(see the Supreme
Court of Appeal’s judgment at paragraph 15). TDS had
accordingly failed to demonstrate, so the Supreme Court
of Appeal
found, that it was entitled to interdictory relief.
25
ABSA argued that Exxaro is issue estopped from challenging
Lamont J’s factual findings on the validity of each of the
demands,
and his finding that the two demands “constituted one
act of making demand”. I do not agree. Issue estoppel is
fundamentally
an equitable doctrine. A party will not be issue
estopped from re-opening a previously decided factual issue if to
prevent them
from doing so would be unfair in all the circumstances
(Prinsloo NO v Goldex 15 (Pty) Ltd 2014 (5) SA 297 (SCA),
paragraph 26).
26
In this case, the unfairness to Exxaro is manifest. It has
maintained throughout that Lamont J’s factual findings are
wrong.
It won an appeal against Lamont J’s judgment. However,
the question of whether Lamont J was right to conclude that the first
and second demands were both inseparable and invalid was never
finally answered because the Supreme Court of Appeal set aside Lamont
J’s judgment on different grounds. Exxaro now has no way of
challenging those findings except by asking me to reconsider
them.
And, left undisturbed on the basis that Exxaro is issue estopped from
challenging them, Lamont J’s findings would spell
the end of
Exxaro’s application, rendering its victory on appeal nugatory.
That result would plainly be both perverse and
grossly inequitable.
The
application before me
27
The decision of the Supreme Court of Appeal left the parties
back where they started. This meant that Exxaro had to sue ABSA to
make good on either the 10 or 19 June 2020 demand. Exxaro now asks me
to order ABSA to make payment in terms of the 10 June 2020
demand. In
the event that I should find that ABSA is not obliged to pay out on
that demand, Exxaro asks that I order it to pay
out on the 19 June
2020 demand. TDS applied for leave to intervene in the application,
but Fisher J refused that relief. Both Fisher
J and the Supreme Court
of Appeal refused leave to appeal against that decision.
28
The primary questions before me are accordingly whether either
the first or the second demand conformed to the terms of the
guarantee,
and whether, if they did not, ABSA is nonetheless
precluded from withholding payment because it failed to reject either
or both
of them. If Exxaro is entitled to payment on either demand,
then ABSA raises the question of whether it would nevertheless be
unconscionable
to order payment on an otherwise actionable demand.
29
I turn first to the guarantee and its terms.
The
guarantee and its terms
30
It was common ground between the parties that the guarantee at
issue in this case is an “on demand” guarantee.
Guarantees
of this nature provide an especially strong form of
security for an employer under a construction contract. “On
demand”
guarantees – sometimes referred to as “call
bonds” – provide for the employer to call up the
guarantee
in any amount on the mere notification to the guarantor
that an event specified in the guarantee has taken place. In other
words,
all that is needed is a demand that conforms to the terms of
the guarantee. It is not incumbent upon the employer to establish the
nature and extent of the contractor’s liability to it (Minister
of Transport and Public Works Western Cape v Zandbuild 2011 (5)
SA 528 SCA, paragraph 16). Nor does the employer have to allege that
there is any specific amount due to it at all, unless, of course,
the
amount owing by the contractor to the employer itself constitutes
part of the event specified in the guarantee.
31
So, for example, if a guarantee states that it may be called
up on a breach of contract, all the employer, in this case Exxaro,
has to allege is that there is such a breach. In that event, the full
amount due in terms of the guarantee becomes payable if that
is what
the employer demands. If, however, the guarantee states that the
employer may call up the bond on breach only to the extent
that it is
necessary to remedy the breach, then the employer must allege both
that there is a breach and the amount it considers
necessary to
remedy the breach. In neither case, however, is the employer required
to establish that there is a breach, or the
nature and extent of the
amount necessary to cure it. The guarantee is called up on the mere
say-so of the employer.
32
Accordingly, it does not matter to the guarantor, in this case
ABSA, whether there is actually a breach of contract, or whether the
amount called up is necessary to cure the breach. The guarantor is
not entitled to go behind the employer’s demand, so long
as the
demand conforms to the terms of the guarantee itself. The guarantor’s
obligation to pay out on the guarantee is wholly
independent of the
underlying contract between the employer and the contractor. Any
disputes between the employer and the contractor,
in this case TDS,
about whether there really is a breach, and the extent of the
liability arising from it, are irrelevant to the
guarantor’s
duty to pay on demand from the employer (see Coface South Africa
Insurance Co Ltd v East London Own Haven t/a Own Haven Housing
Association 2014 (2) SA 382 (SCA) (“Coface”),
paragraphs 13 to 16, 22 and 25 to 26).
33
The one exception to this position is fraud. If the employer
makes a demand on the guarantee knowing full well that the event
specified
in it has not occurred (for example that there is not
actually a breach of contract), then the guarantor has no duty to pay
out
on the demand, and the contractor is entitled to an interdict
restraining it from doing so (see Guardrisk Insurance Company v
Kentz (Pty) Ltd [2014] 1 All SA 307 (SCA) paragraph 17).
34
The principal question in cases like this is accordingly
whether a demand conforms to the terms of the guarantee. If it does,
then
the amount demanded must be paid.
The
URDG
35
In this case, that question is more complex than usual,
because the guarantee incorporates the Uniform Rules for Demand
Guarantees
(“the URDG”). The URDG is a set of
internationally-formulated rules governing the process for making and
examining
demands issued on demand guarantees. The URDG has no
binding effect unless incorporated into the terms of a particular
guarantee.
The application before me was argued on the basis that the
URDG is to be treated as part of the guarantee, and accordingly that
it is binding between the parties.
36
demand under the guarantee shall be supported by such other documents
There are four articles of the URDG of particular relevance in
this case. First, there is article 15 (a), which provides that “[a]
as the guarantee specifies, and in any event by a statement
by the
beneficiary, indicating in what respect the applicant is in breach of
its obligations under the underlying relationship.
This statement may
be in the demand or in a separate signed document accompanying or
identifying the demand”. Article 15
(c) allows the parties to
contract out of this requirement, but there is no suggestion of that
in this case.
37
Second, there is article 17, which provides that –
a. A demand
may be made for less than the full amount available (“partial
demand”).
b. More than
one demand (“multiple demands”) may be made.
c. The
expression “multiple demands prohibited” or a similar
expression means that only one demand covering
all or part of the
amount available may be made.
d. Where the
guarantee provides that only one demand may be made, and that demand
is rejected, another demand can be
made on or before expiry of the
guarantee.
e. A demand
is a non-complying demand if:
i. it is for
more than the amount available under the guarantee, or
ii. any supporting
statement or other documents required by the guarantee indicate
amounts that in total are less than the
amount demanded.
Conversely, any
supporting statement or other document indicating an amount that is
more than the amount demanded does not make
the demand a
non-complying demand.
38
Third, there is article 18, which provides both that “[m]aking
a demand that is not a complying demand or withdrawing a demand
does
not waive or otherwise prejudice the right to make another timely
demand, whether or not the guarantee prohibits partial or
multiple
demands” and that “[p]ayment of a demand that is not a
complying demand does not waive the requirement for
other demands to
be complying demands”.
39
Fourth, there is article 24, the relevant parts of which
required ABSA to examine Exxaro’s demand to determine whether
it
was “compliant”, in the sense meant in article 17 (e).
If ABSA determined that the demand was not compliant, then it
had to
say so, by issuing a notice stating that it is rejecting the demand,
and setting out each discrepancy between the demand
and the
requirements of the guarantee forming the basis of the rejection.
Article 24 (e) required that this notice be sent within
five business
days. If no such rejection was issued, then, under article 24 (f) of
the URDG, ABSA was “precluded from
claiming that the
demand and any related documents do not constitute a complying
demand”. In those circumstances, the URDG
clearly contemplates
that the guarantor must honour even a non-compliant demand.
The
demands issued in this case
40
It is clear to me that neither of Exxaro’s demands
conformed to the terms of the guarantee, for at least the reasons
Lamont
J gave. Neither demand made the supporting statements that the
amounts demanded were “due and payable” and that the
signatory to the demand was authorised to make it. These statements
are both required under the guarantee, read with 17 (e) (ii)
of the
URDG. In addition, neither demand was supported, as article 15 (a)
requires, “by a statement by the beneficiary, indicating
in
what respect the applicant is in breach of its obligations under the
underlying relationship”. Both demands said no more
than that
“the Demand amount” was payable to Exxaro as a result of
TDS’ “failure to perform in terms of
the Contract and its
deemed event of default as per clause 32 of the agreement”.
41
I do not know what this means. Mr. Bothma could not tell me
what it means, and it seems to me that article 15 (a) required a
clear
and unambiguous statement of the respect or respects in which
TDS was in breach of the underlying contract. None was given.
42
This is not, of course, the end of the matter, because, under
articles 24 (e) and (f) of the URDG, ABSA could not rely on these
defects in the demands unless it rejected each of the demands within
five days of receipt. As I have already found, ABSA did reject
Exxaro’s first demand within five days, substantially on the
basis that it did not contain the warranty of authority the
guarantee
requires. Although ABSA did not use the word “reject”,
the URDG makes clear that equivalent language will
do. It seems to me
that a demand being “deemed non-compliant” is such
language.
43
However, ABSA did not reject the second demand, and was
accordingly precluded, under article 24 (f), from claiming that the
second
demand was non-compliant. At the hearing of the matter, I
asked counsel whether this really mattered, since the second demand
was
plainly non-compliant with the guarantee, and article 24 (f) does
not preclude me from considering whether, objectively speaking,
the
second demand conformed to the guarantee’s terms.
44
Mr. Amm initially suggested that I am so precluded by virtue
of ABSA’s election to be bound by article 24 (f). Insofar as
ABSA chooses not to argue that the demand was non-compliant, that
must be correct. While article 24 (f) cannot oust my jurisdiction
to
consider whether, objectively, the second demand conforms to the
terms of the guarantee, ABSA would have to raise that failure
to
conform as a defence to Exxaro’s claim for payment. If it did
not, considering itself contractually bound to refrain from
doing so,
I think that I would have to honour ABSA’s election.
45
However, having taken an instruction from his attorney, Mr.
Amm confirmed that ABSA did in fact seek to rely on the second
demand’s
failure to conform to the terms of the guarantee, but
only in the event that I rejected ABSA’s primary argument that
the
first and the second demand were really one continuous demand. I
reserved judgment on that basis, and invited the parties to make
post-hearing submissions on, amongst other things, the meaning and
application of article 24 (f), and the question of whether the
first
and second demands were to be treated as separate or as one
continuous demand.
46
In those supplementary submissions, delivered on 16 May 2025,
ABSA changed tack again. It reverted to its initial position that I
am precluded from considering whether the second demand conforms to
the terms of the guarantee because ABSA considered itself bound
by
article 24 (f). At paragraph 3 of the submissions, counsel stated
that ABSA “does not endorse nor pursue an argument that
Absa’s
failure to reject the 19 June 2020 “demand” does not
preclude the Court from declining to enforce the
demand by reason of
its failure to conform to the terms of the Guarantee”.
47
The concession is wordy but clear. ABSA disavows any right to
argue that I can ignore article 24 (f) if the second demand
objectively
failed to conform to the guarantee. ABSA was content to
rest instead on the argument – which I have rejected –
that
the first and second demands cannot be separated, and that the
rejection of the first demand was necessarily a rejection of the
second demand.
48
The nett result of all of this is that ABSA must honour the
second demand, notwithstanding the demand’s obvious failure to
conform to the terms of the guarantee, because ABSA failed to reject
it.
The
guarantee’s expiration date
49
This renders it necessary to deal, briefly, with the argument
that the second demand was ineffective because it was made after the
guarantee expired. This argument was built on the text of the
guarantee, the relevant part of which says that “[t]his
guarantee shall expire on 19 June 2020 (“Expiry Date”). Any
claim and statement received hereunder must be received at
this
office before the Expiry Date. After the Expiry Date, this guarantee
shall lapse, whether returned to the Bank for cancellation
or not and
any claim or statement received after the Expiry Date shall be
ineffective”.
50
Mr. Amm argued that the words “must be received at this
office before the Expiry Date” mean that the second demand had
to be made by 18 June 2020 – i.e. “before the Expiry
Date”. This hyper-literal interpretation does not bear the
merest scrutiny. Read sensibly as a whole, the text I have quoted
specifies that the guarantee expires on 19 June 2020, and that
a
demand must reach ABSA before the guarantee expires. The
interpretation for which Mr. Amm contended would have the bizarre
consequence
that the guarantee would still be effective on 19 June
2020, but for 24 hours before it expired, Exxaro would be precluded,
for
no good reason at all, from making a demand on the guarantee.
51
If more were needed (it is not), I would point out that in
Dormell Properties 282 CC v Renasa Insurance Co Ltd 2011 (1)
SA 70 (SCA) 2011 (1) SA 70 (SCA), at paragraph 59, it was said that
“where a contract does not require a period of time to be
calculated, but provides
that the entitlement to exercise a right or
the obligation to perform a duty ends on a specific day” then
“the right
may be exercised, or the obligation performed, on
that day”. Although this quote is culled from the minority
decision, the
majority decision in Dormell was later found to
have been clearly wrong (see Coface, paragraph 25). That, in
my view, renders the minority decision good authority. The guarantee
expired on 19 June 2020. The second
demand reached ABSA on 19 June
2020. The matter ends there.
Unconscionability
52
It remains to deal with ABSA’s argument that the demand
on the guarantee was unconscionable. In truth, the argument never
really got off the ground. I asked Mr. Amm what “unconscionable”
means in this context. He could do no better than to
point to
Exxaro’s conduct in this case.
53
However, I see nothing
unconscionable, in the sense of unreasonable or excessive, about what
Exxaro did in this case. Its first
demand on the guarantee was made
in the belief that TDS was in breach of contract. Nobody has argued
that Exxaro did not honestly
believe this to be so, or that the
demand was excessive in light of the breach alleged. Mr. Amm
suggested that the discrepancy
between the two demands implied
unconscionable conduct. I do not see how. Exxaro’s second
demand moderated the first after
engagement with TDS. There is no
suggestion that the moderated demand was excessive or unreasonable,
and Exxaro’s willingness
to moderate its demand suggests that
its conduct was far from unconscionable.
54
To accept ABSA’s
argument based on unconscionability, I would have to develop the
common law. But without some identifiably
unconscionable feature of
Exxaro’s conduct in this case, there is nothing to trigger such
an exercise.
Order
55
It follows that Exxaro is
entitled to payment on its second demand. There will be an order in
those terms. Costs will follow the
result. The factual complexity of
this case is such that a costs order on the “C” scale is
appropriate.
56
For all these reasons –
56.1 The
respondent is directed to pay the applicant the sum of R22 165 055.66
(twenty-two million, one hundred
and sixty-five thousand and
fifty-five rand and sixty-six cents) within fifteen days of the date
of this order.
56.2 The
respondent is directed to pay interest on that amount at the
prescribed rate of interest, calculated from 27 June
2020 to the date
of final payment.
56.3 The
respondent will pay the costs of the application, including the costs
of one senior counsel, whose fees may be taxed
on scale “C”.
S
D J WILSON
Judge
of the High Court
This
judgment is handed down electronically by circulation to the parties
or their legal representatives by email, by uploading
it to the
electronic file of this matter on Caselines, and by publication of
the judgment to the South African Legal Information
Institute. The
date for hand-down is deemed to be 27 May 2025.
HEARD
ON:
29 April 2025
FURTHER
SUBMISSIONS: 16 May 2025
DECIDED
ON:
27 May 2025
For
the Applicant:
C Bothma SC
Instructed by DLA Piper
For
the Respondent:
G Amm SC
L Peter
Instructed by Lowndes
Dlamini
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