Standard Bank of South Africa Limited v McCrae (21128/2015) [2019] ZAGPJHC 206 (25 June 2019)

/ / 2019, Contract Law, Contractual Capacity, News, Suretyship


On 12 November 2009, a written loan agreement had been concluded between the Applicant and of Strike Productions (Pty) Ltd (“Strike”) (the “Loan”). In terms of the Loan, an event of default would occur if Strike was liquidated. In such instance, the Standard Bank of South Africa Limited (the “Applicant”) would require full payment of all Strike’s indebtedness under the Loan.  

On 26 May 2011, Leah Ann McCrae (the “Respondent”) signed a deed of suretyship in favour of the Applicant as security for the Loan amount (the “Suretyship”).  Strike was liquidated in 2014 and thus all amounts owing by Strike to the Applicant became due, owing and payable.  

In June 2015, the Applicant launched an application in the High Court of South Africa, Gauteng Local Division (the “Court a quo), against the Respondent in respect of the Suretyship. The Respondent raised the defence that she lacked the requisite contractual capacity at the time she signed the Suretyship.  

The Respondent contended that during May 2011, she was not in a mental state to freely and voluntarily make an election to sign the Suretyship, alternatively that the Respondent lacked the necessary mental capacity to have understood what she was signing. It was common cause that the Respondent had the onus to show that at the time of signing the Suretyship, she lacked the necessary contractual capacity. In this regard, the Respondent relied solely on a report and affidavit of a clinical psychologist, Ms de Raay (“De Raay”). De Raay stated in her report, inter alia, that the Respondent would not have appreciated what she was signing. The Court a quo deemed it just and equitable to refer the aspect of her contractual capacity to oral evidence.  

When the Respondent testified, her version was contradictory to that which she had deposed to in the Application. The Respondent stated that she did not recall ever signing the Suretyship. This aspect was never raised in either the Respondent’s answering affidavit nor supplementary affidavit. The Respondent’s supplementary affidavit stated that she was not in sound and sober mind when she signed the Suretyship on the 26th May 2011and could not apply her mind to what was happening around her when signing same. There was no mention in the Respondent’s affidavit that she did not remember signing the Suretyship. Her statements were therefore in contrast to what she stated in her testimony before the Court.  

The Respondent’s evidence in relation to her mental capacity was that her two medical practitioners had prescribed a cocktail of medication. The only expert to testify on behalf of the Respondent was Professor Rambiritch, who gave evidence on the possible side effects of the Respondent’s medication and posited that the stated side effects were a mere possibility and not a certainty. Professor Rambiritch did state that the cocktail taken could have impaired her memory and caused cognitive impairment. De Raay, however, failed to testify on behalf of the Respondent.  

Dr Fine, the psychiatrist who gave evidence for the Applicant, testified that the Respondent’s dosage of her medication was relatively low, that a person’s cognitive ability would not be significantly affected and that the chances of the cocktail of medication leading to contractual incapacity was very low. 


The Court held that the Respondent’s defences previously raised, being non-disclosure and duress, are in total contrast to her oral testimony. The Court ruled that if the Respondent had no recollection of signing the Suretyship, she would not recall that the terms of the Suretyship were not adequately explained to her and/or that she was pressurised into signing the Suretyship. The Court, therefore, rejected her version on the facts and probabilities.

In analysing whether the Respondent had discharged the onus to show that at the time of signing the Suretyship, the Respondent lacked the requisite mental capacity to have understood the Suretyship, the Court considered the Respondent’s two conflicting versions and stated that when there are two mutually exclusive versions, the Court is required to qualitatively assess the truth and/or inherent probabilities of the evidence before the Court and then ascertain which of these two versions are the more probable.

The Court, having regard to the contradictory evidence given by the Respondent in her affidavits, together with De Raay’s report, compared to the Respondent’s testimony, was of the view that the Respondent’s credibility was questionable. Moreover, the failure by the Respondent to call the two doctors who prescribed the medication was detrimental to her case. Without the appropriate factual evidence, the Respondent was not able to discharge the onus upon her. The Court therefore ruled that the Application was to succeed.


If a surety should raise a “special” defence such as illegality, fraud or lack of contractual capacity, he/she would have an onus to prove same and would be required to present evidence in support thereof.

Written by Saul Mayers and supervised by Jonathan Salant

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