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debtor for the debts arising from whatever cause. The creditor’s actions
can therefore not be seen as a breach of any obligation or legal duty
and the surety will not be released from its obligations. Our courts have
been very strict in recent judgments stating that sureties cannot expect
to be released from a surety merely because there is a shortfall and the
onus of proving that the creditor acted unlawfully vests with the surety.
The rights of a surety against the creditor are also very limited, with the
surety having a right of recourse against the principal debtor for any
moneys paid on behalf of the principal debtor by the surety.
There is still a duty on any creditor to mitigate damages that are suferred
and to take the necessary steps to ensure that the creditor does not
contribute to the damages. Should a surety be of the opinion that the
creditor did not take the required steps the onus will again be on the
surety to prove that the creditor acted negligently and as a result of the
creditor’s negligence, contributed to its damages.
But proceeding with execution steps and selling assets on a public
auction, is not in itself acting negligently and any proceeds realised
from such a sale will be seen as the reasonable price of the assets. The
onus that rests on a surety is therefore very high and in most instances,
it may be easier for the surety to enforce its right of recourse against the
principal debtor and not the creditor.

In your situation, unless the creditor failed to comply with a duty or
obligation contained in the principal agreement or deed of suretyship
and unless negligence can be clearly proven, it may be very difficult for
you to avoid responsibility for the shortfall. I would advise consulting with
your attorney to carefully review the contracts and facts of the matter. Litigation

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