Firstrand Bank Limited v Roux and Another (6325/2017) [2017] ZAGPPHC 1291 (18 December 2017)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) NOT REPORTABLE

(2) NOT OF INTEREST TO OTHER JUDGES

(3) REVISED

CASE NO.: 6325/2017

18/12/2017

In the matter between:

FIRSTRAND BANK LIMITED

Applicant

and

JOHAN ROUX

First Respondent

(ID No.: [….])

ISABELLA PETRONELLA ROUX

Second Respondent

JUDGEMENT

DE VOS J:

[1] The Applicant, a Bank and financial institution, claims for payment in the amount of R1 207 497,56 together with interest thereon, and costs of the application on a scale as between attorney and client, against

the Respondents. The claim is based on suretyship. The Respondents signed a deed of suretyship in favour of the Applicant by virtue of an overdraft facility afforded by the Applicant to a private company known as Safrinut (Pty) Ltd ("Safrinut").

[2] The claim against the First Respondent arises from a suretyship agreement in terms whereof the First Respondent became the co-principal debtor of the debts and obligations owing by Safrinut to the Applicant. The overdraft was granted to Safrinut by the Applicant in 2008. At the time of granting the overdraft the First Respondent bound himself as surety and co-principal debtor for the liabilities of Safrinut. The Second Respondent is married in community of property to the First Respondent and is similarly bound in terms of the surety agreement.

[3] It is common cause that the overdraft facility was annually renewed on application of Safrinut. The present claim arises from an extended overdraft facility pursuant to the 2008 facility, when the annual revised overdraft facility was extended in terms of a new written facility agreement, entered into on the 11t h of November 2014. This agreement is annexed to the founding affidavit. It is not disputed that the 2008 overdraft facility, as well as the extended facility

granted in 2014, relate to Safrinut's same overdraft account. It is further common cause that the First Respondent was the sole director of Safrinut for the whole period, i.e. from 2008 when the overdraft facility was granted until Safrinut went into voluntary liquidation in 2016.

[4] The First Respondent does not dispute that he signed an unlimited deed of suretyship in favour of the Applicant in 2008, in terms whereof the First Respondent bound himself as surety in solidum, and co-principal debtor jointly and severally, for and with Safrinut for the due payment by Safrinut of all and any monies which Safrinut may, now or from time to time thereafter, owe to the Applicant from whatsoever cause and howsoever arising, as well as for the due and punctual performance and discharge of any contract or agreement entered into.by Safrinut and the Applicant.

[5] The First Respondent raises the defence of justus error claiming that certain terms of the deed of suretyship entered into in 2008 were not explained to him when he signed the deed of security. The defence is articulated verbatim as follows in paragraph 12 of the Respondents' Answering Affidavit:

"12.2 I recognize my signature on the suretyship, Annexure "CB8" to the founding papers.

12.3 However, when this document was signed it was not explained to me in any manner whatsoever, at no stage. Crucially the impact of the wording of the suretyship document was not explained to me. Especially the fact that the suretyship was for an unlimited amount for an indefinite period and for any debt.

12.4 I was at the office of the Applicant at Centurion where I signed documents including the suretyship in the presence of the representative of the Applicant at that time. There was ample opportunity to explain the document to me, but this was not done.

12.5 It was not explained to me what the suretyship entails, nor was it explained to me that this suretyship can be used against me ad infinitum in the future when I was under the impression and believed that the suretyship can only be relevant and applicable to a specific transaction in this case a structure facility that I applied for in 2008.

12.6 Furthermore, the credit facility in respect of which I signed the suretyship was called up and cancelled during 2011 without notice. Thereafter a new credit application was done during December 2011. I annex hereto the application document sent to me as Annexure "JR5".

12.7 A new credit facility was awarded pursuant to the aforementioned new credit application. The documents in respect of this credit application were sent to Port Alfred Branch and I signed the documents there, those being presented to me.

12.8 When the aforesaid facility, second, new facility, was granted there was no suretyship agreement and I was satisfied that I was not a surety in respect of the new facility.

12.9 The requirements for the new facility were enunciated in correspondence by the Applicant on 22 June 2011, a copy annexed hereto marked Annexure "JR6". A surety was not requested. I was completely unaware that the 2008 suretyship could possibly still be applicable. I was not told that a fresh surety is not required because the Applicant believe that it can rely on the previous one.

12.10 The suretyship is signed in Centurion on the 3rd of July 2008 and I never intended that this suretyship bind me for future applications, credit facilities at the Applicant.

12.11 It was not explained to me that this suretyship can be used for this purpose as the Applicant now relies upon in its application, nor was it explained to me that the suretyship is for an unlimited amount. Had the surety been explained to me, its affects being explained to me and how drastic a measure it is I would have never signed it and rather applied for financial assistance elsewhere or restructured my finances."

[6] The Respondents also pleaded that the surety agreement was signed in contravention of the National Credit Act 34 of 2005.

[7] The Respondents' version as pleaded in paragraph 12 of their answering affidavit can be summarised as follows: that the surety agreement signed by him in 2008 was never explained to him; and that the credit facility for which he signed surety in 2008 was called up and cancelled during 2011 without notice. In December 2011 an application was made for a new credit facility by the same insolvent company to the Applicant. A new credit facility was awarded pursuant to the aforementioned new credit application. The new credit facility and the annexures and the documents completed by the First Respondent did not include a request that a further suretyship was required. The Respondents were therefore unaware that a surety dated more than six years before the new credit facility were applicable both to the first and second credit transactions.

[8] The departure point of the Respondents' plea is that the contents of the

suretyship signed in 2008 were not explained to him and that the overdraft was called up and cancelled during 2011. I cannot find

support for any of these contentions in the documentation before me. If the 2008 overdraft facility remained an obligation of Safrinut

until repayment, it follows that when application was made for an increase in the overdraft facility it automatically included the existing facility. This appears from the following. The document relied on by the Respondents dated 2011 (see annexure "JR5"

on p137-146 of the record) is part and parcel of the yearly renewal of overdraft facilities. In terms of paragraph 3 thereof, it requires collateral cover in the form of unlimited suretyships from both the Respondents, as set out in clauses 3.1 and 3.2 thereof, i.e. for any and all obligations of Safrinut. It starts off with the words "[n]otwithstanding and/or detracting from any security currently held by the Bank (if any), the utilisation by the Client of the above facility/ies is conditional upon the following collateral/agreements being provided to the Bank for the obligations of the Client towards the Bank", and then it sets out several obligations. At the end of paragraph 3 the following words appear:

"It is noted for recordal purposes and for the avoidance of doubt that any and/or all collateral given in favour of and/or held by the Bank in respect of any and/or all of the obligations of the Client towards the Bank will apply and/or may be applied by the Bank to any indebtedness of the Client towards the Bank as a whole, and accordingly the collateral applies across all the divisions of the Bank with which the Client holds or may in future hold a facility and/or is indebted or may in future become indebted to, and includes, but is not necessarily limited to, indebtedness of the Client at the Bank's FNB Corporate Transactional Banking-, Commercial-, Wesbank-, Rand Merchant Bank-, Property Finance- and/or FirstCard Division(s) and/or any other division of the Bank."

[9] The Respondents' reliance on annexure "JR5" does not assist them at all. The document "JR5" is incomplete. It does not contain any signature as required on page 146 (the last page) of the

agreement. The reliance which the Respondents place on the alleged cancellation of the overdraft in 2011 finds no support in this

document, or any other documentation placed before me.

[10] The First Respondent also contends that he was, at no stage, aware of the fact that the extended overdraft facilities, or any new overdraft facility, were covered by the suretyship on which the Applicant relies. It is apparent that overdraft facilities were annually renewed by the same company, Safrinut. When the First Respondent applied for further facilities on behalf of the same company he must have been aware that the existing suretyships, which covered the original overdraft as well as extended facilities, were still applicable as such overdraft was not paid off and no release was given to him in terms of his suretyship. The First Respondent's alleged "unawareness" is not corroborated by the facts before me.

10.1 Nowhere do the Respondents say that the overdraft for which they were responsible was called up by the bank and repaid. It follows that when they applied for a new or extended facility they were fully aware of the existing suretyship for which they were still liable.

10.2 From 2008, when the original facility was granted, until the company was liquidated in 2016, the First Respondent was the only director of Safrinut. He is therefore the only person responsible for the affairs of the company. In the absence of any explanation as to when and where the first debt stemming from the 2008 overdraft facility was repaid, the conclusion is inescapable that he was fully aware of the existence of the existing suretyship when he re-applied for overdraft facilities for the same company under the same account number.

10.3 The First Respondent does not deny that he signed the original suretyship. He does not say that he was informed by the Applicant

that the original suretyship was cancelled or when it was cancelled.

[11] The First Respondent's denial must be evaluated against the undisputed facts that he, the sole director of Safrinut, approached the Applicant for an overdraft which was granted upon specific terms and conditions. At the time the application for an overdraft was made the First Respondent must have been a rather wealthy businessman to qualify for such an overdraft. The money was borrowed to allow Safrinut to exploit a business opportunity. Acting on behalf of Safrinut one must accept that in the absence of special circumstances the First Respondent and his wife, the Second Respondent, were fully aware that they bound themselves when they signed the suretyship. It is indicative that nobody forced or coerced them to bind themselves as sureties. It is also important to note that the First Respondent does not deny that he signed a deed of suretyship in favour of the bank in 2008. His complaint is that nobody explained to him that it was to be for an indefinite period and for an unlimited amount.

[12] The First Respondent's plea that the contents of the deed of security was not properly explained to him when he signed the documents in 2008 is based on what was said in Davids & Andere v Absa Bank Bpk 2005 (3) SA 361 (C) at 3701-371A where Fourie J, with Knoll and Bozalek JJ concurring, said the following:

"Ek is verder van mening dat 'n redelike persoon in die gegewe omstandighede die aard en inhoud van die betrokke borgaktes aan die appellante sou verduidelik het ten einde te verseker dat hulle ware bedoeling korrek daarin weergegee word."

It is the Respondents' case that the Applicant had a duty to speak and to alert the Respondents that the suretyship is still applicable to the increased overdraft facility, as was held in Parys Development Properties (Pty) Ltd v Metzer 2016 JDR 0243 (WCC). See also Brink v Humpries & Jewel (Pty) Ltd 2005 (2) SA 419 (SCA) at 412G - 4228. In my view the cases relied upon by the Respondents are distinguishable from the present case before me. The cases mentioned above all refer to new applications where a suretyship was required. The present case relates to a request for increased facilities based

on the extension of an existing facility agreement that was concluded in 2008. The First Respondent, as the sole director of Safrinut, was fully aware of the fluctuating balance of the overdraft facility. He does not say that Safrinut repaid the overdraft. Nowhere did he avail himself to the right to terminate the suretyship. See Kalil v Standard Bank of South Africa 1967 (4) SA 550 (A) at 555; and Oceanair (Natal) (pty) Ltd v Sher 1980 (1) SA 317 (D) at 324. The Respondents' admission that they signed a deed of suretyship in 2008 corroborates the Applicant's version that the Respondents consented to become liable for Safrinut's obligations toward the Applicant. No explanation is given by the Respondents as to why they signed the deed of suretyship in 2008. The Respondents' contrasting version is that the Applicant failed to explain the terms

of the deed of suretyship to them.

[13] By virtue of the doctrine of quasi-mutual assent, contractual liability may ensue even when there is no consensus. When a man signs a contract he is bound by the ordinary meaning and effect of the words which appear over his signature. See Burger v Central South African Railways 1903 TS 571. In George v Fairmead (pty) Ltd 1958 (2) SA 465 (A) at 471A-D it was held that if a party to a contract has led the other party to believe that he was binding himself, but this assent was given due to a misrepresentation of the contractual terms by the second party, then the first party is not to blame for the error:

"When can an error be said to be justus for the purpose of entitling a man to repudiate his apparent assent to a contractual term? As I read the decisions, our Courts, in applying the test, have taken into account the fact that there is another party involved and have considered his position. They have, in effect, said: Has the first party - the one who is trying to resile - been to blame in the sense that by his conduct he has led the other party, as a reasonable man, to believe that he was binding himself? . . . If his mistake is due to a misrepresentation, whether innocent or fraudulent, by the other party, then, of course, it is the second

party who is to blame and the first party is not bound."

However, in National & Overseas Distributors Corporation (pty) Ltd v Potato Board 1958 (2) SA 473 (A) at 479G-H it was held as follows:

"But where the other party has not made any misrepresentation and has not appreciated at the time of acceptance that his offer was being accepted under a misapprehension, the scope for a defence of unilateral mistake is very narrow, if it exists at all. At least the mistake (error) would have to be reasonable Gustus) and it would have to be pleaded."

If one party to a contract has led the second party to believe that he, the first party, was binding himself when there was no misrepresentation - whether unintentional or fraudulent - by the second party, then the first party is bound by the contract which he signed.

[14] In light of the above, the "decisive question" that has to be asked and answered in a case such as this was formulated in Sonap Petroleum SA (Pty) Ltd (formally known as Sonarep SA (Pty) Ltd) v Pappadogianis [1992] ZASCA 56; 1992 (3) SA 234 (A) at 2391-2408 . This decision was followed and applied in Slip Knot Investments 777 (Pty) Ltd v Du Toit 2011 (4) SA 72 (SCA) at para 9:

"Did the party whose actual intention did not conform to the common intention expressed, lead the other party, as a reasonable man, to believe that his declared intention represented his actual intention? . . . To answer this question, a three-fold enquiry is usually necessary, namely, firstly, was there a misrepresentation as to one party's intention; secondly, who made that misrepresentation and thirdly, was the other party misled thereby? . . . The last question postulates two possibilities: was he actually misled and would a reasonable man have been misled?"

[15] In Hartley v Pyramid Freight (Pty) Ltd tla Sun Couriers 2007 (2) SA 599 (SCA) at para 9 it was held that a contracting party is not bound to inform the other party of the terms of the proposed agreement:

appellant) did not understand the meaning, contents or import of the document, is irrelevan.t The appellant himself was indifferent to the provisions of the conditions of carriage which he knew would be contained in that document. He did not bother to read them. There was no obligation on Mrs Barnard to point out the possible consequences. To hold otherwise would be to introduce a degree of paternalism in our law of contract at odds with the caveat subscriptor rule"

Consequently, there is only a duty to inform the other contracting party where there are terms that could not reasonably have been expected in the contract. See Slip Knot supra at para 12. This is confirmed by Wunsch J in Tesoriero v Bhyjo Investments Share Block (Pty) Ltd 2000 (1) SA 167 (W) at 175F-H.

[16] The Respondents held that the deed of suretyship was signed by the First Respondent on the 3rd July 2008. This deed of suretyship was signed at the offices of the Applicant at Centurion in the presence of the Applicant's representatives, who signed as witnesses. It is not disputed that there was ample opportunity and/time for the First Respondent to read and peruse the suretyship, including the facility agreement. There is no allegation that the Applicant’s representatives misled (whether intentionally, negligently, or innocently) the First Respondent as to the content of the suretyship at that time. It is not alleged there is, or was, a legal duty on the Applicant and/or its representatives to inform the First Respondent of the content of that suretyship. The First Respondent's defence is that no agreement of suretyship was concluded in 2011 because he lacked the necessary intention to be bound. The facts before me do not support the First Respondent's contentions. The Applicant does not allege that there was a new security agreement in 2011. Applicant relies on the security agreement entered into in 2008.

[17] The First Respondent, on signing the surety agreement in 2008, let the Applicant, as a reasonable man, to believe that his declared intention represented his actual intention, as it is not alleged that the Applicant made any misrepresentation to the First Respondent in 2008. It follows logically that the First Respondent is solely to be blamed for his own misfortune as he was clearly not misled (be it intentionally or negligently or mistakenly) by the Applicant or any of its representatives. He had ample opportunity to read the Deed of Suretyship before signature, and by signing the Deed of Suretyship he consequently misled the Applicant into believing that his declared intention, i.e. the signing of the Deed of Suretyship, represented his actual intention. Consequently the First Respondent is bound on the basis of quasi mutual assent.

[18] Having regard to the fact that the First Respondent is a businessman and that no misrepresentation was made to him, there is nothing to suggest that the Applicant knew or ought to have known as a reasonable man, of his purported mistake. The word "unlimited" appears in bold typeface in clause 2 (page 1) of the Deed of Suretyship. Furthermore, in the signature block it is expressly indicated in bold typeface as follows:

"Important. The obligations imposed upon the surety pursuant to this suretyship may be very burdensome. Should the surety harbour any doubts regarding the exact meaning and effect of these obligations, we advise that independent legal advice should be taken prior to signature hereof."

Furthermore, at the bottom of each page of the Deed of Suretyship appears a place for the First Respondent to initial, whereby he certifies that "this page was fully read and understood". The First Respondent initialled each and every page. On the First Respondent's own version he clearly knew that he was signing an unlimited suretyship for the debts and obligations incurred by Safrinut. The First Respondent’s version as set out in his opposing affidavit is farfetched and fanciful. Both the First and Second Respondents signed the Deed of Suretyship on 3r d July 2008, and the Second Respondent gave her necessary consent in writing on the same day and place, whereby she gave permission/consent for the First Respondent to sign unlimited suretyships. Both the facility letter attached as Annexure "JR5" to the answering affidavit and Annexure "CB2" to the founding affidavit make it patently clear that the security already held by the Applicant (to wit the suretyship of the First Respondent signed during July 2008) would be in respect of any and all obligations of Safrinut towards the Applicant, and will apply and may be applied by the Applicant, to any indebtedness of Safrinut towards the Applicant as a whole, and that an unlimited suretyship, upon terms and conditions acceptable to the Applicant, was given by the First Respondent in favour of the Applicant for any and all obligations of Safrinut, now or in the future towards the Applicant.

[19] The inescapable conclusion is that the First Respondent knew that when the overdraft facility was renewed and/or extended during 2011 and 2014 that the suretyship he already provided would extend thereto and would be for an unlimited amount, for future debts and for any obligations incurred by Safrinut towards the Applicant.

[20] On the First Respondent's own version the documents pertaining to the increased facility were sent to him on the 19th of December 2011 (annexure "JR5")for his signature. The relevant pages of this document were initialled by the First Respondent. Clauses 3.1 and 3.2 of this document provide that an unlimited suretyship must be given by the Respondents in favour of the bank for any and/or all obligations of Safrinut, now and/or in future, towards the bank. In

the absence of requesting a new suretyship from the Respondents, the First Respondent knowing that the overdraft is an existing liability and his existing suretyship, which was given in 2008, is still applicable to include the extended facilities. If it was cancelled as alleged, new documents would have been sent to him in order to sign a new suretyship. In my view the Respondents were fully aware of their liability in terms of the suretyship agreement that was signed in 2008. This conclusion is corroborated by the Respondents' admission that they did sign the surety agreements in 2008 and that Safrinut operated its business on the very same overdraft facility until its liquidation in 2016.

[21] The above inference is also corroborated by the following undisputed facts. On the 2nd February 2016 the First Respondent's son, Mr Wouter Roux, on behalf of Safrinut informed the Applicant that the trading activities of Safrinut has become increasingly difficult and that it was his intention to focus on the business activities of one of his other

companies. The First Respondent's son indicated that he wished to repay the full exposure in the Applicant's books in the name of Safrinut and he suggested that the First Respondent's residence in Port Alfred be refinanced to do so. On the 1oth March 2016 a further meeting was held. The content of the meeting was reproduced in a letter dated 1oth March 2016 and sent to Safrinut. Thereafter the Applicant was informed that the trading of Safrinut has ceased and that there are no further debtor payments outstanding. The Applicant then indicated to Safrinut that an amount of R1 155 344,00 is owed on Safrinut's overdraft. On the 21st April 2016 as appears from Annexure "CB6" to the founding affidavit, a demand was delivered to Safrinut to repay their outstanding indebtedness to the applicant, which it failed to comply with. Thereafter it is common cause that on the 21st July 2016 Safrinut was placed under voluntary liquidation. On the 12th August 2016 a demand was delivered to the First Respondent as surety for Safrinut's indebtedness. The first Respondent was called upon to pay an amount of R1 155 824,32 (plus interest at prime plus one per cent) into the Applicant's bank account. On the 25th August 2016 a further meeting was held and the Applicant was advised that Safrinut intended to repay the full exposure owing to the Applicant and to refinance the First Respondent's property for such purpose. The refinancing did not take place for various reasons. The Applicant however was prepared to afford them time to settle the debt and requested that an acceptable repayment arrangement be entered into. The parties were unable to come to a suitable arrangement. The importance of what transpired during these negotiations lies in the fact that nowhere was it denied that Safrinut and/or the Respondents were not liable to repay the outstanding overdraft amount; nor was it denied that the Respondents were liable for repayment in the event of Safrinut's failure to do so. If any dispute existed relating to the Respondents' liability it would have been raised during these negotiation.s In my view the Respondents' version cannot stand and must be rejected.

[22] Upon the voluntary liquidation of Safrinut, the Applicant demanded payment from the First Respondent on the 1ih of August 2016 in his capacity as surety of Safrinut. A copy of the Deed of Suretyship accompanied the demand. Thereafter a meeting was held to explore avenues to reach a repayment arrangement. The Respondents' indebtedness was not once disputed and the defence which is now raised for the first time in the Answering Affidavit is clearly an afterthought, as it was never raised during the meeting of 26 August 2016, or thereafter. In conclusion it cannot be found that the First Respondent was misled as to the nature or the contents of the Deed of Suretyship. As far as there might have been a duty to inform, the document spoke for itself

and having regard to the fact that the First Respondent is an astute businessman, he knew and understood the contents of the security

documents that he signed. Consequently there is no merit in the defence of justus error. Respondents' version that they were unaware that the 2008 suretyship would be applicable to the 2014 Facility Agreement is of no assistance to the Respondents. The mere fact the Respondents initialled the 2014 document confirms clearly that they understood the contents of the document and that there was no error involved when such document was read. The Respondents do also not allege that they were under the impression that they were signing a credit application form on behalf of Safrinut, whereas the First Respondent had undertaken in addition a personal suretyship for the debts of the company. The case referred to by the Respondents, i.e. Brink v Humphries & Jewell (Pty) Ltd 2005 (2) SA 419 (SCA) is of no consequence in the present matter. The facts in this case are totally different from those referred to in the Brink case. In my view there is no factual dispute on the facts before me. The probabilities are overwhelming and assist and confirm the Applicant's version.

[23] Lastly, it must be determined whether the National Credit Act is applicable. The provisions of the National Credit Act 34 of 2005 (the "NCA") are not applicable to this transaction. This can be inferred from Annexure "CB9" attached to the Applicant's application, where the consent required in terms of the Matrimonial Property Act 88 of 1984 is attached to. The consent signed by the Second Respondent was attached to Annexure "CBS", the original suretyship signed by the First Respondent. Both documents were signed on the same day, 3rd July 2008.

[24] The National Credit Act is not applicable to a "large debt" , i.e. a debt that exceeds R1000000 (see s7 of the NCA). Section 9(4)(b) of the NCA provides:

“(4) A credit agreement is a large agreement if it is- (a)

(b) Any other credit transaction except a pawn transaction or a credit guarantee, and the principal debt under the transaction or guarantee falls at or above the higher of the thresholds established in terms of Section 7(1)(b).”

[25] It is common cause that the Minister of Trade & Industry has, in terms of s7(1) of the NCA, made the determination and has determined the higher threshold as R250 000. In casu the principal debt owing by Safrinut amounts to R1 207 497,56 (together with interest thereon). It follows that if the NCA does not apply to the Facility Agreement,

then the NCA does not apply to the credit guarantee, i.e. the suretyship signed by the First Respondent. Applying the decision of Firstrand Bank v Carl Beck Estates 2009 (3) SA 384 (T) means that if the NCA does not apply to the principal debt, for example the loan agreement between Safrinut and FNB, then the

obligation of the first respondent in terms of the suretyship agreement were not incurred in terms of a credit transaction to which

the NCA applied. In Firstrand Bank v Carl Beck Estates it was held that the suretyship agreement is separate and distinct from the loan agreement. Applying that reasoning to the present set of facts means that the first respondent did not receive credit from the Applicant and cannot rely on the provisions of the NCA. Support for this argument is to be found in SA General Electric- Co (Pty) Ltd v Sharfman & Others NNO 1981 (1) SA 592 (W) per Boshoff JP:

"The ordinary suretyship is usually in respect of a particular debt or obligation. It is accessory to the transaction that creates the obligation of the principal debtor .

. . The duration of the surety's liability depends upon the terms of the deed of suretyship. Some suretyships are intended to cover a single credit and transaction only, while others, called continuing guarantees, are framed so as to apply to a series of credits and transactions. In the case of a single credit and transaction the surety's liability extends only to one credit or transaction agreed upon, while in the case of a continuing guarantee the liability endures until the credits and transactions contemplated by the parties, and covered by the guarantee, have been exhausted or until the guarantee itself has been revoked."

[26] In conclusion, it is my finding that the Applicant's claim is based on a separate cause of action and is an addition to the original debt. In the present matter the First and Second Respondents' indebtedness is for an indefinite amount and therefore covers the outstanding amount of the overdraft facilities incurred by Safrinut. Accordingly, all the Respondents' defences must fail.

[27] I am satisfied that a proper case has been made out on behalf of the Applicant, that there was proper service, and that the Respondents failed to comply with the demand. As far as the costs are concerned, the Respondents are liable in terms of the suretyship agreement to pay the Applicant's costs on the scale as between attorney and client. There is no reason why the costs should not be awarded as agreed upon.

THEREFORE, THE FOLLOWING ORDER IS MADE:

1. The Respondents' application in terms of Rule 6(15) is dismissed with costs (Ref. Ex Tempore Judgement- not typed;

2. Judgement is granted in favour of the Applicant against the Respondents, jointly and severally, the one to pay the other to be absolved, for:

2.1 Payment of the sum of R1 207 497,56;

2.2 Payment of interest on the amount of R1 207 497,56 at the Applicant's prime rate (currently 10,50 per cent) plus one per cent per annum, compounded monthly and calculated from 1st December 2016 to date of payment.

3. Respondents to pay the costs of the Applicant's on the scale as between attorney and client, jointly and severally, the one paying the other to be absolved.

DE VOS J

JUDGE OF THE GAUTENG DIVISION

OF THE HIGH COURT OF SOUTH AFRICA

Date of Hearing:

30 October 2017

Date of Judgement:

18 December 2017

For the Applicant:

Adv. L Meintjies

Instructed by:

Rorich Wolmarans & Luderitz Incorporated

For the Respondents: Adv. J Sullivan

Instructed by:

Waldick Jansen van Rensburg Incorporated