New Life Holdings (Pty) Ltd v Van Der Hoven and Others (25696/2024) [2025] ZAWCHC 487 (23 October 2025)

Case Note

New Life Holdings (Pty) Ltd v Van Der Hoven and Others (Case no 25696/2024) [2025] ZAWCHC … (23 October 2025), High Court of South Africa, Western Cape Division, Cape Town, per Nuku J. Heard 28 August 2025; delivered 23 October 2025.

Reportability

The judgment is marked “Not Reportable.” This denotes the court’s determination that the decision does not, in its view, introduce a novel point of law or materially develop the existing law in a way that compels publication in the law reports. Notwithstanding this designation, the judgment provides a careful application of established interpretive principles to a common commercial instrument—namely, a payment-on-demand guarantee—within the context of interlocutory skirmishes about alleged new matter in reply and the propriety of a further set of affidavits.

Its significance lies in the court’s rigorous affirmation that a properly framed demand guarantee creates principal and independent obligations, distinct from the underlying contract that precipitated it. The court’s emphasis on clause-driven liability—particularly the triggering effect of a written demand and the “independent obligation” language—offers practical guidance to commercial practitioners in structuring and enforcing guarantees.

The decision also offers helpful procedural guidance on strike-out applications and the admission of further affidavits in motion proceedings. The court underscores the need for demonstrable prejudice and exceptional circumstances, while clarifying that a replying affidavit may legitimately elucidate the pleaded case without introducing impermissible new matter. Although not reportable, the judgment has clear didactic value for both contract and motion-court practice.

Cases Cited

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).

Legislation Cited

No specific statutory provisions were cited in the judgment. The issues were resolved through contractual interpretation and the application of general principles of motion-court practice.

Rules of Court Cited

No specific Uniform Rules of Court were expressly cited. The court determined the strike-out and further affidavit applications by reference to established principles governing motion proceedings and the admission of additional affidavits.

HEADNOTE

Summary

This was an application to enforce a written demand guarantee provided by the respondents in favour of the applicant, securing the performance of Climealine (Pty) Ltd’s obligations under a sale of shares and loan account agreement (the SPA). Following written demands under the guarantee, the respondents failed to pay. They opposed the application, raising lis pendens defences based on pending actions in the Limpopo Division and contending that their liability was conditional upon Climealine’s liability under the SPA.

The respondents further brought an interlocutory application to strike out alleged new matter introduced in reply and, alternatively, sought leave to file a further affidavit. The court found that the applicant’s cause of action had consistently been the guarantee, that no new matter was introduced on reply, and that no prejudice or exceptional circumstances justified further affidavits.

On the merits, the court held that the guarantee created principal and independent obligations, triggered by a written demand in terms of clause 5.10. The SPA disputes and pending proceedings did not bar enforcement. Judgment was granted for the guaranteed sum, interest, and attorney-and-client costs.

Key Issues

The first issue was whether the applicant’s replying affidavit impermissibly introduced a new case by characterising the guarantee as creating independent obligations. The court determined that the reply clarified a position already pleaded and inherent in the guarantee’s text, and that no new evidence was introduced.

The second issue concerned the nature and interpretation of the guarantee: whether it operated as a suretyship tied to Climealine’s liability under the SPA, or as a demand guarantee creating obligations independent of the underlying SPA. The court concluded, through contextual and purposive interpretation, that the guarantee imposed independent, principal obligations triggered by written demand, notwithstanding disputes about the SPA.

The third issue was whether lis pendens arising from pending proceedings between other parties in another division could defeat or postpone enforcement of the demand guarantee. The court held that the causes of action and parties were not the same and that, in any event, the demand-based character of the guarantee precluded reliance on such defences absent fraud.

Held

Held, that the replying affidavit did not introduce new matter but properly clarified the pleaded reliance on the guarantee; the applications to strike out and for leave to deliver a further affidavit were refused with costs.

Held, further, that the guarantee created principal and independent obligations; upon receipt of a written demand in terms of clause 5.10, the respondents were obliged to pay notwithstanding disputes regarding the SPA or Climealine’s liability.

Held, further, that the lis pendens defences were unavailable because the pending actions concerned different parties and a different cause of action grounded in the SPA, whereas the present claim was rooted in the guarantee. Judgment was granted for R8 376 045, interest at 11.75% per annum from 5 August 2024, and attorney-and-client costs.

THE FACTS

The applicant sold shares and a loan account in Imalisoft (Pty) Ltd to Climealine (Pty) Ltd under an SPA. To secure Climealine’s performance, the respondents executed a guarantee in favour of the applicant. The guarantee defined the “Guaranteed Obligations” as Climealine’s payment obligations under the SPA and included terms reflecting that the respondents’ obligations were principal and independent, that the guarantee was continuing covering security, and that payment could be demanded on written notice.

A condition precedent to the enforceability of the guarantee was the conclusion and unconditionality of the SPA by 31 March 2023. The applicant established fulfilment via a signed document recording the fulfilment of the conditions precedent. Thereafter, on 5 August 2024, the applicant issued a written demand on the respondents for R8 376 045, and further demands followed on 26 September 2024 and 28 October 2024. The respondents did not pay. Breach notices were issued on 22 August 2024 and 11 November 2024.

The respondents opposed the application and relied on two pending actions in the Limpopo Division: a cancellation action by Climealine asserting the SPA had been cancelled due to alleged repudiation by the applicant, and a declaratory action by Climealine, Intuitive PDA (Pty) Ltd, and Imalisoft seeking, among others, a declaration excusing Climealine from payment under the SPA while the applicant remained in breach of a conditions-precedent fulfilment agreement. They argued that their liability under the guarantee could not exceed or differ from Climealine’s liability under the SPA.

In reply, the applicant clarified that the guarantee created principal and independent obligations, pointing to clauses 5.1.1 and 5.2 and emphasising that liability arose upon written demand irrespective of Climealine’s position under the SPA. The respondents then sought to strike out sections of the reply as raising new matter; alternatively, they sought leave to file a further affidavit repeating their interpretation and alleging the guarantee was void for vagueness due to alleged contradictions between “independent” obligations and “co-principal debtor” terminology.

THE ISSUES

The court was required to decide whether the impugned portions of the reply introduced impermissible new matter and, if not, whether the respondents should be granted leave to file a further affidavit. This invoked the familiar motion-court balance between finality and fairness, including the need to show prejudice and exceptional circumstances.

Substantively, the court had to interpret the guarantee to determine whether it created obligations independent of the SPA or operated as a suretyship contingent on Climealine’s liability. The interpretation turned on the language of the guarantee read contextually and purposively, with particular focus on clauses providing for principal and independent obligations and payment on written demand.

Finally, the court had to assess whether lis pendens alibi foreclosed or delayed the enforcement of the guarantee, given the pending Limpopo proceedings. This required consideration of the identity of the parties, the cause of action, and the relief in those proceedings compared with the present matter, and how those procedural features intersect with the demand nature of the guarantee.

ANALYSIS

On the interlocutory applications, the court held that the applicant’s founding papers made plain that the cause of action was the enforcement of the guarantee as a standalone instrument. The reply did not shift the case to a different footing but clarified the pleaded reliance on the guarantee’s text—especially the provisions making the respondents’ obligations principal and independent. No new evidence was introduced; rather, the reply sharpened the legal interpretation. The respondents’ failure to establish prejudice or exceptional circumstances further undermined their bid to strike out or to deliver a fourth set of papers.

The court then applied the interpretive approach restated in Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA), emphasising the need to attribute meaning to the words used, read in context and with due regard to apparent purpose. Two provisions were determinative. First, clause 5.2 stipulated that the respondents’ obligations are principal and independent and remain enforceable notwithstanding any invalidity or unenforceability of the Guaranteed Obligations. Second, clause 5.10 provided that upon receipt of a written notice from the applicant stating that any amount is payable, the respondents must immediately perform or pay, “notwithstanding” any dispute as to liability. Properly construed, these clauses confirmed that the guarantee is a demand instrument, the liability under which is triggered by written demand even if the underlying SPA is contested.

The respondents’ attempt to recast the guarantee as a suretyship tied to Climealine’s liability was rejected as inconsistent with the text and purpose of the instrument. The presence of “co-principal debtor” terminology did not negate the independent-obligation clauses. The court accepted the submission drawn from Caney’s The Law of Surety (6 ed, 2010) at 57 that the mere use of “co-principal debtor” language does not, without appropriate contextual wording, transform the undertaking into one that is strictly co-extensive with the principal debtor’s obligations. In context, the guarantee plainly granted the applicant the right to payment on demand, independently of ongoing disputes about the SPA, save for the narrow fraud exception that is recognised in demand guarantee jurisprudence and noted by the court.

The lis pendens defences failed for two reasons. First, the pending Limpopo proceedings engage different parties and seek relief based on the SPA, whereas the present application seeks to enforce the demand guarantee against the guarantors. Second, the cause of action here is the guarantee (triggered by written demand), not the SPA; thus, the necessary identity of cause and parties is absent. Moreover, given the demand nature of the instrument, underlying disputes cannot forestall performance absent fraud. The respondents’ further arguments—that the guaranteed obligations had ceased due to alleged cancellation of the SPA, that clause 5.4 rendered the guarantee unenforceable, and that the guarantee was void for vagueness due to internal inconsistency—were all rejected. The court held that clause 5.10 requires payment despite disputes; that “discharge” under clause 5.4 cannot be deployed to avoid the demand obligation; and that the instrument is internally coherent when read holistically, with the independent-obligation provisions prevailing over the respondents’ characterisation.

REMEDY

The court granted judgment for the principal amount of R8 376 045 against the respondents, jointly and severally, the one paying the others to be absolved. The liability flows from the properly issued written demand under clause 5.10 and the independent nature of the obligations under clauses 5.1.1 and 5.2. The court rejected all defences rooted in the SPA disputes, the pending Limpopo actions, and the alleged inconsistency in the guarantee’s terms.

Interest was awarded at 11.75% per annum from 5 August 2024—the date of the first formal demand—until the date of final payment, both days inclusive. This aligns the accrual of interest with the contractual trigger for payment under the guarantee, namely, receipt of the written demand contemplated by clause 5.10.

Costs were awarded on an attorney-and-client scale, as provided for in the guarantee’s cost-indemnity provisions. The order expressly included the costs of two counsel where so employed. The interlocutory applications to strike out and to deliver a further affidavit were dismissed with costs.

LEGAL PRINCIPLES

A demand guarantee can, by clear wording, create a principal and independent obligation to pay upon receipt of a compliant written demand, unaffected by disputes under the underlying contract. Clauses expressly stating that obligations are “principal and independent” and that payment is due “notwithstanding” disputes are decisive in characterising the instrument as a payment-on-demand obligation rather than a suretyship.

In interpreting guarantees and similar instruments, courts apply the Endumeni approach: meaning is attributed to the text as read in its full context and purpose. Provisions must be construed harmoniously, giving effect to each clause where possible. The presence of “co-principal debtor” terminology does not, without more, derogate from clauses imposing independent obligations; context determines whether the guarantor’s obligations are co-extensive or demand-based and autonomous.

Procedurally, a replying affidavit may legitimately clarify or refine the pleaded case without introducing new matter, particularly where the dispute turns on legal interpretation rather than factual innovation. Applications to strike out alleged new matter or to deliver further affidavits require a clear showing of prejudice and exceptional circumstances. Absent such a showing, and where the matters raised in reply are interpretive clarifications of the pleaded instrument, such interlocutory relief will ordinarily be refused.

Lis pendens requires substantial identity of parties, cause, and relief. Where the pending proceedings engage different parties and a different cause of action—here, disputes under the SPA—lis pendens cannot bar enforcement of a separate, demand-based guarantee. Moreover, given the autonomous nature of payment-on-demand guarantees, underlying contractual disputes cannot typically be invoked to resist payment, save in instances of fraud.