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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case Number: 2020/41361
In the matter between:
HOLLARD INSURANCE COMPANY Applicant
LIMITED
and
GAZ FUEL (PTY) LTD First Respondent
MOHAMMED ZAIN VALLEE Second Respondent
JUDGMENT
MODIBA, J
Introduction
[1] This is an opposed application in which the applicant seeks monetary judgment
against the respondents in the amount of R5,000,000.00, interest a tempore
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
9 DECEMBER 2024
DATE
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more and costs on the attorney and client scale. Its cause of action arises from
a deed of indemnity the first respondent, represented by the second respondent,
signed, and executed in its favour on or about 22 August 2019 and a suretyship
the second respondent signed and executed in its favour on the same date.
[2] The terms of these instruments are common cause between the parties. The
applicant relies on the following material, express, alternatively implied, further
alternatively tacit terms of the indemnity:
2.1 The applicant agreed to , at the written request of the first respondent, from
time to time to execute or procure the execution of guarantees on behalf of
the first respondent or any subsidiary associated company or companies, the
entity or person mentioned in such written request shall be regarded as being
incorporated therein.
2.2 The first respondent would indemnify the Applicant against all claims,
liabilities, costs, expenses, damage and/or losses of whatsoever nature
sustained or incurred by the applicant in consequence of having executed or
procured any such guarantee, including legal costs, together with interest
thereon at the prime overdraft rate of Absa Bank Limited plus 2%.
2.3 The first respondent further undertook and agreed to pay to the applicant, on
first written demand, any sum or sums of money which the applicant may be
called upon to pay under any guarantee irrespective of the applicant having
at such date made such payment and whether or not the first respondent
admits the validity of such claims against the validity of such demand against
the applicant under the guarantee. (Emphasis added)
2.4 Any settlement or claim against the applicant, the vouchers or other evidence
showing evidence of loss, payment or expense are prima facie evidence of
the liability of the first respondent and shall be sufficient for the purposes of
claiming provisional sentence against the first respondent.
[3] The applicant alleges the following material, express, alternatively implied,
further alternatively tacit terms of the Suretyship on which it relies:-
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3.1 The second respondent bound himself as surety and co -principal debtor
jointly and severally with the first respondent, in solidum for the due payment
by the first respondent to the applicant, on demand, any amounts which the
first respondent may be liable to pay the applicant under the Indemnity and
to indemnify the applicant against and any claims, losses, demands,
liabilities, costs and expenses of whatsoever nature which the applicant may
sustain or incur by reason or in consequence of having executed or thereafter
executing any guarantees.
3.2 The second respondent further interposed and bound himself as surety and
co-principal debtor jointly and severally with the first respondent for the due
payment by the first respondent to the applicant of all amounts which the first
respondent may be liable to pay the applicant under the Indemnities.
3.3 The second respondent further agreed to keep the applicant indemnified and
hold it harmless from any claim, loss, demand, liability, costs and expenses
of whatsoever nature, including legal costs as between attorney and client
which it may sustain in consequence of having executed any guarantee on
behalf of the first respondent.
[4] On or about the 19th of September 2019, the first respondent represented by the
second respondent applied for a guarantee from the applicant to be issued in the
name of Fuelex (Pty) Ltd in favour of Independent Petroleum Group Limited (IPG)
in the amount of R5 000 000.00 . Subsequently, the applicant issued guarantee
number EFP/EBGS P/000159536#1 as requested for and on behalf of the first
respondent for the due obligations of Fuelex (Pty) Ltd in favour of IPG.
[5] On or about the 16th of April 2020, the applicant received a written demand for
payment from IPG under the said guarantee alleging failure by Fuelex to honour
its commitment in terms of a credit agreement . In terms of the written demand,
the applicant was called upon to make payment of an amount of R5 000 000.00
to IPG being the amount overdue and payable by Feulex to IPD under the credit
agreement. On 20 April 2020, t he applicant honoured this demand as obliged
under the guarantee.
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[6] Subsequently, the applicant demanded payment from the second respondent in
the amount of R5,000,000 in terms of the suretyship. The applicant seeks the
order referenced in paragraph 1 of the judgment as the second respondent has
failed to meet its demand.
[7] The second respondent’s basis for opposition is that the first respondent is not
indebted to IPG and has n o relationship with it. He had, prior to the guarantee
being issued to IPG, enquired from the Applicant’s Shaheel Jawair, who assured
him that should IPG call for payment in terms of the guarantee, the applicant
would only make payment upon written confirmation by the first respondent,
confirming its indebtedness to Fuelex in the amount of the guarantee. It was on
this basis that the respondents consented to the guarantee being issued in favour
of IPG.
[8] The respondents deny that on 16 April 2020, the first respondent was indebted
to Fuelex in the amount of R5,000,000.00. They allege that Fuelex owes the first
respondent an amount of R7,000,000 in respect of a refund for fuel levies. They
further allege that when the applicant notified the respondents that they had
received a claim under the guarantee, they informed Shaheel Jawair not to
honour the guarantee as Fuelex was indebted to the first respondent in the
amount of R7 ,000,000. Notwithstanding this req uested, as well as Shaheel
Jawair’s earlier undertaking that the applicant would only make payment upon
written confirmation by the first respondent, confirming its indebtedness to Fuelex
in the amount of the guarantee, the applicant made payment to IPG in terms of
the guarantee. The respondents accuse the applicant of colluding with Fuelex
with the intention of defrauding or prejudicing the first respondent. Alternatively,
they accuse the applicant of acting negligently when it honoured the guarantee
under circumstances where the second respondent had informed Shaheel
Jawair that Fuelex is indebted to the first respondent in an amount more than the
guarantee.
[9] The applicant denies that Shaheel Jawair provided any assurance to the second
respondent as alleged by the respondent. It contends that s uch an agreement
would be in direct conflict with the purpose of the guarantee and in direct conflict
with the terms of the Indemnity and Deed of Suretyship. It further contends that
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the respondents’ allegations in this regard are an afterthought , deliberately
designed to avoid its liability towards the applicant.
[10] The applicant has also provided a version regarding liabilities between the first
respondent and Fuelex in respect of the first respondent’s trading and customs
and duties account. I do not deem it necessary to delve into this version as it is
irrelevant to the issues that stand to be determined in this application. As the
applicant correctly points out, it is not party to any agreement between the
respondents and Fuelex. Any dispute between the se parties is of no
consequence to it and must be resolved between then.
[11] The respondents’ grounds of opposition fail for the reasons set out below:
11.1 the guarantee was issued at the first respondent’s written request in
favour of IPG. IPG has demanded payment under the guarantee. The
applicant duly made payment to IPG in terms of the guarantee. The applicant
has demanded payment from the respondents under the Indemnity and the
Deed of Suretyship . The respondents are obliged to pay the demanded
amount to the applicant. It is irrelevant that they dispute the validity of the
underlying claim by IPG.1
11.2 the Indemnity and the Deed of Suretyship include non-variation clauses.
These clauses render the alleged oral agreement between the second
respondent and Jawair invalid and unenforceable.
11.3 the terms of the alleged oral agreement conflict with the terms of the
guarantee, the Indemnity and the Suretyship, are far-fetched and against
business efficacy.
11.4 the respondents baldly allege collusion between the applicant and
Fuelex intended to defraud or cause the first respondent prejudice. The
alleged fraud is not properly pleaded because no particularity is set out .
It is also based on the second respondent’s say so and not supported by
1 Loomcraft Fabrics CC v Nedbank Ltd 1996 (1) SA 812 (A) at 816G – 817A and FirstRand Bank
Ltd v Brera Investments CC 2013 (5) SA 556 (SCA) at para 11.
any evidence.2 There respondents have not sufficiently made out a case
for such a finding.
11.5 The respondent's allegation that the applicant acted negligently w hen
it honoured the guarantee is devoid of any merit given the nature of the
guarantee as referenced in paragraph 11 .1 of this judgment.
[12] For all the reasons set out above, the applicant's claim falls to succeed. The
follow ing order issues:
O rder
Judgemen t against the first and second respondent is granted jointly and severally,
the one paying the other to be absolved for:
1.1 Paymen t of an amount of R5 , 000, 000.00 (five m illion rand);
1.2 Interest on the above amou nt at the prime overdraft rate of Absa Ba nk Limited,
plus 2% from 20 April 2020 to repaymen t thereof;
1.3 Costs of suit on the attorney and client scale.
L.T. MODIBA
JUDGE OF THE HIGH C OURT
JOHANNESBURG
2 See Co urtney-Clarke v Bassingthwa ighte 1991 (1) SA 684 (Nm ) at 689 and G ilbey D istillers &
Vintners (P ty) Ltd v Mo rris N O 1990 (2) SA 217 (SE ).
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Appearances
For the Applicant: AN Kruger
Instructed by Moll Quibbell and
Associates
For the Respondent: E Coleman
Instructed by Zaf Khan Attorneys
Date of hearing: 16 October 2024
Date of judgment: 10 December 2024
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