THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NO: 14384/2024
REPORTABLE
In the matter between:
BKB LIMITED Plaintiff
and
HENDRIK JOHANNES SWANEPOEL DE BOD First Defendant
JOHANNES PETRUS DE BOIS N.O. Second Defendant
HENDRIK JOHANNES SWANEPOEL DE BOD N.O Third Defendant
DANI ËL JACOBUS VAN STADEN N.O Fourth Defendant
JUDGMENT
RK PARKER AJ
Introduction
[1] This is an application for summary judgment against the first through to f ourth
defendants ( hereinafter referred to as the “defendants ”), based on a suretyship
emanating from a credit agreement concluded between Plaintiff and first defendant
and the Die Reben Trust . The plaintiff instituted action on 25 June 2024 , against first
to fourth defendants who as trustees are bound by the Die Reben Trust who stood as
surety in terms of an agreement concluded with S outh African Assured Meat Group
(Pty) Ltd, (“hereinafter referred to as SAFAM ”).
[2] First defendant signed a written credit agreement with the plaintiff for a trade
facility to be granted to SAFAM, to operate as a mont hly account. This facility is
repayable to the plaintiff within 30 days from the date of invoice , together with interest
calculated at prime plus 5% payable on any portion of the facility that is not repaid
within 30 days. The facility acted as a revolving credit facility that is a nnually
renewable. Furthermore, there is a production facility for livestock , in terms of which
SAFAM would utilize the monies so advanced for the purchasing of livestock . This
facility would be repayable within 60 days . The production facility is a revolving credit
facility that is annually renewable together with interest at prime plus 3% from the date
on which any amount in terms of the production facility is advanced until payment of
such amount is received. In addit ion, further interest was payable as per the
agreement.
[3] SAFAM runs a sophisticated operation and derives its income in the meat
production and processing industry having its own abattoirs in Robertson, Swellendam
and Beau fort West . Beef and lamb of up to 10,000 animals per week are processed
with its income from the sale of meat products sold locally and internationally. SAFAM
relies on livestock agents to acquire the livestock from farmers and other suppliers .
Some livestock agents are employed by SAFAM whilst other livestock agents are
affiliated with or employed by the plaintiff or other businesses in the industry.
[4] The first defendant in his personal capacity and on behalf of Die Reben Trust
bound himself as surety and co-principal debtor , jointly and severally together with
SAFAM . The second to fourth defendants are sued in their capacity as trustees in
favour of the plaintiff for the repayment of any sum or sums of money which SAFAM
owes, in respect of the indebtedness to plaintiff.
[5] In terms of clause 11.3 of the suretyship agreement, the amount due a nd
payable to the plaintiff may be determined and proven by a certificate issued by the
plaintiff and signed on its behalf by any official of the plaintiff who is duly authorized
and whose authority need not be proven. Such certificate shall be binding and shall
be prima facie proof of the indebtedness of the defendants .
[6] The plaintiff duly complied with its obligation in terms of the agreement and
advance d the amounts as agreed to at the special instant and request of SAFAM .
The invoices were not met with payment, resulting in the indebtedness in the amount
of R 29 746 376.27 owing to plaintiff .
Litigation history
[7] Summons was issued on 25 June 2024 , following letter s of demand served by
the sheriff on 20 March 2024, on first defendant and the Die Reben Trust respectively,
being the section 345(1 ) (a) notice in terms of the Companies Act 61 of 1973 , for
payment of the outstanding amount . On 13 May 2024 plaintiff issued an application
and sought the provisional liquidation of SAFAM .
[8] Defendants duly filed their plea on 15 August 2024. Of importance, the
defendants do not dispute the indebtedness of SAFAM to plaintiff , however, deny they
are liable to pay the amount as claimed as they have been released from the
indebtedness, alleging bona fide defences to plaintiff ’s action to enforce the
suretyship . The basis for nonpayment is that the sureties argue they were released
from the obligatio ns as a result of the prejudice caused to them by plaintiff ’s breach of
its legal duties owed to SAFAM , which conduct fell outside the terms of the credit and
surety agreements.
The defendant ’s defences
[9] In this regard the defendants argue that plaintiff deliberately and in bad faith in
its dealings with SAFAM, conducted itself in such a manner, by blocking and or
frustrating SAFAM ’s attempts to trade profitably. Such conduct restricted its cash flow
to service its loan obligation in terms of the credit agreement. The defences raised by
the defendants are that plaintiff unlawfully and intentionally interfered with SAFAM ’s
contractual arrangements with suppliers such as farmers and livestock agent s by
instructing, inducing and or persuading them not to supply stock to SAFAM and or to
breach supply agreements.
[10] The conduct of plaintiff was such that its the unlawful and intentional
interference resulted in a significant incre ase in the risk of nonpayment of SAFAM ’s
indebtedness to the plaintiff . Defendants provided confirmatory affidavits by a certain
Daniel Jacobus Van Staden who is the director of Robertson Abattoir (Pty) Ltd that
when SAFAM bought livestock from the Du Toit Boerdery, he was informed by a Mr.
Ben Du Toit, that he is no longer willing to deliver the cattle to SAFAM as plaintiff had
informed him that they will not get paid. This resulted in him cancelling the agreement
with SAFAM and reselling the cattle to a third party. Identification of additional
“informants ” could not be disclosed to protect their identity given plaintiff ’s presence in
the market, its influence, and control and market share.
[11] Further affidavits in support of defendants ’ defenc es, were also provided by Mr.
Nicholas Frederick Hodgson, the general manager of the Swellendam Abattoir who
explained how he was contacted by a Mr. Dunn of Crodini Boerdery who i nforme d
him that he was advised by Plaintiff, that he will not receive payment for the livestock
if it was delivered to SAFAM. As a result, Crodini Boerdery stopped supplying SAFAM
in February 2024. Not being able to buy from Crodini Boerdery, had a negative impact
on the capacity of SAFAM as they used to be one of SAFAM ’s regular suppliers. In a
further affidavit deposed to by a Mr. Daniel Smit Horn , a freelance livestock agent ,
who also confirmed the same version that SAFAM will not be able to pay for livestock .
Similarly to what is stated above, the details of the informants were not disclosed as
he was reluctant to name them in the affidavit, for fear of him not being able to earn a
living if he disclosed too much detail .
[12] The above were the examples relied upon by the defendants, where the
plaintiff instructed or persuaded the suppliers to breach the agreements with SAFAM .
Thus, the defendants say that plaintiff ’s conduct points to a commission of a delict and
became an accessory to the wrongful act of breach of contract. This conduct caused
SAFAM to suffer significant ultimately it caused prejudice to the defendant sureties .
[13] In addition, defendants claim that the plaintiff ’s conduct was tantamount to
defamation when plaintiff made defamatory statements to farmers and other suppliers
of livestock during the period February , June and August 2024 that SAFAM will not be
able to repay them if they did business with SAFAM .
[14] The defendants also contend that plaintiff ’s conduct was an abuse of process
since plaintiff also brought a liquidation application, for the following reasons:
14.1 Plaintiff is an unsecured creditor whilst ABSA bank is the largest
creditor of SAFAM
14.2 Absa bank does not support the plaintiff ’s liquidation application
14.3 It is plaintiff's real objective to procure suitable security for the facility
provided to SAFAM and wo uld consider withdrawing the liquidation
application if this additional security is furnished.
14.4 Defendants contend that the plaintiff has abused the process of court as
it’s ulterior motive is one of putting pressure on SAFAM to provide the
additional security to cover exposure which had not been pro vided for
in the credit agreement.
Legal principles
[15] The first evaluation relates to the legal principles governing summary judgment
which are well established . These principles had been consistently applied and
endorsed across numerous decisions over the years. It is unnecessary to restate every
specific aspect thereof. A substantial body of case law provides clarity on how to apply
and evaluate the requirements for granting or refusing summary judgment.
In Tumileng Trading ,1 the court reaffirmed the established p rinciples laid down in
earlier cases such as Maharaj 2 and Joob Joob Investments ,3 specifically noting that
despite the procedural amendments, the core principles when evaluating a summary
judgment application remain intact.
1 Tumileng Trading CC v N ational Security and Fire (Pty) Ltd 2020 (6 ) SA 624 (WCC)
2 Maharaj v Barclays National Bank Ltd 1976 (1 ) S A 418 A
3 Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA)
[16] Given the d rastic nature of a summary judgment , which , effectively shuts the
door on a party, a helpful starting point when evaluating the request must always be
whether the procedural requirements outlined in rule 32(1 ) (a - d) of the Uniform Rules
of Court has been met.4
[17] Whilst an opposing party to a summary judg ment application may have a
remedy to resist the application, the defendant must present an affidavit disclosing
fully the nature and grounds of the defence. The defence must be bona fide that is
legally cognisable and factually supported, as underscored in Breitenbach5.
[18] However, even if a defendant ’s defence appears to not measure up to the
requirements of Rule 32(3) (b ), the court retains a n overriding discretion to refuse
summary judgment. This discretion allows the court to consider whether granting
summary judgment might result in an injustice, particularly where there is a reasonable
possibility that a fuller exploration of the issues at trial could reveal a v alid defence .6
[19] In view of the extraordinary and stringent nature of the summary judgment
process , the discretion may be exercised in defendants ’ favor if there is doubt as to
whether the plaintiff ’s case is answerable and there is a reasonable possib ility that the
defendants ’ defenc e is good .7 “”
4 which claim must therefore be based on a liquid document, or a liquidated amount of money,
delivery of specified movable property or for ejectment, together with any claim for interest and costs.
5 Breitenbach v Fiat SA (ENDMS) BPK 1976 (2) SA 226 (T)
6 Soil fumigation Services Lowveldt CC v Chemfit Technical Products (Pty) Ltd 2004 (6) SA 29 (SCA) at -341-35 D
7 supra Maharaj at 425H; Tesven CC and Another v South African Bank of Athens 2001 SA 268 (SCA
) ([1999] 4 ALL SA 396) at 277H -J SA
” “The grant of the remedy is based upon the supposition that the plaintiffs
claim is unimpeachable, and that the defendants defense is bogus or
bad in law ”8
[20] According to First National Bank of South Africa Ltd vs Myburgh and Another 9,
the court has the discretion to refuse summary judgment if the court is of the opinion
that there is sufficient evidentiary material to lead the court to believe that plaintiff's
case may not be answerable. This discretion is based on the material before the court
and if there appears to be an injustice if summary judgment is granted , the court should
exercise its discretion in favour of the defendants .
Evaluation
[21]. There various defences raised by defendants that summary judgment be
refused are complex . The first concern I have is that the principal debt is not denied
by any of the defendants. Neither do they dispute the validity of the suretyship
agreement .
[22] Secondly , defendants seek to rely on the alleged breach of legal duties owed
by plaintiff to SAFAM, termed the unlawful interference, which include interference
with SAFAM ’s contractual relationships with suppliers thereby frustrating SAFAM ‘s
trading operations . These defendants say, increased the risk of nonpayment by
SAFAM and thereby causing prejudice to the sureties. For unlawful interference to
succeed an action in de lict for damages lies against any person (A) who intentionally
8 Supra M aharaj at 423G
9 2002 (4) SA 176 (C) para 184G -H
and without justification induced or procured another (B) to breach a contract between
(B) and a third person (C). Intention determines wrongfulness.10
[23] In this regard SAFAM has not demanded or claimed any amount from plaintiff
or any of the suppliers who refused to supply , based on the breach of any duties which
may result in a claim for damages or compensation by SAFAM. As such, defendants
have failed to show that SAFAM has a claim against plaintiff based on this ground.
Furthermore the alleged loss or prejudice is not quantified. No allegation is made tha t
what was allegedly said by plaintiff ’s agents were false. Furthermore, the agent /s or
persons are not identified by the deponents to support the defendants claim of
unlawful interference. There is no basis pleaded or disclosed whereupon plaintiff could
be held vicariously liable for the alleged actions of the agent /s.
[24] In any event, it appears that SAFAM was already as early as in February 2024
unable to pay its debts. In this regard first defendant stated that an application will be
brought to place SAFAM under supervision and business rescue which could only be
done if SAFAM was in financial distress . This is exacerbated by sec tion 22 of the
Companies Act, 2008 whereby a company may not trade in insolvent circumstances
when the alleged statements complained of by defendants were made to suppliers.
[25] An alleged breach of delictual duty has no effect on the principal debt for which
the defendants bou nd themselves jointly and severally to plaintiff. There is no authority
presented fo r the proposition that the breach of delictual oblig ation or duty owed by
creditors towards a principal debtor, could resultantly impact the sureties obligations,
due to the effect of such a breach on the principal debtor. I therefore agree with the
10 Amler ’s Pleadings 10th edition “Interference with contractual relationships “page 2 24.
plaintiff, that in any event the indebtedness of the sureties could not have been
increased or changed as the result of plaintiff ’s alleged breache s. Defendants have
confl ated the question of their release due to the alleged prejudicial conduct of plaintiff
with the question of quantum of the principal debt, which are however two distinct
inquiries. The sureties defence is about the extent of their l iability11 .
[26] Defendants also contend that plaintiff had a legal duty not to cause damage to
SAFAM ’s trading reputation. Whilst it is so that the company has a common law right
to its good name and reputation , and it enjoys protection under section 10 of the
Constitution of the Republic of South Africa. In terms of section 9, a party may invoke
the protection under the equality provisions , claim for general damages except, in the
court's discretion , in cases of public discourse in public interest de bates. Absent this
qualification, a claim for general damages for defamation poses an unjustified
limitation on freedom of expression. 12
[27] Where a litigant pursue s actual patrimonial loss suffered because of defamation
the cause of action is based on the lex aquilia being a claim for pure economic loss.
The plaintiff bears the onus in respect of all the elements of that action . It does not
follow, that because a def amatory publication is wrongful for the purposes of a
defamatory action, policy considerations will automatically indicate the imposition of
liability for pure economic loss resulting from that publication. 13 In this regard
defendants do not provide any particulars of the alleged loss suffered by SAFAM as a
result of an alleged defamation.
11 Bock and Others v Duburoro Investments (Pty) Ltd [2003] 4 ALL SA 103 (SCA ) at 22 -25
12 Amler ’s page 148
13 Amler ’s page 153.
[28] None of t he defendants pleaded or provided any facts apart from generalized
statements, to substantiate the nature a nd extent of the alleged damages that could ,
if accepted as true , constitute a claim.
[29] I also agree with the plaintiff that the defences personal to the debtor do not
avail the sureties. 14 Sureties can avail themselves of the debtor ’s in rem defences
but not his in personam defences. The contrast between defenc es in rem and in
persona were dealt with In Standard Bank of South Africa Ltd v F ire Equipment Pty l td
and another15
“in rem attach to the claim or the cause of action or the obligation itself and
arise from the invalidity, extinction or discharge of the application itself,
whatever the data may be: those in personam arise from a personal immunity
of the debtor from liability f or an otherwise valid and existing civil or natural
obligation. In the case of a defence in persona m the obligation and the debt
remain in existence …. but the debtor is personally immune from a claim. In the
case of a defence in rem the law does not recogn ize the obligation or debt even
as a natural obligation. ”
[30] For a surety to be discharged of the accessory obligation between him and the
creditor , even though the principal obligation remains in force, may be extinguished
wholly or in part if the creditor in its dealings with the principal debtor acts in such a
way as to prejudice the surety or increase his burden.16 However there is nothing to
show that the creditor in his dealing with the principal deb tor acted in such a way as
to prejudice the sureties or increase the burden.
14 Cane y’s: The Law of Suretyship in South Africa 6th Ed chapter 13 paragraph 2(a ) pages 188-189.
15 1984 (2) SA 69 3 (C) at 696 -C -E
16 LAWSA Vol 26 (2ND Ed) paragraph 307 and the authorities in note 3.
[31] Turning to the defendant ’s counterclaims - in general , an unliquidate d
counterclaim does constitute a bona fide defence to a plaintiff's claim and a defendant
may rely upon it to avoid summary judgment .17 Based upon the princ iples formulated
in Rule 22(4) and the desirability of avoiding a multiplicity of actions a surety may prior
to set of f becoming operative , rely on the principal debtor ’s unliqu idated countercla im
to avoid summar y judgment18.
[32] In applying this to the defendants claim , the defendant has not quantified thei r
counter claims in order to demonstrate that the quantum th ereof is at least as much as
or in any event , no smaller than the plaintiff ’s claim.
[33] SAFA M has not demanded payment pursuant to any alleged counterclaim they
may have against plaintiff and has not instituted actions for the recovery of any
damages based upon any of the grounds as alleged by the defendant sureties.
Consequentl y rule 22 (4 ) does not apply.
[34] Plaintiff as an unsecured concurrent creditor , is entitled to bring a liquidation
application on its admitted debt and is further entitled to an order of liquidation ex
debito justi tiae. In this regard SAFAM did not seek relief under this section in the
answering affidavit nor mentioned any damage or loss caused by the liquidation
application. Therefore, I cannot take this any further.
17 Van Niekerk et al : Summary judgement - A Practical Guide paragraph 9 .5.7
18 Supra SA F ire Equipment at 701A -E
[35] Lastly turning to the loss and prejudice , this is unspecified and unquantified.
Any alleged loss suffered is not in any way linked to the result of the breach of any
contractual duty or obligatio n owed by plaintiff to SAFAM or the sureties.
[36] The sureties bound themselves to pay the principal deb t to plaintiff. This debt
has not been affected and cannot be affected by any alleged loss . The sureties ’
liabilities has not increased or decreased. A claim by SAFAM could result in the
reduction of the principal debt however no claim has been instituted since first
defendant, in his capacity as sole director of SAFAM has chosen not to institute any
proceedings against plaintiff for further recovery of any alleged loss and d amages.
This precludes the suret ies from placing reliance on such loss and damages as the
provisions of rule 22 (4) are not applicable.
[37] The d efendants argument holds no water when it tries to rely on a defence that
plaintiff was aware of the consequences that breach of the legal duties would have the
effect of increasing the risk of nonpayment of SAFAM. I also agree with the plaintiff
since there is no allegation of facts stated to support such submissions . Instead the
sureties seek to rely on the defence in personam which is not availab le to suret ies.
Conclusion
[38] Considering the aforegoing, the defendants have not provided an y legal or
factual basis for their defence and therefore they have failed to show a bona fide
defence to plaintiffs claim. The defenc es raised by the defendant do not comply with
the provision s of rule 32 (3) (b) as they are not raised as bona fide and good in law
and were raised solely for the purpose of delay . The defendants failed to prove the
prejudice on which they sought to p lace their defences on, as they bore the onus to
prove the prejudice to be released.19
[39] For the reasons foreshadowed , the application for summar y judgement is
upheld.
Costs
[40] In terms of paragraph 12 of the credit and surety agreement s respectively ,
plaintiff shall be entitle d to recover legal costs in terms of the maximum legally all owed
amounts . In particular, the indebtedness was not denied nor were the counterclaims
of the interferences substantiated. The quantum is high and it is my view that
defendants were delaying the ultimate outcome of a judgment. There are no reasons
to depart from making a costs order in line with the clauses referred to above.
Accordingly , costs on the attorney client scale is justified.
[41] In the circumstances I make the following order:
a) the application for summary judgement is granted
b) Costs are awarded in favour of the plaintiff on the attorney and client scale
including the costs of counsel were so employed.
____________________________
Acting Judge of the High Court
Parker
19 Khula Enterprise Ltd v Geldenhuys and another [ 2013] JOL 30641 (SCA) at [6]
Appearances:
Plaintiffs ’ counsel: Adv L M Olivier SC
Plaintiff ’s attorney: Rufus Dercksen Inc
(021) 886 6992 hesli@rufusdercksen.co.za
niel@rufusdercksen.co.za
Defendants ’ counsel: Adv J L Van Dorsten
Defendants ’ attorney: Michalowsky – Geldenhuys Attorneys Inc
(021) 418 0542
alecgeldenhuys@gmail.com;michalow@iafrica.com