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
LIMPOPO DIVISION, POLOKWANE
CASE NO: 5793/2023
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO THE JUDGES: YES/NO
(3) REVISED.
DATE: 14/05/2025
SIGNATURE:
In the matter between :
FIRST RAND BANK LIMITED APPLICANT
And
ADRIAAN ADOLPH BADENHORST FIRST RESPONDENT
JACOBUS FREDERICK NICOLAAS BADENHORST SECOND RESPONDENT
JOHANNA MARTHINA BADENHORST THIRD RESPONDENT
ADRIAAN ADOLPH BADENHORST N.O . FOURTH RESPONDENT
ANNA MARIA ELIZABETH BADENHORST N.O. FIFTH RESPONDENT
JACOBUS FREDERICK NICOLAAS BADENHORST N.O. SIXTH RESPONDENT
MARTHINUS JOHANNES GREYLING N.O. SEVENTH RESPONDENT
BOUVEST 2376 PROPERTY LIMITED EIGTH RESPONDENT
_______ _____
JUDGEMENT
KGANYAGO J
[1] The first to third respondents are directors of Radask (Pty) Ltd in liquidation
(Radask) . The fourth to seventh respondents are trustees of Tripple AJ Trust (trust).
The trust is the registered owner of the farms portion 1252 of the farm Loskop Noord
12 (portion 1252); four fifth shares in and to portion 8 (a portion of portion 2) of the
farm Welverdiend 201 (portion 8); portion 469 of the farm Loskop Noord 12 (portion
469); portion 470 of the farm Loskop Noord 12 (portion 470); and portion 497 of the
farm Loskop Noord 12 (portion 497). These farms will be jointly referred to as
properties.
[2] During the period 4th July 2019 to August 2022 the applicant and Radask
entered into several loans and facility agreements. The first to third respondents and
the trust have executed unlimited suretyships in favour of the applicant for the
indebtedness of Radask to the applicant. The eighth respondent executed a
suretyship li mited to R2 000 000.00 and R15 000 000.00 in favour of the applicant for
any and/or obligations of Radask at the time or in the future towards the applicant. As
security for the trust’s obligations under its suretyship, mortgaged bonds in favour of
the app licant were registered over the properties.
[3] On 7th March 2023 the directors of Radask filed a resolution for the voluntary
winding -up of Radask. On 7th June 2023 the applicant demanded payment in the
amount of R16 685 669.02 from the respondents regarding Radask indebtedness to
the applicant by virtue of the suretyship s. On the failure to comply with the demand,
the applicant instituted action seeking money judgment against the respondents in
their capacities as sureties for Radask . The applicant is also seeking a declaration of
the executability of the immovable property mortgaged in its favour.
[4] The respondents are opposing the applicant’s application. In their answering
affidavit, the respondent s have submitted that the applicant is an accountable
institution as contemplated by the Financial Intelligence Centre Act 38 of 2001
(FICA). That all details relating to the trust, including the trust deed, must be acquired
by the applicant whenever it engages in a trans action with the trust, which will
include the executing of suretyship agreements; and/or executing mortgage bonds in
favour of the applicant.
[5] The respondents have further submitted that the first to third respondents had
very little to no option b ut to execute suretyships in favour of the applicant, because
had they refused to do so, the applicant would not have provided the necessary
finance to Radask. It is the respondents’ contention that this would have left Radask
without the ability to farm, which in itself would have been a financial catastrophe.
However, the respondents have pointed out that they did not act under duress or
undue influence. According to the respondents, the finance which they have obtained
from the applicant by Radask was ex tensive finance. For reasons unknown to the
respondents, the applicant demanded that the first to third respondents in their
personal capacit ies execute suretyships in favour of the applicant. The first to third
respondents does not have financial capacity to satisfy any of the debts to the
magnitude which the applicant had entered into with Radask.
[6] The applicant ha s demanded personal suretyship s without doing investigation
whether the personal suretyship has any actual value. Private persons are p rotected
by the mechanisms relating to reckless credit in terms of the National Credit Act 34 of
2000 (NCA ). The respondents have conceded to the non -applicability of the NCA in
this matter, but submitted that the development of the common law was necessar y in
this regard. Although it is undesirable that juristic entities do not require such
protection, the general course of conduct by financial institutions of demanding
suretyship s from private individuals without any degree of reasonable indication that
such private individuals can satisfy, at least a reasonable portion of the debt, only
serves to operate in terrorem of sureties.
[7] With regard to the trust the respondents have submitted that a trust can only
act through its duly authorised trustees, with the trustees deriving their powers strictly
from the trust deed. Clause 9.1 of the trust deed state that the trustees of th e trust
determines which of the trustees will have signing powers in terms of contracts,
deed s and other documents. The purported suretyship by the trust was allegedly
entered into on 4th July 2019. The resolution by trustees purports to appoint the
second respondent as the person authorised to sign the suretyship on behalf of the
trust despite the fact that the second respondent was not a trustee of the trust on 4th
July 2019. The trustees of the trust had no authority to appoint the second
respondent as t he authorized signatory, and any purported act doing so constitutes
an act ultra vires the trust deed and is invalid.
[8] In terms of section 6 of the General Law Amendment Act 50 of 1956, in order
for a suretyship agreement to be valid, binding and enforceable, it must be signed by
the surety. As the trustees could not confer any power on the second respondent to
sign the suretyship, the second respondent could not sign the suretyship on behalf of
the trust and, accordingly, the suretyship relied upo n by the applicant does not
comply with the law on suretyship agreements and is, in the premises, invalid and
unenforceable. The applicant’s claim against the trust is based squarely of the
existence of the impugned suretyship. The trust is not indebte d to the applicant in the
sums as claimed in terms of the notice of motion as having been the principal debtor,
as such the trust is not liable to the applicant, as contemplated by the mortgage bond
for any sum of money from any cause whatsoever nature. As the re exist no legal
suretyship, there is no debt that is secured by the mortgage bond which would allow
the applicant to execute on the bonds and have the properties declared specially
executable.
[9] Counsel for the respondents has filed heads of argume nts only in respect of the
fourth to seventh respondents who are the trustees of the trust. In respect of the first
to the third respondents, counsel for the respondents has applied for a postponement
of the matter submitting that they intend to pursue the ir constitutional challenge of the
NCA , but that they have delivered their Rule 16A notice late. The first to third
respondents’ application for postponement was refused and counsel for the
respondents submitted that he h eld no instructions to argue the merits on behalf of
the first to third respon dents. The first to third respondents were not before court, and
the court was satisfied that they were aware of the trial date, and the matter
proceeded in their absentia.
[10] The first to third respondents are sureties in their personal capacities. T he
fourth to seventh respondents are sued in their capacities as trustees of the trust
which it is alleged had signed sureties in f avour of the applicant. The first to third
respondents defence is on the basis that they had little to no option but to execu te
the suretyships, for if they did not do that , the applicant would not have advanced
credit to Radask. However, the first to third respondents concede that they were not
under duress or unduly influenced when they signed the suretyships. Further that the
common law relating to conclusion of personal suretyships in respect of debts of
juristic persons requires development so as to prevent meaningless and irrational
suretyship. The fourth to seventh respondents contest liability on behalf of the trust
on th e basis that the second respondent who executed the suretyship on behalf of
the trust was allegedly not authorised to do so.
[11] Since counsel for the respondents has no mandate to argue merits on behalf
of the first to third and eighth respondents, and the said respondents are also in
default and have failed to file heads of argument, their matter will be disposed on
default basis. What remains i s the matter of the fourth to seventh respondents. The
question to be decided is whether the second respondent had executed valid
suretyship agreement s despite he been not a trustee of the trust at the time. Should
it be found that the second respondent had executed valid suretyship agreement s on
behalf of the trust that will be end of the matter for the fourth to seventh respondents
as they did not rais e any other defence. Should their defence fail, the trust
immovable properties will be declared specially executable as the fourth to seventh
respondents did not seriously answer the applicant’s case regarding a declaration of
the executability of the immo vable properties mortgaged in favour of the applicant.
[12] Section 6 of the General Law Amendment Act1 provides as follows:
“No contract of suretyship entered into after the commencement of this Act,
shall be valid, unless the terms thereof are embodied in a written document
signed by or on behalf of the surety: Provided that nothing in this section
contained shall affect the liability of the signer of an aval under the laws
relating to negotiable instruments”.
[13] It is trite that a t rust does not have legal personality, and in the absence of
authorisation in the trust deed, trustees must act jointly. In Land and Agricultural
Bank of SA v Parker and Others2 Cameron JA said:
“The first principle accounts for the fact that the trust could not be bound while
there were fewer than three trustees. Except where statute provides
otherwise, a trust is not a legal person. It is an accumulation of assets and
liabilities. These constitu te the trust estate, which is a separate entity. But
though separate, the accumulation of rights and obligations comprising the
trust estate does not have legal personality. It vests in the trustees, and must
be administered by them – and it is only throug h the trustees, specified in the
trust instrument, that the trust can act. Who the trustees are, their number,
how they are appointed, and under what circumstances they have power to
bind the trust estate are matters defined in the trust deed, which is the trust’s
constitu tive charter. Outside its provisions the trust estate cannot be bound”.
[14] The second respondent on signing the suretyships agreements on behalf of
the trust was acting on the basis of a resolution signed by the three trustees on 4th
July 2019 at Groblersdal. The said resolution reads as follows:
“RECORDED THAT:
1. For purposes of this resolution, FIRSTRAND BANK LIMITED (Reg.
No. 1929/001226/08, acting through its First National Bank division, herein
referred to as “the Bank” );
1 50 of 1956
2 2005 (2) SA 77 (SCA) at para 10
2. Draft copies of the below mentioned documents were provided to
each trustee and the terms and conditions thereof approved.
IT IS RESOLVED THAT:
3. The trust signs an unlimited suretyship in favo ur of the Bank for the
obligations of Radask (Pty), (Reg. No. 2017/067772/07 towards the bank.
RESOLVED FURTHER THAT:
4. The person/s listed below, in his/her/their capacity/ies as trustee/s
and/or duly authorised representative/ s of the Trust, are authorised and
empowered to sign all documents and do all things necessary to give effect to
the above on behalf of the Trust:
(a) Jacobus Frede rick Nicolaas Badenhorst
AND/OR
(b) ______________________________
5. The trustees confirm that, to the best of their knowledge and based
on the information available to them as at date of the signature hereof, the
provision by the Trust of the abovementioned ag reements and/or security is in
the best interest of the benefit of the Trust and the beneficiaries of the Trust;
6. This resolution may be signed in one or more counterparts, all of
which together shall be considered to constitute one and the same resolution
as at date of signature by the party last signing one of the counterparts.
(All trustees to sign) ”
[15] The respondents in disputing that the second respondent had the authority to
bind the trust estate is relying on clause 9.1 of the trust deed which provides as
follows:
“Die TRUSTEES bepaal welke TRUSTEE(S) tekenmagte het ten
aasien van kontrakte, aktes en ander dokumente met betrekking tot
trustsake”.
The joint agreed translation of clause 9.1 read as follows:
“The TRUSTEES determine which TRUSTEE(S) has signing powers
in respect of contracts, deeds and other documents with regard to trust
business”.
[16] Counsel for the res pondents ha s submitted that according to clause 9.1 only
trustees can be conferred the necessary signing powers, and no third party, who is
not a trustee, can be conferred such signing powers. Clause 7.2 of the trust deed
read as follows:
“As al le dienende TRUSTEES Aldus afwesig of onbevoeg is, is hulle
geregtig om by wyse van ‘n gesamentlike volmag ‘n ander person the magtig
om tydelik namens hulle as agente op te tree vir die duur van hulle
afwesigheid”.
The joint agreed translatio n of clause 7.2 reads as follows”
“If all serving TRUSTEES are so absent or incapacitated, they are
entitled to by way of a joint power of attorney to authorise another person or
persons to temporarily act as agent on their behalf for the dura tion of their
absence”.
[17] Clause 7.2 of the trust deed empowers the trustees to appoint a third party to
act on their behalf as an agent if they are all absent or incapacitated. As per clause
7.4 of the trust deed, the person so appointed must while he acts in the place/stead
of the trustee that nominated him, exercise the duties and functions of the trustee
that he represents and for that purpose is clothed with rights, powers and capacity of
the trustee that he represents. T his means for all intends and purpose he/she will
required to do whatever act the trustee who nominated him/her was required to do
without limitations . That will include signing any contract that will bind the trust estate.
[18] Even though clause 9.1 state that the trustees had to determine among
themselves as to who of the trustee(s) has signing powers in respect of contracts,
deeds and other documents with regard to trust business, the clause has not been
worded in such way that it conferred signing powers only to trustees. The clause 9.1
cannot be read in isolation with clause 7.2. Reading the two clauses together, it can
therefore not be said that only trustees can be conferred with the necessary signing
powers, and that no third party, who is not a trustee, can not be conf erred with such
signing powers.
[19] In Nieuwoudt and Another NNO v Vrystaat Mielies (Edms) Bpk3 Harms JA
said:
“However, as mentioned by Farlam JA, the fact that trustees have to act
jointly does not mean that ordinary principles of the law of agency do not
apply. The trustees may expressly or impliedly authorise someone to act on
their behalf and that person may be one of the trustees. There is no reason
why a third party may not act on the ostensible authority of one of the trustees,
but w hether a particular trustee has the ostensible authority to act on behalf of
the other trustees is a matter of fact and not one of law”.
[20] As per the resolution of the 4th July 2019 all the trustees of the estate have
expressly authorised the second applicant to act on their behalf and sign all
necessary documents . That included signing unlimited suretyship s in favour of the
applicant for the obligations of Radask. Th e second respondent was ostensibl y
authori zed to act on behalf of the three truste es since the y have all signed the
resolution . The trustees by jointly signing the resolution and authorising the second
respondent to act on their behalf were not acting outside the provision of the trust
deed since clause 7.2 permit the appointment of third a party to act as an agent.
[21] Under the circumstances, the respondents’ reliance on the second
respondent’s lack of authority is misplaced. With regard to the first to third and eighth
respondents, as I have pointed out above, their matter will be disposed on default
basis. With regard to the executability of the immovable properties, the respondents
did not seriously challenge the applicant’s version, and the applicant had made out a
cogent case in its founding affidavit. The app licant is therefore entitled to judgment
as prayed for in the notice of motion.
[22] In the result the following order is made:
3 2004 (3) SA 486 (SCA) at para 23
22.1 Judgment is granted in favour of the applicant against the respondents
for payment by the respondents, jointl y and severally, the one paying the others to be
absolved, of:
22.1.1 R803 831.96 together with interest thereon at the prime rate (currently
11.75 %) plus 1.5% per annum compounded monthly calculated from 30 May 2023
until date of payment, both days inclusive in respect of account number 4[...];
22.1.2 R5 846 282.27 together with interest thereon at the prime rate
(currently 11.75%) plus 2.25% per annum compounded monthly calculated from 30
May 2023 until date of payment, b oth days inclusive in respect of account number
4[...]2 ;
22.1.3 R 932 483.76 together with interest thereon at the prime rate (currently
11.75%) plus 2.25% per annum compounded monthly calculated from 30th May 2023
until date of paymen t, both days inclusive in respect of account number 4[...]3 ;
22.1.4 R5 780 940.96 together with interest thereon at the prime rate
(currently 11.75%) plus 0,50% per annum compounded monthly calculated from 30th
April 2023 until date of payment, both days inclusive in respect of account number
6[...];
22.1.5 R201 525.78 together with interest thereon at prime rate plus 2.5% per
annum, calculated daily and compounded monthly in arrears from 2 May 2 023 to
date of payment, both days inclusive in respect of account number 8[...];
22.1.6 R18 098.93 together with interest thereon at prime rate plus 0.75% per
annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment, both days inclusive in respect of account number 8[...]2 ;
22.1.7 R58 993.13 together with interest thereon at prime rate plus 0.75% per
annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment , both days inclusive in respect of account number 8[...]3 ;
22.1.8 R206 893.89 together with interest thereon at prime rate plus 0.5% per
annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment, both days inclusive in respect of account number 8[...]4 ;
22.1.9 R8 526.12 together with interest thereon at prime rate per annum,
calculated daily and compounded monthly in arrears from 2 May 2023 to date of
payment, both days inclusive in respect o f account 8[...]5 ;
22.1.10 R376 840.36 together with interest thereon at prime rate per annum,
calculated daily and compounded monthly in arrears from 2 May 2023 to date of
payment, both days inclusive in respect of account number 8[...]6 ;
22.1.11 R235 660.21 together with interest thereon at prime rate plus 0.25%
per annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment, both days inclusive in respect of account number 8[...]7 ;
22.1.12 R235 725.91 together with interest thereon at prime rate plus 0.25%
per annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment, both days inclusive in respect of account number 8[...]8 ; and
22.1.13 R979 865.74 together with interest thereon at prime rate plus 0.25%
per annum, calculated daily and compounded monthly in arrears from 2 May 2023 to
date of payment, both days inclusive in respect of account number 8[...]9 .
22.2 It is declared that the following immovable properties owned by Trippel
AJ Trust (represented by the fourth to seventh respondents), are specially
executable:
22.2.1 Portion 1252 of the farm Loskop Noord 12, Registration Division J.S.,
Limpopo Province, in extent 43, 7238 hectares held by certificate of consolidated title
T8298/2020 (“Portion 1252”);
22.1.2 Four Fifth (4/5) shares in and to Portion 8 (a Portion of Portion 2) of the
farm Welverdiend 201, Registration Division J.S ., Mpumalanga Province, measuring
263,4878 hectares, held by deed of transfer T11535/2019 (‘Portion”);
22.1.3 Portion 469 of the farm Loskop Noord 12, Registration Division J.S.,
Limpopo Province, measuring 61, 3161 hectares, held by deed of tra nsfer
T8294/2020 (“Portion 469”);
22.1.4 Portion 470 of the farm Loskop Noord 12, Registration Division J.S.,
Limpopo Province, measuring 29, 0408 hectares, held by deed of transfer
T8294/2020 (“Portion 470”); and
22.1.5 Portion 497 o f the farm Loskop Noord 12, Registration Division JS.,
Limpopo Province , measuring 13,4840 hectares, held by deed of transfer
T8294/2020 (“Portion 497”).
22.3 The Registrar of this Court is ordered to issue warrants of execution to
enable the sh eriff to attach and execute upon the abovementioned immovable
properties in satisfaction of the judgment debt, interest and costs.
22.4 The respondents jointly and severally to pay costs of the application on
attorney and client scale.
KGANYAGO J
JUDGE OF THE HIGH COURT OF SOUTH AFRICA,
LIMPOPO DIVISION , POLOKWANE
APPEARANCE S:
Counsel for the app licant : Adv NJ Horn
Instructed by : Werksman Inc
Counsel for 4th to 7th respondent s : Adv CE Thompson
Instructed by : Martin Van Vuuren Attorneys
Date heard : 20th March 2025
Electronically circulated on : 14th May 2025