SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in
compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(NORTHERN CAPE DIVISION, KIMBERLEY)
Not Reportable
Case no: 1774/2012
In the matter between:
MOMENTUM GROUP LIMITED Plaintiff
and
MASWIL FINANSIELE ADVISEURS CC First Defendant
JOSUA DANIEL VAN DEN HEEVER Second Defendant
ALTUS JOHANNES VAN DEN HEEVER and
JACO DE WITT VAN DEN HEEVER
(in their capacity as joint executors of the estate late
BENJAMIN VAN DEN HEEVER) Third Defendant
ANDRIES JOHANNES LE GRANGE Fourth Defendant
MARTHINUS JOHANNES SPANGENBERG Fifth Defendant
MONICA JOHANNA LE GRANGE Sixth Defendant
ANDRIES JOHANNES LE GRANGE Seventh Defendant
2
Coram: MAMOSEBO J.
Heard: 22-26/04/2024, 03-14/03/2025 & 22/07/2025.
Delivered: 19 /12/2025.
Summary: Debt recovery – Contractual claim – Claims against first to third
respondents withdrawn – Claims against fourth to seventh defendants based on
suretyship agreements – Defendants received statements but raised no objection
thereto thereby acquiescing and agreeing to be bound by such statements –
Interpretation of the suretyship agreement – Plaintiff is entitled to prove the
extent of the principal debtor’s and surety’s liability by means of a certificate of
balance – Principle restated : Our law of suretyship does not recognize a so -
called ‘prejudice principle’ – Prejudice caused to the surety can only release the
surety (whether wholly or partially) if the prejudice is t he result of a breach of
some or other legal duty or obligation by the creditor.
ORDER
1. The fourth, fifth, sixth and seven th respondents are jointly and severally
liable to the plaintiff in the sum of R474 858.24 (with the seventh
defendant’s liability being limited to R94 584.00) together with interest at
14% per annum and costs on an attorney and client scale.
JUDGMENT
Mamosebo J
[1] The plaintiff, Momentum Group Limited (Momentum), instituted action
against the first defendant , Maswil Finansiele Adviseurs CC (Maswil),
for the recovery of an amount of R474 858.24 , interest thereon at the rate
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of 14% per annum calculated from 12 May 2012 to date of final payment,
and costs of suit on the scale as between attorney and own client. The
claim against the second to seventh defendants is based on separate but
identical deeds of suretyship concluded in support of Maswil’s
obligations towards Momentum, as evidenced by commission statements
dated May 2012.
[2] The first defendant, Maswil Finansiele Adviseurs CC, was previously a
company duly incorporated in terms of the company law s of the Republic
of South Africa (“Maswil Makelaars (Edms) Bpk”), before its subsequent
conversion to a close corporation. As a Close Corporation, the first
defendant underwent a name change from Maswil Makelaars CC to its
present name in August 2010 . The second defendant is Josua Daniël Van
den Heever. The third defendant was Benjamin Van den Heever, who has
since passed away, and the executors of his estate are accordingly cited in
his stead. The fourth defendant is Andries Johannes Le Grange (Le
Grange Snr or Rampie). The fifth defendant is Marthinus Johannes
Spangenberg. The sixth defendant is Monica Johanna Le Grange. The
seventh defendant is Andries Johannes Le Grange (Le Grange Jnr).
[3] Maswil was liquidated after Momentum had instituted these proceedings.
Consequently, Momentum abandoned seeking any judgment against it. It
follows that Maswil’s counterclaim and plea did not proceed. However, it
is within the purview of Maswil’s indebtedness that the indebtedness of
the remaining defendants should be established. The action proceeded
against the second to the seventh defendants based on the deeds of
suretyship.
4
[4] The second and third defendants , Messrs Josua Daniël Van den Heever
and Benjamin Van den Heever were represented by Mr Van der Walt SC.
They participated in these proceedings until cross -examination of the
plaintiff’s first witness, Ms Chant el Lee Ford ham, when the proceedings
were adjourned to enable parties to exchange further documents. Prior to
the recommencement of the trial, and on 23 April 2024, Momentum
withdrew its case against the second and third defendants , the latter
having passed away. The parties agreed that each party will pay its own
costs. The matter proceeded against the fourth to the seventh defendants ,
who will collectively be referred to as the defendants. Following several
amendments to the pleadings, the defendants also abandoned their
counterclaim.
[5] Momentum is a duly incorporated and registered credit provider. This is
what it has pleaded in its particulars of claim. On or about 18 May 1998 ,
Momentum Life Assurers Limited changed its name to First Rand
Limited. The long-term insurance business of First Rand Limited was
transferred to Momentum Group Limited around 30 June 2000. All rights
and obligations, including all claims arising from the deeds of suretyship
(annexures “B” and “C”) , formed part of the long -term insurance
business of First Rand Limited , and were transferred to Momentum
Group Limited (plaintiff), the successor in title of Momentum Life
Assurers Limited.
[6] It is trite that the plaintiff must prove its case on a balance of
probabilities. The defendants raised special defences , consequently
leading to what now stands for determination by this Court:
6.1. Whether Momentum breached the terms of the suretyships ,
resultantly causing the defendants prejudice; and
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6.2. Whether by concluding “new” broking agreement s, Momentum
nullified the deeds of surety ship in respect of the fourth to sixth
defendants whose deeds of suretyship were concluded in respect of
the previous broking agreement.
Evidence for the plaintiff
[7] Ms Fordham, who has served as the plaintiff’s litigation attorney for the
past 11 years, gave evidence on behalf of the plaintiff in that capacity. In
her role, she works with the plaintiff’s debit management team , which is
the collections department, enforcing the broker house commission debt.
She has access to the head office filing systems an d had access to the
broker house agreements, the deeds of surety ship, loan agreements,
internal and external communication between the broker house and
Momentum, the commission accounts and the transfer agreement , Mr Le
Grange Snr’s IC code, commission and current account.
[8] On 25 May 2011 , Maswil and Momentum concluded the latest and final
version of the broking agreement which reflects the commencement date
of 15 August 1996 and is marked exhibit “A” . The broker house
(“Maswil”) was allocated a unique broker house code number 023865
when it was to perform broking services for Momentum. The agreement
was signed by Messrs Le Grange Snr , the fourth defendant and Le
Grange Jnr, the seventh defendant, in their capacities as principals of the
broker house and directors (later members of the close corporation) of
Maswil, clearly specifying that the agreement was concluded on behalf of
the broker house. The broking agreement started when the first agreement
was signed on 15 August 1996 and continued, despite the amendments,
until the termination.
6
[9] Exhibit “A” was preceded by an initial agreement concluded between
Maswil, represented by Josua Daniel Van Den Heever , and Momentum
on 12 July 1996 , marked exh ibit “F”. At the time of sign ature, the
plaintiff was Momentum Lewens Versekeraars Beperk, now referred to as
Momentum Group L imited. As explained earlier, the plaintiff has gone
through several name changes registered through the Companies and
Intellectual Property Commission but remains the same party.
Momentum and Maswil, with the latter represented by Mart hinus
Johannes Spangenberg and Le Grange Snr, concluded an updated broking
agreement which superseded the previous agreements in 2002 , marked
exhibit “G”, with its commencement da te also reflected as 15 August
1996. On 04 September 2003, Momentum and Maswil , with the latter
represented by Le Grange Snr concluded an Addenda to Momentum
Broking Agreement marked exh ibit “H”, and its commencement date
remained 15 August 1996. On 15 June 2005, Momentum and Maswil ,
with the latter represented by Le Grange Snr and Mr Spangenberg,
concluded another updated broking agreement, exh ibit “I”, which
replaced the previous agreements. Throughout these agreements , the
registration numbers of the companies and the unique code of the broking
house were the same. The different agreements were concluded either
because of the change in the industry practices, or in the plaintiff’s or
defendants’ details, or the change to the broker house details as
evidenced, for example, by exhibits “F” (Momentum Lewens
Versekeraars Beperk and Maswil Makelaars (Edms) Bpk) and “G”
(Maswil Makelaars (Edms) Bpk and Momentum Group Limited).
[10] On 20 May 2009 , Momentum and Maswil, with the latter represented by
Le Grange Snr and Jnr concluded a Debit Loan Agreement (“Exhibit K”)
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which is offered to broker houses that have fallen into debit balances to
enable them to continue earning a commission while repaying the debt /
debit balance . An amount of R600 000.00 was advanced to Maswil ,
which cleared the debit balance. Accordingly, Maswil was to repay that
amount in 15 equal monthly instalments, inclusive of interest. These
instalments would be paid by debiting Maswil’s commission account held
with Momentum. Thus, there need ed to be sufficient commission earned
within the month to cover the instalment.
[11] Mr Le Grange Snr entered into a Financial Planner Agreement with
Momentum, exhibit “R”, issued on 25 June 2010 and commencing on 01
July 2010 under the code 066157, in terms of which he was appointed as
an independent contractor to canvass and sell products and policies of
Momentum and other associated companies. Momentum advanced
commission and fees to him , which were repayable upon lapsing,
termination or cancellation of the products or policies. Le Grange Snr,
however, terminated the financial planner agreement on 28 February
2011, a mere seven months later. In terms of the termination clause of the
Financial Planner Agreement, termination of the said agreement me ant
that it was closed for new business.
[12] In its particulars of claim at paragraph 19, Momentum averred that , with
its consent, Le Grange Snr sold and/or transferred his existing book
comprising the entire broker portfolio to Maswil on 16 March 2011 . The
transfer was effected on 12 April 2011. Momentum contend ed that there
was compliance by itself, Maswil and Le Grange Snr with all the
conditions precedent before effecting the transfer , alternatively, that it
waived strict compliance with such conditions by consenting to the
transfer or sale. Maswi l, represented by Le Grange Snr, accepted all
8
rights and obligations arising from the financial planner agreement. An
amount of R492 010.53, categorised as commission at risk and reflected
on Le Grange Snr’s existing book , which included his entire broker
portfolio, was transferred from his financial planner broker code to
Maswil’s broker code as reflected in Maswil’s commission account.
[13] According to Ms Fordham’s testimony , who relied on exhibits “T1” and
“T2” to address the book transfer issue, the clients were transferred from
Le Grange Snr to Maswil. Exh ibit “T1”, signed by Le Grange Snr on 22
March 2011, and under the Maswil letterhead, is a FICA 1 declaration
accepting the broker entity code 066157 which was allocated to Le
Grange Snr as a financial planner. Exhibit “T2” under the heading
“application for transfer of clients and business” shows that the transfer is
from Le Grange Snr 039999/066157 to 023865 /810329 Maswil
Makelaars sole proprietor. It further records the products that were
transferred. The type of transfer is shown as a book sell from MFP
(Independent Financial Planner ) to MDS (other role within the broker
house, Maswil). The transfer was completed on 12 April 2011.
[14] According to the broking agreement, the broker house would canvass and
obtain applications for insurance policies, maintain and service those
policies, and Momentum would pay commission and fees on those
policies to the broker house. Policies would be written under a specific
product house that would in turn receive commission. Momentum pays
the broker house commission under a specific code, and the broker house
pays its own brokers. In certain instances, Momentum, exercising its
discretion, would pay annualised advanced commission , and should the
premiums on those policies not be paid, Momentum would recalculate
1 Financial Intelligence Centre Act 38 of 2001.
9
what was paid in advance and claw back the portion of the advanced
commission based on the regulations under the Long -Term Insurance
Act.2 Should a broker house have clawed back commission which creates
a debit, Momentum would be entitled to set off any credits coming into
that credit account against the debit balance. The certificate of balance,
signed by the Momentum manager, need not be proven and would serve
as prima facie proof of the debit owing by the broker house.
[15] Mr Pieter Jansen van Rensberg is currently at Momentum Holdings as
business owner for Momentum commission system where there are seven
or eight service providers. He provided the following evidence on behalf
of Momentum. All commissions pass through the system and are netted
off each other before commission is paid. A commission is generated by
this system. The information on the commission system is the policy
number, the details of the broker involved, the activity that was done, the
commission amount payable to the broker and VAT. The system also has
retention facility should there be risk on the side of the broker. The
commission statement is similar to an invoice. Commission at risk entails
certain products, for example ; when Momentum myriad is sold to a
client, the commission is regulated by the Long-Term Insurance Act and
is paid upfront for a period of two years , split in to two portions , being
66% up front and 33% to be paid 12 months later . The commission
clawback would be over a period of 24 months. The risk amount would
be calculated by the system, indicating the commission to be clawed back
should the policy lapse . To ensure the integrity of the commission
system, a monthly reconciliation is done and audited on a regular basis by
both internal and external auditors.
2 52 of 1998.
10
[16] Clause 14.1 of the broking agreement stipulates:
‘Momentum will provide commission statements to the Broker House . The Broker
House agrees that Momentum will make available the commission statements on its
website (w[...]) or by email on request thereof. The Broker House must inform
Momentum in writing within 21 days of the date of such statement if it disputes any
entry on the commissioned statement, failing which, the content s of such statement
will be deemed to be correct.’
[17] The commission statement reflects what the broker house has earned,
whether there were any advance payments of commission made, whether
there were any loan repayments or policy lapses, and any other
deductions like VAT. The names of Messrs Le Grange Snr and Jnr appear
in all the commission statements as principals of the broker house. No
query was raised within 21 days after the commission statements in
relation to Maswil were issued . Therefore, Momentum deemed the
commission statements to be correct in terms of clause 14.1 above . The
commission statements ran until November 2012. From May 2011 , the
broker house account fell into a debit amount of R205 820.18 resultantly
causing Maswil to be indebted to Momentum as appearing in the
commission statements in exhibit “B”.
[18] Consequently, Momentum addressed a letter by registered mail to Maswil
Makelaars CC under the head ing ‘Termination of broker contract Maswil
Makelaar CC, Reg No 1904/175005/23023865 ’, dated 14 July 2011
(exhibit “C1”). The letter terminated the broker house agreement as seen
from the quoted relevant parts below:
‘This letter serves to give you 14 days’ notice that the above contract with Momentum
Group Limited and its associated product houses will be terminated with effect from
11
28 July 2011. Please refer to clause 9 of your contract for the provisions governing the
termination.
HANDED OVER FOR LEGAL COLLECTION
The consequences of the termination are as follows, as agreed in terms of Clause 9 of
your contract:
1. We will credit the broker house retention account with all future commission
due. The payment of such commission will be withheld for a period of 24
months from date of termination.
2. Upon expiry of the 24 -month period, Momentum will pay to the broker house
any credit balance that has vested. (Kindly note that the broker house carries
the onus of notifying us on the expiry of the said period, and we will not effect
such payment automatically). Thereafter Momentum will pay any further
commission on an as-and-when basis.
3. No new business may be submitted in terms of this contract, nor may any
alterations be effected to existing policies issued hereunder.
4. Please take note that this vested commission does not include F[...], Health
and Short term.
Please note that should you have any other contracts with Momentum, the termination
of this contract will not affect the existence of such contracts.
In order to continue assisting your clients, with the servicing and advice on any
policy, you are requested to make a selection below and follow the instructions
accordingly:
Option 1: Complete the attached application for transfer of clients to another active
Momentum Broker House; this transfer will only take place at Momentum’s
discretion and will depend on current legislation & the licensing of the accepting
broker;
Option 2: Instruct Momentum in writing to reintermediate your clients on your behalf
through one of our reintermediation processes.
Should we not receive your feedback within 45 days from date of this letter,
Momentum will automatically process option 2 and apply reintermediation.’
12
As at 28 May 2012, the debit balance was R486 813.03. This meant that
the commission advanced was clawed back and Maswil was indebted to
Momentum for the repayment of the amount.
[19] Clause 9.4 of the broking agreement stipulates thus: ‘Either party may
terminate this agreement by giving 14 days’ written notice to the other,
and such party will not have to furnish reasons for the termination in such
notice.’ Notwithstanding that the clause did not require any reasons to be
given, Momentum gave Maswil reasons for the termination, being that
the debt from the broker house was handed over for legal collection.
Although the opening balance of the commission statement on 12 May
2012 was R473 932.88, the plaintiff is claiming an amount of R474
858.24 as appearing on the certificate of balance as at 11 May 2012 ,
signed by Mr Carl Martin Webb Van Rooyen, Head of Legal Momentum
Sales. The effect of the termination of the agreement was that , not only
was Maswil closed for new business , but the said termination would not
extinguish any of Momentum’s rights under th e agreement. In terms of
the broking agreement, “ new business ”, as referred to in clause 9.1 ,
means any new application as well as any premium increases (excluding
CPI increases), term extensions, and alterations to existing policies.
[20] With the exception of the seventh defendant, Le Grange Jnr, whose
liability is limited to R94 584, the other defendants concluded various
unlimited deeds of suretyship in which each of them bound him/herself to
Momentum Group Limited and its successors in title, as surety and co -
principal debtor in solidum with Maswil Makelaars (Edms) Bpk (the
debtor), to and in favour of Momentum Group Limited and its successors
in title (the creditor), for the due performance of all the obligations of the
debtor to the cr editor, more particularly any amount owing by the debtor
13
as a result of any debit balance reflected on the debtor’s commission
account with the creditor.
[21] The parties agreed that this Court can use the English version of the Deed
of Suretyship marked exh ibit “P” for all the defendants whose deeds are
similar but in Afrikaans. The deeds of suretyship went on to provide,
inter alia, as follows3:
‘1. I hereby acknowledge to be fully acquainted with all the obligations of the debtor
to the creditor.
. . .
7. Should the creditor institute any legal action arising out of this suretyship against
me, I undertake to pay the costs of such action – including collection commission and
tracing fees – on the scale as between attorney and own client.
8. The creditor shall be entitled to cede, assign, encumber, deal with or alienate his
interest hereunder without my consent or notice to me. Any reference to the creditor
herein includes the creditor’s successors in title, or other legal holder thereof.
9. I hereby accept that the creditor may in his sole discretion without prejudice to his
rights hereunder and without my consent or notice to me and without thereby in any
way relieving me from liability towards the creditor, do any of the following: release
or acquit securities, sureties and/or co -principal debtors partially or entirely in respect
of the debtor’s indebtedness; change or alter any conditions; advance or re -advance
money and encumber any securities further; reach a settlement or make any other
arrangement with the debtor; on the insolvency of the debtor prove a claim against the
insolvent estate and accept any offer of compromise; compromise with the debtor or
allow him an extension of time, relaxation, or indulgence in respect of his liabilities;
institute legal proceedings against the debtor without prior notice to us of the debtor’s
default or its (the creditor’s) intention to take proceedings.
. . .
13. Any admission, or acknowledgement of indebtedness by the debtor, will be
. . .
13. Any admission, or acknowledgement of indebtedness by the debtor, will be
binding on any surety. I hereby agree that a certificate purporting to be signed by a
3 Clauses 1, 7, 8, 9, 13 and 18 of the deed of suretyship.
14
manager of the creditor (whose authority need not to be proved), showing the total
debt owing by me at the date of that certificate, in terms hereof, shall be sufficient and
satisfactory proof to enable the creditor to obtain provisional sentence or judgment
against me in terms of this deed of suretyship for the amount mentioned in such
certificate, and the onus shall rest upon me to prove that the amount thus mentioned is
not due.
. . .
18. No termination or variation of this suretyship will be of any force and effect
unless it is recorded in writing and signed by the creditor.’
[22] This is what the sureties committed to in the ir respective deed of
suretyship:
‘I, the undersigned _______________(name) do hereby bind myself as surety and co -
principal debtor in solidum with Maswil Makelaars (Edms) Bpk (94/05883/07)
(hereafter referred to as the debtor) to and in favour of Momentum Group Limited
Reg. No. 1904/002186/06 and its successors in title (hereafter referred to as the
creditor) for the due performance of all the obligations of the debtor to the creditor,
more particularly any amount owing by the debtor as a result of any debit balance
reflected on the debtor’s commission account with the creditor.’
[23] The p laintiff closed its case, after which, the defendants elected not to
testify and not to call any witnesses but to close the defence case as well.
The following i s the defendants’ case from their papers and their
counsel’s oral argument.
Evidence for the defendants
[24] Firstly, Ms Ford ham’s evidence was attacked by the defence counsel
purely on the basis that it was hearsay evidence as she has no personal
15
knowledge thereof because her appointment at Momentum occurred after
the broking agreements and the deeds of suretyship were signed.4
[25] Secondly, the defendants challenged the validity of the transfer of Mr La
Grange Snr’s book as well as the proof of the resultant indebtedness of
Maswil. They took issue with the fact that a certain Ms Alta Scheepers
had demanded that all the affected parties must sign consent documents,
including the consent to cession as well as the FICA declaration, to be
returned to her. She also added the following:
‘Please also take note of the current commission at ri sk amount of R 193 758.10.
When a transfer is completed, all commission will flow to the new code as indicated
below:
FUTURE COMMISSION: - any future commission to be calculated and released by
the Product House. For instance: new policy movements e.g . CPI’s and upfront
commission.
UNRELEASED COMMISSION: - commission calculated but not yet received by the
product house. Refer to upfront renewals.
ALREADY RELEASED COMMISSION INCLUDING FUTURE CLAWBACKS: It
overwrites the debit follow credit rule – which means the debit will go to the new
planner code, irrespective of where the credit went.’
There was an email requesting that the transfer be put on hold as Mr Le
Grange Snr, under code 066157 , wanted to settle his debt before the
transfer could be effected. However, following further considerations and
enquiries regarding commission flows, an email from Mr Andre Olivier
dated 18 April 2011 reads: ‘commission flows for the current month
should also be transferred please. No transfer must be made on the Health
Book.’
4 S v Ramavhale 1996 (1) SACR 639 (A) at 650B-D; see also Special Investigating Unit and Another v
Engineered Systems Solutions (Pty) Ltd 2022 (5) SA 416 (SCA) para 40.
16
[26] It was further argued that, on a proper construction regarding sale/transfer
as contemplated in clauses 9.6.1 or 9.6.2 of the Financial Planner
Agreement, this Court should rather ask whether Momentum was
justified in transferring the clients and liabilities to Maswil/Le Grange
Jnr. Clause 9.6 of the Financial Planner Agreement stipulates:
‘9.6 In the event of termination of this Agreement as set out in Clause 9.4 and 9.5,
the Financial Planner will be entitled to sell his existing book to another
Momentum intermediary or apply for an independent broker agreement with
Momentum, subject to the following:
9.6.1 Should the Financial Planner apply for a Momentum independent broker
agreement:
9.6.1.1 Momentum must receive the completed application forms for a broker
agreement within 30 (thirty) days from termination of the Agreement;
9.6.1.2 Momentum must consent to the application for a broker agreement;
9.6.1.3 Momentum must receive the Agreement of Sale concluded between the
Financial Planner and new broker entity within 30 (thirty) days from
the issue date of the new broker agreement;
9.6.1.4 The new broker entity accepts all rights and obligations from the
Financial Planner Agreement including possible future lapses and
current debit balances.
9.6.1.5 In the event that the independent broker agreement is granted,
commission flows will continue to be credited to the commission
account of the Financial Planner, and will be paid out (to the banking
account of the broker house) after a portfolio transfer to the
independent broker has been effected (in accordance with
Momentum’s protocols for portfolio transfers at that time). Where such
a portfolio transfer is duly effected, the parties agree that this will not
amount to a contravention of Clause 3.1.1 above.
9.6.1.6 Any commission accrued and owing to the Financial Planner in respect
of business submitted prior to the date of termination and as reflected
in his commission account on Momentum’s systems at the time of
17
termination, will be paid out to the Financial Planner, after it has
vested, on an ad hoc basis upon the request of the Financial Planner,
(subject to set off as against any amounts owing), or transferred to the
independent broker code in accordance with the request for a portfolio
transfer.
9.6.2 If the Financial Planner sells his existing book to another Momentum Broker
or Financial Planner then the following conditions will apply:
9.6.2.1 Momentum must receive the Agreement of Sale concluded between the
Financial Planner and the proposed buyer within 30 days from date of
cancellation of the Agreement;
9.6.2.2 Momentum must give written consent to the sale or transfer of the
existing book to the proposed Momentum intermediary. Momentum
will not unreasonably withhold such consent;
9.6.2.3 The new broker or Financial Planner will accept all rights and
obligations from the Financial Planner Agreement including possible
future lapses and current debit balances. A portfolio transfer must be
effected (in accordance with Momentum’s protocols for portfolio
transfers at that time). Where such a portfolio transfer is duly effected,
the parties agree that this will not amount to a contravention of Clause
3.1.1 above.’
[27] The challenge by the defendants in respect of the transfer of Le Grange
Snr’s clients from his MFP code to Maswil’s code boils down to whether
there was procedural compliance either with clause 9.6.1 or 9.6.2 by
Momentum. Sight must not be lost that Messrs Le Grange Snr and Jnr
signed the broking agreement together, and they are both members of
Maswil. So , when one considers whether there was a transfer/ sale of
book by Le Grange Snr , this aspect remains in the background as a
relevant consideration . Mr Le Grange, for the defendants, referred the
Court to the replying affidavit of Mr Andrè Olivier, Regional Manager of
the plaintiff, in an application for judgment in terms of Rule 31(1)(c) after
the plaintiff, in an application for judgment in terms of Rule 31(1)(c) after
the respondents had signed a confession to judgment in terms of Rule
18
31(1)(b) on 11 February 2019 under Case No 2/2012, brought by
Momentum against Le Grange Snr and Ms Monica Le Grange, now the
6th respondent, in which the said Olivier had said:
‘18.1 When the defendant joined the plaintiff as a financial planner the defendant was
obliged to resign as key individual and representative for Maswil Brokers….The
defendant could not continue to conduct business as an intermediary through Maswil.’
[28] Mr Le Grange, for the defendants, contended that, without the written
sale agreement as contemplated in clause 9.6.2, the plaintiff had failed to
establish its case. He contended that the purpose of such a written
agreement is to record Maswil’s acceptance or consent to the liabilities,
and that this acceptance or consent must be evidenced in writing.
Accordingly, the agreement must reflect Maswil’s acceptance not only of
the clients but also of the liabilities; without this, the plaintiff has not
made out a case. Further, t he defendants seem to contend that
Momentum, except for furnishing its own statement under Maswil, has
not provided any evidence that when Le Grange Snr left Maswil to join
Momentum MFP on 07 July 2010, the initial debt belonged to Maswil. In
an internal Momentum email communication from Riaan Coetzee to
Bertus Visser, the following was said: ‘[Snr] used to be the principal…
and [Jnr] took over Maswil with [Snr’s] debit approx. R200 000.’
The communication went on to state that Snr’s debt was taken over by
Jnr/Maswil. The defendants argued that there is lack of evidence showing
that either Jnr/Maswil consented or accepted Snr’s debt of about
R200 000. The defendants claim that because Ms Alta Scheepers, a
Momentum employee, had requested for a consent agreement , failing
which Snr’s debt would follow him to his new MFP code, the failure by
19
Momentum to furnish such consent overrides the “debit follow credit
rule”.
[29] In their amended plea, the defendants denied that the deed of suretyship is
still valid , as it was “nullified” by the new broker agreements entered
into. Mr Le Grange submitted that not only does Momentum expect the
sureties to be held liable for the debt stemming from the time when the
defendants concluded the suretyship agreements , but also for the debts
that arose after the conclusion of the suretyships. Counsel argued that for
Momentum to succeed in such a claim , it must prove, on a proper
interpretation of the deed of suretyship, that it is a “continuing covering
suretyship(s)”. This is so because it would be covering a continuing
future debt which must be clear from the wording of the deed, so the
argument went.
Analysis
Suretyship
[30] In KPMG Chartered Accountants (SA) v Securefin Ltd and Another 5, the
Supreme Court of Appeal (SCA) cautioned that interpretation is a matter
of law and not of fact and, accordingly, interpretation is a matter for the
court and not for witnesses (or, as said in common-law jurisprudence, it is
not a jury question).
[31] The rules of interpretation are trite, one needs to adopt a holistic
approach. This approach to interpretation was enunciated in Natal Joint
Municipal Pension Fund v Endumeni Municipality6 as follows:
5 2009 (4) SA 399 (SCA) para 39.
6 2012 (4) SA 593 (SCA) para 18.
20
‘. . . Interpretation is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument, or contract, having
regard to the context provided by reading the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon its coming into
existence. Whatever the nature of the document, consideration must be given to the
language used in the light of the ordinary rules of grammar and syntax; the context in
which the provision appears; the apparent purpose to which it is directed and the
material known to those responsible for its production. Where more than one meaning
is possible each possibility must be weighed in the light of all these factors. The
process is objective, not subjective. A sensible meaning is to be preferred to one that
leads to insensible or unbusinesslike results or undermines the apparent purpose of the
document.’
[32] Mr Le Grange , for the defendants , advanced a purely textual approach.
According to counsel, the phrase ‘owing by the debtor’ indicates a current
obligation, something that needs to be settled . The term “account” in the
phrase ‘debtor’s commission account’ , is not plural, further argued
counsel. The word would therefore refer to a specific account where the
commission owed to the debtor is recorded and does not refer to other,
further or future accounts. Mr Le Grange further submitted that the phrase
‘as a result of any debit balance’ is an indication of a current obligation.
[33] I disagree with counsel’s interpretation. As long as there is (or will be) an
outstanding debt flowing from the broking agreement, there is (or will be)
a debt owing for purposes of the phrase ‘owing by the debtor’. In light of
the context provided , the aforesaid phrase does not necessarily limit the
debt to a current debt. The contention that th e term “account” in the
phrase ‘debtor’s commission account’ is not plural is also neither here nor
phrase ‘debtor’s commission account’ is not plural is also neither here nor
there because the various debts in relation to a certain commission
21
account may be reflected in one document , as in this case , where it was
recorded in the certificate of balance. It suffices that the said account is
the debtor’s commission account. The phrase ‘as a result of any debit
balance’ does not necessarily indicate a current debt either because a ny
debit balance can comprise consolidated debt s over a certain period and
be summed up into a debit balance. Further, in all likelihood, a suretyship
agreement meant to be in relation to a specific current debt would have
stipulated the respective amount owed.
[34] Accordingly, from the language used in the deed of suretyship and in the
light of ordinary rules of grammar, it is evident that the intention of the
sureties was to bind themselves together with Maswil for the due
performance of all the obligations of the debtor to the creditor , provided
they appear on the debtor’s commission statement. Even if it were to be
accepted that the suretyship agreement is ambi guous for failure to define
the nature and origin of the debt, Mr Le Grange’s interpretation still falls
short.
[35] In instances where a court must undertake an interpretative exercise
wherein there is some ambiguity, Innes CJ in Glenn Brothers v
Commercial General Agency Co Ltd 7 instructively said: ‘in reading a
document like this, we are justified in looking at the circumstances under
which the guarantee was given , and the position of the various parties
concerned.’ Indeed, it is so that one is aligned with the trite rules of
interpretation that endorse a holistic approach wherein one is to read the
words used in the context of the document as a whole , and in the light of
all relevant circumstances to establish the intention of the parties.
7 1905 TS 737 at 740; see also Swart en ‘n Ander c Cape Fabrix (Pty) Ltd 1979 (1) SA 195 (A) at 200E-202C.
22
[36] It is trite that a suretyship is by nature an accessory to the underlying
transaction which creates the obligations of the principal debtor. 8 Thus, a
suretyship obligation arises only in respect of a principal obligation owed
by another. In all three different occasions when the suretyship
agreements were concluded, the underlying transaction was always the
broking agreement. The broking agreement would therefore be one of the
key factors to be considered when interpreting the suretyship agreement .
The nature of the broking agreement and how it would operate was never
in dispute or unknown by the sureties. By nature, the broking agreement,
while deemed to have been in effect as of 15 August 1996, essentially
conceives of continuous/future transactions between Maswil and
Momentum. This is a strong indicator that it must have been the sureties ’
intention for the suretyship agreements to at least include future debts.
[37] Further, the law on suretyship agreements is clear, in the words of Corbett
JA in Trust Bank of Africa Ltd v Frysch 9, ‘it is not essential that the
principal obligation exists at the time when the suretyship contract is
entered into. A suretyship may be contracted with reference to a principal
obligation which is to come into existence in the future ’. If a suretyship
agreement can be concluded even before the underlying transaction
exists, surely a suretyship agreement can be in relation to a debt that has
not yet been incurred. Mr Le Grange provided the terminology the
suretyship agreement would have had for it to include future debts.
However, counsel’s interpretation makes a mockery of the suretyship
agreement concluded on 28 January 2002 by the fourth and fifth
defendants because there was no existing debt at the time, at least
according to counsel. It would make no sense for the fourth and fifth
8 Nedbank Ltd v Van Zyl 1990 (2) SA 469 (A) at 473G -H; see also Odendal and Another v Structured
Mezzanine Investments (Pty) Ltd (482/13) [2014] ZASCA 89 (30 May 2014) para 9.
9 1977 (3) SA 562 (A) at 584G-H; see also Nedbank Ltd v Van Zyl 1990 (2) SA 469 (A) at 474A.
23
defendants to co nclude a suretyship agreement in relation only to an
existing debt when there was in fact no existing debt as of 28 January
2002. This indicates that the reasonable interpretation is that the parties
intended for the suretyship agreement to relate to future debts as well.
[38] In Bock and Others v Duburoro Investments (Pty) Ltd 10, the SCA
elucidated:
‘This Court, in ABSA Bank Ltd v Davidson 2000 (1) SA 1117 (SCA) ; ([2002] 1 All
SA 355 (SCA) at para [14], was confronted with the submission that:
“there is a general so -called “prejudice principle” in our law to the effect that, if a creditor should do
anything in his dealings with principal debtor which has the effect of prejudicing the surety, the latter
is fully released.”
It came, in the words of Olivier JA, without any mincing, to the conclusion that no
such principle exists and held (at para [19]):
“As a general proposition prejudice caused to the surety can only release the surety (whether totally
or partially) if the prejudice is the result of a breach of some or other legal duty or obligation. The
prime sources of a creditor’s rights, duties and obligations are the principal agreement and the deed of
suretyship. If, as is the case here, the alleged prejudice was caused by conduct falling within the terms
of the principal agreement or the deed of suretyship, the prejudice suffered was one which the surety
undertook to suffer. Counsel who drafted the plea was therefore on the right track when he sought to
base his case upon prejudice which flowed from the breach of an obligation, contractual in the present
circumstances.”
[39] From the language used in the deed of suretyship, in the light of ordinary
rules of grammar, as well as the relevant context, it is evident that t he
defendants bound themselves individually as surety and co -principal
debtor in solidum with Maswil in favour of Momentum Group Limited
for the due performance of all its obligations . More particularly any
for the due performance of all its obligations . More particularly any
amount owing by the debtor as a result of any debit balance reflected on
the debtor’s commission account with the creditor . Momentum has not
released the defendants as sureties and co -principal debtors at any stage .
10 2004 (2) SA 242 (SCA) para 20.
24
The Debit Loan Agreement, exhibit “K”, signed for by Messrs Le Grange
Snr and Jnr , was for the benefit of Maswil. I can conceive of no reason
why the defendants cannot be held liable in terms of the deeds of
suretyship, unless t he defendants demonstrate any breach of some legal
duty or obligation by Momentum. I turn to this issue as it relates to the
alleged unlawfulness of the book transfer.
Book transfer
[40] The defendants’ challenge on the transfer of Mr Le Grange Snr’s book
cannot stand. From the two documents, exhibits “T1” and “T2” , as well
as the internal exchange of emails between the plaintiff’s personnel 11,
there seems to be merit in what is pleaded by the plaintiff in paragraph
19E of its amended particulars of claim which reads thus:
‘The plaintiff, first and fourth defendants [Messrs Le Grange Snr and Jnr] duly
complied with all the conditions precedent referred to in paragraph 19A.12.1 – 4
alternatively, such conditions precedents were agreed upon for the sole benefit of the
plaintiff who waived strict compliance therewith by expressly alternatively tacitly
consenting to the sale and transfer and effecting such transfer to the first defendant’s
[Maswil’s] commission account.’
[41] Further, Messrs Le Grange Snr and Jnr have participated in the process of
the tra nsfer and cannot approbate and reprobate by now demanding a
written agreement in hindsight. Ms Fordham testified that Maswil
obtained positive commission flows from the transferred clients , and this
portion of her testimony was not challenged. This transfer of commission
at risk had no actual impact on Maswil and only became relevant upon
cancellation or termination of the policy which fell within the clawback
period. Maswil’s commission was already in the negative even prior to
11 Pages 813 and 814 of trial bundle volume 2.
25
the book transfer as evidenced by the reconciliation statement, raw data
and commission statements. No evidence was tendered by the defendants
to substantiate their contention that Maswil’s indebtedness was
predominantly as a result of the book transfer which prejudiced them as
sureties.
[42] Accordingly, I conclude that the defendants have not shown any breach
of a legal duty or obligation by Momentum. Therefore, they remain
bound in terms of the suretyship agreement for any amount owing by
Maswil as a result of any debit balance reflected on Maswil’s commission
account with Momentum.
Quantum
[43] Momentum needs only to furnish a certificate of balance that is in
accordance with the broking agreement as well as the suretyship
agreement, and such shall , without more, be prima facie evidence of the
amount owing.
[44] The defendants challenged the certificate of balance as hearsay , accusing
Momentum of being opportunistic in relying on such a certificate of
balance having failed to prove its quantum. First, they challenged the fact
that its author’s position, Mr Carl Martin Webb Van Rooyen , is Head of
Legal Momentum Sales which does not qualify him as a department head
of Momentum. Clause 13.7 of the Broking Agreement stipulates:
‘A certificate signed by a department head of Momentum, whose capacity need not be
proven, will constitute prima facie proof of the total amount that the Broker House
owes to Momentum. Such certificate may serve as a liquid document in any
26
competent court of law for the purposes of provisional sentence, default judgment or
summary judgment or any other legal proceedings.’
[45] The second challenge was that the certificate of balance does not specify
the limited liability of the seventh defendant , making it seem as if he is
five times the limitation specified in the deed of suretyship that he signed.
Thus, this omission constitutes a clear indication that the signatory failed
to apply his mind to the documents at hand. As a result, the correctness
and reliability of the certificate of balance are open to serious question .
They further contend ed that the certificate was signed on 02 October
2012 when the amount specified in the summons was R474 858 advanced
commission and or fees and or monies to Maswil , whereas two years
later, on 21 August 2014, in Momentum’s amended particulars of claim, a
book sale/t ransfer of debt from Le Grange Snr to Maswil to the risk
amount of R492 010.53 was included . Thus, the inclusion of the
sale/transfer debt renders the said certificate outdated. It was further
argued that the sureties did not agree to a certificate of balance issued by
a department head , and that clauses 13.2 and 15.2 of the deed of
suretyship refer to a certificate issued by a manager. Consequently, the
certificate is without force and effect, the defendants concluded.
[46] To even challenge the position of Head of Legal: Momentum Sales or
that the deed of surety ship requires the signatory to be a Head of
Department lacks merit. As head of a legal department , Mr Carl Martin
Webb Van Rooyen’s position qualifies. The defendants are merely raising
a technical argument that is unnecessary. To further claim that in the
deeds of suretyship the position of the signatory is a manager and that Mr
Van Rooyen is not a manager is fallacious. Manager is defined in the
Concise Oxford English Dictionary as:
27
a) A person who manages an organization or group of staff.
b) A person who controls the professional activities of a performer,
sports player, etc.
c) A person in charge of the activities, tactics, and training of a sports
team.
d) Computing a program or system that controls or organizes a peripheral
device or process.
e) A member of either House of Parliament appointed with others for
some duty in which both Houses are concerned.
I am, therefore, unable to find any reason to disregard the certificate of
balance in casu merely because it may be outdated or did not specify the
seventh defendant’s limited liability. The defendants’ submissions in as
far as the position Head of Legal or manager is concerned are technical
and misplaced.
[47] The submission that the certificate constitutes inadmissible hearsay is not
supported by the facts. The clauses provide that it will constitute prima
facie proof of indebtedness , and the authority of its author need not be
proved. As elucidated by the SCA in Senekal v Trust Bank of Africa Ltd
(“Senekal”)12:
‘There might be several items to which such a certificate relates, some of which may
appear to be unassailable while others may either be shown to be inaccurate or appear
to be of dubious reliability, or might require some modification or adjustment. I can
find no reason why in such circumstances the certificate is to be entirely disregarded
merely because it is found or thought to be inaccurate or unreliable in certain respects.
At the end of the case, when all the evidence (which includes the certificate) is in, the
12 1978 (3) SA 375 (A) at 382G-383A.
28
Court must decide whether the party upon whom the onus rests has discharged it on a
proper balance of probabilities. As was pointed out by Stratford JA in Ex parte
Minister of Justice: In re R v Jacobson and Levy 1931 AD 466 at 478:
“Prima facie evidence, in its more usual sense, is used to mean prima facie proof of an issue the
burden of proving which is upon the party giving that evidence.”
If the prima facie evidence or proof remains unrebutted at the close of the case, it
becomes “sufficient proof” of the fact or facts (on the issues with which it is
concerned) necessarily to be established by the party bearing the onus of proof.
(Salmons v Jacoby 1939 AD 588 at 593.)’
[48] The contention that the seventh defendant’s (Le grange Jnr’s) liability is
limited to R94 584.00 is common cause , and I cannot fathom why this
aspect alone can draw an adverse consequence. As pronounced in
Senekal, there is no reason why the entire certificate should be
disregarded when, with all the evidence presented, a modification would
cure this inaccuracy. I therefore find that the certificate of balance was
duly signed.
[49] It is established law that if there is a duly signed certificate of balance, as
I have held in casu, the onus lies with the party challenging the
correctness of the amount reflect ed therein to adduce evidence to the
contrary.13 Instead of adducing evidence in rebuttal, the defendants
appear to have reversed the onus and left it to the plaintiff to prove the
veracity of its computation systems . In the words of Van Zyl J ; ‘It would
place an unbearable, if not an impossible, burden on the [plaintiff] if [it]
were required to prove the accuracy of the system employed in generating
the certificate. The parties expressly dispensed with this kind of
evidentiary burden by providing that a duly signed certificate reflecting
the amount outstanding would be sufficient proof thereof.’14
13 Momentum Life Assurers Ltd v Thirion [2001] JOL 9094 (C) para 46.
14 Ibid.
29
[50] The plaintiff’s witnesses provided direct evidence. Ms Scallan , for the
plaintiff, submitted that since the sixth and seventh defendants were
present in court throughout the proceedings but never testified, this Court
should draw an adverse inference against the defendants. The trite
principle was enunciated by the Appellate Division in Elgin Fireclays Ltd
v Webb 15, that if a party fails to place the evidence of a witness who is
available and able to elucidate the facts before the trial Court , this failure
leads naturally to the inference that he fears that such evidence will
expose facts unfavourable to him. But the inference is only a proper one
if the evidence is available and if it will elucidate the facts. 16 There are
four defendants in these proceedings , particularly on the issue of the
suretyship and the new broker agreement. No explanation was prof fered
why they were not called to testify.
[51] Based on the evidence set out above, I am satisfied that the plaintiff has
discharged its onus of proving its case on a balance of probabilities that
the first defendant, Maswil Finansiele Adviseurs CC, is indebted to the
plaintiff for commission advances in the sum of R474 858.24. I am
further satisfied that the fourth to the seventh defendants have failed to
prove their pleaded defences . It therefore follows that the plaintiff is
entitled to its relief with the defendants being jointly and severally liable
to the plaintiff in the sum of R474 858.24 with interest at 14% per annum.
The seventh defendant’s liability is limited to R94 584.00. There is no
reason why costs should not follow the result.
[52] In the result, the following order is made:
15 1947 (4) SA 744 (A); see also Dlanjwa v The Minister of Safety and Security (20217/2014) [2015] ZASCA
147 (1 October 2015) para 29.
16 Elgin Fireclays Ltd v Webb (Supra) at 749-750.
30
1. The fourth, fifth, sixth and seventh respondents are jointly and
severally liable to the plaintiff in the sum of R474 858.24 (with the
seventh defendant’s liability being limited to R94 584.00) together
with interest at 14% per annum and costs on an attorney and client
scale.
______________________________
MAMOSEBO J
JUDGE OF THE HIGH COURT
NORTHERN CAPE DIVISION
Appearances
For the plaintiff: Adv. J Scallan
Instructed by: Gerings Attorneys
c/o PGMO Attorneys
For the 2nd and 3rd defendants: Adv. D van der Walt SC
Instructed by: Wessels & Smith Inc.
c/o Duncan & Rothman Inc.
For the 4th to 7th defendants: Adv. A J Le Grange
Instructed by: Oosthuizen Attorneys Inc.
c/o Engelsman Magabane Inc.