IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case No.: 2025-058782
In the matter between:
GENFIN (PTY) LTD Applicant
and
ZULU LOUNGE SA (PTY) LTD First Respondent
SHUMAIZ HASHIM ACHARATH PARAKKAT
MAHAL
Second Respondent
Coram: Montzinger AJ
Heard: 18 March 2026
Delivered: 25 March 2026
Summary: Application for monetary judgment on motion – Second respondent disputes
this court’s jurisdiction – applicant an incola but second respondent a perigrinus of the
court – principles of jurisdiction restated – liability in terms of guarantee – no merit in
disputing the court’s jurisdiction or the liability of second respondent – Monetary
judgment granted.
ORDER
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1. The second respondent is ordered to pay the applicant the sum of
R1,424,419.95 (One million four hundred and twenty-four thousand four
hundred and nineteen rand and ninety-five cents) plus interest on the
aforementioned amount at the rate of 5% per month from 25 March 2026 to date
of payment.
2. The second respondent is ordered to pay the costs of this application on the scale
as between attorney and client.
JUDGMENT
Montzinger AJ
Introduction
[1] This is an opposed application in which the applicant, Genfin (Pty) Ltd seeks an
order for the payment of the sum of R1,424,419.95, together with interest and costs,
against the second respondent, Mr Shumaiz Hashim Acharath Parakkat Mahal. The
claim is based upon a loan agreement concluded between the applicant and the first
respondent as well as a written guarantee and surety agreement concluded between
the applicant and the second respondent.
[2] The loan agreement was concluded on 8 December 2023, at Stanger (now
KwaDukuza), KwaZulu-Natal. It was signed on behalf of the applicant in Pretoria,
Gauteng, and on behalf of the first respondent by the second respondent at
KwaDukuza.
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[3] In terms of the loan agreement the applicant lent and advanced the sum of
R2,000,000.00 to the first respondent. On the same date, the applicant and the
second respondent entered into an ancillary written guarantee and suretyship
agreement in terms of which the second respondent bound himself as both guarantor
and surety in respect of the first respondent’s obligations under the loan agreement.
[4] The applicant duly performed its obligations in terms of the loan agreement.
Initially the loan bore interest at the rate of 10 percent, capitalised at inception, with
monthly interest thereafter accruing at 2.5 percent. Repayment was to be made in
22 monthly instalments of R152,630.45, commencing on 2 April 2024 and ending
on 31 January 2026.
[5] The first respondent initially complied with the repayment terms and made nine
successful instalment payments of R152,630.45 during the period April 2024 to
January 2025. Two attempted payments, on 2 January 2025 and 3 March 2025, were
returned. The first respondent thus made total net repayments of R1,373,674.05, but
ceased making payments from February 2025 onwards and has been in default since
that date. The first respondent was provisionally liquidated during June 2025 and is
not participating in these proceedings.
[6] The second respondent opposes the application on two grounds and those are the
only issues that require determination. The first is whether this Court has
jurisdiction to entertain the application since the second respondent is a peregrinus
of this Court’s area of jurisdiction. The second issue, which only arises if
jurisdiction is established, is whether the document upon which the applicant relies
for the second respondent’s liability constitutes a guarantee to create an independent
principal obligation apart from the surety provisions of the same document.
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[7] I deal first with the jurisdiction issue and thereafter I will consider whether the
applicant is entitled to judgment having regard to the defence raised.
Contextualising the Jurisdiction Issue
[8] The second respondent is a local peregrinus of this Court. He resides in Ballito,
KwaZulu-Natal. He has never resided, been domiciled, or carried on business in the
Western Cape. As foreshadowed, the loan agreement was concluded at KwaDukuza
and Pretoria.
[9] The applicant advances at least two grounds for this court’s jurisdiction. First, the
applicant relies on its own status as an incola of this court read with clause 18.2 of
the loan agreement or clause 14.2 of the surety and guarantee agreement. The
aforementioned clauses provide that the parties submit to the non-exclusive
jurisdiction of the Western Cape Division of the High Court. The second leg of the
applicant’s basis for this court’s jurisdiction is that the contractual cause of action
against the second respondent partially arose within this court’s jurisdiction as both
the partial performance and breach of the loan agreement occurred within this
Court’s jurisdictional area.
[10] On the papers, the second respondent asserted that a consent to jurisdiction is
insufficient in the absence of a connecting factor in that Court’s area of jurisdiction.
Reliance is placed on Fick
1, Cordiant Trading2, and Gallo Africa3 to submit that
there is no connecting factor between the dispute before the court and the Western
1 Natalse Landboukoöperasie Bpk v Fick 1982 (4) SA 287 (N)
2 Cordiant Trading CC v Daimler Chrysler Financial Services (Pty) Ltd 2005 (6) SA 205 (SCA)
3 Gallo Africa Ltd v Sting Music (Pty) Ltd 2010 (6) SA 329 (SCA)
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Cape as the loan was advanced and the agreements concluded in KwaZulu-Natal
and Gauteng, the money was disbursed at KwaDukuza, Kwazulu-Natal and the
second respondent also resides in KwaZulu-Natal. The second respondent also
disputes that the cause of action arose within the jurisdictional area of this court.
The Legal Framework for the Court’s Jurisdiction
[11] The statutory point of departure is section 21(1) of the Superior Courts Act 10 of
2013. That section provides that:
“A Division of the High Court has jurisdiction over all persons residing or
being in, and in relation to all causes arising and all offences triable within,
its area of jurisdiction and all other matters of which it may according to
law take cognisance…”
[12] The section uses deliberately broad language. As has been observed by the court in
Veneta
4 the legislature intended to interfere as little as possible with the common
law grounds for jurisdiction. Recourse must therefore be had to common law
principles to determine whether a court is competent to adjudicate a particular
matter
5.
[13] Therefore, having regard to section 21(1) of the Super Courts Act it means that a
Division of the High Court has jurisdiction: (i) over all persons residing or being in
its area of jurisdiction; (ii) in relation to all causes arising within its area of
4 Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (in liq) 1987 (4) SA 883 (A) at 886
5 Although Veneta was decided during 1987 when section 19(1) of 1959 Supreme Court Act closely
resembles the wording of the current section 21(1) of the Superior Courts Act, 10 of 2013.
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jurisdiction; (iii) in relation to all other matters of which it according to law may
take cognisance. There are also various common law grounds like domicile,
contract, delict, cause of action, cohesion of causes and location of property.
[14] The basic common law principle in respect of money claims (whether from
contract, delict or otherwise) is that the plaintiff must sue in the court of the
defendant: actor sequitur forum rei. However, there are exceptions. The exception
relevant to this matter is the situation where the plaintiff is an incola of the court
where proceedings are instituted and the defendant is a local peregrinus
6 of that
court, but jurisdiction is established on any of the other common law ratio
jurisdictionis.
[15] Some of the recognised grounds of jurisdiction, or ratio jurisdictionis, include: (a)
that the cause of action arose within the court’s area of jurisdiction; (b) that the
defendant has consented or submitted to the court’s jurisdiction; and (c) in the case
of a foreign peregrinus, that property has been attached to found or confirm
jurisdiction.
[16] In this matter the applicant relies firstly on the authorities of Hay
7; Tsung8; and
Travelex9 for the proposition that where the plaintiff is an incola of the court, the
submission to jurisdiction by a local peregrinus defendant is of itself sufficient to
found the court’s jurisdiction. This ground is relied on as an independent basis for
jurisdiction.
6 meaning domiciled or resident in the Republic but outside the court’s area of jurisdiction
7 Hay Management Consultants (Pty) Ltd v P3 Management Consultants (Pty) Ltd [2005] 3 All SA 119
(SCA)
8 Tsung v Industrial Development Corporation of SA Ltd 2006 (4) SA 177 (SCA)
9 Travelex Limited v Maloney 2016 JDR 1776 (SCA)
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[17] In addition to the independent basis for jurisdiction, the applicant is also relying on
the exception to the actor sequitur forum principle by alleging that the cause of
action arose within the jurisdiction of this division. To establish this ground as a
basis for jurisdiction and since the applicant’s cause of action is based on contract,
the applicant must establish where: (i) the contract was entered into; (ii) the contract
is or was to be performed, wholly or in part; or (iii) the particular breach of contract
upon which the applicant relies, was committed
10.
[18] Suffice to say that my understanding of the authorities is not that the judgments of
Hay11; Tsung12; and Travelex Limited created a new independent ground for a
court’s jurisdiction. In my view it actually fits perfectly into the established
common law approach to jurisdiction that has been developed by our courts. The
judgment of Tsung in fact explains it as follows
13:
‘… In one instance, effectiveness is non-existent, and that is in the case of
submission to jurisdiction (also referred to as prorogation). The reason is
this: If a peregrine defendant has submitted - whether unilaterally or by
agreement - to the jurisdiction of the court of the incola, an attachment or
arrest to found or confirm jurisdiction is not only unnecessary, it is not
permitted. (Consent on its own cannot confer jurisdiction unless the plaintiff
is an incola.)
10 Roberts Construction Co Ltd v Willcox Bros (Pty) Ltd 1962 (4) SA 326 (A) at 331H-332A.
11 Hay Management Consultants (Pty) Ltd v P3 Management Consultants (Pty) Ltd [2005] 3 All SA 119
(SCA)
12 Tsung v Industrial Development Corporation of SA Ltd 2006 (4) SA 177 (SCA)
13 para 25
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[19] The court in Tsung goes further 14 to explain that: “In the case of a peregrinus
defendant, what is additionally required, with either attachment to found
jurisdiction or a submission to jurisdiction, is ‘…the link between the cause and the
court, a link that is established when the plaintiff is an incola’.
[20] What the Hay, Tsung and Tralex judgments say is that in the situation where a local
perigrinus defendant has submitted to the court’s jurisdiction, a link between the
‘cause’ and the court must be establish. That can be established if the plaintiff is an
incola of the court. However, it requires the ‘cause’ also to arise in the court’s area
of jurisdiction. Cordiant gives some context to what ‘cause’ may mean by
suggesting that: “… ‘causes arising’ does not refer to causes of action but to all
factors giving rise to jurisdiction under the common law. Of course, such factors
do not exclude a cause of action.”
[21] Furthermore, in Gallo
15 the Supreme Court of Appeal makes it clear that: “…the
domicile of the plaintiff never determines jurisdiction” . This means the fact that a
plaintiff is an incola can never establish jurisdiction on its own and as the cause for
the court’s jurisdiction.
[22] On the argument as presented on behalf of the applicant, by Mr O’Connor, it means
that in the situation where the plaintiff is an incola and where jurisdiction of the
court was consented to, the court will as a matter of course have jurisdiction. That
cannot be correct. If I accept the proposition on behalf of the applicant it means
there is in fact no ratio jurisdictionis present, which is essential to establish
jurisdiction.
14 para 25
15 para 8
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[23] This means instead of considering the basis for the applicant’s jurisdiction as two
separate and distinct grounds I will consider them rather as one ground.
Evaluation of the jurisdiction issue
[24] There is no dispute that the second respondent is a local peregrinus. As pointed out
earlier, he is domiciled and resident in Ballito, KwaZulu-Natal, within the Republic
of South Africa, but outside this Court’s area of jurisdiction. There is also no dispute
that the applicant is an incola of the court. However, as I have concluded that alone
is not enough to establish jurisdiction. The question is therefore what constitutes a
sufficient ratio jurisdictionis to provide this division with jurisdiction to determine
the dispute before it.
[25] This is where the independent nature of the guarantee document is relevant. Mr
Holland, on behalf of the second respondent, at the hearing placed reliance on the
judgment of Van Zyl AJ in Business Fuel
16 in which the judge held at paragraph 47
that the primary distinction between a contract of suretyship and a guarantee is that
a guarantee, in the strict sense, creates a solidary, independent, and principal
liability which exists independently of any underlying obligation by the principal
debtor to the creditor. Relying on that conclusion, Mr Holland submits that, since
the applicant is seeking judgment against the second respondent under the
guarantee, which is a principal and independent obligation, jurisdiction must be
established with reference to the guarantee agreement alone, and not by reference
to the loan agreement.
16 Business Fuel (Pty) Ltd v Alberts and Another (Case No 12531/2023, Western Cape Division)
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[26] Mr Holland further argues that the guarantee agreement does not itself contain
provisions specifying where payment is to be made or where performance is to
occur. The loan agreement’s requirement that payment be made into the Cape Town
bank account, so the argument goes, is irrelevant to the guarantee because the
guarantee creates an obligation independent of the loan agreement. Therefore, if the
court agrees with this argument, the applicant has failed to establish that the cause
of action under the guarantee arose within this Court’s jurisdiction.
[27] There are some difficulties with this argument. Firstly, the guarantee agreement
implicitly and expressly incorporates the terms of the loan agreement. Clause 3.1.1
of the guarantee agreement, which requires the guarantor “to punctually pay any
and all amounts which may be payable to the Lender from time to time … by the
Borrower” and “to punctually perform any and all obligations which may be owing
from time to time by the Borrower in terms of or as a result of the Loan
Agreement/s.” Since the loan agreement requires payment to be made in Cape
Town, the guarantor’s obligation to pay those very amounts must also be performed
in Cape Town. Furthermore, the applicant’s RMB bank account, to which
repayment instalments were to be directed, is maintained at a branch in Cape Town.
[28] Mr Holland’s argument, while creative, conflates the independence of the guarantee
obligation with the terms that define the content of that obligation. It is correct, as
Van Zyl AJ held, that a guarantee in the strict sense creates a principal and
independent obligation, one that is not accessory to the principal debt in the manner
of a suretyship. But it does not follow that the guarantee exists in a vacuum, entirely
detached from the underlying loan agreement to which it relates. While the
obligation under the loan agreement remains for the principal debtor the guarantor
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is liable in his own right, without the creditor being required first to pursue the
principal debtor. But the place of performance is determined by what the guarantee
requires the guarantor to do, and what it requires him to do is pay the amounts due
under the loan agreement at the place stipulated in the loan agreement.
[29] It is clear to me that since the cause of action is based on contract and this is a
monetary claim that the cause of action partially ar isen within this court’s
jurisdiction, as both the partial performance of and the breach of the agreement
occurred within the Court’s jurisdictional area.
[30] I am therefore satisfied that the jurisdiction of this court has been established on the
basis of the cause of action having arose within the court’s jurisdiction, coupled
with the fact that the applicant is an incola of the court and the second respondent
submitted in writing to this court’s jurisdiction.
The liability of the second respondent
[31] The agreement on which the applicant relies for the second respondent’s liability is
a single document titled “Guarantee and Surety Agreement.” The second
respondent bound himself as both guarantor and surety in favour of the applicant in
respect of the first respondent’s obligations under the loan agreement. It is not in
dispute that the surety component of the “Guarantee and Surety Agreement” did not
comply with the Electronic Communications and Transactions Act 25 of 2002.
Section 6 of the General Law Amendment Act 50 of 1956.
[32] The applicant’s case, however, against the second respondent does not rely on the
suretyship. It contends that the Guarantee and Surety Agreement contains two
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distinct obligations: (a) a guarantee obligation, by which the second respondent
assumed a principal, independent obligation to pay the applicant; and (b) a
suretyship obligation, by which the second respondent bound himself as surety and
co-principal debtor for the debts of the first respondent. It is the applicant’s case
that the guarantee component is an independent obligation and survives the
invalidity of the suretyship, and is therefore enforceable.
[33] At the hearing of the matter Mr Holland, sensibly, accepted that there are
authorities
17 that have made a definitive pronouncement on the very defence raised
by the second respondent in this matter. In fact, in this court in the judgments of
Business Fuel
18 and Du Toit19 the same defences were considered and an analysis
in respect of the same documents that serve before me was done. Those judgments
involve the same applicant, albeit in the Business Fuel matter under a different
name. The court in both judgments found that the guarantee component of the
document is still enforceable notwithstanding that the surety component is invalid
for non-compliance with the relevant statutes. Unless, I can find that both those
judgments were wrong I am bound by them.
[34] I am therefore satisfied that the guarantee provisions of the agreement create a valid,
independent, and principal obligation binding the second respondent to the
applicant. The guarantee is enforceable and it follows, since no other defence is
raised, the applicant is entitled to judgment.
17 Standard Bank of South Africa Ltd v Wardkiss Property Holdings (Pty) Ltd (9324/22) [2023] ZAKZPHC
153 (19 December 2023) and those cited in fn 12 and 13. See also: Malesela Taihan Electric Cable (Pty)
Ltd v Fidelity Security Services (Pty) Ltd [2017] ZAGPJHC 341
18 Business Fuel (Pty) Ltd v Wiets L Alberts & 1 other (12531/2023) ZAWCHC (20 March 2024)
19 Genfin (Pty) Ltd v Johan Pieter Du Toit (18584/2023
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The judgment amount
[35] The applicant asks for judgment in the amount of R1,424,419.95 plus interest
accrued at the rate of 2.5% per month, calculated on a daily basis and capitalised
monthly until 31 January 2026 and thereafter at a rate of 5% per month on the
utilised balance from 1 February 2026 to date of payment in full. As Mr O’Connor
pointed out the judgment amount in the notice of motion includes one month’s
arrear interest.
[36] I therefore grant judgment in the amount as prayed for on the basis that interest runs
on, and is limited to an amount equal to, the whole of the judgment debt, including
the portion which consists of previously accrued interest and that the post-judgment
interest runs at the rate agreed upon contractually
20.
Conclusion and order
[37] In the result, in the following order is made:
1. The second respondent is ordered to pay the applicant the sum of
R1,424,419.95 (One million four hundred and twenty-four thousand four
hundred and nineteen rand and ninety-five cents) plus interest on the
aforementioned amount at the rate of 5% per month from 25 March 2026 to
date of payment.
20 Paulsen and Another v Slip Knot Investments 777 (Pty) Limited 2015 (3) SA 479 (CC); 2015 (5) BCLR
509 (CC) (24 March 2015) para 100
2. The second respondent is ordered to pay the costs of this application on the
scale as between attorney and client.
Appearance s:
Attorneys for applicant:
Counsel for applicant:
Attorneys for second respondent:
Counsel for second respondent:
Acting Judge of the High Court
Van der Meer and Partners Inc.
Mr SF VanZyl
Mr O' Connor
ER Browne and Sons
Per: Andrew Golschmidt
Mr. Holland
14 I P age