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[2026] ZAGPJHC 439
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Firstrand Bank Limited v Bezuidehout and Another (127755/2024) [2026] ZAGPJHC 439 (24 April 2026)
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IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
JOHANNESBURG)
Case
Number: 127755/2024
REPORTABLE: NO
OF INTREST TO OTHER
JUDGES: NO
REVISED: NO
FIRSTRAND
BANK LIMITED
APPLICANT\
AND
CHRISTIAAN LOURENS
BEZUIDEHOUT
FIRST RESPONDENT
KWALALITE (PTY)
LTD
SECOND RESPONDENT
JUDGMENT
MAKUME,
J
:
1.
In this matter, the
applicant, Firstrand, seeks a money judgment against the second
respondents in their capacities as sureties
and co-principal debtors
to the indebtedness of Pure Lube Limited (in liquidation) to
Firstrand, the applicant.
2.
The respondents oppose
the application on various grounds enumerated here under as follows:
2.1.
Firstly, that the
suretyship executed by them, as per Annexure FA10 and FA11 are
invalid for the following reasons:
2.1.1.
That Annexure FA10 was
not executed in compliance with Section 6 of the General Laws
Amendment Act of 1955, as the document has
material alterations which
were made after signing them without their consent.
2.1.2.
That there is no
resolution by the board of second respondent authorizing the
execution of the suretyship in favor of the applicant.
2.1.3.
That the respondents
unilaterally escalated the risk exposure of the respondents by
extending the additional amount of R5 million
without ensuring the
anticipated securities in the form of a bond over Pure Lube's
property.
2.2.
First respondent
contends that undue pressure was brought to bear on him to sign the
suretyship, Annexure FA10,
2.3.
that the agreement was
varied without their consent,
2.4.
that there has been no
compliance with the provisions of the
National Credit Act 34 of 2005
,
2.5.
that Pure Lube (in
liquidation) should have been joined in the application,
2.6.
that the respondents
should have first obtained judgment or proved claims against Pure
Lube prior to proceeding against them based
on the contested
suretyship.
Background
facts
.
3.
On 30 December 2022
Pure Lube (Pt)y Limited concluded a facility agreement with the
applicant. On the same day, the first
respondent executed an
unlimited suretyship in favor of the applicant for the indebtedness
of Pure Lube to the applicant.
4.
On 10 March 2023 the
second respondent executed a limited suretyship in favor of the
applicant for the indebtedness of Pure Lube
to the applicant.
On 17 August 2023 the applicant and Pure Lube concluded a
further facility agreement.
5.
On 27 February 2024, 6
March 2024, the applicant addressed letters to Pure Lube and to the
respondents to make payment of the balance
due as a result of Pure
Lube's breach of the various facilities as well as the instalment
sale agreement.
6.
On 18 March 2024 Pure
Lube was placed in provisional liquidation at the instance of a third
party unbeknown to the applicant.
7.
On 24 May 2024 the
applicant applied for and was granted leave to intervene in the
liquidation application of Pure Lube. On
20 September 2024 Pure
Lube was placed in final liquidation.
8.
On 6 November 2024 this
application was launched which elicited the responses and defenses
listed above.
Nature
of the application
.
9.
This application is for
recovery of an amount of money advanced to Pure Lube now in
liquidation to which the respondents bound themselves
as sureties
andco-principal debtors. At the hearing of this application,
the applicants indicated that they only seek judgment
against the
second respondent whose liability is limited to an amount of R3
million. The claim against the first respondent
is to be
postpone
sine die
.
10.
It is not in dispute
that firstly, the applicant complied with the agreement by advancing
the amount stipulated to Pure Lube before
liquidation. It is
also not in dispute that the respondent executed the deeds of
suretyship. What is in dispute is
the validity of the
agreements on various spurious grounds which I now deal with
hereunder.
Grounds
of opposition
.
11.
The respondents
maintained that the suretyship agreement executed by them are invalid
because after execution thereof, the applicant
made material
alterations to the deeds of suretyship without their knowledge.
Secondly, that there was no resolution by the
second respondents
board authorizing the signing of the suretyship. Lastly, that
the applicant unilaterally escalated the
risk exposure of the
respondent by extending the additional facility of R5 million without
ensuring that the anticipated security
in the form of a bond over
Pure Lube’s property was in place.
12.
The first respondent
arguing on behalf of the second respondent says that there was no
board resolution authorizing the second respondent
to sign a surety.
It is argued that this is in conflict with the provisions of
Section
75
of the
Companies Act 71 of 2008
in that the first respondent as a
sole director stood to incur personal liability under his own
suretyship and therefore had a
conflicting personal interest when
purporting to sign and bind the second respondent for R3 million.This
argument is bad in law.
The respondent has not applied his mind
to the provisions of
Section 57(1)
and
57
(3) of the
Companies Act.
Both
sections clearly deal with the situation where a company has
only one shareholder and one director. This is the case in this
matter. Van Houten is not only a single shareholder but is a
single director.
Section
57(3)
reads as follows:
“
If
a profit company other than a state-owned company has only one
director-
a)
that director may
exercise any power or perform any function of the board at any time
without notice or compliance with any other
internal formalities
except to the extent that the company's memorandum of incorporation
provides otherwise.”
13.
Annexure F11 is a
recordal of the minutes of the board of directors of Kwalalite (Pty)
Limited held on 10 March 2023 at
Witbank at which meeting
it was resolved that Mr Christiaan Bezuidenhout signs a surety on
behalf of the company limited to an
amount of R3 million.
Peculiarly in paragraph 5 of that resolution, the following is
recorded:
“
The
board of directors declare and state that any condition and all
restrictions set out in the company's memorandum of incorporation
have been satisfied.”
14.
Bezuidenhout does not
contend that Kwalalite’s memorandum of incorporation provides
otherwise. The resolution clearly
authorized the single
director to pass the resolution.
15.
The second defense
raised on behalf of Kwalalite is that the applicant unilaterally
escalated the risk exposure without ensuring
that a bond is
registered as secured over Pure Lube’s property. Mr
Bezuidenhout is in this regard disingenuous and
shifty.
Bezuidenhout
himself
agreed on behalf of Kwalalite that the latter would execute a first
mortgage bond over the property. He however breached
that
obligation when he executed a power of attorney and authorized the
registration of a first mortgage bond over the same property
in favor
of Standard Bank.
16.
The next defense raised
is one of economic duress.
The
first respondent's evidence is that he signed Annexure FA10 under
threat of immediate withdrawal of essential credit facilities.
A close scrutiny of both suretyship documents indicates that both
were signed in the presence of witnesses. Significantly
on both
documents right at the end just above the signature appears the
following sentence:
“
The
obligations imposed upon the surety pursuant to this suretyship may
be very burdensome. Should the surety harbor any doubt regarding
the
exact meaning and effect of these obligations, we advise that
independent legal advice should be taken prior to signature hereof.”
17.
This, in my view, puts
paid to the duress defense if there was any.
The
two witnesses who signed below the signature of Bezuidenhout should
have filed affidavits supporting the version of Bezuidenhout. They
did not as there was no duress or pressure put on Bezuidenhout to
sign. This defense is once again an afterthought and falls to
be
dismissed.
18.
The next defense raised
by the respondent is that after signing the suretyship document,
albeit under duress, is that the applicant
went ahead to vary the
contents without their knowledge or consent. This appears in
paragraph 6 of the respondent's answering
affidavit. The two
sureties are annexed to the founding affidavit. They clearly do
not contain any alteration.
The respondent, Mr Bezuidenhout,
does not say precisely where the alterations are. In fact, in
his answering affidavit
at paragraph 6, he only mentions annexure
FA10, which is a suretyship signed in his personal capacity as the
one which was unilaterally
altered. He does not say the same
about annexure FA11, which relates to Kwatalite. The only
objection he raises about
FA11 is that there was no Board authority.
As a result, the suretyship agreement, according to him, should be
declared invalid
and
ultra
vires
.
19.
Bezuidenhout has failed
to set out and articulate facts that support his conclusion that the
suretyships were altered.
It
is trite law that in motion proceedings the affidavits constitute
both pleadings and evidence.
20.
The court in Circle
Construction (Pty) Limited versus Smithfield Construction
1982 (4) SA
726
held as follows.
“
A
defense must be pleaded as well as proved for the court sits to try
the issues raised by the pleadings.”
21.
The next defense raised
is that there was no compliance with the provisions of
National
Credit Act in
that so says the respondent that Firstrand Bank failed
to conduct an affordability assessment prior to the suretyship being
signed.
As a result, the agreements are unenforceable as
reckless trading.
22.
The respondents are
conveniently avoiding to refer to
Section 9(4)
of the NCA which refer
to large transactions. A credit agreement is a large
transaction if the principal debt in terms of
the credit transaction
or guarantee equals or exceeds R250 000.
23.
Secondly, in terms of
Section 4(1)(A)(i)
of the NCA, the Act does not apply to the facility
granted to Pure Lube because its asset value exceeded R1 million.
See
in this regard Firstrand Limited versus Carl Beck Estates (Pty)
Limited and another 2009(3) SA385T at paragraph 18.
24.
In the result, the
contention that Firstrand had a duty to conduct an affordability
assessment in respect of the main debtor and
the respondents a
sureties is misplaced and the defense must fail.
25.
The last two defenses
raised and which go together is the issue that Firstrand should have
sued Pure Lube before resorting to the
a sureties. Secondly, that
Pure Lube should have been joined in the proceedings. The respondents
go on to say that Firstrand must
first prove their claim with the
liquidators of Pure Lube.
26.
This defense needs not
detain this court for long. A perusal of clause 31 of the
suretyship agreement indicates that the respondents
waive the benefit
of division as well as the benefit of excursion.
27.
In the matter of Gerber
versus Wolson 1955 (1) SA page 158(A) the court held that a
defense of excursion and division must
be specifically pleaded and is
not available if it was renounced. Someone who signs as surety
and co-principal debtor renounces
that defense.
28.
There was in my view no
need to first file a claim against the liquidators of Pure Lube and
to join the liquidators' company in
these proceedings. I have
come to the conclusion that this application against the second
respondent should succeed and I
make the following order.
Order
1.
Judgment is granted in
favor of the applicant against the second respondent for payment of
the amount of R3 million, together
with interest thereon at the
rate of 15.5% per annum, compounded monthly, calculated from 31 March
2024 until date of payment,
both days inclusive.
2.
The second respondent
shall pay the applicant's costs on the attorney and client scale.
3.
The application as against the
first respondent is postponed
sine
die
.
MAKUME
J
JUDGE
OF THE HIGH COURT
JOHANNESBURG
Appearance
For
the Applicant:
Adv
NJ Horn
Instructed
by:
Werksmans
Inc
For
the Respondent :
Mr
Gerhard Dreyer
Instructed
by:
Dreyer
& Dreyer Attorneys