THE HIGH COURT OF SWAZILAND
Case No. 563/93
the matter between:
BANK OF SWAZILAND Plaintiff
WASTE CENTRE (PTY) LTD First Defendant
MANSOOR Second Defendant
MANSOOR Third Defendant
BENNETT Fourth Defendant
PLAINTIFF Mr. Sapire S.C.
SECOND, THIRD AND FOURTH DEFENDANTS Mr. Zeiss S.C.
this case the following facts are not in real dispute.
Waste Centre (Pty) Limited (the first defendant) was a company that
was incorporated in Swaziland and carried on business in Manzini. It
was a family business, run by Mr. and Mrs. Mansoor (the second and
fourth defendants) with the assistance of their son Ikraam, who is
now almost twenty-one.
1991 the company had an account with the Meridien Bank of Swaziland
Limited (the plaintiff). The account had been opened in the name
"Ka-Mkhulu Cash and Carry (Pty) Ltd" but it is now common
ground that this was a misdescription, the true account holder being
the first defendant trading as Ka-Mkhulu Cash and Carry.
request to open an account for the company was made in writing by Mr.
Mansoor and his son Ikraam (the latter being then some seventeen
years old): see Exhibit P1. As is apparent from Exhibit P2, Mr. and
Mrs. Mansoor and Ikraam were all described as "directors/partners"
of the company. The bank had been requested by Mr. Mansoor and
Ikraam, in Exhibit P1, to honour the signature of either of them on
behalf of the account holder and each of them, described as a
"director", signed the authorised signatories' card which
has been produced as Exhibit P4.
company initially had an agreed overdraft facility, at the bank, of
E100,000. By 17th September 1991, it had exceeded that agreed limit.
On that day Mr. Dube, the bank's branch manager, wrote to Mr.
Mansoor. He referred to their recent discussions, confirming that the
bank was in principle agreeable to the increase of the facility to
E200.000 on certain conditions, which were to include the signature
by the directors of the company of personal guarantees, in favour of
the bank, "for facilities granted" to the company. It is
clear from the penultimate paragraph of the letter that the bank was
concerned to obtain extra security because of the fact that the
company had already exceeded its agreed limit. I think it can also be
inferred readily, though in the end nothing really turns on it, that
the bank was concerned to put the unauthorised overdraft on a formal
Dube enclosed with this letter a printed form of guarantee. The copy
he enclosed had not been filled in at all in any of the places
Mansoor consulted Mr. Lubega, the senior partner in a prominent firm
of chartered accountants. He took with him and gave to Mr. Lubega the
printed form of guarantee. He had a reason for approaching Mr.
Lubega, who was not ordinarily his accountant. He did so, to put it
shortly, because he knew that Mr. Lubega had a relationship with the
bank and he was hopeful that the accountant could assist him to get
better overdraft facilities.
19th September 1991, Mr. and Mrs. Mansoor and Mr. Lubega met with Mr.
Dube at the bank. At this meeting they discussed an increase of the
facility to E400.000.
the meeting, Mr. Dube gave to Mr. and Mrs. Mansoor the document that
has been produced here as Exhibit D3. This is a printed form of
guarantee in the same terms as the one sent by Mr. Dube to Mr.
Mansoor on 17th September.
present purposes, the relevant portions of the form of guarantee are
paragraph 1, on the front page, and the attestation provisions on the
1 is couched in the following terms:
In consideration of MERIDIEN BANK SWAZILAND LIMITED (herein after
called "the Bank" which expression shall include and extend
to their successors and assigns) affording to KA-MKHULU CASH AND
CARRY (PTY) LTD of P.O. BOX 94, EZULWINI (hereinafter called "the
Debtor") certain banking facilities we YACOOB MANSOOR, IKRAAM
MANSOOR AND REJOICE BENNETT of P. 0. BOX 94 EZULWINI hereby bind
ourselves jointly and severally to pay and satisfy-to the Bank on
demand in writing being made to us all sums of money which the Debtor
may now or from time to time hereafter owe to the Bank either solely
or jointly with any other person or persons whether such indebtedness
arises from money already advanced or hereafter to be advanced
(including the Debtor's liability actual or contingent to the Bank on
any guarantees or indemnities executed by the Debtor) together with
all interest discount and other bank's charges including legal
charges occasioned by this or any other security held by the Bank for
the same indebtness or by the enforcement of any such security.
nevertheless that the total amount to be recovered from me/us
hereunder shall not exceed the sum of Emalangeni together with
interest thereon at the rate applicable to the facilities afforded
under this Guarantee from the date of demand by the Bank upon me/us
the other side, the form of guarantee is dated 19th September 1991.
is signed by Mr. and Mrs. Mansoor separately as guarantors. Each of
their signatures is witnessed by Mr. Lubega. It is not in dispute
that each of them signed in Mr. Dube's office on 19th September, when
he handed them the form, or that Mr. Lubega witnessed their
document is also signed below their signatures by Ikraam who, like
his parents, is described as a guarantor. The weight of the evidence,
in my view, is to the effect that he signed it at the bank, on some
1st October, Mr. Lubega wrote to Mr. Dube, referring to the meeting
on 19th September, and confirming a request by his clients for an
overdraft limit of E400,000. In this letter, he referred to the
"collateral" "already held" by the bank, and went
on to say that the directors were willing to offer specified
additional security. This included the cession of life insurance
policies by Mrs. Mansoor and her son. The letter does not refer to
personal guarantees. In other words, it does not contemplate personal
guarantees as "additional" security to that already held by
further meeting was held with Mr. Dube and the general manager, Mr.
Hennie. On the evidence, the request for the increase of the
overdraft facility to E400,000 was refused by the bank at this
(and in my view this is what matters), thereafter the bank did
accommodate the company by way of overdraft facilities in excess of
E100,000. Eventually, on 15th February 1993 the company gave the bank
an acknowledgment of debt in the sum of E219,575.31, agreeing to
liquidate it on certain specified terms.
failed to do so. The bank instituted this action, suing the company
on the acknowledgement of debt and Mr. and Mrs. Mansoor and Ikraam as
company has not contested the action. Judgment has already been given
against it, as prayed.
and Mrs. Mansoor and Ikraam dispute their liability. In their plea,
as it originally stood, they did so on a specific ground, set out in
paragraph 4. While admitting their signatures on Exhibit D3, they
aver that there was never any valid contract of suretyship because
(and I am now quoting from paragraph 4.2) –
consensus was reached as to any limitation of the signatories'
liability, nor was any consensus reached to the effect that the
signatories would be liable on the said instrument without any
consequently that –
the result the .....instrument .......is inchoate and of no force and
effect in law."
seek to sustain that submission, they rely on the fact that the blank
spaces in the proviso in paragraph 1 of the form of guarantee
(Exhibit D3) have not been filled in, and on evidence given at the
trial by Mr. Lubega, Ikraam and Mrs. Mansoor as to the circumstances
in which the form of guarantee was signed.
Zeiss referred me to the South African case of Ellis v. Trust Bank of
Africa Ltd 1981 1 SA 733 (NPD) in which it was held, on the
construction of a form of deed of suretyship in which the amount of
the liability of the sureties had not been filled out in a space
provided for that purpose, that if unlimited liability had been
agreed, the term had not been recorded in the deed, and if it had not
been agreed, the deed was inchoate for want of consensus.
its face, Exhibit D3 (if the proviso to paragraph 1 is for the moment
left aside) contains the essential terms for a contract of
suretyship. It specifies the principal debtor and each of the
sureties. It describes the consideration that is given by the bank
for the suretyships. It also records unequivocally (subject to a
consideration of the proviso) the basis on which the sureties are to
be liable. The structure of paragraph 1 as drafted (in contrast to
the form in issue in Ellis) is to provide for unlimited liability
unless, by the completion of the proviso, some lesser finite limit is
On its face, as signed, it is in my view prima facie an unlimited
guarantee, binding on the signatories.
evidence does not sustain at all, in my view, the point of objection
pleaded by the second, third and fourth defendants. What it shows is
that the bank sought and was given guarantees in the form signed by
them, that it was given these after it had sent them the form of
guarantee in blank and they had consulted a professional adviser, and
that Mr. and Mrs. Mansoor at least signed Exhibit D3 in the presence
of their professional adviser. Clearly they had an opportunity to
propose terms to complete the proviso to limit their liability. It is
also clear that they did not avail themselves of that opportunity and
that in fact no question of limitation of liability was discussed at
the meeting at which they signed the document. The bank thereafter
did continue to accommodate the company. Mr. Lubega's letter of 1st
October shows that his clients were quite well aware, in seeking to
obtain an overdraft of E400,000, that they had already given some
security; and to my mind there is an inference in that letter that
this included the guarantees provided on 1st September. The evidence
does not show that probably there was any question of limitation of
liability that remained inchoate or that they were not content to
rely on the residual terms of the document -by which I mean those
terms other than the uncompleted proviso. Those other, residual terms
themselves constitute in my view, on the proper constructions of this
document, a valid contract of suretyship of unlimited liability.
I find that the bank is entitled to succeed in its claim against Mr.
and Mrs. Mansoor. The issue of rectification, per se, is not
contentious. There will accordingly be judgment for the bank against
the second and fourth defendants in terms of paragraphs (a),(b),(c)
and (d) in the particulars of claim, rectification of the Exhibit D3
being by way of substituting the name of the first defendant instead
of "Ka-Mkhulu Cash and Carry (Pty) Ltd" as the principal
debtor ("the Debtor") referred to in the document.
however, having at first not denied in the plea that he was an adult
businessman, at a very late stage in the proceedings - namely in the
course of the hearing itself - then applied for leave to rely, as
additional ground of defence, on an assertion that he is not liable
on the guarantee, because at the time when he signed it he was a
minor. I mention the delay only in passing. The amendment was in the
event unopposed, and it has not been disputed that he was in fact bom
in November 1973. Accordingly I draw no adverse inference, because of
the delay as such, in respect of his credibility.
is accepted that in order to sustain its claim against Ikraam, the
bank has the burden of showing that on the evidence this case falls
within one of the recognised exceptions to the general rule that a
minor lacks contractual capacity.
its replication, the bank avers –
in signing the guarantee, Ikraam was acting with the knowledge,
consent or assistance of his father and natural guardian, i.e. Mr.
Ikraam was at the time emancipated by reason of his being allowed by
his father and natural guardian to conduct business.
must admit at once to strong misgivings in holding a minor
contractually liable for things done by him, in the context of a
trading concern, at what is to my mind the very young age of
the evidence however, I am satisfied of the following things. In the
first place, as I have recounted, it is not in dispute that Ikraam
was a signatory to the various documents establishing the company's
bank account. Mr. Zeiss submitted that the bank itself had called
noone, such as Mr.Dube, to testify that Ikraam had been held out to
it by himself and his father as a director in the family business. I
do not consider that that matters at all. The documents do describe
him as a director. They also hold him out clearly to be one of the
active participants - at the level of transacting business with the
bank, and to the extent of being authorised to sign cheques alone-in
the company's business. There is clearly evidence from which it can
be inferred that both he and his father at least gave the bank reason
that he was an active, responsible participant in the business.
is no evidence and it was not suggested that the bank knew that he
was a minor. He was eventually a signatory to the guarantee, and Mr.
Lubega later offered the cession of his life policies as additional
own evidence was that in his spare time - i.e. outside school hours -
he took part in the business although he and his mother did say that,
as far as such things as the signing of cheques were concerned, he
did so only at his father's direction. (His father did not testify.)
find myself constrained to conclude, on the whole of the evidence,
that the bank has shown that, in signing the guarantee, Ikraam was
acting with the knowledge, consent and assistance of his father and
I am not yet satisfied that the consequence is that I ought to hold
Ikraam contractually liable for this very substantial debt. If he
were twenty, as he is now, I might well take a different view - but
he was only seventeen at the time. On the evidence, he did act at his
father's direction. I believe him in that respect. I think it very
likely, especially in the case of an Islamic family.
Mr. Mansoor is his natural guardian, this court is his upper
guardian. It has power, in an appropriate case, to set aside the
assistance of his father. It has not been suggested from the bar that
this is a proper case in which to do so, but I am inclined to think
that on first principles, while this court will in an ordinary case
refrain from intervening of its own motion in a civil dispute between
adult litigants, where it is seised of jurisdiction as upper guardian
of a minor different considerations apply.
I wish to give further consideration to this point and I also wish to
give counsel the opportunity to make further submissions on it - if
they so desire - in particular as to the jurisdiction of the court to
intervene mero motu and, of course, on the merits of
so. Unless counsel wish otherwise, I shall be quite happy to accept
written submissions on the point.
respect of the claim against Ikraam, accordingly, judgment is
reserved further for the time being.