Airports Company South Africa Ltd v Masiphuze Trading (Pty) Ltd and Others

Airports Company South Africa Ltd (ACSA) leased retail premises at King Shaka International Airport to Masiphuze Trading (Pty) Ltd for the operation of a Wimpy franchise. Masiphuze’s shareholders and directors, including Mr Ntavhanyeni Albert Nemukula, signed a deed of suretyship annexed to the lease, binding themselves as sureties and co-principal debtors for Masiphuze’s obligations. Masiphuze later fell into rental arrears, whereupon ACSA cancelled the lease and sued for arrears, damages for holding over, and ejectment, relying on the suretyship. At trial, only Mr Nemukula defended the claim. He alleged that when he signed the lease documents he was unaware that one of them was a deed of suretyship, that manuscript insertions identifying the sureties and principal debtor were added without his authority, and that the suretyship was invalid under s 6 of the General Law Amendment Act 50 of 1956 or unenforceable due to iustus error. The High Court accepted his version and dismissed ACSA’s claim against him.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with a declaration that Mr Nemukula is bound by the deed of suretyship and an order that he pay ACSA’s costs up to 15 June 2018. The matter was remitted to the trial court to determine the amounts owing under the lease and suretyship, including damages for holding over.

The case clarifies the application of section 6 of the General Law Amendment Act to deeds of suretyship, confirming that strict formalism is not required where the identities of the surety, principal debtor, and debt are ascertainable from the document read as a whole and by reference to incorporated agreements. It also reaffirms the narrow scope of the defence of iustus error in South African contract law, particularly in commercial contexts where a party signs documents without reading them.