Tshepe and Another v Rustia Feed (Pty) Ltd

The applicants, Elias Thapelo Tshepe and Victoria Tshepe, signed a standard credit application in April 2003 on behalf of Bonolo Farms (Pty) Ltd for the supply of animal feed by Rustia Feed (Pty) Ltd. The credit application incorporated a deed of suretyship in terms of which the Tshepes bound themselves as sureties and co‑principal debtors for Bonolo Farms’ obligations, and also contained a clause consenting to the increased monetary jurisdiction of the magistrates’ court. Bonolo Farms defaulted on payment for goods supplied, resulting in arbitration and a High Court order against it for approximately R992 403. When Bonolo Farms failed to satisfy the judgment, Rustia Feed sued the Tshepes in the Rustenburg magistrates’ court on the suretyship. The Tshepes denied personal liability, alleged they were unaware of the suretyship clause, raised iustus error, and contended that the magistrates’ court lacked monetary jurisdiction. The magistrates’ court and the High Court rejected these defences. The Tshepes then applied for special leave to appeal to the Supreme Court of Appeal.

Condonation for the late filing of the application for special leave to appeal was granted. The application for special leave to appeal was dismissed with costs.

The case affirms important principles on suretyship and jurisdiction in South African law, particularly that a suretyship may validly be incorporated into a standard credit application and that signatories may bind themselves personally despite also acting in a representative capacity. It clarifies the interpretation of consent to increased magistrates’ court jurisdiction under section 45 of the Magistrates’ Courts Act and reinforces the narrow scope of the iustus error defence in commercial transactions.