Maize Board v Jackson

The Maize Board, a statutory control board under the Marketing Act 59 of 1958, sued John Jackson, a maize farmer, for unpaid statutory levies arising from maize produced during the 1992/3 to 1994/5 production seasons. Jackson had entered into two simultaneous and interdependent agreements with Rainbow Chicken Farms (Pty) Ltd: a lease of farmland to Rainbow and a management agreement appointing Jackson as manager of Rainbow’s maize farming operations. Under these agreements, maize was produced on Jackson’s land and delivered to Rainbow, which used it to feed its chickens. The Maize Board alleged that these agreements were simulated and designed to disguise what was in truth a sale of maize by Jackson to Rainbow, thereby avoiding payment of statutory levies payable by producers. The High Court dismissed the claim, finding that simulation was not proved, and the Maize Board appealed.

The appeal succeeded with costs. The High Court order was set aside and replaced with judgment in favour of the Maize Board for payment of R576,439.63 plus interest, together with costs including the costs of two counsel.

The case is a leading authority on simulation in South African contract law, particularly in the context of statutory levies and agricultural marketing schemes. It reaffirms the principle that courts will look beyond the form of agreements to their substance and implementation, and clarifies the evidentiary indicators relevant to proving simulated transactions.