Ockie Strydom v Engen Petroleum Limited

The appellant, Mr Strydom, was a director of Soutpansberg Petroleum (Pty) Ltd, which distributed petroleum products on behalf of Engen Petroleum Limited. On 15 December 2004, he signed an unlimited deed of suretyship binding himself as surety and co-principal debtor for all moneys owed by Soutpansberg to Engen. Soutpansberg was provisionally wound up on 13 November 2006 and finally on 12 November 2007, owing Engen approximately R25 million. Engen instituted motion proceedings against Mr Strydom and another surety (Mr Louw) to recover the debt. Mr Strydom was married in community of property and his wife had refused to consent to his signing the deed of suretyship. The North Gauteng High Court (Southwood J) granted judgment against Mr Strydom in the amount of R25,311,432.21 plus interest and costs. Leave to appeal was granted only on the matrimonial property issue.

• Whether a deed of suretyship signed by a spouse married in community of property without the written consent of the other spouse is valid under section 15(2)(h) of the Matrimonial Property Act 88 of 1984
• Whether the exception in section 15(6) of the Matrimonial Property Act applies when the suretyship was signed in the ordinary course of the spouse's profession, trade or business
• Where the onus lies to prove that a suretyship was executed in the ordinary course of business
• Whether the non-consenting spouse is a necessary party to proceedings to enforce a suretyship

The appeal was dismissed with costs.

Section 15(6) of the Matrimonial Property Act 88 of 1984 operates in substance as a proviso to section 15(2)(h), notwithstanding that it is contained in a separate subsection. A spouse who seeks to rely on the protection of section 15(2)(h) must establish that they fall within the full scope of that section's operation, which includes demonstrating that they did not execute the deed of suretyship in the ordinary course of their profession, trade or business. The onus is on the party seeking the protection of section 15(2)(h) to show that the exception in section 15(6) does not apply. Whether a deed of suretyship was executed in the ordinary course of business is a question of fact to be determined by examining the surety's actual involvement in and relationship to the business, including whether they had a commercial interest in its success or failure, their role in its management and operations, and whether the suretyship was given to enable the business to function or succeed.

The majority judgment deliberately avoided making definitive statements about the meaning and effect of section 15(9) of the Matrimonial Property Act, as the case could be resolved without addressing it. Wallis JA noted that this section might come into play in different circumstances but declined to comment on its operation to avoid making obiter statements. The judgment also discusses principles regarding joinder of parties, stating that joinder is only necessary where a party has a direct and substantial interest in the subject matter of the litigation, not merely a financial interest that is indirect. The court stated that a spouse married in community of property does not have a direct and substantial interest in a suretyship to which they were not a party, even though they have a financial interest by virtue of the marriage in community of property. Heher JA's minority judgment contains extensive obiter observations about the purpose and operation of section 15 of the Matrimonial Property Act, the requirement to join the non-consenting spouse, and the interpretation of section 15(5) and 15(9) in this context.

This case provides important clarification on the interpretation and application of sections 15(2)(h) and 15(6) of the Matrimonial Property Act 88 of 1984. It establishes that section 15(6) operates as a proviso to section 15(2)(h), meaning that a spouse who wishes to rely on the protection of section 15(2)(h) must demonstrate that the full range of that section's operation applies to them, including that they did not execute the suretyship in the ordinary course of their business, trade or profession. The case also clarifies that whether a suretyship was executed in the ordinary course of business is a question of fact. It demonstrates that a director who is actively involved in the core business of a company, particularly where they have a financial stake and the suretyship was given to enable the business to operate, will be considered to have acted in the ordinary course of their business. The case is also significant for its discussion (though not determinative) on the issue of joinder of the non-consenting spouse in suretyship enforcement proceedings.