THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 1334/2018
In the matter between:
LIBERTY GROUP LIMITED

APPELLANT

And

WARREN PATRICK BROUGHTON ILLMAN

RESPONDENT

Neutral citation:
Liberty Group Limited v Illman (1334/2018) [2020] ZASCA 38
(16 April 2020)
Coram:
SWAIN, MAKGOKA, MOKGOHLOA AND NICHOLLS JJA AND
KOEN AJA
Heard:

13 March 2020
Delivered:

This judgment is handed was down electronically by circulation to
the parties’ representatives by email and by publication in the Supreme Court of
Appeal website and release to SAFLII. The time and date for hand down is deemed to
be 09h45 on the 16th day of April 2020.
Summary:
Suretyship – a surety who binds himself as co-principal debtor does not
become a co-debtor with another surety and co-principal or with the principal debtor.
Prescription – service of summons on surety and co-principal debtor – prescription in
favour of another surety and co-principal debtor not interrupted thereby.

___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Rabie J sitting as court
of first instance).
The appeal is dismissed with costs.
___________________________________________________________________
JUDGMENT
___________________________________________________________________

Makgoka JA (Swain, Mokgohloa and Nicholls JJA and Koen AJA concurring)
[1] The anterior issue in this appeal is whether sureties who also bind themselves
as co-principal debtors become co-debtors with the principal debtor, and with each
other. Ancillary thereto, is whether the service of a summons on any of the sureties
interrupts the running of prescription in favour of the others. The court a quo, the
Gauteng Division of the High Court, Pretoria, answered the question in the negative.
It upheld the respondent’s special plea of prescription and dismissed the appellant’s
claim with costs. Aggrieved with that order, the appellant appeals with the leave of the
court a quo.
[2] The factual background against which the issue arises is briefly this.
On 10 March 2003 Charter Life Insurance Company Ltd (which later changed its name
to Liberty Active Ltd (Liberty)) concluded a written broking agreement with ECE
Financial Holdings (ECE)1 in terms of which ECE was to act as an independent
intermediary for its financial products. As compensation for its services, ECE would be
paid commission on premiums received by Liberty during the currency of the
agreement on contracts issued pursuant to proposals submitted by ECE.

1 ECE was placed in final deregistration on 24 February 2011.

[3] On various dates between March 2003 and February 2005, eight individuals,
including the respondent, each signed separate but identical deeds of suretyship in
terms of which they bound themselves as sureties and co-principal debtors in solidum
with ECE for the payment to Liberty of all monies which ECE could in future owe to
Liberty, ‘from whatsoever cause arising’.
[4] During March 2003 and March 2011, and before receiving any premiums in
respect of contracts issued by the appellant on proposals submitted by ECE to it,
Liberty advanced commissions to ECE. However, during the same period, up to
August 2011, the contracts in respect of which commissions were advanced to ECE,
either lapsed, were cancelled or terminated, because of non-payment of premiums to
Liberty.
[5] As a result, the commissions which Liberty had paid in advance, became
repayable to it by ECE in terms of the agreement, and by the sureties in terms of the
deeds of suretyship. The total amount of the commissions was R1 029 963.50. Liberty
later ceded to the appellant all its rights to claims arising from the claw-back
commissions in respect of the broking agreement.
[6] On 22 September 2011, the appellant, as cessionary, issued summons against
all the sureties and co-principal debtors for the re-payment of the amount
of R1 029 963.50 referred to above. It alleged in its particulars of claim, among others,
that the agreement between the parties was terminated on 14 March 2011.
On 29 September 2011 the summons was served on one of the sureties, Mr Russel
John September (Mr September), who was the seventh defendant. He failed to deliver
a notice of intention to defend. As a result, the appellant obtained default judgment
against him on 27 January 2012.
[7] With regard to the respondent, who was the sixth defendant, the summons
was served on him on 31 March 2016, approximately five years after it was issued.
The respondent raised a special plea of prescription to the appellant’s claim.
He asserted that to the extent that the appellant’s claim against him was based on the
alleged termination of the agreement on 14 March 2011, such claim became

prescribed after three years of that date, in terms of s 11 of the Prescription Act 68
of 1969.
[8] The appellant delivered a replication to the respondent’s plea of prescription,
the essence of which was that: as the appellant and Mr September had bound
themselves to the appellant as sureties and co-principal debtors in solidum with ECE,
they became ‘co-debtors.’  The claim against ECE and the sureties became due on
14 March 2011. Service of the summons on Mr September within the prescription
period, interrupted the running of prescription in favour of ECE and all co-debtors,
including the respondent. Accordingly, it was pleaded, the claim against the
respondent had not prescribed.
[9] In order to resolve this issue three decisions of this court must be considered,
namely Kilroe-Daley v Barclays National Bank [1984] 2 All SA 551; 1984 (4) SA 609
(A) and Neon and Cold Cathode Illuminations (Pty) v Ephron [1978] 2 All SA 1; 1978
(1) SA 463 (A) and Jans v Nedcor Bank Ltd [2003] 2 All SA 11; 2003 (6) 646 (SCA).
[10] It is convenient to commence with Jans. There, the issue was whether the
interruption in the running of prescription in favour of the principal debtor, interrupted
the running of prescription, in favour of a surety. The court considered two opposing
views on the effect of a surety binding himself as a co-principal debtor. The one view
was that the effect thereof was that such a surety would be jointly and severally liable
with the principal debtor and prescription would begin to run in favour of both at the
same time. He would not be liable to the creditor in any capacity other than that of
a surety, who had renounced the benefits ordinarily available to him against a creditor.
The opposing view stressed that the surety’s liability was accessory to that of the
principal debtor, despite that it was based on a different contract. The surety’s
obligation is merely to guarantee performance by the principal debtor. Given
a suretyship’s accessorial nature, the liability of a surety is tied to that of the principal
debtor. If the claim against the principal debtor became prescribed or ceased to exist,
the claim against the surety likewise became prescribed or otherwise ceased to exist.

[11] After an extensive review of the authorities, Scott JA pointed out that there were
significant differences between the relationship existing between the principal debtor
and surety on the one hand, and that between co-debtors, in solidum on the other.
He accordingly concluded that an interruption or delay in the running of prescription in
favour of the principal debtor, interrupted or delayed the running of prescription in
favour of the surety. As between co-debtors, the common law allowed the judicial
interruption of prescription of a co-debtor by service on another co-debtor.
[12] In this regard, it is significant that the appellant in its replication, referred to the
respondent and other sureties as ‘co-debtors’. This is at the heart of the appellant’s
case. The sum total of the appellant’s case is that the sureties, by binding themselves
also as ‘co-principal debtors in solidum’ with ECE, the subsidiary nature of their
obligations lapsed. Their liability became equal to that of the principal debtor, and they
in fact, became co-debtors.
[13] In this court, counsel for the appellant submitted that the effect of a renunciation
of the benefit of the legal exception of excussion is that the surety’s liability is no longer
subsidiary to the primary liability of the principal debtor. The addition of the words
‘co-principal debtor in solidum’ signaled an intention that the liability shall be of the
same scope and nature as that of the principal debtor. This made the principal debtor
and the surety, co-debtors. Thus, service of summons on any of them, Mr September
in this case, interrupted prescription running in favour of the rest.
[14] Counsel for the appellant was fully cognisant that this submission was contrary
to the jurisprudence of this court in the decisions of Kilroe-Daley and Neon.
In Kilroe-Daley, the accessorial nature of a suretyship agreement to the main contract
was emphasised, despite it being a separate contract from that of the principal debtor
and his creditor. The addition of the words ‘co-principal debtor’ did not transform the
contract into any contract other than one of suretyship. Consequently, it was held that
if the principal debt became prescribed the surety’s debt also became prescribed and
ceased to exist.  In Neon it was held that the sole consequence (albeit an important
one) of a surety binding himself as a co-principal debtor is that, as regards the creditor,
he renounces the benefits such as excussion and division available to him, and he

becomes liable with the principal debtor jointly and severally. It did not make him a
co-debtor.
[15] The appellant submitted that Kilroe-Daley and Neon, to the extent that they
limited the effect of the phrase ‘and co-principal debtor’ to only a tacit renunciation of
the legal exceptions, had been wrongly decided. To that end, reliance was placed on
the following dictum by Wessels JP in Union Government v Van der Merwe 1921 TPD
318 at 322:
‘The present case is however stronger for the surety has signed as surety and co-principal
debtor. We must give some meaning to the words “co-principal debtor”. That the addition of
these words operate as a renunciation of the benefits of the surety is clear, but they have
a still greater force. The addition of these words shows that the surety intends that his
obligation shall be co-equal in extent with that of the principal debtor: or otherwise expressed,
that his obligation shall be of the same scope and nature as that of the principal debtor.’
[16] The appellant submitted, in reliance upon an article by Prof Sonnekus,2 that this
passage correctly reflects the effect of inserting the words ‘co-principal debtor’ in
suretyship agreements. Prof Sonnekus in reliance upon this decision, expressed a
view that a surety who binds himself as a co-principal debtor becomes a co-debtor
and the suretyship loses its accessory nature. The obligations of the principal debtor
and the surety are then one and the same i.e. to pay the debt of the principal debtor.
The words ‘co-principal debtor’ do not only operate as a renunciation of the benefits
of the surety, but have a ‘still greater force’, namely that these words show that the
surety intended that his obligation shall be co-equal in extent with that of the principal
debtor; or otherwise expressed, that his obligation shall be of the same scope and
nature as that of the principal debtor. The appellant therefore submitted that this court
ignored this phrase in Kilroe-Daley and Neon, and the cases which followed these
decisions. This phrase, so was the submission, should have been given a textual
interpretation. This criticism has merely to be stated, to be rejected. In all of the cases

2 J C Sonnekus ‘Borg en Tegelyk Medehoofskuldenaar is ‘n contradictio in terminis en onversoenbaar.’
TSAR (2) 2018 at 256.

sufficient attention was devoted to the phrase, and a proper contextual meaning
attributed to it.
[17] The flaw in the criticism of the decisions of this court, is the conflation of two
distinct concepts: co-debtors and co-principal debtors. As explained by the authors of
Caney’s Law of Suretyship,3 the undertaking of the surety is accessory to the main
contract. It is an undertaking that the obligation of the principal debtor will be
discharged, and if not, that the creditor will be indemnified.
[18] What is more, the dictum in Union Government van der Merwe was explained
in Neon at 472-473 where Trollip JA said that he did not think that Wessels JP, when
saying that the surety’s obligation ‘shall be of the same scope and nature as that of
the principal debtor’, meant to convey that by signing as co-principal debtor, the surety
became a party to the main contract. Earlier, at 471C-472E it was pointed out that the
correct legal position was as follows: although the surety binds himself as co-principal
debtor, that does not render him liable to the creditor in any capacity other than that of
a surety who has renounced the benefits ordinarily available to a surety against the
creditor. He does not become a party to the contract between the creditor and the
principal debtor.
[19] Union Government is therefore no authority for the proposition that by binding
himself as a co-principal debtor, the nature and ambit of the obligation of a surety
mutates from an accessory undertaking that the obligation of the principal debtor will
be discharged, and if not, that the creditor will be indemnified, to one where the surety
assumes the obligation to discharge the principal debtor’s obligation.
[20] It only remains to reiterate the position in our law. A surety and co-principal
debtor does not undertake a separate independent liability as a principal debtor; the
addition of the words ‘co-principal debtor’ does not transform his contract into any
contract other than one of suretyship. The surety does not become a co-debtor with
the principal debtor, nor does he become a co-debtor with any of the co-sureties and

3 C F Forsyth and J T Pretorius Caney’s Law of Suretyship 5 ed (2002) at 26-29.

co-principal debtors, unless they have agreed to that effect. The jurisprudence of this
court in Kilroe-Daley and Neon accordingly correctly reflects our law on this topic.
[21] There was another string to the appellant’s bow, based on Justinian’s decree
formulated in Codex 53 C8.39(40).4(5) which deals with the interruption of prescription
where there are several co-debtors. Its effect is that if a creditor, through the service
of a process, claimed payment from one co-debtor who bound himself jointly and
severally with others, the remaining co-debtors could not rely upon extinction of the
debt by prescription. The principle was received into Roman-Dutch law. Voet extended
this to sureties by adopting the view that interruption of prescription in respect of a
principal debtor served to interrupt prescription in respect of a surety.
[22] The appellant urged us to apply this principle to the converse situation. In other
words, we should decide that the interruption of prescription in respect of a surety
serves to interrupt prescription in respect of a principal debtor. Once so decided, it was
said, the further logical extension of the principle would be that interruption of
prescription in favour of a surety would also interrupt prescription in favour of
a co-surety. The result would therefore be that service on Mr September interrupted
prescription in favour of the respondent.
[23] The court a quo dealt with this submission as follows:
‘I do not agree with the aforesaid submissions. Neither in the Roman law nor in the Roman
Dutch law had it ever been suggested that the converse should apply - in other words that
interruption of prescription against the surety should constitute interruption of prescription
against the principal debtor. The Roman Dutch writers, who wrote extensively on the topic and
debated the pros and cons thereof, were ad idem that the converse should not apply. It is
consequently simply not part of our common law.
It was submitted on behalf of the plaintiff that it is not necessary to amend the common law in
order to find for the plaintiff but that it merely requires a consistent application of a principle
already accepted by the common law. I do not agree. As mentioned, our common law writers
have considered the extension of Justinian's decree and had decided that it should be done
to the extent mentioned and no further. To find that interruption of prescription against one
surety constitutes not only interruption of prescription against the principal debtor but even

against the other sureties, constitutes a substantial deviation of the common law principles on
the topic.’
I cannot fault this reasoning.

[24] In all the circumstances the appeal has to fail. The following order is made:
The appeal is dismissed with costs.

____________________
T M Makgoka
Judge of Appeal

APPEARANCES

For Appellant:
JF Steyn

Instructed by:

Gerings Attorneys, Johannesburg

Rossouws Attorneys, Bloemfontein

For Respondent:
HP Van Nieuwenhuizen

Instructed by:

Wikus du Toit Attorneys, Mbombela
Couzyn Hertzog & Horak Attorneys, Pretoria

Symington de Kok Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY: JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM
The Registrar, Supreme Court of Appeal

DATE
16 April 2020

STATUS
Immediate

Please note that the media summary is for the benefit of the media and does not form part of the
judgment of the Supreme Court of Appeal.

Liberty Group Limited v Illman (1334/2018) [2020] ZASCA 38 (16 April 2020)
Today, the Supreme Court of Appeal (SCA) dismissed an appeal brought by the
appellant, Liberty Life Limited, against a judgment of the Gauteng Cape Division of the
High Court, Pretoria. The anterior issue in the appeal was whether a surety who also
bind him or herself as co-principal debtor becomes a co-debtor with the principal
debtor, and with other sureties. Ancillary thereto, was whether the service of a
summons on any of the sureties interrupts the running of prescription in favour of the
others. The appellant was a cessionary of rights from an agreement between Charter
Life Insurance Company Ltd and an entity called ECE, which was subsequently de-
registered. The respondent, Mr Warren Illman and seven others had signed as
sureties and co-principal debtors for the liabilities of ECE.
On 22 September 2011, the appellant, as cessionary, issued summons against the
respondent and other sureties for payment of an amount of R1 029 963.50 being
monies owed by ECE to Charter Life.  It was alleged that the agreement between the

parties was terminated on 14 March 2011.  On 29 September 2011 the summons was
served on one of the sureties, Mr Russel John September (Mr September), who was
the seventh defendant. He failed to deliver a notice of intention to defend and default
judgment was granted against him on 27 January 2012. Summons was served on the
respondent approximately five years later, on 31 March 2016. The respondent raised
a special plea of prescription to the appellant’s claim as summons was served was
served three years after cancellation of the agreement on 14 March 2011.
The appellant delivered a replication to the respondent’s plea of prescription, the
essence of which was that: as the appellant and Mr September had bound themselves
to the appellant as sureties and co-principal debtors in solidum with ECE, they became
‘co-debtors.’  As service of the summons on Mr September was within the prescription
period, the running of prescription in favour the respondent and all other sureties was
interrupted. Accordingly, it was pleaded, the claim against the respondent had not
prescribed. The high court upheld the respondent’s special plea of prescription,
holding that by signing as sureties and co-principal debtors with ECE, they did not
become co-debtors and service on Mr September did not interrupt prescription running
in favour of the respondent.
On appeal to the Supreme Court of Appeal, the appellant persisted with its argument
that the respondent and Mr September were co-debtors, and that service of summons
on Mr September served to interrupt the running of prescription in favour of the
respondent. The appellant, however, recognised that its argument was contrary to the
decisions of Kilroe-Daley v Barclays National Bank [1984] 2 All SA 551; 1984 (4) SA
609 (A) and Neon and Cold Cathode Illuminations (Pty) v Ephron [1978] 2 All SA 1;
1978 (1) SA 463 (A). In Kilroe-Daley, it was held that the addition of the words
‘co-principal debtor’ did not transform the contract into any contract other than one of
suretyship. Consequently, if the principal debt became prescribed the surety’s debt
also became prescribed and ceased to exist. In Neon it was held that the sole
consequence of a surety binding himself as a co-principal debtor is that, as regards
the creditor, he renounces the benefits such as excussion and division available to
him, and he becomes liable with the principal debtor jointly and severally. It did not
make him a co-debtor. It was submitted on behalf of the appellant that to the extent

the two decisions concluded as summarised above, they were incorrectly decided and
should be reversed.
Accordingly, the Supreme Court of Appeal rejected the appellant’s argument and
re-affirmed the correctness of its decisions in Kilroe-Daley and Neon and restated the
law as follows: A surety and co-principal debtor does not undertake a separate
independent liability as a principal debtor; the addition of the words ‘co-principal
debtor’ does not transform his contract into any contract other than one of suretyship.
The surety does not become a co-debtor with the principal debtor, nor does he become
a co-debtor with any of the co-sureties and co-principal debtors, unless they have
agreed to that effect.
Another basis of the appellant’s case was Justinian’s constitution. The effect of the
constitution is that if a creditor, through the service of a process, claimed payment
from one co-debtor who bound himself jointly and severally with others, the remaining
co-debtors could not rely upon extinction of the debt by prescription. The principle was
received into Roman-Dutch law. Voet extended this to sureties by adopting the view
that interruption of prescription in respect of a principal debtor served to interrupt
prescription in respect of a surety. The appellant urged the court to apply this principle
to the converse situation. In other words, to concluded that the interruption of
prescription in respect of a surety serves to interrupt prescription in respect of
a principal debtor. Once so decided, the further logical extension of the principle would
be that interruption of prescription in favour of a surety would also interrupt prescription
in favour of a co-surety. The result would therefore be that service on Mr September
interrupted prescription in favour of the respondent. The Supreme Court of Appeal
declined the invitation to further extend the Justinian constitution on the basis that this
would constitutes a substantial deviation of the common law principles on the law of
suretyship, and there were no cogent reasons to do so.
In the circumstances, the Court (per Makgoka JA) with Swain, Mokgohloa and Nicholls
JJA and Koen AJA concurring), dismissed the appeal with costs.

END