If you sign a suretyship tied to your broker code or practice, assume it can follow you into the future – and that courts will enforce it strictly. Claims of technical defects, unfairness or “prejudice” will not help unless you can point to a real breach of legal duty and back it up with evidence.
That message was underscored by a Northern Cape High Court judgment in Momentum Group Limited v Maswil Finansiele Adviseurs CC and 6 Others, delivered in Kimberley on 19 December 2025. The ruling highlights the personal risk advisers assume when they sign suretyships in support of their businesses, and how difficult it can be to avoid liability once a broker house collapses.
Momentum chases unpaid commission after liquidation
The dispute arose from the collapse of Maswil Finansiele Adviseurs CC, a broker house that had operated in various forms since the mid-1990s. After Maswil’s commission account slid into persistent debit, Momentum moved to recover R474 858.24 in unpaid commission-related debt, together with interest at 14% a year and legal costs on an attorney-and-client scale.
Momentum initially sued Maswil directly and cited six individuals who had signed separate but identical deeds of suretyship, binding themselves as sureties and co-principal debtors for the broker house’s obligations. When Maswil was liquidated after the case had begun, Momentum abandoned its claim against the broker house itself and focused instead on the individuals who had put their names on the line.
Two of those defendants – Josua Daniël van den Heever and the late Benjamin van den Heever – initially defended the action but later fell out of the case when Momentum withdrew its claims against them, with each side agreeing to pay its own costs. That left four advisers to face judgment: Andries Johannes le Grange (senior), Marthinus Johannes Spangenberg, Monica Johanna le Grange and Andries Johannes le Grange (junior). Any counterclaims they had raised were later abandoned.
Momentum argued that it was entitled to enforce the suretyships despite changes over time in Maswil’s corporate structure and broking agreements, and despite the liquidation of the broker house itself. It also traced its own corporate history, explaining that all rights and obligations under the suretyships had been transferred to it when the long-term insurance business moved from Momentum Life Assurers Limited to Momentum Group Limited in 2000.
At the heart of the case were two questions with wide implications for advisers: had Momentum acted in a way that legally prejudiced the sureties, and did later broking agreements cancel or replace the earlier suretyships? The court’s answers would determine whether the advisers were personally liable for the debt.
Following the paper trail of commission debt
Momentum’s case was built almost entirely on documents and system records, supported by the testimony of its long-serving litigation attorney, Chantel Fordham. She explained how Maswil’s commission account fell into debit, how Momentum tried to stabilise the position, and why the insurer believed the sureties remained on the hook.
Maswil’s relationship with Momentum dated back to August 1996 and continued, in updated contractual forms, until it was terminated in 2011. Although the broking agreements were amended over the years to reflect regulatory and structural changes, Maswil retained the same broker house code and operated within a continuous business relationship.
In May 2009, after Maswil’s account slipped into debit, Momentum advanced R600 000 under a debit loan agreement designed to help the broker house keep trading while repaying its shortfall. The loan cleared the existing debit and was to be repaid over 15 months through deductions from Maswil’s commission earnings – a structure that depended on steady commission flows.
The position deteriorated further after Andries le Grange senior, one of Maswil’s principals, entered into a separate financial planner agreement with Momentum in July 2010, only to terminate it seven months later. Momentum alleged that Le Grange senior then transferred his entire client book to Maswil with Momentum’s consent. The transfer, finalised in April 2011, included commission at risk of more than R492 000, which moved from Le Grange senior’s personal adviser code to Maswil’s broker house account.
Internal records showed the transaction was treated as a “book sell” from an individual financial planner to the broker house. From that point, the commission – and the risk of clawbacks if policies lapsed – sat with Maswil.
Momentum also called evidence on how its commission system works. Certain products attract advance commission, which is later clawed back if policies lapse, as permitted under insurance legislation. Where clawbacks exceed earnings, a debit balance arises. Monthly commission statements reflect all of this: earnings, advances, loan repayments, lapses, VAT and deductions.
Under Maswil’s broking agreement, those statements had to be disputed within 21 days if incorrect. If not, they were deemed accurate. Momentum told the court that no disputes were ever lodged, even as Maswil’s account slid back into debit during 2011. By May 2012, the shortfall stood at nearly R487 000.
Momentum relied on a certificate of balance signed by its head of legal for sales, reflecting an amount of R474 858.24 as at 11 May 2012. The broking agreement and suretyships expressly provided that such a certificate would serve as prima facie proof of the debt unless the sureties could show otherwise.
How the defence tried to escape liability
The defendants did not testify or call any witnesses of their own. Instead, they sought to dismantle Momentum’s case through cross-examination and legal argument.
Their first attack focused on Fordham herself. Defence counsel argued that her evidence should be treated as hearsay because she joined Momentum after many of the key agreements were signed. The court was unconvinced, noting her long involvement with the insurer’s litigation and her access to its central records.
The defendants also challenged the transfer of Le Grange senior’s client book to Maswil, pointing to internal Momentum correspondence that suggested uncertainty about whether all procedural steps had been followed. They relied heavily on clause 9.6 of the Financial Planner Agreement, which regulates how a planner may sell or transfer a book after termination and requires, among other things, Momentum’s consent and acceptance by the receiving broker of all rights and obligations.
In their view, there was no written sale agreement showing that Maswil had formally accepted both the clients and the liabilities. They argued that this failure undermined Momentum’s attempt to shift debt onto the broker house – and, by extension, onto the sureties.
The defendants also contended that the deeds of suretyship themselves were no longer valid. By concluding later broking agreements, they said, the earlier suretyships had been “nullified”. Even if they were still alive, the suretyships could not, in their view, extend to future debts unless they were clearly drafted as continuing covering suretyships.
Finally, the defence argued that Momentum’s conduct had prejudiced the sureties, particularly in the way it handled the book transfer. That prejudice, they said, should release them from liability.
Court: suretyships cover future debts
Judge Mpho Mamosebo rejected those arguments one by one. On the central issue of scope, the court held that the suretyships were not limited to debts already in existence when they were signed.
Contractual interpretation, the judge stressed, is a matter for the court, not witnesses. It requires reading the wording in context, considering the purpose of the agreement and the surrounding circumstances, and preferring a sensible commercial meaning.
The phrase “any amount owing by the debtor as a result of any debit balance”, the court found, was broad and unqualified. Nothing in the wording confined it to a single existing debt or a snapshot in time. A debit balance could reflect accumulated obligations over an extended period.
The court also noted that at least one suretyship had been signed when there was no existing debt at all. Accepting the defendants’ narrow interpretation would mean the document served no purpose – an outcome the judge described as commercially absurd.
South African law, the court reaffirmed, permits suretyships to cover future obligations. A principal debt need not exist when a suretyship is signed, as long as it comes into existence later.
No escape through “prejudice”
The court was equally firm on the prejudice argument. Mere prejudice, Judge Mamosebo held, is not enough to release a surety. The surety must show that the creditor breached a legal duty owed to them and that the breach caused the prejudice.
On the facts, there was no such breach. The evidence showed that both Le Grange senior and junior participated in the transfer process and benefited from commission flows arising from the transferred clients. They could not accept those benefits and later complain about procedural defects.
Crucially, Maswil’s commission account was already in deficit before the transfer. The defendants produced no evidence showing that the transfer materially caused or worsened the debt they faced.
Certificate of balance stands
The court also dismissed the attack on Momentum’s certificate of balance. The agreements expressly provided that a certificate signed by a Momentum manager would constitute prima facie proof of the amount owing. The signatory, as head of legal for sales, plainly fell within that category.
An error relating to the seventh defendant’s capped liability did not invalidate the certificate, the court said. At most, it required adjustment. Once the certificate was produced, the burden shifted to the defendants to show it was wrong – something they failed to do.
Silence speaks volumes
Judge Mamosebo drew an adverse inference from the defendants’ decision not to testify. They were present throughout the trial and were best placed to explain the suretyships, the book transfer and the alleged prejudice. Their silence, in the face of Momentum’s documentary case, weighed heavily against them.
A cautionary outcome for advisers
The court ultimately found Maswil indebted to Momentum for R474 858.24. The remaining defendants were held jointly and severally liable under their suretyships, with Le Grange junior’s exposure capped at R94 584. Interest and punitive costs followed.
For advisers, the judgment is a warning. Suretyships linked to broker codes are not mere formalities. They can – and often do – cover future debts. And once an insurer produces a compliant certificate of balance, advisers who have signed on the dotted line will need more than technical arguments to escape personal liability.
Read the full judgment here.
