Enforcing Contractual Security: Lessons from Nndwammbi N O and Others v Sematra and Others

Introduction 

The High Court has reaffirmed the sanctity of written agreements and the strength of secured creditors' rights in South African law. In a recent judgment, Nndwammbi N O and Others v Sematra and Others (2020-42224) [2025] ZAGPJHC 864 (25 September 2025), the court granted decisive relief to the Sasol Siyakha Enterprise and Supplier Development Trust, allowing it to perfect its security and repossess assets pledged under a Special Notarial Bond following a borrower's default. The decision illustrates the importance of carefully drafted contracts, whole agreement clauses, and the strict approach courts take to attempts to evade clear obligations.  

Background 

On 27 June 2019, the Sasol Siyakha Enterprise and Supplier Development Trust (“the Trust”) advanced a loan of R20 million to Sematra (Pty) Ltd (“Sematra”) under a written Loan Agreement. The loan was intended to support Sematra’s business operations as part of a broader enterprise development initiative.  

To secure repayment, the Trust registered a Special Notarial Bond over Sematra’s movable assets – including vehicles, machinery, and equipment – on 11 September 2020. The company’s directors also bound themselves as sureties and co-principal debtors.

Sematra began defaulting on its monthly instalments in 2020. The Trust, acting in accordance with the Loan Agreement and the bond, approached the High Court to perfect its security – that is, to attach, take possession of, and realise the mortgaged assets to satisfy the debt.

The Respondents' defence 

Sematra and its directors did not dispute the existence of the debt or the Trust’s right to enforce its security. Instead, they raised two primary defences:

Alleged oral condition: They argued that repayment was contingent upon Sasol South Africa Limited (“SSA”) –  a separate company in the Sasol Group – providing Sematra with sufficient work. They claimed an implied or oral agreement to this effect existed.

Joinder application: They sought to compel the Trust to join SSA as a co-respondent, alleging that SSA’s conduct was central to their inability to repay the loan.

The respondents also sought a postponement of the matter, which the court refused.

The Court’s Findings

Written Contracts Prevail Over Oral Assertions

Adams J dismissed the respondents’ defence as “bad in law”. The Loan Agreement included a “Whole Agreement” clause, expressly stating that it represented the entire agreement between the parties and that no external representations or undertakings would be binding unless reduced to writing.

The respondents produced no evidence of any conditional arrangement with SSA  –  no written record, no details, and no corroboration. The court emphasised that such unsupported assertions cannot override the terms of a clear written contract.

Security Enforcement Rights Upheld

The Loan Agreement and Special Notarial Bond granted the Trust the right, upon breach, to declare the full amount immediately due and payable; take possession of the mortgaged assets; and dispose of them to satisfy the debt.

The Trust was also entitled to cede proceeds from Sematra’s contracts with SSA as additional security – a clause the court found significant in undermining the respondents’ argument.

Separate Legal Personality and Joinder

The court reiterated that the Trust is a distinct legal entity from SSA, even though it was established by companies in the Sasol Group. A contractual grievance with SSA did not create a defence against the Trust. The joinder application was accordingly dismissed and the court reaffirmed the principle that a party may only be joined if it has a direct and substantial interest in the subject matter – a threshold the respondents could not meet.

Costs and Final Relief

The court authorised the sheriff to attach and remove the mortgaged assets and declared them specially executable. It further ordered Sematra and its directors to pay the Trust’s costs on a punitive attorney-and-client scale, including counsel’s fees on scale C –  a reflection of the court’s disapproval of their unfounded defences.

Key Takeaways for Creditors and Commercial Lenders

Whole Agreement Clauses are Powerful: They provide strong protection against attempts to introduce oral or implied terms inconsistent with written contracts.

Security Rights Will Be Enforced: Courts will not hesitate to allow creditors to perfect their security when borrowers default, especially under a properly drafted Special Notarial Bond.

Corporate Separateness Matters: Obligations owed to one legal entity cannot be avoided by pointing to alleged arrangements with another, even within the same corporate group.

Frivolous Defences Can Be Costly: Raising unsupported claims or meritless applications may expose debtors to punitive costs orders.

Conclusion

This judgment is a robust affirmation of creditor rights under South African contract law. It demonstrates that where parties have reduced their agreement to writing –  and especially where the contract is fortified with security instruments like a Special Notarial Bond –  the courts will enforce those terms strictly. Attempts to evade liability by relying on unwritten agreements, group structures, or collateral disputes will not succeed.