Councillor D.M Pitso (Mayor of Ramotshere Moiloa Municipality) and Another v Councillor L P Letshufi Speaker of Ramotshere Moiloa Local Municipality and Others (2495/2025) [2025] ZANWHC 148 (11 August 2025)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION, MAFIKENG

CASE NO: M521/2023

Reportable: YES / NO

Circulate to Judges: YES / NO

Circulate to Magistrates: YES / NO

Circulate to Regional Magistrates: YES / NO

In the matter between:

BALETSEMA (PTY) LTD

APPLICANT

AND

PHEK ENGINEERING & SUPPLIERS CC

FIRST RESPONDENT

MOTLHOPESI STEPHEN PHEKOLA

SECOND RESPONDENT

MORWADI CONSTANCE PHEKOLA

THIRD RESPONDENT

CORAM: MALANE AJ

ORDER

1. The application is dismissed with costs.

JUDGMENT

MALANE AJ

Introduction

[1] This is an application for specific performance by the applicant against the respondents.

The parties

[2] The applicant is BALETSEMA [PTY] LTD, an incorporated company with registered address of service at 1[…] J[…] S[…] Avenue, Rosebank, Johannesburg. It has a net asset value or annual turnover exceeding R 1-million.

[3] The first respondent is PHEK ENGINEERING & SUPPLIERS CC. It is a closed corporation with address of registration at 1[…] H[…] Street, Krugersdorp in Gauteng.

[4] The second respondent is MOTLHOPESI STEPEHEN PHEKOLA, he is the sole member of the first respondent. He is a major business man residing at 1[…] M[…] Street, Reagile Location, Koster in the North West Province. This address is also the chosen domicilum citandi et executandi for the second respondent.

[5] The third respondent is MORWADI CONSTANCE PHEKOLA. She is an adult female businessperson who is the spouse to the second respondent and whose domicilum citandi et executandi address is the same as that of the first respondent. The second and third respondents are a husband and wife couple married in community of property.

Factual background

[6] The factual background germane to this dispute is gleaned from the founding affidavit, the answering affidavit as well as the replying affidavit. These are largely common cause and can be summarised as following hereunder.

The loan agreement

[7] The applicant and the first respondent entered in to a loan agreement [LA] with the applicant on 16 January 2023. The applicant was duly represented by one Bokang Thomas Kelepa at the execution of the loan agreement. The first respondent was duly represented by the second respondent who also signed as a surety to the debt that was subject to the LA.

[8] The property known as the Remaining Extent of Portion 1 of the Farm Witrand 457, Registration Division JP [ the farm] as well as 7 motor vehicles [the motor vehicles] of the first respondent would serve as collaterals for the loan.

[9] In terms of the LA the applicant advanced and lent the amount of R 500 000.00 to the first respondent. He loan amount would attract administration fees as well as interest at an unspecified percentage but capped at R 200 000.00. Additionally the loan amount would attract , a daily penalty interest of 20% per and compounded monthly.

[10] The loan would be payable in the following manner:-

10.1 R 100 000.00 payable on or before 17 February 2023;

10.2 R 600 000.00 payable on or before 06 March 2023.

[11] On 06 April 2023 the first respondent signed an acknowledgement of debt [ the AOD]. The first respondent thorough the second respondent acknowledged indebtedness to the applicant for the amount of R 1, 209.600 which was to be paid on or before 31 May 2023. Failure to pay would attract interest of 20% per month on amounts due and until final payment is made.

[12] The farm and the motor vehicles would become security for payment of the debt acknowledged. The price of the farm was pegged at R 12 0000.00 an d said to be not disproportionate to the debt so acknowledged.

Default

[13] The respondents did not pay and as such the applicant’s attorneys made a written demand to the each respondent address through one letter dated 21 June 2021. There was no reply nor an acknowledgment. Another demand was despatched on 06 August 2023. Attached to it was a certificate of balance flowing from clause 2.1 and 2.4 of the AOD. The amount due per the certificate of balance was now R 1 935 360 00.

The proceedings

[14] On 2 October 2023 the Sheriff served the Notice of Motion and Annexures thereto. There are no issues surrounding the service and as such the motion was opposed by all the respondents.

[15] The second respondent has filed an answering affidavit on behalf of all the respondents. The following point in limine are raised:

15.1 That the AOD in question is a credit agreement under the auspices of Section 8[4][f] of the National Credit Act 34 of 2005 [the NCA]. The loan amount exceeding the amount of R 500 000.00 as per the Ministers determination in Section 42[1] of the NCA, the applicant ought to have registered as a credit provider. The applicant not being a registered credit provider, the acknowledgment debt is unlawful when regard is had to section 89 of the NCA.

15.2 In the second instance that the applicant failed to conduct an affordability assessment of the respondents to repay the loan. This as expected in terms of section 81 of the NCA. On the basis of these the application is to be dismissed.

[16] Additional to the above points in limine the respondents raised the defence of the in duplum rule. The respondents aver that the interest amount levied on the debt amount reaching the exact amount of the .loaned amount, interest is to stop running when regard is had to section 103[5] of the NCA.

[17] Lastly that the applicant ought not to have sought an order for specific performance but rather an application for provisional sentence when clause 2.4 of the AOD is construed.

[18] The applicant contents that there was no need to comply with the impugned sections of the NCA because respondent is a juristic person with a turnover and assets exceeding 1 million. Secondly they contend that interest would become levied in mora after the payment of the loaned amount became due.

Is the AOD a credit agreement

[19] First one needs to start from the premise that the applicant does not deny that it is not registered as a credit provider in terms of the NCA. In order to deal with this question it is apposite to recite Section 8[4] of the NCA. It reads as follows:

“8[4][f] an agreement, irrespective of its form but not including an agreement contemplated in subsection [2], constitutes a credit transaction if it is –

[a] …

[b] …

[c] …

[d] …

[e] …

[f] any other agreement, other than a credit facility will create guaranteed, in terms of lease payment of an amount owed by one person to another is deferred, and any charge, fee or interest is payable to the clinic provider in respect of-

[i] the agreement, or

[ii] the amount has been deferred.”

[20] A literal interpretation of the AOD in my view gives the impression that it is a credit transaction. Firstly, payment was deferred to the future date of 31 May 2023. Secondly, clause 2.2 thereof provides as follows:

“interest of 20% per month will be charged on all amounts overdue until date of final payment”.

[21] Given these characteristics, I find that the AOD established a credit agreement between the applicant and the respondents.

[22] In terms of the NCA, a credit agreement is unlawful if, when it was concluded the credit provider was unregistered. The requirement to register as a credit provider is applicable to all credit agreements once the prescribed threshold is reached. This is irrespective of whether the credit provider is involved in the credit industry and irrespective of whether the credit provider involved is in the credit industry and irrespective of whether the credit agreement is once off agreement. [ See De Bruyn N.O v Karsten 2019 [1] Sa 403 [SCA].

[23] In this matter, it is not in dispute that the applicant was not a registered credit provider as contemplated in section 14 [1] of the NCA at the time of the signing of the AOD. If therefore it is found that the NCAA applies to the AOD, the AOD is unlawful and must, in terms of section 89[5][a] of the NCA be treated as void.

In addition to not being a registered credit provider, it is undisputed that the respondent did not comply with the mandatory enforcement provisions contemplated by section 129 and 130 of the NCA before bringing this application.

[24] I find that the above findings are dispositive of the matter and as such the other points in limine need not be dealt with. In the result I make the following order:

W. MALANE

ACTING JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING:

18 OCTOBER 2024

DATE OF JUDGMENT:

13 AUGUST 2025

FOR THE APPLICANT:

ADV J C VILJOEN

INSTRUCTED BY:

MAREE & MAREE ATTORNEYS

FOR THE RESPONDENT:

ADV T M MAKGATHO

INSTRUCTED BY:

GURA TLALETSI & PARTNERS