Jumalu Fencing (Pty) Ltd v Boyise (956/2021) [2024] ZANWHC 50 (29 February 2024)

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 - MAHIKENG

CASE NO.: 956/2021

Reportable: YES

/ NO

Circulate to Judges:

YES

/ NO

Circulate to Magistrates:

YES / NO

Circulate to Regional Magistrates: YES / NO

In the matter between:

JUMALU FENCING (PTY) LTD

(Registration number: 2010/024121/07) PLAINTIFF

and

LETSHOLO INNETIOUS BOYISE

DEFENDANT

Coram:

Petersen J

Date heard:

02 February 2024

Date handed down: 29 February 2024

Delivered: This judgment was handed down electronically by circulation to the parties’ representatives via e-mail. The date and time for hand-down is deemed to be 14h00pm on 29 February 2024.

ORDER

In the result, summary judgment is granted in favour of the plaintiff against the defendant for:

(i) Payment of the sum of R445 934.20.

(ii) Interest on the sum of R445 934.20 at a rate of 7% per annum from 4 May 2018 to date of final payment.

(iii) Costs of suit on a scale as between attorney and client.

JUDGMENT

PETERSEN J

Introduction

[1] This is an opposed application for summary judgment in terms of Rule 32 of the Uniform Rules of Court. The plaintiff initially sought an order for payment of an amount of R715 934.20 (together with interest and costs) from the defendant, an amount determined following several payments made by the defendant in satisfaction of the debt.

[2] In terms of Rule 32 of the Uniform Rules of the High Court:

“32 Summary judgment

(1) The plaintiff may, after the defendant has delivered a plea, apply to court for summary judgment on each of such claims in the summons as is only—

…;

(b) for a liquidated amount in money;

…

together with any claim for interest and costs.

(2)(a) Within 15 days after the date of delivery of the plea, the plaintiff shall deliver a notice of application for summary judgment,

together with an affidavit made by the plaintiff or by any other person who can swear positively to the facts.

(b) The plaintiff shall, in the affidavit referred to in subrule (2)(a), verify the cause of action and the amount, if any, claimed, and identify any point of law relied upon and the facts upon which the plaintiff’s claim is based, and explain briefly why the defence as pleaded does not raise any issue for trial.

(3) The defendant may—

(b) satisfy the court by affidavit (which shall be delivered five days before the day on which the application is to be heard), or with

the leave of the court by oral evidence of such defendant or of any other person who can swear positively to the fact that the defendant has a bona fide defence to the action; such affidavit or evidence shall disclose fully the nature and grounds of the defence and the material facts relied upon therefor.

(4) No evidence may be adduced by the plaintiff otherwise than by the affidavit referred to in subrule (2), nor may either party cross-examine any person who gives evidence orally or on affidavit: Provided that the court may put to any person who gives oral evidence such questions as it considers may elucidate the

matter.

(5) If the defendant does not find security or satisfy the court as provided in paragraph (b) of subrule (3), the court may enter summary judgment for the plaintiff…”

Background

[3] The plaintiff (‘Jumalu’) duly represented by an authorized representative rendered services by supplying fencing material to a close corporation Tshwaraganelwe Construction CC. The defendant was the sole member of Tshwaraganelwe Construction CC. It is not in dispute that such services were rendered by Jumalu to Tshwaraganelwe Construction CC. Tshwaraganelwe Construction CC failed to make payment of an amount of R 1 195 394.20 to Jumalu. Jumalu consequently obtained a final liquidation order against Tshwaraganelwe Construction CC on 13 December 2019. The reasons for the order of 13 December 2019 were handed down by Nobanda AJ on 21 February 2020. Leave to appeal the judgment was dismissed and no further steps have been taken in the prosecution of special leave to the Supreme Court of Appeal. The findings by Nobanda AJ with reference to the judgment by myself in granting the provisional liquidation order on 14 November 2019, therefore remain. The credibility findings against the defendant in the judgments as aforesaid by implication remain unchallenged.

[4] It is apposite to quote from the judgment of 14 November 2019 and the reasons in the judgment of 21 February 2020, to provide context to the present matter. The following said in the judgment of 14 November 2019, regarding the case of Tshwaraganelwe Construction CC (in liquidation):

“[22] The sole member of the respondent, Mr Letsholo Ignetious Boyise (“Mr Boyise”) in his opposing affidavit, maintains that the application is aimed at forcing the respondent to make payment for a debt incurred by Mr Khoza who is alleged to have fraudulently obtained a credit facility from the applicant. Mr Boyise maintains that the applicant is abusing the liquidation process to achieve what is described as its nefarious plans to avoid the cumbersome process of action proceedings.

[23] Mr Boyise’s evidence is that Mr Khoza fraudulently misrepresented that he was duly authorized to act on behalf of the respondent when applying for the credit facility from the applicant in May 2018. In particular Mr Boyise explains that he was approached by Mr Khoza in October 2017, informing him that he was interested in bidding for a tender advertised by the Department of Social Development for the supply and installation of a fence at two early learning centres in Schweizer-Reneke and Kgomotso Village, Taung. Mr Khoza explained that his company had a low CIDB grade and requested the use of the respondent which had a higher grade, to bid for the tender. As Mr Khoza was an old childhood friend from Ganyesa and because of a financial benefit he would receive, Mr Boyise agreed to the request. The request of Mr Khoza was acceded to on a number of conditions, including, Mr Khoza paying for the costs of the project, inclusive of fencing material, labourers and all costs related to the project; that Mr Khoza would be responsible for the management of the project from start to finish; all payments due from the Department of Social Development would be paid into the bank account of the respondent of which Mr Boyise is the sole signatory; and retention of an amount of R100 000.00 as consideration for assisting Mr Khoza once the project was completed.

[24] Mr Khoza’s bid for the project was successful to the tune of R1 083 000.00 (One million and Eighty-Three

Thousand Rand) and work was commenced on the project by establishing the site and employing labourers. Mr Khoza indicated to Mr Boyise that the cost of fencing material was too high and his cash flow was bad and proposed that the respondent

apply to Cochrane Fencing to provide the respondent with a credit facility to purchase the required fencing material on credit. Mr Boyise agreed with the proposal as all payment due by the Department of Social Development would be paid into the respondent’s bank account which he controlled. If he refused to agree with the proposal he would have been prejudiced and the respondent would have suffered reputational damage. He applied for the credit facility with Cochrane using his identity document and company documents of the respondent and was granted a credit facility of R690 000.00. Cochrane performed in terms of the credit agreement and delivered the fencing material, with the result that the project was completed without any impediments in March 2018.

[25] The respondent submitted an invoice to The Department of Social Development for an amount of R1 083 000.00

(One Million and Eighty Three Thousand Rand) which was duly paid in May 2018. Mr Boyise and Mr Khoza agreed to distribution of the amount as follows: R690 00.00 (Six Hundred and Ninety Thousand Rand) as due to Cochrane; R230 000.00 (Two Hundred and Thirty Thousand Rand) due to Mr Khoza; R100 000.00 (One Hundred Thousand Rand) due to himself in lieu of consideration; and R63 000.00 (Sixty-Three Thousand Rand) due to Mr Boyise for unsecured loans advanced to Mr Khoza.

[26] On 15 October 2018 Mr Boyise was shocked to receive a letter of demand from the applicant demanding payment of an amount of R1 150 000.00 (One Million One Hundred and Fifty Thousand Rand) for fencing material purportedly supplied to the respondent. He responded by way of letter to the applicant denying any indebtedness to the applicant as he had not given Mr Khoza any authority to apply for a credit facility from the applicant on behalf of the respondent. He further informed the applicant that he would be reporting the matter to the South African Police Service to investigate a charge of Fraud against Mr Khoza. Mr Boyise maintains that no goods were received from the applicant by the respondent and that the applicant is as much a victim of fraud as is the respondent. Mr Boyise further alleges that all documents signed by Mr Khoza purporting to represent the respondent are forged and invites this court to compare his signature of the answering affidavit against those on documents said to have been signed by himself as presented by Mr Khoza. Mr Boyise further maintains that LM Pretorius Attorneys were not acting on instruction of the respondent.

[27] Mr Boyise denies that the respondent is unable to pay its debts and ought to be liquidated. He in fact denies any indebtedness to the applicant.”

[36] The respondent’s case is premised predominantly on allegations of fraud, forgery and lack of authority on the part of Mr Khoza in respect of contracting with the applicant without the knowledge of the

respondent.

[37] In elaborating on these allegations, Mr Boyisa indicates that he has

approached the South African Police Service to investigate charges of Fraud against Mr Khoza. Mr Boyisa, however, omits to provide details of any case number with details of an investigating officer or progress in the investigation. Mr Boyisa further invites this Court on the papers to embark on a forensic analysis of his signature on the answering affidavit against his signature purportedly appearing on documents related to the claim giving rise to this application. The court is not at liberty to do so as it is not possessed of the requisite expertise. On the allegation of the respondent, it was incumbent on it to secure an expert report.

[38] The respondent is required to prove that the debt alleged by the applicant is disputed on bona fide and reasonable grounds and not merely that it is not indebted to the applicant. The respondent on the papers, save to deny that it is indebted to the applicant casts aspersions on the applicant by making a bald statement bordering on being vexatious. It is said the applicant has launched the application for its own nefarious purposes. The respondent fails to use the opportunity to set out facts which raises a genuine dispute of fact, where such facts are peculiarly within its knowledge. The respondent’s evidence is essentially a bare denial. On Mr Boyisa’s own evidence he allowed the respondent to be utilized as a front to securing the bid from the Department of Social Development, with Mr Khoza authorised by him to bind the respondent, in lieu of Mr Boyisa receiving a consideration in return. Mr Boyisa further makes a general statement that the respondent is able to pay its debts without providing any proof thereof, which would raise a genuine dispute of fact. Mr Boyisa’s denial of contracting with the applicant, without providing at the very least business records for the period in question, amounts to a bare unsubstantiated denial. The Cochrane Fencing credit facility which is alluded and related documents have not been presented to Court.”

[5] In the reasons provided on 21 February 2020, the following was said:

“[8] I agree with the findings of Petersen AJ more particularly relating to Mr Boyise, in his own version, authorising Mr Khoza to utilize the respondent to fraudulently secure a bid with the Department of Social Development.

The Applicant alleged that the respondent, represented by Mr Khoza, obtained supplies on credit from the Applicant in respect of a bid from the Department of Social Services.

[9] Although Mr Boyise denied authorising Mr Khoza to obtain supplies on credit from the Applicant and alleged he had opened a fraud case against Mr Khoza, he failed to provide proof even after Petersen AJ’s judgment, on the return date. In addition, the respondent still failed to supply documents relating to Cochraine Fencing’s credit facility the respondent alleged it utilised to secure goods and supplies for the Department of Social Development’s bid. Neither did the respondent submit any business records for that period to support its allegations that it was solvent and merely refused to make payment to the Applicant because it disputed the debt.

[10] In the light thereof, I aligned myself with Petersen AJ’s judgment confirming that the respondent had failed to raise a real, genuine or bona fide dispute of facts showing on a balance of probabilities that it was not indebted to the Applicant. Accordingly, I found that the respondent was unable to pay its debts as contemplated in section 345(1)(a) and (c) of the old Act.”

[6] The plaintiff in the formulation of its particulars of claim, alleges as follows at paragraph 6:

“6. During the course of the liquidation proceedings, the Defendant admitted to the following

alternatively the following transpired from the answering affidavit deposed to by the Defendant:

6.1 The Defendant would allow Tshwaraganelwe Construction CC to be utilized for unlawful and/or illegal tender bidding and awarding.

6.2 The Defendant would receive financial reward or kickback from

the unlawful and/or illegal tender.

6.3 The Defendant alleged that he did not sign documentation on behalf of Tshwaraganelwe Construction CC in the furtherance of its dealings with the Plaintiff despite knowing of the unlawful tender alternatively the Defendant allowed third parties to use Tshwaraganelwe Construction CC and to sign documentation on his behalf and/or to use his details as member to induce the Plaintiff to contract with Tshwaraganelwe Construction CC for the purpose of supplying fencing to Tshwaraganelwe Construction CC.

6.4 The Defendant allowed Tshwaraganelwe Construction CC to be utilized by third parties for the purposes of obtaining tenders and inducing the Plaintiff to render services to Tshwaraganelwe Construction CC.

6.5 After liquidation of Tshwaraganelwe Construction CC, the Defendant continued to utilize the bank account of Tshwaraganelwe Construction CC for his own personal gain alternatively continued to operate Tshwaraganelwe Construction CC as a going concern to the detriment of the concursus creditorum.

6.6 The Defendant has failed and/or refused to cooperate with the duly appointed liquidator by failing and/or refusing to provide all financial documentation relating to the business of Tshwaraganelwe Construction CC.

6.7 A copy of the Defendant’s Affidavit is annexed hereto as annexure “POC 2”.

7. At all material times hereto, the Defendant was the sole member of Tshwaraganelwe Construction CC.

8. The Defendant, as the member of Tshwaranelwe Construction CC was knowingly a party to the unlawful conduct in paragraph 6 supra, alternatively ought to have been aware of the unlawful conduct in paragraph 6 supra, in allowing Tshwaraganelwe Construction CC to be used to unlawfully apply for tenders and/or to be used to obtain goods and services from the Plaintiff and was complicit and a payment agreement between the parties.

9. Such conduct of the Defendant constitutes a breach of his fiduciary duties as member in acting recklessly and/or negligently in conducting the business of Tshwaraganelwe Construction CC at the time when services and goods were meant to have been rendered in terms of the agreement pleaded supra and which were not so rendered as agreed.”

[7] The amount claimed in the summons has reduced after summons was issued on 11 May 2021. On 19 August 2021, the parties entered into an agreement whereby the defendant acknowledged his indebtedness to the plaintiff, when an acknowledgment of debt (‘AOD’) was concluded. The terms of the AOD which are relevant to the present application were recorded as follows:

“ACKNOWLEDGMENT OF DEBT

___________________________________________

LETSHOLO IGNETIOUS BOYISE

(Identity Number: 9[...])

(Email: ______________________)

(hereinafter referred to as the “Debtor”)

Residing at Ganyesa______________ at which

Address the Debtor selects as his domicilium citandi at executandi.

The Debtor hereby declares and acknowledges that he is lawfully and truly indebted to and bound unto JUMALU FENCING (PTY) LTD (Registration

Number: 2010/024121/07) or as the case may be, its order, heirs, executors or successors in title (hereinafter referred to as the

“Creditor”) in the amount of R1 24 434.20 (ONE MILLION TWO HUNDRED AND FORTY-SEVEN THOUSAND FOUR HUNDRED AND THIRTY-FOUR RAND AND TWENTY CENTS) (hereinafter referred to as the “Capital Amount”) which has been reduced for settlement

purposes to the amount of R800 000.00 (EIGHT HUNDRED THOOUSAND RAND) (hereinafter referred to as the “Settlement Amount”),

arising from and being for debts owed to the Creditor for goods sold and delivered by the Creditor.

WHEREFORE IT IS AGREED AS FOLLOWS:

1. The Debtor is indebted to the Creditor for the Capital Amount in the amount of R1 247 434.20 (ONE MILLION TWO HUNDRED AND FORTY-SEVEN THOUSAND FOUR HUNDRED AND THIRTY-FOUR RAND AND TWENTY CENTS) which has been reduced for settlement purposes to the amount of R800 000.00 (EIGHT HUNDRED THOOUSAND RAND).

2. The Debtor hereby promises and undertakes to pay to the Creditor the Settlement Amount by way of installments in the following amount and on the following dates:”

[8] The defendant failed to make payments strictly in accordance with the agreement. Several sporadic payments were made which at the date of hearing of this application reduced the capital amount relevant to the underlying cause of action, to R445 934.20. This is the amount which the plaintiff now seeks in summary judgment.

The defences

[9] The defendant raises several defences in resisting summary judgment. The non-joinder of Mr Calvin Khoza, alluded to in the liquidation judgments is without merit based on the findings in the liquidation judgments. The non-joinder of Mr Khoza would in fact constitute a misjoinder. The defendant further signed an acknowledgement of debt admitting his indebtedness to the plaintiff for the amount due and payable to the plaintiff and made payments pursuant to the AOD.

[10] The defendant takes issue with the plaintiff on the AOD, contending that it did not form part of the cause of action on which summary judgment is now sought. It follows logically from the litigation history that there would be no reference to the AOD in the particulars of claim, since the AOD was concluded after summons was issued. The arguments on the AOD are also without merit.

[11] The facta probanda in the cause of action in the particulars of claim stands separate from the AOD. The defences raised relevant to the particulars of claim raise no bona fide defence, indicative of a triable issue. The AOD and payments made pursuant thereto which are common cause, has in fact reduced the indebtedness of the defendant exponentially, so much so that the plaintiff rightfully cannot move for summary judgment for the amount claimed in its particulars of claim. In accordance with the terms of the AOD, the defendant consented to judgment in terms of section 58 of the Magistrates Court Act 32 of 1944 in the event of his failure to make any payment in terms of the AOD.

[12] In the particulars of claim the plaintiff seeks interest at a rate of 10.25% per annum a tempore morae. In this application the plaintiff seeks a reduced rate of interest at 7% per annum in accordance

with the AOD, which is to the benefit of the defendant.

[13] The remainder of the defences impact the issue of the credibility of the defendant. Pronouncements have already been made in the liquidation application in that regard, which the defendant has not pursued further in the Supreme Court of Appeal. Those defences in any event do not avail the defendant.

Conclusion

[14] The defences raised by the defendant do not constitute a bona fide defences to the resist summary judgment and accordingly stand to be dismissed. The plaintiff is therefore entitled to summary judgment, albeit on an amount and interest at a rate lower than prayed for in its particulars of claim.

Costs

[15] Costs follow suit. The costs are awarded on an attorney and client scale in accordance with the agreement between the parties.

Order

[16] In the result, summary judgment is granted in favour of the plaintiff against the defendant for:

A H PETERSEN

JUDGE OF THE HIGH COURT,

NORTH WEST DIVISION, MAHIKENG

APPEARANCES

COUNSEL FOR THE PLAINTIFF: ADV B STEVENS Instructed by Jurgens Bekker Attorneys c/o Kgomo Moketle and Tlou Inc 56 SHIPPARD STREET MAHIKENG COUNSEL FOR THE DEFENDANT: MR OKKA LEHABE Instructed by: Lehabe Attorneys Inc 7443 Cydonia Street Unit 15 MMABATHO