Special Investigation Unit and Another v Msagala and Others (GP05/2020) [2021] ZAST 2 (31 August 2021)

Special Investigation Unit and Another v Msagala and Others (GP05/2020) [2021] ZAST 2 (31 August 2021)

The Tribunal found, on a balance of probabilities, that Msagala received secret profits amounting to R26,423,028.77 from IGS and Sithole while employed by Transnet, in breach of his employment duties. The evidence showed that cash deposits into the Msagala Investment Trust account correlated with payments from Transnet to IGS and subsequent cash cheques issued by IGS, which were cashed by Msagala or his associates. The Tribunal rejected the defence that these funds were derived from other businesses or loan repayments, finding such explanations improbable and unsupported by evidence. IGS and Sithole were found to have acted in concert with Msagala in an unlawful conspiracy to benefit him...

Citation
[2021] ZAST 2
Parties
Applicant: Special Investigating Unit; Applicant: Transnet SOC Ltd; Defendant: Linyenga Maikane Herbert Msagala; Defendant: Linyenga Herbert Msagala N.O.; Defendant: Roberto Jorge Medonca Velosa N.O.; Defendant: Loretta Kgakgamatso Msagala; Defendant: Bonolo Mathulo Msagala; Defendant: IGS Consulting Engineers (Pty) Ltd; Defendant: Sipho Victor Sithole
Court
Special Tribunal
Jurisdiction
South Africa
Judgment Date
31 August 2021
Case Number
GP05/2020
Procedural Posture
Civil Trial / Judgment After Default Trial; Defendants Withdrew After Failed Postponement
Outcome
Judgment granted in favour of the plaintiffs. The first, second, third, sixth and seventh defendants are jointly and severally liable to pay Transnet R26,423,028.77, subject to deductions for amounts recovered through forfeiture and preserved pension benefits. Bonolo Mathulo Msagala is not held personally liable.
Judges
L T Modiba
Legal Topics
Breach of Fiduciary Duty, Secret Profits, Disgorgement of Profits, Statement and Debatement of Account, Punitive Costs, Forfeiture of Assets
Commercial and Corporate Civil Procedure Delict Breach of Fiduciary Duty Secret Profits Disgorgement of Profits Statement and Debatement of Account Punitive Costs +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 6 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Special Investigating Unit

Applicant

Transnet SOC Ltd

Applicant

Linyenga Maikane Herbert Msagala

Defendant

Linyenga Herbert Msagala N.O.

Defendant

Roberto Jorge Medonca Velosa N.O.

Defendant

Loretta Kgakgamatso Msagala

Defendant

Bonolo Mathulo Msagala

Defendant

IGS Consulting Engineers (Pty) Ltd

Defendant

Sipho Victor Sithole

Defendant

Procedural Posture

Civil Trial / Judgment After Default Trial; Defendants Withdrew After Failed Postponement

Legal Issues

  1. 1 Whether Msagala, while employed by Transnet, received secret profits from IGS and Sithole in breach of his employment duties.
  2. 2 Whether IGS and Sithole unlawfully interfered with Transnet's contractual rights by making payments to Msagala.
  3. 3 Whether the cited defendants are jointly and severally liable to Transnet for the loss suffered due to the secret profits.

Ratio Decidendi

The Tribunal found, on a balance of probabilities, that Msagala received secret profits amounting to R26,423,028.77 from IGS and Sithole while employed by Transnet, in breach of his employment duties. The evidence showed that cash deposits into the Msagala Investment Trust account correlated with payments from Transnet to IGS and subsequent cash cheques issued by IGS, which were cashed by Msagala or his associates. The Tribunal rejected the defence that these funds were derived from other businesses or loan repayments, finding such explanations improbable and unsupported by evidence. IGS and Sithole were found to have acted in concert with Msagala in an unlawful conspiracy to benefit him...

Court Disposition

Judgment granted in favour of the plaintiffs. The first, second, third, sixth and seventh defendants are jointly and severally liable to pay Transnet R26,423,028.77, subject to deductions for amounts recovered through forfeiture and preserved pension benefits. Bonolo Mathulo Msagala is not held personally liable.

Orders

  • Leave granted to amend particulars of claim as per notice dated 28 May 2021.
  • First, second, third, sixth and seventh defendants to pay Transnet R26,423,028.77 jointly and severally.