About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2012
>>
[2012] ZAFSHC 4
|
|
Boshoff v Iliad Africa Trading (Pty) Ltd t/a Builders Market Welkom (1140/2011) [2012] ZAFSHC 4; (2012) 33 ILJ 2785 (FB) (26 January 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 1140/2011
In the matter between:-
JOHANNES HENDRIKUS
BOSHOFF
…
.................................
Applicant
and
ILIAD AFRICA
TRADING (PTY) LIMITED
t/a BUILDERS MARKET
WELKOM
….................................
Respondent
Registration number:
1997/010059/7
_____________________________________________________
HEARD
ON:
15 DECEMBER 2011
_____________________________________________________
JUDGMENT
BY:
RAMPAI, J
_____________________________________________________
DELIVERED
ON:
26 JANUARY 2012
_____________________________________________________
[1] The matter came to
court by way of motion proceedings. The applicant seeks the relief
whereby the respondent is ordered to pay
an amount of R219 944,16 and
costs. The application is opposed.
[2] There are certain
undisputed facts in this matter. The applicant was previously in the
employ of the respondent. His contract
of employment was terminated
through his resignation with effect from 30 November 2010. He was the
managing director of the respondent
at the time. His length of
service was nine years. He expected to receive certain outstanding
amounts in respect of salary and
leave pay from the respondent as
well as certain proceeds of the retirement pension benefits from the
pension fund.
[3] The respondent had a
customer called Hanlein Boerdery BK. The respondent and the customer
were parties to a certain credit agreement
signed in Welkom on 12
June 2007. The applicant was the sole member of the close
corporation. The applicant and the respondent
were parties to a
certain suretyship agreement. The applicant contractually bound
himself in favour of the respondent as surety
and co-principal debtor
for and on behalf of the close corporation.
[4] The applicant
warranted that the close corporation would duly perform its
contractual obligations towards the respondent in
terms of the credit
agreement and that the applicant, as the co-principal debtor, would
be liable towards the respondent should
the close corporation, as the
principal debtor, fail to pay for the goods supplied.
[5] The respondent
subsequently sold and delivered certain goods to the close
corporation from time to time, prior to the applicant’s
resignation. Seemingly, the close corporation was still indebted to
the respondent at the time these proceedings were instituted.
[6] So far the applicant
has not received the salary from the employer as he had expected.
Similarly, from the pension fund the
applicant has not received the
full benefits. The pension fund has paid to the respondent almost 48%
of the pension benefits due
to the applicant. It is that payment
which is the bone of contention in the current application.
[7] The following
historical background helps to illuminate some blind spots of the
matter: On 8 March 2011 a summons was issued
out of this court under
case number 1140/2011. The plaintiff sued the defendant for payment
of the capital amount of R208 139,93.
The action is defended and it
is still pending. The plaintiff and the defendant in those action
proceedings are the respondent
and the applicant respectively in
these motion proceedings. It is alleged that Hanlein Boerdery BK, the
principal debtor, owes
the sum of money to the respondent. The
applicant is sued in his capacity as a surety and co-principal
debtor.
[8] On 16 March 2011 the
sheriff served the respondent’s summons at 30 Grasvlei
Crescent, Jim Fouché Park in Welkom.
The method of serving the
summons was by affixing to the main door. The address was described
by the sheriff as the defendant’s
domicilium citandi et
executandi
. There was no reaction on the part of the applicant.
[9] On 23 May 2011 the
respondent applied for default judgment against the applicant. The
request was considered. On 10 June 2011
default judgment was granted.
On 21 June 2011 a writ was issued. The writ was not satisfied. On 6
July 2011 the deputy sheriff
reported that he could not serve the
writ since the applicant no longer resided at the given address,
according to a certain Mr.
J.P. Vermeulen, who identified himself as
the resident occupier.
[10] On 16 July 2011 the
applicant applied to this court to have the default judgment granted
on 10 June 2011 rescinded. He alleged
that he first became aware of
such judgment on 29 June 2011. The respondent opposed the application
for the rescission. The rescission
application was issued under the
same case number 1140/2011.
[11] On 17 August 2011
the provident fund paid an amount of R219 944,16 to the respondent
being the applicant’s pension benefits.
The provident fund made
the payment on the strength of the judgment of 10 June 2011 which the
respondent took against the applicant
by default. The writ was never
served on the provident fund. The funds were, therefore, not
judicially attached.
[12] On 27 September 2011
the applicant caused a summons to be issued against the respondent
out of the Welkom Magistrate Court
under case number 7103/2011. There
the applicant claimed an amount of R67 134,41 from the respondent in
respect of outstanding
salary. The action was defended. The
respondent filed its plea on 30 September 2011. The action was still
pending at the time the
current application was heard.
[13] On 3 November 2011
the rescission matter was argued before my brother Kruger, J. He
found in favour of the applicant. The court
order he made reads as
follows:
“
1. Die
vonnis deur hierdie hof verleen teen Applikant op 10 Junie 2011 onder
saaknommer 1140/2011 word tersyde gestel.
2. Die lasbrief uitgereik na
aanleiding van vermelde vonnis word tersyde gestel.
3. Die Applikant word geleentheid
gegun om binne 10 dae na verlening van hierdie bevel verdediging aan
te teken.
4. Koste van hierdie aansoek staan
oor.”
[14] On 16 November 2011
the applicant launched the current application. The application was
issued and served on the same day.
The applicant claimed an amount of
R219 944,16 from the respondent, being the pension benefits due to
the applicant which amount
the respondent had intercepted on 17
August 2011 by virtue of the default judgment of 10 June 2011. The
application was enrolled
for argument on 24 November 2011.
[15] On 17 November 2011
the respondent paid an amount of R117 952,02 to the applicant and
retained an amount of R101 992,14 in
respect of the applicant’s
capital claim of R219 994,16. The outstanding balance is
mathematically calculated as follows:
R219 994,16 – (minus)
R117 952,02 = R101 992,14.
[16] On 24 November 2011
my brother Jordaan, J was seized with the matter. He determined the
deadlines of 1 December 2011 and 8
December 2011 for the filing of
the answering affidavit and the replying affidavit respectively. He
then postponed the matter to
15 December 2011 for argument. He
reserved the costs. The respondent missed the deadline. The answering
affidavit was filed on
2 December 2011.
[17] On 6 December 2011
the respondent served and filed a condonation application in order to
have its lateness for the filing of
the answering affidavit condoned.
The condonation application was unopposed.
[18]
On Thursday 15 December 2011, I granted the respondent’s
condonation application, because the application was not opposed;
the
delay of one day was not excessive; the explanation was reasonably
satisfactory; the belated answering affidavit was not substantially
prejudicial to the applicant and the corrective action was swift -
MELANE v SANTAM INSURANCE CO LTD
1962 (4) SA 531
(AD) at 532.
[19] The current matter
was then argued before me. Having heard argument, I reserved judgment
to consider the verdict.
[20] The issue in the
matter was whether the two parties were reciprocally indebted to each
other. Mr. Grewar, on behalf of the
applicant, contended that they
were not. However, Mr. Cilliers, on behalf of the respondent,
contended that they were.
[21] A provident fund is
entitled to pay any monies, otherwise due to its member, to a third
party provided a legally binding document
exists between the parties
which warrants such payment or provided a court order authorises such
payment – section 37D(1)(b)(ii)
Pension Funds Act 24/1956 as
amended provides that a registered pension fund may deduct any amount
due by a member, in other words
an employee, to his employer on the
date of such employee’s retirement in respect of: compensation
of any damage caused by
such retiring employee to the employer by
reason of any theft, dishonesty, fraud or misconduct committed by the
employee provided
the employee has signed a written admission of
liability in favour of the employer or the employer has obtained
court judgment
for compensation against such a delinquent employee.
[22] The respondent had
no legally binding document by virtue of which it could have the
pension monies due to the applicant by
the provident fund intercepted
and paid over to the respondent. Therefore, the first leg of the
section created no debt due to
the respondent by the applicant. In
the absence of such a legal document, I have to ascertain whether the
respondent can rely on
the second leg of the section. In this
connection an aggrieved employer is allowed to rely on a court order
to claim compensation
direct from the provident fund.
[23] The applicant
resigned from the respondent’s employment on 30 November 2010.
Thirteen weeks later, the provident fund
had still not paid out to
him the cash pension benefits. It will be recalled that on 8 March
2011 the respondent initiated action
legal proceedings against the
applicant, obtained default judgment against him on 10 June 2011 and
on the strength of such judgment
received payment of R219 944,16 from
the applicant’s provident fund on 17 August 2011, some 34
months since the applicant’s
resignation. The applicant’s
suspicion that the respondent apparently used undue influence to
delay payments of the pension
money to the applicant by the provident
fund so as to enable the respondent to obtain judgment on which to
rely was not baseless
in these circumstances.
[24] I pause to point out
that it is not every civil judgment that can be enforced by an
employer against an employee through the
provident fund. The section
specifies the genus of claims that may be enforced by the employer
against the employee and directly
recovered by the employer from the
provident fund. An employer’s recourse against the provident
fund is an avenue available
only in very rare cases. The golden
thread which runs through all such exhaustively classified genus of
debts or claims is a
causa
tainted by an element of
discreditable or untrustworthy conduct on the part of an employee
towards his employer –
vide
ss (1)(b)(ii) of section
37D.
[25] The section
authorises the provident fund to deduct such compensation from any
pension benefit payable to such employee and
to pay it to the
employer concerned. It has to be stressed that not any employer armed
with any civil judgment can lawfully have
recourse against the
provident fund for the pension benefit of a retiring employee. The
section is exclusively reserved only for
those employers who can show
that they are legitimate victims of specific dishonourable workplace
transgressions. Obviously the
respondent
in casu
did not
qualify as such a victim. Therefore, the respondent was not entitled
to the special protection as evisaged.
[26] The debt by Hanlein
Boerdery BK which gave rise to the suretyship agreement signed by the
applicant in favour of the respondent
was, in my view, not
underpinned by the requisite
causa
as envisaged in section
37D. Since the respondent was not procedurally entitled to recover
such a pure commercial debt from the
provident fund, the provident
fund was not legally obliged to pay over to the respondent any
pension money due to the applicant.
It would seem, for this reason
alone, that the court order in question was erroneously sought and
erroneously granted. That specific
judgment by default has, on
different grounds, since been rescinded. Accordingly no valid
causa
exists for the respondent’s continued retention of the
applicant’s pension money.
[27] The respondent’s
defence of a set-off cannot be sustained. The ill-gotten funds cannot
be lawfully retained any longer.
The alleged defence of set-off is
tainted by an illegality. The respondent’s continued retention
of the applicant’s
pension money flagrantly undermines the
legal effects of the rescission of the default judgment. The legal
effect of the rescission
was that payment to the respondent by the
provident fund was retrospectively nullified. Therefore, the
respondent no longer had
a right to hold the proceeds of the
applicant’s pension. The payment in question was irregularly
made and it was no longer
recognised as a legally valid transaction
in law.
[28] The
status quo
had to be immediately restored. So far the respondent has frustrated
the restorative process. In the light of the rescission the
respondent was not entitled to continue enjoying any resultant
benefits derived from the rescinded court order. The second leg
of
the section does not assist the respondent either. The respondent
contention that the applicant owed it some money, was based
on a
wrong premise.
[29] Notwithstanding the
aforegoing, the respondent would not release the applicant’s
pension money. The claim which the respondent
seeks to set-off
against the applicant’s claim for the recovery of the pension
money is the subject of the pending dispute.
The respondent has
already initiated such legal proceedings. The applicant has already
delivered his plea. Since the applicant
disputed such a claim, there
is no proven and claimable debt owed by the applicant to the
respondent. If that is the case, and
I believe it is, then the
principle of set-off does not come into the picture -
ABSA BANK
LTD v STANDARD BANK OF SA LTD
[1997] ZASCA 71
;
1998 (1) SA 242
(SCA) at 251 G
– H.
[30] The principle of
set-off comes into operation in a case where two parties
unconditionally acknowledge that they are mutually
indebted to each
other and that both debts are liquid, fully due and payable –
JOINT MUNICIPAL PENSION FUND (TRANSVAAL) v PRETORIA MUNICIPAL
PENSION FUND
1969 (2) SA 78
(T).
[31] It is important to
remark that neither in the action proceedings instituted by the
respondent against the applicant in this
court nor in the action
proceedings instituted by the applicant against the respondent in the
district magistrate’s court
is there any averment made by the
respondent that set-off was applicable. I may add that in the
rescission application as well
there was no such an averment. After
those three previous legal battles between the parties, the
respondent invoked the defence
of set-off for the first time in these
current proceedings. The respondent relied on certain statements made
by the applicant in
his founding affidavit pertaining to the
rescission application to the defence of set-off.
[32] The applicant said
the following in the rescission application about the respondent’s
claim as particularised in the
summons. At paragraph 16 of the
founding affidavit he said:
“
Daar
bestaan by my geen twyfel dat die bedrag van Hanlein Boerdery BK ”
betaal moet word nie aangesien dit ‘n kredietrekening
is by die
Respondent wat deur Hanlein Boerdery BK vereffenbaar is.
Aangesien
ek egter sedert die datum van my bedanking geen verdere insae in die
boeke van die Respondent het nie, kon ek nog nie
die finale saldo wat
verskuldig is op hierdie rekening vasstel nie.
Ek het egter in my besit die mees onlangse staat tot my beskikking
van Hanlein Boerdery BK gedateer 4 November 2010.
Gemelde
staat toon aan dat die uitstaande balans verskuldig deur Hanlein
Boerdery BK die bedrag van R101 992.14 beloop.
Geen verdere aankope is gedoen na my bedanking nie. Ek heg hierby aan
die gemelde staat gemerk aanhangsel ‘
JH4
’.”
[33] The second passage
on which the respondent relies for claiming that the applicant
admitted his indebtedness to the respondent
is to be found at
paragraph 17 of the same founding affidavit.
“
Op
die datum van my bedanking sou die volgende gelde my derhalwe
toegeval het:
17.1 Salaris en verlof
R88 000.00
17.2 Voorsorgfonds
R480683.51
TOTAAL R568683.51
MIN: Verskuldig ten
opsigte van Hanlein
Boerdery
R101
992.14
NETTO BETAAL
R466691.37
”
[34] In the third place,
the passage relied upon, is to be found at paragraph 31 of the
founding affidavit.
“
Ek
verwys die Hof eerbiediglik daarna
dat
die vonnis
wat toegestaan is deur die Agbare Hof nadat ‘n beëdigde
verklaring gelewer is,
die
bedrag van R208 139.93 beloop
tesame met rente en koste.
Ek
kan met gemelde bedrag geensins saamstem nie aangesien die laas
bekende uitstaande balans aan my die bedrag van slegs R101 992.14
beloop het.
Verder is Respondent ook nog aan my verskuldig die laaste salaris
asook my uitstaande verlof. Ek kan nie anders as om te vermoed
dat
respondent opsetlik en agter my rug gehandel het ten einde ‘n
vonnis teen my te bekom nie.”
[35] On the strength of
the aforegoing averments the respondent strenuously contended that
the applicant admitted that he owed an
amount of R101 992,14 to the
respondent as surety for and on behalf of Hanlein Boerdery BK. The
amount of the respondent’s
rescinded claim was R219 944,16. The
respondent was therefore obliged to fully repay that amount. Instead,
the respondent repaid
only a portion thereof in the amount of R117
952,02 but withheld the balance of R101 992,14. The respondent
reckoned that the latter
amount represented a reciprocal debt owed to
the respondent by the applicant.
[36] The aforegoing was,
with respect, a shallow argument. In my view, the respondent was not
entitled to off-set the amount of
R101 992,14 from the proceeds of
the pension benefits which it had, after all, irregularly received
from the pension fund. Upon
an integrated reading of the applicant’s
aforesaid three averments, it cannot be concluded that the applicant
unequivocally
acknowledged that he was indebted to the respondent in
that amount. At best for the respondent, the applicant conceded
liability
but questioned the quantum of the respondent’s claim.
[37] It followed,
therefore, that in those circumstances the elementary requisite for
the operation of set-off –
viz
reciprocal or mutual
acknowledgement of indebtedness by each of the parties in favour of
the other, was missing. Accordingly there
can be no talk of
off-setting one debt against the other. This is so because the
applicant has a mature debt against the respondent
whereas the
respondent seemingly has a nascent debt against the applicant.
[38] In
SCHIERHOUT
v UNION GOVERNMENT
1926 AD 286
the court held that opposing
debts should be claimable. In this instance the respondent paid back
a substantial portion of the
applicant’s claim a day after the
launching of these proceedings. In so doing, the respondent
implicitly acknowledged its
indebtedness to the applicant. In the
circumstances there are no two opposing debts which are both
claimable. There is only one
such debt and it is in favour of the
applicant. The applicant’s debt against the respondent is ripe
but the respondent’s
alleged claim against the applicant is
not. A premature debt is not claimable. Since it is unclaimable, it
cannot be relied upon
in order to raise the defence of a set-off.
[39] There is nothing new
in the respondent’s contention of set-off. It was earlier,
considered and rejected by my bother
Kruger J. His finding that the
respondent was obliged to repay the full amount of R219 944,16
without any deduction is one which
I cannot hold to be wrong.
[40] Nothing of substance
turns on various other defences raised by the respondent. I would,
therefore, dismiss each one of them
and grant the application.
[41] I have come to the
conclusion that the applicant has, on a balance of probabilities,
discharged the onus of proving that he
was entitled to the full
amount of R219 994,16 which the respondent had earlier received from
the provident fund in terms of an
incompetent default judgment that
has since been set aside.
[42] As regards the
respondent’s defence, I am not persuaded that the respondent
has acquitted himself of the onus of proving
that a reciprocal debt
was owed by the applicant to the respondent in order to trigger off
the operation of the principle of set-off.
[43] These proceedings
were precipitated by the respondent’s defiance of the
rescission court order. Although the respondent’s
condonation
application was successful, it has to be borne in mind that such an
application was a direct sequelae of the respondent’s
failure
to obey a court order. In my view, it cannot be in the interest of
justice to have the costs relative to the condonation
application
borne and paid by the applicant merely because the applicant had
insisted that the respondent should bring a condonation
application
which application the applicant did not oppose in the end. In the
exercise of my discretion I am not inclined to make
any costs order
relative to the condonation application. As regards the main
application the applicant is entitled to the fruit
of his success.
[44] Accordingly I make
the following order:
44.1 The respondent is
directed to pay the amount of R219 994,16 less the previous payment
of R117 952,02 to the applicant within
14 days of this order.
44.2 The outstanding
balance of R101 992,14 shall bear interest at the rate of 15,5% p.a.
from 3 November 2011 being the date on
which the rescission order was
made.
46.3 The respondent pays
the costs of this application including those that were reserved on
24 November 2011.
______________
M.H. RAMPAI, J
On
behalf of applicant: Adv. D.M. Grewar
Instructed
by:
Vosloo
Prokureurs
BLOEMFONTEIN
On
behalf of respondent: Adv. H.J. Cilliers
Instructed
by:
Hill
McHardy & Herbst Inc
BLOEMFONTEIN
/sp