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2024
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[2024] ZAGPPHC 774
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MT Creations Trading Enterprise (Pty) Ltd and Others v Universal Service and Access Agency of South Africa (39600/22) [2024] ZAGPPHC 774 (13 August 2024)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG DIVISION,
PRETORIA
Case No: 39600/22
Reportable: No
Of interest to other
Judges: No
Revised: No
SIGNATURE
Date: 13/08/2024
In the matter between:
MT CREATIONS TRADING
ENTERPRISE (PTY) LTD
Applicants
AND 16 OTHERS
and
UNIVERSAL SERVICE AND
ACCESS AGENCY OF
Respondent
SOUTH AFRICA
JUDGEMENT
MOOKI J
1
The applicants claim payment from the
respondent for services rendered by the applicants. The respondent
engaged the applicants
to install set-top boxes and related
accessories as part of the switch from broadcasting using an analog
signal to broadcasting
using a digital signal. Users required set-top
boxes or decoders to receive a digital signal.
2
The South African Post Office supplied the
applicants with the set-top boxes and related accessories for
installation by the applicants.
The applicants in turn installed the
set-top boxes and/or decoders at the behest of the respondent.
3
A dispute arose among the parties regarding
payment by the respondent to the applicants. The dispute was referred
to arbitration.
The parties settled their dispute.
4
The parties agreed to the following as part
of their settlement: the respondent would pay the applicants the sum
of R20 000 000.00,
of which R12 500 000.00 would be paid upon
signature of the settlement agreement; the respondent would retain R5
730 679.41 as
set-off for outstanding stock. The respondent would
also retain an amount of R1 769 320.59, which would be deposited into
an interest-bearing
account pending verification of the correctness
of payments made by the South African Post Office to the applicants
and the number
of uninstalled and/returned stock. The respondent was
to verify the outstanding stock.
5
The settlement was made an arbitration
award on 3 November 2020. The award was later made an order of court.
6
The respondent paid the amount of R12 500
000.00. The respondent also paid the amount of R1 769 320.59, with
interest. The respondent
retains the amount of R5 730 679.41. The
applicants contend that the respondent’s verification process
established that there
is no outstanding stock, with the result that
the respondent is required to pay the R5 730 679.41 to the
applicants.
7
It is denied on behalf of the respondent
that verification has been completed. The respondent’s
executive caretaker is said
to have commissioned an “open
audit” which established substantial discrepancies. The
executive caretaker is further
said to have commissioned a “forensic
audit” in May 2020 for the verification of outstanding and
unreturned set-top
boxes and antennae/dishes. The audit is said to be
ongoing. It is contended on behalf of the respondent that the
applicants may
be found to be indebted to the respondent.
8
The applicants wrote to attorneys for the
respondent on 11 July 2022, demanding payment in the amount of R5 730
679.41. There were
further exchanges of correspondence between 11
July 2022 and, at least, by 12 September 2022. It was never contended
on behalf
of the respondent during the exchanges that the respondent
had commissioned or that an audit had revealed discrepancies.
9
It was pointed out on behalf of the
applicants that the respondent was required, in terms of the
settlement agreement, to have completed
the verification by 31 July
2020. It was pointed out on behalf of the applicants that the
respondent did not include a copy
of the report or audit mentioned by
the respondent. It was further pointed out that there is no mention
of when the stated verification
would be completed, and the reasons
for the delay.
10
The
applicants denied that the settlement agreement provided for the
respondent to undertake an “audit”; that the respondent
was to verify stock listed in annexure A to the settlement agreement,
and that the stated forensic audit was not a legal basis
for a
refusal to pay.
11
It
was contended on behalf of the applicants that uninstalled stock was
returned to warehouses of the South African Post Office
and that the
total number of returned stock was confirmed at a meeting on 23
October 2019. The respondent also verified stock in
warehouses of the
South African Post Office in November 2021. The verification was made
at the behest of the Minister of Communications
and Digital
Technologies.
12
The
applicants drew attention to a “Stock Count Report” that
was prepared following verification by the respondent at
the instance
of the Minister. The report is dated 13 November 2021. The
applicants contend that the report shows that the
verification has
been completed, with the result that the respondent had no cause to
withhold the R5 730 679.41.
13
I
agree that the respondent has no cause to withhold the R5 730 679.41
being claimed by the applicants. The respondent’s acting
chief
executive officer, who deposed to the answering affidavit, was not
candid with the court. She made unsubstantiated averments
that “an
open audit” revealed substantial discrepancies. She did not
explain why an audit that was commissioned in
May 2020 remained
outstanding. She does not say who is undertaking the audit. There is
no confirmatory affidavit in relation to
her averments.
14
The
respondent’s acting chief executive officer, more
fundamentally, was not frank with the court by failing to mention the
Stock Count Report. This report is dated 13 November 2021. It is
addressed to the deponent as the respondent’s acting chief
executive officer. She had no basis to say that an audit was pending
since May 2020 when she knew of the Stock Count Report long
after May
2020.
15
The
“purpose” of the Stock Count Report is stated as “To
provide a final report on the national stock count on
the BDM
inventory in the South African Post Office Warehouses and local
branches as instructed by the Minister of Communications
and Digital
Technologies.”
16
The
stock count was completed in November 2021. It is not understood how
the respondent’s acting chief executive officer can
say, on
oath, that there is a pending audit in relation to the stock when she
has long been aware that “a final report”
had been
prepared at in relation to such stock.
17
Paragraph 2.2 of the Stock Count Report
details the stock count process. The process included a photographic
record that stock exists
in a particular warehouse or branch.
Paragraph 2.3 of the report details the “stock count
assurance.” It is recorded
that “The nationwide stock
count was conducted with both the Internal Audit Teams of USAASA and
the South African Post Office.”
18
The
applicants’ indebtedness was subject to stock verification;
with the R5 730 679.41 kept in an interest-bearing account
pending
such verification. The applicants have shown that the verification
has been done. The respondent has no cause to withhold
the payment.
19
The
respondent sought condonation for the late filing of its answering
affidavit. The delay is condoned.
20
I
make the following order:
(1)
The respondent is ordered to pay the
applicants:
a.
The sum of R5 730 679.41;
b.
Interest on the sum of R5 730 679.41 at
9.5% from 14 February 2020 to date of payment.
(2)
The costs of the application, including the
costs of the postponement on 15 August 2023.
O
MOOKI
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Appearance
:
On behalf of the
Applicants
T Mphahlane
Instructed by:
Madima Attorneys
Inc.
On behalf of the
Respondent
C Setlhako
Instructed by:
The State
Attorney, Pretoria
Date of Hearing:
27 May 2024
Date of
Judgement:
13 August 2024