SAFLII Note: Certai n 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
GAUTENG DIVISION, PRETORIA
CASE NO: 2025- 024691
(1) REPORTABLE: YES/ NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED.
06/03/2025
In the matter between :
THE CONSTRUCTION EDUCATION AND
TRAINING AUTHORITY (CETA) Applicant
and
V2 DIGITAL (PTY) LTD First Respondent
(Registration Number: 2017/535298/07)
KYXIS T ECHNOLOGIES CC Second Respondent
(Registration Number: 2010/135500/23)
JUDGMENT
LABUSCHAGNE J
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[1] The applicant is the Construction Education and Training Authority, an organ
of state which applies on an urgent basis for relief for the restitution and return of its
cloud- hosted property after expiry of its contract with V2 Digital (Pty) Ltd (the first
respondent).
[2] The applicant accuses the first respondent of holding the applicant to
ransom and raising and justifying invoices after termination of the contract. The
second respondent is the new service provider appointed by the applicant in December 2024. [3] The applicant was in a contractual relationship with V2 Tec h Holdings (Pty)
Ltd during 2023. At that time Mr Otto Nel was employed as the Chief Operating
Officer of V2 Tech Holdings. The applicant required a service provider that had a
Level 1 BEE compliant service provider classification and who had to be on the Central Supply Database of the Government. V2 Tech Holdings (Pty) Ltd was a
Level 4 BEE service provider but was not on the Central Supply Database of the Government. This information was only disclosed after the hearing in the
circumstances set out below.
RELIEF SOUGHT IN PART A [4] The applicant has brought its application in Part A and Part B. Part A serves
before this Court on the basis of urgency. In terms thereof, the applicant seeks on
the basis of urgency an order for the following relief:
4.1 Ordering the first respondent to immediately take all
necessary steps to restore and reinstate to the applicant the full and effective functionality of all CETA systems and data that are currently being hosted, managed, controlled and/or retained by the first respondent.
4.2 Ordering that the said restoration and reinstatement of
functionality of all CETA systems and data include that the respondent is obliged and compelled:
4.2.1 To perform a full handover of the CETA systems and data in its
possession or under its control to Kyxis, acting as agent on behalf of the (probably -my insertion- applicant );
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4.2.2 To grant all administrative access to the Meraki Infrastructure to the
second respondent, to remove all third -party service provider access and to
provide complete control of C -channel for the CETA’s website domains, which
are ceta.org.za and ceta.co.za;
4.2.3 To provide the applicant and the second respondent with the correct
encryption keys in order to enable the second respondent to perform a
backup restoration of the data belonging to the applicant;
4.2.4 To provide the second respondent with V irtual Machines, to enable it to
restore the applicant’s four operating systems, to provide thorough infrastructure testing, to perform network configuration and optimisation and security protocols;
4.2.5 To implement and fully comply with the handing over procedure as set
out in the “CETA ICT h andover document signed by the parties on 24 January
2025.” 4.3 The CETA handover document referred to is a 17- page
document, which ostensibly already existed at the end of December 2024. That was the date of the first handover meeting. At that time, paragraph
11 of the document read differently as to what it read on 24 January 2025, the
second handover meeting. On the disputed issues befor me the document of
24 January 2025 reads:
“11. POPIA compliance and data governance
In alignment with the Protection of Personal Information Act
(POPIA ) and the CETA’s data governance policies, the CETA requires V2
Ditigal to adhere to strict data protection and confidentiality standards.
As V2 Digital’s contract with the CETA concluded on 31
December 2024, the CETA formally requests that V2 Digital purge all copies
of trade secrets , confidential information, and any other data or electronic
media – including backups and archived files – that may reside within its
systems.
This data purge must be completed by the end of the Azure
migration of the CETA infrastructure, with final sign- off from CETA, V2 Digital
and Kyxis.
Further, V2 Ditigal must provide written confirmation of the
date destruction to ensure compliance with POPIA regulations and the
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CETA’s data governance framework. This confirmation is essential to
safeguarding the CETA’s sensitive information, prevent unauthorised access,
and upholding the principles of data privacy, integrity and accountability.”
[5] The applicant entered into a separate contract with V2 Digital (Pty) Ltd (the
first respondent) for the provision of ICT services at management.
[6] The service level agreement of the applicant with V2 Digital was signed on
23 February 2024 and was envisaged to last for only 3 months, up to 13 May 2024.
However, it was through a number of extensions extended until the last day of December 2024 when the contract came to an end.
[7] The scope of the work included managed security services and infrastructure
monitoring with offsite backups of critical data.
[8] The contract does not provide for subcontracting and the obligation to host
the critical data of the applicant, including its personal information was the
contractual obligation of the first respondent.
[9] Clause 22 of the service level agreement sets out termination conditions. As
will appear from the terms set out below, the contract envisaged a seamless
handover on date of termination of the contract. The contract reads in part:
“22.1 Upon termination of this agreement for any reason whatsoever,
whether pursuant to the provisions of clause 21.2 above or otherwise (and without prejudice to any other rights or remedies of CETA under this agreement or in law) the company shall:
22.1.1 Forthwith cease to provide the services;
22.1.2 During the notice period referred to in item 4 of annexure
A;
22.1.3 Return to CETA all keys and other means of access to
any CETA premises;
22.1.4 Return all other of CETA’s property which may be in the
possession of the company to CETA;
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22.1.5 Immediately remove all property belonging to it from any
premises; and
22.1.6 Shall deliver a certificate to CETA within 5 days of
termination of this agreement in terms of which the company certifies that it
has complied with its obligations in terms of clause 22.1.”
[10] At the time of the hearing of this application it was common cause that a new
service provider (K yxis), appointed during December 2024, was in possession of
most of the listed property in the Notice of Motion and the handover document of 24
January 2025. The only outstanding issue related to the migration of the applicant’s
data and information stored on the internet . Kyxis is in possession of the backup
records which it retrieved from a third- party service provider, Redstor. Such backups
are currently in the possession, by arrangement of Kyxis , of DataPro.
[11] The issue of migration of data was raised by the first respondent in the
middle of 2024 and the applicant was advised that such migration takes three to four months. At that stage it was suggested that the applicant acquire the Azure program
to facilitate the migration of data from one host to the next.
[12] On 30 December 2024 a handover meeting took place. It was recorded by
Mr Nel on behalf of V2 Digital and Molebogeng Taje, Executive Manager Strategic
Support of CETA that the following had been handed over:
12.1 A “USB stick enclosed in an envelope containing the service
account details, passwords and the handover document as discussed and presented during the meeting between Kyxis, CETA and V2” .
The applicant contends that the first respondent has been holding over on the issue of migration and has been raising invoices in respect of hosting costs incurred by it.
12.2 The first respondent contents that the applicant did not heed
its warning of timeously acquiring the Azure program, which was only ordered
during December or January 2025.
12.3 The applicant complains that the first respondent has
appointed itself as an overs eer of the migration process to Kyxis and is using
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its control over the applicant’s management systems to extort payments which
are not due as the contract has come to an end.
[13] The first respondent denies the aforesaid. The first invoice about which is the
complaint, is an invoice that was delivered on 15 December 2024 for 1 month’s services, i.e. until 15 January 2025. This was conceded as being a mistake as the
contract expired at the end of December 2024.
[14] The first respondent contends that, because the applicant di d not timeously
make arrangements for the migration of the information being stored on the internet, it has been held liable for hosting services by a third party in an amount of
R75 000.00 per month.
[15] Upon an enquiry by the Court , counsel for the applicant disclosed that the
services for hosting are being rendered by V2 Tech Holdings (Pty) Ltd. Upon further
instructions being obtained, he conveyed to me that V2 Tech Holdings is a third -
party company unrelated to the first respondent and that the similarity in names was
not significant.
[16] As a result of the aforesaid interaction the applicant did a company search
and uploaded the results of the search onto CaseLines. I also requested the the first
respondent to respond to the contentions advanced by the first respondent.
[17] In a letter of 19 February 2025, the same attorney w ho is on resord for the
first respondent wrote a letter on behalf of V2 Tech Holdings (Pty) Ltd. The letter
contains the following:
“We hereby confirm that all services managed by V2 Tech Holdings (Pty) Ltd,
including those within its infrastructure that CETA has utilised, will be enable d
and fully operational without interruptions once payment has been received and cleared in our trust bank account, as per the attached bank confirmation letter. Kindly also find attached the pro forma invoice for your reference, as
requested and communicated extensively between you and Mr Nel.”
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[18] Mr Otto Nel is the deponent for the first respondent. He is the Chief
Operating Officer of the first respondent. The letter indicates that he also represents
V2Tech Holdings.
[19] In the supplementary affidavit filed by Mr Nel , in response to the CIPRO
records uploaded by the applicant after the interaction and disclosures referred to above, he contends that he is neither an employee of the first respondent nor of V2
Tech Holdings.
[20] In his affidavit he states the following:
“6.4 I further confirm that I have never held any shareholding in V2 Digital
(Pty) Ltd and/or in V2 Tech Holdings (Pty) Ltd, or have directly or indirectly exercised control over V2 Tech Holdings (Pty) Ltd.
6.5 Further, I confirm that neither of the two companies directly or
indirectly control the other, or the business of the other, as being a subsidiary of the other or that either party have the ability to materially influence the currency or management or decision making of either company, specifically
V2 Tech Holdings (Pty) Ltd.”
[21] The aforesaid statements are made to confirm that the invoice for hosting by
V2 Tech Holdings (Pty) Ltd and payable by V2 Digital (Pty) Ltd is an arm’s length transaction.
[22] I have difficulties accepting the aforesaid contention by Mr Nel. The reasons
are the following:
22.1 In a letter of 22 August 2023 (i.e. in the period before the
applicant entered into a contract with V2 Digital (Pty) Ltd), Mr Nel wrote a letter to H Shangase of the applicant, which bears the heading: “Confirmation
of divisional relationship – V2 Digital (Pty) Ltd, a division of V2 Tech Holdings
(Pty) Ltd”.
22.2 In the letter Mr Nel states:
“I trust this message finds you well. I am writing to formally confirm the
existing divisional relationship between V2 Digital (Pty) Ltd and V2 Tech
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Holdings (Pty) Ltd, as well as to provide the relevant identifying details for our
records.
I, Mr Otto Nel, hold the position of COO at V2 Tech Holdings (Pty) Ltd. My
Identification Number is: 7[…]. I would like to confirm that V2 Digital (Pty) Ltd
is indeed a division of V2 Tech Holdings (Pty) Ltd. The registration number for
V2 Digital (Pty) Ltd is 2017/535298/07, and for V2 Tech Holdings (Pty) Ltd it is 2018/041070/07.
Furthermore, we kindly request that CETA facilitate the cession of all existing agreements and appointment letters from V2 Tech Holdings (Pty) Ltd to V2 Digital (Pty) Ltd.”
22.3 Mr Nel is much more in control of V2 Digital and V2 Tech Holdings
than he is willing to disclose. This is apparent from the claim for payment by
V2 Tech Holdings (Pty) Ltd on 19 February 2025 for payment, in exchange for which V2 Tech Holdings would provide the applicant with access to the information hosted by V2 Tech Holdings. It is this claim to payment that is the
basis for the first respondent’s defence that it is compelled to continue hosting and to pay for such hosting during the migration process.
[23] As Chief Operating Officer, Mr Nel is acting in an authoritative capacity in
respect of both V2 Digital (Pty) Ltd and V2 Tech Holdings (Pty) Ltd.
[24] However, the records of the CIPC reflect that V2 Tech Holdings (Pty) Ltd is in
final deregistration for failure to submit annual returns. As a deregistered company, it
is effectively non- existent. Mr Nel, in his affidavit filed on 28 February 2025, contends
that V2 Tech Holdings (Pty) Ltd was unaware of its own deregistration and blame s
the auditors who have e migrated to New Zea land. V2 Tech Holdings (Pty) Ltd is
apparently taking steps to be reinstated on the register. The fact is , however, that at
the present the company is deregistered. Insofar as it has a residual interest or a
business, Mr Nel speaks for it.
[25] Clause 22.1 of the agreement between the applicant and the first respondent
provided that the first respondent would cease providing services upon termination
(see clause 22.1).
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[26] Further, during the notice period the first respondent was obliged to return to
CETA all CETA’s property and to retrieve its own property from the premises of
CETA. The term “property” is not defined, but it would include the applicant’s
property rights to private information and data hosted in terms of its agreement with the first respondent.
[27] As the first respondent was contractually obliged to provide all the services
pertaining to ICT to the applicant, including hosting, it s alleged current difficulties in
returning the private information and to restore access for purposes of migration is contrived. In this instance, Mr Nel is ostensibly directing the actions of both the first
respondent and V2 Tech Holdings (Pty) Ltd. To suggest that V2 Digital is powerless
to do anything about the relief sought by the applicant is not accepted. Insofar as Mr
Nel purports to act on behalf of a company not existing on the register at the moment, he, in his capacity as Chief Operation Officer of the first respondent and a directing mind of V2 Tech Holdings, is in a position to give effect to the obligations of the first respondent in terms of clause 22 of the agreement between the applicant and the first respondent. I accept the submission by counsel for the applicant that V2
Tech Holdings is ostensibly the alter ego of V2 Digital.
[28] In its founding affidavit the applicant contends that the applicant has already
compensated the first respondent for the migration and reconfiguration into CETA Cloud Environment, which it made available to the first respondent from 6 January 2025. That notwithstanding, the CETA Cloud Environment remains empty as the first
respondent continues to host all of the applicant’s data and charges the applicant for it.
[29] As the obligation to return the applicant’s property lay on the first respondent,
it cannot avoid its obligations in this regard.
[30] In the premises the applicant’s contention that it has been rendered
dysfunctional due to its inability to ac cess its own management systems and
information, constitutes sufficient grounds for urgency.
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[31] Further, the applicant has established a clear right to return of its property in
terms of clause 22 of its service level agreement with the first respondent upon
termination on 30 December 2024.
[32] It has a reasonable apprehension of irreparable harm. The chaos created by
the applicant’s inability to access its managements systems and data, has resulted in the applicant being unable to pay even salaries. The first respondent, save for its
contrived liability for the hosting by V2 Tech Holdings (Pty) Ltd, will suffer no apparent harm if directed to comply with its contract.
[33] There is clearly no alternative remedy available to the applicant. Attempts to
negotiate a solution to this matter has not resulted in resolution of the dispute.
[34] In the premises the applicant has established the elements for interim relief as
sought in Part A.
[35] In light of the second respondent being in possession of all relevant data,
access keys etc., and in light thereof that only the cloud function (storage of data on
the internet) is outstanding, and subject to migration, the applicant has limited the relief it seeks to paragraph 2 of the notice of motion.
[36] In the premises I make an order in the following terms
1. The matter is heard on the basis of urgency.
2. The first respondent is ordered to immediately take all necessary
steps to restore and reinstate to the applicant the full and effective functionality of all CETA systems and data that are currently being hosted, managed, controlled and/or retained by the first respondent.
3. The first respondent i s ordered to pay the c osts of the application,
including the costs of senior counsel, on Scale C.
LABUSCHAGNE J