IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case no: 24139/2024
In the matter between:
QNET NETWORKING SOLUTIONS (PTY) LTD Applicant
and
D & E STEEL (PTY) LTD Respondent
JUDGMENT DELIVERED ELECTRONICALLY ON 2 8 MAY 2025
MANGCU -LOCKWOOD, J
A. INTRODUCTION
[1] This is an application for specific performance in terms of an alleged
agreement between the applicant and the respondent , in which the applicant seeks
delivery of 208 units of sections of steel described as 200 x100 IPE, alternatively an
order for cancellation and damages.
[2] The application is opposed by the respondent, and as a point in limine it
challenges the locus standi of the applicant . The respondent point s out that , whilst
the applicant ’s case is based on a partly verbal and partly written agreement , it has
attached as proof an invoice dated 2 February 2023 , which was issued , not to the
applicant but to Mr Rahim , the deponent to the founding affidavit , in his personal
capacity .
[3] It is also stated in the answering affidavit that at all material times the
respondent's staff members were under the impression that they were dealing with
Mr Rahim in his personal capacity and were unaware that he purported to act on
behalf of the applicant . The first time it came to their notice that he purported to act
on behalf of the applicant was when they received a letter of demand from the
applicant ’s attorneys of record , where it was claimed that the attorneys represented
Mr Rahim and the applicant. As a result, says the respondent, there could not have
been a valid agreement between the applicant and the respondent , and the applicant
lacks locus standi to brin g these pro ceedings.
[4] In reply to the point in limine , the applicant states that he has been conducting
business with the respondent’s sales representative , Mr Herman Krause , for the past
three years and Mr Krause was aware that he, Mr Rahim, represents the applicant.
Furthermore , that Mr Kraus e would know this from his previous employment where
he dealt with Mr Rahim . The applicant also states that on ‘the day in question ’ - it is
not clear when - he informed Mr K rause that he required the steel for a project of the
applicant .
[5] There are some difficulties with the manner in which the applicant has chosen
to deal with this issue. Firstly, the averments made in the paragraph immediately
above appear for the first time in the replying affidavit. It is trite that that a part y is
required to make out its case in its founding papers. Secondly , given the averment in
the answering affidavit that Mr Rahim made no me ntion that he represented the
applicant an d that this was only discovered upon receipt of the letter of demand, the
issue is self -evidently in dispute . And the applicant’s averment leaves much to be
desired because it is vague. Mr Rahim states it was ‘on the day in question ’ that he
advised Mr Krause that he required the steel for the applicant. Given that the
founding papers allege that there were numerous engagements between Mr Rah im
and Mr Kraus e between 2 February 2023 and 7 February 2023, I would have
expected the applicant to deal with this issue with greater particularity. It effectively
amounts to a b ald averment , which as I have indicated , is made in reply. At the very
least, this is a dispute that cannot be resolved on the papers .
[6] One abiding question that arises from the version prof fered in the replying
affidavit is , if Mr Krause previously dealt with Mr Rahim in his capacity as
representative of the applicant, surely he would have known to issue the invoice to
the applicant and not to Mr Rahim. And the applicant has not gone as far as to claim
that the invoice was erroneously issued in his name instead of his compan y’s name .
Although the applicant’s counsel attempted to advance such an argument in his
heads of argument, it is not supported by any evidence.
[7] As for the allegation made in the replying affidavit that Mr Rahim has dealt
with Mr Krause for the past three years , I note that the replying affidavit was deposed
on 18 March 2025, some two years since the incident , so the majority of the three
years would have been with Mr Krause working at the respondent , after the events in
this matter .
[8] The most significant problem facing the applicant is the fact that the only
document relied upon for its contention that there was an agreement in respect of
which it seeks specific performance is the invoice dated 2 February 2023, which, as I
have adverted was made out, not to the applicant but to Mr Rahim . There is no
attempt, even in the replying affidavit, to explain why he was happy to pay make
payment on an invoice which is addressed to himself if it was indeed supposed to be
addressed to the applicant. There has never been an explanation that, for example,
the invoice was issued to him erroneously (this is stated for the first time in the heads
of argument) or that he told Mr Krause to issue it in his name.
[9] In his heads of argument , the applicant’s counsel sought to deal with this
issue by referring to legal authority that deals with authorization for a person to bring
an application on behalf of a company. That however is not the issue. There is no
dispute with the fact that Mr Rahim deposes to the papers on behalf o f the applicant
by virtue of his directorship and co -ownership of the applicant . Nor is there an issue
raised with the certificate from the Companies and Intellectual Property Commission
(CIPC) attached to his affidavit indicating such directorship.
[10] The issue is that it has not been established that the applicant was a party to
the agreement . As the applicant correctly states, there is not a single direct mention
of the applicant in the papers, save for the letters of demand preceding these
proceedings fr om the attorneys who themselves stated that they represented both
the applicant and Mr Rahim. And Mr Rahim is not cited as a party to these
proceedings in his personal capacity.
[11] The clearest example of the problem is that there is no description of the
applicant in the papers , as one would normally expect at the start of the founding
affidavit . Instead, there is a description of Mr Rahim. The Court remains in the dark
regarding the nature of, or any other description of the applicant . The affidavit is
equally silent regarding the attitude of its co-director who is mentioned in the CIPC
document . The remainder of the founding affidavit follows suit , referring consistently
to Mr Rahim as the contracting party who also compl ied with the terms of sale.
[12] Notably, it is stated as follows at paragraph 5 of the founding affidavit:
“On or about 2 February 2023, at Kuilsriver, the respondent duly
represented by its salesman, Herman Krause (“Herman”) and I
concluded a partly oral and partly written agreement at the
respondent’s business premises in terms of which the Respondent
issues a pro forma invoice for 208 units of 200 by 100 IPE Sections.
[13] As the respondent ’s counsel correctly states, the drafter of this paragraph
clearl y appreciated the need to accurately describe the parties to the agreement, and
was content in describing the applicant as “I”, referring to the deponent, Mr Rahim.
This pattern of the deponent referri ng to himself as the other party to the agreement,
can be found throughout the founding affidavit. It has been stated that, when
determining an objection taken in limine as to the locus standi of a party, the issue
must be dealt with on the assumption that all the allegations of fact relied upon by
that party are true.1 On application of that assumption, the picture emerg ing from the
11 See Erasmus D1-175 et seq .
founding affidavit which consists , in the main , of allegations concerning Mr Rahim in
his personal capacity, support s the respondent ’s case that the agreement was not in
the name of the applicant.
[14] In argument, Mr Garces referr ed to three instances in the founding affidavit
where reference is made to the business of the applicant . The f irst is in relation to
the alleged prejudicial effect on Mr Rahim and ‘my business ’ at paragraph 34 . This,
however, does not establish locus standi because the averment concerns events
which allegedly occurred after conclusion of the agreement.
[15] The second mention of the applicant referred to occurs at paragraph 42.1
under the heading “Relief Sought” , where it is submitted that “the af oregoing facts
unequiv ocally demonstrate the fact of the agreement concluded between the
respondent and the applicant ”. On its express wording, it presupposes that the
necessary facts for the conclusion drawn in this paragraph would have been laid out
before the paragraph in question. It does not itself establish locus stand i.
[16] The third reference relied upon is an e -mail from Mr Rahim dated 9 February
2023 and headed “Qnet Steel Order”. This e -mail was sent to Mr Krause around the
time of incident, and is the closest indication that the steel order may have been
made on behalf of the applicant. However , it does not cure the defect contained in
the papers because , the fact that the order was made on behalf of the applicant is
not mentioned in the papers of the applicant. In fact, whilst the content of email was
reproduced in the founding affidavit, the heading now relied upon , which is contained
an email attachment, was not even mentioned in the affidavit. It is trite that a party
may not rely on the contents of an attachment without adducing evidence in support
thereof. It is not for a court to make out a case on behalf of a party by reference to
attachments to its affidavit .
[17] There is otherwise not a sin gle mention of QNet Network ing Solutions in the
applicant ’s papers relatin g to the contract that is the subject of this case. As the
respondent ’s counsel argued, it is possible Mr Rahim owns other businesses, which
may well be the entit ies on whose behalf he entered into the alleged agreement with
the respondent.
[18] Although this issue may, at first seem to be elevating form over substance, it
is nonetheless important. The question of whether a litigant’s interest, in this case
the applicant, is sufficient to clothe it with standing must be determined in the light of
the factual and legal context.2 In this case, the applicant has brought proceedings to
execute an alleged agreement by means of an application. And the only document it
uses in support of the existence of an agreement is the invoice, which does not
contain the name of the applicant. It is trite that a company is a legal entity distinct
from its shareholders, and has rights and liabilities of its own, separate from those of
its shareholders .
[19] The general rule of our law is that a person or entity which claims relief from a
court in respect of any matter must establish that it has a direct interest in that matter
in order to acquire the necessary locus standi to seek relief.3 No person, including an
entity, can sue in respect of a wrongful act, unless it constitutes a breach of a duty
owed t o that entity by the wrongdoer, or unless it causes that entity some damage in
law, which is also referred to as “some grievance special to [it]self”4. A party alleging
a contract must allege and prove the terms of the agreement on which he or she
seeks to rely.5
[20] The effect of the all the above is that the issue of whether the applicant was a
party to the agreement remains in dispute . In application proceedings, where a
dispute of fact has emerged and is genuine and far -reaching and the probabilities
are sufficiently evenly balanced, referral to oral evidence or trial, as the case may be,
will generally be appropria te.6 Uniform Rule 6(5)(g) provide s as follows:
“Where an application cannot properly be decided on affidavit the court
may dismiss the application or make such order as it deems fit with a
2 Firm-O-.Seal CC v Prinsloo & Van Eeden Inc and Another (483/22) [2023] ZASCA 107; 2024 (6) SA
52 (SCA) (27 June 2023) para 6; See also Erasmus D1 -187. JDJ Properties CC and Another v
Umngeni Local Municipality and Another (873/11) [2012] ZASCA 186; [2013] 1 All SA 306 (SCA);
2013 (2) SA 395 (SCA) (29 November 2012) para 27.
3 Dalrymple & others v Colonial Treasurer 1910 TS 372 at 379.
4 Op cit.
5 Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266 (SCA) at para 32.
6 Mamadi and Another v Premier of Limpopo Province and Others [2022] ZACC 26 para [44].
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the a foregoing, it may direct that oral
evidence he heard on specified issues with a view to resolving any
dispute of fact and to that end may order any deponent to appear
personally or grant leave for such deponen t or any other person to be
subpoenaed to appear and be examined and cross -examined as a
witness or it may refer the matter to trial with appropriate directions as
to pleadings or definition of issues, or otherwise. ”
[21] The Rule allows a court faced with a dispute of fact that cannot be decided on
the papers to follow anyone of three alternatives : it may dismiss the application, or
direct that oral evidence be heard on specified issues, or refer the matter to trial. A
court is not restri cted to the listed remedies and may make any order it deems fit and
which is directed at ensuring a just and expeditious decision.
[22] Given the discussion earlier, I am of the view that the issue of the locus standi
of the applicant is a material dispute of fact. On the face of the pleadings, it appears
that the applicant did not appreciate that this issue might amount to a material
dispute of fact, and appears to have taken it as ‘fact’ that Mr Rahim, being a director,
was sufficiently representative of the applicant . On the other hand, the respo ndent
admit s to receiving communication before the launch of these proceedings in which
the applicant is ment ioned, and thus the applicant’s involvement in these
proceedings is not a surprise . Neither is it disputed that Mr Rahim has at all times
dealt with the respondent, including by making payment. Had he been cited in his
personal capacity, the issue might well not have arisen . It is possible that the issue is
one of bad pleading .
[23] While it is so that an application for a referral to oral evidence or trial, where
warranted, should be applied for by a litigant as soon as the affidavits have been
exchanged and not after argument on the merits7, that is not an inflexible rule8. And
courts are loathe to deal with matters on a piecemeal basis, or to dispose of matters
based on points taken in limine . The issue to be determined is simple and discrete. I
7 Lombaard v Droprop 2010 (5) SA 1 (SCA) at para [53].
8 Kalil v Decotex (Pty) Ltd and Another 1998 (1) SA 943 (A) at 981 D -F.
am therefore of the considered view that referring the matter to oral evidence would
ensure a just and expeditio us decision.
ORDER
[24] In the result, the following order is made:
1. The issue concerning the appli cant’s locus standi is referred to oral
evidence.
2. Costs are reserved for later determination.
_________________________
N. MANGCU -LOCKWOOD
Judge of the High Court
APPEARANCES:
For the applicant : Adv M . Garces
Instructed by : Parker Attorneys
I. Hamid
For the respondent : Adv A. Walters
Instructed by : Hickman van Eeden Phillips Inc.
A. Phillips