SAFLII Note: Certain 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
KWAZULU-NATAL DIVISION, PIETERMARITZBURG
CASE NO: 3121/23P
In the matter of:
UMGENI WATER PLAINTIFF
and
KHULE GEDEZA PROPERTIES
(PROPRIETARY) LIMITED FIRST DEFENDANT
MDUDUZI MNYANDU SECOND DEFENDANT
SIZWE JOKWENI THIRD RESPONDENT
_____________________________________________________________________
ORDER
_____________________________________________________________________
The following order is granted:
1. Judgment is granted against the first defendant as follows:
(a) Payment of the sum of R4 516 375.10;
(b) Payment of R2 871 706.48;
(c) Interest on the aforesaid sums from date of service of summons to date
of payment at the rate of 10.5% per annum; and
(d) Costs of suit.
2. The plaintiff’s case against the second defendant is dismissed.
3. The relief sought against the third defendant is adjourned sine die.
2
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
Pietersen AJ:
Introduction
[1] The plaintiff instituted action against the defendants for two claims, referred to
as the site establishment claim and the rental claim. The plaintiff averred in its
particulars of claim that, following a tender process, the plaintiff concluded a contract
with NRB Piping Systems (Pty) Ltd (NRB) for the supply and delivery of steel, concrete
and plasticised PVC pipes for the South Coast Phase 2B pipeline and the
Mpophomeni Waste Water Works and for the establishment of a pipe storage yard.
This matter only concerns the South Coast Phase 2B pipeline tender and its p ipe
storage yard.
[2] As part of the plaintiff’s empowerment programme , the tender required the
successful tenderer , NRB, to allocate 35% of the contract amount to contract
participation goal (CPG) sub-contractors approved by the plaintiff. The tender further
required a storage yard to be constructed for purposes of storing pipes after delivery
and the document identified a specific site for this purpose. It further stipulated that the
storage yard was to be constructed by a CPG sub-contractor.
[3] After the plaintiff concluded the contract with NRB, JG Afrik a (Pty) Ltd (JG
Afrika) was appointed as the project engineers and the first defendant was appointed
as the CPG sub-contractor for the purpose of constructing the pipe storage yard.
[4] The plaintiff pleaded that the first defendant concluded three lease agreements
3
with the plaintiff in respect of a pipe storage yard. However, these leases were not for
the original site identified in the tender document but for a different site, referred to in
evidence as ‘Field 1’. It was the plaintiff’s case that the change of site was the result of
fraudulent manipulation on the part of the first and third defendants and sought to hold
the defendants liable for payment of liquidated damages on the basis of a fraudulent
misrepresentation made by the first and third defendants to the plaintiff.
[5] The action was defended by the first and second defendants only. The second
defendant is the sole director and shareholder of the first defendant. The third
defendant, a former employee of the plaintiff, did not enter an appearance to defend
the matter. Whilst the plaintiff during opening argument indicated that it would be
seeking default judgment against the third defendant, it ultimately accepted in closing
argument that there is no proof of service of the summons on the third defendant and it
is therefore not entitled to apply for default judgment against this defendant. The relief
sought against the third defendant will, therefore, be adjourned sine die.
[6] The second defendant appeared in person at the trial. He initial ly sought to
represent the first defendant but after the plaintiff objected on the basis that, in the
absence of exceptional circumstances, a juristic entity can only be represented by a
legal practitioner, the second defendant proceeded to only represent himself.
The evidence
[7] The plaintiff’s first witness was Mr William James Voo rtman. Mr Voortman
testified that he was employed by the plaintiff from 1992 until October 1998 and again
from 2010 until present. Mr Voortman is employed by the plaintiff as a project manager
and held this capacity in 2017 when most of the events in this matter unfolded.
Subsequently, d uring 2020 , Mr Voortman managed the functioning of the project
Subsequently, d uring 2020 , Mr Voortman managed the functioning of the project
manager’s office, which entailed an oversight role over all of the plaintiff’s projects.
[8] Mr Voortman further testified that during 2017, when the tender was
advertised, the third defendant was the plaintiff’s project manager . However, the third
4
defendant abandoned this position in 2018 when he left the plaintiff’s employment
without any notice to the plaintiff.
[9] On 6 June 2017 , the plaintiff addressed an intention to award letter to the
successful tenderer, NRB , to advise that its bid was successful. Importantly, for
present purposes, it was recorded in this letter that the final award of the tender would
be contingent upon, inter alia , a successful CPG negotiation with the plaintiff . Mr
Voortman further testified that the plaintiff usually proceeds by asking bidders to
nominate their CPG partners. In its tender docume nt, NRB duly identified three CPG
partners. However, the first defendant’s name did not appear on this schedule of
proposed CPG sub-contractors.
[10] Mr Voortman testified that the omission of the first defendant’s name from this
schedule of proposed CPG sub-contractors was not necessarily out of the ordinary, as
sub-contractors may become unavailable due to a time lapse between the completion
of the tender document and the commencement of the works or certain sub -
contractors may be eliminated when the plaintiff conducts its due diligence, particularly
due to concerns about fronting.
[11] The tender document specified that:
‘Tenderers are required to achieve at least 35% contract participation goals (CPG) including a
minimum 5% black women participation of the value of goods, services and works paid to one
or more enterprises (CPG partner/s) as agreed with Umgeni Water before contract award.’
Therefore, so Mr Voortman testified, CPG partners are sub -contractors of the
successful tenderer , whilst the only contract concluded by the plaintiff would be
between it and the successful tenderer.
[12] The tender document further specified the following location for a pipe storage
yard for the project:
‘The pipe storage yard for South Coast Phase 2B Pipeline is located in close proximity to the
‘The pipe storage yard for South Coast Phase 2B Pipeline is located in close proximity to the
Park Rynie off ramp from the N2. The pipe yard will also be the most logical area for the sit e
5
establishment. When heading south along the N2 from Amanzimtoti, turn right at the Park
Rynie off ramp. Continue approximately 750m from the offramp and turn right onto the gravel
road. Proceed about 550m along this road. The sit e camp and pipe yard position will be on
your right.’
[13] Mr Voortman testified that he was not involved at the time in identifying this
particular site, as it is usually the contract engineer ’s role. He did not know why this
location was subsequently changed to the new sit e. Mr Voortman further testified
about the lease agreements concluded between the plaintiff and the first defendant.
The first lease agreement was concluded during February 2017 and provided for a
lease of premises in extent 12.5 hectares of land on Portion 354,1[...] P[...] R[...] , ET,
KwaZulu-Natal. The commencement date wa s specified as March 2017 with the
contract to endure for a period of 18 months. The monthly rental was recorded as
R41 670, excluding VAT.
[14] Mr Voortman further referred to a memorandum dated 4 September 2017 ,
which record ed a discu ssion between Mr Lwazi Ndlovu, who was the plaintiff’s
manager for IDMS Contracts and Ms Marsha Philips , who was the plaintiff’s acting
general manager for finance. In terms of this memorandum, it was recorded that the
tenderer’s CPG partners were proposed jointly by the plaintiff and the tenderer and
that the first defendant was appointed as the CPG partner on the basis that it is
currently leasing the land that will be used as a pipe yard.
[15] Mr Voortman was asked to comment on the timeline where a lease agreement
is concluded between the plaintiff and first defendant before the award of the bid . Mr
Voortman testified that it is certainly not normal but con ceded that it can happen in
certain circumstances. He further indicated that the availability of the pipe yard made
logistical sense at the time.
[16] Mr Voortman further testified about a second and third lease agreement
[16] Mr Voortman further testified about a second and third lease agreement
between the plainti ff and the first defendant. The second lease agreement was
concluded on 19 November 2018 and concerns the same leased premises as the first
6
agreement. The agreement commenced on 1 October 2018 for a period of six months
and recorded monthly rental in the sum of R45 837, excluding VAT , as well as a
monthly ‘security services rental ’ in the sum of R72 597 , excluding VAT . The third
lease agreement was concluded on 27 July 2020 , with a commencement date of 1
July 2020 and termination date of 30 June 2021.
[17] Mr Voortman testified that he was also not involved in the conclusion of the
second and third lease agreements.
[18] In an email of 24 June 2020, shortly before the expiry of the second lease
agreement, Mr Voortman raised certain concerns with his colleagues. In particular, Mr
Voortman raised the fact that the land area is listed as 12 .5 hectares but the extent of
the actual pipe yard measured only approximately 2.1 hectares. A property v aluation
by a registered valuer was apparently requested, but never done, and the further lease
agreements were also not vetted by the plaintiff’s legal services.
[19] Mr Voortman further testified about variation orders in terms of this tender. He
explained that to the extent of his knowledge , a variation order was never approved to
justify payment of the first defendant’s claim of R5 033 857.10. Notwithstanding the
lack of a variation order, site establishment proceeded but there was no money left in
the project to pay for the pipes , as the money was used to pay for the first defendant’s
claims. These claims were paid without a variation o rder ever being processed or
submitted for approval, according to Mr Voortman.
[20] During cross -examination, Mr Voortman was questioned about his
qualifications and whether he is registered as an engineer . Mr Voortman indicated that
he is not so registered and that his role as project manager does not require such
registration. In explaining his role in cross -examination, Mr Voortman testi fied that Mr
Parsons of JG Afrik a is the employer ’s agent and he is , in fact , an engineer, duly
Parsons of JG Afrik a is the employer ’s agent and he is , in fact , an engineer, duly
registered. Mr Voortman explained that he designs projects and that neither he nor Ms
Manyoni of the plaintiff is involved in procurement. Mr Voortman was questioned about
7
the plaintiff’s public documents and it was ultimately put to Mr Voortman that the
second defendant, as a businessman, is fully entitled to position his business in order
to be able to benefit from an opportunity such as the present tender. Mr Voortman
agreed with this proposition.
[21] Regarding the variation order, it was put to Mr Voortman that, whilst there does
not seem to be an approved variation orde r, it was a ‘cover -up’ by JG Afrik a, with the
plaintiff acting on bad advice and a bad design of th e project. Mr Voortman did not
comment on this proposition.
[22] The plaintiff’s second witness was Ms Janet Claire Norris. Ms Norris testified
that she is a civil engineer , practising as such with JG Afrika and based in Hilton,
KwaZulu-Natal. She is a director of JG Afrik a and the responsible office manager at
the Hilton office.
[23] Ms Norris testified that she was aware of this particular tender but held no
oversight role. She was also aware that the third defendant was the plaintiff’s project
manager at the time. She has no personal knowledge of any variation orders and
simply commented on the general role of a project manager.
[24] The plaintiff’s third witness was Mr Timothy John Crookes . Mr Crookes testified
that he is a director and a 25% shareholder of Ellingham Estate (Pty) Ltd (Ellingham
Estate). Ellingham Estate is a property owning company , which owns the property
identified in the tender document as the proposed pipe storage site as well as the
property that was subsequently used as the pipe storage site. Mr Crookes indicated
that he knows the second defendant well , having concluded a lease agreement with
the first defendant , represented by the second defendant , in respect of the pipe
storage site.
[25] Mr Crookes made it clear that the lease agreement with the first defendant was
only in respect of a portion of the property, being 1.5 hectares in extent , which was
8
subsequently increased to 2.2 hectares, albeit without permission. It remains that the
lease agreement s concluded between the first defendant and Ellingham Estate only
dealt with a portion of 1.5 hectares. At no stage, according to Mr Crookes, was there a
lease agreement concluded in respect of a portion of 12.5 hectares. Mr Crookes
further emphasised that the rental charged by Ellingham Estate was its going rate at
the time and it would have rented the property to any tenant.
[26] During cross-examination, Mr Crookes indicated that he was never approached
by the plaintiff to lease the property and if the plaintiff had done so in the past , they
would have dealt with Ellingham Estate’s general manager. He agreed that the
company derived a benefit from the lease agreements in the form of rental payments
but also mentioned that the first defendant was in default of its rental payments and fell
in arrears, accumulating to approximately R150 000. The site was accordingly locked
and th e contractor employed to install the pipes, known as Cerimele, ultimately
approached Mr Crookes to have the site unlocked in return for payment of the arrears.
A new lease agreement was then entered into with Cerimele.
[27] The plaintiff’s last witness was Ms Nobuhle Mchiza. Ms Mchiza testified that
she has been employed by the plaintiff since March 2008 in a supervisory position ,
which entails the payment of invoices and keeping records of all payments. Ms Mchiza
took the c ourt through an ‘Excel dump ’ from their system , which showed payments
made to the first defendant over the relevant period. Ms Mchiza ’s evidence was not
seriously challenged in cross-examination. The plaintiff thereupon closed its case.
[28] The second defendant presented only his own evidence. He testified that he
studied BSc Agriculture and Microbiology and that he worked for, among others, a
local municipality in project management and he also ventured into national projects.
local municipality in project management and he also ventured into national projects.
His intention was to undertake property development but he subsequently went into
construction. He is familiar with the South Coast area and approached the plaintiff to
make a proposal when he anticipated the commencement of this project. He
subsequently reached an agreement with the plaintiff during a meeting held at
9
Pinetown and he was told that the plaintiff would do a site visit with an engineer for
purposes of assessing the viability of the proposed pipe yard.
[29] After the site visit by the engineer, Mr Parsons of J G Afrik a, Mr Parsons
indicated that he would proceed to prepare a drawi ng. This was done and the first
defendant proceeded to price the project and was appointed by the contractor.
[30] The second defendant further indicated that he recalled only one project
meeting of which minutes were circulated but no other meetings took place. He
emphasised that the third defendant was introduced to him after he had already met
with the land owner, Ellingham Estate. He explained this by saying that he is well
placed in the general South Coast area and he had speculated many times and can
identify an opportunity when it is arising. According to the second defendant, there was
nothing untoward about his meeting wi th Ellingham Estate prior to the first defendant
being awarded any contract by the plaintiff or the contractor.
[31] The second defendant further testified that there was no proper management
of the project after the project manager absconded and he suspected that there had
been collusion between contractors and CPGs at the time , which is why the plaintiff is
now pursuing him and his company, as he was an outsider who disrupted the collusion
between other parties. He further blamed the plaintiff for the first defendant’s default in
rental payable to Ellingham Estate , as he contends that the plaintiff did not effect due
and proper payment of its rental to the first defendant. He furt her testified that he was
of the intention to develop a motor sport arena on this particular site , and, therefore, if
no agreement were to be concluded with this particular contractor, there were other
plans in place for the development of this site.
[32] Under cross-examination, the second defendant agreed that he signed a lease
[32] Under cross-examination, the second defendant agreed that he signed a lease
with Ellingham Estate before the tender was even identified by the plaintiff and that the
second defendant, on behalf of the first defendant, concluded a lease agreement with
the plaintiff before the lease agreement was concluded with the land owner. He further
10
explained that the site was suitable for the construction of a pipe yard based on a
visual assessment. It was only established later after a Geotech revealed that more
preparation was anticipated for the pipe yard to be properly established.
[33] The second defendant also agreed that he is familiar with supply chain
management procedures , as he was deputy municipal manager of the Ugu
Municipality, during which time he was also chair of the municipal bids specification
committee. The second defendant testified that it did not trouble him whether the
plaintiff followed the necessary p rocedures and he did not experience anything being
wrong, as the plaintiff could have followed the proper process without him knowing.
[34] The second defendant agreed that he should have waited for an agreement to
be signed before he approached the plaintiff for a lease agreement. However, the
second defendant indicated that he was confident that he would be able to obtain a
lease agreement with Ellingham Estate. The second defendant also conceded that the
first defendant would have been unable to comply with its lease obligations towards
the plaintiff if suitable land were not obtained. He also conceded that the first
defendant should on ly have charged rental from when the plaintiff actually occupied
the site. The second defendant agreed that as the sole director and shareholder of the
first defendant, he was its controlling mind.
[35] The second defendant further agreed in cross -examination that he is aware of
the procedure when an organ of state wants to undertake a project. He also agreed
that the tender document contained a pipe storage yard , which was different from the
pipe storage yard ultimately used. However, the second defendant testified that he
was not privy to the internal procedures of the plaintiff.
[36] The second defendant further conceded in cross-examination that in terms of all
[36] The second defendant further conceded in cross-examination that in terms of all
three lease agreements, the plaintiff was either to carry out the site rehabilitation or it
was to be carried out at the plaintiff’s expense.
11
[37] The second defendant was questioned about the first defendant’s direct
contract with the plaintiff even though it was appointed as a CPG subcontractor. The
second defendant made it clear that he could not comment on any internal
communication or decisions of the plaintiff and that he was unaware of anything
untoward which may have happened which resulted in the first defendant ’s
appointment. He explained that he took a risk when he concluded the lease agreement
in respect of Field 1 prior to any contract with the land owner or the contractor but that
it is necessary in his business ventures to take risks of this nature. The second
defendant agreed that the first defendant would have been the beneficiary of any
dealings which resulted in the appointment of the first defendant but emphasised that
he is not privy to the internal discussions of the plaintiff.
Plaintiff’s claims against the first defendant
[38] In the absence of an appearance before me at the trial on behalf of the first
defendant, the plaintiff is entitled to default judgment against this defendant in terms of
Uniform rule 39(1). The plaintiff’s claims against the first defendant are for liquidated
amounts and a consideration of the above evidence is therefore not necessary for
purposes of judgment against the first defendant.
[39] The plaintiff limited its site establishment claim against the first defendant to
R4 516 375.10 and thus sought judgment against the second defendant in the same
amount. In respect of the rental claim, the plaintiff took into account that it would in any
event have had to lease a storage yard for its pipes and Mr Crookes, director of
Ellingham Estate, indicated in his evidence that he would have been prepared to let
Field 1 to the plaintiff at the same rental. The total rental payable in terms of the t wo
leases was the sum of R856 000 and this sum must therefore be deducted from the
rental claim, which reduced the plaintiff’s claim to the sum of R2 872 206. In its draft
rental claim, which reduced the plaintiff’s claim to the sum of R2 872 206. In its draft
order, the plaintiff seeks judgment for a further slightly reduced sum of R2 871 706.48.
Default judgment for this claim will therefore be granted against the first defendant in
the amount of R2 871 706.48.
12
Plaintiff’s claim against the second defendant
[40] In its particulars of claim , the plaintiff only sought judgment against the second
defendant in respect of the site establishment claim. The limited basis upon which the
plaintiff sought to hold the second defendant liable was pleaded as follows in
paragraph 40 of the particulars of claim:
‘40. The third defendant worked corruptly and in concert with the first defendant and the
second defendant to secure that the first defendant was appointed CPG sub -contractor; and
thereafter.
40.1 third defendant took steps took steps to achieve an outcome where first defendant’s
site was selected; and
40.2 first defendant received payment of far more than the figures set out in the bill of
quantities or annexure intending thereby to secure an undue benefit for the first
defendant at the cost and to the prejudice of the plaintiff.’
[41] On the second day of trial , I raised with the plaintiff’s counsel, Mr Pammenter
SC, who appeared with Ms Mbonane, the poorly pleaded case against the second
defendant and expressed the prima facie view that there does not seem to be a proper
cause of action pleaded against this defendant. It must be said that Mr Pammenter
and Ms Mbonane were not the author s of the partic ulars of claim . Mr Pammenter
agreed that the case against the second defendant could have been better pleaded
but indicated that he did not wish to amend at this late stage and would rather continue
with the trial.
[42] In closing argument , the plaintiff submitted that the following issues arise in
regard to the claim against the second defendant:
(a) Did he act corruptly in concert with the first and third defendants to secure the
first defendant’s appointment as the CPG sub-contractor?
(b) If so, did the first defendant, as a consequence , receive payment of far more
than the figure set out in the bill of quantities?
(c) Did this amount to an undue benefit to the first defendant at the cost and to the
(c) Did this amount to an undue benefit to the first defendant at the cost and to the
prejudice of the plaintiff?
13
[43] Furthermore, in support of its case against the second defendant, the plaintiff
submitted the following:
(a) The construction of the pipe yard was to be done by a CPG sub -contractor.
Tenderers had to submit a list of their proposed CPG sub -contractors. NRB, however,
did not include the first defendant as such a subcontractor.
(b) The CPG sub-contractors had to be agreed to by the plaintiff before the contract
award.
(c) The third defendant was the plaintiff’s appointed project manager for the
project. He and the second defendant knew each other and had previously worked at
the same time at the Ugu District Municipality.
(d) In 2016 , Ms Mbali Kubheka and the third defendant worked together at the
plaintiff.
(e) The second defendant contend ed that he was aware of the intention to lay the
South Coast Phase 2B pipeline and that he saw an opportunity and started looking
around for possible pipe storage yards.
(f) Out of the blue, Ms Kubheka contacted the second defendant regarding the
pipe storage yard.
(g) The second defendant sent an email to Ms Kubheka , wherein he suggested
that Field 1 be considered as a location for such a pipe yard.
(h) On 21 April 2016, Ms Kubheka sent an email to the first defendant , indicating
that the ‘surveyor’ might be able to come through on Monday , 25 April 2016 ‘to finish
up the process’.
(i) In his evidence, the second defendant stated that he had, in fact, consulted with
the engineer around about this time and suggested that Field 1 should be used as the
storage yard.
(j) The engineer did not accept this suggestion because the tender document
(prepared by the engineers), provided that the storage yard should be established on
the original site.
(k) Notwithstanding, on 1 February 2017, a lease was concluded between the first
defendant and the plaintiff for the lease of Field 1, which commenced ‘on March 2017’.
14
(l) Field 1 was owned by Ellingham Estate. However, the very first approach made
by or on behalf of the first defendant to Ellingham Estate to lease the site, was on 16
March 2017, and a lease for Field 1 was only signed in August 2017.
(m) Accordingly, at the time the lease between the plaintiff and first defendant was
signed, the first defendant was not able to give the plaintiff vacant possession of Field
1. Notwithstanding this, the first defendant demanded and was paid rental with effect
from March 2017.
(n) In an internal memorandum from Mr Lwazi Ndlovo to Ms Marshall Philips, the
appointment of the first defendant as a CPG partner was motivated on the basis that it
was currently leasing Field 1. The memorandum is dated 4 September 2017.
(o) In the addendum to CPG negotiations, the value of the site establishment of the
storage yard was reflected as being R450 000 and that this work was to be carried out
by the first defendant.
(p) The amount of R450 000 was a provisional sum included in the original bill of
quantities for the site establishment of a storage yard , as reflected in the tender
document.
(q) At the site handover meeting on 15 September 2017, JG Afrika was informed
for the first time that the location of the storage yard had been changed to Field 1 and ,
as a consequence, a site survey had to be commissioned and the site layout had to be
designed afresh.
(r) At some stage prior to 16 October 2016, the first defendant submitted a
quotation for the establishment costs of the pipe yard and F ield 1 in an amount of R5
033 857.10 , plus a 15% contractor’s markup. This quote was forwarded by the
contractor to the plaintiff.
(s) On 16 October 2016, the third d efendant requested Mr Parsons of JG Afrika to
comment on this quotation.
(t) A string of emails followed between Mr Parsons and the third defendant ,
wherein Mr Parsons pointed out that JG Afrika’s estimate for the establishment costs
wherein Mr Parsons pointed out that JG Afrika’s estimate for the establishment costs
was R2 232 130.50. However, the third defendant advised that the first defendant was
to do site rehabilitation at the end of the contract and this probably accounted for the
difference in prices.
15
(u) Mr Parsons accepted this explanation and undertook to prepare a variation
order in order to amend the bill of quantities.
(v) The statement by the third defendant that the first defendant was to underta ke
site rehabilitation was not true . The three leases concluded between the plaint iff and
the first defendant indicated that the site rehabilitation was either to be carried out by
the plaintiff or at the plaintiff’s expense.
(w) Although the first defendant was appointed as a CPG sub -contractor, it, in fact,
contracted directly with the plaintiff for the lease of Field 1.
(x) Notwithstanding this fact, no procurement process took place as envisaged in
s 217 of the Constitution or s 51(1) (a)(iii) of the Public Finance Management Act 1 of
1999, or in terms of the plaintiff’s own Supply Chain Management Policy.
[44] It has been held in Courtney-Clarke v Bassingthwaighte1 that a party wanting to
rely on fraud must not only plead it but must also prove it clearly and distinctly. Whilst
the onus is the ordinary civil onus, fraud is not easily inferred.2
[45] The essential allegations for a claim based on fraud are well known and are as
follows:3
(a) A representation by the representor to the representee;4
(b) The mental element of fraud in the sense that the representor knew the
representation to be false;5
(c) That the representation induced the representee to act in response to it;6 and
(d) Damages suffered by the representee.7
1 Courtney-Clarke v Bassingthwaighte 1991 (1) SA 684 (NM) at 689F-G.
2 Gilbey Distillers & Vintners (Pty) Ltd and Others v Morris NO and Another 1990 (2) SA 217 (SE) at
226A.
3 Geary & Son (Pty) Ltd v Gove 1964 (1) SA 434 (A) at 441C -D. See also generally L T C Harms
Amler’s Pleadings 10 ed (2024) at 204-205.
4 Feinstein v Niggli and Another 1981 (2) SA 684 (A).
5 Breedt v Elsie Motors (Edms) Bpk 1963 (3) SA 525 (A) at 529G-H.
6 Hulett and Others v Hulett 1992 (4) SA 291 (A) at 310H-311C.
6 Hulett and Others v Hulett 1992 (4) SA 291 (A) at 310H-311C.
7 Truth and Reconciliation Commission v Mpumlwana [2001] 3 All SA 58 (CK) at 66.
16
[46] The plaintiff pleaded a case of ‘corruption’ against the second defendant.
Corruption is a crime and is regulated by the Prevention and Combating of Corrupt
Activities Act 12 of 2004. The elements are set out in s 3 as follows:
‘3. General offence of corruption.—
Any person who, directly or indirectly—
(a) accepts or agrees or offers to accept any gratification from any other person, whether
for the benefit of himself or herself or for the benefit of another person; or
(b) gives or agrees or offers to give to any other person any gratification, whether for the
benefit of that other person or for the benefit of another person,
in order to act, personally or by influencing another person so to act, in a manner—
(i) that amounts to the—
(aa) illegal, dishonest, unauthorised, incomplete, or biased; or
(bb) misuse or selling of information or material acquired in the course of the,
exercise, carrying out or performance of any powers, duties or functions arising out of a
constitutional, statutory, contractual or any other legal obligation;
(ii) that amounts to—
(aa) the abuse of a position of authority;
(bb) a breach of trust; or
(cc) the violation of a legal duty or a set of rules;
(iii) designed to achieve an unjustified result; or
(iv) that amounts to any other unauthorised or improper inducement to do or not to
do anything,
is guilty of the offence of corruption.’
[47] The plaintiff has failed to plead how the crime of corruption can be a cause of
action in a civil claim for damages and I am not aware of any such cause of action. In
Delta Property Fund Limited v Nomvete and Others ,8 the company sued its directors
for losses incurred due to their conduct, which included corruption. However, this
cause of action was not based on corruption but on s 77 of the Companies Act 71 of
2008 (the Companies Act) , which deals with the liability of directors and prescribed
8 Delta Property Fund Limited v Nomvete and Others [2025] 4 All SA 422 (GJ).
17
officers of a company. This case can therefore be distinguished from the present facts.
The plaintiff has also not pleaded a cause of action for commercial bribery.9
[48] It is immediately apparent from the above that the plaintiff has not remotely
succeeded in pleading a claim based on fraud or corruption (should such a cause of
action exist in our law) against the second defendant. The particulars of claim contain
no allegations regarding any representation by the second defendant. It is not alleged
that the second defendant acted with the required mental element, if a representation
was made by him, and that this representation caused the plaintiff to suffer damages.
[49] It needs to be considered that the first defendant is a juristic person with
separate legal personality . The plaintiff has not pleaded any allegations in support of
an order for piercing the corporate veil or to otherwise hold the second defendant
liable as director of the first defendant. I am mindful of the fact that the court has no
general discretion ‘to disregard a company’s separate legal personality whenever it
considers it just to do so ’.10 On the contrary, ‘limited liability is at the very heart of the
reasons for the existence of the company and it cannot be interpreted away without
the most compelling of indications’.11
[50] The plaintiff thus failed to plead a case in support of the b ald statement that the
second defendant ‘worked corruptly and in concert’ with the other defendants. The
plaintiff’s argument that the second defendant was the controlling mind of the first
defendant and thus clearly a party to the corruption is insufficient to found a cause of
action based on fraud or to support an order for piercing the corporate veil.
[51] The plaintiff has therefore failed to establish a claim against the second
defendant.
9 See Extel Industrial (Pty) Ltd and Another v Crown Mills (Pty) Ltd 1999 (2) SA 719 (SCA) at 724D-F for
the elements of commercial bribery.
the elements of commercial bribery.
10 Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1995 (4) SA 790 (A) at 803A-
B; Venator Africa (Pty) Ltd v Watts and Another [2024] ZASCA 60; 2024 (4) SA 539 (SCA) para 24.
11 M P Larkin ‘ Regarding judicial disregarding of the company's separate identity’ (1989) 1(3) SA Merc
LJ 277 at 297 to 298.
18
Order
[52] I accordingly grant the following order:
1. Judgment is granted against the first defendant as follows:
(a) Payment of the sum of R4 516 375.10;
(b) Payment of R2 871 706.48;
(c) Interest on the aforesaid sums from date of service of summons to date
of payment at the rate of 10.5% per annum; and
(d) Costs of suit.
2. The plaintiff’s case against the second defendant is dismissed.
3. The relief sought against the third defendant is adjourned sine die.
_____________________
PIETERSEN AJ
19
Date of hearing: 4 – 6 May 2026
Date of Judgment: 29 May 2026
APPEARANCES
Plaintiff: Mr CJ Pammenter SC
Ms MA Mbonane
Instructed by: XABA ATTORNEYS
37A Roberts Road
Clarendon
Pietermaritzburg
E-mail: mail@xabainc.com
(Ref: D Xaba/S Nene/pnn/01)
Second Defendant: Mr M Mnyandu (in person)
15 Kerhode Place
Glen Ashley
Durban North
E-mail: mnyandu@kgpro.co.za