IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 2025-037238
In the matter between:
IT MASTER (PTY) LTD Applicant
(Registration Number: 2015/443454/07)
and
NATIONAL EDUCATION GROUP HOLDINGS (PTY) LTD First Respondent
(Registration Number: 2015/244986/07)
BHEKIZIZWE GROUP HOLDINGS (PTY) LTD Second Respondent
(Registration Number: 2017/030749/07)
EX TEMPORE JUDGMENT
MARITZ AJ
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
13 MAY 2026 SM MARITZ AJ
DATE SIGNATURE
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A. INTRODUCTION
[1] This judgment was delivered ex tempore on 13 May 2026. The Applicant subsequently
requested reasons, as it is entitled to do. A court that has delivered an ex tempore
judgment is entitled to supplement and elaborate upon the reasons given at the time of
delivery, provided that the substance of the judgment and the order made are not
altered: S v Wells 1990 (1) SA 816 (A); Firestone SA (Pty) Ltd v Genticuro AG 1977 (4)
SA 298 (A) at 304A-B. The order granted on 13 May 2026 remains unchanged. What
follows is a supplemented version of the reasons, which elaborates and clarifies the
reasoning without altering the substance of the judgment as delivered.
B. BACKGROUND
[2] This matter came before the Court on 13 May 2026 on the Applicant's application for
leave to withdraw the application in terms of Rule 41 of the Uniform Rules of Court.
The application that was sought to be withdrawn was an opposed application to
compel, in which the Applicant sought to compel the Respondents to furnish nine
categories of employee-related documentation arising from a tri-party Student
Education Agreement concluded on 1 October 2019. Accordingly, the Court will only
deal with the application for leave to withdraw the application and the issue of costs.
[3] The commercial context is important and provides the backdrop against which the
withdrawal and the associated costs dispute must be understood. The tri-party
Agreement was concluded for the implementation of an Employment Tax Incentive Act
26 of 2013 ('ETI Act') training programme. Under the Agreement, the roles of the
parties were allocated as follows: the Applicant was the employer and funder of the
programme; the First Respondent was the manager responsible for administering the
payroll, loading learners onto the system, and channelling the Applicant's payme·nts to
the Second Respondent; and the Second Respondent was the educator, responsible
for 100% of the training delivery. Critically, the Second Respondent was also the
for 100% of the training delivery. Critically, the Second Respondent was also the
originating source of all the compliance documentation generated under the
programme - including enrolment forms, attendance registers, SETA quarterly
assessments, service agreements, unemployment declarations, and related records.
[4] In May 2023, SARS notified the Applicant that it had been selected for a PAYE and
ETI audit covering the tax years March 2018 to February 2022. The audit revealed that
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a substantial portion of the supporting material required by SARS resided with the
Respondents. Despite repeated written demands from November 2024 onwards,
complete and compliant documentation was not forthcoming. On 30 January 2025,
SARS issued audit findings reflecting a preliminary tax liability of approximately R6
million against the Applicant. On 31 January 2025, SARS issued a Notice of
Finalisation of Audit. The Applicant's Tax Compliance Status was revoked.
[5] The application to compel was launched by Notice of Motion on 17 March 2025. The
First Respondent filed its answering affidavit on 7 May 2025. The Second Respondent
filed its opposing affidavit on 29 May 2025. The Applicant thereafter brought a
condonation application for the late filing of its replying affidavit, which was delivered
only on 11 March 2026 - some eight months after it fell due.
[6] When the matter was called on 13 May 2026, the Applicant's Counsel informed the
Court that the Applicant sought to withdraw the application. The Applicant tendered
the Respondents' costs, but only up to the date of filing of their respective answering
affidavits - being 7 May 2025 in respect of the First Respondent and 29 May 2025 in
respect of the Second Respondent. Both Respondents opposed the limited tender and
sought their full costs, including the costs of the condonation application, on the
attorney-and-client scale.
C. WITHDRAWAL AND THE APPLICABLE LEGAL PRINCIPLES
[7] The law governing the withdrawal of proceedings is settled. Once an opposing affidavit
has been filed, a party may not unilaterally withdraw without the consent of the other
parties or the leave of the court: Rule 41 (1) of the Uniform Rules of Court. A court will
not, however, compel a litigant to proceed with litigation against its will - the
commentary to Rule 41 confirms this, and the principle is well established in practice.
See: Levy v Levy 1991 (3) SA 614 (A) at 6208. Leave to withdraw is accordingly
granted.
See: Levy v Levy 1991 (3) SA 614 (A) at 6208. Leave to withdraw is accordingly
granted.
[8] The withdrawal does not, however, extinguish the Respondents' entitlement to their
wasted costs. The general rule is that a withdrawing party bears the costs of the
other party by reason of the withdrawal: Germishuys v Douglas Besproeiingsraad
1973 (3) SA 299 (N). The dispute before me is therefore not whether the Respondents
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are entitled to costs, but rather the scale of those costs and the extent of the costs to
be awarded.
[9] The Applicant's tender - limited to costs incurred up to the dates of the respective
answering affidavits - is not acceptable. The withdrawal was effected on 13 May
2026, on the eve of the hearing. By that stage, both Respondents had incurred the full
costs of the litigation, including the costs of the condonation application, the briefing of
Counsel, the preparation of heads of argument, and attendance at the hearing. A
tender that limits the Respondents' costs to the date of their answering affidavits would
leave them uncompensated for the most substantial portion of their costs - those
incurred in preparation for and attendance at the hearing itself. The tender is
accordingly rejected.
D. COSTS: THE FIRST RESPONDENT
[10) Insofar as the First Respondent is concerned, the Court is satisfied that the party-and
party scale is appropriate. The application against the First Respondent was not
without foundation. The First Respondent was the manager under the tri-party
Agreement and was primarily responsible for administering and making available to
the Applicant the documentation generated by the Second Respondent. It was the
natural and obvious primary target of the application to compel.
[11) The First Respondent's own conduct contributed to the necessity for the litigation. Its
response to the Applicant's November 2024 demands acknowledged possession of
documentation for the period October 2019 to July 2020 only, and it failed to comply
with the demand letter of 23 December 2024 or with the extended deadline of 17
January 2025. Furthermore, the First Respondent's defence - that it provided the
Applicant with all documents in its possession but could not provide certain categories
because the Second Respondent had failed to furnish them - was internally
contradictory with the Second Respondent's version and gave the Applicant
reasonable grounds to persist with the application.
reasonable grounds to persist with the application.
[ 12) In add it ion, the Court notes that it was the First Respondent itself that previously
launched an application under Case No. 2022-058222 to compel the Second
Respondent to produce the very same documentation - and thereafter withdrew that
application with a tender of the Second Respondent's wasted costs. The First
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Respondent's current assertion that the application against it lacked merit from
inception sits uncomfortably with its own prior conduct in seeking to compel the same
documentation from the Second Respondent.
[1 3] Attorney-and-client costs are reserved for cases where the conduct of the paying party
has been unreasonable, vexatious or dishonest. The Applicant's conduct in bringing
and maintaining the application against the First Respondent was not unreasonable,
vexatious or in bad faith. The application was commercially justified, grounded in a
legitimate contractual and statutory entitlement, and supported by a SARS audit
finding of approximately R6 million. The attorney-and-client scale is accordingly not
warranted in respect of the First Respondent.
E. COSTS: THE SECOND RESPONDENT
[14] The position of the Second Respondent requires more careful consideration. The
Second Respondent seeks costs on the attorney-and-client scale. However, on a
proper analysis of the facts and the law, the Court is not persuaded that the Second
Respondent is entitled to that higher scale. The Court's reasons are as follows:
The Second Respondent as originating source of the documentation
[15] The Second Respondent was the educator under the tri-party Agreement and the
originating source of all the documentation sought. Every record required by the
Applicant - the enrolment forms, attendance registers, SETA quarterly assessments,
service agreements, unemployment declarations and related compliance documents
- was generated by the Second Respondent in the performance of its obligations
under the Agreement. It was not a peripheral party dragged into proceedings in which
it had no real interest. It was the party that created the documentation and bore the
primary obligation to ensure that documentation was complete and compliant.
[16] The Second Respondent cannot simultaneously accept payment for services rendered
under an ETI programme and disclaim all responsibility for the documentary
under an ETI programme and disclaim all responsibility for the documentary
consequences of those services. Having been remunerated for training 450 learners
under an ETl-compliant programme, it cannot escape accountability for the adequacy
of the records it generated in the implementation of that programme.
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The statutory retention obligation and the critical dates
[17] Three dates are critical to the analysis. The tri -party Agreement commenced on 1
October 2019. The application to compel was launched on 17 March 2025. There is,
however, a material dispute on the papers as to when the Second Respondent's
contractual engagement ended: the Second Respondent contends that the First
Respondent terminated its contract with effect from 31 July 2020; the Applicant
maintains that the Agreement remained in force until 28 February 2022. This
contradiction between the part ies has not been resolved on the papers and is noted
as a matter of significance.
[18] Section 29 of the Tax Administration Act 28 of 2011 ('the TAA') imposes a statutory
obligation on any person required to maintain records under a tax Act to retain those
records for a minimum period of five years from the date of submission of the relevant
tax return or from the end of the relevant tax period. This obligation exists irrespective
of any contractual arrangement and irrespective of the termination of any agreement
between the parties.
[19] On the Second Respondent's own version — termination on 31 July 2020 — the five-
year statutory retention period ran until at least 31 July 2025. The application was
launched on 17 March 2025, some four and a half months before that period would
have expired. The Second Respondent was accordingly under an active and unexpired
statutory obligation to retain the relevant records on the date the application was
served upon it. On the Applicant's version — termination on 28 February 2022 — the
retention obligation runs until at least 28 February 2027 and subsists to this day. On
either version, the Second Respondent's assertion that it retains no copies of the
documentation is not merely a contractual position — it is a statement of non -
compliance with a statutory obligation.
[20] The unresolved contradiction as to the duration of the Second Respondent's
[20] The unresolved contradiction as to the duration of the Second Respondent's
engagement is itself a matter that militates against the award of punitive costs in its
favour. If the engagement in fact continued until February 2022, as the Applicant
contends, then the Second Respondent generated and was responsible for a
significantly larger body of documentation than it has acknowledged. If, on the other
hand, its engagement ended in July 2020, it remained under a statutory obligation to
retain the r ecords it had generated for a further five years — a period that had not
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expired when the application was launched. The Second Respondent cannot find
shelter in either version.
The SARS audit findings and the deficiencies in the documentation
[21] The SARS Finalisation of Audit findings and the Applicant's reconciliation schedule
confirmed specific and material deficiencies in the documentation ultimately furnished
to the Applicant. SARS found, inter alia, that no employer-employee relationship could
be established from the documents provided; that ETI was claimed in respect of
individuals who did not receive qualifying remuneration; that leave records were
absent; that proof of work performed was not provided; and that proof of qualifications
obtained was not provided. These deficiencies are directly traceable to the Second
Respondent as the originating source of the documentation. They are records the
Second Respondent was responsible for generating, maintaining and furnishing under
the tri-party Agreement.
[22] The Second Respondent therefore bears a degree of responsibility for the predicament
that gave rise to the application in the first place. An application to compel production
of documentation of which the Second Respondent was the originating source, and
which the SARS audit confirmed to be materially deficient, was not unreasonable,
vexatious or without foundation.
Conclusion on the appropriate scale
[23] The award of attorney -and-client costs is a mark of the court's disapproval of the
conduct of the paying party and is reserved for cases of genuine unreasonableness or
bad faith. A court should be slow to award punitive costs in favour of a party that itself
bears contributory responsibility for the very predicament that gave rise to the litigation.
The Second Respondent was the originating source of the documentation, bore a
statutory retention obligation that had not expired when the application was launched,
and is responsible for the documentary deficiencies identified by SARS. In these
and is responsible for the documentary deficiencies identified by SARS. In these
circumstances, the application against the Second Respondent, while ultimately
unsustainable as a matter to be prosecuted to completion, was not the product of bad
faith or vexation on the part of the Applicant. The attorney -and-client scale is
accordingly not warranted.
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[24] The appropriate order in respect of the Second Respondent is party-and-party costs,
but with the costs of Counsel on Scale B. This reflects the more active nature of the
Second Respondent's opposition - which included a full opposing affidavit, a practice
note, heads of argument, and the briefing of Counsel - while stopping short of the
punitive scale that the Second Respondent's own contributory conduct does not merit.
[25] In addition, the Court considered the condonation application of the Applicant in
determining the appropriate costs order. The eight-month delay was substantial,
inadequately explained in material respects, and caused unnecessary inconvenience
to the Respondents. It follows, that the costs of the condonation application are
accordingly awarded in favour of the Respondents.
F. ORDER
In the result the following order is made:
1. The Applicant is granted leave to withdraw the application.
2. The Applicant is directed to pay the First Respondent's costs of the application
including the costs of the condonation application on the party and party scale,
including costs of Counsel on scale B.
3. The Applicant is directed to pay the Second Respondent's costs of the
application including the costs of the condonation application on the party and
party scale, including costs of Counsel on scale B.
4. The costs orders in paragraphs 2 and 3 are separate and independent, the one
not affecting the other.
BY ORDER
SM MARITZAJ
ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
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APPEARANCES FOR PARTIES:
Attorneys for Applicant: S Steyn Inc
Counsel for Applicant: Adv L Strydom
Attorneys for First Respondent: Morné Coetzee Attorneys
Counsel for First Respondent: Adv J Eastes
Attorneys for Second Respondent: Loubser Van Wyk Inc
Counsel for Second Respondent: Adv Lubbe
Date of Hearing: 13 May 2026
Date of Ex Tempore Judgment: 13 May 2026
Date of providing written copy of
Ex Tempore Judgment: 21 May 2026