South Africa: North West High Court, Mafikeng

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Gradco South Africa (Pty) Ltd v Mahlopi Metals Group (Pty) Ltd and Another (6092/24) [2025] ZANWHC 23 (4 February 2025)

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IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION – MAHIKENG

CASE NO: 6092/24

Reportable: YES/NO

Circulate to Judges: YES/NO

Circulate to Magistrates: YES/NO

Circulate to Regional Magistrates: YES/NO

In the matter between:

GRADCO SOUTH AFRICA(PTY) LTD APPLICANT

REG NO. 1999/026872/07

and

MAHLOPI METALS GROUP (PTY) LTD FIRST RESPONDENT

REG NO.2019/443992/07

JOHCON GROUP (PTY) LTD SECOND RESPONDENT

DATE OF JUDGMENT 4 FEBRUARY 2025

This judgment was handed down electronically by circulation to the parties’ representatives via email. The date and time for hand-down is deemed to be 4 February 2025 at 10h00.

ORDER

1. This application is heard as an urgent application in accordance with the provisions of Rule 6(12) of the Uniform Rules and the applicant’s non-compliance with the requirements pertaining to the time periods and requirements relating to service as prescribed by the Uniform Rules are condoned.

2. The first respondent is ordered to deliver and return possession of the CATERPILLAR CAT 395 Excavator with serial number S[...](hereinafter referred to as “the Machine”) to the applicant ante omnia.

3. In the event that the first respondent refuses or fails to deliver or to return possession of the Machine to the applicant, the Sheriff of this Court and/or his/her Deputy is hereby authorised and mandated to attach the Machine and remove it from the first respondents’ possession, and to deliver possession of the Machines to the Applicant ante omnia.

4. The Sheriff of this Court and/or /his/her Deputy is authorised and mandated to procure the assistance of the South African Police Services, if necessary to execute the order referred to in paragraph 3 supra.

5. That the first respondent is ordered to pay the costs of this application on the attorney and client Scale C.

6. The parties may apply for written reasons within 10 days of this order.

JUDGMENT

REDDY J

Introduction

[1] What follows are reasons as requested by the first respondent for an order made in urgent court on 4 December 2024. The request for reasons as ensconced in Rule 49(1)(c) of the Uniform Rules of the Court, (the Rules) accompanied by the court file was served before me on 20 January 2025.

[2] The order granted reads as follows:

1. THAT: This application is heard in terms of Rule 6(12) of the Uniform Rules of Court, and the prescribed rules and the forms of service of this application are condoned.

2. THAT: The First Respondent is ordered to deliver and return possession of the CATERPILLAR CAT 395 Excavator with serial number S[...](hereinafter referred to as “ the Machine”) to the Applicant ante omnia.

3. THAT: In the event that the First Respondent refuses or fails to deliver or to return possession of the machine to the Applicant, the Sheriff of this Court and/or his/her Deputy is hereby authorised and mandated to attach the machine and remove it from the First Respondent’s possession, and to deliver possession of the machine to the Applicant ante omnia.

4. THAT: The Sheriff of this Court and/or/ his/her Deputy is authorised to procure the assistance of the South African Police Services, if necessary, to execute the order referred to in paragraph 3 supra,

5. THAT: The First Respondent is ordered to pay the costs of this application on attorney and client scale C;

6. That: The parties may apply for written reasons with 10 days of this order.

The parties

[3] The applicant Gradco South Africa (Pty) Ltd (Gradco). The first respondent is Mahlopi Metals Group (Pty) Ltd, (Mahlopi Metals) The second respondent is Johcon Group (Pty) Ltd, (Johcon). The latter three are private companies with limited liability and incorporated in accordance with the provisions of the Companies Act 71 of 2008, (the CA), as amended. The application is opposed by Mahlopi Metals. No relief is sought against Johcon, who is merely cited as an interested party.

Gradco’s version

[4] Gradco is the lawful owner of two Caterpillar Excavators fully described as CAT 395 Excavator with serial number S[...] & CAT 390F Excavator with serial number: G[...]. Gradco’s business entails inter alia the leasing of earth moving equipment to mines and mining contractors against the payment of rental and associated charges.

[5] On 08 February 2024 Gradco and Johcon duly represented entered into a lease agreement for the leasing of the excavators. Therefore, Johcon took possession of same. On 11 June 2024 Johcon in turn leased the excavators to Mahlopi Metals. Notwithstanding Gradco not being a party to the latter agreement, the same occurred with the knowledge and consent of Gradco. That being so, Mahlopi Metals took possession of the excavators.

[6] A dispute arose between Johcon and Mahlopi Metals. Mahlopi Metals then approached Gradco for the leasing of the excavators. Both parties then entered into a “discreet” lease agreement in relation to the excavators on agreed written terms and conditions. As part of the agreement, it was assented to that the duration of the lease agreement would be monthly.

[7] During the existence of the agreement, Mahlopi Metals tendered payments in terms of the lease agreement for the rental of the excavators in a random and sporadic way. To buttress this averment of erratic payments, Gradco placed much store on a communiqué dated 14 August 2024. It reads as follows:

“ ….

RE: REQUEST FOR PAYMENT EXTENSION

1. Kindly note of that we were served with a notice in terms of section 54 of the Mine Health and Safety Act 29 of 1996. (“MHSA) by the Department Mineral Resources and Energy (“DMRE”), which led to the suspension of our mining activities at Rooderand Chrome Mines for 14 days. We attach the mentioned notice from the DMRE (“marked Annexure “A”) and further evidence of non-compliance from DMRE (marked Annexure “B1” and “B2”).

2. As a result of the above suspension, we have not been able to produce chrome ore and this has detrimentally impacted our revenue generation.

3. Today we received correspondence from the DMRE which confirms that our suspension has been partially uplifted and will lead to another inspection being done on 31 August 2024 to verify our state of compliance. We attach the abovementioned correspondence (marked Annexure “C”).

4. The partial upliftment allows us to resume our mining activities and thus generate revenue.

5. In the light of the above circumstances we request that you extend our payment date for this month to the following:

5.1 50% payment of the invoice due in August 2024 on 15 August 2024 and

5.2 50% payment of the outstanding invoice due in August 2024 on 23 August 2024.

6. Kindly advise whether you are amicable to the above arrangement.

7. We look forward to your response….”

[8] On 17 September 2024, in the absence of any obligation to assist Gradco retorted with a suggested payment proposal to assist Mahlopi Metals. This communication drew to response. This silence caused Gradco to issue a reminder relating to the suggested payment proposal. Again, silence followed.

[9] On 8 November 2024, Gradco caused an Outstanding Payment and Notice of Equipment Removal, (the Notice of Removal) to be issued. The Notice of Removal brought two crucial issues to the attention of Mahlopi Metals. First, a demand was made for the unpaid rental charges of the excavators which had to be liquidated by 15 November 2024. Second, in the event of non-payment of same Gradco would remove the excavators from the Rooderand Chrome Mine, effectively resulting in Gradco retaking possession of same.

[10] The Notice of Removal triggered Mahlopi Metals to affect a small payment. The full payment of the rental charges was not made by 15 November 2024. No defence was raised to the Notice of Removal. Notably, the failure by Mahlopi Metals to have honoured the payment timeline resulted in the immediate termination of the agreement between the parties.

[11] Additionally, Gradco issued a letter of demand in terms of section 345 (1)(d) of the CA. Quintessentially, Gradco notified Mahlopi Metals that in accordance with the provisions of section 345(1) of the CA that it had to within twenty one (21) days of the service of this demand pay the sum of R12 528 889 18 ( twelve million five hundred and twenty eight thousand, eight hundred and eight nine rand and eighteen cents) in terms of unpaid invoices in respect of earthmoving equipment leased by Mahlopi Metals was due, owing and payable to Gradco.

[12] Furthermore, Gradco concluded by notifying Mahlopi Metals that the neglect to effect payment or to secure or compound for it to the reasonable satisfaction of Gradco will result in Mahlopi Metals being deemed to be unable to pay its debts. Such an act of insolvency would entitle Gradco to apply to court to have it wound up as an insolvent company.

[13] On 19 November 2024, Jacques van Wyngaarden Lindhout, a director of Gradco, together with co-employees, as entitled proceeded to Rooderand Chrome Mines to retake possession of the excavators. This was thwarted by employees of Mahlopi Metals who contended that same belonged to Mahlopi Metals. To this end, the employees of Mahlopi Metals were under instructions to retain possession of the excavators.

[14] By way of correspondence, Mahlopi Metals was notified that the retention of the excavators was unlawful and sought an immediate undertaking that Mahlopi Metals would permit the employees of Gradco to retake possession, failing which and urgent application was to be launched. No undertaking was received nor any response.

[15] In order to render the excavators inoperable employees of Gradco proceeded to “lock” the excavators with the activation of what is commonly referred to as a “lock -out” device. This is a common practice in the mining industry which negates the unlawful use of earthmoving and mining equipment. To countermand the inoperability of the excavators, in an act of self-help, employees of Mahlopi Metals in the presence of the employees of Gradco with the aid of a bolt cutter cut of the “lock out “device. Given the already simmering tension between the parties, Gradco opted to initiate urgent proceedings.

The version of Mahlopi

[16] At the genesis of 2024, Mahlopi Metals required mining equipment. To this end, it entered into an agreement with Johcon, effective from 1 February 2024 and terminating on 31 January 2029 for two Caterpillar Excavators fully described as CAT 395 Excavator with serial number S[...] & CAT 390F Excavator with serial number: G[...]. The material terms of this agreement need no further elucidation given that Gradco was not a party to same.

[17] In April 2024, it became apparent that Johcon was subletting the excavators to Mahlopi Metals. This was not aerated. Mahlopi Metals construed this as a misrepresentation and terminated the contract. The termination of the contract by Mahlopi Metals is the subject of pending litigation. Put simply, Mahlopi Metals contended that against the backdrop of the pending litigation the agreement between Mahlopi Metals and Johcon is extant. Mahlopi Metals denied entering into any agreement with Gradco.

[18] On 22 May 2024 a meeting was convened between the representatives of Mahlopi Metals and Gradco. The purpose of the meeting was to discuss the lease of machines and potential machines. Emanating from the meeting a proposed draft was crafted which was forwarded to Mahlopi Metals on 15 July 2024. Concerns raised by Mahlopi Metals regarding the hourly rate for the rental of the excavators remained unresolved. Therefore, no contract was concluded between the parties.

[19] Moreover, Mahlopi contended that Gradco was not the owner of the excavators in question. Ownership was a key feature for successful relief in terms of the rei vindicatio. Therefore, the failure of Gradco to have presented any evidence to prove ownership was fatal to the relief sought.

[20] Furthermore, Gradco’s application had not passed muster of the jurisdictional requirements that govern urgency as evinced by Rule 6(12) (b) of the Rules of court.

Gradco’s submissions

[21] Adv Smit submitted that a valid lease agreement was in place between Gradco and Mahlopi Metals, which Gradco terminated on 15 November 2024 due to non-payment of historical rental charges which amounted R12 528 889 18. Since the latter date, Mahlopi Metals have been in possession sine causa of the excavators. After the issue and service of this application on Mahlopi Metals, it returned to Gradco possession of the CAT 390F Excavator with serial number: G[...].

[22] Adv Smit contended that Gradco had met the jurisdictional requirements as pronounced in Chetty v Naidoo 1974 (3) SA 13 (A).

Mahlopi’s submissions

[23] Adv Ndamase, contended that (i) the application was not urgent as Gradco would obtain substantial relief in due course, (ii) a proper case had not been made for the remedy of rei vindicatio, more appositely Gradco had not proven any extant contract between Gradco and Mahlopi Metals save for the contract between Mahlopi Metals and Johcon, (iii) there was a material dispute of fact on issues that are determinative of the application resultantly the relief sought cannot be concluded on the papers. East Rock Trading 7 (Pty) Ltd and another v Eagle Valley Granite (Pty) Ltd and others [2011] ZAGPJHC 196 paragraph 6, Luna Meubelvervaardigers (Edms) Bpk v Makin (t/a Makin’s Furniture Manufacturers 1977 (4) SA 135 at 137 E, Goudini Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd [1993] 1 ALL SA 259 (A), Legator Mackenna Inc. v Shea [2009].

Was the application urgent?

[24] Urgent relief is predicated on Rule 6(12)(b). The rule reads:

‘In every affidavit filed in support of any application under paragraph (a) of this subrule, the applicant must set forth explicitly the circumstances which is averred render the matter urgent and the reasons why the applicant claims that applicant could not be afforded substantial redress at a hearing in due course.’

[25] Subsumed in Rule 6 (12) (b) are two jurisdictional requirements. An applicant must demonstrate that the urgency is not self-created and must provide reasons why substantial redress cannot be attained in due course. The bulwark of these jurisdictional requirements is that the procedure set out in Rule 6(12)(b) is not there simply for the taking.

[26] In East Rock Trading 7 (Pty) Ltd and another v Eagle Valley Granite (Pty) Ltd and others [2011] ZAGPJHC 196 para 6. stated:

‘The import thereof is that the procedure set out in rule 6(12) is not there for taking. An applicant has to set forth explicitly the circumstances which he avers render the matter urgent. More importantly, the Applicant must state the reasons why he claims that he cannot be afforded substantial redress at a hearing in due course. The question of whether a matter is sufficiently urgent to be enrolled and heard as an urgent application is underpinned by the issue of absence of substantial redress in an application in due course. The rules allow the court to come to the assistance of a litigant because if the latter were to wait for the normal course laid down by the rules it will not obtain substantial redress.’

[27] The alpha and omega of Rule 6(12)(b) is whether an applicant can obtain substantial redress in due course. What does the absence of substantial redress mean? It means that a matter will be urgent if the applicant can demonstrate, with facts, that the applicant requires immediate assistance from the court, and that if his application is not heard on an urgent basis that any order that he might later be granted will by then no longer be capable of providing him with the legal protection he requires.

[28] On an application of the facts presented to the court, it was found, that Gradco had made out a case for urgent relief.

The law on rei vindication

[29] The rei vindicatio is the primary remedy for an owner reclaiming ownership. It is about restoring ownership of the property, which is in existence, identifiable and is in possession of a third party. Notably, these facts must exist at the initiation of the application.

[30] In Chetty v Naidoo 1974 (3) SA 13 (A) 20 B-C, the following was held in relation to the rei vindicatio:

“It is inherent in the nature of ownership that possession of the res should normally be with the owner, and it follows that no other person may withhold it from the owner unless he is vested with some right enforceable against the owner (e.g. a right of retention or a contractual right). The owner, in instituting a rei vindicatio, need, therefore, do no more than allege and prove that he is the owner and that the defendant is holding the res, the onus being on the defendant to allege and establish any right to continue to hold against the owner.”

[31] Intrinsic to application proceedings is that litigants must act with uberrimae fidei. Litigants in application proceedings must make a full and frank disclosure of all material facts. It was apparent that Mahlopi Metals was a disingenuous litigant. It misstated facts. Notwithstanding overwhelming evidence inclusive of its inherent knowledge regarding the ownership of the excavators, ownership of the excavators was challenged. Such a challenge was misplaced given its own version.

[32] Mahlopi Metals chose to approbate and reprobate making contentions that were indefensible. It vacillated from lack of urgency, no proof of ownership, the absence of an extant contract to a material dispute of fact. All of which were without substance, The issues of urgency and ownership have been addressed.

[33] I turn now to deal with the absence of an extant contract between Gradco and Mahlopi Metals. Without embarking on a process of supererogation, Mahlopi Metals’ own version led to an implosion of this contention. This was founded on four scores. First, Mahlopi Metals made intermittent payments. Second, it made a request for a payment extension, third, absurdly it disclosed material business information. Fourth, after the service of this application it returned to Gradco CAT 390F Excavator with serial number: G[...]. All the latter interactions occurred with Gradco. In the face of all these contractual averments Mahlopi Metals simply retorts in the answering affidavit that ‘I have provided this Honourable Court with the background of this matter. I have also done same regarding urgency and the merits on rei vindicatio’. This leads deftly into the purported dispute of fact.

[34] Rule 6(5)(g) provides that where there is a material and bona fide dispute of fact that cannot be decided on the papers, a court is faced with three alternatives: it may dismiss the application, or direct that oral evidence be heard on specified issues or refer the matter to trial. Lombaard v Droprop 2010 (5) SA 1 (SCA) at para [29] Ploughman NO v Pauw and Another 2006 (6) SA 334 (CPD) at 340 H-I, Red Coral Investments 117 (Pty) Ltd v Bayas Logistics (Pty) Ltd (D6595/2018) [2020] ZAKZDHC 56 (5 November 2020) at para [22].

[35] What is instructive from our law is this Court is enjoined with three legal alternatives should it be found that a material and bona fide dispute of fact exists that cannot be decided on the papers. In casu there was no material and bona fide dispute of fact. Therefore, it did not warrant the innovation of Rule 6(5)(g).

[36] It is trite law that the issue of costs is within the discretion of the court. The litigating conduct of Mahlopi Metals which has been alluded to was worthy of this Court’s rebuke. Public Protector v South African Reserve Bank 2019 (6) SA 253 (CC) at para 8. Whilst the attorney and client scale is an extraordinary one which is reserved for cases where a litigant conducted itself in a clear and indubitably vexatious and reprehensible manner. Such and award is exceptional and is intended to be very punitive and indicative of extreme opprobrium. Plastics Convertors Asscocation of SA on behalf of Members v National Union of Metalworkers of SA and Others (2016) 37 ILJ 2815 (LCA) at para 46.

Order

[37] In the premises I reiterate the order handed down:

4. The Sheriff of this Court and/or/his/her Deputy is authorised and mandated to procure the assistance of the South African Police Services, if necessary to execute the order referred to in paragraph 3 supra.

5. That the first respondent is ordered to pay the costs of this application on the attorney and client Scale C.

6. The parties may apply for written reasons within 10 days of this order.

A REDDY

JUDGE OF THE HIGH COURT OF

SOUTH AFRICA NORTH WEST DIVISION,

MAHIKENG

APPEARANCES

Date of Hearing: 20 January 2025

Date of Judgment: 4 February 2025

Counsel for Applicant Advocate Smit

Attorney for Applicant: Gothe Attorneys

C/O Smit Neethling Inc

29 Warren Street

MAHIKENG

Counsel for Respondent: Advocate Ndamase

Attorneys for Respondent Menezes & Mokobane Inc

C/O Ntsamai Attorneys

No 17 Claredon Street

Goldview

Mahikeng