Court name
High Court of South Africa South Gauteng Johannesburg
Case number
11521 of 2020

Hykue Supply Company (Pty) Ltd and Another v Khulio (Pty) Ltd and Others (11521 of 2020) [2021] ZAGPJHC 100 (08 November 2021);

Media neutral citation
[2021] ZAGPJHC 100
Coram
Wilson AJ

 

WILSON AJ:

1            The applicants, Hykue and Bermat, are the erstwhile lessors of business premises to the second respondent, Hawker. Hawker was controlled by the third respondent, Mr. Davitt. Hawker fell into arrears with its rent during 2018. Rather than sue for repayment, Hykue and Bermat elected to wait for Mr. Davitt to negotiate the sale of Hawker to the first respondent, Khulio. Hykue and Bermat expected that Khulio would assume Hawker’s arrears, and then make good on them once its purchase of the Hawker business went through.

2            There followed a series of protracted negotiations between the various parties about who owed what to whom. During this process, Hykue and Bermat took default judgment against Mr. Davitt and Hawker for various amounts that either or both acknowledged they owed.

3            The negotiations came to a head on 13 and 19 May 2019, when Hykue and Bermat allege that Khulio assumed liability for various debts owed to them by Hawker and Mr. Davitt. After a meeting on 19 May 2019, Hykue and Bermat’s attorney, Mr. Conidaris, drafted a settlement agreement, which purported to deal comprehensively with all of the amounts owing to Hykue and Bermat, assigning liability to pay them to Khulio, and regulating the consequences of payment, or any non-payment, of those amounts.

4            That document was never signed on Khulio’s behalf. Hykue and Bermat nonetheless allege that the only inference to be drawn from various conversations and emails that passed between the parties after the agreement was transmitted, is that a comprehensive settlement agreement was entered into between the parties, on the terms and conditions set out in the document. Hykue and Bermat now seek an order directing Khulio to pay R837 042,35 to them, pursuant to the agreement they allege.

5            Khulio denies that any such agreement came into existence. At the centre of the controversy is the meaning of an e-mail sent to Mr. Conidaris by Siyabonga Khumalo, Khulio’s Managing Director, on 10 June 2019. That e-mail replied to the message to which the draft settlement agreement was attached.

6            In his email, Mr. Khumalo “accepts the payment of the rent debt of R582 761.89, as per the terms proposed in our meeting of 13/5/2019”. Mr. Khumalo also states that “as regards the variation of schedule 2 with the amount of R475 000,00 (four hundred and seventy-five thousand rands) of the sale agreement, we propose a R40000,00 monthly instalment from October 2019 until full settlement”. Mr. Khumalo also confirms “having paid an amount of R280,500 . . . (R223000 as deposit of the debt and R57500 as rent) Kindly send us invoices for the above”.

7            It is this e-mail that Hykue and Bermat rely on to press the inference that the settlement agreement had been accepted, albeit on slightly altered terms. On the same day, Mr. Conidaris replied to Mr. Khumalo stating that “the proposal set out [in Mr. Khumalo’s e-mail] is acceptable to our clients”.

8            I have no doubt that Mr. Khumalo’s e-mail cannot be relied upon to press the version that the settlement agreement was actually entered into. But that is not what this case is really about. Hykue and Bermat claim payment. They do not claim the enforcement of any of the other terms of the agreement.

9            On its face, and especially when read in the circumstances surrounding its transmission, Mr. Khumalo’s e-mail evinces an acknowledgement that Khulio will pay R1 057 761,89 to Hykue and Bermat. It also asserts that Khulio has already paid R223 000 of this amount into Hykue and Bermat’s attorney’s trust account. This leaves a balance of R834 761,89 outstanding, due and payable (albeit in instalments, the due dates of which have now long since passed).

10          In his answering affidavit, Mr. Khumalo denies that he entered into a settlement agreement with Hykue and Bermat, but he readily admits the terms of what he refers to as a “payment plan” contained in his e-mail of 10 June 2019. He also states that a further R30 000 was paid to Hykue and Bermat in August 2019 under that “payment plan”. Mr. Conidaris admits the payment in reply.

11          On anybody’s version, then, Khulio owes at least R804 761,89 to Hykue and Bermat in terms of its “payment plan”. I can find nothing on the papers that would create a material dispute in relation to this amount.

12          For this reason, it seems to me that the Mr. Khumalo’s denial that the settlement agreement was ever concluded is beside the point. Because all Hykue and Bermat seek is an order for payment, they are entitled to that order to the extent that there is not a material dispute of fact on the papers that the amount claimed is due and payable. In other words, I cannot accept that Khulio entered into the settlement agreement as alleged, but I can and must accept that there is no defence to Hykue and Bermat’s claim for payment of R804 761,89 of the R837 042,35 sought in its notice of motion.

13          On 21 February 2020, Mr. Conidaris sent a letter to Khulio in which he alleged that Khulio had entered into the settlement agreement, and sought the performance due under the agreement as at that date. The letter was not answered. Mr. Joseph, who appeared for Hykue and Bermat, asked me to infer from the failure to answer the letter that Khulio had actually entered into the settlement agreement. Khulio would, otherwise, have denied the agreement in response.

14          I do not think that I can infer from Khulio’s silence that the settlement agreement was extant in circumstances where there is no contemporaneous evidence that it was actually entered into. The value of the letter seems to me, though, to lie in its confirmation that, as at the date of its transmission, the undertakings made in Mr. Khumalo’s “payment plan” had not been given effect to.

15          For all these reasons, I am satisfied that Hykue and Bermat are entitled to an order for payment of R804 761, 89, plus interest at the prescribed rate, to run from the date on which this application was instituted.

16          Accordingly, I make the following order –

16.1        The first respondent shall pay to the applicants the sum of R804 761,89 (Eight hundred and four thousand, seven hundred and sixty-one rand and eighty-nine cents) together with interest at the prescribed rate a tempora mora from 23 June 2020 to the date of payment.

16.2        The first respondent is directed to pay the costs of this application, including the costs of the unopposed hearing of 9 September 2020.

 

 

 

S D J WILSON

Acting Judge of the High Court

 

This judgment was prepared and authored by Acting Judge Wilson. It is handed down electronically by circulation to the parties or their legal representatives by email and by uploading it to the electronic file of this matter on Caselines. The date for hand-down is deemed to be 8 November 2021.

 

HEARD ON:                                      26 October 2021

 

DECIDED ON:                                  8 November 2021

 

 

 

 

 

For the Applicants:                         B Joseph

                                                       Instructed by Wright Rose Innes Incorporated

 

For the First Respondent:              K Mvubu

                                                       (Heads of argument drawn by N Khumalo)

                                                       Instructed by Siphaphelo Buthelezi Attorneys