The University of Fort Hare has scored a major victory in court after it succeeded in having a R30m debt judgment rescinded.
The university was in 2024 ordered to pay Maxi Phumelela Security R30m that the company claimed it was owed for the sale and installation of “covert security cameras” in line with four “partly written and partly verbal agreements” it had with the university in 2019 and 2020.
But at the heart of this massive debt and the rescission judgment is the hidden hand of someone who purportedly signed a document variously referred to in court papers as a “settlement agreement, promissory note or acknowledgement of debt” on behalf of the university for the R30m.
That document was signed in St Francis Bay in 2023, acknowledging that the university was “truly and lawfully indebted to (Maxi Phumelela Security) in the sum of R30,894,120.78”.
It undertook to pay that amount, as well as any accrued interest, on or before December 21 2023.
Judge Nicola Molony said no indication was given why a UFH representative would be signing such a document “as far afield” as St Francis Bay was from the university.
“The names of the allegedly authorised representatives who signed the settlement agreement are not recorded anywhere in the agreement.
“It cannot be discerned from the signatures in question who in fact signed the settlement agreement ….”
The company issued a summons against the university in early 2024.
But while a mystified UFH was still trying to ascertain the basis for the alleged debt, the company proceeded to court and obtained a default judgment based on the questionable settlement agreement.
Molony said UFH had presumed that the settlement agreement must be a fraudulent document as there was a reference to the four “letters of award” being made by the university’s former human resources director, Dr Paul Tladi.
This had happened “under circumstances where Dr Tladi had been dismissed for gross misconduct after the university discovered he had signed two contracts irregularly with another institution”.
In the current case, the awards would have in any event, been beyond Tladi’s authority as director of human resources.
Molony said the core of UFH’s complaint was that it had no idea who signed the settlement agreement purportedly on its behalf.
It had no record of its existence or the existence of the contracts that allegedly underpinned the settlement agreement.
All that could be found were three invoices amounting to about R700,000 for certain work the company had done on its behalf for which it had been paid.
In terms of the university’s own statutes, a promissory note or settlement agreement of more than R30m would likely have required the approval of the chair of council after a council resolution.
On the presumption that the settlement agreement was fraudulent, it had sought to have the R30m judgment debt rescinded.
[The company’s] inexplicable refusal to answer what is a very simple question lends credence to the reasonable suspicion that the promissory note/acknowledgement of debt/settlement agreement is the product of fraud
Molony said the glaring absence in Maxi Phumelela Security’s court papers of the identity of the person it claimed was a “duly authorised” representative of UFH who had signed the settlement agreement made it “impossible to assess the validity of the promissory note/acknowledgement of debt/settlement agreement”.
“[The company’s] inexplicable refusal to answer what is a very simple question lends credence to the reasonable suspicion that the promissory note/acknowledgement of debt/settlement agreement is the product of fraud.”
Molony set aside the default judgment and awarded punitive legal costs against Maxi Phumelela Security.
The judge cited its unfortunate tendency to be deliberately obtuse, its unfounded and scurrilous accusations against UFH staff in its court papers and the extensive and repetitive litany of technical objections it had made.
Daily Dispatch
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