Qnet Networking Solutions (Pty) Ltd v D & E Steel (Pty) Ltd (24139/2024) [2025] ZAWCHC 227 (28 May 2025)

IN
THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE
DIVISION, CAPE TOWN)

Case
no: 24139/2024

In
the matter between:

QNET
NETWORKING SOLUTIONS (PTY)
LTD                                              

Applicant

and

D
& E STEEL (PTY)
LTD                                                                                 

Respondent

JUDGMENT
DELIVERED ELECTRONICALLY ON 28 MAY 2025

MANGCU-LOCKWOOD,
J

A.          
INTRODUCTION

 [1]         
This is an application for specific performance in
terms of an alleged agreement between the applicant and the
respondent, in which the applicant seeks delivery
of 208 units of sections of steel described as 200
x100 IPE, alternatively an order for
cancellation and damages.

 [2]         
The application is opposed by the respondent, and
as a point in limine
it challenges the locus standi
of the applicant. The respondent points out that, whilst the
applicant’s case is based on a partly verbal and partly written

agreement, it has attached as proof an invoice dated 2 February 2023,
which was issued, not to the applicant but to Mr Rahim,
the deponent to the founding affidavit, in his personal capacity.

 [3]         
It is also stated in the answering affidavit that
at all material times the respondent’s staff members were
under the impression that they were dealing with
Mr Rahim in his personal capacity and were unaware that
he purported to act on behalf of the applicant.  The
first time it came to their notice that he purported to act on behalf
of
the applicant was when they received a letter
of demand from the applicant’s attorneys of record, where it
was claimed that the attorneys represented
Mr Rahim and the
applicant. As a result, says the respondent, there could not have
been a valid agreement between the applicant
and the respondent, and
the applicant lacks locus standi
to bring these proceedings.

 [4]         
In reply to the point in
limine, the applicant states that he
has been conducting business with the respondent’s sales
representative, Mr Herman Krause,
for the past three years and Mr
Krause was aware that he, Mr Rahim, represents the applicant.
Furthermore, that Mr Krause would know this
from his previous employment where he dealt
with Mr Rahim. The applicant also states that on ‘the day in
question’ – it is not clear when – he informed
Mr Krause that
he required the steel for a project of the applicant.

 [5]         
There are some difficulties with the manner
in which the applicant has chosen to deal with this issue. Firstly,
the averments made
in the paragraph immediately above appear for the
first time in the replying affidavit. It is trite that that a party
is required
to make out its case in its founding papers. Secondly,
given the averment in the answering affidavit that Mr Rahim made no
mention
that he represented the applicant and that this was only
discovered upon receipt of the letter of demand, the issue is
self-evidently
in dispute. And the applicant’s averment leaves
much to be desired because it is vague. Mr Rahim states it was ‘on
the day in question’ that he advised Mr Krause that he required
the steel for the applicant. Given that the founding papers
allege
that there were numerous engagements between Mr Rahim and Mr Krause
between 2 February 2023 and 7 February 2023, I would
have expected
the applicant to deal with this issue with greater particularity. It
effectively amounts to a bald averment, which
as I have indicated, is
made in reply. At the very least, this is a dispute that cannot be
resolved on the papers.

 [6]         
One abiding question that arises from the
version proffered in the replying affidavit is, if Mr Krause
previously dealt with Mr
Rahim in his capacity as representative of
the applicant, surely he would have known to issue the invoice to the
applicant and
not to Mr Rahim. And the applicant has not gone as far
as to claim that the invoice was erroneously issued in his name
instead
of his company’s name. Although the applicant’s
counsel attempted to advance such an argument in his heads of
argument,
it is not supported by any evidence.

 [7]         
As for the allegation made in the replying
affidavit that Mr Rahim has dealt with Mr Krause for the past three
years, I note that
the replying affidavit was deposed on 18 March
2025, some two years since the incident, so the majority of the three
years would
have been with Mr Krause working at the respondent, after
the events in this matter.

 [8]         
The most significant problem facing the
applicant is the fact that the only document relied upon for its
contention that there was
an agreement in respect of which it seeks
specific performance is the invoice dated 2 February 2023, which, as
I have adverted
was made out, not to the applicant but to Mr
Rahim.  There is no attempt, even in the
replying affidavit, to explain why he was happy to pay make payment
on an invoice
which is addressed to himself if it was indeed supposed
to be addressed to the applicant. There has never been an explanation
that,
for example, the invoice was issued to him erroneously (this is
stated for the first time in the heads of argument) or that he told

Mr Krause to issue it in his name.

 [9]         
In his heads of argument, the applicant’s
counsel sought to deal with this issue by referring to legal
authority that deals
with authorization for a person to bring an
application on behalf of a company. That however is not the issue.
There is no dispute
with the fact that Mr Rahim deposes to the papers
on behalf of the applicant by virtue of his directorship and
co-ownership of
the applicant. Nor is there an issue raised with the
certificate from the Companies and Intellectual Property Commission
(CIPC)
attached to his affidavit indicating such directorship.

[10]        
The issue is that it has not been
established that the applicant was a party to the
agreement. As the applicant correctly
states, there is not a single direct mention of the applicant in the
papers, save for the letters of
demand preceding these proceedings
from the attorneys who themselves stated that they represented both
the applicant and Mr Rahim.
And Mr Rahim is not cited as a party to
these proceedings in his personal capacity.

[11]        
The clearest example of the problem is that
there is no description of the applicant in the papers, as one would
normally expect
at the start of the founding affidavit. Instead,
there is a description of Mr Rahim. The Court remains in the dark
regarding the
nature of, or any other description of the applicant.
The affidavit is equally silent regarding the attitude of its
co-director
who is mentioned in the CIPC document. The remainder of
the founding affidavit follows suit, referring consistently to
Mr Rahim as the contracting party who also complied with the terms of
sale. 

[12]        
Notably, it is stated as follows at
paragraph 5 of the founding affidavit:

 “On or
about 2 February 2023, at Kuilsriver, the respondent duly represented
by its salesman, Herman Krause (“Herman”)
and I concluded
a partly oral and partly written agreement at the respondent’s
business premises in terms of which the Respondent
issues a pro forma
invoice for 208 units of 200 by 100 IPE Sections.

[13]        
As
the respondent’s counsel correctly states, the drafter of this
paragraph clearly appreciated the need to accurately describe
the
parties to the agreement, and was content in describing the applicant
as “I”, referring to the deponent, Mr Rahim.
This pattern
of the deponent referring to himself as the other party to the
agreement, can be found throughout the founding affidavit.
It has
been stated that, when
determining an objection taken
in limine
as to the locus
standi
of a party, the issue must be dealt with on the assumption that all
the allegations of fact relied upon by that party are true.[1]
On application of that assumption, the picture emerging from the
founding affidavit which consists, in the main, of allegations

concerning Mr Rahim in his personal capacity, supports the
respondent’s case that the agreement was not in the name of the

applicant.

[14]        
In argument, Mr Garces referred
to three instances in the founding affidavit where reference is made
to the business of the applicant.
The first is in relation to the
alleged prejudicial effect on Mr Rahim and ‘my business’
at paragraph 34. This, however,
does not establish locus
standi because the averment concerns
events which allegedly occurred after conclusion of the agreement.

[15]        
The second mention of the
applicant referred to occurs at paragraph 42.1 under the heading
“Relief Sought”,
where it is submitted that “the
aforegoing facts unequivocally demonstrate the fact of the agreement
concluded between the respondent and the applicant”.
On its express wording, it presupposes that the necessary facts for
the conclusion drawn in this paragraph would have been laid
out
before the paragraph in question. It does not itself establish locus
standi.

[16]        
The third reference relied upon is an e-mail from Mr Rahim dated 9
February
2023 and headed “Qnet Steel Order”. 
This e-mail was sent to Mr Krause around the time of incident, and is
the closest indication that the steel order
may have been made on
behalf of the applicant. However, it does not cure the defect
contained in the papers because, the fact that
the order was made on
behalf of the applicant is not mentioned in the papers of the
applicant. In fact, whilst the content of email
was reproduced in the
founding affidavit, the heading now relied upon, which is contained
an email attachment, was not even mentioned
in the affidavit. It is
trite that a party may not rely on the contents of an attachment
without adducing evidence in support thereof.
It is not for a court
to make out a case on behalf of a party by reference to attachments
to its affidavit.  

[17]        
There is otherwise not a single mention of
QNet Networking Solutions in the applicant’s papers
relating to the contract that is the subject of
this case. As the respondent’s
counsel argued, it is possible Mr Rahim owns other
businesses, which may well be the entities on whose behalf he entered
into the alleged agreement with the respondent.

[18]        
Although
this issue may, at first seem to be elevating form over substance, it
is nonetheless important. The question of whether
a litigant’s
interest, in this case the applicant, is sufficient to clothe it with
standing must be determined in the light
of the factual and legal
context.[2] In
this case, the applicant has brought proceedings to execute an
alleged agreement by means of an application. And the only document

it uses in support of the existence of an agreement is the invoice,
which does not contain the name of the applicant. It is trite
that a
company is a legal entity distinct from its shareholders, and has
rights and liabilities of its own, separate from those
of its
shareholders.

[19]        
The
general rule of our law is that a
person or entity which claims relief from a court in respect of any
matter must establish that it has a direct interest in that
matter in
order to acquire the necessary locus
standi to
seek relief.[3] No
person, including an entity, can sue in respect of a wrongful act,
unless it constitutes a breach of a duty owed to that entity
by the
wrongdoer, or unless it causes that entity some damage in law, which
is also referred to as
“some grievance special to [it]self”[4].
A
party alleging a contract must allege and prove the terms of the
agreement on which he or she seeks to rely.[5]

[20]        
The
effect of the all the above is that the issue of whether the
applicant was a party to the agreement remains in dispute. In
application proceedings, where a dispute of fact has emerged and is
genuine and far-reaching and the probabilities are sufficiently

evenly balanced, referral to oral evidence or trial, as the case may
be, will generally be appropriate.[6]
Uniform Rule 6(5)(g) provides as follows:

“Where an
application cannot properly be decided on affidavit the court may
dismiss the application or make such order as it deems
fit with a
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the a foregoing,
it may direct
that oral evidence he heard on specified issues with a view to
resolving any dispute of fact and to that end may
order any deponent
to appear personally or grant leave for such deponent or any other
person to be subpoenaed to appear and be
examined and cross-examined
as a witness or it may refer the matter to trial with appropriate
directions as to pleadings or definition
of issues, or otherwise.”

[21]        
The Rule allows a court faced with a
dispute of fact that cannot be decided on the papers to follow anyone
of three alternatives: it may dismiss
the application, or direct that
oral evidence be heard on specified issues, or refer the matter to
trial. A court is not restricted
to the listed remedies and may make
any order it deems fit and which is directed at ensuring a just and
expeditious decision.

[22]        
Given the discussion earlier, I am of the view that the issue of the
locus standi of the applicant is a material dispute of fact.
On the face of the pleadings, it appears that the applicant did not
appreciate
that this issue might amount to a material dispute of
fact, and appears to have taken it as ‘fact’ that Mr
Rahim, being
a director, was sufficiently representative of the
applicant. On the other hand, the respondent admits to receiving
communication
before the launch of these proceedings in which the
applicant is mentioned, and thus the applicant’s involvement in
these
proceedings is not a surprise. Neither is it disputed that Mr
Rahim has at all times dealt with the respondent, including by making

payment. Had he been cited in his personal capacity, the issue might
well not have arisen. It is possible that the issue is one
of bad
pleading.  

[23]        
While it is
so that an application for a referral to oral evidence or trial,
where warranted, should be applied for by a litigant
as soon as the
affidavits have been exchanged and not after argument on the
merits[7], that is not an
inflexible rule[8]. And courts
are loathe to deal with matters on a piecemeal basis, or to dispose
of matters based on points taken in
limine.
The issue to be determined is simple and discrete. I am therefore of
the considered view that referring the matter to oral evidence
would
ensure a just and expeditious decision.

ORDER

[24]        
In the result, the following order is made:

1.    The
issue concerning the applicant’s locus
standi is referred to oral evidence.

2.   
Costs are reserved for later determination.

 N.
MANGCU-LOCKWOOD

Judge
of the High Court

APPEARANCES:

For
the applicant      :          
Adv M. Garces

Instructed
by            
:          
Parker
Attorneys

I. Hamid

For
the respondent  :          
Adv A. Walters

Instructed
by            
:          
Hickman
van Eeden Phillips Inc.

A. Phillips