After trying to sue a liquidated company implicated in corruption, the high court criticised FNB for going after one of the company’s owners, who was deceased.
The company, CMS Water Engineering CC, was accused of fraudulent appointment in 2019 for an R85m tender. The auditor-general’s office flagged the company for irregularities in the awarding of the tender and for allegedly submitting invoices for work not done.
Also in 2019, controversial business person Edwin Sodi’s company, NJR Projects, was in a joint venture with CMS, after being awarded a R292m tender. This was to improve the quality of water in the cholera-hit Hammanskraal area. However, the project collapsed, the contract was terminated and the companies faced criminal charges.
Sodi in 2023 blamed CMS’s owner, Rudolf Schoeman. However, Schoeman later died.
In 2021, CMS received an overdraft facility from FNB for about R6m. Schoeman, his father, Dolf, and another business person, Bruce Adonis were named as sureties in 2017.
After died CMS went into liquidation before it could pay FNB. Despite knowing of Schoeman’s passing, the bank instituted claims against the three men.
However, Dolf Schoeman and Adonis argued that FNB could not sue a dead person.
The law requires that someone implicated in litigation has to either be removed or replaced, such that any payments come out of their estate. Schoeman’s executor had not been substituted in court proceedings.
Last week, Mahikeng high court judge Frances Reid said it was well-known in litigation that “a party that dies should be substituted by the executor of the estate”. Pointing to court precedent, she noted that courts “will not allow any further steps to be taken” until then.
However, that did not mean FNB could not still sue Dolf Schoeman and Adonis — just not the deceased Rudolf Schoeman.
She noted that FNB “appears” to have a “valid claim” and dismissing the whole matter “would not be a just and fair remedy”. But she could not order oral testimony because Schoeman had passed and had not been replaced by his executor in the case.
She therefore struck the matter from the roll, which allows FNB to come back on the same facts, but correctly citing Schoeman’s estate and deciding whether to rather opt for a trial.
Striking a matter is different to a dismissal. A dismissal is a ruling on the merits of the case, which means a losing party can appeal only to a higher court. Striking, however, is as if the matter was never in court, meaning FNB can return with corrected papers.
She did, however, order FNB to pay Dolf Schoeman’s and Adonis’ legal costs.
The judgment serves as a warning for how litigation must be conducted regarding deceased parties and proper citation. As the case shows, a simple citation error has resulted in FNB’s entire and expensive high court case being thrown out, even if FNB can return later.
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