SAA’s recovery battle boosted as court rejects Ngqula’s appeal
SOUTH African Airways’ (SAA’s) battle to recover millions of rand from former CE Khaya Ngqula received a boost yesterday when his appeal was struck off the roll by the Supreme Court of Appeal.
However, the judgment also gave a lifeline to Mr Ngqula’s argument that SAA was precluded from recovering the money because it brought its claims too late. The judgment said this was not an issue that was necessary for the appeal court to decide.
SAA issued two summonses against Mr Ngqula in 2010. In one, the airline claimed payment of more than R26.4m for alleged breaches of Mr Ngqula’s fiduciary duties. In the other, it demanded $3,4m relating to a sponsorship agreement with Argentinian golfer Angel Cabrera, which SAA said Mr Ngqula was not authorised to spend.
SAA’s summons, issued from the South Gauteng high court in Johannesburg, came soon before the claims would have become prescribed — the first summons was a matter of a few months and the second, less than a week. The Prescription Act says if claims like SAA’s are not made within three years of the debt arising, they fall away.
Mr Ngqula objected to the jurisdiction of the South Gauteng High Court, saying in terms of his employment contract, only the North Gauteng High Court in Pretoria could hear SAA’s claims.
The Supreme Court of Appeal said this was a "purely dilatory and tactical" move on Mr Ngqula’s part because he was hoping that, by making SAA start all over again at the Pretoria court, he would then be able to rely on prescription to get the claims thrown out.
But before Mr Ngqula’s objections were heard by the Johannesburg court, SAA applied for the cases to be "removed" or transferred to Pretoria. The application was granted by the Johannesburg court and it ordered the transfer.
Mr Ngqula then appealed to the Supreme Court of Appeal. But in yesterday’s judgment, Judge Jonathan Heher said the order was not appealable.
Judge Heher said Mr Ngqula used the appeal "in an attempt to avoid a determination of the merits" and said that the high court’s order was a "procedural mechanism incidental and preparatory to" the main dispute.
"I conclude that a removal … has none of the characteristics of an appealable order," he said.
But he added that it was not necessary for the appeal court to decide whether the "transfer may be properly treated as if it were the commencement of a fresh action".
This means it is still open to Mr Ngqula to argue, when the claims are heard by the North Gauteng High Court, that they are fresh claims and have therefore prescribed.
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