AVNET SOUTH AFRICA (PTY) LTD V LESIRA MANUFACTURING (PTY) LTD AND ANOTHER [2019] JOL 41542 (GJ)

  1. We confirm that Caroline de Villiers Attorneys represented Avnet South Africa (Pty) Ltd (“Avnet”) in this case.

Summary

 

  1. The question raised in the present application was whether a settlement agreement may be made an order of court when the agreement was reached without litigation having commenced between the parties.
  1. In terms of an agreement between the parties, Avnet supplied Lesira Manufacturing (Pty) Ltd (“Lesira”) for goods to the value of R23.59 million. On 12 October 2018, the parties entered into a settlement agreement recording Lesira’s indebtedness to Avnet and providing that the debt would be settled in a series of monthly installments from October 2018 to January 2020. The parties also agreed to have the settlement agreement made an order of court and Lesira and Edwin Sibiya undertook not to oppose that. Avnet this brought the present unopposed application to have the agreement made an order of court.

 

Court decision

 

  1. The primary function of the courts is to determine disputes between parties. The basis upon which a court makes a settlement agreement an order of court is therefore that there is a dispute between the parties which is already before the court and that, absent the settlement agreement, the court would have to adjudicate that dispute.
  1. Analysing divergent judicial pronouncements on the issue, the court concluded that it was precluded from making a settlement agreement an order of court, where that agreement was not preceded by litigation.

This case is a reported judgement.

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