Client sues CEDA for betrayal

Bame Piet
SEEKING JUSTICE: The Monthe's with their lawyer

“We never agreed any compromise” – CEDA

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A Maun business family, Letsholo Pauline Monthe and Moitseemang Monthe, have filed an urgent application at the Lobatse High Court to stop the Citizen Entrepreneurial Agency (CEDA) and Deputy Sheriff Phillip Maitseo from auctioning their multi-million Pula warehouses in Maun on December 4th.

The couple built the warehouses at Matshwane Ward, Tribal Lot 17227 in 2015 through their company- Letshomodi Holdings, to rent out space, hoping to cash in on the arrival of Khoemacau Copper Mine.

However, when the COVID-19 Pandemic struck in 2019-2020, everything collapsed, and their dreams were shattered.

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The family argues that they have a compromise agreement with CEDA, in which they agreed to repay the loan in monthly installments. “The Applicants seek a further order that CEDA be interdicted from ever advertising the property for a sale in execution for as long as Letshomodi Holdings (PTY) Ltd complies with the compromise agreement, being the payment of P1,153,331.05 and agreed installments of P42,227.12 per month,” they said.

The Monthes said they believe that CEDA misled them for the past 10 months by making them believe that the agreement was accepted, because they complied with it and CEDA accepted all the payments in accordance with the correspondence dated 16 September 2022.

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“Since the compromise was entered into, Letshomodi Holdings has paid P430,000.00 at P43,000.00 per month to CEDA, being repayment of the capital loan, the interest having been fully paid, on the belief that the compromise agreement was in place,” said Pauline Monthe in an affidavit.

Monthe, who is a retired civil servant, said she secured Lot 17227 from her pension benefits to build warehousing units, but ran short of funds along the way.

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She then turned to CEDA and acquired P4million in 2015 to complete the project and was banking on Khoemacau Mine and others.

When Khoemacau Mine closed in 2019, Letshomodi Holdings suffered a financial setback since there were no tenants, and by September 2020, CEDA Attorneys issued intention to foreclose the property.

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He added that in February 2021 the parties agreed on an out-of-court settlement to allow Letshomodi Holdings to make monthly installments of P30,000.00 given the state of the business and indebtedness. “Notwithstanding the agreement between the parties by way of a mortgage bond with installments of P42,227.12 per month, my attorneys of record then had argued that it was impossible to make such installments given the state of occupancy of the warehouses and the devastation caused by COVID-19. There was, therefore, a compromise agreement to pay less than the agreed amount of installments as I disputed a demand for a higher amount due to COVID-19, and the closure of Khoemacau Mine, hence the compromise,” she said.

Monthe said at some point the property was scheduled for auction on 22 December 2022 unless the company paid P1,153,331.12 but they paid P1.2million instead.

She added that even CEDA has acknowledged on October 24th, 2023, that Letshomodi Holdings has been repaying well and has cleared all arrears, a loan amount of P4million and remaining capital balance of P2,629,427.66 and interest charged to date being P940,972.66.

She insisted that the compromise agreed in September 2021 supersedes the court judgment of November 2021 since CEDA consented to it.

However, CEDA argues that the matter should have been heard by Justice Moesi of the Francistown High Court and that it was not urgent.

Through their attorneys CEDA said: “We submit that this application is not urgent as it took the Applicant 10 days to act. Further, instead of bringing the application before the same court that granted judgment, they have brought it to this court. The court is now constrained as it does not have a record of the proceedings before previous court. There is an inherent risk of two conflicting orders from the same court if this matter is not returned to Justice Moesi’s court”.

CEDA further said there was no compromise between them and the applicants saying they had been receiving rentals for almost a year and had still failed to pay the installments, adding that there is no written agreement to support the stance.

“The applicants further fail to apply their minds to the fact that, notwithstanding their allegations of a compromise, they went further to make payment proposals that a party seized with a compromise agreement, would not have done. The applicants made a proposal to clear their entire loan by 31 January 2023. This was done without coercion from CEDA. A party wholly believing in the existence of a compromise would not have done so,” they argued saying there is no indication that CEDA ever intended to waive its contractual rights under the loan agreement.

Justice Jennifer Dube has reserved judgement on the matter for December 1st.

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