Case Law[2022] ZAGPPHC 425South Africa
National African Federated Chambers of Commerce and Industry Free State Province and Another v Master of the High Court and Others (74936/2016;12167/2019) [2022] ZAGPPHC 425 (17 June 2022)
High Court of South Africa (Gauteng Division, Pretoria)
17 June 2022
Judgment
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## National African Federated Chambers of Commerce and Industry Free State Province and Another v Master of the High Court and Others (74936/2016;12167/2019) [2022] ZAGPPHC 425 (17 June 2022)
National African Federated Chambers of Commerce and Industry Free State Province and Another v Master of the High Court and Others (74936/2016;12167/2019) [2022] ZAGPPHC 425 (17 June 2022)
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sino date 17 June 2022
REPUBLIC
OF SOUTH AFRICA IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION PRETORIA)
CASE
NO: 74936/2016
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
17/06/2022
In
the matter between:
NATIONAL
AFRICAN FEDERATED CHAMBERS
OF
COMMERCE AND INDUSTRY FREE STATE
PROVINCE
First Applicant
NATIONAL
AFRICAN FEDERATED CHAMBERS
OF
COMMERCE AND INDUSTRY
Second Applicant
and
THE
MASTER OF THE HIGH COURT
First Respondent
HESKIA
DIKGANG MENTORO
Second Respondent
MORGAN
SONWABO NGUBANE
Third Respondent
BAMBATHA
SOLOMON KUTYUNGA
Fourth Respondent
ISHMAEL
DINNA MOFOKENG
Fifth Respondent
MOSUTHU
STEPHEN SHUPINYANE
Sixth Respondent
SESAMA
MARGARET RAMOKONE
Seventh Respondent
JOHANNES
PHALADI SANGWELA MATSOLE
Eighth Respondent
S.
NGIDI
Ninth Respondent
MATSIDISO
RASENYALO
Tenth Respondent
D
MOTSHABI
Eleventh Respondent
KGASANE
JOSEPH MASIU
Twelfth Respondent
NEO
MOKHOSOA
Thirteenth Respondent
CASE
NO: 12167/2019
In
the matter between:
NATIONAL
AFRICAN FEDERATED CHAMBERS OF
COMMERCE
AND INDUSTRY, FREE STATE PROVINCE
First
Applicant
HESKIA DIKGANG
MENTORO
Second
Applicant
ISHMAEL DINNA
MOFOKENG
Third
Applicant
MORGAN SONWABO
NGUBANI
Fourth
Applicant
and
MASTER
OF THE HIGH COURT, PRETORIA
First
Respondent
CUNUKELO
JAKKIE KONZIWE
Second
Respondent
MASESE
EVA
MOILWA
Third
Respondent
MANTSANE
ANASTASIA BERENG
Fourth
Respondent
GECELO
THEMBEKILE EDWARD SIDUMO
Fifth
Respondent
DIKELEDI
MARY FATIMA MASITHELA
Sixth
Respondent
TSHEPO
VINCENT MATSABA
Seventh
Respondent
NGAKUBANE
EDWARD CHARLIE
Eighth
Respondent
TSOGO
INVESTMENT HOLDING COMPANY
PROPRIETARY
LIMITED
Ninth Respondent
NATIONAL
AFRICAN FEDERATED CHAMBERS OF
COMMERCE
AND INDUSTRY
Tenth
Respondent
This
judgment is issued by the Judge whose name is reflected herein and is
submitted electronically to the parties/their legal representatives
by email. The judgment is further uploaded to the electronic file of
this matter on Caselines by the Judge or his/her secretary.
The
date of this judgment is deemed to be 17 June 2022.
JUDGMENT
DE
VOS, J
INTRODUCTION
[1]
In this matter two review
applications serves before me. The first review under case number
74936/2016 (‘First review’). The second review was issued
under case number 12167/2019 (‘Second review’).
The
dispute in both first and second reviews concerns the review and
setting aside the Master’s decisions to issue letters
of
authority to certain individuals authorising them to serve as
trustees of the NAFCOC Free State Trust Investment (‘The
trust’).
[2]
Adv. F Rautenbach appears for
the applicants in case number 12167/2019 (‘Second review’)
and the second to eight respondents in case number 74936/2016 (‘First
review’) is Advocate HF Oosthuizen SC. The second
applicant in
the application under case number 74936/2016 (‘First review’)
and the tenth respondent in the application
under case number
12167/2019 (‘Second review’) is The National African
Chamber of Commerce (NAFCOC).
[3]
The first respondent in the
first and second reviews, is the Master of the High Court.
The second
respondent in the first review and the second applicant in the second
review is Mr Mentoro. The first applicant in the
second review is
NAFCOC Free State (FS). The second to the fourth applicants in the
second review collectively are referred to
as the ‘The
Trustees’ (FS) and the second respondent in the second review
is Mr Konziwe. The ninth respondent in the
second review is referred
to as Tsogo Investment Holding Company Proprietary Limited (‘Tsogo’).
[4]
The crux of the first and second
reviews, is for the court to judicially determine which
individuals
should be authorized by the Master to be appointed to act as the
trustees of the NAFCOC Free State Investment Trust
(‘The
Trust’).
[5]
On the 13 of May 2018 (2018
letters of authority) were issued by the Master of the High
Court
authorising the second to the eighth respondents in the second review
to act as the trustees of the FS trust. It is this
decision that is
now under review. The 3 applicants in the second review application,
contends that these appointments are indefensible
as the decision was
taken as a result of blatant fraud perpetrated by Konziwe, the second
respondent in the second review who was
the deponent in the first
application on behalf of National African Federated Chambers of
Commerce and Industry Free State Province,
alleging that himself and
other individuals were the duly elected Trustees of NAFCOC Free
State, a recognised affiliate of the
second appellant (first
review)(NAFCOC). The second applicant (Mentoro), as well as the 3
rd
and 4
th
Applicants in the second review, denies Konziwe’s
allegation and claims that they are the duly elected Trustees of The
Trust;
That Konziwe and his cohorts, who were appointed by the Master
as Trustees of the Trust, be removed and that the second to fourth
applicants in the 2
nd
review be appointed.
NAFCOC
[6]
Before dealing with the matters
before me, it is necessary to deal with the establishment
of NAFCOC
in 1964 as a Black Economic Empowerment entity, for that purpose, a
trust was created and trustees were duly appointed.
This trust serves
the interest of all black economic empowerment in South Africa.
6.1 In
1994 NAFCOC decided to realign itself in accordance with the
country’s boundaries nationally extending
to 9 provinces, as
well as regions/districts and local branches in line with operational
sphere of municipalities. In addition,
NAFCOC made further provision
to allow affiliation of industries ‘specific sectors’ as
autonomous affiliates, with
own Constitutions and representative
organizations from industries ‘specific sectors’ of the
economy such as transport,
manufacturing, tourism and leisure,
informal traders, agriculture, construction and so on.
6.2 At
that stage the sectoral organizations were already autonomous and
independent, they had their own names,
constitutions, logos and
emblems. NAFCOC considered these affiliates from outside to be a
federation of sectors, and consequently
they became entitled to use
their own different names as affiliates and continue to operate as
independent, and/or autonomous bodies
as before. As independent
bodies they also had their own assets and finances as well as unique
programmes of action. NAFCOC also
decided, based on the new
Constitution of the republic, that NAFCOC would structure and
determine its provincial affiliates in
each province as its divisions
or branches with the proviso that all those provincial structures
would be required to adopt the
use and not ownership of NAFCOC name,
its colours, logos and office infrastructure as well as operational
resources directly or
indirectly through NAFCOC’s other
investment entities to be created from time to time. That was
invariable practice in all
provinces. It never happened that a
provincial affiliate was first formed and then joined NAFCOC as
member.
6.3
NAFCOC Free State was one of such provincial affiliates. The
affiliates were respectively independent in that
they could hold
their own meetings, employ some staff, but they did that within the
operational framework and program of the national
body. They also
elected office bearers in terms of the constitution of NAFCOC which
ought to be recognised as (invariably happened)
by the national
executive committee. They were further required to appoint four of
the office bearers as delegates to form part
of NAFCOC Federal
Council and to attend all NAFCOC’s federal council meetings and
other activities. An ‘interrelationship’
was therefore
created between NAFCOC and its provincial affiliates as it appears
from clause 12.2 of NAFCOC’s Trust Deed
which provides that
‘members admitted to membership shall be entered into the
province’s register of members and the
data from such a
register shall be transferred on a quarterly basis to the national
membership register at the national office.’
Clause 12.2
creates an obligation on each provincial affiliate to transfer data
of the constitute affiliate members (CANS) to the
mother body. Those
CANS had to attend periodic meetings of NAFCOC national, and had to
be recognised by the National Executive
Committee.
6.4 NAF
is the business leg of NAFCOC, NAFCOC had direct financial interest
in this entity who controlled different
investments. NAF held in turn
and as required by NAFCOC had to make annual financial allocations to
each of the NAFCOC Provincial
affiliates. The financial contributions
amount to a few hundred thousand rand per year to serve as
operational support in order
to pay staff, rental, stationery
expenses and so on. Over many years those allocations were the only
source of money received by
NAFCOC provincial affiliates to manage
their affairs. NAF Hold was created in 1998 when the NAFCOC Council
resolved to establish
a 100% NAFCOC owned investment company. NAF
Hold was created to participate in the new Black Economic Empowerment
programme in
order to capitalise NAFCOC affiliates. Its primary and
sole objective was to act as an investment company within NAFCOC’s
table with the view to acquire and hold shares in various companies
and businesses for the sole benefit of NAFCOC and its affiliated
members/trusts.
6.5 A
year later NAFCOC also formed the NAFCOC investment trust (IT9279/99)
through which it initially owned and
had 100% shareholding in NAF
Hold. In 2005 and 2007 NAFCOC Council and NAF Hold resolved to dilute
the NAFCOC Investment trust
in favour of NAFCOC Affiliated structures
trust having a direct participation and representation in both NAF
Hold shareholding
and directorship.
6.6
This unbundling and watering down of the NAFCOC Investment Trust
interest in NAF Hold, were done through the
establishment of a
dedicated trust for NAFCOC Affiliates. Each such trust then held a
proportion of the shares in NAF Hold. Each
board of trustees would be
appointed strictly by the NAFCOC affiliate linked to it. All NAFCOC
provincial affiliates trusts were
required to carry a derivative of
the name ‘NAFCOC’ like the NAFCOC provincial affiliates
to which they were linked.
As a result, NAFCOC Free State Trust was
registered by the Master of the High Court.
6.7
NAFCOC then had a board meeting to place a long term strategy to
serve business communities and address the
rising unemployment in the
country. NAFCOC and its affiliates focused on sustainable small,
medium and metro enterprises creation
as its target market.
6.8 The
method adopted enables an affiliate the beneficial, responsible and
discretionary rights to dispose of
funds of an investment that
becomes available to the trust by virtue of the good name, reputation
and work of NAFCOC and its associated
entities such as NAF Hold. The
2008 Constitution of NAFCOC expressly relates to ‘NAFCOC Free
State’, (a provincial
affiliate of NAFCOC). It expressly
granted NAFCOC Free State the right to appoint trustees. It further
provides that NAFCOC Free
State is a beneficiary of NAFCOC. Clause
12.5 of the 2005 Constitution of NAFCOC further provides that the
rights, benefits and
obligations of membership were not
transferrable. By necessary implication none of the rights or
obligations could be transferred
to a non-member as they are rights
which accrued to a relevant member in his capacity as such.
6.9 The
trust deed of NAFCOC manifests an intention to keep affiliates and
the trust inside the walls of the broader
structure of NAFCOC. This
is confirmed by the provisions of clause 13.4 that provides that a
member whose membership has been suspended
or has been expelled may
not use the name of NAFCOC and/or its emblem and participate in any
of its structures or activities, nor
may participate in any activity
of any trust established by NAFCOC or its affiliates. It is
therefore, the clear and undisputed
intention of the constitution of
NAFCOC that the benefits of using the empowerment structures of
NAFCOC is reserved for itself
and its members.
6.10 NAFCOC further
contends that it has the right to prevent abuse of its name vis-à-vis
trusts. The first applicant
in the second review falsely claims that
it is the affiliate of NAFCOC and that the first applicant in the
second review claims
to have a right to appoint trustees and for that
purpose intends acquiring letters of authority from the Master. It is
contended
on behalf of NAFCOC that NAFCOC good name and reputation is
affected by the actions of the first applicant in the second review.
It is further contended that the first applicant in the second review
NAFCOC Free State has chosen not to be a member of NAFCOC,
is not
participating in its activities as a member, did not renew its
membership annually and did not make financial accountability
reports
available to it. NAFCOC relies on clause 6.9 of the 2008 Constitution
were it is provided that NAFCOC may firstly ‘co-ordinate
the
activities of its members’ and then take action against them by
suspending or terminating membership. It is contended
that as soon as
a membership is terminated or suspended it goes without saying that
the entire right to use the rights granted
by NAFCOC to its
affiliated members ceases. It is further contended that NAFCOC must
serve its member’s interest. As NAFCOC
provincial affiliates
are major beneficiaries under the various schemes and receive
dividend payments that creates a major source
of trust income which
is repetitive in nature. It is contended by NAFCOC that the first,
second, third and fourth applicants in
the second application to
which Mentoro, Mofokeng and Ngubane belong are not elected appointees
of NAFCOC Free State and act for
their own benefit as beneficiaries,
thereby denying the real NAFCOC affiliate in the Free State and its
members to have access
to certain intended benefits.
[7]
In contrast, hereto the first
four applicants in the second review contends that they are
lawfully
entitled to be appointed by the Master as trustees of the National
African Federated Chambers of Commerce and Industry
Free State
Province.
NAFCOC
FREE STATE
[8]
The crux of the first and the
second review is for the court to judicially determine which
individuals should be authorised by the Master to act as the trustees
of the NAFCOC Free State investment trust (‘the trust’).
The trust known as the National Federated Chambers of Commerce and
Industry Free State Province was established in terms of a trust
deed
dated 22 February 2005 (see Annexure HN12 pages 192 to 205). The
beneficiaries of the trust include NAFCOC Free State, as
well as the
branches and regions of NAFCOC Free State see FSRFA (page 18
paragraph 34.1). NAFCOC Free State is autonomous, independent
and
voluntary association with its own constitution (see HM2 pages 63 to
88). The trust owns 830 redeemable non-participating preferent
shares
in Tsogo. (See Annexure HN10 page 183 and Annexure HN14 page 2).
These shares were issued on 15 October 2010 and were redeemable
on
the 16th October 2017. This trust has since 2012 annually received
dividends on the preferent shares, which Tsogo paid as follows
into
the FS Trust bank accounts of FS Trust on 25 April 2013 the sum of
R1 862 775.62, on 25 April 2014 the sum of R1
732 242.90.
On 15 April 2015 the sum of R1 980 027.60 (see Annexure HN 1-6B page
213 and HN 1-16C).
8.1 In
the period since the FS trust acquired the preferent shares and
received the dividends accruing to these
shares, its trustees were
comprised as follows; On 7 January 2010, NAFCOC Free State executive
committee appointed Mr Molya (the
erstwhile president of NAFCOC Free
State) and other trustees as trustee of the trust. The other trustees
included SM Ramokone,
SD Mbuli, D Makatsa…….and MC
Leeuw. (See Annexure HN17 page 216).
8.2 The
Master issued letters of authority to these individuals on 9th March
2010. See Annexure HM 25 page 278.
The validity of the 2010 letters
of authority were never challenged.
8.3 On
17 March 2012 NAFCOC Free State’s council appointed Mr Mentoro
(the second respondent in the first
review and the second applicant
in the second review, as the president of NAFCOC Free State Executive
Committee and appointed Mr
Mentoro and others as the trustees of the
trust. (See Annexure HN 23 to HM 24 page 279). The Master issued
letters of authority
to these individuals on 7 May 2012. (See
Annexure HN 25 page 278). The validity of the 2008 letters of
authority were never challenged.
8.4 On
15 May 2014 NAFCOC Free State executive committee again appointed Mr
Mentoro and others as trustees of
the trust. (See Annexure HN
26 PAGE
279).
The individuals authorised in the 2014 letters of authority
were the same as the individuals authorised by the 2012 letters of
authority save for Mr KJ Masiu, who passed away. The validity of the
2014 letters of authority was challenged for the first time
only two
years later in the first review application which application was
issued on the 23rd September 2016, a few months before
the
significant larger redemption value of the preferent shares fell due
for payment.
8.5
Throughout this period NAFCOC Free State trust continued to be
administered under the leadership of Mr Mentoro.
Mr Mentoro signed
all the audited financial statements of NAFCOC Free State, which
reflected payments of a portion of the dividends
received from Tsogo
to NAFCOC Free State. Mr Mentoro also addressed and received
correspondence in respect of the dividends from
Tsogo.
8.6
NAFCOC Free State Trust was never under the control of the
individuals associated with NAFCOC as applicants
in the first review
application comprising of ‘Moloi, Konziwe and other. These
individuals took no steps whatsoever to control
NAFCOC Free State or
any of its assets nor did they take any steps to prevent Tsogo from
making payments to NAFCOC Free State.
The only attempt made by
Konziwe and Moloi to take control of the trust was by way of notice
dated 31 May 2011 purporting to call
a meeting of the trustees of the
trust which resulted in NAFCOC Free State under the chairmanship of
Mr Mentoro obtained an interdict
against them. See Annexure HN 22
page 270. Nothing further was heard from Konziwe, Moloi and the
parallel structure that NAFCOC
claims they headed. See SAHR page 26
paragraph 69. There is no evidence whatsoever of any activities by
the parallel structure
which could indicate that a parallel structure
actually exists as a voluntary association.
8.7 On
23 September 2016 Konziwe and his group instituted the first review
to review and set aside the 2014 letters
of authority to Mentoro et
al and declare NAFCOC Free State under the leadership of Mr Mentoro
to be invalid and have no standing
as such. This application is
opposed.
8.8
Tsogo consequently obtained an order from the Free State High Court
on 24 November 2016, ordering Tsogo to
retain the dividends and
redemption income in respect of 830 cumulative redeemable
non-participating preferent shares issued to
the Free State trust as
well as other monies which may in future become due and payable,
pending the Court’s determination
of the lawful trustees of the
Trust (FS). The value of these 830 cumulative redeemable
non-participating preferent shares amounts
to an amount of
approximately R35 000 000 (thirty-five million rand).
8.9 On
10 May 2018 the parties appeared before Khumalo J to argue the first
review. Due to the fact that the court
file was substantially
incomplete it was postponed by agreement. Shortly thereafter on the
10 July 2018 NAFCOC Free State’s
attorneys (‘Mr
Ponoane’), (representing the Mentoro-group) received a letter
from VFV Attorneys who represent NAFCOC
and Mr Konziwe. (See Annexure
HN 36 pages 300 to 301. The letter pointed out that the Master had
issued letters of authority in
2018and NAFCOC had accordingly
abandoned prayers 4, 5 and 6 of the notice of the first review
application. The 2018 letters of
authority were issued to Konziwe and
his cohorts.
8.10 The applicants
in the second review only learnt about the decision of the Master by
virtue of VFV Attorneys letter addressed
to them informing them about
the authorisation. At no time did the Master inform the applicants in
the second review of its intention
to take the decision or invite
representation from them, as the existing beneficiaries and trustees
of the trust.
8.11 On 12 July
2018 Mr Ponoane on behalf of the trust responded to VFV Attorneys
letter expressing extreme concern that the
2018 letters of authority
were issued in circumstances were ‘it was, and remains legally
impossible for your clients to obtain
the letters of authority. Doing
so it’s completely at odds with the status quo ante between the
parties. (See HN 37 page
302 to 305). Mr Ponoane requested various
documents from VFV Attorneys and post various questions about the
issuing of the 2018
letters of authority. VFV Attorneys failed to
deliver or respond to this letter. (See Annexure HM 38 page 306.)
8.12 In ensuing
months, the applicants in the second review carried out various
investigations to determine how the 2018 could
have been issued in
spite of the Master’s undertaking not to appoint Trustees until
finalisation of the first review which
was still pending. Mr Mentoro
and the Master between 17 August 2018 and 31 October 2018. In
correspondence to the Master, Mr Mentoro
indicated that the issuing
of the 2018 letters of authority was unlawful and called upon the
Master to withdraw and rescind the
2018 letters of authority pending
the outcome of the first review Mr Mentoro further called upon the
Master to provide copies of
all correspondence, documents and
information that led the Master to take the decision. The master
initially provided no response,
then requested a meeting with Mr
Mentoro and NAFCOC Free State and finally stated the Master was
Functus Officio.
8.13 Mr Mentoro
approached NAFCOC North West and NAFCOC Limpopo who had experienced
similar attempts to ‘highjack’
their trusts. He uncovered
false documents that have been submitted to the Master in an attempt
to take control of the NAFCOC North
West Trust. (See Annexure HN 39
to HN 42 pages 307 to 310) and a letter from the Master to NAFCOC
Limpopo agreeing to withdraw
and rescind letters of authority that
were procured for the NAFCOC Limpopo trust. (See Annexure HN 47 page
342 to 344.)
8.14 Mr Mentoro
also wrote to NAFCOC’s erstwhile attorneys to obtain copies of
the documents in their possession, but
this proved to be
unsuccessful. (See HN 51 page 356.)
8.15 Mr Mentoro
also filed a request for documents with the Master in terms of the
Promotion of Access to Information Act,
2000 (Act 2 of 2000) in order
to get access to the documents relating to the Master’s
decision but these documents were also
not forthcoming. (See HN 52
page 358 and HN 54 page 370).
8.16 The applicants
in the second review then instituted a second review (See SR pp 1-6)
and subsequently finally obtained
access to the Master’s file
relating to his decision. Access was only gained to the Master’s
file after the Master
had failed to deliver the record within the
time periods prescribed in Rule 53 and was threatened with an
application to compel
compliance. (See Annexure HN 57 page 407 to 408
and Annexure HN 58 pages 409 to 410.)
8.17 Applicants in
the second review contends that these documents that the Master
refused to provide throughout the previous
year finally confirmed
that the decision was taken as a result of fraud and is unlawful
which was perpetrated as follows.
8.17.1
A letter dated 17 April 2018 was authored to the Master containing
various misrepresentations including,
inter alia
, that the
litigation between the parties was resolved in favour of the trustees
led by Konziwe (ie. the applicants in the first
review application)
when this was not so and the first review remained pending.
8.17.2
Attached to this letter are various documents including
inter alia
affidavits deposed to by the second, six and eighth respondents in
the second review which claimed that:
8.17.2.1
each individual was a trustee of the trust
8.17.2.2
each individual was “not aware of any Court action and/or Court
documents
that would prevent the Master from amending the letter of
authority” (8.17.2.3) letters of authority dated 9 March 2010
were
the latest and the only letters of authority of the trust.
8.18 Each of these
statements were, at least to conceivious knowledge, false in that
Konziwe and his cohorts were not trustees
of the trust as they were
not named in the 2014 letters of authority which prevailed at that
time. (See annexure HM8 page 156).
Konziwe was also well aware that
the first review was pending. Besides deposing to the affidavits on
behalf of the applicants in
the first review, he attended the Court
proceedings on 10 May 2018 when the learned Judge ordered the first
review to be postponed
sine die.
Konziwe deposed to an
affidavit fraudulently claiming that the original authorisation was
not in his possession “as the status
have changed over the
years and we only have copies”. (See annexure HM 170 page 152.)
Konziwe knew the trustees and were
in possession of the original 2014
letters of authority that Mentoro and other individuals (cited as
applicants in the second review
application) were duly appointed as
Trustees.
8.19 It is
abundantly clear from the evidence before me that the Master acted
upon the strength of this information received
from Konziwe and his
group, along with other false documents, to issue the 2018 letters of
authority. The Master did so without
affording the applicants in the
second review, as the beneficiary of the trust and the existing
trustees - the right to make representations
and acted in breach of
the Master’s own undertaking. (See annexure HM31 pages 285-286)
and the provisions of the Free State
High Court order which required
the “judicial determination” of which individuals should
be authorised by the Master
as the trustees of the trust. (See
annexure HM11 page 164-165). It is contended by the applicants in the
second review that the
Master’s decision to appoint the
trustees obtained by Konziwe and his co-applicants in the first
review application must
be reviewed and set aside. It is clear that
the decision of the Master to appoint Konziwe and his co-applicants
was taken as a
result of blatant fraud perpetrated by Konziwe and his
cohorts. It is trite that an administrative decision will be vitiated
when
taken as a result of fraud. See
Merafong City v Anglo Gold
Ashanti Limited
2017 (2) SA 2011
CC par 53. The respondents in
the first review who are also the applicants in the second review
application confirmed that fraud
was committed. It is important to
note that after the respondent’s in the first application filed
the opposing affidavits
the first application became moot. None of
the applicants in the first application contested the version of the
respondents in
the first application and/or the applicants in the
second application. The only issue remaining in the first review
application
is the question of costs. It is clear that due to the
finding that I am going to make that the respondents in the first
application
are entitled to be awarded their wasted costs. When this
matter was argued no real argument was put forward on behalf of the
applicants
in the first application to contest same. It is clear that
on this uncontested ground alone this Court must interfere, intervene
and declare the Master’s decision as unlawful as the Court is
obliged to do so and has no discretion to order otherwise (See
Allpay
Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer
of the South African Social Security Agency
2014- (4) SA 179
(CC)
paragraph 25 “Once a ground of review … has been
established there is no way to shy away from it”. Section
172(1)(a) of the Constitutional requirements decision to be declared
unlawful. The consequences of the declaration of unlawfulness
must
then be dealt with in a just and equitable order under section
172(1)(b). Section 8 of PAJA gives detailed legislative content
to
the Constitution’s “just and equitable remedy”. See
ALLS Electoral Commission v Mhlope
2016 (5) SA (1) CC
paragraph 130.
8.20 To unravel the
disputes between the different parties it is important to take note
that in the founding affidavit in
the first review (which was deposed
to by Konziwe) on behalf of the applicants it was the contention of
both NAFCOC, the second
applicant in the first review and Konziwe and
his cohorts that two voluntary associations existed in the Free State
namely (1)
The National African Federated Chambers of Commerce Free
State (“NAFCOC FS”) (who was cited as the first applicant
in the first review and (2) a structure purporting to be NAFCOC Free
State “which structure is in terms of clause 3 of the
Constitution a corporate body with legal personality i.e and a
universitatus. (See annexure CK6 page 73 and annexure HM2 page 69.)
8.20.1
The second structure referred to is the structure operating under
the
chairmanship of Mr Mentoro, who is clearly NAFCOC Free State, the
first applicant in the second review. Konziwe, contended
that NAFCOC
Free State had existed and operated” prior to 25 August 2010.
In the same breath Konziwe says in the first review,
that the first
applicant in the first review “was established on 25 August
2010”. (Compare page 12 paragraph 18.4 and
paragraph 18.5). In
the replying affidavit in the first review Konziwe stated that “the
crux of the case before the court
is whether or not the first
applicant … is the legitimate and legal affiliate of NAFCOC”
in the Free State province,
or whether the parallel structure
represented by the respondents (Mentoro et al) is such an affiliate
thereby confirming the existence
of two voluntary associations. (See
page 298 paragraph 4.) Konziwe contradicted his version in the
founding affidavit in the replying
affidavit when he stated the
following: a critical turning point in the present matter is 25
August 2010 that was a date of which,
during a time of considerable
strive and division within NAFCOC and its structures, the election
took place of the Executive Committee
of NAFCOC Free State with Mr
Michael Molleyi as chairman. Mr Molleyi is firmly within the faction
described in the founding affidavit
as the “Mavundla faction”
of which the applicants and I form a part. On that day Nafcoc Free
State was re-launched
in the sense that a new executive committee was
elected to serve for a new term of office. At that stage (25 August
2010) …
Mr Mentoro, and Mr Mlotja both erstwhile officials of
NAFCOC Free State, had already defected to a parallel structure
established
by the Hlongwane Faction.) (See FRRA PAGE 302.)
8.20.2
It is clear that both versions cannot be true. There is a clear
difference between the establishment of the first applicant of 25
August 2010, the version in the founding affidavit) and the mere
election of a new executive committee. The allegation that Mr Mentoro
and Mr Mlotja had “defected to a parallel structure
established
by the Hlongwane faction” prior to 25 August 2010, was never
mentioned in the founding affidavit and no evidence
was provided.
Konziwe also failed to place any facts before the Court as to when
the alleged election occurred, when and by whom
the parallel
structure was established; and whether the parallel structure is in
fact the voluntary association which existed and
operated prior to 25
August 2010 and whether the parallel structure continued to exist as
NAFCOC Free State (the first applicant
in the second review.) To make
matters worse for the applicant’s in the first review Konziwe
failed to present any evidence
that an alleged new executive
committee of NAFCOC Free State took any step to take control and
manage NAFCOC Free State. Safe to
refer to “subsequent
elections of the executive committee that lawfully replaced the 2010
executive” and the alleged
fulfilment of “its annual
affiliation requirements” without providing any details or
supporting evidence of these false
allegations, no evidence was
provided of any activities by NAFCOC Free State under the control of
the alleged new executive committee.
8.20.3
Konziwe also contradicted the allegations that “subsequent
elections of executive committees” (plural) occurred by stating
in the affidavit in support of the application for condonation
that
there has only been one election of an executive committee since 25
August 2010, which election occurred on 18 June 2013.
(See FR
affidavit in support of condonation page 572 paragraph 6.) No
supporting documentation of such an election was established
or
attached to such affidavit and such allegation is in direct conflict
with a resolution by NAFCOC which indicated that the alleged
election
occurred in 2012 under the direct supervision and monitoring of the
NAFCOC National Working Committee.” (See annexure
CON4 page
601.) (See FR affidavit in support of condonation page 575 paragraph
15.1).
8.20.4
The respondents in the first review dealt comprehensively with
the
documentation in respect of the 25 August 2010 meetings and
demonstrated that the alleged meetings were unlawfully convened
and
that, as a consequence, the resolutions passed at the meetings were
invalid and of no force and effect. (See FR answering affidavit
application for condonation page 643 paragraph 44.) Neither NAFCOC
nor Konziwe has responded to the contentions in this regard
and have
effectively conceded that the said meetings were unlawfully convened.
During argument I was specifically referred to the
so-called note
sent to members obviously belonging to the Konziwe group to attend a
meeting on the 25
th
of August 2010. This document is not
dated nor is it signed and was never sent to all the members and the
beneficiaries belonging
to the existing NAFCOC Free State Trust.
8.20.5 NAFCOC, the second
applicant in the first review application contended in the answering
affidavit in the second review where
it is cited at the tenth
respondent, that a new voluntary association was formed on 25 August
2010. NAFCOC adopted the following
conflicting versions. It is
alleged that NAFCOC Free State was “formally established or
re-established” om 25 August
2010. (See page 587 paragraph 23.)
NAFCOC also alleged that NAFCOC Free State was re-launched” on
25 August 2010 “in
the sense that the new executive committee
for the province was duly elected … to serve for a new term of
office. (See SRAA
page 587 paragraph 24.) It appears that NAFCOC as
tenth respondent in the second review takes the stance that a new
voluntary association
was formed on 25 August 2010. “(A) group
of persons representing affiliates of NAFCOC Free State, or bodies
expressing their
claim to be recognised as such, were gathered on the
day, and made known the decision to be represented by that executive
committee,
and collectively to be recognised as an affiliate under
the leadership of that executive committee … in terms of the
constitution
of NAFCOC”. (See SRAA page 65 paragraph 154.)
8.20.6
The version that a new voluntary association was formed in 25
August
2010 was raised as a defence to the applicants’ evidence in the
second review that the meetings of 25 August 2010
were not validly
called and stated: “(E)ven it is correct in contending that the
meetings of 25 August 2010 were not validly
called in terms of the
existing constitution of NAFCOC at the time, that does not assist the
applicant’s case. Since that
time the voluntary association
represented by the executive committee elected on that day (and its
successors) has been recognised
by NAFCOC as envisaged in the
Constitution and on a number of occasions operated as an affiliate in
terms of the NAFCOC constitution
and renewed its subscription and
affiliate annually. (See SRAA page 629 paragraph 16.)
There cannot be any doubt
that this admission, read with other paragraphs of NAFCOC’s
answering affidavit, proves that it
is NAFCOC’s case that the
new voluntary association was formed on 25 August 2010 and that as a
consequence two voluntary
associations exist – one led by Mr
Montoro and another led by Konziwe. (See SRAA page 626 paragraph
156.)
[9]
In the papers before me the applicants in the second review clearly
proved that the
documentation relied on by NAFCOC did not support its
contention that a new voluntary association was formed on 25 August
2010.
The notice of a special general meeting annexure GM 5 refers to
a special general meeting to be held by constituent affiliate members
of an existing voluntary association “NAFCOC Free State FS”,
which is governed by its constitution third amendment
of 2010., which
constitution was adopted and signed at Emnotweni on 6 May 2010.”
NAFCOCK attempted to distance itself from
this by suggesting that the
reference to such a constitution was incorrect that the notice
intended to refer to the 2008 constitution.
(See AA page 625
paragraph 155.) This was presumably done to escape the fact that no
such constitution exists. NAFCOC did not contend
that a new voluntary
association was formed prior to 25 August 2010, the notice clearly
envisaged a meeting of the existing NAFCOCK
Free State.
9.1
There cannot be any doubt that the express purpose of the alleged
council meeting on 25 August 2010 was to
remove the executive
committee of the NAFCOC Free State and to elect a new executive
committee and not to form a new voluntary
association.
9.2
However, to make things even worse for NAFCOC, the tenth respondent
in the second review, showed that there
is no proof that the
individuals who attended the alleged meeting intended to and formed a
new voluntary association. The minutes
of the NAFCOC executive
committee held on 9 September 2010 similarly do not reflect that the
new voluntary association have been
formed on 25 August 2010, but
rather that the NAFCOC Free State executive committee had been
replaced and NAFCOC’s executive
committee “approved …
the new elected executive committee”. (See annexures GM6 page
72-79.) Consisting of Molloyi,
Konziwe and others and that NAFCOC
Free State was “relaunched”.
[10]
There can only be one NAFCOC Free State as properly registered in the
Masters Office in the form
of a trust. That entails that if there was
a meeting of the duly registered trust on 25 August 2010 it must be
shown that the meeting
on 25 August 2010 was lawfully convened and as
a consequence, the purported resolutions passed are valid and in
force. I have already
pointed out that no such lawfully convened
meeting was held. The notice calling such meeting was unsigned and
undated and not even
sent to all the members. The purported removal
of the executive committee and election of the new executive
committee did not comply
with any of the provisions of the 2008
constitution and were thus invalid and of no force and effect.
Notwithstanding the allegation
contained in paragraph 57 of the
founding affidavit that the meeting of 25 August 2010 were invalid
and no valid resolutions can
as a result therefore have been passed.
NAFCOC failed to deal with paragraph 57 of the founding affidavit
effectively conceded
that the 25
th
August 2010 meetings
were invalid.
[11]
It therefore follows that if the executive committee of NAFCOC Free
State was not removed. Mr
Mloja remained the president of NAFCOC Free
State until he was succeeded by Mr Mentoro and that all further steps
by NAFCOC Free
State, its establishment as a trust dated 22 February
2005 are under the control of the properly elected trustees of that
trust
until today. It is further quite clear that the beneficiaries
of the tenth respondent in the second review application includes
NAFCOC Free State, as well as the branches and regions of NAFCOC Free
State.
(12)
NAFCOC Free State is an autonomous and independent voluntary
association with its own constitution.
This trust therefore owns 830
redeemable non-participating preference shares in Tsogo. The shares
were issued on 13 October 2010
and were redeemable on 16 October
2017. The trust has annually received dividends on the preference
shares from the 10
th
respondent paid by Tsogo which was
paid into the bank account of NAFCOC Free State and distributed to
its members. Furthermore,
the applicant in the second review has
proved that the dividends accruing from his shares were duly handled
and distributed by
its trustees appointed from time to time. The
individuals authorised in the 2014 letters of authority were the same
as the individuals
authorised by the 2012 letters of authority. Safe
for Mr Masiu who had passed away. As indicated before, the validity
of the 2014
letters of authority was only challenged for the first
time two years later in the first review application, which
application
was issued on 23 September 2016 (ie. a few months before
the significantly larger redemption value of the preference shares
fell
due for payment.) It is not contested that throughout the period
of existence NAFCOC Free State trust continued to be administered
under the leadership of the different chairman’s and eventually
under the leadership of Mr Mentoro. Mr Mentoro signed all
audited
financial statements of NAFCOC Free State, which reflected payments
of a portion of the dividends received from Tsogo to
NAFCOC Free
State. Mr Mentoro also addressed and received correspondence in
respect of the dividends from Tsogo. Neither the trust
nor NAFCOC
Free State was ever under the control of the individuals associated
with NAFCOC as the applicant in the first review
application. It is
further clear that these individuals never took any steps whatsoever
to control NAFCOC Free State or any of
its assets nor did they take
any steps to prevent Tsogo from making payments to NAFCOC Free State.
Contrast thereto there is in
fact, no evidence whatsoever of any
activities by the parallel structure which could indicate that the
parallel structure actually
exists as a voluntary association. When
NAFCOC (10
th
respondent in the second review) that exist
only are registered NAFCOC Free State Trust, they pleaded that NAFCOC
Free State was
relaunched.
[13]
Based on the facts before me, there cannot be any doubt that the only
lawful representatives
of the National African Federated Chamber of
Commerce and Industry Free State Province are Mr Mentoro, second
applicant, Mofokeng,
third applicant and Ngubane, the fourth
applicant in the second review application. They are the duly elected
executive committee
of NAFCOC Free State and are entitled to be
reappointed to act as trustees by the Master. In conclusion it is
therefore my finding
that the existing executive committee, the
applicants, the second third and fourth applicants in the second
review are the existing
executive committee of NAFCOC Free State and
remains in control of NAFCOC Free State.
LOCUS
STANDI
[14]
The next question to be determined is whether NAFCOC, tenth
respondent in the second review application
has any standing to
oppose applicant’s application in the second review. The first
question is whether NAFCOC was legal interest
in the subject matter
of the first and second reviews, being the appointment of trustees of
the Free State trust. In
Ras NNO v Van der Meulen
(4) SA 17
SCA paragraph (9) and further page 05/2451 the Supreme Court of
Appeal held that only a beneficiary is entitled to seek
the removal
of the trustees of the trust. It is common cause that the
beneficiaries of National African Federated Chambers of Commerce
and
Industry Free State province (the first applicant in the second
review) application includes each branch in the region of NAFCOC
Free
State and any NAFCOC stalwart nominated by the executive committee of
NAFCOC Free State and approved in writing by the trustees
from time
to time. (See annexure HM 12 paragraph 1.1.2.2, record page 02/166.)
NAFCOC the tenth respondent in the second review
is a separate
voluntary association and is not a beneficiary of the Free State
trust. It accordingly has no legal interest in the
appointment of the
trustees of the trust. NAFCOC submits that the
Ras
decision
should be distinguished from the present application submitting that
the subject matter of the second review is the appointment
of the
trustees of the trust and not the removal of trustees. Applicants in
the second review submits that this argument is without
merit. It is
contended that the appointment and removal of trustees are two sides
of the same coin. Applicants in the second review
contends that
NAFCOC has no standing to oppose the second review or to seek a
declarator in a counter application. The departure
point of the tenth
respondent’s case in the second review is based on the meeting
held on 25 August 2010. It is contended
by the tenth respondent that
at that meeting a new executive committee was elected by the
affiliate and that these elected officials
were subsequently
recognised by NAFCOC. In the same breath NAFCOC concedes that it does
not oppose the applicants in the second
review prayer that the
trustees appointed by the Master (the Konziwe group) be removed.
NAFCOC contends as set out in its counter
application filed in
response to the second review application that this court must decide
the issue of the affiliate status of
the two contenders. It is
further contended that the first review creates a
lis pendens
in respect of the status issue in that the application to settle that
issue. Notice was given that the status issue as sought in
the first
review is withdrawn.
14.1 NAFCOC as tenth respondent
in the second review and applicant in the declaration based its
argument on their submission
that the election meeting on the 25
th
of August 2010 was an election held by the actual legal Free State
affiliate of NAFCOC, and was good in law. I have already dealt
with
this question and held that this meeting was unlawful. It is
contended that the election of the executive pursuant to this
meeting
was never challenged, reviewed or set aside and must therefore be
deemed to be valid in law unless set aside. NAFCOC, the
tenth
respondent in the second review raised elaborated arguments which are
based on the premises that the meeting of 25 August
2010 was lawful.
Due to my finding that this meeting was unlawful these arguments can
be ignored. The tenth respondent’s
reliance on the
Oudekraal
principle, see
Oudekraal
States (Pty) Ltd v City of Cape Town
2004 (6) 222 SCA namely that: “even an unlawful administrative
act is capable of producing
legally valid consequences for as long as
the unlawful act is not set aside” is ill founded. The
Oudekraal
principle applies to “
administrative
decisions by an organ of state
”. NAFCOC, the tenth
respondent in the second review, is not an organ of State.
In
Cronje v United Cricket Board of South Africa
2001 (4) SA
13681
(T) the applicant attempted to review certain decisions of the
respondent, which application was dismissed for
inter alia
the
following reasons:
“
The respondent is not a
public body. It is a voluntary association wholly unconnected to the
State. It has its origin in contract
and not in statute. Its powers
are contractual and not statutory. Its functions are private and not
public. It is privately and
not publicly funded…
The conduct of private bodies, such
as the respondent, is ordinarily governed by private law and not
public law. It does not exercise
public power and its conduct is
accordingly not subject to the public law rules of natural justice.
In exceptional cases private bodies
are vested with public powers by statute. They are then subject to
the rules of public law in
the exercise of those powers. Those rules
may expressly or by necessary implication prescribe the manner in
which their powers
must be exercised. If the repository of the power
does not exercise them in the prescribed way, its conduct is subject
to judicial
review under public law. But these consequences flow, not
from the nature of the body or the impact of its conduct, but from
the
underlying statute.
”
This
dictum
was approved in
Hare v The President of National
Court of Appeal N0 140
, 2009 JDR 1171 (GSJ) paragraphs 9-12.
In that decision the applicant similarly attempted to review certain
decisions of the sole
controlling body for motorsport in South
Africa. The application was dismissed on the basis that the decisions
of the respondent
was not subject to judicial review. Similarly, the
Supreme Court of Appeal held in
Calibre Clinical Consultants (Pty)
Ltd v National Bargaining Council for the Road Freight Industry
2010
(5) SA 457
(SCA) that the decisions of a bargaining council were not
subject to review and referred with approval to the
dictum
in
Cronje
. Similarly, the decisions taken by political parties in
determination of membership are not administrative action but
exercises
of private powers by bodies established by agreement.
14.2 Accordingly, it is my finding
that NAFCOC (2
nd
applicant in the first review and 10
th
Respondent in the second review) has no
locus standi
to oppose
the application of the applicants in the second review and the
second, third and fourth applicants in the second review
must be
appointed as trustees of the first applicant in the second review.
14.3 In my view the facts of
this case disclose that no valid decision was ever taken which
amounts to a nullity. The steps
taken by the applicant in the second
review is merely to confirm their
status quo ante
and must be
preserved. Any subsequent steps taken by the Master to appoint other
trustees should be reviewed and set aside. In
view of the decision in
Calibre Clinical Consultants
, the review of the expulsion (to
which reference is made in that decision) is not a public law review.
The decision is merely authority
for the proposition that a person
who contends that their expulsion was unlawful must challenge the
expulsion in a court of law
failing which the expulsion will, in the
words of
Oudekraal
, be “capable of producing legally
valid consequences”. The decision of
Cathcart Resident’s
Associaiton v Municipal Managers for the Amahlathi Municipality and
Others
(see division case number 3667 dated 3/4/14 and
Shunmugam
and Others v New Castle Local Municipality and Others; the National
Democratic Convention v Mathew Shunmugam and Others
2008 (2) ALLS
106 N confirmed the said legal principle and proceeded to hold as
follows:
“
The third respondent has
done nothing for a few months short of three years to challenge the
lawfulness of the termination of his
membership of the applicant. He
must be taken to have accepted it and, whatever doubts may arise as
to the legal pedigree of the
decision, it must be accepted as having
legally valid consequences until it is set aside.
”
14.4
In the present case the applicants in the second review application
were unaware of the meeting held on 25 August 2010.
They only became
aware on 9 May 2018 of that fact a few years later. They took steps
to rectify the position, firstly to obtain
information that was
refused until such time they obtained enough information to institute
the second review application.
During
argument on 15 and 17
th
of June 2020 which was heard by an Acting Judge of this division who
subsequently failed to give judgement, NAFCOC, tenth respondent
in
the second review’s counsel conceded that the purpose of the
meeting on 10 May 2010 was to elect a new executive committee
for
NAFCOC Free State and that a new voluntary association was not
established at the meeting. (See pages 07/91-07/93.) In view
of the
fact that there is no indication of an intention to establish a new
voluntary association, this concession was properly
made. I have
already said that the appointment of the new executive committee was
invalid because the meeting was not properly
called, the notice was
undated and unsigned. There was also no compliance with the rules of
natural justice. Clause 22.1.8 of NAVCOC’s
Free State
constitution at the time provided for the removal of an executive
committee member “by resolution duly passed
by their counsel
after a hearing of the matter has been held by the counsel.”
(See page 02/702). This did not happen. Clause
23.3 of NNAFCOC’s
Free State constitution at the time moreover provided that the
president can only be removed on “a
resolution adopted by two
thirds majority of all the council members present at the meeting of
the counsel specially convened for
that purpose. (See page 02/704)
which similarly did not happen. The contention of paragraph 44.1 of
the note that the alleged attendance
by the majority of constitute
affiliate members implies that the meeting was validly called falls
to be rejected on the following
factual and legal grounds:
(1)
the applicants in the second review in their founding affidavit,
stated that the Chairperson of NAFTO, the
president of NAFSEC and the
secretary of Lejweleputswa region were not even aware of the meeting
which, implies that there is no
evidence to support the contention
that the majority of the constituent affiliate members attended the
meeting.
(2)
non-compliance with the provisions of NAFCOC Free State’s
Constitution in respect of the calling
of meetings can only be cured
by unanimous consent and not by majority consent.
14.5 Furthermore,
the contentions in paragraphs 18.1, 24 and 47 of the note that the
meeting was not a meeting of NAFCOC Free
State but of the so-called
“
recognised affiliate
” (the alleged voluntary
association under the control of Konziwe and his cohorts) is in
conflict with NAFCOC’s version
in its answering affidavit
(tenth respondent):
“
That the Free State Affiliate
of NAFCOC had to be formally established or re-established under the
auspices of NAFCOC…
“
25. At that
stage (25 August 2010) … Mr Mentoro, and a Mr Mlotja, both
erstwhile officials of NAFCOC Free
State, had already defected to a
parallel structure established by the Hlonwane faction…”
The
content of the notice indicated that the purpose of the meeting was
to adopt a no-confidence resolution in the existing executive
committee of NAFCOC Free State, including Mr Mloja (the predecessor
of Mr Mentoro), and to elect a new executive committee. Therefore,
the new version must be rejected. The meeting was clearly intended to
be a meeting of NAFCOC Free State.
14.6 It follows that NAFCOC did
not recognise a new voluntary association as its affiliate on 9
September 2010 but that it
merely approved “NAFCOC Free State
affiliate’s new elected executive committee”, as
indicated in the minutes
of the NAFCOC executive committee meeting.
(See annexure GM6 page 02/736). The approval of the new executive
committee clearly
had no legal effect in view of the fact that the
election of such committee was invalid. This is confirmed by the fact
that Konziwe
and his group took no further steps to implement the
decisions of the meeting. It is further corroborated by the fact that
the
applicants in the first review (the Konziwe group) does not
oppose the applicants in the second review’s application that
the present trustees of NAFCOC Free State must be removed.
[15]
In the alternative to the above argument tenth respondent in the
second review, NAFCOC in its
answering affidavit which is also the
founding affidavit for purposes of the counter application, contends
that its constitution
constitutes a reciprocal set of obligations
between itself and its members. (see paragraph 129 page 629.) That a
member cannot
continue to enjoy the benefits of membership without
complying with each reciprocal obligation, notably to pay membership
fees.
That the legal relationship between NAFCOC and its members can
be determined as set out in clause 12.6 and 12.7 of its constitution
in the event of non-payment for sixty days of the due date of each
membership fee (clause 13.4) which provides that “a member
on
suspension or expulsion shall immediately cease to hold himself as a
NAFCOC member and/or affiliate. And so also cease to use
the name
NAFCOC and/or its emblem and shall cease to participate in any
activity and/or structure of NAFCOC including any trust
or company
established by NAFCOC and its affiliates whilst this suspension or
expulsion is in force.” It is contended that
under the
circumstances the first applicant in the second review is not a
member of an affiliate of NAFCOC and has no
locus standi
to
bring the main application. This argument must fail and must be
rejected on the following factual and legal grounds. In view
of the
fact that there was at all times only one NAFCOC affiliate in the
Free State it follows that NAFCOC recognised NAFCOC Free
State as its
affiliate on 9 September 2010. NAFCOC, the tenth respondent in the
second review fails to distinguish between the
NAFCOC Free State’s
leadership and the acknowledgement of NAFCOC Free State.
(16)
NAFCOC is not a party to the trust deed and it is not entitled to
decide who the beneficiaries of the
trust are and effectively
substitute one beneficiary for the other. Even if NAFCOC Free State
is no longer acknowledged by NAFCOC
as its affiliate in the Free
State (which is not conceded by the applicant in the second review)
it does not imply that it is no
longer a beneficiary of the trust.
There can only be one NAFCOC Free State which was validly created as
set out in the trust deed
and as registered by the Master.
[16.1)
NAFCOC’s reliance on the quasi-contract of the NAFCOC
constitution as referred to in the founding affidavit for purposes of
the counter application is based that its constitution constitutes
a
reciprocal set of obligations between itself and its members.
Practical consideration sometimes requires a voluntary association
to
establish affiliated associations. In these instances the hierarchy
structure develops from a central association. On the other
hand,
independent associations in a particular sphere may deem it expedient
to regulate those matters of common concern to them
on a regional
provincial or national basis. Whichever way the hierarchy structure
develops the status and
locus standi
in … and of
interaction between the constituent associations will be determined
by the provisions of the respective constitutions
or by the central
association’s constitution as the case may be. See LAWSA 2
nd
edition vol. 1 paragraph 624.
(16.2)
In my view NAFCOC Free State enjoys a separate legal personality
as a
voluntary association, therefore only NAFCOC Free State as the
voluntary association, is capable of being recognised by NAFCOC.
The
composition of NAFCOC’s Free State executive committee which
does not enjoys separate legal personality, is irrelevant
for
purposes of an affiliation with NAFCOC. NAFCOC, cannot as it attempts
to do, recognise a set of individuals comprising an executive
committee as opposed to the voluntary association itself. NAFCOC
cannot fully recognise a group of individuals as its seeks to
do,
which individuals, in any event, did not dissolve or form a new
executive committee of NAFCOC Free State.
(16.3)
Whether or not Konziwe validly dissolved and re-launched
NAFCOC Free
State’s executive committee is therefore irrelevant to whether
or not NAFCOC Free State is a recognised affiliate
of NAFCOC, which
is common sense. NAFCOC Free State, accordingly is and remains an
affiliate of NAFCOC. It could never have been
the intention of the
founder and the initial trustees that NAFCOC, which is a separate
voluntary association from NAFCOC Free State,
and not a party to the
trust deed or the beneficiary of the trust would have the power to
effectively decide who the beneficiaries
of the trust from time to
time would be. NAFCOC’s interpretation of the trust deed is to
the effect that removal of “recognition
by NAFCOC of an
affiliate sectoral member implies that such voluntary association
seizes to be a NAFCOC affiliate” within
the meaning of clause
1.1.2.8 and thus seizes to be a beneficiary of the trust in terms of
clause 1.1.2.2.1 is wrong and could
result in an absurdity and
potential destruction of the trust. NAFCOC has failed to identity any
voluntarily association in existence
that complies with the
definition of “NAFCOC affiliate” as NAFCOC interprets it.
NAFCOC’s interpretation introduces
a fundamentally uncertainty
into the validity of the trust and trust deed and is thus insensible,
un-business like and should be
rejected. See in this regard
Natal
Joint Municipality Pension Fund v Endumenu Municipality
2012 (4)
SA 593
SCA paragraph 18. In the circumstances NAFCOC’s argument
that the first applicant in the second review application is not
a
member or affiliate of NAFCOC and has no
locus standi
to bring
the main application must fail. In my view there is no basis for this
Court to grant prayer 3 of the counter-application
and accordingly
the counter-application should therefore be dismissed with costs
including the cost of two counsel.
(16.4)
From the evidence before me there is no proof that the legal
relationship between NAFCOC and NAFCOC Free State was ever
terminated. Only one voluntary association existed throughout known
as National African Federated Chambers of Commerce and Industry Free
State Province. On NAFCOC’s own version this voluntary
association is still a member of NAFCOC. Clauses 12.6 and 12.7 of
NAFCOC’s constitution read with clause 13.4 which provides
that
a member on suspension or expulsion shall immediately seize to hold
himself as a NAFCOC member and/or affiliate and shall
also seize to
use the name NAFCOC and/or its emblem and shall seize to participate
in any activity and/or structure of NAFCOC,
including any trust or
company established by NAFCOC and its affiliates whilst the
suspension or expulsion is in force” is
therefore inapplicable
to the present set of facts. This inference is confirmed by the
provisions of clause 24.2.2 of NAFCOC’s
constitution which
defines an affiliated sectoral member as including “any branch
or district/regional or provincial or commercial
or industry sector
determined and recognised by the national executive committee from
time to time …” It is common
cause that the association
NAFCOC Free State affiliation/membership was never suspended nor was
the association expulsed.
(16.5)
On NAFCOC’s own version NAFCOC executive committee
adopted a
resolution on 21 January 2020 that “the recognised affiliate is
hereby, in confirmation of passed acts in recognition
by NAFCOC, once
again determined and recognised as envisaged in clause 24.2.2 of the
Constitution of NAFCOC as a legal and valid
provincial affiliate
member of the Free State province, with all the rights intended
thereon. And, to the extent necessary, such
affiliation of the
recognised affiliate is hereby rectified with retrospective effect to
9 September 2010.”
17.
In conclusion it is my finding that the grounds of review of the 2018
letters of authority, as
referred to in the second review
application, and the answering affidavits in the first review
applications, namely that the decision
was procedurally unfair and
was taken as a result of fraud, which relief is not opposed by
NAFCOC, has been proved on a balance
of probabilities. It follows
that the remedy which is sought by the applicants in the second
review application, declaring that
the trustees appointed as set out
therein, are lawfully appointed trustees of the trust and directing
the Master to issue letters
of authority to the trustees must be
granted.
18.
I am also satisfied that condonation should be granted to the
applicants in the second review
for the late institution of the
second review. The second review was only a few days late and the
applicants were severely hampered
to obtain information from both the
Master and NAFCOC. Based on the facts set out herein condonation
should be granted and the
180 day period for the institution of this
application is extended to 22 February 2019.
19.
After argument was heard on 30 May 2022 and before judgment was
handed down, the Court was informed that the third applicant
in the
second review has passed away and therefore does not form part of the
application anymore. The deceased is to be substituted
by Kedineete
Dorcas Motshabi who was duly elected to be appointed as a Trustee.
Costs
:
The
applicants in the second review application does not seek a costs
order against the first applicant in the first review. The
reasons
being that NAFCOC Free State was cited as applicant in the first
review application is not properly before the Court as
Konziwe lacks
the authority to bring the application on its behalf. There is
further no evidence that the “parallel structure”
of
Konziwe and his cohorts actually exists as a voluntary association.
Konziwe lacked the requisite authority to bring the first
review on
NAFCOC Free State’s behalf. In my view the signatory to the
resolution annexed to the founding affidavit marked
CK1 (see FR
annexure CK1) Konziwe, Berent, Mloja, Matsaba, E Charlie and GE
Didumo, along with NAFCOC should be ordered to pay
the costs of the
first review to the respondent in the first review.
In
relation to the second review, the applicants in the second review
demonstrated that they are entitled to the relief sought in
the
Notice of Motion and they should accordingly be granted the costs
including the costs upon the employment of two counsel.
Lastly
there cannot be any doubt that NAFCOC is not entitled to the relief
sought in the counter-application, which stand to be
dismissed with
costs including the costs of two counsel.
Therefor
having read the papers and having heard counsel for the parties it is
ordered that:
In
application 74936/2016:
(1)
The application is dismissed with costs as well as the costs reserved
on 10 May 2018 by
Khumalo J, when the matter was postponed, including
the costs of two counsels, such costs to be paid by the second
applicant and
the persons whose signatures appear on the document
annexed to the founding affidavit marked “CK1”, namely,
CJ Konziwe,
MA Bereng, EM Moilwa, TV Matsaba, E Charlie and GE
Sidumo, the one paying the other to be absolved.
In
application 12167/2019:
(1)
The 180-day time period for the institution of this application is
extended to 22 February
2019 and the applicants’ delay in
instituting this application is condoned.
(2)
The decision taken by the first respondent on 30 May 2018 to issue
letters of authority
to the second to eighth respondents authorising
them to act as trustees of the NAFCOC Free State Investment Trust
(IT: 1885/05)
(“the decision” and “the trust”
respectively) are reviewed and set aside.
(3)
It is declared that the second applicant (Heskia Dikgang Mentoro),
the fourth applicant
(Morgan Sonwabo Ngubani) and Kedineetse Dorcas
Motshabi are the lawfully appointed trustees of the trust.
(4)
The firs respondent is directed to issue letters of authority to the
second applicant (Heskia
Dikgang Mentoro), the fourth applicant
(Morgan Sonwabo Ngubani) and Kedineetse Dorcas Motshabi authorising
them to act as trustees
of the trust.
(5)
The first to eight and tenth respondents are ordered to pay the costs
of the application,
including the costs of two counsel, the one
paying the other to be absolved.
(6)
The tenth respondent’s counter-application is dismissed with
costs, including the
costs of two counsel.
(7)
The costs in paragraphs 5 and 6 to include the costs of the
hearing on 15 and 17 June
2020.
HJ
DE VOS
JUDGE
OF THE HIGH COURT
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