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[2010] ZAGPJHC 23
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Chemical Industries National Provident Fund v Tristar Investments (Pty) Ltd (A5053/09) [2010] ZAGPJHC 23 (22 April 2010)
IN THE HIGH COURT OF
SOUTH AFRICA
SOUTH GAUTENG HIGH COURT
JOHANNESBURG
CASE No. A5053/09
SGHC CASE No. 29786/08
Reportable in:
SAFLII,
JDR (Juta) and JOL (LexisNexis)
only
In the matter between:
THE
CHEMICAL INDUSTRIES NATIONAL PROVIDENT FUND
Appellant
and
TRISTAR
INVESTMENTS (PTY) LTD
Respondent
JUDGMENT
WILLIS
J:
[1] This is a so-called
“full bench” appeal against the judgment of our brother,
C.J. Claassen J delivered on 12th February,
2009. In issue has
been the validity of a document, dated 19th December, 2007,
described as an “Investment Counselling
Agreement” to
which the parties appear to be Tristar Investments (Pty) Ltd, the
applicant in the court below, now the respondent
in this appeal
(“Tristar”) and the Chemical Industries National
Provident Fund, the respondent in the court below,
now the appellant
(“the Fund”). Tristar sought an order that this document
be declared valid and binding upon the parties
and that the Provident
Fund pay to Tristar certain fees due in terms thereof from May 2008.
The fees amounted to some R700
000- per month. Tristar also sought
certain ancillary relief and costs. Claassen J granted the order.
[2]
The Fund contended that this document was in contravention of the
provisions of the
Pension Funds Act, No, 24 of 1956
as well as the
Funds own rules by reason of the fact that the requisite two-thirds
majority of the Funds’s trustees had not
voted in favour of
Tristar’s appointment and that the two signatories to the
document, who purportedly signed the document
on behalf of the Fund,
had no authority to do so.
[3]
Tristar
accepts that, standing on its own, the document is unenforceable.
Rule 13.6.8
of the rules of the Fund, appearing as an annexure to
Tristar’s founding affidavit require that all decisions of the
trustees
of the Fund must have the “support of at least two
thirds of the Employers’ Trustees and at least two thirds of
the
Members’ Trustees at any quorate meeting”. It is
common cause that, at the time when the document in question was
signed,
there had not been compliance with this rule. Tristar relies,
however, upon the fact that, according to its version of events, the
minutes of a meeting of the board of trustees of the Fund held on
5th February 2008, record that the full board unanimously
ratified the appointment of Tristar as the sole provider of
investment consulting services to the Fund, consequent upon an
invitation
to tender. The Fund disputes the accuracy of this minute.
[4]
The Fund alleges, in addition, that, although Tristar was paid R2.7
million by the Fund, directly via Standard Bank, for the
four month
period from January to April 2008, Tristar failed to comply with its
obligations to present the Fund with detailed,
written, financial
reports. Tristar has rendered no services to the Fund as
investment consultants since April 2008. It would
appear from
Tristar’s founding affidavit that during May 2008, Tristar
became aware that the Fund considered that it had
no relationship
with Tristar as investment consultants. At the very latest, it
became aware of this fact on 30th June,
2008. The Fund has
instituted an action against Tristar to recover the R2,7 million
which has been paid to Tristar. It has done
so under case number
08/41311 in this court. A trial date had been allocated for February
of this year but the parties agreed not
to proceed until this case
had been finalized.
[4]
There have been skirmishes between the parties as to the
interpretation that should be placed on the minutes of certain
meetings
of the board of trustees that too place prior to
5th February, 2010. Although there has been plenty of
“atmosphere”
in this case and although the papers
voluminously have generated much “heat and dust” the
appeal turns on whether or
not, in motion proceedings, the disputed
minute of the meeting of 5th February, 2008 should be accepted.
[5]
In the answering affidavit, the Fund disputes the accuracy of this
minute. In this regard it points to a subsequent meeting
of the board
of trustees of the fund on
28th and
29th February and 17th April 2008 wherein it is recorded
that “Mr Geldenhuys proposed that the minute of
the Special
Board of Trustees meeting be reviewed as well as there was no
decision that was taken to appoint Tristar but to diversify
services”. Mr Geldenhuys was an employer trustee. In that
meeting it is also recorded that;
Mr De Wet (who had been
in favour of the appointment of Tristar) commented that it was clear
that there were major differences of
opinions on the matter at hand,
and the fact that for the past 20 years the Trustees have used a
consensus decision has backfired
on them.
Mr De Wet conceded that
in arriving at the decision to appoint Tristar consensus was not
reached, however it was a majority decision
despite the objections.
Not only does this make
it plain that there could not, therefore, have been a unanimous
decision to appoint Tristar but it is not
clear whether the requisite
two-thirds majority not only of the employers’ trustees bur
also the members’ trustees
had been obtained. It is evident
from the founding affidavit of Tristar that it could only have
obtained copies of these the minutes
of these various meetings of the
board of trustees of the Fund, held in February and April 2008
sometime after 30th June,
2008.
Nevertheless, it is patent that whether or not Tristar should have
been appointed as an investment consultant to the Fund and,
if so, on
what terms and conditions has, since at least August 2007, been a
matter of burning internal controversy within the Fund.
[6]
Claassen J, in his judgment, records that, in respect of the minute
of the meeting of 5th February, 2008 “this particular
minute was not attacked by the respondent (the Fund) in its answering
affidavit. It therefore, should be regarded as common cause
that on 5
February a unanimous decision was taken at a full board meeting to
stand with the agreement and continue with its execution”
Later
he says: “it would appear to me that on the basis of those
facts it cannot be said that the respondent raised a real
dispute in
denying the fact that a valid decision was taken to appoint the
applicant (Tristar).”
[7]
Factual disputes in motion proceedings must be determined in
accordance with the principles in the cases of
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
[1]
and
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
.
[2]
These
are that
where
an applicant in motion proceedings seeks final relief, and there is
no referral to oral evidence, it is the facts as stated
by the
respondent together with the admitted or undenied facts in the
applicants’ founding affidavit which provide the factual
basis
for the determination, unless the dispute is not real or genuine or
the denials in the respondent’s version are
bald
or uncreditworthy, or the respondent’s version raises such
obviously fictitious disputes of fact, or is palpably implausible,
or
far-fetched or so clearly untenable that the court is justified in
rejecting that version on the basis
that
it obviously stands to be rejected. These rules have been re-affirmed
in innumerable cases and, recently, in the case of
National
Director of Public Prosecutions v Zuma
.
[3]
[8] In
the light of the dispute by the Fund as to the accuracy of the
minutes of the meeting of 5th February, 2009, Claassen
J was, in
my respectful view, clearly wrong in finding its contents to be
common cause. In the light of the patently heated controversy
appearing in the subsequent minutes as to the accuracy of the minute
of 5th February, 2008 it cannot be said that this denial
of the
accuracy thereof was
bald or
uncreditworthy, or that the Fund’s version raises such
obviously fictitious disputes of fact, or is palpably implausible,
or
far-fetched or so clearly untenable that a court would be justified
in rejecting that version on the basis
that
it obviously stands to be rejected. Again, in my respectful opinion,
Claassen J was wrong in concluding that there was no “real
dispute” between the parties.
[9] Claassen J held that
“The subsequent attempt to reverse the decision cannot be of
any force or effect as against third
parties, like the applicant. As
far as the applicant is concerned, the respondent concluded a final
and binding agreement which
is enforceable by law.” Tristar
does not, however, rely on estoppel. As recorded above, it only
obtained copies the minutes
of the various meetings of the board of
trustees of the Fund, held in February and April 2008, sometime after
30th June, 2008.
Either Tristar was properly appointed as
investment consultant to the Fund or it was not. That is a matter
factually in dispute.
It cannot be determined in favour of Tristar in
motion proceedings.
[10]
Although the appeal turns on the narrow issue of the accuracy of the
minutes of the meeting of the board of trustees of the
fund on
5th February, 2008, it seems that there are larger issues
between the parties which need to be ventilated, which extend
beyond
even the issue of whether Tristar rendered services for which it was
paid some R2,7 million. This is not a case where a
narrow issue
should be referred to oral evidence.
[4]
Claassen J found that he was not persuaded by the argument that
Tristar should have been aware of the disputes of fact before it
launched motion proceedings. It seems to me that one cannot find that
Tristar could not have believed that the minute of the meeting
of
5th February, 2008 was conclusive. In order to do justice
between the parties, it seems that the dispute should be referred
to
trial. The Fund has sought this relief in the alternative to
the dismissal of the application. During the course of argument,
counsel for the parties agreed, however, that if the appeal were to
be upheld the appropriate order, in all the circumstances,
would be
to allow Tristar to file a counterclaim to the plaintiff’s
claim under case number 08/41311. Lest there be any doubt,
it should
be emphasised that the issue of whether the Fund had properly entered
into a valid and binding agreement with Tristar
as the sole provider
of investment consulting services to the Fund, is not been rendered
res
judicata
in
this judgment.
[11] The importance of
the matter to the parties justifies the costs of two counsel in the
appeal.
[12]
The following is the order of this court:
(a)
The appeal is upheld;
(b)
The order of Claassen J on 12th February, 2009 is set aside and
the following is substituted therefor:
“
(i)
respondent is given leave to file a counterclaim relating to the
subject matter in this dispute, in case number 08/41311
in this
court;
(ii)
The costs of the application are to be costs in the trial action
under case number 08/41311.”
(b) the aforesaid
counterclaim is to be filed within 20 days of this order;
(c)
The respondent in this appeal is to pay the appellant’s costs
in the appeal, which costs are to include the costs of two
counsel.
DATED AT JOHANNESBURG
THIS 22ND DAY OF APRIL, 2010
N.P. WILLIS
JUDGE OF THE HIGH
COURT
I agree.
J.P. HORN
JUDGE OF THE HIGH
COURT
I agree.
R.R.D MOKGOATHLENG
JUDGE OF THE HIGH
COURT
Counsel
for the Appellant:
Adv.
M. Du P. van
der Nest
SC
(with him,
B.
Berridge
)
Counsel
for the Respondent:
Adv.
A.E. Franklin
SC
Attorneys
for the Appellant:
Webber Wentzel
Attorneys
for the Defendants:
Werksmans
Date of hearing:
19th April, 2010
Date of judgment: 22nd
April, 2010
[1]
1957
(4) SA 234 (C).
[2]
1984
(3) SA 623 (A).
[3]
2009
(1) SACR 361
(SCA)at para [26].
[4]
See,
for example,
Less
v Bornstein
1948 (4) SA 333
(C);
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155
(T) at 1162;
Conradie
v Kleingeld
1950 (2) Sa 594
(O) at 597 and 599;
Oblowitz
v Oblowitz
1953 (4) SA 426
(C) at 434G.