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[2012] ZAECPEHC 73
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Boezacht and Others v Niegaardt and Others (1726/11) [2012] ZAECPEHC 73 (9 October 2012)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE – PORT ELIZABETH)
CASE NO.: 1726/11
In the matter between:
RODNEY BOEZACHT
.......................................................................
First
Applicant
BUSTON BOSCH
..........................................................................
Second
Applicant
ASHLEY KLEINHANS
......................................................................
Third
Applicant
MARBEN ROCKMAN
.....................................................................
Fourth
Applicant
IVOR WARREN
..................................................................................
Fifth
Applicant
JAMES TAMBOER
...........................................................................
Sixth
Applicant
And
RONALD HENRY NIEGAARDT
....................................................
First
Respondent
RONALD HENRY NIEGAARDT
...............................................
Second
Respondent
(as trustee of the
Bethelsdorp Development Trust)
DAVID THEOPHILUS LEWIS
.......................................................
Third
Respondent
DAVID THEOPHILUS LEWIS NO
.............................................
Fourth
Respondent
(as trustee of the
Bethelsdorp Development Trust)
LIZETTE CLARISE OOSTHUIZEN
...............................................
Fifth
Respondent
LIZETTE CLARISE OOSTHUIZEN NO
........................................
Sixth
Respondent
(as trustee of the
Bethelsdorp Development Trust)
The
remaining (actual or contingent) beneficiaries
Of
the Bethelsdorp Development Trust
................................................
Seventh
Respondent
JUDGMENT
BESHE J:
Introduction
[1] This is an application for the
removal, alternatively the suspension of the second respondent as the
trustee of the Bethelsdorp
Development Trust (BDT). The other
trustees, being fourth and sixth respondents have since resigned from
their positions as trustees.
The appointment of the new trustees,
Hilton Craig Killian and Shanti Cham-Sam is also sought by the
applicants.
Parties
[2] According to the six applicants,
they derive their
locus standi
from the fact that they have
been identified as, and dealt with as beneficiaries to the “BDT”
as defined in clause
1.9 of the BDT deed of trust. That they were
identified as beneficiaries at a meeting of BDT trustees.
[3] Clause 1.9 of the BDT deed of
trust defines “beneficiaries” to mean: historically
disadvantaged persons and communities
in the Northern Areas and the
Nelson Mandela Metropole; particularly, the youth, women, veterans
and the disabled.
[4] First applicant describes himself
as a project manager residing at 81 Rensberg Street, Salt Lake Port
Elizabeth. Second applicant
is described as a community worker who
resides at 60 Marock Road, Sancor, Port Elizabeth. Third applicant is
chairman of the Bethelsdorp
Disabled Association. Fourth applicant is
chairperson of the Northern Areas Youth Council. Fifth and Sixth
applicants are community
workers. However the applicants were unable
to locate a copy of the minutes of the meeting during which they
allege they were identified
as beneficiaries of the BDT.
[5] Applicants allege that as
beneficiaries they received intermittent payments from BDT.
[6] First respondent is Ronald Henry
Niegaardt. He is also cited as second respondent in his
representative capacity as trustee
for the time being of BDT.
Henceforth first and second respondents will be referred to as the
respondents. Since no relief is sought
against the third to the
seventh respondents, I do not propose to describe them.
Locus Standi
[7] Applicants’
locus standi
is contested/placed in issue by the respondents on the basis that
they do not possess substantial interest or legal standing to
apply
for the removal of the first respondent as a trustee. Respondents
deny that the applicants have been identified as beneficiaries
at any
stage.
[8] In the answering affidavit,
respondents allege that BDT entered into written agreements with
various corporations which were
represented by,
inter alia
,
second, third, fourth and sixth respondents and not with applicants
in their personal capacities. It is further alleged that close
corporations that entered into agreements with the BDT have since
been deregistered.
[9] Although the legal standing of the
applicants to launch these proceedings was challenged by the
respondents, applicants persisted
in seeking the removal of the first
respondent as trustee of the BDT. They admitted that in certain cases
beneficiaries were in
fact close corporations some of which were
represented by the second, fifth and sixth applicants respectively.
With regard to the
deregistration of the close corporations, in reply
applicants state that the close corporations were deregistered by
reason of
“annual return non-compliance”. To this end
second and sixth applicants will ensure that the relevant annual
returns
are duly submitted and will endeavour to have these close
corporations reregistered as soon as possible.
[10] At the date of hearing and
pursuant to the objections raised in respect of lack of
locus
standi
, applicants sought the joinder of close corporations
represented by third applicant being Business Zone 1220 CC. As well
as a close
corporation represented by sixth applicant Lezmin 2821 CC
trading as Siyathemba Enterprises as well as Northern Areas Youth
Council
represented by the fourth applicant. There was however no
explanation of how Business Zone 1220 CC is connected/related to the
Bethelsdorp Disabled Association third applicant being chairperson of
latter mentioned Association.
Joinder or Substitution of the
Applicants
[11] Applicants submitted that it
would be convenient for the above mentioned entities to be joined in
view of the fact that the
respondents allege that the entities have
the necessary
locus standi
to bring this application. They
argued further that the individuals who deposed to affidavits in
support of this application are
members or representatives of the
close corporations and associations sought to be joined and have been
authorised to act on behalf
of these entities.
[12] The founding affidavit was
deposed to by first applicant Rodney Boezacht. At paragraph one of
the affidavit he states:
“
I
am an adult male project manager, currently residing at 81 Ransburg
Street, Salt Lake, Port Elizabeth, Eastern Cape Province”.
At
paragraph 5
“
I
am also duly authorised to depose to this affidavit in support of the
relief sought, on behalf of the second to the sixth respondent
as
appears from their confirmatory affidavits annexed hereto.”
[13] There is however no reference to
entities Business Zone 1220 CC, Lezmin 2821 CC or Northern Areas
Youth Council. Nor is there
an indication that second to sixth
applicants are cited in their representative capacities.
[14] Second, third, fourth and sixth
applicants deposed to confirmatory affidavits. Fifth applicant passed
away subsequent to the
launching of this application. In his
confirmatory affidavit, second applicant states that he authorised
first applicant to act
on his behalf for purposes of this
application. So does the third, fourth and sixth applicants. Third
and fourth applicants also
state that they are chairpersons of the
Bethelsdorp Disabled Association and Northern Areas Youth Council
respectively.
[15] In opposing the application for
the joinder of entities referred to above,
Mr Smith
argued
that applicants seek to build a case on a foundation not previously
laid by them in their founding papers. He argued further
that the
applicants seek to achieve a wholesale swapping out of one litigant,
who does not have a cause of action against the respondent
with
another litigant with an assumed cause of action against the
respondent. He referred me to the remarks of
Harms JA
in
Gross
and Others v Pentz
[1996] ZASCA 78
;
1996 (4) SA 617
(A) at 632
where he
stated: “
I am unaware of a
rule of law that allows a court to confer
locus
standi
upon a party,
who otherwise has none, on the ground of expediency and to obviate
impractical and undesirable procedures.”
[16] I however do not understand the
applicants to be as seeking a substitution but rather a joinder of
more applicants. But it
is necessary to determine whether or not the
current applicants are clothed with the necessary standing to seek an
order for the
removal of the remaining trustee of BDT.
[17] In
Ras NNO v Van Der Meulen
2011 (4) SA 17
at page 20 paragraph C – D Leach JA
had
this to say:
“
[9]
In opposing leave to appeal, the respondent argued that the order was
not appealable and it is necessary to deal with this issue
at the
outset. The court clearly erred in finding that, short of being a
beneficiary, the respondent had an interest in the trust
which
justified her being entitled to seek the relief claimed. It is only
if she is a beneficiary that she would be entitled to
seek the
removal of the trustees, and the respondent correctly did not seek to
support the High Court’s contrary conclusion.
If the trustees
are correct and the respondent is not a beneficiary, her application
would fall to be dismissed. The issue of the
respondent’s
status as beneficiary would therefore be determinative of the
parties’ rights, rendering the order granted
in respect of
those rights appealable.”
[18] First applicant who is also the
deponent to the founding affidavit, describes himself as “a
project manager”. He
does not identify the project that he
manages. Second, fifth and sixth applicants are described as
community workers. Third and
fourth applicants are chairpersons of
the Bethelsdorp Disabled Association and Northern Areas Youth Council
respectively. First
to sixth applicants aver that they were
identified as beneficiaries of the BDT at a meeting. And further that
this was minuted.
They were unable to place the court in possession
of the said minute. Respondent deny that the applicants were
identified as beneficiaries.
[19] In light of the denial by the
respondents that the applicants were identified as beneficiaries of
the BDT, and the inability
by the applicants to provide the minutes
which they allege exist, which confirms such identification, I am
unable to find that
the applicants have shown on a balance of
probabilities that they are beneficiaries. Consequently I am unable
to find that they
have the standing to apply for the removal of the
respondent as a trustee.
[20] In an apparent bid to cover their
basis, in case they were non-suited, after the hearing of the
application which was on the
15 December 2011, and judgment having
been reserved, applicants sought leave to file a supplementary
affidavit. They also sought
leave to have the matter set down so that
they can make further submissions regarding the issue of
deregistration of two entities
being Business Zone 1220 CC and Lezmin
2821 CC. The two entities sought to be joined as applicants.
[21] In the supplementary affidavit
reference is made two letters that were received from the Companies
and Intellectual Property
Commission (CIPC) dated 23 December 2011.
Save for being addressed to two separate entities, the Business Zone
1220 CC and Lezmin
2821 CC respectively, the contents of the letters
are identical and read:
“
Your
application for registration was successfully processed and the
status has been changed to “IN DEREGISTRATION PROCESS”.
The enterprise status will change to “In Business” once
all annual returns have been lodged.”
[21] A close corporation ceases to
exist upon deregistration. It appears to be common cause that at the
launching of these proceedings
the two entities had been
deregistered. It is also common cause that application for the
re-instatement of the two close corporations
had been submitted to
the Companies and Intellectual Property Commission.
[22] According to the letters from the
Companies and Intellectual Property Commission issued on 23 December
2011, the status of
the two corporations had been changed to “IN
DEREGISTRATION PROCESS” and will change to “IN BUSINESS”
once
all annual returns have been lodged.
[23] Practise Note 2 of 2011 of
Companies and Close Corporations Deregistration and Reinstatement
Procedure, stipulates that:
“
Once
the company or close corporation has been referred for deregistration
the status will be changed to “in deregistration
process”
and a CoR 40.3 (Demand notice concerning inactive company) will be
issued. The company or close corporation will
have 20 business days
to either object or in the case of outstanding annual returns to
submit all outstanding annual returns. If
no objection has been
received within the 20 business day period the Commission will issue
a CoR40.4 (Notice of Pending Deregistration
of company or close
corporation). If no further response within the required 20 business
day period, the Commission will refer
the entity for final
deregistration and issue a final deregistration letter.
If
the entity was referred for deregistration due to annual return
non-compliance a compliance certificate CoR139.1 will be issued
wherein the entity has 15 business days to submit all outstanding
annual returns. If no annual returns are lodged, the Commission
will
issue a CoR40.4 and if still no annual returns are received within
the required 20 business day period, the Commission will
deregister
the entity and issue a final deregistration letter.”
[24] When argument was heard in this
regard on the 20 March 2012 there was no indication that requirement
of the Companies and Intellectual
Property Commission had been
complied with and that the status of the corporations had changed to
“IN BUSINESS”. In
my view this does not change the status
of the two close corporations to be reinstated or registered. Their
status will only change
to “IN BUSINESS” once there has
been compliance with the requirement of the CIPC. Clearly at the time
of the launching
of the proceedings the two corporations were not
registered with the CIPC. Even at the date when the matter was argued
in March
2012 the corporations had not been restored to the register
concerned.
[25] The further difficulty facing the
application for joinder is that there is no indication that the first
applicant who has since
been found to be non-suited, was authorised
to institute these proceedings at the instance of the parties sought
to be joined (the
entities). At paragraph 5 of the founding affidavit
first applicant states that he has been only authorised to depose to
the founding
affidavit in support to the relief sought, on behalf of
the second to sixth applicants as appears from their confirmatory
affidavits.
First applicant does not allege that he was authorised by
the applicants to institute these proceedings. In
Ganes and
Another v Telekom Namibie Ltd
2004 (3) SA 615
it was held
that the deponent to an affidavit in motion proceedings need not be
authorised by the party concerned to deposed to
the affidavit. It is
the institution of the proceedings that must be authorised.
In
casu
there was no authorisation to institute the proceedings.
Urgency
[26] Lack of
locus standi
in
judicio
is not the only objection raised
in limine
by the
respondents. Lack of urgency is also raised
in limine
by the
respondents. As indicated earlier, this application is concerned with
the removal of the first respondent as a trustee of
BDT.
[27] Chief amongst the reasons cited
for seeking the removal of the first respondent as a trustee is that:
1. Over a period of time beneficiaries
became increasingly disgruntled with the manner in which they were
treated by the BDT trustees.
Inter alia
by not paying them
monies that were allocated to them.
2. The existence of a report by Mr
David Barrilt, director of Stratgem Consultants (Pty) Ltd a company
that
inter alia
, conducts investigations into and provides
consultancy advice on business and corporate management.
According to this report: In May /
June 2010 investment funds were improperly removed from Standard Bank
Investment Bank within
24 hours of having been deposited inspite of a
written agreement that since funds should remain in the account for 5
years. BDT
bank statements reveal improper payments made between 2007
and 2009.
3. There was lack of corporate
governance.
[28] Mr Barrilt’s report was
presented to those who commissioned it in November 2010. This
application was launched on an
urgent basis in July 2011.
[29] It is trite that when applying
for urgent relief, the applicant has a duty to justify the
non-compliance with the time frames
stipulated in the Uniform Rules
of this court relating to applications. See
Caledon Street
Restaurants CC and Monica D’Aviera
reported decision of
South Eastern Cape Local Division (as it was then was) case number
2656/97.
[30] According to the applicants, the
matter is urgent because:
1. BDT has allegedly received loans
from the Development Bank of South Africa totalling some R4 000.000.
An amount of R1 000.000
from the Eastern Cape Development
Corporation which amount need to be managed. No dates are provided as
to when these loans were
received.
2. Fear that books of account may be
stolen or go missing.
3. Pending litigation for the recovery
of a loan of R1 500.00 to Mr George Ionnides, which litigation
needs to be protected.
[31] It appears to be common cause
however that the litigation referred to above was set down for
hearing on the 21 June 2011. It
was however removed from the roll
before the launching of this application.
[32] I am not persuaded that the
applicants, even if they were clothed with the necessary
locus
standi
in judicio
, have succeeded in showing that they are
entitled to be heard on an urgent basis. Respondent’s objection
in this regard is
also upheld.
[33] Accordingly the application is
dismissed with costs.
____________
N G BESHE
JUDGE OF THE HIGH COURT
APPEARANCES
For Applicant ADV: G Cooper
Instructed by LISTON BREWIS ATTORNEYS
35 Albany Road
Port Elizabeth
Ref.: N230/AS Brewis/cf
Tel.: 041 - 585 3363
For Respondent ADV: D Smith
Instructed by JOUBERT GALPIN SEARLE
INC.
173 Cape Road
Mill Park
PORT ELIZABETH
Ref.: L Fourie/Anita/nie26/0001
Tel.: 041 – 396 9200
Date Heard 15 December 2011 / 20 March
2012
Date Reserved 15 December 2011 / 20
March 2012
Date Delivered 9 October 2012