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[2024] ZAKZPHC 10
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Vorster N.O v Buthelezi and Others (10754/2022P) [2024] ZAKZPHC 10 (16 February 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case no: 10754/2022P
In the matter between:
BENJAMIN
JACOBUS VORSTER N.O
APPLICANT
and
FELIX KHULEKANI
BUTHELEZI
1
ST
RESPONDENT
IPHRAIM MFUNENI
ZUNGU
2
ND
RESPONDENT
NONTOBEKO PRECIOUS
ANGELA BUTHELEZI
(first applicant for
leave to appeal)
3
RD
RESPONDENT
NOMUSA ZETHU QUNTA
(second applicant for
leave to appeal)
4
TH
RESPONDENT
MABUTHO MIYA
N.O
5
TH
RESPONDENT
CYNTHIA THEMBA KHUMALO
N.O
6
TH
RESPONDENT
THE MASTER OF THE
KWAZULU-NATAL HIGH COURT
7
TH
RESPONDENT
PITERMARITZBURG
ORDER
The following order is
granted:
The third and fourth
respondents’ application for leave to appeal is dismissed with
costs on the attorney and client scale,
such costs to be paid jointly
and severally, the one paying the other to be absolved.
JUDGMENT
E Bezuidenhout J
[1]
The third and fourth respondents (the respondents) applied for leave
to appeal against
my judgment delivered on 13 October 2023. The
applicant, Mr B J Vorster N.O., opposed the application. Due to me
having been on
circuit during November 2023 and counsels’
unavailability during the December 2023 and January 2024 recess, the
application
was only heard on 26 January 2024.
[2]
The facts of the matter are set out in detail in my judgment and will
not be repeated,
suffice to say that the applicant sought an order
relating to the suspension of the first to fourth respondents as
trustees of
the Ubunje Be-Afrika Development Trust (the trust), which
order was granted.
[3]
The grounds of appeal are set out in detail in the notice of appeal
and can be summarised
as follows:
1.
It was stated that the applicant sought
final relief against the first to fourth respondents on papers which
contained a number
of material disputes of fact. Such disputes of
fact included:
1.1
The nature of the payment of the R10
million made by the Peaker’s Trust to the trust.
1.2
Which trustees made the decision to
disburse the funds received from the Peakers Trust.
1.3
When the decision was made and the written
resolutions and/or minutes of the decision.
1.4
How the amount of each payment to each
different trustee or beneficiary was arrived at.
1.5
The reason for the payment to each trustee.
It was submitted by the
respondents that each of the above facts are critical to a finding
that the first to fourth respondents
collectively made a decision to
pay out monies to the detriment of the beneficiaries. It was also
submitted that the disputes are
incapable of being resolved on the
papers and ought to have been referred to the hearing of oral
evidence.
2.
In
the alternative to the above, it was stated that all disputes of fact
should have been resolved by applying the test in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
.
[1]
It was stated that I failed to determine the legal disputes based on
those
facts as stated by the respondents, together with those facts stated
by the applicant that are admitted by the respondents
.
In particular, in finding that the sole or primary purpose of the
trust was to disburse funding to the farming beneficiaries,
when the
evidence of the respondents was that:
2.1
When the trust changed from the Uphaphe Empowerment Trust to the
Ubunye BE Afrika Development
Trust, it changed from a trust which
received grants in aid for disbursement to farmers in Northern
KwaZulu-Natal, to a trading
trust. The trust was no longer just a
charitable trust, but also a business trust – established to
promote businesses.
2.2
The trust no longer operated exclusively as a distributor of grants
in aid like a non-profit
organisation. It also supported the
non-farming beneficiaries (hereinafter referred to as ‘the
business beneficiaries’)
to develop business activities to
alleviate poverty by creating jobs in profitable businesses.
2.3
Clause 13.4 of the trust deed provided for the payment of trust funds
to the business beneficiaries.
2.4
The business beneficiaries effectively worked for the trust,
performing an assortment of
tasks and obligations towards the trust,
which were set out in the answering affidavit.
2.5
The business beneficiaries and trustees worked together to provide
administrative and logistical
support to the secondary (farming)
beneficiaries. This took the form of assisting farmers to prepare
business proposals and plans,
to corporatize themselves and to apply
for funding.
2.6
The business beneficiaries also prepared numerous bids for tenders on
behalf of the trust
at their cost and through their labour, details
of which were set out in the answering affidavit.
2.7
The trust also provided support and assistance to the businesses of
the business beneficiaries
in various sectors of the economy.
3.
It was also stated that I ought to have
held that the trustees were permitted to disburse funds to the
business beneficiaries, whose
work for the trust was done to support
and develop farmers in the designated area. The disbursement of trust
funds to these beneficiaries
falls squarely within the defined
purposes of the trust as set out in clauses 2.2.1; 2.2.2.1; 2.2.2.3;
and 2.2.2.4.
4.
It was further stated that I erred in
finding that the disbursement of these funds to the business
beneficiaries was detrimental
to all of the beneficiaries, when the
work of the business beneficiaries was in pursuance of the goals of
the trust, being the
support and development of farming in the
regions.
5.
It was also stated that I erred in finding
that the payments made to the business beneficiaries did not promote
the objects of the
trust, which included the alleviation of poverty
and creation of sustainable businesses, when the evidence by the
respondents was
that all the work of the (non-farming) beneficiaries
and for which the funds were disbursed, were directed at these
objects.
6.
In relation to the payment by the Peakers
Trust of R10 million it was stated that:
6.1
No affidavit was placed before the court on behalf of the Peakers
Trust. All of the evidence about
the nature and purpose of the
payment of the R10 million was hearsay.
6.2
The impetus and the terms of the payment by
the Peakers Trust was a key consideration in reviewing the decision
by the trustees
to disburse it in the manner in which they did.
6.3
I erred in failing to refer this dispute
for the hearing of oral evidence, alternatively in failing to accept
the evidence about
this payment put forward by the respondents.
6.4
The evidence by the respondents was that
applications for funding made to the Peakers Trust were a
comprehensive process. Examples
of applications by the trust for
funding for R17 million is referred to in the Peakers Board Minutes
dated 29 April 2022.
6.5
By contrast, the payment by the Peakers
Trust of the special distribution of R10 million did not arise from
any such application
and was simply to be ‘managed in
compliance with the beneficiary trust deeds objectives’.
6.6
The Trustees were free to use this amount
to
inter alia
fund the work of the beneficiaries which was being undertaken on an
ongoing basis to further the goals of the trust.
7.
It was further stated that I erred in
finding that the payments made to the third and/or fourth respondents
justified their removal
from office. The third respondent had worked
for the trust as a trustee and a beneficiary since 2005. She was paid
an amount of
R250 000 as a beneficiary and R500 000 for her work as a
trustee. The third respondent attested that all the monies paid to
her
were for work which she dedicated to the trust for 14 years. Such
work included sourcing opportunities for the trust over the years
and
building up the assets of the trust fund, which was then available
for disbursement to all the beneficiaries. The payment of
R500 000
was not restricted by clause 5.18, which pertained only to costs,
charges and expenses reasonably incurred and arising
out of the
administration of the trust. The work for which the third respondent
was being paid, was for work done for the trust
itself, which
developed and grew the trust in pursuit of its farming goals. The
fourth respondent had served as a trustee for three
years and was
paid R100 000 – the equivalent of R30 000 per year. This amount
is more than reasonable given the extent of
the meetings attended by
her.
8.
It was also stated that I erred in making a
blanket finding against all four respondents without considering
their individual circumstances.
This is all the more problematic
given the failure to establish who made the decision to disburse the
funds. I allegedly further
erred in applying the same penalty to the
third and fourth respondents, as I did to the first and second
respondents, who received
R1 million and R3 million respectively.
[4]
Before I deal with the merits of the application, it is perhaps
appropriate to say
something about the test to be applied in
applications of this nature. In terms of
section 17(1)
(a)
(i)
of the
Superior Courts Act 10 of 2013
, leave to appeal may only be
given where the judge is of the opinion that ‘the appeal would
have a reasonable prospect of
success’, or in terms of
section
17(1)(a)(ii)
, if there is ‘some other compelling reason why the
appeal should be heard’.
[5]
In
The
Mont Chevaux Trust v Goosen and others,
[2]
Bertelsmann J (in an obiter dictum) held that:
‘
It
is clear that the threshold for granting leave to appeal against a
judgment of a High Court has been raised in the new Act. The
former
test whether leave to appeal should be granted was a reasonable
prospect that another court might come to a different conclusion,
see
Van Heerden v Cronwright & Others
1985 (2) SA 342
(T) at 343H. The use of the word “would”
in the new statute indicates a measure of certainty that another
court will
differ from the court whose judgment is sought to be
appealed against.’
[6]
The test was also considered in
S
v Smith
[3]
where the court held:
‘
What
the test of reasonable prospects of success postulates is
a dispassionate decision, based on the facts and the law, that
a
court of appeal could reasonably arrive at a conclusion different to
that of the trial court. In order to succeed, therefore,
the
appellant must convince this court on proper grounds that he has
prospects of success on appeal and that those prospects are
not
remote, but have a realistic chance of succeeding. More is
required to be established than that there is a mere possibility
of
success, that the case is arguable on appeal or that the case cannot
be categorised as hopeless. There must, in other words,
be a sound,
rational basis for the conclusion that there are prospects of success
on appeal.
’
(Footnotes
omitted.)
[7]
In
Four
Wheel Drive v Rattan NO
,
[4]
Schippers JA, with reference to
S
v Smith supra,
referred to the principle that leave to appeal should only be granted
where ‘a sound, rational basis [exists] for the conclusion
that
there are prospects of success on appeal’. The court is
required to test the grounds on which leave to appeal is sought
against the facts of the case and the applicable legal principles.
The court a quo was also criticised for granting leave to appeal
when
there were no reasonable prospects of success, which resulted in the
parties being put through the inconvenience and expense
of an appeal
without any merit.
[8]
It is in my view also important to keep in mind what was held in
R
v Dhlumayo and another
[5]
by Davis AJA , namely that
‘
No
judgment can ever be perfect and all-embracing, and it does not
necessarily follow that, because something has not been mentioned,
therefore it has not been considered.’
[9]
In returning to the present application, it is perhaps important to
note that the
respondents were now being represented by new attorneys
and new counsel, Ms Nicholson, who drafted the application for leave
to
appeal, despite not having argued the matter before me initially.
A new broom always wants to sweep clean. The issue of a referral
to
oral evidence of the alleged material disputes of fact is raised now
for the first time. At the hearing of the matter before
me, none of
the parties raised it, neither in argument nor in their heads of
argument. One of the issues to be addressed in the
practice note,
which has to accompany a party’s heads of argument,
[6]
is whether there are material disputes of fact. None were raised by
the applicant. The respondents further failed to file a practice
note.
[10]
Counsel for the respondents conceded that it was not initially raised
before me but submitted
that should I grant leave to appeal, as the
court of appeal may well refer the matter back for the hearing of
oral evidence. I
was not referred to any authority for this
submission. This submission of course pre-supposes that there are
material disputes
of fact, which, counsel for the applicant
submitted, there were not.
[11]
In
Santino
Publishers CC v Waylite Marketing CC
[7]
it was held that, in principle, an application for an order referring
a matter for the hearing of oral evidence can be entertained
by an
appeal court, bearing in mind the wide powers given to an appeal
court under
section 22
of the now repealed Supreme Court Act 59 of
1959. The court had to consider whether it was competent for it to
order a referral
where it was neither applied for nor considered in
the court below. The court, however, declined to make the order due
to other
difficulties that the appellant faced, resulting in the
application becoming academic.
[12]
In
Ras
and others NNO v Van der Meulen and another
[8]
the court referred the matter back for the hearing of oral evidence
to deal with an issue only raised in argument in the court
below
which had not been dealt with in the papers. Leach JA held at para 17
that ‘this court should not now dispose of the
appeal by having
regard to a point not raised in the court below and in respect of
which the relevant facts have not been properly
explored in the
papers’.
[13]
In
Tshangela
v Nombembe and others
[9]
the issue of a referral to oral evidence was also raised for the
first time during the hearing for leave to appeal. The court held
as
follows:
[10]
‘
Generally,
an application for a referral to oral evidence must be made at the
outset of a hearing (before argument on the merits)
by an applicant
faced with irresoluble disputes of fact on the papers. Courts should
be circumspect in referring matters to oral
evidence
mero
motu
because there may be strategic
reasons why the litigants may have elected not to pursue this
course.’ (Footnotes omitted.)
The
court inter alia relied on
Absa
Bank Ltd v Molotsi
[11]
and the authorities cited therein. The application for leave to
appeal was dismissed.
[14]
Counsel for the applicant submitted that the material disputes of
fact listed by the respondents
were not actually disputes and were
certainly not material. I agree with this submission. The nature of
the payment by the Peakers
Trust was not in dispute. The letter
written by the Peakers Trust, referred to by the applicant, described
the payment as a ‘special
distribution…intended to be
used by each beneficiary trust in line with its trust objectives’.
The third respondent,
in her answering affidavit, referred to the
payment as a special distribution to be distributed to the
beneficiaries. There is
clearly no dispute about the nature of the
payment.
[15]
The remainder of the issues listed as material disputes of fact
relate to the minutes and resolutions
and how the amount of each
payment was arrived at. These disputes were never raised or addressed
by the third respondent. The respondents
supplied the information to
the applicant of how the R10 million was distributed, as contained in
annexure ‘P’. The
reasons for the payments were set out
in very basic terms by the third respondent, which it was conceded,
lacked detail and particularity.
There is in my view accordingly no
dispute as there are no conflicting versions. The respondents’
counsel submitted that
if the matter is referred for oral evidence,
these ‘issues’ can be ventilated after proper discovery
has taken place
and the respondents have been placed in possession of
the relevant minutes and resolutions. I was reminded by the
applicant’s
counsel that the respondents filed a rule 35(3)
notice, wherein the respondents requested the trust’s bank
statements and
minutes of meetings. It was, however, not pursued by
way of an application for an appropriate court directive. Any further
documents
could have been requested but were not. The applicant
attached a number of minutes of meetings to his affidavit, to which I
have
referred in my judgment.
[16]
There is in my view no merit in this ground of appeal. In addition,
it was never raised by or
on behalf of the respondents in the papers
or at the hearing of the matter.
[17]
It was stated in the alternative to the above that I failed to
determine the legal issues based
on the facts stated by the
respondents together with the admitted facts stated by the applicant.
The facts stated by the third
respondent were lacking in
particularity, and I arrived at the conclusions I did based on her
version, which demonstrated that
the payments made by the trust were
not made in accordance with the objectives of the trust deed. It is
now stated that the so-called
‘business beneficiaries’
worked for the trust and provided administrative support to the
trust. Once again, the third
respondent is hamstrung by the limited
facts set out in her affidavit. It was conceded that her affidavit
was vague and unsupported
by evidence, such as time sheets, and
setting out the work done. The evidence of the third respondent had
to be judged in accordance
with what the trust deed stipulated and
whether the payments fell within the discretion of the trustees, and
ultimately whether
such payments were to the benefit of the trust and
all the beneficiaries. Although I did not express my findings in
terms of accepting
or rejecting the respondents’ version as
referred to in
Plascon-Evans,
I clearly found that the
trustees did not act in the interests of the trust based on their
version and explanations provided. There
were furthermore
insufficient facts provided by the respondents on which to make a
finding that the trustees were permitted to
disburse funds to the
business beneficiaries (themselves in other words) whose work for the
trust was allegedly done to support
and develop farmers in the
designated areas. In my view, there is no merit in these grounds of
appeal.
[18]
As far as the letter from the Peakers Trust constituting hearsay is
concerned, it is important
to note that the third respondent never
raised this issue in her answering affidavit. When she responded to
the specific paragraph
of the applicant’s affidavit dealing
with and attaching the letter, she stated that ‘The terms of
the special distribution
from Peaker Trust in November 2019 and the
objectives of the Trust were met in its distribution’. She
further stated that
she was an original beneficiary and also ran a
SMME and on that basis, would be entitled to support and assistance.
She even attached
the decision schedule of the Peakers Trust to her
affidavit, which deals with the special distribution. This issue, and
the impetus
and terms of the payment by the Peakers Trust should
apparently also have been referred for oral evidence. I cannot find
any merit
in these grounds of appeal.
[19]
The grounds relating to the payments made to the various respondents
and the reasonableness of
the payments deserve some mention. It was
stated that the fourth respondent had served as a trustee for three
years and was paid
R100 000 - the equivalent of R30 000 per year,
which is more than reasonable given the numerous meetings attended by
her. It is,
however, clear from the minutes put up, that the trustees
were being paid R3 000 for each meeting they attended. The fourth
respondent
also received R1 million for a company owned by her,
despite not being an original beneficiary of the trust. As far as the
work
done on behalf of the trust is concerned, I have already dealt
with the vague allegations in this regard.
[20]
I was criticised for making a blanket finding against all four
respondents without considering
their individual circumstances and
applying the same penalty to all four respondents, despite the
discrepancy in the amounts received.
Only the third respondent
attested to a substantial affidavit whilst the other respondents
merely attested to confirmatory affidavits.
She certainly did not set
out the respondents’ individual personal circumstances. At the
hearing of the application for leave
to appeal, it was submitted that
I failed to consider the practical effect of my order on the
respondents. Apparently, both the
third and fourth respondents have
subsequently been removed as directors of all the companies on whose
boards they serve. They
have also been removed as trustees from the
other trusts they were involved in. It was further submitted that I
should have considered
that they were not legally trained and
therefore did not understand the workings and limitations of a trust.
It, however, emerged
at the hearing that both respondents held
doctorate degrees, albeit in philosophy and theology. In my view,
these submissions fortified
my view that the respondents should no
longer act as trustees of the trust for the reasons set out in my
judgment. I was reminded
by the applicant’s counsel that the
respondents were provided with a legal opinion which they choose to
ignore. There is
in my view likewise no merit in these last grounds
of appeal.
[21]
I am firmly of the view, having considered the grounds of appeal as
well as the submissions made,
that there is no sound, rational basis
to conclude that there are reasonable prospects of success on appeal.
There are in my view
furthermore clearly no compelling reasons, which
would justify granting leave to appeal in this particular matter.
[22] As far
as costs are concerned I see no reason why I should not make a cost
order on the same basis as before. The
applicant and by implication
the trust, should not be out of pocket in respect of the respondents’
failed application.
[22]
I therefore make the following order:
1.
The third and fourth respondents’ application for leave to
appeal is dismissed
with costs on the attorney and client scale, such
costs to be paid jointly and severally, the one paying the other to
be absolved.
__________________________
E
BEZUIDENHOUT J
Date
of hearing: 26 January 2024
Date
of judgment: 16 February 2024
Appearances:
For
the 3
rd
and 4
th
respondents:
Ms
J Nicholson
Instructed
by:
Shepstone & Wylie Attorneys
15
Chatterton Road
Absa
House First Floor
Pietermaritzburg
(Ref:
A Zwane/buth43081.1)
Tel:
(033) 355 1780
Email:
azwane@wylie.co.za
For the applicant:
Mrs Z Ploos van Amstel
Instructed by:
Jacques Roos Attorneys
Applicant’s
Attorneys
C/o
Viv Greene Attorneys
132
Roberts Road
Clarendon
Pietermaritzburg
Tel:
033 342 2766
(Ref:
V Green/tvdb/MAT3700)
Email: viv@vglaw.co.za
[1]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA 623 (A).
[2]
The
Mont Chevaux Trust v Goosen and others
[2014] ZALCC 20
; 2014 JDR 2325 (LCC) para 6.
[3]
S
v Smith
[2011] ZASCA 15
;
2012 (1) SACR 567
(SCA) para 7.
[4]
Four
Wheel Drive Accessory Distributors CC v Rattan NO
[2018] ZASCA 124
,
2019 (3) SA 451
(SCA) para 34.
[5]
R
v Dhlumayo and another
1948 (2) SA 677
(A) at 706 (numbered para 12).
[6]
KZN
Practice Directive 9.4.
[7]
Santino
Publishers CC v Waylite Marketing CC
2010
(2) SA 53
(GSJ) para 7.
[8]
Ras
and others NNO v Van der Meulen and another
2011
(4) SA 17 (SCA).
[9]
Tshangela
v Nombembe and others
[2023]
ZAGPJHC 1223.
[10]
Ibid
para 18.
[11]
Absa
Bank Ltd v Molotsi
[2016]
ZAGPJHC 36 paras 25-27