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[2017] ZAGPPHC 158
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Jili v NBC Holdings (Pty) Ltd (63168/2012) [2017] ZAGPPHC 158 (3 April 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO. 63168/2012
3/4/2017
Reportable:
Yes
Of
interest to other judges: Yes
Revised.
In
the matter between:
DLEZAKHE
JILI
(CHAIRPERSON)
Applicant
and
NBC
HOLDINGS (PTY)
LTD
1
st
Respondent
ISCOR
EMPLOYEES RETIREMENT
FUND
2
nd
Respondent
ISCOR
PENSION FUND
TRUSTEES
3
rd
Respondent
ISCOR
EMPLOYEES RETIREMENT
FUND,
4
th
Respondent
NEWCASTLE
SOUTH
AFRICAN RECEIVER OF
REVENUE
5
th
Respondent
(SARS)
ABSA
BANK LIMITED
(JOHANNESBURG)
6
th
Respondent
THE
MINISTER OF DEPARTMENT OF
LABOUR
7
th
Respondent
THE
MASTER OF THE NORTH
GAUTENG
8
th
Respondent
HIGH
COURT
DEPARTMENT
OF HOME
AFFAIRS
9
th
Respondent
RFS
ADMINISTRATORS (PTY) LTD
10
th
Respondent
ISCOR
RETIREMENT FUND
BOARD
11
th
Respondent
BAMBANANI
BENEFITS ADMINISTRATORS
12
th
Respondent
JUDGMENT
Baqwa
J
[1]
This is an application for an order compelling the respondents to
provide the applicants with information to enable them to
access R21
billion invested by the second and eleventh respondents offshore
during 1989.
[2]
The notice of motion does not specify what information the applicants
are seeking but the founding affidavit identifies the
information as
follows:
2.1. Information which the applicants
allege is in the possession of the respondents and which information
the applicants require
to exercise or protect their rights in
relation to an investment by the second and eleventh respondents in
1989 to date.
2.2. They seek records, documents and
statements regarding the said R21 billion which include:
2.2.1.
The date of maturity of the capital amount of R21 billion;
2.2.2.
Interest and/or profit earned of the R21 billion invested overseas on
behalf of the applicants.
The Parties
[3]
Apart from the first applicant, Dlezakhe Jili (Jili) it is alleged
that there are 2185 other applicants but only 572 consommé
to
affidavits have been filed.
[4]
Jili has brought the application as chairperson of the applicants and
it also appears that some of the applicants are executors
in deceased
estates.
[5]
The first respondent is NBC Holdings (Pty) Ltd described as the first
black owned and managed employee benefits company in South
Africa
with its registered office at 76 Juta Street Braamfontein,
Johannesburg.
[6]
The first, second, third, fourth, tenth, eleventh and twelfth
respondents are opposing the application and they have filed heads
of
argument. The applicant is not seeking any relief against the first
to ninth respondents.
[7]
In a nutshell, the crux of the applicant's case is the R21 billion
investment overseas regarding which documentation is sought
and which
certain respondents are refusing to provide.
Background
[8]
The applicants contend that during 1989 the general works manager K.
W. V. Robertson invested R21 billion (the funds) on behalf
of the
ISCOR Newcastle black employees. The funds, which were invested
overseas, were taken from the ISCOR Retirement Fund which
is cited as
the second respondent herein.
[9]
Subsequent to the said investment road shows were held at all ISCOR
workplaces ostensibly to inform the workers about the investment.
The
applicants further contend that the occurrence of the said road shows
is admitted by the second, third, fourth, tenth, eleventh
and twelfth
respondents. The communication of the investment message was conveyed
to the employees on the occasion of the visit
of his majesty, King
Zwelithini to Newcastle and that the former general manager
Robertson's action in making the investment was
even acknowledged and
recognised by the king.
[10]
It is also contended that the funds have been changing hands between
ISCOR Pension Fund Trustees, the third respondent and
Bambanani
Benefits Administrators (the twelfth respondent) and that there is a
possibility that movement of funds between different
entities might
result in the dissipation of the funds to the prejudice of the
applicants who are dependent on the funds.
[11]
The applicants also submit that the respondents have failed and/or
refused to disclose the relevant financial statements.
[12]
The applicants submit that the respondents have acted in dereliction
of their duties in terms of the Pension Funds Act in that
they have
failed to trace dependents and to identify the beneficiaries to the
funds.
[13]
The applicants have been informed that no information will be
provided to them as the R21 billion in question does not exist,
hence
this application.
[14]
The second, third, fourth, tenth, eleventh and twelfth respondents
oppose this application. They deny the existence of a R21
billion
investment and consequently deny that there is any information or
documentation in relation to such an investment and they
contend as a
result thereof that the applicants are not entitled to any relief as
set out in the notice of motion.
[15]
The respondents also draw the attention of this court in
limlne
to
certain defects which are apparent from the applicants' papers.
[16]
Firstly they point out that:
16.1 Whilst the notice of motion and
founding affidavit are dated 1 October 2013, the case number used by
the applicants is a 2012
case number.
16.2 The applicants have attached
unsigned affidavits to the application which puts into question the
issue of who, genuinely, are
the applicants before this court.
16.3 The respondents also seek to
strike out certain portions of the founding affidavit.
[17]
The respondents contend that whilst unlike a summons there is no
requirement that an application be issued through the Office
of the
Registrar, there must be an application before a case number is
allocated to a matter. Consequently, it is not possible
to have
a case number allocated in the absence of a notice of motion
supported by an affidavit.
[18]
The respondents contend that when the case number was allocated in
the present matter, there was no application and that the
application
is defective and should be dismissed with costs.
[19]
The respondents further contend that whilst there are purportedly
2185 applicants in this application, there are only 572 confirmatory
affidavits. They also point out that there are no records of a number
of individuals who purport to be applicants with the tenth,
eleventh
and twelfth respondents. The same contention applies regarding
certain persons who purport to be executors in the estates
of former
members of the funds and where no records exist for the so-called
former members of the fund.
[20]
The respondents contend also that Mr Jili, the first applicant,
cannot possess authority to act on behalf of unidentified applicants
and that such individuals or persons are not properly before this
court and are not entitled to any relief.
Application
to Strike Out
[21]
The respondents contend that the allegations made in the applicant's
founding affidavit, (paragraphs 29 to 32) are made without
any
factual basis and that as such they are vexatious and scandalous and
ought to be struck out.
[22]
The said allegations accuse the respondents of acting
unprofessionally and failing to comply with the requirements of the
Pension Funds Act. They also insinuate that the respondents may this
dissipate funds which are held in trust thereby alluding to
dishonest
conduct on the part of the respondents.
[23]
Rule 6 (15) of the Uniform Rules of Court provides:
"(15) The court to may on
application order to be struck out from any affidavit any matter
which is scandalous, vexatious or
irrelevant, with an appropriate
order as to costs, including costs as between attorney and client.
The court shall not grant the
application unless it is satisfied that
the applicant will be prejudiced in his case if it be not granted."
[24]
Allegations are scandalous where they are so worded as to be abusive
or defamatory. Allegations which are gratuitous and based
on
suspicion rather than fact are prejudicial. Scandalous or irrelevant
matters which are defamatory are prejudicial.
See
Bredenkamp V Standard Bank of SA Ltd
2009 (5) SA 304
GSJ at
321 C - E;
National Director of Public Prosecutions v Zuma (Mbeki
and another intervening)
[2009] 2 AllSA 243
(SCA) at para [81] -
[82];
Vaatz v Law Society of Nambia
1991 (3) SA 563
(NM) at
566 C - E.
Material
Facts (As Pleaded by the Respondents)
[25]
The first respondent has no interest in this matter and has no
relationship with the eleventh respondent.
[26]
There are no such entities cited by the applicants such as the second
to fourth respondents. A notice of opposition has been
filed on
behalf of those respondents because of the inaccurate or improper
description of the respondents.
[27]
The ISCOR Retirement Fund exists as a separate legal entity and the
eleventh respondent has been cited incorrectly.
[28]
The application concerns employees of the former ISCOR Limited
employed at the Newcastle works.
[29]
Until 30 June 2004, the eleventh respondent was administered by the
ISCOR Employees Provident Fund. Bambanani Benefits Administrators
(Pty) Ltd, the twelfth respondent, administered ISCOR Retirement Fund
from 30 June 2004 to 31 December 2012 whereafter, from 1
January 2013
RFS Administrators (Pty) Ltd, the tenth respondent took over the
administration of the eleventh respondent.
[30]
The more significant material facts in the context of this
application are however the following:
30.1 In 1988 the total asset value of
the eleventh respondent was R206 678 000.00. Three years later,
in 1991, the total asset
value of the eleventh respondent was R411492
000.00.
30.2 At no stage did the eleventh
respondent invest R21 billion overseas. There is no evidence that the
eleventh respondent or any
of the respondents at any stage had an
asset value close to R1 billion, not to mention R21 billion. In 2007
the total assets of
the eleventh respondent amounted to R387 467
147.00. In December 2012 it stood at R467 658 620.00.
30.3 During 2009, rumours surfaced
about a R21 billion overseas investment by the eleventh respondent.
Representatives of the eleventh
and the twelfth respondents met the
Sonqoba Community Organisation on 5 October 2010 and 13 July 2012 to
explain that there had
never been a R21 billion investment as alleged
by the applicants. During those discussions, no proof was ever
offered of the alleged
investment.
[31]
Mr Robertson, who was allegedly a key role player in ensuring the
making of the R21 billion investment, has filed a confirmatory
or
supporting affidavit in which he denies that he ever informed
employees at the Newcastle works, or any other employee that R21
billion was invested on their behalf by the ISCOR Retirement Fund.
[32]
I have considered the facts deposed to by Jili in his founding
affidavit and replying affidavit. There is nothing of substance
therein to justify granting of the order prayed for in the notice of
motion.
[33]
Mr van der Westhuizen, counsel for the second, third, fourth, tenth,
eleventh and twelfth respondents submits and I accept
that the best
case at the time of filing of the notice of motion by the applicants
was the hearsay case of Mr Robertson. Once the
answering affidavit
was filed which included Robertson's confirmatory affidavit there was
nothing left of the applicant's case.
[34]
The objective evidence which includes financial statements covering
the period 1988 to 1991 in particular demonstrates that
the R21
million asset was a figment of someone's imagination. The assets
reflected in the said financial statements were nowhere
near that
figure.
[35]
Counsel for the first respondent, Ms Freese submits and I accept that
the fund administrated by the first respondent was the
ISCOR
Employees Umbrella Provident Fund which was established in 1992 at
the request of the trade unions.
[36]
The first respondent was never involved in the other retirement fund
namely, the ISCOR Employees Retirement Fund and the first
respondent
was not responsible for any payments to those employees.
[37]
The first respondent only assumed the administration of the Umbrella
Fund in January 2013 and as such would not be in a position
to know
of events which occurred in 1989 involving the applicants nor would
it owe any duties to those employees.
[38]
The first applicant in his replying affidavit to the answering
affidavit of the second, third, tenth, eleventh and twelfth
respondents made the averment that the first respondent admitted the
existence of the R21 billion investment. Counsel for the applicants,
Mr Molobedi could however not find such admission in the documents
filed when asked by the court.
[39]
Counsel for the respondents did not pursue any of the points raised
in limine
including the application to strike out certain
portions of the founding affidavit. I therefore do not propose to
make any finding
in that regard. It is however my considered view
that it would have been superfluous to pursue those points in light
of the poor
quality of evidence tendered by the applicants. I
accordingly find that the applicants have dismally failed to make out
a proper
case.
[40]
Both counsel for the respondents have asked for the application to be
dismissed with costs and that the costs be awarded on
a
de bonis
propriis
basis as the attorneys for the applicants were duly
warned in that regard in correspondence sent to them before the
matter was heard.
In support of that submission Mr van der Westhuizen
has also referred to the vexatious and defamatory averments in
paragraphs 29
- 32.5 of the applicants founding affidavit in respect
of which he had sought in order to strike out in terms of Rule 6 (15)
of
the Uniform Rules of Court.
[41]
Such costs orders are made when the conduct of a legal representative
is reprehensible, negligent or can be considered to have
been taken
in bad faith. See
Blou v Lampert and Chiplain NNO and Others
1973
(1) SA 1
(A) at 14 A - D.
[42]
After instituting the application and filing of the answering
affidavit by the other opposing respondents confirming the
non-existence
of any sort of relationship between the eleventh
respondent and first respondent, the first respondent's attorneys
wrote to the
applicants attorneys inviting them to withdraw the
application as against the first respondent failing which a costs
order
de bonis propriis
would be sought.
[43]
I accept that gratuitous allegations of dereliction of duty and/or
dishonesty against respondents who are pension administrators
and who
in their day to day activities are responsible for the administration
of trust funds may be injurious to their reputation.
When such
allegations are made without any factual or legal basis, they may
well lead to a punitive costs order such as the one
being sought in
the present case.
[44]
In
Venter NO v Scott
1980 (3) SA 988
(0) the following was
said regarding a representative of the plaintiff:
".... Had no reason to doubt
that his action would be successful, he would not necessarily be
ordered to pay the costs of the
unsuccessful defendant out of his own
pocket. Where he actually had or could have had no such certainty,
and nevertheless made
no provision for the defendant's costs, the
position
is
different."
[45]
The applicants' attorneys were duly informed that they had no case
against the respondents. They however refused to withdraw
the
application against the respondents. In the circumstances, they ought
to be penalised for their conduct in order to compensate
the
respondents for their costs.
[46]
In
casu,
the cause of action invoked by the applicants is not
clearly and concisely set out, and all the allegations they make
about the
breaches of duties and statutes on the part of the
respondents are so vague as to make them meaningless. Fabricius J in
Multi-Links Telecommunications Ltd v Africa Prepaid Services
Nigeria Ltd
2014 (3) SA 265
(GP) at 289 A - D said:
"It is true that legal
representatives sometimes make errors of law, omit to comply fully
with the rules of court or err in
other ways related to the conduct
of the proceedings. This is an everyday occurrence. This does not,
however, per se ordinarily result in the court showing its
displeasure
by ordering the particular legal practitioner to pay the
costs from his own pocket. Such an order is reserved for conduct
which
substantially and materially deviates from the standard
expected of the legal practitioners, such that their clients, the
actual
parties to the litigation, cannot be expected to bear the
costs, or because the court feels compelled to make its profound
displeasure
at the conduct of the attorney in any particular context.
Examples are dishonesty, obstruction of the interests of justice,
irresponsible
and grossly negligent conduct, litigating in a reckless
manner, misleading the court, gross incompetence and a lack of care."
[47]
The present case represents precisely what Fabricius J was referring
to. The applicants' attorneys knowingly and recklessly
launched an
application with no cause of action and did not even give specificity
to the alleged breaches of statutes on the part
of the respondents
which are said to afford the applicants the rights to information.
They continued to litigate even though they
had no credible basis for
believing they could make out a case on behalf of the applicants.
[48]
In the result:
48.1. The application is dismissed.
48.2. The applicants' attorney,
Ntimane Attorneys are ordered to pay the respondents
costs
de bonis propriis
which costs shall include costs of two
counsel.
____________________
S.
A. M. BAQWA
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Appearances
For
the Applicant:
Advocate N. G. Molobedi
Instructed
by:
Ntimane Attorneys
For
the First Respondent:
Advocate S. Freese
Instructed
by:
Mervyn Taback Inc.
For
the 2
nd
- 4
th
& 10
th
- 12
th
Respondents:
Advocate G. van der Westhuizen
Instructed
by:
Mahlangu Attorneys
Date
of Hearing:
9 March 2017
Date
of Judgment:
3 April 2017