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[2018] ZASCA 181
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Makgoba and Others v Ledwaba NO and Others (054/2018) [2018] ZASCA 181 (4 December 2018)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 054/2018
In
the matter between:
THUPANE
JOSEPH
MAKGOBA FIRST
APPELLANT
TFHIGO
FRANS
MAGOELE
SECOND
APPELLANT
GRACE
MAHLODI
MASHABA THIRD
APPELLANT
MOTLOKWA
SUZAN
MOJAPELO FOURTH
APPELLANT
SAMUEL
MASETLA FIFTH
APPELLANT
JOSEPH
MOTSWI SIXTH
APPELLANT
MOTLATSO
IVY
MAGOELE SEVENTH
APPELLANT
MANTILA
RONNY
HLOKWA EIGHTH
APPELLANT
AJITA
SIMON
ASITI NINTH
APPELLANT
THETELE
JOSEPH
MALATJI TENTH
APPELLANT
REFILWE
IRENE
LETSOALO ELEVENTH
APPELLANT
MATLOU
JAQUELINE
MAKGOBA TWELFTH
APPELLANT
MAKGOBA
ASSET MANAGEMENT (PTY) LTD THIRTEENTH
APPELLANT
And
MAPONYA
LAZARUS LEDWABA NO FIRST
RESPONDENT
GISELA
STOLS
N.O. SECOND
RESPONDENT
THE
MASTER OF THE HIGH COURT,
GAUTENG
DIVISION,
PRETORIA THIRD
RESPONDENT
THE
MINISTER FOR RURAL DEVELOPMENT
AND
LAND
REFORM FOURTH
RESPONDENT
PROVINCIAL
SHARED SERVICES CENTRE OF
THE
DEPARTMENT OF RURAL DEVELOPMENT
AND
LAND REORM, LIMPOPO PROVINCE FIFTH
RESPONDENT
THE
REGIONAL LAND CLAIMS COMMISSIONER,
LIMPOPO
PROVINCE SIXTH
RESPONDENT
THE
MAMPHOKU MAKGOBA COMMUNITY’S
STEERING
COMMITTEE SEVENTH
RESPONDENT
Neutral
citation:
Makgoba
& others v Ledwaba NO & others
(054/2018)
[2018] ZASCA 181
(04 December 2018)
Coram:
Seriti,
Wallis, Swain and Mocumie JJA and Rogers AJA
Heard:
15
November 2018
Delivered:
04
December 2018
Summary:
Trust
– period of office of Trustees expiring – no longer
Trustees – election of new Trustees – election
of new
Trustees – appointment of further beneficiaries.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (
Makgoka
J
sitting
as court of first instance):
1.
The appeal is upheld to the extent that the order of the court a quo
is replaced with what follows in paragraphs 2 to 7 below.
2.
It is declared that the first to twelfth appellants’ term of
office as trustees terminated with effect from 26 June 2013,
and any
subsequent letters of authority issued to the first to twelfth
appellants, to date of this order are set aside.
3.
The first and second respondents are to convene and hold a general
meeting of the Trust within 60 calendar days of date of this
order
for the purpose of nominating and appointing a new Board of Trustees,
which will not include the first, second and third
applicants,
[1]
who are ineligible to stand for election.
4.
Only those beneficiaries who appear on the list of 603 beneficiaries
(Annexure A14, record, pp196-225) are entitled to attend
and vote at
the general meeting ordered in paragraph 3 above.
5.
All the parties will use their best endeavours to advertise the
general meeting referred to in paragraph 3 above to ensure that
all
603 beneficiaries receive notice of the general meeting.
6.
The nomination and appointment of a new Board of Trustees at the
general meeting referred to in paragraph 3 above will take place
in
accordance with the relevant provisions of the Trust Deed.
7.
The newly appointed Board of Trustees shall within 60 calendar days
of date of their appointment, after the elections and receipt
of
letters of authority, convene a general meeting to appoint further
beneficiaries, who are not part of the list of 603 beneficiaries,
as
contemplated in clause 5.2 of the Trust Deed, which general meeting
shall be conducted with the oversight of the Master and
the
Department of Rural Development and Land Reform.
8.
The appellants to pay the costs of this appeal.
JUDGMENT
Mocumie
JA (
Seriti,
Wallis and Swain JJA and Rogers AJA
concurring)
[1]
This is an appeal by the first to the twelfth appellants against the
order of the Gauteng Division of the High Court, Pretoria
(the court
a quo) setting aside the decision of the third respondent, the Master
of the High Court, Pretoria, (the Master), to
remove the trustees of
Mamphoku Makgoba Community Trust (Trust Registration No IT8699/2004)
(the Trust). The parties were ordered
to pay own costs. Not satisfied
with the order of the court a quo, the appellants unsuccessfully
applied for leave to appeal to
the court a quo. This appeal is before
us with the leave of this Court. The primary question in this appeal
was whether the court
a quo was entitled to order the immediate
resignation of the appellants as trustees of the Trust after
reinstating them. As will
be seen, this assumed secondary
significance.
[2]
The appellants were members of the Board of Trustees of the Trust
until the expiry of their term of office on 26 June 2013 pursuant
to
clause 6.4 of the Trust Deed. Nonetheless they continued in office
until their removal by the Master on 22 February 2017. The
deponent
to the founding affidavit, Mr Thupane Joseph Makgoba, was the
chairperson. The respondents were respectively; two independent
trustees appointed by the Master (first and second respondents), the
Master (third respondent), the Minister of Rural Development
and Land
Reform (fourth respondent), the Provincial Shared centre-Department
of Rural Development and Land Reform (fifth respondent),
the Regional
Land Claims Commission (sixth respondent) and the Mamphoku Makgoba
Community’s Steering Committee (seventh respondent)
also known
as the Makgoba Transfer Committee or the Makgoba Youth Committee or
the Makgoba Beneficiaries Committee. The third to
sixth respondent
are cited for their interest in the matter.
[3]
The major challenges in advancing the objects of the Trust in favour
of the community were as follows; allegations of maladministration
of
the Trust properties by the initial trustees, dissatisfaction amongst
the intended beneficiaries with the failure of the initial
trustees
to hold Annual General Meetings to elect new trustees who would
identify and verify members of the Trust who had an interest
in and
would be entitled to vote on issues related to the Trust. All these
allegations have been compounded by the appellants holding
onto power
despite the existence of a final court order made on 24 November 2015
declaring that their term of office had expired
by effluxion of time
at the end of what was the three years maximum period for holding
trusteeship as provided for in clause 6.4
of the Trust Deed. There
was no appeal against that order.
[4]
In brief, the facts of this matter which are common cause between the
parties are as follows. Prior to 2004 the Makgoba community
lodged a
number of land claims with the Land Claims Commission in terms of the
Restitution of Land Rights Act 22 of 1994 over land
consisting of 39
farms located in the Magoebaskloof area in the Limpopo province. In
order to facilitate the transfer of and the
housing of the properties
(farms) to be transferred pursuant to the various land claims, to
receive transfer of the said farms
and hold them for and on behalf of
the beneficiaries and to generally facilitate the development of the
said farms in the interests
of the beneficiaries of the Trust, on 9
September 2004 the Trust was established and registered.
[2]
The Trust Deed sets out the identities of the initial trustees and
beneficiaries. Although the Trust was created in 2004, the initial
trustees did not have any assets to manage until around 2008/2009
when the properties forming the subject matter of the land claims
were transferred into the name of the Trust. Pursuant to the General
Meeting of the Trust held on 16 August 2015, it was resolved
that a
company under the name of Makgoba Asset Management (Pty) Ltd (MAM) be
registered and incorporated under the
Companies Act 71 of 2008
with
the purpose of leasing all the property owned by the Trust by way of
a 40 years notarial lease at an initial rental of R550 000
per
year for the first four years with annual increments thereafter. MAM
in turn subleases and manages such properties on behalf
of the Trust.
All profits derived by MAM accrue to the Trust. The Trust is
represented by the 1st and 10th appellant on the board
of MAM.
[5]
Sometime in 2013 the seventh respondent brought an urgent application
in the high court complaining about the appellants’
conduct.
The application was struck off the roll for lack of urgency.
[6]
In 2015, the seventh respondent brought another application. On 24
November 2015 after hearing all parties, Mabuse J granted
an order
which reads:
‘
It
is hereby declared that the term of office of the current Board of
Trustees that was elected on 27 June 2010 and whose election
was
subsequently confirmed by the Master of the High Court on 27 October
2010 expired by effluxion of time at the end of a period
of three
years reckoned from 27 June 2010.’
[7]
Notwithstanding the order, the appellants continued in office. They
failed to hold the prescribed general meetings to account
to the
beneficiaries on the finances of the Trust and to pay out dividends
equally to all the beneficiaries as set out in clause
9.2 of the
Trust Deed.
[3]
They refused to
relinquish their positions as the Trust Deed prescribed in clause
6.4
[4]
apparently on the basis
of a contention that the termination of their office did not take
effect until replacement trustees were
elected at an annual general
meeting which they alleged were made impossible to convene by the
seventh respondent and its members.
The Master intervened and asked
the trustees to account by requesting documents from them. The
Master’s endeavours did not
succeed. She was not satisfied with
the response and decided to exercise her powers under s 20(2) (e) of
the Trust Property Control
Act 57, 1988 (the Act). She removed all
the appellants including the second and third respondents from their
office in a letter
dated 22 February 2017.
[8]
The appellants did not accept this but approached the high court on
an urgent basis. According to the Notice of Motion they
sought an
order in the following terms:
‘
1.
The rules relating to forms, notice and time periods are dispensed
with and this application is heard as an urgent application
as
provided for in Rule 6(12) of the Uniform Rules of Court;
2.
The decision of the Third Respondent taken on 22 February 2017 to
remove the 1
st
– 12
th
Applicants as
trustees of the Mamphoku Makgoba Community Trust [Trust Registration
No. IT8699/2004]
(“The Trust)
in terms of section
20(2)(e) of the Trust Property Control Act 57 of 1988
(“the
TPC”)
is set aside in terms of section 23 of the TPC,
alternatively
is reviewed and set aside in terms of section 23
of the TPC, read together with the provisions of the Promotion of
Administrative
Justice Act 3 of 2000
(“PAJA”)
;
3.
The 1
st
– 12
th
Applicants are hereby
reinstated as trustees of the Trust;
4.
The 1
st
– 12
th
Applicants and the 1
st
and 2
nd
Respondents
(“the trustees”)
are directed to convene a meeting of the board of trustees of the
Trust within 10 (ten) days of date of this order to verify and
finalise the register of beneficiaries of the Trust by:
4.1.
including the 455 beneficiaries identified in 2008/2009 with the
assistance of the 4
th
– 6
th
Respondents
(“the initial 455 beneficiaries”)
in such
register:
4.2.
including in such register those additional beneficiaries which were
appointed at the general meeting of the Trust held on
26 August 2012
(“the Trust’s additional beneficiaries”)
whose names also appear on the further register of beneficiaries
produced by the 4
th
– 6
th
Respondents
during or about January/February 2016, which contains the names of
603 beneficiaries (which includes the 455 initial
beneficiaries);
5.
The trustees are directed, within 30 (thirty) days of the meeting of
the board of trustees provided for in paragraph 4 above,
to convene a
general meeting of the Trust in order to nominate and vote on the
appointment of a new board of trustees, at which
meeting only those
beneficiaries whose names appear on the verified and finalised list
as produced at the meeting provided for
in paragraph 4 above may
attend and vote;
6.
In the alternative to paragraphs 4 and 5 above, the trustees are
directed to convene a general meeting of the Trust in order
to
nominate and vote on a new board of trustees, at which general
meeting only the initial 455 beneficiaries may attend and vote,
together with the additional trust beneficiaries which were added to
the initial register of beneficiaries at the general meeting
of the
Trust held on 26 August 2012;
7.
In the further alternative to paragraphs 4 – 7 above, the
trustees are directed to convene a general meeting of the Trust
within 30 (thirty) days in order to nominate and vote on a new board
of trustees, at which general meeting only the initial 455
beneficiaries may attend and vote;
8.
In the further alternative to paragraphs 4 – 7 above, this
Court gives directions to the trustees as to the holding of
a general
meeting of the Trust to appoint a new board of trustees, which
directions will include which beneficiaries may attend
such meeting
and may vote at such meeting;
9.
The Applicants are directed to pay the costs of this application;
10.
In the alternative to paragraph 9 above and only in the event of any
of the Respondents opposing the relief sought, that such
Respondent
be directed to pay the costs of this application jointly and
severally with any other opposing Respondent;
11.
The Applicants are granted further and/or alternative relief.’
[9]
After hearing the parties, in motion proceedings, Makgoka J, based on
differing draft orders of the competing parties, granted
the
following order:
‘
1.
The decision of the third respondent (the Master) taken on 22
February 2017 to remove the first to twelfth applicants as trustees
of the Mamphoku Makgoba Community Trust (the Trust) in terms of
section 20(2) of the Trust Property Control Act 57 of 1998 is set
aside;
2.
The first to twelfth applicants are reinstated as trustees of the
trust and the Master is directed to issue new letter of authority
evidencing such reinstatement;
3.
Upon receipt of the letter of authority referred to above, the first
to twelfth applicants shall each resign with immediate effect
as
trustees;
4.
The Master is directed to consider the appointment of three further
independent trustees for the interim period until the general
meeting
of the Trust is held;
5.
The first to twelfth applicants are obliged to co-operate in good
faith with the new trustees to hand over the records of the
Trust in
preparation of the general meeting of the Trust;
6.
The Trust will have a further verification meeting on 22 April
2017 at which meeting the 603 beneficiaries reflected in annexure
“A14” annexed to the applicant’s founding
affidavit, will be entitled to verify further beneficiaries in
accordance
with clause 5.2 of the Trust Deed;
(emphasis added.)
7.
The general meeting of the Trust will be held on 22 May 2017 at a
time and venue to be determined by the trustees, which meeting
shall
be attended by all beneficiaries verified and confirmed in the
verification meeting on 22 April 2017 referred to above;
8.
All the parties will use their best endeavours to advertise the
general meeting to ensure that all beneficiaries receive notice
of
the general meeting;
9.
At the general meeting referred to above, the beneficiaries will
nominate and vote for a new board of trustees, which will not
include
the first, second and third applicants, who are ineligible to stand
for re-election;
10.
The nomination and appointment of a new board of trustees at the
general meeting of 22 May 2017 will take place in accordance
with the
relevant provisions of the Trust Deed;
11.
Each party is directed to pay its own costs.’
[10]
In this Court, the appellants conceded that their term of office had
come to an end. They also accepted that we should give
an order to
the effect that new trustees should be appointed and first and second
respondents attend to this. The only remaining
issue, thus, was
whether, before new trustees could be appointed, there had to be a
verification meeting as per para 6 of the order
of Makgoka J. Some
paragraphs of that order are superfluous and to the extent necessary
will be amended accordingly in the order
that will follow hereafter.
[11]
As alluded to above the parties presented this Court with a draft
order in which, on a single aspect, they presented two alternatives.
For completeness it is convenient to quote the draft order as a
whole. It reads:
‘
Alternative
1
The
newly appointed board of trustees shall, as soon as possible after
the election, convene a general meeting to appoint further
beneficiaries, who are not part of the list of 603 beneficiaries, as
contemplated in clause 5.2 of the Trust Deed, which general
meeting
shall be conducted with the oversight of the Master and the
Department of Rural Development and Land Reform.
Alternative
2
After
the election of the new Board of Trustees, the first and second
respondents shall remain as independent trustees solely for
the
purpose of conducting a verification exercise of beneficiaries who do
not form part of the list of 603 beneficiaries.
7.1.
The independent trustees will commence the verification process
within thirty days of the election of the trustees.
7.2.
This verification exercise will be conducted under the oversight of
the Master and the Department of Rural Development and
Land Reform.
7.3.
For the purposes of ensuring the independence of the verification
exercise, the newly elected trustees will not take part in
the new
verification exercise.
7.4.
Upon conclusion of the verification exercise, the independent
trustees shall convene a special general meeting at which the
existing beneficiaries shall vote on the approval or rejection of
each newly identified beneficiary as contemplated by clause 5.3
of
the Trust Deed.
7.5.
Upon completion of the election contemplated in paragraph 7.4 above,
the independent trustees shall present a fresh register
of
beneficiaries to the Trust, the Master, and the Department of Rural
Development and Land Reform.
7.6.
The letters of authority granted to the independent trustees will
terminate upon completion of the final register of beneficiaries.”’
[12]
In the light of what the first and seventh respondents proposed in
the draft order (ie the 2
nd
alternative) it necessary to
say something about the powers of a court to make orders in terms of
s 23 of the Act. Section 23 of
the Act provides:
‘
Any
person who feels aggrieved by an authorization, appointment or
removal of a trustee by the Master or by any decision, order
or
direction of the Master made or issued under this Act, may apply to
the court for relief, and the court shall have the power
to consider
the merits of any such matter, to take evidence and
to
make any order it deems fit
.’
(Emphasis
added).
[13]
Reverting to the proposal of the respondents under the 2nd
alternative, the court a quo heard this matter in motion proceedings
and granted the order on the basis of the draft orders presented by
the parties. By the nature of motion proceedings, the court
a quo,
did not deal with the merits and or evidence, as none other than by
way of the affidavits where there were factual disputes,
was
presented. Consequently, there are no merits or evidence before us on
which this Court can justifiably invoke s 23 as prompted
by both
counsel for the respondents. In other words, there are no merits or
evidence to link to any order which this Court may
deem fit. In
simpler terms, there is no legal foundation on which this argument
can be sustained. It was not raised before the
hearing of this appeal
to enable the other parties to address it - which can be prejudicial,
judging, from amongst others, the
accusations the parties have
levelled against each other and what the Master termed ‘mistrust’
which had come between
the parties over six years of the existence of
the Trust.
[14]
Clause 5 of the Trust Deed which deals with the process by which
trustees shall be elected by beneficiaries reads as follows:
‘
5.1.
The initial Beneficiaries shall be those persons as per list attached
hereto marked “C”.
5.2.
Further Beneficiaries shall be appointed by the incumbent
Beneficiaries in a General Meeting called for that purpose in terms
of paragraph 15 hereof.
5.3.
The appointment of new Beneficiaries must meet with the approval of
at least two thirds (2/3) majority of the total number
of
Beneficiaries entitled to vote.
5.4.
The full particulars of all Beneficiaries shall be entered into a
Register kept for that purpose at the offices of the Trust
on the
Farm.’
This
is a clear indication that this Court is not empowered to act outside
this process. It was accepted by all the parties that
if this Court
was not empowered to grant an order in the terms of the 2
nd
alternative, we should nonetheless direct the new trustees to hold
meetings for the purposes of appointing further beneficiaries.
[15]
Besides, on a procedural point, this proposal will not withstand
scrutiny. When the appellants applied for leave to appeal
the
specified paragraphs of the order of the court a quo they were not
satisfied with, the respondents opposed leave to appeal
then, they
also opposed leave to appeal in this Court. In both instances they
did so without any demur of a counter appeal. They
are thus
non-suited to raise it now in this Court.
[16]
It is clear from what is set out above that the Trust under the
administration of the appellants has been dysfunctional and
has for
more than six years not served the needs of the beneficiaries it was
created for and the community at large. The appellants
abdicated
their fiduciary responsibility and had to be removed from their
office of trusteeship to allow new trustees to be elected
and run the
Trust as it befits their office. To allow their continued presence in
the office of the Trust would perpetuate the
Trust being improperly
administered and will be detrimental of the welfare of the
beneficiaries, contrary to the provisions of
clause 6.4 of the Trust
Deed and the existing order of Mabuse J.
[17]
The issue of costs. Counsel for the appellants submitted that the
appellants were partially successful and therefore entitled
to their
costs. He proposed that each party pay its own costs. Both counsel
for the respondents argued to the contrary. First,
if this Court
agreed with the removal of the appellants, as was argued that it
should from the onset, it would in substance confirm
the decision of
the Master which the appellants did not agree with and had
unsuccessfully challenged in the high court before Mabuse
J and in
the court a quo. Thus the respondents would be successful and
entitled to their costs. Second, it was submitted that this
Court has
to take into account the fact that, upon the order of the court a quo
reinstating them, and being well aware of the second
leg of the order
of the court a quo that they should immediately thereafter resign,
the respondents rushed to the Master to be
re-appointed as trustees.
The appellants relentlessly persisted with that point on leave to
appeal to this Court and in this Court.
They only abandoned it on the
morning of the hearing of the appeal in this Court during argument.
This Court should censure such
conduct in the strongest terms through
a punitive cost order against them. I agree with the respondents in
principle on the costs,
but not on the punitive costs.
[18]
In the result, the following order was granted:
1.
The appeal is upheld to the extent that the order of the court a quo
is replaced with what follows in paragraphs 2 to 7 below.
2.
It is declared that the first to twelfth appellants’ term of
office as trustees terminated with effect from 26 June 2013,
and any
subsequent letters of authority issued to the first to twelfth
appellants, to date of this order are set aside.
3.
The first and second respondents are to convene and hold a general
meeting of the Trust within 60 calendar days of date of this
order
for the purpose of nominating and appointing a new Board of Trustees,
which will not include the first, second and third
applicants, who
are ineligible to stand for election.
4.
Only those beneficiaries who appear on the list of 603 beneficiaries
(Annexure A14, record, pp196-225) are entitled to attend
and vote at
the general meeting ordered in paragraph 3 above.
5.
All the parties will use their best endeavours to advertise the
general meeting referred to in paragraph 3 above to ensure that
all
603 beneficiaries receive notice of the general meeting.
6.
The nomination and appointment of a new Board of Trustees at the
general meeting referred to in paragraph 3 above will take place
in
accordance with the relevant provisions of the Trust Deed.
7.
The newly appointed Board of Trustees shall within 60 calendar days
of date of their appointment, after the elections and receipt
of
letters of authority, convene a general meeting to appoint further
beneficiaries, who are not part of the list of 603 beneficiaries,
as
contemplated in clause 5.2 of the Trust Deed, which general meeting
shall be conducted with the oversight of the Master and
the
Department of Rural Development and Land Reform.
8.
The appellants to pay the costs of this appeal.
B
C Mocumie
Judge
of Appeal
Appearances:
For
Appellants: A G South SC
Instructed by:
Thomas
& Swanepoel Inc. c/o Delport Vanden Berg, Pretoria
Symington De Kok,
Bloemfontein
For
First Respondent: M Sibanda
Instructed
by:
Richard
Spoor Attorneys, Johannesburg
Webbers
Attorneys, Bloemfontein
For
Seventh Respondent: V. M. Magwane
Instructed
by:
Molaba
Attorneys, Pretoria North
Rampai
Attorneys, Bloemfontein
[1]
The
three applicants referred to in this paragraph are same three
appellants in this appeal.
[2]
The
establishment and registration of the Trust was published in
Government Notice No 26496 dated 2 July 2004 as amended for the
restitution of land rights, attached to the papers as Annexure A.
[3]
Clause
9.2 reads: ‘To pay over to the Beneficiaries their equitable
dividends from profits accrued as a result of the farming
activities
on the Farms, all Beneficiaries receiving equal dividends.’
[4]
Clause
6.4 provides: ‘…a trustee shall hold office for a
period of no longer than 3 (THREE) years upon which he shall
resign.’