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[2016] ZAGPPHC 1162
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Mavundla v Mahlangu and Others (79364/16) [2016] ZAGPPHC 1162 (28 October 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER:79364/16
DATE:
28 October 2016
REVISED
PHILANI
GODFREY
MAVUNDLA
Appellant
V
JAN
MAHLANGU
First
Respondent
MATHOME
THULARE
Second
Respondent
HENDRY ISAAC COLLINS
Third
Respondent
SAMUEL MAKATIKELA
Fourth
Respondent
REGISTRAR
OF
PENSION FUNDS
Fifth
Respondent
WILBERFORCE
MOLAUDI KGAKANE
Sixth
Respondent
SOUTH
AFRICAN LOCAL AUTHORITIES PENSION FUND
Seventh
Respondent
JUDGMENT
MABUSEJ:
[1]
The applicant, Mr. Philani Godfrey Mavundla ("Mavundla"),
seeks an interim order for a declarator that, pending an
appeal to be
launched to the Appeal Board established as such in terms of the
provisions of s 26(1) of the Financial Services Board
Act No. 97 1990
In ("the Act"), he be permitted to exercise his functions
and the powers as an independent trustee of
the South African Local
Authorities Pension Fund ("the Fund") Including being given
the notices of the board meetings
and even to attend such meetings.
[2]
The application is opposed by all the seven respondents in the
matter. For purposes of ease of reference I will refer to the
first,
second, third, fourth, sixth and seventh respondents as the
respondents. The fifth respondent will be referred to by that
name.
[3]
The reason for seeking the aforementioned order is that at a board of
trustees' meeting of the Fund held on 19-21 November 2015
in Cape
Town, it was resolved that he Mavundla be appointed as an independent
trustee to the Fund with immediate effect It was
resolved furthermore
that the executive committee of the Fund should be mandated to
finalise the appointment contract with Mavundla
and that Thipa
Denenga Incorporated, ("the attorneys"), should assist with
the finalisation of the contract. Mavundla
was present at the said
meeting. He had attended It at the time in his capacity as an elected
member on behalf of the Kwazulu Natal
Province. Mavundla contends, on
the basis of the said resolution, that he was properly appointed as
the independent trustee of
the Fund and that his appointment was
subsequently confirmed in a written agreement he entered into with
the Fund.
[4]
A draft written contract explaining the terms of the agreement
between the Fund and the independent trustee had been included
as
part of the board pack sent to all the board members before the
meeting. It is contended by the applicant that in terms of clauses
3.1 and 3.2 of the draft agreement the term of office of the
independent trustee would be five years from the said date of
appointment.
In his case his period of appointment or term of office
would be five years from 21 November 2015 to 20 November 2020.
[5]
Mavundla contends furthermore that he entered into the independent
trustee contract confirming the appointment as an independent
trustee. He held the said position from 21 November 2015 and while he
was in that position attended the board meetings and took
part in all
the business of the Fund. According to his testimony, on 3 August
2016, when the local government elections took place,
all members of
the Fund, except himself ceased by reason of effluxion of time to be
members of the Fund.
[6]
To prove that his appointment continued after 3 August 2016:
(1) the employment
contract was sent to him as the final execution copy by the attorneys
on 11 May 2016. He signed it at the offices
of the Fund on 11 May
2016. He has since misplaced his signed copy;
(2) he attended
approximately four meetings of the board in his capacity as an
independent trustee;
(3) he was appointed to
the advisory board of Sampada Private Equity, one of the unlisted
funds into which the Fund invests. He
attended two meetings of the
advisory board.
[7]
With regard to Mavundla's evidence that he was appointed as an
independent trustee on 21 November 2015, the fifth respondent
pleaded
that he had no knowledge of the events set out by the applicant in
his evidence. The fifth respondent is unable to admit
or deny that
the applicant was appointed as an independent trustee on 21 November
2015 because he was not present at the said meeting.
His reaction is
therefore understandable. His name is not in the list of those who
were present at the said meeting.
[8]
On the applicant's contention that he had entered into the
independent trustee contract which confirmed his appointment as an
independent trustee, the fifth respondent pleaded that he did not
know whether or not a contract has been concluded between the
applicant and the Fund. He noted, however, that the applicant has not
produced an agreement signed by both the Fund and him. He
received a
similar report from two members of the interim board. Furthermore he
noticed in a letter written by the Fund's attorneys
dated 5 October
2016 to his a
ttorneys of record
that it would appear that there was no contract concluded between him
and the Fund. The said letter states in
paragraph 7 that:
"The Fund denies
that it entered into any contract with your client for a term of
three years as alleged. The resolution of
21 November 2015 to appoint
your client as an independent trustee must be seen in the context of
an intent by the board to formalise
the appointment process. The said
process could not be concluded as a term of office of the board
terminated by effluxion of time
on 3 August 2016.”
Consequently,
on the basis of the aforegoing the fifth respondent denied that the
applicant and the Fund had entered into any written
agreement in
terms of which the applicant was appointed as an independent trustee.
[9]
The rest of the respondents relied on the evidence of one, Henry
Isaac Collins ("Collins), an adult member of the board
of
trustees of the Fund in his evidence he admitted that the old board
of the Fund held a meeting from 19 to 21 November 2015 in
Cape Town
which was attended, among others, by Mavundla. The respondents deny
though that Mavundla was appointed as an independent
trustee during
the said meeting. In addition they contend that the Fund did not
resolve to enter into the draft agreement or to
authorise anyone to
sign the draft agreement. Of supreme importance with their evidence
is that the term of office of an Independent
trustee is not any
different from the term of office of other members of the Fund. The
respondents, it is correct, have not provided
any substance to their
denial of the appointment of Mavundla by a resolution of 21 November
2015. They deny that a written agreement
was entered into by and
between the Fund and the applicant.
[10]
The question is whether Mavundla was appointed by the resolution
adopted on 21 November 2015 as argued by Mr. Cassim, his counsel,
or
a written agreement, as argued by Mr. Motepe. Argueing In favour of
the applicant, Mr. Cassim argued that the applicant was
appointed by
the resolution adopted during 19 to 21 November 2015 meeting. He
argued furthermore that the subsequent formalisation
of his
appointment, as indicated in the resolution, with the assistance of
the Fund's attorneys had nothing to do with his appointment.
It is
clear from the arguments of Mr. Sisilana and Motepe for the
respondents that, while acknowledging the resolution of 21 November
2015, they hold the view that because of the inability of Mavundla to
produce an agreement signed by both parties, in other words
the
applicant and the Fund, there is therefore no agreement in existence
between the parties.
[11]
Mavundla's case is that he was appointed by the board as an
independent trustee of the Fund at the aforementioned meeting.
The
resolution of the said date reads as follows:
"RESOLVE
(a)
That Mr.
Phllani Mavundla be appointed as an independent trustee to the SALA
Pension Fund With immediate effect.
(b) That the Exco be
mandated to finalise the appointment contract with Mr. Philani
Mavundla with the assistance of Thipa Densnga
Incorporated.
”
[12]
For the following reasons, and notwithstanding the denials of the
respondents, I find that the applicant was duly appointed,
with
immediate effect by the Fund's resolution taken at its meeting of
19-21 November 2015 as an independent trustee. A resolution
is a
decision of the body or organisation that adopts it. Its operation
still depends on the decision of such a body or organisation.
It may
be effective immediately or made subject to a fulfillment of certain
conditions. Where the wording of such a decision is
clear it must be
accepted that it expresses the intention of the maker. As the
resolution expressly indicated, the appointment
was with immediate
effect. The effect hereof is that if he was not already an appointed
independent trustee before the resolution
was taken, he became one
upon the pronouncement of such a resolution. The making of the
resolution was not subject to the applicant
having to sign any
agreement. If the intention was that the applicant would only become
an independent trustee after he would have
signed the agreement, the
meeting would not have used the words
"with immediate
effect".
Amendment No. 4 To The Revised Rules of Sala
Pension Fund which came into effect on 1 October 2012 provides in
Rule 2.3.2 that:
"The
board of TRUSTEES may appoint an INDEPENDENT TRUSTEE to the board who
shall hold office In terms of the RULES subject
to Rule 2.8 below.•
Unlike Rule 2.7.2, Amendment No. 4 does not require the board of
trustees to enter into any service level
agreement with the
independent trustee. The signing of the agreement was something else
that had nothing to do with the appointment.
Secondly, according to
his evidence, he attended, in his capacity as an independent trustee,
four meetings of the Fund. Thirdly,
by virtue of him having been
elected as an independent trustee, Mavundia was appointed as a board
member of Sampada Private Equity.
It is, in my view, of supreme
importance to emphasize that his appointment as an independent
trustee was made in terms of the Rules
of the Fund. His relationship
with the Fund and his term of office were therefore governed by the
said Rules.”
[13]
Relying on the provisions of Rule 2.3 and 2.6 of the Rules of the
Fund, the respondents state that new trustees had to be elected
within three months before the expiry of their five year terms of the
old board. The term of the old board ended on 3 August 2016.
No new
board was elected. Mavundla's membership of the Fund came to an
abrupt end on 3 August 2016. On 11 August 2016, the chairman
of the
board requested the registrar, in a letter of the same date, to
appoint an interim board in order to oversee the election
of the
trustees of the new board of trustees. Four names, including
Mavundla's name, were proposed to the registrar.
Acting
In terms of the provisions of s 26(2) (1) of the Act, the registrar
appointed four people, except Mavundla, as interim board
members.
[14]
Mavundla testified that the term of office for the Independent
trustee is different from the terms of office of ordinary members
of
the board. He relies on the terms of the draft contract and contends
that clauses 3.1 and 2.3 of the draft agreement provide
that the term
of the Independent trustee would be five years from the effective
date. He goes on to state that in his case it would
mean that his
appointment, which took effect from 21 November 2015, would endure
until 20 November 2020. This would, in my view,
be so provided the
Fund and Mavundla had concluded a valid agreement between them.
Clause 2.3 of the Rules, so he continued with
his testimony, deals
with the board of trustees and, excluding the independent trustee,
provides for the appointment of non-employer
and non-employees to be
elected by Provincial Committees to the board, two trustees to
represent policemen on the board and two
more trustees to represent
SAPS on the board. These board members, according to him, hold office
for a period of five years. In
view of the fact that the Fund is a
Fund of local authority employees, the term of office of the board
members is inextricably
linked to local government elections held
every five years. Accordingly, in view of the fact that the local
elections were held
on the 3rd of August 2016, it followed that the
term of office of the old board of trustees came to an end on the 3rd
of August
2016. It also means that his term of office, irrespective
of the period for which he contends he would have occupied that
position
of an independent trustee, came to an end also on 3 August
2016, this time not by effluxion of time but by reason of the fact
that
a new five year period would have had to begin after 3 August
2016.
[15]
Rule 2.3.5 provides that:
"The
Board of Trustees may appoint an INDEPENDENT TRUSTEE to the Board who
shall hold office in terms of the Rules subject
to Rule 2.8 below.
The provisions of Rule 2.3, Rule 2.4 and Rule 2.8 shall apply mutatis
mutandis in respect of the INDEPENDENT
TRUSTEE.”
Rule
2.4.1.3 provides that:
“
A
TRUSTEE shall cease to hold office if:
his
term of office expires
.”
It
is to the Rules of the Fund, and not to the contract that the court
must look for the document that governs the relationship
between the
Fund and Mavundla. It is furthermore to the Rules of the Fund and the
court must look for the tenure of office of Mavundla.
[16]
Mavundla state that:
"Given
that I had entered into the independent trustee contract confining my
appointment as an independent trustee...”
This
contract was supposed to be entered into in accordance with the
resolution of November 2015. Its conclusion was supposed to
be
finalised by the Fund's attorneys. According to Mavundla, he signed
the same agreement on 11 May 2016 and left it at the Fund's
offices.
Unfortunately he does not know what happened to the agreement
subsequently. What is of paramount importance, though, is
that he is
unable to produce it to the Court. But what is even more of supreme
importance is that there is no agreement signed
by the parties before
the Court. The question is not whether he signed the agreement but
whether he and the Fund signed the agreement.
His signature alone is
not sufficient to bring an agreement into existence. If the Fund had
prescribed that an agreement should
be signed between it and him and
such an agreement was not signed, then it means that there is no
agreement. Accordingly, Mavundla
is therefore not entitled to rely on
the terms of the non-existent agreement, as he does in respect of the
tenure of office of
an independent trustee as set out in the draft
agreement. The terms of the said draft agreement are not applicable
in this case.
[17]
It follows accordingly that in the light of the findings I have made
that Mavundla was appointed as an independent trustee
on 21 November
2015; that his term of office was therefore governed by the Rules of
the Fund; that such term expired on 3 August
2016 and finally that
the Fund and him never concluded a written agreement; that his
application is not urgent and that he has
not made a good case for
the interim relief he seeks. The application cannot succeed.
Accordingly I make the following order:
The
application is dismissed with costs.
P.M.
MABUSE
JUDGE
OF THE HIGH COURT
Appearances:
Counsel
for the applicant· Adv.
NA Cassim (SC)
Adv.
S Frease
Instructed
by:
Webber
Wentzel
c/o
Mac Robert Incorporated
Counsel
for the 1st to 4th, 6th and 7th respondents: Adv. L
Sisllana
Instructed
by:
Norton
Rose Fulbright South Africa Inc c/o Mathie Jooma Sabdia Inc.
Counsel
for the 5th respondent: Adv.
JA Motepe
Instructed
by:
Mathie
Jooma Sabdia Inc
Date
Heard:
25-26
October 2016
Date
of Judgment: 28
October 2016