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[2011] ZAECMHC 20
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Masizenzele Primary Co-operative Ltd and Others v King Sabata Dalindyebo Secondary Co-operative Ltd and Others (1178/2009) [2011] ZAECMHC 20 (10 November 2011)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE, MTHATHA)
CASE NO.: 1178/2009
In
the matter between:
MASIZENZELE
PRIMARY CO-OPERATIVE LTD
…..................................
1
st
Applicant
UNCEDO
PRIMARY CO-OPERATIVE LTD
…..........................................
2
nd
Applicant
LAPHUMIKHWEZI
PRIMARY CO-OPERATIVE LTD
…............................
3
rd
Applicant
NCEDULUNTU
PRIMARY CO-OPERATIVE LTD
…..................................
4
th
Applicant
ITHEMBA
PRIMARY CO-OPERATIVE LTD
…..........................................
5
th
Applicant
SIYABULELA
PRIMARY CO-OPERATIVE LTD
…....................................
6
th
Applicant
UKUKHANYA
PRIMARY CO-OPERATIVE LTD
…....................................
7
th
Applicant
KUYALUNGA
PRIMARY CO-OPERATIVE LTD
…....................................
8
th
Applicant
ZOLILE
PRIMARY CO-OPERATIVE
LTD
..................................................
9
th
Applicant
XOLANI
PRIMARYCO-OPERATIVE LTD
…............................................
10
th
Applicant
MKATE
TRADING ENTERPRISE CC
…..................................................
11
th
Applicant
IRIS
NONKOSINATHI MBODLELA
…......................................................
12
th
Applicant
BENNETT
PUMELELE BANZANA
…......................................................
13
th
Applicant
QANGULE
SIKHOLIWE
….......................................................................
14
th
Applicant
NOTHEMBA
THEODORA SEPTEMBER
….............................................
15
th
Applicant
ANDILE
MANYIFOLO
…...........................................................................
16
th
Applicant
MBANA
LIVI
…..........................................................................................
17
th
Applicant
NOKWALI
THULANI
….............................................................................
18
th
Applicant
And
KING
SABATA DALINDYEBO LOCAL
SECONDARY
CO-OPERATIVE LTD
….................................................
1
st
Respondent
CROSS
BAR BORDER AGENCIES t/a
AMANDLA
FOODS COMMODITY SUPPLIERS
…...............................
2
nd
Respondent
MEMBER
OF THE EXECUTIVE COUNCIL FORTHE
DEPARTMENT
OF EDUCATION, EASTERN CAPE
….........................
3
rd
Respondent
JUDGMENT
BESHE,
J:
[1] Following the
launching on urgent basis of an application by the applicants, the
following order was issued by consent on the
2
nd
of July
2009.
1. That this court
dispenses with the Rules of Court relating o service, time periods
and declaring this matter to be heard as one
of urgency in terms of
Rule 6(12)(a) of the Uniform Rules of this Court.
2. That a Rule Nisi is
hereby issued calling upon the Respondent to show cause on 23rd July
2009 at 10H00 why an order in the following
terms should not be made
final:-
2.1 That the third
respondent is directed to pay the amount in the sum of four million
rands (R4 000 000-00) or any amount
due by the third
respondent to the first respondent into Bahle and Associates Trust
Account No-621 710 66 030 held at
First National Bank,
Mthatha within (ten) 10 days from the date of service of this order.
2.2 That the second and
third respondents be and are hereby directed to stop any payment due
to the first respondent, being in respect
of services for school
nutrition programme pending proper appointment of a new board of
directors of the first respondent.
2.3 That the old board of
directors of the first respondent are hereby directed to convene a
special general meeting for the purpose
of appointing a new board of
directors within five (5) days from the granting of the final order
failing which the first to tenth
respondents are granted leave by
this court to convene a special general meeting of the first
respondent and in both instances
the notice of the meeting shall be
served upon the respective firm of attorneys not later than five (5)
days before the meeting.
2.4 That the respondents
are directed to pay costs of this application on attorney ant client
scale only on opposition of this application.
3. That costs of today
are costs in the cause.
4. That paragraph 2.1 of
this order shall operate as an interim relief pending the
finalization of this application.
5. That the first
respondent is directed to deliver its answering affidavit not later
than 10 July 2009.
6. That the applicants
are directed to deliver their replying affidavit(s), if any, not
later than 20 July 2009.
[2] After being postponed
on numerous occasions the matter served before me on the 3
rd
of August 2010 wherein the court was called upon to decide whether
the
rule nisi
issued on the 2
nd
of July 2009 should
be confirmed or discharged.
[3] The dispute between
the parties appears to be a long standing one. At the centre of the
dispute is what the deponent to the
founding and the replying
affidavits describes as “a dispute or feud and in-fight between
certain sections of the first respondent
hence there is this
application”.
1
This is as a result of a
belief held by the applicants that the monies paid by the 3
rd
respondent to the 1
st
respondent for services
rendered and goods supplied towards the implementation of a school
nutrition program operating within the
King Sabata Dalindyebo Region
are mismanaged and embezzled by the board of directors of the 1
st
respondent.
[4] Although the papers
filed in this matter are not a model of clarity, hence the amended
notice of motion and the filing of supplementary
heads of argument by
the applicants, all of which contributed to the delay in delivering
this judgment, what comes out is that
the applicants contend that
their
locus standi
derives from the following factors:
Several Primary
co-operatives including 1
st
to 10
th
applicants
were formed in order to be able them to tender for government tenders
as legal entities. The 1
st
to 10
th
applicants
together with other primary co-operatives came together to form a
secondary co-operative which resulted in the formation
of the 1
st
respondent. That the members of 1
st
to 10
th
applicants have rendered services for the “realization and
success” of the school nutrition tender that was awarded
to the
1
st
respondent by the 3
rd
respondent and that
they are therefore the beneficiaries of an amount of ±
R4 000 000-00 to be paid by the 3
rd
respondent
to the 1
st
respondent.
[5] 11
th
to
18
th
applicants contend their
locus standi
to
derive from the fact that they were sub-contracted by the 1
st
respondent to supply goods such as bread, jam, soup, transport etc.
to be used in the school nutrition program in question and
that
payment for these services is still outstanding. Applicant number 11
has since filed a notice of withdrawal.
[6] The 1
st
respondent which is the
only party opposing this application, sought to assail the
applicants’
locus
standi
in
judicio
on
several grounds. I am however of the view that the applicants have
shown that they have
locus
standi
to
apply for the relief sought because as a general rule the
requirements for
locus
standi
injudico
are that:
2
(a) the
plaintiff/applicant for relief must have an adequate interest in the
subject matter of the litigation which is not a technical
concept but
is usually described as a direct interest in the relief sought;
(b) the interest must not
be far removed;
(c) the interest must be
actual, not abstract or academic;
(d) the interest must be
a current interest and not a hypothetical one.
[7] As indicated in
paragraph 3
supra
, the applicants no longer trust the members
of the board of directors of the 1
st
respondent on the
basis that they believe there is widespread maladministration and
embezzlement by the board of directors of subscription
monies as well
as payments made by the 3
rd
respondent in respect of the
tender awarded to the 1
st
respondent. This is denied by
the 1
st
respondent.
[8] So long standing is
this dispute that an attempt was once made to oust the board of
directors by putting first an interim board
in place and later a new
board of directors. This attempt to oust the “old board of
directors” culminated in an urgent
application that served
before
Miller J
.
[9] In his judgment in
June 2009,
Miller J
found that the election of the new board
was unlawful and set it aside. The effect of
Miller J’s
order was that the “old board” remained in place.
[10] It is that “old
board” that the applicants seek this court to direct that they
should convene a special general
meeting for the purpose of
appointing a new board of directors within five (5) days from the
granting of the final order filing
which the 1
st
to 10
th
respondents should be granted leave to convene a special general
meeting of the 1
st
respondent for the purpose of
appointing a new board of directors.
[11] In its opposition of
this application in July of 2009, the 1
st
respondent filed
an answering affidavit deposed to by Khululwa Qilingane in her
capacity as the secretary of the 1
st
respondent, wherein
she purported to have been authorised to do so by means of a
resolution of the 1
st
respondent’s board of
directors.
[12] According to Ms
Qilingane, the term of office of the board of directors having
expired in March 2008, and after experiencing
difficulties in
appointing a new board of directors, in that a general meeting could
not be convened for this purpose due to infighting,
a new board of
directors was ultimately appointed on 23
rd
of July 2008.
[13] I have no doubt that
it is the emergence of this factor i.e. the appointment of the new
board o the 23
rd
of July 2008 that has prompted the
amendment of the notice of motion to include a prayer that “that
the meeting and the results
thereof of which was held on the 23
rd
of July 2009 (
sic
) in which a purported new Board of Directors
was appointed be and is set aside as null and void and of no
consequence”. I
assume that the reference to “2009”
in the prayer is a mistake as the meeting to appoint new board of
directors was
held in 2008.
[14] I fail to see how it
can be argued on behalf of the applicants that the board of directors
appointed n the 23
rd
of July 2008 resulted in them
pretending as if they are oblivious of
Miller J’s
judgment which was delivered in June 2009.
[15] Be that as it may,
the applicants dispute that a new board of directors was appointed.
In paragraph 15 of the replying affidavit
they state as follows:
“
Our
understanding is that at no stage did the old board or the first
respondent under the control of the old board convene any meetings
for its members, in substantiation of this allegation, given the
prescripts of the statute, the first respondent should have furnished
us with details of where the meeting was convened, how the notices
were issued, the quorum and the attendance register. Until the
book
in which such resolution or original minute has been shown to us, the
minutes are disputed. Until the original attendance
register and
agenda is produced for copies and inspection. The meeting remains
disputed.”
[16] It has to be borne
in mind that 1
st
to 10
th
applicants are but
some of the ± 32 co-operatives forming membership of the 1
st
respondent. I fail to understand what they mean by saying “it
is surprising that the old board was continuously conducting
meeting
excluding the general membership”. I doubt that they represent
the entire membership of the 1
st
respondent. I say so
mindful also of the fact that the deponent to the founding affidavit
Ms Ncebakazi Madyibi was a co-opted member
of the “old board”.
There is no indication of what role Ms Madyibi as a member of the
“old board” which
had been “re-instated” by
Miller J
judgment did to normalise things.
[17] On the other hand,
members of the “old board” being Mr Mangwana, Mr Sonteya,
Ms Qilingana and Ms Maliphale were
present at the meeting where the
new board was allegedly appointed on the 23
rd
of July
2008.
[18] As indicated earlier
the deponent to the founding affidavit was part of the “old
board” that is alleged to be guilty
of complicity in the
embezzlement of monies. Although she is one of the members of the
“old board” she denies that
she is also tainted in the
manner she alleges against the board. I am not certain how this is
possible if she was also serving
on the same board. It is also
noteworthy that apart from this bare allegation of maladministration
and embezzlement of funds by
the “old board” nothing more
is said to show that this is the case.
[19] In paragraph 11 of
the founding affidavit, applicants state that – “... ...
all we shall be embarking on as the
primary co-operative is a proper
removal of the said board by the general membership of the first
respondent ... ....”
[20] In my view the
applicants have been overtaken by the events in that this process has
already been embarked upon and new board
of directors appointed in
July 2008.
[21] To resolve the
apparent dispute that has arisen as to whether or not the proper
procedure was followed in convening a meeting
and in conducting the
meeting where the members of the new board of directors was allegedly
appointed, I will adopt the approach
that was formulated by
Van
Wyk J
in
Stellenbosch
Farmers’ Winery Ltd v Stellenbosch Winery (Pty) Ltd
1957 (4) SA 234
(c)
a235 E – G
as
follows:
“
...
where there is a dispute as to facts a final interdict should only be
granted in notice of motion proceedings if the facts as
stated by the
respondents together with the admitted facts in the applicant’s
affidavit justify such an order.”
[22] Commenting on this
rule, it was stated in
Administrator,
Transvaal and Others v Theletsane and Others
[1990] ZASCA 156
;
1991 (2) SA 192
(A) at
1971 A – D
as
follows:
“
For my
purpose it is enough to say that in motion proceedings as a general
rule, decisions of fact cannot be founded on a consideration
of
probabilities, unless the court is satisfied that there is no real
and genuine dispute on the facts in question, or the other
parties
allegations are so farfetched or clearly untenable as to warrant
their rejection merely on the papers or that
viva
voce
evidence would not disturb the balance of probabilities appearing
from the affidavits.”
[23] Applicants’
denial of the fact that a meeting took place where a new board of
directors was appointed seems to be conditional
upon “original
attendance register and agenda being produced for copies and
inspection”. I am therefore not persuaded
that this raises a
genuine dispute of fact.
[24] I am also
unpersuaded that the applicants have succeeded in making out a case
for the confirmation of the rule.
Accordingly the
application is dismissed with costs.
__________
N G BESHE
JUDGE OF THE HIGH
COURT
APPEARANCES
For Applicant Mr V Kunju
Instructed by X M PETSE
INCORPORATED
4
th
Floor – Suite 445
Development House
York Road,
MTHATHA
Tel.: 047 – 531
1572
(Ref.: Mr Magcakini)
For Respondent Mr L
Matoti
Instructed by V V MSINDO
& ASSOCIATES
2
nd
Floor Absa Bank Building
60 Sutherland Street
MTHATHA
Tel.: 047 – 532
2231
(Ref.: Mr Msindo)
Date heard: 3 August 2010
Date Reserved 3 August
2010
Date
Delivered 10 November 2011
1
Replying
affidavit page 288 of the record
2
See
Erasmus , Superior Courts Practice, Service 37, 2011 B1 – B
126
11