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2024
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[2024] ZALMPPHC 85
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Mabulanyane N.O and Others v Magolego and Others (11014/2022) [2024] ZALMPPHC 85 (26 July 2024)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURTOF
SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
CASE NO: 11014/2022
(1)
REPORTABLE:
YES/NO
(2)
OF
INTEREST TO THE JUDGES: YES/NO
(3)
REVISED.
In
the matter between:
MABULANYANE
NEMIA MAGOLEGO N.O
First
Applicant
SELETANE
PHILEMON MOKOBAKA N.O
Second
Applicant
MADIETE
EUNICE MOROTA N.O
Third
Applicant
LETSEPE
JOYCE SELOANE N.O
Fourth
Applicant
MPHELA
MAMASELE DINA N.O
Fifth
Applicant
CHIDI
JOHN MASHILO N.O
Sixth
Applicant
and
MAGOLEGO
KGOLA KLAAS
First
Respondent
MASHILO
MAKWESHE LUCAS
Second
Respondent
MAGOLEGO
MAPONYA EDWARD
Third
Respondent
MAGOLEGO
BOKGOBELO ELLIOT
Fourth
Respondent
MAGOLEGO
MOSHIANE JULIA
Fifth
Respondent
MAGOLEGO
DONALD HLANUDI
Sixth
Respondent
MAGOLEGO
SERVICE MOTUBATSE
Seventh
Respondent
MADUANE
MOTLALECHEGO SHARDRACK
Eighth
Respondent
MOROTA
MATSHEHLE SHARDRACK
Ninth
Respondent
MOROTA
TEBADI HENDRICK
Tenth
Respondent
MOROTA
MABORE JOHANNA
Eleventh
Respondent
In
re:
In
the matter between:
MAGOLEGO
KGOLA KLAAS
First
Applicant
MASHILO
MAKWESHE LUCAS
Second
Applicant
MAGOLEGO
MAPONYA EDWARD
Third
Applicant
MAGOLEGO
BOKGOBELO ELLIOT
Fourth
Applicant
MAGOLEGO
MOSHIANE JULIA
Fifth
Applicant
MAGOLEGO
DONALD HLANUDI
Sixth
Applicant
MAGOLEGO
SERVICE MOTUBATSE
Seventh
Applicant
MADUANE
MOTLALECHEGO SHARDRACK
Eighth
Applicant
MOROTA
MATSHEHLE SHARDRACK
Ninth
Applicant
MOROTA
TEBADI HENDRICK
Tenth
Applicant
MOROTA
MABORE JOHANNA
Eleventh
Applicant
and
MMIDI
WILLIAM MAGOLEGO N.O
First
Respondent
CHIDI
JOHN MASHILO N.O
Second
Respondent
SELETANE
PHILEMON MOKOBAKA N.O
Third
Respondent
LEHWELELE
GEOFFREY MAGOLEGO N.O
Fourth
Respondent
MADIETE
EUNICE MOROTA N.O
Fifth
Respondent
LETSEPE
JOYCE SELOANE N.O
Sixth
Respondent
MPHELA
MAMASELE DINA N.O
Seventh
Respondent
HAMANE
RALPH LEKGEU N.O
Eighth
Respondent
MABULANYANE
NEMIA MAGOLEGO N.O
Ninth
Respondent
MASTER
OF THE HIGH COURT
Tenth
Respondent
JUDGEMENT
GAISA AJ
INTRODUCTION
[1] This is an
application under Rule 30(1) of the Uniform Rules of Court to set
aside two Rule 7(1) notices issued by the respondents
(who are the
applicants in the main application) on 13 February 2023. The
applicants contend that the Rule 7(1)
notices are irregular and
should be set aside.
[2]
The matter arises in the context of ongoing litigation involving the
Ditamaga Trust. The main application concerns issues of
accountability and proper governance of the trust. As trust
beneficiaries, the respondents seek relief against the applicants in
their capacity as trustees.
[3]
Two separate but identical Rule 7(1)
notices were issued - one relating to the main application and
another to a Rule 47 application
for security for costs. The notices
dispute the authority of the applicants (as trustees) to act on
behalf of the Ditamaga Trust
and require the applicants' attorneys to
satisfy the court of their authority to act.
[4]
The Rule 7(1) Notices
4.1.
The relevant portions of the Rule 7(1)
notices state:
"Take notice that
the applicants dispute the authority of the respondents to act on
behalf of the Ditamaga Trust and requires
that the said attorneys
satisfy the court that they are authorised to act in accordance with
the provisions of rule 7(1) read with
rule 7(4)."
4.2.
The applicants raise three main grounds of
irregularity:
4.3.
The Ditamaga Trust is not cited as a party
in the main application, so its authority cannot be disputed.
4.4.
The notice improperly requires the
attorneys, rather than the trustees themselves, to satisfy the court
of their authority.
4.5.
The notice was served late, outside the
10-day period prescribed by Rule 7(1).
ANALYSIS
[5]
Citing of the Trust
5.1
The applicants argue that because the
Ditamaga Trust is not formally cited as a party, its authority cannot
be disputed via Rule
7(1). This argument is without merit.
5.2
It is trite that a trust does not have a
separate legal personality and cannot sue or be sued in its own name.
The proper parties
to cite are the trustees in their official
capacity. That is precisely what has been done here - the applicants
are cited as trustees
of the Ditamaga Trust.
5.3
The trust is effectively before the court
by citing the trustees in their official capacity. There is no
requirement to cite "The
Ditamaga Trust" as a party
separately. The trustees represent and act on behalf of the trust,
and their authority to do so
can be validly challenged under Rule
7(1).
5.4
Moreover, the Rule 7(1) notice does not
purport to challenge the trust's authority but rather the trustees'
authority to act on
behalf of the trust. This is an entirely proper
use of Rule 7(1).
5.5
I, therefore, find no irregularity on this
ground.
[6]
Requiring Attorneys to Satisfy the
Court
6.1
The applicants next contend that it is
irregular to require the attorneys, rather than the trustees
themselves, to satisfy the court
of their authority.
6.2
This argument misreads the Rule 7(1)
notice. The notice disputes the trustees' authority to act for the
trust, but then requires
the attorneys to satisfy the court of their
authority to act. This is consistent with Rule 7(1) read with Rule
7(4).
6.3
Rule 7(1) allows a party to dispute "
the
authority of anyone acting on behalf of a party
".
The trustees are acting on behalf of the trust. Their authority to do
so is what is being disputed.
6.4
Rule 7(4) then provides that where
authority is disputed, "the attorney or agent" whose
authority is disputed shall satisfy
the court of their authority to
act. The attorneys are the agents acting on instructions from the
trustees. It is, therefore, proper
to require the attorneys to
satisfy the court.
6.5
The respondents are ultimately seeking
proof that the trustees properly resolved to oppose the main
application and instruct attorneys
in accordance with the trust deed.
The attorneys would need to produce such proof to satisfy the court
of their authority to act.
6.6
There is nothing irregular about framing
the Rule 7(1) notice in this manner. It gives effect to both the
letter and spirit of Rules
7(1) and 7(4).
Here
is the principle: the courts should not countenance technical
objections to less-than-perfect procedural steps where there
is
substantial compliance with the rules and no prejudice. This
principle aligns with the overarching objective of the rules
of
court, which is to facilitate the resolution of the real issues in
dispute.
In
applying this principle to the present case, even if the wording of
the notices, as the applicants would want this court
to believe,
was faulty, the substance of what is being sought - namely, proof
of the trustees' authority to act following the
trust deed - is
apparent. Absent any demonstrable prejudice to the applicants, it
would not serve the interests of justice
to set aside these notices
purely on such technical grounds.
The
court notes that if the trustees have indeed acted in accordance
with the trust deed, providing the requested documentation
should
be straightforward. Transparency in the administration of trusts is
crucial, particularly where the interests of beneficiaries
are
concerned.
6.10
The court encourages open and forthright disclosure of relevant
information to resolve disputes efficiently and maintain the
integrity of trust administration.
[7]
Lateness of the Notice
7.1
The final ground of irregularity is that
the Rule 7(1) notices were served late, outside the 10-day period
prescribed by Rule 7(1).
7.2
Rule 7(1) requires the notice to be served
within 10 days after it has come to the notice of a party that
someone is acting on behalf
of another party. The applicants argue
that the respondents became aware on 26 January 2023 when the
answering affidavit was served.
The notices were only served on 13
February 2023, outside the 10- day period.
7.3
Even accepting the applicants' version of
when the respondents became aware, the notices were at most 4 days
late (excluding the
intervening weekend). This is a relatively minor
delay.
7.4
More importantly, Rule 7(1) expressly
allows for late filing of the notice "
with
the leave of the court on good cause shown at any time before
judgment"
. The court, therefore,
has the discretion to condone late filing.
7.5
In considering whether to exercise this
discretion, the following factors are relevant:
7.5.1
The delay was short;
7.5.2
There is no prejudice to the applicants;
7.5.3
The issue raised - whether the trustees
properly resolved to oppose the main application - goes to the heart
of the dispute and
is of fundamental importance;
7.5.4
Refusing the notice would elevate form over
substance and potentially allow the main application to proceed
without clarity on a
crucial issue of authority;
7.5.5
The respondents are beneficiaries of the
trust seeking accountability, which is in the interests of justice;
7.5.6
There are no other bars to the respondents
pursuing the Rule 7 challenge.
7.6
Weighing all these factors, I am satisfied that it is in the
interests of justice to condone the short delay and allow the Rule
7(1) notices to stand. The applicats have not shown any prejudice
from the brief delay. In contrast, there would be potential prejudice
to the respondents and the administration of justice if the notices
were set aside on this technical ground.
7.7
The
applicant’s argument is purely being over-technical and not
constructive. Considering that no question of prejudice to
the
applicants
has arisen, Schreiner JA reasoned in
Trans-Africa
Insurance
Co. Ltd v Malulek
[1]
that,
“…
technical
objections to less than perfect procedural steps should not be
permitted in the absence of prejudice, to interfere with
the
expeditious and if possible
inexpensive
decisions of cases on their real merits.
”
7.8
I therefore find that the late filing does
not render the notices irregular, as the court's discretion to
condone should be exercised
in favour of the respondents.
CONCLUSION ON
IRREGULARITY
[8]
For the reasons above, I find that none of
the grounds advanced by the applicants establish that the Rule 7(1)
notices are irregular
or improper. The notices are valid and will
stand.
[9]
Even if I had found any technical
irregularity, I would have exercised my discretion under Rule 30(3)
to refuse to set the notices
aside. The issues raised are important
for the proper determination of the main application. Setting aside
the notices would elevate
form over substance and potentially allow
the litigation to proceed without clarity on the fundamental question
of the trustees'
authority. That would not be in the interests of
justice.
OPENNESS AND
TRANSPARENCY IN TRUST MATTERS
[10]
Given that this matter involves a community
trust, the court is mindful of the broader implications of this
dispute. The Ditamaga
Trust was established to benefit a community.
The efficient and transparent administration of such trusts is
crucial not only for
the immediate beneficiaries but also for the
wider community whose interests the trust is meant to serve.
[11]
The court, therefore, encourages the
parties to seek amicable resolution of their disputes where possible
and to prioritise the
efficient administration of the trust. While
the court will adjudicate the legal issues before it, the parties are
reminded of
their broader responsibilities to the community.
[12]
Trustees should be transparent in their
dealings and mindful of their fiduciary duties. While beneficiaries
are entitled to hold
trustees accountable, they should exercise their
rights in a manner that does not unduly hinder the trust's
operations. The ultimate
goal, which all parties should work towards,
is to ensure that the trust fulfils its purpose of benefiting the
community it was
established to serve.
COSTS
[13]
The applicants have been unsuccessful in
this application. The general principle is that costs follow the
result. However, the respondents
have argued for punitive costs on an
attorney and client scale against the opposing respondents
(applicants in this Rule 30 application)
personally.
[14]
In considering this request, I have
considered the following factors:
35.1
The respondents contend that there was no
irregular step warranting the Rule 30 applications.
35.2
The respondents argue the opposing
respondents could not demonstrate any prejudice resulting from the
alleged irregularity.
35.3
There is a suggestion that the Rule 30
applications may have been a delaying tactic rather than a genuine
procedural objection.
35.4
The respondents assert that, as trustees,
the opposing respondents should have known that a resolution was
needed to show they were
acting according to the trust deed.
35.5
The respondents contend that ordering costs
against the trustees in their official capacities would effectively
result in the beneficiaries
paying themselves, as trust assets would
be used.
[15]
The court has a wide discretion in awarding
costs. While the general rule is that costs follow the result, the
court may depart
from this principle where the interests of justice
require it.
[16]
In considering whether to award punitive
costs, the court must be satisfied that the conduct of the party
against whom such an order
is sought was vexatious, reckless, or
amounted to an abuse of process.
[17]
After carefully considering the submissions
and the overall conduct of the litigation, I am not persuaded that
the threshold for
a punitive costs order has been met in this case.
[18]
While the Rule 30 applications were
ultimately unsuccessful, I do not find that they were brought in bad
faith or for an improper
purpose. The issues raised, particularly
regarding the formulation of the Rule 7 notices, were not frivolous
and may have required
judicial determination.
[19]
However, I am mindful of the concerns
raised regarding using trust assets for litigation costs. In
balancing the various interests
at stake, including the need for
accountability in trust administration and the rights of
beneficiaries, I make the following order:
ORDER
[20]
As a result, I make the following order:
20.1.
The application in terms of Rule 30(1) to
set aside the Rule 7(1) notices dated 13 February 2023 is dismissed.
20.2.
The opposing respondents (the six
applicants in the Rule 30 applications) are ordered to pay the costs
of the Rule 30 applications
on a party-to-party scale.
20.3.
The
opposing
respondents
are
to
pay
these
costs
in
their
personal capacities, jointly and severally,
with any one paying and the others
absolved.
20.4.
The
opposing
respondents
are
prohibited
from
using
trust
assets
to
satisfy this cost order.
GAISA AJ
JUDGE OF THE HIGH
COURT,
POLOKWANE LIMPOPO
DIVISION
DATE
HEARD:
2
May 2024
DATE
DELIVERED:
Appearances:
26
July 2024
For
the Applicants
(Respondents
in the main application):
Adv.
Mokwena
INSTRUCTED
BY:
Gilbert
Motedi Attorneys Inc.
c/o
Matotola Tseleng Attorneys
5
Bekker Street, Polokwane
For
the Respondents
(Applicants
in the main application):
Adv.
Green
INSTRUCTED
BY:
DDKK
Attorneys
19
Watermelon Street Polokwane
[1]
1956
(2) SA 273
(AD)