About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2024
>>
[2024] ZAFSHC 377
|
|
Mabenge v Meals on Wheels Community Services South Africa (MOWCS-SA) and Others (6481/2023) [2024] ZAFSHC 377 (13 November 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable
/
Not
reportable
Case no: 6481/2023
In
the matter between
NELISA MABENGE
APPLICANT
And
MEALS
ON WHEELS COMMUNITY SERVICES
SOUTH
AFRICA (MOWCS – SA)
1
ST
RESPONDENT
DR.
DINGINDAWO PAUL SHONGWE
2
ND
RESPONDENT
MANDLA
LUPHONDWANA
3
RD
RESPONDENT
TONY
NEERINGS
4
TH
RESPONDENT
SIBONGILE
GOBILE
5
TH
RESPONDENT
JUMARA
NETSHIFULANI
6
TH
RESPONDENT
IAN
GROBLER
7
TH
RESPONDENT
NTANDOYENKOSI
GAQA
8
TH
RESPONDENT
EFFORT
BHEBHE
9
TH
RESPONDENT
GERSHON
NAIDOO
10
TH
RESPONDENT
MPHO
RANTSOABE
11
TH
RESPONDENT
BOICHWARELO
MASHISHI
12
TH
RESPONDENT
JEREMY
VLOTMAN
13
TH
RESPONDENT
ANEL
BOSMAN
14
TH
RESPONDENT
LUNGILE
SIWISA
15
TH
RESPONDENT
ZELDA
MOODLEY
16
TH
RESPONDENT
DIRECTOR
FOR NON-PROFIT ORGANIZATIONS
17
TH
RESPONDENT
Heard:
25 July 2024
Delivered:
13 November 2024
Summary:
Suspension of Applicant by board of directors of
1
st
Respondent whose term of office had already and allegedly lapsed -
issue no longer relevant in view of agreement that Applicant
would
appear in disciplinary hearing under auspice of the CCMA
ORDER
1.
In respect of prayers 2, 3 and 4 of the
notice of motion, no order is made, and each party to pay their own
costs
2.
In respect of the remainder of the prayers
in the notice of motion, it is confirmed that they have been
abandoned by the Applicant,
and each party is to pay their own costs
JUDGMENT
LOUBSER
PJ
[1]
The Applicant in this application
approached the Court on a semi-urgent basis for the following relief:
1.
That the matter be heard on a semi-urgent
basis given the ongoing non-compliance of the 1
st
to 16
th
Respondents with the constitution of the 1
st
Respondent and its implications on ongoing governance for the
organization.
2.
Declaring that the term of the 5
th
to 16
th
Respondents has, in accordance with clause 6.1.3 of the 1
st
Respondent’s constitution, lapsed and terminated as of the 28
February 2023.
3.
Declaring further that, in consequence of
prayer 2 above, the Meals on Wheels Community Services – SA
(MOWCS) board is and
has not been validly and properly constituted
since 1 March 2023 and therefore, has since 1 March 2023 lacked the
required quorum
to transact business as contemplated in clause 6.1
4.
Declaring the decision taken by the
improperly constituted MOWCS board from the 1
st
March 2023 to be
ultra vires
,
invalid and of no force and effect and set aside.
5.
Directing the 2
nd
Respondent (in his capacity as chairperson of the 1
st
Respondent) to convene the Annual General Meeting (AGM) of the 1
st
Respondent as contemplated in clause 11 of the MOWCS constitution
within 60 days of the date of this Order, to
inter
alia
, constitute a new board in
accordance with the MOWCS constitution.
6.
Directing the 2
nd
Respondent and/or newly constituted board pursuant to the AGM
contemplated in prayer 5 above to:
6.1
Institute and finalize processes for the
compilation and presentation of audited financial statements for all
the years where no
audit was conducted, namely 2020/2021; 2021/2022.
6.2
Institute a forensic investigation into
alleged and general financial management within MOWCS, audit of all
MOWCS bank accounts,
contracts, governance and procurement processes
within MOWCS as well as specific allegations of impropriety and/or
corruption levelled
against the 9
th
and 10
th
Respondents and/or the organization at large.
6.3
Do all things necessary to compile and
present the NPO reports for submission to the Department of Social
Development (DSD) as prescribed
in terms of the Social Development
Act of 1997 and clause 10.4 of the constitution.
6.4
Collate and give account of all bank
statements, financial activities including income and expenditure on
all bank accounts created
and operated under MOWCS and same to be
furnished to independent forensic investigators.
6.5
Regularize signatories onto MOWCS bank
accounts by enlisting appropriately authorized signatories and
removing those not properly
authorized.
7.
The 2
nd
Respondent is directed to report in the form of an
appropriate affidavit, to this Court concerning all the steps taken
to comply
with paragraph 5 to 6 above by no later than 60 calendar
days from the date of this order.
8.
The Court will issue further directions in relation to supervision of
the execution of paragraphs
5 and 6 of this order as circumstances
may require.
9.
Thereafter, the matter is to be re-enrolled on a date to be fixed by
the Registrar in consultation with the presiding
Judge for
consideration and determination of the aforesaid report, and reply,
to enable the Court to make a just and equitable
order.
10. Declaring the 5
th
Respondent a delinquent director in accordance with section 162(5)(
f
)
of the
Companies Act of 2008
, as amended.
11. An appropriate cost
order against the 2
nd
to 16
th
Respondents in
their personal capacities in accordance with clause 7.6 of the MOWCS
constitution.
[2]
Soon after the filing of this semi-urgent
application, the parties agreed to remove the matter from the urgent
roll and to have
the matter heard in due course. The matter
eventually came before this Court for adjudication. A reading of the
founding affidavit
of the Applicant revealed the wide scope of the
application. The founding affidavit and its annexures alone comprised
of some 253
pages.
[3]
In the founding affidavit dated 23 November
2023, the Applicant introduces herself as the national director and
chief executive
officer of the 1
st
Respondent non-profit registered organization. The 2
nd
Respondent is the chairperson of the 1
st
Respondent board of directors, and the 3
rd
to 16
th
Respondents are all directors of the board. The constitution of the
1
st
Respondent indicates that MOWCS-SA is a recognized, welfare service
owned and operated by the Seventh-Day Adventist Church, Southern
African Union Conference. The main objectives of the 1
st
Respondent is to provide poverty alleviation by means of cooked
meals, food gardens, feeding of children, meals on wheels and the
provision of meals at service centers and various service points.
[4]
It is further alleged in the founding
affidavit that the board of directors have neglected to ensure that
an AGM is convened, to
ensure that MOWCS operates on a budget
approved by the AGM, to ensure that there are audited financial
statements for the past
two financial years, to ensure a forensic
investigation regarding the financial affairs of the organization and
the serious allegations
levelled against the 9
th
and 10
th
Respondents, and to ensure that the directors whose term of office
has expired, are duly replaced through a proper process of an
AGM as
contemplated by the constitution. The applicant also wants the Court
to declare the 5
th
Respondent a delinquent director in view of the fact that he was a
director of another entity which was found guilty of fraud and
sentenced to pay a fine by a court of law.
[5]
As far as the term of office of the board
is concerned, the Applicant points out that the 5
th
to 16
th
Respondents were elected to serve as non-executive members of the
board by the AGM on 1 March 2022. In terms of the constitution,
their
term of office expired one year later, namely on 28 February 2023,
unless they became re-elected as board members. They were
not
re-elected, because an AGM has not bean held since, and they simply
continued as board members. As a result, the board lost
its quorum
after 28 February 2023. In terms of the constitution, the quorum
needed for the board to conduct its business, is 51
percent of the
board members.
[6]
On 22 April 2023 the board met and placed
the Applicant on suspension. Because there was no quorum present in
the circumstances,
the decisions taken at the board meeting were
ultra vires
and invalid, the Applicant contends. It is clear that the Applicant
is mainly challenging her suspension by the board on that day,
which
suspension she says was invalid and of no force and effect. She
alleges that she was suspended because she had dared to raise
the
issue of the 5
th
Respondent being a delinquent director with the board. There were
also additional, but bogus reasons for the decision to suspend
her,
she says.
[7]
The Applicant further claims that she was
the chairperson of the action committee of the 1
st
Respondent, which committee is acting in-between board meetings. The
2
nd
,
3
rd
,
4
th
,
9
th
and 10
th
Respondents served on this committee. According to the Applicant, she
was sidelined and outvoted in this committee on several governance
concerns she sought to bring to the attention of the committee. For
instance, she wanted a review of contracts to be done, and
she also
raised the failure of the chief financial officer to facilitate her
enlistment as a bank signatory to various MOWCS accounts,
without any
success.
[8]
The Applicant alleges that the last audited
financial statements were for the 2019 financial year, as the
directors failed to take
any action in this respect. She says the
directors do therefore not know the extent of donations received and
how the donations
were used. She was denied access to bank
statements, and they failed to institute investigations into serious
allegations of financial
irregularities, corruption and fraud. The
Applicant contends that the board members have displayed an utmost
failure of their duty
of care as directors.
[9]
The answering affidavit dated 22 December
2023 was deposed to by the 10
th
Respondent on authority of the board. He stated in the affidavit that
there were allegations on 22
nd
November 2022 that the Applicant had falsified her CV by claiming
that she was previously employed at the office of the Presidency
and
at Vodacom. As a result the board resolved on 14 December 2022 to
engage Mazars Forensic Investigators to investigate this
issue. On
the basis of the report presented by Mazars after their
investigations, the board suspended the Applicant as a member
of the
board on 22 April 2023.
[10]
The Applicant then took the decision to
suspend her, to the CCMA on 11, 12 and 13 October 2023. There the
parties came to an agreement
that a disciplinary hearing of the
Applicant would be held under the auspices of the CCMA in due course.
This arbitration was set
down for 23 to 26 January 2024 for hearing.
On 7 December 2023 the Applicant launched the present application,
the 10
th
Respondent states in the affidavit.
[11]
The 10
th
Respondent further denies that the term of office of the directors
mentioned had expired on 28 February 2023. They have remained
in
office because of circumstances beyond their control. He said that an
AGM could not be convened because they were still waiting
for the
audited financial statements, without which they could not proceed.
Meanwhile, the board remained properly constituted.
As far as the 5
th
Respondent is concerned, the deponent points out that the 5
th
Respondent was never personally charged or convicted, but only in his
representative capacity.
[12]
The 10
th
Respondent went on to deny that there were any governance issues or a
dereliction of duties by the board members. In addition,
the
Applicant was indeed a signatory to the 1
st
Respondent’s accounts, and she had access to the payroll
information. In the Mazars report it is suspected that the Applicant
had misrepresented her employment history and professional
affiliations. A confirmatory letter from the office of the Presidency
indicates that she had not worked there, as listed on her C.V. The
10
th
Respondent further points out that the Applicant had refused to
undergo any induction when she joined the 1
st
Respondent, and as a result, she had no understanding as to how the
organization operates.
[13]
In her replying affidavit dated 15 January
2024, the Applicant calls the report of Mazars biased, incomplete and
reviewable. She
claims that she was only granted signatory powers
after her suspension. She further denies that the AGM cannot be held
in the absence
of audited financial statements. She, however, stood
by her stance that the board was not properly constituted after 28
February
2023. She also informed that she would attend the
pre-dismissal arbitration in the CCMA from 23 to 26 January 2024.
[14]
At the commencement of the hearing of the
application, counsel for the Applicant made a surprise move by
announcing that prayers
5, 6, 7, 8, 9 and 10 of the notice of motion
are abandoned, and that the application would only proceed in respect
of prayers 2,
3 and 4. Counsel for the 5
th
Respondent immediately moved for an order that prayer 10 dealing with
declaring the 5
th
Respondent a delinquent director, is abandoned and that each party
should be ordered to pay his own costs. The Court made such
an order
as a consequence, which order will be repeated at the end of this
judgment for the sake of clarity.
[15]
These developments meant that only the
question of the composition of the board of directors after 28
February 2023, and the validity
of decisions made by the board after
this date, remained to be adjudicated.
[16]
On the date of hearing of this application,
there was nothing on the papers before the Court indicating how far
the disciplinary
hearing had progressed. In order to update the Court
on recent developments, a supplementary affidavit was filed by the
1
st
Respondent, dated 10 April 2024. In the supplementary affidavit, the
1
st
Respondent indicates that an AGM was held on 17 February 2024, at
which meeting a new board of directors was elected for the 1
st
Respondent. In response hereto, the Applicant filed an answering
affidavit in which she denies that the AGM was lawfully convened
in
terms of the 1
st
Respondent’s constitution. In a subsequent replying affidavit,
the 1
st
Respondent denied this allegation on 27 May 2024, and mentioned in
passing that the disciplinary action in the CCMA was still ongoing.
Meanwhile, the new board has not been joined in the present
proceedings, and the 1
st
Respondent has submitted at the hearing of the application that this
represents a misjoinder in the proceedings.
[17]
Be it as it may, the Applicant subsequently
took a decision to abandon most of the prayers in the notice of
motion, and to proceed
only with prayers 2, 3 and 4. She is, in other
words, still persisting with her case that the old board was not
properly constituted
when they made decisions after 28 February 2023.
At the same time, it is clear to this Court that the Applicant is
actually only
aggrieved by the decision to suspend her, because that
is the decision that she has taken to the CCMA.
[18]
The problem is that the agreement of the
parties that this issue would rather be resolved at a disciplinary
hearing at the CCMA,
had brought about a total change in the dynamics
of the point in question. The focus has now shifted away from the
suspension itself
to a proper disciplinary hearing, where a decision
will be made in due course whether the Applicant’s relationship
with the
1
st
Respondent is terminated or not. The question whether the decision to
suspend was lawful, has now became entirely moot. This is
so because
a suspension is usually only a precautionary measure to accommodate
further investigations, which could result in the
ultimate step of a
disciplinary hearing.
[19]
In the circumstances, this Court cannot
make any order in terms of prayer 2, 3 and 4 as prayed for, because
those prayers have become
irrelevant and of no consequence. Court
Rule 6(6)
empowers this court to make no order in application
proceedings, save for any orders as to costs.
[20]
As for costs, the present situation has
been caused by an agreement between the parties to rather proceed to
a disciplinary hearing
of the Applicant. In my view, it would
therefore be improper to order any of the parties to pay the costs of
the other. Each
party should pay their own costs. As far as the
remainder of the prayers are concerned, which have been abandoned by
the Applicant,
it is clear to this court that this application has
been overtaken by the recent events alluded to above. I am of the
view that
the Applicant should not be burdened by a costs order in
such circumstances. Again, each party should pay their own costs as
far
as the remainder of the prayers are concerned.
[21]
The following orders are made:
1.
In respect of prayers 2, 3 and 4 of the notice of motion, no order is
made, and
each party to pay their own costs.
2.
In respect of the remainder of the prayers in the notice of motion,
it is confirmed
that they have been abandoned by the Applicant, and
each party is to pay their own costs.
PJ LOUBSER, J
Appearances
For
the Applicant:
Adv.
BM Mkhize
Instructed
by:
Matee
Attorneys, Bloemfontein
For
the 1
st
Respondent:
Adv.
L. Moreland
Instructed
by:
Joubert
Attorneys, Wellenvreden Park
c/o
Hendrè Conradie Inc., Bloemfontein
For
the 5
st
Respondent:
Adv.
VM Mndebele
Instructed
by:
KMNS
Attorneys, Sandton
c/o
Blair Attorneys, Bloemfontein