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2024
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[2024] ZAECELLC 45
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Ramela v Ndzunzu and Others (126/2022) [2024] ZAECELLC 45 (30 October 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, EAST LONDON CIRCUIT COURT)
NOT REPORTABLE
Case No126/2022
In the matter between:
OMPHILE
RAMELA
APPLICANT
AND
SIMPHIWE
FERRINGTON NDZUNZU
1
ST
RESPONDENT
BORDER
CRICKET NPC (2000/012072/08)
2
ND
RESPONDENT
BOARD
OF DIRECTORS OF BORDER CRICKET NPC
3
RD
RESPONDENT
MEMBERS’
COUNCIL FOR BORDER CRICKET NPC
4
TH
RESPONDENT
CRICKET
SOUTH
AFRICA
5
TH
RESPONDENT
JUDGEMENT
PIENAAR AJ
THE PARTIES
1.
This is a cricketing dispute. The applicant
essentially and through an application seeks that the 1
st
respondent’s occupation of office as a
director of the 2
nd
respondent be declared unlawful.
2.
The applicant is Mr. Ramela and according to him,
he is the current chief executive officer (CEO) of Border Cricket
NPC, the 2
nd
respondent.
It is disputed that the applicant is the current CEO.
3.
The applicant has an impressive resumé.
He is a former professional cricketer for some of the best cricketing
teams in the
world and has simultaneously obtained four degrees, the
highest being a Master of Economics.
4.
In what follows 1
st
to 4
th
respondents shall collectively be referred to as
“the respondents”.
5.
The 1
st
respondent is Mr. Ndzundu, the director and
chairperson of the 2
nd
respondent.
6.
The 2
nd
respondent is Border Cricket NPC (non-profit
company), a community-based sports organization serving the needs of
the Border
cricket community.
7.
The 3
rd
respondent is the board of directors for Border
Cricket NPC (the 2
nd
respondent). The board exists to ensure that the
2
nd
respondent’s
corporate governance policies incorporate corporate strategy, risk
management, accountability, transparency,
and ethical business
practices.
8.
The 4
th
respondent is the members' council for Border
Cricket NPC (the 2
nd
respondent).
9.
The 5
th
respondent is Cricket South Africa, a non-profit
company with its primary objectives to promote and grow the game of
cricket in
South Africa.
RELIEF SOUGHT
10.
On 5 September 2024 the applicant brought a
semi-urgent application before Stretch J. The application was divided
into part A and
part B. Part A served before Stretch J.
11.
Stretch J granted the relief sought in part A
including the following provisions:
11.1
The applicant is granted the interlocutory relief
sought in prayers 1, 2, 3, 4, and 5 of part A of the notice of
motion, pending
the finalisation of the relief sought in part B
thereof.
11.2
The costs of the application are reserved for the
court dealing with the relief set forth in part B of the application.
12.
Prayers 1-5 of part A of the notice of motion read
as follows:
1.
Dispensing with normal forms and service provided
for in the normal rules of this Honourable Court and disposing of
this matter
by way of urgency in terms of rule 6 (12).
2.
Interdicting and restraining the 1
st
respondent from participating as a director in the
affairs of the 2
nd
respondent pending finalisation of the order
sought in part B of this notice of motion.
3.
Interdicting any deployment of the 1
st
respondent to attend any meeting acting in his
status as such and as a director of the 2
nd
,
3
rd,
and
4
th
respondents.
4.
Interdicting and restraining the 1
st
respondent from attending all meetings in his
capacity as a director and taking decisions on behalf of the 2
nd
respondent pending the finalisation of the order
sought in part B of the notice of motion.
5.
Interdicting and restraining the 1
st
respondent from forming part of any
decision-making in the affairs of the 2
nd
respondent either as a director or in his personal
capacity pending finalisation of the order sought in part B of the
notice of
motion.
13.
Provision was made in the order for the further
conduct of the matter.
14.
At the time the respondents brought an application
for condonation for their failure to deliver their notice of
opposition during
the 10-day period prescribed by the rules of the
court as well as an application for a postponement or a further
extension of time
to deliver answering papers. Such relief sought was
refused by Stretch J.
15.
Part B now serves before me.
16.
In part B the following relief is requested by the
applicant:
1.
That the continued occupation of the 1
st
respondent as an office bearer, in his capacity as
director of 2
nd
respondent, is contrary to clauses 20.21 and 20.22
of the 2
nd
respondent’s
memorandum of incorporation first adopted on 22 August 2013.
2.
Declaring the 1
st
respondent’s occupation of office as a
director and chairperson of the 2
nd
respondent as unlawful.
3.
Directing that the name of the 1
st
respondent be removed from the 2
nd
respondent’s COR39 by the office of the
commissioner of companies and intellectual property commission.
4.
That any of the respondents shall pay the costs
of part B of this application only in the event of their opposition
being unsuccessful
in respect of part B of the notice of motion.
5.
Further and/or alternative relief.
17.
The respondents have in the interim filed
answering papers and the applicant replying papers.
THE ISSUES
18.
Although the papers are relatively voluminous, the
issues are crisp and are the following:
18.1
A lack of urgency, contended by the respondents as
a point
in limine.
18.2
A material nonjoinder, contended by the
respondents as a point
in limine.
18.3
A lack of
locus
standi
. The applicant contends that the
deponent on behalf of the respondents does not have the necessary
authority to defend the application
and depose to an answering
affidavit on behalf of the respondents.
18.4
Whether the applicant is entitled to his main
relief sought inter alia whether the 1
st
respondent’s occupation of office as a
director of the 2
nd
respondent is unlawful.
19.
I shall deal with points 1 and 3 first and
thereafter with points 4 and 2.
20.
Advocate Skoti appeared on behalf of the applicant
and attorney Mr Van Zyl appeared on behalf of the respondents. I am
indebted
to them for providing me with bundles of authorities when
the matter was heard.
LACK OF URGENCY
21.
I alluded to above that on 5 September 2024
Stretch J issued an order dispensing with normal forms and service
provided for in the
normal rules of court and disposing of the matter
by way of urgency in terms of rule 6 (12).
22.
Part B of the application was entertained by me on
3 October 2024.
23.
The respondents inter alia argue that the
memorandum of incorporation of the 2
nd
respondent provides that only urgent matters may
be heard by a court and sets out a dispute resolution mechanism for
matters that
are not urgent, which should be followed. The applicant
was therefore precluded from approaching the court in the
circumstances
and the rule nisi for this reason should be struck from
the roll with costs and the rule nisi discharged.
24.
Section 36.1 of the memorandum of incorporation,
more fully, states that subject to the Constitution of the Republic
of South Africa,
and save in circumstances where there is a need for
urgent relief of the sort which cannot be obtained through the
dispute prevention
or resolution procedures contemplated by the
memorandum of incorporation, no club, club members, official,
prescribed officer,
office bearer or affiliate shall approach a court
of law to decide the dispute it has with the body or individual
falling under
the jurisdiction of the company.
25.
I am of the view that there was a need for urgent
relief as contemplated in section 36.1. The dispute resolution
procedure provided
appears to be laborious and I cannot fault the
applicant for bringing his application, on a semi-urgent basis.
26.
The certificate of urgency filed by Mr Skoti
alludes to various grounds of urgency, which are persuasive.
27.
The horse bolted, all the papers were filed, and
full argument was addressed to me. To now strike the application of
the roll appears
not to be in the interests of justice.
28.
On behalf of the applicant, it was argued by Mr
Skoti that the issue of urgency was decided by Stretch J and is
res
judicata
.
29.
I do
not agree with Mr Skoti and believe that the issue of urgency may be
revisited by me.
[1]
I have,
however. no reason to differ from Stretch J in respect of urgency.
30.
This point
in limine
by the respondents can accordingly not be upheld.
LACK OF LOCUS STANDI
31.
The applicant contends that the deponent on behalf
of the respondents does not have the necessary authority to defend
the application
and depose to an answering affidavit on behalf of the
respondents.
32.
The applicant submits that the deponent does not
allege and prove that he is authorised to act on behalf of the 1
st
to 3
rd
respondents, and neither does he possess
the authority to oppose the proceedings. The deponent does not
pertinently make
the crucial averment alleging that he has the
authority to act and oppose the proceedings for the respective
respondents. Nor has
a resolution been filed.
33.
In his replying affidavit the applicant alleges
that he spoke to one Monty Williams who is also a director of the 2nd
respondent,
telephonically. Mr Williams told him that the board had
not sat and taken a resolution on authority to act and oppose the
proceedings.
The applicant also spoke to one Mr Rubushu, a member of
the 4
th
respondent,
who confirmed what Mr Williams had said.
34.
The applicant accordingly applied for admission of
such hearsay evidence through
section 3
of the
Law of Evidence
Amendment Act 45 of 1988
. Even if I do allow such evidence, it is of
limited value being untested.
35.
On the respondents’
part Mr
Van Zyl
correctly submitted that the applicant has not utilised the
provisions of uniform
rule 7
(1).
Rule 7.1
states that the power of
attorney to act need not be filed, but the authority of anyone acting
on behalf of the party may, within
10 days after it has come to the
notice of a party that such person is so acting, or with the leave of
the court on good cause
shown at any time before judgement, be
disputed, whereafter such person may no longer act unless he
satisfies the court that he
is authorised to do so, and to enable him
to do so the court may postpone the hearing of the action or
application.
36.
Be that as it may, I am of the view that the
respondents have proven (on a balance of probabilities) that the
deponent, Mr Beyer
has the necessary authority to act on their behalf
and to oppose the application.
37.
In his answering affidavit Mr Beyer states that he
is the acting CEO and a director of the 2
nd
respondent. He further states that he deposes to
his affidavit on behalf of the 1
st
to 4
th
respondents, by whom he is duly authorised, in
response to the application by the applicant.
38.
Of importance is that Mr Beyer is the CEO of the
2
nd
respondent.
Further, the words “in response to the application by the
applicant” can only mean that he is authorised
to oppose the
applicant’s application.
39.
Further,
as to a lack of a resolution the Appellate Division held in
Tattersall
v Nedcor Bank Ltd
[2]
that the resolution of a company authorising the bringing of an
application need not always be annexed to the founding affidavit
and
that the court may be satisfied that authority is proved if there is
sufficient
aliunde
evidence
appearing from the affidavits and annexures.
40.
I accordingly conclude that Mr Beyer has the
necessary authority to represent the respondents.
WHETHER THE APPLICANT
IS ENTITLED TO THE MAIN RELIEF SOUGHT
41.
The main relief sought is essentially that the 1
st
respondent’s occupation of office as a
director of the 2
nd
respondent is unlawful. The salient challenges in
the application are centered on the following clauses of the
memorandum of incorporation.
42.
Clause 20.21 which provides that a director
(including the sitting President and Vice President) shall be
entitled to serve as a
director for longer than 2 terms on condition
that:
(a)
No
director shall be eligible to serve for more than 9 consecutive years
in aggregate
[3]
and/or for 2 consecutive terms as President and/or Vice- President;
and
(b)
One of the terms in the period of 9 years is
served as President or Vice- President.
43.
Clause
20.22 which provides that a director having served as a director for
the maximum term permissible in terms of clauses 20.20,
20.21, 20.24
and 20.25, and 20.26 (as applicable)
shall
only be eligible for re-election as a director after a “cooling-off
period” of 2 years, determined from the date
of his removal or
resignation as a director until the date of his reappointment
.
[4]
44.
Moreover, as alluded to by the applicant and most
importantly, section 66 (4) (i) of the Companies Act 71 of 2008 (the
Act) states
that a company’s memorandum of incorporation may
provide for the direct appointment and removal of one or more
directors
by any person who is named in, or determined in terms of,
the memorandum of incorporation.
45.
The CIPC documents attached show that the 1
st
respondent has been a director since August 2013
without any cooling off period, thus a period of 11 years. This is
quite apparently
in contravention of the above provisions and appears
to be common cause.
46.
In the answering affidavit it is stated that the
memorandum of incorporation is in the process of being amended,
amongst others
by removing the general imitation of a maximum of 9
years as a director.
47.
However, in my view, without being amended, the
proposed memorandum of incorporation cannot have legal effect. The
prescripts of
clause 7 of the memorandum of incorporation read with
sections 16 (1) and 16 (4) of the Act, dealing with amendments to the
memorandum
of incorporation, have also not been followed.
48.
The respondents further submitted that the
suspension and removal of directors are dealt with in sections 71 and
162 of the Act,
which are all-encompassing. As such, a director may
not be removed using the provisions of the memorandum of
incorporation.
49.
Section
71 (1) states that despite anything to the contrary in the company’s
memorandum of incorporation or rules, or any
agreement between a
company and a director, or between any shareholders and a director, a
director
may
[5]
be
removed by an ordinary resolution adopted at the shareholders meeting
by the persons entitled to exercise voting rights in an
election of
that director…
50.
The reference to the memorandum of incorporation
in the section, in my view, entails that one can have regard to the
memorandum
of incorporation, in removing a director. This aspect is
further dealt with below.
51.
Section 162 deals with the removal of a delinquent
director by the court. This is clearly not the case here nor has the
applicant
made out a case therefore in the papers.
52.
A
delinquent director is someone who has for example grossly abused the
position of director or is guilty of serious misconduct.
[6]
53.
Do sections 71 and 162 oust a reliance on the
memorandum of incorporation in respect of the removal of a director?
Nowhere is it
so stated.
54.
Such ousting will render the provisions of the
memorandum of incorporation superfluous. Also,
Ubi
ius ibi remedium
. Where there is a
right there must be a remedy. On 1
st
respondent overstaying his welcome, the applicant
was entitled to act.
55.
The memorandum of incorporation can be regarded as
subordinate (legislation) to the Act, such as for example a
proclamation.
56.
I believe that a court should attempt, as far as
possible, to reconcile the provisions of the memorandum of
incorporation with the
provisions of the Act.
57.
The
courts will interpret subordinate legislation in such a way as to
render it in conformity, rather than in disconformity, with
existing
law (legislation).
[7]
58.
In
R
v Maseti
[8]
the following was stated:
“
Now
it seems to me that the Act and Proclamation are in
pari
materia
and
in terms of
R
v Palmer
…
,
should therefore be read ‘as forming one system and as
interpreting and enforcing each other ‘”
59.
The Act and the memorandum of incorporation should
therefore not be read as excluding one another but rather as
including one another.
60.
Most importantly however, is section 66 (4) (i) of
the Act which states that a company’s memorandum of
incorporation may provide
for the direct appointment and removal of
one or more directors by any person who is named in, or determined in
terms of, the memorandum
of incorporation. This section in my view,
puts paid to the respondents’ argument
61.
I accordingly hold that the applicant is entitled
to the main relief.
NON-JOINDER
62.
The respondents submit, about the third prayer
sought, that the applicant seeks an order that the commissioner of
the companies
and Intellectual property commission (the CIPC) remove
the name of the 1
st
respondent from its records but fails to cite the
CIPC.
63.
The respondents further submit that an order
directing the CIPC to remove the 1
st
respondent cannot be sustained without being cited
as the removal of directors is a material part of the CIPC’s
processes
in which it has a material interest. There has accordingly
been material non-joinder.
64.
I do not agree.
65.
In his
heads of argument, Mr Van Zyl referred to the Supreme Court of Appeal
case in
Absa
Bank Ltd v Naude NO
,
[9]
where it is stated that the
test whether there has been non-joinder is whether the party has a
direct and substantial interest
in the subject matter of the
litigation which may prejudice the party that has not been joined.
66.
I do not believe that the CIPC has an interest in
the subject matter of the litigation nor that it will be prejudiced
by its non-joinder.
I agree with Mr Skoti that what the CIPC is
merely requested to do is perform an administrative function of
removing a director’s
name from its records.
67.
What would the CIPC have done if the papers were
served on it? Probably, nothing.
68.
Often
entities such as the Sheriff or the South African Police Services are
ordered by the court to do certain things without them
having been
joined.
[10]
69.
This point
in limine
can accordingly not be upheld.
COSTS
70.
There is no reason why costs should not follow the
event.
ORDER
71.
I accordingly issue the following order:
1.
It is declared that the continued occupation of
the 1
st
respondent
as an office bearer, in his capacity as director of 2
nd
respondent, is contrary to clauses 20.21 and 20.22
of the 2
nd
respondent’s
memorandum of incorporation first adopted on 22 August 2013.
2.
It is declared that the 1
st
respondent’s occupation of office as a
director of the 2
nd
respondent is unlawful.
3.
It is ordered that the name of the 1
st
respondent be removed from the 2
nd
respondent’s COR39 by the office of the
commissioner of companies and intellectual property commission.
4.
It is ordered that the 1
st
to 4
th
respondents pay the costs of the application, in
respect of both parts A and B, jointly and severally, including the
costs of counsel
on scale B.
B PIENAAR
ACTING JUDGE OF THE
HIGH COURT
Date heard: 3
October 2024
Date of judgement: 30
October 2024
For the
applicant:
Adv Skoti
Instructed
by:
Cumberlege Attorneys
29
Becoma Street, Berea
EAST
LONDON
For the 1
st
to
4
th
respondents: Mr
Van Zyl
Bate
Chub and Dickson Attorneys
Suite
3, Norvia House
34
Western Avenue, Vincent
EAST
LONDON
[1]
Compare
Metsimaholo
Local Municipality v Unlawful Occupiers of and Persons intending to
Unlawfully Occupy the Land
(6054/2022
[2023] ZAFSHC 146
(26 April 2023) paragraph 26; and
Kena
Media (Pty) Ltd v Mangaung Metropolitan Municipality
[2022] 4 All SA 791
(FB)
(10 October 2022) paragraphs 16-20
[2]
[1995] ZASCA 30
;
1995 (3) SA 222
(A) (28 March 1995) at 228G-229D
[3]
Own emphasis
[4]
Own emphasis
[5]
Own emphasis
[6]
See section 162 and
Giwhala
v Grancy Property
Ltd
[2018]
2 All SA 649
(SCA) (24 March 2016) paragraphs 142-144
[7]
Parow
Municipality v Joyce and McGregor Ltd
1974
(1) SA 161
(CPD) (19 September 1973) at 165H
[8]
1958 (4) SA 52
(ECD) (Full Bench) (12 August 1958) at 53 G-H
[9]
2016 (6) SA 540
(SCA) (1 June 2015) at paragraph 10
[10]
See for example
Mthatha
Mall (Pty) Ltd v Motion Fitness (Pty) Ltd
(2305/2019) [2019]
ZAECGHC 89 (17 September 2019) where the Sheriff, with the
assistance of the South African Police Services,
was ordered to
execute and give effect to the order by the court