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[2010] ZAWCHC 82
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SWD Rugbyvoetbalunie en Ander v Baartman and Others, SWD Rugbyvoet Balunie v Cronje, SWD Rugbyvoet Balunie and Another v Stemmet and Others, Eagles Rugby (Edms) Beperk v Stemmet and Others, Cronje v Stemmet and Others (24939/2009, 25870/2009, 25876/2009, 24939/2009(A),1900/2010) [2010] ZAWCHC 82 (12 April 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
-
REPORTABLE -
DATE:
12
APRIL 2010
Case
number
: 24939/2009
In
the matter between:
SWD
RUGBYVOETBALUNIE EN EEN ANDER
Applicants
and
HENNIE
BAARTMAN
1
st
Respondent
JOHN
BRUINERS
2
nd
Respondent
VIRGIO
BRAAFF
3
rd
Respondent
------------------------------------------------
Case
Number
: 25870/2009
In
the matter between:
SWD
RUGBYVOETBALUNIE
Applicant
and
DANIEL
LODEVICUS CRONJE
Respondent
---------------------------------------------
Case
Number
: 25876/2009
In
the matter between:
SWD
RUGBYVOETBALUNIE
1
st
Applicant
DANIEL
LODEVICUS CRONJE
2
nd
Applicant
and
MOGAMAT
FARIED STEMMET
1
st
Respondent
JOHN
NORTJE
2
nd
Respondent
EDWARD
JACKSON
3
rd
Respondent
WILLEM
SMALL
4
th
Respondent
SOUTH
AFRICAN RUGBY UNION
5
th
Respondent
---------------------------------------------
Case
Number
: 24939/2009(A)
In
die saak tussen:
EAGLES
RUGBY (EDMS) BEPERK
Applicant
and
MOGAMAT
FARIED STEMMET
1
ST
Respondent
JOHN
NORTJE
2
nd
Respondent
EDWARD
JACKSON
3
rd
Respondent
WILLEM
SMALL
4
th
Respondent
SOUTH
AFRICAN RUGBY UNION
5
th
Respondent
---------------------------------------------------------
Case
Number
: 1900/2010
In
the matter between:
DANIEL
LODEVICUS CRONJE
Applicant
and
MOGAMAT
FARIED STEMMET
1
st
Respondent
JOHN
NORTJE
2
nd
Respondent
EDWARD
JACKSON
3
rd
Respondent
WILLEM
SMALL
4
th
Respondent
SOUTH
AFRICAN RUGBY UNION
5
th
Respondent
J
U D G M E N T
LE
GRANGE, J:
The
South Western District Rugby Football Union, also known as SWD, is a
voluntary association, and governed by a constitution.
As a result
of a dispute amongst its members, the executive committee, of which
Mr D L Cronje (Cronje) was elected the president
was voted out
before the expiry of his term of office. This resulted in the
present applications, launched by the respective
parties in this
division. Two
rules
nisi
were
issued, covering the same subject matter, at different dates. The
first by
Davis
J and the second by
Desai
,
J. This is a return date of the rules issued.
The
factual matrix underpinning all these applications are largely not
in dispute. Briefly stated, the facts are the following.
In October
2009 five rugby club members of SWD requested a special general
meeting in terms of Clause 9.3.1 of the constitution,
to consider
passing a motion of no confidence against the following office
bearers of the club, namely the president, Cronje,
the senior
vice-president, the junior vice-president, the president's club
representatives, the premier club's representatives
and that they
stand down immediately from their positions. Furthermore, a vote
that Messrs Baartman, Bruiners and Braaff be nominated
for
appointment as president, senior vice-president and junior
vice-president respectively, whose terms of office will be for
an
interim period until the next annual general meeting to be held in
November 2010 when the term of office of those persons
removed,
would expire.
A
special annual general meeting was convened on 21 November 2009. At
the meeting a motion of no confidence was passed and the
presidency
and six members of the executive committee were removed from their
positions. Cronje was not present at the special
meeting and a new
presidency was elected. It was also resolved at the meeting to hold
over the election of the other six members
of the executive
committee until the annual general meeting, which was
scheduled
to take place on 28 November 2009.
On
27 November 2009, SWD and Cronje, in his capacity as serving
president of SWD and in his personal capacity, launched an urgent
application in this court, seeking interim relief against the new
elected presidency. This is the first application.
Davis
,
J, on the same day, granted the interim relief sought with the
return dates in the following terms:
"The
decisions taken at the special general meeting on 21 November 2009,
in terms whereof the presidency and the members
of the executive
committee were removed from office and replaced by Mr Baartman,
Bruiners and Braaff as an interim presidency,
were declared invalid
and set aside. Mr Baartman, Bruiners and Braaff were prohibited from
representing to any person that they
served as the presidency or
executive committee of SWD, or that they were elected as such."
SWD
then held their annual general meeting on 28 November 2009. At that
meeting the motion of no confidence was again tabled and
voted on.
The motion was carried by 33 votes in favour and 19 votes against.
On Cronje's version, the motion was carried by 32
votes in favour
and 19 votes against. Nothing materially turns on this, having
regard to the fundamental issues for consideration
in this case.
It appears that Cronje then left the meeting.
As
a result of the interdict in place against the new presidency, it
was decided by the meeting to appoint an interim committee
to run
the affairs of SWD pending this Court's final decision regarding the
decisions taken at the special general meeting on
21 November 2009.
Mr Mogamat Faried Stemmet (Stemmet) was elected as interim chairman.
As a result of the time constraints, the
business of the meeting was
adjourned. On the next date, a new executive committee of SWD was
voted in, comprising of 13 members.
Stemmet, John Nortje and Edward
Jackson, were authorised to act as the presidency in the interim.
SWD
then launched an application, the second application, seeking this
Court's approval of the decisions it took at the annual
general
meeting held on 28 November and on 5 December 2009. SWD also sought
certain interim interdictory relief against Cronje.
A competing
application, the third application, was then launched by Cronje for
an order to declare the decisions taken at the
annual general
meeting held in November and December 2009 to be invalid and to be
set aside.
Eagles
Rugby (Pty) Limited, of which Cronje is the managing director, also
launched an application against SWD and other respondents,
seeking
certain relief, the fourth application. This application was,
however, on the day of this hearing withdrawn by the applicant
and
cost was tendered. The fifth application in this saga was launched
by Cronje, seeking essentially for an order declaring
that the
pending disciplinary proceedings or any decision taken against him
by SWD, be invalid and set aside.
The
fifth application was, however, postponed by agreement, pending the
outcome of the first three applications between the parties.
The
second and third applications were argued before
Desai
,
J on an urgent bases on 11 December 2009. On 14 December 2009,
Desai
,
J granted an order in favour of SWD with the same return date as the
first application in the following terms:
"The
decisions taken at the AGM on 28 November 2009 and 5 December 2009,
were declared to have been validly and constitutionally
taken.
Cronje was interdicted from representing to any person that he is
the president of SWD. Cronje was prohibited from representing
to
anyone that he had not been removed from his position as president
of SWD. Cronje was interdicted from interfering in the
operational
activities, including the personal affairs of SWD. Cronje was
interdicted from interfering or performing any acts
with regard to
SWD's bank accounts and/or finances. Cronje was interdicted from
instituting or proceeding with any legal proceedings
on behalf of
SWD."
The
issues for determination are, therefore, firstly whether the
election on 21 November 2009 of Messrs Baartman, Bruiners and
Braaff
as president, senior vice-president, and junior vice-president
respectively, which was the first application, was constitutionally
valid and secondly, whether the election of the new executive
committee of SWD, comprising of 13 members, of which Stemmet is
the
president, that will be the second and third applications, were
constitutionally valid.
The
constitution of SWD provides that the president be elected at an AGM
for a term of three years. Clause 7.2 of the constitution
reads as
follows:
"7.2
President en Vise-President:
7.2.1.
'n
President
soos op die algemene jaarvergadering verkies vir
n
termyn
van die jaar.
7.2.2.
Twee vise-presidente, een as
n
senior
vise-president en een as junior vise-president, verkies vir
n
termyn
van drie jaar.
Tensy
daar 21 dae voor die datum van die
jaarvergadering skriftelik
van die nuwe nominasies deur
n
geaffilieerde
klub kennis gegee word, word die vorige president en die
vise-presidente outomaties herkies.
7.2.4
Die president, of in sy afwesigheid die senior of die junior
vise-president, in hierdie orde, tree as voorsitter op by alle
vergaderings, behalwe vergaderings van die keurkomitees,
skeidsregters en skole-komitees. In die afwesigheid van beide die
president en die twee vise-presidente, kies die vergadering
n
voorsitter
uit lede wat teenwoordig is."
Clause
9.1 of the constitution deals with the annual general meetings and
Clause 9.3 with the holding of a special annual general
meeting. The
constitution is, however, silent regarding members' entitlement to
remove the executive committee or any member
thereof, prior to the
expiry of its term of office. The gravamen of Cronje is that SWD's
constitution does not expressly provide
for the removal of the
executive committee or presidency, before the expiry of their term
of office and that the elections held,
to achieve this purpose, were
invalid.
Counsel
for Cronje, Mr A C
Oosthuizen
SC, assisted by Mr D L
Van
der Merwe
,
main contentions are firstly the Baartman and Stemmet group
(Baartman and Stemmet) in the first three applications failed to
make out a case for the inclusion of a tacit term in the
constitution that entitles the members to vote out the executive
committee
before the expiry of its term of office. Moreover, the
reliance by Baartman and Stemmet on an implied term to sanction
their
conduct in outvoting the executive committee and Cronje as
president, is misplaced. Mr
Oosthuizen
also argued that the dictum of
Herbstein
,
J in
Cape
Indian Congress v Transvaal Indian Congress
,
as reported in
Cape
Indian Congress & Others v Transvaal Indian Congress
1948(2) SA 595 AD, should not be followed as the facts
in
casu
are
clearly distinguishable and the law of agency as applied,
questionable.
Counsel
for Baartman and Stemmet, Mr A
La
Grange
SC, assisted by Mr G
Elliott
,
argued that a committee of a voluntary association does not have an
indefeasible right of continuity of office for the period
for which
it had been elected. Mr
La
Grange
relied on the dictum of
Cape
Indian Congress
case
and
Jonker
v Ackerman & Andere
1979(3) SA 575 (O), as legal bases for his proposition. He also
contended that it is untenable, in the absence of an express
term,
where the majority members of a voluntary association have lost
confidence in the executive committee in the period for
which they
have been elected, to have no option but to wait for the term of the
office to expire before voting them out. According
to him, it is an
implied term that in such circumstances, the committee of a
voluntary association does not have an indefeasible
right of
continuity of office for the period for which it has been elected.
It
is well accepted in our law that the constitution of an association
with all its rules and regulations, constitute the agreement
which
is entered into by its members. This agreement is relevant and a
crucial factor in the existence of an association as it
regulates
the rights of members and provides for certain procedural aspects.
In this regard see
Turner
v Jockey Club of South Africa
1974(3) SA 633A at 654. Also
Lawsa
,
Volume 1, at paragraph 620. The constitution of SWD entrusts the
management of the club to an executive committee.
The
election of persons to serve on the management committee takes place
in accordance with its constitutional provisions. In
order to
ascertain what each member's rights are, it is therefore necessary
to interpret the relevant provisions of the constitution.
The method
of construction to be adopted was set out in
Fisher
v South African Bookmakers Association
1940 WLD at 92 where
Malan
,
J held as follows:
"I
am of the opinion that in construing the constitution and the bylaws
of an association, the same principle should be applied
as in the
construction of any other written instrument, in terms of which
parties have contracted. The constitution and bylaws
embody the
terms and conditions upon which the members have agreed to become
bound and to remain associated."
In
the absence of an express provision in SWD's constitution for the
removal of the executive committee or any individual member
thereof
before the expiry of their term of office, the central question that
falls to be decided is whether the members, by so
electing a
committee, have relinquished all the rights to remove the whole
committee, or individual members thereof, even if
good cause exist
to do so, or can it be implied tacitly, or by law, that the
executive committee or any individual member thereof
does not have
an indefeasible right of continuity of office for the period for
which it has been elected.
A
tacit term is an unexpressed provision of a contract which derives
from the common intention of the parties as inferred from
the
express terms of the contract and from the surrounding
circumstances, whilst an implied term usually arises by law.
Moreover, with a tacit term, a Court must be satisfied, upon a
consideration of all the surrounding circumstances, that the parties
intended to contract on the basis of the suggested term before it
can be applied. A Court does not readily import a tacit term,
it
cannot make contracts for people, nor can it supplement the
agreement of the parties merely because it might be reasonable
to do
so.
An
implied term on the other hand simply represents a legal duty
imposed by law, unless excluded by the parties in cases of certain
class of a contract. In this regard see Alfred
McAlpine
& Son (Pty) Limited v Transvaal Provincial Administration
1974(3) SA 506 (A) at 530E and 533H. Braaff and Stemmet do not rely
on a tacit term, but on an implied term that the executive
committee
of SWD or any individual member thereof, does not have an
indefeasible right of continuity of office for the period
for which
it had been elected.
The
right of members of a voluntary association to remove the management
committee or any member thereof before their term of
office has
expired, has been the subject of a number of decided cases in our
law. In the matter of
Cape
Indian Congress v Transvaal Indian Congress
supra at 598
Herbstein
,
J in the court
a
quo
held
the following:
"I
can see no distinction between the committee elected by a voluntary
association, which is not a universitas and one elected
by a
universitas. And, in my opinion, the committee vis-a-vis the general
body of the body, is in a position of a special agent
with the
authority conferred by the rules.... The fixing of a period for
which a committee is to serve, does not, in my view,
constitute a
contract by the principal with the agent that he will not, during
that period, provoke the authority. Nor, in my
opinion, can such a
contract be implied here. There must be special circumstances before
such inference can be drawn."
In
Cape
United Sick Fund Society & Others v Forest & Others
1956(4)
SA 519 (A), the Court held that where the constitution of a
voluntary association makes specific provision that rules
can be
amended at an annual general meeting, there is no room for an
implied term that a resolution to amend rules can also be
considered
at a special general meeting. In
Govender
v Textile Workers Industrial Union
1961(3) SA at page 94F-G, the Court held the following:
"While
it is in no doubt true that the executive committee may, in a
certain sense, be regarded as the agent of the branch,
the
constitution must nevertheless be looked to in order to determine
its authority and the circumstances in which its rights
and duty to
act come to an act."
In
Jonker
v Ackerman & Andere
1979(3) 575, at page 598 C-D, the Court held the following:
"Per
slot van rekening is die komitee regtens die verteenwoordiger van
die lede van die klub en kan hul mandaat, in die afwesigheid
van
enige bepaling in die konstitusie dat dit nie voor die verstryking
van hul ampstermyn mag geskied nie, beeindig word deur
die
prinsipaal, naamlik die klub se lede."
In
Padayichi
v Pavadai & Another
1994(1) SA at 662, the constitution of the association expressly
provided certain officials
"shall
be elected at the biennial general meeting".
The
holding of a special general meeting to remove the elected committee
was held to be invalid, as it does not confirm with the
terms of the
constitution.
The
golden thread in all the above-mentioned cases, is that elected
members of a management committee may be removed from office,
but in
conformity with the express terms and provisions of the
constitution. This, in my view, is the proper approach in deciding
the rights of members of a voluntary association to remove the
elected management committee or any member thereof before their
term
of office expires.
However,
in the absence of any express provision in a constitution of a
voluntary association, whether a
universitas
or
not, it can only be fair, and accordance with law, that the right of
members to recall an elected executive committee at a
properly
constituted special or annual general meeting, must be implied. To
view it any differently, would be untenable and can
produce absurd
results. The dictum of
Herbstein
,
J in the
Cape
Indian Congress
case at 597, is in my view apposite in this instance:
"To
hold that the members of an elected committee, in which is included
the officials, have an indefeasible right of continuity
of office
for the period for which they have been elected, may lead to absurd
results. The treasurer might embezzle the funds
of the association,
the secretary fail or neglect to carry out his duties, some members
may not attend meetings, so that the
necessary quorum is never
obtainable; the Committee as a whole might conduct a policy, not
only in conflict with the wishes of
members, but one harmful to the
Association and in conflict with its objects. Is there to be no
remedy available to the members
except resignation by them from
the association? In my opinion the answer is in the negative
and the basis for this
answer is to be found in the legal
relationship between the members as a whole and the Committee."
In
this case, in terms of the provisions of the constitution, the
executive committee is elected at the AGM. The president and
the two
vice-presidents are elected for a time of three years. In terms of
Clause 7.3 of the constitution, the affairs of SWD
will be managed
by the elected executive committee. According to Clause 7.3.2, it's
only the president, the two vice-presidents
and each of the three
members of the premier and president's club, that are elected for a
term of three years, whilst the rest
of the members are elected for
a period of one year only. Clause 8 deals with the powers of the
executive committee and in Clause
8.3 the following is stipulated:
"8.3
Beheer oor Fondse. Om,
onderworpe
aan enige besluit van enige algemene jaarvergadering
(my underlining) alleenbeheer oor die fondse van die unie uitoefen
en sal gemagtig wees om onroerende eiendom of roerende bates
oor te
dra en te verkoop of daarmee te handel of andersins van die hand te
sit en sal ten volle gemagtig wees om alle of enige
doelstellings
van die unie uit te voer en alle sake namens die unie te doen."
On
a proper construction of the constitution, it appears that the
executive committee derives its powers from the constitution,
subject to any decision that members may take at the AGM. The
executive committee's purpose and function is to promote the aims
and objectives of SWD, subject to any authority that might be given
to them at the AGM. The AGM can, therefore, be regarded as
the
highest decision making body in SWD. If this is so, then in my
opinion the executive committee,
vis-a-vis
the
general body of members at the AGM, is in a special legal
relationship. This relationship, in my view, is analogist to that
of
a special agent and with the authority conferred upon it by the
constitution. In this regard see
Cape
Indian Congress & Others
at page 598.
Clause
9 of the constitution deals with meetings and its procedures. In
terms of the provision of Clause 9.1.5, certain items
on the agenda
of an AGM must be considered and disposed of. The following is
stipulated in the clause:
"9.1.5
Die agenda wat op die algemene jaarvergadering afgehandel moet word,
is as volg:
9.1.5.1
Bekragtiging en ondertekening van die notules van enige
jaarvergadering.
9.1.5.2.
Oorweging van die president se jaarverslag, tesame met die
finansiele state.
9.1.5.3.
Verkiesing van die president, die twee vise-presidente en
lewenslange ere-presidente.
9.1.5.4.
Verkiesing van die afgevaardigdes na die vergaderings van die
Suid-Afrikaanse Rugby Unie.
9.1.5.5.
Oorweging van mosies en enige ander aangeleentheid waarvan behoorlik
kennis gegee is en een kalendermaand voor die algemene
jaarvergadering.
9.1.5.6.
Affiliasie van die nuwe klubs.
9.1.5.7.
Algemeen orde reelings oor die sluiting van die agende na opening."
Clause
9.1.5.2 stipulates that the election of the president, the two
vice-presidents and the honorary life presidents be on the
agenda at
an AGM and secondly, is it obligatory that this order of the meeting
business must be disposed of. I can find nothing
to suggest that it
is obligatory that the election of the presidency or executive
committee must only be triennially. In this
regard see the case of
Padayichie
v Pavadai
.
Moreover, according to the constitution, it is not obligatory that
the presidency must only be elected at an AGM. In this regard
see
Cape
United Sick Fund Society
,
supra.
In
the absence of any such express provisions in the constitution of
SWD, it can only be fair, and in accordance with the law,
that the
right of members to recall an elected executive committee or any
member thereof at a properly constituted annual general
meeting, or
special annual general meeting must be implied. The constitution in
question does no more than to fix a period for
which a committee or
office bearers is to serve. The reference to the officers and
committee, holding office for the stipulated
period in its context,
means nothing more than their period of office will automatically
come to an end at the expiry of that
period, provided it is not
terminated earlier at a proper meeting.
The
meeting convened on 21 November 2009 was a special annual general
meeting. At that meeting the motion of no confidence was
passed and
the presidency and six members of the executive committee were
removed from their positions. Cronje seeks to rely
on a remark made
in
Bredenkamp
en 'n Ander v Van der Westhuizen en Andere
1968(4) SA 358, to support the view that a motion of no confidence
does not amount to a revocation of a chairman's authority.
In the
Bredenkamp
's
case, after a motion of no confidence in the chairman was adopted,
he left the chair and the vice-chairman took the chair and
called
for proposals for a new chair. The vice-chairman was duly elected as
chairman. At page 366B, the Court held the following:
"Nou
is dit na my mening duidelik dat die tweede applikant nie as gevolg
van die sogenaamde mosie van wantroue of aanvaarding
van die
voorstel dat hy moet bedank, verplig wees om te bedank nie. Hoewel
meeste mense onder sulke omstandighede waarskynlik
nie baie begerig
sal wees om nog voorsitter te bly van n vergadering wat geen
vertroue in die bekleer van die voorsitterstoel
het nie."
On
a proper reading of the
Bredenkamp
matter, the remarks that the motion of no confidence does not amount
to a revocation of a chairman's authority, was made
obiter.
In
fact the Court, at page 366A, held that where no provision has been
made for situations where the chairmanship becomes vacant,
it is
implied that in those circumstances the members can elect a new
chairman.
Having
regard to the evidence in this matter, I am satisfied that the
meeting and resolutions adopted at the special annual general
meeting, was in accordance with the law and the constitution of SWD.
It is so that dissatisfied groups of members might, by repeated
requests of this kind, be able to bring about an intolerable state
of affairs, but that possibility does not appear sufficient
to
justify the inference that the general body of members gave up all
its rights to rid itself in whole or in part of a committee
to which
it had objection. In my view the Braaff election was conducted in a
proper manner and it follows that the
rule
nisi
in
the first application falls to be discharged.
The
evidence in this matter further clearly demonstrates that the
majority of the members of SWD have lost confidence in Cronje
as
president and the executive committee he chairs. At the AGM held on
28 November, a motion of no confidence in the presidency
of Cronje
and the executive committee was again adopted. Cronje then left the
meeting. I am satisfied that the members at the
AGM were entitled to
remove the members of the elected executive committee before its
three year term expired. It follows that
the
rule
nisi
in
the second application should be confirmed and the third application
should be dismissed.
An
argument was advanced by Mr
La
Grange
that SWD was incorrectly joined as a co-applicant in the first and
third application and that any cost orders in these matters
should
be paid by Cronje alone. For this proposition he relied on the
dictum in
Ntombela
& Others v Shibe & Others
1949(3) SA 586N at 587 and
Lawsa
,
Volume 1, 2
nd
Edition at 630. The reason for a joinder is usually convenience
and because of the substantial interest a party may have in
issues
to be decided. The issues regarding the construction and
interpretation of the constitution of SWD can hardly be regarded
as
unsubstantial. I am satisfied that the joinder of SWD in these
matters were appropriate.
In
the result the following order is made:
In
the first application, Case Number 24939/09, the
rule
nisi
is
discharged with costs.
In
the second application, Case Number 25870/09, the
rule
nisi
is
confirmed with costs.
3. The
application in Case Number 25876/09, is dismissed with costs.
4. In
Case Number 24939/09(A), it is recorded that the applicant has
withdrawn the application and tendered to pay the respondents'
costs.
5.
In Case Number 1900/10, the
rule
nisi
is
discharged with no order as to costs.
6.
The costs include the costs occasioned by the
employment of two counsel.
LE
GRANGE, J