Chris Hani Baragwanath Academic Hospital Board v Soul Food Services and Others (2016/2532) [2016] ZAGPJHC 320 (23 November 2016)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 2016/2532

23/11/2016

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

In the matter between:

CHRIS HANI BARAGWANATH ACADEMIC

HOSPITAL BOARD Applicant

AND

SOUL FOOD SERVICES CC First respondent

MONGI DUBASI Second respondent

BOKMAKIERIE TRADING 110 CC Third respondent

ARNOLD KILLY MAHLANGU Fourth respondent

JUDGMENT

OLIVIER AJ:

I. INTRODUCTION

[1] This is an eviction application. The applicant is the Board of the Chris Hani Baragwanath Academic Hospital, in Johannesburg (“the Board”). The respondents are:

a. Soul Food Services CC (first respondent) – purportedly a close corporation established in terms of the laws of the Republic of South Africa (reg no 2006/10772/23);

b. Mongi Dubasi (second respondent) – an adult male person who is a member of the first respondent;

c. Bokmakierie Trading 110 CC (third respondent) – a close corporation, duly incorporated in accordance with the laws of the Republic of South Africa (2005/185774/23),

d. Arnold Killy Mahlangu (fourth respondent) – an adult male person, who is the sole member of the third respondent.

I shall refer to the second to fourth respondents collectively as “the respondents”. Where I intend referring to a specific respondent, I shall do so.

[2] The founding affidavit was deposed to by Mr Gideon Sithole, in his capacity as chairman of the applicant. He claims his authorisation to launch the application on behalf of the applicant, from the minutes of a meeting dated 17 September 2015, which is attached to the founding affidavit.

[3] The first respondent did not file any affidavits, nor was it represented in court. It would appear from the papers that it is no longer in existence. The second respondent, the member of the first respondent, was represented by Mr Steyn, who also represented the third and fourth respondents. The fourth respondent filed answering affidavits on behalf of the third respondent.

[4] The applicant claims that the property in question is being unlawfully occupied and wants an eviction order against the current

occupier/s. The relief prayed for is set out in the notice of motion:

1. Evicting the first, second, third and/or fourth respondents, and any other persons who might be holding title through the respondents, from following premises: CHRIS HANI BARAGWANATH ACADEMIC HOSPITAL, CHRIS HANI ROAD, DIEPKLOOF EXT 6, SOWETO. The respondents are in unlawful occupation of said property and that it is just and equitable that they be evicted from the property with immediate effect from the date of the order or such other period that may be determined by the Honourable Court;

2. In the event the first, second, third and/or fourth Respondent and or any other persons occupying premises under and by virtue of any of the Respondents’, including their servants and employees, failing and/or refusing to vacate the premises, that the Sheriff of the above Honourable Court be authorised to forthwith enter upon the premises and evict the Respondent and all those who occupy the premises under and by virtue of the Respondent’s occupancy therefrom.

3. payment of outstanding rental amounts;

4. Cost of suit;

5. Further and/or alternative relief.

II. FACTUAL BACKGROUND AND ISSUES FOR DETERMINATION

[5] This matter has a protracted history, and has been the subject of court proceedings on three previous occasions. The present

application is the fourth attempt by the applicant to either have the lease contract set aside, or to have the occupier/s evicted.

[6] A contract was concluded between the applicant and the first respondent on 7 May 2010, for the lease of certain property (known as Hospideli Restaurant, the Doctor’s Canteen and the Coffee Shop), situated at the Chris Baragwanath Academic Hospital, in Soweto. The five-year lease came into effect on 1 July 2010 and would terminate on 30 June 2015, according to the contract. The applicant was represented by Dr Elijah Nkosi, chairman of the Board at the time, while the first respondent was represented by Mr Mongi Dubasi, the second respondent. They were the only parties to the contract.

[7] The applicant took its first step on 30 August 2013 when the third respondent was evicted from the premises, after the applicant had given notice of termination, to the first respondent as the original lessee. But it was only one month’s notice – not three months as required by the contract. The third respondent, who in the meantime, according to the respondents, had substituted the first respondent as lessee, applied for an urgent restoration order against the applicant and Maloti Catering Services, a close corporation which had taken occupation of the property upon the eviction of the third respondent (case no 2013/32969). The relief was granted by Potterill J in this division. The applicant and Maloti then applied for leave to appeal the order but was denied leave by the High Court, the Supreme Court of Appeal and, ultimately, the Constitutional Court. Occupation was restored to the third respondent sometime during November 2014, after the sheriff had evicted Maloti from the leased property. Writs of execution were issued in the various courts pursuant to the court order, for the taxed costs and charges of the third respondent. The sheriff made the following entry on the return: “The Chris Hani Baragwanath Hospital Board has no attachable assets at given address.”

[8] Sometime during 2014 it emerged that the first respondent had purportedly never been properly registered as a close corporation.

[9] This appears to have been the catalyst for an application against the present first, second and third respondents, launched in the Gauteng Local Division (case no 23853/2014). The gist of the relief sought was to declare the decision of the applicant, taken on 9 October 2009 to award the contract to the first respondent, invalid, and to declare the lease agreement with the first respondent, invalid. The court referred the matter to trial due to factual disputes which could not be resolved on the papers. Costs were reserved for determination in the action. The applicant was given 30 days within which to file a declaration, but none was filed. Subsequently, there was correspondence between the applicant’s attorney and the respondents’ attorney, in which the applicant tendered the costs of the application, and gave notice of its intention to withdraw the action.

[10] A third application for eviction followed on 12 December 2014, against the third respondent – this time in the regional court (case no 2014/3786). The third respondent filed an opposing affidavit on 27 January 2015, but the applicant did not file a replying affidavit, nor was the matter set down. According to the respondents, the applicant’s attorneys again tendered costs and indicated the applicant’s intention to withdraw the application.

[11] The next attempt to evict the respondents was set in motion when a notice of termination was served by the sheriff on 8 October 2015 at the leased premises. According to the notice, the effective date on which the property had to be vacated was 8 January 2016 (three months’ notice). The respondents challenge the validity of the termination notice, including how and on whom it was served by the sheriff. Several irregularities are alleged. The third respondent also questions why it was addressed to the first respondent, and not to it as the occupier of the premises. The property was not vacated, thus resulting in the present eviction application before the court.

[12] The respondents contend that the contract is still in existence, due to the third respondent exercising the option to renew the lease for another 5 years, by letter dated 21 January 2015. The applicant argues that the third respondent could not have exercised the option to renew, as it is not a party to the contract.

[13] The third respondent is in possession of the property. The question is whether it is lawfully in such possession.

[14] The respondents contend that the applicant consented to the substitution, thereby making the third respondent the lessee. The

applicant denies that it ever consented to any substitution, even though it appears to concede in the founding affidavit that a

substitution had taken place. The contract contains a non-variation clause, requiring that any variation or amendment of the contract

should be in writing and signed by the parties. It is common cause that no substitution has been recorded in writing.

[15] In addition to eviction, the applicant is claiming from the current occupier/s outstanding rental payments. It is common cause that there are rental amounts outstanding, but there is a dispute about the exact amount. The third respondent claims that invoices have not been forthcoming from the applicant, preventing payment.

[16] The applicant states that it has in the meantime concluded a lease agreement with a third party, over the same property. This third party has launched proceedings against the applicant, to enforce the lease agreement.

III. POINTS IN LIMINE

[17] The respondents raise several points in limine. The essence of the respondents’ first point is that the applicant could not resolve to evict the occupiers, or authorise Mr Sithole to launch proceedings on its behalf, as it lacked the necessary authority to do so, due to the expiry of the Board members’ term of office. And even should the Board have been legitimate and valid at the time, there is no proof, either by way of resolution, or in the minutes of the relevant meeting on which Mr Sithole relies for his authority, showing that Mr Sithole had in fact been authorised by the Board to launch proceedings on its behalf.

[18] The other preliminary points are the absence of a cause of action, the existence of factual disputes, and unpaid legal costs from previous litigation.

[19] The first preliminary point raises an issue of fundamental importance. It is not merely a technical point, but it goes to the

heart of the exercise of the powers of the Board. If the Board was not legitimately and lawfully in place, it could not have resolved to evict the occupiers, and neither could it have authorised the chairperson to act on its behalf in launching the application.

[20] The founding affidavit must set out the locus standi of the applicant, which the party instituting the proceedings must allege

and prove. See Mars Incorporated v Candy World (Pty) Ltd [1990] ZASCA 149; 1991 (1) SA 567 (A) at 575H-I); Trakman NO v Livshitz 1995 (1) SA 282 (A) at 287B-F. See also Harms Civil Procedure in the Superior Courts at A-55: “It is for the party instituting proceedings to allege and prove that he has standing and the onus to establish this issue rests upon that party throughout the proceedings.” If the party cannot to do so, the application would fail at this early stage.

[21] It is not necessary for the applicant always to allege locus standi specifically. If it is clear from the facts that locus standi does exist, or if it is not challenged, there is no need to allege it. But if it does not appear from the affidavit, or if it is challenged by the respondent, locus standi should be specifically alleged and established.

[22] There are two aspects to locus standi. The first is the capacity to litigate, which is the capacity of the person to institute legal proceedings; and the second refers to the interest which a party has in the relief claimed, or the right to claim relief. (See Herbstein & Van Winsen The Civil Practice of the High Courts of South Africa (2009) 5ed Vol 1 at 143.) Undoubtedly, the applicant has a direct and substantial interest in the subject-matter of the application, as well as in its outcome, in its capacity as the lessor.

[23] The Board will only have locus standi in the first sense, however, if it was a valid board at the time that it purportedly resolved to launch proceedings against the respondents. Otherwise, it will lack legal capacity and the capacity to litigate.

[24] In support of their argument that the Board’s term of office had expired, the respondents rely on the minutes of the Board meeting of 17 September 2015, which they aver recorded the following: first, that Mr L van der Westhuizen, the Logistics Manager and a director, and the CEO, Dr S Mfenyana, refused to sign a transport slip on the basis that the Board members’ terms of office had expired; second, that the aforementioned persons had apparently refused to attend Board meetings; and third, that the CEO had not reported to the Board for nine months, since the beginning of the year.

[25] Furthermore, the respondents have in their answering papers the letter of appointment of Mr Motha Jack Moche, a former board member, and a confirmatory affidavit from him. Mr Moche’s term of office was for the period 1 June 2012—31 March 2015. From this, the respondents infer that the Board’s (including Mr Sithole’s) term of office terminated at the end of March 2015. They attach to their supplementary affidavit letters from Ms L Mekgwe the MEC for Health at the time, dated 1 June 2012, and Mrs T J More, in her capacity as acting chief executive officer of the Chris Hani Baragwanath Academic Hospital, dated 21 August 2012. Both letters confirm the appointment of Mr Motha for the period 1 June 2012 – 31 March 2015.

[26] Based on this excerpt the respondents submit in the supplementary affidavit of Arnold Mahalangu (Par 7.12; p 143 of the bundle) as follows:

The inescapable conclusion to be drawn from the facts set out above is that when the applicant instituted the application against the respondents on 27 January 2016 the applicant was not duly constituted and that G. Sithole was no longer its Chairperson. The applicant had no locus standi and G. Sithole lacked the requisite authority to represent the applicant.

[27] The applicant attached to its replying affidavit a letter dated 31 March 2016, purporting to be from the Member of the Executive Council (MEC) for Health and Social Development of Gauteng, Ms Q Mahlangu, addressed to the chairperson of the Board, Mr G Sithole. The letter appears to be on an official letterhead, but there is no official stamp or seal. The letter requests the Board “to ensure that all outstanding matters are urgently finalised” before their term of office expires on 31 March 2016. The applicant submits that this shows that the Board was valid and therefore legitimately in place at the time when the decision was taken to launch the proceedings, and that it had the authority to authorise Mr Sithole to launch proceedings on its behalf.

[28] The respondents disagree, claiming that this letter in fact shows that Mr Sithole was no longer the Chairperson of the applicant, as the replying affidavit was signed on 5 April 2016, some days after the alleged expiry of his term of office.

[29] Problematic for the applicant is that there was no confirmatory affidavit from the MEC, attached to the replying affidavit. In open court the applicant’s counsel attempted to hand up from the bar a confirmatory affidavit from the MEC. However, it was not deposed to under oath (or affirmation). Applicant’s counsel conceded that it was thus not a valid affidavit.

[30] Theophilopoulos, Van Heerden and Boraine Fundamental Principles of Civil Procedure 3ed (2015) state the following in respect of confirmatory affidavits (at 144):

Where the applicant refers in the supporting affidavit to communications or actions by other persons, such reference must be affirmed by obtaining affirming or confirmatory affidavits, from the said persons and attaching it to the supporting affidavit. The attachment of confirmatory affidavits is necessary in order to comply with the evidentiary rule against hearsay evidence. Only admissible evidence should be contained in the affidavit.

[31] The letter of the MEC is not a public document. This is important because a public document may be used to prove the truth of its contents, despite the hearsay rule. The document ‘proves itself’, so to speak. See Schmidt & Rademeyer Law of Evidence (2003) Issue 13 (July 2015) 11-22: “A public document is defined as a document made by a public officer in the execution of a public duty which is intended for public use and to which the public has right of access.” The letter was a private communication between the MEC and members of the Board. It therefore does not prove itself. In the absence of a confirmatory affidavit, I shall disregard the letter of the MEC.

[32] In my view, the applicant has failed to discharge its onus to show its locus standi, on the probabilities as they appear from the papers.

[33] But even if I am wrong in upholding this point in limine, the application stands to be dismissed also on the point that Mr Sithole lacked authority to launch proceedings on behalf of the applicant, as I explain below.

[34] In the case where an application is launched in the name of an artificial person, it is necessary that a natural person is

authorised by the applicant to launch proceedings on its behalf. This is normally done by way of a resolution taken by the artificial

person, authorising the person to launch the application on behalf of the applicant. So, in the case of a company, there would usually be a Board resolution authorising the natural person to launch proceedings on its behalf, annexed to and proved by the founding affidavits. See Poolquip Industries (Pty) Ltd V Griffin & another 1978 (4) SA 353 (W) (at 356 E).

[35] As with locus standi, it is for the applicant to prove that the individual who is launching the proceedings on its behalf, has the necessary authority. The deponent does not need specific authorisation from the applicant to depose to the affidavit. See Ganes v Telecom Namibia Ltd 2004 (3) SA 615 (SCA

[36] Is there always a need for a Board resolution? There is case law adopting a less stringent approach to proof of authority. In Eskom v Soweto City Council 1992 (2) SA 703 (W) Flemming DJP said (at 705):

[t]here is now, ordinarily, no prescribed formula for proving authority either as a routine prerequisite for issuing an application or otherwise.

In the absence of a prescribed mode of proof, it is a factual question whether a particular person holds a specific authority. It may be proved in the same away as any other fact.

[37] Similarly, in Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk 1957 (2) SA 347 (C), Watermeyer J wrote the following on behalf of a full court (at 351D-352B):

I proceed now to consider the case of an artificial person, like a company or co-operative society. In such a case there is judicial precedent for holding that objection may be taken if there is nothing before the court to show that the applicant has duly authorised the institution of notice of motion proceedings … Unlike an individual, an artificial person can only function through its agents and it can only take decisions by the passing of resolutions in the manner provided by in its constitution. … It seems to me, therefore, that in the case of an artificial person there is more room for mistakes to occur and less reason to presume that it is properly before the Court or that proceedings which purport to be brought in its name have in fact been authorised by it.

There is a considerable amount of authority for the proposition that, where a company commences proceedings by way of petition, it must appear that the person who makes the petition on behalf of the company is duly authorised by the company to do so. This seems to me to be a salutary rule and one which should apply also to notice of motion proceedings where the applicant is an artificial person. In such cases some evidence should be placed before the Court to show that the applicant has duly resolved to institute the proceedings and that the proceedings are instituted at its instance. … The best evidence that the proceedings have been properly authorised would be provided by an affidavit made by an official of the company annexing a copy of the resolution but I do not consider that that form of proof is necessary in every case. Each case must be considered on its own merits and the court must decide whether enough has been placed before it to warrant the conclusions that it is the applicant which is litigating and not some unauthorised person on its behalf. Where, as in the present case, the respondent has offered no evidence at all to suggest that the applicant is not properly before the Court, then I consider that a minimum of evidence will be required from the applicant.”

[38] Most recently, in Corplo 358 Close Corporation v Charters [2011] ZAECGHC 27, Grogan AJ referred to the Tattersall case (infra), a judgment of the Appellate Division on proof of authority [at paras 5-7]:

[5] Judgments on the sufficiency of proof of authority to act are not harmonious. It seems to me, however, that the leading case in this regard is Tattersall and Another v Nedcor Bank Ltd [1995] ZASCA 30; 1995 (3) SA 222 (A), in which the authority of a bank manager to launch proceedings on behalf of the bank was placed at issue. The court held (at 228G-H):

“A copy of the resolution of a company authorising the bringing of an application need not always be annexed. Nor does s 242(4) of the Companies Act 61 of 1973 (to the effect that a minute of a meeting of directors which purports to be signed by the chairman of that meeting is evidence of the proceedings at that meeting) provide the exclusive method of proving a company's resolution (Poolquip Industries (Pty) Ltd v Griffin and another 1978 (4) SA 353 (W)). There may be sufficient aliunde evidence of authority (Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk 1957 (2) SA 347 (C) at 352A).”

[6] On the facts, the court found sufficient evidence aluende of authority (at 228I-229A):

“What Spencer alleges in the founding affidavit is (i) that he is duly authorised and (ii) that such authority appears from PS1. The appellants' denial is an ambiguous one; it is not clear whether they dispute (i) or (ii) or both. Moreover, the denial is a bare one. Not only is there no explanation as to how they are able to gainsay Spencer's assertion that he is authorised, but no evidence is tendered in support of what is now argued, viz. that Spencer was not authorised. It would seem that the denial was what may be called a tactical one. The tactic must fail. This is a case in which the approach adopted in Mall's case (at 352B), namely that when the challenge to authority is a weak one, a minimum of evidence will suffice, applies. Weight must be given to the use by Spencer of the word 'duly' (authorised). It is an indication that the authority conferred on him was properly conferred (Mall's case at 352D).”

[7] While this case may differ on the facts, it seems to me that the principle to be extracted from this passage applies. The respondent’s denial of authority may be somewhat more than bare, in the sense that it points to clear deficiencies in LC1. However, there is no positive averment that Mr Wicks actually lacks authority, or that he was not in fact authorised to bring the application. While the respondent was entitled to raise the point, it appears to have been raised “tactically”. I am prepared to accept that Mr Wicks had the necessary authority to launch the application on behalf of the applicant. The respondent’s point in limine accordingly fails.”

[39] It is a question of fact whether the evidence tendered is sufficient to establish that it is in fact the applicant who is litigating. The same applies in respect of the locus standi of the applicant.

[40] Where the respondent does not present any evidence that the applicant is not properly before the court, the minimum of evidence ought to suffice to prove the authority. But if the point is raised and the issue has not been fully canvassed in the affidavits, something more would be required from the applicant. In the present case, the respondents referred to the minutes and other evidence to cast doubt on the applicant’s locus standi, as well as the authority of Mr Sithole.

[41] The respondents argue that the minutes on which the applicant relies, do not authorise Mr Sithole to institute the proceedings on behalf of the applicant. There is no record in the minutes of a resolution by the Board to evict the occupiers, or one authorising Mr Sithole to bring the application on its behalf. Can one simply assume that the chairperson would have the authority to institute proceedings on behalf of the Board, even in the absence of a special resolution or other supporting evidence?

[42] The only part of the minutes that relates to this application is paragraph 5. (p 5 of Minutes, P 17 of Bundle). The minutes say the following:

5. Chairpersons’ report.

· Phindiwe Khumalo incorporated had been appointed to deal with the issue of evicting Soul Food services from the hospital as their lease with the Hospital Board came to an end in July.

· Dr S Maseko asked if the money that Soul Food Services was paying was being kept in MP Masemola’s account.

· Mr G Sithole said the money was being paid in to the Hospital Board account, not MP Masemola’s trust account. (sic)

In para 6 of the minutes is a column recording decision points, but there is no mention of the eviction application.

[43] In respect of a meeting’s minutes, the following was said in Eskom supra 705:

A minute of a meeting normally does not create authority, a minute is a statement in which the author thereof claims that he has observed that, previous to writing his note, something had happened by way of a show of hands or in some other fashion. The minute is not under oath and is not a witness. Even when the correctness of the minute is confirmed under oath, it is the affidavit which constitutes evidence and not the minute.”

[44] Generally, an initial absence of proof of authority may be retrospectively cured by filing proof of authority in reply. In

NahrungsmittelGMbH v Otto 1991 (4) SA 414 (C), Conradie J said (at 418C-D):

[w]here there is a challenge to a deponent's authority, which should be more than a bare complaint that he failed to annex an empowering resolution, it would usually be prudent for an applicant to produce the resolution in reply.

The applicant failed to show any ratification.

[45] The situation in the present case is different from that in Corplo’s case. First, the respondents averred positively that Mr Sithole lacked the necessary authority. It wasn’t merely a bare denial.

This averment was based on the minutes of the Board’s meeting, which did not specifically authorize Mr Sithole. In my view, the minutes are insufficient to prove Mr Sithole’s authority. The applicant also failed to show ratification by the Board of any lack of authority on the part of Mr Sithole.

[46] Less than a resolution may be acceptable in circumstances where there are other facts present that point to authority. But in my opinion more than minutes would probably be required, especially in an instance like the present, where there is no record in the minutes of any resolution authorising the chairperson to launch proceedings on behalf of the Board. In the absence of other evidence, the mere fact that Mr Sithole is the chairperson of the Board is insufficient to show that he had the necessary authority to launch the application on behalf of the applicant. See Griffiths & Inglis (Pty) Ltd v Southern Cape Blasters (Pty) Ltd 1972 (4) SA 249 (C).

[47] In my view there is insufficient proof of authority. The applicant has failed to discharge its onus, on the probabilities as they appear from the papers.

[48] I am also of the view that there was no need for a referral to oral evidence. The points in limine could be decided on the papers. The applicant had opportunity to refute the allegations of the respondents, but failed to discharge its onus.

[49] Considering my view on the fate of this application, it is unnecessary for me to consider the merits of the application, or the remaining points in limine.

IV. ORDER

[50] I make the following order:

“The application is dismissed with costs.”

M OLIVIER

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA,

Date of judgment: 23 November 2016

Appearance on behalf of the Applicant:

Adv Ramoshaba, instructed by Phindile Khumalo Inc Attorneys.

Appearance on behalf of the Second to Fourth Respondents:

Mr W P Steyn, attorney with right of appearance in the High Court.