Morudi and Others v NC Housing Services and Development Co Limited and Others (CCT270/17) [2018] ZACC 32; 2019 (2) BCLR 261 (CC) (25 September 2018)

Morudi and Others v NC Housing Services and Development Co Limited and Others (CCT270/17) [2018] ZACC 32; 2019 (2) BCLR 261 (CC) (25 September 2018)

The Constitutional Court held that the High Court committed a serious procedural irregularity by refusing to join the applicants as necessary parties and denying them audience, thereby prejudicing their rights as potential shareholders. The applicants were entitled to rescission under rule 42(1)(a) because the order was erroneously granted in their absence, as they were effectively excluded from participation despite their physical presence. The interpretation of 'absence' must be consistent with the Constitution’s guarantee of access to court. The fifth to 71st applicants, having a direct and substantial interest, were entitled to intervene in the main application. The orders of the...

Citation
[2018] ZACC 32
Parties
Applicant: Mosalasuping Phillip Morudi and Seventy Others; Respondent: NC Housing Services and Development Co Limited; Respondent: Scholtz Jacob Babuseng; Respondent: Seodi Julius Mongwaketsi
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
25 September 2018
Case Number
CCT 270/17
Procedural Posture
Leave to Appeal / Appeal From Supreme Court of Appeal, Following High Court Judgment
Outcome
Appeal upheld; orders of the Supreme Court of Appeal and High Court set aside; rescission granted; leave to intervene granted; costs awarded to applicants.
Judges
Mogoeng, Dlodlo, Froneman, Goliath, Jafta, Khampepe, Madlanga, Petse, Theron
Legal Topics
Joinder of Necessary Parties, Rescission of Judgment, Right of Access to Court, Rule 42 Uniform Rules, Shareholder Disputes, Section 34 Constitution
Civil Procedure Commercial and Corporate Constitutional Law Joinder of Necessary Parties Rescission of Judgment Right of Access to Court Rule 42 Uniform Rules Shareholder Disputes +1 more

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Parties

Mosalasuping Phillip Morudi and Seventy Others

Applicant

NC Housing Services and Development Co Limited

Respondent

Scholtz Jacob Babuseng

Respondent

Seodi Julius Mongwaketsi

Respondent

Procedural Posture

Leave to Appeal / Appeal From Supreme Court of Appeal, Following High Court Judgment

Legal Issues

  1. 1 Whether the High Court erred in refusing rescission of its order under rule 42(1)(a).
  2. 2 Whether the applicants were denied their right of access to court under section 34 of the Constitution.
  3. 3 Whether the applicants, as potential shareholders, were necessary parties entitled to be joined in the main application.

Ratio Decidendi

The Constitutional Court held that the High Court committed a serious procedural irregularity by refusing to join the applicants as necessary parties and denying them audience, thereby prejudicing their rights as potential shareholders. The applicants were entitled to rescission under rule 42(1)(a) because the order was erroneously granted in their absence, as they were effectively excluded from participation despite their physical presence. The interpretation of 'absence' must be consistent with the Constitution’s guarantee of access to court. The fifth to 71st applicants, having a direct and substantial interest, were entitled to intervene in the main application. The orders of the...

Court Disposition

Appeal upheld; orders of the Supreme Court of Appeal and High Court set aside; rescission granted; leave to intervene granted; costs awarded to applicants.

Orders

  • Leave to appeal is granted.
  • The appeal is upheld.