Provincial Executive Committee of the South African Democratic Teachers' Union, Eastern Cape Province and Others v South African Democratic Teachers' Union and Others (462/14) [2014] ZAECBHC 16 (21 November 2014)

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE LOCAL DIVISION, BHISHO

CASE NO. 462/14

In the matter between:

The Provincial Executive Committee of the South African Democratic Teachers’ Union, Eastern Cape Province 1st Applicant Luvo Mvulana 2nd Applicant Mncekeleli Ndongeni 3rd Applicant Ntombizanele Booi 4th Applicant Khanyisile Boysi 5th Applicant Mandisa Mvoko 6th Applicant Nomxolisi Makayi 7th Applicant Thingazwa Mhlaba 8th Applicant and The South African Democratic Teachers’ Union 1st Respondent Thabile Kunene 2nd Respondent First National Bank, King Williams Town 3rd Respondent

JUDGMENT ON APPLICATION FOR LEAVE TO APPEAL

STRETCH J:

1. This is an opposed application for leave to appeal to the Full Court of this Division, against the whole of my judgment (with the exception of the finding on jurisdiction) handed down on 23 September 2014, wherein I dismissed the applicants’ application and directed the third applicant to pay the costs of the application in his personal capacity.

2. The application, which was argued before me on 14 November 2014, is not being pursued by the erstwhile first and second applicants, being the first respondent’s provincial executive committee and its deputy provincial chair in the Eastern Cape.

3. The grounds of the application are that the Court which heard the application erred or misdirected itself in the following respects, which I quote verbatim from the notice of application for leave to appeal:

‘1. The above Honourable Court erred, alternatively misdirected itself in finding that the Third Applicant

instituted the application only in his personal capacity and without authority from the Second, and Fourth to Eighth Applicants. Her Ladyship should have found that, the Third Applicant was authorised by the aforementioned applicants in light of the fact that this was never disputed by the First and Second Respondents and must have been deemed to be admitted in terms of the law.

2. In light of the ground of appeal in paragraph 1 above, this Court erred, alternatively misdirected itself in finding that the Third Respondent (sic) was the only applicant properly before the Court and by ordering him to pay costs in his personal capacity. This Court ought to have found that he was properly mandated and was acting as an office bearer of the First Applicant, and in enforcing the rights of the First Applicant and the general membership of the Eastern Cape, in terms of the Constitution of the First Respondent.

3. This Court erred, alternatively, misdirected itself in finding that the Applicants were not entitled to approach it on an urgent basis in circumstances where the First Respondent was withholding finances of the First Applicant, being its monthly allocation, which were supposed to be deposited to its bank account in terms of the Constitution of the First Respondent in order to discharge its constitutional duties accordingly. This Court erred in finding that the Applicants were supposed to first exhaust its internal remedies, by taking the matter to the National Conference which is to be held on 2nd October 2014. This Court ought to have found that there was ground for urgency, in that the First Applicant and the structures of the South African Democratic Union, Eastern Cape were unable to pay its creditors because the First Respondent had usurped the powers of the Second and Third Applicant, duly conferred on them in terms [of] Clauses 12.6.3 and 12.6.4 of the Constitution of the First Respondent.

4. The Court erred, alternatively misdirected itself in failing to consider that the Special National Executive (NEC) meeting which took resolutions which were the subject of the application, was not properly convened, in that it was not convened by three provinces, in terms [of] Clause 13.3.3, but by the National working Committee, and that any resolutions taken thereat were null and void ab initio.

5. Alternatively to paragraph 4 above, and only in the event of this Court finding that the Special NEC meeting was properly convened, the Court erred and/or misdirected itself by failing to consider that the First Respondent failed to apply the rules of natural justice and to allow the Applicants to make representations before the impugned resolutions were taken.

6. The Court erred, alternatively misdirected itself in failing to consider that there was no legal basis for putting the First Applicant under administration in circumstances where the First Respondent had not substantiated its conduct for taking such drastic action.

7. The Court erred, alternatively misdirected itself in not awarding the Applicants costs of the application, including cost incurred upon the employment of two counsel.”

The third applicants mandate as an office bearer of the first applicant

4. Without derogating from my finding that there is no provision in the first respondent’s constitution for its PEC to sue its NEC, it is in any event so that it is trite that where a voluntary association (such as the first respondent), or by implication a structure of that voluntary association (such as the first applicant) institutes proceedings by way of notice of motion, it must appear that the person who makes the petition on behalf of that committee of the first respondent (in this case the third applicant) is duly authorised by the first applicant to do so (see Yiba and Others v African Gospel Church 1999 (2) SA 949 at 957G-H; Congregation of Oblates of Mary Immaculate in Transvaal v Moluele and Others 1949 (3) SA 885T).

5. In this regard the oft-cited dictum of Watermeyer J in Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk 1957 (2) SA 347 (C) at 351D-G bears repetition:

‘I proceed now to consider the case of the 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 (see for example Royal Worcester Corset Co v Kesler’s Stores 1927 CPD 143; Langeberg Ko-operasie Bpk v Folscher and Another 1950 (2) SA 618 (C)). 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 its constitution. An attorney instructed to commence notice of motion proceedings by, say, the secretary or general manager of a company would not necessarily know whether the company had resolved to do so, nor whether the necessary formalities had been complied with in regard to the passing of the resolution. 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.’

6. As stated in my judgment, the power to institute or defend legal proceedings, not only by or against the Union, but also by or against individual members in particular situations, vests in the first respondent’s NEC by virtue of the explicit provisions of clause 13.3.4(e) of its constitution. Even if the first applicant was empowered to institute proceedings (which it is not), it must still authorise the third applicant to do so.

7. The third applicant annexed to his affidavit what purports to be transcribed, undated and unsigned minutes of a special meeting held by the first applicant, which record that the PEC unanimously agreed that NEC decisions be legally challenged, that they be interdicted immediately and that the secretariat be mandated to depose to affidavits in this regard. Also annexed to his papers are, what purport to be further transcribed and unsigned minutes of an extended PEC meeting held on 29 July 2014 where one of the “final decisions of the meeting” is recorded as “matter must be challenged legally”. At best for the applicants, the first set of minutes go no further than proposing authorisation. None of these purported minutes reflect a resolution signed by the members of the PEC authorising the third applicant to institute proceedings on behalf of the PEC as is required.

8. In the premises I am not persuaded that there are reasonable prospects that another Court will conclude that the third applicant was properly mandated to represent the first applicant. It is significant in any event, that the first applicant has not sought leave to appeal this finding, or at all.

The status of the resolutions taken by the NEC

9. It has been contended on behalf of the applicants that this Court failed, in its judgment, to consider that the meeting of the NEC was not properly convened and that accordingly, everything that happened at that meeting is void ab initio. The respondents on the other hand repeat their contention that not only was this not raised in the application papers, but that there has, in any event been substantial compliance with clause 13.3.3 of the constitution which reads thus:

‘The NEC shall meet at least once every three months on a date to be fixed by the President in consultation with the General Secretary. Meetings of the NEC shall be convened on written notice of the date, time, place and business of the meeting. A majority of Provinces present shall constitute a quorum. If within one hour there is no quorum, the meeting stands adjourned to an agreed date, time and place. A written notice of the adjourned meeting shall be given to all Provinces. If at least three Provinces deem it necessary to call an emergency meeting of the NEC, they shall have the right to request that such meeting be convened at the earliest possible date.’

10. This ground raised by the applicants pre-supposes that it was common cause at the hearing of the matter, that the meeting was not properly convened and that I had accordingly erred in failing to take this into account in my judgment. This is not so. At the beginning of my judgment I identified this question as a pertinent issue (judgment 4 para 7e), and dealt with this issue at pages 20 and 21 of the same judgment. I came to the conclusion that it would only be appropriate for this Court to interfere and determine whether the NEC acted in terms of its Constitution when it convened the meeting, once I was of the view that the applicants had exhausted or attempted to exhaust the internal remedies available to them in terms of their own constitution to specifically address issues of this nature, and had remained dissatisfied thereafter. These internal remedies are dealt with at pages 11 to 20 of my judgment. It is not disputed by the applicants that they did not avail themselves, or even attempt to avail themselves of these remedies. The Koyabe matter referred to in my judgment (also reported in the South African law reports at 2010 (4) SA327 CC) deals with the duty to exhaust internal remedies before instituting legal proceedings to promote administrative justice between organs of state and individuals. In a matter such as this, where the parties are either structures or members of a voluntary association with its own democratic constitution, there exists all the more reason, in my view, for at least an attempt to be made to utilise those domestic remedies.

11. The respondent, in opposing this ground of the application, in any event raised the valid contention before me in argument on the merits and again in opposing the application for leave to appeal, that this issue is not only an afterthought on the applicants’ behalf, but that the applicants had, in any event not shown that clause 13.3.3 had not been complied with. Page 129 of the application papers reflects a letter written by the general secretary referred to in clause 13.3.3, advising the third applicant that formal objections had been received based on complaints with regard to the credentials on the provincial conference held from 8-11 July 2014, and that the national working committee, after considering these objections had decided that a special meeting of the NEC should be convened to provide guidance on the matter.

12. It has been contended on the applicants’ behalf that these meetings have to be convened by the president in consultation with the general secretary. But this is not what the clause says. The clause merely states that the date of the meeting must be fixed by the president in consultation with the secretary. But even if this were to mean that these two parties should also call the meeting, it seems to me that this is in fact what happened, ergo the general secretary’s letter to that effect.

13. Alternatively, it has been contended that this was an emergency meeting which ought to have been requested by at least three provinces. Nowhere in the record is there any indication that this was an emergency meeting. It is described throughout as a ‘special’ meeting which quorated in terms of clause 13.3.3 in that only one of the nine provinces was not represented.

14. All in all I am satisfied that my judgment fully and properly traversed this ground of appeal, and that there are no reasonable prospects that another court will find that I erred and that I failed to consider this aspect.

Failure to allow applicants to make representations before resolutions were taken

15. The respondent’s constitution does not provide for the making of representations before resolutions are taken. Notwithstanding this fact, the applicants alleged that I ought in any event to have considered that the respondent failed to apply the rules of natural justice, by not allowing the applicants to be heard, before the “impugned” resolutions were taken. This contention once again assumes that the respondent failed to apply the rules of natural justice and that I erred by failing to take this into consideration. This averment, that the applicants were not heard before the resolutions were taken, does not form part of the founding papers. But even if it did, and even if failure to apply audi alteram partem when dealing with a voluntary association is a good ground for seeking urgent redress in this court in these peculiar circumstances (which it is not in my view), there is in any event overwhelming evidence before me that the applicants were given ample opportunity to either state their case or, at the very least to participate in a transparent process within the 14 day period following upon the so-called impugned meeting.

16. It is common cause that the third applicant (who ostensibly deposed to an affidavit on behalf of all the other applicants) attended this meeting, together with the first respondent’s deputy provincial chair for the Eastern Cape (the second applicant). The transcript of this meeting comprises some 130 pages. The record speaks for itself and reflects transparent interaction amongst all the delegates, particularly those representing the Eastern Cape. The willingness to adhere to and to comply with the first respondent’s constitution is repeated often by those who have been criticised by the applicants. For purposes of this judgment I refer to the following extracts from this transcript at pp 164 to 188 of the record (reference will hereinafter

be made to the actual page numbers of the transcript):

· So the majority of the provinces that have spoken now were saying that this matter be investigated and that Eastern Cape (EC) be given an opportunity to state its case in that investigation but key is this thing of administration as well (44:15-19)

· But you will work with them when you administrate them and introduce an impressed system in moving forward (46:6-8)

· I think they must still be afforded an opportunity to say whether they want to raise an objection(47:6-7)

· …put the EC under administration until we conclude the matters that we are raising today (49:1-2)

· EASTERN CAPE: …we are raising to register our descending (sic) view on the proposal that has been presented to the NEC.

PRESIDENT: Thank you (50:12-15)

· DEPUTY GENERAL SECRETARY: If the NEC was attentive to what the EC said you will realise that they are contradicting themselves, because the deputy chairperson said he is objecting to the proposal of investigation and then the provincial secretary says he support what Gauteng is saying, because what Gauteng is saying is that there must be an investigation (56:16-23)

· Now the appeal by the EC, basically it is granted because we are going to go back to the EC and say, here we are now, the NEC says this thing must be verified, this must be verified and then we come and present a report within 14 days (61:2-6)

· …an investigation provides both sides an opportunity to present (62:3-4)

· The only area that the EC basically is saying they don’t agree with so far in terms of the summary is that they are saying, don’t put us under administration … and the NEC can deliberate on that … and the EC .. will have an opportunity (66:2-6, 21-22)

· Administration is not suspension but administration is to ensure that indeed we coordinate our programmes and we manage the affairs of that province in an orderly manner and I don’t think that the NEC must shy away from the realities because we are being empowered by the very same constitution of ourselves (71:8-13)

· … that province in this current period must be put under administration until such time that we conclude on all these matters that we are talking about so that you are able then to give them a fair chance to run their province after we have concluded the matters of the EC (72:7-12)

· WESTERN CAPE: … We’ve been contemplating whether placing the EC under administration would prejudice them in any way and our conclusion is, no …(81:9-12)

· … given the fact that the majority of those provinces are saying … let’s administer … GAUTENG: …in the nature of deliberating you must allow the majority to prevail, so we abide by it (87:3-9)

· GENERAL SECRETARY: … The summary of the meeting is that, one, the union will investigate the alleged irregularities, they have been presented to the NEC, within a period of 14 days and present such to the NEC to adjudicate on the matter … Two, it is that the NEC as well resolve that the chairperson of the province in terms of the court order must then be allowed to lead the leadership of the EC because there is no decision as yet to whether we recognise the outcome of the conference … Thirdly, it is that in this particular period the EC will be under administration (87:13-88:5)

· EASTERN CAPE: … we do not agree with this decision. Of course we understand it is your decision as the majority in this NEC but we do not agree with it (88:18-21)

· DEPUTY GENERAL SECRETARY: …I want to be on record that there is now a decision of the NEC, the question of accepting or not accepting does not exist anymore. In terms of democracy, if a majority would have arrived at a decision, that decision is binding on everybody who was part of that meeting and in terms of how we are structured as SADTU, for up until we review ourselves that decision and/or a different decision gets taken by the next higher structure it being the National General Council or National Congress, that decision binds each and every structure of SADTU in South Africa and members, there is no question of accepting or not accepting … If they understand democracy they are bound, there is no more you took sides … (91:4-92:2) … the putting of administration would then mean that the finances of the province will then be managed by the national office, which means the end of this month we will be managing the finances with the province, in terms of how you paid the allocations to the branches and to the regions. If there are programmes they will have to discuss it with us and we see how we fund those programmes. Whatever meeting they want to convene they will have to talk with us and we together speak in terms of how those meetings will have to happen. If there were programmes that they had like they said in terms of workshops and so on and so forth, those will still continue unabated but they will have to do that in communication with the national office (92:6-20).

17. In the premises, and despite my view that this is not a proper ground of appeal in the circumstances, I am in any event of the view that the applicants have not demonstrated that they were deprived of natural justice, and that there are no reasonable prospects of another court entertaining this ground; alternatively, coming to a different conclusion after having entertained it.

No basis for putting the first applicant under administration

18. It has been contended that I erred in not considering that there was no legal basis for putting the first applicant under administration.

19. At the commencement of the hearing of this application, I directed the parties to address me in limine, on the five pertinent issues listed in paragraphs a – e at page four of this judgment. In my judgment I traversed these issues and found with respect to each, that the applicants had not proved their case. I also found that with respect to each of these issues viewed individually, the application fell to be dismissed. Having arrived at this conclusion, I did not deem it necessary to make a finding on the merits of the application. I am of the view that there are no reasonable prospects of another court concluding that I ought also to have traversed the merits of the application, particularly when the respondent’s constitution, which forms part of these papers and to which regular reference was made, makes it quite clear that the NEC has these powers in any event.

Urgency and exhausting internal remedies

20. It has been contended that this Court erred in finding that the applicants were not entitled to approach it on an urgent basis without exhausting their internal remedies by referring the matter to the National Conference scheduled for 2 October 2014. This is so, it is argued because the applicants’ funds for discharging the “powers” conferred on them by virtue of the provisions of clauses 12.6.3 and 12.6.4 of the respondent’s constitution were being withheld and that the first applicant and the “structures” of the first respondent in the Eastern Cape were unable to pay their creditors.

21. The applicants appear to conveniently ignore the fact that they did not approach this court for interim relief pending the finalisation of the investigations referred to at the 22 July meeting, or pending the finalisation of any other steps for that matter. It was contended on behalf of the applicants that I should grant final relief. This aspect was fully traversed at pp 11 to 20 of my judgment.

22. At page 14 para 35 of my judgment, I refer to the averment made on oath by the deponent to the first respondent’s affidavit, that the applicants had resolved to defy the NEC. This is indeed borne out by, inter alia, the following in the papers:

a. The letter written by the first respondent’s general secretary to the first applicant’s provincial secretary on 28 July 2014 which reads thus (record 202):

‘Dear Comrades,

Our letter sent to you on the 28th July 2014 regarding the Eastern Cape Under Administration has reference.

We kindly request the account numbers of the Eastern Cape Regional and Branch offices in order for the accounts department to process payments to the relevant offices of the Eastern Cape. The account numbers do not reflect on the bank statements provided by yourselves.

Thanking you in advance.

Comradely Regards’

b. The final decision of the first applicant’s extended meeting on 29 July 2014 (being the very next day) which is recorded thus (record p140):

‘Eastern Cape must not co-operate with submission of bank details of Regions and Branches’.

c. The Union’s unchallenged averment on oath confirming that it had deposited substantial funds into the Eastern Cape bank account on 31 July 2014.

d. The third applicant’s response on oath (having admitted receipt of the aforesaid letter) referred to at page 16 paras 40 and 41 of my judgment.

e. The Union’s consent on 14 August 2014 to an order directing the first applicant to deliver its list of creditors and debts by 15 August, whereupon the Union’s NEC would pay the total reflected by no later than 16h00 on that day, provided that the amounts set forth in the list taken together with that already paid by the NEC after 22 July 2014 did not exceed R1,4 million (which was the PEC’s monthly budget in any event).

23. In my view it is clear from the record, from my judgment and from that set forth hereinbefore that the applicants deliberately ignored all opportunities available to them to resolve this impasse amicably without approaching this Court on an urgent basis, and that there are no reasonable prospects that another Court will conclude otherwise. I digress to mention that it is unfortunate that this Court is in the dark as to whether the applicants, their application having been dismissed on 23 September 2014, allowed common sense to prevail by seeking resolutions at the National conference scheduled for 2 October 2014, having delivered

their grounds of appeal on 30 September 2014.

24. Although not reflected in the grounds of appeal, it was also argued before me that I erred in dismissing the application for lack of urgency, in that I ought to have struck the application from the roll instead, thus allowing the applicants a further opportunity to approach this Court in the normal course.

25. It seems to me that the applicants, in presenting this argument, have lost sight of the fact that the application was primarily dismissed on the various other grounds raised in limine, and not only due to lack of urgency. I may well have been inclined to grant leave to appeal on the urgency issue on a point of law, if that had been the only reason for the dismissal of the claim (see Commissioner, South African Revenue Services v Hawker Air Services (Pty) Ltd; Commissioner, South African Revenue Services v Hawker Aviation Partnership and Others [2006] ZASCA 51; 2006 (4) SA 292 SCA at 299G-300A).

26. On the other hand, I am also inclined to agree with the views expressed by Jones J in particular with respect to a court of first instance being entitled to dismiss a claim purely as a mark of its displeasure at an abuse of the process of the court, whether it is an abuse of the procedure relating to urgency or any other procedure (see Vena v Vena 2010 (2) SA 248 ECP 252H-J.

The order against the third applicant

27. Finally, it is contended that I erred in finding that the third applicant instituted the application in his personal capacity only, and without authority from the second and fourth to eighth applicants, in the light of the fact that lack of authority was not raised and must have been deemed to have been admitted in terms of the law. Following on this argument, it is further contended that I accordingly erred in finding that the third applicant was the only one properly before me, and by ordering him to pay costs in his personal capacity.

28. Whilst I do not necessarily agree with this contention, I am of the view that there is some merit in the argument if only for the reason that I did not raise this concern with the parties before I delivered my judgment. In the premises I am of the view that there are prospects that another Court may arrive at a different conclusion on this point.

29. In the result I make the following order:

ORDER:

1. The applicants (excluding the first and second applicants) are granted leave to appeal to the Full Court of this Division on the following grounds:

a. Whether this Court erred or misdirected itself in finding that the third applicant instituted the application in his personal capacity only and without the authority of the second and fourth to eighth applicants;

b. Whether this Court erred or misdirected itself in concluding that the third applicant was the only applicant before it;

c. Whether this Court erred or misdirected itself in directing the third applicant to pay costs in his personal capacity.

2. The application for leave to appeal on the remaining grounds set forth in the grounds of appeal and raised in argument is dismissed.

3. The costs of the application for leave to appeal are reserved for determination by the Court hearing the appeal.

4. It is directed that this judgment forms part of the appeal record.

I T STRETCH

Judge of the High Court

21 November 2014

Matter heard on: 14 November 2014

For the applicants: P.H.S. Zilwa SC with M Simoyi Instructed by Malusi & Co Attorneys, East London Ref. Mr Malusi For the first respondent: J.G. Rautenbach S.C. Instructed by Cheadle Thompson & Haysom Locally represented by: Hutton & Cook, King Williams Town Ref. Kalpa Ravala