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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

 

 

IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

 

 

Case No: CT00810ADJ2021

 

 

In the matter between:

 

 

JAMES EVANS                                                              APPLICANT

 

 

and

 

 

THE TWO OCEANS MARATHON NPC

(Reg. No: 20[....]08)                                                       FIRST RESPONDENT

 

 

COMPANIES AND INTELLECTUAL PROPERTY

COMMISSION                                                                SECOND RESPONDENT

 

 

Coram: ISHARA BODASING

Date of Hearing: 03 November 2021

Date of Decision: 30 November 2021

 

 

DECISION (Reasons and Order)

 

 

1.         INTRODUCTION

 

1.1        On 10 September 2021, this Tribunal received James Evans’ (Applicant) application for an order to set aside the proceedings at First Respondent’s Annual General Meeting (AGM) held in December 2020.

 

1.2         First Respondent is the Two Oceans Marathon NPC (“TOM”), a non-profit company incorporated in terms of the company laws of South Africa and having its principal place of business at 125 Main Road, Heathfield, Cape Town.

 

1.3          Second Respondent is the Companies and Intellectual Property Commission (“CIPC), a juristic person established in terms of section 185(1) of the Companies Act 71 of 2008 (“the Act”). I note that although papers were served on the CIPC, it has elected not to participate in these proceedings.

 

1.4        In its opposing papers, First Respondent raised some preliminary issues, which were the subject of a hearing to consider the parties’ submissions. Following on this, the parties were afforded the opportunity to make supplementary written submissions on the preliminary issues. I take this opportunity to thank the parties for their well-researched written submission, which crystallised the issues and assisted this Tribunal to reach its decision.

 

1.5        I asked the parties to focus their written submissions on:

 

1.5.1        the jurisdiction of this Tribunal to hear the main application;

1.5.2        authority in support of their respective arguments about the interpretation of the CIPC’s form CoR135.2 Notice and supporting memorandum to Applicant;

1.5.3        what are the requirements and considerations in an application to strike out;

1.5.4        what considerations must be borne in mind when the mootness of relief sought is raised.

 

2.         ISSUE

 

This decision focuses on the preliminary issues raised by First Respondent.

 

2.1        The first issue to be considered is if Applicant has locus standi to bring this application.

 

2.2         If a finding on the first issue does not dispose of the matter, then the next issue is whether or not Applicant served the application timely on First Respondent, and if not, then should this Tribunal condone the tardy service.

 

2.3        First Respondent added to the agenda sent a day before the hearing, their need to procure the contents of the CIPC’s file;

 

2.4        First Respondent also wanted, at the hearing, to apply to strike out the “new evidence” of Applicant’s alleged membership of First Respondent introduced in Applicant’s Reply to the opposing papers.

 

2.5        First Respondent raised a preliminary issue a day before the hearing, that the relief sought by Applicant is moot.

 

3.         APPLICABLE LAW

 

3.1        Part D of the Act is headed Complaints to Commission or Panel. Section 168

thereunder deals with initiating a complaint, and states that: “(1) Any person may file a complaint in writing –

 

(a) …

(b) with the Commission in respect of any provision of this Act not referred to in paragraph (a),

alleging that a person has acted in a manner inconsistent with this Act, or that the complainant’s rights under this Act, or under a company’s Memorandum of Incorporation or rules, have been infringed.”

 

3.2        Section 169 expands on Investigation by Commission, and states:

 

“(1) Upon initiating or receiving a complaint, … in terms of this Act, the Commission

…, may-

(a)            except in the case of a direction from the Minister, issue a notice to the complainant in the prescribed form indicating that it will not investigate the complaint, if the complaint appears to be frivolous or vexatious, or does not allege any facts that, if proven, would constitute grounds for remedy under this Act;

(b)             if they think it expedient as a means of resolving the matter, refer the complainant to the Companies Tribunal, or to an accredited entity, as defined in section 166(3), with a recommendation that the complainant seek to resolve the matter with the assistance of that agency or person; or

(c)            direct an inspector or investigator to investigate the complaint as quickly as practicable, in any other case.

 

3.3        Section 170 deals with the Outcome of an investigation by the CIPC, and states that

 

“(1) After receiving the report of an inspector or independent investigator, the Commission or Panel, as the case may be, may-

… (b) refer the complaint to the Companies Tribunal, …, if the matter falls within their respective jurisdictions in terms of this Act;

(c) issue a notice of non-referral to the complainant, with a statement advising the complainant of any rights they may have under this Act to seek a remedy in court;

…

(2) The Commission … -

(b)            …, must deliver a copy of the report to-

(i)               the complainant, or a regulatory authority that requested the initiation of the complaint;

(ii)             any person who was a subject of the investigation;

 

3.4        Companies Regulation 135: Filing of complaints with the Commission –

 

…

(4) A notice of non-investigation of a complaint by the Commission or the Panel, as contemplated in section 169 (1)(a), must be in Form CoR 135.2.

 

4.         EVALUATION

 

Locus standi of Applicant

 

4.1     At the outset, I mention that although First Respondent questioned Applicant’s locus standi, from a reading of the papers it also appears that First Respondent questions the jurisdiction of this Tribunal to consider the main application. In its CoR 135.2 Notice, Second Respondent cites Section 169(1)(a) of the Act in deciding not to investigate Applicant’s complaint. However, in a memorandum attached thereto, purportedly from the official with whom Applicant had been liaising, reference is made to Section 169(1)(b) of the Act. The crux of First Respondent’s initial argument is that these provisions are mutually exclusive, and reliance must be placed on the citation in the Notice itself.

 

4.2        Applicant included in its reply thereto correspondence with officials from Second Respondent, which indicates that they do not consider the two provisions to be incompatible.[1]

 

4.3        In its written submissions, First Respondent added another aspect to its claim that this Tribunal lacks jurisdiction. The gist of this new argument is that the administrative action of Second Respondent was unlawful. This was not raised in the main pleadings or during the hearing. So, I have not given it consideration.

 

4.4        Our rule of law requires that the law be clear and ascertainable.[2] Unfortunately, the two sub-paragraphs (a) and (b) of Section 169(1) are not separated by an “and” or an “or”, which prepositions would more clearly indicate the intention of the legislature. Therefore, this becomes an exercise in the interpretation of a statute.

 

4.5        Section 39(2) of our Constitution dictates that “when interpreting any legislation … every court, tribunal, or forum must promote the spirit, purport and objects of the Bill of Rights.” Section 7 of the Act states that one of its purposes is to promote compliance with the Bill of Rights as provided for in the Constitution, in the application of company law.

 

4.6        A limitation on the section 39(2) constitutional imperative to interpret legislation thus, is that the legislative provision must be “reasonably capable” of bearing the meaning ascribed to it by a party. In other words, the interpretation must not be “unduly strained”. This limitation was explained by Sachs J, in the SAPS v PSA case[3] in which it was said:

 

“Interpreting statutes within the context of the Constitution will not require the distortion of language so as to extract meaning beyond that which the words can reasonably bear. It does, however, require that the language used be interpreted as far as possible, and without undue strain, so as to favour compliance with the Constitution.”

 

4.7        The rules for interpretation of a statute have become fairly settled through the Endumeni case.[4] Considerations of context and equity are also to be borne in mind: it is unlikely that the legislature intended to close the door of the Tribunal to someone in Applicant’s position. This is also bolstered by the responses of Second Respondent’s officials to Applicant’s queries in this regard.

 

4.8          I am therefore satisfied that Applicant does have locus standi to approach this Tribunal for the relief sought, and concomitantly, that this Tribunal does have jurisdiction to preside over the main application.

 

Condonation for late service

 

4.9        The Act’s Regulation 142(2) requires the Applicant to serve a copy of the application on the respondent within five working days of filing it. According to First Respondent, the application was issued on 08 September 2021, and ought to have been served on or before 15 September 2021; but was in fact served a day later, on 16 September 2021.

 

4.10     Applicant states that he submitted the main application electronically through this Tribunal’s case management system, which generated an automated standard response that it would take five working days for the registrar to review the application and respond. Applicant goes on to state in his reply, that he checked the system periodically, and when he noticed activity on his application, he downloaded the application, which has the date of 10 September 2021 stamped by this Tribunal’s registry.

 

4.11     Applicant submits that he does not have to apply for condonation for late service of the application on First Respondent because he was not late. The Tribunal’s registry stamp is dated 10 September 2021, which Applicant submits is the date of issue of the main application. An official from this Tribunal’s registry present at the hearing was asked to clarify this situation. He confirmed that there have been challenges with the online case management system, which could result in a situation where there is an automatically generated date stamp, and another that is manually stamped by an official.

 

4.12     Again, in the interests of justice, I accept that there is no need for Applicant to apply for condonation for late service since he was in receipt of a stamped application indicating that the application was issued on 10 September 2021.

 

Contents of the CIPC’s file

 

4.13     Applicant agreed to share with First Respondent details of the complaint he lodged with Second Respondent. Shortly after the hearing, this was indeed done.

 

Striking out the “new evidence”

 

4.14     I now consider First Respondent’s indication (since it was not brought as an interlocutory application in terms of the High Court Rules) that Applicant’s additional information as regards his membership of First Respondent, and contained in his Replying Affidavit, ought to be struck out.

 

4.15     Applicant states that this additional information is only in response to the issue raised in First Respondent’s Answering affidavit, as he did not expect this response. Applicant emphasizes that for over a decade, First Respondent has corresponded with him as a member, and has regarded him as an Honorary Member. First Respondent states that this was in error, which they have communicated to Applicant formally after this application was lodged with the Tribunal.

 

4.16     An application to strike out any matter from an affidavit is regulated by rule 6(15) of the Uniform Rules of Court, which reads as follows:

 

“The court may on application order to be struck out from any affidavit any matter which is scandalous, vexatious or irrelevant, with an appropriate order as to costs, including costs as between attorney and client. The court may not grant the application unless it is satisfied that the applicant will be prejudiced in his case if it be not granted.”

 

4.17     In this regard Mahomed CJ had the following to say in Beinash v Wixley[5]

 

“What is clear from this Rule is that two requirements must be satisfied before an application to strike out matter from any affidavit can succeed. First, the matter sought to be struck out must indeed be scandalous, vexatious or irrelevant. In the second place the Court must be satisfied that if such matter was not struck out the parties seeking such relief would be prejudiced.”

 

4.18     First Respondent was unable to show how the paragraphs pertaining to Applicant’s assertion that he is a member of First Respondent, were irrelevant, other than to repeat that they were not contained in the founding affidavit. Not surprisingly, no prejudice could be shown in the additional written submissions that I requested. I am not satisfied that the applicant will be prejudiced if the relief sought in this application (to strike out the above paragraphs) were not granted.

 

Mootness of relief sought by Applicant

 

4.19     Mootness will have the effect of restricting this Tribunal’s power to hear and determine the main application. In our law, the doctrine of mootness applies if giving a decision in a matter will produce no tangible result, but merely an opinion.[6]  In National Coalition for Gay and Lesbian Equality v Minister of Home Affairs[7] it was stated that:

 

“A case is moot and therefore not justiciable if it no longer presents an existing or live controversy which should exist if the Court is to avoid giving advisory opinions on abstract propositions of law.”

 

4.20     In Centre for Child Law v Hoërskool Fochville[8] the manner in which this discretion is to be exercised was described in the following terms:

 

“This court has a discretion in that regard and there are a number of cases where, notwithstanding the mootness of the issue as between the parties to the litigation, it has dealt with the merits of an appeal. With those cases must be contrasted a number where the court has refused to enter into the merits of the appeal. The broad distinction between the two classes is that in the former a discrete legal issue of public importance arose that would affect matters in the future and on which the adjudication of this court was required, whilst in the latter no such issue arose.’

 

4.21     In Minister of Justice & others v Estate Stransham-Ford[9] the nature of the discretion was described as follows:

 

“It is a prerequisite for the exercise of the discretion that any order the court may ultimately make will have some practical effect either on the parties or on others. Other factors that may be relevant will include the nature and extent of the practical effect that any possible order might have, the importance of the issue, its complexity and the fullness or otherwise of the argument.”

 

4.22     It has been suggested that where there are considerations of compelling public interest that require the court to reach a decision, an argument that the matter is moot is unlikely to succeed. In Western Cape Department and Another v George,[10]  the court held that the practical effect need not be restricted to the position between the parties but can also include a practical effect on a matter of public interest.

 

4.23     It is evident from the papers that prior to the 2020 AGM Applicant submitted resolutions for the removal of certain directors, who are not on the new Board. The relief claimed in the main application is that because the 2020 AGM was allegedly unlawful it should be set aside. First Respondent submits that the 2021 AGM is complete, and the new board has been appointed. Therefore, according to First Respondent, if this Tribunal is asked to set the 2020 AGM aside, the relief is moot because the 2021 AGM has come and gone and there is a new board in place. The three directors whom Applicant wanted removed at the 2020 AGM have been removed following the 2021 AGM by operation of the Memorandum of Incorporation.

 

4.24     It must also be borne in mind that the main ground for the relief sought in the main application is that proper procedure was not followed to hold the 2020 AGM. This is a matter of public interest and importance that will affect the future conduct of First Respondent and its Board. Another issue that remains alive, and linked to the relief sought, is whether or not Applicant is an Honorary Member of First Respondent.

 

4.25     It is for these reasons that I reject First Respondent’s argument that the relief sought by Applicant is moot in the face of the 2021 AGM results.

 

5.         FINDINGS

 

Against the backdrop of all stated above, I find that:

 

5.1          Applicant does have locus standi to approach this Tribunal for the relief sought in the main application;

 

5.2          Applicant does not have to apply for condonation for late service of the main application on First Respondent;

 

5.3         The contents of Applicant’s Replying Affidavit remain as is;

 

5.4        The relief sought in the main application is not moot.

 

6.         ORDER

 

6.1        The matter may proceed to a hearing on the merits of the main application.

 

6.2        Costs are reserved.

 

 

ADV. ISHARA BODASING

 

 

For Applicant: Himself

 

 

For First Respondent: Mr Glyn Williams of Chennells Albertyn Attorneys, Notaries and Conveyancers.

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