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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(MPUMALANGA DIVISION, MBOMBELA)

 

CASE NO: 4527/23

(1)       REPORTABLE:NO

(2)       OF INTEREST TO OTHER JUDGES: NO

(3)       REVISED:  YES

DATE: 06/11/2023

SIGNATURE

In the matter between:

 

SCHOOL GOVERNING BODY

DUMELANI PRIMARY SCHOOL                                                   APPLICANT

 

and

 

MEC FOR EDUCATION, MPUMALANGA                                    1^ST RESPONDENT

 

DEPARTMENT OF EDUCATION, MPUMALANGA                      2^ND RESPONDENT

 

THE STANDARD BANK OF SA LTD                                            3^RD RESPONDENT

 

THE SCHOOL PRINCIPAL,

DUMELANI PRIMARY SCHOOL                                                  4^TH RESPONDENT

 

JUDGMENT

 

GUMEDE AJ

 

1.    In this application, the applicant seeks an order to restore certain office bearers of the applicant as signatories, in respect of the banking account of the Dumelani Primary School which is held by the third respondent (“Standard Bank”).  In response to this application, Standard bank elected to deliver a notice to abide this court’s order.

 

2.    The application is opposed by the first, second and fourth respondents (“department”).

 

3.    The applicant is the school governing body of the Dumelani Primary School (“SGB”).   The applicant contends that it elected new members of the SGB on 7 May 2022.  Following that election, and in line with the 2019 Mpumalanga Financial Directives for the schools[1], the applicant sought to register the newly appointed office bearers of the SGB as signatories to the school’s bank account which is held by Standard Bank. 

 

4.    To that end, the newly elected chairperson facilitated the change of signatories on the school bank account from the former SGB to the current office bearers.  That process was finalized on 12 May 2022 when the office bearers of the applicant were confirmed as the signatories to the school bank account.[2]

 

5.    The applicant alleges that in just over two weeks of the confirmation of signatories and on 30 May 2022, Standard Bank removed the new signatories at the behest of Acting Principal.  The applicant contends that when it made enquiries, the officials at Standard Bank informed them that the Acting Principal had furnished the Bank with minutes of SGB to effect the change to signatories.  The Bank informed the applicant to seek a court order should it wish to reinstate its office bearers as the school bank signatories.[3]  Standard Bank was not able to produce a copy of the purported minutes furnished by the Acting Principal.

 

6.    On 6 June 2022, the SGB wrote a letter to the first respondent requesting him to remedy the alleged wrongful conduct of the Acting Principal.  The letter is attached to the founding papers, marked as annexure “SGB3” and it sets out a history of the conflict between the SGB and the principal.  The first respondent did not respond to the SGB letter.[4]

 

7.    The SGB was disbanded and a new SGB was elected in August 2022.  Reasons for disbandment are not disclosed in the papers. 

 

8.    Following the election of the new SGB, the same conflict between the SGB and the principal regarding the school’s banking account and signatories thereof, persisted, so much so, that the principal refused to obey a directive from the MEC, which directed her to cooperate with the assigned SGB members in order to replace the unauthorized signatories to the bank account.[5] 

 

9.    According to the applicant, it took the force of legal proceedings for the office of the MEC to order the  restoration of the chairperson and treasurer of the SGB as bank signatories  and the removal of previous signatories, in June 2023.[6]  This truce was short lived as on 15 September 2023, the applicant learnt that the school’s bank account was frozen and that the chairperson and the treasurer of the SGB were again removed as bank signatories.[7]  

 

10. The applicant contends that its chairperson attended at the Standard Bank branch to enquire about the reason why the school bank account had been closed.  An official named Steve Chauke at Standard bank, informed him that the account was closed on the instruction of the MEC.[8]  It is not clear whether the bank account is frozen or closed as the applicant seems to be using the two words interchangeably.

 

11. The applicant contends that following the closure of the school bank account, it sent a letter to the MEC, requesting reasons why the bank signatories were removed.  The said letter is not in the papers, although it is supposed to be annexure “SGB4”.[9]

 

12. In its opposition to the application, the department raises two preliminary points, (i) that the matter is not urgent, and (ii) that the applicant has no locus standi.

 

13. The departments’ first objection is that the application was served on them on Friday, the 29^th of September 2023 and required them to indicate their intention to oppose on Monday, 2 October 2023, which according to the department, effectively gave them half a day to oppose.  The respondents were required to file their answering affidavit on Tuesday, 3 October 2023.

 

14. The second objection is that the applicant has no standing on the grounds that as a legal entity, it failed to file a proper resolution authorizing the institution of these proceedings.

 

15. I am of the view that both preliminary points cannot succeed for reasons that the respondents had a total of five days, albeit consisting of a weekend, to prepare its opposition and to ensure that its papers are filed timeously. 

 

16. On the question of locus standi, the applicant indeed filed a resolution, authorizing the institution of these proceedings.  The date on the resolution is however incorrect.  It was explained in the replying affidavit that a typing error occurred as the papers were drafted as a matter of extreme urgency.  The issue of the bank signatories which is the crux of this application, arose in September 2023.  It is clear that the date of March 2023 is an error.

 

17. The department opposes the application on the grounds that the applicant is dysfunctional and that it has committed financial misconduct.[10]  The department submits that in these circumstances, it is empowered by section 25 of the Schools Act (“the Act”) to remove the applicant from its position as the SGB and to appoint suitable persons in its stead.  To support the allegation of financial misconduct, the department furnished a list of payments which were made by the applicant to various persons, which payments, the department alleges are unlawful.[11] 

 

18. The department points out that in terms of clause 8 of the 2019 Financial Directives for Schools, the SGB is required to have a Finance Committee that would assist the school in monitoring and controlling financial matters.  The department contends that the Finance Committee cannot convene in the absence of the treasurer, the school principal as well as the finance officers and that the minutes of the finance committee must be kept by the finance officer and must be circulated to all members of the finance committee and approved in subsequent meetings.  According to the department, the applicant has violated the provisions of this clause. 

 

19. The 2019 Financial Directives referred to by both parties have not been furnished to this court. 

 

20. The department also points to section 16A of the Act which provides that the principal must attend and participate in all meetings of the governing body and assist it with the management of the school funds, which assistance must include, the giving of advice to the governing body on the financial implications of decisions relating to financial matters of the school.  The department contends that section 16A(2)(i) requires the principal to take all reasonable steps to prevent any financial maladministration or mismanagement by any staff member or the governing body.  Section 16A(2)(k) enjoins the principal to report any maladministration or mismanagement of financial matters to the governing body and to the Head of Department.

 

21. The department argues therefore that the principal acted in terms of section 16A and reported the alleged financial maladministration and mismanagement by the applicant to the Department.  Accordingly, so the submission goes, the Department exercised its powers in terms of section 25 of the Act to remove the SGB.[12]

 

22. Although the Head of Department is empowered to remove the SGB in appropriate circumstances, the law requires that the process of removal of the elected officials, be transparent.

 

23. Section 25 of the Act provides that if the head of department determines on reasonable grounds that the SGB has, inter alia, failed to perform its functions, he/she must appoint sufficient persons to perform such functions for a period not exceeding three months.

 

24. The crux of the case for the applicant is that it has a responsibility to open and maintain a bank account on behalf of the school.[13]  It contends that on 15 September 2023, the department unlawfully removed its office bearers as signatories to the school bank account. 

 

25. The department argues that it acted in terms of section 25 of the Act to remove the SGB, following a report of financial maladministration and mismanagement submitted by the principal.[14]  A copy of such report is not before this court.  Furthermore, the applicant contends that it received no correspondence from the department, advising it of the allegations of mismanagement.  Applicant argues that the department has provided no real reasons for alleging that the applicant is dysfunctional.  All that the department did was list payments and concluded without any elaboration or evidence that the payments are unauthorized. 

 

26. During argument, counsel for the applicant submitted that section 22 of the Schools Act sets out the process which must be followed by the head of department when withdrawing functions from the governing bodies.  He submitted that under this section, the head of department may on reasonable grounds, withdraw a function of a governing body, after he/she has informed the governing body of his/her intention to do so and granted the governing body a reasonable opportunity to make representations to him/her relating to such intention.  He further submitted that in the case of urgency, subsection 3[15] empowers the Head of Department to act without prior communication to such governing body, provided that he/she thereafter furnishes the governing body with reasons for his or her actions and gives the governing body a reasonable opportunity to make representations relating to such actions; and duly considers any such representations received. 

 

27. Counsel for the department argued that in removing the office bearers of the applicant, the department acted in terms of section 25 and not in terms of section 22. 

 

28. When questioned by the court whether he is suggesting that section 25 empowers the department to act unilaterally without engaging the SGB, he in my view, correctly conceded that is not the case.

 

29. It may be that the department has a genuine concern regarding the functioning of the SGB, including its handling of the school’s finances.  If that is indeed the case, I agree with the applicant that section 22 of the Act sets out the process that ought to be followed in order to withdraw a function from the SGB, even in urgent circumstances. 

 

30. In this case, due process was not followed by the department.  The department has also failed to furnish this court with evidence of the alleged financial mismanagement by the SGB which may have influenced this court in its exercise of discretion to refuse the interdict. 

 

31. This court cannot countenance self-help especially by a state organ which should be exemplary in upholding the values in the constitution of the Republic.

 

32. I am therefore of the view that the applicant is entitled to the relief it seeks.

 

33. In the event that there is a genuine financial mismanagement by the applicant, the department will be entitled to appropriately act in terms of section 22 of the Schools Act.

 

In the premises, I make the following order:

 

1.    The application is heard as an urgent application in accordance with Rule 6(12) of the Uniform Rules of this Court and the applicant’s failure to comply with the rules relating to forms and service is condoned.

 

2.    Pending the finalisation of Part B of this application, the first, second and forth respondents or any person acting on their behalf are:

 

a.    interdicted and/or restrained from freezing the bank account belonging to Dumelani Primary School held by the third respondent;

 

b.    interdicted and/or restrained from from removing the members of the applicant, including the chairperson and the treasurer, as signatories of the Dumelani Primary School bank account held by the third respondent;

 

c.    directed to take all reasonable steps to reinstate the members of the applicant who were removed as signatories of the school bank account held by the third respondent;

 

d.    directed to take reasonable steps to remove the unauthorised persons who were installed as signatories of the Dumelani Primary School bank account held by the third respondent, in place of the members of the applicant.

 

3.    The first, second and fourth respondents are ordered to pay costs of this application.

 

Z GUMEDE

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA

 

This judgment was handed down electronically by circulation to the parties and/or parties’ representatives by email. The date and time for hand-down is deemed to be 6 November 2023 at 10:00.

 

APPEARANCES

For the applicant:	MR N RAKGWAKGWA
Instructed by:	TP SITHOLE INC, MBOMBELA
For the Respondents:	MR T NGWENYA
Instructed by:	STATE ATTORNEY, MBOMBELA
Date of hearing:	10 OCTOBER 2023
Date of judgment:	6 NOVEMBER 2023

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