CASE LAW UPDATE

Facts: The appellants are trustees of the Rhino Pride Foundation (the Trust), a public charitable inter vivos trust (created during the lifetime of a person) established in terms of the Trust Property Control Act 57 of 1988, and registered as a non-profit and public benefit organisation. Dr Pretorius (the respondent), a specialist wildlife veterinarian, is the founder and a trustee of the Trust. The main objects of the Trust are the creation of a fund to put an end to the poaching of rhinos for their horns; the advancement and protection of rhinos in South Africa; and the provision of medical care and facilities to rhinos, including emergency relief and rescue. In 2022, in terms of clause 11 of the trust deed, the appellants adopted a resolution by majority vote, requiring the respondent to resign from her office with immediate effect.

Appeal: The respondent, in her personal capacity and as a trustee, applied to the High Court for an interdict to prevent the appellants from enforcing the impugned resolution, pending the finalisation of an action to be instituted to set aside that resolution. The appellants filed a counter-application for an order that the impugned resolution be enforced, alternatively, that the respondent be removed from office as a trustee. The High Court granted the main application and dismissed the counter-application. This appeal concerns the proper construction of a clause in the trust deed, which provides that the office of a trustee shall be vacated when the remaining trustees unanimously require the resignation of any trustee.

Discussion: The parties had a good relationship until late 2021 when the appellants became concerned about the respondent’s administration of the Trust and management of the farm, including that her fiancé became involved on the farm. The foreign donor also became concerned and this placed future donations at risk. Despite agreeing to take a temporary leave of absence, in a remarkable volte-face, the respondent obtained an ex parte order, based on statements which the judge later found were false, and the ex parte order was set aside. The decision to replace the respondent, the evidence shows, was not taken arbitrarily. There were compelling reasons for her removal and she was treated fairly. The respondent’s section 34 constitutional right to have a dispute that can be resolved by the application of law decided by a court, was not infringed.

Findings: Section 20(1) of the Act empowers a court to remove a trustee from office, if it is in the interests of the Trust and the beneficiaries. Section 20(1) does not state that this power is exclusive to the court. Nor is there any reason to read such limitation into section 20(1). Thus, section 20(1) does not detract from the principle that a founder may reserve the right to remove a trustee, or may confer it on some other person, if that right is stipulated in the trust instrument. Clause 11 provides an expeditious method for the removal of a trustee, in the interest of the Trust and its beneficiaries. It obviates the lengthy delays, exorbitant costs and uncertainties associated with litigation. The appellants have established that the resolutions that the respondent vacate the office of trustee, and that their selected replacement be appointed to that position, are valid and enforceable. The removal of the respondent as trustee is plainly in the interests of the Trust and its beneficiaries.

Order: The appeal succeeds with costs, which shall be paid by the respondent in her personal capacity. The order of the High Court is set aside and replaced with an order dismissing the application and where the counter-application succeeds, with the resolutions taken at the meeting of the trustees being valid and enforceable.

SCHIPPERS JA (NICHOLLS JA, MOTHLE JA, UNTERHALTER JA and BAARTMAN AJA concurring)

Facts: The dispute is about series of articles that were published by the respondents about the King of eSwatini, various of the eSwatini government’s ministers, and certain public officials, all of which the eSwatini government contends are defamatory of the King of eSwatini and his entire government. The articles were published by Swaziland News on its website and on social media platforms. The Minister alleges that the articles refer to the King, members of the royal family, various ministers and/or public officials the eSwatini government and members of parliament. The Minister alleges that it is apparent from the content of the articles themselves that Swaziland News and Mr Dlamini (editor) consistently make harmful, derogatory, false and misleading allegations against the eSwatini government in order to undermine the legitimate purpose, authority and decisions of the eSwatini government and to lower its standing in the public’s eyes. The Minister says that these articles are relentless, unsubstantiated and cause reputational harm to the eSwatini government.

Application: The Minister alleges that the respondents’ publication of the offensive article is unlawful or wrongful and published with the intent to defame various ministers and public officers or royal family member. It further seeks to defame the head of State and the government. The Minister is seeking a permanent interdict against the respondents. The Minister seeks to obtain relief not only for himself but also for the King and the eSwatini government.

Discussion: The articles defame the persons mentioned therein. The articles, read in their totality, and considered objectively, impairs the character, moral and social worth of those persons mentioned in the articles. The articles prejudice the respect and esteem of those mentioned in the articles amongst their fellow men and women and are humiliating in their content. Swaziland News does not claim that the statements are true. What Swaziland News appears to raise is the defence of reasonable publication. The allegations against the eSwatini government and especially the King are serious and explicitly defamatory upon a mere reading thereof. The source of the information in the articles are not disclosed by Swaziland News. The timing of the articles coincided with the public uprising in eSwatini. The articles were not independent and constituted the most severe criticism against the King and the eSwatini government. The timing of the articles, coinciding with the public uprising, was clearly aimed at, or had the potential, or indeed did, fuel the perpetrators of the uprising and clearly sought to gain support for the dissidence. The articles were not reasonable. No defence is established by Swaziland News in this regard.

Findings: The publication of the articles was unlawful as Swaziland News did not establish any of the established grounds of justification. Swaziland News has overreached in respect of its freedom of speech right. Swaziland News transgressed what is accepted as journalistic ethics. With regards to those who the Minister purportedly represents, the Minister says that each of those persons have standing to have approached this court. The Minister is correct, but they did not do so. Nothing prevented them from doing so. The Minister approaches this court in his own name and in his representative capacity. None of the articles refer to the Minister. One article refers to the Minister’s spouse. The Minister was not defamed. Perhaps his spouse was. None of the Minister’s personal rights were infringed. Therefore, the Minister has not established an infringement of his personal rights and is not entitled to interdictory relief. Insofar as the King and other officials of the eSwatini government are concerned, the King and the other officials have not established a clear right. No evidence was brought to court about the effect of the statements in the articles on them. The King and the other persons purportedly being represented by the Minister must be non-suited.

Order: The application is dismissed.

ROELOFSE AJ

Facts: The previous Public Protector, Ms Busisiwe Mkhwebane, was the subject of complaints of incompetence and misconduct. The National Assembly resolved to adopt a report of an independent panel and to proceed with an enquiry in terms of section 194 of the Constitution. The matter was thereafter referred to a committee, comprising members of each of the 14 political parties represented in the National Assembly, for a formal enquiry. A veritable avalanche of legal challenges, primarily at the instance of Ms Mkhwebane, followed. She was removed from office and Ms Kholeka Gcaleka was thereafter appointed as her successor by the President for a non-renewable term of seven years.

Appeal: The appeal to the Supreme Court of Appeal was initially brought in the name of the Public Protector, even though the person whose interests it seeks to advance, Ms Mkhwebane, had by that stage already been removed from office. What is more, the application, the subject of the appeal, which had commenced as an urgent application, had been brought in the middle of a process that has since been finalised, and was thereafter followed by no less than three further decisions – none of which have been challenged.

Discussion: Not having challenged her removal as Public Protector (or even attempted to do so), the recommendations and resolutions culminating in her removal thus stand. Despite her challenge before the High Court having long been overtaken by these events, Ms Mkhwebane seeks to persist in the appeal. She urges this court to enquire into the legality of three interlocutory rulings, made during the enquiry by the section 194 Committee and she asks for those rulings to be set aside and substituted. But the enquiry is over, the National Assembly has impeached her, she has been removed from office, and a new Public Protector has been appointed. The court is also left in the dark as to when it first dawned on Ms Mkhwebane, given what she describes as her “change of status”, that a substitution was indeed necessary and what steps, if any, were subsequently taken. Ms Mkhwebane could not by dint of a mere notice under Uniform Rule 15, without more, achieve the desired substitution. Inasmuch as there is neither an appeal properly before this court, nor an appellant to prosecute it, the matter falls to be struck from the roll.

Counsel: Where, as here, counsel has been involved in many matters involving the same client, they can easily become convinced of the merits of their client’s cause, oftentimes to the detriment of the client. Unless the matter is approached from a detached perspective, a legal representative may well develop tunnel vision, thereby losing all objectivity. Had counsel stepped back apace, or had Ms Mkwebane taken advice from a disinterested member of the bar, schooled in appellate practice, she would have been advised not to pursue this appeal, which self-evidently was dead on arrival. The court cannot conceive that any reasonable legal practitioner could disagree with this appraisal. The regret is that unmeritorious appeals, such as this, impact not just the immediate parties and the court (that has to increasingly deal with congested court rolls), but also other litigants whose matters are truly deserving of the attention of this court. Those litigants have to wait in line whilst the judges process frivolous appeals such as this.

Order: The appeal is struck from the roll with costs, including those of two counsel, to be paid by Ms Mkhwebane.

PONNAN JA (NICHOLLS JA, MOTHLE JA, MASIPA AJA and DIPPENAAR AJA concurring)

Facts: The applicant is the LPC. The first to fourth respondents are attorneys employed by the fifth respondent, Nhlabathi Gys Louw. They were once directors of the firm but have each relinquished their directorships because of the events giving rise to this application. The application is based substantially upon a dishonest scheme apparently conceived of and executed by the first respondent, Mr Louw, when he was the de facto managing partner of the firm. The scheme involved understating the firm’s annual fee income by paying the firm’s expenses directly from its trust account, and drawing down the professional fees due to the firm after the firm’s expenses had been deducted from them. This permitted the firm to state its annual fee income at just below R50 million. At the relevant time, the firm’s true fee income was more than R100 million.

Application: The applicant, the LPC, applies for an order striking the first to fourth respondents from the roll of legal practitioners. Where the facts underlying an application to strike off a legal practitioner are likely to be contested or obscure, the Legal Practice Council (LPC) will generally be required to convene a disciplinary committee in terms of Chapter 4 of the Legal Practice Act 28 of 2014 before approaching a court for a striking off order. A court nonetheless retains the power, in terms of section 44 (1) of the Act, to entertain a striking off application without a disciplinary inquiry having taken place.

Discussion: The purpose of the scheme was to avoid attracting the more onerous Broad Based Black Economic Empowerment (B-BBEE) requirements that would have been applied to the firm had its reported fee income exceeded R50 million, and with which the firm could not comply. Given that the firm relied, in large part, on conveyancing instructions from major financial institutions, a failure to comply with the B-BBEE requirements routinely applied by those institutions would probably have reduced drastically the number of instructions the firm could expect to receive. There is no serious dispute that this scheme is dishonest, and that Mr Louw implemented it deliberately to achieve the purpose set out above. Beyond that, however, the facts on which the LPC claims a striking off order become considerably murkier. The understatement of the firm’s fees is but one of several species of misconduct alleged in the papers against the firm. These range from essentially bribing estate agents to send conveyancing instructions to the firm, touting, tax evasion and failure to keep proper accounts. The LPC makes no attempt on the papers to differentiate between the first to fourth respondents when alleging knowledge of the wrongdoing or examining their degree of culpability for it. In addition, there are several issues hotly disputed on the papers, including whether the conduct underlying these allegations took place; whether, on a proper analysis, the conduct that did take place amounted to the transgression of the Code of Conduct for Legal Practitioners; and whether each of the first to fourth respondents committed the misconduct, knew about it, or were in a position to stop it.

Findings: The papers lack an adequate factual substrate. Mr Stocker, who appeared for the LPC, was unable to convince the court that the papers are adequate to support findings on each of the issues, in relation to each form of misconduct alleged, and in relation to each of the first to fourth respondents. The deceptive nature of the scheme leaves Mr Louw with a lot to answer for, but it cannot be said that his striking off is inevitable without a fuller picture of the firm’s affairs and his role in them. It is not clear that the other former directors misconducted themselves, and, if they did, whether they nevertheless remain fit and proper to practice. Without establishing what they knew or ought to have known, and when they knew or ought to have known it, that evaluation cannot take place. The impression arising from the papers is that Mr Louw ran the firm on his own. Ms Williams is his wife, and no account has been taken of the extent, if any, that this might affect her culpability or the appropriate sanction, if any is found. The third and fourth respondents’ shareholdings in the firm were not such as to ground the inference that they could realistically have challenged Mr Louw’s grip over the firm’s affairs. The LPC ought to have engaged the statutory powers before seeking the first to fourth respondents’ striking off. On the facts of the case, a disciplinary inquiry is necessary. The failure to hold one renders the LPC’s approach to the court premature.

Order: The application is dismissed. The applicant must convene a disciplinary inquiry in terms of section 37(4) of the Legal Practice Act 28 of 2024 before it takes any further steps to suspend or strike the first to fourth respondents from the roll of legal practitioners.

WILSON J (SUTHERLAND DJP concurring)