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NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG

CASE NO: 13138/03

DATE:2003-10-23

In the matter between:

THE SOCIETY FOR THE INDUSTRIAL AND ORGANISATIONAL

PSYCHOLOGY OF SOUTH AFRICA,

A DIVISION OF PSYCHOLOGICAL SOCIETY OF

SOUTH AFRICA (SIOPSA).................................................................................. First applicant

ALETTA ODENDAAL...................................................................................... Second Applicant

FUNEKA NOTHEMBA SHWENl......................................................................... Third Applicant

RALPH HOUGHTON WORTLEY.......................................................................Fourth Applicant

NANETTE TREDOUX...........................................................................................Fifth Applicant

INETTE ANNE TAYLOR.......................................................................................Sixth Applicant

RODNEY GRAHAM LE ROUX.......................................................................Seventh Applicant

and

THE PSYCHOLOGICAL SOCIETY OF SOUTH AFRICA (PSYSSA).......................Respondent

JUDGMENT

WILLIS, J:The first applicant seeks the following relief:-

1. An order declaring that the document attached hereto as "NOM1" constitutes the only and valid constitution of the first applicant.

2. Ordering the respondent in respect of the period 1 January 2000 to date:

(a) to provide to the first applicant with its membership list, reflecting all changes that have occurred in the membership of the first applicant for the period;

(b) to account to the first applicant for all subscriptions received by it from the first applicant's members for the period:

(c) to pay over the first applicant's shares of its members' subscriptions paid to the respondent during the period, which amount is due and payable by the respondent to the first applicant.

3. Further and/or alternative relief.

4. Costs of this application.

5. Costs of the two interlocutory applications launched under case numbers 03/1 5089 and 03/16363.

The respondent contends that it has already complied with the relief sought in prayer 2(a). The first applicant contends that the respondent had not fully complied with this relief. In any event, it is

clear that the respondent has no fundamental objection to this relief being granted and accordingly the only issue that would be relevant would be the question of costs.

In regard to the relief sought in prayer 2(b), the respondent contends that it is indeed obliged so to account and has no objection to the court granting an order in this respect but nevertheless once again this issue is relevant on the question of costs.

In so far as 2(c) is concerned, the respondent contends that there has been a set-off arising from that which is owing. It is clear from the papers that there is a dispute, a real and fundamental dispute between the parties relating to the liability for that and accordingly this set off as claimed by the respondent cannot operate. Therefore, the respondent really has no case against the first applicant in regard to 2(c) but once again the question of costs will arise which obviously I will deal with at a later stage.

In so far as the two interlocutory applications are concerned, these relate to orders granted on 18 June 2003 by my brother Schwartzman J and on 24- June 2003 by Wasserman AJ. There seems to be no real dispute between the parties that if the applicant was indeed successful in the application before me today, that the costs reserved should be awarded to the first applicant.

The first applicant is a voluntary association promoting the interests of industrial and organisational psychologists in South Africa. The respondent is also a voluntary association of psychologists in South Africa. It is the umbrella body of all voluntary associations of psychologists in South Africa.

The first applicant makes the following allegations in its founding affidavit:-

"In essence the first applicant's constitution predates the very existence of the respondent and has existed, as far as the Executive Committee of the first applicant can determine since 1 984. To this constitution minor cosmetic changes were made resulting in 'NOMV. The first applicant's constitution was therefore in existence when the first applicant participated in the formation of the respondent in 1994 and has remained unchallenged by the respondent until June 2002. The members of the first applicant all recognise the existing constitution of the first applicant. The first applicant held its annual general meeting for 2003 on 26th June this year, albeit only after obtaining certain declaratory and interdicting relief, on an urgent basis, against the respondent. The first applicant's annual general meeting was very well attended by its members, none of whom challenged the validity of the first applicant's constitution and all of whom accepted its validity."

And:-

"The first applicant has operated in terms of its present constitution sans cosmetic operations thereto since at least in 1984 as far as the present executive of the first applicant came to term. The first applicant was a powerful force in the creation of the respondent and became a founding 'division' of the respondent at its inception. The first applicant continues to operate under its constitution unchallenged and continued to do so until the respondent saw fit to challenge the autonomy of the first applicant, and the existence of its constitution in June 2002."

And:-

"There was no formal process in place by which the respondent would accept or reject a founding division's constitution. After all, the so-called 'founding divisions' pre-existed respondent and were the creators of respondent. Respondent did not exist until it was created by the societies who were, from respondent's inception, its founding divisions. Each society which became a founding division of the respondent merely presented their existing constitutions at the founding meeting of the respondent."

None of these allegations of the first applicant were disputed by the respondent. The first applicant, in its constitution, describes itself as an "division of the respondent". The respondent also regards the first applicant as a division. It says in its answering affidavit:-

"The first applicant has operated as a division of the respondent

since 1994".

The constitution of the first applicant describes its vision in paragraph 2 as -

"A fair and humane work situation to which all have an equal opportunity of access and within which all could perform according to their abilities, and develop to their full potential and can experience a high quality of work life". The mission of the first applicant is also set out. This consists

of comfortable words and generalised altruistic statements of intention which would cause no one any surprise in a constitution of this nature.

The legal status of the first applicant is defined in this constitution as follows:-

"The division is not one for gain, acting in its own right in legal proceedings, with the power to acquire, use and dispose of property, to acquire and control funds, to make payments in the form of salaries, honoraria, awards and donations and to perform all such acts as are consistent with its vision and mission and are derived from the promotion thereof. The division exists in all respects as a legal persona in its own right."

In paragraph 5.2(a) the rules relating to general membership are defined thus:-

"A person applies to the Secretariat of the Psychological Association in the first instance to become a member of the Psychological Society of South Africa on the prescribed form. If membership of the Psychological Association is accepted, then he/she automatically becomes a member of the Psychological Association's regional branch operating in the region where the person normally resides. He/she simultaneously also may apply to become a member of this division where such application is considered in accordance with the constitution of this division. The Psychological Association or the Executive Committee shall not be required to furnish reasons for refusal of membership."

In 5(2)(c} of the first applicant's constitution it is said:-

"All subscriptions shall be collected by the Secretariat of the Psychological Society of South Africa".

The Psychological Society of South African refers to the respondent. The respondent's constitution also provides that it shall have a

separate legal status and clause 4.1 thereof reads as follows:-

"The Society is not one for gain, acting in its own right in legal proceedings, with the power acquire, use and dispose of property, to acquire and to curtail funds, to make payments for salaries, honoria, awards and donations and to perform all such acts as are consistent with its principles and principal objects and are derived from the promotion thereof. The Society exists in all respects as a legal person in its own right."

It is not insignificant that these words defining the legal status of the

respondent repeat almost verbatim the words in the first applicant's

constitution.

In article 5.4.2 of the respondent's constitution membership, in so far as it relates to membership of divisions is set out as follows:-

"Membership of division(s) shall be determined by personal choice and in accordance with the domestic rules of the particular division(s)," Article 12(1) of the respondent's constitution provides:

"12(1) Members of the division consist of persons who are active in a particular area of interest and wish to develop such area of interest for the promotion of the principles and principal object of the society.

12(2) New members of a division shall be members of the Society except in the case of persons who wish to join a division of their choice with full divisional benefits for a limited, prescribed period of one year at the end of which they have to join the Society or terminate their divisional membership. A levy shall be payable to the Society from such divisional membership." Article 1 2.6.2 of respondent's constitution reads as follows:-"Prior to the establishment of a division, its constitution, approved by the 50 founder members, shall be submitted to Council; approval shall not be withheld unless the constitution is in conflict with the Society's constitution", (my emphasis) Article 12.8 of the respondent's constitution dealing with management and finances reads as follows. -

"12.8.1 Divisions conduct their own affairs in conformity with their own constitution and domestic rules, and retain their income generated by activities such as seminars and workshops.

12.8.2 Divisional membership fees are collected by the Society, which may charge an administration fee which shall be set by council on an annual basis." "The Society" refers to the respondent. The respondent's case essentially is that the applicant have not made out a case at all in so far as relief which they seek. Mr Bava, who appears for the respondent, submits that the applicant have not shown -

(1) by way of fact or otherwise that the constitution upon which intend relying has ever been adopted by members of the first applicant since 1994;

(2) that the constitution on which they rely was ever applied since 1994;

(3) that the description of the first applicant as "a Division of the Psychological Society of South Africa" together with all the other descriptions of the first applicant as a division of the respondent were included erroneously;

(4) That those remaining portions of the constitution, apart from the reference to "division" constitutes a valid constitution if read by themselves.

Given the undisputed allegations of the applicant concerning its history and the history of the establishment and foundation of the respondent, it is obvious that the requirement that the constitution be submitted to council in terms of article 12.6.2 of the respondent's constitution, would apply to persons who wish to establish divisions after the foundation of the respondent. In any event, it is clear from a perusal of the constitution of the first applicant that it is not in conflict with that of the respondent. In other words, it seems to me to be clear that the laissez-faire constitution of the respondent does not permit it to withhold approval of the constitution of the first applicant. It is clear from the answering affidavit that the respondent has attempted to prescribe the form of constitution which it believes the first applicant should adopt. Indeed, it is clear from the answering affidavit of the respondent that it has taken considerable umbrage against the first applicant for failing to comply with its demands that the first applicant's constitution should conform to a format prescribed by it. This the respondent is clearly not entitled to require of the first applicant.

The description of the first applicant in its constitution of itself as a division is precisely that - a description - it does not mean that a substantively different body was created after the foundation of respondent in 1 994 as was submitted by Mr Bava.

Much has been made in the respondent's answering affidavit concerning the question of the liability for value added tax ("VAT"). Whether or not the first applicant is itself liable to pay VAT or whether it should do so through the respondent is in my view a red herring. It certainly does not seem to me that the first applicant has failed to come to court with clean hands or that the first applicant is in any way seeking the assistance of the court in perpetrating a fraud, f would wish to add that the whole question of liability for tax by a public benefit organisation is a complex one and fraught with difficulties. It is hardly surprising that there are different opinions as to how best and how properly VAT should be paid with regard to the activities of the first applicant.

The respondent, in its answering affidavit which extends for some 130 pages, has raised numerous irrelevant issues. This case, after all, is concerned with the interpretation of constitutions and is not concerned with the respective merits of individuals who may be on either side. The respondent has made a number of allegations against persons who depose to affidavits on behalf of the first applicant which are scandalous and vexatious. I refer to the accusations that are made against the persons Odendaal, Wortley and Veldsman. It is lamentable that professional persons should make scurrilous allegations against others in the same profession, especially when these are entirely irrelevant to the issues that are really in dispute between the parties.

Mr Joubert, who appears for the first applicant, asked that I make a punitive order directing that the respondent pay the applicants' costs on an attorney and client scale as a mark of disapproval of the respondent's conduct in:-

(i) raising numerous irrelevant issues in the answering affidavit;

(ii) making scandalous vexatious allegations against persons who had deposed to the founding affidavit of the applicants; and

(iii) showing a serious breach of professional courtesy and ethics.
I have been persuaded that taking the cumulative weight of all these factors into account, that it would be appropriate to make such an order.

Mr Joubert has also asked that I award the costs of two counsel in respect of the relief sought before me today (other than the reserved costs in the two interlocutory applications). The matter is clearly one of considerable importance to the applicants and, in particular, the first applicant and I do not think that the first applicant can be criticised for being overly cautious in engaging the services of two counsel. Moreover, it is clear that there were important professional reputations which needed to be protected and this also, in my view, would justify the employment of two counsel.

In my view the applicants are entitled to the relief which they seek.

1. An order is made in terms of prayers 1, 2 and 5 of the notice of motion dated 9 July 2003.

2. The respondent is to pay the applicants' costs of this application on an attorney and client scale, which costs are to include the costs occasioned by the employment of two counsel.

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