NOT REPORTABLE

CASE NUMBER: 48712/08

 v

Judgment: MabuseJ
JUDGMENT

1. This is an application in terms of section 13(1) of the Communal Property Association Act 28 of 1996 ("The CPA Act") to place the First Respondent under the administration of the Applicant and furthermore to remove the incumbent office bearers of the First Respondent, that is, the Second to the Tenth Respondents from office. The Application is opposed by the Respondents.

2. The Applicant is The Regional Land Claims Commissioner appointed as such by the Minister of Agriculture and Land Affairs in terms of the provisions of section 4 of the Land Restitution of Land Rights Act 22 of 1994 ("The Restitution Act") of 9 Bailey Street, Arcadia, Pretoria. The Applicant alleges that the Director General of Land Affairs, who is the relevant authority empowered by the provisions of the CPA Act to place the First Respondent under administration, has delegated his powers to place the First Respondent under administration to herself in terms of section 15 of the CPA Act. In support of this allegation that the Director General has delegated the necessary authority and powers in terms of section 15 of the Act, the Applicant relies on a document she has attached to the application marked ISSI. I will deal with this document later.

3. The First Respondent is Rama Communal Property Association (Rama CPA), a Communal Property Association which is registered in terms of Section 8 of the CPA Act which has its offices at Eckraal Quarries 310, Farm Wildebeeshoek, Rosslyn, Pretoria. The Second Respondent is Andy Nthite ("Andy"), an adult male person and the current chairperson of the First Respondent Committee of the same address as the First Respondent. The Third Respondent is an adult male person and the current vice-chairperson of the First Respondent Committee of the same address as the First Respondent. The Fourth Respondent is an adult male person and current secretary of the First Respondent who also shares the same address as the preceding Respondents. The Fifth Respondent is an adult male person and the current vice secretary of the First Respondent. He also shares the same address as the preceding Respondents. The Sixth Respondent is an adult male person and the treasurer of the First Respondent. The Seventh Respondent is an adult male person and an additional member of the First Respondent. The Eighth Respondent is an adult male person and also an additional member of the First Respondent. The Ninth Respondent is an adult male person and additional member of the First Respondent. The last and the Tenth Respondent is an adult female person and also an additional member of the First Respondents. All the Respondents share the same physical address.

4. The Applicant contends that the Director General of the Department of Land Affairs ("DLA"), has delegated to her his powers in terms of section 13 of the CPA Act which provides that a Director General can bring an application to place a Communal Property Association (CPA) under his administration where the CPA, because of insolvency or maladministration or for any other cause is unwilling or unable to pay its debt or is unable to meet its obligations or where it would otherwise be just and equitable in the circumstances. The basis on which the Applicant seeks to bring an application in terms of the aforementioned section is clear from the following background.

5. In 1998 the claimants, presumably some members of the Rama Community, lodged claims in terms of the Restitution Act on the Remaining Extent of Kafferskraal 308 JR and Portion 2 of Wildebeesthoek 308 JR. These claims were adjudged to be valid and accordingly were published in the Government Gazette. For that purpose a CPA was formed and registered as the Rama CPA. The Rama CPA was formed for the purpose of a holding land on behalf of the claimants. A section 42D submission was prepared and was approved by the Minister of Agriculture and Land Affairs on 24 March 2001. In terms of the section 42D memorandum, the State acquired the claimed land for the sum of R13 811 000,00.

6. Rama CPA started experiencing problems when its elected chairperson, one Ramathyane Poo ("Poo") was voted out of the Rama CPA Committee after a report from the auditors had indicated that certain transactions were executed without supporting documents. A group of non-beneficiaries constituted themselves into the Se-Boikhutso after they had alleged that they were part of the original buyers of Rama. They presented a memorandum to the Applicant's office in which they had requested the Applicant to remove the Government Official who was working on the project. Having gone through the memorandum the Applicant requested her legal unit to respond to it. The First Respondent's Committee brought an urgent interdict to stop the Se-Boikhutso group from holding meetings on the restored land.

7. Another interdict was brought by a group led by the said Poo who claimed to represent the original buyers of Rama and who furthermore claimed that he did not recognise the existence of the Rama CPA Committee. This interdict was dismissed with costs.

8. The Rama CPA Committee members started to fight among themselves when the chairperson requested the removal of the Treasurer for failing to attend executive meetings on three occasions without any written apology. Other members of the Rama CPA Committee objected to the chairperson's request for the removal of the Treasurer and decided to side with the Treasurer. The Treasurer together with four other Rama CPA Committee members approached the Absa Bank in Rosslyn and caused removal of the chairperson as one of the signatories to the bank account.

10. The Commission on Restitution of Land Rights acted in the spirit of annexure ISS5 by referring the dispute within the Rama CPA to Tokiso Dispute Settlement Organisation. The mediation was not successful owing to the fact that affected parties failed to identify the issues in dispute and did not agree on the mediation process.

11. The mediation process was also strangled by the allegations that the said Poo was not a bona fide beneficiary. This issue sidetracked the mediation process. The Applicant's office investigated the status of the said Poo and came to the conclusion that the claims that Poo was not a bona fide beneficiary had no merit and furthermore he was indeed a bona fide member of Rama Community. The Rama CPA was requested to consider mediation in the light of the fact that the status of the said Poo had been determined.

12. During June 2006 the Applicant's office enlisted the services of business planners Bathupi Business Enterprises (Bathupi) which identified the financial problems facing the Rama CPA such as conflict of interests relating to the award of projects to themselves, the CPA Committee members holding dual roles and lack of financial management expertise, failing to have an operation office after a period of eight years of existence and furthermore failure to account to the community in respect of the running of the project.

Bathupi declined to attend the meeting after noting that there are conflicts with the CPA Executive Committee and that it was not clear that what the status of the working group was. Bathupi also advised the said Modisele and Ntsoko that they were employed by the Department of Land Affairs and for that reason could not hold any meeting with them.

14. On 8 July 2006 the Rama CPA held a disciplinary enquiry into the conduct of one Hans Carl Ntsoko who had been accused of fraudulently using the Rama CPA name to raise a loan from Cuyvers, inciting members of the Rama CPA to threaten committee members, acting on his own on matters affecting the interest of the entire Committee, holding unscheduled meetings with the members of the Rama CPA. At the conclusion of the inquiry, the disciplinary proceeding the Committee resolved to remove the said Ntsoko as chairperson and a member of the Rama CPA Committee. On 10 July 2006 the Rama CPA Committee wrote a letter to the Applicant informing her about the resolution they had taken to remove the said Ntsoko from Rama CPA Committee.

15. Before the said Ntsoko could be removed as the chairperson of the Rama CPA, he wrote a letter to the Director General in which he stated that the Rama CPA was operating outside the parameters of their Constitution and appealed to the Director General to intervene, particularly on the finances of the Rama CPA, lack of capacity on financial matters and official to implement what they were taught on financial matters and conflict of interest relating to awarding projects to themselves at the expense of the broader committee and violating the provisions of the Rama CPA Constitution. The letter furthermore implored the office of the Director General to intervene.

16. On 13 September 2006 Ngubane and company audited the books of the Rama CPA for the year ending 31 May 2003, 2004 and 2005. In their report they found, and reported, that an amount of R10 050,00 was spent on salaries, R25 000,00 on bonuses, R73 353,00 in respect of security, R75 00,00 in respect of rent, R27 500,00 in respect of the meetings and R48 635,00 in respect of trade expense. These amounts were regarded as being related to expenses that did not relate to business of the Rama CPA and were correctly classified as fruitless and wasteful expenditures.

17. This audit which was conducted in respect of the year ending May 2005 found many instances with qualified audit on aspects such as land, building and machinery which were not included in the financial statements, no existence and rights of property stated at R92 882 and that accounting records were not properly maintained. On 22 September 2006 a lease agreement between Rama CPA and Eckraal Quarries (Pty) Ltd was concluded in terms of which the restored land was leased back to Eckraal for an amount of R675 000,00. The current Rama CPA is using the premises at Eckraal Quarries as the operating office of the First Respondent. This constitutes an irregularity and conflicts of interest. The affairs of the First Respondent should not be run from the premises of the company or entity which has benefited from the lease agreement. This relationship compromises the interest of Rama CPA Committee whenever the lease agreement comes up for renewal.

18. According to the Applicant the Rama CPA Committee would not be objective if a choice had to be made between Eckraal Quarries and other competitors for the lease of the Quarries premises in the future. The Rama CPA Committee has also irregularly raised a loan in the sum of R500 000,00 with Eckraal Quarries which has been invested for the benefit of the community members and their families. The reason of the loan with Eckraal Quarries is also an instance of conflict of interests arising from the awarding of the lease agreement to Eckraal Quarries by the Committee. The CPA Committee ought to have approached the commercial banks or financial institutions if it required bridging finances to run the affairs of the First Respondent. This process would have entailed that the Committee constituting the First Respondent would have been informed and consulted to ensure transparency in the financial affairs of the Respondents.

20. On 15 October 2007 Rama CPA Committee wrote a letter to the Department of Land Affairs (DLA) to inform the DLA that a resolution had been taken to inform the Applicant that one Simon Poo was neither born nor bred at Rama; that the Applicant's office should resist from holding meetings with him regarding Rama activities; that the said Poo was not recognised by the Traditional Council as their spokesperson; that Poo is the stumbling block regarding the settlement of problems affecting the Rama Community; that he did not understand the capacity in which he was attending meetings of the Rama CPA, and that they required clarification regarding the 537 hectares documents and other issues raised therein.

21. On 9 March 2008 individuals calling themselves Rama Communal Property Association Concerned Group wrote a memorandum to the Applicant's office in which they stated that a loan amount in the sum of R500 000,00 from Eckraal Quarries was invested in Terminus Restaurant for some Rama CPA Committee members against CPA Constitutional guidelines; that all jobs done during 2006/7 went to Rama CPA members or their families; and that Rama CPA Committee has failed to formulate and adhere to systems and procedures such as tender policies and guidelines for hiring or employment of staff (procurement policies). Rama CPA had no management, knowhow or expertise to formulate and implement a settlement program, huge amounts being spent on undelivered promises, the 2006/7 financial statement showing quite alarming proportions of financial investment by the Committee and that expenditure of 2006 had been done without a mandate from the Rama CPA.

23. On 12 March 2008 the First Respondent wrote a letter to one Bradley Makipi and one Deon Theron of the Applicant's office. This letter contained complaints which were raised in certain annexures attached to the application. In the same letter they called for the current Rama CPA Committee to be dissolved and for a forensic audit to be launched. They had styled themselves as the interim committee. A similar letter was written on 20 March 2008 and is also attached to the Applicant's papers. On 10 July 2008 the Director General wrote a letter to the Applicant advising that the matter relating to Rama CPA problems should be brought to a conclusion. He indicated that he would proceed to invoke the powers vested in him in terms of the provisions of section 13 of the CPA and that he would request the Applicant's assistance in that regard.

25. The Khuduthamaga proposed that the Rama CPA Committee should stop calling mass meetings; using money and all activities; all groups should unite and form a committee to deal with problems; the CPA must include the Khuduthamaga group in decision making process; vote for a new Committee Representative of the concerning group and that the Director General should take over the administration of Rama CPA.

In paragraph 4.1 thereof states that the office of the DG approves a takeover of administration of Rama CPA through relevant court procedures in terms of section 13 of the Act; paragraph 4.2 thereof states that the DG further delegates such authority for the purpose of the Court application in terms of section 13 to the Regional Land Claims Commissioner in terms of section 15(1) (a)-(b) of the Act; and paragraph 4.3 thereof states that the DG expresses in writing his preparedness to intervene in the form of a concept letter, on letterheads he had attached to the memorandum; Deputy-Director, Mbuso Majosi supported the recommendations by affixing his signatures on the memorandum on 10 July 2008. On this basis the Applicant contends that he has been properly delegated by the Director General in terms of section 15 of the Act.

32. Section 13 of the Act states as follows:

37. The Applicant has also not complied with the further requirements set out in the said section 15 of the CPA Act. Counsel for the Respondents argued, and I fully agree with him, that the Applicant has not satisfied the Court that she has been properly delegated to launch this application. He developed his argument furthermore and submitted that the Applicant could not rely on the approval or the recommendation of the Director General as contained in the document referred to as annexure ISS1. I made the following order on 28 July 2010:

P M MABUSE 
JUDGE OF THE HIGH COURT