Shixwameni and Others v Congress of Democrats and Others (A 229/2007) [2008] NAHC 76 (21 July 2008);

Group

Full judgment
CASE NO

REPORTABLE
CASE NO.: A 229/2007
SUMMARY


IGNATIUS SHIXWAMENI & 6 OTHERS v THE CONGRESS OF DEMOCRATS & 5 OTHERS

Muller, J

21 July 2008

Background
ϖ         An extra-ordinary congress of the COD was held 04-06 May 2007 to elect office bearers. After the previous President, 2nd Respondent, was re-elected the Applicants walked out. In an attempt to reach an amicable solution on a proposal of the 2nd Respondent, an independent body, the audit panel was appointed by the Applicants and Respondents to investigate alleged irregularities at the Keetmanshoop congress and make decisions in terms of the terms of reference of that agreement. Both parties signed the agreement and expressly stated that they will abide by the decisions of the audit panel. The audit panel’s report indicated that there were irregularities. The 2nd to 6th Respondents rejected the audit panel’s report. The Applicants were also expelled as members of the CoD.

Urgent Application: 07 September 2007
ϖ         The Applicants brought an application on notice of motion on 07 September 2007.
ϖ         The parties agreed and the Court ordered that the matter be postponed to 28 January 2008. Deadlines were set for the filing of affidavits, heads of argument and for some of the Applicants to retain their seats in the National Assembly and the City Council of Windhoek.
ϖ         2nd Respondent deposed to a lengthy answering affidavit (333 pages with annexures), but no replying affidavits or heads of arguments were filed.

28 January 2008
ϖ         The parties agreed to a further postponement until 19 May 2008 for the Applicants to file replying affidavits.

19 May 2008
ϖ         Still no replying affidavits were filed by the Applicants and they applied for a further postponement
ϖ         Held: After hearing arguments the Court dismissed the application for postponement with costs and ordered the main application to be argued the next day.

20 May 2008
ϖ         The main application was argued with the Applicants abandoning prayer 7 of their notice of motion.
ϖ         Except for the expulsion of the Applicants as members of the CoD subsequent to the report of the audit panel being rejected by the 2nd – 6th Respondents, the only issue that remained was the enforcement of the decisions of the audit panel or not.

Issues to be determined in the Court’s judgment:
The legal effect of disputed issues
ϖ         Held: Since the abandonment of prayer 7 of the notice of motion there remained no disputed factual issues. It was common cause that the audit panel, on the proposal of 2nd Respondent, was appointed with its mandate formulated in the terms of reference. It was also common cause who signed it and that the parties agreed to abide by it. Consequently, the effect of cases like Stellenbosch Farmers Winery v Stellenvale Winery 1957 (4) 234(T) and Plascon-Evans Paints v van Riebeeck Paints 1984(3) 623 (A) Erica Beukes and Another v SWA Building Society and Others, an unreported judgment in Case No (P) A 223/2005, and Clear Channel Independent Advertising Namibia (Pty) Ltd and Another v TransNamib Holdings Ltd and 2 Others 2006(1) NR 121 (HC) are not applicable.

Second Respondent’s answering affidavit
ϖ         Held: The 2nd Respondent’s answering affidavit recording only of the historical facts prior to, during and after the Keetmanshoop congress, as well as the basis of its opposition, did not comply with the requirements of an answering affidavit in that it did not deal paragraph by paragraph of the allegations made by the 1st Applicant. (Erasmus - Superior Courts Practice, B1/144, Shelco Fifty One (Pty) Ltd v The Minister of Finance and Another, an unreported judgment of this Court, Case No. (P) A 06/2007).

The Respondents attack on the agreement in respect of the audit panel and their reasons for rejecting the report of the audit panel.
1.       No authority
ϖ         Held: That the signatories were authorised to sign the agreement or alternatively, that the agreement was signed by members of the National Executive Committee (NEC) who did not need specific authority to perform their duties between congresses in terms of the CoD constitution.
ϖ         Held: General contractual principles are applicable and the signatures of the Applicants and 2nd to 6th Respondents constitute an intention by to be bound by the agreement.
ϖ         Held: In any event are the signatories to the agreement are bound to it in their individual capacities.

2.       Decisions of the audit panel
ϖ         Held: The parties entered into an agreement in which they left the investigations and decisions to a third party, the audit panel; are bound by their agreement to accept the decisions of the audit panel and on general contractual principles cannot reject it.

ϖ         Held: Apart from the effect of general contractual principles, the parties expressly agreed to be bound by the decisions of the audit panel.
ϖ        
ϖ         Held: The 2nd – 6th Respondents repudiated their agreement, which repudiation was not accepted by the Applicants.

ϖ         Held: There are no grounds on which the agreement cannot be enforced. The negotiations and performance of the agreement have been bona fide and were not against public interest.

ϖ         Held: The Applicants did not breach the agreement and the Respondents’ repudiation thereof is against the alleged conduct of the audit panel. The Respondents cannot succeed in their attack against the audit panel decisions, because the latter is not a party to these proceedings and no relief is claimed against it. This is despite the fact that the Respondents had foreseen that they should have approached the Court to review the decisions of the audit panel and to join it as a party.

ϖ         Held: It is well known in our law that parties may appoint a third party, such as a valuer, receiver, arbitrator, arbiter, mediator, umpire or referee to take a decision that the parties to the agreement cannot do. If they do that, the parties are bound by the decisions of the third party, in this case the audit panel.

ϖ         Held: By entering into this agreement the parties acted responsibly and agreed to be bound by the decision of the audit panel.

Non-joinder
ϖ         Held: The point in limine by the Respondents that the NEC should be joined, was rejected by the Court because the CoD was joined as 1st Respondent.


Expulsion of the Applicants
ϖ         Held: The expulsion of the Applicants was set aside on two grounds. Firstly the argument advanced by the Respondents that the audi principle can in certain circumstances be complied with afterwards, namely during an appeal, was rejected because there were no circumstances that allow such flexibility as existed in Semenya and Others v CCMA & Others 2006 27IJL 1627 LAC and Diko and Others v Nobongoza & Others 2006 (3) SA 126 (C). It is also distinguishable to cases quoted by the Respondents where persons were expelled as members of The Independents Democrats, a political party in South Africa. In this instance the next congress of the CoD will only be held in 2009, with the effect that the appeals of the Applicants in terms of CoD constitution can only be heard then, while in The Independents Democrats, cases the appeal would have been held within a week. In this matter it would be unfair to have the Applicants wait for so long and the exception to the audi principle for a hearing afterwards is not applicable because it would defeat the whole purpose of the audi principle. Secondly, on the finding that the parties are bound to accept the decisions of the audit panel, the Applciants could not have been expelled and such conduct was ultra vires the terms of the agreement.

Costs
ϖ         The circumstances and history of this application determined that the costs should not follow the result. Consequently, the Respondents were ordered to pay only 50% of the Applicants costs.

Order
ϖ         Orders in terms of the notice of motion, with certain practical aptations were granted.



CASE NO.: A 229/2007
IN THE HIGH COURT OF NAMIBIA


In the matter between:

IGNATIUS SHIXWAMENI                                                   1ST APPLICANT

NORA SCHIMMING-CHASE                                         2ND APPLICANT

REINHARD GERTZE                                               3RD APPLICANT

PAULINE DEMPERS                                               4TH APPLICANT

MOSES KATJIUONGUA                                                     5TH APPLICANT

ELMA JANE DIENDA                                                      6TH APPLICANT

HERBERT SCHULTZ                                               7TH APPLICANT


and


THE CONGRESS OF DEMOCRATS                                   1ST RESPONDENT

BENJAMIN ULENGA                                               2ND RESPONDENT

TSUDAO GURIRAB                                                         3RD RESPONDENT

ROSA NAMISES                                                           4TH RESPONDENT

NATJIRIKASORUA TJIRERA                                       5TH RESPONDENT

INNOCENTIA MOKOMELE                                          6TH RESPONDENT


CORAM:            MULLER, J


Heard on:                 07 September 2007; 28 January 2008; 19 - 20 May 2008

Delivered on              17 July 2008
JUDGMENT
MULLER, J.: [1] Seven applicants launched an application for urgent relief against the six respondents of which the first respondent is the Congress of Democrats (hereinafter referred to as the “CoD”), a political party registered in of terms of s 39 of the Electoral Act No 24 of 1992. The CoD has a constitution to which reference will be made in this judgment. The CoD’s highest body is the national executive committee (“NEC”).

[2]      To understand the situation regarding the application by the applicants, it is necessary to briefly refer to the background of holding a congress at Keetmanshoop during 04 - 06 May 2007, which is the focus point of the dispute between the applicants and the respondents. In terms of the Article 13 of the CoD constitution the NEC resolved to hold an extra-ordinary congress. At that stage the second respondent was the party leader of the CoD, which he was since it has been founded in 1999, namely for a period of eight years. The CoD is also the main opposition party in the National Assembly of Namibia. After the founding congress of the CoD in 1999, a national congress was held in 2000. In 2001 an extra-ordinary congress adopted an amended constitution and elected office bearers. During July 2004 the constitution was again amended to provide for national congresses to be held only every five years. The next national congress will be held in 2009. The main reason for having a national congress of the party every five years was due to the financial implication involved in holding such a congress and the immense organisational task involved in respect thereof. In July 2004 the members of NEC were also elected for five years to coincide with national congresses.
[3]      The first applicant describes himself as a former Member of Parliament, representing the CoD. It is common cause that the first applicant resigned from the party, since the launching of this application and the founding affidavit deposed to by him, but that he has not withdrawn as an applicant in this matter. The second, third and sixth applicants served as CoD members of Parliament at the time when the application was launched. In terms of the order granted by this Court on 07 September 2007, to which reference will be made later herein, the second, third and sixth applicants remained members of the National Assembly and the seventh applicant a member of the Council of the Municipality of Windhoek. With the exception of the sixth applicant, it is common cause that all the applicants served on the NEC until the extra-ordinary congress of 04 – 06 May 2007, hereinafter referred to as the “Keetmanshoop congress”. Members of the NEC were also elected. All the applicants and respondents were members of the CoD when the application was launched. The third applicant made an affidavit which will be referred to later herein, but he subsequently passed on. Save for the second respondent, who was the president of the CoD until the Keetmanshoop congress, the third respondent served as national chairperson, the fourth respondent as deputy-secretary-general and sixth respondent as a member of the NEC. The fifth respondent held no leadership position in the CoD prior to the Keetmanshoop congress.

[4]      On 23 August 2007 the applicants applied by way of notice of motion for urgent relief, which application was set down to be heard on 07 September 2007. The respondents were required to deliver their notices of intention to oppose the application the next day and to deliver their answering affidavits not later than 04 September 2007. In the notice of motion the following relief was sought:

1.       Condoning the no-compliance with the forms and service provided for in the Rules of this Honourable Court in hearing this application on an urgent basis, as is envisaged in Rule 6(12) of the High Court Rules.
2.       Granting leave to the applicants to proceed with the application by making use of facsimile copies of some of the original affidavits filed in support hereof, subject thereto that the original affidavits are filed with the Registrar within 3 (three) days of the date of the Order in this matter.
3.       Declaring that the decision taken by the first respondent on 11 August 2007, purportedly in terms of Article 5 of the first respondent’s Constitution, to expel the applicants from their positions as members of the first respondent, is in violation of the provisions of the first respondent’s Constitution and the common law, and null and void.
4.       Ordering that the first respondent restore the applicants to their positions as members of the first respondent.
5.       Declaring the agreement concluded by the applicants and the respondents on 25 June 2007 (annexure “IS 5” to the founding papers), and particularly clause 7 thereof, to be of force and effect, but clause 7 only to the extent that such clause provides that-
Should the panel find that the alleged irregularities at the extra-ordinary congress warrant a nullification of the proceedings and election result the parties agree to such nullification and the newly elected leadership shall step down.”
6.       In the alternative to paragraph 5 above, declaring that the agreement concluded by the applicants and the respondents on 25 June 2007 (annexure “IS5” to the founding papers), and particualry the whole of clause 7 thereof, to be of force and effect.
7.       Declaring the proceedings of the first respondent’s extra-ordinary congress held at Keetmanshoop 04 to 06 May 2007, and the election of all office bearers of fist respondent at such congress, including the second to sixth respondents, to be null and void.
8.       ordering that the first respondent, acting in terms of Article 12, alternatively Article 13 of its Constitution, hold a National Congress or Extra-Ordinary Congress within 3 months of the date of this Order, as which new elections for office-bearers of first respondent shall take place.
9.       Ordering that the applicants and the second to sixth respondents nominate one person each to serve as members on an Electoral Commission of first respondent, such Commission to be chaired by an independent person nominated and appointed jointly by such member, and failing agreement between such members on any such appointment, to be appointed by the President of the Society of Advocates, to oversee the National Congress of Extra-Ordinary Congress referred to in paragraph 8 supra.
10.      Costs of the application to be paid by the second to sixth respondents jointly and severally, the one paying the others to be absolved, alternatively, by the respondents jointly and severally, the one paying the others to be absolved.
11.      Such further and/or alternative relief as this Honourable Court may deem fit.”

[5]      On same day, namely 23 August 2007, this notice of motion was served on all six respondents. The respondents opposed the application and the second respondent filed a preliminary affidavit on 07 September 2007. In that affidavit the second respondent denied that the application was urgent and because of the short period provided for it, he did not deal with the merits of the application at all. The second respondent referred to an attempt to settle the disputes between him and the applicants and set out reasons why it was impossible to reply to the allegations of the applicants. The second respondent also dealt with the relief that the applicants sought regarding expulsion of the applicants from the CoD, the decision of the audit panel and relief craved in respect of the election of the respondents at the Keetmanshoop Congress. In conclusion, the second respondent submitted that the application should be dismissed because of lack of urgency or be postponed in order to enable the respondents to file further papers.

[6]      The applicants opposed the suggestion of postponement and filed a lengthy affidavit in that regard.
[7]      At the hearing of 07 September 2007 I indicated that, after reading the papers and subject to being convinced otherwise, my prima facie view is that i.a. in the light of the short time allowed by applicants for the respondents to answer compared to the applicants who took rather long to launch the application, the applicants failed to make out a case of urgency. The parties decided to ask for an opportunity to discuss the matter and when the hearing resumed, a draft order was submitted by agreement. I accepted the arrangements contained therein and made that agreement an order of court. That order reads:

Having heard Adv. Corbett, Counsel for the Applicants and Adv. Geier, Counsel for the Respondents and having read the papers and by agreement between the parties:

         IT IS ORDERED

1.       First Respondent will produce and file the record of the decision (taken on 11 August 2007 in terms of Article 5 of First Respondent’s Constitution), to expel Applicants from their positions as members of the First Respondent, which decisions the Respondents wish to have reviewed and set aside, with the Registrar of this honourable Court and with the Applicants’ legal practitioners of record, by not later than Friday, 21 September 2007;
2.       Applicants will supplement their founding papers by not later than Friday, 28 September 2007;
3.       Respondents will file their answering affidavits herein by not later than Friday, 12 October 2007;
4.       To the extent that the Respondents may choose to institute a counter application for the review and setting aside of the decision(s) taken by the Independent Audit Panel referred to in Applicants’ Notice of Motion, same will be filed and served simultaneously with the answering affidavits by not later than Friday, 12 October 2007;
5.       Should it be deemed necessary to join the Independent Audit Panel, referred to above, to this application, such Panel will be required to, in terms of the Notice of Motion to be produced and filed in the counter application for review referred to above, file the record of their decision(s) by not later than Friday, 19 October 2007. Respondents (as Applicants in such application) will be afforded the opportunity to supplement their founding affidavits filed in such counter application within seven (7) days after having received such record and not later than Friday, 26 October 2007;
6.       Applicants will file their replying affidavits in the main application, and their answering affidavits in the counter application (if any) by not later than Friday, 09 November 2007;
7.       Respondents will file their replying affidavits in the counter application (if any) by not later than Friday, 23 November 2007;
8.       Applicants’ Heads of Argument in the main application will be filed by no later than Friday, 23 November 2007;
9.       Respondents’ Heads of Argument in their counter application (if any) will be filed by no later than Friday, 30 November 2007;
10.      Respondents’ Heads of Argument in the main application will be filed by no later than Friday, 07 December 2007;
11.      Applicants will file their Heads of Argument in the counter application (if any) by nor later than Friday, 14 December 2007;
12.      The matter has been set down for argument Monday, 28 January 2008 and Tuesday, 29 January 2008, being a date specifically arranged with the Registrar of this Honourable Court, and being a date agreed upon by all the parties.
13.      Until a final order is handed down in this matter, the Respondents shall take no steps to replace second, third and sixth applicants as members of the National Assembly and seventh applicant as a member of the Council of the Municipality of Windhoek and the Respondents shall not prevent these applicants from participating in the activities of the respective legislative assemblies and performing their functions and fulfilling their duties as members of those assemblies.
14.      The costs of the proceedings on 07 September 2007 will stand over for later determination.”

[8]      The application was set down for hearing on 28 and 29 January 2008.

[9]      In the meantime the applicants called for the record to be dispatched to the Registrar in terms of Rule 53(3), which was done. The first applicant filed a supplementary founding affidavit in terms of Rule 53(4). The respondents were also required to make discovery in terms Rule 35(3) and (6) and the respondents caused a subpoena duces tecum to be served on the third applicant (Gertze) in which he was required to produce certain documents and video tapes allegedly taken during the Keetmanshoop congress. The third applicant later replied by affidavit that he objects to the production of the documents required on certain specified grounds and, in respect of the video recordings required, replied that he only had one video cassette, which is at his legal practitioner’s office. As mentioned, the third respondent subsequently passed on.

[10]     On 14 December 2007, two months and two days after the respondents were supposed to file their answering affidavits, the first respondent filed a lengthy answering affidavit with annexures thereto, consisting of 333 pages. This affidavit did not deal with the paragraphs of the first applicant’s founding affidavit, but extensively recorded what had occurred prior to the first respondent’s Keetmanshoop Congress; what occurred during that congress, including registration and accreditation of delegates, voting and election of office bearers; what happened subsequent to the congress, including the appointment, mandate and acceptance of the decisions of the audit panel; as well as the reasons why second to sixth respondents rejected the decisions of the audit panel. The respondents also issued subpoenaes duces tecum in respect of three other persons.

[11]     The applicants failed to file replying affidavits on the date it undertook to do it and ordered by the Court, or at any time since receiving the answering affidavit of second respondent. When the hearing was supposed to proceed on 28 January 2008, there were no replying affidavits by the applicants, nor were any heads of argument filed. It was obvious that the matter could not proceed and the parties agreed to the following arrangements which I (reluctantantly) made an order of Court. That order of 28 January 2008 provided:

Having heard Mr Corbett, Counsel for the Applicants and Mr Erasmus, Counsel for the Respondents and having read the documents filed of record and by agreement between the parties:

IT IS ORDERED

1.       That the Applicants file their replying affidavits herein by not later than Friday, 22 February 2008.
2.       That the Applicants file an index of the pleadings, with pagination thereof, in this matter and the parties shall file their respective heads of argument in terms of the Rules of this Honourable Court, as supplemented by the Consolidated Practice Directions issued in terms thereof.
3.       That prayer 13 of the order handed down in this matter on 07 September 2007 shall be extended until a final order has been handed down in this matter.
4.       That the matter is hereby postponed to Monday, 19 May 2008 and Tuesday, 20 May 2008 for argument.
5.       That the costs of the proceedings on 07 September 2007 and 28 January 2008 stand over for later determination.”

[12]     During the course of February to March 2008 several confirmatory affidavits were filed in respect of the second respondent’s answering affidavit.

[13]     Lengthy heads of arguments and supplementary heads of argument (notes) were filed on behalf of the respondents.

[14]     Still no replying affidavits by the applicants had been filed when the matter was called on 19 May 2008. The applicants applied for a postponement to enable them to file replying affidavits and advanced several grounds for such postponement, including the unavailability counsel, firstly because of financial reasons and thereafter for family reasons. The respondents opposed this application for postponement. Mr Oosthuizen represented the applicants in respect of this postponement and Mr Nel appeared on behalf of the respondents. After hearing arguments in respect of the application for postponement, I refused that application and made the following order:

Having heard Adv. Oosthuizen, Counsel for the Applicants and Adv. Nel, Counsel for the Respondents and having read the Notice of Motion and other documents filed of record:

IT IS ORDERED

1.       That the application for a postponement is hereby dismissed.
2.       That the Applicants pay the wasted costs of this application jointly and severally.”

[15]     As a result of this order the applicants had to commence with their case. Because Mr Oosthuizen was only briefed to appear in respect of the application of postponement, the Court granted him an opportunity to consult with the applicants in order to receive instructions as to the way forward. The Court made it clear that this matter that had been set down for two days and would proceed the next day whether there was appearance for the applicants by legal counsel, or not and that failure to instruct counsel would not cause a forced postponement.

[16]     Mr Oosthuizen appeared the next day, 20 May 2008, and informed the Court that he was instructed to represent the applicants in the application and to commence with the submissions on their behalf. Refusal to postpone the matter meant that the Court only had the founding and answering affidavits before it. Mr Oosthuizen was of course faced with principle emanating from and confirmed by the cases of Stellenbosch Farmers Winery v Stellenvale Winery 1957 (4) 234(T) and Plascon-Evans Paints v van Riebeeck Paints 1984(3) 623 (A); as well as several decisions of this Court in respect of disputed issues, namely Erica Beukes and Another v SWA Building Society and Others, an unreported judgment of this Court Case No (P) A 223/2005, delivered on 07 March 2006, p 27-32; and Clear Channel Independent Advertising Namibia (Pty) Ltd and Another v TransNamib Holdings Ltd and 2 Others 2006(1) NR 121 (HC) 129I-131B and the judgments referred to therein).

[17]     That principle entails that in respect of disputes of fact where a final order is sought a Court has to accept the allegations of the respondents and those allegations of the applicants that were admitted by the respondents. Facing this situation, Mr Oosthuizen at the outset of his argument indicated that the applicants abandon prayer 7 of their notice of motion and that reliance will only be placed on the agreement entered into by the parties in June 2007 to refer the matter to an audit panel for investigation and decisions and that the parties agreed to abide by the audit panel’s decisions. Except for the expulsion of the applicants as members of the first respondent the applicants would for the remainder of the relief rely on the decisions of the audit panel, which Mr Oosthuizen submitted are binding on the respondents. I shall further herein refer to that agreement as “the agreement”.

[18]     This move by Mr Oosthuizen caused quite a stir and Mr Nel, on behalf of the respondents, was clearly caught by surprise by this change in strategy. In addressing the Court, Mr Nel argued that this move by Mr Oosthuizen was aimed at circumventing the real issue, namely the election process, in respect of which he submitted the respondents could not be faulted because the allegations contained in second respondents answering affidavit, now stood undisputed. Mr Nel continued to refer to these allegations in his argument, because he submitted that despite the applicants’ abandonment of prayer 7 of their notice of motion they cannot escape from it and submitted that the Court still has to consider the allegations of the second respondent against the findings of the audit panel. Apart from the expulsion issue, Mr Ootshuizen hoisted a single sail to his ship with which it would either sink or sail. That single sail is applicants’ reliance on the agreement to have an independent audit panel investigate the entire issue and to make decisions to which the parties would be bound. The effect of Mr Ooshuizen submissions is that in the event of applicants succeeding, the respondents would have to accept the decisions of the audit panel and the applicants would be entitled to the relief they claimed. However, the other side of the coin is that if the applicants do not succeed, the respondents would be entitled to the dismissal of the application.

[19]     The appointment of the audit panel, its terms of reference and its report are not disputed. All the allegations by the applicants made in their founding affidavits in this regard must be accepted as admitted by the second respondent in his answering affidavit. That the decisions of the audit panel were rejected by the respondents is common cause. The reasons why such decisions were rejected in effect constitute their defence against Mr Oosthuizen’s submissions. I shall refer to these reasons later herein.

[20]     Although Rule 6(5)(d), that deals with the opposing of motion proceedings, does not provide what the answering affidavit of a respondent should contain or how the allegations by the deponent of the applicant in his or her founding affidavit should be answered, Erasmus in his work: Superior Courts Practice, states the following on B1/144:

The requirement for the respondent’s answering affidavit, which deals with the allegations contained in the applicant’s founding affidavit, are the same as for the applicant. If the respondent’s affidavit in reply to the applicant’s fails to admit or deny, or confess and avoid allegations in the applicant’s affidavit, the court will, for the purposes of the application, accept the applicant’s allegations as correct.

An affidavit is not a pleading. A respondent cannot contend himself in his answering affidavit with bare or unsubstantiated denials… It is permissible for the respondent, without advancing evidence of facts under oath, to seek to impugn the veracity of the applicant’s affidavits by examining their inherent validity or probity in all the proved circumstances. The respondent must, however, “eschew indignant arguments and expostulation” in its answering affidavit.”

To substantiate this statement Erasmus refers to the following cases:
Petersen v Cuthbert & Co Ltd 1945 AD 420 at 428-9; Room Hire Company (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155T and 1163; Soffiantini v Mould 1956 (4) SA 150 (E) at 154F; and Engar v Omar Salem Essa Trust 1970 (1) SA 77 (N) at 83E; Plascon-Evans Paints v van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634I-635A; and Tsenoli v State President of the Republic of South Africa 1992 (3) SA 37 at (D) 41E-F.
This was also approved by this Court in the case of Shelco Fifty One (Pty) Ltd v The Minister of Finance and Another, an unreported judgment of this Court, Case No. (P) A 06/2007, delivered on 10 April 2007, paragraph [9], p 9-10.

[21]     In his founding affidavit, the first applicant states the following in respect of the audit panel:

46.      In the light of those irregularities at the Congress and in an effort to resolve the differences between the delegates who walked out of the Congress, including the applicants and the delegates who remained behind, including the respondents, the applicants and the second to sixth respondents concluded an agreement on 25 June 2007. The appointment of an Audit Panel was initially the idea of the second respondent. In terms thereof they appointed an independent Audit Panel to investigate the irregularities pertaining to the Congress and requested that the Audit panel investigate the irregularities against the COD’s Constitution and the decisions made at the Congress. A copy of such agreement is annexed marked “IS8”

Because of the method followed by the second respondent in his voluminous answering affidavit by recording everything that occurred before, during and after the Keetmanshoop Congress and by not answering specific allegations made by the first applicant in his founding affidavit paragraph by paragraph, it is nearly impossible and indeed very difficult to pinpoint what the second respondent’s version in respect of the establishment of the audit panel is. In the latter part of his affidavit the second respondent deals extensively with the reasons why the report of the audit panel was rejected by the respondents. As mentioned, I shall deal with the reasons later herein. It appears, however, that the second respondent does not dispute the contents of the quoted allegations made by the first applicant in paragraph 46 of his affidavit in this regard. In fact, the second respondent claims the credit for establishing the audit panel in his answering affidavit when he states in paragraph 5.2.3 thereof: “…I suggested an investigation that would ascertain the facts and clarify issues.” I shall consequently assume that the contents of paragraph 46 of the first applicant’s affidavit had been admitted by the respondents.

[22]     The agreement between the parties setting out the terms of reference of the audit panel is quoted hereunder in full. The agreement was signed by second, third, fourth, fifth and sixth respondents on 22 June 2007 and thereafter on 25 June 2007 by the first, second, third, fourth and fifth applicants. Every page of the agreement was initialled by all the signatories thereto. It is common cause that the “two disputing parties” referred to in that agreement are the applicants and the respondents, respectively. That agreement reads as follows:

AGREEMENT BETWEEN THE TWO DISPUTING PARTIES OF THE CONGRESS OF DEMOCRATS ON THE TERMS OF REFERENCE FOR AN INDEPENDENT AUDIT PANEL, INTERIM ARRANGEMENTS AND THE WAYS FORWARD

         WHEREAS

1.       the National Executive Committee of the Congress of Democrats (hereinafter referred to as the “Party) decided to hold an extra-ordinary Congress on 04 to 06 May 2007 in Keetmanshoop;
2.       such a extra-ordinary Congress we held on the abovementioned dates;
3.       a substantial number of delegates walked out of the proceedings of the extra-ordinary Congress, alleging certain specific procedural irregularities and wrongdoing, on the basis of which they feel the extra-ordinary Congress should be nullified;
4.       there is a division between those who walked out and those who remained behind and continued with the extra-ordinary Congress proceedings;
5.       these two parties are desirous to have the matter independently investigated by an audit panel and reported on;
6.       the parties wish to expose and bring the culprit(s), if any, that were involved in such alleged irregularities; and
7.       the parties understand that unity of purpose is the only option for the Party to exist and grow, and are committed to achieve such unity.

NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:

1.       The parties shall jointly appoint an independent audit panel to investigate the alleged irregularities pertaining to the extra-ordinary Congress and audit such irregularities against the Party’s constitution and decisions of the Party structures.
2.       The following issues pertaining to the extra-ordinary Congress shall be investigated:
a)       the decision to have the extra-ordinary Congress and the grounds for opposition thereto;
                  b)       planning and organization of the extra-ordinary Congress;
                  c)       invitation, selection and accreditation of delegates;
                  d)       registration of delegates;
                  e)       invitation and registration of observers;
f)       the conduct of the extra-ordinary Congress proceedings prior to the elections;
g)       the conduct of the extra-ordinary Congress proceedings during the election of the President and after the walkout;
3.       The panel shall use such procedures and methods as it deems necessary in an evenhanded manner to ascertain the facts and clarify the issue;
4.       The parties, represented on the one hand by Rosa Namises and Pauline Dempers on the other hand, shall provide all the relevant and necessary information to the panel to enable it to come to a fair and speedy decision and shall generally cooperate to ensure fairness and objectivity of the audit;
5.       The panel shall provide the parties with its findings within 14 days of the signing of this agreement;
6.       The panel shall make such recommendations to rectify the situation and to avoid similar occurrences from happening in future;
7.       Should the panel finds that the alleged irregularities at the extra-ordinary Congress warrants a nullification of the proceedings and election results the parties agree to such nullification and the newly elected leadership shall step down. The parties shall then meet within three days under the auspices of the audit panel to agree on an interim leadership composed of persons from the group that stayed behind and persons from the “walk-out group”, which interim leadership shall run the affairs of the Party until such time that a Congress is held to elect a new leadership; Provided that Party members, implicated in the alleged irregularities shall not serve on the interim leadership and shall be barred from participating in the proposed Congress and from standing and holding any leadership positions at any level within the Party for a period of twelve months;
8.       Should the panel finds that there were no irregularities at the extra-ordinary Congress, the parties accept the newly elected leadership as the legitimate leadership of the Party;
9.       For the duration of the audit investigation the parties shall refrain from issuing derogatory press statements, interviews and false statements to the media against each other.
10.      For the duration of the audit the resources and staff of the party shall be used for administrative purposes only and the elected officials refrain from interfering in administrative matters and shall also cease all outreach activities and campaigns pending the finalization of the audit.
11.      The parties agree to abide by these terms of reference and the findings and recommendations of the panel.”

[23]     It is common cause that an audit panel was appointed consisting of four members under the chairmanship of Mr Clement Daniels.

[24]     The report of the audit panel is too voluminous to quote in its entirety. Only the relevant parts of that report are quoted.

REPORT OF THE INDEPENDENT AUDIT PANEL INTO ALLEGED IRREGULARITIES COMMITTED AT THE EXTRA-ORDIANRY CONGRESS OF THE CONGRESS OF DEMOCRATS HELD AT KEETMANSHOOP ON 04 TO 06 MAY 2007

BACKGROUND

1.       The Extra-ordinary Congress (hereinafter referred to as “the congress”) of the Congress of Democrats (hereinafter referred to as “the COD” or “the Party”) was held from 04 to 06 May 2007 in Keetmanshoop. After the announcement of the election results for the position of the Party President a substantial number of delegates walked out of the proceedings of the congress, alleging certain specific procedural irregularities, while other members remained behind and continued with the congress proceedings. The latter group maintained that there were no irregularities and if there were the group that walked out should have raised it during the congress proceedings.
2.       The two parties, those who walked out and those who stayed behind, subsequently agreed to have the congress proceedings independently investigated by an audit panel who will submit a report on it findings and recommendations. The parties entered into a written agreement to this effect that was signed on 22 and 25 June 2007 by Mr Ben Ulenga, Mr Tsudao Gurirab, Ms Rosa Namises, Mr Natji Tjirera and Ms Innocentia Mokomele on the other hand, and Mr Idgnatius Shixwameni, Mr Reinhardt Gertze, Ms Nora Schimming-Chase, Ms Pauline Dempers and Mr Moses Katjiuongua on the other hand.
3.       The audit panel consisted of Clement Daniels, Toni Hancox, Samson Ndeikwila and Ian Swartz.
4.       The audit panel was assigned to investigate the following issues pertaining to the congress and to make it findings and recommendations available to both parties.”

[25]     The audit panel thereafter dealt with several aspects under various headings, such as;
a)       the decision to have the congress and the grounds for opposition;
b)       planning and organization of the congress;
c)       invitation, selection and accreditation of delegates;
d)       registration of delegates;
e)       invitation and registration of observers;
f)       the conduct of the congress proceedings prior to the elections
g)       the conduct of the congress proceedings during the election of the President and after the walk out.

[26]     The audit panel also dealt with the CoD constitution and decisions of party structures before coming to its conclusions, whereafter it made certain recommendations. The recommendations and conclusions are the following:


CONCLUSIONS
45.      We conclude that although it was a legitimate decision to have the congress in terms of the constitution, that there was not sufficient time to prepare and set all the constitutional requirements in place to ensure a credible, legitimate and democratic process.
46.      In the light of the irregularities that we have exposed, we conclude that there was fraud and cheating, which compromised the integrity of the process. The two incidents of fraud mentioned in paragraphs 23.5 and 23.6 were detected after both names did not appear on the walk out and stay behind lists. We contacted the persons concerned and due to their cooperation we manage to establish the facts. We are not sure if there are other cases of cheating and fraud, but two cases are two too many for a party that is founded on the principles of democracy to tolerate. This is therefore conclusive proof of serious irregularities and sufficient to nullify the elections.
47.      The list presented by both groups contains inaccuracies. As indicated in paragraphs 41 and 42 it is not possible to determine whether a majority stayed behind or walked out. The irregularities mentioned in paragraph 23 are further proof that the exact number of true delegates cannot be ascertained from the list. It would have entailed contacting each and every name on the list, which was clearly impossible for this exercise.
48.      We think all politicians in the CoD, and else where, can learn a lesson from the ill conceived 2003 United States – lead invasion of Iraq. The lesson is that the means does not always justify the end and if you don’t have a plan in place to secure the peace and unity after the war, then think twice before you embark on such action.”

RECOMMENDATIONS
49.      In the light of the above finding were strongly recommend that the parties adhered to the agreement which they signed on 22 and 25 June 2007 respectively and in particular clause 7 thereof.

50.      We further recommend that a constitutional review process be undertaken to ensure that the constitution is modernised and provide for quorums, accreditation of delegates and proper voting procedures.
51       We also recommend the selection of a permanent election commission and that such people receive adequate training so that they understand and perform their tasks efficiently and effective.
52.      We also recommend that the party adopt clear and permanent policies and guidelines on meeting and congress procedures.
53.      We finally recommend continuous and standardized leadership training for all members. And that any person who wishes to stand for elections must show proof of participating in a leadership course.”

[27]     In his first affidavit dated 07 September 2007, filed by the second respondent in order to resist that an order in terms of the applicants’ notice of motion be made on an urgent basis, he indicated that it is the respondents’ intention to launch a counter-review application in respect of the decisions of the audit panel. This intention is set out in paragraph 21 of second respondent’s affidavit dated 07 September 2007. As will be dealt with more fully later herein this was the probably the way to proceed if the respondents wanted to attack the findings of the audit panel.

In paragraph 4 of the order made by the Court on strength of the agreement of the parties on 07 September 2007, this issue of the envisaged counter-review application was expressly provided for. In paragraph 5 of the Court’s order, (based on the agreement of the parties), provision is made for the joining of the audit panel and deadlines were set for filing affidavits by the audit panel. However, the respondents did not proceed with their intention and as it stands now no relief is sought to review or set aside the decisions of the audit panel and neither has the audit panel been joined.

[28]     In this Court the respondents submitted that the reason why they did not adhere to the decisions of the audit panel are the following:

a)      
in the first instance, the signatories of both applicants and the respondents did not have the authority to enter into such an agreement and to be bound by it; and
b)      
secondly, that it is clear from the analysis by second respondent in his voluminous answering affidavit that the audit panel disregarded the respondents’ evidence and the audit panel’s decisions are consequently wrong. During his argument, Mr Nel was at pains to point out several examples of what he submitted were such wrong decisions when compared with the allegations of the second respondent allegedly supported by documentation, which he avers the audit panel did not take into consideration. He also pointed out that the conclusions of the audit panel did not correspond with the earlier references in their report to evidence that was put before them with regard to certain occurrences during the Keetmanshoop Congress.

These two submissions are of course based on different premises. In regard to the alleged lack of authority by the signatories to the agreement, it would mean that no valid agreement was entered into and on the second basis it is assumed that a valid agreement was entered into, but that the respondents were entitled to reject the decisions of the audit panel because its decisions are clearly wrong. I now turn to deal with both these arguments

Unauthorised Signatories
[29]     As mentioned earlier, the agreement was signed by both the respondents and the applicants. It has to be accepted that the realisation of this agreement was the result of the proposal of the second respondent. From the agreement and the signatures that appear on it, it is evident that the respondents first signed this agreement on 22 June 2007 and three days later, on 25 June 2007, the applicants signed it. All the pages of the agreement were also initialled by all the signatories to the agreement. It is common cause that the signatures that appear on this agreement are those of the applicants and the respondents.

[30]     Normally it is understood in our law that a signature on a document refers to the fact of the signature in relation to the contents of the document on which it appears. (Christie – The Principles of Contract, 6th edition, page 46; Sonfred (Pty) Ltd v Papert 1962 (2) SA 140 (W)).
In the Sonfred-case Roper J stated the following in this regard at 145C-E:

It is, I think, axiomatic that the person is not bound by the mere fact that his signature appears upon a document of debt. The chief significance of a signature to a document of obligation is that it is evidence of the fact of consent by the signatory, and in order that he may be bound it is necessary that he shall have affixed his signature for the intention of binding himself. When the defendant is sued upon a document, therefore, the cause of action is not a signature, but the acceptance of liability, of which the signature is evidence, and the cause of action must be proved by the plaintiff, it is the foundation of the whole claim.”

In general the fact of appending a signature means that the party in question is bound. This principle has been stated in several decisions. It has been summarised in the following words:

It is a sound principle of law that when a man signs a contract, he is taken to be bound by the ordinary meaning and effect of the words which appear over his signature.”
(Burger v Central South African Railways 1903 TS 571 at 578 and followed in several other court decisions, i.a. George v Fairmead (Pty) Ltd 1958 (2) SA 465 (A), Jurgens and Others v Volkskas Bank Limited 1993 (1) SA 214(A); as well as stated in Christie, supra, page 102).
On page 103 in his authoritive work Christie states the reason for this, namely that:
“…the function of a signature is to certify that the writing to which it pertains accords with the intention of the signatory. It conveys an attestation by the person signing of his approval and authority for what is contained in the documents and that it emanates from him.”

(Jurgens and Others v Volkskas Bank Limited, supra, at 220E-F and Roomer v Wedge Steel (Pty) Ltd 1998(1) SA 538 I N at 541H – I, 543B-C).
In his work Christie also refers to certain exceptions to this rule. (Christie, supra, 103-104). However, none of his exceptions are relevant in this case.

[31]     It was never submitted on behalf of the respondents that the parties were misled, misunderstood the terms of the agreement or that any fraud was committed with regard to the agreement entered into. No mention was made of any mala fides or any form of illegality on behalf of the audit panel.

[32]     It is indeed very strange that the respondents who signed the agreement that was initiated by the then President of the CoD (second respondent), and who in fact signed first, should now aver that they did not have the authority to sign such an agreement. It is even more incomprehensible to me that they remained silent about this for more than a month, while the audit panel was busy with its task pursuant to the terms of reference. It should not be forgotten that the fourth respondent was authorised by the other respondents to act on their behalf in assisting the audit panel. Only after the audit panel made certain decisions referred to in its report dated 30 July 2007 and only after that report was provided to all the parties, did the respondents indicate by way of a media release on 07 August 2007 that it rejected the report. What aggravated the mysterious reliance on the lack of authority to sign the initial agreement is the fact that this reason was not mentioned at all in the media release of 07 August 2007. This objection only surfaced much later. It is difficult to escape the conclusion that the audit panel’s decisions were rejected because it went against the second to sixth respondents.

[33]     The rationale for entering into this agreement, which was suggested by the second respondent, is obvious, namely because of the deadlock situation that had arisen as a result of the disputed election of second respondent as president of the CoD and the subsequent walk-out, during which further office bearers took place were elected. This did not only cause an embarrassment to the Party, but hampered from functioning properly in terms of its constitution. The agreement entered into between the respondents and the applicants was clearly a manner to resolve this check-mate situation. The two factions resolved to put it in the hands of an independent body to decide what they were unable to resolve amicably, namely to appoint an audit panel to investigate whether there were any irregularities and to decide thereon so that the CoD could carry on functioning. This was the responsible manner to resolve the disputes as one would expect from responsible office bearers of a prominent political party. Not only was the proper functioning of the party at stake, but also the position of several of its members who had seats in the National Assembly.

[34]     Mr Oosthuizen submitted that because the CoD’s constitution only provides for the holding of national congresses every five years and extra ordinary congresses whenever emergencies arises, the president of the first respondent and other office bearers could in the time between congresses take certain decisions in the interest of the CoD. He referred to several articles in the CoD constitution in that regard. Mr Nel disputed these submissions on behalf of the respondents.

[35]     The provisions of the CoD constitution with regard to national congresses and extra ordinary congresses and the duties of the president and other office bearers, in my opinion, make it clear that, although no specific provision is made for a situation like the one that have arisen at the Keetmanshoop congress, it would have been impossible to authorise anyone to sign the agreement on behalf of the CoD.

[36]     The respondents based their argument of lack authority on the fact that the CoD did not authorise the respondents to sign the agreement and that the applicants were also not authorised by their group-the walk-out group. That premise is wrong. The rationale of the agreement was not an acceptance of the outcome of the Keetmanshoop congress and elections, but to find a solution to the contesting attitudes of the two groups. The starting point should be the situation that existed before the Keetmanshoop congress and elections. Consequently, when the agreement was entered into and signed by both applicants and respondents, it could only have been on the basis of what the respective positions of the parties were before the Keetmanshoop congress. At that time all applicants and the respondents, except the fifth respondent, held elected leadership positions in the CoD. They signed the agreement in those capacities.

[37]     What is also amazing of the stance of the second to sixth respondents, is the fact that same parties agreed on 7 September 2007 and 28 January 2008 to a postponement of the application under certain specific conditions. The applicants and the respondents (2-6) agreed on 07 September 2007 on a draft order without any dispute regarding the authority to enter into such an agreement. The same parties again agreed to an order on 28 January 2008 to postpone the application and that the Court makes an order in respect of the retention of the seats in Parliament of certain applicants, despite their expulsion.

[38]     In his affidavit the second respondent denied that the signatories to the agreement had a mandate to sign it. The question arises; a mandate from whom? According to the latest amendment of the CoD constitution the next national congress of the party will only be held in 2009. Office bearers and the NEC are elected at a national congress. The annual national conference does not appear to have any authority to deal with the type of problems that occurred at the Keetmanshoop congress. The only other body that is empowered by the CoD constitution to act between the congresses is the NEC. Article 15 of the CoD constitution describes the powers and duties of the NEC as follows:

         “NATIONAL EXECUTIVE COMMITTEE
         Powers and duties
The National Executive Committee is the highest organ of the CoD between two congresses and the Annual Conferences and shall have the authority to lead the organization, subject to the provisions of the Constitution. Subject to the terms of this constitution, members and office bearers of the NEC shall hold office for a period of three years. Officials and NEC members shall have the right to be re-elected to office or position.

Without prejudice to the generality of its powers, the NEC shall:
1.       Carry out the decisions and instructions of the congress and the Annual Conference.
2.       Issue and send directives and instructions to and receive reports from the regions.
3.       Supervise and direct the work of the CoD and all its organs, including national, Regional and Local Government caucuses.
4.       Ensure that the regional and branch structures of the CoD function democratically and effectively. The NEC may suspend or dissolve a REC where necessary and call for new elections within three months.
5.       Oversee the work of the Women’s and Youth Organizations and other focus groups in the party.
6.       Establish departments and set up committees, as it considers appropriate.
7.       Manage and control all the national and international property and assets of the CoD.
8.       Convene the Congress and Annual National Conference, and convene all special or extra- ordinary meetings of the CoD.
9.       Receive reports from the National Working Committee; supervise the work of, and delegate such functions to the NWC, as it considers necessary.
10.      Issue documents and other policy directives as and when it deems fit.
         11.      Confer such honors, as it may deem appropriate.
12.      Appoint a National List Committee of not fewer than five (5) and not more than nine (9) persons for the selection and adoption of candidates for the National Parliament. The NEC shall draw up regulations for the procedures to be followed in such a selection.
The national list Committee shall report to the NEC prior to the implementation of its recommendations.
Every candidate for elections must undertake to abide by the Constitution of the CoD and the relevant Code of Conduct for CoD elected representatives.
The National Executive Committee shall be elected by secret ballot by the National Conference and shall hold office for three years.”

The respondents did not dispute that the NEC was tasked with the duty to organise the Keetmanshoop congress. It is evident that the NEC is the body that performs the most prominent and fundamental tasks of the CoD.

[39]     The applicants allege that all of them were NEC members before the Keetmanshoop congress. Because of the manner that the second respondent chose to answer the founding affidavit of the first applicant (as referred to earlier herein) this allegation is not directly disputed. However, it seems that the second respondent does not agree that the sixth applicant was a member of the NEC. Despite this uncertainty, by it appears that the signatories of the agreement were NEC members who had the duty to organise the Keetmanshoop congress for the election of office bearers of the CoD. As a result of the alleged irregularities the parties followed the second respondent’s proposal to have those irregularities investigated by an independent third party, the audit panel: It is also evident from that agreement that the second to sixth respondents envisaged that if irregularities were found, the election of office bearers would fall away and such an event is catered for in the agreement.

[40]     There is absolute no evidence before me of what happened before the parties entered into the agreement. According to the CoD constitution the NEC consist of many members of which there are several who may not reside in Windhoek. It is not clear how many NEC members are necessary to take a decision. I could not find any provision in the constitution of the CoD that specifically deal with meetings of the NEC or how many constitutes a quorum. It is doubtful that in urgent situations between congresses a meeting of all NEC members is necessary to perform its duties. There is also no indication of any meeting of the NEC discussing this issue or whether there was a quorum or not. The fact remains that members of the NEC, who have the duty to act between congresses did agree on a responsible way to resolve this issue. In my opinion the NEC does not need to be mandated to perform such a task between congresses e.g. to reach this agreement, in the light of the impassé that arose at the Keetmanshoop congress.

[41]     The third respondent was the national chairperson before the Keetmanshoop congress. Save for being a member of the NEC, the CoD constitution also entrusted him with specific tasks. He acts as guardian over the constitution and has to ensure that resolutions of the national congress and national conferences be implemented. Article 26(3) states:

         “3.       THE NATIONAL CHAIPERSON

                  a)       He/She shall preside over the Annual National Conference.
b)       He/She shall be the custodian of the decisions taken by the Annual National Conference.
c)       Act as guardian over the letter and spirit of the CoD constitution, its political program and other principal documents.
d)       Ensure that all organs of the CoD implement Congress and National Conference resolutions and operate within the parameters of policy set out by the Congress and the Annual National Conference.
e)       Carry out such additional tasks as the Conference, NEC or NWC may decide.
                  f)       Be an ex-officio member of the NWC.
g)       In the absence or incapacity of both President and Deputy President, the National Chairperson shall assume the functions of the President.
h)       Hold the office for a period of three years and can be available for re-election.”

The third respondent was also a signatory to the agreement. According to the duties entrusted by the constitution to him one would expect that whenever an impassé would arise of the kind that did arise at the Keetmanshoop congress, the national chairman may in the interest of the CoD enter into such an agreement on his own. Other signatories to the agreement e.g. the President were also entrusted with duties that are aimed at the preserving the CoD.

[42]     Mr Oosthuizen submitted that even if the Court should find that the respondents and the applicants had no authority to sign the agreement, they signed it in their individual capacities and such are bound by the agreement. I agree with Mr Oosthuizen in this regard. Even if I should be wrong in finding that the signatories to the agreement were not duly authorised to sign it, the parties to this application did sign the agreement and obviously considered them bound by their signatures thereto. They had the intention to be bound by the agreement on normal contractual principles. Significantly, all the signatories of the agreement are parties before the Court in this application, either as applicants or respondents. They were certainly interested persons who intended to contract with each other to the effect that a third party, an audit panel, would be appointed with the mandate set out in the terms of reference which they agreed upon and undertook to be bound by the decisions of the audit panel.

[43]     Consequently, the submission that the agreement is not valid because the signatories to it were not authorised, is rejected. I hold that the agreement is valid.

Decisions of the Audit Panel
[44]     The agreement entered into by the applicants and respondents is one between them in which a third party, the audit panel, was authorised to perform certain duties. I disagree with Mr Nel’s submission that normal contractual principles are not applicable to this matter. This agreement should be evaluated on normal contractual principles, as will be set out herein after.

[45]     It is trite that the parties to an agreement should have the intention to enter into a legal relationship. This has often been described the following words, namely that: the parties must “seriously and deliberately “enter into a contract,and with intention that a lawful obligation be established”. (Conradie v Rossouw 1919 AD 279 at 324, Tobacco Manufacturers Committee v Jacob Green and Sons 1953 (3) SA 480(A) 492H-493A; Froman v Robertson 1971(1) SA 115 (A) at 121D)

Such an agreement should be entered in good faith after consensus had been reached by the parties. (Meskin No v Anglo American Corporation of South Africa Limited and Another 1968(4) SA 793(W) at 802A; Savage and Lovemore Mining (Pty) Limited v International Shipping Company (Pty) Limited 1987 (2) SA 149(W) at 198A-B.)

The golden rule is that the common intention of the parties must be clear from the agreement.
(Joubert v Enslin 1910 AD 6; Christie, supra, page 386.)

[46]     As mentioned before, the agreement that the parties entered into is not disputed. The parties clearly had the intention to agree that a third party, the audit panel should be appointed with specific terms of reference to investigate irregularities which might have occurred during the Keetmanshoop congress and the election of the CoD office bearers and that both groups would consider themselves bound by the decisions of the audit panel. It is an established legal principle known as pacta sunt servanda that the parties to a contract are bound by it. Parties are free to enter into a contract and have to live with the consequences arising from those contracts. Miller, J (as he then was) described it as follows in the case of John H Prichard and Associates v Thorney Park Estates 1967(2) SA 511(DCLD) at 515B-C:

But unusual and unbusiness-like as such an agreement may be, there is no reason at all why parties should not enter into such an agreement if they are so disposed or why the Court should not give effect to it if it is satisfied that that was the agreement.”

In A. L Wilkenson (Pty) Limited v Brown, [1996] 1 ALL E.R 509 at page 514, Salmon, AJ, said:

The Courts usually construe a contract to give it ordinary business efficacy. This is because the Courts recognise that people do not normally enter into a contract with the intention that it shall not make business sense. There are, however, contracts, although I think very few, in which the parties use clear and unambiguous language which plainly means that the parties intend to enter into a ridiculous bargain. In such cases the Courts will give effect to the expressed intention of the parties, however absurd the consequences may be.”

In Printing Registering Company v Sampson (1875) LR 19Eq, 462 at 465 the learned Judge Jessel said:

If there is one thing which, more than another, public policy requires, it is that man of full age and competent understanding shall have the utmost liberty of contracting, and when contracts are entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice.”

(Wells v South African Aluminite Company 1927 AD 69 at 73, The Municipality of Walvis Bay and Another v Respondents set out in the Annexure hereto being the occupiers of the caravan sites at Long Beach Caravan Park Walvis Bay, Republic of Namibia, an unreported judgment in Case no. A 119/2004, delivered in this Court on 26 May 2006, page 52-53.)

A mere change of circumstances does not entitle a contracting party to terminate an existing contract. (Compagnie Interafricaine De Travaux v South Africa Transport Services 1991 (4) SA 217 (A) at 235E-G.)

[47]     The respondents clearly repudiated the agreement between them. They might have done so earlier, but on 07 August 2007 they expressly indicated in a media statement that they will not be held bound by the decisions of the audit panel. In terms of general contractual principles this conduct amounted to a refusal to perform in terms of their own agreement, which they acknowledged to be binding on them. Their required performance was to accept the decisions and recommendation of the audit panel. In law it is necessary that the repudiating party should disclose its intention to no longer be bound by its agreement. This the respondents clearly did by way of the media statement of on 07 August 2007. There is no question that the repudiation of the agreement was not accepted by the applicants, who require performance of the respondents’ obligations in their notice of motion.

[48]     As referred to earlier herein, there is no application before court to declare the agreement (in respect of the audit panel) invalid because of any reason. It was never suggested that the agreement was against public policy. Determination thereof is a function of the Court. (Eastwood v Shepstone 1926 AD 295; Pricewaterhouse Coopers Inc v National Potato Co Ltd 2004 (6) (SCA) and Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A).

[49]     A Court can only consider the permissible facts before it and apply applicable and appropriate legal principles to those facts. (The Municipality of Walvis Bay and Another case, supra, paragraph 56, page 60).

[50]     After a lengthy discussion of the applicability of the exceptio doli in South African law and decisions in that regard, with reliance on First National Bank Limited v Saayman No 1997 (4) SA 302(A), Christie, supra, at page 63-86 to 39 suggested that the principle of bona fides still exists in our law and consequently the exceptio doli generalis as a defence is superfluous. The parties to the agreement to appoint an audit panel clearly acted with the intention to have the disputes between them resolved and acted bona fide when they entered into that agreement.

[51]     Christie also deals with the situation where there is a dispute concerning the enforcement of what is alleged to be an obligation arising out of a contract to which the parties agreed. In this matter the parties agreed that the circumstances surrounding the Keetmanshoop congress gave rise to the disputes between them and that they would be obliged to accept the decisions of the audit panel.

Christie suggests (p 665) that in dealing with such an agreement, the first question is whether the enforcement which is sought, falls within the sphere of the operation of the contract. If that question is answered in the negative, it fails. If enforcement of the obligation does fall within the sphere of the operation of the contract, the following two questions need be answered, namely:
a)      
have the requirement of bona fides in the negotiation and performance of the contract been complied with? and
b)      
is the performance in the public interest?
If both these questions can be answered in the affirmative, the plaintiffs (applicants) succeed. If not, the (plaintiffs) applicants fail.
If this approach is to be followed in this matter, the first question to be considered must be answered in the affirmative. The next two questions then arise, namely: have the requirements of bona fides in the negotiation process and performance of the contract been complied with, and secondly, whether such performance is within the public interest. In respect of the first question the answer must be “yes”. There is no question or argument that the negotiation process which led to the agreement and the agreement itself was not done in a bona fide manner. With regard to the second question, I have already indicated that respondents never suggested that the agreement was not in the public interest. There can be no doubt that it is in fact in public interest that the two opposing factions of the official opposition party of Namibia agree to settle their disputes.

[52]     It is incomprehensible that the respondents do not consider themselves bound by their own agreement because of the decisions of the audit panel. The reason why it is incomprehensible is that the audit panel was not a party to the agreement. The only two parties to that agreement are the applicants and the respondents. The applicants did not breach the contract in any way in order for the respondents to consider themselves not bound by it. In our law it has been stated that if one party has committed a major breach of contract, the other party can, if he or she is in the right, decide not to take action at all and disregard the contract. (Christie, supra, page 675). If that party is then sued on the contract, the other party’s default is a complete defence. (Goldstein & Wolff v Maison Blanc (Pty) Ltd 1948 (4) SA 446(C)) This principle is not applicable here because the applicants did nothing wrong. It is the respondents, the other party, who refuse to honour the contract, not because of what the applicants did, but what the audit panel allegedly did not do. The audit panel is not a party before this Court and no relief is claimed against it.

[53]     What the applicants actually want is specific performance or implementation of what the audit panel decided. There is no suggestion that the applicants did not perform their obligations. The law has been stated in this regard in a South African Appeal Court decision as long ago as 1912, when Innes J said in the following in Farmers Cooperative Society v Berry 1912 AD 343 at 350:

Prima facie every party to a binding agreement who is ready carry out his obligation under it has a right to demand from the other party, so far it is possible, a performance of his undertaking in terms of the contract.”

[54]     Impossibility of performance has never been mentioned by the respondents as a defence. The Court of course has a discretion in this regard. (Christie, supra, page 679; Farmers Cooperative Society v Berry, supra, p 350).
The approach of the Court in respect of specific performance has been set out in several cases, such as Haynes v Kings Williams The Municipality 1951(2) SA 371 (A) and Benson v SA Mutual Life Association 1986 (1) SA 776A.

[55]     The general principles in this regard in our law, as referred to herein-before, makes it clear that the parties are bound by what they contracted. Consequently, in terms of these general principles, the agreement between the applicants and respondents is binding on them. However, the parties went further by incorporating paragraph 11 in the agreement where they expressly agreed to be bound to the terms of reference and findings of the audit panel:

The parties agreed to abide by these terms of reference and the findings and the recommendations of the panel.”
[56]     In the absence of any allegations of fraud or fraudulent behaviour by any party, the Court has no option than to hold the parties to their agreement. No allegation of fraud or fraudulent behaviour has even been suggested by the respondents.
[57]     It is furthermore accepted in our law that when the parties agree that a third party should perform specific duties, they have to accept the decision of that third party. There are many examples in our law where parties have agreed to appoint a third person to perform a specific task that the disputing parties cannot resolve themselves. A receiver has often been appointed by agreement between the parties to receive and distribute the assets of parties married to each other or of partnership. Parties have also agreed to have an asset/property valuated and for that purpose appointed a valuator. Other known examples are the appointment of arbiters, arbitrators, mediators, umpires or referees. (Estate Milne v Donohoe Investments (Pty) Ltd 1967 (2) SA 359 A at 373 H; Chelsea West (Pty) Ltd v Roodebloem Investments (Pty) Ltd 1994 (1) SA 837 (C) at 843H.)

[58]     In this matter the parties have agreed to entrust the investigations to an audit panel appointed by them according to agreed terms of reference and to abide by the decisions of that audit panel. The audit panel was authorised to do more than a valuator who has e.g. been appointed to value shares or property. Such valuation has to be accepted, unless it is unreasonable. (Rossing Stone Crushers (Pty) Ltd v Commercial Bank of Namibia and Another 1993 NR 274 (HC). Although the agreement is not one of appointing the audit panel to act as arbitrators, the panel was also tasked to investigate, to make findings and recommendations. Those findings of the audit panel would be final and no provision is made for another body to reconsider those findings. The situation in the case of Schuldes v Compessor Valves Pension Fund and Others 1980 (4) SA 576(W) was different. In that case the applicable pension fund rule provided that a decision regarding any dispute would be final and binding, but further provided that in the event that any future contingency which might arise and cannot be dissolved amicably, the matter may then be referred to arbitration. Other than in this instance there was provision for another body to decide before it becomes final and binding. The effect of this agreement, and especially clause 11 thereof, is that the decisions of the audit panel would be final and the parties would be bound by it. There is no scope for any interference later, except of course if the audit panel acted mala fide or fraudulently in reaching such decisions. There is no mention of such conduct. When a valuer, is for instance appointed unlike an arbitrator, he does not act in a judicial capacity, but he decides the issues submitted to him without judicial enquiry through the exercise of his own judgment and skill. (Perdites v Jamieson 2002 (6) SA 356(W) at 361I, [5], LAWSA Vol 1 para 412). The mandate of the audit panel is therefore more than that of a valuer, but although it is not the same as an arbitrator, its decisions have the same final effect.

[59]     The parties clearly set out in the agreement what should be investigated (clause 2). They left the procedures and methods in the hands of the audit panel (clause 3). Provision was made that both groups would be represented by one person each to provide the audit panel with the relevant and necessary information, namely the fourth applicant and the fourth respondent (clause 4). The parties provided the audit panel with clear and unambiguous terms of reference, as well as assistance and could therefore agree to accept and abide by the decisions of the audit panel.
[60]     As mentioned before, the respondents originally expressed the intention to apply for the review of the decision of the audit panel by way of a counter-review application. This was still their intention when the application was postponed on the 07 September 2007 and it was incorporated in the agreement that was made an order of the Court. By deciding not to pursue that avenue, the merits and the decisions of the audit panel is not an issue before this Court. The Court has merely to consider whether an agreement was entered into and whether specific performance as claimed by the applicants is possible in the light of the respondents’ rejection of the audit panel’s report, which is a clear repudiation of its own agreement.

Non-Joinder
[61]     Although the respondents did not elaborate much on the point in limine taken by the them that the members of the newly elected NEC had not been joined and that the prayers in the notice of motion would affect them, Mr Oosthuizen submitted that such an argument holds no water because the Party itself, the CoD, had been joined as first respondent and the NEC is an organ of the CoD in terms of its constitution. I agree with Mr Oosthuizen that the members of the NEC did not have been joined. No relief is claimed against them, only against the respondents.
The relief claimed
[62]     In prayer 5 of their notice of motion the applicants seek an order declaring the agreement to be of full force and effect, including the first sentence of clause 7 thereof and in the alternative the entire clause 7 (prayer 6). The second part of clause 7 of the agreement provides for an interim leadership to fill the vacancy of the newly elected leadership that has stepped down. It is further stipulated that the interim leadership would consist of members of both groups that will run the affairs of the Party until a congress is held to elect a new leadership. Clause 7 has been fully quoted in paragraph 21 hereof. It is evident that the applicants formulated the relief they claim in paragraph 5 of the notice of motion as a result of the respondents’ attitude that CoD’s constitution does not provide for an interim committee. As indicated hereinbefore the parties are bound by their agreement. With regard to the second part of clause 7 of the agreement, I do not regard it necessary that such interim committee, as the respondents object to, be appointed. There is sufficient provision in the relief claimed for the management of the affairs of the Party in future and for it to organise the holding of a new congress at which office bearers can be elected. If prayer 4 is granted, the applicants (or those who are left) will be restored to their former positions as members of the first respondent and a congress of the CoD to elect office bearers will have to be held within a specific time period. Provision will also be made for the nomination of persons representing all the parties on an Electoral Commission.

[63]     With regard to the time period the suggested, the period of three months seems to me too short to arrange for and organise a congress if one takes the times provided in the CoD constitution into consideration. A period of five months would in my opinion be sufficient time for that purpose.

Expulsion of the Applicants
[64]     Prayers 3 and 4 deal with the expulsion of the applicants from their positions as members of the first respondent and an order is sought to declare such expulsion null and void and to restore them to their positions as such members. It is common cause that the applicants were expelled without affording them the opportunity to respond to any disciplinary charge, i.e the audi alteram partem principle was not applied. The second respondent’s defence thereto is apparently based thereon that, although it is conceded that the applicants have the right to appeal against that expulsion in terms of s 5.2 of the CoD constitution, compliance with the audi principle does not necessary mean it has to be applied before the adverse decision, but can also be done thereafter, i.e. when the appeal is heard. Mr Nel referred in this regard to what was said by Zondo J in paragraph 21 in the case of Semenya & Others v CCMA & Others 2006 27 ILJ 1627 LAC, namely:

[21]     The third respondent’s contention that the opportunity to be heard was not good enough because it was offered after the decision to dismiss her had been taken requires close examination. It is not our law that an opportunity to be heard that is given after the relevant decision has been taken is never good enough. Although generally speaking such an opportunity should be given before the decision can be taken, there are circumstances where an opportunity to be heard that is given after the decision has been taken is acceptable. Where the opportunity to be heard is given after the decision has been taken and it is one of those situations where it is acceptable and the person concerned spurns that offer or does not make use of it, it cannot lie in such person’s mouth to say that he was not given an opportunity to be heard. In such a case an opportunity to be heard has been given and rejected. The audi alteram partem rule has been complied with in such a case.”

Mr Nel further relied on Diko and Others v Nobongoza and Others 2006 (3) SA 126 (C) on 136G-137A where Davis J said the following:

The key question which arises, is whether the procedures that were adopted by second respondent are congruent with the principles of natural justice. Recourse to the principle of audi alteram partem must play a role in the evaluation of the conduct of second respondent. Insofar as audi is concerned, the enquiry in every case must include the question as to whether the person who is adversely affected by a decision had a far opportunity to state his or her case.
This principle, of course, is a flexible one. In each case a court must be careful to determine what constitutes a fair opportunity of being heard, but certain guidelines are fairly trite. Fairness will often require that a person who may be adversely affected by a decision should have an opportunity of making representations on his or her own behalf, either before the decision is taken with a view to producing a favourable result, or after it is taken with a view to procuring its modifications, or both. Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his or her interests, fairness should require that he or she is informed of the main points of the case which he or she has to answer. In addition, the person must be granted reasonable time to make such representations. See, in general, Nortje en n’ Ander v Minsister van Korrektiewe Dienste and Andere 2001 (3) SA 472 (A).”

[65]     Finally, the respondents rely on instances where expulsion of members from political parties were upheld by the Court and referred to an unreported judgment of the Cape Provincial Division in these cases of Smith, Botha and January v The Independent Democrats, delivered on 18 September 2007 and the cases of Harding and Krotz v The Independent Democrats, delivered on 6 December 2007 in support of this submission. These cases emanated from the floor-crossing in the South African Parliament where members of one political party move to another party within a specified window-period and where some of them were expelled by their previous Party, which were in all these cases The Independent Democrats.

[66]     Mr Oosthuizen submitted that there is no substance in the submission of the respondents in respect of the expulsion of the applicants that the audi principle can be applied afterwards when they will have an opportunity to be heard by the first respondent during the hearing of their appeals. He denied that the constitutional right of fairness, which is the foundation of the rule of natural justice, has been afforded to the applicants in respect of the circumstances of this matter. He submitted that this is not a matter where the right to audi should be afforded after the decision to expel the applicants were taken by the respondents. He argued that The Independent Democrats cases referred to are distinguishable from this matter. He further submitted that the respondents’ concession that the next congress of the CoD will only take place in 2009 effectively means that the applicants will have to wait for another year for their respective appeals to be heard, which is unreasonable and unfair if the audi principle is applied in the way as argued by Mr Nel.

[67]     Although the principle of audi may be flexible, I do not agree that the circumstances of this matter allow that it can be stretched from 2007 to 2009. That would be unfair and would defeat the whole purpose of the audi principle. It effectively would mean that the applicants will remain expelled from the CoD until 2009. In terms of the provisions of Article 5.3 of the CoD constitution, the national conference of the first respondent is the body that considers the appeals regarding the expulsion of members. On perusal of The Independent Democrats cases, as far as it may be relevant in the Namibian context, it appears that each of the persons expelled by that party were offered an opportunity to respond and to challenge their expulsions within a short period of time after the expulsion decision and that disciplinary hearings were to be held within a week of the expulsion. The constitution of The Independent Democrats is not before me, but if the notice to the expelled members of that Party is in compliance with its constitution, there is a vast difference between it and the relevant provisions of the CoD constitution. The appeals in those matters would be heard within days, whereas it would be more than two years in this instance. That cannot be fair and the audi principle cannot be stretched so far. Even if the respondents are ordered to hold a congress within three months of the Court’s order, such congress would only be for the election of the office bearers. In any event, if the expulsions are not set aside the applicants would effectively be barred to participate in such congress.

[68]     Despite the issue regarding the audi principle, I have already found that the parties are bound to accept the decisions of the audit panel. Therefore, the respondents’ did not have the authority to expel the applicants as members of the CoD. The parties to that agreement stated unambiguously that during the time whilst the audit panel is busy performing its task, they shall refrain from any derogatory conduct against each other and shall further refrain from interfering with administrative matters. (Clauses 9 and 10). After the decisions of the audit panel had been made, the parties agreed to be bound by it. (Clause 11). It was clearly not the intention of the parties to that agreement that the respondents would have the right to expel the applicants, or any of them, from the Party. Such conduct would clearly be ultra vires the terms of their own agreement.

[69]     In the circumstances I hold that that the expulsion of the applicants by the respondents is a nullity and has to be set aside. Consequently, the applicants are entitled to relief claimed in that regard.


Costs
[70]     The issue of awarding costs is a complicated matter.
a)       On 07 September 2007 the parties agreed that the costs of the proceedings of that hearing would stand over to be determined later. I made such an order. Had the matter been finalised on the date when the application was postponed, it would have been a simple matter of costs following the result. However, it did not happen. The respondents were late in filing their answering affidavit and the applicants initially blamed the respondents for not being able to file their replying affidavits because of that;
b)       On 28 January 2008 the parties again agreed to have the application postponed, because the applicants replying affidavit(s) was/were still outstanding. In terms of that agreement and the Court’s order, the costs of both 7 September 2007 and 28 January 2008 stood over to be determined later;
c)       When the application was supposed to be heard on 19 May 2008, no replying affidavits had been filed and the applicants applied for a further postponement which I refused with costs. The arguments in respect of the postponement lasted approximately two hours. The application was set down for two days and I made it clear that the application would be heard the next day, namely 20 May 2008; and
d)       On 20 May 2008 arguments were heard from both parties and concluded that day.

[71]     The only cost order that has been made in this matter was that in respect of the applicants’ application for a postponement, which was refused and whereof the applicants were ordered to pay the wasted costs. The (main) application by the applicants had been largely successful and ordinarily costs would follow the result. This matter is not normal in that:
a)       The applicants brought the respondents to Court on an urgent basis. That the application would not proceed on that basis became obvious on 07 September 2007 already and the parties then agreed that the application be postponed and the respondents afforded adequate time to file answering affidavits. At the same time deadlines were set for the filing of all affidavits and heads of argument. Urgency became irrelevant.
b)       The answering affidavit of the second respondent and annexures thereto consisted of 333 pages. The reason for that voluminous document is the applicants’ seventh prayer that was abandoned on 20 May 2008 by Mr Oosthuizen. Had the applicants at the stage when they launched the application already abandoned that prayer in which the applicants prayed for a declaratory order in terms of the Keetmanshoop Congress, it would not have been necessary for the second respondents to file such a comprehensive affidavit and deal with issues that have now become largely irrelevant. In all probability the second respondent would then also have been able to file his answering affidavit much earlier. A large part of the respondents’ arguments as contained in their heads of argument is also superfluous.

[72]     In the light of these circumstances, I am not convinced that the applicants, although substantially successful, are entitled to all the costs of the application. In my discretion I would only award the applicants half of the taxed costs of the application. The applicants are responsible for the taxed costs of the respondent in respect of failed application for postponement, which was already ordered on 19 May 2008.

[73]     In the result, the following orders are made:

a) i)    The decision taken by the first respondent on 11 August 2007 to expel the applicants from their positions as members of the first respondent, is declared null and void and is set aside;
ii)      The first respondent is ordered to restore the applicants to their positions as members of the first respondent.
b)       The agreement concluded by the applicants and the respondents on 25 June 2007, and particularly clause 7 thereof, is declared to be of full force and effect, including the first sentence of clause 7 and excluding the remainder thereof.
c)i)     The first respondent is ordered to organise and hold an Extra-Ordinary Congress within 5 months from the date of this Order, in terms of the relevant provisions of the CoD constitution for the election of office-bearers of first respondent;
ii)      At the election mentioned in paragraph c(i) above, the applicants and the second to sixth respondents shall nominate one person to serve as members of an Electoral Commission of first respondent, or nominate an equal number of persons to serve on such Electoral Commission, which Commission shall be chaired by an independent person nominated and appointed jointly by such members; provided that if the members should fail to reach consensus on the appointment of such a chairperson, such a chairperson shall be appointed by the President of the Society of Advocates. Such a chairperson shall also chair the Extra-ordinary congress of the first respondent ordered in c)i) hereof.
d)       The respondents are ordered to pay 50% of the applicants’ taxed costs of the application.



_____________
MULLER, J



ON BEHALF OF THE APPLICANTS:                       ADV. H. OOSTHUIZEN

INSTRUCTED BY:                                                KOEP & PARTNERS


ON BEHALF OF THE RESPONDENTS:                      ADV T. NEL

INSTRUCTED BY:                                       VAN DER MERWE-GREEFF INC

Download