National African Federated Chamber of Commerce and Industry and Seven Others v Mkhize and Seventy Others

The National African Federated Chamber of Commerce and Industry (NAFCOC), a voluntary association established in 1964 for the economic empowerment of Black businesspeople, experienced internal factional conflict. NAFCOC is a federal body with affiliated sectoral members governed by a constitution. The second appellant, Mr Mavundla, was NAFCOC's President. The 3rd to 8th appellants were members of NAFCOC's Executive Committee (Exco) and Council. On 6 November 2012, the 1st to 50th respondents purportedly requisitioned and convened a special meeting of NAFCOC's Council (the December 2012 meeting) via notice from a NAFHOLD employee. The stated purpose was to fill Mr Mavundla's allegedly vacant position and remove the 3rd to 8th appellants from Exco. The appellants launched an urgent application for declaratory and interdictory relief. Before the meeting, Mojapelo DJP made an order by agreement on 4 December 2012 suspending any resolutions from the December 2012 meeting pending the hearing. The meeting nonetheless proceeded on 6 December 2012, where resolutions were passed unanimously electing a new President and removing the 3rd to 8th appellants. The appellants amended their application and sought declarations that the meeting was unlawfully convened and all resolutions invalid. The South Gauteng High Court (Monama J) dismissed the application.

• Whether the December 2012 meeting of NAFCOC's Council was lawfully convened
• Which NAFCOC constitution applied (2008 or 2011)
• Whether the position of 'Chairperson of the Council' existed in the NAFCOC constitution
• Who had the constitutional power to convene a NAFCOC Council meeting
• Whether clause 17.1 of the constitution (concerning general meetings) applied to Council meetings
• Whether common law principles applied where the constitution was allegedly silent
• What was the term of office of the NAFCOC President
• Whether the President (Mr Mavundla) or Deputy President was in office at the relevant time and empowered to convene the meeting

The appeal was upheld. The High Court order was set aside and replaced with: (a) A declaration that the purported meeting of NAFCOC's Council on 6 December 2012 was not lawfully convened and all resolutions passed thereat are invalid and of no force and effect; (b) The respondents ordered jointly and severally to pay the costs of the application, including costs of two counsel. The respondents were also ordered to pay the appellants' costs of appeal (including two counsel) and costs of the leave to appeal applications.

The binding legal principles established are: (1) Constitutions of voluntary associations must be interpreted according to ordinary contractual interpretation principles, requiring sensible and businesslike interpretation that gives effect to plain language in context; (2) Where a constitution expressly vests power to convene meetings in a specific office bearer, common law principles cannot be invoked to allow others to convene such meetings; (3) A meeting of a decision-making body of a voluntary association that is not convened by the constitutionally empowered person is unlawfully convened and all resolutions passed at such meeting are invalid and of no force and effect; (4) Where a constitution contains conflicting provisions regarding terms of office, the court will prefer the interpretation that is consistent with the overall structure and sensible operation of the organization; (5) An office bearer designated to "deputise" another assumes all responsibilities when the principal office is vacant, not merely during temporary physical absence.

The court made significant obiter observations expressing deep disquiet at the internal conflict within NAFCOC, noting that the organization's laudable objective of creating business opportunities for historically disadvantaged businesspeople was being undermined by battles for control for apparently opportunistic reasons. The court observed that the flood of litigation and legal costs would do "inestimable harm and very little, if any, good" and implored the protagonists to "let sanity prevail and to put NAFCOC's interests first." The court also observed that the NAFCOC constitution was "hardly a model of clarity," being "perplexingly contradictory on key aspects" and "bewilderingly unclear on important issues of governance," with the parties able to advance completely different interpretations of material provisions. The court noted this case was one of a "litany of court cases" arising from NAFCOC's internal conflicts, characterizing the organization as being "at war with itself."

This case is significant for restating and applying principles of interpretation of constitutions of voluntary associations in South African law. It confirms that such constitutions must be interpreted according to ordinary contractual interpretation principles, giving effect to plain language objectively ascertained within context, preferring sensible and businesslike meanings. The case demonstrates the court's willingness to correct errors in constitutional drafting where provisions conflict, by reference to the overall structure and purpose. It also affirms that common law principles cannot override express constitutional provisions, and that courts will intervene in internal association disputes where irregularities affect members' civil rights and the dispute cannot be internally resolved. The judgment contains strong obiter dicta expressing concern about internal conflicts in important civil society organizations being fought through costly litigation rather than resolved internally.