Access denied: Spoliation as remedy to director denied access to workplace

April 1st, 2018
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By Nicholas Mgedeza

Legal disputes are cropping up everywhere all the time. This is discernible by the many matters on our court rolls. Let me hasten to say one needs to determine whether in the circumstances where a director is prevented from entering the workplace by the employer, what the expeditious legal remedy is. To be particular, I determine whether mandament van spolie (spoliation) is the appropriate remedy under the circumstance.

Background

Significantly, spoliation is the possessory remedy. In the case of Yeko v Qana 1973 (4) SA 735 (A), it was held that an applicant for spoliation remedy must satisfy the court that –

  • they were in possession or had quasi possession of the property; and
  • that the respondent deprived them of the possession forcibly or wrongfully against their consent.

In principle, all that the spoliated person needs to prove is that they were in possession of the object; and they were deprived of possession unlawfully (see Ivanov v North West Gambling Board and Others 2012 (6) SA 67 (SCA) at 75C). The object of the order is merely to restore the status quo ante the unlawful action.

Possession

The right of possession is often referred to as the ius possessionis and must be distinguished from the so-called ius possidendi, the right to the possession of a thing. The former is only available to a person actually in possession of an object and exists
either in addition to, or independently from, the latter, which is a right that enables a person to demand that they be given possession of an object, that is, a right which justifies a person’s claim to have an object in their possession. Thus a person may have a ius possidendi without actually being in possession of an object and, conversely, they may have a ius possessionis without having a ius possidendi, which is, a right to the possession of a particular object (see DG Kleyn, A Boraine and W du Plessis Silberberg and Schoeman’s the Law of Property 3 ed (Durban: LexisNexis 1992) at p 113 – 114). The possession, which must be proved, is not possession in the juridical (physical) sense; it may be enough if the holding by the applicant was with the intention of securing some benefit for themselves (see Mbuku v Mdinwa 1982 (1) SA 219 (TkS)).

Deprivation right of access

Section 71(1) of the Companies Act 1 of 2008 (the Act) provides that ‘[d]espite anything to the contrary in a company’s Memorandum of Incorporation or rules, or any agreement between a company and a director, or between any shareholders and a director, a director may be removed by an ordinary resolution adopted at a shareholders meeting by the persons entitled to exercise voting rights in an election of that director, subject to subsection (2).

(2) Before the shareholders of a company may consider a resolution contemplated in subsection (1) –

(a) the director concerned must be given notice of the meeting and the resolution, at least equivalent to that which a shareholder is entitled to receive, irrespective of whether or not the director is a shareholder of the company; and

(b) the director must be afforded a reasonable opportunity to make a presentation, in person or through a representative, to the meeting, before the resolution is put to a vote.’

As mentioned above one must possess the article with the intention of securing some benefits for themselves. Pertinently, one needs to determine that if in the circumstances where the director’s access to the workplace is denied without following the process, spoliation can be utilised as remedy. In the case of Greaves and Others v Barnard 2007 (2) SA 593 (C), the respondent said that the interference with his peaceful use and possession of his office began after lunch on 8 April 2005. He received a telephone call from third appellant’s attorney, informing him that he would be removed from the building by the police or security guards. Two security guards and two policemen entered his office and told him that they had instructions to remove him from the premises. When he asked them to provide him with a court order authorising their conduct, they left. He tried to telephone one of the company’s employees to discuss certain matters with him. Four security guards again entered his office unannounced and told him to leave the premises immediately. He again asked whether they had a court order and they left. Another person, ostensibly from third appellant’s attorneys, also entered his office and told him to leave his office. This person appeared very intimidating. With all the activity in his office, he found it impossible to continue with his normal work.

When he left the building that afternoon, he noticed that the lock to the front gate had been replaced. When he visited the premises the next day, he found that he could not open the front gate as the lock had been replaced.

The court held that ‘before a person can bring spoliation proceedings, he must show that the right of which he has been spoliated is something in which he has an interest over and above that interest which he has as a servant or as a person who is in the position of a servant or quasi-servant.’ In other words they must hold the property with the intention of benefiting themselves and not another.

The intention to possess for one’s own benefit suffices to prove possession. In the matter of Greaves the court confirmed the well-established principle that the first requirement for the spoliation remedy is proof of undisturbed possession, in the sense of exercising effective physical control over the property for one’s own benefit (as opposed to merely as a representative or servant of the person who is actually in possession). Proof of possession for this purpose does not require physical control animo domini – the lesser intention to hold for one’s own benefit (holdership) is sufficient. The decision a quo, where the application was granted, was confirmed on appeal on exactly this basis: The applicant (the respondent on appeal) occupied the office with the intention of securing some benefit for himself, which was sufficient for a spoliation order to be granted. Thus, this decision cements the position that denial of access to workplace can be cured through the recourse of spoliation provided one can prove physical possession of the article or physical enjoyment or exercise of right in case of incorporeal and; unlawful dispossession thereof. See also Pinzon Traders 8 (Pty) Ltd v Clublink (Pty) Ltd and Another [2009] JOL 23849 (ECG) at 5 where the court explicitly remarked that ‘To succeed, an applicant for a spoliation order must prove:

(a) that he or she was in de facto possession of the property (which includes physical possession of movable and immovable property, and, in the case of incorporeal property, the physical exercise or enjoyment of the right in question which is sometimes called quasi-possession …); and

(b) that he or she has been despoiled of that possession without recourse to the courts.’

If the applicant is found to have been unlawfully dispossessed the court will order that possession of the site be restored ante omnia, that is to say, before any litigation will be entertained relating to which party has title or a right to the possession to the property (see Stocks Housing (Cape) (Pty) Ltd v Chief Executive Director, Department of Education and Culture Services, and Others 1996 (4) SA 231 (C)). In this case, a spoliation order was granted pursuant to the applicant company applying as a matter of urgency for a spoliation order against the respondents compelling them to restore to the applicant possession of the building site on which the Villiersdorp Secondary School was being constructed and the plant, equipment and materials on the site, which were being used for the building work.

In contrast, one might find the circumstance where the employee is lawfully suspended pending the disciplinary hearing and ordered not to enter the company’s premises pending the possible hearing. Patently, in the matter of Nel v Nieuwoudtville Rooibos (Pty) Ltd (2010) 31 ILJ 1781 (WCC) the applicant, who was the managing director and a shareholder of the company, held his position in terms of a five-year contract entered into in January 2009. In November 2009, following a board meeting, he was suspended on full pay pending an investigation into possible disciplinary proceedings against him. He approached the High Court seeking a spoliation order reinstating him in his position, restoring his access to the company’s premises and restoring his possession of his company laptop, cellphone and keys. The company contended that the applicant had been lawfully suspended; that he had acquiesced in the decision by the board to suspend him and that his position in the company was not of the nature that would entitle him to apply for a spoliation order. Louw J held at para 13 that the spoliation order may be granted if the applicant’s position in the company was such that he performed his work and occupied his office with the intention of securing some benefit for himself. That is, his interest in his possession of the respondent’s property materially transcended those of an employee. Subsequently the courts ruled otherwise and found that the applicant had not established that he was in possession of the respondent’s property with the intention of securing some benefit for himself.

Analysis

In principle, the director can acquire the recourse of spoliation in the event of being barred from entering the place of employment by establishing that they were de facto in possession of the property or in physical exercise or enjoyment of a right. Likewise, the applicant must establish that they were in possession of the respondent’s property with the intention of securing some benefits for themselves. In Scholtz v Faifer 1910 TPD 243 at 246 Innes CJ set out the position as follows: ‘Here the possession which must be proved is not possession in the ordinary sense of the term – that is, possession by a man who holds pro domino, and to assert his rights as owner. It is enough if the holding is with the intention of securing some benefit for himself as against the owner’ (see also Mbuku v Mdinwa 1982 (1) SA 219 (TkS)).

It is patently clear that with the legal definition of possession in the spoliation context, the possession is defined in scientific manner and it is distinguishable from the textual construction. The general rule is that an employee or agent having no interest in the company’s property will not be rescued by the recourse of spoliation. One must perform work or have occupied the office with the intention of securing some benefit for themself, not for another. The employee or the shareholder derives benefit from being on the premises and by the fact that they were under the duty for being there. In Greaves at para 21 the court held that the respondent occupied the property in question in his capacity as an executive director and shareholder of the third appellant with the rights and interest described in the shareholders’ agreement. The court held further that the respondent clearly performed his work and occupied his office with the intention of securing some benefit for himself. That led to the court confirming a spoliation order in favour of the respondent. In contrast, in the Nel matter, the court held that a spoliation application will fail because he was lawfully suspended as he acquiesced to the suspension. One must not overlook that one of the pertinent requirements for spoliation is the conduct of unlawful self-help. Furthermore, the court ruled that he did not hold possession for the benefit of himself.

Conclusion

Spoliation is an appropriate remedy in the circumstance where the director is unlawfully denied access to the workplace and they must prove possession of the office with the intention of securing some benefit for them; and unlawful deprivation thereof.

Nicholas Mgedeza BProc Cert in Adv Corporate and Securities Law Cert in Provincial and Local Government Law (Unisa) is an attorney at the State Attorney in Pretoria.

This article was first published in De Rebus in 2018 (April) DR 28.

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