One of my favourite reads is the National Horseracing Authority’s Annual Report. It never disappoints in the sense that there is always something controversial in nature, within.
Steve Reid writes in the Sporting Post Mailbag that this year is no different and he finds himself once again questioning the lack of oversight role that the National Board are mandated to play when it comes to approving expenditure.
His concern will be revealed later in this letter.
Let’s take a step backward, and once again highlight the actions the NHA condone on an annual basis in seeking to avoid uncomfortable questions at their Annual AGM.
The Preliminary Notice of Annual General Meeting according to the NHA website, was published on 1 December 2023.
Notice was given that the AGM would be held on 17 January 2024 and that items to be included on the agenda needed to reach the NHA by 7 December 2023.
The announcement and request for agenda items are well within the rules of the NHA Constitution.
I attach the relevant rules below:
The 2023 Annual Report was quietly, and without fanfare, released by the NHA on 22 December 2023, two weeks after the deadline for agenda items had passed. The delayed release of the Annual Report happens on an annual basis, spanning back at least a decade.
Despite previous requests for the Annual Report to be released simultaneously with the Preliminary Notice of the AGM, thus giving members the opportunity to peruse the report and raise questions at the AGM, this has not happened.
Clearly the NHA Board feel that the financial performance of the Authority is not important enough to members in this regard.
Having perused the abysmal financial performance of the NHA in 2023, I fully understand the tactic employed.
There are many line items that deserve more than the usual blanket acceptance from the 20 odd yes men in attendance at the AGM when approval of the previous year’s financials are sought.
I will address these line items in separate correspondence with the Sporting Post before the AGM takes place, and hopefully those that are attending can utilize these under the “General” questions opportunity.
The core focus of this article will be on Legal Fees spent by the NHA, and in particular, the Human Resources department and employee-related legal costs.
The Gross legal fees incurred by the NHA from 2017 – 2023 are as follows:
The introduction of provisions for legal fees in 2022 has failed to hide the massive growth in litigation fees that the NHA have had in recent years.
It is relevant to remind members that Vishnynathan Moodley was appointed in January 2019 and there is a clear correlation in legal fees escalation since his arrival.
NHA CEO Vee Moodley
In the 2021 NHA Annual Report a new line item, Legal fees – Human resources (Employee related) appeared under the Legal, litigation and disciplinary costs banner.
It is illuminating that the NHA Financial/HR Manager, Sibanyoni, mentions “Two staff disputes are currently with the CCMA for arbitration” in the 2020 NHA Annual Report.
This is the first time that Industrial Relations were highlighted in the NHA Annual Report.
Legal fees – Human resources (Employee related) as taken from the NHA Annual Reports
Perusal of the Industrial Relations segment of the Human Resources portion of the NHA Annual Report reveals the following verbatim comments:
It is clear from the 2023 Industrial Relations notes that the CCMA case against Langa Douse, the previous Chief Stipendiary Steward in Gqeberha was lost, and has been appealed at the Labour Court.
Langa Douse
It is also clear that this is a long standing matter and things are not as clear cut as what the NHA were hoping for.
It is furthermore clear that the NHA are spending vast amounts of money on ONE individual and the question must be asked, why this is the case?
It would be remiss of me not to mention that Gqeberha seems to be a poisoned chalice insofar as the Chief Stipendiary Steward position is concerned.
Douse succeeded Deanthan Moodley, a man who was also dismissed by the Jooste appointee Barends and ultimately reinstated by the NHA under Moodley.
Deanthan Moodley
Douse started his Gqeberha career in November 2019 and was suspended in early 2020 so clearly things went awry quickly.
At this point it’s important to state that I have never met Douse, nor have I had any interaction with him previously.
Some digging shows a man in his second term with the NHA, so the Authority cannot claim that they had no knowledge of the individual before sending him south.
Some tapping of contacts has resulted in some very interesting feedback, but for the sake of this article, this will remain undocumented as I cannot verify the allegations made both for and against the man.
A simple google utilizing the keywords Langa Douse and the National Horseracing Authority led me to the answers that I was looking for. Laid out in its entirety was the judgement from the Labour Court in respect of the NHA appeal against the CCMA finding in favour of Langa.
From this judgement the following is gleaned:
Langa won his case at the CCMA and the NHA appealed the finding.
The respondent launched an application in terms of section 145 (1) of the Labour Relations Act 66 of 1995 as amended (the LRA). It seeking an order reviewing and setting aside an arbitration award in which the applicant’s dismissal by the applicant was found substantively unfair, found the third respondent’s dismissal by the applicant substantively fair. The application is opposed by the third respondent who filed a cross-review application in which he sought an order substituting part of the relief and the decision on costs. The cross-review is opposed by the respondent. A number of interlocutory applications have been filed.
It appears that Moodley may have attempted to misrepresent to the court that he had the power to sign a resolution when the NHA Constitution clearly states that this is a board function. If this was not a wilful attempt to mislead the court Moodley acted in ignorance of the Constitution of the Authority.
[2] The parties agreed that the application brought by the applicant in terms of rule 11 of the Labour Court rules be given priority. In the application the applicant seeks an order dismissing the review application on the grounds that the individual who instituted it lacked the necessary authority. He also seeks an order striking out the papers filed on behalf of the respondent in the cross-review for the same reason. The application is opposed by the respondent.
[3] The facts relevant to the rule 11 application are that in the founding affidavit of the review application Mr Sibanyoni (Sibanyoni), the respondent’s Financial Manager, avers that he is authorized to institute the review application. He repeats the averment in the supplementary affidavit and refers to a resolution confirming the authority. The resolution was, however, not attached. The applicant issued a notice in terms of rule 7 of the Uniform Rules asking the respondent to prove Sibanyoni’s authority to bring the review application. Sibanyoni’s affidavit was attested to on 10 June 2021. On 18 July 2021, the applicant’s CEO, Mr Moodley (Moodley) issued a resolution in terms of which he authorizes Sibanyoni and Mr Hyde (‘Hyde’), the Racing Control Executive to institute and oppose legal proceedings in the Labour Court. He further gives them authority to appoint a firm of attorneys to act in behalf of the respondent.
[4] In the answering affidavit to this application Sibanyoni denies that he lacks the necessary authority. He relies on his involvement in this dispute from its inception. I must accept the applicant’s averments that the allegation Sibanyoni seeks to rely on does not constitute the necessary authority. It therefore cannot assist the respondent. The duration of his involvement does not grant Sibanyoni the necessary authority as it does not prove the manner in which the authority was obtained.
[5] A further defence Sibanyoni raised in support of his allegation that he has the necessary authority is the special power of attorney he executed in which he appointed the respondent’s attorneys of record to act on behalf of the respondent in these proceedings. Sibanyoni derived his authority to execute the power of attorney from the resolution signed by Moodley on 18 July 2021. The defence has been refuted successfully by the applicant who submitted that in terms of chapter 5 of the respondent’s constitution, the authority to litigate vests on the respondent’s National Board. In the resolution, Moodley does not disclose the source of his authority to issue it. The respondent’s constitution regulates activities by and on its behalf. It is a binding document that must be complied with. It states in clear terms that its National Board has the power to litigate on the respondent’s behalf. It has not given the CEO any authority to litigate or delegate the power to litigate on its behalf. In the absence of the necessary authority, Moodley’s attempt to grant Sibanyoni authority to bring the review application, oppose the cross – review counter application and appoint the firm of attorneys did not succeed.
The NHA Constitution states the following:
5. POWER TO CARRY OUT OBJECTS
The NATIONAL HORSERACING AUTHORITY shall have all the powers necessary to achieve its objects including, without limitation, the powers:
There can be no doubt that the Chief Executive cannot litigate on behalf of the NHA, only the board can. This action by Moodley was either done intentionally and without the knowledge of the board, or unwittingly by Moodley due to ignorance of the rules of the NHA constitution. I’m not sure what is worse.
These irresponsible actions have cost the NHA millions in legal fees, and to make things even better for Vishnynathan, the lawyers appointed to act on the NHA’S behalf have been appointed irregularly.
This has led to the Judge proclaiming the following:
[7] It was argued on behalf of the respondent that when there is sufficient evidence to decide that the person litigating on behalf of a company has the necessary authority, the resolution granting the authority becomes unnecessary. The respondent sought to rely on the payment of the funds referred to in the bond of security in the review application. The bond of security makes no submissions in support of the averment that the respondent is aware of or authorized the institution of the review application. It instead states that a firm of attorneys confirms that it is held firmly bound to the applicant to discharge for and on behalf of the respondent a sum not exceeding R 1 500 000.00
[8] The applicant denied that Sibanyoni and Moodley had the necessary authority to bring and oppose the applications on behalf of the respondent. He relied inter alia, on Lancaster 101 (RF)(Pty) Limited v Steinhoff International Holding NV (Markus – Johannes-Jooste and another as third parties) [2021] 4 ALL SA 810 (WCC). In that matter, in deciding whether sufficient evidence had been led to prove that a company had duly resolved to institute the proceedings and that the proceedings were instituted at its instance the court considered the validity of the resolution. The invalidity of the resolution was found to have established the absence of the authority to act and to give instructions for legal representation.
[9] Even the authorities the respondent sought to rely on did not support its case. The averments made do not support the argument that the respondent granted Sibanyoni authority to litigate on its behalf. The resolution by Moodley is invalid as it was made without the necessary authority. So is the appointment of the attorney who acted on behalf of the respondent.
The judge was so scathing of the actions of Moodley and Sibanyoni that the following was said regarding the breaching of the NHA constitution, and the possible awarding of costs in Moodley and Sibanyoni’s personal capacities!
[11] I have considered the arguments on behalf of both parties on the issue. The conduct of Sibanyoni and Moodley in breach of the respondent’s constitution does not justify the decision denying the respondent the right to be party to the applications. No fault can be attributed to the respondent for its omission from the proceedings.
Any prejudice the applicant may suffer as a result of affording the respondent an opportunity to cure the defect can be suitably addressed by an appropriate costs order. However, the same cannot be said about the decision to non-suit the respondent. This court does not take the decision to deny a party access to justice easily.
[12] In the premises, the following order is made:
The full judgement can be viewed here : https://www.saflii.org/za/cases/ZALCPE/2023/14.html
This is something that must not be swept under the carpet as so many other abuses of power have done so previously. It’s time for the NHA Board to be seen to be acting as per their mandate. It’s time for change.
Ed – The National Horseracing Authority was given a right of reply to Mr Reid’s letter. Human Resources & Finance Executive Bongani Sibanyoni replied on 4 January 2024 and stated: “As you are aware, the NHA’s audited financial statements will be tabled and discussed at the upcoming AGM on 17 January 2024. We therefore are unable to comment on the matter to the media ahead of the financial statements being discussed by the Members at the AGM.”
