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IOLProperty - South African Property For Sale
Monday Sep 17, 2012

Irish 'building blitzes' in SA coming to end

Irish businessman and philanthropist Niall Mellon has won a court battle that will mark the end of annual building blitzes in local townships by Irish volunteers.

Mellon was the driving force behind the housing project.

But his attorney, Rael Gootkin, has confirmed that, to his knowledge, the project would be scrapped.

One last building blitz would take place in November, a commemoration of the initiative's 10th anniversary.

It comes in the wake of a tug-of-war over control of the Mellon Housing Initiative's (MHI) board of directors, which played out in the Western Cape High Court last week.

At the centre of it was what would happen to the MHI's R80m surplus.

The non-profit company and one of its members, Nolan Marsh of Mossel Bay, brought an urgent court application against Mellon and six other Ireland-based members in a bid to stop them from holding a meeting that would result in Mellon and his allies seizing control of the board.

They also wanted a curator to be appointed to investigate the company's affairs and determine what would be in its best interests.

The applicants claimed that Mellon wanted control of the board so that he could pump the MHI's R80m surplus - made up, they alleged, mostly of public money derived from government subsidies - into housing in Brazzaville in the Congo, instead of poor communities in SA.

However, in an order handed down on Friday afternoon, Judge Burton Fourie ruled in Mellon's favour, dismissing the MHI and Marsh's application.

Judge Fourie did not give reasons for his decision, saying they would be provided should the parties request them.

During argument, Leon Kuschke, SC, acting for Mellon and the other respondents, submitted that the applicants' rights had not been infringed in any way.

There was nothing illegal or wrong about his clients' intention to take control of the board of directors.

Kuschke said Mellon had sought legal advice on the prospect of using the funds in Congo and had been advised that this was not possible in terms of SA laws. He had then made it clear in correspondence with the MHI's management that "Congo is off the table".

Mellon had also given MHI's management assurances that the money would be used in SA, but that the focus might be on charities other than the housing project.

But Alasdair Sholto-Douglas, SC, for the MHI and Marsh, argued that his clients were "rightly suspicious" of the veracity of the respondents' assurances.

This was against the backdrop of two things: there was no explanation why they wanted control of the company, especially considering that it was fully functional and solvent; and Mellon's trust in Ireland (the Niall Mellon Township Trust) had taken a decision during a meeting on May 17 to assume control of the board so that it could "exit SA and optimise" its R80m surplus.

Sholto-Douglas argued that Mellon and his trust no longer saw SA as a "worthy beneficiary" of their charity because the government had increased its contribution towards lowincome housing.

Gootkin said a MHI board meeting had been held at 5pm on Friday, soon after Fourie's ruling, when five new directors - Mellon among them - had been appointed.

He said the board would decide what its intentions were for the R80m surplus.

"The members will give the directors instructions as to the strategies to be adopted."

Cape Times

 
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