Young v Coega Development Corporation (Pty) Ltd ([2009] 6 BLLR 597 (ECP) ; 2009 (6) SA 118 (ECP); )(2009) 30 ILJ 1776 (ECP)) [2009] ZAECPEHC 57; [2009] ZAECPEHC 9 (20 March 2009)

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[2009] ZAECPEHC 57
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Young v Coega Development Corporation (Pty) Ltd ([2009] 6 BLLR 597 (ECP) ; 2009 (6) SA 118 (ECP); )(2009) 30 ILJ 1776 (ECP)) [2009] ZAECPEHC 57; [2009] ZAECPEHC 9 (20 March 2009)
FORM A
FILING SHEET FOR EASTERN CAPE
HIGH COURT, POR ELIZABETH JUDGMENT
PARTIES
:
ALAN GRAHAM YOUNG
Applicant
And
COEGA DEVELOPMENT CORPORATION (PTY) LTD
Respondent
Registrar:
Case No.:
699/2009
Magistrate:
High Court:
EASTERN CAPE HIGH COURT, PORT ELIZABTH
DATE HEARD:
19 March
2009
DATE DELIVERED:
20
March 2009
JUDGE(S):
Kroon J
LEGAL REPRESENTATIVES –
Appearances:
for the Appellant(s):
Adv
A Beyleveld
for the Respondent(s):
Adv
D O Potgieter
Instructing attorneys:
Appellant(s):
Wilson
McWilliams Inc
Respondent(s):
Pumezo
Bono Attorneys
CASE INFORMATION -
Nature of proceedings
: Application
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE,
PORT ELIZABETH)
Case No.:
699/2009
Date of hearing: 19
March 2009
Date delivered: 20
March 2009
In the matter between:
ALAN GRAHAM
YOUNG
Applicant
and
COEGA DEVELOPMENT CORPORATION
(PTY) LTD
Respondent
J
U D G M E N T
KROON J
:
This application was argued as a
matter of urgency yesterday afternoon and last evening. I would
have preferred more time to
formulate the reasons for the conclusion
to which I have come, but as will appear below my ruling is required
as a matter of
urgency. This judgment accordingly sets out the
essence of my reasoning.
The applicant is an employee of the
Coega Development Corporation (“the CDC”), his position being
that of Chief Financial
Officer (“the CFO”).
The CDC has instituted a disciplinary
hearing against the applicant in which the latter faces a series of
charges. The notification
of the disciplinary hearing served on
the applicant was signed by Mr Silinga, the chief executive officer
(“the CEO”) of
the CDC, who is referred to later in this
judgment. Originally the hearing was set down for 16 March 2009.
This occurred
despite objection by the applicant through his
attorneys who intimated that the applicant would seek relief in
terms of s 4(1)(a)
of the Protected Disclosures Act 26 of 2000 (“the
Act”) in the form of an order barring the holding of the
disciplinary inquiry.
In fact, on 10 March 2000 the applicant
instituted action in this Court, referred to more fully below, and
the summons was
served on the CDC.
At the hearing on 16 March the
applicant sought a postponement of the inquiry pending the
determination of the action. That
postponement was refused by the
chairman of the inquiry. He did, however, postpone the hearing to
enable the applicant to launch
the present proceedings. The
chairman further ruled that the hearing be resumed this morning.
The applicant seeks an order
interdicting the CDC from proceeding with the disciplinary inquiry
pending the determination of the
action instituted by him, under
case no. 579/09. The substantive relief sought in the action is a
declarator that the charges
levelled against him in the notification
to attend the disciplinary hearing constitute an occupational
detriment as defined in
s 1 of the Act. (It may be noted that such
declarator would effectively bar the CDC from proceeding with the
disciplinary hearing.
The relevant provisions of the Act are set
out below).
The CDC resists the present
application.
Relevant provisions in the Act are
the following:
S 1:
“’
disclosure’
means any disclosure of information regarding any conduct of an
employer, or an employee of that employer, made by
any employee who
has reason to believe that the information concerned shows or tends
to show one or more of the following:
that
a criminal offence has been committed, is being committed or is
likely to be committed;
that
a person has failed, is failing or is likely to fail to comply with
any legal obligation to which that person is subject;
.
. . . .
‘
impropriety’
means any conduct which falls within any of the categories referred
to in . . . the definition of ‘disclosure’
. . .
‘
occupational
detriment’, in relation to the working environment of an employee,
means
—
being
subjected to any disciplinary action;
.
. . . . ;
‘
protected
disclosure’ means a disclosure made
—
.
. . . .
by
an employee in accordance with section 6.
.
. . . .”
S 2(2):
“
This
Act applies to any protected disclosure made after the date on which
this section comes into operation, irrespective of whether
or not the
impropriety concerned has occurred before or after the said date.”
S 3:
“
No
employee may be subjected to any occupational detriment by his or her
employer on account, or partly on account, of having made
a protected
disclosure.”
S 4(1)(a):
“
Any
employee who has been subjected, is subject or may be subjected, to
an occupational detriment in breach of section 3 may
—
approach
any court having jurisdiction, including the Labour Court
established by section 151 of the Labour Relations Act (Act
66 of
1995), for appropriate relief.
.
. . . .”
S 4(2):
“
For
the purposes of the
Labour Relations Act, 1995
, including the
consideration of any matter emanating from this Act by the Labour
Court
—
any
dismissal in breach of section 3 is deemed to be an automatically
unfair dismissal……..
any
other occupational detriment in breach of section 3 is deemed to be
an unfair labour practice as contemplated in Part B of
Schedule 7 to
that Act, and the dispute about such an unfair labour practice must
follow the procedure set out in that Part .
. .”.
S 6(1):
“
Any
disclosure made in good faith
.
. . . .
is
a protected disclosure”.
The first aspect requiring
consideration is the submission of Mr
Potgieter
, who appeared
for the CDC, that the High Court has no jurisdiction to issue the
declarator sought by the application in the action
instituted by
him: that jurisdiction falls within the exclusive province of the
Labour Court. Accordingly, the interdict sought
could not be
granted pending a decision which the High Court has no jurisdiction
to make.
Counsel referred to s 4(2)(b) of the
Act, quoted above, and to the following provisions of the
Labour
Relations Act (“the
LRA”):
S 157(1):
“
Subject
to the Constitution and section 173, and except where this Act
provides otherwise, the Labour Court has exclusive jurisdiction
in
respect of all matters that elsewhere in this Act or in terms of any
other law
are
to be determined by the Labour Court.”
(My emphasis)
S 191(13)(a):
“
An
employee
may
refer a dispute concerning an alleged unfair labour practice to the
Labour Court for adjudication if the employee has alleged that
the
employee has been subjected to an occupational detriment by the
employer in contravention of
section 3
of the
Protected Disclosures
Act, for
having made a protected disclosure defined in that Act.”
(My emphasis)
The submission cannot be upheld.
First, the provisions of the LRA referred to, read together, entitle
the employee to approach
the Labour Court for relief against an
occupational detriment, but do not oblige the employee to approach
only that court.
C.f.
Fredericks and Others v MEC for Education and Training, Eastern
Cape, and Others
[2001] ZACC 6
;
2002
(2) SA 693
(CC), which further held that as constitutional matters
were in issue arising out of a labour dispute the High Court had
jurisdiction.
Second, s 4(2) of the Act is in terms
applicable “for the purposes of the LRA”, i.e. it is of
application where an employee
chooses to go the route of approaching
the Labour Court.
Third, the submission loses sight of
the words “any court having jurisdiction including the Labour
Court” in s 4(1)(a) of
the Act. Counsel was unable to offer any
effective counter to the interpretation that the words recognized
that the Labour
Court was not the only forum that could be
approached by an employee aggrieved as envisaged in the Act.
Fourth, the case law does not support
the submission. While the Labour Court has been approached for
relief in similar matters,
so too has the High Court. In
Mpho
v Sipho NO and Others
[2006] 4 All SA 468
(W)
and in
Radebe and Another v
MEC, Free State Province Department of Education
[2007]
JOL 19112
(O) the court entertained matters where legal relief as
that in issue in the present matter was claimed.
Mr
Potgieter
made two
submissions. He pointed out that the judgments in these two
matters do not reflect that the jurisdiction of the court
was raised
as an issue and he suggested that all concerned in the proceedings
may simply have overlooked the point. Alternatively,
it was
suggested that because the court in each case reached a conclusion
adverse to the applicant on the merits the court may
well have
considered it unnecessary to consider the question of jurisdiction.
Suffice it to state that neither of these propositions
enjoyed any
merit.
The question of jurisdiction was
pertinently considered in
Jordan
v MEC for Finance, Eastern Cape and Another
[2007]
JOL 19802
(Ck). In that case the applicant (invoking the
provisions of the Act) sought an order interdicting and restraining
the respondents
from commencing and proceeding with any disciplinary
inquiry against him pending certain events. Paragraph 12 and 13 of
the
judgment read as follows:
“
[12] In
terms of
section 157
of the
Labour Relations Act 66 of 1995
, the
Labour Court has exclusive jurisdiction in respect of all matters
that elsewhere in terms of this Act or in terms of any other
law are
to be determined by the Labour Court.
[13] As
is apparent from
section 4
of the
Protected Disclosures Act 26 of
2000
, a matter pertaining to an occupational detriment or an
allegation of occupational detriment is not limited to the exclusive
jurisdiction
of the Labour Court, and I am accordingly prepared to
entertain the application in this Court.”
A second point
in
limine
taken by
Mr
Potgieter
proceeded as
follows. The applicant sought, in the present proceedings, to
challenge the ruling of the chairman of the disciplinary
inquiry
that the applicant was not entitled to a postponement of the inquiry
pending the determination of the action instituted
by him.
Ergo
the applicant was obliged
to cite the chairman in the present proceedings. His failure to do
so rendered the application fatally
defective for non-joinder.
Suffice it to say that the submission was devoid of substance. The
High Court is not bound by
any rulings made by the chairman.
Tshishonga v Minister of
Justice and Constitutional Development and Another
[2006]
JOL 16856
(LC) paragraphs 7 and 18.
The requisites for the grant of an
interim interdict are well-known:
a
prima
facie
right even if it
is open to some doubt;
irreparable harm, or a reasonable
apprehension thereof, if the interdict is not granted.
the absence of an adequate
alternative remedy.
It is common cause, or not in
dispute, that the applicant made the disclosures referred to below,
relating to what he stamps as
impropriety in the affairs of the CDC.
In so doing he implicated the CEO.
The first disclosure related to what
the applicant referred to as “unbudgeted expenditure”. On 25
July 2008 the applicant
addressed a letter to the chairman of the
board of the CDC regarding the proposed funding by the CDC of
investors located in
the Nelson Mandela Bay Logistics Park (“the
NMBLP”). He recorded that he had engaged the CEO on this
question and that
he had expressed his dissent to the proposed
funding as the Department of Trade and Industry had declined to fund
the NMBLP expenditure
and, secondly, that the amount involved, R150
million, was unbudgeted and required board approval. In his
founding affidavit
the applicant states that in fact the CEO did
thereafter incur liability on behalf of the CDC for the funding
despite the fact
that same had not been budgeted. In his letter
the applicant recorded that in terms of Treasury regulations he was
obliged
to make the report. He states in his affidavit that his
attorney had advised him that the transaction would contravene the
provisions of the Public Finance Management Act 1 of 1999 (“the
PFMA”) and as the CFO he was obliged to report it. He had

favoured the CEO with a copy of the letter he proposed addressing to
the chairman and gave him an opportunity to comment thereon.
The
CEO, however, had not done so. The applicant had also discussed
the matter with the chairman of the Audit and Finance
Committee
(“the AFC”) and he had favoured the latter with a copy of the
written disclosure. This was accordingly a further
disclosure of
the aspect in question.
The second
disclosure related to what may shortly be described as
irregularities relating to VAT
viz.
,
the
irregular claim by the CEO’s trust (not registered as a VAT
vendor) for VAT on services rendered by the trust to the CDC,
which
claim was met by the CDC. On 8 October 2008 the applicant
addressed a communication to the CEO raising this matter and

requesting repayment of the amount involved, R178.627,80. No
response was received. The applicant avers that the VAT claim
by the
trust constituted an offence under the VAT Act and potentially
constituted a fraud on the South African Revenue Services
(“SARS”).
The amount in question has not yet been repaid by the trust; instead
it was dealt with by the CEO by the passing
of a credit note (which
has not been implemented). The applicant therefore, during October
2008, reported the matter per telephone
to Mr de Bruyn, the chairman
of the CDC’s Human Resources Sub-Committee.
The third
disclosure related to the failure of the CEO’s trust to make
payment of income tax (PAYE) on the services it rendered
to the CDC,
in that such PAYE was not deducted from the payments made by the CDC
to the trust. The CDC was accordingly subsequently
required by SARS
to pay approximately R1,2 million in respect of the amount that
should have been deducted from the payments
made to the trust. The
CDC claimed payment of the amount from the CEO. The latter had only
repaid portion of the amount, despite
reminders to him by the
applicant, and a balance of over R500.000,00 remained. On 15 May
2008 the CEO had undertaken to repay
his indebtedness in nine equal
instalments by way of post-dated cheques. He only provided three
such cheques. While the first
cheque was met, the second was
dishonoured and the CEO gave no authority for the third to be
presented. The original indebtedness
was not authorised by the
board, nor was the unilateral imposition by the CEO of terms of
repayment. The applicant reported
the above to de Bruyn by way of a
letter dated 4 December 2008.
The applicant contends:
that the
disclosures he made were protected disclosures as envisaged in the
Act
,
made by him in good faith;
that in terms of
the Act he is entitled to be protected from any reprisals on
account of
,
or partly on account of, the disclosures;
that the
disciplinary steps taken against him
,
although dressed up as something else, are in fact such reprisals;
that the
disciplinary steps accordingly constitute an unlawful occupational
detriment as envisage
d
in the Act;
that he has at
least a
prima
facie
right that the disciplinary steps should not proceed;
that he will
,
or has a reasonable apprehension that he will, suffer irreparable
harm if the disciplinary inquiry were to proceed;
that he has no
adequate alternative remedy to protect his rights
;
that the balance
of convenience favours the grant of the interim interdict sought
;
In argument
,
Mr
Potgieter
conceded only that the disciplinary enquiry would constitute an
occupational detriment as defined (a concession that was properly

made). He, however, contended, if I understood the argument
correctly, that none of the other contentions by the applicant had

been established.
One submission
of
counsel was that the applicant had not made the disclosures
bona
fide
.
He pointed to the fact that charges had been laid against the
applicant and the fact that on the evidence the CEO had raised
with
the applicant what were alleged to be shortcomings in his discharge
of his duties, at a time before the disclosures were
made. He
submitted that the applicant’s motive in making the disclosures
was an attempt to avoid those allegations. However,
firstly, the
allegations raised by the applicant, which were the subject of his
disclosures, are not in dispute and it would
appear that counsel was
confusing an alleged motive with intention. Secondly, the
applicant places the validity of the charges
against him in dispute
and has made averments in support thereof. On the papers I cannot
decide this dispute in favour of the
CDC in the sense that the
allegations of the CEO (the deponent to the CDC’s answering
affidavit) do not show anything more,
if at all, than that some
doubt is cast on the applicant’s
prima
facie
right, as invoked by him. The applicant intimates that it was his
duty to make the disclosures, and insufficient doubt has been
raised
as to the validity of that averment.
Prima
facie
the applicant has shown that he acted in good faith.
Counsel focused
his argument on the applicant’s letter to the chairman of the
board
of the CDC concerning the unbudgeted expenditure. He adverted to
the other disclosures in dismissive fashion as, in effect,
being
makeweights. This approach cannot be endorsed.
Counsel submitted
that the disclosures did not amount to disclosures as envisaged in
the Act.
He did so on different bases.
First, with
specific reference to the disclosure contained in the applicant’s
letter to the chairman concerning the unbudgeted
expenditure
,
he pointed out that in his affidavit the applicant placed reliance
on the provisions of the PFMA. However, so it was argued,
that Act
did not apply to the CDC and accordingly the foundation of the
applicant’s claim to a protected disclosure was absent.
Suffice
it to say that the submission that the PFMA had no application
cannot be sustained.
The above objection by the CEO does
not address the other disclosures made by the applicant.
The next objection
relied on by
counsel
was that the disclosures did not constitute disclosures as defined
in the Act, with reference to the provisions of paragraphs
(a) and
(b) of the definition. However, in the first place, counsel
appears to have overlooked the introductory portion of
the
definition, which refers to the “whistleblower’s” reason to
believe that a certain state of affairs exists. It is
implicit in
the applicant’s case that he believes that subparagraph (b)
applied to the unbudgeted expenditure in question.
Prima
facie
that contention cannot be rejected. As regards the other disclosures
counsel submitted that it was clear that subparagraphs (a)
and (b)
were not of application. Asked why he made the submission and how
he would categorize the CEO’s conduct in respect
of the VAT and
PAYE issues, and specifically why it would not fall within the ambit
of paragraphs (a) and (b) of the definition,
counsel was unable to
furnish any persuasive answer.
Counsel invoked
the
decision in
CWU
and Another vs Mobile Telephone Works (Pty) Ltd
[2003] JOL 11147
(LC). In paragraph 21 of the judgment it was
stated as follows:
“
The
definition of disclosure clearly contemplates that it is only the
disclosure of information that either
discloses
or tends to disclose
forms of criminal or other misconduct that is a subject of protection
under the PDA.”
(Counsel’s
emphasis).
Counsel invoked
the averment in the CEO’s affidavit that all the role
-players
were aware of the information that the applicant disclosed and
submitted accordingly that the disclosures were not such
as were
envisaged by the Act.
However
,
as regards the second and third disclosures by the applicant, the
CEO merely states his conclusion concerning the knowledge
of the
role- players. Without elucidation this conclusion carries little
or no weight, specifically in relation to de Bruyn,
to whom, the
applicant states, the disclosures were also made. The objection
can accordingly not be sustained.
In respect of the
first disclosure the CEO’s affidavit deals specifically only with
the position of the chairman of the CDC’s
board.
In respect of the applicant’s reference to the chairman of the
AFC the remarks in the preceding paragraph are of equal
application.
In respect of the
chairman
of the CDC’s board the CEO states that he had ongoing discussions
on the issue in question with the chairman. Conspicuous
by his
absence, however, is the detail of what he discussed with the
chairman, specifically whether the issue of the unbudgeted

expenditure envisaged was discussed. The CEO’s allegations do
not cast cognizable doubt on the applicant’s affidavit insofar
as
they bear on the question of the applicant’s
prima
facie
right.
Counsel next
submitted that the applicant had lament
ably
failed to demonstrate any nexus between the disclosures and the
decision to institute the disciplinary inquiry against the
applicant
(to which the CEO was admittedly a party).
Mr Beyleveld
for the applicant pointed to the fact that already at an early stage
the CEO was made aware, via the reports of the auditors,
of the
alleged shortcomings in the applicant’s discharge of his duties,
such reports commencing as early as June 2008, yet
no action was
taken in respect of the disciplinary procedures until March 2009. On
the one hand, however, the evidence is that
investigations into the
relevant issues were continuing (but, it should be noted, despite a
full investigation by de Bruyn no
disciplinary action against the
applicant was recommended by him). On the other hand, it is relevant
to note that, on the evidence,
at an early stage alleged material
misconduct was identified, yet no disciplinary action was taken
until attempts to negotiate
the departure of the applicant from the
CDC had come to nought (the applicant’s stance, in effect, that an
acceptable severance
package would facilitate such departure having
been rejected) and until, on the evidence, the relationship between
the applicant
and the CEO had become seriously compromised.
Moreover, the latter disclosures invoked by the applicant occurred
towards the
end of 2008.
On the evidence I
conclude that
prima
facie
the applicant has established that the institution of the
disciplinary enquiry against him (to which the CEO was a party)
flowed,
at least in part, from the disclosures he had made. It is
therefore
prima
facie
a reprisal for those disclosures. That reprisal is prohibited by
the provisions of the Act. The applicant has therefore
prima
facie
established the unlawfulness of the intended disciplinary enquiry.
Despite the tenor
of
his heads of argument (to the effect that a disciplinary inquiry, at
which the applicant could establish the absence of misconduct
on his
part, or, should he consider that he was wrongly convicted, same
could be undone by an appropriate approach to a court,
was an
appropriate alternative remedy),
Mr
Potgieter
,
in the result, conceded that should it be found that the applicant
had established,
prima
facie
,
that the proposed disciplinary inquiry would be unlawful and should
not proceed, the applicant would have established the requirements

of irreparable harm (the subjection of him to the inquiry) and the
absence of an adequate alternative remedy. That concession
was
properly made.
It was further
argued on behalf of the CDC that the balance of convenience favoured
the refusal of the relief sought by the applicant.
In this regard, the stance of the CEO was echoed in argument,
viz.
,
that the situation where the (alleged) incompetence of the applicant
would continue to be foisted on the CDC with resultant
prejudice to
it, would be perpetuated. However, apart from the fact that the
alleged incompetence is in dispute on the papers,
it can hardly be
validly suggested that proceeding with a
prima
facie
unlawful disciplinary inquiry underpins a balance of convenience in
favour of the CDC.
In
the
result, I conclude that the applicant is entitled to the substantive
relief he seeks.
Mr
Beyleveld
properly conceded, however, that it would be proper for the costs of
the present proceedings to be reserved for decision of the
court
trying the action instituted by the applicant.
The following order will accordingly
issue:
The respondent is
interdicted and restrained from proceeding with the disciplinary
inquiry instituted against the applicant
pending the determination
of the action instituted by the applicant in this Court under case
no. 597/09.
The costs of the
application will be reserved for decision by the court trying the
said action.
_____________
F. KROON
JUDGE OF THE HIGH COURT
21 March 2009
Appearances:
For
the applicant - Adv A Beyleveld
Instructed by
Wilson
McWilliams Inc
Port Elizabeth
For
the respondent - Adv D O Potgieter
Instructed by
Pumezo
Bono Attorneys
Port Elizabeth