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2023
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[2023] ZAFSHC 90
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Central University Of Technology v SAMWU (4562/2020) [2023] ZAFSHC 90 (24 March 2023)
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Case
Number: 4562/2020
In
the matter between
:
CENTRAL
UNIVERSITY OF TECHNOLOGY
PLAINTIFF
and
SOUTH
AFRICAN MUNICIPAL WORKERS UNION
INSTITUTE(SAMWU)
DEFENDANT
CORAM:
BOONZAAIER, AJ
REASONS
FURNISHED ON
:
The
reasons for the order were electronically circulated to the parties'
representatives by way of e-maiI. The date and time for
the
submittance is deemed to be 16H00 on 24 March 2023.
[1]
The plaintiff
instituted action proceedings against the defendant. The basis for
the claim is founded on a written memorandum of
agreement concluded
between the parties on
26
th
July 2018
(“the agreement’).
[2]
It is common cause the plaintiff and defendant entered
into the above-mentioned agreement and that Pule Molalenyane
(“Mr.
Molalenyane”) signed on behalf of the plaintiff. Mr Molalenyane
was at the time both President of the South African
Municipal Workers
Institute (SAMWU Institute) and Director of the South African
Municipal Workers Union, the trade union. (SAMWU
Union).
[3]
The respondent’s plea includes five special pleas.
The court entertained the special pleas before moving
to the main
action. From the onset the plaintiff objected to the fact that the
defendant`s counsel was giving evidence from the
bar. Counsel for
defendant, was adamant to proceed without witnesses to substantiate
their averments. His argument was that in
preliminary issues, points
of law may be dealt with
mero moto
by the court.
Plaintiff
however argued that oral evidence will have to be led in respect of
the special pleas, with witnesses having to testify
about all the
allegations and averments the defendant makes. Otherwise, it has no
evidential value. The court proceeded to deal
with the preliminary
matters as suggested by defendant.
[4]
The first and second special pleas are intertwined and
formulated as follows:
FIRST
SPECIAL PLEA
4.1.
misjoinder:
4
1.1 The agreement was signed on behalf of the plaintiff by
Mr.Molanenyane as Director of the (“SAMWU Institute “)
4.1.2
The SAMWU Union, is a trade union duly registered in terms of the
labour Relations Act 55 of 1995 with registration
number LR 2/6/2/56,
with its head of office situated at 84 Fredericks Street,
Marshalltown, Johannesburg, Gauteng.
4.1.3
The SAMWU Union has no affiliation with SAMWU Institute, or the
business it carries on. SAMWU Institute is a separate
entity and
incurs liabilities for its own account.
4.1.4
The plaintiff cited SAMWU Institute as the defendant, in line with
the agreement, but incorrectly uses the number of the SAMWU
trade
union`s registration number as well as the address of the trade
union. Summons was hence served on the SAMWU Institute but
at the
SAMWU Trade Union`s address.
4.1.5
SAMWU Institute has no knowledge of this proceedings because no
papers were served on them, it was served on SAMWU Union`s
address
with their registration number.
4.1.6
This discrepancy was communicated to the plaintiff by way of a notice
and during the pre- trial conference.
4.1.7
SAMWU Institute has no knowledge of these proceedings, plaintiff
committed a misjoinder of the trade union.
SECOND
SPECIAL PLEA:
4.2.
non-joinder
:
4.2.1
The plaintiff failed to join SAMWU Union to the dispute.
4.2.2
SAMWU Union has an interest in the matter, although it`s not party to
the agreement.
4.2.3
SAMWU Union has continuously advised the plaintiff to properly join
it as an interesting party.
4.2.4
SAMWU Union will be prejudiced because they had
paid monies to the plaintiff which are not accounted for.
WHEREFORE,
the defendant prays that the Plaintiff`s action against SAMWU
Institute be dismissed with costs.
The
third and fourth pleas are intertwined and formulated as follows:
THIRD
SPECIAL PLEA:
Dispute
Resolution Committee (“DRC”)
4.3.1
The agreement makes specific mention in clause 13,
that any disputes arising between the parties or any
relating matter
relating to the agreement, would be referred to the DRC.
4.3.2
The plaintiff has bypassed its very own agreed
terms in the memorandum of agreement. The Plaintiff is bound
to
clause 13 of the agreement.
4.3.3
SAMWU Union has even paid some of the monies, being R270 000
(two hundred and seventy thousand rands)
and R79 000 (seventy
-nine thousand rands) and the plaintiff accepted the money as
payment.
FOURTH
SPECIAL PLEA:
Arbitration
Clause (“AC”)
4.4.1
The agreement further makes provision in clause 13.3 that if the
parties are unable to resolve the dispute
through the DCR, then the
dispute may be referred for Arbitration.
4.4.2
Plaintiff has bypassed its own agreed terms in the
agreement and instituted proceedings in court without
adhering, to
the dispute clause.
4.4.3
The plaintiff has taken this matter prematurely to the court, without
having regard to the stipulations
of the Arbitration clauses
WHEREFORE
Defendant prays that the action be stayed pending the final
determination of the dispute by the arbitrator in terms of
the
agreement.
FIFTH
SPECIAL PLEA:
4.5
Pending Criminal proceedings against SAMWU
Institute and Mr. Molalenyane.
4.5.1
SAMWU Union instituted criminal proceedings against its former
President Mr. Molalenyane for Fraud and Corruption
of SAMWU Union`s
Funds. It was reported at the Johannesburg Central Police station
with CAS number being: 669/5/2020.
4.5.2
SAMWU Union reported its former president`s establishment of the
SAMWU Institute without any resolution
of the Union`s highest
governing body, the Central Executive Committee(“CEC’).
SAMWU Institute misrepresented itself
as the SAMWU Union and bound
SAMWU to agreements.
4.5.3
The plaintiff unlawfully used SAMWU Trade Union`s accreditation
number to obtain funding from the Local
Government Sector Education
and Training Authority (“LGSETA”) and also used SAMWU
Union`s accreditation.
4.5.4
For the court to make an informed decision one would think that the
Criminal matter should be disposed of
first.
WHEREFORE,
the defendant prays that the claim against it be dismissed with costs
Alternatively the plaintiff`s action be stayed
pending the outcome of
the criminal proceedings.
[5]
On the 14
th
March 2023 this court issued the following
order:
“
1.
The special pleas 1 to 5 are dismissed with costs.
2.
The main action is removed from the roll,
3.
The wasted costs for 15 March 2023 and 17 March 2023 shall be argued
when the matter proceeds.”
[6]
As I deemed adjudication of the matter to be dealt with
immediately, due to the congested court rolls, I made the
above order
in terms of
R
49(1)(c)
of the
Uniform
Rules of Court
(“the Rules”). I
indicated that my
reasons will be given if requested and necessary. The defendant
requested the reasons in court directly after
I made the order.
[7]
From the plaintiff`s perspective the genesis of the dispute is that
the plaintiff complied and duly executed
all the contractual
agreement`s instructions. Defendant failed to pay the plaintiff in
full as per the agreement.
[8]
It is clear that the defendant is of the opinion that due to the
confusion between the SAMWU Institute and
SAMWU Union the latter
should be joined. They further argued that plaintiff wants to enforce
the agreement and want the court to
endorse its breach of the
agreement. Further did the plaintiff not adhere to stipulations of
the contract, because Clause 13.2
stipulates that the court may be
approached to obtain any urgent relief.
In casu
the matter is
not urgent.
[9]
I turn now to deal with the evidence
and arguments before me in opposition of the special pleas.
The
plaintiff answers to the special pleas of the defendant as follows:
9.1
misjoinder:
9.1.1
After the summons was served on the defendant, it opposes the matter
and pleaded. Thereafter the action
proceedings followed and the
defendant duly participated. Later defendant even amended its
pleadings. To do that, one needs information
and knowledge of the
matter. Defendant cannot now deny that they know anything about this
matter.
9.1.2
From the defendant`s trial bundle per page 44 it is clear that the
document – the “Disclosure
Certificate: Companies and
Close Corporations” the registration date of SAMWU Institute
was 15/08/2018.The address indicated
as 84 Frederick Street,
Marshalltown, Johannesburg Gauteng. Also in clause18.1 of the
agreement the address was indicated as 84
Frederick Street,
Marshalltown, Johannesburg Gauteng
9.1.3
Defendant pleaded that the SAMWU Union has an interest because some
monies were paid to plaintiff and accepted
by plaintiff, but there is
no evidence to that effect or any reason why this monies was paid to
the plaintiff for instance.
9.1.4
From the agreement per Clause 1.2 it is clear that the plaintiff
contracted with the defendant being the
correct party before the
court. The Trade Union has nothing to do with the agreement. SAMWU
Union has its own remedies against
plaintiff if it is of the opinion
that plaintiff owes them money.
9.2
non joinder:
9.2.1
There was a misappropriation of funds. There is however no evidence
to substantiate it. The court must speculate
about it. The submission
was made that some delegates of SAWU Union have a direct interest in
this matter. This is also a submission
made by SAMWU Institute
without any substance.
9.2.2
The plaintiff is adamant that the SAMWU Union was not part of the
agreement and therefore, no need to be
cited.
9.2.3
On the last page of the agreement, Mr. Molalenyane
signed on behalf of SAMWU Institute which is undisputed.
9.2.4
SAMWU Union has remedies on its own, if it is of
the opinion they have a direct interest it is strange
that it never
intervened as a party.
9.3
Alternative Dispute Resolution:
9.3.1
Clause 13.1 of the agreement stipulates that “a dispute will
not be deemed to be a dispute until one
of the parties has provided a
written notice, conveying the nature and scope of the of the dispute
to the other part”. This
was never done by the defendant.
9.3.2
In clause 13.8 states that any party shall be entitled to approach
any competent court of law having jurisdiction
to obtain any urgent
relief which may be require by such party. That is exactly what the
plaintiff did.
9.4
Arbitration
9.4.1
No dispute was declared. The dispute must be formulated to inform the
Arbitrator beforehand what the disputes
are.
[1]
9.4.2
Arbitration is far from an absolute requirement even if there is a
contract. This was stressed in the case
of
Universiteit
van Stellenbosch v JA Louw Bpk
[2]
“
Notwithstanding,
the need to respect the sanctity of commercial contracts, it is
equally acknowledged that arbitration clauses do
not necessarily oust
the jurisdiction of the court”.
9.5
Pending
Criminal proceedings against
SAMWU Institute and Mr Molalenyane.
9.5.1
Plaintiff argued that the Criminal case has nothing to do with the
case before the court.
In casu, the court
can only speculate
about the averments which was made without any substantive evidence
in this regard.
CASE
LAW:
[10.1]
In the
Civil
Practice of the High Courts of South Africa,
[3]
arbitration
as a condition precedent was discussed. ‘
“
In
King v
Harris
[4]
the expressed view that the statutory machinery was not intended to
supersede the common law. This also represents the view of
the
Appellate Division as expressed in
Rhodesian
Railways Ltd v Mackintosh
.
[5]
Section 3(2) of the Arbitration Act
[6]
empowers a court, on good cause shown,
[7]
to
order that any particular dispute referred to in the arbitration
agreement should not be referred to arbitration, or that the
arbitration agreement will cease to have effect in regard to any
dispute referred to arbitration. These provisions do not seem
to
interfere with the procedure under the common law to approach the
court by way of a special pea to determine whether a dispute
covered
by an arbitration agreement should or should not be dealt with by
arbitration the choice is thus by the litigant.”
[10.2]
Also, on page 609, supra it is further stated that:
“
when
the non- joinder or misjoinder is apparent
ex
facie
the pleadings the objection may be taken by way of an
exception.
[8]
When
evidence is required the proper procedure is by way of a special
plea.”
DISCUSSION:
[11]
Where a special plea is taken, the
onus
rests on the defendant to prove the facts underlying the special
plea.
[9]
A court must look at
the pleadings as it stands.
[10]
[11]
The defendant is required to place
sufficient information or evidence before the court to enable it to
exercise its discretion properly
and meaningfully.
[12]
A special plea embodies a substantive self- contained defence, dehors
the allegations made in respect of the plaintiff`s
cause of action as
it was explained in the case of
Mineworkers
Investments Co (Pty) Ltd v Modibane
.
[11]
CONCLUSION
[13]
The absence of the substantive evidence, the allegations and
averments mentioned in argument by the defendant, renders
the special
plea on the basis that same is lacking sufficient substance to
sustain a defence against the plaintiffs claim.
[14]
I am not persuaded that the grounds of the special pleas (on the
papers only) were of such nature that the defendant
would be
seriously prejudiced if the pleadings were to be allowed to stand as
it is.
[15]
I have considered the submissions of both counsel in respect of this
issue. In the exercise of the discretion that I am allowed,
I am of
the view that because this is an interlocutory application, the
interests of justice will best be served if the matter
proceeds and
be fully ventilated at the trial. It s the court`s responsibility to
ensure the proper administration of justice.
[16]
For all of the above reasons,
accordingly
I made the orders as I did.
BOONZAAIER,
AJ
Counsel
for Plaintiff: Adv
I Macakati
Instructed
by: Phatsoane
Henney Attorneys
Bloemfontein
Counsel
for Defendant: Adv Khumalo
Instructed
by: Kramer
Weihmann Inc
[1]
[2]
1983(4)
ALLL SA p321A
[3]
Cilliers , Loots & Nel,Vol 1 Herbstein and Van Winsen, 5
th
Edition p.607- JUTA
[4]
1909 TS292at 296
[5]
1932AD359
[6]
Act 1965
[7]
Metallurgical & Commercial Consultants (Pty) Ltd v Metal Sales
Co. (Pty) Ltd1971(2) SA 388(W).
[8]
Collin v Toffie 1944 AD456
[9]
Masuku
v Mdlalose [1997]3 ALL SA 3339(A), 1998(1) SA 1(SCA)
[10]
Drummond
Cable Concepts v Advancednet
(Pty)
Ltd
2020 (1) SA 546(GJ)
at paragraph 7
[11]
2002(6
) SA 512 (W)