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[2012] ZAGPPHC 176
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Director General of the Department of Labour and Another v Workforce Group (Pty) (Ltd) (57110/2011) [2012] ZAGPPHC 176 (20 August 2012)
NOT
REPORTABLE
IN
THE HIGH COURT OF THE REPUBLIC
OF
SOUTH AFRICA NORTH GAUTENG, PRETORIA
Case
number 57110/2011
DATE:20/08/2012
In
the matter of
THE
DIRECTOR GENERAL OF THE DEPARTMENT OF
LABOUR
..............................
First
Applicant
THE
COMPENSATION
COMMISSIONER
.........................................................................
Second
Applicant
And
THE
WORKFORCE GROUP (PTY)
(LTD)
..........................................................................
Respondent
JUDGMENT
BAM
AJ
1.
The first applicant is the designated official to administer the
provisions contained in the Compensation for Occupational Injuries
and Diseases Act No 130 of 1993 ("COIDA"). The second
applicant is an officer appointed in terms of section 2 of COIDA
to
assist the first applicant in the performance of his functions.
2.
The respondent, commonly known as a labour broker, conducts the
business of providing temporary employment services. In its capacity
as an employer, the respondent is registered with the second
applicant in accordance with the terms of section 80(1) of COIDA.
3.
In accordance with the provisions of section 83(1) of COIDA the
respondent is obliged to pay, as an obligatory contribution to
the
compensation fund, an amount in accordance with a tariff of
assessment by the first respondent.
4.
On 11 October 2011 a default judgment was granted in favor of the
respondent against the applicants (respondents 1 and 2) and
three
others, with the effect that:
(a)
(Prayer 2) the applicants (and the other three respondents) had to
issue re-assessments to the respondent in accordance with
an order of
this Court dated 29 November 2010; and
(b)
(Prayer 4) any and all assessments issued by the first and/or second
respondents which assessments were based on an increased
assessment
rate are contrary to and not in compliance with the Court Order dated
29 November 2010.
(I
have not referred to prayer 3 of the order in view of the fact that
it was confirmed by counsel for the applicants and the respondents
that same has been abandoned by the respondent. It turned on the
repayment of certain payments made by the respondent.)
5.
Two applications were argued before this Court. The applicants
applied for the rescission of the said default judgment and the
respondent applied for the review and setting aside of certain
assessments made by the applicants. The particulars of the two
applications are as follows:
5.1
First application:
(The
application by the two applicants.)
1.
That the Court Order dated 11 October 2011, under case no 57110/11,
be rescinded and/or set aside;
2.
That the respondent pay costs of this application on an attorney and
client scale.
(The application is opposed by the respondent.)
5.2
Second application:
(The
counter application by the respondent.)
1.
That the applicants' decision taken on 4 August 2011 to increase the
rate applicable to the respondent's undertaking by 40% as
from 1
March 2007 be reviewed and set aside.
2.
That the applicant's assessment dated 27/09/2011 issued in pursuance
of the decision taken on 4 August 2011 be reviewed and set
aside.
3.
That the applicants' assessment dated 30/03/2011 in respect of the
2008 year assessment be reviewed and set aside.
4.
That the applicants be ordered to pay the respondent's costs on the
attorney-and client scale.
(Both
applicants oppose the application.)
6.
Pertaining to the first application the following facts are of
importance:
(i)
On 4 October 2010 the respondent issued a notice of motion in this
Court against the two applicants and three others, seeking
an order,
on an urgent basis, inter alia, to compel the applicants to issue
re-assessments to the respondent in accordance with
an order of this
Court dated 29 November 2010;
(ii)
The application was served, apparently by hand, on the applicants on
5 October 2011. According to the two date stamps on a
copy of the
notice it appears that the notice was served on the applicants at the
offices of the Legal Services of the Department
of Labour;
(iii)
In the notice the applicants are notified that, if they intend
opposing the application, they had to notify the respondent's
attorney of record before 16h00 on Friday, 7 October 2011, and to
file their opposing affidavit within 10 days after having filed
the
notice of their intention to oppose;
(iv)
It is further stated in the notice that if no notice of intention to
oppose is filed, that the application will be made on
11 October 2011
at l0h00;
(v)
The applicants failed to file a notice to oppose and no answering
papers were filed. The applicants were in default on the day
of the
hearing of the matter.
(vi)
The relief sought by the respondent was accordingly granted by
default by this Court on 11 October 2011.
7.
It is trite that the applicants have to advance a good reason for
their default and that it has to be shown that they have a
bona fide
defense. I will firstly deal with the question whether the applicants
have shown good cause for their default. It is
common cause that the
issue about the question whether the applicants have a bona fide
defense is integrated with the issue regarding
the merits of the
respondent's application, referred to above as the second
application.
8.
In the founding affidavit of the applicants, deposed to by ms Ella
Ntshabela, a director within the finance department of the
Compensation Fund, it is stated that the applicants were not in
willful default. Although it is admitted that the application was
served on the applicants' office on 5 October 2011, it is averred
that the application only reached the second applicant's legal
department on 11 October 2011 at around 15h00. It is further stated
that the second applicant has a standing agreement with the
Sheriff
that all legal processes and documents are to be taken to the second
applicant's legal services and to be served on an
official designated
to receive legal documents for the second applicant. It is also
stated that the application in question was
not served in accordance
with the above arrangements with the Sheriff, but that it was instead
served on the second applicant's
general registry office.
9.
During argument, I asked Mr Tokota SC, appearing for the applicants
with Mr Mashaba, whether he could address the Court pertaining
to the
apparent discrepancy in respect of the facts stated in the founding
affidavit regarding where the application was served
and the
indication on the Notice of Motion that the application was served on
the Legal Services of the Department of Labour. The
service of the
application, as indicated above, was conceded by the applicants. It
is common cause that the second applicant is
an officer appointed to
assist first applicant in terms of section 2 of COIDA. Apart from
submitting that the first and second
applicants are housed at
different locations, Mr Tokota could not take the matter any further.
It was pointed out by Mr Van den
Heever SC, appearing with mr Geyser
for the respondent, that no explanation is advanced by the applicants
why the first applicants
default, and the reason therefore, was not
addressed or referred to in the applicant's founding affidavit.
10.
The fact that the applicants are State institutions, dealing with a
huge work load, has to be kept in mind. It is appreciated
that, due
to the extent and nature of the work load of the applicants, delays
in attending to any matter may occur. What, however,
is a matter of
concern is that the applicants clearly decided not to inform this
Court why the Legal Services of the Department
of Labour, upon which
the application was served, did not react at all to oppose the
application. There is further no explanation
on record regarding the
first applicant's default. The failure of the applicants to explain
the latter's default, especially when
it is taken into account that
the application was served on the Legal Services of the Department of
Labour, casts a shadow on the
bona fides of the applicants. Both
applicants were cited as parties in the application. Accordingly I am
of the opinion that a
finding that the applicants failed to show that
they were not willfully in default is unavoidable. The applicants'
contention that
the matter was prematurely enrolled by the respondent
is without substance and need no further comment.
11.
The finding that the applicants were in willful default does however
not mean that the applicants are not entitled to have the
default
judgment rescinded, it still has to be considered in the light of the
nature of the applicants' defense and in view of
the relevant
circumstances of the case. As pointed out by Mr Lekota, this Court
has a discretion in that regard.
See
Harris v Absa Bank Ltd t/a Volkskas 2006(4) SA
527 TPD.
12.
I now turn to the merits of both applications. The initial dispute
between the parties pertaining to the assessment tariff determined
by
the applicants, culminated in an
opposed motion and a resultant
order of this Court dated 29 November 2010. The present respondent
was the applicant and the two
applicants the respective respondents.
The said order reads as follows:
"IT
IS ORDERED
1.
THAT reviewing and setting aside the decision purportedly taken by
the second respondent on 8 March 2007 to increase the assessment
rate
applicable to the applicant by 80% as from 1 March 2006 and to raise
all the applicant's future assessments at the prescribed
rate plus
80% ("the assessments'').
2.
THAT the reviewing and setting aside the assessments issued by the
first respondent to the application based on the first decision
("the
assessments").
3.
THAT exempting the applicant in terms of Section 7(2)(c) of the
Promotion of Administrative Justice Act No 3 of2000 ("PAJA")from
the obligation to exhaust the internal remedy provided for in section
91(1) of the Compensation for Occupational Injuries and Diseases
Act
No 130 of 1993 in respect of the assessments insofar as it may be
necessary.
4.THA
T extending the period of 180 days referred to in Section 7(1) of
PAJA in terms of Section 9(l)9b) of PAJA insofar as it is
necessary.
5.
THA T the first respondent and the second respondent jointly and
severally pay the costs of the application, which costs shall
include
the costs of two counsel."
13.
It is common cause that the applicants did not appeal the order of 29
November 2010. Consequently the applicants are bound in
law to comply
with the provisions of the said order. This is conceded by the
applicants. Mr Tokota, however, submitted that the
Court, in
formulating prayer 2 of the order of 29 November 2010, could not have
meant that all future assessments by the first
applicant at the
increased rate of 80% were prohibited. Mr Van den Heever contended
the opposite and submitted that paragraph 2
of the order clearly
prohibited all future increased assessments at the prescribed rate
plus 80%.
14.
In my view the order states that the decision of the applicants dated
7 March 2007, pertaining to the increase of the assessment
as from 1
March 2006, and to raise all the future assessments at the prescribed
rate and 80%, was reviewed and set aside. (My emphasis.)
The order
was directed at the contents of the applicants' decision dated 7
March 2007, and nothing else. The applicants were therefore,
in my
opinion, not prohibited by the said order to make any future
assessment, including any increased assessment.
15.
This issue, however, is not the crux of the matter. It has to be
decided whether the applicants, in making the decisions addressed
by
the respondent, complied with all the
requirements pertaining to
the lawfulness or validness thereof. If the decisions of the
applicants, challenged by the respondent,
are in fact lawful and in
compliance with all the requirements, it would mean that the
applicants will indeed have a bona fide
defense to the application
which resulted in the default judgment in question. If the decisions
are not lawful and valid, it would
necessarily follow that the
applicants' defense will lack a material component and that the
applicants would therefore not have
a bona fide defense.
Consequently, the respondent should therefore succeed with its
counter application.
16.
It is common cause that the applicants have in fact issued
re-assessments after 29 November 2010. These are the decisions the
respondent is seeking to have reviewed
and set aside. They are
listed as follows:
(i)
On 4/08/2011, in a letter regarding the respondent's assessment,
emanating from the office of the second applicant, signed by
a Mrs
Harmse as second applicant, it is stated that the rate applicable to
the respondent was increased to 40% in respect of the
year 2006.
According
to the applicants' founding affidavit, (page 15), the aim of the
applicants' decision reflected in this letter was "to
comply
with the court order of 29 October 2010".
(ii)
On 30/03/2011 the applicants forwarded a Notice of Assessment to the
respondent for the year 2008 reflecting an assessment
and an increase
of 80%.
(iii)
On 27/09/2011 a notice of assessment was sent to the respondent in
pursuance of the decision taken on 4 August 2011.
17.
The respondent's case pertaining to the reasons for review and
setting aside of the aforesaid decisions of the applicants, are
the
following:
(i)
The administrator who took the decision was not authorized to do so
by the empowering provision.
(ii)
The said administrative action was materially influenced by an error
of law.
(iii)
The said administrative action was taken for a reason not authorized
by the empowering provision.
(iv)
The administrative action was taken because of irrelevant
considerations or relevant considerations were not considered.
(v)
The administrative action was taken arbitrarily or capriciously.
(vi)The
administrative action was not rationally connected to the purpose of
the empowering provision.
(vii)
The administrative action taken deviates from the applicants' own
policy as set out in its "POLICY ON REDUCTION AND LOADING
OF THE
RATES THAT INDIVIDUAL EMPLOYERS ARE ASSESSED ON/' as such deviates
from and fails to satisfy the applicants' own standards
and/or
demands of reasonableness.
18.
It is the applicants' case that Ms Ella Ntshabela, the official who
deposed to the applicant's founding affidavit and the replying
affidavit, was the person who took the
decision to assess the
respondent at a higher rate. During argument it became clear that Ms
Ntshabele's delegation and authorization
to make the relevant
decisions, challenged
by the respondent, was the main issue of
dispute between the parties. Ms Ntshabela, as stated above, is
employed in the capacity
of director within the finance department
of
the Compensation Fund. In the replying affidavit Ms Ntshabele
stated the following regarding this issue:
"It
is further worth noting that the Director-General's power, in terms
of section 85(2), to determine a higher tariff of assessment
can be
delegated as was the case in the current matter. In short I do hold
delegated authority from the Director-General."
(Section 85(2)
of COIDA empowers the Director-General to assess an employer at a
higher rate.)
19.
The respondent attached a document to its replying affidavit marked
WFG 15 (page 286). It is stated on behalf of the respondent
that this
document was furnished to the
respondent by the applicants at the
time of the application of October 2010. The contents of the document
consist of a schedule
referring to the delegation of
certain
functions of the first respondent in respect of, amongst
others, the functions provided for in section 85(1), 85(2) and 85(3)
of
COIDA. Section 85 provides for variation of tariff assessment,
which is clearly one of the prominent aspects in this matter. It
was
submitted by Mr Van den Heeverthat the delegation and authorization
of the officer who took the decision relevant to the application
of
October 2010 was at that stage also disputed and that the applicants
attempted to proof the delegation of powers to make the
assessments
by relying on the contents of the said document. This submission was
not contested on behalf of the applicants. In
the matter at hand Mr
Tokota relied heavily on the contents of the said document, which in
his submission was proof of the delegation
of the first applicant's
powers to make the assessments in question, to Ms Ntshabela.
20.1
have considered the contents of the relevant document and the
submissions by counsel and have arrived at the conclusion that
the
contents of the document prove nothing else but that certain powers
of the first applicant should be delegated to specific
appointed
members of the first applicant's staff.
21.
It is common cause that no documentary proof of Ms Ntshabele's
authorization and delegation by the Director-General was attached
to
the applicants' papers. Accordingly, what was before Court in that
regard, was no more than the ipse dixit of ms Ntshabele.
Mr Tokota
submitted that in view of the contents of the document, WFG 15, Ms
Thabela's word should be held to be sufficient proof
of her delegated
powers. It should therefore be accepted (a) that it is practice, and
to be expected, that the Director-General
will have to delegate his
powers in terms of the provisions of COIDA, and,(b) that the powers
in question were in fact delegated
to Ms Ntshabela.
22.
However, the question remained whether the applicants were not
obliged to prove that ms Nsthabela was in fact the delegated
person
at the relevant time, especially in view of the fact that it was
pertinently contested by the respondent.
In
this regard Mr Van den Heever referred me to Kasiyamhuru v Minister
of Home Affairs and Others 1999(1) SA
643 WLD 649
D, submitting that
the applicants were obliged to furnish proof of ms Ntshabela's
delegated powers.
23.
Section 3(1) of COIDA provides for delegation of powers by the first
respondent.
" 3 Delegation of powers and assignment of duties
by Director-General (1) The Director-General may, subject to such
conditions
as he or she may determine, delegate any of his or her
powers or assign any of his or her duties to the commissioner, or any
officer
or employee referred to in section 2(l)9b), and may at any
time cancel any such delegation or assignment"
24.
From the wording of the wording of section 3 it is clear that any
delegation may at any time be withdrawn by the Director-General.
In
my opinion it was accordingly incumbent on the applicants to furnish
documentary proof of Ms Ntshabela's delegation and that
the
delegation had not been withdrawn at any time. As discussed above,
the document, WFG 15, does not provide proof of Ms Ntshabela's
alleged delegation at all.
25.
To attach documentary proof of the delegation of ms Ntshabela would
have been a simple exercise. No reason for the applicants'
failure in
this regard was advanced by Mr Tokota. It is further surprising that
no attempt was made to have such delegation, if
it indeed existed,
available at court when the arguments commenced.
26.
I find myself in respectfully agreement with the sentiments and
considerations expressed in Kasiyamhuru, supra, regarding the
lack of
proof of the delegation. In my view the failure of the applicants in
this matter to furnish proof of the delegation of
Ms Ntshabela, is
fatal to the applicants' case, pertaining to both applications.
27.
The respondent's contention, or ground for review, namely that the
administrative action taken deviates from the applicants
own policy,
seems to be a consideration in favor of the respondent. However, in
view of my finding regarding the delegation issue,
I deem it
unnecessary to consider that issue in any depth.
28.
The applicants further contended that respondent should have availed
himself of the internal remedy provided for in the provisions
of
section 90 and 91 of COIDA. Mr Tokota submitted that the respondent
should have applied to the first applicant to have the decisions
in
question reviewed in terms of the provisions of section 90, or
appealed against the decisions of the first applicant in terms
of the
provisions of section 91.
29.
Mr Van den Heever argued that the first applicant's powers regarding
review of decisions are limited, in terms of the provisions
of
section 90, to claims for compensation or an award for compensation.
I agree with Mr Van den Heever, the provisions of section
90 are
clear and unambiguous. No provision is made for the review of
assessments applicable to this matter.
The
relevant part of section 90(1) reads as follows:
"The
Director-General may after notice, if possible, to the party
concerned and after giving him an opportunity to submit
representations, at any time review any decision in connection with a
claim for compensation or the award of compensation on the
ground
30.
Regarding a possible appeal in terms of sect 91 of COIDA, it has to
be considered whether a valid decision by the first applicant
existed
which could have been subject to
an appeal in terms of the
provisions of the section.
Section
91(1) provides as follows:
"Any
person affected by a decision of the Director-General... may, within
180 days after such decision, lodge an objection
against that
decision with the commissioner in the prescribed manner."
Section
91 provides for an objection against a decision of Director-General
(first applicant) to be lodged with one of his sub-ordinates,
the
Compensation Commissioner (second applicant). (See definition of
commissioner in section 1 of COIDA.) The objection will then
be heard
by a presiding officer in the first applicant's department,
designated by the first applicant. This situation seems to
be
arguably untenable, especially in view of the history of the disputes
between the parties.
31.
However, in view of my finding that the decisions in question,
purportedly taken by a delegate of the first applicant, are unlawful
and un-valid, the decisions relevant to this matter could not, and
cannot be subject to an appeal in terms of the provisions of
sect 91
of COIDA.
32.
The parties are in agreement that this matter justifies the costs of
two counsel. This aspect was not argued in court, but is
contained in
a letter addressed to me by counsel the day after the hearing.
Pertaining to the second application, in view of the
history of the
dispute between the parties, the costs order as sought by the
respondent should be granted.
Accordingly
I make the following order:
AD
first APPLICATION
1.
The applicants' application for the rescission of the default
judgment dated 11 October 2011 under case no 57110/11 is dismissed.
2.
The applicants are ordered to pay the costs, including the costs of
two counsel.
AD
SECOND APPLICATION
1.
The applicants' decision taken on 4 August 2011 to increase the rate
applicable to the Respondent's undertaking by 40% as from
1 March
2007 is reviewed and set aside.
2.
The applicant's assessment dated 27/09/2011 issued in pursuance of
the decision taken on 4 August 2011 is reviewed and set aside.
3.The
applicants' assessment dated 30/03/2011 in respect of the 2008 year
of assessment is reviewed and set aside.
4.
The applicants are ordered to pay the respondent's costs, including
the costs of two counsel, on the attorney-and-client scale.
AJ
BAM
Acting
judge of the high court.
17
Augustus 2012