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[2021] ZALAC 40
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Smith Capital Equipment (Pty) Ltd v Mergui (JA89/2020) [2021] ZALAC 40; (2022) 43 ILJ 649 (LAC) (27 October 2021)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA89/2020
SMITH
CAPITAL EQUIPMENT (PTY)
LTD Appellant
and
ISAAC
MERGUI Respondent
Heard:
30
September 2021
Delivered:
27
October 2021
Coram:
Waglay
JP, Davis JA and Kubushi AJA
JUDGMENT
KUBUSHI
AJA
Introduction
[1] This
appeal turns on the condonation application that served before the
court
a quo
, concerning the late filing by the respondent
(Isaac Mergui) of Statement of Case. The Statement of Case contained
two claims,
one relating to the respondent’s dismissal and the
other is a claim in terms of the Employment Equity Act. The court
a
quo
condoned the late filing of the respondent’s Statement
of Case with respect to his dismissal claim and appears to imply that
the claim with regard to the EEA, was a matter that could be raised
at trial.
[2] Aggrieved
by the judgment and order of the court
a quo
, the appellant,
Smith Capital Equipment (Pty) Ltd, is before us, with leave of the
court
a quo
, to appeal against the whole judgment and order.
Preliminary
Issue
[3] Before
the commencement of the hearing, the appellant’s counsel
brought to the attention of the court
that the respondent’s
Practice Note and Power of Attorney were filed a day before the
hearing of the appeal when in fact
they ought to have been filed
approximately eighteen (18) months before the hearing of the matter,
without applying for condonation.
The appellant’s Power of
Attorney was also found not to be on record. As regards the filing of
the Practice Note, there was
no issue as the appellant had filed its
Practice Note. The appellant’s counsel did not necessarily
object to the late filing
of the respondent’s Power of
Attorney, as such, a ruling was made by the court that the appellant
should file its Power of
Attorney within the week and that subject to
receipt thereof, both Powers of Attorney were accepted into the
record. The appellant’s
Power of Attorney has since been filed.
Factual
Background
[4] The
appeal intrinsically stems from the erroneous referral by the
respondent of an alleged automatically unfair
dismissal dispute (“the
dispute”) to the Commission for Conciliation, Mediation and
Arbitration (“the CCMA”)
for conciliation and to the
Metal and Engineering Industry’s Bargaining Council (“the
MEIBC”) for arbitration.
In actual fact, the dispute should
have been referred to the MEIBC for conciliation,
[1]
and ought to have been referred to the Labour Court for
adjudication.
[2]
[5] Briefly,
the respondent, who was employed by the appellant as a Quality
Manager, was dismissed from his employment
allegedly because he had
reached the normal retirement age of 65 years, alternatively 66 years
as
per
the new Human Resources Policy, and had failed to reach
an agreement with his employer as to how to continue further in his
employment.
[6] Not
satisfied with his dismissal, the respondent referred the dispute to
the CCMA for conciliation when in
fact the dispute should have been
referred to the MEIBC. As required, the CCMA transferred the dispute
to the MEIBC. However, it
was found that the MEIBC received the
dispute after the prescribed thirty (30) day period had expired and
as such in terms of s191(5)
of the LRA, the matter could proceed to
the next process without the need to hold a conciliation. The
respondent applied for arbitration
with the MEIBC instead of
referring the dispute to the Labour Court for adjudication, as a
result, the matter was dismissed due
to lack of jurisdiction.
[7] The
respondent then served his Statement of Case which he subsequently,
with the assistance of a newly instructed
legal representative,
amended. The appellant duly responded to the initial Statement of
Case and the amended Statement of Case.
[8] The
parties held a pre-trial conference where it was agreed that the
respondent would apply for condonation
for the late filing of the
Statement of Case, which condonation was accordingly applied for. In
the judgment that ensued, the court
a quo
found in favour of
the respondent and granted the condonation. Dissatisfied with the
decision of the court
a quo
, the appellant applied for and was
granted leave to appeal the whole judgment and order; hence the
appeal before us.
[9] The
Appellant’s case, as set out in its notice of appeal and as was
argued on behalf of the appellant
before us, is that, the court
a
quo
should not have granted the condonation application on the
basis of the following grounds, namely, the excessive delay by the
respondent
in referring the dispute to the court
a quo
coupled
with lack of a reasonable explanation for such delay as well as the
lack of prospects of success on the merits, and the
late filing of
the condonation application that was served almost one (1) year after
the initial referral. In addition, the failure
by the respondent to
apply for condonation in respect of the new dispute (claim in terms
of the EEA) that was raised in the amended
Statement of Case.
The
Issue to be Determined
[10] There
were, initially, two issues that required determination by this
court. The first was whether the condonation
application was properly
granted by the court
a quo
. The second was whether the court
a
quo
acted correctly in deferring the issue of whether the amended
Statement of Case was properly before the court, to trial. Underlying
this question was whether the respondent ought to have applied for
condonation of the late referral of the new dispute raised in
the
amended Statement of Case.
[11] I
deal herein only with the first issue, as the second issue was
eventually abandoned by the appellant’s
counsel when through a
question from the bench during argument, counsel could simply not
state why amongst other things the respondent
needed to apply for
condonation for that claim.
Thus,
the issue on appeal related to the condonation application in respect
of the Statement of Case.
Discussion
[11] Ordinarily,
the Labour Court has authority, on good cause shown, to condone the
non-observance of the timeframe
within which a dispute may be
referred to the Labour Court for adjudication.
[3]
[12] It
has been held that there is no comprehensive definition of what
constitutes good or sufficient cause for
the granting of the
indulgence of the non-observance of timeframes. The overriding
consideration is that the matter rests in the
judicial discretion of
the court, to be exercised with regard to all the circumstances of
the case.
[13] The
test for condonation is trite and well established. The court has a
discretion which must be exercised
judicially on a consideration of
the facts of each case. The court in
Melane
v Santam Insurance Co Ltd
,
[4]
when setting out the principles applicable to condonation had this to
say –
“
In deciding
whether sufficient cause has been shown, the basic principle is that
the court has a discretion, to be exercised judicially
upon a
consideration of all the facts, and in essence it is a matter of
fairness to both sides. . .”
[14] It
is a well-settled principle that the power to interfere on appeal in
matters of discretion is strictly
circumscribed. For a court of
appeal to interfere with the decision of the court
a
quo
where a discretion has been exercised, the test is whether the court
a quo
acted improperly and unreasonably or that it acted capriciously, or
upon the wrong principle or with bias, or whether the discretion
exercised was based on unsubstantial reasons or whether the court
a
quo
adopted an incorrect approach.
[5]
[15] In
argument before us, it was submitted on behalf of the appellant that
the court
a
quo
exercised its discretion improperly in
that it made several errors in its judgment that constitutes
sufficient reasons for this
court to interfere with the court
a
quo
’s decision. One of such errors is the fact that the
court found that the statement of case was filed thirty (30) days
late
when it was fifty-six (56) days out of time.
[16] In
addition, it was submitted, the court
a quo
in its judgment,
mentions that there is no explanation provided by the respondent for
filing the condonation application almost
one year after the referral
to the Labour Court. However, despite having criticised the fact that
there was no explanation provided
by the respondent for the period of
delay, the court
a quo
made a finding, incorrectly so it was
argued, that there are reasonable prospects on the merits that would
compensate for the lack
of the explanation and, granted condonation.
[17] The
principles upon which the court exercises its discretion have been
stated as follows in
Byron
v Duke Inc
:
[6]
[2] The
principles governing condonation applications and the factors which
weigh with this Court are
well-known and have been often restated.
The main principles are succinctly formulated in
Federated
Employers Fire & General Insurance Co Ltd and Another v McKenzie
1969 (3) SA 360
(A) at 362F - H as follows
:
‘
(T)he factors
usually weighed by the Court include
the degree of non-compliance
,
the explanation
therefor, the importance of the case,
the
prospects of success
, the respondent’s interest in the
finality of the judgment, the convenience of the Court and the
avoidance of unnecessary
delay in the administration of justice.’
(my emphasis)
[18] In
paragraph 7 of its judgment, the court
a quo
expressed itself
as follows:
‘’
[7] This
being an application in terms of the provisions of section 191 (11)
(b) of the Labour Relations
Act (LRA), it is incumbent on the
applicants to demonstrate good cause to the satisfaction of the Court
for condonation to be granted.
This Court exercises a discretion when
deciding whether to condone the late filing of a statement of claim
or not. In the exercise
of that discretion, the Court must consider a
number of factors including: the degree of delay and the reasons or
explanation in
that regard; the applicants’ prospects of
success on the merits of the main claim; and the prejudice that the
parties will
suffer should condonation be granted or refused. In the
end, the question is whether it would be in the interest of justice
to
grant or refuse condonation.
[19] It
is clear from the reading of this passage of the court
a quo
’s
judgment that it was mindful of the fact that its discretion must be
exercised on judicial grounds, and in doing so, it
properly directed
itself to all the relevant facts and principles pertaining to this
case. The question is whether such discretion
was exercised
improperly justifying interference by this court.
[20] From
the reasons that follow hereunder, I am of the view that the court
a
quo
exercised its discretion judicially and properly. From the
above passage, it is clear that the court
a quo
, in the
exercise of its discretion, considered all the principles required.
Even though the court erred in the determination of
the period of
delay (34 days as against 56 days), this in itself in not sufficient
to find that the court
a quo
failed properly or at all to
exercise its discretion. It further considered whether there was a
reasonable explanation furnished
by the respondent for such lateness
and, although it found the explanation inadequate, it was satisfied
that the respondent had
reasonable prospects of success
[21] As
already stated earlier in this judgment, in order to determine
whether good cause is shown, the following
factors together with any
other relevant factors are taken into account: the degree of
lateness, the reasons for the lateness,
the prospects of success, any
prejudice that the respondent may suffer, and the respondent’s
interest in finality.
[7]
These
factors are interrelated. Thus, a slight delay and good explanation
may help to compensate for prospects of success which
are not strong,
and strong prospects of success may tend to compensate for a long
delay.
[8]
[22] In
coming to the conclusion it made in regard to the prospects of
success on the merits of the claim, the
court
a quo
made the
following findings:
[22] On
the whole, having had regard to the nature of the delay which is
about 34 days, and the explanation proffered
in that regard, I am
satisfied that even if the delay in bringing this application was not
explained, there is no reason to suggest
that the applicant’s
claim enjoys no prospect of success. On a totality of the
circumstances of this case, the interests
of justice would dictate
that the late filing of the Statement of Claim be condoned.’
[23] It
is my view that the appellant’s insistence that there are no
prospects of success on the merits of
the claim, on the basis that
there is no arguable case, is unsustainable. On its own version, the
appellant’s case is that
in its answering affidavit to the
respondent’s founding affidavit on the condonation application,
the appellant placed a
different version to that proffered by the
respondent. The respondent failed to file a replying affidavit
dealing with the different
versions in the appellant’s
answering affidavit. Accordingly, as the appellant’s counsel
submitted, the two versions
remained in dispute, placing the trial
court in a position to determine the true facts of the matter.
[24] The
fact that there are disputes of fact on the papers, speaks for itself
that there is an arguable case that
should be referred to trial to
resolve the disputes. It is a well-known principle of our law that
where there are substantial disputes
of fact, as is the case in this
matter, such disputes must only be resolved at trial.
[25] As
regards the requirement of prejudice, the court
a quo
, in
paragraph 21 of its judgment, made the following findings, with which
I am in alignment:
“
[21] In
regards to considerations of prejudice and the conclusions reached in
relation to the prospects of success, it
cannot therefore be correct
as suggested by the respondent [appellant on appeal], that it would
suffer prejudice if it was compelled
to defend this claim. It is
appreciated that the delay in ultimately finalising this matter lies
at the door of the applicant.
However, other than the unexplained
delay in filing this application, it cannot be said that this is a
case where the applicant
did little or nothing in prosecuting this
claim, even at the stage when he was not legally represented.”
[26] It
is on all the above reasons that I have to conclude that there is no
reason for this court to interfere
with the decision of the court
a
quo
and, as such, the appeal falls to be dismissed.
Costs
[27 The
usual approach in matters of this nature is that costs do not simply
follow the result.
[9]
In any
event, the respondent as the successful party has not applied for
costs. I, therefore, find it not necessary to delve further
on this
issue but to follow the usual approach of not making a costs order.
Order
[28] In
the circumstances, I make the following order
1.
The Powers of Attorney for the appellant and the respondent are
accepted into the record.
2.
The appeal is dismissed.
3.
There is no order for costs.
Kubushi
AJA
Waglay
JP and Davis JA concur.
APPEARANCES:
FOR
THE APPELLANT: L
Erasmus
Instructed
by Du Randt Du Toit Pelser Attorneys
FOR
THE RESPONDENT: C
GRANT
Instructed
by G. J. Brits Attorneys
[1]
Section 191(1)(a) of the Labour Relations Act 66 of 1995 (LRA) reads
as follows:
“
If there is a
dispute about the fairness of a dismissal or a dispute about an
unfair labour practice, the dismissed employee or
the employee
alleging unfair labour practice may refer the dispute in writing to
–
(i) a
council, if the parties to the dispute fall within the registered
scope of that council; or
(ii) .
. .”
[2]
Section 191(5)(b)(i)
“
If a council or a
commission has certified that the dispute remains unresolved, or if
30 days have expired since the council or
the commission received
the referral and the dispute remains unresolved-
(a) .
. .
(b)
The employee may refer the dispute to the Labour Court for
adjudication if the employee has alleged that
the reason for
dismissal is –
(i) Automatically
unfair;
(ii)
. . . ”
[3]
Section 191 (11) (b) of the LRA.
[4]
1962 (4) SA 531
(A) 532B.
[5]
See
Kemp
t/a Centralmed v Rawlins
(2009) 30 ILJ 2677 (LAC) at para 55.
[6]
2002 (5) SA 483
(SCA) para 2.
[7]
Melane
v Santam Insurance Company Limited
1962 (4) SA 531
(A) at 552.
[8]
Melane
v Santam
supra.
[9]
Bester
v Small Enterprise Finance Agency SOC Ltd
&
others
[2019] ZALAC 73
; (2020) 41 ILJ 877 (LAC).