About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2024
>>
[2024] ZALCJHB 118
|
|
Shillaw v Icubed Sales (Pty) Ltd (J1329/2023) [2024] ZALCJHB 118 (12 March 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: J 1329/23
In
the matter between:
KERRY
SHILLAW
Applicant
and
ICUBED
SALES (PTY) LTD
First Respondent
DEEPAK
LOGANATHAN Second
Respondent
Heard:
25 January 2024
Delivered:
12 March 2024
This
judgment was handed down electronically by consent of the parties’
representatives by circulation to them via email.
The date for
hand-down is deemed to be on 12 March 2024.
JUDGMENT
PRINSLOO,
J
Introduction
[1]
The Applicant approached this Court for an order to find the First
Respondent (ICubed) and the Second Respondent (Respondent)
guilty of
contempt of Court. The Respondent is the sole director of ICubed. He
opposed the application and filed an explanatory
affidavit.
Brief
history
[2]
The Applicant was employed by ICubed as chief executive officer (CEO)
in August 2021 until she was dismissed on 1 February
2022. The
Applicant subsequently referred an unfair dismissal dispute to the
CCMA and on 5 August 2022 an arbitration award under
case number GAJB
4013 was issued in her favour, ordering ICubed to pay compensation in
the sum of R 1 740 000.
[3]
ICubed subsequently filed an application for review under case number
JR 1847/2022. During January 2023, the arbitration
award was
certified and the Applicant obtained a writ of execution. On 22 June
2023, the sheriff attended at the premises of ICubed
and attached
various assets. However, on 26 June 2023, the Respondent’s
attorneys indicated that the attached assets belonged
to a sister
company of ICubed.
[4]
On 26 July
2023, the Applicant’s attorneys requested security from ICubed,
as provided for in section 145(7) and (8)(b) of
the Labour Relations
Act
[1]
(LRA) and were informed
by its attorneys that the Respondent was considering placing ICubed
into liquidation because it was “
heavily
indebted to its creditors
”.
[5]
On 3 August 2023, the Applicant approached this Court on an urgent
basis, seeking an order that ICubed be ordered to furnish
security,
within 48 hours of the order being made, in the sum of R 2 000 000,
as provided for in section 145 of the LRA
and that ICubed and/or its
directors/representatives/shareholders/ employees be interdicted from
placing ICubed into provisional/final
liquidation and or business
rescue, prior to the furnishing of security.
[6]
The Applicant’s case was that the review application was filed
solely to frustrate her claim and to avoid paying
her. She further
submitted that no proper security was furnished and in the review
application the Respondent stated that at the
end of the 2021/2022
financial year, ICubed recorded losses in excess of R 6 million. She
expressed a real fear that the Respondent
would move the assets of
ICubed, that he would contrive the financial state of ICubed in order
to avoid paying out the compensation
awarded to her and that ICubed
would be placed into liquidation or business rescue.
[7]
The urgent application was enrolled for hearing on 10 August 2023,
when the following order was issued:
‘
1. The
non-compliance with the ordinary Rules of Court, including the
provisions of rule 7, and the manner of service is condoned
and the
matter is enrolled and heard on an urgent basis in terms of rule 8,
and further the applicant’s deviations from the
directives by
this Court are condoned.
2. The respondent
is ordered to furnish security in the sum of R2 000 000.00
(Two Million Rand) in terms of section
145(7) read with
section
145(8)(b)
of the
Labour Relations Act 66 of 1995
, by:
2.1 Furnishing a
valid and irrevocable security bond issued by a duly authorised and
registered Financial Services Provider;
or
2.2. By payment of
security into the trust account of the applicant’s attorneys,
namely Ian Levitt Attorneys, with Trust
Account details as follows:
Ian Levitt Attorneys
Trust Account
Bank: ABSA
ABSA Account no: 40 –
4625 – 3714
Branch: […]
Branch name: […]
Ref: Security MAT 3938
Within 48 hours of this
order being made, failing which the respondent’s application
for review under case number JR 1874/2022
against the award of the
second respondent dated 5 August 2022, shall automatically be
dismissed with costs.
3. The respondent
and/or its directors and/or representatives and/or shareholders
and/or employees are interdicted from placing
the respondent into
provisional and/or final liquidation and/or business rescue, prior to
the furnishing of security as provided
for in paragraph 2
supra
.
4. The costs of
this application are to be paid by the respondent on the attorney and
client scale.’
[8]
On 22 September 2023, the Applicant filed a contempt of court
application because the Respondent failed to comply with
the terms of
the Court order of 10 August 2023. The contempt of Court application
was heard on 25 January 2024.
Contempt
of Court: general principles
[9]
In
Bruckner
v Department of Health and others
[2]
,
the
Court dealt with the requirements for contempt and it was held that:
‘
It
is trite that an applicant in a contempt of court application must
prove beyond a reasonable doubt that the respondent is in
contempt.
An applicant must show:
(a)
that the order was granted against the respondent;
(b)
that the respondent was either served with the order or informed of
the grant of the order against him and could have
no reasonable
ground for disbelieving the information; and
(c)
that the respondent is in wilful default and mala fide disobedience
of the order.’
[10]
In
Anglo
American Platinum Ltd and another v Association of Mineworkers and
Construction Union and others
[3]
,
the
Court has held that:
‘
The
principles applicable in an application such as the present are
well-established. In
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006
(4) SA 326
(SCA)
,
the Supreme Court of Appeal observed that the civil process for a
contempt committal is a 'peculiar amalgam' since it is a civil
proceeding that invokes a criminal sanction or its threat. A litigant
seeking to enforce a court order has an obvious and manifest
interest
in securing compliance with the terms of that order but contempt
proceedings have at their heart the public interest in
the
enforcement of court orders (see para 8 of the judgment). The court
summarized the position as follows at para 42:
“
To
sum up:
(a)
The civil
contempt procedure is a valuable and important mechanism for securing
compliance with court orders, and survives constitutional
scrutiny in
the form of a motion court application adapted to constitutional
requirements.
(b)
The respondent in
such proceedings is not an "accused person", but is
entitled to analogous protections as are appropriate
to motion
proceedings.
(c)
In
particular, the applicant must prove the requisites of contempt (the
order; service or notice; non-compliance; and wilfulness
and
mala
fides
)
beyond reasonable doubt.
(d)
But once the
applicant has proved the order, service or notice, and
non-compliance, the respondent bears an evidential burden in
relation
to wilfulness and
mala
fides
:
Should the respondent fail to advance evidence that establishes a
reasonable doubt as to whether non-compliance was wilful and
mala
fide
,
contempt will have been established beyond reasonable doubt.
(e)
A
declarator
and other appropriate remedies remain available to a civil applicant
on proof on a balance of probabilities.”'
[11]
In
Matjhabeng
Local Municipality v Eskom Holdings Limited and Others; Mkhonto and
Others v Compensation Solutions (Pty) Limited
[4]
(Matjhabeng),
the
Constitutional Court confirmed the requisites for contempt of court
as follows:
‘
I
now determine whether the following requisites of contempt of court
were established in
Matjhabeng
: (a) the existence of the
order; (b) the order must be duly served on, or brought to the notice
of, the alleged contemnor; (c)
there must be non-compliance with the
order; and (d) the non-compliance must be wilful and
mala
fide
. It needs to be stressed at the outset that, because the
relief sought was committal, the criminal standard of proof −
beyond
reasonable doubt − was applicable.’
[12]
The Applicant has to prove the aforesaid
requisites beyond reasonable doubt and I will deal with them in turn.
[13]
Once
the applicant has proved the order, service or notice, and
non-compliance, the respondent bears an evidential burden to adduce
evidence to rebut the inference that the non-compliance was not
wilful and
mala
fide
.
If the respondent fails to advance evidence that establishes a
reasonable doubt as to whether non-compliance was wilful and
mala
fide
,
contempt will have been established beyond reasonable doubt.
[5]
[14]
To
establish non-compliance requires more than a failure to comply with
the order. In
Matjhabeng,
[6]
the
Constitutional
Court
affirmed
that contempt of court does not consist of mere disobedience of a
court order, but of “
contumacious
disrespect for judicial authority
”.
The requirement of wilfulness and
mala
fides
means that contempt is committed not by a mere disregard of the court
order, but by the demonstration of a deliberate and intentional
violation of the court’s dignity, repute or authority.
[7]
Analysis
Existence
of the order and service
[15]
In casu,
the existence of the Court order is not disputed.
[16]
Service of the Court order is disputed.
[17]
The Applicant’s version is that, after judgment was handed down
on 10 August 2023, a copy of the Court order was
served
electronically upon the Respondent’s attorneys of record, at
13h56. The Court order was physically served on ICubed
on 23 August
2023 and it was (attempted) served on the Respondent via the sheriff
on 1 September 2023.
[18]
The Respondent’s version is that in the urgent application
brought under case number JR 1874/2022, he was not cited
as a
respondent, nor was any of ICubed’s employees or shareholders.
Despite not being cited, a Court order was granted to
the effect that
ICubed and/or its directors/representatives/ shareholders/employees
be interdicted from placing ICubed into provisional/
final
liquidation and or business rescue, prior to the furnishing of
security.
[19]
The
Respondent explained that upon receipt of the urgent application, he
contacted ICubed’s attorneys and he was advised by
Rams
Attorneys
inter
alia
that
if the company was insolvent, the shareholders may pass a resolution
to place it in liquidation, that placing a company in
liquidation is
a right afforded to shareholders in terms of the provisions of the
Companies Act
[8]
and that a
director was obliged to place a company in business rescue if the
company is financially distressed.
[20]
On considering the advice provided, the Respondent took a decision to
place ICubed in liquidation as it was inevitable
that ICubed would be
placed in liquidation. On 7 August 2023, a special resolution was
passed that the “
company be wound up by way of creditors’
voluntary winding up
”. The Respondent’s attorneys
transmitted the voluntary liquidation documents to the Companies and
Intellectual Property
Commission (CIPC) on 10 August 2023.
[21]
The Respondent denies that he was aware of the Court order, as it was
not served on him until 1 September 2023 and that
he cannot be in
contempt of the court.
[22]
The Applicant has to show beyond reasonable doubt that
the
Court order of 10 August 2023 was duly served on or brought to the
notice of the Respondent. The Applicant submitted that “
The
respondents, despite its legal representative being fully aware of
the court order, proceeded in their attempt to place the
company in
liquidation, prior to the applicant’s urgent application being
heard on 10 August 2023”.
There
is a number of difficulties with the Applicant’s averment. On
the Applicant’s own version, the Court order was
emailed to
Vilikazi Attorneys at 13h56 on 10 August 2023 and to this day the
Applicant’s legal representatives were unable
to confirm
receipt thereof with Vilikazi Attorneys. This does not show, beyond a
reasonable doubt, that the Respondents’
legal representatives
were fully aware of the Court order, nor does it constitute service
on the Respondent and his knowledge of
the Court order cannot be
inferred.
[23]
The Court order was served by the sheriff on 1
September 2023 and applying the high standard of beyond reasonable
doubt, this Court
is not in a position to accept that the Court order
was served on the Respondent before 1 September 2023 and there is no
evidence
to show that he was indeed notified about it before the said
date. An email sent to Vilikazi Attorneys on 10 August 2023 and
physical service on ICubed on 23 August 2023 is not sufficient
to constitute proper service on the Respondent or to show that the
Respondent was aware of the Court order.
[24]
The Applicant did not prove beyond reasonable doubt that the Court
order was served on ICubed before 23 August 2023 and
on the
Respondent prior to 1 September 2023.
Non-compliance
with the Court order
[25]
The next consideration is whether the Respondents are in wilful and
mala fide
disobedience of the Court order, which
the
Applicant must prove beyond a reasonable doubt.
[26]
The Applicant’s case is that the Respondents,
despite
its legal representative being fully aware of the court order,
proceeded in their attempt to place the company in liquidation,
prior
to the Applicant’s urgent application being heard on 10 August
2023. However, the liquidation was only with effect
from 14 August
2023, well after the Court order was granted and served.
[27]
The Respondent’s case is that the
resolution to place ICubed in liquidation was passed on 7 August 2023
and the liquidation
commenced on 10 August 2023, prior to the Court
order being granted or served on him.
[28]
The winding
up or liquidation of a company involves the closing and dissolution
of the company through the recovery and sale of
its assets and the
payment of its outstanding debts and shareholders. The winding up or
liquidation of companies is regulated by
two pieces of legislation,
the 2008 Companies Act (2008 Act) and, to an extent, the
now-since-repealed 1973 Companies Act
[9]
.
[29]
Section 79
of the 2008 Act provides that a solvent company may be dissolved
either by (i) voluntary winding-up initiated by the
company and
conducted either by the company itself (or its creditors) as
determined by a special resolution of the company, or
(ii) by way of
court order. The High Court
in
Furniture Bargaining Council v AXZS Industries (Pty) Ltd trading as
Don Elly Enterprises
[10]
confirmed that the voluntary winding up of a company does not
commence until the special resolution has been filed with the CIPC.
[30]
The voluntary winding up of a company begins when the resolution of
the company has been filed and
in casu,
this happened on 10
August 2023.
[31]
I cannot find that the Respondents acted in wilful and
mala fide
disobedience of the Court order. The Respondents commenced with
the process of voluntary liquidation prior to the existence of a
Court order which interdicted such a process and by the time when the
resolution was filed on 10 August 2023, the Respondents were
not
served with the Court order. They cannot be in wilful default of a
Court order they were not aware of.
[32]
I accept that the Respondent was aware by 3 August 2023 of the fact
that the Applicant had approached this Court for
urgent relief and
that the relief, if granted, would include an order interdicting him
from placing ICubed into liquidation or
business rescue. I further
accept that the resolution that was subsequently passed on 7 August
2023 and the filing thereof with
the CIPC on 10 August 2023, could be
attempts to avoid paying the Applicant the compensation awarded to
her. However deplorable
and calculated this might be, it does not
constitute contempt of Court. Knowledge of an application, yet to be
decided, does not
constitute contempt of Court and the Respondents’
conduct, prior to the obtaining of the Court order, was not
interdicted
and restrained and pre-empting what the Court would do,
also does not constitute contempt.
[33]
For the Applicant
in casu
to succeed with its contempt of
Court application, she has to show, beyond a reasonable doubt, that
the Respondent is in wilful
and
mala fide
disobedience of the
Court order of 10 August 2023. The mere fact that there is
non-compliance with the Court order is not sufficient
– more is
required. The courts have confirmed that contempt of court does not
consist of mere disobedience of a court order,
but of “
contumacious
disrespect for judicial authority”.
[34]
Based on the facts placed before this Court, the Applicant failed to
prove beyond reasonable doubt that the Respondent
is in wilful
default and
mala fide
disobedience of a Court order. The
resolution was passed at a time when there was no Court order granted
and the subsequent filing
thereof, happened at a time when the Court
order was not served on the Respondents and there is no evidence
before this Court to
rebut the Respondent’s version that at the
time, he was not aware of the Court order.
[35]
As a result, this application has to fail.
[36]
I am alive to the fact that the outcome of this application will be
unsatisfactory to the Applicant, who took all possible
measures to be
paid the money she was awarded as compensation. I also took note of
the Applicant’s personal circumstances,
as set out in her
affidavit, and that the Respondents’ conduct is in all
probability calculated and is no doubt frustrating
the Applicant.
However, the threshold to find the Respondents in contempt of Court
is high and the onus to do so, is on the Applicant,
which onus she
was unable to discharge.
Costs
[37]
I
nsofar as costs are concerned, this Court has a
broad discretion in terms of section 162 of the LRA to make orders
for costs according
to the requirements of the law and fairness.
[38]
Both parties argued that a cost order should be
awarded. However, in my view, this is a case where
the
interests of justice will be best served by making no order as to
cost.
[39]
In the premises, I make the following order:
Order
1. The application
is dismissed;
2. There is no
order as to cost.
Connie Prinsloo
Judge of the Labour Court
of South Africa
Appearances:
For the
Applicant:
Advocate N Nortjè
Instructed
by:
Ian Levitt Attorneys
For the
Respondents:
Mr Moeketsane from Rams Attorneys
[1]
Act
66 of 1995, as amended.
[2]
(2003)
24 ILJ 2289 (LC) at para 26.
[3]
[2014]
ZALCJHB 60;
(2014)
35 ILJ 2832 (LC) at para 4.
[4]
[2017]
ZACC 35
;
2017 (11) BCLR 1408
(CC) at para 73.
[5]
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) at para 41.
[6]
Matjhabeng
supra
at para 65.
[7]
Dibakoane
NO v Van den Bos and Others; Van den Bos and Others v Gugulethu and
Others
[2021] ZAGPJHC 652 (17 August 2021) at para 29.5.
[8]
Act
71 of 2008, as amended.
[9]
Act
61 of 1973 (repealed).
[10]
[2020]
1 All SA 391
(GJ) at para 49.