Nzimande and Others v Zenex Oil (Pty) Ltd and Others (DA13/2000) [2000] ZALAC 29 (14 December 2000)

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[2000] ZALAC 29
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Nzimande and Others v Zenex Oil (Pty) Ltd and Others (DA13/2000) [2000] ZALAC 29; [2001] 4 BLLR 419 (LAC); (2001) 22 ILJ 652 (LAC) (14 December 2000)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD
AT DURBAN
CASE NO. DA 13/2000
In
the matter between
ISAAC
NZIMANDE
1
st
Appellant
BEVERLEY
BRODIE
2
nd
Appellant
A
FURTHER 72 APPLICANTS (AS PER
ANNEXURE “X” TO
THE APPLICANTS’
STATEMENT
OF CLAIM)
3
rd
to 74
th
Appellants
and
ZENEX
OIL (PTY) LTD
1
st
Respondent
WIMMERA
INVESTMENTS (PTY) LTD
2
nd
Respondent
WALDECK
INVESTMENTS (PTY) LTD
3
rd
Respondent
VALAIS
INVESTMENTS (PTY) LTD
4
th
Respondent
WORLDWIDE
AFRICAN INVESTMENTS (PTY)
5
th
Respondent
THE
STANDARD BANK OF SOUTH AFRICA LTD
t/a
STANDARD CORPORATE AND MERCHANT BANK
6
th
Respondent
JUDGMENT
DAVIS
AJA
[1] This is an appeal against a ruling by
Pillay AJ
(as she then was)
in terms of which
appellants were refused leave to amend their statement of claim. The
background to the dispute between the parties
which was referred to
the Commission for Conciliation Mediation, and Arbitration (the
‘CCMA’) which certified the dispute to
be unresolved on 11 March
1998 is extremely difficult to describe coherently as a result of the
unsatisfactory manner in which the
statement of claim both in its
initial and amended versions have been drafted.
[2 ] To the extent that
there is no material difference between the two versions of the
statement of claim, it is possible to summarise
the essential facts
which gave rise to the dispute thus: In 1986 Esso Africa Inc, the
owner of shares in Esso (Pty) Ltd (“Esso”)
disinvested from South
Africa hereby relinquishing its shareholding and control of the
business to an offshore entity, the managing
trustee of which was
Radite Ltd, a company incorporated on the Isle of Mann. It appears
to have been a term of the sale of the
business by Esso Africa Inc.
to the trust that employees of Esso were to benefit annually from a
distribution of 2½ % of the company’s
pre-tax profits amongst all
of the employees of that company.
[3] As with much of the
statement of case, there is no clarity as to how Esso transmogrified
into Zenex Oil (Pty) Ltd. However in
April 1997 the business of
Zenex Oil (Pty) Ltd (“the Old Zenex”) was sold as a going concern
to fourth respondent which changed
its name to Zenex Oil (Pty) Ltd
(“the New Zenex”).
[4] Applicants allege
that in February 1997 pursuant to the announcement of the April sale,
employees including applicants of the
Old Zenex were promised shares
in the New Zenex by the Chief Executive Officer and three other
directors of the Old Zenex. Thereafter
the sale took place and the
New Zenex was born. The shareholding in the New Zenex was held in
the amount of 49% by the Standard
Bank of South Africa Ltd (which is
the sixth respondent) constituting 490 preference shares and 51% by
Wimmeria Investments (Pty)
Ltd (which is the second respondent and to
which I shall refer to as “Wimmeria”) being 510 ordinary shares,
these constituting
the entire issue of ordinary shares in the
company. In turn the shareholding in Wimmeria was held as to 49% by
Waldeck Investments
(Pty) Ltd (which is the third respondent and to
which I shall refer to as “Waldeck”) and 51% by Worldwide African
Investment
Holdings (Pty) Ltd (“Worldwide”) which is described as
a black empowerment company.
[5] In terms of the
Waldeck shareholder agreement, applicants allege that the shares
thereof were held by the four directors of the
Old Zenex together
with a number of key employees.
[6] Applicants
contended that they were not allotted any shares in Waldeck and they
were thereby excluded from participating in the
benefit of any of the
issued ordinary shares of the company and the sale thereof. They
contended further that the various agreements
produced the result
that certain employees of the New Zenex were allocated shares on a
selective basis which amounted to direct
discrimination on an
arbitrary ground. They contended further that the New Zenex was a
party to an agreement that expressly contemplated,
and endorsed both
the control of its shares being exercised selectively and arbitrarily
by certain employees through Waldeck and
that Waldeck, Wimmeria and
the New Zenex were a single entity in mind and management.
Furthermore as none of the African employees
of the New Zenex had
been allocated shares in Waldeck such employees had been
differentially treated on the grounds of race.
[7] For these reasons
applicants declared a dispute with first respondent claiming that
first respondent’s conduct constituted an
unfair labour practice
relating to discrimination and hence was in contravention of item
2(1)(a) of part B of Schedule 7 of the Labour
Relations Act 66 of
1995 (‘the LRA’).
[8]
The initial statement of claim was
filed on 30 June 1988. Respondents’ reply to the statement of case
was amended by substituting
the entire document on 30 November 1998.
The matter was then enrolled for trial between 22 –26 May 2000. At
the commencement
of the trial on 22 May 2000 appellants brought an
application for the amendment of their statement of claim which
application was
opposed. The application sought to replace the
original statement in its entirety.
[9] It was common cause
that at least one aspect of this amendment, paragraph 14 of the
statement of claim was substantial and did
not merely constitute a
formal amendment. In paragraph 13 of its original statement of claim,
applicants alleged that the promise
of shares had been made by David
Knowles, a director of Zenex Oil (Pty) Ltd which appears to be the
Old Zenex. In paragraph 14 of
the proposed statement of claim,
applicants expanded on this allegation and contended that the promise
of shares had been made by
Mr Knowles together with three of his
colleagues namely, Paul Richards, the Chief Executive Officer of the
Old Zenex, Terry Billing
and Harry Govind, both of whom were
directors of the company.
[10] In refusing the application for the
amendment of the statement of claim,
Pillay AJ
said, “An
application for an amendment should not be refused purely because of
the delay in bringing the application. However,
the delay in this
matter amounts to dilatoriness on the part of the applicant,
particularly as they were alive to the need for the
amendment more
than a year and four months before the trial. Furthermore, they were
reminded periodically about the amendment.
The applicants have no
one but themselves to blame for this application being refused.
The applicants were also alive to the prejudice
caused to the respondent as a result of the delay in securing a trial
date. I refer
here to respondents’ offers to refer the matter to
private arbitration at the cost of the respondents and with the right
of appeal.
The prejudice to the respondent which was conceded,
cannot be cured by an adjournment and an appropriate order for
costs. The
next available trial date is six months away.
Allegations of discrimination, particularly, racial discrimination,
are serious and
will impact on the business of the respondent.”
[11]
Mr van Niekerk, who appeared on
behalf of the applicants, submitted that the late bringing of an
amendment was in itself, in the absence
of prejudice, no ground for
refusing such amendment. In support for this submission he relied,
inter alia
,
on
Trans-Drakensberg Bank Ltd v
Combined Engineering (Pty) Ltd
1967 (3) SA 632
(D) at 642 C-D and
Mabaso v Minister of Police
1980(4) SA 319 (W) at 323 D.
[12] The background to
Mabaso’s
case
illustrates the context of the principle laid down in these two
cases. In
Mabaso’s
case, plaintiff issued summons in
December 1972 claiming damages from defendants arising from a
shooting incident in July 1972 and
based on the allegation of
assault. Defendants pleaded in September 1973. The notice of
enrolment was filed in November 1973 and
by notices issued in March
1977, May 1977 and February 1980 plaintiff’s particulars of claim
were amended without objection by
defendants. The action was set
down for hearing on 8 March 1979 but by consent was removed from the
roll. It was again set down
for hearing on 16 May 1980. On 5 May
1980 plaintiffs gave notice of further amendments to the particulars
of claim which sought
to base the claim on an allegation of injury
caused by second defendant’s recklessness or negligence and only in
the alternative
on the basis of an intentional act. This amendment
also sought to increase the second plaintiff’s claim for damages
because it
appeared that he had become a paraplegic as a result of
the shooting. Defendants objected to the proposed amendments on the
grounds,
inter alia,
of unexplained lateness thereof.
Insofar as this objection was concerned
Goldstone AJ
(as he
then was) said “In my opinion, even in a gross case such as the
present, the Court should grant amendments such as those
now sought,
unless there is a likelihood of prejudice to the defendants which
cannot be cured by a suitable order for costs” (at
323 D).
[13] Mr Van Niekerk pressed the point that this
dictum
in
Mabaso’s
case was equally applicable to the
present case in that respondents’ right to finality should be
trumped by appellants’ interest
in a proper ventilation of the
dispute between the parties, particularly when a breach of the
former’s right could easily be cured
by an appropriate order as to
costs. He further submitted that the “sparse” reasoning of
Pillay AJ ,
as he described it, was incorrect in law in that
the learned judge justified the dismissal of the application in terms
of the principle
of delay without an appropriate examination of the
question of prejudice.
[14] Mr Gauntlett, who
appeared together with Mr La Grange on behalf of respondents,
submitted that in interlocutory matters of this
kind in which the
trial court is visited with a discretion, appellate tribunals should
adopt the principle of a margin of appreciation
which should be
granted to trial courts to make such rulings provided that the
discretion was exercised judicially.
[15] Although
Pillay AJ’s
ruling might
have been somewhat cryptically phrased, the basis thereof is clear,
namely that there was an unacceptable delay coupled
with clear
prejudice to respondents. This is evident from a careful analysis of
the ruling. The need to amend the statement of
claim was first
anticipated at the pre-trial conference held in December 1998. A
delay in the amendment of the statement of claim
was caused primarily
by applicants’ need to procure an appropriate opinion by counsel on
their prospects of success. It took some
fifteen months to obtain
this opinion. Notwithstanding that counsel’s opinion became
available in April 2000, the amendment was
only faxed to respondents’
attorneys on 19 May 2000, that is two days before the trial was due
to commence. Accordingly,
Pillay AJ
found that the delay
amounted to dilatoriness on the part of the applicant. Furthermore
the learned judge found that the prejudice
in this case could not be
cured by an appropriate order for costs, for allegations of
discrimination, particularly racial discrimination,
are so serious
that they would impact on the business of respondents which
consequently had an understandable desire to expedite
the resolution
of the dispute.
[16] Although Mr Van Niekerk contended that
there was no mention of prejudice in respondents’ replying papers,
the record containing
the addresses of counsel to the
court a quo
reveals clearly that counsel for respondent directed the
court
a quo’s
attention to the allegations of racial discrimination
and then submitted “To say about someone, you discriminated on the
grounds
of race, you’ve discriminated on some other ground, we’re
not sure what it is yet, but you have behaved arbitrarily you’ve
discriminated. Those are very serious allegations and the
respondents have every interest in putting that allegation to rest
and
having finality”.
[17] In my view, there is no justification for
a conclusion that
Pillay AJ
did not exercise a judicial
discretion based on considerations both of delay and prejudice to the
respondent.
[18] However, Mr Van Niekerk sought to persuade
us that delay alone is an insufficient ground to reject such an
application . He
contended that in the present case there was an
insufficient evidential basis to show the necessary prejudice. Even
if this approach
were correct , it would not necessarily justify
the setting aside of the ruling of the
court a quo
. Although
Trans-Drakensberg Bank Ltd
,
supra
and
Mabaso,
supra
are authority for the proposition that,
despite delay, the court should grant an amendment unless there is a
likelihood of prejudice
which cannot be cured by a suitable order of
costs, the question arises as to whether these
dicta
are
equally applicable within the context of the LRA.
[19] Section 1 of the
LRA sets out the purpose of the Act which includes the promotion of
the effective resolution of labour disputes.
Within the context of
labour relations, efficacy must be coupled with expedition. Where a
permanent relationship between the parties
exists as in this case, a
lengthy delay before a dispute can be resolved may harm this
relationship and hence cause considerable
prejudice to one or both of
the parties. For this reason the unexplained delay of eighteen months
can, of itself, justify the refusal
of an application to amend a
statement of claim.
[20] In terms of principles which have been
accepted by the courts, no amendment will be allowed, save perhaps in
exceptional circumstances,
where the pleading as a result thereof
would become excipiable . See
Trans-Drakensberg Bank Ltd,
supra
at 641A-B;
Caxton & Others v Reeva Forman (Pty) Ltd and
Another
1990(3) SA 547(A) at 565 G-I.
[21] There are
considerable difficulties in establishing whether applicants have a
cause of action in their proposed statement of
claim. The allegation
of a promise of shares was that appellant would receive such shares
in the New Zenex. However in paragraph
18 the identity of the shares
complained of changes and appellants allege that they were never
allotted shares in Waldeck. It should
be noted that Waldeck is
allegedly a minority shareholder in Wimmeria which holds all the
ordinary shares in the New Zenex. Save
for alleging that the only
employees who received shares in Waldeck were senior executives and
key employees, no basis was laid in
the statement of case as to the
existence or nature of arbitrary or racially discriminatory conduct
on the part of respondents.
[22] It would appear
that appellants have sought to deal with the discrepancy between the
promise of shares in the New Zenex and the
further allegation that
shares were not received in Waldeck by alleging that Wimmeria,
Waldeck and the New Zenex were a single entity
in mind and
management. However in paragraph 15.2 of the amended statement of
case , it is alleged that the majority shareholding
in Wimmeria
which controls the New Zenex is held by Worldwide, which would appear
to be an entity independent from the New Zenex,
Waldeck or Wimmeria.
For these reasons alone the statement of case is so riddled with
contradiction and vague and unsubstantiated
allegations that a
conclusion that no triable cause of action was disclosed in
appellants’ amended statement of case can be justified.
[23] In canvassing the detailed arguments of
both counsel in the present dispute, I am cognizant of the further
difficulty as to
whether the ruling of the nature of that given by
the
court a quo
is appealable. See for example
Zweni v
Minister of Law and Order
1993(1) SA 523(A) 536 B and
Liberty
life Association of
Africa Ltd v Niselow
(1996) 17 ILJ 673
(LAC) at 676- 680 where
Nugent J
collects the key
authorities in this connection. However, given the conclusion to
which I have come, it is unnecessary to decide
this particular
question.
[24] The appeal is
dismissed together with costs including those of two counsel.
_______________
DAVIS AJA
I agree.
________________
ZONDO JP
I agree.
_________________
GOLDSTEIN AJA
For the Appellants:
Gardner Van Niekerk
SC
Instructed by J Leslie Smith & Co Inc.
For the Respondents:
JJ Gauntlett SC
WG La Grange
Date of Hearing:
21 November 2000
Date
of Judgment:
14 December 2000.