BTN Building Contractors v Roux (DA16/2002) [2003] ZALAC 4 (31 March 2003)

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[2003] ZALAC 4
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BTN Building Contractors v Roux (DA16/2002) [2003] ZALAC 4 (31 March 2003)

IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO: DA
16/2002
In
the matter between
BTN
BUILDING CONTRACTORS APPELLANT
And
ABRAHAM
ROUX RESPONDENT
______________________________________________________
JUDGMENT
JAPPIE
AJA
[1] The appellant is BTN
Building Contractors, a firm of which Johan Gotlieb Grobler is the
sole proprietor. The respondent is Abraham
Roux.
[2] On or about the 26
th
February 2001 the respondent referred a dispute regarding his
dismissal by the appellant to the Commission for Conciliation,
Mediation
and Arbitration (CCMA) for conciliation and later, for
arbitration. The respondent alleged that his dismissal was both
procedurally
and substantively unfair and claimed, inter alia,
unpaid salary as well as compensation. The CCMA arbitrated the
dispute and on
the 18
th
July 2001 issued an award in the following terms:-
“
The
employer, BTN Building Contractors, is ordered to pay the employee,
Mr A Roux, the following amounts within fourteen days of
the date of
this award or as agreed otherwise by subsequent written agreement
between the parties, at P.O. Box 906, Westville,
3630:-
1. Compensation for an unfair
dismissal in respect of the L R A in the amount of R79 200,00 being
the equivalent of six (6) months
renumeration at R13 200.00 per
month.
2. Outstanding
salary or R9 390.00 and car allowance of R1800.00 in respect of the
BCEA totaling R11 090.00.
3. No
order as to costs is made.”
[3] On or about the 20
th
August 2001 the appellant received the respondent’s application
to the Labour Court under case no. D1115/01 for the award made
on
the 18
th
July 2001 to be made an order of Court in terms of section 158(1)(c)
of the Labour Relations Act No. 66 of 1995 (“the LRA”).
On the
13
th
November 2001 and in the absence of the appellant the Labour Court
made the award an order of Court.
[4] By notice of motion dated 25
th
January 2002 the appellant launched an application in the Labour
Court to have the order made on the 13
th
November 2001 rescinded. The application was heard by Pillay J on
the 19
th
April 2002 and in a judgment handed down on the 6
th
May 2002 the learned Judge dismissed the application with costs.
With the leave of that court the appellant now appeals against
that
order.
[5] Johan Gotlieb Grobler, is the
sole proprietor of the appellant and he denies that the respondent
was ever employed by the appellant.
His version is as follows: He
and the respondent had been friends since their school days. They
had last seen each other during
or about 1980. At a school reunion
in 2000 the two once again met. He then invited the respondent to
join him in his business
at Empangeni, KwaZulu-Natal. The
respondent then went to Empangeni and lived with Grobler and his
wife. This occurred on or about
the 16
th
October 2000. He offered the respondent “the infra-structure” of
his business from which the respondent could develop his own
income.
He and the respondent discussed the possibility of a formal
partnership at a later stage, if things went well. On the
arrival
of the respondent at Empangeni, the respondent informed him that he
was experiencing financial difficulties and he then
deposited
R1200.00 into the respondent’s account. The respondent also asked
him to pay his bond installment, which he duly
did in the sum of
R3200.00. The respondent took advantage of their friendship and his
willingness to help. On the 4
th
February 2001 matters between him and the respondent came to a head
and the respondent offered to leave Empangeni and to return
to
Durban. He accepted the offer and the respondent then left. On the
7
th
February 2001 he received a fax from the respondent in which the
respondent claimed payment of his arrear salary together with
certain other amounts due to him. He was horrified at the
respondent’s audacity, but he does not say that he replied to the

respondent’s fax.
[6] On the 26
th
February 2001 the respondent faxed to Grobler documentation
indicating that the respondent was now referring the dispute
between
the two of them to the CCMA for conciliation. Grobler did
not respond to the receipt of this information. On the 14
th
May 2001 Grobler received the certificate of the outcome of the
conciliation proceedings and a request to have the dispute referred
for arbitration. According to Grobler he immediately went to see a
labour consultant, Eric Botha, to find out what could be done.
He
handed to Eric Botha all the documentation he had received up until
that date. Botha told Grobler that he, Botha, would sort
out the
matter. Grobler did not hear from Botha again and assumed that
everything had been taken care of.
[7] On the 19
th
July 2001 Grobler received, by fax, the arbitration award. He
telephoned Botha who then informed him that the respondent would
probably go to the Labour Court and have the award made an order of
court. Botha then advised Grobler to wait until this was done
and
that he, Grobler, should then go to court to give his side of the
story. Grobler received the notice of motion for the application
to
have the award made an order of court on the 20
th
August 2001. Grobler’s response to this is set out in paragraph
14 of his affidavit as follows:-
“
My wife and I read through the
papers and filed them with the other documentation to wait for a
court date. I annex hereto, marked
“JG6” a copy of the Notice
of Motion. It has been pointed out to us by my current attorney
that we should have filed a notice
of intention to oppose the
application, but we did not see the clause at the time and were
waiting, on advice, to go to court ourselves.”
[8] Grobler alleges that,
although he had received the referral forms for the conciliation and
arbitration proceedings and the notice
of motion in the Labour
Court, he did not receive any notification of the dates for the
set down of the conciliation, the arbitration
or for the hearing in
the Labour Court. According to Grobler he was awaiting notification
of a date so that he could appear
and oppose the application and
give his version to the court.
[9] The appellant relies
on the circumstances outlined above for the relief sought and in
submitting firstly, that he has a bona
fide defence to the
respondent’s claim and, secondly, that he has an acceptable
explanation for having failed to defend the
claim.
[10] The learned Judge in
the Labour Court concluded that on the merits of the case there was
a substantial dispute of fact. The
substance of the dispute between
the parties is whether or not the respondent was an employee of the
applicant. On this issue
the versions of the parties are
diametrically opposed. The learned Judge did not deal with the
appellant’s prospects of success.
[11] In respect of the
appellant’s explanation for its default the learned Judge
concluded as follows:-
“
It is not as though the applicant
is illiterate or in any other way incapacitated from understanding
the simple language of a notice
of motion directing him on what
steps to take if he wishes to oppose the matter. It also informs
him that the matter may be heard
in his absence if he fails to
oppose it. Simply filing the application away while being conscious
of its contents can hardly be
regarded as reasonable conduct for a
businessman.
7.
Finally, the applicant holds the
labour consultant responsible for his failure to oppose the
application. He alleges that the consultant
was negligent. I am
surprised that the labour consultant would give incorrect advice. …
Furthermore when he received the notice
of motion which was
unambiguous about his obligations he did not revert to the
consultant. The applicant obviously did not take
the proceedings in
the Commission for Conciliation, Mediation and Arbitration (CCMA)
and the Labour Court seriously. That is not
responsible conduct for
a businessman. It amounts to willful disregard of the procedures.”
[12] Having concluded
that the appellant had willfully disregarded the procedure in the
Labour Court, the learned judge dismissed
the application.
[13] Section 165 of the
LRA reads as follows insofar as it relevant:-
“
The Labour Court, acting of its own
accord or on the application of any affected party may vary or
rescind a decision, judgment
or order –
a) Erroneously sought or erroneously
granted in the absence of any
party
affected by that judgment or order, …”
Rule
16 A of the rules of the Labour Court reads as follows:-
“(1). The court may, in addition to
any other powers it may have –
(a) of its own motion or on
application of any party affected, rescind or vary any order or
judgment –
(i) erroneously sought or erroneously
granted in the absence of any party affected by it;
(ii) …,
(iii) …,
or
(b) on application of any party
affected, rescind any order or judgment granted in the absence of
that party.
(2). Any party desiring any relief
under-
(a) subrule 1
(a)
must apply for it on notice to all parties whose interests may be
affected by the relief sought.
(b) subrule
1
(b)
may within 15 days after acquiring knowledge of an order of
judgment granted in the absence of that party apply on notice to all
interested parties to set aside the order or judgment and the court
may, upon good cause shown, set aside the order or judgment
on such
terms as it deems fit.”
[14] It is, therefore,
clear that in terms of section 165 (a) and rule 16A(1)(a)(i) an
applicant for rescission is required to show
that the order was
erroneously sought or erroneously granted in his absence, whereas in
terms of rule16A(1)(b) read with sub-rule
2(b) he is required to
show good cause for rescission for an order granted in his absence.
[15] Counsel, who appeared for the
appellant, has submitted that the order made on the 13
th
November 2001 was made erroneously and that the appellant had shown
good cause to have it set aside. However, in the course of
argument, counsel could not refer to any fact or factors from which
it could be concluded that the order had been erroneously made.

Counsel further submitted that the reliance of the appellant on the
advice of the labour consultant to wait until such time as
Grobler
had been informed of a court date and to do nothing until then, is
in all the circumstances, reasonable.
[16] It is Grobler’s version that he
had been advised by Eric Botha that the respondent would apply to
have the arbitration award
made an order of court and that he
should wait until he does so and then go to court to give his side
of the story. On the 20
th
August 2001 he received the notice of motion for the application to
have the award made an order of the Labour Court. In the body
of
the notice of motion the appellant was called upon to notify the
registrar of the Labour Court, in writing, within ten days
of
receipt of the application if he intended opposing the application
and was informed that, failing such notification, the matter
could
be heard in his absence. Although Grobler claimed to have read the
notice of motion, he said that he did not see this particular
“clause”. There is no explanation from him as to why he did not
see it. However, after having received the notice of motion,
not
only did he not react thereto but he made no attempt to get in touch
with Eric Botha to seek further advice on placing his
version before
the court. All he did was to file away the notice of motion
together with the other documents and to wait for
a court date.
[17] In
Chetty
v Law Society Transvaal
1985 (2) SA 756
(A)
Miller JA at 765 A - C dealt with the expression “sufficient
cause”. The learned Judge equated it with that of “good cause”.
He stated that it had two essential elements, the first of which
was that the party seeking relief must present a reasonable and
acceptable explanation for his default and the second, that such a
party had to show on the merits that he had a bona fide defence
which prima facie had some prospect of success. The learned judge
further pointed out at 765 D to E the following:-
“
It is not sufficient if only one of
these two requirements is met; for obvious reasons a party showing
no prospect of success on
the merits will fail in an application for
rescission of a default judgment against him, no matter how
reasonable and convincing
the explanation of his default. And
ordered judicial process would be negated if, on the other hand, a
party who could offer no
explanation of his default other than his
disdain of the Rules was nevertheless permitted to have a judgment
against him rescinded
on the ground that he had reasonable
prospects of success on the merits.”
[18] The conclusion by the learned
Judge of the Labour Court that the appellant did not take the
proceedings in the Labour Court
seriously is supported by all the
facts. On the 20
th
August 2001 the appellant received the notice of motion to have the
award made an order of the Labour Court. The notice of motion
which
the appellant received made it clear that in the event of it not
opposing the application the matter could be dealt with
in its
absence. Although the Grobler says he and his wife read through the
papers, he claims not to have seen this part of the
notice. This is
strange because, on his version, before the arrival of the notice of
motion, he was awaiting notification of when
he could go to the
Labour Court to give his version. I would have thought that, when he
received the notice of motion which showed
that the matter was now
in the Labour Court, he would have read it exhaustively to see
whether there was anything therein about
a date. As it turned out,
the part he says he did not read would have told him what steps to
take if he wanted to tell his version.
[19] In the light of the aforegoing I
am unpersuaded that Pillay J erred in concluding that the appellant
showed a complete disregard
for the proceedings in the Labour Court.
In my judgment the appellant has demonstrated only his disdain for
the rules and has,
therefore, failed to demonstrate good cause for
not opposing the granting of the order in the Labour Court on the
13
th
November 2001.
[20] I am mindful of the
appellant’s allegation that at no stage was the respondent in its
employ. The award made against the
appellant is a substantial one
which could cause the appellant hardship. However, these are not
the only considerations to be
taken into account. To allow a party
to rescind a judgment only on the basis of his averment that he has
reasonable prospects
of success on the merits would render an
ordered judicial process ineffective. A party who believes that he
has a good defence
would then simply allow default judgment to be
taken against him in the knowledge that he can at some time
thereafter apply to
have that judgment rescinded only on the basis
that he has a defence on the merits. Such a situation would render
the rules applicable
to the granting of default judgments nugatory
and ineffective. It is for this reason that a party is required to
show, in addition
to a bona fide defence that he has a reasonable
explanation for allowing the granting of default judgment against
him before a
court can rescind such a default judgment. It follows,
therefore, that the appeal must fail.
[22] In the result, the
appeal is dismissed with costs.
_________________________
A.N.
JAPPIE
Acting
Judge of Appeal
I
agree
_________________________
R
M M ZONDO
Judge
President
I
agree
_________________________
E
L GOLDSTEN
Acting
Judge of Appeal
For the Appellant: Mr
Kirstein
Instructed
by: Schreiber Smith Attorney
For
the Respondent: Ms Jafta
Instructed
by: Jafta & Company
Date of Hearing: 27
th
February 2003
Date
of Judgement: 31 March 2003