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[2008] ZALAC 11
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Eberspächer v National Union of Metal Workers of South Africa obo Skade and Others (JA21/2007) [2008] ZALAC 11; [2009] 1 BLLR 44 (LAC); (2009) 30 ILJ 880 (LAC) (19 September 2008)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
LAC
CASE NO: JA21/2007
In the matter between:
EBERSPÄCHER
APPELLANT
and
NATIONAL UNION OF METAL WORKERS OF
SOUTH AFRICA o.b.o. SKADE AND 37
OTHERS
RESPONDENTS
________________________________________________________________
JUDGMENT
________________________________________________________________
WAGLAY, JA.
Introduction
[1] The appellant petitioned the
Judge President of this Court to grant it leave to appeal against the
dismissal of its application
to rescind the directive issued by Cele
AJ pursuant to Rule 6(7) of the Rules of this Court and to rescind
the default judgment
handed down by the Labour Court pursuant to the
abovementioned directive. On the direction of the Judge President
this petition
was set down for oral argument and the parties were
required to argue both the petition and the merits of the appeal at
the same
time.
The
facts
[2] On 21 August 2001, 38 employees of
the appellant (“the individual respondents”), all members
of the National Union
of Metal Workers of South Africa (“the
Union”), were dismissed from the appellant’s employ.
The reason
given for such dismissal was that the individual
respondents had participated in an unprotected strike.
[3] The
union and the individual respondents (“the respondents”)
believing
the dismissals to be unfair, referred a dispute concerning
the fairness of such dismissals to the Commission for Conciliation,
Mediation and Arbitration (“the CCMA”) for conciliation
and thereafter to the Labour Court for adjudication. The
respondents, who were not legally represented, served their statement
of claim upon the appellant on 26 November 2001. In terms
of Rule
6(3)(c ) of the Rules of the Labour Court the appellant had 10 days
within which to file its response to the respondents’
statement
of claim if it intended to oppose the matter.
[4] The
appellant, also unrepresented at the time, filed a notice to the
effect that it
intended opposing the matter, but failed to file its
response to the respondents’ statement of claim. Some
5
months
later, on 3 May
2002, the appellant, then legally represented, filed its response to
the respondents’ statement of claim
and with it an application
for the condonation of the late filing of its response to the
respondents’ statement of claim.
[5] One
of the reasons for the appellant’s failure to file its response
to the respondents’
statement of claim timeously (as attested
to by Michael Craig Kirchmann, (“Kirchmann”) of
Kirchmanns Inc., appellant’s
attorneys of record) was that the
respondents had failed to reply to his letter calling upon them to
provide him with the annexure
to their (respondents’) statement
of claim. The annexure set out the names of the individual
respondents. In
their answering papers respondents provided
proof that the annexure was faxed to the appellant’s attorneys
the day after
the request had been made. In reply, Kirchmann,
under oath, denied receiving such response. His denial did not
exclude
the possibility that the response may have been received by
his office but not brought to his attention.
[6] A
further explanation deposed to by Kirchmann as to why the response to
the claim was filed
five months late and five months after he had
requested the document from the respondents was the following:
“
It appears as if the
relevant file was filed away during my annual Christmas shutdown
without it being diarised to be brought to
my attention.”
[7] Mr
Paul Erasmus (“Erasmus”) of the appellant company also
deposed to an
affidavit in support of the application for
condonation. According to Erasmus the only reason for the
appellant’s attorneys
not filing its statement of defence was
the respondents’ failure to forward the document requested by
the appellant’s
attorneys. Erasmus makes no mention of the fact
that the appellant’s file had been misplaced by its attorneys
for a period
of five months.
[8] Condonation
for the late filing of its statement of defence was in any event
granted by the Labour
Court. The respondents sought leave to
appeal against that decision. Leave was granted on 24 December
2003. Although
respondents thereafter filed their notice of
appeal, they failed to take the further steps necessary to prosecute
the appeal. As
a result the appeal lapsed.
[9] Some
14 months
after the appeal had lapsed, respondents, who by then had appointed
attorneys to represent them, called upon the appellant, to
attend a
pre-trial conference. The appellant refused to attend such a
conference. The appellant took the view that
the delay by the
respondents had led to a reasonable belief on their part that the
matter had
“died a
natural death”.
[10] The
respondents subsequently enrolled the matter for a pre-trial
conference. The day
before the matter was to be heard, the
respondents provided the appellant with an agenda for the conference
and a list of questions
which they required the appellant to answer.
The following day, at the Labour Court, the parties concluded an
agreement which
was made an order of Court in terms of Rule 6(6) of
the rules of the Labour Court. The order of Court, dated 5
August 2005,
was that the appellant had to respond to the pre-trial
questions raised by the respondents within 10 days of the date of
that order
and that the respondents would thereafter, within 5 days
of receipt of the response, file a pre-trial minute.
[11] The
appellant failed to comply with the Court order. After the
expiry of the
time prescribed by the Court order,
(this was on 19 August 2005), respondents again called upon the
appellant to reply to its pre-trial
questions. The appellant
did not respond. However, on 6 September 2005 Kirchmann
telephonically requested an extension
until 30 September 2005 to
comply with the Court order. By 10 October 2005 the appellant had
still not complied with the Court
order and had not filed its
response to the pre-trial questions. As a consequence, the
respondents informed the appellant in writing
that, since it had
failed to file a response to the pre-trial questions, they would be
taking further steps towards finalising
the matter. To that
end, respondents wrote to the registrar of the Labour Court
requesting that the Court file be handed
to a judge in chambers
for a directive in terms of Rule 6(7) of the Rules of the Labour
Court. This Rule provides for a matter
to be enrolled for trial
where one of the parties fails to comply with an order or directive
of the Court relating to pre-trial
procedures.
[12] The matter was placed before Cele
AJ. On 23 February 2006, Cele AJ issued a directive barring the
appellant from defending
the matter. He further directed that
the matter be enrolled for a default judgment.
[13] The
respondents forwarded a copy of the directive issued by Cele AJ to
the appellant’s attorneys
under cover of a letter in which they
advised appellants that they (the respondents) would be enrolling the
matter for judgment
on an unopposed basis. No response was
received to the letter or the judge’s directive.
[14] The
Registrar of the Labour Court then set the matter down for default
judgment on 5 May 2006.
No notice of set down was given to the
appellant. On 5 May 2006 the Labour Court heard the matter as
an unopposed matter.
It found the dismissal of the individual
respondents to be both substantively and procedurally unfair and
ordered the appellant
to reinstate the 38 individual respondents in
its employ.
[15] On
25 May 2006 the appellant filed an application to rescind with costs:
(i)
the directives issued “by the Registrar dated 23 February 2006”
(Clearly appellant meant the directive issued by Cele AJ and not the
“Registrar”); and
(ii)
the “default judgment handed down on 5 May 2006”.
[16] The
grounds upon which the recission was sought were that:
(i) no notice/application was served
upon the appellant to debar it from continuing to defend the claim;
and
(ii) the
Registrar had failed to notify it about the matter being set down for
default
judgment on 5 May 2006;
[17] The Labour Court dismissed the
application for rescission. Leave to appeal was also refused.
The appellant thereafter
petitioned the Judge President of this Court
to grant it leave to appeal the dismissal of its application. As
stated earlier, on
the directions of the Judge President the petition
was set down for oral argument and the parties were required to argue
both the
petition and the merits of the appeal at the same time.
The
petition and the appeal
[18] The
issue in this matter relates to the effect and application of Rule
6(7). This sub-rule provides
as follows:
“
If any party fails to attend
any pre-trial conference convened in terms of sub-rule (4)(a), (5)(b)
or (5)(c), or fails to comply
with any direction made by a Judge in
terms of sub-rules (5) and (6), the matter may be enrolled for
hearing on the direction of
a Judge and the defaulting party will not
be permitted to appear at the hearing unless the Court on good cause
shown orders otherwise.”
[19] At the hearing of the petition
and the appeal appellant argued that when a party fails to comply
with an order of the Labour
Court made in terms of Rule 6(6), as it
had done, or fails to comply with a directive issued in terms of Rule
6(5) all that a Judge
could do pursuant to a request for a directive
in terms of Rule 6(7) is to direct that the matter be enrolled for
hearing in terms
of Rule 6(7). The effect of the directive so issued
would be that the party who failed to comply with the order/directive
will
not be allowed to appear at the hearing. The defaulting party
is thus barred from pursuing its defence or its claim. Rule 6(7)
however, also provides that the defaulting party can have the bar
lifted and continue with its claim or defence if it is able to
show
good cause for its failure to comply with the order/directive made in
terms of Rule 6(5) or (6). The defaulting party can
apply to show
“
good cause
”
either on the day of the hearing, prior to its commencement, or at an
earlier date. This argument is essentially correct.
[20] What this sub-rule envisages, is
that, while a judge could issue a directive that the registrar enroll
the matter for hearing,
the registrar would have to enroll the matter
on notice to both parties and the notice has to indicate that the
matter had been
enrolled for
hearing in terms of Rule 6(7)
.
Notice to both parties is critical because either on the day of the
hearing or before that date the defaulting party is
entitled to
approach the Court in order to satisfy it that there is “
good
cause
” for it to be
allowed to continue with its claim or defence. In other words, while
a directive in terms of Rule 6(7) automatically
prohibits the party
that has failed to comply with Rule 6(5) or (6) from continuing with
its claim or defence the Court may lift
the prohibition if the party
prohibited from continuing with its claim or defence shows “
good
cause
” why it should
be allowed to defend or prosecute its claim.
[21] Sub-rule
6(7) is directed towards the enforcement of compliance with the rules
relating to pre-trial
procedures and sets out a process to expedite
matters where a party is dilatory. Although this sub-rule has drastic
consequences
it allows a defaulting party an opportunity to show
“
good cause
”
so as to be allowed to continue with its claim or defence. The fact
that the defaulting party is entitled to seek the lifting
of the
prohibition against appearing at the hearing implicitly requires that
the registrar notify it of the date of hearing to
afford it an
opportunity to show “
good
cause
”.
[22] Accordingly, where a judge issues
a directive under Rule 6(7) the matter may not be set down without
notice to the defaulting
party. Additionally the registrar should
notify the parties that the matter is set down pursuant to a
directive in terms of Rule
6(7) so the parties are prepared, if need
be, to deal with the issue of “
good
cause
”.
[23] Cele AJ was therefore only
entitled to issue a directive to the effect that the matter be
enrolled for hearing in terms of
Rule 6(7), not a directive barring
the appellant from continuing to oppose the claim. This matter should
also not have been set
down for default judgment without notice to
the appellant nor should default judgment have been granted in the
absence of such
notice. The directive issued by Cele AJ thus
falls to be set aside and so does the default judgment granted
pursuant to that
directive.
[24] With regard to the costs I am of
the view that the requirements of law and fairness dictate that no
order as to costs should
be made.
Conduct
of Appellants’ attorney
[25] Further it is important that I
deal with the less than acceptable conduct on the part of Kirchmann,
which conduct played a
role in causing the unacceptable delays and
the unnecessary steps that respondents were forced to take. The
questionable conduct
relates to the following:
(i) Firstly, in the affidavit attested
to by Kirchmann in support of the application to condone the late
filing of the appellant’s
statement of defence, he claims not
to have received the fax forwarded to his office listing the names of
the respondents. However,
as recorded earlier he does not discount
the possibility that the document was received by his office. He
later, without any basis,
therefor, speculates that the respondent
might have faxed the document incorrectly.
(ii) Although Kirchmann states that he
mislaid the appellant’s file and only found it 5 months later,
he fails to explain
why he only filed the application for condonation
more than 24 days after the affidavit in support of the application
was signed.
Curiously, Erasmus of the appellant company in his
affidavit makes no mention of the file being misplaced.
(iii) Despite the order of the Labour
Court that the appellant reply to the respondents pre-trial questions
by 19 August 2005 Kirchmann
failed to do anything about it.
Kirshmann then denies receiving the letter from respondents’
attorneys, calling upon his
client to reply to the respondents’
pre-trial questions. He, nevertheless, at a later date telephonically
sought an extension
of time to file his client’s response and
again without an explanation failed to file the response within that
extended period.
At no time does Kirchmann mention that he had
either any difficulty in obtaining instructions from the appellant or
that there
was any impediment to comply with the Court order.
(iv) Kirshmann’s explanation
with respect to his failure to file appellant’s reply to the
respondents pre-trial questions
within the extended period is that he
was under the impression that one Pattle from his office in Port
Elizabeth (Kirshmann is
based in East London) had dealt with the
matter. The reason for him to gain such an impression, according to
him, was the directive
he received from the registrar two days after
he sought the extension, which called upon the respondents to file an
index and paginate
the Court file. To my mind the directive could
not genuinely form a basis for Kirshmann to get the impression he
claims. Furthermore
it is surprising that Kirshmann did not speak to
Pattle either before or after he sought the extension to file
appellant’s
response, nor does he say that he spoke to Pattle
after he received the directive from the Labour Court. If Pattle was
indeed
able to attend to the drafting and delivery of the appellant’s
response why does Kirchmann or Pattle not say so? There is
no
affidavit filed by Pattle in this matter.
(v) Most curious of all is that while
Kirshmann does not receive any correspondence or documents faxed to
him he received the directive
of the Court which called the
respondents to file an index and paginate the Court file. The
receipt of this fax is curious and
convenient because it happens to
be the document that formed a basis for his excuse for not filing the
appellant’s response
within the extended period.
(vi) All of the affidavits filed by
Kirchmann are remarkable in what they
don’t
say rather than what they
do
say
. In his affidavit in
support of the rescission application, he makes the statement that he
believed that his Port Elizabeth office
responded to the pre-trial
questions. He does not explain what, if anything, he did after he
requested an extention of over twenty
days from the respondents to
reply to the pre-trial questions. Moreover he claims that
he
(as opposed to his office) never received the various letters (faxes)
without furnishing any explanation as to why certain
faxes/communications
are received, whilst others are not. Finally,
neither Kirshmann nor the appellant have to date provided any
explanation as to why
the appellant failed to comply with the order
of the Labour Court handed down in terms of Rule 6(6).
(vii) With the directive from the
Judge President of this Court that the petition and the merits of the
appeal would be heard simultaneously,
the parties were ordered to
file their heads of argument by certain specified dates. The
appellant was required to file its heads
of argument by 15 October
2007. It failed to do so. Appellant only filed its heads of
argument on 6 November 2007, claiming that
it did not receive the
directives which were faxed by the Registrar of this Court. The
directives of this Court were faxed to
the number provided by
Kirchmann in his client’s petition. In its heads of argument
the appellant (through Kirchmann of
course) stated that it would
apply for condonation for the late filing of its heads. It only
filed its application for condonation
on the day of the hearing. In
its application for condonation Kirchmann acknowledged that the
Registrar of this Court sent the
directives by fax to the number that
was provided in appellant’s petition but states that the number
which he had provided
was wrong. He simply made a mistake!
[26] Save for one unhelpful affidavit
signed by the appellant’s representative, all of the affidavits
in support of the various
applications made on behalf of
the appellant were attested to by
Kirchmann. All of them were littered with vague and unsubstantiated
allegations. Such statements
from an experienced attorney and
officer of this court raise serious questions about whether or not
Kirchmann has placed all the
relevant facts before the court.
The order
[27] In any event insofar as the
petition and the appeal are concerned I make the following order:
1.
Leave to appeal against the order of the Labour Court dated
5 May 2006 is granted.
2.
The order of the Labour Court aforesaid is set aside and substituted
with the following:
“
(a)
the directive issued by Cele AJ on 23 February 2006 is hereby set
aside.
(b)
the default judgment granted on 5 May 2006 is hereby rescinded.
(c)
there is no order as to costs.”
3. Should the
parties not reach a settlement in respect of the dispute and wish the
matter to be expedited, leave is hereby granted
to them to approach
the Judge President with a request that this matter be
expedited.
4. There
is no order as to costs in the petition or the appeal.
____________________
WAGLAY
JA
I agree
____________________
ZONDO JP
I agree
____________________
TLALETSI AJA
Appearances
For the appellant : Adv C.E.
Watt-Pringle SC
Instructed by : Kirchmanns.Inc
For the respondents : Adv G.G
Goosen SC
Instructed by : Gray Moodliar
Date of hearing : 14 November 2007
Date of judgment : 19
September 2008