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[2010] ZALAC 28
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National Union of Public Services and Allied Workers v Public Servants Union (DA19/08Â Â ) [2010] ZALAC 28; (2010) 31 ILJ 2347 (LAC) (2 June 2010)
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE
NO: DA19/08
In the matter between:
THE NATIONAL UNION OF PUBLIC SERVICE
Applicant
AND ALLIED WORKERS
and
THE PUBLIC SERVANTS UNION
Respondent
JUDGMENT
___________________________________________________________
Waglay
DJP
Background
[1] On 30 March 1998 a number of
Trade Unions amalgamated to form a single union. This was done in
terms
of s102 of the Labour relations Act no 66 of 1995 (the “LRA”).
The new amalgamated union was called:
“The National Union of
Public Service and Allied Workers”.
It is the appellant in
this matter. The appellant was registered as a trade union in terms
of the LRA on 13 August 1998.
[2] One of the Unions that was a
party to the amalgamation was the Public Servants Union.
[3] In terms
of the LRA when a number of trade unions amalgamate to form one union
and the new union is
registered, all the assets, rights, obligations
and liabilities of the trade unions which constitute the new union
devolve upon
and vests in the new union.
1
[4] The above notwithstanding,
the trade unions that formed the appellant concluded a written
agreement
(hereafter referred to "the Agreement") on 30
March 1998, in relation to their amalgamation. There are two clauses
in
the Agreement which are relevant to this matter. These two
clauses provide as follows:
Clause 5: That all
assets acquired by the parties prior to the signing of this agreement
shall be the property of that party to deal with in terms of
its constitution.
Clause
6: That each party shall be
afforded a period not exceeding two years within which to
centralise
their administration and financial affairs into the trade union [the
new/amalgamated union]
The present dispute
[5] In and during September 2005
the appellant instituted an action against
“
The
Public Servants Union
”
(the “Respondent”)
at the Labour Court wherein it sought the following order:
" 1. THAT it is declared
that the applicant is entitled to delivery of the respondent’s
assets as at
13 August 1998;
alternatively
all such assets and the value of any monetary assets comprising the
same as at 13 August 1998 together
with
interest thereon at the rate of 15,5% per annum according to law.
THAT the respondent is ordered:
(a)
to render to the
applicant within 10 days of the date of this Order a statement of
account of its assets at 13 August 1998;
and
(b)
to debate the said
account with the applicant within 30 days from the date when it was
rendered in terms of paragraph 2 (a) of this
Order.
THAT the respondent is ordered to pay the applicant’s
costs. "
[6] In support of its prayers,
in its Statement of Claim, it made inter alia, the following
allegations:
at
paragraph 4 (the first paragraph 4 on page2) it said:
“
The respondent is the PUBLIC SERVANTS UNION, a former trade
union and an association duly registered and incorporated under
section
21 of Act No. 61 of 1973 according to law, which has its
registered address at 9 Stanley Crescent, Umhlanga Rocks,
Kwazulu-Natal.”
at
paragraph 5 (the second paragraph 5 at page 6)it said:
“
On 13 August 1998, upon the registration of the applicant
and in terms of
section 102
(5) (a) of the
Labour Relations Act, No.
66 of 1995
, all the assets, rights, obligations and liabilities of
the respondent, as an amalgamating trade union at the material time,
devolved
upon and vested in the applicant”
at paragraph 6 it said:
“
On a proper interpretation of the said agreement, material
express, alternatively implied, terms of the said agreement were, in
order to give effect to the provisions of
s 102
(5):
(a)
During the period not
exceeding two years from the date of the said agreement contemplated
in clause 6, the assets of the respondent
acquired prior to the
signature of the said agreement would continue to remain the property
of the respondent to be dealt with
by it in terms of its
constitution. (See clause 5)
(b)
But, within a period of two
years from the date of the said agreement, the respondent was obliged
to do all things necessary to
transfer its administration and
financial affairs, including the delivery of all its assets, to the
applicant (See clause 6)”
[7] The
appellant further added that the respondent had failed to comply with
the Agreement in that it failed
and/or refused to deliver its assets
and make disclosure thereof to the appellant and that it was “unaware
of the precise
extent of the assets” that vested and devolved
upon it in terms of
s102(5)
(a) of the LRA.
[8] In
response to the appellant’s claim the respondent denied that it
was a
“former
trade union
”
and admitted that it was, as alleged by the appellant, a company duly
registered in accordance with the Company laws of
South Africa. The
respondent also admitted, in paragraph 16.4 of its response to the
appellant’s Statement of Claim, that
prior to becoming a
company it was a duly registered trade union and that as a trade
union
2
it was party to the Agreement; that after the registration of the
appellant it no longer retained its status as a trade union and
that
all assets and liabilities of the amalgamated unions devolved upon
and vested in the appellant. It added that the devolution
and vesting
was however, subject to clause 5 of the Agreement which provided that
the amalgamated unions had two years to deal
with their assets in
accordance with their constitution.
[9] Respondent further went on
to deny that it was liable to the appellant and denied the
appellant’s
allegation relating to the import of the Agreement
in relation to
s102
of the LRA.
[10] Most importantly however the
respondent raised a point
in limine
on the following grounds:
i.
that the Appellant’s claim had prescribed
because it was based on the Agreement which was concluded in March
1998 and required
performance in terms thereof within 2 years of its
conclusion.;
ii.
that the Labour Court had no jurisdiction to
entertain this claim; and
iii.
the referral was defective because it was brought
by way of action rather than on application.
[11] The Labour Court (D.Pillay J) did
not deal with the third ground of the point
in limine
nor has
the appellant persisted therewith in this appeal. In any event it is
a meritless ground. The Labour Court did uphold the
respondent’s
point
in limine
in respect of the first two grounds: It found
that the appellant’s claim had prescribed and that because the
respondent was
not a trade union the Labour Court had no jurisdiction
to entertain the claim.
[12] The matter now comes on appeal
with the leave of the Labour Court in respect of the above issues.
[13] The first point that needs to be made is that
neither the Statement of Claim nor the Response thereto are models of
clarity.
However, there are sufficient details in them to determine
the point
in limine.
[14] Turning
firstly to the issue of prescription. This is a statutory provision
governed by the Prescription
Act
3
and is intended to bring finality to disputes. The Prescription Act
provides
inter alia
that a person or legal entity must institute legal proceedings within
3 years from the date on which a debt was due to it by a
person or
entity known to it, or whose identity it could have ascertained by
the exercise of reasonable care.
4
For the purposes of prescription the word “debt” has a
wide meaning and includes things other than money. Once a date
for
payment or delivery is fixed the debt becomes due from that fixed
date and that is the date from which prescription commences
to run.
The Act also provides for instances when prescription ceases to run
or is interrupted or suspended, but that is not relevant
for present
purposes. Hence, for prescription to run against a creditor, and at
the expense of stating the obvious, the creditor
must be aware of the
existence of the debt; the debt must be due; and, the creditor must
know the identity of the debtor.
5
[15] In this matter the appellant
alleges that the assets held by the respondent vested and devolved
upon it on
the date it became registered as a trade union, which is
13 August 1998. In that case prescription would have commenced to run
from that date and the claim would have prescribed three years later
on or about 13 August 2001, because: the appellant knew the
debtor
(it was one of the trade unions that was party to its formation); it
knew that it was owed a debt (which was the assets
held by the
respondent in terms of s102 (5) of the LRA); and, that the assets had
devolved upon it and vested in it from 13 August
1998 (being the date
of its registration as a trade union). If one has to disregard the
date of the appellant’s registration
as a trade union and rely
simply on the Agreement and the allegations made by the appellant in
its Statement of Claim then prescription
would have commenced to run
from about 30 March 2000, because, the appellant alleged that the
Agreement was concluded on 31 March
1998 and that the assets due to
it by the respondent only became deliverable to it two years after
the signing of the Agreement.
On the allegations made by the
appellant, it (the appellant) was obliged to institute a claim
against the respondent on or before
30 March 2003. The appellant
failed to do so, it only instituted its claim five and a half years
after it was due, in September
2005. Based on what I have stated
earlier no matter which of the two dates is taken as the date on
which the claim became due,
having regard to the allegations
contained in the appellant’s statement of claim, its claim has
prescribed.
[16] One of the arguments raised by
the appellant, but not persisted in with any great vigour, and
properly so,
was that prescription could not commence to run against
the appellant because it was unaware of the respondent’s exact
indebtedness
to it. This is not one of the exceptions or grounds upon
which prescription either does not commence to run, is interrupted or
suspended. The appellant, as I have stated earlier, was aware that
respondent was indebted to it for whatever assets it possessed
as at
31 March 1998 or 13 August 1998 and that those assets were
deliverable by, at the latest, 30 March 2000. With that knowledge
the
appellant could have instituted legal proceedings against the
respondent within 3 years for the accounting of the debt as it
has
now done. Its failure to do so cannot serve to interrupt
prescription. In any event it is not the certainty in relation to
the
quantum of the debt that determines the running of prescription but
the fact of the debt that so determines it.
[17] In the circumstances the first
ground of the respondent’s point
in limine
was well
founded and the claim, having prescribed, the Court
a quo
was
correct in its decision and, on that ground alone, could have
dismissed the appellant’s claim. I may add that in deciding
the
issue of prescription I have assumed, in favour of the appellant,
that respondent is a trade union that was a party to the
Agreement on
31 March 1998 and continues to exist in that form.
[18] In regard to the issue of jurisdiction, the
respondent has taken the name of the trade union and styled itself on
that name.
The “Public Servants Union” is now a company
registered in terms of the company laws of South Africa. This is the
allegation
made by the appellant and admitted by the respondent.
Furthermore, the appellant also alleges that the respondent was
formerly
a trade union, that being so, I fail to understand the basis
upon which the appellant decided to institute an action against the
respondent in the Labour Court. The Agreement that was signed and on
which the appellant relies was signed by a different legal
entity;
the assets which the appellant seeks delivery of were possessed by a
different legal entity; and, the appellant has made
no allegations,
assuming prescription was not a factor, to show why the respondent in
the present form is liable for and on behalf
of an entity that no
longer exist, or, why the Labour Court could entertain an action
against the respondent.
[19] As the appellant has failed to allege that the
respondent in its present form is the entity that: is a trade union;
or, is
a trade union that amalgamated to form the appellant in terms
of s102 of the LRA; or, is the entity that signed the Agreement which
forms the basis for its claim, I fail to see any basis upon which the
Labour Court could have jurisdiction over the respondent
with respect
to the alleged claim made by the appellant.
[20] In the circumstances the point
in limine
is
well founded and the Court
a quo
was indeed correct to make
the order it did.
[21] With regard to costs, I see no reason why in law
and equity costs should not follow the result.
[22] In the result:
The appeal is dismissed with costs.
_______________
Waglay DJP
I agree
________________
Musi AJA
I agree
________________
McCall AJA
APPEARANCES:
For the appellant: Adv.A G Jeffrey SC instructed by R F Sobey
attorneys.
For the respondent: Adv.M B Pitman instructed by Masipa Inc.
Date of hearing: 13 May 2010
Date of judgement: 02 June 2010.
1
See s 102(5) of the LRA
2
Even though respondent makes this allegation, the
court must accept it because a trade union which in amalgamation
with others
goes on to form a new union loses its status as a trade
union by operation of law in terms of s102(4) of the LRA.
3
No 68 of 1969
4
See s
ections 11(d); and 12(1) – (3) of the
Prescription Act
5
This may not be necessary in all instances and if
it is established that the creditor could have established the
identity of the
debtor then it may not be able to raise lack of
knowledge as to the identity of the debtor as a defence against
prescription.