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[2010] ZALAC 53
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National Union of Public Service And Allied Workers v Public Servants Union (DA19/08) [2010] ZALAC 53 (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.