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[2014] ZALAC 103
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KWESTHUBA CONSULTING (PTY) LTD v KAYODE (CA23/2011) [2014] ZALAC 103 (31 January 2014)
REPUBLIC OF SOUTH
AFRICA
Not Reportable
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, CAPE TOWN
Case no: CA23/2011
In
the matter between:
KWESTHUBA
CONSULTING (PTY) LTD
Appellant
and
ADESEMOWO
KAYODE
Respondent
Heard:
29 August 2013
Delivered:
31 January 2014
Summary: Rescission of
a default judgment- appellant served with statement of claim-
appellant wrongly assumed legal proceedings
commence at the Labour
Court when served with summons by sheriff - Explanation for the delay
reasonable- appeal upheld- Labour
Court judgment rescinded.
Coram:
Waglay JP, Dlodlo AJA and Musi AJA
JUDGMENT
DLODLO AJA
[1] On 26 November 2010,
the Labour Court granted judgment by default against the Appellant.
The Respondent is a former employee
of the Appellant. The appellant
dismissed the Respondent at the end of November 2009 due to its
operational requirements. The Respondent
referred a dispute to the
Commission for Conciliation Mediation and Arbitration (“the
CCMA”) for conciliation. The
Appellant participated in the
Conciliation and was represented by one William Edward Davy (“Mr.
Davy”), the managing
director of the appellant. The dispute
remained unresolved. The Respondent then referred his dispute to the
Labour Court. As mentioned
above, the Labour Court granted judgment
in favour of the Respondent by default. The default judgment ordered
the Appellant to
pay the Respondent the equivalent of nine months
remuneration, calculated at R42600.00 per month. On 8 September 2011,
an application
for rescission of the default judgment launched in
terms of Rule 16 A of the Rules of the Labour Court by the Appellant
was refused.
This therefore is an appeal against the refusal to grant
such rescission application. Leave to appeal was granted by the
Labour
Court.
[2] The Appellant only
became aware of the default judgment against it on 24 January 2011
when the sheriff arrived at its premises
to serve a warrant of
execution issued pursuant to the granting of the said default
judgment. The application for rescission was
launched by the
Appellant on 14 February 2011. It was opposed by the Respondent. I
need to mention that the essence of the Appellant’s
explanation
for its failure to oppose respondent’s Statement of Claim is
that Mr. Davy who received the Statement of Claim
wrongly assumed
that the Statement of Claim was a supplied to him as a courtesy and
was not an official “
Summons”
from the Labour
Court and that the “
Summons
” would eventually be
served by the Sheriff of the Court.
[3] Mr. Davy, admitted
that with hindsight he realised that the assumption he made was
wrong. The reason he gave for making such
a wrong assumption was that
according to his past experience in litigious matters the proceedings
have been initiated by service
of a Summons by the Sheriff. Questions
may come to mind as to why he did not seek advice from the
Appellant’s usual Labour
consultants? Why did he not resort to
phoning the Registrar of the Labour Court to enquire whether the
Statement of Claim he received
had any legal force and effect? Why
did he not gather from the document he received what was required of
him to do? All these questions
have one answer, namely, Mr. Davy
believed that there was no reason to do anything until the Sheriff
had served the Appellant with
the “Summons”, and, even
though he is a director of the Appellant, he is and remains a
layperson in legal matters.
[4] There is no assertion
that he even read the Statement of Claim he received. His expectation
that the Sheriff of the Court would
come and serve the Appellant with
the Court papers accords with the practice in courts such as the
Magistrate’s Court as
well as the High Court. His belief,
erroneous as it was, cannot be interpreted to mean that the appellant
failed to show an interest
in this matter. It participated in the
conciliation of the dispute and gave every indication that it
intended opposing the matter.
Had it not been for the wrong
assumption made by Mr. Davy on receipt of the Statement of Claim, the
Appellant would clearly have
defended the matter. This is evidenced
by the fact that the Labour Court found that on the merits the
Appellant does
prima facie
have a
bona fide
defence.
[5] I accept that Mr.
Davy may very well have been negligent in certain respects but I do
not share the view that this is the kind
of negligence that qualifies
to be stigmatised as gross negligence at all. The conduct of the
Appellant, in my view, does not “
involve a departure from
the standard of the reasonable person to such an extent that it may
properly be categorized as extreme”.
See:
MV Stella
Tingas; Transnet Ltd t/a Portnet v Owners of the MV Stella Tingas and
Another
2003 (2) SA 473
(SCA). Importantly, even if it was found
that (with regard to the explanation that Mr. Davy gave for the
default) “
the sufficiency thereof is finely balanced”
,
the Court in the circumstances of a matter like the present one
should have considered that the Appellant’s prospects of
success “
tips the scale”
in favour of the granting
of the relief sought by the Appellant. See
Chetty v Law Society,
Transvaal
1985 (2) SA 756
(A) at 768.
[6] The Applicant for
rescission must show good cause. Such Applicant must also give a
reasonable explanation for the default (the
default must not be
willful or due to gross negligence on the part of the Applicant). It
is my view that the explanation put forth
by Mr. Davy in this matter
is reasonable. The application certainly has been shown to be
bona
fide
and there are no indications that it has been made with the
sole intention of delaying the Respondent’s claim. As found by
the court
a quo
indeed a
bona fide
defence to the
Respondent’s claim has been disclosed in the application. The
dictates of law and equity demand that the Appellant
be accorded an
opportunity to have its day in court with regard to this matter.
[7] With regards to
costs, this Court only grants costs where both law and equity demands
that an order of costs is appropriate.
I am of the view that this is
a matter where it would be just and fair to make no order as to
costs.
Order
[8] In the result, I make
the following order:
(a)
The
appeal succeeds.
(b)
No
order is made as to costs.
(c)
The
order made by the court
a
quo
is set aside and replaced by the following order:
“
(i) The
judgment granted by default on 26 November 2010 against the Applicant
is hereby rescinded.
(ii) The
Applicant is granted leave to defend the matter and file its
Statement of Defence within ten (10) days from the date of
this
order.”
Dlodlo
AJA
I
agree.
Waglay
JP
I
agree.
Musi AJA