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[2016] ZALAC 27
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Windybrow Theatre v Maphela and Others (JA47/15) [2016] ZALAC 27; (2016) 37 (ILJ) 2641 (LAC) (14 June 2016)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,
JOHANNESBURG
LAC Case no: JA47/15
DATE: 14 JUNE 2016
Reportable/Not Reportable
In the matter between:
WINDYBROW
THEATRE
......................................................................................................
Appellant
And
VUYO
MAPHELA
.......................................................................................................
First
Respondent
SHERIFF
OF THE HIGH
COURT,
.......................................................................
Second
Respondent
JOHANNESBURG
CENTRAL
ALLIE
ACHMAT
........................................................................................................
Third
Respondent
Heard:
22 March 2016
Delivered:
14 June 2016
Summary:
Jurisdiction of the Labour Court for repayment
of monies in light of a procedural defect in the execution of a writ
– Labour
Court having inherent jurisdiction to hear any matter
related to its processes – powers of the Labour Court not
extending
beyond employment related matter – remedy for illegal
payment arising out of a process related to the execution of the CCMA
award, not incidental to the Labour Court’s performance of its
functions
- illegal or mistaken payment bearing no direct link
to any function performed by the Labour Court in resolving an
employment dispute
- Sheriff’s wrongdoing giving rise to a
distinct cause of action in delict not falling within the
jurisdiction of the Labour
Court – Labour Court’s
judgment upheld albeit for different reasons – appeal
dismissed.
Coram: Waglay JP, Musi JA
et
Murphy AJA
JUDGMENT
MURPHY
AJA
[1]
This is an appeal against a portion of a judgment and order of the
Labour Court (Rabkin-Naicker J). The matter concerns the
inherent
powers of the Labour Court, with the question for determination being
whether the Labour Court has the power to order
the repayment of
moneys attached and distributed in terms of an irregular and invalid
attachment.
[2]
On 27 May 2014, the appellant dismissed the first and third
respondents (“the respondents’”) on the ground
of
alleged financial irregularities, involving an amount of
approximately R64 million rand having being spent without proper
procedures
being followed.
[3]
The respondents referred an unfair dismissal dispute to the
Commission for Conciliation, Mediation and Arbitration (CCMA) which
found that their dismissal was both procedurally and substantively
unfair and awarded compensation to the first respondent in the
amount
of R643 000.00 and to the third respondent in the amount of R648,785.
The appellant filed an application to review and set
aside the
arbitration award on 12 November 2014.
[4]
On or about 20 November 2014, the respondents had the arbitration
award certified and caused a writ of execution to be issued
out of
the Labour Court and sent it to the second respondent (“the
Sheriff”) on 11 December 2014. Despite not having
served the
writ on the appellant, the Sheriff attached the appellant's property
by serving garnishee orders on the appellant's
bank, which
transferred the funds to the Sheriff without notifying the appellant.
The Sheriff attached two amounts from the appellant’s
bank
account: an amount of R161,466.65 on 19 December 2014 and a further
amount of R1 294,285.09 on 10 January 2015. The appellant
only
received notification that a writ had been issued or that execution
would take place on 13 January 2015 when the Sheriff's
office sent an
e-mail attaching the writ of execution and notice of attachment.
Confirmation was received from the appellant's
bankers that the
monies had been attached.
[5]
The appellant’s attorneys of record sent a letter dated 14
January 2015 to the Sheriff, informing it that the appellant
had
instituted review proceedings and sought an undertaking that the
Sheriff would not distribute any funds. The Sheriff advised
the
attorneys that the funds received on 19 December 2014 had already
been distributed to the first respondent but undertook to
keep any
further monies in trust pending the outcome of the review.
[6]
The appellant’s attorneys of record sent a letter to the first
respondent informing him that the Sheriff had irregularly
distributed
the funds to him and that if he did not repay the money by 19 January
2015, urgent proceedings would be instituted
against him. The first
respondent did not respond to the letter, nor did he repay the money.
The appellant accordingly instituted
an urgent application in the
Labour Court on 21 January 2015, in which it sought to interdict any
further payments, and to claim
repayment of moneys already
distributed.
[7]
The Labour Court ordered the Sheriff to release the money retained in
trust to the appellant. It further ordered that the enforcement
of
the writ of execution be stayed pending the finalisation of the
review application. In respect of the relief sought for repayment
of
the money already distributed to the first respondent, the Labour
Court held that it did not have jurisdiction to order the
first
respondent to repay to the appellant the money he had received from
the Sheriff.
[8]
The Labour Court granted the appellant leave to appeal to this Court
against its finding that it did not have jurisdiction to
order the
first respondent to repay the money to the appellant.
[9]
Service and execution of orders of the Labour Court takes place in
accordance with the process applicable in the High Courts.
[1]
Section 44 of the Superior Courts Act
[2]
requires service by the Sheriff of process (including writs of
execution) on the affected person (in this case the appellant as
judgment debtor) either in person, by service on its address, or by
telefax or other electronic e-mail. Rule 45 of the Uniform
Rules of
the High Courts regulates execution against movables of a judgment
debtor. Rule 45 (3) provides that:
‘
Whenever
by any process of the court the sheriff is commanded to levy and
raise any sum of money upon the goods of any person, he
shall
forthwith himself or by his assistant proceed to the dwelling-house
or place of employment or business of such person (unless
the
judgment creditor shall give different instructions regarding the
situation of the assets to be attached) and there
(a) demand satisfaction of
the writ and failing satisfaction;
(b)
demand that so much movable and disposable property be pointed out as
he may deem sufficient to satisfy the said writ …’
[10]
In executing the writ and in performing his functions generally, the
Sheriff acts as an officer of the law and not as the agent
of the
judgment creditor or his attorney.
[3]
It is not for the judgment creditor to elect in what form or manner
execution should take place, or which particular assets should
be
attached. Execution can only proceed to attachment, sale and
distribution, once there is proper service of the writ of execution
on the judgment debtor. Failure to do so will render the execution
invalid.
[4]
There will not be an attachment where neither the writ nor the notice
of attachment have been served on or brought to the notice
of the
owner. The Labour Court was accordingly correct that the attachment
of the applicant’s funds was unlawful. The issue
is whether it
had jurisdiction to order that the moneys attached and disbursed to
the first respondent be repaid to the appellant.
[11]
The Labour Court held with reference to section 173 of the
Constitution of the Republic of South Africa, 1996 (Constitution)
and
section 157 of the LRA that the Labour Court, being a creature of
statute, does not have an inherent power to protect its own
process
in terms of the Constitution and thus lacked jurisdiction to make the
order sought. For the reasons that follow, the finding
of want of
jurisdiction is correct, but the reasoning of the court
a quo
is overly broad and exclusive. The Labour Court does have an inherent
power to protect and regulate its processes, but it does
not extend
to a jurisdiction to grant the appellant relief in delict or
unjustified enrichment.
[12]
The appellant claims that the Labour Court has an inherent or
ancillary
[5]
power to order the first respondent to repay the monies attached and
distributed to him by the Sheriff. The first respondent disagrees
and
contends that the inherent powers bestowed on the Labour Court in
terms of section 151 of the LRA are applicable only in relation
to
matters of a procedural nature, whilst the ancillary powers in
section 158 (1)(j) apply to matters closely connected to functions
performed within jurisdiction and do not extend to hearing either a
delictual or enrichment claim.
[13]
An enquiry into
jurisdiction
involves determining whether the court has the power by law to
adjudicate upon, determine and dispose of a matter.
[6]
[14]
Section 173 of the Constitution provides that the Constitutional
Court, Supreme Court of Appeal and High Courts have the inherent
power to protect and regulate their own process, and to develop the
common law, taking into account the interests of justice. It
is
silent on the position in relation to the Labour Court. However,
section 151 (2) of the LRA deals with the matter. It reads:
‘
The
Labour Court is a superior court that has authority, inherent powers
and standing, in relation to matters within its jurisdiction,
equal
to that which a court of a provincial division of the Supreme Court
has in relation to the matters under its jurisdiction’.
The
former provincial divisions of the Supreme Court are now the
divisions of the High Court.
[15]
In
Mukaddam
v Pioneer Foods (Pty) Ltd and Others,
[7]
the Constitutional Court stated in relation to section 173 of the
Constitution:
‘
Section
173 makes plain that each of the superior courts has an inherent
power to protect and regulate its own process and to develop
the
common law on matters of procedure, consistently with the interests
of justice. The language of the section suggests that each
court is
responsible and controls the process through which cases are
presented to it for adjudication. The reason for this is
that a court
before which a case is brought is better placed to regulate and
manage the procedure to be followed in each case so
as to achieve a
just outcome. For a proper adjudication to take place, it is not
unusual for the facts of a particular case to
require a procedure
different from the one normally followed. When this happens it is the
court in which the case is instituted
that decides whether a specific
procedure should be permitted.’
[8]
[16]
Section 158(1)(j) of the LRA further provides that the Labour Court
may “…deal with all matters necessary or incidental
to
performing its functions in terms of this Act or any other law”.
[17]
The inherent and incidental powers govern procedural questions
related to matters within jurisdiction and the regulation of
court
processes. Matters and processes incidental to the regulation of the
execution of orders fall within the inherent power of
the Labour
Court. Execution is a process of the court and the court has an
inherent power to control its own process subject to
the rules of
court. It according has a discretion to set aside or stay a writ of
execution.
[18]
The first respondent submitted however that the relief sought by the
appellant goes beyond mere procedure or the protection
and regulation
of process, as it involves either a substantive delictual claim for
damages against the Sheriff,
[9]
or an enrichment claim by the Sheriff against him (the first
respondent) based on either the
condictio
indebiti
or the
condictio
sine causa
.
[10]
These are distinct causes of action arising from the conduct of the
Sheriff and cannot be adjudicated by the Labour Court relying
on its
inherent or incidental powers to regulate its processes.
[19]
The
rei
vindicatio
is not available to the appellant as owner of the money on account of
the principle that ownership of money passes with
commixtio.
In
First
National Bank of Southern Africa Ltd (FNB) v Perry NO and Others,
[11]
the
Supreme Court of Appeal (“the SCA”) said:
‘
It
might seem a simple thing to recover stolen money from one found in
possession of it. But the matter is complicated by the rule
in our
law, an inevitable rule it seems to me, flowing from physical
reality, that once money is mixed with other money without
the
owner’s consent, ownership in it passes by operation of
law.…Accordingly a
rei
vindicatio
,
which is an assertion of ownership, does not lie… In such a
case one must enquire, as a matter of substantive and not merely
procedural law, what cause of action may lie against the bank. Delict
not having been alleged against it, the remaining possibility
is
unjustified enrichment.’
[12]
[20]
The first
question to be asked is whether the inherent powers of the Labour
Court permit it to entertain a cause of action in unjustified
enrichment, because were the order sought by the appellant to be
made, the court would in effect be granting relief against the
first
respondent for the unjustified enrichment which arose as a
consequence
of
the illegal or mistaken payment made to him by the Sheriff.
[21]
The inherent powers provision in section 151(2) of the LRA confers
“inherent powers and standing,
in
relation to matters under its jurisdiction
”.
The exclusive jurisdiction of the Labour Court is defined and limited
by section 157(1) of the LRA. It provides:
‘
Subject
to the Constitution and section 173, and except where this Act
provides otherwise, the Labour Court has exclusive jurisdiction
in
respect of all matters that elsewhere in terms of this Act or in
terms of any other law are to be determined by the Labour Court.’
[13]
[22]
The matters within jurisdiction of the Labour Court are thus “all
matters that elsewhere in terms of this Act or in terms
of any other
law” must be determined by the Labour Court. These matters are
all employment related disputes, including the
review of CCMA
arbitration awards, alleged unfair operation requirements dismissals,
unfair discrimination, collective bargaining
disputes and contractual
claims under the Basic Conditions of Employment Act.
[14]
For the most part, if not entirely, disputes falling within the
jurisdiction of the Labour Court are those arising between employees
and employers or their bargaining agents. Nothing in the LRA or other
legislation confers jurisdiction upon the Labour Court to
adjudicate
a
delictual or
enrichment claim arising out of illegal conduct by the Sheriff in the
execution process. Thus, such causes of action
not being within its
jurisdiction, the Labour Court cannot have any inherent powers in
relation to such claims, because section
151(2) restricts the Labour
Courts inherent powers to powers “in relation to matters under
its jurisdiction”. Thus,
the first respondent’s
submission that section 173 of the Constitution read with section 151
of the LRA does not provide
the Labour Court with the inherent power
to order the first respondent to repay the funds paid to him by the
Sheriff is correct.
[23]
The appellant’s reliance on section 158(1)(j) of the LRA also
does not assist it. The subsection bestows a power on the
Labour
Court to deal with all matters “necessary or incidental to
performing its functions” in terms of the LRA or
any other law.
A function is the purpose or activity for which a thing exists or is
used. The certification of an arbitration award
constitutes the
performance of a function in terms of the LRA; and the issuing of a
writ is an incidental and necessary consequence
of the performance of
such function and thus falls within the ambit of section 151 and
section 158(1)(j) of the LRA, as would the
stay or setting aside of
such writ. The ordering of the repayment of funds
in
casu
however falls outside the ambit of section 158(1)(j) of the LRA,
because it is neither necessary nor incidental to the Labour Court’s
performance of its functions. It is not necessary because such an
order has no bearing upon the Labour Court’s task of
determining
the unfair dismissal dispute regarding the respondents.
And in so far as the mistaken or illegal payment arose out of a
process
related to the execution of the CCMA award, the illegality or
mistake (the actionable conduct) was remote and any remedy for it
is
not incidental to the Labour Court’s performance of its
functions, in the sense of being an ancillary subordinate means
of
fulfilling any function
.
The matter of the illegal or mistaken payment bears no direct link to
any function performed by the Labour Court in resolving
an employment
dispute. The Sheriff’s wrongdoing has given rise to a distinct
cause of action in delict in respect of which
there may be
substantive defences.
Any
relief against the first respondent would accrue in terms of the
condictio
indebiti
or the
condictio sine
causa
.
The
following statement of the Supreme Court of Appeal in
Makhanya
v University of Zululand
[15]
is apposite:
‘
Once
more, so it seems to me, [this case], like all the cases that
preceded it, [is] not about jurisdiction at all. It [is] about
whether there [is] a good cause of action. In my view the least said
about jurisdiction in such cases the better because, once
that
red-herring is out of the way, courts will be better placed to focus
on the substantive issue that arises in such cases, which
is whether,
and if so in what circumstances, employees might or might not have
rights that arise outside the LRA.’
[16]
[24]
The Labour Court, although mistaken in its reasoning, was
consequently correct in refusing to order repayment. This Court is
not without sympathy for the appellant. It has floundered on a
jurisdictional issue arising from complexity in the statute. Its
ethical assertion that the respondents should wait until the review
is determined before receiving any payment, is compelling.
One would
have preferred to see the first respondent return the money to the
Sheriff until the dispute was finally determined.
Those misgivings
however cannot justify an assumption of jurisdiction where none
exists. They are nonetheless relevant to the question
of costs. For
that reason, I prefer to make no award of costs.
[25] The following orders are made:
i)
The appeal is dismissed.
ii)
There is no order as to costs.
JR
Murphy AJA
I
agree
Waglay
J
I
agree
C
J Musi JA
APPEARANCES:
FOR THE APPELLANT:
FOR
THE FIRST RESPONDENT:
[1]
Section 163 of the Labour Relations Act 66 of
1995 (LRA).
[2]
Act 10 of 2013.
[3]
Sedibe v United Building Society
1993 (3) SA 671
(T);
Schoerie NO v
Syfrets Bank Ltd
1997 (1) SA 764
(D)
773;
Mpakathi v Kghotso Development CC
2003 (3) SA 429
(W) at para 8.
[4]
Campbell v Botha
[2008] ZASCA 126
;
2009 (1) SA 238
(SCA).
[5]
Section 151 and
section 158(1)(j) of the LRA.
[6]
Ewing
McDonald & Co Ltd v M & M Products Co
[1990] ZASCA 115
;
1991 (1) SA 252
(A) at 256G-H;
Graaff-Reinet
Municipality v Van Ryneveld’s Pass Irrigation Board
1950 (2) SA 420
(A) at 424; and
Spendiff
NO v Kolektor (Pty) Ltd
[1992] ZASCA 18
;
1992 (2) SA 537
(A) at 551C.
[7]
2013 (5) SA 89
(CC).
[8]
At para 42.
[9]
Upon
attachment, the possession, custody and control of the property are
vested in the Sheriff who is liable to both the judgment
debtor and
creditor for loss caused by improper control of or negligent custody
of the property -
Morrison
NO v Rand NO
1967 (2) SA 208
(D) at 210;and
Menzies
Motor Co (Pty) Ltd v Turkstra
1955 (3) 408 (T) at 412.
[10]
Rahim v Minister
of Justice
1964 (4) SA 630
(A).
[11]
[2001] 3 All SA 331
(A) at
paras.
[12]
At para 16 and 19.
[13]
Section 157(2) of the LRA confers a concurrent
jurisdiction with the High Court in Bill of Rights disputes which is
not relevant
in this matter.
[14]
Act 75 of 1997.
[15]
(2009) 30
ILJ
1539
(SCA)
.
[16]
At para 93.