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[2017] ZALAC 2
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Vermaak v MEC for Local Government and Traditional Affairs, North West Province and Others (JA15/2014) [2017] ZALAC 2 (10 January 2017)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case no: JA 15/2014
MARTIN
PHILLIP VERMAAK
Appellant
and
MEC FOR LOCAL
GOVERNMENT & TRADITIONAL
AFFAIRS, NORTHWEST
PROVINCE

First Respondent
GREATER TAUNG LOCAL
MUNICIPALITY

Second Respondent
MPHO SIMON
MOFOKENG

Third Respondent
KAONE LEBELO &
OTHERS

Fourth to Fifty-Third Respondents
Heard:
1 September 2015
Delivered:
10 January 2017
Summary:
Costs – attorney and own client – when to be granted-
factors to be considered –
General approach to costs in the
Labour Court restated – requirements of law and fairness.
Coram:
Tlaletsi DJP, Musi JA
et
Makgoka AJA
JUDGMENT
MAKGOKA
AJA
[1]
This is an appeal against a punitive costs
order made against the appellant by the Labour Court (Moshoana AJ) on
12 March 2013.
This followed the dismissal of the appellant’s
urgent application in which he had sought to interdict the second
respondent
from instituting a disciplinary enquiry against him. The
appeal is opposed by the second respondent (the municipality), which
supports
the order of the Labour Court.
[2]
The facts are simple. The appellant was
employed as a chief financial officer (CFO) by the municipality with
effect from 16 January
2012. On 1 August 2012, the third respondent,
purportedly as a municipal manager, tabled a report regarding the
appellant’s
alleged misconduct before the municipality’s
council. The third respondent appointed a firm of attorneys to
investigate the
allegations. On 19 October 2012, the appellant was
called to attend a disciplinary enquiry to answer certain charges.
The enquiry
commenced on 8 November 2012. On 18 December 2012, he was
found guilty of various charges. The presiding officer recommended
that
the appellant be dismissed with immediate effect.
[3]
On 29
January 2013, the third respondent served the appellant with a letter
informing him that the council of the municipality had
accepted and
confirmed the recommendation of the presiding officer that the
appellant should be dismissed with effect from 25 January
2013. On 3
February 2013, the municipality advertised the appellant’s
erstwhile position of chief executive officer. On 14
February 2013,
the appellant launched an urgent application in the Labour Court
seeking to set aside the process leading to, and
including, his
dismissal. On 25 February 2013, he filed a referral for unfair
dismissal at the Commission for Conciliation Mediation
and
Arbitration (CCMA).
[1]
By the time the urgent application served before the Labour Court,
the referral to the CCMA was pending.
[4]
The thrust of the appellant’s urgent
application was the validity of the third respondent’s
appointment by the municipality.
In particular, the appellant
challenged the validity of a resolution taken by the council of the
municipality on 13 June 2012 extending
the contract of the third
respondent as municipal manager. He contended that the appointment
was invalid and therefore any steps
taken by the third respondent
after the extension of his contract as per that resolution was of no
force and stood to be set aside.
[5]
The urgent application was opposed by,
among others, the second respondent. The opposing respondents argued
that the application
was not urgent as the resolution sought to be
set aside had been taken already in June 2012, and the application
was only brought
in February 2013. The appellant contended that
although he was dismissed in January 2013, his position was
advertised on 3 February
2013, and therefore the position could be
filled before the application could be finalised if he had approached
the court on a
normal basis.
[6]
The
opposing respondents adopted a different view on urgency. Their views
in this regard are set out in a letter dated 21 February
2013 sent to
the appellant’s attorneys. In that letter, it was suggested
that the application was defective, and should be
withdrawn and that
a punitive costs order would be sought in the event the application
was not withdrawn. Needless to say, that
suggestion was not heeded,
and the matter was argued on 12 March 2013. Urgency was argued
in
limine
,
during which counsel for the opposing respondents argued for the
matter to be struck from the roll with a punitive costs order
on an
attorney and client scale. The opposing respondents’
contentions found favour with the Labour Court, and in an
ex
tempore
judgment, the application was struck from the roll and costs were
granted on attorney and own client scale against the appellant.
[2]
[7]
In awarding costs on attorney and own
client scale, the Labour Court reasoned as follows:
‘
On
3 February 2013 he (the appellant) became aware of another angle that
will (sic) his relief in the long run, that is the filing
of the
post. He does nothing until 7 February 2013 when he went to consult
the legal team. More so he does not seek to interdict
the filing of
the post, that part of the relief, in my mind if it was specifically
sought, might have been perhaps urgent. I do
not agree that that kind
of relief ought to be implied …The applicant finds himself in
the same position as millions of
employees who are dismissed, whether
fairly, unfairly or lawfully or unlawfully, on a daily basis. The
question is what makes the
applicant special to have his case
determined quickly. That is the reason why rule 8 requires a party to
set out the reasons why
the relief is necessary. His relief is still
there on another day, like millions of dismissed employees. The fact
that the applicant
chose to peg his claim as one of unlawfulness as
opposed to unfairness is of no moment. In the premises I am not
persuaded that
the application is urgent. That brings me to the
question of costs. Mr Olua had pressed on me to make a costs order at
a punitive
scale. The reason behind that being that the applicant was
warned in advance. To my mind this application was ill-conceived. The

applicant has already sought a remedy in another forum, the CCMA. As
to why he came to this court albeit under the banner of unlawful

dismissal, it baffles me. I know I do not have to deal with the
merits of the other points raised and I have read the heads filed
by
the applicant’s counsel with care. I do not believe that the
applicant is to be considered at any different level than
any
employee who had been dismissed
.’
[8]
In this Court, it was contended that the
Labour Court misdirected itself in the exercise of its discretion by
awarding costs in
the first place, alternatively, awarding costs on a
punitive scale against the appellant. It was argued that the court
acted upon
a wrong principle or failed to exercise its discretion
properly or fairly in the circumstances of the matter. It was further
contended
that there were no special or extraordinary circumstances
warranting the type of order made against the appellant, and that a
fair
order would have been one where each party paid its own costs,
and at worst for the appellant, he should have been ordered to pay

the costs on a party and party scale.
[9]
Unsurprisingly, the municipality supports
the costs order made by the Labour Court. On its behalf, it was
contended that the Labour
Court properly took into account the fact
that the appellant sought to challenge only in February 2013, a
resolution which had
been taken as early as June 2012. According to
the municipality, this was grossly vexatious and abuse of the court
process, which
had to be met with a punitive costs order. It was
further contended that the appellant’s urgent application was
premised
on “a perverse” view of the law and a costs
order as ordered by the Labour Court was therefore justified under
the
circumstances.
[10]
The
awarding of costs in the Labour Court is governed by s 162 of the
Labour Relations Act 66 of 1995 (LRA) which provides that
in making
orders for payment of costs, the Court has to have regard to the
requirements of law and fairness. In deciding whether
to order
payment of costs, the court may take into account, among others, the
conduct of the parties in proceeding with the matter
before the court
and during the proceedings. In
Moloi
v Euijen,
[3]
it was observed that the framework of s 162 supports the proposition
that when making orders of costs the requirements of law and
fairness
are paramount.
[4]
The requirements of law and fairness are on equal footing, and none
is secondary to the other. See in this regard
Callguard
Security Services v T&GWU
[5]
and
Xaba
v Portnet Ltd
.
[6]
[11]
The
rule of practice that costs follow the result does not govern the
making of costs orders in the Labour Court and such orders
are made
in accordance with the requirements of law and fairness. See in this
regard
MEC
for Finance (KZN) and Another v Dorkin NO and Another
[7]
where Zondo JP explained the rationale for that approach:
‘
[T]he
norm ought to be that costs orders are not made unless those
requirements (of law and fairness) are met. In making decisions
on
costs orders this court should strive to strike a fair balance
between, on the one hand, not unduly discouraging workers, employers,

unions and employer organisations from approaching the Labour Court
and this court to have their disputes dealt with, on the other,

allowing those parties to bring to the Labour Court and this court
frivolous cases that should not be brought to court. This is
a
balance that is not always easy to strike, but if the court is to
err, it should err on the side of not discouraging parties
to
approach these courts with their disputes…’
[8]
[12]
The
award of costs and the scale thereof are a matter within the
discretion of the court making the order.
[9]
The appeal
court will not easily interfere with the exercise of that discretion.
It can only interfere where the discretion was
exercised on a wrong
principle or was capriciously made. Put differently, a court of
appeal’s power to interfere is limited
to those cases where the
exercise of the judicial discretion is vitiated by misdirection,
irregularity, or the absence of grounds
on which the court below,
acting reasonably, could have made the order in question.
[10]
In applying this principle to the present case, it should always be
borne in mind that the court not only granted costs against
the
losing party, but also that such costs were ordered on a punitive
scale of attorney and own client.
[13]
I
cannot fault the Labour Court in its reasoning and conclusion that
the application was not urgent and that it was misconceived.
But I
part ways with the Labour Court in its conclusion that that
constituted a basis for a costs order, let alone a punitive one.
The
scale of attorney and client is the highest scale possible that a
litigant can be ordered to pay. It is an extraordinary one
which
should be reserved for cases where there is clearly and indubitably
vexatious and reprehensible conduct on the part of a
litigant. The
nature and reach of such an order has been described as “exceptional,
very punitive and as indicative of extreme
opprobrium
.”
[11]
The learned authors of
Erasmus
Superior Court Practice
list various circumstances in which the courts have, over the years,
awarded costs on an attorney and own client scale. One of
the
instances is where a party’s conduct has been found to be
“unconscionable, appalling and disgraceful”. See
also
Sentrachem
v Prinsloo
[12]
where it was reiterated that an award of attorney and own client
costs had to be seen as an attempt by the Court to go one step

further than an ordinary order of costs between attorney and client
so as to ensure that the successful party was indemnified with
regard
to all reasonable costs of litigation, and that it was an
extraordinary order which could not be made without good reason.
[13]
[14]
In the present case, the only basis on
which the order was premised was that the matter was not urgent and
that the appellant has
been warned in advance that a punitive costs
order would be sought against him, should he not withdraw the
application. That, in
my view, can hardly be described as
“unconscionable, appalling or disgraceful”. The very fact
of a finding that the
application was “misconceived” of
itself excludes all of the above descriptions. It should be borne in
mind that in
making the impugned order, the Labour Court moved from
the default position (of no costs orders in the Labour Court, as
explained
in para 11 above) to the extreme end of the spectrum (order
of costs on attorney and own client scale).
[15]
It is
discernable from a consideration of the authorities that where the
Labour Court has made a costs order, it has invariably
considered
that it was deviating from the general premise, and therefore
carefully reasoned the basis of such an order.
[14]
Unfortunately this is not the case in the present matter. What is
more, the Labour Court made an order not sought by any of the

opposing respondents. As stated earlier, the opposing respondents
requested an order on attorney and client scale. Instead, the
court
made an order on attorney and own client scale. There is no
indication in the record of proceedings or in its judgment, why
the
court adopted that route. It would have been preferable, if the court
was of the view that the circumstances of the case warranted
costs on
a much higher scale than sought by the opposing respondents, to have
given the parties notice of its intention, and invited
them to
address it on that aspect.
[16]
The
other consideration which the Labour Court seems not to have taken
into account is the fact that the appellant is an individual
employee
not supported by a trade union. In
Lewis
v Media 24 Ltd,
[15]
it was observed that the Labour Court has generally been reluctant to
order costs against an individual employee. Indeed, there
is an
unambiguous trend in the judgments of the Labour Court, this Court
and the erstwhile Appellate Division, in which those Courts
have
declined to make costs orders against unsuccessful individual
litigants not supported by trade unions, first, because of their

vulnerable financial position, and second, because a costs order may
deter similarly placed individuals from approaching the courts.
[16]
[17]
For the above reasons, I conclude that the
Labour Court did not exercise its discretion properly. This Court is
therefore at large
to interfere with the award of costs and make an
order that we consider appropriate in the circumstances. Taking into
account considerations
of law and fairness, I am of the view that the
order of the Labour Court should be substituted with one of no order
as to costs.
[18]
With
regard to the costs of this appeal, I take a view too, that no order
should be made as to costs. I take into account that there
is an
on-going relationship between the parties as the appellant has been
reinstated as the municipality’s chief financial
officer. One
of the considerations in making costs orders in the Labour Court is
the on-going relationship between the parties,
which will survive
after the dispute has been resolved by the court. Therefore, a costs
order, especially where the dispute has
been a
bona
fide
one, may damage that relationship and thereby detrimentally affect
industrial peace and the conciliation process.
[17]
[19]
In the result, the following order is made:
1.
The appeal is upheld;
2.
The costs order granted by the Labour Court
is set aside and in its stead the following is substituted:
‘
There
is no order as to costs’
3.
Each party shall bear their own costs of
the appeal.
____________________
TM
Makgoka
Acting Judge of Appeal
Tlaletsi DJP, Musi JA
concur in the judgment of Makgoka AJA.
APPEARANCES:
FOR THE APPELLANT:

Adv. R. Grundlingh
Instructed by Nilsen
Steenkamp & Koen Inc Johannesburg
FOR THE SECOND
RESPONDENT:

Adv. Sibuyi
Instructed by Kgomo
Mokhetle & Tlou, Mahikeng
FOR THE FIRST, THIRD AND
FOURTH
TO FIFTY-THIRD RESPONDENTS.    No appearance
[1]
The
appellant was eventually reinstated with full retrospective effect
following a successful challenge of his dismissal at the
CCMA. The
CCMA award was not taken on review and the appellant is still in the
employ of the municipality as the chief financial
officer.
[2]
See the
judgment of the Labour Court on the SAFLII website reported as
Vermaak
v Taung Local
Municipality
(
JR 315/13) [2013] ZALCJHB 43 (12
March 2013).
[3]
Moloi
and Another v Euijen and Another
(1999) 20 IJL (LAC).
[4]
Para 20.
[5]
Callguard
Security Services (Pty) Ltd v Transport and General Workers Union
and Others
(1997) 18 ILJ 380 (LC).
[6]
Xaba v
Portnet
Ltd
(2000) 21 IJL 1739 (LAC).
[7]
Member
of the Executive Council for Finance, Kwazulu-Natal and Another
(2008) 29 ILJ 1707 (LAC) at para 17.
[8]
At para 19.
[9]
Protea
Assurance Co Ltd v Matinise
1978 (1) SA 963
(A) at 976H;
Minister
of Prisons and another v
Jongilanga
1985 (3) SA 117
(A) at 124B.
[10]
See
Attorney-General,
Eastern Cape v Blom
1988 (4) SA 645
(A) at 670D – E.
[11]
Erasmus
Superior
Court Practice
at
E12-26.
[12]
Sentrachem
Ltd v Prinsloo
1997
(2) SA 1
(SCA).
[13]
At 22B-D.
[14]
See for
example
Rudman
v Maquassi Hills Local Municipality and Others
(J1472) [2013] ZALCJHB 166; (2014) 35 ILJ 765 (LC) 30 July 2013;
New
Justfun Group (Pty) Ltd v Turner and Others
(J786/14) [2014] ZALCJHB 177 (14 May 2014).
[15]
Lewis v
Media 24 Ltd
(2010)
31 2418 (LC) para 129.
[16]
NUM v
East Rand Gold & Uranium Co. Ltd
(1991) 12 ILJ 1221 (A);
Malandosh
v SABC
(1997) 18 ILJ 544 (LC);
Value
Logistics v Basson and Others
(2011) 32 ILJ 2552 (LC
);
University of Pretoria v
CCMA
and Others
(2012) 33 ILJ 183 (LAC);
Nombakuse v Department of Transport &
Public Works:
Western
Cape Provincial Government
(2013) 34
ILJ 671 (LC).
[17]
NUM v
East Rand Gold and Uranium Co. Ltd
(1991) 12 ILJ 1221 (A).