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[2008] ZALCCT 12
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City of Cape Town v South African Municipal Workers Union (C429/2007) [2008] ZALCCT 12 (19 March 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA HELD IN
CAPE
TOWN
Case
no: C429\2007
In
the matter between:
CITY
OF CAPE
TOWN
Applicant
and
SOUTH
AFRICAN MUNICIPAL
WORKERS
UNION
Respondent
JUDGMENT
MOSHOANA
AJ
Introduction
[1] In this matter, Gush
AJ made an order in the following terms:
1.
A rule nisi is issued calling upon the
respondent to show cause on 25 October 2007 at 10H00 why an order
should not be made in the
following terms:
1.1
that the provisions of the rules of the
above Honourable Court as to the time and the manner of service
applicable to the matter
be dispensed with, and that the matter is
disposed of as one of urgency in accordance with the provisions of
Rule 8 of the Rules
of the above Honourable Court.
1.2
that the strike in respect of which written
notice was given by way of a notice dated 07 August 2007, a copy of
which appears as
Annexure “RLF 2” to the supporting
affidavit (“the respondent’s strike notice) is hereby
declared unprotected
and unlawful.
1.3
that the respondent be interdicted from
calling for or instigating any of the applicants employees to
participate in the strike
referred to in the respondent’s
strike notice.
1.4
that all of the applicants employees
performing essential services as determined by the Essential Services
Committee in Government
notice No: 1216 in GG NO: 18276 on 12
September 1997, be interdicted from participating in any strike
action referred to in the
respondent’s strike notice or
otherwise.
2.
Directing the respondent to pay the costs
of this application.
3.
Paragraphs 1.1 to 1.4 shall operate as an
interim interdict and order pending the return day of this
application.
4.
Directing that service of this order be
effected by fax on the Cape Metropolitan Branch of the respondent.
5.
Authorising the applicant to seek further
relief, if so required, under the same case number on the same
papers, duly supplemented,
provided that at least 24 hours notice of
such application is given to the person against whom such relief is
sought.
6.
Grant the applicant such further and or
alternative relief as the above Honourable Court may deem fit.
[2]
On 25 October 2007 (the return day), Potgieter AJ made the following
order:
1.
The rule nisi granted on 27 August 2007 by
Mr Acting Justice Gush is confirmed and made final;
2.
The question of costs is reserved for
determination on the 05
th
February 2008;
3.
The respondent shall file its supplementary
affidavits by no later than 08 November 2007;
4.
The applicant shall file its replying
affidavit (if any) by no later than 22 November 2007.
[3]
On 05 February 2008, Cheadle AJ then postponed the issue of costs as
per paragraph 2 of the order by Potgieter AJ to 07 March
2008.
[4]
Therefore, the matter came before me for determination of costs. The
applicant argued that it should be awarded costs including
those of
07 March 2008. The respondent argued that an appropriate order is
that of no order as to costs. In this judgment, I shall
attempt to
answer the following questions:
1.
Does a cost order depend on the depth of
the pocket or the size of the purse as it were?
2.
When is it appropriate to award costs?
Background
facts
[5]
The applicant was formally constituted in 22 September 2000 by the
Local Government: Municipal Structures Act 117 of 1998
. This was
after amalgamation of seven local municipalities. The employees of
the disestablished municipalities were transferred
to the applicant
in terms of
section 197
of the LRA.
[6]
A process of restructuring was then undertaken. This process
commenced with the publication of a so- called micro design structure
in February 2002 and December 2004. A placement agreement between the
applicant and IMATU came into being.
[7]
As a result certain employees were placed into the new structure.
During 2006, the applicant, experienced a shift in political
power to
a Democratic Alliance led council. As a consequence, the applicant
sought to realign (restructure again).
[8]
On 05 October 2006, the respondent referred a dispute (the first
dispute) to the SALGBC for conciliation. That dispute, concerned
the
alleged refusal to bargain by the applicant specifically about the
restructuring process. This dispute was settled on 21 December
2006.
On 30 May 2007, the respondent referred a second dispute to the
Bargaining Council concerning the alleged failure by the
applicant to
apply the provisions of the so-called Task agreement. This dispute
was conciliated upon and a certificate of non-resolution
was issued.
The respondent then referred it to arbitration.
[9]
On 19 June 2007, the respondent referred yet another dispute to the
Bargaining Council concerning the interpretation and application
of
the settlement agreement (the one reached after the first referral).
This dispute was abandoned.
[10]
On 02 July 2007, a fourth referral was made by the respondent. On 15
August 2007, the Bargaining Council issued a certificate
and
characterised the dispute as one of mutual interest as contemplated
in
section 135
(5) (a) of the LRA.
[11]
As a result, on 17 August 2007, the respondent issued a strike notice
calling upon the applicant’s employees to commence
strike on 28
August 2007. That led to an urgent application on 27 August 2007
which culminated in an order by Gush AJ referred
to earlier. It is
apparent that the respondent opposed the application full steam.
Heads of argument were filed. The respondent
raised a point in
limine. Effectively, it argued that since the certificate of 15
August 2007, had not been set aside, then such
entitled it to call
the strike. Much reliance was placed on the decision of the LAC
[1]
.
[12]
In response to that argument, the applicant relied on the decisions
of the Labour Court which suggested that the fact that
a certificate
is issued does not mean that a strike that follows would be
protected
[2]
.
[13]
It is apparent that Gush AJ was persuaded by that argument, hence the
issuance of the rule nisi and the rejection of the point
in limine. I
shall now turn to the issue of whether a cost order should be made?
Should
the Labour Court issue an order of costs against the respondent?
[14]
It is important to mention that the Labour Court is established as a
court of law and equity
[3]
.
Also, it is important to note that the Labour Court is a Superior
Court that has authority, inherent powers and standing in relation
to
matters under 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
[4]
.
[15]
Therefore, the Labour Court is a Superior Court and has to approach
the issue of costs like the High Court. Unlike the High
Court, the
Labour Court would be guided by the provisions of the Act
[5]
[16]
In terms of
section 162
, the Labour Court has a discretion to make an
order for the payment of costs, according to the requirements of the
law and fairness.
In deciding the issue, the Labour Court has a
discretion to take into account whether the matter has been correctly
referred to
it and the conduct of the parties in defending the matter
or during the proceedings.
[17]
It is important to mention that proceedings in the Labour Court take
two forms. The first is by way of referral
[6]
.
The second is by way of motion
[7]
.
[18]
In my view factors to be taken into account as set out in
section 162
(2) are only relevant to a referral as opposed to motion
proceedings. Accordingly for the purpose of this judgment I shall
consider only the law and fairness as required by
section 161
(1), as
this was motion proceedings.
[19]
Since I have an unfettered discretion I have to exercise it
judicially
[8]
. The purpose of
awarding costs, particularly to a successful party, in terms of the
general rule, is to indemnify him or her for
the expense to which he
has been put through having been unfairly compelled either to
initiate or to defend litigation as the case
may be. Owing to the
necessary operation of taxation, such an award is seldom a complete
indemnity, but that does not affect the
principle
[9]
.
That being the purpose, as a matter of law, when exercising my
discretion judicially, I need to take that into consideration.
[20]
The general rule is that costs should follow the results, this in my
view is the law part that is being referred to in
section 161
(1). If
that was the only consideration, I would not hesitate to award the
applicant costs as the successful party
[10]
.
[21]
However, being the Labour Court; I am enjoined to consider fairness.
Fairness in this instance is fairness to both parties
to the
proceedings. Fairness being a wide concept, it is comprised of
various ingredients; which in appropriate circumstances may
include
the size of the pocket or purse as it were.
[22]
It does seem that
NUM
v Ergo
[11]
will
forever remain the guiding authority on the issue of fairness. In
that judgment, the Appellate Division as it then was set
amongst
others the following factors:
(a)
requirements
of law and fairness to be applied (this was per the statutory
requirement ever even then
[12]
.
(b)
the general rule that in the absence of
special circumstances costs follow the event would yield where
consideration of fairness
require it.
(c)
avoiding costs order where there is a
genuine dispute and the approach to court was not unreasonable.
(d)
where there is an ongoing relationship,
costs should be avoided particularly where there is a bona fide
dispute.
(e)
the conduct of the parties.
[23]
The court acknowledged that the above considerations were not
intended to be
numerus clausus
. There is a wide discretion. In
making no costs award, the court then took into consideration that:
(a)
NUM
is the
successful party.
(b)
NUM’s
conduct
in the negotiations process led to justifiable unhappiness and
frustration on the part of the
Ergo
.
(c)
there was and presumably still an ongoing
relationship between the parties.
(d)
the issue raised are of fundamental
importance, not only to the parties, but to all the players in the
important arena of industrial
conciliation.
[24]
Recently the Supreme Court of Appeal endorsed the following as
factors justifying the imposition of costs order:
(a)
mala fides;
(b)
unreasonableness and
(c)
frivolousness
[13]
.
[25]
Compare in this regard
Manhattan Motors Trust v Adbulla
(2002) 110
BLLR 930
(LAC)
where Comrie AJA writing for the majority held
that Maleka AJ was in error when refusing costs if his reasoning was
as set out in
this comment:
“
I
can only order costs when there is some element of vexatious or (bad
faith?) on the part of the litigant”.
[26]
In this court, Landman AJ as he then was in
Mutual
Construction Company (Pty) LTD v Federated Mining Unions
1997 (11)
BLLR 1470
(LC)
made an order of costs
and he said:
“
An
order of costs is imperative; not only to compensate the applicant
but to stress the point that uprocedural strikes are contrary
to the
ethos of the new labour dispensation and ought not to be tolerated”
.
[27]
The facts of that case were such that the first respondent readily
admitted in the answering papers that the strike was unprocedural.
Such is not the case in the matter before me. In court, applicant’s
counsel argued that the fact that there was clear authority
as in
Cape
Gate
decision, the respondent should not have opposed and should have
conceded to the order upon receipt of the papers.
[28]
In my view, such cannot be the basis not to oppose a relief which the
respondent believed was perfectly entitled to oppose,
regard being
had to their reliance on the LAC judgment of
Fidelity
.
[29]
Recently the LAC per Zondo JP writing for the majority said the
following:
“
With
regard to costs I am of the opinion that the requirements of the law
and fairness dictate that there should be no order as
to costs. There
is a continuing employment relationship between the parties in this
matter and the matter which is the subject
matter of the present
proceedings is of great importance to all parties concerned. Even in
the Labour Court no order as to costs
ought to have been made
[14]
.
It is
clear from that judgment that where there is an ongoing relationship
and the matter being of great importance to the parties,
the Labour
Court ought not to make an order as to costs. The message by the LAC
is loud and clear.
Conclusion
[30]
In view of the authorities referred to above, I took the following
factors into account:
1.
the undisputed ongoing relationship between
the applicant and the respondent.
2.
the respondent was not at all
unreasonable in opposing the relief.
3.
their belief that since they had the
certificate, the strike action would be protected hence the
opposition was not at all unjustified.
4.
the matter about the legality or
otherwise of the strike was of great importance to it and its
members.
5.
that they did not oppose the granting
of the final order.
6.
that they called off the strike
immediately after the rule nisi issued.
Order
[31]
In the result, I make the following order:
1.
There is no order as to costs.
____________________________
G
N MOSHOANA AJ
Acting
Judge of the Labour Court
Johannesburg
Appearances
For
the Applicant : Adv
Wakefield and Adv Kahanovitz
Instructed
by
: Mallicks Attorneys
For
the Respondent : J Whyte
Date
of hearing
: 07 March 2008
Date
of Judgment : 19 March 2008
[1]
Fidelity
Guards Holdings (Pty) LTD v Epstein & Other (2000) 21 ILJ 2382
(LAC).
[2]
Mittal
Steel SA LTD v Solidarity and Others unreported J1655\05 dated 07
September 2005, followed in Cape Gate (Pty) LTD v NUMSA
& Others
(2007) 28 ILJ 871 (LC).
[3]
Section
151
(1) of the LRA.
[4]
Section
151
(2) of the LRA.
[5]
Section
162
of the LRA.
[6]
Section
191
(5) (b) and
Rule 6.
[7]
Section
145
and
158
and
Rule 7.
[8]
See
Fripp v Gibbon
1913 AD 354
and AC Celliers Law of costs at 15:24.
[9]
Pajen
components South Africa Ltd v Boric Gaskets CC 1999 (2) SA 409 (W)
[10]
K
v Minister of Safety and Security
[2005] ZACC 8
;
2005 (6) SA 419
(CC) and Van der
Berg V GCB SA (2007) 2 ALL SA 499 (SCA).
[11]
1992
(1) SA 700 (AD).
[12]
Section
17 (12) (a) and 17 (21A) (c) of the 1956 Act.
[13]
Chevron
Engennering (Pty) LTD v Nkambule and Others
2004 (3) SA 495
(SCA) at
512 G—J.
[14]
Solidarity
v Eskom Holdings & Others yet unreported CA 9\05 dated 20
February 2008.