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[2009] ZALCJHB 73
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Bartmann ACC & Bartmann MME t/a Khaya Ibhubesi v De Lange and Another (J441/09) [2009] ZALCJHB 73 (17 April 2009)
OF
INTEREST
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE
NO: J 441/09
In
the matter between:
BARTMANN
AAC & BARTMANN MME T/A KHAYA IBHUBESI
Applicant
and
DE
LANGE
CLG
First
Respondent
THE
SHERIFF OF
POTCHEFSTROOM
Second
Respondent
JUDGMENT
TODD
AJ:
Introduction
1.
This judgment deals with the considerations
that this Court takes into account in deciding whether or not to stay
the enforcement
of orders of this Court. It also deals with the
question of costs in the context of litigation that on the face of it
is
not commercially viable.
2.
This is an application brought on an urgent
basis to stay the execution of a writ issued by this Court. The
stay was originally
sought pending the finalisation of an application
to make a settlement agreement an order of court and an application
to set aside
the writ. Following the delivery of further
affidavits in the matter, the Applicant (the employer) sought to stay
the writ
pending an application to rescind the underlying order of
this Court, which was made on 5 November 2008 under case number
J275/08.
3.
In terms of that order, the employer was
ordered to pay the First Respondent (the employee) an amount of
R6,279.92, together with
his legal costs on an attorney and own
client scale. It is not apparent from the papers before me what
the cause of action
was in the claim for payment of that amount, but
the claim appears to have been brought under the provisions of the
Basic Conditions
of Employment Act (BCEA).
4.
The judgment debt, the amount of R6,279.92
plus interest on that amount, was paid during December 2008 in
circumstances referred
to further below. The writ which is the
subject of these proceedings, is for an amount of R16,460.79.
This is the amount
of the taxed costs and charges of the attorneys of
the employee.
Applicable
legal principles
5.
This
Court has discretion to stay the execution of its own orders for such
period as it deems fit. This is so both by reason
of the
specific powers conferred on the Court by section 158 of the LRA, and
because the Labour Court is a superior court with
authority, inherent
powers and standing in relation to matters under its jurisdiction
equal to that of a provincial jurisdiction
of the High Court
[1]
.
6.
The
Court’s discretion should be exercised judicially, but
generally speaking a Court will grant a stay of execution where
real
and substantial justice requires a stay; or, put differently, where
injustice would otherwise be done.
[2]
7.
The
discretion is a wide one. It is founded on the Court’s
power to control its own process. Grounds on which
a Court may
choose to stay execution include that the underlying cause of action
on which the judgment is based is under attack,
or that execution is
being sought for improper reasons. But these are not the only
circumstances in which the Court will
exercise the power.
[3]
8.
In
determining whether or not to grant a stay of execution, the High
Court has “borrowed” from the requirements for
the
granting of interim interdicts
[4]
.
At the heart of the enquiry is whether the Applicant has shown a
well-grounded apprehension of execution taking place and
of injustice
being done to the Applicant by way of irreparable harm being caused
if execution is not suspended.
[5]
9.
One
of the grounds on which a stay of execution is regularly sought in
this Court is that there is a pending attack on the underlying
cause
of action giving rise to the judgement debt, whether arising from an
order of this Court or an arbitration award made in
the CCMA
[6]
.
10.
There is no closed list of factors that may
be relevant to the question whether the interests of justice require
a stay of execution.
There are, however, a number of
considerations that are frequently important in applications of this
nature.
11.
Applicants usually point out that an amount
payable under a judgement of this court bears interest at the rate
determined in terms
of the
Prescribed Rate of Interest Act, 1975
.
This protects the interests of the judgment creditor (typically the
employee in whose favour an order has been made) in
the event that a
challenge to the underlying cause of action is unsuccessful.
12.
By contrast, if a challenge to the
underlying cause of action is ultimately successful, and the amount
of the judgment debt has
already been paid, the judgment debtor
(typically the employer) may find it difficult to recover the amount
that it has already
paid. This may be the case in particular
where the judgment creditor was a relatively low paid employee, or
has suffered
financial hardship in consequence of having been
dismissed. This Court is regularly asked to assume in these
circumstances
that an employee will have difficulty repaying any
amount already paid if the challenge to the underlying cause of
action later
succeeds.
13.
Further
important considerations are whether the attack on the underlying
cause of action was brought in time
[7]
,
and whether its prospects of success are strong. This Court’s
roll is regularly burdened with a large number of applications
to
stay execution, usually brought on an urgent basis in the face of
steps taken to execute a judgment or award, when the attack
on the
judgment or award was brought out of time, or when that attack on the
face of it has little or no prospects of success.
In these
circumstances the interests of justice will seldom favour a stay.
14.
Another
important consideration is the interest that all parties have in
securing finality. The dispute resolution system
established by
the Labour Relations Act provides parties with access to easily
accessible remedies. In return, they must
exercise their rights
quickly. The time periods for doing so – 30 days for a
referral to conciliation in the case of
most disputes, and 90 days
thereafter for a referral to adjudication – are considerably
shorter than ordinary prescription
periods. Speedy dispute
resolution is important to one of the LRA’s primary objects,
the effective resolution of labour
disputes. This is one of the
ways in which the LRA seeks to advance economic development, social
justice and labour peace.
[8]
15.
Related to this is the question of the cost
to all parties of a delay in finality, and the cost to all parties of
instituting or
opposing further proceedings brought in this Court to
attack the underlying cause of action or to stay execution pending
such an
attack. Many Applicants come to this Court seeking a
stay by way of urgent application, with counsel and attorneys
briefed,
in circumstances where the amount of the judgment debt is
less than or, perhaps, little more than the cost of doing so.
The
position is far worse if one takes into account the overall cost
of the attack on the underlying cause of action which is usually
the
basis of the application to stay. It is difficult to conceive
what the commercial justification is for litigation of
this kind, and
one fears that all too often litigants are acting on inadequate or
inappropriate legal advice.
16.
In considering whether real and substantial
justice requires a stay of execution, the Court will be mindful of
the risk that an
injustice may be done to the less powerful party to
the proceedings. The stronger financial position of most
employers enables
them to mount attacks on the underlying cause of
action which the employee party is frequently powerless to oppose or
to expedite.
This may lead to an outright abuse of the dispute
resolution system.
17.
These are some of the main considerations
that will weigh with the Court in considering whether or not to grant
a stay of execution.
Appling these
principles to the facts
18.
Turning to the present proceedings, it need
hardly be stated that the amount at issue does not warrant litigation
of the kind being
conducted in this Court. The parties’
combined legal costs will inevitably far exceed the amount of the
underlying
claim. Indeed, that appears to have been the case
already at the stage when the initial default judgment was granted.
19.
Mr Scholtz, who appeared for the First
Respondent, contended that the proceedings were not urgent and that
the rules of this Court
dealing with urgent applications had not been
complied with. Although he pointed to a number of shortcomings
in the Applicant’s
papers in the proceedings, I am satisfied
that this was an appropriate matter in which to condone
non-compliance with the rules
and to allow the Applicant to bring
these proceedings as a matter of urgency.
20.
Mr Scholtz also pointed out that the
Applicant had already paid the amount of the principal debt together
with interest, in an amount
of R7,588.54. This is evident from
a return of service of the Sheriff dated 11 December 2008. This
meant that this
was a case where the Applicant will have instituted
rescission proceedings outside the time periods prescribed by the
rules of
this Court.
21.
In its replying papers the Applicant admits
that the Sheriff attended at its premises to execute the writ in
December 2008.
It asserts, however, that the First Respondent,
who was present, was asked to explain why an order had been obtained
and a writ
of execution issued when, so the Applicant claims, the
underlying cause of action had previously been resolved between the
parties.
The Applicant avers that the First Respondent then
stated that this had been an error and that he had erroneously failed
to advise
his attorney of the settlement agreement previously
concluded between the parties. The parties then agreed, so the
Applicant
contends, that the Applicant would pay the relevant amount
of the judgment debt to the Sheriff and would deduct that amount from
an amount of salary still due to the First Respondent.
22.
This version of events, if shown to be
correct, may constitute a valid explanation for the delay in bringing
the rescission application.
There is no reason apparent on the
papers before me why the Applicant should have been aware at that
stage that there was also
a substantial bill of costs coming its
way. Whether or not it should have known this, and whether or
not it will succeed
in persuading this Court to grant rescission of
the order made on 5 November 2008, are questions that I do not need
to consider
further here.
23.
On these facts alone, I would have been
inclined to refuse to stay execution of this Court’s order of 5
November 2008, despite
the pending rescission application, having
regard to the various considerations that I have set out earlier in
this judgement.
There is, however, a special feature of this
case that warrants further attention.
24.
The First Respondent instituted four
separate claims against the Applicant in this Court, under different
case numbers but at the
same time. The papers before me shed
light on only two of these. In the claim brought under case
number J725/08, the
First Respondent sought an order for payment of
the amount of R6,272.92, together costs on an attorney and own client
scale.
In the claim brought under case number J726/08, he
sought an order directing the Applicant to provide him with the
written particulars
of his employment contemplated in section 29 of
the BCEA, again with an order for costs on an attorney and own client
scale.
The other two applications instituted by the First
Respondent at the same time are not further described in the papers
before me.
25.
The two separate applications that are
described in the papers were instituted simultaneously under separate
provisions of the BCEA.
Both applications were unopposed.
Two separate orders were obtained by default on the same date, 5
November 2008, each with
an accompanying order for costs on an
attorney and won client scale.
26.
In
the first of these applications, brought under case number J725/07,
in which the primary relief sought was an order for payment
of the
amount of R6,272.92, the First Respondent’s attorneys
subsequently taxed a bill of costs in the amount of R16,460.79.
[9]
A cursory review of the bill of costs in the matter rings alarm
bells. The bill, viewed in its totality, has what Wallis
J
described in the
Sibiya
case
[10]
as a “surreal air” about it.
27.
The attorneys charge for an initial ninety
minute consultation with the First Respondent, and separately for the
perusal of various
documents which should no doubt have been perused
during the consultation. There follow a number of telephone
attendances,
mainly calls from the client, which last no more than
three or four minutes, for each of which there is a charge of R108.
Before the papers have been drafted, costs on the bill are in the
region of R2,000.
28.
For drawing the notice of application and
founding affidavit some R4,000 was claimed, and a little under R2,000
allowed. Then
there are various further attendances to get the
proceedings started, including a further thirty minute consultation
with the client
and attendance
ad jurat
,
the drawing of a schedule of documents and the sorting and perusal of
annexures, the drawing of a confirmatory affidavit with
attendance
ad
jurat
and making copies, and the
service and filing arrangements. These add a further
approximately R2,000 to the cost of instituting
the proceedings.
29.
Thereafter the bill includes the cost of
travelling to and from Potchefstroom to draw, index and paginate the
court file, the cost
of perusing and copying the notice of set down,
with telephone calls in between keeping the client informed of these
developments.
A further thirty minute consultation with the
client is recorded “regarding matter placed on unopposed
roll”.
The bill then includes the preparation of a draft
order and writ of execution on the day before the matter was to be
heard.
30.
On the 5
th
of November 2008, the date on which this and the related application
under case number J726/08 were heard, the bill includes a
total of
three hours travelling time to and from Potchefstroom, and a “day
fee” for appearance in the Labour Court
in an amount of
R3,000. In addition to this there is half an hour spent “while
order is typed and issued”, and
a charge for receiving and
perusing the order.
31.
Whereas the amount claimed by the employee
in the matter was R6,272.92, the total fees and disbursements claimed
by the attorneys,
in an unopposed matter, exceeded R20,000.
After the deduction of R6,641 that was taxed off the bill, and the
addition of
a drawing fee and VAT, the bill was finally allowed in
the amount of R16,460.79.
32.
There is no copy before me of the bill of
costs under case number J726/08, which I assume must by now have been
prepared.
That was the parallel application brought to compel
the same employer to provide the particulars of the employee’s
employment
contemplated in section 29 of the BCEA. For present
purposes I say nothing further about this other than to point out the
obvious concern that I have that the bill of costs in that matter
will reveal duplications in relation to consultations, telephone
calls keeping the client informed of developments, and fees for
travelling to and from court and for attending court when the matter
was heard.
33.
In considering the bill of costs prepared
under case number J725/08, the comments of Wallis J in paragraphs
[35], [36] and [37]
of the
Sibiya
case referred to earlier have particular resonance. After
considering the costs reflected in two bills in the matters that
he
was dealing with there, which included a standard appearance charge
by counsel in an amount of R750, Wallis J pointed out that
the
attorneys who succeeded in obtaining orders for costs in those
matters claimed amounts of, on average, between R4,000 and R5,000
in
total for an unopposed application on a party and party scale.
34.
On these costs, Wallis J had the following
to say, at paragraph [37] of the judgment:
“
Yet apart
from the production of application papers that are run off on a word
processor in standard form, no significant legal
effort is involved
in dealing with these matters. In the social security cases I
describe this as a profitable cottage industry
for the legal
practitioners concerned.”
35.
At paragraph [61], he states the following:
“
I have
drawn attention earlier in this judgment to the basis upon which
bills of costs are prepared in these cases and presented
for
taxation. For reasons already given I have substantial
reservations as to whether the bills of costs presented for taxation
by these attorneys are in fact an accurate reflection of the work
that they perform or whether they are, like the application papers,
prepared as a matter of rote in the knowledge that they will be
agreed with the State Attorney. .… Not only am I
concerned whether the bills of costs being presented in these cases
accurately reflect the work done by the attorneys, but I am
also
concerned, bearing in mind the production line manner in which the
papers in these cases are produced, whether it is permissible
or
appropriate for the attorneys simply to charge in accordance with the
tariff laid down in rule 70 or whether this constitutes
a form of
over-reaching. I appreciate that it is not over-reaching of
their own client because they are not charging their
clients fees.
However, it seems to me equally inappropriate for an attorney to
present a bill of costs for taxation to the
opposing side where the
fees claimed are exorbitant in relation to the amount of work
actually done and the nature of that work.
This is inconsistent
with the bill being a party and party bill.”
36.
Although costs in those cases had been
awarded on a party and party scale, it seems to me that the same
concern arises where the
bill is on an attorney and own client
scale. It is inconceivable that the attorneys could ever have
charged their client,
or intended to charge their client, an amount
of more than R16,000 for proceedings in which an amount of some
R6,000 was claimed.
If that is correct, then the attorneys have
claimed payment of costs substantially in excess of what they had in
fact agreed to
charge their client. Viewed in that context,
this and the many similar claims like it which populate this Court’s
unopposed
roll, assume the complexion of litigation that is driven by
attorneys to generate revenue, rather than by the clients in whose
name the proceedings are instituted.
37.
The
bill of costs in the present matter gives rise to a real concern that
the underlying application amounts to an abuse of the
process of this
Court. It appears to indicate that the “cottage industry”
about which Wallis J was has spread
to this Court. Indeed, the
costs claimed here far exceed those with which Wallis J was concerned
in
Sibiya.
It
appears that Applicants may be being encouraged to bring multiple
applications to this Court, either to enforce various provisions
of
the BCEA or to claim rights under their employment contracts, where
the costs purportedly incurred in this Court, and claimed
by the
attorneys, far exceed the value of enforcement or the amount at
issue, and where the same result could be achieved far more
cost
effectively utilising the enforcement mechanisms specifically
provided for in Chapter Ten of the BCEA.
[11]
38.
Although matter number J726/08 is not
before me, it is apparent from the papers in that matter which are
attached to the papers
in the present proceedings that the same
Applicant sought, and was granted on an unopposed basis, an order
directing compliance
by the employer with its obligations under
section 29 of the BCEA. While this is not something that it is
necessary for me
to decide for the purpose of the present
application, it seems appropriate, in light of the concerns that I
have raised in the
preceding paragraph, for me to express my view
that an employer’s obligation under section 29 of the BCEA is
not a “basic
condition of employment” as defined in that
Act. It may well follow from that, it seems to me, that the
subject matter
of that application falls outside the jurisdiction
conferred on this Court by the provisions of section 77(3) of the
BCEA, and
that those obligations may be enforced only by means of the
enforcement provisions set out in Chapter 10 of the BCEA. That
is, however, not a question that was before me in this matter, and I
say nothing more of it here.
39.
In the present matter the Applicant has
established at least on a
prima facie
basis, that the underlying proceedings
should never have been instituted, having become settled between the
employer and employee.
The Applicant’s averments in this
regard, and in particular the circumstances in which the initial
judgement debt was paid
to the Sheriff, give rise to a concern that
the attorneys for the First Respondent may have been acting without
proper instructions,
or that the First Respondent failed to
communicate to his attorneys that at least one of the disputes that
had initially been referred
to them had subsequently become resolved.
40.
In all of the circumstances, and
notwithstanding the existence of various disputes of fact on the
papers, the Applicant has established
at least a
prima
facie
case that it should be granted a
stay of execution pending resolution of the challenge that it
proposes to bring to the order made
by this Court on 5 November
2008.
41.
I have already alluded to the fact that the
present proceedings appear to represent litigation that is not
warranted having regard
to the legal costs that are being incurred by
both parties, and that cannot on any reasonable construction be
commercially viable.
The parties should take heed of this
concern in deciding whether and to what extent to continue to
prosecute or to oppose these
proceedings. Partly for this
reason, I would be inclined to make no order as to costs in the
matter. Nevertheless,
since the parties will have an
opportunity to deliver further papers and to make submissions on the
return date, including as to
costs, I intend to reserve the question
of the costs incurred in the proceedings to date.
42.
On the return date I would expect both
parties to address this Court, in addition, on the question whether
this litigation is appropriate,
or commercially viable, and whether
the attorneys should be permitted to charge their clients their usual
fees, or any fees at
all, in relation to this litigation. This
is a matter on which the parties should be prepared to address this
Court on the
return date.
Order
43.
In the circumstances I make the following
order:
1.
The Applicant’s failure to comply
with the applicable rules is condoned, and the application may be
brought as one of urgency.
2.
A rule nisi is issued calling upon the
Respondents to show cause on a date to be determined by the Registrar
why a final order should
not be granted in the following terms:
2.1
That further execution of the order made by
this Court on 5 November 2008 under case number J275/08, including
the writ issued on
10 February 2009, is stayed pending finalisation
of an application to rescind the order.
3.
Paragraph 2.1 shall operate with immediate
effect as an interim order pending the return date.
4.
The Applicant is given leave to supplement
its founding papers within 10 days of the date of this order.
5.
The Respondents may deliver further
answering papers within 10 days of delivery of any supplementary
papers referred to in paragraph
4, and the Applicant may deliver
replying papers within 5 days thereafter.
6.
In any supplementary papers delivered in
the proceedings the parties are directed to deal, in addition to any
other matters that
may be relevant, with the following matters:
6.1
Whether any bill of costs has been prepared
and taxed under case number J726/08, and if so the outcome of that
taxation.
6.2
What other proceedings were instituted
between the same parties at the same time as the proceedings under
case numbers J725/08 and
J726/08, and the present status of those
proceedings.
6.3
The total amounts of the fees and costs for
which the parties have been invoiced by their attorneys to date in
these proceedings,
in the proceedings under case number J726/08, and
in the other proceedings referred to in 6.2, and the amounts paid to
date.
7.
The costs of this application are reserved
for determination on the return date.
Date
of hearing:
12 March 2009
Date
of judgment:
17 April 2009
For
the Applicant:
N Lombard, instructed by Blake Bester
For
the First Respondent:
W Scholtz of Jansens Incorporated
[1]
section 151 of the Labour Relations Act
[2]
Strime v Strime
1983 (4) SA 850
(C) at 852A;
Santam
Ltd v Norman
1996 (3) SA
502
(C) at 505E-F;
Road
Accident Fund v Strydom
2001 (1) SA 292 (C)
[3]
see
Road Accident Fund v
Strydom
supra at 301C-D
[4]
Erasmus v Sentraalwes
Kooperasie Bpk
[1997] 4
All SA 303
(O) at 307
[5]
Road Accident Fund v
Strydom
supra at 304 B-G
[6]
enforceable as if it were an order of this Court by reason of the
provisions of section 143(1) of the LRA
[7]
As to which, see the dictum in
Dumah
v Klerksdorp Town Council
1951 (4) SA 519
(T) at 522E
[8]
LRA section 1; and see, for example, the statements in this regard
in the as yet unreported decision of the Supreme Court of
Appeal in
Shoprite Checkers (Pty) Ltd v CCMA and others (case no 315/08) at
paragraphs [28] and [34]. The same point has
been made in
numerous judgments of this Court.
[9]
In a similar matter which came before this Court on the same day as
the present application, the employee party was represented
by the
same firm of attorneys as the First Respondent in the present
matter. The primary relief claimed in that matter
was an order
for payment of an amount of R3,753.93. The attorneys had
prepared a bill of costs in an amount (as yet untaxed)
of
R27,680.08: see
Afriguard
(Pty) Ltd v Ntsane
(case
no. J432/09, unreported).
[10]
In
Sibiya v Director
General: Home Affairs and others
(High Court, Kwazulu-Natal Division, Pietermaritzburg, unreported,
case number 13859/08) at [36]
[11]
Compare the similar recent cases dealt with in the unreported
judgments in
Afriguard
(Pty) Ltd v Ntsane
,
referred to in footnote 8 above; and in
Swanepoel
v Kievietskroon Country Estate
(unreported).
Each of these cases was initiated by the same firm of attorneys, the
attorneys of record of the First Respondent
in the present matter.