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[2010] ZALCCT 43
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Multisol SA (Pty) Limited v Commission for Conciliation, Mediation and Arbitration and Others (C266/2009) [2010] ZALCCT 43 (30 November 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
CASE
NO: C266/2009
In
the matter between:
MULTISOL
SA (PTY)
LIMITED
............................................................................................
Applicant
and
THE
COMMISSION FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
..........................................................................
First
Respondent
COMMISSIONER
DAVID WILSON N.O.
….......................................................
Second
Respondent
JULIEN
HENDRICK
LOUW
...................................................................................
Third Respondent
JUDGMENT
Introduction
1.
This is an application to review and set
aside the Commissioner’s arbitration award dated 16 March 2009
under the auspices
of the First Respondent in which the Second
Respondent (the Commissioner) found that the Third Respondent (Mr
Louw) was not guilty
of a breach of a fiduciary duty. He accordingly
held that Mr Louw had been unfairly dismissed and required the
Applicant to pay
him eight months’ remuneration as compensation
for a substantively unfair dismissal.
2.
There are three bundles of documents. The
first is the bundle with the pleadings, referred to as A with its
page numbers. The second
contains the CCMA documents and is referred
to as B with its page numbers. The third contains the transcript of
the arbitration
hearing and is referred to as C with its page
numbers. A paragraph or line number will follow the reference in each
case.
Outline
of the facts
3.
The Applicant conducts the business of an
importer and distributor of lubricant products for the motor and
engineering industry.
Mr Louw was employed as its lubricant
sales and development manager. He was previously the managing
director of Tradefirm
100 (Pty) Ltd, which held the distribution
rights for the products of Petro Canada. After the liquidation
of Tradefirm, the
distribution rights were transferred to Canada Oil
Sales (Pty) Ltd, a company of which his wife (Mrs Louw) was a
director and he
was a consultant.
4.
Canada Oil Sales was subsequently bought by
the Applicant, which, as a result obtained the distribution rights
for Petro Canada
products. Mrs Louw undertook not to compete with the
company for a period of two years from the date of transfer of the
shares
in the Canada Oils and the Applicant continued to operate
Tradefirm (in liquidation) under the trading name of Multilube.
5.
When the Applicant bought Canada Oil Sales
in August 2007 it had no stock. The stock belonged to Petro
Canada and Tradefirm.
The Applicant was in the process of acquiring
Petro Canada’s stock and uplifting it from its warehouse in
Cape Town. There
was uncertainty surrounding the extent and ownership
of the stock and accordingly the negotiations for its acquisition and
upliftment
were protracted. The original stock list did not include
wire rope dressing and OG-O grease. A revised list did.
6.
The Tradefirm stock was donated to Mrs
Louw. That stock included wire rope dressing and OG-O grease. It had
been donated in accordance
with Petro Canada’s policy to hand
over product that had reached its sell-by date at no cost provided
that it was sold on
without any warranty. A product waiver was issued
which included seven drums of wire rope dressing, of which five were
subsequently
given to Mrs Louw.
7.
Multilube received a request for stock from
a company called All Bearings on behalf of a shipping company. A Mr
Lee from All Bearings
and a Ms Fisher, a sales representative for
Multilube visited the shipping company on 5 February 2008 and
ascertained that the
order was for wire rope dressing and OG-O
grease. After speaking to Mr Shearon, a manager, a reduced price was
offered because
the stock was past its sell-by date and sold without
guarantee. The shipping company accepted the offer and placed an
order with
Mr Lee who in turn placed the order with Multilube on 6
February 2008. The shipping company and its agent All Bearings
were,
however, insistent on early delivery. Ms Fisher had promised
that it would be delivered by 8 February on the advice of Mr Shearon.
The order was transmitted to Ms Cronje, a telesales employee, for
processing.
8.
Mr Shearon, who was also the father of Mrs
Louw, telephoned Mr Louw on 6 February while he was with his family
on a skiing holiday.
Mr Louw did not take the call but instead passed
it on to his wife. Mr Shearon asked about the wire rope dressing and
grease and
was told that the stock belonged to her. She told him that
if he needed the stock he was welcome to it, meaning that he could
uplift
it and sell it on behalf of Multilube.
9.
On 11 February 2008, in a meeting with Mr
Bell, Mr Shearon raised the issue of supplying the stock to All
Bearings. Mr Bell responded
that he was in the process of moving the
stock to a new warehouse and they would sort it out when the stock
arrived there. Mr Louw
testified that he told Mr Bell at that meeting
(he was back from his holiday) that the stock belonged to his wife.
Mr Bell insisted
that all the stock was to be moved and that the
client must wait a week. Mr Bell denied the conversation and Mr
Shearon did not
give evidence. This is one of the major factual
disputes in the matter.
10.
In the meantime Ms Fisher was receiving
many phone calls from an irate Mr Lee who was ‘very angry’
at the delay. She
kept promising delivery as soon as possible.
11.
On 20 February 2008 Mr Louw received a
telephone call from Mr Shearon who was in Swaziland. He wanted to
know what was happening
with the supply and delivery of the stock
ordered by All Bearings. Mr Louw then testified that he asked Mr Bell
what was happening
concerning the stock and that he (Mr Bell) snapped
back to the effect that it was being dealt with. Mr Bell does
not recall
the conversation or his behaviour.
12.
On 20 February 2008 Mr Shearon advised Ms
Fisher on their way back from Swaziland that the stock had been
released and that Mrs
Louw was sending the stock to the client. Ms
Fisher asked him who should invoice the sale and Mr Shearon said that
Mrs Louw should.
On 21 February 2008 Ms Fisher sent an email to Mrs
Louw with the delivery address and the quoted prices.
13.
On 21 February, Ms Cronje, who had
processed the order, was advised by Mr Lee that Mrs Louw had phoned
him to inform him that the
stocks would be released that day. She
then sent an email to Mr Louw saying that she was confused. This
email was also sent to
Mr Bell. Mr Louw testified that he had no
knowledge of his wife’s involvement in the supply and the
delivery of the stock
until receipt of this email. This is another
major factual dispute in this matter.
14.
That night Mr Louw raised the issue with
his wife and was informed that she had been asked to release the
stock, supply it and have
it delivered to the customer. He recognised
that this was irregular and requested his wife to leave the matter as
it stood and
that he would sort it out. By this he meant to
regularise the transaction, which included addressing the issue of
invoicing.
15.
Mr Louw testified that although he intended
to raise the issue he did not have the opportunity to do so face to
face because Mr
Bell was absent on 22 February 2008 and he was in
Johannesburg the following week until 29 February 2008.
16.
On 27 February 2008 Mrs Louw received an
email from Ms Fisher instructing her to invoice the customer
directly. She had backdated
the order on the basis of the prices from
the order which had been forwarded to her by Ms Fisher. Mr Louw
testified that he had
no knowledge of this instruction from Ms Fisher
or that his wife had given effect to that instruction by invoicing
the customer
directly.
17.
On 29 February 2008 Mr Bell confronted Mr
Louw with the invoice sent to the customer by his wife and suspended
him pending a disciplinary
enquiry. He was charged with a number of
instances of misconduct, only one of which is relevant to this
review:
‘
Were
part[y] to / aware of the procuring of the sale of competitive
product namely Wire Rope Dressing and Peerless Grease to a third
party, All Bearings. This was done through the instrumentality of
your wife, who (to your knowledge) has a restraint of trade with
the
company’
[1]
18.
The disciplinary enquiry was chaired by an
independent person. The findings of the disciplinary enquiry were the
following:
‘
Mr
Louw, as sales manager for the stock in contention, and as head of
the sales division, had a clear duty to take whatever action
necessary to resolve the problem with the delivery of stock to All
Bearings. However, Mr Louw took no action at all in this matter,
except to finally approve the sale of the stock to All Bearings by a
competitor company, on the grounds that this would keep the
customer
happy. There were, to my mind, many other possibilities which could
have been explored to prevent this happening, including
if necessary
buying the required stock elsewhere and selling it to All Bearings at
a loss, but Mr Louw chose not to consider any
alternatives at all and
merely stood above the matter until confronted by the company.’
[2]
He
was accordingly dismissed.
19.
Mr Louw appealed against his dismissal but
was advised to refer any dispute he might have to the First
Respondent. The matter
was duly conciliated and referred to
arbitration. The arbitration hearing was held on 27 and 28
October 2008 and 02 and 03
March 2009. Both the Applicant and
Mr Louw were legally represented at the hearing.
Outline
of the Commissioner’s award
20.
The Commissioner handed down his award with
a detailed record of the evidence and careful analysis of the case.
His findings
may be summarised as follows:
20.1.
The finding of the chairperson of the
disciplinary hearing that Mr Louw was a party to the sale was
factually incorrect on the basis
that this was conceded by Mr Bell
and there was no evidence before him that he took any part in
approving the sale.
20.2.
There was no evidence to suggest that Mr
Louw was aware of his wife’s involvement in the transaction
prior to being informed
of it in the email from Ms Cronje on 21
February.
20.3.
There was no evidence to contradict Mr
Louw’s version that after receiving that email, he questioned
his wife and learnt that
she had arranged to have the products
delivered. He told her to leave matters as they were and that he
would sort it out, ie regularise
the transaction.
20.4.
Mr Louw did not raise the issue with Mr
Bell from 22 February to 29 February 2008. The failure to bring
the matter to the
attention of Mr Bell was explained by their
respective absences from office; Mr Louw’s justified assessment
that the matter
was no longer urgent (the product was in the process
of being delivered to the customer); and that he had told his wife to
‘leave
the matter there’ until he sorted it out (not
being aware that his wife had been subsequently asked to invoice the
sale and
had done so).
20.5.
An employee of Multilube, a Ms Fisher, sent
an email on behalf of Multilube to Mr Louw’s wife requesting
her to send an invoice
for the product directly to the customer.
20.6.
On the probabilities, he finds that the
most likely explanation is that in order to appease its customer,
employees at Multilube,
tried to source the product through Mr Louw’s
wife. An employee of Multilube had authorised her to invoice
the client
directly and that Mr Louw, discovering what had happened
and intending to set the matter right, had not got around to doing so
before being confronted by Mr Bell on 29 February 2008.
20.7.
Accordingly he was satisfied that Mr Louw
was not guilty of being party to the sale; or in breach of a
fiduciary duty by failing
to alert Mr Bell of the fact that his wife
was selling competing products to a customer of the Applicant.
20.8.
Mr Louw was awarded eight months’
remuneration in the sum of R366 666.64.
Application
to review
21.
In the application to review and to set
aside the arbitration award Mr Bell, the managing director of the
Applicant, deposed to
the founding affidavit. In that affidavit
he states that Mr Louw held a senior managerial position with the
Applicant and
that he owed a fiduciary duty to it which included not
placing himself in a position in which his own interests would
conflict
with those of his employer, for example by engaging in
undisclosed dealings with a business owned by his wife.
22.
The grounds of review are contained in Mr
Bell’s founding affidavit, his supplementary affidavit and the
Applicant’s
Heads of Argument.
Founding
affidavit
First
ground of review
23.
The
first ground
[3]
of review was
that the Commissioner did not apply his mind to this important aspect
of the case, in particular failing to appreciate
that secret trading
conducted by Mr Louw’s wife to his knowledge constituted good
grounds for dismissal and that he failed
to appreciate the rule as a
strict one which allowed little room for exception.
[4]
24.
The
Commissioner’s analysis from paras 107 through to 124 of his
award
[5]
reveals that this was
what he considered to be the central aspect of the case before him.
In his conclusion in para 124,
he concludes that there was no breach
of a fiduciary duty because he found that Mr Louw was not aware of a
conflict of interest
because he believed his wife was merely
assisting the Applicant by making her product available; that he was
not aware of the instruction
from Multilube to his wife to invoice
the customer directly; and that he had intended to regularise the
transaction but had not
had the opportunity to do so. In para
120 the issue is taken on directly. He accepts that Mr Louw is
in a fiduciary
relationship but finds that there was no evidence that
Mr Louw acted against the Applicant’s interests. He then
sets
out the reasons for that factual conclusion. This ground is
accordingly without merit.
25.
Under the same ground of review it is
claimed that the Commissioner failed to appreciate that secret
trading conducted by Mr Louw’s
wife to his knowledge
constituted good grounds for dismissal. The Commissioner finds
that the transaction engaged in by Mr
Louw’s wife was not
secret because the request to supply and deliver the product and to
invoice the customer emanated directly
from a manager and employee of
Multilube. The Commissioner, after a careful analysis of the
evidence, found that Mr Louw
was not aware of the transaction as at
21 February or that his wife had invoiced the client directly, until
he was confronted with
the invoice on 29 February.
26.
Under the same general head it is alleged
that the Commissioner failed to appreciate that the rule was a strict
one allowing little
room for exception. It is not clear which
rule is being referred to. If it is the rule that an employee
should not
place himself in a position where his own interests
conflict with those of his employer such as engaging in undisclosed
dealings
with a business owned by his wife, then as a matter of fact,
the arbitrator finds that he did not engage in dealings with a
business
owned by his wife. Mr Louw’s failure to disclose
is explained in para 114 which sets out a rational and persuasive
explanation why Mr Louw did not raise the matter with Mr Bell from 22
February to 29 February 2008 – all based on evidence
before
him.
Second
ground of review
27.
The
second ground of review
[6]
is
that despite the evidence before the Commissioner pointing ’clearly
and inexorably’ to Mr Louw having committed
serious misconduct
that had completely eroded the trust relationship between Mr Louw and
his employer and that this was the only
‘logical, rational and
reasonable conclusion to which a Commissioner hearing the matter
could have come’, the Commissioner
had held otherwise.
28.
This,
Mr Bell claims, is substantiated by the fact that the Commissioner
concluded that Mr Louw’s dismissal was substantively
unfair
because, inter alia, he held that there had been no sale as a result
of Mrs Louw’s cancellation of the invoice
[7]
.
This, Mr Bell claims, was so unreasonable that no reasonable
Commissioner could have come to that conclusion.
29.
The Commissioner records in para 107 of his
award that the chairperson of the disciplinary enquiry made a
factually incorrect finding
that Mr Louw had approved the sale of the
stock. He came to this conclusion on the basis of a concession made
by Mr Bell and the
fact that no evidence of Mr Louw’s
complicity in the sale had been placed before him. It is in this
context that the Commissioner
states that ‘there was no
evidence before me that the Applicant took any part in approving the
“sale” (which
was ultimately not a sale as no charge was
levied on the customer)’.
30.
Whatever the legal status of the
transaction was, it is irrelevant to the point being made by the
Commissioner, namely that Mr Louw
did not ‘approve’ the
transaction, whether a sale or not. To the extent that his conclusion
that Mr Louw’s dismissal
was substantively unfair as a result,
the issue concerned his
participation
in the transaction rather than its legal status. Accordingly, even if
it is an error of law, it does not affect the rationality
of his
finding.
Third
ground of review
31.
Mr
Bell contends that the Commissioner’s assessment of the
probabilities was ‘so out of kilter with the evidence before
him and the reality of the matter that no reasonable commissioner
could have concluded similarly’
[8]
.
In support of this Mr Bell claims that it was highly improbable that
Mr Louw and his wife did not discuss the transaction
before 21
February and thereafter because: they were married to each other; had
previously worked in the same business together;
and that they were
on holiday when her father phoned about the matter. Mr Bell
insists that the probabilities were overwhelming
that there were
extensive discussions between them because the matter required urgent
attention and the matter was not being dealt
with appropriately.
32.
Although
their personal and previous working relationship may ground such an
inference, the Commissioner considered the issue and
found that given
the circumstances and the testimony of both Mr Louw and Mrs Louw,
that such an inference was unwarranted
[9]
.
That is a reasonable assessment to make even if there is a more
probable version, which is what Mr Bell claims. But the assessment
of
the probabilities of the different versions is the subject matter for
an appeal – it is not the subject matter for review.
All that
is required in a review is to determine whether the decision-maker
has taken account of the evidence (which includes the
inferences to
be drawn from the facts) and drawn a reasoned and reasonable
conclusion based on that evidence. In this respect,
he has.
33.
Mr
Bell, in his founding affidavit at paras 29 to 50, constitutes his
assessment of the probabilities of the Mr Louw’s version
and
his credibility. In order to transform what is in effect
grounds of appeal into grounds for review, Mr Bell states that
this
assessment of the probabilities leads ‘clearly and inexorably
to [Mr Louw] having committed serious misconduct’
and that this
was ‘the only logical rational and reasonable conclusion to
which a Commissioner hearing the matter could have
come’.
[10]
It is abundantly clear from the Commissioner’s careful analysis
of the evidence in paras 107 to 125 that there is another
probable
version based on the evidence before him. That version in a nutshell
is-
33.1.
Mr Louw testified that he was not aware of
his wife’s involvement prior to 21 February 2008.
33.2.
The Commissioner accepted Mr Louw’s
evidence that his involvement prior to that date was to assist his
father-in-law Mr Shearon
to get stock released for a client and that
he discussed the issue with Mr Bell on 11 February 2008.
33.3.
Mr Louw testified that he and Mr Shearon
met with Mr Bell on 11 February 2008 when the issue of supplying the
stock to the customer
was discussed and that the issue of Mrs Louw’s
ownership of the stock was raised. Mr Bell initially denied that the
issue
had been raised with him on 11 February but upon being
presented with an email in which he acknowledged that the issue had
been
raised, he admitted that it may have taken place.
33.4.
Mr Louw testified that he again raised the
issue of supplying the stock to the customer with Mr Bell on 20
February 2008.
Mr Shearon had telephoned the Applicant to find
out what progress has been made. When this was raised by Mr
Louw, Mr Bell
became angry and snapped at him. Mr Bell did not
recall the conversation or his conduct.
33.5.
Mr Bell testified that he overheard a
telephone conversation on 21 February between Mr Louw and a third
person during which Mr Louw
said that ‘Danita is sticking her
nose in and sending emails’. Mr Louw denied making the
statement and said the call
was from Mr Shearon. The
Commissioner concluded that a half-heard conversation did not provide
any concrete evidence that
Mr Louw was involved in or aware of the
transaction.
33.6.
Mr Louw testified that after speaking to
his wife on 21 February 2008, he told her to leave matters and that
he would sort them
out.
33.7.
Mr Louw testified as to the reasons why he
did not raise the issue with Mr Bell. The respective absences of Mr
Bell and Mr Louw
were uncontested. The commissioner considered his
explanation, that the matter was not urgent because the stock had
been delivered,
as justifiable. The commissioner believed Mr Louw
when he said that he intended to raise the matter at the first
opportunity that
he had to meet face to face.
33.8.
Mr Louw testified that he was not aware
that his wife had invoiced the client directly. The implication that
Mr Louw knew of the
transaction and the invoicing because they were
married was considered by the commissioner and rejected.
33.9.
Accordingly the failure to bring the matter
to Mr Bell’s attention between 22 and 29 February 2008 did not
amount to a breach
of the fiduciary relationship grounding a
substantively fair dismissal.
34.
It is accordingly abundantly clear that Mr
Bell’s assessment of the evidence and his opinion of his own
credibility were not
the only logical, rational and reasonable
conclusions to which a Commissioner hearing the matter could have
come.
Supplementary
affidavit
35.
The
grounds in the founding affidavit were supplemented (and often
repeated) in Mr Bell’s supplementary affidavit. Apart from
the
general claims made, detailed grounds were advanced that evidence was
disregarded, that irrelevant evidence was considered,
that undue
weight was given to evidence in the face of contradictory evidence,
that objectively read the award revealed bias on
the part of the
Commissioner, that the Commissioner failed to appreciate the
fiduciary duties owed by Mr Louw to the company and
to properly
quantify the quantum of compensation.
[11]
36.
It is important to note that the grounds
relating to bias and quantum are raised for the first time in a
supplementary affidavit
despite the fact that the evidence tendered
in respect of both are drawn ex facie the award itself.
37.
Each of the grounds of review raised in the
supplementary affidavit not dealt with under the grounds cited in the
founding affidavit
is dealt with under this head.
Mr
Louw’s role in the sale
38.
In paragraph 30 to 34 of the Applicant’s
Supplementary affidavit, an additional ground is raised, namely that
the Commissioner
selectively quoted from the report of the
disciplinary enquiry. In paragraph 107 of the award, the Commissioner
quotes from the
findings in the report. The report reads as follows
(the italicised portion of which is the part quoted by the
Commissioner):
‘
Mr
Louw, as sales manager for the stock in contention, and as head of
the sales division, had a clear duty to take whatever action
necessary to resolve the problem with the delivery of the stock top
All Bearings. However
Mr
Louw took no action at all in the matter, except to finally approve
the sale of the stock to All Bearings by a competitor company,
on the
grounds that this would keep the customer happy.
There were to my mind many other possibilities which could have been
explored to prevent this happening, including if necessary
buying the
required stock elsewhere and selling it to All Bearings at a loss,
but Mr Louw chose not to consider any alternatives
at all and merely
stood above the matter until confronted by the company’.
[12]
39.
The complaint is that report’s
finding went beyond just a finding that Mr Louw had approved of the
sale but also of his ‘repeated
failure’ to exercise his
responsibilities as sales manager before the delivery of the stock
and not simply the finding. The
Commissioner was dealing with the
limited point that that part of the finding dealing with Mr Louw’s
approval of the sale
was incorrect. The other finding namely the
failure to take steps to regularise the matter is the subject of the
rest of the Commissioner’s
analysis on the merits. There is
accordingly no merit in this ground of review.
Mr
Louw’s management decision
40.
The
complaint is that the Commissioner selectively refers to the outcome
of the disciplinary proceedings in the chairperson’s
report
(and accordingly implicitly admits the report) but does not give
consideration to the report in its entirety, in particular
the
finding that Mr Louw stated he had made a management decision to get
the stock to the customer no matter where it came from.
But this
statement was specifically denied by Mr Louw at the hearing
[13]
and specifically recorded by the Commissioner in his award.
[14]
41.
A
similar criticism concerning the Commissioner’s approach to the
report of the disciplinary enquiry is to be found in the
Applicant’s
Heads of Argument
[15]
- a
criticism that the applicant characterizes as a gross irregularity.
While the Commissioner disallowed the chairperson’s
report of
the internal disciplinary hearing, the Commissioner is accused of
selectively quoting from the report in respect of the
chairperson’s
finding that Mr Louw was a party to the sale.
[16]
But the arbitrator deals with the issue of the admissibility of the
disciplinary proceedings his award.
[17]
He states that the chairperson of the proceedings recommended the
dismissal on the basis of the evidence reflected in the minutes.
These minutes were not accepted by Mr Louw as being an accurate
reflection of the evidence led at the hearing and the chairperson
was
not called to verify the minutes. He then goes on to say that there
are a number of significant differences between what is
reflected in
the minutes and Mr Louw’s testimony in the arbitration. In the
absence of other evidence, he accepted his evidence
as it was
tendered in the arbitration. The claim that he disallowed the
report and accordingly could not rely on the chairperson’s
finding is unfounded.
Mrs
Louw’s breach of the sale of business agreement
42.
The
claim is made that the Commissioner disavows a crucial aspect of the
case by holding that the issue is not whether Mrs Louw
acted in
breach of her agreement but whether Mr Louw’s conduct warranted
dismissal.
[18]
I am at a loss
to understand the point being made other than that Mr Louw should
have been more careful given the restraint and
his fiduciary duties.
The criticism is premised on the breach of the restraint in a context
in which Multilube itself approached
her to supply, then deliver and
then invoice the customer. It is also premised on Mr Louw’s
knowledge of what Mrs Louw was
doing both before 21 February and
thereafter. It is an unfounded criticism.
Mr
Bell’s alleged lack of credibility
43.
This criticism concerns the fact that Mr
Bell could not recall ‘snapping’ at Mr Louw on 20
February 2008 and that this
was recorded by the Commissioner as ‘once
again Mr Bell could not recall this happening’. Mr Bell takes
umbrage at
the insinuation that he was selective in his recall of
events and that his credibility was put in doubt.
44.
It is important to note that this was not
the first time that Mr Bell could not recall a conversation with Mr
Louw or its content.
Mr Bell initially denied that the issue of Mrs
Louw’s ownership of the stock was raised by Mr Louw on 11
February 2008. In
a subsequent email Mr Bell acknowledged that this
was brought to his attention by the Applicant around that time. There
was other
email evidence that suggested that Mr Bell had the
conversation to which Mr Louw testified.
45.
The Commissioner’s finding that Mr
Bell was not an impressive witness is not based solely on the fact
that Mr Bell initially
denied that Mr Louw had brought his wife’s
claim of ownership of stock to his attention but then admitted that
he had acknowledged
this in the email at later stage. It was also
based on other findings, which were not challenged.
46.
There is no reason to interfere with the
Commissioner’s finding that Mr Bell was not an impressive
witness.
Mr
Louw’s telephone conversation with Danita
47.
This ‘ground’ is an attack on
the Commissioner’s finding that he disregarded Mr Bell’s
evidence that he
overheard Mr Louw telling someone that ‘Danita
is sticking her nose in and sending emails’ in a telephone
conversation.
Mr Louw denied having said this. In the face of a
contested fact without surrounding evidence or corroboration in
support of one
version over the other, it is not unreasonable for the
Commissioner to conclude that this allegation was not proved.
Mrs
Louw’s role
48.
This
attack turns on the Commissioner’s finding that Mrs Louw was
entitled to believe that Ms Fisher was authorised to request
her to
invoice the customer directly.
[19]
The Applicant claims that Mrs Louw knew that Ms Fisher was in a
junior position and did not have the power to authorise her to
invoice the customer directly. This claim is based, despite Mrs
Louw’s denial, on the testimony of Mr Louw who testified
that
she knew of Ms Fisher’s junior position. But assuming that she
knew of Ms Fisher’s junior position, that assumption
does not
mean that she did not have authority to do so. Mr Bell claims that
she did not have such authority because he did not
give it and Mr
Louw denies giving it and accordingly Mrs Louw was not entitled to
assume that it was authorised. But that conclusion
is only valid if
Mrs Louw knew that the only two persons who had authority to
authorise Ms Fisher did not do so.
Mr
Shearon should have been called as a witness
49.
Mr
Bell contends that an adverse inference should have been drawn on Mr
Louw’s failure to call Mr Shearon. In his award, the
Commissioner submits as an aside that Mr Shearon did not testify
because of divided loyalties.
[20]
Given that his failure to testify was not raised by the Applicant at
the hearing, it can hardly be expected that the Commissioner
should
draw an adverse inference.
Bias
50.
There
are a number of findings that Mr Bell contends constitute bias on the
part of the Commissioner. The
first
finding
is that the Applicant’s decision to lay a disciplinary charge
against Mr Louw was ‘influenced by the somewhat confrontational
correspondence that passed between himself and Mr Louw and saw this
as an opportunity to rid himself of Mr Louw without having
to go
through the protracted process of performance counselling’.
[21]
Mr Bell regards this statement as an attack on him and therefore
evidence of the Commissioner’s support for Mr Louw and a
‘complete disregard’ for the Applicant’s
contentions.
51.
The Commissioner’s finding does not
indicate who is to blame for the confrontation – just that the
exchange was confrontational
and that influenced Mr Bell to press
charges against Mr Louw. That Mr Bell was the innocent interlocutor
in the exchange, as he
claims, only makes the Commissioner’s
point more cogent.
52.
The
second finding of alleged bias is the finding that ‘Mr Louw
would have been foolish indeed to become involved for a very
small
profit...’.
[22]
This
finding Mr Bell contends is another example of ‘gross
unreasonableness’ because ‘it entirely disregards
the real motive for his involvement – a desire to show me [Mr
Bell] up and embarrass me, giving vent and expression to his
hurt
feelings as a result of the performance consultations which had been
initiated by me as a result of his poor performance’.
But this
is one inference among several that may be drawn from the exchange of
correspondence and the evidence given by both Mr
Bell and Mr Louw.
The Commissioner comes to a different conclusion on the basis of that
evidence. The mere fact that there may
be a different conclusion
drawn from the evidence tendered does not on its own render the
Commissioner coming down on one side
as bias.
53.
The
third finding of alleged bias is the Commissioner’s finding
that Mr Bell was not an impressive witness.
[23]
The claim is made that this finding was mainly based on Mr Bell’s
refusing to meet with Mrs Louw to discuss why she had supplied,
delivered and invoiced the stock. That is not an entirely accurate
reflection of the Commissioner’s finding. His conclusion
was
also based on Mr Bell’s denial of the conversation on 11
February, which was later recanted in face of a fax acknowledging
that he had discussed the issue with Mr Louw around that time.
54.
Mr
Bell seeks to justify his refusal to meet with Mrs Louw on the
grounds that the complaint was against Mr Louw and not Mrs Louw
–
a stance that appears to stand in contradiction to other stances
taken by the Applicant concerning Mrs Louw’s role
in the
events. A further justification advanced in the affidavit is that it
was inappropriate to speak to Mrs Louw for two reasons:
she was not
an employee and he had strained relations with her arising from
financial claims she had made. Those justifications
were not raised
when she was pertinently asked why he refused to meet her. Mr Bell’s
response was that the reason for not
meeting her was that he ‘was
still ‘in the process of discovery and I wanted to get our
facts together before meeting
Tania [Mrs Louw]’.
[24]
No other justification is offered on the record when the issue of the
refusal to meet is raised.
[25]
Monetary
value of the transaction
55.
The Commissioner is criticised for finding
that the value of the transaction (R3904.93) and any profit arising
from it was small.
Mr Bell claims that no factual basis was laid for
such a finding. It is not unreasonable for the Commissioner to take
judicial
notice of the fact that even if the whole sum was profit,
that the profit was small and, accordingly no inducement for Mr Louw
to breach his fiduciary duty towards the Applicant.
Quantum
56.
The claim is that the sum of compensation
is unreasonable because it does not take into account that he had
only worked for the
Applicant for 8 months and that it did not take
into account any monies earned in Dubai.
57.
It is evident from the award that his
assessment of quantum was based on the fact that he was unemployed
for four months and that
because of the restraint of trade agreement
was forced to work overseas causing him considerable financial
hardship and emotional
hardship due to an enforced separation from
his family. The evidence on which this was based was not contested.
This ground is
unfounded.
Remaining
grounds of review
58.
A
number of attacks levelled at the Commissioner’s award are
repetitions of what is contained in the founding affidavit. Many
of
them are dealt with in the course of the analysis of the grounds
raised in the Applicant’s Founding Affidavit and its
Heads of
Argument. These concern Mr Louw’s knowledge of the
delivery
[26]
, Mr Louw’s
failure to sort things out
[27]
,
Mr Louw’s knowledge of the invoice
[28]
,
Mr Louw’s knowledge of the transaction prior to 21 February
2008
[29]
, Mr Louw’s
improbable explanation for failing to take action
[30]
,
Mr Louw’s alleged lack of knowledge of the transaction
[31]
,
Mr Louw’s conduct between 22-29 February
[32]
and the Clear breach of fiduciary duty
[33]
.
Applicant’s
Heads of Argument
59.
In
the Applicant’s heads of argument the specific grounds of
review are detailed at great length.
[34]
Those that have been traversed above are not dealt with.
Elements
of the misconduct proved
60.
The Applicant contends that there were five
elements to the misconduct and that all of them on Mr Louw’s
evidence alone were
proved. The elements are:
60.1.
Was Mr Louw aware that his wife had sold
products ordered from Multilube to All Bearings?
60.2.
Was his wife’s conduct wrongful?
60.3.
If the answer to both the questions was
yes, did Mr Louw as an executive employee of the company and the head
of its sales division
have a fiduciary duty to inform the company of
this?
60.4.
If yes, did Mr Louw fail to inform the
company of this?
60.5.
If
yes, was dismissal an appropriate penalty for such conduct, The
Applicant then contends that there was compelling evidence before
the
Commissioner based solely on Mr Louw’s testimony to prove that
he was aware of the transaction between his wife and the
customer and
that he undertook to sort out the regular transaction and that for a
period of eight days did nothing to resolve the
matter.
[35]
61.
There is one element that is significantly
not included in this list, namely
the
reason for the failure
to inform the
company or take steps to regularise the transaction, which is, of
course, the basis on which the arbitrator finally
decides the issue.
62.
Was he aware
?
The Commissioner finds that Mr Louw only became aware of his wife
having supplied the product on 21 February 2008. He finds
that
Mr Louw only became aware that his wife had invoiced the customer on
the 29 February 2008 when he was confronted with the
invoice by Mr
Bell. His finding is that at no stage did Mr Louw know that Mrs Louw
had sold the stock. That finding is based on
the evidence of Mr and
Mrs Louw and the fact that there was no evidence to contradict it.
But what Mr Louw was aware of was that
the supply and delivery of the
stock by his wife needed to be regularised on 21 February 2010.
63.
Was
her conduct unlawful
?
The evidence was that it was employees of the Applicant who requested
Mr Louw’s wife to supply, and then deliver the stock
to the
customer and finally to invoice the customer directly. Although this
question is not dealt with directly in the award, the
Commissioner’s
view is evident when he finds that Mr Louw’s wife was entitled
to believe that the Applicant had approved
the invoicing of the
customer.
[36]
It is a
reasonable conclusion to draw from the evidence presented to him.
64.
Did
Mr Louw have a fiduciary duty
?
The arbitrator accepted that Mr Louw, as a senior employee, had a
fiduciary duty towards the Applicant not to act against its
interests
[37]
. Given
that the fiduciary duty can only be triggered by the awareness of a
conflict of interests, the Commissioner finds
that the fiduciary duty
to regularise the transactions arose only on 21 February when he
learnt of his wife’s supply and
delivery of the product to the
customer. Given that the Commissioner found that he was not aware of
the fact that his wife had
been requested to invoice the customer
directly and had indeed done so, no fiduciary duty arose in respect
of the invoicing until
he learnt of it.
65.
Did Mr Louw inform the company
?
There was no dispute that Mr Louw did not raise that his wife’s
delivery of the product to the customer between 21
and 29 February
nor took steps to regularise the transaction once he learnt of her
role on 21 February.
66.
Did Mr Louw have a good reason for not
informing the company or take steps to regularise the transaction
?
The critical finding in the judgment is set out in para 114 in which
the Commissioner takes account of the evidence before him
– the
respective absences of Messrs Bell and Louw, the lack of urgency and
Mr Louw’s statement that he intended to
raise the issue and
regularise the transaction but wanted to do so person to person.
These findings are based on evidence on record
and are reasonable
conclusions to draw from that evidence.
67.
Whether dismissal was an inappropriate
penalty
? Given his findings that Mr
Louw was not aware of his wife’s involvement prior to 21
February, that he had a reasonable explanation
for not regularising
the transaction immediately and that he did not know that his wife
had invoiced the customer directly until
he met with Mr Bell on 29
February, the Commissioner concluded that the dismissal was in these
circumstances substantively unfair
– a reasonable conclusion
based on his findings.
Material
factors ignored
68.
The
Applicant claims that the ’Commissioner
entirely
ignored
Mr Louw’s admitted failure to take any action after he became
aware of the fact that his wife had sent the goods to
All Bearings’.
But the Commissioner did not ignore the failure to take action, he
considered it and accepted Mr Louw’s
explanation that it was
not urgent, that he intended to do so but did not have the
opportunity to do so face to face until 29 February
2008. Far from
‘entirely ignoring’ the failure, he considered it in para
114 of his award.
[38]
Gross
error of law
69.
The Applicant claims that the Commissioner
committed a gross error of law when he stated that there was no sale
of the product because
no charge had ultimately been levied.
This statement is made in a particular context. Firstly Mr Louw
had been dismissed
as a result of one of the findings made by the
chairman of the disciplinary hearing namely that he was party to the
sale of the
stock to All Bearings. The relevant portion of his
analysis reads:
‘
The
findings of the Chairman of the disciplinary hearing seem to be that
he was indeed party to the sale, the findings state: “Mr.
Louw
took no action at all in this matter, except to finally approve the
sale of the stock to Allbearings by a competitor company,
on the
grounds that this would keep the customer happy”. This finding
would appear to be factually incorrect; certainly there
was no
evidence before me that Multisol took any part in approving that
“sale” (which was ultimately not a sale as
no charge was
levied on the customer)’.
70.
Firstly,
the statement concerning the status of the sale has no bearing on the
thrust of his finding that Mr Louw was not a party
to the sale.
There was no evidence before him that the Applicant took any part in
approving the sale. Moreover Mr Bell
himself conceded that Mr
Louw was not party to the sale. The status of the transaction
did not affect the cogency of his
finding that on this ground; Mr
Louw was not guilty of this particular misconduct. It is a
distortion of the Commissioner’s
reasoning to accuse him of
concluding that because there was no sale there was no
misconduct.
[39]
Bias
and misconstruing a material ground
71.
The Applicant also claims that the
Commissioner’s findings that there was no sale is ‘one of
many examples’ of
the Commissioner assisting Mr Louw by
providing him with ‘exculpatory grounds’. Again, in
context, the Commissioner’s
view of the status of the
transaction does not affect the substance of his finding that the Mr
Louw was not party to the transaction
whatever its status might have
been. It has no exculpatory effect.
72.
The
Commissioner is then accused of misconstruing a materially irrelevant
factor and failing to infer from Mr Louw’s wife
subsequently
deciding not to collect the money due to her as proof of knowledge
that the transaction was in breach of her restraint.
The
arbitrator does not misconstrue a materially relevant factor. It does
not appear to play any role in his assessment of her
actions.
What appears to influence him is the trivial nature of the amount at
stake and that she received instructions from
the Applicant’s
employees to supply, deliver and then invoice the products.
[40]
Ignoring
materially relevant evidence
73.
In
paragraphs 41 through to 55 of its Heads of Argument the Applicant
lists an extensive series of inferences that the Commissioner
should
have drawn in respect of what transpired between Mr Louw and his wife
on 21 February 2008 and the inference to be drawn
from the fact that
Mr Louw’s wife generated the invoice. But the Commissioner
considered the personal nature of the relationship
and declined to
make the inference that the Applicant presses for. Instead he relied
on the uncontested evidence that employees
of the Applicant
instructed Mr Louw’s wife to invoice the customer directly.
Although the Applicant seeks to play this
down by referring to it as
an “implausible suggestion”, the email from Ms Fisher
requests her to do so
[41]
.
74.
Issue is also made that Mr Louw’s
wife said that the goods were of no use to her. The Applicant seeks
to imply from this that
either R3904.93 to be earned from the
transaction had some benefit for her or that she wished to show the
Applicant up and embarrass
Mr Bell to punish him for the performance
enquiry he had launched against Mr Louw. But these are inferences
that may be drawn but
they do not constitute grounds to review a
Commissioner who declines to draw them.
Ignoring
the evidence of Mr Bell in favour of the improbable and inconsistent
evidence of Mr Louw
75.
The
first inconsistency
[42]
claimed is that Mr Louw stated that Mr Shearon had asked him who the
stock belonged to on 11 February 2008 and that he had informed
him
that the stock belonged to his wife’s company. This the
Applicant considers ’peculiar’ because Mrs Louw testified
that Shearon (her father) had called her on 6 February 2008 in
Switzerland and that she had told him that the stock belonged to
her.
It may amount to an inconsistency but hardly one amounting to a gross
irregularity. It is also worth noting that this inconsistency
was
never put to Mr Louw at the hearing.
76.
The next inconsistency claimed is that Mrs
Louw had told Mr Shearon that he was welcome to uplift the stock and
by that she meant
that he could sell it on behalf of Multilube.
Mr Louw testified that when he raised the issue of the stock with Mr
Bell on
11 February he had been told by Mr Bell that he (Mr Bell) was
moving the stock and sorting it out. In the light of this, the
Applicant ‘wonders’ why Mr Louw permitted his wife to
take part in the transaction. There is no inconsistency given
the
Commissioner’s finding that Mr Louw was not aware of his wife’s
involvement until 21 February 2008. Having learnt
of the supply and
delivery of the product then, he had told his wife that he would sort
it out. He only learnt of his wife’s
invoicing of the
product when he was confronted with it on 29 February 2008.
77.
The next inconsistency claimed is Mr Louw’s
failure to respond to an e-mail from Danita Cronje in which she
raises the fact
that his wife is releasing the stock. Given his own
evidence that Mr Bell had told him that he, Mr Bell, was attending to
it, the
Applicant claims that this failure to advise her of that fact
is an inconsistency. There is little substance to this. It is
consistent
with Mr Louw’s version of the facts (which the
Commissioner accepts) – having learnt of his wife’s
involvement
in the email, he raised it with her first and having done
so, decided to sort it out with Mr Bell, the managing director,
rather
than with Ms Cronje, a junior employee.
78.
The
next claimed inconsistency is that Mr Louw explained that when he
told his wife that he would ‘sort it out’ he wanted
to
ensure that the invoice went to the correct destination. This, the
Applicant says is ‘strange’ given that Mr Louw
had been
told that Mr Bell was sorting the matter out.
[43]
This is not an inconsistency. Mr Bell was ‘sorting out’
the clearance of the stock for supply to the customer. Mr Louw
was
‘sorting out’ his wife’s involvement in the supply
and delivery of the product. They were different species
of ‘sorting
out’.
79.
The next inconsistency claimed is that it
is ‘strange in the extreme’ that Mr Louw was only made
aware of the e-mail
allegedly instructing his wife to invoice the
goods after the disciplinary hearing on 10 March 2008. I do not know
what the import
of this criticism is. It may be strange but other
than an attack on the authenticity of the emails, it does not affect
the cogency
of the arbitrator’s reasoning. This too was never
put to Mr or Mrs Louw.
Inconsistencies
regarding the failure to report the irregularity
80.
In
a rambling and repetitive account of the evidence relating to the
period between 21 February to 29 February 2008, the Applicant
criticizes Mr Louw’s evidence in a number of respects, none of
which constitute grounds for review.
[44]
81.
The criticisms all centre on Mr Louw’s
failure to respond to Ms Cronje’s email or to take steps to
regularise the transaction
with Mr Bell during the that period. But
the Commissioner specifically addressed this. His reasoning was
based on evidence
before him to the effect that Mr Louw intended to
regularise the transaction but wanted to do so face to face with Mr
Bell and
that one or other of them was absent from the office during
that period – all reasonable conclusions to draw from the
evidence
before him.
82.
It is also important to note that although
the Applicant claims that Mr Bell ‘was kept in the dark’,
the email from
Ms Cronje was also emailed to Mr Bell on the 21
February.
83.
The
Commissioner is criticized for ‘ignoring’ Mr Louw’s
testimony in response to a question as to why he did not
inform Mr
Bell of the situation after receiving the e-mail from Ms Cronje. That
testimony is to the effect that he had bigger things
on his mind,
that he did not have to explain anything to him, and that he assumed
that Mr Bell knew of the situation.
[45]
This, the Applicant claims, would have justified a finding by the
Commissioner that the relationship between Mr Bell and the third
respondent had broken down irretrievably and that Mr Bell had good
cause not to trust him. Since the charge was the failure to
raise the
issue of his wife’s involvement in the transaction, it is hard
to understand why it was necessary for the Commissioner
to make such
a finding – the third respondent was not seeking reinstatement.
84.
The Commissioner is criticized for failing
to make a finding that Mr Louw was not an impressive witness because
of his response
‘I suppose so’ to a proposition put to
him that all he needed to do to resolve the matter was to inform Ms
Cronje or
Mr Bell what he had found out from his wife. Quite why that
should constitute grounds for attacking his credibility is hard to
fathom. It is consistent with his testimony to the effect that he
considered the transaction to be irregular and that he intended
to
regularise it in a face to face meeting with Mr Bell.
85.
The Commissioner is criticized for failing
to apply his mind to the matter before him because, in the face of
‘undisputed
facts’, he considers Mr Louw’s conduct
as acceptable. The so-called ‘undisputed facts’ are
described as
follows:
85.1.
he knew on 21 February that his wife’s
company had sent stock ordered from Multilube to the customer;
85.2.
he was aware that the transaction was
irregular and needed to be dealt with;
85.3.
he was told by Mr Bell on 11 February and
on 20 February that Mr Bell was dealing with the problem of the
stock;
85.4.
he was aware that Ms Cronje was waiting for
an answer;
85.5.
he had told his wife not do anything as he
would deal with the matter, and particularly the issue of invoicing,
but she went ahead
and invoiced anyway.
85.6.
he took no steps to deal with the matter
until confronted with the fact of the invoice from his wife.
86.
Firstly, it is not correct to state that Mr
Louw told his wife not to invoice on 21 February. His testimony was
that he told her
to ‘leave it there’ and that he would
‘sort it out’. When pressed as to what he meant by
sorting it out,
he said ‘dealing with the invoicing problem’.
He never explicitly said that she should not invoice and it is
disingenuous
to then suggest that Mr Louw’s wife went ahead and
invoiced anyway.
87.
Secondly, these so called undisputed facts
fail to take into account the following: that it was employees of the
Applicant that
asked Mrs Louw to supply and then deliver the products
and then to invoice the customer; and that the arbitrator accepted
the reasons
advanced by Mr Louw for not taking the steps to deal with
the matter over the eight days, namely their respective absences; his
desire to meet face to face; and the lack of urgency given that the
product was being delivered. Taking these facts into account,
it
cannot be said that the Commissioner failed to apply his mind to the
matter before him.
88.
The Applicant then criticizes the
plausibility of Mr Louw’s reasons for failing to take steps to
regularise the matter with
Mr Bell and in the process the
Commissioner’s acceptance of those reasons. The Commissioner
accepted Mr Louw’s statement
that he had intended to raise the
matter on 22 February 2008 and, given Mr Bell’s absence that
day and his absence thereafter,
when next they met. He accepted that
Mr Louw’s belief that the meeting should be face to face. He
accepted that the matter
was not that urgent given that the product
had been delivered (and that he was unaware that his wife had
invoiced the customer
directly). It cannot be said that his
acceptance of these reasons as plausible explanations based on the
circumstances surrounding
the transaction and the evidence led that
his acceptance of these reasons was ‘totally unreasonable’.
89.
Much is made of the Commissioner’s
conclusion in para 124 of the award, namely:
‘
To
sum up, I am satisfied that the applicant [Mr Louw] was not guilty of
the charge against him (even as orally amended by
Mr Bell
during the arbitration hearing) of being aware that his wife was
selling/had sold competing products to a customer of the
respondents
and of failing to alert the respondents to this.’
90.
The Commissioner is criticized for being
‘totally unreasonable’ in coming to this conclusion
because Mr Louw knew from
21 February that his wife was ‘selling’
the product. But that is not correct. The evidence was that Mr Louw
only learnt
of the supply and delivery of the product by his wife on
21 February. At that stage she had supplied and taken steps to
deliver
the product but had not invoiced it. The email from Ms
Cronje does not speak of a sale but only that Mr Louw’s wife
informed her that the ‘Petro-Canada Stocks will be released
today’.
91.
Neither the testimony of Mr Louw nor his
wife suggest that at the stage they discussed it for the first time
on 21 February that
the supply and delivery of the product
constituted a sale at the hands of Mr Louw’s wife. Indeed her
evidence is to the contrary
namely that she did not send an invoice
together with the product, as she would normally have done. Since Mr
Louw did not know
of the instruction from Ms Fisher to invoice
directly or that his wife subsequently invoiced the customer in
accordance with that
instruction, it cannot be said that Mr Louw knew
of the sale until he was confronted with the invoice on 29 February.
92.
The Commissioner is then criticized for his
conclusion that Mr Louw ‘was not aware of a situation that
would have represented
a conflict of interest… he therefore
had no fiduciary duty to disclose anything further to the
respondent’. The applicant
contends that because Mr Louw
regarded the transaction as irregular, it was improbable that he
would not have been aware of a serious
potential conflict of interest
given that the goods were ordered from Multilube, that Mr Bell was
sourcing them and that his wife
was restrained from competing with
Multilube. But again, once the supply and the delivery was taking
place, the only issue was
to regularize the transactions, which
included the appropriate invoicing of the transaction. Without
knowledge of the email from
Ms Fisher instructing his wife to invoice
directly and his wife’s subsequent invoice, the Commissioner’s
assessment
of Mr Louw’s knowledge at the time is based on the
evidence before him and constitutes a reasonable conclusion to be
drawn
from the conspectus of the facts.
93.
The
Commissioner is then criticized for describing Mr Louw’s
fiduciary duty in the circumstances of the case namely, that
by
virtue of his position he ‘would have a duty to ensure that
proper procedures were followed in regularizing the transaction,
it
was his intention to do so but he had insufficient opportunity to do
so before being confronted by Mr Bell’
[46]
.
This is attacked on the ground that, given the near instant nature of
modern communications, Mr Louw did not inform Mr Bell of
the
transaction and the steps he proposed taking. Again, the answer to
this criticism is Mr Louw’s evidence that he considered
it best
to do so face to face. The Commissioner’s acceptance of that
evidence is a legitimate conclusion to draw from the
facts before him
taking into account what Mr Louw knew at the time.
94.
The Commissioner is accused of bias because
he argues that ‘while it may be so that Louw was in a fiduciary
relationship with
the respondent, there is no evidence that applicant
acted against the interests of the respondents in any way’.
The
applicant contends that the opening clause ‘
While
it may be so
…’ is an
example of the arbitrator’s bias because of its tentative
nature. In context, the statement is in response
to the Applicant’s
contention that Mr Louw was in a fiduciary relationship and had a
duty to protect the interests of the
Applicant. The thrust of the
arbitrator’s statement is that although there may be a
fiduciary relationship, there was no
evidence of a conflict of
interest. This is not evidence of bias but it is the proverbial
scraping the bottom of the review barrel.
Disregarding
the probabilities
95.
The Applicant then criticizes the
Commissioner for failing ‘to critically analyse the evidence of
[Mr Louw]
in any manner
– there was no testing of the evidence of [Mr Louw] against the
probabilities, nor was his credibility considered, there
was no
weighing up of Louw’s evidence against that of the applicant in
any manner’
(the
emphasis is mine). Despite claiming that the Commissioner failed to
critically analyse Mr Louw’s evidence in any manner,
only an
example is given of this failure.
96.
Mr Louw testified that he only became aware
of the issue concerning the stock on 11 February. He had however
received a telephone
call from his father-in-law on 6 February.
When he saw who the caller was, he passed the phone to his wife and
went skiing
with a friend. He testified that his daughter had
complained that he spent too much time on holiday dealing with
business and he
had agreed with her that he would not do so on this
trip.
97.
The Applicant analyses this testimony by
questioning why he had a cell phone at all on holiday or why he had
it on international
roaming or if he needed it for emergencies on the
slopes, why it was not switched off. The questions only have to
be asked
in order to demonstrate that the obvious answers do not
affect the probabilities of his promise to his daughter one jot. Cell
phones
are not only used for business. There are many non-business
reasons why someone may have his phone on and on roaming. In any
event,
even if he did promise his daughter not work on holiday, given
his position to completely cut himself off from the Applicant would
be problematic. Not any of these questions were put to Mr Louw at the
hearing.
98.
The Applicant then proceeds to question why
Mr Louw passes the phone on to his wife without enquiring what the
call was about? Again,
is it that improbable that once he sees or
hears that it is his father in law who is on the phone, he passes it
on to his wife?
The call may well have been personal. Again there
seems to be no need to assess the probabilities unless called upon to
do so.
99.
The next set of questions in paragraph
137.3 of the Applicant’s Heads assume that Mr Louw is aware of
the content of the telephone
call and accordingly not part of a
probability assessment as to his passing the phone call onto his
wife.
100.
The Applicant states that this analysis is
but one example of Mr Louw’s evidence, which, if such an
analysis had been
done by the Commissioner, would have cast serious
doubt on the truth of his testimony and on his credibility. Firstly,
the Applicant
relies on this example only. Secondly, there is nothing
on the face of Mr Louw’s testimony that would require an
interrogation
of this nature. These questions were not put to Mr
Louw. Thirdly, the analysis conducted by the applicant does not lead
to any
doubt on the truth of Mr Louw’s testimony or on his
credibility.
Gross
error of law
101.
The Applicant claims that the Commissioner
made a gross error of law in his finding that there was no evidence
that Mr Louw ‘took
any part in approving the ‘sale’
(which was ultimately no sale as no charge was levied)’. I have
dealt with this
ground of review already. Suffice to say that if it
was an error it was one without any consequence for the arbitrator’s
principal findings.
Material
evidence disregarded
102.
Various allegations of disregarded pieces
of evidence are recorded in the Applicant’s Heads of Argument
but without any comment
as to their effect on the reasoning and
sometimes without any reference making it particularly difficult to
locate in the transcript
or record. I am unable to understand the
statement made in para 139.7 of the Heads of Argument and how it
impacts on the Commissioner’s
reasoning. In para 139.8 the
statement is made that the Commissioner’s statement on a number
of occasions that Mr Bell was
‘unable to dispute’ certain
evidence put forward by Mr Louw suggested that this inability
supported his finding that
Mr Bell was an unimpressive witness. Quite
what this has to do with the disregarding of material evidence is
difficult to comprehend.
But even on its own terms it is just not
logical. The inability to contest evidence is more often than not a
matter of credibility
but of a lack of evidence to the contrary.
103.
In
para 29 of the Award the Commissioner summarizes Mr Bell’s
testimony to the effect that he stated that he could not dispute
that
Mr Louw wanted to inform him of the delivery at the sales meeting on
22 February 2008. This, the Applicant claims is
not supported
by Mr Bell’s testimony in which Mr Bell, when asked whether he
could dispute Mr Louw’s intentions to
raise the issue on the
22
nd
,
he replied that Mr Louw had a full week to bring it to his attention
and he had made no effort to do so and accordingly in his
view this
did not indicate a proactive stance on the part of Mr Louw
[47]
.
Although he does not state it, it is clear that he can only contest
Mr Louw’s intention by implication from his failure
to raise
the issue after 22 February 2008 – an implication, which the
Commissioner rejects in favour of Mr Louw’s explanation.
104.
In
paragraph 31 of his award, the Commissioner records that Mr Bell
‘could not dispute’ that Mr Shearon had telephoned
Mr
Louw on 20 February ‘to find out what was happening with the
stock’ and that the third respondent had spoken to
Bell about
this. The summary goes on to state that Mr Bell said that he did not
recall the conversation or his conduct at the time
(Mr Louw testified
that Mr Bell had snapped at Mr Louw and went red in the face, stating
that whereabouts of the stock was not
Mr Louw’s concern). The
Applicant claims that Mr Bell did dispute the conversation between
him and Mr Louw on 20 February
and that his statement that he did not
recall the conversation or his conduct at the time was ‘simply
Mr Bell’s understated
way of disagreeing’
[48]
with
what was put to him. In the final analysis, if one does not recall
something, one cannot contest it and there is just no basis
for the
gloss that the Applicant seeks to place on Mr Bell’s words or
that that the failure to place such a gloss constitutes
a ground of
review.
Contradictions
in third respondent’s evidence
105.
In his testimony, Mr Louw confirmed that he
had said ‘Get the stock to All Bearings no matter where it came
from’ in
the disciplinary hearing. In the chairperson’s
disciplinary report this statement was in the context of his having
made a
management decision to get stock no matter where it came from
to keep the customer happy. Under cross-examination Mr Louw explained
that the reference to the management decision was in relation to whom
the stock belonged to rather than getting the stock to the
customer.
This explanation was made within the context of his disputing the
veracity of the chairperson’s minutes of the
hearing, which
were never proved. It follows that in these circumstances, the
Commissioner was quite correct in his finding that
in the absence of
proof of what was said in the disciplinary hearing, Mr Louw’s
version must stand.
Conclusion
106.
It follows from this analysis of the
Applicant’s grounds of review that they are unfounded. The
application is accordingly
dismissed with costs, including the costs
of counsel.
_______________
CHEADLE
AJ
Date
of Hearing : 17 March 2010
Date
of Judgment : 30 November 2010
Appearances
For
the Applicant : Adv R Stelzner
Instructed
by : David Woolfrey Attorneys
For
the Respondent : Adv G Elliott
Instructed
by : Maserumule Inc
[1]
B190.
[2]
B207
[3]
A10
para 20
[4]
A10
at paras 20 and 21
[5]
A24
[6]
A19
para 52
[7]
A19
paras 54-5; and A79-80 paras 35-37.
[8]
A19
para 57
[9]
A21
para 65
[10]
A19
paras 52, 56
[11]
A76-77
paras 22-29.
[12]
B207.
[13]
C382-386.
[14]
A44
at para 117 of the Commissioner’s award.
[15]
Applicant’s
Heads of Argument at para 139.1 to 139.4
[16]
At
para 107 at B41.
[17]
A44
at para 117.
[18]
A
41 at para 108.
[19]
A43
para 115.
[20]
A43
at para 115.
[21]
A44
at para 117.
[22]
A44
at para 18.
[23]
A118
at paras 208-215.
[24]
C117
lines 11-13.
[25]
C139
and 151.
[26]
A81-2
paras 42-49.
[27]
A83-4
paras 50 – 59.
[28]
A85-6
paras 60 – 69.
[29]
A91-93
paras 85 – 97.
[30]
A95-97
paras 107 – 113.
[31]
A98-100
paras 114 – 120.
[32]
A100-105
paras 121 – 141.
[33]
A121
para 221 – 241.
[34]
Applicant’s
heads of argument paras 25-155.
[35]
Applicant’s
heads of argument paras 25-32.
[36]
B43
para 155
[37]
B35
para 120
[38]
B33.
[39]
The
Applicant’s heads of argument para 36.
[40]
B35
(para 120 in the award)
[41]
B274.
[42]
Multisol’s
heads of argument para 56.
[43]
Applicant’s
Heads of Argument at para 76.
[44]
Applicant’s
Heads of Argument at paras 85 to 135.
[45]
Transcript
C369 at lines 1-2
[46]
B46
at para 124.
[47]
Transcript
C147 at line 14.
[48]
Applicant’s
Heads of Argument para139.14.