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[2011] ZALCCT 3
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Silplat (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (C 206/2006) [2011] ZALCCT 3; [2011] 8 BLLR 798 (LC) (21 January 2011)
Reportable
Of interest to other judges
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
CASE
NO: C 206 / 2006
In the matter between:
SILPLAT
(PTY) LTD
…...................................................................
APPLICANT
and
CCMA
….........................................................................
FIRST
RESPONDENT
Mr
VUYISA MAZWI N.O.
…...............................................
Second
respondent
STEPHEN
MARINE
…...........................................................
Third
respondent
judgment
STEENKAMP J:
Introduction
This review application came before me more than five and a half
years after the dismissal of the third respondent, Mr Stephen
Marine
(“the employee”). The main reason for this extraordinary
delay is wrong legal advice, gross negligence, incompetence
and
extreme dilatoriness by the applicant’s erstwhile attorneys.
The applicant, Silplat (Pty) Ltd (“the company”), seeks
to review a rescission ruling made by the second respondent,
Mr
Vuyisa Mazwi (“the arbitrator”) under the auspices of
the first respondent, the CCMA, on 2 March 2006.
In the alternative, the applicant seeks to review the award of the
arbitrator on 3 December 2005. The arbitrator found the employee’s
dismissal to be substantively and procedurally unfair and ordered
the employer to pay him the maximum allowable compensation
equivalent to 12 months’ remuneration, which amounted to R1
080 000 (ie R1,08 million). The review application with regard
to
this award is itself out of time and the applicant seeks condonation
for its late delivery. The applicant only seeks to review
the ruling
on procedural unfairness.
In the further alternative, the applicant seeks an order reviewing
the amount of compensation and replacing it with “an
award of
compensation deemed appropriate by the above Honourable Court”.
In order to deal with the application for condonation, it is
necessary to set out the tortuous and unfortunate history of the
matter.
the background
The employee was the managing director of the company’s Gold
division. The company dismissed the employee in June 2005.
He
referred an unfair dismissal dispute to the CCMA.
At the arbitration on 17 October 2005, the employee, represented by
Mr Wayne Field of Bernadt Vukic Potash & Getz, applied
for legal
representation.
1
The company’s attorney, Mr Deon Visagie of Mallinicks
2
,
opposed the application. The arbitrator granted the application for
legal representation after taking into account the complexity
of the
matter, involving “the interplay of Company Law and Labour
Law”. He took into account that the employee was
the managing
director of the company’s Gold division and that he was “voted
out of work” by a resolution in
a board meeting.
Shortly after this ruling granting legal representation, the CCMA
served a notice of set-down on the parties’ attorneys,
informing them that the arbitration would proceed on 23 November
2005. The company’s then attorneys, Mallinicks, applied
to
review the ruling on legal representation.
According to Smit, Mr Visagie wrongly advised the company that the
application for review would stay the arbitration proceedings.
How
an experienced labour law practitioner could have rendered this
advice, is inexplicable. There is no confirmatory affidavit
by
Visagie. On 17 November 2005, Visagie wrote to the CCMA. Smit says
that “it is clear from the above letter that Mallinicks
bona
fide
believed that the filing of the review application would
stay the arbitration proceedings. But the letter states that “...the
writer [
sic
] has indicated to you that the arbitration is to
proceed on 23 November 2005” and seeks confirmation of the
in
limine
ruling on legal representation for the purposes of filing
the review application.
Be that as it may, the CCMA responded on 21 November 2005. It
confirmed the
in limine
ruling and stated:
“
Commissioner
Mazwi has further confirmed that he advised the parties that he would
provide full reasons for his ruling in his final
award. To this end
the Commissioner proposes that your client should stay review
proceedings in the Labour Court pending the completion
of the case
and the issuing of the award.”
Despite this clear indication from the CCMA, neither the company nor
its attorneys attended the arbitration two days later, on
23
November 2005. Mallinicks filed the review application the previous
day, on 22 November 2005. Smit says that Mallinicks “...held
the
bona fide
belief that the filing of the review
application would stay the arbitration proceedings”. He says
that the company “relied
on this advice” and did not
attend the arbitration. He does not attach a confirmatory affidavit
by Visagie or any other
Mallinicks attorney and no-one explains how
the attorneys could have held such a belief, which is clearly wrong
in law.
The arbitration continued in the company’s absence, as both
the company and its attorneys had been properly notified of
the
arbitration date. The arbitrator found the employee’s
dismissal to have been substantively and procedurally unfair
and
ordered the company to pay him the equivalent of 12 months’
remuneration as compensation. He justified the granting
of maximum
compensation as follows:
“
The
applicant requested maximum compensation and I believe that there are
reasonable grounds why such an award should be made. The
applicant is
still unemployed and has been unsuccessfully looking for employment.
The applicant also testified that he is a man
of specialised skill
and in view of the provisions of the restraint of trade he finds it
hard to secure alternative employment.
The operation of the restraint
has been triggered by the applicant’s unfair dismissal and to
that extent the respondent must
shoulder the blame. The applicant
also claimed that he has been severely prejudiced by the loss of
income."
On 20 December 2005, the company launched an application to rescind
the arbitration award in terms of section 144(a) of the Labour
Relations Act. The arbitrator heard the rescission application on 9
February 2006. On 2 March 2006 he dismissed the application
for
rescission with costs.
The company now seeks to review the rescission ruling;
alternatively, the arbitration award and the amount of compensation
awarded to the employee.
condonation
The company filed this application for review on 31 March 2006.
Insofar as it seeks to review the arbitration award of 3 December
2005, the review application is about 2 ½ months out of time.
It seeks condonation for the late filing of the review application.
But the delay does not end there. Having delivered the application
for review, the company did not file the record within the
requisite
time period, nor did it file the notice in terms of rule 7A(8),
indicating that it was standing by the relief sought
in its original
notice of motion or that it wished to amend it. Eventually, on 19
November 2008, the employee brought an application
to this court for
an order directing the company to deliver a complete record of
proceedings, together with an accompanying supplementary
affidavit
and/or amendment of its notice of motion.
Instead of immediately taking steps to file the record and the
relevant rule 7A(8) notice, the company filed a notice of intention
to oppose the relief sought by the employee. However, when the time
came for it to file an opposing affidavit, it did not do
so.
In accordance with a directive of the registrar of this court, the
employee’s attorneys filed their heads of argument on
13
February 2009. The matter was set down for hearing on 26 May 2009.
In default of the court's directive, the company’s
attorneys
did not file any heads of argument. Neither the company nor its
attorneys appeared at the hearing of the matter on
26 May 2009.
Basson J made an order directing the company to file a complete
record and any relevant amendments to its notice
of motion, together
with a supplementary affidavit and the relevant rule 7A (8) notices,
within five days.
The company failed to comply with that order of this court. The
company or its attorneys did not communicate with the employee’s
attorneys until it was threatened with execution of the award.
Eventually, on 26 June 2009 – one month after the order of
Basson J and more than
three years
after it had launched the
review application -- the company delivered what purported to be a
record of the arbitration proceedings.
At this stage, the company
had terminated the mandate of Mallinicks and was now represented by
Biccari Bollo Mariano Inc. (“BBM”)
3
.
Sadly, it would be no more competently represented than before.
Instead, it appears to have jumped from the frying pan of one
set of
incompetent attorneys into the fire of another. By the company’s
own admission, the conduct of Mr Claudio Bollo,
who is not only a
director of BBM, but also a director and the company secretary of
the applicant company, equates to gross negligence
surpassing even
that of its previous attorneys.
At the hearing of this matter on 11 November 2010, the company had
made no attempt to explain its failure to comply with the
order that
this court issued on 26 May 2009, and no application for condonation
in this regard had been filed. The company was,
by now, represented
by its third set of attorneys.
At the hearing on 11 November 2010, I directed the company to file
an affidavit by 25 November 2010 in support of an application
for
condonation for the late filing of the record of proceedings before
the CCMA as well as the late filing of the notice in
terms of rule
7A (8). I directed the employee to file his answering affidavit by 2
December 2010. The company had to file its
replying affidavit by 9
December 2010. The parties complied with these time periods.
4
I will deal with the condonation of, firstly, the late filing of the
review application; and secondly, the late filing of the
rule 7A(8)
notice, at the hand of the affidavits filed of record and the
well-known principles set out in
Melane v Santam Insurance Co
Ltd.
5
Degree of lateness
The review application in respect of the arbitration award of 3
December 2005 was filed on 31 March 2006. It had to be filed
within
six weeks of the award. It is, therefore, about 2 ½ months
out of time. It was filed almost four months after the
award had
been issued, i.e. almost three times the time period envisaged by s
145(1)(a).
The notice in terms of rule 7A(8) was filed more than three years
later. That is an extraordinary delay. In terms of rule 7A(2)(b),
the CCMA should have filed the record within 10 days of the review
application having been launched. If it fails to comply, an
applicant cannot simply let sleeping dogs lie. In terms of rule
7A(4):
“
If the
person or body fails to comply with the direction or fails to apply
for an extension of time to do so, any interested party
may apply, on
notice, for an order compelling compliance with the direction.”
The applicant did no such thing. And in terms of rule 7A(8), it had
to file a notice amending or supplementing its notice of
motion, or
a notice that it stands by it, within 10 days of the CCMA making the
record available. Instead, the company took no
steps to file the
record or a rule 7A notice until it was compelled to do so by a
court order on 26 May 2009. And even then,
it did not comply with
the court order to file the record and the notice within five days.
It only did so a month later, on 26
June 2009. And even then, it did
not file an application for condonation.
Reasons for lateness
Review application
In its founding affidavit, the company’s CEO, Mr Johan Smit,
blithely states that it has demonstrated good cause for the
late
filing of the review application. He says that: “Applicant has
sought to challenge the award made by [the arbitrator]
by applying
for rescission of the award. Once that application failed, applicant
has taken steps without delay to launch these
review proceedings.”
But Smit does not explain why the company did not file its review
application timeously, other than to blame its first set of
attorneys for their wrong advice, leading to the application for
rescission. He says the following:
“
Once
[the arbitrator] made his award on 3 December 2005, I was advised by
my erstwhile attorneys [Mallinicks] that the most expeditious
and
cost-effective means of challenging the award was to apply for the
rescission thereof. This application was prepared within
weeks of
[the] award being made. Had the rescission application being
successful, there would have been no need to review the award.
As
this was a more speedy and cost-effective method of challenging the
award, applicant pursued this course. The alternative, namely
the
immediate launch at the time of the review of the award before the
above Honourable Court, would have been inconsistent with
the
launching of the rescission in a separate forum, namely [the CCMA],
at the same time. It was only after receiving the rescission
ruling
on 2 March 2006 that it became clear that applicant would be required
to bring this review application."
However, even after the rescission ruling was made on 2 March 2006,
the company took almost a month to bring the review application.
The
initial review of the ruling allowing legal representation was not
made as a matter of urgency and was not accompanied by
an order
seeking interim, urgent relief of any kind. In the meantime, the
company and its attorneys simply ignored the provisions
of the act
compelling it to file its review application within six weeks. The
explanation for the delay is unsatisfactory.
Rule 7A notice
As set out above, the record and the rule 7A notice were filed more
than three years late, and a month after this court had ordered
the
company to do so within five days.
In attempting to explain this extraordinary delay, the applicant
seeks to blame its second set of attorneys, Biccaro Bollo Mariano
Inc (“BBM”).
In its supplementary affidavit filed in accordance with my directive
of 11 November 2010, the company creates the impression
that it only
pursued the review application after it had received the rescission
award in March 2006. It explains that, on 19
April 2006, BBM –
who were by then representing the company – sent a letter to
the employee’s attorneys of
record, Bernadt Vukic Potash &
Getz (“Bernadt”). They included a fax from Sneller
Transcriptions (Pty) Ltd stating
that Snellers were unable to
provide a transcription as the audio recordings done by the CCMA
were of poor quality. What Smit
omitted to mention in his affidavit,
is that the fax from Snellers was dated 30 January 2006. That fax
also refers to a fax from
Mallinicks dated 30 January 2006 and its
"request that we transcribe the above mentioned matter."
The inference is
inescapable that the applicant’s attorneys
were in possession of the CCMA record by the end of January 2006 and
did nothing
to pursue the review application timeously.
On 20 June 2006, Bernadt sent a letter to BBM reminding it that its
client was not complying with the rules of court. The company
says
that the reason was that there were "without prejudice"
discussions between the parties. But as Mr Field rightly
pointed
out, that did not relieve the company or its attorneys from its
obligations. It is worth quoting Field's letter in full:
“
As you
are aware, the fact that the parties may be exploring settlement on a
without prejudice basis does not in any way relieve
your client of
its obligations in terms of the rules of the Labour Court when it
comes to expeditiously progressing its review
application. In this
regard, we wish to place on record that your client has apparently
taken no steps whatsoever since it launched
its first review (in
relation to its challenge to the Commissioner's decision to allow
legal representation at arbitration proceedings),
nor in relation to
its second review (primarily in relation to the question of the
failure of your client's rescission application).
In the
circumstances, your client is not in compliance with the provisions
of the rules of court, and unless we receive your client's
notices
and record of the proceedings in relation to both review application
is by no later than close of business on Friday 30
June 2006, we will
be obliged to take the necessary steps on behalf of our client in
this regard."
BBM replied on 26 June 2006. It reiterated its difficulties in
preparing the record and suggested that the record would have
to be
reconstructed from the arbitrator's notes. It then stated the
following:
“
Mr C
Bollo of our firm who is handling this matter as well as our counsel
are away on their mid-year vacation and will only be returning
to
office in and during [
sic
]
the second week of July. We suggest that a meeting of all parties
concerned be held as soon thereafter as possible, in order that
the
record of the proceedings may be finalised. In the circumstances, we
are certain that you would appreciate that we cannot possibly
comply
with the time limit provided in your letter of 30 [
sic
]
June 2006. Naturally, and in due course and should it be required, we
shall apply for condonation in respect of any failure to
comply with
the Labour Court rules."
However, more than four years later, neither the company nor its
attorneys have applied for condonation in respect of a failure
to
comply with the Labour Court rules.
On 28 June 2006, the CCMA filed the contents of its file as well as
three audiotapes at the Labour Court. On 7 August 2006, BBM
called
for a meeting with Bernadt to finalise the record. On 10. August
2006, the arbitrator filed a copy of his notes made at
the
arbitration proceedings, together with a draft transcript. On 14
August 2006, Bernadt advised BBM that the draft transcript
of the
arbitrator's notes had been referred to the employee for his
consideration. On 19 April 2007, Bernadt sent a letter to
BBM’s
Mr Bollo with three pages of corrections and amendments to the draft
transcript. On 22 May 2007 BBM wrote back to
Bernadt, attaching a
letter from "Busy Hands Transcriptions" stating that it
was not prepared "to insert statements
that do not appear in
the handwritten notes of the Commissioner".
On 25 May 2007 Bernadt wrote to BBM. Field reminded Bollo that it
was the duty of the parties to agree and reconstruct the record
and
that it was not for a transcriber to advise the parties what should
or should not be in the record, particularly if they
were in
agreement on this aspect. He also advised BBM that "Busy Hands
Transcriptions" were not accredited and suggested
that BBM make
use of the same accredited transcribers that are used by the Labour
Court, the High Court and the CCMA. Field included
the contact
details for those transcribers. BBM did not respond.
Field wrote to BBM again on 5 June 2007. The letter was sent to both
its Johannesburg and Cape Town offices. It recorded the
following:
"Our letter of 25 May 2007,
to which we have not received the courtesy of a reply, refers. For
your ease of reference we attach
a copy of our above-mentioned letter
and enquire what progress has been made with the finalisation of the
record. As you will appreciate,
our client is becoming ever more
anxious to resolve this matter."
On 5 September 2007 Bernadt advised BBM that the employee had
instructed them to uplift the tape-recording and to attempt to
have
sound experts transcribe it. However, the sound engineers were
unable to do so and on 19 November 2007 Bernadt sent BBM
another fax
advising them accordingly.
Inexplicably, Smit says in his affidavit that the letter of 19
November 2007 was "inadvertently sent to BBM’s
Johannesburg
office and only came to the attention of Mr Cornelissen
at its Cape Town office on 14 December 2007." This is despite
the
fact that the partner in charge of the matter at BBM was at all
times Mr Claudio Bollo, who is based in Johannesburg and to whom
all
previous correspondence had been addressed. It beggars belief that,
had it been necessary, Bollo would not have redirected
the letter to
Cornelissen in Cape Town – especially given that Bollo was not
only the company's attorney, but also its
director and company
secretary.
In any event, Bernadts re-sent the letter to Cornelissen on 14
December 2007. They concluded by stating: "We look forward
to
receiving your response as a matter of urgency so that we can
progress this matter to finality without any further delay."
Despite this note of urgency, BBM’s Cornelissen only responded
almost a month later, on 10 January 2008. He said that some
of the
suggested amendments did not appear in the arbitrator's handwritten
notes and therefore could not form part of the record;
but that "the
typographical errors you have pointed out have been amended by the
transcriber."
Bernadt’s Field responded on 29 January 2008 in these terms:
"Our client has instructed
us that for purposes of progressing your client's much delayed review
application in this matter,
that he has no option but to advise that
the matter should proceed on the basis of the transcription of the
Commissioner's handwritten
notes subject to the amendments which your
client has agreed to. In the circumstances, our client has
furthermore instructed us
to demand as we hereby do, that you
immediately comply with your client's obligations in terms of the
rules of court, more particularly
in relation to the filing of the
complete record, and your clients rule 7A(8)(a) or (b) notice.”
Once again, there was no response from BBM.
On 18 February 2008, Field wrote to BBM once again, enclosing a copy
of his letter of 29 January 2008. He stated:
"Unfortunately, we have not
received any reply from yourselves [
sic
] in relation to the
contents of this letter. In the circumstances our client has
instructed us to advise you, as we hereby do,
that if your client
does not comply with the rules of court in relation to its review
application by no later than close of business
on 20 February 2008,
that we are to bring an application to the Labour Court to dismiss
your client's application for review. We
wish to place on record
again, that your client has taken no steps in compliance of the rules
of court since the parties have agreed
that portion of the record
consisting of the arbitrator's notes."
The next day, BBM advised Bernadt that they had served a copy of the
Commissioner's notes and a transcript thereof on the CCMA
and have
requested the Commissioner to initial the transcript.
On 4 March 2008, Field wrote to BBM once again, and reminded them
that they had still not filed the rule 7A(8) notice. He added:
"As
you are aware, our client is of the view that your client is not
progressing the review expeditiously, and all his rights
remain
reserved."
Smit alleges in his affidavit that “there is no further
correspondence in the file which I received from BBM after
terminating
their mandate in relation to the period until the
[employee] launched an application to compel the applicant to file
the record,
which application was served on 19 November 2008 on
BBM”.
This period appears to refer to the period 4 March to 19 November
2008. Smit terminated BBM’s mandate in August 2009 only.
BBM
filed a notice of withdrawal on 24 August 2009. But on 7 May 2008,
Field sent a letter to BBM. The employee has attached
the proof of
transmission to his affidavit, showing that the letter was
successfully transmitted by fax to BBM’s Cape Town
offices. It
was marked for the attention of Cornelissen. In the letter, Field
refers to his earlier letter of 4 March 2008. He
confirms that, on
28 June 2006, the CCMA had filed its file and three audiotapes at
the Labour Court. He also confirms that,
on 19 February 2008, BBM
had served the Commissioner's handwritten notes and a transcript
thereof on Bernadt. He goes on to say:
"In terms of Labour Court
Rule 7A (8): ‘
The applicant must within 10 days after the
registrar has made the record available – (a) by delivery of a
notice and accompanying
affidavit, amend, add to or vary the terms of
the notice of motion and supplement the supporting affidavit; or (b)
deliver a notice
that the applicant stands by its notice of motion.’
To date, notwithstanding demand, we have not received your client’s
rule 7A (8) notice.
In the circumstances, our client
has instructed us to demand that your client is to deliver its rule
7A(8) notice by no later than
close of business on Friday, 9 May
2008, failing which we are further instructed to approach the Labour
Court, Cape Town for an
order in terms of rule 12 (2) of the Labour
Court rules."
Once again, BBM did not respond. The company does not dispute that
the letter was received by BBM. Smit says: "I trusted
that the
matter was in the capable hands of my attorneys, but ... certain
events occurred of which my attorneys had not advised
me. I have no
recollection or record of any reports received from my attorneys
during this time, but as I heard nothing from
my attorneys at the
time, I trusted matters were proceeding apace.” Clearly,
Smit’s trust in his attorneys was misplaced.
They were far
from capable. The company cannot simply blame its attorneys, though.
Bollo, the partner in charge of the matter,
was Smit’s
co-director and the company secretary. What is more, the offices of
BBM are at the same address as the company’s
head office in
Johannesburg. It beggars belief that Bollo would not have kept his
fellow directors apprised of any developments,
or that Smit and his
fellow directors would not have made inquiries. Smit does not
explain how he could have "trusted matters
were proceeding
apace” when, on the contrary, his attorneys were doing
nothing.
Eventually, on 19 November 2008, the employee launched the
application to compel the company to file a complete record and the
relevant notices in terms of rule 7A(8). BBM delivered a "notice
of intention to oppose" on 25 November 2008. However,
it did
not file an answering affidavit and did nothing more to oppose the
application. Because of the filing of that notice,
the matter was
placed on the opposed roll for hearing, with the result that it
could only be heard on 26 May 2009. When the day
came, neither the
company nor its attorneys bothered to attend the hearing. This
course of behaviour is consistent with an intention
to delay the
matter and to frustrate the process, rather than the actions of a
litigant who intends to prosecute a bona fide
review application
timeously and expeditiously. Smit says in the company’s
replying affidavit that he "cannot exclude
the possibility that
the attitude of the applicant’s attorneys was a cynical one".
He alleges, though, that he was
"not part of such cynical
approach to the litigation". His difficulty is that he never
disclosed to this court that
the attorney appointed by the company,
Bollo, was his co-director and the company secretary. It was only
when the employee alerted
the court to that fact in his answering
affidavit that Smit was forced to admit to it in reply. This, in
itself, points to the
company being complicit in a cynical approach
to this drawn-out and expensive litigation.
As pointed out before, and as a further example of the approach the
company and its attorneys have taken to this litigation,
this court
and its rules, the company simply ignored the court order granted by
Basson J on 26 May 2009. In his replying affidavit
concerning the
condonation application, Smit now disavows any knowledge of that
court order. Yet the employee pertinently addressed
the company's
failure to comply with the court order in his answering affidavit
the main application, filed in July 2009. Neither
Smit, nor any
other person authorised by the company replied to that affidavit.
It is only when the employee took steps to execute the arbitration
award that the applicant’s attorneys were prompted into
action. On 26 June 2009, they wrote to Bernadt to say that they had
finalised the amended record and drafted the client's notice
in
terms of rule 7A(8)(b), which would be delivered on the same day.
They added: "We will proceed to draft the necessary
application
for condonation in this regard, which will be served on your offices
in due course." But that never happened.
The company cannot blame only its attorneys for the delay. I have
recently had occasion
6
to remind litigants and their attorneys of the words of Steyn CJ in
Saloojee & another v Minister of Community Development
7
more than 45 years ago:
"In
Regal v African
Superslate (Pty) Ltd
1962 (3) SA 18
(AD) ... this court came to
the conclusion that the delay was due entirely to neglect of the
applicant’s attorney, and held
that the attorney’s
neglect should not, in the circumstances of the case, debar the
applicant, who was himself in no way
to blame, from relief. I should
point out, however, that it has not at any time been held that
condonation will not in any circumstances
be withheld if the blame
lies with the attorney.
There is a limit beyond which a litigant
cannot escape the results of his attorney’s lack of diligence
or the insufficiency
of the explanation tendered
. To hold
otherwise might have a disastrous effect upon the observance of the
rules of this court. Considerations
ad misericordiam
should
not be allowed to become an invitation to laxity. In fact this court
has lately been burdened with an undue and increasing
number of
applications for condonation in which the failure to comply with the
rules of this court was due to neglect on the part
of the attorney.
The attorney, after all, is the representative the litigant has
chosen for himself, and there is little reason
why, in regard to
condonation of a failure to comply with a rule of court, the litigant
should be absolved from the normal consequences
of such a
relationship, no matter what the circumstances of the failure are.…
A litigant, moreover, who knows, as the applicants
did, that the
prescribed period has elapsed and that an application for condonation
is necessary, is not entitled to hand over
the matter to his attorney
and then wash his hands of it. If, as here, the stage is reached
where it must become obvious also to
a layman that there is a
protracted delay, he cannot sit passively by, without so much as
directing any reminder or enquiry to
his attorney… and expect
to be exonerated of all blame; and if, as here, the explanation
offered to this court is patently
insufficient, he cannot be heard to
claim that the insufficiency should be overlooked merely because he
has left the matter entirely
in the hands of his attorney. If he
relies upon the ineptitude or remissness of his attorney, he should
at least explain that none
of it is to be imputed to himself. That
has not been done in this case. In these circumstances I would find
it difficult to justify
condonation unless there are strong prospects
of success."
Unfortunately, as I remarked in
Khan v Cadbury,
this court is
still being burdened with an undue number of applications for
condonation in which the failure to comply with the
rules of this
court was due to neglect on the part of the attorney.
The Labour Appeal Court had the following to say in
Superb Meat
Supplies cc v Maritz:
8
"It has never been the law
that invariably a litigant will be excused if the blame lies with the
attorney. To hold otherwise
I have a disastrous effect on the
observance of the rules of this court and set a dangerous precedent.
It would invite or encourage
laxity on the part of practitioners."
And in
A Hardrodt (SA) (Pty) Ltd v Behardien & others
9
the Labour Appeal Court reinforced this view in circumstances in
which an applicant sought to explain the delay of some four
and a
half months by determining that:
"The catalogue of events
reveals negligence, incompetence and gross dilatoriness by the
appellant's legal representatives.
It is difficult to see how that
constitutes a good cause condonation with convincing reasons as laid
down in the
Queenstown Fuel Distributors CC
case."
It will serve little purpose to list all the cases in which this
court has followed these principles. But it is significant that
the
court has accepted the judgments which hold that if the attorney
displays ‘gross ineptitude’ the court ‘cannot
extend any indulgence’ to the applicant.
10
In the present case, it is not only the company's attorneys whose
conduct was characterised by gross negligence, incompetence
and
gross dilatoriness. The company itself was complicit. In
circumstances where Bollo was a director of both BBM and the
company,
as well as the company secretary, the company cannot hide
behind the incompetence and negligence of Bollo and BBM.
The explanation for the delay of more than three years is entirely
unsatisfactory.
Prospects of success
Review of December 2005
arbitration award
In considering the late filing of the review application, I have to
consider the company's prospects of success in reviewing
the
arbitration award of 3 December 2005 in which the dismissal of the
employee was found to be substantively and procedurally
unfair.
The company has not attacked the finding on substantive fairness.
For that reason alone, it is difficult to see on what basis
it could
have any prospects of persuading a court that the compensation award
is unreasonable.
Nevertheless, I have to consider its prospects of success in
reviewing the finding on procedural unfairness. In this regard,
it
must be borne in mind that the arbitrator had only the evidence of
the employee before him. On the evidence, the employee
was taken by
surprise when he was confronted with a number of allegations leading
to his dismissal at the board meeting of 13
June 2005. He attended
the meeting pursuant to a letter dated 10th of June 2005. At worst,
as the arbitrator commented, the letter
intimates that he could be
placed in an alternative position to that of managing director.
There is no indication that he could
be dismissed. The finding of
the arbitrator, given the evidence before him, was not unreasonable.
The company has no prospects
of success on this ground.
Review of rescission
ruling
In order to decide on condonation for the late filing of the rule 7A
notice, I also have to consider the company's prospects
of success
in its application for review of the rescission ruling of 2 March
2006.
In order to do so, I have to consider the merits of that
application. The company did not file a supplementary affidavit with
its rule 7A notice. Even if I come to the conclusion that its
application for condonation for the late filing of that notice
should not be granted, therefore, I still have to consider the
merits of the review application of the rescission ruling. I will
therefore deal with the prospects of success in that application
when I consider the merits of the application in full.
Before I do that, and in order to complete the consideration of the
two applications for condonation, I will deal with the prejudice
to
the respective parties.
Prejudice
With regard to the late filing of the review application of the
December 2005 award, as well as the late filing of the rule 7A
notice, the prejudice to the employee outweighs the prejudice to the
company. The employee has been armed with a substantial
monetary
award in his favour for the last five years; but it has been cold
comfort to him. The company failed to launch this
application for
the review of that award in time. Instead, it sought to rescind the
award. Having failed to do that, the company
and its attorneys
dragged out the review of the rescission ruling for years.
Conclusion on condonation
I have come to the conclusion that both applications for condonation
should be dismissed. Therefore, I need not consider the
alternative
relief sought, i.e. the application for review of the December 2005
arbitration award. However, I still need to consider
the merits of
the main application for review, i.e. that of the rescission ruling
of March 2006.
review of rescission ruling: the merits
The arbitrator heard oral argument on the rescission application on
9 February 2006. Both parties were represented by senior
counsel,
instructed by Mallinicks and Bernadt respectively.
The arbitrator set out the background to the arbitration on the
merits having been heard by default. He noted that the employee’s
unfair dismissal dispute was initially set down for arbitration on
17 October 2005. On that day, the arbitrator granted the application
for legal representation. The employer's attorney (after taking
instructions from his client) expressed his client’s desire
to
take the ruling to the Labour Court on review. The arbitrator says
that his response to those sentiments are well covered
in the
arbitration award. Those sentiments were, in short, that he had
indicated that the ruling was on an interlocutory application
and
that it would be more appropriate to challenge it once the matter
was finally disposed of. That would avoid piecemeal proceedings
and
an undue delay of an arbitration hearing. As matters turned out, the
company thought otherwise. The arbitrator also pointed
out that
there was no provision in the LRA which prevented him from
proceeding with the matter on the basis that there was a
review
application of a ruling determining an interlocutory issue. In his
view, the emphasis placed on the effective resolution
of labour
disputes would be defeated if the party could take every ruling on
an interlocutory matter on review. He said: "Then
if a ruling
on one or more of these issues has to be taken on review at every
turn that may defeat the purpose of the LRA as
disputes may drag on
for many years." Those turned out to be prophetic words.
The arbitrator added that he "even discussed with the parties
the possibility of enrolling the matter for two days but Mr
Visagie
was noncommittal in that respect." The matter was rescheduled
for arbitration on 23 November 2005 and notice to
that effect was
faxed to the parties on 19 October 2005. On 17 November 2005 Mr
Visagie addressed a letter to the CCMA seeking
written confirmation
of the arbitrator's ruling on legal representation. Mr Visagie
sought a reply by no later than 21 November
2005. The CCMA responded
on 21 November 2005 "clearly conveying that I [the arbitrator]
intended to have the arbitration
hearing proceed on 23 November."
The arbitrator pointed out that the letter does not send any other
message than that the
arbitration hearing would proceed on the
scheduled date.
The arbitrator records that, on 23 November 2005, the company
defaulted and he waited an hour before commencing with the hearing.
He further records: "It is correct that a receptionist …
alerted me about the employer’s call midway the proceedings
and I advised her to convey the message that the arbitration hearing
was in progress."
In considering the rescission application in terms of section 144(a)
of the LRA, the arbitrator had regard to case law setting
out what
he termed the "narrow approach" and "broad approach"
respectively. In terms of the narrow approach,
it is not necessary
for a party to show good cause in order for an award to be rescinded
in terms of the provision. In terms
of the broad approach, the
parties seeking rescission must show good cause at prospects of
success. The arbitrator preferred
the narrow approach; nevertheless,
he said that he would not constrain himself to the narrow approach.
In considering the question whether the arbitrator's ruling on
rescission is open to review, I will consider that the test on
rescission has subsequently been clarified in
Shoprite Checkers
(Pty) Ltd v CCMA & others
.
11
In that case, the Labour Appeal Court held that: "section 144
must be interpreted so as to also include good cause as a
ground for
the rescission of a default arbitration award. Accordingly, a
Commissioner may rescind the arbitration award under
section 144
where a party shows good cause for its default."
Has the company shown good cause for its default?
In
Shoprite Checkers
12
the LAC explained the requirements to show good cause in a
rescission application:
“
[35]
The test for good cause in an application for rescission normally
involves the consideration of at least two factors. Firstly,
the
explanation for the default and secondly whether the applicant has a
prima facie defence. In
Northern
Province Local Government Association v CCMA & others
[2001] 5 BLLR 539
(LC) at 545, paragraph [16], it was stated:
‘
An
applicant for the rescission of a default judgment must show good
cause and prove that he at no time denounced his defence, and
that he
has a serious intention of proceeding with the case. In order to show
good cause an applicant must give a reasonable explanation
for his
default, his explanation must be made bona fide and he must show that
he has a bona fide defence to the plaintiff’s
claims.”
[36] In
MM Steel Construction
CC v Steel Engineering & Allied Workers Union of SA & others
(1994) 15 ILJ 1310 (LAC) at 1311J–1312A, Nugent J had this to
say:
“
Those
two essential elements ought nevertheless not to be assessed
mechanistically and in isolation. While the absence of one of
them
would usually be fatal, where they are present they are to be weighed
together with relevant factors in determining whether
it should be
fair and just to grant the indulgence.”
At the time of the hearing of the rescission application in February
2006, the Labour Appeal Court had not clarified the legal
position
pertaining to the CCMA in considering applications for rescission in
terms of section 144 of the LRA. Therefore, the
arbitrator did not
explicitly approach the application in terms of the 'good cause'
test. Was his conclusion nevertheless so
unreasonable that no
reasonable decision maker could have come to the same conclusion?
13
Explanation for the
default
The company lays the blame for its default on 23 November 2005
squarely at the door of his then attorneys, Mallinicks.
The company does not dispute that it was properly notified of the
arbitration hearing on 23 November 2005. It says, though, that
Mr
Visagie of Mallinicks advised it that the delivery of the review
application of the ruling on legal representation, filed
the
previous day – on 22 November 2005 – would stay the
arbitration proceedings. It is for this reason that the company
did
not attend.
The company firstly relies on the letter from Visagie to the CCMA on
17 November 2005 to say that "it is clear from the
above letter
that Mallinicks
bone fide
believed that the filing of the
review application stay the arbitration proceedings". But that
letter explicitly states
that "the arbitration is to proceed on
23 November 2005". It does not set out the attorney’s
wrongly held belief
that the launching of a review application would
stay the arbitration proceedings.
In the rescission application before the CCMA itself, Smit stated
that he was advised by his attorney that the arbitration would
be
"postponed". And Visagie himself stated in a supporting
affidavit in the application for rescission that he believed
the
arbitration "would be postponed" pending the outcome of
the review. He did not state in his affidavit that he advised
the
company that the arbitration would be stayed.
Notwithstanding the provisions of CCMA rule 23, neither the company
nor its attorneys took any steps to effect a postponement,
either by
agreement, or by way of a formal application to the CCMA beforehand,
or on the morning of the hearing itself.
The conduct of the company and its attorneys on the day of the
arbitration hearing itself is difficult to comprehend. Lynn
February, another director of Mallinicks, stated in her affidavit in
support of the rescission application that Smit phoned their
offices
on the day of the hearing "in order to confirm that the
arbitration had been postponed". It appears that Visagie
was on
leave at the time. Smit says that he telephoned Mallinicks to "make
doubly sure" that the arbitration had indeed
been postponed.
Although February initially thought that this was the case, she
telephoned the CCMA at approximately 10:45, when
she was advised
that the arbitration was proceeding in the absence of the company.
Inexplicably, she did not go to the CCMA to
ask for a postponement
or to attend at the arbitration; neither did she ask any other
colleagues to do so; neither did she addressing
the urgent
correspondence to the CCMA; and, most alarmingly, neither did she
contact her client (Smit) to tell him that he had
been wrongly
advised and that the arbitration was continuing. She only did so
some time later. Smit himself did not go to the
CCMA or send anyone
else from the company to represent it.
The company has not given a reasonable explanation for its delay.
Even though it had been badly advised by its attorneys, it
should
have made sure that the arbitration was not proceeding in its
absence.
It is so that Smit "double checked" with Mallinicks on the
day of the hearing. It is inexplicable that they did not
alert him
to the true state of affairs timeously. But this is one of those
cases where, in the words of Steyn CJ in
Saloojee
14
,
“there is a limit beyond which a litigant cannot escape the
results of his attorney’s lack of diligence or the
insufficiency of the explanation tendered.”
If there is no satisfactory explanation for the default, it is fatal
for the rescission application. It was therefore not necessary
for
the arbitrator to the question of a bona fide defence.
15
He nevertheless did so, and found that, even though it had
reasonable prospects of success on the merits, its “grossly
unreasonable grounds for default disentitles the employer from the
relief sought”. And in any event, the company does not
challenge the arbitrator’s finding on substantive unfairness
in these proceedings. It is therefore difficult to discern
on what
basis it could have a
bona fide
defence to the claim of
unfair dismissal.
As Nugent JA remarked in
MM Steel Construction
16
:
“
In my
view the failure to provide any explanation for [the labour
consultant’s] failure to file the papers necessary to defend
the claim is in itself sufficient reason to dismiss the application
(
Chetty’s
case).
“
I
might add that it has been held that negligence on the part of an
attorney... will not necessarily constitute an acceptable
explanation.
An applicant who relies on the ineptitude or remissness
of his attorney should at least satisfy a court that none of it is to
be
imputed to himself (
Saloojee
& another v Minister of Community Development
1965 (2) SA 135
(A) at 141B-H).”
The arbitrator did consider the company's explanation for its
default. He noted that it was common cause that proper service
was
effected to the employer and it defaulted. He then considered the
explanation for the default. He reasoned as follows:
"The employer then contends
that it believed that the review application it made in the Labour
Court would result to [
sic
] the postponement of the case. This
appears to have been the advice the employer received from Mr
Visagie. Whatever the source
of this advice might have been, I was
unable to obtain any authority for the view that a review of an
interlocutory order stays
the arbitration proceedings. At any rate,
the fact that the party has received incorrect advice from its
attorneys does not constitute
a procedural irregularity contemplated
under section 144 … This is a typical case where the employer
seeks to rely on its
negligence or that of its attorneys to have the
award rescinded and that is not acceptable."
The arbitrator came to the conclusion that the employer had not
provided a satisfactory and acceptable explanation for its default.
In this regard, he referred to the
dictum
of Miller JA in
Chetty v Law Society, Transvaal
17
:
“
An
unsatisfactory and unacceptable explanation remains so, whatever the
prospects of success on the merits. In the light of the
finding that
the appellant's explanation is unsatisfactory and unacceptable it is
therefore, strictly speaking, unnecessary to
make findings or to
consider the arguments relating to the appellant’s prospects of
success."
The arbitrator came to the conclusion that the grossly unreasonable
grounds for default disentitled the company from the relief
sought.
This conclusion was not unreasonable. As I have set out above, the
explanation for the company's default was unsatisfactory.
Its
attorneys were not only grossly negligent, but grossly inept. This
is one of those cases where the employer cannot hide behind
the
negligence of its attorneys. Even if another arbitrator could have
come to a different conclusion, the decision of the second
respondent was not so unreasonable that no reasonable decision maker
could have come to the same conclusion.
Costs
The employee has had to wait for more than five years to make the
arbitration award in his favour a reality. In the process,
he has
had to incur significant legal costs. The company, no doubt, has
incurred significant legal costs as well. It has been
badly served
by two sets of attorneys. But it has recourse against those
attorneys for their negligent conduct. The employee
does not. There
is no reason in law or fairness why costs should not follow the
result.
Order
In conclusion, I order as follows:
The application for condonation for the late filing of the review
application pertaining to the award of 3 December 2005 is
dismissed.
The application for condonation for the late filing of the rule 7A
notice is dismissed.
The application for review of the rescission ruling dated 2 March
2006 is dismissed.
The applicant is ordered to pay the third respondent's costs.
______________________________
ANTON STEENKAMP
JUDGE OF THE LABOUR COURT
CAPE TOWN
Date of hearing:
11 November 2010
Date of judgment:
21 January 2011
For the applicants:
Adv Frans Rautenbach
Instructed by Ward Ward & Pienaar
For the respondent:
Adv ML Sher
Instructed by Bernadt Vukic Potash & Getz
1
Mr
Field was also the instructing attorney for the employee in these
proceedings before the Labour Court.
2
Now
Webber Wentzel (incorporating Mallinicks)
3
It
appears that Biccaro Bollo Mariano Inc came on record for the
company in March 2006. Their mandate was, in turn, terminated
in or
about August 2009.
4
Mr
Claudio Bollo, the company’s second attorney, resigned as
director of the company on 25 November 2010, ie on the same
day that
it filed its affidavit in support of the application for
condonation.
5
1962
(4) SA 531
(A)
6
See
Khan v Cadbury South Africa (Pty) Ltd
[2010] ZALC 175
(C 965/2008, 17
November 2010)
7
1965
(2) SA 135
(A) 141B-H
8
(2004)
25
ILJ
96
(LAC)
9
(2002)
23
ILJ
1229
(LAC) para [14] (per Nicholson JA); followed in
Arnott
v Kunene Solutions & Services (Pty) Ltd
(2002)
23
ILJ
1367
(LC).
10
Waverley
Blankets Ltd v Ndima & others
(1999)
20
ILJ
2564
(LAC).
11
(2007)
28
ILJ
2246
(LAC);
[2007] 10 BLLR 917
(LAC)
12
Supra
paras [34] – [36]
13
Sidumo
v Rustenburg Platinum Mines Ltd
2008
(2) SA 24
(CC) para [110]
14
supra
15
MM
Steel Construction CC v Steel Engineering & Allied Workers Union
of SA & others
(1994) 15
ILJ
1310 (LAC) at
1311J–1312A
16
Supra
1314 C-D
17
1985
(2) SA 531
(A) at 767J-769D