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[2011] ZALCCT 37
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Martin and Hauptfleisch Civils CC v Mbutho and Others (C139/10) [2011] ZALCCT 37 (18 October 2011)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
Case
no: C139/10
In
the matter between:
MARTIN
AND HAUPTFLEISCH CIVILS CC
…..............................................
Applicant
and
DESMOND
MBUTHO
….........................................................................
First
Respondent
MBONENI
NGQOBE
…......................................................................
Second
Respondent
MASIBULELE
SIGOBELWANA
…......................................................
Third
Respondent
MHLANGABEZI
SIBHIDLA
…...........................................................
Fourth
Respondent
Date
of hearing : 21 April 2011
Date
of judgment : 18 October 2011
JUDGMENT
VAN
VOORE AJ
Introduction
On
23 November 2010 Steenkamp J handed down default judgment against
Martin and Hauptfleisch Civils CC (the employer). In that
default
judgment Steenkamp J,
inter alia
, ordered,
inter alia
,
that the First, Second and Third Respondents be paid compensation,
together with interest, and that the employer pay the costs.
In
this matter the employer applies for an order rescinding the default
judgment dated 26 November 2010, that it be
granted leave
to file a response and the costs of the rescission application.
The
legal principles in relation to an application for rescission of a
default judgment in this Court are well known. An applicant
in a
rescission application must have a reasonable explanation for the
default in delivery their response and in relation to
the merits of
the dispute, a bona fide defence which, prima facie, carries some
prospect of success. I will deal with each of
these requirements in
turn.
Explanation
for the default
The
First and Second Respondent served a statement of claim dated
26 February 2010 under case no. C139/2010 alleging,
inter
alia
, that they were unfairly dismissed. On 1 March 2010
the First to Fourth Respondent wrote a letter to the employer
advising
it to ignore the statement of claim dated 26 February 2010.
The
First and Second Respondents served and filed a further statement of
claim on 17 May 2010. At that stage the First
and Second
Respondents were represented by Adams & May Attorneys. In this
statement of claim the First and Second Respondents
alleged that
they were unfairly dismissed and they sought, inter alia,
compensation for their alleged unfair dismissal.
On
17 May 2010 the First and Third Respondents delivered a
statement of claim alleging that they were unfairly dismissed
(retrenched). They sought,
inter alia
, reinstatement
alternatively compensation. Following a change of attorneys of
record and an application to amend the statement
of claim, which
application was unopposed, the First to Fourth Respondents alleged
that they were unfairly dismissed (retrenched)
and they sought,
inter alia
, compensation for the alleged unfair dismissal
severance pay as well as remuneration in respect of work performed
and in respect
of which they were allegedly not paid.
The
facts in relation to the service of the various statements of claim
are that:
A
statement of claim on behalf of the First and Second Respondents
was served on the employer on 26 February 2010.
On
1 March 2010 the employer was advised in writing by the
First to Fourth Respondents to disregard the statement
of claim
sent to it by telefax on 26 February 2010.
A
further statement of case (in respect of the First and Third
Respondents) was served on the employer on 17 May 2010.
An
amended statement of claim was served on the employer on
18 October 2010. The Respondents applied for default
judgment on 15 November 2010.
On
15 November 2010 the First to Fourth Respondents
delivered an application for default judgment. Default judgment
was
granted on 26 November 2010.
The
facts, not in dispute, in relation to the employer’s conduct
following the initiation of proceedings against it in this
Court may
be summarised as follows:
The
employer did receive the ‘initial’ statement of case
dated 26 February 2010 and the subsequent letter
sent on
1 March 2010 advising the employer to disregard that
statement of case.
The
employer did receive the statement of claim served and filed on
17 May 2010.
The
employer did receive the notice of withdrawal of the First and
Second Respondents’ then legal representatives.
The
employer did receive the Respondents’ notice of intention to
amend statement of claim on 6 September 2010.
That
amendment was effected and the amended statement of claim was filed
during October 2010.
The
employer did not deliver a response to the February 2010 or
May 2010 statement of claim. The employer did not
respond to
the Respondents’ notice of intention to amend their statement
of claim and the employer did not respond to
the amended statement
of claim.
In
the rescission application the employer does not take any issue with
the fact that the Respondents had properly served and
filed
statements of claim and that they were properly before the Court.
The employer’s rescission application is based
on the
explanation offered for not delivering a response timeously and what
it alleges to be a bona fide defence.
It
is the employer’s case that upon receipt of the ‘pro
forma’ statement of case the employer ‘immediately’
sent these documents to its labour consultant, Mr Renier van Vuuren
(van Vuuren).
In
the interim and on 1 June 2010 the employer’s Mr
John Martin (Martin) enquired from van Vuuren whom the employer
could instruct as an attorney. On the same day, 1 June 2010
van Vuuren recommended that the employer instruct Mr Carlo
Swanepoel
(Swanepoel). Van Vuuren also gave the employer Swanepoel’s
mobile telephone number together with his electronic
mail address.
On 6 September 2010 the employer’s sent an
electronic mail to Swanepoel informing Swanepoel that
the employer
had been referred to him by van Vuuren and enquiring whether
Swanepoel could assist. The very next day, 7 September 2010,
Swanepoel replied by electronic email, referring to a telephonic
conversation that he had with Martin and requesting documents
served
in relation to the matter and a short explanation as to what the
matter entailed.
There
is a further exchange of electronic mails as between Swanepoel and
Martin on 7 September 2010. This deals only
with the
notice of withdrawal of the previous attorneys of record and the
appointment of new attorneys of record. In his electronic
mail of
7 September 2010 to Martin Swanepoel does record that he
is awaiting further information from the employer.
During
September 2010 Ms Orpen (Orpen), an employee of the employer, was
instructed to send ‘
all the documentation in the matter
received up to that point in September 2010’
to
Swanepoel. Orpen was instructed to do so per telefax and to do so
timeously. The Applicant’s response had to be filed
at the
Labour Court on or before 4 October 2010. Orpen did not
send the documents to Swanepoel (the attorney) but rather
sent the
documents to van Vuuren (the labour consultant). Martin was unaware
of this. Martin “
believed Swanepoel [the attorney] to be in
possession of all the necessary documents in order to oppose the
matter
.”
The
employer closed its business on 15 December 2010 and
reopened its offices on Monday 10 January 2011. On 26 November 2010
the Sheriff attended at the Applicant’s premises for the
purpose of serving and executing the default judgment of
26 November 2010.
Martin
had instructed van Vuuren (the labour consultant) to oppose the
matter and “believed him to have liaised with Swanepoel
in
that regard”. Further Martin believed that the matter was
being attended to by van Vuuren who had been advising the
employer
on this dispute.
The
employer contends that these facts are evidence of a reasonable
explanation for its default in delivering a Response.
It
is so that on 1 June 2010 Martin on behalf of the employer
sought a recommendation from van Vuuren as to an attorney
who could
assist it. That recommendation was acted upon on 6 September 2010.
By 7 September 2010 the attorney
had asked the employer to
furnish him with various document relevant to the dispute as well as
a brief explanation as to what
the dispute entails. The Court
accepts that Orpen was instructed to send documentation to
Swanepoel. She did not do so. The documents
were however sent to van
Vuuren. Martin on behalf of the employer maintains that it believed
that van Vuuren was liaising and
communicating with Swanepoel on the
matter. In effect the employer’s contention is that it was
emboldemed in this view
or belief by the fact that van Vuuren had
dealt with the matter up to that point, that van Vuuren assisted it
in labour relations
matters and that van Vuuren had personal
knowledge of its labour relations and the dispute that the
Respondents had referred
to the CCMA.
On
the employer’s own version it was aware of the fact that
following receipt of the statement of claim there was a time
period
within which the employer was required to do the next thing (deliver
a response). On Martin’s version on behalf
of the employer
that time period was 4 October 2010. No response was
delivered on that day or indeed thereafter. Rather
the business shut
down on 15 December 2010 and reopened on 10 January 2011.
Martin concedes, and properly
so, that he should personally have
enquired as to the further conduct of the matter and he regrets not
doing so. In the same
breath however Martin claims that van Vuuren
made no further enquiry in relation to documentation being forwarded
to him and
also did not make any enquiries in relation to “progress
of the matter, which he should have done”. On balance, the
explanation is a reasonable one. Notwithstanding this it remains
necessary and important to consider the second leg of a rescission
application, has the employer demonstrated a bona fide defence.
Both
the High Court and the Labour Court have required that an applicant
for rescission must:
provide
a reasonable explanation for its default;
make
the application for rescission in good faith; and
demonstrate
that it has a
bona fide
defence to the claim or in the case
of a claim, has some prospects of success.
In
the matter of
Vorster
v EET SA (Pty) Ltd
,
1
the
Labour Court confirmed the principle that in terms of Rule 16A(1):
“
An
Applicant in order to succeed in an application for the rescission of
a judgment ... is obliged to show good cause....
In considering whether the
Applicant was grossly negligent in not delivering it s answering
affidavit or whether there is no acceptable
explanation for the
Applicant’s failure to deliver its answering affidavit, the
Court must have recourse to the Applicant’s
reasons, these are
relevant to the question whether the Applicant’s default is
wilful or not. Before a person can be said
to be in wilful default,
the following must be shown:
knowledge that the action is
being brought against him;
a deliberate refraining from
entering an appearance though free to do so; and
a certain mental attitude
towards the consequences of the default.”
In
that matter the Court also referred to a decision of
Grant
v Plembers (Pty) Ltd
,
2
in
which that Court held that:
“
(a) An
Applicant must give a reasonable explanation of his default. If it
appears that his default was wilful or that it was due
to gross
negligence, the Court should not come to his assistance....”
Albeit
late in the day (September 2010), the employer did make contact
with an attorney as recommended to it by its labour
consultant (van
Vuuren). An instruction was given for documents to be delivered to
the attorney. That instruction was not carried
out.
Prospects
of Success
The
employer contends that the Respondents were employed on fixed term
employment contracts and that they were remunerated every
fortnight.
The Respondents confirm that they were remunerated fortnightly but
contend that they were employed on contracts of
indefinite duration
‘after completion of a year of service’ with the
employer. The Respondents deny that they signed
fixed term
employment contracts. However the employer produced two documents
which,
prima facie
, appear to be fixed term employment
contracts between it and two of the Respondents. The Respondent
contents that upon the expiration
of the last of the employees fixed
term employment contract it had no further work for them. The
Respondent’s case is that
its work is the result of
successfully competing for work in the construction industry and
that its work involve smaller construction
projects typically done
as a sub-contractor for the main building contractor. The Respondent
further contends that the nature
and lifespan of those projects is
necessarily limited and that for this reason also it employed the
Respondents on a fixed term
basis.
This
Court is not required to determine the merits or otherwise of the
employer’s defence. At this stage all that is required
is for
the employer to demonstrate a
bona fide
defence. The employer
has demonstrated a
bona fide
defence which,
prima facie
,
does indeed carry some prospect of success. That being the case this
Court is reluctant to “close the door” to the
employer.
However the employer has advanced an explanation which is not
without difficulty or problems. Notwithstanding these
problems, on
the facts of this case it cannot be said that the employer was in
wilful default or acted in “complete”
disregard of the
rules of this Court.
However
and as conceded by counsel on behalf of the employer, it is
appropriate for this Court to express some displeasure with
the
employer’s conduct. Both Counsel for the employer and Ms P P
Genqese for the First to Fourth Respondents are in agreement
that
the Court may in a matter such as this make an appropriate order as
to costs. The Court has been referred to at least two
judgments one
of Steenkamp J in the matter of
Bernadette
Zeeman v Anthony Charles Quickelberge and the Railway Shed CC
3
as
well as the matter of
Lorna
E Naude v Bioscience Brands Ltd
4
.
In the matter of
Lorna
E Naude v Bioscience Brands Ltd
Cele
J in his judgment held that:
“
The
Applicant was represented on a pro bono basis. The considerations of
law and fairness of this matter suggests that a costs order
should be
issued against the Respondent. There is no specific provision in the
Rules of this Court for awarding costs in these
circumstances. Rule
40 of the High Court provides for a costs order for a successful
litigant in forma pauperis.”
In
the matter of
Bernadette Zeeman v Anthony Charles Quickelberge
and the Railway Shed CC
, Steenkamp J held that:
“
In this
respect I respectfully agree with Cele J that, in appropriate cases,
a pro bono litigant may be awarded costs, and disagree
with the
contrary view taken in Morkel N O & Others v CCMA & Others.
In litigation the pro bono client is at a disadvantage.
As between
attorney and client the attorney for the pro bono litigant can only
claim such expenses from the client as are actually
incurred by the
attorney. It has been argued that since his client has incurred no
fees, the attorney acting pro bono can claim
no fees, only
disbursements, from the losing party.
The problem with this view is
that it enables the opposing party to litigate with impunity,
discourage a settlement, and militates
against the public interest.”
I
align myself with the judgments of Cele J and Steenkamp J as
referred to above.
In
conclusion I make the following order:
The
default judgment dated 26 November 2010 is rescinded.
The
Applicant is ordered to pay the Respondents’ costs.
___________________
VAN
VOORE AJ
Appearances:
For
the Applicant: Adv. T. Golden instructed by Carlo Swanepoel Attorneys
For
the Respondents: Mr. P.P. Genqese instructed by Herold Gie Attorneys
1
(2006)
27 ILJ 2439 (LC)
2
1949
(2) SA 470
(O) at para 3 of the Mokgoatlheng AJ’s judgment.
3
Zeman
v Quickelberge & another (1) 2011 32 ILJ 453 (LC)
Zeman
v Quickelberge
& another (2) 2011
32 ILJ 469 (LC)
4
Naude
v BioScience Brands
[2010] JOL 25373
(LC)