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[2011] ZALCD 46
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Chantecler Hotel v Singaram and Others (D1134/10) [2011] ZALCD 46 (7 February 2011)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN DURBAN
CASE
NO: D1134/10
In
the matter between:
CHANTECLER
HOTEL
Applicant
And
JOHNNY
SINGARAM
First Respondent
THE
SHERIFF,
PINETOWN
Second Respondent
STANDARD
BANK
Third Respondent
JUDGMENT
CELE
J
Introduction
[1]
This is an application for the confirmation of a rule
nisi
granted by this Court on 2 December 2010. The applicant sought
to have an order issued basically in the following terms:
1.
Pending the outcome of the application the
third respondent, Standard Bank, are hereby interdicted and
restrained forthwith from
paying out of the fund held by it namely
R125 789.44 to any party pursuant to the warrant of execution
served upon them.
2.
An order was sought that it be ordered that
the third respondent retains the abovementioned funds in their
possession until final
determination of the matter.
[2]
The first respondent then filed his opposing papers on the very day
the matter was heard. It was only today that the applicant
filed its replying affidavit. The matter has been argued upon
by both parties and is now proceeding. It would appear
that the
facts are essentially common cause between the parties.
[3]
I may just thank Mr van Niekerk SC who appears for the first
respondent who has summarised the facts. I will follow that
summary as it has been conceded even at the very beginning of these
proceedings by both parties that the facts are essentially
common
cause between them.
Background
facts
[4]
The first respondent was employed by the Chantecler Hotel as a
barman. He was charged with an act of misconduct which
led to
his dismissal on 9 February 2005. That is about six years ago.
He then referred an unfair dismissal dispute
to the CCMA in which he
claimed that he wanted to be reinstated because of the unfair
dismissal. The hearing, that first
hearing, proceeded in the
absence of an employer and the award was then issued by Commissioner
Subramoney on 15 March 2005.
[5]
The employer brought an application for the rescission of the
arbitration award with success and that award was then set aside.
The matter was rescheduled for hearing. The employer in those
proceedings was then described as Chantecler Hotel and School
of Food
and Wine. In the affidavit filed in support of the application
the applicant was described as a partnership.
As I have
indicated rescission was then granted and it came before Commissioner
Sullivan on 12 July 2005. In that arbitration
the first
respondent’s employer was cited as Norbit Gram trading as
Chantecler Hotel. It would appear that during the
arbitration
hearing the legal representative for Mr Gram told the commissioner
that the respondent was Chantecler Hotel which at
the moment is owned
by Mr Nobit Gram.
[6]
At the end of the hearing the commissioner found for the first
respondent and ordered Mr Gram to pay the first respondent the
sum of
R18 000 in cash and also ordered him to reinstate the first
respondent. According to the first respondent he
tendered his
duties and on that day he found Mr Gram but Mr Gram walked away and
later he was not allowed to tender his services.
On the papers
again it would appear that according to the applicant there is an
issue about whether or not the first respondent
tendered his services
but that issue does not call for a decision by this Court.
[7]
The employer then filed an application to review the arbitration
award granted against it with no success. What then happened,
as the review application had been dismissed, was that the first
respondent sought to execute in terms of the arbitration award
issued
in his favour. The award was clearly issued in the names of Mr
Gram and not issued against the Chantecler Hotel CC
or the Chantecler
CC.
[8]
In the proceedings before me it is clear that Mr Gram has not been
cited as a party. I point this out specifically because
the
award was issued against him. As the matter was presented
before me I did pose a question to Mr van Niekerk as to
what
probably would have happened had the execution been made against the
account of Mr Gram in terms of the award and if one would
be sitting
with this matter. He referred me to a letter that was issued by
the employer’s organisation. It is
on page 63 of the
papers. It reads as follows:
“
Thank
you for the Court order and Arbitration Award forwarded to us by
normal post, received by us on 23
rd
October 2009. I must mention in the interim I have managed to
touch base with the owner of the Hotel one Mr Norbet Gram who
is
presently residing in Dubai. My instructions from him are that
he understands that he has to pay the R18 000.00 as
per the
Award, however, in terms of R3 000 per month, he has a problem
with this from the point of view that Johnny Singaram
at no point in
time ever tendered his services at the Hotel, in fact he has not
heard a word from Johnny since the Arbitration.”
[9]
Mr van Niekerk has argued that from the information that could be
gathered by the first respondent Mr Gram is not residing in
this
country and that any attempt to execute against his personal account
will clearly therefore be frustrated. He has in
his heads of
argument asked me to do or to apply the principle that is called a
piecing of the corporal veil and then to refuse
to grant the order
that is sought.
[10]
On the contrary the applicant argues that the simplest of the
procedures that could have been followed by the first respondent
would have been to apply for the joinder of Mr Gram in this case.
The applicant argues that Mr Gram is not before Court,
the applicant
cannot therefore be called upon to answer for his case because he has
not been given a chance to be heard in this
court.
[11]
I return then to the applicability of the principle lying in the
piecing of the corporal veil. I have been referred by
Mr van
Niekerk to the decision in
Shipping Corporation of India Ltd v
Evdomon Corporation 1994 [1] SA 550
with particular reference to
pages 565 and 566. The relevant portion starts with a reference
to the decision by INNES CJ in
that
Dadoo Ltd and Others v
Krugersdorp Municipal Council
1920 AD page 530 at 550 which reads
as follows:
“
A
registered company is a legal persona distinct from the members who
compose it. In the words of Lord MacNaghten (Salomon v Salomon
&
Co 1897 AC at p 51), 'the company is at law a different person
altogether from the subscribers to its memorandum; and though
it may
be that, after incorporation, the business is precisely the same as
it was before, and the same persons are managers, and
the same hands
receive the profits, the company is not in law the agent of the
subscribers or a trustee for them.' That result
follows from the
separate legal existence with which such corporations are by statute
endowed, and the principle has been accepted
in our practice. Nor is
the position affected by the circumstance that a controlling interest
in the concern may be held by a single
member. This conception of the
existence of a company as a separate entity distinct from its
shareholders is no merely artificial
and technical thing. It is a
matter of substance; property vested in the company is not, and
cannot be, regarded as vested in all
or any of its members.”
“
It
seems to me that generally it is of cardinal importance to keep
distinct the property rights of a company and those of its
shareholders
even where the latter is a single entity and that the
only permissible deviation from this rule known to our law occurs in
those
[in practice] rare cases where the circumstances justify
piecing or lifting the corporate veil. And in this regard it
should
not make any difference whether the shares be held by a
holding company or by a government. I do not find it necessary
to
consider or attempt to define the circumstances under which the
Court will piece a corporate veil. Suffice it to say that
they
would generally have to include an element of fraud or other improper
conduct in the establishment or use of the company or
the conduct of
its affairs. In this connection the words device, stratagem,
cloak and sham have been used.”
[12]
I have referred to the evidence of instances when the employer was
referred to as the Chantecler Hotel, in some instances Chantecler
Hotel CC. I have made reference to the employer being referred
to as Chantecler Hotel and School of Food and Wine but these
references do not appear to me to have been made use of in any
improper manner. There is nothing untowards that suggests
that
the use of these names was intended to frustrate any attempt at
hiding the actual true identity of the employer. I have
also
seen various documents in the file. One of them relates to the
professional reservation at a hotel. That shows
that the
employer had a Standard Bank account under the name Chantecler
Hotel. It is account number […….] which
is the
account against which execution is sought to be made.
[13]
I am unable to find as suggested in favour of the first respondent
that this is a case where the piecing of the corporate veil
is called
for. This is a case where the first respondent could easily
have attempted to execute against the account of Mr
Gram and if there
were any problems with that kind of execution then and only would one
begin to find that there might be a problem
on how the company was
operating because as we stand it may just very well be that Mr Gram
has all the property he needs in this
country against which execution
will be rendered. If the first respondent had any problems in
anticipation of a proper execution
one would have expected therefore
that the first respondent would have sought to amend the award so
that it be issued against what
he considers to be the true employer.
[14]
In my view this is not a case where the unveiling of the corporate
veil is called for. Therefore the application is dismissed.
[15]
Therefore:
1.
The Rule
nisi
is confirmed
2.
The first respondent is therefore called upon to pay the costs at
attorney and
client scale.
_________________
CELEJ
DATE
OF HEARING
: 7
February 2011
DATE
OF JUDGMENT
:
7
February 2011
APPEARANCES
FOR
THE APPLICANT
:
Adv Z
Oliver
Instructed
by
:
MACRITCHIE
ATTORNEYS
FOR
THE RESPONDENT
:
Adv G O
van Niekerk SC
Instructed
by
:
DERICK JAFTHA &
PARTNERS