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[2012] ZALCJHB 144
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SA Solidarity Union and Others v Iliad Africa Trading (Pty) Ltd and Another (J1229/10; J1181/10) [2012] ZALCJHB 144 (17 February 2012)
Not Reportable
REPUBLIC OF
SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
case
no: J 1229/10 & J1181/10
In the matter between:
SA
SOLIDARITY UNION
.............................................................
1
ST
Applicant
JOHANNES MASEKANE AND OTHERS
.............................................
2
ND
Applicant
ALPHEUS MODISE AND OTHERS
.......................................................
3
rd
Applicant
and
ILIAD
AFRICA TRADING (PTY) LTD
.....................................
1
ST
Respondent
E.P.MALAN:
SHERIFF KEMPTON PARK
............................
2
ND
Respondent
Heard
:
31 January 2012
Delivered
:
17 February 2012
Summary: The applicants sought rescission of various orders of the
Labour Court and the first respondent sought winding-up of the
first
applicant in terms of section 104 of the Labour Relations Act. The
rescission application was dismissed with costs and consequently
the
order for provisional winding-up was granted.
JUDGMENT
BHOOLA J
Introduction
This is an application by the applicants to rescind certain costs
orders of this Court and to set aside a writ of execution issued
consequent to those, as well as an application by the first
respondent for winding-up of the first applicant.
It was not apparent from the notice of set down whether both
applications were enrolled for hearing. The parties addressed me
on
this issue and Mr Mphahlani, appearing for the applicants, submitted
that only the rescission application should be heard,
following
which a determination would have to be made by the parties as to
whether the winding-up application should proceed.
Mr Malan, for the
respondents, submitted that both applications had been enrolled and
should be heard simultaneously. He submitted
further that if the
rescission application should fail then this court would be required
to rule on the liquidation, but if the
rescission succeeded then the
liquidation would fall away. Since there was no prejudice to either
party, and both matters appeared
ripe for hearing (although the
applicants’ heads in the liquidation had only been filed
yesterday), I considered it to
be in the interests of justice to
proceed to hear both matters simultaneously. Accordingly both
applications are disposed of
in a single judgment.
Background facts
The second and third applicants (“the individual applicants”)
were at all material times employees of F & F Building
Supplies
and Ferreiras Hardware and Buildware Honeydew, both of which are
trading divisions of the first respondent. These entities
will for
purposes of convenience be referred to as the “trading
divisions”. The individual applicants were dismissed
following
unprotected strike action and associated conduct during a strike.
The first respondent obtained various orders from
this court arising
from the action. These orders were at no stage opposed by the first
applicant, and the first respondent proceeded
to issue a writ in
respect of the costs due and payable to it. The first applicant
sought to intervene for the first time at
the taxation of the bill
of costs, following which it brought this application for rescission
and variation of the Court orders
as well as a stay of execution.
The rescission and variation application
The applicants seek the following relief :
Rescinding case no. J1229/10 order dated 18 June 2010, case no.
J1229/10 order dated 28 July 2010, case no.J1181/10 order dated
22/07/10 and case no. 1181/order dated 19/08/10.
As an alternative to prayer 1 above :
Setting aside case no. J 1229/10 Writ of Execution, case no.J 1129/10
notice of attachment and case no. J 1229/10 inventory,
Varying paragraph 3 of case no. J 1181/10 costs order dated 22 July
2010 to read “the first respondent is ordered to pay
the costs
of this postponement”.
Ordering the first respondent to pay the costs of this application.
Further and alternative relief, including but not limited to: an
order varying paragraph 6 of case no. J 1229/10 costs order
dated
18 June 2010 to read: “the respondents are ordered to pay the
costs of this postponement jointly and severally,
the one paying
the other to be absolved”.
The applicants rely firstly on an
in limine
point that the
first respondent lacked
locus standi
to obtain the orders
granted in its favour by this Court. Therefore, it submits, all
orders obtained as a result were vitiated
by fraud and are therefore
void
ab origine.
The facts on which this submission is
premised is that the first respondent misrepresented to this Court
that it was the employer
of the second and third respondents. The
applicants have entered into collective agreements with the trading
divisions, which
are in fact the true employers of the individual
applicants, and which make no reference to the first respondent at
all. A further
submission advanced is that the Court orders and
subsequent writ, notice of attachment and inventory should all be
set aside
on the ground of fraud as there is proof that : “(a)
the company was a party to the fraud; (b) that the evidence was in
fact incorrect; (c) that it (sic) was made fraudulently and with
intent to mislead; and (d) that it diverged to such an extent
from
the true facts that the Court would, if the true facts had been
placed before it, have given a judgement other than that
which it
was induced by the incorrect evidence to give”.
The first respondent disputes the authority of the deponent to the
founding affidavit, Jack Chuma, to institute these proceedings.
This
was not addressed by the first applicant, which continued to rely on
an authority issued in regard to proceedings preceding
the
rescission and variation application. The application may be
dismissed on this ground alone; alternatively an appropriate
order
of costs may be made.
There does not appear to be any substance, either in law or fact, to
the submission that the proceedings were vitiated by fraud
and that
this constitutes a ground for rescission. The authorities relied
upon in the heads of argument by the first applicant
(which appear
to have been served and filed in May 2011 but which were not
available in the Court file as at the hearing of the
application),
moreover are distinguishable on the facts and law and do not assist
the first applicant. The first applicant moreover
specifically
disavows reliance on section 165 of the Labour Relations Act, 66 of
1995 (“the LRA”) and Rule 16A of
the Rules for the
Conduct of Proceedings in this Court. If regard is had to the time
periods and grounds for rescission stipulated
in the LRA and rule
16A, the application for rescission was hopelessly out of time and
made in the absence of condonation. In
these circumstances it is not
necessary to have regard to the merits and this Court is entitled to
dismiss this application on
the ground of the delay alone. However,
the application lacks merits from inception since the only ground
relied upon is that
the first respondent misled the Court into
granting the orders against the first applicant as it was not the
employer of the
individual applicants. This allegation is misplaced
and ill-founded in that F & F Building Supplies and Ferreira’s
Hardware and Buildware Honeydew are trading divisions of the first
respondent and its averments in this regard were met with a
bare
denial by the applicant. The applicant has not discharged the onus
of proving that the orders were obtained by fraud. It
appears that
various efforts were made by the first respondent to seek withdrawal
of the application on the grounds that it was
defamatory and
vexatious and had no merit, without success, and the first
respondent therefore seeks costs
de bonis propriis
against
both Chuma (arising from the lack of authority which has not been
addressed) and against the first applicant’s
attorneys for
their conduct in recklessly and vexatiously persisting with this
application. In my view costs on a scale as between
attorney and own
client would show the Court’s displeasure with the manner in
which the first applicant has conducted itself
in this application.
The section 104 application
Pursuant to an order granted in its favour by this Court the first
respondent caused a bill of costs to be taxed before the Taxing
Master of this Court on 25 October 2010. The
allocatur
for
this bill was in the sum of R31 160.23 (“the first
debt”). Pursuant to a further costs order granted by this
Court a second bill of costs was taxed by the first respondent on 11
November 2010, in respect of which the Taxing Master’s
allocatur
was R55 537.07 (“the second debt”).
The first respondent is therefore a creditor of the applicants as
referred to in
section 9(1)
of the
Insolvency Act, No 24 of 1936
1
.
During the taxation of the first bill the first applicant proposed
payment of the taxed bill in instalments but this was rejected
by
the first respondent. The first respondent then caused a writ to be
issued. The first applicant has consistently denied, up
to and
including at this hearing, that it is insolvent. Mr Mphahlani
submitted that it is in a position to pay its bills but
chose for
the purposes of convenience to make payment in instalments. When he
made this submission the Court adjourned the proceedings
to grant
the parties a further opportunity to pursue settlement of this
matter but this was to no avail. The applicants have
therefore
failed to make payment of the first debt.
In addition, the applicants have failed and /or neglected to make
payment of the second bill of costs (“the second debt”).
On account of the rescission application having been dismissed, both
the first and second debts constitute debts due and payable
to the
first respondent.
The writ in respect of the first debt was executed by the second
respondent and the first applicant was unable to satisfy the
first
debt. Moreover, despite demand for payment of the second debt, it
remains unsatisfied.
Re the taxed costs in J1181/10: the first applicant alleges that on
11 November 2010 the parties concluded a settlement agreement
in
terms of which all the applicants agreed to make payment of the
second bill (taxed costs in the sum of R55 537.07) in
monthly
instalments of R3000.00 commencing in November 2010. The first
applicant further alleges that the first respondent acted
in breach
of the aforesaid agreement by demanding immediate payment of the
full sum of R55 537.07. The existence of the
settlement
agreement is disputed by the first respondent and same has not been
produced in evidence. In respect of case no J
1181/10 the applicants
rely on a settlement agreement, the terms of which were that monthly
instalments of R10 000.00 would
be made and in this regard the
first applicant alleges that payment of such sums was made for
November 2010, December 2010 and
January 2011. It submits that the
first respondent is precluded from proceeding with the relief sought
since the settlement agreement
is still applicable. The first
respondent denies the existence of the settlement agreement as
alleged or at all.
Re the taxed costs J 1229/10: the applicants submit that the taxed
costs are not warranted in that the costs were not included
in the
rule nisi
confirmed by the Court. This is a matter for the
exercise of a discretion by the Taxing Master and is more properly
determined
on review of the Taxing Master’s
allocatur.
As such it is not before me, and it is suggested on the papers that
this issue has not been raised at any point prior to this
application. If the applicants
bona fide
disputed the
allocations then the proper course would have been to review this
allocatur
made by the Taxing Master. I am disinclined and in
any event do not have jurisdiction to interfere with the Taxing
Master’s
allocatur
on any other basis.
The first applicant denies that it is insolvent. No evidence is
adduced in support of this submission. Mr Mphahlani’s
tendering of evidence from the Bar to this effect was duly
disregarded. The inventory attached by the Sheriff is valued at
R2310.00.
Mr Mphahlani submitted that this excluded the wages and
salaries of the individual applicants which would have provided
sufficient
disposable property to satisfy the debt, and which the
applicant could have attached by way of garnishee order. This in my
view
amounts to a concession that the first applicant is unable to
pay the debts. He submitted that in this regard the failure to join
the individual applicants was fatal to the application, and this
submission lacks substance given that they are held in the relevant
order to be jointly and severally liable with the first applicant,
the one paying the other to be absolved. The fact that the
first
respondent chose not to proceed to attach the salaries of the
individual applicants implies that it is motivated by an
ulterior
purpose, to get rid of the union. Furthermore, Mr Mphahlani
submitted that a winding-up order was justifiable only where
the
Sheriff renders a
nulla bona
return and this is not the
situation
in casu
as the return simply states that there were
no further attachable assets. This cannot, he submitted, justify the
winding-up application.
Lastly, in regard to the settlement
agreement, Mr Mphahlani conceded that this was a verbal agreement
the terms of which were
that an offer of payment on terms was
proposed but this was rejected by the first respondent. Needless to
say in such circumstances
it is disingenuous, at the very least, for
the first applicant to rely on a settlement agreement.
Mr Mphahlani submitted that there is however a dispute on the facts
and if this is a
bona fide
dispute this Court can exercise
its discretion not to order the winding up. This does not appear to
be the case. The first applicant,
in its answering affidavit, fails
to deal with any of the facts relied upon by the first respondent in
the founding affidavit.
It simply relies on a bare denial. This does
not constitute an attempt to deal with the facts in dispute:
Wightman t/a JW Construction v Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at para 13. The first applicant has
moreover adopted a number of spurious technical defences as well as
legally flawed
arguments in its opposition of the application,
inter
alia
non-joinder of the individual applicants; that the first
respondent is not a creditor; that the first respondent could have
executed
against the individual applicants since they are jointly
and severally liable; that a
nulla bona
return should have
been rendered to justify a winding-up application. Lastly there is
the issue of the non-existent settlement
agreement. I do not propose
to deal with each of these objections save to state that they have
no merit whatsoever.
For the purposes of a
section 104
application this Court must simply
be satisfied that the requirements of the LRA have been met.
In
casu t
here are two costs orders; a demand for payment of this
debt has been made which remains unsatisfied; the applicant has
offered
payment on terms which was rejected by the first respondent;
and the Sheriff has rendered a return recording that there are
insufficient
assets to meet the debt. On the probabilities it would
appear that the first applicant is unable to pay its debts to the
first
respondent as envisaged in the
Insolvency Act, and
therefore
it would be justifiable that it be wound-up to protect the claims of
the first respondent. I am satisfied that the
first respondent has
complied with the requirements stipulated in the
Insolvency Act and
the order for provisional liquidation is therefore justified.
Costs
In exercising my discretion to award costs I had regard to
inter
alia
the late filing of the first applicant’s heads in the
rescission application(on the eve of the hearing), as well as the
conduct of the first applicant and its counsel in advancing
arguments that were neither factually or legally correct. The
exchange
between the court and applicants’ counsel is apparent
from the record and I do not intend to burden this judgment with a
repetition thereof. In addition, the applicants on 31 January 2011
delivered, without leave of this court, a “further answering
affidavit” which did not take the matter much further. As set
out above, the rescission and variation application is indeed
misconceived and vexatious and warrants an adverse costs order. As
Mr Chuma is not an individual party to the litigation I am
disinclined to order special costs against him, although there is no
reason why the first applicant should not bear these.
Order
In the circumstances, I make the following order:
The rescission and variation application is dismissed, with costs
on a scale as between attorney and own client, to be paid
by the
first applicant.
The application for provisional winding-up is granted, with costs
on a scale as between attorney and own client, to be paid
by the
first applicant.
_________________U Bhoola
Judge of the Labour Court of South Africa
APPEARANCES
APPLICANTS: L M Malan
Instructed by Fullard Mayer Morrison, Johannesburg
FIRST RESPONDENT: J Mphahalani
Instructed by Baloyi. Attorneys, Johannesburg
1
Applicable
in terms of
section 104
of the LRA which provides as follows :
104. Winding-up of trade unions or employer’s
organisations by reason of insolvency
Any person who seeks to wind-up a trade union or
employers’ organisation by reason of insolvency must comply
with the Insolvency
Act, 1936 (Act No 24 of 1936), and, for the
purposes of this section, any reference to the court in that Act
must be interpreted
as referring to the Labour Court”.