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[2012] ZALCJHB 115
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South African Transport and Allied Workers Union and Another v Nationwide Airlines (Pty) Ltd and Another (JS 465/06) [2012] ZALCJHB 115; (2013) 34 ILJ 1612 (LC) (18 October 2012)
Reportable
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
Case no: JS 465/06
In the matter between:
SOUTH AFRICAN
TRANSPORT AND
ALLIED WORKERS’
UNION
...........................................................................
First
Applicant
MANAKA C & 88
OTHERS
........................................................................
Second
Applicant
and
NATIONWIDE AIRLINES
(PTY) LTD
..........................................................
First
Respondent
NATIONWIDE AIRCRAFT
SUPPORT (PTY) LTD
.................................
Second
Respondent
Heard: 26 July 2012
Delivered: 18 October
2012
Summary: Application
to substitute the first respondent with liquidators in terms of Rule
22(5) - Notice to be given to liquidators
in terms of the section
359(2)(a) of the 1973 Companies Act – notice not alleged in
founding papers – no substantive
application before court to
direct in terms of section 359(2)(b) of the 1973 Companies Act -
application dismissed.
__________________________________________________________________
JUDGMENT
BOQWANA AJ
Introduction
This is an interlocutory
application in terms of Rule 22(5) of the Rules for the Conduct of
Proceedings in the Labour Court (“the
Labour Court Rules”)
to substitute the first respondent (“Nationwide Airlines”)
with the liquidators of the
first respondent who are Izak Boshoff
(“Boshoff”), Michelle du Plessis (“du Plessis”),
Ralph Lutchman
(“Luchtman”), Eugene Januarie,
(“Januarie”) and Lebogang Moloto (“Moloto)
(“jointly known
as the liquidators”).
The application is
premised on the fact that the Nationwide Airlines was liquidated and
final liquidators were appointed. According
to the applicants, if
these two points are satisfied then an order substituting the
liquidators in the place of Nationwide Airlines
should be granted.
This application is
preceded by an application for condonation brought by the
liquidators for the late filing of their answering
affidavit.
Condonation application is opposed.
I must pause at this
point to mention that an order substituting Bennie Keevey and Frans
Langford of Commonwealth Trust in the
place and stead of the second
respondent (“Aircraft Support”) was granted by this
Court on 03 March 2010.
Brief facts
This case goes back to
July 2006 when the applicants filed a statement of case against
Nationwide Airlines and Aircraft Support
respectively in this Court
claiming to have been automatically unfairly dismissed by the
respondents, following a strike action
which they participated in.
The applicants also raised a number of other contentions which they
submitted infringed organisational
rights conferred in the Labour
Relations Act.
1
The true employment
relationship between the individual applicants and the first
respondent remains in dispute.
The respondents allege
that the reason for the dismissal of these applicants was that they
belonged to Aircraft Support and not
Nationwide Airlines, in
relation to whom the strike was held. Their participation in the
strike, according to the respondents
was therefore unprotected.
The respondents opposed
the matter raising various
points
in limine
including
lack of employment relationship between the individual applicants
and Nationwide Airlines and that the matter was not
referred for
conciliation in
respect
of Aircraft Support.
Whilst the matter was
still pending, Nationwide Airlines was provisionally wound up by an
order issued by the South Gauteng High
Court.
On 11 March 2009, the
applicants applied to this Court to substitute the respondents with
their liquidators. The application to
substitute Nationwide with its
liquidators was abandoned when it became apparent that their
appointment had not yet been made
final.
The issue now before the
Court is the substitution of liquidators in the place and stead of
Nationwide Airlines.
Condonation
application
It is trite that a party
seeking condonation from this Court must show good cause why such
condonation should be granted.
Degree of lateness
The liquidators filed
their answering affidavit on 05 May 2011, which was more than four
months late. Four months is clearly excessive
in the circumstances.
I,
accordingly,
disagree
with the liquidator’s assertion that the delay in filing their
opposing papers was short.
Explanation for the
delay
The reasons given for
the delay in filing the affidavit are that the persons appointed to
be liquidators are extremely busy people
and as such it is difficult
to get everyone together. The liquidators also allege that it has
been difficult to obtain instructions
in relation to the manner in
which this matter should be dealt with and to obtain confirmatory
affidavits from other liquidators.
It
has been made clear by this Court that offering an excuse that
people have a busy schedule can never be a sufficient reason
for the
delay.
2
It
baffles me that such excuses can be placed before Court as being
reasonable by any party.
Counsel
for the liquidators contented that it was difficult to get all the
liquidators together for purposes of making the decision
because
they are busy and they act for other companies.
He
went on further to say that none of the liquidators can make a
decision on their own,
they
have to reach consensus and if they do not then the matter would
have to be referred to the Master of the High Court (“the
Master”) to resolve any differences between them. Invariably
that is a process that takes time.
Whilst, I understand
that liquidators have to act together, there is no demonstration of
urgency on their part nor any tangible
steps presented before this
Court to show that attempts were made to get hold of the liquidators
and what obstacles were encountered
in doing so. There is also no
explanation offered to show that steps were taken to file opposing
papers as soon the liquidators
became aware that they needed to do
so. I also find no basis to support a view that liquidators must be
treated differently from
other litigants. The Rules of Court equally
apply to all litigants. There are those litigants who may have
circumstances or busy
schedules even more compelling than those of
the liquidators. I therefore cannot accept this explanation.
The second reason given
is that, in an attempt to avoid unnecessary litigation, parties
resolved to meet and ascertain whether
the matter could be resolved
amicably. The only meeting could only take place on 13 May 2011.
There is no indication that any
consent was sought from the
applicants to stay the matter pending finalisation of the alleged
settlement negotiations. There
is, further no sufficient detail to
demonstrate that any such meeting or possible settlement discussions
ever took place. I am
also not satisfied with that explanation.
It is now settled that
condonation will generally not be granted in the absence of an
acceptable explanation for the delay,
3
regardless of the good
prospects of success on the merits.
4
I see no reason why I
should deviate from this principle. The degree of lateness is in my
view excessive and the explanation given
by the liquidators is
hopelessly poor and no attempt has been made by the liquidators to
take this Court to their confidence
in their application for
condonation.
In the circumstances,
I will not allow the
answering affidavit as proper evidence before me. It follows,
therefore,
that the replying
affidavit, which is filed in response to the answering affidavit can
also not be taken into account. I do note
that the replying
affidavit contains somewhat elaborate facts than those contained in
the founding affidavit. I will however
not deal with that issue as I
have decided not to admit the answering affidavit.
Having said that,
Counsel for the
liquidators, submitted that in the event the court disallows the
answering affidavit, the liquidators would request
the court to
allow the liquidators to argue the matter on the applicants’
papers and on the law.
I see no reason why I
should not allow submissions on the law and on applicants’
papers as they stand.
Submissions
The applicants submit
that they have satisfied the requirements for an order of
substitution to be made in that liquidation has
taken place and
final liquidators that have been identified have been appointed.
Accordingly, they argue the court ought to grant
the order that is
sought.
The liquidators agree
that all proceedings can be brought against them in their official
capacity, however, they argue that there
is no sense in granting the
application sought by the applicants as the proceedings against
Nationwide Airlines are deemed to
be abandoned in terms of section
359 (2)(b) of the 1973 Companies Act. Further, proceedings that are
abandoned may only be pursued
after the applicants have made a
substantive application in terms of section 359(2)(b). In the
meantime, the proceedings remain
abandoned.
Section 359(1) of the
1973 Companies Act provides:
‘
(1) When the
Court has made an order for the winding-up of a company or a special
resolution for the voluntary winding-up of a company
has been
registered in terms of section 200 –
all civil proceedings by or against
the company concerned shall be suspended until the appointment of a
liquidator’
Section 359(2)(a)
provides:
‘
(
2)(a)
Every person who, having instituted legal proceedings against a
company which
were
suspended
by a winding-up, intends to continue the same . . . shall within four
weeks after the appointment of the liquidator give
the liquidator not
less than three weeks’ notice in writing before continuing or
commencing the proceedings.’
Section 359(2)(b)
provides:
‘
(b) If
notice is not so given the proceedings shall be considered to be
abandoned unless the Court otherwise directs.’
The liquidators submit
that an application in terms of section 359(2) (b) above must be
pursued by way of a substantive application.
The applicants however
have not only failed to bring a substantive application for an order
in terms of section 359(2)(b) of
the 1973 Companies Act, they have
also not made out a case in their founding affidavit and no order is
sought in their notice
of application.
The liquidators further
argue that whilst this Court can determine whether or not a notice
was given to the liquidators, it has
no jurisdiction to grant an
application in terms of section 359(2) (b) of the 1973 Companies Act
(application for a directive).
According to them, “Court”
means the Local or Provincial Division of the High Court, whose
jurisdiction is the registered
office or main place of business of
where the company in liquidation is situated. The definitions
sections of the 1973 Companies
Act provides as follows:
‘“
Court”,
in relation to any company or other body corporate, means the Court
which has jurisdiction under this Act in respect
of that company or
other body corporate, and, in relation to any offence under this Act,
includes a magistrate's court having jurisdiction
in respect of that
offence;’
The liquidators place
emphasis to ‘jurisdiction under this act’ and conclude
that the Labour Court does not have jurisdiction
under the Companies
Act. They argue that the Labour Court derives its jurisdiction from
section 157 of the LRA or any other law
where jurisdiction has been
specifically conferred and has no jurisdiction under the Companies
Act.
According to the
liquidators, if the applicants have no prospects of pursuing any
claim against the liquidators because of their
failure to serve the
notice, as the proceedings would have been deemed to have been
abandoned, it would serve no purpose for
them to be substituted.
Evaluation
The applicants contend
that the Court is not required to decide on whether or not the
requisite notice was given to the liquidators
at this stage. In
other words, a question of whether proceedings have been abandoned
will only become relevant when the trial
continues.
Rule 22(5) of the Labour
Court Rules reads as follows:
‘
If in any
proceedings it becomes necessary to substitute a person for an
existing party, any party to such proceedings may, on application
and
on notice to every other party, apply to the court for an order
substituting that party for an existing party and the court
may make
such order, including an order as to costs, or give such directions
as to the further procedure in the proceedings as
it deems fit.’
On its own Rule 22(5)
simply requires notice of the application to substitute to be given
to every other party before an order
can be granted. If one reads
Rule 22(5) on its own the applicants ought to be granted the order
of substitution but what about
the requirements of the 1973
Companies Act that I have referred to above. Can those be ignored or
must they be taken into account
in deciding on whether or not an
order to substitute the liquidators should be granted?
In other words must the
applicants bring evidence to show that the liquidators were properly
notified in terms of the section
359(2)(a) of the 1973 Companies
Act, prior to an order of substitution in terms of Rule 22(5) being
granted and if no such evidence
existed in the founding papers then
Rule 22(5) application under these circumstances would fail?
In my view the issue of
the notice in terms of the 1973 Companies Act is a legal requirement
which cannot be ignored by the Court,
regardless of when it is
raised. The Court must be satisfied that the requirements of section
359(2)(a) of the 1973 Companies
Act have been met, before it can
substitute the liquidators.
I therefore cannot agree
with the applicants that the issue only becomes relevant when the
trial continues. The issue has been
raised and the Court must deal
with it.
The applicants have
unfortunately failed to place any evidence in their founding papers
to show that notice was given to the liquidators
within 4 weeks of
their appointment in terms of section 359(2)(a) of the 1973
Companies Act. In this regard, the Court cannot
substitute the
liquidators when it has not been shown that they were duly notified.
With regards to the
requirements of section 359(2)(b) I am inclined to agree with
Counsel for the liquidators that the Court cannot
give a directive
that proceedings have not been abandoned as it is not faced with any
substantive application to do so. The Court
can only give such a
directive when a substantive application has been brought before it.
No such application has been brought.
I will not go into whether or
not this Court has jurisdiction to determine such an application.
I therefore conclude
that Rule 22(5) must in circumstances where an applicant seeks to
substitute a liquidator be read with the
relevant provisions of the
Companies Act. The Court must be satisfied prior to substituting
liquidators that a requisite notice
has been served on them in terms
of the Companies Act.
It is unfortunate that
the main action has been going on for six and a half years. It is in
the interest of all parties for this
matter to be brought to
finality as soon as practically possible. Regard, must be had to the
interest of the parties and particularly
the individual applicants
who have been waiting for over six years to get their matter
finalised. They have had to wait for the
winding up process to be
finalised. It would equally be in the interest of the liquidators
and creditors of both Nationwide Airlines
and Aircraft Support to
avoid protracted litigation.
It would not be in the
interest of justice to order costs against the applicants.
In the circumstances, I
make the following order:
The application to
substitute Izaak Johannes Boshoff, Michelle du Plessis, Ralph Farrel
Lutchman, Eugene Januarie and Lebogang
Moloto in the place and stead
of the first respondent is dismissed.
There is no order as to
costs.
__________________
BOQWANA AJ
ACTING JUDGE OF THE
LABOUR COURT
APPEARANCES:
For the applicants: Adv D
Smit
Instructed by: Cheadle
Thompson & Haysom Inc., Johannesburg
For the liquidators: Adv
H A Van der Merwe
Instructed by: Martins
Weir-Smith Inc, Sandton
1
Act
No.66 of 1995.
2
National
Construction, Building and Allied Workers Union v Masinga
(2000)
21 ILJ 411 (LC) at para
3
Nampak
Corrugated Wadeville v Khoza
(1999)
20 ILJ 578 (LAC);
Mziya v Putco Ltd
[2002] ZACC 30
;
[1999] 2 BLLR 103
(LAC);
Waverley
Blankets Ltd v Ndima and Others
(1999) 20 ILJ 2564 (LAC).
4
NEHAWU
obo Mofekeng and Others v Charlotte Theron Children’s Home
(2003) 24 ILJ 1572 (LC);
NUM v
Council for Mineral Technology
[1999] 3 BLLR 209
(LAC).