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[2012] ZALCCT 20
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February v Envirochem CC (C 433/2012) [2012] ZALCCT 20; (2013) 34 ILJ 135 (LC) (11 June 2012)
Reportable
Of
interest to other judges
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
case
no: C 433/2012
In the matter between:
R J FEBRUARY
Applicant
and
ENVIROCHEM CC
First Respondent
CHEMSMART CC
Second Respondent
Heard
:
8 June 2012
Delivered
:
11 June 2012
Summary:
Urgent application for specific performance –
plea of
lis alibi pendens.
Application not urgent. Dismissed
on urgency and merits.
JUDGMENT
STEENKAMP J
Introduction
The applicant, Ms February, is employed as a sales consultant by the
first respondent. She earns remuneration based on commission.
She
alleges that the respondent has unilaterally reduced her
remuneration and seeks an order for specific performance on an
urgent basis.
The respondents have argued, firstly, that the application is not
urgent. They also raised a specially plea of
lis alibi pendens.
And in any event, they argue, the applicant has not established a
clear right for the relief she seeks; she has an adequate
alternative remedy in the form of damages; and she is suffering no
irreparable harm.
Background facts
The applicant was employed by the first respondent from 1 March
2006. The contract of employment stipulates that:
“
As
remuneration for services rendered by the employee in terms of this
agreement the company shall pay her commission at the rate
as
specified in her letter of appointment, payable on the first day of
each month.”
The letter of appointment sets out the following:
“
As
discussed during the interview, your remuneration will be based on a
strict commission basis on total chemicals sales as per
specified
prices, excluding VAT.
Details of the commission
structure referred to above is [
sic
] as follows:
A price list = 10% commission on
VAT exclusive price.
B price list = 25% commission on
VAT exclusive price.
C price list = 30% commission on
VAT exclusive price.
The first respondent manufactures and sells detergents and
disinfectants. (The second respondent is a distributor and is not
the applicant’s employer. Where I refer to “the
respondent” or “the company” henceforth, it is
a
reference to the first respondent).
The applicant has primarily been responsible for selling a product
called “Triple X” to the City of Cape Town. The
three-tiered price list referred to comprises a band of prices
determining the commission to which the applicant is entitled.
The
respondent sells the same product (e.g. Triple X) to different
customers at different prices. For example, a big buyer like
the
City of Cape Town may buy the product at a discounted rate (tier A).
A small company may buy the same product at a higher
price (tier B
or C). If the sales consultant (such as the applicant) sells the
product at price A, she will earn 10% commission
on the (lower)
price. If she sells the same product at price B or C, she will earn
25% or 30% commission respectively.
The claim
The applicant alleges that, on 31 January 2012, the respondent
“unilaterally and without informing [her]” changed
her
commission on sales of Triple X from 25% to 18%. She relies on an
oral side agreement, concluded separately to her written
contract of
employment and letter of appointment, on 1 March 2006. In terms of
that agreement, she says, she would have the “sole
mandate”
to market Triple X and she would be paid 25% commission on sales.
The respondent disputes the existence of an oral side agreement.
According to it, the sales and commission structure is clear
–
as set out in the applicant’s letter of appointment –
and any payment of lower commission is in accordance
with that
three-tier structure. The applicant was not given the “sole
mandate” to market Triple X and the respondent
did not change
the commission structure. Where products are being sold at a lower
price than may have been the case historically,
lower commission
would be paid accordingly.
The application, albeit that the relief sought is for specific
performance, is in the form of a final mandatory interdict. The
applicant has to establish her case along with the requirements in
Setlogelo v Setlogelo.
1
The applicant did not file a replying affidavit. In terms of the
rule in
Plascon-Evans Paints (Pty) Ltd v Van Riebeeck Paints Ltd
2
I must accept the respondent’s version of the facts.
Jurisdiction
Ms
Steyn
, for the applicant, submitted that this court has
jurisdiction to entertain a claim for specific performance,
referring to
Fatima Abrahams v Drake & Scull Facilities
Management (SA) (Pty) Ltd.
3
Mr
Ackermann
, for the respondents, did not take issue with
the court’s jurisdiction, save to point out that the applicant
still had
to meet the requirements for the granting of a final
interdict. However, he raised a special plea of
lis alibi
pendens.
But first, the question of urgency.
Urgency
On the applicant’s own version, she was told of the alleged
unilateral reduction in her remuneration by way of commission
on 31
January 2012. One and a half months later, on 14 March 2012, she
referred a dispute in terms of s 64 of the Labour Relations
Act
4
to the National Bargaining Council for the Chemical Industry. At
that stage, she was already represented and advised by her attorneys
of record, Malcolm Lyons Brivik Inc – indeed, those attorneys’
contact details are provided on the referral form
to the bargaining
council. It appears that the dispute was then transferred to the
CCMA.
5
Conciliation failed and the conciliating commissioner issued a
certificate of outcome stating that the matter remained unresolved
on 13 April 2012. The applicant took advice from her attorneys and,
apparently on the strength of the judgment in
Drake & Scull
6
,
formed the view that she could not strike as envisaged in s 64
of the LRA. Yet she only brought this application – on three
days’ notice – on 5 June 2012.
7
The applicant explains that she “intended to bring this
application after the meeting of 7 May 2012.” That refers
to a
meeting convened at her request, where the respondent’s
Managing Director, Mr Peter Daley, told her “Triple
X was not
under discussion, as this matter was going to court.” That is
a reference to a pending High Court action, of
which I shall say
more shortly.
The applicant’s father sadly fell ill and passed away on 20
May 2012. The applicant was apparently granted compassionate
leave.
She returned to work on 28 May 2012 and launched this application a
week later.
The court has extended its condolences to the applicant and
expressed its sympathy with the loss of her father. However, that
sad event does not explain her inaction from the time the
certificate of outcome was issued on 14 April until at least 7 May
2012, other than reference to a letter of complaint that she wrote
on 4 May 2012; nor does it explain the lapse of time from
31 January
until 14 March 2012, when she referred a dispute to the bargaining
council.
The matter should be struck off the roll for lack of urgency even
when one has regard only to these time periods. But there is
a more
startling aspect to the matter.
The respondents brought it to the court’s attention for the
first time in their answering papers that the applicant’s
attorneys of record had raised issues very closely linked with the
current application with the respondent as long ago as October
2010.
In his letter of 11 October 2010, written on the instructions of the
applicant, Mr Brivik claimed that it had been agreed
that the
applicant would be the sole agent for Triple X; and that another
employee, Ms Yolanda Colli, was distributing the product
contrary to
that agreement. Mr Brivik claimed that the applicant derived most of
her commission from the sale of Triple X; and
asked for an
undertaking that the respondents would not pay any other sales agent
commission for sales of Triple X and that the
applicant would be the
sole beneficiary of commissions from sales to the City of Cape Town.
The respondent’s Daley denied
the existence of such an
agreement in a responding letter dated 5 November 2010.
The application is not urgent. But Mr
Ackermann
argued that
it should not simply be struck off the roll, as it would then not
lead to finality and the matter should be dealt
with once and for
all. This argument carries some weight, especially given the special
plea raised. I turn to that aspect.
Lis alibi pendens
The applicant did not disclose in her founding papers that an action
arising from very closely related subject matter is pending
between
the same parties in the Western Cape High Court.
On 30 June 2011, the applicant, represented by her attorneys of
record in this application, issued summons out of the Western
Cape
High Court, Cape Town, under case number 13099/11 against the same
respondents. As in the case before me, she purported
to rely on an
oral agreement between the parties concluded on 1 March 2006 in
terms of which she was allegedly appointed as the
sole agent to
market Triple X. She relied on the following “express,
alternatively tacit, alternatively implied, terms
of the said
agreement”:
“
6.1
Plaintiff would have the sole mandate to market the said product,
Triple X, for and on behalf of the defendants; and
6.2 Plaintiff would be paid
commission equivalent to 25% on the retail price at which the
product, Triple X, was sold by defendants
to its customers.”
She claimed that the defendants in the High Court action
(respondents in this application) were in breach of the agreement
and she claimed contractual damages.
In the current application, the applicant relies on the same alleged
agreement, stating that “the express, alternatively
tacit,
alternatively implied, terms of the agreement included
inter
alia
, the following”:
“
6.1 I
would have the sole mandate to market Triple X for and on behalf of
the respondents; and
6.2 I would be paid commission
equivalent to 25% on the retail price at which the product, Triple X,
was sold by respondents to
its customers.”
In this application, though, she seeks specific performance arising
from the alleged unilateral reduction in those commission
payments
rather than damages.
For a special plea of
lis pendens
to succeed, the two matters
before court must be based on the same cause of action and in
respect of the same subject matter.
Erasmus
8
states that the two actions need not be identical in form. The
requirement of “the same cause of action” is satisfied
if –
“
...the
other case necessarily involves a determination of some point of law
which will be
res
judicata
in the action sought to be stayed.”
In
Nestlé SA (Pty) Ltd v Mars Incorporated
9
the Supreme Court of Appeal stressed the need for finality in
litigation:
“
The
defence of
lis
alibi pendens
shares features in common with the defence of
res
judicata
because they have a common underlying principle which is that there
should be finality in litigation. Once a suit has been commenced
before a tribunal that is competent to adjudicate upon it the suit
must generally be brought to its conclusion before that tribunal
and
should not be replicated (
lis
alibi pendens
).
By the same token the suit will not be permitted to be revived once
it has been brought to its proper conclusion (
res
judicata
).
The same suit, between the same parties, should be brought only once
and finally.”
That requirement has not been satisfied in the case before me. The
pending High Court action – that the applicant did not
disclose – involves the same parties, the same issues of fact,
and the same cause of action arising from the alleged agreement
between the parties, albeit that the relief sought differs.
I am satisfied that the special plea should succeed. But even if I
am wrong, the applicant has not satisfied the requirements
for the
urgent and final relief that she seeks.
Clear right?
The applicant relies, not only on her written contract of employment
read with her letter of appointment, but also on a collateral
oral
agreement concluded on1 March 2006. The existence of such an
agreement was disputed by the respondent’s Daley in his
letter
to the applicant’s attorneys of 5 November 2010 and again in
his answering affidavit in these proceedings. The applicant
did not
reply. Based on the principles set out in
Plascon-Evans
10
,
I must accept the three-tier price structure and attendant
commission payments as explained by Daley. That explanation is also
consistent with the wording of the contract of employment read with
the letter of appointment.
The applicant has been aware of and has been working in accordance
with the commission structure, as explained by Daley, for
the past
six years. She has made out no case for her contention that she has
established a clear right that it would remain at
25% in perpetuity.
Irreparable harm?
The applicant has shown no proof of an injury actually committed or
reasonably apprehended. It may well be so that she is, in
fact,
earning less than before. No doubt this causes her hardship. But
that is how the commission structure works, and that is
what she
agreed to when she signed her contract of employment and those are
the terms under which she has worked for the past
six years. There
is no suggestion that the contract was entered into
in fraudem
legis
or is otherwise void or voidable; and the applicant has
not been able to prove the existence of an oral side agreement that
varies
the contract.
Alternative remedy
The applicant, as an individual employee, cannot rely on the
prescribed route of power play envisaged by s 64 of the LRA, having
initially referred a dispute under that section.
11
However, as her pending action in the High Court shows, the
applicant is not without a remedy. Even if she has a valid claim,
she can pursue a claim for damages – indeed, she is already
doing so. As the court held in
Wynne & Godlonton NN.O. v
Mitchell & another
12
:
“
An
interdict was refused where it was held that there was ‘an
equally effective, if not more effective, remedy available’
to
the applicant to obtain ‘the same result’ as would be
achieved by obtaining an interdict.”
An applicant for a permanent interdict must allege and establish on
a balance of probabilities that it has no alternative remedy.
And
the courts will not, in general, grant an interdict when the
applicant can obtain adequate redress by way of a damages claim.
In
this regard, Trengove J in
Erasmus v Afrikander Proprietary Mines
Ltd
13
referred with approval to the earlier
dictum
of De Villiers J
in
Lubbe v Die Administrateur, Oranje Vrystaat:
“
Daar
is geen bewyslas op ‘n respondent om enige feit of feite te
bewys om applikant se reg tot ‘n interdik te weerlê
nie.
En in ‘n geval soos die onderhawige waar ‘n permanente
interdik aangevra word by wyse van mosie – te meer
waar
applikant nie gevra het dat feite wat in geskil is by wyse van
viva
voce
getuienis
opgelos moet word nie – kan die aansoek slegs toegestaan word
indien die feite soos uiteengesit in respondent se
verklarings,
tesame met feite in applikant se verklarings wat deur respondent
erken word, die aansoek regverdig ... Die enigste
ander regsmiddel
war hier ter sprake is, is ‘n aksie vir skadevergoeding en die
vraag ontstaan of applikant op ‘n oorwig
van waarskynlikhede
bewys het dat so ‘n aksie, in die omstandighede van hierdie
saak, nie voldoende is om sy regte te beskerm
nie.”
In the application before me, the applicant has such a remedy and is
clearly aware of it, as she has already instituted a claim
for
damages against the respondents.
Conclusion
For all of these reasons, the application must fail. With regard to
costs, Mr
Ackermann
submitted that the applicant must be
visited with a punitive costs order, given that the applicant has
not disclosed the existence
of the pending High Court action.
Although I agree that costs should follow the result, I do not agree
that the applicant’s
conduct has been so egregious that it
warrants a special costs order.
Order
The application is dismissed with costs.
_______________________
AJ Steenkamp
Judge of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Adv MH Steyn
Instructed by Malcolm
Lyons Brivik.
RESPONDENTS:
Adv LW Ackermann
Instructed by Smith
Tabatha Buchanan Boyes.
1
1914
AD 221.
2
[1984] ZASCA 51
;
1984
(3) SA 623
(A)
3
[2012]
5 BLLR 434
(LC), [2011] ZACCT 30 (C1105/10), 11 November 2011.
4
Act
66 of 1995 (“the LRA”).
5
Why
and how this happened is not clear; nor even how it was possible, as
s 147(3) of the LRA provides for a matter to be transferred
from the
CCMA to a bargaining council with jurisdiction, but no reciprocal
power to transfer is to be found in the Act. Nothing
turns on this.
6
.supra.
7
The
application was first served on the respondents after hours on
Friday 1 June 2012 for hearing on Wednesday 6 June. A fresh
application was delivered on 5 June for this hearing on Friday 8
June 2012.
8
Erasmus,
Superior Court Practice
p B1-144.
9
2001
(SA) 452 (SCA);
[2001] 4 All SA 315
(SCA) para [16].
10
Supra.
11
See
the discussion in
Drake & Scull (supra).
12
1973
(1) SA 283
(E) at 295H, referring to
Draper v British Optical
Association
(1938) 1 All E.R. 115
(Ch. D.) and
Reserve Bank
of Rhodesia v Rhodesia Railways
1966 (3) SA 656
(SR).
13
1976
(1) SA 590
(W) at 965H.