SAMWU obo Members v Thaba Chweu Local Municipality and Another (J2106/2013) [2015] ZALCJHB 31 (11 February 2015)

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[2015] ZALCJHB 31
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SAMWU obo Members v Thaba Chweu Local Municipality and Another (J2106/2013) [2015] ZALCJHB 31 (11 February 2015)

REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT
OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case no: J 2106 /
2013
DATE: 11 FEBRUARY
2015
Reportable
In the matter
between:
SAMWU
...............................................................................................
First
Applicant
OBO
MEMBERS
.....................................................
Second
and
Further Applicants
And
THABA CHWEU LOCAL
MUNICIPALITY
...............................
First
Respondent
THE MUNICIPAL
MANAGER –
JOSEPH MISHACK
MNISI
........................................................
Second
Respondent
Heard: 15 October
2014
Delivered: 11
February 2015
Summary: Contempt
of Court – non compliance with Court Order – principles
of contempt stated and considered –
conduct not mala fide –
contempt of Court not shown – contempt application dismissed
Practice and
procedure – service of Court Order – principles
considered – proper service not shown
Rescission –
application is rescind default order – principles stated and
considered – rescission application
granted
Condonation –
condonation for late filing of rescission application –
principles stated and considered – condonation
application
granted
Rescission and
condonation – explanation provided considered – proper
explanation for failure and default found to exist
Prospects of
success – contention that agreement invalid or unlawful and
thus can be ignored – principled stated and
considered –
agreement and conduct remains valid and binding until applied for to
be set aside
Prospects of
success – does not require final determination of the merits –
case of applicant for rescission, if true,
provides proper defence to
compliance with agreement – if agreement invalid on grounds
raised there exists proper defence
– prospects of success shown
Practice and
procedure – determination of rescission on grounds deemed fit –
opportunity to file review application
granted – enforcement
stayed pending such review application
JUDGMENT
SNYMAN,
AJ
Introduction
[1]
This matter is unfortunately yet another illustration of the
unacceptable state of employment relations in the public service,
in
particular at the level of local municipalities. I have come across
several of these kinds of matters in my tenure at the Labour
Court
and more often than not, the reading provided by way of the pleadings
is distressing. And true to form, this case is one
of those. As an
opening remark, it is unfortunate that this Court must time and time
again become involved in trying to remedy
the mess that comes out of
dysfunctional municipalities. But, until there is competent
management at senior level in municipalities
and a relationship of
mutual respect, co-operation and trust between employees and trade
unions on the one hand and such municipalities
on the other, I am
afraid that the determination of these kind of needless applications
will be the lot in life for many a Labour
Court Judge.
[2]
Having said the above, I will now disembark my soap box and get to
grips with this matter. It all started in October 2013 with
an urgent
application by the applicants to enforce agreements concluded at the
first respondent and to stop the first respondent
from advertising
and filling certain positions, based on the contention by the
applicants that there was a failure by the first
respondent to comply
with the individual applicants’ contracts of employment, and
unlawful interference by the first respondent
with such contracts of
employment. The applicants obtained an order on an unopposed basis,
granting them the relief sought. What
then followed was a contempt
application by the applicants, a rescission application by the
respondents, various supplementary
affidavits and substitution
applications and multiple Court appearances. But ultimately, and on
20 May 2014, the matter came before
Shai AJ and the following order
was made by agreement between the parties:
‘
1.
Joseph Mishack Mnisi is substituted as the Second Respondent in the
contempt Application.
2.
The Contempt Application is postponed for argument to the 15 October
2014.
3.
The application in the rescission application is to serve and file
replying papers on or before 27 May 2014.
4.
The parties will file heard of argument in the rescission application
in terms of the practice manual.
5.
The rescission application is postponed for argument to the 15
October 2014.
6.
Costs reserved for argument on the 15 October 2014.’ (sic)
[3]
Therefore, when this matter came before me on 15 October 2014, I was
left to decide two applications; the first being the applicants’

contempt application and the second being the respondents’
rescission application. Fortunately, the background relating to
the
determination of both applications is the same and I will, therefore,
first set out what constitutes the common background
facts in this
matter.
Background facts
[4]
The first applicant is the representative trade union in the first
respondent and the individual applicants are its members.
The first
respondent is a municipality established under the Municipal Systems
Act
[1]
(‘the Systems Act’).
[5]
From the pleadings, it appears that there was a long standing dispute
between the applicants and the first respondent about
the proper
placement of the individual applicants in the first respondent. At
the heart of dispute is in essence the benchmarking
of the individual
applicants, in that they demanded to be placed in positions at the
proper grading level, commensurate to the
work that they are doing
and of course be remunerated accordingly. Also from the pleadings, it
appears that there were several
instances of unprotected strike
action by the individual applicants about this in the past, as well.
[6]
At the end of 2012/beginning 2013, the first respondent’s
municipal manager was one Burton Shole Koma (‘Koma’).
It
was common cause that on 5 December 2012, what was termed to be a
‘Settlement Agreement’ was concluded between the

applicant and the first respondent, with Koma entering into the
agreement on behalf of the first respondent (hereinafter referred
to
as ‘the agreement’). The salient terms of the agreement
were:
‘
1.
To finalize the placement of staff before the end of January 2013.
The commencement date for this agreement is 1 December
2012.
2.
The employer party will provide cost implications of the staff
movement as a result of the placement process.
3.
The employer party will in an absence of Job Evaluation of posts
benchmark against a municipality of a similar size.
4.
The employer party is committed to ensure that all factors around the
placement process are handled with objectivity and in good
faith.
5.
The parties agree that all negative and positive factors, comparison
with other municipalities as best practice will be taken
into
consideration.
6.
Should the Employer party fail to honour this agreement the employee
party will exercise its rights.
7.
All placement letters will be issued on the 3
rd
of January
2013.’ (sic)
[7]
How this agreement actually came about is in dispute. The respondents
contend that the issue of the placement of the individual
applicants
was serving before a placement committee in 2012, comprising all
relevant stakeholders and it was the function of this
committee to
facilitate discussion with the view to achieve consensus on how the
individual applicants should be placed in the
first respondent. The
idea was that the placement committee would prepare a report once its
work was completed and this would be
placed before the first
respondent’s council for deliberation and hopefully approval.
According to the first respondent,
when discussions deadlocked in
this placement committee, the individual applicants embarked upon
unprotected strike action on 5
December 2012 and simultaneously
disconnected water and electricity supplies to communities. The first
respondent contended that
the individual applicants refused to cease
their unlawful conduct unless their proposal before the placement
committee was accepted
and Koma, being left between a rock and a hard
place, then entered into the agreement, on 5 December 2012, under
coercion.
[8]
On the other hand, the applicants contend that all that transpired in
2012 and leading up to the conclusion of the agreement
on 5 December
2012 was wage negotiations. These wage negotiations were successfully
concluded, leading to the agreement. The applicants
say that Koma was
never coerced to conclude the agreement.
[9]
The aforesaid is, however, not the only issue relating to the
agreement. A further controversy is whether Koma had the authority
to
conclude the agreement in the first place. According to the first
respondent, Koma was never authorised by the first respondent’s

Council to enter into the agreement, which was required, and as such
he concluded the agreement without the requisite authority.
This
meant, according to the first respondent, that the agreement is
invalid and unenforceable. According to the applicants, on
the other
hand, Koma was authorised to conclude the agreement in terms of the
powers delegated to him by law and as such, the agreement
is valid
and binding. I will specifically deal with this issue later in this
judgment.
[10]
The individual applicants were indeed then issued with placement
letters by Koma in terms of the agreement but only on 11 January

2013. In terms of these placement letters, the individual applicants
were all appointed into new and higher level positions, with
a
commensurate increase in salary and benefits. It is clear that these
increases in salary and benefits would place a substantial
further
financial burden on an already struggling municipality that was, as
from the end of 2012, desperately seeking to reduce
costs.
[11]
It is common cause that Koma did not honour these appointments made
pursuant to the settlement agreement and the placement
letters. The
first respondent contends that it was actually entitled not to honour
the same, as the settlement agreement was unlawfully
concluded and as
such, the appointments were equally unlawfully made. This argument
will be discussed further later.
[12]
On 3 April 2013, the individual applicants again embarked on an
unprotected strike to compel Koma to comply with the appointments

made. On this occasion, Koma proceeded to issue an ultimatum,
threatening dismissal of the individual applicants. The affidavits,

unfortunately, do not say what the outcome of this ultimatum was and
at what point did the individual applicants cease their strike

action.
[13]
The next event in the chronology is a referral of a dispute to the
bargaining council by the applicants, citing the dispute
as one of
‘mutual interest’. The dispute was set down for
conciliation on 15 May 2013 and in fact settled on that date
on the
basis that the first applicant unconditionally withdrew the dispute.
[14]
In the interim, in April 2013, Koma was dismissed by the first
respondent and Mr S D Maebela (‘Maebela’) was appointed

as the acting municipal manager. According to the first respondent,
one of the reasons for the dismissal of Koma was the unlawful

conclusion of the December 2012 settlement agreement and consequent
January 2013 appointments made by him.
[15]
Following the appointment of Maebela, he was advised by the executive
mayor of the first respondent that the council never
approved the
settlement agreement concluded by Koma, and the appointments made by
him. Having been so advised, Maebela equally
did not honour the
agreement and appointments and proceeded to advertise all the vacant
posts in the first respondent in terms
of the first respondent’s
recruitment policy.
[16]
The advertising of the positions by Maebela then sparked the urgent
application by the applicants, brought on 3 October 2013
only against
the first respondent, which was set down on 8 October 2013. It is
common cause that, at the time, the application
was never opposed by
the first respondent. On 8 October 2013, Van Niekerk J, on an
unopposed (default) basis, granted a final order
in the following
terms:
‘
1.
The failure by the respondent to act in terms of the individual
applicants’ contracts of employment, effective from the
1
st
of December 2012 is unlawful;
2.
The conduct of the respondent in interfering with the individual
applicants’ contracts of employment by advertising for
and
interviewing persons to fill some of the positions in which the
individual applicants are incumbent and in failing and/or refusing
to
desist from such conduct in relation to the individual applicants is
unlawful;
3.
The respondent is ordered to:
3.1
comply with the individual applicants’ contracts employment;
3.2
Make immediate payment of all monies owed to the individual
applicants in terms of their contracts of employment, together with

interest calculated at the prescribed rate of interest, less any
lawful deductions;
3.3
Make immediate payment of the employer and employee contributions to
the individual applicants’ Pension and Medical Air
funds and of
the housing subsidy where relevant, retrospectively to the 1
st
of December 2012.
4.
The respondent is interdicted and restrained from conducting itself
unlawfully in interfering with the individual applicants’

contract of employment by inter alia advertising and interviewing
prospective employees for any of the positions in which the
individual applicants are incumbent.’ (sic)
[17]
The order granted by Van Niekerk J on 8 October 2013 was properly
served on the first respondent on 15 October 2013. It is
undisputed
that the order was not complied with when served on the first
respondent. Despite the order not being complied with,
it is clear
that the first respondent must have sought legal assistance once the
order was served on it. This is evident from the
fact that on 12
November 2013, the first respondent’s attorneys wrote to the
applicants’ attorneys and stated that
they had been instructed
to note either an appeal or rescission; and that they needed time to
obtain the pleadings (which these
attorneys did not have) so as to
act on these instructions. On 14 November 2013, the applicants’
attorneys answered that
they would proceed with a contempt
application and that no indulgence would be afforded. This contempt
application was then brought
on 19 November 2013 and set down for 6
December 2013. The contempt application cited Koma as the municipal
manager and the second
respondent, in his representative capacity.
[18]
The contempt application was dealt with
ex parte
and on 6
December 2013, Cele J granted the following order:
‘
1.
The second Respondent, the Municipal Manager of the first Respondent,
Burton Shole Koma is to appear in the Labour Court on the
12 February
2014 to show cause why he should not be found guilty of contempt of
court for failing to comply with the order of this
court dated 08
October 2013.
2.
The second Respondent is to explain its conduct by way of affidavit
on the date of the hearing or before that date (although
this will
not excuse them from being present in court).
3.
The second Respondent is found is found guilty of contempt for
failing to appear in court despite being properly served to provide

and explanation to the satisfaction of the court.
4.
The second Respondent is to be incarcerated for such period as the
Court deems appropriate, or is to be fined in an amount the
court
deems appropriate, or other alternative relief.
5.
The service of this order is be effected personally on the second
Respondent, the first Respondent’s Municipal manager,
Burton
Shole Koma.’ (sic)
At
the time when this order was granted, Koma had, however, long since
been dismissed (in April 2013). As a result, this order was
never
personally served on Koma.
[19]
It does not appear from the pleadings when this order of Cele J was
served on the first respondent but it must have been, because
on 11
February 2014, the day before the 12 February 2014 appearance date
reflected in the order the first respondent’s attorneys

formally entered the fray. Firstly, an explanatory affidavit was
filed to explain the conduct of the first respondent as directed
by
the order of Cele J which affidavit recorded that Koma was no longer
employed by the first respondent and that the first respondent
itself
was simultaneously filing an application for the rescission of the
order of Van Niekerk J granted on 8 October 2013. The
first
respondent then indeed also filed the rescission application on 11
February 2014.
[20]
The matter then came before Basson J on 12 February 2014 and the
following order was granted:
‘
1.
The Second Respondent, Burton Shole Koma, is substituted with the
Third Respondent, Nkathi Godfrey Nkosi, as a party in these

proceedings.
2.
The contempt application instituted against the Second Respondent,
Burton Shole Koma, under the above case number is applicable
to the
Third Respondent, Nkathi Godfrey Nkosi, as if he were a party to the
proceedings from the commencement thereof and all steps
validly taken
prior to the delivery of this notice shall continue to be of full
force and effect.
3.
The order dated 6 December 2013 is extended to 16 April 2014.
4.
The Applicant is ordered to re-serve the order of 6 December 2013 on
the First and Second Respondents (as substituted in terms
of this
order).’
[21]
On 11 April 2014, Nkosi, who was substituted for Koma as a second
respondent by way of the order of Basson, J on 12 February
2014,
filed his own explanatory affidavit. On 16 April 2014, the
applicants’ attorneys filed a replying affidavit to the

respondents’ explanatory affidavits in the contempt proceedings
and an answering affidavit to the first respondent’s
rescission
application, all in one affidavit.
[22]
The matter then came before Molahlehi J, on 16 April 2014, who
postponed it to 20 May 2014 to the opposed roll.
[23]
A flurry of further affidavits followed. On 16 May 2014, the first
respondent filed a replying affidavit to the applicants’

answering affidavit in its rescission application. This prompted a
supplementary affidavit by the applicants on 20 May 2014, followed
by
a supplementary replying affidavit by the first respondent filed on 4
June 2014. And in the interim, on 20 May 2014, the matter
came before
Shai AJ who made the order referred to above and all this then came
before me for final determination, which I shall
now proceed to do.
The contempt
application
[24]
Pursuant to the order of Shai AJ, I will firstly determine the
contempt application of the applicants. Fortunately, it can
be
disposed of with relative ease. The simple truth is that for the
reasons that follow, the respondents simply cannot be in contempt
of
Court.
[25]
In deciding this issue, the actual principles relating to the
determination of contempt applications must first be established.
An
applicant
in a contempt application has the onus to prove the existence of
contempt and, in discharging this onus, the applicant
must show this
existence of contempt of Court beyond reasonable doubt.
[2]
[26]
The actual test to determine whether contempt indeed exists was dealt
with in
Fakie
NO v CCII Systems (Pty) Ltd
[3]
where the Court said:
‘
The test for
when disobedience of a civil order constitutes contempt has come to
be stated as whether the breach was committed deliberately
and
mala
fide
. A deliberate disregard is not enough, since the
non-complier may genuinely, albeit mistakenly, believe him or herself
entitled
to act in the way claimed to constitute the contempt. In
such a case, good faith avoids infraction. Even a refusal to comply
that
is objectively unreasonable may be
bona fide
(though
unreasonableness could evidence lack of good faith). These
requirements - that the refusal to obey should be both wilful
and
mala fide
, and that unreasonable non-compliance, provided it
is
bona fide
, does not constitute contempt - accord with the
broader definition of the crime, of which non-compliance with civil
orders is a
manifestation. They show that the offence is committed
not by mere disregard of a court, but by the deliberate and
intentional
violation of the court's dignity, repute or the authority
that this evinces.'
[27]
Therefore, in terms of the ratio in
CCII
Systems
,
for this Court to be satisfied that a respondent, in a contempt
application, is indeed in contempt of Court, the Court must be

satisfied beyond reasonable doubt that: (1) there was a refusal to
comply with the order; (2) this refusal was willful (deliberate);
and
(3) the deliberate refusal to comply must be mala fide, in other
words there must be a complete absence of any kind of
bona
fide
justification for the refusal to comply (even if this justification
relied on is ultimately found to be objectively unreasonable
or
unsustainable). Crystalised down to its simplest terms, a respondent
is in contempt where the respondent knows and understands
the terms
of the order and what is required to be done to comply with the order
but then without any cause or justification deliberately
does not
comply. This is what the Labour Court in fact held in
National
Union of Mineworkers and Others v B K H Mining Services CC t/a
Dancarl Diamond Mine and Others,
[4]
where
it was said:
‘…
.
What must be proved according to that standard is: (a) that an order
of court was granted against the respondents, (b) that the

respondents were aware of the order and its terms, (c) that the
respondents were in fact in breach of the order and, if so, (d)
that
their failure to comply with the order was wilful.
’
[28]
The Court in
CCII
Systems
added
another dimension to the contempt enquiry, where the Court said:
[5]
‘…
.
But once the applicant has proved the order,
service or notice, and non-compliance, the respondent bears an
evidential burden in
relation to wilfulness and
mala
fides
: Should the respondent fail to
advance evidence that establishes a reasonable doubt as to whether
non-compliance was wilful and
mala fide
,
contempt will have been established beyond reasonable doubt…
’
Thus, in a contempt
application, it is the respondent that must provide evidence to the
Court that even though it did not comply
with the order, the
respondent’s non compliance was not wilful and/or
mala fide
.
It is, therefore, not just all up to the applicant to prove contempt.
[29]
Where the person against whom the order was made is a corporate
entity or statutory body, the applicant in a contempt application

must show that the relevant proprietors, members, functionaries or
directors had actual knowledge of the order, by way of the fact
that
the order was served on such person(s), compliance was demanded and
that it was such person(s) now brought before Court that
were then
responsible for non compliance. In
Twentieth
Century
Fox Film Corporation and Others v Playboy Films (Pty) Ltd and
Another,
[6]
the Court said:
‘
A
director of a company who, with knowledge of an order of Court
against the Company, causes the Company to disobey the order is

himself guilty of a contempt of Court. By his act or omission such a
director aids and abets the Company to be in breach of the
order of
Court against the Company. If it were not so a court would have
difficulty in ensuring that an order
ad
factum praestandum
against a company is
enforced by a punitive order. ….
’
The point is that
despite the order not being made against the individual person that
is the requisite functionary of the corporate
entity against which
the order was indeed made, that individual person can nonetheless be
in contempt of Court in his or her capacity
as such functionary,
where it is shown that such person was responsible to ensure
compliance by the corporate entity and caused
such entity to disobey.
[30]
The Court,
in
Muthwa
and Others v Allifa Spices,
[7]
specifically dealt with the issue as to when orders have made been
made against corporate entities, and said, with specific reference
to
contempt proceedings:
[8]
‘…
.
then these proceedings must be brought with proper regard to the
provisions of
s 332
of the
Criminal Procedure Act 51 of 1977
.
Those
provisions appear frequently to be ignored in contempt proceedings
brought in this court….
’
The Court then
proceeded to set out in details the provisions of
section 332
, with
particular reference to subsection (2), which reads:
‘
In
any prosecution against a corporate body, a director or servant of
that corporate body shall be cited, as representative of that

corporate body, as the offender, and thereupon the person so cited
may, as such representative, be dealt with as if he were the
person
accused of having committed the offence in question….
’
The
Court concluded that the person in his representative capacity must
be joined to the proceedings in that capacity. I agree with
the above
reasoning.
[31] Accordingly,
where a contempt application is brought in respect of an order made
against a corporate entity or statutory body,
it is important to cite
the relevant functionaries of such entity or body that is responsible
to ensure compliance with such an
order, as a party to the contempt
proceedings in the capacity of representative of the entity or body,
and not personally.
[32]
When the functionary of the corporate entity or statutory body is
then actually cited in the contempt proceedings in the capacity
as
representative of such entity or body and where the original order
has only been granted against the entity or body, there is
another
obstacle in the way of this cited functionary being able to be
competently held to be in contempt of court in the event
of non
compliance with the order. In
Minister
of Health and Another v Bruckner,
[9]
the Court said:
‘
In
the present case, the Department of Health was cited as the employer
party in the arbitration proceedings and the arbitration
award (which
was made an order of the Labour Court) ordered that department to
reinstate Ms Brückner.
No order was
then made against the
minister
or the director-general
, as being the
persons capable of bringing about the reinstatement of Ms Brückner,
to do whatever was necessary to achieve
that purpose. In my view,
what Ms Brückner ought to have done was to have applied for a
mandamus compelling the minister and/or
the director-general to take
the steps necessary to effect her reinstatement as Deputy-Director:
Medicines Registration. Without
first obtaining such a mandamus it
was not, in my view, competent for Ms Brückner to seek an order
for the committal of the
minister and the director-general to gaol
for contempt of court.
’
Even
accepting that the evidence shows that the cited functionary was at
all times fully responsible to ensure compliance with the
order by
the entity or body against which it was made, it still does not take
the issue of being in contempt any further. As the
Court concluded in
Bruckner
:
[10]
‘
Ms
Brückner's counsel relied heavily on the fact that in the
contempt proceedings in the court a quo the appellants were cited
by
name in the body of the founding affidavit and upon the admission by
the appellants in the court a quo of para 26 of Ms Brückner's

founding affidavit in which she alleged that: “The second and
third respondents are the functionaries who are responsible
to ensure
compliance by the first respondent, with the court order.' What Ms
Brückner's counsel's submissions overlook is
the fact that the
citing of the appellants by name first took place in the contempt
proceedings. Furthermore, whilst the admission
by the appellants that
they are the functionaries who are responsible to ensure compliance
by the department with the court order,
would obviously have been
relevant in an application brought against those parties for a
mandamus, the admission alone could not
have rendered the appellants
guilty of contempt of an order which was not made against them
personally.
’
What the above
simply means is that before an applicant, in a contempt application
where an order was made against a corporate entity
or statutory body
only and then not complied with, starts down the road of the contempt
proceedings, that applicant should first
seek to identify the
functionaries responsible to ensure compliance with that order, and
first bring an application to compel such
functionaries to take
whatever steps are necessary and required to bring about compliance
with the order. Only if, despite being
so compelled, the order is
still not complied with, then there should be no difficulty in
holding the functionaries to be in contempt
of Court.
[33] Therefore, in
summary, for an applicant in an application for contempt of court to
succeed in such an application, the Court
must be satisfied of the
following:
33.1 The order must
have been granted against the person sought to be held in contempt;
33.2 The order has
been properly served on the person against whom it has been made;
33.3 The person must
aware of the terms of the order and what must be done to comply with
the order;
33.4 In the case of
an order granted against a person that is a corporate entity or
statutory body, the functionaries responsible
to ensure compliance
with the order must first have been compelled to take reasonable
steps to ensure compliance with order by
such entity or body and
still there has been no compliance. Such functionaries must then also
be cited as parties to the contempt
application in the capacity as
representative(s) of such entity or body;
33.5 The person
against whom the order was made has refused to comply with the order;
33.6 The refusal to
comply with the order must be wilful or deliberate; and
33.7
The refusal to comply with the order must be
mala
fide
, meaning
there must be a
complete absence of any kind of
bona fide
justification for
the refusal to comply.
[34]
Applying the above principles to the facts
in casu
, the
applicants fall short in several respects, in establishing the
existence of contempt of Court, which respects I will now set
out.
[35]
The first problem that I have is with service of the order. Whilst I
am satisfied that the order of 8 October 2013 was properly
served on
the first respondent, I am not satisfied that the order was served on
a functionary responsible to ensure compliance
with the order. It
appears from the pleadings that the applicants were pursuing Koma to
procure compliance with the order but Koma
had left in April 2013,
some six months before the order was granted. Finally, on 20 May
2014, when the current municipal manager
Joseph Mnisi was substituted
as the second respondent, there is no evidence that the order was
actually served on him personally
with a demand for compliance.
[36]
Secondly, and more importantly, the order of 8 October 2013 was made
against the first respondent only. With the first respondent
being a
statutory body in the public service, the applicants should have
first brought proceedings against the responsible functionaries
to
take reasonable steps to ensure that the order be complied with by
the first respondent. In fact, in the contempt application
filed on
19 November 2013, the applicants seek an order committing Koma to
prison when no order was ever made against him, he was
never
compelled to ensure compliance with the order by the municipality
once the order was made, and finally, he was not even employed
at the
municipality when the contempt application landed. In my view, the
facts of the matter
in
casu
illustrate precisely why the prior proceedings compelling compliance
are so important before just resorting to a contempt application

seeking imprisonment of an individual person. Even though Mnisi, as
the current municipal manager and proper functionary, has now
been
joined in the proceedings before me and is the person indeed
responsible to ensure compliance, the application of the ratio
in
Bruckner
[11]
means that even this cannot assist the applicants and there is still
no order against Mnisi and no attempt to compel him to take

reasonable steps to ensure the first respondent complies with the
order.
[37]
Thirdly, whilst it is true that has been said in pleadings in no
uncertain terms, on behalf of the first respondent, it would
not
comply with the order and with this meaning that there exists a
refusal to comply which is willful. I am not satisfied that
the
refusal to comply was
mala
fide
.
This is not a case of the first respondent showing a deliberate and
intentional violation of the Court's dignity, repute or authority
as
referred to in the judgment of
CCII
Systems.
[12]
The first respondent has also not sat idly by and let the applicants
languish in frustration and unfulfillment whilst the first
respondent
procrastinates and does not even indicate why it does not comply and
what it intends to do about the order. The first
respondent (though
its attorneys) have said even prior to the filing of the contempt
application that it would seek rescission
of the order. The first
respondent then applied for rescission. For the purposes of avoiding
being held in contempt, I must just
be convinced that this rescission
application is
bona
fide
and considering all the issues raised therein. I accept this to be
the case. Accordingly, at the point of the contempt application
now
coming before me for final determination, there actually exists a
proper and
bona
fide
rescission application in which the first respondent seeks rescission
of the order granted on 8 October 2013, which was indeed
granted on
an unopposed basis. I conclude that the first respondent has
discharged the evidentiary burden on it to show that its
conduct is
not
mala
fide
,
as it has brought a proper and
bona
fide
rescission application.
[13]
[38]
In short, the applicants’ contempt application falls to be
dismissed for want of proper service of the order, for failing
to
first compel the proper functionaries to take reasonable steps to
comply with the order and lastly, due to the fact that the
first
respondent’s refusal to comply was not
mala fide
.
The rescission
application
[39]
Pursuant to the order of Shai AJ I have referred to above the first
respondent’s rescission application is also before
me for
consideration. It is now properly opposed by the applicants. There is
also an issue with regard to condonation for the late
filing of the
rescission application. In the consideration of this rescission
application, I will firstly start with the applicable
legal
principles in deciding such an application.
[40]
In
Builders
Trade Depot v Commission for Conciliation, Mediation and Arbitration
and Others
[14]
it was said that ‘It is so that not only judgments (or awards)
granted by default can be rescinded….’
In
casu
,
that is indeed the case. The order by Van Niekerk J on 8 October 2013
was indeed granted on a default basis. Rescissions in the
Labour
Court are regulated by
Rule 16A
,
[15]
which provides that orders granted by default can be rescinded by the
Court on good cause shown on terms the Court may deem fit.
[41]
As to what is contemplated by ‘good cause’, the Court in
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others,
[16]
explained the requirements of good cause thus:
‘…
.
The
civil courts have always retained discretion to grant rescission of a
judgment on good cause shown. In
De Wet
and Others v Western Bank Ltd
1979 (2)
SA 1031
(A) at 1024F Trengove AJA explained the position as follows:
“
Thus,
under the common law, the Courts of Holland were, generally speaking,
empowered to rescind judgments obtained on default of
appearance, on
sufficient cause shown. This power was entrusted to the discretion of
the Courts. Although no rigid limits were
set as to the circumstances
which constituted sufficient cause (cf examples quoted by
Kersteman
(op cit sv
defaillant) the Courts
nevertheless laid down certain general principles, for themselves, to
guide them in the exercise of their
discretion. Broadly speaking, the
exercise of the Court's discretionary power appears to have been
influenced by considerations
of justice and fairness, I having regard
to all the facts and circumstances of the particular case. The onus
of showing the existence
of sufficient cause for relief was on the
applicant in each case, and he had to satisfy the court,
inter
alia
, that there was some reasonably
satisfactory explanation why the judgment was allowed to go by
default…”
’
The
Court concluded:
[17]
‘
The test for
good cause in an application for rescission normally involves the
consideration of at least two factors. Firstly, the
explanation for
the default and, secondly, whether the applicant has a prima facie
defence. In
Northern
Province Local Government Association v CCMA and Others
(2001)
22
ILJ
1173
(LC);
[2001] 5 BLLR 539
(LC) at 545 para 16 it was stated:
"An applicant
for the rescission of a default judgment must show good cause and
prove that he at no time denounced his defence,
and that he has a
serious intention of proceeding with the case. In order to show good
cause an applicant must give a reasonable
explanation for his
default, his explanation must be made bona fide and he must show that
he has a bona fide defence to the plaintiff's
claims."’
[42]
Similarly and in
Superb
Meat Supplies CC v Maritz,
[18]
it was held as follows:
‘
The
applicant must give a reasonable explanation of his default; his
application must be made
bona fide
;
he must show that he has a bona fide defence to the plaintiff's
claim. This needs to be shown
prima
facie
only and it is not necessary to
deal fully with the merits of the case or to prove the case. It is
sufficient to set out facts
which, if established at the trial, would
constitute a good defence. The defence must have existed at the time
of the judgment.
In
determining whether or not good cause has been shown, the court is
given a wide and flexible discretion in terms of
rule 31(3)(b).
When
dealing with words such as 'good cause' and 'sufficient cause' the
Appellate Division has refrained from attempting an exhaustive

definition of their meaning in order not to abridge or fetter in any
way the wide discretion implied by these words. The court's

discretion must be exercised after a proper consideration of all the
relevant circumstances.
’
[43]
In short, and for me to decide that good cause indeed exists for
rescission to be granted, I have to be satisfied that the
first
respondent has provided a reasonable explanation for not opposing the
applicants’ application of 3 October 2013. I
further have to be
satisfied that at least on a
prima facie
basis, the first
respondent has a
bona fide
defense to the applicants’
application, simply meaning that if this defense was shown to be
true, it would defeat the applicants’
application. And overall,
I have to mindful of considerations of justice and fairness to both
parties.
Condonation
[44]
In terms of
Rule 16A
, a rescission applicant must bring the
application within 15 days’ of becoming aware of the order. The
evidence shows that
the order was served on the first respondent on
15 October 2013. This means that the first respondent’s
rescission application
had to be served and filed by 5 November 2013.
It was only filed on 11 February 2014 and is thus more than three
months’
late. Condonation is therefore required.
[45]
Where it comes to deciding condonation application, the law in this
regard is well settled and laid out clearly in the case
of
Melane
v Santam Insurance Co Ltd
[19]
as follows
:
‘
In
deciding whether sufficient cause has been shown, the basic principle
is that the Court has a discretion, to be exercised judicially
upon a
consideration of all the facts, and in essence it is a matter of
fairness to both sides. Among the facts usually relevant
are the
degree of lateness, the explanation therefor, the prospects of
success and the importance of the case. Ordinarily these
facts are
interrelated, they are not individually decisive, save of course that
if there are no prospects of success there would
be no point in
granting condonation.’
[46]
The Court in
Academic
and Professional Staff Association v Pretorius NO and Others
[20]
said:
‘
The
factors which the court takes into consideration in assessing whether
or not to grant condonation are: (a) the degree of lateness
or
non-compliance with the prescribed time frame; (b) the explanation
for the lateness or the failure to comply with time frame;
(c)
prospects of success or bona fide defence in the main case; (d) the
importance of the case; (e) the respondent's interest in
the finality
of the judgment; (f) the convenience of the court; and (g) avoidance
of unnecessary delay in the administration of
justice. …. It
is trite law that these factors are not individually decisive but are
interrelated and must be weighed against
each other. In weighing
these factors for instance, a good explanation for the lateness may
assist the applicant in compensating
for weak prospects of success.
Similarly, strong prospects of success may compensate the inadequate
explanation and long delay.
’
I agree with this
reasoning and will follow suit
in casu
.
[47] As to how the
explanation must be presented by an applicant in an application for
condonation,
the
Court in
Independent
Municipal and Allied Trade Union on behalf of Zungu v SA Local
Government Bargaining Council and Others
[21]
held:
‘
In explaining
the reason for the delay it is necessary for the party seeking
condonation to fully explain the reason for the delay
in order for
the court to be in a proper position to assess whether or not the
explanation is a good one. This in my view requires
an explanation
which covers the full length of the delay….’
[48]
Considering that I have determine this condonation application along
and in conjunction with the rescission application, the
following
ratio in
Lumka
and Associates v Maqubela
[22]
provides some guidance where it was held:
‘
In
the Labour Court applications for condonation in relation to breaches
of that court's rules are governed by rule 12 of the Labour
Court
Rules which provides that the court may extend or abridge any period
prescribed by the rules on application and on good cause
shown. The
rescission of the Labour Court's orders is regulated by s 165 of the
Act and rule 16A. The latter rule also requires
proof of good cause
for rescission of an order granted in the absence of the applicant.
The
phrase 'good cause' is not defined in the Labour Court Rules.
However, it is well-known that the phrase consists of two
requirements,
namely, a reasonable explanation for the delay in the
case of condonation or a reasonable explanation for the default in
the case
of rescission and, on the merits, a
bona
fide
defence which,
prima
facie
, carries some prospect of
success….
’
The Court, in the
end, endorsed the approach that because of this overlap in
consideration requirements, it is competent to consider
both these
kind of applications together and in conjunction with one another.
Once again, I shall follow suit
in casu
. In fact, and as will
be addressed below, the actual same explanation applies in this case
in respect of both the rescission and
the condonation applications
and the issue of prospects of success is clearly the same. I will
thus address both these issues under
the headings of ‘Explanation’
and ‘
Bona Fide
Defence’ in respect of both the
condonation and the rescission applications.
[49]
As to the remaining two condonation consideration requirements, being
the length of the delay and prejudice, I do accept that
a delay going
on three months’ is a protracted one and would mitigate against
the granting of condonation. As a general principle,
the longer the
delay, the better the explanation must be. I, however, consider the
intervening December holiday period in this
count,
[23]
and based on what is left, conclude that the delay is not so lengthy
to the extent of requiring what can be termed an excellent

explanation. As to the issue of prejudice and considering the issues
at stake, I believe this to be a neutral factor. The issues
at stake
have very important and significant consequences to both parties. I
do not believe the applicants would be prejudiced
more than the first
respondent should condonation be granted. In my view, the success or
failure of the first respondent’s
rescission (and accompanying
condonation application) is entirely dependent on the issues of the
explanation for the defaults and
the bona fide defence. I will now
proceed to deal with these two issues in turn.
The Explanation
[50]
What is patently apparent from the explanation submitted by the first
respondent is that administration and management at the
first
respondent is nothing else but a sorry state of affairs. The first
respondent, in the founding affidavit in the rescission
application,
actually describes itself as ‘dysfunctional’.
[51]
In terms of the Systems Act, much of the day to day administration
and management of a municipality such as the first respondent
is
tasked to the municipal manager.
[24]
The first respondent explained that for about a year preceding
September 2013, there was no continuity in the tenure of municipal

managers and these managers often changed, leading to instability and
maladministration. This case in itself illustrates the latter
point;
considering that in the course of 2013 to the date when this
application was heard, there were four different municipal
managers.
Further to make matters even worse, Koma, the municipal manager
responsible for all the events giving rise to this case,
was
dismissed in April 2013.
[52]
The situation at the first respondent was such that the Provincial
Government of Mpumalanga intervened in September 2013 and
took over
strategic control of the first respondent. The Provincial Department
then seconded Mr T G Ratau as acting municipal manager
on 30
September 2013.
[53]
On 1 October 2013, at a special council meeting, the first respondent
resolved to formally call for the assistance of the Provincial

Government. Reasons given in the resolution for this call was the
shortage of skilled personnel as well as serious financial
difficulties
experienced by the first respondent. The first
respondent was unable to pay its major creditors and had cash flow
problems. It
was recorded that there was a ‘magnitude’ of
outstanding work to be done in order to bring the first respondent to
a state of recovery. There was also no corporate services manager in
place. The resolution records that for a minimum of three months
and
a maximum of six months, ‘much needed’ support was
necessary.
[54]
On 25 October 2013, Nkosi replaced Ratau as acting municipal manager.
Nkosi explained that he found the first respondent’s
legal
department to be in disarray, that the department had a lack of
qualified personnel, had failed to defend a number of court
cases
and/or instruct service providing attorneys.
[55]
It is significant that the applicants’ enforcement application,
which was served on 3 October 2013 and set down on 8
October 2013,
hit virtually in the middle of what can be described as this
intervention and transitional period. It is quite reasonable
to
accept that during this time, very little was being properly managed,
administered and even attended to in the first respondent.
Nkosi
explains that the application was indeed not opposed because of the
dysfunctional state of affairs at the first respondent.
[56]
Nkosi explained further that after he took over as acting municipal
manager, he discovered that there were numerous default
judgments
against the first respondent. The order
in casu
was clearly
one of these. Nkosi conceded that the order was served on the first
respondent on 15 October 2013 but says that he
only became aware of
it on 6 November 2013 and then he instructed the first respondent’s
current attorneys of record. This
explanation by Nkosi is
substantiated by the letter from such attorneys to the applicants’
attorneys on 12 November 2013,
referred to above.
[57]
It appears that the first respondent could not even brief its
attorneys with the pleadings and the attorneys had to resort
to the
Court file to get the same. Since the first respondent’s
attorneys are situate in Johannesburg, such attorneys came
to
Lichtenburg to consult on 14 and 15 January 2014, in order to prepare
Court papers. There were also difficulties experienced
in this
regard, in that there was no filing system in place and supporting
documents could not be found. Ultimately, the attorneys
were
instructed to proceed without most supporting documents. It bears
reiteration that Koma who personally dealt with almost everything

giving rise to this matter had long since gone.
[58]
In short, at the heart of the entire explanation of the first
respondent is the dismal state of affairs of the first respondent

which included frequent changes in management (municipal managers),
shortage of skilled personnel and a complete lack of proper

administration. All of this is compounded by a severe financial
predicament and intervention by the Provincial Government. This
all
caused the first respondent to be incapacitated from attending to and
defending this case as it should have done.
[59]
Ms Edmonds, appearing for the applicants, argued that I should not
accept this explanation offered by the first respondent.
Ms Edmonds
submitted that this kind of dysfunction existing at the first
respondent is just not a proper explanation. According
to Ms Edmonds,
this Court has often rejected explanations by trade union using such
unions’ internal structural and administration
failures as
excuses, no doubt referring to the judgments of
Seatlolo
and Others v Entertainment Logistics Service (A Division of Gallo
Africa Ltd)
[25]
and
National
Education Health and Allied Workers Union and Others v Vanderbijlpark
Society For The Aged,
[26]
There is indeed some substance in this submission by Ms Edmonds. But
I cannot ignore what is the reality of the situation
in
casu
.
I cannot think of one situation where a trade union has sought an
indulgence because its affairs had deteriorated to such an extent
of
having no skilled personnel, being dysfunction and having frequently
rotating management followed by the intervention by a higher

authority. If that happened in the case of a trade union, then there
would be no reason why this Court could not equally come to
the
union’s assistance. I therefore do not agree, as Ms Edmonds
contends, that the explanation is unacceptable
per
se
.
Such an explanation must always be considered based on the facts of
every case and could serve to provide a proper explanation
for
default.
[60]
I, accordingly, accept that in reality, the circumstances at the
first respondent were such as to have rendered it incapacitated
to
properly attend to defending the applicants’ claim. The first
respondent was inundated with serious difficulties, spanning
far
wider than just this case but without the resources to remedy them.
And added to this, the applicants’ application could
not have
come at a worse time, being right in the middle of the Provincial
Department’s intervention and transition to a
Provincial
Department appointed municipal manager. In the answering affidavit to
the rescission application, the applicants have
not really taken
issue with the substance of the explanation offered by the first
respondent, other than to contend that the explanation
is
unacceptable
per se
(which I have already dealt with and
rejected). I, therefore, do not believe the first respondent’s
failure is willful. I
believe external circumstances dictated events
and this is inconsistent with contended willful behaviour by the
first respondent
with regard to the current matter now before me.
Overall, I am satisfied that the first respondent has offered a
proper explanation
for its failures in this case and is not in
willful default. I thus accept the explanation on offer by the first
respondent as
being an acceptable explanation.
Bona Fide Defense
[61]
Turning to the substance of the first respondent’s defense, I
point out that this is where the majority of the argument
in Court
before me was focused on. It was never disputed that Koma has signed
the agreement that the applicants sought to rely
upon and issued the
individual applicants with the appointment letters pursuant to such
agreement. The first respondent, in a nutshell,
had two answers to
the agreement, both of which answers, according to the first
respondent, led to the agreement being null and
void. The first
defense is that Koma was coerced into signing the agreement by way of
misconduct by the individual applicants.
The second defense is that
Koma was never authorised to conclude the agreement in the first
place rendering it invalid.
[62]
As to the facts on which these contentions are based, I have set
these out above. Suffice to say, it became clear during argument
that
this had nothing to do with the recruitment or appointment of
employees, but was in essence an issue of so-called ‘benchmarking’,

meaning that it was all about the placement of employees at the
proper post levels, of course with commensurate benefits, relating
to
the actual work that these employees were doing.
[63]
Added to the above facts is, however, the truth that the issue of the
placement of employees never came before the council.
It was never
considered or debated in the council and in particular, never
approved by the council. According to the first respondent
and as
referred to above, the individual applicants embarked upon unlawful
strike action on 5 December 2012 and this included the
complete
disruption of all municipal services. Under pressure from the
community and residents and being unable to convince the
individual
applicants to stop their unlawful conduct and give the Placement
Committee a proper chance to complete its work, Koma
felt compelled
to conclude the agreement, which he then did.
[64]
According to the applicants’ answering affidavit to the
rescission application, what had actually happened was that wage

negotiations were held in 2012 and that the settlement agreement was
entered into as a result thereof. This contention seems to
fly in the
face of Ms Edmond’s submissions in Court that it was all about
benchmarking. But the applicants did not offer
a detailed alternative
version to the events, in the terms as set out above by the first
respondent, giving rise to the conclusion
of the agreement, other
than a bald denial that Koma was ever pressurised to conclude the
agreement.
[65]
Considering then the issue about the authorisation of Koma to
conclude the agreement, the first respondent contended that Koma
did
not have such authority. According to the first respondent, the
agreement was concluded contrary to the provisions of the Council

Promotion and Transfer Policy Resolution A51/2006 (‘the
Transfer Policy’). The first respondent submitted that in terms

of section 55 of the Systems Act, all appointments made by the
municipal manager (Koma at the time) were always subject to policy

directions of the council and the Transfer Policy was such a
direction. Accordingly, insofar as the case of the first respondent

goes, the conclusion of the agreement by Koma in a manner that was
inconsistent with the Transfer Policy meant that Koma exceeded
his
powers under section 55 of the Systems Act. In addition, on reply,
the first respondent added that the placements of the individual

applicants was contrary to the SALGBC Placement Policy, which was
actually a collective agreement to which the applicants were
bound,
and thus equally invalid for this reason.
[66]
The case of the first respondent as to the authority of Koma had a
second leg as well. The first respondent further contended
that the
issue forming the subject matter of the agreement could in any event
not be delegated and was an issue that had to first
serve before the
council and be approved by the council before any agreement could be
concluded. In this matter the council never
considered or resolved in
favour of the conclusion of the agreement. Accordingly, what Koma did
was unauthorised and thus invalid.
[67]
Because, according to the first respondent, the conclusion of the
agreement by Koma was therefore invalid and/or unlawful,
the first
respondent was entitled to ‘resist’ the agreement by
refusing to comply with it, which is simply what it
did.
[68]
The applicants, in turn, had three answers to the lack of authority
case of the first respondent. The first contention was
that the
agreement remained valid and had to be complied with, even if its
conclusion was unlawful, unless the first respondent
took steps to
have it set aside in the form of any appropriate legal proceedings.
As far as the applicants were concerned, this
was never done by the
first respondent and as such, it was simply not competent for the
first respondent to now seek to disavow
the agreement and still
remained compelled to comply. The second contention was that the
conclusion of the agreement fell squarely
within the delegated powers
of Koma, which delegated powers were approved by council. The
applicants provided a document containing
the council approved
delegated powers applicable in the first respondent in support of
this contention. Finally, the applicants
stated that there was no
contravention of the Transfer Policy, which simply did not apply as
the matter at hand had nothing to
do with promotion.
[69] I will first
deal with the applicants’ contention that the first respondent
should have sought to challenge the agreement
by way of available
legal avenues and could not just simply refuse to comply with it. No
doubt, this contention of the applicant
is based on the judgment in
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
[27]
where the Court said:
‘…
.
But the question that arises is what consequences
follow from the conclusion that the Administrator acted unlawfully.
Is the permission
that was granted by the Administrator simply to be
disregarded as if it had never existed? In other words, was the Cape
Metropolitan
Council entitled to disregard the Administrator's
approval and all its consequences merely because it believed that
they were invalid
provided that its belief was correct? In our view,
it was not. Until the Administrator's approval (and thus also the
consequences
of the approval) is set aside by a court in proceedings
for judicial review it exists in fact and it has legal consequences
that
cannot simply be overlooked. The proper functioning of a modern
State would be considerably compromised if all administrative acts

could be given effect to or ignored depending upon the view the
subject takes of the validity of the act in question. No doubt
it is
for this reason that our law has always recognised that even an
unlawful administrative act is capable of producing legally
valid
consequences for so long as the unlawful act is not set aside.
’
This
ratio
in
Oudekraal
Estates
has been consistently applied over the last decade,
[28]
and was equally applied by Molahlehi J in the Labour Court in
Taung
Local Municipality v Mofokeng.
[29]
[70] Most recently,
however, the Constitutional Court was specifically asked to
reconsider the
Oudekraal
Estates
principle in
MEC
for Health, Eastern Cape and Another V Kirland Investments (Pty) Ltd
t/a Eye and Lazer Institute.
[30]
The majority of the Court, by way of Cameron J, held as follows:
[31]
‘
The
argument mistakes the nature of the mandate the Constitution entrusts
to public officials. This does not require them to act
without
erring. On the contrary, the Constitution anticipates imperfection,
but makes it subject to the corrections and constraints
of the law.
The task of public officials is thus to act in accordance with the
law and the Constitution, which includes being subject
to correction
when they err.
By
corollary, the department's argument entails that administrators can,
without recourse to legal proceedings, disregard administrative

actions by their peers, subordinates or superiors if they consider
them mistaken. This is a licence to self-help. It invites officials

to take the law into their own hands by ignoring administrative
conduct they consider incorrect. That would spawn confusion and

conflict, to the detriment of the administration and the public. And
it would undermine the courts' supervision of the administration.’
The
Court in
Kirland
Investments
then made it clear what needs to be done about any such invalid
action, and said the following,
[32]
with specific reference to PAJA:
[33]
‘…
.
the statute's definition of 'decision' embraces 'any decision of an
administrative nature made, proposed to be made, or required
to be
made, as the case may be, under an empowering provision'.  That
a decision 'required to be made' can be reviewed means
that, under
PAJA, a decision may exist if an administrator is required to decide
but as a matter of fact has not decided.
In
addition, some of PAJA's grounds of review expressly target cases
where an administrator has not considered a decision properly
or at
all. Thus, a decision affected by bias is administrative action that
is liable to be set aside on review. So is action not
authorised by
the empowering provision, taken for a reason not authorised by the
empowering provision, for an ulterior purpose
or motive, or for
irrelevant considerations or in disregard of relevant considerations…
Pertinent
to this case, PAJA provides that decisions taken because of the
unauthorised or unwarranted dictates of another person
or body
constitute administrative action that is reviewable. If this court
were to hold that a decision taken under dictation is
not a decision
at all, and has no effect even before it is set aside, then there
would be no need for PAJA. This provision of PAJA
exists precisely
because a decision taken under dictation is nevertheless a decision,
and must be reviewed and set aside just like
any other unjust
administrative action.’
The
Court concluded as follows:
[34]
‘
The
fundamental notion — that official conduct that is vulnerable
to challenge may have legal consequences and may not be
ignored until
properly set aside — springs deeply from the rule of law.
The courts alone, and not public officials,
are the arbiters of
legality…
For a public official to ignore
irregular administrative action on the basis that it is a nullity
amounts to self-help. And it invites
a vortex of uncertainty,
unpredictability and irrationality. The clarity and certainty of
governmental conduct, on which we all
rely in organising our lives,
would be imperilled if irregular or invalid administrative acts could
be ignored because officials
consider them invalid.
’
[71]
The above principles of law are clearly a final and definitive answer
to the first respondent’s case that it was simply
entitled to
refuse to implement the provisions of the agreement because it
considered the same invalid. This kind of conduct is
clearly the same
kind of ‘self-help’ that the Court in
Kirland
Investments
is so critical of. It is equally clear from what the
Court said in
Kirland Investments
that even where the
conclusion of the agreement by Koma was unauthorised by council, in
breach of policy provisions or outside
the parameters of his powers
permitted by statute or policy, the first respondent was simply not
entitled to simply negate or disregard
it. The conduct of Koma
complained of by the first respondent would constitute conduct as
contemplated by PAJA and as such, the
first respondent is compelled
to bring an application in terms of PAJA to have the agreement set
aside if it considered such conduct
to be invalid or unlawful.
Until
the first respondent does so, it remains by law obliged to comply
with the agreement. This being the case, the first respondent
simply
cannot defend the applicants’ application by seeking to make
out a case, in an answering affidavit, that it need not
comply with
the agreement because it is invalid or unlawful. The first
respondent’s argument in this regard is entirely misplaced
and
without substance.
[72] But this does
not mean the first respondent has no prospect of success when it
comes to the issue of rescission and is now
doomed to fail? For the
reasons to follow, I do not think so. It is clear that the first
respondent at all times laboured under
the misapprehension that it
was entitled to refuse to implement and comply with the agreement
because Koma, when concluding it,
acted unlawfully. And considering
the situation at the first respondent during this time, especially
considering the shortage of
skilled personnel to provide proper
guidance and lack of financial resources to seek it elsewhere, its
views are understandable.
As the fact remains that the first
respondent must approach the Court to set aside the conduct of Koma
and consequently the agreement
on the basis of its causes of
complaint, the question I must decide in this rescission application
is simply whether the first
respondent should now be afforded the
opportunity to do so.
[73] What is clear
from the evidence before me is that the first respondent is in a
state of financial crisis. Documents presented
to me show that as at
November 2012, being around the time the agreement was concluded, one
of the primary objectives in the first
respondent was drastic cost
curtailment. In effect, the first respondent was no longer
financially viable. A moratorium was placed
on the appointment of new
personnel and conclusion of new contracts, and measures were
considered to reduce expenditure by 60%.
It is against this backdrop
that the agreement, which was concluded on 5 December 2012, must be
considered. The agreement resulted,
in simple terms, in substantial
remuneration increases for 98 individual employees. This kind of
situation is in my view impossible
to reconcile with the cost
reduction measures being pursued by the first respondent’s
council immediately (and actually simultaneously)
preceding the
conclusion of the agreement by Koma. On a
prima facie
basis,
the conclusion of the agreement by Koma makes no financial sense of
any kind considering the situation of the first respondent.
Added to
that, there is no indication that the impact and consequences of this
agreement was ever placed before the council for
consideration or
approved by the council. In my view, based on what is before me, it
would appear that the implementation of this
agreement would be
disastrous for the first respondent and the community it must provide
services to. But I need not in these proceedings
finally decide
whether this is indeed the case. The point is that if this situation
is ultimately found, in proper legal proceedings
to follow, to be
true, then the first respondent would have a proper foundation to ask
the Court to set aside the conduct of Koma
in concluding the
agreement and with it, the agreement itself.
[74]
In addition to the above, there is clearly a dispute between the
parties as to the application of the policy provisions of
the first
respondent’s council in this case. It was undisputed that the
powers of Koma were always subject to the policy
regulations by the
first respondent’s council and to this effect both parties
relied on the same delegation of powers document
as approved by the
first respondent’s council in support of their respective
cases. I have considered this document and cannot
find any provision
specifically empowering Koma as municipal manager to make a placement
of all the individual applicants,
en
masse
,
to new and higher post levels with added remuneration as a result.
The applicants have submitted that the delegated power provisions
in
this document in terms of which the municipal manager had the power
to (1) determine the remuneration, benefits or other conditions
of
service of employees appointed on a contract basis; (2) sign any
contract or documents on behalf of the council; (3) second
personnel
from one post to another; and (4) confirm staff appointments, would
empower Koma to have concluded the agreement
in
casu
.
The first respondent argued that none of these listed delegated
powers referred to by the applicants found application in this
case
and that an approval by the first respondent’s council was
always required for such an agreement to be concluded, which
approval
never happened. In
Manana
v King Sabata Dalindyebo Municipality,
[35]
the Court said (referring to the Systems Act):
‘
In my view s
55(1) is no more than a statutory means of conferring such power upon
municipal managers to attend to the affairs of
the municipality on
behalf of the municipal council. There is no basis for construing the
section as simultaneously divesting the
municipal council of any of
its executive powers. Indeed, as I have already pointed out, the
Constitution vests all executive authority
- which includes the
authority to appoint staff - in the municipal council and legislation
is not capable of lawfully divesting
it of that power. To the extent
that there might be any ambiguity in the statute in that respect it
must be construed to avoid
that result.’
Again, I do not have
to finally decide this issue as to whether council approval was still
required or there was proper complete
delegation to Koma, which was
actually not fully dealt with in evidence on the papers. Suffice it
to say, if the first respondent’s
contentions are true and
correct, it would have a proper case to challenge the conclusion of
the agreement by Koma when asking
the Court to set it aside.
[75]
In
Khumalo
and Another V MEC for Education, Kwazulu-Natal,
[36]
the Court referred to section 195
[37]
of the Constitution and said:
‘
Section
195 provides for a number of important values to guide
decision-makers in the context of public-sector employment. When,
as
in this case, a responsible functionary is enlightened of a potential
irregularity, s 195 lays a compelling basis for the founding
of a
duty on the functionary to investigate and, if need be, to correct
any unlawfulness through the appropriate avenues…
Read in the
light of the founding value of the rule of law in s 1
(c)
of
the Constitution, these provisions found not only standing in a
public functionary who seeks to review through a court process
a
decision of its own department, but indeed they found an obligation
to act to correct the unlawfulness, within the boundaries
of the law
and the interests of justice.
Public
functionaries, as the arms of the state, are further vested with the
responsibility, in terms of s 7(2) of the Constitution,
to 'respect,
protect, promote and fulfil the rights in the Bill of Rights'. As
bearers of this duty, and in performing their functions
in the public
interest, public functionaries must, where faced with an irregularity
in the public administration, in the context
of employment or
otherwise, seek to redress it. This is the responsibility carried by
those in the public sector as part of the
privilege of serving the
citizenry who invest their trust and taxes in the public
administration.
In the context of
public-sector employment, this is fortified by s 5(7)
(a)
of
the PSA which provides:
“
A
functionary shall correct any action or omission purportedly made in
terms of this Act by that functionary, if the action or omission
was
based on error of fact or law or fraud and it is in the public
interest to correct the action or omission.”
Section
5(7)
(a)
undoubtedly includes the possibility of a functionary seeking
recourse in the courts.
’
Based
on the above reasoning, the Court concluded:
[38]
‘
In
the previous section it was explained that the rule of law is a
founding value of the Constitution, and that state functionaries
are
enjoined to uphold and protect it, inter alia, by seeking the redress
of their departments' unlawful decisions. Because of
these
fundamental commitments,
a court should be slow to allow
procedural obstacles to prevent it from looking into a challenge to
the lawfulness of an exercise
of public power
.’ (emphasis
added)
[78]
In
Municipal
Manager: Qaukeni Local Municipality and Another v FV General Trading
CC,
[39]
the Court considered section 217 of the Constitution, and held:
‘…
it is necessary to
recall that s 217(1) of the Constitution, couched in peremptory
terms, provides inter alia that an organ
of State in the local sphere
(such as a municipality) which contracts for goods and services 'must
do so in accordance with a system
which is fair, equitable,
competitive and cost-effective' (my emphasis). This constitutional
imperative is echoed in both the
Local Government: Municipal Systems
Act 32 of 2000
and the Local Government: Municipal Finance Management
Act 56 of 2003 (the Financial Management Act) ….’
The
Court concluded:
[40]
‘…
This court has on
several occasions stated that, depending on the legislation involved
and the nature and functions of the body
concerned, a public body may
not only be entitled but also duty-bound to approach a court to set
aside its own irregular administrative
act: see
Pepcor
Retirement Fund and Another v Financial Services Board and Another
2003
(6) SA 38 (SCA)
([2003]
3 All SA 21)
at para 10. Consequently, in
Rajah
and Rajah (Pty) Ltd and Others v Ventersdorp Municipality and Others
1961
(4) SA 402
(A)
at 407D - E it held that the interest a municipality had to act on
behalf of the public entitled it to approach a court to have
its own
act in granting a certificate to obtain a trading licence declared a
nullity. Similarly, in
Transair
(Pty) Ltd v National Transport Commission and Another
1977
(3) SA 784 (A)
at 792H - 793G this court held that an administrative body, which
held wide powers of supervision over air services to be exercised
in
the public interest, had the necessary
locus
standi
to ask a court to set aside a licence it had irregularly issued.
Finally, in
Premier,
Free State and Others v Firechem Free State (Pty) Ltd
,
supra
,
Schutz JA concluded in giving the unanimous judgment of this court
that 'the province [the appellant] was under a duty not to
submit
itself to an unlawful contract and [was] entitled, indeed obliged, to
ignore the delivery contract and to resist [the respondent's]

attempts at enforcement.’
[79]
In my view, what the above shows is that there is in general terms
fact a duty on the first respondent to challenge the agreement
and
not just leave matters be. Considering the issues raised, there
exists a Constitutional obligation on the first respondent
and its
functionaries to challenge the agreement. If it is true what the
first respondent says about the agreement being concluded
as a result
of coercion and/or the conclusion of the agreement being unauthorised
or unlawful, then these are issues that are flowing
from the
Constitutional imperatives referred to above must be properly
considered and determined by this Court. And this being
the case, the
first respondent must be allowed the opportunity to properly place
this before this Court. As was said in
National
Education Health and Allied Workers Union on behalf of Mofokeng and
Others v Charlotte Theron Children's Home:
[41]
‘
It
is clearly in the interests of justice that this kind of case be
heard, particularly when appellants are able to support their

submissions regarding the prospects of success with a statement of
respondent's policy given on affidavit…
’
[80]
Insofar as it may be suggested that considering the general nature of
delegation of authority to the municipal manager
[42]
where it comes to the running of the affairs of the first respondent,
this has the effect that the first respondent would be estopped
from
suggesting that Koma had no authority and was acting unlawfully, the
simple answer is what the Court said in
City
of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd,
[43]
where it was held:
‘…
failure by a
statutory body to comply with provisions which the legislature has
prescribed for the
validity
of a specified transaction cannot
be remedied by estoppel because that would give validity to a
transaction which is unlawful and
therefore ultra vires….’
The
Court concluded:
[44]
‘…
.
It is settled law that a state of affairs prohibited by law in the
public interest cannot be perpetuated by reliance upon the
doctrine
of estoppel (
Trust
Bank van Afrika Bpk v Eksteen
1964
(3) SA 402
(A)
at 411H - 412B), for to do so would be to compel the defendant to do
something that the statute does not allow it to do. In effect

therefore it would be compelled to commit an illegality (
Hoisain
v Town Clerk, Wynberg
1916 AD 236).
’
Estoppel
thus cannot operate
in casu
, as it would give legality to
something that may well be unlawful and to the detriment of the very
community the first respondent
must serve. This would simply not be
in the public interest.
[81]
I wish to make a final comment about the issue whether the placement
of the individual applicants in terms of the agreement
would
constitute a promotion. The first respondent suggested that this was
the indeed the case, whilst the applicants said it had
nothing to do
with promotion but was just about benchmarking conditions of
employment. In my view, the agreement indeed has nothing
to do with
promotion and in this respect, the submissions by the applicants has
substance.  But even if the policies relating
to promotion do
not apply; this does not mean the agreement is lawful and valid. I
have recently had the opportunity to consider
the issue of the nature
of such kind of ‘placements’ relating to position
benchmarking, in the judgment of
Newcastle
Local Municipality v SAMWU and Others.
[45]
As I held in that judgment, salaries and conditions of employment in
the case of all municipalities can only be collectively bargained
at
a central level in the Public Sector bargaining council because of
the existence of a collective agreement stipulating bargaining
levels
applicable to all municipalities and with the first applicant
in
casu
equally being a party to such collective agreement.
[46]
Considering the applicants’ own contention in the answering
affidavit to the rescission application that the agreement and
the
consequent ‘placements’ of individual applicants was
arrived at following a wage negotiation, the conclusion of
this
agreement may well fall foul of this collective agreement and thus be
unlawful. I concluded as follows in
Newcastle
Local Municipality
:
[47]
‘…
.
The fact is that if this kind of conduct is permitted, chaos will
reign in the sector, as the first respondent would be entitled
to
move from municipality to municipality, depending on its influence,
and demand that employees simply be moved to higher post
levels and
so procure further increases for them whilst they are still doing
exactly the same work, against the treat of protected
strike action
if the respective municipalities do not comply. All of this will take
place whilst the first respondent still enjoys
the overall protection
and guarantees provided by the sector (national) collective
agreement. This surely would be entirely incompatible
with orderly
and prescribed centralised bargaining at a sectoral level ….
…
.
By determining wages and salaries by collective bargaining at a
national level only, the situation of different municipalities
paying
different salaries for the same work is eliminated. Parity is
ensured. The situation of public service employees moving
from
municipality to municipality simply in pursuit of better wages for
the same work is mitigated. In fact, the events
in casu
illustrate the difficulty caused by allowing workplace bargaining,
which the SALGA representative sought to explain in the meeting.
To
illustrate – if the first respondent is allowed to collectively
bargain at workplace level in the applicant for a change
in post
level of employees in general, a general worker in the applicant
could for example be at post level 9 whilst all other
general workers
in all other municipalities are at post level 12. This is precisely
what is sought to be avoided by the dispensation
agreed to by all the
parties in the public sector and completely undermines consistency
and parity in the sector.’
Again,
I make no definitive finding whether the above situation is indeed
the case
in casu
. But on a
prima facie
basis, it does
seem to be so, and if it is indeed so, it would be a proper ground to
set aside the agreement concluded by Koma.
[82]
For all the reasons as set out above, I conclude that the first
respondent has shown that it has a proper case to present in
seeking
to set aside the agreement signed by Koma on 5 December 2012 and as a
result, not comply with it. It has, in simple terms,
a
bona fide
defense against having to comply with the agreement. Considering the
fact that the first respondent, however, needs to institute
the
requisite legal proceedings to launch a proper challenge to the
validity and lawfulness of the agreement, it is my view that
it
should be afforded the opportunity to do this.
[83]
In the circumstances, I am of the view that the first respondent has
made out a proper case for the granting of its rescission
application
and with it, the granting of condonation for the late filing of its
rescission application. The first respondent has
provided an
acceptable explanation for its default and has illustrated the
existence of the requisite prospects of success (
bona fide
defense)
Conclusion
[84]
I thus conclude that based on the reasons as set out above, the
applicants’ contempt application falls to be dismissed
and the
first respondent’s rescission application must be granted. This
being the case and considering the fact that I am
entitled to
determine the rescission application on such terms as I deem fit, I
also now intend to direct how these proceedings
and further
proceedings, considering the important nature of the issues at stake
in this matter, must be conducted going forward.
[85]
As stated above, the first respondent, if it wants to rely on a case
that the agreement of 5 December 2012 was concluded unlawfully
or
invalidly, must bring an application in terms of PAJA to set aside
the conduct of Koma in concluding the agreement and consequently
also
setting aside the agreement itself. I intend to afford the first
respondent a period of six weeks to bring such application.
And
pending the determination of this application under PAJA, the
applicants’ enforcement application filed on 3 October
2013
must be stayed. Should the first respondent fail to institute the
application as directed in judgment, the applicants shall
then be
entitled to re-enroll their enforcement application for hearing
forthwith. I shall make an order to give effect to this.
Costs
[86]
This then only leaves the issue of costs. It is true that the
applicants’ contempt application was unsuccessful and the
first
respondent’s rescission application was successful. But then
the first respondent in the first place did seek an indulgence.
Also
as I have said, the first respondent actually laboured under a
misapprehension in thinking it could just refuse to comply
with the
agreement. Furthermore, there is still much litigation to come in
this case and certainly, the parties have an ongoing
relationship
with one another. I simply do not intend to cause further
difficulties by mulching either party with a costs order
in this
case. I have a wide discretion when it comes to the issue of costs
and I consider that overall, fairness dictates that
no order as to
costs be made.
Order
[87]
In the premises, I make the following order:
1.
The applicants’ contempt of Court application is dismissed.
2.
The first respondent’s condonation application for the late
filing of its rescission application is granted and the late
filing
of its rescission application is hereby condoned.
3.
The first respondent’s rescission application is granted and
the order granted by Van Niekerk J on 8 October 2013 is hereby

rescinded and set aside.
4.
The first respondent is directed, should it intend to rely on any
invalidity or unlawfulness of the agreement concluded on 5
December
2012 as a basis not to comply with such agreement, to file an
application as contemplated by PAJA to set aside the agreement,
which
application must be brought within six weeks’ of the date of
the handing down of this order.
5.
Provided the first respondent files an application as directed in
this order, the applicants’ enforcement application is
stayed
pending the final determination of this application.
6.
Should the first respondent fail to file an application within the
time period as directed in this order, the applicants shall
be
entitled to immediately upon expiry to the time period in terms of
this order apply to the registrar to set their enforcement

application down for hearing.
7.
There is no order as to costs.
Snyman,
AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
For the
Applicants: Ms R Edmonds of Ruth Edmonds Attorneys
For the
Respondents: Advocate H W Sibuyi
Instructed
by: Phungo Inc Attorneys
[1]
Local
Government: Municipal Systems Act 32 of 2000
.
[2]
See
National
Union of Metalworkers of SA and Another v Total Service Station and
Others
(2002)
23
ILJ
1835 (LC) at para 18;
Building
Industry Bargaining Council Cape of Good Hope (Boland Area) v Hatlin
t/a the Homestyles Co
(2001) 22
ILJ
1143 (LC) at para 17;
Food
and Allied Workers Union and Others v Scandia Delicatessen CC and
Another
(2001) 22
ILJ
1781 (SCA) at para 40;
Ntombela
v Herridge Hire and Haul CC and Another
(1999) 20
ILJ
901 (LC) at para 24;
SA
Forestry Co Ltd v Africa Wood and Allied Workers Union and Others
(1999) 20
ILJ
1928 (LC) at para 14.
[3]
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) at para 22.
[4]
(
1999)
20
ILJ
885 (LC) at para 4.
[5]
Id
at para 42.
[6]
1978
(3) SA 202
(W) at 203C-E.
[7]
(2006) 27 ILJ 2390 (LC).
[8]
Id
at paras 16–17.
[9]
(2007) 28
ILJ
612 (LAC) at para 46.
[10]
Id
at para 48. See also
Ngobeni
v CEO: Mpumalanga Parks Board
(2007)
28
ILJ
2290 (LC) at paras 11–12.
[11]
Bruckner
supra.
[12]
CCII
Systems
supra.
[13]
See also
National
Union of Mineworkers and Others v H and S Oprigters GK and Another
(2010)
31
ILJ
2970 (LC) at paras 7–8.
[14]
(2012) 33
ILJ
1154 (LC) at para 22.
[15]
Rule
16A(1)(b)
reads: ‘The court may, in addition to any other
powers it may have… on application of any party affected,
rescind
any order or judgment granted in the absence of that
party.’
Rule 16A(2)(b)
then provides that: ‘Any
party desiring any relief under- …
.
subrule
1
(b)
may within 15 days after acquiring knowledge of an order or judgment
granted in the absence of that party apply on notice to
all
interested parties to set aside the order or judgment and the court
may, upon good cause shown, set aside the order or judgment
on such
terms as it deems fit.’
[16]
(2007)
28
ILJ
2246
(LAC) at para 28.
[17]
Id
at para 35.
[18]
(2004)
25
ILJ
96 (LAC) at paras 21 and 22.
[19]
1962 (4) SA 531
(A) at 532C-E.
[20]
(2008) 29
ILJ
318 (LC) at paras 17–18.
[21]
(2010) 31
ILJ
1413
(LC) at para 13.
[22]
(2004) 25
ILJ
2326 (LAC) at paras 21–22.
[23]
See
Baur
Research CC v Commission for Conciliation, Mediation and Arbitration
and Others
(2014) 35
ILJ
1528 (LC) at para 3.
[24]
See
section 55 of the Systems Act.
[25]
(2011) 32
ILJ
2206 (LC) at paras 12, 20–21 and 25–26.
[26]
(2011) 32
ILJ
1959 (LC) at paras 9 and 24.
[27]
2004 (6) SA 222
(SCA) at para 26.
[28]
See
Manok
Family Trust v Blue Horison Investments 10 (Pty) Ltd and Others
2014 (5) SA 503
(SCA) at para 17;
Kouga
Municipality v Bellingan and Others
2012 (2) SA 95
(SCA)
;
Camps Bay Ratepayers' and Residents' Association and Another v
Harrison and Another
2011 (4) SA 42
(CC) at para
62;
Seale v Van Rooyen NO and Others; Provincial Government, North West
Province v Van Rooyen NO and Others
2008
(4) SA 43 (SCA)
at para 14.
[29]
(2011) 32 ILJ 2259 (LC) at paras 27 – 30.
[30]
2014 (3) SA 481 (CC).
[31]
Id
at paras 88 – 89.
[32]
Id
at paras 94 – 96.
[33]
Promotion
of Administrative Justice Act 3 of 2000
.
[34]
Id
at para 103.
[35]
(2011) 32
ILJ
581 (SCA) at para 17.
[36]
2014 (5) SA 579
(CC) at paras 35 – 37.
[37]
The
relevant part of the section reads: ‘(1) Public administration
must be governed by the democratic values and principles
enshrined
in the Constitution, including the following principles:
(a)
A high standard of professional ethics must be promoted and
maintained;
(b)
Efficient, economic and effective use of resources must be promoted;
(c)
Public administration must be development-oriented;
(d)
Services must be provided impartially, fairly, equitably and without
bias;
(e)
People's needs must be responded to, and the public must be
encouraged to participate in policy-making;
(f)
Public administration must be accountable…’
[38]
Id
at para 45.
[39]
2010 (1) SA 356
(SCA) at para 11
[40]
Id
at para 23. See also
Groenewald
No and Others v M5 Developments (Cape) (Pty) Ltd
2010
(5) SA 82
(SCA) at para 3.
[41]
(2004) 25
ILJ
2195 (LAC) at para 25.
[42]
See
for example
SA
Municipal Workers Union and Others v Kannaland Municipality
(2010) 31
ILJ
1819
(LAC) at para 56 where it was said: ‘…. the Structures
Act and Systems Act assign a hands-on administrative
role to the
municipal manager. It is evident from the above quoted sections that
a municipal manager is empowered to appoint,
manage, effectively
utilize and train staff; maintain discipline; promote sound labour
relations; to account for all income and
expenditure of the
municipality….’
[43]
2008
(3) SA 1
(SCA) at para 13
[44]
Id
at para 16
[45]
Unreported
case number (D 448/2014
)
[2014]
ZALCD 36
(12
August 2014).
[46]
See
Newcastle
Local Municipality
,
supra
,
at paras 38 and 42.
[47]
Id
at paras 47–48