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[2017] ZALCJHB 57
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General Industrial Workers Union of South Africa and Others v Johannesburg Foundry VV and Another (JS2000/2011) [2017] ZALCJHB 57 (17 February 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no: JS 2000/2011
In
the matter between:
GENERAL
INDUSTRIAL WORKERS
UNION
OF SOUTH AFRICA
First
Applicant
MOSES
PRINS AND 6 OTHERS
Second and Further
Applicants
and
JOHANNESBURG
FOUNDRY CC
First Respondent
JOHANNESBURG
FOUNDRY (PTY) LTD
Second Respondent
Heard:
8 February 2017
Delivered:
17 February 2017
Summary:
Joinder application. First Respondent liquidated. No application to
join liquidator or notice to liquidator. Joinder application
dismissed.
JUDGMENT
PRINSLOO
J
Introduction
[1]
The
Applicants referred an unfair retrenchment dispute to this Court
citing Johannesburg Foundry CC (the Respondent) as the respondent.
The Applicants subsequently filed an application to join Johannesburg
Foundry (Pty) Ltd (the Company) as Second Respondent in the
matter
pending between the Applicant and the Respondent.
[2]
The
application for joinder is opposed.
Background
facts
[3]
The
affidavits filed by the Applicants in support of the joinder
application are sketchy and in some respects the application is
defective, which I will deal with
infra
.
However, from a perusal of the founding and opposing affidavits, the
background facts to this application appear to be that the
Respondent
operated a foundry that manufactured goods that were sold to the
Company. The Respondent stopped doing business on or
about 10 May
2011 and it terminated the contracts of all its employees, including
the individual Applicants in this matter.
[4]
The
Applicants referred an unfair retrenchment dispute to this Court in
2011.
[5]
During
October 2011 the Respondent was liquidated.
[6]
The
Applicants seek to join the Company on the basis that the Respondent
was transferred to the Company as a going concern.
[7]
In
opposing the application, the Company took issue with the fact that
there was no proper citation of the Company and no proper
service of
the application and it was impossible to determine whether the papers
were served on the Respondent or the Company.
These complaints are
not entirely without merit, but in my view these defects had been
cured to a large extent. I say so for the
following reasons: the
application is opposed and the deponent to the opposing affidavit is
Mr van Dyk (van Dyk), who describes
himself as a director of the
Company and duly authorised to oppose the application on behalf of
the Company. He was also the only
member of the Respondent. His
opposing affidavit and the capacity in which he opposed the
application, constitutes proof of service
on both entities and I am
satisfied that the Respondent and the Company are aware of this
application and had the opportunity to
oppose it.
[8]
In
the application for joinder the founding affidavit is deposed to by
Mr David Cartwright, an attorney who acted on behalf
of the
Applicants. Mr Cartwright, in support of the application, made
allegations relating to the physical address of the
Respondent, its
assets, customers and business.
[9]
In
his opposing affidavit van Dyk denied that the facts Mr Cartwright
deposed to fall within his personal knowledge. The Applicants
filed
no replying affidavit and Mr Grundling on behalf of the Company
submitted that no weight could be attached to the allegations
set out
in the Applicants’ founding affidavit and that the application
for joinder has to be decided solely on the basis
of what is
contained in van Dyk’s opposing affidavit.
[10]
Mr
Cartwright deposed to the affidavit in support of the application for
joinder without setting out how the facts fall within his
personal
knowledge and why he is in a position to state under oath that the
Respondent’s business was transferred to the
Company in August
2011 as a going concern. At best this is what the Applicants told Mr
Cartwright and he cannot be said to have
personal knowledge of what
he has been told. There is no confirmatory affidavit deposed to by
someone who indeed has personal knowledge
of the allegations made by
Mr Cartwright.
[11]
In
President
of the Republic of South Africa and others v M&G Media Ltd
[1]
the
Constitutional Court held that a deponent’s assertion that the
information is within his or her personal knowledge is
of little
value without some indication, at least from the context, how that
knowledge was acquired. An indication of how the knowledge
was
acquired is necessary to determine the weight, if any, to be attached
to the evidence set out in the affidavit. The mere assertion
that he
has personal knowledge is without value as evidence of the fact in
issue. The deponent has to tell the Court how he acquired
personal
knowledge.
[12]
I
cannot attach any weight to the averments made by Mr Cartwright and
will consider what is stated in van Dyk’s opposing affidavit
to
decide this application.
The
application for joinder
[13]
The
Applicants seek to join the Company on the basis that the Respondent
was transferred as a going concern to the Company. In support
of
their application, the Applicants made the certain allegations. I
have already alluded to the fact that no weight could be attached
to
the averments. Be that as it may, those averments are:
13.1.
That
the physical address of the Respondent is now the physical address of
the Company and they use the same telephone and fax numbers;
13.2. The Respondent’s
assets in terms of buildings and machinery are now under the control
or ownership of the
Company;
13.3.
Customers
of the Respondent are now customers of the Company;
13.4.
The
business that was conducted by the Respondent is now conducted by the
Company;
13.5.
The
Respondent’s business has been transferred to the Company in
terms of the provisions of section 197 of the Labour Relations
Act
[2]
(the Act) and consequently the liabilities in the pending unfair
retrenchment proceedings have been transferred to the Company;
13.6.
The
Company has a direct and substantial interest in the matter.
[14]
Van
Dyk explained that he was the only member of the Respondent. Sinvac
Investments (Pty) Ltd owns 51% of the shares in the company
and the
remaining 49% shares are owned by van Dyk and the Abacus trust. Van
Dyk, his wife and his son are the trustees of Abacus
trust.
[15]
Van
Dyk denied that the Respondent was transferred as a going concern as
it is not legally possible for a close corporation to be
transferred
as a going concern to a private company.
He
explained that:
15.1.
The Respondent and the
Company conducted separate businesses from the same premises;
15.2.
The Respondent and the
Company shared services for example telephone and fax facilities;
15.3.
The Company was a
marketing company that bought goods manufactured by the Respondent
and sold it to clients;
15.4.
The moveable assets of
the Respondent were transferred to the Abacus Trust on 28 February
2011 and on 30 April 2011 all the stock
of the Respondent was
transferred to the said trust;
15.5.
In May 2011 the Company
took over the moveable assets and stock from Abacus Trust;
15.6.
Seven days after the
Respondent stopped doing business, the company commenced with a
foundry business on the same premises;
15.7.
The Company entered into
contracts of employment with some of the Respondent’s former
employees;
15.8.
The Company has not
taken over customers as it was the Respondent’s only client.
[16]
It is trite and in accordance
with the provisions of rule 22 of the Rules of this Court that in
order for parties to be joined to
particular proceedings, they must
have a direct and substantial legal interest in the matter such as to
make them necessary parties
to the proceedings. Whether a section 197
transfer indeed took place is relevant to decide whether the Company
has a direct and
substantial interest and whether it would be
directly affected by the outcome of the trial and the Court’s
order.
[17]
In my view the question whether
or not there was a transfer as contemplated in section 197 of the
Act, should only be considered
after the question whether there are
proceedings to which the Company could be joined, has been decided.
[18]
The question whether the
Company has a direct and substantial interest, only becomes relevant
if it is competent to join the Company
to the pending proceedings.
Joinder
[19]
Rule 22 of the Rules of this
Court provides for joinder as follows:
“
(1)
The
court may join any number of persons, whether jointly, jointly and
severally, separately, or in the alternative, as parties
in
proceedings, if the right to relief depends on the determination of
substantially the same question of law or facts.
(2)
(a)
The court may, of its own motion or on application and on notice to
every other
party, make an order joining any person as a party in the
proceedings if the party to be joined has a substantial interest in
the
subject matter of the proceedings.
(b)
When
making an order in terms of paragraph
(a)
,
the court may give such directions as to the further procedure in the
proceedings as it deems fit, and may make an order as to
costs.”
[20]
This Court may join ‘persons
as parties in proceedings’ and in considering any application
for joinder, the point of
departure is to establish whether there are
proceedings to which parties could be joined.
[21]
In
Du
Preez v LS Pressings CC & Another
[3]
this Court has confirmed
that joinder in terms of rule 22 is in respect of proceedings before
Court and that the purpose of a joinder
is to allow participation in
live proceedings.
[22]
In casu
it
is undisputed that the Respondent was liquidated in October 2011.
[23]
Section 359(2)(a) and (b) of
the Companies Act
[4]
provides that:
“
2(a)
Every person who, having instituted legal proceedings against a
company which were suspended by a winding-up,
intends to continue the
same, and every person who intends to institute legal proceedings for
the purpose of enforcing any claim
against the company which arose
before the commencement of the winding-up, shall within four weeks
after the appointment of the
liquidator give the liquidator not less
than three weeks' notice in writing before continuing or commencing
the proceedings.
(b)
If notice is not so given the proceedings shall be considered to be
abandoned unless
the Court otherwise directs.”
[24]
The Applicants have not
notified the liquidator as per the prescripts of the Companies Act,
nor have they filed an application to
join the liquidator in these
proceedings. In terms of the provisions of the Companies Act the
proceedings shall be considered to
be abandoned.
[25]
Even if the Applicants were not
aware of the liquidation of the Respondent in October
2011
or at the time when they filed their statement of case in 2011, they
certainly became aware of the liquidation in October 2014
when the
Company filed its opposing affidavit and therein specifically stated
that the Respondent was liquidated on 13 October
2011.
[26]
The liquidation that came to
the Applicants’ knowledge in 2014 should have sparked some
action and should have alerted the
Applicants’ attorneys to the
fact that they should notify and join the liquidator. Unfortunately
for the Applicants this
was not done and the status of the
proceedings before this Court is and remains ‘abandoned’.
[27]
The joining of the Company is
dependent on whether the principal matter is live before Court and
whether the joining of the Company
would allow for participation in
live proceedings.
[28]
There are no live proceedings
between the Applicants and the Respondent as the proceedings are
abandoned and there are no proceedings
to which the Company could be
joined. There are no live proceedings in which any of the Respondents
can participate and be afforded
the opportunity to be heard.
[29]
In view of the fact that the
Applicants are unable to cross the first hurdle for joinder, it is
not necessary to decide whether
the Company has a direct and
substantial interest in the matter or whether a section 197 transfer
indeed took place, albeit
prima
facie.
[30]
In the
absence of live proceedings, the relief sought by the Applicants is
not competent and cannot be granted. Mr Grundling argued
that the
application should be dismissed with costs. I can see no reason to
deviate from the general rule that the cost should
follow the result.
Order
[31]
In the
premises I make the following order:
1.
The application for joinder is
dismissed with costs.
__________________
C
Prinsloo
Judge
of the Labour Court of South Africa
Appearances
Applicants:
Mr Bayi of Bayi Attorneys
Second
Respondent: Adv R Grundlingh
Instructed
by:
Maritz Smith Inc Attorneys
[1]
2012 (2) SA 50
(CC) at paras 28 and
107.
[2]
66 of 1995.
[3]
(2013) 34 ILJ 634 (LC)
at paras 12 and 17.
[4]
Act 61 of 1973. See sections
358 and 359.