Springpoint Finance (Pty) Ltd v Fourie and Another (2025/188741) [2026] ZALCCT 13 (30 January 2026)

78 Reportability

Labour Law

Brief Summary

Costs — Withdrawal of application — Applicant withdrawing main application without tendering costs — Respondents seeking costs on attorney and own client scale — Court considering fairness and judicial discretion under section 162 of the Labour Relations Act — No order as to costs granted due to the nature of the proceedings and the conduct of the parties.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings concerned an interlocutory costs application brought in the Labour Court in terms of Rule 43(1)(b) of the Labour Court Rules. The application was triggered by the withdrawal of an urgent main application (a restraint of trade enforcement application) by the applicant, Springpoint Finance (Pty) Ltd, without a tender of costs.

The first respondent was Melisa Fourie and the second respondent was Multivest Financial Planning (Pty) Ltd. The respondents sought an order that the applicant pay the costs incurred in the withdrawn main application on an attorney-and-own-client scale, including counsel’s costs and costs related to the Rule 43 application itself. They additionally sought that such costs be aligned with Scale C applicable in the High Court, reflecting the manner in which the respondents framed the magnitude and nature of the litigation expenses said to have been incurred.

Procedurally, the main application was launched on an urgent basis on 16 October 2025. The respondents opposed it on 23 October 2025 and delivered answering affidavits on 7 November 2025. The applicant then filed a notice of withdrawal on 11 November 2025, without tendering costs. The present judgment addressed only whether a costs order should follow from that withdrawal, and if so on what scale, and whether costs should extend to those incurred in the costs application itself. The merits of the restraint of trade dispute were expressly not determined.

The general subject-matter of the dispute in this judgment was therefore the appropriate approach to costs in labour litigation, particularly after a withdrawal, within the framework of the Labour Relations Act 66 of 1995 and relevant Constitutional Court and Labour Appeal Court guidance on the exercise of the Labour Court’s costs discretion.

2. Material Facts

It was common cause that the applicant launched an urgent restraint of trade application in the Labour Court on 16 October 2025 and that the respondents opposed it. The applicant subsequently obtained a hearing date of 4 December 2025, stated to be to ensure compliance with timelines in terms of Rule 39, because the application had been served out of time.

It was also common cause that on 11 November 2025 the applicant served a notice of withdrawal of the main application and that the withdrawal did not include a tender of costs. The respondents accepted the withdrawal but disputed what they characterised as irregular steps associated with an intended “transfer” and disputed the applicant’s stance that costs could be dealt with elsewhere or that the respondents were not entitled to costs consequences arising from the withdrawal.

The respondents asserted that the applicant’s conduct caused them to incur substantial costs in preparing to oppose a voluminous urgent application, and contended that the applicant thereafter proceeded to approach the High Court on an urgent basis for similar restraint relief, which the respondents indicated they would oppose. The respondents also stated that they had previously drawn attention to an arbitration clause in the agreement relevant to the restraint dispute, and they characterised the applicant’s forum choices and withdrawal as vindictive and mala fide.

The court recorded that the respondents’ position included the contention that, because the Labour Court is a specialist court established by the Labour Relations Act and not a division under the Superior Courts framework, mechanisms to transfer matters between divisions could not be used in the way suggested by the applicant. The respondents’ case on costs further included the proposition that costs of one court cannot be determined in another court, because each court has its own tariff and taxation framework, and that a withdrawn application entitles the opposing party to enrol the matter for determination of costs alone, hence the Rule 43(1)(b) application.

The court also recorded matters concerning conduct during the hearing of the costs application, including that the court regarded certain “outbursts” and lapses in court decorum by the respondents’ counsel as unacceptable, requiring judicial intervention. The judgment treated this as relevant to the statutory requirement to consider conduct “during the proceedings before the Court”.

3. Legal Issues

The central legal question was whether, following the applicant’s withdrawal of the main restraint application without a tender of costs, the Labour Court should exercise its discretion to award the respondents their costs, including on a punitive scale and with reference to High Court Scale C, and whether costs should include those incurred in bringing and arguing the Rule 43(1)(b) application.

The dispute was primarily one of application of law to fact and involved an evaluative value judgment. The governing legal framework required the court to apply the statutory costs standard in section 162 of the Labour Relations Act, including the “law and fairness” criterion, to the facts of a withdrawn application and the parties’ conduct in litigation.

The case did not require determination of the merits of the restraint of trade dispute, and the court expressly indicated that those merits were not before it.

4. Court’s Reasoning

The court approached the matter from the premise that costs in the Labour Court are governed by section 162(1) of the Labour Relations Act 66 of 1995, which confers a wide discretion and requires that any costs order be made in accordance with the requirements of law and fairness. The court treated this as displacing any simple default rule that costs necessarily follow the outcome.

In explaining the applicable framework, the judgment referred to Constitutional Court guidance emphasising that, in labour matters, courts must account for fairness considerations, and must be cautious not to use costs orders in a manner that would unduly deter litigants from approaching the Labour Court. The court cited authority indicating that the judicial discretion on costs must be reasoned and aligned with the statutory and constitutional imperatives underpinning section 162.

The court also considered authorities addressing restraint of trade litigation as engaging constitutional considerations, particularly because restraints limit the right to choose a trade, occupation or profession in terms of section 22 of the Constitution. On the authorities placed before it, the court noted the caution that in constitutional matters the general rule that costs follow the result is not automatically applied, due to the risk of a “chilling effect” on litigants seeking to vindicate constitutional rights.

Although the respondents sought costs on an attorney-and-own-client scale and advanced strong submissions about the applicant’s conduct and alleged mala fides, the court ultimately located the decision in its duty to follow binding Constitutional Court precedent on Labour Court costs. It regarded itself as bound by the Constitutional Court’s approach in Zungu v Premier of the Province of KwaZulu-Natal and Others on how costs discretion should be exercised in labour matters.

In addition, the court referred to section 162(b)(ii), which requires consideration of the parties’ conduct during the proceedings before the court. The judgment recorded that the conduct of the respondents’ counsel during argument was unacceptable and required intervention. While the judgment did not quantify the weight attached to this factor, it included it as part of the fairness assessment.

The judgment also recorded that certain decisions were placed before the court and argued, and that when the court requested the applicant’s counsel to address the ratio decidendi or obiter dictum of those decisions, counsel responded that the authorities were not necessary or relevant. The court nevertheless indicated that it was bound by Constitutional Court authority, specifically Zungu, when deciding whether to grant costs in Labour Court matters.

Having considered the submissions and the controlling approach to labour costs, the court concluded that the appropriate order, in accordance with law and fairness, was that there should be no order as to costs.

5. Outcome and Relief

The Labour Court made no order as to costs. The respondents’ application for costs against the applicant, including punitive costs on an attorney-and-own-client scale, High Court Scale C, counsel’s costs, and the costs of drafting and arguing the Rule 43(1)(b) application, was therefore not granted.

No further relief was granted.

Cases Cited

Union for Police Security & Corrections Organisation v SA Custodia Management (Pty) Ltd & others (2021) 42 ILJ 2371 (CC).

PSA obo Darren Rogger Sampson v Minister of Justice and Constitutional Development [2024] ZALCPE 43.

Ball v Bambalela Bolts (Pty) Ltd and Another (citation as reflected in the judgment: “at para 16”).

Duster Dollies Central (Pty) (Ltd) v Behr and Others [2024] ZALCJHB 233.

Zungu v Premier of the Province of KwaZulu-Natal and Others [2018] ZACC 1.

Member of the Executive Council for Finance, KwaZulu-Natal and Another v Dorkin NO and Another [2007] ZALAC 41.

First National Bank of Southern Africa Ltd t/a Wesbank v First East Cape Financing (Pty) Ltd 1999 (4) SA 1073 (SE).

Legislation Cited

Labour Relations Act 66 of 1995, section 162(1) and section 162(b)(ii).

Basic Conditions of Employment Act 75 of 1997, section 77(3).

Constitution of the Republic of South Africa, 1996, section 22.

Superior Courts Act (referred to in argument regarding transfer competence, without a specific provision cited in the judgment).

Rules of Court Cited

Labour Court Rule 43(1)(b).

Labour Court Rule 39.

Held

The Labour Court held that, applying the costs discretion in section 162 of the Labour Relations Act and the law and fairness standard as developed in binding Constitutional Court authority, the circumstances did not justify granting a costs order against the applicant following the withdrawal of the main restraint of trade application. The court therefore made no order as to costs.

LEGAL PRINCIPLES

The Labour Court’s power to award costs is governed by section 162 of the Labour Relations Act 66 of 1995, which requires that costs be determined according to the requirements of law and fairness, rather than by a rigid rule that costs follow the result.

In labour litigation, courts must exercise the costs discretion with sensitivity to constitutional and statutory imperatives, including avoiding undue deterrence of parties from approaching the Labour Court, while remaining able to address frivolous or vexatious litigation where fairness warrants it.

In assessing costs, the court may consider the conduct of the parties during the proceedings as contemplated in section 162(b)(ii), as part of the overall fairness enquiry.

Restraint of trade disputes may implicate constitutional considerations, including section 22 of the Constitution, and the presence of constitutional dimensions is a factor that may influence the approach to costs in a manner that does not mechanically apply the ordinary “costs follow the result” practice.