Keevy NO v National Union of Metal Workers of South Africa and Others (JA69/06) [2009] ZALAC 19; (2010) 31 ILJ 354 (LAC) (18 November 2009)

IN THE LABOUR COURT OF SOUTH AFRICA

(HELD AT JOHANNESBURG)

JA69/06

In the matter between:

BENNIE KEEVY N.O …...............................................................................................Appellant

And

NATIONAL UNION OF METAL WORKERS

OF SOUTH AFRICA ….....................................................................................First Respondent

MAZIBKO, EPHRAM AND 123 OTHERS …............................................Second Respondent

JUDGMENT

Sometime in August 2005 the National Union of Metalworkers of South Africa (the First Respondent) together with 124 of its members (the second to further respondents) instituted an action against JOBMATES (PTY) LTD on the grounds that the dismissal of the second to further respondents by JOBMATES (PTY) LTD was unfair.

JOBMATES (PTY) LTD opposed the action. It however, admitted both in its response to the Statement of Case as well as in the pre-trial minute that it was the employer of the second to further respondents but denied that its dismissals of the said respondents was unfair.

Curiously the pre-trial minute described, in its citation, the respondent as JOBMATES LABOUR SERVICES (PTY) LTD and not, as appears in the pleadings preceding it JOBMATES (PTY) LTD. Following the filing of the pre-trial minute, the new citation has ostensibly been utilized not only in subsequent pleadings but also in the various correspondences that passed between the parties. Notwithstanding the new citation of the respondent as JOBMATES LABOUR SERVICES (PTY) LTD, the pre-trial minute records as one of the common cause facts that the second to further respondents were employed by JOBMATES (PTY) LTD at the date of their dismissal. The pre-trial minute was filed on 18 May 2006.

On 24 October one B. Keevy of the Commonwealth Trust (Pty) Ltd wrote a letter to the respondents’ attorneys advising it that JOBMATES LABOUR SERVICES CC had been placed in liquidation and that he had been appointed as one of its liquidators. The letter records the following:

“NATIONAL UNION OF METAL WORKERS OF SOUTH AFRICA AND MAZIBUKO PHRAIM AND 123 OTHERS/JOB MATES LABOUR SERVICES (PTY) LTD

Please take not that Job Mates Labour Services CC has been placed in liquidation and that our Mr. B Keevy has been appointed as one of the liquidators thereof.

This matter has only now come to our attention and accordingly we must now, in terms of our statutory duties, investigate same.

We would be pleased if no further steps would be taken in respect of this matter until such time as we have had the opportunity to revert to you.

Please do not hesitate to contact the writer with any queries in this regard.”

The respondents’ attorneys replied to Mr. Keevy advising him that the trial in the matter was set down for 13 November 2006 and that their letter constitutes notice in terms of s359 of the Companies Act no. 61 of 1973 (hereinafter the Act). The letter records the following:

“OUR CLIENTS: NUMSA ON BEHALF OF ITS MEMBERS IRO JOBMATES LABOUR SERVICES (PTY) LTD JS 688/05

LABOUR COURT TRIAL: MONDAY 13 NOVEMBER 2006

We refer to your letter of today’s date. As you are no doubt aware, this matter is set down for hearing, by direction of the Labour Court, on the Monday 13 November 2006.

You are hereby given notice, in terms of s359 of the Companies Act 61 of 1973, of our clients’ intention to continue with these proceedings. Should it become necessary, application will be made at the commencement of the proceedings, to substitute the liquidators for the respondent.

You are invited to give notice of your intentions in regard to these proceedings before close of business on Friday the 10 November 2006. In the absence of such an indication and/or appearance on behalf of the respondent on the 13 November 2006, it is the applicants’ intention to persist in this matter.”

Mr. Keevy then instructed attorneys to act on his behalf who then forwarded the following letter to the respondents’ attorneys:

“NUMSA ON BEHALF OF ITS MEMBERS IRO JOBMATES LABOUR SERVICES (PTY) LTD (IN LIQUIDATION)

In this matter we act on behalf of the liquidators of Jobmates Labour Services CC (in liquidation).

It is our instructions that your reference to Jobmates Labour Services (Pty) Ltd is incorrect and that no such entity exists.

We are in possession of your letter addressed to our client dated 24 October 2006 and have been instructed to respond thereto.

Section 359 of the Companies Act operates to the benefit our client as it is intended to provide liquidators with the opportunity to investigate claims against an estate in liquidation.

Our client does not wish to act in a manner which prejudices either your clients and/or the creditors of the estate.

We would be pleased if your client would reconsider its position and provide our client with the opportunity to investigate this matter. After consideration and investigation our client may even be of the view that your client has a valid claim and shall consent to same being admitted as a claim in the estate. From the papers in our possession, it appears that your client seeks, inter alia, an order for the reinstatement of certain employees, which is now obviously impossible to give effect to and accordingly the alternative claim for such employees would be compensation for which there may or may not be sufficient funds in the estate to satisfy.

We urge your clients to consider a cooperative attitude in this regard.

Should your clients not wish to consider their position we shall attend at court on 13 November 2006 and seek a postponement on the following grounds:

8.1 Your client’s notice in terms of Section 359 of the Companies

Act was not provided timeously.

8.2 Section 358 of the Companies Act operates for the benefit of

Our client who is not currently in the position to properly

investigate and consider your client’s claim prior to 13

November 2006.

In such an event we further hold instruction to seek a punitive cost order in respect of the costs incurred by our client in attending to the postponement against your client.

we would be pleased to hear from you as a matter of urgency in this regard”.

Further correspondence then followed between the attorneys. The respondents’ attorneys adopted the attitude that it intended proceeding with the trial as its action was against JOBMATES LABOUR SERVICES (PTY) LTD which, to them, did not appear to be in liquidation. The respondents’ attorneys also indicated that according to their information the registration number of the company that employed the second to further respondents and against whom their action was pending was registration number 203/032069/07. The final latter on this issue prior to the matter coming before the Labour Court on 13 November 2006, was from Keevy’s attorneys which records the following:

We acknowledge receipt of your letter dated 10 November 2006.

Kindly take note that the entire “Jobmate’s” organisation has been placed in liquidation.

The Group of companies consisted of 3 companies one of which was Instricate Trading CC (previously known as Jobmate’s Labour Services) Registration number 2003/110686/23) which entity was also previously Jobmate’s Labour Services (Pty) Ltd registration number 2000/018302/07.

The company with registration number 2003/032069/07 is known as Old Town Investments 358 (Pty) Ltd. This company is also part of the Jobmate’s Group. At this point in time our client is uncertain as to whether it trades as or was ever known at Jobmate’s Labour Services. This is however irrelavent as this company is also in liquidation. We attach hereto an internet company search printout in this regard.

It is evident that there is some confusion in regards to the group of companies and this is the exact reason to grant our client time. Time which your client is denying our client.

At this stage our client is not even in possession of the pretrial minutes to which you refer.

Our correspondence is not tendentious and discourteous. The facts are simple. The defendant against whom your client is litigating is in liquidation and we represent the liquidator. Your actions herein are merely resulting in the estate incurring expenses to the detriment of the creditors.

The litigation cannot continue on Monday.”

It is noteworthy that one Mr. Graham, of Graham Attorneys who was at the time representing JOBMATES (PTY) LTD in the proceedings, was totally oblivious to the fact that his client may have been placed in liquidation.

On 13 November the respondents attended Labour Court on trial as did Mr. Graham, purportedly representing JOBMATES (PTY) LTD and Mr. Rathbone representing Keevy in his capacity as a liquidator. Mr. Rathbone informed the court that his client was appointed as the liquidator of companies linked to the name JOBMATES but could not specifically state if it included JOBMATES LABOUR SERVICES (PTY) LTD and that his client needed time to investigate the matter particularly because “there is difficulty with regard to the name and the name changes because a lot of name changes took place … “. Rathbone further argued that there may be a close corporation involved in that JOBMATES LABOUR SERVICES (PTY) LTD may have been converted to a close corporation. All in all there was clearly confusion not least of all, and oblivious to everybody, as to how JOBMATES (PTY) LTD (the cited respondent) became JOBMATES SERVICES (PTY) LTD. Furthermore the registration number which the respondents’ attorneys provided KEEVY’S attorneys as being the registration number of the employer of the second to further respondents was the registration number of a company called OLD TOWN INVESTMENTS 358 (PTY) LTD, a company placed in liquidation in September 2006 and of which company KEEVY was appointed as provisional liquidator. Mr. Rathbone went on to inform the Labour Court that he had advised the respondents’ attorneys that the “entire Jobmates organisation has been placed in liquidation.”

Amidst this confusion all Rathbone sought, on behalf of his client, was a postponement of the trial so that his client could properly

investigate the matter, see which liquidated entity was the employer of the second to further respondents and then decide whether to settle or oppose the action.

On 13 November 2006 the Labour Court postponed the matter to the next day, 14 November 2006, it appears to have done so in order that the purported notice, given in terms of s359 of the Act by the respondents attorneys, would comply with the time period prescribed by the said section.

On 14 November 2006, all the parties again attended Labour Court and added to the then prevailing confusion. In any event the Labour Court decided not to grant the postponement sought by Keevy and the trial proceeded. The Labour Court refused Keevy a postponement on the basis that Keevy had no locus standi to seek a postponement as it failed to prove that JOBMATES LABOUR SERVICES (PTY) LTD was in liquidation.

Mr. Keevy now appeals against the above decision, while leave to appeal was refused by the Labour Court it was granted on petition to the Judge President of this Court.

Firstly, it is now common cause that the entity that employed the second to further respondents is in liquidation and that it was in liquidation at the time the Labour Court refused to grant Keevy the postponement he sought to investigate the matter.

Notwithstanding the fact that the Labour Court proceeded to hear the matter and granted judgment in favour of the second to further respondents and against a party who was not even cited in the Statement of Claim, the issue is that, in terms of s359 of the Act, once a company is placed in liquidation all legal proceedings of a civil nature by or against the liquidated company are suspended by operation of law. The proceedings then remain suspended until he appointment of a liquidator and the party that intends proceedings against the liquidated company gives notice to the liquidator of its intention to proceed with the litigation in terms of s359 (2)(a) of the Act. The liquidation referred to in this section is the liquidator finally appointed and not a provisional liquidator1.

From the public documents made available to this Court it is evident that Keevy was only appointed as provisional liquidator when the matter came before the Labour Court. In the circumstances in so far as the respondent purports to argue that it gave notice in terms of s359 of the Act, in my view such notice did not comply with the said section.

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1 See Stydom No v MGN Construction (Pty) Ltd 1983 (1) SA 799 (D) at 806-807

Given the above, the action instituted by the respondents against JOBMATES (PTY) LTD or JOBMATES LABOUR SERVICES (PTY) LTD or such other company bearing registration as 2003/032069/07, was suspended pending: firstly the appointment of liquidator (not a provisional liquidator); and, secondly proper notice being served upon the liquidator in term of s359 (2)(a) of the Act. By reason of the fact that the respondent in the Labour Court was in liquidation, it was not competent for the action against it to proceed.

In the result I am of the view that the appeal must succeed. The respondent has however taken the point that this appeal should not be entertained because the appellant failed to file the record for the appeal within the period prescribed in terms of the rules that regulate proceedings in this Court. The failure to comply with the said rule results in the appeal being deemed to have been withdrawn. The appellant may be granted on good cause shown. The factors that govern good cause are no different to that which governs an application for the condonation for the filing of papers outside the time limits prescribed by the rules of the Labour Court or this Court. The appellant must therefore explain the reasons for the delay; deal with the prospects of success and the significance of the matter for the application to succeed and the appeal reinstated.

In so far as the delay is concerned, the record for the appeal was filed in the first week of July 2008, this was about six month after the extended date agreed to by the respondents. The explanation provided by the appellant was that is was unable to obtain the transcript of the evidence, led at the trial, until June 2008. According to the appellant, during November 2007, it realized that after its application for postponement was refused by the Labour Court and its attorneys withdrew from the matter the trial proceeded and evidence was led at such trial. It was in the circumstances obliged to have the evidence transcribed to place a full and proper record before this Court the appellant, then, in terms of the rules of this Court approached the respondent to seek an extension of time with which to file the record for the appeal. An extension was granted until 31 January 2008. The appellant was of the view that this was an adequate period to obtain the transcript, to prepare and to file the record. However, the “server” of LOM Business Solutions (“LOM”), the company that transcribed records of proceedings in the Labour Court, broke down in January 2008 and it could not prepare the transcript was required by the appellant until the “server” was fixed. According to the appellant it only received the transcript from LOM in the middle of June 2008 and within three weeks thereafter it prepared, served and filed the complete record of this appeal.

The appellant is however silent on what it did from the time it was informed that the “server” was inoperative to the time that the transcript was delivered to it. The Court is not informed on whether the server took 6 months to repair, or whether LOM attended to other matters before it transcribed the record in this matter and whether or not the appellant made any enquires to establish if there was some other enterprise who could more speedily transcribe the record to the satisfaction of this Court. This information was necessary for this Court to assess appellant’s contribution to the delay in filing the record. Prima facie, the delay in this matter is substantial and the delay is not fully and sufficiently explained. Where a party who is required to show good cause for its failure to attend to procedural matters timeously does not provide an explanation for the delay, then, in my view, irrespective of the fact that they may have strong prospects of success the matter will not be entertained by this Court. Where the explanation provided is inadequate or not sufficiently satisfactory, then the Court must

consider the issue of the prospects of success and the importance of the matter before it makes a decision to refuse condonation.2 In NEHAWU obo Mofokeng and others v Charlotte Theron Childrens Home [2004] 10 BLLR 979 (LAC) Davis AJA (with Zondo JP and Willis JA concurring) held that the failure to provide a reasonable and acceptable explanation for the delay was not a basis for the refusing an application for condonation but that the Court must take into account the interest of justice and the prospect of success in determining whether or not to grant the application.

In this matter although the delay of 6 months is not fully and sufficiently explained, when consideration is given to the merits of the appeal; the significance of the appeal in as much as this matter should not have been entertained by the Labour Court, I am of the view that the application to reinstate the appeal should be granted.

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2 See Queenstown Fuel Distributors CC v Labuschagne NO & others [2000] 1 BLLR 45 (LAC) at 53H-J; Universal Products Networks (Pty) Ltd v Mabaso & others [2006] 3 BLLR 274 (LAC).

In the result I make the following order:

(i) The appeal is reinstated.

(ii) The appeal is upheld.

(iii) The order of the Court a quo dated 14 November 2006 refusing the postponement of the trial and the subsequent proceedings are hereby set aside.

(iv) There is no order as to costs.

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WAGLAY ADJP

I agree

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KHAMPEPE JA

TLALETSI AJA

Appearances:

For the appellant: Adv HA Van Der Merwe

Instructed by: Senekal Simmonds Inc

For the respondents: Adv H Van Der Riet

Instructed by: Minnaar Niehaus Attorneys

Date of hearing: 22 September 2009

Date of Judgment: 18 November 2009