Kunyuza v Ace Wholesalers (Pty) Ltd and Others (JS27/12) [2014] ZALCJHB 286 (29 July 2014)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA,

IN JOHANNESBURG

JUDGMENT

Not reportable

Case no: JS 27/12

In the matter between:

MLAMLI KUNYUZA & ANOTHER Applicants And ACE WHOLESALERS (PTY) LTD First Respondent BIG SAVE (PTY) LTD Second Respondent TEMBA BIG SAVE CC Third Respondent

Heard: 06/11/2013

Delivered: 29/07/2014

Summary: (Condonation – no service – condonation incapable of being granted).

LAGRANGE, J

Introduction

[1] In this matter, default judgement was originally handed down by Mr Justice Molahlehi on 15 August 2012 and was subsequently varied on 29 August 2012. On 13 August 2013, Mr Acting Justice Benjamin rescinded the judgement. The original respondents were Ace Wholesalers (Pty) Ltd (‘Ace Wholesalers’) and Big Save (Pty) Ltd (‘Big Save’). At that hearing an application to join three further respondents all having the same company name but incomprehensibly having three different company registration numbers, namely Watloo Big Save (Pty) Ltd (Registration No 2003/017653/23), Watloo Big Save (Pty) Ltd (registration number 2003/02901607) and Watloo Big Save (Pty) Ltd (registration number 2002/001200/07) was removed from the roll.

[2] Originally, the third respondent (‘Temba Big Save’) was not cited as a party and was not a party at the time the default judgement and the order varying it were handed down in August 2013. However, it was a party to the rescission application together with the second respondent, Big Save.

[3] A condonation application for the late filing of the applicant’s statement of claim as well as a condonation application for the late filing of the second and third respondents’ answering affidavit opposing that condonation application are the subject matter of this ruling. There is also a condonation application for the late filing of heads of argument by the applicant’s attorney of record, which was granted. The joinder application was not set down for hearing on the same occasion.

The applicants’ condonation application

[4] The issue of condonation for the late filing of the applicants’ statement of claim being required first came up as an issue at the hearing of the rescission application on 5 June 2013, when it was raised by Temba Big save and Big Save. The applicants’ condonation application was eventually filed on 29 October 2013.

The length of the delay

[5] The certificate of outcome was issued on 14 October 2011 following which the applicants had 90 days to file their statement of claim which accordingly was due on 12 January 2012. In the certificate of outcome issued by the Commissioner it was stated that the matter should be set down for arbitration which duly took place on 18 November 2011, despite the fact that it had been originally referred as an unfair dismissal dispute in terms of section 187(1)(g) of the Labour Relations Act, 66 of 1995 (‘the LRA’). A jurisdictional ruling was subsequently issued on 23 November 2011 in which the Commissioner held that the CCMA had no jurisdiction to entertain the dispute and it should be referred to the Labour Court.

[6] On 11 January 2012, the applicants had dispatched their statement of case to the first and second respondents by registered post. In terms of Rule 4(a)(vii) service by registered post is presumed to be effected only on the seventh day following the date of posting. Consequently, service would have been deemed to have occurred only on 20 January 2012, making service of the referral some eight days late, which is a relatively insignificant delay.

[7] However, the principal objection of the second and third respondents is that they deny receiving the statement of claim served by the applicants at all, even by 25 September 2013 when the answering affidavit to the condonation application was deposed to. Big Save claims that the postal address used by the respondents in their attempt to serve the statement of claim on it by registered post was not its post box address but that of the South African United Employer’s Organisation (‘SAUEO’), which Big Save says was never authorised to accept service on its behalf in the capacity of a representative of a party in terms of Rule 4(1)(a)(v). It is not alleged by Big Save that the SAUEO did not receive the statement of claim, and also did not attach a confirmatory affidavit from an official of that organisation about its lack of authority to act as a representative for the purposes of the Labour Court proceedings.

[8] The applicants retort that the SAUEO address was used for Big Save as it was represented by the employer’s organisation at the conciliation hearing and the arbitration hearing which led to the jurisdictional ruling. The notice of the arbitration hearing was sent to that address too.

[9] In respect of Temba Big Save the question of service is more complicated. The applicants essentially never claim to have served the statement of claim on it. Temba Big Save became involved in the saga of its own accord when it jointly applied for rescission of the default judgment even though it was not one of the respondents against which default judgment had been obtained.

[10] The convoluted relationship between the first three respondents is explained thus by the second and third respondents, and is not disputed by the applicants:

10.1 Ace Wholesalers sold various products supplied by Big Save in a retail outlet located in Mabopane.

10.2 It defaulted on its debt to Big Save and the payment of the outstanding debt was settled on the basis that it gave its trading stock to Big Save.

10.3 Big Save then sold the trading stock to the recently formed Temba Big Save which started trading from the same premises previously occupied by Ace Wholesalers.

[11] The second and third respondents claim that this shows there was no transfer of a business between Ace Wholesalers and either of them, even though Temba Big Save had offered employment to a number of former employees of ace wholesalers who applied for positions with it, merely out of a sense of social responsibility but without admitting any legal obligation to do so. The applicants did not apply for any positions at Temba Big Save.

[12] The applicants contended that the respondents’ failure to produce any documents in support of the corporate transactions leads to the conclusion that there must have been a transfer of the undertaking of the first respondent as a going concern. The respondents’ bald denial of this allegation is ambiguous, because they do not make it clear if they are denying the conclusion that a transfer of a going concern took place or whether they are also denying that they had failed to produce the documents in question. It must be said that it is not entirely clear from the applicant’s affidavit what documents they referring to and they might well have been referring to their contention in the rescission application that the first applicant had previously tried to get documentary proof of the transaction between Ace Wholesalers and Big Save without success.

[13] The applicants also claim that there was proof of the receipt of the statement of claim by Big Save, which was evidenced by a signed receipt of the registered letter, but in the replying affidavit Temba Big Save disclaims any knowledge of the identity of the recipient or the signature on the receipt slip.

[14] Before dealing with the other issues arising in this condonation application, the fundamental question that needs to be addressed is whether there was service of the referral on Big Save and Temba Big Save.

[15] On the basis of what is stated above, the applicants have not advanced any evidence that service of the referral was effected on Temba Big Save, so the application for condonation though late in one sense, is actually premature since one cannot apply for condonation for the late referral of a matter when the date of referral is indeterminate.

[16] The crisp question in relation to Big Save was whether the applicants were entitled to rely on the fact that it served the referral on SAUEO which had acted on behalf of Big Save in all the CCMA proceedings, even though Big Save never authorised it to act on its behalf in the Labour Court proceedings. The applicants referred me to no case authorities in this regard. I was unable to find any of direct assistance either.

[17] In Pienaar v Tony Cooper & Associates [1]a case under the previous LRA, the Industrial Court held that it was reasonable for the applicant in that matter to have served her court application on the employer’s attorneys of record, because they had corresponded with her representative after the conciliation proceedings. The applicable rule of service for Industrial Court proceedings, was similar in relevant respects to the Labour Court rule, and read:

“Rule 4(1)(f) determines that “any process which is required to be served in terms of these rules shall be served by or on behalf of the party who desires service thereof by handing a copy thereof to any representative authorised in writing to accept service on behalf of the party concerned.”

(emphasis added)

[18] Even if the industrial court was correct in finding that service had been in compliance with the rule, which I am doubtful of, in this instance there was no evidence of any subsequent communication from SAUEO indicating that it was still acting as Big Save’s authorised representative in future proceedings. There might be an argument that SAUEO negligently misrepresented its representative status by not responding to the applicants when receiving the statement of claim, but even if that were the case, such negligence cannot automatically be attributed to Big Save unless Big Save’s own negligence in allowing such a misrepresentation to be made could be established.[2] However, this is hypothetical as the applicants made no attempt to lay a factual basis for saying that Temba Big Save was estopped from denying SAUEO’s representation by its silence that it continued to act for Big Save.

[19] There can be little doubt in respect of the CCMA proceedings, that the applicants were entitled to assume that SAUEO remained Big Save’s representative in the absence of any notification to the contrary. But does this mean the applicants were entitled also to assume Big Save would still be represented by SAUEO when the applicants decided to approach the Labour Court? The first

point that needs to be made is that the jurisdictional ruling in the CCMA marked the end of the proceedings in that forum and the referral to the Labour Court signalled the initiation of distinct proceedings in order to have the dispute adjudicated. Instead of assuming that the SAUEO continued to represent Temba Big Save, the applicants ought to have verified SAUEO’s continued representative status. The safest route for avoidance of doubt would simply to have served the application on Big Save directly, which could then have informed the applicants if they should send further correspondence to their designated representative.

[20] On the facts available, I am not satisfied that the SAUEO was Big Save’s authorised representative in terms of Rule 4(1)(a)(v) and that deemed service on the employer’s organisation by means of registered post could also be deemed to be service on Big Save. Consequently, there is also no referral on Big Save which can be condoned.

[21] Obviously, these findings do not prevent the applicants effecting proper service on both Big Save and Temba Big Save and applying for condonation for such late service.

The respondents’ condonation application

[22] The respondents only filed their answering affidavit in the condonation application on 27 September 2013. They claim they only came to know of the condonation application on 9 September 2013 and not in June when the applicants claimed they had served it. The respondents’ attorneys of record asked the applicants for the affidavit of proof of service which was not forthcoming and then decided to file their answering affidavit in any event. The answering affidavit was four days late on the basis it came to the respondents’ knowledge on 9 September 2013. This is a minimal delay which occasioned no demonstrable prejudice to the

applicants whose own dilatoriness in filing their condonation application suggested no sense of urgency on their part. In the circumstances, and considering the merits of the applicants’ condonation application discussed above, the late filing of the

answering affidavit should be condoned.

Costs

[23] On the issue of costs, I am satisfied that the applicants had a bona fide belief they had at least served on the second respondent and notwithstanding the respondents’ confident assertions to the contrary, there might well have been a transfer of an undertaking which occurred albeit in an indirect fashion. In the circumstances, I do not think it is appropriate to make a cost award in favour of the respondents.

Order

[24] The condonation application for the purported late service of the applicants’ statement of claim on the second and third respondents is premature and is dismissed.

[25] No order is made as to costs.

_______________________

R LAGRANGE, J

Judge of the Labour Court of South Africa

APPEARANCES

APPLICANT:

A L Cook instructed by Crawford & Associates

FIRST RESPONDENT: W P Bekker instructed by Nothnagel Attorneys

[1] [1994] 9 BLLR 86 (IC)

[2] See e.g Kajee v HM Gough (Edms) Bpk 1971 (3) SA 99 (N)