Malema v MA Selota Attorneys and Another : In re: MA Selota Attorneys v Malema and Others (J309/2020) [2022] ZALCJHB 101 (12 October 2022)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J309/2020

In the matter between:

STEPHEN NTOROANE MALEMA

Applicant

and

MA SELOTA ATTORNEYS

First Respondent

SHERIFF OF THE COURT, KEMPTON PARK

Second Respondent

In re:

MA SELOTA ATTORNEYS

Applicant

STEPHEN NTOROANE MALEMA

First Respondent

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION

Second Respondent

COMMISSIONER NADIA SETHOLE N.O.

Third Respondent

SHERIFF, KEMPTON PARK AND TEMBISA

Fourth Respondent

Heard: 13 April 2022

Delivered: 12 October 2022

JUDGMENT

GOVENDER, AJ

Introduction

[1] This matter, which has a somewhat convoluted history, has its genesis in an unfair dismissal dispute between Mr Malema, as employee and MA Selota Attorneys (MSA) as employer.

[2] This matter is almost identical to the matter under case number J310/2020, the only difference being the employee concerned and the settlement amount. As such, the judgments are almost identical. I return to this later.

[3] Mr Malema was employed as a legal cost consultant by MSA and was dismissed during January 2019. He referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) and was successful, in that he was awarded three months’ compensation equating to R92,335.02, as per the Arbitration Award as varied.

[4] MSA, a sole proprietor[1], subsequently brought a Review Application during May 2019 but the parties ultimately reached settlement during February 2020, the salient terms of which are inter alia as follows:

4.1. The settlement amount of R92,335.02 would be paid in six equal monthly instalments of R15,389.16 commencing on 7 February 2020;

4.2. In the event of MSA defaulting on payment, the entire amount, interest and costs would become due and payable immediately;

4.3. If MSA failed to make payments in accordance with the above, Mr Malema would be entitled to take such steps as may be necessary in order to recover the balance outstanding;

4.4. The parties agreed that the settlement agreement would be made an order of Court;

4.5. A non-variation clause was included as follows:

“6. The parties hereby acknowledge and understand that no indulgence granted to the applicant by the third respondent or any variation or extension of the third respondent’s rights herein shall constitute a waiver of the first respondent’s rights herein, unless such variation or alienation is reduced to writing and signed by both the parties.”

[5] MSA defaulted on payment.

[6] On 4 March 2020 Mr Malema brought an application to have the settlement agreement made an order of court in addition to declaring that MSA’s review application had been withdrawn. The application to have the settlement agreement made an order of court was served on MSA’s erstwhile legal representatives on 6 March 2020.

[7] There being no opposition to the application Nkutha-Nkontwana J granted the order sought on 5 May 2020. It would appear that following the granting of the Court Order Mr Malema obtained a writ of execution and the Sheriff attended at the premises of MSA to attach assets to satisfy the Order.

[8] This prompted MSA to bring an urgent application in terms of which MSA called upon Mr Malema, the CCMA, Commissioner Sithole N.O. and the Sheriff of Kempton Park and Tembisa to show cause on 3 December 2020 why an order should not be granted that the execution of the Court Order granted by Nkutha-Nkontwana J on 5 May 2020 be stayed, pending the variation of the settlement agreement entered into by the parties (the urgent stay application).[2] A further prayer was sought that the Sheriff of Kempton Park and Tembisa be ordered to return the BMW X5[3] and VW Polo Vivo[4] removed from MSA on 16 November 2020.

[9] When considering MSA’s founding and replying affidavits in the urgent stay application the following is noteworthy:

9.1. The basis of the application was that MSA had erroneously entered into the settlement agreement being under the impression that it would receive payment from the RAF in order to satisfy the debt, which did not materialize. The National Lockdown as a result of the Covid-19 Pandemic contributed to its circumstances;

9.2. Despite the application to have the settlement agreement made an Order of Court having been served on MSA’s erstwhile attorneys as set out above, in the replying affidavit MSA claim that they only became aware of the Court Order on 10 July 2020, when this was served on one of its employees;

9.3. MSA further contend that the matter was not properly settled because it was not given an opportunity to invoke the “variation clause” provided for in the settlement agreement. This despite the variation of a settlement agreement implicitly requiring agreement.

[10] In Mr Malema’s Answering Affidavit to the urgent stay application, he records that service was affected on MSA’s legal representatives on 6 March 2020 and that MSA’s erstwhile attorneys confirmed receipt of the application, which confirmation was attached as an annexure. The answering affidavit further confirms that a writ of execution was obtained when the Court Order was not adhered to and the preliminary point of res judicata was raised. Mr Malema also disputed the prejudiced alleged by MSA concerning the attachment of the motor vehicles concerned. Ultimately Mr Malema asked that the application be dismissed with costs on an attorney and own client scale.

[11] On 24 November 2020 Nkutha-Nkontwana J struck the urgent stay application from the roll with costs.

[12] On 27 November 2020 Mr Malema brought an urgent application to compel MSA to return two vehicles to the Sheriff of Kempton Park within 48 hours of granting of the order, pending the finalization of the variation application (“urgent compeller application”). In the event that MSA failed to comply with the order, Mr Malema required that MSA be held in contempt of court and that a warrant of arrest be issued among other things. The basis of the application was that MSA had removed the two vehicles attached in terms of the writ of execution following the court order where MSA’s urgent stay application was struck from the roll.

[13] MSA opposed the urgent compeller application on 1 December 2020 but does not appear to dispute that the vehicles in question were removed. Ultimately, the urgent compeller application was struck from the roll for lack of urgency.

[14] This matter turns on a determination of whether MSA’s application to stay the enforcement of the Court Order per Nkutha-Nkontwana J of 5 May 2020 pending a variation of the settlement agreement or the alternative relief sought by MSA, should be granted or not. All other issues are ancillary this determination.

[15] While this matter was struck from the Urgent Roll with costs on 4 December 2020 per Mahosi J, much like the urgent compeller application, these applications must be determined in the ordinary course.

[16] When the matter was ultimately heard on 13 April 2022, MSA was not in attendance. From considering the transmission of the notice of set down, it is clear that the notice of set down was sent to the email address belonging to MSA that previous correspondence in this matter was sent to and which was received.

[17] Counsel for Mr Malema alluded to there being issues concerning MSA’s standing with the Legal Practice Council. On every permutation I am satisfied that the Court is in a position to determine the matter, on the facts as pleaded notwithstanding the MSA’s non-attendance at the hearing of the matter.

[18] It is not appropriate for this Court to have struck the matter from the roll for MSA’s failure to attend.

[19] This matter must be determined on the merits, for the parties to have finality. It is also a consideration that Mr Malema’s dismissal took place in 2019 and that some four years later the matter has not been finalized.

The law

[20] Rule 16A of the Rules for the conduct of proceedings in the Labour Court (Rules) provides as follows concerning the rescission and variation of court orders:

“16A

(1) The court may, in addition to any other powers it may have-

(a)of its own motion or on application of any party affected, rescind or vary any order or judgment-

(i) erroneously sought or erroneously granted in the absence of any party affected by it;

(ii) in which there is an ambiguity or a patent error or omission, but only to the extent of such ambiguity, error or omission;

(iii) granted as the result of a mistake common to the parties, or

(b)on application of any party affected, rescind any order or judgment granted in the absence of that party.

(2) Any party desiring any relief under-

(a) subrule 1 (a) must apply for it on notice to all parties whose interests may be affected by the relief sought.

(b) 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.”

[21] It is quite clear that the variation that MSA had in mind does not meet any of the requirements as set out in Rule 16A above, but instead MSA sought to vary the terms of the settlement agreement, as made an Order of Court, on the basis that the circumstances under which it had entered into the settlement agreement, i.e., anticipating certain payments from the RAF, had not materialized.

[22] MSA further, somewhat peculiarly, sought to rely on the variation clause quoted above which clearly contemplates the parties reducing any variation of the settlement agreement to writing. The parties did not vary the settlement agreement in writing.

[23] By all accounts the “variation application” as it were, must fail for the following reasons:

23.1. The application was not fashioned as a Part A and Part B application, in that the rule nisi and intended variation application appeared to have been combined, alternatively an actual variation application was never brought;

23.2. The variation that MSA appeared to have had in mind, was that the parties themselves would, or had demonstrated a will to vary the terms of the agreement, in view of MSA’s changed circumstances and ultimate default of the terms of the settlement agreement. No such variation took place between the parties, on the objective facts;

23.3. While some six months had passed from the granting of the order making the settlement agreement an Order of Court during May 2020, the application to vary the settlement agreement was brought in November 2020, it would appear only as a result of the Sheriff acting on the writ of execution;

23.4. There is no basis in law for MSA to approach this Court and in essence ask this Court to vary the terms of the settlement agreement based on MSA’s changed circumstances. The relief sought is the antithesis of an agreement between the parties and cannot be countenanced.

[24] While it may be inferred that what MSA intended to convey to the Court was the impossibility of performance, this would in any event not assist MSA.

[25] In Post Office Retirement Fund v South African Post Office SOC Ltd and Others[5] the Court held as follows concerning impossibility of performance:

“[81] There are three fundamental problems that arise in relation to SAPO’s invocation of supervening impossibility of performance. The first is that the evidence, such as it is, does not establish that the impossibility of performance that is alleged arose as a result of vis major or casus fortuitus. At best for SAPO, its financial misfortunes preceded the Covid-19 pandemic and were only made worse by it. In July 2019, for instance, more than six months before the onset of the Covid-19 pandemic, it incurred a loss of R34 million. To this extent, its financial difficulties were foreseeable and avoidable, with the fault lying squarely with the management of SAPO. As Meer J said in Quinella Trading (Pty) Ltd v Minister of Rural Development and Land Reform, ‘[s]elf-created impossibility does not discharge the obligations’ of a party to a contract.

[82] The second problem is that impossibility of performance was not established. The evidence, boiled down to its basics, establishes that SAPO chose to pay certain of its creditors and not others because it did not have sufficient funds to pay all of its debts when they fell due. It decided that it would not pay the Fund. It could have decided not to pay another creditor and, instead, to pay the Fund. Performance was thus not objectively impossible.

[83] The third problem concerns whether the impossibility relied on by SAPO is absolute or relative. In Unibank Savings and Loans Ltd (formerly Community Bank) v ABSA Bank Ltd, the court held that ‘[i]mpossibility is furthermore not implicit in a change of financial strength or in commercial circumstances which cause compliance with the contractual obligations to be difficult, expensive or unaffordable’ because ‘[d]eteriorations of that nature are foreseeable in the business world at the time when the contract is concluded’. Bradfield says of the requirement of absolute impossibility that if a person promises to do something which, generally speaking, can be done, but which the person concerned is unable to do, they are liable

on the contract. In Scoin Trading (Pty) Ltd v Bernstein NO it was held by this court that the law ‘does not regard mere personal

incapacity to perform as constituting impossibility’.

[84] The position, when a debtor is unable to pay a debt, was set out by Meyer J in Unlocked Properties 4 (Pty) Ltd v A Commercial Properties CC.42 He held that when the impossibility on which a seller relied was ‘peculiar to itself because of its personal financial situation and incapability of securing payment of the full debt owed to the bank’, it was not absolute and so the seller’s ‘incapability does not render the contract void’ on account of impossibility of performance.”

[26] It is plain that changed financial circumstances does not render the contract void on account of impossibility of performance, let alone where the contract concerned has been made an order of court.

[27] MSA did not attempt to rescind the Court Order, even though it contended that it became aware of the Court Order at a later stage, a version that does not accord with the objective facts. The application must accordingly fail and the enforcement of the writ of execution must proceed.

[28] It also follows that Mr Malema’s application to have the vehicles attached in terms of the writ of execution returned to the sheriff must succeed.

Costs

[29] It is trite that in labour matters, costs do not follow the result[1]. In order for costs to be granted the Court’s judicial exercise of its discretion to award costs must be engaged and there must be a justification from the departure of the ordinary rule that costs should not be ordered and the dictates of fairness in terms of section 162 of the LRA and the constitutional and statutory imperatives that underpin it, must be considered[2].

[30] The conduct of MSA in this matter leaves much to be desired. The relief sought by MSA in the stay application is illogical and sight must not be lost of this application being brought by an attorney, with the necessary skills and expertise to understand whether an application is legally competent or not.

[31] Much like the matter under case number J310/2020, it appears that MSA was determined to frustrate the operation of the settlement agreement, made an order of Court, at all costs.

[32] Not only is it questionable how the removal of the vehicles as attached was achieved, but also such conduct, prima facie, is unbecoming of an officer of the Court and must be further investigated.

[33] In the premises the following order is made:

Order

1. The Applicant’s (M A Selota Attorneys) application to stay the enforcement of the writ of execution is dismissed with costs;

2. MSA is ordered to immediately return the two vehicles namely BMW X5, registration number [....] and VW Polo Vivo, registration number [....] to the Sheriff of this Court, within 48 hours of this Court Order;

3. Mr Malema is entitled to the costs of his application to compel the return of the vehicles;

4. This Judgment must be brought to the attention of the Legal Practice Council to further investigate the conduct of MSA.

T. Govender

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant (MA Selota Attorneys):

No Appearance

For the Respondent:

Mr WM Sithole

Instructed by:

Tjale Jubilee Attorneys

[1] MSA will be referred to as the firm of attorneys as opposed to in the first person.

[2] Prayer 2 of the Notice of Motion concerning MSA’s application mirrored the same terms as prayer 1, but that an interdict was sought from the execution of the Court Order, pending the variation of the settlement agreement.

[3] Registration number BL47KKGP.

[4] Registration number BT82HJGP

[5] [2022] 2 All SA 71 (SCA).

[1] See: MEC for Finance: Kwazulu-Natal and Another v Dorkin NO and Another [2008] 6 BLLR 540 (LAC) and Zungu v Premier of the Province of KwaZulu-Natal and Others (2018) 39 ILJ 523 (CC).

[2] Union For Police Security and Corrections Organisation v South African Custodial Management (Pty) Ltd and Others (2021) 42 ILJ 2371 (CC), specifically at paragraph 35, read with Goba v Rand West City Local Municipality and Others [2021] JOL 51406 (LC) specifically at paragraph 30 and 31.