Mutale v Lorcom Twenty Two CC t/a Lorcom Vehicle Accessories and Others (JS838/06, JS454/07) [2016] ZALCJHB 427 (9 November 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JS838/06

JS454/07

In the matter between:

CONSTANCE MUTALE Applicant and

LORCOM TWENTY TWO CC t/a

LORCOM VEHICLE

ACCESSORIES First Respondent

DURAFIT VEHICLE

ACCESSORIES (PTY) LTD Previously Liberty Lane Trading 242 (Pty) Ltd Second Respondent

EMILY ZIKA SMITH (now Skhosana) Third Respondent

MARCO BEHRTEL Fourth Respondent

PIETER CORNELIS

NUATA Fifth Respondent

ABRAHAM WILHELM

NAUTA Sixth Respondent

Heard: In chambers

Delivered: 09 November 2016

JUDGMENT - LEAVE TO

APPEAL

NKUTHA-NKONTWANA AJ

Introduction

[1] In this application the Applicant seeks leave to appeal against the whole judgment I handed down on 31 May 2015. In that judgment, I dismissed her application with no order as to costs. The application is opposed by the respondent.

Grounds of leave to appeal

[2] There are several grounds of appeal to the Labour Appeal Court upon which the application is hinged and I do not intend repeating them in this judgment. The whole application is, however, encapsulated by paragraph 8.1 of the Applicant’s written submissions which states:

“It is in the interest of justice that this Honourable Court looks behind and beyond the contracting statement and omission that have been made by the members and directors of the First and Second Respondents collectively, which clearly shows that they have been working in co-hoots and hence lifting the corporate veil is the only way to effect judgement or looking at the remedies in the Companies Act 2008.” [Emphasis added]

First Applicant

[3] The Applicant had correctly joined the Second Respondent as a party for purposes of executing the Cele J judgement against it subsequent to the sale of the First Respondent as a going concern. As soon as the business was sold as a going concern, the Second Respondent stepped into the shoes of the First Respondent automatically in terms of Section 197 of the LRA. For completeness sake, it is essential that I quote the relevant parts of the Section 197. It provides that:

“197. Transfer of contract of employment

(1) In this section and in section 197A –

(a) ‘business’ includes the whole or a part of any business, trade, undertaking or service; and

(b) ‘transfer’ means the transfer of a business by one employer (‘the old employer’) to another employer (‘the new employer’) as a going concern.

(2) If a transfer of a business takes place, unless otherwise agreed in terms of subsection (6) –

(a) the new employer is automatically substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer;

(b) all the rights and obligations between the old employer and an employee at the time of the transfer continue to be in force as if they had been rights and obligations between the new employer and the employee;

(c) anything done before the transfer by or in relation to the old employer, including the dismissal of an employee or the commission of an unfair labour practice or act of unfair discrimination, is considered to have been done by or in relation to the new employer; and

(d) the transfer does not interrupt an employee’s continuity of employment, and an employee’s contract of employment continues with the new employer as if with the old employer.”

[4] As such, the Applicant’s employer, for all intense and purposes, became the Second Respondent and not the First Respondent.

[5] Also, it is common cause that the First Respondent has been deregistered. The effect of deregistration is that the First Respondent is deprived of its legal existence and the law no longer recognises it as a legal person. In Barclays National Bank Ltd v Kalk[1] the court held that a debt that is due to a creditor of a company or CC that has been deregistered is not extinguished, but unenforceable

against the corporation.

[6] Therefore, the Applicant could not litigate against a deregistered company.

Merits

[7] It follows that the only claim that was cogitated is the one against the Second, Fifth and Sixth respondents.

[8] As to the merits of the application, the Applicant failed to prove that the Fifth and Sixth respondents used the Second Respondent’s separate legal personality as a facade to defraud or mislead the Applicant. At least, the Applicant concedes in his written submissions that she had legal representation or access to one. The said representatives ought to have advised her to proceed with a process of liquidating the Second Respondent as soon as it became clear that it was not willing to settle the judgement debt. If indeed she was failed by her legal representatives, as she is now alleging, she has recourse against them.

[9] The test to apply when considering whether a leave to appeal should be granted is whether another court might reasonably come to a different conclusion.

[10] Having considered all the grounds of leave to appeal, I am not persuaded that the Applicant has made out a case that another court might reasonably arrive at a decision different to the one reached by this court.

[11] In the premises, the application for leave to appeal stands to be dismissed.

Order:

1. The application is accordingly dismissed with no order as to costs.

________

P Nkutha-Nkontwana

Acting Judge of the Labour Court of South Africa

[1] 1981 (4) SA 291 (W)