Northwest Transport Investments (Soc) Ltd v Motha and Another (JR2530/21) [2024] ZALCJHB 314 (23 July 2024)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR2530/21

In the matter between:

NORTHWEST TRANSPORT INVESTMENTS

(SOC) LTD

Applicant

and

JOHN MELUSI MOTHA

First Respondent

JOHN SIAVHE N.O.

Second Respondent

Heard: 28 May, 21 June 2024 & On Papers

Delivered: 23 July 2024

This judgment was handed down electronically by circulation to the parties’ legal representatives by email. The date for hand-down

is deemed to be 23 July 2024.

JUDGMENT

MAKHURA, J

Introduction

[1] This matter was set down for hearing on 28 May 2024. The applicant (company) is represented by the office of the State Attorney, Pretoria. The notice of set down was sent to one of the officials of the State Attorney’s office, Vishal Ramruch (Ramruch), by email. The State Attorney did not attend the proceedings on 28 May 2024. The matter was postponed to 21 June 2024 and the Court directed the Registrar to serve the notice of set down per the details of the parties contained in the file. The order of 28 May 2024 was sent by the Registrar on the same day. In addition to Ramruch, the order was served on Meshack Makhubela.

[2] On 12 June 2024, the Registrar issued a directive to the parties. Mojalefa Mahloko from the office of the State Attorney was also included in this email. At the hearing on 21 June 2024, there was still no appearance on behalf of the company. Mr Ndziane, appearing for the first respondent (employee), courteously suggested that the matter be postponed and offered to serve by hand the order of the day’s hearing on the State Attorney. The matter was again postponed and with no objection from Mr Ndziane, the Court decided that the matter would be determined on the papers and directed the parties to file supplementary heads of argument. Specifically, the company was directed to deliver its supplementary heads of argument within 15 days of receipt of the order, failing which, the matter would be determined without any further notice to it.

[3] Mr Ndziane, per his undertaking, served the Court order by hand on the office of the State Attorney, Pretoria at 9h30 on 24 June 2024. He filed a service affidavit to that effect. Accordingly, the company had until 15 July 2024 to deliver its supplementary heads of argument. The company has not complied with the directive. This judgment is therefore prepared based on the filed pleadings, record of proceedings under review and the parties’ respective heads of argument.

Nature of the application

[4] This is a review application brought in terms of section 145 of the Labour Relations Act[1] (LRA) against the arbitration award (award) issued by the second respondent (commissioner) on 4 November 2021. The award declared the dismissal of the employee to be substantively unfair and ordered the company to reinstate the employee retrospectively with full backpay.

[5] The employee opposes the application. His affidavit was filed outside the 10-day period. The company did not file a notice of objection in terms of item 11.4.2 of the Practice Manual.[2] Although the employee applied for condonation, this was unnecessary in the absence of an objection.

[6] In his answering affidavit, the employee raised four preliminary points. First, he challenged the authority of the deponent to the founding affidavit to institute these review proceedings (authority). Second, he challenged the locus standi of the deponent to the affidavit (locus standi). Third, he contended that the deponent lacks the necessary personal knowledge to depose to the affidavit (no personal knowledge). Fourth, he raised the non-joinder of the Commission for Conciliation, Mediation and Arbitration (CCMA) (non-joinder).

Preliminary points

Authority to institute proceedings

[7] The founding affidavit was deposed to by the Acting Group Chief Executive Officer (AGCEO) of the company, Peter Moholo (Moholo). The employee disputed the authority of Moholo to institute these proceedings.

[8] The company is a juristic person and both parties are ad idem that section 66(1) of the Companies Act[3] applies. This section provides that:

‘The business and affairs of a company must be managed by or under the direction of its board, which has the authority to exercise all of the powers and perform any of the functions of the company, except to the extent that this Act or the company’s Memorandum of Incorporation provides otherwise.’

[9] In Mall (Cape) (Pty) Ltd v Merino Ko-operasie BPK[4], the Court held that:

'The best evidence that the proceedings have been properly authorised would be provided by an affidavit made by an official of the company annexing a copy of the resolution but I do not consider that that form of proof is necessary in every case. Each case must be considered on its own merits and the Court must decide whether enough has been placed before it to warrant the conclusion that it is the applicant which is litigating and not some unauthorised person on its behalf.' [Own emphasis]

[10] The above was referred with approval in Pretoria City Council v Meerlust Investments (Pty) Ltd[5]. In that judgment, the Appellate Division held that:

‘It is not enough to say that the Council has given practical demonstration of its desire to have the appeal heard by this Court. The question of authority having been raised, the onus is on the petitioner to show that the prosecution of the appeal in this Court has been duly authorised by the Council; that it is the Council which is prosecuting the appeal, and not some unauthorised person on its behalf (cf. Mall (Cape) (Pty.) Ltd v Merino Ko-operasie Bpk., 1957 (2) SA 347 (C) at pp. 351 - 2). As was pointed out in that case, since an artificial person, unlike an individual, can only function through its agents, and can only take decisions by the passing of resolutions in the manner prescribed by its constitution, less reason exists to assume, from the mere fact that proceedings have been brought in its name, that those proceedings have in [fact] been authorised by the artificial person concerned. In order to discharge the abovementioned onus, the petitioner ought to have placed before this Court an appropriately worded resolution of the Council…’[6]

[11] The authority to institute or defend the proceedings should not be conflated with the authority to depose to the affidavit. The Supreme Court of Appeal (SCA) in Ganes and another v Telecom Namibia Ltd[7] (Ganes) clarified this issue in the context of the authority of an attorney to institute proceedings. The SCA held:

‘In the founding affidavit filed on behalf of the respondent Hanke said that he was duly authorised to depose to the affidavit. In his answering affidavit the first appellant stated that he had no knowledge as to whether Hanke was duly authorised to depose to the founding affidavit on behalf of the respondent, that he did not admit that Hanke was so authorised and that he put the respondent to the proof thereof. In my view, it is irrelevant whether Hanke had been authorised to depose to the founding affidavit. The deponent to an affidavit in motion proceedings need not be authorised by the party concerned to depose to the affidavit. It is the institution of the proceedings and the prosecution thereof which must be authorised. In the present case the proceedings were instituted and prosecuted by a firm of attorneys purporting to act on behalf of the respondent. In an affidavit filed together with the notice of motion a Mr Kurz stated that he was a director in the firm of attorneys acting on behalf of the respondent and that such firm of attorneys was duly appointed to represent the respondent. That statement has not been challenged by the appellants.

It must, therefore, be accepted that the institution of the proceedings was duly authorised…’[8]

[12] Rule 7(1) of the Uniform Rules of Court provides:

‘Subject to the provisions of subrules (2) and (3) a power of attorney to act need not be filed, but the authority of anyone acting on behalf of a party may, within 10 days after it has come to the notice of a party that such person is so acting, or with the leave of the court on good cause shown at any time before judgment, be disputed, where after such person may no longer act unless he satisfied the court that he is authorised so to act, and to enable him to do so the court may postpone the hearing of the action or application.’

[13] In Ganes, the Court said that Rule 7 provides a procedure to be followed by a respondent who wishes to challenge the authority of an attorney who instituted motion proceedings on behalf of an applicant.[9] The Court in Lancaster 101 (RF) (Pty) Limited v Steinhoff International Holding NV and others[10], dealt with the issue as follows:

‘[21] Rule 7(1) provides that the authority of anyone acting on behalf of a party may, within 10 days after it has come to the notice of a party that such person is so acting, or with the leave of the court on good cause shown at any time before judgment, be disputed, whereafter such person may no longer act unless he satisfied the court that he is authorised so to act, and to enable him to do so the court may postpone the hearing of the action or the application.

[22] According to Erasmus, the challenge may be brought at any time before judgment and may be raised in a variety of ways, inter alia in appropriate circumstances by notice, with or without supporting evidence, in a defendant’s plea or special plea; in an answering affidavit or orally at the trial.’ [Own emphasis]

[14] The employee has raised the issue in his answering affidavit. In my view, the authority envisaged in Rule 7 is that given by a party or litigant to his or her attorneys to institute the proceedings. However, even if I am wrong and Rule 7 applies to the authority of the deponent (attorney or not) to the affidavit initiating or defending the proceedings, the issue has been raised in the employee’s answering affidavit. This Court cannot ignore the pleaded case of the likelihood of an unauthorised application being entertained. To do so will, in my view, be tantamount to placing form over substance. Moholo’s argument that the challenge to his authority should have been raised in terms of Rule 7 is dismissed.

[15] Now, to the merits of the point, Moholo describes the company as “North-West Transport Investment (SOC) Ltd” and sets out its principal place of business. No further details are provided. He states that he is a major male person employed as the AGCEO and that he is “duly authorized to depose to this affidavit on behalf of the applicant and seek relief foreshadowed in the notice of motion”. In his answering affidavit, the employee contends that the applicant is a juristic person, that Moholo failed to establish that the institution of the review application was authorised by the company and therefore the application must be dismissed.

[16] In reply, Moholo contends that he has the necessary authority to “depose [to] the founding affidavit on behalf of the Applicant” and that this authority is vested in him by virtue of his position as the AGCEO.

[17] In Cullinan Holdings Ltd v Lezmin 2768 CC[11], the Court held as follows:

‘Henochsberg on the Companies Act 71 of 2008, vol 1 [issue 5] 253-257 deals with the topic of directors and legal proceedings involving companies. The learned author says:

The directors’ powers under s 66 enable them to cause the company to participate in legal proceedings. For this purpose they must authorise the institution of the proceedings and the prosecution thereof … They must also authorise one of their number or someone else (eg a manager or the secretary) to represent the company in such proceedings … There must be evidence before the Court that the person purporting to represent the company has been authorised accordingly with regard to the particular proceedings … While in motion proceedings the best evidence would be an affidavit by an officer of the company annexing a copy of the relevant resolution of the board, such evidence is not necessary in every case. Each case must be considered on its own merits and the Court must decide whether enough has been placed before it to warrant the conclusion that it is [the company] which is litigating and not some unauthorised person on its behalf (Mall (Cape) (Pty) Ltd v Merino Kooperasie Bpk 1957 (2) SA 347 (C) at 351 – 352).’ [Own emphasis]

[18] The judgment of this Court in Kouga Municipality v SA Local Government Bargaining Council and others[12] is apposite to the present matter. In that matter, the deponent to the founding affidavit did not aver that he was authorised to

institute and prosecute the application.[13] Similarly, in casu, Moholo does not make any averments that he is authorised to institute the application. He insists that he is authorised to depose to the affidavit and clearly conflated the authority to institute the proceedings with the authority to depose to the affidavit. For the purpose of this enquiry, it is irrelevant that Moholo had the authority to depose to the affidavit. What is relevant is that it is the institution of the proceedings and the prosecution thereof that must be authorised.

[19] The answering affidavit was served on 9 May 2022, more than 25 months ago. Moholo had ample time to satisfy this Court that he was authorised to institute the proceedings. The onus was on him to show that the review application was authorised by the Board. He ignored and/or misapprehended the employee’s point. The result is that the point remains unanswered. The inevitable conclusion is that there is no application that has been authorised by the company. The employee’s point in limine must succeed. The application brought by Moholo purporting to act on behalf of the company stands to be dismissed.

[20] With regard to costs, it follows from my finding that if the application is not authorised by the company, this Court cannot make any order against it, particularly an adverse costs order. It will in my view be a contradiction to find that the application is not authorised, meaning that the company is not a party to these proceedings, and continue to make any order against the company. That order would be made in the company’s absence and without it being afforded an opportunity to be heard. The employee did not contend that Moholo should pay the costs in his personal capacity.

Locus standi

[21] The employee contends that Moholo has no authority nor locus standi to institute these proceedings. Further, that he has no authority to depose to the affidavit.

[22] The employee conflates the three issues – authority to institute proceedings, authority to depose to the affidavit and locus standi. I have already dealt with the first two issues relating to authority. Regarding the latter issue, it is trite that a party will have legal standing or locus standi if he or she has a direct and substantial interest in the subject matter of the judgment or order.[14]

[23] If I found that the company instituted these proceedings, there would be no issue with its necessary legal standing before this Court as it was a party in the CCMA proceedings affected by the award that is sought to be ‘reviewed’. However, in light of my finding that the institution of this application is not authorised by the company, the issue of its locus standi falls away and has become academic.

Non-joinder and personal knowledge

[24] The non-joinder of the CCMA is an overly technical issue. The CCMA has filed the record of the proceedings in terms of Rule 7A(3) of the Rules[15] despite not being cited. It does not, in my view, have a direct and substantial interest in the subject matter of this litigation. The point has no merit and would have been dismissed.

[25] Equally, the lack of personal knowledge on the part of Moholo would have been dismissed. These are review proceedings based on the CCMA record. Moholo was not giving any new evidence in these proceedings other than purportedly presenting the case on behalf of the company.

Analysis: Review Application

[26] In the event that I am wrong on the authority point, the application still falls to be dismissed on the merits.

[27] The employee was charged with dishonesty for allegedly soliciting a bribe of R10 000.00 from Mxolisi Phakade (Phakade), the owner of a company called Dikopane, that supplied the company with diesel, in exchange for awarding Dikopane another contract for diesel supply. The second charge was that he instructed Portia Segole (Segole), a stores controller, to award a diesel tender to Dikopane.

[28] At the disciplinary hearing, Segole refuted the allegation that she was instructed by the employee to award a tender to Dikopane. She was not called to testify at the arbitration proceedings and no evidence was adduced to prove the allegation.

[29] Regarding the charge of dishonesty, the company did not call Phakade as a witness. It also did not apply for the admission of hearsay evidence in terms of section 3 of the Law of Evidence Amendment Act[16]. The company’s witness on this charge was Hendrick Nelson (Nelson). His evidence was that he conducted an investigation into

the allegations against the employee.

[30] The common cause fact between the parties was that the employee requested R10 000.00 from Phakade. However, Phakade paid him R5 000.00. The employee’s case was that he needed the money to attend a funeral in the Eastern Cape. This version was never disputed by the company even during the disciplinary proceedings. In his evidence, Nelson confirmed that there was no message, referring to the messages exchanged between the employee and Phakade, where the employee asked for R10 000.00 in order for him to facilitate the awarding of the diesel tender to Phakade’s company. Nelson also confirmed that there was no evidence to support the charge that the employee solicited the bribe. Significantly, Nelson conceded that his investigation found that the employee requested money to attend a funeral.

[31] Faced with this evidence, the commissioner found that the dismissal was substantively unfair. This finding is not only reasonable, but it was the only finding the commissioner could have reached. There was no shred of evidence to support the charges. On the contrary, the evidence presented on behalf of the company in respect of the charge of dishonesty overwhelmingly supported the employee’s version that he requested money to attend a funeral, not as a bribe.

[32] The company contends that the commissioner’s finding that Nelson conceded that the employee requested money to attend a funeral and not as a bribe constitutes misconduct. It is not pleaded how this finding amounts to misconduct. Having considered the evidence of Nelson, the company’s criticism against the award is ludicrous.

[33] The other ground is that the commissioner erred in finding firstly that Mogomotsi’s testimony exonerated the employee on the charge of dishonesty, and secondly that the statement of Phakade amounted to hearsay evidence. Mogomotsi’s evidence has no bearing on the matter. He testified that he was never asked by the employee to approach Phakade to ask for money on his behalf. Regarding Phakade’s statement, the commissioner correctly held that the dispute had nothing to do with hearsay evidence. The company did not apply for admission of Phakade’s statement as evidence. On that basis, Phakade’s statement had no bearing on the matter.

[34] The contention that the commissioner did not attach sufficient weight to the alleged breakdown of the trust relationship is a fundamental misconception of the enquiry before the commissioner. The enquiry into an alleged breakdown of the trust relationship can only be triggered by a finding of guilt against the employee. Absent a guilty finding, there is no conduct that should be assessed to determine whether it breached the trust relationship. This ground is meritless.

[35] This review application is a non-starter. The award issued by the commissioner meets the reasonableness standard[17] and the application stands to fail.

[36] In the premises, the following order is made:

Order

1. The application is dismissed.

2. There is no order as to costs.

M. Makhura

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: No appearance

For the First Respondent: Mr. C.T. Ndziane of Ndziane Incorporated

[1] Act 66 of 1995, as amended.

[2] Practice Manual of the Labour Court of South Africa, effective 2 April 2013 and remained applicable at the time of the delivery of the answering affidavit.

[3] Act 71 of 2008.

[4] 1957 (2) SA 347 (C) at 352A.

[5] 1962 (1) SA 321 (A).

[6] Ibid at 325B – F.

[7] 2004 (3) SA 615 (SCA).

[8] Ibid at para 19.

[9] Ibid.

[10] [2021] ZAWCHC 193; [2021] 4 All SA 810 (WCC).

[11] [2016] ZAGPPHC 758 (26 August 2016) at para 8.

[12] [2009] ZALC 158; (2010) 31 ILJ 1211 (LC).

[13] Ibid at para 11.

[14] See: De Villiers and others v Trustees for the Time Being of the GJN Trust and others [2018] ZASCA 80; 2019 (1) SA 120 (SCA) at para 22.

[15] This refers to the old Rule 7A(3) of the Rules for the Conduct of Proceedings in the Labour Court GN 1665 of 1996, which operated

until 16 July 2024.

[16] Act 45 of 1988.

[17] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; (2007) 28 ILJ 2405 (CC) at para 110; Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and Others [2007] ZALAC 12; (2008) 29 ILJ 964 (LAC) at para 100; Duncanmec (Pty) Ltd v Gaylard NO and others [2018] ZACC 29; (2018) 39 ILJ 2633 (CC) at paras 42 - 43.