South African Police Service v Erasmus and Another (JR2319/2015) [2017] ZALCJHB 367; (2018) 39 ILJ 460 (LC) (28 September 2017)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case no: JR2319/2015

In the matter between:

SOUTH AFRICAN POLICE SERVICE

Applicant

and

MARINDA ERASMUS

First Respondent

FRANCOIS VAN DER MERWE N.O.

Second Respondent

Heard: 19 July 2017

Delivered: 28 September 2017

Summary: Review application of private arbitration award i.t.o. the Arbitration Act 42 of 1965 – limited scope of review of private arbitration awards – not permitted for an applicant to raise defence for the first time on review which defence was neither pleaded nor fully and properly canvassed before the Arbitrator in an attempt to establish a reviewable irregularity i.t.o. section 33(1)(b) of the Arbitration Act.

‘(1) Where-

(a) …

(b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or

(c) …

the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.’

[27] In Commercial Catering and Allied Workers Union and others v Pick ‘n Pay Retailers (Pty) Ltd and others[8] the Court stated the following in respect of the meaning of ‘gross irregularity’ in general:

‘… In order for there to be a gross irregularity warranting interference on review, two conditions must be met: firstly, the omission on the part of the arbitrator must involve his or her having misconceived the nature of the enquiry or his or her duties in connection with the enquiry, and thus result in his preventing a fair trial of the matter. Secondly, there must not exist material that would serve to justify the arbitrator's decision, because 'if there was material before the [arbitrator], justifying the action taken, the court would not be entitled to interfere even if an irregularity had been committed'. Put differently, if an arbitrator was caused by inappropriate means to reach one conclusion whereas if he had adopted appropriate means he might have reached another conclusion favourable to the applicant, then the award is reviewable.’

[28] In Telcordia Technologies Inc v Telkom SA Ltd,[9] the Supreme Court of Appeal stated as follows:

‘[85] The fact that the arbitrator may have either misinterpreted the agreement, failed to apply South African law correctly, or had regard to inadmissible evidence does not mean that he misconceived the nature of the inquiry or his duties in connection therewith. It only means that he erred in the performance of his duties. An arbitrator 'has the right to be wrong' on the merits of the case, and it is a perversion of language and logic to label mistakes of this kind as a misconception of the nature of the inquiry - they may be misconceptions about meaning, law or the admissibility of evidence but that is a far cry from saying that they constitute a misconception of the nature of the inquiry. To adapt the quoted words of Hoexter JA: it cannot be said that the wrong interpretation of the Integrated Agreement prevented the arbitrator from fulfilling his agreed function or from considering the matter left to him for decision. On the contrary, in interpreting the Integrated Agreement the arbitrator was actually fulfilling the function assigned to him by the parties, and it follows that the wrong interpretation of the Integrated Agreement could not afford any ground for review by a court.

[86] Likewise, it is a fallacy to label a wrong interpretation of a contract, a wrong perception or application of South African law, or an incorrect reliance on inadmissible evidence by the arbitrator as a transgression of the limits of his power. The power given to the arbitrator was to interpret the agreement, rightly or wrongly; to determine the applicable law, rightly or wrongly; and to determine what evidence was admissible, rightly or wrongly. Errors of the kind mentioned have nothing to do with him exceeding his powers; they are errors committed within the scope of his mandate. To illustrate, an arbitrator in a 'normal' local arbitration has to apply South African law but if he errs in his understanding or application of local law the parties have to live with it. If such an error amounted to a transgression of his powers it would mean that all errors of law are reviewable, which is absurd.

[87] In support of this I revert to Doyle v Shenker, a case that dealt with a review on the ground of a gross irregularity in the proceedings. Innes CJ said in a passage that speaks for itself:

'Now a mere mistake of law in adjudicating upon a suit which the magistrate has jurisdiction to try cannot be called an irregularity in the proceedings. Otherwise a review would lie in every case in which the decision depends upon a legal issue, and the distinction between procedure by appeal and procedure by review, so carefully drawn by statute and observed in practice, would largely disappear. Yet in this case it is a mistake of law alone which is relied upon as constituting gross irregularity. There is neither allegation nor suggestion that the magistrate, his attention having been drawn to sec. 37, deliberately refused to apply his mind to it, or to consider it. The position, if the section means what the applicant contends, is that the magistrate either honestly misinterpreted or completely overlooked it. In either event it would not, I am afraid, be the first occasion on which a court of law has misread a statutory provision or overlooked one not brought to its notice at the trial. Whichever supposition were the correct one, the result would be (still assuming the correctness of the applicant's interpretation) an unfortunate error of law which, but for the special prohibition of the statute would afford good ground for an appeal. But there would be no gross irregularity in the proceedings, and therefore no justification for a review.'

Application of the legal principles to the facts

[29] In essence, the dispute before the Arbitrator concerned the question whether or not Mrs Erasmus was promoted and appointed to the rank of Brigadier. The Arbitrator considered this dispute in the context of the REOP program, as he was required to do, given the material evidence and documents the parties placed before him.

[30] The defence raised by SAPS on review is not the same as the defences it pleaded before the Arbitrator. Before the Arbitrator, SAPS denied that Mrs Erasmus was evaluated in accordance with the Guidelines applicable to the REOP Program. It also denied that she was found to be a suitable candidate to be promoted and appointed to the rank of Brigadier or that she was in fact promoted and appointed as such. It contended that a recommendation was made that she be re-evaluated a year later. On review, SAPS elected to raise a completely different defence. SAPS no longer challenges the evidence that Mrs Erasmus was recommended to be promoted and appointed to the rank of Brigadier in terms of the REOP Program. SAPS now contends, in contradiction to its defence during the arbitration, that in terms of the SAPS Act only the National Commissioner had the authority to promote and appoint Mrs Erasmus to the rank of Brigadier and he did not promote or appoint her as such. SAPS contends further that the National Commissioner did not delegate his authority to anyone in the REOP Program. Consequently, SAPS now denies that there was any valid promotion or appointment of Mr Erasmus to the rank of Brigadier.

[31] SAPS, in its review application, initially claimed that the aforegoing defence was pleaded and therefore an issue properly before the Arbitrator. Mr Bruinders, counsel for SAPS did not pursue this line of argument, wisely so in my view, at the hearing of this matter.

[32] The fundamental purpose of pleadings is to draw the proverbial battle lines for the dispute between the parties. In other words, to identify definitely the nature and parameters of the issues in dispute and to be determined. This is not only for the benefit of the parties but also the decision-maker.[10]

[33] The following dictum in Knox D'Arcy AG and another v Land and Agricultural Development Bank of SA[11] is directly applicable in casu:

'It is trite that litigants must plead material facts relied upon as a basis for the relief sought and define the issues in their pleadings to enable the parties to the action to know what case they have to meet. And a party may not plead one issue and then at the trial, ... attempt to canvass another which was not put in issue and fully investigated.'

[34] Having regard to the Arbitrator’s terms of reference contained in the arbitration agreement, the Arbitrator was bound by the pleadings. The defence set out by SAPS in its reply to Mrs Erasmus’ statement of claim is the case which she came to meet at the arbitration. One does not have to go far to appreciate that had Mrs Erasmus been made aware that she will face a different defence during the arbitration, she, being represented by counsel during the arbitration, would have given due consideration to the facts and legal principles concerning the SAPS Act, as well as the issue of SAPS denying delegation of the National Commissioner’s authority (perhaps even raise estoppel to the aforesaid), especially given the fact that the REOP Program was a unique process with its own guidelines, policies and procedures. In the circumstances, I am of the view that it is not now open for SAPS to rely on this defence, let alone dress up this defence as a question of law in order to cross dress it as a gross irregularity committed by the Arbitrator. his should not be permitted.

[35] SAPS also argued that there was in any event a duty on the Arbitrator to familiarise and equip himself with a full understanding and appreciation of the legal framework within which he had to determine the dispute between the parties. For this argument, Mr Bruiders relied on National Commissioner of the SAPS and another v Cohen NO and others.[12] In Cohen, the facts related to the arbitrator’s failure to take into account new regulations in a promotion dispute concerning rank

translation entailing promotion of an employee and falling within the scope of definition of “unfair labour practice. The facts in Cohen are distinguishable from the facts in this case. In Cohen the interpretation and application of the regulations were the focal point of the issues placed in dispute between the parties. The regulations were the legal framework raised by the parties and consequently within which the arbitrator had to determine the issues placed in dispute between the parties. In the present matter, the Arbitrator’s terms of reference were very specific. Simply put, consider and determine the issues raised in the pleadings. SAPS did not, in its pleadings, raise non-compliance with the SAPS Act or the absence of a delegation of authority as its defence. Consequently, the parties did not specifically require the Arbitrator to consider the SAPS Act as the legal framework within which to determine the dispute. On the contrary, the framework in which the Arbitrator was called upon to determine the dispute, given the documentary and oral evidence properly before him, was the unique REOP Program with its own guidelines, policies and procedures. It cannot reasonably be expected of the Arbitrator to mine through all legislation that might possibly be applicable to the dispute. Or, more particularly, each one of the many sections in the SAPS Act and then unilaterally decide which section or sections might possibly have an influence, either way, on the dispute between the parties, without his attention having specifically been drawn thereto.

[36] It would not only have been grossly irregular had the Arbitrator regarded himself unconstrained by the pleadings but also resulted in him exceeding his powers in terms of section 33(1)(b) of the Arbitration Act.[13] I am of the considered view that in the circumstances of this case it was not open for the Arbitrator to mero motu raise a defence not pleaded by SAPS. Had the Arbitrator done so, this might have denied Mrs Erasmus a fair hearing in contrast to the complaint by SAPS in this review that the Arbitrator denied it a fair hearing.

[37] It was open for SAPS during the arbitration to apply for an amendment to its pleadings to include the defence it now raises on review. It elected not to do so.

[38] SAPS has also contended, as a basis for its review application, that it raised the issue of the application of the SAPS Act and delegation of authority in the course of the arbitration through evidence, and as such, the Arbitrator should have considered and pronounced on this issue in any event. In the absence of SAPS having pleaded non-compliance with the SAPS Act and the lack of a delegation of authority as its defence, it could still have placed reliance on this defence, had this defence been fully canvassed by both parties in the evidence before the Arbitrator.[14] Save for a brief mention of the SAPS Act and the absence of a delegation of authority by the National Commissioner, SAPS did not place sufficient evidence before the Arbitrator for me to conclude that this defence was fully canvassed at the arbitration by both parties. Once again, SAPS did not apply for an amendment of its pleadings during the arbitration to incorporate this defence.[15]

[39] In the result, I am not convinced that SAPS’ criticism directed at the Arbitrator’s finding that he does not accept the defence that the promotion had to be approved by the National Commissioner because it was neither pleaded nor was he directed to any provision that states or implies that no REOP promotion could occur without the National Commissioner’s approval, is justified, let alone a basis to sustain its grounds of review and for this Court to conclude that the Arbitrator failed to apply his mind, committed a gross irregularity and exceeded his powers.

Costs

[40] The parties were ad idem that given the ongoing employment relationship between them, each party should pay their own costs.

[41] In the premises, I make the following order:

Order

1. The application is dismissed.

2. Each party to pay their own costs.

___________________

L Malan

Acting Judge of the Labour Court of South Africa

Appearances:

For the applicant:

Advocate V Bruinders

Instructed by:

The State Attorney.

For the respondent:

Mr S Snyman of Snyman attorneys

[1] Act 42 of 1965.

[2] Act 68 of 1995

[3] 2008 (2) SA 24 (CC); also reported at (2007) 28 ILJ 2405 (CC) and also at [2007] 12 BLLR 1097 (CC).

[4] See: Health and Other Service Personnel Trade Union of SA and others v Member of the Executive Council for Health, Eastern Cape and others (2017) 38 ILJ 890 (LAC); Democratic Nursing Organisation of SA on behalf of Du Toit and another v Western Cape Department of Health and others (2016) 37 ILJ 1819 (LAC); MacDonald’s Transport Upington (Pty) Ltd v Association of Mineworkers and Construction Union and others (2016) 37 ILJ 2593 (LAC); Head of Department of Education v Mofokeng and others (2015) 36 ILJ 2802 (LAC); Gold Fields Mining SA (Pty) Ltd v CCMA [2007] ZALC 66; [2014] 1 BLLR 20 (LAC); Herholdt v Nedbank Ltd (2013) 34 ILJ 2795 (SCA); Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2008 (2) SA 24 (CC); also reported at (2007) 28 ILJ 2405 (CC) and also at [2007] 12 BLLR 1097 (CC).

[5] 2009 (4) SA 529 (CC).

[6] (2002) 23 ILJ 358 (LAC).

[7] NUM obo Employees v Grogan NO and another (2010) 31 ILJ 1618 (LAC) at 33. Also see Volkswagen SA (Pty) Ltd v Koorts NO and others (2011) 32 ILJ 1892 (LAC); Member of the Executive Council: Department of Health (Eastern Cape) v Van der Walt NO and another (2011) 32 ILJ 944 (LC); Clear Channel Independent (Pty) Ltd v Savage NO and another (2009) 30 ILJ 1593 (LC).

[8] (2012) 33 ILJ 279 (LC) at para 8. See also the oft quoted Goldfields Investment Ltd and another v City Council of Johannesburg and another 1938 TPD 551.

[9] Commercial Catering and Allied Workers Union and others v Pick ‘n Pay Retailers (Pty) Ltd and others (2012) 33 ILJ 279 (LC) at para 7. See also Telcordia Technologies Inc v Telkom SA Ltd [2006] ZASCA 112; 2007 (3) SA 266 (SCA) at para 69 and pars 85 – 87; Tao Ying Metal Industry (Pty) Ltd v Pooe NO and others 2007 (5) SA 146 (SCA); (2007) 28 ILJ 1949 (SCA).

[10] Prince v President, Cape Law Society and others [2000] ZACC 28; 2001 (2) SA 388 (CC); 2001 (2) BCLR 133 (CC) at para 22; Albany Bakeries Ltd v Van Wyk and others (2005) 26 ILJ 2142 (LAC) at para 25; Bafokeng Rasimone Platinum Mine (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and others (2015) 36 ILJ 3045 (LC); Imprefed (Pty) Ltd v National Transport Commission (1993) 3 SA 94 (A) at 107; [1993] 2 All SA 179 (A) at 188; Rumanal (Pty) Ltd v Hubner 1976 (1) SA 643 (E). See Nieuwoudt v Joubert 1988 (3) SA 84 (SE) at 90H-I where the court said that the ‘purpose of pleadings is to define the issues, and to enable the other party

to know what case he has to meet’.

[11] [2013] 3 All SA 404 (SCA) at para 35. See also Smith v Kit Kat Group (Pty) Ltd (2017) 38 ILJ 483 (LC) at para 67; Naidoo v Minister of Police and others [2015] 4 All SA 609 (SCA) at para 30; Minister of Safety and Security v Slabbert [2010] 2 All SA 474 (SCA) at para 11.

[12] [2009] 3 BLLR 239 (LC).

[13] Lufuno supra at [175].

[14] South British Insurance Co Ltd v Unicorn Shipping Lines (Pty) Ltd 1976 (1) SA 708 (A) at 714G; Minister of Safety and Security v Slabbert [2010] 2 All SA 474 (SCA) at para 12.

[15] Imprefed supra at 191.