Spineco Medical International (Pty) Ltd v Coetzee NO and Another (J1174/2021) [2021] ZALCJHB 347 (13 October 2021)

THE

LABOUR COURT OF SOUTH AFRICA

(HELD AT JOHANNESBURG)

Not reportable

Case No: J 1174/2021

In the matter between:

SPINECO MEDICAL INTERNATIONAL (PTY) LTD Applicant

and

FWJ COETZEE N.O

SHERIFF

ROODEPOORT NORTH 1st Respondent

SHONA

MARY SEATON JONNSSON 2nd Respondent

Date of hearing: 12 October 2021

Date of judgment: 13 October 2021. Judgment delivered by email

Order varied in terms of s 165(b) of the LRA: 14 October 2021

JUDGMENT

VAN

NIEKERK J

[1] This is an urgent application in which the applicant seeks to stay a writ of execution issued after an arbitration award in the second respondent’s favour. In the award, the second respondent was awarded compensation in the sum of R480 000 after the arbitrator found that she had been unfairly dismissed by the applicant.

[2] The terms of the award required the applicant to pay the amount concerned within 30 days from the date of the award, being 6 August 2021. The second respondent took steps to have the award certified by the CCMA. On 24 August 2021, prior to the expiry of the 30-day period fixed by the award, the CCMA certified the award in terms of section 143 (3) of the LRA. On 30 August 2021, a writ was issued by the CCMA. On 15 September 2021 the first respondent’s deputy attempted to execute the award by attaching the applicant’s bank account held at Nedbank, Clearwater Mall. The return of service records that a copy of the written notice of attachment was served on a manager at the bank. The return of service further records the following:

No funds as yet was received as banking institutions as a norm in attachments of this nature firstly referred to their legal advisers/departments for clearance. The attachment is not yet completed because satisfaction of the writ was not demanded from the judgement debtor. In order to complete this attachment should service also be effected upon the respondent for which purpose I have attached a copy of the writ together with my notice of attachment. We await the return from the relevant sheriff.

[3] The second respondent does not dispute that the attempt to attach the applicant’s bank account was made without demand being made to the applicant, and in circumstances where this court had not been approached by way of a substantive application for leave to attach the bank account and any monies deposited there.

[4] The applicant has filed an application to review and set aside the arbitration award. That application remains pending. The review application was filed in circumstances where the applicant failed to comply with the provisions of section 145 (7), in that no security was furnished.

[5] The applicant seeks to have the writ of execution issued by the CCMA set aside, alternatively, to have the execution of the writ stayed pending the finalisation of the review application. The applicant contends that the certification process was initiated prematurely, more specifically, prior to the expiry of 30-day period referred to in the arbitration award. Secondly, the applicant contends that in the absence of a substantive application to attach its bank account, the attachment purportedly effected that the applicant’s bank is of no force and effect. Thirdly, the applicant seeks exemption from the requirement to furnish security in terms of section 145(7).

[6] I deal first with the applicant submissions regarding the validity of the writ. In my view, there is a distinction to be drawn between certification and execution. The fact that the applicant took steps to have the writ certified and that the writ was in fact certified prior to the expiry of the 30-day period fixed by the arbitrator for payment of the compensation that he awarded does not invalidate any writ issued consequent on certification. Certification amounts to no more than a declaration that the arbitration award in question was in fact issued and constitutes a binding award for the purposes of section 143 (3). The writ of execution that forms the subject of the present application was issued after the expiry of the 30-day period, in other words, after the applicant had become indebted to the second respondent in the sum awarded.

[7] Insofar as the second respondent has sought to attach the applicant’s bank account in circumstances where the writ had not been served on the applicant and in the absence of any leave granted by this or any other court to execute in that manner, and that attachment cannot stand. Having said that, I do not understand the applicant’s case to be one in which it seeks to set the attachment aside for either of these reasons. This is not the relief sought in the notice of motion, nor is the case made out in the founding affidavit to sustain relief of that nature. It is obvious from the terms of the deputy sheriffs return of service that the attachment is in any event incomplete, for the reasons recorded. It remains for the second respondent to elect to proceed with the completion of the attachment, subject to the risk of the applicant seeking the court’s intervention on one or more of the grounds that were raised during argument. It is thus not necessary for me, at this stage at least, to make any finding in regard to the status of the attachment.

[8] Insofar as the applicant has failed to furnish security as required by section 145 (7) and now seeks exemption from this requirement, the applicable legal principles are well-established. The requirement to furnish security on filing an application for review was intended to dissuade employers from filing frivolous review applications and to ensure that the time limits prescribed by section 145 is observed. An exemption from the obligation to file security ought not to be assumed. This court is afforded a discretion, having regard to all of the relevant circumstances, to exempt an applicant from furnishing security entirely, or to direct that security may be furnished in a lesser amount than that prescribed. An applicant seeking to be exempted from providing security must necessarily file a substantive application in which the grounds on which exemption is claimed are properly enumerated. In the present instance, the applicant does no more than record in the founding affidavit that it ought to be exempted from the obligation to file security since the obligation would place the applicant under a financial burden and given its prospects of success in the review application. First, the prospects of success in the review application are by no means apparent. The test for review is a stringent one and the founding affidavit in that application contains no more than the grounds on which the applicant

intends to rely. Secondly, the applicant has manifestly failed to set out any basis on which exemption might be granted. The reference to the current economic situation is one that applies, I would hazard to guess, to every employer in this country. The applicant does not assert that its own financial position is such that it is not able to meet the obligation to furnish security, nor are any documents annexed to sustain the decision. Finally, the attitude of the applicant’s attorney leaves much to be desired. In response to an email in which the second respondent’s attorney records that the applicant failed to furnish security when it filed the review application, the applicant’s attorney simply denies the request to pay for security and accuses the second respondent’s attorney of blackmail the response further indicates that the applicant’s attorney would approach this court to make a punitive costs order against the second respondent’s attorney. This is a remarkable stance to take in the face of the failure by the applicant to comply with its statutory obligation to furnish security pending the outcome of the review.

[9] In summary, the applicant has failed to make out a case for exemption from the obligation to furnish security. I did not understand the second respondent to oppose the staying of the writ provided that security was furnished. In the circumstances, I intend to order that the writ of execution be stayed on condition that the applicant pay the required security into the first respondent’s trust account, pending the outcome of the review.

[10] Finally, there is no reason why costs ought not to follow the result. This is not a matter that affects any collective bargaining or employment relationship; the dispute relates only to the enforcement of an arbitration award. Had the applicant complied with its obligations in terms of section 145 (7), these proceedings would have been unnecessary.

I make the following order:

1. The execution of the writ issued under case number GH ABC 7017 – 21 on 30 August 2021 is stayed, pending the outcome of the review application filed under case number JR 1962/21, on condition that the applicant pays the sum of R480 000 into the trust account of the first respondent within 10 days of the date of this judgment.

2. The applicant is to pay the costs of these proceedings.

André van Niekerk

Judge of the Labour Court of South Africa

REPRESENTATION

For the applicant: Adv Maritz, instructed by JJ Badenhorst and Associates Inc.

For the second respondent: Adv Groenwald, instructed by Wynand du Plessis Attorneys