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REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

CASE NO: JR1537/11

In the matter between:

PORTAPA (PTY) LTD T/A SUPABETS	First Applicant
and
COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION	First Respondent
COMMISSIONER ADV THABANG SERERO (N.O.)	Second Respondent
ELSPETH MUTIZE	Third Respondent

Heard:.............24 October 2013

Delivered:.......8 December 2014

Summary: (Rescission application – Review application – no facts supporting grounds of review set out in the applicant’s affidavit – rescission applications granted – review applications dismissed)

JUDGMENT

LAGRANGE J

Introduction

[1] This matter concerns an application to rescind a previous order of this Court dated 9 May 2013 in which the applicant’s review application was dismissed, and in the event the Court’s order is not rescinded, that the review application be reconsidered afresh.

Chronology of proceedings

[2] On 15 March 2011 a default arbitration award in favour of the third respondent, Ms E Mutize, was issued by the second respondent (‘the arbitrator’). The matter was heard by default in the absence of a representative from the applicant in these proceedings (‘the employer’). The arbitrator was satisfied that proper notice of the conciliation/arbitration hearing had been sent by telefax to the employer. Mutize, an accountant, claimed that she had been compelled to resign on 26 January 2011 on account of abuse she suffered at the hands of the employer because of her attempts to ensure that the employer was tax compliant. The arbitrator upheld her claim that she had been constructively dismissed and found her dismissal was substantively unfair, awarding her four months’ salary as compensation.

[3] On 4 April 2011 the employer applied to rescind the arbitration award, which was dismissed on 6 June 2011.

[4] On 8 July 2011 an application was launched by the employer to set aside and review the rescission application. On 7 November 2011 Mutize filed an application to dismiss the review application, which the employer claims it never received despite an affidavit of service by Mutize of the same date that she served it by hand, but for which there was no signature confirming receipt.

[5] The matter was enrolled for hearing on 9 May 2012, in terms of a notice of set down dated 5 January 2012. The employer claimed not to have received this as the address to which the registered mail of the notice of set down was sent by the Court was its physical address but not its postal address, and not the address set out in the notice of the motion in the review application.

[6] On 9 May 2012 the Court accordingly dismissed the review application by default and made the arbitration award an order of Court. The employer claims it only became aware of the order when it received the order by email the same day. Consequently, it then launched an application to rescind the order in the review application, which Mutize also opposed.

[7] On 7 March 2013 a notice of set down of the rescission application for 16 April 2013 was sent to the employer and not to its attorneys of record, even though an earlier notice had been properly faxed to the attorneys of record calling on them to file heads of argument which they did on 19 February 2013.

[8] On 16 April 2013 the rescission application was accordingly dismissed in the absence of the applicant employer. On 17 May 2013, the employer served a letter on the registrar requesting that the rescission application be set down. A few days later on 22 May 2013 a writ of execution was issued by the registrar of the Labour Court.

[9] Some time in June 2013, while the employer was waiting for a date for the rescission application to be heard, an amount of R110 000 was attached in the employer’s bank account in terms of a warrant of execution issued by the registrar. This alerted the employer to the dismissal of the previous rescission application, and it promptly launched a further rescission application and an urgent application to stay the writ of execution on 13 June 2013.

[10] On 25 June 2013, the writ was stayed and an order was made that the moneys that had been attached must remain in an interest-bearing account of the Sheriff until the finalisation of the rescission application and, if necessary, the review application.

The rescission application in respect of the default judgement of 16 April 2013

[11] I am satisfied on a consideration of the sequence of events and the documentary evidence that the applicant was entitled to receive notice of set down served on its chosen legal representatives, its attorneys of record in terms of Rule 7(2)(d) of the Labour Court rules. It also is clear from the enquiries made by the attorneys of record regarding the progress of the rescission application that they were unaware that the matter had been set down on 16 April 2013 for hearing. Moreover, their actions in attempting to have the matter set down indicated that the employer was intent on pursuing the matter.

[12] In the circumstances, I am satisfied that the employer’s failure to attend Court on 16 April 2013 was not on account of any wilful default and that had it known of the Court hearing, its representatives would have attended. That is more than sufficient reason to rescind the order handed down on that date.

The original rescission application

[13] Having rescinded this Court’s judgement in the previous rescission application, the merits of original rescission application must be dealt with.

[14] The applicant claims that it did not attend Court on 9 May 2012 to argue its review application, because on that occasion also it did not receive the notice of set down. In this instance, the notice of set down was sent to the physical address of the employer itself and not to the address stated in its notice of motion launching the review proceedings. When the review application was launched, the employer was not yet using attorneys as attorneys of record, and stipulated the address at which it would accept service of documents as follows:

“PORTAPA t/a SUPERBETS

PO Box 677

Melrose North

2076

Tel: (011) 2207000

Fax: 086 503 473”

[15] It is important to note in this regard, that instead of simply opposing the review application, the applicant had filed an urgent application to dismiss the review application, under the same case number (JR1537/11), and identified the address for service of that application as follows:

“PORTAPA t/a SUPABETS

Antonio Paddock

50 Athol Oaklands Road

MELROSE

JOHANNESBURG

2916”

[16] The most probable explanation for the registrar sending the notice to the employer’s street address is that Mutize had designated it as her choice of address for service on the applicant, and since the application to dismiss the review application bore the same case number, it is quite possible the clerk relied on the addresses in the dismissal application rather than the addresses in the review application. This situation would have been avoided had Mutize used the address chosen by the applicant in the main application. The dismissal application should have used the applicant’s chosen address for service as it was incidental to that application. Once the employer became aware of what had happened, it acted promptly to reverse the default judgement. In relation to this application as well, I do not think that the employer was in wilful default or that it had no serious intention of proceeding with the application. It might be argued that the applicant could have received the notice of set down even though it was sent to its physical address, but there is no proof this occurred. Moreover, Rule 7(2)(d) governing the choice of address for receipt of pleadings is there partly to provide greater certainty about effective service, and a party cannot simply choose to serve its own papers on an opposing party at the address which suits it, when that other party has specifically identified the address at which it will not be able to dispute service affected at that address. The principle has the added advantage that a party to litigation is able to ensure that its staff, if it has any, can be alerted to expect to receive legal process through that channel. Irrespective of the employer’s ultimate prospects of success, it is evident from the argument on the merits of the arbitrator’s rescission ruling, which the applicant seeks to set aside, is that its grounds of review are not frivolous. Coupled with the fact that it failed to attend the hearing through no fault of its own and immediately pursued the matter thereafter, I am satisfied that the applicant is entitled to rescind the default judgement dismissing its review application.

Merits of the review application

[17] Matters get appreciably more complicated when dealing with the original default arbitration award and the ensuing rescission ruling, which the applicant wishes to set aside on review.

The commissioner’s ruling in the rescission application

[18] A brief summary of the respective averments of the parties is necessary to understand the ruling.

The employer’s case

[19] The founding affidavit filed in the application to rescind the default arbitration award is attested to by a certain AJ Paddock (‘Paddock’). In the affidavit, he simply baldly states that he is an adult person duly mandated in the main dispute to depose to the affidavit. In the affidavit he does not identify what relationship he bears to the employer, nor where his authority to depose to the affidavit stemmed from.

[20] He claims that he received notification of the default award on or about 1 April 2011 which ‘came as a complete surprise’ to the applicant which had not received notification of the arbitration proceedings. He goes on to point out that the address contained in the arbitration award is not the one used by the employer. The address set out on the cover of the arbitration award is the post office box address mentioned in paragraph [15] above. He further does not dispute that the fax number for the applicant, appearing on the face of the arbitration award, was used to conduct business of the applicant (a betting agency) but suggests that it was only used by the capturing clerks who received betting forms on that fax which could number in the region of 200 faxes per day on that line and as it was accessible to numerous (unnumbered) clerks any one of them might have disposed of it or the machine could have been out of paper due to the amount of faxes received. None of this somewhat speculative evidence was supported by an affidavit from any person working with the fax machine in question.

[21] Paddock goes on to say that the employer’s address was in fact PO Box 5353 Meyersdal 1447 and that the employer had notified all employees “that any legal document must not be faxed” to the number appearing on the arbitration award for the reasons mentioned.

[22] Paddock also claims that the applicant was not even aware of a dispute having been referred to the CCMA by Mutize because it did not even receive the referral forms.

[23] He then proceeded to describe the employer’s prospects of success as excellent in the following terms:

“The applicant furthermore submits that it has excellent prospects of success, if given the opportunity to oppose the arbitration, as it is evident from the arbitration award that the respondent presented the commission with a one-sided version of what transpired, and the only way that factual disputes could be addressed and resolved is by means of cross-examination of both parties.

It should be noted that the respondent has resigned from the employer and that there is not a valid came against the applicant and the employer has numerous witnesses that would testify that the respondent left the companies employ out of her own free will and was not due to any pressure or any other claim as brought by the respondent in the arbitration hearing.

It should also be noted that the applicant has a proper disciplinary code and procedure and that it applied and adhered to it unconditionally, and as such every person would be subject to this procedure prior to termination of services for any reason whatsoever.”

This was the sum total of the applicant’s motivation, which the arbitrator supposedly ought to have realised indicated some prospects of success.

[24] The rest of the founding affidavit consists of various submissions citing, amongst other things, legal authorities as to why a fax transmission slip was not sufficient proof of service in CCMA proceedings.

Mutize’s response

[25] Mutize took issue with almost every one of the limited averments made by Paddock.

[26] Firstly, she alleged that even though Paddock indicated on the notice of motion that he was the human resources manager of the applicant, though he did not make any claims about his status in his affidavit, he was not an employee of the applicant and that he invoiced the applicant monthly as “Paddock and Associates”. Accordingly, she disputed his authority as a company representative or employee or legal representative to depose to the affidavit.

[27] Secondly, she claimed that the address of the applicant as provided to the Gauteng Gambling Board was the postal address mentioned on the arbitration award.

[28] Further, she denied that the address he referred to was anything but his own personal postal address and fax number.

The arbitrator’s reasoning

[29] The arbitrator concluded that the applicant had failed to submit a proper application for rescission in terms of section 14 for the Labour Relations Act, 66 of 1995 (‘the LRA’) read with rule 31 of the CCMA rules. In arriving at this conclusion, the arbitrator focused on the locus standi of Paddock to depose to the founding affidavit on behalf of the applicant. He correctly notes that Paddock did not provide any evidence of where he derived his authority to launch the precision application or to depose to the affidavit on behalf of the applicant, noting also that the evidence showed he was not an employee of the applicant and, lastly, no replying affidavit to refute the challenge to his authority was filed by the applicant.

[30] In its founding affidavit on review, the applicant contends that the reason it did not file a replying affidavit was that it never received the answering affidavit of Mutize in the rescission application.

Grounds of review

[31] The applicant argued that the rescission ruling ought to be set aside on review on a number of the ostensible grounds set out in the founding affidavit again deposed to by Paddock dated 7 July 2011. The first four ostensible grounds are simply a verbatim repetition of the same averments made by Paddock in support of a submission on the applicant’s prospects of success, which are quoted in paragraph [23] above.

[32] The further purported grounds of review are set out in full as follows:

“(e) It is therefore the applicant’s submission that it was not wilfully in default and that the applicant has done everything in its power to oppose the dispute brought by the respondent in this matter.

(f) I state that the standard for review, whether the decision reached by the Commissioner is one a reasonable decision maker could not reach, is satisfied if regard is had to the evidence adduced by the parties in the rescission application by means of affidavit.

(g) The Commissioner respectfully failed to apply his mind to the issues at hand and came to a ruling that is reviewable.

(h) The Commissioner Furthermore failed to follow important logical steps on the road to his ruling.”

Evaluation

[33] What is immediately apparent is that the alleged grounds of review set out in Paddock's affidavit [are] for the most part not even grounds of review at all. Moreover, they were not supplemented. The last two grounds cited are essentially the broadest kind of submissions devoid of factual content and could not be considered, in the absence of the specific factual grounds for those submissions being set out on affidavit.

[34] No supplementary affidavit in which this shortfall in providing concrete factual allegations might have been rectified was filed in the matter. It was only in the applicant’s heads of argument dated 30 September 2013 that it sought to introduce the factual basis on which the last two submissions might be made. A review cannot be conducted on this basis. The founding papers must set out the factual basis for the submissions that the commissioner acted irrationally or irregularly. The affidavits in a review application are not where factual conclusions stated, but the very factual basis for drawing those conclusions must be set out. In Comtech (Pty) Ltd v Commissioner Shaun Molony N.O. and others,[1] the LAC observed in that matter, which also concerned a review:

“[15] The difficulty with the appellant’s case in this regard relates to whether the founding affidavit contains the factual grounds required by Rule 7A(2)(c) of the Rules of the Labour Court. Rule 7A(2)(c) of the Rules of the Labour Court requires a party who applies for a review, such as the appellant in this matter, to deliver a notice of motion that must be supported by 'an affidavit setting out the factual and legal grounds upon which the applicant relies to have the decision or proceedings corrected or set aside'. Rule 7A requires the notice of motion to call upon, in this case, the commissioner 'to show cause why the decision or proceeding should not be reviewed and corrected or set aside'.”

[35] In the applicant’s submissions in argument it argued, in effect, that the arbitrator could not reasonably have concluded that Paddock needed to be authorised to depose to the founding affidavit, and that he failed to appreciate that Mutize had allegedly not made out a case for a constructive dismissal claim.  It also argued that Paddock was unaware of Mutize’s answering affidavit in the rescission application and that is the only reason there was no replying affidavit filed by the respondent. However, that was a reason to seek the rescission of the rescission ruling, not a ground of review, because the arbitrator cannot be reviewed on the basis of evidence that ought to have been before him, but was not.

[36] The fundamental difficulties the employer has in this review application, is that, it did not even set out a factual basis for the arguments it wished to make. The Court cannot just entertain whatever grounds are advanced by a party when it files its heads. Not only is that contrary to the principle expressed in Comtech, but it also would mean that a party on review can set out the vaguest and most general grounds of review in its founding papers, only to reveal the factual underpinnings of its case when heads of argument are filed. Firstly, this will often be too late for the respondent party to deal with in any depth. Secondly, it means that the respondent was actually denied a proper opportunity to deal with those averments in its opposing affidavit in the review proceedings.

[37] In this matter, the applicant patently failed to lay the factual basis for cogent grounds of review or express more than two legitimate grounds of review in all but the vaguest terms.  In consequence, the review application must fail, even on the applicant’s own papers. In so far as the applicant might have been ill-served by its original representative in this matter in the preparation of the founding papers in the review, that is a matter for the applicant to address with its representative.

Costs

[38] I am satisfied that this is a case where the respondent is entitled as a matter of justice and equity to her costs incurred in opposing the review application, she is not entitled to the costs of opposing the rescission applications heard on 16 April 2013 and 24 October 2013.

Order

[39] In light of the above:

39.1 The default judgment of this Court on 16 April 2013 dismissing the application to rescind the judgment dismissing the review application handed down on 9 May 2012 is rescinded.

39.2 On reconsideration of the application to rescind the default judgment in the review application, handed down on 9 May 2012, that judgment is also rescinded including the order making the arbitration award in case number GAJB3266-11, dated 15 March 2011, an order of Court, which was made consequent to the dismissal of the review application.

39.3 On re-consideration of the review application of the rescission ruling of the second respondent issued on 6 June 2011 in case number GAJB3266-11, and the application to make the award an order of Court, the review application is dismissed and the award is once again made an order of Court.

39.4 The applicant must pay the third respondent’s costs incurred in opposing the review application, but not the costs incurred in opposing the rescission applications heard on 16 April 2013 and 24 October 2013.

_______________________

LAGRANGE J

Judge of the Labour Court of South Africa

APPEARANCES:

For the Applicant:.................W Hutchinson

Instructed by:........................Fluxmans Inc.

For the Third Respondent:.....A Goldberg of Goldberg Attorneys

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