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THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

 

Not Reportable

case no: J966/23

In the matter between:

 

MARQUIS FINANCE	Applicant
and
DAVID ALAN QUINN	First Respondent
COMMISSIONER TERRY MOODLEY N. O	Second Respondent
THE CCMA	Third Respondent
SHERIFF SANDTON NORTH	Fourth Respondent

Heard: 13 July 2023

Order:  13 July 2023

Reasons: 19 July 2023

Summary:  Urgent application seeking to stay the enforcement of an arbitration award pending the outcome of a review application. Respondent contends that a stay can only happen if security is paid or reduced or absolved from within the contemplation of section 145 (7) and (8) of the LRA. The requirements of a stay application met. The stay application is not dependent on the issue of security, either a reduction or absolution from it. Held: (1) The operation of the arbitration award is stayed. Held: (2) There is no order as to costs.

 

 

REASONS OF THE ORDER - JUDGMENT

 

 

MOSHOANA, J

 

Introduction

 

[1] On 13 July 2023, after listening to argument from both parties, this Court issued an order in the following terms:

 

1.1 The matter is enrolled as an urgent application and the forms and service provided in the Rules of Court are dispensed with.

1.2 In terms of section 145 (3), the enforcement of the arbitration award issued under case number GAJB2491-21 against the applicant is stayed pending the outcome of the review proceedings.

1.3 There is no order as to costs.

 

[2] On 17 July 2023 the first respondent, Mr David Alan Quinn (Quinn), by way of a written notice requested to be furnished with the reasons for the above order. That notwithstanding, in terms of section 34 of the Constitution of the Republic of South Africa, 1996 (Constitution)[1], everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a Court. To my mind, the only way a Court may demonstrate to a party an application of the law to its decision is by furnishing reasons for any order a Court makes. Additionally, owing to the fact that in terms of section 165 (5) of the Constitution, the Court issues an order or decision that binds all persons, it is imperative that a Court must issue or make a reasoned order or decision. What then follows hereunder are the reasons for the order outlined above.

 

Background facts

 

[3] Regard being had to fulcrum of the present dispute, it is obsolete to narrate all the facts that obtain in the present dispute. It suffices to mention that on 26 April 2023, the erudite Commissioner Terry Moodley (Moodley) issued an arbitration award in terms of which it was found that the dismissal of Quinn was procedurally and substantively unfair. Moodley ordered the applicant, MQ Finance (Pty) Ltd (MQ), to pay to Quinn as compensation an amount equivalent to 12 months’ salary being R1.5 million. Aggrieved thereby, MQ, on 17 May 2023, launched an application in terms of section 145 (1) of the LRA seeking to review and set aside the arbitration award made by Moodley. The review application is pending the decision of this Court. That notwithstanding, Quinn proceeded to take steps to put into operation the impugned award. An undertaking was sought and not granted for Quinn to halt the steps pending the decision on the review application. When MQ approached this Court, the Sheriff of Sandton North had already levied judicial execution on the property of MQ. The next legal step is for the Sheriff to remove and commence a process of a sale of those judicially attached assets. By the time the application reached this Court, Quinn was still adamant that the process of execution cannot be halted without putting up security of R1.5 million or seeking an order for being absolved form furnishing security or reduction of security.

 

[4] Owing to the fear that its assets are likely to be sold and lost to it, MQ launched the present application. The application is duly opposed by Quinn.

 

Evaluation

 

[5] In opposing the application to stay, Quinn argued that the application must not be heard as one of urgency for reasons that MQ delayed in approaching the Court as such any urgency that may have existed weaned away and the one used to approach this Court is one that is self-created. With regard to urgency, this Court is guided by Rule 8 of the Labour Court Rules. The two requirements to be satisfied are that (a) a party must provide reasons why the matter is urgent and (b) show that an urgent relief is necessary to a point that a substantial relief may not be obtained in due course. In casu, it is undisputed that Quinn is forging ahead with the enforcement of the impugned arbitration award and is not prepared to provide an undertaking to await the decision of this Court on the pending review application. It was submitted on behalf of Quinn that the judicial attachment so levied does not pose a threat to the assets placed under such an attachment. It is simply a security for the satisfaction of the debt, so it is argued. I am unable to agree with this submission. Levying a judicial attachment is for one reason only – to satisfy the judgment debt. Unlike a Mareva injunction, the judicial attachment does not preserve executable assets. The next legal step if executionary steps are not halted is the sale in execution. A party concerned with the dissipation of executable assets may approach a Court to obtain a Mareva injunction – preservation order. In the circumstances of this matter, the Court is satisfied that an urgent relief is necessary. Should the underlying causa –arbitration award – be removed in due course, there will be no basis for MQ to have lost its assets through a forced sale in execution. Accordingly, the requirements of Rule 8 have been met.

 

[6] I now turn to the merits of this application. Section 145 (3) of the LRA provides that the Labour Court may stay the enforcement of the award pending its decision. Undoubtedly, there is overwhelming evidence that as at the time of the bringing of the present application, Quinn was enforcing the arbitration award. MQ is seeking to stay that on-going enforcement process. To that end section 145 (3) of the LRA affords the Labour Court with a wide untrammeled discretion to order a stay. The requirements of a stay application has been succinctly set out in a number of the judgments of this Court. It is unnecessary to enumerate them yet again in this judgment. It suffices to mention in overarching terms that real and substantial injustice will be suffered by MQ if a stay is not ordered.

 

[7] Mr Naidoo, counsel for Quinn, forcefully argued that one of the requirements for the granting of the stay is the case being made that security is capable of being reduced or dispensed with. Since MQ has failed to make a proper case for the reduction or dispensing of security, the section 145 (3) stay must be refused, so went the argument. This Court in Emalahleni Local Municipality v Phooko NO and Others (Emalahleni)[2] held that a section 145 (3) application is a discrete and distinct application. It has nothing to do with the security contemplated in section 145 (7). This Court based on the stare decisis principle is bound to follow Emalahleni, unless it is satisfied that Emalahleni is clearly wrong. Although Mr Naidoo did not expressly state that Emalahleni is wrong, by persisting with the argument outlined above, Mr Naidoo, by implication he says Emalahleni was wrong.  This Court takes a view that Emalahleni is not wrong. In fact Mr Peer, appearing for MQ relied on it and Robor (Pty) Ltd (Tube division) v Joubert NO and others[3] in order to advance a case in terms of section 145 (3) application.

 

[8] It is Mr Naidoo’s contention that the argument so punted received an imprimatur from the City of Johannesburg v Samwu obo Monareng and others (Monareng)[4]. This Court in Emalahleni has rejected a similar notion. It reasoned and continue to reason in this judgment that if payment of security on its own is sufficient to suspend the operation of the arbitration award, mutatis mutandis, if the requirements of a stay application are met, the stay order on its own must halt the operation of the award.

 

[9] This Court wishes to add that subsection 145 (7) must operate once a review application is launched whilst on the other hand, as held in Emalahleni, a stay is not dependent on the launch of review proceedings. In terms of old Rule 49 (11) of the Uniform Rules, a review application had the ability to suspend the operation of an order under review. Such rule created a regime that now operates in section 18 of the Superior Courts Act (SCA)[5]. In my view, section 145 (7) is aimed at dispelling the notion that launching of a review, in of itself, suspends the operation of the impugned arbitration award. Under the section 145 (7) regime, once a review application is launched, an applicant for review is not a shield for the operation of the arbitration award unless security to the satisfaction of the Court in accordance with subsection (8) is furnished. Stripped to its essential bare, subsection (7) is made of the following noticeable ingredients: -

 

(a)  Institution of  review proceedings;

(b)  No suspension of the operation of an arbitration award;

(c) Unless, the applicant for review furnishes security.

 

[10] The word ‘unless’ as employed by the legislature seeks to negate the phrase “does not suspend the operation of an arbitration award”. Unless is a preposition introduced to denote an exception. It separates what follows it from what precedes. Thus, if security is furnished, the institution of review proceedings do suspend the operation of an arbitration award. All what furnishing of security does is to remove the phrase “does not” from the equation. In order for does not to be removed, no Court application is required.

 

[11] There seem to be a misconception that where subsection 145 (8) reference “unless the Labour Court directs otherwise” such refers to a section 145 (3) application. In my view, it does not. It is indeed so that the Labour Court can only direct by a Court order. However, using the powers in section 158 (1) of the LRA, the Labour Court is capable of issuing directive orders. I agree that under a section 145 (3) application, where necessary, the Labour Court may issue directional orders as well, which may serve as the conditions mentioned in Monareng. Since the Court retains a wide discretion, it may, if necessary, make directional orders over and above a stay order. That said, this Court maintains that a section 145 (3) application is there primarily for a stay and not necessarily to give review proceedings the impetus to suspend the operation of an arbitration award impugned. If a party approaches the Labour Court with a stay application, in order to grant the stay, which takes a form of an interim interdict, the Court must be satisfied that the requirements of a stay are met. If they are met cadit quaesto. If one were to consider foreign jurisdiction as directed by the Constitution[6], in RJR MacDonald Inc v Canada (Attorney General)[7] it was confirmed that a stay application involves consideration of three factors, and those are:

 

(a)  Is there a serious issue to be tried?

(b)  Will the party requesting the stay suffer irreparable harm if the stay is not granted?; and

(c) Does the balance of convenience favour the granting of the relief?

 

[12] On the other had a direct otherwise order sits on a different platform, in my view. It has nothing to do with staying the operation of an award but it has everything to do with the quantum of the security furnished. Strictly speaking the direction otherwise has to do with being absolved from furnishing security and not a stay of the enforcement of an award. When a Court absolves a reviewing party from furnishing security, all it does, in my view, is to remove the does not, whereafter the institution of review proceedings suspends the operation of the arbitration award. Accordingly, after the direct otherwise order, what buffers the operation of the arbitration award is the instituted review proceedings. On the contrary, in a section 145 (3) situation, what prevents the enforcement of the award is an order to stay (interdict on an interim basis) pending the Court’s decision. Where a matter pends in Court, two possibilities may ultimately arise. The first possibility is one where a Court non-suits an applicant. The second possibility is one where a party’s case is upheld by a Court. Applications for a stay are more concerned with the second possibility, when it considers the real and substantial injustice[8]. An assumption must be made that the underlying causa –the arbitration award – may be removed. It is logical that what must kick a Court into gear is the existence of a dispute over the underlying causa as opposed to validity of dispute. The threshold in my view is low in that it requires identification of a serious issue –the review application is one that is not frivolous and vexatious.

 

[13] For all the above reasons, the argument advanced by Mr Naidoo is rejected. The conclusion I reach is that a section 145(3) application does not require the furnishing of security for it to be granted. All it requires is for the interim interdict requirements as discussed above with reference to foreign jurisdiction to be met.

 

Conclusions

 

[14] In summary, this Court is bound to follow Emalahleni. It reverberates its views that a section 145 (3) application is not dependent on the furnishing of security. This Court was satisfied that the requirements of an interim interdict have been met hence it urgently made the order referred to at the dawn of this judgment.

G. N. Moshoana

Judge of the Labour Court of South Africa

Appearances:

 

For the Applicant: Mr. Y Peer

 

Instructed by: Crawford and Associates, Johannesburg.

 

For the Respondent: Mr K Naidoo.

 

Instructed by: C De Villiers Attorneys, Parkwood.  

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