CASE LAW UPDATE

Facts: The dispute between the parties has its genesis in a written agreement concluded between the applicant and the defendant. In terms of that agreement, the plaintiff sold to the defendant 100% of his member's interest share in a close corporation. The defendant duly paid an amount of R4,37 million towards the purchase price. The plaintiff signed the necessary documents transferring his members interest in the close corporation to the defendant. The defendant thereafter and in terms of the second agreement paid an amount of R420,000 in respect of the agreed purchase price. No further amounts were paid in terms of the second agreement. The plaintiff directed correspondence to the defendant placing her on terms to rectify what the plaintiff considered to be her breach of the agreements. The defendant contended, for the first time and some two years after concluding the agreements with the plaintiff, that the second agreement was unlawful and void because it amounted to a credit agreement as defined in the in the National Credit Act 34 of 2005. The plaintiff applied to the High Court for interim relief for the return of the CC’s business to the plaintiff and cancellation of the agreements between the parties.

Application: This is an interlocutory application in terms of Rule 35(7) of the Uniform Rules to compel further and better discovery. The defendant seeks an order compelling the plaintiff to make further and better discovery of some 14 categories of documents listed in a notice given by the defendant pursuant to the provisions of the Rule 35(3) notice. The plaintiff resists the application primarily on the basis that the documents sought by the defendant have either been already discovered, are irrelevant, or are not in his possession. The plaintiff further contends that the application is an abuse and amounts to an impermissible fishing expedition.

Discussion: No reasonable grounds have been shown from the pleadings or the previously discovered documents which demonstrate that the additional documents sought in paragraphs 1 and 2 of the Rule 35(3) notice in fact exist and are in the possession of the plaintiff. The court is not persuaded that there are any grounds to reject the plaintiff’s statement on oath that he is not in possession of the documents sought in paragraphs 1 and 2 of the defendant’s notice other than those which he has already discovered. The nondescript formulation “services rendered, and goods supplied” and “security equipment purchased” scarcely assists in determining precisely what documentation is included or excluded by paragraphs 3 and 4 of the Rule 35(3) notice. The specificity required by Rule 35(3) for the identification of documents sought by way of further and better discovery, is entirely absent. It is not consistent with principles of fair civil litigation for a party to whom an overbroad broad and generalized Rule 35(3) notice is directed to have to effectively guess what is included within the scope of the notice and what is not.

Findings: Paragraph 5 of the Rule 35(3) notice seeks discovery of documentation relating to the plaintiff’s employees and the CC’s current or historic clients. No replacement Rule 35(3) notice was filed by the defendant to remedy its admitted overbroad request in paragraph 5. On the contrary and flying in the face of this plainly admitted concession in the defendant’s replying affidavit, it was contended that the defendant remained entitled to further and better discovery of the documents set out in paragraph 5. The overbroad formulation of paragraph 5 suffers from an additional flaw. In the plaintiff’s answering affidavit, he states that he does not know who the CC clients are, and it is not clear who the CC’s “historic” clients are. This statement by the plaintiff is not addressed let alone disputed in reply. There is no basis to order to plaintiff to discover documents and communications with present and “historic” clients of the CC when it is undisputed that the plaintiff does not even know who these persons are. The purpose of further and better discovery in terms of Rule 35(3) is not to order parties to undertake the impossible. The order sought for discovery of the plaintiff’s personal bank statements in terms of paragraph 14 of the Rule 35(3) notice is entirely unsupported. This application and the manifestly overbroad terms of the further discovery sought by the defendant is a classic case of a fishing expedition and an abuse of the discovery process.

Order: The application is dismissed. The defendant is to pay the costs on Scale C.

MAGARDIE AJ

Facts: The business of the applicant (Steiner) is to render hygiene services to clients in diverse industries. Ms Manyathela was employed as a help desk administrator until her dismissal in 2021. She had worked for the Applicant for more than 11 years at the time. The help desk was a crucial business function and Manyathela was the first contact point for clients. Her task was to open a “ticket” (a form of job card) for each customer query and to follow up on the completion of the task, so the ticket could be closed within 48 hours of the query being logged. In 2020, Manyathela received a final written warning for negligence relating to overdue tickets she was responsible for. In 2021 she was advised that her work output had escalated to unacceptable levels and she was given a deadline to resolve all her tickets. This prompted Manyathela, on the same day, to send her own email to various operational staff, merely stating: “Please find attached tickets to be close by Friday as per Andre.”  She was later charged and found guilty of gross negligence, due to the number of overdue tickets. Based on this, and the fact that her previous final written warning was still current, she was dismissed.

Application: To review and set aside an award in which the arbitrator found that Manyathela was dismissed on a substantively unfair basis and awarded her reinstatement with backpay. She did not contest the procedural fairness of her dismissal.

Discussion: The arbitrator could not understand why they did not give warnings to the operations staff, or why her direct manager could not “lift a finger” to help when he could see on a weekly basis from emails and meetings that the backlog was growing. The arbitrator found that the managers should have approached the operations team to solve the problem of jobs not being completed, rather than focusing on Manyathela’s role. The arbitrator concluded that the real problem Steiner was having was failure by the staff responsible for remedying queries, and not the closure of the tickets as such. Manyathela was only responsible for closing a ticket once the work had been done. She could not close a ticket before that happened and could not be held responsible for the operational staff neglecting their duties. Accordingly, she was not guilty of the charge. The arbitrator also found inconsistency in discipline, compared to the way in which a manager’s secretary was dealt with.

Findings: The arbitrator’s conception of Manyathela’s role was that it was a relatively passive one, in terms of which she had done what was expected of her, provided she closed off tickets when the jobs were done. But her job was to monitor open tickets and to ensure that customer queries were dealt with promptly. Her job description required her to check tickets daily and investigate those which were overdue. Overdue tickets had to be escalated daily. Had the arbitrator not misconstrued the real nature of Manyathela’s duties, he would have been compelled to decide if she had successfully rebutted the evidence that she had allowed a large number of overdue open tickets to remain unresolved, and had not systematically escalated them to her managers, when the 48-hour period was up. Manyathela had also been issued with a severe warning for the same misconduct and must have been alive to the fact that if it recurred she could face dismissal. Under these circumstances, it cannot be said that her dismissal was substantively unfair.

Order: The arbitration award is set aside and replaced with an award that the dismissal was substantively fair. No order is made as to costs.

LAGRANGE J

Facts: ArcelorMittal (applicant) launched an urgent application to declare that the intended strike action by NUMSA and GIWUSA and their respects members (employees) as unprotected, and to interdict and restrain them from participating in the intended strike action. The interdict was sought against two categories of employees – those who work in the maintenance service and all other employees. The court was of the view that the applicant has made out a prima facie case for interim relief on the strength of the Essential Services Committee ruling which declared the Blast Furnaces, Coke Battery and Steel Plants departments of the applicant as maintenance services. This order remains operative.

Application: The court was however not inclined to entertain the application against the category of all other employees on the basis of the applicant’s non-compliance with section 68(2) of the Labour Relations Act 66 of 1995 (LRA). This part of the application was postponed and this judgment deals only with the application against these employees.

Discussion: The genesis of this application is the notices of termination of the employees’ contract of employment following a facilitated large scale retrenchment process. The applicant contends that the strike is unprotected because NUMSA did not follow the provisions of the collective agreement and the processes required. As parties cannot contract out of the LRA, even if the collective agreement regulated this issue and NUMSA was required first to follow the internal dispute resolution process, the court has serious doubt that such an agreement would pass constitutional scrutiny and be allowed to undermine and delay the employees’ fundamental right to strike in the context where time means everything to the employees whose notice period continues to run. Once the procedural pre-conditions relating to the issue or demand regulated by the LRA have been met, the strike is protected.

Findings: The respondents in this matter have, at least for now, elected to use the right conferred to them in terms of section 189A(7)(b). They have not, for now, referred an unfair dismissal dispute. This distinction is material. The right to strike in section 189A(7) diminishes with every passing day for dismissed employees who are currently serving out their notice periods and those remaining employees who act in solidarity with their fellow dismissed employees because, once the dismissal takes effect after the notice period, these dismissed employees will lose the right to strike against the applicant. The collective agreement finds no application in this matter. There is no provision expressly regulating mass retrenchment strikes which then means the court must read into the agreement to find that the agreement implicitly requires the employees to follow the internal procedures before referring the dispute to conciliation. The strike embarked upon by NUMSA and its members who are non-maintenance service employees is protected.

Order: The application to declare the strike action unprotected is dismissed.

MAKHURA J

Facts: Port St Johns is a rural, tourist town nestled in the Wild Coast, Eastern Cape. The Caguba Community Property Association acquired land in this picturesque coastal strip of land. The Regional Land Claims Commission, the Port St Johns Municipality and the Caguba Community entered into a written settlement agreement which transferred a portion of land to various stakeholders. The Caguba Community benefitted from this award. The land on which Mr Fono commenced with the construction of a tourist facility belongs to that community. Mr Fono commenced building operations without any approved building plans. A municipal official, Ms Zide, and other municipal functionaries visited the property and established that a building was being erected without the approved building plans. She thereafter issued Mr Fono with a letter informing him that he was in breach of municipal town planning and building by laws, the provisions of the National Building Regulations and Building Standards Act 103 of 1977 and the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA). She consequently demanded that he cease building operations immediately. Although Mr Fono had undertaken to comply with the demand, she subsequently discovered that he had nevertheless proceeded with the construction. The municipality was accordingly forced to launch an urgent application in the High Court for appropriate relief.

Appeal: This is an appeal against the whole judgment and order of the full court. The full court, sitting as a court of appeal, upheld the appeal against the whole judgment and order of the High Court, sitting as a court of first instance, and declared unlawful and set aside the conduct of the appellant, Mr Fono, in constructing a building without approved building plans, and ordered him to demolish the building. The appellants appeal against that order with the special leave of the Supreme Court of Appeal.

Discussion: In upholding the municipality’s appeal, the full court concluded that the court of first instance made two fundamental errors in dismissing the municipality’s application for an interdict. First, in finding that the Building Standards Act did not apply to the property, and second, in finding that Mr Fono did not contravene the provisions of the SPLUMA. In essence, in upholding the appeal, the full court equated the impermissible differentiation caused by the Land Affairs General Amendment Act 61 of 1998 to the consequences which would result from a finding that the Building Standards Act does not apply in the territory of the former Transkei. In addition, the full court reasoned that the finding of the court of first instance renders the Rationalisation Act unconstitutional, in that it results in the Building Standards Act discriminating against persons who reside in areas such as the former Transkei, by denying them the protection and the benefits ordinarily afforded by the Building Standards Act. It consequently found that the Building Standards Act applies to the property even though it is within the territory of the former Transkei.

Findings: There are fundamental problems with the manner in which the full court dealt with the issue of the applicability of the Building Standards Act in the area where the property is situated. The full court’s reliance on the Lester case was misplaced. The property in that case was not situated in the former Ciskei homeland, as the court erroneously assumed, but in Kenton-On-Sea, a town situated in South Africa. It was therefore common cause that the Building Standards Act applied to that property. The judgment also only concerned the issue of the peremptory wording of section 21 of the Building Standards Act in respect of demolition orders. The full court erroneously assumed that the municipality had promulgated by-laws which regulate building plans and constructions. It consequently interdicted Mr Fono from proceeding with the construction of the building, until such time as he had complied with the applicable municipal by laws and regulations. In the absence of municipal by-laws, it is obviously not possible for Mr Fono to comply with the order. Mr Fono’s assertion that the building is structurally sound and does not pose any safety risks can be verified by the municipality. It is therefore only fair that Mr Fono must be afforded an opportunity to remedy the breach.

Order: The appeal is upheld in part. The order of the court of first instance is set aside and replaced. (See para [2] of order).

MANTAME AJA (MOCUMIE JA, MABINDLA-BOQWANA JÁ, SMITH JA and MJALI AJA concurring)