THE
HIGH COURT OF SWAZILAND
JOHN
HENWOOD IN HIS CAPACITY AS LIQUIDATOR FOR
UMBERELLA
SERVICES MANAGEMENT (PTY) LTD
Applicant
And
LUCKY
G. MAHLALELA
1st
Respondent
DEPUTY
SHERIFF FOR THE DISTRICT OF MANZINI
MR.
MARTIN AKKER
2nd
Respondent
COMMISSIONER
OF TAXES
3rd
Respondent
ATTORNEY
GENERAL
4th
Respondent
Coram S.B.
MAPHALALA - J
For
the Applicant MR. S. MADAU
For
the Respondents MR. M. NSIBANDZE (For the 1st respondent)
MR
DLAMINI (For the 3rd and 4Th Respondents)
JUDGEMENT
ON POINTS IN LIMINE
(13/06/2002)
Before
me is an urgent application where points in limine have been raised
by Mr. Nsibandze on behalf of the 1st respondent. The order being
sought is as follows:
1. Dispensing
with the rules of this Honourable Court regarding notice, service and
that the
matter
be heard as one urgency;
2
2. That
a rule nisi do issue calling upon the respondent to show cause on a
date to be set by
the
court why:
a) The
first and second respondents should not be immediately ordered to
return to the applicant the following property;
1
x 10/100Mbpsethemet adapter
1
x canon S600 printer
1
x Samsung tower "P.C"
1
x keyboard
8
x 3 drawer chests
8
x cabinet set space desks
8
x secretary chairs (green material)
8
x P.C workstation inclusive of VGA screen, Mouse Keyboard
3
x wall hangings (prints)
1
x FP 7713 photocopier
1
x canon double jet fax B1 55 paperless
1
x pine desk
1
x presswood bookshelf
1
x brown presswood desk with vinyl unsert
1
x 1BM 4224 high speed dot matric printer
1
x 1BM AS400 Management system server
1
x super stack 3 - com and hub 24 port
1
x APC back-up UPS
1
x IBM 3476 intic window screen
1
x IBM keyboard for AS400
1
x link technology terminal inclusive of keyboards
2
x workstations "PC"
2
x two speaker reception counter
2
x VGA screens
1
x deluxe keyboard
1
x proline keyboards keyboard
1
x deluxe keyboard
1
x 56K modem
1
x reception unit and chair
1
x hub and AS 400 capelling
1
x Samsung aircon model WHO
4
x set speakers multi media
2
x easy mouse PS11 mike
3
b) That
the writ of execution issued by the court in favour of the first
respondent herein under case No. 348/2001 should not be stayed
pending the finalisation of this application.
c) That
the court makes an order that the question of the Income Tax due to
the third respondent) be referred to the third respondent for
determination and that such determination by the third respondent be
made and order of this court.
d) That
pending finalisation of this application the applicant tenders the
amount due to the first respondent to the above Honourable court.
e) That
pending the finalisation of this application prayers no. (a) and (b)
hereof operate as an interim order with immediate effect.
3. Further
and/or alternative relief.
The
application is supported by the affidavit of Mr. Earl John Henwood
who purports to act as a provisional liquidator of the company by
virtue of a resolution of the company of the 2nd April 2002 placing
it into liquidation. According to this affidavit on or about the 18th
December 2001, the first respondent (hereinafter referred to as
Mahlalela) brought an urgent application against the applicant to the
Industrial Court seeking payment of arrear salary. The claim for
arrear salary was based on an agreement concluded between Mahlalela
and the applicant. Mahlalela contended that he had not been paid in
accordance with the agreement. Mahlalela's contention was that the
agreement constituted an employment contract whilst the applicant
held the view that it was a consultancy service agreement. This was
the gravamen of the dispute between the parties.
The
applicant's contention was that since this was a consultancy
agreement, Mahlalela would be responsible for the payment of any
Income Tax from his allowance. Payment of the allowance would be
linked to performances, as is the norm with consultancy agreements.
The Industrial Court held that the contract entered into between the
parties was indeed an employment contract.
Mr.
Henwood avers in his affidavit that during the course of argument at
the Industrial Court, it was submitted on behalf of the applicant
that if the court found that the contract entered into between the
parties was an employment contract, then in terms of the Income Tax
Order No. 21 of 1975, the deductions of pay as you earn (PAYE) Income
Tax should be effected by the applicant and that amount forwarded
4
to
Commissioner of Taxes. When the court delivered its judgement it
stated, inter alia that the applicant (Mahlalela) will thus receive a
monthly allowance for the months of September, October, November and
December at the contractual rate of
E15,
000-00.
In
the result, the respondent (applicant in these proceedings) is to pay
E60, 000-00 to the applicant (1st respondent in these proceedings).
Since
the applicant did not remit PAYE taxation to the Commissioner of
Taxes for the months of June, July and August 2001, the Commissioner
of Taxes has been notified of this judgment to act as she deems fit.
The question of remitting the taxable amounts became the applicant's
duty.
Upon
receipt of the judgment of the court and without having first made
demand on the applicant's attorneys for payment of the judgment
amount, Mahlalela's attorneys issued a writ of execution out of the
Industrial Court on the 30th May 2002. Mr. Henwood avers in his
affidavit at paragraphs 20, 20.1, 20.2, 21, 22, 23, 24.1, 24.2, 25,
26.1, 26.2 the sequence of events leading to the launching of this
urgent application that actions of Mahlalela's attorneys demonstrated
a high degree of high handedness upon receipt of the judgement of the
Industrial Court.
Mr.
Henwood avers further that the applicant company is under voluntary
liquidation and for this reason its assets rest in the liquidator.
The applicant's erstwhile directors made a commitment to both the
Industrial Court and to the liquidator that they would meet all their
obligations with their creditors. The other creditors have accepted
this arrangement particularly since it had been agreed that once the
creditors claims have been settled, the applicant's business could be
sold as a going concern. In so far as Mahlalela is concerned, the
only issue that has prevented payment being affected to him is the
question of the tax directive. To this end, the applicant tenders
payment of the judgment amount to court and that the money be kept by
the Registrar of the Court whilst the issue of the tax directive is
resolved with the Commissioner of Taxes provided that the attached
goods be returned to the applicant.
5
Mr.
Henwood avers that the matter is urgent at paragraphs 32.1, 32.2,
32.3, 32.4, 32.5, 32.6 of the founding affidavit.
Mr.
Nsibandze on behalf of the 1st respondent raised a number of points
in limine. These points were argued before me on Friday, the 7th
instant where Mr. Nsibandze filed Heads of Argument and I reserved
judgement. Following is the determination of those points of law.
The
points of law raised in their abbreviated form are as follows:
a) This
court does not have jurisdiction to grant the order sought in prayers
2 [a] and [b]. The appropriate action would have been for the
applicant to approach the Industrial Court for an order staying
execution pending either that court or this court determining whether
prayers 2 [c] should be granted;
b) The
applicant has no locus standi to bring this application;
c) There
is no basis of urgency in this matter;
d) No
prima facie right to the relief sought has been established;
e) The
applicant has not established a well-grounded apprehension of
irreparable harm in the event that the interdict is not granted; and
f) The
applicant has not even suggested in his papers that he has no other
remedies other than to approach this court for the relief which he is
seeking. The applicants remedies are clear that (27.1) he can
approach the court which issued the order pursuant to which the goods
have been attached or (27.2) pay the judgement amount to the 1st
respondent.
Mr.
Madau replied only on point (a) viz the question of jurisdiction and
conceded point (b) that the applicant has no locus standi to launch
these proceedings. He did not address the court on the other points
raised and left them in the "hands of the court". My prima
facie view then was to dismiss the application on the basis of the
6
concession
made by Mr. Madau, however, Mr. Nsibandze rightly impressed on me the
need to address the point about jurisdiction, thus this judgement.
For
the sake of completes I will consider all the points in limine
raised, thus:
a) Jurisdiction.
The
execution that the applicant is requesting this court to stay is the
execution of the judgement of the Industrial Court.
In
terms of Section 14 [a] of the Industrial Relations Act No. 1/2000:
"An
order of the court made under this Act and directing the payment of
money or the delivering of property shall be enforceable by execution
in the same manner as an order of the High Court".
In
terms of Section 19 [43]; "The noting of an appeal under
subsection 1 shall not stay execution of the court order, unless the
court on application directs otherwise" (my emphasis). The court
is defined in Section 2 of the Industrial Relations Act as follows,
"means the Industrial Court established under Section 6".
I
agree in toto with the submissions made by Mr. Nsibandze that the
circumstances on this matter are not that an appeal has been noted
and that a stay of execution is being sought on that basis,
nonetheless stay of execution proceedings relating to orders of the
Industrial Court, it s clearly intended and contemplated by the
Industrial Relation Act should be brought before the court.
The
staying of execution of an order of the Industrial Court should
properly be brought before the Industrial Court as with any order for
the return of goods attached pursuant to an order of the Industrial
Court and accordingly this court does not have jurisdiction to
entertain this application in its totality in that it is the
Industrial Court that ordered that its judgement be notified to the
Commissioner of Taxes and should therefore be appropriate that any
interdict, pending a determination by the
7
Commissioner
of Taxes against the execution, should be obtained from the
Industrial Court.
Paragraphs
8.1 and 8.2 of the founding affidavit do not advance the applicant's
case any further on the question of jurisdiction. I agree with Mr.
Nsibandze that this is an order that the Industrial Court is clearly
competent to make, particularly because that court; has,
i) Heard
the matter relating to the arrears wages of the 1st respondent;
ii) Made
the order that Umbrella Management Services (Pry) Ltd pay the
1st
respondent E60, 000-00;
iii) Ordered
that the judgement be notified to the Commissioner of Taxes.
Admittedly
the High Court has generally speaking, inherent jurisdiction to grant
interim relief to avoid injustice and hardship but the court will
only extend its jurisdiction to matter which properly be heard before
another court, when exceptional circumstances are present and when
but for the exercise of that power a litigant might be remediless. In
the case of Airoadexpress vs Chairman, Local Road Transportation
Board, Durban and others 1986 (2) S.A. 663). It was held inter alia
that the inherent jurisdiction of the court to grant pendente relief
to avoid injustice and hardship was a salutary power which had to be
jealously preserved and even extended where exceptional circumstances
were present and where, but for the exercise of such power, a
litigant would be remediless as was the position in that case. In
casu however the applicant does have a remedy, he can either approach
the Industrial Court for the relief which he is approaching this
court and which is the appropriate court; or to pay the judgment
amount of E60, 000-00 to the applicant's attorneys and leave it to
the 3rd respondent :o make a determination as directed by the
Industrial Court. (see Herbstein and Van Winsen, The Civil Practice
of the Supreme Court of South Africa (4th ED) paps 1063 to 1064).
In
the result, for the reasons advanced above the point in limine as to
jurisdiction by the 1st respondent ought to succeed.
b) Locus
standi.
8
Mr.
Madau, in my view correctly conceded that the applicant has no locus
standi to move this application in view of the compelling arguments
advanced by Mr. Nsibandze.
Shorn
of all the frills it is Mr. Nsibandze's contention that the applicant
has failed to establish locus standi in that whilst applicant alleges
that he was appointed liquidator in terms of a Government Gazette
attached to his founding affidavit "EJH1", the said
Government Gazette which discloses a resolution of the directors of
the company does not appoint either the applicant nor anybody as
liquidator and the applicant states no other basis in his papers upon
which he purports to have the authority to act as liquidator and to
bring this application as the applicant.
I
agree entirely with Mr. Nsibandze's submissions at paragraphs 17, 18
and 19 of his Heads of Arguments.
I
rule that this point in limine ought to succeed.
c) Urgency.
The
applicant's basis of urgency is set out in paragraphs 32 sub
paragraphs 1 to 6. These read ipssisima verba as follows:
"
Urgency.
I
humbly submit that the matter is urgent for the following reasons:
32.1. The
information stored in the removed computers both in the hard drivers
and in the backup system is very valuable and in the event that the
computers remain removed from the control backup system, I am
advised, this information may be completely lost.
32.2. The
removal of the items has brought the activities of the company to a
complete stand still arid this will undoubtedly cause difficulties in
selling the business as a going concern.
32.3. In
the event that the goods remain removed, there is no guarantee that
they arc safe and will not be destroyed in anyway.
9
32.4. I
humbly submit that it is in the interest of fairness and justice that
the goods be returned to the premises (as they were removed illegally
in the first place against the tender for payment).
32.5. The
first and second respondents herein acted maliciously in that despite
the discussions going on between the parties they have gone ahead and
attached applicant's goods without good cause.
32.6. If
applicant is not granted immediate relief then it stands to suffer
irreparable harm since it would not be trading within that period of
time when on the other hand the first and second defendant do not
stand to suffer any prejudice as they still have to wait for 21 days
before they can make means to dispose of the attached items. In short
the applicant has no immediate remedy and if it is afforded on in
future the damage which it seeks to avoid would already have been
suffered".
The
applicant in a nutshell bases the urgency on the potential for the
attached goods to be damaged or stolen or that some other evil will
befall the attached goods. I agree with Mr. Nsibandze that this
cannot be a basis for urgency in the circumstances and no order or
determination is sought on whether or not the attachment was
unlawful. The potential for damage to attached goods is inherent in
every attachment of movable goods and therefore cannot be a basis for
urgency.
For
the above reasons the point in limine as regards urgency ought to
succeed.
d) No
prima facie right to relief sought has been established.
The
applicant, by failing to establish his own locus standi, therefore
has failed to establish that he has a right or that he has a right
prima facie enforceable by law. This point of law ought to succeed.
e) Apprehension
of irreparable harm.
I
again agree with Mr. Nsibandze's contention that the applicant has
not established a well-grounded apprehension of irreparable harm in
the event that the interdict is not granted. The applicant only
stated in paragraph 32.6 that he will suffer irreparable harm since
he is not trading. Again this point in limine ought to succeed.
10
f) No
other remedies.
The
applicant has not even suggested in his papers that he has no other
remedies other than to approach this court for the relief which he is
seeking. The applicant's remedies are clear he could approach the
court which issued the order pursuant to which the goods have been
attached or pay the judgement amount to the 1st respondent.
In
the result, the application is dismissed with costs.
S.B
MAPHALALA
JUDGE
