CHIGUMBA J: This is an application for the rescission of a
default judgment granted in case number HC 2846/13, against the applicant on 8
February 2013, whereby an arbitral award was registered by this court in terms
of Article 35 of the UNCITRAL Model Law, as set out in the schedule
to the Arbitration Act [Cap 7:15]. The applicant seeks to blame its
previous Legal Practitioners for being negligent in failing to carry out its
instructions to oppose the registration of the arbitral award. This court must
decide whether the allegation of negligence constitutes good and sufficient
cause for purposes of meeting the requirements of rescission of default
judgment in general, and for purposes of allowing rescission of the judgment
which registered an arbitral award in particular. The question of the
circumstances in which a court may allow the consequences of a party's legal
practitioner's adverse conduct to affect the outcome of litigation, is a
vexatious one, which is always dependant on the particulars of each case. “It
is the trade of lawyers to question everything, yield nothing, and talk by the
hour.” Thomas Jefferson (1743-1826) Third President of the United
States.
At the hearing of this matter, I dismissed the
application for rescission of a judgment in which an arbitral award was
registered by this court for purposes of execution, with costs. I gave brief
reasons for the judgment, ex tempore, as follows: “The
applicant has failed to establish good and sufficient cause to rescind a
default judgment which registered an arbitral award. There are no prospects of
success in the main application due to procedural irregularities which remain
unattended. This court has no jurisdiction to inquire into the merits of
arbitral awards except as provided for in terms of Article 36 of the Model Law,
whose requirements have not been met in the founding affidavit to this
application. See Benson Samudzimu vDairiboard. Holdings Limited HH
204/10, 2010 (2) ZLR 357”.I have now been asked to provide detailed
reasons for judgment. These are the reasons.
The background to this matter is that the respondent was
employed as a production manager by the applicant in 2010. As part of his
probation review, on 19 March 2010, and on 1 April 2010, he accepted that he
had made mistakes in the discharge of his duties. On 20 April 2010 he was
suspended from duty without pay and benefits, pending a disciplinary hearing,
in terms of section 4(a), (f) and (g) of SI 15/2006 (acts of omission
inconsistent with the fulfillment of the express or implied conditions of his
contract, gross incompetence or inefficiency in the performance of his work,
habitual and substantial neglect of his duties). A disciplinary hearing was
held on 4 and 10 May 2010, resulting in respondent's dismissal from applicant's
employ, with effect from the date of suspension. On 13 March 2012, an arbitrator
found respondent's dismissal to be unfair because the applicant had not
recorded the disciplinary hearing in writing, and the absence of the record of
proceedings rendered the proceedings illegal.
Arbitrator Matsikidze ordered that the respondent be
reinstated with full benefits and pay from the date of the unlawful dismissal,
or alternatively, for quantification of damages to be done within 14 days of
the date of his award, in the event that reinstatement was no longer tenable.
On 27 March 2012, applicant appealed to the Labour Court against the decision
of the arbitrator. The appeal was dismissed after eight months and for failure
to file heads of argument by the applicant. On 16 April 2013, applicant changed
Legal Practitioners from Messrs Maganga & Company to his current Legal
Practitioners, Messrs Koto & Company. In a letter addressed to the previous
Legal Practitioners by the current Legal Practitioners, an allegation was made
that due to the negligence of the previous legal practitioners, the appeal had
been dismissed, and the quantification of respondent's damages in lieu of
reinstatement done in default of appearance by the applicant.
On 29 April 2013, Messrs Mabundu Legal Practitioners
responded to the letter addressed to Messrs Maganga & Company on 16 April
2013. Mr. Sangarwe, the previous attorney of record, disputed the allegation of
negligence. He reiterated that Mr. Dave Ashwin, one of applicant's directors,
had been:
“… kept abreast of all the proceedings and the writer
actually called him on the phone on two occasions inquiring as to whether we
should continue to represent him in this matter. He replied that a Labour
consultant, Mr. P. Shawatu was dealing with the matter and as such we should
leave everything to him”.
Mr. Sangarwe refused to depose to any affidavit that he did
not do enough to safeguard the applicant's interests by failing to file heads
of argument in the appeal to the Labour Court, by failing to attend the hearing
in which damages were quantified, or by failing to apply for rescission of the
arbitral award.
The basis of the application before the court, as set out
in applicant's founding affidavit, is that the applicant was betrayed by his
Legal Practitioners who did nothing to safeguard its interests. The applicant
denies being in willful default because it had given its lawyers instructions
to defend the matter. The applicant makes reference to Messrs Maganga &
Company, and attaches a response from Messrs Mabundu Law Chambers. No
explanation is proffered in the founding affidavit. We are left to surmise that
the particular lawyer handling the matter had switched law firms. The applicant
avers that the lawyer's conduct shows a deliberate course of action meant to
prejudice it by failing to appear before the arbitrator who quantified damages.
The applicant alleges that its previous lawyer connived with the respondent's
lawyer on 8 April 2013 resulting in applicant's property being attached in
execution.
The respondent opposed the application for rescission of
the judgment which registered the arbitral award, on 10 may 2013. He raised a
preliminary point that the applicant was barred in terms of the rules of this
court because it failed to file its opposing affidavit to the application for
registration of the arbitral award within ten days of the date of service of
the application on it, resulting in an automatic bar operating against it. The
respondent averred that as long as applicant remained barred, the judgment
could not be rescinded because there was no opposition before the court, and no
good and sufficient reason to deny the registration of the arbitral award. It
is common cause that the application for registration of the arbitral award was
served on the applicant on or about 16 July 2013. It is common cause that no opposing
affidavit was filed. Order 32 rr233 (1) to (3) provides as follows:
233. Notice of opposition and opposing affidavits
(1)…
(2) …
(3) A respondent who has failed to file a notice of
opposition and opposing affidavit in terms of sub rule (1)shall be
barred. (my underlining for emphasis)
The bar is automatic, and it remains operational unless and
until an application to uplift it is made in terms of the rules of this court.
No such application has been filed by the applicant. The automatic bar is the
bedrock on which this court gave judgment in default of filing opposing papers.
For applicant to purge its default, it must apply for the uplifting of the
automatic bar which is operating against it in terms of Order 32 rr 233 (3).
The preliminary point raised by the respondent must be upheld.
In
regards to the merits of the matter, respondent averred that applicant did not
give any reasons for its default and failure to file opposing papers to the
application to register the arbitral award. Applicant laid the blame at its
previous lawyer's door. The court must decide whether such an explanation is
adequate, and whether it suffices and fulfils the requirements set out in the
rules of this court that govern rescission of judgment in general, and rescission
of a judgment which registered an arbitral award, in particular. The question
that the court must answer is this; firstly, in what instances may this court
decline to register an arbitral award for purposes of execution? Secondly, is
the evidence before the court sufficient and cogent to sustain an application
to rescind the registration of an arbitral award? It is my suggestion that
before examining the law that will enable the court to answer these two
questions, the court will look at the provision in its rules that governs
rescission of its judgments in general. Order 9 rule 63 of the Rules of the
High Court 1971 provides as follows:
“63. Court may set aside judgment given in default
(1) A party against whom judgment has been given in
default, whether under these rules or under any other law, may make a court
application, not later than one month after he has had
knowledge of the judgment, for the judgment to be set aside.
(2) If the court is satisfied on an application in terms of
sub rule (1) that there is good and sufficient cause to
do so, the court may set aside the judgment concerned and give leave to the
defendant to defend or to the plaintiff to prosecute his action, on such terms
as to costs and otherwise as the court considers just”. (my underlining for
emphasis)
The leading case on the interpretation of r 63 is Viking
Woodwork (Pvt) Ltd vBlue Bells Enterprises (Pvt) Ltd 1998 (2) ZLR
249 (SC),where the court gave guidance about its requirements. The
head note reads as follows:
“A defendant against whom a default judgment has been
granted has a period of one month from the date he becomes aware of the
judgment to apply for rescission of that judgment. If he does not make the
application within that period, but wants to make it after the period has
expired, he must first make an application for condonation of the late filing
of the application. This should be done as soon as he realises that he has not
complied with the rules. If he does not seek condonation as soon as possible,
he should give an acceptable explanation, not only for the delay in making the
application for rescission, but also for the delay in seeking condonation.
There are thus two hurdles to overcome .In the event of flagrant breaches of
the rules, the indulgence of condonation may be refused, no matter what the
merits of the application are. This applies even where the blame lies solely
with the party's legal practitioner,”
A close reading of this case will show that it is a vital requirement or hurdle
that an applicant for rescission of default judgment must state the date on
which it became aware of the judgment. This averment, which must be contained
in the founding affidavit, will bring such an applicant squarely within the
ambit of r 63(1). Failure to comply with the one month time limit necessitates
an application for condonation of late filing of the application for rescission
of default judgment. The second hurdle that an applicant in terms of r 63 must
clear is that, an explanation must be given as to why judgment was given in
default. If the default was willful, success under r 63 will be elusive, if not
impossible. The gist of the applicant's founding affidavit is that, applicant
was not in willful default. It had given instructions to its legal practitioners
who let it down, betrayed it, or connived with the opposition to its detriment.
Does the evidence before the court support these allegations? In my view it
does not. There are at least four sets of Legal Practitioners who represented
the applicant at various stages of these proceedings, Messrs Sande &
Associates, Messrs Maganga & Company, Messrs Mabundu, Messrs Koto &
Company. Mr.Sangarwe, previously of Messrs Maganga & Co, now of
Messrs Mabundu, is indirectly accused, in the applicant's founding affidavit,
of negligence, and of failure to carry out applicant's instructions to oppose
the quantification of damages and to oppose the registration of the arbitral
award. In his letter filed of record, dated 29 April 2013 he strenuously denies
any wrongdoing, and alleges that the applicant was being represented by a
Labour Consultant, Mr. P. Shawatu. So all we have is unsubstantiated
allegations that applicant was not in willful default because his lawyer was
negligent. The applicant does not dispute the contents of the letter of 29
April 2013 in its answering affidavit. The court accepts that the allegation
that applicant's lawyer was negligent is a bald one, it is unsubstantiated, it
has been challenged and the challenge remains extant, it has not been proved by
the applicant that its failure to file opposing papers was due to its lawyer's
negligence.
In paragraph 13 of the founding affidavit, applicant states
that it was shocked when it was served with a notice of seizure on 8 April
2013. Presumably that is the date when the applicant became aware of the
judgment. My reading of Viking Woodwork Supra is that an applicant for
rescission of default judgment is required to state expressly, the date on
which it became aware of the judgment. This enables such an applicant to
expressly bring itself within the ambit of r 63. See alsoTheunissen vPayne
1940 TPD 680, CIR vBurger 1956 (4) SA 446 (A),
Saloojee & Anor v Minister of Community Development 1965(2)
SA 135 @ 138H, Tshivhase Royal Council vTshivhase & Anor 1992
(4) SA 853 (A), Ntini v Sibanda SC 74/02, 2002 ZLR
(1) @ 266,, SAI Enterprises vGirdle Enterprises (Pvt) Ltd 2009(1)
ZLR 352,
The
applicant before me did not do so. It did not jump the first hurdle under r 63.
The application before me was filed on 8 May 2013. No explanation was given as
to why the notice of seizure only came to the applicant's attention on 8 April
when it had been served on applicant on 5 April 2013. The applicant's
attempts to lay the blame at its lawyer's door have not found favour with me
because of the paucity of evidence before the court to support that contention.
Even if these excuses had found favour with the court, it has been held by a
more superior court in SvMcNab 1986 (2) ZLR 280 (S) at 284A-D,that;
“I share the view expressed by STEYN CJ in Saloojee
& Anor NO vMinister of Community Development supra at 141C-E
when he said:
"There is a limit beyond which a litigant cannot
escape the result of his attorney's lack of diligence or the insufficiency of
the explanation tendered. To hold otherwise might have a disastrous effect upon
the observance of the Rules of this Court. Considerations ad misericordiam
should not be allowed to become an invitation to laxity. In fact this court has
lately been burdened with an undue and increasing number of applications for
condonation in which the failure to comply with the Rules of this Court was due
to neglect on the part of the attorney. The attorney, after all, is the
representative whom the litigant has chosen for himself, and there is little
reason why, in regard to condonation of a failure to comply with a Rule of
Court, the litigant should be absolved from the normal consequences of such a
relationship, no matter what the circumstances of the failure are.(Cf
Hepworths Ltd v Thornloe & Clarkson Ltd 1922 TPD 336; Kingsborough Town
Council v Thirlwell & Anor 1957 (4) SA 533 (N).)"
The second hurdle to bring an ordinary applicant for default judgment within
the ambit of r 63 is an averment of good and sufficient cause and sufficient
evidence to support the averment. In the leading case of Deweras Farm (Pvt)
Ltd & Ors v Zimbabwe Banking Corp Ltd 1998 (1)ZLR 368 (SC)the
phrase good and sufficient cause has been held to mean
“…that the High Court Rules require only ``good and sufficient cause'' as
the basis of rescission of judgment. This gives the court a wide discretion and
it is not possible to provide an exhaustive definition of what constitutes
sufficient cause to justify the grant of indulgence. Even where there has been
willful default there may still sometimes be good and sufficient cause for
granting rescission. The good and sufficient cause, for instance, might arise
from the motive behind the default”. See also Cairns Executors
v Gaarn 1912 AD 181 at 186, Roland & Anor v McDonnell 1986 (2) ZLR 216 (S),
Stockil v Griffiths 1992 (1) ZLR 172 (SC) where the court stated
that:
“The factors which are taken into account in deciding
whether a default judgment should be rescinded are
(i) the reasonableness of the
applicant's explanation for the default;
(ii) the bona fides of the application to
rescind the judgment; and
(iii) the bona fides of the defence on the
merits of the case and whether that defence carries some prospect of
success”.
In the exercise of the wide discretion that reposes in a court in terms of r
63, it is my view that not enough has been placed before the court to support a
finding that there is good and sufficient cause to rescind the judgment that is
being challenged. The applicant's disingenuous attempt to blame its Legal
Practitioner has been rejected by the court for lack of evidence to support it.
It can therefore not be a reasonable explanation if it is not sustainable. The
applicant appears to be motivated by a desire to put off the evil day and avoid
paying its dues to the respondent. Its application for rescission of judgment
is not bona fide, especially in light of the fact that it took eight months to
prosecute its appeal before the Labour Court, and that the appeal was dismissed
for want of prosecution. Lastly on the question of whether applicant's defence
on the merits carries some prospects of success, the court has reservations
about applicant's willingness to have the merits of the matter ventilated.
There are some outstanding procedural hurdles that applicant must jump before
the matter can be set down for determination of its merits before the Labour
Court. An application for condonation of late filing of heads of argument must
be filed and determined in applicant's favour. An application for reinstatement
of the appeal will then have to be filed and determined, again in applicant's
favour. Only then can the matter be heard on merit. The applicant has not
shown the court on the papers before it, the effort that it is making if any,
to attend to jump these procedural hurdles. In a nutshell, based on the papers
filed of record, applicant has failed to establish the requirements that are
necessary to entitle it to rescission of judgment in terms of the rules of this
court
Having
found that the applicant does not qualify for rescission of default judgment in
terms of the rules of this court, it is now time to consider whether the
provisions of the Model Law contained in the schedule to the Arbitration Act.
Article 35 of the Model can provide applicant with any relief. Section 35 law
provides as follows:
“(1) An arbitral award, irrespective of the country in
which it was made, shall be recognised as binding and, upon application in
writing to the High Court, shall be enforced subject to the provisions
of this article and of article 36.”
So, in order to register an arbitral award as an
order of this court for purposes of enforcement, all this court has to do is to
check if article 35 has been complied with, as well as article 36. The two
articles should be read together. The court notes that there appears to be a
distinction between a labour based arbitral award and any other arbitral award,
when it comes to the question of which court to approach, for purposes of
challenging the merits of the arbitral award. The registration of a Labour
Arbitral award is done in terms of s 98(14) and (15) of the Labour Act [Cap
28:01]. The respondent correctly in my view, contended that an Arbitral
award which has not been set aside in terms of Article 33 or Article 36 or in
respect of which execution has not been stayed must be registered as a matter
of course. He relied on the case of Greenlandv Zimbabwe Community Health
International Research Project HH-93-13, .as authority for that
proposition where the court stated that, at p 3,
“where an award is not stayed or suspended in terms of
section 92E (3) of the Labour Act, the court will, as a matter of principle,
register the award unless there are grounds as provided for in Article 36 of
the Model law contained in the Arbitration Act…”
It is trite that an appeal to the Labour court, against the
merits of a decision does not suspend the operation of the decision appealed
against. See Gaylord Baudi v Kenmark Builders (Private)
Limited HH-4-12, Elvis Ndlovu vHigher Learning Centre HB
-86-10, Net-One Cellular (Pvt) Ltd vNet-One Employees & Anor 2005
(1) ZLR 275, DHL International Ltd v Clive Madzikanda HH-51-10,
Benson Samudzimu vDairibord Holdings HH-204-10, 2010 (2)ZLR
357where the court stated @ p 360 that:
“…the Labour Act takes precedence over the Arbitration
Act…the intention of the legislature was to have all labour matters initiated
and resolved to finality in terms of the Labour Act “.
In my view, the applicant's remedy was to apply to have the
operation of the arbitral award suspended pending determination of the appeal
process. Once the arbitral award had been registered applicant was at
liberty to apply to have execution stayed, again pending determination of its
appeal to the Labour Court. The applicant would be entitled as part of the
appeal process, to challenge the arbitrators computation of damages. Armed with
an order which would have been duly ventilated by the Labour Court on merit and
in regard to the quantum of damages, applicant ought to have approached this
court in terms of r 449 of the rules of this court to correct the arbitral
award in regards to the quantum of damages. All of these remedies lie
with the Labour Court, which trumps the Arbitration Act in the circumstances of
this case, where the arbitral award emanated or is based on a labour dispute.
The applicant is guilty of failure to act
timeously in seeking the appropriate remedies provided by the Labour Act. The
applicant is guilty of flitting from one Legal Practitioner to another like a
bee that flits from flower to flower in the never ending search for the right
pollen to improve the quality of its honey. In this case, applicant must accept
the blame for the resultant multiplicity of actions which it instituted, in the
wrong fora, with no relief in sight. This court is not at liberty to
rescind a default judgment in which it registered an arbitral award based on
labour issues, just because the appeal to the Labour court against the
arbitrator's decision has been dismissed for want of prosecution. This court is
not at liberty to substitute its discretion for that of the Labour Court when
it comes to a determination of the merits of an arbitral award based on labour
issues. As long as the arbitral award is not set aside by the Labour
court, and it remains extant, it is registrable by this court.
In conclusion, I find that Applicant has failed to meet the
requirements of rescission of judgment in terms of r 63 of the rules of this
court. It would be incompetent for this court to grant the relief that the
applicant is seeking, which relief must be preceded by a ventilation of the
merits of the appeal to the Labour court. It is regrettable that the applicant has
chosen to submit itself to the dangers of conflicting legal advice as a result
of constantly changing its legal representatives. This is a very simple labour
matter that ought to have been conclusively disposed of, in the right
court. For these reasons, the application for rescission of the judgment
in which an arbitral award was registered as an order of this court is
dismissed, with costs.
Koto & Company,applicant's
legal practitioners
Chambati
& Mataka Attorneys,respondent's legal practitioners
