TM-S v Namibia Estates Agents Board and Another (38 of 2014) [2016] NASC 23 (29 September 2016)

Key Facts

Issues

• The court addressed whether the Labour Court had authority to entertain a review application after the appeal had already resolved the dispute. It found the review was moot and the court's decision to proceed with it was legally flawed.
• The court examined whether TM-S's opposition to the costs order under s 118 of the Labour Act was frivolous or vexatious. It concluded that the first respondent's actions—filing a review application after the appeal had already resolved the main issue and seeking costs without proper pleading—were the ones that were frivolous and vexatious, not TM-S's opposition.
• The judgment assessed whether the Labour Court properly applied s 134, which grants immunity to arbitrators, by requiring specific pleading of facts. It ruled that s 134 was misapplied because the first respondent failed to plead the necessary facts to displace TM-S's immunity from civil liability.

Holdings

• The amendment to the notice of motion seeking costs under s 118 was found to be incompetent, frivolous, and vexatious. The first respondent's speculative litigation to test if TM-S would oppose was deemed an unwholesome practice. TM-S was entitled to seek a punitive costs order under s 118 against the first respondent for initiating unnecessary proceedings.
• The Labour Court misdirected itself by basing liability for the costs order on s 134 of the Act. Section 134 creates statutory civil liability that must be specifically pleaded and proved by evidence, which was not done in this case. The section cannot be invoked through an amendment to a notice of motion in the manner used here.

Remedies

• The application is dismissed. TM-S is awarded costs against the applicant for proceeding with the application frivolously and vexatiously as contemplated in s 118 of the Act.
• The first respondent is ordered to pay the costs of TM-S (the appellant) in the appeal, to include the costs of one instructing and one instructed counsel.

Legal Principles

• The court applied a purposive interpretation of ss 118 and 134 of the Labour Act. It emphasized that these provisions must be pleaded and proved factually, and their invocation requires a clear legal basis aligned with legislative intent.
• The court found that the review application became res judicata following the appeal's resolution. The first respondent's pursuit of costs in a moot review was deemed to have ulterior motives and was legally incompetent.
• The court highlighted that the first respondent did not file an affidavit to substantiate the amendment seeking costs against TM-S. This failure to plead facts under s 134 and s 118 rendered the costs order legally unsound.
• The court considered TM-S's good faith in her role as an arbitrator, noting that her conduct was not shown to be mala fide. The first respondent's failure to establish bad faith or non-performance of duties invalidated the s 134 claim.
• The court held that costs orders are ancillary to the main relief and cannot be granted in proceedings where the main issue has become moot. In this case, the Labour Court's costs order against TM-S was invalid because the appeal had already resolved the main issue, making the review application moot.

Precedent Name

• Van Gorkom & Nooman v Davies
• Road Accident Fund v Krawa
• First National Bank of Southern Africa Ltd t/a Wesbank v First East Cape Financing (Pty) Ltd
• Simon v Air Operations of Europe AB
• Commercial Investment Corporation (Pty) Ltd (CIC) v Namibia Food and Allied Workers Union & others

Cited Statute

• Labour Act 11 of 2007
• Road Accident Fund Act 56 of 1996

Judge Name

• CHOMBA AJA
• SHIVUTE CJ
• DAMASEB DCJ

Passage Text

• When the amendment was made it clearly was incompetent, frivolous and vexatious. TM-S was therefore entitled to seek a punitive costs order under s 118 against the first respondent.
• The second respondent's conduct was deplorable. It was not done in good faith in the performance of her functions in terms of the Act. Her opposition to the amended notice of motion under the circumstances is frivolous and vexatious.
• The High Court therefore misdirected itself in basing liability for the costs order on s 134 of the Act. That section creates statutory civil liability which must be specifically pleaded and proved by evidence.