Paul Bernard Joseph v Killarney Engineering (Andrew Mentis) and Others

The applicant, Paul Bernard Joseph, was dismissed for poor work performance whilst on probation by Killarney Engineering (the first respondent). The third respondent, Commissioner D Nzama, found the dismissal to be both substantively and procedurally fair at arbitration on 23 February 2018. The applicant lodged a review application on 4 May 2018 to set aside the arbitration award. During proceedings on 18 February 2020, both parties informed the court that the first respondent had been liquidated on 1 July 2019. The liquidator was not cited as a party to the proceedings, and no notice was given to the liquidator before continuing with the proceedings as required by section 359(2)(a) of the Companies Act No. 61 of 1973.

• Whether the Labour Court has jurisdiction to determine a review application when the respondent company has been liquidated and no notice was given to the liquidator as required by section 359 of the Companies Act
• Whether proceedings are deemed abandoned when notice is not given to the liquidator within the prescribed time periods
• Whether the Labour Court has jurisdiction to entertain a condonation application under section 359(2)(b) of the Companies Act
• The legal effect of liquidation of a company on pending civil proceedings

The application was dismissed due to lack of jurisdiction. There was no order as to costs.

The binding legal principles established are: (1) Section 359 of the Companies Act No. 61 of 1973 (read with item 9 of Schedule 5 of the Companies Act No. 71 of 2008) applies to review applications pending in the Labour Court when a respondent company is liquidated; (2) A review application constitutes civil proceedings contemplated in section 359(2)(a) of the Companies Act; (3) When a company is liquidated, any person intending to continue legal proceedings against that company must, within four weeks after the appointment of a liquidator, give the liquidator not less than three weeks' notice in writing before continuing the proceedings; (4) Failure to give the required notice results in the proceedings being considered abandoned unless the court directs otherwise under section 359(2)(b); (5) The Labour Court lacks jurisdiction to determine a review application against a liquidated company where no notice was given to the liquidator as required by section 359(2)(a); (6) The Labour Court lacks jurisdiction to entertain a condonation application under section 359(2)(b) of the Companies Act, as this is an aspect provided for within the Companies Act and not the Labour Relations Act.

The court made several obiter observations: (1) The object of section 359 is to prevent the liquidator from being inundated with legal proceedings without sufficient time to consider whether the company should resist them; (2) The defence accorded to the liquidator is not absolute, as the court may direct under section 359(2)(b) that proceedings are not to be considered abandoned notwithstanding non-compliance; (3) The maxim quilibet juri pro se introducto renunciare potest (anyone may renounce a right introduced for their benefit) applies to statutory rights where no public policy is served, and the notice requirement is for the benefit of the liquidator; (4) Once a company is deregistered, it is deprived of its legal existence and its corporate personality ends in the same way a natural person ceases to exist on death; (5) The court noted the unusual nature of the circumstances not specifically provided for in the LRA, which influenced its decision not to make an order as to costs given that both parties were unrepresented.

This case is significant in South African labour law and company law as it clarifies the interaction between labour law remedies and company law insolvency procedures. It establishes that the Labour Court does not have jurisdiction to determine review applications against liquidated companies where the statutory notice requirements under the Companies Act have not been met. The case demonstrates that company law provisions relating to liquidation take precedence over labour law review proceedings, requiring compliance with section 359 of the Companies Act. It also confirms that the Labour Court lacks jurisdiction to grant condonation for non-compliance with Companies Act notice requirements, as this falls within the realm of company law rather than labour law. The judgment serves as an important reminder for litigants to monitor the corporate status of respondent companies and comply with statutory notice requirements when companies are liquidated during pending proceedings.