A company, which had unfairly dismissed an employee, failed to pay the award ordered by the bargaining council. The ex-employee instructed the sheriff to demand the awarded compensation and when this failed, assets were attached. Thus ensued a phantasmagoria of attempts before the Labour Court to prove that the attached goods were in fact owned by other individuals and companies.

Adimoolum v Nxumalo and Others (JR1447/22) [2023] ZALCJHB 84 (22 March 2023)

Case Summary

 A graphic designer was dismissed and referred a dispute to the bargaining council. His dismissal was found to be unfair and the arbitrator ordered the company to pay him 6 months back pay, an amount of R72 000. The company was unsuccessful in trying to have this award rescinded, and then simply ignored it, prompting the dismissed employee to instruct the sheriff of the court to demand the said compensation from the company.

When the company failed to satisfy the demand, the sheriff levied execution on the assets found at the premises in order to satisfy the judgement debt.

During subsequent Labour Court proceedings, the company submitted lease documents and various “proofs” that the attached assets actually belonged to other companies and individuals and were on lease and, thus, not subject to attachment by the sheriff. According to the, company the lien on the equipment began as a gentleman’s agreement and then became a written agreement at a later stage.

The Court viewed this written document with the utmost suspicion when it came to light that the parties to the lease agreement were brothers. The brother who claimed to own the property, which had been attached, testified that he had bought the machines more than ten years prior, and that he could not find the documents proving ownership, even after careful search. The Court found the claim of ownership even more strange and unlikely as the machines had supposedly been bought with no intention of using them, but of lending them to another party. The Court tended to see the whole agreement as a façade, and saw no reason why the brothers should not misdate lease documents to make it appear as though a lease had been in place prior to the attachment of the assets. In addition, it appeared highly convenient that the proof of ownership had disappeared into thin air more than ten years ago.

The law presumes the assets found at the premises of an execution debtor to be their own assets. A claimant who comes forward to say that they are the rightful owners of the said assets must provide the Court with satisfactory evidence of ownership, and if they are unable to do so, then the assets remain attached and will be sold in execution.

In this case, the Court was not satisfied that the assets truly were owned by a different company, whose director just happens to be the blood brother of the director of the company whose assets had been attached. 

The claim was dismissed and the Court ordered that the execution debtor and other claimants pay the costs jointly and severally, including the sheriff’s preparation and appearance fees.

Issued by the Labour Guide