Clear and compelling evidence: Application proceedings

What is meant by the ‘civil test’ and are employers only required to prove a fair reason on a ‘balance of probabilities’ test or the more onerous test of ‘clear and compelling’ evidence?  Does it make any difference if the evidence is circumstantial or direct and the proceedings are only application proceedings?  An article today in the Business Law & Tax Review supplement (“Proof of ‘use it’ must be offered” by Charles Webster of Spoor & Fisher) to the Business Day caught my eye and caused me to think of how the test in a trademark case could be applied to the world of work law.  Generally speaking lawyers tend to apply a ‘balance of probabilities’ test whereas in the United States of America arbitrators apply a ‘clear and convincing evidence’ test in private arbitrations.

In Fourie’s Poultry Farm (Pty) Limited t/a Chubby Chick v CCMA [2001] 10 BLLR 1125 (LC) Jammy AJ was clearly dealing with a dispute where circumstantial evidence had to be assessed. These are some extracts from that judgment:

“[6] The different tests to be applied in the assessment of circumstantial evidence in criminal and civil proceedings are trite elements of the law of evidence. The proper test in arbitration proceedings is the civil one and if an arbitrator imports to the evidence before him the test applicable to criminal proceedings, namely that the discharge of the onus borne by employers must be determined beyond a reasonable doubt rather than on a balance of probabilities, a gross irregularity in the proceedings will have been perpetrated (OK Bazaars (a division of Shoprite Checkers) v Commission for Conciliation Mediation and Arbitration and others (2000) 21 ILJ 1188 (LC) at 1191).

In Govan v Skidmore 1952 (1) SA 732), it was held that the selected inference must “by the balancing of probabilities be the more natural, or plausible, conclusion from amongst several conceivable ones”, a principle confirmed by the Appellate Division, in a line of subsequent decisions. See for example Ocean Accident & Guarantee Corporation v Koch 1963 (4) SA 147 at 159.”

“[7] What emerges from these authorities is that clear and convincing evidence from an employer to establish a valid reason for dismissal is not required in arbitration proceedings. The determination to be made is one based solely on a balance of probabilities.” [Emphasis added].

It is doubted whether Jammy AJ was correct is equating a ‘clear and convincing’ test with the criminal test of proof beyond a reasonable doubt’.

In the dispute now under discussion, New Balance Athletic Shoe Inc v Dajee NO (251/11) [2012] ZASCA 3 (2 March 2012), being a dispute over trademarks and in application proceedings, the Supreme Court of Appeal applied a test of ‘clear and compelling’ evidence.

There may now be a need to reconsider the test generally adopted by the labour courts when evaluating disputes of facts in application proceedings and other proceedings.

One of the judgments constantly applied in the courts, including the labour courts, is the 1984 judgment in the Appellate Division of the Supreme Court, as it was then known, in Plascon-Evans (Plascon-Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd (1984) 3 SALR 623 (SCA). Certain rules were formulated by the highest court for dealing with disputes of fact in application proceedings and when the court has not had the benefit of hearing any oral evidence.

In New Balance Athletic Shoe Inc v Dajee NO (251/11) [2012] ZASCA 3 (2 March 2012) Nugent JA, in a unanimous judgment, is reported to have stated in para 16:

“. . . Those rules manifest the principle that application proceedings are intended for the resolution of legal issues. For that reason final relief will be granted only where the relief is justified by undisputed facts (facts alleged by the applicant that are not disputed, together with facts alleged by the respondent), though there are exceptions, which applies as much where the respondent bears the onus of proof.” [footnote omitted].

The exception referred to appears at 635 C:

‘[F]or example, where the allegations or denials of the respondents are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers’.

And in para 17 it was stated:

“But the rule in Plascon-Evans is not blind to the potential for abuse. As this court said in Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA) para 55, ‘in the interests of justice, courts have been at pains not to permit unvirtuous respondents to shelter behind patently implausible affidavit versions or bald denials.’

That seems to me to be particularly important in proceedings of this nature, in which the proprietor respondent, who bears the onus of proving relevant use, can be expected to have comprehensive and peculiar knowledge of that fact if it has occurred. In those circumstances it can be expected that a proprietor who alleges relevant use will advance clear and compelling evidence to that effect, and ought not to expect that the evidential burden will be discharged by allegations that are sparse, ambiguous, or lacking in conviction.” [emphasis added].

Nugent JA went on to state in paras 22 and 23:

“ The fact remains that there is no clear evidence that the alleged use occurred during the relevant period, and the surrounding circumstances revealed in the affidavits provide no sufficient basis for inferring that they must have occurred then. Whatever corroborating evidence might or might not be required in proceedings of this kind,what is called for, at the least, is clear and unambiguous factual evidence that brings the matter within the terms of the section. I agree with the court below that the evidence was insufficient for that purpose.”

“[23] In the absence of clear and unambiguous proof of relevant use during the relevant period, the trade marks of New Balance Inc are liable to be removed from the register, though the registrar, and the court below, retained a discretion not to do so.” [emphasis added].

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