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] 2 All SA 366; (1984) 3 SA 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].

3 thoughts on “Clear and compelling evidence: Application proceedings

  1. Pingback: Dismissed ‘wealthy’ employees forfeit fairness rights | GilesFiles

  2. See also
    Jako-Wutu v Ntabankulu Local Municipality (P332/14) [2016] ZALCPE 1 (16 February 2016) per Lagrange J.

    [17] The crisp issue in this case is whether the municipality was empowered to institute the disciplinary proceedings against the applicant without voting on the resolutions setting the proceedings in motion. The municipality no longer contends that it was not necessary for the Council to vote on the various resolutions but now alleges that in fact they were voted on. This is the factual dispute which the municipality contends should be decided in its favour. In this regard it is useful to set out the complete formulation of the rule laid down in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd to determine factual disputes in applications for final relief:

    “In such a case the general rule was stated by VAN WYK J (with whom DE VILLIERS JP and ROSENOW J concurred) in Stellenbosch Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E – G, to be:

    “… where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant’s affidavits justify such an order… Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted.”

    This rule has been referred to several times by this Court (see Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Green Point) (Pty) Ltd 1976 (2) SA 930 (A) at 938A – B; Tamarillo (Pty) Ltd v B N Aitkin (Pty) Ltd 1982 (1) SA 398 (A) at 430 – 1; Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd en Andere 1982 (3) SA 893 (A) at 923G – 924D).

    It seems to me, however, that this formulation of the general rule, and particularly the second sentence thereof, requires some clarification and, perhaps, qualification.

    It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant’s affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation.

    In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact (see in this regard Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163 – 5; Da Mata v Otto NO 1972 (3) SA 858 (A) at 882D – H).

    If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court (cf Petersen v Cuthbert & Co Ltd 1945 AD 420 at 428; Room Hire case supra at 1164) and the Court is satisfied as to the inherent credibility of the applicant’s factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks (see eg Rikhoto v East Rand Administration Board and Another 1983 (4) SA 278 (W) at 283E – H).

    Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers (see the remarks of BOTHA AJA in the Associated South African Bakeries case, supra at 924A).”

  3. Binns-Ward J in Lewis Group Ltd v Woollam (9900/2016) [2016] ZAWCHC 130 (11 October 2016 per A Binns-Ward J.

    [55] It is correct that the onus in an application in terms of s 165(3) is on the company. The nature of the onus is that which ordinarily applies in civil litigation. The company must prove on a balance of probability that the demand is frivolous, vexatious or without merit. ‘Heaviness’ does not enter the equation; there is no presumption in favour of the complainant that its demand is not frivolous, vexatious or without merit, anymore than there is one in favour of the company that it is. The statutory provisions do not give rise to any inherent probability one way or the other. It is usually only in situations where there is an inherent probability in favour of, or against, some proposition that the courts pronounce that ‘clear’ evidence is required to displace the effect.

    Consider in this regard the observations of Watermeyer JA in Gates v Gates 1939 AD 150, at p. 155:

    It is true that in certain cases[,] more especially in those in which charges of criminal or immoral conduct are made, it has repeatedly been said that such charges must be proved by the “clearest” evidence or “clear and satisfactory” evidence or “clear and convincing” evidence, or some similar phrase. There is not, however, in truth any variation in the standard of proof required in such cases. The requirement is still proof sufficient to carry conviction to a reasonable mind, but the reasonable mind is not so easily convinced in such cases because in a civilised community there are moral and legal sanctions against immoral and criminal conduct and consequently probabilities against such conduct are stronger than they are against conduct which is not immoral or criminal.

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