Lamb Associates (Private) Limited v J Mareya & 30 Others

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/162/2014
HELD AT HARARE ON 12 MARCH 2014,
13 MARCH 2014 & 28 MARCH 2014
CASE NO LC/H/798/2013
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IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO LC/H/162/2014

HELD AT HARARE ON 12 MARCH 2014,	CASE NO LC/H/798/2013

13 MARCH 2014 & 28 MARCH 2014

Before Honourable L M Murasi

In the matter between:

LAMB ASSOCIATES (PRIVATE) LIMITED			APPLICANT

Versus

J MAREYA & 30 OTHERS					RESPONDENTS

For Applicant		T Nyamasoka (Legal Practitioner)

For Respondents	G Magara (Employee representing others)

MURASI J:

The applicant has approached this Court for stay of execution of the arbitral award issued on 25 June 2013. The applicant is deemed to have failed to pay the respondents their outstanding salaries and benefits upon closure of the company on 20 December 2011.

The applicant submits that the arbitrator erred in finding that the company, Lamb Associates (Pvt) Ltd was responsible for the payment instead of Alka Paints Corporation (Pvt) Ltd. The Applicant stated that the arbitrator failed to appreciate that a company is of limited liability to the extent that its financial exposure and liabilities are only limited to the company and not to be extended to the Directors and/or Shareholders of the company.

The Respondents, on the other hand submitted that the Applicant, through Mr Lamb, had previously informed the employees that Mr Lamb had taken over the company and he was now its Managing Director. The Respondents referred to previous proceedings which, they alleged, indicated that Lamb Associates (Pvt) Ltd was in fact the new employer instead of Alka Paints Corporation (Pvt) Ltd.

The principles to be followed in such applications were clearly enunciated in South Cape Corporation (Pty) Ltd v Engineering Management Service (Pty) Ltd 1977 (3) SA 534 (AD) at page 545 D – F. These include prospects of success, the potentiality of irreparable harm or prejudice being sustained by a party and the balance of convenience.

The Court will seek to examine the issue of prospects of success first. The Applicant submits that the arbitrator’s interpretation of the law is erroneous. The Applicant stated that it is only a shareholder and that the arbitrator erred in concluding that the Respondents are entitled to look up to the Applicant for payment of that claim. Further, that the arbitrator ignored the fact that the Respondents had contracts with Alka Paints Corporation (Pvt) Ltd and hence misconceived the legal principle of separate legal personality. The Applicant further averred that its interest in the company was only financial.

The Court, having considered the point of law raised in the ground of appeal, is of the view that the Applicant has an arguable case. The point of law raised by the Applicant will need to be considered and determined by the appellate court.

Having arrived at the decision that the Applicant has an arguable case, the Court will not delve into the other considerations of whether or not irreparable harm or prejudice will occur and in whose favour the balance of convenience tilts. In the result, the Court finds that there is merit in the application and it must succeed.

The Court makes the following order:

The application, being with merit; succeeds.

The execution of the arbitral award of Honourable P Mutsinze dated 25 June 2013 be and is hereby stayed pending the determination of the appeal.

There is no order as to costs.

Atherstone& Cook, Applicant’s legal practitioners