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[2014] ZAGPJHC 331
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Mutepe v National Housing Finance Corporation State Owned Company Limited (2012/47015, 2013/06184, 2013/30024) [2014] ZAGPJHC 331 (21 November 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE GAUTENG
HIGH COURT
LOCAL DIVISION,
JOHANNESBURG
CASE
NO: 2012/47015
2013/06184
2013/30024
DATE:
21 NOVEMBER 2014
In the matter
between
MUTEPE,
TSHINETISE
SIDNEY
...............................................................
Plaintiff
And
NATIONAL HOUSING
FINANCE CORPORATION
.............................
Defendant
STATE OWNED
COMPANY LIMITED
J U
D G M E N T
DAMALIS AJ:
[1] In this matter
the Plaintiff, an individual, instituted three separate actions
against the Defendant, his erstwhile employer,
a State Owned Company,
as follows:
[2] In the first
action (under case number 2012/47015), the Plaintiff claims damages
in an amount of R9 185 944,00 which he alleges
he sustained as a
result of the Defendant’s unlawful and premature termination of
his three year contract of employment (“the
damages claim”).
[3] In the second
action (under case number 2013/06184), the Plaintiff claims an amount
of R2 363 181,00 from the Defendant based
on bonuses allegedly due to
the Plaintiff by the Defendant in terms of an incentive scheme
incorporated in his contract of employment
(“the incentive
scheme”).
[4] In the third
action (under case number 2013/30024), the Plaintiff claims an amount
of R400 000,00 based on an offer of gratuity
made by the Defendant to
the Plaintiff on 12 October 2012 (“the gratuity claim”).
[5] The three
actions were consolidated before the commencement of the proceedings
in terms of a court order granted by his Lordship
Tsoka on 17 April
2014. The matter came before me on 26 May 2014 and the trial ran for
five days. Subsequent thereto, at the request
of the court, the
Plaintiff’s Counsel and the Defendant’s Counsel presented
heads of argument. Closing argument was
heard on 5 September 2014 and
on 12 September 2014 respectively.
Summary of the
pleadings
[6] It is common
cause that the Plaintiff was employed by the Defendant for a period
of three years in terms of a written contract
of employment for the
period 1 August 2008 to 31 August 2011 (“the initial
agreement”).
[7] Pursuant to the
initial agreement, the Plaintiff was deployed by the Defendant to
perform various roles. During 2011 the Defendant
was deployed to
deliver a mortgage default insurance (“MDI”) operating
model within the structures of the Defendant’s
organisation and
he was also deployed to the Department of Public Service and
Administration (“DPSA”), on behalf of
the Department of
Human Settlements (“DHS”), to design a concept paper for
the establishment of a Government Employees’
Housing Scheme
(“GEHS”).
[8] The initial
agreement provided that upon the expiry of the initial agreement the
Plaintiff would remain employed for a further
three months service
period. It is not in issue that both parties complied with their
reciprocal obligations to each other in terms
of the initial
agreement.
[9] During the three
month service period, negotiations ensued between the Plaintiff and
the Defendant’s CEO, Mr Moraba (“Mr
Moraba”) in
relation to the Plaintiff's future employment with the Defendant. On
22 September 2011, the Plaintiff received
Annexure POC 2 (“POC
2”) attached to the Particulars of Claim containing a draft
written proposal regarding his future
employment with the Defendant
and his deployment to the GEHS. POC 2 provides for the Plaintiff to
be employed by the Defendant
for a fixed period of one year
commencing on 1 September 2011 and terminating on 31 August 2012.
[10] Subsequent to
the Plaintiff receiving POC 2, according to the Plaintiff, he had
discussions with Mr Moraba and presented him
with a motivation for
the establishment of the role of an Executive Manager Group Strategy
to be occupied by him. The Plaintiff
also proposed that the period of
his employment be changed to three years, instead of a one year fixed
period as provided for in
POC 2.
[11] The Plaintiff
alleges that on 21 October 2011, the Defendant presented him with a
revised draft written proposal to POC 2 regarding
the Plaintiff's
continued employment with the Defendant and his deployment to the
GEHS. This proposal is contained in Annexure
POC 3 (“POC 3”)
attached to the Particulars of Claim. The Plaintiff further contended
that on 24 October 2011 he presented
the Defendant with a written
counter proposal to POC 3 in the form of Annexure POC 4 ("POC
4") attached to the Particulars
of Claim. The Plaintiff
contended that, upon the expiration of the three month service period
provided in the initial agreement,
the Plaintiff was retained by the
Defendant in its employ and he rendered services to the Defendant in
terms of POC 4.
[12] The Plaintiff
pleaded that by virtue of the aforesaid the parties concluded a tacit
agreement of employment (“the subsequent
agreement”) on
the terms embodied in POC 4. The salient terms were as follows: the
Plaintiff would be employed by the Defendant
in the position of
Executive Project Manager: GEHS reporting to the CEO for the period
up to either 29 February 2012, or such time
as the GEHS was approved,
whichever occurred first. In the event that the GEHS was approved on
or prior to 29 February 2012, the
Plaintiff would take up such
employment as might be offered to him by the relevant Government
programme. The Plaintiff pleaded
further that, in the event that the
GEHS was not approved on or prior to 29 February 2012, he would
remain in the Defendant's employ
in the position of Executive Manager
Corporate Strategy for the remainder of a period of three years
effective from 1 September
2011 and that his total remuneration
package would be R1 500 000,00 per annum, payable by way of monthly
amounts of R125 000,00
(I note that these are amended amounts).
[13] The Plaintiff
pleaded that he was entitled to a bonus award as part and parcel of
his total remuneration package based on the
Defendant's three year
rolling incentive scheme calculated as a percentage of his annual
package. The vesting of the incentive
scheme would occur as follows:
year 1- 50%; year 2- 30%; year 3- 20%.
[14] It is common
cause between the parties that the GEHS was not approved by 29
February 2012. The Plaintiff pleaded an extension
of the subsequent
agreement as follows: during March 2012 the Plaintiff and the
Defendant orally agreed that the approval of GEHS
would be extended
to 30 September 2012. The Plaintiff pleaded that the Defendant
continued to employ him on terms similar to POC
4, save that: the
time period afforded for the approval of GEHS was extended to 30
September 2012 and that if the GEHS was not
approved on or before the
30 September 2012 the Defendant would continue to employ the
Plaintiff and appoint him to the position
of Executive Manager
Corporate Strategy for a period of three years effective 1 September
2011, alternatively on a full time basis.
[15] The Plaintiff
pleaded that on 12 October 2012 the Defendant notified him by letter
that his employment contract with the Defendant
was terminated as at
30 September 2012 (I mention that that this letter is also the basis
of the Plaintiff’s gratuity claim).
The Plaintiff contends
that the Defendant’s failure to employ him beyond 30 September
2012 was unlawful and constituted
a repudiation of the oral
agreement. The Plaintiff rejected the Defendant’s repudiation
and continued to tender his services
to the Defendant, as set out in
a letter dated 16 October 2012. The Plaintiff alleges that he has
sustained damages equal to the
amount which he would have earned if
he remained in the Defendant’s employment until 30 September
2014.
[16] The Defendant
pleaded that during September 2011, the Plaintiff and the Defendant
orally agreed that the Plaintiff’s
employment contract would be
extended by one year from 1 September 2011 to 31 August 2012 on the
terms set out in POC 2, alternatively
in terms of a tacit renewal of
the initial agreement terminable on one months notice. The Defendant
denied that it presented POC
3 to the Plaintiff and alleged that no
contract of employment was concluded between the parties on the terms
embodied in either
POC 3 or POC 4.
[17] Further, the
Defendant pleaded that during March 2012, the Plaintiff and the
Defendant orally agreed that the Plaintiff’s
one year contract
of employment with the Defendant would be extended by one month to 30
September 2012 in order to accommodate
the extension date of the
approval of GEHS. On 23 May 2012, the Defendant presented the
Plaintiff with a renewal of his employment
contract on the terms
embodied in annexure 1 attached to the Defendant's Plea in which the
Plaintiff’s employment with the
Defendant was confirmed up to
30 September 2012.
[18] The Defendant
contended that the Plaintiff’s contract of employment
terminated on 30 September 2012 due to the effluxion
of time.
According to the Defendant on 26 September 2012, the Defendant
offered the Plaintiff a renewal of his contract of employment
for a
period of three years as Executive Manager Corporate Strategy on his
existing remuneration, from 1 October 2012 to 30 September
2015 on
the terms embodied in annexure 3 attached to the Defendant's Plea.
The Defendant contends that the Plaintiff rejected this
offer and
that the Plaintiff has neither applied for nor taken up alternative
employment. The Defendant contends that the Plaintiff
has not
suffered any damages.
[19] The Plaintiff
replicated that he did not receive the Defendant's offer renewing his
contract of employment on 26 September
2012.
[20] The pleadings
relating to the incentive claim are by and large the same as that in
the damages claim. The Plaintiff conceded,
correctly in my view, that
he is not entitled to most of this claim. The Plaintiff however
persisted with the part of his claim
for an incentive bonus for the
prorated period from 1 April 2012 to 30 September 2012 being the last
six months of his employment.
The Plaintiff contends that he is
entitled to payment of an incentive bonus for this period in terms of
the Defendant's three year
rolling incentive scheme, the vesting
would occur as follows: March 2013 (year 1)- 50%; March 2014 ( year
2)- 30%; March 2015 (year
3)-20%.
[21] The Defendant
contends that the Plaintiff did not qualify for an incentive bonus
for the March 2013 incentive year as he only
worked for the Defendant
for six months of the financial year which commenced on 1 April 2012
and ended on 31 March 2013.
[22] In relation to
the gratuity claim the Plaintiff pleaded that on 12 October 2012, the
Defendant made a written offer of gratuity
to the Plaintiff in the
termination letter in an amount of R400 000.00 The gratuity was
offered in lieu of Plaintiffs meaningful
contribution as a member of
the Defendant's executive management team in relation to the various
assignments carried out by him
during his employment by the
Defendant. The Plaintiff alleged that the gratuity was payable
forthwith upon his acceptance of the
written offer of gratuity,
alternatively within a reasonable time after acceptance thereof. The
Plaintiff continued that on 21
May 2013 his attorneys addressed a
letter to the Defendant's attorneys in which the gratuity was
accepted.
[23] The Defendant
contends that the offer of gratuity was a thank you gesture for the
Plaintiff’s contribution, on the occasion
of the termination of
his contract of employment by effluxion of time and that the offer
was based on the Plaintiff’s acceptance
of the lawful and
consensual termination of his contract. The Defendant denied that the
Plaintiff’s letter dated 21 May 2013
constituted a valid
acceptance of the offer and that the Plaintiff failed to accept the
offer within a reasonable time. The Defendant
pleaded that the
Plaintiff's letter addressed to the Defendant dated 16 October 2012
in which he disputed the legality of his termination
of employment
together with the two actions instituted by the Plaintiff in the
damages claim and in the incentive claim constituted
a rejection of
the Defendant's offer, alternatively that by the time the Plaintiff’s
attorneys wrote the letter of 21 May
2013, the offer had lapsed.
Further alternatively the Defendant pleaded that it withdrew its
offer of gratuity in terms of a letter
dated 19 October 2012
addressed to the Plaintiff’s attorneys by the Defendant's
attorneys.
Findings
[24] I shall deal
with the relevant evidence as part of my judgment.
[25] The court is
faced with single witnesses as only the Plaintiff and Mr Moraba
testified in this matter.
[26] The overall
burden of proof rests on the Plaintiff to prove the subsequent
agreement and the oral extension of the subsequent
agreement. The
Plaintiff also assumed the duty to begin.
[27] It is a trite
principle in the law of contract that the party relying on a contract
must prove the existence of the contract
and the terms upon which he
relies (see: McWilliams v First Consolidated Mines (Pty) Ltd
1982 (2)
SA 1
(A); Badenhorst v Van Rensburg
1985 (2) SA 321
(T) at 335; Cecil
Nurse (Pty) Ltd v Nkola
2008 (2) SA 441
(SCA) at 445E).
[28] The first issue
to be decided is whether, on a balance of probabilities, a contract
of employment was entered into between
the parties for a period of
three years terminating on 30 September 2014.
[29] The damages
claim only comes into play if I find that the Plaintiff discharged
his onus. It is evident from the pleadings that
a number of disputes
of facts would arise when the parties testify.
[30] Stellenbosch
Farmers’ Winery Group Ltd and another v Martell Et Cie and
others 2003 (1) SA 11 (SCA) at p14I- 15B, summarizes
the technique
generally employed by Courts in resolving factual disputes as
follows:
“To come to a
conclusion on the disputed issues a court must make findings on (a)
the credibility of the various factual witnesses;
(b) their
reliability; and (c) the probabilities. As to (a), the court's
finding on the credibility of a particular witness will
depend on its
impression about the veracity of the witness. That in turn will
depend on a variety of A subsidiary factors, not
necessarily in
order of importance, such as (i) the witness' candour and demeanour
in the witness-box, (ii) his bias, latent and
blatant, (iii) internal
contradictions in his evidence, (iv) external contradictions with
what was pleaded or put on his behalf,
or with established fact or
with his own extracurial statements or actions, (v) the probability
or improbability of particular
aspects of his version, (vi) the
calibre and cogency of his performance compared to that of other
witnesses testifying about the
same incident or events. As to (b), a
witness' reliability will depend, apart from the factors mentioned
under (a)(ii), (iv) and
(v) above, on (i) the opportunities he had to
experience or observe the event in question and (ii) the quality,
integrity and independence
of his recall thereof. As to (c), this
necessitates an analysis and evaluation of the probability or
improbability of each party's
version on each of the disputed issues.
In the light of its assessment of (a), (b) and (c) the court will
then, as a final step,
determine whether the party burdened with the
onus of proof has succeeded in discharging it. The hard case, which
will doubtless
be the rare one, occurs when a court's credibility
findings compel it in one direction and its evaluation of the general
probabilities
in another. The more convincing the former, the less
convincing will be the latter. But when all factors are equipoised
probabilities
prevail.”
[31] Apart from the
unsigned renewal of contracts of employments annexed to the parties’
pleadings, various unsigned draft
renewal of contracts of employments
which were part of the trial bundle were also referred to in
evidence. These documents, at
first glance appeared to be duplicates.
However closer scrutiny of these documents revealed that, when
comparing same, they contained
numerous differences and tracked
changes appeared in certain of these documents. The court was
confronted with a mass of same dated
(21 October 2011) 'draft'
contracts of employment containing differences.
[32] The Plaintiff
interchangeably referred to POC 3 and the renewal of contract of
employment at page 159-162 of the trial bundle
(“TB159”).
The Plaintiff contended that it is one and the same document. I pause
to mention that POC 3 had a missing
page, according to Plaintiff's
Counsel TB159 was the complete contract. The Plaintiff testified that
he received the document (referring
to POC 3 and TB159
interchangeably) from Ms Edwina Kruger (“Ms Kruger”), the
personal assistant of Mr Moraba under
cover of an e-mail on 21
October 2011 ("the covering e-mail"). These two documents
are not the same. For example the
words "in the event that you
are appointed into the position of Executive Manager: Corporate
Strategy a new formal performance
contract will be put into place on
the expiry of this contract" appear on TB159 and not in POC 3 or
in the document at page
175-178 of the trial bundle to which I shall
refer below.
[33] In order to
identify the correct document, which was attached to the covering
e-mail, I requested the Plaintiff’s Counsel
during closing
argument to furnish both the covering e-mail and the enclosed
attachment to the court. These documents were provided
to the court
by the Plaintiff. The contract of employment provided to the court
was a document substantially similar to POC 3 (it
was not TB159) and
it contained the missing page of POC 3. I was informed by the
Defendant's Counsel that the attachment was on
page 175-178 of the
trial bundle. Due to the fact that there were different versions of
the same document dated 21 October 2011,
I was unable to determine,
if the document furnished to the court by the Plaintiff was the same
document which was furnished to
the Plaintiff by the Defendant.
[34] The Plaintiff
testified that the covering email simply said: “Herewith your
renewal of employment contract. Kindly read
and advise". The
words quoted by the Plaintiff do not appear on the covering e-mail.
The covering e-mail by Ms Kruger to the
Plaintiff states in the
subject line: ”Renewal of contract of employment 21 October
2011”. The rest of the covering
e-mail is blank.
[35] Mr Moraba in
his evidence in chief testified that he and the Plaintiff orally
agreed to the terms embodied in POC 2. He stated
that POC 3 was not
the document presented to the Plaintiff and that he did not know the
origin of POC 3. He also testified that
there was no agreement
between him and the Plaintiff that if GEHS was not approved before 29
February 2012 the Plaintiff would
be appointed to the position of
Executive Manager Corporate Strategy for three years effective 1
September 2011 as provided in
POC 3 or POC 4. During cross
examination the Plaintiff’s Counsel pointed out to Mr Moraba
that there was a missing page in
POC 3 and referred him to TB159. Mr
Moraba under cross examination testified that he did not consider the
document as it contradicted
the terms of POC 2. He testified that he
communicated this to the Plaintiff during October 2011, and it was
for this reason the
Plaintiff took so long to effect the changes to
POC 3, POC 4 which the Plaintiff only presented to the Defendant the
following
year.
[36] Mr Moraba did
not dispute the fact that POC 3/TB159 came about because 29 February
2012 was the date upon which the GEHS would
be finalised and
approved. Mr Moraba testified at that time the Plaintiff was under a
one year contract of employment in terms
of POC 2 and it fell within
the period of that contract. Mr Moraba denied the Plaintiff's
contention that he was dissatisfied with
the one year contract
period. He also testified that the Plaintiff was content with the
fact that he would be receiving an incentive
of 100% in recognition
of the shorter contract period. Mr Moraba said that as far as he was
concerned the Plaintiff’s assignment
was for a one year period.
[37] Mr Moraba
volunteered that the Plaintiff was a skilled and competent employee
and the one year contract period was a special
assignment and that
it was always the Defendant's intention to retain the Plaintiff after
the expiry of the one year period if
GEHS was not approved. He stated
that the Plaintiff was one of the “key people” and his
employment would be extended
even if it was "in a different
light".
[38] During cross
examination, the Plaintiff testified that at the time of the
termination of his contract of employment TB159 was
the existing
contract of employment. In response to a question by Defendant's
Counsel that this was the first time that the Plaintiff
has indicated
that the terms of his employment were contained in the document at
TB159, the Plaintiff replied this is what he has
been saying all the
time. The Defendant's Counsel asked the Plaintiff the following
question:
"But your
pleaded case was that it was an oral agreement arising from the
aforesaid and when I asked you what the aforesaid
was you said it was
POC 3 and POC 4 and it was an oral agreement you said in your
pleadings". The Plaintiff replied thereto
as follows: "which
was reduced to writing as you can see”.
[39] It is clear
from the document provided by the Plaintiff to the court that TB159
was not the document which, as he contended
in his testimony, was
received from the Defendant. The correct document is at page 175-178
of the trial bundle.
[40] The Defendant's
Counsel argued that the Plaintiff's case, as pleaded, is contrary to
his testimony in that he no longer placed
reliance on POC 3 and POC 4
in support of the alleged tacit contract. In support of his
submission the Defendant’s Counsel
referred to the case of
Minister of Agriculture and Land Affairs and Another v de Klerk and
Others
2014 (1) SA 212
(SCA) at p223 para 39 where Madjiet JA stated
that the parties are bound by their pleadings. The object of
pleadings being to delineate
the issues to enable the other party to
know what case has to be met, and that it is impermissible to plead
one particular issue
and to then seek to pursue another at the trial
(see also Gusha v Road Accident Fund
2012 (2) SA 371
(SCA) para 7 and
Imprefed (Pty) Ltd v National Transport Commission
[1993] ZASCA 36
;
1993 (3) SA 94
(A) at 107G-H). Further it was stated in the case of
Triomf Kunsmis (Edms) Bpk v AE & CI Bpk
1984 (2) SA 261
that a
court in coming to a decision as to whether a tacit agreement has
been
proved must decide
whether the relevant facts have been pleaded and proved.
[41] The Plaintiff
had ample opportunity to amend his pleadings and in the absence of an
amendment I consider the Plaintiff bound
by his pleadings. I am not
prepared to accept that a party who interchangeably refers to
different documents containing various
differences (POC 3 or TB159 or
trial bundle page 175-178 or any other document) in support of the
conclusion of a tacit contract
can expect a finding in his favour.
This militates against the conclusion of a tacit contract. If the
Plaintiff failed to prove
the conclusion of the tacit contract as
pleaded on a balance of probabilities and it follows that the
Plaintiff by necessary implication
that he also failed to prove the
oral agreement.
[42] However, if I
am wrong, I find that the Plaintiff failed to prove the conclusion of
the oral agreement itself on the basis
of the quoted portion of the
record. If the Plaintiff could, as he goes along, rely on any
contract, it would not meet the standards
required of pleadings
specifically the provisions of Rule 18(6) of the Uniform Rules of
Court and it would create uncertainty to
a degree which, if allowed,
would inevitably result in prejudice to opposition parties. A party
must decide when putting ink on
paper and plead his case with
reasonable accuracy so that the other party knows which case he has
to meet and what to expect. He
should refer to the documents upon
which he intends to rely.
[43] The Plaintiff
pleaded as follows in his Particulars of Claim:
"14 on or
about 24 October 2011, the Plaintiff presented the Defendant with his
written counter proposal to the revised
draft proposal.
14.1 Annexure "POC
4" annexed hereto is a copy of the Plaintiff's written counter
proposal, the content thereof is incorporated
herein by way of
reference".
[44] A counter
proposal cannot in my view give rise to a tacit contract unless
accepted by the Defendant. It was not alleged by
the Plaintiff that
his counter proposal contained in POC 4 was either expressly or
tacitly accepted by the Defendant. The ongoing
negotiations and
further proposals by both parties destroy any prospect of the
establishing of a tacit contract as contended by
the Plaintiff.
[45] The HRER
Committee Meetings dated 7 September 2011 and 15 September 2011
respectively make reference to a one year contract
period as follows:
"HRER Committee
Meeting dated 7 September 2011: ...In the case of Sydney Mutepe (the
Plaintiff), the following events have
overtaken the original plan to
retain him in the role of Executive Manager: MDI for three
years:...Sidney has been instrumental
in packaging the GEHS proposal
on behalf of the Department of Human Settlements. As a result, his
contract with NFHC will be extended
to one year instead of the
original three years, within which time a decision (depending on the
turn of events) will be made. In
view of this his incentive will be
kept at 100% of T.O.C.E".
"HRER Committee
Meeting dated 15 September 2011…As a result of Mr Mutupe's
contribution in the formation of the GEHS's
proposal, he was asked to
head up the team. The CEO, approached him to be seconded for a year
in the GEHS project and he is willing
to enter into a one year
contract with NFHC in this regard, instead of his employment contract
being renewed for a fixed three
years. Mr Ntsaluba and Ms Ramarumo
raised concerns that appointing Mr Mutupe's for one year to oversee
GEHS and not for three years
as Executive Manager: MDI, would pose a
risk and might have a negative impact on Mr Mutupe's morale. Mr
Moraba, responded that
Mr Mutupe's is comfortable with taking up the
one year secondment and is looking forward to work with DPSA,
National Treasury,
and National Department of Human Settlements to
structure GEHS. His role might change within that year".
[46] The Plaintiff
testified that he did not indicate to Mr Moraba that he was willing
to accept a one year contract period. In
my view, it is improbable
that Mr Moraba would have presented a fabrication to the HRER
Committee that there was a change of the
original plan of extending
the Plaintiff’s employment from a three year period to a one
year period and that the Plaintiff
was “willing” and
“comfortable” to accept a one year contract of employment
if he had not discussed it
with the Plaintiff beforehand. Soon
thereafter, on 22 September 2011 presented POC 2 to the Plaintiff
which provides a one year
contract.
[47] Mr Moraba
testified that he was obliged to present any amendments effected to
the terms of the Plaintiff's contract of employment
to the HRER
Committee for approval. It follows that if the period of the contract
of employment had changed from a one year contract
period to a three
year contract period based on POC 3 or POC 4 or TB159 or any other
document relied upon by the Plaintiff, the
HRER Committee Meeting
held on 17 November 2011 would have reflected such a change. The fact
that it did not is a strong probability
against the Plaintiff's
version of the events.
[48] The Plaintiff’s
evidence vacillated to such a degree that it is impossible to
determine the basis upon which a tacit
contract of employment or the
oral extension of the contract on the terms contained in POC 4 was
concluded.
[49] I considered
the Plaintiff’s evidence in chief regarding these various
renewals of contracts of employment and compared
it with his
pleadings as well as the answers furnished by the Plaintiff under
cross examination. In evidence in chief, the Plaintiff
testified as
follows: Firstly, the Plaintiff stated that he effected changes to
POC 3 which are contained in POC 4, these changes
were one or two
additions “mainly to say are we renewing my contract as credit
executive or are you giving me a new contract…”
and the
second addition was to improve governance. He stated that he
presented POC 4 to the Defendant and he thought the Defendant
would
incorporate all the “suggestions” he made and that he
would provide him with a “proper contract”
as POC 4 was
“a draft”. Secondly, the Plaintiff testified further that
he was satisfied with POC 3 and that “after
the 21 October”
he knew, as he had reached agreement with Mr Moraba that he was
employed by the Defendant for a period of
three years seconded to
GEHS until February 2012 and that he would thereafter return to the
Defendant as Executive Manager Corporate
Strategy. Thirdly, on the 19
March 2012 he presented to Mr Moraba a proposed renewal of contract
of employment, he was of the view
that as it was a “final
amendment” of his renewal of contract of employment and it
might have to go to HRER Committee
for a “formal contract”
to be formulated.
[50] However, under
cross examination the Plaintiff, responded regarding these various
renewals of contracts of employment as follows:
Firstly, he stated
the parties “started having agreements on ....the 21 October
and the request was a draft”. Secondly,
he stated that
agreement was reached between the parties on POC 3 and that POC 4
contained revisions which he effected to improve
governance and if Mr
Moraba wished to accept his proposals he would incorporate them
otherwise his contract of employment would
remain on the terms
embodied in POC 3. Thirdly, also contrary to his pleadings where he
stated that POC 4 was his written counter
proposal to POC 3, he
stated that POC 3/TB159 was the contract of employment and not POC 4.
Fourthly, when Defendant’s Counsel
pointed out the differences
between POC 3 and TB159 the Plaintiff replied that there were many
versions but that TB159 was the
document agreed upon and any
subsequent agreement was an attempt by him to improve governance. The
Plaintiff stated that he had
a meeting with Mr Moraba on 19 March
2012 and he and Mr Moraba “reached agreement” that he
would be employed by the
Defendant for a period of three years as
Executive Manager Corporate Strategy. The changes in the time line of
the GEHS had necessitated
this meeting with Mr Moraba to incorporate
the changes in the contract of employment they were finalizing and
that the Plaintiff
“accepted” that Mr Moraba “accepted
the changes” and he “waited for the final contract....
that does
not have addition and divisions and all this for
signatures, which never came".
[51] In my view, the
Plaintiff attempted to overcome the difficulties by providing the
explanation that he was improving governance.
I do not accept his
explanation that the reason he effected changes to POC 3 as appear in
POC 4 was to improve governance and that
the reason why the proposed
renewal of contract of employment which he had presented to Mr Moraba
on 19 March 2012 was not pleaded
by him was “because any other
work which was done subsequent to the contract of 21 October 2011 was
to improve governance
and to accommodate changes in the strategy of
GEHS”. A simple question arises, why did the Plaintiff deem it
necessary to
include POC 4 in his pleadings, which he pleaded was his
written counter proposal to POC 3, if, as testified by him, it also
pertained
to the improving of governance. Significantly, the
Plaintiff did not deem it necessary to include in his pleadings his
proposed
renewal of contract of employment emailed on 19 March 2012
to Mr Moraba. Instead the Plaintiff pleaded that it was orally agreed
between the parties that the time afforded for the approval of GEHS
would be extended to 30 September 2012. It was conceded by
Plaintiff’s Counsel during closing argument in response to a
question posed by the court that the changes effected by the
Plaintiff to the documents did not merely pertain to the improving of
governance.
[52] The Plaintiff’s
testimony that he did not receive a response from Mr Moraba to the
amendments effected by him to POC
4 and that he did not receive a
response from Mr Moraba to his 19 March 2012 proposed renewal of
contract of employment are indicative
of the fact that no agreement
was reached between the parties on the terms contended by him. Taking
into consideration that on
23 May 2012 Mr Moraba instead presented to
him a renewal of contract of employment annexure “1” for
a period of one
year and one month to 30 September 2012 to
accommodate the extension date for the approval of GEHS. It could be
expected that the
Plaintiff would have immediately contacted Mr
Moraba to query the termination date of 30 September 2012, which he
failed to do.
I do not accept the explanation of the Plaintiff that
it would have been "disrespectful” for him to do so.
Another
question arises, if the Plaintiff had a three year contract
with the Defendant why would Mr Moraba present him with a one year
contract extended by one month under cover of an e-mail which stated
that he would ask Ms Kruger to arrange a meeting with the Plaintiff
to conclude on the matter. Contrary to the evidence of Mr Moraba, the
Plaintiff testified that no meeting was held between him
and Mr
Moraba.
[53] I refer to an
e-mail the Plaintiff addressed to Mr Moraba on 21 September 2012. In
this e-mail the Plaintiff requested his
"renewal of contract of
employment and job description is expedited……noting
that we have agreed that all these
issues be concluded before the end
of September 2012…” This request occurred long after the
date upon which the alleged
tacit contract and the oral extension was
concluded. It is improbable that a party would make such requests if
there was a prior
meeting of the minds between them.
[54] If, as
contended by the Plaintiff, his contract of employment terminated on
30 September 2014 and the position allocated to
him was that of
Executive Manager Corporate Strategy it would not have been necessary
to request that his renewal of contract of
employment and job
description be expedited. I do not accept the submission made by
Plaintiff's Counsel in response to a question
by the court, that this
e-mail should be interpreted on the basis that it purely relates to
the issue of the Plaintiff's job description
as the position of
Executive Manager Corporate Strategy was awarded to Ms Mamatela. The
content of the above quoted e-mail is clear.
Further, the Plaintiff's
testimony that he had a discussion with Mr Moraba regarding the
appointment of Ms Matamela as Executive
in charge of strategy and Mr
Moraba told him that it was his “prerogative” as to who
he appoints, shows that no agreement
was reached between the parties
that the Plaintiff was assigned to the position Executive Manager
Corporate Strategy.
[55] The test to be
applied when considering whether or not a tacit contract has been
concluded has been enunciated in a number
of cases and there is no
controversy about the test to be applied. In order to establish a
tacit agreement, it is necessary to
for the Plaintiff to allege and
prove unequivocal conduct that establishes on a balance of
probabilities that the parties intended
to, and did in fact contract
on the terms alleged. It must be proved that there was an agreement
(see: Standard Bank of South Africa
Ltd v Ocean Commodities Inc
1983
(1) SA 276
(A) at 292; Joel Melamed and Hurwitz v Cleveland Estates
(Pty) Ltd 1984 (3); Muller v Pam Snyman Eiendomkonsultante (Edms) Bpk
[2000]). The party alleging a tacit agreement must catalogue and
prove the unequivocal conduct and circumstances from which the
tacit
agreement is to be inferred and must allege and prove the terms of
the contract (see: Roberts Construction Co Ltd v Dominium
Earthworks
(Pty) Ltd
1968 (3) SA 255
(A); First National Bank of Southern Africa
Ltd v Richards Bay Taxi Centre (Pty) Ltd
(1999) 2 ALL SA 533
(N)).
[56] In Muhlmann v
Muhlmann 1984 (3) 102 (A) at 124 C it was stated that the true
enquiry is whether it was more probable or not
that a tacit agreement
had come into existence.
[57] In the case of
McDonald v Young
2012 (3) SA 1
(SCA) at p11 para 25 the following was
stated regarding tacit agreements:
"It is trite
that a tacit agreement is established by conduct. In order to
establish a tacit agreement, the conduct of the
parties must be such
that it justifies an inference that there was consensus between them.
There must be evidence of conduct which
justifies an inference that
the parties intended to, and did, contract on the terms alleged”.
[58] The Plaintiff’s
Counsel referred to the case of City of Cape Town (CMC
Administration) v Bourbon- Leftley NNO 2006(3)
SA 488 para 19 where
the following was stated by Brand JA regarding tacit agreements:
"A discussion
of the legal principles regarding tacit terms is to be found in the
judgment of Nienaber JA in Wilkins NO v Voges
[1994] ZASCA 53
;
1994
(3) SA 130
(A) at 136H-137D. These principles have since been applied
by this court, inter alia, in Botha v Coopers & Lybrand
2002 (5)
SA 347
(SCA) paras 22-25 and in Consol Ltd t/a Consol Glass v Twee
Jonge Gezellen (Pty) Ltd and another
[2004] 1 All SA 1
(SCA) paras
50-52. As stated in these cases, a tacit term is based on an
inference of what both parties must or would necessarily
have agreed
to, but which, for some reason or other, remained unexpressed. Like
all other inferences, acceptance of the proposed
tacit term is
entirely dependent on the facts. But, as also appears from the cases
referred to, a tacit term is not easily inferred
by the courts. The
reason for this reluctance is closely linked to the postulate that
the courts can neither make contracts for
people, nor supplement
their agreements merely because it appears reasonable or convenient
to do so (see Alfred McAlpine &
Son (Pty) Ltd v Transvaal
Provincial Administration
1974 (3) SA 506
(A) at 532H). It follows
that a term cannot be inferred because it would, on the application
of the well known 'officious bystander'
test, have been unreasonable
of one of the parties not to agree to it upon the bystander’s
suggestion. Nor can it be inferred
because it would be convenient and
might therefore very well have been incorporated in the contract if
the parties had thought
about it at the time. A proposed tacit term
can only be imported into a contract if the court is satisfied that
the parties would
necessarily have agreed upon such a term if it had
been suggested to them at the time (see Alfred McAlpine supra at
532H-533B and
Consol Ltd t/a Consol Glass supra para 50). If the
inference is that the response by one of the parties to the
bystander’s
question might have been that he would first like
to discuss and consider the suggested term, the importation of the
term would
not be justified. In deciding whether the suggested term
can be inferred, the court will have regard primarily to the express
terms
of the contract and to the surrounding circumstances under
which it was entered into. It has also been recognised in some cases,
however, that the subsequent conduct of the parties can be indicative
of the presence or absence of the proposed tacit term (see
Wilkins NO
v Voges supra at 143C-E; Botha v Coopers & Lybrand supra para
25)”.
[59] In my view the
objective facts such as the various draft agreements which exchanged
hands and which were never signed as well
as the correspondence
exchanged between the parties and the minutes of meetings referred to
in evidence, all of which constitutes
objective evidence, militates
against the coming into being of a tacit three year contract of
employment.
[60] The Plaintiff
testified that he did not receive the attachment to the covering
e-mail dated 26 September 2012 from Mr Moraba
in respect of the
renewal of the Executive employment contract for a period of three
years. This e-mail states inter alia as follows:
"Subject RE:
Renewal of Executive Employment Contract- Sydney Mutupe- 15-05-2012
Importance: High
Dear Sydney
Attached please find
a copy of Renewal of the Executive Employment Contract for your
consideration...
Looking forward to
finalising the Renewal of your Contract...”
[61] The Plaintiff
testified that he received the e-mail but did not receive the
attachment. He stated that as the subject line
"Re: Renewal of
Executive Employment Contract- Sydney Mature- 15-05-2012” was
always the same in his communications
with Mr Moraba he did not give
much thought to it. Surely the Plaintiff must have been alerted or at
least curious when he read
the first sentence and if not the first
sentence, then the last sentence of the above quoted e-mail and one
would have expected
the Plaintiff to query the e-mail and/or to
request Mr Moraba to send the attachment to him. The e-mail further
stated "Importance
High”. Contrary to the Plaintiff’s
explanation that the subject line was always the same, in an e-mail,
six days earlier,
dated 20 September 2012, by Mr Moraba to the
Plaintiff, the subject line read “ Re: Bonus Payment
Reconciliation”,
- completely different to the subject line of
the email dated 26 September 2012. The Plaintiff testified that the
first time he
saw the renewal of contract of employment was when he
saw the Defendant’s Plea.
[62] The following
day on 27 September 2012, the Plaintiff addressed an e-mail to Mr
Moraba and enclosed an internal memorandum
dated 26 September 2012
which provides inter alia as follows:
"Proposal to
conclude discussion on the following outstanding matters:
1. Bonus calculation
2. Renewal of
employment contract and role description (my underlining)
3. Nature of risks I
am deemed to have undertaken by accepting secondment to GEHS"
[63] Once again, the
Plaintiff makes no mention in the internal memorandum that he has a
contract of three years until 2014 as Executive
Manager Corporate
Strategy. The words "outstanding matters" that the
Plaintiff utilised in his internal memorandum indicate
that his
employment contract and role description still needed be determined.
The Plaintiff also mentioned in this internal memorandum
that the
Defendant requested him to sign a one year contract backdated to
September 2011. It is clear that the Plaintiff was disappointed
that
the position of Executive Manager Corporate Strategy in April/May
2012 was allocated to Ms Mamatela. This is clear from the
Plaintiff’s
internal memorandum in which he addressed the issue and stated
“without notice”, the Defendant appointed
head of
strategy in April/May 2012 to Ms Mamatela…”
The Plaintiff’s
testified regarding the meetings of 4 September 2012 and 17 September
2012 which he referred to in his internal
memorandum that he and Mr
Moraba “did not seem to be agreeing, we did not seem to have
anything concrete that we can work
on, there is no foundation that we
are working on” confirms that there was no animus contrahendi
between the parties.
[64] Mr Moraba
testified that the three year fixed term contract of employment was
attached to the covering email dated 26 September
2012. Mr Moraba
also testified that subsequent two meetings were held between him and
the Plaintiff on 27 September 2012 and on
10 October 2012 and that
the Plaintiff was emotional at these meetings. The Plaintiff had
heated discussions with Mr Moraba as
he was not “the person”
appointed as Executive Manger Corporate Strategy, the position
offered to the Plaintiff in
the said renewal of contract of
employment. The Plaintiff denied that such meetings were held. Under
cross examination the Plaintiff
evaded answering the question as to
whether he was prepared to share the position of Executive Manager
Corporate Strategy with
Ms Mamatela. After being asked the same
question by the Defendant's Counsel three consecutive times, as the
Plaintiff evaded answering,
he finally responded :
"the issue is
that it cannot be shared, it is one corporate, Executive Manager
Corporate Strategy, you cannot share that”.
[65] This evidence
corroborates the testimony of Mr Moraba that the Plaintiff in the
discussions he had with Mr Moraba was not prepared
to share the
position with Ms Mamatela as he did not want to be part of a pool of
two persons as Executive Manager Corporate Strategy.
The Plaintiff
was in the employment of the Defendant up to 12 October 2012. On the
Plaintiff’s own version his internal memorandum
dated 26
September 2012, which he sent to Mr Moraba on 27 September 2012, was
a proposal to conclude on outstanding matters. It
is highly
improbable that Mr Moraba without having any further discussions with
the Plaintiff would present him with the letter
of 12 October 2012
terminating his services.
[66] It is most
unfortunate what transpired in this matter. The Plaintiff was an
experienced person who delivered outstanding results
in the
performance of his work. It evident from Mr Moraba's testimony, as
well the contents of the letter dated 12 October 2012
offering the
gratuity wherein Mr Moraba stated “…Your diligence in
the leading and managing of both the MDl and GEHS
projects, was self
evident and will certainly leave a legacy” that he held the
Plaintiff in high regard. He complemented
the Plaintiff right until
the end. When reading the numerous e-mails exchanged between the
Plaintiff and Mr Moraba it is clear
that Mr Moraba ensured that all
the Plaintiff’s requests, which included above normal salary
increases, as well as bonus
recalculations, were satisfactorily
addressed coupled therewith the Plaintiff was unable to furnish any
facts which would have
caused a change in Mr Moraba’s cordial
relationship with the Plaintiff. There was no reason or motivation
for Mr Moraba to
act in a manner which would be prejudicial to the
Defendant to lose a skilled and exceptionally competent employee such
as the
Plaintiff. There would be absolutely no reason for Mr Moraba
to lie.
[67] The fact that
the parties orally agreed to the extension of time period of the GEHS
by a period of one month supports the fact
that there was a real
possibility of the Plaintiff being employed by the GEHS. There would
have been no other probable explanation
as to why the Plaintiff would
agree to the extension of this period if the Plaintiff already had a
three year fixed period of employment
with the Defendant if the
possibility was that he would be employed by the Government programme
after the GEHS was approved. It
would not have been necessary to
include the three year contract period especially in light of the
fact that as testified by Mr
Moraba the Plaintiff was at all times
aware and this was conveyed to him on many occasions by Mr Moraba
that the intention was
to retain him in the Defendant’s
employment. This was duly done, when the Defendant offered him the
renewal of contract
of employment on 26 September 2012.
[68] It is
noteworthy and significant that the Plaintiff testified that even if
he did receive the renewal of contact of employment
attached to the
covering e-mail dated 26 September 2012 he nevertheless would have
requested the involvement of HRER Committee
as he and Mr Moraba was
unable to agree. The Plaintiff did not elaborate or provide the
reasons why he would need the involvement
of HRER as his job
description was that of Executive Manager Corporate Strategy. The
probabilities once again indicate that he
was aggrieved and
disappointed with the position offered to him by the Defendant. It
seems to me that he was expecting a position
that he would not be
sharing and a role description which was most suited to his
competencies and skills as stated by him in his
internal memorandum
of the 26 September 2012.
[69] The Plaintiff’s
Counsel submitted that in applying the principles in the City of Cape
Town supra, which was reaffirmed
in the Mc Donald v Young supra, to
the facts of the matter is not an easy task. Counsel for the
Plaintiff continued that this is
so because on the Plaintiff’s
version many of the terms were express as provided in tb175 and the
Plaintiff's response thereto
in POC 4. He submitted that the
subsequent oral agreement entered into between the parties, in March
2012 was not an agreement
to extend the Plaintiff’s renewal of
contract of employment but an oral agreement to extend the time
period within which
the GEHS would be approved. The Plaintiff’s
Counsel further submitted that what was not express was the parties
assent to
the terms contended for during argument and it is submitted
that it was in this sense that the term "tacit" was used in
paragraph 16 of the Particulars of Claim. Neither of the parties
signed the documents in question giving an unequivocal indication
of
their assent to the material terms contained therein.
[70] The Plaintiff’s
Counsel submitted that despite the various draft versions of the
renewal of contracts of employment,
the essence of the terms of the
contract of employment have been pleaded and proved, namely a period
of three years, the Plaintiff's
annual remuneration, and his job
description as Executive Manager Corporate Strategy. The Plaintiff’s
Counsel submitted
in his heads of argument that the testimony proved
that the parties concluded a contract of employment on the terms as
pleaded
by the Plaintiff and that the court should therefore consider
POC 3 read with POC 4. I do not agree with these contentions made
by
the Plaintiff’s Counsel. Firstly the Plaintiff’s evidence
contradicted his pleadings. Secondly, the Plaintiff's
own version
does not support the conclusion of a contract of employment as
alleged by the Plaintiff.
[71] In so far as
the Plaintiff’s contention that his contract of employment was
prematurely terminated I quote hereunder
from the transcript the
questions posed to the Plaintiff by the Defendant's Counsel and his
responses thereto:
"What was the
contract that was prematurely terminated?---
Three year agreement
as Executor Manager Corporate Strategy....
So when you were
terminated, as you have put it, did you have a fixed three year
contract? ---It was
still under negotiation.
It was was still
under negotiation? ---Yes…
So, it was not yet
a contract? ---No.
So the NFHC (the
Defendant) breached a contract that was not yet in existence is that
the basis of your claim? ---The NFHC breached
the contract that was
in negotiation but not yet signed”.
It is abundantly
clear that no three year term contract of employment was concluded
between the parties as contended by the Plaintiff.
In this part of
the Plaintiff’s evidence, the Plaintiff destroyed any prospect
of success which he might have had. It is
clear that the parties were
in negotiation at all relevant times and that they did not reach any
agreement regarding to at least
the term (the period) of the
Plaintiff’s further employment with the Defendant.
[72] Taking into
consideration the testimony of the Plaintiff and Mr Moraba, the
various renewal of contracts of employments on
the terms set out in
POC 3 and/or POC 4 and the subsequent oral agreement as set out in
the Plaintiff's pleadings, the different
versions of the renewal of
contracts of employment contained in the trial bundle, the numerous
email correspondence, the various
other documentation which were
referred to in evidence, are in my view inconsistent with the parties
having reached consensus on
the terms as contended by the Plaintiff.
The Plaintiff’s evidence was contradictory and inconsistent.
[73] It is of no
consequence whether the Plaintiff did receive the renewal of contract
of employment referred to in the covering
e-mail dated 26 September
2012 for the reason that the Plaintiff would not have accepted that
appointment and the Plaintiff did
not plead such version.
[74] Accordingly I
find that the Plaintiff failed to establish the existence of a
contract of employment as contended by him and
I dismiss the damages
claim.
[75] I now turn to
the Plaintiff’s incentive claim.
[76] The Plaintiff's
pleadings in this claim are substantially the same as in his damages
claim. Plaintiff's Counsel conceded, correctly
in my view, that there
was insufficient evidence to support the Plaintiff’s claim
which was based upon the premise that his
performance, and that of
the Defendant, had to be rated at 100% and that the Defendant's
performance was not to be taken into
account in the calculation of
the Plaintiff's bonuses. The Plaintiff's Counsel conceded the
Plaintiff's claim for underpaid bonuses
and also conceded that part
of the Plaintiff's claim in respect of incentive bonuses which the
Defendant pleaded were premature
as such amounts were due but not yet
payable at the time the Plaintiff instituted action. I add that
subsequently the Defendant
did make payments up to date of these
amounts when they became payable.
[77] The Plaintiff's
Counsel submitted, however, that the Plaintiff is entitled to an
incentive bonus which the Defendant has not
paid is in respect of the
prorated period being the Plaintiff's last six months of his
employment for the period 1 April 2012 to
30 September 2012. He
contended further that the Defendant did not plead that the claim in
respect of this prorated period was
premature at the date the action
was instituted by the Plaintiff. The Plaintiff's Counsel argued that
the Defendant in paragraph
44.4 and 44.5 of its Plea stated that
certain incentive amounts were due to the Plaintiff but not yet
payable in respect of the
period March 2011 and March 2012. The
Plaintiff’s Counsel argued that the Defendant pleaded that the
Plaintiff's action
is premature in respect of "these amounts "
(my underlining). He submitted that the words “these amounts”
as contained in the Defendant’s Plea did not pertain to the
part of the claim pertaining to the prorated period of six months.
Accordingly, this part of the Plaintiff's claim relating to the
prorated period is not premature.
[78] The Defendant’s
Counsel submitted that the onus is on the Plaintiff to prove the
incentive amounts claimed is due and
payable, it is thus not
necessary for the Defendant to plead that the claim is premature. He
further argued that, the Plaintiff’s
pleadings state that the
incentive amounts for the prorated period were due and the amounts
were payable as at from March 2013,
the Plaintiff, however instituted
action against the Defendant on 18 February 2013 prior to the amounts
becoming payable. In support
of this submission Defendant's Counsel
referred to the case of Weenen Transitional Local Council v Van Dyk
2002 (2) ALL SA 482
(AD).
[79] As stated
hereinabove, it is trite law, that he who alleges must prove and that
the onus is on the Plaintiff to prove his claim.
On the Plaintiff's
own version, he failed to establish that the amount claimed was due
and payable to him at the time he instituted
action on 18 February
2013. I quote paragraph 31 of the Plaintiff's Particulars of Claim of
the incentive claim where the following
is pleaded:
“.… the
Plaintiff became entitled to receive the following percentages of his
annual remuneration by way of a bonus
from the Defendant in the years
set out below….. March 2013 year 1 50%, March 2014, year 2 30%
and March 2015 year 3 20%”.
[80] It is
abundantly clear that on the Plaintiff’s own version the
incentive claim in respect of the prorated period was
prematurely
launched in that the Plaintiff instituted action against the
Defendant on 18 February 2013 and the amounts became payable
in
March 2013, March 2014 and March 2015 respectively.
[81] I add that, in
paragraphs 7.5.5 and 7.5.5.1 of the Defendant’s Plea in the
gratuity claim the following is stated:
“On the 18
February 2012 the Plaintiff instituted an action against the
Defendant…. claiming R 2 363 181.00 (the total
amount claimed
by the Plaintiff in the incentive claim-my insertion) as specific
performance of an alleged obligation on the Defendant
to pay
incentive amounts to the Plaintiff: the aforesaid claim for payment
of incentive payments was inflated, and premature…”
[82] Taking all the
above factors into consideration I find that the Plaintiff’s
claim in respect of the prorated period was
also prematurely
launched.
[83] Even if I am
wrong and also due to the fact that all the issues have been
crystallised and have been canvassed and considering
that during the
course of the proceedings the Plaintiff's claim in respect of the
incentive amounts of the 50% and the 30% for
the prorated six month
period became payable (save for the 20% incentive amount which
becomes payable in July 2015) I will determine
whether the Plaintiff
would be entitled to receive payments of such amounts.
[84] The Plaintiff's
Counsel submitted that the Defendant's contention that prorated
bonuses are not paid cannot be accepted as
the Plaintiff’s
initial bonus, for the period 1 August 2008 to 31 March 2009 was
prorated. He added that the three year rolling
incentive scheme, as
set out in the DPE Remuneration Guidelines has no provision depriving
employees of prorated bonuses when they
leave employment, nor could
Mr Moraba point to one when asked to do so in cross-examination. The
Plaintiff’s Counsel submitted
that none of the written
instruments bandied about during the negotiations between the
Plaintiff and Mr Moraba contained a provision
excluding bonuses for
uncompleted years upon departure. The Plaintiff’s initial
agreement also did not refer to such a limitation.
The Plaintiff's
Counsel submitted that there is also no provision requiring the
employee to be in employment to become entitled
to a bonus already
earned – in fact Maroba testified that the Board of Defendant
was considering introducing such a provision.
[85] The Plaintiff's
Counsel continued, the question is not whether there is something
prohibiting it, it is whether there is something
entitling it.
According to the Plaintiff's Counsel all the various contracts of
employment referred to by the Plaintiff and the
Defendant provide for
an incentive scheme based on the DPE Remuneration Guidelines. The DPE
Remuneration Guidelines state that
when you are employed you are
entitled to an incentive bonus. He argued, that it is not stated
therein that the incentive bonus
has to be calculated with reference
to the financial year of the institution concerned and that there is
no provision in the DPE
Remuneration Guidelines that an incentive
bonus for a prorated period cannot be awarded.
[86] The Plaintiff's
Counsel argued further that the DPE Remuneration Guidelines provide
as follows: "in the event of early
termination there should be
no automatic entitlement to the incentive”. Neither on the
Plaintiff version, (the Plaintiff’s
contract of employment was
unlawfully terminated by the Defendant, nor on the Defendant's
version the Plaintiff's contract terminated
on 30 September 2012) was
there an early termination. Accordingly, the prohibition as provided
in the DPE Remuneration Guidelines
does not apply to the Plaintiff's
claim of an incentive bonus.
[87] The Plaintiff's
Counsel submitted that given the above considerations the Plaintiff
is entitled to receive a bonus in respect
of the period 1 April 2012
to 30 September 2012. His annual remuneration during this period was
R1 605 000, 50% of which is R802
500. Assuming 80% performances by
both the Plaintiff and the Defendant and that he was entitled to a
calculation on 100% of his
income (see para 5.1 page 330 of
the trial bundle):
R802 500 x .8 x .8 =
R513 600 together with interest from date of judgment. Even on the
way in which the Defendant paid such bonuses,
the Plaintiff would
have received 80% of this amount by the time judgment is delivered –
50% in July 2013 and 30% in July
2014. The interest the Plaintiff has
lost in not receiving these payments more than compensates for the
failure to discount the
20% he would have received in July 2015.
[88] The Defendant’s
Counsel submitted that the Plaintiff has not pleaded or proved any
contractual basis upon which the Plaintiff
is entitled to an
incentive payment for a prorated period. The Defendant’s
Counsel argued that the Plaintiff’s employment
with the
Defendant terminated on 30 September 2012, accordingly, he did not
qualify for an incentive payment for the March 2013
financial year
end, as he only worked for the Defendant for six months of the
financial year which commenced on 1 April 2012 and
ended on 31 March
2013. The Defendant’s Counsel further argued that the various
renewal contract of employments relied
upon by the Plaintiff and the
Defendant provide that the performance of the Plaintiff and the
Defendant is to be determined at
the end of the financial year,
being March 2013 and the Plaintiff was employed until the 30
September 2012.
[89] The Defendant’s
Counsel submitted that the payment of incentive bonuses are
discretionary and that Mr Moraba representing
the Defendant did not
exercise his discretion at the end of the financial year in March
2013 to assess the Plaintiff's performance
and there was no
contractual obligation for him to do so. Moreover, Mr Moraba did not
provide evidence in this regard. The Defendant's
Counsel submitted
that the Plaintiff's performance cannot be determined on a
speculative basis, to assume the Plaintiff's performance
for the last
six month period when he was no longer employed by the Defendant. He
further argued that the Plaintiff cannot base
his bonus claim
calculations, as set out in the contract of employment POC 2 as it
has been not pleaded and in any event POC 2
is a contract upon which
the Defendant relies and the Plaintiff rejects. In support of this
submission the Defendant's Counsel
referred to the Rhodesian
Appellate Division case of case of Sager Motors (PVT) v Patel 1968
(4) [RAD] p99.
[90] I agree with
the Defendant's Counsel. The Plaintiff pleaded his case on a three
year rolling incentive scheme. He did not plead
any contractual basis
upon which the court can entertain the Plaintiff's entitlement to an
incentive bonus for a prorated period.
The Plaintiff did not plead
any basis upon which the Defendant could or should have exercised its
discretion to award an incentive
for a prorated period. In any event,
I accept the testimony of Mr Moraba that it is the practice of the
Defendant that the sustainability
of performance of both the
Plaintiff's performance and the Defendant's performance is only
determined at the financial year end.
Mr Moraba testified that the
Plaintiff would only be entitled to an incentive, if the Plaintiff
was in the employment of the Defendant
at the financial year end
March 2013 and as the Plaintiff left in the middle of the financial
year he would not be entitled thereto.
Mr Moraba evidence was that
the Defendant's performance for the year ending 31 March 2013 was
"80% something"
however he was not certain. Mr Moraba stated that the Plaintiff's
performance was 82% in the April 2012
review. However, no evidence
was led and nor was evidence obtained by Mr Moraba as to whether he
assessed the Plaintiff’s
performance at the end of the
financial year March 2013. In so far as the submission that the
Plaintiff in his first year of employment
was allocated a prorated
incentive bonus, I point out that the Plaintiff at that stage was in
the employment of the Defendant until
the financial year end March
2009.
[91] I mention
further that the Plaintiff's Counsel in calculating the Plaintiff's
incentive bonus for the prorated period 1 April
2012 - 30 September
2012 (no evidence was obtained or provided by Mr Moraba) assumed
Plaintiff's performance at 80% which was the
percentage awarded to
the Plaintiff by Mr Moraba in the April 2012 review. The Plaintiff's
Counsel further in calculating the Plaintiff's
incentive placed
reliance upon the renewal of the contract of employment which the
Defendant relied upon and which the Plaintiff
rejected (see Sager
case supra p101).
[92] In any event
considering my finding that the Plaintiff has failed to discharge its
onus to establish the existence of a renewal
of contract of
employment on the terms contended by the Plaintiff, I find that there
is no contractual basis entitling the Plaintiff
to payment of an
incentive bonus in respect of the prorated period.
[93] Accordingly I
dismiss the incentive claim.
[94] In relation to
the gratuity claim, I will determine, firstly, the Plaintiff’s
entitlement thereto and in this context
I will consider whether the
offer of gratuity was validly withdrawn and secondly whether there
was a tacit rejection by the Plaintiff
of the offer of gratuity.
[95] During closing
argument, the Defendant amended its Plea to include the further
alternative defence of the withdrawal of the
offer of gratuity on the
basis of an e-mail dated 19 October 2012 by the Defendant's erstwhile
attorneys to the Plaintiff’s
erstwhile attorneys.
[96] The Defendant
made an offer of gratuity in an amount of R 400 000.00 as contained
in a letter dated 12 October 2012 addressed
by Mr Moraba to the
Plaintiff. The letter provides as follows:
"... END OF
FIXED PERIOD CONTRACT
1) We refer to your
fixed contract of employment with the National Housing Finance
Corporation ("the Corporation") - [the
Defendant- my
insertion] concluded on or about September 2011 and terminating on
30 September 2012 ("the Contract").
2) We refer to the
various interactions between yourself and the Corporation with regard
to identifying a suitable role for you
to occupy. While the
Corporation expressed its willingness to create a strategy pool,
where your competences would have been
utilised, in return, you
expressed your unwillingness to accept this role.
3) Accordingly, we
confirm that the Contract terminated on 30 September 2012, and that
at present, there are no prospects of you
assuming a different role
to that already offered by the Corporation.
4) The Corporation
would like to thank you for the meaningful contribution you have
made, as a member of the Corporation's Executive
Management team and
in the various assignments you carried out while in the employ of
the Corporation, Your diligence in the
leading and managing of both
the MDl and GEHS projects, was self evident and will certainly leave
a legacy.
5) After much
consideration, as a gesture of good faith, the Corporation would like
to extend a gratuity, equivalent of R400 000.00..."
[97] On the same day
an e-mail was sent by the Plaintiff to Mr Moraba in which the
Plaintiff stated inter alia as follows:
"I will brief
my legal Counsel on this matter on Tuesday. In all probability, the
matter will enter a new arena, all communications
will be thru legal
Counsel".
[98] On 16 October
2012 the Plaintiff’s erstwhile attorneys sent a letter to Mr
Moraba in response to his e-mail dated 12
October 2102. In this
letter it is stated that the Defendant summarily and unilaterally
terminated the Plaintiff’s services.
A fixed term contract is
alleged and that Plaintiff’s services were unlawfully
terminated on 30 September 2012. The letter,
recorded that the
Plaintiff tendered his services to the Defendant, as his services
were prematurely terminated.
[99] On 19 October
2012 the Defendant's erstwhile attorneys sent an e-mail to the
Plaintiff’s erstwhile attorneys which stated
as follows:
"...in light of
what is happening, the spirit in which the gratuity was extended by
our client to your client on 12 October
2012 has been sullied. As a
result, our client shall no longer be paying to your client a
gratuity..."
[100] The
Plaintiff’s Counsel in argument, did not dispute that the
e-mail by the Defendant constitutes a withdrawal of the
offer of
gratuity prior to acceptance thereof by the Plaintiff. However, the
Plaintiff’s Counsel argued, that there is no
evidence before
the court regarding the withdrawal of the offer of the gratuity. The
Plaintiff’s Counsel submitted that the
agreement by the legal
representatives at the pre-trial conference regarding documents was
that they are what they purport to be
but not to the proof of the
contents thereof. I refer to the pre-trial minutes regarding the
production of documents, it is stated
therein as follows: "the
documents in the trial bundle be accepted as being what they purport
to be, without production of
the original, unless either party
advises the other, in writing, to the contrary by 16 May 2014, in
which event the document will
have to be proved in the normal way”.
The Plaintiff’s Counsel argued that the Defendant had to lead
the evidence by
the author of the document as well as the evidence of
the Defendant who gave the instruction to its attorney to withdraw
the offer
of gratuity.
[101] During
cross-examination the Defendant's Counsel questioned the Plaintiff
regarding the e-mail dated 19 October 2012 containing
the withdrawal
of the offer of gratuity. Plaintiff’s Counsel objected to the
line of questioning on the basis that the withdrawal
of the offer of
gratuity had not been pleaded. However, he submitted, that he
assumed that the question by Defendant's Counsel
had other relevance,
and on that basis he did not object. I quote the relevant questions
by Defendant’s Counsel and the Plaintiff’s
responses
thereto:
"Up to the time
of this...email [21 May 2013] there is not a single document from
either you or your attorney ...to the Defendant
and say, we accept
the offer of R 400 000.00? --- No
In fact, even this
email is not an acceptance it is a letter of demand, not so? ---
Yes..."
Later under cross
examination:
[102] The Defendant
read out the contents of the email containing the withdrawal of the
offer of gratuity to the Plaintiff during
the proceedings. "You
never actually came back to the Defendant and said I accept this
offer? --- No
In the time you did
not accept the offer, you sued them twice? --- Yes...”
And you received an
email saying, the offer has been sullied by your behaviour, not so?
--- I received the email..."
[103] The Plaintiff
acknowledged that he had received this e-mail and that the offer of
gratuity was rejected by the Defendant in
the e-mail dated 19 October
2012. The Defendant’s Counsel argued that it was the Plaintiff
who discovered and produced the
document and therefore the Plaintiff
obviously received it.
[104] The e-mail was
clearly written by the Defendant’s erstwhile attorney. It is
trite that a letter emanating from an attorney
has been written on
the instructions of the client. The intention of the Defendant to
withdraw the offer of gratuity is expressed
in the said e-mail. It
is clearly not a forgery as it relates to the subject matter in
question and was produced by the Plaintiff.
Accordingly I find no
merit in the Plaintiff’s Counsel’s argument.
[105] In the event I
am wrong, the second issue I will determine is whether the Plaintiff
tacitly rejected the Defendant’s
offer of gratuity.
[106] The wording
contained in the gratuity letter are of primary importance and are
sufficiently clear that a conclusion can be
reached from the
"linguistic treatment" alone (see: Blaikie- Johnstone v
Holliman
1971 4 SA 108
(D)). It is clear from the wording of the
offer of gratuity that it was made as the Plaintiff’s contract
of employment had
been terminated by the effluxion of time and the
Defendant extended the gratuity as a gesture of goodwill in thanks
for the meaningful
contribution the Plaintiff made whilst he was in
the employment of the Defendant. The contents of the letter are
explicit, the
Plaintiff’s contract of employment was terminated
through the effluxion of time on 30 September 2012.
[107] On the same
day, 12 October 2012, that the Plaintiff received the offer of
gratuity as his contract of employment had expired,
the Plaintiff
sent the e-mail quoted above to Mr Moraba that he would be briefing
legal Counsel and that all communications between
the parties would
be through legal Counsel. It is clear therefrom that the Plaintiff
did not accept the termination of his contract
of employment. The
Plaintiff duly instructed attorneys to act on his behalf. Four days
after the offer of gratuity was made, the
Plaintiff's erstwhile
attorneys sent the letter dated 16 October 2012 to Mr Moraba
disputing the legality of his parting. Soon
thereafter the Plaintiff
instituted the two actions against the Defendant in the damages claim
and in the incentive claim. The
Plaintiff in his testimony stated
that that there was no agreement between the parties to terminate his
contract of employment
and he did not accept the offer of gratuity as
he was for all intents and purposes still in the employ of the
Defendant. In Reid
Bros (SA) Ltd v Fischer Bearings Co Ltd
1943 AD
232
Watermeyer ACJ said: "...Generally, it can be stated that
what is required in order to create a binding contract is that
acceptance
of an offer should be made manifest by some unequivocal
act from which the inference of acceptance can be logically drawn”.
(see further Be Pop a Lula Manufacturing & Printing CC v Kingtex
Marketing (Pty) Ltd
2003 SA 327
SCA[10]; Hubbard v Mostert 2010 SA
(WCC) [10]. In my view it cannot be inferred by the conduct of the
Plaintiff that there was
any such unequivocal act from which an
inference of acceptance can be drawn. To the contrary the Plaintiff’s
conduct was
tantamount to a tacit rejection of the offer of gratuity.
[108] I add that
even the letter on the 21 May 2013, seven months after the gratuity
was made by the Plaintiff’s erstwhile
attorney to the
Defendant’s erstwhile attorneys was formulated as a letter of
demand which is also against an intention to
accept the offer of
gratuity.
[109] Accordingly I
dismiss the gratuity claim.
Costs
[110] It is in the
discretion of the court as to whether the costs for the employment of
two Counsel is warranted. The question
is whether it was reasonable
for the Defendant to employ two Counsel. It is a matter of judicial
discretion to be exercised, with
regard to the amount involved, the
complexity of the matter, the nature of the issues in dispute and the
length of the hearing
and the argument in the three actions. I am of
the view that the complexity of this matter involving the numerous
contracts, the
calculations of the incentive bonuses and the amount
of the quantum in respect of the three actions warrant the
appointment of
two Counsel. The damages claim was previously set down
for trial as a separate action on 26 March 2014. This was before the
three
claims were consolidated. At the time, both the Defendant's
senior and junior Counsel was on brief for the trial. The trial on 26
March 2014 was postponed at the Plaintiff's request. The Plaintiff
tendered the costs occasioned by the postponement including
the costs
of one Counsel. The costs of the second Counsel were reserved for
decision by the trial court. I am of the view for the
reasons
aforementioned that the employment of two Counsel was reasonable and
necessary and, I accordingly award the costs of second
Counsel in
respect of the first action which was postponed on the 26 March 2014.
[111] I accordingly
make the following order:
The three actions
(under case numbers 2012/47015; 2013/06184; 2013/30024) constituting
the consolidated action are dismissed with
costs including the costs
of two Counsel, such costs to include the costs of the second Counsel
for the postponement of the trial
on 26 March 2014 in respect of the
first action under case number 2012/47015.
G DAMALIS
ACTING JUDGE OF
THE HIGH COURT
COUNSEL FOR THE
PLAINTIFF R BEATON SC
ATTORNEYS FOR THE
PLAINTIFF VAN ZYL LE ROUX INC.
COUNSEL FOR THE
DEFENDANT A KEMACK SC
ADV S KHUMALO
ATTORNEYS FOR THE
DEFENDANT EDWARD NATHAN SONNENBERGS
DATES OF HEARING
26-30 MAY 2014; 5 SEPTEMBER 2014;
12 SEPTEMBER 2014
DATE OF
JUDGMENT 21 NOVEMBER 2014