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[2015] ZAGPJHC 11
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First Rand Bank Limited v Jooste (2012/27752) [2015] ZAGPJHC 11 (3 February 2015)
REPUBLIC OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION
JOHANNESBURG
CASE NO. 2012/27752
DATE: 03 FEBRUARY 2015
In the matter between:
FIRST RAND BANK
LIMITED
.............................................................................................
Applicant
And
LUKE
JOOSTE
.......................................................................................................................
Defendant
JUDGMENT
REDMAN AJ:
[1] The plaintiff claims payment of an
amount of R6 935 408 arising out of the defendant's alleged breach of
a contract of employment
concluded with the plaintiff on 28 June
2001.
[2] On 13 September 2013 the defendant
delivered an exception to the particulars of claim. In the
exception, the defendant raised
a number of complaints and concluded
that the particulars of claim do not disclose a cause of action; the
particulars of claim
do not comply with rule 18(6) of the Uniform
Rules of Court; and the particulars of claim are vague and
embarrassing. In the
exception the defendant did not identify which
specific ground of complaint was relied upon for each of the
conclusions drawn.
[3] At the hearing of the exception, Mr
Christophorou, on behalf of the defendant indicated that the
defendant did not persist with
the complaints raised in paragraphs
1.1 and 1.3 of the exception. Each of the conclusions drawn by the
defendant (which appear
to constitute the grounds for exception) are
dealt with below.
NO CAUSE OF ACTION
[4] In none of the complaints raised by
the defendant nor during the course of argument did the defendant
identify the basis for
its conclusion that the particulars of claim
did not disclose a cause of action. The primary thrust of the
defendant's argument
was directed at the contention that the
particulars of claim were vague and embarrassing and that the
averments contained in the
particulars of claim did not correspond
with the terms contained in the written documentation attached
thereto.
[5] Having abandoned the ground for
complaint set out in paragraph 1.3 of the particulars of claim, there
is no basis upon which
I can find that the particulars of claim does
not disclose a cause of action. The allegations contained in
particulars of claim,
if proved, are sufficient to sustain an action
for damages against the defendant.
COMPLIANCE WITH UNIFORM RULE 18(6)
[6] At paragraph 3 of the plaintiff's
particulars of claim it pleads as follows:
"3. On or about 26 June 2001 and
at Johannesburg, the plaintiff and defendant entered into a written
contract of employment
("the employment agreement"). A
copy of the employment agreement (without annexures) is attached
marked "FNB1".
FNB1 comprises -
3.1. The defendant's employment
contract with the plaintiff dated 28 June 2001;
3.2 Articles of agreement dated 28 June
2001;
3.3 Staff defalcation letter;
3.4 Confirmation of receipt of Code of
Ethics dated 1 August 2001;
3.5 Code of Ethics dated 31 July 2006;
3.6 Corruption Act 94 of 1992."
The defendant complains that the
plaintiff has failed to plead who represented the plaintiff in
entering into the employment agreement
with the defendant as required
by Uniform Rule 18.
[7] Rule 18(6) provides that a party
who relies upon a contract is required to state whether the contract
is written or oral and
when, where and by whom it was concluded. The
test to be applied at exception stage is not whether the pleadings
are compliant
with the provisions of the Uniform Rules of Court, but
rather whether the pleadings are vague and embarrassing or lack
averments
which are necessary to sustain an action or defence. The
mere fact that a pleading does not comply with Rule 18 does not in
itself
render that pleading excipiable. As stated by Fleming DJP in
Absa Bank Ltd v Boksburg Transitional Local Council (Government of
the Republic of South Africa, third party)
1997 (2) SA 415
(W) at
418:
"If a pleading is vague and
embarrassing it is excipiable because of that quality. In that event
it is fortuitous if in the
process of creating a vague statement of
claim Court Rules were disobeyed. If there is vagueness which
justifies an exception,
the exception is sound whether or not the
Court rule was breached. If, on the other hand, such vagueness is
lacking, the exception
should fail even when the party is entitled to
attack the pleading as an irregular proceeding because of
non-compliance with the
Court Rules. That is a distinct complaint
requiring different adjudication."
[8] The plaintiff's non-compliance with
Rule 18 is not a relevant consideration in the determination as to
whether the particulars
of claim are excipiable.
[9] Ex facie the particulars of claim,
the plaintiff has failed to comply with the provisions of rule 18(6)
in that it has failed
to plead who represented the plaintiff when the
agreement was concluded. This deficiency, however, does not render
the particulars
of claim excipiable.
VAGUE AND EMBARRASSING
[10] The benchmark principles on which
exceptions must be decided were recently restated by the Court in
Gallagher Group Ltd and
Another v Iotech Manufacturing (Pty) Limited
and Others
2014 (2) SA 157
(GNP) at 161D-F, as follows:
"The principles relevant to the
determination of an exception
[19] It is trite that the function of
an exception is to dispose of the case, in whole or in part and that
this avoids the unnecessary
leading of evidence (see Barclays
National Bank Ltd v Thompson
1989 (1) SA 547
(A) at 553F–I). An
exception must therefore be determined on the pleadings as they
stand, assuming the facts stated therein
to be true; and no facts
outside those stated in the pleading can be brought into issue and no
reference may be made to any other
document.
[20] Finally in order to succeed an
excipient has the duty to persuade the court that upon every
interpretation which the pleading
in question, and in particular the
document upon which it is based, can reasonably bear, no cause of
action or defence is disclosed:
failing this the exception ought not
to be upheld (see Theunissen en Andere v Transvaalse Lewendehawe Koöp
Bpk
1988 (2) SA 493
(A) at 500E–F; and see also Erasmus
Superior Court Practice at B1–151)."
[11] The passage in Theunissen v
Transvaalse Lewendehawe Koöp Bpk
1988 (2) SA 493
(A) at 500E-F
relied upon in the Gallagher decision reads as follows:
“In soverre daar enige twyfel
hieromtrent kan bestaan, moet daar in gedagte gehou word dat die plig
op die appellante as eksipiënte
rus om ons te oortuig dat elke
vertolking wat 'n Hof redelikerwyse aan die besonderhede van
vordering kan heg, vatbaar is vir
eksepsie. Sien Callender-Easby and
Another v Grahamstown Municipality and Others
1981 (2) SA 810
(OK) op
813A; Amalgamated Footwear & Leather Industries v Jordan and Co
Ltd
1948 (2) SA 891
(K) op 893 en Kotsopoulos v Bilardi 1970 (2) SA
391 (K) op 395C – E”.
[12] In Jowell v Bramwell Jones
1998
(1) SA 836
(W) at 898 the Court set out the general principles
applicable in determining whether a pleading is vague and
embarrassing and
therefore excipiable. The Court emphasised that an
exception will not be upheld where it is directed at a particular
paragraph
within a cause of action. The vagueness and embarrassment
must go to the whole cause of action. At 902-3, Heher J stated the
following:
"Furthermore, in approaching these
exceptions, I shall bear in mind the following general principles:
(a) minor blemishes are irrelevant;
(b) pleadings must be read as a whole;
no paragraph can be read in isolation;
(c) a distinction must be drawn between
the facta probanda, or primary factual allegations which every
plaintiff must make, and
the facta probantia, which are the secondary
allegations upon which the plaintiff will rely in support of his
primary factual allegations.
Generally speaking, the latter are
matters for particulars for trial and even then are limited. For the
rest, they are matters
for evidence;
(d) only facts need be pleaded;
conclusions of law need not be pleaded;
(e) bound up with the last-mentioned
consideration is that certain allegations expressly made may carry
with them implied allegations
and the pleading must be so read: cf
Coronation Brick (Pty) Ltd v Strachan Construction Co (Pty) Ltd
1982
(4) SA 371
(D) at 377, 379B, 379G--H. Thus, an allegation of
negligent conduct, especially where the negligence is particularised,
implies
that a reasonable person would not have so acted or would
have acted otherwise. So, in a case involving a motor vehicle
collision,
it is sufficient to plead that the defendant acted
negligently in particular respects. This implied that a reasonable
person would
not have so acted. If damage is alleged to flow
therefrom, this implies in turn that there was a breach of a legal
duty not to
act so."
[13] As indicated in Absa Bank v
Boksburg TLC supra at 422C-D, a pleading will not be excipiable where
the party knows adequately
what the plaintiff's case is and its
attorneys are able to take instructions and record a meaningful
response to such pleading.
Our Courts have consistently emphasised
that one should be circumspect when attempting to decide questions
concerning the interpretation
of contracts on exception. The
defendant bears the onus of persuading the Court that on every
interpretation no cause of action
has been revealed. See Francis v
Sharp
2004 (3) SA 230
(C) at 237D-I.
[14] In Natal Joint Municipal Pension
Fund v Endumeni Municipality 2012(4) SA 593 (SCA), at para [18], the
Supreme Court of Appeal
summarized the current approach to the
interpretation of documents as follows:
"The present state of the law can
be expressed as follows: Interpretation is the process of attributing
meaning to the words
used in a document, be it legislation, some
other statutory instrument, or contract, having regard to the context
provided by reading
the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon
its coming
into existence. Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary
rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material
known to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in
the
light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that leads
to insensible or unbusinesslike results or undermines the apparent
purpose of the document. Judges must be alert to, and guard against,
the temptation to substitute what they regard as reasonable, sensible
or businesslike for the words actually used. To do so in
regard to a
statute or statutory instrument is to cross the divide between
interpretation and legislation; in a contractual context
it is to
make a contract for the parties other than the one they in fact made.
The 'inevitable point of departure is the language
of the provision
itself', read in context and having regard to the purpose of the
provision and the background to the preparation
and production of the
document."
[15] In interpreting a document,
reference may be had to evidence which may include the circumstances
in which the document came
into existence. See Bothma-Batho Transport
v S Bothma en Seun Transport
2014 (2) SA 494
(SCA) at [12]. In the
light of the aforesaid, it would be inappropriate to attempt to
embark on an interpretation of an agreement
at the exception stage,
save in exceptional circumstances and only where it is clear that
there is no room for the interpretation
relied upon by the plaintiff.
[16] In the instant matter, the
plaintiff's case is based on an agreement of employment. The
defendant would be in a position to
plead to allegations relating to
his employment and would be in a position to address the allegations
contained in the particulars
of claim. In order to succeed on
exception, the defendant must demonstrate not only that the
particulars of claim are vague and
embarrassing but also that he will
be prejudiced if he is required to plead thereto. See Venter v
Wolfberg Arch Investments 2
(Pty) Ltd
2008 (4) SA 639
(C) at 645D.
[17] I deal with each of the complaints
raised by the defendant hereunder.
[18] Ad 1.2 - The defendant complains
that the plaintiff has failed to allege who represented the plaintiff
in entering into the
employment agreement with the defendant.
[19] As indicated above, the failure to
plead the name of the representative constitutes a breach of rule
18(6) of the Uniform Rules.
I am not, however, satisfied that it
renders the particulars of claim vague and embarrassing. The
plaintiff relies on written
documentation and has attached copies of
such documents to the pleadings. The defendant can identify whether
he appended his signature
to the written agreement and is in a
position to plead whether the terms and conditions relied upon by the
plaintiff constituted
terms of his employment. Annexure FNB1 to the
particulars of claim is purportedly signed on behalf of E Grondel,
the Chief Executive
Officer of the plaintiff. The defendant can
identify the representative of the plaintiff by mere reference to the
document and
is in a position to plead thereto.
[20] Ad 1.4 - The defendant complains
that the Articles of Agreement annexed as part of annexure "FNB1"
was entered into
between the defendant and First National Bank of
South Africa Limited and not the plaintiff. Annexure FNB1 to the
particulars
of claim records an agreement between the parties.
Annexure FNB1 specifically records that the Articles of Agreement
form part
of the defendant's agreement of employment with the Bank.
Ex facie the particulars of claim, it appears that the terms
contained
in the Articles of Agreement are incorporated by reference
into the employment contract. The plaintiff alleges that the
Articles
of Agreement referred to in the employment contract is the
document attached to the particulars of claim. The defendant has thus
been apprised of the plaintiff's case and is in a position to plead
thereto. The discrepancy in the name of the "Bank"
can be
resolved through the exchange of further particulars, discovery
and/or evidence. The defendant will not be embarrassed
if it is
required to plead thereto.
[21] Ad 2.1 - The plaintiff pleads in
paragraph 4 of its particulars of claim as follows:
"(4) The material, express
alternatively implied further alternatively, tacit terms of the
employment agreement included:
4.1 The defendant would take all
reasonable steps to safeguard the assets of the plaintiff;
4.2 The defendant, as a senior bank
official entrusted with authority to grant credit and approve lending
agreements on behalf of
the plaintiff, would discharge fiduciary
obligations to protect the interests of the plaintiff, particularly
when conducting or
considering lending agreements.
4.3 The defendant would act with due
care and skill and without negligence.
4.4 The defendant would act bona fide,
without conflict of interest, and avoid authorising loan approvals or
payments to third parties
with whom he had a personal relationship.
4.5 The defendant would act only within
the course and scope of his appointment and the authority given to
him by the plaintiff,
which authority was limited in the following
relevant material respects:
4.5.1 the defendant would apply the
plaintiff's Credit Policy in force at the time;
4.5.2 the defendant would not approve
or authorise loans in excess of the value of the property to which
the loan related;
4.5.3 the defendant would not permit
payment of monies to a borrower until the loan had been secured by
the registration of a mortgage
bond against the property;
4.5.4 the defendant would not approve
loans for use other than on the said property;
4.5.5 the defendant would check the
status of the loan applicant and would not loan money to individuals
who had been sequestrated
or presented a similar credit risk to the
plaintiff;
4.5.6 the defendant would not approve a
loan or make payments under any loan unless or until an approved
valuation had been conducted
in respect of the property."
[22] The defendant contends that -
"Annexure FNB1 does not bear with
the allegations that these were the terms of the defendant's
employment and, in addition,
no indication is given as to the basis
upon which the said pleaded terms may be implied from FNB1 or may be
described as tacit
terms."
[23] Insofar as the plaintiff intends
to rely on terms of the contract implied by law, it is not necessary
for it to have pleaded
facts which gave rise to those terms. See
Sishen Hotel (Edms) Bpk v SA Yster en Staal Industriële
Korporasie Bpk
1987 (2) SA 932
at 948-949.
[24] The determination as to whether
the terms relied upon by the plaintiff constitute tacit,
alternatively express terms of the
agreement would by necessity
entail an interpretation of the agreement.
[25] In argument the plaintiff relied
on the following specific provisions of the documents to support its
contention that the terms
relied upon formed part of the agreement
concluded between the parties:
25.1. The Articles of Agreement
contains the following provisions:
"2. The Employee agrees to enter
the employment of the Bank and to serve at such place and in such
capacity and perform such
duties as the Bank may from time to time
require.
3.1 The Employee undertakes to make
himself familiar with the contents of the Bank's Staff Manual as
amended from time to time,
and acknowledges that those terms and
conditions contained therein, which are applicable to the category of
employment into which
he falls, shall apply to his employment and, in
particular, but without derogating from the generality of the
aforegoing, acknowledges
that the paragraphs covering hours of work,
salaries, wages and allowances, leave of absence and retirement apply
to his employment
with the Bank.
3.2 The Employee undertakes to comply
with all the rules, regulations and procedures of the Bank, however
presented or conveyed
or whereinsoever contained, as are applicable
to him or to his duties in the Bank.
3.5 The Employee acknowledges that the
due and proper observance of the aforementioned undertakings is
fundamental to his relationship
with the Bank and that his duties
will be carried out subject to the exercise of the utmost good
faith."
25.2. Clause 18 of the Articles of
Agreement envisages that the plaintiff would be entitled to hold the
defendant personally responsible
for any damages or losses incurred
by the plaintiff as a result of the defendant intentionally
disregarding or negligently or intentionally
exceeding his authority
as a result of which the Bank suffers damages or loss.
25.3. The Code of Ethics, attached to
the plaintiff's particulars of claim specifically prohibits a
conflict of interest and provides
as follows:
"A conflict of interest exists
when employees in association with immediate family members have
direct or indirect personal
interest in, or derive benefits from,
transactions to which the Group is also a party. Such situations
must be avoided and prevented
at all times, in the interest of honest
and bona fide business practices.
Employees are expected to perform their
duties conscientiously, honestly and in accordance with the best
interests of the Group.
Employees will therefore, not carry on
business on their own account or have other conflicting interests,
without full disclosure
to the Group.
If employees are of the opinion that
the conduct, behaviour or activity in which they are involved may
constitute a conflict of
interest with the Group, it should
immediately be brought to the attention of the employee's immediate
senior."
[26] In argument I was referred to
Phillips v Fieldstone Africa (Pty) Limited and Another
2004 (3) SA
465
(SCA) at para [27] in support of the plaintiff's contention that
a fiduciary relationship existed between the parties. As indicated
in Phillips supra, the existence and nature and extent of a fiduciary
duty are questions to be determined upon a consideration
of all the
relevant facts and circumstances.
[27] At this juncture, and in the
absence of oral testimony, I am not in a position to determine the
nature and extent of the fiduciary
relationship between the parties
and I am not persuaded that the terms alleged in paragraph 4 of the
particulars of claim do not
constitute tacit, alternatively implied,
further alternatively, express terms of the agreement concluded
between the parties.
The terms of the agreement are sufficiently and
unambiguously pleaded and I am satisfied that the defendant is in a
position to
plead thereto.
[28] Ad 3 - In paragraph 4.5.1 of the
particulars of claim, the plaintiff alleges that the defendant would
apply the plaintiff's
credit policy in force at the time. In
paragraph 5A the plaintiff avers that annexure FNB 2 constituted the
credit policy applicable
during the relevant period. The defendant's
complaint that the plaintiff has failed to plead the basis upon which
the defendant
would be bound by the credit policy, is accordingly
devoid of substance.
[29] Ad 4.1, 6.1 and 7 - In each of
these complaints the defendant contends that the terms allegedly
breached by the defendant
"are not expressly contained in FNB1".
The plaintiff in its particulars of claim, however, does not rely
exclusively
on the express terms contained in annexure FNB1. The
plaintiff also relies on implied and tacit terms and on the
provisions of
the Articles of Agreement, Staff Defalcation letter,
confirmation of receipt of Code of Ethics, Code of Ethics and the
Corruption
Act. The additional documentation is incorporated into
the contract of employment (annexure FNB1) by reference.
[30] The terms which the plaintiff
alleges the defendant has breached are the self-same terms which the
plaintiff has pleaded earlier
in its particulars of claim. If it is
thus established by the plaintiff that the terms upon which it relies
are express, implied
or tacit terms of the agreement, it would be
axiomatic that an allegation that the defendant breached that
self-same terms would
be neither vague nor embarrassing.
[31] I am not persuaded that on a
proper interpretation of the agreement the plaintiff will not
establish that the terms alleged
by it constituted terms of the
employment agreement and accordingly a breach of such terms would
constitute a breach of that agreement.
[32] Ad 5 - The defendant complains
that the details of the alleged breaches of the agreement are lacking
in particularity.
[33] I am satisfied that the
particulars of claim contain sufficient facta probanda to enable the
defendant to plead thereto and
the particularity sought by the
defendant can be obtained by means of request for further particulars
for trial. The omission
of the particulars sought by the defendant
neither render the pleadings vague nor embarrassing.
[34] Ad 8 - the defendant complains
that the plaintiff does not plead whether the damages allegedly
suffered flow naturally from
the alleged agreement or whether such
damages were within the contemplation of the parties when the
agreement was concluded. In
circumstances where a plaintiff claims
special damages, it is required to plead that special circumstances
existed at the time
of the conclusion of the agreement and that the
damages now claimed were within the contemplation of the parties.
See Holmdene
Brickworks (Pty) Ltd v Roberts Construction Co. Ltd
1977
(3) SA 670
(A) at 687.
[35] Without pleading that special
circumstances existed and that the damages claimed were within the
contemplation of the parties,
the plaintiff will not be entitled to
recover special damages. In the absence of such allegations, one can
conclude that it is
the plaintiff's case that the damages it now
seeks to recover are general damages which flow naturally from the
kind of breach
in question.
[36] The defendant is in a position to
plead to the damages and I am of the view that there is no merit in
this complaint.
[37] Ad 9.1 - the defendant contends
that the plaintiff has failed to "… allege how its claim
is calculated and in
particular the interest charges and/or accrued,
the rate of interest charged and/or accrued." The defendant,
however, overlooks
the allegations contained in paragraphs 9 and 10
of the plaintiff's particulars of claim which read as follows:
"9. In total, the amount paid by
the plaintiff to Levinson (or his nominee) as a result of the
defendant's breaches is R6 972
821,00 which amounts would not have
been paid out if the defendant had not breached his employment
agreement.
10. The defendant has been able to
recover only the following amounts:
10.1 from the sale of the Parkhurst
property in 2010 - R1 100;
10.2 from the sale of erf 176 Ferndale
in 2010 - R500 000;
10.3 from the sale of erf 174 Ferndale
in 2011 - R540 000."
[38] It is self-evident that the
plaintiff seeks to recover its actual out of pocket loss being the
amount it alleges it paid to
Levinson, less the amount which it has
recovered. I am satisfied that sufficient particularity has been
provided to the defendant
to enable it to plead to these allegations.
CONCLUSION
[39] In all the circumstances, the
exception is dismissed with costs.
Redman AJ
Acting Judge of the High Court
Heard: 25 August 2014
Judgment delivered: 03 February
2015
Appearances:
For Plaintiff: Adv Duncan Turner
Adv Nzwisisai Dandazi
Attorneys Read Hope Phillips Thomas
& Cadman Inc.
For Defendant:
Attorneys: Biccari Bollo Mariano
Inc.