About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2015
>>
[2015] ZAGPJHC 121
|
|
Liberty Group Limited v Botes and Others (40775/11) [2015] ZAGPJHC 121 (27 March 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CONSOLIDATED CASE
NUMBER: 40775/11
DATE: 27 MARCH 2015
In the matter between:
LIBERTY GROUP
LIMITED
............................................................................................
PLAINTIFF
And
E.B. BOTES
F. VILJOEN
T. TAGGART
L. BERGH
L.
KOOPMAN
.................................................................................................................
DEFENDANTS
JUDGMENT
WINDELL J:
Introduction
[1] This judgment relates to five
separate, but inter-related actions, in which judgment is sought
against the defendants. The plaintiff
is Liberty Group Limited,
trading as Liberty Life, a company which conducts business as life
insurers. The defendants are all experienced
insurance agents. During
September 2009 to December 2009, the defendants were headhunted to
join the Liberty Group. They all joined
Liberty and were each paid a
lump sum for the loss of their second year income at their previous
company.
[2] A couple of months after the
defendants joined Liberty, they terminated their employment contracts
with Liberty as they felt
that Liberty did not fulfill its promises.
The plaintiff now claims the return of the lump sums for the loss of
their second year
income and commissions earned during their
employment with Liberty. The plaintiff’s claim is based on an
agency agreement.
(”the agency agreement”)
[3] Defendants denied that they
concluded the agency agreement and pleaded that they entered into a
completely different agreement
(“the Schedule”). The
defendants alleged that the Schedule was the only true agreement
between the parties. The defendants
also instituted counterclaims
against Liberty for losses suffered as a result of Liberty’s
failure to make good on their
promises.
[4] It is common cause that the central
issue between the parties is the following: Is the agency agreement
as alleged by plaintiff
the contract between the parties or is the
Schedule as alleged by the defendants the contract between the
parties?
Background
[5] In the particulars of claim the
plaintiff alleged that the defendants concluded the agency agreement
(that included an addendum)
with Liberty, when they joined the
company. The material terms of the agency agreement are the
following:
1. The defendants were appointed as
agents.
2. The defendants’ remuneration
is commission based.
3. Any commission paid in advance shall
be repayable on termination of the agency agreement.
4. If any of the premiums paid in
respect of a contract are returned to the policy holder for any
reason whatsoever, or is a premium
on a contract remains unpaid for
60 days and the contract has lapsed, the defendants shall return the
commission in respect of
such contract.
5. Liberty and the defendants may
terminate the agreement at any time for any reason.
6. The agreement is the entire
agreement between the parties and may only be amended or modified in
writing signed by both parties.
7. The agency agreement cancels and
replaces all prior agency agreements or any such like agreements and
supplementary agreements,
if any.
[6] The defendants were all experienced
insurance agents that left their previous employer to join Liberty.
Liberty averred that
the addendum to the agency agreement was
therefore specifically drawn up to make provision for the lump sum
payable to the defendants.
Liberty alleged that the defendants agreed
to the following additional terms in the addendum:
1. The addendum supplements the terms
and conditions set out in the agency agreement.
2. Liberty shall pay the defendants a
retention fee subject to the following terms and conditions:
a) 50% of the retention fee shall be
paid within 10 days of the opening of an accounting code.
b) The remaining 50% will be paid on
the first, second and third anniversary of the date of signature of
this addendum.
c) The amounts are subject to tax.
d) In the event of the main agreement
or addendum beieng terminated, then all amounts paid to the
defendants under this addendum
and the main agreement shall
immediately become due and payable in full.
e) It is expressly recorded that the
defendants are paid the retention fee for the loss of second year and
annuity income from other
sources.
[7] In their plea the defendants denied
all the averments in the summons. In addition, defendants pleaded a
totally different agreement
(the Schedule) which it alleged was
concluded between them and Liberty, who at the time was represented
by Ms. Fendick. They pleaded
that it was agreed that the defendants
would terminate their employment with the previous employer and take
up employment with
Liberty. It was further agreed that Liberty will
pay a lump sum together with an annual payment for a three year
period, an annual
income, a secretarial allowance , an own office
consultant allowance and a pension fund contribution calculated on
the annual income.
The defendants alleged that Liberty failed to
perform and meet its obligations in terms of this agreement and the
defendants therefore
terminated the employment relationship.
Locus standi and cession.
[8] The plaintiff sues as cessionary in
respect of cessions concluded between the plaintiff and Liberty
Active Limited, Capital
Alliance Limited and Rentmeester Assurance
Limited as cedents. The defendants admitted that the plaintiff trades
by the name of
Liberty Life Group but disputed that it conducts the
business of a Life Insurer and that it is duly registered with the
provisions
of the
Long Term Insurance Act 52 of 1998
. The defendants
also disputes that Liberty Active Limited, Capital Alliance Life
Limited and Rentmeester Assurance Limited ceded
their respective
claims against the defendants to the plaintiff.
[9] Plaintiff provided copies of the
Certificate issued by the Registrar of Companies confirming the
plaintiff’s name as Liberty
Group, its registration number and
the date of registration. CIPRO certificates were also provided for
Rentmeester Assurance, Capital
Alliance Life and Liberty Active.
Plaintiff also provided the cession agreements.
[10] The evidence relating to the CIPRO
certificates and cession were not disputed during cross examination
and no evidence was
given by defendants to counter the evidence of
the plaintiff. The parties agreed at the outset that all documents
were what it
purported to be without admitting the contents thereof.
I am satisfied that the plaintiff has the necessary locus standi and
that
the claims from Liberty Active limited, Capital Alliance Life
Limited and Rentmeester Assurance Limited were ceded to the
plaintiff.
Evidence
[11] Mr. Oosthuizen, the manager at the
Talent Acquisition Centre at Liberty, was the sole witness in the
case. He testified that
Ms. Fendick was instructed to “headhunt”
experienced financial advisors. The five defendants were recruited by
Ms.
Fendick. Information was gathered on each of the defendants and
in order to persuade the defendants to join Liberty, a document
(the
Schedule) was prepared for each defendant setting out figures that
included a lump sum offered to the defendants based on
previous
performance. Ms. Fendick was authorized to explain the offer
contained in the Schedule to the defendants. The Schedule
made
provision for an upfront payment, a further annual payment every year
for 3 years, a secretarial allowance, an own office
allowance and
pension fund contribution. It also provided for target PCR’s
(production credits). It also indicated a possible
income if the
targets were met. Targets would be met by selling new products or
enhancing existing products. It specifically stated
that the figures
were illustrative and that the contract will reflect the final
numbers. Ms. Fendick did not have the authority
to enter into any
contract with the defendants or to amend Liberty’s standard
agency agreement. The Schedule was merely for
illustrative purposes
and did not constitute an agreement.
[12] Mr. Oosthuizen testified that
after the offers contained in the Schedules were accepted, the
defendants entered into the standard
agency agreement and the
addendum that was specially designed for the experienced agents. It
was only after the agency agreements
were signed that Liberty was
able to register the agents on Liberty’s FSB register and open
their commission code. Liberty
also had to remove the defendants from
their previous employer’s FSB register. Only then did Liberty
pay the defendants
the lump sums contained in the addendum to the
agency agreement.
[13] The defendants were also paid a
secretarial allowance and an office allowance retrospectively. This
was paid after the defendants
complained that it was promised to them
when they joined Liberty. The allowances were calculated by taking
into consideration a
factor of their actual sales during a month. The
addendum to the agency agreement did not contain the allowances as
reflected in
the Schedule, as these benefits were standard to all
Liberty consultants and the addendum only provided for the extra
remuneration
the defendants would receive.
Legal principles
[14] Before dealing with the legal
principles and the evidence, I want to say a word or two about the
pleadings. It is clear that
the defendant's plea in this case was not
a confession and avoidance - a confession that they had signed the
contract but was not
bound by its terms. The defendant's plea was a
bare denial of the agency agreement. The plaintiff sought further
particulars to
prepare for trial but was not given any particulars.
[15] It is trite that a person alleging
a contract must prove the terms of the agreement which he seeks to
enforce. The defendants
did not plead an additional term to an
existing contract but a totally different contract from the one the
plaintiff relied upon.
The onus of proving the agency agreement
therefore rested on the plaintiff and the onus of proving the
Schedule rested on the defendants.
The plaintiff called one witness,
Mr. Oosthuizen to prove the agency agreement and the defendants
closed their case without calling
any witnesses.
[16] The defendants did not produce any
evidence to proof that the Schedule was the contract between the
parties. The statements
made during cross examination are not
evidence. Mr. Oosthuizen specifically testified that Ms Fendick did
not have the authority
or mandate to conclude a contract with the
defendants. Her mandate was limited to the recruitment of experienced
financial advisors.
She recruited the defendants and was authorized
to explain the offer to them, which was contained in the Schedule. He
testified
that the Schedule was not the contract between the parties
and was only for illustrative basis. The Schedule specifically states
that the contract will reflect the final numbers.
[17] The defendants stated during cross
examination that it was an implied term and/or a tacit term of the
agreement concluded with
Fendick, that the lump sum for the loss of
second year commission would not be paid back in the event of
termination of the agreement.
This was never pleaded and there is no
evidence to substantiate this allegation. I am satisfied that the
defendants did not prove
that the Schedule was the agreement between
the parties. There is also no evidence in support of the counterclaim
and the counterclaims
are dismissed.
[18] The question is if the evidence of
Mr. Oosthuizen proved the existence of the agency agreement, or to
put it differently; if
his evidence constitutes prima facie evidence
as to the existence of the agency agreement.
[19] Mr. Oosthuizen testified that he
was not present when the contracts were signed but is aware of the
fact that the all the defendants
concluded agency agreements with
Liberty. If they did not conclude the agency agreement they would not
be on Liberty’s FSB
register and would not have been paid the
lump sums or commissions. After perusing the agency agreements, Mr.
Oosthuizen testified
that it appeared from the contents that Ms.
Odendaal signed on behalf of the plaintiff. He also testified that he
cannot confirm
the defendants’ signatures but that it appears
as if the five defendants signed the agency agreement and the
addendum.
[20] Prima facie evidence as pointed
out by Stratford JA in Ex parte Minister Of Justice: In re R v
Jacobson and Levy
1931 AD 466
at 478 is :
"Prima facie evidence, in its more
usual sense, is used to mean prima facie proof of an issue the burden
of proving which is
upon the party giving that evidence."
[21] If the prima facie evidence or
proof remains unrebutted at the close of the case, it becomes
"sufficient proof" of
the fact or facts (on the issues with
which it is concerned) necessarily to be established by the party
bearing the onus of proof.
In R v Mantle
1959 (1) SA 771
(C) , Bloch
J, in considering the meaning of the words 'prima facie evidence',
stated the following:
"Prima facie evidence" in its
customary sense is not merely "some evidence". It must be
of such a character
that if unanswered it would justify men of
ordinary reason and fairness in affirming the question which the
party upon whom the
onus lies is bound to maintain'."
[22] In Senekal v Trust Bank of South
Africa Ltd
1978 (3) SA 375
(A) it was held that the inquiry is
whether at the end of the case the prima facie evidence afforded had
been so disturbed, as
to prevent it becoming sufficient proof. Miller
JA stated at page 383 B-C that a court is entitled , when considering
that question,
to take into account that the defendant closed his
case without having led any evidence whatsoever.
[23] In Union Government (Minister of
Railways) v Sykes
1913 AD 156
at 176, it was held that less evidence
will suffice to establish a prima facie case where the matter is
peculiarly within the knowledge
of the opposite party than would
otherwise be required.
[24] The defendants did not deny during
cross examination of Mr. Oosthuizen that the signatures on the agency
agreement and addendum
belonged to them. They also never expressly
disputed during cross examination that they entered into the agency
agreement and the
addendum to the agency agreement. This information
was readily available to the defendants. The defendants’
failure to admit
or deny the signatures and the agency agreement is
suspicious especially in light of the fact that one of the
defendants, Mr. Eben
Botes, admitted in his resignation letter that
there was an offer made to him and that he signed “the
contract”. As
was pointed put by Jansen JA in Marine &
Trade Insurance Co Ltd v Van der Schyff
1972 (1) SA 26
(A) at 39G-H,
the failure of the respondent to reply or lead evidence in rebuttal
of a fact peculiarly within his knowledge is
taken into account when
one decides whether a prima facie case has been made out.
[25] In Hasselbacher Papier Import and
Export ( Body Corporate) and Another v MV Stavroula 1987(1) SA 75 (
C) it was found that
it is proper to put the failure to deny into the
scale before one decides that a prima facie case has been
established. To hold
otherwise would have the effect of making the
inference to be drawn from the failure redundant. Burger J stated at
p 79-80 that
:
“The respondent's failure to
reply does not by itself prove the applicants' case; this fact must
obviously be taken with the
evidence provided by the applicants
together with such considerations as to whether the relevant
information is or is not readily
available to the applicants or the
respondent. In the Galante case cited by Jansen JA supra the
requirement was that, if there
are two reasonable alternatives, the
adverse inference can then be drawn in favour of the plaintiff. In
the present case one could
hardly speak of two alternatives unless
one regards the absence of control as an alternative; possibly one
should rather say that,
if the applicant has shown that according to
all the information available to him it is a reasonable possibility
and that there
are no facts to the contrary, then the Court is
entitled to hold that a prima facie case has been established if the
respondent
has failed to place a denial on record when it could
easily do so. As was aptly pointed out by Wigmore in the passage
referred
to above, to hold otherwise would tend to obscure the truth
and create an artificial situation. In fact a respondent would adopt
the attitude: 'It may be correct what you say, but you can't prove
it.'
[26] I believe Oosthuizen and I accept
his evidence. In the absence of any evidence to the contrary, there
is no reason why the
Court should not accept that the defendants
concluded the agency agreement and the addendum with the plaintiff.
In my opinion in
the light of the evidence and the pleadings, the
prima facie case has ripened into proper proof. The whole tenor of
the cross-examination
was directed to create a suspicion that the
parties also entered into another agreement with Liberty. The
defendant did at his
own peril refrain from giving or leading
evidence to counter the prima facie proof of the existence of the
agency agreement between
the plaintiff and the defendants. A court
should be loath to retreat into a formalism which provides an escape
route to a party
which no longer considers it expedient to abide the
agreement. See Owner of the MV “Snow Crystal” v Transnet
Ltd t/a
National Ports Authority
[2007] 2 All SA 416
(C).
[27] In terms of the agency agreement
and addendum thereto the plaintiff is entitled to the return of the
lump sums and the commissions
earned.
Quantum
[28] The plaintiff and the defendants
agreed on the following amounts in the event of the plaintiff proving
the agency agreement.
a) Mr. L. Bergh: Upfront payment: R 294
897.77. Commission : R 75 805.58
b) Mr. T. Taggart: Upfront payment: R
287 713.55. Commission : R 116 487.27
c) Mr. E.B Botes: Upfront payment: R
321 706.66. Commission : R 103 111.16
d) Mr. F. Viljoen: Upfront payment: R
375 429.99. Commission: R 20 105.56
e) Mr. L. Koopman: Upfront payment: R
482 559.98. Commission: R 30 619.32
[29] In the result the following order
is made:
1. Judgment is granted against L. Bergh
in the sum of R 370 703.35 with costs. Interest payable at 15, 5 %
per annum from date of
service of summons to date of final payment.
2. Judgment is granted against T
Taggart in the sum of R 404 200.82 with costs. Interest payable at
15, 5 % per annum from date
of service of summons to date of final
payment.
3. Judgment is granted against E.B
Botes in the sum of R 424 817.82 with costs. Interest payable at 15,
5 % per annum from date
of service of summons to date of final
payment.
4. Judgment is granted against F.
Viljoen in the sum of R 395 535.55 with costs. Interest payable at
15, 5 % per annum from date
of service of summons to date of final
payment.
5. Judgment is granted against L.
Koopman in the sum of R 513 179.30 with costs. Interest payable at
15, 5 % per annum from date
of service of summons to date of final
payment.
L.WINDELL
Judge of the South Gauteng High
Court
Attorney for the Plaintiff : RC
Christie Incorporated
Counsel for Plaintiff : Adv. C.D
Roux
Attorney for defendants : Renee S
Naidoo Attorneys
Counsel for defendants : Adv. V.
Garvey
Date matter heard : 16 February-17
February 2015
Judgment date : 27 March 2015