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2020
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[2020] ZAGPJHC 1
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Old Mutual Limited and Others v Moyo and Another (A5041/19) [2020] ZAGPJHC 1; [2020] 4 BLLR 401 (GJ); [2020] 2 All SA 261 (GJ); (2020) 41 ILJ 1085 (GJ) (14 January 2020)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Appeal
Case No: A5041/19
In
the matter between:
OLD
MUTUAL
LIMITED
First
Appellant
OLD
MUTUAL LIFE ASSURANCE COMPANY (SA) LIMITED
Second
Appellant
TREVOR
MANUEL
Third
Appellant
NON-EXECUTIVE
DIRECTORS OF
OLD
MUTUAL
LIMITED
Fourth
to Sixteenth Appellants
and
PETER
MTHANDAZO
MOYO
First
Respondent
NMT
CAPITAL (PTY)
LIMITED
Second
Respondent
Case
Summary
:
Interim Interdict – Reinstatement of chief executive pending
finalisation of action – Interpretation of employment
contract:
contract for fixed duration, but with right to terminate on six
months’ notice – contract affords employer
right to
decide whether or not to hold a disciplinary enquiry or pre-dismissal
arbitration where allegations of misconduct have
been raised –
termination on six months’ notice not shown to be unlawful
despite allegations of conflict of interest
and misconduct on the
part of the chief executive.
Specific
performance – no realistic prospect of obtaining reinstatement
where there is a breakdown of the special relationship
of trust and
confidence that should exist between the chief executive and the
board.
First
requisite for the granting of an interim interdict (a
prima facie
right, though open to some doubt) not established.
Appealability
– interim interdict – an order in the form of an interim
interdict which operates pending the outcome
of an action mentioned
in the order ordinarily not appealable, unless the interests of
justice dictate that it be appealable –
interim interdict
should not have been granted in the first place and should be
corrected forthwith before proceedings run their
full course.
JUDGMENT
Meyer
J (Matojane and Keightley JJ concurring)
[1]
This appeal, with leave of the court
a
quo
(Mashile J), arose as a result of the first appellant, Old Mutual
Limited, terminating the written contract of employment of its
chief
executive officer, Mr Mthandazo Peter Moyo, who is the first
respondent (Mr Moyo). It did so in terms of clause 24.1
thereof, which provides that it may be terminated ‘[b]y either
party providing 6 (six) months’ notice to this effect’.
The court
a
quo
granted an interim interdict reinstating Mr Moyo in the position of
chief executive and restraining Old Mutual from appointing
any other
person in that position pending the finalisation of further legal
proceedings to be instituted by him. In the further
legal
proceedings, Mr Moyo indicated that he would be claiming
specific performance or damages
ex
contractu
,
and in the alternative ‘delictual damages for patrimonial loss
caused by the impairment of his dignity and/or reputation
and/or a
breach of the provisions of the
Protected Disclosures Act 26 of 2000
read with
s 159
of the
Companies Act 71 of 2008
’. The
court
a
quo
found that Mr Moyo had established the existence of a
prima
facie
right
to reinstatement, which, if not protected by the interim interdict,
would cause him to suffer irreparable prejudice. It found
that Old
Mutual had repudiated the contract of employment by terminating it in
terms of clause 24.1.1 and in not following the
disciplinary enquiry
or pre-dismissal arbitration procedure contemplated in clause 25.1.1
in circumstances where it had accused
Mr Moyo of having had a
conflict of interest and of having committed gross misconduct. Mr
Moyo had elected not to accept the repudiation
and instead, to claim
specific performance. The other requirements for an interim
interdict, the court
a
quo
found,
had also been met.
[2]
I refer to Old Mutual Limited and the second appellant, Old Mutual
Life Assurance Company (SA) Limited, individually and collectively
as
‘Old Mutual’, as was often done in the interdict
application papers. The third appellant, Mr Trevor Manuel
(Mr
Manuel), is a non-executive director and the chairman of the Old
Mutual board (the chairman), and the fourth to sixteenth appellants
are its non-executive directors (the non-executive directors).
The second respondent, NMT Capital (Pty) Ltd (NMT) is cited
as an
interested party and no relief was sought against it. It is
necessary to set out the facts presented by the respective
parties in
the interdict application papers extensively.
[3]
Old Mutual is one of the oldest companies in South Africa, having
been established in 1845 as this country’s first mutual
life
insurance company. It currently employs more than 30 000 people
and operates in 13 countries across the African continent,
and in
China. Between 1997 and 2005, Mr Moyo was employed by Old
Mutual in various positions, including that of deputy managing
director. In June 2017, he was appointed as its chief
executive. He is also a shareholder of Old Mutual.
[4]
The position and scope of Mr Moyo’s duties as the chief
executive of Old Mutual are provided for in clause 3 of the
employment
contract, which in relevant parts provides that: his
main duties and responsibilities shall be determined by the board
(clause
3.2); he shall faithfully and diligently perform such duties
and exercise such powers consistent with the position of chief
executive
or as may from time to time be reasonably assigned to or
vested in him, and shall obey all reasonable and lawful directions of
Old Mutual, in particular, his actions shall at all times be
consistent with and further the interests of Old Mutual (clause
3.3);
he acknowledged that because of the senior nature of his
appointment it is essential that he, together with other executives,
can
work together as an effective and integrated team, and that as
such, interpersonal compatibility forms an inherent requirement of
his appointment (clause 3.6); and he acknowledged that, because
of the senior nature of his appointment, it is also essential
that
his senior colleagues, the chairperson of the board and the board
have confidence in his performance and that such confidence
forms an
inherent and essential requirement of his appointment and continued
employment.
[5]
Furthermore, in terms of clause 12, which is headed ‘Inherent
Requirements’ Mr Moyo acknowledged that the employment
relationship is one based on trust and mutual respect (clause 12.1)
and agreed: at all times to act in the best interests
of Old
Mutual and its stakeholders and not to engage in behaviour or work or
other activities which may result in a conflict of
interest arising
between Old Mutual and its stakeholders and him (clause 12.2.3); to
act in good faith towards Old Mutual,
which requirement includes that
he does not involve himself in an action that could be seen as
directly or indirectly acting against
the best interests of Old
Mutual (clause 12.2.4); and to refrain from any action which may in
any manner harm the good name or
reputation of Old Mutual, or which
may place it in an invidious or compromising situation (clause
12.2.8). He acknowledged
that a breach of any of these
requirements would warrant termination of his employment with or
without notice (clause 12.2).
Clause 14.1 provides that he
shall immediately on becoming aware thereof disclose in writing to
the chairperson any actual or potential
conflict of interest which
exists or which in future may arise and exist in relation to the
business or affairs of him and Old
Mutual. In terms of clause
23.1, he acknowledged that he was to be subject to Old Mutual’s
‘discipline, grievance
and related procedures’ in place
from time to time.
[6]
It was well-known to all the parties concerned at the time of Mr
Moyo’s appointment as the chief executive of Old Mutual,
that
he was a shareholder and director of NMT. It is an investment
holding company in which he held 20% of its issued shares
and an
additional 6.666% via a company, STS Capital (Pty) Ltd, owned by his
family trust. Old Mutual was also a 20% shareholder
of NMT
since 2005. Old Mutual provided equity and preference share
funding to NMT and other entities in the NMT group of
companies and
it earns returns as an ordinary and preferred shareholder.
Because of Mr Moyo’s interest in NMT and that
of Old Mutual,
they concluded protocols which set out the way in which any potential
conflict of interest that might arise would
be dealt with. The
protocols were incorporated into the employment contract (addendum A
and addendum B).
[7]
In terms of addendum A, Mr Moyo acknowledged and agreed that any
conflict resulting from his position as a non-executive director
of
NMT would be dealt with by the chairperson of the Old Mutual board
‘and/or in terms of clause 25.2’ of the employment
contract. He also acknowledged and agreed that the director/s
appointed by Old Mutual to the NMT board shall be required
to
disclose to the chairperson of Old Mutual any conflict in respect of
his position as a non-executive director of NMT.
In terms of
addendum B, he agreed that the best interests of Old Mutual would
always take precedence over his personal interests
in NMT (clause
4.5). The parties further agreed that the ‘Nominations
and Governance Committee’ (NGC) - a standing
sub-committee of
the Old Mutual board responsible for governance matters and
consisting of the chairperson of each of the other
board
sub-committees - would have principal oversight over and
responsibility for managing conflicts of interests (clause 5.1)
and
he was required, as soon as practicably possible after becoming aware
of a conflict of interest or the perception of one arising
between
himself and Old Mutual as a result of the NMT interest, to advise
both the chairperson of the Old Mutual board and the
chairperson of
the NGC about the matter, with sufficient particularity (clause 6.1).
[8]
Clause 24 of the employment contract deals with its termination.
It contemplates its automatic termination upon Mr Moyo
reaching
normal or agreed earlier retirement age and for either party to
terminate it either on six months’ notice as provided
for in
clause 24.1.1. or for other reasons enumerated in the clause.
It reads:
‘
24.1. This contract of
employment may be terminated as follows:
24.1.1.
By either party providing 6 (six) months’ notice to this
effect, in writing, to the other party, subject to clause
24.3.
Where such notice is provided:
24.1.1.1. The Employer may, at its
sole discretion, elect whether the Executive should work during this
period of notice.
Notwithstanding this, the Employer shall pay
the Executive for the 6 months’ notice irrespective of whether
the Employer
has required him to work or not.
24.1.12. Should the Executive give
notice in terms of clause 24.1.1 and request that the Employer waive
the notice period, the Employer
may exercise its discretion in this
regard. Should the Employer agree to such waiver, the Executive
shall be paid only up
to and including his last day of actual work.
24.1.2.
Upon the Executive reaching the normal retirement age as determined
by the Employer, or at an agreed earlier retirement
age, at which
point this Agreement shall terminate and the Executive shall commence
retirement.
24.1.3.
By the Employer on the basis of the grounds regarded as valid in the
Labour Relations Act Number 66 of 1995, with or without
the notice
period as set out in clause 24.1.
24.1.4.
For any other lawful and fair reason.
24.2. Without limiting the provisions
of clause 24.1 above (inclusive of clauses 24.1.1 to 24.1.4) the
Employer may, at any time
during the currency of this Agreement:
24.2.1.
Summarily terminate this Agreement should the Executive be guilty of
misconduct which would entitle the Employer, in law
and/or equity, to
summarily dismiss him;
24.2.2.
Terminate this Agreement with notice should the Executive not meet
the Employer’s required performance standards;
24.2.3.
Terminate this Agreement with notice on the basis of the Executive’s
incapacity on the basis of ill health or injury;
24.2.4.
Terminate this Agreement on the basis of the Employer’s and/or
the Group’s operational requirements;
24.2.5.
Terminate this Agreement with or without notice on the basis of
“FAIS” requirements as set out in clause 17,
or a breach
in terms of clause 18 of this Agreement (the FICA);
24.2.6
Terminate this Agreement summarily where the Executive has committed
a material breach of contract and/or for reasons recognised
and
accepted in law and equity as justifying summary termination of
employment;
24.2.5. Terminate this Agreement
without notice if the Executive is in breach of any code or rules or
guilty of any offence under
or in respect of any financial services
regulator (including, without limitation, the Financial Services
Board (“FSB”)
or any successor body, including any
prudential authority).’
[9]
Clause 25.1 of the employment contract is also relevant. It
deals with pre-dismissal arbitration and reads thus:
’
25.1.1. Where allegations of
misconduct or incapacity have been raised against the Executive, the
Employer will be entitled, within
its sole discretion, to decide
whether or not to hold an internal disciplinary enquiry, or to
proceed instead via the pre-dismissal
arbitration procedure,
contemplated in Section 188A of the Labour Relations Act number
66 of 1995, and subject to the Executive’s
remuneration
at the time being equal to or above that stipulated in section 6(3)
of the Basic Conditions of Employment Act, the
Executive hereby
consents to such pre-dismissal arbitration in terms of section 188A
of the Labour Relations Act.
25.1.2. Should circumstances arise in
respect of the Executive where the Employer chooses to invoke clause
25.1.1 and pre-dismissal
arbitration proceedings must be arranged,
the Employer shall decide in its sole discretion as to whether to
utilise the services
of the Commission for Conciliation, Mediation
and Arbitration (the “CCMA”) or an accredited agency.’
[10]
In return for his services as the chief executive of Old Mutual, Mr
Moyo was highly paid. He was, for instance, paid
R35,5 million
under his executive remuneration arrangements during the 2018
financial year. That included fixed remuneration
and incentive
payments. Old Mutual, on the other hand, as it rightly
contends, is entitled to expect high standards of conduct
and high
levels of trust and engagement from a highly paid chief executive,
such as Mr Moyo, who, in turn is to maintain the trust
and confidence
of the board. Given the strict regulatory context in which Old
Mutual operates and the contractual obligations
of its chief
executive, Mr Moyo, and indeed any senor executive of Old Mutual,
must adhere to the highest standards of governance
and ethics.
The position of a chief executive is a demanding role which comes
with considerable responsibility to a range
of stakeholders.
[11]
NMT, Old Mutual, Mr Moyo and the other individual shareholders of
NMT, concluded a preference share subscription agreement
on 25
January 2005 (the preference share agreement), which provides
inter
alia
that:
- ‘[t]he
preference shares shall confer on the shareholder the right to
receive out of the profits of the company a
cumulative preferential
dividend (“the preference dividend”) which shall be
calculated and determined in the manner
[provided for in the
preference share agreement], and which will rank in priority to any
dividends which after the date of issue
of the preference shares
(“the issue date”) may be declared in respect of any
ordinary shares or other shares giving
preferential rights in the
company’ and ‘[n]o dividends may be paid on ordinary
shares before all arrear preference
dividends have been paid’
(clause 1.2 of Schedule 1);
- ‘[t]he
preference dividends shall be declared in respect of six monthly
periods ending 30 June and 31 December (“dividend
date”)
and be payable on the next business day (“dividend payment
date”) to preference shareholders registered
on the dividend
date’ (clause 1.3 of Schedule 1);
- [i]f any
preference dividend is not paid on a dividend date (“the arrear
preference dividend”), an additional
preference dividend shall
be paid which shall be calculated in accordance with the formula
specified in [the preference share agreement]
. . . from the date the
arrear preference dividend was due in terms of this agreement to the
date of payment of the arrear preference
dividend in full (“the
additional preference dividend”) (clause 1.6 of Schedule 1);
- ‘[o]n the
redemption date, the company shall redeem the preference shares at
the redemption amount’ (clause
1.6 of Schedule 1); and
- ‘[t]he
preference shares shall forthwith become redeemable and be redeemed’
if ‘any preference dividend
on the preference shares is not
declared and/or paid on due date and the company fails to declare the
preference dividend and the
additional preference dividend and/or pay
it within 5 (five) business days after receipt of written notice from
the shareholder
requiring the declaration and/or payment of the
preference dividend concerned’ (clause 1.12.4).
[12]
Old Mutual agreed to the extension of the redemption dates of its NMT
preference shares in 2010, 2013, and 2017. In January
2018, an
addendum to the preference share subscription agreement was concluded
between Old Mutual, NMT and the other shareholders
in terms whereof
the redemption date of Old Mutual’s preference shares was
extended to 30 June 2018. Mr Moyo signed
the addendum to the
preference share agreement on 23 January 2018. At the end of
February or early March 2018, NMT’s
board approved the
declaration of ordinary dividends in the amount of R10 million (the
March 2018 dividend). It was declared,
according to Old Mutual,
when preference share dividends due to Old Mutual were in arrears.
[13]
During 2018, NMT received payment of the proceeds of the sale of its
BEE stake in Growthpoint. On 30 June 2018, the full
amount of
preference share funding to NMT became due and payable to Old Mutual
in terms of the addendum to the preference share
agreement. On
4 July 2018, four days later, Mr Moyo chaired a meeting of the NMT
board at which it considered the declaration
of a further ordinary
dividend. The meeting was, amongst others, also attended by the
Old Mutual nominated director, Mr Patel.
The minutes of the NMT
board meeting reflect that ‘[i]t was noted that all the
Directors are conflicted on the dividends
matter’. At
that time, NMT’s current liability to Old Mutual under the
preference share agreement was approximately
R65.9 million, which
amount was then due to Old Mutual. This was evident from the
documents that served before the NMT board
at the meeting. The
NMT board decision, which Mr Moyo proposed and supported, was to
declare an ordinary dividend in the
amount of R105 million (the July
2018 dividend). Of this, an amount of R21 million was paid to
Mr Moyo in his personal capacity
and a further R7 million was paid to
the company owned by his family trust.
[14]
In the last week of August 2018, the chairman, Mr Thys du Toit, of
the ‘Related Party Transaction Committee’ (RPTC)
- a
standing sub-committee of the Old Mutual board - requested
information on Mr Moyo’s interests in NMT. He raised
questions about Mr Moyo’s management of his conflict of
interest at NMT, including whether any conflicting interest was being
managed appropriately and in a manner consistent with sound
governance. His queries were to be deferred to the NGC, the
standing sub-committee responsible for governance matters. The
request was actioned by Old Mutual’s company secretary,
Ms
Elsabé Kirsten (the company secretary), who is also the main
deponent to its answering affidavit in the interim interdict
application.
[15]
The company secretary instructed Old Mutual’s chief legal
officer on the matter, who in turn, during early September
2018,
sought information from the corporate finance team. This
coincided broadly in time with the receipt by Old Mutual of
various
requests from NMT, one being contained in a letter dated 4 September
2018, requesting an extension of the Old Mutual preference
share
redemption date from 30 June 2018 for a period of three years.
According to the company secretary, following initial
consideration
of the requests from the RPTC chairperson by the chief legal officer,
and the response of the corporate finance team,
it became apparent
that there were governance concerns around the matter. She and
the chief legal officer discussed the matter
with the Old Mutual
board chairman, Mr Manuel, towards the end of 2018. Mr Manuel
requested that the RPTC consider the matter
and, if necessary, refer
it to the NGC with a considered view, given the related party nature
of the issue.
[16]
A report to the RPTC, prepared during January 2019, identified
potential concerns about governance within the NMT group,
inter
alia
about the declaration of the March and July 2018 dividends
by NMT in breach of its preference share obligations to Old Mutual
and
the potential risks associated with a request for Old Mutual to
ratify a settlement agreement concluded between NMT and the
Industrial
Development Corporation (IDC). According to the
report, this settlement agreement effectively removed what was
identified
at the time as being approximately R100 million in
liabilities from the NMT balance sheet, at the expense of the IDC (at
a time
when NMT was in a position to settle with the IDC in full).
At a meeting of the RPTC on 7 February 2019, it concluded that
there
were significant concerns regarding Old Mutual’s commercial
relationship with NMT and Mr Moyo’s management of
his conflict
of interest. These concerns were reported by the chair of the
RPTC to the NGC at a meeting of the NGC on 6 March
2019. The
NGC agreed with the RPTC’s recommendations,
inter alia
,
that further investigation be conducted by the RPTC, that external
counsel be briefed to assist the RPTC in light of the risk
of
potential litigation, and that the RPTC be mandated to develop a
course of action, including meeting with Mr Moyo and, depending
on
the legal advice it received, with NMT.
[17]
Various attempts were then made by the RPTC, with the assistance of
Old Mutual’s legal advisers, to secure information
from the NMT
group that would place the RPTC in a position to assess the
commercial merit of the various requests that NMT
had directed
to Old Mutual and to assess the merits of the concerns that had
arisen on the limited information then available.
Such attempts
to secure information were unsuccessful. This led to a series
of exchanges between Old Mutual’s legal
advisers (on behalf of
the RPTC) and NMT. During early April 2019, members of the RPTC
also sought Mr Moyo’s intervention
to ensure that NMT provided
the requested information. None of the information that had
been requested, however, was provided.
The only additional
information obtained by the RPTC was obtained from the archives of
Old Mutual when NMT agreed that Old Mutual
could have access to the
records of the Old Mutual nominated director of NMT, who was
previously employed by Old Mutual.
This brought to the RPTC’s
attention, for the first time, a copy of the documents that had been
placed before the NMT Board
at the meeting that was chaired by Mr
Moyo on 4 July 2018, when ordinary dividends of R105 million were
declared.
[18]
At the end of April 2019, the RPTC reported to the NGC,
inter
alia
, that on the information available to it, NMT’s
relationship with Old Mutual was seriously flawed and it recommended
that
Old Mutual should disengage from the NMT group in an orderly
manner by not extending Old Mutual’s preference shares
redemption
date and to move towards disinvestment from the NMT group
of companies. Furthermore, in the view of the RPTC, Mr Moyo, as
the chief executive of Old Mutual and as recipient and beneficiary of
the NMT ordinary dividends, was instrumental in the decision
taken
‘to engineer, declare and pay dividends out of a group of
companies of which the solvency was questionable and which
dividend
payments were made in breach of Old Mutual’s rights as
preference shareholder in NMT’. The RPTC concluded
that
Old Mutual should disengage from the NMT group on grounds of serious
loss of confidence and that Mr Moyo had failed to comply
with his
obligations under the protocols, resulting in a serious loss of
confidence in him.
[19]
The RPTC’s views were presented to and considered by the NGC at
a meeting on 29 April 2019. The NGC also considered
legal
advice that had been obtained at the instance of the RPTC dealing
with the rights of Old Mutual in relation to the NMT group
and the
rights and responsibilities of Old Mutual to engage appropriately and
fairly with Mr Moyo in light of the serious concerns
that had arisen
regarding his conflict of interest. The NGC resolved that,
subject to Old Mutual’s board approval,
a letter prepared by
Old Mutual’s legal advisors should be addressed to the NMT
group, that the Old Mutual board chairman
should meet with Mr Moyo
informally to communicate certain key points arising from the RPTC
investigation to him, and that the
chairman should report on that
engagement to the board.
[20]
On 30 April 2019, and after he had been apprised of the conclusions
reached by the RPTC and the NGC, Mr Moyo addressed an email
to the
Old Mutual board chairman. Therein, he referred to certain of
his own interactions with members of the RPTC, and expressed
his
surprise that there was a view that he had not conducted himself in
line with the terms of the protocols and that he had not
acted in Old
Mutual’s best interests in his involvement as non-executive
director of NMT in the declaration and distribution
of ordinary
dividends (the March 2018 and July 2018 NMT dividend declarations).
He made it clear that he always had acted
in the best interests of
Old Mutual.
[21]
At a meeting held on 1 May 2019, the Old Mutual board considered the
report of the NGC and the email from Mr Moyo addressed
to the
chairman. After considering the issues, the board resolved to
disengage in an orderly manner from the NMT group of
companies and to
establish an
ad hoc
sub-committee comprising the board
chairman, the chairperson of the Remuneration Committee, Ms Nombulelo
Moholi, a member of the
Audit Committee and of the Risk Committee, Mr
Paul Baloyi, and a member of the RPTC, Mr Stewart van Graan, to
engage with Mr Moyo
on the concerns that had arisen in relation to
his management of the conflict of interest.
[22]
A meeting between the
ad hoc
sub-committee and Mr Moyo took
place on 2 May 2019. The concerns that had arisen were
discussed at length. Following
the meeting, emails and letters
were exchanged between them, dated 8, 16 and 21 May 2019. In a
letter from Mr Manuel on behalf
of the sub-committee, Mr Moyo was
advised,
inter alia
, that:
‘
Central to the matters being
considered is the declaration and distribution of ordinary dividends
by NMT Capital in March 2018 and
July 2018. Both distributions
occurred in breach of the preference share subscription agreement in
place between NMT Capital
and [Old Mutual], firstly by ignoring the
arrears in preference share dividends at these respective
distribution dates, and secondly,
in July, also capital payments due
to [Old Mutual].
These are the issues we, as a
committee, placed before you in the meeting on 2 May 2019. In
your responses to the issues raised,
we listened carefully and made
copious notes. We also gave you the benefit of the doubt, and
accepted your representations
during our discussions. This was
our mandate from the Boards, because in its collective wisdom the
Non-Executive Directors
were of the view that these matters result in
a significant conflict of interest and suggest a failure by you to
discharge your
fiduciary duties as a director of [Old Mutual].
The seriousness of the issue required that we sought verification by
a detailed
examination of the documents available to us.
These documents include, but are not
limited to, correspondence, reports and minutes. In summary,
there is clear evidence
that Ordinary dividends were declared and
paid without sufficiently providing for and servicing the [Old
Mutual] Preference shares
as required in terms of agreements with
[Old Mutual]. There is also further information that this was
done without the consent
of [Old Mutual]. We are of the view
that you have provided insufficient information to convince us that
your actions at the
time of these infringements would, under
scrutiny, absolve you of responsibility.
At the conclusion of this examination,
the Ad Hoc Committee remains of the view that you have breached the
terms of your contract
of employment, by giving preference to your
own interests, above that of [Old Mutual]. We have been charged
by the Board
to evaluate whether by this conduct the interests of Old
Mutual have been prejudiced, and whether your conduct suggests a
conflict
of interest between your benefits as a Non-Executive
Director of NMT, and those of your responsibilities as the CEO and an
Executive
Director of Old Mutual Limited. Whilst we find the
information that we have perused compelling, we would wish to afford
you
an opportunity to counter this with documents that we may not
have been able to assess.’
[23]
In his response dated 21 May 2019, Mr Moyo,
inter alia,
stated
the following regarding the NMT dividends issue:
‘
The arrear preference dividends
were always planned to be redeemed from the proceeds of the
Growthpoint Distribution, given the
amount outstanding. They
were indeed paid out of the distribution. There can never be an
impression created that I
was working against Old Mutual regarding
payments to Old Mutual. My own submission as CEO of NMT at the
time and as Chairman
of the meeting point to a willingness to make
payment to Old Mutual. Exhibit 1 and 2 – Minutes of Board
meetings March
2017 and July 2018 . . .
In the event of a balance still
outstanding in the preference shares due by NMT to Old Mutual, the
plan was to extend the redemption
period. Old Mutual had always
agreed in the past to extend the redemption period. There was
nothing to suggest that,
this would not be extended in 2018.
Prior to this there had been extensions in 2010, 2013, and 2017.
Exhibit 4 –
Previous Extensions . . .
A question has been raised about the
ten million dividends paid in March 2018. NMT was in the final
stages of the Growthpoint
realisation and a proposal was made by the
executive, to pay Old Mutual one amount that would at least clear the
arrear preference
dividends following the receipt of the Growth point
proceeds. It was on this understanding that the ten million
rand (R10
million) dividends was approved. It is worth noting
that the Old Mutual appointed director also supported this.
Nothing
was done without Old Mutual’s knowledge.’
[24]
On 21 May 2019, following receipt of Mr Moyo’s letter, the NGC
together with Mr Paul Baloyi, as a member of the
ad hoc
committee,
met informally to discuss the response. They decided that the
matter needed to be raised with the full board at
its scheduled
meeting on 23 May 2019. Following a detailed briefing of the
Old Mutual board on the matter by the
ad hoc
committee at its
meeting on 23 May 2019, the board remained concerned by Mr Moyo’s
response to the issues raised with him.
Mr Moyo joined the
board meeting and was invited to engage with the board on the matters
of concern. Further detailed engagement
took place between him
and the board. After further deliberation the board concluded
that there had been a breakdown in trust
and confidence between the
board and Mr Moyo, and that it was necessary and appropriate to
separate.
[25]
The main factors, according to Old Mutual, which led to the complete
breakdown in the relationship of trust and confidence
between Mr Moyo
and the Old Mutual board, were his: (a) involvement as
non-executive director of NMT in the declaration of
the March 2018
dividend and approving the dividend distribution to ordinary
shareholders without evidence that a proper solvency
and liquidity
analysis was conducted (no account, according to Old Mutual, was
taken of NMT’s contingent liability to the
IDC as required by
the
Companies Act, which
materially affected its solvency analysis),
and at a time when preference dividends due to Old Mutual were in
arrears, and thus
in breach of the preference share agreement and the
protocols that formed part of the employment contract; (b)
involvement
as non-executive director of NMT in the declaration of
the July 2018 dividend and approving the dividend distribution to
ordinary
shareholders, again without evidence that a proper solvency
and liquidity analysis was conducted (disregarding the NMT contingent
liability to the IDC), and when to his knowledge the full amount of
R65.9 million was due to Old Mutual as a current liability
under the
preference share agreement, but with provision only made for payment
of a part (R32 million) of the NMT current liability
to Old Mutual,
and thus in breach of the preference share agreement and the
employment contract; and (c) his inability
to provide an
acceptable explanation for his actions.
[26]
The resultant benefit to Mr Moyo, directly, and indirectly through
his investment company, was R30.6 million. Mr Moyo,
according
to Old Mutual, did not take steps to ensure that arrear preference
dividends were paid to Old Mutual or that the R65.9
million current
liability to Old Mutual as at 30 June 2018 was treated as an amount
in fact due to it. He did not at any
stage during 2018 raise
the matter with the Old Mutual board chairman nor with the
sub-committee entrusted with oversight over
the conflicting interest,
the NGC. I refer hereinafter to this as ‘the NMT matter’.
[27]
The IDC made a substantial preference share investment in a
wholly-owned subsidiary of NMT in order to enable that subsidiary
to
acquire shares in a listed company, Basil Read. NMT guaranteed
the performance by the subsidiary of its preference share
obligations. Following a catastrophic decline in the price of
the Basil Read shares, the subsidiary was unable to fulfil
its
preference share obligations to the IDC, leaving NMT exposed to the
IDC in terms of its guarantee. From the documents
that served
before the NMT board at its meeting on 4 July 2018 when the July
dividend was declared, it appears that as at 4 July
2018 the exposure
of NMT to the IDC in terms of its guarantee was R157 million.
Of great concern to the Old Mutual board
was a proposal on how the
proceeds from the disposal by NMT of its Growthpoint shares in the
aggregate amount of R311 million should
be utilised. The
proposal document was included in the board pack prepared for the 4
July 2018 NMT board meeting. It
indicated no indebtedness to
the IDC and the NMT board, according to Old Mutual, proceeded to
disburse the available cash, including
by way of the dividend
declaration and distribution to ordinary shareholders of R105
million, on the basis that it was not indebted
to the IDC.
[28]
According to Old Mutual, although there may then have been some
progress in attempts to settle the indebtedness owed to the
IDC,
there was no conceivable basis for the debt to be disregarded and
treated as settled. A settlement agreement was only
concluded
five months later, on 12 November 2018, and it is, according to Old
Mutual, doubtful whether the indebtedness of NMT
to the IDC was in
fact settled as contemplated in the settlement agreement since it was
subject to conditions precedent which do
not appear to have been
fulfilled. Furthermore, states Old Mutual, on the information
available to it the settlement agreement
was approved by the NMT
board in contravention of
s 75
of the
Companies Act and
could in
those circumstances only be valid if subsequently ratified by
ordinary resolution of the NMT shareholders. Old Mutual,
as one
of the shareholders, was provided with a draft shareholders’
resolution, but has not approved it, and it appears doubtful
to it
that any such resolution has, to date, been validly passed.
Information on this, including copies of shareholder and
board
resolutions relating to any approvals of the IDC settlement
agreement, was requested by Old Mutual from NMT, but was not
provided.
[29]
Mr Moyo’s reply in the interdict application papers to these
allegations of Old Mutual relating to the IDC indebtedness,
is this:
‘
The IDC issue is a red herring
and is completely irrelevant hereto. Old Mutual was not only a
party to but also a financial
beneficiary of all the NMT decisions it
now seeks to criticise. It happily pocketed the ordinary
dividends, just like all
the other shareholders.’
[30]
It was further the view of the Old Mutual board that NMT’s
unsatisfactory financial position at the time of the declaration
and
distribution of the July 2018 dividend, was reflected in the 4
September 2018 NMT letter subsequently sent to Old Mutual, in
which
letter a three-year extension of the Old Mutual preference share
redemption date was requested. Therein, NMT stated
that if Old
Mutual did not then agree to a further extension of the term of the
preference share agreement (after 30 June 2018),
‘the
Preference Shares will be classified as a liability’, which
‘will directly affect the solvency of the company’
resulting ‘in NMT Capital being unable to use its balance sheet
for funding purposes’. With effect from the date
on which
Old Mutual ‘agrees to extend the redemption period, NMT Capital
will pay R20 m to settle all outstanding Preference
Dividends and
Arrear Preference Dividends that have accumulated since 2008’.
NMT was thereafter in negotiations with
Old Mutual about the
deferment of its preference share redemption date. A decision
not to agree to the extension was finally
taken at an Old Mutual
board meeting on 1 May 2019.
[31]
Mr Moyo, on the other hand, did not concede or acknowledge any breach
by the NMT board of the preference share agreement, or
that any
conflict of interest, or even potential conflict, had arisen between
his own interests and those of Old Mutual in the
NMT matter, or that
he had acted in breach of the protocols and thus of the employment
contract. It was, according to him,
understood by all parties
concerned that the repayment of arrear preference dividends would be
significantly reduced upon the happening
of a liquidity event over
time. Such a liquidity event occurred in 2018, when NMT was
paid the proceeds of the sale of its
BEE stake in Growthpoint. The
Old Mutual arrear preference dividends, according to him, were always
planned to be redeemed from
the proceeds of the Growthpoint
distribution, and the extension or ‘roll-over’ of the
redemption date of Old Mutual’s
NMT preference shares was
inevitable or a foregone conclusion. An extension of the
redemption date, according to him, would
not have prejudiced Old
Mutual in any way. He considered that NMT’s board,
therefore, was entitled to declare ordinary
dividends. He also
asserts that the members of the Old Mutual board and sub-committees
that have dealt with the NMT matter
have been driven by improper
motives.
[32]
Old Mutual, in turn, maintains that even though it had previously
agreed to deferments of the redemption date of its NMT preference
shares, the matter continued to be governed by the relevant
contractual provisions. It is, according to Old Mutual, also
apparent from the 4 September 2018 NMT letter that NMT itself did not
consider that a further extension was simply an administrative
matter, or ‘there for the taking’. The July 2018
dividend was also materially different in amount to any previous
dividend. According to Old Mutual, it also cannot be suggested,
as Mr Moyo does, that there is no financial prejudice when
a material
debt is not paid when it is due. Furthermore, it points out,
that during April 2019 NMT Group wrote to Old Mutual,
without any
prior notice or explanation, requesting it to subordinate all its
claims in order to restore the NMT group to solvency.
Mr Moyo,
so Old Mutual argues, should have been acutely aware of the
importance of ensuring that his own interests and those of
NMT were
not preferred over the interests of Old Mutual, and that NMT’s
contractual undertakings to Old Mutual were adhered
to. The Old
Mutual board has taken the position that Mr Moyo’s conduct in
managing the conflicting interest in the
NMT matter is not the
conduct it expects of its chief executive. Mr Moyo, it maintains,
failed to act in Old Mutual’s best
interests in circumstances
where it was manifestly incumbent on him, in terms of the protocols
and other provisions of the employment
contract, to protect those
interests proactively.
[33]
Old Mutual states in its answering affidavit that for various
reasons, which included Mr Moyo’s decision of his own accord
to
brief members of his executive team and thereby not making it
possible any longer to contain and safeguard the confidentiality
of
the board’s conclusion on his actions, it was considered
appropriate by the board to suspend him. It was also necessary
for Old Mutual Limited, under its listing obligations, to issue an
announcement of the suspension on the SENS service of the JSE,
and on
other stock exchanges, which occurred the day following the board
meeting on 23 May 2019. It says that it did so in
measured
terms that were appropriate, non-offensive and factually correct.
[34]
The period of Mr Moyo’s suspension, according to Old Mutual,
was intended for engagements between him and Old Mutual
on the terms
of an agreed settlement. But in the days following his
suspension he gave a number of public interviews to the
print and
broadcast media, criticising the Old Mutual board decision. It
was, according to Old Mutual, inappropriate for
him to engage in
public discourse in the manner that he did, and, in doing so, he
breached the Old Mutual media policy and failed
to conduct himself
according to the standard expected of the chief executive of Old
Mutual, regardless of the fact that he had
been suspended. His
engagements with the media in the manner that he did, so states Old
Mutual, caused it reputational harm.
His conduct served as a
further indication to the board of an irreparable breakdown in the
relationship of trust and confidence.
[35]
Mr Moyo, on the hand, states that the news of his suspension was
devastating and humiliating to him. At his level and
status of
employment, the mere suggestion that he was guilty of a conflict of
interest was instantly damaging to his reputation
and good name in
the business world and society in general. He was deeply hurt.
He states that he conducted a few interviews
at the behest of media
practitioners who were hounding him with the allegations of
wrongdoing which were implied by Old Mutual.
He felt the need
to put the record straight ‘somewhat’, hence his
agreement to be interviewed. According to him,
nothing harmful
was said in the interviews. He states that he merely defended
his integrity, which was being ruined every
day and every hour
without any recourse. He also felt aggrieved by the fact that
Old Mutual had seemingly breached its undertaking
to protect his
integrity, good name and confidentiality.
[36]
According to Old Mutual, it became apparent that an agreed settlement
would not be possible. The Old Mutual board considered
that
from the perspective of employment law, as regulated by the Labour
Relations Act 55 of 1995 (the LRA), there was fair reason
to
terminate Mr Moyo’s employment without notice, as contemplated
in clause 24.1.3 of the employment contract, and that there
was also
a lawful and fair reason to terminate his employment as contemplated
in clause 24.1.4. The board nevertheless resolved
to terminate
his employment on providing six months’ notice to that effect,
as provided for in clause 24.1.1. He was
to be paid a gross
amount of approximately R4 million in respect of his fixed
remuneration for the six-month notice period.
[37]
The Old Mutual board decision to terminate the employment contract on
notice in terms of clause 24.1.1 thereof, was communicated
to Mr Moyo
in a letter dated 17 June 2019. The letter is headed ‘NOTICE OF
TERMINATION OF EMPLOYMENT’ and its introductory
paragraphs read
thus:
‘
1. The purpose of this letter
is to give you notice of a decision of the [the Old Mutual board] to
terminate your employment in
terms of the provisions of clause 24.1.1
of your contract of employment.
2. You will be paid for the notice
period, but will not be required to perform any further work.’
The
letter goes on to explain the reason for the decision, -
‘
. . . that there has been a
complete breakdown in the relationship of trust between you and the
Board. This breakdown in trust
and confidence has its origin in
what we have referred to in engagements with you as “the NMT
matters”, and the manner
in which you have dealt with those
matters both in your engagements with the Board prior to your
suspension, and in your conduct
following your suspension.’
It
is explained that at the heart of the concerns that had led to a
complete breakdown in the relationship of trust and confidence
between Mr Moyo and the Old Mutual board was his role in the
declaration of ordinary dividends by NMT in breach of obligations
owed to Old Mutual under preference share funding arrangements.
The letter continues to set out the Old Mutual board’s
reasons
for not having conducted further investigation or a formal inquiry
into the matters raised, and its views that his conduct
‘may
properly be characterised as gross misconduct’ and that there
is reason to terminate his employment without notice,
as contemplated
in clauses 24.1.3 and 24.1.4 of the employment contract, but-
‘
[n]evertheless, to mitigate the
adverse effect on you of the termination of your employment, the
Board has resolved to terminate
your employment on notice as provided
in clause 24.1.1 of your contract of employment.’
[38]
Mr Moyo believes that both his suspension and subsequent dismissal
were not based on any genuine belief on the part of the
chairman of
the Old Mutual board and the non-executive directors that he had
breached the protocols and thus his employment contract,
but rather
constituted ‘unlawful reprisals’ because of him
performing his duties in raising some ‘concerning
improprieties
on the part of Mr Trevor Manuel and the board of directors of Old
Mutual, more specifically the non-executive directors’.
Mr Moyo raises two matters that, according to him, constituted
‘concerning improprieties’ that he raised. The
first occurred in March 2018 in the run-up to what was called Old
Mutual’s ‘managed separation’ and concerns
what he
refers to as the ‘triple conflict of interest’ of the
chairman of the Old Mutual board, and the second at the
meeting of
the NGC that was held on 6 March 2019, relating to certain legal
costs of the chairman that were paid by Old Mutual.
[39]
The ‘managed separation’ was undertaken to separate the
Old Mutual group, previously ultimately controlled by Old
Mutual plc,
a company listed in the United Kingdom, into four independent
businesses. This included two unbundling transactions.
In
the first of these, on 25 June 2018, the Old Mutual Wealth business,
now known as Quilter plc, was listed on the London Stock
Exchange and
the Johannesburg Stock Exchange (the JSE) and 86.6% of the total
issued share capital of Quilter plc was distributed,
through a
dividend in specie, to shareholders of Old Mutual plc. This was
followed, the next day, by the listing of Old Mutual
Ltd on the JSE.
This established a group domiciled and listed in South Africa, which
became the holding company of the remaining
components of the Old
Mutual group. The Old Mutual plc shareholders received Old
Mutual Ltd shares in exchange for their
Old Mutual plc shares and the
latter company is now a wholly-owned subsidiary of Old Mutual Ltd.
In the second unbundling
transaction (the final step of the managed
separation), 31.73% of Nedbank’s total issued share capital,
which had been held
by Old Mutual Ltd, was distributed to the Old
Mutual Ltd shareholders, again by way of a dividend in specie.
[40]
In consequence of the managed separation, Old Mutual Ltd assumed a
contingent liability of Old Mutual plc in the nature of
a guarantee
in favour of an American company. According to Mr Moyo, one of
the companies that stood to gain materially by
way of fees from the
realisation of the managed separation, was Rothschild, one of the
transaction advisers. Mr Manuel was
a director of Old Mutual
plc, the chairman of Old Mutual Ltd and the chairman of Rothschild,
and, according to Mr Moyo, thus subject
to three actual or potential
conflicts between these entities. It is common cause that Mr
Manuel’s relationship with
Rothschild pre-existed his joining
any Old Mutual board, and the Rothschild mandate to advise Old Mutual
plc on the managed separation
process also predated him joining the
Old Mutual plc board. These relationships were known and
disclosed.
[41]
Mr Moyo states that during or about March 2018 he raised with the Old
Mutual board chairman, ‘in good faith and for no
personal
gain’, his genuine concerns around what he perceived as a
‘triple conflict of interest’ on the part
of the
chairman. He states that he openly voiced his objections to the
board chairman about the impropriety of his participation
in any
discussions regarding Old Mutual’s proposed assumption of the
Old Mutual plc contingent liability. The board
chairman,
according to Mr Moyo, ignored and failed to act on his raising the
alarm and continued to participate in the discussions
of that matter
and, from that point on, his attitude towards Mr Moyo deteriorated.
Mr Moyo states that he tried to explain
to the board chairman that it
was nothing personal, but all in vain.
[42]
Mr Manuel, on the other hand, particularly denies having had any
discussions with Mr Moyo in which he voiced objections about
the
impropriety of his participation in discussions about the assumption
of the contingent liability, or that he was involved in
any such
discussions. The RPTC, it is undisputed, was established in the
build-up to the managed separation. It consists
of three
independent non-executive directors of the Old Mutual board.
Matters of potential conflict of interest, including
the chairman’s
potential conflict of interest, were dealt with by the RPTC. It
is further undisputed that the board
chairman was, and is not now, a
member of that board sub-committee. Old Mutual’s version
is that the board chairman
had no direct involvement whatsoever in
the way the assumption of the contingent liability issue was
ultimately resolved.
He was not part of the RPTC deliberations
on the issue. Mr Moyo, on the other hand, was intimately
involved. Both he
and the company secretary were part of a
teleconference meeting of the RTPC on 23 March 2018, when the RTPC
approved the assumption
of the contingent liability, subject to the
required regulatory and exchange control approvals. Mr Moyo, it
is undisputed,
supported the resolution. The board chairman was
not present.
I
t is also similarly undisputed that Mr
Moyo approved the subsequent resolution of the Old Mutual board,
which authorised the conclusion
of the guarantee. In that
resolution, three of the directors of Old Mutual who were also
directors of Old Mutual plc (one
of whom the board chairman) formally
and in writing declared their conflict of interest and took no part
in the decision.
Mr Moyo also approved the Old Mutual Ltd
pre-listing statement that dealt specifically with the assumption of
the Old Mutual plc
contingent liability by Old Mutual Ltd.
[43]
According to Mr Moyo, he told the board chairman during
February/March 2019 that he intended to raise another objection with
the board, via the NGC, regarding the ‘improper non-disclosure’
of a payment amounting to millions of rand, which was
made by Old
Mutual in respect of the board chairman’s legal fees in a
particular matter, which matter had ‘absolutely
nothing to do
with Old Mutual’. It was, according to Mr Moyo,
‘highly irregular and improper not to disclose
it to the Old
Mutual shareholders, who knew nothing about it’. He
states that the board chairman tried to dissuade
him from doing so.
In March 2019, he nevertheless placed the matter on the NGC agenda,
and the board chairman was asked to
recuse himself, which he did.
He states that the NGC ‘once again resolved not to implement
[his] proposal that the
expenditure be disclosed, despite [his]
motivation that it was compulsory to do so,
inter alia
,
because it amounted to a form of remuneration in the hands of Mr
Manuel’. Mr Moyo states that ‘after that episode
and as a result thereof, all hell broke loose and Mr Manuel treated
[him] with open hostility’.
[44]
The NGC meeting at which the legal costs issue was raised and
discussed is the meeting on 6 March 2019, to which I have referred
in
paragraph 16
supra
when the NGC agreed with the
recommendations of the RPTC about the way forward regarding the
concerns relating to Mr Moyo’s
conduct in the NMT matter.
It is undisputed, however, that Mr Moyo himself was involved in the
decision in 2017 for Old Mutual
to pay the legal costs of its board
chairman, because the matter concerned the interests of Old Mutual.
The decision for
Old Mutual to pay the relevant legal costs and
manage the legal strategy was not initiated by the board chairman.
Mr Moyo
personally instructed Old Mutual’s chief legal officer,
Mr Craig McLeod, to proceed, and payments for the legal fees were
processed through Mr Moyo’s office. The legal costs at
Old Mutual’s expense were approved only where it served
the
interests of Old Mutual and the costs of any litigation in which the
board chairman was involved that did not concern Old Mutual’s
interests were not paid by Old Mutual.
[45]
It is further undisputed that, at the NGC meeting on 6 March 2019, Mr
Moyo informed the committee that he had approved the
litigation in
2017, that this had been at the initiative of Old Mutual and not the
board chairman, and he explained the reasons
for the decision for Old
Mutual to incur the liability. The NGC resolved that the proper
authority for decisions of this
kind should reside with the chief
executive, Mr Moyo, where necessary in discussion with the chairman
of the RPTC. This NGC
decision relating to the board chairman’s
legal fees was subsequently approved by the full board at a meeting
on 8 March
2019, again after a discussion from which the board
chairman recused himself.
[46]
At its meeting on 6 March 2019, the NGC also agreed that advice
should be obtained on how those legal costs should be disclosed
in
the annual financial statements, if required. Following a
discussion that the company secretary had with Mr Moyo after
the
meeting, she referred the matter to Old Mutual’s auditors for
advice, which advice, she states, was to the best of her
knowledge
applied. Mr Moyo did not raise the issue with her again, and he
duly approved the annual financial statements of
Old Mutual. Mr
Moyo’s allegations that ‘all hell broke loose’ and
that the board chair treated him ‘with
open hostility’
are denied and said to be ‘devoid of any truth’.
[47]
Mr Moyo states that towards the end of April 2019 it came to his
attention that he was being accused by the board chairman
of having
allegedly breached the protocols in respect of the Old Mutual/NMT
relationship ‘or the so-called NMT matter which
is at the
centre of this application’. He states that, in the
totality of the circumstances, he felt victimised and
arbitrarily
discriminated against as a result of his ‘various protected
disclosure/s made in good faith’ and in the
execution of his
duties’. Old Mutual, on the other hand, denies that Mr
Moyo made any ‘protected disclosures’
or that he was
discriminated against. According to Old Mutual, neither of the
two matters relied upon by him (Mr Manuel’s
alleged
participation in discussions relating to the assumption of liability
and Old Mutual paying some of his legal fees) featured
at any time in
any deliberations of any of the three board sub-committees (the RTPC,
NGC and
ad hoc
sub-committee) that considered Mr Moyo’s
position, or in deliberations of the board itself when it reached the
conclusion
that there has been a breakdown in trust and confidence in
him; they were unrelated. These matters, Old Mutual maintains,
‘were as a matter of fact completely irrelevant to any decision
or discussion by the board on [Mr Moyo’s] own position’.
[48]
Mr Moyo further maintains that the non-executive directors of Old
Mutual (the fourth to sixteenth appellants) have ‘allowed
themselves to be bullied and/or unduly, unnecessarily and/or
recklessly cajoled into taking clearly unwarranted disciplinary
action
against [him]’. He had gained the impression ‘that
the chairman was determined to get rid of [him] using the NMT
matter
as an excuse and that he was putting undue pressure on other
directors, who were unfortunately and improperly allowing themselves
to be bullied and to which they ultimately clearly succumbed’.
He indicates that he will therefore seek an order
in the legal
proceedings contemplated in part B of the notice motion that the
board chairperson and the non-executive directors
be declared
delinquent directors in terms of
s 162
of the
Companies Act.
[49
]
Old Mutual’s non-executive directors, on the other hand, take
serious objection to such allegations and insinuations that
they were
incapable of exercising independent judgment on the NMT matter, or
that they allowed themselves to be ‘bullied’
by the board
chairman to reach the conclusion that there has been a breakdown in
trust and confidence, and that each one of them
is a delinquent
director. They state that ‘[t]hese assertions, introduced
without any proper factual basis, are scurrilous,
and are deeply
disrespectful’ of each one of them, and that each one of them
‘is a senior professional person of high
integrity and
experience in business and leadership’. They say that
discussions at board meetings, including meetings
concerning Mr Moyo
and the breakdown in trust and confidence in him, have been robust,
as should be expected at meetings of a board
of that calibre.
Ultimately, however, the conclusion that there was a breakdown in
trust and confidence, that a separation
with Mr Moyo was necessary,
and all related ancillary decisions were reached by clear consensus,
with no material dissenting voice
from any single member of the board
present. Each one them, including the board chairman, was
re-elected by shareholders
of Old Mutual at its annual general
meeting on 24 May 2019, the day following the suspension of Mr Moyo.
Furthermore, they
say that Mr Moyo’s allegations regarding the
non-executive directors being bullied and succumbing to pressure to
oust him
‘serves only to demonstrate the extent of the
breakdown in the relationship between him and Old Mutual in
circumstances where
he effectively seeks reinstatement (pending an
action in which he seeks an order declaring the non-executive
directors delinquent)’.
[50]
Old Mutual contends that even on his own version, the ‘facts’
advanced by Mr Moyo do not amount to a ‘protected
disclosure’
as contemplated in the PDA, nor is there a causal nexus between the
alleged disclosures and the decision by Old
Mutual to suspend him and
ultimately to give notice of the termination of the employment
contract. It further contends that
none of what Mr Moyo states
in relation to the PDA or the
Companies Act in
any event supports his
claim for an interim interdict. Those allegations are only
pertinent to the main action contemplated
in part B of the notice of
motion. According to Old Mutual, ‘the decision to suspend
[Mr Moyo] and ultimately to give
notice of the termination of his
employment was indeed based on a genuine belief on the part of the
board, based on firm factual
grounds that emanated from the
investigation and the engagements with Mr Moyo himself, that there
had been a complete breakdown
in trust and confidence in [him]’.
Mr Moyo’s stance, as stated by him, ‘is simply that there
was no objective
basis for such breakdown’ and ‘that it
was manufactured for ulterior motives’.
[51]
Part B of the notice of motion sets out the causes of action to be
advanced in the contemplated action and reads thus:
‘
An application and/or action,
which must be instituted within 60 days of the outcome of Part A, for
relief in the form of:
1.
Specific performance of the
employment contract (ie permanent reinstatement);
2.
Alternatively
,
contractual damages arising out of breach of contract; and/or
3.
Further alternatively
,
delictual damages for patrimonial loss caused by the impairment of
the applicant’s dignity and/or reputation and/or breach
of the
provisions of the
Protected Disclosures Act 26 of 2000
read with
section 159
of the
Companies Act 71 of 2008
;
4.
Declaring the third to
seventeenth respondents to be delinquent directors in terms of
section 162
of the
Companies Act;
5.
Costs
in the event of
opposition’.
In
his founding affidavit Mr Moyo states that ‘[a]lthough both
[his] suspension and/or [his] dismissal were also unfair in
terms of
the Labour Relations Act 55 of 1995 (“the LRA”), [he]
hereby specifically abandons [his] claim(s) based on
[his] LRA rights
and [has] made an election not to assert them in these proceedings’.
We were informed from the bar
that the action contemplated in part B
of the notice of motion had in fact been instituted on 29 September
2019.
[52]
It was within this factual context that the court
a quo
found
that clause 25.1.1 of the employment contract afforded Mr Moyo the
right to an internal disciplinary enquiry or pre-dismissal
arbitration once allegations of a conflict of interest and of
misconduct on his part had been raised. It found that Old
Mutual was, in those circumstances, not legally entitled to invoke
clause 24.1.1 and to terminate the employment contract by providing
six months’ notice, but instead was obliged to follow the
disciplinary enquiry or pre-dismissal arbitration procedure
contemplated
in clause 25.1.1. The court
a quo
found
that Old Mutual’s termination of the employment contract in
terms of clause 24.1 therefore constituted a repudiation
thereof,
which repudiation vested Mr Moyo with an election either to accept
the breach of contract or repudiation and sue for damages
or to
enforce the contract. He had elected the latter.
[53]
The court
a quo
found support for its construction of the
relevant provisions of the employment contract in
Somi v Old
Mutual Africa Holdings (Pty) Ltd
(2015) 36 ILJ 2370 (LC) and
Motale v The Citizen 1978 (Pty) Ltd and Others
[2017] 5 BLLR
511
(LC), and rejected a contention that it should follow
Gama v
Transnet SOC Limited and Others
(J3701/18) Labour Court,
Johannesburg (22 November 2018), as ‘[t]he facts that led the
court in the
Gama
matter to decide as it did are radically
dissimilar from the present case’. The court
a
quo
rejected Old Mutual’s contention that this is a fitting
case in which the trial court ultimately is not likely to give effect
to Mr Moyo’s choice to claim specific performance.
Furthermore, the court
a quo
found that the PDA finds
application and that Mr Moyo ‘should be protected’.
[54]
In granting the interim interdict the court a
quo
said,
inter
alia
:
‘
Apart from being accused of
having had a conflict of interest, the Applicant has also been
accused of having committed a gross misconduct.
Clause 25.1.1
is explicit on what ought to happen once an employee is accused of
misconduct. Strangely, instead of dealing
with the Applicant’s
misconduct as directed in Clause 25.1.1, the Respondents, probably
disliking the procedure prescribed
in Clause 25.1.1 or Addendum ‘A’,
invoked clause 24.1.1. It is nonsensical and of course
disingenuous to condemn
a person of having a conflict of interest or
committing a misconduct only to turn around and state, as the First
Respondent’s
chairperson did in one of his letters, that same
person had done nothing wrong.
. . .
Where a party chooses to furnish
reasons for the dismissal, especially in those circumstances where
such reasons may be devastating
to the other party, such as the
present, the invariably
audi alteram partem
rules ought to
find application.
. . .
The dismissal of the Applicant, in my
opinion, demonstrated that the Respondents no longer considered
themselves bound by the terms
of the contract. That act
presented the Applicant with two choices – to accept the
repudiation and sue for damages
or to reject it and sue for specific
performance. In this case, the Applicant has elected to sue for
specific performance.
Mindful that an act of repudiation must
be assessed subjectively, there cannot be any other interpretation of
the action of the
Respondents, objectively and subjectively, it was a
repudiation. In the result, I am satisfied that the Applicant
has established
the existence of his
prima facie
right, which
if not protected he will suffer irreparable harm.’
[55]
In finding that the PDA finds application and that Mr Moyo ‘should
be protected’, the court
a quo
said this:
‘
The Respondents would let this
Court believe that the issue concerning the Applicant’s
conflict of interest arose well before
he made the disclosures.
In short, this is factually misguided. The Respondents might
have been holding meetings as
early as January 2019 but it was not
until retrieval of certain documents from archives of NMT during or
at the end of April that
they learnt of the alleged conflict.
The discovery of the alleged conflict therefore came well after the
disclosures.
For this reason, the connection is apparent –
disclosure followed by alleged conflict and the occupational
detriment.
On the understanding that causality was the only
issue, I find that the Applicant should be protected.’
And
in the court
a quo’s
judgment granting leave to appeal
it is said:
‘
The question pertaining to the
PDA was the most insignificant part of this Court’s judgment
because the court had at that
stage already concluded that the
Applicants had repudiated the contract of employment by the dismissal
of the first respondent.
It is correct that the court confined
itself to causation, which was only one aspect of the PDA issue but
that was made clear in
the judgment anyway. While the PDA issue
could be perceived as a matter falling under Part “B”, it
was also relevant
under Part “A”. The First
Respondent claimed reinstatement on the basis that dismissal,
although branded as emanating
from a conflict of interest, was in
fact arising from the disclosures that he made about the
chairperson.’
[56]
I turn first to the court
a quo’s
findings on the
applicability of the PDA to the granting of the interim interdict
reinstating Mr Moyo in the position as the chief
executive of Old
Mutual and restraining Old Mutual from appointing anyone else in that
position. The PDA issue, to use the
term used by the court
a
quo
, was indeed, in my respectful view, only of relevance to the
main action contemplated in part B of the notice of motion to which
the interim interdict was made pending, and not to the interim
interdict that was sought in terms of part A. The first
requisite
for an interim interdict is that a
prima facie
right
must be established, even one that is open to some doubt. In
order to succeed in obtaining the interim reinstatement
order, Mr
Moyo was required to show - on the facts established through the
application of the principles set out in
Webster v Mitchell
1948
(1) SA 1186
(W) at 1189 and read with the
caveat
in
Gool v
Minister of Justice
1955 (2) SA 682
(C) at 688D-E – that,
having regard to the claims set out in part B of the notice of
motion,
prima facie
, although open to some doubt, he could
obtain an order for specific performance (reinstatement) at a trial
in due course.
[57]
The provisions of the PDA are relevant to Mr Moyo’s delictual
claim contemplated in part B of the notice of motion (see
Chowan
v
Associated Motor Holdings and others
2018 (4) SA 145
(GJ)), but
not to his contractual claim either for specific performance or
damages. There, his claim is based on a repudiation
of the
employment contract on the part of Old Mutual by its termination
thereof in terms of clause 24.1.1, which gave rise to his
right to
claim specific performance. Therefore, the questions, as far as
the contractual claim for specific performance or
for damages is
concerned, are whether Mr Moyo had the right, in terms of clause
25.1.1, to a disciplinary enquiry or pre-dismissal
arbitration in
circumstances where allegations of misconduct and a conflict of
interest in the NMT matter have been raised against
him, and whether
Old Mutual nevertheless had the right to terminate the employment
contract in terms of clause 24.1.1. Those
questions, in turn,
call for the interpretation of the relevant contractual provisions.
[58]
The interim interdict was not sought, nor could it have been granted,
to protect Mr Moyo’s right to reinstatement pending
the
institution of proceedings in which the remedies provided for in s
4(1) of the PDA is claimed, or proceedings in terms of s
159 of the
Companies Act in
which compensation in terms of
s 159(5)
is claimed.
The objectives of the PDA include the provision of ‘certain
remedies in connection with any occupational detriment
suffered on
account of having made a protected disclosure’
(s 2(1)(b)).
Section 4(1)
of the PDA provides that ‘[a]ny employee who has
been subjected, is subject or may be subjected, to an occupational
detriment
in breach of
s 3
, may - (a) approach any court having
jurisdiction, including the Labour Court . . . for appropriate
relief; or (b) pursue any other
process allowed or prescribed by any
law’. Proceedings under the PDA or a claim for
compensation in terms of
s 159(5)
of the
Companies Act are
not
contemplated in part B of the notice of motion. The interim
interdict was only sought to protect Mr Moyo’s right
to
reinstatement pending the finalisation of an action in which a
contractual, alternatively a delictual claim for pure economic
loss,
is claimed. It is, therefore, only Mr Moyo’s contractual
claim for specific performance that requires consideration.
[59]
It seems to me, with respect, that despite Mr Moyo’s express
disavowal of any reliance on his rights under the LRA, the
court
a
quo
viewed the interdict application through a labour-law prism,
i.e. the perceived unfairness of Old Mutual having raised allegations
of a conflict of interest and misconduct on the part of Mr Moyo, and
then proceeding instead to terminate the employment contract
on
notice in terms of clause 24.1.1 without first affording him a
hearing before the termination. However, there is no such
self-standing common-law right to fairness in employment contracts.
A right to be treated fairly when a contract is terminated
only
exists if it is expressly or impliedly incorporated in the contract.
[60]
In
South African Maritime Safety Authority v McKenzie
2010 (3)
SA 601
(SCA) paras 32-33 and 55-58, the Supreme Court of Appeal had
occasion to consider a contract of employment which provided for
termination
on notice. Wallis AJA held that a right to be
treated fairly upon termination could only be held to exist if it is
expressly
or impliedly incorporated in the contract and that such a
term should not be imported into a contract by developing the common
law. It was held that the contract in question had been
lawfully terminated on notice and there was no requirement for
fairness,
expressly or impliedly, incorporated into the contract.
[61]
In
Transman (Pty) Ltd v Dick and another
2009 (4) SA 22
(SCA)
para 18, any reliance on the LRA was also abandoned. It was
argued that the employee nevertheless was entitled to a
hearing
before the termination of his employment contract and that such
entitlement arose from an implied term of the contract.
But
Jafta JA held that there was a duty on him ‘not only to plead
the contractual claim but also to prove facts from which
the
contended tacit term could be inferred’, which ‘he has
failed to do and as a result there is no factual basis for
importing
into the employment agreement the term that he was entitled to a
hearing before the board terminated his employment’.
Accordingly, so it was held, ‘the court below erred in assuming
that his employment contract “was subject to an implied
term
that he would be afforded a fair hearing before he was dismissed”’.
[62]
No implied term of fairness has been pleaded in Mr Moyo’s
founding affidavit. Had he intended to rely upon such
a term,
it was his duty not only to plead the contractual term, but also to
establish facts from which such a term could be inferred.
The
court
a quo
, in my respectful view, erred insofar as it might
have assumed that the contract of employment was subject to an
implied term that
Mr Moyo would be afforded a hearing before the
employment contract was terminated by providing six months’
notice to that
effect. The questions whether Old Mutual was
contractually entitled to invoke the no-fault termination on six
months’
notice provision of the employment contract (clause
24.1.1) as it did, and whether clause 25.1.1 expressly affords Mr
Moyo a right
to a prior internal disciplinary enquiry or a
pre-dismissal arbitration before the invocation of the no-fault
termination, as I
have mentioned, depend on an interpretation of the
employment contract, to which I now turn.
[63]
Recently, in
Theron v Premier, Western Cape
[2019] ZASCA 6
,
Lewis ADP summarised the present-day approach to the interpretation
of contracts, thus:
‘
[19] It is as well at this
stage to refer to the principles dealing with the interpretation of
contracts. It is now clear that interpretation
is a unitary exercise,
which starts with the text to be interpreted, and considers it within
the contract as a whole, and in context.
As put most pithily by
Unterhalter AJ in
Betterbridge
(Pty) Ltd v Masilo & others NNO
2015 (2) SA 396
(GNP) para 8 (referring to the decision of this court
in
Natal Joint Municipal
Pension Fund v Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA)) ‘the interpretation of
language, including statutory language, is a unitary endeavor
requiring the consideration of
text, context and purpose’.
[20] Most recently, this court in
The
City of Tshwane Metropolitan Municipality v Blair Atholl Homeowners
Association
[2018] ZASCA 176
(
Tshwane
) para 59, referred
to the English approach set out by Lord Hodge in
Wood v Capital
Insurance Ltd
[2017] UKSC 24
para 10: ‘The court’s
task is to ascertain the objective meaning of the language which the
parties have chosen to express
their agreement. It has long been
accepted that this is not a literalist exercise focused solely on a
parsing of the wording of
the particular clause but that the court
must consider the contract as a whole and, depending on the nature,
formality and quality
of drafting of the contract, give more or less
weight to elements of the wider context in reaching its view as to
that objective
meaning. In
Prenn v Simmonds
[1971] 1 WLR 1381
(1383H1385D) and in
Reardon Smith Line Ltd v Yngvar Hansen-Tangen
[1976] 1 WLR 989
(997), Lord Wilberforce affirmed the potential
relevance to the task of interpreting the parties’ contract of
the factual
background known to the parties at or before the date of
the contract, excluding evidence of the prior negotiations.’
[21]
Navsa ADP continued, in
Tshwane
, (para 61):
‘
It is fair to say that this
court has navigated away from a narrow peering at words in an
agreement and has repeatedly stated that
words in a document must not
be considered in isolation. It has repeatedly been emphatic that a
restrictive consideration of words
without regard to context has to
be avoided. It is also correct that the distinction between context
and background circumstances
has been jettisoned. This court, in
Natal Joint Municipal
Pension Fund v Endumeni Municipality
. . . stated that the purpose of the provision being interpreted is
also encompassed in the enquiry. The words have to be interpreted
sensibly and not have an un-business-like result. These factors have
to be considered holistically, akin to the unitary approach.’
(Footnotes omitted.)’
[64]
Thus, a consideration of ‘text, context and purpose’ is
required. The employment contract must be considered
as a
whole, and clauses 24.1, 24.2 and 25.1 read together. The
employment contract was of limited duration (until retirement
or
agreed earlier retirement (clause 24.1.2)) but was terminable in
terms of subclauses 24.1.1 (by either r party providing six
months’
notice in writing), 24.1.3 (by Old Mutual on the basis of the grounds
regarded as valid in the LRA, with or without
the notice period of
six months), and 24.1.4 (for any other lawful and fair reason).
Subclause 24.1.4 does not state which
party can terminate for any
other lawful and fair reason or whether it would be on notice (I
assume it was by either party and
with or without notice, depending
on the reason).
[65]
Clauses 24.1 and 24.2 must also be examined with reference to each
other. Importantly, the provisions of clause 24.2
expressly do
not limit the provisions of clauses 24.1.1 to 24.1.4, and hence also
the right afforded to both parties to terminate
the employment
contract by providing six months’ notice. Clause 24.2
affords Old Mutual the right to summarily terminate
the employment
contract should Mr Moyo: be guilty of misconduct which would
entitle Old Mutual, in law and/or equity, to
summarily dismiss him
(clause 24.2.1); commit a material breach of contract and/or for
reasons recognised and accepted in law and
equity as justifying
summary termination of employment (clause 24.2.6); or be in breach of
any code or rules or guilty of any offence
under or in respect of any
financial services regulator (clause 24.2.7). Thus, on a plain
reading of clauses 24.1 and 24.2
with reference to each other, the
right of either party to terminate on six months’ notice (the
no-fault provision) is expressly
not limited by the separate right in
clause 24.2.1 of Old Mutual to terminate the contract summarily in
circumstances where Mr
Moyo was guilty of misconduct.
[66]
Clauses 24.1 and 24.2 must not only be examined with reference to
each other but also with reference to clause 25.1.
The latter
clause is critical to Mr Moyo’s case, and to the decision of
the court
a quo
. Mr Moyo asserts that clause 25.1.1
establishes for him a contractual right to, and an obligation upon
Old Mutual to hold,
an internal disciplinary enquiry or a
pre-dismissal arbitration in any circumstances where allegations of
misconduct have been
raised against him. It was Old Mutual’s
failure to comply with this contractual obligation which the court
a
quo
held constituted a repudiation on its part. Clause
25.1.1 provides that where allegations of misconduct and incapacity
have
been raised against Mr Moyo,
Old Mutual will be entitled
,
within its sole discretion
,
to decide whether or not to
hold
an internal disciplinary enquiry,
or
to proceed
instead via the pre-dismissal arbitration procedure contemplated in
s
188A
of the LRA. The clear and unambiguous wording
of this clause makes it plain that its purpose is to provide Old
Mutual with a discretion (and not an obligation) as to the holding of
an internal disciplinary enquiry or pre-dismissal arbitration
where
allegations of misconduct or incapacity have been raised. In
its nature, the provision is discretionary and not mandatory,
and the
decision whether or not any one of the two procedures should be
followed, and if so which one, is that of Old Mutual alone.
Nothing is stated in clause 25.1.1 about any right or entitlement on
the part of Mr Moyo. That the right to invoke clause
25.1.1 is
that of the employer, Old Mutual, alone, is further made plain by the
wording of subclause 25.1.2 in providing that ‘[s]hould
circumstances arise in respect of the Executive where
the Employer
chooses to invoke clause 25.1.1
, and pre-dismissal arbitration
proceedings must be arranged, the Employer shall decide in its sole
discretion as to whether
to utilise the Services of the Commission
for Conciliation, Mediation and Arbitration (the “CCMA”)
or an accredited
agency’. (My emphasis)
[67]
Mr Moyo’s interpretation that clause 25.1.1 affords him a
contractual right to a disciplinary hearing also militates
against
the longstanding precept of interpretation that every word must be
given a meaning. A court should not conclude,
without good
reason, that words in a single document are tautologous or
superfluous. (See
National Credit Regulator v Opperman &
others
2013 (2) SA 1
(CC) para 99;
African Products (Pty) Ltd
v AIG South Africa Ltd
2009 (3) SA 473
(SCA) para 13.) In the
present matter the words that I have italicised in the preceding
paragraph are not meaningless or superfluous.
Furthermore, Mr
Moyo’s interpretation would lead to the absurdity and
unbusinesslike result that the employer would be obliged
in every
instance where allegations of misconduct have been raised against the
executive, to hold either an internal disciplinary
enquiry or
pre-dismissal arbitration, even though the employer, for reasons of
its own, does not wish to pursue the matter any
further or to take
disciplinary action.
[68]
As I have already indicated, it is also clear from the wording of
clause 24.1.1 and of clause 25.1.1 that a termination of
the
employment contract by providing six months’ notice in terms of
subclause 24.1.1 does not trigger the provisions of clause
25.1.1.
Summary dismissal in circumstances where the executive is guilty of
misconduct is a separate ground of termination
provided for in clause
24.2.1, and does not limit the no-fault ground under clause 24.1.1.
The finding of the court
a quo
further implies that the giving
of reasons (conflict of interest and misconduct) when the employment
contract is terminated by providing
six months’ notice in terms
of clause 24.1.1, triggers the application of subclause 25.1.1.
I respectfully disagree.
There is also, as in the case of
clause 25.1.1, nothing in the wording of clause 24.1.1 that even
vaguely suggest that the employer
may not invoke the no-fault
termination by providing six months’ notice where allegations
of misconduct or incapacity have
been raised or where reasons - in
this instance the complete breakdown of trust and confidence in Mr
Moyo as the chief executive
of Old Mutual and allegations of
misconduct on his part - have been given in terminating the
employment contract on notice.
[69]
Such an interpretation would lead to the absurdity and unbusinesslike
result that only Mr Moyo would have the right to terminate
the
employment contract by providing six months’ notice where
allegations of misconduct or incapacity have been raised, and
not Old
Mutual. Furthermore, it is highly unlikely that the parties
would have intended that Mr Moyo was entitled to terminate
the
employment contract at any time during the duration of the employment
contract and under any circumstances by providing six
months’
notice, whereas Old Mutual only has that right in circumstances where
no allegations of misconduct or incapacity
have been raised.
(Compare
Theron
paras 22-24.)
[70]
Such interpretation would violate the objective meaning of the
language which the parties have chosen to express their agreement
and
undermine the apparent purpose each provision was designed to
achieve. The apparent purpose of clause 24.1.1 is to afford
each party the right to terminate the employment contract by
providing six months’ notice at any time during the duration
of
the employment contract that would otherwise endure until Mr Moyo
reaches normal or agreed earlier retirement age. Clause
25.1.1,
on the other hand, has a different purpose, which is to confer on Old
Mutual the right to decide, in its sole discretion,
whether an
internal disciplinary enquiry or pre-dismissal arbitration should be
held in circumstances where allegations of misconduct
or incapacity
have been raised. It is not obliged to take any disciplinary
action in such event.
[71]
Nothing in the evidence regarding the factual matrix in which the
employment contract was concluded and the subsequent conduct
of the
parties presented in the interdict application papers, detract from
the objective meaning of the language used by them in
the relevant
contractual provisions in question, and the apparent purpose each
provision was designed to achieve. As was
said by Fourie AJA in
G4S Cash Solutions (SA) (Pty) Ltd v Zandspruit Cash & Carry
(Pty) Ltd and another
2017 (2) SA 24
(SCA) para 13, -
‘
[w]hilst it is not for the
court to prescribe to litigants whether or not, or to what extent,
they should present evidence, it seems
to me that a party bearing the
onus in a dispute regarding the proper interpretation of a contract,
should bear in mind that to
simply rely on a linguistic
interpretation alone may not suffice to discharge the onus.
Therefore, if available, relevant
evidence regarding the factual
matrix in which the contract was concluded and the subsequent conduct
of the parties, should be
called in aid of the interpretative
process.’
[72]
The court
a quo
also held that
‘
Addendum “A” is
very clear that any conflict resulting from the position of the
Applicant as a non-executive director
of NMT would be dealt with by
the chairperson of the First Respondent and/or in terms of clause
25.2 of the contract. If
the Applicant was indeed conflicted,
the question is why was the matter not dealt with as described in
Addendum “A”?’
[73]
That provision of the protocols must also be read in context of the
employment contract and of the protocols as a whole.
The
protocols provide that the NGC functions as a sub-committee of the
Old Mutual board and shall have the principal oversight
and
responsibility for managing conflicts of interest and for applying
and enforcing the protocols. Furthermore, Mr Moyo
in terms of
the protocols, undertook to adhere to any determinations made by the
NGC from time to time as to the appropriate course
of action in
managing any conflict of interest. We know from the
uncontradicted evidence presented in the interdict application
that
the chairman of the Old Mutual board dealt with Mr Moyo’s
alleged conflict of interest in the NMT matter together with
the NGC
and the board. Any interpretation that the provision in
question requires that an issue related to conflict of interest
on
the part of Mr Moyo must be dealt with by employing the procedure
contemplated in clause 25.2, which provides for arbitration
by a
private organisation, is at odds with the clear language of that
provision, and is, in my respectful view, also incorrect.
[74]
The use of the expression ‘and/or’ in that provision
makes it clear that those words must in the context of that
provision
be read disjunctively and conjunctively. If that is done the
clause envisages three options in the event of any
conflict resulting
from Mr Moyo’s position as a non-executive director of NMT:
(a) the Old Mutual board chairman could
deal with such a conflict of
interest, presumably in such a manner as he sees fit; (b) the
conflict of interest could be
dealt with by way of arbitration by a
private organisation in terms of clause 25.2; or (c) a
combination of (a) and (b).
(See
Brink V Premier, Free State
2009 (4) SA 420
(SCA) para 12.)
[75]
I now turn to the reliance of the court
a quo
on the
Somi
and
Motale
judgments and its view that the
Gama
judgment is distinguishable. In
Somi
the employment
contract could be terminated by either party providing one month’s
notice to that effect or by the employer
for certain reasons.
It incorporated the employer’s code of conduct, comprising its
policies and guidelines.
The policy required the holding of a
‘performance enquiry’ before an employee could be
dismissed for poor work performance.
The employer commenced a
work performance enquiry as a result of the employee’s alleged
poor work performance, but then terminated
the employment contract
without notice prior to the completion of the enquiry. The
essence of the employee’s case was
that her employment contract
had been unlawfully terminated without notice and before the
completion of her performance enquiry.
[76]
Molahlehi J found that the employer, in terminating the employment
contract in the manner it did, failed to comply with its
obligations
arising from the contract: It did not terminate the employment
contract by providing one month’s notice
(the letter of
termination issued by the employer terminated the employee’s
employment with immediate effect). Instead,
the employer
terminated the employment contract on the basis of the provision that
permitted it to terminate the ‘contract
with notice should the
employer not meet the employer’s required performance standard’
without completing the required
enquiry before dismissing the
employee on the ground of poor work performance, and thus in breach
of the employment contract read
with the policy. Molahlehi J
accordingly found that the employer had repudiated the employment
contract ‘by terminating
it without first issuing her with a
written notice and by not affording her a proper and a full hearing
prior to the termination
of her employment’.
[77]
The present case is distinguishable: Here Old Mutual expressly
and unambiguously terminated the employment contract in
terms of its
clause 24.1.1 by providing six months’ written notice, and
elected not to terminate it in terms of either clause
24.1.3 or
24.1.4, notwithstanding its conclusion that there has been a complete
breakdown in trust and confidence as a result of
Mr Moyo’s
alleged conflict of interest in the NMT matter and that Mr Moyo’s
conduct ‘may properly be characterised
as gross misconduct’.
Furthermore, Mr Moyo in his founding papers in the interdict
application does not rely on a breach
by Old Mutual of any particular
provision of its disciplinary code.
[78]
In
Motale
, Gush J held the employer’s termination of an
employment contract based on an irretrievable breakdown of the
employment relationship
without convening a disciplinary hearing as
required by the contract, was unlawful. There, the employer (a
publisher) accused
the employee (an editor of a newspaper) of
publishing stories that had not been adequately cleared and generally
acting in an untrustworthy
manner and suspended him pending
disciplinary action. The employee requested the matter to be
determined at a disciplinary
hearing chaired by an independent
person, but the employer then summarily terminated the employment
contract based on an irretrievable
breakdown of the employment
relationship. The employer’s disciplinary code, which
afforded the employee the ‘right’
to appear before a
formal disciplinary inquiry if he was accused of misconduct, formed
part of the employment contract.
[79]
Gush J rejected the employer’s contention that its decision to
terminate the employment contract had nothing to do with
misconduct
but was because of the employer’s view that the employment
relationship had broken down and that the parties were
incompatible.
It was found on the facts of that case that the employer concluded,
in the absence of an enquiry, that the
employee was guilty of
misconduct and, what had led to the conclusion of a breakdown of the
trust relationship was the alleged
misconduct of the employee.
Motale
was not concerned with a provision similar to clause 24.1.1 of the
employment contract
in
casu
,
which affords either party the right to terminate the contract by
providing six months’ notice nor with a provision similar
to
clause 25.1.1, which affords the employer the right, within its sole
discretion, to decide whether or not an internal disciplinary
enquiry
or pre-dismissal arbitration should be held where allegations of
misconduct have been raised.
[80]
Gama
, a case which I consider more relevant to the present
matter, was preceded by
Gama v Transnet SOC Limited and Others
(J3701/18) [2018] ZALCJHB (19 October 2018) (2018 JDR 1811
(LC)). There, in terms of his contract of employment, which
incorporated
Transnet’s disciplinary code, the employee was
appointed as the group chief executive of Transnet. The
Transnet board,
through its chairperson, served its then group chief
executive with a notice to suspend him from duty and he, through his
appointed
attorney, made representations why he should not be placed
on suspension. He was not suspended, but instead served with a
notice advising him to show cause why his employment contract should
not be terminated in terms of a provision similar to clause
24.1.1 of
the employment contract
in casu
(clause 15), and that it would
be terminated if no cause was shown. Aggrieved by the threat of
imminent termination of his
employment, he approached the labour
court, Johannesburg, seeking declaratory relief, a final interdict
and ancillary relief.
Because the parties agreed in terms of
the employment contract that any dispute thereunder shall be decided
by arbitration, Moshoana
J stayed the application pending a referral
to arbitration.
[81]
In the interim, the Transnet board invoked the termination on notice
provision of the employment contract and terminated it
on six months’
notice due to a breakdown of trust and confidence. His salary
was to be paid in lieu of notice as he
was not expected to work out
his notice period. Its then group chief executive officer again
approached the labour court,
Johannesburg, seeking,
inter alia
,
an interim interdict reinstating him in the position of group chief
executive of Transnet pending the outcome of the arbitration
proceedings, contending that the Transnet disciplinary code formed
part of his contract of employment, and, in terms thereof,
allegations of misconduct must be investigated and the matter must be
referred to a disciplinary hearing. As the allegations
of
misconduct raised against him were not referred to a disciplinary
hearing, he contended, there was a breach of his employment
contract,
which breach he rejected and specifically asked for specific
performance.
[82]
The labour court (Prinsloo J) found that, in order to establish a
prima
facie
right
for an interim interdict, the then group chief executive was required
to show that the notice of termination was unlawful
and that an
arbitrator will grant specific performance by reinstating him in his
post, which he had failed to do. It was
found that Transnet’s
disciplinary code regulated dismissal for misconduct, not termination
on six months’ notice for
a breakdown of trust and confidence
in the employee in his capacity as the group chief executive of
Transnet. Termination on notice
was permitted in terms of clause 15
of the contract of employment. The termination of the employment
contract, therefore, was not
shown to be unlawful.
[83]
Old Mutual’s written notification of termination on six months’
notice did not require any justification.
There is no
restriction placed on the grounds upon which the employment contract
could be terminated in terms of clause 24.1.1.
(See
Lottering
para 17.) The fact that Old Mutual furnished its motivation or
reasons for terminating it in terms of clause 24.1.1, in my view,
did
not contaminate the termination or the notification thereof. On
a proper interpretation of the written notice, it clearly
and
unambiguously conveyed to Mr Moyo that the contract of employment was
terminated in terms of clause 24.1.1 upon six months’
notice.
The notice, therefore, complied with the requirement of the
employment contract. The motivation or reasons furnished
were
superfluous.
[84]
In the circumstances I therefore respectfully disagree with the court
a
quo’s
conclusion that Mr Moyo has established
that Old Mutual repudiated the contract when terminating it by
providing him with six months’
written notice to that effect.
A party to a contract repudiates a contract where it ‘without
lawful grounds, indicates
to the other party in words or by conduct a
deliberate and unequivocal intention no longer to be bound by the
contract’:
Datacolor International (Pty) Ltd v
Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001 (2) SA 284
(SCA) para 16. Mr Moyo
has not shown a
prima facie
right to a prior hearing in
circumstances where his employment contract was terminated upon the
provision of six months’ notice
in terms of clause 24.1.1
thereof. An act of termination in terms of clause 24.1.1 is a
unilateral act permitted by the employment
contract and does not
constitute a breach or repudiation thereof, but an exercise of a
right conferred by the contract.
(See
McKenzie
;
Gama
para 42;
Joni v Kei Fresh Produce Market
(2018) 39
ILJ 2405 (ECM) para 11;
Lottering & others v Stellenbosch
Municipality
(2010) 31 ILJ 2923 (LC) para 19.)
[85]
Bearing in mind the special relationship of trust and confidence that
should exist between the chief executive of Old Mutual
and its board,
this case, in my view, is also not a case where it has been
demonstrated on the interdict application papers that
Mr Moyo has a
realistic prospect of obtaining specific performance (reinstatement)
in due course. In our law, specific performance
is a primary and not
a supplementary remedy:
Santos Professional Football Club
(Pty) Ltd v Igesund & another
2003 (5) SA 73
(C). It is
an ordinary remedy to which in a proper case a plaintiff is
entitled. The court will as far as possible
give effect to a
plaintiff’s choice to claim specific performance but has the
discretion in a fitting case to refuse and
to leave it to the
plaintiff to claim damages. Each case must be judged in the
light of its own circumstances. (See
Haynes v King Williams
Town Municipality
1951 (2) SA 371
(A) at 378-379.)
[86]
The practice adopted by our courts in the past was not to enforce
employment contracts by way of an order for specific performance.
In cases of unlawful dismissal, an employee’s common law remedy
was traditionally confined to a claim for damages.
The reason
for adopting that practice, according to Innes CJ in
Schierhout v
Minister of Justice
1926 AD 99
at 107, was probably the same as
the reason why English courts did not decree specific performance in
such cases, which was-
‘
. . . the inadvisability of
compelling one person to employ another whom he does not trust in a
position that imports a close relationship;
and the absence of
mutuality, for no Court could by its order compel a servant to
perform his work faithfully and diligently.’
[87]
In
Gründling v Beyers and Others
1967 (2) SA 146
(W) at
146F-G, Trollip J cited the following passage by Knight Bruce L.J. in
Johnson v Shrewsbury and Birmingham Railway Company,
(1853) 43
E.R. 358
, as ‘most apposite’ to the facts of that case:
‘
We are asked to compel one
person to employ against his will another as his confidential
servant, for duties with respect to the
due performance of which the
utmost confidence is required. Let him be one of the best and
most competent persons that ever
lived, still if the two do not
agree, and good people do not always agree, enormous mischief may be
done.’
In
Gründling
, the general secretary of the Mine Workers’
Union had been summarily dismissed for alleged inefficiency.
There was
considerable bad blood between him and the union’s
executive. He also made various allegations of bad faith and
malice
against the executive committee. In those circumstances,
Trollip J held that, even if specific performance was available as
a
remedy in principle, that was a clear case where it should not be
granted.
[88]
In
National Union of Textile Workers & others v Stag Packings
(Pty) Ltd & another
1982 (4) SA 151
(T), a full-court held
that the practice of the court in allowing only the particular remedy
of damages to the wrongfully dismissed
employee had not been elevated
to a rule of law to the effect that such contracts could be
unilaterally terminated so that under
no circumstances could they be
specifically enforced. The considerations referred to in
Schierhout
‘are practical considerations and not legal
principles’. It was further held that-
‘
. . . the approach to the
application of the discretion in respect of specific performance laid
down in
Hayne’s
case
is equally applicable to the case of the wrongful dismissal of an
ordinary servant.
This does not mean that the
considerations mentioned in
Schierhout’s
case why in
such case an order for specific performance should generally speaking
not be granted, should be disregarded. They
are weighty indeed
and in the normal case they might well be conclusive. But that
is a far cry from saying that the court
should therefore close its
eyes to other material factors and refuse to evaluate them.’
[89]
MSM Brassey ‘
Specific Performance – A New Stage for
Labour’s Lost Love
’ 1981 (2) ILJ 57 at 62, points out
that modern employment relationships are not necessarily
characterised by closeness or
confidentiality so that, on proper
facts, reinstatement might be appropriate: ‘To talk of a
confidential relationship
between a corporate conglomerate and its
workmen on the shop floor is largely meaningless.’
[90]
Examples of cases where orders for specific performance of contracts
of employment will, in the exercise of the court’s
discretion,
not normally be granted are
Masetlha v President of the Republic
of South Africa
[2007] ZACC 20
;
2008 (1) SA 566
(CC),
Moyane v Ramaphosa
[2019] 1 All SA 718
(GP) and
Gama v Transnet SOC Limited
((J370/18) 22 November 2018). In
Masetlha
, the head
of the National Intelligence Agency had been dismissed by the
President. Moseneke DCJ said this (para 88):
‘
In my view, even if the
contract of employment were terminated unlawfully, Mr Masetlha would
not be entitled to reinstatement as
a matter of contract.
Reinstatement is a discretionary remedy in employment law which
should not be awarded here because
of the special relationship of
trust that should exist between the head of the Agency and the
President.’
[91]
In
Moyane
, the President terminated the employment of the then
Commissioner for the South African Revenue Service. In
dismissing the
application in which the then Commissioner of SARS
essentially sought interim reinstatement, Fabricius J said the
following (para
36):
‘
The primary relief that
applicant seeks is reinstatement. He has not demonstrated and
cannot demonstrate such a right.
It is a discretionary remedy
even in Employment Law, which does not even apply on the present
facts. However, even if applicant
was able to demonstrate that
his contract of employment was terminated unlawfully, an order for
reinstatement would not automatically
follow in instances where it is
firstly discretionary, and secondly, where a special relationship of
trust exists between the employer
and employee. In the present
matter a special relationship of trust must exist between the
President and the Commissioner
of SARS. The President must
implicitly trust the particular Commissioner that he will properly,
conscientiously and lawfully
carry out the functions assigned to him
under the provisions of section 9 of the SARS Act. It is clear
in the present instance,
that this relationship has broken down
irretrievably.‘
[92]
In
Gama
, as I have mentioned, the Transnet board terminated
the employment contract of its group chief executive on six months’
notice
due to a breakdown of trust and confidence between him and the
board. Prinsloo J said this (para 47):
‘
In my view specific performance
in the form of re-instatement is not appropriate in circumstances
where there is a breakdown of
trust between an executive manager of a
company and its Board. Contractual damages or alternative
remedies are more appropriate
in those circumstances.’
[93]
Mr Moyo’s position as chief executive of Old Mutual requires
that a special relationship of trust and confidence exists
between
him, the chairperson and the board, that they are able to work
together as an effective and integrated team, and that interpersonal
compatibility forms an inherent requirement of his appointment as the
chief executive. These requirements were expressly
recorded in
the contract of employment. (See clauses 3 and 12 referred to in
paras 4 and 5
supra
.) The requisite relationship of
trust and confidence, objectively, no longer exists between the Old
Mutual board and Mr Moyo,
to which he was required to report,
irrespective of who is to blame for its breakdown. That is but
one of the issues for
the trial court to decide in the fullness of
time.
[94]
The board maintains that it lost trust and confidence in Mr Moyo
because of the conflict of interest it maintains he had in
the NMT
matter and his failure to disclose the conflict of interest to the
Old Mutual board chairperson in breach of clause 14.1
of the
employment contract and the protocols, or to the NGC in terms of the
protocols. It also maintains that Mr Moyo acted
against the
interests of Old Mutual in the media statements he made after his
suspension, and that such statements brought Old
Mutual into
disrepute. Mr Moyo, on the other hand, has lost trust and
confidence in the Old Mutual board chairman and non-executive
directors. He accuses them of victimisation and ‘unlawful
reprisals’ against him, of having acted with ulterior
motives
in their handling of the NMT matter, and the board chairperson of
having committed ‘concerning improprieties’.
He
accuses the non-executive directors of having been incapable of
exercising independent judgment on the matter concerning himself,
of
having allowed themselves to be ‘bullied’ by the
chairperson to reach the conclusion that there has been a breakdown
in trust and confidence and he seeks the chairman and non-executive
directors to be declared delinquent directors in terms of
s 162
of
the
Companies Act. There
is now ongoing litigation between the
parties.
[95]
Mr Moyo, in his application for an interim interdict, therefore, has
failed to establish the first requisite for an interim
interdict; a
prima facie
right to reinstatement that requires protection
pending the finalisation of the action in which he claims
reinstatement as a contractual
remedy. The court
a quo
should not have granted the interim interdict reinstating him in
the position of chief executive of Old Mutual and restraining Old
Mutual from appointing any other person to that position.
[96]
Mr Moyo contends that the decision of the court
a quo
is not
appealable. The issue whether its ‘decision’ could have
been appealed irrespective of the leave granted is a
preliminary
question in any appeal but it is one in the context of this case and
in the light of my conclusion that can best be
discussed at this late
juncture. In
Cronshaw and another v Fidelity Guards Holdings
(Pty) Ltd
[1996] ZASCA 38
;
1996 (3) SA 686
(A) at 689B-D, Schutz JA said that-
‘
[t]he purpose of leave is to
limit appeals to those that have reasonable prospects of success:
Westinghouse Brake &
Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd
1986
(2) SA 555
(A) at 561D-E. In itself the grant of leave does not
prejudge the appeal. Where appealability is the issue on appeal
(as it was in this case) the same applies. Therefore, to say
what is trite, the fact that leave has been granted on a question
of
appealability (even by this Court) does not mean that the decision in
respect of which leave is given is indeed appealable.
Leave is
entirely extraneous to the enquiry now before us, which is whether
the grant of an interim interdict is appealable.’
The
fact that the court
a quo
granted leave to appeal does not
dispose of the question of appealability. (Also see
FirstRand
Bank Ltd t/a First National Bank v Makaleng
[2016] ZASCA 169
para
15.)
[97]
Although the interlocutory order made by the court
a quo
does
not meet the requirements for appealability laid down by the Supreme
Court of Appeal in
Zweni v Minister of Law and Order
1993 (1)
SA 523
(A) - the order must be final in effect and not susceptible to
alteration; it must be definitive of the rights of the parties,
granting definite and distinct relief; and it must dispose of at
least a substantial portion of the relief claimed - those
requirements,
as Hefer JA said in
Moch v Nedtravel (Pty) Ltd t/a
American Express Travel Service
1996 (3) SA 1
(A) at 10F, do ‘not
purport to be exhaustive or to cast the relevant principles in
stone.’ And in
Cipla Agrimed (Pty) Ltd v Merck Sharp
Dohme Corporation and others
2018 (6) SA 440
(SCA) para 37,
Gorven AJA referred to the
Zweni
requirements for
appealability and said that ‘those three requirements do not
constitute a closed list. This was made
plain by the use of the
words ‘as a general principle’’.
[98]
The approach to the appealability of interlocutory orders that has
been taken by our appellate courts for years now has been
increasingly flexible and pragmatic. (See for example
S
v Western Areas
2005 (5) SA 214
(SCA) paras 25-26;
National
Director of Public Prosecutions v King
2010
(2) SACR 146
(SCA) paras 50-51;
Philani-Ma-Afrika
v Mailula
2010
(2) SA 573
(SCA) para 2;
Government
of the RSA v Von Abo
2011 (5) SA 262
(SCA) para 17;
Phillips
v Reserve Bank and others
2013
(6) SA 450
(SCA) para 28;
Nova
Property Group Holdings Ltd and others v Cobbett
2016
(4) SA 317
(SCA) paras 8-11;
Celliers
NO and Others v Ellis and Another
[2017]
ZASCA 13
para 20.) But an order that is in the form of an
interim interdict which operates pending the outcome of an action
mentioned
in the order itself, as in this case, is ordinarily not
appealable. (
African
Wanderers Football Club (Pty) Ltd Wanderers Football Club
1977
(2) SA 38
(A);
Cronshaw
at 690B and 690H-691G;
Cipla
para 37;
S
v S and Another
2019
(6) SA 1
(CC) paras 46-47.)
[99]
The ratio for the general rule against the appealability of interim
interdicts was concisely stated by Gorven AJA in
Cipla
(para
37) to be the following:
‘
[45] The need to develop a
policy position arises from the nature of interim interdicts.
They are temporary measures designed
to protect rights before a final
determination can be made. Since most of these are granted by
way of application, it is
not ordinarily possible to resolve the
competing contentions. Thus ‘a necessary imperfect
procedure’ developed.
This requires the establishment of
a prima facie right, although open to some doubt, as opposed to a
clear right. It also
attempts to factor in the likely resultant
prejudice in assessing the balance of convenience. The stronger
the prospects
of ultimate success, the less the balance of
convenience counts. It also allows for a reconsideration of the
interdict if
circumstances warrant it. As soon as the court
makes a final determination, the interim interdict is discharged.
This
is also why a fresh application for an interim interdict pending
an appeal can ordinarily be brought. In
Knox
D’Arcy Ltd and Others v Jamieson and Others
[1996] ZASCA 58
;
[1996
(4) SA 348
(A) ([1996]
3 All SA 669
;
[1996] ZASCA 58)
at 360A-B] EM
Grosskopf JA referred to the practical difficulty raised in
Cronshaw
that an appeal against the
grant of an interim interdict would often be inconsistent with the
very purpose of the remedy.
[46] Prejudice which does not affect
the issues in the suit is dealt with under the rubric of the balance
of convenience in an application
for an interim interdict.
Cronshaw
referred to a court’s discretion to impose
reasonable conditions such as an undertaking to be liable in damages
if it emerges
that the interdict should not have been granted.’
(Footnotes
omitted.)
[100]
The assessment of the requisite balance of convenience – the
extent of the interim harm to the applicant, if final relief
is in
due course granted, weighed against the interim harm to the
respondent, if final relief is refused – lies within the
discretion of the court from which the interim interdict is sought
and is on the authorities rarely appealable. In
Cronshaw
at 691B-F, Schutz JA said this:
‘
There is a further explanation
of a rule that allows such prejudice [the prejudice that is suffered
by the subject of an interim
interdict] without prompt appeal.
It is that the prospective harm is one of the factors that must be
judged by the court
of first instance in weighing the balance of
convenience: see
African
Wanderers
(
supra
at 48H). This is a
responsible and often difficult balancing, premised as it is on the
distinct possibility that the order
be wrongly granted, because of
the incomplete information available to the Judge, and sometimes the
haste with which such matters
have to be dealt with. If the
grant of an interim interdict were appealable and leave were to be
granted (the test being
reasonable prospects of success) the interim
order would be stayed. Such a stay would be destructive of the
main object of
an interim interdict – to maintain the
status
quo
pending the final
determination of the main case.
The stay may in its turn lead to what
is called an application for leave to execute (to put the order in
operation again) where
considerations similar to those already
weighed under the balance of convenience would have to be
re-assessed. The court
of first instance would then be required
to reach a decision, on imperfect information, a second time, all
with regard to the interim
situation. If it be postulated that
leave to appeal can and has been granted, the appeal court would have
to reconsider that
situation without being in a position to reach a
final decision. From a practical point of view it seems
preferable that
the merits of the interdict be left for final
determination at the trial, and that the interim relief, to which the
balance of
convenience is relevant, be considered once only.
The net effect of a contrary rule,
allowing an appeal against the grant of interim orders, could be the
undermining of a necessarily
imperfect procedure, which is
nonetheless usually best designed to achieve justice.’
[101]
Both
Cronshaw
and
Cipla
, on which much reliance is
placed by Mr Moyo, were concerned with the question whether an
interim interdict (in
Cronshaw
in support of a two-year
restraint of trade and in
Cipla
in support of patent
infringement), although interim in form, was final in effect since
the restraint period in
Cronshaw
will have run its course and
the patent in
Cipla
will have expired by the time the main
action comes to be considered. The Supreme Court of Appeal in
each instance rejected
the argument and held that ‘final in
effect’ means that an issue in the suit has been affected by
the order such that
the issue cannot be revisited either by the court
of first instance or by the court hearing the action. (
Cronshaw
at 690B and 690H-691G and
Cipla
para 47.)
[102]
The present appeal does not raise the question of what is meant by
‘final in effect’ in distinguishing between
interlocutory
and final interdicts, as was the case in
Cronshaw
and
Cipla
.
Old Mutual accepts that the interim interdict does not meet the
requirements laid down in
Zweni
.
It contends, however, that it is in the interests of justice that the
interim order reinstating Mr Moyo in his position as the
chief
executive of Old Mutual and restraining Old Mutual from appointing
anyone else in that position pending the determination
of the main
action, be appealable.
[103]
Although it is generally considered not in the interests of justice
to permit an appeal against an interim interdict since
it will defeat
the interim nature of the order and undermine ‘a necessarily
imperfect procedure, which is nevertheless usually
best designed to
achieve justice’, it is now settled that there are limited
circumstances where the interests of justice
dictate that an interim
interdict be appealable. (See for example
Cipla
para
37,
Department
of Home Affairs and another v Islam and others
[2018] ZASCA 48
para 10 and
Velocity
Trade Capital (Pty) Ltd v Quicktrade (Pty) Ltd and others
[2019]
4 All SA 986
(WCC), para 30
et
seq
.
Also see the Constitutional Court judgments in cases such as
S
v S
paras
46-47,
Tshwane
City v Afriforum and Another
2016 (6) SA 279
(CC) para 40,
Children’s
Institute v Presiding Officer, Children’s Court, Krugersdorp,
and Others
2013 (2) SA 620
(CC) para 16 and
National
Treasury and Others v Opposition to Urban Tolling Alliance and Others
2012
(6) SA 223
(CC) para 25, although it should be borne in mind that the
operative standard for determining whether leave to appeal should be
granted by the Constitutional Court is the interests of justice.)
In deciding what is in the interests of justice, each case
has to be
considered in the light of its own facts. (
Member
of the Executive Council for Development and Planning and Local
Government, Gauteng v Democratic Party and others
1998
(4) SA 1157
(CC), para 32.) In other words, it is a
fact-specific enquiry. (
S
v S
para
47.)
[104]
I am of the view that the present matter is one of those exceptional
cases where the interests of justice demand that the
interim
interdict be appealable. The fact that it is not definitive of
the rights about which the parties are contending
in the main action
and does not dispose of any relief claimed in respect thereof,
although a relevant and important consideration,
cannot be decisive
and the determining factor in this instance. The interim
interdict should not have been granted in the
first place by reason
of a failure to meet the first requirement for the granting of an
interim interdict. (
Tshwane City
para 41;
Phillips
,
para 28.) The interdict, although interim, has an immediate and
substantial effect. The irreparable harm which Old
Mutual –
one of the oldest and largest companies in our country with more than
30 000 employees - its shareholders, employees
and other stakeholders
stand to suffer if the interim interdict is allowed to stand,
requires no imagination or elucidation.
The reality of the
order is that Old Mutual is forced to live with its adverse effects
as long as the main action is pending or
remains inconclusive by
reason of appellate processes. It is forced to be governed by a
chief executive and a board, to whom
the chief executive is supposed
to report and obliged to maintain its ongoing trust and confidence,
who have lost complete trust
and confidence in one another and who
are involved in ongoing litigation. The interests of justice in the
particular circumstances
of this case demand that the order should be
corrected forthwith before the proceedings have run their full course
and before it
has any further adverse consequences.
[105]
In the result, the following order is made:
(a)
The appeal
is upheld with costs, including those of two counsel for the first
and second appellants and of two counsel for the third
to sixteenth
appellants.
(b)
The order
of the court
a
quo
is
set aside and substituted with the following order:
The
application is dismissed with costs, including those of two counsel.
P.A.
Meyer
Judge
of the High Court
I
agree.
K.E.
Matojane
Judge
of the High Court
I
agree.
R.M.
Keightley
Judge
of the High Court
Heard:
4-5 December 2019
Judgment:
14 January 2020
Counsel
for 1
st
and 2
nd
appellants: Adv IV Maleka SC
(assisted by Adv N Mayet-Beukes)
Counsel
for 3
rd
to 16
th
appellants: Adv GJ Marcus SC
(assisted by Adv MD Stubbs)
Instructed
by: Bowman Gifillan Inc., Sandton
Counsel
for 1
st
respondent: Adv DC Mpofu SC (assisted by Adv TN
Ngcukaitobi and Adv S Gaba)
Instructed
by: Mabuza Attorneys, Houghton