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[2010] ZAWCHC 202
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Potgieter v George Municipality (14/09) [2010] ZAWCHC 202; (2011) 32 ILJ 104 (WCC) (23 September 2010)
REPUBLIC Of SOUTH
AFRICA
IN THE
HIGH
COURT
OF SOUTH AFRICA
(EASTERN CIRCUIT LOCAL
DIVISION)
CASE NO: 14/09
In the matter between:-
CHRISTIAAN WILHELMUS
POTGIETER
….......................................................
Plaintiff
and
GEORGE MUNICIPALITY
…............................................................................
Defendant
JUDGMENT DELIVERED ON 23
SEPTEMBER 2010
ZONDI, J
Introduction
[1] The plaintiff sues
the defendant for the payment of the sum of R1 398 225-50 for damages
he allegedly suffered as a result of
repudiation of the contract of
employment by the defendant.
[2] The defendant defends
the plaintiffs claim contending that its termination of the
plaintiffs employment contract did not constitute
repudiation. It
asserts that the plaintiff was employed on a fixed term contract
whose life was linked to a particular event and
the contract ended
when the event occurred.
Pleadings
[3] The plaintiff alleges
in the particulars of claim, firstly, that in terms of the employment
contract he was employed by the
defendant as a manager in the office
of the defendant's executive mayor, secondly that his employment with
the defendant was subject
to the provisions of the
Local Government:
Municipal Systems Act, 2000
and the Municipal Finance Management Act,
2003, thirdly, that the plaintiffs appointment was for a fixed term
linked to the term
of the office of the executive mayor, who at that
stage was Alderman B Petrus ("Petrus") and finally that the
defendant
repudiated the contract when it terminated his employment.
[4] In support of the
case based on the premature termination of the contract of employment
by the defendant, the plaintiff alleges:
“
5. Dit was te
alle relevante tye binne die kennis en vooruitskouing van die partye
tot die ooreenkoms dat die ampstermyn van die
Uitvoerende
Burgemeester 'n periode van vyf jaar is vanaf die datum van sy
verkiesing.
6.
Dit
was ook te alle relevante tye die bedoeling van die partye tot
hierdie ooreenkoms dat Eiser se kontrak vir dieselfde vyf jaar
periode sou duur en dat Eiser die Bestuurder sou wees in die kantoor
van die ampsbekleer naamlik die Uitvoerende Burgemeeste."
[5] The plaintiff
accordingly contends that the defendant repudiated the contract by
terminating his employment before the expiry
of the five year period.
[6] The defendant admits
that it concluded the contract of employment with the plaintiff and
that it terminated it on 07 April 2008.
[7] The defendant,
however, denies that it unlawfully terminated the contract of
employment. The defendant avers that the plaintiff
was employed on a
fixed term contract in terms of which the plaintiffs fixed term
contract of employment was linked to a particular
event, namely the
term of office of Petrus as an executive mayor, and that when that
event occurred, the plaintiffs contract came
to an end. In the
alternative, the defendant pleads that it terminated the contract of
employment because of the plaintiffs fraudulent
failure to disclose
at the time of his employment that he had a criminal record relating
to fraud.
Statement of the
issues
[8] At the commencement
of the trial the parties agreed that the issue of quantum of the
claim should be separated from the merits
in terms of Rule 34(3) of
the Uniform Rules of Court and such was made an order of Court.
[9] In consequence of the
agreement, only two issues remained for determination, namely the
correct interpretation of the contract
of employment and the question
of cancellation based on the plaintiffs fraudulent non-disclosure.
The Evidence
[10] Both the plaintiff
and the defendant testified.
[11] The essence of the
plaintiff s evidence is that on or about 10 October 2007 he was
employed by the defendant as a manager in
the office of the executive
mayor. The vacancy for which the plaintiff applied had been
advertised in a local newspaper The advertised
position was a
"five
year contract appointment linked to the term of the office of the
current executive mayor".
[12] In response thereto
the plaintiff completed and submitted to the defendant the necessary
application forms for the vacant position.
[13] It is common cause
that the application forms
inter
alia
required
of the plaintiff to disclose if he was ever convicted of a criminal
offence. The plaintiff answered the question in the
negative. He
stated:
"Geen
rekord.
Verwys definisie vervat in wetgewing afdeling: 47 subafdeling(s)(1)
van Artike! 158 van die Grondwet Wet 108 van 1996."
[14] The plaintiff
believed that his record of a previous conviction had expired as it
was more than 20 years old. When the plaintiff
completed the
application forms he knew that it was important for him to answer all
the questions honestly and that furnishing
false information could
constitute a basis for his dismissal.
[15] It was for this
reason that during the interview which he subsequently held with the
defendant's officials, he mentioned that
he had a criminal record for
cheque fraud which occurred m 1988 and for which he was sentenced to
5 years imprisonment
[16] After the interview
the plaintiff was informed by the defendant that he had been a
successful candidate. The defendant offered
him the position. The
plaintiff accepted the defendant's offer and thereafter concluded a
contract of employment with the defendant.
He commenced his duties on
or about 15 October 2007. In terms of accountability the plaintiff
reported to the Assistant Municipal
Manager for administrative
purposes and politically to the executive mayor.
[17] In terms of clause 2
of the contract the plaintiffs employment was for a fixed term and
linked to the term of office of the
executive mayor, Alderman B
Petrus, and would terminate a month after the end of [Petrus'] term
of office. The plaintiff testified
that Petrus was appointed as an
executive mayor on 14 March
2006 and that at the time
of his employment Petrus had been in office for about one and a half
years.
[18] The plaintiff
further testified that everything went well in his work until 1 April
2008 when the defendant informed him of
its intention to terminate
his contract of employment in terms of clause 2.3 of the contract
'in
the light of the fact that Alderman Basil Petrus' term of office was
terminated on 07 March 2008"
and
a new mayor had been elected on 31 March 2008.
[19] Following upon his
representation to the defendant the plaintiffs date of termination
was extended from 30 April 2008 to 31
July 2008.
[20] In the meantime, on
8 May 2008 the plaintiffs attorney on his instruction wrote to the
defendant expressing dissatisfaction
at the defendants decision to
terminate his services and threatened the defendant with legal action
unless it changed its decision.
[21] In response thereto
the defendant wrote to the plaintiffs attorneys
inter
alia
stating:
"Dit was dan juis
die bedoeling van die Raad om 'n dienskontrak met 'n kliSnt te sluit
was saamval met die normale termyn van
die Uitvoerende Burgemeester
synde vir vyf (5) jaar, maar sou die vermelde ampstermyn voortydig
beeindig word, u klient se dienskontrak
outomaties tot 'n einde kom
aangesien 'n onhoudbare situasie sal ontstaan as die nuwe verkose
Uitvoerende Burgemeester sy/haar
eie Bestuurder in sy/haar kantoor
wit aanstel".
[22] During cross
examination by
Mr
Coetsee
on
behalf of the defendant, the plaintiff testified that it was his
understanding that his term of office as a manager was commensurate
with the normal municipal general elections which take place in five
year cycles and that he had expected to be employed in that
position
until the next general elections in 2011. He. however, conceded that
his contract makes no mention of the 5 year period.
It merely states
that he was employed on a fixed term contract linked to the term of
office of the executive mayor B Petrus. However,
he did not expect
that Petrus would be removed from office before the end of the five
year term.
[23] The plaintiff had
expected to remain in his position even if the executive mayor
vacated his office before the end of his term
of office as he was
appointed to manage the office of the executive mayor and not the
person.
[24] Mr Cecil Africa
(Africa) testified for the defendant. At the time of the plaintiff's
employment Africa was employed by the
defendant as a municipal
manger. He concluded the contract of employment with the plaintiff on
behalf of the defendant during October
2007.
[25] Africa was also
present at the plaintiffs interview He noted down the questions which
were put by the panelists to the plaintiff
and the latter's answers
thereto. Although at the time of the interview Africa knew the
plaintiff as a person, he was not aware
that the plaintiff had a
criminal record.
[26] With reference to
the notes he took down during the plaintiffs interview (exh A78-83),
Africa testified that the following
question was put to the
plaintiff:
"Het u enige
geraamtes in die kas of het u in u toopbaan enige eitiese of morele
oordeelsfout begaan?"
[27]
The plaintiffs answer was
that he had a criminal conviction for fraud which was overturned on
appeal. In this regard Africa referred
to a copy of the transcript of
the plaintiffs interview (exh.B16) in which the plaintiff stated:
"Eventueel is ek
wet skuidig gevind. Ek het geappeileer en my appeal het
geslaag..."
[28] Africa testified
that based on the plaintiffs answer he took a decision to recommend
the plaintiff for employment which he
would not have taken had he
known of the true nature and extent of the plaintiffs criminal
convictions.
[29] With regard to the
nature of the plaintiffs appointment, Africa testified that the
plaintiffs appointment as a manager was
for a fixed period, which was
linked to a term of office of a politician (the executive mayor) the
plaintiff was employed to serve
under. He stated that it was an
appointment under
section 57
of the
Local Government: Municipal
Systems Act, 2000
. Africa testified that the politician for whom the
plaintiff was appointed was an executive mayor, Mr Basil Petrus,
whose term
of office was 5 years from the date of his appointment
after the municipal general elections. In this case the executive
mayor
was from the Democratic Alliance (DA) and at the time of his
appointment the plaintiff was a Democratic Alliance ward councillor.
[30] In contextualising
the employment of the plaintiff Africa testified that it is the
practice to link the term of employment
of the manager to the term of
office of the executive mayor for whom the manager is employed.
Africa explained the reason for doing
so. He said the executive mayor
is a political appointee who gets replaced if a different political
party wins the municipal general
elections or the control of the
council of the relevant municipality When a new executive mayor gets
appointed he employs his own
manager to manage his office. Africa
stated that it was on the basis of these considerations that the
defendant concluded a fixed
term contract of employment with the
plaintiff.
Legal Principles
[31] The question is
whether the defendant was entitled to terminate the plaintiffs
contract employment when it did in April 2008
and on the basis of the
two grounds advanced by it.
[32] I wish to point out
from the outset that the plaintiff sues for damages arising out of an
alleged repudiation of the contract
by the defendant. The plaintiff
does not allege that the termination of his contract of employment by
the defendant constituted
an unfair dismissal The plaintiffs claim is
not founded on the Labour Relations Act. It is grounded on the common
law contract.
[33] In fact, Counsel for
the plaintiff in argument disavowed any reliance on the provisions of
the Labour Relations Act for the
relief the plaintiff seeks. The
plaintiff does not seek reinstatement and/or compensation as a
remedy. He seeks damages. This distinction
must be borne in mind in
determining the issues which are presented in this matter.
[34] The first issue to
be decided involves the interpretation of the contract of employment,
in particular the meaning of the phrase
"fixed
term contract linked to the term of office of the executive mayor,
Alderman B Petrus"
appearing
in clause 2.1 of the contract of employment. The question is whether
clause 2.1 allows the defendant to terminate the
plaintiffs contract
of employment in the event of vacation of the position by the
executive mayor for whom the plaintiff was employed.
[35] The golden rule of
interpretation is to seek the intention of the parties at the time
the contract was entered into (Joubert
v Enslin
1910 AD 6)
, and the
language in the document is to be given its grammatical and ordinary
meaning, unless this would lead to some absurdity,
or some repugnancy
or inconsistency with the rest of the document (Coopers & Lybrand
and Others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 767 E).
[36] Recently the SCA
held in Ekurhuleni Metropolitan Municipality v Germiston Munucipality
Retirement Fund
[2010] 2 ALL SA 195
(SCA) at paragraph 13 that a
provision in a contract must be interpreted not only in the context
of the contract as a whole, but
also in a manner which will give it a
commercially sensible meaning, and this requires a Court to construe
a contract in context
- within the factual matrix in which the
parties operate.
[37]
Mr
Sonnekus
submitted
for the plaintiff that the phrase in clause 2.1 of the contract,
means that the fixed period for which the plaintiff was
employed was
5 years. He argued that the plaintiffs interpretation was in line
with the factual matrix in which the parties operated.
He pointed out
that the executive mayor is appointed for a term of 5 years after the
municipal general elections. He submitted
that this is the period
which the parties had in mind when they concluded the contract
[38] In accordance with
this approach,
Mr
Sonnekus
submitted
that the defendant repudiated the contract when it terminated the
plaintiffs employment in April 2008.
[39] In response.
Mr
Coetsee
submitted
on the defendant's behalf that the plaintiffs period of service was
linked to the term of office of the executive mayor
and that the
plaintiffs employment would automatically terminate when the
executive mayor, to whose term of office the plaintiffs
contract was
linked, vacated his office.
[40]
Mr
Coetsee
pointed
out that it was important to observe that the contract of employment,
upon which the plaintiff sues, does not state that
the plaintiff was
employed for a period of 5 years, nor does it stipulate that the
plaintiff would be employed until the next municipal
elections.
[41] In the alternative,
Mr
Coetsee
argued
that the defendant was entitled to terminate the plaintiffs contract
of employment when it discovered that the plaintiff
had fraudulently
failed to disclose at the time of his employment that he had a
criminal conviction for fraud.
[42] I have to construe
the meaning of clause 2.1 read with clauses 2.3 and 15 of the
contract, Clause 2 of the contract provides
as follows;
"2.
1
the Employer hereby employs the Employee on fixed term contract
linked to the term of office of the Executive Mayor, Alderman
B
Petrus.
2.2 The Employee
hereby accepts employment as Manager in the Office of the Executive
Mayor, subject to the terms and conditions
in this contract and
subject to the
Local Government: Municipal Systems Act 2000
and the
Municipal Finance Management Act, 2003
2.3 The employment of
the Employee with the Employer commences on 15 October 2007,
regardless of the date of signing this contract
and terminates one
month after the current Executive Mayor's term of office ends".
[43] Clause 2.1 renders
the plaintiffs fixed term contract of employment linked to the term
of office of the executive mayor, Alderman
B Petrus. Clause 2.3
determines the date of commencement of the plaintiffs employment as
well as the date on which his employment
will terminate. The date of
commencement is 15 October 2007 and the date of its termination is a
month after the current executive
mayor's [Alderman B Petrus] term of
office ends.
[44] Clause 15.2 also
specifies the date of termination of the plaintiffs employment It
states that it terminates at the end of
the period referred to in
clause 2.3 namely a month after the end of current executive mayor's
term of office.
[45] Clause 15.4, which
allows the defendant to terminate the contract on account of the
plaintiffs misconduct or a breach of trust
between the plaintiff and
the executive mayor, unacceptable performance or incapacity, is
irrelevant to this enquiry. It specifically
requires a termination
made under it to be effected in words, the continued employment of
the plaintiff as a manager depended on
the duration of Petrus' term
of office as an executive mayor. Thus if Petrus vacated his position
as the executive mayor, the plaintiffs
contract of employment would
come to an end a month after the date on which Petrus ceased to be an
executive mayor.
[49] The use of the word
"linked"
in
clause 2.1 is significant- In my view, it was intended to emphasise
the connection or relationship between the period of employment
of
the plaintiff and the term of office of Petrus. The Concise Oxford
English Dictionary 10
,h
ed, Revised, defines the
word
"link'
as a
"relationship
or connection between people or things..."
[50] Secondly, the
construction contended for by
Mr
Sonnekus
is
not supported by the plaintiffs own evidence. The plaintiff testified
that the life of his contract was 5 years because the term
of office
of the executive mayor for whom he was employed, is 5 years. This
assertion cannot be correct because at the time of
the plaintiffs
employment in October 2007 the executive mayor had been in office for
about one and a half years.
[51] In the result I
reject the construction contended for by
Mr
Sonnekus
and
hold that the plaintiffs employment was for a fixed term linked to a
term of office of Petrus as an executive mayor and that
the
plaintiffs employment could be terminated on a month's notice after
Petrus vacated his position as an executive mayor.
Accordance with Labour
Relations Act. The provisions of clause 15.4 do not therefore apply
as the plaintiffs case is not founded
on the Labour Relations Act.
[46] I disagree with
Mr
Sonnekus'
contention
for two reasons. Firstly, the construction contended for by the
plaintiff is violative of the integration rule, which
provides that
when a contract has been reduced to writing, the writing is, in
general, regarded as the exclusive memorial of
the transaction, and
in the event of a contractual dispute between the parties, no
evidence to prove its terms may be given to
contradict, alter, add
to or modify the contract (KPMG Chartered Accountants (SA) v
Securefin Ltd and Another
2009 (4) SA 399
(SCA) at paragraph 39).
[47] The plaintiffs
interpretation of the contract has the effect of altering or
modifying the contract. In the first place there
is no reference to
a
"five
year"
term
in clause 2 of the contract. Secondly, the construction contended
for by the plaintiff contradicts clause 2.1 of the contract,
which
provides that the plaintiffs fixed term contract is linked to the
term of office of the executive mayor, Mr B Petrus. On
a proper
construction of the contract, the plaintiffs term of employment does
not exist independent of the term of office of
Petrus.
[48] The period for
which the plaintiff was employed is intrinsically linked to the term
of office of the person in the office
of the executive mayor as
opposed to the office of the executive mayor. In the instant case
the term of office of Mr B Petrus
as the executive mayor determines
the fate of the plaintiffs employment. In other
[52] II therefore
follows that the defendant did not repudiate the contract when it
terminated the plaintiffs employment in April
2008.
[53] In light of the
conclusion I have reached it becomes unnecessary to consider the
defendant's alternative defence based on
the plaintiffs fraudulent
non-disclosure.
The Order
[54] In the result the
plaintiffs claim is dismissed with costs.
ZONDI D H