South African Local Authorities Pension Fund v Maphanga (6464/17P) [2023] ZAKZPHC 39 (11 April 2023)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2023
>>
[2023] ZAKZPHC 39
|

|

South African Local Authorities Pension Fund v Maphanga (6464/17P) [2023] ZAKZPHC 39 (11 April 2023)

IN THE HIGH COURT OF
SOUTH AFRICA KWAZULU-NATAL DIVISION, PIETERMARITZBURG
CASE
NO: 6464/17P
In
the matter between:
SOUTH AFRICAN LOCAL
AUTHORITIES PENSION FUND               Plaintiff
and
BONGANI CYPRIAN
MAPHANGA                                                       Defendant
ORDER
The
following order is issued:
1.
Judgment is granted against the defendant
in favour of the plaintiff for:
1.1.
Payment of the sum of R 270 074.22;
1.2.
Interest thereon at the rate of 10.50 %
from 3 August 2016 to date of final payment both days inclusive;
2.
The claim in reconvention is dismissed with
costs.
3.
The defendant is directed to pay the
plaintiff’s cost of suit. Each party is to bear its own costs
for 10 September 2019.
JUDGEMENT
Henriques
J:
Introduction
[1]
The
plaintiff instituted action in
which
it claims payment of the amounts of R270 074.22 from the defendant
being the overpayment of salary he received for the months
of August
and September 2016 and R4 649.00
[1]
in respect of tools of trade.
The
basis of the plaintiff’s claim in respect of the overpayment of
salary is that on a proper construction of the defendant’s

employment contract with the plaintiff, his employment
terminated
on 3 August 2016, he continued to receive a salary for the months of
August and September 2016. On termination of the
contract he was
required to return the tools of trade loaned to him.
[2]
The defendant defended the action and
instituted a counterclaim for payment of R13,2 million from the
plaintiff. It is perhaps useful
at this juncture to detail the
pleadings in the matter to contextualise the issues and what follows
hereinafter in the somewhat
detailed judgement.
The pleadings
[3]
In the defendant’s initial plea dated
28 July 2017, he pleaded that he was appointed for the dual positions
of Executive Chairperson
(EC) and Chief Executive Officer (CEO) of
the plaintiff. The term of office of the Chairperson was in line with
that of the Board
of Trustees and the term of the CEO was for an
indefinite period. The claim in
reconvention
dated 28 July 2017 filed simultaneously with the initial plea,
contained similar allegations and indicated that the
plaintiff
repudiated the defendant’s contract of employment by
unilaterally purporting to terminate the contract on 25 October
2016
and had failed to pay the defendant his salary.
[4]
The defendant’s amended plea dated 14
November 2017, constituted a bare denial. The amended claim in
reconvention dated 6
December 2017, included an allegation that the
plaintiff had terminated the defendant’s contract of employment
‘without
cause’ and he was thus entitled to payment for
the remaining period of his term of employment until retirement in
the sum
of R13,2 million.
[5]
The
plaintiff elected to replicate to the defendant’s amended plea
despite the fact that it was not properly before the court
in terms
of Rule 28.
[2]
It
pleaded that the defendant’s employment was terminated by it
‘for cause’ in line with the provisions of clause
4.7. of
the employment contract.
[6]
In
the plaintiff’s amended plea to the defendant’s claim in
reconvention dated 19 April 2022
[3]
it
pleads that the appointment of the defendant as CEO was by virtue of
his appointment as Chairperson of the Board and the salary
of R1.2
million was the total combined salary for both roles as Chairperson
of the Board as well as CEO of the Fund
[4]
.
In addition, the plaintiff admits
[5]
that the contract stated that the appointment as CEO was for an
indefinite period but denies that this was the true agreement and/or

intention of the parties when the contract was concluded. It was the
intention of the parties that the appointment of the defendant
as CEO
was inextricably linked to and was consequent upon his appointment as
Chairperson of the Board.
[7]
The subsequent conduct of the parties
particularly that of the defendant demonstrates that they understood
the operation of the
employment contract would last for the period
that the defendant was appointed as Chairperson of the Board. This
understanding
was consistent with the conduct of the defendant in
that he failed to report
for duty and
failed to render his services as CEO after the term of the previous
Board expired on 3 August 2016.
[8]
In the alternative, in the event of the
court accepting that the appointment of CEO was separate from that of
Chairperson of the
Board, the termination letter referred to the
termination of the defendant’s employment pursuant to the
dissolution of the
previous Board and the defendant ought to have but
failed to render his services as CEO to the plaintiff after 3 August
2016.
[9]
In addition, the plaintiff denies that the
termination of the contract was without cause and pleads that the
termination of the
employment of the defendant in his capacity as
both Chairperson of the Board and CEO was in line with the true
intention of the
parties to end as a consequence of the term of the
Board coming to an end.
In
addition, the defendant’s employment with the plaintiff
terminated as a consequence of a letter of termination and
constituted
an acceptance of the defendant’s prior repudiation
of his employment contract.
[10]
The defendant’s repudiation occurred
on 3 August 2016 when he last reported for duty in the capacity of
CEO and by his subsequent
conduct in not reporting for work for the
month of August, September and October 2016 when the termination
letter was issued thereby
expressing his intent to no longer be bound
by the agreement between the parties.
[11]
In failing to report for duty the defendant
breached the following clauses of the employment agreement in that:
(a)
he failed and/or refused to perform his
duties and functions in terms of the agreement (clause 3.1);
(b)
he did not work 40 hours a week (clause 7);
and
(c)
he did not render services whilst based at
the head office of the Fund situated at 12 Fredman Drive, Sandton
(clause 8).
[12]
This conduct of the defendant expressed an
unequivocal intention to no longer be bound by the employment
contract and consequently
constituted a repudiation of the employment
contract, alternatively
a
breach of
a
material
and
fundamental term of
the
employment
contract entitling the plaintiff to accept the defendant’s
repudiation from the date on which it arose.
[13]
At the commencement of the trial I was
advised that the defendant admitted receipt of the amount claimed in
the summons of R270
074.22 for the period 3 August 2016 to 30
September 2016.
He,
however disputed liability to refund the plaintiff such amount. The
parties confirmed that a contract of employment was concluded
between
them in terms of which the defendant was employed as EC of the Fund
in line with the term of office of the Board of Trustees.
The defendant accepted that his term of
office as EC terminated on expiry of the term of office of the Board
of Trustees of the
Fund but did not accept that his term of office as
CEO also terminated then as well.
[14]
However, the defendant indicated that he
was employed in a dual role, that of EC of the Fund as well as CEO.
The contract of employment
also related to his role of CEO which was
on a permanent basis for an indefinite period of time. Evidence would
have to be led
of the circumstances surrounding the conclusion of the
contract.
[15]
The parties jointly sought an order in
terms of Rule 33(4) of the Uniform Rules of Court, for the court to
determine the aspect
of liability in respect of the overpayment and
the plaintiff’s liability for payment of the counterclaim,
quantum to stand
over. It was also agreed that the defendant would
testify first in relation to his counterclaim.
[16]
In addition at the outset it was agreed
that bundles of documents could be utilised which were marked
accordingly. The usual admissions
applied relating to the status of
the documents in the bundle save that it was admitted that the Rules
of the Fund published in
terms of section 13 of the
Pension Funds Act were binding on the fund,
its members and its officers and the parties before court in this
matter.
Issues
[17]
The issues for determination are the
following:
(a)
what were the circumstances surrounding the
appointment of the defendant at the time of the conclusion of the
contract of employment-was
the defendant employed as both the EC and
CEO of the Fund which terms of office aligned with the term of
the Board of Trustees or
was the appointment as CEO for an indefinite period of time?
(b)
Was the defendant’s employment
terminated ‘without cause’ as envisaged in clause 4 of
the contract of employment,
and is the defendant entitled to succeed
in his counterclaim?
(c)
Did the defendant repudiate the terms of
his contract of employment?
(d)
Allied to (c) is whether the plaintiff
accepted such repudiation.
[18]
In its plea to the claim-in-reconvention,
the plaintiff submits there are three reasons why the
claim-in-reconvention ought to be
dismissed and is unsustainable in
law namely:
(a)
the contract of employment came to an end
through the effluxion of time;
(b)
in the alternative, the defendant
repudiated his contact of employment which repudiation was accepted
by the plaintiff; and
(c)
the
claim for damages is in law limited to the notice period that the
plaintiff would have had to give the defendant on termination
of his
employment.
[6]
[19]
Pivotal to the determination of the
plaintiff’s claim as well as the defence to the claim in
reconvention, the court is required
to interpret the employment
contract concluded between the parties. Key to the interpretation of
the agreement are the definitions
of the terms Executive Chairperson
(EC), and Office of the EC, and whether the parties intended and/or
agreed to create a further
position of Chief Executive Officer (CEO)
distinct to that of EC.
[20]
Both
parties
at
the
trial
of
the
matter
led
evidence
on
the
context
and
circumstances under which the contract was
concluded. The defendant himself elected to testify and the plaintiff
led the evidence
of a former board member and trustee of the
plaintiff. Based on the evidence both the plaintiff and defendant
submit that the contract
favours the interpretation suggested by
them.
[21]
I propose to briefly summate the evidence
presented at trial.
Summation of the evidence
[22]
The defendant initially testified in
isizulu, however elected to testify in English.
He confirmed that he was initially employed
at the Msunduzi Municipality in 1988 when he became a member of the
plaintiff.
In
terms of the rules of the Fund he was nominated as a Trustee of the
Fund and served on the provincial structures of the Fund
from 1988
until 2000 when he was elected onto the National Board of Trustees by
the KwaZulu-Natal Provincial Committee of the Fund.
[23]
At the National Board of Trustee’s
level he was then elected as chairperson of the Finance and
Investments Committee for a
period of five years from 2001 until
2006.
In his
capacity as chairperson of such committee he was responsible for a
turnaround strategy to increase the level of funding of
the Fund
thereby increasing the amount available to members of the Fund.
His term of office came to an end in 2006
upon the expiry of the term of office of the Board of Trustees.
[24]
The Board had to be reconstituted and the
process of elections commenced for the next five year period from
2006 until 2011. In
2006 when the new board of trustees was elected
he was elected as chairperson.
At
the time he was still employed by the municipality. He served on the
board on a part time basis and same was conditional on his
employer
releasing him from time to time to attend to Fund matters.
[25]
When the new Board of Trustees was
established, it embarked on a strategic planning session which became
his responsibility. A decision
was then made that he ought to be
employed by the Fund on a permanent basis to advance the strategy of
the board.
Although
he was employed by the Msunduzi municipality on a permanent basis, he
was released to perform the duties of the Fund full
time and the Fund
would reimburse the municipality for his salary on presentation of an
invoice.
This
arrangement continued until the expiry of the term of office of the
board in 2011.
[26]
He was re-elected for the third time on to
the board of trustees in 2011, however his employer, Msunduzi
Municipality which was
under administration at the time, would not
release him on a permanent basis to perform the duties at the Fund,
despite numerous
attempts to persuade the municipality and even
intervention by the union SANWU. As a consequence, he was then
approached by the
plaintiff to be employed on a permanent
basis.
In order to give effect to this decision an amendment to the rules of
the Fund would have to be made.
[27]
He testified that this decision to offer
him permanent appointment followed on a process of negotiation
between the Deputy Chairperson
of the Fund and
its attorneys Thipa attorneys and
necessitated a rule amendment.
The
rule amendment took a considerable period of time. Only once the rule
amendment had been effected, did he resign from the municipality
and
take up employment at the Fund.. He testified that the position that
was created was a dual position, he was a trustee and
chairperson of
the Board but the position also incorporated that of chief executive
officer.
[28]
He did not need to conclude a contract of
employment as chairperson of the Board as this was an elected
position and he could hold
it for a period not in excess of five
years and was aligned to the term of office of the Board of Trustees.
The CEO position was
not an elected position and was a permanent
position, hence he had to conclude a contract of employment with the
plaintiff.
[29]
To sum up, his relationship with the Fund
was twofold. The first being of a member of the Fund by virtue of him
becoming a member
and making contributions to the Fund, he became
eligible for appointment as an officer bearer of the Fund and
eventually through
elections became chairperson of the Fund.
The second role being that of CEO had to be
regulated by means of an employment contract and although a permanent
position was made
terminable by either party.
[30]
During cross-examination of the defendant
the following emerged:
(a)
He concluded a contract of employment with
the plaintiff effective 1 September 2013 and he was appointed as EC
to focus full-time
on the business of the Fund. The position of EC
encompassed a dual role being that of Chairperson and CEO of the Fund
contemplated
in the Task Team report.
(b)
He accepted that the words ‘indefinite
term’ were not synonymous with ‘forever’ and his
employment could
be terminated.
(c)
There was really no distinction between the
duties of a CEO and chairperson of the board.
(d)
he acknowledged that his term of office as
trustee and chairperson of the fund ended on 3 August 2016;
(e)
when the term of the Board ended in 2016
there were no elections in all the provinces which resulted in no new
National Board of
Trustees being appointed in the stipulated time
period as a result of which the Financial Services Board (FSB) acting
in terms
of s 26 of the Pensions Fund Act appointed an interim board
of which he was not a member.
(f)
his employment as CEO was terminated
without cause by the interim board in terms of a termination letter
dated 25 October 2016 and
he did not seek his reinstatement
consequent thereon as although same was without cause he regarded
such termination as ‘lawful’
(g)
when he submitted his forms withdrawing
from the pension fund the documents reflected his reason for doing so
as ‘end of contract’.
He had initially completed the
forms and reflected dismissal as being the reason for the withdrawal.
However, the principal officer
did not agree with this as the reason
for withdrawal. A new reason was inserted which was ‘end of
contract” and he
accepted this as he resigned the form with the
new reason.
(h)
he did not relocate to Johannesburg once
permanently appointed to the Fund. Despite the terms of the contract
of employment he did
not regard himself as having to physically be
present to work from the Fund’s head office in Sandton five
days a week during
normal office hours. A practice had developed
allowing him to work from home in Pietermaritzburg.
(i)
the rules of the Fund were amended to
define an EC as a person or trustee who had been appointed in terms
of rule 2.7.2. to focus
full time on the business of the fund and
whose appointment is regulated in terms of a service level agreement
(rule 1.24) and
provided that the EC shall hold office in line with
the term of office of the board of Trustees (rule 2.6.3.).
(j)
the rules of the Fund make no reference to
or provision for the position of CEO and
only
refer
to
an
EC.
The
rules
set
out
the
term
of
office
of
the
EC
and
the
service level agreement
or contract of employment cannot alter the rules of the Fund and in
the case of a conflict between them
the rules of the Fund take
preference.
(k)
The various minutes of the board of
trustees meetings from 17 and 18 November 2011 until November 2012
reflect discussions concerning
and EC and principal officer. There
are no discussions concerning separate roles of EC and CEO and
discussions concern salary packages
for EC and principal officer
only. No separate discussions of salary packages for dual role which
EC performed either.
(l)
The board of trustees minutes do not
reflect any discussion or distinction between the roles of EC, CEO
and Chairperson of the Board.
In accordance with the rules of the
fund the Board appointed an EC and principal officer.
(m)
The minutes of the board of trustees
reflect him only recusing himself from certain of the meetings not
all of them at which these
discussions concerning his appointment and
that of the principal officer occurred.
(n)
Once the Board’s term of office ended
on 3 August 2016, the functions previously performed by him as CEO
were done by the
principal officer. Having regard to the Pensions
Fund Act and rules of the Fund the principal officer’s role is
that of the
CEO of the Fund when no Board is in place.
(o)
He owed a fiduciary duty to the Fund.
[31]
That then was the evidence of the
defendant.
[32]
Hendry
Collins who served on the board of the plaintiff as a trustee since
1990 ceased being a board member in July 2021.
He
testified that he attended board meetings and was familiar with the
discussions and resolutions taken by the board as well as
the rules
of the Fund.
He
confirmed that at a board of trustee’s meeting held on 23 and
24 February 2012
[7]
, despite him
not being in attendance, among the items on the agenda was a progress
report in respect of the secondment of the national
chairperson, the
defendant to the plaintiff on a fulltime basis.
[33]
The defendant was excused from the meeting
when this item was discussed. It was reported that a response was
still awaited from
the defendant’s employer and the matter had
outstanding since 2011 without any progress.
The board of trustees then resolved that a
task team be appointed to investigate the possibility of appointing
the defendant and
Mr Kgakane as full-time employees of the plaintiff
at the highest level and that the task team provide a comprehensive
report with
firm recommendations for the approval by the board at the
next board of trustees meeting.
[34]
He was one of the persons appointed to the
task team which was to investigate their appointment on a permanent
basis working full-time
for the plaintiff but for a term of office
which would align with the term of office of the board of trustees
being a five year
period.
He
confirmed being present at a further board of trustees meeting held
from 22 to 24 August 2012. Item 57 of the minutes of that
meeting
reflect the investigation done by the task team in relation to the
secondment and appointment of the defendant. The minutes
reflect that
the report of the task team had been circulated under confidential
cover at the meeting and discussed at a closed
trustee session.
[35]
After a lengthy discussion the board of
trustees at its meeting resolved that a rule amendment relating to
the appointment of the
EC and principal officer on a fixed term full
time basis be approved, that the terms of their office be in line
with the term of
office of the board of trustees, that the fixed term
contracts be negotiated and concluded for the positions of EC and
principal
officer subject to ratification by the board of trustees
and the deputy chairperson of the board of trustees together with
attorneys
Thipa Inc be mandated to finalise the contractual issues in
respect of their fixed terms of appointment.
[36]
The minutes also reflect that he, although
a member of the task team requested that his objection to the board
resolutions be noted
notwithstanding the fact that he had been part
of the task team and had been supportive of the workings and findings
of such task
team.
The
reasons for this was that the task team’s discussions and
investigative report made a recommendation that their appointment
be
in line with the rules of the Fund
namely
that the appointments must coincide with the term of the board of
trustees. The problem with the recommendations was that
the task team
could not make a final recommendation regarding their full-time
employment as there were no KPA’s and KPI’s.
The task
team could not make a final recommendation without the KPA’s
and KPI’s and without knowing what their individual
functions
would be and/or the cost implications to the Fund.
[37]
Paragraph (d) of the resolutions confirmed
that Ekuseni Consultants were mandated to furnish expert advice on
the KPA’s and
KPI’s as well as a remuneration package for
the EC and principal officer respectively.
Items 53 and 57 pursuantly record that the
rules did not provide for the positions of principal officer and EC
to be permanent appointees
on a fulltime basis and consequently a
rule amendment was necessary.
In
addition, he confirmed that the report of the task team was returned
and did not form part of the meeting pack.
[38]
The 1 October 2012 report of Ekuseni was
tabled at the board of trustees meeting of 22 to 24 November 2012.
The KPA’s and
KPI’s in such report were accepted and the
salary packages of R1,2 million and R950,000 per annum for the
positions of EC
and principal officer respectively were approved.
This was all subject to the rules amendment being approved by the
FSB.
[39]
He was also present at a board of trustees
meeting held on 23 to 25 May 2013 in which the chairperson of the
finance committee Mr
Mohlala tabled a report proposing that the board
of trustees review its previous decisions relating to the permanent
appointment
of the EC and principal officer.
Mr Mohlala, like him, was concerned that
there was insufficient information presented to the board in order
for it to have made
a decision. The contracts of employment had not
been negotiated and he was concerned about the financial impact of
these permanent
appointments on the budget of the Fund.
[40]
After
much discussion and deliberation, the finance committee had passed a
vote of no confidence in respect of its chairperson Mr
Mohlala. At
the board of trustees meeting it was resolved that the FSB had
approved the rule amendment for the positions of EC
and principal
officer. The previous resolutions of the Board be proceeded with
to
make such appointments of EC and principal officer as the rule
amendment had already been submitted to the FSB and the FSB had

approved such amendment.
[8]
[41]
He confirmed that the rules amendment
catered for the position of an EC
in
clause
1.2.4 of the Rules and defined such
EC as a person or trustee who had been appointed in terms of rule
2.7.2 to focus full-time on
the business of the Fund and the EC’s
appointment was regulated in terms of a service level agreement
concluded between the
Fund or trustees and such person.
In addition, clause 2.6.3 of the rules
provided for the EC to hold office in line with the term of office of
the board of trustees.
He confirmed that this is what was submitted
to the FSB for the rule amendments to take place.
[42]
Item
45 of the minutes of the meeting
[9]
record
that the appointment of the EC and principal officer on a full-time
basis to the Fund had been approved by the FSB and a
progress report
would be tabled at the next meeting once Thipa Inc attorneys had
followed up with the FSB in respect of the approval
of the submitted
rule amendments.
[43]
The
subsequent meeting of the board of trustees held on 22 to 23 August
2013
[10]
had as one of its
items, item 37 which related to an update in respect of the
appointment of the EC and principal officer.
A
report was provided indicating that negotiations in respect of the
employment contracts for both these positions were in the final

stages and it was resolved that Mr Kgope conclude the employment
contracts with the EC and principal officer with the effective
date
being 1 September 2013.
[11]
[44]
He testified that the mandate given to
Kgope was to conclude an employment contract pursuant to discussions
relating to the salary
for such positions, the KPA’s and the
term of office for these positions to coincide with the term of
office of the board
of trustees in terms of the amendment to the
rules of the board. He confirmed that having regard to the contract
of employment
clauses 1.1, 2.2.6, 2.2.8 accorded with the amendments
to the rules of the Fund and the resolutions taken at the board
meetings.
[45]
In respect of clause 1.1, it refers to the
defendant as being appointed to the position of EC of the Fund,
clause 2.2.6 defines
and employee as being the defendant. The
definition of an EC in clause 2.2.8.means a person appointed to focus
full time on the
business of the Fund. This was in keeping with the
discussions that such EC performed a dual role, that of CEO as well
as chairperson
of the Fund and that having regard to the contract of
employment, the reference to EC referred to the dual roles which is
regulated
by the service level agreement and the rules of the Fund.
[46]
Although clause 4.2 of the contract of
employment referred to an ‘indefinite term’ and no term
was specified, it was
always the understanding that this was subject
to the other clauses in the agreement as well as the rules of the
Fund being that
the term of office as EC and CEO were aligned with
the term of office of the board of trustees.
This would be in line with clause 4.6 of
the agreement which reflected that the term of office of the EC
aligned with the term of
office of the board of trustees.
[47]
Mr Collins confirmed that reference to a
dual function or dual roles and the use of the word ‘employee’
referred to
the EC who would be the chairperson of the Fund as well
as the CEO.
Both
roles would involve the chairperson being an employee of the Fund.
When asked to comment on the defendant’s evidence
that the
chairperson of the Fund cannot be employed as he occupied that office
by virtue of elections, he indicated that the use
of the word
employee in this context meant a full-time employee of the Fund but
the person is not employed on a full-time basis
but on the basis of a
contract of employment.
[48]
The EC cannot be an employee of the Fund
but a CEO can be an employee. Consequently, this is why they combined
the roles to allow
his appointment as EC.
He confirmed that the intention behind the
rule amendment was for him not to be appointed solely as the CEO of
the Fund.
He
confirmed that one cannot read clauses 4.2, 4.3 and
4.6
in isolation, they have to read together.
Clause 4.6 provided that the appointment
would be in line with the term of office of the board of trustees as
the rules of the Fund
do not provide for the role of CEO hence the
reason why the EC referred to the dual role of chairperson and CEO.
[49]
The
minutes of the Board of Trustee’s meeting held on 13 to 14
March 2014
[12]
at
item 8 thereof reflected the review of terms of office for
chairpersons of committees. The meeting pack included an extract from

the rules of the Fund effective 1 July 2010 which stated that the
term of office for all committees of the board chairpersons,

provincial chairpersons, deputy chairpersons of all committees and
other office bearers of the board would only be for a period
of two
and a half years.
The
first two and a half years term of office ended in February 2014 and
it was appropriate for the renewal of all chairpersons
and deputy
chairpersons’ mandate going forward.
[50]
In
addition, it noted that in 2013 the board of trustees took a
resolution to appoint the principal officer and board chairperson
for
the remainder of the board’s term of office. Similarly, item 13
of the agenda
[13]
confirmed
that the appointment of the EC and principal officer had been
finalised. What this meant was that the EC and principal
officer had
agreed to the terms of the employment contracts and that the
defendant had been appointed on a permanent basis coinciding
with the
term of office of the board of trustees.
[51]
He confirmed that because the terms of
office were in line with the term of office of the board of trustees,
their terms of office
would end when the board of trustees’
term ended.
The
EC reported to the board of trustees and would continue to occupy the
post until such time as the term of office of the board
of trustees
ended and his employment contract was in line with that.
[52]
Employees of the Fund were based at and
executed their duties at SALA House in Sandton, Fredman Road.
He confirmed that consultants are employees
employed on a contract basis and that they executed their duties
outside of the province.
Full
time employees of the Fund would exercise their duties in the office
where they had been based, for example if they were appointed
in
Eastern Cape there is a SALA office in the Eastern Cape.
Where there were no offices, the employees
were required to perform their duties at the SALA head office in
Sandton.
[53]
This aspect of where services were to be
rendered was pertinently dealt with in the contract of employment at
clause 8.7.
The
Eastern Cape office had an employee appointed permanently there.
The defendant was employed on a permanent
basis to the Fund and had to perform his duties on a daily basis at
Fredman Drive which
is the head office of the Fund in Sandton.
He confirmed that the defendant’s
term of office ended in May 2016.
[54]
He confirmed that the term of office of the
board ended in May 2016 and because there was no board in place, at
the last board meeting
of trustees, the board ceased to exist at the
end of May 2016. All board members knew that their term of office had
lapsed and
that they needed to participate in elections.
There were no mandates given to any board
members to action any business of the Fund after the end of May 2016.
He confirmed that although the rules of the
Fund say that the term of office of the board of trustees is five
years and their term
of office ended in May 2016, the rules also make
provision for the finalisation of any work of the former board of
trustees within
three months of the end of the term of office, hence
the reason for the date of August 2016 being relevant.
[55]
This the defendant clearly knew of having
regard to correspondence addressed by him to the FSB on 11 August
2016 for an interim
board to be appointed. He confirmed that when the
term of office of the board of trustees ended at the end of May 2016
elections
were not timeously conducted in terms of Rule 2.3.1 of the
rules of the Fund. This was brought to the attention of the FSB who
in turn then appointed members to an interim board to perform
functions as set out in the letter dated 22 September 2016 from the

Registrar of Pension Funds of the FSB to the principal officer Mr
Kgakane.
[56]
Mr Collins confirmed during the course of
his evidence that he was appointed as a board member to the interim
board of trustees
as is evident from pages 24 to 25 of volume 6 which
is the index to correspondence.
The
effect of this, he testified, was that the EC was no longer in office
and a new interim board was appointed which was to elect
a
chairperson at the first meeting of the interim board.
He confirmed that as a member
of
the interim board of trustees, there was no correspondence from the
defendant indicating he is tendering his services as CEO
of the Fund
and nor did he make any approaches to the interim board of trustees
to tender services and neither did he attend physically
at the
offices of SALA at Sandton to say he was reporting for work. During
the period for which the interim board was appointed,
the defendant
did not report for duty at SALA house in Sandton.
[57]
During cross-examination he confirmed that
any amendments or changes to the agreement had to be reduced to
writing. That the term
‘indefinite term’ could not be
interpreted to mean ‘permanent’ as one had to read it
subject to clauses
4.4, 4.5 and 4.6 and the rest of the agreement as
well as the rules of the fund. One could not read the clauses in
isolation. The
term of office was in line with the term of office of
the board of trustees as stipulated in clause 2.4.6.. The post of EC
and
CEO was a single position at a fixed remuneration and the
reference in the rules to sitting allowances did not apply to the
Chairperson.
[58]
The letter of 25 October 2016 was sent to
the defendant as even though his employment with the Fund had
terminated, the interim
board became aware of the fact that the
administrator had not stopped the payment of the defendant’s
salary and it was sent
to regularise the position.
That then was the evidence presented.
[59]
The parties were given an opportunity to
present written submissions and oral argument. I am indebted to them
which assisted greatly
in the drafting of the judgment. Although Mr
Khumalo
was
given an opportunity to deliver further written submissions he
declined to do so.
Analysis
[60]
Before dealing with the evidence presented
around the circumstances which led the appointment of the defendant
as EC and the interpretation
to be accorded to the written
agreement/contract of employment it is necessary to set out in detail
the approach
of our courts to the
interpretation of documents. It is against these authorities that
this court must interpret the agreement.
The legal position in
respect of the interpretation of contracts
[61]
The interpretation of documents, be it
contracts, wills or statutes, had been in a state of flux and were
often misinterpreted and
misapplied. The Supreme Court of Appeal
(SCA) has, however, settled the law in a number of decisions which I
deal with hereinafter.
[62]
The
initial approach to the interpretation of contracts was summarised
and dealt with by Joubert JA in
Coopers
& Lybrand and others v Bryant
[14]
as
follows:
‘
The
correct approach to the application of the “golden rule”
of interpretation after having ascertained the literal
meaning of the
word or phrase in question is, broadly speaking, to have regard:
(1)
to the context in which the word or phrase
is used with its interrelation to the contract as a whole, including
the nature and purpose
of the contract...;
(2)
to the background circumstances which
explain the genesis and purpose of the contract, ie to matters
probably present to the minds
of the parties when they contracted...;
(3)
to apply extrinsic evidence regarding the
surrounding circumstances when the language of the document is on the
face of it ambiguous,
by considering previous negotiations and
correspondence between the parties, subsequent conduct of the parties
showing the sense
in which they acted on the document, save direct
evidence of their own intentions.’
[63]
Wallis
JA expressed the rule in relation to interpretation in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[15]
as
follows:
‘…
The
present state of the law can be expressed as follows: Interpretation
is the process of attributing meaning to the words used
in a
document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading
the
particular provision or provisions in the light of the document as a
whole and the circumstances attendant upon its coming
into existence.
Whatever the nature of the document, consideration must be given to
the language used in the light of the ordinary
rules of grammar and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material
known to those
responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the
light of all these
factors. The process is objective, not subjective.
A
sensible
meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines
the
apparent purpose of the document. Judges must be alert to, and guard
against, the temptation
to
substitute what they regard as reasonable, sensible or businesslike
for the words actually used.
To
do so in regard to a statute or statutory instrument is to cross the
divide between interpretation
and
legislation; in a contractual context it is to make a contract for
the parties other than the one
they
in fact made. The “inevitable point of departure is the
language of the provision itself”, read
in context and having regard to the
purpose of the provision and the background to the preparation
and production of the document.’
(Emphasis added, footnotes omitted.)
[64]
In the same judgment, the SCA also warned
against a court discerning the meaning of words used by others and
not of imposing their
own views of what would have been sensible for
other persons to say. In addition, at paragraph 24 of the judgment, a
warning was
also sounded to ascertain the meaning of words from
reading them in context:
‘
The
sole benefit of expressions such as “the intention of the
legislature” or “the intention of the parties”
is
to serve as a warning to courts that the task they are engaged upon
is discerning the meaning of words used by others, not one
of
imposing their own views of what it would have been sensible for
those others to say. Their disadvantages, which far outweigh
that
benefit, lie at opposite ends of the interpretive spectrum. At the
one end, they may lead to a fragmentation of the process
of
interpretation by conveying that it must commence with an initial
search for the “ordinary grammatical meaning”
or “natural
meaning” of the words used seen in isolation, to be followed in
some instances only by resort to the context.
At the other, they
beguiles judges into seeking out intention free from the constraints
of the language in question, and then imposing
that intention on the
language used. Both of these are contrary to the proper approach,
which is from the outset to read the words
used in the context of the
document as a whole and in the light of all relevant circumstances.
That is how people use and understand
language and it is sensible,
more transparent and conduces to greater clarity about the task of
interpretation for courts to do
the same.’ (Footnote omitted.)
[65]
Then at paragraphs 25 and 26 the Court
remarked:
‘
[25]
Which of the interpretational factors I have mentioned will
predominate in any given situation varies. Sometimes the language
of
the provision, when read in its particular context, seems clear and
admits of little if any ambiguity. Courts say in such cases
that they
adhere to the ordinary grammatical meaning of the words used.
However, that too is a misnomer. It is a product of a time
when
language was view differently and regarded as likely to have a fixed
and definite meaning; a view that the experience of lawyers
down the
years, as well as the study of linguistics, has shown to be mistaken.
Most words can bear several different meanings or
shades of meaning
and to try to ascertain their meaning in the abstract, divorced from
the broad context of their use, is an unhelpful
exercise. The
expression can mean no more than that, when the provision is read in
context, that is the appropriate meaning to
give to the language
used. At the other extreme, where the context makes it plain that
appearance to the meaning suggested by apparently
plain language
would lead to glaring absurdity, the court will ascribe a meaning to
the language that avoids the absurdity. This
is said to involve a
departure from the plain meaning of the words used. More accurately
it is either a restriction or extension
of the language used by the
adoption of a narrow or broad meaning of the words, the selection of
a less immediately apparent meaning
or sometimes the correction of an
apparent error in the language in order to avoid the identified
absurdity.
[26] In between these two
extremes, in most cases the court is faced with two or more possible
meanings that are to a greater or
lesser degree available on the
language used. Here it is usually said that the language is ambiguous
although the only ambiguity
lies in selecting the proper meaning (on
which views may legitimately differ). In resolving the problem, the
apparent purpose of
the provision and the context in which it occurs
will be important guides to the correct interpretation. An
interpretation will
not be given that leads to impractical,
unbusinesslike or oppressive consequences or that will stultify the
broader operation of
the legislation or contract under
consideration.’ (Footnotes omitted.)
[66]
Following
on the decision in
Endumeni
was
the decision in
Bothma-Batho
Transport (Edms) BPK v S Bothma & Seun Transport (Edms) BPK
[16]
in
which, after quoting
the
summary
in
paragraph
18
in
Endumeni
which
reflects
the
current
state
of
South African law, Wallis JA again with reference to the quotation
from
Coopers
& Lybrand
stated
that:
‘
That
summary is no longer consistent with the approach to interpretation
now adopted by South African courts in relation to contracts
or other
documents, such as statutory instruments or patents. Whilst the
starting point remains the words of the document, which
are the only
relevant medium through which the parties have expressed their
contractual intentions, the process of interpretation
does not stop
at a perceived literal meaning of those words, but considers them in
the light of all relevant and admissible context,
including the
circumstances in which the document came into being. The former
distinction between permissible background and surrounding

circumstances, never very clear, has fallen away. Interpretation is
no longer a process that occurs in stages but is “essentially

one unitary exercise”. Accordingly, it is no longer helpful to
refer to the earlier approach.’ (Footnotes omitted.)
[67]
The
approach of the SCA referred to by Wallis JA is aligned to and
emanates from the approach that pertains in England and Wales
such as
in
Rainy
Sky SA and Orsd v Kookmin Bank
[17]
.
Wallis
JA quotes from Lord Neuberger’s judgment where he said the
following in relation to the correct approach to the construction
of
contracts to be the following:
‘…
that
those cases show that the ultimate aim of interpreting a provision in
a contract, especially a commercial contract, is to determine
what
the parties meant by the language used, which involves ascertaining
what a reasonable person would have understood the parties
to have
meant.’
[68]
Having regard to the line of English
decisions referred to, the English courts seem to adopt the approach
that if the language is
capable of more than one construction one
chooses the construction it seems most likely to give effect to the
commercial purpose
of the agreement.
[69]
Following
on from
Endumeni
and
Bothma
& Seun
,
the evidentiary difficulty that flowed from the misinterpretation and
misapplication by litigants of the decision in
Endumeni
was
summarised by the SCA in
Tshwane
City Metropolitan Municipality v Blair
Atholl
Home Owners Association
[18]
and
Capitec
Bank Holdings Limited and another v Coral Lagoon Investments 194
(Pty) Ltd and others.
[19]
[70]
At paragraphs 61 and 62 of the judgment in
Tshwane City
the
court remarked as follows:
‘
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.)
[71]
Unterhalter
AJA explained in
Capitec
[20]
as
follows:
‘…
interpretation
begins with the text and its structure. They have a gravitational
pull that is important. The proposition that context
is everything is
not a licence to contend for meanings unmoored in the text and its
structure. Rather, context and purpose may
be used to elucidate the
text.’
[72]
I
agree with the approach adopted by the full bench in
V
v V
[21]
in
which the court dealt with the interpretation of contracts. The
judgment summary provides a useful synopsis of the approach followed

namely:
‘
The
ordinary meaning of the words used, when limited to the clause
itself, must yield to the intention of the parties as expressed
in
the balance of the contract as a whole, the purpose for which they
were introduced and the factual matrix in which the document
came
into existence. To interpret the document otherwise would result in
absurdity and not make commercial sense in the context
of the
relationship established by the parties.’
[73]
After
consideration of the judgments in
KPMG
Chartered Accountants (SA) v Securefin Ltd & another
[22]
and
Endumeni
Lewis
JA writing for the Court in
Novartis
SA (Pty) Ltd v Maphil Trading (Pty) Ltd
[23]
at
paragraphs 27, 28 and 30 and 35 held the following:
‘
[27]
I do not understand these judgments to mean that interpretation is a
process that takes into account only the objective meaning
of the
words (if that is ascertainable), and does not have regard to the
contract as a whole or the circumstances in which it was
entered
into. This court has consistently held, for many decades, that the
interpretive process is one of ascertaining the intention
of the
parties – what they meant to achieve. And in doing that, the
court must consider all the circumstances surrounding
the contract to
determine what their intention was in concluding it.
KPMG
,
in the passage cited, explains that parole evidence is inadmissible
to modify, vary or add to the written terms of the agreement,
and
that it is the role of the court, and not witnesses, to interpret a
document. It adds, importantly, that there is no real distinction

between the background circumstances and surrounding circumstances,
and that a court should always consider the factual matrix
in which
the contract is concluded – the context – to determine
the parties’ intention.
[28] ...A court must
examine all the facts – the context – in order to
determine what the parties intended. And it must
do that whether or
not the words of the contract are ambiguous or lack clarity. Words
without context mean nothing.’
[74]
At paragraph 30, quoting Lord Clarke in
Rainy Sky
,
the Court held the following: ‘Lord Clarke in
Rainy
Sky
in turn referred to a passage in
Society of Lloyd’s v Robinson
[1999] 1 All ER (Comm) 545
at 551,
which I consider useful.
“
Loyalty
to the text of a commercial contract, instrument, or document read in
its contextual setting is the paramount principle
of interpretation.
But in the process of interpreting the meaning of the language of a
commercial document the court ought generally
to favour a
commercially sensible construction. The reason for this approach is
that a commercial construction is likely to give
effect to the
intention of the parties. Words ought therefore to be interpreted in
the way in which the reasonable person would
construe them. And the
reasonable commercial person can safely be assumed to be unimpressed
with technical interpretations and
undue emphasis on niceties of
language.”’
[75]
At paragraph 35 the Court continued:
‘
The
argument that the words of the document, signed…on 14 October
2004, must be examined only linguistically, and that the
genesis of
the document, subsequent conduct and other facts relevant to the
conclusion of the contract be ignored, is directly
contrary to the
decisions of this court cited above, and many others. But, as I have
said, the issue here is not what the parties
intended their contract
to mean, but whether they intended to bind themselves contractually.
That inevitably requires an examination
of the factual matrix –
all the facts proven that show what their intention was in respect of
entering into a contract: the
contemporaneous documents, their
conduct in negotiating and communicating with each other, and,
importantly, the steps taken to
implement the contract.’
[76]
Consequently,
I agree with the submission of Mr
Peter
[24]
that
the latter aspect of the above quote requires a consideration and
inclusion of evidence of the way both parties have carried
out the
contract in the interpretation process. This is because it gives an
indication of the parties’ common understanding
of the
contract’s meaning.
[77]
This would also be consistent with the
approach mentioned in
V v V
at
paragraph 25 where it was held as follows:
‘
The
issue of the parties subsequent common conduct did not arise for
consideration in
Novartis
and
the other cases referred to in that decision. It is however well
established that such evidence is admissible since it amounts
to an
objective demonstration of how the parties conducted themselves,
without objection, in implementing the terms of the contract.
It also
amounts to conduct against interest, conduct evidencing consensus as
to the application of the agreement (much in the same
way as
subsequent verbal confirmation as to their mutual understanding of
the terms) and objective evidence of their common understanding
as to
the terms of their agreement at the time of its conclusion.’
[78]
The
authorities make it clear that courts are inclined to favour the
interpretation of contracts which give a reasonable, sensible
and
business-like meaning and give effect to transactions and agreements
seriously concluded over those that result in invalidity
if the
contract is reasonably amenable to such a construction. In addition,
there is well established authority that a court may
depart from the
ordinary meaning of words in order to avoid absurd results.
[25]
This approach has been endorsed by Wallis JA in
Endumeni
at
paragraph 25 quoted hereinbefore.
[79]
The exposition of the quoted authorities
dispositively deals with the position that an absurd or
unbusinesslike interpretation of
an agreement simply cannot prevail.
The relevant clauses of
the agreement and their interpretation
[80]
It
is necessary to set out the relevant portions of the agreement
[26]
concluded
between the plaintiff and the defendant which was signed on 10
September 2013 at Sandton with an effective date of 1 September
2013.
The deputy chairperson of the board signed the contract on behalf of
the plaintiff and the defendant signed as employee.
The
parties are
ad
idem
the
written contract is what governs the relationship between them.
[81]
As indicated at the commencement of the
judgement, certain clauses in the agreement and certain definitions
are integral to the
interpretation to be ascribed to the agreement.
Section 2 of the agreement sets out the
definitions assigned to words and expressions in the document.
Section 2.2.8 defines an ‘Executive
Chairperson’ to mean ‘a person or Trustee who has been
appointed in terms
of Rule 2.7.2 to focus full-time on the business
of the Fund and whose appointment is regulated in terms of a service
level agreement
concluded between the Fund and Trustee or such
person.’
[82]
Section 3 deals with the appointment of the
employee as EC and 3.1 specifically refers to the fact that the Fund
appointed the employee
to the position of Executive Chairperson of
the Fund to perform the dual role of Chairperson and Chief Executive
Officer of the
Fund as contemplated in the Task Team Report. The
functions and duties are described in annexure ‘A’ to the
agreement.
Clause
3.1 provides that such duties and functions may be amended from time
to time by agreement.
Clause
3.2 is of relevance and reads as follows ‘The Employee agrees
to perform in the assigned position and serve the Fund
as Executive
Chairperson or, subject to the Fund Rules, in such capacity of
comparable status as the Fund may require, having regard
to the
operational needs and requirements of the Fund and the Employee’s
ability and capacity to fulfil such requirements.’
[83]
The term of office and termination of
service is dealt with in clause 4 of the agreement and it is apposite
to set out the contents
of clause 4 in its entirety given the dispute
between the parties relating to the interpretation of the agreement
and the basis
of the counterclaim.
‘
4.
TERM OF OFFICE AND TERMINATION OF
SERVICE
4.1
In respect of the Executive Chairperson’s
appointment as Chairperson of the Fund, such appointment shall be in
line with the
term of office of the Board of Trustees provided for in
the Fund Rules, subject to the provisions of Clauses 4.4, 4.5, 4.6
and
4.7 hereof and the provisions of the Labour Relations Act, Basic
Conditions of Employment Act, and other applicable legislation.
4.2
The Executive Chairperson’s
appointment as Chief Executive Officer of the Fund is for an
indefinite term, subject to the provisions
of Clauses 4.4, 4.5, 4.6
and 4.7 hereof and the provisions of the Labour Relations Act, Basic
Conditions of Employment Act, and
other applicable legislation.
4.3
In the event that the Board does not
re-elect the Executive Chairperson to the position of Chairperson of
the Fund, upon expiry
of the current term of office as Chairperson or
any further term of office as Chairperson following re-election, the
Executive
Chairperson shall continue to be employed and fulfil the
role of Chief Executive Officer of the Fund in terms of this
Agreement.
In
such instance, the Executive Chairperson shall assume the title of
Chief Executive Officer.
4.4
This Agreement may be terminated by the
Employee by giving 6 (six) calendar months’ written notice to
the Fund.
4.5
This Agreement may be terminated by the
Fund by giving 6 (six) calendar months’ written notice to the
Employee, which termination
is subject to the provisions of the Fund
Rules where applicable, the Labour Relations Act, Basic Conditions of
Employment Act,
and any other applicable legislation.
4.6
In the event that the Employee’s
employment be terminated by the Employer during the term of
employment (which is in line
with the term of office of the Board of
Trustees(-)
4.6.1
without Cause, or
4.6.2
the Employee becomes disabled in terms of
the Fund Rules, or
4.6.3
the Employee dies during the contract
period, the Employer shall refund the Employee for the remaining
period of the term of employment.
The
fixed remuneration and bonus payable in terms hereof for the
remaining term of employment, shall be taken into account in
determining
the amount to be refunded to the Employee.
4.7
In the event that the employment of the
Employee is terminated by the Employer for Cause or in the event that
the Employee decides
to terminate this Agreement, no monies will be
refunded to the Employee.’
[84]
Clause 2.2.4 defines ‘cause’ to
mean ‘the termination by the Fund of the Employee’s
employment for misconduct,
including but not limited to poor
performance.
It
is specifically recorded that ‘Cause’ shall not include
termination for operational reasons and/or capacity (excluding
poor
performance)’.
[85]
Clause 6 of the agreement provided for the
defendant to earn an annual basic pensionable salary of R1.2 million
per annum.
Clause
7 provided for the employee to work a minimum of 40 hours per week
and also acknowledged that given his position the defendant
may be
required to work beyond the working hours of the Fund including
Saturdays, Sundays and public holidays.
Clause 8 of the agreement provided that
during the term of employment the defendant would be based at the
head offices of the Fund
situated at 12 Fredman Drive, Sandton except
for services which would be rendered during business trips as when
reasonably necessary.
Clause
8 imposed the obligation on
the
Fund
to
furnish
office
space
and
equipment,
technical,
secretarial
and
clerical
assistance
to the defendant and other such facilities and services as may be
reasonably necessary and suitable to his position to
enable him to
perform the duties required of him in an efficient and professional
manner at the head office.
[86]
It
emanates from the evidence of both the plaintiff and defendant that
the rules of the South African Local Authorities Pension
Fund had to
be amended to give effect to the defendant’s appointment as
employee. The revised rules gave effect to the appointment
of the EC
to hold office in line with the terms of office of the board of
trustees.
[27]
Clause
2.7.1 provided for the board of trustees and members of committee to
elect a chairperson and vice chairperson from the members
who would
hold office for a period prescribed in rule 2.6.2 or such other
period as the trustees may from time to time decide.
[87]
Clause 2.7.2 provided that the board of
trustees may appoint a person to be the chairperson of the board of
trustees and may also
appoint the chairperson of the board of
trustees as an EC provided that the board of trustees concluded a
service level agreement
with the EC.
Submissions of the
parties
[88]
The respective submissions of the parties
were canvassed in oral argument as well as the written heads of
argument submitted. In
essence the defendant relied on the parole
evidence rule and indicated that the extrinsic evidence of the
plaintiff namely the
evidence of the resolutions and board minutes
was inadmissible. Once the court excluded such evidence all the court
was left with
was the evidence of the plaintiff which was admissible
provided it did not contradict the terms of the agreement.
[89]
Relying on the principles enunciated in
Endumeni
the agreement referred to both EC and
CEO and the court must therefore accept that the defendant was
appointed as EC which comprised
two roles namely that of EC which was
for a fixed term which term ended when the term of office of the
Board of Trustees ended
and that of CEO which continued and was a
permanent position.
[90]
The plaintiff terminated the employee’s
employment as CEO without cause and is thus liable to compensate him
for the remaining
period of employment until his retirement and he
must thus succeed in his counterclaim.
[91]
Regrettably
Mr
Khumalo
despite being given several
opportunities to do so during oral argument could not indicate to the
court how his submissions in relation
to the applicability of the
parole evidence rule and the principles of interpretation as
enunciated in
Endumeni
ought to be applied by the court when
interpreting the agreement. He also could not assist the court in
indicating which of the
evidence presented on the resolutions and
minutes of board meetings the court ought to disregard and consider
despite being given
an opportunity to do so in argument and despite
being given an opportunity to supplement his written heads of
argument in this
respect which he declined to do.
[92]
The plaintiff submitted that if there is a
dispute about the admissibility of extrinsic evidence and reliance is
placed on the parole
evidence rule the Constitutional Court in
University of Johannesburg
is
applicable and says that context is everything and the court must err
on the side of caution and admit such evidence and not
limit itself
to the words of the agreement only.
[93]
The plaintiff submits that the defendant’s
counterclaim must fail as on a proper construction and interpretation
of the agreement,
the position of EC, which catered for the dual
appointment of Chairperson of the Fund and CEO came to an end through
the effluxion
of time. The sole intention was to appoint him to the
position of EC hence the rule amendment.
[94]
The rules of the Fund give effect to the
agreement being signed. It is only once a rule amendment takes place
to give effect to
the position of EC are the terms of the agreement
negotiated and the agreement signed. The board minutes are consistent
in that
they only refer to the appointment of EC on a fulltime basis
not on a permanent basis. Clause 4.3 is inconsistent with these
minutes
and resolutions taken namely that the defendant was employed
on a full time basis for the term of office of the board of trustees.
[95]
The only way for him to perform duties on a
full-time basis as employee is to appoint him as CEO. The position of
Chairperson of
the Board is an elected position. It could never have
been the intention of the plaintiff to elect office bearers but be
saddled
with a CEO ad infinitum to conduct the business of the Fund.
The agreement can never supercede the rules of the Fund which is to

cater for the business of the Fund.
[96]
Consequently, the agreement ended through
the effluxion of time. The plaintiff submits that the claim in
reconvention cannot succeed
as the agreement was terminated with
cause as the defendant repudiated the agreement.
The parole evidence rule
and the admissibility of extrinsic evidence when interpreting the
agreement.
[97]
I propose to deal firstly with the
defendant’s submission that the parol evidence rule applies and
that this court cannot
apply the rules of interpretation as
enunciated in
Endumeni
and
the line of authorities when interpreting the agreement. The court
must exclude all extrinsic evidence presented during the
trial
specifically that in relation to the resolutions taken by the Board
of trustees at its various meetings and the minutes of
these
meetings.
[98]
The
Constitutional Court in
University
of Johannesburg v Auckland Park Theological Seminary and Another
[28]
considered
the interplay between the need to allow extrinsic evidence to
determine the context in which a contractual provision
appears and
the relevance of the parol evidence rule.
The
Constitutional Court followed the process of interpretation as
enunciated in the line of SCA cases and considered the law and

emphasised the importance of considering the context and purpose of a
contractual provision when interpreting a contract.
[99]
It
stated as follows
[29]
:
‘
Where,
in a given case, reasonable people may disagree on the admissibility
of the contextual evidence in question, the unitary
approach to
contractual interpretation enjoins a court to err on the side of
admitting the evidence.’
[100]
In
my view, the effect of the decision in
University
of Johannesburg
is
that a court should err in favour of admitting all extrinsic evidence
and this approach would not affect the application of the
parol
evidence rule.
What
has become evident from the decisions is how our courts have
struggled to balance the conflict between the need to allow extrinsic

evidence in order to understand the context in which an agreement has
been concluded and the restriction placed on the admission
of
extrinsic evidence by the parol evidence rule.
[30]
[101]
In
the decision of
KPMG
Chartered Accountants
[31]
the
SCA attempted to reconcile this conflict by explaining that the parol
evidence rule remains part of our law but must be used
as
conservatively as possible as evidence may be admissible to
contextualise a document to establish the factual matrix or purpose.
The
SCA in
Silostrat
(Pty) Ltd and Others v Strydom NO and Others
[32]
summarised
the principles to be followed from the judgements in
KPMG
,
Endumeni
and
City
of Tshwane
regarding
the interplay between the admission of extrinsic evidence to provide
context to an agreement and the parol evidence rule
as follows:
‘
Central
to the interpretation of legal documents is the principle that
meaning must be attributed to the words used by the parties
in the
document. Although evidence of context is admissible as an
interpretative aid such evidence may not be led to alter the
meaning
of the clear and unambiguous words used in an agreement’.
[33]
[102]
The Constitutional Court endorsed the view
that there was no limit as to the amount or type of contextual
evidence that may be adduced
and it is for a court to determine the
weight to be placed on such evidence.
At
para 67 of the Constitutional Court judgement the court held the
following:
‘
This
means that parties will invariably have to adduce evidence to
establish the context and purpose of the relevant contractual

provisions.
That
evidence could include the pre-contractual exchanges between the
parties leading up to the conclusion of the contract and evidence
of
the context in which a contract was concluded.’
[103]
What has been emphasized in all the
decisions of the SCA and which has been endorsed by the
Constitutional Court is that
context is
everything
(my emphasis). Consequently,
this court must err on the side of admitting the evidence in order to
properly interpret the context
and purpose of the contractual
provisions. To do so will lead to a business-like and sensible
meaning being attributed to the contract
of employment.
The interpretation to be
ascribed to the agreement concluded between the parties
[104]
I align myself with the principles set out
in paragraphs 61 to 79 relating to the manner in which agreements
must be interpreted.
Of importance when interpreting the contract is
to guard against considering the ordinary meaning of words used,
limited to the
particular clause itself. The intention of the parties
must be considered as expressed in the balance of the contract as a
whole,
the purpose for which they were introduced and the factual
matrix in which the document came into existence. Therefore, the
interpretation
which the defendant contends for, namely that one must
only consider the particular clause in isolation, is an incorrect
approach.
[105]
An analysis of the evidence presented
is necessary. The minutes of the board
meetings refer to the position of EC as do the resolutions and the
contract of employment.
The position of the defendant was that of EC.
When the defendant
testified
he did not make use of any documentation and relied solely on his
oral evidence in support of his contention that he was
appointed to
the positions of EC and CEO employed by the Fund on a permanent
basis.
[106]
In essence, he testified that:
(a)
the plaintiff approached him to be employed
on a full-time basis. The only bar to his employment on a full-time
basis was that there
had to be an amendment to the
rules
which governed the pension Fund, such rule amendment was subsequently
approved and he then commenced with full time employment
with the
Fund;
(b)
the position created was a dual position
which covered both his elected position as trustee and chairperson of
the board of trustees
and his employment as CEO. Because the position
of a chairperson was an elected position he did not need to sign a
contract of
employment with the board of trustees but only needed to
do so to regulate the employer and employee relationship insofar as
it
concerned his position as CEO;
(c)
the Fund would not have been able to employ
him full time as a chairperson as this was an elected position;
(d)
when he was appointed as EC he had served
on the board of trustees for 13 years and was fully aware that his
term as chairperson
of the board of trustees would run concurrently
with the term of office of the board and could not be a permanent
position.
[107]
During the course of cross examination the
following evidence emerged.
In
relation his understanding of the term “indefinite term”
in the contract of employment, the defendant testified that
he
understood it to mean that the contract would exist until terminated
by either party in terms of clause 4.3 alternatively until

retirement. He also confirmed that the contract of employment between
him and the Fund had been terminated and accepted that it
had come to
an end. In addition he acknowledged that the contract of employment
for the position of EC combined both the offices
of chairman of the
board as well as CEO officer of the Fund.
[108]
In respect of the circumstances which led
to the rule amendment for the position of EC, the defendant testified
that he was not
aware of how this came about as he was not part of
the meetings and was excused from the meetings when discussions on
this took
place but as far as he was aware for him to be appointed on
a full time basis the Fund had to create the position of executive
chairperson.
[109]
When it was suggested to him that the
amendment to the rules was necessitated to regulate his full time
employment with the Fund
and consequently his contract of employment
could not usurp or alter the rules of the Fund he accepted this but
sought to qualify
his answer. He testified that although he accepted
that his contract of employment could not amend the rules of the
Fund, the rules
did not refer to the position of CEO. During the
course of the defendant’s evidence he constantly referred to
what the board
of trustees wanted and what it wanted to achieve when
it considered his full-time employment to the Fund and as a
consequence,
he agreed that the minutes of the various board meetings
would be relevant specifically those meetings where the issue was
raised.
[110]
During the course of cross-examination of
the defendant, the minutes of several board meetings were canvassed
where the issue of
the appointment of the defendant as chairperson as
well as the creation of the post of principal officer as a permanent
position
was discussed. This was also canvassed during the course of
the plaintiff’s witness’, Hendry Collins evidence. It
became
evident from canvassing the contents of the various minutes of
the board that the minutes did not reflect that a separate and
permanent
appointment of a CEO was discussed. What was consistently
canvassed and discussed at all times during the board meetings was
the
appointment of an EC which role covered both the position of
chairperson and CEO on a fixed term basis and consequently, because

the minutes did not discuss the possibility of appointing a CEO on a
permanent basis that could never have been the intention of
the
board.
[111]
In response to this proposition the
defendant indicated that if the board in concluding the contract of
employment with him acted
outside the minutes and its mandate he
could not be held responsible for this.
In
response to this, it was suggested to him that if the board acted
contrary to its mandate and the rules and legislation he as

chairperson owed the board a fiduciary duty to act in the best
interests of the Fund and consequently it was incumbent on him to

correct any wrong doing or obvious error.
His response was that he could not be held
responsible for mistakes made by the board of trustees.
[112]
When questioned by
Mr
Peter
asked as to who he reported to as
CEO the defendant testified that he reported directly to the board
that is all of the trustees.
When
it was pointed out to him that in August
2016 there was no board of trustees in existence for him to report
to, he indicated responded
that he would have reported to the interim
board established by the FSB.
When
it was pointed out to him that the FSB only established the interim
board in September 2016, he indicated that whilst there
was this
hiatus it did not mean that his duties ceased.
[113]
Additionally, when questioned as to what
work he performed in August 2016, he confirmed that he was dealing
with stakeholders and
compliance issues having been mandated by the
previous board of trustees.
When
questioned as to why he did not communicate his appointment as CEO to
the FSB, rather surprisingly he testified that once the
Registrar of
Pension Funds had made a decision that everyone vacate their
positions,
no one
could challenge that decision, not even a CEO as the registrar was
acting in accordance with s 13 of the Pension Funds Act.
[114]
During the course of the trial the
defendant was served with a request for further particulars which
required him to provide copies
of all work performed during the
months of August and September 2016.
It
is common cause that the plaintiff served a notice in terms of Rule
35(3) on the defendant on 29 April 2022 in which it sought
the
defendant to provide ‘all e-mails proving work done at the
Plaintiff by the Defendant from 3rd
August
2016 to 25th
October
2016.’ The defendant was required to state under oath where the
documents were and to make such documents available.
[115]
It is further common cause that during the
course of his cross examination the defendant was asked to produce
the documents.
He
testified that he had provided some of the documents but not all were
provided as he misunderstood the contents of the Rule 35(3)
notice.
It became evident that none of the documents requested to
substantiate the work he did and the services he rendered in
August
and September 2016, when the board was not in office were supplied.
He could not provide any proof of the work
done when he testified that he tendered his services in August and
September to the Fund.
[116]
The emails which he had produced in
response to the Rule 35(3) notice were canvassed with him during the
trial, and it became evident
the series of emails did not disclose
work done and once again he indicated that he misunderstood the
request.
He also
testified that he did not approach the interim board appointed by the
FSB to tender
his services as CEO and the
reason for this was because he was not invited to any meetings and
was excluded.
[117]
What emerged from the evidence and
correspondence presented was that elections had taken place in
certain of the provinces. A ‘board’
had been appointed
and when the defendant wrote to the FSB, he proposed four names
including himself to serve as an interim board.
This proposal was not
accepted by the FSB as the elections were not held in compliance with
the rules of the Fund.
[118]
The defendant testified in response to the
suggestion that he had breached his contract of employment by failing
to report for work,
that he could work from home and that a practice
had developed that employees could work from home as they were all
based in different
provinces.
[119]
The defendants evidence must be viewed
against that tendered by Hendry Collins specifically in relation to
the resolutions taken
at various board meetings and the position of
EC.
[120]
The defendant did not impress me as a
witness. During the course of cross- examination he was extremely
antagonistic and unco-operative
and reluctant to answer questions and
propositions put to him. Often a question and/or proposition had to
be repeated three times
and still he would refuse to respond. I agree
with the submission of Mr
Peter
that
his evidence was contrived and self-serving and he was inconsistent
and contradicted himself in a number of respects.
This is demonstrated by inter alia the
following.
He
acknowledged that he knew the rules of the fund, and how the rule
amendment came about and what it served to regulate namely
the dual
role of chairperson and CEO. However, when pressed for a concession
in light of his own evidence and the contents of the
board minutes
and the terms of the contract itself, he testified that the rules did
not speak of a CEO and the appointment of CEO
was beyond the scope of
the rules.
[121]
When questioned as to who he would have
reported to when the previous board of trustee’s term expired
he said the interim
board.
When
he was questioned pertinently as to when and whether in fact he had
tendered his services to the interim board when it was
appointed, his
flippant response was that the interim board did not invite him to
any
meetings.
He
was steadfast in his assertions that he continued to work for the
fund in August and September 2016. However he was forced to
concede
that despite service of a Rule 35(3) notice, he did not produce any
proof of having tendered or actually performing any
work despite
being pertinently called upon to do so. He had to eventually concede
that the emails which he provided did not substantiate
his allegation
or constitute evidence that work had been done for the Fund.
[122]
What stood out for me and signified his
dishonesty was his disavowal of the contents of the minutes of the
board meetings and that
he bore no knowledge of what was discussed
specifically in relation to his appointment as EC to perform dual
roles. He remained
steadfast that he was not present for these
discussions and would excuse himself from the meetings, yet that he
did so on every
occasion is not borne out by the minutes.
[123]
Whilst I accept that at times during the
course of the meeting of the board of trustees he may have been
excused, he was the chairperson
of the Board and the minutes of the
previous board meeting were circulated and adopted at the next
meeting of the board of trustees.
He
would thus have had sight of these minutes despite him being excused
in his capacity as chairperson. All the minutes produced
reflect his
signature thereon as reflecting an accurate record of the particular
meeting.
[124]
In addition his dishonesty is corroborated
by the fact that during his evidence and cross- examination he
consistently referred
to the intention of the board to ‘absorb’
him on a full-time basis. Even though he reluctantly accepted that
the registrar
could not be challenged after having made a decision
when it was suggested to him that the registrar had directed
correspondence
wherein it was mentioned that any action taken on
behalf of the fund after 3 August 2016 was invalid and as such to the
extent
that he did so, he did not have any authority and thus did not
validly engage with stakeholders of the fund, he then changed his

evidence to testify that he did not understand the words ‘no
action’ to mean that nothing could be done by him.
[125]
The evidence of the defendant does not
support or corroborate his version of the interpretation to be
attached to the specific clauses
in the employment contract,
specifically clauses 4.2 and 4.3.
[126]
Essentially
what the defendant and Mr Khumalo want this court to do is to
consider those clauses in isolation which falls foul of
the rules of
interpretation and construction imposed by the decision in
Endumeni
[34]
and
other like decisions. On a proper construction and interpretation of
the agreement having regard to the relevant background
and
circumstances, the parties’ subsequent conduct specifically
having regard to the evidence of Hendry Collins a former
board of
trustee member and also the minutes of the various board meetings, it
is apparent in my view that what was envisaged by
the parties was for
the defendant’s appointment to be as EC. Such position of EC
comprised dual roles- that of chairperson
and CEO. His appointment as
CEO would have enabled him to be appointed on a full time basis to
attend to Fund business.
[127]
The appointment of EC was for a fixed
period that is both his position as Chairperson and CEO was for a
fixed period to align with
the term of office of the Board of
Trustees.
His
position of EC was regulated by the rules of the pension fund which
in turn regulated the term of office for that position.
That much is clear.
On the probabilities no amendment to the
rules would have been necessitated had the parties intended
otherwise.
A rule
amendment was necessary which was conceded by the defendant in order
for his appointment to be effected and for his term
of office to be
brought in line with the rules of the pension fund.
[128]
It was never envisaged that the defendant
would be employed on a permanent basis. That much is clear from the
resolutions taken
at the board meetings. Any other interpretation in
my view would result in an absurdity and an unbusiness-like meaning
being attributed
to the contract of employment.
The only issue in my view which arises for
this court to consider within the context of considering the proper
construction and
interpretation of the employment agreement are
clauses 4.2 and 4.3. In my view one cannot look at the clauses in the
employment
contract in isolation and although the defendant testified
concerning clause 4.2 this was not specifically pleaded in the claim

in reconvention.
Having
regard to clauses 4.2 and 4.3 these are at variance with the whole
body of the agreement and the rules of the fund which
specifically
regulate the agreement and which was specifically amended.
These clauses contradict the minutes of the
various board of trustees meetings which led to the rule amendment
which regulated the
appointment of the executive chairperson.
If this court were to interpret clauses 4.2
and
4.3 in isolation disregarding the
underlying context and circumstances as testified to, the entire
contract it would lead to an
absurd and unbusinesslike interpretation
of the agreement which this court is not prepared to do.
[129]
In
addition I align myself with the decision in
Attorney-General
Transvaal Appellant v Additional Magistrate for Johannesburg
Respondent
1924
AD 421
at 426 which is authority for the proposition that words
inserted into an agreement through inadvertence or error can be held
to
be insensible when an absurdity would follow from giving effect to
the words as they stand.
[35]
[130]
This is demonstrated by the Fund being
responsible to effect payment for the balance of the agreement or ad
infinitum in the event
of the death of the defendant. It is simply
not what was contemplated by the parties. That is what would result
from the defendant’s
interpretation.
The alternative defence,
that of repudiation of the agreement by the defendant
[131]
A second issue which this court must decide
as an alternate defence to the counterclaim is the aspect of the
repudiation of the
contract.
The
defendant contends that the contract was terminated without cause
whereas the plaintiff contends it was terminated with cause.
The effect of clause 4.3 of the employment
contract means that if the contract has been terminated with cause
the defendant cannot
succeed in his counterclaim.
[132]
It
is trite that an employer may terminate a contract of employment
where the conduct of an employee amounts to either a repudiation
of
the contract, or a breach of a material term of the contract of
employment.
The
leading authority on repudiation is that of
the
SCA
in
Datacolor
International
(Pty)
Ltd
v
Intamarket
(Pty)
Ltd
[36]
in
which
in
a
unanimous judgement dealt fully with the principles relating to a
repudiation of contract. The minority judgement of Scott JA
agreed
with the majority of Nienaber JA relating to the legal principles at
paragraph 37 of the judgement.
The
court found that repudiation consists of two parts namely the act of
repudiation by the guilty party, evincing a deliberate
and
unequivocal intention to no longer be bound by an agreement and
secondly the act of the adversary ‘accepting’ the
breach.
The
SCA acknowledged that repudiation is a breach in itself
[37]
and
expressed its disapproval of the language frequently used in prior
decisions of offer and acceptance in the context of repudiation.
[133]
At paragraph 1 of the judgement Nienaber JA
held the following:
‘
Both
the analogy and the language of offer and acceptance, a legacy from
England, have on occasion been deprecated by this court.
The better view is that repudiation is a
breach in itself that the court’s ‘intention’ does
not in truth have
to be either deliberate or subjective but is simply
descriptive of conduct heralding non- or malperformance on the part
of the
repudiator;
and
that the so-called “acceptance”, although a convenient
catchword, does not “complete” the breach but
is simply
the exercise by the aggrieved party of his right to terminate the
agreement’ (case references omitted).
[134]
The court in
Datacolor
had cause to consider whether the
plaintiff’s letter of termination constituted a repudiation of
the agreement with the defendant.
In
considering this at paragraph 16 the court held the following:
‘
Where
one party to a contract, 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, he is said to
“repudiate” the contract ...
Where
that happens, the other party to the contract may elect to accept the
repudiation and rescind the contract.
If
he does so, the contract comes to an end upon communication of his
acceptance of repudiation and rescission to the party who
has
repudiated...
[38]
This is the
conventional exposition of the operation of the doctrine of
repudiation leading
to
rescission
with
its
emphasis
on
the
guilty
party’s
intention
and
the
innocent
party’s
acceptance.
At
the same time this court has repeatedly stated that the test for
repudiation is not subjective but objective.’
[135]
Further the court held:
‘
The
emphasis is not on the repudiating party’s state of mind, on
what he subjectively intended, but on what someone in the
position of
the innocent party would think he intended to do; repudiation is
accordingly not a matter of intention, it is a matter
of perception.
The perception is that of a reasonable
person placed in the position of the aggrieved party.
The test is whether such a notional
reasonable person would conclude that proper performance (in
accordance with a true interpretation
of the agreement) will not be
forthcoming.
The
inferred intention accordingly serves as the criterion for
determining the nature of the threatened actual breach.’
[136]
Further at paragraph 18 the court held the
following:
‘
The
conduct from which the inference of impending non- or malperformance
is to be drawn must be clear cut and unequivocal, i.e.
not equally
consistent with any other feasible hypothesis. Repudiation, it has
often been stated, is “a serious matter”
requiring
anxious consideration and - because parties must be assumed to be
predisposed to respect rather than to disregard their
contractual
commitments - not lightly to be presumed.’
[137]
The plaintiff’s witness, Mr Collins
testified that he had been appointed to the interim board by the FSB.
He confirmed that the defendant did not
report to the Sandton office for the work prior to the appointment of
the interim board
and also did not report to the interim board once
it had assumed office.
During
the course of cross examination the defendant was shown communication
which he had written on 11 August 2016 about the end
of term of the
board as well as the appointment of a new interim board.
[138]
He was aware that an interim board had to
be appointed but also initiated the engagement.
He testified that he had held a meeting
with the FSB and was requested to draft that correspondence.
At all material times in my view he knew of
the pending appointment of an interim board.
In line with the decision in
Datacolor
I must approach the question of
repudiation from the position of the interim board. When the interim
board assumed office it was
not approached by the defendant at any
point contending to be the C
EO of the board
and neither did he report on the activities he had undertaken in the
interim period until August 2016 when there
was no board appointed.
[139]
The evidence of Mr Collins was that the
termination letter was sent to the defendant due to the fact that
from the time the term
of office of the previous board had expired
the defendant had not and could not have undertaken any work on
behalf of the plaintiff
and therefore was not entitled to receive a
salary.
The
defendant was requested during the course of his evidence on a number
of occasions to indicate what work he had done and in
addition was
asked to produce all the work he had done from 3 August 2016 by way
of the Rule 35(3) Notice.
That
he did not perform any work and was unable to produce all the work
that he had done was not challenged by him and was confirmed
in my
view during the course of cross examination.
[140]
In addition, what emanated from the
defendant’s evidence was that he did not report to the head
office to tender his work.
Clause
6 of the agreement makes specific reference that employees of the
fund had to work from the Sandton offices which is where
the head
office of the Fund is based.
Collins
directly contradicted the defendant’s evidence that a practice
had developed allowing employees of the Fund to work
from home.
[141]
In fact, his evidence was that there was no
practice which developed allowing employees to work from home and
that is also inconsistent
with the terms of the contract of
employment. He confirmed that all Fund employees except for specific
consultants were based at
the head offices of the Fund in Sandton.
As a result, in my view, relying on the
decisions and principles set out in
Datacolor
the plaintiff has proved that the
defendant’s conduct amounted to a repudiation of the contract
which repudiation the plaintiff
accepted.
[142]
Consequently, in terms of clause 4.3 of the
contract of employment the defendant’s employment was
terminated with cause and
consequently the counterclaim must fail.
[143]
To sum up, the plaintiff has established
its claim for repayment of the salary paid to the defendant for the
months of August and
September 2016. What emerged from the evidence,
is that the defendant was not entitled to payment as the three month
period within
which the business of the former board had to be
completed expired by 3 August
2016. In
addition the evidence was that the administrator had failed to stop
the salary payments to the defendant.
[144]
In addition, the defendant was also not
entitled to payment as his employment had been terminated for cause.
[145]
The defendant’s counterclaim likewise
cannot succeed as on a proper construction of and interpretation of
the agreement he
was appointed as EC to serve the dual roles of
Chairperson of the Fund and CEO. The term of office of EC (both
roles) terminated
when the term of office of the board of trustees
ended. His appointment as CEO could not have been for an indefinite
period.
[146]
In addition his employment was terminated
for cause and consequently he is not entitled to payment until
retirement.
Costs
[147]
The trial of the matter was enrolled for
hearing on several occasions and adjourned. The presiding Judges
dealt with the costs occasioned
when the matter was postponed. The
trial eventually proceeded before me on 9 and 10 September 2019. The
trial commenced on 9 and
10 September 2019, on which date it was not
completed and was adjourned sine die with the costs of 10 September
2019 reserved.
It was then enrolled for hearing from 3 to 6 May 2022.
[148]
When the defendant testified he did so
largely from memory and referred to minutes of board meetings and
discussions and resolutions
taken at such meetings. In light of his
evidence on 9 September 2019, counsel for the plaintiff requested the
minutes of such meetings
from the plaintiff. A bundle of documents
was provided which the defendant’s legal representative
indicated he had seen before.
The matter was rolled over until 10
September 2019 to afford the plaintiff’s counsel time to
canvass them and take instructions.
[149]
On 10 September 2019, I was advised that
the defendant was objecting to the use of the documents and a formal
application would
have to be brought for the late discovery
of
the documents. As a consequence, the trial was adjourned and the
costs of 10 September 2019 were reserved.
[150]
Both counsel who appeared on the resumed
hearing indicated that they were entitled to costs if successful.
Neither one of them addressed
me on the application referred to on 10
September 2019. In my assessment however, the use of the documents
was crucial in respect
of the context in which the employment
contract came about. One would have expected the defendant to have
discovered these documents
as well.
[151]
In my view there is no reason to depart
from the normal rule in relation to costs and the successful party
ought not to be deprived
of their costs. As the parties did not
specifically address me on the reserved costs and advise me of the
application alluded to
on 10 September 2019 it is appropriate that
each party bear their own costs of 10 September 2019.
Order
[152]
In the result the following order is
issued:
1.
Judgment is granted against the defendant
in favour of the plaintiff for:
1.1.
Payment
of the sum of R 270 074.22;
1.2.      Interest
thereon at the rate of 10.50 % from 3 August 2016 to date of final
payment both
days inclusive;
2.
The claim in reconvention is dismissed with
costs.
3.
The defendant is directed to pay the
plaintiff’s cost of suit. Each party is to bear its own costs
for 10 September 2019.
Henriques J
Case
Information
Date
of hearing:           9
and 10 September 2019,
3 to 6 May 2022
Date
of Judgment:           11
April 2023
Appearances
Counsel
for the Plaintiff:
L Peter
Instructed
By:

Govindasamy, Ndzingi and Govender
Incorporated
211 Burger Street
Pietermaritzburg
YG/dg/N1400/200/30
Tel: 033 345 3427/9
Fax: 033 342 7583
litigation@gngattorneys.co.za
yugusan@gngattorneys.co.za
Counsel
for the Defendant:        Z S M
Khumalo
MS Dlamini Attorneys
232 Boom Street
Pietermaritzburg
Tel: 071 015 63 89
Ref: DKNJ-B MAPHANGA
msdlaminiattorneys@gmail.com
;
zwelakhumalo@gmail.com
This
judgment was handed down electronically by circulation to the
parties’ representatives by email, and released to SAFLII.
The
date and time for hand down is deemed to be 09h30 on 11 April 2023.
This
judgment was handed down electronically by circulation to the
parties’ representatives by email, and released to SAFLII.
The
date and time for hand down is deemed to be 09h30 on 11 April 2023.
[1]
At
the commencement of the trial on 9 September 2019, Mr Rall SC who
appeared for the plaintiff on that occasion indicated that
the
parties had reached agreement on the claim for the tools of trade
and the only claims which had to be adjudicated upon related
to the
repayment of the sum of R270 074.22 in respect of the overpayment of
salary and the defendant’s claim in reconvention.
[2]
Pages
39 to 41 Plaintiff’s index to pleadings dated 20 April 2022
[3]
Pages
47 to 53 Plaintiff’s index to pleadings dated 20 April 2022
[4]
Reference
to ‘the Fund” is to the plaintiff being the South
African Local Authorities Pension Fund.
[5]
At
paragraph 2.4
[6]
During
oral argument Mr Peter acknowledged that this would only apply if
the plaintiff failed on grounds (a) and (b) and was related
to the
quantum of the defendant’s counterclaim.
[7]
Plaintiff’s
index to general bundle, volume 4, pages 47 and 48
[8]
Page
118 plaintiff’s index to general bundle, volume 5
[9]
Page
124 plaintiff’s index to general bundle, volume 5
[10]
Pages
126 to 141 plaintiff’s index to general bundle, volume 5
[11]
Pages
135 and 136, Minutes of the Board of Trustee’s Meeting held on
22 to 23 August 2013, plaintiff’s index to general
bundle,
volume 5.
[12]
Pages
142 to 159, plaintiff’s index to general bundle, volume 5
[13]
Page
148, Minutes of the Board of Trustees on 13 to 14 March
[14]
Coopers
& Lybrand and others v Bryant
[1995] ZASCA 64
;
1995
(3) SA 761
(A) at 768A-E.
[15]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) para 18.
[16]
Bothma-Batho
Transport (Edms) BPK v S Bothma & Seun Transport (Edms) BPK
2014
(2) SA 494
(SCA) para 12.
[17]
Rainy
Sky SA and Orsd v Kookmin Bank
[2011]
UKSC 50.
[18]
Tshwane
City Metropolitan Municipality v Blair Atholl Home Owners
Association
2019
(3) SA 398
(SCA) at para 61
[19]
Capitec
Bank Holdings Limited and another v Coral Lagoon Investments 194
(Pty) Ltd and others
2022
(1)
SA 100 (SCA)
[20]
Capitec
Bank Holdings Limited and another v Coral Lagoon Investments 194
(Pty) Ltd and others
2022
(1)
SA 100
(SCA) at para 51
[21]
V
v V (A 5021/12) (2016) ZAGPJHC 311 (24 November 2016).
[22]
KPMG
Chartered Accountants (SA) v Securefin Ltd & another
2009
(4) SA 399
(SCA) para39
[23]
Novartis
SA (Pty) Ltd v Maphil Trading (Pty) Ltd
2016
(1) SA 518 (SCA).
[24]
Who
subsequently appeared for the Plaintiff when the trial resumed in
May 2022.
[25]
Rielly
v Seligson and Clare Ltd
1977
(1) SA 626
(A) and
Kalil
v Standard Bank of South Africa Ltd
1967
(4) SA 550
(A).
[26]
Contract
of employment between the plaintiff and defendant, plaintiff’s
index to general bundle, pages 1 to 23.
[27]
Clause
2.6.3, page 29, plaintiff’s index to general bundle, volume 1.
[28]
University
of Johannesburg v Auckland Park Theological Seminary and Another
2021
(6) SA 1 (CC)
[29]
At
para 68
[30]
City
of Tshwane
at
paragraphs 62 and 63
[31]
KPMG
Chartered Accountants (SA) v Securefin Ltd & another
2009
(4) SA 399
(SCA) para 39
[32]
Silostrat
(Pty) Ltd and Others v Strydom NO and Others
32
[2021] ZASCA 93
[33]
At
paragraph 43
[34]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) (
Endumeni
).
[35]
At
426
[36]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
2001
(2) SA 284 (SCA)
[37]
At
287J
[38]
Per
Corbett JA in
Nash
v Golden Dumps (Pty) Ltd
1985
(3) SA 1
(A) at 22D-F.