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[2022] ZAFSHC 270
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Mgoqi v Centlec (SOC) Limited and Another (4638/2020) [2022] ZAFSHC 270 (20 October 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
Number: 4638/2020
Reportable:
YES
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
In
the matter between:
N.A.
MGOQI
APPLICANT
and
CENTLEC
(SOC) LIMITED FIRST
RESPONDENT
MANGAUNG
METROPOLITAN
MUNICIPALITY SECOND
RESPONDENT
HEARD
ON:
11
AUGUST 2022
CORAM:
MATHEBULA,
J
DELIVERED
ON:
This
judgment was handed down electronically by circulation to the
parties' representatives by email and by release to SAFLII on
20
OCTOBER 2022. The date and time for hand-down is deemed to be 20
OCTOBER 2022 at 11H30.
[1]
This is a third judgment to two others delivered by my brothers
Mhlambi and Molitsoane
JJ on 11 November 2020 and 18 March 2021
respectively in regard to a dispute between the same parties. In
these proceedings the
applicant is seeking an order against the first
respondent to employ him to the position of Executive Manager:
Engineering or the
one equivalent to it within its staff component.
In addition to be provided with the concomitant emoluments and
benefits. The applicant
was employed as the Chief Executive Officer
of the first respondent until his contract was terminated by
effluxion of time. The
first respondent is a business entity
established in terms of our laws and wholly owned by the second
respondent. Only the first
respondent filed papers opposing this
application. No order is sought against the second respondent.
[2]
Before coming to the document out of which the issue arises, I pause
to set out the
factual matrix of this case. In my view there is no
real dispute of importance on the facts. The applicant entered the
workforce
of the first respondent as a trade worker in 1994. He rose
through the ranks and on 1 February 2013, he was appointed as an
Executive
Manager: Engineering. On 1 April 2015, after a rigorous
selection process, he assumed the role of the Chief Executive Officer
tasked
with the ultimate overall management of the first respondent.
The appointment to this position was for a fixed term of five (5)
years ending 31 March 2020. It is common cause that it was extended
until 30 June 2020.
[3]
A good ten (10) months later after the assumption of duties in his
latest position,
on 17 February 2016 to be exact, the applicant and
the first respondent entered into an employment agreement. The
applicant acted
in person and the first respondent was represented by
its then Chairperson of the Board of Directors (“the Board”)
to wit Mr Mthunzi Mbali. Both parties adhered to its terms and
conditions until the dispute arose. The first respondent represented
by its various Chairpersons of the Board conducted performance
appraisals as a regular review of his performance and contribution
to
it in line with the best human resources practices.
[4]
In the launching affidavit, the applicant averred that during its
meeting on 5 December
2019, the then Chairperson of the Board Mr
Nthimotse Mokhesi conveyed to him that they have decided to renew his
contract. All
the same, this changed after his contract was not
extended beyond 30 June 2020. Nothing much of substance turns on it
in relation
to the relief sought by the applicant.
[5]
The matter turns largely on the meaning and interpretation of clause
16.6 of the employment
agreement which reads:
“
Irrespective
of any provision to the contrary and/or despite what any other
provision may state on this agreement, upon expiration
of this
employment agreement and in the event that the Employer reflects not
to renew it on the same or similar terms, the Employee
will be placed
in the position which he previously held with the Employer
immediately prior to the conclusion of this employment
agreement and
shall continue his employment with the Employer until retirement age.
However, should the Employee’s position
not be available for
whatever reason, then the Employer will offer the Employee a position
equivalent to the position he occupied
immediately prior to the
conclusion of this employment agreement. By signing this employment
agreement, the Employees does not
in any way waive his permanent
employment status as an Employee of the Employer
.”
A
quite astonishing averment made by the first respondent in the papers
is that it was not aware of the existence of the clause
relied upon
by the applicant.
[6]
When it became apparent that the first respondent was not amenable to
the extension
of his contract as the Chief Executive Officer, the
applicant invoked the aforementioned provision. The first respondent
is opposing
such invocation on many fronts. It is averred that the
employment agreement was not placed before the Board for approval or
ratification.
Further that the Chairperson Mr Mthunzi Mbali acted
beyond his powers when the employment agreement sought to place the
applicant
in a reserved position. The main criticism levelled against
it is that it was against the fair processes of employment which must
be followed unapologetically by a State Owned Enterprise.
[7]
Mr Grobler for the applicant argued three (3) grounds upon which he
intimated that
the relief sought should be granted. Firstly, he
pointed out that the first respondent approached the Labour Court for
review of
the employment agreement either in its entirety or parts
thereof. The review application was dismissed by Harvey AJ on 29 June
2021. The application for leave to appeal and petition for leave to
appeal were equally dismissed. Therefore, the defences that
were
raised there, which are similar as in this application, have been
dealt with by another court of similar status. In essence
he was
raising a defence of
res judicata
.
[8]
On the second ground he contended that Mhlambi J dismissed the
application simply
because in the exercise of his wide discretion, he
concluded that the matter was not urgent. He emphasized that although
the learned
Judge dabbled on the merits, he did not deal with the
issues. He pertinently referred to the judgment which in his view
does not
justify the order made by the learned Judge. He argued that
the defence of
res judicata
relied upon by the first
respondent cannot succeed. The third point relate to the concurrent
jurisdiction of the High Court and
Labour Court to hear this matter.
He argued that the matter is properly placed before me and there is
no merit in the contrary
view.
[9]
The submissions of Mr Mokhare for the first respondent can be
summarised as follows.
He argued that in his papers, the applicant
has failed to discharge the necessary onus for the relief sought. He
pointed out that
the applicant was enforcing a contractual claim and
therefore bore the onus to prove the existence of the contract. In
this matter
the applicant was seeking specific performance and it is
common cause that the position sought is unavailable. He stated that
the
applicant did not make out averments for the existence of an
alternative position.
[10]
Turning to the Labour Court judgment he conceded that the court
declined to exercise jurisdiction
over the review application.
Nevertheless, he still argued that there is no merit in the
contention that the aforesaid judgment
has rendered the defences of
the first respondent
res judicata
. This point is kept alive by
the assertion that the Labour Court dismissed the matter purely on
the issue of condonation.
[11]
The main contention pertaining to the judgment of Mhlambi J is that
the learned Judge made certain
findings in respect of the merits. He
was non-committal on whether this judgment fits the requirements of
res judicata
. Overall he was of the view that I can proceed to
deal with the merits of the matter.
[12]
The anchor argument is that clause 16.6 is invalid and offends the
procurement policy of the
first respondent. Accordingly, this is an
aspect that the applicant conceded to in the founding affidavit. The
first respondent
as an organ of State must act within the prescripts
of the law. Therefore, the contentious clause cannot be given effect
to without
contravening the rule of law.
[13]
I now turn to the merits of those submissions. In response to a
direct question I posed to him,
Mr Mokhare confirmed unequivocally
that the existence of the agreement is not in dispute including the
disputed clause 16.6. This
concession, correctly made in my view,
simply means that the applicant has discharged the necessary onus.
The sole remaining issue
is its validity thereof to which I shall
return later in this judgment.
[14]
Counsel relied on the principle of
res judicata
although from
a different set of facts and circumstances. The decisive point raised
by the applicant is that the Labour Court and
subsequently the Labour
Appeal Court have dismissed the application of the first respondent
to declare the agreement as unlawful
alternatively unenforceable. The
cornerstone of the case for the first respondent is the judgment of
Mhlambi J. It was contended
that the learned Judge dismissed the
urgent application whereby the applicant sought the enforcement of
clause 16.6.
[15]
The principle of
res
judicata
implies that the matter has already been decided or settled on its
merits. It draws its strength on respect for court orders and
finality on litigation. The requirements accepted in a long line of
decided cases are that “
(i)
there must be a previous judgment by a competent court; (ii) between
the same parties (iii) based on the same cause of action
and with
(iv) respect to the same subject matter or thing
.”
[1]
It is trite that in enforcing the requirements as stated, they should
yield to the facts of each case. The party seeking to rely
on this
defence must allege and prove all the elements underlying the
defence.
[2]
[16]
On this occasion the transcribed record of the
ex tempore
judgment by Mhlambi J was annexed to the papers. This was not the
position when the matter served before Molitsoane J. The applicant
had launched an urgent application to enforce the provisions of the
agreement and substantially to order the first respondent to
pay his
emoluments. At the end of the hearing the learned Judge handed down
an order which reads: “
The application is dismissed with
costs which costs include the costs of the employment of two
counsel.
”
[17]
There are opposing views whether this order brought finality to the
or not within the common
understanding of the principle of
res
judicata
.
That question can only be answered correctly upon proper reading of
the judgment in context. It will serve no purpose to take
out a word
or phrase in isolation and use it as a basis for a particular view
point. In seeking to resolve the ambiguity of the
judgment (if any),
I bear in mind the reasoning adopted in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
to
examine its true meaning.
[3]
[18]
Counsel are in agreement, and I agree with them, that urgency is not
an independent ground for
dismissal of an application. It has been
held that to do so will be erroneous. As to how a court should deal
with a matter deemed
not to be urgent but brought to court on urgency
was articulated by Cameroon JA (as he then was) in the case of
Commissioner,
the South African Revenue Services v Hawker Air Services (Pty) Ltd;
Commissioner, South African Revenue Services v
Hawker Aviation
Partnership and Others
.
[4]
[19]
Although the judgment concentrated on only one point, that is
urgency, it was necessary for the
learned Judge not to be totally
oblivious of the merits of the application. It is only through the
assessment of the merits that
any court can pronounce on the issue of
urgency. In his judgment the learned Judge stated that having perused
and listened to the
arguments, this application is deserved of being
disposed of solely on the basis of urgency as there is no urgency
whatsoever in
the launching of the application. It cannot be clearer
than that. The learned Judge went on to consider the contentions made
on
the merits. He expressed an opinion and made no finding on the
merits.
[20]
There is another reason why this argument cannot be upheld. If the
first respondent genuinely
understood this judgment to have brought
finality to the matter, logic and common sense dictates that it would
not have approached
the Labour Court for a review application. The
sole purpose of that application is well documented
ie
to
declare the employment agreement of no force and effect. It is a fact
that litigation fortunes of the first respondent were overseen
by an
eminent senior counsel who ably argued on its behalf in all
applications. Taking that singular step, in my view, is a clear
demonstration that parties are on the same wavelength regarding its
status. It did not bring finality to the case.
[21]
The judgment of Molitsoane J does not come to the assistance of the
first respondent. The learned
Judge applied the principles of an
interim interdict to the facts as applicable to the case before him.
He concluded that the applicant
failed to establish a case for the
relief sought. The learned Judge underlined parts of clause 16.6 of
the employment agreement
only to hold that there was an alternative
relief not to make a finding on its invalidity.
[22]
On this point, applying the principles to this case with its own
facts and peculiarities I have
come to the conclusion that the
defence of
res judicata
raised on behalf of the first
respondent cannot succeed. On plain reading of the judgment, it did
not bring finality to the matter.
[23]
This brings me to the point whether the defence of
res judicata
,
this time raised by the applicant on the back of the Labour Court
judgment is applicable.
In casu
, all the requirements to
sustain the defence of
res judicata
are present. I am unable
to uphold the submission that the Labour Court did not deal with the
merits of the case, but only dismissed
it on the issue of
condonation. Therefore, I can still hear the arguments pertaining to
the invalidity of the employment agreement.
The fact is that the
Labour Court did not grant the relief to declare as unlawful or set
aside the employment agreement. This was
confirmed by the Labour
Appeal Court.
[24]
Counsel for the first respondent extensively argued another
opportunistic point relating to the
invalidity of the employment
agreement. I say so because the decision of the Labour Court put paid
to any efforts to declare it
or any provision thereto invalid. This
was a futile exercise to re-argue a matter which was ostensibly not
before me. Whether or
not Mr Mthunzi Mbali, the then Chairperson of
the Board, had the authority or not to enter in an employment
agreement with the
applicant is not up for determination. Similarly,
another submission is made about its legality. The law is trite that
the decision
exists in fact and it may give rise to legal
consequences for as long as it has not been set aside.
[5]
[25]
Counsel for the first respondent developed the mainstay of his
submissions around the decision
of the court in
National
Director of Public Prosecutions v Zuma
[6]
and relied almost exclusively on the paragraph that reads:
“
[26]
Motion proceedings, unless concerned with interim relief, are all
about the resolution of legal issues based on common cause facts.
Unless the circumstances are special they cannot be used to resolve
factual issues because they are not designed to determine
probabilities. It is well established under the Plascon-Evans rule
that where in motion proceedings disputes of fact arise
on the
affidavits, a final order can be granted only if the facts averred in
the applicant's (Mr Zuma's) affidavits, which have
been admitted by
the respondent (the NDPP), together with the facts alleged by the
latter, justify such order. It may be different
if the respondent's
version consists of bald or uncreditworthy denials, raises fictitious
disputes of fact, is palpably implausible,
far-fetched or so clearly
untenable that the court is justified in rejecting them merely on the
papers. The court below did not
have regard to these propositions and
instead decided the case on probabilities without rejecting the
NDPP's version
.” (Footnotes omitted)
[26]
This point which was argued with much vigour in the beginning was not
supported to its logical
conclusion. The concession by counsel for
the first respondent that the existence of the employment agreement
was not in dispute
rendered it redundant. The pick of the case for
the applicant is that the first respondent must perform in accordance
with the
provisions of the employment agreement. The first respondent
raised peripheral issues like how the prayers are couched in conflict
to the very agreement that the applicant seeks to enforce. This
submission is unmeritorious because it deliberately ignores the
very
essence of the case for the applicant.
[27]
The employment agreement provides that upon the expiration of his
contract as the Chief Executive
Officer and it is not renewed, he
will be placed by the first respondent to a position he previously
held. The proviso is that
if such position is unavailable, he will be
offered by the first respondent a position equivalent to the one
prior to his elevation
to that of the Chief Executive Officer.
[28]
The first respondent had done none of the above. The point made is
that the previous position
occupied by the applicant is no longer
available. That may well be so, but what about an offer to an
equivalent position. Counsel
submit that the applicant must state in
his papers that there is a position that is available and that it
must be offered to him.
This submission is misplaced because it is
based on the wrong reading of the employment agreement. It seems to
me to be unreasonable
to expect the applicant to have knowledge of
the internal dynamics of the first respondent and petition for an
offer. For all intents
and purposes he is no longer part of it and
only members of the Board and Management team will have such
knowledge. Placement in
this context cannot mean any other thing
except employment. The nature of such an offer must be made to him.
What is sought to
be enforced is an employer-employee relationship
within the ambit of the law of contract.
[29]
In all these circumstances, I have come to the conclusion that the
application must succeed and
all the defences raised by the first
respondent cannot be upheld. In the present case, specific
performance is both feasible and
possible to be implemented.
[30]
It follows, in my view, like in all other previous applications
between them that costs must
follow the result. The matter was
postponed on 9 June 2022 and the wasted costs occasioned by the
postponement stood over for adjudication
at a later stage. A
candidate attorney in the employ of the attorneys of record for the
applicant deposed to an affidavit which
explains the service of the
documents to the attorneys for the first respondent. Annexed to the
said affidavit are the read reports
by the recipients of the emails.
The conclusion is that the attorneys for the first respondent are
responsible for the resultant
postponement and their client must bear
the costs.
[31]
The Order is as follows: -
31.1.
The first respondent must in accordance with clause 16.6 of the
Employment Agreement concluded between the parties on 17 February
2016 place the applicant in the position of Executive Manager:
Engineering on/or before 1 November 2022.
31.2.
Should the position mentioned in sub-paragraph 31.1 above not be
available, the first respondent must offer the applicant
a position
equivalent to it.
31.3.
The first respondent must provide the applicant with commensurate
emoluments and benefits.
31.4.
The first respondent must pay the costs of the application which
includes wasted costs occasioned by the postponement on 9
June 2022.
M.A.
MATHEBULA, J
APPEARANCES:
Counsel
on behalf of the Applicant: Adv.
S. Grobler SC
Instructed
by:
Honey Attorneys
BLOEMFONTEIN
Counsel
on behalf of the First Respondent: Adv.
W.R. Mokhare SC
Instructed
by:
Tshangana Attorneys &
Associates
BLOEMFONTEIN
[1]
Ascendis
Animal Health (Pty) Ltd v Merck Sharpe Dohme Corporation and Others
2020
(1) SA 327
(CC) at para 71.
[2]
Democratic
Alliance v Brummer [
2021]
2 All SA 818
(WCC) at para 77.
[3]
2012
(4) SA 593
(SCA) at para 18.
[4]
[2006] ZASCA 51
;
2006 (4) SA 292
(SCA).
[5]
Magnificent
Mile Trading 30 (Pty) Ltd v Charmaine Celliers NO and Others
2020
(4) SA 375
(CC)
at
para 51.
[6]
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) at para 26.