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[2021] ZAGPJHC 111
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Mntambo v Piotrans (Pty) Ltd (2021/4397) [2021] ZAGPJHC 111; (2021) 42 ILJ 2298 (HC) (2 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER
JUDGES: NO
(3)
REVISED.
DATE:
2 August 2021
Case No: 2021/4397
In
the matter between:
VUSUMUZI
MNTAMBO
Applicant
and
PIOTRANS
(PTY)
LTD
Respondent
JUDGMENT
WILSON
AJ
:
1
On 18 January 2021, the respondent (“Piotrans”)
dismissed the applicant (“Mr. Mntambo”) from his position
as its General Manager: Strategy and Transformation. Piotrans gave
two reasons for its decision. The first reason was that Mr.
Mntambo
had committed various acts of misconduct that resulted in a
disciplinary hearing before Nqabayethu Buthelezi, an advocate
of this
court briefed on Piotrans’ behalf to preside over a
disciplinary inquiry into Mr. Mntambo’s conduct. Mr. Buthelezi
acquitted Mr. Mntambo of all the charges against him, but Piotrans
nonetheless rejected Mr. Buthelezi’s conclusions, and
purported
to substitute its own decision to dismiss Mr. Mntambo.
2
The second reason Piotrans gave was that Mr. Mntambo had, in
addition to the acts of misconduct alleged before Mr. Buthelezi, made
a series of what Piotrans characterised as “false statements
and allegations”, under oath, on behalf of group of
shareholders
with interests in companies that, in turn, held shares
in Piotrans. The shareholders and Piotrans are presently engaged in
litigation
about the extent to which the shareholders are entitled to
exercise influence over the appointment of directors to Piotrans’
Board. That litigation has not gone particularly well for the
shareholders. But it is not necessary for me to delve into the issues
it raises. The only relevance of that litigation to this case is that
Mr. Mntambo (himself a shareholder in an entity with shares
in
Piotrans) was cited as a respondent in one of the cases comprising
that litigation, deposed to an answering affidavit on behalf
of the
shareholders, and made statements that Piotrans considered were
false, and adverse to its interests.
3
In its letter dismissing Mr. Mntambo, Piotrans acknowledged
that “in ordinary circumstances employees must be afforded
[the]
opportunity to state their side of the case”. However,
Piotrans said, “it is the board’s view that this matter
is unique and thus one which does not require a further hearing”.
4
Mr. Mntambo was accordingly dismissed summarily. Piotrans
ignored the findings of Mr. Buthelezi, and so disregarded the outcome
of the hearing before him. It did not afford Mr. Mntambo the
opportunity to be heard in relation to his allegedly false and
misleading
statements made during the course of the shareholder
litigation.
The
urgent application
5
Aggrieved, Mr. Mntambo applied urgently to this court claiming
that he had been dismissed in breach of his contract with Piotrans.
He disavowed any reliance on the Labour Relations Act 66 of 1995
(“the LRA”), and pleaded his case solely in contract.
Initially, his notice of motion sought only declarations that the
termination of his contract was invalid and that the findings
of Mr.
Buthelezi were valid and binding. Mr. Mntambo later amended his
notice of motion to add reference to the specific clauses
of his
contract that he contends Piotrans had breached, and to explicitly
seek an order that he be reinstated.
6
In its answering affidavit, Piotrans advanced two defences on
the merits of Mr. Mntambo’s claim. The first defence was that
it was entitled to disregard Mr. Buthelezi’s award at the
disciplinary inquiry, because that award had the status of a
non-binding
recommendation. The second defence was that, even if it
had breached its contract with Mr. Mntambo, the court should exercise
its
discretion against ordering Mr. Mntambo’s reinstatement,
because Mr. Mntambo had committed a breach of trust in deposing to
an
affidavit in the proceedings against Piotrans, in making false
statements in those affidavits, and in supporting the shareholders’
case against it.
7
The matter came before Lamont J in urgent court on 16 February
2021. Lamont J struck the application from the roll for want of
urgency.
Neither party supplemented their affidavits before the
matter was re-enrolled before me in opposed motion court for the week
of
19 July 2021. Piotrans did, however, seek to place the papers in
the litigation between it and the shareholders before me. It also
supplemented its heads of argument.
Breach
of contract
8
There is now no doubt that the High Court retains a residual
jurisdiction to entertain claims based on the breach of a contract of
employment. Those claims must be pleaded exclusively in contract.
Reliance on the LRA deprives the High Court of jurisdiction (
Baloyi
v Public Protector
2021 (2) BCLR 101
(CC)). Nor do the fairness
of the parties’ conduct or the fairness of the terms of the
contract bear on the disposition
of the case. Purely as a
matter of contract law, an employee has no right to be treated fairly
unless the contract itself says
so (see
Old Mutual Limited v Moyo
[2020] 2 All SA 261
(GJ), para 60, relying on
South African
Maritime Safety Authority v McKenzie
2010 (3) SA 601
(SCA), paras
32 to 33 and 55 to 58).
9
The question is accordingly whether, as a matter of fact,
Piotrans breached its contract with Mr. Mntambo.
10
Clause 12.1 of Mr. Mntambo’s contract with Piotrans
states that Mr. Mntambo “will be subjected to the disciplinary
procedure
and rules of the Company as determined from time to time”.
Clause 12.2 of the contract requires Mr. Mntambo to familiarise
himself with applicable company policies and procedures regularly.
Clause 15.1 of the contract states that Mr. Mntambo’s
employment may be terminated for misconduct, incapacity, operational
requirements or for any other reason that “is recognised
by law
as being reasonable”. Gross misconduct could result in
“summary” termination of the contract.
11
The disciplinary procedure and rules of the company are
contained in a separate document (“the code”) which
Piotrans’
board approved on 12 June 2012. Clause 2.6 of that
document sets out a series of procedural fairness rights that accrue
to an employee
charged with misconduct. These include the right to a
formal hearing, representation at that hearing, the right to
cross-examine
any witness led against the employee, and the right to
call witnesses in the employee’s defence.
12
Clause 2.8.2.1 (b) of the code defines a formal disciplinary
enquiry as one that is “conducted by a chairperson who will
decide
on the appropriate penalty”.
13
Clause 2.12.3 states that a formal disciplinary inquiry “must
be held where the breach is one of gross misconduct or where
the
breach is such that dismissal may be contemplated”. This sits
uncomfortably with the right to summarily dismiss for gross
misconduct in clause 15.1 of the contract, but that is not a tension
I need to resolve in this case.
14
As must be abundantly clear from these clauses, in dismissing
Mr. Mntambo, Piotrans had no regard at all to its contract with him,
or the code that was incorporated into that contract by reference. In
relation to the first reason it gave for dismissing Mr. Mntambo,
Piotrans clearly breached clause 2.8.2.1 (b) of the code, which
provides that it is the chairperson of an inquiry that decides
the
appropriate penalty. Into that power must be read the power to decide
whether any misconduct has in fact been committed –
in other
words whether a penalty is warranted in the first place. A contrary
interpretation would plainly be absurd. Mr. Buthelezi
exercised this
power when he acquitted Mr. Mntambo of the charges pressed at the
inquiry he chaired. The code does not characterise
the chairperson’s
decision as a mere “recommendation”. The language the
code does use is incompatible with the
attribution of that status to
Mr. Buthelezi’s award.
15
The second reason Piotrans gave for dismissing Mr. Mntambo
abrogates the company’s disciplinary procedure in its entirety.
The fact and nature of Mr. Mntambo’s participation in the
shareholder litigation was, Piotrans asserted, enough to warrant
dismissal merely on having given Mr. Mtambo the opportunity to make
written representations. The problem is that this is not what
the
contract says, and there is nothing in the contract that justifies
Piotrans’ abrogation of the procedure it agreed to
in that
contract.
16
There can accordingly be few clearer cases of the repudiation
of a contract. Mr. Tshetlo, who appeared for Piotrans, was
understandably
reluctant to directly submit the contrary. Mr. Tshtelo
instead argued that because the brief cover Piotrans’ attorneys
sent
to Mr. Buthelezi couched Mr. Buthelezi’s role as merely to
provide a “recommendation”, Piotrans was free to reject
Mr. Buthelezi’s determination of the issues at the disciplinary
hearing. That proposition is wholly unconvincing. In the
first place,
Piotrans’ brief itself clearly adverts to Mr. Buthelezi’s
true role: to chair the disciplinary hearing
according to Piotrans’
disciplinary code. No-one could entertain any serious doubt that
Piotrans intended to be bound by
that code when it briefed Mr.
Buthelezi. In any event, if it did not so intend, it acted
outside the terms of the code, and
so repudiated its contract with
Mr. Mntambo.
17
It struck me during the course of argument that clause 2.8.2.1
(b) of the code had not been pleaded or relied upon in Mr. Mntambo’s
founding affidavit. I invited Mr. Masombuka, who appeared for Mr.
Mntambo, and Mr. Tshetlo, to tell me what, if anything, I should
make
of that. Mr. Masombuka stated that the failure to plead that
particular clause of the code was an oversight made in the heat
of
urgent litigation, but that I should still have regard to the clause,
and Piotrans’ apparent repudiation of it. Mr. Tshetlo
argued
that Mr. Mntambo should be held to his pleaded case, and that I
should have no regard to clause 2.8.2.1 (b), because it
was not
pleaded or relied upon.
18
I have some difficulty with the proposition that I must blind
myself to an express clause of a written contract that is clearly
relevant to the central issues in this case, just because it has not
been reproduced in Mr. Mntambo’s founding affidavit.
As has
often been said, the pleadings are made for the court, not the court
for the pleadings. In the absence of prejudice to one
or other party,
there can be no objection to the court determining the real issues
that arise from the papers, even if those issues
have not been framed
with the precision that is ordinarily desirable (See
Spearhead
Property Holdings Ltd v E&D Motors (Pty) Ltd
2010 (2) SA 1
(SCA), para 42 and
Shill v Milner
1937 AD 101).
19
In any event, Piotrans could have been under no
misapprehension about the case it had to meet, even if it only had
regard to the
clauses of the code Mr. Mntambo specifically referred
to, and not the code as a whole. Mr. Mntambo explicitly relied upon
clause
2.12 of the code, which deals with “formal disciplinary
enquiries”. The substance of his case is that he had been
denied
such an inquiry in circumstances where he was contractually
entitled to one. It could not have been lost on Piotrans that a
formal
disciplinary inquiry entails, in terms of clause 2.8.2.1 (b)
of the code, the appointment of a chairperson with the power to
decide
on the outcome.
20
For these reasons, it is plain that Piotrans repudiated its
contract with Mr. Mntambo. That being so, Mr. Mntambo had an
election:
accept the repudiation, cancel the contract and seek
damages, or reject the repudiation, and press Piotrans for specific
performance.
Mr. Mntambo asks for specific performance. I now turn to
the question of whether he is, in law, entitled to it.
Specific
performance
21
Mr. Tshetlo argued that I need not enter the debate about
whether specific performance is an appropriate remedy, because Mr.
Mntambo
had not asked for it in his initial notice of motion.
Although the amendment, in which Mr. Mntambo does pray for
reinstatement,
was not objected to, Mr. Tshtelo argued that Mr.
Mntambo had effectively altered his case in reply, which is
impermissible.
22
I do not think that this submission can be sustained. In the
first place, Mr. Mntambo’s case does not really change between
his founding and replying affidavits. Mr. Mntambo is clear in his
founding affidavit that he wants to be reinstated. Piotrans devotes
a
great deal of space in its answering affidavit to advancing a case
that reinstatement is not appropriate on the facts of this
case. It
also took a series of technical points about the way Mr. Mntambo had
framed his case. It was said that Mr. Mntambo’s
notice of
motion sought neither a declaration that his contract with Piotrans
had been breached, nor any “other form of competent
remedy for
breach of contract” (see para 10 of Piotrans’ answering
affidavit) The amended notice of motion sought
to cure these
technicalities, not to change Mr. Mntambo’s case.
23
It follows that the issue of whether I should order specific
performance in the form of Mr. Mntambo’s reinstatement is
properly
before me. It is, in fact, the most difficult part of this
case.
24
It has long been accepted that, although “specific
performance is a primary and not a supplementary remedy” for
breach
of contract (
Santos PFC v Ingesund
2003 (5) SA 73
(C)
at 84I (“
Ingesund
”)), a court may decline to order
specific performance on the facts of a particular case. The best
justification for this
discretion is to protect the court from making
an order which cannot practically be carried out, but courts
regularly decline to
order specific performance “where justice
can be fully and conveniently done by an award of damages"
(
Farmers’ Co-operative Society (Reg) v Berry
1912 AD 343
at 350).
25
Historically, our courts have also been reluctant, as Innes CJ
put it, to compel “one person to employ another whom he does
not trust in a position that imports a close relationship”
(
Schierhout v Minister of Justice
1926 AD 99
at 107). But that
does not itself mean that there is a general rule against ordering
reinstatement in the context of a contract
of employment. It means
only that a demonstrable breakdown in confidence or trust between the
parties has long been accepted as
a sound reason to refuse an order
for specific performance.
26
Whether to order specific performance in the form of
reinstatement is a question to be answered on the facts of each case,
but that
relief will only be refused where it would be “inequitable
in all the circumstances” or where, because of change of
circumstances, enforcing the contract would be “unconscientious”.
(
National Union of Textile Workers v Stag Packings (Pty) Ltd
1982 (4) SA 151
(T) at 155H to 156A). “Unconscientious”
is here deployed in its archaic form as a synonym for
“unconscionable”,
not in its more modern usage to refer
to someone lacking in diligence.
27
It has also been observed that not all contracts of employment
are for services of such a personal nature that even a breakdown in
trust or confidence between the parties necessarily precludes
reinstatement (
Ingesund
at 84H to 85B). Trust and confidence
can be rebuilt. The question is whether that expectation is
reasonable on the facts of a particular
case, and whether there are
good reasons, beyond the fact of the breakdown in trust itself, to
place the innocent party back into
the position they would have been
in but for the breach of contract, by means of an order for specific
performance.
28
Finally, I do not think that an employer can expect a court to
leave an assertion that it has lost trust or confidence in the
employee
unexamined. There must be evidence that, objectively, the
employer cannot reasonably be expected to take the employee back,
even
though the employee has suffered a breach of contract.
29
The nub of Piotrans’ case on specific performance is
that Mr. Mntambo has allied himself with the claims of a group of
shareholders
who are seeking, unlawfully, to assert control over
Piotrans’ management and governance. Their attempts to do so
have been
restrained at least two occasions, by Malindi J in
Piotrans
v Kgomo
(case no. 41248/2020) and by Mabesele J in
Piotrans v
Kgomo
(case no. 263/2021). In the matter before Mabesele J, Mr.
Mntambo was cited as a respondent, deposed to the shareholders’
answering affidavit and sought to defend their conduct. It is the
contents of that affidavit to which Piotrans took exception,
and
formed the basis of the second reason it gave for dismissing Mr.
Mntambo. That application concerned an unlawful attempt to
amend the
list of Piotrans’ directors held by the Companies and
Intellectual Property Commission (CPIC), which Mabesele J
set aside.
30
I do not think that it is necessary for me to make a finding,
one way or the other, on whether, as Piotrans asserts, Mr. Mntambo
made false statements in his answering affidavit. Nor do I need to
assess the extent to which Mr. Mntambo might have furthered
an
unlawful scheme to take control Piotrans.
31
However, I need no convincing that Piotrans must be deeply
concerned about Mr. Mntambo’s role in the shareholder
litigation.
It seems to me that, in aligning himself with a group of
shareholders whose conduct appears, at least
prima facie
, to
have been unlawful, and adverse to the proper administration of
Piotrans as a corporate entity, Mr. Mntambo imperilled his
relationship with his employer. He has not explained in the papers
why he did this, or to what extent he views it as compatible
with his
role as a senior manager at Piotrans.
32
In the absence of such an explanation, I must accept that
Piotrans has made out a case that it should not be required to
tolerate
Mr. Mntambo’s reinstatement. Mr. Mntambo was a senior
employee. He says in his founding affidavit that he had an
expectation
that he would one day become Piotrans’ chief
executive officer. If that is so, I find it difficult to imagine how
such a
senior employee could have allowed himself to become embroiled
in the apparently unlawful conduct of a renegade group of
shareholders.
His decision to depose to the answering affidavit in
the second application, and to associate himself with, and defend,
prima facie
unlawful conduct adverse to his employer’s
interests, called for an explanation. None was forthcoming.
33
In the absence of such an explanation, there is nothing to
gainsay Piotrans’ case that Mr. Mntambo cannot reasonably
expect
to command the level of trust and confidence it is entitled to
place in its senior managers. In those circumstances, I cannot
conclude
that Piotrans ought to be required to take Mr. Mntambo back
into its fold.
34
None of this means that Piotrans has acted lawfully. It
clearly ought to have disciplined Mr. Mntambo in terms of its own
disciplinary
code. It is not clear to me why, other than for reasons
of pure expedience, it sought to depart from the terms of the
contract
it had made with Mr. Mntambo and dismiss him without the
hearing to which he was so clearly entitled.
35
In the circumstances, I will make an order declaring that
Piotrans has acted in breach of its contract with Mr. Mntambo, and
directing
it to pay the costs of this application. However, I cannot,
on a proper exercise of my discretion, order Piotrans to reinstate
Mr. Mntambo.
36
Accordingly, I make the following order –
36.1
It is declared that the respondent’s termination of the
applicant’s
contract of employment was in breach of clauses 12
and 15 of that contract, read with the respondent’s
disciplinary code.
36.2
The respondent is directed to pay the costs of this application.
S
D J WILSON
Acting
Judge of the High Court
This
judgment was prepared and authored by Acting Judge Wilson. It is
handed down electronically by circulation to the parties or
their
legal representatives by email and by uploading it to the electronic
file of this matter on Caselines. The date for hand-down
is deemed to
be 2 August 2021.
HEARD
ON:
21 July 2021
DECIDED
ON: 2 August
2021
For
the Applicant:
E Masombuka
Instructed
by Mathopo Moshimamne Mulangaphuma Inc
For
the Respondent:
R
Tshetlo
L Mukome
Instructed by Ningiza Horner Inc