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[2021] ZAGPJHC 459
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Coetzer v People Perfect (Pty) Ltd t/a Signium Africa (5754/2020) [2021] ZAGPJHC 459 (16 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
CASE
NUMBER: 5754/2020
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES:
REVISED.
DATE:
16/8/21
In
the matter between: -
COETZER,
AUGUSTE LOUISE
Excipient / Plaintiff
and
PEOPLE
PERFECT (PTY) LTD
t/a
SIGNIUM
AFRICA
Respondent / Defendant
J
U D G M E N T
DELIVERED
:
This judgment was handed down electronically by circulation to
the parties’ legal representatives by e mail and
publication
on CaseLines. The date and time for hand-down is deemed
to be 10h00 on 16 August 2021.
F. BEZUIDENHOUT AJ:
INTRODUCTION
[1]
This is the determination of an exception taken by the plaintiff to
the defendant’s
plea.
[2]
The plaintiff’s action arises from the alleged repudiation of a
varied
shareholders’ and employment agreement concluded between
the plaintiff and the defendant. The plaintiff avers that she did
not
accept the repudiation, and is entitled to claim damages on the basis
that the relationship between her and the defendant had
broken down
irretrievably.
[3]
The exception consists of three grounds, all of which go to the
alleged failure
by the defendant to make averments necessary to
disclose a defence against the plaintiff’s claim. All three
exceptions each
have an alternative contention that the plea is vague
and embarrassing to the extent that the plaintiff is prejudiced
thereby.
[4]
The three grounds of exception are as follows: -
[a]
The first ground relates to sub-paragraph 42.5 of the plea where it
is alleged that the defendant
failed to plead a material term in
order to disclose a defence, alternatively its pleading is vague and
embarrassing in that the
plaintiff cannot determine whether the
alleged material term related to the termination of the employment
agreement or not;
[b]
The second ground relates to sub-paragraph 25.5 of the plea in that
the plaintiff alleges that
the defendant failed to advance how and on
what basis the employment agreement (annexure “ALC6”) was
amended, substituted
or otherwise varied in the light of the
shareholders’ agreement;
[c]
The third ground relates to sub-paragraph 42.7 of the plea where it
is alleged that the defendant
failed to plead on what basis the
plaintiff’s position as a director was terminated by the latest
on 31 October 2019
and/or on what basis the plaintiff was
not entitled to continue to be a director of the defendant after
31 October 2019.
[5]
The defendant questions the exception on the following basis: -
[a]
Is the plea excipiable on every reasonable interpretation?
[b]
In particular, is the plea vague?
[c]
If so, is it so vague, that the plaintiff cannot meaningfully
replicate to the plea or prepare
for trial?
[d]
The plaintiff’s interpretation of the plea is unreasonable.
[e]
On a reasonable interpretation of the plea it is not excipiable
because it comprehensively and
clearly sets out facts necessary to
disclose a defence.
[6]
The plaintiff seeks an order striking out the relevant paragraphs in
the plea
and an order for costs. Conversely, the defendant asks for a
dismissal of the exception with costs.
THE PARTICULARS OF
CLAIM
[7]
The defendant carries on business as an executive search recruitment
company
and other related human resources services.
[8]
The plaintiff is a former shareholder, director and employee of the
defendant.
[9]
On 23 June 2009 the plaintiff and the defendant concluded a written
shareholders’
agreement. The relevant material express terms of
the shareholders’ agreement for purposes of the exception,
included the
following: -
“
17.10.1
All shareholders shall retire from the service of the Company, if
employed in their capacities
as an (sic) employees of the company on
the last day of the financial year of the company
in which
they reach the age of 70
(SEVENTY)
unless
otherwise agreed
in which event they shall also cease to
be a director of the Company with effect from that date (‘termination
date’).
(emphasis added)
[10]
On 18 November 2009 the defendant employed the plaintiff as its
senior partner and director by
way of a written letter of employment,
the relevant material express terms for purposes of the exception
whereof were as follows: -
Termination of
services
A minimum of 1
calendar month and maximum of 3 calendar months notice period,
depending on your workload, will apply unless otherwise
negotiated
and agreed in writing should you or the Company decide to terminate
this agreement.”
“
Retirement
Your employment will
automatically terminate
when you reach
66 years of age
, unless otherwise agreed to
in
writing
.
(emphasis added)
[11]
In 2019
when the plaintiff had reached the age of 71, she avers that at a
strategy meeting it was agreed by acquiescence that the
period of her
employment would be extended to age 75 “
thereby
effectively varying, alternatively waiving the provisions set out in
annexures “ALC1” to
ALC6”
pertaining
to her age of retirement
”
[1]
(“
the
variation”
).
[12]
The plaintiff avers that pursuant to the variation she continued
working in with the full consent
of the defendant, which acted
thereon by
inter alia
acknowledging and recognising her
billings, by paying her commissions, by paying her director’s
remuneration and by employing
the provisions of the Basic Conditions
of Employment Act in its relationship with her.
[13]
On 13 September 2019 at a special board meeting the plaintiff asserts
that the remaining four
shareholders of the defendant informed her
that they were of the view that she was to be offered a retirement
immediately.
[14]
On 15 October 2019 the chairman addressed a letter to the plaintiff
incorporating a written letter
of resignation for her to sign. The
letter further informed the plaintiff that a further meeting of
shareholders would take place
on 31 October 2019 when consideration
would be given to a resolution to remove the plaintiff as a director
of the defendant. On
31 October 2019 the plaintiff was removed as a
director by a show of hands.
[15]
The plaintiff alleges that the defendant’s decision to remove
her as a director and to
impose a retirement upon her as a senior
partner of the defendant amounted to an unfair dismissal as
understood under the provisions
of the
Labour Relations Act, 66 of
1995
.
THE PLEA
[16]
To the
allegation of an unfair dismissal, the defendant pleads that it was a
material express term of the shareholders’ agreement
that a
shareholder employed by the defendant would retire on the last day of
the financial year of the defendant in which such
shareholder reaches
the age of 70. The plaintiff was born on 25 January 1948
and the last day of the financial year in
which the plaintiff reached
the age of 70 was 31 May 2018. The plaintiff was therefore
obliged to retire and cease to
be a director of the defendant on
31 May 2018.
[2]
[17]
Then the plaintiff pleads at paragraph 42.5 as follows: -
“
Alternatively
or in any event, it was a material term of the plaintiff’s
employment agreement attached to the particulars
of claim as “ALC6”,
alternatively to the extent that employment agreement at “ALC6”
had automatically terminated
in the year the plaintiff turned 66 the
tacit employment agreement that endured after such termination on the
same terms and conditions
as “ALC6”, that the defendant
would be entitled to terminate the employment of the plaintiff on a
minimum of 1 and
a maximum of 3 calendar months’ notice in
writing, depending on the plaintiff’s workload;”
[18]
The defendant pleads in paragraph 42.7 of the plea that the
plaintiff’s workload at the
time did not require written notice
of more than one month and that: -
“
On
30 September 2019, the defendant duly gave the plaintiff
one month’s notice in writing of the termination of
her
employment on 31 October 2019.”
[19]
The
defendant pleads that the plaintiff’s employment as a senior
partner and director of the defendant was accordingly duly
and
lawfully terminated by the latest on 31 October 2019 and/or
the plaintiff was not entitled to continue to be an employee
or a
director of the defendant after 31 October 2019.
[3]
[20]
The
defendant denies that the shareholders’ agreement was varied,
which is amplified by the averment that the shareholders’
agreement contained a non-variation clause which provides that the
terms of the agreement would only be substituted or varied,
except by
agreement in writing and that any relaxation, indulgence or delay by
any of the parties in exercising or failing to exercise
any right
under the shareholders’ agreement would not be construed as a
waiver of that right, unless also reduced to writing.
[4]
THE LAW ON EXCEPTIONS
[21]
Although the principles applicable to exceptions are trite, a
reminder will do no harm.
[22]
Where there
is uncertainty in regard to the pleader’s intention, the
excipient cannot have the pleading declared bad in law
without
showing that on any construction of the pleading the claim is
excipiable.
[5]
[23]
Ultimately
an excipient has the duty to persuade the court that upon
every
interpretation
which the pleading can reasonably bear, no cause of action or defence
is disclosed.
[6]
[24]
An
exception that a pleading is vague and embarrassing ought not to be
allowed, unless the excipient would be
seriously
prejudiced
if the offending allegations were not expunged,
[7]
bearing in mind that a pleading will not cease to be prejudicial
merely because it is possible to draft an unexcipiable response
to
it.
[8]
[25]
Prejudice
to a litigant faced with an embarrassing pleading must ultimately lie
in an inability properly to prepare to meet the
opponent’s
case.
[9]
[26]
In
Barclays
National Bank Ltd v Thompson
[10]
the Appellate Division (as it then was) held that the function of a
well-founded exception that a plea, or part thereof, does not
disclose a defence to the plaintiff’s cause of action is to
dispose of the case in whole or in part. It is for this reason
that
exception cannot be taken to part of a plea unless it is
self contained, amounts to a separate defence and can therefore
be struck out without affecting the remainder of the plea.
[11]
[27]
The appeal court explained the main purpose of an exception as
follows: -
“
In respect of a
declaration that does not disclose a cause of action the aim with an
exception is to avoid the leading of unnecessary
evidence at
trial.”
[12]
[28]
An
exception to a plea should not be allowed unless, if upheld, it would
obviate the leading of unnecessary evidence.
[13]
This principles was confirmed in
McKelvey
v Cowan N.O.
[14]
: -
“
It is a first
principle in dealing with matters of exception that, if evidence can
be led which can disclose a cause of action alleged
in the pleadings,
that particular pleading is not excipiable. A pleading is only
excipiable on the basis that no possible evidence
led on the pleading
can disclose a cause of action.”
[29]
To this
must be added the consideration that the validity of an agreement and
the question whether a purported contract may be void
for vagueness
do not readily fall to be decided by way of an exception.
[15]
AN ANALYSIS OF THE
GROUNDS OF EXCEPTION
First ground
[30]
Firstly, the plaintiff avers that the phrase “
alternatively
or in any event…”
is confusing as the import of the
phrase can be interpreted as an alternative to paragraphs 42.1 to
42.4 of the plea or as a reference
to what precedes paragraph 42.5,
i.e. a reliance on paragraph 42.1 to 42.4 (inclusive) and an
elaboration on one of the terms
of the shareholders’ agreement.
[31]
Secondly, plaintiff takes issue with the allegation contained in
paragraph 42.5 of the plea
that the material term relied on by
the defendant is not pleaded and leaves the plaintiff guessing as to
whether the term related
to the termination of the employment
agreement at age 66 or on a minimum of one and a maximum of three
calendar months’ notice.
[32]
Thirdly, the plaintiff states that it does not appear from the
allegation contained in paragraph
42.5 of the plea whether the
defendant contends that the employment agreement actually came to an
end when the plaintiff turned
66. If it did not, there would be no
need even on the defendant’s version, for a tacit employment
agreement. If it did, the
tacit employment agreement that endured
thereafter, does not provide for the defendant to terminate the
employment of the plaintiff
on a minimum of one and a maximum of
three calendar months’ notice.
[33]
Fourthly, the plaintiff alleges that the defendant failed to comply
with the provisions of rule 18(6)
of the Uniform Rules of Court
in that it, as far as the tacit employment agreement is concerned,
failed to plead whether the defendant
relies upon a written or oral
agreement, when, where and by whom it was concluded, and if the
contract was written, a true copy
is to be annexed.
Deliberation-
first ground
[34]
It cannot be disputed by either party that the retirement age
reflected in the shareholders’
agreement differs from the age
of retirement reflected in the employment agreement. The
shareholders’ agreement provides
for a retirement age of 70,
whereas the employment agreement indicates 66 years as the retirement
age.
[35]
The plaintiff avers at paragraph 18 of her particulars of claim that
she was 71 in 2019. It is
therefore safe to assume that the plaintiff
had by that time passed the retirement ages agreed to in
both
the shareholders’ and employment agreement. Yet, the plaintiff
relies on a variation of both the shareholders’ and
employment
agreement.
[36]
This is the case that the defendant is called upon to meet.
[37]
Paragraph
42.1 to 42.3 refers to the shareholders’ agreement and
paragraphs 42.2 and 42.3 proceed to calculate the date of
retirement
in accordance with the provisions of the shareholders’
agreement. Paragraph 42.4 announces the result of the calculation
with the word “
Therefore”
whereafter the defendant pleads that the plaintiff was obliged to
retire and cease to be a director on 31 May 2018. This
averment must be read in conjunction with the defendant’s
denial of any variation.
[16]
[38]
Sub-paragraph 42.5 on the other hand, specifically refers to the
employment agreement. Annexure
ALC6 as already indicated expressly
provided for a termination of the agreement other than an automatic
termination premised on
the agreed retirement age. This is in my view
on a plain reading of the plea, clearly the material term relied on
by the defendant.
[39]
I therefore find that the use of the phrase “
alternatively
or in any event
” does not render paragraph 42.5 vague and
embarrassing.
[40]
It is worthy to emphasise that paragraph 17 of the particulars of
claim speaks of a variation
or waiver of the provisions of
both
“ALC1” and “ALC6”
“
pertaining
to her age of retirement
” (emphasis added). This
averment in my view, presupposes that both of the agreements were
extant and capable of variation
and that only the provisions
pertaining to the age of retirement were varied, thereby leaving the
balance of the terms contained
in both agreements, unaffected.
[41]
When reading paragraph 42.5 of the plea against the backdrop of the
averments contained in paragraphs
16 to 18 of the plaintiff’s
particulars of claim, it becomes clear why the defendant pleads that
“
to the extent”
that the employment agreement had
automatically terminated at age 66, a tacit employment agreement
would endure after such termination
on the same terms, one of the
terms being that the defendant would be entitled to terminate her
employment on a minimum of one
and a maximum of three calendar
months’ notice.
[42]
Accordingly, the plaintiff would either retire and cease to be a
director in terms of the shareholders’
agreement at age 70, or
her employment would be terminated on a minimum of one and a maximum
of three calendar months’ notice.
[43]
Accordingly, I find no merit in this part of the plaintiff’s
objection either.
[44]
Inasmuch as the plaintiff complains that the tacit agreement does not
contain a term entitling
the defendant to terminate the employment of
the plaintiff on a minimum of one and a maximum of three calendar
months’ notice
in writing, this simply cannot be as paragraph
42.5 of the plea expressly refers firstly, to the fact that the tacit
employment
agreement endured on the same terms and conditions as
“ALC6” and secondly, as already indicated, “ALC6”
does indeed contain such a termination clause.
[45]
The defendant expressly states that it is a tacit agreement which is
concluded on the same terms
as “ALC6”.
[46]
A
discussion of the legal principles regarding tacit terms is to be
found in
the
judgment of Nienaber JA in
Wilkins
NO v Voges
.
[17]
These principles have since been applied by the Supreme Court of
Appeal,
inter
alia
,
in
Botha
v Coopers & Lybrand
[18]
and in
Consol
Ltd t/a Consol Glass v Twee Jonge Gezellen (Pty) Ltd and another
.
[19]
As stated in these cases, a tacit term is based on an inference of
what both parties must or would
necessarily
have agreed to, but which, for some reason or other, remained
unexpressed. It therefore follows that by its very nature
it is not
reduced to writing.
[47]
Like
all other inferences, acceptance of the proposed tacit term is
entirely dependent on the facts. A proposed tacit term can only
be
imported into a contract if the court is satisfied that the parties
would
necessarily
have
agreed upon such a term if it had been suggested to them at the
time.
[20]
[48]
The conclusion is plain. The terms of the tacit
agreement must be tested by way of evidence at trial. The failure to
plead the terms
of the tacit agreement (if I accept that this is
indeed the case) does not render the plea excipiable as the plaintiff
would have
the opportunity to test the version of the defendant on
trial. Moreover, nothing precludes the plaintiff from requesting
further
particulars for trial on this aspect.
[49]
Accordingly, I find that the plaintiff’s
objection based on defendant’s alleged non-compliance with rule
18(6) has no
merit either.
Second ground
[50]
The crux of the plaintiff’s objection is that the defendant
relies on the non variation
clauses in the shareholders’
agreement to refute the allegation that it was varied, yet it does
not explain why the alleged
tacit employment agreement was not
excluded by the express provisions relied upon by the defendant in
the shareholders’ agreement
including the variation thereof,
which could only allegedly take place in writing.
[51]
In addition, the plaintiff complains that the defendant does not
explain how the tacit employment
agreement could have been concluded
between the parties in light of its clear contradiction of the
retirement age of 70 expressly
provided for within the ambit of the
shareholders’ agreement.
Deliberation
– second ground
[52]
It is common cause that the parties concluded a separate
shareholders’ agreement and a
separate employment agreement. It
is also common cause that these agreements provided for different
retirement ages. On the plaintiff’s
own version therefore there
was a conflict between the two agreements at the outset.
[53]
The employment agreement has no non-variation clause but the
retirement age clause is self-contained
in that it requires a
variation to be reduced to writing. However, it must be borne in
mind, that the plaintiff herself relies
on an oral variation of the
employment agreement if regard is had to paragraphs 16 to 18 of her
particulars of claim.
[54]
I therefore do not find any merit in this ground.
Third ground
[55]
The plaintiff complains that on the defendant’s version, having
given the plaintiff one
month’s notice in writing of the
termination of her employment on 31 October 2019, the
defendant has failed to
plead on what basis the plaintiff’s
position as director of the defendant was terminated on
31 October 2019.
Deliberation
– third ground
[56]
The employment contract provides that the defendant would be entitled
to terminate the employment
of the plaintiff on a minimum of one and
a maximum of three calendar months’ notice in writing.
[57]
Notice was given to the plaintiff on the 30
September 2019
of the termination of her employment on 31 October 2019.
[58]
Once the plaintiff exercised its election to
terminate the plaintiff’s employment on one month’s
notice, the plaintiff
was no longer a director and senior partner.
This is stated at paragraph 42.8.1 of the plea.
[59]
Inasmuch as paragraph 42.8.2 of the plea avers
that the plaintiff was not entitled to continue to be an employee or
a director,
the fact that the defendant does not explain why the
plaintiff was not entitled, in my view, does not render the plea
vague and
embarrassing or fails to disclose a defence. The plaintiff
is entitled to elicit this information by way of a request for
further
particulars or evidence at trial.
[60]
Accordingly I find that the third ground is similarly without merit.
ORDER
[61]
I accordingly make the following order: -
“
The exception
is dismissed with costs.”
F
BEZUIDENHOUT
ACTING
JUDGE OF
THE
HIGH COURT
DATE
OF HEARING:
18
MARCH
2021
DATE
OF JUDGMENT:
16 AUGUST 2021
APPEARANCES:
On
behalf of excipient:
Adv
J K Berlowitz
Cell: 084-807-2583
jkberlowitz@law.co.za
Instructed
by:
Waks
Attorneys
Tel:
(011) 483-0630
yaron@waksattorneys.co.za
On
behalf of respondent:
Adv
A J D’Oliveira
072-697-6796
ad@counsel.co.za
Instructed
by:
Wright
Rose-Innes Attorneys
Tel:
(011) 646-9991
richardm@wri.co.za
[1]
Particulars
of Claim:para 17
[2]
Plea,
paragraphs 42.1 to 42.4.
[3]
Plea:para
42.8, 42.8.1 to 42.8.
[4]
Plea:para
42.5.1 and 42.5.2.
[5]
Klerck
N.O. v Van Zyl and Maritz N.O. and Related Cases
1989 (4) SA 263
(SE) at 288, citing
Callender-Easby
v Grahamstown Municipality
1981 (2) SA 810
(E) at 813; see also Herbstein & Van Winsen:
The
Civil Practice of the High Court of South Africa
,
5
th
edition, vol 1, p 637.
[6]
Francis
v Sharp
2004 (3) SA 230
(C) at 233;
First
National Bank of Southern Africa Ltd v Perry N.O.
2001 (3) SA 960
(SCA) at 965.
[7]
Levitan
v Newhaven Holiday Enterprises CC
1991 (2) SA 297
(C) at 298A – B.
[8]
Trope
v SA Reserve Bank and two other cases
1992 (3) SA 208
(T) at 211B – D.
[9]
Levitan
v Newhaven Holiday Enterprises CC
(
supra
)
at 298.
[10]
1989
(1) SA 547 (A).
[11]
Salzmann
v Holmes
1914 AD 152
at 156;
Barrett
v Rewi Bulawayo Development Syndicate Ltd
1922 AD 457
at 459.
[12]
Dharumpal
Transport (Pty) Ltd v Dharumpal
1956 (1) SA 700
(A) at 706.
[13]
Welgemoed
en Andere v Sauer
1974 (4) SA 1 (A).
[14]
1980
(4) SA 525
(Z) at 526.
[15]
Delmas
Milling Co Ltd v Du Plessis
1955 (3) SA 447
(A);
Burroughs
Machines Ltd v Chenill Corporation of SA (Pty) Ltd
1964 (1) SA 669
(W);
Murray
& Roberts Construction Ltd v Finat Properties (Pty) Ltd
1991 (1) SA 508 (A).
[16]
Plea:para
24
[17]
1994
(3) SA 130 (A)
at
136H-137D
[18]
2002
(5) SA 347 (SCA)
paras
22-25
[19]
[2004]
1 All SA 1
(SCA) paras 50-52
[20]
See
Consol
Ltd t/a Consol Glass
supra
para 50.