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[2019] ZAGPPHC 118
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Masongwa and Another v Maximum Profit Recovery (Pty) Ltd (81936/2018) [2019] ZAGPPHC 118 (18 April 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED.
Case
number: 81936/2018
18/4/2019
In
the matter between:
MASONGWA, RAMA
ANDREW
First
Applicant
PADDY,
STEPHEN
ALBIE
Second Applicant
and
MAXIMUM PROFIT RECOVERY (PTY)
LTD
Respondent
JUDGMENT
AVVAKOUMIDES, AJ
1.
The
Applicants and the Respondent concluded an agreement called a
Holistic Resolution Agreement consisting of some 72 pages. This
agreement served one purpose, i.e. the separation between the
Applicants and the Respondent from their joint business activities.
2.
The
Applicants were directors and shareholders in and to the Respondent
and due to the inability of the Applicants and the remaining
director
in the Respondent to work harmoniously, it was decided that the
Holistic Resolution Agreement would be concluded, providing
for the
exit of the First and Second Applicants from the Respondent.
3.
The
agreement contemplates a termination date by which the Applicants'
involvement with the Respondent would cease. Under clause
9.17 the
termination date is defined as:
"Shall mean in relation to
clause 13.2 hereof the date the last of the NEWCO performances
has
been fully (not
substantially) performed".
Clause 13.2 provides that the
employment relationship between the Respondent and each of the
Applicants shall terminate:
"13.2.2
In the
case of Andrew and Stephen
only
when
Newco
performances
have been complied with and until such termination they will be
remunerated for their services
as
set out in clause
13.3".
4.
In turn, the term
"Newco
performances"
is defined to
meaning the following matters:
"9.14.1
Payment of all remuneration to the employees
as
per clause 13.3
thereof·,
9.14.2
Delivery of the releases
as
per clause 15
hereof·, and
19.14.3
The implementation of all the matters referred to in clause 18
thereof, which shall be fully
performed; substantial performance
shall not suffice".
5.
The
Applicants submitted that the Respondent had complied with the
performances in terms of clauses 19.14.2 and 19.14.3 on 17 August
2017 and paid the last payment to the Applicants on 14 September 2017
of the amount accrued to the Applicants as at 17 August 2017.
It is
thus the Applicants' case that the Respondent, in failing to pay the
Applicants on 17 August 2017 and only doing so on 14
September 2017,
caused the non-fulfilment of the Newco performances resulting in the
non-attainment of the termination date.
6.
The
Holistic Resolution Agreement provided for the ongoing payment by the
Respondent to the Applicants whilst the Respondent had
to procure the
release of the Applicants in terms of suretyship documents and the
removal of identifying names from everything
associated with the
Respondent's name. Whilst this process was ongoing and, as counsel
for the Applicants submitted, they would
be paid for their continuous
risk in being bound as sureties and co-principal debtors for the
obligations of the Respondent. The
Applicants' case thus is that the
Respondent is liable to continue payment to the Applicants from 17
August 2017 to date.
7.
In
answer to the question posed to the Applicants' counsel if the
Applicants were paid on 17 August 2017, counsel responded that
that
would be the end of the matter and the parties would be totally
separated from each other. The mere fact that payment for
the amount
accrued as at 17 August 2017 had only been paid on 14 September 2017
had prevented the fulfilment of the requirements
contained in the
definition
"termination date"
and consequently the Respondent
remains liable to the Applicants for their monthly salary to date.
8.
The application thus revolves around the
interpretation of the agreement, more particularly certain of its
clauses. The Respondent
contended that on a purposive and contextual
interpretation of the agreement, the employment relationship between
the parties terminated
on 17 August 2017.
9.
It is clear from the contents of the
various affidavits that the parties wanted a clear break from each
other and went to a great
length to describe how untenable their
ongoing working relationship with each other was. The Applicants do
not dispute the Respondent's
version that the purpose of the
agreement was to ensure that the parties would fully and finally part
ways.
10.
The court is thus called upon to
interpret clause 13.2.2 of the agreement. On a simple reading of the
clause and the clauses connected
therewith it appears clear that the
release from the suretyships and removal of all identifying names and
logos were the dominant
two of the three Newco performances and that
the third would serve only to ensure that the Applicants would
receive their remuneration
on the date on which the remaining two
performances were achieved.
11.
Both parties went to great lengths to
make submissions surrounding the correct approach to the
interpretation of the relevant clauses
and with reference to the
allegations made in the various affidavits. The Respondent's counsel
submitted that the correct approach
to interpreting the contract is
to apply the approach appearing in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) at 603F-604D. Briefly, in terms of the aforesaid
decision the court has to take into account the document as a whole
including
the circumstances attendant upon its coming into existence.
The apparent purpose of the agreement to which it is directed and the
material known to those responsible for its production are to be
taken into account and a sensible meaning is to be preferred to
one
that leads to insensible or unbusinesslike results or undermines the
apparent purpose of the document. The Supreme Court of
Appeal further
stated that 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 introduction
of the document.
12.
In my view, having considered all of the
allegations contained in the affidavits, the submissions made by
counsel for both parties,
it is clear that the Newco performances
were aimed mainly at the release of the Applicants for all sureties
signed by them for
the obligations of the Respondent and the removal
of all identifying names, logos from all physical, material and
internet based
sources and upon the attainment of both, the
Applicants would be entitled to remuneration as at that date. To read
the Newco performances
in any other manner would lead to an
insensible interpretation of the meaning to the words used in the
agreement.
13.
Counsel for the Respondent submitted
that even if I did not find for the Respondent on the interpretation
issue, the Respondent,
in addressing a response to the Applicants'
letter of demand for payment stated therein, approximately one year
prior to the issuing
of the notice of motion, that the payment made
on 14 September 2017 was made in full and final settlement and
accordingly this
was a compromise which the Applicant had, by their
failure to respond appropriately, accepted. In the light of my view
on the interpretation
of the relevant clauses, I deem it unnecessary
to deal with the aspect of compromise any further.
14.
Counsel for the Applicant submitted that
if the court found in favour of the Respondent, the Applicants would
not oppose an order
for costs which include the costs of two counsel.
15.
In the premises I make the following
order:
(a)
The application is dismissed;
(b)
The Applicants are ordered to pay
the Respondent's costs, jointly and severally, the one paying the
other to be absolved, which
costs shall include the cost of two
counsel.
G.T.
AVVAKOUMIDES
ACTING
JUDGE OF THE HIGH COURT
Representation
for Applicants:
Counsel:
Adv. A
Botha SC
Instructed
by:
Brian Kahn Attorneys
Representation
for Respondent:
Counsel:
Adv J
Vorster and Adv MTM Phehane
Instructed
by:
EY Stuart Inc.