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[2019] ZAFSHC 47
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Ramohai and Others v Precinct Financial Consultants (Pty) Ltd and Others (1071/2019) [2019] ZAFSHC 47 (26 April 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case number:
1071/2019
In
the matter between:
KENEILWE
RAMOHAI
1
st
Applicant
PORTIA
RAMAGAGA
2
nd
Applicant
BOITUMELO
SELALEDI
3
rd
Applicant
SELABE
MOTHUPI
4
th
Applicant
MOLOEDI
LECHOANO
5
th
Applicant
NTEBALANG
KHOETE
6
th
Applicant
TREVOR
TSUPA
7
th
Applicant
and
PRECINCT FINANCIAL
CONSULTANTS (PTY) LTD
1
st
Respondent
LEBOKO ANDRIES
MOGOTSI
2
nd
Respondent
NIEL DU
PLESSIS
3
rd
Respondent
JUDGMENT
BY:
MHLAMBI J,
HEARD
ON:
14 MARCH 2019
DELIVERED
ON:
26 APRIL 2019
MHLAMBI,
J
Introduction
[1] The
applicants approached the court on an urgent basis for an order
compelling the first respondent
to pay forthwith commission and/or
salaries duly earned by the first to the seventh applicants.
[2] The
first respondent, and subsequently the second respondent, opposed the
application. On 08 March
2019, Chesiwe, J granted an order that the
application be heard as one of urgency. The matter was postponed to
14 March 2019 as
an opposed application and time periods were
established for the filing of both answering and replying affidavits.
[3] As
at the date of the launching of this application, the first, second,
fourth and sixth applicants
were in the employ of the first
respondent as independent brokers registered with the Financial
Sector Conduct Authority
[1]
who were entitled to the
payment of commission whereas the fifth and seventh applicants were
salaried employees
[2]
.
[4] The
first respondent is a registered financial service provider,
registered as such in terms
of the Financial Advisory and
Intermediary Services Act, 37 of 2002 (“FAIS”). The
second respondent is the sole director
and key individual of the
first respondent. The third respondent is a registered accountant and
auditor appointed by the court
as an administrator who had authority
to deal with any dispute regarding payments between the fifth
applicant and the second respondent
[3]
.
Background
[5] The
fifth applicant was, in terms of a ruling by the registrar of the
financial services
provider, excluded and prohibited for a period of
five years, which ended on 31 October 2018, from furnishing financial
services
or rendering any intermediary services to clients. He was
also disallowed to render any financial services on behalf of any
registered
financial service provider. In order to remain involved in
the financial services industry, the fifth applicant and second
respondent
established the first respondent; with the second
respondent appointed the sole shareholder and director. As stated by
Daffue,
J in the Mogotsi case
[4]
,
the transaction was a simulated one designed to pull wool over the
financial services board’s eyes as the parties knew that
the
financial services board would not accept this type of partnership.
[6] The
second respondent ran into financial difficulties and withdrew more
money from the first
respondent’s bank accounts than he was
entitled to. The fifth applicant filed an urgent application in order
to freeze the
first respondent’s bank accounts. The
rule
nisi
obtained
by the fifth applicant was discharged by agreement on 20 September
2018 and the bank accounts were unfrozen. An administrator
was
appointed as sole signatory and administrator of the bank accounts on
condition that both the fifth applicant and the second
respondent had
access thereto. The said administrator had authority to deal with any
dispute between the parties regarding the
payments between them.
[7] Certain
misunderstandings cropped up between the parties which led to the
order by Daffue, J on
24 January 2019 rescinding the order granted on
20 September 2018, replacing the administrator with the third
respondent. Both
the fifth applicant and the second respondent were
given access to the bank accounts.
[8] During
January 2019 payments, in the form of commission or salaries were not
made to the
applicants and matters came to a heard during February
2019 when repeated demands were made for the payment of the said
salaries
or remuneration. This culminated in the present application
being launched on an urgent basis on 07 March 2019.
Points
in
limine
[9]
The first and second respondents in their opposition of the
application, raised the following
points in
limine:
9.1
The
deponent to the founding affidavit did not have the authority to
institute the proceedings on behalf of the six other applicants
as
she did not allege that she was authorised to so institute the
proceedings; alternatively that the deponent did not have an
authority in relation to the third and sixth applicants;
9.2
The court
did not have jurisdiction to adjudicate the matter in terms of the
provisions of section 77, read together with
section 73A
of the
Basic
Conditions of Employment Act 75 of 1997
as amended.
9.3
The
third and fifth respondents where currently engaged in arbitration
proceedings at the Commission for Conciliation Mediation
and
Arbitration (CCMA) as they had referred disputes relating to unfair
dismissal to be heard by this body.
9.4
The
founding affidavit was incorrectly commissioned as it was signed on
06 March 2017 whereas the commissioning took place on 07
March 2019.
This constituted an irregularity which rendered the application
fatal. Furthermore the confirmatory affidavits of the
third and sixth
applicants were not deposed to, therefore rendering any allegations
in relation to them as inadmissible hearsay.
The
respondents’ response to the applicants’ claims
[10] In
their opposing affidavits, the respondents admitted that the
applicants had a clear contractual right to
payments of their
commission and/or remuneration and that the commission payments were
made for products already sold, for which
such payments and amounts
were due and had been confirmed by the product supplier in the fee
statements.
[5]
The
applicants had therefore a clear right that their income would not be
withheld unlawfully and/or unilaterally by the first respondent
and
that the fee statements were correct.
[6]
However, payments had
subsequently been made and no payments were currently or previously
due to the third applicant.
[7]
The first respondent had
made payments to the applicants in terms of what was due to each of
them.
[8]
The
replying affidavit
[10] In
brief, the applicants argued for the dismissal of the points in
limine
on the following grounds:
10.1
The respondents failed to act in terms of Uniform
Rule 7
in order to
join issue with the first applicant’s lack of authority to act
or depose to an affidavit on behalf of the co-applicants;
10.2
The High Court’s jurisdiction was not ousted to entertain an
ordinary common law issue relating to
a contract of employment;
10.3
The respondents failed to satisfy the requirements of the defences of
lis pendens
. Besides, the dispute before the CCMA, an unfair
dismissal, was different from the one
in casu
as the disputes
were not of the same subject matter.
10.4
The first applicant’s affidavit was signed on 07 March 2019 but
erroneously dated 06 March 2019. Though
the third and sixth
applicants’ affidavits were not signed and attested to as at
the time of the service thereof due to the
urgent nature of the
application, signed affidavits were filed after service was effected
and before the application was lodged
[9]
.
[11]
It was submitted on behalf of the applicants that the claims of both
the first and the sixth applicants
were academic as the amounts
claimed were paid. It was contended that the third applicant claimed
the amount of R 22 117.79
being the commission for the amount
payable during February for ongoing business. The second applicant
claimed payment of the amount
of R 10 756.35 in respect of the
outstanding amount since January 2019. The fourth applicant claimed
only his mentorship fee
in the amount of R 7 520.42 for the
mentorship of the sixth applicant. The fifth applicant claimed his
monthly mentorship
fee in the amount of R 11 495.63 while the
seventh applicant claimed an amount of R 10 000.00 in respect of
his monthly
salary.
[12]
A draft order was filed in terms of which reduced amounts were
claimed in respect of the second, third,
fourth, fifth and seventh
applicants.
Points
in issue
[13]
It would appear to me that the only points in issue is whether
payments were effected in full in respect
of the second, third,
fourth fifth and seventh applicants and whether the fifth applicant
should receive payment only after the
deliberations of the CCMA.
[10]
Discussion
[14] The
fifth applicant and the second respondent signed a written agreement
during a mediation process on 27
June 2018 in terms of which a
decision was taken to dissolve the partnership; a process which was
seen as a restructuring of the
business in the best interests of the
clients, the individual business partners, the existing and new
business
[11]
.
[15] The
way forward would entail, amongst others, the implementation of the
restructuring (exit strategy)
to be done as soon as practically
possible, but not later than 28 February 2019. Progress would be
monitored formally on a monthly
basis by the external mediator and
the representative of the product supplier. The value of all income
generated through the fifth
applicant’s efforts would be
transferred to the new business entity and it was emphasised that
communication and mutual agreement
in respect of any actions in this
regard would be of vital importance.
[16] Paragraph
3 of the agreement referred to the first repondent’s
representatives and reads as follows:
“
3.1
…
3.2
…
3.3
The existing remuneration structures will remain unchanged until at
least 28 February 2019.
3.4
The staff of Precinct will be informed of this restructuring and the
consequences thereof as soon
as the preparation has been finalised.”
[17] There
is no evidence that as at 28 February 2019 the restructuring of the
business or the exit strategy had
either been implemented or
finalised. The third respondent, who was the sole signatory and
administrator of the bank accounts,
that both the fifth applicant and
second respondent had access to, and who had authority to deal with
any dispute regarding the
payments between the two parties in terms
of the court order, had not been discharged as at 28 February 2019.
It goes without saying
therefore, that as at the latter date, the
dispute was still unresolved and the restructuring incomplete or not
finalised as per
the agreement of 27 June 2018. This state of affairs
militates against the respondents’ allegations that the fifth
applicant
was dismissed
[12]
.
Besides, he continued to receive his salary up until January and
February 2019
[13]
. Similarly,
the respondents failed to lay a basis for the allegation that the
seventh applicant was employed as an intern, receiving
a stipend of R
3000.00 as a salary; his position having been rectified during
January 2019.
[14]
Evidently, this is in
stark contrast to the written agreement of 27 June 2018 and the court
orders granted in this regard.
[18] The
applicants admitted that certain payments were made to them but that
as at 07 March 2019 they had neither
heard nor received their
remuneration in full. On the other hand, the respondents appeared to
be uncertain as to when their obligations
as regards the payment of
the remuneration to the applicants arose.
[15]
In their attempt to prove
such payments, they relied on hearsay and irrelevant evidence and
failed to grapple and address the issues
at hand.
[16]
Conclusion
[19] In
the light of the above, I agree with the submission of the
applicant’s counsel that there was
no substance in the points
in
limine
raised by the repondents. The real issue of whether
the applicants were paid the amount due to them was parried and
skirted by the
respondents and never properly addressed. The
preliminary points raised were but an obfuscation and an endeavour by
the respondents
to evade grappling with the real issues. Paragraph
3.3 of the written agreement between the parties makes clear that the
existing
remuneration structures would remain unchanged until, at the
earliest, 28 February 2019. The
status quo
had to be
maintained for this period as any changes by the respondents of such
structures would be a breach of the agreement. Neither
justification
nor reasons were proffered for the non-compliance with the provisions
of the agreement. In these circumstances, the
respondents’
reliance on the special pleas appear hollow and uncalled for.
Consequently, I am of the view that both the points
in
limine
and
the respondents’ defence to the applicants’ claims must
be rejected. The application must therefore succeed.
Costs
[20] The
first and sixth applicants, despite their claims having been settled,
insisted on the payment of
their costs as they were of the view that
the respondents effected payments or that such payments came to their
attention after
the application was lodged. I am inclined to agree
with this view. The amounts claimed and reflected on the annexures to
the founding
affidavit
[17]
do not exceed the amount
of R 200 000.00. In my view this matter was justiciable in the
magistrate’s court. Consequently
I find it appropriate that the
costs to be awarded should be awarded on the district magistrate’s
court scale.
Order
[21]
I therefore make the following order:
1. The first
respondent is ordered to pay to the applicants
remuneration/commission in the amounts as set out below:
1.1
Second applicant R 8 067.26
1.2
Third applicant R 16 588.34
1.3
Fourth applicant R 5 640.31
1.4
Fifth applicant R 8 621.72
1.5 Seventh
applicant R 12 744.00
2. The second
and third respondents are ordered to take all necessary steps in
order to give effect to the order granted
in terms of prayer 1 above;
3. The first
and second respondents are ordered to pay the costs of this
application on the scale applicable to the
district magistrate’s
court in respect of the first, second, third, fourth, fifth,
sixth and seventh applicants jointly
and severally, the one paying,
the other to be absolved.
____________
MHLAMBI, J
Counsel
for the defendant: Adv. Van Der Merwe
Instructed
by:
Stander & Green Attorneys
29 President Steyn Avenue
Bloemfontein
Counsel
for Respondents: Adv. Nhlapho
Instructed
by:
Phatsoane
Henney Attorneys
35
Markgraaf Street
Westdene
Bloemfontein
[1]
Paragraph 18.2 of the opposing affidavit
[2]
Paragraphs 13,14,15,18.2,18.3 and 21.2 of the opposing affidavit.
[3]
Lebeko Andries Mogotsi vs. Molwedi Elias Lechoano and others Case
3227/2018 FSHC
[4]
Case 3227/2018 supra, a case instituted by second respondent against
the fifth applicant and others based on their business relationship.
[5]
Paragraphs 28.1 of the respondent’s opposing affidavits;
paragraphs 36; founding affidavit.
[6]
Paragraphs 37 and 38 of the founding affidavit; paragraph 28.3 of
the opposing affidavits.
[7]
Paragraph 28.2 of the opposing affidavit.
[8]
Paragraph 30.1 of the opposing affidavit.
[9]
Paragraph 15 of the replying affidavit.
[10]
Paragraph 18.4 of opposing affidavit
[11]
Annexure “FA3” to founding affidavit
[12]
Paragraph 14 of the answering affidavit
[13]
Paragraph 21.3 of replying affidavit
[14]
Paragraph 25.10 of the opposing affidavit
[15]
Paragraph 18.6 of the opposing affidavit
[16]
Paragraphs 25.7; 25, 28.2, and 30.1 of the opposing affidavit and
Paragraph 32 and 33 of the founding affidavit; Wightman t/a
JW
Construction vs. Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA); Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
A .
[17]
Annexures “FA 8.1 to 8.3” to the
founding affidavit.