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[2013] ZAECMHC 34
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Protea Coin Security Company (Pty) Ltd v Mpaka and Others (269/11) [2013] ZAECMHC 34 (21 November 2013)
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE LOCAL DIVISION, MTHATHA
CASE NO: 269/11
Date Heard: 8 November 2013
Date Delivered: 21 November 2013
In the matter between
PROTEA COIN SECURITY COMPANY (PTY) LTD
.........................................
Appellant
and
CHRISTINA NOMKHOSI MPAKA
.................................................................
Respondent
GALACOM DISTRIBUTORS CC
............................................................
First
Third Party
CASPER CORNELIUS HEYNEKE
....................................................
Second
Third Party
CHARLES DOUGLAS HEYNEKE
.........................................................
Third
Third Party
BARTHOLOMEUS RUDOLPH JACOBUS HEYNEKE
........................
Fourth Third Party
MARK PAUL BARNARD
.........................................................................
Fifth
Third Party
JUDGMENT
GOOSEN, J:
This is an appeal against the
judgment of the trial court which held the appellant vicariously
liable for damages suffered by
the respondent in consequence of the
shooting of her minor daughter.
The respondent instituted action
against the appellant claiming payment of damages in the amount of
R1,815,000.00 allegedly suffered
by the plaintiff’s minor
daughter when she was shot in the leg on 1 December 2005. The
respondent’s cause of action
was founded upon the allegation
that on the said day her minor daughter was walking along the
pavement near a supermarket in
Mount Frere when she was shot by an
unknown employee of the appellant. It was alleged that the said
unknown employee of the appellant
acted negligently in discharging
his firearm thereby causing injury and consequent loss suffered by
the respondent’s minor
daughter.
The respondent sought to hold the
appellant vicariously liable for the actions of the unknown employee
on the grounds that he
had acted within the course and scope of his
employment with the appellant. The appellant denied that it was
vicariously liable;
denied that the injuries allegedly suffered by
the respondent’s minor daughter were caused by an employee of
the appellant
and placed the respondent to the proof of the
allegations founding the appellant’s alleged vicarious
liability.
The appellant further caused a Third
Party Notice to be issued to the third parties cited herein
1
.
Therein the appellant alleged that it had conducted its business as
a provider of security services, in the collection and transfer
of
assets, by way of franchise agreements. In terms of the franchise
agreements a franchisee was granted rights to conduct and
operate
such business for its own account within certain designated areas.
It was further pleaded that at the time of the alleged
incident
giving rise to the respondent’s claim a franchise agreement
was in existence between the appellant itself and
the first third
party; that the appellant was not conducting business within the
Mount Frere area at all and that, insofar as
the conduct giving rise
to the respondent’s claim may be established at the trial, the
third parties, pursuant to the franchise
agreement, owed to the
appellant an indemnity in respect of any claims arising against the
appellant.
The trial court found that the
respondent had established that the unknown person responsible for
shooting the respondent’s
daughter was indeed an employee of
the appellant and accordingly held the appellant vicariously liable
for the injuries and damages
sustained by the respondent. It is
against this finding that the appellant appeals.
The facts giving rise to the claim
may briefly be stated as follows. On 1 December 2005 the
respondent’s daughter proceeded
into Mount Frere. When walking
along the main road and in the vicinity of First National Bank she
noticed a vehicle which bore
the insignia of the appellant. She
proceeded past the vehicle and a short while later the vehicle came
to a stop near her when
she was in the vicinity of a supermarket.
She noticed armed guards who were wearing a black uniform and on the
chest area had
the insignia of the appellant. These guards
apparently warned hawkers in the area that they should be careful
lest they be injured
as a result of the accidental discharge of a
firearm. According to the respondent’s daughter she heard a
gunshot go off
and felt pain in her leg and realised that she had
been shot. She was transported to hospital where she received
treatment. At
the trial the question as to the liability of the
appellant had been separated from consideration of the quantum of
the respondent’s
damages.
Before dealing with the basis of the
trial court’s finding and the submissions advanced on appeal
it is appropriate to record
the evidence adduced by the appellant at
trial. Mr Marais testified that during 2001 the appellant, which
then operated under
the name Coin Security Group Pty Ltd, entered
into a franchise agreement with the first Third Party in terms of
which the First
Third Party was licensed to operate the business of
assets collection and transfer utilising the intellectual property
of the
appellant, including its name, insignia and business systems,
within designated areas determined by the agreement. It was his
evidence that at the time of the alleged incident the appellant was
not conducting business operations in that area. It was further
his
testimony that the person allegedly responsible for the unlawful
shooting of the respondent’s minor daughter was not
an
employee of the appellant. In so far as it was established that the
person responsible for the alleged shooting was a security
guard
operating the business of Coin Security Group, that person would
have been an employee of the third party, acting in terms
of the
franchise agreement concluded between the appellant and the third
party. It was Mr Marais’ evidence that prior to
2007 the
appellant’s business was operated under the name Coin Security
Group Pty Ltd. In 2007 the company underwent a
name change to
reflect its present name in consequence of the takeover of the
business of another company.
The trial court found that the
respondent had proved that the appellant was vicariously liable for
the actions of the unknown
person who had caused the respondent’s
loss. It based this finding upon the following considerations
namely:
(a) that the appellants pleadings did
not set out the nature of its defence, namely, that there was no
employment relationship between
the appellant and the alleged
wrongdoer;
(b) that the franchise agreement did
not provide the protection claimed by the appellant; and
(c) that upon the application of the
“dominant impression” test an employer-employee
relationship was established between
the appellant and the wrongdoer.
The trial court was critical of the
appellant’s pleadings and came to the conclusion that the
defence pleaded did not sufficiently
foreshadow its reliance upon
the franchise agreement. The trial court also found that the manner
in which the appellant had pleaded
its case contained an implied
admission of the employer-employee relationship between it and the
alleged wrongdoer. Whilst the
trial court’s criticism of the
pleadings is to some extent justified, the conclusion reached
appears to be based upon a
misdirection as to the nature and effect
of the plea.
In this regard it is apparent from a
careful reading of the plea and the appellant’s reply to a
request for trial particulars
that the appellant pertinently denied
that the alleged wrongdoer was an employee of the appellant. In this
respect the respondent
was put to the proof of that element of its
cause of action. The evidence tendered by the appellant was
consistent with its pleaded
case, namely that the appellant was
not
conducting business in Mount Frere at the time and that the
alleged wrongdoer was
not
an employee of the appellant.
Significantly, this evidence was not challenged by either the
respondent or by the third party
at trial. It therefore stands
un-contradicted and must be accepted. Inasmuch as the trial court
did not so accept the evidence
it misdirected itself as to the
proven facts. The trial court also erred in finding that the
respondent had discharged the onus
which rests upon the respondent.
It is a well recognised principle of
law that in order to establish vicarious liability of a party for
the negligent conduct of
another, two elements must be proved namely
(a) a relationship of employment and (b) that the employee acted in
the course and
scope of his or her employment. Absent proof on a
balance of probabilities of either or both of these elements a
plaintiff’s
claim must fail.
In this instance the respondent bore
the onus throughout. The appellant clearly and unambiguously placed
the existence of an employment
relationship in issue. Its evidence,
which was un-contradicted, was to the effect that it was not
operating in Mount Frere at
the time of the incident and that there
was in existence a franchise agreement which regulated the operation
of its business
and that the third party was then, pursuant to that
franchise agreement, operating under licence in that area. The
effect of
this evidence was to establish on the probabilities that
the alleged wrongdoer was not an employee of the appellant. The
trial
court found that the “impression” that would have
been created in the mind of a member of the public was that the
alleged wrongdoer was an employee of the appellant, by reason of the
insignia on the vehicle and uniforms. That is not sufficient
to
establish as a matter of fact that the wrongdoer was an employee. In
the circumstances the trial court’s finding that
the wrongdoer
was an employee of the appellant cannot be sustained. It follows
from this that the respondent did not discharge
the onus to
establish the requisite elements for vicarious liability on the part
of the appellant.
It is, in our view, not necessary to
consider whether the ‘dominant impression test’ in
respect of the employer-employee
relationship finds application in
the circumstances of this matter. It is also unnecessary to canvass
the terms of the franchise
agreement in respect of the question of
an indemnity operative in favour of the appellant. The former issue
does not arise because
of the established facts. The latter issue
only arises in the event that it is established that the appellant
is liable to the
respondent.
The only remaining question is that
of costs. The question of the appellant’s trial costs and
those on appeal must, in the
ordinary course, necessarily follow the
result. Mr Boot, for the appellant, put up a spirited argument that
the third party should
be ordered to pay its own costs in the light
of the un-meritorious defence put up by it and the fact that the
third party actively
joined the liss in the dispute between the
appellant and the respondent at trial. The argument, unfortunately,
does not take
into consideration the fact that the third party was
compelled to present a defence, however un-meritorious it may have
been,
by reason of having been joined by the appellant. In this
respect the third party is in no different a position to a defendant
who, notwithstanding a spurious defence, is successful on account of
a fundamental defect in the plaintiff’s case. Mr Boot
could
point to no authority which supports a finding that the defendant
(for which read third party in the circumstances) should
be
penalised in costs even if successful simply because the defence
concerned is without merit. Mr Boot was constrained to rely
upon the
exercise of this court’s discretion in regard to costs in this
respect. In our view there is no compelling reason
to depart from
the well-established principle that the unsuccessful party should
bear the costs of the successful party. In this
instance, as between
the appellant and the third party, the third party has succeeded –
both at trial and on appeal –
albeit on the basis that the
appellant has succeeded in its defence of the claim against the
respondent.
In the result I would make the
following order:
(a) The appeal succeeds.
(b) The order of the trial court is
altered to read:
The plaintiff’s claim is
dismissed with costs; and
The defendant is ordered to pay the
costs of the third party.
(c) The respondent is ordered to pay
the appellant’s costs on appeal; and
(d) The appellant is ordered to pay
the costs of the third parties on appeal.
G. GOOSEN
JUDGE OF THE HIGH COURT
EKSTEEN, J.
I concur.
J. W. EKSTEEN
JUDGE OF THE HIGH COURT
PAKADE, ADJP.
I concur. It is so ordered.
L. P. PAKADE
ACTING DEPUTY JUDGE PRESIDENT
Appearances: For the Appellant
Mr. Boot
Instructed by Smith Tabata
Incorporated
For the Respondent
Mr Ntayiya
Instructed by Fikile Ntayiya &
Associates
For the Third Party
Mr. Heunis
Instructed by Heunis & Associates
1
The
Second to Fifth Third Party are shareholders of the First Third
Party and entered into suretyship agreements pursuant to the
franchise agreement concluded between the Appellant and the First
Third Party.