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[2012] ZAFSHC 210
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Lehmann and Others v Henred Fruehauf (Pty) Ltd (A100/2012) [2012] ZAFSHC 210 (15 November 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Appeal No. : A100/2012
In
the appeal between:
WOLFGANG KURT
LEHMANN
......................................
First
Appellant
MARTHA MARIA SWART
..........................................
Second
Appellant
LEONARD
WILLIAMS
....................................................
Third
Appellant
and
HENRED
FRUEHAUF (PTY) LTD
.......................................
Respondent
_____________________________________________________
CORAM:
HANCKE, AJP
et
KRUGER, J
et
THAMAGE, AJ
_____________________________________________________
HEARD ON:
11 NOVEMBER 2012
_____________________________________________________
JUDGMENT BY:
HANCKE, AJP
DELIVERED ON:
15 NOVEMBER 2012
_____________________________________________________
[1] This is an appeal
against the judgment and order granted by the Court
a quo
on 8
September 2011 (Moloi J), whereby he dismissed the appellants’
claim with costs. Leave to appeal was refused and the
appeal comes to
this court in terms of an order granted by the Supreme Court of
Appeal on 27 March 2012. This appeal only concerns
the second to
fourth plaintiff as the first plaintiff passed away.
[2] The plaintiffs
instituted a claim against the defendant for the payment of interest.
It is the plaintiffs’ case that the
defendant failed to pay
interest in accordance of the terms of a verbal settlement agreement,
and as such breached the terms of
the said agreement. It is the
plaintiffs’ case that the agreement was concluded on or about 2
July 2009. The plaintiffs claim
interest for the period 7 May 2009 to
2 July 2009 in respect of the severance packages which the Labour
Court ordered the defendant
to pay them, and which amounts the
plaintiffs subsequently agreed to pay to them.
[3] It is common cause
that the defendant paid interest in respect of the said severance
packages for the period 14 October 2005
to 6 May 2009 to the
appellants.
[4] It is the defendant’s
defence that no settlement agreement was concluded on 2 July 2009 and
that a written settlement
agreement was concluded on 6 May 2009 in
terms of which the parties had agreed that interest would be
calculated on the said severance
packages from 14 October 2005 to
“date of tender of payment”. It had tendered payment on 6
May 2009 to the plaintiffs
and as such the plaintiffs were not
entitled to interest after 6 May 2009. When the trial started the
court, at the request of
the parties, ordered that the merits and
quantum be separated and that the following three issues to be
decided first:
(i) When was the
settlement agreement concluded (either May 2009 or July 2009); and
(ii) What were the terms
of the said agreement in respect of the interest to be paid by
defendant to the plaintiffs; and
(iii) Up to what date
must the defendant pay interest?
(iv) If interest on the
severance packages was payable beyond 6 May 2009, until what date
must interest be calculated on the severance
packages that the
respondent had to pay to the appellants?
[5] During the trial it
was the defendant’s case that although the written settlement
agreement provided that interest is
payable until date of payment,
the latter phrase actually meant that interest would only be
calculated until date of conclusion
of the settlement agreement,
being 6 May 2009 as Mr Snyman, who testified on behalf of the
defendant, understood that payment would
occur on 6 May 2009.
In that regard he
testified as follows:
“
Well, that
is not correct, the term of the agreement was that interest would
accrue to date of payment. But I have already explained
to you that I
understood by date of payment and how date of payment would work and
how it would have practically unfold if your
clients had done their
job and had gotten the tax directives.”
[6] It appears from the
record of the proceedings that the Labour Court ordered the defendant
to pay certain severance packages
to the plaintiffs, together with
interest from date of judgment
to date of
payment
, plus legal costs. The defendant
appealed against the said order to the Labour Appeal Court.
[7] On 10 March 2009 the
defendant’s attorneys faxed a letter to the plaintiffs’
previous attorneys by means of which
the defendant offered to settle
the matter on the basis that, firstly, the defendant pays the
severance packages, as ordered by
the Labour Court, within seven days
and, secondly, each party pays its own costs. At that stage there was
no tender to pay interest
in respect of the said severance packages.
[8] On 4 May 2009 Mr Lock
(from Lock Attorneys), on behalf of the plaintiffs, faxed a letter to
Mr Snyman, on behalf of the defendant,
in which he indicated that the
plaintiffs were willing to settle the matter on the basis that:
“
1. Each
party pays its own legal costs;
2. Your client is liable for the
proper compliance with the Labour Court order and includes payment of
capital as well as interest;
3. Interest to accrue until full
payment of all outstanding capital as well as interest is
facilitated.”
[9] Thereafter, on 6 May
2009, Snyman faxed a letter to Lock inquiring what was meant by
“interest is facilitated” and
further indicating that if
it meant that the defendant had to pay compound interest, then the
appellants’ offer was rejected,
but more importantly Mr
Snyman’s letter stated:
“
Once again,
and in order to resolve this matter, and that there is no doubt as to
the terms of the settlement, our client’s
final proposal is:
1. Our client will pay the capital
amount of the claim which is a total amount of R1 168 920.17;
2. Our client will pay interest on the
above amount at the prescribed rate in the Prescribed Rate of
Interest Act from 14 October
2005, being the date of judgment, to
date of payment;
3. Each party will pay its own costs
of the matter.
We wait to hear from you.”
[10] During the trial
Snyman testified on behalf of the defendant that the wording of his
letter (namely “our client’s
final proposal”) was
“unfortunate” and that he actually intended to accept the
counteroffer made by Lock on 4
May 2009, by means of his letter dated
6 May 2009. As such he maintained that the settlement agreement had
been concluded on 6
May 2009.
[11]
Mr Ebersöhn, on behalf of the plaintiffs submitted that the
Court
a quo
erred
in finding that the settlement agreement was concluded on 6 May 2009
and also in accepting Snyman’s explanation that
the wording of
his own letter was “unfortunate” and as such that the
letter 6 May 2009 in fact constituted an acceptance
of the offer
contained in Lock’s letter dated 4 May 2009. In this regard he
submitted that the letter 6 May 2009 did not
purport to accept the
plaintiffs’ counteroffer dated 4 May 2009. The letter clearly
states that “our client’s
final proposal is...”. He
argued that this signifies that the defendant made a settlement offer
or a revised settlement offer
and that the letter even asks for a
reply. I agree with this argument.
[12]
The unexpressed subjective intentions in writing a letter are
irrelevant and that a court must ascertain how a reasonable person
would have understood the contents of the said letter. See
BOERNE
v HARRIS
1949 (1) SA 793
(A) at 801. Mr Grobler, for
defendant, contended that there was no written agreement between the
parties and that both parties
adduced evidence as to what the
agreement was. He relied on the last sentence in the penultimate
paragraph of
BOERNE v HARRIS
at page 801 where the
court said:
“
I leave out
of consideration the case where the recipient, to the knowledge of
the sender of the letter, is equipped with the necessary
knowledge or
ability.”
What Mr Grobler has in
mind with this submission is that Lock and Snyman were both aware of
the requirements of a tax directive
or tax number, and there was no
uncertainty as to the terms of the agreement between them as at 6 May
2009. This assumption does
not account for Lock’s reference to
costs in his letter of 7 May 2009, which on the face of it introduces
a new term, even
if one ignores the 14 day stipulation.
[13] Another problem with
Mr Grobler’s submission that an agreement came into being on 6
May 2009, is that the acceptance
of an offer must be unequivocal and
unambiguous. In
JRM FURNITURE HOLDINGS v COWLIN
1983
(4) SA 541
(W) Nestadt J stated the following at 544 A – B:
“
The
trite rule relevant in this regard is that the acceptance must be
absolute, unconditional and identical with the offer. Failing
this,
there is no
consensus
and therefore no contract.”
[14] It is important to
have regard to the contents of Lock’s letter dated 7 May 2009,
which reads as follows:
“
In this
regard it is confirmed that the numeric proposals set out in your
letter,
supra
,
is acceptable on the proviso that payment of the debt amount, capital
as well as costs, be facilitated within 14 days from date
of this
letter.
We await your reply.”
[15]
It appears that Lock’s letter of 7 May 2009 did not
unconditionally accept the terms of the letter dated 6 May 2009 in
that, firstly, it requires from the defendant also to pay the legal
costs and, secondly, the payment to be made within 14 days
from 7 May
2009. On an interpretation benevolent to the defendant of the 14 day
provision, it is a resolutive condition, meaning
there was an
agreement on 7 May 2009, which would fall away if payment is not made
within 14 days. As it is worded the 14 day clause
introduces a new
term into the contract, thereby constituting a counter offer. It is
clear that the so-called acceptance is not
unconditional and amounts
to a variation of the offer, which can be interpreted as a
counter-offer. See
GAAP POINT OF SALE (PTY) LTD v VALJEE
AND OTHERS NNO
2011 (6) SA 601
(KZD) at 605 B – C.
[16] Apart from the fact
that the letter 7 May 2009 stated the condition that payment must be
made within 14 days, the said letter
purported to accept the terms of
the offer made on 6 May 2009 (which included a term that each party
pays its own costs), but on
the other hand the said letter required
the defendant to pay the plaintiffs’ legal costs.
[17] It follows therefore
that in view of the fact that Lock’s letter dated 7 May 2009
did not unconditionally and unambiguously
accept all the terms of
Snyman’s letter dated 6 May 2009 no settlement agreement was
concluded on 7 May 2009. The next question
is until when is the
defendant liable to pay the plaintiffs’ interest?
[18] It is common cause
that on 1 July 2009 a telephone discussion took place between Snyman
and Lock. Subsequent to this conversation
Lock faxed a letter to
Snyman dated 2 July 2009 in which he referred to the said telephone
conversation and in which he confirmed
that the dispute “has
been settled on terms of the following”:
1. The defendant will pay
the severance packages due to the plaintiffs;
2. The respondent will
pay interest on the said packages calculated from 14 October
to
date of payment
;
3. Each party to pay its
own legal costs;
4. The plaintiffs will
provide tax directives to the defendant, alternatively their income
tax numbers.
[19] It is important to
note that Snyman’s letter dated 2 July 2009, which was faxed to
Lock,
inter alia
, stated that “we confirm that the
matter is in fact (settled) on the basis as set out in our letter
dated 6 May 2009...”
which letter provided that the defendant
“will pay interest on the above amount at the prescribed
rate... to date of payment”.
[20] It follows therefore
that the plaintiffs, on a balance of probabilities, proved that the
defendant is liable to pay interest
on the severance packages until 2
July 2009. It is common cause that no payment was made on 6 May 2009
and only effected on 11
September 2009. The finding of the Court
a
quo
that interest is payable until date of payment means
something different, namely that interest is payable until date of
conclusion
of the agreement, is therefore not justified in the
circumstances. It is evident from Snyman’s own letters dated 6
May 2009
and 2 July 2009 that the term is that interest is payable
until date of payment of the capital amounts. At no stage do any of
these
letters state that a different meaning or interpretation should
be given to this clear and unequivocal term. See
RAND
RIETFONTEIN ESTATES LTD v COHN
1937 AD 317
at 326.
[21] It follows from the
aforegoing that the plaintiffs are entitled to interest until 2 July
2009. The defendant is therefore liable
to pay interest on the
capital amounts until 2 July 2009, which is before the date of
payment (11 September 2009). The appeal must
therefore succeed.
[22] As far as costs are
concerned there are two remaining issues to consider. First, the
submission by Mr Grobler that Volume 4
of the record, which comprises
approximately 67 pages of argument before the Court
a quo
,
should not have been included in the appeal record. He submitted that
volume 4 had been incorporated unnecessarily and that the
appellant
should be penalised with a special order of costs. In reply Mr
Ebersöhn submitted that in the plaintiffs’
petition to the
Supreme Court of Appeal the allegation was made by the plaintiffs
that the Court
a quo
erred in its judgment when it held that
it was agreed in the written arguments that interest would only be
payable up to date on
which the agreement was concluded.
[23] The plaintiffs
alleged that they never agreed to the aforesaid in either their main
heads of argument or their replying heads
of argument. These
allegations were disputed by the defendant in its answering
affidavit. He therefore submitted that the plaintiffs
had no other
choice than to include the said heads of argument to substantiate the
plaintiffs’ allegations. I agree with
Mr Ebersöhn’s
submission in this regard. It follows that the incorporation of the
said heads of argument was necessary
and that no special order of
costs is warranted in the circumstances.
[24] Second, Mr Ebersöhn
submitted that Lock was a necessary witness, that he be declared as
such and that the costs should
include his reasonable travelling and
accommodation costs. I agree with this submission. See
TEXAS CO
(S.A.) LTD v CAPE TOWN MUNICIPALITY
1926 AD 467
at 489;
SQUIER v DALMEYER
1978 (1) SA 1167
(C) at 1168 E –
F.
[25] The following orders
are made:
1. The appeal is upheld
with costs.
2. The Court
a quo
’s
order is substituted with the following order:
2.1 It is declared that
the second, third and fourth plaintiffs and defendant entered into
the settlement agreement on 1 July 2009.
2.2 In terms of the said
agreement the defendant had to pay interest on the respective
severance packages from 14 October 2005 to
date of payment.
2.3 The defendant is
ordered to pay interest to the second, third and fourth plaintiffs on
their respective severance packages at
the rate of 15,5% per year
calculated from 7 May 2009 to 2 July 2009.
2.4 The determination of
the quantum of the second, third and fourth plaintiffs’ claim
is postponed
sine die
.
2.5 The defendant is
ordered to pay the second, third and fourth plaintiffs’ costs
on a party-and-party scale. The plaintiffs’
witness, Mr Lock,
is declared to be a necessary witness.
__________________
S.P.B. HANCKE, AJP
I
agree.
____________
A KRUGER, J
I agree.
________________
S J THAMAGE, AJ
On
behalf of the appellants: Dr G J Ebersöhn
Instructed
by:
Ebersöhn
Attorneys
c/o
Naudes
BLOEMFONTEIN
On
behalf of the respondent: Adv S Grobler
Instructed
by:
Snyman
Attorneys
c/o
Honey Attorneys
BLOEMFONTEIN
/sp