About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2011
>>
[2011] ZAFSHC 147
|
|
Grenfell-Dexter and Others v Henred Fruehauf (Pty) Ltd (5346/2009) [2011] ZAFSHC 147 (8 September 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case No. : 5346/2009
In
the matter between:-
ANN SHIRLEY
GRENFELL-DEXTER
….............................
First
Plaintiff
WOLFGANG KURT
LEHMANN
…..................................
Second
Plaintiff
MARTHA MARIA SWART
…...............................................
Third
Plaintiff
LEONARD
WILLIAMS
…..................................................
Fourth
Plaintiff
and
HENRED
FRUEHAUF (PTY) LTD
….......................................
Defendant
_____________________________________________________
HEARD ON:
17 MAY 2011
_____________________________________________________
DELIVERED ON:
8 SEPTEMBER 2011
_____________________________________________________
JUDGMENT
_____________________________________________________
K.J. MOLOI, J
[1] In this matter the
plaintiffs claimed as against the defendant payment of certain
amounts said to represent interest on the
awards made by the Labour
Court in its order dated 14 October 2005. According to the plaintiffs
the interest claimed was based
on an oral agreement entered into by
the parties through their legal representatives on 2 July 2009. The
defendant had paid the
amounts as ordered by the Labour Court
together with the interest thereon on 11 September 2009 up to and
including 6 May 2009 and
refused to pay the interest up to and
including the 2
nd
July 2009. According to the defendant
the settlement agreement was concluded on 6 May 2009 and not 2 July
2009 and that it was
consequently not liable to pay interest accruing
from 7 May 2009 to 2 July 2009 (nor 11 September 2009 the date of
actual payment).
[2] The plaintiffs had
successfully sued the defendant in the Labour Court for certain
monies due to them in respect of severance
packages after being laid
off their employment. The Labour Court ordered that interest be paid
on the calculated amount from date
of judgement (being 14 October
2005) to date of payment. The defendant noted an appeal to the Labour
Appeal Court.
[3] Before the appeal
could be heard, the plaintiffs, through their attorney, Mr. Lock and
the defendant, through their attorney,
Mr. Snyman, entered into
settlement negotiations telephonically regarding the basis of the
settlement. This exercise was driven
by the outcome of another
similar matter that was finalised in the Labour Appeal Court, the
DA
COSTA AND OTHERS
matter wherein the defendant was involved.
As a result and on 4 May 2009 the plaintiffs’ attorney wrote to
the defendant’s
attorney as follows:
‘
Our office
received instructions that the pending Labour Appeal Court matter can
be settled on the following basis:
Each party pay its own legal costs;
Your client is liable for the proper
compliance with the Labour Court order that includes payment of
capital as well as interest;
Interest accrue until full payment of
all outstanding capital as well as interest is facilitated.
In response to that
settlement proposal, (an offer) the defendant’s attorney
replied as follows on 6 May 2009:
“
We do not
understand what you mean by ‘interest is facilitated’. If
it means interest is capitalized and then further
interest added, the
proposal is rejected. Your client would in any event not be entitled
to such kind of interest in law. 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 168 920.7;
2. Our client will pay interest on the
above amount at the prescribed rate in the Prescribed Rules of
Interest from 14 October 2005,
being the date of judgment, to date of
payment.
3. Each party will pay its own costs
of the matter.”
The letter was concluded
with the words:
“
We await to
hear from you.”
[4] On 7 May 2009 the
plaintiffs’ attorney wrote to the defendant’s attorney as
follows:
“
We refer to
the above matter as well as your letter dated 6 May 2009. Although
writer fervently believes that the outcome of this
pending appeal
will follow a similar fate as the preceding
MADIKOR
appeal that served under Appeal Court case reference number JA
24/2007, writer shares the view that it is best to bring the current
dispute to fruition.
In this regard it is confirmed that
the numeric proposal 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.”
On 29 May 2009 the
plaintiffs’ attorney wrote a further letter to the defendant’s
attorney in the following words:
“
We refer to
the abovementioned matter as well as your previous correspondence
more specifically dated 6 May 2009 and our subsequent
reply thereto.
From your client’s failure and/or neglect to facilitate payment
as proposed, it is presumed that your client
is no longer desirous to
settle the pending dispute.
We will now attend the Labour Court to
ascertain the next available date for purposes of adjudicating the
pending appeal.”
[5] Following upon a
telephone communication between the two attorneys and on 2 July 2009
the plaintiffs’ attorney wrote the
following letter to the
defendant’s attorney:
“
We refer to
the abovementioned matter as well as the telephone conversation
between the writer and your Mr. Snyman and confirm that
the dispute
that served under Labour Appeal reference number JA 66/06 has been
settled on terms of the following:
1. Your client is to make payment of
the following severance packages:
1.1 A.S. Grenfell-Dexter R 73 916.61
1.2 W. Lehman R654 079.53
1.3 M.M. Swart R98 146.48
1.4 L. Williams R342 777.55
and
2. Interest on the above amounts shall
be payable from 14 October 2005 to date of payment;
3. Each party is to pay its own costs;
4. Tax directives alternatively
individual tax reference numbers will be provided to your client for
each payment, abovementioned;
5. Pursuant receipt of the tax
directives alternatively individual tax, reference numbers, your
client will deduct and pay over
to the Receiver of Revenue the
necessary tax so regulated in terms of the tax directive
alternatively in terms of the applicable
taxation table as released
by the Receiver of Revenue, as the case may be.
We undertake to revert back to you
upon receipt of the necessary tax directives alternatively individual
tax reference numbers.”
On even date the
defendants’ attorney responded by letter as follows:
“
We refer to
the above matter and our discussion yesterday.
We confirm that the matter is
[settled] on the basis as set out in our letter of 6 May 2009, which
is again attached for your ease
of reference, as you seem not to have
received the same. We can provide you with proof of telefax should
you so wish.
We confirm that all we need is either
tax directives or income tax reference numbers of the four individual
applicants, and payment
can be made. In this case, the four
individual amounts are quantified.
We confirm that once our client has
made the settlement payments, we shall withdraw the appeal set down
for 11 September 2009. Therefore
do not make any preparations now for
the appeal.
We await the abovementioned, so our
client can process the payments.”
The tax directives were
provided to the defendants’ attorney on 2 September 2009 and
payment was effected on 11 September
2009.
[6] The respective
attorneys that were representing the parties during the negotiations
i.e. Mr Lock, for the plaintiffs and Mr
Snyman, for the defendant
testified at the hearing. The relevant part of their evidence was
that it was understood that the payment
would be made as at the date
of the settlement being reached and not necessarily on the date of
the actual payment as per the Labour
Court’s ruling. The
motivation for this point of view was, of course, the fact that from
that date all what needed to be
done was for the plaintiffs’
to, supply the tax directives from the SA Revenue Services or provide
their individual tax references
for the calculation of the income tax
to be deducted which formed the first charged on the payments due to
them and only thereafter
would payments be made to them individually.
They agreed the tax deduction was the first charge and therefore the
defendant would
not be expected to pay interest for so long as the
plaintiffs shall have not provided the tax directives nor tax
reference numbers,
to determine their tax liability. As pointed out
above the tax directives were provided to the defendant’s
attorney on 2
September 2009 and the actually payment was made to the
plaintiff’s attorney on 11 September 2009.
[7] The actual dispute
was whether the settlement agreement was reached on 6 May 2009 as the
defendant contended or on 2 July 2009
as per the plaintiffs. It was
also agreed in written arguments that the court had to make a ruling
on that issue, the date first,
as interest would be payable only up
to that date for reasons given above.
[8] To determine on which
date the settlement agreement was reached one needs to follow the
trajectory of the correspondence exchanged
between the respective
attorneys. The two witnesses called differ as to the final date of
the settlement. According to Mr Snyman,
for the defendant, the
settlement agreement was reached on 6 May 2009 when he accepted the
offer made by Mr Lock in his letter
dated 4 May 2009. Mr Lock on the
other hand, contended the settlement was reached on 2 July 2009. It
was contended that Mr Snyman’s
letter of 6 May 2009 constituted
an offer or counter offer which was not accepted by the plaintiff. Mr
Snyman in his evidence testified
that the use of the phrase “…our
client’s final proposal is” in his letter was unfortunate
because he
meant to clarity the position of what was agreed on as the
rest of the sentence indicated. The court accept that explanation as
no new offer was made save for repetition of what was offered in Mr
Lock’s letter dated 4 May 2009. This is so because what
matters
is the substance of what is said and not the form of the words used.
Even if the acceptance is made with …
“a request
which is not a stipulation of an additional provision does not
deprive his acceptance of its normal legal effect,
the conclusion of
a contract.”
The Principles of the Law of
Contract, 6
th
edition by Kerr (2002) p 98 and
The
JMR Furniture Holdings and Another v COWLIN
1983
(4) SA 541
(W) AT 544g. One needs to look at what the settlement
entails to determine at which date it was reached. The essentialia of
the
settlement are:
(a) each party will pay
own costs;
(b) defendant would pay
the severance packages as ordered by the Labour Court;
(c) interest on the
capital amount would be payable until the capital had been paid in
full. (See par 6 above as to what was meant
thereby).
Theses have been
consistent throughout.
[9] The above is the core
of the settlement and runs through all the correspondence until 2
July 2009. The argument that the defendant’s
letter dated 6 May
2009 was not acceptance of the plaintiff’s’ offer of 4
May 2009 because it sought the applicants’
confirmation cannot
hold water. The defendant categorically wanted an explanation of what
was meant by “interest is facilitated”
hence he concluded
his letter by saying “we await to hear from you”. The
defendant explicitly stated that if the phrase
“interest is
facilitated” then, and only in that event, the offer was
rejected. The acceptance of the offer without
payment of compound
interest was confirmed in the plaintiffs’ letter dated 7 May
2009. In that letter the plaintiffs stated:
“
In this
regard it is confirmed that the numeric proposal set out in your
letter,
supra
,
is accepted
on
the
previso
that payment of the debt amount, capital, as well as costs be
facilitated within 14 days from date of this letter
.”
(my
underlining)
The underlined statement
does not affect the essence of the offer that was accepted in so many
words. The offer was made by the
plaintiffs’ in their letter
dated 4 May 2009. It was accepted by the defendant in its letter
dated 6 May 2009 and confirmed
by the plaintiffs in the letter dated
7 May 2009. In it it was also agreed that interest would be paid and
when, i.e. on the date
of settlement. The defendant was thus entitled
to ignore what the plaintiffs said in the underlined phrase as well
as the contents
of the letter dated 29 May 2009 as those were not
part of the offer made on 4 May 2009 and accepted on 6 May 2009. That
phrase
could not constitute a revocation of the offer either as the
offer was already accepted:
PHILLIPS v AIDA REAL ESTATE (PTY)
LTD
1975 (3) SA 198
(A) 207 – 208;
BUILDING
MATERIAL MANUFACTURERES LTD V MARAIS
1990 (1) SA 243
(O) 248
– 249.
[10] The letter dated 2
July 2009 from the plaintiffs’ attorney repeats the terms
already agreed to on 6 May 2009 and further
served to indicate that
the payment was dependant on the provision of the tax directives.
This is confirmed in a letter from the
defendant’s attorney
reiterating the acceptance of the offer made on 4 May 2009 and
accepted on 6 May 2009. There is totally
no suggestion of a new offer
that was accepted on 2 July 2009 but emphasis of the need to provide
tax directives without which
there could be no payment done by
operation of law. The date of the settlement agreement is the 6
th
of May 2009.
[11] The plaintiffs’
claim is consequently dismissed with costs.
____________
K.J. MOLOI, J
On
behalf of plaintiffs: Ebersöhn Attorneys
NORTHRIDING
(Ref:
Dr Gerrie Ebersöhn / GE327
c/o
Naudes
BLOEMFONTEIN
(Ref:
MV/SJ/EBE22/0001
On
behalf of defendant: Adv. S. Grobler
Instructed
by:
Snyman
Attorneys
c/o
Honey Attorneys
BLOEMFONTEIN
(Ref:
BM Jones/jh/I 17862
sp/em