South African Tourism v Monare (JA76/2019) [2020] ZALAC 47; (2021) 42 ILJ 125 (LAC) ; [2021] 4 BLLR 386 (LAC) (27 August 2020)

78 Reportability

Brief Summary

Labour Law — Prescription — Claim for arrear salaries — Appellant's special plea of prescription dismissed — Respondent's claim for arrear salaries arising from unlawful dismissal — Court a quo found that claim had not prescribed, leading to order for payment of £257,550.42 — Appellant contended that claim prescribed as it arose on date of dismissal, while respondent argued it was a claim for specific performance — Court upheld respondent's position, ruling that the claim was not subject to prescription due to the nature of the employment contract and the circumstances of the dismissal.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings were an appeal and cross-appeal in the Labour Appeal Court against an order of the Labour Court (Thlothlalemaje J). The principal dispute on appeal concerned a special plea of prescription raised as a defence to a contractual claim for arrear remuneration, together with ancillary issues relating to interest, the date of the exchange rate for conversion of a foreign-currency award, and costs.


The parties were South African Tourism (appellant in the Labour Appeal Court and respondent in the Labour Court) and Tebogo Brian Monare (respondent in the Labour Appeal Court and applicant in the Labour Court). The Labour Appeal Court also recorded that the appellant’s late filing of the notice of appeal and power of attorney was condoned.


Procedurally, the matter arose after Mr Monare had been dismissed during the currency of a fixed-term employment contract; he pursued statutory unfair-dismissal remedies and obtained an award of reinstatement and backpay. South African Tourism refused to comply and launched review proceedings, initially succeeding in the Labour Court on jurisdictional grounds, but ultimately losing on appeal in the Labour Appeal Court. Thereafter, Mr Monare instituted a civil, contractual claim in the Labour Court for unpaid salaries flowing from the failure to give effect to reinstatement before the contract expired. The Labour Court dismissed the special plea of prescription and granted relief in his favour. South African Tourism appealed against the dismissal of the prescription plea and the resulting monetary award, while Mr Monare cross-appealed on interest, exchange rate, and costs.


The general subject-matter of the dispute was therefore the commencement and running of prescription in relation to a contractual claim for unpaid remuneration in circumstances where an employer resisted and delayed implementation of a reinstatement award by litigation, and the employee’s fixed-term contract expired before the employee could be reinstated.


2. Material Facts


South African Tourism and Mr Monare concluded a fixed-term contract of employment on about 23 December 2009. The contract was to run from 1 February 2010 to 31 January 2015, and the parties agreed in the stated case that Mr Monare was entitled to a gross remuneration package of £5 674.23 per month, payable at the end of each month, for the duration of the contractual period.


On 30 September 2010, South African Tourism dismissed Mr Monare following a disciplinary hearing. Mr Monare referred an unfair dismissal dispute to the CCMA on 17 November 2010. On 31 August 2011, the commissioner issued an arbitration award finding the dismissal substantively unfair, directing South African Tourism to reinstate Mr Monare retrospectively (as from 23 February 2011) and to pay backpay of £37 509.54 within 30 days, and in any event by no later than 23 September 2011. Reinstatement was to be effected by 13 September 2011.


It was common cause that South African Tourism, through its attorneys, communicated on 7 September 2011 that it would not reinstate Mr Monare nor pay the amount stipulated in the award, and that it intended to review the award. South African Tourism launched a review application on 13 October 2011. On 31 March 2014, the Labour Court (Van Niekerk J) reviewed and set aside the arbitration award on the basis that the CCMA lacked jurisdiction.


Mr Monare appealed. On 11 November 2015, the Labour Appeal Court upheld the appeal, found that the CCMA had jurisdiction, and dismissed the review application, with the effect (as characterised in this judgment) that the award was revived. By this time, the fixed-term contract had already expired on 31 January 2015, and Mr Monare was not reinstated.


Approximately a year later, on 18 November 2016, Mr Monare served a statement of claim seeking, in substance, unpaid salaries for the period 1 October 2010 to 31 January 2015, calculated as a globular amount of £257 550.42 (being 52 months of salary less the backpay amount in the award). South African Tourism delivered a response raising, among other defences, a special plea of prescription.


At trial, the parties agreed that prescription would be determined by way of a stated case. In the stated case (dated 5 February 2018), South African Tourism, among other things, conceded that the termination of the fixed-term contract had been unlawful, and it framed the legal question as whether the claim in respect of arrear salary had prescribed, including whether the cause of action arose on 30 September 2010, and whether prescription was affected by the period between the Labour Court judgment and the Labour Appeal Court judgment.


A further factual development was that a separate amount of R87 529.53 (a shortfall in payment of backpay) was paid by South African Tourism before the Labour Court’s finalisation of that aspect; the Labour Court nonetheless included an order for payment of that amount. Mr Monare subsequently abandoned that relief on the basis that the order had been made in error, leaving only the costs-related consequences relevant to the cross-appeal.


3. Legal Issues


The central legal question was whether Mr Monare’s contractual claim for arrear remuneration had prescribed in terms of the Prescription Act 68 of 1969, which required the court to determine when prescription commenced to run, by identifying when the relevant “debt” became due (in the sense of being immediately claimable and enforceable).


Although prescription is a legal conclusion, the dispute required a determination involving both the proper legal characterisation of the claim (including whether it was correctly treated as damages following cancellation after repudiation, or as enforcement of contractual payment obligations linked to reinstatement) and the application of legal principles to the agreed chronology in the stated case, including the practical effect of review and appeal proceedings on enforceability.


The cross-appeal raised three further issues. The first was what order should be made regarding mora interest on the unpaid salaries and from what dates it should run. The second was what date should be used for the exchange rate when converting the pound-denominated award into local currency for payment. The third was whether the Labour Court had erred in making no costs order, given that the claim was pursued as a civil claim and the parties had agreed that costs would follow the result.


4. Court’s Reasoning


The Labour Appeal Court held that the appellant’s argument on prescription rested on a flawed premise about the nature of Mr Monare’s claim. South African Tourism had treated the claim as if it were a common-law damages claim arising immediately upon repudiation by unlawful termination on 30 September 2010, capable of immediate enforcement for the balance of the contractual term as a single accelerated amount. The Labour Appeal Court reasoned that, in contract law, an accelerated claim for future performance as damages presupposes that the innocent party has accepted the repudiation and has communicated an election to cancel the contract. The stated case did not support that factual position. Instead, Mr Monare’s conduct, as reflected in the chronology, was that he contested the termination and pursued statutory reinstatement, thereby seeking to revive and enforce the employment relationship rather than cancel it.


On the facts accepted, the court considered that the claim pursued in the Labour Court “came about” because South African Tourism refused to implement the reinstatement award and then pursued review proceedings, while the fixed-term contract expired before reinstatement could occur. The Labour Appeal Court emphasised that had the award been implemented timeously (while the contract still existed), Mr Monare would have been entitled to receive his monthly salary as and when due under the contract. His claim for arrear salaries was therefore linked to the failure to give effect to reinstatement in circumstances created by the employer’s non-compliance and litigation strategy, and it could not, on that analysis, be said to have been immediately claimable on the date of dismissal.


In addressing when prescription begins, the court applied the principle that prescription starts running when a debt is due, meaning immediately claimable and recoverable, and not merely when it arises in some broader factual sense. Relying on authority explaining section 12(1) of the Prescription Act, the court accepted that prescription cannot run against a creditor before the creditor has a complete cause of action, being one that can be pursued without the debtor having a complete defence to immediate payment. The court reasoned that, given the litigation history and the resistance to implementation, the claim could only practically become enforceable after the review proceedings were finalised, which occurred when the Labour Appeal Court delivered judgment on 11 November 2015, reviving the award.


The court also endorsed, in the context of the facts, the equity-inflected concern identified in the quotation relied upon by the Labour Court from Myathaza v Johannesburg Metropolitan Bus Services (SOC) Ltd t/a Metrobus and Others (2017) 38 ILJ 527 (CC). It regarded it as iniquitous for an employer to delay implementation of an award through litigation and then rely on the elapsed time to raise prescription once the employee is vindicated. On that basis, it rejected South African Tourism’s contention that the review proceedings and attendant delay had no bearing on the commencement or running of prescription in relation to the claim as properly characterised.


A further strand of the reasoning was procedural. The court held that South African Tourism, having agreed to a stated case, was bound by it and could not “travel outside” its terms. The Labour Court had been constrained to decide only the question put to it on the stated case. South African Tourism’s later attempt to shift its position by filing a “rejoinder” or raising new contentions in supplementary heads (in particular, a contention that prescription ran separately on a monthly basis so that part of the claim had prescribed) was not consistent with the agreed case it had chosen to present. The Labour Appeal Court stressed that, if South African Tourism had been uncertain about the basis of the claim, it could have taken procedural steps such as an exception rather than committing to a stated case and then attempting to alter it.


On interest, the court accepted an approach derived from National Union of Metalworkers of South Africa obo Fohlisa and Others v Hendor Mining Supplies (A Division of Marschalk Beleggings (Pty) Ltd) (2017) 38 ILJ 1560 (CC). It reasoned that, because remuneration in this case was payable monthly, Mr Monare could insist that interest be calculated with reference to the due date of each monthly salary, running to the date of payment. As a practical matter, because the detailed interest calculation was not before the court, the court adopted an order that set the basis of calculation and provided a mechanism for resolving disputes about the computed amounts, mirroring the practical solution endorsed in Hendor.


On the exchange rate, the court accepted the appellant’s concession that the Labour Court had erred in fixing the conversion rate as at 31 January 2015 (the contract expiry date). It held, on the authority cited, that the appropriate date is the date of payment.


On costs, the court reiterated that while costs in Labour Relations Act matters do not necessarily follow the result, that approach is not applicable in the same way to civil claims not brought under the Labour Relations Act. It held that the Labour Court appeared to have assumed that no costs order was appropriate and failed to take relevant considerations into account, including that the matter was a civil claim, that the parties had agreed in the stated case that costs should follow the cause, and that Mr Monare had been required to bring an additional application to enforce payment of the admitted shortfall. The Labour Appeal Court therefore substituted a costs order in favour of Mr Monare. It also held that, in the appeal and cross-appeal, there was no reason to depart from the general rule that costs follow the result, and it allowed costs including the costs of two counsel.


5. Outcome and Relief


The Labour Appeal Court dismissed the appeal by South African Tourism and upheld the cross-appeal by Mr Monare.


It amended the Labour Court’s order to provide, in substance, that the special plea of prescription was dismissed; that South African Tourism must pay Mr Monare £257 550.42 as damages in respect of unpaid salaries for the period 1 October 2010 until 31 January 2015; that conversion from pounds sterling to rand must occur at the exchange rate applicable at the date of payment; and that interest must be paid at the prescribed legal rate applicable from time to time, calculated from the date on which each salary for the period 23 September 2011 to 31 January 2015 fell due, to the date of final payment. The order also prescribed a mechanism for the parties to attempt agreement on the interest amounts, failing which they should attempt agreement on a third party calculation, and failing that either party may approach the Labour Court to determine the interest amounts.


On costs, the amended order required South African Tourism (as the respondent in the Labour Court) to pay the costs, including the costs of the enforcement application concerning the short payment. In addition, South African Tourism was ordered to pay the costs of the appeal and cross-appeal, including the costs of two counsel.


Cases Cited


Makate v Vodacom (Pty) Ltd 2016 (4) SA 121 (CC).


Myathaza v Johannesburg Metropolitan Bus Services (SOC) Ltd t/a Metrobus and Others (2017) 38 ILJ 527 (CC).


HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N).


Swart v Vosloo 1965 (1) SA 100 (A).


Standard Bank of South Africa Ltd v Miracle Investments 67 (Pty) Ltd and Another 2017 (1) SA 185 (SCA).


Coca Cola Sabco (Pty) Limited v Van Wyk (2015) 36 ILJ 2013 (LAC).


Deloitte Haskin & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd [1990] ZASCA 136; 1991 (1) SA 525 (A).


Truter & Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA).


Van Deventer v Ivory Sun Trading 77 (Pty) Ltd 2015 (3) SA 532 (SCA).


Mtokonya v Minister of Police 2018 (5) SA 22 (CC).


National Union of Metalworkers of South Africa obo Fohlisa and Others v Hendor Mining Supplies (A Division of Marschalk Beleggings (Pty) Ltd) (2017) 38 ILJ 1560 (CC).


Standard Chartered Bank of Canada v Nedperm Bank Ltd [1994] ZASCA 146; 1994 (4) SA 747 (A).


Radell v Multilateral Motor Vehicle Accidents Fund 1995 (4) SA 24 (A).


Ncanana and Another v Dual Products International (SA) CC and Others [2019] 11 BLLR 1238 (LAC).


Stokwe v Member of the Executive Council: Department of Education, Eastern Cape and Others (2019) 40 ILJ 773 (CC); [2019] 6 BLLR 524 (CC).


Biase v Mianzo Asset Management (Pty) Ltd (2019) 40 ILJ 1987 (LAC).


Legislation Cited


Prescription Act 68 of 1969.


Labour Relations Act 66 of 1995.


Rules of Court Cited


No rules of court were expressly cited in the judgment. The judgment referred to section 145(7) of the Labour Relations Act 66 of 1995 in discussing the practical effect of pending review proceedings.


Held


The Labour Appeal Court held that South African Tourism failed to prove that prescription commenced on 30 September 2010, as it had contended in the stated case. The court held that the claim, properly characterised on the agreed facts, was not an immediately enforceable, accelerated damages claim arising upon dismissal; rather, it was a claim that became enforceable only once the litigation over the reinstatement award was finalised and the award revived, in circumstances where the employer had resisted implementation and the contract expired before reinstatement could occur.


The court further held that, having agreed to determination by a stated case, South African Tourism was bound to the case it presented and could not broaden or alter it by later attempts to introduce new positions inconsistent with the stated case.


It held that the Labour Court erred in selecting the exchange rate as at the contract expiry date and that the correct date for conversion is the date of payment. It also held that the Labour Court should have made an order for interest calculated with reference to each monthly salary due date (on a prescribed-rate basis), and that the Labour Court erred in making no costs order in a civil claim where the parties had agreed that costs follow the result.


LEGAL PRINCIPLES


Prescription under section 12(1) of the Prescription Act 68 of 1969 begins to run when the debt is due, meaning when it is immediately claimable and enforceable and the creditor has a complete cause of action capable of being pursued without a complete defence to immediate payment.


A claim for contractual damages for future performance following repudiation is premised, on ordinary contract principles, on the innocent party having accepted the repudiation and having communicated an election to cancel the contract; absent that election (on the facts as presented), a court will not assume an accelerated damages claim as the basis for determining prescription.


Where parties submit a dispute for decision by way of a stated case, they are bound by the agreed formulation, and the court is correspondingly constrained to determine the questions posed on that agreed factual and legal basis; a party cannot subsequently seek to travel beyond the stated case in order to improve or alter its position.


For unpaid periodic remuneration, mora interest is to be computed with reference to the due date of each periodic payment, running to the date of payment, and where the calculation is not before the court, an order may permissibly set the basis of calculation and provide a practical mechanism for resolving disputes about the quantified interest.


For foreign-currency awards requiring conversion, the applicable exchange rate, on the authority cited, is the rate prevailing on the date of payment, not an earlier historical date such as the date of breach or contract expiry.


In relation to costs, the judgment applied the principle that, in civil claims (as distinct from proceedings under the Labour Relations Act costs regime), costs ordinarily follow the result, particularly where the parties have agreed that they should do so and where the successful party has been put to additional expense to enforce payment.

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[2020] ZALAC 47
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South African Tourism v Monare (JA76/2019) [2020] ZALAC 47; (2021) 42 ILJ 125 (LAC) ; [2021] 4 BLLR 386 (LAC) (27 August 2020)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA76/2019
In the matter between:
SOUTH AFRICAN
TOURISM

Appellant
and
TEBOGO BRIAN
MONARE

Respondent
Heard: 27 AUGUST 2020
Delivered:
Deemed to be date the
judgment is emailed to the parties
.
CORAM:
Coppin JA, Kathree-Setiloane and Murphy AJJA
JUDGMENT
COPPIN JA
[1]
This is an appeal and cross-appeal against an order of the Labour
Court (Thlothlalemaje
J) (‘the court a quo’). Leave to
appeal having been granted by that Court. The appellant was the
respondent and the
respondent in this court was the applicant in that
court. The late filing of the appellant’s notice of appeal and
power of
attorney in this appeal was condoned.
[2]
The order of the court a quo made on 2 May 2019 reads as follows:

1. The special
plea of prescription as raised by the respondent is dismissed.
2.
The respondent is ordered to pay to the
applicant, an amount of R87529-     53, together
with interest thereon
at the rate of 9.75%
per annum
calculated
from 11 January 2016 to the date of payment.
3.
The respondent is ordered to pay to the applicant, an amount of
£257550.42 for damages suffered in respect of salaries
for the
period 1 October 2010 until 31 January 2015.
4.
The amount mentioned in (3) above for the purposes of conversion from
Rand/British Pound Sterling shall be at the exchange rate
applicable
at 31 January 2015, together with interest at the rate applicable as
at that date, and from the date on which payment
fell due until the
date of final payment.
5.
There is no order as to costs.”
[3]
The appeal essentially relates to the court a quo’s dismissal,
with costs, of
a special plea of prescription raised by the appellant
as defence against a claim of the respondent for the payment of
arrear salaries,
and the consequent order made in favour of the
respondent in that regard for payment in an amount of £ 257
550– 42
and interest. The respondent is cross-appealing the
order insofar as: (a) it directed that the exchange rate applicable
was that
as at 31 January 2015 (i.e. instead of the date of payment);
(b) it omitted to deal with the
mora
interest that was
payable; and (c) did not mulct the respondent with the costs.
[4]
The respondent abandoned the relief in paragraph 2 of the order,
which was apparently
made in error by the court a quo in the
following circumstances:
4.1 The claim for
the payment of R87 529-53 was included in the respondent’s
statement of claim as originally formulated and
represented the
amount which he had been short paid in respect of back-pay by the
appellant.
4.2   In
its response to the claim the appellant admitted liability for that
short payment and undertook to pay the amount
to the respondent by 28
February 2018.
4.3
When that payment was not made as promised the respondent brought an
application under the same case number
in which he, inter-alia,
sought an order that the respondent pay that amount with interest and
costs of the application on the
scale as between attorney and own
client.
4.4
Before the matter was finalised the appellant paid the respondent the
said amount plus interest, which meant
that the court a quo was not
supposed to order payment of those amounts, but merely decide on the
question of the costs.
4.5
That aspect forms part of the respondent’s cross-appeal against
the cost order made
by the court a quo.
[5]
Hence, the issues in this appeal, broadly stated, are the following:
(1) Whether the
court a quo was correct in finding that the
respondent’s claim for arrear salaries had not prescribed in
terms of the Prescription
Act
[1]
,
and consequently in granting the order for the payment of amount of
£247,550-42 in respect of arrear salaries; (2) whether
the
court a quo was correct in not making an order in respect of the
interest payable on the salaries, and what order should have
been
made in that regard; (3) whether the court a quo was correct in
ordering that the exchange rate that applied was the one as
at 31
January 2015; and (4) whether the court a quo erred in respect of the
costs order it made.
[6]
Each of those issues will be dealt with in turn after relating the
essential background
and chronology.
Common
chronology/background facts
[7]
The appellant entered into a fixed term contract of employment with
the respondent
on about 23 December 2009. The period of employment
was to commence on 1 February 2010 and terminate on 31 January 2015.
The parties
agreed in the stated case that the respondent was to
receive a gross remuneration package of £5674 .23 at the end of
every
month for the duration of his contractual period.
[8]
On 30 September 2010 the appellant dismissed the respondent from its
employ following
a disciplinary hearing. In response the appellant
referred an unfair dismissal dispute to the Commission for
Conciliation Mediation
and Arbitration (“CCMA”) on 17
November 2010 in terms of the Labour Relations Act
[2]
(“LRA”).
In an arbitration award dated 31 August 2011 the Commissioner found,
essentially, that the respondent’s
dismissal was substantively
unfair and directed the appellant to reinstate the respondent
retrospectively, i.e. as from 23 February
2011; and to pay him back
pay from that date in the total amount of £37,509.54 within
thirty days of the award, but by no
later than 23 September 2011. The
reinstatement was to be effected by no later than 13 September 2011.
[9]
In a letter dated 7 September 2011 the respondent’s attorneys
requested the
appellant’s attorneys to advise where the
respondent should report for duty on 13 September 2011. In a written
response the
appellant’s attorneys advised that the appellant
was not going to reinstate the respondent, or pay him any amount
stated
in the award and that it intended to review the award. An
application for review was indeed brought in the Labour Court by the
appellant on 13 October 2011, and on 31 March 2014 the Labour Court
(per Van Niekerk J) ordered that the arbitration award be reviewed

and set aside on the basis that the CCMA lacked jurisdiction to
entertain the dispute.
[10]
The respondent appealed to this court against the Labour Court’s
judgement. On 11 November
2015 this court upheld the appeal, having
found that the CCMA had the requisite jurisdiction, and dismissed the
review application.
By then the fixed term contract had already
expired on 31 January 2015, and the appellant did not reinstate the
respondent.
[11]
About a year after this court’s judgment, on 18 November 2016,
the respondent served his
statement of claim in this matter on the
appellant. The appellant delivered a response in which it,
inter-alia, raised the special
plea of prescription. The respondent
replicated, and after the parties had signed the pre-trial minutes
the matter was set down
for trial. At the outset of the trial the
parties agreed that the dispute was about prescription and that it
had to be determined
by way of a stated case, which was duly
formulated and placed before the court a quo.
[12]
In terms of the stated case, which is signed by their respective
attorneys and dated 5 February
2018, the appellant, inter-alia,
conceded that the termination of the applicant’s fixed term
contract had been unlawful,
and that his dismissal was accordingly
unlawful. Under the heading “Question of law to be determined”
the parties agreed
in their stated case as follows:

5.1.  In the
premises, the above Honourable Court is requested to adjudicate on
the question of whether the applicant’s
claim in respect of
prayer 3 has prescribed and without limiting the generality of the
aforegoing, whether-
5.1.1. the applicant’s
cause of action arose on 30 September 2010;
5.1.2.  the award of
reinstatement referred to above was suspended during the time period
between the Labour Court judgment
being handed down on 31 March 2014
and the Labour Appeal Court judgment being handed down on 11 November
2015; and
5.1.3. whether
prescription in respect of the contractual claim was interrupted for
this period by virtue of the said suspension.
The parties agree
that costs should follow the cause. “
[13]
Early in April 2018, allegedly after considering the heads and
supplementary heads of argument
of both parties, the appellant sought
to file a “rejoinder” and to “amend” its case
to allege, in effect,
that in light of the respondents contention in
his heads, namely, that his claim for salaries arose on a monthly
basis on the date
that each salary payment fell due, a substantial
portion of the respondent’s claim would have prescribed. The
respondent
refused to agree to such amendment, essentially contending
that the appellant was bound by what was agreed to in the stated
case.
The appellant then seemingly changed tack and filed
supplementary heads in which those points were raised. It sought to
justify
such filing claiming that the respondent had raised issues in
his heads that were not consistent with the stated case. Ultimately

the court a quo decided the matter on the basis of what was agreed in
the stated case.
[14]
On 2 May 2019 the court a quo handed down its judgment and order. By
written notice dated 21
May 2019 the respondent abandoned the relief
granted to him in terms of paragraph 2 of the order, namely the order
that the appellant
pay him an amount of R87,529.83 together with
interest on that amount. On 24 May 2019 the appellant brought an
application for
leave to appeal in the court a quo, and on 5 July
2019 the court a quo granted the appellant leave to appeal to this
court. The
appellant filed its notice of appeal on 21 August 2019 and
the respondent delivered is notice of cross-appeal shortly
thereafter.
All non-compliance with prescribed time periods were
condoned.
Prescription issue
[15]
In his statement of claim the respondent had alleged that as a result
of the appellant’s
unlawful termination of his fixed term
contract and material breach thereof he has suffered damages in the
amount of £257
550.42, which is made up of his salary of
£5674.23 per month over 52 months (i.e. £295 059.96) less
an amount received
in respect of backpay in terms of the arbitration
award (i.e. £37 509.54). The respondent also alleged that he
was entitled
to interest at the rate of 15.5% per annum calculated
from the date on which payment of each monthly salary for the period
1 October
2010 to 31 January 2015 fell due, until date of payment.
[16]
In the stated case the parties were agreed, inter-alia, that in terms
of his employment contract
with the appellant the respondent was
entitled to a gross remuneration package of £5674.23 per month
payable at the end of
every month. The respondent contended there
that he was entitled to be paid a salary at the end of every month
for the period 1
October 2010 until 31 January 2015. Ironically,
although it had by then already paid the respondent in terms of the
award in respect
of backpay (albeit short) and had undertaken to pay
him the balance by a set date, the appellant contended that the
respondent’s
claim for arrear salaries had prescribed because
his cause of action for such salaries arose on 30 September 2010,
when he was
dismissed, and more than three years had elapsed by the
time the respondent had served his statement of claim on the
appellant
on 18 February 2016.
[17]    The
respondent’s contentions, in the court a quo and in this court,
were essentially the following.
That even though his claim was
formulated as a damages claim for salaries that became payable to him
pursuant to the appellant’s
contractual obligation to pay such
salaries following its repudiation of the contract, it was in actual
fact a claim for specific
performance which may include an order to
perform a specified act or to pay money in pursuance of a contractual
obligation. The
respondent had no accelerated claim for arrear
salaries until all of the salaries fell due, which was only upon the
termination
of the contract at the expiry thereof. The respondent
submitted that it was not open to the appellant to contend that the
respondent’s
claim arose on any date other than 30 September
2010.
[18]
The respondent contended further that if it was a claim for damages
following cancellation of
the contract (i.e. after acceptance of the
repudiation of the contract by the appellant) prescription would only
have commenced
to run on the date when the repudiation was accepted
by the respondent and when the decision to cancel the contract was
communicated
to the respondent. Since it was not part of the stated
case that the respondent accepted the repudiation, cancelled the
contract
and communicated the election to cancel the contract, i.e.
prior to the service of the statement of claim on the appellant, the

appellant could not succeed with its defence of prescription.
[19]
According to the respondent, in our law as
it stands, a debt only becomes due when it is immediately
claimable
and recoverable
[3]
; his claim
for arrear salaries had arisen and fell due as and when the monthly
salaries became due and payable; he only acquired
a complete cause of
action in respect of all the salaries (i.e. for the period after he
was supposed to be reinstated by the appellant),
and that would have
been due, owing and payable in terms of the contract, at the expiry
of the contract.
[20]
The court a quo essentially held that the appellant did not prove
that prescription began to
run before this court’s judgement on
11 November 2015. According to the court a quo there was no full
cause of action prior
to that date and prescription only started to
run from the date a new cause of action arose. It referred to a
statement by Froneman
J in
Myathaza
v Johannesburg Metropolitan Bus Services (SOC) Ltd t/a Metrobus and
Others
[4]
(“Myathaza”)
namely
that: “the manifest injustice of depriving the applicant of the
arbitration award in his favour by first avoiding its
implementation
by way of instituting proceedings and then crying prescription of the
back of the time wasted by the review can
be met by the application
of the principle that prescription should not run until proceedings
are finalised.”
[21]
The court a quo further stated:

[43]
In light of a conclusion being reached that the applicant’s
claim in respect of arrear salary was contractual
in nature, and only
commenced to run from the date of the judgement of the Labour Appeal
Court, it is also accepted in line with
exceptions pointed out by
Zondo J in
Hendor
that an employer cannot be liable for
payment of remuneration to an employee for a period when that
employee would no longer have
been in its employment for any reason
including, inter-alia, death or taking retirement.
[44]
In this case, it is accepted that the applicant had tendered his
services, which tender was rejected
on 12 September 2010 as the
respondent sought a review of that arbitration award.  The
respondent’s review application
was successful with the
judgement of Van Niekerk J on 31 March 2014. Effectively, the
arbitration award was in operation from 31
August 2011 – 31
March 2014. When the Labour Appeal Court delivered its judgement on
11 November 2015, the arbitration award
was revived in full, but only
to the extent that or until the fixed term contract was in place,
being 31 January 2015. It follows
that any remuneration due to the
applicant could only have been for the exact duration and remainder
of the fixed term contract.”
[22]
The court a quo found that
clause 2 of the respondent’s fixed term contract made provision
for the payment of an annual salary
and that, in line with the common
cause facts as recorded in the stated case, the respondent was
entitled to a globular payment
of salaries owed to him in terms of
the fixed term contract for the period 1 October 2010 to 31 January
2015
.
[23]
It was submitted on behalf of the appellant that the court a quo
erred in finding that the respondent’s
claim could not have
arisen on the date of his dismissal (i.e. 30 September 2010), since
it reasoned that before this court’s
decision on 11 November
2015, there was no full cause of action. It was contended further
that the respondent’s claim is
a common law claim for damages
for breach of contract arising from the unlawful termination of his
employment contract; and that
it was significant that the respondent
claimed the full payment of benefits for the remaining period of the
contract of employment,
after the unlawful termination of the
contract, as a globular amount. According to the appellant, once it
had repudiated the contract,
the respondent did not have to wait for
anything more to occur before bringing such a claim.
[24]
The fallacy in the appellant’s argument is apparent. It took it
upon itself to characterise
the respondent’s claim and
confidently committed to a stated case.  Unfortunately, it
mischaracterised the claim.
[25]
In our law of contract the respondent could only have had a claim for
the future payments, he
would have been entitled to under the
contract, in circumstances where the appellant had repudiated the
contract and the respondent
had accepted such repudiation
[5]
and had communicated his decision to cancel the contract to the
appellant
[6]
. But that is not
what happened in this instance. Even though the appellant, by
unlawfully terminating the contract, effectively
repudiated it on 30
September 2010, the appellant did not on that occasion accept that
repudiation and communicate his decision
to cancel the contract to
the appellant. Instead, the respondent contested the termination and
took steps to obtain reinstatement.
He, effectively, sought to revive
and enforce the contract, rather than cancel it.
[26]
The claim pursued by the respondent in the court a quo was indeed a
different one from the one
perceived by the appellant. It came about
because the appellant resolutely refused to comply with the award and
the contractual
period had expired by the time the respondent was
vindicated by this court. In terms of the award the respondent had to
be reinstated
by the appellant from 13 September 2011. But the
respondent refused to implement the award just after it was made, and
avoided
it by instituting the review proceedings. Even though it was
successful on a technicality in reviewing the award in the Labour
Court, that order was suspended when the respondent appealed against
it and the order was eventually set aside on appeal by this
court on
11 November 2015. The effect of the order of this court was to revive
the award
[7]
. The appellant used
the expiry of the contract as an excuse for not reinstating the
appellant. If the appellant had been reinstated
he would, in terms of
his claim, been entitled to the payment of a salary, as and when such
payment fell due in terms of the contract.
The failure to give effect
to the award while the contract period had not expired, was due to
the appellant’s conduct. Such
a claim could not have arisen on
30 September 2010.
[27]
The respondent’s claim in the court a quo, even though as a
globular amount for salaries
that he had not been paid (i.e. had the
order of reinstatement been given effect to timeously), was not the
same as a claim that
he would have had at the time of his unfair and
unlawful dismissal, if he had accepted that repudiation, and had
elected to cancel
the contract and had communicated his decision to
the appellant.
[28]
At worst, the respondent’s claim in the court a quo would have
arisen when the appellant
first refused to implement the award,
although I do not find that. As pointed out in the dictum of Froneman
J in
Myathaza
quoted above, it is iniquitous for the appellant
to deprive the respondent of the benefits of the award, having
avoided its implementation
by instituting review proceedings and, and
notwithstanding the dilatory effect of those proceedings (and the
accompanying time
wasting) on the effective enforcement of the award,
to then raise prescription as a defence, when the respondent was
vindicated
in his quest for justice. The appellant’s
contention, in effect, that those review proceedings and time
wasting, had no effect
whatsoever on the commencement or running of
prescription, cannot be correct.
[29]
Any common law claim the respondent brought for the salaries, before
obtaining an award or order
of reinstatement, could have been
resisted successfully by the appellant contending that it had fairly
dismissed him. The respondent
would thus have been obliged to refer
an unfair dismissal dispute to the CCMA, since the High Court is not
the statutory arbiter
of the fairness of dismissals and has no
jurisdiction in that regard. Even after obtaining the award he would
not practically have
been able to enforce it before finalisation of
the review proceedings. Even though a review, as provided in section
145(7) of the
LRA, did not suspend the award, the fact that it had
been brought and was not finalised would have served as an effective
defence
against enforcement of the award. It is only after
finalisation of the review proceedings in this court on 11 November
2015 that
the respondent would have been able to enforce his claim
for reinstatement, alternatively for cancellation or damages, without
further obstacle and it is only then that prescription could have
commenced to run.
[30]
Prescription only commences to run when a debt is due and payable and
not when it arises. In
Deloitte
Haskin & Sells Consultants
[8]
the Appellate Division explained the meaning of section 12(1) of the
Prescription Act which provides that “prescription shall

commence to run as soon as the debt is due”. It held: “this
means that there has to be a debt immediately claimable
by the
creditor or, stated in another way, that there has to be a debt in
respect of which the debtor is under an obligation to
perform
immediately… It follows that prescription cannot run  “against
a creditor before his cause of action
is fully accrued, i.e. before
he is able to pursue his claim.” (Footnotes omitted)
[31]
The creditor’s cause of action would be complete if it is able
to claim forthwith and the
debtor does not have a defence to the
claim for immediate payment, or if the cause of action is
completed
[9]
(at least by the
time the summons, or statement of claim, is served). Thus, the fact
that the respondent’s claim in this
case may have arisen before
11 November 2015 (which I do not find) does not mean that there was a
complete cause of action for
the recovery of the debt (i.e. arrear
salaries) by then.
[32]
In any event, it was for the appellant to prove when prescription
began to run in respect of
the debt (properly characterised) claimed
by the respondent in the court a quo
[10]
.
It clearly did not begin to run on 30 September 2010.
[33]
As a party to the stated case in the court a quo, the appellant did
not have a right to travel
outside it. The court a quo was also
constrained to confine itself to the agreed stated case and only
decide the question that
the parties had agreed to submit to it for a
decision in terms of that stated case
[11]
.
[34]
The appellant was bound to what it had agreed was to be decided in
the stated case. As it contended
there that the respondent’s
claim arose on 30 September 2010; that prescription commenced running
then; and that three years
had elapsed by the time the claim was
brought - that is the case that it had to prove. It could not amend
the stated case by filing
a “rejoinder”. In any event,
its justification for filing the “rejoinder”, namely,
that it was not certain
of the appellant’s case, is also not
sustainable, because, if that was so, instead of agreeing to the
stated case, the appellant
could have excepted to the respondent’s
statement of claim.
[35]
The appellant accordingly failed to prove its defence of prescription
and the court a quo rightly
dismissed its special plea of
prescription.
[36]
I now turn to consider the issues raised in the cross-appeal.
Interest payable on
the salaries
[37]
The court a quo made no order in respect of the interest payable on
the salaries claimed by the
respondent. It was submitted on behalf of
the respondent that once it is accepted that the amount claimed is
made up of salaries
for the period, from when the reinstatement had
to be given effect to up to the date of the expiry of the fixed term
contract (i.e.
from 23 February 2011 to 31 January 2015), it follows
that interest should be payable from the date on which payment of
each of
the salary payments fell due, until the date of final
payment. Further, that it is accepted that mora interest should be
calculated
at the prescribed legal rate.
[38]
On the other hand, it was submitted on
behalf of the appellant that if this court were to affirm the
damages
award, it had no objection to the approach of Zondo J (as he then
was) in
Hendor
[12]
being
applied in respect of the calculation of the interest.
[39]
Dealing with the facts in that case, Zondo J held that since the
employees there were paid weekly,
their wages became due at the end
of each week and that the employee was, thus, entitled to insist
that, in respect of each weekly
wage, interest should be calculated
from the date when the payment of the wage became due to the date of
payment. Since a calculation
of the interest had not been placed
before the court in that matter, Zondo J was of the view that it was
sufficient for the court
simply to order that each employee be paid
his or her weekly wages plus interest, calculated at the applicable
rate, from the date
each weekly wage became due to the date of
payment, and further, that if the parties were unable to agree on the
amounts to be
paid when the interest was added, they were to consider
agreeing on a third party making a binding calculation, and if that
option
failed, then either party could refer the issue  to the
Labour Court for determination. The approach is practical and
appropriate.
[40]
In this matter the respondent was paid on a monthly basis. He could
therefore insist that in
respect of each monthly salary, for the
period 1 October 2010 to 31 January 2015, interest should be
calculated as and when the
monthly salary became due. Further, since
the calculation had not been placed before us, it is appropriate to
adopt the approach
of Zondo J in
Hendor.
The date of the
exchange rate
[41]
The appellant rightly conceded that the court a quo erred in ordering
that the applicable rate
was the exchange rate as on 31 January 2015,
which is the date when the fixed term contract expired. According to
case authority
the applicable date is the date of payment
[13]
.
The costs order of the
court a quo
[42]
This court may interfere with the decision on costs if it is
satisfied that the court a quo did
not exercise its discretion
judicially in that regard. This includes instances where the Labour
Court had based its decision on
an erroneous view of the facts, or
the law, or where it failed to take into account relevant facts
[14]
.
[43]
While it is so that in matters brought in terms of the LRA the award
of costs does not necessarily
follow the result, and is based on an
assessment of all the relevant facts, the law and fairness, that is
not the position with
civil claims not brought in terms of the LRA.
The general rule in such matters is that the costs ordinarily follow
the result
[15]
.
[44]
The court a quo seems to have taken for granted that to make no order
for costs was appropriate
and appears not to have taken into account
the following: That the claim was in fact a civil claim; that the
parties had agreed
in terms of the stated case that the costs would
follow the result; and that the respondent was obliged to bring a
further application
to enforce payment of the amount he was short
paid. Taking into account all the relevant facts and circumstances in
this matter
the appropriate order ought to have been for the
appellant to pay the costs.
Costs of the appeal
and cross appeal
[45]
In respect of the costs of both, the appeal and cross appeal - there
is no reason why the costs
should not follow the result and include
the costs of two counsel.  The employment of two counsel was
justified.
Order
[46]
In the result, the following order is made:
1. The appeal is
dismissed;
2. The cross-appeal is
upheld;
3. The order of the court
a quo is amended to read:

1. The special
plea of prescription is dismissed;
2. 2.1. The
respondent is ordered to pay the applicant an amount of £257 550.42
as damages in respect of unpaid salaries
for the period 1 October
2010 until 31 January 2015;
.
2.2. The amount mentioned in (2.1) for the purposes of conversion
from Rand/British Pound Sterling shall be
at the exchange rate
applicable at the date of payment; and
2.3 Interest on the
amount mentioned in (2.1) shall be paid, at the prescribed legal rate
applicable from time to time, from the
date on which each salary, for
the period 23 September 2011 to 31 January 2015, fell due to date of
its final payment.
2.3.1   In the
event of the parties failing to agree on the amount(s) to be paid as
interest, they should endeavour to
agree to a third party finally
fixing the amount(s), alternatively, if no such agreement is reached,
either party may approach
the Labour Court for a determination of the
amount(s).
3. The respondent is to
pay the costs, including the costs of the application brought for the
payment of the amount short paid.”
3. The appellant is to
pay the costs of the appeal and the cross-appeal.
___________________________
P Coppin
Judge of the Labour
Appeal Court
Kathree-Setiloane and
Murphy AJJA concur in the judgment of Coppin JA.
APPEARANCES:
FOR THE
APPELLANT:
Mr A Mosam and
Mr A Pantazis
Instructed by Cliffe
Dekker Hofmeyr
FOR THE
RESPONDENTS:          Mr
R Grundlingh
Instructed by Bester
Rhoodie attorneys
[1]
The
Prescription Act, 68 of 1969
.
[2]
Act 66 of 1995.
[3]
Makate
v Vodacom (Pty) Ltd
2016
(4) SA 121
(CC) para 188.
[4]
(2017)
38 ILJ 527 (CC) para 67.
[5]
HMBMP
Properties (Pty) Ltd v King
1981 (1) Sa 906
(N) at 908G and
Swart
v Vosloo
1965 (1) SA 100
(A) at 105 G.
[6]
Standard
Bank of South Africa Ltd v Miracle Investments 67 (Pty) Ltd and
Another
2017 (!) SA 185 (SCA) paras 20 and 26.
[7]
See,
inter alia,
Coca
Cola Sabco (Pty) Limited v Van Wyk
(2015) 36 ILJ 2013 (LAC) paras 16, 20, 24 and 30.
[8]
Deloitte
Haskin & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman
Deutsch (Pty) Ltd
[1990] ZASCA 136
;
1991
(1) SA 525
(A) at 532H – I.
[9]
Truter
& Another v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA) para 15.
[10]
Van
Deventer v Ivory Sun Trading 77 (Pty) Ltd
2015 (3) SA 532
(SCA) para 19;
Makate
v Vodacom (Pty) Ltd
2016 (4) SA 121
(CC) para 185.
[11]
Mtokonya
v Minister of Police
2018 (5) SA 22
(CC) paras 15-16.
[12]
National
Union of Metalworkers of South Africa obo Fohlisa and Others v
Hendor Mining Supplies (A Division of Marschalk Beleggings
(Pty)
Ltd)
(2017) 38 ILJ 1560 (CC) paras 200-201.
[13]
Sta
ndard
Chartered Bank of Canada v Nedperm Bank Ltd
[1994] ZASCA 146
;
1994
(4) Sa 747
(A) at 777C-D;
Radell
v Multilateral Motor Vehicle Accidents Fund
1995 (4) SA 24
(A) at 29H-30B.
[14]
Ncanana
and Another v Dual Products International (SA) CC and Others
[2019] 11 BLLR 1238
(LAC) para 16.
[15]
Stokwe
v Member of the Executive Council: Department of Education, Eastern
Cape & Others
(2019) 40 ILJ 773:
[2019] 6 BLLR 524
(CC) (7 February2019) para 89:
Biase
v Mianzo Asset Management (Pty) Ltd
(2019)
40 ILJ 1987 (LAC) para 48.