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[2021] ZALAC 43
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Minister of Defence and Military Veterans and Others v Public Servants Association obo Members (JA31/2020) [2021] ZALAC 43; [2022] 3 BLLR 280 (LAC); (2022) 43 ILJ 633 (LAC) (3 November 2021)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA 31/2020
In the matter between:
MINISTER OF DEFENCE
AND MILITARY VETERANS First
Appellant
DEPARTMENT
OF
DEFENCE
Second
Appellant
SECRETARY FOR
DEFENCE Third
Appellant
MINISTER OF PUBLIC
SERVICE AND ADMINISTRATION Fourth
Appellant
DEPARTMENT OF PUBLIC
SERVICE AND ADMINISTRATION Fifth
Appellant
And
PUBLIC
SERVANTS’ ASSOCIATION obo
MEMBERS
Respondent
Heard:
9
September 2021
Delivered:
Deemed
to be on 3 November 2021
Coram:
Davis,
C Musi et Coppin JJA
JUDGMENT
COPPIN JA
[1] This
appeal is against the orders of the Labour Court (Mabaso AJ) in terms
of which it partly dismissed the
appellant’s special plea of
prescription and condoned the respondent’s failure to comply
with section 3 of the Institution
of Legal Proceedings Against
Certain Organs of State Act
[1]
(“ILPA”). Leave to appeal to this Court was granted by
the court
a
quo
.
There is no cross-appeal.
[2] The
prominent issue in this matter is, essentially, whether the court
a
quo
was correct in granting the said condonation even if it was only in
respect of those “claims” that it found had not
prescribed, being those that “arose” after October 2011.
As part of the condonation aspect, the question arose to considered
whether the debts that were being claimed by the respondents had been
extinguished by prescription, as envisaged in the Prescription
Act
[2]
.
[3] The
Public Servants Association (“PSA”), acting on behalf of
certain of its members, listed in
annexure “A” to its
statement of case (and who, together, are referred to as “the
respondents“) instituted
a claim against the appellants for
declaratory orders and relief consequential thereto, including
damages, allegedly made up of
overall differences in salaries and
pension benefits due from about 1998 until after the date of the
delivery of the statement
of claim on 24 October 2016. The claim is
based on alternative causes of action, the main one being alleged
breach of contract,
and the immediate alternatives, alleged
misrepresentation (fraudulent, alternatively, negligent) and further
alternative, delictual
(for alleged pure economic loss).
[4] In
response to the claim, the appellants raised two special pleas,
namely, firstly, the failure by the respondents
to comply with
section 3 of the ILPA, which provides, in essence, that no legal
proceedings for the recovery of a debt may be instituted
against an
organ of state unless a notice, as prescribed in that section, had
been given to the organ of state within six months
from the date the
debt became due
[3]
, and
secondly, a plea of prescription, more particularly, alleging that
the entire debt that the respondents were claiming had
been
extinguished by prescription as contemplated in the Prescription Act.
[5] It
is not disputed, at least for purposes of adjudication of the said
special pleas, that the respondent members
of the PSA, who were
previously part of the South African Defence Force and who occupied,
essentially, accounting, financial, or
administrative positions, had
agreed, in terms of individual written contracts entered into with
the Department of Defence in about
November 1998, to be
demilitarised, and effectively, to become members of the Public
Service.
[6] In
their claim the respondents essentially allege that they were induced
to enter into the demilitarisation
contracts by,
inter alia
,
representations made by the appellants, or more particularly,
individuals in the National Defence Department, that if they were
demilitarised they would “not be in a worse off position with
regard to their monthly salaries and pension benefits”
than if
they remained in the Defence Force (i.e. militarised). They further
allege,
inter-alia
, that the representations were false,
because soon after they had entered into the demilitarisation
contracts, it became apparent
that they were indeed going to be
worse-off in respect of salaries and pension benefits in the Public
Service.
The
Labour Court
[7] Instead
of considering the failure to comply with the ILPA and the
condonation aspect first and then determining
the issue of
prescription as an adjunct to that exercise, as section 3 of the ILPA
seems to dictate, the court
a quo
determined the prescription
aspect first, and then considered the condonation aspect only in
respect of the part of the claim which
it held had not prescribed.
[8] Accordingly,
the court
a quo
, having decided that only the debts up to
October 2011 had prescribed, went on to consider the condonation
aspect only in relation
to the part(s) of the “claim”,
that it concluded had arisen after October 2011, and granted
condonation in respect
of those, reasoning that “condonation
for the period prior to October 2011 is not necessary.”
[9] Viewed
superficially this unconventional approach does not seem to matter,
but closely analysed, it does indeed
have a material impact on the
proper approach to and outcome of the condonation enquiry required in
terms of section 3 of the ILPA.
[10] It
is not in issue that the respondents did not give any notice as
contemplated in section 3 of the ILPA to
any of the appellants in
respect of any “debt” that they were claiming. It was
also not disputed that the claims of
the respondents are“debts”
as defined in section 1 of the ILPA .
[11] The
court a quo dealt with the condonation aspect for the part of the
claim for the period following October
2014 in one paragraph, and
more particularly, as follows: “the [respondents] contend that
following the demilitarisation,
the formal grievances were launched,
and as late as November 2014 there continued to be indications that
the State were attending
to their concerns in respect of the pension
funds however without the resolution. In a condonation application a
court has to take
into account the interest of justice. Section
3(4)(a) of the ILPA provides that this court may grant condonation if
good cause
exists for the failure and the organ of state was not
unreasonably prejudiced by the failure. Based on the reasons provided
for
the non- compliance with the provisions of section 3 notice and
that the parties were engaging each other and that before me there
is
no suggestions that the State was unreasonably prejudiced by the
failure to comply with the provisions of section 3. I have
considered
the facts of this case and the explanation provided for the delay and
[I] am of the view that it would not be in the
interest of justice if
condonation is not granted for the period that I have mentioned
above, October 2011 onwards.” Significantly,
the court
a quo
did not mention other aspects of the concept “good cause”,
such as, for example, prospects of success.
[12] Having
reasoned thus the court
a quo
went on to make the following
order: “1. The special plea of prescription, relating to the
plaintiff before the period of
October 2011 is upheld; 2. The special
plea of prescription, relating to claims after October 2011 is
dismissed; 3. The [respondents]
failure to comply with section 3 of
the [ILPA] is condoned; 4. There is no order as to costs.”
Submissions
[13] On
appeal, the appellants argued, essentially, that while the court
a
quo
was wrong in not finding that the entire claim (i.e. before
and after October 2011) effectively for damages had prescribed, and
had also erred in condoning the respondents’ failure to comply
with section 3 of the ILPA. Appellants submitted that this
was not
only because the claim had prescribed, but also because no good cause
had been shown for the respondents’ failure
to comply with the
section and because the appellants were indeed unreasonably
prejudiced by that failure.
[14] The
respondents, on the other hand, support the court
a quo
’s
judgment on the prescription issue and argue, essentially, that the
grant of condonation was justified in light of the
explanation they
gave for their failure to comply and, according to them, because of
the absence of any prejudice on the part of
the appellants and their
good prospects of success.
Discussion
[15] The
structure of section 3(4) of the ILPA appears to dictate the approach
that has to be adopted in considering
the order of the special pleas.
The section provides as follows: “(a) If an organ of state
relies on a creditor’s failure
to serve a notice in terms of
subsection (2)(a), the creditor may apply to a court having
jurisdiction for condonation of such
failure. (b) The court may grant
an application referred to in paragraph (a) if it is satisfied that –
(i) the debt has not
been extinguished by prescription; (ii) good
cause exists for the failure by the creditor; and (iii) the organ of
state was not
unreasonably prejudiced by the failure. (c) If an
application is granted in terms of paragraph (b), the court may grant
leave to
institute the legal proceedings in question, on such
conditions regarding notice to the organ of state as the court may
deem appropriate.”
[16] Thus,
in the process of determining whether to grant condonation the court
would have to determine whether
the debt that is being claimed has
not been extinguished by prescription as contemplated in the
Prescription Act.
[17] It
has been held with reference, in particular, to section 3(4)(b) of
the ILPA that its structure implies
that the court considering
condonation in the exercise of its discretion has to be satisfied
that all three the requirements listed
in subsections (i),(ii)
and(iii) are met
[4]
. The court
must therefore be satisfied not only that the debt that is being
claimed has not been extinguished by prescription,
but that good
cause also exists for the failure to serve the notice contemplated in
section 3(2) of the ILPA and that the organ
of state has not been
unreasonably prejudiced by such failure.
Prescription
[18] The
respondents, in effect, averred that the claim could not prescribe
because the “unfair labour practice”
was ongoing and
occurred on a monthly basis. The court
a
quo,
supportive of that argument, was of the view that the “ongoing
effect” supports the respondents’ “cause
of action”
only in relation to a period of three years from October 2011
onwards. This conclusion, according to the court
a
quo
,
was premised on the respondents’ reliance on the judgment of
this Court in
SABC
Ltd v CCMA
[5]
.
In its understanding, that decision “relating to ‘ongoing
effect’, confirmed that the cause of action would
be regarded
as a factor if by the time of referral the conduct was still there”,
and even though that matter was distinguishable
on the facts, in that
the issue there was about continuous discrimination allegedly
perpetrated by the SABC.
[19] Thus,
essentially, the court
a quo
, seemingly, regarded the
respondents’ cause of action as consisting of claims arising
from multiple causes of action, which
would have arisen as and when
the affected member’s salary and all pension benefits fell due.
Each of those would have prescribed,
according to the court
a quo
,
after a period of three years from the date they fell due, and the
only claims, as it were, that survived extinction by prescription
were those that arose from October 2011 onwards. That date was
adopted as a “cut-off” date, presumably, because of
the
respondents’ version that grievances had been lodged.
[20] According
to the appellants, the court
a quo
erred in its approach and
conclusion, because there was only one cause of action and,
effectively, only one debt that was being
claimed, for the entire
period, namely, damages; that the debt became due immediately after
demilitarisation commenced on 1 November
1998 and particularly in
December 1998, when it became apparent that the members were
“worse-off”, as found by the
court
a quo
; and that
the entire debt, accordingly, prescribed three years later, so that
by the time the statement of claim was issued, the
entire debt had
long been extinguished by prescription.
[21] It
bears mentioning that the Prescription Act refers to a “debt”
principally because it views
prescription from the perspective of the
debtor. The creditor, on the other hand, has a right of action which
it enforces by making
out a cause of action. The right of action and
cause of action are therefore corollaries of the debt. They arise
simultaneously
and are simultaneously extinguished.
[22] The
breach of a right might, according to the substantive law, give rise
to a single or multiple causes of
action which may be pursued either
at once, or in the alternative, as the substantive law and logic
dictates.
[23] Procedural
law requires the creditor, not merely to claim relief, but to inform
the debtor about the precise
nature of his claim. This involves
setting out the cause of action relied upon by the creditor,
including the essential facts on
which it is based (i.e. the
facta
probanda
).
The following definition of “cause of action” by Lord
Esher MR in
Read
v Brown
[6]
has been accepted and adopted by our courts
[7]
:
“[E]very fact which it would be necessary for the plaintiff to
prove, if traversed, in order to support his right to the
judgment of
the Court. It does not comprise every piece of evidence which is
necessary to prove each fact, but every fact which
is necessary to be
proved.”
[24] In
their statement of case, delivered on 24 October 2016, the
respondents claim several forms of relief, more
particularly,
declaratory orders, namely declaring, firstly, that its members are
in a “worse-off” position, with regard
to their monthly
salaries and benefits, than what they would have been in if they were
not demilitarised; secondly, that the appellants
are in breach of a
term (alleged to be implied or tacit) of the demilitarisation
contract that their members would not be “worse-off”
after demilitarisation, alternatively, declaring that the appellants
made a fraudulent (alternatively, negligent) misrepresentation
to
that effect, that induced their members to enter into the
demilitarisation contract, further alternatively, declaring that the
appellants caused their members pure economic loss.
[25] From
the statement of case and those claims for declaratory relief, the
causes of action relied upon by the
respondents are largely
discernible, but for the one based on alleged ‘’pure
economic loss’’. Their main
cause of action is one of
breach of contract, the allegation being that the appellants breached
a term of the contract. The alternative
causes of action are
delictual
[8]
, firstly they
allege fraudulent (alternatively negligent) misrepresentation, and
further alternatively, pure economic loss (which
would at least
require proof of negligence, that is, assuming that it is what it on
the surface appears to be).
[26] In
the ensuing prayers in their statement of case the respondents claim
relief consequential to those declarators.
Firstly, in paragraph
56.3, they claim an order: “ordering [the appellants] to with
immediate effect restore the pension
benefits for each member to that
which would have applied to him or her had he or she not
demilitarised, including extension of
the compulsory retirement age
to 65 (sixty-five) instead of 60 (sixty), alternatively restoring the
extra 1 in every 4 years’
service for purposes of pension
(equating to 16% employer contribution).”
[27] Secondly,
in paragraph 56.4, they claim an order: “ordering [the
appellants] to with immediate effect
place the members on the salary
scales/notches respectively that they would have been on had they not
demilitarised, and to pay
each member the concomitant monthly salary
henceforth.” Thirdly, in paragraph 56.5 they claim an order
“ordering the
[appellants] with immediate effect to pay the
amounts as set out in annexure “C”” to the
statement of claim,
“as damages with regard to salary losses to
the members.” Fourthly, in paragraph 56.6 they seek an order
that the appellants
pay interest at the prescribed rate (presumably
on all amounts claimed) from the date of issue of the statement of
case to the
date of full and final settlement (presumably of all
monetary claims). And lastly, they seek the costs of suit.
[28] In
light of the case made out by the respondents in their statement of
case, there is merit in the appellant’s
submissions that the
court
a quo
erred in its view of “ongoing effect”,
so that it adopted an approach and conclusion, in effect, that even
though there
was a single cause of action, there were multiple claims
and only those claims before October 2011 had prescribed. It should
not
have made the distinction that it had made, but should have given
due consideration to the exact nature of the causes of action
pleaded
and to legal prescripts such as, vitally in this case, the “once
and for all” rule, which is closely allied
to the
res
judicata
principle and prescription.
[29] The
rule applies especially to delictual claims for damages
[9]
and to claims for breach of contract
[10]
arising from a single cause of action. The rule is the same in both
contexts and is aptly summarised by the Supreme Court of Appeal
in
Symington
[11]
as
follows: “This rule is based on the principle that the law
requires a party with a single cause of action to claim in one
and
the same action whatever remedies the law presents upon such cause.
Its purpose is to prevent a multiplicity of actions based
on the
single cause of action and to ensure that there is an end to
litigation.”
[30] Thus,
if a breach of contract, or delict, relied upon, causes damage, a
right of action accrues immediately
for all damages flowing from the
unlawful act, including for prospective damages. If a cause of action
for the damages has accrued
and the prescriptive period has run, the
claimant’s (or creditor’s) right of action is prescribed
and he or she is
precluded by the principles of prescription (and of
res
judicata
)
from suing for damages arising from that same cause of action, even
though the loss or losses, giving rise to the claim for damages
or
occurs, or becomes manifest, after the prescriptive period has run.
In sum, the “once and for all” rule requires
a claimant
to claim all damages (past, present and future), flowing from the
same cause of action, at once
[12]
.
[31] It
is apparent from the respondents’ statement of case that the
cause of action based on breach of contract
has been pleaded as a
single cause of action from which the claims have arisen. The
respondents rely on the single breach of a
single (alleged) implied,
alternatively, tacit term that the members of the PSA, that opted for
demilitarisation, would not be
“worse off” in that
position than those in the military.
[32] The
alternative delictual causes of action are obviously pleaded as
single causes of action. According to
the statement of case the
alleged fraudulent or negligent misrepresentation was made before the
demilitarisation contracts were
concluded. The fact that these causes
of action are singular further confirms that the main cause of
action, based on contract,
is also a singular cause of action.
Assuming the cause of action for pure economic loss is based on an
alleged misstatement, it
is, similarly, a single cause of action that
could give rise to multiple claims, including a claim for the payment
of damages.
Upon further scrutiny, the statement of case, in dealing
with the claim for pure economic loss, makes reference to the
members’
right to fair labour practices and alleges that the
condition of being “worse off”, after demilitarisation,
was unfair.
This “cause of acton” is therefore not a
quintessential delictual one for pure economic loss. The implications
of that
will be considered when dealing with prospects of success
under the “good cause” aspect.
[33] In
this instance, the damages alleged to have been suffered (i.e.
seemingly representing the difference in
salary and pension benefits
which the members of the respondent receive and which they allegedly
would have received if they remained
in the military, or ought to
have received in terms of their demilitarised contracts, i.e.with the
tacit term, they contend for,
having been imported therein) flows
from one alleged source, namely the alleged breach of that implied or
tacit contractual term.
Alternatively, it flows from an alleged
fraudulent or negligent misrepresentation to that effect which
induced the contracts, or
negligent act (resulting in their alleged
pure economic loss).
[34] Those
rights and causes of action relied upon by the respondents would have
arisen simultaneously, on the
respondents’ very version, and as
found by the court
a quo
, shortly after the signature of the
demilitarisation contracts at the end of 1998, and would have been
subject to a three year
prescriptive period. The “once and for
all” rule, which applies to all of them, required that all
claims for damages,
which had already been suffered and that which
was still to be suffered (i.e. prospective damages), to have been
claimed once and
for all in one action, albeit in the alternative,
before prescription had run. The fact that the “lesser”
payments
in salary and pension benefits for future dates were not yet
manifest and would only become so later after the prescriptive period
had run, did not make them claimable after that period.
[35] To
summarise on the prescription issue, the court
a quo
erred in
finding that only awards up to October 2011 had prescribed while the
rest remained claimable. It should have found that
the single causes
of action relied upon by the respondents had prescribed three years
after they had arisen, that is shortly after
the signature of the
demilitarisation contracts in November 1998 and that by the time the
statement of case was issued, in which
the respondents attempted to
pursue those very causes of action, they had long prescribed.
[36] Put
differently, it should have found that all the debts, that is for
damages and payments and for the performance
of other obligations,
that properly fall within the meaning of “debt” in the
Prescription Act, and that the respondents
sought to claim from the
appellants, and which flowed from the breach of contract or delict
relied upon by the respondents, had
been extinguished by
prescription. It would make no sense in those circumstances to issue
a declarators in respect of causes or
rights of action that had
already prescribed.
[37] Even
though the conclusion on the prescription issue will produce a
decisive result in respect of the broader
question of condonation,
the other aspects of the condonation are also considered below.
The
requirement of “good cause
”
[38] It
is appropriate to preface the discussion of this aspect with a
summary of the rationale for the kind of
time-barring legislation
such as the ILPA. In
Moise
[13]
the Constitutional Court found that the rationale for such
legislation had been conveniently summarised by the South African Law
Commission in paragraph 4 of its report of October 1985, and
particularly, as follows: “The circumstances under which the
State can incur liability are legion. Because of the State’s
large and fluctuating workforce and extent of its activities,
it is
impossible to investigate an incident properly long after it has
taken place… The State is obliged by law to follow
cautious
and sometimes cumbersome procedures. Government bodies operate on an
annual budget and must be notified of possible claims
as soon as
possible….The State needs time to deliberate and consider
questions of policy and the possibility of settlements….The
State acts in the public interest and not for gain… Because
public funds are involved the State must guard against unfounded
claims….The State is an attractive target for unfounded
claims.”
[14]
[39] The
phrase “good cause” is well known in our law and
practice. The need to consider whether “good
cause”
exists often arises, for example, in regard to non-compliance with
the rules of court. Relevant considerations are
now trite. They may
include the degree of non-compliance, the explanation therefor, the
prospects of success, the importance
of the matter, the convenience
of the court and avoidance of unnecessary delay in the administration
of justice. The list is not
exhaustive. It is also a matter of trite
principle that in the exercise of the court’s discretion these
factors are to be
weighed against each other. But condonation is not
a mere formality or granted merely because it is requested. The party
who seeks
condonation would have to satisfy the court that there
exists good cause for its failure to comply. The absence of a
reasonable
explanation for the delay may well be decisive of the
application, and so may a lack of, or weak prospects of success.
The extent of the
delay and its explanation (including prejudice)
[40] Shortly
after signing the contracts opting to become demilitarised, the PSA
and its affected members, on their
own version, became aware that
they would be worse off than their military colleagues and that the
representation to the contrary
was false, but they seemingly did
nothing substantive about it. Mr Arnold Dlamini, who deposed to the
affidavit in support of the
respondents’ application for
condonation,
inter-alia
, states, that the differences in
salary and other benefits started becoming apparent from 2002; and
that “over time a number
of grievances were raised”,
without being more specific about the precise date(s) when such
grievances were raised. He also
states that the appellants “have
continuously and up to recently indicated that particularly the issue
of pension benefits
was still being considered”, again without
giving specific dates or details, save for stating that “the
last indication
was about in November 2014.”
[41] Instead
of being specific, Mr Dlamini makes broad, vague statements that
create an impression, that the grievances
were pursued with
diligence, but unfortunately they fall short on detail. He, for
example, even tries to blame the respondents
dilatoriness on the fact
that the process (presumably referring to the revision of the pension
benefits) “was a cumbersome
and lengthy process, involving the
consideration of documentation stretching over a long period of
time”. He also, curiously,
mentions that it would also involve
the gathering of information from “many members (some still
serving, other retired) and
various consultations”, seemingly
underscoring the very source of the prejudice that arises when
claimants do not act promptly
in asserting their rights in bringing
claims as soon as possible after they had arisen.
[42] Under
the heading “delays/failure”, Mr Dlamini refers to
correspondence exchanged between the
respondents’ attorneys and
the appellants and more particularly to (a) a letter dated 30 March
2015 in which details of the
members and their claims are supposedly
summarised; and (b) a follow-up letter dated 4 June 2016; and (c) a
further follow-up letter,
the date of which is not stated, in which
mention was made of a “possible approach to the court”
for relief; and (d)
an email message allegedly dated 27 August 2015
addressed to the Secretary of Defence. But the copies of those
letters were however
omitted from and not attached to the affidavit.
The respondents only purported to insert them by way of a
“supplementary
affidavit” which they delivered at the
same time as their replying affidavit in the condonation application
on 5 April 2019.
Leave for the filing of the further affidavit had
never been sought or granted by the court and technically therefore
could not
have been taken into account.
[43] In
any event, with reference to those letters, Mr Dlamini states that
the appellants “clearly have known
about this matter for a
substantial period of time and are purportedly still giving attention
to particularly the pension prejudice
suffered by the members.”
He further claims that the appellants “have not and could not
have been caught by surprise
when the statement of case was served on
them.”
[44] The
explanation hardly covers the entire period, from shortly after
signature of the demilitarisation contract,
that is November or
December 1998 and lacks detail. According to the respondents, they
commenced consultation with their legal
team in respect of the
preparation of the statement of case only in November 2014, that is
about 16 years after November 1998 when
the causes of action, relied
upon by the respondents, would have arisen.
[45] More
significantly, no reason, at all, is furnished by the respondents why
a notice as contemplated in section
3 of the ILPA had not been
served, or caused to be served, on the appellants (or the State
Attorney) informing of their intention
to institute the very
proceedings in this matter in the Labour Court, and no effort was
made to even give a belated notice, despite
acquiring knowledge that
such a notice was required. The application for condonation itself
was not brought promptly after the
appellants had raised the issue of
non-compliance with section 3 of the ILPA. It was only brought at the
end of March 2017; that
is more than three months later.
[46] The
appellants deny that any, let alone a number of grievances had been
raised by the respondents concerning
their being “worse off”
in respect of salaries and pension benefits, and aver that the only
greviance that had been
raised related to former “Mkonto we
Sizwe”, or “MK” soldiers, some of whom had been
appointed in the Finance
Unit of the Defence Force, who wanted a
review of their ranks. Instead of replying to the appellants’
version by providing
specifics of the alleged grievances (i.e.
relating specifically to the issues raised in this matter regarding
salaries and pension
benefits) they raised, the respondents replied
to the appellants’ averment with a bare denial.
[47] Regarding
the issue of the pension benefits, the appellants admit endeavouring
to engage concerning that issue
even though the respondent members
had no right or entitlement to the benefits of military soldiers in
terms of the Defence Act.
Despite not being obliged to do so, the
appellants took the initiative and engaged in a process of seeking
approval for the reinstatement
of a one quarter increase of
pensionable service years for the period by which the members’
pensionable service exceeds the
period of 10 years that was forfeited
by those members who became de-militarised on 31 October 1998 and
left the Department of
Defence before reaching the age of 60, as well
as those that were still in its service who had retained the
retirement age of 60.
[48] According
to the appellants, even though that initiative was in conflict with
the rules of the Government
Employees Pension Fund, the first
appellant and the Department of Public Service and Administration
have approved the initiative
and a resolution ( No. 1 of 2018), which
regulates the reinstatement of the pension fund, was signed on 29
March 2017. The pension
fund benefit issue had thus been settled in
full. In their reply to these contentions of the appellants, the
respondents recorded
a bare denial, but then, curiously, make mention
of being advised that the relevant changes to the pension benefits
will be made
to the government pension fund rules.
[49] Contrary
to the suggestion of the respondents that the appellants could not
have been surprised by their statement
of case, the appellants aver
that they were indeed “caught by surprise when served with the
statement of case” as 18
years had elapsed since the conclusion
of the demilitarisation contracts. The appellants further state that
this delay had caused
them substantial prejudice in that in order to
refute the respondents’ claims they would be obliged to call as
witnesses
the persons who allegedly made the representations that
formed the basis of respondents claims; that there is a great
likelihood,
because of the substantial passage of time, that those
persons may no longer be alive, or traceable, and even if they were
alive
and traceable, that their memories of the details may have
faded. These possibilities cannot be gainsaid.
Prospects of the
claims
[50] I
turn briefly to the prospects of success - Contrary to the
respondents’ optimistic averments that
they have good prospects
of succeeding in proving their claims, the appellants contend that
there are none.
[51] As
pointed out earlier, the claims susceptible to prescription, that
arose from the single contractual and
delictual causes of action,
relied upon by the respondents, have prescribed. It would make no
sense to grant declaratory relief
in respect of prescribed rights of
action.
[52] In
any event, the main cause of action, relied upon by the respondents
is destructive of the alternative delictual
claims they rely upon,
and vice versa. In respect of the former the respondents seek to rely
on an (alleged) breach of an “implied
alternatively tacit term”
that “after demilitarisation… the members would not be
worse off with regard to their
terms and conditions of employment,
including remuneration and pension benefits”. And yet, in the
alternative delictual claims,
the respondents allege that very
statement to be a false representation which induced the
demilitarisation contracts.
[53] In
respect of the main claim, it is not apparent at all from the
statement of case whether the “implied”
term is alleged
to be one of law, since no detail of the law(s), in terms of which it
is supposedly implied, has been given. Presumably
as they have
pleaded the “implied” term as an alternative to the
“tacit” term, they did not intend for
them to have a
synonymous meaning
[15]
. In any
event, insofar is reliance is placed on a “tacit term”,
the enquiry will first have to be whether there is
room for importing
that term into the demilitarisation contracts of each individual
member of the respondent that has been affected.
[54] It
cannot be imported if it would be in conflict with the express
provisions in those contacts nor can it
be imported in respect of
matters to which the parties have clearly applied their minds and in
respect of which express provision
had been made for in the contract.
Courts are slow to imply terms; that is to import tacit terms into an
express contract, which
are not found in the contract, “where
in the printed conditions the whole subject is dealt with in the
greatest detail; and
where the condition…asked [to be implied]
is one of the very greatest importance on a matter which could not
have been absent
from the minds of the parties at the time when the
agreement was made.”
[16]
It is also a requirement that a term will only be imported into a
contract if the court is satisfied that the parties would necessarily
have agreed upon such term if it had been suggested to them at the
time of contracting
[17]
.
[55] In
all of those respects, the respondents, on the face of it, would be
confronted with considerable, most
probably insurmountable, hurdles.
The term contended for is not only very vague, reducing the
likelihood of consensus if it had
been proposed as a term at the time
of the conclusion of the contract, but, in addition, the signed
demilitarisation contracts
deal comprehensively with all the relevant
aspects, including the remuneration and pension benefits upon
demilitarisation. It can
hardly be said that the parties did not
apply their minds to those aspects. Further, if the respondents seek
to accord their alleged
term a meaning that the demilitarised would
be treated on an equal footing with those that remained in the
military – that
is, notwithstanding the fact that the Defence
Act and other defence laws were no longer applicable to them, and the
Public Service
Act and Public Finance Management Act and other laws
in the Public Service now applied to them (and did not apply to those
that
remained in the military) – it might well mean that the
alleged tacit term is in conflict with the express terms of the
demilitarisation
contract. The importation of that term would defeat
the object of that contract and of demilitarisation.
[56] As
pointed out earlier, in their delictual claims the very term they
seek to import, which they refer to as
a representation, and which,
when made, was known to be false. While the rules of pleading may
allow the latitude of pleading conflicting
concepts (or versions) in
the alternative, the evidence to be presented by the respondents at
the trial can either be one or the
other, but it cannot be attested
to as being both, a tacit term, which ought to be imported into the
contract, and a false representation.
The one is the product of
agreement the other a unilateral, delictual wrong.
[57] The
respondents claim for “pure economic loss” seems more of
a claim for an alleged unfair labour
practice, in the thin guise of a
delictual claim for pure economic loss. But for its adopted moniker,
it seems to have a lot in
common with a claim, brought in the Labour
Court by another union, NEHAWU, acting on behalf of civilian
employees of the Department
of Defence’s Financial Management
Division, which was purportedly based on contract and in which they
effectively sought
a declaratory order that their placement in
civilian posts had an ‘’unfair effect’’ on
them, and consequential
relief, in general terms, but to the effect
that the Department place them in the position they would have been
in, but for their
demilitarisation in respect of their salares and
benefits from 1 November 1998. On 21 October 2016 the Labour Court
(per Van Niekerk
J ) dismissed the matter on the basis that it did
not have jurisdiction to entertain the claim based on alleged
unfairness. The
pension issues seem to have been already resolved.
[58] In
light of the above, the court
a quo
could not have found that
all or any of the requirements of section 3(4)(b) of the ILPA had
been met. In fact, none had been met.
In the circumstances it ought
to have refused the condonation sought. In coming to the opposite
conclusion the court
a quo
wrongly exercised its discretion in
terms of section 3 of the ILPA.
[59] In
the result:
1. The
appeal against the orders of the court
a quo
is upheld;
2. The
orders of the court
a quo
are set aside and are substituted
with the following: “1. The application for condonation is
dismissed; 2. There is no costs
order.”
3. There
is no costs order in respect of the appeal.
P Coppin
Judge
of the Labour Appeal Court
Davis
and C Musi JJA concur in the judgment of Coppin JA.
APPEARANCES: (There was a
virtual hearing via Teams)
FOR THE
APPELLANTS: WR
Mokhare SC and M Kgatla
Instructed
by the State Attorney (Pta)
FOR THE
RESPONDENT: F van der
Merwe
Instructed
byOtto Krause Attorneys
[1]
Act
40 of 2002.
[2]
Act
68 of 1969.
[3]
a “debt” is defined in section 1 of the ILPA as any debt
arising from any cause of action.
[4]
Madinda
v Minister of Safety and Security, RSA
[2008] ZASCA 34
;
2008 (4) SA 312
(SCA) para 16.
[5]
[2010]
3 BLLR 251 (LAC).
[6]
(1888)
22 QBD 131.
[7]
See,
inter
alia
,
McKenzie
v Farmers’ Co-Operative Meat Undertaking Ltd
1922 AD 16
at 22;
Evins
v Shield Insurance Co Ltd
1980
(2) SA 814
(A) at 835 (“
Evins
”).
[8]
See
Caxton
Printing Works (Pty) Ltd v Transvaal Advertising Contractors Ltd
1936 TPD 209
at 215;
Trotman
v Edwick
1951 (1) SA 443
(A) at 449B;GB Bradfield
Christie’s
Law of Contract in South Africa
(7
ed) at 344 (“
Christie’s
”)
(re: fraudulent and negligent misrepresentations relating to
contracts); and
Pilkington
Bros.(SA)(Pty) Ltd v LIllicrap, Wassenaar & Partners
1983 (2) SA 159
(W) (re: pure economic loss).
[9]
See
inter alia,
Evins
(above) at 835.
S
See
Christie’s
(above)
at 650-651 and the cases cited there.
[11]
Symington
v Pretoria-Oos Privaat Hospitaal Bedryf (Pty) Ltd
2005
(5) SA 550
SCA) at 563.
[12]
See
inter
alia
,
Evins
(above)
[13]
Moise
v Germiston Transitional Local Council
[2001] ZACC 21
;
2001 (4) SA 491
(CC) para 9.
[14]
See
also per Didcott J in
Mohlomi
v Minister of Defence
[1996] ZACC 20
;
1997 (1) SA 124
(CC) para 11 and per Ngcobo J in
Brummer
v Minister of Social Development and others
2009(6) SA 323 (CC) para 50.
[15]
See,
inter alia,
Alfred
McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration
1974 (3) SA 506
(A);
Christie’s
(above)
at 197.
[16]
See
per Solomon JA in
Union
Government (Minister of Railways) v Fause Ltd
1916 AD 105
at 112;
Christie’s
(above) at 198.
[17]
City
of Cape Town (CMC Administration) v Bourbon Leftly
2006 (3) SA 488
(SCA) para 19.