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[2009] ZALCCT 9
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Burton v Telkom SA Ltd (C866/2008) [2009] ZALCCT 9 (9 June 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
CASE
NO: C 866/2008
In
the matter between:
STUART
BURTON
Applicant
and
TELKOM
S A
LIMITED
Respondent
JUDGMENT
BHOOLA
AJ:
Introduction
[1]
This is a judgment on a point
in limine
raised by the respondent in this matter.
[2]
The point
in limine
arises from a claim brought by the applicant on 17 November 2008 in
which he seeks,
inter alia
,
damages in respect of loss of earnings (i.e. back pay) for the period
1 April 2006 and 31 March 2008.
[3]
The applicant had also sought an amount of R500 000.00 in
respect of “general damages”. Respondent pleaded
that
this claim stood to be dismissed on the basis that it was
impermissible to claim alleged non-patrimonial loss arising from
a
breach of contract. This formed the basis of the second point
in
limine
, which was conceded by the
applicant and accordingly I am not required to deal with it.
[4]
The relief sought in this matter flows from the unilateral change of
the applicant’s position in April 2006. The
respondent
has raised a plea of
res judicata
in respect of this claim, in that my brother Nel AJ had definitively
and finally pronounced on this issue in case number C330/2006.
[5]
The parties agreed that this plea could be argued as a
point
in limine
prior to commencement of the
trial in this matter enrolled for 21 and 22 May 2009. The trial
was accordingly postponed
sine die
by consent, and is referred to as “the pending matter”
below.
Background
[6]
The applicant was previously employed by the respondent in the
position of Business Accounts Sales Manager (“BASM”),
which was changed with effect from 1 April 2006 to Key Account
Manager (“KAM”). He considered this change to be in
breach of his employment contract and sought relief in the following
terms from this court on 6 July 2006 under case number C330/2006:
1.
“
That Respondent is to
re-instate Applicant with retrospective effect from 1 April 2006 in
the position of Business Accounts Sales
Manager, on terms and
conditions of employment not less favourable than those which
pertained to Applicant as at 31 March 2006;
and
2.
That Respondent is to adjust
Applicant’s Sales and Remuneration Plan so as to be not less
beneficial to Applicant as would
have been the case had Respondent
retained Applicant as Business Accounts Sales Manager beyond 1 April
2006.”
[7]
On 31 August 2007 an order was handed down by Nel AJ, followed by
written reasons, in which the following relief was granted
(I will
refer to this order henceforth as “the Nel judgment”):
“
[79]
In the exercise of my discretion I am therefore satisfied that I
should grant the applicant the relief sought in prayer 1 of
his
notice of motion. I am not persuaded that in the exercise of
the discretion I have that I should order such reinstatement
with
retrospective effect from 1 April 2006.
[80]
As far as the applicant’s prayer contained in paragraph 2 of
his notice of motion is concerned, he has failed to satisfy
me that I
should order the respondent to adjust his sales and remuneration
plan. This is so because on the facts before me I am
unable to
conclude that the applicant’s sales and remuneration plan is
less beneficial than would have been the case had
Telkom retained the
applicant as [BASM] beyond 1 April 2006”.
The
Respondent’s submissions
[8]
The respondent’s counsel, Mr Leslie, submitted that the
proceedings under case number C330/2006 (“the first claim”)
amounted to a claim for specific performance of the applicant’s
employment contract, coupled with a claim for back pay to
1 April
2006. In addition, counsel made the submissions set out below.
[9]
The Nel judgment had finally determined the question of whether the
applicant was entitled to relief flowing from the alleged
breach of
contract for the period 1 April 2006 ( the date of the alleged
breach) to 1 September 2007 (the date of the order). The
court had
refused to grant such relief.
[10]
The applicant had elected not to appeal against the judgment and is
thereby deemed to have accepted this outcome.
[11]
The respondent had complied with the order by placing applicant in
the position of BASM with effect from 1 April 2008 and by
paying him
the difference between his salary as KAM and the amount he would have
earned in the position of BASM between the date
of the order and 1
April 2008. The computation of this amount forms part of the claim in
the pending matter.
[12]
The respondent pleads that the determination of pay in respect of the
period 1 April 2006 to 1 September 2007 is
res
judicata
. The requirements for such a
plea are that there has to be a prior judgment; in which the parties
were the same; and the same point
was in issue.
[13]
In
Horowitz v Brock and others
1988 (2) SA 160
(A) 179H, the court held that an “
issue
”,
for the purposes of a
res judicata
plea, had the following meaning:
“
An
issue, broadly speaking, is a matter of fact or question of law in
dispute between two or more parties which a court is called
upon by
the parties to determine and pronounce upon in its judgment, and is
relevant to the relief sought”.
[14]
In
National Sorghum Breweries v
International Liquor Distributors
[2000] ZASCA 159
;
2001
(2) SA 232
(SCA), the majority, per Olivier JA, summed up the
position thus at 239I:
“
The
fundamental question in the appeal is whether the same issue is
involved in the two actions : in other words, is the same thing
demanded on the same ground, or, which comes to the same, is the same
relief claimed on the same cause, or, to put it more succinctly,
has
the same issue now before the Court been finally disposed of in the
first action?”.
[15]
Counsel disagreed on the interpretation of the dictum of Van Heerden
ACJ in the minority judgment in
National
Sorghum
(supra at 237B) to the effect
that:
“
As
algemene reel kan dus gesé word dat indien ‘n eiser op
‘n remedie aanspraak gemaak het en later of dieselfde
skuldoorsaak ‘n verwante remedie traag af te dwing, hy hom
vasloop teen a verweer van res judicata weens ‘n verslapping
van vereiste”.
The
applicant’s counsel submitted that although this was a minority
judgment the majority did not take issue with it
and this
dictum
was
accordingly cited with approval in
Holtzhausen
& Another v Gore NO & Others
2002 (2) SA141 (C) 149B.
[16]
The requirement that the previous action is based on the same cause
of action and has the same subject matter, need not be
met in all
cases, and may be relaxed. In this regard, a court is required to
exercise an equitable discretion, with the overriding
consideration
being overall fairness and equity (
Holtzhausen
(supra) 149F – 150G, with
reference to
Bafokeng Tribe v Impala
Platinum Ltd & Others
1999 (3) SA
517
(B) 566B-567B).
[17]
In the present matter, the respondent submitted, there is a prior
judgment dealing with the same issue between the same parties.
If the
applicant had been successful in his claim for retrospective
reinstatement in the Nel judgment, he would have been entitled
to
payment of the difference in earnings between the two positions for
the period at issue here, i.e. 1 April 2006 to 1 September
2007. The
applicant was unsuccessful, and insofar as he was not awarded any
back pay, now seeks precisely the same relief in the
pending
proceedings.
[18]
Put differently, the respondent submits that this court has already
considered whether the applicant should be entitled to
the difference
in remuneration between the positions of BASM and KAM between 1 April
2006 and 1 September 2007 i.e. his back pay.
This issue was finally
disposed of in the Nel judgment.
[19]
In the premises, the respondent submitted, the applicant’s
claim in respect of loss of earnings for the period 1 April
2007 to 1
September 2007 falls to be dismissed.
The
Applicant’s submissions
[20]
The applicant’s counsel, Mr Rautenbach, relying on
Signature
Design Workshop CC v Eskom Pension and Provident Fund and Others
2002
(2) SA 488
(C) at 491ff and
National
Sorghum Breweries
(supra),
submitted that the
res judicata
rule and the “once and for all” rule were, for all
practical purposes, indistinguishable.
[21]
The “once and for all” rule was described by Corbett JA
in
Evins v Shield Insurance Co Ltd
1980 (2) SA 814
(A) as follows:
“
The
“once and for all rule” applies especially to common law
actions for damages in delict, although it has also been
applied in
claims for damages for breach of contract...
Expressed in relation
to delictual claims, the rule is to the effect that in general a
plaintiff must claim in one action all damages,
both already
sustained and prospective, flowing from one cause of action...
Its purpose is to
prevent a multiplicity of actions based on a single cause of action
and to ensure that there is an end to litigation.
Closely
allied to the “once and for all” rule is the principle of
res judicata which establishes that, where a final
action has been
given in a matter by a competent court, then subsequent litigation
between the same parties....in regard to the
same subject matter and
based on the same cause of action is not permissible, and if
attempted by one of them, can be met by the
exception rei judicatae
vel litis finitae. The object of this principle is to prevent the
repetition of law suits, the harassment
of the defendant by a
multiplicity of actions and the possibility of conflicting decisions”
(835C-G).
[22] Mr Rautenbach
submitted that the court in
National Sorghum Breweries
(supra), in determining whether an applicant could seek damages
arising from a breach of contract when it had already been granted
judgment in respect of restitution, considered whether the issue had
been
finally disposed of
(my emphasis) in the first action.
The court found, for the following reasons that it had not:
(a)
The same thing was not claimed in each suit
because restitution in the form of repayment of purchase price was a
contractual remedy
clearly distinguishable from damages.
(b)
The claims were not based on the same
grounds or cause of action because in the first suit the necessary
allegations included: the
conclusion of the contract; the breach
thereof; the payment of the purchase price; and the cancellation of
the contract. In the
second action they included the further issues
of: the damages suffered; the causal chain between the breach and the
damage; and
the quantum of damages. The mere fact that there were
common elements in the allegations made in the two suits did not
justify
the
exceptio -
one
had to compare the second claim in its entirety with the first claim
in its entirety. When this was done in that case it became
clear that
the differences were so wide and obvious that it could not be said
that the same thing was being claimed in both suits
or that the
claims were brought on the same grounds (
National
Sorghum
supra at 239H-I and 240B-D). In
other words, counsel submitted, similar to the present instance, the
first suit was for a form
of restitution, and the second is for
damages arising from the initial breach of contract by the employer.
In the circumstances
in
National Sorghum
the court had held that neither the
exceptio
res judicatae
nor the “
once
and for all”
rule could be relied
upon to thwart the claim (at 241E-F).
[23]
The second question, counsel submitted, was whether, even if this
claim were to be found to fall within the four corners of
the rules,
this court nevertheless has the discretion to depart from their
strict application. A number of authorities were cited
in support of
the contention that such discretion exists or that the courts appear
to be supportive of such a principle. In support
of this proposition
counsel cited
Kommisaris van Binnelandse
Inkomste v Absa Bank Bpk
1995 (1) SA
653
(A) at 669F-G, as well as
Evins
(supra), where Jansen AJA (at 825B) in the minority judgment
expressed the desirability of re-examining the application of the
“
once and for all”
rule in our law, as well as its restricted application in appropriate
circumstances.
[24] Counsel cited as
further authority the thesis of Professor J C van der Walt, quoted
with approval by Davis J in
Signature Design
(supra at 496),
to the effect that the “
once and for all
” rule
could no longer be used to justify disposing of every possible action
in one single formula. In the learned Professor’s
own words:
“
Dit
bring ‘n mens by the slotsom dat die “once and for all”
reel nòg as regsbeginsel nòg op praktiese
gronde, en
ook nie ter wille van die beperking van “onnodige”
litigasie ingespan kan word nie. Die fiksie wat die tradisionele
skadeleer ten grondslag lê, te wete dat daar deur middle van
die aanwending van ‘n enkele skadeformule meteen ‘n
beslissing gevel kan word oor alle gelede en toekomstige skade, kan
derhalwe hoegenaamd nie meer gehandhaaf word nie.”
(Die
Sommeskadeleer en die “Once and for all” Reël, LLD
thesis (1977) at 523).
[25]
In
Signature Design
(supra at 498) Davis J expressed the rationale for the rule as
follows:
“
It
should also be remembered that the policy considerations which
underpin the “once and for all” rule were developed
with
the purpose of the prevention of a multiplicity of actions based upon
a single cause of action and the assurance that there
would be a
definitive end to litigation. (Evins (
supra
at 835E)
). Such policy considerations
clearly do not apply in the circumstances of this case...A court
should be particularly cautious to
extend the doctrine into an area
which can only work a manifest injustice”.
[26]
Counsel submitted furthermore that our courts have not only endorsed
this principle of discretionary application, but that
it had
specifically been applied in
Cape Town
Municipality v Allianz Insurance Co.Ltd
1990
(1) SA 311
(C). I was referred to a passage in the judgment
where the court, in respondent’s counsel’s submission,
appeared
to, in an
obiter
statement,
endorse a two stage procedure and suggested that if it did “
occasion
defendant’s expenses which would not have been incurred in a
single action, that hardship can be met by appropriate
costs orders
”
(at 332H- 333G). The passage quoted by counsel from
Allianz
has, he submitted been quoted with approval in:
Solomons
v Multilateral Motor Vehicle Accident Fund and Another
1999 (4) SA 237
(CPD) at 248 and
SZ
Tooling Services CC v SA Eagle Insurance Co. Ltd
[1992] ZASCA 157
;
1993 (1) SA 274
(AD) at 279 E- G. However, I agree with Mr Leslie’s
reply to this submission which is to the effect that the court, in
dealing
with a possible two stage process of litigation and the
possibility of the second stage being met with a
res
judicata
defence, found that this was
irrelevant to the issue of prescription under consideration. This he
submitted, was not an
obiter
remark as applicant’s counsel contended, but rather formed part
of the
ratio decidendi
of the decision. Mr Rautenbach conceded however that there was
a distinction between
Allianz
(supra) and the present case, but reasserted that there was also an
analogy in that in both cases the plaintiff/applicant sought
to
assert a money claim in subsequent proceedings, having earlier
established its rights in terms of a contract.
[27] In summary
therefore, it was submitted that the applicable legal principles were
as follows:
(a)
The
res
judicata
and “once and for all”
rules are virtually indistinguishable in our law;
(b)
In applying the rules the court should ask
not only whether the cause of action is the same in both claims, but
in fact whether
all the ingredients that the applicant/plaintiff
needs to establish in proving his claim in the second case were
required to be
proved and were judicially disposed of in the first.
Only if the answer is in the affirmative on all the ingredients of
the cause
of action and the remedy, does the defence succeed.
(c)
The rules are not rules of law inasmuch as
principles of convenience, from which this court has the discretion
to depart.
(d)
The rationale for the rules is to avoid a
multiplicity of actions, and to prevent a plaintiff continually
harassing a defendant
with claims.
(e)
In applying the rules and exercising its
discretion, the court will consider both the rationale for them as it
applies to the particular
circumstances of this case, as well as
whether denying plaintiff a subsequent action would result in a grave
injustice.
[28]
In applying the law as set out above, Mr Rautenbach contended that in
the present matter the applicant instituted a single
claim for
damages arising out of his loss of remuneration in respect of the
period 1 April 2006 to 31 March 2008. The applicant
did not institute
two claims, one in respect of the period prior to the Nel judgment
and one in respect of the period thereafter.
The respondent’s
in limine
point is restricted to that part of the damages claim which concerns
the period prior to the Nel judgment, and the same point is
not taken
in regard to the period after the judgment. It follows that the
respondent has implicitly conceded the claim for damages
for the
period 1 September 2007 (the date of judgment) to his reinstatement
in April 2008, although the quantum is in dispute.
This supports the
contention that the claim is for an illiquid amount, and that it
constitutes a claim for damages rather than
pay or remuneration in
that the latter implies a claim for specific performance. This is
consistent, it was submitted, with the
Nel judgment which found the
applicant’s demotion to constitute a breach of his employment
contract. Accordingly,
in respect of the single continuum
of damages suffered by the applicant arising from the breach of
contract, he initially sought
specific performance in the form of
reinstatement and Nel AJ exercised his discretion not the make the
reinstatement retrospective.
Even if the court had granted
retrospective reinstatement (in the same manner it granted
prospective reinstatement), the parties
would still have had to
approach this court to determine the applicant’s loss for the
pre-judgment period, as it now seeks
to do. It is clear, the
applicant submits, that the Nel judgment did not decide a claim for
damages, which is what the applicant
now seeks, arising from the
breach of his contract by his employer, which commenced on 1 April
2006 until it was rectified by the
employer in April 2008.
The respondent, it was submitted is obfuscating the
two issues – i.e. the
finding that the demotion was a breach
and declining to grant the remedy of retrospective reinstatement or
specific performance.
In fact, there was no claim for damages before
Nel AJ which required him to exercise a discretion or to decide
whether the facts
in support of a damages claim existed. In
particular, the applicant submits, the court did not decide whether
the applicant suffered
a loss arising from the breach of contract or
not – there was in this regard no quantum put before the court
to consider,
which Olivier JA (in
National
Sorghum
(supra)) said was essential for
a damages claim.
[29]
Lastly, counsel submitted that it would constitute a gross injustice
not to allow the applicant to proceed in respect of the
pre-judgment
period (April 2006 – September 2007). The respondent has
already permitted the applicant in principle to proceed
with his
claim in respect of the period post judgment i.e. 1 September 2007 to
1 may 2008. The applicant will rely on the same
evidence in respect
of that part of the claim as in respect of the claim pre-judgment. In
both cases applicant relies on the same
method of calculation, in
respect of which it will lead expert evidence. In the circumstances,
it was submitted, there is no multiplicity
of actions to be visited
on the respondent arising from this claim. On that basis alone the
court would be entitled to dismiss
the point
in
limine
.
Evaluation
of submissions
[30]
The applicant resists the point
in
limine
on two grounds. Firstly, in case
number C330/2006 (“the first claim”) he sought specific
performance of his contract
of employment. He now seeks (“the
second claim”) damages pursuant to the breach thereof. He is
therefore claiming a
different thing. Secondly, even if the
res
judicata
and “once and for all”
rules are met, this Court has a general discretion to refuse to
uphold these defences and should
exercise this discretion in
dismissing the
in limine
point.
I
turn now to address this.
[31]
In the first claim the applicant sought an order reinstating him in
his job as BASM with retrospective effect to 1 April 2006,
as well as
an order adjusting the applicable Sales and Remuneration Plan so as
to not be less beneficial to him had he remained
in his BASM role
beyond 1 April 2006. Differently construed, this was an order for
reinstatement retrospective to when his demotion
occurred and being
placed in the financial position he would have been in, but for the
demotion. Nel AJ granted the claim for reinstatement,
in other words,
it ordered specific performance, and declined to order an adjustment
to the Sales and Remuneration Plan. This order
was granted as from
the date it was made, and obliged the respondent to return applicant
to his position as BASM and pay him the
equivalent remuneration from
then onwards going forward.
[32]
The second thing claimed was in essence financial restitution or, in
other words, a claim for damages arising from the breach
of the
employment contract by way of his demotion. This cannot by any
stretch of logic have formed part of the specific performance
order
or, as was submitted by respondent’s counsel, it is self
evident that a past obligation cannot be specifically performed.
The applicant was therefore not seeking respondent’s compliance
with a particular prospective obligation, but was seeking
payment
equal to that which he would have received had respondent not
breached its contractual obligation to him by demoting him.
The
respondent submitted that the applicant did not place the relevant
evidence regarding the quantum of his loss as a result of
the breach
before the court. He did not adduce the
facta
probanda
he was required to provide to
succeed in a claim for back pay, and cannot now seek a further
opportunity to do so.
[33]
Ultimately however, whatever nomenclature is applied to his first
claim and irrespective of whether it is labelled specific
performance
or contractual damages he is seeking precisely in the second claim
what he sought and failed to obtain fully in the
first, in my view.
He sought that he be placed in the same position he would have been
in, physically and financially, had the
employer not acted in breach
of its contractual obligations to him. He did not succeed in being
physically placed back in his old
role as BASM for the period 1 April
2006 to 1 September 2007, nor did he succeed in recovering the
financial compensation he would
have received for that period had
been placed back in the that role. The reason for this is that the
Nel judgment was based on
an exercise by the court of its discretion
not to grant this portion of the relief claimed. He is now seeking
this relief by framing
his action as a claim for damages rather than
specific performance, albeit (and this is common cause) arising from
the same cause
of action. The long and short of it is that he wants
his back pay for the period the Nel judgment did not award
reinstatement i.e.
1 April 2006 to 1 September 2007.
[34]
This is in essence the same relief framed differently and in my view
does not differ in any material respects from that initially
claimed.
I am not persuaded that the applicant is claiming a different thing
now. This claim is therefore aptly met by the
res
judicata
defence. In any event, even if
I were to find he is seeking different
relief
arising (as is common cause) from the
same cause of action, his claim is still met by the “once and
for all” rule, in
that, as required by
Evins
Shield
(supra at 835H) he still had to
sue for all relief arising from that cause of action in one action. I
am not persuaded that these
two rules are for present purposes
indistinguishable. In fact, as respondent submitted in its replying
heads, this is correct only
insofar as the once and for all rule
could be construed as an extension of the
res
judicata
rule. In particular, whereas
res judicata
applies where a party claims “the same thing”, the once
and for all rule has broader application and extends to situations
where a different thing is being claimed out of the same cause of
action. Accordingly, on either rule the applicant’s
claim
fails.
[35]
In regard to applicant’s second argument that should I find
that the requirements of
res judicata
or the “once and for all” rule have been met, I
nevertheless have a discretion which I should exercise in the
applicant’s
favour in the interests of justice and fairness.
The applicant relied in this regard heavily on the
Signature
Design
(supra) decision. However, I
agree with respondent’s counsel that this decision refers only
to the “once and for all”
rule not the
res
judicata
defence. Furthermore, the
Kommisaris
case referred to in
Signature Design
is only authority insofar as the two requirements of
res
judicata
i.e. the “same thing”
and the “same cause of action” can be flexibly applied in
certain circumstances. Indeed
the facts in the
Signature
Design
case are an indication of the
kinds of specific circumstances contemplated, where grave injustice
would have arisen from the rigid
application of the “once and
for all” rule. The present claim is not the kind of matter
which in my view would justify
flexible application to avoid gross
injustice.
[36]
In addition, I do not find in
Allianz
or other cases cited by the applicant, support for the proposition
that this court has a general discretion to deny a plea of
res
judicata
. Even if there may be
overriding policy considerations which may justify not applying the
rules in certain instances, I am not
persuaded that those are
applicable. I am in agreement with the submission that the applicant
is seeking a second bite at the cherry
in order to succeed in a claim
for retrospective back pay. Should I allow this claim to proceed, and
should the applicant succeed
in proving same, this would in my view
conflict with the decision of Nel AJ. This would be undesirable and
is exactly the kind
of outcome the
res
judicata
and once and for all rules
seek to prevent. Indeed it is exactly why an appeal
mechanism is available to aggrieved
applicants.
[37]
The last point I wish to make is that insofar as applicant contends
that denying the applicant the right to proceed would undermine
the
principles of fairness and equity the LRA is based on, in my view, so
would the permitting of a multiplicity of actions. Here
there is an
ongoing relationship between the parties – and the labour
relations framework that underpins the Labour Relations
Act is
premised on the effective and expeditious resolution of disputes in
order to preserve the employment relationship. To permit
a
disgruntled employee to return to court over and over again on the
same cause of action when there has been a judgement of this
court
that has not been appealed, would not serve the interests of our
sophisticated labour relations framework.
[38]
In the premises, I find that the portion of the applicant’s
claim for damages in respect of the period 1 April 2006 to
1
September 2007 is met squarely by the
res
judicata
and once and for all defence.
The point
in limine
accordingly succeeds. The applicant has conceded the point
in
limine
pertaining to his claim for
general damages. I see no reason why costs should not follow the
cause.
[39]
The only remaining issue for the pending trial is whether the
respondent complied with the order issued by Nel AJ in paying
the
applicant the amount he would have earned as BASM for the period 1
September 2007 to 31 March 2008, being the date when he
was
reinstated to the position.
[40]
In the premises I make the following order:
The
respondent’s
in limine
point succeeds. Costs follow the cause.
_____________________
Date
of hearing: 21.05.09
Date
of judgment: 09 .06.09
Appearance:
For
the Applicant: Adv F Rautenbach instructed by Irish Inc
Attorneys
For
the Respondent: Adv G Leslie instructed by Herold Gie Attorneys