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[2014] ZALCJHB 215
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Ngaka Modiri Malema District Municipality v Sheriff Of The High Court Mmabatho and Another (J3298/12) [2014] ZALCJHB 215 (23 June 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
CASE
NO J 3298/12
NOT
REPORTABLE
In
the matter between:
NGAKA
MODIRI MALEMA
DISTRICT
MUNICIPALITY APPLICANT
and
SHERIFF
OF THE HIGH COURT
MMABATHO 1
ST
RESPONDENT
TDH
RAMPHELE 2
ND
RESPONDENT
Application
heard: 20 June 2014
Judgment
delivered: 23 June 2014
JUDGMENT
VAN
NIEKERK J
[1]
This is an application to set aside a writ of execution issued by the
registrar of this court on 4 December 2012 under case
number J
977/09. The writ was issued in favour of the second respondent, who
opposes this application. The first respondent abides
by the decision
of this court.
[2]
The material facts relevant to the present proceedings have their
roots in an order made by this court, per Bhoola J, on 28
April 2010.
The second respondent was employed as the applicant’s municipal
manager from June 2007 until his dismissal in
February 2009. In her
judgment, Bhoola J held that the second respondent had been unfairly
dismissed. She granted an order reinstating
him with full benefits
with effect from 2 February 2009, alternatively, she ordered that
‘
the first respondent compensate the applicant for the
balance of his fixed term contract.
’
[3]
On 20 May 2010, the registrar issued a writ of execution pursuant to
the judgment. The execution of the writ was suspended by
order of
this court, per Molahlehi J, on 3 June 2010, pending the outcome of
an application for the rescission of the judgment
granted by Bhoola
J.
[4]
On 17 February 2011, a second writ of execution was issued by the
registrar. On 11 March 2011, after an application to this
court, that
writ was set aside.
[5]
During August 2011, the applicant and the second respondent concluded
two settlement agreements. In terms of the first, the
applicant
agreed to pay the second respondent an interim amount of R 200 000;
in terms of the second, the applicant agreed to pay
him an additional
amount of R 3.25 million. Both agreements were signed on 10 August
2011. In terms of the second agreement, the
agreed amount was to be
paid to the second respondent within 10 working days of signature.
[6]
On 4 August 2011, a week prior to the conclusion of the settlement
agreements, Bhoola J refused to condone the late filing of
an
application for leave to appeal against a judgment delivered on 28
April 2010.
[7]
On 4 December 2012, the registrar issued a writ of execution in
favour of the second respondent in the amount of R 4 608 954.90.
It
would appear from the terms of the writ that the second respondent
sought payment on the basis of the order issued by Bhoola
J by
deducting the amount that he received in terms of the settlement
agreements from what he contends he would have earned from
the date
of reinstatement to the date of the expiry of his fixed term
contract.
[8]
On 13 December 2012, this court stayed the execution of the writ
issued on for December, pending the finalisation of the present
application, which was postponed sine die. On 25 September 2013, some
10 months later, the second respondent filed an answering
affidavit
to oppose the application.
[9]
That issue in the present proceedings is whether the judgment debt
created in terms of the order dated 28 April 2010 has been
extinguished. The applicant contends that the settlement agreement
said the effect of extinguishing the judgment debt. The second
respondent contends that the settlement agreements constituted a
variation of the court order and that in the absence of a formal
abandonment of the judgment, the judgment stands and he is entitled
to execute against it.
[10]
The agreement concluded between the parties on 10 August 2011 records
that it is a ‘full and final settlement agreement’
entered into between the applicant and the second respondent. The
preamble to the agreement reads as follows:
‘
PREAMBLE
WHEREAS the Ngaka Modiri
Molema District Municipality (the municipality) has instituted an
appeal against the whole judgment of
the Labour Court, Johannesburg
granted by Her Ladyship Justice Bhoola on 28 April 2010;
AND WHEREAS the parties
are desirous to settle the matter out of court;
AND WHEREAS the parties
have reached agreement, subject to the approval of the Council of the
municipality, and have recorded their
agreement on the terms and
conditions as set out hereunder.
WHEREFORE IT IS AGREED AS
FOLLOWS:…’
[11]
In clause 1 of the agreement, the parties specifically acknowledge
that the second respondent had been successful in obtaining
judgment
against the applicant in respect of the termination of his employment
contract, that the court had ordered that he be
reinstated and that
the applicant had launched an appeal against that decision. Against
that background, the parties record their
agreement that ‘
the
municipality shall proceed with its decision to terminate the
employment relationship between it and Mr. TDH Ramphele as previously
done.
’
[12]
In clause 2 of the agreement, the applicant undertook to compensate
the second respondent in a net amount of R3.45 million,
inclusive of
an amount of R 200 000 already paid in terms of an interim agreement.
Clause 4 of the agreement reads as follows:
‘
FULL AND FINAL
SETTTLEMENT OF DISPUTE
The parties hereby
records (sic) that this agreement constitute the full and final
settlement of the matter related to the employment
contract entered
into between them and any pending litigation shall be withdrawn
forthwith.’
As
I have indicated, is not disputed that the settlement amount was paid
- on 10 August 2011, the second respondent
was paid an
amount of R 200 000 and on 7 September, he was paid an amount of R
3.25 million.
[13]
The writ issued by the registrar on 4 December 2012 directs the first
respondent to attach and take into execution a sum being
the balance
of the second respondent’s contract plus interest from 2
February 2009 ‘
as per court order less R 3 500 000.00 paid
as per agreement between the parties
…
And of same to
cause to be realized the following sums being the balance of
Applicant’s employment contract plus interest
at 15.5% from 02
February 2009: Total salary and benefits = R 4 608 954.90.’
[14]
The second respondent contends that the judgment by Bhoola J is final
and cannot be altered by the parties, not even by way
of compromise.
Secondly, the second respondent contends that he has not abandoned
the judgment or any part of it and that in the
circumstances, the
judgment stands, and he is entitled to execute against it. In this
regard, the second respondent relies on rule
41 (2) of the rules of
the High Court. Thirdly, the second respondent contends that a
distinction ought properly to be drawn between
the judgment on which
he relies and the settlement agreement, which falls properly to be
regulated by the law of contract. In this
regard, he submits that
this court has no jurisdiction in relation to contractual disputes.
Finally, in the second respondent contends
that the judgment on which
he relies affords him the right to claim salary and benefits for the
unexpired period of these contract
and that he is entitled to have
the writ issued and enforced in respect of those amounts
[15]
The general principle that is applicable is clear – a writ of
execution can be set aside if it is no longer supported
by its
causa
(Van Dyk v Du Toit en ‘n ander
1993 (3) SA 781
(OPA). A writ is
no longer supported by its
causa
in circumstances where the
judgment has been satisfied by payment,
compensatio
,
novation
,
delegatio
or cession (see
Le Roux v Yskor Landgoed (Edms)
Bpk en andere
1984 (4) SA 252
at 257E-F). An offer of compromise
‘in full and final settlement’ of a debt precludes the
creditor from claiming any
balance of the amount owing if that offer
is accepted. The essential enquiry is whether an agreement of
compromise was concluded
– here, one is concerned with the
rules of offer and acceptance ( see
Be Bop a Lula Marketing &
Printing CC v Kingtex Marketing (Pty) Ltd
2008 (3) SA 327
(A),
where the court held that ‘
the proposal, objectively
construed, must be intended to create binding legal relations and
must have so appeared to the offeree
’).
[16]
In the present instance, it is clear from the terms of the settlement
agreement that it was intended, as reflected in the preamble,
to
‘settle the matter out of court’ in the face of the
appeal lodged against the judgment of Bhoola J and that the
terms of
the settlement extended to the termination of the employment
relationship between the applicant and the second respondent.
The
offer made and accepted was to in full and final settlement of the
dispute between the parties relating to the second respondent’s
employment contract and its termination, and with full knowledge of
the terms of the judgment.
[17]
In these circumstances, I fail to appreciate on what basis the second
respondent contends that he is entitled to have issued
a writ of
execution in respect of an amount that would appear to be what he
claims to be his remuneration and benefits for the
balance of his
contract, less the amount of the settlement. The terms of the
settlement agreement clearly represent a compromise
of the judgment
debt. To the extent that the second respondent appears to base his
contentions on the proposition that a judgment
once granted is
incapable of compromise, that is simply not correct, as the above
authorities indicate. Nor does the second respondent’s
submission regarding the Rule 42 of the Uniform Rules have any merit.
As I understood the submission, the second respondent contends
that a
judgment once granted cannot be novated or varied or otherwise
compromised, and that in the absence of a formal abandonment
in terms
of Rule 42, he remains entitled to a execute against the judgment by
Bhoola J. Rule 42 is not peremptory – it simply
entitles a
judgment creditor to abandon a judgment granted in its favour and
establishes the procedure for doing so. It does not
prohibit or limit
a judgment creditor from compromising a judgment granted in its
favour. Similarly the second respondent’s
submission in regard
to the validity of the settlement agreement is not supported by the
papers before me. The second respondent
contends that he was forced,
on account of his dire financial circumstances, to sign the
agreement. All of the evidence indicates
the contrary. The second
respondent, who is not an unintelligent man, entered into a contract
in terms of which he accepted a significant
sum of money in return
for the certainty of the withdrawal of an appeal against the judgment
in his favour and an expeditious resolution
to the dispute between
him and his employer. Similarly, the applicant bought certainty in
the face of the judgment against it and
the uncertain outcome of any
appeal. There is no reason, either in terms of the law or more
broadly on grounds of public policy,
why the parties should not be
held to their agreement.
[18]
Finally, in relation to costs, the court has a broad discretion under
s 162 to make costs orders according to the requirements
of the law
and fairness. The court has traditionally been reluctant to make
orders for costs against individual employees who pursue
their rights
misguidedly, but in good faith. In the present instance, I have my
doubts that this case falls into that category;
having a writ issued
in the present circumstances smacks of opportunism. I am prepared to
give the second respondent the benefit
of the doubt, and for that
reason, I do not intend to make any order as to costs.
For
these reasons, I make the following order:
1. The
writ of execution issued by the registrar on 4 December 2012 under
case no JR 977/09 is set aside.
2.
There is no order as to costs.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
REPRESENTATION
For
the applicant: Adv. E van Graan SC, with him Adv. X Matyolo,
instructed by Kgomo Mokhetle & Tlou Attorneys
For
the second respondent: In person