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[2015] ZALCCT 16
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Myburgh and Others v Minister for Public Service And Administration and Others (JS94, 95, 96, 97, 98/2011) [2015] ZALCCT 16; (2015) 36 ILJ 2090 (LC) (26 February 2015)
REPUBLIC
OF SOUTH AFRICA
The
Labour Court of South Africa, Cape Town
Judgment
C
ase
Nos: JS94, 95, 96, 97, 98/2011
DATE:
26 FEBRUARY 2015
Reportable
In
the matters between:
G
J C MYBURGH &
others
...................................................................................................
Applicants
And
Minister
for Public Service &
Administration
...........................................................
First
Respondent
Minister
of Justice and Constitutional
Development
............................................
Second
Respondent
Government
Employees Pension
Fund
.....................................................................
Third
Respondent
Heard
:
4 February 2015
Delivered
:
26 February 2015
Summary:
Application to make settlement agreement order of court. Agreement
accepted by state attorney, signed by first respondent,
disputed by
second respondent. Quaere: whether agreement is binding on second
respondent.
Judgment
STEENKAMP
J
Introduction
[1]
Five
applications served before this Court to make a settlement agreement
in respect of five different applicants in different cases
orders of
court in terms of s 158(1)(c) of the Labour Relations Act.
[1]
The applicants in each case were represented by the same attorneys
and counsel. The respondents in each case are the Minister for
Public
Service and Administration; the Minister of Justice and
Constitutional Development; and the Government Employees Pension
Fund, respectively. The latter (the third respondent) is cited only
because it has an interest in the outcome. The first respondent,
the
Minister for Public Service and Administration, is represented by the
State Attorney. It abides the judgment of this Court.
The second
respondent—the Minister of Justice and Constitutional
Development – is, surprisingly, not represented by
the State
Attorney but by private attorneys and counsel. The second respondent
opposes the relief sought. The parties all agreed
that the Court
should hear one matter (under case number JS 94/2011) and that the
outcome will be binding on the other four disputes.
[2]
The second respondent was represented by
the state attorney at the time the settlement agreement was
concluded. But he contends
that he had not mandated the state
attorney to settle the various disputes on his behalf; that he did
not sign the agreement; and
that he is not bound by it.
Background
facts
[3]
The
applicant in this (test) case was a principal state law adviser
employed by the state in the Department of Justice and Constitutional
Development until he retired. He, like the applicants in the other
four cases, instituted litigation against the first and second
respondents. It arose from the implementation of an Occupation
Specific Dispensation that would entail financial benefits for the
applicants. The state attorney acted for both respondents.
[2]
The attorney in that office responsible for the litigation, Mr L
Kopman, engaged in settlement negotiations with the applicants’
attorney, Mr Ian Weir-Smith.
[4]
Mr Kopman, for the Office of the State
Attorney and on behalf of both respondents, sent Mr Weir-Smith a
settlement proposal together
with a draft settlement agreement in
respect of the various disputes on 8 April 2011. The applicants made
a counter-offer. The
state attorney, acting for “the
respondents”, rejected it on 2 August 2011. On 19 August 2011
the applicants accepted
the original offer contained in the state
attorney’s letter of 8 April 2011 and set out in detail in the
written settlement
agreement.
[5]
An authorised representative of the first
respondent signed the settlement agreement. In the heading to the
agreement, both respondents
are reflected as being parties to the
agreement. It deals with the introduction of an “Occupation
Specific Dispensation”
for legally qualified employees in the
public service and in the Department of Justice and Constitutional
Development. In terms
of that agreement, the second respondent would
make certain payments, to be verified by the first respondent, to the
applicants.
[6]
The chief director: legal services in the
Department of Public Service and Administration, Adv S M van Schoor,
sent the agreement
– signed by the first respondent – to
Mr Dick Muzwayine, a director for human resources in the Department
of Justice
and Constitutional Development, stating:
“
Herewith
please find the original settlement agreements in each of the above
matters signed by the Minister for the Public Service
and
Administration. Kindly attend to obtain signatures thereon on behalf
of the Minister of Justice and Constitutional Development
and return
to us.”
[7]
Mr Muzwayine was present in the without
prejudice meeting on 28 March 2011 where messrs Kopman (of the state
attorney’s office)
and Weir-Smith discussed settlement of the
disputes, leading to Kopman’s settlement proposal of 8 April
2011 that the applicants
accepted. The state attorney acted on behalf
of both the respondents at that stage.
[8]
On 28 September 2011 Muzwayine wrote to a
number of the applicants by email, stating:
“
I
have received the settlement document from the DPSA yesterday. You
[i.e. the applicants] are requested to contact me to make
arrangements so that you can read through the document for you to
decide on signing the agreement. The DPSA has signed the document
on
behalf of the MPSA.” [i.e. the Minister].
[9]
Some confusion ensued. One of the
applicants, Pierre van Wyk, wrote back to Muzwayine after having
received the agreements. He noted
that Ms van Schoor had remarked in
her covering letter that the second respondent “must also sign
and then the settlement
must come back to her”. In a later
email he suggested “that the settlement agreements duly signed
by the respondents
be forwarded to Empie [Adv van Schoor] to forward
to the State Attorney for submission to our attorney, Mr Ian
Weir-Smith”.
Muzwayine, on the other hand, indicated his
understanding “that we have to obtain the signature of DOJ
[
sic
]
after
you
[the applicants] have signed the settlement to indicate your
acceptance”.
[10]
The applicants asked for the calculation of
the settlement amounts. Muzwayine had a change of heart. On 4 October
2011 he wrote
to them again and said:
“
I
think I made a mistake by giving you the settlement documents. Pierre
please return them for us to present to the minister for
signature.
You were at the beginning right that you have to wait for our
Minister to sign first.”
[11]
Time passed. Weir-Smith repeatedly wrote to
Kopman, asking for the signed agreements, over a period of five
months. Out of the blue,
on 22 February 2012, the second respondent’s
new attorneys of record, Mpoyana Ledwaba Inc, entered the fray for
the first
time. They wrote to Weir-Smith and said that they were now
instructed to act for the second respondent in all the underlying
disputes.
They filed a notice of appointment as attorneys of record
five days later, on 27 February 2012. It initially referred to their
appointment for “the plaintiff”. They eventually
corrected that seven months later, on 27 September 2012, to reflect
“the 2
nd
respondent”.
[12]
On 4 May 2012 Weir-Smith wrote to Mpoyana
Ledwaba and noted that the state attorney was on record in the
litigation in this Court
as well as the High Court. He further noted:
“
In
the circumstances, could you kindly advise as to whether it is your
offices, or those of the state attorney, who are now acting
on behalf
of the Minister of Justice & Constitutional Development.
With
regard to the status of these cases, our clients and our offices are
of the view that the matters are settled. Although the
first
respondent has already signed the settlement agreements, neither our
offices nor our clients, despite repeated requests,
have been
provided with copies of the settlement agreements as signed by the
Minister for Public Service & Administration and
signed by the
Minister of Justice & Constitutional Development.
We
can accordingly advise that we hold instructions to proceed with
applications to have the settlement agreements made orders of
court,
which applications will be delivered shortly.”
[13]
Mpoyana Ledwaba replied and said that they
act for the second respondent. They expressed the view that the
matter is not settled
as their client had not signed the settlement
agreement. Weir-Smith responded, reiterating that the state attorney
was on record
for the second respondent, but agreeing, as a matter of
courtesy, to serve this application on Mpoyana Ledwaba. He did so on
26
July 2012. The second respondent, now represented by the new
attorneys, oppose the application. The first respondent, still
represented
by the state attorney, does not. The state attorney only
withdrew as attorney of record on 8 August 2012.
Evaluation
/ Analysis
[14]
Has the dispute been settled? The
applicants say that it has, and the first respondent appears to
accept it. The second respondent
does not.
[15]
The second respondent argues that the
agreement was subject to his signing it. Mr
Rip
argued that the second respondent had to first consider the proposed
settlement agreement and indicate concurrence with it by signing
it
before a final settlement agreement could have come into place. He
also points to the following terms of the settlement agreement
that
was signed by the first respondent but not by the second respondent:
15.1
Clause
3.2 records that the agreement “is entered into
and
signed
[3]
by the parties without admission of any liability by either party”.
15.2
Clause 4 contains a non-variation clause,
including the provision that no variation will be effective “unless
reduced to writing
and signed by, or on behalf of, both [
sic
]
parties”.
15.3
It is recorded that “the signatories
to this agreement warrant that they are duly authorised to represent
the parties affected
by the agreement.”
[16]
From these clauses Mr
Rip
argues that the parties intended a signed written agreement at all
times.
[17]
As to the agreement reached by Messrs
Weir-Smith and Kopman, Mr
Rip
argued that it was simply not in line with the actual terms of the
written document. He maintains that all of the parties to the
settlement agreement intended it to reflect their agreement and that
it could only take effect once signed by all the parties.
Because
Kopman did not sign the agreement on behalf of the second respondent,
he argues, no agreement binding the second respondent
came into
existence.
[18]
Mr
Van der
Merwe
, on the other hand, pointed out
that the second respondent does not dispute that Messrs Weir-Smith
and Kopman reached consensus
on the terms of the settlement
agreement; and that it is common cause that the second respondent had
instructed the state attorney
to act on his behalf in the litigation
instituted by the applicants.
[19]
An
attorney has the ostensible authority to conclude a settlement
agreement on his or her client’s behalf. Once clothed with
such
ostensible authority, it is irrelevant that the attorney did not have
the client’s actual mandate to conclude a settlement
agreement.
[4]
The exception –
where the other party induced the agreement by misrepresentation –
does not arise in this case.
[20]
An
important further consideration in this case is that the applicants
rely on the ostensible authority of the state attorney. It
is common
cause that the state attorney acted on behalf of both respondents up
to the point of settlement. The Supreme Court of
Appeal has held that
the state attorney has an even wider general authority than an
ordinary attorney, as the state attorney derives
its authority from
statute. Thus, even if a senior government official is unaware of and
has not expressly approved of a settlement
agreement, it does not
entitle the government to avoid that agreement.
[5]
“
The
proper approach is to consider whether the conduct of the party who
is trying to resile from the agreement has led the other
party to
reasonably believe that he was binding himself. Viewed in this way it
matters not whether the attorney acting for the
principal exceeds his
actual authority, or does so against his client’s express
instructions. The consequence for the other
party, who is unaware of
any limitation of authority, and has no reasonable basis to question
the attorney’s authority, is
the same. That party is entitled
to assume, as the respondents did, that the attorney who is attending
the [pre-trial] conference
clothed with an ‘aura of authority’
has the necessary authority to do what attorneys usually do at a
[pre-trial] conference
– they make admissions, concessions and
often agree on compromises and settlements. In the respondents’
eyes the State
attorney quite clearly had apparent authority.”
[6]
[21]
The same holds true for the case before me.
The state attorney, represented by Kopman, acted for both respondents
when they entered
into the settlement agreement. There was no doubt
in his mind that the dispute had been settled. It is on that basis
that the first
respondent signed the agreement. Conspicuous by its
absence is also any affidavit by Kopman disputing his authority to
act on behalf
of the second respondent at the time. In all the
circumstances, the applicants were entitled to rely on the state
attorney’s
authority to settle the dispute on behalf of both
respondents. The agreement is binding.
[22]
The
fact that the second respondent did not sign the settlement agreement
does not, in the circumstances, invalidate it. As Innes
CJ held in
Woods
v Walters
[7]
:
“
The
broad rule is that writing is not essential to the validity of a
contract. The consensus of parties need not be so evidenced.
There
are certain definite exceptions to that rule, but none which affect
the present dispute. The parties may of course agree
that the
contract shall not be binding until reduced to writing and signed,
and if they so agree there will be no vinculum between
them until
that has been done. But the mention of a written document during the
negotiations will be assumed to have been made
with a view to
convenience of record and facility of proof of the verbal agreement
come to, unless it is clear that the parties
meant that the writing
should constitute the contract. That was the rule laid down by this
court in
Goldblatt v Fremantle
(1920 AD 128)
and it is based on ample authority. It follows of
course that where the parties are shown to have been ad idem as to
the material
conditions of the contract, the onus of proving an
agreement that legal validity should be postponed until the due
execution of
a written document, lies upon the party who alleges it.”
[23]
Even though the written agreement in this
case refers to “signatories” and makes provision for both
respondents to sign
it, it simply embodies the agreement already
reached between the state attorney and the applicants’
attorney.
Conclusion
[24]
In all these circumstances, I am persuaded
that the settlement agreement is binding on the second respondent.
[25]
The applicant also asked for ancillary
relief flowing from the settlement agreement. It will be prudent to
grant that relief. Failing
to do so will only lead to further
litigation and further unnecessary costs.
[26]
With regard to costs, I take into account
that all five cases forming the subject matter of the present dispute
are essentially
identical. As long ago as November 2012, Mr
Weir-Smith proposed to Mpoyana Ledwaba that only one matter be set
down for hearing,
with the result in that matter to be applied
equally to the other four, with a view to saving costs. The second
respondent refused.
It is only on the day that all five matters were
set down for hearing that the second respondent’s legal
representatives
agreed to the sensible approach suggested to them
more than two years earlier. The second respondent must be held
liable for the
costs in each application.
Order
I therefore grant an
order in the following terms:
26.1
The settlement agreement dated 22 September
2011 (annexure “L” to the founding affidavit is made an
order of court.
26.2
The respondents are ordered to provide to
the applicants the quantified settlement amounts, together with their
calculations, as
well as the calculations of the pay progression
referred to in paragraphs 2.2, 2.3 and 2..4 of the settlement
agreement.
26.3
The second respondent is ordered to pay the
applicant’s costs in each application.
Steenkamp
J
APPEARANCES
APPLICANT:
F van der Merwe
Instructed
by Martins Weir-Smith.
SECOND
RESPONDENT: M M Rip SC (with him M B Matlejoane)
Instructed
by Mpoyana Ledwaba Inc.
[1]
Act 66 of 1995 (LRA).
[2]
Where I refer to “both respondents”, I mean the first
and second respondents.
[3]
His underlining.
[4]
Hlobo
v Multilateral Motor Vehicle Accident Fund
2001
(2) SA 59
(SCA) par 10-11.
[5]
MEC
for Economic Affairs, Environment and Tourism, Eastern Cape v
Kruizenga
2010
(4) SA 122
(SCA) paras 9-20.
[6]
Kruizenga
(supra)
para
20 [per Cachalia JA].
[7]
1921 AD 303.
See also
Pillay
v Shaik
[2009]
2 AllSA 435
(SCA);
SOS-Kinderdorf
International v Effie-Letin Architects
1991 (3) SA 574
(Nm).