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[2018] ZALCCT 40
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Schloemann v Goldstone Resources Ltd (C 658/16) [2018] ZALCCT 40 (13 December 2018)

REPUBLIC
OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE
L
ABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
C
ase
no: C 658/16
In
the matter between:
HENDRIK
SCHLOEMANN
Applicant
and
GOLDSTONE
RESOURCES LTD
Respondent
Heard
:
29-31 October; 19 November 2018
Delivered
:
13 December 2018
Summary:
Contractual claim – dispute whether employee resigned or was
dismissed – claim arising from contract of employment.
JUDGMENT
Introduction
[1]
This dispute arises from an extraordinary set of circumstances. It is
common cause that the employment relationship between
a former
director of GoldStone Resources Ltd, Dr Hendrik Schloemann, and the
company came to an end – on six months’
notice – on
20 November 2014 in Accra, Ghana. He says he was dismissed; the
company says he resigned. But neither party put
anything in writing
at the time. Four years later, two former directors of the company
(including the applicant) claim that he
was dismissed and is entitled
to certain contractual payments; the other two say that he resigned
and is entitled to nothing. In
other words, two directors of a
multimillion Rand international company are not telling the truth.
That doesn’t say much
for corporate governance; but that is the
conundrum that the Court faces.
Common cause background
facts
[2]
Dr Hendrik Schloemann entered into a contract of employment with the
respondent, GoldStone Resources Ltd, on 28 November 2013
at Waterval
Boven. Schloemann, a geologist, was appointed as exploration
director, reporting to the CEO. GoldStone is a public
mining
exploration company. It is registered in Jersey (Channel Islands) but
the parties agreed that they are subjected to this
Court’s
jurisdiction. The company conducts mining exploration
internationally, but principally on the Gold Coast of Africa.
[3]
The contract of employment recorded that Schloemann’s
employment had already started in September 2011 and would continue

indefinitely, subject to the clauses in the contract. His
remuneration was set at $210 000 (US Dollars) per year. Clause
13.1 reads:
“
TERMINATION
OF EMPLOYMENT BY NOTICE
Save
as otherwise provided for herein, either GoldStone or the Exploration
Director shall be entitled to terminate this agreement
on 3 (three)
calendar months’ written notice to the other, provided that if
the Exploration Director’s employment is
terminated unfairly or
without agreement or he is retrenched, the Exploration Director shall
receive all his benefits of employment
for a period of 12 months
after his employment terminated.”
[4]
The folly of drafting in the passive voice will become apparent
later. But it is further recorded that the contract of employment
is
the entire agreement between the parties “and save as otherwise
provided no amendment, alteration, addition or variation
will be of
any force of [
sic
] effect unless reduced to writing and signed
by the parties to this agreement.” It also records:
“
No
agreement varying any of the terms and conditions will be of any
force or effect unless contained in writing and signed by the

parties.”
[5]
Schloemann and the company did not amend the agreement in writing and
sign any such amendment.
[6]
A new shareholder, Stratex International PLC – a British
company – invested £1,25 million in the company and

acquired a 33,45 % shareholding. On 14 October 2014 the company
issued a circular regarding a proposed share consolidation.
Schloemann
was a director at the time. On 9 October 2014 he signed a
“responsibility letter” referring to the circular. He
acknowledged
that, as a director, he was required to take
responsibility for the information in the circular. The circular
recorded that, with
effect from the “date of admission” –
being 31 October 2014 – his salary would be reduced from
$210 000
to $140 000 per year. Schloemann resigned as a
director – but not an employee – with effect from 30
October 2014.
[7]
On 20 November 2014 at Accra, Ghana, Dr Schloemann’s contract
of employment was terminated on six months’ notice.
Whether he
resigned or was dismissed, is the central dispute in this matter. He
continued working for GoldStone and was paid a
salary (calculated at
$140 000 per year) until the end of May 2015.
The claim
[8]
Dr Schloemann claims the
following in terms of s 77(3) of the BCEA
[1]
:
8.1
Payment of $35 000, being the balance of his remuneration due to
him for the six months from December 2014 to May 2015,
on the basis
that he had not agreed to a reduction in his salary from $210 000
to $140 000 per year.
8.2
Payment of $210 000, being his annual remuneration, based on
clause 13.1 of his contract of employment.
8.3
Interest at the rate of
15,5%
a
tempore morae
until
date of payment
[2]
.
[9]
The claim of $210 000 is based on the applicant’s claim
that the company terminated his employment unfairly or retrenched

him, activating the clause that he “shall receive all his
benefits of employment for a period of 12 months after his employment

terminated”.
The response
[10]
The company’s case is that Schloemann agreed that his salary
would be reduced to $140 000 per year. With regard to the
termination
of his employment, it pleaded:
“
Subsequently,
and on or about [
sic
]
20 November 2014 and in Ghana, applicant and respondent
orally
agreed
[3]
that:
1.
Applicant would resign from respondent’s employ, which
resignation was accepted by respondent;
2.
Applicant would, however, continue in the service of respondent for a
period of 6 months,
inter alia
in order to assist with the
implementation and completion of certain projects in which applicant
was at the time involved.
3.
Applicant was employed by respondent and was paid the remuneration
due to him up to the end of May 2015.
4.
Applicant’s employment was accordingly terminated
by
agreement
, within the meaning of clause 13.1 of applicant’s
employment agreement, and applicant is accordingly not entitled to
the
12-month employment benefits stipulated in clause 13.1.”
The application to amend
[11]
After the current CEO of the company, Ms Emma Priestley, had
testified, and after both parties had closed their cases, the
company
brought an application to amend their statement of response. That was
necessitated by Ms Priestley’s concession that
the parties had
not agreed to terminate the employment relationship. Instead, she
testified that he had resigned; and that his
unilateral resignation
had not been discussed at the board meeting on 20 November 2014. She
conceded that the applicant and respondent
had not orally agreed that
he would resign.
[12]
The respondent accordingly applied to amend paragraph 12 of its
statement of response as follows:
“
Subsequently,
and on or about [
sic
]
20 November 2014 and in Ghana, applicant resigned from respondent’s
employ. Such resignation did not require the acceptance
or
concurrence of respondent in order for such resignation to be legally
effective but in any event, such resignation was tacitly
accepted by
respondent.”
[13]
The applicant objected to the proposed amendment.
[14]
I agree with the applicant that, to allow the amendment at this late
stage after all the evidence has been led, would be prejudicial
to
it. The defence that the respondent now wishes to introduce is
entirely different to its stance throughout since it filed its

previous amended statement of response two years ago, on 13 December
2016, and contrary to the case that the applicant came to
meet in his
evidence. It is also contrary to the case that the respondent set out
in the pre-trial minute that its attorney signed
on 8 August 2017.
[15]
As Mr
Stelzner
pointed out, to suggest that the belated
Priestley defence was supposedly in any event apparent to the
applicant is to put the cart
before the horse; it may even be begging
the question. The respondent’s defence must be determined with
reference to the
case it has pleaded and not the other way round. The
pleaded case is not to be determined by the evidence.
[16]
The application to amend is refused.
The disputed facts and
the evidence
[17]
Dr Schloemann started with leading the evidence in support of his
claim. He subpoenaed the CEO of GoldStone at the time of
termination,
Mr Jurie Wessels. The company called two witnesses: A director at the
time, Mr Christopher Hall; and the current CEO
and then director, Ms
Emma Priestley. It did not call the other director, Dr Robert Foster,
who came to court from abroad and attended
the proceedings
throughout. And neither party called the person who took the minutes
at the eventful board meeting on 20 November
2014, Mr Jacques
Coetzer.
Dr Schloemann
[18]
Herr Dr Schloemann struck the Court as a credible, albeit at times
diffident, witness.
[19]
He testified that he was, in principle, amenable to a reduction in
salary; but he had not finally agreed to a change in his
terms and
conditions of employment. He did not sign an amended contract of
employment; in fact, by the time he left in May 2015,
no-one had
signed amended contracts. He did agree to resign as a director and he
did so in October 2014, shortly before the share
consolidation.
However, he never intended to resign as an employee.
[20]
Dr Schloemann was adamant that he did not resign after the board
meeting in Accra on 20 November 2014. Instead, Wessels conveyed
to
him after the Board meeting and at the pool deck that the new
directors wanted him to go on six months’ notice. He was
“shell
shocked”. He would not have resigned voluntarily: he had just
bought a new house in Camps Bay that was subject
to a mortgage bond;
he had young children; and the poor state of the mining industry
would make it difficult for him to find a
new job as a geologist. In
cross-examination, he explained that he accepted his fate: it became
clear to him that the new directors
wanted Peter Turner to take over
his role and that he was no longer needed.
[21]
Schloemann testified that he was only spurred into action to contest
his dismissal after Hall had sent an email to Coetzer
in April 2016
referring, for the first time, to his purported resignation.
Schloemann had written to Jacques Coetzer, the General
Manager, and
to Daniel Ellis to enquire about unemployment insurance. Under the
subject heading, “UI-19”, he wrote:
“
I
have been reading on the internet about this. I should have been
claiming within six months of my last day, but exceptions can
be made
and unemployment funds can be paid even if an application is made
after six months have expired. In order to enquire if
I still qualify
I would have to go in person to the Labour Department. I would do
that once I have a UI – 19 in my hands.
Can you issue one to
me?”
[22]
Almost a month later, Coetzer forwarded the email to Hall. Hall
replied on 18 April 2016:
“
Dear
Jacques
I
have no problem in getting a form to Hendrick [
sic
] if this is
possible so long after the event. Clearly this was an admission by
Jurie.
My
understanding is that Hendrick became uncomfortable with his position
and resigned, finishing once his 6 months “protection”

expired.
Provided
the form says he resigned, and you and/or Emma go ahead please?”
[23]
Coetzer forwarded the response to Schloemann and said: “Once
Emma is back in South Africa I will ask her to sign on behalf
of
Christopher”. Schloemann replied: “That’s great.
Keep me in the loop.”
[24]
As to why he had waited so long before referring this claim to this
Court, Schloemann’s response was that he had resigned
himself
to his fate at the time of his dismissal; and it was only once Hall
had alleged that he had resigned that he saw fit to
seek legal
advice. He thought that he had compromised his legal position by
agreeing in principle to a new employment contract
(that never came
to fruition) in the future; it was only once he consulted his
attorneys that he was advised otherwise.
Wessels
[25]
Jurie Wessels, whom the applicant had subpoenaed to testify, was the
CEO of GoldStone before the Stratex share acquisition.
He attended
the fateful board meeting at the Golden Tulip hotel in Accra, Ghana
on 20 November 2014 in that capacity. The other
three directors in
attendance were the two newly appointed Stratex non-executive
directors, Bob Foster and Emma Priestley; and
the non-executive
chairman, Christopher Hall. Jacques Coetzer recorded the minutes. By
that time, Schloemann was no longer a director.
[26]
Wessels corroborated Schloemann in all material respects. He
testified that Hall had asked him – during the Board meeting
--
to convey to Schloemann that he (Schloemann) had to leave the company
by the end of May 2015, i.e. on six months’ notice.
Hall had
also asked Jacques Coetzer not to minute that decision.
[27]
After the Board meeting, Wessels approached Schloemann and told him
that the Board did not want him any longer. The Board wanted
“a
new pair of eyes” and they wanted to save costs. Schloemann
appeared very stressed when Wessels conveyed this decision
to him but
it looked like he resigned himself to what had been decided. The “new
pair of eyes” referred to Dr Peter
Turner, the Australian
geologist that the new Stratex directors had brought in as a
consultant.
[28]
On 6 October 2014 Wessels had sent an email to W H Ireland Ltd, a
nominated advisor (colloquially referred to as a Nomad) including
a
table of employment terms for GoldStone. That table recorded the
following:
“
If
Hendrik does not want to accept [revised terms of employment]: He
will have to work a maximum 3 month notice period (or such
reduced
period required by the company) and will receive a further 3 month
payment as a retrenchment package.”
[29]
Wessels reiterated that Schloemann did not resign: he never signed an
amended contract of employment, and if he had resigned,
he would have
given three months’ notice. Instead, the Board terminated his
services on six months’ notice.
[30]
Wessels also testified about the Circular of 14 October 2014. He
pointed out that it referred to “proposed changes”
to the
management team’s terms of employment. Hendrik Schloemann had
not agreed to those changes. The Circular also recorded:
“
The
existing service agreements of the executive directors are terminable
on not less than 3 months’ prior written notice
given by either
the Director or the Company, provided that a director is
contractually entitled to continue to receive his salary
for a period
of 12 months if his employment is terminated unfairly.”
“
No
amendments have been made to the directors’ service contracts
within six months of the date of this document, but the following

changes are proposed to take effect on admission
[4]
:
…
Hendrik
Schloemann’s salary will be reduced to US $140 000 per
annum, provided that the Company may not serve notice
of termination
on Dr Schloemann without cause within the six months following
admission.”
[31]
Under cross-examination Wessels clarified that he was not sure
whether it was during the Board meeting or after it had officially

adjourned that the decision about Schloemann’s termination was
conveyed to him; but the directors were still sitting around
the
table at the hotel. Hall, Foster and Priestley were all present. The
decision was not minuted. Hall indicated that it would
be
“embarrassing” if it had to appear in the minutes.
Wessels did not approve of the decision, but he was simply told
to
convey it to Schloemann. Wessels was astonished when he was told of
the decision.
[32]
Wessels struck me as an honest and straightforward witness. His
evidence that he was “astonished” when Hall conveyed
the
Board’s decision to him, had the ring of truth. Even though he
had had his differences with Schloemann in the past, he
was clearly
embarrassed by the way the new directors had treated Schloemann while
he (Wessels) was still the CEO. And it must be
borne in mind that
Wessels testified under subpoena. He was arguably the most neutral
and credible witness before the Court.
Hall
[33]
Hall was adamant that Schloemann had resigned, and that the
termination of his employment did not form part of the discussions
at
the board meeting. It was only after the meeting had adjourned that
Wessels came to tell him that Schloemann had decided to
leave.
[34]
Hall made notes on the agenda for the board meeting. On the whole,
these corresponded with the brief minute of the meeting:
for example,
it included annotations regarding a “detailed review by P
Turner” on Homase/Akrokerri exploration strategy
for the
ensuing year; staff requirements; the appointment of a broker; and
the remuneration and audit committees. Inexplicably,
he had also made
the following handwritten note: “Hendrik 6 mths from 1/12”.
He could not adequately explain why he
would make that annotation on
the agenda for the board meeting if Schloemann’s termination
had not been discussed at that
meeting; nor does it support the
allegation that Schloemann resigned, given that clause 13.1 of the
employment contract requires
three months’ written notice.
[35]
Hall was also at a loss to explain why Schloemann’s purported
resignation was not recorded in the minutes of the next
board meeting
on 12 February 2015. And the “agreement” that GoldStone
relies on is not recorded anywhere, either in
the two sets of minutes
– or any other minute – or in any contemporaneous
correspondence. And Hall’s explanation
that he made the
annotation on the agenda of the Board meeting (“Hendrik 6 mths
from 1/12”) does not ring true. He
had made all the other
annotations during the Board meeting. It is improbable that he would
make that annotation afterwards, when
the meeting had already
adjourned, and when Wessels called him aside informally.
[36]
In fact, the only noteworthy remotely contemporaneous correspondence
is an email from Hall to Schloemann a month after the
Accra meeting,
on 24 November 2014, under the subject line, “The future”:
“
Dear
Hendrick
I
wanted to thank you personally for your efforts on the recent visit
to Ghana.
It
was a difficult situation and the outcome will obviously make life
difficult for you and your family.
Knowing
this, your helpful and professional approach did not go unnoticed let
me assure you.
I
know you are aware that we have to ensure that the shareholders of
Stratex and Goldstone get the maximum benefit out of our investment.

In more bullish times this can be less important but it is critical
now.
I
am sure we can count on your continued support and assistance while
you are still with us and I wish you every success in finding
another
role where your experience can be put to good use.
I
hope you are now well recovered.”
[37]
The interpretation to be placed on this email will be considered
further when dealing with the probabilities.
[38]
Hall further testified that they all left for the airport at around
20:00 and that he did not speak to Wessels or Schloemann
again on 20
November 2014.
[39]
Under cross examination, Hall could not explain why Schloemann’s
resignation was not recorded in any letter from the
Company, nor in
the minutes of the next Board meeting, nor in any statement from the
Company.
[40]
Hall often replied that he “had no recollection” of
aspects of the important events of 20 November 2014 –
such as
his annotation that the meeting adjourned at 16:40, whereas the
minutes reflect 16:00 – or that he had “no
idea”
what was discussed when. He was not an impressive witness.
Priestley
[41]
Ms Emma Priestley, the current CEO, was a very confident witness. But
her credibility was undermined by her contradicting the
respondent’s
own pleadings.
[42]
Ms Priestley conceded that there was no oral agreement between the
parties in Accra on 20 November 2014 that Schloemann would
resign,
and that the resignation was accepted by the respondent. Instead, she
relied on Schloemann having resigned unilaterally.
She testified that
“we didn’t receive Hendrik’s resignation, nor did
the Board accept it”. She confirmed
that binding agreements and
resolutions needed to be taken by all the directors and that without
all the directors’ buy-in,
there could be no agreement
concluded on behalf of the company; yet the directors had not reached
any such agreement or a solution
at the board meeting of 20 November
2014. When she was referred to the statement in the Company’s
pleadings that the parties
had agreed on 20 November 2014 in Accra
that Schloemann would resign and that the respondent had accepted it,
she replied: “That
is not the truth.” In fact, according
to her, Schloemann’s termination was not discussed by the Board
at all; Hall
had simply informed the two Stratex directors of
Schloemann’s purported resignation. His employment was never
terminated
by agreement.
[43]
There is a clear contradiction between evidence of Hall and that of
Priestley. Neither Foster – who was present in court
throughout
– nor Foster, who was present at the board meeting and could
have shone light on what had happened there, was
called as a witness.
[44]
Priestley also instructed two sets of solicitors in the UK to address
letters to Schloemann on 19 October and 15 December 2016

respectively, alleging that he had made misleading statements in the
circular of October 2014. In those letters, neither firm of
attorneys
mentions Schloemann’s purported resignation.
Evaluation
[45]
If one had to speculate, the following is perhaps the most likely
scenario of what happened on that Thursday at the hotel pool
in
Accra: the board meeting concluded and was adjourned at 1600. Jacques
Coetzer left. The other board members remained behind.
Hall conveyed
to Wessels that Schloemann had to go. He may not have used the word
“retrenched”, but the clear message
was that Schloemann
had to leave. Wessels went to speak to Schloemann at the pool area
and conveyed the message to him. Schloemann
may not have demurred but
“accepted his fate”, as he put it.
[46]
The problem is that that is not the evidence of either party before
the Court. The Court is faced with contradictory and irreconcilable

versions. Either Schloemann and Wessels are telling the truth, or
Hall and Priestley are. The only certainty is that not all of
them
are.
[47]
The Court is thus left
with the unenviable task of deciding, on the probabilities, where the
truth lies. In so doing, the Court
is mindful of the oft-quoted
technique set out so succinctly by Nienaber JA in
SFW
[5]
:
“
On
the central issue, as to what the parties actually decided, there are
two irreconcilable versions. So too on a number of peripheral
areas
of dispute which may have a bearing on the probabilities. The
technique generally employed by courts in resolving factual
disputes
of this nature may conveniently be summarised as follows.  To
come to a conclusion on the disputed issues a court
must make
findings on (a) the credibility of the various factual witnesses; (b)
their reliability; and (c) the probabilities.
As to (a), the
court’s finding on the credibility of a particular witness will
depend on its impression about the veracity
of the witness. That in
turn will depend on a variety of subsidiary factors, not necessarily
in order of importance, such as (i)
the witness’s candour and
demeanour in the witness-box, (ii) his bias, latent and blatant,
(iii) internal contradictions
in his evidence, (iv) external
contradictions with what was pleaded or put on his behalf, or with
established fact or with his
own extracurial statements or actions,
(v) the probability or improbability of particular aspects of his
version, (vi) the calibre
and cogency of his performance compared to
that of other witnesses testifying about the same incident or
events.  As to (b),
a witness’s reliability will depend,
apart from the factors mentioned under (a)(ii), (iv) and (v) above,
on (i) the opportunities
he had to experience or observe the event in
question and (ii) the quality, integrity and independence of his
recall thereof.
As to (c), this necessitates an analysis and
evaluation of the probability or improbability of each party’s
version on each
of the disputed issues. In the light of its
assessment of (a), (b) and (c) the court will then, as a final step,
determine whether
the party burdened with the onus of proof has
succeeded in discharging it. The hard case, which will doubtless be
the rare one,
occurs when a court’s credibility findings compel
it in one direction and its evaluation of the general probabilities
in
another. The more convincing the former, the less convincing will
be the latter. But when all factors are equipoised probabilities

prevail.”
[48]
And, as stated by Horwitz
J in
Garzouzie
v Smith
:
[6]
“
Waar
daar twee verhale voor ‘n verhoorhof afgelê is wat
regstreeks met mekaar bots, waar nòg die een nòg
die
ander verhaal teenstrydighede bevat, waar die waarskynlikhede nie die
een of ander begunstig nie en waar die een of die ander
verhaal nie
verwerp word òf op grond van geloofwaardigheid òf om
enige ander gegronde redes nie, dan moet die enigste
en noodwendige
gevolgtrekking wees dat die party wat met ‘n bewyslas belas is,
hom nie van daardie las gekwyt het nie.”
The onus
[49]
The onus to prove the
contractual entitlement would normally rest on the applicant.
[7]
In
Kriegler
v Minitzer
the
Court quoted with approval this
dictum
from
Phipson
[8]
:
“
[T]he
burden of proof … rests upon the party, whether plaintiff or
defendant, who substantially asserts the affirmative of
the issue.”
…
“
The
true meaning of the rule is that where a given allegation, whether
affirmative or negative, forms an essential part of a party’s

case, the proof of such allegation rests on him.”
[50]
But, as the Court points
out in
Kriegler
,
that rule is not absolute, citing
Wigmore
:
[9]
“
It
is often said that the burden is upon the party having in form the
affirmative allegation. But this is not an invariable test,
nor even
always a significant circumstance; the burden is often on one who has
a negative assertion to prove. A common instance
is that of a promise
alleging non-performance of a contract.”
[51]
In this case, the wording of the contract of employment is common
cause. If it is “terminated unfairly or without agreement
or he
is retrenched, the Exploration Director [Schloemann] shall receive
all his benefits of employment for a period of 12 months
after his
employment terminated.”
[52]
GoldStone claims that the contract was terminated by agreement, hence
the clause does not apply. On which party does the onus
then rest?
[53]
Mr
Stelzner
argued that the ultimate onus rests on the
respondent, as it essentially raises two special defences:
53.1
Variation of the contract of employment in respect of the
remuneration amount; and
53.2
that the parties agreed to the termination of Schloemann’s
employment.
[54]
Mr
Stelzner
relied in this regard on
the various meanings of
onus
probandi
considered
in
Pillay
v Krishna
[10]
:
“…
the
only correct use of the word
onus
is that
which I believe to be its true and original sense (cf Dig 31.22),
namely, the duty which is cast on the particular litigant,
in
satisfying the court that he is entitled to succeed on his claim, or
defence, as the case may be, and not in the sense merely
of his duty
to produce evidence to combat a
prima
facie
case made by his opponent … where there are several and
distinct issues,… then there are several distinct burdens
of
proof, which have nothing to do with each other, save of course, that
the second will not arise until the first has been discharged…

The
onus
,
in the sense in which I use the word, can never shift from the party
upon whom it originally rested. It may have been completely

discharged once and for all, not by any evidence which he has led,
but by some admission made by his opponent… so that he
can
never be asked to do anything more in regard thereto; but the
onus
which then rests upon his opponent is not one which has been
transferred to him: it is an entirely different
onus
,
namely, [that] of establishing any special defence which he may
have.”
[55]
In this case, the applicant bases his claim on the contract of
employment. The respondent bases its defence on an agreed
termination.
I accept that, once the applicant had discharged the
onus of proving the contract, the onus rests on the respondent to
prove the
agreement to terminate as well as the agreed reduced
remuneration.
[56]
The claim and the defence
in this matter seem to me to be analogous to those in
Da
Mata v Otto NO.
[11]
In that case, the
respondent (in the appeal) instituted proceedings against the
appellant for non-payment of purchase price in terms
of an agreement
of sale payable in regular monthly instalments. In his plea the
appellant alleged that he had concluded a verbal
agreement in terms
of which he was relieved of the obligation to make regular monthly
payments in respect of the purchase price.
The Appellate Division
held
[12]
:
“
The
respondent’s case is based on undisputed documentary evidence
to which the appellant raised a defence which constitutes
a separate
and distinct issue from the respondent’s claim. The burden of
proof of this defence is distinct from the burden
which rests on the
respondent to prove her claim. The onus is therefore on the appellant
to prove his defence.”
[57]
Mr
Stelzner
also
referred the court to
Cotler
v Variety Travel Goods (Pty) Ltd
[13]
where the appellant shoot
the respondents for breach of a written contract in terms of which he
was entitled to three months’
notice of termination of his
employment. In their plea the respondents relied on oral agreement
allegedly cancelling the written
agreement. The court held that the
respondents for the onus of proving the oral agreement that the
alleged in their plea, stating:
“
The
averment that the plaintiff had contracted out from notice of
termination of his employment forms an essential part of Variety’s

case that the plaintiff’s employment was wilfully terminated.
No other form of lawful termination is relied upon. In my opinion,

therefore, the incidence of onus in relation to the defence pleaded
by Variety is governed by the second principle referred to
by Davis
AJA in
Pillay
v Krishna, supra
at
951. The oral agreement relied upon is in effect a special plea, and
the onus of proof
quoad
that
defence would rest on Variety. The third rule referred to by Davis
AJA at 952 of the judgement also lends support to this conclusion.
If
the onus in regard to the oral agreement with the rest of the
plaintiff, he would be required to prove a negative, namely, that
he
did not conclude the oral agreement in question. This test is, of
course, not an absolute one, but in the circumstances of this
case it
would seem to be appropriate. It was not essential to the plaintiff’s
case to prove that he did not enter into any
agreement affecting his
rights in terms of the written agreement with variety. On the
contrary, the elected oral agreement is an
essential part of
Variety’s case.”
[58]
The same principles apply to the case before this Court.
[59]
The applicant bears the onus of proving the terms of the employment
contract. The respondent bears the onus of proving a variation

agreement with regard to remuneration; and an agreement to terminate
the applicant’s employment.
Documentary evidence
[60]
The applicant’s
claim is a contractual claim. Essentially he claims specific
performance
[14]
of his
contract of employment that provides for the payment of 12 months’
remuneration if it is terminated without agreement.
[61]
As set out above, the contract included a non-variation clause. It
recorded that it is the entire agreement between the parties
“and
save as otherwise provided no amendment, alteration, addition or
variation will be of any force of [sic] effect unless
reduced to
writing and signed by the parties to this agreement.” It also
records:
“
No
agreement varying any of the terms and conditions will be of any
force or effect unless contained in writing and signed by the

parties.”
[62]
As explained by the SCA
in
Brisley
v Drotsky
[15]
,
referring
to what the late Professor JC de Wet called “die dwangbuis van
die
Shifren
[16]
-beginsel”,
a contract that has been entered into freely must be enforced.
Cameron JA held:
[17]
“
What
is evident is that neither the Constitution nor the value system it
embodies give the courts a general jurisdiction to invalidate

contracts on the basis of traditionally perceived notions of
unjustness or to determine their enforceability on the basis of
imprecise
notions of good faith. On the contrary, the constitutional
values of dignity and equality and freedom require that the courts
approach
their task of striking down contracts or declining to
enforce them with perceptive restraint. One of the reasons, as Davis
J has
pointed out, is that contractual autonomy is part of freedom.
Shorn of its obscene excesses, contractual autonomy informs also the

constitutional value of dignity.”
[63]
The documentary evidence
must be interpreted in the light of the principles set out by the SCA
in
Bothma-Batho
[18]
and
Endumeni
Municipality
[19]
:
“
The
present state of the law can be expressed as follows. Interpretation
is the process of attributing meaning to the words used
in a
document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading
the
particular provision or provisions in the light of the document as a
whole and the circumstances attendant upon its coming
into existence.
Whatever the nature of the document, consideration must be given to
the language used in the light of the ordinary
rules of grammar and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material
known to those
responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the
light of all these
factors.  The process is objective not subjective. A sensible
meaning is to be preferred to one that leads
to insensible or
unbusinesslike results or undermines the apparent purpose of the
document. Judges must be alert to, and guard
against, the temptation
to substitute what they regard as reasonable, sensible or
businesslike for the words actually used. To
do so in regard to a
statute or statutory instrument is to cross the divide between
interpretation and legislation. In a contractual
context it is to
make a contract for the parties other than the one they in fact made.
The ‘inevitable point of departure
is the language of the
provision itself’, read in context and having regard to the
purpose of the provision and the background
to the preparation and
production of the document.”
[64]
The Constitutional Court
further held (when dealing with constitutional interpretation) in
Afriforum
v University of the Free State:
[20]
“
Some
of those key interpretive aides that have by now become trite are the
textual or ordinary grammatical meaning, context, purpose
and
consistency with the Constitution.  Context comes into operation
where the ordinary grammatical meaning is not particularly
helpful or
conclusive. And contextual interpretation requires that regard be had
to the setting of the word or provision to be
interpreted with
particular reference to all the words, phrases or expressions around
the word or words sought to be interpreted.
This exercise might
even require that consideration be given to other subsections,
sections or the chapter in which the key word,
provision or
expression to be interpreted is located.   The meanings and
themes emerging from that reflection would then
reveal the overall
thrust that cannot justifiably be veered away from.”
[65]
In this case, it is unfortunate that the parties drafted clause 13.1
of the employment contract. But if the Court has regard
to the
context and attempts to give a businesslike interpretation to the
clause, the phrase “that if the Exploration Director’s

employment is terminated unfairly or without agreement or he is
retrenched” must surely mean that it is the employer who

terminates the contract unfairly or without notice. I do not agree
that the clause could also mean that the employee – i.e.
Dr
Schloemann – could also terminate the agreement (i.e. resign)
and still claim 12 months’ benefit. Not only would
that lead to
an absurd result, it is also not in line with the other contextual
examples, i.e. unfair dismissal and retrenchment.
[66]
Mr
Oosthuizen
argued
in the alternative that the 12 months’ remuneration clause is
excessive and in contravention of the Conventional Penalties
Act.
[21]
Section 1 of that Act describes a penalty as a stipulation whereby it
is provided that any person shall, in respect of an act or
omission
in conflict with a contractual obligation, be liable to pay a sum of
money to another person. But the clause in question
is not a penalty
or pre-estimate of damages. It is merely an agreement that, if the
employer dismisses the employee, it will continue
paying him his
benefits for a further 12 months. The extent of the prejudice to the
employer is not such that the Court should
reduce the agreed amount.
The probabilities
[67]
In order to consider the probabilities, the Court has to consider the
credibility of the witnesses.
[68]
When one looks at the probabilities, Hall’s credibility
falters. It is improbable that he would have noted “Hendrik
6
mths from 1/12” on the Board meeting agenda that he was using
at the meeting to make other annotations, if Wessels had
simply
pulled him aside afterwards to told him of Schloemann’s own
decision to resign. And why would Schloemann resign on
6 months’
notice if he only had to give three months’ notice? Hall could
also not explain why the purported resignation
was not recorded
anywhere, either at the time or after the fact.
[69]
Even when Hall wrote to Schloemann four days afterwards, on 24
November 2014, he did not mention his purported resignation.
Instead,
he referred to “a difficult situation” and said that “the
outcome will obviously make life difficult
for you and your family”.
That does not smack of a senior employee that decides to resign of
his own free will. Hall’s
evidence to the contrary is not
credible.
[70]
Priestley was also not a credible witness. Her credibility falters at
the first hurdle: Having regard to the factors outlined
by Nienaber
JA in
SFW
, there are internal contradictions in her evidence
and external contradictions with what was pleaded on her behalf. She
is the
CEO. She confirmed that GoldStone litigated on her
instructions. Yet she contradicted the pleaded case that the parties
agreed
on a mutual termination on that fateful day in Accra. The
belated application to amend – after she had testified and
after
both parties had closed their respective cases – only
serves to undermine her credibility further. For two years after
having
delivered the statement of claim and more than a year after
having confirmed the “agreement” defence in the pre-trial

minute, she did not instruct the company’s attorneys to amend;
it is only in her evidence before this Court, for the first
time,
that her evidence changed. And that was after both Schloemann and
Wessels had testified, and the “agreement”
defence had
been put to them.
[71]
On the probabilities, the applicant must succeed in the remuneration
claim, as set out below. But should that be based on remuneration
of
$210 000 or $140 000?
The claim for short
payment
[72]
Did Dr Schloemann agree to a reduction in his annual remuneration
from $210 000 to $140 000?
[73]
It is common cause that the parties did not amend the contract of
employment in writing; nor did they sign an amended contract.

Instead, the respondent relies upon the information in the October
2014 circular, and the responsibility letter in which the applicant

confirms its accuracy.
[74]
The applicant argued that, although he was being paid at eh reduced
rate until May 2015 when he left the respondent’s
employ, he
had only agreed thereto in principle. That was part of the ongoing
negotiations with a view to reaching agreement to
new contracts of
employment in their entirety; but it is common cause that Hall had
not signed off on the new contracts by the
time he left.
[75]
Mr
Oosthuizen
relied
on the circular and the letter of responsibility for the argument
that the parties did agree to a reduction in remuneration,
albeit in
documents other than the contract of employment. He referred to
Spring
Forest Trading
[22]
as authority for this
argument. In that case, the SCA accepted that, despite a
non-variation clause, the parties did effect a “consensual

cancellation” by email. On the facts, it concluded
[23]
:
“
There
is no dispute regarding the reliability of the emails, the accuracy
of the information communicated or the identities of the
persons who
appended their names to the emails. On the contrary, as I have found
earlier, the emails clearly and unambiguously
evinced an intention by
the parties to cancel their agreements. It ill-behoves the
respondent, which responded to clear questions
by email itself, to
now rely on the non-variation clauses to escape the consequences of
its commitments made at the meeting on
25 February 2013 which were
later confirmed by email.”
[76]
Before considering the
facts, Cachalia JA pointed out
[24]
:
“
Before
I consider these it is necessary to remind ourselves that when
parties impose restrictions on their own power to vary or
cancel a
contract – as they did in this case – they do so to
achieve certainty and avoid later disputes. The obligation
to reduce
the cancellation agreement to writing and have it signed was aimed at
preventing disputes regarding the terms of the
cancellation and the
identity of the parties authorised to effect it. Our courts have
confirmed the efficacy of such clauses.”
[77]
Despite that principle,
the Court held – with reference to the provisions of the
Electronic Communications and Transactions Act 25 of 2002
–
that the parties had cancelled the agreement by way of electronic
signatures. The Court added:
[25]
“
The
approach of the courts to signatures has therefore been pragmatic,
not formalistic. They look to whether the method of the signature

used fulfils the function of a signature – to authenticate the
identity of the signatory – rather than insist on the
form of
the signature used.”
[78]
As Mr
Oosthuizen
pointed
out, where a contract is required to be in writing, it can be
contained in more than one document.
[26]
Using a pragmatic rather than formalistic approach, I fail to see why
the same principle cannot be applied to amendments, as long
as it
evinces a clear intention by the parties to vary an agreement.
[79]
The responsibility letter is signed by the applicant. It incorporates
the circular. And it records that various changes are
proposed to
take effect on admission (i.e. 31 October 2014). One of these
proposed changes is that Dr Schloemann’s salary
“will be
reduced to US $140 000 per annum provided that the company may
not serve notice of termination on Dr Schloemann
without cause within
the 6 months following admission”. Bizarre as it is that the
proposal contemplates termination “without
cause”, that
is what the applicant signed. Does that translate into an agreement
to vary his contract of employment?
[80]
Apart from the responsibility letter, Schloemann also signed the
Board minutes of 13 October 2014. He was still a director
at the
time. And, referring to the circular, it records:
“
Each
director confirms that he had read and carefully considered the
Circular and was fully aware of its contents and of the
responsibilities
which he had in relation to it and confirmed that,
to the best of his knowledge, information and belief, having taken
all reasonable
care to ensure that such is the case, the information
contained in the Circular was in accordance with the facts and did
not omit
anything likely to affect the import of such information.
These terms were reflected in the responsibility letter is signed by
each director and by each director of Stratex produced to the meeting
at minute 5 above.”
[81]
The proviso – “provided that the company may not serve
notice of termination on Dr Schloemann without cause within
6 months
after admission” – may well lead to a Catch-22, given
that (as will appear below) this Court finds that the
company did
terminate Dr Schloemann’s employment without cause within six
months. But I do not think that invalidates the
agreement –
albeit outside of the four corners of the employment contract –
to reduce his remuneration. Not only did
he sign off on the circular,
the responsibility letter and the minutes, he accepted the reduced
remuneration without demur until
he left in May 2015. It is only in
these proceedings that he challenges it for the first time.
[82]
It appears to me on the
facts that there was partial agreement to change the terms and
conditions of employment, at least with regard
to the reduction in
remuneration. As Corbett JA remarked in
Pitout
v Northern Livestock Cooperative Ltd
[27]
:
“
The
question which arises, accordingly, is whether the undertaking given
as it was during the course of uncompleted negotiations,
had, or has
been shown to have had, contractual force. Was the undertaking an
offer made,
animo
contrahendi
,
which upon acceptance would give rise to an enforceable contract, or
was it merely a proposal made by the appellant while the
parties were
in the process of negotiating and feeling their way towards a more
precise and comprehensive agreement? This is essentially
a question
to be decided upon the facts of the particular case.”
[83]
That
dictum
is
echoed – Corbett JA, again – in
GKN
Sankey
:
[28]
“
As
WATERMEYER ACJ remarked in
Reid
Bros (South Africa) Ltd v Fischer Bearings Co Ltd
,
1943 AD 232
, at p 241, ‘...a binding contract is as a rule
constituted by the acceptance of an offer’. Despite Mr
Osborn
's
submissions to the contrary, I am satisfied that the tender of 15
June, together with the written addendum of 20 June, constituted
an
offer made animo contrahendi by the respondent.
…
“
There
is no doubt that where in the course of negotiating a contract the
parties reach an agreement by offer and acceptance, the
fact that
there are still a number of outstanding matters material to the
contract upon which the parties have not yet agreed may
well prevent
the agreement from having contractual force. A good example of this
kind of situation is provided by the case of
OK
Bazaars v Bloch, supra
(see also
Pitout
v North Cape Livestock Co-operative Ltd, supra
).
Where the law denies such an agreement contractual force it is
because the evidence shows that the parties contemplated that

consensus on the outstanding matters would have to be reached before
a binding contract could come into existence (see
Pitout
's
case, supra, at p 851 B-C). The existence of such outstanding matters
does not, however, necessarily deprive an agreement of
contractual
force. The parties may well intend by their agreement to conclude a
binding contract, while agreeing, either expressly
or by implication,
to leave the outstanding matters to future negotiation with a view to
a comprehensive contract. In the event
of agreement being reached on
all outstanding matters the comprehensive contract would incorporate
and supersede the original agreement.
If, however, the parties should
fail to reach agreement on the outstanding matters, then the original
contract would stand. (See
generally Christie,
The
Law of Contract in South Africa
,
pp 27-8.) Whether in a particular case the initial agreement acquires
contractual force or not depends upon the intention of the
parties,
which is to be gathered from their conduct., the terms of the
agreement and the surrounding circumstances (see
Pitout
's
case, supra, at p 851 D-G).
[84]
In this case, the parties had not negotiated a new contract of
employment to finality. But I find that the parties did agree
to the
reduction in remuneration. That, in turn, impacts on the remuneration
due to him – if any – in terms of clause
13.1 of the
contract of employment.
The claim for 12 months’
remuneration
[85]
In terms of the contract of employment, “if the Exploration
Director’s employment is terminated unfairly or without

agreement or he is retrenched, the Exploration Director shall receive
all his benefits of employment for a period of 12 months
after his
employment terminated.”
[86]
It is common cause that this agreement was not varied in writing and
signed by both parties. The respondent bore at least an
evidentiary
burden to show that it did not apply because the parties agreed to
the termination. On the probabilities, it has not
discharged that
burden.
[87]
I have already touched on the credibility of the witnesses. Ms
Priestley was a poor witness, whose credibility was undermined
by the
respondent’s own pleadings. Mr Hall was not impressive either,
and the contradictions between his and Priestley’s
evidence
further undermined their credibility. On the other hand, Dr
Schloemann – albeit somewhat reticent – made a
good
impression. He made concessions where needed. He readily conceded,
for example, that he did not act timeously; but he explained

convincingly that he had “accepted his fate” at the time,
until he saw Hall’s emailed claim that he had resigned.
And as
I mentioned earlier, Wessels was perhaps the most objective witness
of all. He struck the Court as honest and straightforward,
with
nothing to lose and nothing to hide. To use the Afrikaans expression,
“hy het nie doekies omgedraai nie”. And
his testimony
that he was “astonished” when Hall told him that
Schloemann had to go had the ring of truth to it.
[88]
Of course, resignation is
a unilateral act that does not require the employer’s
consent.
[29]
But the
respondent’s case is that there was an agreement between Dr
Schloemann and the Board, not that he resigned unilaterally.
And it
has not shown that there was such an agreement; in fact, its CEO
conceded that there was not.
[89]
On the probabilities, Dr Schloemann would not have resigned, even
when it became apparent to him that the Stratex directors
were
critical of him and were favourably disposed to Dr Turner’s
“new pair of eyes”. He had just bought a new
house. He is
a middle aged white male in a competitive industry where it would be
difficult to find a new job at comparative remuneration.
He had
educational commitments to a young family. And it is improbable that
he would not have offered his resignation in writing.
Hall’s
email shortly after the events of 20 November in Accra, that “the
outcome” would “make life difficult”
for Schloemann
and his family also points, on the probabilities, to him having been
dismissed rather than having resigned voluntarily.
And, had he
resigned, it is more probable that the company would have confirmed
that in writing.
Conclusion
[90]
I find that the respondent terminated the applicant’s
employment. The applicant’s claim for 12 months’
remuneration,
based on clause 13.1 of his contract of employment,
succeeds. But that amount must be calculated on the basis of an
annual agreed
salary of US $140 000, 00.
[91]
Both parties asked for costs to follow the result. I see no reason in
law or fairness to differ. The applicant has, on the
whole, been
successful. I deem it fair to order the respondent to pay his costs.
Order
[92]
I therefore make the following order:
92.1
The respondent’s application to amend its statement of response
is refused.
92.2
The respondent is ordered to pay the applicant US $140 000,
which was due on a month to month basis from 1 June 2015 to
31 May
2016; together with interest
a temporae morae
at the rate of
10% per annum calculated from the date on which each of the payments
was due until date of payment.
92.3
The respondent is ordered to pay the applicant’s costs.
Anton
J Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
R G L Stelzner SC
Instructed by Ockie
Kruger
of
MacGregor Stanford Kruger.
RESPONDENT:
A C Oosthuizen SC
Instructed by Gillian
Lumb
of
Cliffe Dekker Hofmeyr Inc.
[1]
Basic
Conditions of Employment Act 75 of 1997
.
[2]
The
interest calculation was done at the prescribed rate of interest at
the time that the applicant filed his pleadings. It has
since
changed.
[3]
My
underlining.
[4]
i.e.
on 31 October 2014.
[5]
SFW
Group Ltd v Martell et cie
2003
(1) SA 11
(SCA) par [5].
[6]
1954
(3) SA 22 (O).
[7]
Kriegler
v Minitzer
1949
(4) SA 821
(A);
Topaz
Kitchens (Pty) Ltd v Naboom Spa (Edms) Bpk
1976
(3) SA 470
(A) 473C-474C.
[8]
Phipson
Evidence
(8
ed) 27.
[10]
1946
AD 951 – 953.
[11]
1972
(3) SA 858 (A).
[12]
At
867G – 868A.
[13]
1974
(3) SA 621 (A) 629 A-E.
[14]
Cf
Abrahams
v Drake & Scull Facilities Management (SA) (Pty) Ltd
(2012)
33
ILJ
1093
(LC).
[15]
2002
(4) SA 1
(SCA) 15G-16F.
[16]
S
A Sentrale Ko-op Graanmaatskappy Bpk v Shifren en Andere
1964
(4) SA 760
(A) 767A.
[17]
Brisley
v Drotsky
par
[93] – [94] (footnotes omitted).
[18]
Bothma-Batho
Transport (Edms) Bpk v Bothma & Seun Transport (Edms) Bpk
2014
(2) SA 494 (SCA).
[19]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) par [18].
[20]
2018
(2) SA 185
(CC) par [43] (footnotes omitted).
[21]
Act
15 of 1962.
[22]
Spring
Forest Trading cc v Wilberry (Pty) Ltd
2015
(2) SA 118 (SCA).
[23]
Par
[29] [per Cachalia JA].
[24]
Par
[13].
[25]
Par
[26].
[26]
Brandt
v Spies
1960
(4) SA 14
(E) 17A;
Hersch
v Nel
1948
(3) SA 686
(A);
Meyer
v Kirner
1974
(4) SA 90 (N) 97 E-F.
[27]
1977
(4) SA 842
(A) 850C-D.
[28]
GCEE
Alsthom Equipments v GKN Sankey (Pty) Ltd
1987
(1) SA 81
(A) 90 D-E and 92 A-F.
[29]
Sihlali
v SABC
(2010)
31
ILJ
1477
(LC) par [11].