THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
Case No: 126/04
REPORTABLE
In the matter between
PRIVEST EMPLOYEE SOLUTIONS (PTY) LTD APPELLANT
and
VITAL DISTRIBUTION SOLUTIONS (PTY) LTD RESPONDENT
Before: Mpati DP, Zulman, Lewis, Jafta et Mlambo JJA
Heard: 12 May 2005
Delivered: 30 May 2005
Summary: Contract – interpretation of – effect of terms in addendum on terms
in main contract – object of rule 33(4) and duty of trial court in
regard thereto restated.
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JUDGMENT
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MLAMBO JA
[1] The interpretation of an agreement is the issue in this case.
The appellant is a labour broker specialising in the outsourcing of
labour and related services. The respondent conducts a
warehousing and road freight business.
[2] The parties concluded a written agreement, on
1 September 1999, in terms of which the appellant undertook to
provide temporary labour, in the form of drivers and their assistants
to the respondent as required by the latter from time to time in the
running of its business. The written agreement consisted of what
was referred to in this Court as the main agreement and an
addendum. It is common cause, however, that though both
documents were signed on the same day neither refers to the other .
[3] From September 1999 to April 2000 the appellant provided
temporary labour to the respondent, and issued invoices totalling an
amount of R1 384 111, 00 to the latter for the services rendered.
The respondent, in turn, paid the appellant an amount of
R994 452, 44 leaving a balance of R389 658, 56. The respondent’s
failure to pay the balance is based on its view that the time sheets
relating to hours, alleged by the appellant to have been worked by
its temporary employees totalling that amount, were not authorised
in terms of and in accordance with the agreement.
[4] The appellant instituted action in the Johannesburg High Court
seeking to recover the balance. At the commencement of the trial
the parties agreed, in terms of rule 33(4) of the Uniform Rules of
Court, that the issues be separated and that the trial court first
determine what was essentially a stated case couched in the
following terms:
‘1. Whether in terms of the agreement between the parties it was the
plaintiff’s or the defendant’s obligation to prepare the weekly time sheets.
2. Whether the time sheets for the period of the contract were in fact
authorised in terms of and in accordance with the provisions of the agreement.’
[5] The trial court (Coetzee J) sanctioned the request in terms of
rule 33(4) and issued an order to that effect. I will return to this
aspect of the case later in the judgment. The first question set out in
the stated case has become resolved.
[6] The picture emerging from the evidence adduced in the trial
court is that two types of time sheets were used. One type was the
spreadsheet (also referred to as a clock card) which was used by
individual drivers to record hours of work performed by each one of
them and their assistants while rendering service to the respondent.
The information contained in the spreadsheets was used to compile
the other time sheet, the so-called weekly time sheet. It is this time
sheet that was used by the appellant to invoice the respondent.
[7] The evidence adduced also showed that in the period from the
commencement of the contract up to the week ending
3 October 1999, Johan Abraham Van Huysteen and Willem Botha,
who were employees of the respondent, were responsible for
collating the spreadsheets. They thereafter handed them over to
Louis Albrecht Janse van Rensburg and Mark Richard Bryant,
employees of the appellant, to compile the weekly time sheets.
These time sheets, with spreadsheets attached thereto, were given
to Jeane Botha, an employee of the respondent, to check and,
presumably, to authorise. Thereafter Jeane Botha returned the time
sheets to the appellant’s employees to fax to their office in Cape
Town for invoice purposes.
[8] For the period commencing the week ending 9 October 1999
and ending 17 October 1999 Jeane Botha prepared the weekly time
sheets and then handed them to Van Rensburg and/or Bryant to fax
to Cape Town. In that month Jeane Botha complained that the
compilation of weekly time sheets was too much for her. The
parties, represented by Van Rensburg (appellant) and Van
Huysteen and Brown (respondent), agreed that Lee Ann Heuer, who
was initially employed by the respondent, would compile the weekly
time sheets. Subsequently she was, for convenience sake,
transferred to the payroll of the appellant. It was also agreed that
Van Rensburg would collect the time sheets from her to send to
Cape Town.
[9] Van Huysteen was Heuer’s supervisor, and was also
responsible for checking her work. He trained her to collate
spreadsheets and to prepare time sheets. In terms of this
arrangement Heuer prepared time sheets from the week-ending
24 October 1999 up to the week-ending 2 January 2000.
[10] Van Huysteen testified that he was satisfied with Heuer’s work
and did not always check it as he also had other responsibilities and
was certain that she did her work correctly. He was aware that Van
Rensburg and/or Bryant collected time sheets from Heuer every
Monday morning. Heuer always brought her own time sheet to him
to verify her hours. He never signed any of the time sheets and
would have done so had he been requested to do so.
[11] I now return to the remaining question in the stated case.
Central to the resolution of this question is the meaning of clauses 7
of the main agreement and 3 of the addendum. Clause 7 provides:
‘7 TIMEKEEPING
7.1 A weekly time sheet system that records and assigns, names and hours
worked by the Employees will be used.
7.2 The time sheet system shall be authorised weekly by the person at the
Client charged with the responsibility to do so.
7.3 The authorised person shall fax the recorded time sheet to the
Contractor’s office no later than the Monday following any particular week in
which Employees were provided to the Client by the Contractor.’
In turn clause 3 provides:
‘All contractors will be supplied with time sheets, all hours worked will be signed
by an authorised person stating that all hours that have been signed for will be
taken as true and correct and invoiced accordingly.’
[12] The appellant contended before Coetzee J that the time
sheets complied with the terms of the agreement in that they had
been prepared reflecting all the hours worked by its employees, and
that the time sheets were thereafter properly authorised in terms of
the agreement. On the other hand the respondent contended that it
was an express, alternatively implied term of the agreement, that
the appellant would prepare and use the time sheets to record and
assign the names and hours worked by each employee, and that
the time sheets would then be authorised in writing by its
(respondent) representative charged with the responsibility to do so.
[13] After hearing evidence the trial court found that the parties
intended in clause 7 that the appellant would prepare the time
sheets and submit them to the respondent for its approval. The
learned judge essentially reasoned that the time sheet
contemplated in clause 3 was the spreadsheet issued to and
completed by individual drivers, and that though it had to be signed
by an authorised person, this had nothing to do with the
authorisation of time sheets as contemplated by clause 7. The
learned judge further found that clause 7 did not require approval of
the time sheets to be in writing. He found that oral authorisation was
sufficient and consequently granted an order to the effect that the
time sheets for the entire period of the agreement were authorised
in terms of and in accordance with the agreement.
[14] The respondent applied for and was granted leave to appeal
to the Full Court. In granting leave Coetzee J considered that
another court might find that he had erred, inter alia, by not finding
that the agreement, addendum and certain time sheets, viewed
together, showed that the intention of the parties was that
authorisation had to be by way of a signature.
[15] The Full Court (Robinson AJ, Blieden and Schwartzman JJ
concurring) found that the main agreement was of general
application and regulated the relationship between the parties by
requiring that a time sheet system be utilised and be authorised,
whereas the addendum was more specific and dictated how the
parties would implement the general terms of the main agreement.
In this regard the court found that the addendum prescribed how
the authorisation was to take place. It held that the trial court should
have found that authorisation as contemplated in the agreement
would have constituted authorisation in writing by a person in the
employ of the respondent who bore the responsibility to do so.
[16] In this regard the Full Court stated:
’23. The purpose of a signed authorisation is clear. The respondent would
only be entitled to charge for hours actually worked (clause 8) and once
appellant had authorised the time sheets, by signing same, it would be bound
thereby.
In my view, it is clear that the parties in the addendum gave stricter attention to
the detail of the contract than in the main agreement, as such, the addendum
prescribes how the authorisation contemplated in clause 7 is to take place.
This interpretation is underscored by the reference to invoicing in clause 3 of
the addendum. The signed time sheets form the basis upon which the
respondent had to invoice appellant as appears from clause 4 thereof.’
[17] The Full Court then analysed the evidence and concluded that
the time sheets from the inception of the contract up to the week
ending 2 January 2000 were not authorised in terms of and in
accordance with the provisions of the agreement and that the time
sheets for the period commencing the week ending 9 January 2000
up to the termination of the contract in April 2000 were properly
authorised.
[18] The appellant, who is before us with leave of this Court, seeks
the reversal of the ruling of the court a quo to the effect that the time
sheets for the period from the inception of the contract up to and
including the week ending 2 January 2000 were not authorised in
terms of the agreement. The issue therefore, simply put, is the
determination of the meaning intended by the parties when they
required the authorisation of time sheets in the agreement.
[19] Mr Heher, for the appellant, advanced a number of
submissions, the essence of which was that the provisions of the
main agreement took precedence over the terms of the addendum.
He submitted that the absence of any specific form of authorisation
in clause 7 meant that authorisation was intended to take different
forms including, but not limited to, signing.
[20] Mr Heher also submitted that clauses 7 and 3 deal with
different documents, as found by the trial court, in that clause 7
refers to weekly time sheets while clause 3 refers to employee
spreadsheets. He submitted further that even if it were found that
the two clauses deal with the same subject matter, clause 3
provides for the signature of a time sheet as but one of a number of
ways in which a time sheet was to be authorised, and that nothing in
the wording of this clause indicates that signature was intended by
the parties to be a particular form of authorisation, to the exclusion
of others.
[21] The language used in the agreement is the first port of call in
ascertaining the common intention of the parties. In this regard the
language must be given its ordinary and grammatical meaning
unless this results in absurdity, repugnancy or inconsistency with the
rest of the agreement: Sassoon Confirming And Acceptance Co
(Pty) Ltd v Barclays National Bank Ltd 1974 (1) SA 641 (A) at 646B
and Coopers and Lybrand v Bryant 1995 (3) SA 761 (A) at 767E-F.
[22] The main agreement and the addendum clearly form one
contract and must be construed together to determine the intention
of the parties. Cf Trever Investments (Pty) Ltd v Friedhelm
Investments (Pty) Ltd 1982 (1) SA 7 (A). In that case the court was
called upon to construe the meaning and effect of a deed of sale
and correspondence exchanged between the parties. Trollip AJA
stated (at 14H):
‘The question that immediately arises is whether or not the deed of sale and the
correspondence just mentioned, read together, constituted a valid and
enforceable contract between Friedhelm and Trever . . .’
And at 18C-D:
‘That does not mean that the writing and the parties' signatures must
necessarily be embodied in one and the same document. Thus an offer in
writing in one document signed by the seller can be accepted in writing in
another document signed by the purchaser.’
See also Hirschowitz v Moolman and others 1985 (3) SA 739 (A) at
758B-C where Corbett JA said ‘This does not mean that the terms
of the contract and the signatures of the parties must necessarily be
embodied in one document.’
[23] As a matter of logic, when construing an agreement
comprising more than one document one must consider all the
terms used by the parties in all the documents to determine the
meaning thereof. It follows too that terms in a subsidiary document
can prescribe how the terms in the main document are to be
construed. Clearly therefore the Full Court was correct when it
found that in the addendum the parties gave stricter attention to the
general detail of the main agreement by prescribing how the
authorisation contemplated in clause 7 was to take place. This
conclusion is fortified by the reference in clause 3 to the ‘authorised
person’ and to ‘invoicing’. Clearly this clause means that the
responsibility of the authorised person was to approve, as true and
correct, the names of and hours worked by the appellant’s
employees recorded in the time sheet. This approval was necessary
as it paved the way for the appellant to invoice the respondent
accordingly. Presented with a time sheet authorised in this manner,
the respondent can have no excuse for not paying. The converse is
also true that without a signed time sheet the appellant has no claim
for payment (although the appellant might not necessarily be barred
from adducing evidence to prove otherwise).
[24] Mr Heher’s submission asserting multiple forms of
authorisation cannot prevail over the clear language of clause 3.
That a signature was the only form of authorisation intended is
borne out by the format of the time sheet which makes provision for
the name of the client; the applicable order number; a signature, the
name of the signatory and a certificate to the effect that ‘the
signature above certifies that the hours worked are true and correct
and may be invoiced accordingly’. In my view this certificate was
placed in the time sheets to facilitate the authorisation process. The
spreadsheet on the other hand does not have this certificate.
[25] Turning to the evidence, it is correct that the only persons in
the respondent’s employ who had the responsibility to authorise
time sheets were Van Huysteen and Jeane Botha. No evidence was
led that they authorised any time sheets in writing prior to
9 January 2000. Lee Ann Heuer, Bryant and Van Rensburg were all
appellant’s employees and clearly did not have the authority to
authorise time sheets. Therefore in all the circumstances of the
case the appeal must fail.
[26] I return to the separation of issues sanctioned by the trial
court. It is correct that the objective of rule 33(4) is to facilitate the
convenient and expeditious disposal of litigation. This rule provides:
‘33(4) If, in any pending action, it appears to the court mero motu that there is a
question of law or fact which may conveniently be decided either before any
evidence is led or separately from any other question, the court may make an
order directing the disposal of such question in such manner as it may deem fit
and may order that all further proceedings be stayed until such question has
been disposed of, and the court shall on the application of any party make such
order unless it appears that the question cannot conveniently be decided
separately.’
A court approached to sanction this course has a duty to satisfy
itself that the separation will serve the desired purpose: Denel
(Edms) Bpk v Vorster 2004 (4) SA 481 (SCA) at 485A-B.
[27] In the present case, in spite of the separation of the issues as
sanctioned by the trial court in terms of rule 33(4), almost all causes
of action and defences are still open to the parties. The underlying
dispute (between the parties) has yet to be determined. For
example, the defence of estoppel raised by the appellant, and which
was foreshadowed in the particulars of claim, still awaits its day in
court. Neither counsel could deny that all the litigation thus far has
not resulted in the expeditious disposal thereof despite the fact that
it has now gone through three courts at monumental cost, no doubt,
to the litigants. I refer to this scenario simply to voice our disquiet at
yet another manifestation of a failure to ensure that a separation of
issues in terms of rule 33(4) has the potential to curtail litigation
expeditiously. Courts should not shirk their duty to ensure that at all
times, when approached to separate issues, there is a realistic
prospect that the separation will result in the curtailment and
expeditious disposal of litigation.
[28] In the circumstances the following order is made:
1. The appeal is dismissed with costs.
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D MLAMBO JA
CONCUR:
MPATI DP
ZULMAN JA
LEWIS JA
JAFTA JA
In this clause reference to client is to the respondent and contractor to the appellant.
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