South Africa: High Courts - Gauteng

REPORTABLE Case number 9092/05

Date: 27 January 2006

In the matter between:

JAN DANIEL MEYER

APPLICANT

And

THE PROVINCIAL DEPARTMENT OF HEALTH AND WELFARE

1ST RESPONDENT

THE NATIONAL DEPARTMENT OF HEALTH

2ND RESPONDENT 3RD RESPONDENT

THE MINISTER OF HEALTH

THE DEPARTMENT OF FINANCE

4TH RESPONDENT

JUDGMENT

MAVUNDLA, J

[1 ]

This is an application seeking an order against the respondent in terms

whereby the respondent is ordered to accept the resignation of the

applicant and ordering the respondent to process the pension benefits of

the applicant without any delay.

[2]

The respondents are opposing the application.

         ---on -

2

[3]

The issues to be determined in this matter according to the respondents'

counsel are:

3.1

Whether the applicant's resignation from the employment emanates

from resignation or from termination in terms of section 17(5)(a)(1)

the Public Service Act, 103 of 1996,herinafter referred to as the Act.

3.2

Whether there is justifiable reason to compel the first respondent to

process the applicant's pension funds regard being had to the fact

that there are investigations being conducted by the first respondent

into the applicant's alleged contact relation to some irregularities he

allegedly committed whilst still in the employ of the respondent

against the application.

BACKGROUND FACTS

[4]

The applicant, who is a registered pharmacist duly registered with the Pharmacy Council, was in the employ of the 1^st and 2^nd respondents as

the manager of Pharmaceutical Services, Provincial Government:

Limpopo and stationed at Pietersburg. He was serving under the

supervision of Dr. M.D. Masipa, who is also stationed at Pietersburg.

[5]

During August 2004 the applicant, on his return from a long leave, received

a letter summoning him to appear before a committee for a "suspension

hearing". He was further instructed to remove all his personal belongings

[9]

3

from his office and hand over his office keys. On the very same day he

was summarily summoned to appear before the Chief Director,

Administrations, Mr. Tshikochi where he was in an impromptu "hearing';

suspended pending the outcome of the disciplinary hearing. He was given

a suspension letter immediately after the trial.

[6]

On the 15th September 2004 he was given a charge sheet by Dr. Masipa.

According to the charge sheet he was to appear before the Disciplinary

inquiry on various counts, 9 all together, on the 27, 28 and 29 September

2004.

[7]

On the 27 September 2004 he appeared at the inquiry, however the first

respondent applied for the postponement of the inquiry to the 6 October

2004.

[8]

On the 5 October 2004 the applicant tendered his letter of resignation from

his services. He says the reason for his resigning is because he did not

see any chance of a fair inquiry and hearing.

His attorney on the 6 October 2004 sent a request for list of documents for

the preparation of the disciplinary hearing.

[10]

[11]

[12]

[13]

[14]

4

On the 13 October the first respondent responded to the applicant's

attorney and informed the latter of his client's resignation and that the

disciplinary inquiry has as the result of the resignation been

automatically terminated, and that the resignation has since been

accepted.

The applicant says he saw the letter from the first respondent and he

regarded it as the end of his career and he then terminated the services

of his attorney.

On the 8 January 2005 his attorney received a letter from the first

respondent dated the 21 December2004 in terms of which the legality of

the applicant's his resignation was being questioned.

The letter of the 21 December 2004 referred to a letter of the 26 October

2004 which was allegedly hand delivered to the applicant and sent per

registered post to him and to which he has failed to respond. The

applicant denies having received the letter of the 26 October 2004.

The letter of the 21 December 2004 stated inter alia that the applicant has

in a facsimile of the 5 November 2004 indicated that his resignation has

been "tendered for and accepted for 30 days" notice and that this

averment is devoid of all truth. The letter further states that the applicant

[15]

[16]

[17]

5

has been receiving his emolument since the period of his unauthorized

absence and that because of his continued absence the respondent will

be obliged to invoke the provisions of section 17(5)(a) of the Public

Service Act and terminate his services. The letter further calls upon the

applicant to provide reasons within a period of a month why his services

should not be terminated and from his benefits the total amount of the

emoluments that were erroneously paid to him be deducted.

The relevant attorney, per letter dated the 13 January 2005, informed the

first respondent that he was no longer acting on behalf of the applicant

and that the first responded per letter dated the 14 February 2005

indicating that the first respondent's attitude is that the letter of the 21

October 2004 has been duly delivered and served.

The applicant states that the first respondent, through Mr. R S

Ramakgoakgoa has on the 21 October 2004 informed him telephonically

of the existence of the letter of the 21 October 2004 and of it having

been sent to his attorney; His response was that the letter could be

delivered at his home.

On the 1 March 2005 the first respondent contacted the applicant's

attorney and informed him that the applicant's salary has since been

stopped. The respondent says that this was done without prior warning.

[18]

[19]

[20]

6

RESPONDENTS VERSION

According to the first respondent the applicant was employed as the

Head of the Pharmaceutical Services since 1990. During June 2003

Amalgamated Healthcare Ltd ("Amalgamated") was contracted with the

first respondent to act on behalf of the first respondent to place orders of

medicine from various suppliers who had tendered to the department,

which medicines would be distributed to various hospitals within the

jurisdiction of the first respondent.

The applicant was responsible for the aforesaid procurement and distribution. There were various allegations of irregularity which resulted

in the first respondent having to do certain investigations that revealed

certain orders that have been placed by the applicant and which orders

exceeded the mandate of the applicant by an mount of R750, 000.00.

The first respondent says that after the necessary steps had been taken

to hold the disciplinary inquiry and the dates having been scheduled for 6th, 7th, 8th and 13th October 2004 the applicant purported to resign on

the 5th October 2004, which step was taken by the applicant to

circumvent the disciplinary inquiry and to place the applicant beyond the

jurisdiction of the first respondent.

\

[21]

[22]

[23]

7

It is further stated on behalf of the first respondent that the first respondent

did not accept the purported resignation of the applicant and this fact was communicated to the applicant per letter dated the 26th October

2004 and handed to the applicant by Mr. Ramakgoakgoa who confirmed

this in his confirmatory affidavit.

It is further stated that the applicant neither offered to nor did he serve

any notice period as required by the Public Service Act and regulation.

As the result thereof the applicant is deemed to have absconded from

duty and his services were deemed to have been terminated in terms of

section 17(5) (a) of the Public Service Act, and the regulations.

AD ACCEPTENCE

It has been submitted by Ms Molopa, on behalf of the respondents that

the applicant is obliged to give a month's notice and that he ought to

have known that he is in fact obliged to give such notice. The letter of the

13 October 2004 in terms of which the first respondent has purportedly

accepted the applicant's resignation contained the words "without

prejudice" and therefore it must be ignored because the notice itself was

premature.

"'

[24]

"[25]

8

With regard to the words "without prejudice" it is apposite to refer to the

matter of Gcabashe v Nene 1975(3) SA 912 where James J.P. at 914

F-H said and cites Kekewich:

"As far as the general application of the without prejudice rule is concerned, I adopt with respect what was said by Kekewich, J., in Kurtz & Co v Spence & Sons, (1887) 57 L.J. Ch. 238 at p.241 :'1 shall not attempt to define the words "without prejudice" - but what I understand by negotiation without prejudice is this: The plaintiff or defendant--- a party litigant ---may say to his opponent: Now you and I are likely to be engaged in severe warfare; if that warfare proceeds, you understand I shall take every advantage of you that the game of war permits; you must expect no mercy, I shall ask for none; but before bloodshed let us discuss the matter, and let us agree that for the purpose of this discussion we will be more or less frank; we will try to come to terms, and nothing that each of us says shall ever be

used against the other so as to interfere with our rights at war, if, unfortunately war results.' That is what I understand to be the meaning, not definition, of 'without prejudice'''.

Negotiations conducted without prejudice, are of course, designed to resolve disputes between the parties and if the negotiations result in a settlement then logically evidence about settlement and the negotiations leading up to it should be available to the trial Court because the whole bases of the non-disclosure has fallen away.

I am unable to understand from the letter of resignation by the applicant

dated the 5 October 2004 and the response thereto by the first

respondent or at least on its behalf that the parties were engaged in

some negotiations.

[26]

[26]

9

In the matter of Jili v South African Eagle Insurance Co Ltd 1995 (3)

84 of 1986 was made in the following words:

'we refer to the above and, entirely without admission of liability, we

hereby offer the sum of R3987 in settlement of your client's claim.

In addition we offer contribution of R350 towards your costs:

Combrink J, said that there was nothing ambiguous or conditional in

the language or purport of the offer. It clearly conveys that a definite

amount of money is being offered in settlement of the plaintiff's claim

and that a contribution towards her legal costs, again a definitive sum, is

being offered in addition. He held that a proper and binding compromise

would have resulted had the plaintiff accepted it without more, and that it

did not matter that the offer was marked "without prejudice", for the

acceptance thereof would have brought about the same result

irrespective of the presence or absence of that phrase in the offer.

He held further that no conclusive legal significance attached to the

phrase "without prejudice": the mere fact that a communication carried it

did not per se confer it the privilege against disclosure.

In Sibeko and Another v Minister of Police And Others 1985 (1) SA

substantially, although perhaps imperfect, contains what is required by

[27]

[28]

10

section 32 of the Police Act 7 of 1958 is sufficient, the fact that the notice

is marked "without prejudice" does not precluded it from qualifying as a

notice.

In my view the letter of the 13 October 2004 was very lucid and

unambiguous. There was no conditional acceptance of the resignation.

In Atteridgeville Town Council v Livanos tla Livanos Brothers [1991] ZASCA 139; 1992

mutual consent, any submission to arbitration contained in the contract

must, generally speaking, be taken to be dissolved or cancelled. The

reason for this is that the mutual agreement to cancel a contract (or

consensual cancellation) is a contract whereby another contract is

terminated.

In my view it cannot avail the first respondent that the letter of the 13

October 2004 was marked "without prejudice", nor can the fact that the

applicant was either contractually or ex lege obliged to give a month's or

30 day notice avail it. Once the defective notice was accepted by the first

respondent and that fact of acceptance was also accepted by the

applicant, a binding contract came to being and the first respondent

cannot thereafter want to resile from the second agreement without

much ado.

[29]

[30]

11

In terms of the Basic Conditions of Employment Act, No 75 of 1997,

section 37 provides that a contract of employment can be terminated by

either party only on notice, in the case of an employee employed for a

period of a year or more the notice must be four weeks. Where a lesser

notice period has been given by the employee and the employer waives

any part of the notice then the employer will be entitled to pay the

employee only for the hours of the notice he has served in accordance

with section 37 and 35. In my view the first respondent waived its right

to a four week of 30 days notice by implication once it remitted the letter

of the 13 October 2004.

The letter.of the 13 October 2004 at the following paragraphs thereof

stated that:

"2. It is our understanding that your request was solely meant for

the purpose of preparing your client's defence to the charges

preferred and leveled against him. However should the contrary

prevail, please let be in the know.

3. We are convinced that you hold instructions that your client has

tendered his resignation from the Department of Health and

Welfare, Limpopo Province and which resignation was accepted

and confirmed. We send herewith a copy of the resignation

letter and the Application for the Payment of Benefit from Mr

Meyer in confirmation thereof.

[31]

12

4. The resignation on its own cease the disciplinary inquiry, as we

do not have jurisdiction over him, we are unable to accede to

your request."

From the content of this letter and from what the applicant has stated in

his replying affidavit that this letter of the 13 October 2004 has been

brought to his attention, I am obliged to accept this version of the

applicant. In the light thereof and in the light of the authorities I have

referred to herein above, I therefore conclude that the termination of the

applicant's employment emanates from the acceptance of his

resignation as was conveyed per the letter of the 13 October 2004. In

the Polverini v General Insurance Co South Africa Ltd 1998 (3) SA

where the respondent had admitted in two letters to the attorneys of the

plaintiff that the respondent was liable to the plaintiff in the amount

claimed and offered to pay such admitted amount upon the plaintiff

signing an agreement accepting the amount, the court held that the

respondent had not made any offer of settlement in the letters but had

offered to pay the applicant what it had admitted owing to him and then

attached an impermissible condition to its admitted obligation. The Court

further held that there was no provision in law which entitled a party who

has made an unqualified and unconditional admission of liability towards

another party to claim that the admission could not be used against it.

[32]

[33]

[34]

13

In my view, as already stated herein above the acceptance of the

resignation was unconditional and unqualified. In the premises the only

conclusion I can arrive at is that the termination of the services of

employment of the applicant was as the result of his resignation.

The first respondent states that it would want to institute the damages

claim against the applicant once the extent to the irregularities by the

applicant has been determined and quantified, and recover its damages

from the applicant's pension fund. For this process to take place it

requires that all relevant information be obtained and analyzed before

the necessary pension funds of the applicant can be processed.

It has further been submitted by Ms Molopa that this Court should find

that there is no need to give an order directing that the first respondent

should process the applicant's pension fund. She further submits that the

provisions of Section 37A and of the Pension Fund Act providing for the

non-executable and non reducible of pension monies and the provisions

of rule 14.4.1 of Government Employees Pension Law, Proclamation no.

21 of 1996, providing for the benefits of resignation or discharge should

not be read in isolation but in line with the entire provisions of the

statutes.

[36]

[37]

[38]

14

It is further contented that the first respondent has submitted reasonable

and satisfactory grounds why the pension benefits of the applicant

should not be processed. Those reasonable grounds are the alleged

irregularities on the part of the applicant and the need to have the scale

and magnitude investigated. However the duration of such investigation

has not been stated in the respondent's papers.

What I need to determine is whether the first respondent can indeed lay

its hand on the pension funds of the applicant.

Section 37D (1) of the Pension Fund Act 24 of 1956 provides that:

(i)

(aa) (bb)

... ... ...

.        ..       ...      ...

(ii)

compensation (including any legal costs recoverable from the member in a matter contemplated in subpara. (bb) in respect of any damages caused to the employer by reason of any theft, dishonesty, fraud or misconduct by the member, and in respect of which-

         employer; or

         any court including a magistrate' court'

[39]

[40]

[41]

[42]

15

It has also been submitted on behalf of the first respondent that the

applicant has been over paid since after his resignation as he continued

to receive his salary.

The first respondent states that the applicant "acted ultra vires and

caused the department damages by irregularity flouting the tender

process and the quote system". The alleged misconduct the applicant

was to be charged with it would seem that it was to be premised on the

fact that the applicant exceeded his financial delegation of R750,000.00

by ordering scanners to the value of approximately R150,000.00.

In the matter of Moodely v Scottburgh/Umzinto North Local

Transitional Council 2000(4) SA 524 the court considered the question

of misconduct the plaintiff in that particular case with which he was to be

charged as to whether it involved dishonesty. The court held that the

Legislature intended that, if an employee's misconduct did not include

any dishonesty by him, the pension fund was not permitted, in terms of

s37D(B) (11), to make any deduction from the amount due to him on his

retirement in respect of a judgment against him for damages.

From the above decision it is clear that for the first respondent to succeed

in having any amounts deducted from the pension funds of the applicant

it must first and foremost establish that the applicant has committed

[43]

[44]

16

theft, dishonesty, fraud or misconduct. The latter must have an element

of dishonesty. From the allegation in the papers, it can not be inferred

that the exceeding of his signing financial mandate involved any

dishonesty on the part of the applicant. It may well be that after

investigations the first respondent might be in a position to demonstrate

that there was a misconduct having an element of dishonesty on the part

of the applicant. The mere statement that there was misconduct on the

applicant's part is not enough to make me conclude that there was

indeed any dishonesty warranting me to decline giving the applicant the

order he seeks to have the first respondent ordered to process the

pension fund of the applicant.

The first respondent would also have to obtain a judgment against the

applicant before the first respondent would be entitled to lay its hand on

the pension funds of the applicant. At this stage there are no legal

proceedings instituted against the applicant for the justification on the

part of the first respondent not to process the pension of the applicant.

In the light of the above I do not consider it necessary for me to look at

the question and the implication of interpretation of the provisions of the

Government Pension Law (Proclamation No. 21 of 1996), particular in

the light of my finding that the applicant resigned which resignation was

accepted by the first respondent.

17

[45]

In the premises the following order is made:

It is hereby ordered:

two counsel.

JUDGE OF THE HIGH COURT

Augu-27-01-2006