IN THE HIGH COURT OF SOUTH AFRICA
(WITWATERSRAND LOCAL DIVISION)

Case No 07/09990
DATE;25/10/2007

In the matter between:

CHARL JANSE VAN RENSBURG............................................................Applicant
and
HTG LIFE LIMITED......................................................................First Respondent
DOVES GROUP (PTY) LIMITED............................................Second Respondent
DOVES GROUP HOLDINGS (PTY) LIMITED............................Third Respondent
NUMSA INVESTMENT COMPANY (PTY) LIMITED................Fourth Respondent

JUDGMENT

[1]	The applicant seeks payment from the respondents, jointly and severally, of the sum of R10 million less a payment in the sum of R225, 000.00 that has been made to him.   The money is claimed in terms of a settlement agreement which the applicant alleges was concluded between him and the respondents on 6 February 2007 at the offices of the respondents’ attorneys, Messrs Werksmans.

[2]	The agreement on which the applicant relies arose from his prior employment, in terms of a five year contract, as the chief operating officer of the first respondent, and his appointment as executive director of the second and third respondents.  The fourth respondent is the ultimate holding company and sole beneficial shareholder of the first three respondents.  In terms of his prior employment agreement, the applicant was entitled to substantial monetary benefits, as well as an eventual 9.4% shareholding in the third respondent.  

[3]	The applicant alleges that the parties reached consensus at their meeting on the 6th February 2007 at the offices of Messrs Werksmans relating to the termination of his employment and the terms thereof.  Such terms were, according to the applicant, those reflected in the written document, which is annexed to the founding affidavit, marked “CVR7”.  The respondents deny the conclusion of any prior oral agreement that was binding upon the parties and they deny that the written settlement agreement was ever accepted or that it became legally binding.  It is common cause that the written document (“CVR7”) was never signed on behalf of the respondents.

[4]	Adv BE Leech, who appeared for the respondents, submitted that the facts stated by the respondents together with the admitted facts in the applicant’s affidavits on the disputed issues do not justify an order in favour of the applicant and that the application accordingly falls to be dismissed with costs.  Adv FG Barrie SC, who appeared for the applicant, submitted that the denial by the respondent of the conclusion of a binding and enforceable agreement between the parties on the 6th February 2007 and the version put up by the respondents in these proceedings are not such as to raise a real, genuine or bona fide dispute of fact precluding the applicant from being granted the relief he claims.

[5]	It is common cause that the applicant’s employment with the Doves Group commenced on 1 October 2006.  During November 2006, conflict arose between the applicant and Mr Kgobe, who is the chief executive officer of the fourth respondent, and Mr Tarpey, who is an executive director of each of the respondents.  On 8 December 2006, Mr Wilken, the chief executive officer of the second and third respondents, informed the applicant that Messrs Kgobe and Tarpey had conveyed to him that the employment relationship with the applicant must be severed.  Thereafter, during December 2006, certain discussions were conducted between the applicant and Mr Wilken regarding an agreed termination of the applicant’s services.  In January 2007, the applicant was informed by Mr Wilken that his mandate to negotiate a settlement with the applicant had been withdrawn and that attorneys Werksmans had been appointed to attend to the matter.  A meeting at the offices of Messrs Werksmans was convened for the 6th February 2007 at the instance of Mr Wood, who is a director of Werksmans.   

[6]	The applicant and his attorney, Mr Higgins of Bowman Gilfillan Inc, attended the meeting.  They met with Mr Wood, Ms Anastasia Vatalides, who is a director and the head of the labour department at Werksmans, Ms Shireen Marcus, a candidate attorney at Werksmans, and Mr Tarpey.  The spokesperson on behalf of the respondents was Ms Vatalides.  The negotiations continued for several hours during which time offers and counter-offers were made.  Shortly before lunch, Ms Vatalides told the applicant and Mr Higgins that she would draw up a written settlement agreement.  She suggested that they go for lunch and return at about 14h00 with a view to signing the written document.  She informed them that Mr Tarpey had to catch a flight to Cape Town, but that as soon as the applicant had signed the written settlement agreement, she would send it to Mr Tarpey for his signature.  After their return to Werksmans’ offices after lunch, Ms Vatalides presented a draft settlement agreement to the applicant and Mr Higgins.  Negotiations continued insofar as the parties endeavoured to agree on additional terms and conditions as well as other minor amendments to the draft settlement agreement.  Such further negotiations resulted in Ms Vatalides presenting the applicant and Mr Higgins with a second draft agreement.  The applicant, Mr Higgins and Ms Vatalides went through the second draft settlement agreement and a few minor amendments were made.  Ms Vatalides then presented a final document, which was no longer in its text referred to as a “draft”, to the applicant for signature.  The applicant signed the document, including the annexure thereto in terms whereof the applicant resigned his directorships and any other office that he held with the first, second and third respondents.  Mr Higgins enquired from the Ms Vatalides when they would receive the copy signed by Mr Tarpey.  Her response was that Mr Tarpey would sign the agreement either that day or early the next morning and that they would receive it immediately thereafter.  Ms Vatalides then made them each a copy of the signed agreement, they shook hands, and Mr Higgins and the applicant departed.  I have already mentioned that the written document (“CVR7”) was never signed on behalf of the respondents.

[7]	In paragraph 28.2 of their answering affidavits, the respondents aver that “…there was no agreement amongst the parties but for an understanding that should the issues that were being negotiated amongst the parties after lunch be finalised, reduced to writing and signed by all of the parties concerned, an enforceable and lawful agreement would come into existence.”  In paragraph 29.1 of their answering affidavit the respondents aver that “…there was no pre-existing oral agreement that was required to be reduced to writing and signed by all the parties as some sort of formality post an agreement having been reached amongst all the parties before, after or during lunch.  An agreement would only be reached amongst all of the parties once it had been set out in writing and signed by all of the parties concerned.”  The applicant and his attorney, Mr Higgins, deny that any such “understanding” as alleged by the respondents existed at any time.  The applicant avers that the written settlement agreement (“CVR7”) reflects the final consensus that the parties arrived at during their oral negotiations at Werksmans’ offices on the 6th February 2007.

[8]	I am satisfied that the evidence, upon analyses, shows beyond question that the disputes of fact raised by the respondents in their answering affidavit in these proceedings that no consensus was reached and that the parties meant that a writing signed by both parties should constitute their contract, are not real, genuine or bona fide disputes of fact.

[9]	It is common cause that “…John Tarpey and Tony Kgobe have requested that Werksmans take over this matter and bring it to a speedy conclusion.” and that the purpose of the meeting was “…to resolve, and reach agreement, if possible, on the issues relating to [the applicant’s] employment…”.  It is also common cause that Werksmans and Mr Tarpey had the necessary authority from all the parties involved to conclude a settlement.  Negotiations to conclude a settlement occurred between the applicant and Mr Higgins, of the one part, and the respondents, principally represented by Ms Vatalides, of the other, at the meeting at Werksmans’ offices on 6 February 2007.  That the negotiations were conducted, concluded and resulted in the existence of a written agreement, is expressly admitted by the respondents.  It is also undisputed that Ms Vatalides informed the applicant and Mr Higgins that Mr Tarpey would sign the document either that day, the 6th February 2007, or the next morning.

[10]	The mere fact that their consensus was set out in a written document does not, in itself, mean that no binding agreement had come into existence in the absence of the written agreement having been signed by or on behalf of both parties.    In Woods v Walters 1921 (AD) 303, Innes CJ, at pp 305 – 306, said this:
“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 their 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, A.D. p.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.”

[11]	The alleged “understanding” that only a written document signed by both parties would constitute their contract, is not only raised for the first time in their answering affidavits, but is also in conflict with prior correspondence that emanated from the respondents’ attorneys, Messrs Werksmans, after they had taken instructions from their clients.  In their letters dated 22 March 2007 and 16 April 2007, the respondents’ attorneys informed the applicant’s attorneys, Messrs Bowman Gilfillan Inc, that the settlement agreement that had been concluded between the parties had been cancelled by the respondents due to an alleged misrepresentation by the applicant.  Such alleged misrepresentation is not relevant for present purposes since it has not been raised by the respondents in these proceedings.  However, the conclusion of the settlement agreement was not disputed, and the alleged understanding that only a written document signed by both parties would constitute the settlement agreement was not raised.

[12]	I agree with Adv Barrie SC that an “understanding” is not to be equated to an agreement.  The respondents do not allege that the parties came to an agreement, whether expressly or tacitly, that a written document duly signed will constitute their agreement.  The respondents fail to provide the necessary facts in support of the alleged “understanding”.  Such allegation is at best a conclusion with the primary facts on which it depends omitted [see:  Radebe and others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at p 793D;  Swissborough Diamond Mines v Government of the RSA 1999 (2) SA 279 (TPD) at p 324F].  

[13]	Mr Tarpey was no longer present at the time when the negotiations were concluded and the final written document produced during the afternoon on the 6th February 2007.  It is common cause that Ms Vatalides informed the applicant and Mr Higgins that he had to catch a flight to Cape Town, but as soon as the applicant had signed the written settlement agreement, she would send it to Mr Tarpey for his signature.  It is not suggested that Ms Vatalides, or anybody else, conveyed to the applicant or Mr Higgins that the validity and enforceability of the settlement agreement would only arise once Mr Tarpey had signed it.  The necessary implication of what Ms Vatalides conveyed to the applicant and Mr Higgins is, in my view, obvious, namely that Mr Tarpey could not sign the agreement there at the conclusion of the meeting since he had to fly to Cape Town, but he would sign it at the earliest opportunity.

[14]	Adv Leech submitted that a reading of the written settlement agreement is inimical to the suggestion that it was intended to have legal force and effect in the absence of it being signed.  In support of his argument counsel referred to clauses 1.3.1, 3, and 19.1 of the settlement agreement which, in terms of his submission, emphasise the requirement of a reduction to writing and the significance of a written agreement, and to clauses 1.3.11, 9, 10.3, 11, 12 ,15 and 20 which, in terms of his submission, contemplates signature of the settlement agreement to bring about its effectiveness and validity, and counsel relied on First National Bank Ltd v Avtjoglou 2000 (1) SA 989 (CPD) at pp 995G – 996A.  
[15]	Depending on the facts and circumstances of a given case, such or similar clauses may, as was the position in the Avtjoglou case, support an intention that legal validity should be postponed until the due execution of a written document.  Such construction, however, depends on the facts and circumstances of each case, and such or similar provisions must be construed also with reference to the other provisions of the agreement in which they appear [see:  Goldblatt v Freemantle 1920 (AD) 123 at 128 – 129;  Cole v Stuart 1940 AD 399 at 407 – 412].  The undisputed evidence is that Ms Vatalides informed the applicant and Mr Higgins on the 6th February 2007 that Mr Tarpey would sign the agreement either that day or early the next morning.  The provisions referring to the signature date are based on the contemplation that the last signatory, Mr Tarpey, would sign on the 6th or 7th February 2007.  There was no mention of any stipulation, orally or written, that there would not be any binding contract unless the written agreement was signed by Mr Tarpey.                  

[16]	The terms of the written settlement agreement, in my view, show that the parties did not intend that there should be no contract until the written agreement was signed by them.  In its recital the written settlement agreement records that “[t]he parties have reached an agreement in terms of which the employee’s employment with the group shall terminate by way of mutual agreement.”   Clause 4 provides that the applicant’s employment with the group “…shall terminate with effect from Tuesday, 6 February 2007 (“the termination date”), which shall also be the employee’s last day of work.”  The written settlement agreement furthermore provides that the applicant shall no longer be a member of the group’s medical aid scheme (clause 5) and a member of the group’s retirement scheme (clause 6.1) with effect from the termination date, which was 6 February 2007.   It was agreed that the applicant will receive payment of an amount of R10 million, which amount included payment of his remuneration and leave pay for the period ending on the termination date (clauses 7 and 10.1).  With effect from the termination date, the applicant resigned from any office which he held in the group (clause 9).   The applicant was also obliged to return to the group all property belonging to the group (clause 12) and certain other items (clause 13) on or before the close of business on 8 February 2007 (clause 12), and he was obliged to surrender any confidential information on the termination date, in other words on 6 February 2007.  These dates were fixed irrespective of the date of signature of the written settlement agreement and the agreement took effect in very material respects even though it had not been signed.  When signing the written agreement of settlement on the 6th February 2007, the applicant signed a letter of immediate resignation as a director of the first, second and third respondents, and from any other office which he held with them. 

[17]	In all the circumstances of this case I accordingly find that the respondent’s denial that the written agreement of settlement, which is annexed to the founding affidavit, marked “CVR7”, reflects the final consensus that the parties reached during their oral negotiations at Werksmans’ offices on the 6th February 2007, and their version of an “understanding” that an enforceable and lawful agreement would only come into existence should the issues that were being negotiated amongst the parties on the 6th February 2007 be finalised, reduced to writing and signed by all of the parties concerned, are demonstrably and clearly unworthy of credence and are therefore rejected on the papers [see:  Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA), at pp 347 – 348, paras 55 – 56].

[18]	In the result an order is made in terms of prayers 2, 2.1 and 2.2, 3 and 4 of the Notice of Motion herein.

	      	       

						
PA  MEYER, AJ
ACTING JUDGE OF THE HIGH COURT