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IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JS1079/18

In the matter between:

ELOFF F J                                                        Applicant

and

IMVULA ROADS AND CIVILS (PTY) LTD	Respondent

Heard:           21 August 2020

Delivered:     This judgment was handed down electronically by circulation to the parties’ representatives by email and release to SAFLII. The date and time for hand-down is deemed to be 01 September 2020.

Summary:  Exception – approach – pleading requirements for contractual claims- exception upheld

JUDGMENT

COETZEE AJ

[1]       The applicant filed and served his statement of claim, claiming payment of unpaid leave and notice pay.

[2]       The respondent filed its statement of defence accompanied by a counterclaim.

[3]       The counterclaim is for payment of damages allegedly suffered by the respondent as a result of an alleged breach or breaches of contract on the part of the applicant in the execution of his duties.

[4]       The applicant excepted on the basis that the allegations contained in the counterclaim are vague and embarrassing, alternatively do not disclose a cause of action.

[5]       There were other preliminary issues between the parties which have been resolved. The exception is the only remaining issue between the parties before they must engage in a pre-trial meeting if the exception is unsuccessful.

[6]       In the counterclaim the respondent alleges that the applicant was in breach of his contract of employment with the respondent.

[7]       The dispute between the parties does not relate to fairness, but to an alleged breach of contract.

[8]       The respondent employed the applicant as a "Contractor's Representative/Contracts manager".

[9]       The respondent sets out in detail the applicant's contractual obligations supported by the applicant's specific duties. More specifically the respondent relies upon and has pleaded as follows:

"The Applicant will perform his duties and obligations with the necessary skill required and not to be negligent in the performance of his duties, functions and obligations."

[10]    The respondent pleaded that the applicant negligently performed his duties and obligations, which negligence caused the respondent damages.

[11]    The breach of contract, and therefore the applicant's negligence, relates to the applicant's duties relating to a contract entered into between the respondent and the Western Cape Government Transport and Public Works ("the Government"): Contract Number C 998 ("contract C998")

[12]    it is common cause that the applicant in terms of his contract of employment was responsible to manage the implementation and execution of C 998.

[13]    The respondent pleaded the neglect of duties in paragraphs 12 to 16 of the counterclaim.

[14]    The offending paragraphs in the counterclaim, according to the applicant, are paragraphs 12, 13, 15 and 16:

"12. As part of the applicant' duties and obligations as employee the applicant was instructed to attend to the contract management and control of Contract number C998, which included the management and control thereof in order to ensure that the contractual requirements of the project are met and claims timeously submitted, in terms of the general conditions of contract GCC 2010.

13. The applicant breached the agreement with the respondent, in that he neglected in the performance of his duties and obligations, by failing to do the contract management and control of Contract Number C998, and more specifically to ensure that the contractual requirements are met and claims for payment timeously submitted.

14. –

15. As a result of the applicant's failure to submit claims for work done timeously in terms of Contract Number C998, the Western Cape Government Transport and Public Works was under no obligation to effect payment for work done in respect where of no claims were timeously submitted.

16. As a result of the aforesaid the respondent suffered damages in the amount of R 1820265.53 as set out in Annexure "IM5" annexed being claims for work done which respondent forfeited as a result of the applicant's negligence and failure to submit claims timeously".

[15]    The applicant takes issue with the formulation of the counterclaim on the basis that the counterclaim does not disclose a cause of action, and that the formulation of the counterclaim is vague and embarrassing.

[16]    It is trite law that a party wishing to claim damages resulting from a breach of contract must allege the terms of the contract, breach of the contract, damages, a causal link between the breach and damages and that the loss was not too remote.

[17]    The applicant, firstly, is aggrieved in that the respondent alleged that the applicant neglected his duties and obligations in failing to ensure that the contractual requirements (of contract C998) were met and claims for payment timeously submitted. The applicant submits that this formulation calls for at least two breaches on the part of the applicant, namely that the respondent alleged that he is in breach of his contract of employment in that he failed to ensure that the contractual requirements were met, and apart from that he is accused that he did not submit claims for payment timeously. According to the exception, the rest of the formulation of the counterclaim refers only to the alleged late submission of claims. It is therefore not clear whether the respondent intends to rely upon the allegation that other contractual requirements of the project were not met, and if so, what those are. If the respondent intends to rely upon the requirements that have not been met, the respondent did not identify the other "contractual requirements" of contract C998 that had to be met.

[18]    The pleaded neglect may also only means that the applicant is accused of negligence only in respect of the alleged failure to submit claims timeously.

[19]    The second attack is upon the respondent's lack of specifying those provisions in the contract C 998 upon which the respondent relies for the alleged breach of the contract of employment.

[20]    The respondent relies upon unspecified provisions in contract C 998 relating to payments due to the respondent after the respondent has submitted claims. The allegation is that the applicant did not submit claims for payment timeously and therefor the claims were forfeited.

[21]    The respondent, quite correctly, pointed out that a party should not rely upon an exception where the subject matter can adequately be dealt with at a pre-trial conference. Respondent relies upon several authorities in support of its contention. In most of those cases the dispute related to fairness and once the facts have been pleaded it was expedient to determine the issues of law and factual disputes at a pre-trial meeting.

[22]    The respondent pleaded that the counterclaim is based upon breach of contract. The respondent in oral argument accepted that the contractual claim should be pleaded with more clarity than perhaps where fairness is at stake.

[23]    The respondent argues that one must have regard to the pleading and its annexures in order to determine whether the cause of action has been adequately pleaded. In this case the annexures comprise in excess of 200 pages.

[24]    The applicant claims to be unable to formulate a defence in respect of the allegation that the applicant submitted claims late which led to the respondent suffering damages.

[25]    The reason is that there are more than one clause in contract C998 dealing with the submission of claims.

[26]    The applicant points out that clause 6.10.1 regulates interim payments and the process to formulate and submit those claims. The clause specifies that the claims must be submitted "on such date as may be agreed between the Contractor and the Engineer, or failing agreement, as the Engineer may require". There is no allegation that a date was ever fixed.

[27]    A second provision in the contract is to be found in clause 6.10.8 which regulates a completion statement. In this case a claim for payment must be submitted within fourteen days of the final approval in the final approval certificate.

[28]    A third provision regarding claims is clause 10.1 regulating claims for payment of additional work or damages. Those claims must be submitted within 28 days after the circumstance, event, act or omission giving rise to the claim concerned.

[29]    It is the applicant's contention that when no time period is specified in contract C 998 for the lodging of claims, then there can be no duty upon applicant to submit a claim within a specified period. Therefore, the applicant is entitled to know on what provision in contract C 988 the respondent relies for applicant to be able to plead to the allegation of negligence.

[30]    The applicant makes the submission that the respondent relies upon conduct on the part of the applicant that allegedly constituted a breach of the provisions of the contract between the respondent and the Government Department. The applicant, therefore, is entitled to know the specific terms of the agreement allegedly breached. The submission is that the respondent relies upon the employment contract that specifies the duty and upon contract C 998 which sets out how that duty is to be complied with. Thus, the applicant is entitled to know upon which provisions in contract C998 respondent relies. This, the applicant says, is similar to the information that a party who is accused of breach of contract is entitled to:

"In short, the applicants are entitled to be apprised specifically of the nature of the agreement and the specific terms of the agreement and/or other specific undertakings given by them consequent to their employment which they are alleged to have breached. These are facta probanda in any claim for damages on account of breach of contract."[1]

[31]    The applicant relied heavily on the judgement in Imprefed (Pty) Ltd v National Transport Commission[2]. In that case the plaintiff pleaded the document which it would rely upon for payment of additional amounts due in terms of the contract with the National Transport Commission. During the trial the plaintiff, instead, relied upon a different document. The court held the plaintiff to its pleading and expressed the need to be specific when pleading a contractual entitlement. This case is supported in part only for the applicant's contention that the pleading of the claim must be concise and specific.

[32]    The second main theme of the exception is a lack of causation between the alleged breach and the alleged damages. It is alleged that the applicant failed to submit claims with reference to contract C998 timeously. Because the claims were not submitted timeously the Government Department was under no obligation to effect payment for work done where no claims were timeously submitted.

[33]    Applicant's submission is that contract C998 contains no provision stipulating the consequence for a failure to "submit claims timeously". The respondent therefore avers that it forfeited claims for which there appears to have been no contractual provision in contract C998. In the absence of a contractual provision that stipulated a penalty for failing to submit claims timeously, respondent has not pleaded a causal connection between not submitting claims timeously and the damages it claims.

My analysis

[34]    It is common cause that the Labour Court Rule 6 requires a party to record in concise terms the material facts upon which it relies and the legal issues that arise therefrom. This must be done with sufficient clarity to enable the opposing party to reply to the pleading. The respondent submits that the requirement of Rule 6 is there for  good reason: "The Labour Court is a Court of fairness and equity".

[35]    This, however, is not a case where fairness and equity are at play.  The claim and counterclaim are both contractual claims where fairness and equity do not play any role. The purpose of Rule 6 in respect of a counterclaim is more demanding than when fairness and equity  are pleaded.

[36]    A party is under a more burdensome duty to plead the causa for a contractual claim than for instance in a matter relating to fair conduct. That is the nature of contractual claims.

[37]    Rule 11.3 of Labour Court gives the Court a  discretion to adopt any procedure it deems appropriate to deal with an issue such as an exception which is not covered in its rules. The Court has recognised that parties may have recourse to the High Court rules which deals specifically with exceptions.

[38]    The High Court in Living Hands (Pty) Ltd and Another v Ditz and Others[3] summarised the basic principles governing exceptions:

"(a) In considering an exception that a pleading does not sustain a cause of action, the court will accept, as true, the allegations pleaded by the plaintiff to assess whether they disclose a  cause of action.

(b) The object of an exception is not to embarrass one's opponent or to take advantage of a technical flaw, but to dispose of the case or portion thereof in an expeditious manner, or to protect oneself against an embarrassment which is so serious as to merit the costs.

(c) The purpose of an exception is to raise a substantive question of law which may have the effect of settling the dispute between the parties.

(d) An excipient who alleges that a summons does not disclose a  cause of action must establish that, upon any construction of the particulars of claim, no cause of action is disclosed.

(e)  An over technical approach should be avoided because it destroys the usefulness of the exception procedure, which is to weed out cases without legal merit.

(f) Pleadings must be read as a whole, and an exception cannot be taken to a paragraph or a part of a pleading that is not self-contained.

(g) Minor blemishes and unradical embarrassments caused by a pleading can and should be cured by further particulars."

[39]    The Labour Court rules do not provide for further particulars or for particulars for preparation for trial. The pretrial meeting plays a more important role in this regard where "minor blemishes and unradical embarrassments should be cured".

[40]    The Labour Court in Irving v Amic Trading (Pty) Ltd[4] formulated the test in deciding exceptions based on vagueness and embarrassment as follows:

"(a) In each case the Court is obliged first of all to consider whether the pleading does lack particularity to an extent amounting to vagueness. Where the statement is vague it is either meaningless or capable of more than one meaning.

(b) If there is vagueness in this sense, the court is then obliged to undertake a quantitative analysis of such embarrassment as the excipient could show is caused to him or her by the vagueness complained of.

(c) In each case an ad hoc ruling must be made as to whether the embarrassment is so serious as to cause prejudice to the excipient if he or she is compelled to plead to the pleading in the form to which he or she objects. (A point may be of the utmost importance in one case, and the omission thereof may give rise to vagueness and embarrassment, but the same point may in another case be only a minor detail.)

(d) The ultimate test as to whether or not the exception should be upheld is whether the excipient is prejudiced …"

[41]    The respondent argued that the pre-trial proceedings resulting in a pre-trial minute are very important. The respondent relied upon the Irving – matter[5] and Harmse v City of Cape Town[6]. Both matters emphasise the importance of sorting out the factual disputes at the pre-trial meeting. The Court in Harmse further stated:

"When an exception is raised against the statement of claim, this court must consider, having regard to what I have said above, whether the matter presents a question to be decided which, at this stage, will dispose of the case in whole or in part. If not, then this court must consider whether there is any embarrassment that is real and that cannot be met by making amendments or providing of particulars at the pre-trial conference stage."

[42]    The applicant's complaint that the counterclaim does not make it clear whether the respondent will rely only upon an alleged breach of contract C998 in respect of the late submitting of claims or whether it also intend to rely upon other unspecified breaches, is valid. The respondent must either specify that that was the only breach or plead the other alleged breaches.

[43]    In casu it seems that the parties can expect to spend much time at the pre-trial meeting in defining the factual disputes. In order to define the factual disputes, there should be a legal framework within which to do so.

[44]    It is important in this case for the respondent to plead its contractual claim (and the alleged breach thereof) in specific terms.

[45]    The exception that the counterclaim does not disclose a cause of action depends upon whether there are provisions in contract C998 which the applicant allegedly negligently did not comply with on behalf of the respondent and whether such neglect invoked a consequence that the Government did not have to pay claims. The applicant's alleged breach of his employment agreement in respect of the alleged late submission of claims, cannot be assessed in isolation and without having regard to his alleged neglect to give effect to specified provisions in contract C998 imposing time limits and forfeiture.

[46]    It is not determinable from the counterclaim which terms of contract C998 in respect of the submission of claims the applicant is alleged to have breached by not doing so timeously and thereby he allegedly breached his employment contract.

[47]    There is no allegation in the counterclaim in respect of which written terms of contract C998 the applicant allegedly failed to comply with and on what basis the respondent based a "forfeiture" of the claims as such a forfeiture does not seem to appear from the written terms.

[48]    If there are no specific terms in contract C 998 that the applicant is in breach of, or if contract C998 does not provide for forfeiture, then a material part of the counterclaim stands to fail. The exception cannot then be said to be merely convenient but goes to the heart of the counterclaim and may dispose of the whole or part of the counterclaim.

[49]    The counterclaim is pleaded vague and embarrassing in that it is either pleaded that the applicant neglected to ensure that the contractual requirements are met and, secondly, claims for payment were not timeously submitted, or it may mean that he only neglected his duties in respect of the timeous submission of claims.

[50]    Further costs will have been incurred later at a pre-trial meeting if the respondent were to be unable to show that it could rely on specific provisions in contract C998 or wish to rely upon as yet unspecified breaches.

[51]    The applicant is prejudiced in not being able to plead to the counterclaim as it presently stands.

Costs

[52]    in contractual claims fairness is not a consideration in making a cost order. Costs should follow the result.

Order

[53]        I make the following order:

[53.1]      The exception is upheld as the counterclaim:

[1] Is vague and embarrassing regarding whether respondent relies upon one or more breaches of contract C998, and

[2] Does not disclose a cause of action in the absence of pleading the provisions of contract C998 upon which respondent relies for the applicant's alleged breach(es) and the consequence of forfeiture thereof.

[53.2]      The respondent is granted 14 days from the date of this order to amend the counterclaim failing which paragraphs 12, 13 and 15 of the counterclaim are struck out and the counterclaim is dismissed.

[53.3]      The respondent is ordered to pay the costs.

F. Coetzee

Acting Judge of the Labour Court of South Africa

Appearances: 

The parties agreed to a Zoom meeting.

For the applicant:              Adv JD Withaar

Instructed by:                     Len Dekker Attorneys

For the respondent:            Adv F W Birkholtz

Instructed by:                      Burden Swart & Botha Attorneys

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