The
plaintiff joined the first defendant on 1 July 2006. He was employed
by the first defendant as its Financial Controller and Company
Secretary. It was a specific term of his employment that the
plaintiff would be entitled to the use of a motor vehicle and to
participate in the Group motor vehicle scheme. In due course, a Mazda
3 was procured and allocated to the plaintiff.
On
31 July 2007, the plaintiff left the employment of the first
defendant. He took the motor vehicle with him. On 10 August, he was
recalled to the offices of the second defendant, the holding company
for the first defendant, to discuss the issue of the motor vehicle.
After discussions, the plaintiff swore to an affidavit in which he
deposed that he had sold the motor vehicle to the first defendant. He
then surrendered possession of the vehicle to the first defendant but
retained the registration book of the motor vehicle and the spare
keys to the vehicle.
On
7 September 2007, the plaintiff issued summons against the
defendants, claiming the following orders:
“1.
Declaring that the purported sale of the Mazda 3 Registration Number
AAV 8577; Engine No. LF614706; Chasis No. JMZBK12F201323749,
non-existent, null and void ab
initio;
2.
Declaring
that the affidavit issued and authoured by defendants and signed by
plaintiff which confirms the purported sale is null and void ab
initio because of having been induced by duress, and, moreso, for
lack of compliance with lawful and proper laws of authentication and
commissioning (notarial practice).
3.
Compelling the 1st
and 2nd
defendants to restore possession of the vehicle, Mazda 3 registration
Number AAV 8577; Engine No. LF614706; Chasis No. JMZBK12F201323749 to
the plaintiff within 24 hours of this order; and, in the event that
the 1st
and 2nd
defendant have failed to do so, the Deputy Sheriff is and hereby
ordered to effect restoration of possession and ownership of the
vehicle to plaintiff from 1st
and 2nd
defendants by whatever means available to his disposal;
OR,
ALTERNATIVELY
4.
In the event that the 1st
and 2nd
defendants having changed ownership of the vehicle referred to in
paragraph 1, all defendants are hereby ordered to reverse the
ownership into the names of the plaintiff within seven days of this
order and the event of failure to do so, the Deputy Sheriff is hereby
ordered to reverse ownership into the name of the plaintiff.”
The
suit was defended.
In
the main, the defendants contended that the plaintiff had compromised
any alleged rights that he had to the motor vehicle under the scheme
and his contract of employment when he voluntarily agreed to pay for
the motor vehicle at its market value before he could claim it as
his.
At
the trial of the matter, the plaintiff gave the following evidence.
He
was employed by the first defendant as Financial Controller and
Company Secretary on 1 July 2006. In terms of the contract of
employment, he was entitled to the use of a vehicle. A new motor
vehicle scheme was then introduced in September 2006. As he was in
the requisite grade, he was entitled to participate in the new
scheme. In April 2007, he was informed by the Human Resources
Executive that the scheme was now operational. A couple of e-mails
were exchanged between the parties in this regard. He was given a
loan agreement whereby the first defendant was loaning to him a sum
equivalent to the cost price of the vehicle. The amount of the loan
was agreed in the sum of $5,304,200=. He duly signed the loan
agreement, and, in due course, the deductions specified in the
agreement to offset the loan were made against his salary.
At
some stage, he discussed the issue of the change of ownership of the
motor vehicle into his name with the first defendant's Managing
Director, who then facilitated such.
In
July 2007, he tendered a letter indicating
his intention to resign from the first defendant. After discussing
the issue with his Managing Director, he paid up the balance
outstanding on the loan. On July 31, he terminated his employment
with the first defendant and took the motor vehicle with him.
On
1 August he was invited to a farewell party at which his Managing
Director intimated that the motor vehicle scheme would be varied.
This was soon followed by a request that he attends a meeting at the
offices of the second defendant. The request and the meeting were on
August 10 2007. Present at the meeting were the Group Managing
Director, Mr B Kumalo, the Group Commercial Director, Mr Morris
Chinyani. He was advised that the defendants were going to revalue
the vehicle. Mr Kumalo then gave him an affidavit to sign. In giving
him the affidavit, he said if he did not sign it, he, Kumalo, was
going to incarcerate him. At the time, he had an aunt who was not
feeling well. He intended to travel and attend to her. Kumalo forced
him to sign the affidavit, which he did. Had he not been forced to
sign the affidavit, he would have prepared it himself and supplied
all the details missing from the affidavit.
The
defendants withheld the motor vehicle.
On
the same day of the meeting, Kumalo wrote a letter confirming that he
would have the vehicle revalued. He followed this, on 20 August, with
another letter, advising the plaintiff the amount that he had to pay.
The plaintiff got the impression that Kumalo was now revaluing the
loan and sought the advice of his legal practitioners.
He
denied that the parties reached any agreement and that he compromised
his claim to the vehicle.
Under
cross–examination, the plaintiff testified that he was only
threatened with incarceration by Kumalo after he had brought the
motor vehicle back. In this regard, he testified that two meetings
were actually held on the same day even though he would not refer to
the second one as a meeting. The threat came after the inspection of
the vehicle.
The
plaintiff did not impress as a witness. I gained the impression that
he was not telling me the truth about the circumstances, nature, and
the time when he was allegedly threatened and coerced against his
will into signing the affidavit. He was clearly inconsistent on this
point.
Firstly,
he testified that he was coerced into signing the affidavit during
the course of the meeting. When he was asked why he did not report
the extortion to the police when he went to his house to pick up the
motor vehicle, he realized the inadequacy of his testimony and
altered it to allege that he was only threatened after he had brought
the vehicle to the defendant' premises.
He
was not detailed or clear as to the nature of the threat and how this
may have broken his will and made him do what Kumalo requested of
him. His alleged fear of incarceration was most unreasonable in the
circumstances where he had not committed any offence and no
allegation of criminality was being levelled
against him. No police were in attendance at the meeting and no
evidence was adduced to the effect that a report had been made
against him to the local police.
The
sick aunt, who later sadly passed on, was not mentioned during the
meeting and there was no evidence adduced that Kumalo was aware of
her and her condition and used this to bend the will of the plaintiff
to his purposes.
All
in all, I find the evidence of the plaintiff on this issue most
unreliable especially when I compare it with the evidence of the
defendants' witnesses as to what transpired at the all important
meeting of 10 August 2007.
In
my view, having found the evidence of the plaintiff unreliable on the
above issue, this marks the end of the inquiry into the matter as the
plaintiff has failed to prove, on a balance of probabilities, that he
was coerced into parting with possession of the motor vehicle and was
further coerced into entering into a new arrangement regarding the
motor vehicle.
I
shall, however, proceed to briefly summarize the evidence that was
led on behalf of the defendants.
The
defendants called four witnesses.
The
first to testify was Morris Fortune Nhamo Chinyani. He is the Board
Chairman of the first defendant, and, at the time of the meeting of
10 August 2007, he was the Group Commercial Director for the second
defendant.
On
10 August 2007, he attended the meeting at which the plaintiff
surrendered possession of the motor vehicle to the defendants. He
recalls that at the meeting the position of the defendants was put to
the plaintiff. This was to the effect that the motor vehicle scheme
had been put in place to attract and retain executives and that in
the opinion of the defendants, the plaintiff had not earned the
vehicle as yet as had only served for ten months after the
introduction of the scheme. The plaintiff agreed with the sentiments
of the representatives of the defendants present and further agreed
to return the vehicle to the first defendant pending its evaluation.
It was also agreed in the meeting that the valuation would give him a
figure to pay for the vehicle should he wish to purchase it. The
meeting was cordial and the plaintiff was not threatened in any
manner. He agreed that the first defendant could change back from his
name the ownership of the vehicle in the event that he did not pay
for the vehicle within a reasonable time. He then signed an affidavit
that would allow the first defendant to effect the necessary changes.
The
witness gave his evidence clearly and in measured tones. His
understanding of the terms of the loan agreement and of the motor
vehicle scheme may not have been legally correct, but that, in my
view, does not detract from his credibility as a witness.
The
defendant also called the evidence of Cannan Samkange. He is the
Group Human Resources Executive for the holding company. He was in
attendance at the meeting of 10 August 2007 when the plaintiff
surrendered the motor vehicle to the defendants. At the meeting, he
recalls that Kumalo asked the plaintiff whether by leaving the
employment of the first defendant when he did, the plaintiff thought
that it was fair and right that he takes the motor vehicle with him.
After some hesitation, the plaintiff conceded that it was not.
Regarding the way forward, the plaintiff asked the executives present
to spell out what the defendants wanted. Kumalo advised the plaintiff
that he wanted the vehicle returned or for the plaintiff to pay a
fair price for it. The plaintiff opted to purchase the vehicle at a
fair price.
The
plaintiff then signed the affidavit that was prepared for him in the
presence of the three executives who attended the meeting. In signing
the affidavit, the plaintiff was not threatened at all. After some
time, the vehicle was brought back by the driver who had been
assigned to accompany the plaintiff to his residence to collect the
vehicle. The witness went to inspect it and found all the accessories
intact save for the registration book and the spare keys to the
vehicle. The plaintiff invited him to pick these up later at his
residence as they were locked up in the plaintiff's bedroom.
The
witness came across as honest and reliable. He was forthright in his
responses to questions put to him under cross-examination and was
quite clear as to the policy of the defendants regarding the motor
vehicles and why certain decisions were made and implemented. He was
also clear on the relationship between the plaintiff and the
defendant regarding ownership of the vehicle. He testified that while
the plaintiff held the registration book, the vehicle belonged to the
first defendant who had a say as to how it was used until ownership
in the vehicle was transferred to the plaintiff.
I
shall rely on the evidence of this witness.
The
defendants also called Richard Nyatsoka. He is Managing Director of
the first defendant. He was the plaintiff's immediate boss.
The
witness testified as to the terms of the motor vehicle policies that
the defendants had and how the plaintiff qualified under the second
defendant's policy. He also confirmed that he had authorized the
plaintiff to transfer registration of the vehicle into his name.
Towards the end of July 2007, he discussed with the plaintiff the
imminent departure of the plaintiff and how the defendants would
treat the vehicle now that the plaintiff was leaving. At the time the
plaintiff left employment, he was under the impression that the
plaintiff would leave the vehicle behind. In accordance with proper
corporate decorum, he did not repossess the motor vehicle from the
plaintiff on the plaintiff's last day of service. He only learnt,
on 7 August, that the plaintiff had failed to surrender the vehicle
to the defendants. At this stage, he was on leave. He spoke to the
plaintiff about the issue but did not attend the meeting of 10 August
when the vehicle was surrendered. He returned from leave on 27 August
to learn that the vehicle had been returned and the plaintiff had
agreed to pay a fair price for it should he wish to purchase the
vehicle.
Generally,
the witness gave his evidence well and would make good eye contact,
giving the impression that he was telling the truth and had nothing
to hide. He was however not present at the all important meeting of
10 August, and, thus, in my view, his evidence is of marginal value.
Like
the first witness, I find that the interpretation given to some of
the clauses of the loan agreement and of the motor vehicle scheme by
this witness may not be legally sound, but, again, in my view, this
cannot detract from his generally favourable demeanor in the witness
box.
The
last witness to testify for the defendants was Benjamin Nkosentya
Kumalo. He is the Group Managing Director of the second defendant. He
called for the meeting held on 10 August 2007 to discuss the issue of
the motor vehicle with the plaintiff. In attendance at the meeting
were the plaintiff, the Group Human Resources Executive, and the
Group Commercial Director and Chairman of the first defendant.
At
the meeting, which the witness chaired, he asked the plaintiff how he
had transferred registration of the motor vehicle and how much he had
paid for the vehicle for the short period that the scheme had been
operating before he terminated his services. He further asked the
plaintiff whether, in the circumstances, his taking of the motor
vehicle did not amount to unjust enrichment. The plaintiff agreed
with the sentiments expressed on behalf of the defendants. The
parties proceeded to determine a formula by which a fair price for
the vehicle would be established and at which price the plaintiff
would purchase the vehicle. The plaintiff requested for a letter from
the witness confirming what the parties had agreed to so that he
would be protected from any possible reneging by the defendants. The
witness wrote a letter confirming that he would commission an
evaluation of the motor vehicle and inform the plaintiff about the
established value in due course. The meeting was quite amicable and
he did not threaten the plaintiff in any manner. The plaintiff agreed
to and voluntarily surrendered the motor vehicle. The parties also
agreed that the plaintiff signs an affidavit that would assist the
first defendant in re-registering the vehicle into its name in the
event that the plaintiff did not pay a purchase price equivalent to
the market price of the vehicle within a reasonable time.
The
witness commissioned the affidavit as he is an ex officio
Commissioner of Oaths.
He
was present when the vehicle was brought to the premises although he
did not go to inspect it. There was no subsequent meeting after the
vehicle was brought to the premises. A few days later, he wrote to
the plaintiff advising him of the fair market value of the vehicle.
The
witness was
impressive in the witness box. He gave his evidence well. He answered
all questions put to him under cross–examination with forthright
answers. His understanding of the terms of the loan scheme and of the
loan agreements was, in my view, legally sound and he readily
accepted that he had commissioned the affidavit by the plaintiff even
though he had an interest in the matter as he was unaware that he
could not do so.
I
will rely on the evidence of this witness.
At
the pre-trial conference of the matter, five issues were identified
as falling due for determination at the trial of the matter. These
were framed as follows:
1.
Whether there is a valid and enforceable agreement of sale of the
motor vehicle in dispute by the plaintiff to the defendant.
2.
Whether the affidavit signed by the plaintiff is null and void by
reason of duress and improper authentication and commissioning.
3.
Whether the plaintiff is entitled to the motor vehicle in dispute in
terms of the Motec Vehicle Scheme.
4.
Whether the plaintiff is entitled to pay the sum of $4,5b to the
first defendant and purchase the vehicle in dispute from the first
defendant.
5.
Whether if the first defendant has changed ownership of the vehicle
in dispute, such change of ownership could be reversed.
At
the hearing of the matter, the plaintiff abandoned his alternative
prayer for the payment of the sum of $4,5b, thus leaving four issues
for determination.
With
respect, in my view, the four issues as settled at the pre-trial
conference do not capture the essence of the dispute between the
parties.
It
is common cause that the plaintiff was entitled to possession of the
motor vehicle during the course of his employment with the first
defendant. It is further common cause that the plaintiff did not sell
the motor vehicle back to the first defendant as captured in the
affidavit that he swore to on 10 August 2007.
In
my view, the dispute between the parties is whether the plaintiff is
entitled to ownership of the motor vehicle in terms of his contract
of employment, and, if so, whether he has waived or compromised his
entitlements thereto.
The
founding document in this dispute, in my view, is the second
defendant's Group Management Vehicle Purchase Scheme. It is common
cause that this is the scheme under which the plaintiff became
entitled to the use of the motor vehicle in question. It is also
common cause that this document has to be read together with the loan
agreement between the parties.
While
I accept that the loan was granted on paper, with no money actually
changing hands, in my view, the importance of the loan agreement, as
a document, lies in establishing the purchase price of the vehicle.
It is in the loan agreement that the amount representing the purchase
price of the vehicle is set. The motor vehicle scheme simply makes
reference to the loan agreement in respect of the purchase price of
each vehicle falling under the scheme.
In
my view, the plaintiff, having qualified to participate in the motor
vehicle scheme, was clearly entitled to the motor vehicle in terms of
that scheme during the course of his employment with the first
defendant and would have been entitled to the vehicle upon
termination of his employment upon satisfying the terms of the scheme
and of the loan agreement.
Richard
Nyatsoka testified that it was a requirement of the loan agreement
and of the motor vehicle scheme that the plaintiff had to approach
him, as Managing Director of the first defendant, before he paid up
the balance outstanding on the loan.
I
read no such term in the scheme.
It
may have been the practice that the defendants wished to obtain on
the ground but it was not a specific term of either of the two
governing documents. I further do not read into the scheme an implied
term that the whole amount of the loan, which incidentally
represented the purchase price of the motor vehicle in issue, had to
be re-valued on the date of repayment, to take into account the
appreciated value of the vehicle. This was the understanding of the
defendants' witnesses. It is however not in the letter of the
agreement.
I
may add here, for the benefit of the defendants, that if it is their
wish to dis-entitle employees who have not served the organization
for the requisite number of years for each model of the qualifying
vehicles, then this must be clearly spelt out in the motor vehicle
scheme. Similarly, if it is their wish to reserve the right to the
defendants to revalue vehicles on the date of disposal to the
employee, again this is spelt out in clear language in the motor
vehicle scheme. The letter of the scheme as it stands bears little,
if any, bearing to their understanding of what the rights and
obligations of the employees are under the scheme.
On
the basis of the foregoing, I have no doubt in my mind that having
paid for the balance outstanding on the loan agreement before his
employment with the first defendant terminated, the plaintiff was
entitled to claim ownership of the vehicle under the motor vehicle
scheme.
However,
as counsel for the defendants points out, and correctly so in my
view, the parties reached another agreement on 10 August 2007, in
terms of which the plaintiff surrendered his entitlement under the
motor vehicle scheme and agreed that he would pay the market price of
the vehicle if he desired to own it.
The
issue is to determine the nature and effect of this subsequent
agreement.
In
his pleadings, the plaintiff seeks to avoid this second agreement by
pleading that is not binding on the parties as it was induced by
duress.
I
have already found above that I do not believe the plaintiff's
testimony that he was threatened at all during the meeting of 10
August to come to a position contrary to his volition. I note that
counsel for the plaintiff, in his closing submissions, has not
pressed me to find that the plaintiff was compelled by reasonable
fear of any imminent evil to his person to agree to surrender the
motor vehicle and to be able to acquire ownership of the vehicle by
way of a purchase.
The
issue that I now have to determine in this matter is whether there
was an agreement reached on 10 August 2007 and whether the effect of
that agreement was to supersede the obligations and rights that the
parties had agreed to prior.
I
have no doubt in my mind that the parties were in agreement on 10
August 2007. The essence of that agreement was that the plaintiff
would return the vehicle to the first defendant, that the vehicle be
re-valued and that if he wished to own the vehicle, the plaintiff had
to pay its market value, as established by the evaluation.
I
have indicated above that, in my view, the plaintiff was entitled to
ownership of the vehicle upon the termination of his employment and
after having paid off the balance outstanding in accordance with the
provisions of the loan agreement as read with the motor vehicle
scheme. The plaintiff may not have been confident of his rights in
this regard, or may have been aware that the defendants held a
different interpretation on the provisions of the two documents
governing the issuance and ownership of motor vehicles between the
parties. This is all now speculation on my part and is largely
irrelevant in view of the new agreement that the parties concluded on
10 August 2007. I raise the issue simply to buttress my conclusion
that by entering into the new arrangement, the plaintiff adversely
affected his rights under the prior contract and may have done so
ill-advisably. It is my view that the second agreement was ill
advised but is nonetheless binding on the parties like any other bad
bargain.
Our
law of contract has for long recognized that a new agreement that
settles a dispute operates as res
judicata
in respect of the old agreement and in itsself becomes a valid and
binding contract between the parties. Not only can the original cause
of action no longer be relied upon, but a defendant is not entitled
to go behind the compromise and raise defences to the original cause
of action when sued on the compromise. See Road
Accident Fund v Ngubane
2008 (1) SA 432 (SCA); Lieberman
v Santam Ltd
2000 (4) SA 321 (SCA)…,.; Hamilton
v Van Zyl
1983
(4) SA 379 (E); and Majora
v Kuwirirana Bus Service (Pvt) Ltd
1990 (1) ZLR 87 (SC).
This,
in our law, is referred to as a compromise.
The
courts in South Africa have even moved on to hold that a compromise
need not necessarily, however, follow upon a disputed contractual
claim. Any kind of doubtful right can be the subject of a compromise.
A valid compromise may be entered into to avoid even on a clearly
spurious claim.
Counsel
for the plaintiff
submitted that there was no dispute between the parties.
With
respect, I do not agree.
The
parties clearly had a dispute regarding the ownership of the motor
vehicle. In any event, on the authority of the above authorities,
even if the parties were not locked in a dispute, they could still
validly conclude a compromise as to the possession and ownership of
the vehicle, which, in my view, they proceeded to do.
In
establishing whether a claim has been compromised, one is concerned
simply with the principles of offer and acceptance. See E
Bop A Lula Manufacturing & Printing CC v Kingtex Marketing (Pty)
Ltd
2008 (2) SA 327 (SCA).
In
casu,
I am satisfied that at the meeting of 10 August 2007, the parties
reached a compromise.
In
my view, at this meeting, the parties achieved consensus on all the
relevant contractual requirements. They unequivocally intended to
settle the dispute of the motor vehicle by this new consensus. In
terms of this new consensus, I am satisfied that the defendants
offered to sell the vehicle to the plaintiff for its market value and
the plaintiff, in turn, accepted the offer. He asked the defendants
to reduce the offer to writing, which Kumalo did in his letter of 10
August 2007. Thereafter, the plaintiff did not pay for the motor
vehicle in terms of the agreement and is thus not entitled to claim
possession and ownership of the vehicle. It is my further view that
he showed his acceptance of the offer by surrendering the vehicle and
demanding that the offer be put in writing so that the defendants
would not backtrack on same.
In
my view, the parties before me compromised the dispute of the motor
vehicle on 10 August 2007. The effect of the compromise was to
discharge the prior agreement embodied in the loan agreement and in
the motor vehicle scheme. It established a new contract between the
parties that is binding and enforceable. The new contract does not
entitle the plaintiff to possess the motor vehicle. It entitled him
to purchase the motor vehicle upon certain terms and conditions -
which terms and conditions the plaintiff did not comply with.
On
the basis of the foregoing, there is thus no basis upon which the
plaintiff's claim can succeed. As is clear from the authorities,
the plaintiff is not allowed to raise the old agreement to raise a
cause of action against the defendants.
In
the result, I make the following order:
The
plaintiff's claim is dismissed with costs.
