With the consent of all the parties, I consolidated the
hearings of the above three matters as they involve the same dispute between
Ashanti Goldfields Zimbabwe Limited and three of its former workers. Again, with the consent of the parties, I agreed that the
three former workers give their combined evidence first even ...
With the consent of all the parties, I consolidated the
hearings of the above three matters as they involve the same dispute between
Ashanti Goldfields Zimbabwe Limited and three of its former workers.
Again, with the consent of the parties, I agreed that the
three former workers give their combined evidence first even though the third
worker is a defendant under HC3793/08. For convenience, I shall refer to the
three former employees as the plaintiffs and to Ashanti Goldfields Zimbabwe
Limited as the defendant.
The dispute between the parties revolve around two
agreements that were concluded between the defendant and its former workers in
respect of certain properties that the workers were occupying during the
subsistence of their employment with the defendant. On 1 December 2003, an
agreement headed “Memorandum of Agreement between Ashanti Goldfields Management
and Employees” was signed by the defendant's General Manager and Finance
Director, on one hand, and by three employees who were members of the Workers
Committee, representing the defendant's employees.
In the agreement, the defendant agreed to dispose of its
housing units situated in Chiwaridzo, Grey Line Flats and Low density to its
employees who were sitting tenants. An agreed price list was attached to the
agreement. On various dates thereafter, but commencing around 9 December 2003,
the defendant and its employees entered into several lease agreements in
respect of the housing units that the employees were occupying. Deductions were
thereafter effected against the salaries of the employees. The employees
contend that such were in fulfillment of the Agreement of Sale concluded on 1
December 2003.
The defendant, on the other hand, contends that these were
rentals deducted in fulfillment of the lease agreements concluded by each of
the employees in respect of the housing unit they were occupying.
Failing to reach agreement on whether the employees had
purchased the housing units or were renting same from the defendant, a number
of suits were filed in this court - including the above three.
In the first suit, the plaintiff issued summons on 20
August 2007, seeking an order declaring binding the Sale Agreement between the
parties and compelling the defendant to transfer certain immovable property,
described in the summons, to the plaintiff. The suit was defended. In a
separate suit, the defendant counter-claimed for an order evicting the
plaintiff from the property.
In the second matter, the plaintiff filed a court
application seeking an order compelling the defendant to transfer to him
certain immovable property described in the papers. In the application, the
plaintiff averred that he had purchased the immovable property from the
defendant in terms of the Agreement of Sale of 1 December 2003 and that he had
paid the full purchase price through deduction effected against his salary.
The application was opposed, and, in the opposing
affidavit, the defendant denied the Agreement of Sale and averred that the
second plaintiff was occupying the property in terms of a lease agreement which
he had breached.
At the hearing of the application, the matter was referred
to trial with the papers filed of record standing as pleadings.
In the third matter, the defendant sued for the eviction of
the plaintiff from certain immovable property described in the summons. In the
declaration filed with the summons, the defendant alleged that the third
plaintiff was a tenant in respect of the property and that by terminating his
employment with the defendant, he had breached the lease. In defending the
suit, the third plaintiff averred that he was not occupying the property in
terms of a lease agreement but had purchased same from the defendant in terms
of the Agreement of Sale of 1 December 2003.
Thus, the issues arising from the above three matters are
similar and call for an interpretation of the two agreements that the parties
concluded in respect of the properties in dispute.
In support of their cases, the three employees gave
evidence. Again, for convenience, I shall refer to them as first to third
plaintiffs. The first to testify was Simbarashe Antonio. He resides in Bindura
and was employed by the defendant up to June 2007.
During the subsistence of his employment with the
defendant, he occupied many roles. He was a trained electrical technician and
would act as a consultant electrical technician on a need to need basis. On a
daily basis, he was employed in the Finance Department where he was the
Financial Assistant Accountant, responsible for banking, investments, debtors
and gold sales. He also represented the lower levels of the employees on the Board
of the defendant and was thus a Board member. Due to his position on the Board,
he was appointed into a committee that spearheaded and shepherded the alleged
disposal of the housing units by the defendant to its employees. His testimony
was as follows.
In or about 1998, the defendant, then under different
shareholding and management, expressed a desire to dispose of its housing units
to its employees. This was driven by reports that the ore reserves at the mine
would be depleted in five years and the disposal of the housing units was
viewed as a way of recouping some of its investments, and, at the same time, as
a way of keeping essential skills until the mine closed.
Initially, the defendant wanted to hand over all the
housing units to a Building Society for it to oversee the disposal. The
defendant failed to raise the deposit required by building societies for such
an exercise and the matter returned to the Board for further discussion.
Negotiations were opened between the workers and management and the witness was
tasked to speed up the process. The Board empowered him to ensure that
management did not slacken on the process. As part of the process, a committee
was set up called the Housing Committee. It comprised the General Manager, the
Finance Director and a Mr Musarira as representing management and thus the
defendant, and the witness and two others as representing the workers.
In 2002, the Board met in Ghana and the issue came up for
discussion. It was followed up at a subsequent Board meeting held in
Johannesburg where it was resolved that the matter should now be concluded. The
sticking point that was disclosed to the Board was the inability of the workers
to pay in cash for the properties. The Committee was tasked to come up with a
financing method that was acceptable to both sides.
Consultations between the two sides continued up to late
2003. A legal practitioner was retained to draft a document that would capture
and protect the interest of both parties. The Board had indicated that it
required evidence at its meeting of 1 December to show that the issue had been
put to rest. The Housing Committee, in its wisdom, decided to come up with the Memorandum
of Agreement on 1 December 2003 in which it is recorded that the defendant had
agreed to dispose of its housing units to its employees.
During negotiations, the committee had agreed that each housing
unit be valued and three evaluations were carried out in respect of each unit
and a value was assigned to each unit. The sitting tenant in respect of each
unit was also identified and all this was agreed upon by members of the Committee
in a schedule they attached to the Agreement.
The witness understood the document to be the Agreement of Sale
between the defendant and its workers. The document was taken to the Board and
was accepted by the Board as having put the matter to rest. The Board also understood
it to be an Agreement of Sale.
The employees were informed that the Board had now agreed
to sell the properties. Since the employees had no money with which to finance
the purchases, they decided to sell their shares in the defendant. A sum of $5
million was raised from the exercise and this was distributed to the workers.
The witness then paid for his particular unit in full.
Another method of paying for the properties was agreed
upon.
The defendant had, on a previous occasion, disposed of motor
vehicles through a finance lease arrangement. This would entail periodic
payments deducted from the employees' salary and the document for so doing was
a lease agreement. The witness entered into a lease agreement with the
defendant in respect of his unit which is the document he used to effect
payment of the purchase price to the defendant.
An accounting system was created for this particular
exercise. The employees' pay slips would reflect a rent to buy deduction. After
each deduction, the balance due in respect of the property being purchased
would be reflected on the pay slip.
All appeared to be going well until 2006 when the defendant
was sold to Mwana Africa.
The workers went on strike. They were apprehensive as to
their welfare, and, in particular, as to whether the new owners of the mine
would honour the agreements that had been concluded with the previous owners.
They were assured that nothing would change and they returned to work. Later,
the employees heard that the new Board of Directors was not going to honour the
agreements of sale. Employees pressing with the issue were victimized and
subsequently dismissed or retrenched.
The witness was suspended from employment in April 2007. On
27 June, he resigned….,.
He however admitted that in terms of the lease agreement,
he had to remain in the employment of the defendant for five (5) years before
he could purchase the property and that he left employment before that period
had lapsed.
The witness was cross-examined at great length in
connection with a memo that was addressed to all the workers on 2 December 2003
by the Chairman of the Workers' Committee giving them up to February 2004 to
decide whether or not they wanted to buy the house allocated to them. It was
suggested to him that this memo indicated that there had been no agreement of
sale on 1 December 2003 as he had testified.
The witness remained firm in his belief that on 1 December
2003, the defendant had bound itself to sell the housing units to its employees….,.
Next to testify in the matter was Kingstone Fungai Mujati.
He also resides in Bindura and was employed by the defendant from 1997…,.
He is one of the signatories to the agreement of 1 December
2003. He represented the workers when he signed the document. His understanding
of the document was that the defendant was agreeing to dispose of its
properties to its employees who were sitting tenants in respect of those
properties. The prices of the properties were attached to the agreement. His
own property was listed on the attachment as Number 1287 and the agreed price
was the sum of $2,140,000=.
In his testimony, the witness testified that he paid in
full the purchase price in respect of the property that was allocated to him.
The purchase price was deducted from his salary on a monthly basis. In 2005, he
then made a lump sum payment to clear the balance that was due. He identified
the pay slips from which the various deductions had been made. After he had
made the final payment, the defendant wrote to the local authority and to the
Zimbabwe Electricity Supply Authority advising the two that the defendant was
no longer responsible for rates and electricity charges, respectively, for the
property. All utility bills were now coming in his name….,.
Kwadzanai Bonde also gave evidence. He also resides in
Bindura and was employed by the defendant as an Accounts Clerk. He joined the
defendant in 1995 and left employment in November 2007. His evidence was
similar in material respects to the evidence of the first and second witnesses.
Unlike the second witness, he signed a lease agreement in respect of the
property. The lease agreement was explained to him by members of the Housing
Committee as a document that would assist him to finance the purchase of the
property.
He concluded his evidence by maintaining that he had
purchased the house he was occupying and the defendant had no right to evict
him therefrom.
The testimony of this witness was largely similar to that
of the first witness. He however testified that while others signed a finance-lease
agreement in respect of their properties, he did not….,.
The defendant called the evidence of one Agasi Wala. He is
its Human Resources Manager. He was employed by the defendant in 1996. He
initially was a Welfare Officer and rose through the ranks to his current
position. The matter relating to the alleged disposal of the properties to
staff were matters that fell under the purview of the Human Resources Department
where he worked as his department co-ordinated all the meetings with staff.
He confirmed that the three plaintiffs were all once
employed by the defendant. He also confirmed that there were negotiations at
Works Council level between the management and the employees of the defendant
in 2002 regarding the disposal of the properties that the defendant had
allocated to its workers. These were protracted until December 2003 when the
memorandum of agreement was signed. It was his understanding that the Memorandum
of Agreement between the parties signified that, with effect from 1 December
2003, sitting tenants in company houses were to be offered their units to
purchase. To him, this was a statement that these properties would be disposed
of to the workers at a later date. There was going to be a separate agreement
of sale at a later date. After this agreement, the parties concluded a lease
agreement.
Regarding the contention by the plaintiffs that the
agreement of 1 December 2003 was an Agreement of Sale, the witness was of the
view that it was not. He was of the further view that the price list attached
to the agreement for each unit was meant to assist in assessing a rental for
each.
He confirmed that on 5 December 2003, following the first
agreement, a notice was put up on the notice board inviting all employees
interested in participating in the scheme to make their choices known. He was
of the view that if the first agreement was an Agreement of Sale, this notice
to the workers would have been unnecessary and may not have come out in that
form. The employees responded to that notice by filling in lease agreement
forms.
The witness confirmed that deductions were effected against
the salaries of the workers who had responded to the notice of 5 December 2003.
These were only effected after the workers had signed the lease agreements. A
worker who was not participating in the scheme would be in mine accommodation
and would pay subsidized rentals. All those against whose salary were deducted
payments were to purchase their properties after five (5) years. The amount
they would have paid in advance would be taken into account in assessing the
purchase price of the property after the five year period.
In respect of the second plaintiff, he was adamant that
Kingstone Mujati signed a lease agreement that he removed from his file before
he left employment. All employees participating in the scheme had signed the
lease agreements.
Regarding the letters written to the Zimbabwe Electricity
Supply Authority and to Bindura Municiaplity in connection with Kwadzanayi
Bonde's property, he testified that the letters did not state that the employee
had bought the property. It simply transferred responsibility for the payment
of bills to the employee who had left employment with the defendant.
Under cross examination, the witness testified that he did
not attend the meeting at Works Council level where the issue of the disposal
of houses was discussed. He kept track of what was being discussed there from
feedbacks he got from the Housing Committee and from some of the records of the
transactions that were kept by the defendant. He did not have any access to the
minutes of the Board of the defendant….,.
The difference between his testimony and that of the
plaintiffs was in the interpretation that each side gave to each of the two
agreements. While he obtained his information from the Housing Committee, he
was of the view that the two documents should speak for themselves….,.
The defendant did not call any other witness and closed its
case after the testimony of Agasi Wala…,.
In my view, the first issue that I have to determine in
this matter is whether or not the agreement of 1 December constituted an Agreement
of Sale between the defendant and its employees.
As indicated…, the agreement of 1 December 2003 was a terse
document whose operative part read:
“Ashanti Goldfields agrees to dispose of its housing units
situated in Chiwaridzo, Grey Line Flats and Low Density to its employees who
are sitting tenants effective 1 December 2003. Find the agreed prices
attached.”
I am in agreement with counsel for the defendant that the
above was an agreement by the defendant to dispose of its properties to its
employees who were sitting tenants and that the agreement would be with effect
from 1 December 2003 and that this agreement was not the Agreement of Sale
itself.
In my view, the agreement of 1 December 2003 is no more
than an agreement by the defendant to bind itself to sell its housing units,
described in the schedule, to the employee named against each unit and at the
price given as the market value of each unit on the date of the agreement. It
was thus an agreement giving the employees an option to purchase the housing
units on the terms and conditions stipulated in the agreement.
To the limited extent that the defendant bound itself to
offer the housing units for sale to its employees on the terms stipulated in
the agreement, an agreement came into being. It would be binding on the
defendant but not on the employees. The true nature of that agreement was an
option granted to the employees to purchase the housing units.
In my view, the agreement could also be viewed as an
irrevocable offer by the defendant to sell its housing units on the terms and
conditions stipulated in the agreement.
It is not in dispute between the parties that once the
terms and conditions of the agreement of 1 December were met, a vinculum juris
would be formed between the parties and a binding contract would come into
being. Thus, the option granted the employees to purchase the housing units was
also an offer by the defendant to each and every employee named in the schedule
to purchase the unit allocated to him or her at the agreed price.
An offer has been described as a proposal by the offeree
made with the intention that by its mere acceptance, a contract shall form.
(See R. H. CHRISTIE: The Law of Contract in South Africa 3rd Ed…,.).
In other words, 'the proposal, objectively construed, must
be intended to create binding legal relations and must have so appeared to the
offeree'. D T ZEFFERTT, 'Payments In Full Settlement' (1972) 89 SALJ 35…,.
The next issue that falls for determination is whether the
offer, as contained in the agreement, was ever accepted by the above three
plaintiffs.
It is trite that, as a general rule, a contract is not
concluded until the offeree has not only decided in his mind to accept the
offer, but has communicated his acceptance to the offeror.
In each case, it is necessary to consider the terms of the
offer to determine the mode of acceptance required. Where, in my view, the
offer is silent as to how the offer is to be accepted, any conduct on the part
of the offeree, by deed or by word is, in my view, that is consistent with
acceptance of the offer and which conduct or word is brought to the attention
of the offeree and is also understood by the offeree as an acceptance of the
offer, is sufficient to create the requisite vinculum juris between the
parties.
In casu, it is not in dispute that the agreement of 1 December
2003 was silent as to what the employees needed to do to accept the offer. In
my view, after the agreement of 1 December 2003, if each and every employee
named in the agreement had tendered the full purchase price of their respective
unit to the defendant, a binding agreement of sale would have been created. The
three plaintiffs contend that they accepted the offer to purchase their
respective housing units by completing the lease agreements which they
understood to be vehicles to finance the payment of the purchase price in
instalments.
Two issues arise from the execution of the lease agreements
between the parties.
(i) Firstly, I have the testimony of the plaintiffs as to
how the lease agreements came into being.
This testimony, in my view, cannot be assailed at the
instance of the defendant. It is common cause that at the time the lease agreements
were executed, there was no dispute between the parties as to which employee
was in occupation of which unit and what rental the employee had to pay. The
parties had not been negotiating lease agreements at any level and there was
thus no factual or legal dispute that required the parties to enter into lease
agreements. In other words, there was no need for the lease agreements either
on the part of management or on the part of the employees.
(ii) On the other hand, the parties had been negotiating the
disposal of the housing units by management to the employees. The negotiations
had spanned a period of over five (5) years and days before the lease
agreements were executed, the defendant had finally bound itself to dispose of
the houses to the employees in a written document. Thus, the dispute between
the parties was in connection with the disposal of the housing units and thus,
the understanding by the employees that the lease agreements were part of the
process was, in the circumstances, more probable than the defendant contention
that this was a new stand alone agreement.
Thus, on a balance of probabilities, I would hold that that
lease agreements were not separate from the exercise of the disposal of the
houses to the plaintiffs.
What emerges from the testimony of the parties regarding
the lease agreements, if I were to accept the defendant's testimony, is that
parties were not ad idem concerning the true nature of the agreement. The
employees regarded the agreement as a vehicle to offset the purchase price of
the housing units, when, on the other hand, the defendant viewed the agreement
as a stand alone lease agreement, creating fresh obligations for the parties.
In any event, I have…, expressed my reservations about
accepting the views of Agasi Wala as representing the intention of the
defendant when it concluded the lease agreements with the first and third
plaintiffs….,.
The major defect of the defendant's defence is that no one
appropriately placed in the corporate governance structures of the defendant
came to testify on behalf of the defendant.
Thus, the lease agreement between the parties was not meant
to be in replacement of the first agreement. It was not executed with the
necessary animus contrahendi by the employees and is therefore not binding on
all the parties.
The issue remains as to whether the plaintiffs accepted the
option granted them by the defendant.
In my view, they did.
It is common cause that the plaintiffs made various monthly
payments to the defendant in reduction of the agreed purchase price of their
respective units. This was sufficient communication of the acceptance of the
offer. It is further not in dispute that the representatives of the defendant
then accepted the deductions as part payment of the purchase price.
The opinions of Agasi Wala as to what these payments
constituted cannot be ascribed to the defendant for the reasons I have given…,.
It is therefore my finding that the plaintiffs
did conclude binding agreements of sale with the defendant in respect of each
of their units. The offer to purchase was made on 1 December 2003. The
acceptance was by each employee when he or she communicated their intention to
the management of the day that they were going to participate in the scheme and
made arrangements to pay off the purchase price. The offer from the defendant
did not stipulate how acceptance was to be communicated and any conduct
consistent with being bound by the defendant's terms, communicated to the
defendant's representatives, was sufficient.