FIRING THE LAST SHOT IN A CONTRACTUAL DISPUTE


– Chazanne Grobler

 

Most contracts come about after very long deliberations and negotiations. What happens in the instance where the contracting parties, after various offers and counter-offers, start executing without signing a contract? Was there a meeting of the minds to determine that a contract has been concluded?

In the recent Supreme Court of Appeal case of Van Huyssteen NO and Another v Mila Investment and Holding Company (Pty) Ltd the Court applied the doctrine of quasi-mutual assent. The Respondent, Milla Investments and Holdings alleged that the Appellants had underpaid their rental in terms of a lease agreement. The question arose as to which lease agreement was being applied. Milla Investments argued that after sending the original offer to lease, the Appellant had effected certain changes, firing the last shot. The last shot, as was argued, had won the battle.

During the “battle of the forms” a counter-offer, or the firing of the last shot, does not necessarily win the battle. The last shot will only win the battle, i.e. the doctrine of quasi-mutual assent can only be applied, when the following three (3) conditions are met:

  1. The one party (Seller or Lessor) must present his or her ‘printed conditions’ in such a manner as to draw the attention of a reasonable person in the position of the Buyer or Lessee;
  2. The Buyer or Lessee must then present his or her ‘printed conditions’ (the amended offer) in the same manner;
  3. The Seller’s (Lessor’s) action after receiving the Buyer’s (Lessee’s) conditions must give the Buyer (Lessee) reasonable belief that the Seller (Lessor) is contracting on the Buyer’s (Lessee’s) conditions.

Usually if one party wishes to enter into a contract on certain terms and the other party wishes to enter into a contract on a different set of terms, there is no contract. The parties do not possess the necessary animus contrahendi, or intention to contract. An exception to the rule is of course the application of the doctrine of quasi-mutual assent as described above, where the conduct of a party proves that he or she has entered into the contract.

In the abovementioned case taking into consideration the evidence presented, the Court held that the Respondent (Plaintiff) had acted in terms of its original offer. The Appellant might have fired the last shot, but the facts could not have led the Appellant to believe that the Respondent has assented to the Appellants’ contractual terms. Should a court find that the parties never concluded an identifiable contract, an order for restitution or payment of a fair price could be appropriate. Contracting parties should ensure that both parties are in agreement as to which contract or final terms are being followed.

YOU WANT TO DISCIPLINE ME? WELL, I RESIGN!


– Ané Kotzé

 

In an era where we want everything and we want it now, the same dogma seems to surface in the workplace. Employees are reluctant to face disciplinary action, and as a result, choose to resign as soon as they become aware of an employer’s intention to take disciplinary steps against them. Which poses the question – is it allowed?

A resignation in itself is seen as a repudiation of a contract, clearly showing one party’s choice to abandon the terms of the contract insofar as it is applicable to him / her. In order to ensure that the civil courts are not flooded with damages claims, the Basic Conditions of Employment Act, (hereinafter referred to as the BCEA), makes provision for generally accepted notice periods.

South African labour law does however cater for resignation with immediate effect. The acceptance of the resignation by an employer is not a necessity as it is the employee’s right to unilaterally repudiate his / her contract of employment.

In the Labour Court matter of Mtati v KPMG Services (Pty) Ltd , delivered on 18 October 2016, the employee resigned on two occasions: the first instance honouring the notice period, and then later, when discovering that her employer intends on proceeding with disciplinary action, with immediate effect. The employer proceeded with the disciplinary action, despite the employee’s second resignation which was with immediate effect and the employee was subsequently dismissed.

The employee challenged the dismissal on an urgent basis, where after the Labour Court held that the employee could have been disciplined during her notice period, as long as the disciplinary proceedings were concluded prior to the last day of the notice period. The Court held further that, in light of the fact that the employee resigned a second time, and this time with immediate effect, that the dismissal was null and void as the employee’s second resignation terminated her employment contract immediately. The employer therefore had no jurisdiction to dismiss the employee as the contract of employment was no longer in force.

This judgment raised some concern for employers as it appeared as if employees, when being faced with disciplinary action, can merely resign to avoid a termination status of “dismissal” as opposed to “resignation”, especially in cases of gross misconduct.

However, there seems to be light at the end of the tunnel. At least for one sector.

Employees under the public sector is bound by the provisions of the Public Service Act and more specifically Section 16B(3) thereof which reads as follows: “if notice of disciplinary hearing was given to an employee, the relevant executive authority shall not agree to a period of notice of resignation which is shorter than the prescribed period of notice applicable to the employee”.

It therefore appears as if employees in the public sector will not be able to boycott disciplinary action by tendering an immediate resignation. The Public Service Act gives employers in the public sector the right to place an immediate resignation on hold, pending the outcome of the disciplinary hearing or the notice period, whichever comes first.

The private sector however is bound by the Labour Relations Act , the BCEA and now, the recent Mtati-judgment.

It should however be noted that employers will always have common law remedies available for damages suffered due to the breach of contracts of employment. Employees can also be prosecuted for offences such as theft and fraud, even if employers are not afforded an opportunity to punish employees on a labour front. This, in essence, will have a greater effect on an employee’s future employment endeavours than the termination status of “dismissal”.

PAYMENT OF RATES AND TAXES IN ADVANCE?


– Nadia Burger

 

If you recently sold your property, you would be familiar with the fact that you have to pay rates and taxes in advance, to enable the transferring attorney to obtain a rates clearance certificate from the Municipality. This certificate is lodged at the deeds office as the Registrar of Deeds may not register a property without a rates clearance certificate.

In a recent Supreme Court of Appeal Judgment of Nelson Mandela Bay Municipality v Amber Mountain Investments 576/2017 [2017] ZASCA 36 the court was called upon to establish whether a seller is liable to pay the total calculated rates on a property determined for the financial year or only the rates calculated until the property is transferred.

In this matter, Amber Mountain sold their property and required a rates clearance certificate. The Municipality requested payment from Amber Mountain until the end of the Municipality’s financial year, being 1 July to 30 June the following year, prior to the Municipality issuing the rates clearance certificate. The Municipality requested payment for the amount of R2 281 014.68 and Amber Mountain was forced to pay this amount, even though the amount due to the Municipality was only R1 214 482.68. Amber Mountain argued that it overpaid the Municipality in the amount of R1 066 532.00 and claimed a refund. The Municipality disagreed and argued that it is entitled to claim annual property rates, as rates becomes payable as of the commencement of the Municipality’s financial year.

The Constitution authorises a Municipality to impose rates on a property for services provided and payment is regulated by the Rates Act . The Rates Act specifically states that a rate becomes payable as of the start of a Municipality’s financial year or if a Municipality’s budget is not approved at the commencement of the financial year, rates become payable as of a later date when the Municipality’s budget is approved.

In terms of the Rates Act, payment of the rates is subject to the Municipality determining the amount and the date by which payment must be made. An owner’s obligation to pay rates arises at the commencement of a Municipality’s financial year, when the Municipality determines the rates and becomes payable once the Municipality has determined the date of payment. The Rates Act states that a Municipality may recover rates on a monthly basis or annually as may be agreed upon with the owner of a property . Therefore, the court found that the Municipality is not entitled to claim rates for an entire year at the commencement of its financial year.

It is clear that the Municipality’s requirement for rates to be paid for a full year before issuing a certificate in terms of the Systems Act, adversely affects the right of a property owner to sell their property.

The Court therefore found that the Municipality was not entitled to withhold the rates clearance certificate until it received payment of rates for the entire financial year. Rates becomes payable, but not due at the start of the Municipality’s financial year.

A Municipality may therefore not request payment of rates for a full financial year before issuing a rates clearance certificate.

This newsletter is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

About the author

Leave a Reply