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Fargo and Others v Vecto Trade (Edms) Bpk (LCC96/06) [2007] ZALCC 5 (7 March 2007)

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IN THE LAND CLAIMS COURT OF SOUTH AFRICA

RANDBURG CASE NUMBER: LCC96/06

Before Bam P and Pienaar AJ

In the appeal between:

Decided on: 07 March 2007

SAUL FARGO (SNR) First Appellant

SERA FARGO Second Appellant

SAUL FARGO (JNR) Third Appellant

JAPIE FERREIRA Fourth Appellant

and

VECTO TRADE (EDMS) BPK. Respondent

__________________________________________________________________________________

JUDGMENT

PIENAAR AJ

This is an appeal against an eviction order granted under the Extension of Security of Tenure Act 62 of 1997 by a magistrate in George on 18 April 2006.

[1] Mr Fargo (snr) is an occupier for purposes of the Extension of Security of Tenure Act 62 of 1997 (‘the Act’). It is unclear when Mr Fargo (snr) first took occupation of the residence. In the papers the First Appellant argued that he had been on the property since 1980. The Respondent, however, indicated that the former land owner, namely Vecto Trade (Edms) Bpk’s predecessor in title – Mr Lategan, only took transfer of the property in 1994 at which time the First Appellant was employed. The property was thereafter transferred to the current land owner, the Respondent in the appeal, in 2001. It was clear, however, that the First Appellant had been on the property on 4 February 1997 when the Act commenced.

[2] The residence was occupied by the First Appellant as well as by his wife, Sera Fargo, the Second Appellant. Her right of residence was derived from the First Appellant’s employment agreement in terms of which he occupied the house. Their son, Saul Fargo (jnr) aged 24, also resided with them as well as Japie Ferreira, aged 33. There were factual disputes as to the basis of occupation of these two last-mentioned occupiers.

[3] According to the Respondent the First Appellant, Mr Saul Fargo (Snr), resigned from his employment during June 2003. No reason for the resignation was given, either by the First Appellant or the Respondent. The question whether it was in fact a resignation or a dismissal, will be dealt with in more detail below. Despite the termination of employment, the First Appellant entered into what the Respondent’s counsel referred to as a “fixed period contract” during July 2003 in which his employment was extended until the end of October 2003. This agreement was again extended until 28 November 2003. Apparently the terms of the employment agreement(s) were similar to his original contract, namely that accommodation on the property was linked to his employment.

[4] On 10 November 2003 the Respondent informed the First Appellant that his employment will finally be terminated on 28 November of that year and that he and his family would have to vacate the house at the latest on 10 December 2003. A referral to the Commission for Conciliation Mediation and Arbitration (‘CCMA’) concerning his dissatisfaction with the termination of his employment was made by the First Appellant on 11 November 2003. In the referral the occupier made claims about the unfairness of the dismissal as well as to some moneys still outstanding.

[5] Despite the referral to the CCMA the First Appellant signed an agreement with the land owner on 5 December 2003 in which he acknowledged that all moneys due to him have been paid and that no further claims were outstanding. This document was signed by affixing his thumb print. In terms of this agreement the Appellant was supposed to vacate the house on 10 December 2003.

[6] Despite the agreement mentioned above, the Appellant and the other household members remained in the house. During July 2004 the Respondent started with eviction proceedings against the First Appellant and his family. In the founding affidavits of the Respondent (the Applicant in the a quo proceedings) there was no mention of the referral to the CCMA. The opposing affidavit was submitted during October 2004 in which the First Appellant contested the fairness of his termination of employment.

[7] Time passed until 14 July 2005 at which time the parties reached an agreement during a CCMA conference. In this agreement the First Appellant revoked his referral to the CCMA and agreed to vacate the property on 31 July 2005. The land owner agreed to assist the occupier in finding suitable accommodation and in transporting the family’s belongings to their new residence. Shortly thereafter, however, the First Appellant denied that he understood the contents of the document which he had signed at the CCMA conference and averred that the implications for their accommodation were never explained to him.

[8] On 18 April 2006 the Magistrate in George, after hearing argument of both parties, granted an eviction order. The eviction order granted was very general in nature, with no actual finding as to the relevant section under which the order was finally given. The decision does state, however, that section 9(2) of the Act provides that an eviction order may only be granted once certain requirements have been met and that the Court found that these requirements have in fact been met, namely that:

1. the Respondent (in the a quo proceedings) has ended his employment agreement (“respondent sy dienskontrak beëindig het”);

2. he did not vacate the dwelling;

3. his use of the accommodation was linked to his employment contract;

4. the necessary notices prior to the eviction application had been given; and

5. a probation report had been received.

[9] The Magistrate then commented on the claim by the Respondent that the dispute which was referred to the CCMA, had not been resolved since he did not understand the consequences of the agreement when he signed it. In this regard the Magistrate found that there was supporting evidence that the contents of the agreement had been explained to the Respondent and consequently rejected this argument. Concerning the argument that the right of residence had not been terminated because a dispute was referred to the CCMA, the magistrate found that it could not have been the intention of the legislature to keep a right of residence “alive” as long as the dispute was unresolved. Accordingly he found in favour of the Applicant in the a quo proceedings.

[10] A notice of appeal was filed in May 2006 with the following ground of appeal:

1. That the Magistrate erred when he found that the right of residence had been terminated in terms of section 8 of the Act since this was never alleged by the Appellants or Respondents in their affidavits and there were no facts before him that would substantiate such a finding;

2. That the Magistrate had erred in finding that the termination of the First Appellant’s right of residence had been fair and disregarded the fact that this had been denied by the First Appellant in his affidavit. This matter ought to have been adjudicated upon the hearing of oral evidence;

3. The Magistrate had erred in not finding that the dispute in terms of the Labour Relations Act 66 of 1995 was still pending when the notices of motion in the application had been issued. The matter between the parties was only settled on 14 July 2005, a year after the notice of motion and the alleged giving of the section 9(2)(d)-notices. In this regard the Magistrate misdirected himself to the effect of section 8(2) and 8(3) of the Act in that he found that the pending labour dispute did not suspend the termination of the right of residence of the Appellants until it had been resolved by the CCMA.

4. The Magistrate misdirected himself as to the validity of the settlement agreement which was concluded before the CCMA on 14 July 2005. The submission was that it would be null and void in accordance with section 25 of the Act.

5. The Magistrate misdirected himself in finding that the necessary notices had been given to the occupiers, Local Authority and the Department of Land Affairs in terms of section 9(2)(d) since such notices could only be given after the termination of the right of residence. It was submitted that these notices preceded the termination of the right of residence of the First Appellant; and that

6. The Magistrate misdirected himself in finding that the Respondent proved that he complied with section 9(2)(c) of the Act since the Appellants denied allegations made by the Respondent regarding section 10(1)(a), 10(1)(c) and 10(3) and no oral evidence had been led on the subject.

[11] During the appeal proceedings an application for condonation for late filing of papers was first dealt with which condonation was granted unopposed.

First ground of appeal

[12] It was argued that the Magistrate erred when he found that the right of residence had been terminated in terms of section 8 of the Act since this was never alleged by the Appellants or Respondents in their affidavits and there were no facts before him that would substantiate such a finding. During argument counsel for the First Appellant indicated that there were various agreements that were terminated since June 2003 and November 2003 and that the Magistrate must have confused the various agreements when he found that it was the First Appellant who “resigned” his employment. It was never proven on the facts that termination of the employment during June had been a resignation. Since the last of the fixed period contracts was terminated on 10 November 2003 by the employer and not by the First Appellant, there can thus be no finding that the First Appellant had terminated his own employment, as was found by the Magistrate. Despite this finding that the First Appellant had terminated his employment, the Magistrate gave no indication when the employment was so terminated.

[13] The Respondent’s counsel showed that on the papers there was clearly a factual dispute as to whether the First Appellant resigned or was dismissed. With reference to De Reszke v Maras¹ it was argued that such a dispute may be resolved by hearing viva voce evidence by remitting the matter to the court a quo. Alternatively, the argument was raised that the First Appellant’s version of what had happened was clearly “palpably implausible”, resulting in the correct conduct of the Magistrate to reject that version. In the latter instance no recourse to oral evidence would then be necessary (see South African Veterinary Council v Szymanski 2003 (4) SA 42 (SCA) at 50G-51G and Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA) at 347E – 348B). In support of the Respondent’s case counsel emphasized that the First Appellant had not only signed one document by adding his thumb print, but signed numerous documents – only to withdraw his signature at a later stage; and that there were various affidavits stating that the contents of the various documents had in fact been explained to the First Appellant. It was thus “palpably implausible” that he did not understand the documents to which he affixed his thumb print.

[14] The Respondent’s counsel also drew attention to the wording of section 8(2) which allows the Court to grant an eviction order when the right of residence arises solely from the employment contract and the occupier resigns or is dismissed in terms of the Labour Relations Act. According to counsel, the Act does not specifically provide for cases like this where there were fixed period contracts involved. However, with reference to Zorgfliet Farm & Estate (Edms) Bpk v Regina Alberts and Another² it is clear that section 8(2) is also applicable to termination of employment by agreement between the relevant parties.³ Counsel for the Respondent then argued that, if one enters willingly into a fixed term agreement (like the First Appellant in this instance), knowing that it will end in the near future, then that is the same as a resignation, thereby incorporating section 8(2). When the period thus expires, it cannot be a dismissal in terms of the Labour Relations Act, but a resignation in stead. On the other hand, the First Appellant’s counsel indicated that such a fixed term contract gives permission to live on the property and can still give rise to a dismissal when it is terminated prematurely. On the papers, it was not clear whether there was the possibility of extending the fixed term contract for a further period. The exact circumstances surrounding the termination of employment therefore remain unclear.

[15] The question whether the First Appellant resigned voluntarily or was dismissed, is crucial to the issue because it would determine whether section 10(1)(d) of the Act is relevant or not. If the resignation was voluntary and the right of residence was linked to the employment agreement, the Court may grant an eviction order without considering matters like suitable alternative accommodation. If the resignation was voluntary, the whole issue about a referral to the CCMA, which has a direct impact on the date on which the right of residence was terminated, as well as the consequences thereof for service of notice (to be dealt with in more detail below), need not be dealt with at all. This issue can clearly not be decided on the papers. The court thus has one of two options: (a) to remit the whole issue back to the Magistrate’s Court to deal with by way of viva voce evidence; or (b) find that the First Appellant’s version was palpably implausible or not, and respond accordingly.

Second ground of appeal

[16] It was stated that the Magistrate had erred in finding that the termination of the First Appellant’s right of residence had been fair and disregarded the fact that this had been denied by him in his affidavit. This matter ought to have been adjudicated upon the hearing of oral evidence. When the First Appellant’s employment was terminated on 10 November 2003, after which he immediately made a referral to the CCMA, the right of residence had not been terminated yet. The Magistrate furthermore never made a finding as to when the right of residence had in fact been terminated.

Third ground of appeal

[17] The First Appellant’s counsel argued that the Magistrate had erred in not finding that the dispute in terms of the Labour Relations Act was still pending when the notices of motion in the application had been issued. The matter between the parties was only settled on 14 July 2005, a year after the notice of motion and the alleged giving of the section 9(2)(d)-notices. In this regard the Magistrate misdirected himself to the effect of section 8(2) and 8(3) of the Act in that he found that the pending labour dispute did not suspend the termination of the right of residence of the Appellants until it had been resolved by the CCMA. In this regard the First Appellant’s counsel referred the court to Jaco Hough Boerdery Trust and Paul Smith and others⁴ where Judge Moloto found that the section 9(2)(d) notices may only be given after the termination of the right of residence.⁵ Where there is no evidence of such termination, the giving of the notices is a nullity. In Landbounavorsingsraad v Klaasen⁶ Judge Gildenhuys found that if the right of residence was terminated only after the section 9(2)(d) notices were given, then these notices were invalid. If the notice to vacate under section 9(2)(d) was given when the defendant’s right of residence was still in existence, it would also be invalid.⁷ Counsel furthermore indicated that the Magistrate never made an actual finding, as to when the right of residence was terminated. The First Appellant’s argument is that it was only terminated on 14 July 2005 when the matter was settled during the CCMA conference, which was after the section 9(2)(d) notices were issued. Anglo Operations Limited t/a Kriel Colliery v Welcome Madlopha⁸ also confirmed that the right of residence was only terminated once all the procedures afforded the occupier had been exhausted, although in this case, it was exhausted by a dispute resolution committee after a referral to the CCMA failed.⁹ The latter case also referred to Hodengarde v Zondi and Another¹⁰ where Judge Meer found that referrals to the CCMA may not be used to delay evictions. The failure of an employee to pursue referrals to the CCMA and a dispute remaining unresolved for that reason, ought not to constitute grounds for finding that the dispute is undetermined for purposes of section 8(3).

[18] Consequently, so counsel for the First Appellant argued, pursuing a dispute and thereby keeping the case active (like in this instance until it was finally resolved by way of agreement more than a year later) would mean that the dispute was only resolved when the agreement was entered into during the CCMA conference at which time the right of residence was finally terminated. In Kloof Gold Mining Limited t/a Leeudoorn Gold Mine v Mnengele and Another¹¹ it was also found that the right of residence was only terminated after the labour issues had been finalized. In this particular case, due to the particular facts, the proceedings were dismissed on 13 December 2000. The right to occupy was cancelled after that date, during May 2001. Thus, section 9(2)(d) notices may only be given once the right of employment and the right of residence had been terminated and not before that time. Counsel for the First Appellant also indicated that an application for condonation concerning irregular filing of notices would not cure the short-coming, since case law found that these notices were invalid and that the service was a nullity.

[19] In response to this argument the Respondent’s counsel averred that the labour dispute was withdrawn on 14 July 2005, accordingly the Magistrate’s court was not prevented by section 8(3) to grant the eviction order and that the Applicant in the a quo proceedings had complied with section 9(2)(d) of the Act. It was also stated that the right of residence was terminated with effect from 10 December 2003. The eviction order was granted on 18 April 2006 with 15 June 2006 as the date by which the house had to be vacated – effectively two and a half years after the right of residence was terminated. The validity of the referral to the CCMA was also questioned by the Respondent’s counsel. With reference to Hodengarde v Zondi and Another¹² it was argued that the referral was never actively pursued since the Respondent in the present proceedings had no knowledge of the referral when he initiated the eviction proceedings in 2004.

Fourth ground of appeal

[20] It was stated that the Magistrate misdirected himself as to the validity of the settlement agreement which was concluded before the CCMA on 14 July 2005. The First Appellant submitted that it would be null and void in accordance with section 25 of the Act. In the heads of argument counsel for the First Appellant argued that both the letter signed on 5 December (indicating that the occupier had to vacate the house on 10 December 2003) as well as the settlement agreement entered into at the CCMA were agreements in which the occupier waived his rights (to accommodation) without the necessary legal advice. These agreements should accordingly be invalid in terms of section 25 of the Act. However, during argument before the Court, counsel for the First Appellant conceded that the agreement entered into during the CCMA conference finalized the labour dispute.

[21] Counsel for the Respondent emphasized that supporting affidavits indicated that the contents of these various documents had been explained to the First Appellant and that he had signed them in the presence of witnesses. Also, in view of the fact that the Respondent argued that there was a resignation, the settlement agreement cannot be seen as a waiver of rights and would thus not fall within the ambit of section 25. Furthermore, section 25(2) states that a Court can have regard to such agreements but is not bound by it. Thus, it does not automatically disqualify all agreements. Counsel for the First Appellant then pointed out that section 25(1) and 25(2) relate to different matters: section 25(1) to the waiver of rights and section 25(2) to the restriction or limitation of the list of general rights of occupiers. It is the latter kind of agreement that the Courts may consider but are not bound by. Here section 25(1) was relevant since the agreements entailed a total waiver of his right to accommodation.

Fifth ground of appeal

[22] First Appellant’s counsel argued that the Magistrate misdirected himself in finding that the necessary notices had been given to the occupiers, Local Authority the Department of Land Affairs in terms of section 9(2)(d) since such notices could only be given after the termination of the right of residence. It was submitted that these notices preceded the termination of the right of residence of the First Appellant. This argument had already partly been dealt with under the third ground of appeal above. Since the right of residence was only terminated when the settlement agreement was reached during the CCMA conference in July 2005, the service of notices was premature. Counsel for the Respondent argued that the right of residence had been terminated on 10 December 2003 and that the notices were delivered after that date, accordingly the requirements of section 9(2)(d) had been met.

Sixth ground of appeal

[23] It was stated that the Magistrate misdirected himself in finding that the Respondent proved that he complied with section 9(2)(c) since the Appellants denied allegations made by the Respondents regarding section 10(1)(a), 10(1)(c) and 10(3) and no oral evidence had been led on the subject. Section 9(2)(c) states that an eviction order may only be granted if the conditions for such an order in terms of section 10 or section 11 have been complied with. Section 10 relates to persons who were occupiers on 4 February 1997, being the date the Act was published for comment. Section 11 on the other hand, relates to persons who became occupiers after that date. Presently section 10 is relevant and provides that an eviction order may be granted if

“(1)(a) the occupier has breached section 6(3) and the court is satisfied that the breach is material and that the occupier has not remedied such breach;

(b)….

(c) the occupier has committed such a fundamental breach of the relationship between him or her and the owner or person in charge, that it is not practically possible to remedy it, either at all or in a manner which could reasonably restore the relationship.

(d)….”

[24] Section 10(3) provides the following:

“If –

1. suitable alternative accommodation is not available to the occupier within a period of nine months after the date of termination of his or her right of residence in terms of section 8;

2. the owner or person in charge provided the dwelling occupied by the occupier; and

3. the efficient carrying on of any operation of the owner or person in charge will seriously be prejudiced unless the dwelling is available for occupation by another person employed by the owner or person in charge,

the court may grant an order for eviction of the occupier and of any other occupier who lives in the same dwelling as him or her, and whose permission to reside there is wholly dependent on his or her right of residence if it is just and equitable to do so, having regard to –

(i) the efforts to which the owner or person in charge and the occupier have respectively made in order to secure suitable alternative accommodation for the occupier; and

(ii) the interests of the respective parties, including the comparative hardship to which the owner or person in charge, the occupier and the remaining occupiers shall be exposed if an order for eviction is or is not granted.”

[25] The argument of the First Appellant’s counsel is that the Magistrate did not refer to section 10 in particular, but, even if he did, the factual disputes in the affidavits would have prevented the Magistrate from making the finding that he had. In motion proceedings averments may only be ignored when they are palpably implausible. The First Appellant’s denials on the papers were substantial and not of such a nature that it could be ignored by the Court. The main bone of contention, according to the Appellant’s counsel was that the Magistrate gave no indication as to the basis on which he found that section 9(2)(c) has been complied with. Counsel for the Respondent also underlined the importance of identifying the relevant subsection in this instance. However, due to the many factual disputes surrounding the circumstances that led to the termination of employment, it remained a matter of speculation. Counsel for the Respondent did, however, argue that the papers contained evidence of a breach between the parties, but conceded that the Magistrate did not pin-point the exact section relevant.

Finding

[26] It is trite that the First Appellant’s right to accommodation arose solely from his employment contract. The exact circumstances under which the employment contract was terminated remains unclear. In these circumstances it was impossible for the Magistrate to find that the First Appellant had terminated his employment himself. Nor could the Magistrate find that the employment had been terminated in terms of section 8 of the Act. The evidence before the court a quo, in the absence of hearing oral testimony, was of such a nature that the Magistrate could not have found that the termination of employment was fair.

[27] What is clear, however, is that the First Appellant referred a dispute to the CCMA during November 2003. In accordance with section 8(3) any dispute over whether an occupier’s employment has terminated as contemplated in section 8(2), has to be dealt with in accordance with the provisions of the Labour Relations Act and the termination shall take effect when any dispute over the termination has been determined in accordance with that Act. In accordance with the Labour Relations Act the dismissal was referred to the CCMA which matter was resolved by settlement on 14 July 2005. There is no evidence that the First Appellant abandoned his referral to the CCMA. Nor is there a condonation application indicating that he had not complied with the prescribed time periods. The labour issue was thus “kept alive” until it was finally settled in July 2005. First Appellant’s initial argument was that all of the agreements entered into would be invalid in terms of section 25, but later conceded that for purposes of the labour dispute, the settlement agreement did resolve the labour issues. This is in line with section 8(3) of the Act.

[28] In view of the above, the right of employment, as well as the right of residence could only be terminated once the labour dispute had been resolved at the CCMA after which the necessary notices would have to be served. The labour dispute was thus still pending when the section 9(2)(d) notices were served.

[29] With reference to Jaco Hough Boerdery Trust and Paul Smith and others¹³, Landbounavorsingsraad v Klaasen¹⁴ and Kloof Gold Mining Limited t/a Leeudoorn Gold Mine v Mnengele and Another¹⁵ the section 9(2)(d)-notices served on the occupiers, Local Authority and the Department of Land Affairs by the Respondent were thus premature and a nullity.

[30] Furthermore, the Magistrate found incorrectly that the Respondent proved that he complied with section 9(2)(c). Appellants denied allegations made by the Respondents regarding section 10(1)(a), 10(1)(c) and 10(3) and no oral evidence had been led on the subject. The Magistrate also refrained from identifying the relevant section for eviction, thereby questioning the basis on which the eviction order was granted.

[31] For these reasons the Court finds that the appeal is successful. The next issue to decide is whether, although the appeal has succeeded, the case should be remitted to the Magistrate, as requested by Respondent’s counsel.

[32] Section 28N of the Restitution of Land Rights Act 22 of 1994 sets out the powers of the court in relation to appeals. Section 28N(b) enables the Land Claims Court as court of appeal to remit the case to the court of first instance for further hearing, with instructions as regards the taking of further evidence or otherwise, as the court considers necessary.

[33] The weight of authority and practice in our courts is to the effect that the power of the court on appeal to remit for further evidence should be exercised sparingly and only when circumstances are exceptional¹⁶. An example of such exceptional circumstances is the case where the court allowed remitting for evidence of facts which only came into existence after the judgment appealed against had been given and were material¹⁷.

[34] It seems to be generally accepted that although no specific or definite rules have been pronounced as to when the court should grant an application to remit for further evidence upon appeal, certain basic requirements are recognized such as:

(a) There should be some reasonably sufficient explanation, based on allegations which may be

true, why the evidence which it is sought to lead was not led at the trial.

2. There should be a prima facie likelihood of the truth of the evidence.

3. The evidence should be materially relevant to the outcome of the trial.

The practice in this court has been that the power vested in it to remit for further evidence has not only been sparing but rare. Indeed none could be found after diligent search, except in cases of automatic reviews. This is largely because in the cases involving evictions in terms of the Extension of Security of Tenure Act 62 of 1997 the prescribed procedures generally allow no room for conjecture- compliance is either established or it is not.

[35] In the instant case, counsel for the respondent, after readily conceding that the magistrate’s judgment left much to be desired, has nonetheless made the submission for remittal to the court a quo primarily to resolve a factual dispute as to whether termination of employment was by resignation or by dismissal in accordance with the provisions of the Labour Relations Act.

[36] In the light of the findings made on other aspects of the appeal, as set out in paragraphs above, it is our view that this is not the only difficulty facing the respondent .The respondent has, therefore, not made out a satisfactory case for the extra-ordinary relief to remit for viva voce evidence before the magistrate as such remittal would achieve no purpose. The application is accordingly refused

For these reasons the Court finds that the appeal is successful and the case need not be remitted to the Magistrate’s Court.

Order:

1. The appeal succeeds;

2. The order of the court a quo is set aside in its entirety;

3. The application for remittal to the court a quo for viva voce evidence or for trial is dismissed,

4. No order as to cost

_______________________

PIENAAR AJ

Judge Bam concurred

__________________

BAM P

LAND CLAIMS COURT

For the Appellants:

JM Geyser, instructed by Wits Law Clinic

For the respondents:

SF Mouton, instructed by CJ Ballan Ing / Bezuidenhout, Van Zyl & Associated