Venter v Khan and Others (14185/2011) [2014] ZAKZDHC 48 (3 November 2014)

Venter v Khan and Others (14185/2011) [2014] ZAKZDHC 48 (3 November 2014)

The court found that clause 7 of the extension agreement, which purported to allow the employer to reclaim the defendant's membership interest in Bubaluba Properties CC upon her resignation, was unconscionable and contrary to public policy. The clause operated as a penalty, depriving the defendant of remuneration she had earned through her performance and tenure. The evidence established that the defendant was constructively dismissed due to the plaintiff's conduct, including demotion, unfounded allegations, unreasonable demands, and breaches of remuneration agreements. The plaintiff's actions undermined the relationship of trust and confidence, rendering continued employment intolerable....

Citation
[2014] ZAKZDHC 48
Parties
Plaintiff: Andre Venter; Defendant: Ayesha Khan; Defendant: Bubaluba Properties CC; Defendant: Companies and Intellectual Properties Commission
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
3 November 2014
Case Number
14185/2011
Procedural Posture
Civil Trial / Final Judgment
Outcome
Plaintiff's claim for transfer of membership interests dismissed; defendant's counterclaim for rectification, transfer of membership interest, and payment of remuneration and leave pay granted.
Judges
D Pillay
Legal Topics
Constructive Dismissal, Remuneration Dispute, Forfeiture Clause, Contra Bonos Mores, Rectification of Contract, Close Corporation Membership
Labour Law Commercial and Corporate Constructive Dismissal Remuneration Dispute Forfeiture Clause Contra Bonos Mores Rectification of Contract Close Corporation Membership

Case Brief

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Parties

Andre Venter

Plaintiff

Ayesha Khan

Defendant

Bubaluba Properties CC

Defendant

Companies and Intellectual Properties Commission

Defendant

Procedural Posture

Civil Trial / Final Judgment

Legal Issues

  1. 1 Is the plaintiff entitled to rectification of clause 7 of the extension agreement to substitute 'employee' for 'employer'?
  2. 2 Do the benefits in clause 7 relate exclusively to the extension agreement or also to the 2002 agreement?
  3. 3 Is the plaintiff entitled to the transfer back of the defendant's membership interest in Bubaluba, or is the defendant entitled to 55% or more of the interest?

Ratio Decidendi

The court found that clause 7 of the extension agreement, which purported to allow the employer to reclaim the defendant's membership interest in Bubaluba Properties CC upon her resignation, was unconscionable and contrary to public policy. The clause operated as a penalty, depriving the defendant of remuneration she had earned through her performance and tenure. The evidence established that the defendant was constructively dismissed due to the plaintiff's conduct, including demotion, unfounded allegations, unreasonable demands, and breaches of remuneration agreements. The plaintiff's actions undermined the relationship of trust and confidence, rendering continued employment intolerable....

Court Disposition

Plaintiff's claim for transfer of membership interests dismissed; defendant's counterclaim for rectification, transfer of membership interest, and payment of remuneration and leave pay granted.

Orders

  • Clause 7 of the extension agreement is rectified to substitute 'employee' for 'employer'.
  • Plaintiff's claim for transfer of membership interests from the first defendant to the second defendant is dismissed with costs.