Fransman v University of Namibia (SA 37/2022) [2024] NASC 29 (11 September 2024)

REPORTABLE

CASE NO: SA 37/2022

IN THE SUPREME COURT OF NAMIBIA

In the matter between:

LAETITIA FRANSMAN Appellant

and

UNIVERSITY OF NAMIBIA Respondent

Coram: UEITELE AJA, PRINSLOO AJA and SCHIMMING-CHASE AJA

Heard: 21 June 2024

Delivered: 11 September 2024

Summary: The respondent (as the plaintiff in the court a quo) issued summons against the appellant (the defendant in the court a quo) seeking general damages resulting from a breach of contract. In its particulars of claim, the respondent alleged that the appellant breached an agreement with the respondent dated 8 April 2014, in terms of which the appellant would pursue further studies to obtain a PhD qualification for a period of one year as from 01 January 2014 to 31 December 2014. The aforesaid breach was as a result of the appellant resigning from employment with the respondent during 2016, before completion of her PhD qualification and without having completed her bonding period – in violation of the agreement signed on 8 April 2014.

The respondent averred that appellant breached the agreement in that she failed or neglected or both failed and neglected to repay the respondent the financial assistance provided to her during her period of studies for the year 1 January 2014 until 31 December 2014, despite various demands. As a result of the appellant’s breach, the respondent suffered damages in the amount of N$624 032.05.

The court a quo found that the appellant did indeed breach the contract and that the respondent was entitled to the relief claimed. The appellant, aggrieved by the finding of the court a quo, noted an appeal to this court on 19 May 2022, against the whole of the judgment and order (including the cost order) of the court a quo.

Held that, the court a quo was correct in finding that appellant breached the agreement when she resigned from the respondent’s employment without having successfully completed her PhD studies.

Held further that, the failure by the appellant to serve the respondent for a period of 12 months in terms of the agreement resulted in a loss to the respondent and that such loss was in fact directly caused by the appellant’s failure to serve the respondent for a period of twelve months after she successfully obtained her PhD.

Held further that, the respondent’s claim for damages is one flowing naturally and generally from the appellant’s breach of contract and one which the law should presume to have been contemplated by the parties as a probable result of the breach.

Held further that, the breach caused by the appellant falls fairly and squarely within the category of loss for which general damages are awarded and the court a quo was therefore correct in holding that the respondent was entitled to the damages claimed.

Consequently the appeal is dismissed with costs.

____________________________________________________________________

APPEAL JUDGMENT

____________________________________________________________________

UEITELE AJA (PRINSLOO AJA and SCHIMMING-CHASE AJA concurring):

Introduction

[1] The old adage, ‘context is everything’ is central in this appeal. In so many scenarios words alone ring hollow. Context gives life and meaning to what is said or written. With that said, one asks the question ‘how far is a court of law then entitled or required (if it is), to take cognisance of context when interpreting a contract?’ This is one of the questions that this Court is called upon to answer in this appeal.

[2] At the core of this matter is a dispute over the obligation of the appellant to repay moneys that the respondent spent on her when she was granted leave of absence to pursue her doctoral studies on a full time basis. The solution to the dispute lies in the answer to whether or not the appellant completed her studies and thereafter served the respondent thus fulfilling her obligations to the respondent. This requires this Court to consider an antecedent question: can contextual evidence be brought, and used, to give meaning to the question of whether or not the appellant completed her studies?

[3] The appellant Dr Laetitia Fransman, was formerly employed as a lecturer by the University of Namibia, who is the respondent in this appeal. The University of Namibia is a public institution of higher education established in terms of s 2 of the University of Namibia Act, 1992.¹ I will, in this judgment, refer to the appellant as Dr Fransman and to the respondent as the University.

[4] This matter came before us as an appeal against a judgment of the High Court where that Court found that Dr Fransman breached an agreement in terms of which she undertook to work for the University for a period equivalent to the duration of the study leave that she was granted to pursue her studies towards the acquisition of a PhD degree.

Background facts

[5] Dr Fransman commenced her employment as a lecturer with the University on 1 August 2001. During the first part of her tenure as a lecturer, she successfully completed her Master’s degree and in 2006, applied for ‘staff development status’ to, on a part-time basis, study towards a PhD degree with the University of South Africa (UNISA), the largest open distance tertiary learning institution in Africa. During 2010 she applied for change of institution from UNISA to the University of Pretoria.

[6] On 26 September 2013, she applied to the University’s Human Resource Committee for consent to be granted leave of absence (study leave) for a period of 12 months, that is the 2014 academic year commencing on 1 January 2014 and ending on 31 December 2014, to enable her to continue her studies towards the PhD degree at the University of Pretoria on a full-time basis.

[7] On 17 December 2013 the University informed Dr Fransman that her application for staff development status for full-time studies for the period of 12 months (that is from 1 January 2014 to 31 December 2014) was approved, but on certain conditions. One of the conditions was that Dr Fransman was required to sign an agreement with the University, which was subsequently done. Dr Fransman signed the memorandum of agreement on 27 January 2014 and Ms Barbara Seibes-Bok, the University’s Assistant Director for Organisation Development, signed the memorandum of agreement on behalf of the University on 8 April 2014. The memorandum of agreement is a four page document consisting of five clauses. The memorandum of agreement was admitted into evidence as Exhibit “H”. I will later in the course of this judgment in detail set out the relevant clauses of the agreement and will throughout this judgment refer to it as Exhibit H.

[8] During 2014, Dr Fransman was on full time study leave and pursued her studies at the University of Pretoria. As from 1 January 2015, she resumed her normal working hours and duties while still pursuing her PhD degree on a part-time basis. During the proceedings in the High Court, she testified that during 2016 she was subjected to recurring instances of domestic violence and abuse from her ex-husband. She further testified that as a consequence of the domestic violence she applied for consent to be relocated to the University's campus in Swakopmund, Republic of Namibia. The University advised her that it could not grant her request. As a consequence she, on 5 October 2016, ‘involuntarily’ tendered her resignation from the University with her last day of service being 31 December 2016. During December 2016 she relocated to Swakopmund. Eight months later (that is on 17 August 2017) she graduated and was conferred with the PhD degree.

[9] The University, alleges that Dr Fransman breached the memorandum of agreement, in that she resigned from the University’s employment before she completed her PhD studies. The University further alleged that Dr Fransman breached the memorandum of agreement by failing or neglecting or both failing and neglecting to repay to the University (as per the agreement) the financial assistance provided to her during her period of studies at the University of Pretoria (that is the period 1 January 2014 to 31 December 2014). Based on these allegations the University, on 9 February 2019, issued summons out of the High Court claiming payment in the amount of N$624 032.05 which it alleges are the losses it suffered as a result of Dr Fransman’s breach of Exhibit H.

The High Court

[10] As I indicated earlier, the University launched proceedings out of the High Court by issuing summons in terms of which it sought payment in the amount of N$624 032.05 in respect of losses it alleges it suffered as a result of Dr Fransman’s breach of Exhibit H. Dr Fransman resisted the University’s claim, and the matter went on trial.

[11] The High Court, based on the pre-trial order issued by that Court, identified two legal issues and a few factual issues that it was required to determine. The factual disputes which the High Court identified for its determination were:

1. Whether the defendant repudiated the agreement (Exhibit H), between the parties;

2. whether the defendant worked her ‘bonding period’;

3. whether the defendant is liable to the plaintiff in the amount of N$624 032.05 for the financial assistance provided to her during the period of studies at the University of Pretoria;

4. whether the defendant completed her PhD qualification before resignation from employment with the plaintiff (although it seems that this point was admitted); and

5. whether the bonding period can be extended to the period after defendant's resignation from full-time employment with plaintiff.

[12] The legal issues which had to be determined were:

1. whether Dr Fransman breached Exhibit H between her and the University; and

2. whether the bonding period applies before successful completion of studies of the staff development status holder.

[13] The High Court in answering both the factual and legal questions in favour of the University stated that:

‘[43] . . . it becomes evident that the words in clauses 3 and 4 of the 2014 agreement [that is, Exhibit H] should be given their true meaning and this court sees no reason to deviate from that approach. The clauses provide that the fellow/status holder shall work for the employer for a bonding period which shall be equivalent to the study leave granted, after successful completion of the studies which are to be paid for by the employer. The agreement also provides for a remedy in the event that this is not complied with. There was indeed non-compliance with the agreement and the plaintiff is entitled to bring this action to hold defendant to the terms of the agreement.

[44] With regards to the damages claimed by the plaintiff as a result of the breach by the defendant, the learned authors Visser and Potgieter in Law of Damages discuss general damages as follows:

“General damages (also referred to as intrinsic damages) often refers to damage which is legally presumed to flow from an unlawful act or breach of contract which need to be generally pleaded only. The contractual context of general damages is that the loss that flows naturally from the breach of contract and which presumes to have been within contemplation of the parties as a realistic possibility of occurrence. In such a case the plaintiff has to prove merely the extent of his damage and not that it was foreseeable, as the law presumes such foreseeability.”

[45] It is clear from the reading of the agreement, particularly clause 3.3.4, that both parties could have and should have reasonably contemplated the damages that would flow from the non-compliance with the terms of the contract. This is also supported by the fact that the defendant approached the staff development office, requesting a calculation of how much she would owe the plaintiff if she were to resign, this shows that she was aware that there would be financial consequences which would flow from the agreement.

Conclusion

[46] From the testimony of the defendant it is evident that the defendant had no intention or desire initially to terminate her employment with the plaintiff, and as a result of such termination, breached the agreement. She was however, unfortunately forced by her impossible circumstances to do so. It is also evident that she tried to remain in the employ of the plaintiff, by informing her employer of her personal circumstances and tried to persuade the plaintiff to relocate her to the office in Swakopmund. This court is if the opinion that the plaintiff, particularly the Wellness department of the plaintiff, could have done more to assist the defendant with her situation. Sadly, this court is however not tasked with the determination of the actions of the plaintiff or the lack thereof, what is before this court is strictly the interpretation of the contract entered into between parties.

[47] Taking into account all the evidence tendered at trial, this court is of the opinion that the defendant did indeed breach the contract, and that the plaintiff is entitled to the relief claimed.’

[14] Dr Fransman is aggrieved by the judgment and the orders of the High Court, hence she has lodged this appeal against the entire judgment and orders of the High Court.

Grounds of appeal

[15] Dr Fransman raised five main grounds of appeal and twenty four sub-grounds of appeal. The grounds of appeal can be summarised as follows:

1. The court a quo erred in law in finding that the appellant failed to comply with the provisions of the agreement (Exhibit H) which was not the prevailing contract at the time of Dr Fransman’s resignation from the University.

2. The court a quo misdirected itself in interpreting Exhibit H and finding that Dr Fransman was obliged to complete her PhD qualification during 2014 and after completion, return to work for the University for one year.

3. The court a quo misdirected itself in finding that Exhibit H requires Dr Fransman to obtain a PhD in 2014 in order for the bonding period to ensue.

4. The court a quo misdirected itself in finding that Dr Fransman failed to comply with Exhibit H and is therefore liable to pay the University the amount of N$624 032,05 together with costs.

5. The court a quo misdirected itself and erred in law or fact or both in law and fact in not dismissing the University’s claim following admissions made by the University’s witnesses and the totality of evidence presented.

[16] The court a quo’s alleged errors in law by finding that Dr Fransman failed to comply with the provisions of Exhibit H, allegedly arose because the High Court failed to interpret Exhibit H in line with the general principles relating to the interpretation of contracts.

The issues for determination on appeal

[17] The question that we are called upon to determine in this appeal turns on an extremely short and narrow compass. It concerns the interpretation and application of clauses 3 and 4 of Exhibit H.

[18] I find it relevant to briefly revisit the principles relating to the interpretation of legal documents as explained by our courts, before I turn to the question that we are required to determine.

The approach to the interpretation of legal documents

[19] This Court has in no uncertain terms clearly stated that when a court determines the nature of the parties’ rights and obligations in a contract, it is involved in an exercise of contractual interpretation. It follows then, that the determination of whether a party has complied with its obligations is a matter of contractual interpretation. That means that the inquiry must adhere to the strictures of the now settled approach to the interpretation of contracts. But what does that approach entail?

[20] This Court quoting the position famously set out in Natal Joint Municipal Pension Fund v Endumeni Municipality (Endumeni)² in the following widely-quoted statement, held that:

‘Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The ‘inevitable point of departure is the language of the provision itself’, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.’³

[21] In Egerer & others NO v Executrust (Pty) Ltd & others,⁴ this Court held that the approach to interpretation is ‘essentially one unitary exercise’ in which both text and context are relevant to construing the contract.⁵ This approach to interpretation requires that ‘from the outset one considers the purpose, context and the language together, with neither predominating over the other’. This means that interpretation is to be approached holistically, simultaneously considering the text, context and purpose.

[22] The South African Constitutional Court in University of Johannesburg v Auckland Park Theological Seminary & another,⁶ commented that the approach in Endumeni modernised the previous position, which was that context could only be resorted to if there was ambiguity or lack of clarity in the text. The Constitutional Court approving the sentiments expressed in Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd⁷ further stated that context and purpose must be taken into account as a matter of course, whether or not the words used in the contract are ambiguous. It said:

‘A court interpreting a contract has to, from the onset, consider the contract’s factual matrix, its purpose, the circumstances leading up to its conclusion, and the knowledge at the time of those who negotiated and produced the contract. This means that parties will invariably have to adduce evidence to establish the context and purpose of the relevant contractual provisions. That evidence could include the pre-contractual exchanges between the parties leading up to the conclusion of the contract and evidence of the context in which a contract was concluded…A court must examine all the facts – the context – in order to determine what the parties intended. And it must do that whether or not the words of the contract are ambiguous or lack clarity. Words without context mean nothing.’

[23] The Constitutional Court, in University of Johannesburg thus affirmed that an expansive approach must be taken to the admissibility of extrinsic evidence of context and purpose, so as to determine what the parties to the contract intended. The Court clarified the position as follows:

‘Let me clarify that what I say here does not mean that extrinsic evidence is always admissible. It is true that a court’s recourse to extrinsic evidence is not limitless because “interpretation is a matter of law and not of fact and, accordingly, interpretation is a matter for the court and not for witnesses”. It is also true that “to the extent that evidence may be admissible to contextualise the document (since ‘context is everything’) to establish its factual matrix or purpose or for purposes of identification, one must use it as conservatively as possible”. I must, however, make it clear that this does not detract from the injunction on courts to consider evidence of context and purpose. Where, in a given case, reasonable people may disagree on the admissibility of the contextual evidence in question, the unitary approach to contractual interpretation enjoins a court to err on the side of admitting the evidence. There would, of course, still be sufficient checks against any undue reach of such evidence because the court dealing with the evidence could still disregard it on the basis that it lacks weight. When dealing with evidence in this context, it is important not to conflate admissibility and weight.’⁸

[24] In its guidance to admit extrinsic evidence of context and purpose the Constitutional Court did not lose sight of the parol evidence rule in our law. It reconciled the two (the admission of extrinsic evidence and the parole evidence rule) as follows:

‘The integration facet of the parol evidence rule relied on by the Supreme Court of Appeal is relevant when a court is concerned with an attempted amendment of a contract. It does not prevent contextual evidence from being adduced. The rule is concerned with cases where the evidence in question seeks to vary, contradict or add to (as opposed to assist the court to interpret) the terms of the agreement.’⁹

[25] From the foregoing discussion one can summarise the approach to interpretation of legal documents as follows: A general principle of statutory interpretation is that the words used in a legal document (be it a statute or contract) must be understood in their normal grammatical sense unless this would lead to an absurd result. To this general principle the following principles must be added namely that a legal document must be interpreted purposively. Secondly, the relevant provision must be properly contextualised, and lastly, all legal documents must be construed consistently with the Constitution.

[26] Having set out how legal documents must be interpreted I will briefly, before I consider the question that we must resolve, summarise the submissions made on behalf of the parties in this appeal.

Submissions on appeal

[27] Counsel for Dr Fransman centred his submissions on his contention that the University pleaded its case by averring that Dr Fransman was obligated to obtain a PhD qualification within a period of one year as from 01 January 2014 to 31 December 2014. He further contended that the University pleaded that Dr Fransman, upon successful completion of her studies, had an obligation to work for the University for a period equivalent to the duration of study leave granted one year to her.

[28] Based on the contentions set out in the preceding paragraph, counsel for Dr Fransman argued that the High Court failed to have regard to the supporting documents,¹⁰ which inform the background and context within which Dr Fransman applied for the one year leave of absence. Counsel argued that based on those documents, it is clear that Dr Fransman’s intention was to apply for leave of one year to write chapters of her PhD thesis and not to complete the PhD degree. He thus argued that the purposes for which Dr Fransman applied for leave was not to complete the PhD degree but to finalise chapters of her thesis, which she successfully did. He further argued that after she successfully submitted chapters of her PhD thesis, Dr Fransman returned to the University and worked during the year 2015 thus complying with the bonding period contemplated in clause 4 of Exhibit H.

[29] Counsel for Dr Fransman thus argued that since Dr Fransman did not apply for leave of absence to complete her PhD degree but to finalise chapters of her thesis, that is the context and purpose that must inform us as to the meaning that we must attach or place to or on the phrase ‘upon successful completion of studies’ in clauses 3 and 4 of Exhibit H, and the meaning is that what was required of Dr Fransman was that she completes the writing of the chapters of her PhD thesis and not the obtaining of the PhD degree. Counsel thus argued that:

‘Nothing contained in these documents [that is Exhibit H1 & H2] shows that the parties’ intention was for the Appellant [Dr Fransman] to complete her PhD qualification in the year of 2014. In fact, it was the clear intent of the parties that the staff development leave was for the purpose of the Appellant to continue with her PhD studies on a full-time basis for that year only…The intent that is evident from these documents are that the Appellant was granted leave by the HDC for a period of 1 year to continue her PhD studies by writing all the chapters to her thesis and to submit her thesis for examination in 2014. We submit that this is what the term “completion of studies” in clause 4 of Exhibit H refers to. We submit that nothing contained in Exhibits H1 – H3 nor in Exhibit H required the Appellant to finalise and/or obtain her PhD qualification during the year 2014.’

[30] Counsel who appeared for the University submitted that the University’s case is that Dr Fransman breached Exhibit H, in that she on or about December 2016 and before successful completion of her PhD studies resigned from employment of the University without having completed her bonding period and in violation of the parties’ agreement. Counsel further argued that the University’s position which the court a quo agreed with, is that the bonding period did not begin to run until when Dr Fransman successfully completed her studies and obtained the PhD. Dr Fransman only completed her studies after she resigned from the University’s employment and that is what triggered the enforcement of clause 4 of Exhibit H. (My underlining)

[31] Counsel further argued that Dr Fransman’s qualms with the court a quo’s decision seems to be mostly based on the testimony and evidence of the University’s witnesses in relation to the parties’ agreement (mostly their interpretations thereof). Counsel submitted that when the court a quo interpreted the agreement relied upon by the University, it relied upon the proper approach to the interpretation of documents which was summarised in this Court’s decision of Total Namibia (Pty) Ltd v OBM Engineering and Petroleum Distributors CC.¹¹ Counsel thus submitted that the court a quo was correct in interpreting the contract based on the law as opposed to the interpretation of the witnesses as counsel for Dr Fransman suggests the court a quo should have done. After all, what was before the court a quo was strictly the interpretation of the contract entered into between the parties, the argument went. She thus prayed for the dismissal of the appeal.

Did the High Court err in law in finding that Dr Fransman failed to comply with clause 4 of Exhibit H?

[32] Our analysis, must commence with the provisions of Exhibit H that have relevance for deciding whether the High Court erred in law when it concluded that Dr Fransman failed to comply with the provisions (clause 4) of Exhibit H. As I indicated earlier, the much-cited passages from Natal Joint Municipal Pension Fund v Endumeni Municipality offer guidance as to how to approach the interpretation of the words used in Exhibit H. Our analysis must be undertaken with due regard to contextual evidence presented in line with this Court’s jurisprudence on the interpretation of contracts.

[33] The approach outlined by this Court requires courts to determine the true nature of the rights and obligations flowing from the contract in question by undertaking the unitary exercise of interpreting the contract in the light of its factual matrix, its purpose, the circumstances leading up to its conclusion, and the knowledge at the time of those who negotiated and produced the contract. We must, however, be cautious not to reduce that approach to a mechanical fashion. As Endumeni emphasised, citing well-known cases, ‘[t]he inevitable point of departure is the language of the provision itself’.

[34] Justice Unterhalter in Capitec Bank Holdings Ltd & another v Coral Lagoon Investments 194 (Pty) Ltd & others,¹² reminds us that:

‘Endumeni [Natal Joint Municipal Pension Fund v Endumeni Municipality] is not a charter for judicial constructs premised upon what a contract should be taken to mean from a vantage point that is not located in the text of what the parties in fact agreed. Nor does Endumeni licence judicial interpretation that imports meanings into a contract so as to make it a better contract, or one that is ethically preferable.’

[35] Exhibit H in the relevant provisions provides as follows:

‘1 PREAMBLE.

1. WHEREAS the EMPLOYER [the University] resolved to engage in line with the Staff Development Policy, in capacity building programs aimed at enhancing the quality of its staff member in order to achieve its overall objective;

2. AND WHEREAS, in furtherance of Par 1 above, and on nomination by the Employer, the Staff Development Fellow/Status Holder (the Fellow)[ Dr Fransman] obtained staff development status and leave from:

‘Human Resources Committee (HDC) to continue with a PHD degree for the period of one year as from 01 January 2014 till 31 December 2014 at/with the University of Pretoria

1.3 Now therefore WITH THE AFOREMENTIONED the Parties AGREE as follows:

2. OBLIGATIONS OF THE EMPLOYER

   1. . . .

3. OBLIGATIONS OF THE HUMAN RESOURCE DEVELOPMENT FELLOW/STATUS HOLDER:

3.1.1 Upon successful completion of the studies, the Fellow/status Holder shall return and resume his/her duties as Lecturer with the EMPLOYER;

3.2 The Fellow/Status Holder shall then serve or work for the EMPLOYER for a period equivalent to the duration of the study leave granted in 1.2;

3.3. . . .

3.3.4 In case of failure to return and or work for the EMPLOYER after successful completion of his/her fellowship shall be liable to repayment of all financial support inclusive of salary with benefits received from EMPLOYER during the period of fellowship. A Fellow/Status Holder, who also resigns before serving the EMPLOYER for the period equal to that of his/her fellowship, shall also be liable to repayment under this clause.

3.3.4.1 The EMPLOYER reserves the right to determine the appropriate reimbursement from above in the event of breach of the policy or this contract by the Fellow/Status Holder.

4 BONDING

Upon successful completion of the studies, the staff member shall serve or work for the EMPLOYER for the equal duration of the Staff Development Leave. The bonding period is 1 year as approved by HDC for the Staff Development Status and Leave recommended by the Department for you to continue with PhD degree as stated above.’

[36] A plain reading of clauses 2, 3 and 4 of Exhibit H indicates that the parties to that agreement regulated their rights and obligations during Dr Fransman’s leave of absence in pursuit of her studies towards the attainment of her PhD degree and upon her completion and attainment of the PhD degree. Counsel for Dr Fransman correctly contended that the context within which the provisions of Exhibit H must be read and constructed are, her application for staff development leave (Exhibit H3) and the University’s resolve to grant her staff development leave (Exhibit H2). I will also add that the University’s Staff Development Policy which sets out the objectives and the purpose of conferring staff development status on employees/staff members of the University, must also inform the context of the agreement.

[37] What Exhibits H1, H2 and H3 unequivocally make clear is that Dr Fransman applied for leave of absence for a period of one year (that is from 01 January 2014 to 31 December 2014) to continue with her PhD studies. The documents also make it clear that the University approved Dr Fransman’s application and granted her one year’s staff development leave for her to continue with her PhD studies. The agreement then sets out in clauses 3 and 4 Dr Fransman’s obligations as a consequence of her having been granted one year’s staff development leave for her to continue with her PhD studies.

[38] What clauses 3.2 and 4 of Exhibit H make clear is that Dr Fransman’s obligations (apart from the obligation to complete her studies) towards the University kick in once she has successfully completed her studies. Those two clauses contemplated or required Dr Fransman to satisfactorily/successfully complete her studies towards the PhD degree and thereafter work for one year for the University. Both were required. One was insufficient. Counsel for Dr Fransman’s interpretation that the documents (Exhibits H1, H2 and H3) contemplated Dr Fransman to complete writing her chapters of the PhD is, in respect of the language, context and purpose for which the study leave was granted, incorrect.

[39] Counsel’s error and incorrect interpretation stems from his misreading of the University’s claim. Counsel in his written submission claims that:

‘The Respondent [that is the University] pleaded its case by averring that the Appellant [that is Dr Fransman] was obligated to obtain a PhD qualification within a period of 1 (one) year as from 01 January 2014 to 31 December 2014. It was further pleaded that the Appellant, upon successful completion of her studies, would work for the Respondent for a period equivalent to the duration of study leave granted (1 year).’

[40] The above submission is a clear misinterpretation of the University’s claim. Paragraph 7 of the University’s particulars of claim encapsulates the University’s claim. That paragraph reads as follows:

‘7 On 8 April 2014 The Plaintiff [the University], represented by Barbara Bock, and the Defendant [Dr Fransman] acting personally, entered into a written agreement, the material terms of which are: [the agreement is attached hereto marked annexure UNAM 2]

7.1 The Defendant would peruse further studies to obtain a qualification of PHD at the University of Pretoria for a period of 1 year as from 01 January 2014 to 31 December 2014;

7.2 The Plaintiff shall retain the employment position of the Defendant until she completes her studies, in which case she shall resume her normal duties with the Plaintiff as a Lecturer;

7.3 The Plaintiff would remunerate 100% salary to the Defendant during the first year, 75% salary during the second year and 50% salary for the third year onwards until the completion of the study programme.

7.4 The Plaintiff undertook not to alter all the other benefits of the Defendant during the study period;

7.5 In return, the Defendant undertook to study the programme that was approved by the Plaintiff;

7.6 And that upon successful completion of her studies, the Defendant would work for the Plaintiff for a period equivalent to the duration of the study leave granted.

7.7 That in case of failure to return and or work for the Plaintiff after the successful completion of her fellowship, the Defendant shall be liable to repay all financial support, inclusive of salary with benefits received from the Plaintiff during the period of fellowship.

7.8. That in the event of the Defendant resigning before serving the Plaintiff for the period equal to that of her fellowship, the Defendant shall be liable to repay all financial support received from the Plaintiff.’ (Underlined for emphasis)

[41] Although subparagraph 7.1 of the University’s particulars of claim is drafted sloppily it is clear that the period of one year as from 01 January 2014 to 31 December 2014 mentioned in that subparagraph refers to the period over which Dr Fransman would be studying at the University of Pretoria to obtain a qualification of PhD and does not state that she must obtain the PhD qualifications during that period. The other subparagraphs particularly subparagraphs 7.3, 7.6 and 7.7 and Exhibits H2 and H3 make it apparent that the period over which Dr Fransman had to successfully complete her studies is undetermined. There is therefore no basis to suggest or argue that the University has pleaded that Dr Fransman must obtain her PhD degree within the period of 1 January 2014 and 31 December 2014.

[42] Based on the analysis set out in the preceding paragraphs the phrase ‘upon successful completion of her studies’ simply means that Dr Fransman had to successfully complete her PhD studies and not that she must submit chapters of her PhD thesis. Dr Fransman only successfully completed her PhD studies during August 2017 and in fact did not serve or work for the University after she successfully completed her PhD studies. She thus did not satisfy the second requirement of her obligations. Under clause 4 of Exhibit H, Dr Fransman obliged to repay the monies set out in the same clause.

[43] It follows that the High Court did not misdirect itself in interpreting Exhibit H and was correct in finding that Dr Fransman breached the agreement she concluded with the University, because she had not worked the bonding period after obtaining her PhD, for which study leave was granted in the first place.

[44] I pause here to note that both in his oral submissions and written arguments, counsel for Dr Fransman argued that Exhibit H was not the prevailing contract at the time of Dr Fransman’s resignation from the University. Counsel for the University responded that the question of whether or not Exhibit H was the operative agreement was not raised on the pleadings and was also not canvassed in the High Court. A perusal of the particulars of claim and the record of proceedings in the High Court shows clearly that such a case was neither pleaded nor testified about in the High Court.

[45] The purpose of the pleadings is to define the issues for the other parties and the court.¹³ A party has a duty to allege in the pleadings the material facts upon which it relies. It is impermissible for a party to plead a particular case and seek to establish a different case at the trial.¹⁴ There are, however, circumstances in which a party may be allowed to rely on an issue which was not covered by the pleadings. This occurs where the issue in question has been canvassed fully by both sides at the trial. In South British Insurance Co Ltd v Unicorn Shipping Lines (Pty) Ltd¹⁵, the South African Court of Appeal said:

'However, the absence of such an averment in the pleadings would not necessarily be fatal if the point was fully canvassed in evidence. This means fully canvassed by both sides in the sense that the Court was expected to pronounce upon it as an issue.’

[46] The High Court simply considered the interpretation of Exhibit H. Whether Exhibit H was operative or not at the time of Dr Fransman’s resignation was not pleaded nor canvassed in that Court and we therefore decline to entertain it here.

Did the court a quo misdirect itself in finding that Dr Fransman failed to comply with Exhibit H and is therefore liable to pay the University the amount of N$624 032.05?

[47] Van der Merwe, van Huyssteen, Reinecke and Lubbe,¹⁶ contend that a plaintiff who wishes to claim damages for breach of contract bears the onus to prove the following:

(a) breach of contract by the defendant;

(b) damages;

(c) a factual causal connection between the breach of contract and the damages; and

(d) that the damage is a natural consequence of the breach of contract or that an agreement was concluded to compensate the damage concerned.

[48] The above requirements have been articulated as follows by Corbett, J.A in Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd,¹⁷

‘The fundamental rule in regard to the award of damages for breach of contract is that the sufferer should be placed in the position he would have occupied had the contract been properly performed, so far as this can be done by the payment of money and without undue hardship to the defaulting party (see Victoria Falls & Transvaal Power Co. Ltd. v Consolidated Langlaagte Mines Ltd., 1915 AD 1 at p. 22; Novick v Benjamin, 1972 (2) SA 842 (AD) at p. 860). To ensure that undue hardship is not imposed on the defaulting party the sufferer is obliged to take reasonable steps to mitigate his loss or damage (ibid.) and, in addition, the defaulting party's liability is limited in terms of broad principles of causation and remoteness, to (a) those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach, and (b) those damages that, although caused by the breach of contract, are ordinarily regarded in law as being too remote to be recoverable unless, in the special circumstances attending the conclusion of the contract, the parties actually or presumptively contemplated that they would probably result from its breach (Shatz Investments (Pty.) Ltd. v Kalovyrnas, 1976 (2) SA 545 (AD) at p. 550). The two limbs, (a) and (b), of the above stated limitation upon the defaulting party's liability for damages correspond closely to the well-known two rules in the English case of Hadley v Baxendale, 156 E.R. 145, which read as follows (at p. 151):

“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.”’

[49] I have in this matter concluded that the High Court was correct in finding that Dr Fransman breached the agreement when she resigned from the University’s employment without having successfully completed her PhD studies and consequently failing to complete the requisite bonding period. It thus follows that the University has discharged the onus with respect to the first requirement namely that the defendant has breached the contract. In Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd, Corbett JA further reasoned that with regards to the two limbs enunciated in the above quotation the damages described in limb (a) are often labelled ‘general’ or ‘intrinsic" damages, while those described in limb (b) are called ‘special’ or ‘extrinsic’ damages.

[50] I am of the view that the damages which the University claimed in this matter fall under the category of general or intrinsic damages. The University’s decision to grant Dr Fransman leave of absence for a full 12 months with her retention of her remuneration was reasonable in the circumstances. It thus follows that the failure by Dr Fransman to serve the University for a period of 12 months after completion of her PhD (and not her thesis) resulted in a loss to the University. The loss suffered by the University was in fact directly caused by the Dr Fransman’s failure to serve the University for a period of twelve months after she successfully obtained her PhD. I, without any shadow of doubt, find that the University’s claim for damages is one flowing naturally and generally from the Dr Fransman’s breach of contract and one which the law should presume to have been contemplated by the parties as a probable result of the breach. It, therefore, falls fairly and squarely within the category of loss for which general damages are awarded. The High Court was therefore correct in holding that the University was entitled to the damages that it claimed.

[51] As regards the losses which the University suffered, Ms Katuuo’s evidence was that for the period 01 January 2014 to 31 December 2014, the University paid an amount of N$613 359.57 as salary and benefits to Dr Fransman and an amount of N$135 860 as financial assistance to Dr Fransman. The amount of financial assistance to Dr Fransman was, however, calculated over the period of 2011 to 2016. Clause 3.3.4 of Exhibit H in unambiguous terms provides that in the case where Dr Fransman fails to return and or work for the University after she successfully completed her PhD studies then and in that event she will be liable to repay all financial support inclusive of salary with benefits received from employer during the period when she was on leave of absence. Dr Fransman was on leave of absence only during the year 2014. The University could therefore not claim the financial assistance given to Dr Fransman for the period 2011 to 2013 and the period 2015 to 2016 when she resigned. The High Court order must therefore be amended to reflect this position.

Condonation

[52] It remains finally to decide the applications for condonation filed by the parties for the failure to comply with the rules of court. The High Court delivered its order on 12 April 2022 followed by its reasons for the order on 14 April 2022. In terms of rule 7(1) of the Rules of this Court, the notice of appeal had to be filed within 21 days of the delivery of the order, ie by 17 May 2022. The notice of appeal was belatedly filed on 19 May 2022. The explanation for this non-compliance is that the appellants' legal practitioner mistakenly computed the period within which the notice of appeal had to be filed.

[53] Security for costs too was belatedly filed on 04 August 2022, which was more than a month after the period prescribed by rule 14(2) of the Rules of this Court. (A bond of security was filed together with the record).

[54] The appellant’s legal practitioner detected the error regarding the computation of timelines for filing the notice of appeal on the day she filed her notice of appeal and immediately thereafter filed her application for the condonation of the late filing of the notice of appeal. The University does not oppose the condonation application. The explanation for the late filing of the notice to appeal is in my view satisfactory and the appellant took immediate action when she realised her error. The non-compliance with rule 14 (2) was equally reasonably explained in my view and as such this is a matter in which the noncompliance with the rules is condoned and the appeal reinstated.

Costs

[55] The general rule regarding costs dictates that costs should follow the result. There is no reason to depart from that general rule. Dr Fransman must therefore pay the University’s costs both in this Court and the court a quo.

Order

[56] In the result, the following order is made:

1. The appellant’s condonation application is granted and the appeal is reinstated.

2. The respondent’s condonation application is granted.

3. The appeal is dismissed but the order of the High Court is amended and substituted with the following order:

‘(i) The plaintiff’s claim succeeds and defendant must pay to the plaintiff the amount of N$613 359.57 plus the financial assistance rendered by the plaintiff during the year 2014, less the amount deducted by the plaintiff from the defendant’s pension.

(ii) The defendant must pay interest on the amount determined in accordance with paragraph (i) at the rate of 20% per annum from the date of the judgment in the Supreme Court to the date of payment in full.

(iii) The defendant must pay the plaintiff’s costs of suit.’

4. The appellant must pay the respondent’s costs of the appeal.

___________

UEITELE AJA

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PRINSLOO AJA

______________________

SCHIMMING–CHASE AJA

APPEARANCES

APPELLANT:	R Avila Of Metcalfe Beukes Attorneys,
	Windhoek
RESPONDENT:	S Kahengombe
	Of Kahengombe Law Chambers, Windhoek