Firstel Cellular (Private) Limited v Munyaradzi Christopher Sefaidiga and Blessing Gibson Munyoro

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                                                                              HH 70-2012
                                                                              HC 1982/07
                                                                          Ref HC 3104/07

FIRSTEL CELLULAR (PRIVATE) LIMITED
versus
MUNYARADZI CHRISTOPHER SEFAIDIGA
and
BLESSING GIBSON MUNYORO



HIGH COURT OF ZIMBABWE
HUNGWE J
HARARE, 22 February 2012


G Chingoma, for the applicant
I Chagonda, for the respondents


Opposed Application


       HUNGWE J: On the return day of the rule nisi I confirmed the provisional order
and dismissed the counter application indicating that the reasons will follow. These are
the reasons. This is the return day of the rule nisi issued by this court on 10 May 2007
interdicting the two respondents (applicants in the counter-application hereinafter
referred to as “respondents” or “first and second respondents”) from using applicant’s
(respondent in the counter-application hereinafter referred to as “applicant”) two
Mercedes Benz motor vehicles registration numbers AAA 3378 and AAA 4417 and
directing the respondents to surrender to applicant the said motor vehicles immediately.
Applicant undertook not to re-allocate two of its senior staff members they said motor
vehicles pending the return day. The respondents complied with the terms of the order
requiring them to surrender to the applicant but have filed a counter-application seeking
an order that the present applicant be ordered to surrender the two motor vehicles to the
respondents upon tender and payment of the amount due to it for the value of the two
motor vehicles. This application and counter application arose out of the following facts:
       Applicant employed the first and second respondents as Financed Director and
Operations Director respectively. Applicant is the lawful owner of the two Mercedes
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Benz motor vehicles. It allocated the use of the motor vehicles to the respondents in terms
of its company vehicle policy. Sometime in February 2007 applicant’s board of directors
had reason to cause a forensic audit to be carried out within the applicant. A forensic
audit report produced after the audit investigations revealed possible fraudulent and
prejudicial conduct by the two respondents. The forensic audit report which is part of the
papers reveals that the investigations included seeking explanations from the respondents
and recording such explanations as they would have given. When the findings and
conclusions of the forensic audit report were put to the respondents, they both offered to
resign with immediate effect. They both refused to hand over the two vehicles on the
ground that they were entitled to purchase the motor vehicles from the applicant. This
necessitated the chamber application resulting in the present litigation. Applicant argues
that the provisional order should be confirmed as the final order since (a) the applicant
has not, in the exercise of its discretion, granted the two respondents the option to
purchase the two motor vehicles and (b) the employees leaving its service are required to
surrender the vehicles.
       The first and second respondents, on the other hand, contend that the provisional
order be discharged and that the applicant be directed to surrender the two motor vehicles
to them up on tender of the value of the motor vehicles.
       The respondents ground their counter- application on the following basis.
During their term of employment with the applicant, applicant came up with an executive
car policy which governed the acquisition and use of motor vehicles by senior employees.
First and second respondents contend that the scheme entitled them to exercise an option
to purchase the motor vehicles which they were using at the time of resignation. Upon
resignation, the respondents notified the applicant that they were exercising the option to
purchase the motor vehicles for which the purchase price would be fixed in accordance
with the applicant’s executive car policy.
       The right to the motor vehicle accrued at the time of the purchase of the motor
vehicle, this is demonstrated by the registration of the motor vehicle in the respondents’
names. They content that they are entitled, upon exercise of the option, to the motor
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                                                                                 HC 1982/07
                                                                             Ref HC 3104/07

vehicles. The respondents also draw the court’s attention to the fact of that they are in a
possession of the two motor vehicles’ registration books.
       The issue in this dispute in my view is whether, upon a proper interpretation of
the applicant’s motor vehicle policy scheme, the respondents have an enforceable right to
purchase the two motor vehicles. Put differently, did the counter- applicants hold an
option exercisable against the counter- respondents to purchase the two motor vehicles
upon their resignation from employment? In order to answer this question, regard must be
had to the document which both parties agree governed the use of motor vehicles by the
first and second respondents.
       In interpreting the document the court will give effect to the ordinary grammatical
meaning of the words used unless the context clearly requires otherwise. It will be clear
from the opening paragraph of the executive car policy document that it was formulated
so as to uphold the principle of ensuring improved welfare of applicant’s key staff
through the provision of a motor vehicle benefit designed to motivate and retain skilled
personnel.
       Clause 4 deals with the replacement period of the vehicle. It states that a company
vehicle shall be due for a replacement or renewal after a period of five years from the
date of manufacture. Clause 5 goes on to spell out that the executive using the vehicle
due for a replacement will be given the first option to purchase the vehicle and the fixing
of the price. It states that an application to exercise the option to purchase the vehicle will
be processed in line with the relevant provisions of the policy. That same paragraph gives
detail to what happens when an employee is promoted to a higher grade. Clause 6 is titled
Vehicle Operating Expenses and sets out what the employer will pay for. Clause 7
spells out the responsibilities of the company vehicle operator. Clause 8 is titled
Administration and Control. In terms of this clause the Group Company Secretary
keeps custody of the motor vehicle registration books at all times even though at
purchase, the motor vehicle is registered in the name of the employee in terms of clause
2. Management reserved the right to withdraw the company car facility at its discretion
where there is evidence of abuse of allocated vehicle in terms of clause 8. Under clause 8
as well, an employee who leaves the company is required to surrender the vehicle and all
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accessories to the group managing director with the option provided for them to purchase
the vehicle as provided for under clause 5.
        Clause 9 deals with interpretation and application of the policy and states that this
is the responsibility of the board. Clause 10 specifically States that “…all provisions
under this policy are at the discretion of the group managing director or chairman of the
board subject to cash flow availability.” The first and second respondents argue that
Clause 8 creates the option which they exercised by written notice of election to purchase
the vehicles upon their resignation. The question that arises is whether the option in
clause 8 creates legally binding consequences between the parties. In other words: is the
“option” an option in the legal sense of the word?
        The Dictionary of Legal Words and Phrases 2nd edition, Vol. 3 @ p45 defines
an option as follows;
        “An option is an ‘offer’ which is irrevocable by the grantor during the period
        stipulated in the contract or, if there be no such provision, within a reasonably
        time. See also: Van Pletsen v Henning 1913 AD 98; Annamma v Moodley 1943
        AD 538; Hersch v Nel 1948 (4) SA 695; Brand v Spies 1960 (4) SA 14.
        If the option be exercised, the potential contract contemplated by the parties to the
        option agreement is complete.”

        It is contented on behalf of both the respondents that applicant made an
irrevocable offer in clause 8 of its policy.
        In Bilodeh Properties (Pty) Ltd v Wilson 1946 NPD 736 @ 744 an option was
defined thus:
        “A true option is nothing more than an offer by one party to the contract to the
        other, which offer remains open according to the terms of the contract. The option
        holder has merely to accept the offer in the manner and within the time prescribed
        by the contract, and a new contract comes into existence between him and the
        other party….”

        In Wasmuth v Jacobs 1987 (3) SA 629 (SWA) it was explained that:

        “An option constitutes nothing more than an offer coupled with an arrangement
        (express or implied) to keep the offer open for a certain period of time ……It is
        fundamental to the nature of any offer that it should be certain and definite in its
        terms. It must be firm, that is, made with the intention that when it is accepted, it
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       will bind the offeror. (Efroiken v Simon 1921 CPD 367 @ 370; Finestone v
       Hamburg 1907 TS 629 @632)…….
       Therefore, if an offer which is an essential element of any option is vague on all
       capable of more than one meaning, it is open to the offeror to contend that it is not
       capable of being accepted and thereby convert it into a binding contract. Where
       there is an ‘offer’ which provides that certain terms were to be ‘renewed’ or to be
       ‘negotiated’ or to ‘stand over’ for decision at a later stage, then pending
       agreement, on such outstanding terms neither party has any rights against the
       other.” Ok Bazaars v Bloch WLD 37; Wilson Bros Garage v Texas Co (SA) Ltd
       1936 NPD 386.

       See also Film and Video Trust v Mahovo Enterprises (Pvt) Ltd 1993 (2) ZLR 191
(H)
       The contention by the respondents is that the provisions of clause 8 constitute an
option exercisable against the applicant. Once exercised, it became binding. I disagree.
       It will be clear from the above authorities that even assuming in favor of the first
and second respondents that “option” existed there is no offer capable of such acceptance
by offeree as would legally bind the offeror. There is no definite period within which the
“option” would remain open. The terms of the offer cannot be implied. It is not
contended that the terms of the sell agreement was spelt out expressly since price of the
motor vehicles was not yet fixed. In any event there is repeated reference to the discretion
of the management in clause 5 to which clause 8 refers, such that it cannot be said with
certainty that there existed a formula to fix a price as the decision to sell depended on the
discretion of management.
       I am fortified in my interpretation by the principle espoused at the commencement
of the policy document that the intention was never to make the document a contract
which a binds the employer to sell its motor vehicles once an employee applied for that.
The document makes it clear that the policy is to retain personnel not to reward ex-
employees. Such a benefit can only be extended to an ex-employee if, in the discretion of
management or board of directors, such employee merited it. That is not the position
here. In any event that is not the interpretation given to the policy document by the
parties. The fact that the applicant allowed its vehicles to be registered in its employees
names cannot, in my view, be construed as bestowing any right to purchase the motor
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                                                                                HC 1982/07
                                                                            Ref HC 3104/07

vehicles on the employees. It does not advance the respondents’ argument nor does it to
destroy the applicant’s argument. It merely reinforces the spirit espoused by the policy
which is to retain key personnel and nothing more. In my view the two motor vehicles
remain the property of the applicant. It is therefore ordered as follows:
       The provisional order is confirmed. The counter- application by the respondents is
dismissed with costs.




Dube, Manikai & Hwacha, applicants’ legal practitioner
Atherstone & Cook, respondent’s legal practitioners