Cape Town - The Western Cape High Court has reversed a previous court decision regarding the payment of terminated staff following the 2019 sale of sail-boat hardware and accessories manufacturer Harken South Africa to Zenith International.
Harken was owned by businessman Ankie Roux until his death in 2019. At the time of Roux’s death, Harken had had four employees: Hannes Knoetzen, Michael Batt, Lars Kessel and Michelle Barrish.
In terms of his will, Roux appointed a Mr Venter, Harken’s accounting officer, as his executor.
He bequeathed to each of his three daughters 30% of his membership in the plaintiff, and he left the remaining 10% to Knoetzen.
The company was bought out after Roux’s death by Zenith, a company set up by Knoetzen and Batt, who negotiated the right to use the Harken name. However, Zenith did not want to take over the other two employees, Kesse and Barrish.
Following the conclusion of the contract of sale, Venter notified Kesse and Barrish that their employment with the plaintiff had been terminated, and the two employees immediately registered claims with the CCMA.
Harken settled the claims submitted to the CCMA by Kesse and Barrish for R324 010. It was this payment that caused the fuss.
Zenith denied liability, citing their reading of an indemnity clause, and Harken sued and lost, leading to the appeal where the first judgment was overturned.
Acting judge Alma De Wet and Judge Nathan Erasmus found in reaching its conclusion, the previous court misdirected Itself in allowing and considering inadmissible evidence under the guise of context for purposes of interpreting the indemnity clauses of the contract of sale.
She said Knoetzen’s evidence was “simply far-fetched and contrary to the clear wording of the contract of sale.”
Knoetzen had testified he thought the indemnity clause covered him and Batt, but not Kessel or Barrish.
Judge De Wet said: “If the correct approach was adopted by the court a quo, from the outset, the costs and legal resources employed in determining this relatively small claim would not have resulted.”