Consolidated Frame Cotton Corporation Ltd v Sithole and Others

• Jurisdiction: South Africa
• Citation: 1985 (2) SA 18 (N)

Consolidated Frame Cotton Corporation Ltd v Sithole and Others
1985 (2) SA 18 (N)

1985 (2) SA p18

Citation	1985 (2) SA 18 (N)
Court	Natal Provincial Division
Judge	Broome J and Nienaber J
Heard	September 3, 1984
Judgment	September 27, 1984

Flynote : Sleutelwoorde B

Contract — Parties to contract — Privity — Contract for the benefit of a third person — What amounts to — In final analysis a matter of intention of the parties whether arrangement amounts to a true stipulatio alteri — Stop order authorisations signed by employees (authorising employer to C deduct trade union dues on behalf of T, a trade union of which employees were members) not necessarily constituting a contract in favour of T — Could simply amount to a convenient arrangement for paying such fees without contravening s 19 (1) (e) of the Basic Conditions of D Employment Act 3 of 1983 — Cancellation of stop order authorisations by employees — Such not complying with terms of T's constitution — Employer contending that terms of constitution were incorporated by reference into contract (embodied in the stop order authorisation) between him and employee and authority therefore not properly cancelled — E Such contention relying solely on fact that stop order authorisation and application form for membership of T appeared on same page — Juxtaposition of two documents a matter of convenience only and had no contractual significance — Authority contained in stop order authorisation properly revoked.

Principal and agent — Revocation of agent's authority — Unilateral revocation — When effective — Stop order F authorisations signed by employees authorising employer to deduct union dues on behalf of T, a trade union of which the employees were members — Employees unilaterally revoking authorisations — Employer alleging the formation of triangular composite agreement which prohibited employee from unilaterally revoking authorisation as long as the latter later G still owed dues to T — Such agreement not proved on the facts — Better view was to regard each stop order authorisation as a separate transaction between employer and employee, whereby latter appoints former as agent with express power to effect payment to employees' credit or in respect of union dues, viz T — Latter could properly be termed an H adjectus solutionis causa — Employees not irrevocably committed to above arrangement either by constitution of T or by wording of stop order authorisation — General rule thus applicable that an authority is revocable at instance of principal — Employees therefore free to unilaterally revoke authority contained in stop order authorisation. I

Headnote : Kopnota

The first to the nineteenth respondents ("the respondents") were all employed by the appellant at one of its mills. During September 1982 they joined a trade union, viz the Textile Workers' Industrial Union (TWIU), the 20th respondent. Each of the respondents completed and signed a written form authorising the appellant to deduct the weekly TWIU subscription from his or her remuneration. The stop order authorisation form appeared on the same page as an application form for membership of the J TWIU, which form concluded with the words "... and if I am accepted, agree to abide by the constitution

1985 (2) SA p19

of the said Union". The various stop order authorisations were A submitted to the appellant by the TWIU and the appellant thereafter deducted union dues from the earnings of the respondents for transmission to the TWIU. During September 1983, however, the respondents purported to resign from the TWIU and sought to withdraw the written authorisation to the appellant and the TWIU with immediate effect. The resignation and cancellation forms were duly forwarded to the appellant, whose response was that they did not comply with the B constitution of the TWIU, which required one month's notice of resignation addressed to the regional director of the TWIU. The appellant accordingly continued to deduct the TWIU union dues from the wages of the respondents, who then launched proceedings in the magistrate's court, claiming a declaratory order that the continued deduction of union dues was unlawful, and an order interdicting appellant from making such deductions. The application was granted. In an appeal, the C appellant being of the view that the stop order authorisations were not revocable for as long as the respondents remained members of the TWIU and, since the resignations were bad in law as in conflict with the TWIU's constitution, the authorisations remained good, it was contended that the entire arrangement should be construed as a contract in favour of the TWIU, the benefit of which the latter had accepted so that it was D no longer open to be withdrawn.

Held, that it was of the essence of this construction that the terms of the constitution be incorporated into the stop order authorisations and that the appellant and each member intended that a right be created for TWIU which TWIU could thereafter enforce against the appellant, viz, to claim payment of the members' subscriptions.

Held, further, that the only basis for contending that the terms of the constitution were incorporated by reference into E the contract between the appellant and each respondent, which was embodied in the stop order authorisation, was that the latter and the application form for membership of the TWIU appeared on one and the same page, but that this juxtaposition of the two documents was a matter of convenience only and had no contractual significance.

Held, further, that, even if the terms of the constitution were F incorporated into the contract by reference, it did not follow as a matter of course that each stop order authorisation had of necessity to be the exclusive means of effecting payment - no compelling reason was apparent why a member should not be free to make alternative arrangements for payment of his dues; there was certainly nothing in the document (ie the stop order authorisation) precluding him from doing so.

Held, further, that it was in the final analysis a matter of G intention on the part of the appellant and respondent whether the arrangement amounted to a true stipulatio alteri, and that such an intention could not fairly be inferred from the mere fact that stop order authorisations were produced and implemented - another interpretation, equally, if not more, feasible, was that the entire arrangement was conceived by the parties simply as a convenient means of facilitating payment of H the dues in a manner that would not contravene s 19 (1) (e) of the Basic Conditions of Employment Act 3 of 1983.

Held, accordingly, that the stop order authorisation was not a stipulatio alteri.

Held, further, in regard to the further contention that the stop order authorisation constituted but one leg of a triangular composite agreement, which precluded an employee from revoking his authority to the appellant as long as he owed any dues to the TWIU, that, although there was authority for I the proposition that, where the agent's authority forms an integral part of an overall transaction (be it between the agent and the principal, or between the agent, principal and other parties), the principal is no longer at liberty to alter or revoke it unilaterally, no such an overall agreement had been established in this case.

Held, further, that the better view was to regard each stop order authority as a separate transaction between the appellant and each respondent, in terms whereof the appellant, as the J debtor of each respondent in respect of wages,

1985 (2) SA p20

A is appointed as his agent with the express power to effect payment on his behalf to his creditor, TWIU, who, being the nominated recipient of the money, could properly be termed an adjectus solutionis causa.

Held, further, that the respondents were not irrevocably committed to this arrangement either by the constitution of the TWIU or the wording of the stop order authorisation, so that the general rule should be applied that an authority is revocable at the instance of the principal.

B Held, therefore, that each respondent was perfectly free to revoke the authority contained in the stop order authorisation by addressing an appropriate communication to the appellant. Appeal dismissed.

Case Information

Appeal against a decision in a magistrate's court granting a declaratory order and ancillary relief. The facts appear from C the reasons for judgment.

D J Shaw QC (with him B A Acker) for the appellant.

M Pillemer for the first to the nineteenth respondents.

No appearance for the twentieth respondent (Textile Workers' Industrial Union).

Cur adv vult. D

Postea (September 27). E

Judgment

Nienaber J:

This appeal touches on an old issue, the unilateral revocation by a principal of an authority given to his agent.

The first to the 19th respondents in the appeal (hereinafter referred to as "the respondents") were all employed by the appellant at its Pinetex mill. During September 1982 they joined the Textile Workers' Industrial Union (SA), a duly F registered trade union, the 20th respondent in the appeal (hereinafter referred to as "TWIU"). Each of the respondents completed and signed a written form authorising the appellant to deduct the weekly TWIU subscription of 40c from his or her remuneration.

The form reads as follows:

"Stop order for the deduction of trade union subscriptions

To:................................................................................................................ (employer)

I...