CIV/T/662/84

IN THE
HIGH COURT OF LESOTHO

In the
Matter of

S
KHOTLE Plaintiff

v

METROPOLITAN
LIFE INSURANCE Defendant

CO LTD
AND ANOTHER

JUDGMENT

Delivered
by the Hon Acting Mr Justice D,S Levy on the 7th day of June, 1985

The
plaintiff has instituted action in this Court in which he claims
damages for wrongful dismissal in breach of his written contract
of
employment with the First Defendant A copy of the contract of
employment is annexed to Plaintiff's Declaration which the Defendants

have accepted as such in a special plea in abatement filed on their
behalf It is not clear to me why Second Defendant who is the
First
Defendant's local manager was joined in these proceedings, or why, as
Plaintiff claims, he should be liable jointly and severally
with the
First Defendant for Plaintiff's damages for wrongful dismissal.
However, no exception has as yet been taken on his behalf.

The
defendants have not pleaded over but the spe­cial plea raises a
point of law that can be conveniently decided now and so
serve the
expeditious determination of this dispute Nor has any party in
argument before me suggested that he is in a position
to offer any
evidence that will advance or clarify this case on the facts as they
now come before me, and the parties are in apparent
agreement, and
have so argued, that the matter should be dealt with solely on the
basis of the contract of employment

2

This
document, which is annexure "A" to the particulars of
plaintiff's claim, shows that on 6th July, 1981, a written
offer was
made by First Defendant at Cape Town to employ the Plaintiff as what
the offer grandiloquently describes as a consultant
of the First
Defendant's business, but which employment as the agreement shows is
more correctly described by the Plaintiff in
his declaration, as an
insurance agent

The
description of the First Defendant's address in this contract shows,
though not expressly, that its Head Office and/or principal
place of
business is in Cape Town, in the Republic of South Africa, and the
First Defendant reserved to itself the right, by Clause
19 of the
Agreement, to alter the conditions of Plaintiff's employment from
time to time by notification in writing

Clause 15
of the contract provides that "Any action or lawsuit which may
arise from this agreement in which

1. the
   employee wishes to institute legal proceedings against the employer
   as the defendant may only be instituted in the Magistrate'
   Court in
   the District of the Cape or in the Supreme Court of South Africa
   (Cape Provincial Section), whichever court may have
   jurisdiction
   under these circumstances,

   
   

2. the
   company wishes to institute legal proceedings against the employee
   as the defendant may be instituted regardless of the amount
   in
   dispute in any magis­trate's court of the company's choosing
   which may have jurisdiction according to Article 28(1) of
   the
   Magistrate Court Law No 32 of 1944 as amended and the parties do
   hereby agree that such Magistrate's Court shall have jurisdiction

   regardless of the amount in dispute to hear the suit."

   
   

Plaintiff
accepted this offer at Maseru on the 27th June, 1981 The case was
argued before me also on the basis, and here again the
agreement and
pleadings are silent on the point, that the Plaintiff's employment is
with the First Defendant's branch office in
Maseru and his activities
as an insurance agent confined to Lesotho

3

Before
delivering this judgment, I would have wished to make an enquiry of
the parties and received their concurrence that I should
deal with
the matter on the basis as though pleaded, that the First Defendant's
Head Office is in Cape Town and that Plantiff's
employ­ment and
his right to canvass insurance business is limited to Lesotho as the
area assigned to him in terms of Clause
3 of the agreement. In the
absence of counsel for both parties, Plaintiff's counsel being merely
nominally present here today,
I am unable to obtain their
concurrence, but I am satisfied in any event that these are fair
inferences for me to draw from the
agreement and the pleadings.

Clause 3
of the agreement to, which I have already referred reads as follows

"The employee undertakes to limit his activities to the area
which the com­pany shall from time to time assign to him
No other
area may be canvassed without the consent of the company "

I think
having regard to the employment of the Plaintiff in Lesotho that his
area of employment was confined at most to the Kingdom
of Lesotho The
point of law taken crisply by Plaintiff on the special plea is that
Clause 15 of the agreement amounts to an ouster
of the jurisdiction
of this Court and as such is in conflict with the overriding
provisions of Section 11 of the Employment Act
22 of 1967. (The Act)
which reads as follows

"CONTRACTS
OF SERVICE

11(1) The provisions of this port except where otherwise provided,
apply to all contracts.

(2) No person shall employ any employee and no employee shall be
employed in any contract except in accordance with the provisions
of
this Act and any contract whether entered into before or after the
commencement of this Act which con­tains any term or
condition
less favourable to the employee than any corresponding term or
condition for which provision has been made by this Act

4

shall be construed as though the corresponding term or condition of
this Act were substituted for such less favourable term or
condition
of service in such contract provided that nothing in the Act shall
operate so as to invalidate any term of condition
of Such contract
which is more favourable to the employee than the corresponding term
or condition of this Act."

It is not
disputed that ordinarily the Act would govern the Plaintiff's
contract of employment but, so Plaintiff argues, Clause
15 of the
agreement obliges the Plaintiff to institute action solely in the
courts of the Cape Province of the Republic of South
Africa and so
sub­ject him to the law of that country to the exclusion of the
law of Lesotho. Such a provision of the contract,
he argues, is
rendered null and void by Section 11 of the Act and so this Court
retains its jurisdiction to deter­mine this
dispute.

This
argument amounts to saying that it is contrary to public policy to
allow a provision of this nature to deprive the Plaintiff
of his
right to the protection of this Act in a dispute with his employer
and should not be enforced. See Astra Furnishers (Pty)
Ltd vs Arend
1973(1) S A at 450(c). Before consideration of this argument, it is
necessary in my view to determine the proper law
of the contract,that
is,whether it is the law of Lesotho or the law of the Republic of
South Africa that governs this contract,
and which should be applied
by any Court hearing any dispute arising out of the con­tract.
There are no indications in the
contract that the parties have
expressly chosen any system of law as the proper law but an
examination of it reveals strong indi­cations
that the parties
either tacitly or as an inference from the terms of their agreement
have chosen the law of the Republic of South
Africa sas the proper
law cover­ing this dispute.

The
strongest indication of this is to be found in the reference in
Clause 15(a) to the sole and exclusive jurisdiction of the courts
of
the Cape Province to deter­mine any action that may be instituted
by the Plaintiff's

5

agreed
submission in Clause 15(b) to the jurisdiction of those courts in any
action that his employer may bring against him arising
out of the
contract.

The
ouster of the jurisdiction of this Court whose system of the law is
the only other law having any real connection with this
contract
strongly indicates that, objectively considered, the proper law of
the contract is the law of the Republic of South Africa.

A further
indication in this direction is that the First Defendant's Head
Office is in Cape Town but against this there are the
two further
factors that the lex loci contractus is Maseru and the Plaintiff's
employ­ment is confined to Lesotho. But if I
ask myself what
system of law the First Defendant intended should govern the contract
when it required the Plaintiff's consent
to the total ouster of the
jurisdiction of all courts save those of the Cape Province and where
the First Defendant's Head Office
is in Cape Town, then I am driven
to the con­clusion that it was intended that the proper law
should be the Cape law Objectively
considered as well, one is forced
to recognize that a Cape Court sitting in judgment in a dis­pute
where it has sole jurisdiction
in a matter concerning one of its
incolae would regard the law of South Africa as being the proper law.

A further
factor that influences me in my view arises from the consideration
that the Plaintiff is nothing more nor less than an
intinerant
canvasser of insurance business which will enevitably be referred to
his employer's Head Office and any Insurance Policy
issued in
consequence thereof would be issued from Cape Town It appears from
Clause 7 of the contract that the Plaintiff's salary
would be paid
from Cape Town where the accounts of his employment would be kept
This is also a relevant consideration It seems
to me, therefore, that
the contract between the parties has its closest and most real
connection

6

with the
law of South Africa and that it must be inferred from Clause 15 and
the other indiclae to which I have made reference that
the Cape law
is the proper law (See, for example,Compagnie Diarmament Maritime
S.A. vs. Compagnie Turusienin Navigation S.A. (H
L.) 1973 4 AER 91
and in particular the speech of Lord Reid at page 74 and of Lord
Morrison at p 77. See also Joubert, The Laws
of South Africa Vol 3
page 357, para. 559

With this
finding, I now turn to section 11 of the Act which 1 have read It is
possible for the proper law of the contract to include
more than one
system of the law if the contract objectively considered in the
absence of express provision or clear inference so
re­quires it.
But in case 1 see no reason why a Cape Court should, while applying
its domestic system of law to the contract
also introduce a statutory
provision of Lesotho that might govern similar contracts in Lesotho.

I am
satisfied accordingly that the Act will have no application to this
contract in the case where the proper law is not that of
Lesotho. In
the result an employee of First Defendant who is a citizen of Lesotho
and whose employment is in Lesotho exclusively,
would be deprived of
the protection otherwise afforded to him by the Act which in its
scope governs all master and servant relationships
in Lesotho.

I
consider this consequence of Clause 15 to be contrary to public
policy and a circumvention, however, innocently intended, of Clause

11 of the Act. I accordingly find Clause 15 of the agreement to be
null and void and unenforceable.

It is a
matter of some satisfaction to me, as well, that I find myself
compelled in law to disregard the provisions of Clause 15
which
otherwise require the plain­tiff at great personal expense and
with considerable in­convenience to institute action
in Cape Town
where he is a foreigner and may be obliged to find security for the
Defendant's costs with the possible total frustration
of

7

his
action whereas the employer has its branch office in Maseru where the
whole dispute has arisen.

In view
of my remarks concerning the propriety of the joinder of second
defendant who, with tongue in cheek has joined in the special
plea
knowing that he could never be joined in any action in Cape Town
where he is a peregrinus and presumably possesses no property
for
attachment ad fundandam junsdictionem.

I
disregard the impossibility of maintaining the action in Cape Town in
its present Form.

The
special plea is dismissed with costs.

D.S. LEVY

ACTING
JUDGE

7th June.
1985.

For
Plaintiff Mr. Hlaoli

For
Defendant Mr. Koornhof.