Ellenise Septoo v City of Johannesburg

The Appellant entered into a fixed-term employment contract with the Respondent as Senior Human Resources Manager for five years at R550,000 per annum (the first contract). A week later, the Respondent advised that the contracting person lacked authority to offer that remuneration and presented a new offer at R453,296 per annum. The Appellant accepted the second contract while reserving her rights arising from the first contract, commenced employment, and was remunerated accordingly. After 18 months of the first contract and 17 months after the second contract, she instituted action seeking specific performance of the first contract. She subsequently resigned after two years of performing under the second contract. In her evidence and through her counsel, the Appellant confirmed that the first contract had been cancelled and that she had accepted the second contract while reserving rights to dispute the legality and fairness of the Respondent's actions.

• Whether absolution from the instance was appropriately granted at the close of the Appellant's case
• Whether an employee who has accepted the cancellation of a contract and concluded a second contract can claim specific performance of the first contract
• Whether cancellation of a contract is compatible with a claim for specific performance
• Whether an innocent party can reserve rights to claim specific performance after accepting cancellation of a contract
• Whether the doctrine of election applies to bar inconsistent remedies

The appeal was dismissed with costs.

When one party repudiates a contract, the innocent party has an election to either accept the repudiation and seek damages, or refuse the repudiation and seek specific performance. Enforcement and cancellation are inconsistent and mutually exclusive remedies that cannot be exercised at the same time. The innocent party must make an election between them and cannot both approbate and reprobate the contract. Having accepted that a contract was cancelled, the only right that can be reserved is a claim for damages, not specific performance. A party cannot claim specific performance of a contract that they have acknowledged as cancelled. The doctrine of election requires that once an unequivocal act is done with knowledge of the breach that necessarily implies an election has been made, the party is bound by that election and cannot afterwards change their mind.

The Court observed that mere delay accompanied by any active step indicating an intention of abandonment was not part of the assertion of the right (referencing Anghem and Piel v Federal Coal Storage Co Ltd). The Court noted that a claim for alternative relief for damages in a case for specific performance cannot be premised upon the cancellation of the contract - it would only arise if the Court found that specific performance was established but not feasible to grant. The Court commented that the difficulty was compounded by the absence of any pleading suggesting that damages would be sought if specific performance failed, and that such alternative claim could not be entertained based solely on a prayer for 'further or alternative relief' without proper pleading and, if necessary, amendment.

This case is significant in South African labour and contract law for clarifying the application of the doctrine of election in employment contract disputes. It reinforces the principle that cancellation and specific performance are mutually exclusive remedies that cannot be pursued simultaneously. The case establishes that an employee cannot accept cancellation of a contract while reserving the right to enforce that same contract. It also clarifies that when reserving rights after accepting cancellation, the only permissible claim is for damages, not specific performance. The judgment provides guidance on the test for absolution from the instance and demonstrates how conduct inconsistent with pleaded relief can be fatal to a claim. It emphasizes that parties cannot both 'approbate and reprobate' a contract or 'blow both hot and cold' - they must make a definitive election between inconsistent remedies.