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[2015] ZASCA 14
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Maykent (Pty) Ltd v Trackstar Trading 20 (Pty) Ltd (1036/2013) [2015] ZASCA 14 (17 March 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 1036/2013
In
the matter between:
Maykent
(Pty )
Ltd
............................................................................................................
Appellant
and
Trackstar
Trading 20 (Pty)
Ltd
....................................................................................
Respondent
Neutral
Citation:
Maykent
v Trackstar
(1036/2013)
[2015] ZASCA 14
(17 March 2015)
Coram:
Lewis, Maya,
Bosielo, Majiedt and Pillay JJA
Heard:
27 February 2015
Delivered:
17 March 2015
Summary:
Construction contract concluded
partly orally, partly by conduct and partly on basis of standard
terms used in industry did not
oblige the principal agent to issue a
certificate of completion before issuing final payment certificate:
employer’s failure
to pay the contractor on this basis over a
period of five years unjustified.
ORDER
On
appeal from:
High Court,
Gauteng Division, Pretoria (Hiemstra AJ sitting as court of first
instance)
The appeal is
dismissed with costs.
JUDGMENT
Lewis
JA (Maya, Bosielo, Majiedt and Pillay JJA concurring)
[1]
The appellant, Maykent (Pty) Ltd (Maykent), is a franchisee in
respect of Kentucky Fried Chicken fast food stores. It entered
into a
contract with the respondent, Trackstar Trading 20 (Pty) Ltd
(Trackstar), a building contractor, in February 2006 for the
alteration and addition to premises for a new store in New Town,
Johannesburg. In concluding the contract, Maykent was represented
by
Tertius Rabe Property Services CC (TRE), a close corporation,
appointed as the principal agent, which was the second defendant
in
the trial court.
[2]
The agreed completion date was 30 June 2006 and the site was handed
over to Trackstar on 30 March 2006. The completion date
was extended
to 15 September 2006 because of variation orders causing delay.
Trackstar effected the works, and interim payments
to it were made.
The total agreed amount due in terms of the contract was some R1 282
922. Its final invoice was for R985 423.
Payment was not made despite
demand and Trackstar instituted action for payment of the amount it
alleged was owing in the Gauteng
Division of the High Court. The
summons was served on 5 September 2008.
[3]
TRE was cited as the second defendant, and as against it, Trackstar
claimed a final account supported by vouchers. Maykent raised
several
defences, including one that amounted to a plea that nothing was yet
due to Trackstar as a certificate of final completion
had not been
issued by TRE, as was required by the contract on which it relied –
the standard JBCC 2000 Principal Building
Agreement used in the
construction industry. There was thus no cause of action, it
asserted. It also counterclaimed for damages
in the amount of R2 122
206 for alleged loss of income arising from Trackstar’s failure
to complete the work timeously, and
additional amounts it had had to
pay TRE for completing the work.
[4]
On 14 August 2013, shortly before the trial started, TRE issued a
final payment certificate for the sum of R963 475. The action
against
it was withdrawn. The high court (Hiemstra AJ) found that Trackstar
was entitled to payment of the amount in the final
certificate, and
dismissed the counterclaim on the basis that no evidence had been led
to show that any loss suffered was caused
by Trackstar’s
alleged breach of contract. The high court also ordered that Maykent
pay interest at the prescribed rate of
15.5 per cent from the date of
summons to date of payment. The appeal against these orders lies with
its leave.
[5]
The principal argument of Maykent in the high court was that TRE had
not issued a certificate of completion or a final certificate
of
payment when summons was served: there was thus no cause of action,
the summons being premature. It relied in this regard on
the 2000
JBCC standard agreement which it claimed was the basis of the
contract between it and Trackstar. Indeed, Trackstar had
also alleged
that this was the contract that they had concluded, and attached it
to its particulars of claim. The contract consists
of standard terms
and a schedule headed ‘Contract Variables’. The schedule
reflected the parties’ details as
well as those of TRE.
However, much of the schedule was not completed by the parties, and
did not reflect dates of signature.
[6]
The particular clause of the JBCC contract relied on by Maykent
(34.5) provided that a final certificate of payment would be
issued
by the principal agent only after a certificate of final completion
had been issued by it. No final certificate of final
completion had
ever been issued, and indeed, TRE had prepared snag lists for
remedial works to be done. These had not been attended
to, Maykent
contended, before Trackstar left the site on 8 November 2006.
[7]
The evidence of TRE’s representative, a Mr Stears, who had
overseen the building work, and attended site meetings on behalf
of
TRE, was that he had not worked according to the standard terms of
the JBCC contract and did not know that it formed the basis
of the
parties’ agreement. The high court found that all the parties
had proceeded as if the terms of the JBCC contract were
not
applicable, and thus that the provision in the JBCC contract
requiring a certificate of completion, and then a final certificate
of payment, was not required. The claim for a final payment
certificate, and then payment, was akin to a claim for a statement
and debatement of account, followed by payment, and that the summons
was in the circumstances not premature.
[8]
Although the heads of argument filed for Maykent on appeal continued
to rely on this argument, and contended that the JBCC contract
terms
were binding, and that the high court had erred in this regard, at
the hearing counsel did not persist with either argument.
It was also
conceded that no evidence had been led to establish that Maykent had
suffered damages as a result of Trackstar’s
breach.
[9]
However, counsel did argue that it was inappropriate that interest
should run from the date of summons when the final payment
certificate had been issued by TRE only five years after the
litigation commenced. The summons was served, as I have said, on 5
September 2008, and the final payment certificate was issued on 14
August 2013. However, as argued by Trackstar, TRE was Maykent’s
agent, and it had known from the date when Trackstar issued its final
account – 17 January 2007 – that the sum claimed
was
payable. TRE and Maykent were represented by the same attorneys
throughout the litigation. There was no doubt that Maykent
was aware
of its liability to pay the amount due at the date of service of the
summons.
[10]
Trackstar was entitled to a final payment certificate and should have
been paid on the submission of its final account. There
is no reason
to deny it interest on that sum at the prescribed rate from the date
of summons.
[11]
Accordingly the appeal is dismissed with costs.
_______________________
C
H Lewis
Judge
of Appeal
APPEARANCES
For
Appellant: M P van der Merwe SC
Instructed
by: Saunders Venter Van der Watt c/o
Louis Benn
Attorneys, Pretoria
Lovius Block,
Bloemfontein
For
Respondent: N A D Maritz SC, A A Botha
Instructed
by: Van Heerden & Krugel, Pretoria
Kramer Weihmann &
Joubert Inc Bloemfontein