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[2017] ZAGPJHC 438
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SS & G Project & Finance Solutions (Pty) Ltd v GIBB (Pty) Ltd and Others (A5014/16) [2017] ZAGPJHC 438 (31 October 2017)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE
NO: A5014/16
31/10/2017
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED.
In
the matter between
SS&G
PROJECT & FINANCE SOLUTIONS (PTY) LTD
APPELLANT
and
GIBB
(PTY) LTD
FIRST
RESPONDENT
RAND
WATER BOARD
SECOND RESPONDENT
EMFULENI
LOCAL MUNICIPALITY
THIRD RESPONDENT
THE
MINISTER OF WATER AND SANITATION
FOURTH RESPONDENT
THE
MINISTER OF
FINANCE
FIFTH RESPONDENT
THE
MINISTER OF ECONOMIC DEVELOPMENT
SIXTH RESPONDENT
J
U D G M E N T
VAN
OOSTEN J:
Introduction
[1]
The issue in the long line of litigation between the parties to this
appeal (excluding the fifth respondent) concerns the conclusion
of a
Consultancy Service Agreement on 26 February 2015 (the February 2015
agreement) between a consortium, under the name of Gibb-SS&G
Consortium, comprising the appellant (SS&G) and the first
respondent (Gibb) (the consortium), and the second respondent (Rand
Water), for the provision of transaction advisory services on behalf
of the third respondent (Emfuleni), in respect of a multi-million
mega sanitation project, known as the Sedibeng Regional Sanitation
Scheme (the Sedibeng project).
[2]
The litigation commenced on 16 March 2015 when SS&G launched an
urgent application against the respondents in this court,
in essence
seeking interdictory and declaratory relief, aimed at nullifying the
February 2015 agreement and procuring a new Consultancy
Service
agreement. The urgent application was heard by Victor J in the urgent
court who dismissed it with costs, due to lack of
urgency. The
application was opposed by all the respondents and proceeded in the
ordinary course. Lengthy affidavits with annexures
thereto were filed
mushrooming into a record consisting of 27 volumes packed with 2627
pages.
[3]
The application came up for hearing before Sikhakhane AJ, who, on 12
November 2015, dismissed the application with costs, including
the
costs of two counsel. The appeal before us is with leave of the court
a quo.
Background
facts
[4]
In March 2010, Gibb performed a feasibility study and submitted a
report. In June 2012, Emfuleni invited tenders from experienced
service providers for performing transaction advisory services in
regard to the Sedibeng project, for an initial period of 3 years.
On
28 June 2012 SS&G and Gibb formed the consortium with the sole
purpose of submitting a joint proposal in response to Emfuleni’s
invitation. By way of a letter dated 25 September 2012, Emfuleni
informed the consortium of the award of their tender resulting
in the
conclusion of a service agreement (the ELM agreement).
[5]
Shortly after conclusion of the ELM agreement, the management of the
Sedibeng project was taken over on national level and the
consortium’s activities under the ELM agreement were put on
hold. In May 2013 a Sedibeng Regional Scheme Implementation Protocol
was entered into to regulate the handover, cession and transfer of
the contracts that had been concluded by Emfuleni, to Rand Water.
The
consortium was not a party to the protocol.
[6]
In October 2013, Rand Water issued a new invitation to tender in
respect of substantially the same services the consortium was
contractually required to perform under the ELM agreement. On 10
October 2013 the consortium launched an urgent application against
Rand Water in this court, seeking interdictory relief aimed at
preserving its contractual rights against interference by Rand Water
by continuing with its tender process. An interdict was granted but
the matter was subsequently settled on the basis that the consortium
would proceed with delivering services as provided for in its
original appointment, as set out in a letter of offer to the
consortium
which was attached to the settlement agreement, albeit
revised in certain respects. The settlement agreement further
recorded that
Rand Water had been assigned the role of Emfuleni in
respect of the Sedibeng project.
[7]
A new consultancy service agreement between the consortium and Rand
Water was required and negotiated. This resulted in the
conclusion of
the February 2015 agreement.
[8]
It is SS&G’s case that the February 2015 agreement was
signed without its knowledge and in its absence, by Richard
Vries
(Vries), a director and chief executive officer of Gibb, on behalf of
the consortium, well knowing that SS&G had neither
agreed to, nor
authorised Gibb, and therefore Vries, to sign on its behalf. Finally,
SS&G contends that the February 2015 agreement
does not comply
with the settlement agreement. Attempts to settle the impasse that
had arisen came to naught and SS&G launched
the urgent
application which ultimately culminated in this appeal.
The
relief sought
[9]
In the notice of motion SS&G seeks the following relief:
‘
1.
…
2.
Interdicting and prohibiting the first and second respondents from
proceeding with the implementation of the written “Consultancy
Services Agreement” which was signed by them on or about 26
February 2015 (“the impugned Consultancy Services Agreement”).
3.
Interdicting and prohibiting the first and second respondents from
proceeding to implement any form of execution plan which may
have
been submitted pursuant to the impugned Consultancy Services
Agreement.
4.
Declaring that the first respondent had no authority to enter into
and sign that impugned Consultancy Services Agreement on behalf
of
the Gibb-SS&G Consortium, being a consortium comprised of the
appellant and the first respondent.
5.
Declaring that such impugned Consultancy Services agreement is null
and void and unenforceable.
6.
Directing the second respondent to enter into a new Consultancy
Services agreement with the aforesaid consortium, on the basis:
6.1
as contained and described in the Settlement Agreement concluded
under case number 37997/2013 in this Honourable Court, as read
together with the incorporated letter of the second respondent dated
10 February 2014 (both of which documents are annexed to the
founding
affidavit herein);
6.2
that, for the avoidance of doubt, Stage 2 of the relevant scope of
services will be executed and implemented on the basis of
the already
agreed public-private partnership, and not in terms of any form of
ECSA Guidelines.
7.
Directing the fourth respondent to instruct the second respondent, as
her implementing agent, to immediately conclude such new
Consultancy
Services Agreement on the basis as detailed in paragraph 6 above;
[Prayers 8 & 9: relief sought
against the eighth respondent which was abandoned]
10.
Directing that the first respondent is, in good faith, to enter into
negotiations and conclude with applicant a written Consortium
Agreement for purposes of implementing and executing the new
Consultancy Services Agreement which is to be concluded on the terms
as detailed in paragraph 6 above.
11.
Directing the first and second respondents to pay the costs of the
application on a scale as between attorney and client, jointly
and
severally.
12.
…’
[10] Numerous
material disputes of fact arose as the matter progressed. I do not
consider it necessary to traverse any of those
disputes. Suffice to
say that the existence of the factual disputes is common cause
between the parties. Counsel for SS&G sought
to overcome the
Room
Hire
-hurdle in seeking at the hearing in the court a quo, to
divide the final relief sought into two parts (termed rounds 1 and
2).
Round 1 is based on prayers 2 to 5, for relief based on facts he
submitted were ‘mostly common cause’. Round 2 is based
on
the remaining prayers in respect of which factual disputes incapable
of resolution admittedly existed in respect of which a
referral for
the hearing of oral evidence or for trial, was sought.
[11] The court a quo
held that the proposed division was artificial, that it would not
serve any purpose, that irresolvable disputes
of facts existed which
were foreseeable and consequently dismissed the application in its
entirety. In my view there are no grounds
for disturbing the finding.
The relief sought in both ‘rounds’ are intrinsically
linked, based on the same facts and
the fate of the relief sought
therefore is dependent on an assessment of the facts as a whole.
[12] Before this
court counsel for SS&G persisted with the proposed division and
asked this court to grant the interdictory
relief sought, with
reference to prayers 2 to 5 of the notice of motion, and to refer to
trial the balance of the relief sought
as contained in prayers 6, 7
and 10. In the appellant’s heads of argument it is indicated
that the appellant still seeks
an order declaring the impugned
agreement null and void and unenforceable, but that ‘this will
not arise in this appeal’.
Discussion
[13] The appeal, in
my view, at the outset, flounders when consideration is given to the
nature and importance of the Sedibeng project,
juxtaposed to the
interest SS&G seeks to protect.
[14] The Sedibeng
project, in a nutshell, addresses the need to upgrade the old
sanitation infrastructure within the Sedibeng District
Municipality
as well as the under capacity of all the water waste treatment works;
to eradicate multiple challenges including the
spillage of raw sewage
and the discharge of non-compliant effluent into the Vaal River; the
negative impact thereof on health and
safety of residents and enables
substantial economic and social development, including the provision
of housing. The portion of
the Sedibeng project that is directly
relevant to this matter relates to the Sedibeng project’s new
infrastructure, the contractual
value of which is, at 2010 prices,
estimated at R1.9bn.
[15] The probable
consequences, effect of and prejudice that may result from an
interdict are undoubtedly immense, if not irreparable
(Cf
Molteno
Brothers and Others v South African Railways and Harbours and Others
1936 AD 321
at 332). The Sedibeng project is
long overdue and evidently requires uninterrupted implementation and
prompt finalisation, as the
project is of national importance and
significance. SS&G readily acknowledges that the greater project
is of ‘immense
national importance’; that ‘the
health and safety of the very many residents, many of whom live in
impoverished communities,
is at stake’, and that there have
already been ‘lengthy, unacceptable and regrettable delays’.
The planning of
the project dates back to 2010 and the order appealed
against, was granted almost 2 years ago. In the meanwhile it must be
accepted
that the work and implementation of services have progressed
towards finalisation in respect of which nothing has been revealed
to
this court. In the absence of any information having been divulged to
this court as to the progress or absence thereof, this
court, in any
event, is unable to exercise a discretion as to whether it would be
just and equitable in the circumstances to grant
interdictory relief.
[16] The consortium,
in terms of the February 2015 agreement, is to earn R35m for phase 1
of the Sedibeng project and a fee of 10%
of the construction value of
R1.9bn in respect of phase 2. In this litigation SS&G pursues an
alleged contractual right against
Gibb which has a commercial value
only. SS&G’s claim, in essence, is for a split of the
revenue share between the members
of the consortium. It has no
bearing on the Sedibeng project, in particular the need and urgency
for its finalisation.
[17] As correctly
pointed out by counsel for Rand Water, SS&G now seeks to derail
the continued implementation and timeous finalisation
of the Sedibeng
project merely in an attempt to obtain a financial benefit from its
co-member in the consortium. The consortium
tendered, accepted the
appointment and signed the February 2015 agreement. The issue raised
by SS&G concerns the authority
of Gibb to sign the February 2015
agreement on the consortium’s behalf and Rand Water being aware
thereof.
[18] An alternative
and, in my view, more appropriate remedy was available to SS&G
which was to pursue its perceived claim against
Gibb, but that it has
seemingly failed to do (Cf
Johannesburg Consolidated Investment Co
Ltd v Mitchmor Investments (Pty) Ltd and Another
1971 (2) SA 397
(W) 404E-F). Of significance is that SS&G, in the passage of time
that has elapsed since the order was made, has taken no further
steps
to enforce its alleged claim. Counsel for the appellant, when engaged
on this aspect during argument, sought refuge in the
perceived
difficulty the appellant may experience in computing and proving
‘reputational’ damages. There is no merit
in the
argument: nothing prevented the appellant from instituting action
after judgment by the court a quo was delivered: as much
was conceded
by counsel for the appellant. To the contrary, the appellant
proceeded with the appeal, in the face of admitted factual
disputes,
in the hope of obtaining some procedural advantage.
[19] SS&G
further raises interpretational issues in regard to the February 2015
agreement and the letter of offer in the face
of admitted factual
disputes concerning the circumstances surrounding the negotiations
and the conclusion of the letter of offer.
The approach is
fundamentally flawed and cannot be sustained (see
Commercial Union
Assurance Co of South Africa Ltd v KwaZulu Finance and Investment
Corporation and Another
[1995] ZASCA 63
;
1995 (3) SA 751
(A) 759C-E;
Novartis
SA (Pty) Ltd v Maphil Trading (Pty) Ltd
2016 (1) SA 518
(SCA)
para [27] & [28];
Bothma-Batho Transport (Edms) Bpk v S Bothma
& Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA) para [12]).
[20] Counsel for the
appellant submitted that in the event of this Court not being
prepared to grant an interdict, a declarator
ought to be granted in
accordance with prayers 4 and 5 of the notice of motion. I do not
think it would be proper for this court
to accede to the request, for
the reasons that I am not satisfied that the issue of authority can
properly be decided on the papers
as they stand and, in any event,
that it constitutes an issue which should be considered and decided
upon by the trial court on
the evidence adduced on all the other
issues.
Conclusion
[21] In conclusion,
the realities of the situation to which I have referred, are
dispositive for this court to exercise its discretion
in favour of
granting interdictory relief (
Roberts v Chairman Local Road
Transportation Board, Cape Town and Another
1979 (4) SA 604
(C)
608A-D).
[22] Having
considered all the circumstances of this case there is no reason for
interfering on appeal with the discretion exercised
by the court a
quo in dismissing the application (see
Tamarillo (Pty) Ltd v BN
Aitken (Pty) Ltd
1982 (1) SA 398
(A) 430G-H;
Transnet Ltd v
Erf 152927 Cape Town (Pty) Ltd and Others
(798/2010) [2011]
ZASCA148 (26 September 2011)).
[23] It follows that
the appeal must fail.
Order
[24]
In the result the following order is made:
1.
The appeal is dismissed
.
2.
The appellant shall pay the costs of the appeal
such costs to include the costs consequent upon the employment of two
counsel by
the first, second and fourth respondents.
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
I
agree.
SE
WEINER
JUDGE
OF THE HIGH COURT
I
agree.
CJ
VAN DER WESTHUIZEN
ACTING
JUDGE OF THE HIGH COURT
COUNSEL
FOR APPELLANT
ADV JB BERRIDGE SC
ADV
BL MANENTSA
APPELLANT’S
ATTORNEYS
FLUXMANS INC
COUNSEL
FOR 1
ST
RESPONDENT
ADV BM GILBERT
ADV MCJ VAN
KERCKHOVEN
1
ST
RESPONDENT’S ATTORNEYS
BRIAN KHAN INC
COUNSEL
FOR 2
ND
RESPONDENT
ADV PG MALINDI SC
ADV MA QOFA
2
ND
RESPONDENT’S ATTORNEYS
MALEBYE MOTAUNG
MTEMBU
INC
COUNSEL
FOR 4
TH
RESPONDENT
ADV KD MOROKA SC
ADV H RAJAH
4
TH
RESPONDENT’S ATTORNEYS
STATE ATTORNEY
JOHANNESBURG
DATE
OF HEARING
27 OCTOBER 2017
DATE
OF JUDGMENT
31 OCTOBER 2017