About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2018
>>
[2018] ZAECPEHC 9
|
|
East Cape Midlands College v Go Training Academy CC (2211/2017) [2018] ZAECPEHC 9 (27 February 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, PORT ELIZABETH
Case
No.: 2211/2017
Date
Heard: 15 February 2018
Date
Delivered: 27 February 2018
In
the matter between:
EAST
CAPE MIDLANDS
COLLEGE
Excipient/Defendant
and
GO TRAINING ACADEMY
CC
Respondent/Plaintiff
JUDGMENT
EKSTEEN
J:
[1]
The
respondent issued summons in which it claims damages in the
amount of R3 674 965,17 arising from the excipient’s
alleged repudiation in September 2014 of a contract concluded between
the parties in April of that year. The excipient has
taken an
exception to the respondent’s particulars of claim contending
that they lack averments necessary to make out a cause
of action,
alternatively, that they are vague and embarrassing.
[2]
It is the
respondent’s case that it concluded a contract with the
excipient for the provision of goods and services for a
sum of
R17 279 107,38. The excipient duly placed orders with
the respondent for the provision of such goods and
services to a
total amount of R6 213 024,40, which sum it duly paid.
The excipient, however, failed to procure
the remainder of the goods
and services under the contract from the respondent. In
September 2014 the excipient advertised
afresh for tenders in respect
of the remainder of the goods and services which the respondent
contends that it had earlier contracted
to provide to the excipient.
This it is alleged constituted a repudiation of the contract which
the respondent has accepted.
The respondent alleges that it has
suffered damages in the amount of R3 674 965,17, being the
difference between the
purchase price of the goods and the
plaintiff’s cost price as set out in its contract.
[3]
The
contract arose from a public tender process. The excipient is a
public college providing education and training in terms
of the
Continuing Education and Training Act, 16 of 2007 and operating from
various campuses in the Eastern Cape. The excipient
called for
tenders for the supply, delivery, installation and commissioning of
certain information technology equipment at various
different
campuses: thirteen in all. The tender documentation set
out in schedules the equipment which was required
at each site and
provided that the excipient reserved for itself the right to “accept
all or any part of a quotation”.
The documentation also
reserved for the excipient the right to “withdraw its decision
to seek the provision of the services
at any time”.
[4]
The
respondent submitted a bid in respect of all thirteen sites.
Its bid totalled the amount of R17 279 107,38.
The
excipient accepted the respondent’s bid and awarded “the
bid” to the respondent in writing on certain written
terms and
conditions. The exception turns on the interpretation of this
agreement. It is the respondent’s
case as set out
in its particulars of claim that the bid was awarded to it to supply
the equipment set out in the tender documentation
to all thirteen
sites in the total sum set out earlier herein.
[5]
The
excipient contends, correctly, that the plaintiff’s entire
cause of action is premised thereon that the entire tender
of
R17 279 107,38 was awarded to it as the successful bidder.
The exception proceeds, however, on the ground that
it is plainly
apparent from the annexures to the plaintiff’s particulars of
claim that the bid was not awarded in the total
sum but only in the
limited sum of R6 213 023,40.
[6]
I turn to
consider the respondent’s particulars of claim. In
paragraphs 3, 4 and 5 of the particulars of the plaintiff’s
claim the plaintiff alleges:
‘
3. On 15 April 2014 and
pursuant to a public tender process the Defendant represented by JJ
Mbana awarded to the Plaintiff, represented
by G Nosworthy, its bid
RFB/SCM EMC 06/14 in writing, which the Plaintiff represented as
aforesaid, accepted in writing.
4. The writing is contained in letters
annexed hereto marked “A” and “B”
respectively.
5. The Plaintiff and the Defendant
represented as aforesaid duly signed the contract which is annexed
hereto marked “C”.’
[7]
The
material portions of Annexures “A” and “B”
upon which the respondent relies for purposes of paragraph
3 of the
particulars of claim respectively record:
‘
ʺA”
East Cape Midlands College wishes to thank you for your interest
shown in the above- mentioned bid.
You
are hereby notified that the bid,
RFB/SCM
EMC 06/14
have (
sic
)
been awarded to
GO TRAINING
ACADEMY
and you are
required to complete the attached contractual documentation and
submit the completed documentation to the SCM department
by not later
than Tuesday, 15 April 2014.
Please
acknowledge receipt of the letter promptly in writing.’
And
“B”:
“
We hereby thank you for
awarding us the abovementioned bid, RFB/SCM EMC 06/14 for the amount
of R17795307,95 Inc. VAT.
This letter thereby serves as our
acceptance of the above-mentioned bid, on our terms as per our
submitted tender document and including
all the other communiques
with the college regarding said tender.”
[8]
I pause to
record that the figure of R17 795 307,95 is not explained,
however, in argument of the exception before me
it was not in dispute
that the total sum of the respondent’s bid amounted to
R17 279 107,38 as recorded earlier.
The discrepancy
in the figure is not a ground relied upon in the exception and it is
of no relevance to the present proceedings.
[9]
It is
immediately apparent from annexure “A” that the contract
documentation, annexure “C”, was annexed
to the letter of
acceptance. Annexure “C” consists of two pages,
Part 1 being completed and signed by the said
Nosworthy on behalf of
the respondent and Part 2 being completed and signed by the said
Mbana on behalf of the excipient.
The material portion of Part
1 of the contract documentation records:
“
1. I hereby undertake to supply
all or any of the goods and/or works described in the attached
bidding documents to
East
Cape Midlands College
in accordance with the requirements and specifications stipulated in
the bid number
RFB/SCM
EMC 06/14
at the
price/s quoted. My offer/s remains binding upon me and open for
acceptance by the purchaser during the validity period
indicated and
calculated from the closing time of bid.
2. The following documents shall be
deemed to form and be read and construed as part of this agreement:
(i) The bidding documents
viz
- Invitation to bid;
- Tax clearance certificate;
- Pricing Schedule(s);
- Technical Specification(s);
- Preference claims for Broad Based
Black Economic Empowerment Status Level of Contribution in terms of
the Preferential Procurement
Regulations 2011;
- Declaration of interest;
- Declaration of bidder’s past
SCM practices;
- Certificate of Independent Bid
Documentation;
- Special Conditions of Contract.
(ii) General Conditions of Contract;
and
(iii) Other (specify)”
[10]
The
material portion of Part 2 completed by the said Mbana on behalf of
the excipient records:
“
1.
I,
Mr JJ Mbana
in my capacity of
Chief
Executive Officer
accept your bid under reference number,
2.
RFB/SCM EMC 06/14
dated,
20 March 2014
for the supply
of goods/works indicated hereby and/or further specified in the
annexure (s).
3.
An official order indicating delivery instructions is forthcoming.
4.
I undertake to make payment of the goods/works delivered in
accordance with the terms and conditions of the contract, within
30
(thirty) days after receipt of an invoice accompanied by the delivery
note.
ITEM NUMBER
PRICE (ALL
APPLICABLE TO E TAXES INCLUDED)
BRAND
DELIVERY PERIOD
B-BBEE STATUS LEVEL
OF CONTRIBUTION
MINIMUM THRESHOLD
FOR LOCAL PRODUCTION AND CONTENT (IF APPLICABLE)
Total
Delivery sites:
Site 1:
Site 2:
Site 9:
Site 10:
Site 12:
R6 213.40
R240 116.46
R555 462.26
R2 602 405.45
R2 580 098.08
R234 941.15
As per bid
RFB/SCM EMC 06/14
4-6 weeks
2
N/A
”
[11]
The
annexures referred to in paragraph 2 of Part 2 are the documents
listed in paragraph 2 of Part 1 of annexure “C”.
Mr
Huisamen
SC
, who
appeared on behalf of the excipient, contends that the particulars of
claim read together with the documents reveal unambiguously
that the
contract documentation, annexure “C”, relied upon by the
plaintiff was annexed to the letter of acceptance,
annexure “A”
and accordingly qualifies the acceptance of the bid. Annexure
“C”, so he argued, refers
expressly to the acceptance of
the bid “for the supply of goods/works indicated hereunder”
and to the specific sites
and value set out in Part 2 of annexure
“C”.
[12]
Mr
van
der Linde SC
on behalf of the respondent acknowledges that the respondent’s
claim is premised thereon that the entire tender of R17 279 107,38
was awarded to the respondent. He nevertheless submits that the
matter is not capable of resolution by exception. In
doing so
he argues that the award was not limited to the goods and works
expressly listed in Part 2 of annexure “C”,
but included
additional goods and works as “further specified in the
annexures” attached to the contract document,
including the bid
submitted by the respondent in respect of all thirteen sites.
[13]
In order to
succeed in an exception an excipient has the duty to persuade the
court that upon every interpretation which the pleading
in question,
and in particular the document on which it is based, can reasonably
bear, no cause of action or defence as disclosed
(see
Erasmus:
Superior Court Practice
(2
nd
ed) D1-294). Mr
van
der Linde
submits furthermore, correctly, that an exception is generally not
the appropriate procedure to settle questions of interpretation
because evidence may be admissible at the trial which may cast light
on the correct interpretation of the contract. (See
Murray
& Roberts Construction Ltd v Finat Properties (Pty) Ltd
1991 (1) SA 508
(A); and
Sun
Packaging (Pty) Ltd v Vreulink
[1996] ZASCA 73
;
1996 (4) SA 176
(SCA).)
[14]
In
Coopers
& Lybrand and Others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A) at 768A-E Joubert JA considered the
question of interpretation of contracts and the extent of admissible
evidence and
stated:
“
The
correct approach to the application of the 'golden rule' of
interpretation after having ascertained the literal meaning of the
word or phrase in question is, broadly speaking, to have regard:
(1) to the
context in which the word or phrase is used with its interrelation to
the contract as a whole, including the nature and purpose
of the
contract …
(2) to the
background circumstances which explain the genesis and purpose of the
contract, ie to matters probably present to the
minds of the parties
when they contracted.
(3) to apply
extrinsic evidence regarding the surrounding circumstances when the
language of the document is on the face of it ambiguous,
by
considering previous negotiations and correspondence between the
parties, subsequent conduct of the parties showing the sense
in which
they acted on the document, save direct evidence of their own
intentions. …”
[15]
Subsequently
Wallis JA referred to this passage in
Bothma-Batho
Transport (Edms) Beperk v Bothma & Seun Transport (Edms)
Beperk
2014 (2) SA 494
(SCA) at 499-500 at para [12] and stated:
“
[12] That
summary is no longer consistent with the approach to interpretation
now adopted by South African courts in relation to
contracts or other
documents, such as statutory instruments or patents. Whilst the
starting point remains the words of the
document, which are the
only relevant medium through which the parties have expressed their
contractual intentions, the process
of interpretation does not stop
at a perceived literal meaning of those words, but considers them in
the light of all relevant
and admissible context, including the
circumstances in which the document came into being. The former
distinction between permissible
background and surrounding
circumstances, never very clear, has fallen away. Interpretation is
no longer a process that occurs
in stages but is 'essentially one
unitary exercise'.”
[16]
The
effect is that a greater quantum of evidence may now be admissible to
place the document and the words in issue in their particular
context
and the process of interpretation does not stop with the literal
meaning of the words used. Such evidence as is admissible
will
necessarily facilitate the ultimate interpretation of the agreement.
[17]
In
respect of the contract currently under consideration annexure “A”
which I have quoted earlier records that “the
bid”,
RFB/SCM EMC 06/14 has been awarded to Go Training Academy.
Whilst this is suggestive thereof that the entire
bid submitted by
the respondent had been awarded to the respondent it must be read
together with the contract documentation.
Part 1 of Annexure
“C” makes it clear that all the bidding documents and in
particular the pricing schedules form part
of the contract.
Part 2 of the contract document, Annexure “C”, records
that the bid was accepted for “the
supply of goods/works
indicated hereunder and/or further specified in the annexure(s)”.
At face value it suggests that
there may be other goods or works in
respect of which the contract has been accepted as emerges from the
further annexures.
The respondent contends that this is indeed
what emerges from the pricing schedules which it submitted and which
forms part of
the contract. In this regard the letter of
acceptance Annexure “B” records the respondent’s
acceptance
of the bid “on our terms as per our submitted tender
document and including all the other communiques with the college
regarding
the said tender”. These further communiques may
conceivably have a bearing on the interpretation of the contract.
For these reasons Mr
van
der Linde
argues
that on a proper interpretation of the contract it may be found that
the reference to “goods/works indicated hereunder”
may
have been intended to refer only to the first phase of the contract.
[18]
On
a consideration of the pleading and the argument presented to me I
consider that there is considerable force in the argument
advanced by
Mr
Huisamen
and,
prima
facie
,
the excipient’s interpretation of the document is probably
correct. I do not, however, think that the contract
concluded between the parties is free of all ambiguity. In the
circumstances the interpretation of the contract in the present
matter cannot be conclusively decided on exception. In those
circumstances I also do not consider that it can be found at
the
exception stage that annexures “B” and “C”
are necessarily irreconcilable so as to render the particulars
of
claim vague and embarrassing.
[19]
In
the result, the exception is dismissed with costs.
J
W EKSTEEN
JUDGE
OF THE HIGH COURT
Appearances:
For
Excipient/Defendant: Adv JD Huisamen SC instructed by Joubert Galpin
& Searle, Port Elizabeth
For
Respondent/Plaintiff: Adv HJ van der Linde SC instructed by Nelson
Attorneys, Port Elizabeth