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[2024] ZAKZPHC 15
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Milling Techniks (Pty) Ltd v MEC for Kwazulu-Natal Department of Transport and Another (6319/2022P) [2024] ZAKZPHC 15 (6 March 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case no: 6319/2022P
In the matter between:
MILLING
TECHNIKS (PTY)
LTD
APPLICANT
and
THE MEC FOR THE
KWAZULU-NATAL
DEPARTMENT
OF TRANSPORT
FIRST RESPONDENT
TONY SMITH
N.O.
SECOND RESPONDENT
ORDER
The following order is
granted:
1.
The application for leave to appeal is
dismissed with costs, such costs to include the costs of two counsel.
JUDGMENT
E Bezuidenhout J
[1] The
first respondent applies for leave to appeal against my judgment
handed down on 10 November
2023. The application was filed on 1
December 2023. Due to the unavailability of counsel during the recess
period, the application
was only heard on 9 February 2024. The
grounds of appeal were set out in the application and read as
follows:
‘
1.
Her Ladyship placed a restrictive interpretation on clause
10.2 of the GCC’s, in that she held expressly, or by necessary
implication, that:
1.1
the
provision applies only in relation to payment disputes and,
accordingly,
1.2
the
provision had no application in relation to the dispute that was
articulated in the parties’ correspondence during June
2019
(annexures A and B to the answering affidavit, pages 241 to 244).
2.
For
the following reasons, it is respectfully submitted that there is a
reasonable prospect that an appeal court will interpret
the clause
differently:
2.1
It
is not expressly stated that the clause is intended to apply only in
respect of payment claims.
2.2
To
the contrary, the clause is couched in inclusive language which
indicates that it is intended to apply “in respect of any
matter arising out of or in connection with the contract”.
2.3
The
purposes of the clause and, more particularly the time barring
provision, is
to ensure that disputes are promptly
raised and addressed, to avoid lingering uncertainty.
2.4 An
inclusive interpretation would, therefore, give effect to such an
intended purpose. For example,
in a case such as the present, the
parties would be required to address and resolve their dispute as
soon as it arose.
2.5
An
appeal court is, furthermore, likely to interpret and apply the
provision in a manner than is consistent with contractual principles.
Such a court is, therefore, likely to favour an interpretation that
is in accordance with doctrine of election, in terms of which
Applicant was required to make an election when, in June 2019,
Applicant was pertinently informed of the manner in which First
Respondent intended to perform the contract.
2.6
It
is respectfully submitted that an appeal court will likely find that
First Respondent, in its letter dated 28 June 2019, stated,
unequivocally, its intentions in relation to the contract. There was
no room for debate. Therefore, insofar as Applicant considered
that
First Respondent’s stated intentions were inconsistent with the
parties’ agreement. The letter would, on Applicant’s
version, have constituted a repudiation.
2.7
Consequently,
if Applicant considered this to constitute a repudiation or an
anticipatory breach, then that is when Applicant’s
cause of
action arose. This, based on the ordinary meaning of words, is when
there was a “cause of dissatisfaction”.’
[2]
Both
counsels for the applicant as well as counsel for the first
respondent submitted detailed written submissions in respect of
the
application for leave to appeal, which I have carefully considered.
[3]
Before
I deal with the merits of the application, it is perhaps appropriate
to say something about
the test to be applied in applications of this
nature. In terms of
section 17(1)
(a)
(i)
of the
Superior Courts Act 10 of 2013
, leave to appeal may only be
given where the judge is of the opinion that ‘the appeal would
have a reasonable prospect of
success’, or in terms of
section
17(1)
(a)
(ii),
if there is ‘some other compelling reason why the appeal should
be heard’.
[4] In
The
Mont Chevaux Trust v Goosen and others,
[1]
Bertelsmann J (in an obiter dictum) held that:
‘
It
is clear that the threshold for granting leave to appeal against a
judgment of a High Court has been raised in the new Act. The
former
test whether leave to appeal should be granted was a reasonable
prospect that another court might come to a different conclusion,
see
Van Heerden v Cronwright & Others
1985 (2) SA 342
(T) at 343H. The use of the word “would”
in the new statute indicates a measure of certainty that another
court will
differ from the court whose judgment is sought to be
appealed against.’
[5] The
test was also considered in
S
v Smith
[2]
where the court held:
‘
What
the test of reasonable prospects of success postulates is
a dispassionate decision, based on the facts and the law, that
a
court of appeal could reasonably arrive at a conclusion different to
that of the trial court. In order to succeed, therefore,
the
appellant must convince this court on proper grounds that he has
prospects of success on appeal and that those prospects are
not
remote, but have a realistic chance of succeeding. More is
required to be established than that there is a mere possibility
of
success, that the case is arguable on appeal or that the case cannot
be categorised as hopeless. There must, in other words,
be a sound,
rational basis for the conclusion that there are prospects of success
on appeal.
’
(Footnotes omitted.)
[6] In
Four
Wheel Drive v Rattan NO
,
[3]
Schippers JA, with reference to
S
v Smith supra,
referred to the principle that leave to appeal should only be granted
where ‘a sound, rational basis [exists] for the conclusion
that
there are prospects of success on appeal’. The court is
required to test the grounds on which leave to appeal is sought
against the facts of the case and the applicable legal principles.
The court a quo was also criticised for granting leave to appeal
when
there were no reasonable prospects of success, which resulted in the
parties being put through the inconvenience and expense
of an appeal
without any merit.
[7] It
is furthermore always important when considering applications of this
nature to keep in mind
what was held in
R
v Dhlumayo
[4]
:
‘
No
judgment can ever be perfect and all-embracing, and it does not
necessarily follow that, because something has not been mentioned,
therefore it has not been considered.’
[8] It
was submitted by Mr Pillay, appearing for the applicant, with
reliance on
Democratic
Alliance v President of the Republic of South Africa
[5]
that
‘
A balance
between the rights of the party which was successful before the
court a quo and the rights of the losing
party seeking
leave to appeal need to be established so that the absence of a
realistic chance of succeeding on appeal dictates
that the
balance must be struck in favour of the party which was initially
successful.’
It was submitted that
there should be a basis in fact or in law to sustain a realistic
chance, not just a hope.
[9] Returning
to the present application, I must say that I struggled to understand
the basis of the
ground raised in para 1 of the application. I did
not anywhere in my judgment find that clause 10.2 of the GCC only
applied to
payment disputes and that the provision had no application
to the alleged ‘dispute’ that was articulated in Mrs
Lazarova’s
letter of 28 June 2019. I dealt with her letter in
para 39 of my judgment.
[10] Mr
Crampton, appearing for the first respondent, in a roundabout way
eventually arrived at a submission
to the effect that I erred in not
finding that Mrs Lazarova’s letter, and its conclusion in
itself, amounted to a cause of
dissatisfaction as envisaged in clause
10.2.2 and that the letter would have constituted a repudiation of
the contract. This was
in line with what was submitted in para 2.6 of
the first respondent’s application for leave to appeal, as the
first respondent
‘stated unequivocally, its intensions in
relation to the contract’ in the letter of 28 June 2019. Clause
10.2.2, which
I summarised in para 6 of my judgment, reads as follows
in its entirety:
‘
If,
in respect of any matter arising out of or in connection with the
Contract, which is not required to be deal with in terms of
clause
10.1, the Contractor or the Employer fails to submit a claim within
28 days after the cause of dissatisfaction, he shall
have no further
right to raise any dissatisfaction on such matter.’
[11] In
essence, it was submitted that the letter of 28 June 2019 should have
been regarded as a cause
of dissatisfaction. The applicant should
then have taken the prescribed steps, as referred to in my judgment
in respect of a dissatisfaction
claim, some two years before it was
going to submit its payment certificate, which it did not do,
creating the impression that
it accepted the content of the letter.
It was submitted that this would have been the prudent, businesslike
thing to do.
[12] Mrs
Lazarova, in her answering affidavit, stated that the applicant did
not contest the ‘advice’
she gave in her letter of 28
June 2019. It was likewise submitted in argument on behalf of the
first respondent during the hearing
of the initial application, that
the applicant did not contest Mrs Lazarova’s ‘advice’
and that the first respondent
understood from the applicant’s
conduct that the applicant accepted the ‘advice’ stated
in the letter of 28 June
1019. This advice, the first respondent
submitted, established a cause of dissatisfaction and would have
given the applicant a
right to go to court. I have dealt with
letter and the issues surrounding it in para 39 of my judgment, as
mentioned above.
I had found that the dissatisfaction claim (meaning,
this particular claim, and not in general) could only be submitted
once the
management fee had been excluded and by implication, that
was when the dissatisfaction arose.
[13] It
was submitted on behalf of the applicant that to hold that the
dissatisfaction claim arose
when advice was given and when the
parties were debating the issue, would in fact lead to an
unbusinesslike interpretation. At
best, it gave rise to a cause of
disagreement and nothing more and it certainly could not be elevated
to a cause of dissatisfaction.
It was further submitted that the
applicant was dissatisfied when the payment certificate was issued
and, as a result, became entitled
to raise a dissatisfaction in
respect of the payment certificate once it was formally issued. I
agree with these submissions.
[14] It
was also submitted by the applicant that my judgment was not fully
dispositive of the parties’
rights as the first respondent may,
and is required, to place its case before the adjudicator who is
appointed to determine the
dispute between the parties and it will
suffer no prejudice in pursuing adjudication. I dealt with the
adjudicator’s entitlement
to consider the issue of time-barring
raised by the first respondent in para 36 of my judgment. It was
further submitted that the
further prosecution of an appeal on what
is an
in limine
or interlocutory matter relating to the
adjudication proceedings, would only serve to delay matters which
should really be before
the adjudicator. The State was using its
might and resources emanating from public funds to pursue a technical
matter to avoid
the determination and hearing of the real dispute
between the parties. Whilst I fully appreciate the first respondent’s
rights
to litigate its matters in court, I must agree with the
applicant’s submissions and concerns in this regard. In my view
this
matter clearly needs to run its course in front of the
adjudicator.
[15] I
have carefully considered all the submissions as well as the grounds
of appeal. I am of the
view that there is no sound, rational basis to
conclude that there are reasonable prospects of success on appeal,
bearing in mind
the grounds raised by the first respondent.
[16] As
far as the issue of costs for this leave to appeal are concerned, the
applicant sought costs
on the punitive scale, which were to include
the costs of two counsel. It was submitted that punitive costs are
warranted as a
measure of displeasure with the waste of time and
public resources. A similar order was sought in the initial
application. I was,
in essence, accused by the applicant of being too
lenient towards the first respondent when I only ordered it to pay
the costs
of the application, due to public funds being involved. I
am, however, still mindful of the implications on the public purse
and
am further unconvinced that costs on a punitive scale are
justified. I will, however, allow costs of two counsel as requested.
[17] I
accordingly grant the following order:
1. The
first respondent’s application for leave to appeal is dismissed
with costs, such costs
to include the costs of two counsel.
E BEZUIDENHOUT J
Date of hearing:
9 February 2024
Date of judgment:
6 March 2024
Appearances:
For the applicant:
I S Pillay SC
DM De
Jager
Instructed by:
Cox Yeats
Ncondo
Chambers
Vuna
Close
Umhlanga
Ridge
Email:
dvcek@coxyeats.co.za
;
jsmit@coxyeats.co.za
Tel:
031 536 8500
c/o
Stowell and Company
295
Pietermaritz Street
Pietermaritzburg
Ref:
GJ Campbell/ S-B/Cox
For the first respondent
(applicant in the
application for leave to appeal):
D Crampton
Instructed by:
GNG Attorneys
211
Burger Street
Pietermaritzburg
E
mail: glitigation3@gngattorneys.co.za
Tel:
033 345 3427
Ref: D
1200/50/63
[1]
The
Mont Chevaux Trust v Goosen and others
[2014] ZALCC 20
; 2014 JDR 2325 (LCC) para 6.
[2]
S
v Smith
[2011] ZASCA 15
;
2012 (1) SACR 567
(SCA) para 7.
[3]
Four
Wheel Drive Accessory Distributors CC v Rattan NO
[2018] ZASCA 124
,
2019 (3) SA 451
(SCA) para 34.
[4]
R
v Dhlumayo and another
1948 (2) SA 677
(A) at 706.
[5]
Democratic
Alliance v President of the Republic of South Africa and others
[2020]
ZAGPPHC 326 para 5.