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[2023] ZAECMKHC 99
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City Square Trading 204 (Pty) Limited v Inxuba Yethemba Local Municipality and Another (12 September 2023) (5477/2016) [2023] ZAECMKHC 99 (12 September 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, MAKHANDA
NOT
REPORTABLE
Case
No.: 5477/2016
Date
Heard: 31 August 2023
Date
Delivered: 12 September 2023
In
the matter between:
CITY
SQUARE TRADING 204 (PTY) LIMITED
Plaintiff
And
INXUBA
YETHEMBA LOCAL MUNICIPALITY
First
Defendant
CHRIS
HANI DISTRICT MUNICIPALITY
Second
Defendant
JUDGMENT
EKSTEEN
J:
[1]
The
issues for decision in this matter are whether a contract concluded
between the first defendant, Inxuba Yethemba
[1]
Local Municipality (Inxuba Yethemba) and the plaintiff, City Square
Trading 204 (Pty) Limited, trading as Hlumisa Engineering Services
(City Square), was lawfully delegated (assigned) to the second
defendant, the Chris Hani District Municipality (CHDM), so that
CHDM
became liable to City Square for the obligations of Inxuba Yethemba
and, if so, the interpretation of the contract.
[2]
CHDM
was at all material times the Water Services Authority in terms of
the Water Services Act
[2]
(the
Act) which imposed on it an obligation to provide access to water
[3]
for its entire district. It is entitled to perform the functions of a
water services provider
[4]
itself, or it may contract in writing with a different entity to
perform the functions of a water services provider.
[5]
Inxuba Yethemba is a local authority situated wholly within the
district of CHDM and CHDM had entered into a written agreement
(the
water agreement) with Inxuba Yethemba to perform the functions of the
water services provider
[6]
within its own area of jurisdiction on their behalf. In order
to discharge its obligations to CHDM under the water agreement
Inxuba
Yethemba entered into an agreement (the maintenance agreement) with
City Square, a company engaged in mechanical and electrical
construction and the design of electrical panels and pump stations
for water and waste water. In terms of the maintenance agreement
City
Square undertook the performance of certain operations, maintenance
of pumps, boreholes and electrical panels and the provision
of
support to water services. The maintenance agreement was concluded in
February 2014 for a period of two years in accordance
with a
legitimate tender process and the validity of the agreement is not in
dispute.
[3]
City Square was required to maintain a
permanent presence in Inxuba Yethemba in order to respond to
emergency maintenance requirements
from time to time. However, the
water agreement expired on 30 June 2014, while the maintenance
agreement was still in force.
In anticipation of the expiry the
CHDM resolved, during March 2014, that it would assume the functions
of the water services provider
for Inxuba Yethemba itself with effect
from 1 July 2014. By July 2014 Inxuba Yethemba had defaulted on
numerous payment obligations
to City Square and when City Square
enquired from Inxuba Yethemba about their overdue invoices they were
referred to CHDM for payment.
[4]
In these proceedings City Square contended
that the maintenance agreement had been delegated, or assigned, to
CHDM and that CHDM
had taken over all the rights and obligations of
Inxuba Yethemba under the contract. They said, accordingly, that they
looked to
CHDM for payment of their invoices. On 12 December 2014
representatives of City Square met with Mr Dungu of CHDM and they
agreed
that the maintenance agreement would be suspended to enable
CHDM to appoint an independent engineer to investigate and verify
what
services had been rendered and what goods or equipment had been
supplied by City Square and to consider their complaints of
non-payment.
During March 2015 City Square became aware that
CHDM had engaged another contractor to render services and to supply
the goods
and equipment which they had tendered to do. They
considered the conduct to be a repudiation of the maintenance
agreement which
they accepted
,
and they cancelled the contract. In consequence thereof City Square
issued summons in which they claimed payment in terms of the
contract
for invoices rendered and damages for loss of profits as a result of
the repudiation. Initially they cited Inxuba
Yethemba as the
first defendant and CHDM as the second. The claim against
Inxuba Yethemba was subsequently withdrawn and
they did not
participate in the litigation. CHDM on the other hand, resisted the
claim and denied that they had any contractual
liability to City
Square.
[5]
As I have said, the essence of the first
dispute in this matter is whether the maintenance agreement concluded
between City Square
and Inxuba Yethemba had been delegated, or
assigned, to CHDM so as to render CHDM liable for the obligations
arising from the contract.
[6]
Mr Jordaan, who had been employed by City
Square for approximately seven years, testified on their behalf. He
said that City Square
had not been advised in June or July 2014 of
the takeover of the water services provider functions by CHDM and
they had continued
to discharge their obligations to Inxuba Yethemba
in terms of the maintenance agreement. During or about July or
August 2014
Mr Jordaan and Mr Wardle, also of City Square, met with
Mr Saleni, the technical manager for Inxuba Yethemba Municipality, in
respect
of their outstanding and overdue invoices. He said that
Mr Saleni advised them that Inxuba Yethemba were experiencing
financial
challenges and that the water provider functions would be
taken over by CHDM. He explained that all payments due under
the
maintenance agreement would henceforth be made by CHDM. Mr Saleni
had requested them, accordingly, to be patient.
[7]
After the lapse of some time, and as no
further payments were being received, Mr Jordaan returned to Inxuba
Yethemba only to be
advised that Mr Saleni had now left the employ of
the municipality. However, he was advised by employees of the
municipality
whose identity he was unable to recall that CHDM was now
responsible for all outstanding payments. In view of this
communication
he set up a meeting with Mr Dungu, who was the
technical director of CHDM. Mr Dungu, he said, informed him that the
CHDM had taken
over the running of the water services for Inxuba
Yethemba and said that they wanted to “cede” the
maintenance
contract
to CHDM and to take it over.
Accordingly, he requested them to continue with the maintenance
contract and to reissue the unpaid
invoices to reflect CHDM as the
debtor because they would be liable for outstanding debts. City
Square accepted this proposal
as evidenced by the reissue of invoices
to CHDM and, as I have said, some payments were made by CHDM. City
Square continued to
maintain a full-time presence in Inxuba Yethemba
in terms of the maintenance agreement and Mr Jordaan understood that
their contract
with Inxuba Yethemba had been taken over by CHDM, but
no further work was allocated to them. Flowing from
these
interactions City Square contended that the parties had
expressly, alternatively tacitly, agreed that CHDM would be
substituted
as the contracting party in place of Inxuba Yethemba in
respect of the maintenance agreement.
[8]
It was argued on behalf of CHDM that Mr
Jordaan had conceded in cross-examination that the intended “cession”
of the
maintenance agreement never in fact occurred and that City
Square had never concluded any “contract” with CHDM. Mr
Jordaan made a favourable impression on me in the witness box and I
certainly never formed the impression that he had attempted
to
mislead me. It clearly emerged from his evidence that he was a
technically qualified man and the concessions made in respect
of
legal conclusions to be drawn from his interactions with Mr Dungu
cannot be decisive of the issue. His difficulty was
compounded
by the inaccurate use of legal terms, in particular the use of the
terms “cession” and “cede”.
The legal
concepts were not explained to him and I consider that the high-water
mark of these concessions was that he sought to
convey that no
express “cession” or “contract” had been
concluded. In the view that I take of the matter
there is no evidence
of an express cession and assignment and, for purposes of this
judgment, I shall approach the matter on the
basis of a tacit
agreement to cede and assign the maintenance agreement to CHDM, as
pleaded in the alternative.
[9]
As adumbrated earlier, City Square were not
advised of the expiry of the water agreement at the end of June 2014
or of the performance
of the water services during that time.
However, subsequently, in preparation for the current litigation, the
minutes of two council
meetings of the CHDM were discovered.
The first related to a meeting of the council which had occurred on
26 March 2014.
An extract of the minutes of this meeting related to a
report prepared by Mr Dungu to advise the council on the recommended
model
of the water services provider function in the light of the
anticipated expiry of contracts, including that with Inxuba
Yethemba.
It recorded:
“
It
had … been analysed … to what extent and (
sic)
risks would expose the District Municipality should a decision to be
taken
(sic)
by
Council at the end of the current financial year to take over the
service.
The risks can be listed
as follows:
·
Maintenance and Operational risk –
this is a risk associated with collapse of the service.
·
…
·
Risk associated with contingent liabilities
– this relates to any unknown … debts associated with
water services and
commitments that are owed by Local Municipalities
to third parties.”
[10]
After consideration of the report the
council’s resolution recorded,
inter
alia
, that:
“
Council,
as the Water Services Authority, take full responsibility of the
function for Lukhanji and Inxuba Yethemba Municipalities
with effect
from the 01
st
of July 2014.”
[11]
The extract from the minutes serve to
emphasise that it was within the contemplation of the CHDM that
existing contractual debts
owed by the local municipalities of
Lukhanji and Inxuba Yethemba and associated with the water services
would constitute a risk
to CHDM. It further suggested that the
CHDM had been alerted to a risk associated with the possible collapse
of the water
services which had to be averted.
[12]
The second minute related to a meeting of
the CHDM council on 30 June 2014. The material extract from the
minutes relates to the
taking over of existing contracts by the CHDM
to ensure effective service delivery. The debate had again been
facilitated by a
report prepared by Mr Dungu in order to request
approval for the taking over of existing contracts held by local
municipalities
to ensure service delivery is not disrupted during the
transfer process of the function from local municipalities to the
CHDM.
Accordingly, the presentation recorded:
“
The
taking over of the function means that CHDM will have the direct
responsibility for the performance of all Water Services Provider
functions and as such will require the necessary service delivery
mechanisms to perform this function effectively.”
[13]
Mr Dungu had therefore proposed that
“existing contracts and mechanisms for service provision”
be “ceded”
to the CHDM to ensure continuity and efficient
service delivery.
[14]
Later in his presentation, dealing
specifically with Inxuba Yethemba, he had recorded:
“
There
are several term contracts … issued through a competitive
bidding process by LMs
[7]
in
ensuring that relevant resources and materials is available for the
operation and maintenance of water service schemes and the
provision
of technical support where required. The assumption of the water
services provider function by CHDM will require that
such mechanisms
are viable for the CHDM to perform the water service provider
function effectively.
—
It is proposed that the term contracts for
Water services provision at Inxuba Yethemba Local Municipality are
explored. They
are detailed as follows:
Company
Service
Contract
value
Commencement
End
date
Hlumisa
Pumps
Term
Tender
2014
2014
The resolution taken by
the CHDM council at the conclusion of this presentation was that the
term contracts from Inxuba Yethemba
“be approved”.
[15]
As I have said, after the meetings referred
to earlier certain payments were forthcoming from CHDM in respect of
outstanding invoices
which has previously been delivered to Inxuba
Yethemba. However, later, disputes arose as to whether work which had
previously
been invoiced had in fact been performed and CHDM
appointed Mr Gibson, the independent engineer referred to earlier, to
verify
that the work had in fact been done by City Square. Mr Jordaan
understood that once it had been verified payment would be
forthcoming.
This, however, did not happen.
[16]
At the conclusion of the plaintiff’s
evidence CHDM applied for absolution from the instance. I dismissed
the application and
provided written reasons for the conclusion to
which I had come. When the trial resumed Mr Dungu was the only
witness to
testify on behalf of CHDM. He was a most evasive witness
and did not make a favourable impression in the witness box. Mr Ford
,
on behalf of City Square, submitted,
with some
justification,
that he had been “prone to rambling and extended responses to
questions which did not address the substance
of the questions
posed.” Mr Beyleveld, for CHDM, acknowledged that he had in
fact made a complete
volte
face
in
cross-examination.
[17]
In his evidence in chief Mr Dungu suggested
that he had at all times told Mr Jordaan expressly, from the start,
that CHDM had no
contract with City Square and no liability to pay
the debts of Inxuba Yethemba. He contended that CHDM had merely
offered to pay
certain debts of Inxuba Yethemba as an advance to
them. Mr Dungu insisted that the reference to the “term
contract”
of Inxuba Yethemba with City Square in the council
meeting on 30 June had related to a different contract which had no
bearing
on the litigation presently before court. When taxed on the
specific wording of his presentation recorded in the minutes he was
constrained to concede that it was an express reference to the
contract in issue in the litigation. The concession is
undeniably
correct
,
but it does give rise to serious concern about the integrity of his
evidence in chief. Mr Ford’s submission that he
had
deliberately attempted to mislead the court has considerable force.
Moreover, it is readily apparent from the minutes of the
meeting of
30 June that CHDM had every intention to take over the rights and
obligations of Inxuba Yethemba in respect of the maintenance
agreement. Mr Dungu was constrained to acknowledge that he had
understood the resolution “to approve” the maintenance
agreement to mean that CHDM would assume all rights and obligations
of Inxuba Yethemba under the agreement. The concession accords
with
and lends credence to Mr Jordaan’s version of what Mr Dungu had
conveyed to him at the meeting in July or August 2014.
Mr
Dungu’s evidence must, I think, be rejected wherever it
conflicts with that of Mr Jordaan.
[18]
As
I have explained, what the plaintiff contended for is a delegation of
the contract which occurs when a debtor under a contract
is replaced
by a third party whilst the creditor remains the same. It is a form
of novation.
[8]
For a
delegation to occur an intention between all the relevant parties to
novate the original obligation must be established
and the onus to do
so rests on the party alleging the delegation.
[9]
In
Securicor
[10]
this court explained the concept thus:
“
The
word 'assignment' in our law is usually used to denote a transfer of
both rights and obligations. Christie
The
Law of Contract in South Africa,
in
my view, aptly describes it as 'a combined cession and delegation':
'Stepping
into another's shoes involves acquiring his rights, which can be done
by cession without the debtor's consent, and undertaking
his
obligations, which can be done by delegation
with
the creditor's consent
.
Since
the lesser is included in the greater it follows that the whole
process of substitution cannot take place without the consent
of the
other party to the contract
.'”
[19]
It
has been held that where the delegation, or novation, does not arise
from an express agreement, proof of novation or delegation
must be
clear and unequivocal.
[11]
In
order to establish a tacit assignment of the contract City Square was
required to prove unequivocal conduct that establishes,
on a balance
of probability, that the parties in fact intended to, and did, agree
on terms contended for. In deciding whether
a tacit contract
was concluded, the law considers the conduct of all parties
objectively and the circumstances of the case generally.
[12]
[20]
The extract
from the minutes of the council meetings of CHDM on 26 March and 30
June 2014 reveal conclusively that the CHDM appreciated
the potential
of the collapse of the water services upon takeover and understood
the need to put in place the necessary service
delivery mechanisms in
order for them to perform the function effectively. The
proposal to adopt the existing contracts and
mechanisms for service
delivery, and in particular the maintenance agreement, was expressly
approved. The resolutions taken at
these meetings give the lie to Mr
Dungu’s version of his discussions with Mr Jordaan at their
meeting in July or August 2014.
Mr Dungu said that regular
monthly meetings were held with Inxuba Yethemba after 26 March 2014
in order to facilitate the hand
back of the water services provider
functions. He acknowledged that the takeover was discussed
extensively and that Inxuba
Yethemba accepted the arrangement, which
included taking over the rights and obligations under the maintenance
agreement.
The presentation to
council by Mr Dungu on 26 March made it plain that the existence of
unknown pre-existing debts arising from
contracts concluded by Inxuba
Yethemba was a risk that CHDM was willing to accept.
Mr
Saleni’s communication to Mr Jordaan and Mr Wardle reinforces
Inxuba Yethemba’s acceptance of the arrangement for
CHDM to
take over the maintenance agreement. The subsequent confirmation
thereof by other officials of Inxuba Yethemba and by Mr
Dungu
confirmed the consensus between the municipalities. Mr Dungu’s
concessions, under cross-examination, lent further
credence to the
version advanced by Mr Jordaan of their discussions and in my view
established, on a balance of probabilities,
that all three parties
intended for CHDM to take over all the rights and obligations of
Inxuba Yethemba under the maintenance agreement,
including the
liability for invoices previously rendered, and that they were in
fact agreed on those terms.
[21]
Mr Dungu
sought repeatedly to suggest that payment of outstanding invoices was
subject to various documents being completed and
verification being
provided that the work had in fact been performed. These formal
requirements relate to the internal regulations
of the CHDM and have
no bearing on the liability of CHDM to meet the obligations assumed
in the maintenance agreement by Inxuba
Yethemba.
[22]
I turn to the
quantum of the outstanding invoices. At the commencement of the
hearing City Square abandoned certain of the
claims set out in its
particulars of claim and the parties agreed that in the event that I
should find that CHDM was liable to
City Square for payment of
outstanding invoices in terms of the maintenance agreement then City
Square is entitled to payment of
a number of agreed invoices.
It is not necessary herein to traverse each invoice but, suffice it
to say that only one invoice
in respect of work to an aerator
remained in dispute. CHDM questioned whether in fact the
services relevant to the aerator
in issue had been rendered at all.
The basis for the challenge appears to have arisen from the fact that
the invoice was
initially not rendered in respect of the services,
but was belatedly rendered on 31 March 2016, some two years after the
event.
Mr Jordaan testified that the work in respect of the
aerator in issue was performed during 2014, but that an invoice was
not generated
at the time. He said that the work had been
signed off and that the independent engineer appointed by the CHDM to
verify
work carried out had subsequently confirmed the performance of
the work. He explained that when difficulties had arisen in
extracting payment from CHDM in 2014, and in the course of
negotiation with the municipal manager at CHDM, they had reached an
agreement in respect of certain payments. The agreement
included an undertaking by City Square not to render an invoice in
respect of this work, as a gesture of goodwill. But, when CHDM later
reneged on the agreement, City Square rendered an invoice
in respect
of the work. No other version was advanced and at the
conclusion of the trial Mr Beyleveld did not advance any
argument in
respect of this invoice.
[23]
Thus,
at the conclusion of the trial the parties were in agreement, subject
to my finding of liability arising from the assignment
of the
maintenance agreement, that the total sum of the invoices due to City
Square
[13]
amounts to R5 434
111,58.
[24]
That left the
plaintiff’s claim for loss of profits, which requires a
consideration of the nature and the interpretation of
the maintenance
agreement. As I have said, the contract was for a period of two
years
,
and
it was the product of a legitimate, transparent tender process. As
adumbrated earlier, City Square was engaged to perform
the operations
and maintenance of major electrical and mechanical pumps under the
control of Inxuba Yethemba as water services
provider. The
scope of the works was described to include:
—
Attendance to all
major breakdowns of pumps as well as maintenance.
—
The service
provider was expected to be available 24 hours 7 days a week.
—
The service
provider was expected to be on site within 6 hours after being
notified.
—
The
installation of new electrical panels and the update of the existing
panels.
—
The
installation and equipping of the pumps.
—
The
supervision and management of the works.
—
The technical
support and training of the internal staff.
—
The routine
maintenance and servicing of the pumps and associated equipment.
—
Proper
monitoring, recordkeeping and analysis is expected to be done all the
time.
—
Submission of
reports on all work done on a monthly basis.
[25]
The contract provided further that the
services required would be determined from time to time by agreement
between the parties,
but subject to the conditions of service which
may be imposed by the council from time to time. Mr Jordaan
accepted, accordingly,
that City Square would only be entitled to
perform work, and render invoices for work, that they were instructed
to perform from
time to time by Inxuba Yethemba.
[26]
In its tender City Square submitted a Bill
of Quantities setting out the rates at which it would be prepared to
perform various
functions which were anticipated to be necessary
during the contract period, in accordance with the tender. The
Bill of Quantities
included an amount of R3 100 000,00 in respect of
general and preliminary items made up as follows:
1
Time
related obligations
month
24
R30
000
R720
000
2
Value
related obligations
lump
sum
1
R650
000
R650
000
3
Fixed
related obligations
lump
sum
1
R650
000
R650
000
4
Establishment
of office
sum
R1
080 000
R1
080 000
[27]
The contract permitted City Square to raise
a 20% profit and the estimated work set out in the Bill of Quantities
amounted to R12
797 888,20. Hence, City Square initially
claimed that they would have been entitled to perform work to this
value and to
calculate its loss of profits flowing from the
repudiation of the contract on this sum. However, recognizing
that they were
only entitled to work allocated by the municipality
from time to time, within their financial means and discretion, they
did not
pursue this method of calculation. Thus, during the course of
the litigation City Square delivered a further notice in terms of
Rule 35(3) of the rules of court demanding further discovery in
respect of documentation relating to services in fact rendered
at
Inxuba Yethemba by other contractors during the contract period.
City Square contended that it had been entitled to be
engaged for all
work required by the water services provider of the kind set out in
the scope of works adumbrated earlier, and
thus calculated their loss
of profit as 20% of the value of work in fact awarded to and
performed in breach of the agreement by
other contractors.
[28]
CHDM disputed their entitlement to any loss
of profits because it contended that, on a proper interpretation of
the maintenance
contract, City Square was not entitled to any work,
nor were they exclusively entitled to all maintenance work
commissioned by
Inxuba Yethemba. Their entitlement, so CHDM argued,
was always subject to Inxuba Yethemba requesting work to be done, in
which
event the rates set out in the Bill of Quantities would apply
to such work.
[29]
This
brings me to the proper construction of the maintenance agreement.
Generally, when a tender is in the form of a standing
offer to supply
services of a specified type, as and when required, at a price agreed
upon, the acceptance of the offer results
in a
pactum
de contrahendo
.
Corbett JA said in
Hirschowitz
[14]
that a
pactum
de contrahendo
is
‘simply
an agreement to make a contract in the future …. It was
a class of contract “very well-known in
Civil Law” (see
McIlrath’s
v Pretoria Municipality
2012 TPD 1027
at 1037 where Wessels J, Bristowe J concurring)’.
[15]
[30]
Provided
that the agreement results from a firm offer and it is not too vague
such an agreement will be enforceable.
[16]
The resulting obligation may oblige the tenderer to supply the
specified services whenever ordered, with or without the reciprocal
obligation to order exclusively from the tenderer.
[17]
This is such a case.
[31]
Notwithstanding
the constitutional and legislative provisions which now bind organs
of state in procurement of goods and services
it is not impermissible
for a successful tenderer to commit itself to supply goods as and
when required and for an organ of state
to, in turn, commit itself to
order all the goods exclusively from the contractor as and when
needed.
[18]
[32]
Whether
or not the contract contains an exclusive supply provision depends on
the interpretation of the contract but, generally,
in the absence of
sufficient indications to the contrary it will not be implied that
any work will be given to a contractor or
that none will be given to
anyone else.
[19]
The
contract in this instance has no express exclusivity clause.
However, it was held in
Soeker
[20]
that:
“
Where
the act to be done by the party binding himself can only be done upon
something of a corresponding character being done by
the opposite
party, you would there imply a corresponding obligation to do the
things necessary for the completion of the contract.
So if a man
engages to work and render services which necessitate great outlay of
money, time, and trouble, and he is only to be
paid by the measure of
the work he has performed, the contract necessarily pre-supposes and
implies on the part of the person who
engages him an obligation to
supply the work.”
[33]
The
facts of this matter reveal that City Square, a company based in East
London, contracted with Inxuba Yethemba on the basis that
it was
required to establish a base in Inxuba Yethemba, at considerable
expense, in order to maintain a staff presence at all times
during
the contract period. City Square honoured this obligation and,
as set out earlier, the expense incurred in respect
thereof appears
from the preliminary and general expenses set out in the Bill of
Quantities. It required a substantial outlay
in order to meet
the demands of the contract and I consider that it constitutes a
strong indication that Inxuba Yethemba intended
to commit itself to
award all the work covered by the scope of works exclusively to City
Square during the contract period.
To hold otherwise would lead
to an insensible and unbusinesslike result.
[21]
That was the obligation that CHDM assumed under the assignment of the
contract. Accordingly, I consider that the work falling
within
the scope of work adumbrated earlier and performed by other
contractors within the municipal area of Inxuba Yethemba, at
the
instance of CHDM, during the contract period constitutes a reliable
measure for the calculation of the loss of profit suffered
by City
Square. The parties have prepared a schedule of contracts
awarded by CHDM to other contractors during the period
and agreed on
the quantum of payments made to such contractors during the period.
By calculating the profit at 20% thereof
City Square’s loss
amounts to R828 241,20. City Square is entitled to payment
thereof as damages.
[34]
I accordingly make the following order:
The second defendant, the
Chris Hani District Municipality
, is
ordered to pay to the plaintiff:
1.
The amount of R5 434 111,58 in respect of
work done and services rendered, together with interest on the
aforesaid sum calculated
at the prevailing prescribed legal rate of
interest
a tempore morae
to the date of payment.
2.
The amount of R828 241,20 as and for
damages, together with interest on the aforesaid sum calculated at
the prevailing prescribed
legal rate of interest from the date of
summons to the date of payment.
3.
The plaintiff’s costs of suit, such
costs to include:
3.1
The costs of two counsel where so employed;
and
3.2
The qualifying expenses, if any, of Mr Ian
Wardle.
J
W EKSTEEN
JUDGE
OF THE HIGH COURT
Appearances:
For
Plaintiff:
Adv
EAS Ford SC and Adv K Watt instructed by Bax Kaplin Russell Inc
c/o Owen Huxtable Attorneys, Makhanda
For
2
nd
Defendant:
Adv A
Beyleveld SC instructed by McWilliams & Elliot c/o Whitesides
Attorneys, Makhanda
[1]
Previously
known as Cradock
[2]
The
Water Services Act 108 of 1997
[3]
Section
11
of the Act
[4]
Section
11
of the Act
[5]
Section
19
and
22
of the Act
[6]
As
circumscribed in
s 4
of the Act
[7]
Local
Municipalities
[8]
AJ
Kerr: The Principles of Contract
(6
th
ed) p. 544;
Christie:
The Law of Contract in South Africa
(8
th
ed) p. 559;
Wille’s
Principles of South African Law
(9
th
ed)(General Editor Francois de Bois) p. 837.
[9]
Christie
at
p. 560 and
Amler’s
Precedent of Pleadings
(9
th
ed) p. 277.
[10]
Securicor
(SA)(Pty) Ltd and Others v Lotter and Others
2005
(5) SA 540
(E) at 547D
[11]
Dowling
v Registrar of Deeds
2012 AD 28
at 35;
Electric
Process Engraving and Stereo Co. v Irwin
1940 AD 220
at 226;
French v Sterling Finance Corporation (Pty) Ltd
1961
(4) SA 732
(A) at 736E-H;
Barclays
National Bank Ltd v Smith
1975 (4) SA 675
(D) at 683D.
[12]
Roberts
Construction Co. Ltd v Dominion Earthworks (Pty) Ltd and Another
1968
(3) SA 255
(A);
Standard
Bank of South Africa Ltd v Oceans Commodity Inc
[1983]
1 All SA 145
(A);
1983 (1) SA 276
(A) at 292;
NBS
Bank Ltd v Cape Produce Co. (Pty) Ltd
[2002]
2 All SA 262 (A); 2002 (1) SA 396 (SCA).
[13]
As
a result of the finding earlier.
[14]
Hirschowitz
v Moolman and Others
1985 (3) SA 739
(A)
[15]
See
also
Wessel’s
Law of Contract in South Africa (
2nd
ed) volume 2, para 4436
[16]
Christie
p. 51
[17]
C
hristie
p. 60
;
Beka (Pty) Ltd v Nelson Mandela Bay Metropolitan Municipality and
Another
,
an unreported judgment of the High Court, Port Elizabeth, delivered
on 30 August 2011 (case number 768/2011); and
Amathole
District Municipality and Others v Wesley Pretorius and Associates
Incorporated and Others
,
an unreported judgment of the Full Court, Makhanda delivered on 13
September 2022 (case number CA75/2021).
[18]
The
Law of Government Procurement in South Africa
(2007) LexisNexis p. 26 at para 3.2.2.2;
Premier,
Free State and Others v Firechem Free State (Pty) Ltd
2000 (4) SA 413 (SCA)
[19]
Christie
p.
51
[20]
Soeker
v Colonial Government
(1906-1909)
3 Buch AC 207
p. 220
[21]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at para [18]