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2022
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[2022] ZAFSHC 238
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Afri Blaze Projects (Pty) Ltd vs The Premier of Free State Provincial Government and Others (855/2021) [2022] ZAFSHC 238 (19 September 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
CASE
NO: 855/2021
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
In
the matter between:
AFRI
BLAZE PROJECTS (PTY) LTD
Plaintiff
and
THE
PREMIER: FREE STATE PROVINCIAL
GOVERNMENT
1
st
Defendant
THE
MEC: FREE STATE PROVINCIAL GOVERNMENT:
DEPARTMENT
OF PUBLIC WORKS AND INFRASTRUCTURE
2
nd
Defendant
THE
HOD: FREE STATE PROVINCIAL GOVERNMENT:
DEPARTMENT
OF PUBLIC WORKS AND INFRASTRUCTURE
3
rd
Defendant
THE
MEC: FREE STATE PROVINCIAL GOVERNMENT:
DEPARTMENT
OF
EDUCATION
4
th
Defendant
THE
HOD: FREE STATE PROVINCIAL GOVERNMENT:
DEPARTMENT
OF
EDUCATION
5
th
Defendant
HEARD
ON:
18
AUGUST 2022
JUDGMENT
BY:
MHLAMBI,
J
DELIVERED
ON:
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email and released to
SAFLI.
The date and time for the hand-down are deemed to be at 16h30 on 19
September 2022.
Introduction
[1]
The plaintiff instituted an action based on a contract against the
defendants for
the rectification of a written lease agreement
concluded between the parties on 27 November 2019 together with
interest and costs.
[2]
The defendants defended the action, filed a special plea and a plea
to the merits.
The special plea was set down for hearing and it is
couched as follows:
“
Special
Plea
1.
The
plaintiff relies on the lease agreement, annexure “B” to
its particulars of claim.
2.
In
terms of clause 32.1 thereof the parties shall try to amicably
resolve any dispute.
3.
Moreover,
on
11
th
January 2020
contrary to what the plaintiff pleaded in paragraph 9 of its
particulars of claim, public works invited tenders under
DPWFS
RFP 014/2018
for the provision of office accommodation for approximately 12 500
square meters to 16 500 square metres together with
minimum of
300 onsite parking bays.
3.1
The
defendants attached the aforesaid bid document as annexure “P1”
between the parties as being one of a series of
documents, expressly,
alternatively tacit, alternatively implied terms of the agreement
comprising the written agreement between
the parties. The bid
document inter alia contains the following relevant provisions:
‘
Government
procurement general conditions of contract
3.1.1
Under
the heading ‘Government Procurement General Condition of
Contract July 2010’ it is expressly stated that these
conditions will form part of all bid documents and may not be
amended;
3.1.2
In
terms of Clause 27 of the General Conditions of Contract, settlement
of disputes between the parties is provided for as follows:
3.1.2.1
If any
dispute or difference of any kind whatsoever arises between the
purchaser and the supplier in connection with or arising
out of the
contract, the parties shall make every effort to resolve amicably
such dispute or difference by mutual consultation
(Clause 27.1);
3.1.2.2
I,
after thirty (30) days, the parties have failed to resolve their
dispute or differences by such mutual consultation, then either
the
purchaser or supplier may give notice to the other party of his
intention to commence with mediation. No mediation in respect
of this
matter may be commenced unless such notice is given to the other
party (Clause 27.2);
3.1.2.3
Mediation
proceedings shall be conducted in accordance with rules of procedure
specified in a South African court of law (SCC) (Clause
27.4);
3.1.2.4
Should
it not be possible to settle a dispute by means of mediation, it may
be settled in a South African court of law (Clause 27.3).
4.
The
plaintiff did not instigate the extra-curial dispute resolution
method advised by the aforesaid clauses.
5.
The
defendants accordingly plead that the action be dismissed to enable
the parties to resolve their disputes;
alternatively,
for the matter to be removed from the roll, for the parties to avail
themselves of this procedure and that the plaintiff be ordered
to pay
any costs wasted thereby.
[3]
The plaintiff’s response to the special plea was as follows:
“
Ad
Special plea:
3.
3.1
It is denied that the plaintiff had failed to comply with any
contractual provision obligating it to try and
settle the dispute
between the parties in an extra-curial way
3.2
the plaintiff moreover denies that there was any contractual
provision obligating it to so and settle the
dispute between the
parties.
3.3
in any event, the plaintiff pleads that notwithstanding the present
dispute ad of which the Defendants were
no doubt aware, they took no
steps to comply with any contractual provision governing the
relationship between the parties as to
alternative dispute
resolution. Thus the Defendants are in breach of the agreements and
are in law not entitled to rely upon such
a provision for purposes of
further stymieing the Plaintiff’s case.
3.4
In any event further:
3.4.1
The Plaintiff records its amenability to try and settle the dispute
between the parties and will, without admission of any liability and
without detracting from the general of the aforesaid denial,
submit
to mediation.
3.4.2
The willingness and intra curiae undertaking should however be
understood as meaning that the Plaintiff would submit to mediation
that to run between the parties concomitantly with the proceeding
in
this court. The Defendants are invited to inform the Plaintiff of the
steps they intend to take as for as such a mediation proceeding
is
concerned within 5 days.
…
3.6
Thus, the Plaintiff prays for the dismissal of the Defendants’
Special Plea with costs (in the event
the Defendants not taking up
the invitation for concomitant mediation extended hereinabove).”
[4]
Both in the written heads and oral argument, Mr Du Toit, acting for
the defendants,
argued that the plaintiff could not have its cake and
eat it by engaging in mediation concomitantly with the litigation in
this
court. He emphasised that the parties are
ad idem
about
the particular mediation clause incorporated into the agreement
between the parties by virtue of the tender conditions. It
was not
included as a mere whim but it was an important mechanism expressly
chosen to keep matters out of court.
[5]
He submitted that the jurisdictional fact triggering the institution
of an action
in court was the factual impossibility of settling a
dispute by means of mediation. The only route to litigation was to
establish
that:
(a)
a mediation was called for by the aggrieved party;
(b)
that there indeed was a mediation conducted; and
(c)
that the mediation was unsuccessful in the sense that the parties
were unable to settle the matter with
the aid of a mediator.
The
plaintiff’s claim was therefore brought prematurely as there
was neither a mediation that took place nor a failed mediation
entitling the plaintiff to have instituted an action at the time it
did. The principle of
pacta sunt servanda
applied in full
force, and the mediation clause must be adhered to.
[6]
Mr Grobler, acting for the plaintiff, stated in oral address that the
principle of
pacta
sunt servanda
was
not in dispute. The only issue in dispute, he submitted, was the
existence of the contractual obligation to mediate as set out
in
paragraph 3.2
[1]
of the
plaintiff’s replication which served as the answer to the
defendant’s special plea. As such, the answer disposed
of the
question of the settlement of the dispute by way of mediation.
[7]
He confirmed that the parties were
ad
idem
on the lease agreement
[2]
, that
the parties shall try to resolve any dispute amicably
[3]
and that the General Conditions of Contract July 2020
[4]
( the GCC), which may not be amended, formed part of all the bid
documents. However, he submitted that clause 2.1 of the GCC precluded
the defendant from insisting on mediation as the general conditions
were not applicable as the clause excluded immovable property.
[8]
It is clear from Mr Grobler’s submissions that the plaintiff
does not dispute
the GCC and its contents. The purpose of the GCC was
to draw special attention to certain general conditions applicable to
governing
bids, contracts, and orders and formed part of all bid
documents and may not be amended. Consequently, clause 27 of the GCC
provides
for the settlement of disputes as more fully set out in the
defendants’ special plea. The lease agreement behoves the
parties
to resolve any dispute amicably
[5]
and only if the matter were unresolved for a period of 14 days, was a
party entitled to refer the matter to the High Court of the
Free
State.
[6]
Inasmuch as the lease
agreement contained a dispute resolution clause that facilitated and
made obligatory the holding of a mediation,
the provisions of the GCC
set out the procedure to be followed. This the plaintiff failed to
do.
[9]
The only contestation remaining is the interpretation of clause 2.1
of the General
Conditions of the Contract. Mr Grobler argued that the
expression “
excluding immovable property”
excluded
the plaintiff from following the mediation route. I taxed both
parties with the meaning, status, and effect of that expression
on
the clause and whether it had the effect of excluding the lease
agreement from the ambit of the GCC. Mr Grobler was of the view
that
it did whereas Mr Merabe, the defendants’ second counsel, said
that it did not.
[10]
Clause 2.1 of the GCC reads as follows:
“
2.1
These general conditions are to all bids, contracts, and orders
including bids for functional and professional services,
sales,
hiring, letting and the granting or acquiring of rights, but
excluding immovable property, unless otherwise indicated in
the
bidding documents.
[11]
Mr Merabe stated in replication that the tender processes were
already in place before the lease
agreement was entered into. The
letting, hiring, and acquiring of rights contained in the clause,
included the acquisition of such
rights in immovable property.
[12]
The correct course that the plaintiff should have followed was, in my
view, to have attempted
or endeavoured to settle the matter, failing
which, to refer the matter for mediation before resorting to
litigation. There was
a contractual obligation to mediate and settle
the dispute between the parties. The plaintiff’s reliance on
clause 2.1 of
the GCC does not come to its rescue. In my view, such
an exclusion does not, within the context of the clause, refer to a
bid for
the provision of office accommodation or a departmental lease
contract as envisaged in contract DPWFS RFB 014/2018.
[7]
In the premises, I find that the provisions of the GCC are applicable
to the lease agreement entered into between the parties.
[13]
The special plea should succeed. It is evident that the action was
premature and the plaintiff’s
opposition to the special plea
was without substance. In the circumstances, it would serve no
purpose to strike the matter from
the roll and the appropriate order
should be the dismissal of the action.
[14]
It is trite that the successful party is entitled to the costs.
[15]
I, therefore, make the following order:
Order:
The
action is dismissed with costs which shall include the costs of two
counsel.
MHLAMBI,
J
On
behalf of Plaintiff:
Adv.
S Grlobler SC
Instructed
by: Peyper
Attorneys
101
Olympus Drive
Helicon
Heights
Bloemfontein
On
behalf of Defendant: Adv.
J Du Toit SC
Adv.
MJ Merabe
Instructed
by:
State
Attorney
49
Charlotte Maxeke Street
10
th
Floor Fedsure Building
Bloemfontein
[1]
Stated
above.
[2]
Annexure “B” to the summons.
[3]
Paragraph 32.1 of the lease agreement.
[4]
Page 192 of the Index: Pleadings
[5]
Para 32.
1
supra
.
[6]
Para 32.2 of the lease agreement.
[7]
See Buglers Post (Pty) Ltd v Secretary for Inland Revenue
1974 (3)
SA 28
(AD)