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[2021] ZAGPJHC 80
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Maphephethe Electrical CC v Thusanang Gast (Pty) Ltd and Others (3788/2020) [2021] ZAGPJHC 80 (6 July 2021)
HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
(1)
REPORTABLE: Electronic
reporting only.
(2)
OF INTEREST TO OTHER
JUDGES: No.
(3)
REVISED: Yes
Case
No: 3788/2020
In
the matter between:
MAPHEPHETHE
ELECTRICAL CC
Applicant
and
THUSANANG
GAST (PTY) LTD
First
Respondent
EKURHULENI
METROPOLITAN MUNICIPALITY
Second
Respondent
In
Re
:
THUSANANG
GAST (PTY) LTD
Plaintiff
and
THUSANANG
GAST (PTY) LTD
Defendant
Case
Summary
:
Practice – Parties - Joinder – Application to be joined
as second plaintiff – Requirements for intervention
as an
applicant in terms of r 12 read with r 10(1) of the Uniform Rules of
Court restated.
JUDGMENT
MEYER J
[1]
The applicant, Maphephethe Electrical CC (the sub-contractor), seeks
leave to be joined
as the second plaintiff in pending action
proceedings instituted in this division (case no. 3788/2020) on 6
February 2020, by the
first respondent, Thusanang Gast (Pty) Ltd (the
contractor), against the second respondent, Ekurhuleni Metropolitan
Council (the
employer), relating to a building contract dispute (the
action). The employer opposes the application.
[2]
It is common cause that following a procurement process, the
contractor was the successful
bidder to construct an ‘Early
Childhood Development Centre’ for the defendant in Eden Park
(the centre) at a total
project cost of R21 620 470.83 (the
project). Once the contractor’s tender had been accepted,
the employer and the
contractor concluded a written JBCC (Joint
Building Contracts Committee) series 2000 5
th
Ed standard
principal agreement on 8 December 2016, as amended by the
conditions provided for in the contract data (the principal
contract). The employer is entitled to withhold a maximum of 5%
of all payments made to the contractor (the retention amount).
Repayment of the full retention amount is dependent on achieving
practical completion and taking the steps prescribed in the principal
contract for the ultimate issuing of a final completion certificate
or for a final completion certificate to be deemed to have
been
issued. However, should the principal contract be breached by
the employer, and in that event be validly terminated
by the
contractor, the security ‘shall be returned by the employer to
the contractor’.
[3]
The contractor and the sub-contractor, in turn, concluded a written
sub-contract agreement
in terms of which they agreed that the
sub-contractor would execute certain works on behalf of the
contractor in connection with
the project at the tendered amount (the
sub-contract). It was agreed that payments to the
sub-contractor will be made by
the contractor ‘within 7 days
from the date of the Contractor receiving payment from the Client for
work done less retention’.
The contractor and the
sub-contractor agreed that:
‘
Retention
in the amount of 10% of each claim submitted to the Contractor will
be retained by the Contractor as security for the
due performance of
the Subcontractor to complete the works. No interest will
accrue on the retained money and the Contractor
will only release the
retention money to the Subcontractor within 60 days after the
Employer has released the Contractor’s
relevant retention.’
[4]
It must be accepted on the affidavit evidence presented in this
application that the
sub-contractor performed the work required of it
in terms of the sub-contract. During December 2018 it submitted
its final
invoice for payment in the sum of R311 144.89 to the
contractor. The outstanding amount owing to the sub-contractor
is for
the release by the contractor of the retention money. The
contractor did not pay the sub-contractor’s final
invoice.
It is common
cause that the contractor achieved practical completion of the
project on 29 June 2018. The employer, however,
avers that the
contractor has not completed all the works; it provided the
contractor with snag lists on 9 November 2018, which
the contractor
has not fully executed. Only repayment of 50% of the retention
money in the amount of R545 253.10 has not
been made to the
contractor by the employer. The contractor’s attorneys
advised the sub-contractor’s attorneys
that the contractor had
not been paid by the employer and will release the retention money
owing to the sub-contractor in terms
of the sub-contract upon receipt
by the contractor of the retention money owed to it by the employer.
[5]
By letter dated 6 August 2019, the contractor notified the employer
that its failure
to issue instructions to the contractor was
preventing it from achieving finalisation of the project, that the
employer flouted
its obligations in terms of the principal contract
and that its failure to comply with its obligations constituted a
repudiation
of the principal contract, which repudiation the
contractor had accepted. The contractor nevertheless afforded
the employer
ten days to remedy its breach, failing which it would
terminate the principal contract. On 22 August 2019, the
contractor
notified the employer,
inter alia
that despite the
demand dated 6 August 2019, it had failed to remedy its breach and
that the principal contract is terminated.
The employer was
further advised that, in terms of the principal contract, the
retention amount is repayable due to the termination
of the principal
contract by the contractor as a result of the employer’s
breach. The employer disputes the validity
of the contractor’s
termination of the principal contract and maintains that repayment of
the full retention money to the
contractor will only be due once
final completion is achieved or deemed to have been achieved in terms
of the provisions of the
principal contract. Hence, the pending
action between the contractor and the employer. On 29 June
2020, this court
(Moorcroft AJ) dismissed the contractor’s
application for summary judgment against the employer and ordered
costs to be in
the cause.
[6]
The sub-contractor’s grounds for applying to be joined as
second plaintiff in
the action are that without payment by the
employer to the contractor, it cannot in terms of the sub-contract be
paid. It
avers that it ‘finds itself in a position of not
knowing whether all its rights are being protected’ and submits
that
its joinder as plaintiff would place it ‘in a position
where all the rights accruing to it will be protected and eliminate
any prejudice it may suffer’. It submitted ‘that
there is a possibility that [it] may well find itself prejudiced
by
any potential agreement or settlement that may be offered by the
[employer]’, and ‘[s]imilary, [the contractor]
could
decide to abandon its claim, thus leaving [it] prejudiced’.
It should, so it submitted, be joined to the ‘action
for
reasons of convenience and to avoid a multiplicity of actions against
the [municipality]’.
[7]
Rule 12 governs the procedure for the intervention of persons as
plaintiffs and defendants.
It provides that ‘[a]ny person
entitled to join as a plaintiff or liable to be joined as a defendant
in any action may, on
notice to all parties, at any stage of the
proceedings, apply for leave to intervene as a plaintiff or a
defendant. The court
may upon such application make such order,
including any order as to costs, and give such directions as to
further procedure in
the action as to it may seem meet’.
To be able to intervene in proceedings a party must have
a direct and
substantial interest in the outcome of the litigation:
per
Harms DP in
National Director of Public Prosecutions v
Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) para 85.
[8]
In
Marais & others v Pongola Sugar Milling Co. Ltd. &
others
1961 (2) SA 698
(NPD) at 702A-B, Wessels J said that-
‘
.
. . certain principles seem to have become established which govern
the matter of joinder, and different principles would seem
to apply
to different circumstances, depending on whether the Court is
concerned with a plaintiff’s right to join parties
as
defendants, a defendant’s right to demand that parties be
joined as co-defendants, the rights of third parties to join
either
as plaintiffs or defendants, or the Court’s duty to order the
joinder of some or other party (as was done in the case
of
Home
Sites (Pty.) Ltd. v. Senekal,
1948 (3)
S.A. 514
(A.D.)) or to stay the action until proof is forthcoming
that such party has waived his right to be joined as a party, e.g. by
filing a consent to be bound by the judgment of the Court (as was
done in the case of
Amalgamated
Engineering Union v. Minister of Labour,
1949
(3) S.A. 637
(A.D.)).
[9]
In
Vitokaris v Wolf
1973 (3) SA 928
(W), the entitlement to
join as a plaintiff was sought and granted, not on the basis of the
criterion of a direct and substantial
interest in the action, but on
the basis of the criterion set out in r 10(1) in terms of which any
number of plaintiffs may join
as plaintiffs against the same
defendant or defendants, provided that their right to relief is
dependent upon determination of
substantially the same question of
law or of fact. At 931D-E, Coetzee J said the following:
‘
In
my view, the mere fact that the applicant has not a common cause of
action or common ground with the plaintiff is irrelevant.
Plaintiffs may join if they have separate claims and may indeed now
even claim alternatively. The only pre-requisite to the
exercise of this right is that their right to relief is dependent
upon the determination of substantially the same question of
law or
fact. This is undoubtedly so
in
casu
.’
[10]
In
Shapiro v South African Recordings Rights Association Ltd
(Galeta Intervening
2008 (4) SA 145
(W) para 13, it was held that
r 12 covers both criteria and that generally the criterion followed
in
Vitokaris
applies to plaintiffs/applicants who wish to
intervene whereas the ‘direct and substantial interest’
criterion applies
to the joinder of defendants/respondents. In
this regard A Gautschi AJ said the following:
‘
I
am of the view that rule 12 covers both these situations.
Generally the first would apply to applicants and the second to
respondents. In regard to the first, it is easy to imagine a
situation, such as a winding-up or an interdict to stop pollution,
where the original applicant’s
locus
standi
to sue is in issue, and another
person who also has
locus standi
seeks leave to intervene as a second applicant in order to ensure
that the litigation against the respondent is successful.
The
present application is such a situation. The original applicant
and the intervening applicant were entitled but not obliged
to join
as applicants under rule 10(1) (read with rule 6(14)) at the outset
of the litigation. I agree with Coetzee J that
such a situation
would fall under rule 12. It has nothing to do with a legal
interest which may be prejudicially affected
by the judgment of the
court. It is an intervention of desire and not of necessity.
In the example given, and in the
present case, the intervening
applicant’s rights will not be prejudicially affected by an
order granted against the original
applicant, since the order is not
binding on him and he may sue separately for the same relief.
Also an order granted in
favour of the original applicant would suit,
and not prejudicially affect, the intervening applicant, who may,
depending on the
type of relief sought, sue for the same relief.
Other cases which in my view fall into this category include
Jhatam
and Others v Jhatam
[1958 (4) SA 36
(N)],
Flax v Berliner: Houndsditch
Warehouse (Pty) Ltd, Intervening
[1950
(2) SA 259
(W)] and
Nelson Mandela
Metropolitan Municipality and Others v Greyvenouw CC and Others
[2004
(2) SA 81
(SE)]. The latter case, incorrectly in my respectful
view, considered the intervening applicants to have “a direct
and substantial interest in the subject-matter of the dispute”
and therefore entitled to intervene as of right [at 89B-C].
Their position was no different from that described above.’
[11]
The basic problem with the application is that the sub-contractor has
no claim against the employer,
which is the only defendant in the
action against which relief is claimed, nor for that matter - and I
do not suggest that that
principle finds application
in casu
because the sub-contractor does not apply to intervene as a defendant
in the action - does it have a direct and substantial
interest
in the subject-matter of the dispute between the employer and the
contractor. There is no privity of contract between
the
sub-contractor and the employer. The sub-contractor has no
contractual claim against the employer nor does it place reliance
on
any other potential claim which it has or may have against the
employer, such as a delictual or enrichment claim. The
sub-contractor merely has a financial interest which is an undirect
interest in the litigation and not a ‘direct and substantial
interest in the subject matter of the action’. It is
trite that a mere financial interest in the outcome of litigation
does not give a party the right to be joined in legal proceedings:
per
Lewis JA in
Standard Bank of SA Ltd v Swartland
Municipality and others
2011 (5) SA 257
(SCA) para 9.
[12]
In the result the following order is made:
The
application is dismissed with costs.
P.A. MEYER
JUDGE
OF THE HIGH COURT
Judgment:
06 July 2021
Heard:
28 April 2021
Applicant’s
Counsel:
Adv S Kelly
Instructed
by:
Bernard L du Plessis Inc., Alberton
2
nd
Respondent’s
Counsel:
Adv
G Badela
Instructed
by:
Sibanda Bukhosi Attorneys Inc., Johannesburg