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[2021] ZAGPJHC 728
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Maphephethe Electrical CC v Thusanang Gast (Pty) Ltd and Another; In re: Thusanang Gast (Pty) Ltd v Thusanang Gast (Pty) Ltd (3788/2020) [2021] ZAGPJHC 728 (6 July 2021)
HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case
No: 3788/2020
REPORTABLE
(electronic reporting only)
NOT
OF INTEREST TO OTHER JUDGES
REVISED
28
APRIL 2021
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