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[2021] ZAGPPHC 200
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Dipalopalo Concession (Pty) Ltd v Department of Statistics South Africa (35920/2019) [2021] ZAGPPHC 200 (25 March 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
REPUBLIC
OF SOUTH AFRICA
Case
Number: 35920/2019
REPORTABLE:NO
OF
INTEREST TO OTHER JUDGES:NO
REVISED
DATE:25
MARCH 2021
DIPALOPALO
CONCESSION (PTY) LTD
Plaintiff
And
THE
DEPARTMENT OF STATISTICS SOUTH AFRICA
Defendant
JU
JUDGMENT
JANSE VAN
NIEUWENHUIZEN
[1]
The
plaintiff instituted action against the defendant based on a written
Public Private Partnership Agreement (the “PPP agreement”)
in respect of certain building work that had to be executed by the
plaintiff at the offices of the defendant.
[2]
The
defendant has filed an exception to the plaintiff’s particulars
of claim on the grounds that the particulars are vague
and
embarrassing
alternatively
that
it lacks averments necessary to sustain a cause of action.
[3]
In
order to properly adjudicate the exception it is apposite to have
regard to the structure of allegations in the particulars of
claim.
Particulars of
claim
[4]
The
main body of the particulars of claim is divided into six sections,
to wit:
[4.1] The
PPP
agreement
, which set out the relevant terms of the agreement
[paragraphs 4 to 8];
[4.2]
Implementation of the agreement
, in which allegations in
respect of the fulfilment of the agreement is set out [paragraph 9];
[4.3]
Variation
, which contains factual allegations in respect of a
variation of the deliverables in terms of the agreement [paragraphs
10 to 24];
[4.4]
Amendment to the PPP Agreement
alternatively
agreement of waiver
, which embodies the plaintiff’s
first cause of action and contains allegations in support of the
amendment of the PPA agreement
alternatively
a waiver of the
agreement [paragraphs 25 to 29];
[4.5]
Alternative claim: Breach of the PPP Agreement
, which contains
factual allegations in support of the claim for breach of contract
[paragraphs 30 to 37];
[4.6]
Further
alternative claim: Good faith and public policy,
which
will be dealt with
infra
[paragraphs
38 to 46].
[5]
The
allegations, in a nutshell, refer to the relevant clauses in the PPP
agreement governing variations to the project deliverables
and refer
to the non-variation clause in the agreement.
[6]
The
plaintiff then avers that there were several variations to the
project deliverables requested by the defendant, which variations
were executed by the plaintiff. The allegations in this regard are
detailed and refer to correspondence between the parties, which
correspondence is attached to the particulars of claim.
[7]
The
plaintiff avers that the variations of the project deliverables were
orally requested and was accompanied by written sketches
and
organograms detailing the variations. The sketches and organograms
are also attached to the particulars of claim.
[8]
It is
common cause between the parties that the plaintiff, at the end of
the contract period, had to do further work. This appears
from the
correspondence between the parties and was conceded, to his credit,
by Mr Shozi SC, counsel for the defendant. The plaintiff
claims
payment for the further work and sets out a basis in its particulars
for the claim.
Exception
[9]
The
defendant relies on ten grounds in its notice of exception. I propose
to first deal with the grounds in respect of the allegation
that the
particulars of claim are vague and embarrassing.
Vague and embarrassing
Legal principles
[10]
In
order for the defendant to succeed with the allegation that the
particulars of claim are vague and embarrassing, it must establish
that:
10.1
the
particulars lacks particularity to the extent that it is vague; and
10.2
that
the vagueness causes embarrassment of such a nature that the
defendant is prejudiced.
[See:
Trope v South
African Reserve Bank
1992 (3) SA 208
T]
[11]
In
Jowell
v Bramwell-Jones
1998
(1) SA 836
W at 989, the test in respect of an allegation that
particulars are vague and embarrassing was set out as follows:
“
(a)
Minor blemishes are irrelevant;
(b)
Pleadings must be read as a whole; no paragraph can be read in
isolation;
(c)
A distinction must be drawn between the facta probanda or primary
factual obligations which every
plaintiff must make, and the facta
probantia which are the secondary allegations upon which the
plaintiff will rely in support
of his primary factual allegations.
Generally speaking, the latter are matters for particulars for trial
and even then limited.
For the rest they are matters of evidence;
(d)
Only facts need be pleaded; conclusions of law need not be pleaded;
(e)
Bound up with the last mentioned consideration is that certain
allegations expressly made may
carry with them implied allegations
and the pleadings must be so read;”
[12]
Furthermore,
and in
Absa
Bank v Boksburg Transitional Local Council (Government of the
Republic of South Africa, third party
1997
(2) SA 415
W at 418, it was stated that:
“
A
pleading will not be excipiable on the grounds of being vague and
embarrassing if a party adequately knows what the plaintiff’s
case is and its attorneys are able to take instructions and record a
meaningful response to such pleadings.”
First to fifth grounds
of exception
[13]
The
first to fifth grounds of the exception is directed at paragraphs 10
to 22, which, as set out aforesaid contains factual averments
in
support of the different causes of action.
First ground
[14]
The
first exception pertains to paragraph 10 of the particulars which
reads as follows:
“
VARIATION
During
the subsistence of the PPP agreement and during the course of
carrying out the Works in terms thereof, during or about February
2016
alternatively
14
February 2016, at Salvokop, the Defendant, represented by Akthary
Henning (“
Henning”),
advised
the Plaintiff’s representatives, Thabatha Qaba (“
Qaba”
)
alternatively
Derek
Wallace (“
Wallace”
),
that it was necessary for the Project Deliverables under the PPP
agreement to be varied in the following respects:”
[15]
A list
of the proposed amendments is set out in subparagraphs 10.1 to
10.2.15 and the paragraph concludes with the following:
“
(“
the
Proposed Variation”
)
(not to be confused with a Department Variation Proposal as defined
in the PPP agreement).”
[16]
The
defendant’s exception to paragraph 10 is firstly that the title
“
Variation”
is
at odds with the definition of variation in the PPP agreement. The
title in the particulars of claim does not change the
facta
probanda
that
has been alleged. A defendant pleads to the allegations in the
particulars and not to the title. The exception to the title
is
ill-conceived and dismissed.
[17]
The
next objection is against the term “
proposed
variation”
and
the allegation that the term is “
not
to be confused with a Department Variation Proposal as defined in the
PPP agreement”.
The
objection is based on the fact that the PPP agreement provides in
clause 44 for a certain procedure to be followed should the
defendant
wish to vary the project deliverables. According to the defendant, it
is not in a position to determine the clause the
plaintiff is relying
on as the allegations pertained to a proposed variation and can, as a
result not plead to the paragraph.
[18]
This
objection is firstly raised against a single paragraph in the
particulars and secondly, if paragraph 10 is read in context,
it is
clear that the allegations provide factual background pertaining to
the variation of the deliverables in the PPP Agreement.
The
allegations are, furthermore, set out in detail and it is possible
for the defendant to instruct its attorneys in respect of
the
allegations.
[19]
Next
the defendant objects to the allegation that Henning “
advised”
the
representatives of the plaintiff of the proposed variation whereas
the PPP agreement entails that a variation should be done
in writing.
[20]
The
defendant submits that insofar as the plaintiff relies on an oral
agreement, clause 69.1 of the PPP agreement provides,
inter
alia
,
that “
no
provision of this PPP agreement may be amended…or otherwise
varied, except by an agreement in writing signed by the duly
authorised representatives of the Parties”.
[21]
Bearing
in mind that the factual allegations are pleaded in order to sustain
the causes of action set out from paragraph 25 onwards.
This
objection should be directed at the various causes of action and not
the factual averments.
[22]
Lastly,
the defendant contends that the allegation in paragraph 10 that the
proposed variation is not to be confused with a department
variation
proposal is in conflict with:
[22.1] the allegation in
paragraph 15 that in a letter by the plaintiff dated 4 April 2016
addressed to the defendant’s attorneys,
the plaintiff stated
that the variation constituted a variation in terms of the PPP
agreement; and
[22.2] the allegation in
paragraph 16 that it provided the defendant with a provisional
estimate, which allegation is in line with
the provisions of clause
44 of the PPP agreement.
[23]
As set
out
supra
paragraph
15 and 16 contain the factual allegations pertaining to the
variation.
[24]
The
plaintiff’s main cause of action and the alternative thereto is
contained under the heading “
AMENDMENT
TO THE PPP AGREEMENT
ALTERNATIVELY
AGREEMENT
OF WAIVER“
.
[25]
The
factual allegations contained in paragraphs 15 and 16 are in respect
of this cause of action.
[26]
Having
regard to the pleading in totality and the alternative causes of
action relied upon by the plaintiff, the allegations are
not vague
and embarrassing and the defendant is in a position to plead thereto.
Second ground
[27]
The
exception is directed at the following allegations in paragraph 11:
“
The
advice given by Henning as discussed in paragraph 10 above, was
partly oral and partly written. The written portion of the advice
entailed Henning providing Qaba and/or Wallace with an organogram
reflecting the headcount of personnel required to be provided
for by
the plaintiff in its space planning drawings. A copy of the
organogram is attached hereto marked “POC2A”.”
[28]
The
first objection is, once again, directed at the partly oral agreement
that does not comply with clause 69.1. I have dealt with
the point
supra
.
[29]
Secondly,
the defendant states that the wording of the paragraph is inherently
vague and embarrassing, because it does not indicate
whether the
organogram was the written agreement or whether the organogram was
accompanied by a written agreement.
[30]
The
meaning of the allegations in this paragraph is on a simple reading
clear. The written portion of the agreement is the organogram
provided by Henning and attached to the particulars of claim.
[31]
In the
result, this ground of exception cannot succeed.
Third ground
[32]
This
ground of the exception pertains to paragraph 20 of the particulars
of claim and more particularly to the following allegations:
[32.1] paragraph 20.1:
“
On
or about 4 May 2016, the defendant, represented by Henning, provided
the plaintiff, represented by Qaba and/or Wallace, with
an amended
organogram, which reflected an amended headcount of personnel
required to be provided for by the plaintiff in its space
planning. A
copy of this amended organogram is annexed marked “POC6A”.
The accommodation of the personnel reflected
in the amended
organogram necessitated a variation of the space planning drawings to
cater for the adjusted space planning requirements
of the defendant.”
[32.2]
paragraph 20.2:
“
The
amended organogram required the addition of new offices with
associated charges, modifications and service additions as recorded
in paragraph 10.2.1-10.2.15 above to be effected.”
[32.3] paragraph
20.3:
“
The
amended organogram constitutes an amendment to the initial Proposed
Variation (hereinafter referred to as the “Final Proposed
Variation”).
[33]
The
complaint pertains to the failure by the plaintiff to specifically
allege in which respects the organogram attached as “POC6A”
amended the organogram attached as “POC2A”. A mere
comparison between the annexures resolves the defendant’s
problem. Henning would, furthermore, be able to give instructions on
the amendments, insofar as the defendant might not be able
to
ascertain same from a comparison between the two organograms.
[34]
The
provisions of clause 69.1 providing that amendments that must be in
writing and signed by both parties is also raised and had
been dealt
with
infra
.
[35]
The
third ground of the exception stands to be dismissed.
Fourth ground
[36]
This
ground pertains to paragraph 22 and more specifically to the
following allegations:
[36.1] paragraph 22.1:
“
On
or about 27 May 2016, and at Salvokop, Qaba and/or Wallace, acting on
behalf of the plaintiff, presented Henning, acting on behalf
of the
defendant, with a varied space planning drawing which catered for the
Varied Facilities as required by the defendant and
as reflected in
the Final Proposed Variation. A copy of the varied space planning
drawing is annexed hereto marked “POC8”.”
[36.2]
paragraph 22.2:
The additional work
would have required to be carried out to give effect to the revised
space planning drawing (being the changes
recorded in paragraph
10.2.1 to 10.1.5 above) was not provided for in the Project
Deliverables under the PPP agreement and required
a variation of the
Project Deliverables thereunder.”
[36.3]
paragraph 22.3:
“
Henning,
acting on behalf of the defendant, appended her signature to the
revised space planning drawing (annexure POC8) thus confirming
her
acceptance of the Final Proposed Variation to the space planning as
reflected therein. The revised space planning drawing catered
for the
amended headcount of personnel and accorded the Final Proposed
Variation.”
[37]
The
defendant contends that paragraph 22.2 is vague and embarrassing
because it is not clear whether the plaintiff or the defendant
required the variation as provided in clause 44.2 and 45.1 of the PPP
Agreement. The allegation has all along been that the defendant
requested the variation and that it was done partly oral and partly
in writing. The drawings provided to Henning were in accordance
with
her request for a variation.
[38]
The
allegations viewed in its totality make this clear and the defendant
is able to take instructions from Henning in respect of
the
allegations contained in paragraph 22.2.
[39]
The
complaint to the allegations in paragraph 22.3 is in the same vein,
save that the defendant also states that it is “
unable
to discern whether the Variation being referred to and is alleged to
have been accepted by Henning is the same variation
which is referred
to in paragraph 22.2”.
[40]
On a
mere reading of the three paragraphs, it is clear that the variation
mentioned in paragraph 22.3 refers to the variation in
paragraph
22.1.
[41]
This
ground of exception stands to be dismissed.
Fifth ground
[42]
This
ground pertains to the allegations contained in paragraph 25 which
read as follows:
“
25.
The letters and document annexed as annexures POC3-POC9 constitute a
written agreement concluded at
Sandton alternatively, Salvokop, on or
about 27 May 2016 alternatively 24 June 2016 between the defendant,
represented by ENS Africa
Attorneys alternatively Nikita Lala,
further alternatively Khaya Mantengu, further alternatively Adriaan
Hoeben, further alternatively
Akthary Henning and the plaintiff,
represented by Werksmans Attorneys alternatively Chris Moriatis,
further alternatively, Qaba,
in terms of which the parties agreed to
amend the PPP agreement, alternatively agreed to waive the provisions
of clause 44 thereof,
in respect of the Final Proposed Variation on
the following express, alternatively implied further alternatively
tacit terms-”
[43]
The
defendant contends that the allegations in paragraph 25 are
completely vague and embarrassing as no particularity is pleaded
as
to how the letters and documents annexed to the particulars of claim
could constitute “
a
written agreement”.
[44]
In
raising the objection, the defendant failed to have regard to
subparagraphs 25.1 to 25.3.9, which set out in detail the terms
of
the agreement between the parties. On a mere reading of the letters
in their totality, the intention of the parties is clearly
discernible and the attorney for the defendant is in a position to
take instructions from the various role-players referred to
in the
letters. Furthermore, the defendant is in a position to admit or deny
the allegations and to plead its version of events.
[45]
The
factual allegations contained in the
whole
paragraph
25 causes no embarrassment to the defendant.
[46]
The
defendant also contends that annexure “POC8” which is
headed “Space Planning Proposal on New Departmental
Headcounts”, was only signed by Henning and therefore does not
comply with clause 69.1 of the PPP agreement.
[47]
Annexure
“POC8”, should not be considered on its own. “POC8’
is one of the documents that according to the
plaintiff represents
the written agreement between the parties in respect of the variation
of the deliverables. In view of the
plaintiff’s allegation that
the parties agreed in writing through the various letters and
documents to vary the written agreement,
the allegation is not in
conflict with clause 69.1.
Sixth ground
[48]
The
plaintiff alleges in paragraph 27 that it incurred in the amount of
R 20 803 280, 53 as a result of the
execution of
the works.
[49]
The
defendant complains that the amount is not detailed nor substantiated
by documents as proof of the expenses.
[50]
Paragraph
27, however, specifies with reference to specific items, how the
amount was arrived at. Documents proving the costs are
evidence and
can be obtained by the defendant prior to the trial in terms of the
provisions of rule 35 of the Uniform Rules
of Court.
[51]
This
ground can similarly not succeed.
Seventh ground
[52]
This
ground pertains to paragraph 30, which reads as follows:
“
30.
On or about 15 April 2016, alternatively 26 April 2016, and at
Sandton, the defendant, represented by ENS Africa
alternatively
Nikita Lala, further alternatively Adriaan Hoeben, and the plaintiff,
represented by Werksmans Attorneys alternatively
Chris Moriatis,
entered into a written agreement in terms of which the parties agreed
that the time period for the delivery of
an estimate in terms of
clause 44.4 of the PPP agreement would be extended in respect of the
Final Proposed Variation to a reasonable
period after the completion
of the Works. A copy of the written agreement comprises of annexure
POC5 read with POC7”.
[53]
“
POC5”
is dated 14 April 2016 and contains the following proposal from the
defendant’s attorneys:
“
19.
… We appreciate that there is a difference in opinion between
the parties as to the liability for the cost
of the additional
offices but suggest that this dispute be held over for present
purposes and be resolved in the fullness of time.”
[54]
“
POC6”,
although not referred to in this paragraph, is a letter from the
plaintiff’s attorney dated 15 April 2016 and
states in
paragraph 1:
“
1.
I refer to your letter of 14 April 2016. ...”
[55]
In
paragraph 5.6 of the letter the following is stated:
“
5.6
The Private Party would therefore propose that, subject to agreement
on the changes to space planning, the Department
will be responsible
for and will pay the cost of procuring the materials for purposes of
these changes. The other costs, including
abortive work costs to
date, can be held over and resolved later.”
[56]
“
POC7”
is another letter from the plaintiff’s attorney dated 26 April
2016 and is in response to a letter by the defendant’s
attorney
dated 21 April 2016.
[57]
Paragraph
7.4 of the letter reads as follows:
“
7.4
The issue of costs relating to this work must still be addressed and
our clients repeat that set forth in our previous
letter in this
regard. In the alternative, the Private Party may be prepared to
agree to fund these costs, on an interim basis,
on the understanding
that the entire matter relating to space planning be resolved by
Fast-Track dispute resolution. A written
agreement reflecting this
will need to be entered into in this regard.”
[58]
The
defendant submits that allegations in this paragraph are vague and
embarrassing, in that the letters referred to do not constitute
a
written agreement in terms of which the parties agreed that the time
period for the delivery of an estimate in terms of clause
44.4 of the
PPP agreement would be extended in respect of the Final Proposed
Variation to a reasonable period after the completion
of the works.
[59]
I
agree. Paragraph 30 falls under the alternative claim for breach of
the PPP agreement.
[60]
The
defendant’s exception against the alternative claim stands to
be upheld.
Eighth ground
[61]
This
ground relates to paragraph 38 of the particulars of claim, which
reads as follows:
“
[On]
or about 27 May 2016, and at Salvokop, the defendant, represented by
Henning, and the plaintiff represented by Qaba and/or
Wallace,
entered into an oral agreement
alternatively
a
partly written, partly oral agreement (the written portion being
annexure POC8) in terms of which the parties agreed to the plaintiff
carrying out the additional work in accordance with the Final
Proposed Variation.”
[62]
Firstly,
the defendant raises, once again, the objection that the oral
agreement and for that matter annexure “POC 8”,
which was
only signed by Henning, does not accord with clause 69.1. The
allegations contained in paragraph 38 are factual and in
support of a
further alternative claim that compliance with the provisions of
clause 69.1 would be
mala
fide,
unconscionable,
an abuse of the process of law in terms of section 34 of the
Constitution and contrary to public policy. Without
the factual
allegation that the agreement was partly oral, the plaintiff would
not have any factual foundation to claim the relief
set out under
this further alternative cause of action.
[63]
Secondly,
the defendant submits that the allegations in respect of the oral
agreement are vague and embarrassing because it is lacking
particularity. This objection can be taken care of by utilising the
provisions of rule 21 of the Uniform Rules of Court. The allegations
are for purposes of pleading sufficient.
[64]
Lastly,
the defendant contends that the plaintiff alleges in paragraphs 22.1
and 22.3, that “POC8” is a “
varied
space plan drawing”
which
was presented by the plaintiff to the defendant on 27 May 2016 and
which catered for the Varied Facilities as required by
the defendant
and as reflected in the Final Proposed Variation. Paragraph 38,
however, refers to “POC8” as “
the
written portion of the agreement”
,
which allegation confuses the defendant.
[65]
Once
the proposal contained in “POC8” was signed by Henning it
became a written portion of an agreement. On a mere reading
of the
paragraphs in their totality, this is perfectly clear and the
objection stands to be dismissed.
Tenth ground
[66]
This
ground of exception pertains to clause 32.1.1 of the PPP agreement
that provides that the plaintiff is not entitled to receive
any
“
Unitary
Payment”
until
the
Service
Commencement Date”,
which
is defined in clause 1.109 to mean “
the
first Business Day following the date on which the Availability
Certificate is issued and delivered to the [Defendant] in accordance
with clause 19.”
[67]
In
terms of clause 19, an Availability Certificate can only be issued
after receipt of the “
Completion
Certificate”
from
the Independent Certifier. Accordingly, the plaintiff is not entitled
to a Unitary Payment at any time before the issuing of
the Completion
Certificate.
[68]
In
view of the aforesaid, the defendant submits that the particulars of
claim are vague and embarrassing insofar as the plaintiff
alleges in
paragraph 26.4 that a Completion Certificate was issued on 19 August
2016, yet the plaintiff claims in paragraph 28
for Unitary Payments
for June 2016, July 2016 and August 2016.
[69]
The
plaintiff, however, contends that its claim is for damages which
includes a claim for loss of revenue being an amount equal
to the
unitary payments which it would have received but for the defendant’s
conduct.
[70]
In the
result, the particulars of claim are sufficiently and properly
pleaded to enable the defendant to plead.
[71]
I
agree and this ground of exception stands to be dismissed.
No cause of action
Legal principles
[72]
In
McKenzie
v Farmers’ Co-Operative Meat Industries Limited
1922
AD 16
the Appellate Division defined the necessity to plead a cause
of action as follows at 23:
“
...every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to judgment of
the court.”
Ninth ground
[73]
This
ground pertains to the allegation that the particulars of claim lack
the necessary averments to sustain a cause of action.
[74]
The
defendant avers that regulation 16.8.1 of the Treasury Regulations
published in GN R225 in GG 27388 on 15 March 2005 applies
to the PPP
Agreement. Regulation 16.8.1 reads as follows:
“
The
prior written approval of the relevant treasury is required for any
material amendments to a PPP agreement including any material
variations to the outputs therein, or any waivers contemplated or
provided for in the PPP agreement.”
[75]
In the
result, the plaintiff should have pleaded that the alleged
variations, amendments and/or waivers of some of the provisions
of
the PPP agreement were made with the prior written approval of
National Treasury.
[76]
The
plaintiff failed to do so and as a result, the particulars of claim
lacks the necessary facts to sustain a cause of action.
[77]
The
plaintiff, in answer, submitted that only “
material
amendments”
requires
prior written approval and as the amendments to the PPP agreement
were not material, regulation 16.8.1 does not apply.
In the result,
failure to plead compliance regulation 16.8.1 is not a fact that
needs to be pleaded in order to sustain a cause
of action. I agree.
[78]
It is,
naturally, still open to the defendant, to plead that the amendments
were material as envisaged in regulation 16.8.1. The
issue will in
such an event be fully ventilated during the trial.
Costs
[79]
The
plaintiff has been substantially successful in opposing the exception
and a cost order in favour of the plaintiff should follow.
ORDER
[80]
In the
premises, I grant the following order:
1.
Grounds
1, 2, 3, 4, 5, 6, 8, 9 and 10 of the exception are dismissed with
costs.
2.
Ground
7 is upheld and the plaintiff is afforded ten days from the date of
this order to amend its alternative claim in respect
of breach of the
Public Private Partnership Agreement.
N. JANSE VAN
NIEUWENHUIZEN
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
DATE
HEARD PER COVID19 DIRECTIVES:
1
February 2021
(Virtual
hearing.)
DATE
DELIVERED PER COVID19 DIRECTIVES:
25
March 2021
APPEARANCES
Counsel
for the Plaintiff:
Advocate
N. Redman SC
Instructed
by:
C
De Villiers Attorneys
c/o
Wiese and Wiese Attorneys
Counsel
for the Defendant:
Advocate
H. Shozi SC and
Advocate
J. Mitchell
Instructed
by:
Ledwaba
Mazwai Attorneys