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[2021] ZAKZPHC 77
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MEC for the Department of Transport, KwaZulu-Natal v Raubex KZN (Pty) Ltd and Another (6677/2020) [2021] ZAKZPHC 77 (8 June 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 6677/2020
In
the matter between:
THE
MEC FOR THE DEPARTMENT OF TRANSPORT, APPELLANT
KWAZULU-NATAL
and
RAUBEX
KZN (PTY)
LTD. FIRST
RESPONDENT
RODERICK STEWART
N.O. SECOND
RESPONDENT
ORDER
Coram
Mossop AJ:
The
application is dismissed with costs on the party-party scale.
JUDGMENT
Mossop
AJ:
Introduction
[1]
The
applicant and the first respondent concluded a contract known as ‘the
General Conditions of Contract for Construction
Works, third edition
(2015)’ (the contract). The contract is a standard form
contract compiled and administered by the South
African Institute of
Civil Engineers.
[2]
The
contract was concluded as a consequence of the first respondent being
the successful bidder in a tender put out by the applicant
in respect
of routine maintenance that it required to be undertaken on certain
roads administered by the Department of Transport.
Representation
[3]
When
the matter was argued, I had the pleasure of hearing argument from
each of Mr Choudree SC, leading Mr Crampton, who appear
for the
applicant, with Mr Choudree commencing the argument and Mr. Crampton
delivering the reply, and from Mr. Pillay SC, who
appears for the
first respondent. All three counsel are sincerely thanked for their
most helpful submissions. The second respondent,
against whom no
relief is sought by the applicant, has not participated in this
matter and is not represented.
The
dispute
[4]
In
preparing its tender bid, the first respondent was required to state,
at item B13.06 of the project specification, the amount
that it
intended to charge the applicant as a management fee for
subcontracted work. Item B.13.06 stated as follows:
‘
The
tendered rate for item B13.06 is the percentage which can be claimed
by the established contractor for work completed successfully
by the
emerging contractors.’
[5]
After
awarding the tender to the first respondent, the applicant noted that
the first respondent had not included a rate at B13.06
and took the
view that no management fee was to be charged by it for this portion
of the contract. The first respondent disputed
this. It contended
that the overall purpose of the contract was for routine road
maintenance activities to be performed by emerging
subcontractors
under its management. The first respondent’s activities in this
regard were limited to the performance by
it of a mere 20% of the
total construction work to be performed. Its primary function was to
manage the work of the emerging contractors.
As the bulk of the work
to be performed was to be subcontracted, the first respondent
contended that the position taken by the
applicant that the
management of that subcontracted work was not to be charged for by it
was irrational. To compensate the successful
party for supervising
the work of the subcontractors, the contract provided for a
management fee. The first respondent had tendered
in its bid document
at a rate of 20% for the work successfully completed by the appointed
sub-contractors. It did not specify what
the Rand value of that 20%
charge would be. By virtue of the fact that its tender had
subsequently been accepted, the first respondent
reasoned that the
rate at which it sought to be compensated for its supervisory
functions had also been accepted.
[6]
The
applicant did not agree with this proposition and a dispute ensued.
Ultimately, the first respondent invoked the mechanisms
of the
contract to formally declare a dispute. The matter was then referred
to the second respondent for determination, sitting
in his
representative capacity as the only member of the adjudication board
contemplated by the contract. Written representations
were submitted
to the second respondent and in due course he published his decision
(the decision). In the decision, the second
respondent found for the
first respondent.
The
applicant’s dissatisfaction with the decision
[7]
The
applicant’s view is that the decision of the second respondent
is clearly wrong. It permits the first respondent, so it
says, to
claim payment of an amount in excess of the agreed tender amount. It
wishes to further challenge the decision. However,
clause 10.6 of the
contract contains a sub-clause that requires a dissatisfied party to
give notice of its intention to dispute
either the whole, or a part
of, a decision of the adjudication board within defined time periods.
Should such notice not be timeously
given, the dissatisfied party may
no longer refer the decision complained of to arbitration or a court.
The
time limitation clause
[8]
Sub-clause
10.6.1.2 of the contract reads as follows:
‘
A
party shall not dispute the validity or correctness of the whole or a
specified part of the decision before 28 days or after 56
days from
the receipt of the decision.
Unless
either party shall on or after the said 28 days, or on or before the
said 56 days from receipt of the decision, give written
notice to the
other party, referring to this Clause, disputing the validity, or
correctness of the whole, or a specified part of
the decision, he
shall have no further right to refer such a dispute to arbitration or
court proceedings, whichever is applicable
in terms of the Contract.’
[9]
The
reference to a ‘decision’ in the extract above is a
reference to a decision of an adjudication board. I shall refer
to
this clause as ‘
the
time-limitation clause
.’
Non-compliance
with the time-limitation clause
[10]
It
is common cause that the relevant dates are the following:
(a)
24
March 2020, being the date upon which the decision was received by
the deponent to the applicant’s founding affidavit,
Ms Patience
Philile Sithole (Ms Sithole);
(b)
25
March 2020 to 22 April 2020, being the first 28-day period during
which no party could take any action regarding the decision;
and
(c)
23
April 2020 to 22 May 2020, being the second 28-day period, during
which any party dissatisfied by the decision was required to
give
notice of its dissatisfaction.
[11]
It
is also common cause that the applicant did not give notice of its
intention to dispute the decision within the period prescribed
by the
time-limitation clause and only gave such notice on 12 August 2020.
Why this happened is considered later.
[12]
Given
the wording of sub-clause 10.6.1.2 of the contract, the applicant is
now barred from further disputing the correctness of
the decision. To
overcome this obstacle, the applicant seeks in this application an
order that enforcement of the time-limitation
clause be declared
contra bonos mores
.
The
relief sought
[13]
The
applicant seeks the following relief in its notice of motion:
‘
1.
It is declared that the time-barring provisions, contained in clause
10.6.1 of the General Conditions
of Contract for Construction works
(Third edition (2015)) (“the GCC’s”), which clause
was incorporated into a
contract (contract number ZNT4009/16T)
concluded between Applicant and First Respondent, are unenforceable
insofar as such provisions
prevent Applicant from challenging or
disputing Second Respondent’s decision (“the Adjudication
Board Decision”)
dated and received on 23 March 2020.
2.
The order granted in terms of paragraph 1 does not affect the general
enforceability of the said clause
10.6.1 of the GGC’s but is
granted on facts peculiar to this case.
3.
There is no order as to costs, provided that if either Respondent
opposes this application, it will be
requested that such
Respondent(s) be ordered to pay, jointly and severally where
applicable, the costs of application.’
[14]
The
applicant does not seek an order that the enforcement of the
time-limitation clause be struck down in all cases where the General
Conditions of Contract for Construction Works contract is employed.
The applicant’s case is nuanced: it contends that it
is only in
this case that the enforcement of the time-limitation clause should
be struck down.
It
is for this reason that paragraph two has been included in the notice
of motion. That paragraph specifically seeks to only prohibit
the
enforcement of the time-limitation clause because of the specific
facts of this case.
Contra
bonos mores
[15]
The
ordinary meaning ascribed to this maxim is ‘
against
good morals’.
[1]
Whilst
the applicant’s notice of motion references this maxim and the
founding affidavit makes extensive use of it, in the
applicant’s
heads of argument more emphasis is placed on the maxim ‘against
public policy’. Counsel for the applicant
submitted that the
two phrases, essentially, mean the same thing. There appears to be
merit in this submission.
While
t
he
law generally seems to classify illegal or unenforceable contracts
(apart from those contrary to statute) into contracts that
are either
contra
bonos mores
or those that are contrary to public policy, this classification is,
indeed, interchangeable, as:
‘
in a sense ... all
illegalities may be said to be immoral and all immorality and
illegality contrary to public policy’.
[2]
I
shall accordingly treat them as if they were the same.
[16]
In
considering what amounts to ‘good morals’, Thirion J in
Edouard v Administrator, Natal
, stated that:
‘
From
the examples which the writers give of conduct or contracts which is
branded as being contrary to public policy it is reasonable
to infer
that when they refer to good morals they have in mind those deep
seated convictions held generally by the community in
the interest of
the welfare of the community. Although it is often the case that
contracts which are contrary to public policy
are infested with some
turpitude, it is not necessary that, in order to be contrary to
public policy, they should contain some
disgraceful provision or have
as their aim the commission of some moral impropriety.’
[3]
[17]
It
is so that circumstances may arise in a contract in which a
stipulation is felt to offend the moral susceptibilities of the
citizens of this country although it cannot be said to violate any
known provision of the law. The law will refuse to enforce such
an
agreement which is then identified as an immoral contract. What is
immoral is a factual not a legal issue.
[4]
[18]
With
the advent of a constitutional democracy in this country it is now
accepted that a contractual term that is contrary to public
policy is
unenforceable. Public policy is derived from the founding
constitutional values of human dignity, the achievement of
equality
and the advancement of human rights and freedoms, non-racialism and
non-sexism. The validity of all law, including contractual
law,
depends on the consistency of that law with the provisions of the
Constitution and the values that underlie the Constitution.
The
consequence is that the application of the principle of
pacta
sunt servanda
is also subject to constitutional control.
[19]
The
first respondent relies heavily on the fact that the applicant agreed
to the terms of the contract, to which effect must now
be given. It
is settled law that, in general, public policy requires contracting
parties to honour obligations that have been freely
and voluntarily
undertaken by them. In
Beadica
231 CC and others v Trustees of the Oregon Trust,
[5]
the court held that it was crucial to economic development that
individuals should be able to trust that all contracting parties
would be bound by obligations willingly assumed by them when
contracting. Certainty of contractual relations advance
constitutional
rights and is essential to the achievement of the
constitutional vision for this country. However, the court held
further that
there was no basis for privileging
pacta
sunt servanda
over other constitutional rights and values: the requirements of
public policy are informed by a wide range of constitutional values.
Where a number of constitutional rights and values are implicated, a
careful balancing exercise is required to determine whether
enforcement of the contractual terms would be contrary to public
policy in the circumstances. While it is necessary to recognise
the
doctrine of
pacta
sunt servanda
,
courts could decline the enforcement of a time-limitation clause if
implementation would result in unfairness or would be unreasonable
for being contrary to public policy.
[20]
A
word of caution was sounded in
Sasfin
(Pty) Ltd v Beukes
.
[6]
The court stated:
‘
One
must be careful not to conclude that a contract is contrary to public
policy merely because its terms (or some of them) offend
one's
individual sense of propriety and fairness. In the words of Lord
Atkin in
Fender v St John-Mildmay
1938 AC 1
(HL) at 12 ([1937]
3 All ER 402
at 407B - C),
“
the
doctrine should only be invoked in clear cases in which the harm to
the public is substantially incontestable, and does not
depend upon
the idiosyncratic inferences of a few judicial minds”
(see
also
Olsen v Standaloft
1983 (2) SA 668
(ZS) at 673G). Williston on
Contracts
3rd ed para 1630 expresses the position thus:
“
Although
the power of courts to invalidate bargains of parties on grounds of
public policy is unquestioned and is clearly necessary,
the
impropriety of the transaction should be convincingly established in
order to justify the exercise of the power.
In
grappling with this often difficult problem it must be borne in mind
that public policy generally favours the utmost freedom
of contract,
and requires that commercial transactions should not be unduly
trammelled by restrictions on that freedom.”’
[7]
[21]
The
applicant contends that to enforce the time-limitation clause would
be unfair to it.
The
applicable test for fairness
[22]
Counsel
for the applicant submitted that the test to be applied when
considering the issue of fairness is that set out in
Barkhuizen
v Napier
,
[8]
namely:
(a)
Is
the clause to which objection is taken unreasonable? If it is not
unreasonable, then:
(b)
Should
it be enforced in the view of the circumstances that prevented
compliance with its provisions?
[23]
I
am in agreement with this submission. Once it is accepted that the
wording of the contract or clause in question does not itself
violate
public policy and that non-compliance with it is thereafter
established, the claimant is required to show that, in the
circumstances of the case, there was a good reason why it failed to
comply with the clause.
[9]
The onus is on the party seeking to avoid the enforcement of the
clause to demonstrate why its enforcement would be unfair and
unreasonable in the given circumstances.
[10]
The
validity of time-limitation clauses
[24]
Time-limitation
clauses are relatively common features of commercial contracts. They
have enjoyed the attention of the Constitutional
Court in
Barkhuizen
,
where the court held that
as
a matter of public policy, and subject to considerations of
reasonableness and fairness, such clauses in contracts are
permissible.
[11]
The
Constitutional Court found that such a clause does not deny a party
the right to seek judicial redress: it simply requires
the party to
seek judicial redress within a prescribed period.
[25]
Part
of the reasoning that led to the conclusion in
Barkhuizen
is to be found in the earlier Constitutional Court decision of
Mohlomi
v Minister of Defence
,
[12]
where Didcott J said that:
‘
Rules
that limit the time during which litigation may be launched are
common in our legal system as well as many others. Inordinate
delays
in litigating damage the interests of justice. They protract the
disputes over the rights and obligations sought to be enforced,
prolonging the uncertainty of all concerned about their affairs. Nor
in the end is it always possible to adjudicate satisfactorily
on
cases that have gone stale. By then witnesses may no longer be
available to testify. The memories of ones whose testimony can
still
be obtained may have faded and become unreliable. Documentary
evidence may have disappeared. Such rules prevent procrastination
and
those harmful consequences of it. They thus serve a purpose to which
no exception in principle can cogently be taken.’
[13]
The
meaning of the time-limitation clause
[26]
The
meaning of the time-limitation clause appears to be relatively
uncontroversial. On the face of it, if an adjudicating board
renders
a decision in a matter referred to it and either of the parties to
that referral are dissatisfied with that decision, no
action need, or
can, be taken until a period of 28 days has elapsed from the date of
receipt of the decision. This was referred
to in the papers as
constituting a ‘
cooling down
’
period, allowing the parties to fully consider and reflect upon a
decision handed down. After the lapse of the initial 28-day
period,
any party still wishing to dispute the decision has a second period
of 28-days within which to deliver a notice to the
other party. The
notice to be delivered is required to mention sub-clause 10.6.1.2 of
the contract and shall indicate whether the
validity or correctness
of the whole, or a specified part, of the decision is disputed.
Failure to deliver such a notice within
the prescribed time period
precludes the dissatisfied party from referring that specific dispute
to arbitration or to court proceedings,
whichever applies to the
particular contract in question.
The
applicant’s allegations
[27]
The
principal factual submissions of the applicant as to why the
enforcement of the time-limitation clause should not be permitted
are
the following:
(a)
the
applicant appointed an attorney to represent it in the dispute before
the second respondent. He was a Mr Mkhulise (Mr Mkhulise)
of the firm
Mkhulise Attorneys. On Friday, 20 March 2020, four days before the
second respondent delivered his decision, Mr. Mkhulise
was tragically
murdered.
The applicant states that following upon this, it
was unable to get any information from Mr Mkhulise’s files from
his office
as he was a sole practitioner and his office was in
‘disarray’ following his death. It was also unable to
receive legal
advice concerning the decision. Attempts to appoint a
successor to Mr Mkhulise were further hampered when the applicant
approached
its present attorneys and was told that they could not act
until all outstanding amounts owing to Mr Mkhulise’s firm had
been paid. The founding affidavit states that the applicant’s
present attorneys were approached ‘in early June’
but
that they were only capable of being instructed by the applicant on
17 June 2020. This application was ultimately launched
on 16
September 2020; and
(b)
on
Monday, 23 March 2020, one day before the decision was delivered,
President Ramaphosa declared a nationwide lockdown as a consequence
of the outbreak of the COVID-19 pandemic in the country (the
lockdown). As a consequence, the applicant experienced difficulty
in
appointing a new attorney and devoting the necessary attention to the
matter.
The applicant states that during level 5 of the
lockdown, being the most restrictive stage, all citizens, apart from
those involved
in essential services, were confined to their homes.
During this level of the lockdown, Ms Sithole and her colleagues were
not
permitted to work as essential services employees and could not
access their workplace or the documents relevant to this matter.
Level 5 of the lockdown was relaxed to level 4 on 1 May 2020, but the
applicant was still faced with challenges. While it was now
permitted
to operate a skeleton staff, the staff were inundated with a backlog
of work that had accumulated during the previous
month. In addition,
according to the applicant, there was uncertainty as to whether
attorneys were entitled to operate as essential
services and many of
the attorneys’ offices in Pietermaritzburg remained closed.
[28]
The
applicant contends that the interplay of these two principal factors
caused it difficulty in complying with the provisions of
the
time-limitation clause.
Application
of the test as laid down in
Barkhuizen
[29]
The
applicant does not contend that sub-clause 10.6.1.2 is itself
objectionable. So much was conceded in its replying affidavit
and
confirmed by its counsel when the matter was argued. That disposes of
the first leg of the inquiry set out in
Barkhuizen
.
Only the second part of the inquiry need be considered.
[30]
In
approaching the second stage of the inquiry,
the
reasons advanced by the applicant for its non-compliance obviously
assume some importance. It is those reasons that must be
assessed to
determine whether they are sound and allow the applicant to escape
the strictures of the time-limitation clause. The
court is also
required to take into account the relative equality or inequality of
the bargaining positions of the parties when
concluding the
contract.
[14]
[31]
At
first blush, the two principal reasons advanced by the applicant for
its non-compliance with the time-limitation clause appear
to be
cogent and compelling. Death is notoriously a great disruptor, and
the imposition of a national lock down is unprecedented
in the modern
history of this country. As was said in
Barkhuizen
:
‘ …
where
a claimant seeks to avoid the enforcement of a time-limitation clause
on the basis that non-compliance with it was caused
by factors beyond
his or her control, it is inconceivable that a court would hold the
claimant to such a clause.’
[15]
[32]
The
essential question to be determined thus is whether compliance with
the time-limitation clause was prohibited by factors beyond
the
control of the applicant. The death of the attorney and the
imposition of the lockdown were clearly events beyond the control
of
the applicant. But does the mere fact of their occurrence permit the
applicant to avoid the terms of the time-limitation clause?
In my
view, the answer to that question must be in the negative. The
conduct of the applicant’s employees must still be scrutinised
notwithstanding the occurrence of the two factors relied upon by the
applicant. The difficulty for the applicant is that it has
provided
very little information concerning its employees conduct in relation
to the occurrence of the two factors relied upon
by it.
[33]
In
the analysis that follows, it may appear that only the evidence of Ms
Sithole is being singled out for close scrutiny. The fact
of the
matter is that insofar as the merits of the application are
concerned, hers is the only evidence tendered by the applicant.
There
are no affidavits from other employees of the applicant or from
employees of the late Mr Mkhulise’s practice.
[34]
Sequentially,
the death of Mr Mkhulise was the first event Ms Sithole had to deal
with. She acknowledged that she became aware of
his murder the day
after it happened, which would then mean that she had such knowledge
on 21 March 2020. This was before the announcement
of the lockdown by
President Ramaphosa. Whilst Ms Sithole acknowledged in her affidavit
that she relied heavily upon Mr Mkhulise,
it is equally so that she
must have realised at a very early stage, before the decision was
even delivered, that he would unfortunately
not be able to assist her
again in the future. The need to replace him swiftly would have been
obvious to her. Initially, she would
have had no appreciation of the
coming lockdown. When it was announced three days after Mr Mkhulise’s
death, she knew that
she had limited time to source a replacement
before the lockdown was imposed. She has provided no evidence of what
she did to try
and replace him.
[35]
When
the occurrence of the lockdown was announced, it was not imposed with
immediate effect. The citizens of this country were given
three days
advance warning that the lockdown would be imposed. This was
presumably to allow them to make preparations for its imposition.
Ms
Sithole makes no mention of what she did in the days leading up to
the imposition of the lockdown, whether in regard to the
appointment
of a new attorney or with regard to delivering the notice
contemplated by the contract. She does not mention even reading
the
decision, which she received directly from the second respondent, or
discussing its terms with any other person involved in
the matter on
behalf of the applicant. The lead up to the imposition of the
lockdown offered a period, albeit brief, within which
the relevant
files that required urgent attention could have been identified and
removed for easy access at the relevant official’s
residence,
alternatively copies of relevant documents could have been made for
later perusal at home. Nothing is explained by Ms
Sithole about what
was done in preparation for the lockdown.
[36]
Indeed,
throughout the founding affidavit, Ms Sithole makes no disclosure of
anything that she personally did from 21 March 2020,
being the date
upon which she acquired knowledge of the murder, to 22 May 2020,
being the date upon which the second 28-day period
expired. What she
narrates is impersonally recited without an acknowledgement from her
that she personally did any of the things
that she mentions. The mere
existence of the murder and the lockdown appears to be used by Ms
Sithole as a cloak that is drawn
down upon her activities to obscure
them from view.
[37]
It
follows that Ms Sithole makes no mention of anything that she
personally did during the first part of the lockdown, being level
5.
That period is glossed over with the explanation that citizens of
this country were required to remain at home and that no access
to
the documents relevant to this matter was possible. That may well be
so. But the mere fact that the lockdown was imposed did
not mean that
state employees such as Ms Sithole were entitled to regard it as a
paid period of absence. Whilst the lockdown was
enormously
disruptive, economic life had to continue even if it was conducted
from one’s dining room table.
[38]
The
silence of Ms Sithole is perhaps more damning insofar as the period
after the relaxation of the lockdown from level 5 to level
4
occurred. The first day of the level 4 lockdown was 2 May 2020.
[16]
At that point, there were still 20 days remaining of the second
28-day period. This was the critical period when the notice of
dissatisfaction with the decision had to be delivered. Nothing is
said about what Ms Sithole did in relation to this matter during
that
period either. There is a general explanation that the applicant’s
skeleton staff were faced with a backlog of work
that had
accumulated. One would have anticipated that this matter would be at
the top of the list of those matters requiring urgent
attention. It
appears that it was not. Why this is the case is not revealed.
[39]
Ms
Sithole describes herself as:
‘…
a
Director: Legal Services in the Department of Transport,
KwaZulu-Natal.’
She
admits to having a ‘generalist experience in the law’.
She was a direct recipient of the decision when it was handed
down by
the second respondent. At the time that she received the decision,
she would have been able to access all the documents
relevant to the
matter, including the contract itself. She would have been able to
remind herself of the further requirements of
the contract. She
claims not to be a construction law expert and asserts that she is
‘not intimately familiar with the contract
and all its
demands.’ It does not require one to be an expert to realise
that the clock commenced running once the decision
was received. If
Ms Sithole was not comfortable in dealing with the contract, she was
under a duty to her employer to ensure that
she received the
necessary advice from someone who was familiar with it. She, on
behalf of the applicant, was responsible for the
legal aspects of the
contract. She does not reveal a single step that she personally took
to secure that advice. She does not mention
whether the applicant
only appoints a single attorney to attend to its business or if it
has a list of approved attorneys who may
be approached. It is more
probable that the latter holds true. Yet she does not mention
approaching or telephoning a single attorney
either prior to or after
the lockdown commenced. Mr Pillay submitted that if the applicant was
truly at a loss regarding what to
do, it could have communicated with
the South African Institute of Civil Engineers, the administrators of
the General Conditions
of Contract for Construction Works contract
and sought advice from them. It appears that the applicant did not do
so. Finally,
the applicant could have contacted the first
respondent’s attorneys and explained the predicament in which
it found itself.
Perhaps, at an early stage in the proceedings, the
second respondent may have had a more accommodating attitude towards
granting
the applicant the indulgence that it sought. No such
communication was resorted to.
[40]
Ms
Sithole has indicated that she relied heavily upon Mr Mkhulise. In
argument, it was agreed by counsel for the applicant that
the
applicant, upon recognising that the second respondent had found
against it on the basis that he did, immediately recognised
that the
decision was incorrect and flawed and wanted to take steps to reverse
the decision. The importance of that concession
is that Mr Mkhulise’s
involvement was not required in assessing the correctness of the
decision: it could not have been as
the applicant arrived at the
conclusion that the decision was wrong after his demise. Mr
Mkhulise’s only involvement would
have been on the
communication of the applicant’s decision to the respondents.
However, according to the applicant, following
Mr Mkhulise’s
death, there was no way of the applicant taking the next step
required by sub-clause 10.6.1.2 of the contract.
A consideration of
that clause reveals that all that was required from the applicant was
a notice that made reference to that clause
number and a further
statement as to whether the whole, or only a part, of the decision
was challenged. There was no expertise
required in constructing the
notice and the notice itself involved no great complexity. Initially,
all that was required was the
sub-clause of the contract to be read
and understood. It appears that no-one employed by the applicant took
the trouble to read
the sub-clause. No reason was advanced in the
founding affidavit as to why Ms Sithole could not have done what was
necessary in
that regard.
[41]
As
regards the availability of other attorneys to assist the applicant,
Ms Sithole makes the following statement:
‘
In
the initial stages of the alert level 4, there was some uncertainty
as to whether attorneys were entitled to operate as essential
services and many of the attorneys’ offices in Pietermaritzburg
remained closed. It was, therefore, difficult to source attorneys
to
replace Mr Mkhulise.’
This
statement is impermissibly vague. Who was uncertain? Ms Sithole or
attorneys generally or only specific attorneys? Which attorneys’
offices remained closed? How did Ms Sithole know that many of the
attorneys’ offices remained closed? Were any attorneys
contacted by her and did they indicate that they could not do the
applicant’s work? These are all relevant questions that
require
an answer if the applicant is to be found to have discharged the onus
that it bears.
[42]
Finally,
I can discern no inequality in bargaining strength that redounds to
the benefit of the applicant. If anything, the applicant
was in the
stronger bargaining position of the two parties.
[43]
The
applicant painted its picture using broad brush strokes. What was
needed was the use of a finer brush to highlight the detail
that is
presently missing from the picture. The affidavit of Ms Sithole is
remarkable more for what it does not say than for what
it does say.
In my view, insufficient reasons have been advanced in support of the
allegation that the applicant could not have
complied with the
provisions of the time-limitation clause.
Other
issues raised
[44]
The
parties identified other ancillary issues, including:
(a)
whether
the applicant was required to establish absolute impossibility of
performance in order to obtain the relief that it seeks.
Mr Choudree,
however, made it clear that the applicant was not relying on the
doctrine of supervening impossibility of performance.
If that was
sought to be established, the performance would have to be
absolutely
or objectively impossible and not merely difficult or
uneconomical.
[17]
(b)
whether
the applicant, as an organ of state, may rely on the Bill of Rights
in claiming the relief that it seeks. Given the judgment
in
State Information Technology Agency SOC Limited v Gijima Holdings
(Pty) Ltd
[18]
that fundamental rights are meant to protect warm-bodied human beings
primarily against the state, there may be merit in the first
respondent’s assertion that the applicant is not entitled to
rely upon the Bill of Rights. The matter is, however, capable
of
being resolved on the facts without reference to the issue of the
Bill of Rights; and
(c)
whether in conducting itself as it has, the applicant has repudiated
the contract. Given the finding arrived
at, there is no need to
resolve this assertion by the first respondent.
Summation
[45]
Regard
being had to the fact that whether something is immoral or not is a
question of fact, sufficient facts must be advanced if
a declaration
that the enforcement of the time-limitation clause is
contra
bonos mores
or contrary to public
policy is to be made. The applicant’s founding papers, in which
it is required to make its case, is
characterised by an absence of
facts. There is simply no evidence to satisfactorily explain why the
applicant could not have complied
with the time-limitation clause.
[46]
On
the facts disclosed, such as they are, there is nothing that commends
itself as being immoral or contrary to public policy. Right
thinking
members of the community would require organs of state such as the
applicant to be diligent and vigilant in the performance
of their
contractual obligations. Those entrusted with the legal work of the
applicant are required to conduct themselves in a
professional manner
and to use their best endeavours to protect the interests of their
employer.
[47]
In
my view, in advancing the version that it has in the manner that it
has, bereft of any real detail, the applicant has not discharged
the
onus that it bears.
It may be perceived that the result is harsh. A court, however, may
not refuse to enforce contractual terms on the basis that the
enforcement would, in its subjective view, be unfair, unreasonable or
unduly harsh.
[19]
These
abstract values have not been accorded autonomous, self-standing
status as contractual requirements. This is, moreover, on
the facts
disclosed by the applicant not a clear-cut case where the court
should intervene and strike down the enforcement of the
time-limitation clause.
[48]
The
argument raised by the applicant concerning the COVID-19 pandemic is
not a unique one. A similar argument was raised in the
matter of
Bulldog
Abrasives Southern Africa (Pty) Ltd v Davie and another.
[20]
In that matter, the court was dealing with the enforcement of a
restraint of trade clause. The existence of the COVID-19 pandemic
was
raised as a factor that should persuade the court not to enforce the
restraint of trade on the grounds that to do so would
offend against
public policy. The court stated as follows:
‘
To
suggest that enforcing a restraint in Covid-19 situation is contrary
to public policy is to stretch the meaning of public policy
beyond
what it is supposed to be. As consistently held, public policy
requires that parties to a contract freely entered into to
be bound
by such a contract..’
[21]
In
my view, that reasoning applies equally to the enforcement of
contracts during the COVID-19 pandemic that contain time-limitation
clauses that have been freely entered into.
[49]
Counsel
were agreed that it was not the function of this court to adjudicate
upon whether the decision was correct. It was submitted
that the
court was only to have regard to the decision at the level of whether
the applicant had prospects of success in determining
whether the
relief should be granted. It would appear to me that those prospects
are not strong. A business-like consideration
of the first
respondent’s tender conforms with the finding of the second
respondent. The applicant could not reasonably have
believed the
first respondent would perform all its supervisory services of the
work not performed by it, amounting to 80% of all
the work to be
performed in terms of the contract, for free. The applicant specified
its rate at which it would perform such services,
namely 20%. The
founding affidavit does not reveal the value of that work, and
neither could counsel during argument. This may,
perhaps, be because
that value can only be calculated in relation to work ‘successfully
performed’ by the sub-contractors.
That phrase renders it
possible that some work performed might not be successfully performed
and therefore not capable of attracting
a fee for the first
respondent. But that could not have be known at the time of
tendering. It seems that the only way that first
respondent could
disclose what it would charge is by reference to a percentage. That
is what it did.
[50]
On
the question of costs, Mr Pillay urged for a punitive order against
the applicant on the attorney client scale. After consideration,
it
appears to me that such an order is not called for.
Conclusion
[51]
I
accordingly make the following order:
The
application is dismissed with costs on the party-party scale.
Mossop
AJ
APPEARANCES
Counsel
for the applicant: Advocate
R Choudree SC with Advocate D. Crampton
Instructed
by: Govindasamy,
Ndzingi and Govender
211
Burger Street
Pietermaritzburg
Counsel
for the respondent: Advocate
I. Pillay SC
Instructed
by: Cox
Yeats
Ncondo
Chambers
Vuna
Close
Umhlanga
Ridge
Durban
Date of
Hearing: 28
May 2021
Date of
Judgment: 8
June 2021
[1]
Black’s
Law Dictionary
,
4ed (1968).
[2]
Aquilius "Immorality and illegality in contract"
(1941) 58
SALJ
337
at 344.
[3]
Edouard
v Administrator, Natal
1989 (2) SA 368
(D) at 377H et seq.
[4]
Edouard
v Administrator, Natal
1989
(2) SA 368
(D) at 378.
[5]
Beadica
231 CC and others v Trustees of the Oregon Trust
2020 (5) SA 247
(CC) para 83.
[6]
Sasfin
(Pty) Ltd v Beukes
1989 (1) SA 1 (A).
[7]
Sasfin
(Pty) Ltd v Beukes
at 9.
[8]
Barkhuizen
v Napier
[2007] ZACC 5
;
2007
(5) SA 323
(CC) at para 56.
[9]
Barkhuizen
v Napier
,
para 58.
[10]
Barkhuizen
v Napier
para 58.
[11]
Barkhuizen
v Napier
para
48.
[12]
Mohlomi
v Minister of Defence
1997 (1) SA 124 (CC).
[13]
Mohlomi
v Minister of Defence
para
11.
[14]
Barkhuizen
v Napier
[2007] ZACC 5
;
2007
(5) SA 323
(CC) paras
58,
59 and 65.
[15]
Barkhuizen
v Napier
para
73.
[16]
Although 1 May 2020 was a public holiday, the regulations in GG
43258, dated 29 April 2020, state that lockdown level 4 would
commence on 1 May 2020 (regulation 15).
[17]
Yodaiken
v Angehrn and Piel
1914 TPD 254
at 260.
[18]
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Ltd
2017
(2) SA 63
(SCA).
[19]
Beadica
231
CC and others v Trustees, Oregon Trust and others
2020 (5) SA 247
(CC) para 80
[20]
Bulldog
Abrasives Southern Africa (Pty) Ltd v Davie and another
[2021] ZALCJHB 58.
[21]
Bulldog
Abrasives Southern Africa (Pty) Ltd v Davie and another
para
19.