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[2020] ZALMPPHC 73
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Road Agency Limpopo SOC Limited v Matla Consultants CC and Another (5103/2018) [2020] ZALMPPHC 73 (31 August 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO DIVISION,
POLOKWANE)
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO THE
JUDGES:
YES
/NO
(3)
REVISED.
CASE
NO: 5103/2018
In
the matter between:
ROAD
AGENCY LIMPOPO SOC LIMITED
APPLICANT
and
MATLA
CONSULTANTS CC
FIRST RESPONDENT
AXTON
MATRIX CONSTRUCTION CC
SECOND
RESPONDENT
JUDGMENT
MAKGOBA JP
[1]
This is an application wherein the Applicant (hereinafter referred to
as “Second Defendant”)
seeks an order in terms of Rule
33(4) for the separation and prior determination of two issues as
raised by it in its Plea to the
Plaintiff’s particulars of
claim in an action for contractual
alternatively
delictual damages (the “main action”) which the
Respondent (hereinafter referred to as “Plaintiff”)
had instituted against it in this Court on 22 August 2018. Second
Defendant also seeks an order that the main action against Second
Defendant be stayed, pending the final determination of the proposed
separated issues.
[2]
In essence the Second Defendant seeks an order directing that
2.1.
various issues arising between it and the Plaintiff be separated for
prior
determination
in terms of Rule 33(4) of the Uniform Rules of Court; and
2.2.
further proceedings as between the Plaintiff and the Second Defendant
be
stayed pending the final determination of the separated issues.
[3]
The issues between the Plaintiff and the Second Defendant arise out
of a construction contract,
the terms of which are largely regulated
by the General Conditions of Contract for Construction Works, 2010
(“the GCC”).
[4]
In its plea to the Plaintiff’s particulars of claim, the Second
Defendant raised various
defences, including the following special
pleas:
4.1.
The Plaintiff’s claims arising out of the GCC are time-barred
as a result of the Plaintiff’s
failure to comply with the
claims procedure under the GCC. The Second Defendant contends that
the Plaintiff has failed to comply
with the notice procedure set out
in clause 10 of the GCC and is thus time-barred.
4.2.
Any disputes between the Plaintiff and the Second Defendant arising
out of or in connection with the GCC
are to be resolved through the
dispute resolution mechanism prescribed under clause 10. The Second
Defendant contends that any
disputes between the two parties ought to
be referred to adjudication.
4.3.
In its second special plea the Second Defendant asserts that with
full knowledge of its rights the Plaintiff
elected not to proceed
with the action against the Second Defendant and that it has
accordingly waived its rights to do so. In
the circumstances the
Second Defendant asserts that the Plaintiff is not entitled to persue
any claim which it might have against
the Second Defendant.
This
is the defence of
pactum
de non petendo
or waiver.
The
Issues
[5]
The Second Defendant contends that the issue to be determined in this
application is not whether
or not the Second Defendant’s
defences are good. It is whether, if the two special pleas are
determined in favour of the
Second Defendant, that the
lis
as
between the Plaintiff and the Second Defendant would come to an end.
I
agree. However, the main issue to be determined is whether there is
any justification to separate the issues in terms of Rules
33(4) as
claimed by Second Defendant.
[6]
The Second Defendant contends further that what this case will not
require is a prolonged litigation
(which would include extensive
discovery) in which the Second Defendant is compelled to incur
unnecessary expenses, when its special
pleas could have been disposed
of without such expenses.
This
aspect will be considered against the legal principle that when
considering separation of issues, the Court should take into
consideration that it is not only for the convenience of any one of
the parties or of the Court, but the convenience of all concerned
that must be taken into consideration.
[7]
The high water-mark of the Plaintiff’s case in opposing this
application is captured in
paragraphs 3.14.4 and 3.14.6 of the
answering affidavit.
In
paragraph 3.14.4 it is stated:
“
Second
Defendant followed an extremely technical approach in its plea, by
relying on numerous technical defences, such as the two
special pleas
which relate to non-compliance with dispute resolution provisions by
the Plaintiff….. as well as a reliance
on an alleged
undertaking given by the Plaintiff’s attorneys in an e-mail
dated 17 May 2018, not to proceed with an action
against Second
Defendant”
.
In
paragraph 3.14.6 the Plaintiff stated:
“
However,
it is common knowledge between all the parties involved, and that
also appears from the report of the engineer (which is
attached
hereto as annexure RAL 17 to Annexure MM2) that apart from the
technical defences raised by the Second Defendant that
Second
Defendant is of the view that First Defendant, the engineer, is to
blame for the deficiencies in the road, because the engineer
(First
Defendant) had allegedly provided the Second Defendant with defective
designs or instructions in respect of certain of the
construction
works, and that the instructions given by the First Defendant to
Second Defendant were also defective
”.
[8]
In essence the Plaintiff opposes the application for a separation and
submits that the intricate
and interwoven questions of law and fact
pertaining to the two special pleas cannot conveniently be decided
separately, as envisaged
in Rule 33(4) before evidence is led in the
main action, and that, issues involved cannot be decided separately,
without the involvement
of the First Defendant’s evidence.
The
Plaintiff furthermore submits that the determination of the issues
between Plaintiff and Second Defendant are inextricably interwoven
with the issues between Plaintiff and First Defendant, and cannot be
decided without First Defendant partaking in such a separate
issue
hearing. The large parts of evidence on a separated issue will have
to be repeated again in the case against First Defendant
even if and
when Second Defendant falls out of the main action.
Factual
Background
[9]
Plaintiff during 2014 appointed Second Defendant as the contractor,
and First Defendant as the
responsible engineer, to do the upgrading
from gravel to tar, of part of the D3537 Road in the Limpopo
Province. Second Defendant
was paid about R 108 Million for the
project, and First Defendant was paid about
R
14 Million for the project.
[10]
In November 2016 the First Defendant certified that the project had
reached practical completion, subject
to the Second Defendant
remedying 17 defects in relation to the road works, set out in a snag
list by First Defendant. During December
2016 when the First
substantial rains fell, it became evident that in addition to the 17
defects referred to in the First Defendant’s
snag list, it was
the situation that the vertical alignment of the road was incorrect,
causing the road to flood at numerous spots
during rain.
[11]
For the situation the Second Defendant blamed the First Defendant who
had been responsible allegedly for
incorrectly designing the road,
and First Defendant in turn blamed the Second Defendant, who had
constructed the road. First Defendant
alleged that Second Defendant
had abandoned the project, and the site, and had refused to perform
any works or services between
late November 2016 / December 2016 and
therefore refused to issue a certificate of completion.
[12]
Despite numerous written communications and negotiations between the
parties they were unable to resolve
their disputes about the
deficient road, and their relationship broke down irretrievably.
Plaintiff, due to the disputes between
the First Defendant who was
the responsible engineer, and the Second Defendant who was the
responsible contractor, and the irretrievable
breakdown of the
relationships between the parties, appointed an independent firm of
engineers to advise the Plaintiff about the
deficiencies in the road,
who then on 30 July 2017 reported to Plaintiff that there were
numerous deficiencies found by them in
the constructed road, and that
the reasonable and necessary costs for remedial works amount to about
R 64.9 Million.
[13]
From January 2017 onwards various meetings were held and letters
exchanged between the Plaintiff and Second
Defendant, either by the
officials of these parties, or as represented by their attorneys, to
resolve their issues, which included
the Plaintiff’s refusal to
pay the retention money held back by Plaintiff. These negotiations
(which Plaintiff always averred
were without prejudice) however
derailed, and on 22 August 2018 Plaintiff issued summons against
First Defendant and Second Defendant
in the main action, claiming
damages from the First and Second Defendants in the amount of R 64.9
Million.
The
Applicable Legal Principles
[14]
Rule 33(4) of the Uniform Rules of Court provides that:
“
If,
in any pending action, it appears to the court mero motu that there
is a question of law or fact which may conveniently be decided
either
before any evidence is led or separately from any other question, the
court may make an order directing the disposal of
such question in
such manner as it may deem fit and may order that all further
proceedings be stayed until such question has been
disposed of, and
the court shall on the application of any party make such order
unless it appears that the questions cannot conveniently
be decided
separately
”
.
[15]
It is trite that the word “convenient” in the context of
Rule 33(4) conveys not only the notion
of expeditious disposal of
litigation, but also the notion of appropriateness and fairness. In
the present case it is not the convenience
of the Second Defendant
alone, which should be considered by the Court or the convenience of
the Court itself, but also the convenience
of other parties
concerned, that is Plaintiff and First Defendant.
In
Tshwane
City v Blair Athol Homeowners Association
[1]
the Supreme Court of Appeal held that issues are to be separated
under Rule 33(4) only after careful thought to the implications
of
doing so, and not where the issues are inextricably linked to other
issues and that any order of separation is also to carefully
circumscribe the issue or issues to be separated.
[16]
Citing with approval
DE Van Loggerenberg Erasmus Superior Court
Practice (2016) 2ed at D1 – 436
the SCA stated the
following:
“
[49]
In De van Loggerenberg Erasmus Superior Court Practice (2016) 2ed at
D1
– 436, the author states the following:
“
The
entitlement to seek the separation of issues was created in the rules
so that an alleged lacuna in the plaintiff’s case
can be
tested; or simply so that a factual issue can be determined which can
give direction to the rest of the case and, in particular
to obviate
the leading of evidence. The purpose is to determine the plaintiff’s
claim without the costs and delays of a full
trial”
[50]
At D1 – 436 opcit the following is stated:
“
The
procedure is aimed at facilitating the convenient and expeditious
disposal of litigation. The word “convenient”
within the
context of the sub rule conveys not only the notion of facility or
ease or expedience, but also the notion of appropriateness
and
fairness. It is not the convenience of anyone of the parties or of
the Court, but the convenience of all concerned that must
be taken
into consideration
”
.
[17]
In
Denel
(Edms) Bpk v Vorster
[2]
the SCA warned repeatedly that when a decision is called for in terms
of Rule 33(4) it should be a carefully considered one, and
that it
should not be assumed that separation will always facilitate
convenient and expeditious disposal of litigation. And even
where the
issues are discrete, the expeditious disposal of litigation is often
best served by ventilating all the issues at one
hearing. A trial
Court must be satisfied that it is convenient and proper to try an
issue separately.
See
also
Consolidated
News Agencies (Pty) Ltd (in liquidation) v Mobile Telephone Networks
(Pty) Ltd
[3]
.
[18]
The Court is obliged to grant the application for separation unless
it appears that the issues sought to
be separated cannot be
conveniently decided separately
[4]
.
It is thus incumbent upon the plaintiff (which is the party opposing
the application for separation) to satisfy the Court that
such an
order should not be granted.
The
convenience to be considered is primarily that of the Court and the
litigants. Convenience in the context does not only connote
facility
or ease or expedience but also appropriateness in the sense that in
all the circumstances it is fitting and fair to the
parties
concerned
[5]
.
[19]
Rule 33(4) confers a wide discretion on the Court and the Court can
decide any question of fact separately
from any other question in
dispute in a case if it is convenient and it thinks is advisable.
See
Vermuelen
v Phoenix Assurance Co Ltd
1967 (2) SA 694
(O)
.
The
function of the Court, in an application in terms of Rule 33(4) such
as the present was stated in
Minister
of Agriculture v Tongaat Group Ltd
[6]
as follows:
“…
the
function of the court in an application of this nature is to gauge to
the best of its ability the nature and extent of the advantages
which
would flow from the grant of the order sought and of the
disadvantages. If, overall, and with due regard to the divergent
interests and considerations of convenience (in the wide sense I have
indicated) affecting the parties, it appears that such advantages
would outweigh the disadvantages, it would normally grant the
application
”.
[20]
In
African
Bank v Soodhoo
[7]
the Court said the following:
“
The
general principle in law would appear to be that notwithstanding the
wide powers conferred on a Court under Rule 33(4) of the
Uniform
Rules of Court it is ordinarily desirable, in the interests of
expedition and finality of litigation, to have one hearing
only at
which all issues are canvassed so that the Court, at the conclusion
of the case, may dispose of the entire matter. Minister
of
Agriculture v Tongaat Group Ltd
1976 (2) SA 357
(D) at 362G –
H, and Denel (Edms) Bpk v Vorster
2004 (4) SA 481
(SCA) (2004) 25 ILJ
659) at 485B – C have reference. In some instances, however,
the interests of the parties and the ends
of justice are better
served by disposing of a particular issue or issues before
considering other issues which, depending on the
result of the issue
singled out, may fall away. (Minister of Agriculture (supra) at
362H)
”.
[21]
The general principles gleaned from the above cited cases may briefly
be summarised as follows. The Court
has a discretion to grant or
refuse an application in terms of Rule 33(4). The overriding
consideration in such applications is
convenience, in a wide sense,
that is to say, the separation must not only be convenient to the
person applying for such separation,
but must also be convenient to
all the parties in the matter inclusive of the Court.
The
determination of such an application requires of the Court to make a
value judgment in weighing up the advantages and the disadvantages
in
granting such separation. If the advantages outweigh the
disadvantages, invariably, the Court should grant the application for
separation. The notion of appropriateness and fairness to the parties
also comes into the question.
[22]
Having briefly set out the general principles to be adopted in an
application for separation of issues in
terms of Rule 33(4), the
question to be answered in this matter is the following: is it
convenient for this Court to grant the
application for separation? To
answer this question it is essential to establish the issues as
defined in the pleadings and the
factual matrix of this case.
Whether
Separation is appropriate
[23]
The Second Defendant came up with a strong argument that if either of
the two special pleas is upheld ,then
that would be the end of the
involvement of the Second Defendant in any claim against it by the
Plaintiff. That might be so, but
this is not the test or the only
consideration. The authorities outlined or dealt with above are clear
that there are other considerations
to be taken into account
when ordering a separation of issues in terms of Rule 33(4).
[24]
It is evident from the analysis of the pleadings in the main action
that the issues between the three parties
cannot be resolved properly
in different forums without fully ventilating those issues
simultaneously in one forum. There is presently
a pending dispute
resolution process / arbitration between Plaintiff and Second
Defendant to the exclusion of the First Defendant.
What the Second
Defendant now desires is a total separate Court action against the
First Defendant only in another forum whilst
the Plaintiff and Second
Defendant proceed in a separate Court action after the separation
sought in this application. At the end
of the day we have three
different processes arising from the parties’ contractual
relationship. It is undesirable in my
view, to have such duplication
of actions arising from the same cause of action.
[25]
From the factual matrix of this case it is clear that the two
Defendants are blaming each other for the alleged
damages suffered by
the Plaintiff and that is why the main action was instituted against
both Defendants despite the dispute resolution
stipulations in the
GCC. In any event the stipulations in the GCC do not govern the
contractual relationship between the Plaintiff
and the First
Defendant.
[26]
In view of the Plea filed by the First Defendant, it is foreseen that
if the Second Defendant now falls out
of the litigation by virtue of
success with the raising of any of its two special pleas, it will
probably be joined back in the
action proceedings by the First
Defendant, who clearly according to its Plea blames the Second
Defendant for the defective alignment
of the road by providing
incorrect designs and instructions to the Second Defendant to
construct the road with.
[27]
It is trite law that in general, where arbitration could lead to a
multiplicity of proceedings due to all
the parties not being covered
by the arbitration agreement (like in the present case) a Court may
refuse to stay proceedings. Where
there are several matters in
dispute and some only fall within the ambit of an arbitration
agreement, and the dispute cannot conveniently
be dealt with
independently, a Court should refuse to stay proceedings
[8]
.
In
Universiteit
van Stellenbosch v J A Louw (Edms) Bpk
[9]
it
was held that where on analysis of the disputes between various
parties raised on the pleadings, it appears that there were grave
conflicts of fact which have been raised, and if these had to be
adjudicated upon in different tribunals, namely the Court and
by an
arbitrator, there was a real danger that tribunals might come to
different conclusions. Accordingly, the cumulative effect
of the
multiplicity of proceedings led to the Court refusing the matter to
be referred to arbitration.
[28]
In my view the following are compelling reasons why a separation of
issues in terms of Rule 33(4) should
not be ordered:
28.1.
The facts of the disputes between Plaintiff, First Defendant and
Second Defendant are interwoven. The facts of the disputes
are
substantially similar and depend upon the determination of
substantially the same questions of law.
28.2.
First Defendant blames Second Defendant for not performing
properly or at all in terms of the construction contract
and the
Second Defendant in turn blames First Defendant for providing Second
Defendant with an incorrect design and instructions.
28.3.
The Plaintiff is not sure whether it is the First Defendant alone
alternatively Second Defendant alone alternatively
both Defendants
who are to blame for the damages suffered by the
Plaintiff and more particular for which part of the
damages suffered
by Plaintiff the First Defendant is liable and for which part the
Second Defendant is liable.
28.4
First Defendant is not contractually obliged to participate in any of
the dispute resolution processes between
Plaintiff and Second
Defendant as envisaged in clause 10 of the GCC.
28.5
It would be inconvenient and expensive for Plaintiff to prepare and
present its case on two occasions, namely in
the proceedings against
Second Defendant and then again in separate Court proceedings against
First Defendant. The two sets of
proceedings will escalate the costs
and duplicate the cost of adjudicators or arbitrators and court
proceedings.
28.6
The issue of whether or not the Plaintiff’s claims are
time-barred (the first Special Plea) cannot be swiftly
and speedily,
in a separate plea, be adjudicated. The determination of the issues
will still involve extensive evidence to
be led in court and a
shortcut cannot just be taken.
Defence
of Waiver (
Pactum de non Petendo
)
[29]
Second Defendant in its second special plea alleges that Ms Mangena,
the Plaintiff’s attorney, on behalf
of the Plaintiff, on 17 May
2018 in an email stated:
“
We
hereby confirm that we will not be proceeding with action against
your client, Axton Matrix.”
The
Second Defendant states that by doing that, Ms Mangena, while being
fully aware of the Plaintiffs rights in terms of the construction
agreement, undertook not to institute action against Second
Defendant.
[30]
Whether the contents of the said email constitutes waiver/
pactum
de non petendo
is a matter of law. In my view the special plea of
waiver is not sustainable:
The
contents of the email does not, in my view, constitute an unequivocal
waiver of Plaintiff’s rights to institute court
proceedings
against the Second Defendant. It will not be worthwhile to separate
issues in this matter in order to deal with the
special plea of
waiver in a separate trial.
[31]
Ms Mangena in her opposing affidavit has set out in great detail that
all the negotiations between her and
Orelowitz attorneys (for Second
Defendant) were in her mind always “without prejudice”
and she refers in her opposing
affidavit in great detail all the
letters which were written with the heading ‘without
prejudice”. It is obvious that
the Second Defendant’s
attorney also regarded the letters as “without prejudice”
and not as a
pactum de non pentendo
. In an email subsequent to
the email of Ms Mangena the attorney for Second Defendant stated:
“
2.
Please note that should your client nevertheless decide to institute
legal proceeding against our
client, service of such process is to be
effected at our offices, our client having duly authorised us to
accept service on its
behalf.”
It
is clear from the above that the Second Defendant and its attorneys
expected legal action to be taken against Second Defendant.
Conclusion
[32]
On the basis of the legal principles considered in this judgment and
taking into consideration the pleadings
and factual matrix in this
case, I make a finding that the Second Defendant did not make out a
case for separation of issues in
terms of Rule 33(4).
A
separation of the two special pleas now, and the separate
adjudication thereof, will not make an end to the litigation between
Plaintiff and Second Defendant and will result only in dealing with
the case in a further piecemeal fashion, by different forums.
It will
also entail a duplication of evidence to be led by Plaintiff, first
during the separated hearing and later again during
the hearing of
the main action.
[33]
In the result, the Second Defendant’s application
for a separation of issues in terms of
Rule 33(4) is dismissed with
costs.
E
M MAKGOBA
JUDGE
PRESIDENT OF THE HIGH COURT, LIMPOPO DIVISION, POLOKWANE
APPEARANCES
Heard
on
: 26
August 2020
Judgment
delivered on
: 31 August 2020
For
the Applicant
: Adv. S Tshikila
(Second
Respondent)
Instructed
by
: Orelowitz Incorporated
Pratt
Luyt & De Lange Attorneys
For
the Respondent
: Adv. D Mills SC
(Plaintiff)
Instructed
by
: Machaba Incorporated
For
First Defendant
: Mr N Bosman
Instructed
by
: Clyde & Co Attorneys
c/o
Bosman Attorneys
[1]
2019 (3) SA 398 (SCA)
[2]
2004 (4) SA 481
(SCA) at para 3
[3]
2010 (3) SA 382
(SCA) at paras 90-91
[4]
Edward L Bateman Ltd v C A Brand Projects (Pty) Ltd
1955 (4) SA 128
(t) AT 132D
[5]
Berman & Fialkov v Lumb
2003 (2) SA 674
(C) AT 680H – I
Braaf
v Fedgen Insurance Ltd
1995 (3) SA 938
(C) at 939G
[6]
1976 (2) SA 357
(D) at 364D -E
[7]
2008 (6) SA 46
(D) at 51B-D
[8]
Valkin v Valkin
1953 (4) SA 510
(W)
PA
Ramsden: McKenzie’s Law of Building and Engineering Contracts
and Arbitration at page 243
[9]
1983 (4) SA 321
(A)