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[2018] ZAGPJHC 677
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Phambili Environmental Services (Pty) Limited v Pikitup Johannesburg SOC Limited (39499/2018) [2018] ZAGPJHC 677 (6 November 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
39499/2018
In
the application between:
PHAMBILI
ENVIRONMENTAL SERVICES (PTY)
LIMITED Applicant
and
PIKITUP
JOHANNESBURG SOC
LIMITED Respondent
J
U D G M E N T
MAIER-FRAWLEY
AJ:
Introduction
1.
The applicant launched an urgent
application seeking interim relief aimed at protecting its interests,
pending the determination
of the rights of the parties at arbitration
proceedings to be conducted in due course.
2.
A
dispute arose between the parties concerning,
inter
alia,
the
validity of the cancellation by the respondent, on 28 September 2018,
of a written agreement concluded between the parties on
3 November
2017.
[1]
In terms of the
respondent’s letter of termination, the agreement would
terminate at midnight on 31 October 2018.
3.
The
matter was argued in the urgent court on Tuesday the 30
th
October 2018, pursuant to which I was requested by both parties to
deliver an order immediately and to provide reasons therefore
at a
later date.
[2]
Due to the
lateness of the day at the conclusion of arguments, I granted the
following order on 31 October 2018:
“
1. The
matter is urgent.
2. The respondent is interdicted and
restrained from implementing or giving effect to the notice of
termination of the agreement
between the parties, dated 3 November
2017.
3. The parties are directed as
follows:
3.1 The respondent is to give effect
to the agreement and comply with its obligations in terms thereof;
and
3.2 The applicant is to comply with
all its obligations in terms of the agreement.
4. The order in paragraph 3 and
sub-paragraphs thereof, is to operate as an interim interdict with
immediate effect pending:
4.1 the outcome of settlement
negotiations, to be conducted in accordance with the applicable
provisions of clause 13 of the agreement;
and
4.2 the outcome and final
determination of an arbitration on the question of the respondent’s
entitlement to terminate the
agreement and the validity of the
termination, as notified by the respondent on 28 September 2018, (and
the issues and disputes
related thereto).
5. The applicant is to commence the
arbitration by delivery of a written referral to arbitration,
together with a statement of claim,
by no later than ten (10) days
from the date of this order, failing which this order shall ipso
facto lapse.
6. The respondent
is to pay the costs of this application. ”
4.
The order granted was
along the lines of the relief sought by the applicant in its notice
of motion. My reasons for granting the
order appear from what is
stated below.
5.
The respondent opposed
the application
inter
alia,
on grounds
that the applicant had failed to make out a proper case for urgency
and that the applicant in any event had alternate
remedies at its
disposal in the contemplated arbitration, which, so it was contended,
effectively negated its right to interim
relief.
Urgency
6.
The
applicant launched the application on an extremely urgent basis on
Wednesday the 24
th
October 2018, affording the respondent essentially one day in which
to answer thereto.
[3]
The
application was enrolled on Thursday the 25
th
October 2018 for hearing on Tuesday the 30
th
October 2018, in circumstances where all the relevant papers were not
filed by 12h00 on the preceding Thursday, as is required.
7.
In
my view, the applicant’s inability to comply with the practise
directives of this court was properly explained in its affidavits.
Reasons proffered included the fact that the applicant had, upon
obtaining knowledge of the termination of the agreement, made
attempts to contact representatives of the respondent to enquire
about its reasons for wanting to summarily terminate the agreement,
with a view to engaging the respondent in discussions for purposes of
exploring an amiable resolution to the predicament in which
the
applicant found itself, given that the applicant was merely afforded
30 days’ notice of Pikitup’s unilateral termination
of
the agreement, ‘for convenience’, in which agreement the
applicant had extensively invested
[4]
and in respect of which it had incurred substantial expenditure in
setting up the required infrastructure and manpower to service
the
‘Separation at Source Programme’ (‘S@S’)
forming the subject matter of the agreement. When telephonic
attempts
proved fruitless, the applicant addressed a letter to the respondent
on 10 October 2018 in which it declared a dispute
in terms of clause
13 of the agreement. The respondent was called upon to respond to the
notice by no later than 18 October 2018,
which it failed to do either
on or before 18 October 2018, or at all.
8.
It
was submitted on behalf of the applicant that it had acted reasonably
and responsibly in attempting to engage the respondent
in discussions
and negotiations which, had the respondent not flatly ignored the
invitation, could well have avoided the application.
Furthermore, the
dispute resolution process provided in clause 13 of the agreement,
which is obligatory, requires that settlement
discussions between the
parties be held as a necessary precursor to arbitration. The argument
appears,
prima
facie,
to hold merit having regard to the provisions of clause 13.2 of the
agreement.
[5]
9.
The provisions of
clause 13.2 of the agreement aside, the applicant cannot in any
event, legitimately be criticised for attempting
to settle the matter
before resorting to litigation. See:
Transnet
v Rubenstein
2006
(1) SA 591
(SCA) at 603.
10.
As indicated earlier,
the respondent simply ignored the applicant’s letter containing
an invitation to engage in settlement
discussions in terms of clause
13 of the agreement, including its notice therein that should the
respondent not do so by 18 October
2018, it would seek urgent
interdictory relief in court. Had the respondent informed the
applicant at the earliest opportunity
on 11 October 2018 that it was
unwilling to engage the applicant in discussions, more time for the
filing of affidavits in the
matter would have been available to the
parties. Instead, the respondent was content to sit back and let the
time period stipulated
in the letter run its course. In these
circumstances, it does not behove the respondent to raise a complaint
about the resultant
state of affairs in which it too had a part to
play.
11.
In my view, it cannot
either be said that the applicant unduly delayed in launching the
application after the 18
th
October 2018, considering that it did so within 4 working days
thereafter.
12.
As
was pointed out by Notshe AJ in
East
Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite (Pty) Ltd
and Others,
[6]
an
applicant
is
required in terms of the rules of court, to set out the circumstances
which he avers renders the matter urgent and more importantly,
he
must state the reasons why he claims that he cannot be afforded
substantial redress at a hearing in due course, that is, if
the
matter were to be heard on the ordinary opposed motion court roll.
The rules allow the court to come to the assistance of a
litigant
because if the latter were to wait for the normal course laid down by
the rules he will not obtain substantial redress.
As Notshe AJ
further pointed out, ‘substantial redress’ is not
equivalent to ‘irreparable harm’ that is
required before
the granting of an interim relief. It is something less. An applicant
may therefore still obtain redress in an
application in due course
but it may not be substantial. Whether an applicant will not be able
to obtain substantial redress in
an application in due course will
ultimately be determined by the facts of each case.
13.
Having
regard to the facts
in
casu
,
urgency is informed principally by the respondent’s refusal to
take part in the contractual dispute resolution procedures
and
mechanisms provided in clause 13 of the agreement; the fact that the
respondent, by its conduct aforesaid, appears intent on
carrying into
effect the decision to terminate the agreement; the fact that the
respondent considers 31 October 2018 to be the
last day of the
agreement; the fact that a summary termination of the agreement on 31
October 2018 will expose the applicant to
an unsustainable wage bill
and other calamitous consequences;
[7]
and the fact that a hearing of this application in the normal course
may take some months to eventuate, by which time the respondent’s
decision to terminate would have been implemented and given effect
to. In that event, the evidence tendered by the applicant tends
to
support the conclusion, namely, that it would be very difficult, if
not impossible, to undo the adverse financial effects of
the
termination on the business of the applicant, more particularly, when
regard is had to the provisions of clause 9.1.3 of the
agreement.
[8]
14.
In these circumstances,
I considered that a proper case for urgency was made out.
Merits:
Should an interim interdict be granted?
15.
The
respondent contended that whilst the relief is phrased as interim
relief, ‘it is far more wide ranging and final in effect,
and
the
Plascon-Evans
rule
[9]
thus applies’. I
do not agree. An expedited arbitration process is provided for in
clause 13 of the agreement, which means
that a final decision can be
obtained at arbitration within a few months, subject to purposeful
co-operation between the parties.
The applicant gave an unequivocal
undertaking at the hearing of the urgent application that the
arbitration will be expedited,
and, no reasons were advanced by
either party to dispel the notion that it could be concluded by the
latest, end January 2019.
The applicant was happy for a date of
finalisation of the arbitration to be incorporated in the court
order, whilst the respondent
was not. Ultimately, the conduct of the
arbitration is a consensual endeavour and it is to the advantage of
both parties to execute
the necessary arrangements with such
promptness as the exigency of the case requires. Moreover, no appeal
process is provided for
in the arbitration clause (clause 13) of the
agreement.
[10]
16.
The
application, broadly speaking, is aimed at obtaining interim relief
which will preserve the
status
quo,
pending
the final resolution of the disputes in accordance with the dispute
resolution process provided for in clause 13 of the
agreement. For
the sake of brevity, I will not quote clause 13 but it can be said
that it is a wide ranging affair, providing
a mechanism for resolving
disputes which may arise between the parties in connection with
inter
alia,
the
existence of the agreement, the interpretation or application of the
provisions of the agreement, the parties’ respective
rights
and/or obligations in terms of and/or arising out of the agreement
and/or the validity, enforceability, termination or cancellation,
whether in whole or in part, of the agreement.
[11]
17.
The requirements for a
mandamus of the nature sought in this application are the same as the
requirements for an interim interdict.
These are, in turn, well known
and simple. The requirements were stated as follows by Corbett J (as
he then was) in
L F
Boshoff Invesmentss (Pty) Ltd v Cape Town Municipality
1969 2 SA 256
(C) at 267A-F:
"
Briefly
these requisites are that the applicant for such temporary relief
must show -
(a) that the right which is the
subject-matter of the main action and which he seeks to protect by
means of interim relief is…
prima facie
established,
though open to some doubt;
(b) that, if the right is only
prima
facie
established, there is a well-grounded apprehension of
irreparable harm to the applicant if the interim relief is not
granted and
he ultimately succeeds in establishing his right;
(c) that the balance of convenience
favours the granting of interim relief; and
(d) that the
applicant has no other satisfactory remedy
."
18.
In demonstrating a
prima facie
right, though open to some doubt, the applicable test is as stated in
Simon NO v Air Operations of
Europe AB and Others
[1998] ZASCA 79
;
1999 (1) SA 217
(SCA) at paras 21 & 22, where the following was said:
“
Insofar
as the appellant also sought an interim interdict
pendente
lite
it
was incumbent upon him to establish, as one of the requirements for
the relief sought, a prima facie right, even though open
to some
doubt (Webster v Mitchell 1948(1) SA 1186 (W) at 1189). The accepted
test for prima facie right in the context of an interim
interdict is
to take the facts averred by the applicant, together with such facts
set out by the respondent that are not or cannot
be disputed and to
consider whether, having regard to the inherent probabilities, the
applicant should on those facts obtain final
relief at the trial. The
facts set up in contradiction by the respondent should then be
considered, and if serious doubt is thrown
upon the case of the
applicant he cannot succeed. (Gool v Minister of Justice and Another
1955(2) SA 682 (C) at 688 B - F and the
numerous cases that have
followed it).
”
19.
In matters of this
nature, the balance of convenience is often seen to be the overriding
requirement.
Prima facie right
20.
The
right is only required to be
prima
facie
,
though open to some doubt. It need not be clear.
[12]
21.
It
is argued on behalf of the applicant that, properly interpreted,
[13]
the provisions of clause 9.1.1
[14]
of the agreement (dealing with termination of the agreement ‘for
convenience’) do not override the provisions of clause
9.4
[15]
of the agreement, and that termination ‘for convenience’,
‘at any time’ and in the respondent’s ‘sole
discretion’ (as contended for by the respondent), is not only
prima
facie
at
variance with the provisions of clause 3 of schedule 1,
[16]
but the implementation of clause 9, in the manner that the respondent
seeks to do, will also yield an absurd result and render
clause 3 of
schedule 1 nugatory. Further arguments in regard to an alleged tacit
renewal of the agreement and the respondent’s
alleged
repudiation consequent thereupon, are contained in paragraph 13 of
the applicant’s heads of argument dated 29 October
2018 and
will not be repeated herein.
22.
From
what has been stated by the respondent in the answering affidavit, it
decided that the S@S programme was not cost effective,
hence its
decision to terminate the agreement under the provisions of clause
9.1.1 thereof on 28 August 2018, that is, at a time
that was just
short of the one year mark of implementation of the project. However,
as submitted on behalf of the applicant during
oral argument at the
hearing of the matter, what makes what was ‘convenient’
in January 2018, less ‘convenient’
in August 2018,
considering that the same payment rate applied in respect of the same
services that were being rendered during
the aforesaid period? This
has not been answered in the application. It does
prima
facie
lend
credence to the argument that the notion of ‘convenience’
ought not to be measured against the subjective whim
of the
respondent’s representatives, but ought to be objectively
ascertainable, bearing in mind the following factors (which
were are
not seriously disputed or gainsayed by the respondent): the
applicant’s performance was not said to be unsatisfactory
as at
the date of the letter of termination; the agreement was not
cancelled as a result of any breach of its terms by the applicant;
the applicant was instructed to increase its participation quotas in
May 2018 and evidently it did so; moreover, if the project
was cost
effective to the respondent at inception of the project,
[17]
then it begs the question as to why is it not cost effective now?
[18]
23.
It was submitted on
behalf of the applicant that the question of the proper
interpretation of “termination for convenience”
under
clause 9 of the agreement is similarly a matter that ought to be
tested on arbitration and that this, of itself, justifies
the relief
sought. I am inclined to agree. The arguments in support of this
contention are contained in paragraphs 16 and 17 of
the applicants
heads of argument dated 30 October 2018 and for the sake of brevity,
will not be repeated herein. Suffice it to
say that
prima
facie,
the
interpretation contended for by the applicant is the most reasonable
and businesslike one for purposes of making a decision
in these
proceedings. It accordingly follows that I am of the view that a
prima facie
right has been established in these proceedings. I refrain from
finally pronouncing on the subject, as in my view, it is
not
necessary to do so in order to decide, firstly, whether or not a
prima facie right has been established by the applicant and,
secondly, such a final pronouncement would in any event usurp the
functions of the final arbiter on the subject, such as the clause
13
arbitration body.
Well
grounded apprehension of irreparable harm, balance of convenience and
no satisfactory alternate remedy.
24.
The
evidence contained in the applicant’s affidavits traverses the
catastrophic results that will ensue if the contract were
to be
summarily terminated on 31 October 2018. I have earlier touched on
the evidence contained in the founding affidavit and in
annexure
‘VCH3’ at page 66-67 of the papers. Further details and
particulars were provided in the replying affidavit.
Suffice it to
say that the evidence proffered establishes, in my view, that the
applicant’s apprehension of irreparable harm
is reasonable and
justified and that interim relief is accordingly necessary to protect
the applicant’s interests (and to
prevent the onset of the
apprehended harm). That the harm that would follow, is irreparable
(in the event that interim relief is
not granted), has been
established on the undisputed evidence before me. The applicant will
be unable to recover anything towards
the massive investment it has
made towards the S@S programme and moreover, its employees including
the informal sector workers
it supports and sustains within its staff
complement, will likely lose their employment, and costs associated
therewith would never
be recoverable.
[19]
.
25.
It
follows too that the applicant has no suitable alternate remedy at
its disposal to secure urgent interim relief to preserve the
status
quo
pending
the proper ventilation and resolution of their disputes (in the
agreed manner in terms of clause 13 of the agreement).
[20]
The interim interdict is in any event required to ensure that the
intended process itself is not rendered meaningless.
26.
Whilst
the respondent criticised the applicant for providing additional
specifics in the replying affidavit, I do not consider that
in doing
so, a new case was sought to be made out in reply. Moreover, to
borrow from the words of Leach JA in
Lagoon
Beach Hotel v Lehane,
[21]
“
[T]he
appellant, as respondent
a
quo,
did
not seek to avail itself of the opportunity to deal with the
additional matter …set out in reply, and I see no reason
why
these allegations should therefore be ignored.
”
27.
In the result, I have
come to the conclusion, and I find, that the required well-grounded
apprehension of irreparable harm has been
properly established by the
applicant.
28.
As regards the balance
of convenience, the applicant submits that nothing will be expected
of the respondent, other than to conduct
itself in accordance with
the agreement, as before, and this, temporarily, until the issue of
the validity of its purported termination
thereof is finally
determined. I am inclined to agree. The respondent will receive the
same services that it contracted for during
the operation of the
interim order, at the same price. For as long as the applicant
renders satisfactory services, the respondent
will be required to pay
therefore. The only variable concerning payment relates to volumes of
collection in the sense that if lower
volumes are attained, the
applicant receives lower pay and/or may be subject to the imposition
of penalties as provided for in
the agreement.
29.
As appears from a
reading of the agreement, the respondent was happy to contract on the
basis and understanding that the agreement
would remain in force for
three years, all things being equal, that is, subject to satisfactory
performance by the applicant and
its ultimate compliance with the
provisions of the agreement. To delay the implementation of the
ostensible termination for a limited
period of, at most, a few
months, cannot seriously be suggested to cause any sort of prejudice
to the respondent.
30.
Even if the respondent
were to ultimately succeed on arbitration, it will not have suffered
no real prejudice in the sense that
it will continue to obtain value
for its money. Conversely, should the applicant not have the
protection of an interim order, but
ultimately succeed on
arbitration, the prejudice it will suffer will likely be irreparable
and irreversible. Even though the arbitrator
has jurisdiction under
the provisions of clause 13.8.2 to grant provisional or interim
relief, should the relief sought in this
court at this juncture not
be granted, by the time the arbitration is heard, the very harm which
this application is intended to
prevent, will likely have manifested.
The proverbial horse would have bolted.
31.
In my view, there is no
question that the balance of convenience favours the applicant.
I find accordingly.
32.
In these urgent, and,
in my view, desperate, circumstances, I see no alternative remedy for
the applicant to avoid the imminent
catastrophic results that will
likely ensue following a summary termination of the agreement on 31
October 2018.
33.
The
granting of an interim interdict is a discretionary remedy.
Prest
,
[22]
at 79, puts it as follows:
"
In
every case of an application for an interdict
pendente
lite
the court has a discretion whether
or not to grant the application.
"
34.
In my view, this was a
proper case for exercising my discretion in favour of the applicant.
35.
As regards the question
of costs, after due reflection, I came to the conclusion that the
costs should follow the result, in line
with the normal approach. No
arguments to the contrary were submitted to me.
_________________
MAIER-FRAWLEY
AJ
Date
of hearing: 30th October 2018
Judgment
delivered: 6 November 2018
APPEARANCES:
Counsel
for Applicant: Adv
.
AJ Daniels SC
Attorneys
for Applicant: Logan NaidooAttorneys
Counsel
for Respondent: Adv. Z. Ngwenya
Attorneys
for Respondent: Mncedisi Nodlovu & Sedumedi Attorneys
[1]
The parties concluded a ‘
Separation
of Recyclable Waste “At Source” Services Agreement’
(‘the agreement’) for the provision, by the applicant, of
services pertaining to the collection of recyclable waste
from all
targeted households within certain contracted targeted areas as
outlined in the agreement. In terms of schedule 1 thereof,
the
commencement date of the services was 1 October 2017. The contract
period was for 3 years, commencing from the commencement
date with an
initial period of 12 months and the other 24 months renewable on an
annual basis,
subject
to satisfactory performance.
[2]
This was necessitated by virtue of the respondent’s refusal to
provide any undertaking to extend the termination date of
the
agreement beyond 31 October 2018.
[3]
The papers were however sent to the respondent under cover of an
email on 24 October 2014 when service of the issued application
by
the Sherriff proved impossible, due to a power failure at the
respondent’s premises, which resulted in employees of
the
respondent vacating the premises.
[4]
The applicant’s papers indicate
inter
alia,
that the applicant
invested approximately R7 million in establishing a state of the art
recycling centre to support Pikitup with
the recycling at source
project in the Midrand region, where it employs approximately 50
personnel and purchases materials from
approximately 75 reclaimers.
Full time personnel are also deployed for effective communication,
awareness, local media coverage,
working with councillors, body
corporates, Facebook and pamphlet dropping including schools.
As
is apparent from the preamble to the agreement, Pikitup wished to
contract with a service provider that offered a complete
services
package, including, but not limited to, staff, vehicles, recycling
bags, access to or ownership of sorting facilities
and weighbridges,
SMME and Reclaimers empowerment and development, and door to door
education and awareness to rollout S@S in
the targeted areas
over
a period of three years
. (own emphasis)
[5]
Clause 13.2
reads as follows:
“
13.2 If a Dispute arises
between the Parties then such Dispute shall be submitted, in
accordance with this clause 13:
13.2.1
in the first instance
,
to the Managing Director or Chief Operating Officer of the Parties
(or person in the equivalent position), as appropriate, for
resolution; and
13.2.2
failing resolution by the
Managing Directors of Chief Operating Officers, to arbitration
.”
(own emphasis)
[6]
[2012] JOL
28244
(GSJ) at paras 6 and 7.
[7]
The applicant would either have to pay its employees and informal
sector participants in the S@S programme, who were employed
by it to
perform the services under the project, without being able to render
the contractual services and thereby generate an
income therefrom,
or it would have to retrench them with concomitant costs to the
applicant and loss of employment to the workers.
It would thus
have
lost out on income for the time taken to bring the arbitration to
finality whilst still having to carry the cost of its manpower
and
infrastructure without the protection of these interests by way of
interim relief.
[8]
C
lause
9.1.3 reads as follows:
“
The Service Provider is not
entitled to any compensation as a result of this clause 9, including
any consequential costs, losses
or damages. ”
[9]
Plascon-Evans Paints Ltd v
Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A). Under the Plascon-Evans rule, relief may only be
granted if the facts as stated by the respondent, taken together
with the
admitted facts in the applicant’s affidavits, justify
the granting of such relief.
[10]
Clause
13.8.3 of the agreement provides for a process of expedited
arbitration. Clause 13.8.4 provides that the award of the arbitrator
shall be final and binding and not subject to appeal.
[11]
See: caluse 1.1.12 of the agreement which provides a definition of
“dispute” as referred to in clause 13 of the agreement.
In terms of clause 13.8.2, the arbitrator is empowered to decide
upon the arbitrator’s own jurisdiction and the scope of
any
dispute (dispute being defined in clause 1.1.12) referred to the
arbitrator.
[12]
City of
Tshwane Metropolitan Municipality v Afriforum and Another
2016 (6) SA 279
(CC) at para 50.
[13]
i.e., interpreted in context (without disregarding the remaining
contractual provisions) and in accordance with the purpose of
the
agreement, as is the accepted approach to interpretation, in which
regard, see:
Endumeni
Municipality v Natal Joint Municipal Pension Fund
2012
(4) SA 593
(SCA);
Bothma-Batho
Transport (Pty) Limited and Another v Nedbank Limited
2014 (2) SA
494
(SCA), para 12. See too:
Novartis
v Maphil
2016
(1) SA 518
(SCA) at paras 24-31 where Lewis JA affirmed what was
said by Lord Clarke in.
Society
of Lloyd’s v Robinson
[1999]
1 All ER (Comm) at 545, 551, where it was stated that:
“
Loyalty
to the text of a commercial contract, instrument, or document read
in its contextual setting is the paramount principle
of
interpretation. But in the process of interpreting the meaning of
the language of a commercial document the court ought generally
to
favour a commercially sensible construction. The reason for this
approach is that a commercial construction is likely to give
effect
to the intention of the parties. Words ought therefore to be
interpreted in the way in which the reasonable person would
construe
them. And the reasonable commercial person can safely be assumed to
be unimpressed with technical interpretation
s
and undue emphasis on niceties of language
.”
[14]
Clause 9.1.1 reads as follows: “Notwithstanding any other
provision of this Agreement and subject to clause 9.1.2 below,
Pikitup may at any time and at it sole discretion terminate this
Agreement by giving 30 days’ written notice to the Service
provider.’
Clause
9.1.2 prohibits termination under clause 9.1.1 within the first 3
months of the commencement date of the agreement.
[15]
Clause 9.4.2 provides as follows: “Termination of the
Agreement shall not prejudice or affect the accrued rights or claims
and liabilities of the Parties.”
[16]
C
lause
3 of schedule 1 stipulates that the agreement would remain in effect
for 3 years, renewable annually for a further two years,
subject
only to ‘satisfactory performance’ on the part of the
service provider. Having regard to the provisions of
clauses ‘D’
and ‘E’ of the preamble to the agreement, the intended 3
year contract period provided in
clause 3 of schedule 1 noticeably
informs the applicant of what the financial implications of the
agreement would be and of what
capital investment would be required
to render performance under the agreement.
[17]
Evidenced by its acceptance of the applicant’s tender/bid to
perform the services at accepted rates over a three year period.
[18]
In terms of clause “D” of the preamble to the agreement
(at p.29 of the papers), it is recorded that the respondent
‘wishes
to contract with a service provider that offers a complete services
package’ and then goes on to list the
respondent’s
expectations of plant, equipment and manpower that the service
provider should have at its disposal. In clause
“E”
thereof (at p. 29), it is recorded that the service provider ‘must
have the capacity to offer to [the respondent]
a complete services
package’. In clause 3 of schedule 1 (at p. 54 of the papers),
the intended three year period informs
the applicant of what the
financial implications of the agreement would be and of the capital
investment that would be required
to render performance under the
agreement. The respondent was likewise informed of the cost
implications of the three year project
when entering the agreement.
[19]
See fn 7 above; Furthermore, an action for loss of profits or other
special damages has been excluded in terms of clause 11.1.1
of the
agreement. Under the provisions of clause 11.3 of the agreement, any
compensation found to be due by one party in favour
of the other in
respect of liability under the agreement, is limited to a maximum of
30 % of the contract value. This provides
cold comfort if the
applicant’s business in relation to the S@S programme were to
close down, with concomitant loss of
employment to its workers and
resultant inability to recover anything towards the capital
investment and outlay thus far made
to support its performance under
the agreement. The applicant’s employs employees who are the
primary bread winners of
their families. The evidence suggests that
all the workers depend on the continued operations of the applicant
for their survival.
It is not difficult to imagine that if the
applicant summarily ceases operations, the economic repercussions
for the workers
and their families will be devastating.
[20]
In terms of clause 13.11, the parties agreed that ‘Nothing in
this clause 13 shall preclude either party from seeking urgent
interim relief not otherwise provided for herein…and to this
end the Parties hereby consent to the jurisdiction of the
High Court
of South Africa, Gauteng Local Division, Johannesburg.’
[21]
2016 (3) SA 143
at 152 I.
[22]
Prest
The
Law and Practice of Interdicts
,
which is considered to be an authoritative work on the subject.