Hawkins Hawkins & Osborn (South) (Pty) Ltd v Enviroserve Waste Management (3/2008) [2008] ZASCA 162; 2009 (4) SA 425 (SCA) ; [2009] 2 All SA 319 (SCA) (27 November 2008)

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Hawkins Hawkins & Osborn (South) (Pty) Ltd v Enviroserve Waste Management (3/2008) [2008] ZASCA 162; 2009 (4) SA 425 (SCA) ; [2009] 2 All SA 319 (SCA) (27 November 2008)

THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case
No: 3/2008
HAWKINS
HAWKINS & OSBORN (SOUTH) (PTY) LTD
Appellant
and
ENVIROSERVE
WASTE MANAGEMENT
Respondent
Neutral
citation:
Hawkins
Hawkins & Osborn v Enviroserve Waste Management (3/2008)
[2008]
ZASCA 162
(27 November 2008)
Coram
:
MPATI
P, CAMERON, MTHIYANE,
HEHER
JJA and MHLANTLA AJA
Heard
:
3
NOVEMBER 2008
Delivered
:
27
NOVEMBER 2008
Summary
:
Contract
– civil engineering – construction of landfill site –
provisions of General Conditions of Contract for Works of Civil

Engineering Construction, 6
th
edition (1990) – whether proper notice given entitling contractor
to claim for additional work – whether engineer breached

contractual obligations towards employer by failing to construe
written communication as proper notice.
_______
______________________________________________________________
ORDER
__________________________________
___________________________________
On
appeal from:
High
Court, Grahamstown Jones J (Schoeman and Dambuza JJ concurring)
sitting as Full Court on appeal from a single judge (Sandi
J).
The appeal is dismissed
with costs, which shall include the costs of two counsel.
JUDGMENT
MPATI
P (CAMERON, MTHIYANE,
HEHER JJA and MHLANTLA AJA concurring):
[1] The
respondent issued summons against the appellant, claiming payment of
the total sum of R2 705 313.25 being damages allegedly
suffered as a
result of an alleged breach of contract. The matter came before the
Eastern Cape Local Division (Sandi J) on a stated
case, the parties
having approached the court for a separation of issues in terms of
Rule 33 (4)
.
The court had to determine two issues only. The first was whether
the appellant had indeed committed a breach of contract. In
the
event of the court finding that no breach of contract had occurred,
the second issue had to be determined, which was whether,
despite the
finding, the particulars of claim still disclosed a valid cause of
action.
If
not, the respondent’s action against the appellant had to be
dismissed in its entirety.
[2] Sandi J found in
favour of the appellant on both issues and thus dismissed the
respondent’s claim with costs. The learned
judge, however, granted
the respondent leave to appeal to the Full Court of the Eastern Cape
Division. The Full Court (Jones J,
Schoeman and Dambuza JJ
concurring) allowed the appeal and reversed the trial court’s
order. This appeal is with the special
leave of this court.
[3] The
statement of agreed facts is fairly comprehensive. It is in my view
not necessary to record it in full. A summary of the
salient facts
will suffice.
[4] During
March 1996 the respondent, which operated a waste disposal site at an
area known as Aloes in Port Elizabeth, resolved
to develop the site
by adding a second waste disposal pit (Aloes II) as the existing
facility had a limited lifespan. It accordingly
engaged the
appellant, a consulting engineering company, to design Aloes II, to
attend to the tender process for its construction
and to administer
and supervise the construction works. After tenders had been
invited, a site inspection was conducted on 8 May
1997. The Schedule
of Quantities, which formed part of the tender documents, provided a
rate for ‘intermediate excavation’
and ‘hard rock excavation’.
For each of these two categories the Schedule provided for 23 826
cubic meters and 47 652
cubic meters of material to be removed
respectively. These were, however, not final figures. Another tender
document provided
that ‘[f]inal quantities on which payment shall
be based will be measured on site’.
[5] The
tender was awarded to Blasting & Excavation/Grassmaster Joint
Venture (the contractor), whose contract price of R8 516
604.66 was
approximately R2 million lower than the other tenderers. The
contractor did not price individually for the ‘intermediate’
and
‘hard rock’ material provided for in the Schedule of Quantities.
It chose to quote a total price for excavation, referred
to in
construction practice as a ‘through rate’. The contractor agreed
to a construction programme of twenty weeks ending
on 15 November
1997; the understanding between the parties being that time was of
the essence of the contract.
[6] A
document headed ‘General Conditions of Contract for Works of Civil
Engineering Construction, 6
th
edition (1990)’ (the GCC), formed part of the tender documents. It
is a standard document sponsored by the Civil Engineering
Advisory
Council and regulates the contractual relationship between employer
and employee, in this case the respondent and the
contractor. Clause
50 of the GCC provides as follows:
‘
(1)
If
during the execution of the Works the Contractor shall encounter
adverse physical conditions (other than weather conditions at
the
Site or the direct consequences of those particular weather
conditions) or artificial obstructions, which conditions or
obstructions
could not have been reasonably foreseen by an
experienced contractor at the time of submitting his tender, and the
Contractor is
of the opinion that additional work will be necessary
which would not have been necessary if the particular physical
conditions
or artificial obstructions had not been encountered, he
shall give notice to the Engineer in writing as soon as he becomes
aware
of the conditions aforesaid, stating
(a) the
nature and extent of the physical conditions and artificial
obstructions encountered, and
(b) the
additional work which will be necessary by reason thereof.
(2) Should
additional or more extensive adverse physical conditions or
artificial obstructions within the meaning of Sub-Clause
(1) be
encountered by the Contractor, he shall give further notices thereof
in terms of Sub-Clause (1).
(3) Unless
otherwise instructed by the Engineer, the Contractor shall carry out
the additional work proposed in the notice or notices
under
Sub-Clauses (1) and (2) without limiting the right of the Engineer to
order a suspension of work in terms of Clause 42 or
a variation in
terms of Clause 39.
(4) If
the Contractor has duly given the notice referred to in either
Sub-Clauses (1) or (2), he shall be entitled, in respect of
any delay
or additional Cost, to make a claim in accordance with Clause 51,
provided that the cost of all work done by the Contractor
prior to
giving the
notice
or notices in terms of Sub-Clauses (1) and (2) shall be deemed to be
covered by the rates and prices referred to in Clause
3(4).’
[7] During
July 1997 the respondent, due to difficulty in the construction of
the pit relating to steepness of the sides, instructed
the appellant
to issue a variation order directing the contractor to vary the
gradient of the side slopes. This would result in
a loss of 35 000
cubic meters of airspace. To counter the loss the variation order,
which was issued on 6 August 1997, provided
for an excavation of an
extra three meters. (The original depth of the pit was 30 meters.)
The contractor did not demand a revision
of rates arising from the
variation order, which it was entitled to do in terms of clause 40
1
of the GCC.
[8] On
5 September 1997 the
engineer
wrote to the contractor in the following terms:
‘
We
have been monitoring progress on a regular basis and must bring to
your attention our concern that production is fa
lling
behind programme.
This
could have an adverse effect on the Lining Contractor and subsequent
beneficial occupation by our Client.
Please
report on the situation and proposals to improve matters at the Site
Meeting to be held on Tuesday 9
th
September 1997.’
This
letter was apparently prompted by the fact that although it had been
reported at a technical meeting on 12 August 1997 that
progress on
the earthworks (load and haul) was ahead of programme by 11 days, the
excavation works had started to slow down significantly
due to
increased hardness of the material.
[9] The contractor did
not wait for the proposed site meeting of 9 September, but responded
by letter dated 8 September 1997, which
reads:
‘
We
acknowledge receipt of your letter dated 5 September re the above.
Progress
to date is as follows:- (As measured against the revised programme
submitted on 27 August 1997).
Situation Comments
Load
& Haul 7 days behind 3 days lost to inclement weather
(7 days ahead of digging conditions have become
original programme) extremely hard due to shale
encountered at the 30 m elevation.
Subsoil
drain 8 days behind This is a variable order which started
late due to waiting for material.
Trim
Side 1 : 1,5 slopes 2 days behind
As
indicated in our site correspondence (No 22 dated 27/8/97) at our
initial meeting with the Resident Engineer it was stated that
the
Lining Contractor would require two occupations of approximately one
week each to install the lining (as reflected in our original

program). We have tried to reprogram the contract in order to give
the lining contractor more time but feel that it is unfair
to expect
us now to accommodate him in week eleven of a twenty week contract.
In
order to catch up with the load and haul we increased our dozing
capacity by adding a D 85 dozer to our team as from the 2
nd
September and plan to start drilling and blasting a large portion of
the estimated 103000m3 of hard shale as from tomorrow.’
At
the site meeting the next day there was discussion concerning the
delays in the excavation.
[10] Blasting
took place on 13 and 17 September 1997. On 19 September 1997 the
contractor wrote to the appellant noting, inter alia,
the following
in the last paragraph of the letter:
‘
We
also wish to take this opportunity to inform you that the rock
encountered at the present level was envisaged neither by yourselves

or ourselves at tender stage. This situation has both cost and time
implications to ourselves.’
On 22 September 1997 the
contractor again wrote to the appellant. The opening paragraph of
the letter reads:
‘
We
wish to, in terms of clauses 39, 40 and 50 of the General Conditions
of Contract, inform you of our intentions to claim for additional

Cost and Time as a result of the unexpected rock (hard mudstone)
excavated at level 30,0m in the main waste disposal pit.
’
The
letter then sets out the calculations for costing the additional work
occasioned by the hard rock and the extra material resulting
from the
new depth of the pit as per the variation instructions of 6 August
1997. As a result of the hard physical conditions
encountered, the
contractor also requested an extension of time of six weeks for the
completion of the contract works.
[11] In
a letter dated 3 October 1997, written in response to the letter of
22 September, the appellant referred to the minutes
of the technical
meeting held on 9 September 1997 and said, inter alia, the following:
‘
No
mention was made of extra payment required and as the tendered rates
for intermediate and hard rock excavation were inclusive
it was
concluded that no extra payment would be required.’
2
The
appellant also referred to clause 40(3)(a)
3
of the GCC and concluded thus:
‘
We
believe the purpose of this
sub-clause is to afford the Engineer (acting on behalf of the Client)
an opportunity to consider financial implications and alternatives
to
obtain the desired outcome.
This
opportunity was not allowed and other courses of action, such as
amending floor levels or seeking permission for relaxation
of Permit
conditions, were not explored.
We
believe the Contractor to be in breach of the sub-clause mentioned.’
[12] After
further correspondence between the appellant and the contractor the
dispute between the latter and the respondent was
referred to
arbitration. The arbitrator was asked to determine three issues, the
relevant one for present purposes being –
‘
whether
the contractor was entitled to additional payment for the work it
executed in having to drill, blast and excavate the hard
material
that it encountered at level 30 and below’.
To
answer this question, the arbitrator was required to consider whether
or not the contractor’s letter of 8 September constituted
proper
compliance with clause 50(1) of the GCC. He held that it did and
ordered the respondent to pay the contractor the sum of
R1 475
865, together with interest and costs. It is the amounts paid
pursuant to this arbitration award that the respondent
now seeks to
recover from the appellant as damages for breach of contract.
[13] The
answer to the question whether the appellant breached its contractual
obligations towards the respondent by not construing
the letter of 8
September 1997 as a notice depends on whether or not the letter
constituted a notice in terms of clause 50(1) of
the GCC. That was
the first issue which the trial court was called upon to consider.
Sandi J found that the letter did not constitute
a notice in terms of
clause 50(1) of the GCC. The Full Court held that it did.
[14] The
enquiry whether
or
not the letter constituted a notice necessarily involves the proper
construction of clause 50 of the GCC. As Jones J in the
court below
points out: ‘The real issue is what precisely clause 50 of the
contract requires in the way of notice to the engineer,
and whether
or not the letter of 8 September measured up to those requirements.’
I did not understand counsel to suggest that
in ascertaining the
common intention of the parties to the contract (ie the respondent
and the contractor),
giving
the words used in the clause their grammatical and ordinary meaning
will result in some absurdity, or repugnancy, or inconsistency
with
the rest of the GCC.
4
In construing the words ‘give notice’ in clause 50 Jones J said:
‘
The
words “give notice” in the law of contract frequently have a
formal connotation, for example when used to terminate services,
or
to vacate premises. But not necessarily. The OED says that the
words mean to intimate, to inform, to notify, to point out.
In
the context of clause 50 it seems to me that a legalistic definition
is quite out of place.
When the clause enjoins the contractor to give the engineer notice
of adverse physical conditions, it requires him to advise
or inform
him about the adverse physical conditions. Simply put, he must tell
him about them. He is not called to compose a formal
legal document
until he makes his claim in terms of section 51.’
5
(My underlining.)
Except
for the underlined sentence, counsel for the appellant did not take
issue with this reasoning. I agree with Jones J that
clause 50 of
the GCC required the contractor to advise or inform the engineer
about the adverse physical conditions (the hard rock
that required
drilling and blasting) and the additional work which will be
necessary as a result of these conditions.
[15] As
to the underlined sentence
,
counsel for the appellant submitted that the reasoning of the court
below fails to take account of clause 50(2),
6
which requires the giving of further notices if additional or more
extensive physical conditions are encountered. Clause 50(2),
said
counsel, envisages the giving of a notice and not simply a
communication in which information is imparted. He accordingly

argued that while certain formalities are prescribed in certain
circumstances, in order to be a notice ‘the document would have
to
convey that the author intended to give notice in terms of a clause
of the contract and not to convey that the author was responding
to
the query of the 5
th
[September]’.
[16] I
shall consider the question of the intention of the author when I
deal with the issue of whether or not the letter of 8 September
1997
constituted a notice in terms of clause 50(1) of the GCC. But
counsel also made reference to clause 1(2) of the GCC
7
and contended that the court a quo failed in its reasoning to take
account of the distinction made in that clause between a ‘letter’

and ‘notice’; that the contract requires notices to be given in
certain circumstances and that these notices are not letters
in which
information may be contained in passing. I do not intend to enter
into a debate on this issue. Suffice it to say that
I can find no
reason why a notice cannot be in the form of a letter, provided that
the letter is so framed as to communicate unequivocally
to the
addressee that the writer is invoking, or relying upon, the
provisions of the contract which provide for the giving of notice.

It may do so expressly or by implication. As I shall explain, the
terms of the final paragraph of the letter of 8 September were
so
closely related to the substance of clause 50(1) that they satisfied
that standard.
[17] Did
the letter of 8 September 1997 constitute a notice in terms of clause
50(1) of the GCC? The clause enjoins the contractor,
upon
encountering adverse physical conditions which could not have been
reasonably foreseen at the time it submitted its tender,
to give
notice to the appellant in writing as soon as it became aware of the
adverse physical conditions. The notice is required
only if the
contractor is of the opinion that additional work will be necessary
which would otherwise not have been. The clause
requires the notice,
in addition to its being in writing, to state two things: (a) the
nature and extent of the physical conditions
encountered, and (b) the
additional work which will be necessary by reason of the physical
conditions. In my view, clause 50 is
clearly meant for the benefit
or protection of the employer (respondent) and, to a lesser extent,
the contractor. It protects
the employer from claims for additional
cost occasioned by additional work done by the contractor without its
being notified that
additional work was necessary. The purpose of
the notice is to afford the employer an opportunity to consider
other, perhaps less
costly, alternatives to deal with the adverse
physical conditions encountered by the contractor. On the
contractor’s side, the
notice enables it to claim additional cost
for additional work done which could not have been considered or
catered for at the
time of tender due to its being unforeseen.
[18] Counsel
for the appellant conceded that the comment referring to hard shale
in, and the final paragraph of, the letter in
question contain such
detail as satisfy clause 50(1)(a) and (b), that is, the information
relating to the nature and extent of
the physical conditions and the
additional work they will necessitate. This, however, is not enough,
according to counsel. He
submitted that the letter did not mention
that the adverse physical conditions were not reasonably foreseen. I
agree with the
court a quo, however, that foreseeability ‘is an
issue that might arise in due course when the validity of the claim
is considered’.
The notice does not have to state that the adverse
physical conditions were not reasonably foreseen. Clause 50(1)
requires the
notice to state only the detail in sub-paragraphs (a)
and (b) and nothing else.
[19] It
was contended on behalf of the appellant that a consideration of the
issue whether the letter in question constituted a
notice in terms of
clause 50(1) involves its (the letter’s) interpretation. That
being the case, so the argument ran, the rules
of interpretation
relating to the admissibility of evidence of background facts
8
and of the contractor’s subsequent conduct
9
should
apply. The court a quo held that the principles of the
interpretation of contracts ‘are irrelevant to whether or not the

letter gave notice’. It said that it was not concerned with the
interpretation of the letter, ie, it was not concerned with
what the
wording of the letter meant, but with whether or not the letter gave
notice. That, the court said, was a question of
fact, not
interpretation. I agree. We are not here dealing with a notice of
cancellation of a contract which needs to be clear
and unequivocal
for purposes of its consequences. There is in any event nothing
unclear or equivocal in the contents of the letter
in question. It
responds to the appellant’s letter of 5 September 1997 and, in
addition, gives the information required by clause
50(1)(a) and (b).
Indeed, as I have mentioned earlier, counsel conceded that the
comment referring to the hard shale in, and the
final paragraph of,
the letter ‘contain such detail as satisfy clauses 50 (1)(a) and
(b)’. It follows that counsel’s further
submissions relating to
the relevance of clauses 3(2), 3(3) and 40 of the GCC as constituting
background information for purposes
of interpretation of the letter
do not require any further consideration.
[20] A
lthough
counsel made the concession just mentioned, he argued that not every
communication which contains the facts referred to
in the sub-clauses
(50(1)(a) and (b)) will necessarily be a notice in terms of the
clause. To be such a notice, he contended,
the communication has to
convey the intention to give a notice. He mentioned certain factors
which he said point to an absence
of intention on the part of the
contractor to give notice in terms of clause 50(1). These are: (a)
that the letter of 5 September
1997 concerned the programming of
works with the result that the programming of the works became the
dominant element in the contractor’s
reply of 8 September; also the
fact that the last-mentioned letter begins with an acknowledgment of
the appellant’s letter of
5 September, which means that the impetus
originating the letter was not a decision to give notice in terms of
clause 50; (b) that
the subsequent conduct of the contractor showed
that at the time the letter was written the contractor did not think
that it was
a notice; and (c) the fact that the letter in question
was not written as soon as possible after the contractor had become
aware
of the adverse physical conditions.
[21] As
to (a), I have already stated that there is no reason why a notice in
terms of clause 50(1) could not be in the form of
a letter. There is
also no reason why it could not be contained in a letter that also
dealt with other matters relating to the
contract. It does not
matter, in my view, whether, in this case, the programming of the
works was the dominant element in the
letter in question. If the
letter complied with the requirements of clause 50(1), a notice has
been given. In relation to (b)
the court a quo said the following:
‘
Either
the letter gave notice or it did not. If it did, what the parties
said or did afterwards is irrelevant. Notice was still
given. If it
did not, nothing the parties said or did afterwards can change
anything . . . . If the letter gave
notice that is
the end of the matter. It does not matter what the writer said he
intended by writing the letter or what his motives
were.’
[22] Counsel
for the appellant criticized this reasoning and submitted that it
flies in the face of the ‘deep-seated principle
in our law that the
purpose of legal interpretation is to discover the intention of the
parties’. He referred to the contractor’s
letter of 10 November
1997, which, he said, justified the claim in terms of clause 51 ‘not
through reference to a notice in terms
of clause 50(1) dated 8
September, but with reference to the letter of 22 September’. In
my view, even if the reasoning of the
court a quo was wrong – and I
am disinclined to hold that it is – counsel’s reading of the
contractor’s letter of 10 November
is in any event erroneous. The
relevant part of the letter reads:
‘
Clause
50 entitles us to submit a claim in terms of Clause 51, the
conditions of which were complied with on our letter of 22 September

1997.’
Clearly
the words ‘the conditions of which were complied with’ qualify
‘clause 51’ and not ‘clause 50’. The letter
of 22 September
could not, and did not purport to, have complied with the
requirements of clause 50(1)(a) and (b). It expressed
an intention
to claim ‘for additional Cost and Time as a result of the
unexpected rock (hard mudstone) excavated at level 30,0m’.
It
expressed an intention to claim for work already done. And the
contractor could only express an intention to claim if it knew
that
it had complied with clause 50(1). That could only have been through
the letter of 8 September 1997 because no other written
notice had
been given to the engineer. The letter of 19 September 1997 in which
the contractor informed the engineer that the hard
conditions were
not foreseen by anyone is in my view evidence of the fact that the
contractor knew that notice of those conditions
encountered and the
additional work required to be done had been given. There is thus
nothing in the contractor’s conduct subsequent
to the letter of 8
September that is inconsistent with an intention to give notice in
terms of clause 50(1) by the letter in question.
[23] The
third factor (mentioned in (c) of para 20 above) that allegedly
points to an absence of intention to give notice in terms
of clause
50(1) is that the letter in question was not written as soon as
possible after the contractor had become aware of the
adverse
physical conditions. In this regard counsel relied on the statement
of agreed facts which reveal that the excavation works
started to
slow down significantly in the week beginning 11 August 1997 due to
increased hardness of the material, and that on
30 August 1997 the
contractor ‘started to rip and stockpile the mudstone material with
a CAT D85 Dozer’. Counsel accordingly
submitted that by 8
September 1997 it had become abundantly clear to all involved that
additional work involving the use of a bulldozer
as a result of
unforeseen hard rock had been in progress for some time without there
having been any hint of a notice in terms
of clause 50(1). By 8
September, so it was contended, the engineer would therefore not have
been expecting a clause 50(1) notice.
[24] First,
the expectations of the engineer have no relevance in determining
whether or not the letter in question constituted
a notice in terms
of clause 50(1). Second, a late notice does not fail to qualify as
one for that reason. Clause 50(4) makes
this quite clear. The
proviso to that clause provides that the cost of all work done prior
to giving the notice ‘shall be deemed
to be covered by the rates
and prices referred to in Clause 3(4)’. These are the rates and
prices stated in the priced Schedule
of Quantities, that is, the
rates and prices in the tendered price. That the notice might have
been late is thus not relevant
to the enquiry.
[26] I
therefore conclude that the letter of 8 September 1997 complied with
the provisions of clause 50(1) of the GCC and thus constituted
a
notice in terms of that clause. In my view, a reasonable engineer
would have construed it as such. I say this because the engineer

knew that the contractor had tendered a ‘through rate’ for
excavations down to the 30 meter level. The tender did not cater
for
hard rock below the 30 meter level because tenderers were required to
tender to the 30 meter level. It was as a result of
the variation
issued by the appellant that the contractor was required to go down
three meters beyond the 30 meter level. And
no-one had foreseen that
hard rock would be encountered at the 30 meter level. The fact that
the contractor did not ask for a
revised rate when the variation
order was issued is of no consequence. The contractor might have
believed that it would be able
to absorb the cost of going down an
additional three meters. But alas, it encountered hard rock which
necessitated additional
work. The engineer also knew that the tender
documents provided for quantities of 47 652 cubic meters of hard rock
and 23 826
cubic meters of intermediate excavation, whereas the final
paragraph of the letter of 8 September estimated an additional 103
000
cubic meters of hard rock to be excavated. There was thus a huge
difference between the volume of hard rock excavation as was
reflected in the tender documents and the letter of 8 September.
With the knowledge he had the engineer ought to have realised
that
additional cost would be incurred by reason of the additional work.
The letter of 8 September 1997 informed him of the nature
and extent
of the adverse physical conditions encountered and of the additional
work they necessitated. He ought to have construed
the letter as a
notice in terms of clause 50(1). The fact that the letter, in its
final paragraph, stated that the contractor
intended ‘to start
drilling and blasting a large portion of the estimated 103 000 cubic
meters of hard shale as from tomorrow’
did not bar him from
ordering a suspension of the works so that he could consider other
options which would be less costly. He
had the power to do so in
terms of clause 50(3) of the GCC. Accordingly, the engineer ought to
have construed the letter of 8
September 1997 as a notice in terms of
clause 50(1) of the GCC. This conclusion renders it unnecessary for
me to consider the
second issue which the trial court was required to
determine.
[27
] The
appeal is dismissed with costs, which shall include the costs of two
counsel.
MPATI P
Appearances:
For
appellant : R G Buchanan SC
T
J M Paterson SC
Instructed by
Boqwana Loon
& Connellan, Port Elizabeth
Matsepes
Inc, Bloemfontein
For
respondent J Wasserman SC
G
Nel
Instructed by
Du Plessis De Heus &
Van Wyk, Benoni
Symington & De Kok,
Bloemfontein
1
Clause 40(2) reads: ‘Notwithstanding the provisions of Sub-Clause
(1), if the nature or amount of any variation or increase
or
decrease in quantity, whether ordered under Clause 39 or being the
result of the quantities exceeding or being less than those
stated
in the Schedule of Quantities, relative to the nature or amount of
the whole or the relevant part of the work specified
in the
Contract, shall be such that it results in a change in method or
scale of operation, process of construction or source
of supply
which will render any rate or price (including Preliminary and
General allowances) contained in the Contract for any
item of work
unreasonable or inapplicable, either the Engineer or the Contractor
shall be entitled, in compliance with Sub-Clause
(3) to require that
a rate or price be fixed which, in the circumstances, is fair and
reasonable.’
2
In addition to other information that came out in the discussions,
the minutes of the meeting record what is contained in the
letter of
8 September 1997 (quoted in para 9 above) relating to the rock
encountered at the 30 meter level which caused a slow
down in
progress and how the output was to be improved by blasting and the
bringing in of a D 85 Dozer.
3
Clause 40(3)(a) reads: ‘No change in terms of this Clause shall be
made to the Contract Price or to any rate or price unless,
as soon
it is practicable, and in the case of extra or additional work
before the commencement of such work, notice shall have
been given
in writing
(a) by the Contractor to the Engineer
of his intention to claim extra payment in terms of Sub-Clause (1)
or a varied rate or price
in terms of Sub-Clause (2), or
(b) by the Engineer to the Contractor
of his intention to vary a rate or price in terms of Sub-Clause
(2).’
4
Cf
Coopers & Lybrand and
others v Bryant
[1995] ZASCA 64
;
1995 (3)
SA 761
(A) at 767 E-F, and cases there cited.
5
Section 51 of the GCC provides for formalities to be complied with
in relation to a claim for additional payment and/or compensation
or
extension of time.
6
Quoted in para 6 above.
7
Clause 1(2) reads: ‘Any
written communication, including, but without limiting the
generality of the word “communication”,
any letter, notice,
drawing, order, instruction, account, claim, determination,
certification or site meeting minutes, to be
delivered by the
Employer or the Engineer to the Contractor, or by the Contractor to
the Employer or the Engineer, shall be deemed
to have been duly
delivered if . . ..’
8
As considered in cases
such as
Delmas Milling Co
Ltd v Du Plessis
1955 (3)
SA 447
(A);
Coopers &
Lybrand and others v Bryant
,
supra, footnote 5;
Sun
Packaging (Pty) Ltd v Vreulink
[1996] ZASCA 73
;
1996 (4) SA 176
(A) at 184A-D and
Engelbrecht
and another NNO v Senwes Ltd
2007 (3) SA 29
(SCA) paras [6] and [7].
9
As considered in
Breed
v Van den Berg & others
1932 AD 283
at 291-292;
Telkom
Suid-Afrika Bpk v Richardson
[1995] ZASCA 31
;
1995 (4) SA 183
(A) at 192J-194G, and
Imatu
v MEC: Environmental Affairs, etc v Northern Cape
1999 (4) SA 267
(NC) at 279G-281D.