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[2016] ZAGPPHC 1017
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City of Tshwane Metropolitan Municipality v Borwa Construction CC, In re: Borwa Construction CC v City of Tshwane Metropolitan Municipality and Another (87025/14) [2016] ZAGPPHC 1017 (10 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
Number: 87025/14
10/11/16
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
CITY
OF TSHWANE METROPOLITAN
MUNICIPALITY APPLICANT
and
BORWA
CONSTRUCTION
CC RESPONDENT
In
re:
BORWA
CONSTRUCTION
CC APPLICANT
and
CITY
OF TSHWANE METROPOLITAN MUNICIPALITY FIRST
RESPONDENT
PD
NAIDOO AND ASSOCIATES (PTY) LTD SECOND
RESPONDENT
Coram:
HUGHES J
JUDGMENT
HUGHES
J
[1]
In terms of the Uniform Rules of Court Rule 42 (1) (a) the
applicant seeks to rescind the order of Louw J granted on 18 February
2015. The application was opposed by the respondent. In addition to
the rescission sought the applicant also seeks a declaratory
for the
warrants of execution and the executions are to be declared null and
void and of no legal effect with the proceeds of the
execution to be
returned.
[2]
Briefly, the respondent, Borwa, sued the applicant, City of
Tshwane, for retention held by the applicant in the amount of R2 508
171.92. The application was served on the applicant on 9 December
2014 and was set down on the unopposed roll for 22 January 2015.
The
parties filed their intention to defend in the main application and
by agreement of all the parties the application was postponed.
It was
enrolled for 18 February 2015 and there was no appearance on behalf
of City of Tshwane. Further, no opposing papers had
been filed by
City of Tshwane.
[3]
The applicant alleges that what they understood the terms of
the postponement were that, 'that the applicant would file an answer
by the 18 February 2015, where after the matter would be removed from
the Unopposed Roll and be placed on the Opposed Motion Roll;
the
respondent's attorney would also then decide whether or not to file
replying papers.'
[4]
This is disputed by the respondent. The respondent submits
that the applicant was well aware that the matter was enrolled on the
unopposed roll for 18 February 2015. That the applicant did not
attend court that morning but the second respondent in the main
application, PD Naidoo and Associates (Pty) Ltd, appeared and handed
over their answering affidavit at court. This is why judgment
was
only granted against the applicant by Louw J. After judgment was
granted the matter was recalled after 12h00 on that same day
and
counsel who appeared then for the applicant informed Louw J that her
instruction to appear were only received after 9h00 that
very day and
she had been liaising with the counsel representing the second
respondent in the main application in the weeks preceding
the
application.
[5]
The respondent has raised a technical defence of non-joinder
in this application for rescission. I do not propose to non-suite the
applicant but rather intend to deal with the rescission application
in the interest of justice to bring finality to the litigants.
[6]
From the heads of argument filed by the applicant it can be
gleaned therefrom that this rescission application is premised on
Rule
42 (1) (a) and the Common law. The trite principles in terms of
the Common law is that the applicant needs to present a reasonable
and acceptable explanation which is closely linked to showing no
wilful default and that it has a
bona fide
defence, whilst
Rule 42 (1) (a) states that rescission may be granted where an order
or judgment was erroneously sought or granted
in the absence of the
affected party.
[7]
The case made out by the applicant is that according to its
attorney they were under the impression that the matter '[It] was...
tentatively meant to be enrolled on to the Unopposed Motion Roll of
the 18 February 2015' and as such they sought an extension
for filing
their answering affidavit. In advancing this argument I was directed
to a letter they had transmitted to the respondent
on 8 February
2015. In this correspondence from the applicant to the respondent it
is clearly recorded that the application date
is 18 February 2015 as
per the subject matter of this letter. It is further recorded that
'We are of the intention to file our
Answering affidavit on or before
18 February 2015 as agreed,' it goes further to state that 'We humbly
request that you consider
indulging us with an extension, on the
filing date,
in the event that we are compelled to request same.'
[my emphasis] The respondent's argue that no answering affidavit
has ever been filed by the applicant however the second respondent
in
the main application filed its answering affidavit at court upon the
respondent on the 18 February 2015. The applicant argues
that in the
circumstances set out above they were not in wilful default taking
into account that they had indicated that they were
experiencing
difficulties with the compilation of their answering affidavit.
[8]
I am indebted to the applicant pointing out that wilful
default is
'indifference as to what the consequences would be
rather than a wilfulness to accept them'.
In this instance it is
undisputed that the applicant's counsel pitched up at court after the
order was granted; it is also undisputed
that the applicant had been
liaising with the second respondent to assist in the drafting of its
answering affidavit; it is undisputed
that the correspondence of 8
February 2015 was sent to the respondent and it is further undisputed
that an order was made on 22
January 2015 stating that the matter was
postponed to 18 February 2015. In the light of the aforesaid the
attorney for the applicant
could not have been under the impression
that the matter was tentatively meant to be enrolled on 18 February
2015. There was the
order of the 22 January 2015 which is clear,
there is also their own admission of the application date in their
letter of 8 February
2015 together with their own anticipation that
they would have had to request (in my view this could only be from
the court) an
indulgence to file their answering affidavit, as they
were already requesting same from the respondent in that
correspondence.
[9]
The cherry on the top is correspondence from the applicant's
attorney dated 17 February 2015, a day before the matter was due to
be heard, where Mr Sandile Ngwane states:
'We
note from your letter dated 21 January 2015 that the matter has been
set down on the unopposed roll for the 18 February 2015
as agreed. We
have, however, not
h
received a Notice of Set Down to that effect. The postponement
was granted on the basis of giving our client an opportunity to file
an Answering affidavit by the 181 whereby the matter would be removed
from the roll so as to afford your client an opportunity
to reply to
our Answering Affidavit. We confirm that our Answering Affidavit will
be served on your office by close of business
tomorrow as agreed'.
The
respondent disputes such an agreement and submitted that a telephone
discussion was had between Mr Ngwane and Mr Bertus Lauw
after receipt
of this correspondence. Mr Lauw told Mr Ngwane that the matter would
be proceeding and he should attend court and
do the necessary. Mr
Ngwane agreed to the specific date of 18 February 2015 for the
postponement and that there was no agreement
for the applicant to
file on 18 February 2015. This conversation of 17 February 2015 was
confirmed in an email to the applicant's
attorney at 8:52am. These
correspondence and the contents therein were not disputed by the
applicant.
[10]
In light of that set out above, in my view, the applicant by not
attending court on 18 February 2015 adopted
indifference as
to what the consequences would be rather than
a
willingness to
accept them.
In the circumstances I can but only conclude that
the applicant indeed was in wilful default when it failed to appear
in court on
18 February 2015. See
De Witts Auto Body Repairs (Ply)
v Fedgen Insurance
Co
Ltd
1994 (4) SA 705
(E)
at
708G.
[11]
However, as stated by Moseneke J as he then was in
Harris v Absa
tla Volkskas
2006 (4) SA
527
at
529
para [5]
"... An acceptable
explanation of the default must co-exist with evidence of reasonable
prospects of success on the merits."
Thus
even though a negative finding has been made as regards the
applicant's wilful default it must be looked at together with the
bona fide defence advanced.
[12]
The principle of a
bona fide
defence in Common law is
portrayed in the applicant's submissions advanced that the order was
sought and granted erroneously. I
therefore proposed to deal with
this below. The premise that the applicant places reliance on Rule 42
(1) (a) is that the judgment
was erroneously granted by the court and
in advancing its argument to sustain this they submit that the
founding affidavit lacked
the averments to sustain the cause of
action for the relief sought by the respondent. Further, that the
respondent failed to allege
proper performance with its contractual
obligations.
[13]
The bona fide defence of the applicant is that on the respondent's
own papers in the main application default judgment should
not have
been granted. They submit that the respondent had failed to show
compliance with the provisions of clauses 49.5.3, 51.2
and 51.3.1 and
52.1. These clauses primarily deal with the payment of the retention
monies, the certificate of completion, the
certificate of practical
completion and the works requested by the engineer for completion in
order to make the cite safe and without
danger. The applicant's case
is that Louw J failed to consider the relevance of these clauses when
he gave the judgment on the
papers before him.
[14]
The respondent's argue that there is no basis upon which the
applicant can rely on that Louw J did not apply his mind to the
papers and erroneously granted the relief sought in the main
application. They submit that the papers in the main
application
made out a case for fictional fulfilment of the terms of
the agreement and based on that submitted on their papers Lauw J
granted
the order. The contract with the relevant clauses now relied
upon by the applicant was before the court in the main application.
What was also before the court in the main application was a City of
Tshwane Construction Payment certificate dated 15
th
June
2013 indicating the amount due to the respondent as that amount which
was so ordered in the main application. Of interest
is the fact that
the applicant does not address the basis of the respondent's case of
fictional fulfilment that was before Lauw
J in its application for
rescission. However, in the heads of the applicant this is given some
attention, being that as it may,
I intend to deal with it as both
parties require finality.
[15]
In dealing with the cause of action set out in the main application
of the respondent I have regard to what is set out in paragraphs
5.1
to 6.10. I do not intend to regurgitate these paragraphs in this
judgment. Save to state that the case made out was that the
respondent had performed its obligations in terms of the contract
until the works were stopped on 4 October 2010 by written
notification.
The respondent put up a letter from the engineer being
the second respondent in the main application of the contract coming
to
an end on 31 May 2012. The respondent sets out his request for the
relevant certificate of practical completion and completion
certificate, this was met with a response from the second respondent
that the respondent provide them with 'proof that the Works
do
comply'. The compliance they sought was that the 'Works conform to
the standards set out in the Contract'. The respondent in
the main
application also stated that the works were stopped by the same
second respondent requesting this proof. The stopping
of the works
prohibited the respondent from completing the work in terms of the
contract. All of the above has not been contested
as there is no
answering affidavit by the applicant.
[16]
The applicant contends in its heads that to succeed with a claim of
fictional fulfilment the respondent bears the onus of proving
that
'by the deliberate commission or omission, prevented the Respondent
from complying with the Clause 51.1 written instruction,
issued on 4
October 2010, with the intention of avoiding its obligations under
the Building Contract.' The applicant further argues
that no evidence
has been presented by the respondent that the applicant or its agents
being the second respondent in the main
application impede and/or
obstructed the respondent from complying with the time sensitive
written instructions of 4 October 2010.
The applicant contends that
it was “within the respondent's capabilities between the period
of 4 October 2010 and 1 May 2012
to comply with the Engineers (second
respondent's) written instructions". The respondent's
non-compliance is the basis for
the decision of the second respondent
not to issue the Certificate of practical completion required by the
respondent.
[17]
The respondent as applicant in the main application submits that they
received written notification on 4 October 2010 to stop
all works in
relation to the project with the second respondent. In this
application the respondent further stated that on 31 May
2012 they
then received a letter from the second respondent advising that their
contract had come to an end on 1 May 2012. Thereafter
respondent
requested the certificate of practical completion on 29 June 2012 to
which the second respondent on 11 July 2012 responded
as follows: "In
terms of the GCC section 51.1 a practical completion certificate can
only be issued when a/the Works have
reached a stage which allows for
their use for their intended purpose (albeit the Works conform to the
standards as set out in
the Contract Document). Please provide us
with proof that the Works do comply and the Practical Completion
Certificate will be
issued." The respondent contends that as the
instruction came from the engineers employed by the applicant, in
essence they
were prohibited from completing the project in the
remaining time available in terms of the contract. Thus they could
not reach
the stage where the certificate was asked for. The argument
goes further in that they submit that in any event the work had been
completed and certified as complete.
[18]
The respondent as applicant in the main application stated that it
was not advised of the reason why they had to stop the project
however what they were told to do when the project was stopped was to
backfill the trenches that they had dug up and laid the pipes,
basically undoing the work they had been assigned to do.
[19]
The case made out by the respondent in the main application that was
before Louw J is one of fictional fulfilment. It must
also be stated
that the only papers before Louw J were that of the respondent being
the applicant in the main application. The
answering affidavit of the
second respondent was handed to the presiding officer on the same day
that the matter was heard. Even
with that affidavit at his disposal
Louw J granted the order sought by the respondent.
[20]
The law relating to fictional fulfilment was initially settled in
Gowan v Bowern
1924 AD
550
and MacDuff
& Co
Ltd
(in liquidation) v Johannesburg Consolidated Investment
Co
Ltd
1924 AD 573
at 591
Innes CJ said the following:
"[B]y
our law a condition is deemed to have been fulfilled as against a
person who would, subject to its fulfilment, be bound
by an
obligation, and who has designedly prevented its fulfilment, unless
the nature of the contract or the circumstances show
an absence of
do/us
on his part"
Wessels
JA in
Gowan at
572 stated:
I
do not think that the Civil law goes further than this:-
lf
a promise is made subject to a casual condition the promissor may not
for his own benefit, in order to escape the consequences
of the
contract, actively do something to prevent the fulfilment of the
condition. To do so is
do/us.
[21]
Thus in the main application, the respondent as applicant, from the
papers before Louw J had to show that the applicant and
the second
respondent by deliberate commission or omission prevented it from
concluding the project in order that the Works reach
a stage which
allows for their use for their intended purpose, and in doing so the
applicant and the second respondent had the
intention of avoiding its
obligations under the agreement with the respondent.
[22]
On my analysis the second respondent stopped the Works on the project
of the respondent. The respondent was not informed of
the reason for
the suspension of the Works. The respondent was instructed to
backfill the trenches which they had dug up and laid
pipes,
essentially in my view, undoing what the respondent had done. When
the contract came to an end two years later the respondent
was
advised by the second respondent to remove their site establishment
and structures from the site.
[23]
I do not follow the applicant's argument that the respondent could
have completed the Works between the times they were told
that the
work was suspended to the time they were told that the contract came
to an end. It clearly was not capable of happing
as the Works were
suspended and stopped. This also goes to the point made by the second
respondent that "a practical completion
certificate can only be
issued when a/the Works before the project could come to an end.
Works have reached a stage which allows
for their use for their
intended purpose", how was this supposed to come about when the
second respondent had stopped the
work.
[24]
There was much made by the applicant that the respondent had not
completed the tasks that were set out in the notification
of stoppage
of the Works. As regards this the respondent replied that this was in
fact incorrect as only the setting up of the
CCTV's was outstanding
and the time limit on that was to take place 30 days from the
stoppage notification of 4 October 2010. This
submission of the
applicant was not before Louw J and even so I am of the view that
since they had to put up the CCTV's 30 days
after the stoppage they
would have had to have the second respondents co-operation to gain
access to the site as this was contrary
to the stoppage notification
instructed completion by "[F]riday 08
th
October
2010".
[25]
How could the second respondent expect the respondent to make sure
that the Works on that site were the extent for what they
were
intended for when the project had been stopped prior to the
completion thereof? This in the face of the respondent having
to undo
what the project was intended for when they were instructed by the
second respondent to backfill and compact the trenches
dug up by the
respondent. It is unconceivable to expect that site to be in a
condition for which it was intended as per the contract
between the
parties.
[26]
By the response of the second respondent when a request for the
retention was made it is clear to me that when the stoppage
notification was given it was done so to prevent fulfilment of the
respondent's duties in respect of the contract. An additional
factor
that points in that direction was the undoing of the tasks that the
respondent was contracted to do. This would clearly
ensure that the
site was not for what it was intended.
[27]
The above to my mind illustrates that the second respondent, as agent
of the applicant, intentionally prevented the respondent
from
fulfilling its duties as regards the contract and as such it intended
to avoid its obligation toward the respondent to settle
the retention
having provided a payment certificate of the retention amount due on
15th June 2013.
[28]
In the result I find that the respondent on its papers before Louw J
had made out a proper case for fictional fulfilment and
the order
granted by Louw J was not erroneously granted as contended by the
applicant.
[29]
In the exercise of my discretion and for the reasons I have set out
above I find that the applicant has not made out a case
for
rescission both on the grounds for Rule 42 (1) (a) and the Common
Law.
[30]
Turning to the issue of costs, the respondent has requested costs on
an attorney and client scale. I do not believe that this
matter
warrants an order as requested by the respondent. The respondent must
not lose sight of the fact that they sought an indulgence
from this
court in the filing of their papers against this application. Having
concluded that it would be in the interest of justice
for both to be
granted an opportunity to be heard instead of bogging down the matter
with technicalities I conclude that the normal
party and party cost
order for the victor is appropriate.
[31]
Consequently the following order is made:
[1] Both the applicant
and the respondent in the rescission application are granted
condonation for the late filing of their papers;
replying affidavit
and answering affidavit respectively.
[2] The application for
rescission of the order of Louw J dated 18 February 2015 is dismissed
with costs. Such cost to be on a party
and party scale.
________________________
W
Hughes
Judge
of the High Court Gauteng, Pretoria
Appearances
Counsel
for the applicant:
Adv T Mkhwanazi
Instructed
by:
Kunene Rampala Inc.
Counsel
for the respondent:
Adv G Naude
Instructed
by:
VFV Attorneys
Date
heard:
15 September 2016
Date
delivered:
10 November 2016