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[2016] ZAGPPHC 970
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Strategic Environmental Focus (Pty) Ltd v GIS Global Image (Pty) Ltd (A374/2015) [2016] ZAGPPHC 970 (24 November 2016)
IN THE HIGH COURT
OF SOUTH AFRJCA
(GAUTENG
DIVISION, PRETORIA)
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: NO
REVISED
CASE
NO: A374/2015
DATE:
24/11/2016
IN THE MATTER
BETWEEN
:
STRATEGIC
ENVIRONMENTAL FOCUS (PTY) LTD
Appellant (Defendant
a
quo)
and
GIS GLOBAL IMAGE
(PTY) LTD
Respondent (Plaintiff
a
quo)
JUDGMENT
KOLLAPEN J:
1.
The appellant, having been granted leave by the Court
a
quo,
appeals against the whole of the judgment and order of that
Court, wherein it was ordered to pay the respondent the sum of RI 80
000 together with interest and costs, arising out of a contract for
services the respondent performed for, and on behalf of, the
appellant.
2.
The following common cause facts underpin the appeal:
2.1
The parties entered into a written contract which described
the nature of the work to be performed as follows:
'Strategic
Economic Focus (Pty) Ltd (SEF) has been appointed to undertake the
compilation and implementation of a census data base,
to facilitate a
social survey of the households within the study area. As previously
agreed with Marilene Heunis of Strategic Environmental
Focus (the
'lead consultant') GJS Global Image (PTY) LTD (the 'sub-consultant')
has indicated that it is willing to act as a specialist
consultant
for the project and it is agreed by the parties thereto that this
letter (the 'agreement') serves to confirm the appointment
of the
sub consultant and sets out the conditions of appointment.
'
2.2
The contract provided further as follows with regard to the
arrangements for payment:
1.2
The Sub-consultant is to submit their invoice directly to the
Lead Consultant.
1.3
The Lead Consultant will reimburse the Sub-consultant on
receipt of pa.vmentfrom the Client.'
2.3
The respondent rendered the services it was required to in
terms of the contract and submitted an invoice in this regard to the
appellant as was contemplated in Clause 1.2 of the contract.
2.4
There is no dispute that the respondent rendered the services
contracted for in a satisfactory manner, and discharged diligently
all its obligations in terms of the contract.
3.
The only issue in dispute and for determination was whether
clause 1.3 of the contract constituted a condition suspending the
appellant's
liability for payment or whether it merely constituted a
time stipulation in respect of the liability to pay.
4.
The court
a quo
in finding for the respondent concluded
that there was a lack of consensus between the parties and then
proceeded to apply the
contra proferentum
rule in favour of
the respondent. The rule is described in
Christie's The Law
o_fContract in South Africa
6th edition at page 232 as follows:
'The first point
to remember about the contra proferentum rule and its associated
rules is that, unlike the other rules of construction,
they are not
concerned with ascertaining the common intention of the parties. They
are only to be applied as a last resort, when
all methods of
ascertaining the common intention of the parties have failed, in
order to cut the Gordian knot. They are therefore
rules of law rather
than rules of construction.
'
5.
In argument before us the appellant persisted in its stance
that clause 1.3 of the contract created a condition for the coming
into
existence of the liability of the appellant, namely that its
legal obligation to pay the respondent would only arise upon it being
paid by the client.
6.
In interpreting the contested provisions of the contract the
Court is enjoined to follow the approach enunciated in
NATAL
JOINT MUNICIPAL PENSION FUND v ENDUMENI MUNICIPALITY
2012
(4) SA 593
(SCA)
at 603F to 604B:
'The
present state of the law can be expressed as follows: Interpretation
is the process of attributing meaning to the words used
in a
document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading
the
particular provision or provisions in the light of the document as a
whole and the circumstances attendant upon its coming
into existence.
Whatever the nature of the document consideration must be given to
the language used in the light of the ordinary
rules of grammar and
syntax; the context in which the provision appears: the apparent
purpose to which it is directed and the material
known to those
responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the
light of all these
factors. The process is objective, not subjective. A sensible meaning
is to be preferred to one that leads to
insensible or unbusinesslike
results or undermines the apparent purpose of the document.'
7.
Indeed
in
SAKHIWO
HEALTH SOLUTIONS (LIMPOPO) (PTY) LTD v MEC OF HEALTH, LIMPOPO
PROVINCIAL GOVERNMENT
[2015]
JOL 33718
(SCA),
the
Court endorsed this approach in the following terms at paragraph 25:
'The principles
governing the construction of a contract are well-stated. I do not
propose to rehearse them. In ascertaining the
meaning the court must
establish what the parties intended
-
what the purpose of the
contract was. In doing so, a court must consider all of its
provisions and may not isolate any of them and
consider them in a
vacuum.
And at paragraph 28
the Court added:
'Moreover, a
contract must be interpreted so as to give effect to its purpose, and
to make business sense.
'
8.
Finally in
VENTER AGENTSKAPPE (EDMS) BPK v DE SOUSA
[1990] ZASCA 37
;
1990
(3) SA 103
(A)
the court was required to distinguish
between a condition precedent to creating liability, and a time
clause where the agreement
provided that estate agents' commission
would be payable from the first available cash paid in terms of the
contract.
The
court found that the term constituted a time clause as to when the
commission which had already been earned, would become payable.
In
its judgment the court referred to the work of Pothier
A treatise
on the law of Obligations
in underpinning the distinction between
a condition and a term as follows at
11
lE-G:
'A term differs
from a condition, inasmuch as a condition suspends the engagement
formed by the agreement: whereas a term does not
suspend the
engagement, but merely postpones the execution of it. A person who
promises to pay upon a certain condition is not
a debtor until the
condition has taken place: there is merely an expectation of his
becoming so: therefore if he pays what is the
object of the
obligation, by mistake and before the condition is accomplished, it
may be
reclaimed as we have seen in the preceding article: on
the contrary, a person who owes anything subject to a term not yet
expired,
is a real debtor, and if he pays within the time he has no
right of repetition, for he has only paid what was in effect due from
him; but though he is a real debtor, he is not compellable to
discharge his obligation until the expiration of the term.
'
9.
Thus when one has regard to the language of clause 1.3 of the
contract, as well as the context and the circumstances attendant upon
its coming into existence it becomes evident that clause 1.3 does not
create conditions but merely constitutes a time clause. The
following
in my view supports such a conclusion:
9.1
Clause 1.2 provides for the submission of an invoice and the
date of submission is not linked to payment being on hand from the
client.
9.2
Clause 1.3 does not in any manner whatsoever suggest that
payment will ONLY
(my emphasis)
be made on receipt of payment
from the client.
9.3
In opposing summary judgment, the stance of the appellant was
that the client was indebted to it for various amounts including the
claim of the respondent. It is inconceivable that if the claim of the
respondent following the submission of its invoice had not
created
legal liability, that the appellant would have described the amount
as constituting an indebtedness to it on the part of
the client.
9.4
The evidence was clear that the agreement concluded between
the appellant and its own client did not provide that the appellant
rendered its services on a risk basis. It would hardly make good
business sense or give effect to the purpose of the contract for
the
respondent to provide its services to the appellant on a risk basis,
particularly in light of a client whose identity was unknown
to it.
10. In my view the
facts that present themselves are indistinguishable from those that
prevailed in the
VENTER
AGENTSKAPPE (EDMS) BPK
matter
(supra) and the conclusion therefore that should follow should be no
different.
11. In the
circumstances I am of the view for the reasons given that clause 1.3
constitutes a time clause and it being clear that
the event
stipulated in the clause will not arrive (the appellant having not
received payment and having elected not to pursue
payment from the
client) the doctrine of fictional fulfilment should be applied
justifying the respondent receiving payment which
it had earlier
become entitled to.
12.
For the sake of completeness and even if I am wrong on the
interpretation of clause 1.3 then in any event this is precisely the
kind of matter where the
contra proferentum
rule would apply
in favour of the respondent. The appellant, being the author of the
contract, could have constructed the contract
to create conditional
liability on its part and having not done so the rule must operate
against it and the general situation,
namely that a contractor who
appoints a sub-contractor must pay for the services rendered, should
apply.
ORDER
13.
In the result I would propose the following order:
That the appeal be
dismissed with costs, such costs to include the opposed application
for summary judgment, as well as the first
application for leave to
appeal against summary judgment.
I
AGREE
__________________________
W RC PRINSLOO
JUDGE OF THE HIGH
COURT
I AGREE
___________________________
S PMOTHLE
JUDGE OF THE HIGH
COURT
IT IS SO ORDERED.
HEARD ON: 09
November 2016
FOR THE APPELLANT:
Adv. A Liversage
INSTRUCTED BY:
Prinsloo Bekker Attorneys (ref.: PC Prinsloo/S30/l l) FOR THE
RESPONDENT: Adv.JP van den Berg
INSTRUCTED
BY: VHI Attorneys (ref.: W O'Reilly/RP/RG0002)