RA Burriss (Pty) Ltd t/a Service Electrical v Moumtzis and Another (192/05) [2006] ZASCA 26; [2006] SCA 26 (RSA) (23 March 2006)

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[2006] ZASCA 26
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RA Burriss (Pty) Ltd t/a Service Electrical v Moumtzis and Another (192/05) [2006] ZASCA 26; [2006] SCA 26 (RSA) (23 March 2006)

REPUBLIC
OF SOUTH AFRICA
THE SUPREME COURT OF
APPEAL
OF
SOUTH AFRICA
Case number 192/05
Not reportable
In the matter between:
RA BURRISS (PTY) LTD t/a
SERVICE
ELECTRICAL APPELLANT
and
EFSTRATIOS MOUMTZIS FIRST
RESPONDENT
ALASIA RENE MOUMTZIS SECOND RESPONDENT
CORAM
: FARLAM, MTHIYANE JJA et MAYA AJA
HEARD
: 17 FEBRUARY 2006
DELIVERED
: 23 MARCH 2006
Neutral citation: This
judgment may be referred to as Burris (Pty) Ltd t/a Service
Electrical v Efstratios Moumtzis and Another [2006]
SCA 26 (RSA).
________________________________________________________
JUDGMENT
________________________________________________________
FARLAM JA
[1] The appellant in this
matter, an electrical contractor, instituted action in the Port
Elizabeth magistrate’s court against the
respondents, the trustees
of a trading trust, which had leased commercial premises in a
shopping centre in Newton Park, Port Elizabeth,
claiming an amount of
R47 991.11, which it alleged was the balance of the amounts owed to
it by the respondents in terms of an oral
contract for work to be
done at the premises of which the respondents were the tenants. The
respondents defended the action, pleading
that they had paid to the
appellant all amounts they owed it and averring further that they had
overpaid the appellant in an amount
of R57 008.40, which was the
subject of a counterclaim which they brought against the appellant.
The matter came before an additional
magistrate for the district of
Port Elizabeth, who dismissed the appellant’s claim but gave
judgment in favour of the respondents
on their counterclaim.
[2] An appeal brought by
the appellant against this judgment was dismissed by the Eastern Cape
High Court and it now appeals to this
Court (with the leave of the
High Court) against its judgment dismissing the appeal.
Before the matter was
argued in this Court the parties agreed that if the appellant’s
claim were to be upheld on appeal the judgment
should be given in its
favour in an amount of R44 522.28 and that if the appeal were
dismissed the judgment on the respondent’s
counterclaim in the
amount of R57 008.40 should stand.
[3] There was no dispute
between the parties as to the work done by the appellant nor as to
the reasonableness of its charges therefor.
The respondents agreed
that they were liable for some of the work done by the appellant but
contended that they were not liable for
the rest of the work and that
the appellant should have looked to the landlord of the leased
premises, one Cohen in his capacity
as trustee of the West Street
Property Trust, for payment therefor.
[4] Before the lease
between the landlord and the respondents was concluded Mr D Cohen,
who was developing the shopping centre in
which the leased premises
are situated, asked Sean Burriss, the appellant’s managing
director, to furnish him with a price for
the electrical installation
to be done at the premises to be leased, on which it was envisaged
that a Spar store business would be
conducted by the tenants. On 19
August 1998 Mr Burriss sent Mr Cohen what he described as an ‘offer’,
in which he quoted a figure
of R390 956.00 for certain electrical
installation work to be done on the premises: the work to be done was
particularised on the
second page of the offer. The third page was
headed ‘Commercial Terms’. It contained four numbered paragraphs.
In the first it
was stated that the price was valid for 30 days and
excluded VAT. The second contained the dates by which the work was to
be completed.
In the third, which dealt with ‘Payment terms’,
were set out the dates on which payment of the appellant’s price
was to be
made, viz 30 November, 15 December and 30 December, and the
appellant’s ‘general conditions of sale’ were made applicable.
Subparagraph b read as follows:
‘
b Orders
for extra work will only be carried out when instructed to do so in
writing. Payment for extras will be due on the 15th January
1999.’
The fourth paragraph read
as follows:
‘
4. General
Although care has been taken to ensure
that nothing has been omitted and all is to the Spar Eastern Cape
specification document as
there are no consultants’ drawings or
design for the above Spar we assume no responsibilities for any
oversight in this quotation.
On completion of the final design by
us or a consulting engineer the extra’s and omissions will be
calculated and the price adjusted
accordingly.’
[5] Before Mr Cohen
accepted the appellant’s quotation the lease relating to the
premises was concluded. Among the documents annexed
to the lease were
the first two pages of the appellant’s quotation. The third page,
which included the adjustment provision, was
not annexed.
Clause
3 of Annexure A of the lease, which contained what were described as
the ‘General Conditions of Lease’, read as follows:
‘
The Landlord shall carry out
certain improvements to the premises as set out in Annexure “H”,
which improvements shall be effected:
prior to the Possession Date;
in accordance with the Spar
Specifications unless agreed in writing by SPAR but subject to the
financial limit contained in annexure
D and clause 1.1.6.’
Clause 1.1.6 contained a
definition of ‘the Specifications’ which read as follows:
‘
1.1.6 “The Specifications”
means the plan and specifications which are annexed hereto as
Annexure “H”, which plan and specifications
reflect the
improvements to be made to the Premises by the Landlord prior to the
Possession Date subject to the maximum expenditures
as set out in
Annexure “D”, provided the work in items 1,2,3 and 4 of Annexure
“D” as detailed in the quotations annexed
to Annexure “D”
marked “D1”, “D2”, “D3” and “D4” respectively” is
performed by the Landlord in accordance with
those quotations.’
Annexure ‘D’ is
headed ‘Schedule of Limits of (sic) re Spar Building and Finishing
Specifications (including Material and Labour).’
It read as
follows:
‘
1. All
wall tiles and floor coverings and skirtings (including all porcelain
tiles, carpets, NCI tiles, mild steel floor tiles, vinyl
floor tiles,
porcelain skirtings, NCI – ceramic skirting tiles, vinyl cove
skirtings etc.) As per Quotation D1.
2. All ceilings and bulkheads as per
Quotation D2.
3. All
electrical power supply and lighting as per Quotation D3.
4. All
airconditioning and fire detection system as per Quotation D4.
5. No
Hoists.
6. No
Trolley Bay.
7. No
Off-loading Dock.’
In paragraph 1 the words
‘as per quotation D1’ were added in handwriting and replaced the
words ‘limited to R213 400.00’ which
were deleted. Similarly the
references to quotations D2, D3 and D4 were inserted in handwriting
and replaced phrases limiting the
landlord’s obligation to R74
000.00, R390 000.00 and R327 000.00 respectively. The quotation
annexed as D1, which related to the
tiling and floor covering, was
for an amount of R213 400. The quotation annexed as D2, which related
to the ceilings, was for an
amount of R74 000. The appellant’s
quotation was annexed as D3 but as I have said, the last page
containing the ‘Commercial terms’
was not annexed. The quotation
annexed as D4, which related to the airconditioning and ventilation,
was for an amount of R327 985.
[6] None of the
quotations annexed contained a clause providing for an adjustment of
the quoted price. Annexure ‘H’ of the lease
was a copy of the
Spar Eastern Cape Building and Finishing Specifications. Clause 1.1
of this document read as follows:
‘
1.1 Upon reaching agreement to
develop and lease the premises to the SPAR Member, the owner or the
appointed Developer acting on behalf
of the owner shall be required
to carry out the building and finishing specifications contained in
this document as required by the
SPAR EASTERN CAPE Development
Department.’
It also contained,
amongst other things, specifications for an off loading dock, two
hoists (where necessary), and a ramp to facilitate
trolley receiving.
[7] When the appellant
commenced work on the leased premises a problem arose because there
were no detailed drawings detailing the
work to be done. The second
respondent, who acted on behalf of herself and the first respondent
in dealing with the appellant’s
representative, Mr Burriss, wanted
an electrical consultant appointed to prepare a marked up drawing of
the premises. Mr Cohen was
originally unwilling to appoint a
consultant but he eventually instructed Mr Burriss to appoint a Mr I
Rudman as consultant. Mr Burriss
then appointed Mr Rudman, assuring
him that he would make sure that he was paid his fee and that he
would claim it thereafter from
Mr Cohen. (In the event Mr Burriss
paid Mr Rudman’s fee and by the time he testified he had not been
reimbursed by Mr Cohen.)
[8] In addition to
insisting on the appointment of an electrical consultant the second
respondent also made it clear to Mr Burriss
from the start that she
wanted a lot of additional electrical work done, which was not
included in the appellant’s quotation to
Mr Cohen. Some of this
work was provided for in the Spar Specifications but part of the work
required by the second respondent went
beyond what was set out in the
specification.
[9] The appellant did all
the extra work required by the second respondent. Mr Burriss
testified that it only did so after the second
respondent had agreed
that she and the first respondent would pay therefor. He said that
because in terms of the appellant’s contract
with Mr Cohen it was
limited to claiming for work done which was listed on the second page
of the quotation and he had no claim against
Mr Cohen for extra work
in view of the fact that the appellant had not been instructed by him
in writing to do the work.
[10] The
second respondent testified on the other hand that she had only
agreed to pay for such additional work as was not required
to make
the premises comply with the Spar Specification and that the
appellant had to look to Mr Cohen for payment of work covered
by the
Spar Specification. She averred that the landlord was obliged under
the lease to ensure that the premises complied with the
specification
and that she had not been prepared to pay the appellant for this work
and then look to Mr Cohen for reimbursement.
According to her
evidence she did not like or trust Mr Cohen. The respondents’ case
was that the appellant had the right under
its contract with Mr Cohen
to adjust its price so as to cover all the extra work which was
needed to comply with the Spar Specification.
[11] In finding in favour
of the respondents the magistrate held that the version of the
contract given by the second respondent was
more probable than that
given by Mr Burriss.
He said:
‘
[I]t
is highly unlikely that the obviously hardbitten and shrewd
experienced business woman, Mrs Moumtzis, [the second respondent]
would meekly or recklessly agree to pay what the contract with Cohen
said Cohen should pay. That she would willingly be ready to
pay for
her luxurious items over and above the Spar specifications makes
sense to me. Plaintiff always had and still has the backdoor
of par.
4 on page three of his quotation to fall back on and might despite
protestation have been wiling to take the risk of proceeding
with the
work which was after all a very large contract.
If
plaintiff perhaps thought that she would be an easier target than the
difficult Cohen he has made a mistake. This is the counter
argument
to [the appellant’s attorney’s] suggestion that Mrs Moumtzis
would much rather have locked horns with Burris than with
Cohen.’
[12] In its judgment on
appeal the court
a quo
held that the magistrate had not
misdirected himself in rejecting Mr Burriss’s version of the
contract and that the probabilities
strongly supported the
respondents’ version.
[13] The respondents’
version is essentially based on two propositions:
1) the
appellant could in terms of its contract with Mr Cohen adjust its
price upwards to claim all extra amounts arising from work
done to
make the premises comply with the Spar Specification; even if it was
not instructed in writing to do such work.
2) Mr
Cohen was obliged under the lease to ensure that the premises did so
comply.
[14] Although I doubt, in
view of the express wording of clause 1.1.6 and Annexure ‘D’ of
the lease, whether it is correct to
say that Mr Cohen was obliged
under the lease to pay for the work done so that the premises
complied with the Spar Specification,
I am prepared to assume,
without deciding the point, that the respondents’ second
proposition may be correct.
[15] I proceed to
consider whether their first proposition is correct.
[16] I do not agree that
in the circumstances of this case the appellant was entitled to claim
from Mr Cohen any extra amount for
work not covered by the second
page of its quotation done in terms of the Spar Specification. In
arguing this part of the case, Mr
Huisamen quoted both paragraphs of
clause 4 of the appellant’s quotation and submitted that in other
words, as between Mr Cohen
and the appellant the appellant was
‘entitled to adjust its quotation upwards to bring it in line with
the full costs which would
have been necessary to supply the premises
to the respondents in accordance with the minimum Spar
Specifications’.
[17] I do not think that
clause 4 should be so interpreted. The first paragraph is in terms a
rejection of liability. The appellant
is making it clear that it will
not be responsible for omissions in the quotation and any respect in
which the work listed on the
second page falls short of what the Spar
Specification requires. The second paragraph clearly envisages that a
final design is required
and that once it is completed the extras and
omissions will have to be calculated so that the price can be
adjusted. But the question
to be answered is: what are the extras
referred to? The obvious answer is: those referred to in clause 3. b.
In this regard it is
important to note that the work listed on the
second page was to be paid for in three instalments on 30 November,
15 December and
30 December, while payment for any extra work done
would have to take place on 15 January 1999. This clearly would
include extras
covered by the adjustment referred to in clause 4,
paragraph 2. This link between clause 3. b and clause 4 paragraph 2
reinforces
the view that the extras mentioned in clause 4 paragraph 2
can only be extras covered by clause 3. b. Once it is accepted that
Mr
Cohen never instructed the appellant to do any extra work, whether
in writing or otherwise, it becomes clear that the appellant would
not have been able to have claimed any extra amount from Mr Cohen. Mr
Burriss’s evidence on the point that he was aware of this
must in
my view be accepted. This conclusion is destructive of the
respondents’ case. It is impossible to accept that Mr Burriss
would
have agreed with the second respondent to do all the extra work
requested but only to look to the respondents for payment for
those
portions not covered by the Spar Specification because that would
mean that he would have been agreeing to do the other work
for
nothing. If the respondents’ version were correct one would have
expected him to have asked Mr Cohen for written instructions
to do
the work in question and only to do it once such instructions had
been received. It is not suggested that he did that. It must
also be
borne in mind that the appellant could have walked off the job after
doing the work listed on the second page of its quotation.
[18] The second
respondent, on the other hand, was anxious to open the business and
start trading. If the second proposition on which
their case is based
is correct they would be able to claim the extra amount expended to
make the premises comply with the Spar Specification
from Mr Cohen.
If on the other hand their second proposition is not correct, then
that would provide a reason for the second respondent
to have agreed
with Mr Burriss that she and the first respondent would pay for all
the additional work to be done.
[19] In my opinion the
magistrate misdirected himself in holding that the appellant had, as
he put it, ‘the backdoor of par 4 on
page three of his quotation to
fall back on’. It is accordingly necessary for us to decide the
case afresh on the record. In my
view once the respondents’ first
proposition is rejected, their whole case crumbles and the
probabilities strongly support the
appellant.
[20] Mr Huisamen also
referred in the course of his argument to a passage in Mr Burriss’s
evidence where he appeared in the course
of cross-examination to
concede his case. I am satisfied, however, that it is clear from his
later evidence on the point that the
concessions he made were made in
error and cannot be relied on to justify a finding that the second
respondent’s evidence is to
be preferred to that of Mr Burriss.
[21] It follows in my
view that the magistrate should have given judgment in favour of the
appellant with costs and dismissed the
respondents’ counterclaim,
again with costs.
[22] The following order
is made:
A. The
appeal is allowed with costs.
2. The order made by die
court
a quo
is set aside and replaced by the following:
‘
1. Judgment for the
plaintiff with costs in an amount of R44 522.28.
The defendants’
counterclaim is dismissed with costs.’
……………
..
IG
FARLAM
JUDGE
OF APPEAL
CONCURRING
MTHIYANE JA
MAYA AJA