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[2013] ZAGPPHC 30
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Phumi Trading J V Mosallo Zwane Construction v Lekwa Municipality (11741/2012) [2013] ZAGPPHC 30 (6 February 2013)
NOT
REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
No. 11741/2012
DATE:06/02/2013
In
the matter of:- and
PHUMI
TRADING JV MOSALLO ZWANE
CONSTRUCTION
.....................................
Plaintiff
and
LEKWA
MUNICIPALITY
.......................................................................................................
Defendant
JUDGMENT
Van
der Byl AJ:-
[1]
In this matter the Plaintiff seeks provisional sentence against the
Defendant in an amount of R2 430 000, together with interest
thereon
at the rate of 15,5 per cent as from the date of service of the
provisional service summons.
[2]
As is apparent from the summons the amount claimed is for an
“additional amount awarded under the contract
MIG/MP033/ST/08/09
to the contract price of R5 400 000,38 for the
upgrading of gravel roads to paved roads in Lekwa Municipality, which
amount was
retained by the Plaintiff as per the agreement between the
parties under contract number, MIG/MP033/ST/08/09 which amount is now
due, owing and payable as certified by the Defendant’s agent,
being Mashi Molo Civil Engineers and Agriculturists (Pty) Ltd
as per
Annexure A …
[3]
Annexure A to the summons with heading “CERTIFICATE OF FINAL
COMPLETION" (“the Certificate”) -
(a)
refers to a contract numbered MIG/MP033/ST/08/09, describes the scope
of the work;
(b)
indicates that the total contract amounts to R5 400 000,38;
(c)
purports that an additional amount of R2 430 000 was awarded; and
(d)
seems to certify that the project (referred to as Project A & B)
was completed on 24 August 2011.
[4]
The Certificate also contains a note which reads as follows;
uln
accordance with Clause 521 of the General Conditions of Contracts for
Construction Works 1st Edition 2004, we hereby certify
that the
contract works as specified above are deemed to be complete in
conformity with the provision of the contract. All defects
have been
confirmed as corrected in accordance with the contract and the
contractor's remaining 50% retention in accordance with
the defect
liability period should be released.".
[5]
The matter is vehemently opposed by the Defendant.
[6]
In its opposing affidavit filed in terms of Rule 8(5) it is contended
-
(a)
in limine, that the proceedings are fatally defective because of the
Plaintiffs failure to adhere to the peremptory provisions
of Rule
8(3) by failing to have annexed the contract known as
MIG/MP033/ST/08/09 to the summons;
(b)
on the merits, as set out in a letter on behalf of the Defendant
addressed to the Plaintiff’s attorneys of record on 2
December
2011 in response to demands by the Plaintiffs attorneys for payment
(ie. 10 months before the provisional sentence summons
was issued) -
(i)
that it denied that it owed or was indebted to the Plaintiff for R2
430 000;
(ii)
that the entire amount of the approved budget allocated to the
project in question was fully utilized and fully paid to the
Plaintiff;
(iii)
that at some stage the Plaintiff had a view that the budget ought to
be increased by an amount of R2 000 000 or R2 430 000,
but the
Municipal Management declined to do so;
(iv)
that, after the Plaintiff had abandoned the site consequent upon a
dispute in respect of phase 2 of the project, the Municipal
Council
resolved to that legal action be instituted for a breach of contract;
(v)
that the Plaintiff then returned to the site on its own and it was
agreed that an arbitration process be pursued so as to resolve
the
phase 2 dispute.
[7]
Furthermore, as is apparent from the Defendant's affidavit, it
appears -
(a)
that it is conceded that the Defendant made an offer to the Plaintiff
for appointment as an “independent contractorJ'
for the project
for a fixed amount of R5 400 000,38 with an explicit indication that
that amount should not be exceeded;
(b)
that upon or about 20 July 2010 the Plaintiff accepted the offer in
writing;
(c)
that towards the end of 2010 or the beginning of 2011 it came to the
Defendant’s attention that the allocated funds were
almost
exhausted, but that not much or sufficient construction work had been
done;
(d)
that on an investigation instituted into this state of affairs, it
was established that the Plaintiff over-billed its certificate
for
the 2nd phase of the project;
(e)
that, on being made aware of these findings, the Plaintiff suggested
that the Defendant should avail an additional funding of
between R2
000 000 and R2 430 000;
(f)
that the Defendant, through its management, suggested to the
Plaintiff that the parties should have regard "to the underlying
written contractual agreement which inter alia provided that in an
event of a dispute an arbitration procedure to be undertaken":
(g)
that the Plaintiff then abandoned the construction site thereby
having committed a breach of the underlying contract;
(h)
that, as already indicated, the Municipal Council on 24 June 2011
passed a resolution to the effect that legal proceedings be
instituted against the Plaintiff for termination of the contract
concluded between the Defendant and thew Plaintiff;
(i)
that, as also already indicated, the Defendant then out of its own
accord returned to the site;
(j)
that it never approved any additional funding towards the project
which would have, had it been done, been done by resolution
of the
Municipal Council and communicated to the Plaintiff in writing.
[8]
In my opinion the Plaintiff has for various reasons failed to make
out a proper case for the granting of provisional sentence.
[9]
As I have already indicated, the Plaintiff -
(a)
claims payment of a sum of R2 430 000, being an additional amount
awarded under the contract MIG/MP033/ST/08/09 to the contract
price
of R5 400 000,38 ................... which amount was retained by the
Plaintiff as per the agreement between the parties
under contract
number; MIG/MP033/ST/08/09 which amount is now due, owing and payable
as certified by the Defendant’s agent,
being Mashi Molo Civil
Engineers and Agriculturists (Pty) Ltd as per Annexure A ... and
(b)
relies, in support of that claim solely on the Certificate.
[10]
The contract referred to in the summons is not annexed to the papers.
[11]
It was submitted on behalf of the Plaintiff that the Plaintiff was
not in law required to annex the contract referred to in
the summons
to the summons and, as submitted at the hearing of this matter, that,
in any event, there is no indication in the Defendant’s
opposing papers that the contract referred to is a written contract.
[12]
I am unpersuaded that I should accept that the contract referred to
in the summons is not a written contract or that the Defendant
should
have proved that it is
such
a contract. As a matter of fact in the written communications between
the parties reference is made to an underlying written
contractual
agreement.
[13]
Rule 8(3) does not enjoin that only liquid documents be annexed to
the summons.
[14]
In determining whether or not a document is one upon which a
plaintiff’s claim is founded, the following test, as held
in
LongtiH Construction Ltd v Lirhobern (Pty) Ltd
1978 (2) SA 240
(W) at
244C, is to be applied:
“
Whether
it is necessary to determine the defendant's liability; or material
to the plaintiff's cause of action; or whether the action
is so
dependent on it that it cannot proceed without a consideration of it;
or whether it forms a vitally important part of the
plaintiffs claims
against the defendant.”.
[15]
Upon a proper scrutiny of the Certificate it refers to an underlying
contract, contract number MIG/MP033/ST/08/09.
[16]
If regard is had to the Certificate alone, taking into consideration,
particularly, the disputes between the parties as is
apparent from
the Defendant’s opposing affidavit and the Annexures thereto,
it is impossible to determine without regard
being had to the
underlying contract who is liable to pay what amounts and when such
amounts are due and payable.
[17]
The contract is, therefore, in my view material to the Plaintiff’s
cause of action and that it cannot proceed without
a consideration of
the contract.
[18]
The Plaintiff was accordingly bound, if the contract was a written
contract, to annex the contract to the summons and, if it
was not in
writing, to have made that averment in the summons.
[19]
In my view it is, bearing in mind, inter alia, that the contract was
awarded by way of tender (see: Annexures ZM6 and ZM7 and
the note
contained at the end of the Certificate), on the probabilities highly
unlikely that the contract could not have been concluded
in writing.
[20]
Apart from the question whether or not the Plaintiff should have
annexed the contract to the summons the Defendant is not debarred
from raising a defence arising from the contract in question.
[21]
In Wustrow v Wustrow
1980 (2) SA 308
(W) Coetzee J held in this
regard at 311G as follows:
"...
the proper ground for refusal in such cases is not that the liquidity
of the document is destroyed, but that it affects
purely the defence
which the defendant is entitled to raise against a claim made against
him on such a document which is based
on a clearly defined causa
debiti. He is indeed entitled to raise a defence to the payment of
the money which he undertook to pay
in terms of such a document on
the basis that that cause of action does not exist, either because
that particular debt, for instance,
has been paid, or there is some
defect in that particular cause of action which entities him to
refuse payment.
It
is defendant's task, if he is to avoid provisional sentence against
him, to show on a balance of probabilities that the debt
described,
in an otherwise liquid document, is not due or payable by him".
[22]
The Certificate clearly refers to another transaction as its cause
debiti, namely,
an
“additional amount awarded under the contract
MIG/MP033/ST/08/09 to the contract price of R5 400 000,38".
[23]
The question is, therefore, not whether the Certificate is a liquid
document, but rather whether, if regard is had to the contract,
the
additional amount is owing.
[24]
If regard is had to Annexure ZM 6 (record p. 27), it is apparent from
the Plaintiffs appointment that it was subject to the
condition,
inter alia, that "the tendered price of R5 400 000 (VAT
INCLUDED) be accepted and that the project budget of R5
400 000...
shall not be exceeded
[25]
in its letter of acceptance, Annexure ZM 7 (record p. 29) the
Plaintiff explicitly recorded its acceptance of the contract
value of
R5 400 000 and no more, being an amount that was admittedly paid to
the Plaintiff.
[26]
In all the circumstances I am unpersuaded that the Plaintiff is
entitled to provisional sentence.
[27]
As far as costs are concerned I was urged on behalf of the Plaintiff
that in the event of me dismissing the Plaintiff’s
claim, costs
be reserved for determination at the trial. I am disinclined to
adhere to this request. It is quite clear from the
papers that the
Plaintiff was, at least 10 months before summons was issued, well
aware of the fact that its claim was disputed
by the Defendant and
the grounds on which it was disputed.
[28]
It appears that the matter was postponed on 5 November 2012 because,
. according to the presiding Judge at that stage, the
matter was not
ripe for hearing since heads of argument were not filed in time. On
this issue conflicting affidavits were filed
by the respective
attorneys. The parties were in the circumstances in agreement that
the wasted costs of that day be costs in te
cause.
[29]
In the premises the following order is made:-
1.
THAT the application for provisional sentence be refused.
2.
THAT the Defendant be ordered to file its plea within 20 days as from
date of this order.
3.
THAT the Plaintiff be ordered to pay the Defendant’s costs of
this application, including the reserved on 5 November 2012.
P
C VAN DER BYL
ACTING
JUUGE OF THE HIGH COURT
ON
BEHALF OF THE APPLICANT: ADV A J VENTER
On
the instructions of: JOHN HUNTER ATTORNEYS
Ref:
Mr Hunter/Jasyn/M566
Tel:
011 782 9997 03 011 781 3322
c/o
A W JAFFER ATTORNEYS 577 Carl Street
Pretoria
West
PRETORIA
Ref:
AWJ/AJ
Tel:
012 327 1200
ON
BEHALF OF THE DEFENDANT: ADV M T A COSTA
On
the instructions of MAUSEHA ATTORNEYS
Arcadia
Centre Office 118
Cnr
Madiba and Steve Biko Streets Arcadia PRETORIA Ref: N6/12 012-323
11-14
DATE
OF HEARING: 28 January 2013
JUDGMENT
DELIVERED ON:6 February 2013