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[2011] ZAKZDHC 67
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Shamla Chetty t/a Nationwide Electrical v TBP Building and Civils (Pty) Ltd and Another (13677/2010) [2011] ZAKZDHC 67 (8 June 2011)
IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLIC OF SOUTH
AFRICA
Case No: 13677/2010
In the matter between
Shamla
Chetty t/a Nationwide Electrical
…...........................
Applicant
and
TBP
Building and Civils (Pty) Ltd
…..........................
First
Respondent
KSN
Electrical
…....................................................
Second
Respondent
JUDGMENT
Delivered on: 8 June 2011
STEYN J
[1] On 11 April 2011, the
applicant sought the following relief:
“
(1) That
the First Respondent is directed to produce within ten days of the
date of this order all payment certificates including
all available
details concerning the quantities of the subcontract works included
in each certificate as defined in clause 1.1.15
of the agreement
concluded between the Applicant and the First Respondent on the 12
th
March 2008 and 28
th
March 2008 which annexure “A” annexed to the Founding
Affidavit disclosing the amounts certified as due for payment
to the
Applicant for the period 1
st
July 2009 to the 31
st
October 2010;
(2) That the Applicant is granted
leave to supplement the papers on receipt of the documentation
referred to in paragraph 1 of this
order to claim the amount so
certified as due to the Applicant and to re-approach this Court on
notice to the First Respondent
for judgment for the amounts certified
as due to the Applicant in terms of such certificates.
That the First Respondent be
directed to pay the costs of the application excluding the costs of
the hearing on the 10
th
December 2010.”
[2] This application is a
sequel to an earlier application. The first application was brought
as an opposed application before my
brother Wallis J, who struck the
matter from the roll with costs. When the application was launched
before this court, the applicant
changed course and sought amended
relief that is final in nature.
[3] The background to
this application is that the applicant is the electrical
subcontractor and the first respondent is the main
contractor,
constructing a new multi-level departmental block at the Port
Shepstone Hospital. In terms of the contract the applicant
had to
supply electrical installations as specified in the subcontract
agreement. The second respondent is the newly appointed
subcontractor. Essentially the dispute could be described as a
building dispute between the applicant on one side, it being the
sub-contractor, and the first respondent, being the main contractor
and the employer as per the agreement, to wit the KwaZulu-Natal
Province.
[4] Pivotal to the
application is the agreement concluded between all the parties, more
so clause 30 of the agreement that reads
as follows:
“
30.1 The
sub-contract shall submit a detailed application for interim payments
to the contractor on or before the date stated in
clause 39.2.9 of
the
sub-contract
schedule
.
The contractor shall forward the quantum in such detailed application
to the
agent
or
employer
provided that such quantum represents a reasonable estimate of:
the total value of the
sub-contract
works
satisfactorily executed at the
date of application, making due allowance for authorised
variations and adjustments to the
sub-contract sum in terms of
clause 28.0
the
materials and goods
subject to the terms of the
principal agreement
any expense or loss arising from
the provisions of clauses 3.3, 6.4, 7.4, 11.3, 15.0, 18.2, 18.3,
22.0 and 33.0
30.2 The
sub-contractor
shall furnish to the contractor,
for submission with the application
for interim payment, any documents which may be required to
substantiate the value of the application.
30.3 After receipt of an interim
payment certificate
, or after receipt of interim payment
should there not be provision for a
payment certificate
in
terms of the
principal agreement
, the contractor shall, upon
an application by the
sub-contractor
, disclose to the
sub-contractor all available details concerning the quantities of the
sub-contract works
included in the
payment certificate
or interim payment”
(Emphasis as per original
agreement)
In the appointment
letter, dated 22 February 2008, the following obligations were added
to the original agreement, in terms of MW2.
Stipulating the following
obligations of the subcontractor:
“
2a. The
sub-contractor shall submit a detailed application for interim
payments to the contractor two working days before the 20
th
of each month. This shall be a detailed application in Bill of
Quantities format.
b. The claims are to be cumulative
and represent the total value of the sub contract works
satisfactorily executed at the date of
application and not simply
record the monthly movements.
c. Materials and goods delivered to
site must be reflected therein.
3. Should you fail to submit your
application for interim payments in sufficient detail or timeously,
we will not be responsible
for any subsequent non-payment of the
claims due to late submission or lack of detail.
4. Original VAT invoices are to be
delivered to our offices at 4 Lancaster Terrace, Westville or post to
P.O. Box 1293, Westville,
3600, for the attention of the Contract
Surveyor, to reach ourselves before due date for payment.
5. No payments will be effected by
our accounts department until the signed order together with the
required documents has been
received by us.”
[5] The only aspect on
which the parties agreed upon when the matter was argued is the fact
that the relief is final in substance
and henceforth that the
application should be dealt with in accordance with the
Plascon-Evans
1
rule.
[6] Mr de Beer SC, acting
on behalf of the applicant, has argued that no party has declared any
dispute in terms of the contract
and henceforth no referral to
arbitration is required, as stipulated in the contract
viz
clause 38. Much emphasis
was placed on clause 38.3 that provides as follows:
“
38.3
Should
any
disagreement between the contractor and the subcontractor arise out
of this agreement
other
than a disagreement in terms of clause 38.1, either party may by
notice to the other party declare a dispute which
shall
be referred to arbitration.”
(My emphasis)
[7] According to Mr de
Beer the application is not about a dispute, or a referral for
arbitration, but about the production of documents
and details that
the applicant is entitled to in terms of clause 30.3. The respondent
failed to produce the aforementioned documentation.
2
It needs to be stipulated
that the applicant relies on the very agreement in its claim of the
payment certificates.
[8] Mr Collins, acting on
behalf of the first respondent, asked that the court focus and
consider the content of the agreement,
especially clause 1.1.15 and
what it provides. Clause 1.1.15, which forms part of the definitions
and interpretations of the agreement,
reads:
“‘
PAYMENT
CERTIFICATE’ means a certificate indicating the amount due and
payable by the employer to the contractor in terms
of the principal
agreement.”
He submitted that there
is no contractual provision that the applicant could rely on in its
demand that payment certificates be
provided. In addition, Mr
Collins, argued that clause 38.3 of the agreement is sufficiently
wide enough to cover all disputes,
which means that the only question
that remains is whether a dispute was in fact declared. In his view,
annexure L, page 67 of
the papers, is a declaration of a dispute.
Page 67 contains a letter sent by the firm Pearce, Du Toit and
Moodie, dated 1 November
2010. It reads as follows:
“
Electrical
Sub-contract: Nationwide Electrical: Port Shepstone Hospital
The seven day notice period
referred to in our letter dated 20 October 2010 has now expired
and
you have not complied with your obligation in terms of clause 30.3 of
the contract
namely,
to disclose details of quantities of the
subcontract
works which have been certified and included in your
payment certificates.
Accordingly, please take notice
that our client exercises its right to suspend work. During this
suspension period no other electrical
contractor may be brought onto
site.”
(My emphasis)
In light of this letter,
so it has been argued, the matter ought to have been referred to
arbitration and since the applicant contests
such a referral, the
applicant bore the
onus
. It was argued that applicant failed
to discharge the
onus
and that the application should be
dismissed with costs. Mr de Beer on the other hand has argued that
the aforementioned letter
does not constitute any dispute since it is
purely and simply a notification of suspension of work on the
contract. I shall return
to this notice later in my judgment.
[9] I shall now turn to
the relief sought and then duly consider whether the applicant
succeeded in proving, on the papers that
she is entitled to the
relief sought, since no dispute was declared.
[10] Much of the
applicant’s case depends on whether the sum of R907 000 was
paid and then reversed. Mr de Beer has argued
that the respondent is
silent on the fact whether such payment had been received. Mr Collins
asked that the court give consideration
to the information as
reflected on page 104 of the papers, which shows that respondent
acknowledged that R907 000 was certified.
It was, however, reversed
because of the discrepancies in the applicant’s claim.
[11] In my view if it is
found that any of the parties in this case more specifically the
applicant, has declared a dispute then
the matter should have been
referred to arbitration, which results in the applicant not
succeeding in its claim before this court.
[12] The word ‘dispute’
is defined in the Oxford English dictionary
3
as:
“
question
the correctness on the validity of (a statement or an alleged fact);
argue with (a person); contest, strive against, or
resist (an
action).”
I fail to see how the
following could not be interpreted as a dispute:
“
you have
not complied with your obligation in terms of clause 30.3 . . .”
. . . our client exercises its
right to suspend work.”
4
It is evident that
applicant disputed the fact that the contractor fulfilled its
obligations. This much should be abundantly clear,
since it is a
disagreement between the parties over obligations arising from the
agreement.
It is evident from the
founding affidavit
5
that the parties also
disagreed over the existence of their rights and duties and that a
referral to arbitration should have followed,
considering clause 38.3
and its content. Accordingly, in my view, applicant had to convince
this court (1) that there was no dispute
and (2) failing so, bore the
onus
to satisfy this court
that it should not exercise its discretion in favour of an
arbitration referral.
6
I align myself with the
views expressed by Wallis J, as he then was, in
Aveng
(Africa) Ltd formerly Grinaker-LTA t/a Grinaker-LTA Building East v
Midros Investments (Pty) Ltd
:
7
“
[13] I am
fortified in this approach to clause 40 by the fact that the modern
approach to arbitration clauses is to respect the
parties’
autonomy in concluding the arbitration agreement and to minimise the
extent of judicial interference in the process.
The historical desire
of courts to protect their own jurisdiction and their consequent
suspicion of arbitration as a means of resolving
disputes has been
replaced by a recognition that arbitration is an acceptable form of
dispute resolution with which the courts
should not interfere. As
O’Regan ADCJ said in
Lufuno
Mphaphuli and Associates v Andrews
:
‘
[219]
The decision to refer a dispute to private arbitration is a choice
which, as long as it is voluntarily made, should be respected
by the
courts. Parties are entitled to determine what matters are to be
arbitrated, the identity of the arbitrator, the process
to be
followed in the arbitration, whether there will be an appeal to an
arbitral appeal body and other similar matters.’
”
[13] Applicant’s
case throughout was that there is no dispute. In my view it is
evident that there was a dispute in light
of annexure “L”
and that applicant should have resorted to the agreement and acted
upon it. Instead it elected to persist
with litigation. I am not
persuaded that the disagreement does not fall within the terms of the
arbitration clause.
[14] Having duly
considered the papers and in applying the
Plascon Evans
Rule,
I am of the view that the applicant had failed to establish the
requirements of the relief sought before me.
[15] Accordingly the
application is dismissed with costs.
____________________________
Steyn, J
Date of Hearing: 11 April 2011
Date of Judgment: 8 June 2011
Counsel for the applicant: Adv H De
Beer SC
Instructed by: Pearce du Toit &
Moodie
Counsel for the respondents Adv M W
Collins
Instructed by: V Chetty Inc.
1
See
Plascon-Evans Paints Ltd v Van Riebeeck
Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(A) at 634H-
I
.
2
Clause
30.3 reads:
“
After receipt
of an interim payment certificate, or after receipt of interim
payment should there not be provision for a payment
certificate in
terms of the principal agreement, the contractor shall, upon an
application by the sub-contractor disclose to
the sub-contractor all
available details concerning the quantities of the sub-contract
works included in the payment certificate
or interim payment.”
3
See
Shorter Oxford English Dictionary 5
th
edition (Oxford
University Press)
2002
at 709.
4
See
page 67 of papers.
5
See
para 24(b) at page 22.
6
See
Universiteit van Stellenbosch v JA Louw
1983 (4) SA 321(A)
at
333H–
334A.
7
2011
(3) SA 631
(KZD).