About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
1986
>>
[1986] ZASCA 22
|
|
Clifford Harris (South West) (Pty) Ltd. v Government of the Republic of South Africa (81/83) [1986] ZASCA 22 (24 March 1986)
CLIFFORD HARRIS (SOUTH WEST) (PROPRIETARY) LTD. APPELLANT
and
THE GOVERNMENT OF THE REPUBLIC OF S A
RESPONDENT
"
CASE NO. 81/83
/ccc
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter between
CLIFFORD HARRIS (SOUTH WEST)
(PROPRIETARY) LIMITED
APPELLANT
and
THE GOVERNMENT OF
THE REPUBLIC
OF SOUTH AFRICA
RESPONDENT
CORAM
: TRENGOVE, VAN HEERDEN, BOSHOFF, JACOBS et SMALBERGER JJA
HEARD
: 25 FEBRUARY, 1986
DELIVERED
: 24 MARCH, 1986
J U D
G M E N T
TRENGOVE, JA
/
2.
TRENGOVE, JA
:
This appeal is about an unsuccessful claim brought by the appellant against
the respondent for payment of the sum of R475 200,00 in
terms of a contract for
the construction of a military airfield at Grootfontein in South West Africa.
The question at issue is whether
the court a
quo
(Moll, J, in the
Transvaal Provincial Division) erred in holding that the appellant was not
entitled to an "extra-over" payment of
R3,00 per cubic metre in respect of 158
400 cubic metres of material which had been excavated from borrow pits and used
in the construction
of earthworks under the contract. The answer to this
question turns mainly on the meaning and effect
of/
3. of certain clauses in the specifications relating to the
classification and measurement of "Class 'A' material" excavated from
borrow
pits for the construction of fills.
The basic facts can be stated as follows:
The appellant carries on business as a firm of civil engineering contractors. On
4 June
1976 the appellant entered into a contract with the respondent for the
construction of certain runways and ancillary facilities for
a military airfield
at Grootfontein. This was a schedule of rates contract. Payment for work
executed in terms of the contract was
to be made on the basis of measured
quantities at the rates stipulated in the Bills of Quantities for each item of
work. The contract
price in terms of the tender
was/
4. was R9 516 000,00 but as a result of claims for
escalation and certain variation orders the contract price ultimately exceeded
R10 000 000,00.
The works commenced on 10 February 1976, i e before the
signing of the formal contract, and were completed on 1 December 1978. The
appellant started on the construction of the earthworks in March 1976. In terms
of the specifications, the subgrade had to be constructed
with suitable
material, approved by the Engineer, obtained from cuts and borrow pits. Clause
7-2.1 of the specifications provided
that such material had to be classified as
falling within the one or other of the following categories, namely:
"(a)/
5.
"(a)
Class 'A' Material
Material
which cannot be loosened by a crawler-tractor with engine, complete with all
equipment and accessories as installed, of not
less than 180 brake horsepower at
the flywheel rated by the B.S. 649 continuous method, and with bare tractor
weight (mass) of not
less than 36 000 lbs. - 16,33 t (metric), and equipped with
a matching parallelogram type ripper using a single tine only. (b)
Class 'B'
Material
Material other than Class 'A' as defined above."
Thus, the classification was simply based on the degree of
effort required for loosening and excavating material to
be used for the
construction of the subgrade. Class A
material is more difficult to excavate
than class B material.
The rate payable in respect of class B material was
Rl,03
per/
6. per cubic metre whereas, in the case of class A
material, the contractor was entitled to an "extra-over payment" of R3,00 per
cubic
metre as compensation for the additional costs involved in excavating and
handling such material. It was furthermore stated in clause
7-2.1. that if the
contractor was unable to provide the necessary equipment for determining the
classification of the material, or
in the case of a dispute as to the
classification, the decision of the Engineer as to such classification would be
final.
For the purpose of excavating material from the borrow pits, the
appellant used D8 and D9 machines. These machines had more than twice
the power
of the type
of/
7. of machine described in clause 7-2.1. of the
specifications, which was referred to at the trial as a D7 machine. The
appellant
was fully entitled to use the more powerful machines. However, as
these machines were able to excavate hard material more easily
than a D7
machine, the appellant ran the risk of working in class A material without
realising that it was doing so. After the work
on the construction of fills had
been in progress for some three months, it appeared to the appellant that it was
not achieving the
rate of production initially anticipated. At almost the same
time, and during a visit to the site in June 1976, the appellant's managing
director, the witness Ilse, noticed that the machines in the
borrow/
8. borrow pits were working in hard, calcrete material.
It was also quite clear that the machines were, and must for some months have
been, excavating class A material from these borrow pits for use in fills. Then,
on examining the interim payment certificate and
quantity schedule for the month
of May 1976, he found that none of the said material had at any stage been
classified, or measured,
as class A material, and that the appellant had not
received any "extra-over" payment in respect thereof. According to the payment
certificate and quantity schedule all the material that had thus far been
removed from the borrow pits for fills had been regarded
as being class B
material. Use stated that he immediately took steps
to/
9.
to bring this matter to the notice of the Resident
Engineer, the witness Botes. He said that Botes agreed that the material in
question
was, in fact, class A material and he undertook to make the necessary
adjustments in the payment certificates and quantity schedules
for "extra-over"
payments in respect of this material. Botes, however, emphatically denied that
Ilse ever had any such discussion
with him. He said that this particular
question was first raised with him by the witness Harris in August 1977, about a
month after
Harris had taken over from Lilley as the appellant's Contract's
Manager. On this particular issue, the learned trial judge rejected
Use's
evidence as improbable and accepted that of Botes.
He/
10.
He found that the question of class A material,
excavated from borrow pits and used for fills, was first raised on behalf of the
appellant,
by Harris, in August 1977, as Botes had stated, and that at that time
about ninety per centum of the work on the construction of
the sub grade had
already been completed. This finding was not challenged by counsel for the
appellant on appeal. It was furthermore
common cause that in the payment
certificates and quantity schedules for the period March 1976 to August 1977,
the material taken
from borrow pits and used for fills was, in every instance,
described as class B material, and throughout this period the certificates
and
schedules were countersigned and accepted by the appellant's
representatives/
11.
representatives without demur.
When Harris first raised the question of an
"extra-over" payment for class A material excavated from borrow pits and used in
fills,
Botes was not prepared to concede that the said material should have been
classified and measured as being class A material. He suggested
that Harris take
up the matter with the Engineer on the contract, the witness Schutz. Harris
proceeded to do so at a site meeting
on 25 October 1977 which was attended,
among others, by Schutz and Botes. Schutz told Harris that he could not approve
of an "extra-over"
payment, in terms of the contract, at that late stage. He
said that, in his view, material taken from borrow
pits/
12. pits could not be properly classified or measured as
class A material after it had been excavated and placed in fills. He also
pointed out that if this question had been raised with him or Botes when class A
material was first encountered, the appellant would,
without question, have been
instructed to open up and exploit other borrow pits where class B material was
readily available. The
issue was not resolved at this meeting. When it was
raised again at subsequent site meetings, Schutz repeated the views he had
already
expressed. Schutz furthermore accepted that the appellant had indeed
incurred considerable costs for which it had not been compensated
and he
indicated that, although he could not approve of an
"extra-/
13. "extra-over" payment under item 7.3(a) of the Bills
of Quantities, he was quite prepared to consider some alternative form of
payment by way of a compromise. He suggested paying the appellant for the costs
that would have arisen if it had stopped excavating
material from the borrow
pits when it reached class A material. This would have resulted in an additional
payment for overhaul, the
re-establishment of other borrow pits and the removal
of overburden. This was not acceptable to Harris who made a number of
alternative
suggestions to which no further reference need now be made. By the
beginning of October 1978 the dispute had not yet been settled.
The matter was
again discussed at a site meeting on 4 October 1978.
At/
14.
At this meeting the parties agreed upon the procedure
to be adopted for determining the quantity of class A
material that had been removed from the borrow pits and
placed in fills. This included a series of tests on
the perimeters of the
borrow pits with a machine as
described in clause 7-2.1. of the
specifications.
Pursuant to this agreement the following site
instruction
was issued and recorded in the Site Instruction Book, on
9
October 1978, namely:
"re:
DETERMINING THE QUANTITY OF CLASS 'A' MATERIAL
Please note that
the quantity of class 'A' material will only be determined by doing at least 5
tests with the specified machine (See
clause 7-2.1.(a) of the Specifications)
and the decision reached this way will be final and binding."
The/
15. The tests were duly carried out by the appellant's
representatives in conjunction with Botes and the quantity of class A material
excavated from borrow pits for fills was determined and agreed upon as being 158
400 cubic metres.. The appellant thereupon claimed
to be entitled to an
"extra-over" payment in respect of this material at the rate of R3,00 per cubic
metre, but the claim was rejected
by Schutz on behalf of the respondent. Hence,
the present dispute.
The decision of the trial court was based on a finding
that the appellant had not complied with the provisions of the contract relating
to the classification and measurement of class A material removed from
borrow
pits/
16.
pits for use in fills, and that it was, in any event,
estopped from claiming an "extra-over" payment of R3,00 per cubic metre in
respect
of the 158 400 cubic metres of class A material. It was contended on
behalf of the appellant that the learned trial judge erred in
coming to this
conclusion.
The main question at issue is whether on a proper construction of
the contract the classification and measurement of class A material
excavated
from borrow pits for use in fills should take place prior to the excavation of
the material. I have already referred to
clause 7-2.1 of the specifications
which deals with the classification of such material.
The/
17.
The clauses relating to measurement read as follows:
"Unc
ompacted Pill
7-4.1 Material excavated from cuts, the road prism
or from any other site and placed in stockpiles, or to waste, or for use where
no degree of compaction is specified, shall be measured in cubic metres as Class
'B' material in situ before excavation, computed
from the cross-section by the
method of average end areas, or where this is not possible, the Engineer may
compute the volume by
taking seventy per cent (70%) of the previously determined
struck capacity of each hauling unit. Each unit shall be loaded to at
least this
predetermined volume of struck capacity.
Compacted Fill - Class 'B' Materia
l 7-4.2
All material excavated from cuts, borrow pits or from any other site and
placed as fill material in the subgrade or road connections
shall be measured in
place in the fill, in cubic metres, as computed from the cross-sections, by
the
method/
18.
method of average end areas, all as for Class 'B' material,
compacted to a minimum of ninety per cent (90%), or where sand is used,
to a
minimum of one hundred per cent (100%) Modified A.A.S.H.O. density.
Class 'A' Material
7-4.3
Class 'A' material measured as in
Clauses
7-4.1 and 7-4.2 but irrespective of the
degree of compaction shall
in addition be
measured by the cubic metre of material
'In-Situ' before
excavation, as computed
from the cross-sections by the method of
average
end areas, for the purpose of
determining the 'extra over'
payment
applicable. "
The dispute as to when class A material should be measured
is essentially
concerned with the interpretation of the
provisions of clause 7-4.3.
Harris and the witness Robinson, a civil
engineer with considerable
experience of contracts
involving/
19. involving the construction of earthworks, gave
evidence on the practical implementation of the provisions of the specifications
pertaining to the classification and measurement of materials. Robinson was
called to testify on behalf of the respondent and his
views were supported by
both Botes and Schutz. It is clear from the evidence of these expert witnesses
that the provisions of clause
7-4.3 cannot be interpreted purely "on internal
linguistic considerations" without reference to what are usually described as
the
"surrounding circumstances", i e "matters that were probably present to the
minds of the parties when they contracted (but not actual
negotiations and
similar statements)" (per Schreiner J A in
Delmas Milling
Co Ltd.
/
20.
Co Ltd. v du Plessis
1955 (3) S A 447(A)
at 454G). See
also
Cinema City (Pty) Ltd. v Morgenstern Famil
y
Estates (Pty) Ltd and
Others
1980 (1) S A 796
(A) at 804D - 805E.
The need for the
classification and measurement of class A material excavated from borrow pits
for use in fills arises only if a contractor
intends claiming an "extra-over"
payment in respect of such material. Such a payment can obviously not be claimed
unless the material
has been classified as class A material. In the present
instance the contract does not in express terms require the classification
to be
made prior to the excavation of the material but, as
Robinson/
21. Robinson explained, that was implicit in the
definition of class A material in clause 7-2.1. It is clear from his evidence
that
it is impossible to determine whether material to be classified is in fact
class A material once it has been excavated. Class A material
is defined in
terms of its resistance to penetration by a machine as described in clause
7-2.1. Once the material has been excavated
it will in general no longer offer
resistance to penetration and consequently it will then not be possible to
determine whether it
should be classified as class A material. In support of his
contention that material can be classified after it has been excavated,
counsel
for the appellant referred to the tests that were carried out during October
1978/
22.
1978. But, as Robinson pointed out, such tests do not provide
a sound or reliable basis for classification for there might have been
(and in
the present instance, probably were) fairly extensive pockets of soft material
within the borrow pit area before the material
was removed. Harris agreed that
it was common practice for a contractor, who in the process of excavation
encounters material in
a borrow pit which he considers to be class A material,
to inform the Resident Engineer (or the Engineer) thereof. In terms of the
contract it is then the latter's responsibility to decide on the classification.
Harris was under the impression that Botes (or Schutz)
had, in fact, been
informed when the
appellant's/
23.
appellant's representative on the site first encountered what
he regarded as class A material but, as I have mentioned before, the
court a
quo
found that this was not the case. Now, what would have happened had
Schutz (or Botes) been told in March 1976 that the appellant
had encountered
class A material in the borrow pits? Schutz stated that in terms of the
authority conferred upon him by clause 6-1.3
of the specifications he would have
required the appellant to open up other borrow pits where class B material could
readily have
been obtained. I have no doubt whatever that he would have done so.
I do not believe that any responsible Engineer, in Schutz's position,
would have
allowed the appellant to excavate class
A material/
24.
A material from the existing borrow pits for use in fills, in
respect of which an "extra-over" payment of R3,00 per cubic meter was
payable,
if a sufficient quantity of class 8 material could have been obtained from other
sources. In the instant case there was
no need whatever to use class A material
for fills. There was an adequate supply of class B material a-vailable.
According to the
evidence at least 160 000 cubic metres of class B material
could have been obtained by opening up other borrow pits within that area.
I
now come to the question whether, for the purposes of determining the
"extra-over" payment
applicable,/
25. applicable, class A material should not only be
classified, but should also be measured, before excavation. This question is
essentially
concerned with the proper interpretation of clause 7-4.3 of the
specifications cited above, and more particularly with the meaning
of the words
"shall in addition be measured by the cubic metre 'In-Situ' before excavation"
in the context of that clause. According
to the ordinary, grammatical meaning of
the words it does seem as if the material in question should be measured before
excavation.
However, according to the views expressed by the expert witnesses
that is not possible where class A material has to be excavated
from borrow
pits. It was mainly
for/
26. for this reason that Harris maintained that the
provisions of clause 7-4.3 do not refer to the time at which the material should
be measured but to the form or method of measurement. On the other hand,
Robinson was of the opinion that the clause dealt both with
the time and the
method of measuring the material, and he was supported by Schutz and
Botes.
In brief, Harris' views on the meaning and effect of clause 7-4.3 can
be stated as follows. Clause 7-4.3 must be read with clauses
7-4.1 and 7-4.2.
Under clauses 7-4.1 and 7-4.2 class A material is measured on exactly the same
basis as class B material. But for
the purpose of determining the "extra-over"
payment applicable.
27.
class A material must, in addition, "be measured by the cubic
metre of material 'In-Situ' before excavation." In the case of material
removed
from borrow pits, as opposed to cuts, the volume of such material cannot be
measured before excavation because the lower
horizon of the excavated area has
yet to be determined. Thus, the words "measured by the cubic metre 'In-Situ'
before excavation"
cannot mean that the cubic volume of the material should be
measured before excavation. It: must have some other meaning. Harris
referred,
in this regard, to the purpose of the "extra-over" payment which, as has been
mentioned before, was to compensate the contractor
for the extra effort involved
in excavating class
A/
28.
A material. The payment was linked to what Harris described
as the solid volume of the material in its natural state, i e the volume
occupied by the material in
situ
before excavation. In the context of
clause 7-4.3, the words "measured by the cubic metre of material 'In-Situ'
before excavation"
simply mean, according to Harris, that in computing the
"extra-over" payment, the rate of R3,00 per cubic metre had to be applied
to the
volume of the material in its solid state before excavation. It is plain that
this can only be determined after the material
has been removed and its lower
horizon has been established. Harris was therefore of the view that the process
by which the quantity
of 158 400 cubic
metres/
29. metres of class A material had been determined in
October 1978 conformed to the provisions of clause 7-4.3.
Robinson was of the
opinion, as I have mentioned before, that the provisions of clause 7-4.3 related
to the time at which class A
material had to be measured. He emphasised that the
in
situ
volume of such material had to be computed from "the
cross-sections by the method of average end areas" as described in clause 7-3.1
of the specifications. For this purpose it was necessary to determine both the
upper horizon and the lower horizon of the material
to be measured. Robinson
explained that as regards
the/
30. the measurement of class A material in cuts the
provisions of clause 7-4.3 presented no problems. As soon as the Resident
Engineer
has established that the material to be removed from the cuts is class
A material, he will proceed to determine the upper horizon
of the material
before it is excavated. The volume of that material can then be calculated
because the lower horizon is to be determined,
not by measurement, but with
reference to the specifications and drawings. Thus, in the case of cuts the
class A material can be
measured in
situ
prior to excavation. But, as to
borrow pits, Robinson agreed with Harris that it was impossible to apply the
provisions of clause
7-4.3 literally. He
pointed/
31. pointed out, however, that in the case of borrow
pits there are two phases of measurement. The first is to determine the upper
horizon of the material to be excavated. This must be done after the
classification of the material as class A material, and before
it is excavated.
The upper horizon will be at the level where the class A material begins. The
second phase would be to establish
the lower horizon which, in the case of a
borrow pit, is determined by the volume of material ultimately excavated. Thus,
according
to Robinson, the upper horizon must be fixed prior to the excavation
of the material, whereas the lower horizon can, of necessity,
only be determined
after excavation.
Robinson/
32. Robinson also explained why it was essential that
the upper horizon of class A material should be established prior to the
excavation
of the material. He said that once the material has been removed one
cannot accurately determine what its horizon had been prior
to such removal. A
visual examination of the material surrounding the borrow pit and a series of
tests along its perimeter -such
as the tests that were carried out during
October 1978 - would not constitute a sound basis for a reliable or accurate
determination
of what the upper horizon of the class A material had been prior
to the excavation. An horizon established on data of this nature
would, in
Robinson's opinion, be unreliable because it is based
on/
33. on the assumption that there were no aberrations of any
consequence in the borrow pit area itself. Robinson stated that in many
instances such an assumption would not be justified for one often finds that the
true horizon of class A material undulates considerably
over a long borrow pit
or that there are substantial intrusions or pockets of soft material within the
borrow pit area. Having regard
to the provisions of clause 7-3.1 relating to the
taking of cross-sections, I am of the opinion that Robinson was correct in
stating
that for the purpose of calculating the volume of class A material in
terms of clause 7-4.3 it was essential to determine the true,
as opposed to the
theoretical, horizon of the material,
and/
34. and I am also satisfied that the only way of
accurately
determining the upper horizon of such material would be to do so before
excavation.
To sum up, thus far. For the reasons set out above, I have come
to the conclusion that a condition entitling the appellant to an "extra-over"
payment under the contract was not fulfilled, viz, the upper horizon of class A
material in the borrow pits was not established prior
to excavation of that
material. In order to bring about fulfilment of the condition the appellant had
to inform the Resident Engineer
(or the Engineer) when it reached class A
material in the borrow pits in respect of which it intended claiming an
"extra-over" payment,
so that (a) the
material/
35. material could be classified and (b) the upper horizon established. This
the appellant failed to do.
The next question is whether in terms of the
contract the appellant is, in the circumstances, precluded from claiming payment
of the
sum of R475 200,00 in respect of the 158 400 cubic metres of class A
material which, it is now common cause, was excavated from borrow
pits and used
in fill. In my judgment it is precluded from doing so. In the particular
circumstances of this case it was, in my view,
essential that there should be
strict compliance with the aforementioned condition. (cf Wessels,
Law of
Contract in South Africa
, 2nd ed. vol 1, paras 1335 - 1339 and Christie,
The Law of Contract
in
/
36.
in South Africa
, pp 406 - 407 and the authorities
there cited.) Had the appellant taken the necessary steps to bring about such
compliance, which
it however failed to do, the Resident Engineer (or the
Engineer) would not have authorised the removal of class A material from the
borrow pits in question and he would have required the appellant to obtain class
B material from other borrow pits for this purpose,
in which event there would
not have been any question of a claim for an "extra-over" payment. Counsel for
the appellant contended
that it was nevertheless entitled to payment of the
aforesaid amount by reason of the site request which was issued pursuant to the
agreement reached between Harris and Schutz at
the/
37. the site meeting on 4 October 1978, and the results of the
tests conducted at the borrow pits in consequence thereof. In my view
there is
no merit in this contention. The evidence of the discussions between the parties
at the various site meetings, including
the meeting of 4 October 1978,
establishes conclusively that it was never agreed between the parties that a
claim by the appellant
for an "extra-over" payment, based on the result of the
tests, would be accepted by the Engineer as a valid claim under the contract.
In
view of my conclusion that the appellant has not established that it has a valid
claim for payment of the sum of R475 200,00 under
the contract, it is
unnecessary to deal with the respondent's plea of
estoppel./
38. estoppel.
In the result the appeal is dismissed with costs, including the costs
incurred by the employment of two counsel.
TRENGOVE, JA
VAN HEERDEN JA )
BOSHOFF, JA )
) CONCUR
JACOBS, JA ) SMALBERGER, JA )