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IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case Number: 21521/2022
In the matter between:
CMED (PTY) LTD Plaintiff
and
NOORD CIVILS (PTY) LTD First Defendant
C-T-P CONSULTING ENGINEERS CC Second Defendant
JUDGMENT
MAGARDIE AJ:
1. This is an exception by the second defendant to particulars of claim in an action
where the plaintiff claims payment of damages from both defendants in the
amount of R 4 948 307.15. The plaintiff’s claims relate to separate breaches of
contract by the defendants in respect of the construction and development of
52 residential erven on land owned by the plaintiff in Langebaan, Western Cape
(‘the project’). The project was to be known as the ‘The Oyster Catcher Phase 1
Development, Langebaan.’
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2. The plaintiff’s claim against the second defendant is based on a professional
services engineering contract in terms of which the second defendant was
appointed as the consulting engineer for the project. The exception is advanced
on two grounds. Firstly, it is contended that the plaintiff’s reliance on a tacit term
of the engineering contract is precluded by a so -called ‘whole agreement’
clause in the latter. Secondly, it is contended that the plaintiff’s claim seeking to
hold both defendants jointly and s everally liable, is not legally sustainable. The
exception so advanced does not raise a substantive question of law which may
effectively settle the dispute between the parties. In such cases, an exception
taken on the basis that a pleading lacks the averments necessary to sustain a
cause of action, requires the excipient to make out a very clear and strong case
for it to succeed. I conclude that the second defendant’s exception does not
meet this test. The exception accordingly fails on both grounds.
Background
3. On 24 March 2 022 the plaintiff and the first defendant concluded a written
agreement in terms of which the first defendant was appointed as the
contractor in respect of the construction of the internal roads, engineering
services and related infrastructure for the project (‘the building contract’). The
building contract comprised of th ree documents. The first was the plaintiff’s
written acceptance of the first defendant’s tender for the project . The first
defendant’s tender had been prepared and submitted to the plaintiff by the
second defendant on behalf of the first defendant. The second component of
the building contract was the General Conditions of Contract for Construction
Works (Third Edition, 2015) (‘GCC’) . The GCC sets out standard conditions of
contract which are generally used for building contracts of this nature. The third
component of the building contract were certain agreed written amendments to
relevant provisions of the GCC, whi ch were entitled ‘Contract Data’. The total
price for the construction of the works in terms of the building contract was R
6 480 715.70.
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4. At approximately the same time that the building contract was concluded, the
plaintiff and the second defendant concluded a professional services
engineering contract. The engineering contract was compromised of the
second defendant’s Standard Terms and Conditions and its quote, submitted in
October 2021, for the rendering of the services in terms of the project. The
services to be provided by the second defendant were recorded to be
‘…consulting engineering services pertaining to the design and constructio n
supervision for the domestic roads and civil engineering service s’ in respect of
the project.
5. The GCC provided for interim payments to be made to the first defendant to
finance the cost of the construction work. Interim amounts would be determined
and certified by the second defendant having regard to inter -alia the estimated
value of the completed construction work at that stage. The amount of these
interim payments was to be determined by the second defendant in its capacity
as ‘ Employer’s Agent ’ as defined in clause 1.1.1.6 of the GCC. This clause
defines the term ‘Employer’s Agent’ as “…the person named as the Employer’s
Agent in the Contract Data or any other person appointed from time to time by
the Employer and of whom the Contractor is notified, in writing to act as the
Employer’s Agent for the purposes of the Contract as substitute for the
Employer’s Agent so named .’ Clause 3.2.21 of the GCC recorded that the
function of the Employer’s Agent was to ‘… administer the Contract as agent of
the Employer, in accordance with the provisions of the Contract.’
6. The plaintiff pleads in its particulars of claim that at the time of the preparation
and submission of the tender, both the first and second defendants knew that in
the event of the tender being accepted by the plaintiff, the second defendant
would in terms of the relevant provisions of the GCC, be appointed by the
plaintiff as its agent to manage and oversee the project, particularly the
execution of the building work. In this regard, c lause 5 of the second
defendant’s Standard Terms of Agreement provided that the second defendant
would carry out the services ‘… with reasonable skill, care and diligence, for the
use of the Client .’ Similarly, clause 4 of the second defendant’s quote required
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the civil engineering services to be designed in accordance with ‘…relevant
good engineering practices.’
7. The site was made available to the first defendant on or about 17 August 2022 .
Construction of the works commenced immediately. This promising start to the
however proved to be short-lived.
8. According to the plaintiff, the first defendant breached its obligations in terms of
the building contract in numerous material respects relating to the construction
of the roads in respect of the project. These included construction of the roads
without adequate compaction tests having been performed in accordance with
SANS1200 specifications. This defect resulted in substantial movement of the
interlocker pavers in the road surface in both horizontal and vertical directions.
Additional material breaches o f the building contract by the first defendant are
alleged to include deviation from design and material specifications in the
construction of the roads, non-compliance with specification regarding manhole
paving and covers, construction of defective junction draw boxes,
communication ducts not being built to specification, failure of the barrier kerbs
to comply with engineering design specifications and incorrect installation of the
saddles on waterpipes.
9. In respect of the certification of interim payment certificates by the second
defendant, the plaintiff pleads that the first defendant deliberately inflated
claims and submitted claims for work allegedly executed for additional
stormwater and sewerage installations outside the project site. The plaintiff ’s
cause of action against the second defendant is based on breach of contract by
virtue of the second defendant’s failure to properly supervise the first
defendant’s building work. According to the plaintiff, the second defendant was
not only aware of the defective workmanship of the first defendant, but
deliberately failed to intervene and stop the defective building work alternatively
failed to demand that manifest defective building work b y the first defendant be
remedied forthwith.
10. The damages in the amount of R 4 948 307.15 claimed by the plaintiff from the
first defendant represent the costs to re -build the road, the costs to repair the
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defective work, the aggregate amount by which interim payment certificates are
alleged to have been inflated and the amount claimed by the first defendant for
work which did not form part of the project. Payment of this amount is also
claimed from the second defendant on the basis that the breach of contract of
each defendant caused the plaintiff to suffer damages and that consequently
the first and second defendant are jointly and severally liable to pay the plaintiff
the amount claimed. In the alternative, the plaintiff pleads that the first and
second defendant are jointly liable for it its damages as such damages arose as
a direct result of the cumulative effect of each defendant’s breach of contract.
11. Three grounds of exception were taken in the second defendant’s notice of
exception dated 12 July 2023 but only two were ultimately advanced at the
hearing. Before considering these grounds, it would be useful to restate some
of the salient principles which apply to an exception taken on the basis that a
cause of action is legally unsustainable.
Legal principles
12. The exception procedure is by design an expeditious procedural mechanism
aimed at sifting out, at an early stage, claims which lack legal merit. The bar for
an exception to succeed on the basis that a claim is bad in law , is high. An
exception advanced on this basis may only succeed w here the excipient
satisfies the court that the cause of action or conclusion of law in the pleading
cannot be supported on every interpretation that can be put on the facts. 1 On
this score and unless they appear to be manifestly false, t he factual averments
by the plaintiff must be accepted as correct . It is not open to the court to
question their efficacy.2
13. An overly technical approach to exceptions s hould not be adopted lest it
destroys the benefits of the exception procedure, which itself requires a
1 Pretorius and Another v Transport Pension Fund and others 2019 (2) SA 37 (CC) at para 15.
2 .W v G.T (867/2021) [2023] ZASCA 23 (13 March 2023) at para 33 to 34.
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sensible approach.3 As advised in the oft quoted words of Davis J with Sutton
J concurring in Kahn v Stuart , in considering an exception, the evaluation of
pleadings ‘..through a magnifying glass of too high power’, is to be avoided.4
14. To this must be added two further well established principle s relating to the
forensic utility of the exception procedure. The first is that a n exception to a
legally unsustainable cause of action is designed to dispose of the case in
whole or in part by obtaining a decision on a point of law and thereby avoid the
leading of unnecessary evidence at the trial. 5 The second is that courts are
reluctant to decide on exception questions relating to the interpretation of a
contract or disputes concerning the terms of agreements which are disputed,
ambiguous or uncertain.6
The first ground of exception
15. The plaintiff pleads at paragraph 45 of its particulars of claim that it was a tacit
alternatively a legally implied term of the engineering contract that the second
defendant would perform the functions and services of the ‘ Employer’s Agent’
as defined and described in the GCC, in respect of the project.
16. The first ground of the exception is that the plaintiff’s reliance on the tacit term
pleaded at paragraph 45 of its particulars of claim is precluded by what the
second defendant describes as a ‘whole agreement clause’, embodied by
clause 4 of the second defendant’s Standard Terms of Agreement . This clause
states ‘ This would set out the entire agreement between us .’ The second
defendant contends that it is therefore not open to the contracting parties to rely
on terms such as tacit terms, which are not contained in the written contractual
3 Telematrix (Pty) Ltd v Advertising Standards Authority SA 2001 (1) SA 461 (SCA) at para 3
4 Kahn v Stuart 1942 CPD 386.
5 Marais v Steyn and Another 1974 (3) SA 479 (T) at 486H-487G.
6 Sun Packaging (Pty) Ltd v Vreulink 1996 (4) SA 176 (A) at 186J ; Francis v Sharpe & Others 2004
(3) SA 230 (C) at 237F.
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documents. Accordingly, the second defendant contends that insofar as the
plaintiff pleads that it relies on a tacit term and the breach thereof, the plaintiff’s
cause of action is incomplete and therefore excipiable.
17. Having regard to the factual matrix set out above and in the particulars of claim,
which at the exception stage must be accepted as correct , one may
immediately think it obvious that it is the second defendant who falls squarely
within the definition of ‘Employer’s Agent’ as defined in the GCC. After all, who
else would fulfill the functions of the ‘ Employer’s Agent ’ for the project other
than the consulting engineers whose very appointment was for the purpose of
construction supervision for the domestic roads and civil engineering services?
Indeed, it is that very obviousness which goes to the nature of a tacit term. A
tacit term in essence is a term that is so self -evident that is goes without saying
and where it is an actual and not an imputed tacit term, it is one which arises
‘…if both parties thought about a matter which is pertinent but did not bother to
declare their assent.’7
18. Mr. Coetsee, who appeared on behalf of the second defendant, however
submitted that the terms of the whole agreement clause in the engineering
contract were clear and unambiguous . He contended, based on Union
Government (Minister of Railways) v Faux Ltd 8 and Cassim v Kadir 9, that
reliance on a tacit term is impermissible where the contract is complete and
detailed and needs no addition in the form of an implied term. The plaintiff’s
reliance on an alleged tacit term, so it was argued by the second defendant ,
was therefore not sustainable in law. The submission advanced was that whole
agreement clause precluded the plaintiff from relying on tacit terms which,
according to the second defendant, by their very nature were not contained in
the written contract documents. The argument is without merit. An established
7 Wilkens NO v Voges 1994 (3) SA 130 (A) at 136H.
8 Union Government (Railways) v Faux Ltd 1916 AD 105 at p 112.
9 Cassim v Kadir 1962 (2) SA 473 (N) at 475B.
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tacit term, actual or implied, forms a part of and not a conceptually separate
component divorced from the written contract itself. As is apparent from
Wilkens NO v Voges 10, a tacit term once found to exist, ‘… is simply read or
blended into the contract: as such, it is contained in the written deed.
19. I am in any event unpersuaded that the whole agreement clause called in aid
by the second defendant , is dispositive of the tacit term relied upon in the
plaintiff’s cause of action against the second defendant. Firstly, t he SCA has
held that a ‘ whole agreement’ or ‘sole testimonial’ clause does not necessarily,
of itself, exclude the existence of a tacit term. 11 Secondly, I am in agreement
with the submissions advanced by Mr. Vivier SC, for the plaintiff, that far from
the whole agreement clause being as clear and unambiguous as contended by
the second defendant, a number of other provisions of the constituent
documents comprising the engineering contract, in fact suggest the opposite.
20. It is apparent in this regard that the nature and extent of the consulting
engineering services to be performed by the second defendant, are not detailed
and circumscribed in the component documents which constitute the
engineering contract. Similarly, a determination of the standards according to
which the second defendant was to perform its services, would by virtue of the
second defendant’s quote, have to have regard to inter-alia the requirements of
the Saldanha Bay Municipality, ‘relevant SANS codes’ and ‘relevant good
engineering practices.’
21. The determination of these aspects would necessarily involve evidence and a
determination by the trial court of the question whether the words used in the
whole agreement clause, that the Standard Terms of Agreement ‘… would set
out the entire agreement between us’, ought to bear their ordinary grammatical
10 Wilkens NO v Voges 1994 (3) SA 130 (A) at 136H.
11 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at 144, quoted
with approval in Adhu Investments CC and Others v Padayachee (1410/2016) [2019] ZASCA 63 (24 May
2019) at para 17.
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meaning. It is well established however that q uestions concerning the
interpretation of a contract are not appropriately resolved by way of exception.12
22. A further submission was advanced by Mr. Vivier SC that the first ground of
exception would not dispose of the case in either whole or part, as the plaintiff
would still be able to rely on the same provision but on the basis that it is a
legally implied term of the engineering contract. To that extent, so it was
argued, the first exception, if upheld, would not achieve the purpose of an
exception. That purpose is to avoid the leading of unnecessary evidence at the
trial by disposing of the claim on a point of law. 13 The submission is in my
opinion well-founded. It means that upholding of the second defendant’s
exception would make no difference to the evidence to be led at the trial as the
plaintiff would merely rely on the same provision which it has pleaded in the
alternative as a term of the engineering contract implied by law. A term implied
by law is not excluded by a clause stating that the written contract constitutes
the sole record of the agreement between the parties. 14
23. An exception which fails to expose the assailed cause of action as being bad in
law and which fails to end the case advanced on that basis, does not achieve
the purpose for which the procedure was designed. The first ground of
exception in my view falls within this category.
The second ground of exception
24. As to its claim for joint and several liability in respect of the first and second
defendants, as stated above, the plaintiff pleads that the damages which it has
suffered were caused individually by the first defendant’s breach of the building
contract and the second defendant’s breach of the engineering contract. The
plaintiff pleads that although it entered into separate and individual contracts
12 Sun Packaging (Pty) fn 6 above at 186J.
13 Marais v Steyn and Another 1974 (3) SA 479 (T) at 486H-487G.
14 Van Nieuwkerk v Mcrae 2007 (5) SA 21 (W) at 28H.
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with each defendant, it was the breach of contract by each defendant which
caused the plaintiff to suffer damages and that consequently the first and
second defendants are jointly and severally liable to pay the amount of R 4
948 307.15 to the plaintiff.
25. Alternatively, the plaintiff pleads that the first and second defendants are jointly
liable by virtue of its damages being resulting from the cumulative effect of each
defendant’s breach of contract.
26. By its second ground of exception , the second defendant contends that the
claim for joint and several liability is legally unsustainable as there is no valid
legal basis for holding the defendants jointly and severally liable for their
respective breaches of separate contracts. The second defendant submits that
absent an express contractual term to that effect or a legal principle recognizing
joint and several liability, such claims against the defendants are excipiable.
27. The nature and extent of the duty of an engineer party to a professional
services engineering contract was addressed by the S upreme Court of Appeal
per Farlam JA in Van Immerzeel & Pohl and Another v Samancor .15 In that
case as in the present, the employer had concluded a contract with a firm of
consulting and civil engineers to render professional services required for the
supervision of the installation of works in terms of a construction contract. The
court held that the engineer had failed to perform its supervisory function in a
proper and professional manner and that it failed to take reasonable steps to
ensure that the construction work was performed in accordance with the
provisions of the construction contract. In the context of th is case, the following
statement by Farlam JA in Van Immerzeel is in my view apposite with regard to
joint liability of a builder and an engineer for damages caused by virtue of their
independent breaches of contract:
‘…The correct position is that the engineer and the firm are
independently liable for the same or similar damage. The plaintiff’s
causes of action against them are separate and independent based
15 Van Immerzeel & Pohl and Another v Samancor 2011 (2) SA 90 (SCA).
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upon two separate if inter-connected contracts.’16
28. The Court went on to quote with approval, as being a correctly reasoned
principle of our law, the following passage from the judgment of the Court of
Appeal in Hutchinson v Harris17:
‘….where the duty of a contracting party is to supervise the work of
another contracting party, it seems to me there is a direct casual
connexion between the supervisor’s negligent failure to prevent
negligent work, and the damage represented by that negligent work.
No doubt the builder is also liable. It is a case of concurrent breaches
of contract producing the same damage. In my judgment the plaintiff
has an action against both, although she cannot obtain damages twice
over.’
29. The second defendant’s focus on the separate nature of the two contracts fails
to take into account the inter -connected nature of the contracts. This includes
the nature of the second defendant’s obligation in terms of the engineering
contract, which was to supervise and manage the execution of the works
required for the project. The joint liability of a building contractor for defective
building work and a professional engineer for failing to detect or prevent such
damage in accordance with his supervisory functions, has in my view been
established by the principles set out by the SCA in Van Immerzeel. They are
both liable for the same or similar damage resulting from independent breaches
of separate but inter -connected contracts. This recognition of liability is in my
view consistent with public policy , constitutional values and the important
responsibilities and duties of professional engineers, a profession which is itself
subject to statutory regulation.18
16 Van Immerzeel at para 76.
17 Hutchinson v Harris 1978 10 (BLR 19.
18 In terms of the Engineering Profession Act 46 of 2000.
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30. The second defendant’s contention that the law and the contractual setting
pleaded by the plaintiff precludes a claim for joint and several liability or joint
liability against the defend ants, is for these reasons without merit. The second
ground of exception accordingly fails as well.
Order
31. The second defendant’s exception is dismissed.
32. The second defendant is ordered to pay the plaintiff’s costs on scale C.
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S G MAGARDIE
Acting Judge of the High
Court
APPEARANCES
For Plaintiff: P de B Vivier SC
Instructed by:
Lucas Dysel Crouse Inc
For Second Defendant: D J Coetsee
Instructed by:
Everinghams Inc
Date of hearing: 3 May 2024
Date of judgment: 13 August 2024