IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, GQEBERHA
NOT REPORTABLE
Case No.: 3466/2022
In the matter between:
AFRICAN HEIGHTS (PTY) LTD Plaintiff
and
COEGA DEVELOPMENT CORPORATION First Defendant
DEC K STEEL AND CONCRETE CC Second Defendant
KRISHNA RUBEN VENGADESAN NO Third Defendant
REINETTE STEYNSBURG NO Fourth Defendant
IN RE:
KRISHNA RUBEN VENGADESAN NO Third Excipient/Defendant
REINETTE STEYNSBURG NO Fourth Excipient/Defendant
and
AFRICAN HEIGHTS (PTY) LTD Respondent/Plaintiff
JUDGMENT
EKSTEEN J:
[1] This is an exception against the particulars of the plaintiff’s claim on the grounds
that it lacks averments necessary to sustain a cause of action. The excipients are the
liquidators of the second defendant, Deck Steel and Concrete CC (Deck Steel) . The facts
averred in the particulars of claim, which must be accepted for purposes of the exception,
are set out below.
Background
[2] The particulars of the plaintiff’s claim allege that the first defendant, the Coega
Development Corporation (Coega) entered into a written agreement (the main contract)
with Deck Steel during 2018, in terms of which Deck Steel undertook to fit bulk service s,
fire piping and other related services at the Z ibi Meyer Junior Secondary School in
Matatiele .
[3] Pursuant to its obligations under the main contract Deck Steel concluded a written
agreement (the subcontractor agreement) with the plaintiff, African He ights (Pty) Ltd
(African Heights) in February 2019 , in terms of which African Heights were appointed as a
domestic subcontractor to perform certain of the functions stipulated in the main contract
on behalf of Deck Steel. African Heights duly performed it s obligations under the
subcontractor’s agreement and , on 28 April 2021 , Deck Steel issued a project completion
certificate in respect thereof. African Heights issued an invoice in the sum of R2 254
505,99 to Deck Steel in respect of the performance of it s obligations under the
subcontractor’s agreement. Thereafter, on 28 July 2021 , Deck Steel concluded an out
and out written cession agreement (the cession agreement) with African Heights wherein
Deck Steel acknowledged their liability to African Heights i n the total amount of R2 254
505,99 and wherein it cede d all its right, title and interest in the payment of this amount,
owed to it by Coega , to African Heights . The material terms of the cession agreement,
which lies at the heart of the exception, provides:
‘1. That Deck Steel hereby cedes and transfers all its rights, title and
interest to African Heights in the sum of R2 254 505 .99 or in whatever
lesser amount owed to it by Coega at the final date of payment.
…
3. Deck Steel hereby authorizes African Heights to enforce its r ights
hereunder against Coega.
4. Deck Steel hereby authori zes Coega to pay the aforesaid amounts to
African Heights.
…
6. Should African Heights fail to recover the debit amount from Coega for
any reason whatsoever, then, Deck Steel or its successors i n title shall
be obliged to African Heights for the total debt amount.
…
10. This Agreement shall be binding upon administrators , assignees or
successors in title, as the case may be , of Deck Steel .’
[4] On 19 August 2021 , pursuant to the cession agreement, Deck Steel submitted a
‘direct payment form’ wherein it requested Coega to make a direct payment , on its behalf ,
to African Heights, in the amount of R1 793 117,25 ( one million seven hundred and ninety
three thousand one hundred and seventeen ra nd and twenty five cents ), including VAT ,
for the materials that were required and were installed in the construction and completion
of the main contract. The m aterial portion of the direct payment instruction issued by Deck
Steel records:
‘I hereby request the COEGA DEVELOPMENT CORPORATION to m ake a
direct payment on my behalf to AFRICAN HEIGHTS (PTY) LTD in the amount
of R1 793 117 .25 ONE MILLION SEVEN HUNDRED AND NINETY THREE
THOUSDAND , ONE HUNDRED AND SEVENTEEN RAND AND TWENTY
FIVE CENTS including vat for the materials that was required and installed for
the construction and completion of the above contract. …
Note: This is the final account and retention money inclusive.
I understand that should the supplier not be paid I still remain responsible and
liable for the settlement of the account.’
[5] Thereafter , Deck Steel was placed under liquidation on 23 March 2022 and,
accordingly, the third and fourth defendants, as liquidators of Deck Steel (in liquidation)
were joined as parties to the action. On 13 October 2022 Attorneys Ja fta, on behalf of
African Heights, reminded Coega of the said cession and demanded payment of the said
amount of R1 793 117,25. The letter of demand record, inter alia:
‘5. … [I]n terms of the said cession agreement, Deck Steel ceded and
transferred all its rights, title and in terests in the sum of R1 793 117,25
owed to it by Coega to our client.
6. Despite being informed of this cession , and despite you acknowledging
it, to date you have failed to pay the ceded amount to our client.
7. Long after the cess ion, and on or about March 2022, Deck Steel was
placed under liquidation.
8. Despite our client informing and reminding you and the liquidators about
the cession, the liquidators determinately included the ceded amount
belonging to Deck Steel such that you have to date not paid the money
to our client.
9. This money remains due, o wing and payable by you to client.’
[6] On the strength of these averments African Heights sought to hold Coega liable to it
for payment of the said amount and it alleged:
‘Notwithstanding demand, the first defendant (Coega) failed and/refused to pay
the plaintiff the aforesaid sum of R1 793 117,25.’
[7] It proceeded to allege, in the alternative, that it holds Deck Steel (in liquidation)
liable for the payment thereof, based on the subcontractor’s agreement.
The exception
[8] As I have said, the essence of the exception arises from the cession agreement.
The material portion of the notice of exception records:
“5. Clause 6 of the Cession Agreement reads as follows:
‘Should African Heights fail to recover the debt amount from Coega for
any reason whatsoever then, Dec k Steel or its successors in title shall be
obliged to African Heights for the total debt amount. ’
6. In terms of clause 6 of the Cession Agreement, the Plaintiff’s right of
action as against the Second Defendant only arises once it has failed to
recover the ‘ debt amount’ from the First Defendant.
7. The particulars of claim contain s no allegation that the Plaintiff has failed
to recover the ‘ debt amount’ from the First Defendant.
8. Conversely the Plaintiff’s claim against the First Defendant is an attempt
to recover the debt amount from the First Defendant other under the
main claim (being reliance on the cession ), or under the Plaintiff's
alternative claim … .’
9. Until the Plaintiff’s action agai nst the First Defendant has failed partly or
in whole, the Plaintiff has no cause of action as against the Second
Defendant.’
Discussion
[9] When an exception is brought on the basis that the particulars of claim lack
averments necessary to disclose a cause of action the excipient has the duty to persuade
the court that upon every interpretation which the pleading can reasonably bear, no cause
of action is disclosed.1
[10] As I have said African Heights seek payment , in the first instance, from Coega, who
they allege have failed and refused to pay. The claim against the third and fourth
defendants is an alternative, based on the sub-contractor agreement. As adumbrated
earlier the essence of the exception is to be found in the cession agree ment and in
particular in paragraph 6 thereof. Mr Cetywayo who appeared on behalf of the excipients
submitted that clause 6 effectively provides that African Heights could only look to the third
and fourth defendants for payment after they had exhausted t heir remedies against Coega
and, notwithstanding their endeavours, failed to recover. Ms Thom -Ndamase , on the
other hand, on behalf of African Heights, argued that paragraph 3 of the cession
agreement is merely an empowering provision that places no oblig ation on African Heights
1 Theuni ssen en andere v Transvaalse Lewendehawe Ko öp Bpk 1988 (2) SA 493 (A) 500; Lewis v Onenate
(Pty) Ltd and Another 1992 (4) SA 811 (A) at 817; and First National Bank of Southern Africa L td v Perry NO
and Others 2001 (3) SA 960 (SCA) at 965.
first to litigate against Coega. The rights of African Heights against Deck Steel arise when
Coega fails to pay and paragraph 20 of the particulars of claim allege that Coega had
‘failed and refused to pay ’, thus entitling African Heights to look, as it does, in the
alternative , to Deck Steel for payment. This, she submitted, was sufficient. The
difference, self -evidently, lies in the interpretation of the cession agreement, and in
particular clause 6. In Endumeni Municipality2 the SCA held:
‘Interpretation is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument, or contract, having
regard to the context provided by reading the particular provision or provisions
in the light of the document as a whole and the circumstances attendant upon
its coming into existence. Whatever the nature of the document, consideration
must be given to the language used in the light of the ordinary ru les of grammar
and syntax; the context in which the provision appears; the apparent purpose to
which it is directed and the material known to those responsible for its
production. Where more than one meaning is possible each possibility must be
weighed in the light of all these factors. ’3
[11] The approach necessarily calls for evidence to cast light upon the circumstances
attendant upon the document coming into existence, the apparent purpose to which the
provisions are directed , and the material known to those responsible for its production.
Thus, in Endumeni , Wallis JA expla ined4:
‘Sometimes the language of the provision, when read in its particular context,
seems clear and admits of little if any ambiguity. Courts say in such cases that
they adhere to the ordinary grammatical meaning of the words used. However ,
that too is a misnomer. … Most words can bear several different meanings or
shades of meaning and to try to ascertain their meaning in the abstract,
divorced from the broad context of their use, is an unhelpful exercise. The
2 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).
3 Para 18 .
4 At 609C -G.
expression can mean no more than that, wh en the provision is read in context,
that is the appropriate meaning to give to the language used.’
[12] Thus, it has been held that ‘it is the first princip le in dealing with matters of
exception that, if evidence can be led which can disclose a c ause of action alleged in the
pleading, that particular pleading is not excip iable. A pleading is only excipiable on the
basis that no possible evidence led on the pl eading can disclose a cause of action.’5
[13] It follows from this that an exception on grounds that the pleading lacks averments
necessary to disclose a cause of action cannot succeed unless it is shown that ex facie
the allegations made by the plaintif f and any document upon which his cause of action
may be based, the claim is (not maybe) bad in law.6 For these reasons exception is not
the appropriate procedure to settle questions of interpretation because evidence may
always be admissible at the trial to cast light on the correct interpretation of the contract.7
[14] The arguments of the contending parties , as I have said, suggest that the dispute
turns on the interpretation of the cession agreement. Prima facie , the interpretation that
Ms Thom -Ndamase has placed on the agreement finds some support in the direct
payment request which records that Coega will remain liable ‘should the supplier not be
paid’. But the interpretation turns on evidence of the factors to which I have referred
earlier .8 In the circumstances it cannot be determined on the exception.
[15] In the result, the exception is dismissed with costs.
J W EKSTEEN
5 McKelvey v Cowan NO 1980 (4) SA 525 (Z) at 526D -E.
6 Vermeulen v Goose Valley Investments (Pty) Ltd [2001] ZASCA 53; 2001 (3) SA 986 (SCA) at para 7.
7 Murray & Roberts Construction L td v Finat Properties (Pty) Ltd 1991 (1) SA 508 (A); and Sun Packaging
(Pty) Ltd v Vreulink 1996 (4) SA 176 (A).
8 Picbel Groep Voorsorg fonds (in liquidation ) v Somer ville and other related matters [2013] 2 All SA 692
(SCA), 2013 (5) SA 496 (SCA) para 39.
JUDGE OF THE HIGH COURT
Appearances:
For Excipients /
3rd - 4th Defendants: Adv Cetywayo
Instructed by: V Chetty Inc c/o
Goldberg & De Villiers Inc
GQEBERHA
For Plaintiff: Adv Thom -Ndamase
Instructed by: Jafta Z Attorneys c/o
Qhamani Sinefu Attorneys Inc
GQEBERHA
Date Heard: 2 May 2025
Date Delivered: 13 May 2025