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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO DIVISION, POLOKWANE)
(1) REPORTABLE: ¥ES-/ NO
(2) OF INTEREST TO THE JUDGES: ¥ES-/ NO
(3) REVISED.
Signature
In the matter between:
MENP TRADING PROJECTS CC
(Registration number:2007 /018258/23)
And
MIMED(PTY)L TD
(Registration number:2014/131627/07)
JUDGMENT CASE NO:7126/2021
PLAINTIFF
DEFENDANT
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MPHAHLELE AJ
A. INTRODUCTION
[1] This case is concerned with answering whether the Plaintiff MENP Projects cc.
is entitled to damages as claimed, On the 10th July 2021, the Plaintiff and
Defendant entered into a Service Level Agreement. The said Agreement was
termed 'version 1.1 ', due the parties having concluded an earlier version of the
Agreement on the 16th May 2019. The Agreement between the parties was for
duration of 12 months (twelve) months, whereafter it could be automatically
renewed unless terminated with 60 (sixty) days' notice. The Plaintiff was at all
times represented by Mr. Mziwandile Nombula, who is the director of MENP
Trading Projects.
[2] In terms of the Agreement overview, the Plaintiff was appointed to provide the
Defendant Mimed (Pty)Ltd with Radiology services to support and sustain
occupational health services of Mimed. The dispute arose after Mimed Pty Ltd
emailed and terminated the Agreement on the 19th July 2021, which notice was
signed by Dr. Michael Dzivhani the Director of Mimed (Pty) Ltd. The Plaintiff
proceeded with claim A, where Claim B was conceded and not in dispute.
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B.BACKROUND
[4] The Agreement entered between the parties was for a period of from the 01 st July
2021 and was valid for a period of 12 month and reviewed once a year, with both
parties responsible for the facilitation. The Agreement was for the rendering of
Radiology services. The services covered by the Agreement included Primary
health Radiology services; Occupational Health Radiology Services; Radiology
Reports on all Primary Radiology Services; IOD (Injury on Duty) Radiology
Services.
[5] Mimed had the responsibility to ensure payment of all support costs and make
available Mimed (Pty) Ltd representative when resolving a service-related
incidents. MENP Trading Projects was responsible for meeting response times
associated with service -related incidents; Appropriate notification to Mimed Ltd
(Pty) Ltd for all scheduled maintance; Ensuring that resources are available for all
requests by Employer.
[6] The Agreement had Annexures which specified general information as Schedule
1, which specified the duration of 12 (Twelve months) starting on the 0P1 July 2021
with end date of 30 June 2022.The Notice termination date of 60 (Sixty) days, and
the Notice of renewal also 60 (Sixty) days. Annexure B of the agreement provided
for rates while 'Annexure C' provided for the rates payable. Which will appear later
to be interpreted differently by the parties.
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[7] According to clause 1.1 on Annexure 8, which contained the rates applicable in
the contact that-:
"1.1.1 MENP will provide Occupational Health X-Rays (PA Chest) for capitation fee
of R 65000. 00(Excluding Vat) per month irrespective of the number of clients referred
for Black Chrome Mine employees".
[8] According to clause 1.2 Primary Health X-Rays, which clause provided that-:
"'1. 2. 1 All primary health -Rays will be treated privately and MENP Trading projects
is responsible for claiming from patients or third parties (Medical Aid) MENP Trading
Projects will use its normal X-Ray price list. Discounts will be negotiated between
MENP and Patient".
[9] The Plaintiff's Claim is founded on the fact that the Defendant had not given the
appropriate Notice in line with the Agreement and further that the Plaintiff suffered
damaged as a result of the termination of the agreement. It is the plaintiff's
submission that: The Plaintiff provided the Defendant with operational facilities; X
ray room matching radiation board standards, lead linings, doors and windows
which would remain the property of the Plaintiff. The Defendant was to provide the
electricity, water, in-house cleaning services, landline phones and internet as well
as maintenance. The X-ray equipment was maintained by the Plaintiff as it was its
X-ray equipment, as specialised technicians were required and booked in advance
to service X-ray equipment.
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[1 0] The Plaintiff therefore claimed the amount of R780 000.00 (Seven hundred and
Eighty Rands) from the Defendant due to the unlawful termination of the
Agreement, in that the Defendant failed alternatively refused to afford the Plaintiff
60 (sixty) days termination Notice period as stipulated in the Agreement. This
amount is calculated based on the R65 000.00 (sixty-five thousand rands) per
month capacitation fee multiplied by the 12 (twelve) month period.
[11] The Plaintiff submitted that the fact that Black Chrome Mine was undergoing
liquidation is not Force Majeure event in terms of the Agreement between the
Plaintiff and Defendant, but in the submission acknowledge that the liquidation of
the company is rather something that makes it difficult or uneconomical for the
Defendant to perform.
C. MERITS
[12] The Defendant raised the following defenses :
a. Force Majeure -The Defendant's raised the defence that it was impossible to
perform in terms of the contract. The impossibility was resulted in the Black
Chrome mine closure and liquidation.
b. It is further the Defendant 's submission that the Agreement entered does not
contain a clause bearing the risk of impossibility .
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[13] I have looked into the sequence of events leading to the termination of
Agreement as testified by the both the Plaintiff and Defendant. The Defendant had
written a letter to the Plaintiff on the 19th July 2021, the letter addressed to MENP
Trading Projects and addressed to Mr. Nombula which on paragraph 1 & 2 of the
Letter reads:
[14] "We regret to inform you that we will no longer be needing your services in
terms of the SLA Agreement in place with MIMED (Pty) Ltd effective by July 2021.
The decision to terminate I on the basis of a force majeure events occurring at Sail
Consulting (Pty) Ltd known to you as Black Chrome Mine. After receiving instant
and unexpected notification form them indicating they are undergoing liquidation
at this current moment, we fear that it will no longer be relevant for Mimed to
sustain the SLA Agreement in place as the required services were mainly on the
basis of our agreement with the mine".
It is important to note that the contents of the letter and the termination of the SLA
are common cause to the parties as well as the termination letter.
[15] The Defendant led evidence by Dr. Dzivhani who is the sole Director of Mimed
(Pty) Ltd led evidence for the Plaintiff and testified that his company did enter into
an agreement with MENP Trading Projects. He is a qualified Doctor with medical
degree and a Master's in Business. the company Mimed was awarded a contract
to render occupational services to Black Chrome Mine and a service of a
Radiographer was required. As a result of the contract an earlier version of the
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contract was entered between the parties, which was termed Version 1.0 entered
in 2019 and that version is not in dispute.
[16] According to him he had admitted to knowledge of all of the terms of Agreement
between his company and the Plaintiff. However, the dispute arose out of the
Capitation fee clause, according to him the capitation fee clause was only for Black
Chrome mine. Accordingly, if the contract between Mimed and Black Chrome Mine
is terminated, the agreement between the Plaintiff and Defendant would not be
possible to maintain a monthly capitation fee of R 65000.00(Sixty-Five Thousand
Rands) monthly. It is important to note that the defendant did request the meeting
to discuss further meeting with the Plaintiff to discuss further services that may be
required which clause read:
"However, we kindly request a meeting a meeting wherein we may sit and discuss
requirements of your services on the basis of the limited requirements we are
anticipating in the coming months".
The evidence provided to this court is that there was never any meeting between
the Parties regarding the contents of the Contract after the Notice.
[17] According to the Defendant, there were various patients to be assisted under
the contract, which were the Black Chrome Mine Clients and other Patients, who
will be billed privately either through 100 (Injury on Duty) procedures and others
through direct cash payments directly to the plaintiff. The aspect of the billing and
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the monthly Capitation fee(retainer) was the main dispute as the Plaintiff had
testified that the Capitation fee was applicable to all patients irrespective of
whether the patients were from black chrome mine or not.
[18] During Cross-Examination, the Plaintiff when asked about the various cash
payments received, the Plaintiff confirmed that there were certain cash payments
received from various other patients which either paid cash or by medical aid. This
was shown on the sample of schedule of patients attended to by Mimed Trading
Projects. (P 76 -Trial bundle)
LIQUIDATION OF BLACK CHROME MINE
[19] The Defendant raised a defence of Force Majeure and submitted that the
impending liquidation of Black Chrome mine made it impossible to perform,
according to Dr. Dzivhani the agreement with MENP Trading Projects became
impossible to perform due to the unforeseen circumstances which occurred at
Black Chrome Mine (BCM), when he was advised by the nurses that were placed
at the Black Chrome Mine that the gates were closed. It later appeared that the
gates were closed due to the liquidation of the mine. A letter dated 21st July 2021
from Metrust Liquidators was referred to stating the following:
"SAIL CONTRACTING (PTY)LTD (IN LIQUIDATION)
We confirm that the above company was placed in liquidation on the 05th July 2021
and Klein was the appointed as a joint liquidator with the Master of the High Court,
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together with K. Monyela, YM Hassen Harms and Hajee-Osman. A provisional
certificate of Appointment was issued by the Master".
[20] The Liquidation of Sail Contracting which was trading as Black Chrome Mine
had affected the agreement between the Plaintiff and the Defendant in that the
Defendant would not have patients to refer to the Plaintiff under the capitation fee,
according to the Defendant. There was an acknowledgement that the closure of
Sail Contracting was not going to affect other cash paying patients, only the Black
Chrome Mine patients were affected. The defendant did acknowledge that private
patients and other cash paying patients were not affected by the closure. He further
confirmed that after the closure of Black Chrome Mine, the patients that were
referred to the Plaintiff were primary health care patients. It was the plaintiff's
evidence that he was not forced to move, however, the Plaintiff moved his property
from the venue on his own as it was not going to economical for him to proceed to
service only private patients.
[21] The question that is with the court is whether the Capitation fee was for the
whole Agreement or only Black Chrome Mine? To answer that I had a look into the
payment clauses in the Agreement. According to clause 1.1 on Annexure B, which
contained the rates applicable in the contact that-:
"1.1.1 MENP will provide Occupational Health X-Rays (PA Chest) for Capitation
fee of R 65000. 00(Excluding Vat) per month irrespective of the number of clients
referred for Black Chrome Mine employees ".
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I do accept that the Defendant's version that the Capitation Fee of R 65000.00 was
for Black Chrome Mine Employees as stipulated. The impending Liquidation of the
Black Chrome Mine affect the performance and Rates in line with The Agreement?
And whether it made it impossible to still perform in line with the Capitation Fee
Clause in the Agreement? From the Agreement Clause on rates on Annexure B, I
am convinced that there were different rates from 1.1 to 1.4 being Occupational
Health X-rays (BCM); Primary Health X-rays (Private Patients); IOD X-Rays (IOD)
[22] The test for Force Majeure is clearly stipulated in the case of Nuclear Fuels
Corporation of SA (Pty) Ltd. v Orda Ag where the Learned Judge placed a test
on foreseeability of impossibility to perform cited Bischofberger v Van Eyk 1987
(2) SA 607 (W) at 611 B-D:
"When the Court has to decide on the effect of impossibility of performance on a
contract, the Court should first have regard to the general rule
that impossibility of performance does in general excuse the performance of a
contract, but does not do so in all cases, and must then look to the nature of the
contract, the relation of the parties, the circumstances of the case and the nature
of the impossibility to see whether the general rule ought, in the particular
circumstances of the case, to be applied. In this connection regard must be had
not only to the nature of the contract, but also to the causes of the impossibility. If
the causes were in the contemplation of the parties, they are generally speaking
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bound by the contract. If, on the contrary, they were such as no human foresight
could have foreseen, the obligations under the contract are extinguished. "1
[23] Upon closer look into the Agreement entered between the parties and the
evidence presented, there could have not been a foresight by the Defendant that
Black Chrome Mine would be liquidated. It is clear that no termination clause was
not included in the Agreement only termination Notice Period. The termination
clause would have made the Agreement easy to implement where either party
wishes to terminate the Agreement. It has been common to the parties that the
Notice Period is 60 (Sixty) Days.
D.QUANTUM
[24] The Plaintiffs claim B is for an amount of R780 000.00 (seven hundred and
eighty rands) from the Defendant due to the unlawful termination of the Agreement,
this amount was calculated based on the R65 000.00 (sixty-five thousand rands)
per month which was Capitation fee multiplied by 12 (twelve) month period.
[25] I find that the Plaintiff did not prove that damages in the amount of R
780 000.00 were suffered. The agreement was signed on the 01 July 2021 by the
parties and the Notice of termination dated 19th July 2021.Although in the evidence
1 (Nuclelar Fuels Corporation of SA (Pty) Ltd. v Orda Ag (412/94) (1996] ZASCA 108; 1996 (4) SA 1190 (SCA); (1997] 1 All
SA 11 (A); (25 September 1996), 1996)
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presented in court, the plaintiff pointed that there were other services rendered
after the termination date, It became clear that those services were arising from
the contract but not the Black Chrome mine patients. However, I find that the
Defendant was obligated under the Agreement to give the Plaintiff 60 Days' Notice
of the termination on reasons related to the liquidation of Black Chrome Mine.
[26] I hereby make the following Orders:
E. ORDER
CLAIM A
i. The claim of R 780 000.00 does not succeed
ii. The plaintiff's alternative relief does succeed as far as it relates to Notice
Period
iii. The Defendant is ordered to pay the Plaintiff an amount of R 130 000.00
(One Hundred and Thirty Thousand Rands)
iv. Interest at an applicable rate per annum Temporae morae
v. Cost of suit on attorney and own client scale
M.A. MPHAHLELE
ACTING JUDGE OF THE HIGH COURT,
LIMPOPO DIVISION, POLOKWANE
APPEARANCES
HEARD ON
JUDGMENT DELIVERED ON
COUNSEL FOR THE PLAINTIFF
INSTRUCTED BY
COUNSEL FOR THE DEFENDANT
INSTRUCTED BY 13
: 25TH MARCH 2025
: JUNE 2025
: ADV D. STRYDOM
RIVON IA GROUP OF ADVOCATES
: SEFUME ATTORNEYS
INCORPORATED C/O DU TOIT
SWENEPOEL , STEYN AND SPRUIT
: ADV J VAN ROOYEN
: KABELO MAFA ATTORNEYS INC