REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER suDcEs:fOy\
(3) REVISED: NO ar) ‘
Date: 26 August 2025 Signature: WEY
Case no. 37332/2018
In the matter between:
DEVELOPMENT BANK OF SOUTHERN AFRICA PLAINTIFF
And
FUSION GUARANTEES (PTY) LTD 487 DEFENDANT
REITY TRADING ENTERPRISES CC 2ND DEFENDANT
Coram: Dlamini J
Date of hearing: 10 April 2025
Delivered: 26 August 2025 — This judgment was handed down electronically
by circulation to the parties' representatives via email, by being
uploaded to CaseLines, and by release to SAFLII. The date and
time for hand-down is deemed to be 10:30 in 26 August 2025
JUDGMENT
DLAMINI J
Introduction
[1] In this matter, the plaintiff, the Development Bank of SA (“DBSA’”), instituted
action against Fusion Guarantee, the first defendant (‘Fusion’), and Reity
Trading, the second defendant, claiming payment of R3 370 640.74, from the
first defendant, based on the performance guarantee issued by the first
defendant, and a sum of R 12 237 633. 67 from the second defendant. The
second defendant has not entered an appearance to defend. The plaintiff
seeks a default judgment against the second defendant.
Background
[2] The common cause facts are as follows:-
[3] On 18 July 2014, the plaintiff awarded a contract (the Contract) to a joint
venture between the second defendant and an entity called Phumi HD
Construction CC (‘the Contractor’) for the demolition and additions of the new
administration block, dining and nutrition center, computer room and related
works at the New Waban Senior Secondary School, in Libode, Eastern Cape.
[4] In terms of the aforementioned Contract, the Contractor was required to
secure a performance guarantee on behalf of the Contractor in favor of the
plaintiff. The Contract consisted of the following;-
4.1 The Agreement, Contract Data, and the Special Conditions of Contract.
4.2 The General Conditions of Contract, the JBCC Series 2000 Principal
Building Agreement ( Edition 4.1 of March 2005) ( the JBCC).
[5] It seems that the Contractor was able to secure a fixed guarantee from the
first defendant in favour of the DBSA as security for the second defendant's
due fulfillment of the Contract.
[6] The plaintiff states that the Contractor provided a fixed guarantee in terms of
Clause 14 of the Contract, issued by Fusion as security for the due fulfillment
of the Contract.
[7] It appears that the Contractor struggled with the timely completion of the scope
of the Works. Consequently, the plaintiff extended the completion date to 6
August 2015. Despite this extension, the Contractor failed to meet the revised
practical completion date of 6 August 2015; therefore, the plaintiff cancelled
the Contract on 10 October 2015.
[8] After the cancellation of the Contract, DBSA issued a new tender and
appointed a new service provider to complete the project.
[9] According to the plaintiff, on the date of cancellation of the Contract, DBSA
avers that it had already paid the Contractor an amount of R15,079,071.00 in
the form of interim payments. The balance of the contract value was
R18,827,336.47. DBSA had withheld an amount of R762,852.90 as retention
in terms of the Contract. The contract value of the replacement contract to
complete the Works was R31,627,823.04. The plaintiff states that it thus