IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1) REPORTABLE: NO
(2) OF INTE REST TO OT HE R JU DGES . NO
(3) REVISED.
DATE 22/09 /20
In the matter of:
BOTSANG-LEDILE CONSTRUCTION & PROJECTS CC
And
THE MINISTER OF PUBLIC WORKS
CASE NO: 19928/2016
Plaintiff
Defendant
Delivered: This judgment is handed down electronically by circulation to the Par
ties/their legal representatives by email and by uploading to Caselines. The date and
time of hand-down is deemed to be 14:00 on 22 September 2025.
JUDGEME NT
LENYAI J
1
[1] The plaintiff instituted three claims against the defendant in respect of a building con
tract, where the plaintiff cancelled the contract as a result of alleged repudiation by the
defendant.
1.1 Claim A is for work executed to date of the cancellation of the contract;
1.2 Claim B is for damages and loss of profit due to the breach of contract; and
1.3 C laim C is for the return or release of retention money held as security by the
defendant.
[2] The following facts are common cause:
2.1 On 9th May 2011, the plaintiff submitted a tender for the construction of the new
Dube Police Station and residential quarters situated at Mabopane (the works);
2.1 On 13th October 2011, the defendant accepted the plaintiffs tender for the con
structions of the works for the amount of R20 712 143.58 (VAT included);
2.3 The building contract between the parties was governed by the JBCC Principal
Building Agreement ( Edition 4.1 of March 2005) (PBA), read with the Co ntract
Data and the Tender Bill of Quantities which included various amendments to
the PBA (the agreement);
2.4 GM Architects and Project Managers was appointed as the Principal Agent on
behalf of the defendant;
2.5 Gosiame Development Consultants was appointed as the Quantity Surveyor;
2.6 Mr Thapelo Mafabatho was appointed as the Project Manager in the Depart
ment of Public Works;
2.7 On 29th October 2013 GM Architects and Project Managers was placed under
liquidation and ceased to be the Principal Agent on 1"1 November 2013.
2.8 On 28th March 2014 the agreement was terminated by the plaintiff.
2
[3] The issues to be determined by the court are the following :
3.1 Whether the defendant breached the contract;
3.2 Whether the plaintiff was entitled to cancel the contract; and
3.3 Whether there are mon ies owed to the plaintiff by the defendant.
[4] The defendant raised two special pleas against the plaintiffs case.
(1) The first special plea was for non-compliance w ith section 3 of Act 40 of 2002
however the defendant abandoned this special plea.
(2) The second special plea was for non-joinder of the principal agent as an inter
ested party to the proceedings. The legal representative of the defendant sub
mitted in open court that the defendant is not persisting with this special plea.
[5] It is noteworthy to mention that the plaintiff abandoned claim A and proceeded only
with Claim B and C.
[6] At the onset of the proceedings, the defendant brought an application to amend its
plea by withdrawing an admission made in paragraph 11.1.3, to the effect that certifi
cate 27 relied on by the plaintiff was not issued by Gosiame Development Consultants.
The plaintiff accepted that the defendant could amend and reserved the right to cross
examine this issue later during the trial. The Court granted the amendment , and the
defendant was ordered to pay the costs of the amendment.
[7] There are three witnesses that testified in this matter, two on behalf of the plaintiff and
one for the defendant. I will now proceed to summarise the evidence of the witnesses.
[8] The first witness for the plaintiff was Ms Inge Pieterse who testified as an expert w it-
11000 . 6f1e; tootifiod that oho io a rcgiotorod Q uantity S urveyor, and h e r main duty ie to
calculate the costs of the contract. She testified that she had produced an expert report
on the instruction of the plaintiff and confirmed the correctness of her report.
3
[9] Ms Inge Pieterse testified that due to the fact that she did not have the full set of the
payment Certificates 1 to 26, she relied heavily on certificate 27 that was made avail
able to her by the plaintiff.
[1 O] She testified that the commencement date of the contract was the 13th October 2011
and the completion date according to her calculations was the 21 st October 2013. She
further testified that there were extensions to the contract which changed the comple
tion date to the 4th February 2014.
[11] Ms Inge Pieterse further testified that if a contract is cancelled, the final payment cer
tificate must be prepared or generated by the Principal Agent. She stated that the pay
ment certificate 27 was not signed by Gosiame Development Consultants.
[12] During her evidence in chief it was put to her that the defendant will say that the certif
icate she relied on was not a payment certificate and that it was not issued by Gosiame
Development Consu ltants. She was referred to another certificate with reference
"DM2 " which was issued and signed by Gosiame Development Consultants with a zero
amount payable. She confirmed that she relied on certificate 27 provided to her by the
plaintiff.
[13] She further testified that the plaintiff suffered damages due to the cancellation of the
contract and therefore the plaintiff is entitled to be compensated for the damages in
the form of profit and loss on the outstanding value of the contract. She adopted a
profit of 10% on the outstanding value of the contract and calculated the claim for profit
and loss in the amount of R608 154.42.
[14] Under cross examination it was put to her that the certificate 27 she relied on in pre
paring her report as well as her evidence, was not a payment certificate issued by
Go::,teime oeveIopment Co nsultants . Her response was that if the document she relied
on is incorrect, then the report is incorrect except for the security.
4
[15] She further stated that the payment certificate with reference 'DM2 " presented to her
by the defendant's legal representative during cross-examination, differs from the one
she relied on for her report, in that the value of work or amount reflected in both docu
ments differ. She testified that the payment certificate presented by the defendant to
her aligns with payment certificate 26, thus automatically meaning the certificate relied
upon in making her report is wrong.
[16] She acknowledged that the total value of work in the certificates, that is certificate 27
she worked on, and the certificate presented by the defendant differ. The one she
relied on had the value of total work done of around R11 Million while the one pre
sented by the defendant had a value of total work done of around R10 Million.
[17] She further conceded that when she made the calculations for profit and loss, she did
not factor in the penalties that would have been imposed on the plaintiff for the delay
had the cancellation never taken place. She testified that this was considering the fact
that after the 4th February 2014, a R4 000.00 penalty fee was to be imposed everyday
if the contract had not been cancelled.
[18] Under re-examination she confirmed that she had no idea about the origin of the doc
uments she relied upon when compiling her report. She further confirmed that the
value of the security on the zero certificate presented by the defendant differs from the
value of the security on the certificate 27 she relied on, and this means that the value
she calculated on her report would be slightly lower than it would be had she used the
certificate presented by the defendant.
[19] She further confirmed that the penalties were not factored in her calculations and that
there is no counter claim before the court regarding penalties. She also testified that
s h e was n ever o,a,kod to do any calculatlon:s relallng to any penalties.
5
[20] The second witness for the plaintiff was Mr Jeremiah Matlala and he testified that he
is the Managing Director of the plaintiff. He was the project manager for the construc
tion of the building of the police station in Mabopane .
[21] Mr Matlala testified that the site hand over to the plaintiff was done on the 21 st October
2011. He further testified that the payment certificate was issued on a monthly basis.
After a certain portion of work was done, Gosiame Development Consultants in their
capacity as quantity surveyor, would go on site together with some employees of the
plaintiff to observe the work done and verify the measurements. Thereafter the plaintiff
would prepare a valuation certificate on the template provided by the Department of
Public Works and send it to the Principal Agent. The Principal Agent if satisfied would
co-sign and send to the Department of Public Works and the plaintiff.
[22] He further testified that should there be any disputes regarding the information con
tained in the valuation certificate sent by the plaintiff to the Principal Agent, such would
be resolved, and the disputes and the solutions would then be reflected in the payment
certificate issued by the Principal Agent. He stated that after the plaintiff sent the cer
tificate 27 to the Principal Agent, they received a zero certificate from Gosiame Devel
opment Consultants. The plaintiff then received communication from the Principal
Agent on the 19th November 2013 indicating that it could not continue with the services
it was rendering on the project as it was placed in liquidation on the 29th October 2013.
He testified that payment certificates 24 and 25 were issued subsequent to that date
and the Department of Public Works paid the plaintiff.
[23] Mr Matlala continued to testify that the absence of a Principal Agent was problematic
for the plaintiff as it could not continue with its work. In January 2014 the plaintiff relied
for the plaintiff as it could not continue with its work. In January 2014 the plaintiff relied
on the JQCC a e,raement which G tip1.1l0tcd that El new FI f11Clpaf Agent nee0S (0 De ap-
pointed 10 days after the need arises or after the initial Principal Agent leaves. The
plaintiff then engaged the Department of Public Works regarding the appointment of a
6
new Principal Agent. This followed the fact that the liquidated Principal Agent was also
the Architect of the project, played a crucial role in this project as they were also re
sponsible for the designs which the plaintiff relied upon to continue w ith its work. The
absence of the Principal Agent led to delays in the project. These delays led to financial
burdens as there were unused resources on site which were charging money per pe
riod in which they were in the possession of the plaintiff. The delay in the appointment
of the Principal Agent is what led to the cancellation of the contract by the plaintiff in
accordance with the JBCC agreement, which allowed for cancellation where the client
is unable to pay or does not appoint a Principal Agent.
(24] He further testified that the plaintiff sent a letter dated the 12th March 2014 notifying
the Department of Public Works of its intention to cancel the contract, with the hope
that the Department will act with urgency and accelerate the appointment of a new
Principal Agent to avoid this cancellation. On the 28th March 2014 another letter was
sent through cancelling the contract in accordance with clause 38 of the JBCC agree
ment. He further testified that there was no evidence to support the defendant's version
that there was a new appointment of a Principal Agent prior to the issuing of the notice
of intention to cancel the contract. The Department of Public Works responded on the
15th April 2014 by delivering a notice to immediately vacate the site, and this was the
last communication between the parties.
(25] During cross examination it was put to Mr Matlala that the defendant's witness will
testify that the plaintiff was informed about the appointment of Gosiame Development
Consultants as the new Principal Agent and Quantity Surveyor on 12th March 2014. Mr
Matlala denied being informed as there was no notice sent to the plaintiff about the
appointment of Gosiame Development Consultants as the new Principal Agent. He
appointment of Gosiame Development Consultants as the new Principal Agent. He
further testified that there were some informal discussions between him and the de-
fendant's project manager about appointing Gosiame Development Consultants as the
new Principal Agent as well as the architect, however there was no formal engagement
7
regarding this issue as stipulated in the contract. He stated that he vehemently ob
jected against such appointment on the basis that there was a previous acrimonious
relationship between the plaintiff and the proposed Principal Agent and also that the
Mr Ogbugo was not an architect.
(26] Mr Matlala testified that he was informed that Gosiame Development Consultants had
attended at the site on the 12th March 2014 to be introduced as the new Principal Agent
however he was not informed as stipulated in the agreement. He confirmed that the
reason for the cancellation of the contract was the non-appointment of the Principal
Agent.
[27] It was put to Mr Matlala that the witness for the defendant will testify that Gosiame
Development Consultants was appointed as Principal Agent on the 9th March 2014. Mr
Matlala denied this and stated that it was never formally communicated to the plaintiff.
It was further put to Mr Matlala that a witness for the defendant will testify that an
inspection meeting was held at the site on the 12th March 2014 and Gosiame Devel
opment Consultants was introduced as the Principal Agent and plaintiff was repre
sented. Mr Matlala denied this.
(28] It was put to Mr Matlala that the plaintiff was required to comply with clause 15.3 of the
contract. He responded by stating that yes, the clause is noted. It was also put to him
that the witness for the defendant will testify that the project was 58.31 % complete
when the contract was cancelled, and therefore the plaintiff was not entitled to cancel
as the plaintiff was in material breach of the contract. He responded that that is not
correct and indicated that more than 70% of the work was completed. He further testi
fied that when the project started there were design problems which needed to be
addressed. This resulted in variations to the design and extensions of time for the
completion of the project.
8
[29] Mr Matlala further testified that there were many changes in the designs and the ma
terials to be used, and this had financial implications. He stated that the Principal Agent
did not factor some of these changes in his calculations hence the differences in the
claim by the plaintiff and the issued payment certificate 27 in the value of the work
done. He testified that the plaintiff raised these differences with the quantity surveyor,
and the plaintiff did not declare a dispute as per clause 40.1 of the contract.
[30] During re-examination Mr Matlala testified that the work still to be done by the plaintiff
at the time of the cancellation of the contract included finishings (fitting cupboards,
ceiling, counter and painting) and other things outside the building which still had to be
completed, such as the installation of the sceptic tank, since the designs had to be
changed by the Department's team.
[31] The third witness was Mr Emeka Ogbugo who testified on behalf of the defendant. He
testified that he has been a registered Quantity Surveyor since 1995 and has worked
in over 50 projects as a Quantity surveyor in construction projects of a similar nature
to the one in question. He further testified that he is a director in Gosiame Development
Consultants.
[32] Mr Emeka Ogbugo testified that Gosiame Development Consultants was appointed
as the new Principal Agent on the 9th March 2014 and assumed the dual role of Prin
cipal Agent and Quantity Surveyor for the project. On the 12th March 2014 there was
a site meeting, and minutes were taken. The minutes indicate that Gosiame Develop
ment Consultants was introduced to the attendees as the newly appointed Principal
Agent and it was also indicated that they will also be the architects for the project.
[33] It was put to Mr Emeka Ogbugo that Mr Matlala denies that Gosiame Developments
c onsultants was tne new1y appo1nteo Frlnc1pa1 Age nt. He tesuneo lllal on u,e nrst site
c onsultants was tne new1y appo1nteo Frlnc1pa1 Age nt. He tesuneo lllal on u,e nrst site
visit all the parties involved on the project were invited and they all attended. The plain
tiff was represented by Mr L Kgaditse, and he signed the attendance register on behalf
9
of the plaintiff. He further stated that the minutes were sent to the email addresses of
the attendees as provided in the attendance register. He was adamant that Mr Matlala
is not telling the truth when he says that the plaintiff was not aware of the meeting. It
was further put to Mr Ogbugo that Mr Kgaditse was not the authorised representative
of the plaintiff, he was an employee of the plaintiff who happened to be on site on the
day in question and he could not speak due to a speech impairment and subsequently
passed away during the Covid-19 pandemic. He insisted that the plaintiff was repre
sented as stated earlier.
[34] He stated that the payment certificate relied upon by Ms Inge Pieterse in preparing her
report does not originate from Gosiame Developments Consultants. He further con
firmed that the Quantity Surveyor is the one who issues the payment certificate and
the Principal Agent then signs it when satisfied. He further testified that he is the one
who did the evaluation and measurements for the valuation for payment certificate 27
and found that there was nothing owed to the plaintiff. Furthermore, according to his
calculations as a quantity surveyor the percentage of the work completed by the plain
tiff as at 26th February 2014 was 58.31 % as indicated.
[35] It was put to Mr Emeka Ogbugo that Mr Matlala says that his calculation for the per
centage of work completed is conservative. His response was that there is a formula
stipulated on the valuation for payment certificate which was used to make the calcu
lations and the plaintiff had overclaimed on some of the work completed.
[36] During cross-examination it was put to him that ever since Gosiame Development
Consultants was appointed as the Principal Agent, there wasn 't any document issued
and signed. It was further stated Gosiame Development Consultants had never acted
in the capacity of a Principal Agent as the payment certifica te w a s n o t s igne d nor w a s
any other work done in that capacity. His response was that it was incorrect to say that
since the appointment as Principal Agent no work has been done by the plaintiff. He
10
reiterated that the appointment was on the 9th March 2014 and on the 12th March 2014,
there was a site meeting and minutes for that meeting were produced.
[37] It was put to him that the minute referred to did not have the email address for Mr
Kgaditse. He was asked if he had sent the minute to the plaintiff and his response was
that it was not sent by him personally.
[38] It was put to Mr Emeka Ogbugo that the valuation payment certificate 27 that was
signed by the Quantity Surveyor meant nothing as the payment certificate 27 was not
signed. His response was that there was no work done on site by the plaintiff and as
a result there was no need for payment.
(39] It was put to him that the contract obliges the Principal Agent to issue a payment cer
tificate even if it is a nil certificate every month until the final payment certificate. He
was asked if he did this. His response was that he did not, and the reason was because
the was no contractor on site and no work done by the plaintiff. He further stated that
you obey the law to the extent that it makes sense to you. He stated that one does not
go on site when the site is empty and there is no work taking place as you would be
returning the same certificate or even less due to work degradation and possible van
dalism.
[40] He was requested to indicate what he regards as the duties of a Principal Agent when
a contract comes to an end and also whether the Principal Agent's duties also come
to an end at that time. His response was that in normal circumstances, a Principal
Agent in a contract that comes to an end prepares a final account, which indicates the
financial transactions that took place during the project and who is owed and when
they will be paid. However , in a situation where the project was abandoned, the first
ona 1mmea11:ne outy 1s ro secure llle site ana start tne process of obtaining a new con
tractor to complete the project.
11
[41] He was requested to point out in the JBCC agreement the obligation he had described
above. His response was that his appointment by the Department is what guides him
and further pointed to paragraph 39.3.5 which stipulates that the Principal Agent shall
timeously commence and complete a final account. Counse l for the plaintiff stated that
should reliance be placed on section 39 for the cancellation by either party, the Princi
pal Agent shall forthwith issue a contract instruction specifying the continuation of the
work and protective measures to bring the wo rks to the specific point of cessation. He
asked Mr Ogbugo if he had issued such an instruction. He responded that his instruc
tion from the Department was for him to conduct a site inspection and compile a report,
which has been done. He further stated that since there was no contractor on site it
did not make sense to issue an instruction to a non-existent contractor. He also stated
that he had compiled a close out report which was submitted to the Department.
[42] It was put to Mr Ogbugo that he had disregarded his duties as Principal Agent by not
ensuring that the contractor received the status report as required by the JBCC agree
ment under clause 38. His response was that he understood the clause to mean that
he had to do a final account of the project at hand to establish what is due to the
employer as it is relevant for the completion of the final account.
(43] He insisted that he did compile a final account and also prepared a payment certificate.
He further stated that the invitation for the meeting of the 12th March 2014 was sent to
the companies, and the companies chose for themselves who they sent to represent
them. He denied that he deliberately excluded Mr Matlala from the meeting.
(44] Mr Ogbugo further testified that in his capacity as Principal Agent he had issued two
recovery statements for penalties, both in the amount of R4 000. He also stated that
recovery statements for penalties, both in the amount of R4 000. He also stated that
when he was conducting his investigation of the site. he does n o t recall seeing any
thing of value left in site by the plaintiff.
12
[45] During re-examination he reiterated that he received a letter of appointment as Princi
pal Agent via telefax from the Department dated the 9th March 2014. He further stated
that after the appointment as Principal Agent there were no architectural problems.
[46] He further confirmed that before the plaintiff sent their letter of the 9th March 2014,
giving notice of their intention to cancel the contract, the position was that there was
very little activity on site as stated in payment certificates 26 and 27. He stated that for
the plaintiff to achieve practical completion of the work, the value of the work per month
that would have to be done for it to complete on time would be approximately R900 000
per month.
[47] He further stated that the purpose of the payment reduction was to provide security for
the completion of the project should the work not be completed by the contractor. The
employer can rely on the security for the completion of the project.
[48] The plaintiff argued that the defendant had breached the contract by not comp lying
with clause 38.1.1 which requires the defendant to appoint a new Principal Agent within
10 days of the need arising. The defendant on the other hand insists that by the time
the plaintiff sent its notice of intention to cancel the contract on the 12th March 2014
and the subsequent cancellation on the 28th March 2014, it had already appointed the
Principal agent on the 9th March 2014.
[49] The plaintiff further argued that the letter of appointment was not sent or copied to Mr
Matlala on its behalf. The plaintiff submitted that one would have expected the defend
ant to immediately act when they received the letter from the plaintiff on the 12th March
2014. The site was no longer operational during that time and the meeting that was
held on the same day on site to introduce the new Principal Agent was not attended
b y it
13
[50] The defendant on the other hand argued that there were discussions with Mr Matlala
where the intentions of the defendant to appoint the new Principal Agent were dis
closed and he also had the opportunity to raise his objections and concerns regarding
the proposed new Principal Agent. The defendant also argued that the new Principal
Agent did hold a meeting on site to introduce itself to all the stake holders on the
project including the plaintiff. The plaintiff was represented by Mr Kgad itse on the same
day that the plaintiff sent their notice letter of cancellation of the contract. The minutes
were produced and sent to all in attendance. Coincidentally the plaintiffs witness un
wittingly corroborated the defendant's evidence, that there were discussions regarding
the appointment of a new Principal Agent, although it insists that these discussions
were informal.
(52] I am of the view that in order to properly adjudicate whether the plaintiff validly can-
celled the contract, the court has to follow the principle laid out in the matter of Natal
Joint Municipal Pension Fund v Endumeni Municipality 2012 4 SA 593 (SCA) at
paragraph 7 where the court stated as follows:
" ... Whatever the nature of the document, consideration mu st be given to the language
used in the light of the ordinary rules 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. The process is objective
not subjective. A sensible meaning is to be preferred to one that leads to insensible or
unbusinesslike results or undermines the apparent purpose of the document".
(53] After careful consideration of the pleadings, the evidence and the arguments by the
legal representatives of the parties. it is probable that the plaintiff was aw.:rn;, that th,;,
defendant had appointed a new Principal agent on the 12th March 2014. This is so
because there were earlier discussions between Mr Matlala and the representative of
the defendant about the intention to appoint Gosiame Development Consu ltants as the
14
new Principal Agent as well as the architect. Mr Matlala had an opportunity to raise his
objections, during the first site visit on the 12th March 2024 for the new Principal Agent
to introduce itself to all the stakeholders in the project, the plaintiff was represented.
Save to dispute that plaintiff never received the minutes of the meeting, the presence
of one of its employees at the meeting was not disputed.
[54) In applying the Endumeni principle in interpreting the contract at hand one must not
be overly technical in interpreting the contract. The contract must be interpreted in a
businesslike manner which takes into consideration all the aspects including the con
duct of the parties during the critical time after the initial Principal Agent was placed
under liquidation. The plaintiff was in discussions with the defendant regarding the
appointment of a new Principal Agent. The plaintiff cannot now claim that it was not
given an opportunity to object on the appointment of Gosiame Development Consult
ants when by Mr Matlala's testimony, he had vehemently objected to the appointment
of Gosiame Development Consultants. The defendant's witness had testified that all
the stakeholders were invited to the site visit on the 12th March 2014 and they were all
in attendance when Gosiame Development Consultants introduced itself as the new
Principal Agent who was appointed on the 9th March 2014. Despite this knowledge the
plaintiff did not take the opportunity to object as indicated in clause 5.4 of the agree
ment.
[55) The court is therefore of the view that the plaintiff did not validly cancel the contract as
by the time it issued the notice of intention to cancel the contract on the 9th March 2014
and its subsequent cancellation of the contract on the 28th March 2014, the defendant
had already appointed the new Principal Agent on the 9th March 2014.
(56) The other issue that the court has to d ete rmine is wh e the r the pla intiff was e ntitled to
cancel the contract. The defendants pleaded and argued that clause 38 states that the
contractor may not cancel the agreement if it is in material breach of the contract. It
15
was submitted that the purported cancellation of the agreement by the plaintiff smacks
of opportunism on its part.
[57] Mr Ogbugo testified that at the time of the cancellation of the contract, the plaintiff had
only completed 58.31 % of the works for purposes of practical completion. This per
centage was established by the quantity surveyor by applying a formula clearly indi
cated on the Valuation payment certificate 27. Furthermore, his evidence was not con
tested during cross-examination, and it remained unchallenged. The plaintiff without
submitting anything more expects the court to accept that it has completed 70% of the
works.
(58] After careful consideration of the pleadings, testimony and arguments in court the court
finds that the plaintiff was in material breach of the agreement and was therefore not
entitled to cancel the agreement in terms of clause 38 of the agreement.
[59] In the circumstances, I make the following order:
1. The action by the plaintiff is dismissed with costs including the costs of two counsel.
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
16
Appearances
Counsel for Plaintiff:
Instructed by
Counsel for Defendant
Instructed by
Date of hearing
Plaintiffs Heads of Argument.
Defendant's Head of Argument
Closing Arguments
Date of Judgment
Adv P Ellis SC
Weavind & Weavind
Adv T W Bester SC
& Adv A M Jozana
State Attorney Pretoria
4 & 5 February 2025
17 February 2025
17 February 2025
25 April 2025
22 September 2025
17