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[2019] ZASCA 79
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Intech Instruments v Transnet Limited t/a South African Port Operations (1165/18) [2019] ZASCA 79; [2019] 3 All SA 357 (SCA) (31 May 2019)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 1165/18
In
the matter between:
INTECH
INSTRUMENTS APPELLANT
and
TRANSNET LIMITED t/a
SOUTH AFRICAN
PORT
OPERATIONS RESPONDENT
Neutral
citation:
Intech
Instruments v Transnet Limited t/a South African Port Operations
(1165/18)
[2019]
ZASCA 79
(31 May 2019)
Coram:
Majiedt, Dambuza,
Mathopo and Makgoka JJA and Plasket AJA
Heard:
13 May 2019
Delivered:
31 May 2019
Summary:
Contract – repudiation manifested by conduct –
motive irrelevant – status of interim certificates where
construction
contract lawfully cancelled by employer – cease to
be of force and effect – not self-standing claims separate from
remainder of contract.
ORDER
On
appeal from
:
Kwazulu-Natal Division of the High
Court, Durban (Koen J sitting as court of first instance):
1 The appellant’s
late filing of the record is condoned. The appellant is ordered to
pay the costs of the application
for condonation, including the costs
of two counsel where so employed.
2 The appeal is
dismissed with costs, including the costs of two counsel.
JUDGMENT
Majiedt JA (Dambuza,
Mathopo and Makgoka JJA and Plasket AJA concurring):
Introduction
[1]
The respondent, Transnet Limited (Transnet), through one of its
internal divisions, South African Port Operations (SAPO), is
responsible for the operation and management of South Africa’s
seven ports. There are 13 terminals in these seven ports.
Saldanha
Bay and Port Elizabeth ports have bulk handling terminals. Iron ore
is exported from Saldanha Bay and manganese ore from
Port Elizabeth.
[2]
During early 2006 the appellant, Intech Instruments (Intech), a sole
proprietorship, was awarded a tender for the refurbishment
and
upgrade of these two terminals. Disputes in respect of the execution
of the tender arose between the parties, culminating in
litigation in
the Kwazulu-Natal Division of the High Court in Durban (the high
court). By agreement between the parties, the trial
in the high court
before Koen J was confined to the Port Elizabeth project and an order
was made to that effect.
[3]
Intech alleged repudiation of the contract by Transnet, cancelled
same and sued Transnet for various amounts. Transnet, in turn,
alleged repudiation on the part of Intech, cancelled the contract and
counterclaimed for various amounts. After a protracted trial,
Koen J
dismissed Intech’s claim with costs and upheld Transnet’s
counterclaim, together with interest and costs. This
appeal is with
the leave of the high court.
Condonation
[4] Intech’s
attorneys filed the record out of time. Condonation was sought at the
hearing, but was opposed by Transnet. Its
main ground of opposition
was that the application was based entirely on inadmissible hearsay.
There is considerable merit in this
submission. And it is true that,
as was contended on behalf of Transnet, the application contains
inadequate averments in the founding
affidavit and the replying
affidavit was filed late without an accompanying condonation
application. We nonetheless granted condonation
in the interests of
justice. This matter originates from events in 2006 and involves
millions of Rands. Moreover, as stated, the
dispute between the
parties relating to the Saldanha Bay works is standing over,
presumably until finality is reached in the present
dispute. It is in
our view in the interest of all concerned that this appeal should be
finalised on the merits.
The factual matrix
[5]
The background facts are largely common cause or not seriously
disputed and are as follows. A global increase in demand for
bulk
commodities, particularly for iron and manganese, during the
mid-2000’s prompted Transnet, in consultation with mining
houses, to re-assess its export capacity. The demand for iron and
manganese was largely fuelled by a demand for steel by China’s
rapidly expanding economy.
[1]
Transnet consequently decided to effect significant expansion to its
export capacity in respect of, amongst others, iron ore and
manganese
ore. This entailed the expansion of both its rail network (operated
by its division, Spoornet, in respect of bulk commodities)
and its
export terminals at the ports. There is a dedicated iron ore rail
network on Transnet’s Sishen-Saldanha line and
manganese ore is
transported by rail from the Northern Cape mines to the Port
Elizabeth port. Given the circumscribed dispute in
the high court, I
will restrict the further discussion to the latter.
[6] After initial
studies, Transnet decided to invite tenders to refurbish its plant at
the Port Elizabeth manganese ore terminal
(the plant). An option to
tender, in addition, for the upgrade of the plant was included in the
invitation. Transnet’s invitation
to tender; Intech’s
response thereto by way of its letter of tender; and Transnet’s
acceptance of the tender (collectively,
the tender documents), are
crucial to the determination off the dispute. Before I deal with
them, however, it is necessary to explain
in broad outline how the
plant at the terminal operated.
The Port Elizabeth
terminal plant
[7]
The plant has two lines, referred to as ‘A’ and ‘B’.
On the import side, the manganese ore would arrive
by train at
tipplers A and B. The tipplers would tilt (or tip) the ore onto
conveyors which would transport the ore to the stackers.
Along the
lines one conveyor would discharge the ore into another conveyor at
transfer points which are located at 90 degree angles
on the lines.
These transfer posts are referred to as T1, T2 and so forth until T9.
The ore is poured onto stockpiles by the two
stackers, A and B,
through conveyors.
[8]
The export side commences when ore is reclaimed from the stockpiles
by the reclaimers. The ore is reclaimed from a specific
stockpile as
is required by the ship to be loaded. Once reclaimed from the
stockpile, the ore runs along the two lines on conveyors
past the
transfer points in the direction of shiploaders A and B. Transfer
points T8 and T9 are the closest to the shiploaders.
The shiploaders
have bogies which run on wheels and a gantry-like structure on top.
Conveyors would transport the ore within the
gantry towards the
loading boom from where it drops into the hold of the ship.
[9] Three important
features of the operation of the plant bear mention. First, the
stackers, reclaimers and the shiploaders are
huge structures (in
evidence the shiploaders were referred to as ‘superstructures’).
They consist of complex machinery,
operated individually from control
rooms located on the various structures. Central monitoring and
control is effected from a central
control room from which the entire
import and export operation can be monitored. Second, the entire
operation ran on an expansive
conveyor system past the various
transfer points, first to the stockpiles and then to the ships. And
third, due to the large machinery
and conveyors with moving parts,
the manganese dust and the need to work at height, safety was
paramount at the plant.
The tender and its
execution
[10]
Transnet issued the tender during September 2005. As stated, it
called for the refurbishment, alternatively the refurbishment
and
upgrade of the plant. In respect of the refurbishment, Transnet’s
main requirement was to ‘. . . maintain the current
handling
rate of 1 500 tons per hour, and alignment of the complete system so
that at least the mandatory requirements pertaining
to safety of
personnel and equipment engaged in the terminal are met. The
objective is to complete the project within 12 months
but not
exceeding 18 months’. In respect of the refurbishment and
upgrade option Transnet’s invitation to tender stipulated,
as
main requirement, to ‘. . . refurbish and upgrade the manganese
bulk plant to 2 500 tons per hour, and alignment of the
complete
system so that at least the mandatory requirements pertaining to
safety of personnel and equipment engaged in the terminal
are met.
The objective is to complete the project within 12 months but not
exceeding 18 months’. The tender notice informed
prospective
tenders of a compulsory site inspection at the terminal on 3 October
2005. It also stipulated that ‘[t]enderers
shall give a
clause-by-clause comment where called for, as to whether or not their
tender complies, if not, how it differs from
the specification.
Failure to do so may preclude a tender from consideration’. The
invitation set out the scope, general
requirements and conditions
(including occupational health and safety requirements), codes and
standards and specific requirements
in respect of individual items
such as the chargers, tipplers, stackers, conveyors, reclaimers and
shiploaders.
[11]
Intech’s sole proprietor, Mr Inderan (Rajen) Pillay,
accompanied by Mr Dean Richards, Intech’s operations manager,
and Dr Don Glass, Intech’s projects manager at Saldanha Bay
[2]
,
attended the site inspection. At that time Intech was a small
electrical and instrumentation firm which had no experience at all
in
the execution of projects of the size and scope of the proposed
tender. According to Mr Pillay, he had no intention of submitting
a
bid for the entire project. His intention was to submit a tender for
the electrical and instrumentation part only. He testified
that: ‘My
intention was never to do the refurbishment nor the upgrade
because
I was not qualified to do either. I know almost nothing about
stackers and reclaimers
,
I knew – you know, whatever little I knew about it was what I
saw at Saldanha, but I did not work with them, so I thought
that I
would go in there and meet other contractors that were going to be
there and I would give them a price as a sub-contractor
because one
of the criteria was that you needed to have a BEE contingent. . . .’
(Own emphasis).
[12]
Mr Pillay met other contractors at the site inspection. They
persuaded him to submit a tender as the main contractor. The idea
was
to subcontract out the other specialized work to firms which had the
requisite specialist skills and experience. One of these
subcontractors was Langa Sandblasting & Painting (Langa), which
specialized in painting and sandblasting. Another one was Alstom,
a
large French multinational, which was interested in the
instrumentation and software part of the project. Mr Pillay stated
that
it came as somewhat of a shock to him that a huge multinational
enterprise such as Alstom was not interested in tendering for the
entire project. And a third was Lorbrand, a Gauteng based company
which specialized in the manufacture of conveyor components.
There
were other subcontractors as well, but these three featured
prominently in the case.
[13]
On this basis, Intech submitted on 17 November 2005 a comprehensive
tender for the refurbishment and upgrade of the plant at
a
consideration of R27 656 350 and R17 631 726 respectively. Intech’s
tender proposal consisted of a covering letter, Transnet’s
pro
forma tender document, duly completed and signed, a scope of works,
details of options, technical data and brochures. A tender
clarification meeting was held on 7 December 2005, attended by Mr
Pillay and Dr Glass on behalf of Intech and various Transnet
representatives. Numerous technical aspects were clarified and
Intech’s representatives set out in broad terms how they
proposed executing the tender. On 12 January 2006 Transnet advised
Intech that the tender had been awarded to it. In awarding the
tender, Transnet accepted Intech’s proposed scope of works and
specifications. It accepted only one of the numerous additional
options proposed by Intech, namely the addition of a slew ring at
extra cost. The tender price was adjusted to make provisions
for the
addition of the slew ring.
[14]
The tender period was stipulated as 10 months, commencing from 16
January 2006 and Transnet designated its Mr Andries Gouws
as project
manager. It is common cause that an agreement came into existence
upon Transnet’s acceptance of Intech’s
proposed tender on
12 January 2006. The tender form provided that, pending the execution
of a formal contract document, Intech’s
tender together with
the covering letter, subsequent correspondence and SAPO’s
acceptance would constitute a binding contract.
A comprehensive
written contract was later signed by Mr Pillay for Intech. That
document, which runs into hundreds of pages, contained
Transnet’s
standard general conditions of contract (more particularly, for
present purposes, its 1997 General Conditions
of Contract, the GCC
97) and special conditions of contract. Transnet was unable to
produce a copy of the contract bearing a signature
on its behalf, but
the contract and its terms were common cause on the pleadings.
[15]
Problems arose at an early stage of the execution of the tender.
Their genesis is to be found in the parties’ differing
interpretations of the contract. These problems became progressively
worse over time. The difficulties were exacerbated by the
serious
disagreement which arose early on between Intech and its main
subcontractor, Lorbrand. Transfer points T8 and T9 were key
sections
on the export side of the operation. The work entailed that the
entire plant had to be shut down when work was done at
T8 and T9. The
proposed shutdown dates had to be carefully planned and determined
long in advance. The shutdown work had to be
completed within the
designated period, so as to avoid ships charging demurrage against
Transnet for delays in loading the ore.
[16]
The relationship between Transnet and Lorbrand eventually broke down,
to the extent that it became clear that Intech would
not be in a
position to achieve the planned shutdown. Given the importance of the
shutdown deadline, Transnet exercised its contractual
right of
excising the structural and mechanical work on T8 and T9 from the
scope of the contract. It awarded that part of the work
to Lorbrand
to execute in terms of a direct contract between it and Lorbrand. At
that time Transnet Capital Projects (TCP), a division
of Transnet,
took over the supervision and management of the shutdown work. TCP
performed this duty in conjunction with a joint
venture of three
professional engineering and project management firms, Hatch Africa,
Mott McDonald and Goba, referred to at the
trial as ‘HMG’
(collectively, TCP and HMG will be referred to as the ‘JV’).
At the helm of this work was
Mr Dan Reddy for TCP and Mr Piet
Pretorius for HMG. After the successful completion of the shutdown
work, the mandate of the JV
was extended to include the remaining
work on the terminal. The JV thus effectively became interposed
between the parties in respect
of the management of the project.
[17]
On 15 December 2006 Mr Reddy instructed Intech to hold all further
work on the plant. This was to give Transnet an opportunity
to
re-assess the future of the terminal. There appears to have been a
preliminary view by Transnet at that stage that the terminal’s
export capacity might require expansion substantially beyond the 2
500 tons per hour envisaged in the scope of the Intech tender.
Mr
Reddy’s concern was that any further work done by Intech would
then, in the circumstances, amount to wasteful expenditure.
He
requested in writing that Intech should indicate the cost of ‘closing
out’ (ie terminating) the contract at that
stage. Intech
reverted with an amount of R14 million, which Mr Reddy considered as
too high, being in effect fruitless expenditure.
He consequently
instructed Intech to complete the remaining scope.
[18]
In the early part of 2007, safety issues arose on the plant. It came
to the JV’s attention that one of Intech’s
subcontractors, Langa, was engaged in unsafe working practices on the
site. Following investigations, a ‘stop works’
order was
issued on 14 February 2007 to Intech (as main contractor), setting
out the instances of non-compliance and the required
remedies. After
Intech gave certain undertakings in this regard, which the JV
accepted, the ‘stop works’ order was
lifted and work
resumed.
[19]
On 2 March 2007, the JV became aware that one of Alstom’s
employees had suffered a ‘lost time injury’ on
site which
necessitated the employee to be booked off from work. The injury had
not been reported by Intech as it was statutorily
obliged to do as
the main contractor. This precipitated a further investigation by the
JV into safety aspects relating to Intech’s
work. As a
consequence, the JV, on behalf of Transnet, on 5 March 2007 issued a
‘stop-works’ order based on general
non-compliance with
the Occupational Health and Safety Act 85 of 1993 (the OHS Act).
Another ‘stop works’ instruction
was issued on 8 March
2007. It differed from the previous one only in respect of its
limited reference to OHS Act requirements
which had been incorporated
into the contract and was thus less onerous than the previous one. At
this time very little work was
being done by Intech – there was
mostly sandblasting and painting being done by Langa and Alstom was
performing critical
work on the computer software in the control
room.
[20]
In the meantime, disputes regarding payments were raised by Intech. A
standoff ensued as Transnet disputed Intech’s demands
for
payments on various grounds. The impasse was never resolved and
Intech finally left the site at the end of May 2007. Correspondence
was thereafter exchanged between Intech’s attorneys and Mr
Hamilton Nxumalo, SAPO’s general manager, concerning the
disputed payments. After further correspondence, Intech, via its
attorneys, cancelled the contract on 13 August 2007, based on
Transnet’s alleged repudiation in the form of the issuing of
the ‘stop works’ orders. In response, on 14 August
2007
Transnet’s attorneys wrote to Intech’s attorneys,
alleging a number of breaches on the part of Intech and cancelling
the contract.
[21]
The project was eventually completed by the JV several years later at
a much higher cost (some R600 million). Intech sued Transnet
for: (a)
payment of retention monies; (b) unpaid invoices; (c) interest on the
late payment of two invoices; (d) standing time
costs (subsequently
abandoned); and (e) damages for the alleged loss of profits on the
balance of the contract. For its part, Transnet
counterclaimed for:
(a) a claim based on a final certificate, alternatively a claim for
damages and for repayment of certain amounts
allegedly paid in error;
and (b) penalties for late completion of the works.
[22] The counterclaim on
a final certificate emanated from a certificate compiled by Mr Adrian
Young, HMG’s senior project
manager, on 25 August 2014. The
final certificate derived from clause 37(3)(v) in GCC 97 which
stipulated that the project manager
shall issue a final certificate
upon Transnet’s instructions. In terms thereof, Intech
was liable to Transnet in respect
of work done by other contractors
(supervised and managed by the JV) to complete the work which Intech
had undertaken to perform
(including the rectification of Intech’s
defective work) in the sum of R204 187 750 (VAT included). At the
trial Transnet
abandoned a large part of this claim and confined its
claim to R50 million.
The issues
[23] The main issues
which require determination are:
(a) The precise nature of
the contract, with particular reference to what exactly Intech’s
scope of obligations was. Intech
contended that it only had to do
certain items of work, whereas Transnet’s case was that this
was a ‘lump sum’
contract, based on a performance
specification. According to Transnet’s interpretation, the
contract required Intech to perform
all the work that was required to
achieve the outcomes stipulated in the invitation to tender.
(b) The lawfulness of the
respective cancellations by the parties.
(c) The consequent effect
of a valid cancellation by Transnet on Intech’s claims as
pleaded.
(d) The counterclaim.
What was the exact
nature of the contract?
[24]
The correct approach to the interpretation of contracts is well
established. We must give meaning to the words used in the
contract
applying the normal rules of grammar and syntax, viewed within the
attendant factual context, in order to determine what
the contracting
parties intended.
[3]
In
addition, contracts must be interpreted in a manner that makes
commercial sense.
[4]
[25] It is striking that
this contract did not contain a bill of quantities quantifying the
works in detail. Instead, the scope
of work set out in Transnet’s
invitation to tender as far as refurbishment and upgrade was
concerned, read as follows:-
‘
1.
SCOPE
:
1.1
This specification covers the designs, manufacture, and commissioning
and all other work necessary for the refurbishment and
upgrade of
Manganese Bulk Plant to 2500 tons per hour, and alignment of the
complete system so that at least the mandatory requirements
pertaining to safety of personnel and equipment engaged in the
terminal are met. The objective is to complete the project within
12
months but not exceeding 18 months.
1.2
All existing belt conveyors will be upgraded to convey Sinter and
Manganese Ore continuously at 1 250 tons per hour per conveying
stream, peaking at 1 500 tons per hour, from rail tipper to the
stockyard and from the stockyard to the ship-loaders.
1.3
All the mechanical equipment including, belting, splices, rollers,
belt cleaners, pulleys (nip guards) and take-up units should
all be
checked, upgraded, repaired, replaced and refurbished as required to
support the operational requirement.
1.4
The integrity of the truck tipplers, truck positioner, stacker,
loaders and reclaimer machines, should be analysed in line with
new
required handling rate, mandatory requirements to safety of personnel
and equipment, reliability and availability specifications
and
upgraded to meet these requirements. The machines shall be adequately
protected against corrosion where applicable as per specification
HE9/2/B, to ensure that the structure life is maintained until 2011.
1.5
All transfer points and shutes must be completely re-engineered and
modernized to eliminate the spillage and resulting damage
to the
equipment.
’
[26] The expected outputs
for the upgrade option stipulated as follows:
‘
5.
EXPECTED
OUTPUTS
:
5.1
The end result of the project must ensure that all systems and
structures is upgraded to ensure a further plant life at design
capacity of at least 7 years assuming 4000 machine working hours per
annum. The quality of the upgrade must ensure that a 98% plant
availability is maintained for the projected lifespan of 28 000
machine hours. Calculated as follows:
Total
Running Hours – Plant/Stoppages
X
100%
Total
Running Hours
5.2
A complete maintenance plan, to maintain the required outputs for the
specified period, shall be provided for the equipment
by the
successful tenderer. This plan shall include all scheduled,
unscheduled and predictive maintenance tasks with their respective
triggers.
5.3
The continued handling rate should be 1 250 ton per hour per belt
allowing for 20% surges in the handling rate due to the nature
of the
feeding system.
5.4
The plant will be operational during the upgrade process and planning
must be such that a plant availability of 85% is maintained
during
this period. The successful contractor would be required to establish
his side work such that it does not interfere with
the terminal’s
operations
.’
[27] Intech’s
tender covering letter is instructive. It reads as follows:
‘
Attached
please find ONE FILE containing our Tender proposal for the specified
work at the Manganese Ore Terminal in Port Elizabeth.
1.
File Containing – Published Tender document. Signed and
completed as required, Scope of Works, details of Options, technical
data and brochures.
REFURBISHMENT.
As
specified, we offer a professionally managed project – with
full compliance of all safety, legal, engineering and SAPO
specifications and standards – to refurbish the Ore Terminal
such that it will remain fully operational for 5 to 7 years
at a
throughput rate of 1,500Te/hr at acceptable operation and maintain
levels post handover.
Price
:
R 26,352,730 excluding VAT
Warranty
:
A twelve month Warranty is offered on all completed & inspected
work.
Scope
of Work
:
A detailed schedule of work to be completed is contained in this file
Summary
Scope of Work: Refurbishment
Ø
Detailed
cleaning of the entire facility
Ø
Full
Inspection of all operating components
Ø
Cleaning,
greasing, re-sealing and re-compaction of all shafts, bearings, gears
and pivots
Ø
Installation
of new lighting to OSHACT standards
Ø
Installation
of Cable Reelers on Stackers, Reclaimers & shiploaders
Ø
Sandblasting,
inspection & painting of structures & steelworks
Ø
Replacement
of sectional degenerated steelwork to ensure safe operation for up to
7 years
Ø
Hot
Seam welds on Conveyor belts
Ø
Replacement
of 750mtrs of damaged belting
Ø
Electronic
scales on Import & Export lines
Ø
Basic
SCADA and conveyor PLC system
Ø
Full
refurbishment of the CCR Substation and MCC
Ø
Make
good the existing operations of the tipplers, stackers, reclaimers
and shiploaders
Ø
Full
refurbishment of the Charger units
Technical
Specificaitons
:
Contained in this file
UPGRADE
An
additional cost of R 17,631,726 is included in schedule of prices.
TIMESCALES
A
basic time schedule is included in this file. Intech will provide a
detailed planning schedule as specified within two weeks of
being
awarded the contract.
CONTRACTORS
Intech
has experience as a Project Management & co-ordination group.
Intech also has specific experience with Electrical, Instrumentation,
SCADA, PLC, Mechanical and Structural construction work.
To
support Intech in this project, a relationship has been structured to
include:
Ø
Intech
Instruments – Prime Contractor – Electrical 7 Instrument
Design & installation – Professional (GCC)
Engineers,
Project Management and SCADA / PLC
Ø
Lorbrand
– Conveyor System Manufacturers and Installers
Ø
Scorpio
Martin Engineering – Transfer, Chute & Liner specialists:
Dust suppression designers
Ø
Dave
Brown Engineering – Gearbox & Slew gear manufacture and
refurbishing
Ø
Langa
Sandblasting – Corrosion & structural Engineering
Ø
Alstom
Controls – Control (PLC & SCADA)
Ø
Bellco
– Network, radio communication
OPTIONS
Various
Options are offered to SAPO by Intech – Enclosed are ten
detailed optional items.’
[28]
Detailed specifications were outlined in respect of the items of
plant and machinery in the terminal and an overview of the
operation
and technical codes were also included. The site inspection of 3
October 2005 had as its objective an opportunity for
prospective
tenderers to examine the plant closely with a view to determining
precisely what work was required in respect of the
various items on
the plant to achieve the outcomes required by Transnet. Prospective
tenderers themselves had to calculate the
cost of the work in this
regard. It is against this background that Intech successfully
tendered. It was the only compliant tender
– two other
tenderers submitted tenders only in respect of investigative studies
to determine the precise scope of work required.
Included in the
tender submitted by Intech was a signed declaration that the tenderer
had acquainted himself with all the tender
documents. Intech’s
tender thus complied with all the requirements of the invitation to
tender.
[29] In its particulars
of claim Intech appears to accept, at least impliedly, that the
contract required of it to achieve the deliverables
stipulated in the
invitation to tender. Thus, it pleaded that:
‘
(a)
The contract was concluded pursuant to [Intech’s] submission of
a tender dated 17 November 2005 and [Transnet’s]
confirmation
of the award of the tender to [Intech] by way of a telefax dated 12
January 2006.
(b)
In terms of the contract [Intech] undertook to refurbish the
manganese bulk plant at Port Elizabeth for the sum of R27 656 350,
excluding VAT and undertook to upgrade the said manganese bulk plant
for an additional cost of R17 631 726
.’
Importantly,
Intech also pleaded that it had ‘agreed to comply inter alia
with the [OSH Act]’. These averments were
admitted in the plea.
[30] Furthermore, Mr
Pillay, the driving force behind Intech, appeared to accept that
Intech was required to achieve the stipulated
outcomes. He testified
as follows:
‘
So
the – what you’re saying is that work is listed in the
options which is not in fact required in order to achieve
the
stipulated items? – No, it was not. And we’ve been over
this and you accept that he spoke of contract which –
there was
no [scope] required but the output which was required were, well as
you stipulated in refurbishment, it’s
1 500 tons per hour
which is 750 x 2 belts and then the upgrade is to the 1 250 tons per
hour? – That is correct
’
.
Intech
thus appeared to have understood the contract the same as Transnet
did.
[31]
Over and above the unambiguously stated expected outcomes (which, as
stated, Intech via Mr Pillay appeared to accept), the
contract also
contained detailed specifications which incorporated specified codes
and standards. Upholding Intech’s interpretation
of the
contract would in my view render these detailed performance
specifications meaningless. In the context of what Transnet
required
for the refurbishment and upgrade of the plant, to accept the
contention that Intech could simply do whatever work it
wanted to, at
whatever standard it chose to, would not make commercial sense.
[32]
Contracts of this type are often referred to as ‘design and
build’ contracts.
[5]
They
are meant to save costs and time. In effect, they merge a first
pre-tender phase of commissioning investigative studies to
determine
the precise scope of work, with the second phase of the tender for
the work itself. In such circumstances, self-evidently
there is then
a far greater responsibility on prospective tenderers to make a
proper assessment of what the tender required and
what it would cost
to meet those requirements.
[6]
[33]
The ambit of the invitation to tender and its general envisaged
outcome; the specific deliverables stipulated in the contract;
and
Intech’s tender comprising specified items and outcomes, all
point to this being a performance specification contract.
This
conclusion is fortified by the fact that it appears to be common
cause on the pleadings and by Mr Pillay’s apparent
acceptance
during oral evidence of this interpretation. En passant, I must agree
with the submission by Transnet’s counsel
that the fact that
neither Mr Pillay nor any one of Intech’s senior
representatives had ever read the documents or the contract,
renders
the debate about the nature and the scope of the contract somewhat
artificial. Astoundingly, Mr Pillay conceded that, even
at the time
of the cancellation of the contract by his attorneys on 13 August
2007, he had still not read the contract, despite
his attention on
more than one occasion having been drawn to important provisions in
GCC 97. His attorneys, too, had not read the
contract when they
cancelled.
Be
that as it may, Koen J cannot be faulted in coming to the conclusion
that this is, as Transnet contended, a performance specification
contract with stipulated outcomes.
At whose instance was
the contract lawfully cancelled?
[34]
Central to this issue is the question regarding safety on the site in
general and Intech’s alleged non-compliance with
the OHS Act in
particular. This is so because Intech pleaded that it lawfully
cancelled the contract solely on the basis of Transnet’s
alleged unlawful conduct in issuing the two ‘stop works’
orders in March 2007 and thereafter failing to furnish reasons
to
enable Intech to remedy its shortcomings. Moreover, its purported
cancellation through its attorneys on 13 August 2007 was only
based
on Transnet’s alleged repudiation through the alleged unlawful
‘stop works’ orders. Thus the only issue
before the high
court in this regard was the lawfulness of the ‘stop works’
orders. It was submitted on behalf of Intech
that regard must also be
had to the averments on this aspect in its replication and in its
plea to the claim in reconvention. The
submission is ill-conceived –
it is trite that a party is obliged to make out its case in the
papers founding its claims,
here, the particulars of claim. It cannot
seek to do so in its replication. And, equally well-established, is
the principle that
a party cannot plead one particular issue and then
attempt to raise others at the trial.
[7]
That principle applies even more so on appeal.
[35]
It will be recalled that there had been a ‘stop works’
order issued on 14 February 2007 on account of Langa’s
non-compliance with safety prescripts in the OHS Act. Intech
furnished undertakings to remedy the non-compliance. On this basis,
the ‘stop works’ order was lifted and work resumed. Thus,
the non-compliance in March 2007, relating to the failure
to report
the lost time injury sustained by an Alstom employee, was a second
serious transgression within a matter of weeks. Intech
correctly
accepted that, as main contractor, it bore full responsibility for
the failures regarding safety aspects (in particular
non-compliance
of the OHS Act) of its subcontractors. Intech specifically agreed in
its contract with Transnet to comply with its
duties and obligations
set out in the OHS Act. It also accepted in terms of the General
Conditions of Contract and the OHS Act,
that it bore responsibility
for its own employees and for all other persons under its control. Dr
Willem du Toit, Transnet’s
expert witness on safety, described
the plant as a particularly hazardous environment. The potential
hazards included those associated
with working in close proximity to
live machinery, in confined spaces and at height, and the risk posed
by falling objects, drowning
and electrocution. Then, of course,
there was the potentially hazardous manganese dust.
[36] Both Mr Pillay and
Intech’s safety expert, Mr Schorne Darlow, conceded that there
was non-compliance with the OHS Act
and its Regulations in several
material respects. These included not even having a copy of the OHS
Act on site, the absence of
a health and safety plan, no appointments
having been made as required by the OHS Act and Regulations and no
risk assessments having
been carried out. As stated, the plant was a
highly hazardous site and safety was paramount. Mr Pillay made the
following two important
concessions:
‘
First
of all, Intech was non-compliant. Their operation was not in
accordance with the Occupational Health and Safety Act, construction
regulations or any other --- (indistinct) regulations, including
SABS. Do you accept that? --- yes. There were serious
non-conformances.
The second part --- (intervention) --- We are
talking about the site, just the site --- On the site yes.
The
second part of this is that and we will deal in due course with the
events as they unfolded, but there was a joint audit or
an audit at
which Intech had a representative and scores were agreed. Intech was
at that time told, this is around about the 20
March, told what the
issues were and in fact it appears from various records which we have
only had access to in the context of
these proceedings, that Intech
did set about trying to get itself compliant following March. Would
you agree with that? --- Correct.
’
[37] Later during
cross-examination, the following crucial concession was made:
‘
What
I am saying to you is that it is part of Intech’s case, it has
been pleaded that Intech did not know what its shortcomings
were or
what it needed to do in order to become compliant. What I am saying
to you is there is no truth whatsoever in that. ---
No, that is not
true at all. We knew what to do, we know about safety, we work every
day with safety, but I brought in the expert
to guide us the first
time, to do everything right the first time, because instead of us
doing a document and going and giving
it to SAPO and they don’t
accept it.
All
right, then we are agreed on the second part, that Intech did in fact
know what to do. --- Yes, absolutely.
’
[38] The ‘expert’
referred to by Mr Pillay in the passage above, is Mr Schorne Darlow.
He conceded in evidence that
‘there was no doubt in my mind
that Intech were not complying there was no doubt at all’. Mr
Darlow explained that
his brief was to help Intech become compliant,
but he was not asked to help draw up a health and safety plan or to
do a risk assessment
for Intech. He said that had he been instructed
to do so, he would have been able to assist Intech to do those
things. At some
point, when questioned by Koen J, Mr Darlow conceded
that Transnet’s ‘stop works’ orders were justified
in the
circumstances:
‘
Just
let me understand that. If there was no safety plan then you couldn’t
see whether what was being done was in accordance
with the safety
plan and then the remedy if you like is you must then stop the
construction work until a risk assessment has been
done – it
can be done maybe in a few days or whatever. --- The risk assessment,
Your Honour, is only part of it, it’s
a small part of it.
So
risk assessment and whatever else is required but in the interim the
appropriate thing is just to stop the work, am I correct
in that? ---
Until the plan is put into place. This was how many months? What date
did the contract start
?’
But,
later on, Mr Darlow appeared to suggest that the ‘stop works’
orders were excessive and that it was not necessary
for Transnet to
have ordered the stoppage of the entire works. Indeed, Intech’s
case regarding the alleged unlawfulness of
the ‘stop works’
orders (which it contended amounted to repudiation on the part of
Transnet) appears to have mutated
into the alleged excessiveness of
the orders. This contention is fundamentally flawed on both a factual
and a legal level.
[39] Firstly, Mr Darlow
conceded that he was not conversant at all with the factual situation
which existed at the time of the orders
on 5 and 8 March 2007 as far
as work on the site was concerned. As a matter of fact, very little
work was being done at that time
– only Langa was working,
doing painting and sandblasting on the gantries and Alstom was
performing critical work in the
control room. When pressed by
Transnet’s counsel in cross-examination on how he could express
an opinion on this when he
did not know what work was being done on
the site, he conceded the point:
‘
All
I’m saying is before we can decide whether or not an
instruction was excessive you have to know what its actual impact
was. --- Well I was under the impression that all work, full
stop, no work was allowed to carry on that they were only allowed
to
stay in their site offices they were not allowed to go off site
.’
Later
he conceded that he was not in a position ‘to debate this
issue’.
This
concession, and that made by Mr Pillay, controvert the contentions
before us that the orders were arbitrary and unjustifiably
excessive.
[40] Secondly, Intech was
in law bound to comply with the statutory requirements contained in
the OHS Act, the OHS Regulations and
the Construction Regulations. It
bound itself thus in the contract. Moreover, even if it purported to
do so, Intech could not in
law contract out of liability to comply
with statutory requirements. Those requirements are peremptory.
Section 8 of the OHS Act
provides as follows:
‘
(1)
Every employer shall provide and maintain, as far as is reasonably
practicable, a working environment that is safe and without
risk to
the health of his employees.’
The
section is clearly peremptory and the only proviso contained therein
is that measures must be taken ‘as far as is reasonably
practicable’. Intech’s case was not that it was not
reasonably practicable to comply. Construction Regulation 4(1)(e)
requires an employer like Transnet to ‘stop any contractor from
executing construction work which is not in accordance with
the
principal contractor’s health and safety plan’.
[41]
Central to compliance with the statutory requirements is a
comprehensive health and safety plan, which had to be kept available
on site in a health and safety file. As pointed out by Dr du Toit,
such a plan would encompass the assessment of risks in the work
to be
executed, together with detailed method statements regarding the
management of those risks. Thus, in the present instance,
the health
and safety plan would have entailed, amongst others, a fall
protection plan
[8]
, lockout
procedures and personal protection equipment. Absent a health and
safety plan, Transnet was not only entitled, but indeed
obliged, to
stop the work until an appropriate plan had been put in place. This,
said Dr du Toit, emanates from the peremptory
provisions of s 8(1) of
the OHS Act and Construction Regulation (4)(1)(e). A failure to
comply with s 8 constitutes a criminal
offence
[9]
.
[42]
It was argued on Intech’s behalf, albeit somewhat faintly, that
Transnet acted mala fide and with ulterior motive in
the issuance of
the ‘stop works’ orders. These orders were a smokescreen
to disguise Transnet’s true motive,
namely to get Intech off
the project, so the argument went. Counsel referred to it as ‘a
contractual pretext to effectively
terminate [Intech’s]
contract’. This argument is ill-conceived and directly
controverted by the facts. The evidence
of Mr Reddy and Mr Nxumalo,
supported by numerous letters and e-mails written by them, are
indicative of a concerted attempt by
Transnet to engage Intech with a
view to getting it to complete the outstanding work. And, more
importantly, it is trite that motive
is irrelevant as far as the
repudiation of a contract is concerned. A contract can only be
repudiated by conduct.
[10]
Where the ‘stop works’ orders were justified on the
facts, as conceded by Mr Pillay and Mr Darlow, and compulsory by
law
(s 8(1) of the OHS Act and Construction Regulation 4(1)
e
)),
it matters not what Transnet’s motive may have been. It is an
objective test and intention or belief plays no role whatsoever.
[11]
[43] To sum up under this
rubric: the ‘stop works’ orders of 5 and 8 March 2007
were lawful and justified. This was
conceded by both Mr Pillay and Mr
Darlow. Intech knew exactly what had to be done to remedy the
shortcomings to have the orders
lifted; this too became common cause
in the evidence. Intech concededly failed to remedy the shortcomings.
On the facts, ultimately
the non-compliance with the statutory
prescripts remained until Intech finally abandoned the plant at the
end of May 2007. Intech’s
purported cancellation on the basis
of repudiation by Transnet’s ‘stop works’ orders is
unsustainable in law.
The purported cancellation is itself unlawful
and was correctly regarded by Transnet as an act of repudiation.
Transnet thus lawfully
cancelled the contract on 14 August 2007, on
the basis of this and other grounds (including Intech’s refusal
to perform under
the contract and its final abandonment of the site
at the end of May 2007). As an aside, it bears mention that the
contract became
deadlocked not because of the ‘stop works’
instructions, but rather due to the irresoluble dispute regarding
Intech’s
demand for payments and by Intech’s
intransigence and refusal to complete the outstanding work. Despite
his attention
being drawn on more than one occasion to possible
remedies under GCC 97, Mr Pillay failed to utilise the dispute
resolution mechanisms
in the contract. This is perhaps explicable by
the fact that neither he, nor any one of Intech’s other senior
representatives,
had ever taken the trouble of reading the contract.
Intech’s claims
[44] As stated, Intech
sued for:
(a) The refund of all
sums held in retention by Transnet. Its case was that it was entitled
to this refund ‘(b)y virtue of
the termination of the
contract’.
(b) Unpaid invoices, also
on the basis that it was entitled to full payment by virtue of the
cancellation of the contract.
(c) Interest on invoices
paid late.
(d) Loss of profit
sustained as a consequence of Transnet’s ‘unlawful
repudiation of the contract and the subsequent
cancellation thereof.’
(e)
Standing money in respect of the ‘hold works’ order. This
claim was expressly abandoned at the trial and was recorded
as such
by Koen J in his judgment. It could not be revived on appeal, as
counsel sought to do in this court.
[45]
Intech’s claims for unpaid invoices and retention monies are
bad in law. As stated, the present contract was one of performance
specification, without a bill of quantities, often referred to as a
‘lump sum’ contract. It was an entire contract
where
entire performance by the contractor (Intech) was a condition
precedent for the client’s (Transnet’s) liability.
Intech’s right to payment was thus dependent upon full
performance of the contract on its part. Partial performance by
Intech
did not render Transnet liable for partial payment. As
Somervell LJ put it in
Hoenig
v Isaacs
[12]
:
‘
the
builder can recover nothing on the contract if he stops work before
the work is completed in the ordinary sense - in other words
abandons
the contract’
.
[46]
In order to mitigate hardship to a contractor in the form of, for
example cash flow problems, construction contracts often
make
provision for periodical interim payments to the contractor, prior to
completion of the entire works. That was also the case
here. These
interim payments would usually be structured against interim
certificates, sometimes called ‘progress certificates’.
As the name depicts, these certificates are issued from time to time
as the works progress, certifying that a certain amount of
work has
been done. They are issued in the expectation that the entire works
will be completed. Although they are made against
separate parts of
the work being done (usually expressed as an estimation of the
percentage of work which has been completed),
these interim payments
are not payments for separate completed parts of the works. They are
provisional only and subject to continuing
revision through the
issuance of further certificates, be they interim or final
certificates. As interim provisional progress payments,
they do not
through the issuing of interim certificates signify acceptance of the
work done.
[47]
The issuance of an interim certificate is ‘simply a contractual
mechanism or method to enable the contractor to finance
the
continuation and finalisation of his work’.
[13]
Where a client lawfully terminates a construction contract, as is the
case here, the contractor’s claims for retention monies
and
unpaid invoices are not self-standing claims, separate and
independent from the remainder of the contract. And, upon such
termination, the interim certificates cease to be of any force and
effect. They cannot sustain a basis for payment where there can
be,
in view of the cancellation, no further expectation of a completion
of the works.
[14]
In order to
succeed on the interim certificates, Intech had to have acquired an
accrued right to payment prior to the termination
of the contract, ie
a right ‘which is accrued, due and enforceable as a cause of
action independent of any executory part
of the contract.’
[15]
[48]
The interim payments, made to Intech during the subsistence of the
contract, did not render the contract divisible. Intech’s
remedy for its incomplete performance was to claim a
quantum
meruit
,
based on the principles of enrichment.
[16]
In the premises, Intech’s claims for unpaid invoices and
retention monies are bad in law and were correctly dismissed by
the
high court.
[49]
Intech’s claim for interest on the late payment of invoices
1290 and 1321 was dismissed by Koen J on the basis that they
were not
proved on a balance of probabilities. Intech’s counsel did not
seek to persuade us that this finding was wrong.
The high court
cannot be faulted in this regard. Moreover, this claim is in any
event extinguished by Transnet’s counterclaim
through the
operation of set-off.
[50] As far as the claim
for the loss of profit is concerned, the finding that Intech’s
purported cancellation was unlawful
destroys the substratum of this
claim. That purported cancellation constituted repudiation on the
part of Intech, which entitled
Transnet to cancel the contract. There
were other grounds of cancellation relied upon by Transnet, but
nothing more need be said
about them. The loss of profit claim,
premised on the basis of Intech completing the works if it had ‘been
given a proper
opportunity to complete the contract’ is
therefore unsustainable in law.
Transnet’s claim
in reconvention
[51]
As stated, Transnet sued for a reduced sum of R50 million on a final
certificate issued by Mr Young in terms of clause 37(3)(v)
in GCC
97.
[17]
It will be recalled
that the JV’s brief was extended to manage the work to upgrade
and refurbish the entire plant (import
and export lines) to 1250 tons
per hour per line (ie 2500 tons per hour in total). After initial
inspections, first by the JV and
thereafter by other experts,
extensive repair, refurbishment and upgrade work was done. In drawing
up the final certificate, Mr
Young used the JV’s deliverables
according to its extended brief as a starting point. He computed the
costs incurred by Transnet
to have the works completed and made free
of defects following cancellation of the Intech contract as R192 171
916.41. Various
contractors were employed to do this work, supervised
and managed by the JV. Detailed evidence concerning this work was
led, setting
out what exactly was done and the cost thereof. The
refurbishment and upgrade were completed only in 2014 at a total cost
of R600
million. This increased cost related to the expansion of the
terminal to extend its life to a longer period than initially set out
in the tender from seven years to 15 years.
[52]
The figures in the final certificate were contentious. But no
controverting evidence was led by Intech. Mr Young’s evidence
was challenged only on the basis that he misunderstood what Intech’s
deliverables were in terms of the contact. The basis
of his
calculations of what work had to be done by other contractors to
complete Intech’s work and to remedy its defective
workmanship,
was misconceived, so the cross-examination purported to show. This
line of argument was vigorously pursued in this
court. It was
contended on behalf of Intech that extensive work which fell outside
Intech’s original scope, such as repairing
reclaimers, fixing a
gantry and other maintenance work, was wrongly included in the
computation. Much was made in the heads of
argument about the
so-called LSL report which contained a pre-tender engineering
assessment commissioned by Transnet. But reliance
on that report is
misplaced. It was never part of the evidence and was not confirmed
under oath on affidavit. The same applies
to the Chapelow report. As
Koen J correctly found, the criticism levelled against Mr Young’s
final certification and his
evidence is unfounded. As far as the
scope of works is concerned, this criticism departs from the flawed
premise that Intech only
had to do certain items of work. As set out
above, its brief was to achieve the outcomes stipulated by Transnet
in the tender.
[53]
Mr Young’s evidence was also challenged on the basis of an
allegation that Transnet had failed to properly maintain the
plant.
Apart from the fact that this was nothing more than a speculative
probe, Mr Young persuasively demonstrated various instances
where he
had excluded from the computation items which fell outside Intech’s
scope of work, or where damage was caused by
Transnet itself. If
anything, Mr Young’s figures were on the conservative side.
[54]
It may at first blush appear strange that a tender for work in the
initial sum of some R44 million ended up costing just over
R200
million for the work to be completed and defective work remedied.
Upon closer analysis though, it is plain that Intech had
hopelessly
underestimated the scope and concomitant cost of the works. That can
largely be ascribed to its lack of experience in
executing tenders of
this nature and size. It explains why the other two tenderers were
not prepared to tender for the entire project
itself, but only for
initial investigative studies to determine precisely what work the
refurbishment and upgrade entailed. And
it comes as no surprise that
a large multinational company such as Alstom was only prepared to bid
for the instrumentation and
software part of the tender. As an aside,
it appears as if Transnet itself was in the dark about what the work
entailed. But that
is the nature of a ‘lump sum’
performance specification contract – a prospective tenderer
carries the risk and
is thus required to make a careful, informed
assessment of what exactly is required to achieve the stipulated
outcomes, before
submitting its tender.
[55]
Transnet claimed penalties in the sum of R10 786 031, excluding VAT.
Clause B of the Special Conditions of Contract provided
that
penalties may be imposed for the late completion of the works for
every day beyond the completion date at a rate of one fourteenth
percent of the total value of the contract. This was also set out in
the earlier invitation to tender. Intech was warned during
September
2006 and again at a meeting on 21 February 2007 that Transnet
reserved its right to impose penalties. This warning was
repeated in
subsequent correspondence. Clauses 17 and 28 of GCC 97 made provision
for Intech to apply to Transnet for the extension
of the completion
date where delays occurred, but Intech did not avail itself of this
option. Again, it may be ascribed to the
fact that neither Mr Pillay
not his senior Intech colleagues had ever read the contract.
[56] In its plea to the
claim in reconvention, Intech raised three defences to the claim for
penalties, namely waiver, repudiation
and a time at large defence.
All of these defences were rejected by the high court, correctly so
in my view. I have already dealt
with the repudiation aspect. Waiver,
being an unequivocal abandonment of rights, was not proved at all. I
agree with Koen J that
the agreed rescheduling from time to time of
work programmes does not amount to a formal extension in terms of the
contract, nor
does it affect the agreed completion date. The facts
pleaded regarding the time at large defence were not proved at the
trial:
(a) There was no evidence
that Transnet had rescheduled the shutdown, as alleged. But in any
event, as the high court correctly
found, rescheduling of the
shutdown was permitted by the contract and Intech’s remedy in
that instance was to apply for an
extension of time.
(b) The allegation that
Transnet had frustrated the completion of the contract by inducing
Lorbrand to refuse to perform in terms
of its subcontract with
Intech, was not borne out by the evidence. It became clear from the
evidence of Mr Granich of Lorbrand
that the relationship with Intech
had broken down as a result of the latter seeking to renegotiate the
terms of the subcontract
and for failing to make payment to Lorbrand
timeously.
(c) There was no evidence
of extra work after 16 November 2006 which Intech had to perform, as
it alleged. And the ‘hold works’
order of December 2006
could have been remedied by Intech availing itself of the contractual
option of seeking an extension of
time. It did not do so. In any
event, Transnet has given Intech the benefit of this delay from 15
December 2006 to 21 February
2007 (71 days) in the computation of its
claim. Transnet has thus reduced its claim for penalties to R6 982
600.
Conclusion
[57]
For these reasons, the high court was correct in its findings on the
issues outlined above. The appeal must consequently fail
and costs
must follow the outcome.
[58]
The following order issues:
1 The appellant’s
late filing of the record is condoned. The appellant is ordered to
pay the costs of the application
for condonation, including the costs
of two counsel where so employed.
2 The appeal is
dismissed with costs, including the costs of two counsel.
______________________
S A Majiedt
Judge
of Appeal
APPEARANCES:
For
First Appellant:
K J Kemp SC
Instructed
by:
Anand-Nepaul Attorneys, Durban
Spangenberg
Zietsman & Bloem, Bloemfontein
For
Second Respondent:
G S Myburgh SC (with
him D M B Watson)
Instructed
by:
Hogan Lovells (SA) Inc c/o Cox Yeats, Umhlanga
Matsepes Attorneys,
Bloemfontein
[1]
Steel is
manufactured mostly from iron ore. Manganese forms roughly 10% of
its composition.
[2]
The
Saldanha Bay project commenced before the Port Elizabeth project.
[3]
North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd
[2013]
ZASCA 76
;
2013 (5) SA 1
(SCA) para 24;
Novartis
SA (Pty) Ltd v Maphil Trading (Pty) Ltd
[2015] ZASCA 111
;
2016 (1) SA 518
(SCA) para 28.
[4]
Ekurhuleni
Metropolitan Municipality v Germiston Municipality Retirement Fund
[2009]
ZASCA 154
;
2010 (2) SA 498
(SCA) para 13;
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) para 18.
[5]
See Stephen
Furst and Vivian Ramsey
Keating
on Construction Contracts
9 ed, (2011) at 11 para 10-27.
[6]
Many of the
problems encountered by Intech can be traced back to this onerous
requirement in circumstances where Intech had never
executed a
contract of this nature.
[7]
See
generally
Minister
of Agriculture and Land Affairs & another v De Klerk
& others
[2013] ZASCA 142
;
2014 (1) SA 212
(SCA) para 39.
[8]
According
to Dr du Toit, statistically most accidents in the construction
industry occur with people falling from height or with
objects
falling on people.
[9]
Section
38(1)(
a
)
of the OHS Act.
[10]
G B
Bradfield
Christie’s
Law of Contract in South Africa
7 ed, (2016) at 612; Van Huyssteen et al
Contract
General Principles
5 ed, (2016) at 10.
[11]
Ibid.
[12]
Hoenig v
Isaacs
[1952] EWCA Civ 6
;
[1952]
2 All ER 176
at 178.
[13]
Per
Nienaber JA in
Martin
Harris en Seuns OVS (Edms) Bpk v Qwa Qwa Regeringsdiens; Qwa Qwa
Regeringsdiens v Martin Harris en Seuns OVS (Edms) Bpk
2000 (3) SA 339
(SCA) para 34 (my translation).
[14]
Thomas
Construction (Pty) Ltd (In liquidation) v Grafton Furniture
Manufacturers (Pty) Ltd
1988 (2) SA
546
(A) at 563F-G.
[15]
Crest
Enterprises (Pty) Ltd v Rycklof Beleggings (Edms) Bpk
1972 (2) SA
863
(A) at 870 G-H.
[16]
BK
Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979 (1) SA
391
(A) at 424 C.
[17]
In relevant
part clause 37(3)(v) reads as follows:
‘
. . . after
the said work has been completed by such other person and such other
person has been paid therefor, the Project Manager
shall issue the
Final Certificate when so authorized by the Executive Officer.
Should any money be shown to be due by the Contractor
to Transnet,
the contractor and/or his guarantor shall forthwith pay such money
to Transnet failing which Transnet may recover
the said amount from
the contractor.’