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[1995] ZASCA 128
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Raubex Construction (Pty) Ltd v Minister of Posts & Telecommunications (650/92) [1995] ZASCA 128 (17 November 1995)
Case No 650/92 /mb
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE
DIVISION)
In the matter of:
RAUBEX CONSTRUCTION (PTY) LTD
APPELLANT
and
THE MINISTER OF POSTS
& TELECOMMUNICATIONS
RESPONDENT
CORAM
HEFER,VIVIER JJA et SCOTT AJA
HEARD
: 2 NOVEMBER 1995
DELIVERED
: 17 NOVEMBER 1995
JUDGMENT
SCOTT AJA/
...
2
SCOTT AJA
:
The appellant was the successful tenderer
for a civil engineering contract to lay a pipeline between Graaff-Reinet and a
point 20
km north of Noupoort. The work involved the excavation of a trench 450
mm wide and one metre deep into which two pitch-fibre pipes
were to be
installed. The pipes were to be encased in a selected material referred to as
"bedding and padding" and the trench then
filled with a selected backfilling
material. "Bedding" is the material placed on the floor of the trench to provide
an even and stable
surface on which the pipes are laid, while "padding" is the
material placed around and over the pipes up to a level of at least 75
mm above
the pipes. The purpose of the pipes was to accommodate telephone cables and in
particular an optical fibre network linking
the major cities in the
country.
The appellant's tender which was dated 31 March 1987
was
3
accepted on 20 May 1987. On 11 June 1987 and after the work had already
been commenced the appellant concluded a formal written contract
with the South
African Government acting through its department of Posts and Telecommunications
("the department"). The contract
provided that a number of specified documents
were to "be deemed to form and be read and construed as part of this Agreement".
One
of these was a "Specification, for Civil Engineering Works issued May 1985".
Clause 11.2.2 of this document specified what material
had to be used for the
bedding and padding. A dispute arose between the parties as to its meaning.
Recourse was first had to mediation
and thereafter the appellant, being
dissatisfied with the mediator's opinion, instituted action in the Eastern Cape
Division for
a declaratory order as to the meaning of the clause. The action was
dismissed with costs by Jennett J and the appellant with the
necessary leave now
appeals to this court. The sole question in
4
issue is the proper interpretation of clause 11.2.2 of the
specification.
Clause 11.2 is headed "Materials". Clause 11.2.2
reads:
"The bedding and padding material, that is, compacted material under, around
and 75 mm above the pipes shall be either crusher run
or coarse river sand or
material of a granular non-cohesive nature that is singularly or evenly graded
between 0,6 mm and 19 mm,
is free draining, has a compactability factor not
exceeding 0,3 and has a plasticity index not exceeding 6, shall be provided by
the Contractor over the entire length of the contract. Tests to determine the
characteristics of the material are detailed in schedule
2. For marshy or
waterlogged conditions see schedule 4."
The appellant
contends that on a proper construction the clause permits the use of three types
of bedding and padding material viz
(i) crusher run or (ii) coarse river sand or
(iii) material of a granular non-cohesive nature that is singularly or evenly
graded
between 0,6 mm and 19 mm, is free draining, has a compactability factor
not exceeding 0,3 and has a plasticity index not exceeding
6. In other words,
the contention is that the specifications as to size, compactability and
plasticity mentioned in the
5
clause apply only to the third type of material and not to crusher run
or
coarse river sand. The respondent, on the other hand, contends that
the
specifications in question were intended to relate to all three
types of
material which were permitted for use as bedding and padding. In
support
of this contention counsel for the respondent relied not only on the
terms
of the clause itself but also on various other documents which
were
incorporated into the contract and to which I shall refer later in
this
judgment.
The dispute between the parties as to the meaning of
clause
11.2.2 of the specification arose in the following circumstances. At a
site
meeting held on 26 May 1987 which was some 6 days after the
acceptance
of the tender, the engineer issued an instruction which is recorded in
the
minutes of the meeting as follows:
"The Chairman will allow up to a maximum of 15% mass smaller than 0,6 mm
material in bedding and padding. The specification will
6
be otherwise strictly enforced."
The engineer's
attitude was that the instruction amounted to no more than
a
relaxation of the 5% tolerance permitted in terms of the
specification.
That tolerance appears in schedule 2 to the
specification which in turn is
referred to in clause 11.2.2., quoted above. The schedule which is
headed
"Test for suitability of material for use as bedding/padding", details
tests for
both grading and compactibility. The test for grading reads as
follows:
"Obtain a representative sample of the material as follows: Heap about 40
kg of the dry material on a clean surface, mix it thoroughly,
divide it into two
parts of approximately equal size, and discard one part. Repeat the mixing,
division, and discarding procedure
until a sample of mass about 2,5 kg is
obtained. Weigh this sample.
Wash the representative sample through three sieves of nominal aperture
size respectively 37,5 mm, 19 mm and 0,6 mm. If
(a) any particles are retained on the 37,5 mm sieve, or
(b) more than 5% by mass of the sample is retained on the 19
mm
sieve, or
7
(c) less than 95% by mass of the sample is retained on the 0,6 mm sieve,
regard the material as unsuitable for use in
bedding."
The effect of the instruction of
26 May 1987 was therefore to reduce the figure of 95% referred to in paragraph
(c) to 85%.
The appellant subsequently took up the attitude that
because it
was made clear by the engineer that the specifications referred to in
clause
11.2.2, subject to the amended tolerance, applied to all three types
of
bedding and padding material, the instruction amounted in effect to
a
variation of the contract entitling it to additional compensation in
terms of
the General Conditions of Contract. The order which was ultimately
sought
in the Court below was:
"(a) 'n Verklarende bevel dat ingevolge die kontrak, aanhangsel 'A',
growwe riviersand nie aan die toetsingsvereistes van skedule
2 tot die
spesifikasies moes voldoen ten einde aan klousule 11.2.2 van die spesifikasies
te voldoen nie;
(b) 'n Verklarende bevel dat die ingenieur se opdrag dat growwe
8
riviersand wel moes voldoen aan die toetsingsvereistes van skedule 2
gevolglik 'n wysigingsopdrag ingevolge die bepalings van klousule
51(1) van die
algemene kontraksvoorwaardes was."
The
reason for the reference to coarse river sand only is that this was the material
which the appellant proposed to use and did in
fact use in the execution of the
work. The object of seeking the order was to require the engineer thereafter to
calculate the additional
compensation to which the appellant would be entitled
in the event of its interpretation of the contract being the correct
one.
The documents incorporated into the contract included various minutes of
site meetings and telexes exchanged between the appellant
and the department.
Several of these documents, as I shall show, served to spell out and explain
what the parties had in mind with
regard to the specifications for bedding and
padding material. Nonetheless, a great deal of evidence was led at the
trial.
9
The appellant called as witnesses both Mr Burger who is a civil engineer
specialising in civil engineering materials and Mr Raubenheimer
who is a
director of the respondent and also a qualified civil engineer. The respondent
in turn called Mr Tanner who is also a civil
engineer as well as Mr Tee who is a
senior technician and who, as Installation Liaison Officer, represented the
department on site
during the execution of the work. The evidence covered a wide
Geld. Much of it was technical and related to such questions as the
suitability
or otherwise of various materials for use as bedding and padding in a pipe
laying operation such as the one in question.
Much of it went far beyond the
accepted limits of surrounding or background circumstances and related to such
matters as the meaning
of certain provisions in the contract and in some cases
even to what was intended.
Mr van Riet
. who appeared together with
Mr
van Staden
for the appellant, readily conceded that there was a great deal
of evidence to which
10
regard could not properly be had in construing clause 11.2.2 of the
specification. He submitted, however, that regardless of the existence
of any
possible uncertainty or ambiguity in the contract it was always permissible to
have regard to extrinsic evidence in order
to explain and give content to words
or expressions which have a technical meaning or are used in a special sense
(see
Richter v Bloemfontein Town Council
1922, AD 57
at 70;
Rand
Rietfontein Estates Ltd v Cohn
1937 AD 317
at 327) and on this basis be
sought to rely on evidence relating to the meaning of the expression "crusher
run" and to a lesser extent
the expression "coarse river sand".
It was common cause between the two expert witnesses, Mr Burger and Mr
Tanner, that crusher run is material which has passed through
a crusher. Mr
Burger, however, went further and testified that because most of the crusher run
which is produced commercially is
used for
11
base courses for roads, the expression is generally used in the trade to
refer to aggregates produced for this purpose and conforming
with the
specification laid down by the South African Bureau of Standards for such
aggregates (SABS 1083 - 1976). This specification
makes provision for two grades
of aggregates; the one varying from a maximum particle size of 37,5 mm down to
dust and the other
varying from 25,5 mm down to dust. Neither would conform with
the grading requirements referred to in clause 11.2.2 of the specification.
Nonetheless, Mr Burger conceded that the expression "crusher run" was also used,
albeit infrequently, to mean any material that had
been passed through a
crusher. Indeed, the expression is used in this sense in a SABS specification in
relation to cable trenches
(SABS 1200 LC - 1981) which was put to Mr Tanner in
cross-examination in another context.
The two experts were also in agreement that generally
speaking
12
coarse river sand was readily identifiable and that by visually examining
it one could get a fair idea of whether it was clean or
whether it contained
silt or clay material.
Mr van Riet
submitted that the expression "crusher run" in clause
11.2.2 had to be given the ordinary meaning it has in the trade and that
accordingly
the specifications referred to in the clause could not have been
intended to apply to this category of material. Similarly, and because
of the
readily identifiable nature of coarse river sand which according to the evidence
was suitable as bedding and padding material,
he contended that the
specifications could not have been intended to apply to coarse river sand
either. In support of the latter
submission he relied, in addition, on evidence
which had been led to the effect that it would have been very difficult to sieve
coarse
river sand so as to bring it within the specifications given in the
clause. Such evidence, of course, went far
13
beyond the scope of evidence which was merely of an identificatory
nature. With regard to the actual language of clause 11.2.2 of
the
specification,
Mr van Riet
emphasized the use of the word "or" after the
expressions "crusher run" and "coarse river sand" and pointed out that a
consequence
of the interpretation contended for by the respondent was to render
the expressions "crusher run" and "coarse river sand" unnecessary
as both these
materials would fall within the ambit of the third category, it being common
cause that they were both materials of
"a granular non-cohesive
nature".
Dealing first with the language of the clause, a difficulty which is
encountered with the appellant's interpretation is that it involves
construing
the word "material" in the second sentence as referring solely to the third
category of material, whereas the repeated
use of the word "material" in the
first sentence in relation to all three categories suggests that it was intended
to refer to all
bedding and padding material in the
14
second sentence as well. Similarly, there is nothing in schedule 2 (which
is referred to in the second sentence) that suggests that
the tests detailed
therein are applicable only to the third category of material. On the contrary,
the schedule itself and particularly
the heading (quoted above) suggest that the
tests are to apply to all material used for bedding and padding.
The fact that the expression"crusher run" is commonly used in the trade
to mean aggregate for base courses for roads ceases to be
of significance, I
think, once it is accepted that the expression is also used to describe any
material that has been passed through
a crusher. Furthermore, it seems most
unlikely that crusher run graded from 37,5 mm or 25,5 mm to dust should be
permitted while
the third category of material, which was also to be of a
granular non-cohesive nature, was required to be graded between 0,6 mm
and 19
mm. In the light of this specification as to size it
15
also makes no sense that the contractor should be free to choose between
a maximum particle size of 37,5 mm and 25,5 mm.
The appellant's construction, as pointed out by
Mr van Riet
. does
indeed result in the reference to crusher run and coarse river sand being
unnecessary as both these materials would fall within
the ambit of the third
category. This, however, is not necessarily decisive, particularly when regard
is had to the nature of the
document in which the clause is contained. But if
there is any ambiguity, it is removed, I think, if regard is had to some of the
other documents incorporated into the contract.
One such document is a minute of a pre-tender site
meeting
held on 16 February 1987 and attended by the appellant together with
other
potential tenderers. Paragraph 6.9 reads:
"Samples of suitable bedding and padding material from various sources
along the route which had been tested were on display at the
pre-inspection
meeting.
16
Tenders should make provision for the transporting of bedding and padding
material over long distances. All bedding sources will be
tested regularly and
material not meeting the specification (schedules 2 and 4) will be rejected. A
list of possible sources appears
in Appendix A to these minutes. Available
quantities are unknown."
It is clear from this paragraph
that "all bedding sources" were required to
be subjected to the
tests detailed in schedules 2 and 4 to the specification.
(Schedule 4 was applicable only in the case of marshy or
waterlogged
conditions). The minute is therefore in direct conflict with the
construction
contended for by the appellant.
The appendix referred to in paragraph 6.9 is equally
revealing.
It reads:
"Possible sources of bedding and padding material. These sources are not
guaranteed and tenderers are advised to do qualitative and
qualitative tests.
The onus is on the tenderer to secure sufficient bedding and padding material
which meets the specification (see
schedules 2 and 4).
1. Sundays River Graaff-Reinet Municipality Just North of
Graaff-
17
Reinet Tel.: 0491-22121
OB117B - OB117C
(good; may need sieving)
2.
F. P. van der
Merwe P.P. van der Merwe farm Riversdale Riversdale OB120-120A Tel.:
0491-22020
3.
Groothoek farm
A. Saunders Middelburg Groothoek (not tested) Tel.:
22018
4.
Beskuitfontein farm
Piet Erasmus Middelburg Beskuitfontein (not tested) Tel.:
22017
5. Driefontein W.R.C. Collet
Middelburg Driefontein
(not tested)"
It was common cause that
the five sources referred to in the appendix were
all coarse river
sand sources. But there can be no doubt that the material
derived therefrom was to be subjected to testing as provided for
in
schedules 2 and 4. Nor is there anything in the appendix to suggest
that
18
some material would not have to conform with the tests detailed in
the
specification.
There is still more. On 10 April 1987, ie after the
appellant
had submitted its tender but
before it had been accepted, the department
sent a telex to the appellant seeking information. The relevant portion
of
the telex reads:
"Could you as a matter of urgency indicate separately for each tender,
the following information please:
2
3. ...
4. What sources of bedding and padding material have
been
identified?
What quantities have been secured?
Have all sources been tested in accordance with schedule 2
of
the specification?
What is the price of bedding and padding material at
the
source delivered?
Provide a list of sources and indicate quantities and
whether it
passes the test outlined in shedule 2 of the specification."
The information requested was obviously required for the purpose
of
19
deciding whether to accept the appellant's tender or not. The telex
could
have left the appellant in no doubt that as far as the
department was
concerned all bedding and padding material from whatever source
would
be required to meet the tests detailed in the schedules to the
specification.
The appellant replied by telex dated 15 April 1987.
Paragraph
4, which was headed "Sandbronne" and clearly intended to relate
to
paragraph 4 of the telex of 10 April 1987, detailed a number of sources
and
then proceeded.
"Omdat die sandkwaliteit baie wissel is geen toetse gedoen nie. Tydens
die kontrak sal 'n terreinbestuurder voltyds sandbronne soek,
toetse laat doen
en die nodige sifprosesse reël om geskikte sand op die terrein te voorsien.
Ons sal self aflewer - sien toerustingskedule
vir wipbakvragmotors."
This reply is wholly inconsistent with the attitude
subsequently
adopted by the appellant as to the meaning of clause 11.2.2 of
the
specification. Far from disputing the need for coarse river sand to be
tested
20
in accordance with schedule 2 the appellant was here stating its
intention to do tests and set up a sieve process in order to provide
"geskikte
sand" on site.
The telexes of 10 and 15 April 1987 as well as the minute of the site
meeting held on 16 February 1987 and the appendix thereto were
included in the
documents incorporated into the agreement. Collectively they evince quite
clearly, in my view, an intention on the
part of the contracting parties that
all bedding and padding material was to comply with the specifications contained
in clause 11.2.2
and to meet the tests detailed in schedules 2 and 4. The only
argument which
Mr van Riet
could advance in relation to these documents
was that they should be given less weight than the specification itself. But the
very
object of incorporating into the contract documents such as the minutes of
pre-tender site meetings and telexes exchanged between
the parties was no doubt
to remove any
21
misunderstanding that might have existed between them and to avoid the
type of dispute that in fact subsequently arose. There can
be no possible basis
for attempting to construe the specification in isolation and without regard to
these documents. Once, however,
regard is had to them, any ambiguity there may
be in the specification is removed.
It is now well established that where sufficient certainty as to the
meaning of a contract can be gathered from its language it is
impermissible to
reach a different result by drawing inferences from surrounding circumstances.
(See
Delmas Milling Co Ltd v Du Plessis
1955 (3) SA 447
A at 454 H;
Total South Africa (Pty) Ltd v Bekker NO
[1991] ZASCA 183
;
1992 (1) SA 617
(A) at 624 I -
J.) Accordingly, there was no call to have regard to extrinsic evidence as to
surrounding circumstances in the present
case.
It follows that in my view Jennett J was correct in dismissing the
appellant's claims.
22
The appeal is dismissed with costs, which costs are to include the costs
occasioned by the employment of two counsel.
D G SCOTT
HEFER JA)
- Concur VIVIER JA)