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[2015] ZAWCHC 95
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Umzali Civils (Pty) Ltd v City of Cape Town (12364/2012) [2015] ZAWCHC 95 (24 June 2015)
REPUBLIC OF SOUTH ARICA
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
Case No: 12364/2012
DATE: 24 JUNE 2015
In the matter between:
UMZALI CIVILS (PTY)
LTD
.................................................................................................
Applicant
And
THE CITY OF CAPE
TOWN
..............................................................................................
Respondent
JUDGMENT DELIVERED ON 24 JUNE 2015
RILEY, AJ
[1] On 28 June 2012, the plaintiff
instituted action proceedings against the defendant; claiming payment
of R14 331 1113-48, plus
vat thereon, in addition to interest and
costs.
[2] This is an application by the
plaintiff for leave to amend its particulars of claim dated 27 June
2017 in accordance with its
notice of intention to amend dated 27
January 2014. For the sake of convenience I shall refer to the
applicant as plaintiff and
the respondent as defendant.
3. The relevant background facts and
pleadings are chronologically as follows:
3.1 It is common cause that the
plaintiff’s claim arose from the General Conditions of Contract
for Construction Works 2004
(First Edition) as amended and
supplemented by the Contract Specific Data (‘the contract’)
concluded between the plaintiff
and the defendant in respect of
certain engineering and related works which the plaintiff was
contracted to perform at Khayelitsha,
Western Cape.
3.2 In its particulars of claim the
plaintiff avers that as a result of disorder and disruption caused by
the local community, execution
of the works forming the subject of
the agreement was brought to a standstill on 14 April 2011.
3.3 As a consequence of the disorder
and disruption, the plaintiff was unable to execute the work on time
and on 12 May 2011 it
notified the Engineer of its intention to
submit a claim for extension to time and for associated additional
payment, which claim
was updated monthly.
3.4 On 9 November 2011, plaintiff
submitted what it refers to as its final claim in writing to the
Engineer.
3.5 The defendant duly cancelled the
agreement with effect from 18 November 2011 in terms of a letter of
cancellation dated 29 November
2011.
3.6 In terms of paragraph 18 of the
original particulars of claim, plaintiff averred that in compliance
with Clause 48.5, the Engineer
made a ruling in its letter dated 16
January 2012 based on plaintiff’s final claim which was
submitted on 9 November 2011.
3.7 In paragraph 19 of the particulars
of claim plaintiff avers that in terms of the aforesaid ruling the
Engineer partially rejected
the plaintiff’s final claim.
3.8 On 20 January 2012 and pursuant to
the ruling of the Engineer, plaintiff issued a written notice of
special dispute in terms
of Clause 58.7 of the agreement.
3.9 On 28 June 2012 the plaintiff
issued summons against defendant as hereinbefore set out.
3.10 The defendant entered an
appearance to defend where after plaintiff brought an application for
summary judgment on 17 September
2012.
[4] I pause to mention that in
paragraph 3 of the verifying affidavit delivered in support of the
application for summary judgment,
Enrico Bossi, (the plaintiffs
director) states that he ‘…can and do verily swear
positively to the facts verifying
the cause of action and the amount
set out in the plaintiffs summons and particulars of claim.’
[5] Mr Newton who appeared on behalf of
the defendant, has submitted that by stating the aforesaid, plaintiff
had confirmed under
oath that what was contained in the particulars
of claim correctly reflected the nature and factual basis of the
plaintiffs claim
against the defendant.
[6] The summary judgment application
was heard by Griesel, J on 31 October 2012 and on 7 November 2012 he
delivered his judgment
in which he held inter alia as follows:
6.1 That the plaintiff had submitted a
final claim to the engineer on 9 November 2011.
6.2 That the engineer had made a ruling
on 16 January 2012 in which he partially rejected the claim and ruled
that plaintiff was
only entitled to payment of an additional amount
of R588 681-54.
6.3 That although the defendant in its
opposing affidavit admitted that it is liable to pay the amount
referred to in (6.2) above
as certified by the engineer it denied
liability for the balance of the claims.
6.4 The plaintiff was entitled to
summary judgment in the admitted amount, together with interest and
that defendant is entitled
to defend the balance of the claim.
6.5 Summary judgment is granted in
favour of the plaintiff for payment of R588 681-54 plus interest at
15.5 per annum.
6.6 Defendant is granted leave to
oppose as far as the balance of plaintiffs claim is concerned.
[7] Plaintiffs notice of intention to
amend its particulars of claim which is the subject matter of this
dispute reads as follows:
‘KINDLY TAKE NOTICE THAT the
above-named Plaintiff hereby gives notice in terms of Rule 28 of its
intention to amend its particulars
of claim in the manner set out
below (portions in [ ] to be deleted and portions underlined to be
inserted).
TAKE NOTICE FURTHER THAT unless written
objection against the proposed amendment is delivered within 10 days
of this notice, the
amendment will be effected.
1. Section 5.5 as follows:
“The site of the works is
situated in [Khayelitsha] Khayelitsha in the vicinity of Mew Way
Road.”
2. Section 6 as follows:
“Plaintiff [duly complied with
all the material terms of the agreement and] commenced construction
when the site of the works
was handed over by Defendant to Plaintiff
during or about 7 April 2011.”
3. Section 11 as follows:
“On 9 November 2011, Plaintiff
[duly in terms of clause 48, 54 and 42 of the agreement submitted its
final claim] submitted
a settlement proposal for a mutual
cancellation of the agreement in writing to the Engineer. Find
attached a copy thereof marked
Annexure “K4”.
4. Section 15 as follows:
“Payment of additional
time-related items General in terms of clauses [42.4,] 54.3 [,] and
54.4.5 of the agreement …”
5. Section 16 as follows:
“Payment of increased Cost
incidental to the disorder and disruption in terms of clauses 54.3
and 54.4.5 …”
6. Section 17 as follows:
Payment for loss of profit in terms of
clauses 54.3 and 54.4.5 of the agreement …”
7. Section 18 as follows:
“[In compliance with clause 48.5
the Engineer made a ruling in its] In a letter dated 16 January 2012
the Engineer provided
its views regarding [based on] Plaintiff’s
[final claim] settlement proposal submitted on 9 November 2011
(annexure “K4”).
Find attached a copy of the letter
dated 16 January 2012 marked Annexure “K6”.
8. Section 19 as follows:
“In terms of the aforesaid
[ruling] letter, the Engineer recommended that Plaintiff’s
settlement proposal be partially
rejected [partially rejected
Plaintiff’s final claim as submitted. (annexure “K4”)]
9. Section 20 as follows:
“Pursuant to the aforesaid
ruling,] Plaintiff issued a written Notice of Special Dispute on 20
January 2012 in terms of clause
58.7 of the agreement. Find attached
a copy thereof marked Annexure “K7”.”
It is not necessary for the purposes of
this judgment to repeat the contents of the annexures referred to in
the notice of intention
to amend.
[8] Defendant objected to the proposed
amendments on the basis that:
8.1 The defendant admitted to payment
of the sum of R588 681-54 to the plaintiff in the summary judgment
application on the basis
that this liability arose from a claim that
had been submitted to the Engineer by the plaintiff and ruled on by
the Engineer in
terms of the provisions of the agreement annexed to
the particulars of claim.
8.2 The effect of the proposed
amendment if granted, will be to change the plaintiff’s cause
of action from one based on the
result of the Engineers ruling on a
claim, to one based on the engineers partial rejection of a
settlement proposal annexed to
the particulars of claim. (my
underlining)
8.3 Had the plaintiffs cause of action
been pleaded in the manner formulated in the proposed amendment at
the outset, the defendant
would certainly not have admitted liability
towards the defendant for payment of the sum of R588 681-54, but
would have denied
liability in toto (and thus resisted the summary
judgment application) on inter alia the basis that the agreement
between the parties
relieves the defendant from any liability in the
event that the plaintiff should fail to submit an appropriate claim.
8.4 The defendant will accordingly
suffer serious prejudice that cannot be cured by an appropriate order
as to costs or a postponement
in the event that the proposed
amendment should be granted unless the plaintiff procures the
rescission of the summary judgment
and repays all the monies received
by it in satisfaction thereof with interest.
[9] In its opposing affidavit the
defendant further avers that should the proposed amendment be granted
that:
a) Its response to the summary judgment
was based on the fact that it admitted the facts pleaded by plaintiff
in paragraph’s
3, 18 and 19 of its particulars of claim, namely
that a final claim had been submitted and ruled upon by the Engineer
and that
the defendant accordingly owed plaintiff the sum of R588
681-54 in terms of the engineers ruling. (my underlining)
b) It would never have admitted
liability for the aforesaid amount if the plaintiffs claim had been
pleaded in the manner formulated
in the proposed amendment from the
outset.
c) Defendant would have denied
liability in toto, because in such event, it would have been clear
that no claim had in fact been
submitted in terms of the agreement
relied upon by the plaintiff. According to the defendant this would
have meant that it was
absolved from all liability in terms of clause
48.4 of the agreement which provides that if the contractor i.e. the
plaintiff,
fails to deliver its claim within the period provided for
by clause 48.1 read with clause 48.2, the employer i.e. the
defendant,
shall be discharged of all liability in connection with
the claim.
d) To allow the proposed amendment
would result in a situation where it would have effectively been
induced to admit liability for
payment of the sum of R588 681-54
based on a misrepresentation of the plaintiffs cause of action as
contained in its existing particulars
of claim.
e) As a consequence, the defendant will
have suffered serious prejudice that cannot be cured by a cost order.
f) In its present form plaintiffs claim
falls to be determined in accordance with clauses 48 and/or 54 of the
agreement and the
effect of the amendments, if granted, would allow
the plaintiff to found its claim on something other than the
agreement which
claim defendant avers would have become prescribed
and/or be excipiable.
[10] Mr de Waal who appeared on behalf
of plaintiff, contended on the whole that it could not be said that
the proposed amendment
can prejudice the defendant in any way, as the
objection is not premised on a legal ground. In his view the
plaintiffs original
particulars of claim sets out that the plaintiff
submitted its final claim in writing to the defendants appointed
consulting engineer
and principal agent on 9 November 2014 in
accordance with clause 42, 48 and 54 of the contract. According to
him the difficulty
is that some of the clauses upon which plaintiff
basis its claim relate to matters where a ‘ruling’ is to
be sought
from the engineer as a manner of enforcement whereas in
others there is no provision for such ruling and that clause 58.7
relating
to special disputes constitutes the enforcement mechanism.
[11] He conceded that the plaintiffs
particulars of claim in its present form is ambiguous as plaintiff
initially avers that the
engineer issued a ruling in terms of clause
48.5 of the agreement and that in the ruling the engineer partially
granted and partially
rejected the plaintiffs claim whereas in the
next paragraph it is stated that plaintiff issued a written notice of
special dispute
on 20 January 2012 in terms of clause 58.7 of the
agreement.
[12] Accordingly, and in his view, the
particulars of claim are unclear as to whether plaintiff seeks to
enforce a ruling or whether
it calls for the adjudication of a
special dispute or whether the two were pleaded in the alternative.
[13] In its affidavit in support of the
amendment, plaintiff avers that all that is sought to be achieved was
to clarify the particulars
of claim which it avers is not based on
the ruling by the Engineer. Plaintiff avers further that it is
apparent from annexure
“K4” to the particulars of claim
that what the plaintiff submitted to the engineer on 9 November 2011,
was not a claim
but rather a ‘settlement proposal for a mutual
cancellation of the agreement’. In support of this averment,
it relies
on the following:
1. The letter (i.e. annexure “K4”),
in its preamble refers to the words, ‘amicable settlement
proposal …’
2. That it was evident from the letter
that a meeting was held on 25 October 2011 where it was agreed that
plaintiff would submit
an amicable proposal to defendant for its
consideration.
3. The letter contains an offer by the
plaintiff.
[14] Plaintiff avers that the letter
from the Engineer cannot be constructed as a ruling in terms of the
powers of the engineer,
as the engineer was functus officio and/or
had become redundant after the agreement was cancelled and that the
engineer was not
in a position to make rulings.
[15] In regard to the Engineers letter
dated 16 January 2012, it was contended by Mr De Waal that:
1. The letter is made in response to
the offer made by plaintiff as it makes reference to the offer.
2. The Engineer specifically states
that ‘we would argue that an amount of R588 681-54 over the
amount already paid in IPC
no 5 be paid to Kualani Civils in final
settlement.
3. The letter is a counter offer to the
applicants offer.
[16] According to plaintiff it must be
clear from plaintiff’s notice of special dispute dated 20
January 2012 that there was
no ruling from the Engineer.
[17] Mr De Waal contended, that based
on the averments made by the plaintiff hereinbefore, that it must be
so that all the parties
accepted from the outset that there was no
request for a ruling by the Engineer. No such ruling could have been
made because the
agreement had been cancelled by the time the
Engineer supposedly made the ruling and that the notice of dispute
was not in respect
of any such ruling. He accordingly contended
that based on the correspondence, the defendants objections should be
dismissed.
The applicable legal principles
[18] It is trite law that the tendency
of our courts have been to allow amendments where this can be done
without prejudice to the
other party. The court in considering the
grant and/or refusal of an application for the amendment of a
pleading has a discretion
to do so, and such discretion must be
exercised judicially in the light of all the facts and circumstances.
See: Herbstein and
Van Winsen, The Civil Practice of the High
Courts of South Africa ed 5 Vol 1 p 678; Thekwini Properties (Pty)
Ltd v Picardi Hotels
Ltd (and others as third parties) 2008(2) SA
156(D).
[19] It is accepted law that amendments
will be allowed unless the application to amend is mala fide or
unless the amendments would
cause an injustice to the other side
which cannot be compensated by costs or unless the parties cannot be
put back in the same
position as they were when the pleading which is
sought to be amended was filed. See Moolman v Estate Moolman 1927
CPD7. Similar
sentiments, are expressed in Macduff & Co (in
liquidation) v Johannesburg Consolidated Investment Co Ltd
[1923 TPD
309]
where the court placed reliance on Rishton v Rishton
[1912 TPD
718].
[20] The primary consideration in
applications of this nature seems to be whether the amendment will
cause the other party prejudice
which cannot be cured by an order for
costs and where appropriate a postponement. Together with this
consideration it is of course
necessary to bear in mind that the
primary object of allowing an amendment is ‘to obtain a proper
ventilation of the dispute
between the parties’. See
Trans-Drakensberg Bank Ltd (under judicial management) v Combined
Engineering (Pty) Ltd 1967(3)
SA 632(D) at 637A - 641 (C).
[21] A further important principle is
that amendments are not granted as a matter of right. The applicant
must offer an explanation
for why the amendment is required and if it
is not done timeously, it must advance a reason for the delay.
Discussion
[22] In the present matter defendant
has not accused the plaintiff of acting in bad faith. The crucial
issue to consider is whether
or not the amendment will result in the
kind of prejudice as has been described by the authorities
hereinbefore.
[23] Mr De Waal contended that since
the defendant admitted that it was indebted to plaintiff in the
amount of R588 681-54 it cannot
now, as he put it, ‘opportunistically
hinge its liability to plaintiff on the formulation of plaintiff’s’
claim’.
In his view, what defendant seeks to do is in effect
to claim prejudice an account of the fact that it can no longer deny
liability
of that which it acknowledged it to be due to plaintiff.
He submitted that a litigant can never be prejudiced by paying a debt
which the litigant concedes is due.
[24] He argued further that this court
ought not to allow the defendant to rely on the additional grounds of
objection as raised
by the defendant as they were not listed in its
notice of objection. He however conceded that the new grounds do not
take the
matter any further. According to him the effect of the
amendment was not to alter the facts but rather aimed at bringing the
particulars
of claim in line with the true facts, meaning and purpose
of the correspondence referred to above.
[25] I have given careful
considerations to the submissions made by both the parties.
[26] What stands out is that the
information i.e. that plaintiff now seeks to rely on must have been
available to it at the time
it drafted its original particulars of
claim and before it commenced with action in this matter. I am
satisfied that plaintiff
committed itself to the facts and averments
as is contained in the particulars of claim when it proceeded with
the summary judgment
application. It ultimately obtained summary
judgment in the amount of R588 681-54 based on those facts and
averments.
[27] It is clear to me that the
defendant proceeded to deal with the summary judgment application on
the basis of the averments
as contained in the particulars of claim
as they presently stand. It is further clear that on a reading of
the particulars of
claim that plaintiff specifically avers that it
submitted its final claim in writing to the Engineer and that in
compliance with
clause 48.5 the engineer made a ruling based on
plaintiffs final claim.
[28] In my view it is an
oversimplification of this crucial issue to now argue that there is
no prejudice to defendant because ‘the
defendant was either
indebted to the plaintiff in the sum of R588 681-54 or not’ and
that a litigant can never be prejudiced
by paying a debt which it
concedes is due.
[29] As I have stated, a consideration
of the pleadings as they stand, leads to the logical conclusion that
the defendant conceded
its liability to pay the sum of R588 681-54 on
the basis of the case as pleaded in the particulars of claim i.e.
that the sum of
R588 681-54 had indeed formed part of a final claim
submitted to and ruled upon by the Engineer in terms of the agreement
entered
into between the parties. It must therefor be so that the
acknowledgement of indebtedness was made based on the admission of
the
material facts as pleaded in the particulars of claim. I have no
doubt considering the content of the relevant clauses of the
agreement, that had the plaintiff formulated its particulars of claim
in the manner envisaged by the proposed amendment at the outset,
that
the defendant would not have admitted liability for any portion of
the claim considering the defences that are available to
defendant as
set out inter alia in paragraphs 8 and 9 hereinbefore.
[30] I agree with Mr Newton that should
I allow the proposed amendment, then in that event, the defendant
will be denied the opportunity
to challenge its liability to pay a
substantial sum of money to the plaintiff despite the fact that
defendant contests the actual
basis (which was only communicated in
the notice of intention to amend) on which the plaintiff asserts its
claim thereto.
[31] I am also not persuaded that the
plaintiff has provided a reasonable and proper explanation for the
extremely long delay in
bringing this application. What is of
further concern is that the application is brought only after summary
judgment was granted
as far back as 31 October 2012. I am mindful
that defendant has not accused the plaintiff of mala fides and that
even though there
are hints of negligence and/or carelessness on the
part of the plaintiff that ‘the amendment should be allowed if
it can
be made without injustice to the other side’. See
Macduff & Co (in liquidation) v Johannesburg Consolidation
Investment
Co Ltd supra and the authorities quoted in that matter.
[32] It is plain to me that plaintiff
has no intention of agreeing to a rescission of the judgment it
obtained against the defendant,
nor does plaintiff have any intention
to repay to the defendant the sum that was paid to it in accordance
with the judgment.
[33] Having regard to the
considerations of prejudice or injustice to the defendant, I am not
persuaded that the prejudice which
will be suffered by the defendant
can be cured by a cost order and/or by a suitable postponement. In
my view this matter falls
squarely within the category of matters
where the defendant cannot be placed back ‘for the purposes of
justice, in the same
position’ as it was when the pleading
which is sought to be amended, was filed.
[34] As a result of the prejudice and
injustice that will be caused to the defendant should I grant the
relief sought, I am satisfied
that the plaintiff cannot succeed with
its application.
[35] Accordingly I make the following
order:
The application for leave to amend is
dismissed with costs.
RILEY, AJ