Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration

• Jurisdiction: South Africa
• Judge: Trengove J
• Judgment Date: 09 June 1977
• Court: Transvaal Provincial Division

Trengove, J.:

This action arises from a contract between the plaintiff company and the defendant in terms of which the plaintiff undertook to construct a section of the national road E T4/8, consisting of a double freeway, approximately 22,80 miles in length, between Pretoria and Bronkhorstspruit, for the defendant and the latter undertook to pay the plaintiff at specified rates for the said work. The value of the contract, as stated in the memorandum of agreement and as computed from the extended rates and prices, was R4 811 074,16, which amount F included a provisional sum of R300 000. But the final value of the contract, quite apart from claims which are still the subject of dispute between the parties, was far in excess of this amount.

In the present proceedings the plaintiff has brought two claims, a main claim, which is referred to in the pleadings as G claim A, and an alternative claim, which is referred to as claim B. I shall in due course refer in some detail to the nature of the respective claims and the issues raised in respect thereof in the pleadings. At this stage it will suffice if I merely mention, in passing, that claim A is based on the contract itself, more particularly on clause 60 (A) (iv) of the general conditions of contract read with clause 15 thereof. H This claim, in effect, amounts to an appeal by the plaintiff to this Court, in terms of clause 60 (A) (iv), against the rejection by the defendant of some 43 appeals by the plaintiff, under clause 15, in regard to the rates or amounts payable in respect of certain items of work under the contract. Claim B is a claim for payment of the sum of R 1 357 606,38 as damages for alleged breach of an implied term of the contract.

The dispute between the parties has a very long history and it has already been subject of legal proceedings both in this Court and in the Appellate Division. (See Alfred McApline & Son (Pty.) Ltd. v Transvaal

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Provincial Administration, 1974 (3) SA 506 (AD)). I think it may contribute towards a better understanding of the matters in issue in the present action if I refer at the outset to the history and background of these proceedings as well as the A circumstances which have given rise thereto.

History and Background

The plaintiff carries on business as a civil engineering contractor and it has been involved in road construction in this country since about 1948. The contract in question was formally concluded on 4 November 1966. The contract consists of B a number of documents of which the following are relevant to the present proceedings, namely the plaintiff's tender dated 12 August 1966, the memorandum of agreement, the specifications, the general conditions of contract, the special provisions of contract, the schedule of quantities and various plans and drawings. In these contract documents the plaintiff C is referred to as the "contractor" and the defendant as the "employer". The "engineer", as defined in the contract and appointed as such by the defendant, was a firm of consulting engineers, Messrs. Van Niekerk, Kleyn and Edwards, to whom I shall hereinafter for convenience sake, refer to as either "the consulting engineer" or "V.K.E".

D The plaintiff commenced to execute the work which was the subject-matter of the contract on 4 November 1966, and in terms of the contract the plaintiff was obliged to complete the work within a stipulated period of 30 months. That would have given a completion date of 4 May 1969, but, for reasons to which I need not now refer, that date was not achieved. The plaintiff was, however, granted extensions of time to allow completion by E 4 March 1970. The final certificate of completion, however, was antedated to 31 December 1969.

The work required for the construction of the road comprised (a) general items involving the establishment of a site camp, the provision of offices, accommodation of existing traffic and F surveying and setting out; (b) the construction of major concrete structures involving bridges at interchanges and river crossings: (c) the construction of minor structures involving pipe culverts, drainage structures, concrete box culverts, kerbs and channels and retaining walls: (d) roadworks; and (e) supplementary work. From time to time, during the course of and even after the execution and completion of the works, disputes G arose between the plaintiff and the engineer in regard to the rates or amounts payable to the plaintiff in respect of certain items of work. The engineer, in pursuance of the powers vested in him in terms of clause 15 (1) of the general conditions of contract, gave his decisions upon these disputes, determining the rates or amounts payable in each instance. Clause 15 (1) H provides:

"15. Authority of engineer and employer.

(I)

the contractor shall execute, complete and maintain the works in strict accordance with the contract to the satisfaction of the engineer. The work shall be carried out under the supervision of the engineer who shall decide any and all questions which may arise as to the quality or acceptability of materials furnished and work performed, the manner of performance, the rate of progress, and, if necessary, the order of procedure of the work, the acceptable fulfilment of the contract and the payment to be made and all other matters incidental to the contract; the generality of the last-mentioned provision not to be limited in any

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way by the earlier provisions. The contractor may appeal to the employer against a decision given by the engineer. The contractor shall lodge such an appeal in writing with the director. Should the contractor not lodge an appeal in writing with the director against the decision of the engineer within 10 days of receiving such a decision, the decision shall be final."

A In some 43 instances the plaintiff was not satisfied with the engineer's decision and with the rates or amounts determined by him and, in each of these instances, the plaintiff accordingly appealed to the defendant in terms of the provisions of clause 60 (A) of the general conditions of contract. This clause provides:

B "60. Disputes

A

In regard to matters referred to in clause 15 (1)

(i)

Unless the contractor has lodged an appeal with the director against the decision of the engineer within 10 days of receiving such a decision, the engineer's decision shall be final and without appeal.

(ii)

The decision, opinion, direction, C certificate or valuation of the employer with respect to all or any of the following matters (hereinafter called "the excepted matters') namely:

(a)

the true intent or meaning of the drawings; or

(b)

the quality of the work carried out or materials supplied by the contractor; or

(c)

any requirement of the employer in respect of any matter referred to in clause 18 shall be final and without appeal.

(iii)

D All disputes and differences of any kind whatsoever, including the interpretation of this agreement and the extent of the rights and duties of the parties thereunder, arising out of or in connection with the contract or the carrying out of the works (whether during the progress of the works or after their completion and whether before or after the determination, abandonment or breach of the contractor), shall be settled by the employer who shall state his decision E in writing and give notice of the same to the engineer and the contractor.

(iv)

But if the contractor be dissatisfied with the decision of the employer on any matter, question or dispute of any kind (except any of the excepted matters) then and in any such case the contractor may within 28 days after receiving notice of the decision of the employer give notice to the director in writing of his intention to take the matter in dispute to a court of law. If such a F notice has not been given in writing within 28 days then the employer's decision shall be final and without appeal. Such disputes, except the withholding by the employer of any certificate or the withholding of any portion of the retention money under clause 55 to which the contractor claims to be entitled or as to the exercise of the power to give a certificate under clause 57 (1), shall not be taken to a court of law until G after the completion or alleged completion of the works unless with the written consent of the employer and contractor:

Provided always:

(a)

that the giving of the certificate of completion under clause 47 shall not be a condition precedent to taking the matter to a court of law,

(b)

that the contractor shall not, H except with the consent in writing of the employer, in any way delay the carrying out of the works by reason of any such matter, question or dispute being taken to a court of law, but shall proceed with the work with all due diligence and shall, until the decision of the court be given, abide by the decision of the employer".

The defendant, however, rejected the appeals in each and every instance and, as the plaintiff was still not satisfied with the rates and payments which had been determined, it gave the defendant notice in writing, in terms of the provisions of clause 60 (A) (iv), of its intention to take the disputes

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to a court of law. This the plaintiff has now done in claim A. The disputed items, 43 in all, are identified in a schedule referred to as schedule B to the plaintiff's particulars of claim (pp. 17 - 23), and in this schedule the following A particulars have been tabulated in respect of each matter in dispute, namely column one, the reference number of the dispute, column two, a brief description of the subject-matter of the dispute, column three, the rate or amount claimed by the plaintiff and the nature of the plaintiff's claim, columns four and five, the engineer's decision and the date thereof, columns six...