Group Five Building Ltd v Minister of Community Development

• Jurisdiction: South Africa

Group Five Building Ltd v Minister of Community Development
1993 (3) SA 629 (A)

1993 (3) SA p629

Citation	1993 (3) SA 629 (A)
Court	Appellate Division
Judge	Joubert JA, E M Grosskopf JA, GoldstonE JA, Nienaber JA and Harms AJA
Heard	May 13, 1993
Judgment	May 28, 1993

Flynote : Sleutelwoorde

Engineering and construction law — Building contract — Claim for additional payments based on breach of alleged implied terms of contract resulting in completion of contract after contractual completion date — Contractor alleging implied term that breaches resulted in contractual completion date being superseded by term that contract to be completed within a reasonable time — Words 'or by any other causes beyond the contractor's control' in clause in contract providing for application for extension of completion date in certain circumstances wide enough to embrace wrongful conduct of employer — Express terms of contract providing for eventualities complained of by contractor — Implied term A requiring completion within a reasonable time contrary to express term of contract — Such implied term cannot co-exist with express term — Exception to claim rightly upheld.

Headnote : Kopnota

The appellant had instituted action in a Provincial Division against the B respondent in which it made various claims arising out of a building contract entered into between the parties. The claims were for payment in terms of the contract and for damages for breach thereof. The appellant had relied on certain unexpressed tacit or implied terms for certain of the claims. An exception against the latter claims was upheld on the ground that the tacit or implied terms were irreconcilable with the express terms of the contract. The contract, in clause 3(iii) thereof, made provision for the engineer having 'the right by means of an order in C writing . . . to increase or decrease the quantities of any item or items or to omit any item or items or to insert any additional item or items . . .'. Such variations were to be measured and valued at the rates and prices contained in the contract. If there was a dispute as to whether any order in writing constituted a variation order in terms of the contract, the decision of the engineer would be final. The duration of the contract was governed by clause 17(ii) which provided for the handing over of the site by the respondent to the appellant and that 'the whole works shall be D completed within 24 months from the date of the letter of acceptance of the tender'. Clause 17(ii) provided that '(i)f the works shall be delayed by cessation of work by any workmen, inclement weather, or by any omissions, additions, substitutions or variations of the works, or of any items of work, labour or material, or by any other causes beyond the contractor's control then the contractor shall have the right within 21 days of any such cause of delay arising, to apply in writing to (the employer) through the engineer to extend the date of completion mentioned E in ss (i) of this clause . . .'. Clause 17(iii) provided for various decisions which could be made in the event of an application for the extension of the date of completion and clause 17(iv) provided that '(s)hould the contractor fail to apply in writing for an extension . . . or should the (employer) refuse to grant any extension in writing, then the contract period provided for in ss (i) of this clause shall not be exceeded nor the contractor exonerated from liability to pay liquidated F damages or for the specific performance in every respect of the works . . .'. According to clause 18 'times shall be considered as the essence of the contract' and the clause went on to provide that, should the contractor fail to complete the works in compliance with clause 17, the employer would have the right to deduct from the contract price 'as and for liquidated and agreed damages a sum of R500 per day for each day on which the completion of the works may be in arrear . . .'. Clause 28 provided that the contract did 'not exclude the rights of either party to have recourse to the courts of law of the Republic of South Africa in any G dispute,

1993 (3) SA p630

A other than is specifically provided for herein'. The appellant claimed, inter alia, additional payment based on a contract price adjustment clause, it being alleged that the contractual completion date (as extended in terms of the contract) was no longer applicable due to the respondent's breaches of the alleged implied terms of the contract (ie unauthorised suspension of the works; delayed issue of variation orders in circumstances in which the delay might reasonably have been expected to prevent the appellant from completing the works by the extended completion B date, and disruption of the works by variation orders not given timeously in relation to the progress of the works or given at inopportune times resulting in the disruption of the progress, method and sequence of the construction of the works). The amount owing therefor had to be calculated by reference to the reasonable time for completion of the works which coincided with the actual time of completion (six months after the C extended completion date) and without regard to any deductions in terms of clause 18 of the contract. The claim was, therefore, based on the dual proposition, firstly, that the respondent had committed the alleged breaches of contract based on the implied or tacit terms formulated in the particulars of claim and, secondly, that by virtue of the operation of other implied or tacit terms pleaded the duty to complete the works by the agreed completion date was superseded by the duty to do so only within a reasonable time. In an appeal the appellant relied on English and certain D South African cases to the effect that an employer's default excused the contractor's delay and that the contractor could not be faulted for failing to apply for an extension of time within which to complete the contract. The contractual clause providing for applications for extension of the completion date had to be interpreted narrowly, excluding defaults by the employer, since the employer, in terms of the contract, was, but ought not to be, the sole arbiter on the issue (clauses 17(ii), (iii) and (iv)).

E Held, that the words 'or by any other causes beyond the contractor's control' in clause 17(ii) of the contract were wide enough to embrace wrongful conduct by the employer or his agent and that such conduct would entitle the contractor to apply for extension of time (and the appellant was entitled so to apply for an extension because of the respondent's alleged breaches of contract) and, if the application was refused, to have the matter tested in a court of law under clause 28.

Held, further, that the contractor could, in addition, recover any losses F he might have suffered as a result of the employer's wrongful conduct by means of an action for damages.

Held, accordingly, that the express terms of the contract provided for the very eventuality which the appellant had alleged had occurred.

Held, further, that an implied term (that because of the respondent's breaches of the alleged implied terms, the express completion date had been overtaken by a contrary implied term, namely completion within a G reasonable time) could not co-exist with a contradictory express term (as to the completion date).

Wells v Army & Navy Co-operative Society [1902] 86 LT 764 (Hudson's Building Contracts 4th ed at 346) discussed, distinguished and criticised.

Kelly and Hingle's Trustees v Union Government (Minister of Public Works) 1928 TPD 272 discussed, distinguished and criticised.

Held, accordingly, that the exceptions had been rightly upheld, regardless of whether the respondent had committed the breaches of contract now H complained of. Appeal dismissed.

The decision in the Transvaal Provincial Division in Group Five Buildings Ltd v Minister of Community Development confirmed.

Case Information

Appeal from a decision in the Transvaal Provincial Division (Daniels J), upholding exceptions to certain claims. The nature of the pleadings I appears from the judgment of Nienaber JA.

J A Heher SC (with him B K Pincus) for the appellant: The learned Judge should not have found that the tacit or implied terms relied on by the appellant in para 7 of the particulars of claim are inconsistent with the express terms of the contract and cannot be inferred as matters of law or J fact. The foundation of the relationship between the parties is a building

1993 (3) SA p631

A contract which provided for the whole works to be completed within 24 months from the date of the letter of acceptance of tender (clause 17(i)). The plaintiff alleges that the completion of the works was delayed beyond the extended date for completion by reason of breaches of contract or other acts of delay by the defendant which fell outside the scope of the powers of extension allowed to the engineer by clause 17(ii) of the contract. The plaintiff relies on three categories of breach by the B defendant: (1) unauthorised suspension of the works; (2) delayed issue of variation orders in circumstances in which delay might reasonably be expected to have the effect of preventing the plaintiff from completing the works by or after the extended completion date; (3) disruption of the works by orders not given timeously or given at inopportune times or in C such manner as to disrupt the progress, method and sequence of construction. The plaintiff also relies upon the acts of disruption (albeit that such did not constitute breaches of contract) as matters falling outside the scope of clause 17(ii) of the contract ('acts of prevention') and, accordingly, being matters in respect of which the D engineer had no power of extension of time or delay resulting from the execution of such orders. In...