Jovan Projects (Pty) Ltd v ICB Property Investments (Pty) Ltd
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Machaba AJ |
| Judgment Date | 20 December 2021 |
| Docket Number | 2020/32427 |
| Hearing Date | 23 August 2021 |
| Court | Gauteng Local Division, Johannesburg |
| Citation | 2022 JDR 0051 (GJ) |
Machaba AJ:
"[1] It is indeed the lofty and lonely work of the Judiciary, impervious to public commentary and political rhetoric, to uphold, protect and apply the Constitution and the law at any and all costs." [1]
INTRODUCTION:
In this application, the Applicant is the plaintiff in an action it instituted against the Respondent/defendant for payment of an amount of R809,478.94 arising from one (1) progress certificate No. 11, and one (1) Final Completion Certificate No. 12. These certificates arise from the civil construction work undertaken by the Applicant to the Respondent's property pursuant to a tender to do so as submitted by the Applicant and accepted by the Respondent.
The crux of the dispute leading to the non-payment of the above invoices is the nature of the building/construction agreement concluded by the parties. The Applicant, supported by Respondent's Principal Agent - Spencer Associated Architects, allege that the parties including the Respondent represented by Spencer, concluded a JBCC Edition 2014 Principal Building Agreement. The Respondent has put the Applicant's version into question. It denies concluding that JBCC PBA agreement, or signing certain contract documentation. It does not deny that it accepted the Applicant's tender, it just denies that it concluded the kind of an agreement that the Applicant and the Respondent's Principal Agent say the Respondent concluded with the Applicant.
Machaba AJ
It thus behoves the Court to narrate the factual background of this matter.
FACTUAL BACKGROUND:
From the particulars of claim, the Applicant alleges that on 29 June 2018 it responded to a tender issued by the Spencer Associated Architects on behalf of the Respondent who was, in turn, represented by one Ivo Dos Santos Branco for the construction of a creche known as Branco Creche. The tender was for R13,025,286.57.
In issuing that tender, the Respondent was represented by its very own Project Engineer being the Principal Agent while the Applicant was represented by Mr JB Van den Linde. Applicant submits that its tender was successful and accepted on 18 July 2018 and annexed a letter to that effect from the Respondent's Principal Agent.
This letter is important in that it seems to suggest two different things to the two persons herein. It first states that the contract concluded is subject to the terms and conditions of JBCC, Edition 6.1 of March 2014 Principal Building Agreement (JBCC PBA) which terms shall be applicable and relied upon for the execution of the said tender. Secondly, it promises a completion of contract documentation which must be signed once the Principal Agent has prepared them and presented same to the parties. The said letter of acceptance plays some role towards this judgment and it is thus necessary to quote its contents herein.
It reads as follows:
"duly instructed by the Employer Mr Branco of 16 Loper Avenue, Spartan Extension, and acting on their behalf, we confirm the intention to appoint you as the principal contractor for the abovementioned contract as soon as all relevant contract documentation has been finalised for signing on the following conditions.
1. The contract sum shall be R13,025,268.57
2. …..
Machaba AJ
9. You are formally to sign the JBCC Principal Building Agreement Edition 6.1, March 2014 as soon as you have complied with the items listed above.
All the previous correspondence of any sort that has taken place in connection with the contract works shall be deemed to be null and void and of no force and effect and replaced by the terms and conditions of this letter which red together with the JBCC Principal Builder Agreement Edition 6.1, March 2014, constitutes the only terms and conditions which will be recognised in connection with the contract works.
Immediately upon receipt of this letter, you are to proceed with the execution of the works, pending finalisation of the contract documentation.
We confirm that the site is available and as soon as the contract documentation requested above has been provided, we will arrange for a formal site handover meeting on or about 23 July 2018..."
Pursuant to the said letter of acceptance and despite all that it stated, and on 25 July 2018, a site handover meeting was held and attended by the Applicant and the Principal Agent who acted on behalf of the Respondent. The minutes thereof are extensive and exceed four (4) pages.
The Applicant states that over a month later after the handover, and specifically on 18 September 2018, the Respondent accepted its tender and there was then a partly written and partly oral agreement. The Respondent's Principal Agent prepared contract documentation for signature. It is the Applicant's contention that it signed the contract but the Respondent has, to date, not signed same.
The said agreement and its terms and conditions are also extensive. However, there are certain clauses that are immediately important. Those are:
The employer and the contractors are defined as the Respondent and Plaintiff respectively.
"Payment certificate", being "a certificate issued at regular intervals [CD] by the principal agent to the parties certifying the amount due and payable in terms of the JBCC Payment certificate format.
Machaba AJ
"Final Payment Certificate" being "the certificate issued by the principal agent after the issue of the certificate of final completion after the final account has been agreed, or deemed to have been agreed."
Clause 3.2 states that "the agreement shall come into force on the date of acceptance by the employer (the contract date)
Clause 5.1 states that "the parties shall sign the original contract documents and shall each be issued with a copy thereof. The original signed documents shall be held by the principal, agent [DC]."
Clause 6.1. states that "the employer warrants that the principal agent has full authority and obligation to act and to bind the employer in terms of this agreement. The principal agent has no authority to amend this agreement.
Clause 6.6 states that "the employer shall not interfere with or prevent the principal agent or an agent from exercising fair and reasonable judgment when performing obligations in terms of this agreement."
Clause 21.12 states that "a certificate of final completion shall be conclusive as to the sufficiency of the works and that the contractor's obligations [12.2.7] have been fulfilled other than for latent defects."
Clause 25.6 states that "the principal agent shall certify one hundred percent (100%) of the amount of final account including the adjustments [26.0; 27.0] in the final payment certificate."
Clause 25.7 states that "the employer shall pay the contractor the amount certified in an issued payment certificate within fourteen (14) calendar days of the date for issue of the payment certificate [CD] including default and/or compensatory interest;"
The Applicant contends that on 5 February 2020, the Principal Agent concluded the preparation of contract documentation and presented same for the Applicant to sign which it did. A copy thereof was handed back to the Principal Agent for the
Machaba AJ
Respondent's signature. The said agreement has still not been signed by the Respondent. [2]
Applicant contends that pursuant to the contract and the provisions thereof, it commenced with the works and brought same to completion. It then along the way issued and was paid progress invoices No.1 to No. 10.
On 2 September 2020, the Principal Agent issued a final completion certificate. Before this final completion, the parties are agreed that the Applicant issued ten (10) progress invoices all of which were paid by the Respondent. The process of compiling, submitting and certifying same followed the JBCC component of the agreement which lends credence to the Applicant and Principal Agent's versions.
It was only right at the end, when progress invoice number 11 in the amount of R478, 251,15 and Final Invoice No. 12 in the amount of R331,127.79 which were certified by the Principal Agent for payment were issued, that the Respondent refused to pay same and a dispute arose.
The Applicant now sues the Respondent for payment of an amount of R809,478.94, plus 6% default interest compounded monthly from 23 September 2020 to date of final payment thereof in terms of the said certified certificates.
In its plea, the Respondent raised a special plea that deals with the internal dispute resolution mechanism in the event that there is a disagreement between the parties.
The Respondent avers that in terms of the said clause 30.1, of the very same agreement which it denies, the parties agreed that should a disagreement arise, they shall attempt to resolve same within ten (10) days and record the resolution thereof. If the disagreement is not resolved, then same shall constitute a dispute which shall be referred to adjudication which must be resolved in ten (10) days from the expiry of the first 10-day period. The issue is that the Applicant has not followed this route.
Machaba AJ
The Respondent also contended that the so-called letter of acceptance of the agreement was, in fact, an intention to appoint the Applicant as the contractor for its project. It contends that the said letter had numerous conditions which the Applicant failed to meet.
It is noteworthy that the said letter of appointment does not state whether the conditions included therein were suspensive (i.e. conditions precedent) or resolutive (i.e. conditions subsequent). [3] A mention of anyone of the two would have been helpful in...
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