Amanzi For People Trading (Pty) Ltd and Another v Nomano Trading and Others (25/2018) [2021] ZAFSHC 300 (26 November 2021)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 25/2018

In the matter between:

AMANZI FOR PEOPLE TRADING (PTY) LTD

1st Plaintiff

LMB PROJECT MANAGEMENT &

ENGINEERING 2nd Plaintiff

SERVICES (EDMS) BPK

And

NOMANO

TRADING 1st Defendant

MAKAMOHELO

TRADING 2nd Defendant

MBB

TRADING

3rd Defendant

HEARD ON:

17 AUGUST 2021

JUDGMENT BY: DANISO, J

DELIVERED ON: This judgment was handed down electronically by circulation to the parties' representatives by email and by release to SAFLII. The date and time for hand-down is deemed to be 14H00 on 26 November 2021.

[1] During September 2015, the parties concluded a written contract in terms of which the defendants sub-contracted the plaintiffs to supply, install and commission mechanical equipment consisting of a 15 meter mechanical bridge, a priming centrifugal pump and a submersible pump at a building site for Jacobsdal Waste Water Treatment Works for a contract sum of R627 612.00 excluding VAT.[1]

[2] In terms of the said contract:

2.1. The works were to be executed in three phases. In the first phase the plaintiffs were required to submit completed designs and drawings of the equipment within 1 to 2 working weeks from the receipt of the purchase order and acceptance. In the second phase the plaintiffs were required to manufacture the equipment within 6 to 8 working weeks after the approval of the drawings; and in the last phase, the plaintiffs were required to install the equipment at the site within 1 to 2 working weeks after completion of the manufacturing.

2.2. The defendants agreed to remunerate the plaintiffs within 30 days of receipt of the invoices as follows:

2.2.1. 30% value of the contract on approval of drawings;

2.2.2. 50% value of the contract on completion of manufacturing;

2.2.3. 10% value of the contract upon delivery of the equipment to site; and

2.2.4. 10% balance on completion of installation and testing on site.

[3] On the pleadings it is common cause that the parties concluded a contract based on work to be done by the plaintiffs for the defendants at an agreed fee payable by way of interim payments on completion of certain phases. It is also not in dispute that about a month after the conclusion of the contract the plaintiffs completed the first phase of the project and submitted designs and drawings of the equipment to the defendants. An invoice for the sum of R214 643.30 was subsequently presented to the defendants on 19 October 2015. The defendants paid the invoice in two instalments on 10 and 12 December 2015 respectively.

[4] On 15 August 2016, the plaintiffs presented an invoice for the completion of the second phase pertaining to the manufacturing of the equipment (the pumps and the bridge) in the sum of R467 641.00. This invoice was unpaid.

[5] The defendants’ failure to pay the invoice has led to the plaintiffs instituting this this action against the defendants claiming an amount of R429 286.61 (as amended) plus interest.

[6] In denial of their liability the defendants dispute the plaintiffs’ performance and contend that plaintiffs breached the contract by failing to complete the works within the 12 weeks’ timeframe as provided for in the contract. The plaintiffs are thus disentitled to payment of the invoice due to the late performance

[7] The plaintiffs do not deny that the bridge was not completed within the timeframe specified in the contract. It is the plaintiffs’ case that time for performance was not the essence of the contract.

[8] The issue of determination is whether the plaintiffs have fulfilled their obligations in terms of the contract. The onus is on the plaintiffs to allege and prove that ‘everything was done that had to be done in terms of the contract’ on which they rely for their claim.[2]

[9] Mr. Masale Clement Manoko who gave evidence for the plaintiffs’ case testified that the time for performance was not the essence of the contract and this is evidenced by the fact that the defendants also did not perform their obligations in the manner and also within the timeframes provided in the contract. The first invoice was paid approximately 60 days after it was submitted instead of 30 days as provided for in the contract. The payment was also not made in full, the defendants paid a sum of R110 000.00 on 10 December 2015 the balance of R104 643. 30 was only paid on 12 December 2015.

[10] Mr. Manoko said the pumps were completed and delivered in December 2015, however, the construction of the bridge only commenced in January 2016 due the builders’ festive season break for the period 10 December to 10 January 2016. In March 2016 the bridge was sent to a galvanising company to prevent water corrosion. The entire manufacturing process of the bridge was completed in August 2016. The delay was beyond the plaintiffs’ control.

[11] On 15 August 2016 the defendants were informed that the bridge was complete and ready for delivery. Their consultant inspected the bridge and was satisfied that the bridge was in order. The issue of the plaintiffs’ late performance in this regard was never raised.

[12] An invoice for an amount of R429 286.61 was thereafter submitted together with a progress report followed by a letter of demand for payment.[3] No explanation whatsoever was provided by the defendants for their failure to pay.

[13] At the end of the plaintiffs’ case the defendants applied to be absolved from the instance. It was the defendants’ case that the contract imposes reciprocal obligations and timeframes within which the parties were required to fulfil their obligations. The plaintiffs have failed to prove that they have fulfilled their contractual obligations in that there is no proof that the work was completed and that it was completed within the 12 weeks’ timeframe as provided for in the contract. The obligation by the defendants to pay has therefore not arisen.

[14] I exercised my discretion and refused absolution holding that the defendants should be called to their defence for the reason that, on the available evidence, the fact that the parties concluded contract which provided for periodical progress payment is not in dispute. The plaintiffs are thus entitled to payment at the end of each of the completed phases and not at the completion of the entire works. With regard to the purported late performance, a contractor who has performed the work in accordance with the contract is still entitled to be remunerated the contract sum despite late performance.[4]

[15] Mr. Zithembile George Nomano testified for the defendants’ case. He stated that the defendants were awarded a tender (the main contract) by the Municipality for the upgrading of Jacobsdal Waste Water Treatment Works. The defendants in turn sub-contracted the plaintiffs to render mechanical services consisting of the supply and installation of mechanical pumps and a bridge.

[16] It was his testimony that the plaintiffs delayed in completing the works within the timeframes stipulated in the contract as a result the Municipality cancelled the main contract and the defendants had to vacate the site.

[17] He confirmed that the plaintiffs delivered the pumps however due to the delay the pumps could not be installed at the site and by the time the manufacturing of bridge was completed the defendants had already vacated the site. It is on that basis that he is of the view that since the plaintiffs failed to perform their obligations timeously, they are not entitled to be remunerated for those services.

[18] Mr. Nomano conceded that the invoice submitted for the completion of the first phase was paid despite the fact that the designs and drawings were completed about two months after they were due. He also admitted that the at no stage were the plaintiffs informed about the delay, the cancellation of the main contract by the Municipality and the defendants’ evacuation of the site. He told the court that the project consultant was the appropriate person to testify about the terms of the contract, the delays and the progress of the project. He (Mr. Namano) he did not interact directly with the plaintiffs.

[19] With regard to the progress report, he could not remember if he received it or not except that he did have sight of the email the plaintiffs had sent advising him of the completed bridge, at that stage the defendants had already vacated the site. The contract between the plaintiffs and the defendants has not been cancelled as he did not deem it necessary to do so.

[20] That was in short the summary of the evidence presented for the parties. There is no material or significant disagreement between the evidence tendered by the parties’ witnesses on the essential terms of the contract except for the defendants’ allegation that the plaintiffs are disentitled to the payment they seek due to having breached the contract by failing to complete the works within the time stipulated in the contract.

[21] The plaintiffs’ witness made a favourable impression on this court, his evidence was succinct and without any inherent improbabilities. His evidence that the parties had not expressly agreed that time was of the essence of the contract is overwhelming believable. I have no reason to doubt it more so as it is corroborated by the contract. Ex facie the contract there is no clause providing that time was of the essence of the contract.

[22] It is my view that the fact that there is also no penalty clause providing for either party’s remedies in the event of non-compliance with the time frames militates against the defendants’ assertion that time was of the essence of the contract.[5]

[23] The defendants’ witness gave vague and contradictory versions with regard to the reasons why the defendants are not liable to pay the invoice.

[24] It was pleaded and also put to the plaintiffs’ witness that the plaintiffs had failed to provide the defendants with proof of the completion of the bridge however, Mr. Nomano could not dispute that the plaintiffs had submitted a progress report upon completing the bridge. He said he could remember seeing the plaintiffs’ emails in that regard. Another version that he proffered was that he was informed of the completion of the bridge by the consultant but it was after the defendants had left the site.

[25] Having regard to the version put to the plaintiff’s witness it was also expected of the defendants’ witness to tell the court that only one pump, the centrifugal pump was delivered by the plaintiffs. Mr. Nomano said both pumps were delivered.

[26] It is also the defendants’ case that as a result of the plaintiff’s failure to deliver the equipment timeously the Municipality cancelled the main contract with the result that the defendants had to vacate the site, however, on the defendants’ own version, at no stage were the plaintiffs informed about the alleged cancellation of the main contract, the reasons thereof or about the defendants’ evacuation of the site.

[27] Contrary to Mr. Nomano’s contention that the plaintiffs were not entitled to payment due to their failure to perform timeously with the provisions of the contract when his evidence in this regard was tested under cross-examination to determine the truth in it, he changed his version and told the court that the project consultant was the relevant person to testify about the terms of the contract, the delays and the progress of the project. He said he did not interact with the plaintiffs directly. Evidence is either probable or not. This witnesses’ evidence is riddled with improbabilities.

[28] It should be stated that this allegation was not put to the Plaintiffs’ witness whilst the witness was on the stand to give him an opportunity to respond. The allegation constitutes new evidence. In my view, it is a mere afterthought invented to suit the circumstances of the case.

[29] The discrepancies which exist in the evidence of the defendants’ witness adversely affected his credibility. I’m not persuaded that truth has been told by this witness.

[30] On the accepted evidence, it has been established on a balance of probabilities that the plaintiffs have complied with their obligations. The defendants are not entitled to refuse to remunerate the plaintiffs merely on the basis of late performance.[6]

[31] It is important to note that it has not been pleaded and there is also no evidence that at all material times hereto the plaintiffs were aware of the terms of the main contract therefore the time agreed upon in this contract was the essence of the contract and most importantly, that as a result of the plaintiffs’ purported late performance, the defendants have suffered damages which would have to be set off against the claim.

[32] In the circumstances, I’m satisfied that the plaintiffs have adduced sufficient evidence to prove their claim on a balance of probabilities. The plaintiffs’ claim prevails.

[33] With regard to costs, there is no reason why the costs should not follow the result. I’m not persuaded by the plaintiffs’ contention that the defendants should be ordered to pay the costs of this action on an attorney and client scale merely on the basis that the defendants were absent at a pre-trial hearing and have refused to settle the matter.

[34] The plaintiffs should have sought the costs at the pre-trial hearing and there is nothing untoward about a litigant exercising its rights to defend a claim. The plaintiffs have not made out case for the order they seek in this regard.

[35] The order that I issue is the following:

1. The defendants are ordered jointly and severally one paying the other to be absolved to pay the plaintiffs the sum of R429 286.61 together with interest a tempore morae at prescribed rate on the amount of R429 286.61 from date of demand to date of payment.

2. The defendants to pay jointly and severally one paying the other to be absolved the costs of this action on a party and party scale.

NS DANISO, J

APPEARANCES:

Counsel on behalf of Plaintiffs: Adv. P.V. Mabasa

Instructed by: Rossouws Attorneys

BLOEMFONTEIN

Counsel on behalf of Defendants: Adv. C.J. Hendricks

Instructed by: Kruger Venter Inc.

[1] Annexures “A” and “B” of the particulars of claim are copies of the appointment letter and the acceptance of appointment dated 28 and 29 September 2015, respectively.

[2] Dalinga Belleggings (Pty) Ltd v Antina (Pty) Ltd 1979 (2) SA 56 (A).

[3] Annexure “D1” of the particulars of claim is a copy of the plaintiffs’ attorneys letter of demand dated 26 September 2017.

[4] Dominion Earthworks (Pty) Ltd v MJ Greef Electrical Contractors (Pty) Ltd) 1970 (1) SA 228 (A).

[5] It is expected that an engineering contract (locatio conductio operis) would spell out succinctly the time of performance and the penalty for non-timeous performance.

[6] Page 234 paragraphs C to E, supra at fn 3.