Axton Matrix Construction CC v Metsimaholo Local Municipality and Another (2778/2011) [2012] ZAFSHC 129 (28 June 2012)

Axton Matrix Construction CC v Metsimaholo Local Municipality and Another (2778/2011) [2012] ZAFSHC 129 (28 June 2012)

The court found that the engineer's issuance of the payment certificate was within its mandate, as the respondent had approved the variation in expenditure. The resident engineer who signed the certificate was not prohibited from doing so, and the engineer subsequently issued a ruling on its payability. The applicant's undertaking to adjust the certificate did not affect its legal nature, as only the engineer could issue or substitute certificates. The certificate is binding and payable as cash, and any issues between the respondent and the engineer do not affect the applicant's entitlement. The applicant became entitled to the retention monies upon cancellation of the contract due to the...

Citation
[2012] ZAFSHC 129
Parties
Applicant: Axton Matrix Construction CC; Respondent: Metsimaholo Local Municipality; Respondent: Monde Consulting Engineers & Project Managers CC and Aqua Consulting Engineers & Project Managers (joint venture as Monde – Aqua Consulting Engineers and Project Managers)
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
28 June 2012
Case Number
2778/2011
Procedural Posture
Civil Application / Judgment After Opposed Application and Counter Application
Outcome
Application granted in favour of the applicant; respondent's counter application dismissed with costs, including third party costs.
Judges
L J Lekale
Legal Topics
Construction Contracts, Payment Certificates, Liquid Documents, Variation of Contract, Counter Application, Interest on Overdue Payments
Civil Procedure Commercial and Corporate Construction Contracts Payment Certificates Liquid Documents Variation of Contract Counter Application Interest on Overdue Payments

Case Brief

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Parties

Axton Matrix Construction CC

Applicant

Metsimaholo Local Municipality

Respondent

Monde Consulting Engineers & Project Managers CC and Aqua Consulting Engineers & Project Managers (joint venture as Monde – Aqua Consulting Engineers and Project Managers)

Respondent

Procedural Posture

Civil Application / Judgment After Opposed Application and Counter Application

Legal Issues

  1. 1 Whether the interim certificate of payment issued by the engineer is valid and binding on the respondent.
  2. 2 Whether the applicant was entitled to the release of the balance of retention monies at the time of launching proceedings.
  3. 3 Whether the respondent's counter application for damages should be referred to trial.

Ratio Decidendi

The court found that the engineer's issuance of the payment certificate was within its mandate, as the respondent had approved the variation in expenditure. The resident engineer who signed the certificate was not prohibited from doing so, and the engineer subsequently issued a ruling on its payability. The applicant's undertaking to adjust the certificate did not affect its legal nature, as only the engineer could issue or substitute certificates. The certificate is binding and payable as cash, and any issues between the respondent and the engineer do not affect the applicant's entitlement. The applicant became entitled to the retention monies upon cancellation of the contract due to the...

Court Disposition

Application granted in favour of the applicant; respondent's counter application dismissed with costs, including third party costs.

Orders

  • Respondent to pay R463,837.13 to the applicant based on the interim payment certificate.
  • Respondent to pay R459,978.06 to the applicant in respect of the balance of retention monies inclusive of VAT.