Basil Read (Proprietary) Limited v Regent Devco (Proprietary) Limited (41108/09) [2010] ZAGPJHC 75 (9 March 2010)

Basil Read (Proprietary) Limited v Regent Devco (Proprietary) Limited (41108/09) [2010] ZAGPJHC 75 (9 March 2010)

The court held that the applicant's claim is based on the interim payment certificate issued by the respondent's principal agent, not on the adjudicator's determination. The payment certificate creates an independent cause of action and is contractually enforceable unless valid contractual defences such as fraud or excess of mandate are raised, which the respondent did not do. The respondent's objections regarding the adjudicator's determination do not affect its obligation to pay the certified amount. The contract expressly requires the parties to give effect to the adjudicator's decision unless and until set aside by arbitration. The respondent's remedy lies in arbitration, not in...

Citation
[2010] ZAGPJHC 75
Parties
Applicant: Basil Read (Proprietary) Limited; Respondent: Regent Devco (Proprietary) Limited
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
9 March 2010
Case Number
41108/09
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted in favour of the applicant.
Judges
Mokgoatlheng
Legal Topics
Construction Contracts, Payment Certificate, Adjudication Clauses, Interim Relief, Contractual Obligations
Commercial and Corporate Civil Procedure Construction Contracts Payment Certificate Adjudication Clauses Interim Relief Contractual Obligations

Case Brief

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Parties

Basil Read (Proprietary) Limited

Applicant

Regent Devco (Proprietary) Limited

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the respondent is contractually obliged to pay the amount certified in the interim payment certificate issued by its principal agent.
  2. 2 Whether the adjudicator's determination affects the enforceability of the payment certificate.
  3. 3 Whether the respondent can rely on alleged misrepresentations or irregularities in the adjudicator's determination to avoid payment.

Ratio Decidendi

The court held that the applicant's claim is based on the interim payment certificate issued by the respondent's principal agent, not on the adjudicator's determination. The payment certificate creates an independent cause of action and is contractually enforceable unless valid contractual defences such as fraud or excess of mandate are raised, which the respondent did not do. The respondent's objections regarding the adjudicator's determination do not affect its obligation to pay the certified amount. The contract expressly requires the parties to give effect to the adjudicator's decision unless and until set aside by arbitration. The respondent's remedy lies in arbitration, not in...

Court Disposition

Application granted in favour of the applicant.

Orders

  • The respondent is ordered to pay the applicant the sum of R29,554,941.97 plus VAT.
  • The respondent is ordered to pay interest on the sum of R29,554,941.97 at the rate of 15.5% calculated from 3 September 2009 to date of payment.