CMGM (Pty) Ltd v City Council of Johannesburg (524/87) [1989] ZASCA 7 (14 March 1989)

CMGM (Pty) Ltd v City Council of Johannesburg (524/87) [1989] ZASCA 7 (14 March 1989)

The court held that, regardless of the interpretation of clause 68(4), the appellant did not allow the respondent a reasonable time to make its election regarding adjustment of the contract price after rejecting the appellant's proposals. The appellant's termination of the contract was therefore premature and invalid. The respondent was entitled to the interdict preventing removal of the constructional plant and materials, but prayer 2(b) required amendment due to factual disputes regarding certain items. The appeal was dismissed with costs, including the costs of two counsel.

Citation
[1989] ZASCA 7
Parties
Appellant: CMGM (Pty) Ltd (now known as Group Five Civils Limited); Respondent: City Council of Johannesburg
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
14 March 1989
Case Number
524/87
Procedural Posture
Civil Appeal / Appeal From Full Bench of Transvaal Provincial Division
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Joubert, Van Heerden, Hefer, Steyn, F H Grosskopf
Legal Topics
Contract Termination, Construction Contracts, Interpretation of Contractual Clauses, Urgent Interdict, Removal of Property
Commercial and Corporate Civil Procedure Contract Termination Construction Contracts Interpretation of Contractual Clauses Urgent Interdict Removal of Property

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Party arguments 2
Sign in to unlock

Parties

CMGM (Pty) Ltd (now known as Group Five Civils Limited)

Appellant

City Council of Johannesburg

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Bench of Transvaal Provincial Division

Legal Issues

  1. 1 Whether the appellant lawfully terminated the construction contract under clause 68(4).
  2. 2 Whether the respondent was entitled to interdict the removal of constructional plant and materials from the site.
  3. 3 Whether the respondent made a timely election regarding adjustment of the contract price under clause 68(4).

Ratio Decidendi

The court held that, regardless of the interpretation of clause 68(4), the appellant did not allow the respondent a reasonable time to make its election regarding adjustment of the contract price after rejecting the appellant's proposals. The appellant's termination of the contract was therefore premature and invalid. The respondent was entitled to the interdict preventing removal of the constructional plant and materials, but prayer 2(b) required amendment due to factual disputes regarding certain items. The appeal was dismissed with costs, including the costs of two counsel.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • Prayer 2(b) of the notice of motion is amended by deleting the words 'and in particular the items set out in annexure "R" to the affidavit'.
  • The appeal is dismissed with costs, including the costs of two counsel.