De Jager N.O and Another v Armaments Corporation of South Africa Limited t/a ARMSCOR (3113/2013) [2015] ZAECGHC 83 (1 September 2015)

De Jager N.O and Another v Armaments Corporation of South Africa Limited t/a ARMSCOR (3113/2013) [2015] ZAECGHC 83 (1 September 2015)

The court held that the liquidators lawfully elected not to continue performance of the partially completed contracts and that the defendant, through its representative, agreed to pay the certified value of the work done and spares supplied. Regarding the BEE retention, the court found that the transfer of 25% members' interest to a black shareholder constituted compliance with the contractual BEE requirements within the stipulated period. Therefore, the defendant's entitlement to withhold and forfeit 10% of the invoice values fell away. The plaintiffs were entitled to judgment for the amounts claimed, interest, and costs.

Citation
[2015] ZAECGHC 83
Parties
Plaintiff: Werner de Jager N.O; Plaintiff: Hombakazi Ncediwe Bulube N.O; Defendant: Armaments Corporation of South Africa Limited t/a ARMSCOR
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
1 September 2015
Case Number
3113/2013
Procedural Posture
Civil Trial / Judgment After Consolidated Trial
Outcome
Judgment for the plaintiffs in both consolidated cases; defendant ordered to pay the claimed amounts, interest, and costs.
Judges
Pickering
Legal Topics
Liquidation, Executory Contracts, Bee Compliance, Contractual Damages, Interest on Judgment, Costs of Suit
Commercial and Corporate Civil Procedure Liquidation Executory Contracts Bee Compliance Contractual Damages Interest on Judgment Costs of Suit

Case Brief

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Parties

Werner de Jager N.O

Plaintiff

Hombakazi Ncediwe Bulube N.O

Plaintiff

Armaments Corporation of South Africa Limited t/a ARMSCOR

Defendant

Procedural Posture

Civil Trial / Judgment After Consolidated Trial

Legal Issues

  1. 1 Whether the liquidators are entitled to payment for partially completed work and spares supplied prior to liquidation.
  2. 2 Whether the defendant was entitled to withhold and forfeit 10% of invoice values for alleged non-compliance with BEE contractual requirements.
  3. 3 Whether the transfer of 25% members' interest to a black shareholder constituted compliance with the BEE clause.

Ratio Decidendi

The court held that the liquidators lawfully elected not to continue performance of the partially completed contracts and that the defendant, through its representative, agreed to pay the certified value of the work done and spares supplied. Regarding the BEE retention, the court found that the transfer of 25% members' interest to a black shareholder constituted compliance with the contractual BEE requirements within the stipulated period. Therefore, the defendant's entitlement to withhold and forfeit 10% of the invoice values fell away. The plaintiffs were entitled to judgment for the amounts claimed, interest, and costs.

Court Disposition

Judgment for the plaintiffs in both consolidated cases; defendant ordered to pay the claimed amounts, interest, and costs.

Orders

  • Defendant is ordered to pay to plaintiffs the sum of R419,489.37 under case no 3113/2013.
  • Defendant is ordered to pay to plaintiffs the sum of R157,811.24 under case no 3113/2013.