Khavhakone Construction Group (Pty) Ltd v Housing Development Agency and Another (22632/2022) [2024] ZAGPPHC 1281 (5 December 2024)

Khavhakone Construction Group (Pty) Ltd v Housing Development Agency and Another (22632/2022) [2024] ZAGPPHC 1281 (5 December 2024)

The Court found that IPC 25 and IPC 26 were properly certified by the engineer and that the first defendant failed to pay the amounts due in accordance with the GCC. The first defendant's reliance on exhibit 1 as a valid rejection or ruling was rejected, as exhibit 1 did not constitute a payment certificate, a ruling, or a valid dissatisfaction notice under the GCC. The evidence showed that the process followed by the first defendant and its representatives did not comply with the contractual requirements for raising and adjudicating dissatisfaction. The plaintiff's termination of the contract was justified due to the first defendant's persistent failure to pay certified amounts, and the...

Citation
[2024] ZAGPPHC 1281
Parties
Plaintiff: Khavhakone Construction Group (Pty) Ltd; Defendant: Housing Development Agency; Defendant: The Minister of Human Settlements N.O.
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
5 December 2024
Case Number
22632/2022
Procedural Posture
Commercial Trial / Judgment After Trial
Outcome
Plaintiff's claim for payment of IPC 25 and IPC 26 succeeds. Plaintiff entitled to terminate the SLA. Costs awarded as specified.
Judges
Retief
Legal Topics
Service Level Agreement, Payment Certificate Dispute, Termination of Contract, General Conditions of Contract, Interest on Judgment Debt
Commercial and Corporate Civil Procedure Service Level Agreement Payment Certificate Dispute Termination of Contract General Conditions of Contract Interest on Judgment Debt

Case Brief

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Parties

Khavhakone Construction Group (Pty) Ltd

Plaintiff

Housing Development Agency

Defendant

The Minister of Human Settlements N.O.

Defendant

Procedural Posture

Commercial Trial / Judgment After Trial

Legal Issues

  1. 1 Whether the plaintiff is entitled to payment of IPC 25 and IPC 26 under the Service Level Agreement.
  2. 2 Whether the plaintiff was entitled to terminate the Service Level Agreement due to non-payment.
  3. 3 Whether the first defendant's defences regarding rejection and dissatisfaction of payment certificates are valid under the GCC.

Ratio Decidendi

The Court found that IPC 25 and IPC 26 were properly certified by the engineer and that the first defendant failed to pay the amounts due in accordance with the GCC. The first defendant's reliance on exhibit 1 as a valid rejection or ruling was rejected, as exhibit 1 did not constitute a payment certificate, a ruling, or a valid dissatisfaction notice under the GCC. The evidence showed that the process followed by the first defendant and its representatives did not comply with the contractual requirements for raising and adjudicating dissatisfaction. The plaintiff's termination of the contract was justified due to the first defendant's persistent failure to pay certified amounts, and the...

Court Disposition

Plaintiff's claim for payment of IPC 25 and IPC 26 succeeds. Plaintiff entitled to terminate the SLA. Costs awarded as specified.

Orders

  • The first defendant is ordered to pay the plaintiff the sum of R 1,246,811.53.
  • The first defendant is ordered to pay interest on the sum of R 1,246,811.53 from date of judgment, calculated at the prescribed interest rate, until date of payment.