Kungwini Local Municipality v Sekwanele Security Services (A354/08) [2009] ZAGPPHC 184 (16 April 2009)

NOT

REPORTABLE

IN

THE HIGH COURT OF SOUTH AFRICA

(NORTH GAUTENG, PRETORIA)

Case No: A354/08

Date heard: 01/04/2009

Date of judgment: 16/04/2009

In the matter between:

KUNGWINI

LOCAL MUNICIPALITY.......................................................APPELLANT

and

SEKWANELE

SECURITY SERVICES...............................................RESPONDENT

JUDGMENT

DU PLESSIS J:

Towards the end of the year 2005 the appellant, a municipal authority, invited tenders for the rendering to it of security services. The tender was awarded to the respondent and the appellant’s employees prepared a written Security Service Agreement. After it had been signed on the appellant’s behalf, the contract was forwarded to the respondent. The respondent’s chief executive officer and its human resources manager perused the contract and thereafter, on 12 December 2005, signed it on the respondent’s

behalf.

In terms of the contract the respondent had to provide, among other security services, guards to do access control and to guard certain points. In respect of these guard services Annexure “A” to the contract stipulates unit prices. The monthly fee payable in respect of these guard services is based on the unit prices. A dispute arose as to the meaning of the term “unit price” where it appears in Annexure “A” to the contract (“the annexure”). In terms of the annexure the respondent had to render the guard services in 12-hour shifts. Contending that the unit prices in the annexure constitute the monthly fee for one guard for a 12-hour shift, the respondent applied to this division of the High Court for a declaratory order to that effect.

The learned judge of first instance held that the contract between the parties is ambiguous. He then had regard to certain evidence and thereto that the appellant had drafted the contract, and upheld the respondent’s contention. The learned judge granted the desired declaratory order and ordered the appellant to pay the costs. Before us now is an appeal against the judgment and order of the court a quo.

Mr Celliers, who appeared with Mr Nel for the respondent, argued that if the contract is read as a whole, the learned judge of first instance was correct in holding that the contract is ambiguous. I shall now deal with that contention.

Clause 4.2 of the contract provides:

“In this agreement unless otherwise arranged the following fees shall be payable to Sekwanele Security Services by Kungwini Local

Municipality:

4.1. …..

4.2. For guard services a fee of R141 398-82 ... per month for access control and guard points as listed in Annexure ‘A’”.

Relevant to the present issue, the annexure1 provides that the respondent “will be responsible for access control and guarding the following points on twelve hour shifts, as follows: Then, in the extreme left hand column of the annexure follows a list of “ACCESS AND/OR GUARD POINTS”. In the second and third columns the hours during which guard services are required at each point is set out in 12-hour shifts. At most points a 24 hour service is required.

The level of officers required at each point for each shift is set out in columns four and five. The unit prices that form the subject matter of this appeal are listed in the extreme right hand column of the annexure. There is one unit price in respect of each guard or access point. The sum of the unit prices listed in the annexure is R141 398-82, the amount that in terms of clause 4.2 constitutes the monthly fee for guard services “for access control and guard points as listed in Annexure ‘A’”.

Reading only clause 4.2 and the annexure, it seems plain that the respondent had to provide the services listed in the annexure at the monthly fee stated in clause 4.2. Clause 7 of the contract, however, complicates the interpretation. Clause 7.2 (there is no clause 7.1) provides that the appellant was

to advise the respondent within seven days of signing of the contract of the following:

“7.2.1. The number of guards needed for the contract period;

7.2.2. Where the guards must be placed;

7.2.3. Hours per day that the indicated places must be guarded.”

I find it unnecessary to quote clauses 7.3 to 7.5. In essence they provide that the appellant would, after it had notified the

respondent in terms of clause 7.2, be entitled to alter the services it requires.

Mr Celliers submitted that from clause 7, 7.2 in particular, it follows that the intention of the parties was that the respondent would render guard services in accordance with the appellant’s written instructions. For such services the respondent would be paid a monthly fee based on the unit prices in the annexure. The unit price, the argument went on, constitutes the monthly fee per guard per 12-hour shift. There is much to be said for the argument that guard services had to be rendered according to the appellant’s instructions from time to time. In fact, the contract itself defines “guard services” as “trained registered security officers posted as per instruction”. From that it doesn’t follow, however, that the unit price represents the monthly fee per guard per 12 hour shift. There is simply nothing in the contract to suggest that. On the contrary, if clause 4.2 is read with the annexure, the unit price is the price for the full service to be rendered at each point in the annexure. In any vent, I also do not, with respect, agree that the apparent contradiction between clause 4.2 and the annexure on the one hand and clause 7 on the other is real or that the contract is ambiguous by virtue thereof. In terms of clause 4.2 and the annexure the parties agreed on a basic price for certain listed services. If the appellant sought different services, the basic price would probably be used to calculate the fee for such different services or, as clause 4.2 itself envisages, the parties would “otherwise arrange...”

Even if I were wrong and there is an ambiguity, the difficulty with counsel’s argument is that the suggested meaning of “unit

price” exacerbates rather than resolves the perceived contradiction between clause 4.2 and the annexure on the one hand and

clause 7 on the other. I say that because, if the unit price is understood to mean the fee per guard per 12-hour shift, then the

monthly fee stated in clause 4.2 is wrong. I have pointed out that the monthly fee in clause 4.2 is the sum of the unit prices stated in the annexure. Although a 24-hour service is required at most of the access and guard points listed in the annexure, there is only one unit price for each point. It follows that, if the respondent’s contention were correct, the monthly fee in clause 4.2 should have been almost double what it is. In summary, unit price cannot be interpreted as contended for by the respondent without changing the amount in clause 4.2. The respondent did not seek to rectify clause 4.2. Counsel submitted that the amount in clause 4.2 is so clearly wrong that the correct amount could, as a matter of interpretation, be read into the clause. I am not convinced that a court can as a matter of interpretation change the actual wording of the contract. In any event, there is nothing in the contract itself to suggest that unit price must be read in a manner that necessitates change to clause 4.2.

The fact that its proposed interpretation of “unit price” is directly contradicted by clause 4.2 is, in my view, destructive of the respondent’s case. Nevertheless, I point out that by interpreting “unit price” as contended for by the

respondent, the perceived contradiction between the annexure, clause 4.2 and clause 7 is not resolved. Even if one interpreted “unit price” as the monthly fee per guard per 12-hour shift, clause 4.2 and the annexure still indicate that guard services at pre-agreed points had to be rendered during pre-agreed hours and clause 7 still indicates that guard services were to be rendered as per the appellant’s instructions from time to time. The unit price does not affect that.

I have pointed out the learned judge a quo had regard to evidence as to the probable meaning of “unit price”. In argument Mr Celleirs as well as Mr Louw for the appellant made reference to such evidence. In my view such evidence is inadmissible as the perceived ambiguity in the contract can be resolved without it. (See in this regard Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 477 (AD) at 454F and further.) Moreover, as I have attempted to illustrate, evidence as to the meaning of “unit price” does not resolve the perceived ambiguity.

It is concluded that the “unit price” in the annexure is the price per month for the service that in terms of the annexure must be rendered at each point listed there.

In the result the appeal must succeed. The costs of the appeal must follow the event and the parties were agreed that the costs of two counsel must be allowed.

When the appeal was called, the appellant applied for condonation of its failure to prosecute the appeal in time, and for reinstatement of the appeal. Such an order was granted without opposition. As it sought an indulgence, there was no issue that the appellant must pay the costs of the application for condonation and reinstatement on the unopposed scale.

When the appellant did not prosecute its appeal in time, the respondent immediately issued a warrant of execution in accordance with the order of the court of first instance. The appellant brought an urgent application to stay the intended execution. There is no issue that the appellant must pay the costs of the urgent application on the unopposed scale.

In the result the following order is made:

1. The appeal succeeds. The order of the court a quo is set aside and substituted with the following order: “The application is dismissed with costs.”

2. The respondent is ordered to pay the appellant’s costs of the appeal, including the costs of two counsel.

3. In respect of its application for condonation and reinstatement, the appellant is ordered to pay the respondent’s costs on the unopposed scale.

4. In respect of its urgent application for a stay of execution, he appellant' ordered to pay the respondent’s costs on the

unopposed scale.

B.R. du Plessis

Judge of the High Court

I agree

W.J. Hartzenberg

A. P. Ledwaba

ANNEXURE

ON PDF

On behalf of Appellant: De swardt Vogel Mahlafonya

941 Duncan Street

Cnr Duncan and Mackenzie Street

Brooklyn, Pretoria

0001

Adv: J.W. Louw(SC)

Adv: J.A. Motepe

On behalf of Respondents: Vannucci Attorneys

Cnr Griesel & Breytenbach Attorneys

761 Park Street

Clydesdale

Pretoria

Adv: J.G. Cilliers (SC)

Adv: J.P. Nel

1 A copy of annexure “A” to the contract is annexed to this judgment.