Melmoth Town Board v Marius Mostert (Pty) Ltd. (375/1982) [1984] ZASCA 71; [1984] 2 All SA 412 (A) ; 1984 (3) SA 718 (A) (30 May 1984)

Melmoth Town Board v Marius Mostert (Pty) Ltd. (375/1982) [1984] ZASCA 71; [1984] 2 All SA 412 (A) ; 1984 (3) SA 718 (A) (30 May 1984)

The Supreme Court of Appeal held that clause 54 of the contract was intended to empower the engineer to adjust the contract price either upwards or downwards when the net effect of all variations exceeded 15% of the tender price, having regard to all material and relevant factors. However, the engineer in this case, while purporting to apply clause 54, in fact sought to invoke the powers conferred by clause 52(2), by adjusting the rates for specific items based on the effect of a particular variation order, rather than considering the overall effect of all variations. Clause 54 requires consideration of the overall increase or decrease, not the effect of individual variations on specific...

Citation
[1984] ZASCA 71
Parties
Appellant: Melmoth Town Board; Respondent: Marius Mostert (Pty) Ltd.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 May 1984
Case Number
375/1982
Procedural Posture
Civil Appeal / Appeal From Durban and Coast Local Division; Judgment on Special Case Stated Under Rule 33
Outcome
Appeal dismissed with costs; judgment for the respondent; final certificate set aside.
Judges
Jansen, Miller, Viljoen, Van Heerden, Galgut
Legal Topics
Construction Contracts, Variation Orders, Contractual Interpretation, Engineer Certification, Quantum Meruit
Commercial and Corporate Civil Procedure Construction Contracts Variation Orders Contractual Interpretation Engineer Certification Quantum Meruit

Case Brief

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Parties

Melmoth Town Board

Appellant

Marius Mostert (Pty) Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From Durban and Coast Local Division; Judgment on Special Case Stated Under Rule 33

Legal Issues

  1. 1 Was the engineer entitled, in terms of clause 54 of the contract, to adjust the contract price in the manner and on the basis reflected in the final certificate read with the appendix to Variation Order No 8?.

Ratio Decidendi

The Supreme Court of Appeal held that clause 54 of the contract was intended to empower the engineer to adjust the contract price either upwards or downwards when the net effect of all variations exceeded 15% of the tender price, having regard to all material and relevant factors. However, the engineer in this case, while purporting to apply clause 54, in fact sought to invoke the powers conferred by clause 52(2), by adjusting the rates for specific items based on the effect of a particular variation order, rather than considering the overall effect of all variations. Clause 54 requires consideration of the overall increase or decrease, not the effect of individual variations on specific...

Court Disposition

Appeal dismissed with costs; judgment for the respondent; final certificate set aside.

Orders

  • The appeal is dismissed with costs.
  • The judgment of the court a quo setting aside the final certificate is confirmed.