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South Africa Judgment

Supreme Court of Appeal

Mokwana v Pieterse Home Builders (Eiendoms) Bpk. (603/90) [1992] ZASCA 145 (15 September 1992)

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01

Holding and result

The court held that the respondent failed to allege facts in its summons that would entitle it to a payment certificate under clause 14.1 of the contract. The appellant was not obliged to make the initial funds available or to authorise their release, as those rights had already been ceded to the respondent. The contractual mechanism for payment certificates only applied to funds held by the attorneys after the initial amount was exhausted, and required written authorisation from both parties. The respondent did not allege that the appellant refused or failed to authorise the release of such funds, nor that the preconditions for invoking clause 14.1 were met. Consequently, the respondent did not establish a valid cause of action for summary judgment, and the appeal succeeded.

Court disposition

Appeal upheld with costs; summary judgment set aside.

Orders

  • The appeal succeeds with costs.
  • Paragraph 1 of the order of the court a quo is amended to read: 'The application for summary judgment is dismissed with costs.'
  • The respondent is ordered to pay the costs of the application for leave to appeal to this court and the costs of the application for leave to appeal directed to the court a quo.

02

Material facts

Parties

J Mokwana

Appellant

Pieterse Home Builders (Eiendoms) Beperk

Respondent

Amounts and remedies

  • Claimed Amount: ZAR 65,739
  • Contract Sum: ZAR 248,000
  • Initial Payment (clause 10.1): ZAR 115,000
  • Second Mortgage Bond Proceeds (clause 10.2): ZAR 56,200
  • First Mortgage Bond Proceeds (clause 10.3): ZAR 20,000

03

Procedural history

  1. Posture

    Civil Appeal / Appeal From Summary Judgment in Magistrate's Court, With Leave Granted After Petition

04

Questions and positions

Legal issues

Party arguments

Applicant
The appellant argued that he was not obliged under the contract to make the funds available or to authorise their release, as the right to the initial amount had already been ceded to the respondent. He contended that the respondent failed to allege facts entitling it to a payment certificate and that summary judgment should not have been granted.
Respondent
The respondent maintained that the contract required the appellant to keep certain funds available and that his failure to do so constituted breach, entitling the respondent to request a payment certificate under clause 14.1. The respondent argued that this certificate justified summary judgment for the claimed amount.

05

Court’s reasoning

  1. 01

    Rule 32 of the Magistrates' Courts Rules

    A party seeking summary judgment must allege and prove a valid cause of action in its summons.

  2. 02

    Clause 14.1 of the contract

    A payment certificate under a contract is only available where the contractual preconditions for its issuance are met.

  3. 03

    General principles of cession

    Cession of rights under a contract removes the cedent's authority over the ceded funds.

06

Ratio, limits and disposition

Ratio decidendi

The court held that the respondent failed to allege facts in its summons that would entitle it to a payment certificate under clause 14.1 of the contract. The appellant was not obliged to make the initial funds available or to authorise their release, as those rights had already been ceded to the respondent. The contractual mechanism for payment certificates only applied to funds held by the attorneys after the initial amount was exhausted, and required written authorisation from both parties. The respondent did not allege that the appellant refused or failed to authorise the release of such funds, nor that the preconditions for invoking clause 14.1 were met. Consequently, the respondent did not establish a valid cause of action for summary judgment, and the appeal succeeded.

Obiter and limits

  • The court noted that the respondent's formulation of its claim was based on a misunderstanding of the contract's provisions regarding payment and authorisation.
  • It was unnecessary to consider whether the appellant's defence in the answering affidavit constituted a valid defence, given the respondent's failure to establish a cause of action.

Court disposition

Appeal upheld with costs; summary judgment set aside.

  • The appeal succeeds with costs.
  • Paragraph 1 of the order of the court a quo is amended to read: 'The application for summary judgment is dismissed with costs.'
  • The respondent is ordered to pay the costs of the application for leave to appeal to this court and the costs of the application for leave to appeal directed to the court a quo.

Source and reliance status

Supreme Court of Appeal

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Judgment reading view

Judgment text

The complete available source text.

Source document

Supreme Court of Appeal

Judgment

[1992] ZASCA 145

SAAKNOMMER: 603/90

J MOKWANA AppellantenPIETERSE HOME BUILDERS (EDMS) BPK Respondent

HARMS, WnAR :

IN DIE HOOGGEREGSHOF VAN SUID-AFRIKA (APPéLAFDELING)

In die saak tussen:

J MOKWANA AppellantenPIETERSE HOME BUILDERS (EIENDOMS) BEPERK Respondent

CORAM: HOEXTER, HEFER, NIENABER, VAN DEN

HEEVER, ARR et HARMS, WnAR

VERHOORDATUM: 1 SEPTEMBER 1992

LEWERINGSDATUM: 15 SEPTEMBER 1992

UITSPRAAK

HARMS, WnAR:

Die appellant, as bouheer, het 'n boukontrak met die respondent op 12 Augustus 1988 gesluit. Die

2kontrak het op sonderlinge wyse voorsiening vir die uitreiking van betalingsertifikate gemaak. Die respondent, gewapen met so 'n sertifikaat, het aksie vir betaling van R65 739,00, rente en koste teen die appellant in die landdroshof vir die distrik Kemptonpark ingestel. Summiere vonnis is aangevra en toegestaan. Die appellant se daaropvolgende appél na die Transvaalse Provinsiale Afdeling (coram McCreath en Roos RR) het misluk. Die hof a cruo het 'n aansoek om verlof om te appelleer van die hand gewys maar verlof is na aanleiding van 'n petisie gerig aan die Hoofregter, toegestaan.In die landdroshof, die hof a quo asook die advokate se betoogpunte voor hierdie hof was die fokus uitsluitlik op die appellant se beantwoordende beëdigde verklaring gerig; die kernvraag wat daaruit blyk, is of die exceptio non adimpleti contractus vir 'n verweerder beskikbaar is indien hy met 'n

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betalingsertifikaat gekonfronteer word. Geen aandag isaán die primêre vraag, naamlik of die eiser in sydagvaarding 'n skuldoorsaak uiteengesit het, gegee nie.

Die boukontrak is nie in standaardvorm gegiet

nie. Van huidige belang is veral die bepaling ten

aansien van die kontraksom en die wyse vanbetaling. Aangesien dit nie prakties moontlik is om dierelevante klousule sinvol op te som nie, word ditvolledig aangehaal:

"10.

PURCHASE PRICE AND

PAYMENT

The purchase price payable by the EMPLOYER to the CONTRACTOR is the sum of R248 000,00 (TWO HUNDRED AND FORTY EIGHT THOUSAND RAND) payable as follows:- 10.1 the sum of R115 000,00 (ONE HUNDRED AND FIFTEEN THOUSAND RAND) shall be paid by the SOCIETY [synde 'n bougenootskap] to the CONTRACTOR by way of progress draws at the discretion of the SOCIETY in consideration for which the EMPLOYER hereby cedes, assigns and transfers to the- CONTRACTOR all right, title and interest in and to the funds available for that purpose and undertakes to sign all such documents, including blank draw

4 authority forms, as may be necessary to give effect to the provisions hereof; 10.2 upon registration of a Second Mortgage Bond in favour of the SOCIETY by the EMPLOYER over Stand 885 Mashemong Section, Tembisa, the proceeds of such loan, amounting to R56 200 (FIFTY SIX THOUSAND TWO HUNDRED RAND) shall be deposited with Attorneys Hammond, Pole and Dixon of Boksburg who are hereby authorised to transfer such funds to an interest bearing special savings account with the South African Permanent Building Society, which funds shall, with the written consent of both parties, be applied from time to time to pay contractors in accordance with progress in constructing the WORKS after the funds referred to in 10.1 have been exhausted. 10.3 Upon registration of a First Mortgage Bond in favour of the SOCIETY by the EMPLOYER over stand 453 Tsepo Section, Tembisa, the proceeds of such loan amounting to R20 000,00 (TWENTY THOUSAND RAND), be applied in the same manner as is provided for in paragraph 10.2. 10.4 The EMPLOYER undertakes to take all steps reasonably possible to procure the registration of the aforementioned Mortgage Bonds so as to expedite the commencement of the WORKS and to provide the funds necessary for the discharge of the EMPLOYER'S obligations to the

5 CONTRACTOR in terms of this contract. 10.5 The balance of the purchase price will be provided by the EMPLOYER from, inter alia, Key Money received by the EMPLOYER in consideration for the leasing of those portions of the WORKS to be utilised as an Ice Cream Parlour, a Games Room and a Supermarket as depicted on the PLANS AND SPECIFICATIONS. Such funds will, together with any shortfall necessary, be paid to Attorneys Hammond, Pole and Dixon of Boksburg by not later than the date upon which the leased premises are respectively occupied but in any event by not later than the date upon which such funds are required to discharge the EMPLOYER'S obligations to the CONTRACTOR as evidenced by progress in the WORKS and such funds will be applied in the manner provided for in 10.2 and 10.3."

Hieruit blyk die volgende:

(a) Daar het geen verpligting op die appellant gerus om die R115 000 waarna in klousule 10.1 verwys is, te betaal nie. Die geld was al (soos blyk uit klousule 2.2) beskikbaar aangesien die nodige eerste verband ten tye van kontraksluiting reeds geregistreer was.

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Die aanspraak op daardie geld is reeds met die sluit van die boukontrak aan die respondent gesedeer. Die appellant het gevolglik sy beskikkingsbevoegd-heid oor daardie bedrag verloor. Die verpligting het op die respondent gerus om betaling van daardie bedrag van die bouvereniging op te eis.

(b) Die bedrae vermeld in klousules 10.2 en 10.3 moes by die gemelde prokureursfirma inbetaal word. Die kontrakspartye het 'n gesamentlike beskikkingsbe- voegdheid oor hierdie fondse besit. Dit kon egter eers aangewend word nadat die bedrag in klousule 10.1 genoem, uitgeput was. Beide partye moes skriftelik toestem tot enige trekking uit hierdie fondse. (c) Geen voorsiening is vir trekkings op bepaalde tydstippe of nadat 'n bepaalde hoeveelheid werk verrig is, gemaak nie. Dit beteken dat vorderings- 7 betalings 'n kwessie vir ad hoc beskikking was.

Dit bring my dan by klousule 14.1 wat die

enigste klousule is wat betrekking het op die uitreikingvan sg betaling- of vorderingsertifikate. Klousule 14

is 'n klousule wat, kragtens die opskrif en die inhoud,met kontrakbreuk handel en klousule 14.1 lui dan soosvolg:

"14.1 In the event of the EMPLOYER failing or refusing to authorise the release of funds held in the manner contemplated in Clause 10, the CONTRACTOR shall be entitled to call in the services of an Architect or Quantity Surveyor or a Building Inspector with not less than seven years experience to examine the WORKS and to certify that the CONTRACTOR is entitled to such funds for which he has applied or any lesser portion."

Klousule 14.3 sit die remedies ter beskikking van diepartye uiteen sou enige ander vorm van kontrakbreuk wat

nie in klousule 14.1 genoem is nie, plaasvind.

Alvorens 'n sertifikaat ooreenkomstig klousule

814.1 aangevra kan word, moes die essensiële jurisdiksionele feit van 'n weiering of nalate deur die bouheer "to authorise the release of funds" teenwoordig wees. Hoewel daar 'n terugverwysing na klousule 10 in die algemeen is, kan klousule 10.1 (wat op die eerste R115 000 betrekking het) nie ter sake wees nie aangesien die bouheer juis kragtens die bepalings van die kontrak self nie die bevoegdheid gehad het, vanweë die sessie, om die vrystelling van die daarin vermelde fondse te magtig nie. Dit beteken dat klousule 14.1 slegs van toepassing is ten aansien van fondse wat ingevolge klousules 10.2, 10.3 of 10.5 deur die prokureurs gehou moes word. Aangesien beide partye 'n betaling uit daardie fondse skriftelik moes magtig, het klousule 14.1 voorsiening daarvoor gemaak dat indien die bouheer sou weier of versuim om die nodige magtiging te verskaf, 'n sertifikaat verkry kon word. Maar, soos aangetoon, die verpligting om fondse wat aldus gehou is vry te stel, kon9eers ontstaan "after the funds referred to in 10.1 have been exhausted".Teen hierdie agtergrond wend ek my na die respondent se uiteensetting van eis. Dit gaan van die veronderstelling uit dat die kontrak sou bepaal dat "the Defendant would hold available an amount of R115 000,00 at a bank or building society" en dat "the Defendant would hold R56 200,00 available with attorneys Hammond Pole & Dixon". Die kontrakbreuk waarop die respondent dan staatgemaak het, was 'n versuim van die appellant om die gemelde bedrae beskikbaar te hou ("keep available"). Daardie versuim, volgens die respondent, het hom geregtig gemaak om 'n sertifikaat ingevolge klousule 14.1 aan te vra.

Ek is van oordeel dat die respondent gedwaal het in die formulering van sy eis. Ten eerste het daar geen verpligting op die appellant gerus om die bedrag van R115 000,00 beskikbaar te hou nie. Soos reeds gesê, is

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die aanspraak op daardie geld reeds aan die respondent by sluiting van die kontrak gesedeer. Ook kon die appellant nie die vrylating van daardie geld magtig nie. Ten tweede, die geld na verwys in klousules 10.2 en 10.3 moes by die prokureurs inbetaal word. Die verbande in daardie klousules gemeld, is volgens die eisuiteensetting wel geregistreer en die kontrak het ieder geval bepaal dat die respondent se verpligting om die werk te verrig eers sou ontstaan nadat hierdie verbande vir registrasie ingedien is. As die bewering in die dagvaarding sou impliseer dat die appellant versuim het om die opbrengs van die verbande by die prokureur in te betaal, sou dit die respondent in ieder geval nie geregtig gemaak het op 'n aanwending van die bepalings van klousule 14.1 nie. Dit sou 'n ander tipe kontrakbreuk daargestel het wat aan die respondent 'n reg tot kansellasie in terme van klousule 14.3 sou verleen het. Aangesien die geld na verwys in klousule 10.1 volgens die dagvaarding nog nie11

uitgeput was nie, het daar nie 'n verpligting op die appellant gerus om sy skriftelike toestemming tot die aanwending van die ander fondse te verleen nie. Maar, en in ieder geval, dit word hom nêrens ten laste gelê dat hy geweier of versuim het om die vrylating van daardie fondse te magtig nie.

Dit volg uit voorgaande dat ek van oordeel is dat die respondent nie die nodige bewerings gemaak het waaruit afgelei kan word dat hy geregtig was om 'n sertifikaat ter betaling te bekom nie. Dit beteken dat die respondent geen skuldoorsaak uitgemaak het nie en summiere vonnis kon dus nie toegestaan gewees het nie. In die lig van hierdie gevolgtrekking is dit nie nodig om oorweging te skenk aan die vraag of die verweer wat in die beantwoordende verklaring uiteengesit is, 'n regsgeldige verweer was nie.

Die volgende bevel word gevolglik gemaak: (a) Die appél slaag met koste.

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(b) Paragraaf 1 van die bevel van die hof a quo word gewysig om te lees:

"Die appél slaag met koste en die bevel van die landdros word gewysig om te lees 'Aansoek om summiere vonnis word van die hand gewys met koste.'".

(c) Die koste van die aansoek om verlof tot appél aan hierdie hof en die koste van die aansoek om verlof tot appél gerig aan die hof a quo word deur die respondent betaal.

L T C HARMS WnAR

HOEXTER, AR )HEFER, AR ) STEM SAAMNIENABER, AR )VAN DEN HEEVER, AR )

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Rule 32 of the Magistrates' Courts Rules

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