Rumdel Cape EXR Holdings Mazcon Joint Venture v South African National Roads Agency Soc Ltd (7312/2014) [2014] ZAKZDHC 40 (25 September 2014)

Rumdel Cape EXR Holdings Mazcon Joint Venture v South African National Roads Agency Soc Ltd (7312/2014) [2014] ZAKZDHC 40 (25 September 2014)

The court found that the contract placed the primary responsibility for site security and risk management on the applicant, including the obligation to insure against risks such as riot and disorder. The applicant failed to demonstrate that the violent events were unforeseeable or beyond its control, as industrial unrest was foreseeable and insurable. The disorder was found to be attributable, at least in part, to former employees of the applicant, and the applicant did not establish that the events constituted force majeure under the contract. The necessity for increased security did not render performance impossible or unlawful, nor did it shift the financial burden to the respondent....

Citation
[2014] ZAKZDHC 40
Parties
Applicant: Rumdel Cape/EXR Holdings/Mazcon Joint Venture; Respondent: South African National Roads Agency Soc Ltd
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
25 September 2014
Case Number
7312/2014
Procedural Posture
Urgent Application / First Instance Judgment
Outcome
Application dismissed with costs, including costs of senior counsel.
Judges
Lopes
Legal Topics
Force Majeure, Impossibility of Performance, Contractual Risk Allocation, Site Security, Construction Contracts
Commercial and Corporate Civil Procedure Force Majeure Impossibility of Performance Contractual Risk Allocation Site Security Construction Contracts

Case Brief

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Parties

Rumdel Cape/EXR Holdings/Mazcon Joint Venture

Applicant

South African National Roads Agency Soc Ltd

Respondent

Procedural Posture

Urgent Application / First Instance Judgment

Legal Issues

  1. 1 Whether the applicant is entitled to recover additional security costs from the respondent under the contract.
  2. 2 Whether the violent events constitute force majeure as contemplated in Clause 19.1 of the contract.
  3. 3 Whether the applicant is entitled to be released from further performance under Clause 19.7 due to impossibility or unlawfulness of performance.

Ratio Decidendi

The court found that the contract placed the primary responsibility for site security and risk management on the applicant, including the obligation to insure against risks such as riot and disorder. The applicant failed to demonstrate that the violent events were unforeseeable or beyond its control, as industrial unrest was foreseeable and insurable. The disorder was found to be attributable, at least in part, to former employees of the applicant, and the applicant did not establish that the events constituted force majeure under the contract. The necessity for increased security did not render performance impossible or unlawful, nor did it shift the financial burden to the respondent....

Court Disposition

Application dismissed with costs, including costs of senior counsel.

Orders

  • The application is dismissed with costs, such costs to include those consequent upon the employment of senior counsel.