Rutherford Enza Civils (Pty) Ltd and Others v Bokpoort EPC Consortium (Pty) Ltd (2015/30655) [2016] ZAGPJHC 264 (6 September 2016)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 2015/30655

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: YES

6/9/2016

In the Matter between:

RUTHERFORD ENZA CIVILS (PTY) LTD

(IN LIQUIDATION) First Plaintiff

CHAVONNES BADENHORST ST CLAIR COOPER N.O. Second Plaintiff

LEBOGANG MICHAEL MOLOTO N.O. Third Plaintiff

EZEKIEL PHETOLA MAENETJA N.O. Fourth Plaintiff

and

BOKPOORT EPC CONSORTIUM (PTY) LTD Defendant

JUDGMENT

Headnote

Provisional sentence – Rule 8(3) – dispute about whether the ‘full’ contract had been attached to summons – plaintiff disputing that appendices to a construction subcontract were part of the contract – defendant asserting the appendices were part of the agreement and that in one appendix the parties had bound themselves to arbitrate their disputes

Probabilities favouring the inclusion of the appendices, although not wholly free from doubt- in such circumstances provisional sentence to be refused.

Costs of matter made costs in the cause of an action to be instituted by the plaintiff.

Sutherland J:

Introduction

[1] The first plaintiff, Rutherford Enza Civils (Pty) Ltd was placed into liquidation and the remaining plaintiffs are its liquidators. (They are called collectively ‘Rutherford’ in this judgment). In that role, they have sued the defendant, Bokpoort EPC Consortium (Pty) Ltd for money they claim is owing to Rutherford. The plaintiffs issued a provisional sentence summons which relies on certain certificates to evidence the sums owed.

[2] The parties filed the usual answering and replying affidavits and thereafter each filed further affidavits. The propriety of the defendant filing a further affidavit was contested, but ultimately I was invited to allow it at my discretion but if I concluded it was an abuse, as contended on behalf of the plaintiff, I should mark my disapproval by a costs penalty. I allowed all the affidavits to be addressed. In the result, nothing turns on the additional affidavit nor the further answer. No special costs order shall be made.

[3] The Defendant was a contractor who undertook a construction project and contracted with Rutherford to perform the earth works part of the project. When Rutherford was liquidated the usual pursuit of its debts was undertaken, of which this action is one such step. The sum of R541,244.37 is claimed, a figure computed by reference to several certificates. Liability is denied and, indeed, it is alleged that Rutherford is indebted to the defendant, a claim which is said shall found a counter-claim.

[4] Several defences have been raised. Not all warrant attention. The matter turns on a single key issue.

What is the contract between the parties?

[5] The locus of the principal controversy is the identification of the terms of the contract between the two parties. The importance of this issue is that, on the defendant’s case, Rutherford has failed to comply with rule 8(3) and annex ‘copies of all documents upon which the claim is founded’, which, if correct, would defeat the provisional sentence claim.[1] Closely related to that argument is the fact that if the text of what the defendant contends has been the omitted, had been annexed, what would have been revealed is a clause binding the parties to refer this dispute to arbitration, thereby ousting the court’s

jurisdiction. Rutherford counters that contention by denying that the omitted text is part of the contract, but even if the ‘omitted’

text could be taken into account, the portions invoked by the defendant do not apply to their relationship, but to other actors in the construction project.

[6] Attached to the summons is a written contract, in the form of a ‘purchase order’. It is titled ‘Bokpoort EPC

consortium (Pty) Ltd – construction subcontract’, ie, the defendant. Rutherford is the designated subcontractor.

[7] The document is paginated and is stated to be 34 pages long. What is annexed goes up to page 27. No pages are numbered 28-34; ie,7 pages. However, 7 annexures are attached, appendices I – VII. These annexures are all single sheets and appear to be the front pages of longer documents. On their own these ‘front pages’ are meaningless. For example, appendix I is titled ‘technical documentation’ and lists various documents, and appendix III is titled ‘Bokpoort terms and conditions for site works’ gives a reference, and says no more. The same picture is presented in every other instance. Critical to the controversy in this case is appendix II. It is titled ‘Bokpoort general purchasing conditions – Bok –UTE-GPC -0001 Rev 2’. The defendant contends that the arbitration clause is in this appendix, as indeed it is in clause 36.

[8] From this point onwards two controversies are ventilated.

Are the appendices part of the contract?

[9] The front pages have been signed by representatives of both parties. The originals of the appendices are nowhere to be found, although an e-version existed which was disclosed in earlier insolvency proceedings. Rutherford’s contention is that no representative

of it signed them. The defendant has not put forward any allegations of fact to contradict that stance. Rather, it contends that the ‘contract’ cannot be comprehended as excluding these appendices. In essence, the implication is that by signing the ‘front pages’ of the appendices the whole set of appendices were incorporated by reference. On that thesis, the appendices are part of the contract and the defendant can invoke the arbitration clause in appendix II.

[10] To an important extent, the critical facts are common cause and there is little room for a dispute of fact. It seems plain to me that a construction project of this nature could not, on common sense principles, have been captured in the 27 pages referred to and the balance of a standard regulatory system be left to chance and goodwill. A reading of the 27 pages reveals a plethora of references to ancillary documentation. Clause 3 expressly alludes to the appendices, ie: ‘Only the contractual documents and appendices listed hereto shall together constitute the purchase order between EPC Consortium and the Subcontractor’.

[11] If there is any measure of doubt about the scope of the contract in these circumstances, there is a real risk that rule 8(3) has not been fully complied with. In my view the probabilities favour the inclusions of the appendices. However, such a conclusion could be disturbed by evidence at trial. For the purposes of provisional sentence my finding is therefore limited to a finding that it has not been proven that the full contract has been attached, and the judgment should not be understood to mean that the issue of the full extent of the contract has been finally decided.

Contents of the Appendix: does it apply to Rutherford?

[12] Rutherford contends that the appendix does not apply to the relationship between them. The provisions are a veritable

fiesta of obscurity and tortuousness.

[13] Clause 36 is headed ‘applicable legislation-litigation’. It states that contracts with the defendant shall be governed by South African law whilst contract with Solafrica JV UTE shall be governed by Spanish law.

[14] In subclause 1 it is stated’ …this document is to define the terms, conditions and obligations deriving from the contracts, including subcontracts for all types of services relating to the projects execute by the UTE Bokpoort solar of companies’

(sic)…’

[15] In subclause 2.1 the defendant is defined as the ‘SPV’ (ie special purpose vehicle). Also the defendant is included in a further definition, ie: ‘UTE Bokpoort Solar: UTE and/or the SPV as the case may be.’ This flurry of

circumlocution ties the defendant into the identity of UTE Bokpoort Solar.

[16] ‘Subcontractors’ are defined as ‘the suppliers contracted by the contractor or supplier to carry out part of the works’. This in turn needs to read with the contract between the parties in this litigation. Rutherford is such a subcontractor.

[17] Convoluted as they may be, it seems to me that these provisions indeed do apply to the parties in this action.

[18] The defendant upon that premises is correct to assert that it may invoke the arbitration clause. In concluding this, I am not to be understood to dispose of the issue that, in this given instance, the defendant is entitled to have the matter heard in an arbitration, an issue which at trial may yet be addressed

Conclusion

[19] In the result, to summarise, I find that the dispute over the scope of the contract means that I cannot find that rule 8(3) has been fulfilled, and further, the controversial omitted text indeed privileges arbitration as the process to dispose of the parties disputes.

[20] As to costs, it seems to me appropriate that they be costs in the action Rutherford may institute.

[21] The application for provisional sentence must therefore fail.

The Order

[22] Provisional sentence is refused.

[23] The costs occasioned by the provisional sentence proceedings shall be costs in the action to be instituted by the plaintiffs against the defendant, such action to be commenced within 90 days of date of this judgment.

________________________

Roland Sutherland

Judge of the High Court,

Gauteng Local Division, Johannesburg.

Hearing: 23 August 2016

Judgment: 6 September 2016

For Plaintiff:

Adv P Rossouw SC, with him Adv J Heher

Instructed by Rossouws Attorneys

For Defendant:

Adv G Girdwood,

Instructed by Edward Nathan Sonnenbergs Inc

[1] Rule 8 provides: ‘Copies of all documents upon which the claim is founded shall be annexed to the summons and served with it.’