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[2015] ZAECGHC 35
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Equicent Eastern Cape Developments (Pty) Ltd v University of Fort Hare and Others, In Re: African Student Accommodation Group (Pty) Ltd and Others v Equicent Eastern Cape Developments (Pty) Ltd and Others (4065/2014) [2015] ZAECGHC 35 (12 March 2015)
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IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, GRAHAMSTOWN
CASE NO: 4065/2014
DATE HEARD: 02/03/2015
DATE DELIVERED: 12/03/2015
In the matter between
EQUICENT EASTERN CAPE DEVELOPMENTS
(PTY) LTD..........................................................................................................................APPLICANT
and
THE UNIVERSITY OF FORT HARE.................................................................1ST RESPONDENT
COUNCIL OF THE UNIVERSITY OF FORT HARE......................................2ND RESPONDENT
AFRICAN STUDENT ACCOMMODATION GROUP
(PTY) LTD..............................................................................................................3RD RESPONDENT
ISONDLO INVESTMENTS (PTY) LTD.............................................................4TH RESPONDENT
JOHN CHRISTOPHER SCHOOLING..............................................................5TH RESPONDENT
And in the conditional counter-application between:
AFRICAN STUDENT ACCOMMODATION GROUP
(PTY) LTD...................................................................................................................1ST APPLICANT
ISONDLO INVESTMENTS (PTY) LTD.................................................................2ND APPLICANT
JOHN CHRISTOPHER SCHOOLING...................................................................3RD APPLICANT
and
EQUICENT EASTERN CAPE DEVELOPMENTS
(PTY) LTD...............................................................................................................1ST RESPONDENT
THE UNIVERSITY OF FORT HARE.................................................................2ND RESPONDENT
COUNCIL OF THE UNIVERSITY OF FORT HARE......................................3RD RESPONDENT
JUDGMENT
ROBERSON J:-
[1] This application concerns the interpretation of a court order, and related matters. The dispute about the order’s interpretation lies between the applicant (Equicent) and the third, fourth and fifth respondents (collectively referred to as the respondents). The first and second respondents did not oppose the application.
[2] The order determined the dispute between the applicants and the first to fourth respondents in an application to review and set aside the award of a tender by the first and second respondents (the University) to the third and fourth respondents, a joint venture (the JV). The fifth respondent (Schooling) is the managing director of the fourth respondent. He was not a party in the review application.
[3] The order was made by Brooks AJ on 5 December 2014. The order was made by agreement between the parties and there was accordingly no judgment preceding the order. The order was in the following terms:
1.“THAT the 3rd and 4th Respondent (“the JV”) shall complete phase 1 of the tender (REF UFH-SCM 05/2013) (“the Tender”), as defined in paragraph 4.8.1 (a) of the request for proposals (“the RFP”) awarded to them by the First and Second Respondents (“UFH”) on 4th April 2014, to be performed in accordance with the terms of the building contract which was subsequently concluded, but the Tender award of 4th April 2014, and subsequent contract in respect of phases 2,3 and 4 be and are hereby set aside.
2. THAT the bids submitted to UFH pursuant to the RFP shall be adjudicated de novo, and the Tender may be awarded by a panel of 3 independent consultants (“the Panel”), each of whom shall have experience of at least ten years in the adjudication of construction-related tenders, and who shall not be employees of or have an interest in any of the parties to these proceedings or their subcontractors, or any persons related to such entities, and shall have had no involvement to date hereof with the Tender or any legal proceedings related thereto. The re-adjudication and possible re-award of the Tender shall be conducted as if phase 1 has not been commenced or completed.
3. THAT the Panel shall be appointed by agreement in writing between the Applicant and Respondents. If the parties cannot agree on one or more of the members of the Panel by 15th December 2014, then such member(s) shall be appointed by the President of Consulting Engineers South Africa, failing which the Chief Executive Officer of the Construction Industry Development Board, failing which, the Dean of the Faculty of Engineering and the Built Environment at the University of the Witwatersrand.
4. THAT for the purposes of its adjudication, the Panel:
4.1 Shall be furnished with:
4.1.1 The UFH’s supply chain management policy;
4.1.2 The complete RFP and such supplementary information and addenda as were issued by the UFH to the bidders prior to the closing date for the submission of the bids;
4.1.3 The minutes of the compulsory bid clarification meeting;
4.1.4 The Applicant’s bid;
4.1.5 The JV’s bid;
4.1.6 The UFH’s budget;
4.1.7 Such other documents, information or clarification as the Panel may require the Applicant, the JV or UFH to furnish;
4.2 Shall, before making its determination, afford each of the JV and the Applicant and by a date to be determined by the Panel, an opportunity to submit written representations to the Panel, which shall not exceed ten pages;
4.3 May, in its discretion, before making its determination, require the Applicant and the JV to appear before it to make representations on any issue which the Panel deems necessary.
5. THAT the documents referred to in paragraph 4.1.1.1 to 4.1.6 above shall be furnished to the Panel by UFH, which shall simultaneously deliver paginated copies to the Applicant and the JV. In the event of any dispute as to whether a document has been wrongly included or excluded, any party may notify the Panel and the other parties, and the Panel shall determine the dispute forthwith.
6. THAT the Panel may, if it deems desirable to do so, obtain independent legal advice.
7. THAT save as herein provided, the Panel shall be entitled to determine its own procedures and modus operandi, provided that the Panel shall adjudicate the Tender as expeditiously as possible.
8. THAT after its adjudication, which shall be final and binding, the Panel may:
8.1 appoint the successful tenderer;
8.2 make an award subject to the condition that the price of the successful tender is negotiated down, regard being had to the UFH’s budget (as provided in paragraph 4.1.6 above) and such reduction in corporate social investment and local procurement as UFH may agree with the successful tenderer;
8.3 make no award of the Tender.
9. THAT in the event that the Applicant is determined to be the successful tenderer, it shall negotiate with the UFH to effect such adjustments to its tender as are required as a result of the completion of phase 1.
10.THAT if a successful tenderer is appointed, the unsuccessful tenderer shall pay the costs of the Panel. If no award is made, UFH shall pay these costs. The costs of the Panel and the adjudication shall be borne pro tem by the UFH.
11.THAT the parties in case number 4065/2014 shall bear their own costs.
[4] For the purposes of this judgment I need to refer to portions of certain documents referred to by the parties in this application.
[5] The request for proposals (the RFP) issued by the University on 3 June 2013 was for “Provision of students accommodation (2046) beds in Fort Hare Alice Campus situated in Alice, Eastern Cape.” According to the RFP the proposed student residence village would comprise, inter alia, 17 free standing buildings. Paragraph 4.8 of the RFP, headed “Construction Roll Out” stated as follows:
“4.8.1 The following construction roll out is required:
a) Buildings 1 and 2 should commence on 1 July 2013 and be completed on 1 January 2014.
b) Buildings 3 to 7 should commence on 1 January 2014 and be completed on 30 June 2014.
c) Buildings 8 to 12 should commence on 1 July 2014 and be completed on 1 January 2015.
d) Buildings 13 to 17 should commence on 1 January 2015 and be completed on 30 June 2015.”
[6] The minutes of a briefing session held on 14 June 2013 reflected that the University had secured funding for “the first 250 beds”.
[7] On 20 August 2013 the University issued a document headed “Supplementary information no. 3: Request for proposals from all interested and suitably qualified developers for the provision of student accommodation (2040 beds) in Alice main campus situated in the Eastern Cape.” The document contained responses to pending questions received from prospective developers. One of the answers to the question “Design in arriving to 2040/2046 beds” was:
“The university further wishes to remind the prospective developers, as clearly articulated during the compulsory briefing meeting, that the proposed development shall unfold in Phases, with Phase One comprised of 500 beds, and the subsequent following phases until completion. Prospective developers must propose, how best this phase-in approach will be effected.”
[8] In its resolution containing the approval of the award of the tender to the JV, the University stated:
“The project will be in two phases, with the first phase funded from the Infrastructure and Efficiency Grant for 500 beds, so that it can start immediately.
The second phase will start later as it will be funded through a loan which still needs to be negotiated.”
[9] The letter dated 8 April 2014 from the University to the JV informing the JV of the award of the tender stated that one of the conditions of the award was:
“That you provide the University with financial guarantees within 30 working days from the date of this award letter from a banking institution (as indicated in your proposal) confirming availability of funds to undertake the first phase (500 beds) of the project.”
[10] The University’s progress report dated 22 April 2014 to the Minister of Higher Education and Training (the Minister) stated:
“The University of Fort Hare has split this project into two phases with the first phase being the provision of 500 beds to be financed out of the R137 825 000.00 funded by the Department of Higher Education and Training and the University of Fort Hare. The second phase which is the provision of 1500/1506 beds is dependent on obtaining financial resources ……………….”
[11] The letter from the Minister to the Vice Chancellor of the University stated that approval had been given for the development of phase one of the student village at a cost of R137 825 000.00 and that the University was to submit a new request for Ministerial approval for phase two.
[12] The contract between the University and the JV (the JBCC agreement), under the heading “Payment guarantee amounts”, provided:
“SECTION 1: R106,254,374.00 (488 Beds & Civils)
SECTION 2: R85,113,477.00 (488 Beds)
SECTION 3: R63,835,108.00 (366 Beds)
SECTION 4: R63,835,108.00 (366 Beds)
SECTION 5: R58,951,548.00 (338 Beds)
SECTION 6: R12,422,019.00 (Student Centre)
[13] An invoice from the JV to the University dated 22 August 2014 reflected the following:
“Design, construction & delivery of 2,046-bed students residence at Alice Campus of UFH,Mthatha, as per Tender No UFH-SCM05/2013, calculated as follows:
Total project fee for 2,046 beds (incl VAT) R390,411,633-00
Total project fee for Phase 1 : 610 beds R127,532,743-50
(incl VAT)
Project fee now claimed:
Claim 1 per attached certificate: R8,439,813-51
VAT @ 14% R1,181,573-89
Total now due R9,621,387-40
[14] The present application was brought as an urgent one and sought the following relief:
“1. Enrolling this application as an urgent application and, insofar as may be necessary, dispensing with the forms and time periods prescribed by the Rules of this Honourable Court and directing that this application be heard as one of urgency under Rule 6(12);
2. Declaring that, in terms of paragraph 1 of the order of the above Honourable Court issued under case number 4065/2014, handed down by the Honourable Mr Acting Justice Brooks on Friday, 5 December 2014, a copy of which is annexed hereto marked “NOA1” (“the Brooks AJ order”), the respondents are not permitted to undertake or progress any construction of any building or structure work, or any earthworks or any other work in respect of or in connection with any buildings other than buildings 1 and 2 contemplated in paragraph 4.8.1(a) of the request for proposals in the tender (REF UFH-SCM -5/2013) (“the RFP”) (the prohibited work is defined as “the Unlawful Work”);
3. Declaring the third, fourth and fifth respondents to be in breach of paragraph 1 of the Brooks AJ order;
4. Declaring the third, fourth and fifth respondents to be in wilful contempt of paragraph 1 of the Brooks AJ order;
5. Order that the respondents are prevented and interdicted from, in any way, directly or indirectly, undertaking or progressing the Unlawful Work;
6. Authorising the Sheriff and Deputy Sheriff to take all steps necessary to enforce 5 above, including preventing the third, fourth and fifth respondents from accessing any site where the Unlawful Work is taking place or is sought to be undertaken or progressed by any person;
7. Ordering that:
7.1 the fifth respondent be committed to imprisonment for a period of 30 days, alternatively for such period as the Court deems appropriate;
7.2 the order in 7.1 above will only and immediately come into operation if any of the third, fourth or fifth respondents fail to comply with the order in 5 above;
7.3 a warrant of committal for the fifth respondent is to be issued by this Honourable Court, on the same papers, duly supplemented as necessary, if the third and fourth respondents do not comply with the order in 5 above;
8. Ordering the third to fifth respondents to deliver, within five days, to the applicant and to the Court a statement setting out in detail all the work (including the unlawful work) that has been done in respect of, or in the purported implementation of, the Tender from 5 December 2014 to the date of the statement, including the specific dates when any piece of the work in question was done; and all invoices delivered to the first respondent over that period.
9. Should the Court deem it necessary, order that the relief sought in paragraphs 5 and 6 be granted on an interim basis, as a rule nisi, pending a return date to be prescribed by the Court and the final determination of this application;
10. Ordering that such respondents as oppose this application, jointly and severally, the one paying the other to be absolved, pay the applicant’s costs of suit in this application on an attorney own client scale, including the costs of two counsel;”
[15] The respondents brought a conditional counter-application also on an urgent basis and claimed the following relief:
“1. Enrolling this conditional counter-application as an urgent application and, insofar as it may be necessary, dispensing the forms and time periods prescribed by the Rules of this Honourable Court and directing that this application be heard as one of urgency under Rule 6(12).
2. Declaring that, in terms of paragraph 1 of the order of the above Honourable Court issued under case number 4065/2014, handed down by the Honourable Mr Acting Justice Brooks on Friday, 5 December 2014, the First and Second Applicants (“the Applicants”) are permitted to complete phase 1 of the project pursuant to the award of tender (REF UFH-SCM -5/2013) on 4 April 2014 and the JBCC agreement entered into between itself and the University of Fort Hare (“UFH”), dated 3 June 2014, provided that phase 1 shall be limited to the construction of 610 beds, as well as the civil works (bulk infrastructure) for the entire project.
3. In the alternative to paragraph 2 above, varying the order of Brooks AJ, in terms of Uniform Rule 42(1)(b) to read as follows [underlined portion to be inserted]:
“The 3rd and 4th Respondents (“the JV”) shall complete phase 1 of the tender (REF UFH-SCM 05/2013) (“the Tender”), as defined in paragraph 4.8.1(a) of the request for proposals (“the RFP”) as amended by Supplementary Information No. 3, dated 20 August and the JBCC Agreement, dated 3 June 2014, awarded to them by the First and Second Respondents (“UFH”) on 4 April 2014, to be performed in accordance with the terms of the building contract which was subsequently concluded, but the Tender award of 4 April 2014 and subsequent contract in respect of phases 2,3 and 4 are set aside.”
4. That the First Respondent shall pay the costs of this application on the attorney-client scale, including the costs of two counsel, where employed.
[16] The events leading to this application were captured in correspondence between the parties, which is briefly summarised as follows: Equicent’s attorneys informed the University and the JV that Equicent had become aware that construction was proceeding on buildings 3 to 6 and foundations of other buildings.[1] They referred to the terms of the order and required that all construction on buildings other than buildings 1 and 2 cease. Unless confirmation was received that such construction had ceased, urgent proceedings were threatened.
[17] The University responded to the effect that it respected the order and was aware of disagreement regarding the interpretation of the order. It urged Equicent and the JV to resolve the dispute and instructed the JV to limit its construction to “the most conservative interpretation of the court order pending further clarification of the meaning of ‘phase 1’ by the court.” It was also stated that any construction undertaken contrary to the court order would be without the agreement of the University and should cease immediately.
[18] The respondents’ attorneys responded by stating that their client would not halt construction. According to them the RFP was a guideline document and deviations were permissible. Phase 1 as referred to in the RFP was not necessarily what the parties agreed would comprise phase 1. The JBCC agreement and further correspondence between the JV and the University indicated that phase 1 did not only cover buildings 1 and 2 but instead that phase 1 was completed once 610 beds were delivered. The JV was, so it was stated, consequently acting within the bounds of the court order.
[19] Further correspondence did not resolve the impasse. The application was served on the respondents on 9 February 2015, for hearing on 2 March 2015, with time limits imposed for exchange of papers.
[20] All the orders sought were resisted by the respondents, who also raised the issue of urgency, with which I shall deal briefly. It was submitted on behalf of Equicent that contempt matters are in their nature urgent and further that the conduct of the respondents in continuing the work would jeopardise the re-adjudication process. I agree with these submissions. With regard to the second, there was a large difference between the extent of the work to be performed in phase 1 as defined in the RFP and the extent of the work to be performed in phase 1 as contained in the JBCC agreement and the JV’s invoice. If the work continued unabated, the re-adjudication process as contemplated in paragraph 2 of the court order, which was linked to paragraph 1, could potentially have been adversely affected.
[21] It was submitted on behalf of the respondents that the urgency was self-created because Equicent knew as early as 5 December 2014 what the JV’s interpretation of the order was. Equicent’s employees were performing work at the University and would have passed the construction site on their way to their offices. As was pointed out in reply, the builders’ holidays intervened and the employees were not required to investigate what was going on at the construction site. Equicent’s project executive became aware in late January 2015 of the construction on buildings other than buildings 1 and 2 and Equicent’s attorneys’ first letter requesting the JV to cease work beyond buildings 1 and 2 was dated 27 January 2015. I am therefore satisfied that the requirements for urgency were met and that the urgency was not self-created.
Interpretation of the order
[22] A court order is interpreted according to the same principles governing interpretation of documents (Firestone South Africa (Pty) Ltd v Genticuro A.G. 1977 (4) 298 (A) at 304D-E; Van Rensburg and Another NNO v Naidoo and Others NNO 2011 (4) SA 149 (SCA) at para [42]). In Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at para [18] Wallis JA said:
“Over the last century there have been significant developments in the law relating to the interpretation of documents, both in this country and in others that follow similar rules to our own. It is unnecessary to add unduly to the burden of annotations by trawling through the case law on the construction of documents in order to trace those developments. The relevant authorities are collected and summarised in Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School. The present state of the law can be expressed as follows: Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The 'inevitable point of departure is the language of the provision itself', read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.”
[23] The order was made in the context of an application to review and set aside administrative action in terms of s 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). The lawfulness of the University’s decision was in dispute. The dispute was determined by an order made in terms of s 8 of PAJA which provides that a court may grant any order that is just and equitable and describes the various orders which a court may make. In this matter the administrative action, namely the award of the tender, was partially set aside. The purpose of the order was therefore to correct, in a just and equitable manner, unlawful administrative action.
[24] Equicent contended that the wording of the order was clear and that phase 1 was not defined with reference to any other document. It was submitted that there was nothing in the order which suggested that the phases referred to in the order were defined otherwise than in terms of the RFP. It was pointed out in the founding affidavit that the JBCC agreement did not refer to phases but to six sections which did not correspond to the four phases in the RFP.
[25] The respondents on the other hand contended that phase 1 of the tender had been re-defined and denoted the work in which the JV was engaged at the time of the hearing of the review application, namely phase 1 in terms of the JBCC contract, which comprised 500 beds, later increased to 610 beds as per the invoice. Schooling went into considerable detail in the answering affidavit concerning the context within which the settlement agreement was reached. He stated that the construction underway at the time had advanced to a point where it was not practical to set the award and contract aside in respect of phase 1. Phase 1 of the JBCC contract was indivisible and it was not possible to replace one contractor with another when substantial works had been completed. The subject of the debate (presumably between the parties during settlement negotiations) regarding the court’s discretionary remedy in relation to phase 1 was the extent to which the work was under way. It would have been senseless to debate with reference to any other meaning of phase 1. The parties were also conscious that it was not in the public interest to demolish work already performed at the taxpayers’ expense.
[26] Further “contextual” factors raised by Schooling were the desperate need for student accommodation at the University, the risk of the loss of funding for phase 1, and the prejudice to the JV and its subcontractors.
[27] Schooling went on to say that by the time the settlement was reached, the construction of all five buildings had commenced, together with the associated bulk infrastructure for the entire project. What underpinned the settlement was what was being constructed at the time and not an abstract notion of phase 1. It was apparent at the time when settlement was reached that the work which was under way in respect of phase 1 should be allowed to be completed. It was inconceivable that the parties could have agreed to a further carving up of phase 1 into two components, when work on all five buildings had commenced together with the associated bulk infrastructure for the entire project.
[28] Attorneys Stone and Makasi, who represented the JV throughout in the review application, deposed to affidavits to the effect that it was the common understanding of all present at the settlement negotiations that phase 1 would comprise the construction work which was underway at the time in terms of the RFP read with the award and JBCC agreement.
[29] Needless to say Equicent in reply disputed the alleged common intention and stated that its intention was to allow construction only on buildings 1 and 2 of phase 1 as defined in the RFP. There was no over-arching principle agreed to between the parties.
[30] The only document amongst those to which I have referred above which mentioned four phases was the RFP. If phase 1 was defined according to paragraph 4.8.1(a) of the RFP then the reference to phases 2, 3 and 4 in the order must logically correspond to paragraphs 4.8.1 (b), (c) and (d) respectively. The University’s resolution, its progress report to the Minister, and the Minister’s letter of approval, all mentioned phase 1 and phase 2. The JBCC contract referred to six sections, the first of which referred to 488 beds and civils. The supplementary information document referred to one phase and “subsequent following phases”. Changes to the way phases were numbered and the change of unit from buildings to beds took place subsequent to the publication of the RFP and were contained in different documents. While such changes did take place, this did not mean that a broader meaning should be accorded to the extent of phase 1 as defined in the order. This would entail a reference to a different document in the order. However the document expressly referred to in the order, and indeed the precise portion of the document, was the RFP and not any other document. If the court had intended to refer to a different document or a different definition of phase 1, it would have done so. The contention of the respondents that phase 1 meant something different would render the reference to the RFP meaningless. If, as was contended, the RFP had been superseded by subsequent documents, and it was the intention of the parties to refer to those documents in defining phase 1, the order would have said so.
[31] It was submitted on behalf of the respondents that the words “phase 1 of the tender as defined in paragraph 4.8.1(a) of the request for proposals” should not be read in isolation and that regard should also be had to the words “awarded to them” and “to be performed in accordance with the terms of the building contract”. In my view these words do not alter the plain meaning of the reference to the RFP, and do not somehow extend the meaning of phase 1 to incorporate phase 1 as referred to in the award or the contract. The words in the order “awarded to them” do not qualify “phase 1 of the tender” but qualify the tender which was awarded, which was not just the award of phase 1 but an award of the whole tender for the provision of 2000/2046 beds. The reference number of the tender referred to in the order was the reference number on the RFP, which was a request for proposals for provision of 2046 beds. The words “to be performed in accordance with the terms of the building contract” merely in my view, and as was submitted, qualify how the work was to be performed, which would have to be performed within a regulatory framework of contractual obligations. Those words did not re-define the scope of phase 1.
[32] The various “contextual” factors raised by Schooling do not in my view play a part in interpreting what I regard as a clear and unambiguous order. If it is accepted that what was on everyone’s minds while they were debating was the extent to which construction had progressed, and the related adverse consequences should it cease, then it is difficult to understand why a restricted definition of phase 1 was agreed to. In a contractual setting, what must be determined is the common intention of the parties as expressed in the terms of the contract, subject to the accepted principles of interpretation. Prior negotiations are not permissible aids in interpretation. In any event what is sought to be interpreted in the present matter is a court order and it is the intention of the court which is to be considered. It was only the court which had the power to grant a just and equitable order.
[33] In his affidavit Schooling pointed to what he termed absurd consequences flowing from Equicent’s interpretation of the order. The first was that if it was the intention of the parties that only two buildings were to be completed, then which two of the five half-constructed buildings should be completed? Equicent’s response was that buildings 1 and 2 were obviously the first two buildings constructed by the JV, which were indicated on their plans as buildings 1.1 and 1.2, of “Cluster 1”, consisting of buildings 1.1, 1.2, and 1.3. I agree with this response, which is strengthened by what was said by the JV’s attorneys’ letter in response to Equicent’s attorneys’ letter of 27 January 2015 where they said:
“The JBCC Agreement and further electronic correspondence between our client and the University clearly indicate that Phase 1 does not only cover buildings 1 and 2 (250 beds) but rather that the Phase is completed once 610 beds are delivered.”
It appears from that paragraph that the JV had no difficulty in understanding which buildings were buildings 1 and 2.
[34] The second absurdity was that if the JV was only allowed to complete two buildings, why would it be entitled to do so for the full contract price of R127 532 743.50? In my view there is no merit in this point. The award and contract in respect of phases 2, 3, and 4 were set aside with the necessary consequence that the JV would not be entitled to payment for work done in terms of an award and contract which had been set aside. The University was as much bound and affected by the terms of the court order as the JV was.
[35] A further point raised by Schooling was that the time frame in paragraph 4.8.1 (a) of the RFP had come and gone. Again there is no merit in this point. What was clearly intended in the order was a definition of the subject matter of phase 1 and not the time within which it was to be completed.
[36] Schooling tried to suggest that “legally speaking” the JV was only constructing two buildings, one consisting of three “blocks” and the other consisting of two “blocks”. This was a reference to a plan of the village which showed five “clusters” consisting of three “blocks” each. An architect, Mr Robert Quintal, deposed to an affidavit in which he concluded that each cluster comprised one building. In my view this contention cannot be sustained, when regard is had not only to the reference to 17 buildings in the RFP but also to what was said in the JV’s attorneys’ letter when they spoke of buildings 1 and 2, clearly not referring to clusters 1 and 2. This new meaning of “building” in the context of this application seems to be an afterthought. In a letter dated 13 February 2015 the JV’s attorneys stated that they were seeking expert advice on the meaning of the term “building”. Further, if a cluster means a building, then why would the JV only construct five out of six blocks and not all six, making up two clusters/buildings?
[37] The lack of reference to bulk infrastructure in the order seems to be a problem for the respondents. Schooling stated that a status report dated 19 February 2015 recorded that storm water reticulation for the entire project was 50% complete, water reticulation was 75% complete, and sewer lines were 65% complete. He stated that it was not practical, if at all possible, to separate the civil works for 2 out of 17 buildings, in a project of this nature. Even if it was possible, it would increase the costs of the project. Equicent’s response was that the respondents have not demonstrated why the civils could not be constructed on a building by building basis and have only stated that it would be more expensive.
[38] I cannot see how the lack of a reference to bulk services in the order necessitates a different interpretation from that contended for by Equicent. If, as was argued, the construction of buildings 1 and 2 necessitated the provision of bulk services, this would not equate to bulk services for the entire project.
[39] This leads me back to context and the nature of the order which was granted. The court granted a just and equitable order premised on unlawful administrative action. In Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (4) SA 179 (CC) at para [30] Froneman J said:
“Logic, general legal principle, the Constitution, and the binding authority of this Court all point to a default position that requires the consequences of invalidity to be corrected or reversed where they can no longer be prevented. It is an approach that accords with the rule of law and principle of legality.”
[40] As was submitted, there should be a restrictive approach to allowing illegality to remain in place. Brooks AJ’s order can also be interpreted in this light, as allowing the least possible illegality to remain. The respondents, by their interpretation, seem to want to retain as much of an unlawful award as possible. It must be borne in mind that it is only the court which has the power to review and set aside administrative action. The work under way was before the court in the review application, as well as the information concerning the desperate need for student accommodation, the wasted costs involved in demolition, and prejudice to sub-contractors. Nevertheless the court granted a just and equitable remedy in the terms in which it did. Repetition of the information before the court in the review application cannot affect the discretion which has already been exercised in granting the order.
[41] In my view therefore, having regard to the nature of the order, the language of the order read in context, and the purpose of the order, the declaratory relief sought in prayer 2 of the notice of motion ought to be granted. Merely because Equicent sought such relief does not mean that the meaning of the order was unclear, as was suggested. A dispute arose as to its interpretation and Equicent was entitled to approach a court to determine such dispute. It was also submitted that such an interpretation converted the order into a prohibitory one. If the work in progress at the time was to be stopped, so it was submitted, the order would have said so. The extent to which construction had taken place was within everyone’s knowledge and was before the court. I do not agree with this submission. As was submitted on behalf of Equicent, the effect of the setting aside of phases 2, 3 and 4 was that there was no lawful basis for the JV to carry on with the construction in respect of those phases. An order that the JV was prohibited from performing the work involved in those phases would have been superfluous. The public component to the award underscores such a conclusion. The declaratory relief sought in prayer 2 is not in my view in conflict with the terms of the order.
Counter-application
[42] If this court was to interpret the order in accordance with the respondents’ interpretation and the declaratory relief sought in the counter-application, it would be to “correct, alter, or supplement it”, which this court is not competent to do (Firestone South Africa (supra) at 306F-G). It remains in force until set aside by a court of competent jurisdiction. (See Bezuidenhout v Patensie Sitrus Beherend Bpk 2001 (2) SA 224 (E) at 229A-D.)
[43] The interpretation sought in the counter-application would also result in an unclear and ambiguous order. It would necessitate defining phase 1 with reference to the letter of award, the JBCC agreement and the invoice, all of which documents are not consistent with one another. The letter of award refers to phase 1 as comprising 500 beds; the JBCC agreement refers to section 1 as 488 beds and civils; and the invoice refers to 610 beds. In contrast, paragraph 4.8.1 (a) of the RFP stands alone without reference to other documents.
[44] The alternative relief sought in the counter-application is a variation of the order in terms of Rule 42 (1) (b) which provides that a court may rescind or vary an order or judgment in which there is an ambiguity, or a patent error or omission, but only to the extent of such ambiguity, error or omission. None of these situations apply in the present case. It would have in any event to be an ambiguity, error or omission on the part of the court, and not the parties. Further, the proposed varied order would be self-contradictory. If the reference to the RFP was retained, it would conflict with the reference to the supplementary information document and the JBCC agreement. All three documents divide the work into different numbers of phases and it would be unclear which phase 1 was intended.
[45] It follows that the counter-application cannot succeed.
Breach of order
[46] It is not in dispute that work has been done beyond the scope of phase 1 as defined in the order and the respondents are accordingly in breach.
Contempt and related relief
[47] In Fakie NO v CCII Systems (Pty) Ltd [2006] ZASCA 52; 2006 (4) SA 326 (SCA) at para [42] Cameron JA set out the law relating to civil contempt as follows:
“To sum up:
(a) The civil contempt procedure is a valuable and important mechanism for securing compliance with court orders, and survives constitutional scrutiny in the form of a motion court application adapted to constitutional requirements.
(b) The respondent in such proceedings is not an 'accused person', but is entitled to analogous protections as are appropriate to motion proceedings.
(c) In particular, the applicant must prove the requisites of contempt (the order; service or notice; non-compliance; and wilfulness and mala fides) beyond reasonable doubt.
(d) But, once the applicant has proved the order, service or notice, and non-compliance, the respondent bears an evidential burden in relation to wilfulness and mala fides: Should the respondent fail to advance evidence that establishes a reasonable doubt as to whether non-compliance was wilful and mala fide, contempt will have been established beyond reasonable doubt.
(e) A declarator and other appropriate remedies remain available to a civil applicant on proof on a balance of probabilities.”
[48] Equicent, by succeeding in its declaratory relief, has proved the order in accordance with its interpretation, its service, and the breach by the respondents. As already indicated, I am satisfied that the order effectively prohibited construction beyond phase 1 as defined in the order. The respondents cannot rely on the lack of a prohibition in the order in resisting a finding of contempt. Nor can they rely on the assertion that two clusters are in fact two buildings and they are therefore not contravening the order. In his affidavit Schooling relied on the uncertainty concerning the scope of the order in denying that he and the JV were in contempt. The affidavits from the JV’s attorneys Stone and Makazi to which I have referred, also reflect a different understanding of the order, as does their firm’s letter in immediate response to Equicent’s letter of 27 January 2015.
[49] In these circumstances, I am unable to go as far as finding on these papers that the JV’s expressed interpretation of the order was mala fide. Its own attorneys supported it. As was said in Fakie at para [9]:
“A deliberate disregard is not enough, since the non-complier may genuinely, albeit mistakenly, believe him or herself entitled to act in the way claimed to constitute the contempt. In such a case, good faith avoids the infraction. Even a refusal to comply that is objectively unreasonable may be bona fide (though unreasonableness could evidence lack of good faith).”
[50] Equicent relied on the instruction of the University to carry out work in accordance with the most conservative interpretation of the order to support a finding of contempt. While this perhaps should have been a warning light for the JV, it is in my view insufficient to find that the belief in the interpretation of the order was not genuine.
[51] I also do not think that the situation is comparable to that in Meadow Glen Home Owners Association and others v City of Tshwane Metropolitan Municipality and another [2015] 1 All SA 299 (SCA), referred to by Equicent. In that case the terms of a consent order “provided fertile ground for future disputes”. The court remarked that the Municipality was obliged to make good faith endeavours to comply with the order and that:
“If they experienced difficulty in doing so then they should have returned to court seeking a relaxation of its terms. If there was a dispute between them and the appellants regarding the scope of the order and what needed to be done to comply with it, it was not appropriate for the Municipality to wait until the appellants came to court complaining of non-compliance in contempt proceedings. It should have taken the initiative and sought clarification from the court. Its failure over a protracted period to take these steps is to be deprecated.”
In the present matter there were different interpretations of the order. It was not the case that there was agreement about the interpretation and the respondents nevertheless continued to ignore it, regardless of the consequences.
[52] I am therefore not prepared to grant any of the orders relating to contempt.
Interdict
[53] Given that Equicent has succeeded in its declaratory order, I am of the view that the interdict sought would be superfluous. The dispute about interpretation of the order has been determined and the determination dictates what work should and should not be done by the JV.
Delivery of a statement of work done and invoices delivered
[54] The respondents resisted this relief and referred to Absa Bank Beperk v Janse Van Rensburg 2002 (3) SA 701 (SCA), where it was held that the respondent was not entitled to claim delivery and debatement of an account. I quote from the English headnote in that matter as follows:
“In order to succeed in such a claim the respondent would have to prove either (a) the existence of a fiduciary relationship between him and the appellant; or (b) that the appellant had contractually bound himself thereto; or (c) the existence of a statutory duty obliging the appellant to deliver and debate an account.”
It was submitted that none of these circumstances existed.
[55] Equicent relied upon the public duty resting upon the JV as the successful bidder and submitted that accordingly there was a fiduciary relationship and a statutory duty in terms of the Constitution. Reliance was placed upon the following passage in Allpay (supra) at para [59]:
“When Cash Paymaster concluded the contract for the rendering of public services, it too became accountable to the people of South Africa in relation to the public power it acquired and the public function it performs. This does not mean that its entire commercial operation suddenly becomes open to public scrutiny. But the commercial part dependent on, or derived from, the performance of public functions is subject to public scrutiny, both in its operational and financial aspects.”
[56] It is correct that the JV as the successful bidder (in part) is accountable to the public. However in the context of this application, which is for declaratory relief concerning the interpretation of a court order and related relief, a delivery of a statement of work done and invoices delivered is in my view out of place and irrelevant. The passage from Allpay relied upon does not in my view, and as was submitted, provide general authority that in all applications involving the performance of a public function by a successful bidder, that party is obliged to render a statement of account or work done or invoices submitted. I am therefore not prepared to grant the relief claimed in this prayer.
Interim relief
[57] This fell away.
Costs
[58] Equicent has not succeeded in obtaining all the relief claimed. However the substance of this application was the interpretation of the court order, the determination of which had major implications. The other relief claimed flowed from the main relief. In that case I am of the view that Equicent is the substantially successful party and should be entitled to its costs. However I do not think that, in view of my decision on the contempt application, that a punitive costs award is warranted.
[59] The following order will issue:
[59.1] It is declared that:
[59.1.1] In terms of paragraph 1 of the order of this Court issued under case number 4065/2014, by Brooks AJ on 5 December 2014, the respondents are not permitted to undertake or progress any construction of any building or structure work, or any earthworks or any other work in respect of or in connection with any buildings other than buildings 1 and 2 contemplated in paragraph 4.8.1(a) of the request for proposals in the tender REF UFH-SCM-5/2013.
[59.1.2] The third, fourth and fifth respondents are in breach of paragraph 1 of the order of Brooks AJ;
[59.2] The respondents are to pay the costs of the application jointly and severally the one paying the others to be absolved, such costs to include the costs of two counsel.
[59.3]] The counter-application is dismissed with costs, such costs to include the costs of two counsel.
_____________
J M ROBERSON
JUDGE OF THE HIGH COURT
Appearances:
For the Applicants: Adv D N Unterhalter SC and Adv M du Plessis, instructed by Webber Wentzel Incorporated, Johannesburg c/o Netteltons Attorneys, Grahamstown
For the 3rd, 4th & 5th Respondents: Adv J Dickerson SC and Adv J de Waal, instructed by Boqwana Burns Incorporated, Port Elizabeth c/o NNDullabh & Co, Grahamstown
[1] The founding affidavit elaborated on the extent of the work performed after the order was granted. It was stated that construction had continued on at least 5 of the 17 buildings and preliminary work had continued on the bulk services work on all 17 buildings.