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IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

                                                                            Case number: 2870/2013

 

In the matter between:                                       

 

RUDNAT PROJECTS                                                                            PLAINTIFF     

 

and

 

NKETOANE LOCAL MUNICIPALITY                                             1^st DEFENDANT

PHUMELELE LOCAL MUNICIPALITY                                          2^nd DEFENDANT

SETSOTO LOCAL MUNICIPALITY                                                 3^rd DEFENDANT

DIHLABENG LOCAL MUNICIPALITY                                           4^th DEFENDANT 

 

CORAM:                        NAIDOO, J

 

 

HEARD ON:                         17 -18 March 2020, 23 April 2020; 17 November 2020;

23, 24, 25 February 2021; 25 March 2021; 11 May 2021; 14 June 2021

 

 

DELIVERED ON:          22 OCTOBER 2021

JUDGMENT

 

[1]     This is a judgment on the merits and quantum of this matter after completion of the trial. A judgment was previously written following an application by the first defendant, at the close of the plaintiff’s case, for absolution from the instance. A detailed summary of the facts and background were set out in that judgment. For ease of reference, I can do no better than to incorporate here, in a large measure, the initial part of that judgment. The plaintiff issued summons against the four defendants, namely the first defendant, Nketoana Local Municipality (Nketoana), the second defendant, Phumelela Local Municipality (Phumelela), the third defendant, Setsoto Local Municipality (Setsoto) and the fourth defendant, Dihlabeng Local Municipality (Dihlabeng), for payment of monies owed to it for professional services rendered. The relief claimed in the summons reads, inter alia, as follows:

         “Wherefore the Plaintiff claims from the Second Defendant, alternatively from the First, Second Third and Fourth Defendants’ payment by one, the other to be absolved:

            30.1    Payment of R5 287 036,43

30.2    Interest on the aforementioned amount, calculated at 15.5% per year a tempore morae from 13 April 2013 until date of final payment.

30.3    That the Second Defendant be ordered to pay the costs of the action. Alternatively, that the First, Third and Fourth Defendants be ordered to pay the costs jointly and severally, payment by one the other to be absolved, in the event of the Plaintiff being unsuccessful against the Second Defendant only.”

 

 

 

 

[2]     The background to the matter is that the National Department of Water Affairs (DWA) made funding available, in the form of Regional Bulk Infrastructure Grants (RBIG), for a water service regional bulk infrastructure programme for the provision of water to the inhabitants in the jurisdictional areas of the first to fourth defendants. The allegation is that the four defendants held a meeting and decided that the second defendant, Phumelela, would be the leader/coordinator of the project. On or about 18 March 2009, Phumelela sent a letter to the Rudnat instructing it to conduct a water services feasibility study for Setsoto and Dihlabeng, and to reconcile and consolidate the existing feasibility studies undertaken by Nketoana and Phumelela. A Joint Venture (JV) was established to undertake this work, comprising Rudnat (the plaintiff), Mot Professional Services Consultants and Mol Procon CC, and the work was divided amongst them. Mot Professional Services Consultants undertook the feasibility study for Nketoana, Mol Procon for Setsoto and the plaintiff for Phumelela and Dihlabeng . At some stage, Mot Professional Services Consultants were unable to continue with the feasibility study for Nketoana and withdrew from the JV. The study for Phumelela and  Dihlabeng was almost complete, so the Rudnat was requested to take over and complete the feasibility study for Nketoana, which it did.

 

[3]     The aim of these various studies was to achieve implementation readiness. For this purpose an Implementation Readiness Report (IRR) would be produced. Rudnat alleges that it did in fact

 

 

 

produce such a report, which was accepted by DWA as well as the four defendants. From the evidence and the papers it is apparent that numerous meetings were held monthly, where, amongst others, the Rudnat’s representatives, either Ms Crawley, Mr Wagenaar, or both, and the representatives of the four defendants were in attendance.  It is also apparent that there was participation by all present at those meetings.  At various meetings there were discussions regarding progress in respect of the IRR, the challenges faced by the defendant municipalities, and in some instances the solutions to the challenges. I will refer to these meetings in greater detail, where necessary, later in this judgment. The evidence for the plaintiff, which is not in dispute, is that the plaintiff presented its IRR to DWA, the 4 defendants and other stakeholders on 21 October 2010. The report was apparently well received and implemented.

 

[4]     Rudnat’s involvement in the implementation of the water services project in terms of the IRR for Nketoana continued until it learned in October 2011, that Nketoane had appointed another consultant, Khatho Consultants, to implement the project. The plaintiff then rendered an invoice to Nketoana for the services rendered, which was not paid. The plaintiff thereafter instituted the current action.

 

[5]     At the commencement of the trial, Rudnat advised the court that it was no longer proceeding against the second and fourth defendants (Phumelela and Dihlabeng), as the matter in respect of those two

 

 

 

defendants had been settled. Consequently, the court would be called upon to decide:

2.1  if there was a contract in this matter;

2.2  whether the plaintiff rendered services;

2.3  the  amount of the plaintiff’s claim.

 

[6]     Rudnat led the evidence of two witnesses, Ms Hazel Crawley and Mr Pieter Johannes Wagenaar. After Ms Crawley’s evidence was led, the plaintiff applied for an amendment to its Particulars of Claim, which was opposed by the first and third defendants. The amendment sought to expand the allegations regarding Nketoana’s involvement in and conduct in relation to the DWA’s bulk water services infrastructure programme. In addition, Rudnat sought to claim, in the alternative to the contractual claim upon which the summons was based, a claim in delict and as a further alternative, a claim of unjust enrichment on the part of Nketoana. After considering the application, the court granted leave to the plaintiff to amend its summons, which was duly done. After a further adjournment for trial in November 2020, the matter could not proceed as the first defendant had not filed its amended plea. The matter was then postponed for the hearing of further evidence, to 23, 24 and 25 February 2021.

 

[7]     Rudnat then called the evidence of Mr Wagenaar, and thereafter closed its case. Nketoana and Setsoto indicated that they wished to bring an application for absolution from the instance. Immediately

 

 

 prior to the hearing of that application, the plaintiff advised the court that it withdraws the action against Setsoto, the third defendant. The question of who should pay Setsoto’s costs stood over, as Rudnat argued that it should be Nketoana. Conversely, Nketoana argued that Rudnat, who has withdrawn the action against Setsoto, should be liable for those costs. The application for absolution was then argued by the Nketoana and Rudnat. The court dismissed the application, with costs.

 

[8]     It is opportune to summarise the evidence led by Rudnat in support of its case. Ms Crawley testified that she is the Administrative Manager of Rudnat, which is a civil engineering firm in Harrismith in the Free State. She has held this position for 13 years, and performs all the administrative work for Rudnat. She was very closely involved in the entire project for the water service regional bulk infrastructure programme, and attended all the monthly meetings. She gave details of how Rudnat came to be involved in the water service programme, as I have outlined above, and detailed the work that it had done in this matter. Ms Crawley testified that there was no tender process involved, and that Rudnat was invited to provide its services in this matter. She also confirmed that Phumelela was the designated coordinator of the programme and that DWA had provided monies to Phumelela, which was to be divided amongst the four defendant municipalities to cover the costs of groundwater studies.

 

 

 

 

[9]     She indicated that Nketoana participated in the programme, attended the monthly meetings and had ongoing interactions with Rudnat, while the IRR was being completed, also during the times that it prepared the preliminary and the final designs. The preliminary design and final design were part of the implementation of the IRR. Apart from the monthly meetings, there were also interactions directly between Rudnat and Nketoana in respect of implementation. The plaintiff was thereafter informed by Nketoana on 7 October 2011, that Khato Consulting was appointed to implement the project. This was a year after the Rudnat’s IRR was approved. The latter then issued an invoice to Nketoana for payment in respect of services rendered. The invoice was based on fees chargeable by the engineering profession as provided for in the relevant Government Gazette. When Nketoana refused to pay, Rudnat instituted legal action.

 

[10]   Ms Crawley was cross-examined at length by counsel for Nketoana and Setsoto. She confirmed that they were not in possession of a resolution from Nketoana’s Municipal Council in respect of this project. She also confirmed that at the time of its appointment to render services, the plaintiff was advised by the Municipal Manager of Phumelela that the four municipalities had met and appointed Phumelela as the “champion” of the project. She was unable to comment on what was discussed and decided at that meeting, as Rudnat was not involved at that stage.

 

 

 

 

[11]   Pieter Johannes Wagenaar, testified that he is currently semi- retired but his involvement with Rudnat was in the capacity of a management member. He is a civil engineer by profession. After the court dealt with an objection to this witness testifying as an expert, his testimony continued. He testified that he was also closely involved with the water service project that is the subject matter of this case. He led extensive evidence on the calculation of the fees which Nketoana was invoiced for, with reference to the tariffs prescribed by the Engineering Council of South Africa (ECSA), as published in the relevant Government Gazette. Mr Wagenaar is a registered member of ECSA. He further testified that the work, as reflected in the papers was done. He was also cross-examined at great length. He conceded that Rudnat did not obtain a signed letter of appointment from Nketoana, nor was there a written agreement between Rudnat and Nketoana. He indicated that the letter of appointment was requested several times from Nketoana, but was not forthcoming. Furthermore, he confirmed that there was no bidding process involved in this matter, and that Nketoana at no stage produced a resolution by its Council for Rudnat to render services for it.

 

[12]   He continued to do the required work, trusting that the letter of appointment would be provided, because of the many meetings that they had with Nketoana, who also engaged with them to supervise the consultants involved with the Environmental Impact Assessment and Survey as well as the surveying of the land for the purposes of

 

 

 

work to be done in connection with bulk water supply scheme. Rudnat was further called on to approve the accounts rendered by these consultants. He also indicated that Nketoana was present at all the meetings and continued to give progress reports on work being done on its behalf. At no stage did it raise the issue of a contract between it and Rudnat, or query why Rudnat rendering the services or object thereto. Rudnat closed its case after this witness testified.

 

[13]   Mr Shepstone argued that Rudnat failed to establish its case in contract, especially if regard is had to Mr Wagenaar’s evidence, as no contract between Nketoana and Rudnat has been proven. In respect of the amendment to the Particulars of Claim, he argued that two new causes of action were introduced, namely, that of unjust enrichment and a claim based in delict. Mr Shepstone argued that these claims would in any event have prescribed by the time the amendment was effected. He advanced lengthy arguments in respect of the elements to be established in proving a claim of unjust enrichment, as well as a claim based in delict.

 

[14]   Rudnat countered that it had certainly placed sufficient evidence on record, via Ms Crawley and Mr Wagenaar, to show that there was an instruction to it, and that it had conducted the works over an extended period, with the knowledge of Nketoana who participated fully in the project. Mr Wagenaar’s evidence sets out clearly that the work was done and charged for in stages, and when viewed in conjunction with

 

 

the evidence of Ms Crawley, such work was rendered and benefitted Nketoana. At the conclusion of these arguments, absolution from the instance was refused.

 

[15]   I had said in my judgment on absolution that issues relating to whether the plaintiff proved all the elements of the claim or whether prescription affects such claims were matters to be investigated or interrogated at a later stage. This is usually after the parties have closed their respective cases and the merits are being considered in relation to all the evidence before the court. Nketoana closed its case without leading any evidence, so that the only version before the court is that of the plaintiff. The exercise of considering whether Rudnat proved its case and is entitled to the relief it claims must incorporate and take account of all the evidence placed before the court. I will deal briefly with the arguments raised by Mr Shepstone in support of Nketoana’s prayer for the dismissal of Rudnat’s claim, with costs.

 

[16]   With regard to Rudnat’s main claim based on contract, Nketoane refers to it as the initial cause of action and argues that Rudnat initially relied on a written contract (with Phumelela) but has now abandoned that cause of action and relies on a tacit agreement, which cause of action it has not pleaded. It has, therefore, failed to discharge the onus on it and must fail in its quest for judgment. With

 

 

 

regard to the claims based in delict and on unjust enrichment, I earlier indicated that Nketoana argued that these are new causes of action, in which the debts became due in 2010 and 2011 respectively, and which had prescribed by the time the amendment to the Particulars of Claim was effected in 2020.

 

[17]   As I indicated, the amendment to the particulars of claim introduced the delictual and enrichment claims as alternatives to the contractual claim. This was after the possible versions of the defendants became apparent during the extensive cross examination of Ms Crawley. In view of the special plea of prescription raised by the first defendant, I shall deal with this aspect first. It is well established in our law that an amendment to a summons will usually be granted unless it causes prejudice to the other party, which cannot be cured by an appropriate order for costs. As an example of what would constitute prejudice, the court in Imperial Bank Ltd v Barnard and Others NNO 2013 (5) SA 612 (SCA) remarked at para [8]

“Thus, a late amendment which has the effect of introducing a new cause of action or new parties would inevitably cause prejudice to the other party in the action, as it would defeat an otherwise good defence of prescription. However, a plaintiff is not precluded by prescription from amending his or her claim, 'provided the debt which is claimed in the amendment is the same or substantially the same debt as originally claimed, and provided, of course, that  prescription of the debt originally claimed has been duly interrupted'”

 

 

 [See Associated Paint and Chemical Industries (Pty) Ltd t/a Albestra Paint Lacquers v Smit 2000(2) SA 789 (SCA)].

 

[18]   The court also applied the dictum in Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron 1978 (1) SA 463 (A), where the court in discussing the effect of prescription on an enforceable right, qualified the word “right” as "the same or substantially the same right as would otherwise be rendered unenforceable by lapse of time", and remarked  further “For the substance rather than the form of the previous process must be considered in determining whether or not it interrupted prescription'.(471 A-C). (my emphasis)

 

[19]   In the matter of Rustenburg Platinum Mines v Industrial Maintenance Painting Services (2009) 1 All SA 275 (SCA), the court dealt with the issue of whether an amendment to the appellant’s particulars of claim introduced a different debt to the one originally claimed, and if so, whether the claim had become prescribed. The appellant (plaintiff in the court a quo) sought to amend its particulars of claim after three witnesses had testified at the trial. The defendant objected to the amendment on several grounds. I will confine myself to the court’s findings in respect of prescription. The court undertook a comprehensive examination of the authorities in the context of the effect of the relevant provisions of the Prescription Act 68 of 1969, namely, sections 10(1). 11(d) and 15(1) of the Act.

 

 

 

[20]   Section 10(1) provides that “…a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt. Section 11(d) stipulates a period of three years as the prescriptive period relevant to a debt as in the present matter and section 15(1) provides that “The running of prescription shall, subject to the provisions of subsection (2), be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt”. The court in Rustenburg Platinum Mines concluded that, based on the numerous cases it examined, “It should, therefore, by now be fairly clear that when the Prescription Act speaks of a "debt" it refers more generally to a "claim" and not the "cause of action". Based on Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A), also applied in the Rustenburg case, the court in the latter case concluded that “if the new cause of action, ie the material facts which must be proved for a plaintiff to succeed, sought to be introduced by the amendment, gives rise to a different "right of action" or "debt" to the one originally claimed, that plaintiff will be precluded from effecting the amendment if the relevant prescriptive period has run. But, it does not follow that a new cause of action sought to be introduced by an amendment will necessarily give rise to a new "claim" or "debt". 

 

[21]   The court in Rustenburg also cited with approval the case of CGU Insurance Ltd v Rumdel Construction (Pty) Ltd. 2004 (2) SA 622 (SCA) para 6, and said in para 19

“…in CGU Insurance Jones AJA said that in deciding whether a summons interrupts prescription, it is necessary to compare the allegations and relief claimed in the summons with the allegations and the relief claimed in the amendment to see if the debt is substantially the same (see paragraph 15 above). When this test is applied to the facts of the present matter, the result seems to me to be that the plaintiff seeks throughout to recover the same debt. The relief claimed originally is payment of the sum of R392 160, being the

 

 

 

 

balance of the excess amount, the defendant having repaid part of it. The relief claimed in the amendment sought to be effected is for payment of the sum of R392 160 plus VAT, the capital amount being the balance of the excess amount after the defendant had repaid part of it. It is so, as I have mentioned above, that the allegations or "cause of action" upon which the relief claimed is based in the amendment differs from the allegations or "cause of action" set out in the particulars of claim, but the relief claimed, ie the "debt" is, in my view, the same”.

 

[22]   Applying that test to the matter before me, Rudnat seeks to recover the same debt. There is no dispute that the original claim is not susceptible to prescription as demand was made and summons served on Nketoana well within the three-year period, thus interrupting prescription. It is so that the basis for the claim differs from the original claim, but both the delictual claim and the enrichment claim are pleaded in the alternative to the main claim and seek to recover the same debt. For present purposes, I find that these two “causes of action” are not affected by prescription. In my view, the contractual claim must be interrogated, against the backdrop of the evidence, both oral and by way of the papers, to determine if Rudnat has discharged the onus on it to justify granting the relief it seeks.  

 

[23]   From the oral evidence of Rudnat’s witnesses as well as from the papers, it is evident that the funding in this matter for the regional bulk integrated water programme came from DWA. Each municipality was the implementing agent. It was a project which was driven by DWA in accordance with national water infrastructure and water services

 

 

 

legislation. Each participating municipality was obliged to enter into a Funding Agreement with DWA, which sets out in detail the rights, obligations and responsibilities of DWA and the relevant municipality. The latter is referred to as the Water Services Authority in the agreement. It is also evident from correspondence by DWA to Nketoana, which forms part of the voluminous papers, that such funding was for implementation of the project and included the IRR and preliminary designs.

 

[24]   In respect of Rudnat’s involvement and rendering of services to Nketoana, this was not a situation where the municipality required services that would entail a bidding process, and a consequent contract between the municipality and the contractor for the rendering of services, which the municipality pays for. In my view, cross-examination and argument along the lines that there was no bidding process, no award of a tender and no contract, are misplaced and simply serve to muddy the waters. This view is fortified by the detailed provisions of Funding Agreement, from which there can be no doubt that DWA provided the funding, had complete oversight in respect of progress and implementation of the project, and that Nketoana was obliged to issue progress reports in respect of the project on a monthly basis to DWA. Nketoana was also obliged to furnish to DWA detailed monthly cash flow projections for every financial year that the project was running.

 

 

                                                                           

 

[25]   Funding, in specific amounts for a particular year, was made available to Nketoana for each financial year since approval of the project. The Funding Agreement also specifically stipulates in clause 7.1 that “The execution of a Feasibility Study or Implementation Readiness Study shall form part of the scope of the project, unless it has already been undertaken and accepted by the Water Services Institution or will be undertaken in terms of a separate Agreement” The Funding Agreement provides further in clause 7.4 that

“…All participating Water Service Institutions must demonstrate to the Department through Council resolutions supported by the recommendation of Municipal Managers or Heads of Department that:

7.4.1   The Water Services Institution agrees to and understands the implications and findings of the feasibility studies; and

7.4.2   has complied with any legislative requirement relating to such feasibility study…”

 

[26]   Clause 12.19 of the Funding Agreement provides, inter alia, as follows”

         “The Water Services Institution shall claim from the Department funds as approved per the individual funding agreements for the Projects in the Schedule of projects…”

The correspondence bears out that all invoices for work done and services rendered would be submitted to Nketoana, who would in turn submit such invoices to DWA for payment, including those of Rudnat.

 

 

 

 

[27]   The papers and the oral evidence before this court indicate that Nketoana participated fully in the Bulk Water Supply Scheme, attended the monthly meetings and rendered regular progress reports in respect of the work being done Rudnat, and it directly engaged Rudnat, after acceptance of the IRR prepared and presented by Rudnat, to supervise the Environmental Impact Assessment and Land Survey. Rudnat did so, and was also involved in the appointment of the service providers for these two activities. This corroborates Ms Crawley’s evidence.The correspondence reveals that Rudnat was very involved in the process of evaluating the work of these service providers and approving payment to them by Nketoana. The Land Survey could not have been completed without extensive information regarding the route of the pipes being furnished to the consultant by Rudnat.

 

[28]   It is also evident, in my view, that, given the vast amount of work done by Rudnat, Nketoana could only have benefitted to a large extent from the work done by Rudnat.  The latter made numerous requests to Nketoana to sign a letter of appointment for purposes of audit and formalising the contract which would have come into existence when Rudnat was instructed to render the services it did. Nketoana’s acceptance of the IRR and designs prepared by the plaintiff require interrogation to establish if it acted in terms of an agreement.  The clearest indication that Nketoana was acting in terms of a formal and structured agreement is the addendum to the

 

 

 

Funding Agreement titled “Special Terms of Agreement”, the preamble of which is contained in clause 27, and which reads:

“The following schedule contains the summary of the institutional and organisational arrangements for the execution and implementation of the project(s) covered by this agreement;…”

 

[29]    The document then proceeds to list the schedule of arrangements as follows:

         “Implementing WSA:           Nketoana Local Municipality

            Benefitting WSA:                  Nketoana Local Municipality

            Province:                               Free State

Ownership of the infrastructure created under this agreement vests in:

                                                            Nketoana Local Municipality

Organisation responsible for the operation and maintenance of the infrastructure:

Nketoana Local Municipality

Organisation responsible for budgeting for O&M to run and maintain this infrastructure:               Nketoana Local Municipality

O&M budget:                        Nketoana Local Municipality

Organisation responsible for creation of infrastructure:

                                                            Nketoana Local Municipality”

 

[30]   Clause 29.1 confirms that the Implementation Readiness report for the scope of work included in this project has been completed and accepted by the Water Services Institution and the Department.

 

 

Clause 30 lists the domicilia citandi et executandi of DWA and Nketoana, and importantly, clause 31, headed “Authorised Representatives”, reads as follows:

“The Parties designate the following individuals who will have the authority to act on their behalf and who will be responsible for the communication between them:

            For the Department:                                    (Ms) Slindile Mhlawuli

            For the Water Services Institution:            (Mr) S.J. Thomas”

            (my emphasis to indicate that Mr Thomas had the authority to contract on behalf of Nketoana)       

 

[31]   A further schedule to the Funding Agreement is a checklist for the Regional Bulk Project file, which lists items that need to be complied with. Item 5 refers to “Appointment Letters – Feasibility Study” and item 7 refers to “Appointment Letters – Design and Tender”. These two items may well be a reference to the work that Rudnat had performed. Mr Wagenaar’s evidence is that he had requested Nketoana on several occasions to furnish him with such a letter in order to formalise the arrangements between Rudnat and Nketoana, but received no response. I pause to mention that the other municipalities did in fact furnish Rudnat with letters of appointment for the rendering of professional services.

 

[32]   Nketoana’s intransigence is reflected in its reluctance and/or refusal to sign the letter of appointment. The correspondence handed up in

 

evidence reflects that Nketoana similarly neglected to furnish the appointment letters in respect of the consultants who undertook the EIA and Land Survey. Only after being pressured by Rudnat to do so, did Nketoana furnish such letters. This attitude extended even to the Funding Agreement which DWA required it to sign. Rudnat was then requested by DWA to prevail upon Nketoana to sign the agreement, which it did.

 

[33]   Nketoana now opportunistically argues that there was no letter of appointment or contract between it and the plaintiff, which entitled the plaintiff to claim payment for services rendered. Tellingly, Nketoana studiously avoided any mention of the Funding Agreement, the monthly progress/site meetings that it attended, the various progress reports that it presented at these meetings and the numerous actions it performed in compliance with the Funding Agreement it entered into with DWA. Its cross examination of Mr Wagenaar and its arguments in court and in its Heads of Argument concentrated on the lack of a contract with or letter of appointment for Rudnat.

 

[34]   It is common cause that Rudnat was paid for all the work it had done up to and including the presentation and acceptance of the IRR in October 2010. Nketoana placed no evidence or explanation on record of how it came about that Rudnat performed all the work it did on behalf of Nketoana, over a period of many years, without any question being raised about why or how such work was being done without any authority from Nketoana to do so. It also gave no

 

 

explanation for why Rudnat was paid for work done up to the presentation of the IRR, why it continued to use the services of Rudnat for a year after the acceptance of the IRR, in the implementation phase of the project, and in all that time made no mention that it had appointed Khato Consultants to implement the project. The latter appears to have played no part at all in the project, did not attend meetings or do any work to advance the implementation of the project.

 

[35]   The Funding agreement makes provision for the Water Services Authority (being Nketoana in this case) to appoint an implementing agent for the execution of the project. Ms Crawley and Mr Wagenaar both testified that they were informed that the four defendant municipalities had met and had decided that Phumelela would be the “champion” (to use Ms Crawley’s words) of the project and that all communication in respect of the project should be directed via them. Rudnat was not part of that meeting and was not able to furnish any further details in connection with what had occurred at that meeting.

 

[36]   Phumelela in fact addressed a letter of appointment to the JV, engaging the JV to “develop a water services feasibility study and consolidation of feasibility studies”, specifically in respect of the four defendant municipalities. The letter also mentions that Dihlabeng and Nketoana do have feasibility studies and the JV is expected to develop new ones for Nketoana and Phumelela. Nketoana, in its plea and in putting its version to Rudnat’s witnesses, baldly denied that it

 

 

 

authorised Phumelela to act on its behalf. This begs the question why Phumelela would randomly assume to itself the power to act on behalf of the other three municipalities. Nketoana left this question unanswered, in spite of this issue being peculiarly within its knowledge. In my view, the probabilities favour Rudnat’s version in this regard, and Nketoana’s denial is yet another attempt to raise dust in the arena in order to cloud the real issues.

 

[37]   Mr Shepstone argued that Rudnat initially relied on a written contract and then abandoned this and relied instead on a tacit agreement, As I indicated earlier, his argument is that a tacit agreement was not pleaded and could not therefore, be relied on. A perusal of the Particulars of Claim indicate that Rudnat did, in fact, plead that the Municipal Manager of Phumelela represented all the defendants when a partly written and partly oral agreement was concluded with Rudnat. It also pleaded and set out what the “express, alternatively implied, in the further alternative tacit terms of the agreement” were. (paras 11 and 12). In the absence of any evidence from Nketoana in this regard, the evidence of Rudnat must be taken into account. A bald denial in its plea or arguments does not suffice for consideration as the version to be weighed up against that of Rudnat, given under oath.

 

[38]   I find therefore, that Nketoana conducted itself in a manner that points to the conclusion of an agreement with Rudnat, albeit a tacit

 

 

 agreement, for the implementation of the IRR, which the latter accepted. It appears that Nketoana was acting in accordance with its obligations in terms of the Funding Agreement it conducted with DWA. The fact that Rudnat had been paid for all work previously done by it and that Nketoane had continued to engage Rudnat’s services after acceptance of the IRR is a further indication that it had intended to contract with Rudnat for the provision of its professional services. Rudnat, for its part, accepted and understood an agreement to have been concluded between it and Nketoana for Rudnat to provide professional services for Nketoana in the implementation of the IRR. Rudnat conducted itself accordingly. In view of this finding, it is not necessary for me to deal with Rudnat’s alternative claims based in delict and on unjust enrichment.

 

[39]   I deal now with the aspect of the quantum of Rudnat’s claim. Mr Wagenaar tendered extensive evidence on the basis for the amounts contained in the invoices rendered to Nketoana. He is a member of the Engineering Council of South Africa (ECSA), and as such the fees he is capable of charging are regulated by tariffs set by ECSA and published in the Government Gazette. Mr Wagenaar went through various invoice items and correlated those with the tariffs in the relevant Government Gazette. He was cross-examined extensively on this aspect of his evidence, but no countermanding evidence was presented by Nketoana in order to persuade me that Mr Wagenaar was not entitled to those fees or that the amounts

 

 

 

charged were excessive.  Nketoane also attempted to argue that the tariff amounts can only be charged if there was agreement beforehand that such charges may be levied. Rudnat had previously charged for its services according to tariff and had been paid accordingly for the work done. In my view this is a further indication of a tacit agreement that work may be charged according to the tariff set by ECSA.  I find therefore, that the quantum of Rudnat’s claim is in accordance with prescribed and allowable tariffs for his profession. As such, the computation of its quantum is fair and reasonable.

 

[40]   That brings me to the issue of costs. Rudnat, as the successful party is entitled to payment of its costs. The issue of the costs of the postponement on 17 November 2020 stood over for determination at the end of the trial. At the time, it appeared as though there was negligence on the part of the responsible functionaries of Nketoana resulting in the non-filing of its amended plea and the withdrawal of its attorney of record. I, therefore, indicated that the relevant functionaries should explain to this court why an order should not be made directing them to pay such wasted costs personally, As result the Legal Manager and the Administration Clerk at Nketoana deposed to affidavits in which an explanation was tendered for why they should not be held personally liable for the costs of the postponement.

 

[41]   In summary, the Legal Manager was appointed on 1 September 2020

 

 

and only thereafter realised that Nketoana’s attorney had withdrawn. He attended to the matter and after discussion with the attorney, the latter agreed to continue representing the municipality. Thereafter he learned the day before the trial date that the matter was enrolled for trial the next day. He also discovered that they had not received the notice of set down for trial. This is was what precipitated the application for a postponement. I am satisfied that there was no wilful or negligent conduct on the part of the relevant functionaries of the municipality and that an order for them to pay the costs of the postponement personally will not be appropriate.

 

[42]   Allied to the postponement of 17 November 2020, Nketoane alleges that it did not receive the Notice of Set Down for trial.  It is common cause that Rudnat sent the said notice to Nkeoana by way of registered post. The legal manager alleged in his affidavit referred to above that it was received only on 17 December 2020, a month after the trial date. Mr Grobler informed the court that due to the pandemic and the lockdown regulations in terms of the Disaster Management Act, the notice was served by registered post but that as soon as Nketoane’s attorney placed himself on record again, the notice was served on him via electronic mail. There appeared to have been a problem with the email system and it was not received. Nketoana was informed by Setsoto’s legal representative of the trial date

 

[43]   In my view, although service by registered mail is not in accordance

 

 

with the Rules of Court, the pandemic had caused litigation and indeed every other aspect of life to be conducted in unusual ways. The non-receipt of the Notice of Set Down would not on its own have led to Nketoana’s non-preparedness for trial. It was the withdrawal of the attorney due to non-payment of his fees that was the chief reason for the amended plea not being prepared. There also appeared to be problems with the Municipal Manager who was subsequently placed on suspension from his duties, which contributed to the matter not being able to proceed. I am not convinced, therefore, that it is necessary to consider this aspect any further.

 

[44]   With regard to who should pay the costs of Setsoto, the third defendant, the general rule is that if a plaintiff withdraws the action against a defendant, he should tender the costs of such defendant. In this matter, the third defendant was made to go through the entire trial process only before the matter against it was withdrawn at the end of the plaintiff’s case. Mr Grobler argued that Nketoana should be ordered to pay such costs, but in my view, put forward no cogent reason for this. It was not Nketoana who dragged Setsoto to court, nor was it in any demonstrable way responsible for the action being withdrawn against Setsoto. I see no reason to depart from the general rule relating to Setsoto’s costs.

 

[45]   In the circumstances, the following order is made:

45.1           The plaintiff succeeds in its claim against the first defendant.

 

 

45.2           The first defendant is ordered to pay to the plaintiff:

45.2.1        an amount of Five Million Two Hundred and Eighty Seven Thousand Thirty Six Rand and Forty Three Cents (R5 278 036.43), together with costs of the action, on a party and party scale;

45.2.2        interest on the aforesaid amount at 15.5% per annum, a tempore morae from 13 April 2013 to date of payment.

45.3           The plaintiff is ordered to pay the third defendant’s costs of the action on a party and party scale, up to and including 25 February 2021.            

 

 

 

 

                                                                       

                                                                                 S NAIDOO J

 

 

 

 

 

 

 

 

 

On behalf of the Plaintiff:          Adv S Grobler SC

Instructed by:                             Peyper Attorneys

                                                          101 Olympus Drive

                                                          Helicon Heights

                                                          Bloemfontein

                                                          (Ref: Ms S Meades)

 

 

 

On behalf of the 1st Defendant:            Adv RC Shepstone

Instructed by:                                        Lawrence Melato Attorneys

c/o Roussouws Attorneys

119 Pres Reitz Avenue

Westdene

Bloemfontein

(Ref: Mr JH Conradie)

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