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IN THE HIGH COURT OF SOUTH AFRICA

TRANSVAAL PROVINCIAL DIVISION

MOORE, DOUGLAS

Trading As Kingston Construction

Plaintiff

V

CONRADIE, CARL FRANCIS

FIRST DEFENDANT

SNAKES NEST HOLDINGS 12 (PTY) LTD

Second Defendant

Case No 23771 /2003

Civil trial

Coram: Sapire AJ

JUDGMENT

Monday, 23 February 2009

Although two defendants have been cited, it is common cause, that the joinder of second defendant is an error and is to be ignored. There is therefore only one defendant who will be referred to as such. The parties entered into a written agreement on 12^th September 2002 in terms of which the Plaintiff undertook to build a dwelling on a site, 21 Blue Hills Country Estate, Midrand, owned by the company cited as second defendant. This may account for the misjoinder.

The plaintiff's main claim is for payment to him by the defendant of an amount of R189 002 14, alleged to be the unpaid portion of the contract amount (including additional work) agreed to in the building contract, in terms of which the Plaintiff built a house for the Defendant. This claim rests on the allegation that the Plaintiff "duly completed the works and additional works". The two alternative claims in lesser amounts postulate that the works were not completed, but that in the circumstances the Plaintiff was entitled to the amounts specified.

The agreement is typed on stationery bearing Plaintiffs logo. In it, the parties with reference to plans which were to be lodged with the municipality described the work to be done and the materials to be used in constructing the dwelling.

The total project price inclusive of materials, Labour and Vat at 14% was fixed at Rl 100 000.

Some items were to be provided and paid for by the defendant who also made disbursements for items included in the specification of the works. In so far as this was done they were to be excluded from the contract price Provision was made for the payment of draws periodically during the progress of the work as indicated in a schedule attached to the agreement.

In giving evidence the defendant produced a summary of the disputed calculations of the amount claimed by the Plaintiff in these proceedings. (Exhibit F)

		PRICE	VAT	TOTAL
	Total Contract			1,100,000
	Building	750,976	105,137	856,113
	Finishes	196,831	27,556	224,387
	NHBRC Levy			19,500
		947,807	132,693	1,100,000

Breakdown of building costs			856, 113
Building	644,704	90,258	734,962
Electrical	34,005	4,761	38,766
Plumbing	48,585	6,802	55,387
	727,294	101,821	829,115

Contingencies	23,682	3,316	26,998
			856,113

Payments by Defendant

07 Oct 02 210,000

01 Nov 02 130,000
27 Nov 02 230,000
11 Dec 02 50,000

20 Jan 03 100,000 720,000

Plans & Municipal Fees (Paid 26 Sept 2002) 10,440

TOTAL PAID Prior to

Total Payments by Defendant 730,440 dispute

Let's use the Plaintiffs figures

Building 727,294 101,821 829,115

Less

Municipal Plans & Fees (paid by defendant) -10,440 -1,462 -11,902

LESS Total payments by Defendant 720,000 -720,000

DUE as at 20 Jan (2 months prior to

dispute) -3,146 100,360 97,213

Add

Plaintiff Additional Work

(disputed charges) 22,412 3,138 25,549

Additional agreement to the contract

Due with FINAL payment on presenta­tion of a Tax Invoice

19,265 103,497 122,763

Less

Plaintiff estimate of work outstanding -43,035

(disputed) -37,750 -5,285

Due to defendant/Plaintiff - 18,485 98,212 79,728

The defendant prepared the above schedule (which ignores the Plaintiffs alleged serious breach in failing to erect the dwelling according to plan in a proper and workmanlike manner) to demonstrate the balance if any owing on the contract taking into account a dispute as to whether VAT was to be included or not. The contract price included VAT but the defendant maintains that the plaintiff was not a registered VAT vendor and accordingly was not entitled to demand or receive VAT.

It is clear that the plaintiff was not registered prior to the 9^th of June 2003. On that day he received a certificate of Notice of Registration issued by SARS declaring that he had been registered for Value Added Tax (VAT) as from the 1^st of September 2002. The certificate was only issued after the present litigation commenced, and its production at a late stage occasioned a postponement of the hearing of the action. . It is difficult to understand how one can register as a VAT vendor retrospectively after the contract had been concluded.

No VAT invoices were discovered or produced There remains a considerable doubt as to whether VAT was payable in respect of the transaction and whether the plaintiff was entitled and obliged to recover VAT from the vendor. In view of the conclusion to which I later came this question does not have to be decided.

The building it was agreed was to be completed within a period of six months from date of commencement of the operations which was early in October 2002.

The agreement did not have the detailed provisions which are contained in the standard building contract, and although one Simon Knutton was appointed to supervise the work in terms of the National Building Regulations there is no evidence of him having played any significant part in the overseeing the construction of the house. No architect was engaged by the Defendant.

The Plaintiff started working on the project early in October 2002 and by March 2003 the house was, seemingly nearing completion. During the progress of the works the defendant paid the initial commencement deposit agreed upon, and further amounts from time to time totalling R 730,440. On 18th March the Plaintiff produced a list of items comprising "work still to be completed" at a cost of R 37,750.00. He claimed in evidence that this would have taken no more than a week to do.

Relations between the parties remained amicable until at an advanced stage of the building the issues now before the court arose. The change came about when the Defendant received a report from an engineer who he had asked to inspect the still uncompleted building to confirm or allay his misgivings about the standard of workmanship the plaintiff was demonstrating in the construction of the dwelling. The plaintiff had been referred to the engineer by his bank as Simon Knutton was not immediately available.

Mr. Munday, who is the engineer engaged by the Defendant, presented his report dated 25^th March 2003. The defendant was furnished with a copy. From a note made on the copy of the report it appears that a meeting took place on site on that date attended by the defendant, his wife, the Plaintiff and Munday at which the report was discussed. There is no evidence that the Plaintiff seriously disputed the correctness of the report.

The report (a copy of which was to be found at page 80 of the Plaintiffs bundle of documents), records in the first place that Munday & Associates, Structural Consultants (in the person of Mr Munday) at the request of the defendant visited the property to inspect, inter alia, the reported irregularities in the tiling lines with reference to the as built brick walls. The object of the inspection was to identify the problems and to recommend remedial action.

Mr Munday's observations were On initial inspection it appeared that certain of the brick walls had not been constructed with 90-degree angles. For clarification the site was revisited and Munday took extensive measurements of the critical areas

The main areas in contention were plotted out and the findings are demonstrated on drawings nos 3477-1 and 2 which were like this report later discovered and later produced in evidence..

From the drawings it is clear that there had been a problem with the initial setting out of of the building and that the tiler had attempted to compensate for the irregularities

By and large the tiler had been relatively successful under the circumstances but the misalignment of the building was extremely noticeable in the passage area and the living/kitchen area.

The plastering of some of the internal walls was not straight and out of plumb.

The side flashings had been incorrectly installed

Relating to the incorrect setting out Munday noticed that the roof tiles in the vicinity of the kitchen were running out of line and had been cut in an unsightly manner

The ridge pointing was cracked and loose and thus not waterproof

Other defects were noted but were of less importance than the incorrect setting out of the building.

The conclusion reached was that the elimination of the errors arising from the incorrect setting out of the building could not be achieved without demolition but measures could be taken to lessen the unsightly effects.

This contrasts with and contradicts what the Plaintiff recorded in the schedule dated 18^th March to which reference has been made.

The contents of the report are the basis on which the Defendant has resisted Plaintiffs claim, and of the counterclaim which the Defendant has made against the Plaintiff.

In a letter dated 25^th March 2003(the same date as that of the Munday report) the defendant informed the Plaintiff that the dwelling as it stands is unacceptable referred to the Munday report and recorded that it was discussed with the plaintiff gave the plaintiff notice to complete the work as specified in the contract by 17h00 on 4^th April and to rectify the defects identified in the report in a manner agreed to by John Munday and to his satisfaction failing which the contract would be cancelled.

The plaintiffs reply to this was by letter dated 27^th March 2003 in which he reminded the Defendant that in terms of the September agreement the defendant still owed the plaintiff R135 000.00 plus extras. The plaintiff further adopted the stance that as the defendant being in breach of the agreement right from the start the Defendant was in no position to demand performance of any sort.

The Plaintiff did not deal with the report. If Munday's findings were correct, the plaintiff was not entitled to claim payment of any moneys at that time notwithstanding this the plaintiff persisted in his attitude and eventually decamped from the site and left the house uncompleted. No steps were taken to remedy the defects which were listed in the Munday report. It is the plaintiff therefore who was in breach of the contract and is not entitled to payment of the contract price and must fail on his main claim.

The evidence is that the plaintiff spent considerable amount of money on work to the dwelling after the plaintiffs departure from the site, and the defendant is in occupation and clearly accepted the work done by the plaintiff. But that in itself does not entitle the plaintiff to the amounts he claims in the alternative.

John Munday was called by the defendant as an expert and he testified confirming his report and amplified. His evidence was impressive and the plaintiff did not attempt to counter it.

The expert called by the defendant, Prof Botha, was a quantity surveyor and it was not in his field of expertise to give an opinion contrary to that of Mr Munday. On the question of the setting out of the building the experts met and Prof Botha said that if the measurements taken by Munday were correct the walls deviated excessively from the standards acquired by the NHBRC.

Prof Botha insofar as he remained within his field of expertise was also an impressive witness and his opinions are acceptable. He however cannot gain say the evidence of Mr John Munday.

The evidence of the defendant's expert establishes beyond doubt that the works were never commence in accordance with the plans and that they were certainly not completed. John Munday also testified to a number of aspects in which the Plaintiffs performance of his obligations fell significantly short of what was required.

The Plaintiff repeated in court that he refused to complete the building or to carry out any work to eliminate any faults which have been found unless and until the defendant had deposited the amount which he claimed as the balance of the purchase price. There was no provision in the agreement entitling him to do so and in view of the serious defects in the building he was not then or now entitled to payment of the balance of the purchase price or to demand security in respect thereof. His refusal and subsequent departure from the site placed him in clear breach entitling the defendant to cancel.

The question remains whether the plaintiff is entitled to payment of the amounts claimed in the alternative. The law pertinence to this question is discussed and clarified in BK Tooling (Edms) Bpk v Scope

Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A), from the headnote of which this extract is instructive

If the contractor does not succeed in convincing the Court that the has fully complied with his side (of the contract), and he wishes then to claim a reduced contract price, he will have to prove:

(i) that the employer is utilising the incomplete performance;

(ii) that circumstances exist making it equitable for the Court to
exercise its discretion in his favour;

(iii) what the reduced contract price should be, ie what it will cost to bring his performance in order for the purpose of determining by how much the contract price should be reduced.

In regard to possible consequential damages (caused by the shortcoming) already suffered and possible damages as the result of the mora of the contractor, the onus of proof will, on the grounds of general principles, still have to rest on the employer. The employer will, probably, have to institute a counter-claim.

The facts in this case do not permit me to exercise any discretion in favour of the plaintiff. Although the employer is utilising the incomplete performance there is no evidence to show that the cost of rectifying the defects would be and it is not possible to determine by how much the contract price could be reduced. The evidence moreover indicates that it was the Plaintiff who was in breach and who abandoned the works before completion and rectification.

The plaintiff must therefore fail in both the main and alternative claims.

The counterclaims were not substantiated by sufficient evidence to enable me to determine the amount if any to be awarded to the defendant. Although the defendant testified to having purchased building supplies and materials and produced a schedule thereof there is nothing to show what he actually did or whether what he did was necessary to remedy the effects and to bring the property to a condition where it approximated to what it should have been had the contract been fulfilled and there is nothing to indicate that the amounts specified were reasonable. It is true that John Munday ventured out of his field of expertise and suggested that the costs of doing the remedial work which he had mentioned in his report would be something in the vicinity of R200 000,00. This, however, was merely a guess and admittedly not an expert opinion.

The defendant's counsel suggested that 'it was possible to take a robust approach and do the best I could". Such an approach can only be adopted where the party claiming damages has done whatever it could to place evidence before the court on which such an award could be made.

The robust approach set out in Hersman v Shapirol926 TPD 367 by Stratford J, with whom Tindall J concurred (at 379 - 380), is this:

Monetary damage having been suffered, it is necessary for the Court to assess the amount and make the best use it can of the evidence before it. There are cases where the

assessment by the Court is very little more than an estimate; but even so, if it is certain that pecuniary damage has I been suffered, the Court is bound to award damages. It is not so bound in the case where evidence is available to the plaintiff which he has not produced; in those circumstances the Court is justified in giving, and does give, absolution from the instance. But where the best evidence available has been produced, though it is not entirely of a conclusive character and does not permit of a mathematical calculation of the damages suffered, still, if it is the best evidence available, the Court must use it and arrive at a conclusion based upon it.

In this case however the defendant has not properly described quantified and costed the work which he did and shown it on expert evidence to have been reasonable and necessary to place the dwelling in the condition it should have been had the contract been properly performed.

There is also the claim of R40 000,00 for accommodation. There is nothing to show why the house could not be occupied for that period and that the rental actually spent was both reasonable and necessary. Because of this the defendant cannot succeed on his counterclaim.

The outcome therefore is that the plaintiffs claim is dismissed and that the plaintiff is absolved from the instance in respect of the defendant's counterclaim.

As to costs neither party has succeeded in respect of their claims and accordingly the unsuccessful party will have to bear the costs of the successful party in respect thereof.

I therefore order:

1. Plaintiffs claim is dismissed with costs;

2. Plaintiff is absolved from the instance with costs in respect of the defendant's counterclaim.

Delivered, and handed down in open court today, 23^rd February 2009

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