Ministry of Home Affairs and Others v Beauty Build Construction (Pty) Ltd (08/11) [2011] SZSC 13 (31 May 2011);

 

IN THE SUPREME COURT OF SWAZILAND

 

 

HELD AT MBABANE

                                                  CIVIL APPEAL No. 08/2011

 

In the matter between

 

 

MINISTRY OF HOME AFFAIRS        FIRST APPELLANT

 

THE ATTORNEY GENERAL              SECOND APPELLANT

 

THE ACCOUNTANT GENERAL                 THIRD APPELLANT

 

AND

 

BEAUTY BUILD CONSTRUCTION

 

(PTY) LTD                                          RESPONDENT

 

 

 

CORAM            :       RAMODIBEDI, CJ

                                FOXCROFT, JA

DR. S. TWUM, JA

                                                       

HEARD            :       12 MAY 2011

 

DELIVERED     :       31 MAY 2011

SUMMARY

 

Contract – performance – Respondent engaged by the first appellant in a written agreement to revamp certain defects at Matsapha International Airport – The respondent duly performing the works as agreed and submitting an invoice in excess of E7 million – After negotiating a reduction the parties settling on E5,130,223.54 – The respondents subsequently engaging two independent surveyors who arrived at two different prices after evaluating the work done – The Tender Board approving payment of the higher of the two amounts, namely, E3,122,537.40 which was subsequently paid to the respondent, thus leaving a balance of E2,007,686.14 from the agreed amount of E5,130,223.54 – The High Court granting judgment in favour of the respondent in the sum of E2,007,686.14, interest plus costs – On appeal the respondents’ reliance on compromise rejected – The appeal dismissed with costs.

 

 

RAMODIBEDI, CJ

 

[1]    By notice of motion filed in the High Court on 19 March 2009, the present respondent, as applicant, claimed relief against the appellants in the following terms quoted verbatim:-

 

“2.1   Directing the 3^rd Respondent to pay to the Applicant the sum of R5,130,223.54.

                  

• Interest at Prime plus 10 from 20^th October 2008 to date of final payment.

 

• Costs of Suit.”

 

 

[2]    After hearing oral evidence in the matter the learned Judge a quo (Ota J) made a finding that the appellants had already paid a sum of E3,122,537.40 to the respondent.  Hence the Judge ordered the appellants to pay the balance of E2,007,686.14 to the respondent.  This appeal is directed against that order.

 

[3]    The background facts to the dispute between the parties are hardly contested.  By letter, annexure “BM1”, dated 20 August 2008, the Acting Airport Manager at Matsapha International Airport Directorate of Civil Aviation engaged the services of the respondent construction company in the following terms:-

 

                “The Director

                   Beauty Build Construction

                   P.O. Box 14

                   EVENI

 

                   ENGAGEMENT OF BEAUTY BUILD CONSTRUCTION

         

I am directed by the Principal Secretary of the Ministry of Home Affairs to immediately engage you to attend to the defects of the following Airport structures

 

1. Terminal Building
2. Standard VIP Lounge
3. Royal VIP Lounge

 

Please make [sure] that you meet the 40/40 Double Celebrations deadline.

 

An official authority by the Principal Secretary will follow.

 

(signed)

JABU NGUBANE

ACTING AIRPORT MANAGER.”

 

[4]    The response by the present respondent was quick.  Not only did it accept the offer in question but it is common cause that it duly performed the works as directed.   Commendably, it ensured that the deadline of the 40/40 National Double Celebrations was met.  This, it did by working both day and night shifts.   Thereafter, it issued an invoice to the first respondent in excess of E7 million on 20 October 2008.

 

[5]    It is common cause that, with the help of private and professional surveyors, the first respondent successfully negotiated a reduced amount of E5,130,233.54.

 

[6]    It is noteworthy to record that the first respondent ignored correspondence from the respondent, notably letters annexures “BM3” and “BM4” dated 22 October 2008 and 29 October 2008 respectively in terms of which the respondent demanded payment for the work done.

 

[7]    On 26 January 2009, the Principal Secretary of the first appellant Ministry of Home Affairs (“Shongwe”) addressed the following letter to his counterpart in the Ministry of Finance.  The letter is reproduced in full because of its singular importance in the determination of the matter:-

 

                “Principal Secretary

                   Ministry of Finance

                   Mbabane

                   Swaziland

 

                   Dear Sir,

 

RE: APPLICATION FOR A TENDER BOARD AUTHORITY TO PAY BEAUTY BUILD CONSTRUCTION FOR MAINTENANCE WORK DONE AT MATSAPHA AIRPORT DURING THE 40^TH NATIONAL DOUBLE CELEBRATIONS

 

Authority for a tender board waiver as per stores regulation part 1 section 409 is sought to pay Beauty Build Construction for maintenance work carried out at the Matsapha Airport in preparation for the 40^th National Double Celebrations.

 

The total amount involved as per the attached invoice is E5,130,223.54.

 

Chronology of Events

                  

1. In doing a stock take of what was done and not done, two weeks before the celebrations, the Principal Secretary discovered that the Matsapha airport was not in a state to receive guests of the 40/40 status.
2. He, with the assistance of the Airport Manager, appointed Beauty Build Construction to do some maintenance work there so that by the time the state guests arrived, the place would be in an acceptable state.
3. Upon completion of the work, Beauty Build submitted an invoice in excess of E7,000,000.00.
4. With the help of private and professional Quantity Surveyors, the Principal Secretary was able to negotiate the costs down to the invoiced amount.

 

This letter is therefore, to request the Central Tender Board to authorize the payment to Beauty Build Construction, the amount of E5,130,223.54.

 

Funds are available under the 40^th National Double Celebrations to pay this invoice.

                  

                  

(signed)

M.M.L. SHONGWE

PRINCIPAL SECRETARY.”

It is not in dispute that Shongwe was the controlling officer of the first appellant Ministry.  As such he was vested with power to bind the Ministry.

 

[8]    On 3 February 2009 Shongwe addressed another letter, annexure “BM6” to his counterpart in the Ministry of Finance and recorded the following:-

 

 

“RE: RENOVATIONS TO MATSAPHA INTERNATIONAL AIRPORT PHASE 1

 

I refer to [the] above subject matter and I am pleased to inform you that after negotiations with the Contractor, we have been able to reach the now quoted amount of E5,130.223.54 compared to the over E7,000.000.00 originally required.

 

I therefore forward [the] attached claim for your necessary action.

 

(signed)

M.M.L. SHONGWE

PRINCIPAL SECRETARY.”

 

[9]    In these circumstances it is plain, as it seems to me, that the appellants simply had no genuine defence to respondent’s claim after successfully negotiating and agreeing to a reduced price.  Nor could they justifiably challenge the quality of the work done.  In this regard it shall suffice merely to quote paragraph 8 of a letter written by the Acting Airport Manager to Shongwe dated 13 March 2009. He commended the work done in the following terms:-

 

“8.     May I take this opportunity to congratulate the Contractor for a professional job and execution of works under abnormal conditions day and night including weekends and public holidays. Indeed Matsapha Airport has been given a new look.”

 

[10]  In this Court Mr. Khuluse for the appellants tried manfully to urge us to accept that this was a case of compromise.  He developed the argument by suggesting that the original claim in excess of E7 million created a mischief.  The agreed reduction of E5,130,223.54 failed, so he argued, to cure the mischief in question since this amount was still too high.  I reject this submission which is, in my view, not only untenable but is also contrived in the circumstances of this case as I shall demonstrate shortly.

 

[11]  Compromise is the settlement by agreement of disputed obligations whether contractual or otherwise.   See The Law of Contract in South Africa:  RH Christie, 5^th Edition at pages 455-456.  This is not such a case.   The appellants are not disputing their obligation to pay.   What has happened here is simple negotiation between the parties to reduce the price.  In making the payment of E3,122,537.40 referred to in paragraph [2] above, the respondents did not say that this was an integral part of their offer to compromise. Indeed compromise was neither pleaded as a defence nor was it proved at all.  It was never the respondents’ case all along.  On the contrary, the respondents’ case has consistently been one of an attempt to reduce the price while obviously admitting liability.  In principle, it is in particular wrong to direct the attention of the other party to one issue and then attempt to canvas another.  See Imprefet (Pty) Ltd v National Transport Commission 1993 (3) SA 94 (A) at 107.

 

[12]  It follows in these circumstances that the appeal must fail.  It is accordingly dismissed with costs.

 

                                                                                                                                                                                                                                                ________________________                                                                M.M. RAMODIBEDI

                                                CHIEF JUSTICE

 

 

I agree                                     _________________________

                                                J.G. FOXCROFT

                                                JUSTICE OF APPEAL    

 

 

 

 

I agree                                     _________________________

                                                DR. S. TWUM

                                                JUSTICE OF APPEAL

 

For Appellants         :       Mr. S. Khuluse

For Respondent       :       Mr. M. Simelane