The case of Edward L Bateman Ltd vs C A Brand Projects (Pty) Ltd 1995 (4) SA 128 (T), is of interest to both legal practitioners as well as to parties involved in the construction/engineering industry.
The judgment is that of the full bench of the Transvaal Provincial Division on appeal from a judgment of a single judge. Judgment was handed down by de Villiers J. with whom Spoelstra J. and Daniels J. concurred. The judgment clearly and concisely sets out the legal, procedural and contractual requirements which a contractor claiming in terms of a contract must follow.
The court held that if the contractual procedures are not strictly adhered to, the contractor will not have a claim and that compliance with the provisions of the claims procedure of a particular contract must be pleaded clearly, failing which the essential averments necessary in order to disclose a cause of action will not have been made.
In this case the contractor was the plaintiff and the employer the defendant.
Plaintiff’s claims arose from a building contract in terms of which the plaintiff was to perform certain civil works. The building contract obliged the plaintiff to perform the civil works for a fly ash silo and auxiliary works in connection with a fly ash separation plant.
It was alleged in the pleadings that during the performance of the works the defendant failed timeously to provide the plaintiff with the required construction drawings, furnished the plaintiff with incorrect drawings which subsequently required rectification, changed the design in certain instances, issued instructions which revoked or varied previously issued instructions, and instructed the plaintiff from time to time to accelerate the performance of the works. As a consequence of these factors, the plaintiff claimed that the works were extensively increased in value and that it required additional time for completion. By reason of the increase in the value of and the time required for completion of the works, the delays in the performance of the works and the acceleration of the works by the plaintiff, it claimed that it became entitled, inter alia, to payment for escalation during the contract as well as the extended contract period, the nett increased costs in respect of the prime cost allowable, and company overhead and profit.
In dealing with various clauses of the contract prescribing the procedures which the contractor had to follow the court held that if there was non-compliance with such procedures, the contractor would not have a claim. The relevant clause obliged the contractor to give written notice within 7 days after the happening of any event which the contractor believed might give rise to a claim for an increase in the contract price and in the time for completion. This 7 day notification was thereafter to be followed within 28 days, or any extended period agreed to in writing by the employer, by the contractor furnishing the employer with a statement supported by a detailed estimate of the claim and change in contract price and time for completion occasioned thereby. The clause clearly stated that the employer would not be liable for and that the contractor waived any claims or potential claims which the contractor knew or should have known about and which had not been notified by the contractor to the employer in accordance with the relevant clause. In commenting on that clause, de Villiers J stated:
“In my view these provisions again underline the fact that it is an essential element of plaintiff’s claim that he should have complied with the provisions of clause 23. Unless he does so, such dispute cannot be decided by arbitration or by the courts.”
In summary, it is essential for contractors to comply strictly with contractual provisions which prescribe a mechanism for the founding of any claims. Contractors should therefore keep a tight reign on the administration of a contract and be vigilant in ensuring that procedures prescribed by a particular contract are scrupulously followed. In addition, compliance with such provisions of the contract must be specifically pleaded to ensure that the pleadings contain averments essential to disclose a cause of action.