550. MSC Depots (Pty) Ltd v WK Construction (Pty) Ltd, Wynford’s Civil and Development CC 2011 (2) SA 417 (ECP); [2011] ZA SCA 115

Contractor cannot be in breach of clause 15.3 of the JBCC on grounds of defective performance where it is not given the opportunity to remedy such defective performance.

The Facts

The Plaintiff shipping company contracted the Defendant paving contractor to provide paving for a container depot.

The contract was on an unidentified version of the JBCC 2000 Principal Building Contract.

In issue was the effect of clause 15.3 which provided as follows: “On being given possession of the site, the contractor shall commence the works within the period stated in the schedule and proceed with due skill, diligence, regularity and expedition and bring the works to … [final completion in terms of 26.0 (15.3.4)]

When the works had reached an advanced state of completion, deflections in the paving appeared.

Both the employer and contractor engaged independent structural engineers who provided reports identifying defects in the design.

Notwithstanding this, the employer caused an instruction to be given by the principal agent to desist from continuing remedial work which had begun.

Also, the employer failed to pay the latest payment certificate.

The contractor issued a notice of cancellation based on four grounds, including failure to pay and preventing the principal agent from exercising his independent judgment, the latter ground provided for in clause 38.1.7.

The employer claimed that the notice of cancellation was repudiatory and cancelled itself based on a breach of clause 15.3.

Findings

Judge Dayalin Chetty gave absolution from the instance on the employer’s claim for damages based on two grounds: it had failed to provide sufficient evidence of defective performance and it was precluded from relying on clause 15.3 where the contractor was not given the opportunity of remedy in defects.

He held that clause 15.3 had to be read with clause 17 giving the principal agent the power to issue instructions to remedy defects.

The judge’s decision was confirmed by the SCA (per in Mpati P, Brand, Lewis, Snyders and Majiedt JJA, concurring).

Commentary

This is an important case, defining as it does the scope of clause 15.3.

The clause appears to be designed to deal with two situations: firstly, where the contractor simply stops working, and secondly, where it has demonstrated incompetence or incapacity to carry out the works with due diligence and skill.

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