THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case no: 379/2010

In the matter between:

GROUP FIVE CONSTRUCTION (PTY) LIMITED
Appellant

and

THE MINISTER OF WATER AFFAIRS AND FORESTRY
Respondent

Neutral citation:
GROUP FIVE v MINISTER WATER AFFAIRS

(379/10) [2011] ZASCA 17 (14 March 2011)

Coram:

HARMS DP, STREICHER, BRAND, SHONGWE and

THERON JJA

Heard:

1 MARCH 2011

Delivered:

14 MARCH 2011

SUMMARY: Building Contract – claims for additional payment or

compensation – special plea of prescription

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: North Gauteng High Court (Pretoria) (Southwood J sitting as court
of first instance).

The appeal is dismissed with costs including costs of two counsel.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

SHONGWE  JA  (HARMS DP, STREICHER, BRAND  and THERON JJA
concurring):

[1] The appellant, Group Five Construction (Pty) Limited, instituted a claim
against the respondent, the Minister of Water Affairs and Forestry, for moneys
allegedly due in terms of a contract for the construction of the Injaka dam and
appurtenant works for the Sabie River Government Water Scheme. Four of the
claims arose from claims submitted by the appellant in terms of clause 51 of the
contract, which entitled the appellant to claim for additional payment or
compensation in prescribed circumstances. The fifth claim, claim E, did not arise for
adjudication.

[2] The respondent raised a special plea of prescription and the court below
decided to hear this issue separately. The parties placed a list of agreed facts before
the court, and led evidence. However, the validity of the special plea depended in the
main on an interpretation of the rather complicated contract which had to be read
with two amendments agreed to between the parties. These amendments affected
clause 61 of the main contract and provided for a new dispute resolution mechanism
of submitting disputes to a dispute review board, in lieu of mediation, which was
obliged, during the course of the contract, to attempt to settle disputes that arose
between the contractor and the employer pursuant to the rejection by the engineer of
claims submitted.

[3] The amendment provided in summary that the board had to make
recommendations to the parties. These became final and binding on the parties if
they were accepted by them in writing. To the extent that a recommendation was not
acceptable in writing by the parties, either party was entitled to refer the unresolved
matter to court provided that the particular party had within 60 days, given written
notice of its intention to do so. Otherwise the decision of the engineer was to become
final and binding.

[4] Therefore the crisp issue between the parties was whether the appellant’s
claims, which were the subject of this process, became ‘due’ at the stage when the
said written notice was given or whether these claims only became due after
completion of the ‘works’ as defined in the contract (as contended by the appellant).
The relevance of the issue is to be found in section 12(1) of the Prescription Act 68
of 1969, which provides that prescription commences ‘to run as soon as the debt is
due’. It is common cause that if the appellant’s causes of action were ripe and
complete when the notices were given these claims had clearly become prescribed.

[5] Southwood J, in a detailed and thorough judgment, reported as Group Five
Construction (Pty) Limited v Minister of Water Affairs & Forestry (39161/05) [2010]
ZAGPPHC 36 (5 May 2010), came to the conclusion that the claims indeed became
prescribed. In spite of a valiant attempt by the appellant’s counsel to convince us
otherwise, he missed the point in that he argued that the claims were based on an
estimate and consequently represented an advance and not a complete claim ‘of
which the debtor is under an obligation to perform immediately’. We are satisfied that
Southwood J’s judgment is unassailable and that the argument does not warrant
another judgment consisting of the same reasons albeit in different words.

[6] The appeal is dismissed with costs including costs of two counsel.

_________________

J SHONGWE

JUDGE OF APPEAL

APPEARANCES:

For Appellant:

G D Harpur SC

N D Lange

Instructed by:

Garlicke & Bousfield Inc

UMHLANGA ROCKS

Claude Reid Inc

BLOEMFONTEIN

For  Respondents:

R J Raath SC

P M Mtshaulana SC

Instructed by:

The State Attorney

PRETORIA

The State Attorney

BLOEMFONTEIN

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
14 March 2011

Status:
Immediate

Please note that the media summary is intended for the benefit of
the media and does not form part of the judgment of the Supreme
Court of Appeal.

GROUP FIVE v MINISTER WATER AFFAIRS

The Supreme Court of Appeal today dismissed an appeal by Group Five
Construction (Pty) Ltd against a judgment of he North Gauteng High Court
(Pretoria) upholding a special plea of prescription.

Group Five had claimed certain additional moneys against the Minister of
Water Affairs and Forestry due in terms of a contract for the construction of
the Injaka Dam for the Sabie River Government Water Scheme. Four of the
claims arose from claims submitted by Group Five in terms of clause 51 of the
contract, which entitled Group Five to claim additional payment or
compensation in prescribed circumstances.

The Minister raised a special plea of prescription which was upheld by the
Court below. The validity of the special plea depended in the main on an
interpretatrion of the rather complicated contract which had to be read with
two amendments agreed to between the parties. These amendments affected
clause 61 of the main contract and provided for a new dispute resolution
mechanism by using a dispute review board in lieu of mediation pursuant to
the rejection by the engineer of claims submitted.

The terms of the new dispute resolution mechanism were that the board had
to make a recommendation to the parties. These became final and binding on
the parties if accepted in writing. However, if not, either party was entitled to
refer the unresolved matter to court. Otherwise the decision of the engineer
was to become final and binding.

Group Five contended that the claims were due at the completion of the
construction, wherweas the Minister was of the view that the claims were due
upon notice by either party refering the dispute to court. Section 12(1) of the
Prtescription Act 68 of 1969 provides that prescription commences  ‘to run as
soon as the debt is due’. It is common cause that if Group Five’s causes of
action were ripe and complete when the notices were given these claims had
clearly become prescribed.

This court fully associated itself with the detailed judgment of the court below
and did not deem it necessary to add or subtract to the said judgment.