Court denies DOI MEC's appeal over R10.4 million judgment in Delft project

The provincial Department of Infrastructure (DOI) MEC has suffered another defeat in court, as the Western Cape High Court dismissed their appeal against a R10.4 million judgment awarded to Tempani Construction.

This ruling marks a significant setback in the department's protracted legal battle over payment for the Delft community day centre project, which was completed almost six years ago.

The Western Cape High Court also denied the MEC’s request to appeal the entire judgment and order issued on September 15.

The court order was made, following an arbitration process, in which the MEC was ordered to pay the construction company the sum of R10,420,365.61 plus VAT. The project was completed in August 2017. 

Despite an adjudicator's determination that payment was due, the MEC has repeatedly refused to honour the debt. 

The MEC, however, maintained the argument that the parties had agreed to a two-tiered dispute mechanism, allegedly through an addendum contract that included an adjudication and arbitration process.

However, Tempani Construction never signed this addendum and only agreed to an adjudication mechanism in terms of Rule 6.2.2 of the Joint Building Contracts Committee (JBCC) Adjudication Rules.

Consequently, the court determined that an unsigned addendum to the building contract was invalid due to it not being signed by both parties. Despite receiving a demand, the department has not made payment of the amount due.

During litigation, it was evident that the addendum contract on which the MEC relied was only signed on behalf of the minister. 

Reacting to the judgment, counsel for Tempani, Sean Pienaar SC at Enderstein Malumbete Inc, said the MEC refused to make payment of the amount due to their client, and demanded that the matter be revisited. This, while the MEC refused to make payment despite the existence of a rule in the JBCC Adjudication Rules.

“On  November 25 (yesterday), I wrote an email to the State Attorney advising that they have no excuse not to make payment, even in the event of an appeal, and that Tempani intends to bring an application to enforce payment in terms of Section 18 of the Superior Court’s Act", said Pienaar SC.

Enquiries to the MEC were acknowledged but could not be answered by the deadline.

Judge Constance Noluthando Nziweni, referring to her previous court order, said that in Tempani’s main application, the company sought relief on the grounds that the parties had agreed to resolve their disputes only by an adjudication mechanism.

“The relief that is sought by (Tempani) is directed squarely towards making the adjudicator’s award final and a definite determination upon the subject between the parties,” Judge Nziweni emphasised. 

Judge Nziweni submitted that if a two-tiered system were the standard or default position, then it would not have been necessary to draft the arbitration addendum in the first place. 

“The assertion that this court altered the default two-tiered system of dispute resolution by making the adjudication award final is factually incorrect."

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