JOOB JOOB INVESTMENTS (PTY) LTD v STOCKS MAVUNDL... https://0-jutastat-juta-co-za.ultmillen.ul.ac.za/nxt/print.asp?NXTScrip...

Source:
South African Law Reports, The (1947 to date)/CHRONOLOGICAL LISTING OF CASES – January 1947 to
October 2023/2009/Volume 5: 1 - 343 (September)/JOOB JOOB INVESTMENTS (PTY) LTD v STOCKS
MAVUNDLA ZEK JOINT VENTURE 2009 (5) SA 1 (SCA)

JOOB JOOB INVESTMENTS (PTY) LTD v STOCKS MAVUNDLA ZEK JOINT VENTURE
2009 (5) SA 1 (SCA)
2009 (5) SA p1

Citation 2009 (5) SA 1 (SCA)

Case No 161/08

Court Supreme Court of Appeal

Judge Harms DP, Navsa JA, Brand JA, Mhlantla JA and Bosielo AJA

Heard March 16, 2009

Judgment March 27, 2009

Counsel PMM Lane SC for the appellant.

AK Kissoon Singh SC (with MW Collins) for the respondent.

Annotations Link to Case Annotations

Flynote : Sleutelwoorde
Engineering and construction law - Building contract - Architect's certificate - Claim for
summary judgment on certificate - Both final and interim certificate qualifying as liquid
documents since they embody obligation on part of employer to pay specified amount and
give rise to new cause of C action subject to terms of contract - Contractor entitled to claim
provisional sentence or summary judgment on certificate.
Engineering and construction law - Building contract - Architect's certificate - Interim
certificate - Nature - Whether liquid document - Certificate embodying obligation on part of
employer to pay specified amount and D gives rise to new cause of action subject to terms of
contract - Interim certificate qualifying as liquid document - Contractor entitled to claim
provisional sentence or summary judgment on interim architect's certificate.
Engineering and construction law - Building contract - Interpretation - Certificate of
damages - Validity - On proper construction of contract, principal E agent being not only
entitled but obliged, in appropriate circumstances, to certify damages.
Practice - Judgments and orders - Summary judgment - Generally - Necessary to discard
labels of 'extraordinary' and 'drastic' and to concentrate on proper application of rule. F
Headnote : Kopnota
The parties concluded a written agreement in terms of which the respondent, Stocks (the
contractor), a partnership conducting the business of a building contractor, undertook to build
a resort hotel for the appellant company, JJ (the employer). The agreement provided, inter
alia, for interim certificates to be issued by the principal agent appointed by JJ, as well as a
final G

2009 (5) SA p2

A certificate in respect of work completed as per the schedule of works. In respect of work
completed, the principal agent issued four certificates, numbered 9 to 12. JJ refused to pay

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after the certificates had been presented. Stocks cancelled the agreement and instituted
action against JJ in the High Court in which it claimed payment of the four amounts reflected
in the certificates. After entry of appearance to defend Stocks B applied for summary
judgment. JJ opposed the grant of summary judgment, raising the defences that: (i) in
respect of certificate 10, it was not due and payable as Stocks had failed to deliver a tax
invoice as required by clause 31.9 of the agreement. The date of valuation of the work done
and the materials on site set out in the certificate differed from the date of valuation that
appeared in the tax invoice. Furthermore, the tax invoice predated the C payment certificate.
Thus clause 31.9 had not been complied with; and (ii) certificates 11 and 12 related to
damages and, on a proper construction of the agreement, the agent's mandate did not extend
to certification of damages, ie because the certificates were for damages, they were illiquid. In
respect of certificate 10, the High Court found that there was no requirement in the
agreement that a tax invoice had to include a date of valuation, D that all that was required in
terms of the agreement was a tax invoice for the amount due. The earlier date of the tax
invoice was therefore no bar to recovering the amount set out in the certificate. In respect of
the second defence, the High Court held that JJ had not shown that the certification of
damages was not in accordance with the agreement. In the result, the High E Court dismissed
JJ's defences and granted summary judgment on all three certificates. JJ appealed against
that decision to the Supreme Court of Appeal. On appeal, the submissions were made on
behalf of JJ that: (iii) after cancellation, the principal agent was limited to preparing a final
account and final payment certificate and there was thus no room for an interim certificate
such as certificate 11; and (iv) even in the absence of a F bona fide defence, the High Court
ought, in the exercise of its discretion, to have refused summary judgment. In the latter
regard, the appeal court was asked to bear in mind that summary judgment was a remedy of
an 'extraordinary and drastic nature', based on 'the supposition that the plaintiff's case is
unimpeachable and that the defendant's defence is bogus or bad in law'.
G Held, that it was very difficult to discern the essence of any sustainable defence to Stocks'
claims from the affidavit opposing summary judgment. There were diverse references to
clauses in the agreement, to the non-correlation between the dates of the tax certificates, and
the certification by the agent. What was conspicuously absent was the substance of a triable
defence. (Paragraph [15] at 7C - D.)
H Held, further, as to certificate 10, that JJ's main contentions were without merit. The
agreement did not provide for the tax invoice to follow any particular format nor did it
prescribe what information it had to contain. There was a direct correlation between certificate
10 and the tax invoice in question. Clause 31.9 was complied with and the court below could
not be faulted in that conclusion. (Paragraph [20] at 8B - C.)
I Held, further, as to certificate 11, that the submission on behalf of JJ was fallacious.
Certificate 11 was in accordance with clause 38.5.7 of the agreement. (Paragraph [21] at 8D.)
Held, further, as to certificates 11 and 12, that JJ's submission was without foundation. On a
proper construction of the agreement, it was clear that the principal agent was not only
entitled but was obliged, in appropriate J circumstances, to certify damages. (Paragraphs [22]
- [23] at 8H - 9D.)

2009 (5) SA p3

Held, further, that a final payment certificate had to be treated as a liquid A document
because it was issued by the employer's agent, with the consequence that the employer was
in the same position it would have been in if it had itself signed an acknowledgment of debt in
favour of the contractor. Similar reasoning applied to interim certificates. The certificate thus
embodied an obligation on the part of the employer to pay the amount contained therein and
gave rise to a new cause of action subject to the terms B of the contract. It was regarded as
the equivalent of cash. The certificates in question all fell within this ambit. Stocks therefore
held three liquid documents, the equivalent of acknowledgments of debt. It could have
proceeded to obtain provisional sentence on them but chose to apply for summary judgment.
(Paragraphs [27] - [28] at 10E - 11A.)
Held, further, that summary judgment procedure was not intended to deprive a C defendant
with a triable issue or a sustainable defence of her/his day in court. After almost a century of
successful application in our courts, summary judgment proceedings could hardly continue to
be described as 'extraordinary'. Our courts, at both first instance and appellate level, have
during that time rightly been trusted to ensure that a defendant with a triable issue was not
shut out. (Paragraph [32] at 11H - 12B.) D

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Held, further, that summary judgment proceedings terrified only those who had no defence,
and that the time had perhaps come to discard those labels such as 'extraordinary' and
'drastic' and rather to concentrate on the proper application of the rule. (Paragraph [33] at
12D.)
Held, further, that no sustainable defence had been put up by JJ. Judgment for Stocks in the
court below was fully justified and the court had correctly E refused to exercise its discretion
in favour of JJ. (Paragraph [34] at 12E - G.) Appeal dismissed.
Cases Considered
Annotations
Reported cases
Southern Africa F

Harrowsmith v Ceres Flats (Pty) Ltd 1979 (2) SA 722 (T): referred to
Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A): dictum at 425G - 426E approved
and applied
Meek v Kruger 1958 (3) SA 154 (T): referred to G

Ocean Diners (Pty) Ltd v Golden Hill Construction CC 1993 (3) SA 331 (A): dictum at 340E
applied
Randcon (Natal) (Pty) Ltd v Florida Twin Estates (Pty) Ltd 1973 (4) SA 181 (D): applied
Rich and Others v Lagerwey 1974 (4) SA 748 (A): referred to
Schoeman v Newmark Ltd 1919 CPD 55: referred to H

Tesven CC and Another v South African Bank of Athens 2000 (1) SA 268 (SCA) ([1999] 4 All
SA 396): referred to
Van der Walt v Eiendomsreg (Edms) Bpk 1986 (2) SA 461 (T): referred to.
Foreign
Canada
Progressive Construction Ltd v Newton 117 DLR (3d) 591 (1980 CanLII 493 (BC SC)): I
referred to.
England
John Wallingford v The Directors of The Mutual Society (1880) 5 AC 685 (HL): referred to
Jones v Stone 1894 AC 122: referred to. J

2009 (5) SA p4

NAVSA JA
A United States of America
Sartor v Arkansas Natural Gas Corp 321 US 620 (1944): referred to.
Case Information
Appeal from a decision in the Durban and Coast Local Division (Gorven AJ). The facts appear
from the judgment of Navsa JA.
B PMM Lane SC for the appellant.
AK Kissoon Singh SC (with MW Collins) for the respondent.
Cur adv vult.
C Postea (March 27).
Judgment
Navsa JA:
[1] This is an appeal against the grant of summary judgment in the Durban High Court
(Gorven AJ). The background is set out hereafter.
D [2] During 2004 the parties concluded a written agreement in terms of which the

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respondent, a partnership conducting the business of a building contractor, undertook to build

a resort hotel at Ocean View site, Zimbali Coastal Forest Resort, Ballito, for the appellant
company. I shall hereafter refer to the appellant as JJ and to the respondent as Stocks. E
These parties are referred to in the agreement as the contractor and employer, respectively.
[3] The terms of the agreement are embodied in a standard contract recommended by the
Joint Building Contracts Committee (JBCC).1 Clause 5.1 of the agreement provides that JJ
shall appoint a principal F agent2 with full authority to act on its behalf in terms of the
agreement.3 Clause 5.3 goes further and states that only the agent has authority to bind JJ.

2009 (5) SA p5

NAVSA JA
[4] The agreement provides for interim certificates to be issued by the A principal agent as
well as a final certificate in respect of work completed as per the schedule of works.4 It is
common cause that Stocks cancelled the contract on 26 September 2005. Stocks' entitlement
to cancel the contract is not in issue.5 In respect of work completed the principal agent issued
four certificates. They are as follows: B
(a) 1 August 2005 (certificate 9) - in terms of which it was certified that the amount
due to Stocks was R129 100,48.
(b) 7 September 2005 (certificate 10) - certifying an amount of C R2 704 425,78.
(c) 4 August 2006 (certificate 11) - for an amount of R14 568 177,68.
(d) 6 November 2006 (certificate 12) - reflecting an amount of R9 690 000. D

2009 (5) SA p6
NAVSA JA
A I will refer to the certificates by the certificate numbers that appear above.
[5] Clause 31.9 of the agreement states:
'The employer shall pay to the contractor the amount certified within seven calendar days of the date of
issue of the payment certificate. B Payment shall be subject to the contractor giving the employer a tax invoice
for the amount due.'

[6] JJ refused to pay after the certificates referred to in para [4] had been presented. On 8
December 2006 Stocks instituted action against JJ in the Durban High Court in which it
claimed payment of the four amounts C reflected in those certificates.
[7] JJ entered an appearance to defend. On 29 January 2007, in terms of Uniform Rule 32,
Stocks brought an application for summary judgment which was opposed by JJ. The summary
judgment application was heard on 6 September 2007, and on 25 September 2007 judgment
was granted D in favour of Stocks in the amounts set out in certificates 10, 11 and 12, with
interest thereon a tempore morae. JJ was ordered to pay the costs of the action and the
application for summary judgment in respect of the three claims, on a scale as between
attorney and own client, including the costs consequent upon the employment by Stocks of
two counsel.
E [8] Gorven AJ dealt, inter alia, with two of JJ's defences which are relevant to this appeal in
some detail. They are set out below.
[9] First, in respect of certificate 10, that it was not due and payable as Stocks had failed to
deliver a tax invoice as required by clause 31.9 of the F agreement. It was pointed out on
behalf of JJ that the date of valuation of the work done and the materials on site set out in the
certificate (22 July 2005), differed from the date of valuation (15 August 2005) that appears
in the tax invoice. Furthermore, the tax invoice (6 September 2005) predated the payment
certificate (7 September 2005). Thus, it was submitted, clause 31.9 had not been complied
with.
G [10] Second, certificates 11 and 12 related to damages and on a proper construction of the
agreement, the agent's mandate did not extend to certification of damages. It was contended
that because the certificates were for damages, they were illiquid. Allied to this defence was
the contention that value-added tax (VAT) was included in the certificates H and that such tax
was not payable on damages. This latter contention was not, however, persisted in before us.
[11] Insofar as certificate 9 was concerned, counsel representing Stocks agreed before Gorven
AJ, that summary judgment should be refused as the amount in the payment certificate
differed from the amount reflected I in the tax invoice. That certificate is not in issue in this
appeal.

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[12] In respect of certificate 10, Gorven AJ found that there was no requirement in the
agreement that a tax invoice must include a date of valuation. He held that all that was
required in terms of the agreement was a tax invoice for the amount due. The earlier date of
the tax invoice J was therefore no bar to recovering the amount set out in the certificate.

2009 (5) SA p7
NAVSA JA
[13] In respect of the second defence, the court below held that JJ had A not shown that the
certification of damages was not in accordance with the agreement.
[14] On 19 October 2007 the court below refused JJ leave to appeal in respect of its order in
relation to certificate 10. Gorven AJ granted leave in respect of the orders relating to
certificates 11 and 12, but restricted B it to the question of the validity of the inclusion of VAT
in the amounts certified. On 11 March 2008 this court granted JJ leave to appeal to it against
the whole of the judgment.
[15] In its affidavit resisting summary judgment, JJ contended that Stocks was precluded from
instituting action because of an arbitration C clause in the agreement. Gorven AJ dealt with
this defence tangentially. It is necessary, at the outset, to note that it is very difficult to
discern, from the affidavit opposing summary judgment, the essence of any sustainable
defence to Stocks' claims. There are diverse references to clauses in the agreement, to the
non-correlation between the dates of the D tax certificates and the certification by the agent.
What is conspicuously absent is the substance of a triable defence.
[16] I proceed to deal first with JJ's defence that an action was precluded because of an
arbitration clause in the agreement. Clause 40.1 of the agreement under the heading
'Settlement of Disagreements and E Disputes' provides:
'Should there be any disagreement between the employer or his agents on the one hand and the contractor
on the other arising out of or concerning this agreement, the contractor may request the principal agent to
determine such disagreement by a written decision to both F parties. On submission of such a request a
disagreement in respect of the issues detailed therein shall be deemed to exist.' [My emphasis.]

The agreement provides that a decision by the principal agent shall be final and binding unless
it is disputed, in which event, the dispute shall be submitted to arbitration or, where the
parties agree, to mediation.6 G
[17] As is apparent from clause 40.1, the primary problem for JJ is that it is only Stocks as the
contractor - and not JJ as the employer - that is entitled to refer a dispute to the principal
agent for resolution. Moreover, a dispute has to exist before it can be referred. Before
litigation, JJ chose not to pay rather than to declare a dispute. H
[18] In any event, counsel for JJ, understandably, encountered difficulty in elucidating the
arbitral dispute. In muted fashion counsel contended that the principal agent exceeded his
mandate by completing the certificates in question. This is a dispute between the employer
and his agent and is not a dispute envisaged by the arbitration clause referred to I above,
namely, between the employer or his agents on the one hand and the contractor on the other,
ie between JJ and its agents on the one hand and Stocks on the other.

2009 (5) SA p8
NAVSA JA
A [19] Counsel on behalf of Stocks rightly pointed out that there was, in any event, no
prohibition in the agreement against the institution of action. There is accordingly no merit to
this defence.
[20] In respect of certificate 10, JJ's main contentions as set out in B para [9] above are
without merit. The agreement does not provide for the tax invoice to follow any particular
format nor does it prescribe what information it has to contain. Certificate 10 shows that the
amount due is R2 704 425,78. The tax invoice is in the same amount and refers to certificate
10. The previous gross amount certified is the same and so too the net amount. There can be
no doubt that there is a direct correlation C between certificate 10 and the tax invoice in
question. Clause 31.9 was complied with and the court below cannot be faulted in this
conclusion.
[21] It was submitted on behalf of JJ that, after cancellation, the principal agent was limited to
preparing a final account and final payment certificate and there was thus no room for an
interim certificate D such as certificate 11.7 This is fallacious. In the relevant parts of para 38,
which appear under the title 'Cancellation by Contractor - Employers Default' the following

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appears:
38.5 Where the contractor cancels this agreement in terms of 38.0 the following shall apply:
E ...
38.5.3 The principal agent shall forthwith compile a report on the status of the portion of the works
executed by the contractor and shall issue such a report to the employer and the contractor
38.5.4 The principal agent shall forthwith commence and F complete the final account within ninety
(90) working days of completion of such a report
...
38.5.7 The principal agent shall continue to certify the value of the work executed by the contractor
and the value of materials and goods for payment by the employer.'

G Certificate 11 is in accordance with clause 38.5.7.

[22] I turn to deal with certificates 11 and 12 and the question of the certification of damages.
It was submitted that the principal agent had no authority in terms of the agreement to certify
damages. This submission H is without foundation. Clause 33 is entitled 'Recovery of Expense
and Loss' and provides for monthly 'recovery' statements by the principal agent on which
expense and loss shall be shown and amounts due to the

2009 (5) SA p9
NAVSA JA
contractor for 'damages in terms of 38.5.6', if any.8 Subclause A 38.5.6 provides that '(t)he
employer shall be liable to the contractor for damages resulting from such cancellation'. The
interim certificates envisaged in clause 31.1 (recorded above)9 may be adjusted, inter alia, by
amounts due to the employer or contractor in a recovery statement issued in terms of clause
33.1.10 It was submitted, on behalf of JJ, that B since Stocks did not, in its particulars of
claim, refer to or attach recovery statements in relation to certificates 11 and 12, summary
judgment ought not to have been granted. This is a submission entirely without merit. It was
never alleged by JJ that no recovery statements had been issued or that adjustments had not
been properly made. It is necessary to repeat that the basis of the valuation or damages was
not substantively C challenged.
[23] To sum up: on a proper construction of the agreement it is clear that the principal agent
is not only entitled but is obliged, in appropriate circumstances, to certify damages. D
[24] In support of his contention that Gorven AJ ought nevertheless to have exercised his
discretion against granting summary judgment, counsel on behalf of JJ urged us to bear in
mind that summary judgment is a remedy of an 'extraordinary and drastic nature', based on
'the supposition that the plaintiff's case is unimpeachable and that the E defendant's defence
is bogus or bad in law'.11 It is necessary to place this

2009 (5) SA p10

NAVSA JA
A characterisation of the summary judgment procedure in a proper perspective.
[25] Uniform Rule 32 enables a plaintiff to apply to court for summary judgment in respect of
four categories of claims: (a) on a liquid document; (b) for a liquidated amount in money; (c)
for delivery of B specified immovable property; or (d) for ejectment.
[26] Uniform Rule 8 provides for provisional sentence where a claim is founded upon a liquid
document. The theory behind provisional sentence is that -
C 'it is granted on the presumption of the genuineness and the legal validity of the documents produced to
the Court. The Court is provisionally satisfied that the creditor will succeed in the principal suit. The debt
disclosed in the documents must therefore be unconditional and liquid (zuiwer en klaar of liquid)'.12

D If a document 'upon a proper construction thereof, evidences by its terms, and without
resort to evidence extrinsic thereto an unconditional acknowledgment of indebtedness in an
ascertained amount of money, the payment of which is due to the creditor' it is one upon
which provisional sentence may properly be granted.13
E [27] Gorven AJ pointed out, with reference to Randcon (Natal) (Pty) Ltd v Florida Twin
Estates (Pty) Ltd 1973 (4) SA 181 (D) at 183H - 184H, that a final payment certificate is
treated as a liquid document since it is issued by the employer's agent, with the consequence
that the employer is in the same position it would have been in if it had itself signed an F
acknowledgment of debt in favour of the contractor. Relying further on the Randcon case (at
186G - 188G), the learned judge held that similar reasoning applied to interim certificates.
The certificate thus embodies an obligation on the part of the employer to pay the amount

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contained therein and gives rise to a new cause of action subject to the terms of the
contract.14 It is regarded as the equivalent of cash.15 The certificates in G question all fall
within this ambit.

2009 (5) SA p11

NAVSA JA
[28] Stocks held three liquid documents, the equivalent of acknowledgments A of debt. It
could have proceeded to obtain provisional sentence on them but chose to apply for summary
judgment.
[29] A summary judgment procedure was first introduced into our practice by the Magistrates'
Courts Act of 1917. It was based upon a procedure introduced in England by Order XIV under
the Judicature B Acts whereby a plaintiff was able, by means of a summary proceeding, to
obtain a final judgment when there was no bona fide defence to an action.16
[30] In John Wallingford v The Directors of The Mutual Society (1880) 5 AC 685 (HL) at 699 -
700, Lord Hatherley referred to the objects of the C new English procedure as follows:
I apprehend that from the first the objects of these short methods of procedure has been to prevent
unreasonable delay, a delay which was very prejudicial to the creditors, and never, I am afraid, or rather, I am
pleased to say, can have been very beneficial to the debtor himself. D Simply allowing legal proceedings to
take place, in order that delay may be applied to the administration of justice as much as possible, is not an
end for which we can conceive the Legislature to have framed the provisions which now exist under the several
Judicature Acts. If a man really has no defence, it is better for him as well as his creditors, and for all the
parties concerned, that the matter should be brought to an issue E as speedily as possible; and therefore there
was a power given in cases in which plaintiffs might think they were entitled to use the power by which, if it
was a matter of account, an account might be immediately obtained upon the filing of a bill, or, if it was a
matter in which the debt was clear and distinct, and in which nothing was needed to be said or done to satisfy
a Judge that there was no real defence to the action, F recourse might be had to an immediate judgment and
to an immediate execution.'

[31] So too in South Africa, the summary judgment procedure was not intended to 'shut (a
defendant) out from defending', unless it was very clear indeed that he had no case in the
action. It was intended to prevent G sham defences from defeating the rights of parties by
delay, and at the same time causing great loss to plaintiffs who were endeavouring to enforce
their rights.17
[32] The rationale for summary judgment proceedings is impeccable. The procedure is not
intended to deprive a defendant with a triable issue H

2009 (5) SA p12

NAVSA JA
A or a sustainable defence of her/his day in court. After almost a century of successful
application in our courts, summary judgment proceedings can hardly continue to be described
as extraordinary. Our courts, both of first instance and at appellate level, have during that
time rightly been trusted to ensure that a defendant with a triable issue is not shut out. In B
the Maharaj case at 425G - 426E, Corbett JA was keen to ensure, first, an examination of
whether there has been sufficient disclosure by a defendant of the nature and grounds of his
defence and the facts upon which it is founded. The second consideration is that the defence
so disclosed must be both bona fide and good in law. A court which is satisfied that this
threshold has been crossed is then bound to refuse summary C judgment. Corbett JA also
warned against requiring of a defendant the precision apposite to pleadings. However, the
learned judge was equally astute to ensure that recalcitrant debtors pay what is due to a
creditor.
[33] Having regard to its purpose and its proper application, summary judgment proceedings
only hold terrors and are 'drastic' for a defendant D who has no defence. Perhaps the time has
come to discard these labels and to concentrate rather on the proper application of the rule,
as set out with customary clarity and elegance by Corbett JA in the Maharaj case at 425G -
426E.
[34] In the present case, as demonstrated above, there is no discernible E sustainable defence
put up by JJ. In respect of the valuation of work done and materials on site, JJ did not take
issue with the principal agent's valuation per se. As shown, the references to various
provisions of the agreement do not assist JJ in establishing a defence. In respect of the
certification of damages the merits of the calculation were not F challenged. There are vague
references in the opposing affidavit to clause 31.6 and a possible counterclaim (without
quantification) in respect of an alleged failure by Stocks to protect goods and materials on
site. Such 'defences' as were proffered are cast in the most dubious terms. Judgment for

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Stocks in the court below was fully justified and Gorven AJ correctly refused to exercise his
discretion in favour of JJ.
G [35] For all the reasons set out above the appeal must fail. The following order is made:
The appeal is dismissed with costs, including the costs consequent upon the employment of
two counsel.
H Appellant's Attorneys: Routledge Modise (in association with Eversheds), Johannesburg;
Matsepes Inc, Bloemfontein.
Respondent's Attorneys: Tiefenthaler Attorneys, Durban; Honey Attorneys, Bloemfontein.

1 The constituents of which are: Association of South African Quantity Surveyors; Building Industries Federation
South Africa; South African Association of Consulting Engineers; South African Institute of Architects; South African
Property Owners Association; and Specialist Engineering Contractors Committee.
It was not contested that the standard contract under consideration was the third in a series of JBCC contracts. This is
important because earlier editions of contracts have been the subject-matter of decided cases, the findings of which
were made on the basis of provisions in those contracts.
2 It is worth noting that 'agent' is defined in the definitions and interpretations section of the agreement as follows:
'(T)he person or entity named in the schedule or appointed by the employer in terms of 5.0 to deal with specific
aspects of the work.'
'Principal Agent' is defined:
'(T)he person or entity appointed in terms of 5.0 and named in the schedule.'
3 In terms of clause 5.1 JJ 'warrants that the principal agent has full authority and obligation to act in terms of the
agreement, and where appropriate, the associated nominated and selected subcontract agreements'.
4 The material part of clause 31.1 of the agreement provides as follows:
'The principal agent shall issue an interim payment certificate every month on or before the date stated in the
schedule until the issue of the final payment certificate.'
Importantly, clauses 31.4.1 - 31.4.3 provide:
'The value certified in an interim payment certificate shall separately include:
31.4.1 A reasonable estimate of the value of the work executed taken into account the information submitted by
the contractor in terms of 31.2 and making due allowance for adjustments to the contract value in terms of 32.0.
31.4.2 A reasonable estimate of the value of materials and goods in terms of 31.6.
31.4.3 Amounts previously certified in terms of 31.4.1 and 31.4.2.'
5 JJ's affidavit opposing summary judgment, relying on an arbitration clause in the agreement, initially stated that
there was a dispute about Stocks' right to cancel the agreement which was subject to arbitration, without stipulating
what that dispute entailed. Towards the end of the affidavit, JJ stated that on 24 January 2005 Stocks indicated that
they had suspended the works and only returned to site by 1 March 2005. JJ contended that this constituted a breach
by Stocks, which precluded it from cancelling the agreement. There is no challenge in the opposing affidavit to Stocks'
assertion, in its particulars of claim, that JJ failed, in terms of the agreement: (i) to make an advance payment before
noon on 31 March 2005; (ii) to provide a payment guarantee in the sum of R40 million before noon on 29 April 2005;
and (iii) to provide by 29 April 2005 written evidence that it had secured adequate financing to enable it to comply
with its obligations. Stocks asserted further that payment had not been made upon presentation of certificate 9.
These, according to Stocks, were the bases on which the agreement was cancelled. Gorven AJ therefore correctly
reflected in his judgment, that it was common cause before him that the contract was properly cancelled by Stocks
arising from JJ's non-performance. Before us and the court below only the validity of the certification was in issue -
not the other grounds for cancellation. The arbitration clause continued to be a live issue and is dealt with later.
6 In this regard clauses 40.2 to 40.4 apply.
7 Certificate 11, in addition to certifying an amount in respect of damages, also includes certification by the principal
agent of the value of work executed and materials on site in an amount of R2 369 383,08. The opposing affidavit does
not contest the valuation of work done and materials on site in relation to certificates 10 and 11. There are vague
references to para 31.6 of the agreement which states that the value of materials and goods shall only be included in
a certificate if they are to the satisfaction of the principal agent on the bases set out in that clause. Nowhere is the
valuation per se challenged.
8 Clauses 33.1.3 and 33.1.6.
9 Note 4.
10 Clauses 31.5 and 31.5.4.
11 See Tesven CC and Another v South African Bank of Athens 2000 (1) SA 268 (SCA) ([1999] 4 All SA 396) at
275H referring to Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 423F - G. In the last-mentioned case
Corbett JA (at 426A - E) said the following:
'(O)ne of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the
Court by affidavit that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense
that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are
alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not
there is a balance of probabilities in favour of the one party or the other. All that the Court enquires into is: (a)
whether the defendant has fully disclosed the nature and grounds of his defence and the material facts upon which it
is founded, and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of
the claim, a defence which is both bona fide and good in law. If satisfied on these matters the Court must refuse
summary judgment, either wholly or in part, as the case may be. The word fully, as used in the context of the Rule
(and its predecessors), has been the cause of some judicial controversy in the past. It connotes, in my view, that,
while the defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he
must at least disclose his defence and the material facts upon which it is based with sufficient particularity and
completeness to enable the Court to decide whether the affidavit discloses a bona fide defence . At the same time the
defendant is not expected to formulate his opposition to the claim with the precision that would be required of a plea;

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nor does the Court examine it by the standards of pleading.' [My emphasis.].
12 Harrowsmith v Ceres Flats (Pty) Ltd 1979 (2) SA 722 (T) at 728C - D; Van der Walt v Eiendomsreg (Edms)
Bpk 1986 (2) SA 461 (T) at 465D - H. See also PBJ Farlam & DE van Loggerenberg Erasmus Superior Court Practice
B1-63 (service issue 25, 2006).
13 Rich and Others v Lagerwey 1974 (4) SA 748 (A) at 754H followed in numerous subsequent cases. See Erasmus
Superior Court Practice B1-63.
14 Ocean Diners (Pty) Ltd v Golden Hill Construction CC 1993 (3) SA 331 (A) at 340E.
15 Randcon case at 184C - G.
16 See Schoeman v Newmark Ltd 1919 CPD 55.
17 See Meek v Kruger 1958 (3) SA 154 (T) at 156F - 157A. In Jones v Stone 1894 AC 122 Lord Halsbury, in the
Privy Council, in relation to summary judgment proceedings in Western Australia, similarly stated that the procedure
was intended only to apply to cases where there could be no reasonable doubt that a plaintiff was entitled to
judgment and where it was inexpedient to allow a defendant to defend for mere purposes of delay. The procedure is
employed in Canada - see Progressive Construction Ltd v Newton 117 DLR (3d) 591 (1980 CanLII 493 (BC SC)) and is
known in the United States of America - see Sartor v Arkansas Natural Gas Corp 321 US 620 (1944).

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