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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NUMBER: 75781/2013

Reportable

Not of interest to other judges

Revised.

In the matter between:

SIZAZONKE ELECTRICAL CC                                                                       First Plaintiffs

ROSHELLA KISHUN                                                                                  Second Plaintiffs

GERT ABRAHAM CORNELIAS VAN WYK                                                    Third Plaintiffs

and

ESKOM HOLDINGS LIMITED                                                                              Defendant

 

JUDGMENT

 

MOTHLE J

 

Introduction

1. The Plaintiffs instituted action for losses suffered as a consequence of an alleged repudiation of several agreements entered into with the Defendant.

2. The following are the parties to this action, namely:

2.1 The First Plaintiffs is Sizazonke Electrical CC ("Sizazonke"), a close corporation with registered address at 90 Patterson Street, Newcastle, KwaZulu-Natal. Sizazonke is the main contractor with the Defendant;

2.2 The Second Plaintiffs is Roshella Kishun ("Kishun") an adult business woman resident at 87A Henrietta Street, Newcastle, KwaZulu-Natal;

2.3 The Third Plaintiffs is Gert Abraham Cornelius Van Wyk (" Van Wyk"), an adult businessman resident at 9 O'Neil Street, O'Neil Park, Newcastle, KwaZulu-Natal;

2.4 Where appropriate in this judgment , Sizazonke, Kishun and Van Wyk are referred to individually as such and collectively as the Plaintiffs; and

2.5 The Defendant is Eskom Holdings Ltd ("Eskom"), a company duly registered with its head offices at Megawatt Park, 2 Maxwell Drive, Sunninghill, Gauteng.

3. Eskom engaged the services of Sizazonke to provide electrification, maintenance and minor works through several agreements concluded between them. Sizazonke was therefore a service provider to Eskom.

4. It is common cause between the parties that Eskom, as would appear hereunder, suspended the services provided by Sizazonke. That suspension resulted in the action consisting of several claims for loss of income, incurred during the period of suspension. The action is based mainly on repudiation of the agreements. as a result of what Sizazonke refers to as repudiation of that agreement.

 

Background

5. Van Wyk and Kishun are members of the close corporation Sizazonke. During or about 15 September 2009, Sizazonke entered into a written agreement with Eskom for the electrification of schools' point supply in Newcastle. The works in the agreement entails carrying out electrification of dwelling houses known as Infill's Project, electrification of schools in the Ceza area and other works as Eskom may from time to time allocate to service providers.

6. Sizazonke was listed on the Eskom's data base as a service provider, together with other entities, for allocation of work from time to time. In this instance, the work would be allocated from bulk contracts in terms whereof, a service provider would be apportioned work from the main contract.

7. Some of the works came in the form of specific contracts where Sizazonke would place a tender and if successful be awarded that tender. Sometimes it had not been successful and tenders were awarded to others.

8. In July 2010, two employees of Sizazonke died in a motor vehicle accident while being transported to work. Several other employees in the Sizazonke vehicle also sustained injuries. It is common cause that the transport in which they were conveyed was non-compliant with Eskom's policy on transportation of staff to the work site.

9. Sizazonke was charged with non-compliance with the Eskom transport policy and suspended for five years from participating in the Eskom tenders. An Appeal against the suspension was unsuccessful and Sizazonke took Eskom's suspension on review in the High Court, Gauteng Division in 2011. The Court set aside Eskom's suspension. Eskom, on its own, reinstated Sizazonke as a service provider. Now Sizazonke sues for the loss of income sustained during the period of suspension.

 

The claims

10. Sizazonke claims an amount of R3 372 392.00 being what it alleges to be loss of profit relating to damages which Sizazonke suffered as a result of the alleged repudiation of contract by Eskom. Further, the Plaintiffs plead that after initially ordering the work stoppage on 9 July 2010, Eskom elected to allow Sizazonke to resume work and is therefore estopped from subsequently terminating the agreements. In the alternative, Sizazonke claims exactly the same amount as a delictual claim also arising out of repudiation of the contract. Sizazonke's claim is therefore founded on breach of contract in the form of repudiation; election and estoppel, alternatively in delict.

11. The additional claims are for the amounts of R628,017.00 for both members of Sizazonke (Kishun and Van Wyk) on the grounds that were unable to receive income from Sizazonke as a result of the alleged unlawful conduct of Eskom. It is further alleged that Kishun incurred damages in the sum of R275,000.00 and Van Wyk R225,000.00 in respect of their own capital to conduct business to Sizazonke.

 

The witnesses

12. In support of their claim, the Plaintiffs called Van Wyk, who testified mainly on the events leading to the suspension of Sizazonke from participating in the delivery of services as contracted by Eskom. The other two witnesses Mr. Jacque Habig ("Habig '') and Mr. Justus Van Wyk ("Justus") were called in as experts to testify in regard to the loss suffered by the Plaintiffs. The Defendant on the other hand called two employees of Eskom namely Mr Kurt Dedekind (" Dedekind') and Mr. Ernest Makua, ("Makua'}, Eskom's fleet manager.

 

The legal framework governing the agreements

13. The relationship between both parties is governed by a number of legal instruments on which the parties rely to advance their contentions. The Plaintiffs relies mainly on the NEC3 Engineering and Construction Contract ("NEC3"). Eskom, in addition to the NEC3, relies also on the following documents , copies of which were submitted as Defendant's bundle:

13.1 Eskom's Business and Conduct Policy and Guidelines;

13.2 Eskom's Procurement and Supply Chain Management Procedure;

13.3 Eskom's Vehicle Driver Safety Management;

13.4 Eskom's Health and Safety Standards.

14. I will now turn to deal with the question of the alleged repudiation of the contract.

 

Repudiation

15. The Plaintiffs' plead in paragraph 12 of the amended particulars of claim as follows;

"12. On or about 19 November 2010 the defendant repudiated all the aforesaid agreements by advising the first Plaintiffs orally and in writing that the first Plaintiffs had been 'found guilty of misconduct ' and that the following 'sanction ' was applied to all three Plaintiffs:..."

"13 The first Plaintiffs did not accept the repudiations by the defendant of each of the aforesaid agreements, and on or about 20 October 2011 the Plaintiffs obtained a court order from the North Gauteng High Court, Pretoria under case number 3003812011 against the defendant, setting aside the defendant's aforementioned decisions as referred to in paragraph 12 supra. A copy of the aforesaid court order is attached hereto as ANNEXURE 'D'....

15. The first Plaintiffs, as it was entitled to do, regarded the further conduct of the defendant after the court order was granted, as a continuous material breach and repudiation of the agreements, which prevented first Plaintiffs from completing all services to be rendered to defendant by first Plaintiffs in terms of all the aforesaid contract, and which caused damages to first Plaintiffs."

16. Eskom in denying the Plaintiffs' allegation of repudiation of the contract, pleads in essence that the Plaintiffs breached the terms of the agreements through non-compliance with the various legal instruments referred to in paragraph 13 above, governing their relationship and on which the agreements were founded. This alleged breach of the terms of agreements by the Plaintiffs, entitled Eskom to institute the disciplinary process which resulted in a penalty in the form of the suspension of Sizazonke, as permissible by the legal instruments.

17. Repudiation is a form of anticipatory breach of a contract as is defined by Corbet JA as he then was in Nash v Golden Dumps (Pty) Ltd[1] thus:

"Where one party to a contract, without lawful grounds, indicates to the other party in words or by conduct a deliberate and unequivocal intention no longer to be bound by the contract, he is said to 'repudiate ' the contract... Where that happens, the other party to the contract may elect to accept the repudiation and rescind the contract. If he does so, the contract comes to an end upon communication of his acceptance of repudiation and rescission to the party who has repudiated ..."

18. This approach to the meaning of 'repudiation' was endorsed by Nienaber JA, writing for the Supreme Court of Appeal of South Africa in Datacolor International (Pty) Ltd v lntamarket (PTY) Ltd[2] as follows;

"[17] As such a repudiatory breach may be typified as intimation by or on behalf of the repudiating party, by word or conduct and without lawful excuse, that all or some of the obligations arising from the agreement will not be performed according to their true tenor. Whether the innocent party will be entitled to resile from the agreement will ultimately depend on the nature and of the impending non- or malperformance"

19. Repudiation cannot thus be held to be present where lawful reason or justification is present in the action of the defaulting party. It is now apposite to consider whether on the facts, there was lawfulness or justification in the conduct of Eskom.

20. The suspension of Sizazonke from participating in the contracts agreed to with Eskom arises out of an accident that occurred on the 9 July 2010 concerning Sizazonke's employees. On the morning of that fatal day, the team leader of Sizazonke's staff members, took a decision that fourteen of these employees would be transported to the work site by means of one truck. The truck, in its capacity, could lawfully convey only five employees at a time. Three employees (including the driver) were sitting at the front cab of the truck, in a place designed for only two persons with provision for only two safety belts. The remaining eleven employees were seated at the back of the truck. Ten of the employees at the back of the truck were sitting in the open part and did not fasten their safety belts as there was no provision for such. One was seated inside the canopy where there was a provision for safety belts but did not fasten the safety belt.

21. On the way to the site the truck overturned. Two employees, Mr. S Simelane, died on the scene of the accident and Mr. BC Mthembu, died on arrival at the hospital. The other employees sustained injuries and were taken to hospital. When the accident was reported to Eskom, Eskom wrote a letter to Sizazonke instructing it to stop working until further notice. On 13 July 2010 , Van Wyk and Kishun attended the preliminary meeting which was convened and chaired by Dedekind. At that meeting they were informed that it was a preliminary investigation and the purpose thereof was to establish the facts relating to the root cause of the accident. Dedekind later testified during the trial that in essence the reason for the inquiry following the work stoppage was in compliance with procedure to prevent further incidents. Dedekind's investigation found as follows:

21.1. That the crew cab used to employ Sizazonke's employees did not have sufficient belts to cater for eleven people who were conveyed at the back of the vehicle;

21.2. The front of the truck had only provision for two seat belts whereas there were three employees conveyed;

21.3. That as a result of the accident, Mr. B C Mthembu died at hospital and Mr. S Simelane died at the scene of the accident. The remaining employees were injured.

22. The committee recommended that all contractors in the region were to comply with the technical instructions by the Distribution Division Executive (T10112) and thus Sizazonke may resume its work activities once they had complied with the contents of technical instructions .

23. Mr. Craig, the general manager of Eskom, informed Sizazonke by means of an e-mail dated 16 July 2010 that the suspension to do the work in terms of the contracts was uplifted and that it was allowed to continue the work on condition that it will not transport the employees at the back of the trucks, unless and until they are seated and properly secured with adequate seat belts. There was a further condition that Sizazonke should acknowledge and agree to comply with the technical instructions which are attached to the e-mail. In essence therefore Sizazonke was under suspension from performing any services for Eskom between 9 July and 16 July 2010, during the period of work stoppage.

24. Meetings were held between Sizazonke and Eskom as a follow­ up to ensure compliance with the agreed regulations regarding transporting workers to and from the work site.

25. On 21 October 2010, a notice was sent to Sizazonke to attend a formal enquiry on 1 November 2010, which enquiry was then chaired by Makua. Both Kishun and Van Wyk were in attendance. At this meeting, the two members representing Sizazonke were invited to make representations as to Sizazonkes's non-compliance with the Eskom transportation policy, which led to the death of two people. The two Sizazonke's shareholders conceded that there was non­ compliance with the Eskom policy but sought to blame the team leader , who at that time acted within the scope and course of his employment Sizazonke, for overloading the truck with employees beyond the permissible capacity.

26. The meeting of 1 November was followed by another one of 19 November 2010, held by the Supply Chain Management of Eskom where Makua submitted his recommendations following the enquiry on 1 November 2010. He recommended that Sizazonke be suspended from the database of Eskom for a period of 5 years having found it guilty of contravening the business code of conduct of Eskom.

27. The procurement tender committee Level II, accepted and endorsed the recommendations and stated further that any other company in which Kishun and Van Wyk are either directors or members will also be suspended from Eskom's database for a period of 5 years commencing on 19 November 2010 in respect of all work. Sizazonke was advised that if not satisfied, they may appeal to the Procurement Tender Committee Level I. In effect, the decision of Procurement Tender Committee Level 11 had cancelled all contracts with Sizazonke.

28. Prior to instituting the review proceedings in the High Court, Sizazonke had noted an appeal against the decision of Procurement Tender Committee Level II, which appeal was heard by the Procurement Tender Committee Level I.  This occurred on the 13 December 2010. On 24 March 2011, the appeal was dismissed and Sizazonke was informed of the result. Two days thereafter, Sizazonke instituted the review proceedings in the High Court.

29. On 20 October 2011, a year after the suspension of Sizazonke, the High Court ruled that the suspension of Sizazonke is set it aside. The prayers for reinstatement to the contract were abandoned by Sizazonke and no order was granted in that regard. Eskom, on its own accord, reinstated Sizazonke on the database and permitted it to tender for further work. Sizazonke thus resumed work on November 2011.

30. Eskom's policy on transport safety, which is one of the legal instruments governing the agreements, was communicated by email to Sizazonke and all participating service providers as early as 2006, four years before the accident. In a letter dated 16 November 2006, issued by T Maasdorp ("Maasdorp ''): Procurement Manager: Eastern Region, Sizazonke is reminded of Eskom's stance regarding transportation of contract staff and reporting of contractor safety incidents. The letter specifically raises concern about the "unsafe transportation of workers at the back of the of the contractor's vehicle" as the root cause of accidents.

31. This letter was preceded by the one dated 12 September 2002 from LC Du Plessis, Procurement Manger- Eastern Region, in which he communicated to Sizazonke that it has been approved to participate as a service provider to Eskom subject to some stated conditions. The letter also enclosed Eskoms's policy guidelines to which Sizazonke was informed that it must ensure "compliance with the above Policies and Guidelines". The acknowledgement of receipt of this letter was signed by Kishun on behalf of Sizazonke. letter

32. The policy of Eskom on driver safety reads thus:

"Eskom's Vehicle and Driver's Safety Management Procedure Responsibility .

"2.7 Disciplinary process:

2.7.1 Misconduct.

Eskom takes A ZERO TOLERANCE stance on health and safety-related ad-risk behaviour. Eskom will therefore view any lack of adherence to the following rules, regarding but not limited

to, at-risk behaviour, in a very serious light: ...

(c) all drivers, including contractors and contractor employees when performing work for Eskom, must ensure that they and their passengers are seated and wearing seat belts at all times.

(d) No employee may be transported in the back of any open vehicle, where this is not allowed. "

33. In regard to acts of misconduct other than a breach of contract, Eskom's policy provides:

"Without prejudice to any legal or contractual rights or remedies Eskom may have, a supplier will be guilty of misconduct in terms of this procedure if it:  contravenes or fails to comply with Eskom 's code of conduct for suppliers or Eskom 's Business Conduct Policy and Guidelines."

34. Acting in terms of these and other prescripts, Eskom instituted disciplinary proceedings which resulted in the suspension of Sizazonke.

35. In his submission and in the Heads of Argument[3], counsel for the Plaintiffs, contend as follows:

"... it is very clear from the decision that was taken on 19 November 2010 that Eskom was not prepared to continue with any of the contracts that it had entered into with Plaintiffs and neither was it prepared to award Plaintiffs further contracts on the basis of bulk contracts. There is no doubt that, in the absence of a finding of lawful cancellation by Eskom, it had committed repudiation of the agreement.."

36. Testifying in support of the Plaintiffs' claim that Eskom repudiated the contract when it suspended it for a period of 5 years, Van Wyk agreed under cross-examination with counsel for Eskom, that Eskom was indeed legally entitled to suspend Sizazonke. He further conceded, though denying any responsibility that Sizazonke's team leader did not comply with Eskom's transport safety policies, which are part of the contract. Van Wyk's main contention is not that Eskom acted illegally but rather that there were other parties that were similarly guilty of such offences and were not placed under suspension as was the case with the Plaintiffs. In short, the evidence tendered by Van Wyk directly contradicts the allegation in the particulars of claim that Eskom repudiated the contracts.

37. The High Court in reviewing the decision to suspend Sizazonke by Eskom in 2011[4], set aside the suspension having found that the suspension was harsh and Sizazonke on appeal, was not given an opportunity to be heard. Apart from setting aside the decision of Eskom to suspend Sizazonke and granting costs against Eskom, the learned Judge did not grant any further relief in terms of Section 8 of the Promotion of Administrative Justice Act ("PAJA”)[5]. However, the learned Judge, before concluding as he did, stated in paragraph 7of the judgment thus:

"7. For purposes of this judgment I accept that Eskom acted totally within its rights to institute its disciplinary hearing and went about it procedurally as prescribed by the contract".

38. There is therefore no evidence to suggest that Eskom acted illegally in suspending Sizazonke as a service provider. The decision to set aside the suspension was founded on procedural grounds and not on unlawful conduct on the part of Eskom.[6]

39. Thus, in setting aside the suspension of Sizazonke, the Gauteng High Court did not take away the right of Eskom not to give work to Sizazonke. In Merafong City v Anglo Gold Ashanti[7], the Constitutional Court had this to say in this regard:

"An invalid administrative act may, notwithstanding its non­ existence, serve as the basis for another perfectly valid decision. Its factual existence, rather than its invalidity, is a course of the subsequent act, but that act is valid since the legal existence of the first act is not a precondition to the second."

40. I find on the evidence, that Eskom was justified in suspending Sizazonke from participating as a service provider for a period of 5 years which resulted in a lawful cancellation of the contracts in which Sizazonke was a party. The Plaintiffs have failed to proof that Eskom's conduct amounted to repudiation.

 

Non-compliance with procedure

41. During oral argument, and as repeated in the heads of argument, counsel for the Plaintiffs relied on the provisions of the NEC3. His contention is that the basis of cancellation of the contract as well as the process followed by Eskom were not compliant with the provisions of the NEC3. However, clause 90.2 of the NEC3 provides that the contractor may terminate only for a reason identified in the termination table. Whereas the employer may terminate for any reason.

42. It seems that the Plaintiffs' choose to rely solely on the NEC3 provisions without reference to Eskom's Procurement Supply Chain Management Procedure, including Eskom's Vehicle and Driver Safety Procedure. In my view it will be incorrect to approach the issues in this case exclusively on the terms of the NEC3.

43. The Plaintiffs are failing to deal directly with the legal basis on which the suspension rests. The remedy for failure to comply with procedure lies in review proceedings, for which the Plaintiffs obtained relief in the Gauteng High Court. In this instance, even if it may be accepted that Eskom did not follow the procedure outlined in the NEC3, this does not serve as a basis for a delictual claim.

44. In granting the relief, the review court did not provide any directives as would normally follow in terms of section 8 of PAJA. Eskom had discretion whether to commence the disciplinary procedure de nova, in compliance with procedure or to re-instate Sizazonke as a service provider. It chose the latter.

45. It is thus not open to the Plaintiffs to claim entitlement to relief in a form of damages in the absence of a specific finding by the Court on review that Eskom was obligated to re-instate Sizazonke.

46. I find that there is no merit in this argument and it is accordingly rejected.

 

Election and Estoppel

47. The Plaintiffs raise the allegations of estoppel and waiver of rights in their Replication. This Replication was delivered in response to Eskom's counter allegation in its plea, that Sizazonke's conduct arising out of the accident was in fact a repudiation which it accepts.

48. I do not agree with Eskom's allegations in their plea that Sizazonke, through the non-compliance with its policy on driver safety which resulted in the fatal accident, intimated that all or some of the obligations arising from the agreements will not be

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performed.[8] Sizazonke's conduct, on the facts, does not amount to an anticipatory breach of contract in the form of repudiation. The breach of the agreements in this instance was of a different kind, being non-compliance with a specific term of the agreement, but not that of repudiation. I will nevertheless turn to deal with the defence of waiver and estoppel as raised by the Plaintiffs. 

49. The Plaintiffs contend, in support of the defence of estoppel, that the enquiry that was conducted just after the accident and led to the work stoppage on 9 July 2010, "Yielded sufficient information pertaining to the accident and the reasons for the accident for Eskom to determine that the health and safety provisions referred to and reflected in paragraph 2. 7 of the Eskom vehicle and driver safety management procedure, had been contravened and breached.”[9]

50. The Plaintiffs further contend that Dedekind conceded that information was available for purposes of making an election to cancel the agreement or to continue with the agreement. It further goes on to state that it is clear from the evidence of Van Wyk that the Plaintiffs were brought under the impression that they could continue with the agreements, that the agreements would not be cancelled, and that they were totally surprised when they were forced to stop with all work on 19 November by the procurement tender committee headed by Peter Craig.

51. In the first instance the Plaintiffs contention in this regard tends to ignore the difference between the first enquiry and its purpose by the technical team and the second one conducted by the Procurement Tender Committee which resulted in the suspension.

52. It appears from the evidence and the documents before Court that there were two types of enquiries into the incident. Shortly after the accident on 9 July 2010, Sizazonke was suspended from participating in any work on the contracts allocated pending an enquiry, in my understanding, to determine whether following the accident, they have taken measures to prevent future accidents from happening, before resuming work. That enquiry took relatively quickly to assemble where the accident was discussed, in particular with reference to whether there would be compliance with safety regulations stipulated by Eskom. The Plaintiffs assured Eskom that they will take measures to comply with the transport safety policy of Eskom and shortly thereafter, on 16 July 2010, they were allowed to resume work .

53. There was a second enquiry on 1 November 2010, which had to determine whether the accident involving Sizazonke's employees, occurred as a result of non-compliance with or breach of Eskom's Supply Chain Management procedure as well as Eskom's Vehicle Driver Safety Management policies.  That is the enquiry which led to the 19 November 2010 suspension of Plaintiffs from participating in any tender activities relating to Eskom, for a period of 5 years.

54. On 16 March 2011, Sizazonke received an e-mail which clearly explained the two enquiries referred to herein. The e-mail read as follows:

"Work was initially stopped as soon as Eskom became aware of the incident. During this period of safety investigations and audits were conducted and compliance to safety issue addressed.  Once this was established, your company was advised to continue work. (as per e-mail from Peter). Note that this was a work suspension only. This process however is separate from the commercial supply suspension process in terms of Eskom's Procurement and Supply Chain Policy."[10]

55. The purposes of the two enquiries are different. This much was conceded by Mr. Van Wyk under cross-examination after he had admitted that he had worked for Eskom for a number of years before joining Sizazonke. He conceded knowledge of the two processes and their purposes. The contention that the Plaintiffs were under the impression that the lifting of the work stoppage brought an end to the entire proceedings is contrived and disingenuous.

56. It is evident from the minutes of the 9 July 2010 enquiry, that emphasis was on determining whether Sizazonke should under circumstances continue with the work allocated to it in terms of the contracts. Sizazonke took corrective measures in relation to the vehicles to the satisfaction of the technical committee. They were then allowed to proceed with the works. However, the fact that corrective measures were taken, and that the work stoppage was uplifted, does not absolve Sizazonke from being summoned to the disciplinary process, to answer the charge of non-compliance with the terms and conditions of its contract with Eskom.

57. I do not agree that this would be a case of estoppel as there is clearly a distinction between the purpose of the first hearing and that of the second hearing. See in this regard Du Plessis and Another NNO v Rolfes Ltd[11] where the Court discussed the doctrine of election with reference to the matter of Seagull v Mazzur 1920 CPD 634. Watermayer AJ in this case stated the principle thus:[12]

" ...the question whether a party has elected not to take advantage of a breach is a question of fact to be decided on the evidence, but it may be that he has done an act which, though not necessarily conclusive proof that he has elected to overlook the breach, is of such a character as to lead the other party to believe that he has elected to condone the breach, and the other party may have acted on such belief. In such a case an estoppel by conduct arises and the party entitled to elect is not allowed to say that he did not condone the breach."

58. Considering the minutes of the first enquiry as well as the e- mails that were exchanged then, no inference can be drawn that the decision to allow Sizazonke to resume work meant or created the impression that it was the end of the matter.

59. I accept Eskom's submission that there is no evidence upon which it can be inferred that Eskom waived its rights when it permitted Sizazonke to resume with the work after the initial enquiry. The decision to permit Sizazonke to resume with the works does not entail a waiver of any rights nor estopp Eskom from cancelling the contract later in November 2010.

 

Claim in Delict

60. The Plaintiffs bear the onus to prove all elements of delict, in support of their claim. One of these elements is unlawfulness or wrongfulness. To succeed, a Plaintiffs must prove that the action conduct of the defendant was unlawful.

61. As already found in this judgment under 'repudiation' above, Eskom's conduct was lawful. Van Wyk's contention was that they were not treated fairly. The question of fairness would be a ground for review of a decision and does not constitute wrongfulness. The element of unlawful conduct on the part of Eskom has not been proved and there can therefore be no basis for a claim in delict. I accordingly find that there is no merit in the delictual claim raised by Van Wyk and Kishun.

62. Having regard to the findings stated above, I am of the view that the Plaintiffs have not succeeded to prove a case that would justify any compensation for damages. In view of the order I am about to make, I find it unnecessary to deal with the evidence relating to the question of damages except insofar as it may have any bearing on the question of costs.

 

Costs.

63. In regard to claim 4, the Plaintiffs tendered costs for that claim in that they did not proceed with it. Eskom should be entitled to the costs including costs of preparation in respect of claim 4.

64. In October 2016, the Plaintiffs during the trial proceedings, requested a postponement after it became evident during cross­ examination of Habig that the financial source documents from which he made his calculations to support the various amounts reflected in the financial statements, were not in court. Counsel for the Plaintiffs at that time, sought to blame Eskom's counsel that they did not indicate whether they will need the source documents. At that point the Plaintiffs' counsel contended that a postponement should be granted in order to allow the Plaintiffs to produce the financial records, which he described as running into volumes, in order to bring them to Court. At that stage, Van Wyk had already testified.

65. The Court granted the postponement, but deferred the question of costs until it had been properly argued. When the Court resumed, it transpired that Van Wyk was then re-called to give evidence before Habig could continue. In addition thereto, the Plaintiffs had called another expert witness, Justus also to testify in regard to the financial statements.

66. It is clear from the evidence of Habig that on resumption after that rather long postponement, in his own words, admitted that he had used the period of postponement to go through the financials once more. His second evidence attempted to build on the first but then was contradicted in some respects by that of Justus. The cross-examination uncovered further discrepancies in regard to some calculations, which Justus conceded.

67. Although Eskom did not present any evidence in regard to quantum, from the cross-examination of the Plaintiffs' expert witnesses, the discrepancies in the calculations of the amount was revealed, even though in some instances such discrepancies being immaterial.

68. Having regard to the evidence that was subsequently presented after the postponement, the Court is now in a better position to rule on the question of the costs occasioned by the postponement. The Plaintiffs, in support of the contention that they should be awarded costs, referred me to the matter of Mokheti and Another v MEC for Health, Gauteng[13], where the court criticized the defendant's attorneys on the manner in which they conducted the trial. The facts of the case are briefly that the defendant first requested a postponement which was refused. Then defendant's counsel also refused to make admissions of the correctness of the Plaintiffs' expert reports when invited to do so. The defendant had not filed any expert reports. This caused Plaintiffs' counsel to call all experts to testify in confirmation of the correctness of the reports. The defendant's counsel could not cross-examine as he had no instructions to do so. The Court took a dim view of the defendant's conduct and mulcted a punitive cost order.

69. It is evident from the facts of the Mokheti case that this case distinguishable. In the first instance there was cross-examination in this case. The demand for the financial source documents was a consequence of Habig making reference to them in answer to questions during cross-examination. Counsel for Eskom was entitled to verify the correctness of these answers. It should be noted that from the outset in terms of the pleadings, the issue of quantum was placed in dispute. It is not open to counsel for the Plaintiffs to present evidence on the assumption that the source documents are admitted, when such does not appear in the pre-trial minute as provided for in Rule 37 (4(a)), (5) and (6(g)) of the Uniform Rules of Court.

70. I am thus of the view that the Plaintiffs had not prepared themselves properly for presentation of their evidence and approached Court on assumption that Eskom would admit the source documents. There is nothing in the pleadings to suggest that. The onus rests on the Plaintiffs to present its case and Plaintiffs as such cannot be heard to say that Eskom must take responsibility to pay the costs of what the Plaintiffs should have done in the first place. I therefore find that the Plaintiffs are liable for the costs of postponement of the trial occasioned in October 2016.

71. On the conspectus of the entire evidence, I am of the view that the Plaintiffs' claim has failed and that the costs in general must follow the results.

72. In the premises I make the following order:

1. That the Plaintiffs' action is dismissed;

2. The Plaintiffs are ordered to pay to the Defendant costs as follows;

2.1 the costs tndered for withdrawing a further claim, including costs of preparation;

2.2 the costs of the postponement of the trial in October 2016, including costs of two counsel; and.

2.3 Overall costs of the trial, including costs of two counsel.

 

 

___________________

S P MOTHLE

Judge of the High Court.

Gauteng Division, Pretoria

 

For the Plaintiffs: Adv. R Du Plessis SC

Assisted by: Adv. R Grundlingh

Instructed by: Nötnagel Attorneys

Lynwood Glen

Pretoria

For the Defendant: Adv. B R Tokota SC

Assisted by: Adv. M Gwala

Instructed by: Ngeno Mteto Inc

Brooklyn

Pretoria

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