Govt escapes million-pula lawsuit

Mpho Mokwape | Wednesday February 17, 2016 16:04

 

The Department of Roads and Transport axed the contractor, citing non-performance and delays in a P7 million project to build access roads in Mmadikola and Rakops. Shumba Projects sued, arguing that it had already spent just over P1 million in relocating water pipes as part of the project, before contract termination.

However, in the Court of Appeal this week, Justice Frederic Brand ruled that Shumba Projects was not entitled to any amounts it claimed to be owed.

Brand said after the termination of the contract, the Department had employed another contractor to complete the access road projects meaning that the company was not entitled to payment of any further amount until the costs of completion and all other expenses incurred by the Department subsequent to termination of contract had been ascertained and certified by the engineer.

“The Department is entitled to a set off thereafter and the company would only be entitled to a balance, if any, after the costs of completion of the project and expenses have been deducted from the aggregate amount of the said pipes,” he explained.

Brand said provided there is an agreement, if an employer terminates a contractor’s employment over delayed work, the employer will not be liable to pay the contractor any further amount including damages in respect of the contract until the costs of execution, completion and remedying of any defects, damages for delay, and expenses incurred are calculated.

“The Department’s contention was that it was entitled to cancel the contract in terms of their contract and a certain clause within the contract. Also the contract was terminated due to non-performance and the company had failed to complete the contract in time and even failed to make significant progress after the contract was extended,” he said.

The company had submitted that despite the termination of the contract, they were entitled to payments for the work carried out on the relocation of water pipes.

According to court documents, the three water pipes under certificate number 6, 7, and 8 dated November 11, 2009, January 14, 2010 and March 2009 for period ending 2010 respectively were completed and certified on time before even the notice for contract termination.

The company’s contract with the Department originally ran from September 2008 to August 31, 2009 but was extended by 219 days, eventually lapsing on April 14, 2010. The contract was terminated on January 13, 2010.