REPUBLIC OF NAMIBIA
HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK
JUDGMENT
Case No: HC-MD-CIV-ACT-CON-2022/04352
In the matter between:
HOLMS CONSTRUCTION CC PLAINTIFF
and
KIDNEY AND DIALYSIS SPECIALIST CENTRE (PTY) LTD DEFENDANT
Neutral citation: Holms Construction CC v Kidney and Dialysis Specialist Centre (Pty) Ltd (HC-MD-CIV-ACT-CON-2022/04352) [2024] NAHCMD 757 (9 December 2024)
Coram: COLEMAN AJ
Heard: 17-18 September 2024
Delivered: 9 December 2024
Flynote: Building contract, final payment certificate issued by principal agent – Bill of Quantities wrong and exceeds agreed contract sum.
Summary: Parties entered into a building contract. Work was completed later as agreed and the principal agent issued a final payment certificate. This certificate reflects a wrong final contract value but the correct certified payment due. Principal agent testifies to it. Defendant raises estoppel.
Held that: Final payment certificate is acknowledgment of debt by employer to contractor. Contractor cannot be estopped by representations made by principal agent on behalf of employer.
ORDER
The defendant is ordered to pay plaintiff N$ 472 237,08, plus interest on the said amount, at the prevailing prime rate plus 2 per cent per year calculated from 9 December 2021 (the date after the due date on the tax invoice issued by plaintiff on 1 December 2021).
The defendant’s counterclaim is dismissed.
The defendant is ordered to pay the plaintiff’s costs of suit to include costs of one instructing and one instructed legal practitioner.
The matter is removed from the roll and regarded as finalised.
JUDGMENT
COLEMAN AJ:
Introduction
[1] This is a claim based on the final payment certificate issued by the principal agent in terms of the building contract between the parties. The issue is essentially that defendant disputes the amount reflected on the final payment certificate since the bill of quantities reflects wrong values. It contends that plaintiff is now estopped from relying on the actual final contract value. Defendant also has a counterclaim based on delays in the construction. Plaintiff contends the delays were attributed to defendant and were not certified by the principal agent.
Relevant facts
[2] On 1 September 2020, the parties entered into a written building contract for the alteration and additions to existing kidney and dialysis specialist centre. The principal agent appointed in terms of the contract is Axel Dainat, an architect. No quantity surveyor was appointed. The construction was completed on 25 March 2021.
[3] As prescribed by the contract, the principal agent produced interim payment certificates from time to time, which the defendant made payments on, until the final payment certificate. The essence of the dispute on this payment certificate evolves around the fact that it reflects the final contract figure as N$3 057 420,29, which both parties now agree is incorrect.
[4] Plaintiff called the principal agent as a witness, who confirmed the amount reflected as outstanding in the final payment certificate as correct, despite the incorrect final contract figure. It also called an independent quantity surveyor who testified that the completed works by the plaintiff amounts to N$3 677 843,83, a higher amount than what plaintiff’s claim is based on. These witnesses were not seriously contested.
Conclusion
[5] In my view this matter can be decided around the issue of estoppel and the counterclaim. Core to this dispute is the final payment certificate issued by architect Axel Dainat, defendant’s principal agent (annexure ‘H’ to the particulars of claim). This document reflects the final account amount as N$3 057 420,29. However, it reflects the ‘…amount of this certificate and payment now due to the contractor from the employer…’ as N$472 237,08. This is the amount claimed by plaintiff. Mr Dainat, in his testimony, confirmed this amount to be correct.
[6] It is trite that a payment certificate is an acknowledgement of debt by the employer to the contractor. It is actually spelt out on annexure ‘H’. Also, in my view estoppel does not come into play. While the final payment certificate may contain an incorrect amount in respect of completed works, the actual certified amount to be paid is correct and is an acknowledgement of debt by the defendant. In any event, any misrepresentation on it was made by the defendant’s agent to the plaintiff, not the other way around.
[7] In concluding submissions, the defendant’s counterclaim was not seriously pursued. As mentioned, it is based on penalties due to the delay in completion of the project. I agree with counsel for the plaintiff that clause 19 of the building contract is the answer here. There was never a certificate issued by the principal agent in terms of this clause. In addition, the evidence shows that the delay was caused by the late payments by the defendant and various variations and additions required by the defendant during the project
[8] I considered all the evidence presented and the submissions made herein and I am of the view that plaintiff proved its case. As a consequence, I make the following order:
The defendant is ordered to pay plaintiff N$472 237,08, plus interest on the said amount, at the prevailing prime rate plus 2 per cent per year calculated from 9 December 2021 (the date after the due date on the tax invoice issued by plaintiff on 1 December 2021).
The defendant’s counterclaim is dismissed.
The defendant is ordered to pay the plaintiff’s costs of suit to include costs of one instructing and one instructed legal practitioner.
The matter is removed from the roll and regarded as finalised.
_______________________
G COLEMAN
Acting Judge
APPEARANCES
PLAINTIFF: L Lochner
Instructed by Veiko Alexander & Company Incorporated, Windhoek
DEFENDANT: T Chibwana
Instructed by Monica Angula & Associates, Incorporated, Windhoek