Court cancels E1.4m construction tender
MBABANE - The High Court has ordered the cancellation of a E1.4 million contract that Ka-Schiele High School had awarded to TSND Investments (Pty) Ltd.
The contract is for the construction of additional classrooms. Judge Doris Tshabalala found that TSND Investments misrepresented to Ka-Schiele High that it was the same company that constructed a double-storey structure at St Francis High School, resulting in the former school awarding it the E1 402 889.20 tender.
As a result of the misrepresentation, Judge Tshabalala found that the contract was invalid. The parties, upon concluding the contract, had agreed that the school would pay the contractor a sum of E420 866 in February and June this year. The school paid E200 000 instead, which the company argued was a breach of contract.
TSND Investments approached the court demanding payment but Judge Tshabalala dismissed its application on the basis that the contract was invalid.
Agreement
The construction agreement between the school and company was signed in January this year as a result of the contested tender. Trouble started in April 2021 when Ka-Schiele High required TSND Investments to provide certain documents, which included a registration certificate as a contractor indicating its grading, among other documents.
TSND Investments argued that the school prevented its workers from the construction site to continue working as per the contract.
Ka-Schiele High filed a counter application seeking the cancellation of the building contract. Its argument was that the company made a misrepresentation which induced it to enter into the contract.
Ka-Schiele High also told the court that the contract was illegal in that the company was not registered as a contractor as required by the Construction Industry Council Act of 2013.
The school addressed a letter dated April 21, 2021 toTSND Investments notifying it that all works on site were put on hold following information it had received that TSND Investments was not the same company that build a double-storey structure at St Francis High School as previously believed by Ka-Schiele High.
Reference
Ka-Schiele High regarded the St Francis High structure as a reference point for its project undertaken by TSND Investments. Ka-Schiele High demanded 10 documents from TSND Investments, such as company profile, contract signed with St Francis High, foreman profile, affiliation certificate ACA and others.
TSND Investments’ attorneys wrote to Ka-Schiele High to raise queries on the documents sought and demanded payment of the outstanding balance on the deposit. The company also demanded access to the construction site, failing which it would take legal action.
The parties are said to have met in April 29, 2021 and the company reportedly agreed to provide the documents.
Ka-Schiele High, in its counter application for the cancellation of the contract, said it signed the contract on the basis of a misrepresentation to the school committee that the company had built the St Francis High structure yet that was not true.
Submitted
Ka-Schiele High submitted that it halted the construction after learning that in fact another company, Trevor and Grant (Pty) Ltd, where the director of TNSD Investments was a minority shareholder and director, was responsible for the project.
The main Shareholder and Director of Trevor and Grant, Sizwe Vilane, confirmed to the court that TSND Investments was not the contractor responsible for the St Francis High structure but it was his company, Trevor and Grant that built the structure.
Vilane told the court that the foreman of Trevor and Grant, Mfanukhona Nkambule, was secretly working for TSND Investments on the Ka-Schiele High project.
Vilane informed the court that building material of his company was used in the Ka-Schiele project and that Nkambule absented himself under the pretext that he was on sick leave. TSND Investments accused Vilane of interfering in its affairs. It also accused Ka-Schiele High of interfering in the squabbles between the company director and Vilane.
Judge Tshabalala said: “It is not clear why the position of the applicant was not disclosed to the respondent (KaSchiele High) and instead the applicant masqueraded as the company that did the St Francis job. This was indeed a misrepresentation of a fact. Identity of the entity that did the referenced job is at the centre of misrepresentation in this case, not the individual members of the workforce.”
Identity
The judge also pointed out that misrepresentation on the identity of the applicant as the company that did the referenced job at St Francis was relevant, and material in that the applicant intended to influence the decision of Ka-Schiele High in favour of the applicant by giving the impression that it had the capacity and skill to carry out the job that was being competed for by other companies.
As a result, said the judge, KaSchiele High was made to believe that TSND Investment had the capacity it actually did not have as it turned out that it relied on unauthorised use of Trevor and Grant’s foreman and personnel, including equipment. The court dismissed TSND Investments’ application to be paid the balance of the deposit because it concluded that the contract was tainted with misrepresentation which vitiated consent, rendering it invalid.
Further the court found that TSND Investments did not dispute that it was not registered with the Construction Industry Council. TSND Investments was represented by Linda Dlamini of Linda Dlamini and Associates while Sifiso Maseko of Waring Attorneys appeared for Ka-Schiele High School.