African Heights (Pty) Ltd v Coega Development Corporation and Others

Coega Development Corporation concluded a main construction contract with Deck Steel and Concrete CC in 2018 for work at Zibi Meyer Junior Secondary School. Deck Steel subcontracted part of the work to African Heights (Pty) Ltd in February 2019. African Heights performed its obligations and was issued a completion certificate and invoice for R2 254 505,99. In July 2021 Deck Steel executed an out-and-out cession in favour of African Heights, ceding its right to payment by Coega and authorising African Heights to enforce payment directly against Coega. Deck Steel also submitted a direct payment request to Coega for R1 793 117,25. Deck Steel was placed in liquidation in March 2022 and its liquidators were joined as defendants. African Heights sued Coega for payment of the ceded amount and, in the alternative, claimed against Deck Steel in liquidation. The liquidators raised an exception, arguing that under clause 6 of the cession agreement African Heights could only sue Deck Steel after failing to recover payment from Coega, and that the particulars of claim did not allege such failure.

The exception was dismissed with costs.

The case reaffirms South African procedural law principles that exceptions are not suitable for resolving disputes of contractual interpretation and underscores the application of the Endumeni approach in determining whether a pleading is excipiable. It illustrates the cautious approach courts adopt before non-suiting a plaintiff at the pleading stage, particularly where cession agreements and insolvency are involved.