Roads Agency Limpopo (Pty) Ltd v Murray and Roberts Construction (Pty) Ltd and Others

Roads Agency Limpopo (RAL) concluded a standard-form COLTO engineering contract with Murray and Roberts Construction (the contractor) in July 2005 for roadworks in Limpopo. Performance was disrupted when an unsuccessful tenderer, Raubex (Pty) Ltd, obtained an interim interdict halting the works pending review proceedings. The contractor incurred additional costs due to the stoppage and submitted a claim, which the engineer accepted and included in interim payment certificate 10. RAL rejected certificate 10, and later certificate 11, invoking clause 2(8) of the contract, which allowed the employer to reverse or amend any engineer’s certificate. After RAL’s refusal to pay the amounts claimed, the contractor purported to cancel the contract for non-payment under clause 59 and later relied on payment certificate 12/13, issued after cancellation, to claim outstanding amounts. The High Court ordered RAL to pay the contractor. RAL appealed to the Supreme Court of Appeal.

The appeal was upheld. The order of the High Court was set aside and replaced with an order dismissing the contractor’s application with costs, including the costs of two counsel.

The case is significant for South African construction and contract law as it clarifies the scope of an employer’s power to reverse or amend interim payment certificates under standard-form engineering contracts. It affirms that interim certificates do not create an unassailable right to payment where the contract expressly allows employer intervention, and it delineates the limits of a contractor’s right to cancel for non-payment.