CMED (Pty) Ltd v Noord Civils (Pty) Ltd and Another

The plaintiff, CMED (Pty) Ltd, owned land in Langebaan, Western Cape, on which it planned to develop 52 residential erven known as 'The Oyster Catcher Phase 1 Development'. The plaintiff concluded two separate but interconnected contracts: (1) a building contract with the first defendant, Noord Civils (Pty) Ltd, for the construction of internal roads, engineering services, and related infrastructure for a total price of R 6,480,715.70; and (2) a professional services engineering contract with the second defendant, C-T-P Consulting Engineers CC, to provide consulting engineering services for design and construction supervision. The building contract incorporated the General Conditions of Contract for Construction Works (Third Edition, 2015) ('GCC'), under which the second defendant was to act as the 'Employer's Agent' responsible for administering the contract and certifying interim payments. Construction commenced on or about 17 August 2022. The plaintiff alleged that the first defendant breached the building contract in numerous material respects, including construction of roads without adequate compaction tests, deviation from design and material specifications, and various other defective workmanship. The second defendant allegedly breached the engineering contract by failing to properly supervise the first defendant's work, being aware of defective workmanship but deliberately failing to intervene, and failing to demand that defective work be remedied. The first defendant also allegedly inflated interim payment claims and submitted claims for work outside the project scope. The plaintiff claimed damages of R 4,948,307.15 representing costs to rebuild roads, repair defective work, inflated interim payments, and amounts claimed for work not forming part of the project.

• Whether a 'whole agreement' clause in a written contract precludes reliance on a tacit term of that contract
• Whether a claim for joint and several liability against two defendants who breached separate but interconnected contracts is legally sustainable
• Whether questions of contractual interpretation should be decided on exception

The second defendant's exception was dismissed with costs on scale C, payable by the second defendant to the plaintiff.

A 'whole agreement' or 'sole testimonial' clause in a written contract does not necessarily, of itself, exclude the existence of a tacit term. An established tacit term, whether actual or implied, forms part of the written contract and is 'read or blended into' it. Furthermore, where a building contractor and a professional engineer breach separate but interconnected contracts — the engineer's obligation being to supervise the contractor's work — they are independently liable for the same or similar damage, and the plaintiff may claim against both jointly and severally, though cannot recover damages twice over.

The court observed that the nature of a tacit term is such that it is so self-evident it goes without saying, and noted the obviousness that the consulting engineers appointed for construction supervision would fulfil the functions of the 'Employer's Agent' as defined in the GCC. The court also noted that an exception which fails to expose the assailed cause of action as bad in law and fails to end the case does not achieve the purpose for which the exception procedure was designed.

This judgment confirms and applies in the construction law context the principle from Van Immerzeel & Pohl v Samancor that a professional engineer and a building contractor can be held jointly liable for the same damage arising from separate but interconnected contractual breaches, particularly where the engineer's duty includes supervision of the contractor's work. It also clarifies the effect of 'whole agreement' clauses on tacit terms in written contracts, affirming that such clauses do not automatically preclude reliance on tacit terms, and reiterates that questions of contractual interpretation are generally not suitable for determination at the exception stage.