Swemmer & Levin

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In many instances, contractors put in all the work and comply with the terms of the agreement; however, they receive less or no payment. In the event that the contractor has performed in terms of the contract, but refused payment, there are legal grounds available to the contractors to pursue legal action and recover payment owed to them. 

The adverse effects of non-payment by employers are a common cause in the construction industry. Building contracts are species of the locatio conductio operis (letting and hiring of work). Locatio conductio operis is a mutual agreement between one party (the employer) and the other (the contractor) where the contractor undertakes to make his services available with regards to a physical material matter to an employer for payment. Non-payment in construction contracts can take several forms, namely: late payment, reduced payment, or no payment at all. 

The are several remedies available for contractors to enforce payment. 

The general principles of South African law apply to building and construction contracts. In general, the following principles apply to where contractor claims work done in terms of location conduction operis. The contractor needs to allege and prove the following: 

The terms of the contract of which he relied upon; the work that he had performed; the remuneration applicable and whether it is payable. The contractor must also allege and prove that he has done all that was required to be done in terms of the contract. 

The mere completion of a specific subdivision of the work does not entitle the contractor to payment of work completed unless the parties had agreed to the interim payments. Only upon completion of an entire job, they will be entitled to payment. The remedies to enforce payment include the following 

RIGHT TO INTEREST ON LATE PAYMENT 

If the employer fails to pay the funds due to the contractor, the contractor may charge interest on the amount due. The easiest way to recover such interest would be when the contract has an express provision that provides for interest payment in specific circumstances at a qualified rate. 

RIGHT TO TERMINATE 

In a case where the contractor has performed but work has not been fully completed, the contractor’s claim for an interim payment of the partially completed work could be met with a counterclaim from the employer based on exeptio non adimpleti contractus (right to withhold payment). Where the agreement provides for the interim payment, and the employer fails or refuses to pay, the contractor may elect to suspend or terminate the contract consequent to breach of contract.  

CONTRACTORS LIEN 

A right of retention entitles the holder of that right to retain possession of the property until expenditure of money incurred by him in respect of that property is reimbursed to him. Often the employer in a construction context will require that the contractor waives its lien. 

SUMMARY JUDGEMENT 

Rule 14 of Magistrate’s Court Rule and Rule 32 of Uniform Rule provides for this procedure, enabling a plaintiff with a clear case to obtain the swift enforcement of his claim against a defendant who has no real defence to that claim. However, courts have stressed that summary judgment’s remedy is extraordinary and stringent as it makes inroads into a defendant’s right to have his case heard. Courts are therefore reluctant to grant this remedy. 

ARBITRATION 

Commonly, parties make provisions in a contract that should any dispute arise in terms of the contract; it must be referred to arbitration and declare that the arbitration award is final and binding to the parties. Once an arbitration award has been made, it can be enforced in the same way as any judgments or orders to the same effect.  

Conclusion: 

In light of those above, one needs to have a well-drafted contract setting out parties responsibilities, performance deadlines and providing for the disputes between the parties.  

REFERENCE 

  • Maritz M J, Robertson DC, 2012. What are the legal remedies available to contractors and consultants to enforce payment? Journal of the South African Institution of Civil Engineering, Vol 54. Available at http://www.scielo.org.za/pdf/jsaice/v54n2/03.pdf 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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Jan Fourie

Director |  Attorney, Notary & Conveyancer | BA. LLB

Jan graduated in 1974 with a five-year BA LLB degree from the University of Stellenbosch, whereafter he was admitted as an advocate and prosecuted as such in the Cape Town and Wynberg Courts. In 1974, he joined Swemmer & Levin as the Candidate Attorney of Mr Levin (founding member) and was admitted as an attorney on 7 April 1976, as a conveyancer on 11 January 1978, and as a Notary on 19 December 1984. Since 1974, he has served in various committees, including the West Coast Chamber of Commerce, the Vredenburg School Committee, and the Malgas Lions Club. 

Furthermore, Jan was the author of the first bilingual law book, The New Debt Collecting Procedures (Die Nuwe Skuldinvorderingsprosedures), which was used by all the Magistrate Courts throughout South Africa. With the founding of the Small Claims Court in Vredenburg, Jan served as one of the first Commissioners. He is currently based at Swemmer & Levin’s Vredenburg office and has been with our firm for more than 47 years.

Pieter Smit

Director | Attorney & Conveyancer | BA. LLB

Pieter obtained his BA Law degree from Stellenbosch University in 1995 and his LLB degree from the North-West University in Potchefstroom in 1998. He served his articles at Marais Muller Attorneys from 1998 to 1999 and was admitted as an attorney in 2000 and as a conveyancer in 2002. Pieter is the founder of PP Smit Attorneys, which opened its doors in 2004. He also became a director of Swemmer & Levin in 2006. Pieter loves the outdoors and participating in all forms of sport, including tennis, golf, fishing, spearfishing, scuba diving, and hiking. 

Johann Maree

Director | Attorney | BA. LLB

Johann matriculated at Oudtshoorn High School and attended Stellenbosch University, where he obtained his BA Law and LLB degrees. Following his studies, he worked for three years as State Prosecutor at the Magistrate’s Court in Cape Town. Johann completed his legal training with the State Attorney in Pretoria and then moved to his hometown, Oudtshoorn, where he worked as a lawyer for a year. In 1983, he finally moved to Vredenburg and joined Swemmer & Levin, where he is still practising as a director. When he is not in the office, Johann enjoys cycling and in his earlier days, he used to be a long-distance junkie.

Richard Phillips

Director | Attorney | Bcom & BProc

After matriculating at Paarl Boys’ High School, Richard completed his BCom and BProc degrees at the University of Port Elizabeth. He served his articles with Van Wyk Fouchee in Paarl and quickly developed an affinity for litigation. Richard has always had a deep love for the ocean and when he was presented with an opportunity to join Swemmer & Levin on the West Coast, he agreed without hesitation and has been with our firm since 1997. Richard specialises in general litigation and divorces. When he is not in the office or with his family, he tries to spend as much time as possible in or on the water.

Jandré Smith

Director | Attorney | LLB

Jandré grew up and matriculated in the small Klein Karoo town of Oudtshoorn. He furthered his studies at the North-West University in Potchefstroom, obtaining his LLB degree during 2015. He completed his articles at Swemmer & Levin in 2017 and was subsequently appointed as a professional assistant. In 2020, Jandré was promoted to the position of director at the firm, where he practises in the Litigation department at our Langebaan office. When not practising law, Jandré is an avid sports fan. He has a passion for nature and enjoys camping, trail running, and mountain biking with his family.

Andre van der Walt

Director | Attorney | LLB

Andre graduated in 2015 with an LLB degree from the University of Pretoria. He later went on to obtain his NQF 7 Certificate in the Administration of Deceased Estates from the University of South Africa, which allowed him to further his career in deceased estates and the drafting of wills and trusts. Andre served his articles at Barnard & Patel Attorneys under the supervision of Mr YAS Patel. After being admitted as an attorney in 2016, he continued working at Barnard & Patel Attorneys as a professional assistant in the deceased estates department.

Andre joined Van Rensburg Attorneys in 2019 and was head of the deceased estates department until 2021. He then received the opportunity to move to the West Coast, where he joined Swemmer & Levin Attorneys. Andre loves travelling and enjoys the beauty that our country has to offer with his friends, family, and loved ones.

Harmann Potgieter

Attorney | LLB

Harmann graduated in 2018 with an LLB degree from the North-West University’s Potchefstroom Campus. He went on to study and grow in various fields, including doing a course on the Consumer Protection Act and a course at the University of South Africa where he obtained his NQF 7 Certificate in the Administration of Deceased Estates.

Harmann completed his articles of clerkship at Swemmer & Levin under the supervision of Mr Richard Phillips. After being admitted as an attorney in 2020, Harmann continued with Swemmer & Levin as a professional assistant in the deceased estates department as well as the litigation department. He loves to study, possesses a deep curiosity about the world, and is dedicated to giving back to the community.

Carla Cloete

Attorney, Conveyancer & Notary | LLB

Carla obtained her LLB at the North West University, Potchefstroom Campus in 2015. She completed her articles in 2017 with Brits Dreyer Inc in Bellville. She is an admitted Attorney, Notary and Conveyancer. After her articles she relocated to Kimberley where she worked as a professional assistant in the Conveyancing department of Van de Wall Inc. Coming back to her Western Cape roots, she now joins the Swemmer & Levin team as a professional assistant.