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Tuesday Aug 06, 2013

Munitoria: architect firm loses fight with Tshwane council

The City of Tshwane was within its rights to cancel an agreement with city architecture firm Holm Jordaan & Partners for the design and rebuilding of the gutted Munitoria headquarters, the Pretoria High Court found yesterday.

Judge Johan Louw turned down the firm's R44 million damages claim against the council.

He said in terms of the agreement between the council and the architecture firm, the latter was only entitled to be paid for work done and not for any damages.

The claim was instituted after the council decided not to go ahead with Project Phoenix -a competition run by the former Pretoria City Council for the design of new council headquarters after Munitoria burnt down in 1997.

Architects in Pretoria were at the time invited to participate, and according to the competition brief at the time, the total cost was not to exceed R160m.

In July 1999, the City Council of Pretoria announced that Holm Jordaan & Partners had won the competition.

The firm was told at the time that its appointment would only follow once the council had taken a decision to proceed with the project.

But before any decision could be taken, the City of Tshwane Municipality took over.

The firm was in 2003 asked whether it would work in a joint venture with a BEE company and to increase the scope and floor area of the new Munitoria - to which it agreed.

The architect firm then submitted an interim account to the City of Tshwane, based on an escalated construction cost of R222 192 960.

It was then once again confirmed that Holm Jordaan & Partners would take on the work, together with a BEE partner.

However, in 2004 the council ruled the Phoenix project unaffordable and initiated a new study into the feasibility of a socalled Public Private Partnership (PPP) model.

The council concluded that a PPP model, which would mobilise private sector capital at private sector risk, while providing a stable accommodation cost environment over a long period, was the only viable option.

Project Phoenix was ter minated as it was found to be unaffordable. The council notified the architect firm about the decision.

The firm instituted a damages claim, insisting that it had been appointed as architect for the rebuilding of the municipal headquarters.

This included the design, contract documentation, administration and inspection of the works, as set out in the competition rules.

The council countered that it was a term of the firm's appointment that even if it was decided to go ahead with the construction of the proposed new complex, the council would be under no obligation to proceed with the final design or construction.

It said in terms of the contract the competition winner would then be entitled to payment only for the design concept.

Lawyers for the firm argued that the council could not rely on this provision after it had appointed Holm Jordaan & Partners as architects for the project.

Judge Louw disagreed, saying the council was fully entitled to decide not to proceed with the project. In terms of clause seven of the agreement and in terms of the standard practice of architects, the firm was only entitled to be paid for the work done and not for any damage suffered, Judge Louw said.

Pretoria News


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