Summary of Judgment

1. Introduction

This judgment concerns an exception brought in the Gauteng Local Division, Johannesburg, in which the excipient sought to have the plaintiffs’ summons and particulars of claim set aside on the basis that they allegedly lacked the necessary averments to sustain a cause of action. The application was framed as an exception in terms of Rule 23(1) of the Uniform Rules of Court.

The parties were Charlotte Jacobs (the seller, cited as the Excipient) and Keith Small and Charmaine Small (the purchasers, cited as the First and Second Respondents, and described in the pleadings as the plaintiffs in the main action). The dispute arose from a written agreement of sale concluded during or about 24 January 2014 in respect of a residential property.

Procedurally, after the respondents issued summons in September 2014 claiming relief arising from alleged latent defects, the excipient delivered a Rule 23(1) notice and proceeded with an exception contending that the respondents were required (but failed) to plead compliance with a contractual notice-to-remedy provision contained in clause 9 of the sale agreement. The exception was opposed, with the respondents characterising their claim as one based not on breach of contract but on the actio quanti minoris (a form of aedilitian remedy).

The general subject-matter of the dispute was therefore the proper legal characterisation of the respondents’ pleaded claim, and whether a claim framed as an actio quanti minoris required pleading and proof of a contractual breach and compliance with contractual breach-notice procedures.

2. Material Facts

It was common cause that, during or about 24 January 2014, the respondents purchased a residential dwelling from the excipient in terms of a written agreement of sale. The respondents paid the agreed purchase price of R3 350 000,00, the property was transferred into their names, and they took occupation.

In September 2014, the respondents (as plaintiffs) issued summons against the excipient. They alleged that, at the time the sale agreement was concluded, the property suffered from latent defects, that the excipient was aware of those defects, and that she failed to disclose them. They further alleged that had they known of the defects they would not have purchased the property, alternatively they would have paid a lower purchase price.

The respondents pleaded a quantified reduction in price, alleging that they would have reduced the purchase price by R163 243,02 to bring the premises into a state of repair fit for occupation and the purposes for which it was purchased. The pleaded formulation, as addressed in the exception proceedings, was treated as advancing the actio quanti minoris (price reduction) rather than cancellation and repayment of the full purchase price.

The excipient relied on clause 9 of the sale agreement, contending that the respondents were obliged to provide the excipient with 7 days’ written notice to remedy an alleged breach, and that the respondents’ particulars of claim were excipiable because they did not plead that such notice had been given. The respondents disputed that this contractual breach-notice mechanism was applicable, maintaining that their claim did not depend on alleging a breach of contract.

3. Legal Issues

The central legal question was whether the respondents’ particulars of claim, properly construed, were defective for failure to plead compliance with clause 9 of the sale agreement (a contractual notice-to-remedy provision associated with breach), and therefore whether they lacked averments necessary to sustain a cause of action under Rule 23(1).

This required the court to determine the juridical basis of the respondents’ claim as pleaded: whether it was a contractual breach claim (triggering clause 9’s procedure) or a claim based on the aedilitian remedy of the actio quanti minoris, which arises by operation of law in the presence of a latent defect.

The dispute thus primarily concerned the application of legal principles to the pleaded facts, including the classification of the cause of action and the consequent pleading requirements, rather than the resolution of factual disputes on the merits of the latent defects themselves.

4. Court’s Reasoning

The court approached the matter by examining the pleaded case and the content and scope of the contractual provision relied upon by the excipient. It noted that clauses 9.1 and 9.2 in the sale agreement deal with procedure when there is a breach of contract by either party. However, the court emphasised that the particular subclauses dealing with the consequences of a failure to remedy a breach (identified as clauses 9.1.1, 9.1.2 and 9.1.3) set out remedies that were, on the court’s reading, available to the seller. These remedies included cancellation and claiming damages, or holding the contract in place and claiming payment of the full purchase price. The court stated that no remedy for the purchaser was prescribed in clause 9.

Against that contractual framework, the court considered the nature of the respondents’ pleaded claim. It found that the respondents were not relying on a contractual breach requiring a notice to be sent to the seller. Instead, the court characterised the claim as based on the actio quanti minoris, described as a stand-alone action grounded in the presence of latent defects, and not aimed at cancellation and refund of the full purchase price. On this footing, the court treated the respondents’ pleaded remedy as a price reduction claim rather than a contractual enforcement claim.

In support of the proposition that the aedilitian remedies arise by operation of law and do not require a buyer to plead and prove breach of contract, the court relied on the statement of Holmes JA in Phame (Pty) Ltd v Paizes 1973 (3) SA 397 (A). The court quoted the passage to the effect that if there is a latent defect at the time of sale, the aedilitian remedy is available (unless excluded by agreement), and that the seller’s obligation and buyer’s right arise by operation of law, making it unnecessary for the buyer to frame the claim as breach of a term of the contract.

Applying that principle, the court concluded that the respondents had pleaded the essential allegations necessary to sustain a cause of action based on the aedilitian action of actio quanti minoris. Because the action was not founded on breach of contract, the court held that there was no need to plead that a contractual notice to remedy had been given to the excipient. The court therefore regarded the exception, which depended on the applicability of clause 9’s breach-notice mechanism, as bad in law.

5. Outcome and Relief

The court dismissed the exception. It made an order that the exception is dismissed with costs.

The effect of the order was that the respondents’ summons and particulars of claim were not struck out on exception, and the action based on latent defects and the pleaded price reduction claim could proceed.

Cases Cited

Phame (Pty) Ltd v Paizes 1973 (3) SA 397 (A)

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

Uniform Rules of Court, Rule 23(1)

Held

The court held that the respondents’ particulars of claim were not excipiable for failing to plead compliance with clause 9 of the sale agreement, because the pleaded claim was not based on breach of contract but on the aedilitian remedy of the actio quanti minoris arising from alleged latent defects. On that basis, the contractual notice-to-remedy procedure relied upon by the excipient was not a necessary averment for sustaining the respondents’ cause of action. The exception was accordingly dismissed with costs.

LEGAL PRINCIPLES

A claim based on the actio quanti minoris constitutes an aedilitian remedy available where a latent defect existed at the time of sale (unless excluded by agreement). The seller’s obligation and the buyer’s corresponding right in respect of such latent defects arise by operation of law, and a buyer pursuing this remedy is not required to aver and prove breach of a term of the contract as part of the cause of action.

Where a purchaser’s pleaded case is properly characterised as an aedilitian claim for price reduction rather than a contractual breach claim, contractual provisions governing breach and notice to remedy do not necessarily constitute essential averments required to sustain that cause of action for purposes of an exception under Rule 23(1).