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[2014] ZASCA 66
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Samancor Chrome Limited v Rham Equipment (Pty) Ltd (532/13) [2014] ZASCA 66 (19 May 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case
No: 532/13
In
the matter between:
SAMANCOR
CHROME LIMITED
….......................................................................
APPELLANT
and
RHAM
EQUIPMENT (PTY)
LTD
..............................................................................
RESPONDENT
Neutral citation:
Samancor v Rham Eqiupment
(532/13)
[2014] ZASCA 66
(19
May 2014)
Coram:
Lewis,
Ponnan and Shongwe JJA and Legodi and Mocumie AJJA
Heard:
09
May 2014
Delivered:
19 May 2014
Summary: A
statement in a judgment dismissing an application for the amendment
of particulars that claims made arose from more
than one contract is
mere surplusage where there is no proof as to the nature of the
contract or contracts and where the court
is not called upon to make
that finding. The statement thus did not render the question whether
there was a single contract res
judicata.
ORDER
On appeal from
:
South Gauteng High Court, Johannesburg (Baloyi AJ sitting as court of
first instance).
1 The appeal is
upheld with the costs of two counsel.
2 The order of the
high court is set aside and replaced with:
‘
The
plaintiff’s special plea of “res judicata” is
dismissed with costs.’
JUDGMENT
Lewis JA (Ponnan
and Shongwe JJA and Legodi and Mocumie AJJA concurring):
[1]
This appeal turns on whether a judgment handed down by Blieden J in
November 2009, refusing an application to amend the particulars
of
claim of the respondent, Rham Equipment (Pty) Ltd (Rham), in an
action for damages for breach of contract, determined that the
amendment introduced a new claim arising out of another contract (or
a composite contract) despite the absence of any evidence
as to the
contracts or their terms. The issue arose because after the amendment
was refused, and several years later, Rham filed
new particulars of
claim, and the appellant, Samancor Chrome Ltd, filed an amended plea,
asserting that there was but one indivisible
contract (a ‘maintenance
lease’ agreement) between the parties. Rham responded with a
replication asserting that Blieden
J’s judgment had decided
that there was more than one contract between the parties: the matter
was thus res judicata and
Samancor was precluded from asserting one
indivisible contract.
[2]
Rham applied for an order declaring that the issue was res judicata,
and that the remaining issues in the trial be adjudicated
once this
was decided. Baloyi AJ in the South Gauteng High Court concluded that
Blieden J had already decided that there was more
than one contract
between the parties, and that this rendered the defence raised by
Samancor res judicata. The appeal against his
decision is with Baloyi
AJ’s leave.
[3]
Although framed as a defence based on res judicata by Rham, it is
clear that, if Blieden J did in fact decide that there
was more
than one contract between the parties, the appropriate defence would
have been issue estoppel since the relief sought
in the respective
proceedings was clearly different. See, most recently in this regard,
Smith v Porritt
2008 (6) SA 303
(SCA) para 10;
Prinsloo NO
& others v Goldex 15 (Pty) Ltd & another
[2012] ZASCA 28
;
Caesarstone Sdot-Yam Ltd v World of Marble and Granite 2000 CC
2013 (6) SA 499
(SCA) paras 18 to 23 and
Hyprop Investments Ltd &
others v
NSC Carriers
[2013] ZASCA 169.
However, nothing
in this appeal turns on the distinction.
[4]
The litigation between the parties has extended over at least ten
years in a somewhat bewildering fashion. In June and July
2000 the
parties entered into a contract in terms of which Rham supplied
vehicular mining equipment for use in a Samancor mining
operation.
The precise nature of the contract is unclear. It has been alleged at
various times that the equipment was sold to Samanor
in terms of an
instalment sale agreement, alternatively that it was hired by
Samancor under an agreement of lease, and, in addition,
that Rham
undertook to maintain the equipment for a yearly fee. The contract
was alleged to have been concluded partly in writing
and partly
orally, and was alleged to be for a fixed period of five years. It is
undisputed that Rham delivered the equipment to
Samancor which paid
an agreed monthly sum over a period. According to Samancor, it
cancelled the contract in December 2002 as a
result of Rham’s
breach. According to Rham, it cancelled the contract as a result of
Samancor’s breach. The details
are not germane to the appeal.
[5]
In October 2004 Rham instituted action against Samancor for damages
in the sum of over R6 million, essentially in respect of
the
outstanding amount owed over the remainder of the period of the
contract and expenses incurred in repairing damaged equipment,
less
the amount that it had recovered by selling the equipment to a third
party.
[6]
Samancor delivered its first plea some two years later in September
2006, denying liability, and alleging that the agreement
was one of
lease and that Rham had undertaken to maintain the equipment but had
failed to do so. Almost three years later, in July
2009, Rham served
notice of its intention to amend its particulars of claim. The
proposed amended particulars alleged an instalment
sale agreement in
terms of which Rham undertook to maintain the equipment for the
duration of the contract. It set out in detail
the costs of
maintaining the equipment for each year, and alleged a number of
variations to the agreement in addition. It alleged
breaches of the
agreement by Samancor in failing to pay instalments and claimed
damages not only as a result of that breach but
also for damages
suffered as a result of not continuing with the maintenance of the
equipment in terms of the agreement.
The latter claim was for
over R3.6 million, in addition to the amount previously claimed.
[7]
Samancor objected to the amendment, and opposed the application by
Rham, brought on 5 August 2009, for the amendment. It was
this
application that Blieden J refused in November 2009. I shall return
to the judgment refusing the application. Suffice it to
say at this
stage that the learned judge held that the claim for damages arising
out of the maintenance agreement was a new claim
that had become
prescribed.
[8]
As I have said, when Rham filed amended particulars of claim in
December 2012 (in essentially the same form as its first set
of
particulars served in October 2004), Samancor pleaded, in response,
that ‘[f]rom its inception and after its amendment
on 22 March
2002 the contract was an indivisible full maintenance lease
agreement’. It was this that Rham, in a replication,
said was
res judicata, since Blieden J had held that there were two
agreements, or at least one composite agreement.
[9]
Rham’s replication averred that Blieden J had held that ‘the
claim embodied in the proposed amendment arose from
a different
agreement . . . or at best for the plaintiff [Rham], arose from a
different distinct part of a composite agreement’.
It
continued: ‘The refusal of the proposed amendment required
judicial determination of the nature of the agreement asserted
by the
plaintiff.’ Accordingly, said Rham, the court had found,
‘as a matter of fact, that the agreement for
the sale or lease
of the machines to the defendant [Samancor] is separate and distinct
from any agreement between the parties giving
rise to an obligation
on the part of the plaintiff to maintain the machines’. The
replication continued:
‘
Consequently
the defendant is estopped by the
exceptio rei judicatae
from
asserting that the agreement between the parties is a “full
maintenance lease contract” rather than agreements
of sale or
lease, on the one hand, and maintenance of the machines, on the
other.’
This
was the issue decided in favour of Rham by Baloyi AJ in the court
below, the court having ordered a separation of issues in
terms of
rule 33(4) of the Uniform Rules of Court.
[10]
The parties both argue that to determine whether the issue is res
judicata this court must interpret Blieden J’s judgment,
in
particular para 9, which read:
‘
It
is clear that the relief claimed . . . is additional to that claimed
in the existing particulars. It is added on top of the claim
for the
balance of the purchase price. It is not for an adjustment,
recalculation or clarification of the claim for payment of
the
balance of such price. I agree with the defendant’s counsel
that the right to this relief rests on a
different agreement
to that relied on for the relief in the existing particulars of
claim. Alternatively, and at best for the plaintiff, it rests on
a
different distinct part of a composite agreement
.’ (My
emphasis.)
[11]
Rham’s argument on appeal is that Blieden J had to make this
‘finding’ in order to rule that the claim for
damages for
breach of the maintenance agreement was different from that of the
claim for damages for breach of the sale (or lease)
agreement.
Samancor argues, on the other hand, that the statements about there
being two contracts or a composite contract with
distinct parts were
mere surplusage. I need not deal with these arguments in any detail.
In my view, Blieden J was not able
to make any finding on the nature
of the parties’ contractual arrangements. He was called on
merely to determine whether
the proposed amendment to Rham’s
claim should be permitted. There was no evidence led before him. And
neither of the parties
attempted to prove a contract or contracts on
particular terms.
[12]
Blieden J did no more than compare the two sets of particulars of
claim, the one claiming damages for breach of a lease agreement
and
the other claiming in addition damages for breach of an obligation to
maintain equipment. He held that the latter claim was
distinct, and
not simply a recalculation or adjustment of the claim for damages
sustained as a result of the breach of the sale
or lease agreement.
Because it had been made more than three years after the elapse of
the period of prescription, it had prescribed.
Blieden J relied in
this regard on
Firstrand Bank Ltd v Nedbank (Swaziland) Ltd
2004 (6) SA 317
(SCA) para 4, where this court said that where a
summons is amended, the running of prescription will be interrupted
‘provided
only that the right of action sought to be enforced
in the summons subsequent to its amendment is recognisable as the
same or substantially
the same right of action as that disclosed in
the original summons’. (See also the decisions referred to in
para 4 of
Firstrand
as well as
CGU Insurance Ltd v Rumdel
Construction (Pty) Ltd
2004 (2) SA 622
(SCA) para 5 and the
authorities cited there.)
[13]
Rham argued at the hearing of the appeal that the ‘finding’
as to the nature of the contract was necessary in order
to reach the
conclusion that the claim for damages in respect of the maintenance
obligations was new and different from that in
respect of the sale or
lease obligations. If that were not so, the initial claim could have
been amended even after the prescription
period had elapsed. It
relied in this regard on the judgment of Corbett JA in
Evins v
Shield Insurance Co Ltd
1980 (2) SA 814
(A) at 836C-E where this
court said:
‘
Another
aspect of the concept of a single cause of action in the realm of
prescription relates to the amendment of the plaintiff’s
claim
as originally pleaded by him. Where the plaintiff seeks by way of
amendment to augment his claim for damages, he will be
precluded from
doing so by prescription if the new claim is based upon a new cause
of action and the relevant prescriptive period
has run, but not if it
was part and parcel of the original cause of action and merely
represents a fresh quantification of the
original claim or the
addition of a further item of damages . . . .’
[14]
If, argued Rham, the proposed new claim had been no more than a fresh
quantification of damages or part and parcel of the original
claim,
then Blieden J would have allowed the amendment. He must thus have
decided that the cause of action was new, and implicit
in that was
the finding that there was more than one contract. It seems to me
that this argument is to the effect that Blieden
J was wrong to have
refused the amendment, an argument that Rham does not advance. I do
not see the logic in the argument. There
is no reason why there
cannot be separate and distinct claims arising from a single
contract. Indeed such claims are commonplace.
A contract may give
rise to multiple obligations and a breach of two or more may give
rise to different causes of action and thus
different debts.
[15]
In any event, in my view, Blieden J did not find as a matter of fact
that there were two different contracts or two distinct
parts of a
composite contract. As I have said, he could not do so given that the
issue was not before him and there was no evidence
on which to make
such a finding. The relief sought in the application for the
amendment was quite different from the relief sought
in the action. I
consider that the sentences in his judgment suggesting that there was
more than one contract or a composite contract
(quoted above) were
unnecessary for the decision that there were two distinct causes of
action or claims under consideration. They
were mere surplusage.
[16]
As Samancor submitted, in determining what was decided by Blieden J,
this court must have regard not just to the words in the
judgment but
to the actual relief sought and to what was placed before the court
in the application – the context in which
the judgment was
delivered. There is no doubt that Blieden J was not asked to
determine what the contractual arrangements between
the parties were,
and that he did not do so. In the circumstances the issue was not
decided and a plea of issue estoppel (couched
as res judicata) should
have failed.
[17]
In the circumstances:
1
The appeal is upheld with the costs of two counsel.
2
The order of the high court is set aside and replaced with:
‘
The
plaintiff’s special plea of “res judicata” is
dismissed with costs.’
CH
Lewis
Judge
of Appeal
APPEARANCES:
For
the Appellant: T J Bruinders SC (with him A J Lamplough)
Instructed
by:
Norton
Rose Fulbright South Africa, Johannesburg
Webbers,
Bloemfontein
For the Respondent:
J Suttner SC (with him A Pullinger)
Instructed by:
Paul Farinha
Attorneys, Johannesburg
Botha & De
Jager Inc, Bloemfontein