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[2021] ZAGPPHC 16
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O-Line (Pty) Ltd v Datacentric (Pty) Ltd (56269/2016) [2021] ZAGPPHC 16 (22 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER
JUDGES: NO
DATE:
25-01- 2021
Case
Number
: 56269/2016
In
the matter between:
O-LINE
(PTY) LTD
PLAINTIFF
(Reg.
No.: 1982/00082/07)
and
DATACENTRIX
(PTY)
LTD
DEFENDANT
(Reg.
No.: 1996/015808/07)
JUDGMENT
KUBUSHI
J,
This
judgement is handed down electronically by circulating to the
parties’ representatives by email and by uploading on
Caselines.
INTRODUCTION
[1]
This matter concerns a claim for the repayment of an amount of
R1 936 815
paid by the plaintiff, O-Line (Pty) Ltd
(“O-Line”) to the defendant, Datacentrix (Pty) Ltd
(“Datacentrix”)
for implementation by Datacentrix of SAGE
ERP X3 software (“the software”). O-Line is said to be in
the business of
manufacturing cable ladders and devices that supports
the cables. The software was to be the backbone of the business, as
it was
intended to do all manner of financial record keeping,
accounting, reporting, records stock levels, controls inventory and
monitors
the lead time on manufacturing.
[2]
It is common cause, that Datacentrix is the party that installed and
configured that
software for O-Line. The installation and
configuration of the software took place in terms of a written
agreement entered into
on
25 November 2013.
THE
SALIENT FACTS
[3]
On 25 November 2013, O-Line duly represented by Mr Graeme Smith and
Datacentrix, duly
represented by Mr Werner Lindemann, concluded a
written Implementation and Support Services Agreement (“the
agreement”),
in terms of which O-Line appointed Datacentrix to
render the services to O-Line and such appointment was accepted by
Datacentrix.
[4]
In terms of the agreement, Datacentrix agreed to the implementation
of the software
on behalf of O-Line and all related third party
modules support. In essence, the role of Datacentrix was to analyse
and design
with documentation, configure systems, develop required
systems and deploy the systems. Furthermore, Datacentrix was to
provide
what is called hand holding assistance post upgrade to O-Line
in order to ensure a successful use of the software in the first
month.
[5]
The software was to be implemented in two phases, namely: the
statement of work number
1 and the statement of work number 2, as
contained in the statement of work register. In accordance with the
statement of work
number 1, the parties agreed that Datacentrix would
supply and implement the software solution for O-Line, in line with
the requirements
that would be determined during the analysis and
design phase.
[6]
In the statement of work number 1, Datacentrix is alleged to have
undertaken the responsibility
of, amongst others, the analysis and
design, to ensure a configuration and deployment of the system. The
services to be rendered
in this phase were to commence on 1 October
2013 and were to be completed by 15 November 2013 at the cost of R252
000.
[7]
In terms of the statement of work number 2, the parties agreed that
Datacentrix would
supply and implement the software solution for
O-Line, in line with the requirements determined during the analysis
and design
phase conducted during the statement of work number 1. In
this project phase, Datacentrix was required to ensure the
implementation
of the financial, distribution and manufacturing
sectors of O-Line's business to the software (“the reporting
level”).
The services under this phase were to commence after
the approval of the analysis and design phase set out in the
statement of
work number 1, the go-live date was scheduled 23
weeks after the commencement of the works and completion was
scheduled 31
weeks after the commencement of the services under
statement of work number 2 at the cost of R1 747 900.
[8]
It was in terms of the agreement that, if Datacentrix breached any of
its obligations
under the agreement, O-Line would be entitled to
terminate the agreement on written notice. The parties agreed that
should Datacentrix
breach the terms of the agreement by failing to
comply with any service levels in any measurement period as provided
for in clause
17 of the agreement, O-Line would, before terminating
the agreement, require Datacentrix, on written notice, to submit a
rectification
plan within five business days. Such rectification
plan, which ought to be approved by O-Line before implementation
thereof, was
to detail the perceived cause of failure, together with
steps, resources and time required to rectify the identified failure.
It
was further agreed that should Datacentrix fail to submit the
draft rectification plan or fail to implement any agreed
rectification
plan, within the stipulated time, then such failure
would constitute a breach of the agreement entitling O-Line to cancel
the agreement.
[1]
[9]
The agreement also stipulated in clause 18 that, if there has been a
material breach of the agreement
and it has not been remedied within
thirty (30) days of having been called upon to do so in writing, the
innocent party may, in
its discretion and subject to the provisions
of clause 19, be entitled to terminate the agreement on written
notice.
[10]
In a further term of the agreement Datacentrix warranted that it
would employ a sufficient number
of suitably trained staff to provide
the services contemplated in the agreement and to achieve the service
levels agreed upon.
[2]
[11]
O-Line avers in its particulars of claim that it has complied with
its obligations under the
agreement and in particular, made payment
to Datacentrix in the cumulative amount of R1 936 815, in
respect of the services
that Datacentrix was required to render under
the two statements of work. It is this amount that O-Line is claiming
in these proceedings.
[12]
The reason why O-Line seeks Datacentrix to repay the amount it is
claiming is that O-Line alleges
that Datacentrix breached the terms
of the said agreement in that:
12.1
it failed to successfully configure and implement the software to
O-Line's financial, distribution and manufacturing
sectors, as a
result of which O-Line was unable to utilise the software for the
purposes for which it was purchased; and
12.2
in respect of the warranty, Datacentrix failed to provide a
sufficient number of suitably trained staff to
perform the services
in accordance with the agreement, as the staff provided did not have
the requisite business process system
management or software
application skills to successfully configure and implement the
software to O-Line's
financial,
distribution and manufacturing sectors.
[13]
Pursuant to the alleged breach, O-Line wrote to Datacentrix on 8 June
2015, demanding the latter
to submit a comprehensive proposal stating
how its failure to provide the services in accordance with the
agreement, will be urgently
remedied. Datacentrix was given a time
limit of 12 June 2015 within which to submit the proposal for perusal
by the Board (O-Line’s
Board). The proposal was submitted to
O-Line on 17 June 2015. The proposal as provided by Datacentrix was
not to the satisfaction
of O-Line. In response to the said proposal,
O-Line suggested certain amendments which it appears were also not to
the satisfaction
of Datacentrix, as Datacentrix did not respond to
O-Line’s suggested amendments.
[14]
The agreement provided for the resolution of such a dispute, by
referring it to an independent
expert for determination, which
Datacentrix failed to do. In so doing, O-Line submits that
Datacentrix has breached the terms of
clause 17 of the agreement.
Alternatively, O-Line alleges that Datacentrix has failed to submit a
draft rectification plan as envisaged
in the agreement.
[15]
As a consequence of the alleged breach of the warranty and/or clause
17 of the agreement and/or
failure to successfully configure and
implement the software to O-Line's financial, distribution and
manufacturing sectors, O-Line
contends that it was entitled to
terminate the agreement which it duly did on 22
October 2015, by a letter to
Datacentrix.
[16]
The letter in which O-Line relied for the cancellation of the
agreement (“the cancellation
letter”) became a bone of
contention during the hearing. Mr
Iles for O-Line, objected
to the line of cross examination questions
by Mr
Wagner, on behalf
of Datacentrix, in relation to this letter. The
cross examination by Mr Wagner sought to elicit that the cancellation
letter could
not be regarded as having cancelled the agreement
between the parties because at the time this letter was written the
agreement
had long been terminated by effluxion of time and
Datacentrix had already performed.
[17]
Mr Iles for O-Line, objected to the cross examination on the ground
that the point sought to
be elicited in the cross examination was not
raised as a defence in Datacentrix’s plea and was as a result a
defence by ambush.
In its argument, O-Line contended that the
agreement had not been terminated in June 2015 but was cancelled by
its cancellation
letter of 15 October 2015. Conversely, Datacentrix
argued that the agreement came to an end when what it had been
mandated to do
by the agreement was completed, that is, in June 2015,
which was much earlier than 15 October 2015. It was argued further
that
O-Line cancelled the agreement when Datacentrix had already
completed performance. O-Line did not agree to this argument and
contended
that there were still on-going discussions between the
parties as to how the software was to operate, post June 2015. There
was,
therefore, an underlying question of the time of termination of
the agreement between the parties.
[18]
Finally, the issue that fell for determination was whether on the
papers as they stood, Datacentrix’s
counsel was entitled to
cross examine O-Line’s witnesses, lead evidence and/or argue
that by the time of the purported cancellation
of the agreement in
October 2015, the agreement between the parties had already been
discharged by effluxion of time and Datacentrix
had already
performed.
[19]
I, in the end, ruled in favour of O-Line and dismissed the objection,
thus allowing O-Line to
rely on this letter for its cancellation of
the agreement.
[20]
It is therefore O-Line's claim that, flowing from its cancellation of
the agreement and given
the fact that the software has not been
implemented and configured in the manner contemplated in the
agreement, it is entitled
to the repayment of the full amount of R1
936 815 which it paid to Datacentrix for the service it was required
to render under
the agreement.
[21]
To the extent that O-Line may be required to restore any performance
to Datacentrix following
the cancellation of the agreement, O-Line
contends that it is excused from restoring performance by Datacentrix
which was aimed
at implementing and configuring the software in the
manner contemplated by the agreement, all of which proved to be of no
use to
O-Line.
[22]
Datacentrix in its plea to O-Line’s claim admits the agreement
and that O-Line made certain
payments to it, but contends that there
is no basis in law for O-Line to claim the repayment of the contract
price. In particular,
Datacentrix denies that it breached the terms
of the agreement as alleged by O-Line or that O-Line was entitled to
cancel the agreement
and puts O-Line to the proof thereof.
Datacentrix pleads also that
the letter dated 8
June 2015 by O-Line to Datacentrix did not constitute a request for
the draft ratification plan as envisaged
in the agreement, but was a
request by O-Line for assistance of the difficulties it was
experiencing due to its own failures and
therefore Datacentrix was
not obliged to refer such request for assistance to the independent
expert. This cause of action
was not pursued during trial, the
parties having eventually agreed that the purported rectification
plan remained in draft format,
to date of the trial.
[23]
The contents of the letter of 8 June 2015 (“the breach
letter”), as will more fully
appear later in this judgment,
turned out to be a contentious issue in determining whether it
constituted a breach letter warranting
a proper termination of the
agreement as envisaged by the agreement.
[24]
The evidence also shows that due to the alleged software failures,
O-Line
called
in
one Mr Churchward Mucheki (“Mr Mucheki”)
an
X3 software consultant to audit the system. Mr Mucheki recommended
that the software be removed and be reinstalled afresh. However,
due
to O-Line’s financial constraints, it contracted Mr Mucheki to
repair the system. Mr Mucheki was not able to repair all
of the
functionalities that were not functioning.
THE
WITNESSES
[25]
O-Line’s case rested, in the main, on the evidence of two
witnesses to support its claim.
The first is Mr Willem Burger
Laubscher (“Mr Laubscher”), a factual witness who was to
provide a background of what
O-Line does, what the software was meant
to do and how the process worked. The second witness is Mr
Ferdinand Willem Hartzenberg
Kruger (“Mr Kruger”). This
witness wore two hats, as he was both a factual witness, he was
involved in these events,
and he also testified as an expert.
The
evidence of Datacentrix, on the other hand rested solely on the
evidence of Mr Petrus Arnoldus Fouché (“Mr Fouché”)
who was classified as an expert for the purposes of this matter.
[26]
Both parties presented expert evidence on the causes of the software
failure. An objection as
to the admissibility of the evidence of
Datacentrix’s expert, Mr Fouché, was raised by O-Line’s
counsel during
the hearing. The objection was in relation to the
admissibility of the evidence of Mr Fouché that was elicited
during the
cross examination of Mr Kruger and that was not contained
in Mr Fouché’s summary of evidence.
[27]
In my ruling that followed, I dismissed the objection on the ground
that the evidence objected
to was valuable and would be of assistance
in deciding the issues before me. As a result, I granted an order
that Datacentrix provide
a supplemented summary of Mr Fouché’s
evidence which would include the evidence elicited by Mr Kruger
during his cross
examination. O-Line was also afforded an opportunity
to consider the supplemented summary of the evidence of Mr Fouché
and
to consult further with Mr Kruger, if necessary.
[28]
During trial, both counsel attacked each other’s expert’s
summary of evidence for
being defective for want of reasons for their
respective opinions. I, however, find it not necessary, in this
judgment, to evaluate
the differences and disagreements between the
experts’ evidence. As correctly submitted by counsel for
O-Line, there is sufficient
evidence on record to assist in
determining the issues before me without the need to delve into the
experts’ evidence.
[29]
During the hearing of this matter Mr Iles for O-Line applied for the
admission of Mr Mucheki’s
report as hearsay evidence. Although
the application was opposed, I ruled that the report be provisionally
admitted into evidence.
Both parties did not address the issue of the
admissibility of this report in their respective closing arguments
and heads of argument.
For the same reason provided for not dealing
specifically with the evidence of the parties’ experts, I am
also not going
to go into the Mucheki’s report, as well.
[30]
It is common cause that the agreement and the amount paid by O-Line
to Datacentrix are not at
issue. This matter, therefore, falls to be
determined mainly on two questions, namely, the factual and legal
question.
THE
ISSUES FOR DETERMINATION
[31]
The factual question that this court is called upon to determine is
whether Datacentrix in fact
breached the agreement in the manner
suggested by O-Line and whether consequent upon the said breaches the
agreement was properly
cancelled.
[32]
The legal question is whether O-Line is entitled to be repaid the
full amount of money it paid
to Datacentrix under the agreement.
[33]
It is Datacentrix’s argument that O-Line has not made out a
proper case that it was entitled
to cancellation, never mind a case
that it be entirely excused from its primary obligation of
restitution.
[34]
I deal hereunder with the two questions, starting first with the
legal question of whether, under
the circumstances of this matter,
O-Line is entitled to be repaid the full amount it paid to
Datacentrix.
Is O-Line Entitled
to be Paid the Amount Claimed?
[35]
O-Line in its particulars of claim, is claiming for the repayment of
the sum it paid to Datacentrix
in the amount of R1 935 815
in respect of services rendered by Datacentrix to O-Line, which
services are alleged to be
not properly rendered as agreed.
Datacentrix does not deny that the amount was paid to it.
[36]
O-Line’s counsel in his submissions in chief, referred to a
claim for “restitutional
damages” which Datacentrix’s
counsel took issue with. However, in his reply to Datacentrix’s
heads of argument,
O-Line’s counsel confirmed that the word
“restitutional damages” employed in the submissions in
chief was an
adoption of the language employed by the authors of
Amler’s
Precedents of Pleadings
.
[3]
Counsel confirmed that O-Line’s claim is based, as pleaded, on
restitution and not “restitutional damages”. Therefore,
this matter falls to be decided on a claim for restitution.
The Applicable
Law
[37]
It is generally accepted that the rules in regard to restitution are
substantially the same whether
such restitution is coupled with
nullification of a contract on the ground of misrepresentation, undue
influence or duress; or
follows on rescission because of a latent
defect or breach of contract. In the absence of an agreement to the
contrary, each party
is, on rescission, bound to restore to the other
that which he has received in terms of the contract.
[4]
The rule is founded on equity and will be departed from where justice
requires such departure.
[5]
[38]
In
Botha,
[6]
the court held that when dealing with a claim for restitution the
principle of reciprocity comes into play.
[39]
It is trite that the law of contract in South Africa is infused with
principles of equity, fairness,
justice and reasonableness through
the various doctrines that apply to the law of contract. One of those
doctrines is reciprocity.
[40]
When a contract is cancelled the principle of reciprocity requires a
primary obligation that
the parties be put back in the position that
they were before the contract was entered into. It means that the
parties must return
to the position that they were in and each party
must give back what it received from the other party.
[41]
It is also trite that the rule of restitution, which is a part of the
principle of reciprocity,
is not inflexible. It can be adapted from
time to time to ensure that the other party is not unduly benefited
over the other party
when restitution takes place. This is where
equity comes in. And for that reason, in certain limited
circumstances, a party that
claims restitution is sometimes excused
from counter prestation, that is, from giving back what was
received.
[7]
[42]
However, the party that wants to be excused has the
onus
of
proof to show why the primary obligation of the restitution must not
be complied with. O-Line must, therefore, prove why it
must be
excused from giving back, either, what it received or the monitory
value thereof.
The Analysis
[43]
The parties agreed that in a claim for restitution, as is the case in
this matter, the
status
quo ante
should be maintained,
[8]
that
is, each party must be returned to the position it was before the
agreement was concluded. Each party must return that which
it
received in terms of the agreement. The parties are also in agreement
that in certain circumstances, an innocent party may be
excused from
counter prestation, that is, excused from returning that which it
received. In such circumstances, the party so excused
must provide an
explanation as to why it should be so excused.
[9]
[44]
As already stated, O-Line seeks repayment of the amount it paid to
Datacentrix in full. O-Line
alleges in its particulars of claim that
it should be paid the full amount it paid to Datacentrix because what
it received from
Datacentrix is of no use to it. It further submits
that what it received from Datacentrix is not what it contracted
Datacentrix
to produce.
[45]
Conversely, O-Line contends that it should be excused from returning
that which it received from
Datacentrix. Its argument, why it should
be so excused is that it is impossible to return to Datacentrix what
it (O-Line) received
from Datacentrix.
Is O-Line
entitled to part payment?
[46]
The issue to be determined in this regard is whether it is possible
for O-Line
to return to Datacentrix what it
received from Datacentrix.
[47]
In support of its claim that it is impossible for it to restore that
which it received from Datacentrix,
O-Line relies on the case of
Hall-Thermotank
Natal
,
[10]
which concerns the supplier of work and labour. It is a service case
like the present one, wherein that which was performed could
not be
given back. The present case involves the implementation of a
software which cannot be given back. It is contended that
O-Line
cannot un-configure the software or give back the time that has been
spent in configuring the software.
[48]
Datacentrix’s submission, is that O-Line cannot seek to be
excused in full because it continues
to use some of the software as
configured by Datacentrix. It fortifies this submission by means of
the evidence tendered by Messrs
Laubscher and Kruger who referred to
two levels of use of the software. In accordance with their evidence
the first level is the
so called ‘day to day use’ and the
second level is the reporting functional level. Both witnesses
confirmed that the
day to day functioning of the programme works fine
– there is no problem with it. It is only the second level, the
reporting
functional level that has some difficulties. Both witnesses
confirmed further that the statement of work number 1, which is the
analysis and design phase, was completely done and that it worked
well.
[49]
Thus, it is Datacentrix’s submission that O-Line who seeks on
an equitable basis a complete
release from its obligation to return
that which was received on the basis that what was received is of no
use to it, has failed
to prove its case because clearly, based on the
evidence of Messrs Laubscher and Kruger, what was received is of some
use to O-Line.
[50]
In the alternative, Datacentrix, contends that because the software
was useful in part, O-Line
is not entitled to the full amount it paid
to Datacentrix, but should, at the very least, work out what is the
useful part of the
software, assign some monitory value to it and
seek payment of the amount paid less the amount for the useful part.
The argument,
therefore, is that the claim by O-Line should be
proportional to the part of the software that is not working.
[51]
In the defence raised by Datacentrix, the case it relies upon shows
that this is an equitable
determination the court has to make, the
question for determination, therefore, is whether it is equitable for
O-Line to be repaid
the full amount paid to Datacentrix whilst it has
derived some benefit from the software. The other side of the
equation, is how
inequitable it is to Datacentrix to be out of pocket
of the amount claimed.
[52]
O-Line’s submission that it is unknown how inequitable it is to
Datacentrix to be out of
pocket of the amount claimed because no
evidence was led in that regard, is correct. This, according to
O-Line, is an evidential
question and evidence ought to have been led
to prove such. Without this evidence I only have to deal with the
question of whether
it is equitable for O-Line
to be repaid the full amount it paid to Datacentrix whilst
it derived
some benefit from the software.
[53]
Relying on the Constitutional Court judgment in
Botha,
[11]
which I find not applicable herein, Datacentrix argues that because
the computer programme functioned fully on the first level
and the
difficulties were limited, when this is compared with the granting of
cancellation and therefore restitution, in circumstances
where the
majority of the work was done in accordance with the tender of the
agreement, restitution in full would be a disproportionate
penalty
for the breach.
[54]
In
Botha,
where the buyer had paid 80% of the purchase price
but then defaulted and the seller cancelled the sale and claimed
forfeiture
of the amounts paid in terms of the agreement, the
Constitutional Court found that the cancellation of the agreement of
sale in
such circumstances would be a disproportionate sanction and
penalty for breach of the agreement by the buyer and would thus be
unfair. Cancellation, in those circumstances, the court found, would
result in the buyer losing her right to claim transfer of the
property into her name and in the forfeiture of three-quarters of the
purchase price which she had already paid. The court was
of the view
that the sanction for breach sought by the seller would be
disproportionate in relation to the considerable portion
of the
purchase price already paid.
[55]
In its
obiter
dicta
the court stated that depriving a buyer of her entitlement to
transfer of the property would be a disproportionate sanction in
relation to the considerable portion of the purchase price the buyer
had already paid, and would thus be unfair. Accordingly, the
court
refused to enforce the seller’s right to cancel the sale
agreement, on the basis that
cancellation
of the sale agreement would be “a disproportionate penalty for
breach” and unfair in the circumstances
of the case,
particularly where three-quarters of the purchase price had already
been paid.
[12]
[56]
This decision led to differing interpretation to the key issue
whether an agreement (or the enforcement
thereof) would be invalid
merely because a court believed the agreement to be unfair,
unreasonable or “disproportionate”,
which issue was
finally resolved in the Constitutional Court judgment in
Beadica
231 CC.
[13]
[57]
In
Beadica
231 CC,
[14]
the court clearly stated that the Constitutional Court decision
in
Botha
did not change the law to allow a court to refuse to enforce an
agreement merely because the court believed it to be
‘disproportionate’,
unfair or unreasonable. The court
stated further that
Botha
dealt with the right of a buyer of land
in
terms of section 27 of the
Alienation
of Land Act
68
of 1981 (“the
Alienation
of Land Act
&rdquo
;),
to
have the land registered in the buyer’s name if the buyer has
paid at least half of the purchase price. The case, accordingly,
dealt with the interpretation of
section 27
(1)
[15]
of the
Alienation
of Land Act
and
whether Ms Botha, the buyer therein, could exercise her
section
27
(1) right even though the seller had cancelled the sale. The
court’s statement, regarding disproportionality in
Botha
was found to be made in the context of interpreting the statutory
scheme created by
section 27
(1) of the
Alienation
of Land
Act
>,
and finding that Ms Botha retained her
section 27
(1) right. Hence,
my view that
Botha
does not find application in the present circumstances
[58]
And if what O-Line received from Datacentrix is what cannot be seen,
as is said in
Hall-Thermotank
, which is the number of hours
that Datacentrix spent in configuring the software, it will be
impossible for O-Line to give it back.
[59]
O-Line argues further that for Datacentrix to rely on the evidence of
Messrs Laubscher and Kruger
that the analysis phase was done
correctly does not carry any weight. This is so because, as argued,
on the totality of the evidence
tendered, it could not be so because
Mr Fouché testified that the analysis document is inadequate
and does not begin to
capture the information which was required for
the purpose of configuring the software.
[60]
On evidence it cannot be said with certainty that level one of the
software was working perfectly
as testified by Messrs Laubscher and
Kruger. It should be remembered that for the second phase of the
software to be operational
it depended on the proper functioning of
the first phase of the software. To my mind, that the second phase of
the software was
not working, simply means that the first phase was
not correctly configured hence it could not operationalise the second
phase.
[61]
The evidence of Mr Fouché, in this regard, is instructive. Mr
Fouché, as we can
remember is Datacentrix’s expert
witness, who gave evidence to the effect that there was information
that was missing from
the analysis phase that made the second phase
of the software not to work. It should also be recalled that the
configuration of
a software such as the X3 could only be done by
experts who are technically trained in that field. None of O-Line’s
employees
were said to be technically trained in that regard.
Datacentrix had professed to have the necessary trained staff, hence
the evidence
of Mr Fouché that O-Line employees would not have
known what information was required and/or lacking and the
consequences
thereof, without the guidance of Datacentrix’s
technically trained staff. It does not appear from the evidence on
record
that this was done. Mr Fouché as it can be recalled was
not part of the team in the analysis and design phase and could not
provide information about what happened during that phase.
[62]
In the same breath, relying on
Hall-Thermotank
case
,
O-Line’s counsel argues that, it would be impossible to expect
of O-Line to return the number of hours that Datacentrix
used when
configuring the software. To the contrary, Datacentrix argues that
O-Line should restore the monitory value of that which
it received as
it is not impossible to calculate the monitory value thereof.
[16]
This argument by Datacentrix is meritless as the explanation, which
O-Line proffers in this regard is reasonable. O-Line’s
explanation is that it is impractical on the facts of this case to
have offered any kind of meaningful quantification due to the
fact
that a number of changes were made to the software in September 2015
to render it usable by Mr Mucheki, at a considerable
cost to O-Line.
By the time the trial was instituted it was not possible to inspect
or audit the software to determine precisely
how it had been
configured.
[63]
Of importance is that O-Line has gone live, it cut off its old
software to use the new software.
It cannot go back, in the sense
that it cannot un-configure that which was configured and that is why
O-Line maintains that it
cannot restore what it received from
Datacentrix.
Is O-Line
Entitled to the Full Payment?
[64]
In support of its claim for the restoration
of the full amount that it paid to Datacentrix, O-Line
relies on the
decision of the court in
Masters
.
[17]
In that judgment, a family had booked a holiday to Inhaca Islands in
Mozambique for the purposes of doing some snorkelling off
that
island. They had paid a tour package price to do snorkelling, which
included the plane tickets and accommodation, but not
inclusive of
the snorkelling. They were going to pay for the snorkelling
when they got to the island and that was a relatively
low price. When
they got there the snorkelling was not available. The court ordered
that the plaintiff was entitled to the return
of the full tour
package price because the purpose for which the plaintiff and his
family made the trip was not given to them.
[65]
But, even though O-Line may in principle be entitled to repayment of
the full amount claimed,
Datacentrix raises a defence to the claim.
In refusing to repay the amount, Datacentrix’s defence is that
O-Line seeks
to be released wholly but has not put the court in a
position at all, either by way of pleadings or by way of evidence, to
determine
a whole or partial repayment.
[66]
In denying that O-Line is entitled to the full repayment or any
payment at all, Datacentrix insists
that O-Line must prove what is
alleged in its particulars of claim. It is Datacentrix’s
submission that because in the pleadings
O-Line’s reason for
its release from counter prestation is that what it received is of no
use to it, in order to succeed
in its claim, O-Line must prove that
what it received from Datacentrix is of no use to it.
[67]
Datacentrix in its proposition relies on the evidence of Messrs
Laubscher and Kruger which establishes
that there is a statement of
work number 1 that was done separately from the statement of work
number 2, and was concluded and
is working properly. The
configuration in terms of the statement of work number 2 is said to
have been implemented over a very
long period of time, from 2013
until 2015. The work was done and there was no evidence of any
complaint about the quality of work
during that time. The go-live
agreement was reached on 8 January 2015 confirming that the work
which had been done up to that time
had been properly tested and
accepted. The first complaint only came in June 2015, by means of the
purported breach letter.
[68]
Thus, it is Datacentrix’s submission that O-Line who seeks to
be refunded the full amount
that was paid to Datacentrix, has failed
to prove its case because clearly, based on the evidence of Messrs
Laubscher and Kruger,
the software as configured by Datacentrix is
used by O-Line.
[69]
I find the explanation given by O-Line why it should be paid the full
amount it paid to Datacentrix
to be satisfactory. For, on the
totality of the evidence proffered, if the software provided by
Datacentrix to O-Line is not what
O-Line had contracted Datacentrix
to configure, the software would be of no use to O-Line even if part
thereof is working. The
analogy used by O-Line’s counsel in
this regard that it is like hiring somebody to come and install email
on the computer
and once the email is installed, the email can be
opened and the message typed but it does not send, is instructive. Of
course,
such email, even though installed will be of no use.
Similarly, in this instance, the software can do the day to day work
as testified by Messrs Laubscher and Kruger. The question is whether
the software is of use to O-Line and/or whether the software
as it
is, is what O-Line contracted Datacentrix to configure.
[70]
The evidence on record has established that
O-Line had always had a software that enabled it to do
the day to day
running of its operations, the ASCA software. By commissioning the
services of Datacentrix, O-Line wanted to improve
its software system
to produce more than the day to day services that ASCA was doing. It
wanted to be able to record the
financial,
distribution and manufacturing sectors of the business.
Without this new functionality the software installed by Datacentrix
is of no use to O-Line and it is also not what O-Line commissioned
Datacentrix to configure; that which Datacentrix has been contracted
to configure, the recording functionality, is not working.
[71]
I am in agreement with O-Line’s
counter argument to Datacentrix’s submission that O-Line
is not
entitled to the full restoration of the amount claimed because the
software is working in part, that, that is not what O-Line
contracted
Datacentrix for. O-Line did not ask for parts of the software to
work. The software, according to O-Line, is a package
and should work
in its entirety or it should not work at all. Hence it cannot be
divided into parts – those working and those
not working.
Correctly, so argued, the software like the email is a package. It
either works or it does not work. What O-Line had
commissioned
Datacentrix to do, was to configure the whole package and not just
part of it. That there was any part of the software
that was not
working confirms O-Line’s averment that the software was of no
use to it.
[72]
The argument that O-Line has used the working part of the software
for a long time, since 2013
into 2015, before it could complain holds
no water. Like in
Masters
, where the plaintiff had to use part
of the days of the tour package whilst waiting for the defendant to
organise the plaintiff’s
passage back to South Africa, in this
instance, O-Line had to make use of the working part of the software
whilst awaiting fulfilment
of the agreement by Datacentrix. Put
differently, whilst waiting to ascertain whether Datacentrix has
correctly configured the
software, O-Line had to make do with the
part of the software that was working. More so, O-Line had to employ
the services of Mr
Mucheki in order to try and fix that which was not
working before it can finally say that the software is of no use to
it.
[73]
Datacentrix is correct in its argument that O-Line has not made out a
case for part payment of
what it is presently using. Taken from
O-Line’s papers, it is quite clear that O-Line is contending
for the full amount that
was paid to Datacentrix. In this respect,
the court in
Hall-Thermotank
[18]
stated
as follows:
“
Why
should an innocent party be deprived of his right to rescind on the
ground of fraud or material breach of contract and to be
paid back
with what he has parted because he is unable through no fault of his
to restore the work and labour attended by the party
at fault?
Which one of the two should be the loser? As foot 4.1.1 says
restitutio in integrum is based on sheer common
fairness. It
does not seem to me unjust that the party who committed the fraud or
the breach should bear the loss rather
than that the aggrieved party
should forfeit his remedy to rescind and be confined to a claim for
damages.”
[74]
Taking into consideration the explanation provided as to why O-Line
should be excused from counter
prestation, I therefore hold that
O-Line is entitled to the repayment of the full amount it paid to
Datacentrix.
[19]
[75]
The question that follows is whether there was a breach of the
agreement in the manner suggested
by O-Line and if so, whether
consequent upon such breach the agreement was properly cancelled,
thereby entitling O-Line
to the
repayment of the amount claimed. According to O-Line, as a
consequence of Datacentrix’s breach of the warrantee and
the
failure to implement the software it was entitled to terminate the
agreement. It is Datacentrix’s submission that it
did not
breach the agreement in the manner alleged by O-Line, or at all.
Was there a Breach
of the Agreement as alleged by O-Line?
[76]
As already stated, O-Line relies on the warranty breach and the
failure to configure the software.
Datacentrix’ argument is
that O-Line failed to prove that it was entitled to cancel the
contract based on the alleged breaches.
The submission by Datacentrix
is that the evidence showing a causal connection between its
purported breaches and the eventual
complaints of O-Line are tenuous
at best, and that on the probabilities the difficulties O-Line
experienced with the software were
caused by O-Line’s failure
to properly partake in the analysis and design phase, which resulted
in the build not complying
with its wishes, rather than a failure by
Datacentrix to build in accordance with the functional design.
[77]
With respect to the alleged breach that Datacentrix failed
to
successfully configure and implement the software to O-Line's
financial, distrib
ution and manufacturing sectors, Datacentrix
contends that it is vital to note that its contractual obligation was
not to build
software solution in accordance with O-Line’s
eventual wishes and expectations, but to build
it in accordance with
the requirement determined during the analysis and design phases.
[78]
A further submission by Datacentrix is that it was never
contractually obliged to ‘successfully’
configure and
implement the software. Its obligation arising from the
statement of work number 2 was only to configure the
software in
accordance with the requirements determined in the analysis and
design phase. Datacentrix further submits that,
although some
errors in the functioning of the software were pointed out by O-Line,
no evidence was presented that such errors
were the result of a
failure by Datacentrix to implement the software otherwise than ‘in
line with the requirements that
were determined during the analysis
phase’ and there is no complaint about the work during the
analysis phase because it
was properly done.
[79]
As regards the warranty breach, according to Datacentrix, the high
water mark of O-Line’s
evidence in this regard was that there
was purportedly a high turn-over of Datacentrix’s staff over
the time period of the
project, but very little detail thereof could
be provided. In any event, a high turnover of staff does not
constitute a breach
of the warranty. No evidence was presented about
the fact that there were purportedly too few staff members provided,
and the issue
of the suitable training of the staff members was also
not appropriately dealt with, so it was argued.
[80]
The evidence presented by the experts, on both sides, in respect of
whether or not the agreement
was breached and by whom, was detailed,
complex and mostly technical. As I have earlier indicated, there is
sufficient evidence
on record to assist in finding whether or not
Datacentrix breached the agreement, or who of the parties caused such
breach, without
the need to evaluate the differences and
disagreements between the experts’ evidence. As,
correctly contended for by
O-Line, there are a number of primary
facts which support the inference that the software failings arose
from breaches of the agreement
by Datacentrix.
[81]
It is trite that the process of inferential reasoning calls for an
evaluation of all the evidence
and not merely selected parts.
The inference that is sought to be drawn must be ‘consistent
with all the proved facts.
If not, then the inference cannot be drawn
and it must be the ‘more natural, or plausible, conclusion from
amongst several
conceivable ones’ when measured against the
probabilities.
[20]
Failure to Configure
the Software Breach
[82]
As regards the alleged breach by Datacentrix’s failure to
configure the software, it is
common cause, Datacentrix has conceded
as much, that some of the functionalities which were contracted for,
were not present or
did not work. It is also not in dispute that the
software was to be implemented in line with the conceptual document
(business
specification) which contained the requirements which were
determined during the analysis phase and described the functionality
which the software was to provide.
[83]
In its evidence, which has not been contradicted, O-Line provided
examples of the functionalities
which the software was supposed to
have in terms of the conceptual documents, which were not present,
namely:
83.1
The enterprise work bench: the functionality was meant to do the
automatic
ordering, based on a history that has been build up by the
system.
83.2
Currency conversions, which after installation, did not work
automatically.
83.3
Inter-site purchasing, that did not work until fixed
by
Mr Mucheki.
83.4
Purchase tolerances did not work, so that over-supplies need to
be
dealt with manually.
83.5
The material requirements planning feature of the software
did not
work. This feature was supposed to generate suggested purchase
orders. Based on stock control levels, stock on hand, sales
orders,
purchase orders and lead times, suggested purchase orders were to be
generated which would allow planners to evaluate the
suggestions and
action it from enterprise planning work bench.
83.6
The material requirement planning feature was meant to work together
with the enterprise planning work bench.
83.7
Financial budgets feature was not working. This functionality was
supposed to assist with the preapproval request for purchasing
against the available budget for the item sought to be purchased.
83.8
Work order scheduling, was also not working. This is a manufacturing
planning system which would have put the factory planners in a
position to map out the manufacturing of a set of cable ladders.
83.9
Dashboards functionality; the Dashboards were meant to configure,
on
a daily basis, specific information that is important for each
division, like the approval of purchase orders over a certain
amount
of money or the amount, the number of GRVs done the previous day, and
the outstanding list on the galvanizers.
[84]
As it can be remembered, Datacentrix’s response to at least
some, if not all of this lack
of functionalities, was to contend that
for these features to work properly, O-Line needed to provide the
correct information.
I have already made a finding rejecting
this argument by Datacentrix and found that the mere fact that the
second phase was unable
to function is an indication that the first
phase of the software was not properly configured, hence it could not
operationalise
the second phase.
[85]
The further uncontested evidence of O-Line is that Mr Mucheki, an X3
consultant, was called in
to audit the system. A number of problems
were identified by Mr Mucheki who recommended that the software be
removed and installed
afresh. Even though some of the problems were
attended to by Mr
Mucheki, not all problems were resolved, as O-Line did not have the
budget to effect all of the necessary repairs.
The Warranty Breach
[86]
As regards the warranty clause, the fact that Datacentrix failed to
configure the software correctly
and in accordance with O-Line’s
requirements, supports the inference that the project was not staffed
with suitably trained
persons.
All
the aforementioned evidence show that the requirement of the breach
clause was fully satisfied
[87]
I find therefore that, Datacentrix breached the agreement as
contended for by O-Line and O-Line
was, thus, entitled to cancel the
agreement. Nevertheless, Datacentrix raises a defence that the
agreement was not properly cancelled.
Was the agreement
Properly Cancelled?
[88]
Datacentrix’s submission is that, if it is found to have
breached the agreement, then in
that event, its defence is that
O-Line has failed to strictly comply with the procedure and
formalities to cancel the contract
based on the alleged breaches.
Datacentrix, submits that O-Line has not made out a case that it was
entitled to cancel the agreement,
and, if O-Line was not entitled to
cancel the agreement, then its attempt at cancellation is void and of
no legal effect.
In the premises, O-Line cannot then claim
relief that would only follow from a valid cancellation, so it is
argued.
[89]
In support of this argument, Datacentrix’ s counsel referred to
LAWSA
[21]
dealing with the
well-established authority in law which states that cancellation
(rescission) is an ‘. . . extraordinary
remedy of which the
innocent party may avail him- or herself only in certain special
circumstances’.
The Legal Principles
[90]
In the Full Bench decision in
GPC
Development CC
,
[22]
the court laid down the following legal principle regarding
cancellation of an agreement:
“
[27]
Counsel were in agreement regarding the applicable legal
principles. In his judgment Nuku J relied on a passage
in the
6
th
edition
of
Christie.
The
following passage in the 7
th
edition is
to the same effect:
“
If
the contract lays down a procedure for cancellation, that procedure
must be followed or a purported cancellation will be ineffective.”
In
the later edition the author refers to
Bekker
,
Hand
and
Hano
Trading
[23]
in
support of the approach.
[28]
In
Bekker
Yekiso J, relying
on the decision in
Godbold
, held as follows:
[17] The
purpose of a notice requiring a purchaser to remedy a default is to
inform the recipient of that notice of what is required
of him or her
in order to avoid the consequences of default. It should be couched
in such terms as to leave him or her in no doubt
as to what is
required, or otherwise the notice will not be such as is contemplated
in the contract.
[29]
In
Godbold
the
learned judge cautioned as follows:
“
The
question for decision is always whether the conditions on which the
right to cancel was dependent have been fulfilled
(
Rautenbach
v Venner
1928
TPD 26
at
31). The purpose of such
a
notice is to inform the recipient of what is required to do in order
to avoid the consequences of default, and if it is in such
terms as
to leave him in doubt as to the details of what he is required to do,
then it may be that it will be held that the notice
is not one such
as is contemplated by the contract (
Rautenbach’s
case,
supra
at
p 31)” ”
(footnotes
removed).
In Hano Trading
CC,
[24]
it was stated that the
peremptory provisions of a cancellation clause must be strictly
complied with. Has O-Line strictly complied
with the cancellation
clause herein?
The
Analysis
[91]
O-Line committed itself to the breach letter, dated 8 June 2015, as
the letter that constitutes
strict compliance with the requirements
of clause 18 of the agreement.
[25]
According to Datacentrix, the letter concerned does not constitute
strict compliance with the provisions of clause 18. The submission
is
that nowhere in the letter –
91.1
is there a demand that Datacentrix must remedy any of the alleged
defects presently relied upon; and
91.2
is Datacentrix afforded a period of thirty (30) days to remedy any of
the alleged defects concerned.
[92]
Instead, according to counsel, the letter merely calls upon
Datacentrix to submit a comprehensive
proposal on how it will remedy
certain functionalities by no later than 12 June 2015. The submission
of a comprehensive proposal
relating to functionality is the process
envisioned in clause 17 of the contract, being so-called service
level failures. This
is precisely the type of alleged breach that
O-Line initially did claim for at paragraphs 14 to 21A of the
particulars of claim,
but abandoned in its opening address due to its
failure to comply with the formalities required for the process
concerned, so the
argument goes.
[93]
The dispute about the paragraphs in
the breach letter under clause 18 of the agreement is whether
Datacentrix was being called upon to submit what is called a draft
rectification plan or was called upon to remedy the breach.
[94]
The argument by Datacentrix that the letter envisaged the
rectification clause contained in clause
17 of the agreement, is not
sustainable. Firstly, Datacentrix has already conceded in its plea
that the breach letter does not
constitute a request for the draft
rectification plan as envisaged in the agreement. Datacentrix averred
in the plea that the said
letter was a request by O-Line for
assistance of the difficulties which the latter was experiencing due
to its own failures.
[95]
Secondly, the submission made by O-Line’s counsel in response
to this argument is correct.
Clause 17 comes into play only where the
innocent party wants to retain the agreement and not where the
intention is to terminate
the agreement. Clause 18 of the agreement
on the other hand is used where there has been a material breach of
the agreement, like
in this case. The purpose of the letter was
to cancel the agreement and not to retain it because the breaches are
material.
[96]
Nevertheless, Datacentrix’s proposition that in order for the
agreement to have been properly
cancelled, O-Line is supposed to have
complied with the
lex
commissoria,
is
correct. The term ‘
lex
commissoria’
was
explained as follows in
GPC
Developments CC
:
[26]
“
The
term “lex commissoria” has acquired a somewhat flexible
meaning in our law of contract.
Van
der Merwe et al
[27]
,
with reference to inter alia
Nel
v
Cloete
[28]
,
observe that the phrase denotes, primarily, a term which permits a
contracting party to resile from an agreement on the ground
of delay,
but that it has also acquired a wider and more general meaning, viz,
a stipulation conferring the right to cancel an
agreement on the
basis of any recognised form of breach. Such a term may include a
right on the part of the creditor to claim forfeiture
of amounts
already received, but it is not limited to that right.”
[29]
The
question that ought to be determined is whether O-Line has complied
with the
lex commissoria
in this instance.
[97]
The cancellation clause of the agreement reads as follows:
“
18.
BREACH
Should
either party (“the Defaulting Party”):
18.1
commit a material breach of this Agreement and fail to remedy such
breach within thirty (30) days of having been called
upon in writing
by the other party (“the Innocent Party”) to do so; and .
. .”
[98]
The clause provides that if there is a
material breach of the agreement and it is not remedied within
thirty
(30) days of having been called upon to do so the innocent party may
in its discretion and subject to the provisions of
Clause 19 be
entitled to terminate the agreement on written notice.
[99]
The letter of 8 June 2015, in my view, suffices as compliance with
the requirements of the
lex commissoria
. Datacentrix’s
counsel accepted in addressing the letter that it contains a general
complaint that the software does not
do what O-Line thought it ought
to do. As argued by O-Line’s counsel, O-Line
was not meant to itemise every problem the software was having, in
this letter. Since O-Line was not an expert as far as
the
software was concerned, it was sufficient that it mentioned that the
software was not working. That, to me is enough.
[100]
The letter mentions the breaches O-Line is complaining about, namely
that the software is not working and that
‘
the calibre of
people from a Sage knowledge perspective has been ridiculously poor’
– which may be interpreted as a layman’s language that
Datacentrix’s staff was not qualified or trained to deal
with
the configuration of the Sage software. The letter also gives
Datacentrix time within which to rectify the breaches.
[101]
Of importance is that O-Line’s argument that it is not required
that the letter state that Datacentrix should
remedy the breaches
within thirty (30) days, is indeed correct. In terms of clause 18 of
the agreement the guilty party must only
be informed that it is in
breach and that it must remedy such breach. The clause does not
prescribe when such breach should be
remedied. The clause only states
that the innocent party is entitled to cancel the agreement after
thirty (30) days if such breach
has not been remedied, that is, the
guilty party must be given thirty (30) days within which to remedy
the breach.
[102]
O-Line has, as such, in the letter, informed Datacentrix about the
breaches which it wanted to be remedied. It
gave Datacentrix until 12
June 2015 to remedy the breaches. But, it was only in October 2015,
after thirty (30) days had passed,
that O-Line cancelled the
agreement.
[103]
Having found the agreement to have been properly cancelled, the
question that ought to follow is whether
the breaches concerned were
material warranting the cancellation.
Was the Breach
Material?
[104]
The question that follows is whether the breaches O-Line is
complaining about are material as required by clause
18 of the
agreement to warrant cancellation of the agreement.
[105]
Datacentrix contends that it cannot have been a material breach
because 78% of the errors had nothing to do with
this agreement.
They were out of scope. I agree with counsel for O-Line that the
percentage of the errors is not determinative
of the materiality of
the breaches. O-Line in its evidence provides a long list of examples
of functionalities that were either
not there or they were there but
not functioning.
[30]
I mean,
how can it not be said that the failure to configure the software is
not a material breach of the agreement, when the business
cannot even
generate a simple Value Added Tax report or produce financials for
its year end or do a stock take. Without having
to go into much
detail, this is indicative that the breach is material.
CONCLUSION
[106]
In the final analysis, I find that flowing from O-Line’s
cancellation of the agreement and the fact that
the software had not
been implemented and configured in the manner contemplated by the
agreement, O-Line was entitled to cancel
the agreement and to reclaim
the full amount paid.
THE
COUNTERCLAIM
[107]
Datacentrix has filed a counterclaim. The basis of the counterclaim
is a contention by Datacentrix that it is
still owed an amount of
R418 950 by O-Line for the performance by it of the services referred
to in the agreement. It is common
cause that O-Line has refused to
pay this amount and denies that it is obliged to do so.
[108]
The contention by O-Line is that Datacentrix has not established that
it is owed the money and that if it is so,
it has no claim against
O-Line.
[109]
Without such evidence, Datacentrix relies for the counterclaim on the
uncontested evidence of Mr Kruger. In his
testimony, Mr Kruger
produced a document in which he had compiled a list setting out the
invoices received from Datacentrix and
the amounts paid to
Datacentrix. On Mr Kruger’s calculation there appears to be a
shortfall in payment of an amount of R180
775. Mr Kruger conceded,
and the documentary evidence which was discussed with him in the
cross-examination showed that there was
indeed at least a short
payment by O-Line to Datacentrix of that amount. Having so conceded,
as such, O-Line’s counsel cannot
from the bar argue it
otherwise. On the other hand, Datacentrix having led no evidence to
prove its claim of R418 950, can only
succeed in the amount which was
conceded by O-Line, that is R180 775.
THE
ORDER
[110]
Consequently, I make the following order:
1.
The plaintiff succeeds in its claim of R1 936 815 together with costs
and interest
at 9%
per annum
on the aforesaid sum
a
tempore morae
.
2.
The defendant succeeds in its counterclaim of R180 775 together with
costs and
interest at 9%
per annum
on the aforesaid sum a
tempore morae
.
E.M
KUBUSHI
JUDGE
OF THE HIGH COURT
Appearance:
Plaintiff’s
Counsel
: Adv. K.D Iles
Plaintiff’s
Attorneys
:
Bowman Gilfillan Incorporated
Defendant’s
Counsel
: Adv. S.D. Wagener SC
Defendant’s
Attorneys
:
A L Maree Incorporated.
Date
of hearing
: 22-26 June 2020
Date
of judgment
: 25 January 2021
[1]
Clause 17 of the agreement.
[2]
Clause 15 of the agreement.
[3]
Harms 9
th
ed p115.
[4]
The Law of South Africa 5 (1) r 256.
[5]
Feinstein v Niggli
1981 (2) SA 684
(A) at 700F to 701C.
[6]
Botha & another v
Rich NO & others
[2014] ZACC 11.
[7]
Extel Industrial (Pty)
Ltd & another v Crown Mills (Pty) Ltd
[1998] ZASCA 67
;
1999 (2) SA 719
(SCA) at 731D/E - E.
“
The
rule that an innocent party who elects to rescind may not do so if
he tenders restitution is not an inflexible one. It applies
only
where such restitution remains physically possible. When through no
fault of the rescinding party, restitution is no longer
possible,
the rescinding party is not precluded by the fact alone from
resiling.”
At
732B
“
.
. .that a tender of restitution, or the explanation and excuse for
its failure, is a requirement in the proceedings for restitution
is
indeed trite.”
[8]
See
THHRR
1984
at 461.
[9]
Extel Industrial (Pty)
Ltd
&
another v Crown Mills (Pty) Ltd
at
732B.
[10]
Hall-Thermotank Natal
v Hardman
1968 (4) SA
818
(D) at 831 - 832.
[11]
Botha & another v
Rich NO & others
[2014] ZACC 11
para 51.
[12]
Botha
para
49 - 51.
[13]
Beadica 231 CC &
others v Trustees for the time being of the Oregon Trust &
others
[2020] ZACC
13.
[14]
Beadica 231 CC
para 59.
[15]
Section 27, in relevant part, reads:
“
(1) Any purchaser
who in terms of a deed of alienation has undertaken to pay the
purchase price of land in specified instalments
over a period in the
future and who has paid to the seller in such instalments not less
than 50 per cent of the purchase price,
shall, if the land is
registrable,
be entitled to demand
from the seller transfer
of the land on condition that simultaneously with the registration
of the transfer there shall be registered
in favour of the seller a
first mortgage bond over the land to secure the balance of the
purchase price and interest in terms
of the deed of alienation.”
[16]
Extel Industrial (Pty)
Ltd & Another v Crown Mills (Pty) Ltd
at 733G.
“
Once
the conductor
operis
has accepted the benefit of the
locator’s
services, restoration of the
specie
will often no longer be possible; hence, the conductor must perforce
make restitution by way of pecuniary substitute.”
[17]
Masters v Thin t/a
Inhaca Safaris
2000
(1) SA 467
(W) 474H.
[18]
Hall-Thermotank Natal
v Hardman
1968 (4) SA
818
(D) at 831 - 832.
[19]
Harper v Webster
1956 (2) SA 495
(FC) at 502.
[20]
South African Post
Office v De Lacy
(19/08)
[2009] ZASCA 45
para 35.
[21]
The Law of South Africa, Volume 9 (Third Edition) para 423.
[22]
GPC Development CC &
other v Uys
[2017] 4
All SA 14
(WCC) para 27 - 29.
[23]
Hano Trading CC v JR
209 Investments (Pty) Ltd & another
[2013]
1 All SA 142
(SCA) para 33.
[24]
Hano Trading CC v JR
209 Investments (Pty) Ltd & another
[2013] 1 All SA 142
(SCA) para 33.
[25]
See Part B page 74 on Caselines.
[26]
GPC Development CC &
Other v Uys
[2017] 4
All SA 14
(WCC) para 34.
[27]
Contract, General Principles (4
th
ed) at 299 fn126.
[28]
Nel v Cloete
1972(2) SA 150 (A) at 160.
[29]
Baines Motors v Piek
1955 (1) SA 534
(A)
at 542 – 547.
[30]
See para [83] of this judgment.