About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2018
>>
[2018] ZAGPJHC 589
|
|
Applied Medical Nutrition (Pty) Ltd v DSM Nutritional Products South Africa (Pty) Ltd and Another (2016/40817) [2018] ZAGPJHC 589 (18 October 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2016/40817
In
the matter between:
APPLIED
MEDICAL NUTRITION (PTY) LTD
Plaintiff
and
DSM
NUTRITIONAL PRODUCTS SOUTH AFRICA
(PTY)
LTD
CHEMPURE
(PTY) LTD
First
Defendant/Excipient
JUDGMENT
SPILG,
J:
INTRODUCTION
1.
The plaintiff contends that a premix ingredient in a nutritional
product it supplies to the medical industry was incorrectly
formulated as a consequence of which there was a significant
reduction in both the yield of the final nutritional product the
plaintiff was able to supply to its customers and its suitability for
consumption. As a consequence the plaintiff alleged that it
suffered
loss of production of the product it supplied which in turn resulted
in the cancelation of orders by its customers.
2.
The plaintiff’s product is marketed as KetoVOLVE 4:1. It is a
high fat, adequate protein and low carbohydrate formula designed
to
maintain high levels of ketosis required for the control of drug
resistant epilepsy. The plaintiff supplies KetoVOLVE both locally
and
abroad. As a result of the incorrect formulation of the premix the
plaintiff claims that it suffered;
a. loss of production in
an amount of some R202 760, and
b. loss of income in the
sum of US$210 756.
3.
The plaintiff instituted action initially against only the
manufacturer of certain raw materials that were specific to the
premix
used in the production of KetoVOLVE. It subsequently
successfully joined the supplier of the premix.
4.
The plaintiff’s cause of action against its supplier, Chempure
(Pty) Ltd is based on the terms of an oral contract. It
is alleged
that the contract included a term that the premix formulation
required a specific consistency or ratio to be maintained
of chlorine
bitartrate and dicalcium chloride per kilogram of premix. It is
alleged that the premix supplied contained an almost
8% increase in
the former and a 30.23% increase in the latter. Chempure is the
second defendant. The claim against Chempure is
claim A to the
summons
5.
Chempure in turn had a distribution agreement with the manufacturer
of the raw materials, DSM Nutritional Products South Africa
(Pty)
Ltd, specific to the premix used in the production of KetoVOLVE.
The
plaintiff may not have been confident that Chempure would join DSM in
the action or it may have concern about whether it would
recover the
full extent of its loss, if proven, against Chempure. The reason is
irrelevant. As a fact the plaintiff also sued DSM
as the first
defendant. This is to be found in claim B of the particulars.
6.
It is evident that the plaintiff struggled with the formulation of
its case against DSM and amended its claim. DSM however contends
that
the claim against it remains excipiable as it does not disclose a
cause of action and also because it is vague and embarrassing.
DSM
gave the required notice to remove cause of complaint in regard to
the latter.
7.
The issue before me is whether DSM’s exception to the amended
claim is good.
GROUNDS
OF EXCEPTION
8.
DSM’s exception in relation to the claim being bad in law as it
fails to set out sufficient grounds to sustain a cause
of action.
a. There is no allegation
of negligence although the case is one that can only be one made out
in delict;
b. There are insufficient
allegations from which it can be concluded that a duty of care was
owed by DSM to the plaintiff;
9.
In addition DSM excepts to the claim on the ground that it is vague
and embarrassing in that;
a. It is not alleged that
DSM was provided with the plaintiff’s formulation or by virtue
of what or how it could or should
have obtained the plaintiff’s
formulation;
b. There are insufficient
allegations from which it can be drawn that DSM owed a duty of care
to the plaintiff. It will be seen
that this is a fall-back position
to the contention that there is insufficient pleaded top support a
duty of care
c. The plaintiff relies
on a written instruction it gave to DSM not to deviate from the
specifications when manufacturing the raw
materials. However the
email is not addressed to DSM. The recipients are 3 individuals and
appears to be a response to a previous
communication which does not
impute any manufacturing function to DSM.
10.
I proceed to deal with each exception
NEGLIGENCE
NOT ALLEGED
11.
DSM readily accepts that the case it has to meet is founded in
delict.
12.
In
Sea Harvest Corporation (Pty) Ltd v Duncan Dock Cold Storage
(Pty) Ltd
2000(1) SA 827 (SCA) the Supreme Court of Appeal held
that the enquiry into the existence of negligence is separate from
that into
the existence of a legal duty although in cases other than
that of omission wrongfulness will be
prima facie
established
if the conduct is found to be culpable. The court said this at para
19:
“
In the course
of the past 20 years or more this Court has repeatedly emphasised
that wrongfulness is a requirement of the modern
Aquilian action
which is distinct from the requirement of fault and that the inquiry
into the existence of the one is discrete
from the inquiry into the
existence of the other. Nonetheless, in many if not most delicts the
issue of wrongfulness is uncontentious
as the action is founded upon
conduct which, if held to be culpable, would be prima facie
wrongful.”
See
also Harms
Amler’s Precedents of Pleadings
(8
th
ed) at 237.
13.
Adv. Bitter
on behalf of the plaintiff argues that
an allegation that DSM breached the duty of care was sufficient to
satisfy the requirement
of pleading wrongfulness.
14.
Although not referred to by the parties, I believe that the following
passage by Ponnan JA in the recent decision
of
Home Talk
Developments (Pty) ltd and others v Ekurhuleni Metropolitan
Municipality
2018 (1) SA 391
(SCA) at para 19 is decisive of the
point (albeit that the court was dealing with a duty of care arising
from an administrative
act):
“
The
breach
of every legal duty, especially one imposed by administrative
law, does not necessarily translate into the breach of
a
delictual duty”
See
also Steenkamp NO v Provincial Tender Board, Eastern Cape
2006 (3) SA 151
(SCA) at para 19.
[1]
15.
The plaintiff has done no more than allege the breach of a duty of
care, not that the breach was wrongful. In view of
the
Home Talk
decision the amended claim lacks sufficient allegations. This may
appear to be a triviality which can be imputed from a consideration
of the pleading as a whole. While I prefer to take a benevolent look
at pleadings I believe that the nature of this case requires
the
plaintiff to positively contend that the breach was negligent. It
will also compel the plaintiff to consider, by way of illustration,
whether the grounds upon which the duty of care rests is not just the
failure to ensure that the correct ratios were adhered to
but also
that it ought to have established what they were by reason of the
industry it was in, or for which it knew or ought to
know it was
manufacturing.
16.
The first exception is therefore good, but not fatal and the
plaintiff is therefore not precluding from further amending
its
claim.
DUTY
OF CARE
17.
The plaintiff did not simply allege that DSM owed it a duty of care.
It set out grounds from which it drew this conclusion.
18.
The question however is whether enough is stated from which such a
conclusion can be drawn. This would be the inevitable
consequence of
the reasoning in n
Knop v Johannesburg City Council
1995(2) SA
1 (A) at p27 where the court held that the mere allegation of the
existence of a duty of care owed by a defendant to
a plaintiff was
insufficient because the existence of such a duty to prevent loss is
“
a conclusion of law depending on all the circumstances of
the case”
19.
The plaintiff does not allege that DSM held out to possess
specialised skill or knowledge in manufacturing premixes or compounds
of this nature or that it relied on its good name and reputation in
the industry. It does however allege that DSM was aware of
the
properties of the ingredients and the consequences to the final
product if the levels of concentration of one of the ingredients
or
compounds was increased.
20.
This may not necessarily amount to a holding out of specialised
knowledge or inherent risk in production process but it
appears
sufficient in the context of even a lower standard of being a
manufacturer who undertakes production of this nature even
if the end
user or intermediary is not known. While that goes to foreseeability
it also is relevant to the question of whether
the duty of care would
resulted in unlimited liability to the world at large. In the
circumstances of the specialised nature of
the mix I believe that it
can be assumed that creating a situation of unlimited liability is
unlikely to arise.
DSM’s
argument would otherwise result in every end user who may be affected
by an incorrect mix not being able to found a
delictual action
against the producer of the mix but confined to a claim against
intermediaries in the manufacturing and distribution
chain who would
plead that they were entitled to rely on the regularity of the mix
provided by it.
21.
While the plaintiff may have confined itself to a narrow bass to
allege a duty of care I believe enough can be inferred
for the basis
upon which the conclusion is sought to be drawn to pass muster.
22.
It was contended by
Adv. Wesley
that a duty of care cannot
arise if there is a contractual relationship between the person
claiming loss and another person in
circumstances where the liability
would be covered by a breach of contract. The issue involves the
question of multiplicity of
actions.
On
may use the simple example of the owner of a car holding the
manufacturer for defects where the distributor may also be liable
in
contract. If the point is good then it would also mean that if the
distributor is insolvent no remedy lies against the party
who was
actually responsible for the defect. While the contractual
relationship between distributor and manufacturer may disentitle
a
claim as between them, it is unnecessary to consider whether a
manufacturer can contend that it compensated the distributor who
failed to pass on the amount to the car owner. The reason is that
here the plaintiff has sued both parties in the alternative.
Accordingly the concern of a multiplicity of actions does not arise.
THE
VAGUE AND EMBARRASING GROUNDS
23.
The first ground relied upon is that the plaintiff does not allege
that DSM was provided with the plaintiff’s formulation
of the
premix or how it could or should have obtained it.
In
my view the allegation that DSM was aware or should have been aware
of the formulation is based on inferences that can be drawn
from the
pleading and does not amount to a simple conclusion.
24.
The second ground is that the plaintiff has not set out sufficient
allegations regarding the duty of care it contends was owed
to it by
DSM and therefore the claim is vague and embarrassing with the result
that it is prejudiced.
I
have partially dealt with this earlier. I am satisfied that the basis
for alleging a duty of care is adequately identified in
the amended
claim; albeit on a narrow front. But that is the risk the plaintiff
runs if DSM objects to evidence being led which
goes beyond the four
corners of its pleading.
25.
The final ground raised by DSM is that the plaintiff has not
expressly stated whether any of the persons who received the written
instruction did so on its behalf since,
ex facie
the document
relied upon, DSM is not identified as a recipient nor does the name
DSM appear in any part the recipients’ email
addresses.
It
may well be that one of the recipients of the email was an employee
or representative of DSM. If not then attributing knowledge
of the
contents of the email to DSM must be laid. DSM is prejudiced as it
does not know the basis relied on. At present it is a
mere conclusion
which cannot be inferred and consequently is devoid of a foundation.
While
the case as pleaded suggests that DSM owed the plaintiff a duty to
have enquired about the required formulation for the premix
there is
not at present a direct allegation of negligence based on a failure
to enquire about the formulation before the
manufacture
process.
In
the circumstances of this case I consider that the plaintiff is
obliged to set out the
nexus
it contends for between DSM and
the individuals identified as the recipients of the written
instruction that would establish knowledge
and wrongfulness.
ORDER
26.
It was agreed between the parties that the costs would be in the
cause as I indicated that the plaintiff would only succeed
to a very
limited extent having regard to the number of exceptions taken.
27.
In the result and because there has been a failure to plead
negligence, I make the following order:
a.
The plaintiff is
afforded 15 days from the date of this order to amend its particulars
so as to properly allege the ground of wrongfulness
relied upon,
failing which the claim will be struck out with costs;
b.
The plaintiff is
afforded 15 days from the date of this order to amend para 12 by
identifying the link between DSM and the recipients
of the written
instruction marked “
POC1”
thereto,
failing which the contents of that para will be struck out with
costs.
c. No order as to the
costs of the exception
_________________
SPILG,
J
DATE
OF HEARING: 15 October 2018
DATE
OF JUDGMENT: 18 October 2018
FOR
EXCIPIENT/FIRST DEFENDANT: Adv. CP Wesley
Friedland
Hart Solomon & Nicolson
FOR
DEFENDANT/RESPONDENT: Adv. JJ Bitter
Darryl
Ackerman Attorneys
[1]
Per
Harms
JA (at the time) at para 19:
“
A
useful starting point in considering the nature of the legal duty of
the board towards tenderers in general is to remind oneself
a legal
duty may have its origin in either statute law or the common law and
that the breach of every legal duty, especially
one imposed by
administrative law, does not translate by necessity into the breach
of a delictual duty, ie a duty to compensate
by means of the payment
of damages. Because the term 'legal duty' is inherently ambiguous,
it is therefore important to
have due regard to the exact nature of
the legal duty in issue.”