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[2008] ZASCA 107
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Mutual Construction Company (TVL) (Pty) Ltd v Komati Dam Joint Venture (466/07) [2008] ZASCA 107; 2009 (1) SA 464 (SCA) ; [2009] 1 All SA 458 (SCA) (23 September 2008)
Links to summary
THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
Case No: 466/07
In the matter between
MUTUAL CONSTRUCTION COMPANY (TVL)
(PTY) LTD
APPELLANT
and
KOMATI DAM JOINT VENTURE
RESPONDENT
Neutral citation:
Mutual
Construction v Komati Dam
(466/2007)
[2008] ZASCA 107
(23 September 2008).
Coram: SCOTT, CAMERON, LEWIS JJA,
LEACH AJA and MHLANTLA AJA
Heard: 4 September 2008
Delivered: 23 September 2008
Summary: Contract for the hire of a
truck and its operator for use on a building site – operator
remaining the employee of
the truck’s owner but operating on
site under the supervision and control of the hirer –
operator’s negligence
on site causing damage to truck–
hirer liable to owner for damages.
_________________________________________________________________
ORDER
_________________________________________________________________
On appeal from:
High
Court, Johannesburg (Van Oosten J sitting as court of first
instance).
(1) The appeal succeeds with costs.
(2) The order of the court a quo is
set aside and is replaced with the following:
‘
(a) The defendant is directed
to make payment to the plaintiff of an amount equal to the damages
which the parties may agree or
which the plaintiff may prove.
(b) The defendant is to pay the
costs of the proceedings determining liability.’
_______________________________________________________
JUDGMENT
________________________________________________________________
LEACH
AJA (SCOTT, CAMERON, LEWIS JJA and MHLANTLA AJA concurring):
[1] During June
2000 the parties entered into an agreement in terms of which the
appellant let to the respondent a CAT 769 articulated
dump truck
(‘the truck’), together with the services of an operator.
The respondent, a partnership between a number
of major civil
engineering companies, was engaged in the construction of the Maguga
Dam in Swaziland and used the truck and its
operator in the course of
its operations at that site. In the early hours of 5 October 2000,
the operator fell asleep while driving
the truck along a haul road at
the site, allowing the truck to leave the road and collide with an
embankment. For convenience,
I shall refer to this as ‘the
accident’.
[2]
The
truck was extensively damaged in the accident and, in due course, the
appellant instituted an action for damages in the Johannesburg
High
Court, claiming payment by the respondent of both the cost of
repairing the truck as well as an amount in respect of loss
of income
because it was out of operation for several weeks until it was
repaired. The respondent denied liability and the matter
proceeded to
trial.
[3] Although the
precise terms of the agreement under which the truck had been let to
the respondent were an issue on the pleadings,
this aspect of the
case was initially dealt with as a separate issue under rule 33(4),
with Goldblatt J concluding that a written
agreement, a copy of which
had been attached to the particulars of claim as annexure ‘A’,
contained the terms of the
contract between the parties. His finding
was accepted by both sides and the terms of the contract can be
regarded as finally determined.
[4
] The
dispute as to the terms of the agreement having been resolved, the
matter was set down for trial before Van Oosten J for adjudication
of
the remaining issues. By the date of the hearing the parties had
reached agreement on the cost of repairing the damage to the
truck.
Although it was agreed that very little evidence would be required to
determine the quantum of the claim for loss of income,
the learned
judge ordered the question of liability to be determined as a
separate issue at the outset with the outstanding issues
relevant to
damages to stand over yet again. After hearing evidence, he
concluded that the operator of the truck had negligently
fallen
asleep as he had failed to rest, despite the respondent offering him
the opportunity to do so, a failure which he considered
fell beyond
the respondent’s power of control, and that in these
circumstances policy and fairness dictated that the respondent
not be
held liable for the operator’s negligence.
[5] The high
court therefore dismissed the appellant’s claim. An application
for leave to appeal was similarly unsuccessful
but, with leave
obtained from this court, the appellant now appeals against the
dismissal of its claim.
[6
]
It is a trite
principle of our law that the hirer of an article is obliged to
return it in the same condition in which it had
been at the outset of
the period of hire, fair wear and tear excluded. Accordingly,
in the absence of agreement
to the contrary, all the owner of a hired article
has to allege and prove is
that it was in a damaged state when returned and it will then be up
to the hirer to show that this is
due to no negligence on the part of
himself or others under his control for whose acts he would be
liable.
1
In the present case, the parties are agreed that the damage was due
to the operator's negligence in driving when he was so tired
that he
fell asleep. The hirer’s liability is thus entirely dependent
on the parties’ contract.
[7] The material provisions of the
contract are:
‘
10.
Owner 's operator.
If
the plant is supplied with the owner's operator, then while on site
the operator shall be under the sole and absolute control
of the
hirer who/which warrants and undertakes that he/it will give to the
operator clear and specific instructions and directions
regarding the
nature and the manner of all work to be performed by the operator and
the plant on site, the hirer shall be obliged
and warrants that he/it
will during the hours that the hirer requires the plant to operate
provide responsible supervision for
the operator while the plant is
on the site during the period of hire. Notwithstanding anything to
the contrary hereinbefore contained,
the owner shall remain the
general employer of the operator and no obligation shall be placed
upon the hirer to observe the provisions
of any statutory laws
regulating the relationship between the owner and the operator ….
12.
Indemnity.
Anything
to the contrary herein contained notwithstanding while the plant is
on site, the owner shall not be responsible or liable
to the hirer or
any other person for any damages of any nature whatsoever
(consequential or otherwise) arising out of the plant
being faulty or
in a defective state of repair or for any acts or omissions on the
part of the owner's operator while such operator
is carrying out the
instructions of the hirer or any acts or omissions on the part of the
hirer's operator or for any loss or damage
(consequential or
otherwise) whatsoever occasioned to the hirer or any other person,
property or thing and the hirer indemnifies
and holds harmless the
owner against all claims of any nature whatsoever for any loss or
damage aforesaid including all costs relating
to such claims.
21.
Care of plant.
Subject
to clause 10 & 12 above the hirer shall be responsible for all
expenses arising from the breakdown, loss or damage to
the plant
occurring through the hirer's negligence, misdirection or misuse, or
for any theft of the plant or parts thereof, and
shall include the
travelling time and costs of the owner and his/its nominee and time
lost and expenses incurred through the plant
being immobilised or
bogged in wet ground, rockfall, subsistence, inundation or the like.
The hirer undertakes at all times to
exercise adequate security and
care in respect of the plant.
22.
Self propelled plant.
Where
the plant is self propelled and is required to travel under its own
power then save as is provided below, the hire period
shall be deemed
to commence from the time it commences to move on despatch from the
owner's depot or site nominated by the owner,
whichever is the nearer
to the site where it is required by the hirer. In such event, the
risk shall be with the hirer for the
entire period. When the plant,
being self propelled, is required to travel under its own power with
an operator supplied by the
owner, the risk of loss of or damage to
the plant shall pass to the hirer when the plant is delivered or
presented for delivery
to the hirer's site specified overleaf and
shall revert to the owner when the plant commences to move on its
return to the owner's
depot or site nominated by the owner.
’
[8] It will be observed that under
clause 21 the respondent (as hirer) became responsible for all
expenses arising from the truck
breaking down or being damaged
through ‘the hirer's negligence, misdirection or misuse’
until such time as it was restored
to the appellant. The issue that
arose for determination in this appeal was therefore whether the
negligence of the operator who,
under clause 10, was to work on site
under the respondent's ‘sole and absolute control’, was
to be construed as negligence
for which the respondent bound itself
to be liable under clause 21. This question is to be answered with
reference to the contract
and not to the principles of vicarious
liability in delict, which appears to have been the approach of the
high court.
[9] In dealing with this issue,
there are certain basic principles which arise. Firstly, any
‘negligence, misdirection or
misuse’ envisaged by the
agreement had to be conduct on the part of a natural person as a
partnership between several juristic
persons can only act through
natural persons doing so on its behalf. Secondly, a term in a
contract is to be read not in isolation
but in its context.
[10] Accordingly, in construing
clause 21 it is important to bear in mind that although clause 10
provides for the operator to
remain in the employ of the appellant,
he was at all times to be under the respondent’s ‘sole
and absolute control’
while on site and that the respondent
undertook to ‘provide responsible supervision’ and to
give ‘clear and specific
instructions and directions regarding
the nature and the manner of all work to be performed by the operator
and the (truck) on
site’
.
[11] Importantly, clause 12 also
provides for the appellant not to be ‘. . . responsible or
liable to the (respondent) or
any other person for damages of any
nature whatsoever . . . arising out of . . . acts or omissions on the
part of the . . . operator
while such operator is carrying out the
instructions of the (respondent) or . . . for any loss or damage . .
. occasioned to the
(respondent) or any other person, property or
thing . . . .’ The indemnity given in this clause, which
excuses the appellant
from liability for damage caused by negligence
on the part of the operator while working under the respondent’s
instructions
on site, amounts to an acceptance by the respondent of
liability in those circumstances.
[12] It is clear from this that
despite the operator remaining within the employ of the appellant, he
at all times acted for and
on behalf of the respondent and under its
control while working on site. The respondent, in turn, accepted
both the risk of damage
to the truck as well as liability for the
operator’s negligence while under its supervision on site. To
all intents and purposes,
the operator while on site was therefore
envisaged in the agreement as being a functionary of the respondent,
akin to an employee.
[13] In my view, these
considerations all point towards negligence on the part of the
operator while on site and under the respondent’s
supervision
and control, being construed as ‘the hirer's negligence‘
as envisaged by clause 21.
[14] This court reached a similar
conclusion in
RH Johnson
Crane Hire (Pty) Ltd v SA Iron & Steel Industrial Corporation
Ltd
.
2
In that matter, the defendant had hired a crane and its operator from
the plaintiff under a written agreement which contained clauses
identical to clauses 10, 12 and 21 of the present contract. The
crane collapsed and was damaged when the operator, acting at the
time
under the supervision of the defendant’s rigger, attempted to
lift a heavy load that was beyond its capabilities. The
plaintiff
sued the defendant for the cost of repairing the crane and for loss
of income while the repairs were carried out. Two
judgments were
delivered, each holding the defendant liable to the plaintiff. In
the minority judgment
3
it was held that the crane had been damaged because the defendant's
rigger had been negligent, rendering the defendant liable under
the
provisions of the contract. On the other hand, in the majority
judgment
4
it was held that the evidence had been insufficient to determine
negligence on the part of the rigger. But as it was common cause
that
the damage to the crane must have been due to negligence on the part
of either the rigger or the operator, the majority reasoned
that the
failure to prove that the rigger had not been negligent placed the
defendant on the horns of a dilemma. On the one hand,
its failure in
that regard did not allow it to escape liability under the common law
which placed a burden on it to prove that
there had been no
negligence on the part of its servants or those for whose acts it
would be liable while, on the other hand, it
was unable to escape
liability by seeking to contend that the operator had been negligent
as ‘. . . in terms of the conditions
of contract the defendant
was liable for his acts.’ The defendant was therefore found to
be liable without the majority having
to decide whether the operator
had been negligent.
[15] In the light of the above, I
conclude that negligence on the part of the operator while driving
the truck on site and under
the respondent's supervision and control
is to be construed as negligence on the part of the respondent as
envisaged in clause
21 of the agreement, rendering the respondent
liable to the appellant for damages suffered as a result.
[16] Counsel for the respondent
sought to avoid the result of that construction by arguing that as
the operator had commenced
his shift at a time when he was exhausted
on returning to site after a long weekend during which he had not
properly rested, his
negligence which caused him to fall asleep had
been at a time when he was off site and not under the respondent's
supervision and
control.
[17] This argument cannot be upheld.
The cardinal point is that the operator was negligent in driving the
truck at a time when
he was over-tired, which led to his falling
asleep and the truck leaving the road. This occurred on site and at
a time when he
was driving under the respondent's supervision and
control. The respondent is accordingly liable under the contract for
the damage
the appellant suffered as a result.
[18] The appeal must accordingly
succeed, with costs. In regard to the order which should be made in
substitution of that of
the court
a
quo
, I intend to use the
terms suggested by appellant's counsel in his heads of argument to
which the respondent offered no objection.
[19] The following order is made:
The appeal succeeds, with costs.
(2) The order of the court a quo is
set aside and is replaced with the following:
‘
(
a)
The defendant is directed to make payment to the plaintiff of an
amount equal to the damages which the parties may agree or
which the
plaintiff may prove.
(b) The defendant is to pay the
costs of the proceedings determining liability.
’
__________________________
L E LEACH
ACTING JUDGE OF APPEAL
Appearances:
For
Appellant: R Stockwell SC
Instructed by
Knowles Husain Lindsay Inc, Sandton
McIntyre & Van Der
Post, Bloemfontein.
For
Respondent: DA Smith SC
M T Shepherd
Instructed by
Roodt Incorporated, Sandhurst
Naudes Attorneys,
Bloemfontein
1
See eg
Eensaam
Syndicate v Moore
1920 AD
457
at 458 and
Manley van
Niekerk v Assegaai Safari and Film Productions (Pty) Ltd
1977 (2) SA 416
(A) at 422G-423B.
2
Unreported; case no 207/85 delivered
on 31 March 1987.
3
Viljoen JA, Smalberger J concurring.
4
Botha JA ,with whom Vivier JA and
Kumleben AJA concurred.