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[2018] ZAGPJHC 636
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Drummond Cable Concepts v Advancenet (Pty) Ltd (08179/14) [2018] ZAGPJHC 636; 2020 (1) SA 546 (GJ) (14 December 2018)
Links to summary
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
No.: 08179/14
In
the matter between:
Drummond
Cable
Concepts Defendant/Excipient
and
Advancenet
(Pty)
Ltd Plaintiff/Respondent
JUDGMENT
Vally
J
[1]
On 5 March
2014 the plaintiff/respondent served summons on the
defendant/excipient seeking payment of monies from the
excipient/defendant
it claims is due to it. Having received and
considered the claim the defendant excepted on the grounds that it
failed to disclose
a cause of action. For ease of reference the
parties in this judgment will be referred to as plaintiff and
defendant instead of
excipient and respondent.
The
claim
[2]
The claim
has its origins in a partly written and partly oral contract that was
concluded between the plaintiff and the defendant
on or about 23
October 2012. The particulars of claim (POC) identifies the following
as the key terms of the contract as well as
the key elements of the
claim:
[1]
3. In and during August
2012 the plaintiff provided the defendant with a document that became
known as the project scope in order
to allow the defendant to furnish
a quotation for work to be completed by the defendant should the
plaintiff accept the quotation.
4. On 23 October 2012 the
defendant furnished a written quotation to the plaintiff.
5. On the same day the
plaintiff accepted the quotation.
6. Thereafter a partly
oral, partly written contract was concluded between the plaintiff and
the defendant.
7. The key terms of the
contract were that (i) the defendant would install electrical
equipment at the premises of a client of the
plaintiff, which
equipment would comply with the Molex Cabling standard; and (ii) the
plaintiff would pay the defendant certain
amounts for the work.
8 and 9. The plaintiff
performed all its obligations, which included paying the defendant a
sum of R357 521.10.
10. The defendant
breached the contract by failing to comply with the “Molex
Cabling Agreement”.
[2]
11. In and during
November or December 2013 the plaintiff afforded the defendant an
opportunity to remedy the breach by performing
remedial work at the
client’s premises.
12. The defendant failed
to take advantage of this opportunity.
13. The plaintiff was
therefore obliged to employ a third party to “
remedy the
defendant’s breach
”.
14. By virtue of
concluding the “
Cabling Agreement
” the plaintiff
paid the defendant the sum of R 357 521.10.
15. As a result of the
defendant’s breach “
the
plaintiff has suffered damages amounting to R 357 521.10 being
the total amount paid by the plaintiff to the defendant
in respect of
the Cabling Agreement.”
[3]
Accordingly,
the plaintiff claims the sum of R357 521.10 together with costs
from the defendant. There is no tender to return
whatever the
plaintiff received from the contract. Nor is there any averment to
the effect that this amount constitutes the nett
effect on its
patrimonium
had the breach not occurred.
The
defendant’s exception
[4]
The
defendant contends that as the plaintiff accepts that work was done
which was not “
wholly
unsuitable for its purposes
”,
the plaintiff cannot claim the full contract price it paid. In a
nutshell, the full contract price cannot be the damages
the plaintiff
is alleged to have suffered by virtue of the alleged breach of the
defendant. Hence the defendant claims that the
plaintiff fails to
plead, as it is required to do:
a.
what
remedial work it had secured and/or what goods it had purchased or
supplied in order to remedy the work performed by the defendant;
and,
b.
what costs
it incurred to have the work remedied.
[5]
Consequently,
the POC does not identify a nexus between the remedial work
undertaken and/or the costs incurred and the amount claimed.
This
lack of a nexus deprives the POC of the necessary averments to
sustain a cause of action.
[6]
The
plaintiff disagrees with this contention and maintains that its claim
is based on the damages it suffered by virtue of the contract
being
concluded. It seeks to recover those damages by being placed in the
position it would have been in had the contract not been
concluded at
all. This it says is legally competent and is the claim that is
captured in the POC. In short, it is entitled to claim
the full
amount of the contract price paid to the defendant and is therefore
not obliged to plead a nexus between the amount paid
for the remedial
work and amount claimed. In this approach the amount paid for
remedial work is irrelevant. Similarly, with the
benefit it received
by dint of the work (albeit defective) and the goods (notwithstanding
the fact that no value is placed on them)
supplied by the defendant,
these, too, are irrelevant to its claim.
The
legal principles
[7]
This being
an exception to the POC it has to be adjudicated on the basis of the
entire POC as it stands
[3]
, that
each and every factual averment pleaded in the POC is true
[4]
and that upon every reasonable interpretation of the POC no cause of
action is disclosed.
[5]
The POC
must contain every fact (
facta
probanda
)
that is necessary for the plaintiff to prove. It does not, and is not
required to, contain every piece of evidence (
facta
probantia
)
that is required to prove the fact.
[6]
Should all the facts required to prove the claim be pleaded in the
POC a cause of action would be disclosed. The question that
arises
from this legal requirement is, what facts are necessary to ensure
that the cause of action has been disclosed? The answer
depends on
the nature of the claim – a claim arising from a breach of
contract requires different facts from a claim based
in delict.
[8]
The
question that is pertinent here though is what must a plaintiff who
sues for damages arising from a breach of contract plead
in her POC
to ensure that all the
facta
probanda
are placed before court? An omission of any of the required
facta
probanda
could render the POC excipiable. It is basic rule of the law of
contract that a party that sues for damages arising from a breach
of
contract is entitled to all the damages she has suffered in
consequence of the breach. She should be placed in a position she
would have been in had the contract not been breached. This according
to van Heerden JA means the innocent party is asking to be
compensated for her “
bargain
”:
“
A litigant who sues on contract
sues to have his bargain or its equivalent in money or in money and
kind.
”
[7]
[9]
This rule
was expanded upon in the well-known
dicta
of Corbett JA (as he then was) which read:
“
The fundamental rule
in regard to the award of damages for
breach of contract is that the sufferer should be placed in the
position he would have occupied
had the contract been property
performed, so far as this can be done by the payment of money and
without undue hardship to the
defaulting party. (see
Victoria
Falls & Transvaal Power Co. Ltd v Consolidated Langlaagte Mines
Ltd.
,
1915 A.D. 1
at 22;
Novick v Benjamin,
1972 (2) SA 842
(A.D.) at p 860). To ensure that undue hardship is
not imposed on the defaulting party the sufferer is obliged to
mitigate his
loss or damage and, in addition, the defaulting party’s
liability is limited in terms of the broad principles of causation
and remoteness, to (a) those damages that flow naturally and
generally from the kind of the breach of contract in question and
which the law presumes the parties contemplated as a probable result
of the breach, and (b) those damages that, although caused
by the
breach of contract, are ordinarily regarded in law as being too
remote to be recoverable unless, in the special circumstances
attending to the conclusion of the contract, the parties actually or
presumptively contemplated that they would probably result
from the
breach. The two limbs, (a) and (b), of the above-stated limitation
upon the defaulting party’s liability for damages
correspond
closely to the well-known two rules in the English case of
Hadley
v Buxendale
...
”
[8]
(Underlining added)
It
is of fundamental significance that Corbett JA while expanding on the
dictum
of van Heerden JA in
Trotman
highlights its source as resting in a
dictum
of Innes CJ in
Victoria
Falls
.
[9]
Corbett JA does not reinvent the wheel, he reiterates what Innes CJ
held and what had established authority over the years.
[10]
Emanating
from this rule is the requirement that the
facta
probanda
in the POC should specify the amount of damages that arose “
naturally
and generally from the kind of breach of contract in question
”
or the amount of damages she endured which though “
too
remote to be recoverable
”
were “
actually
or presumptively contemplated
”
to be the probable result of the breach. Regardless of whether she
relies on the first or the second limb the plaintiff
(innocent party)
still has to plead factually what steps she took, or to put it
differently what remedies she adopted, to mitigate
her loss. Should
the defendant contend that there were less costly remedies which the
plaintiff ought to have adopted then it would
bear the onus of
showing that there were such remedies open to the plaintiff. The onus
is not easily discharged.
[10]
[11]
Thus far,
the law on this issue seems to be simple and straightforward. But
then came along
Probert
[11]
and judicial controversy was born, stimulated to some extent by
academic criticism of the holding in
Probert
.
Drawing from an analysis of law on the calculation of damages for
breach of contract Nienaber J (as he then was) in
Probert
held that a claim for damages postulated on the negative
interesse
of the plaintiff is recognised as part of our law of contract.
[12]
To make sense of this holding it is necessary to take a step back, as
Nienaber J did. Recognising that our law allows a plaintiff
suing for
damages on a breach of contract (which has been cancelled in
consequence of the breach) is entitled to claim everything
she would
have gained had the contract been performed (as recorded by Corbett
JA in the quote in [9] above), Nienaber J saw value
in referring to
these damages as the positive
interesse
of the plaintiff. These damages, according to the learned Judge, are
to be distinguished from negative
interesse
of the plaintiff. Negative
interesse
constitutes those damages the plaintiff suffered by virtue of the
contract being concluded. Such damages are to be calculated on
the
basis that the plaintiff is entitled to be placed in the position she
would have been in had the contract not been concluded
at all. The
need for this distinction arose in Nienaber J’s view because
the facts before him did not make room for the relief
sought by the
plaintiff but which should be granted to the plaintiff. The facts
were these: the plaintiff paid the purchase price
of a share block to
an estate agent who was to facilitate the transfer of ownership of
the share block to the plaintiff. The defendant
who sold the share
block did not receive the monies paid by the plaintiff and therefore
did not transfer ownership to the plaintiff.
The failure to transfer
the ownership constituted a breach of the contract. After receipt of
the money the estate agent was declared
insolvent. The plaintiff
registered a claim with the insolvent estate for the return of her
money. The claim yielded nothing as
no dividend was declared upon the
winding-up of the insolvent estate. The plaintiff cancelled the
contract with the defendant and
sued him in Nienaber J’s court
for the return of her money. She did not claim nor prove that the
purchase price constituted
the damages she suffered. The defendant
having not received the money resisted the claim. The plaintiff
contended that the estate
agent was the agent of the defendant
(seller) and that payment of the money to it represented payment to
the defendant. Finding
that the estate agent was not an agent of the
defendant, but rather a stakeholder, Nienaber J identified the
question before him
as being:
“
Who is to bear the loss, the
plaintiff as purchaser, or the defendant as seller?
”
[13]
[12]
The answer,
according to Nienaber J, lay in the distinction between positive and
negative
interesse
.
The plaintiff, he found, had calculated her damages on the basis of
the position she would have been in had the contract not been
concluded at all as long as she had cancelled the contract.
[14]
A claim based on negative
interesse
is another form of a claim for “
restitutional
damages
”,
which has been recognised by our courts.
[15]
I must record though that, in my view, the two forms of relief
(damages and restitution) must not be conflated. In sum, Nienaber
J’s
approach is captured in the following
dicta
:
“
Cancellation
of the contract does not of course preclude a claim for damages
computed on the basis of positive
interesse
.
That much is trite. The aggrieved party is perfectly entitled to cast
his eyes forward to the position he would have occupied
had the
contract been fulfilled. But it may suit his purpose to look
backwards instead, to the position in which he would
have been if no
contract had been entered into at all. By the very act of cancelling
the contract the aggrieved party is trying
to sever all contractual
links and to divest himself of the consequences of the contract.
There would be no inconsistency in granting
him the right, at his
election, to turn the clock backwards instead of forward in an
effort to restore the
status
quo
by
means of a claim for damages. Upon cancellation the parties are
liable, in so far as it may be feasible to enforce it,
to effect
restitution of what each has received: a claim for damages,
calculated along the lines of negative
interesse
,
would therefore simply be following suit.
Indeed, it may
be to his advantage to do so. Perhaps, for example, he has suffered
no loss of profit at all (a form of positive
interesse
)
because he entered into a bad bargain, although he had extensive out
of pocket expenses (a form of negative
interesse
).
According to the usual method of computing damages he has suffered no
loss. Or he may be unable, for some or other reason, to
prove a loss
of profit adequately. Or his out of pocket expenses may exceed the
loss of profit he is able to prove. The examples
can be multiplied.
Why should he be prevented from claiming damages on the alternative
basis? The guilty party has no cause for
complaint: these are real
and not imaginary losses. suffered by the aggrieved party. They were
incurred (or, as the case may be,
the opportunity for gain was
neglected) in the expectation that the contract would be performed.
If the contract had been
performed there would not have been losses.
They qualify as losses for the very reason that the contract has been
cancelled. Cancellation
is the legitimate consequence of the other
party's breach of contract. These losses therefore flow from the
other party's breach.
No reason is apparent why the guilty party
should be protected from compensating his opposite number for
such losses.
”
[16]
[13]
A scholarly
but trenchant criticism of the judgment was mounted by Prof G
Lubbe.
[17]
At heart the
criticism focussed on the fact that the plaintiff is not allowed to
claim damages she would not have suffered had
the contract been
performed. The criticism it has to be said is not without merit.
[14]
There has
been other commentary by academics which has been no less critical of
the approach adopted by Nienabler J than Prof G
Lubbe had been.
[18]
The common theme pursued by all of the learned authors is on the
usefulness of the concept negative
interesse
in assessing damages for a contractual breach. They all share a
discomfort with the departure of this approach from the rule that
damages are calculated on the basis of the position the plaintiff
found herself in, in direct contrast to the position she would
nominally have found herself in had the contract been performed.
[15]
Probert
was taken on appeal to
the then Appellate Division (AD).
[19]
The AD was aware of the criticisms.
[20]
However, it found that Nienaber J was misdirected in his finding that
the estate agent was not an agent of the defendant. It found
that on
the facts the estate agent was clearly an agent of the defendant,
[21]
and that payment to the estate agent constituted payment to the
defendant in discharge of the plaintiff’s contractual
obligation
to the defendant.
[22]
The AD decided the appeal purely on this conclusion and
elected to abstain from dealing with the issue of whether Nienaber
J
was correct in his characterisation of our law regarding calculation
of damages for breach of contract. Thus, it made no comment
on the
whether damages can be calculated on the basis of a negative
interesse
.
It, however, accepted that the damage sustained by the plaintiff was
equal to the amount she paid to the estate agent. It deliberately
avoided saying that this damage was calculated on the basis of her
negative
interesse
.
It seems to have accepted that these damages flowed “
naturally
and generally from the kind of the breach of contract in question and
which the law presumes the parties contemplated
as a probable result
of the breach
”
[23]
.
[16]
The issue
resurfaced in front of a full court of this Court in
Hamer
.
[24]
The Court, consisting of Eloff JP, Strydom and Goldstein JJ, had the
opportunity to consider the
ratio
in
Probert.
After due consideration the bench was divided, with Strydom J
supporting the
ratio
,
while Eloff JP and Goldstein J (the majority judgment) rejected it.
The majority judgment was penned by Goldstein J. The plaintiff
and
the defendant concluded a partnership agreement during January 1989.
In terms of the agreement the plaintiff was to commence
working for
the partnership from 1 March 1989. To this end he resigned from his
employment. The defendant repudiated the agreement,
which the
plaintiff accepted. The plaintiff sued him for the loss of one
month’s salary as well as the annual increase
he would have
earned with his previous employer. His damages were calculated on the
basis of his negative
interesse
as explained in
Probert
.
The court a
quo
granted absolution from the instance against the plaintiff. On
appeal, Strydom J held that the law as set out in
Probert
was correct and that the appeal should succeed with the plaintiff
being entitled to an order in terms of his claim. The majority
disagreed. In the words of Goldstein J:
“
I am of
the respectful view that Nienaber J erred in finding that the
plaintiff may elect to pursue either his negative or
positive
interesse
.
The learned Judge's approach negates the effect of a contract on a
plaintiff's
patrimonium
.
The act of contracting necessarily changes a
plaintiff's
patrimonium
and
a court cannot ignore such change. I would dismiss the appeal with
costs.
”
[25]
[17]
I am bound
by the majority decision in
Hamer
,
though I must say this causes me no anxiety. However, it bears noting
that a few years later the issue arose before Farlam J (as
he then
was) in
Mainline
[26]
which was heard in the Cape Provincial Division. Farlam J was not
bound by the decision in either
Probert
or
Hamer
.
Here the issue was analysed through the lenses of terms such as
“
reliance
interests
”
(which is the same as negative “
interesse
”,
“
fulfilment
interest
”
(which is the same as positive “
interesse
”),
“
expectation
interest
”
(which as far as I can discern is the same as positive “
interesse
”),
restitution interest (which as seen in [12] above could be easily be
interpreted as negative “
interesse
”,
though in my view, the pleadings and the evidence to be led is not
the same in each case) as well as the overlap
[27]
of these terms in certain claims. All the terms are used as
descriptive of a particular claim rather than as analytical concepts.
In this sense they are really labels. Most of them are commonly
used within the Anglo American systems of law. I comment
on the
utility of these terms in [21] below.
[18]
Bearing in
mind that an overlap in the description of a claim can arise in a
particular case and drawing from the academic analysis
of Sir Guenter
Treitel on remedies for breach of contract, Farlam J warned against
drawing conclusions about the validity of the
claim by relying on “
a
priori arguments
”.
[28]
And, from this he concludes:
“
…
the
Hamer
position,
that
only
the
positive interest can be claimed where damages are sought for breach
of contract, and the
Probert
position,
that the negative interest can be claimed but only where the contract
has been cancelled, rest on
a
priori
arguments.
…
It follows that
if one were to hold that either
a
priori
position
has been adopted for our law, it would mean that our law would be in
splendid isolation from both of the systems
from which elements of
our law of damages have come.
”
[29]
[19]
Noting that
Hamer
followed the dictum of Innes CJ in
Victoria
Falls and Transvaal Power
for its inspiration, Farlam J held that Innes CJ referred to “
the
general principles
”
and therefore, “
cannot
be used as authority for a decision that there has been an a priori
assumption on the part of our law on the point presently
in
issue
”
[30]
,
i.e. that only positive
interesse
can be claimed by a plaintiff suing on a breach of contract. As for
the holding in
Probert
Farlam J concludes that as a claim for “
reliance
interest
”
(negative
interesse
)
is recognised in these Anglo-American systems it is part of our
law
[31]
, save for the fact
that he does not agree with Nienaber J that “
cancellation
is not a prerequisite for the recovery of reliance loss
”.
[32]
Finally, for Farlam J a claim for “
reliance
interest
”
is restricted to the extent that it cannot exceed the “
expectation
interest
”
(which as far as I could fathom is the same as positive
interesse
).
[33]
So, while the learned judge allows for a claim in terms of negative
interesse
he
qualified this claim by placing an upper limit to the claim: that of
a positive
interesse
.
This it would appear is necessary to prevent the plaintiff from being
overcompensated. The problem, however, with this approach
is that to
determine this issue one has to know what the positive
interesse
is. If this is so, then the question that arises is: is this not a
claim in terms of the positive
interesse
,
albeit one that does not cover the entire positive
interesse
because the plaintiff saw fit to claim a lesser amount?
[20]
I have
difficulty with Farlam J’s conclusion that the holding in
Hamer
was derived from an
a
priori
assumption. Innes CJ’s
dictum
was not a statement of general principle of our law. It is an
articulation of, in the words of Corbett JA, “
a
fundamental rule
”.
[34]
This rule was merely applied in
Hamer
where Goldstein J said that in our law the impact on the plaintiff’s
patrimonium
by the breach (the learned Judge referred to it as the impact of the
“
act
of contracting
”)
must be taken into account when calculating the damages endured by
the plaintiff. This is consistent with long-standing
authority to the
effect that a plaintiff is not entitled to be overcompensated. And
so, an integral part of the “
fundamental
rule
”
is that the losses endured or that would have been endured by the
plaintiff have to be taken into account when assessing
the value of
her claim. This is emphasised by Schreiner JA in
Lammers
:
“
I can see
no reason why the appellants should have to pay the respondent more
than the value of the car at the date of the eviction,
no matter what
the cost of the improvements had been. He lost by the eviction the
value of the car at that date; that he can recover.
He lost,
according to the evidence, further substantial sums by buying spare
parts and putting them to uneconomic use; that he
cannot
recover.”
[35]
[21]
Before
leaving this issue it would be appropriate to say something about the
utility of the descriptive terms relied upon Farlam
J in
Mainline
.
[36]
The importation of the terms into our law may well describe how a
claim in a particular case was assessed by the court in the course
of
giving practical effect to the consequence of a breach, but they do
not alter the fact that the claim must be assessed on the
basis of
the “
fundamental
rule
”
that only losses occasioned by the breach can be compensated and that
the plaintiff is obliged to mitigate her loss. That
said, in my view
these descriptive terms have served to confound rather than clarify
the status of our law. Remaining focussed
on the simple approach
summarised by Corbett JA (quoted above in [9] and which draws from
the
dictum
of Innes CJ) is the most useful way of approaching this issue. I am
of the view that the utility of different descriptive terms
is at
best minimal, especially when at times different terms are used by
different authors to mean the same thing. The proliferation
of
descriptive terms has not really advanced our understanding of the
law of damages for contractual breach. What is of greater
concern is
the fact that the use of these descriptive terms can, if care is not
taken, result in a modification of the “
fundamental
rule
”
regarding the assessment of damages for contractual breach in a
radical manner. I do not discount the fact that such a modification
may be necessary in the light of the transformation of our entire
legal system by the enactment of the
Constitution
of the Republic Act, 108 of 1996
(the Constitution), or in light of the evolution of our
mores
as reflected in public policy, or even in light of our economic
development. But, in that event, a proper case has to be made out
and
the
ratio
must be based on such transformation, evolution or development, which
must show that the “
fundamental
rule
”
no longer serves its purpose.
[22]
In
conclusion on this issue it is appropriate to return to
Probert
,
which is the
fons
et origo
of this lively and robust debate. On the facts of
Probert
,
the law would entitle her to claim more than she has paid to the
estate agent, (on the assumption that the price of the share
block
had increased since her payment, i.e. it may have been a “
good
bargain
”),
but it also compels her to claim less than she paid (on the
assumption that the price of the share block (or shares) had
decreased since payment, i.e. it may have been a “
bad
bargain
”).
She is, of course, entitled to claim the full amount she paid, if
that is the difference between what she paid and what
she would have
received had the contract been performed (on the assumption that the
price of the share block had neither increased
nor decreased, i.e. it
may have been a “
neutral
bargain
”).
In other words, she is only entitled to claim the amount she would
have received had the contract run its course. No more
and no less,
unless she herself foregoes part of her loss (i.e. claims less than
the entire loss caused by the breach – this
could result from
the value of the share block increasing in value but upon her
election she only wishes to claim the amount she
paid, which
represents only part of her loss
[37]
).
Howsoever she crafts her claim, she nevertheless is required to
make the necessary averments in her POC and prove their
correctness
at trial in order to succeed in her claim. Whether this approach is
referred to as a claim based on positive
interesse
[38]
or something else is of no material import. The reality is that our
law on the measure of contractual damages allows a plaintiff
to only
recoup losses occasioned by the breach. Approaching the matter this
way, ensures that the plaintiff is not out of pocket
for any of her
losses, nor is the defendant out of pocket by being made liable for
losses that have no bearing on the breach.
Application
of these legal principles to the present case
[23]
The
plaintiff’s claim is that the defendant breached the contract
by failing to install data cabling and electrical equipment
that
complied with the Molex Cabling standard at the premises of the
plaintiff’s client. It paid the defendant R 357 521.10.
to
perform this work and supply the equipment. The defendant supplied
electrical equipment which did not comply with the standard.
Non-compliance with the standard constituted its breach. As a result
the plaintiff, after affording the defendant an opportunity
to remedy
the breach, cancelled the contract and employed a third party to do
the necessary “
remedial
work
”
required to ensure compliance with the standard. It seeks return of
the full amount paid, but does not tender the return
of whatever it
received in terms of the contract. Nor does it say what the price of
the remedial work was.
[24]
At the
hearing Mr Cremen for the plaintiff claimed that the plaintiff’s
claim was for restitution of the price paid. A claim
for restitution
is not a claim for contractual damages. It is a separate and distinct
contractual remedy.
[39]
For a
claim of restitution (or rescission as it is sometimes referred to)
to succeed the plaintiff must in her pleadings tender
return of
whatever she has received from the bargain.
[40]
If she received no benefit at all as had occurred in
Probert
,
she must plead this fact. Further, the plaintiff is also relieved of
this duty to restore any benefit received on the ground of
impossibility.
[41]
In this
case she must plead the impossibility. None of this is in the
pleadings of the plaintiff in this case. Absent averments
to this
effect, the cause of action relied upon cannot be sustained. Hence,
the exception has to succeed.
[25]
If, on the
other hand, the claim is to be assessed on the basis that it is one
for damages, then having regard to the discussion
in [7] – [22]
above, it too fails to contain the necessary averments to sustain a
cause of action. The plaintiff must indicate
what the value of its
patrimonium
is as a result of the breach and what it would have been had no
breach occurred. This it has not pleaded.
Costs
[26]
Both
parties agree that costs should follow the result. However, the sum
claimed falls within the jurisdiction of the Magistrates
Court. This
raises the question: should the costs be awarded on the basis that it
be taxed on the Magistrates Court’s scale?
The defendant
submitted that the answer depended on which party was successful in
these proceedings: if the plaintiff was successful
it should be
allowed to only recover the costs that it would have been allowed in
the Magistrates Court as it, being
dominis
litis
,
had elected to come to the High Court. However, should the defendant
be successful it should be allowed to recover its costs on
the High
Court scale as it was brought to the High Court by the plaintiff. The
plaintiff did not make any submission that undermined
the persuasive
force of the defendant’s submission. Accordingly, an order
consistent with this logic will be made here.
Order
[27]
The
following order is made:
1.
The
defendant’s exception is upheld.
2.
The
plaintiff’s particulars of claim are struck-out.
3.
The
plaintiff may deliver amended particulars of claim within 10 (ten)
days from the date of this order.
4.
The
plaintiff is to pay the costs of this exception.
_________________
Vally
J
Dates
of hearing: 1
November 2018
Date
of judgment: 14
December 2018
For
the Plaintiff/Respondent : Craig
Cremen
Instructed
by: Frederick
P Rall Attorneys
For
the Defendant/Excipient: Cherie
de Villiers-Golding
Instructed
by: Shaban
Clarke Coetzee Attorneys
[1]
The numbering here reflects the
paragraph numbering in the POC. But, as the contents of the
paragraphs have not been copied verbatim
from the POC, the customary
practice of placing them within inverted commas has not been used
here.
[2]
It is to be noted that in para 7 of
the POC the plaintiff makes reference to a “Molex Cabling
Standard”, but in this
para (para 9) the POC makes reference
to a “Molex Cabling Agreement”.
[3]
Salzmann v Holmes
1914 AD 152
at 156;
Minister
of Safety and Security v Hamilton
2001 (3) SA 50
(SCA) at 52G-H;
Baliso
v Firstrand Ltd t/a Westbank
2017 (1) SA 292
(CC) at [33]
[4]
Champion v J D Cilliers & Co
Ltd
1904 TS 788
AT 790-1;
Oceana Consolidated Co Ltd
v The Government
1907 TS
786
at 788;
Stols v
Garlicke & Bousfield Inc
2012 (4) SA 415
(KZP) at 421H
[5]
Theunissen v Transvaalse
Lewendehawe Koōp Bpk
1988 (2) SA 493
(A) at 500E-F;
Lewis
v Oneanate (Pty) Ltd
[1992] ZASCA 174
;
1992
(4) SA 811
(A) at 817F
[6]
McKenzie v Farmers Co-operative
Meat Industries Ltd
1922
AD 16
at 23;
Evins v Shield
Insurance Co Ltd
1980 (2)
SA 814
(A) at 838E-F
[7]
Trotman v Edwick
1951 (1) SA 443 (A) 449B
[8]
Holmdene Brickworks (Pty) Ltd v
Roberts Construction Co. Ltd
1977 (3) SA 670
(A) at 687B-F
[9]
The full citation of
Victoria
Falls
is to be found in
the body of the quotation. The entire
dictum
of Innes CJ reads:
“
The
agreement was not one for the sale of goods or of a commodity
procurable elsewhere. So that we must apply the general
principles which govern the investigation of that most difficult
question of fact - the assessment of compensation for breach
of
contract. The sufferer by such a breach should be placed in the
position he would have occupied had the contract been performed,
so
far as that can be done by the payment of money, and without undue
hardship to the defaulting party. The reinstatement
cannot
invariably be complete, for it would be inequitable and unfair to
make the defaulter liable for special consequences which
could not
have been in his contemplation when he entered into the contract.
The laws of Holland and England are in substantial
agreement on this
point. Such damages only are awarded as flow naturally from the
breach, or as may reasonably be supposed to
have been in the
contemplation of the contracting parties as likely to result
therefrom (see
Voet
45.1.9;
Pothier
Oblig
sec
160;
Hadley
v Baxendale
9
Exch 341
;
Elmslie
v African Merchants Ltd
1908
EDC 82
, etc).”
[10]
Id.
at 689D-E
[11]
Probert v Baker
1983
(3) SA 229 (D)
[12]
Id
.
at 235G
[13]
n 11, at 231D
[14]
Id
.
at 234A
[15]
Id at 234C and the cases there cited
[16]
Id. at 234E-235B
[17]
The assessment of loss upon the
cancellation for breach of contract
.
(1984) 101
SALJ
616
– 640.
[18]
D J Joubert
1983
De Jure
at 373;
A J Kerr
1984
THRHR
at 460;
J S McLennan
(1984)
SALJ
39
;
S W J van der Merwe and
M F B Reinecke
1984
TSAR
at 85
[19]
Baker v Probert
1985 (3) SA 429 (A)
[20]
Id
.
at 436D
[21]
Id
.
at 441G
[22]
Id
.
at 445D
[23]
Holmdene Brickworks (Pty) Ltd
n 8 above. See also the accompanying quotation in [10] above
[24]
Hamer v Wall
1993 (1) SA 235 (T)
[25]
Id
.
at 240G-H
[26]
Mainline Carriers (Pty) Ltd v Jaad
Investments CC and Another
1998 (2) SA 468 (C)
[27]
One of the overlaps that has been
identified in the judgment is that of “
restitution
interest
” with that
of “
reliance
interest
”. Here, in
the words of Farlam J the overlap is “
to
a considerable extent.
”
At [19]
[28]
Id.
at [20]
[29]
Id
.
at [21] – [22]
[30]
Id
.
at [30]
[31]
Given that our law is a hybrid
between Roman-Dutch and English law
[32]
n 26, at [58]
[33]
Id
.
at [57]
[34]
Quoted in [9] above
[35]
Lammers and Lammers v Giovannoni
1955 (3) SA 385
(A) at 394A-B
[36]
See [17] above
[37]
The effect of this particular
scenario is often referred to as her claim being one of
restitutionary damages, but this can be
a misnomer for it is not
really a claim for damages. A claim for restitution is distinct and
different from a claim for damages.
This is dealt with in more
detail in the body of the judgment at [24].
[38]
The fact that these descriptive terms
are not useful assessment tools is underscored in a comment by Prof
Lubbe, to the effect
that the distinction between negative and
positive i
nteresse
is more apparent than real, G Lubbe, n 16, at 627
[39]
Baker v Probert
,
n 19, at 439A-B;
National
Sorghum Breweries Ltd t/a Vivo African Breweries v International
Liquor Distributors (Pty) Ltd
[2000] ZASCA 159
;
2001 (2) SA 232
(SCA) at
[4]
of the judgment of Olivier JA at 239I-J
[40]
Custom Credit Corporation Ltd v
Shembe
1972 (3) SA 462
(A)
at 470C and the cases there cited;
Probert,
n 11, at 233C
[41]
Marks Ltd v Laughton
1920 AD 12
at 21