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[2015] ZAFSHC 147
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Georgious N.O and Others v Freyssenet Posten (Pty) Ltd and Another (5406/2014) [2015] ZAFSHC 147 (6 August 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Case number: 5406/2014
DATE: 06 AUGUST 2015
In the matter between:
NICOLAS GEORGIOU N.O
GOERGIOU NICOLAS N.O.
JOSEPH REYNOLDS CHEMALY N.O
(In their capacities as trustees of
the N Georgiou
Trust with registration number
TMP757)
...........................................................................
1st
Plaintiff
LOCH LOGAN WATERFRONT (PTY)
LTD
...................................................................
2nd
Plaintiff
And
FREYSSENET POSTEN (PTY)
LTD
..............................................................................
1st
Defendant
MURRAY & ROBERTS CONSTRUCTION
(PTY) LTD
............................................
2nd
Defendant
CORAM: EBRAHIM, J
HEARD ON: 29 MAY 2015
JUDGMENT BY: EBRAHIM, J
DELIVERED ON: 6 AUGUST 2015
[1] The 1st & 2nd plaintiffs have
sued the 1st defendant, to whom I shall refer herein as the
Excipient, for specific performance
and damages, respectively,
arising out of an alleged breach of contract. The excipient has
taken exception to both claims in the
declarations filed by the
plaintiffs on the basis that the particulars contained therein lack
averments necessary to sustain a
cause of action alternatively are
vague and embarrassing.
[2] The first plaintiff, a trust, was
the owner of a building site situated at the Loch Logan Waterfront in
Bloemfontein. On 20
October 2005 the 1st plaintiff sold the property
to the 2nd plaintiff which, at the time, was registered as Basfour
3213 Pty Ltd.
The property was registered in the name of Basfour on
30 November 2005. On 2 December 2005 2nd plaintiff changed its name
to
Loch Logan Waterfront. In terms of clause 11.2.4 of the sale
agreement between 1st & 2nd plaintiff it was recorded that the
property would be an income earning activity and that the 2nd
plaintiff would be placed in possession of a going concern on date
of
registration of transfer of the property into its name.
[3] On 3 July 2005 the 1st plaintiff
entered into a written agreement (“the principal agreement”)
with 2nd defendant,
a building contractor, for the construction of a
new shopping mall as well as additions to the existing shopping
centre situated
at the Loch Logan Waterfront, Bloemfontein (“the
project”). In conformity with the joint Building Contracts
Committee
(“J BCC”) of South Africa. Nominated/Selected
Sub-contract agreement and the principal agreement, second defendant
appointed the Excipient as sub-contractor for the post tensioning
reinforcement subcontract on 4 October 2005 and entered into
a
written sub-contractors agreement with the Excipient.
[4] Pursuant to purchasing the
aforesaid property the 2nd plaintiff concluded a lease agreement on 1
September 2007 as Lessor with
a company called Riverside Park Trading
110 t/a Nino’s Loch Logan as lessee. In terms of the lease 2nd
plaintiff leased
to Nino’s Shop No UG45 situated on the
property for a period of 5 years commencing 1 September 2007 at a
basic monthly rental
per square metre plus VAT and a 9% escalation
fee calculated annually on the anniversary date of the lease.
[5] During December 2014 the first and
second plaintiffs issued summons against the second defendant and the
Excipient as a result
of the state of disrepair of the sub-contract
work conducted by the Excipient. It was alleged in the particulars
of claim that
the Excipient had failed to perform the work in a
proper, workmanlike and professional manner as a result of which a
certain wall
on the western façade of the shopping mall was
unstable and in danger of collapsing thereby causing injury and loss
of life
to tenants and patrons of the shops in its vicinity.
[6] The 1st and 2nd plaintiffs,
however, expressly disavowed any intention of pursuing any claim
against the second defendant and
have instituted 2 claims against the
Excipient based solely on the latter’s alleged breach of the
sub-contract entered into
with 2nd defendant. The first claim in the
summons encompasses the 1st plaintiff’s claim for specific
performance in accordance
with the Excipient’s written tender
document which forms the basis of the sub-contract agreement entered
into bet the Excipient
and 2nd defendant. The 2nd claim relates to
the 2nd plaintiff’s claim for payment of R6 115 183.40 as
special consequential
damages as a result of the loss of rental
income occasioned by its cancellation of the lease agreement with
Nino’s due to
the dangers and risk to life posed by and
inherent in the defective workmanship of the Excipient.
[7] On the 10 February 2015 the 1st
defendant gave notice of its intention to except to the particulars
of claim alternatively to
file a motion to strike them out in terms
of Rule 30 A on the grounds that they are vague and embarrassing
and/or lack averments
necessary to sustain a cause of action. The
plaintiffs were afforded an opportunity as required by rule 23(1) of
the Uniform Rules
of the High Court of removing the cause of
complaint and having failed to do so in the requisite time, the
Excipient filed its
exception on 4 March 2015. It is necessary to
examine the contractual documents relied upon by the plaintiffs as
well as the contractual
relationships which came into existence as a
result of these documents with a view to determining whether the
plaintiffs averments
in the particulars of claim can stand/withstand
the attacks and challenges mounted against it.
[8] Aside from the two main grounds of
the exception, the Excipient also took issue with the plaintiff’s
summons on the basis
that the claims had become prescribed through
the effluxion of time. During oral argument before me however Mr Van
Tonder SC who
argued the exception on the Excipient’s behalf,
abandoned this point, no doubt having reconsidered his position in
the light
of Mr Van Rhyn’s argument on behalf of the plaintiffs
that established authority makes it clear that it is not competent to
raise prescription by way of exception but rather by way of special
plea.
[9] An exception is an objection to a
pleading on a point of law in respect of which no facts may be
adduced by either party to
show that the pleading is excipiable, the
defect objected against appearing ex facie the pleading itself. It
is designed to dispose
of pleadings which are so vague and
embarrassing that an intelligible cause of action or defence cannot
be ascertained or to determine
such issues between the parties as can
be adjudicated upon without the leading of evidence.
(See Herbstein and Van Winsen: The
Civil Practice of the
High Courts of South Africa (5th ed) at
530 et sen)
In Colonial Industries Ltd v Provincial
Insurance Co Ltd
1920 CPD 627
at 630 Benjamin, J said:
“……. save in
instances where an exception is taken for the purpose of raising a
substantive question of law
which may have the effect of settling the
dispute between the parties, an excipient should make out a very
clear, strong case before
he should be allowed to succeed.”
In Kahn v Stuart
1942 CPD 386
of
391-392 Davis, J opined:
“In my opinion, the Court should
not look at a pleading with a magnifying glass of too high power. If
it does so, it will
be almost bound to find flaws in most pleadings …
In my view, it is the duty of the court, when an exception is taken
to
a pleading, first to see if there is a point of law to be decided
which will dispose of the case in whole or in part. If there
is not,
then it must see if there is any embarrassment, which is real and
such as cannot be met by the asking of particulars, as
the result of
the faults in pleading to which exception is taken. And, unless the
excipient can satisfy the court that there is
such a point of law or
such real embarrassment, the exception should be dismissed.”
[10] In Salzmann v Holmes
1914 AD 152
at 156, Innes JA (as he then was) set out the distinction between an
exception and an application to strike out, succinctly as
follows:
“An exception goes to the root or
the entire claim or defence, as the case may be. The excipient
alleges that the pleading
objected to, taken as it stands, is legally
invalid for its purpose. Whereas individual sections, which do not
comprise an entire
claim or defence, but are only portion of one,
must, if objected to, be attacked by a motion to expunge.”
The onus of showing that a pleading is
excipiable rests on an excipient. In Amalgamated Footwear &
Leather Industries v Jordan
& Co Ltd
1948 (2) SA 891
at 893
Herbstein, J held:
“It seems to me that insofar as
there can be an onus on either party on a pure question of law, it
rests not upon the plaintiff
but upon the excipient. It is the
excipient who is alleging that the summons does not disclose a cause
of action and he must establish
that in all its possible meanings no
cause of action is disclosed.”
[11] In order to succeed then, the
excipient must persuade me that, on any reasonable construction or,
put differently, upon every
interpretation which the particulars of
claim and, specifically, the document/documents on which it is based,
can reasonably bear,
no cause of action is disclosed, failing which
the exception cannot be upheld.
See: Sun Packaging (Pty) Ltd v
Vreulink
1996 (4) SA 176A
at 183D-F.
More especially, because the 1st and
2nd plaintiffs seek to rely on implied terms, the test is whether
such terms can reasonably
be implied. Thus, in effect, where the
term contended for would, as a matter of law, otherwise be implied,
the test is whether
the agreements concerned can reasonably be
interpreted as not excluding that implied term.
[12] With these legal principles in
mind, I turn then to consider the arguments advanced for and against
the grounds of the exception
raised & will do so with reference
to the following documents, described as:
(i) the Murray & Roberts agreement
annexed to the summons and marked “A”;
(ii) the tender documents, annexed to
the summons and marked “B”;
(iii) the price documentation “Annexure
C1 and C2”;
(iv) the pro forma version of the
subcontract agreement entered into between the Excipient and 2nd
defendant annexed to the summons
and marked “E”;
(v) the notice in terms of the
provisions of section 12(1)(a) of the National Building Regulations
and Building Standards Act 103
of 1977, annexed to the summons and
marked “F”.
(vi) the deed of sale entered into by
1st and 2nd plaintiffs annexed to the summons and marked “G”;
(vii) the lease agreement concluded by
2nd plaintiff with Nino’s and annexed to the summons and marked
“H”.
THE FIRST PLAINTIFF’S CLAIM
[13] With reference to the first claim,
the material allegations are set out in paragraphs 6 and 7 of the
particulars of claim viz:
“6. In terms of Section 6 of
annexure “B” and annexure “E” hereto the
express alternatively implied,
alternatively tacit terms of the
Nominated/Selected Subcontract Agreement were, inter alia the
following:
6.1 The 1st Defendant was totally
liable for the design, supply and installation of the Post-Tension
cables, etc. as well as additional
reinforcement so that the design
and installations met the requirements of the project; and
6.2 The First Defendant will perform in
accordance with the intended purpose of the works and will closely
liaise with the contractor
in all matters concerned; and
6.3 The First Defendant will perform
the said subcontract work in a proper, workmanlike and professional
manner.
7. The First Defendant failed to comply
with the provisions of annexure “B” and “E”
hereto and failed to
conduct the selected subcontract work in a
proper, workmanlike and professional manner in the following
respects:
7.1 the top reinforcing for the
cantilever portion of the band on the gridline at the first floor
level had been underprovided;
7.2 the design did not allow for the
wall along the edge of the slab at the first floor;
7.3 excessive deflections occurred on
the slow curve slab edge;
7.4 the design had to allow for a
canopy to be attached to the cantilever, which canopy was build but
not installed due to the cantilever
deflections;
7.5 the reinforcing over gridline 16 is
deficient and has insufficient load allowances;
7.6 the increase of moisture at the
exposed top of the curve wall caused same to expand.
THE SECOND PLAINTIFF’S CLAIM
[14] In regard to the second claim the
material allegations therefore are contained paragraphs of the
particulars of claim viz:-
“10.4 As a result of the facts
and circumstances pleaded in paragraph 9.1 above, the Second
Plaintiff had to cancel the agreement
of lease, annexure “H”
hereto, with the lessee, Nino’s, where after Nino’s
evacuated the shop in which
its business was conducted in the
property.
10.5 As a result of the cancellation of
the agreement, annexure “H” hereto, the Second Plaintiff
suffered damages in
the amount of R6 115 183,40 due to the loss of
rental for the said premises during the period 1 June 2008 to 1 May
2014.
10.6 The amount of R6 115 183,40 is
calculated and made up as set out in annexure “I” hereto.
10.7 It was within the contemplation of
the Second Plaintiff, First and Second Defendants when the
agreements, annexures “B”,
“E” and “H”
hereto were entered into that the Second Plaintiff would suffer the
aforesaid damages in the
event of the First Defendant’s
aforesaid breach of contract.”
[15] The primary objection of the
excipient to the 2 claims of the plaintiffs is that the plaintiffs
rely on an alleged breach of
contract by the Excipient without having
set out averments in their particulars of claim necessary to sustain
a contractual basis
for such breach. In fact the attitude of the
excipient is that no such contractual basis exists or could come into
existence in
light of the absence of a factual averment of a binding
agreement between the 1st and 2nd plaintiffs and the Excipient to
perform
the alleged design and construction work. In other words,
the claims of the 1st and 2nd plaintiffs depend entirely on the
existence
of one or other or all of the terms expressed in paragraphs
6 and 10 of the particulars of claim, respectively. If those terms
cannot be held to be part of the principal building contract then
neither of the plaintiffs has a cause of action and the exception
must succeed.
THE EXCEPTION TO THE 1ST CLAIM
[16]
16.1 Mr Van Tonder prefaced his
objection to the first claim for specific performance and
rectification of the defect by alluding
to the selective manner in
which the 1st plaintiff had relied on the principal building
contract. He referred to the clause relating
to the latent defects
liability period (clause 27) which provides:
“27.1 The latent defects
liability period for the works shall commence at the start of the
construction period and end (5)
five years from the date of
achievement of final completion in terms of 26.0. Defects that
appear up to the date of final completion
shall be addressed in terms
of 24.0 to 26.0.” (the underlining is my own).
Clause 24 deals with practical
completion of the building project and clause 25.0 with the works
completion thereof. Clause 26
provides that the defects liability
period for the works shall commence on the date of works completion
and end at midnight 90
calendar days from such date.
Clause 25 provides:
“25.0 WORKS COMPLETION.
25.1 within 17 days of the date of
practical completion the principal agents shall issue to the
contractor a works completion list
defining the outstanding work and
defects apparent at the date of practical completion to be completed
or rectified to achieve
works completion.
25.2 where, in the opinion of the
contractor the works completion list has been completed the
contractor shall notify the principal
agent who shall inspect within
seven (7) calendar days of receipt of such notice where, in the
opinion of the principal agent,
the works completion list:
25.2.1 Has been satisfactory completed,
the principal agent shall forthwith issue a certificate of works
completion so the contractor
with a copy to the employer.
25.2.2 Has not been satisfactorily
completed the principal agent shall forthwith identify the works
completion list items that are
not yet complete and inform the
tractor thereof. The contractor shall repeat the procedure in terms
of 25.2.”
16.2
16.2.1 The contract accordingly
specifically provides for a 90 day defects liability period which the
excipient argues has conveniently
been overlooked and/or ignored by
the 1st plaintiff. As I understand it, the argument is that because
the principal contract expressly
excludes the Excipients liability
for design, (Clause 4.1), and because the 90 day defects liability
period has expired, no basis
exists upon which the 1st claim for
rectification and specific performance can validly exist and be
sustained, the only logical
conclusion being that the defects
complained of surfaced beyond the 90 day period.
16.2.2 The answer to this argument, off
course, as Mr Van Rhyn pointed out, is that neither works completion
nor final completion
has been achieved, and the certificates of both
works and final completion have yet to be issued in respect of the
project. In
addition he emphasized that all attempts by the
excipient to remedy the defects complained of proved unsuccessful. To
this argument
Mr Van Tonder countered with the response that the
excipient can only then be held to account for the defects complained
of on
the basis of an averment in the particulars of claim that an
assignment by the 2nd defendant to the 1st plaintiff of the rights
flowing from the warranty regarding the design responsibility
occurred prior to final completion and no such averment is made to
sustain a cause of action for specific performance and the
rectification of such defects.
[17] I do not think that it is the
excipient’s case that such an assignment did not take place –
clause 4.2 of the principal
agreement is clear:
“All contractual or other rights
the contractor shall have against such nominated or selected
sub-contractor arising from
any design responsibility undertaken by
them are ceded to the employer. The rights flowing from a warranty
regarding such design
responsibility are ceded to the employer
whether or not such a design warranty is referred to in the
subcontract agreement.”
So the cession of the design
responsibility to the 1st plaintiff occurred on the date of signature
of the principal agreement.
That is not the issue. The issue
relates to the excipient’s submission that regardless of
whether or not 1st plaintiffs
compiled with the 90 day liability
period, they have no cause of action based on design responsibility
against the excipient because
no facts have been alleged in the
particulars of claim to give rise to such a
responsibility/obligation/duty owed by the excipient
to the 1st
plaintiff, more particularly in light of:
(a) The absence of a contractual
relationship between 1st plaintiff and the excipient; and
(b) The failure to annex to its
particulars of claim the schedule of design information forming part
of the sub-contractors agreement
as evidenced by annexure “C2”
alternatively the failure to stipulate the design information agreed
between the parties
to the sub-contractors agreement giving rise to
the design warranty referred to in clause 4.2 of the principal
agreement.
[18] Clause 4.1 expressly provides for
an exclusion of the Excipient’s liability for design elements
in connection with the
subcontract works.
“The sub-contractor shall not be
responsible for the design of the n/s works other than the
sub-contractors or his sub-contractors
temporary works, unless
otherwise stated in the n/s schedule … design elements”
(the underlining is my own).
It is the excipient’s case that,
because no schedule was attached to any of the documents evidencing,
according to 1st plaintiff,
the conclusion of the subcontract, from
which any exception to the expressed absence of a design
responsibility on the part of
the excipient is clear, allegations
relating to stipulations of design information constituting a design
obligation was essential
for the Excipient to attract such liability
but same has not been pleaded.
[19] Mr Van Tonder’s submission
in regard to the design responsibility relating to the building
project raises the all-important
issue of to whom the obligation in
respect of the design of the post tension cables was owed and when
such obligation arose. The
answer advanced by Mr Van Rhyn is that
this court must look at the facta probanda and not the facta
probantia in deciding that
issue. Such an approach he contends would
lead to the conclusion that the principle of incorporation by
reference was applicable
since the parties (1st plaintiff, the
Excipient and 2nd defendant) intended that the principal building
contract (Annexure A),
the tender document (Annexure B), the tender
price letter (Annexure C1) and the appointment letter (Annexure C2)
be read together
as a written record of an agreed transaction between
them. He argued that the facta probanda were
(a) Annexure C1 evidencing the tender
price submitted by the 1st defendant on 2 August 2005
(b) Annexure D evidencing the
acceptance of the design on 4 October 2005 by the principal agent of
the 1st plaintiff (the quantity
surveyors) and
(c) Clause 2, 6, and 13 of the tender
document.
[20] All of these documents, he argued,
also refer to, and are concerned with the sub contract. In terms of
clause 2 tenderers
(i.e. Excipient/1st defendant) are referred to the
specific conditions and obligations binding the main contractor in
respect of
the building principal agreement. In terms of clause 6
the tenderer undertakes to acquaint himself fully with the terms of
the
tender documents, as well as the principal building contract and
in terms of clause 13, the tenderer specifically agrees that the
design and installation of the post tension cables and the additional
reinforcement meets the requirement of the “works”
and
that he will perform in accordance with the intended purpose of the
“works”, liaising closely with the main contractor
in all
matters concerned.
[21] As I understood it, the thrust of
Mr Van Rhyn’s submissions in regard to the design
responsibility of the project was
that, on the basis of the clauses
in the tender document, the price document, and the acceptance
letter, it was proper for this
Court to have regard to the terms of
the principal building agreement concluded between the 1st plaintiff
and 2nd defendant and
that, by adopting the principal of
incorporation by reference, clause 4.2 of the principal agreement
evidencing the assignment
of the design responsibility from 2nd
defendant to 1st plaintiff was incorporated into the sub-contract
creating a causal contractual
nexus between the 1st plaintiff and the
Excipient in regard to the design and construction of the post
tension cables and reinforcement
for the building project. As
authority for this proposition Mr Van Rhyn referred me to the
decision of FJ Mitrie (Pty) Ltd v
Madgwick and Another
1979 (1) SA
232
(D) which dealt with a deed of suretyship which had omitted the
name of the debtor. The learned Judge President James J.P., after
carefully reviewing the authorities, came to the conclusion that the
principle applies because it had been the intention of the
parties
from the outset that the Deed of Suretyship and the memorandum of
agreement were to be read together as a written record
of an agreed
transaction between them and if that were done there could be no
reasonable doubt that the debtor was he in respect
of whose
indebtedness the plaintiff claimed the amount from the defendant
under the deed of suretyship. He accordingly ruled that
the deed of
suretyship was valid in that case.
[22] Having acquainted myself as best I
can with the law on the topic, I am at a loss to find some
consistency of application of
the principle of incorporation by
reference with the submissions made by Mr Van Rhyn. It is trite law
that a document referred
to in a written contract for the sale of
land may be read into such contract as part thereof. In Coronel v
Kaufmann
1920 TPD 207
at 209 Wessels, J held:
“But it must be clear to what the
reference is …”
See also Van Wyk v Rottchers Saw Mills
Pty Ltd
1948 (1) SA 983
(AD) at 990-991.
[23] For the purpose of deciding Mr Van
Rhyn’s contention, I shall assume (without deciding) in favour
of the 1st plaintiff
that the principle of incorporation by
reference, as it has been recognized and applied in regard to
contracts for sale of Land,
is equally applicable to building
contracts. It is a condition of the incorporation of other writing
into a written document required
by law to contain the terms of the
contract, if such contract is to have validity, that such other
writing be referred to in the
written document. It is not disputed
that reference to sub contract work is made in the principal
agreement and specifically with
regard to design and construction
(clause 4.2). Moreover I do not think that there could have been any
doubt (and no such argument
was raised by Mr Van Rhyn) in the mind of
the excipient (1st defendant) when he concluded the subcontract with
2nd defendant that
the design responsibility which he undertook in
terms of clause 13 of the tender document was owed to the contractor
(2nd defendant)
from the date of signature of the sub contract.
[24] It is the 1st plaintiff’s
case that subsequent to the Excipient’s appointment as selected
subcontractor, the Excipient
and second defendant entered into a
subcontractor agreement, the originals and copies whereof are in the
possession of the Excipient
and 2nd defendant but not in the
possession of the plaintiffs. The point of all of this is that there
is no subcontract before
me relating to the design responsibility,
whether or not same is mentioned therein. What the excipient’s
case is, is that
there is no indication whatsoever of when precisely
1st plaintiff alleges the design responsibility owed to it by the
Excipient
arose because there is no Sub contract and the design
responsibility must be set out and stipulated in the particulars of
claim
in sufficient detail for the cession of that responsibility
from 2nd Defendant to 1st Plaintiff to take effect and no such
particularity
is set out. But that argument is misconceived because
of the provisions of clause 4.2 of the principal agreement. However
on the
substantive argument raised by Mr Van Rhyn, I can find no
reference in the principal agreement to the Excipient’s tender
document, more particularly clause 13, other than formalistic writing
of pre-tender and post tender information dealing exclusively
with
the names and addresses of role players e.g. 1st plaintiff, 2nd
defendant, principal agent, quantity surveyors and engineers.
The
information appears in the section in the principal agreement marked
“contract variables” under clause 41 and it
is in no way
linked to any document or writing in terms of which the Excipient was
to have responsibility for design and installation
of post tension
cables and reinforcement on the building project. The fact that
reference is made to contract drawings under clause
41.6 by way of
various commercial digits, does not achieve for the 1st plaintiff the
necessary link, between the sub contract and
the principal agreement.
[25] In Coronel supra Wessels, J
emphasized that the reference must not depend on oral evidence of the
parties and, in the present
case, without evidence of the verbal
agreement between the parties, it cannot be established on the
pleadings as they stand, that
the Excipient owed an obligation in
respect of design and construction of the post tension cables to the
1st plaintiff. The absence
of the annexation of a schedule of the
design information to the particulars of claim and/or the failure to
stipulate material
allegations in connection with the design
compounds the difficulty which the 1st plaintiff faces of the lack of
a contractual nexus
between it and the excipient. How can it be
said, for the reasons already set out, that such difficulty is
removed by the necessary
implication in the principal contract of a
tacit term as to design responsibility and warranty on the part of
the excipient in
conformity with the allegations pleaded in paragraph
6 of the particulars of claim that the terms of the contract relating
to the
design warranty were express alternatively tacit alternatively
implied? There is simply no room for such an implication as no
contract was entered into by the 1st plaintiff and the excipient.
The contract is a necessary prerequisite to such implication
and it
does not exist. The inquiry is whether, at the trial, the court
reasonably could imply the terms alleged in the declaration.
Mr Van
Rhyn’s contentions in regard to the 1st claim must therefore
fail and are hereby rejected because where a declaration
to a summons
lacks an essential material allegation (in this case, the design
warranty) without which there is no foundation in
law for a claim
made therein, the declaration is bad in law as disclosing no cause of
action.
[26] At the end of the day when all is
said and done, all parties are faced with a contractual situation
where, despite cession
of the design responsibility from 2nd
defendant to 1st plaintiff, 2nd defendant created, by virtue of an
agreement in the form
of the pro-forma subcontract (Exhibit E) which
it concluded with the excipient for the installation of the post
tension cables
and their reinforcement, the well-known chain of
employer (1st Plaintiff) – contractor (2nd Defendant) –
subcontractor
(Excipient). On the basis of this contractual
arrangement, the Excipient’s obligations were owed solely to
2nd defendant
and if work was not done with due diligence and was
ill-performed, the 1st plaintiff’s rights were to be pursued
against
the 2nd defendant alone.The exception to the 1st claim
accordingly succeeds and is upheld.
THE EXCEPTION TO THE SECOND CLAIM.
[27] The grounds upon which the
exception to the 2nd claim is founded are formulated in the following
terms in the notice of exception.
1. The 2nd plaintiff is not a party to
the written building contract (Annexure A) on which its claim is
based.
2. The 2nd plaintiff relies on alleged
breaches of contract without setting out a contractual basis for it.
3. Paragraph 8.2 of the declaration to
the summons refers to an alleged notice to “The plaintiff”
(Annexure F) without
identifying which of the various plaintiffs it
refers to.
4. Paragraph 8.3 refers to alleged
delivery of the notice to the 1st defendant.
5. The alleged delivery of annexure “F”
does not avail any entity other than the owner of the property, i.e.
the 2nd
plaintiff.
6. The matters alluded to in paragraphs
9.1 & 9.2 of the particulars of claim in the context of
paragraphs 8.2 and 8.3 thereof
are irrelevant to any cause of action
other than that of the owner of the property.
7. The alleged agreement referred to in
paragraph 10.3 of the particulars of claim was entered into
approximately 2 years after
the alleged obligation relied upon by 1st
plaintiff in support of its claim, arose.
8. The allegation in paragraph 10.4 of
the particulars of claim fails to identify when the alleged
circumstances pleaded in paragraph
9.1 (the excipients alleged
breach) came to the knowledge of the 2nd plaintiff.
9. The allegations in paragraph 10.4 of
the particulars of claim fail to establish any legal or factual basis
for any ground of
cancellation of the agreement of lease in order to
identify the relationship between shop UG 45 and the allegation in
paragraph
9.1 (the excipient’s breach).
10. The alleged contemplation referred
to in paragraph 10.7 of the particulars of claim finds no factual
basis in the allegations
pleaded and contradicts the allegations as
2nd plaintiff was not a party to documents B & E and in the case
of H (the agreement
of lease) neither of the defendants nor 1st
plaintiff were parties thereto.
11. The damages claimed are excluded
because 2nd plaintiff has failed to allege any basis upon which it
suffered such damage and
to allege what steps it took in order to
mitigate its damages.
[28] The excipient once again
specifically disavowed any liability to the 2nd plaintiff on the
basis of the lack of a contractual
agreement between itself and the
2nd plaintiff. The 2nd plaintiff’s case is that,
(a) the property was sold by 1st
plaintiff to it as a going concern;
(b) the sale included the rental
enterprise conducted in respect of the property;
(c) because of the excipient’s
defective workmanship, the property was in danger of collapsing
causing harm to patrons and
shop tenants and staff. Hence the notice
in terms of the National Building Regulations and Building Standards
Act 103 of 1977
was addressed to the 2nd plaintiff by the local
municipality, which notice in turn was sent to the excipient;
(d) as a result of the excipient’s
breach of contract and the damages posed by the defective
construction and the potential
for harm to occupants of the property,
the 2nd plaintiff was compelled to cancel the lease agreement
(Exhibit “H”),
thus suffering a loss in rental income for
the unexpired period of tenure of the lease by the lessee.
(e) such loss was in the contemplation
of the parties to the building contract viz 2nd plaintiff; the
Excipient and 2nd defendant
at the time of its conclusion as pleaded
in paragraph 10.7. of the particulars if claim.
(f) as a result of a typographical
error, the allegations in paragraph 10.7 of the particulars of claim
omitted to reflect the name
of the 1st plaintiff so as to plead the
case for the contemplation of damages from the perspective of both
1st and 2nd plaintiff.
[29] Two points need emphasising in
regard to the 2nd claim and these are:
(a) as with the 1st claim, it is a
prerequisite to the operation of this claim that there first be some
form of contractual agreement
concluded between the 2nd plaintiff and
the Excipient, attracting the latter’s liability to 2nd
plaintiff in damages in respect
of defective workmanship and no such
agreement/understanding exists between these parties. No specific
obligation on the part of
the Excipient to 2nd plaintiff is alleged
in conflict with such alleged contract in the particulars of claim;
simply because none
exists; neither 2nd plaintiff nor the Excipient
was a party to the principal building contract.
(b) Secondly liability for the damages
claimed are expressly excluded by the agreement of lease concluded by
the 2nd plaintiff and
Nino’s (Exhibit “H”) in terms
of clause (8a) thereof which provides:
“Should the leased premises be
destroyed by any cause whatsoever to an extent which prevents the
lessee from having beneficial
occupation of the leased premises, then
(1) The lessee shall have no claim of
any nature whatsoever against the lesser as a result thereof;
(2) The lessee will be entitled to
determine within (2) calendar months after such destruction or damage
whether or not the lease
shall be cancelled and shall notify the
lessee in writing of its decision.” (the underlining is my own)
[30] Without derogating from the
substance of Mr Van Rhyn’s argument that it was the 1st
plaintiff who initially entered into
the agreement of lease as
representative of 2nd plaintiff, it is apparent that the particulars
of claim as pleaded, paragraph 10.7
being the relevant and offending
paragraph, contains a material omission which cannot simply be
ignored or explained away as, in
Mr Van Rhyn’s words, “a
minor blemish”. The allegations pleaded have an important
bearing on interpretation
and the purpose for which they were
pleaded. As they stand, what is being conveyed is that it was 2nd
plaintiff who concluded
the building agreement with the 1st and 2nd
defendants and the lease agreement with the lessee and that at the
time of the conclusion
of these contracts it had been contemplated by
all these parties that the 2nd plaintiff would suffer the said
damages in the event
of the Excipients breach of contract. Nothing
could be further from the truth as is borne out by the documentation.
The 2nd plaintiff
and the Excipient featured nowhere in the
contractual negotiations and in the eventual conclusion of the
agreements as a matter
of, no doubt, commercial convenience. But
that, in the context of the all important issue of whether the 2nd
plaintiff has pleaded
a sustainable cause of action, is not a “minor
blemish” but a significant omission which cannot simply be
cured by
the addition, and insertion, as urged by Mr Van Rhyn, of the
words “first plaintiff” especially in light of the
failure
of the plaintiffs to make use of the opportunity provided
them on service of the notice of exception of rectifying and
addressing
the complaint so as to properly plead a cause of action
sustainable in law in respect of the 2nd claim - that was not done
and
both plaintiffs remained supine and unyielding.
[31] No liability can attach to the
excipient in the absence of a breach of contract and, to boot, on the
basis of terms in conflict
with the express provisions of an
agreement (clause 8a Exhibit “H”). I consider the
allegation contained in paragraph
10.7 of the particulars of claim as
constituting terms in conflict with the provisions of clause (8a) of
the lease agreement (Exhibit
“H”) which excludes
liability for defects by 2nd plaintiff as lessor to the lessee in
terms which a trial court could
not reasonably imply to the contrary
from all the relevant facts circumstances and documents of the case.
See Lanificio Varum SA
v Masurel Fils Pty Ltd
1952 (4) SA 655
(A). It
follows therefore and I find that the allegations in paragraph 10.7
cannot stand and be sustained as the basis of the cause
of action
pleaded by the 2nd plaintiff in respect of the damages claimed by it
in the summons because those allegations cannot
be held to be part of
either the principal building contract (Exhibit A) or the lease
agreement, to which agreements neither the
2nd plaintiff nor the
excipient were contracting parties in the first place. Baldly put,
there was no contractual privity between
2nd plaintiff and excipient.
It is only the parties to a contract who can be liable for the
breach of that contract and without
a breach of contract there can be
no claim for damages, and no talk of causation and the issue of the
contemplation of damages
does not therefore arise. The well known
dictum of Innes, CJ about damages in Victoria Falls & Transvaal
Power Co. Ltd v
Consolidated Langlaagte Mines Ltd 1915 AD at 22 is
aposite. See also Holmdene Brickwicks v Roberts Construction Co. Ltd
1977 (3) SA 670
(A); Shatz Investments Pty Ltd v Kalovyrnas
1975 (2)
SA 345
(A) at 687; Lavery & Co. Ltd v Jungheinrich
1931 AD 156.
[32] It can hardly be argued in the
case of 2nd plaintiff that it relies on facts in the summons and
particulars of claim which
are clear,
unambiguous and unequivocal when no
contract was concluded and none came into existence between the 2nd
plaintiff and the excipient,
in the first place. By so saying I do
not intend to comment on the quality of the draftmanship of the 2nd
plaintiff’s claim
save to record that the allegations therein
contained are inconsistent with the facts due to the absence of an
averment linking
the 2nd plaintiff and the excipient contractually.
No obligation arose and none was owed at any stage of the building
works in
question by the excipient to the 2nd plaintiff. This is
borne out by the relevant documents - even upon the adoption,
undertaken
by me in pursuance of a resolution of the issues in this
case, of the most benevolent construction and interpretation of the
terms
of the various agreements and contracts and other documents,
referred to in paragraph (7) of this judgement, forming the basis of
the claims pleaded in the summons. As with the first claim, the
averments contained in paragraph 10.7 are extant the cause of
action
pleaded and sought to be relied upon by the 2nd plaintiff in support
of its claim for payment of damages by the excipient.
The exception
to the 2nd claim is accordingly also upheld.
[33] Under the Uniforms Rules of the
High Court, a combined summons, as in the present case, is required
to disclose adequate particularity
and when an exception is taken to
such a pleading and that exception is upheld, it is the pleading
which is destroyed and not the
entire action which commenced with
that summons. It is only the contents of the statement of claims
(i.e. the declaration –
Rule 17(2) which is annexed to the
summons which is struck by the exception in terms of its
particularity and detail for, in drawing
it up, the general rules in
regard to pleadings contained in Rule 18 must be observed. The
upholding of the exception does not
carry with it the dismissal of
the summons or of the action. It is only the particulars of claim
attached which are made legally
extinct. In the words of James J.P
in Santam Insurance Co Ltd v Manqele
1975 (1) SA 607
(D) at 610, the
summons remains as an empty husk until amended particulars are
incorporated into/annexed to it.
[34] It is clear from the cases that
once particulars of claim have been struck out it is open for the
court to grant leave to the
party, in respect of whose pleading the
exception was successfully taken, to amend his pleading within a
particular period. Leave
to amend the particulars of claim in the
case at hand was not sought on the papers but in oral argument before
me, Mr Van Rhyn
requested this indulgence in the event of the
exception succeeding. Mr Van Tonder pressed on for a dismissal of
the claim no doubt,
on the basis of his mandate. But such an order
would not be competent as there is no proper legal authority therefor
and, more
particularly, in the context of the present case, the
exception has not been successfully resolved as a decisive end to the
litigation
between the parties. In the English case of Everett v
Ribbaids
1952 (2) QB 198
(CA) at 206 Romer LJ said:
“The court or a Judge may order
any pleading to be struck out on the ground that it discloses no
reasonable cause of action
or answer and in such case ……
the court or a Judge may order the action to be stayed or dismissed,
or Judgment to
be entered accordingly as may be just.” (The
underlining is my own.)
[35] The current English law rules of
Practice, as contained in the 1961 text at page 574 provide:
“Where the statement of claim ……
discloses no cause of Action because some material element has been
omitted,
the court, while striking out the pleading, will not dismiss
the action but give the plaintiff leave to amend.”
Our rule 23 (1) is silent on the point:
“Where any pleading is vague and
embarrassing or lacks averments which are necessary to sustain an
action or defence, the
opposing party may …… deliver an
exception thereto.”
Nothing is said about stay or dismissal
of the action or entry of judgment.
As a matter of general practice the
South African Courts; on the upholding of an exception, tend to
grant leave to amend to the
relevant party, whether or not it is the
opinion of the court that the amendment will pass muster for that is
not a proper enquiry
at the stage of the upholding of the exception.
[36] There will accordingly be an order
in the following terms:-
1. The exception to both claims is
upheld and the particulars of claim are set aside.
2. Those exceptions set out in the
Notice of Exception but not pursued before me are dismissed.
3. The 1st and 2nd plaintiffs are given
leave to file amended particulars of claim within 1 month of the
grant of this order.
4. 1st and 2nd plaintiffs are ordered
jointly and severally to pay the costs of the exception proceedings,
the one paying, the other
to be absolved.
EBRAHIM, J
On behalf of plaintiffs: Adv. AJT
Van Ryn SC
Instructed by: Honey Attorneys
BLOEMFONTEIN
On behalf of 1st defendant: Adv. LJ
Van Tonder SC
Instructed by:EG Cooper Majiedt Inc.
BLOEMFONTEIN