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[2011] ZAKZDHC 88
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G & C Shelf 103 (Pty) Ltd v Chemical Specialities (Pty) Ltd (5902/2008) [2011] ZAKZDHC 88 (24 August 2011)
REPORTABLE
IN THE KWAZULU-NATAL HIGH
COURT, DURBAN
REPUBLIC OF SOUTH AFRICA
CASE NO.: 5902/2008
In the matter between:
G & C SHELF 103
(PTY) LTD
...........................................................................
PLAINTIFF
and
CHEMICAL SPECIALITIES
(PTY) LTD
.........................................................
DEFENDANT
JUDGMENT
RALL AJ
[1] The plaintiff has
sued the defendant for damages for breach of contract.
[2] This is the
background to the claim and it is not in dispute:
(a) In July 2006 the
defendant bought two industrial properties (to which, together with
the improvements on them, I shall refer
jointly as the property) from
a company called Swiftprops (Pty) Ltd;
(b) On the following day
the defendant sold the properties to the plaintiff, which took
transfer of them in July 2007;
(c) In September 2006 the
parties concluded a written lease agreement in terms of which the
defendant leased the properties from
the plaintiff;
(d) On 30 August 2007,
during the subsistence of the lease agreement a fire occurred on the
property, causing damages to the plaintiff
of R9,702,876.80;
(e) At the time of the
fire the buildings on the property were insured in terms of a policy
in the name of the plaintiff;
(f) A claim was submitted
to the insurer and the plaintiff was paid out the abovementioned
amount;
(g) The plaintiff then
sued the defendant for that amount, alleging that that sum
represented the damages it had suffered as a result
of the
defendant’s breach of the lease agreement.
[3] The plaintiff
alleges that the defendant breached clauses 14.3, 14.4 and 14.5 of
the lease agreement. Clause 14 reads as follows:-
‘
14.1
Should the property be damaged or destroyed, (either wholly or in
part), this lease shall not be cancelled and all risks in
the
destruction (either wholly or in part) or the damage of the property
or the premises shall pass to the lessee on the commencement
date,
save for negligent or wilful act (sic) or omissions of the lessor,
its agents or employees acting in the course of their
employment
.
14.2.
In particular and without limiting the generality of the foregoing,
all risks and damage to the property and the premises
causes (sic) by
mining under or in the vicinity of the property and civil unrest
shall during the currency of the lease, be the
sole risk of the
lessee and any damage to the property or the premises shall be made
good by the lessee.
14.3.
The lessee shall be obliged:-
14.3.1.
to insure the property and the premises against damage or loss from
any cause whatsoever including subsidence with a reputable
insurance
company and upon terms, reasonably approved by the lessor for the
full replacement value thereof as the lessor may reasonably
stipulate;
14.3.2.
to punctually pay all premiums payable on the insurance policy;
14.4. Subject to the provisions
of 14.5, should the property or the premises be destroyed (either in
whole or in part) or be damaged,
the lessee shall be obliged to
procure that the property and the building be reinstated as quickly
as possible to (sic) the circumstances,
provided that nothing in this
clause contained will detract from the obligation of the lessee to
make proper and timeous payment
of all rentals due in terms of this
agreement.
14.5.
The lessee shall ensure that the proceeds of the relevant insurance
policy, plus all interest accruing in respect thereof,
be paid to the
lessor directly by the insurer and shall be made available by the
lessor for the cost expended by the lessee for
the reinstatement of
the premises or the property as the case may be.
14.6.
The lessee shall procure that the interest of the lessor in and to
the insurance policies referred to in this clause 14 be
noted.’
[4] The plaintiff’s
particulars of claim allege that the defendant’s breaches
consisted of the following:-
‘
[8]
The Defendant has breached the Lease Agreement, by failing timeously
or at all:
(a)
to make good the damage to the property;
(b)
to procure that the property was reinstated;
(c)
to insure against damage or loss from any cause whatsoever for the
full replacement value thereof, or at all;
(d)
to ensure that the proceeds of the relevant insurance policy that it
ought to have obtained (plus all interest that ought to
have accrued
in respect thereof) was paid to the Plaintiff directly by the insurer
to enable the Plaintiff to make available those
proceeds for the cost
that ought to have been expended by the Defendant for the
reinstatement of the property.’
[5] The particulars of
claim also allege that the Plaintiff suffered damages in the
following way:
‘
[9]
The Defendant caused the Plaintiff damages in the sum of
R9,702,876.80 by its said breaches, which represents the amount:
(a)
of the fair, reasonable and necessary costs of:
(i)
making good the said damage;
reinstating
the property as quickly as possible.
(b)
that would have been obtained as the proceeds of the said insurance
policy that ought to have been obtained by the Defendant
and which
ought to have been paid to the Plaintiff directly by the insurer, and
made available for the cost expended for the reinstatement
of the
property;
(c)
necessary to place the Plaintiff in the position it would have
occupied had the Defendant fulfilled its obligations under the
Lease
Agreement;
(d)
which flowed directly and naturally from the Defendant’s said
breach alternatively, the amount that was within the contemplation
of
the Plaintiff and the Defendant at the time of the conclusion of the
Lease Agreement
.
’
[6] From the defendant’s
plea it is not clear what the basis of its defence is. Whilst it
denies the allegations in paragraph
8 of the particulars of claim, it
does not make it clear what the basis of the denial is. One of the
allegations is that the defendant
failed to insure the premises. The
defendant does not allege that it in fact insured the premises.
Instead it alleges that:-
(a) In terms of clause 21.8.2 of the lease agreement the operating
costs included insurance in respect of the property;
(b) In terms of clause
10.1 of the lease agreement the defendant was obliged to pay the
operating costs;
(c) At the time of the
fire an insurance policy was in place in terms of which the insurer
was Regent Insurance Company Limited,
the plaintiff was the insured
and the leased premises were insured;
(d) The defendant paid
the premiums in terms of the policy;
(e) The plaintiff was
fully compensated for the damages to the property by the insurer in
terms of the above policy.
[7] However, in reply to
a request for further particulars, the defendant alleged that it had
caused the property to be insured
in terms of clause 14.3.1 of the
lease agreement. The defendant also stated that at the time of the
fire, no other insurance policy
in respect of the premises was in
existence.
[8] The defendant denied
the allegations in paragraph 9 of the particulars of claim on the
basis that the plaintiff had been fully
compensated in terms of the
insurance policy referred to above.
[9] The plaintiff did not
replicate. However, in response to a request for further particulars,
it admitted that it had received
the sum of R9,702,876.80 as the
proceeds of the insurance policy and that the cost of the repairs to
the property had been paid
out of those proceeds. The plaintiff
alleged however that the fact that it had received the proceeds of
the insurance policy was
res inter alios acta
.
[10] In response to a
request for further particulars in terms of rule 37 the plaintiff
revealed its attitude to the payment by
the defendant of the
insurance premiums. It admitted payment but alleged that the payments
were made in terms of clauses 2.1.8.2,
2.1.8.12 and 10.1 of the lease
agreement as part of the operational expenses (as opposed to the
defendant’s averment that
the payments were made in terms of
clause 14.3.1). The plaintiff pleaded that the payments were
accordingly made by and on behalf
of the plaintiff.
[11] The plaintiff
formally admitted that:
(a) fire cover over the premises in terms of the policy commenced in
December 2001, with Shiftprops as the insured;
(b) the cover was
obtained by the defendant, represented by its insurance broker, Deon
Schoeman and Associates;
(c) with effect from 1
January 2007 the insured in terms of the policy included the
plaintiff;
(d) the claim form
submitted after the fire, was apparently signed by a representative
of the defendant, on behalf of the plaintiff.
[12]
The terms of the lease agreement are not in dispute. However, the
defendant’s breach and the damages flowing from it
are. The
plaintiff is required to allege and prove the breach
1
and the damages allegedly
suffered by it
2
.
[13] On the first
issue, the alleged breach, it is necessary for me to decide what was
required of the defendant in terms of the
lease agreement, and
whether the plaintiff has proved that the defendant did not fulfil
its contractual obligations. The onus on
the plaintiff on the issue
encompasses proving that the defendant did not ‘insure the
property’ and did not insure
the property in the way required
by the lease agreement.
[14] However, there is an
additional factor relevant in this case. The lease agreement does not
state by when the defendant was
required to perform its obligations
in terms of clauses 14.3 to 14.5. This gives rise to the question
whether it was necessary
for the plaintiff to put the defendant
in
mora
before it could be said that the defendant was in breach of
its obligations.
Interpellatio
was not raised at all in the
pleadings, was not dealt with during argument and was raised for the
first time by me after I had
reserved judgment. Counsel submitted
supplementary heads of argument on the issue.
[15] Before deciding
whether the plaintiff has proved that the defendant did not do what
was required of it in terms of the agreement,
it is necessary to
decide whether
interpellatio
was necessary in this case.
[16] Counsel for the
plaintiff, Mr Harpur S.C. argued firstly that it was for the
defendant to plead the plaintiff’s failure
to give notice, and
secondly that the plaintiff had in any event given such notice. It is
convenient to dispose of the latter argument
first. The notice relied
on by counsel was the letter of demand which preceded the institution
of the action. This was plainly
not a notice calling upon the
defendant to perform its contractual obligations. It was a demand to
pay the damages which the plaintiff
alleged it had suffered as a
result of the defendant’s breach of the agreement.
[17] As already
mentioned, it is incumbent on a party relying on a breach to allege
that the breach has taken place. There is authority
to the effect
that a party claiming interest must plead the cause of action on
which interest is claimed, which involves, in cases
where there has
been no express or implied stipulation for interest, pleading that
the other party has been placed in
mora
. By parity of
reasoning, it would follow that where a party relies on a breach
where prior demand was necessary, it is necessary
for that party to
plead that demand. I am inclined to that view. However, I shall
assume in favour of the plaintiff that all that
was required for it
to plead was the fact of the breach, carrying as it does the implied
averment that the defaulting party was
place
in mora
by
notice. I shall accordingly assume that paragraph 8 of plaintiff’s
particulars of claim is sufficiently wide for the plaintiff
to rely
on a breach of clauses 14.3 to 14.5 of the agreement, if
interpellatio
was necessary.
[18]
I agree with Mr Harpur that the defendant’s primary obligation
in terms of clause 14 of the lease agreement was to reinstate
the
property and the buildings as quickly as possible. Clause 14’s
purpose is to cater for the eventuality that the property
or the
premises be destroyed in whole or in part or be damaged. It then goes
on to place various obligations on the defendant,
all of which are
aimed at ensuring that the property is reinstated and hence that the
plaintiff suffers no damages. The obligation
to insure is aimed at
providing a funding mechanism for the primary or principal obligation
and the obligation to pay over the
proceeds is a mechanism designed
to ensure that the proceeds are used for their intended purpose.
[19] The first obligation
imposed on the defendant by the clause is to insure the property. The
second is to reinstate it and the
third is to ensure payment of the
proceeds of the insurance policy to the plaintiff. Chronologically
the obligation to insure would
be the first, the obligation to ensure
payment of the proceeds the second and the obligation to reinstate
the third. I say this
in respect of the last two obligations because
reinstatement would probably only occur once the insurance proceeds
become available.
[20] The obligation to
reinstate is the primary obligation firstly in the sense that if it
is met, the other two become irrelevant.
If the defendant reinstates
the property, then the plaintiff suffers no damages and so a breach
of either of the other two obligations
does not cause any damages to
the Plaintiff.
[21] Secondly, it is only
a breach of that obligation which can give rise to a damages claim by
the plaintiff. Clause 14 does not
contemplate reinstatement by the
lessor, but by the lessee, and the obligation to insure is merely to
ensure that funds are available
to pay for reinstatement. The
obligation to pay the insurance proceeds to the plaintiff is merely a
mechanism to ensure that the
proceeds are available for and are used
only for their intended purpose. The failure to insure or to pay over
the proceeds could
therefore not result in the plaintiff suffering
damages because even if the obligations were met, the plaintiff would
be in no
better position financially. This is because of the
obligation placed on the plaintiff by clause 14.5 to pay the proceeds
back
to the defendant. It would have been different had the agreement
provided that the insurance proceeds were to be paid to and also
retained by the plaintiff.
[22] It does not follow
that if the obligation to reinstate is breached, the plaintiff will
necessarily suffer damages. It will
not do so if the defendant
compensates the plaintiff for the cost of reinstatement.
[23] As already
mentioned, the lease agreement does not stipulate a time by which the
defendant is obliged to reinstate the property.
Instead clause 14.4
obliges the defendant to do so ‘as quickly as possible to (sic)
the circumstances’. From this clause
it is also clear that the
parties did not contemplate immediate performance of this obligation,
which would in any event have been
impossible.
[24]
The legal position was summarized as follows by Trengove J (as he
then was) in the well known case of
Alfred
McAlpine and Son v Transvaal Provincial Administration
3
:
‘
In
the light of the authorities referred to above, I have come to the
conclusion that, in our law, the general principle is that,
in the
case of a contract in which no time for performance has been fixed,
the debtor must be placed
in
mora
by
interpellatio
before
damages can be claimed on the grounds of such debtor's non-timeous
performance. A mere failure to perform or mere non-performance
in the
absence of a fixed time for a performance, although it may constitute
a ground for a defence of
exceptio
non adimpleti contractus
,
cannot give rise to a claim for damages because it can never be a
breach.’
[25]
In my view the principles laid down in that case are applicable to
the present one, and I accordingly find that it was incumbent
on the
plaintiff to have placed the defendant
in mora
before it could claim damages for breach of the lease
agreement.
[28]
Because the party relying on a breach is required to allege and prove
the breach, it follows that the opposing party need only
deny the
breach, even in cases where
interpellatio
is necessary. In my view therefore it was not required
of the defendant to plead absence of
interpellatio
.
[29] The only demand
which Mr Harpur could point to was the one already mentioned. This he
was constrained to rely on because the
only witness called by the
plaintiff, the claims manager of Regent Insurance, did not touch on
the matter, the defendant closed
its case without calling any
witnesses, and none of the other documents handed in as exhibits
assisted the plaintiff.
[30] I find therefore
that the plaintiff failed to prove that the defendant breached clause
14.4 of the lease agreement. In the
light of my finding that of the
breaches relied on by the plaintiff, only a breach of clause 14.4
could have resulted in any damages,
it follows that the plaintiff
cannot succeed with its claim against the defendant.
[31]
In addition to denying any breach of the agreement, the defendant
alleged that it had in fact complied with clauses 14.3 and
14.5. This
it alleges was done by securing the insurance with Regent and the
fact that the proceeds were paid to the plaintiff.
As a result the
defendant alleges that the plaintiff suffered no damages. This
defence,
if valid,
would be a
complete defence to the plaintiff’s claim even if the defendant
did in fact breach clause 14.4 by failing to reinstate
the property.
[32] A curious feature of
this case is that there is no express allegation in the pleadings as
to who had caused the property to
be reinstated and there was no
evidence on this issue. The plaintiff alleged that the defendant had
failed to do so, which allegation
the defendant denied. However, from
the further particulars, one can infer that it was the plaintiff who
had caused the property
to be reinstated, utilizing the proceeds of
the insurance policy.
[33]
The closest the only witness came to dealing with the matter was a
statement he made in cross-examination. He was asked who
had
instructed the contractor to reinstate the property, to which he
replied that he assumed that it was the plaintiff. This statement
went unchallenged by counsel for the defendant,
Mr
Salmon S.C. Amongst the documents put up as exhibits were ones
proving that the plaintiff had offered to accept payment of R9
702
876,80 in full and final settlement of the claim made or the policy
and that amount had been paid to the plaintiff by Regent.
However, at
the trial the matter was approached by both parties on the basis that
the plaintiff had caused the property to be reinstated
and I shall do
likewise.
[34] As I have mentioned,
the plaintiff called only one witness, the claims manager of the
insurer Regent Insurance. He shed no
light on the circumstances under
which the insurance policy came into existence. The defendant closed
its case without calling
any witnesses. However, a bundle of
documents was handed in as part of the record by consent. The parties
agreed the following
at the pre-trial conference in relation to the
discovered documents (which included the trial bundle):
‘
(i)
copies of documents may be used instead of originals;
(ii)
the documents are what they purport to be;
(iii)
there is no admission that what is contained in the documents is
true;
(iv)
correspondence is admitted to have been sent by the addressor and
received by the addressee on or about the date reflected
on such
correspondence;
(v)
notwithstanding the aforegoing the status of any particular document
or documents may be challenged by either party by not later
than ten
court days before the trial and thereafter by agreement between the
parties or failing that, with the leave of the court
on good cause
shown.’
I was not made aware of
any challenges to the status of the documents in the bundle.
[35] The defendant relied
on a number of documents in the trial bundle to show that the
defendant was responsible for ensuring that
the property was insured
as required by clause 14.3.1 of the lease agreement. The plaintiff
did not rely on any documents. From
the documents relied on by the
defendant it is not clear precisely how it came about that the
plaintiff was substituted as one
of the insured in terms of the
policy. All that is clear is that the broker, Deon Schoeman and
Associates, arranged for this change
and for the premiums to be paid
by debit order by the defendant. It is not clear on whose behalf the
broker were acting in doing
this. It is apparent that the defendant
co-operated at least in relation to signing the debit order
authorization. Which of the
parties instructed the brokers to make
the changes is not clear.
[36] On the evidence
before me I am unable to find that it was not the defendant who
ensured that the plaintiff became one of the
insured in terms of the
policy. I must accept therefore in favour of the defendant it was
responsible for doing this.
[37]
In case I am wrong about whether breaches of clauses 14.3 and 14.5
could have caused the plaintiff to suffer damages, it is
necessary to
decide whether the defendant breached those clauses. Once again, this
question turns firstly on whether notice was
required before the
defendant was
in
mora
.
Once again, there is no allegation of
interpellatio
and no evidence thereof.
[38]
However, was
interpellatio
necessary? Neither clause
prescribes a time for performance. Mr Salmon fairly conceded that if
clause 14.3.1 simply stated that
the defendant was required to insure
the property against the mentioned risks, the obligation would have
arisen on the assumption
of all risks in the damage or destruction of
the property, namely the commencement date of the lease. This
concession is in accordance
with the principle that time for
performance need not be expressly provided for, but may be stipulated
by necessary implication
4
.
[39]
However, Mr Salmon argued that certain of the provisions of clause
14.3 and clause 16.1.2 have the effect that demand was necessary
to
place the defendant
in
mora
.
Firstly, clause 14.3.1 provides that the terms of the insurance have
to be approved by the plaintiff and that the plaintiff is
entitled to
stipulate the replacement value. These provisions make it clear that
the plaintiff had to be involved in insuring the
property and so the
defendant could not do so unilaterally. It follows that the defendant
was not required to have effected the
insurance by the commencement
date of the lease. The plaintiff’s involvement was first
required. Accordingly, no fixed time
for performance of the
obligation was stipulated, either expressly or by implication, and so
demand was necessary.
[40] Secondly, Mr Salmon
relied on clause 14.3.3. However in my view this clause does not
assist him because it deals with proving
that insurance was effected
and not the act of effecting it.
[41] Mr Salmon also
relied on clause 16.1.2 of the agreement. Clause 16 is headed
“BREACH” but deals not only with breaches
of the
agreement but also matters such as offers of compromise, judgment
being taken against the defendant and the insolvency of
the
defendant. It then goes on to provide what the consequences of these
events are. The provisions of clause 16 which deal with
breaches and
their consequences read as follows:-
“
16.
Breach
16.1.
Should the lessee-
16.1.1.
fail to pay any amount due by the lessee in terms of this lease
within 7 (seven) days after the receipt of a written notice
to do so
by the lessor; or
16.1.2.
commit any material breach of any other provision of this lease and
fail to remedy such breach within 7 (seven) days after
the receipt of
notice to that effect by the lessor (provided that, should that
breach be one which is not reasonably capable of
being remedied
within the said 7 (seven) days, then the lessee shall be allowed such
additional period as is reasonably required
therefore to remedy such
breach. Notwithstanding the above, the lessee shall be allowed 30
(thirty) days to remedy the breach contemplated
in 16.1.6.
16.1.8. or be placed under
provisional or final liquidation or under judicial management then
and in any such events the lessor
shall be entitled –
16.1.8.1.
to sue for immediate specific performance of the lessee’s
obligation under the lease; or
16.1.6.2.
to forthwith cancel the lease, subject to the provisions set out
below, provided that the lessor shall not be entitled
to cancel this
lease if the breach is capable of being rectified by the payment of
money”
[42] It is immediately
apparent that clauses 16.1.8 and 16.1.8.2 have been incorrectly
numbered because they qualify the whole of
the clause and that the
words after ‘judicial management’ in clause 16.1.8 should
not form part of that sub-paragraph
but be part of the words
qualifying the whole of the clause.
[43]
It is clear that in terms of clause 16.1.2 the plaintiff was only
entitled to cancel the agreement or claim specific performance
after
it had given the required notice to the defendant. The clause does
not provide that before damages could be claimed for an
alleged
breach, notice in terms of the clause had to be given. However, in my
view the effect of the clause is to provide for placing
the defendant
in mora
,
irrespective of whether the
mora
leads to cancellation. It
is what was described in
Kabinet
Van SWA v Supervision Food Services
5
as an ‘
in-mora
kennisgewing’.
[44] Clause 14.1.5 also
does not stipulate a time for performance. The same considerations
apply to this clause as to clause 14.1.4.
[45] I accordingly
conclude that even if a breach of clauses 14.1.3 and 14.1.5 could
have caused the plaintiff any damages, the
plaintiff has not proved
that these clauses were breached.
[46]
If this conclusion is wrong, the next question is whether the
substitution of the plaintiff as the insured in terms of the
policy,
which, as I have said, I assume was as a result of the efforts of the
defendant,
constituted
compliance with the defendant’s obligations in terms of clause
14.3. I agree with Mr Harpur that what was contemplated
by that
clause was a policy in the name of the defendant. What the defendant
was therefore not in compliance with its obligations.
It did however
pay the insurance premiums.
[47] In my view the
policy which the defendant caused to come into existence exceeded
what was required of it. The policy was in
the plaintiff’s
name, making it even more certain that the plaintiff would receive
the proceeds and hence that clause 14.5
was complied with.
[48] I do not agree with
Mr Harpur’s argument that the premiums paid by the defendant
were paid in discharge of its obligations
in terms of clauses
2.1.8.2, 2.1.8.12 and 10.1 of the lease agreement. Clause 10.1 makes
it clear that the plaintiff was not obliged
to expend any money
whatsoever on the premises and that the defendant was obliged to pay
the so-called operating costs. Clause
2 is the definition clause and
in clause 2.1.8 operating costs are defined. The definition is
extremely wide, covering every conceivable
cost which could be
incurred in respect of industrial or commercial premises. It is so
wide that there is repetition. Clause 2.1.8.2
includes ‘insurance
in respect of the property’ and clause 2.1.87.12 ‘provisions
payable for public liability
and property damage insurance’. In
my view the purpose of clause 10.1 and the wide definition of
‘operating costs’
is to make it clear that the defendant
and not the plaintiff must bear all the costs associated with the
premises during the currency
of the lease. It is a general provision
and does not deal with the detail of how the individual operating
costs are to be paid.
In the case of insurance, the only clause which
deals with specifics in clause 14. I do not agree that the agreement
contemplated
two insurance policies, one in the name of the plaintiff
in terms of clause 10.1 and one in the name of the defendant in terms
of clause 14. Whilst I agree that that was legally possible, with
each party insuring its own interest, the agreement does not
expressly provide for it and it does not make commercial sense. If
for no other reason it would have been a pointless waste of money.
[49]
The proceeds were in fact paid to the plaintiff, and it is common
cause that these were sufficient to pay for the cost of
reinstatement. Accordingly even if the defendant did not comply with
its obligations in terms of clause 14.3, the plaintiff suffered
no
damages unless the payment was
res
inter alios acta
.
[50]
However, I agree with Mr Salmon that the payment by the insurer to
the plaintiff was not
res
inter alios acta
in
relation to the defendant. The rule is based on equity, fairness and
the interests of society
6
.
As was stated in
Standard
General Insurance v Dugmore NO
1997
(1) SA 33
(A) at 42A:
‘
Boberg
J (The Law of Delict vol 1 at 479) succinctly states:
'The
existence of the collateral source rule can therefore not be doubted;
to what benefits it applies is determined casuistically:
where the
rule itself is without logical foundation, it cannot be expected of
logic to circumscribe its ambit.'
It
now seems to be generally accepted that there is no single test to
determine which benefits are collateral and which are deductible.
Both in our country (Santam Versekeringsmaatskappy Bpk v Byleveldt
(supra at 150F)) and in England (Parry v Cleaver
[1969] 1 All ER 555
(HL) ([1970] AC 1) at 14 and 31) it is acknowledged that policy
considerations of fairness ultimately play a determinative role.
Perceptions
of fairness may differ from country to country and from time to time;
the task of Courts is to articulate the contemporary
perceptions of
fairness in their respective areas of jurisdiction.’
[51]
Although there is no single test to determine which benefits are
collateral, it has been stated by the Supreme Court of Appeal
(in
Santam
v Byleveldt
7
)
that:-
‘
The
cross-appeal raises an interesting issue relating to the 'collateral
source rule', i.e., the rule that generally any compensation
for
bodily injuries that the injured party receives from a collateral
source, wholly independent of the wrongdoer or his insurer,
does not
operate to reduce the damages recoverable by him.’
[52]
In this case the defendant caused the plaintiff to be insured, it did
so in discharge of its obligations in terms of a contract
between the
parties, the defendant paid the premiums and once again this was done
in terms of its contractual obligations to the
plaintiff. It can
accordingly not be said that the plaintiff’s entitlement to the
compensation in terms of the policy were,
in the words of Lord
Parmoor in
Hill
and Sons v E Stowell and Sons
8
:
‘ …
a
contract or work wholly independent of the relations created between
the plaintiff and the defendant by the particular contract,
any
profit from such contract or work cannot be pleaded in mitigation of
damages.
'
[53]
In
Zysset
v Santam
9
,
Scott J (as he then was) dealt with collateral benefits in the
context of a delictual claim. The learned judge stated
10
that
the inquiry into collateral benefits involves considerations of
public policy, reasonableness and justice, and that it involves
a
weighing up of mainly two conflicting considerations. The first is
that a plaintiff should not receive double compensation and
the
second is that a wrongdoer should not be relieved of a liability
because of some fortuitous event. In my view these considerations
apply to cases such as the present one, where instead of a delictual
wrongdoer one is dealing with a defendant in breach of contract.
[54] I
accordingly find that even if the plaintiff proved that the defendant
was
in mora
in respect of its obligations in terms of clause
14 of the lease agreement, the plaintiff suffered no damages as a
result of the
defendant’s breach.
[55] It follows therefore
that the plaintiff’s claim falls to be dismissed.
[56] I see no reason why
the costs should not follow the results and indeed none was suggested
to me.
[57] I therefore make the
following order:
The plaintiff’s
claim is dismissed with costs.
_________________
RALL AJ
DATE OF ARGUMENT: 26 May
2011
DATE OF JUDGMENT: 24
August 2011
APPEARANCES:
For Plaintiff: GD Harpur
S.C.
Instructed by Dlamini Van
Onselen O’Connell
For Defendant: RJ Salmon
S.C.
Instructed by Garlicke &
Bousfield Inc.
G&C
Shelf v Chemical Specialities, Judgment 22.6.11
1
Kriegler
v Minitzer
1949 (4) SA 821
(A) at 827; Resisto Dairy v Auto
Protection Insurance
1963 (1) SA 632
(A) at 644 H; WD Russell v
Witwatersrand Gold Mining Co
1981 (2) SA 216
(T) at 218 H
2
Dominion
Earthworks v MJ Greef Electrical
1970 (1) SA 228
(A) at 235
3
1977
(4) SA 310
(T) at 348 D – F
4
Louw
v Trust Administrators
1971 (1) SA 896
(W) at 903 a
5
1989
(1) SA 967
(SWA) at 972 A
6
Botha
v Rondalia Versekeringskorporasie
1978 (1) SA 996
(T) at 1000C
7
1973
(2) SA 146
(A) at 168 E-F
8
87
LJR 1160
at 1115, citedwith approval in Hunter v Shapiro
1955 (3) SA
28
(D) at 30 G – H. See also Thornton v Thomson
2002 (5) SA
541
(W) at 546 F – 574 D
9
1996
(1) SA 273(C)
10
At
279 A - C