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1987
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[1987] ZASCA 9
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LTA Constuction Ltd. v Beyers Enterprises (463/85) [1987] ZASCA 9 (13 March 1987)
CASE NO. 463/85
/CCC
IN THE SUPREME COURT OF SOUTH
AFRICA
(APPELLATE DIVISION)
In the matter between
LTA CONSTRUCTION
LIMITED
APPELLANT
and
BEYERS
ENTERPRISES
RESPONDENT
CORAM
: RABIE ACJ, JANSEN, VILJOEN, NESTADT JJA et BOSHOFF AJA
HEARD
: 17 FEBRUARY 1987
DELIVERED
: 13 MARCH 1987
JUDGMENT
NESTADT JA
/
2 .
NESTADT, JA
:
1 have, regretfully, come to a different conclusion, viz., that the appeal
ought to succeed. In my opinion the trial court should,
for the brief reasons
which follow, have refused the appli-cation for absolution.
The facts and
relevant principles of law are fully set out in the judgment of Boshoff AJA. It
is necessary for me merely to stress
those which I consider of particular
importance to the view I take.
The issue was, of course, whether at the end
of plaintiff's case there was,
prima facie
, evidence on which one or
other of the two repudiations relied on
could/
3. could or might be found. Unless it was clear that the answer
was no, plaintiff's claim should not have been dismissed; defendant
should
rather have been left to deal with plaintiff's evidence or close its case
without doing so.
In what follows I confine myself to the repudiation which
it is alleged took place on 17 October 1983. Vos's evidence, whilst not
always
consis-tent, lends itself to a finding that, on this date, defen-dant did not
simply query what would happen if it breached
its obligations but notified him
that, because of certain "cash-flow" problems it was experiencing, it "could not
continue with the
contract" and "would have to go into
default"/
4. default" (unless plaintiff came to its (financial)
assis-
tance in the respects set out in the judgment of my Brother).
In my view, this statement consti-
tuted or was capable of constituting a
repudiation of the
contract. It went or can be construed as going beyond
a
mere threat to (possibly) default. It ostensibly amounted
to a
deliberate, serious and unambiguous declaration by
defendant that it was
unable to perform, i e, that it was
not in a position to continue with and
complete the contract.
It is clear that an assertion of this kind is or can be an
(anticipatory) renudiation. The following remarks of
Devlin J in
Universal Cargo Carriers Corporation vs Citati
1957(2) Q B 401 at 437 - 8 are apposite in this regard:
"Since/
5.
"Since a man must be both ready and willing to perform, a
profession by words or conduct of inability is by itself enough to constitute
renunciation. But unwillingness and inability are often difficult to
disentangle, and it is rare-ly necessary to make the attempt.
In-ability often
lies at the root of un-willingness to perform. Willingness in this context does
not mean cheerfulness; it means
simply an intent to perform. To say: 'I would
like to but I cannot' negatives intent just as much as 'I will not.' ... If a
man says
'I cannot perform', he renounces his contract by that state-ment, and
the cause of the inability is immaterial."
(See, too, Christie:
The Law of Contract in South Africa
,
501; De
Wet and Yeats:
Kontraktereg en Handelsreg
,
4th ed., 154; Joubert's LAWSA, vol 5, para 225
and, in particular, Kerr:
The Principles of the Law
of
Contract,
3rd ed., 333 seq).
In
plaintiff's letter of 24 October 1983 it is alleged that defendant "wish(ed) to
go into default". This was not so. Defendant hoped
the
contract/
6.
contract would continue. Thus Vos said: "If I re-
collect,
they said they would prefer if we could sal-vage the situation". However, it
matters not that there be no intention or subjective
desire on the part of the
defaulting party to terminate the contract (
Van Rooyen vs Minister van
Openbare Werke en Gemeenskapsbou
1978(2) S A 835(A) at 845 fin - 846 A;
Universal Cargo Carriers Corporation vs Citati
(
supra
)). In the
last-mentioned case the approach was stated (at 436) to be
the following:
"The test of whether an intention is sufficiently evinced by conduct is
whether the party renunciating has acted in such a way as
to lead a reasonable
person to the conclusion that he does not intend to fulfil his part of the
contract."
Jansen JA in
Tuckers Land and Development Corporation
(Pty) Ltd v Hovis
1980(1) S A G47(A) at 653 D - E,
approved/
7. approved of this dictum by describing
it as "both practical and fair". In other words, a type of objective test is
applied (LAWSA,
para.225). Nor, so it seems to me, does the request for
plaintiff's help that accompanied defendant's statement detract from its
aforementioned con-sequences. Vos acceded under cross-examination to the
suggestion that it was "a serious one". But defendant had
no contractual right
to any indulgence from plaintiff; there was no obligation on plaintiff to grant
the request; plaintiff would
have been entitled forthwith to refuse it and, in
the result (if the views expressed above be correct), then and there to cancel
the contract.
This, however, did not happen. It was only in terms of its
letter dated 24 October 1983 that
plaintiff/
8. plaintiff purported to accept defendant's repudiation.
The factual allegations contained in this letter do not, as already
indicated, fully accord with Vos's evidence as to the events of
17 October 1983.
This, however, bears on his credibility; it is not a matter of moment at the
pre-sent stage of the proceédings.
What has to be considered is whether
plaintiff's reaction, before 24 October 1983, to defendant's repudiation and the
latter's conduct
in the interval, precluded plaintiff's subsequent decision to
rescind the contract. Vos testified that on 17 October 1983 he undertook
to
enquire of his superiors whether "we could assist them in any way as requested"
and to report back to defendant. At the same time,
he told defendant that,
as far as securing plaintiff's agreement to the supply of diesel was
concerned, he anticipated no "difficulty"
or/
9.
or "problem"; indeed he, at the meeting, consented to
defendant immediately using diesel from plaintiff's tanks. There is some
uncertainty
as to whether defendant, in the days following, took advantage of
this offer but what did happen was that it continued work-ing at
the site "for a
few days" and even (possibly) until 24 or 25 October 1983 (on which date Mr van
Rooyen was still on site).
In my respectful opinion,none of the circumstances referred to in the
preceding paragraph rendered plaintiff's cancellation of the
contract on 24
October 1983 unjustified. Defendant's continued performance of (some of) its
obligations after 17 October 1983 cannot,
on/
10. on Vos's evidence, be regarded as a retraction of its previous
repudiation. It is reconcilable with defendant, on a temporary
basis, preserving
the
status quo
pending plaintiff's decision as to how, if at all,
defendant's quandary was to be resolved. Though plaintiff's initial stance
during
the conversation that took place on 17 October 1983, was that "plaintiff
would not or could not release them (
sic
,defendant) from the contract"
this was not its final attitude at the meeting. The latter was, in effect, that
plaintiff would consider
assisting defendant. But plaintiff did not commit
itself to assisting defendant. Nor is there any warrant for necessarily
inferring
from Vos's preparedness to do so
that/
11.
that he did not consider what defendant had told
him to be a repudiation or that plaintiff thereby waived its right to cancel. In
principle, the desire of contrac-ting parties to avoid a threatened repudiation
by the one and, following upon negotiations between
them, their attempting to
obviate this occurring, does not, where no mutually acceptable solution is
found,
per se
preclude the other from cancelling the contract (see in
support hereof, Kerr, 343). And, contrary to what the trial court found,
Vos did
revert to defendant. On a date which he could not specify but which he said was
before 24 October 1983 he ''suggested to
Mr van Rooyen that we employ him and I
said that was the only solution we could come up with". A tenable construction
of this communication
is,/
12.
is, to put it at its lowest, that defendant's request for
assistance was thereby refused. The employment of defendant would have been
inconsistent with the maintenance of the original contract between the parties.
The fact that defendant was to let plaintiff know
what its attitude to the
"solution" was, makes it surprising that plaintiff, without further ado, wrote
its letter of 24 October
1983. There was, however, no legal obligation on
plaintiff to have waited to hear from defendant before doing so.
In the
result, though plaintiff's election whether or not to cancel the contract was,
after 17 October 1983, delayed, its eventual
decision on 24
October/
13. October 1983 to do so was nonetheless,
prima facie
,
a legitimate one. I should add that it was neither pleaded nor argued on behalf
of defendant that plaintiff's sub-sequent invitation
to defendant to resume the
contract was a bar to its previous cancellation.
The plaintiff may not have
established a clear case but it was, in my view, sufficient to ward off an
application for absolution.
This being a minority judgment it is unnecessary to
deal with whether, in the event of the appeal succeeding, the withdrawal of
de-fendant's
counter-claim in the court below was unconditional and therefore
should stand and whether the costs of appeal should include the
costs of two
counsel.
NESTADT, JA