About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2019
>>
[2019] ZASCA 16
|
|
Africa Charter Airline CC v AviSys CC and Others (421/2018) [2019] ZASCA 16 (22 March 2019)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 421/2018
In
the matter between:
AFRICA
CHARTER AIRLINE
CC
APPELLANT
and
AVISYS AVIATION
SYSTEMS
CC
RESPONDENT
Neutral
citation:
Africa
Charter Airline v AviSys
(421/2018)
[2019] ZASCA 16
(22
March 2019)
Coram:
Lewis
ADP and Saldulker, Van der Merwe and Makgoka JJA and Davis AJA
Heard:
25
February 2019
Delivered:
22
March 2019
Summary:
Aviation
– interpretation of aircraft maintenance manual –
overhaul of main landing gear of aircraft – language,
purpose
and context of manual indicate obligation to remove cadmium plating –
appeal upheld.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Johannesburg (Matojane J sitting as court
of first instance):
1 The appeal is upheld
with costs.
2 The order of the court
a quo is set aside and replaced with the following:
‘
(a)
Judgment is granted against the defendant for payment of the amount
of R460 000, interest thereon calculated at the prescribed
rate
a
tempore morae
and costs.
(b) Claim B is dismissed.
(c)
The counterclaim is dismissed with costs.’
JUDGMENT
Van
der Merwe JA (
Lewis
ADP and Saldulker and Makgoka JJA and Davis AJA
concurring)
[1]
The appellant, Africa Charter Airline CC, conducts an aircraft
charter business. The respondent, AviSys Aviation Systems CC,
services, repairs and overhauls aircraft components. During November
2011, the appellant requested the respondent to provide a
quotation
for the overhaul of the major components of the main landing gear of
a Boeing 737 aircraft belonging to the appellant
(the components).
The respondent quoted the amount of R550 000 for the work. The
appellant accepted the quotation and pursuant
thereto, the components
were delivered to the respondent. During December 2011, the
respondent returned them to the appellant,
claiming that it had
properly completed the overhaul. By that time, the appellant had, at
the request of the respondent, paid the
amount of R460 000 in respect
of the overhaul to a subcontractor of the respondent.
[2]
The main landing gear of a Boeing 737 aircraft is made of
high-strength steel. A layer of cadmium, a soft metal, is
electroplated
onto the steel in order to protect it from corrosion.
The cadmium plating is coated with an epoxy primer, followed by a
finishing
coat of enamel paint. It is common cause that the
respondent did not remove the cadmium plating from the components
during the
overhaul thereof. This was the source of the dispute
between the parties.
[3]
The appellant maintained that the respondent was contractually
obliged to remove (and re-apply) the cadmium plating during the
overhaul. It contended that the respondent’s failure to do so
constituted a material breach that entitled it to cancel the
agreement. It accordingly sued the respondent in the Gauteng Division
of the High Court, Johannesburg for repayment of the amount
of R460
000 paid to the respondent (claim A) and for consequential damages
consisting of alleged loss of profit, in the amount
of US$648 000
(claim B). The respondent denied that it was obliged to remove
the cadmium plating. It consequently counterclaimed
for payment of
the outstanding balance of R90 000.
[4]
The matter went to trial before Mayat J. Certain issues pertaining to
claim B stood over for later determination, an aspect
to which I
shall return. Mayat J heard the evidence but sadly passed away before
judgment could be given. By agreement between
the parties and with
the approval of the Deputy Judge President, the pleadings and a
transcript of the evidence were placed before
Matojane J. He heard
argument and found for the respondent. He therefore allowed the
respondent’s counterclaim with costs.
Although the judgment did
not say so expressly, it must be understood as having dismissed both
claim A and claim B with costs.
Matojane J granted leave to the
appellant to appeal to this court. As I have indicated, the principal
issue in the appeal is whether
the respondent had a contractual
obligation to remove the cadmium plating during the overhaul of the
components.
[5]
It is common cause that the overhaul was subject to the provisions of
a written agreement entitled ‘Maintenance Support
Agreement’
entered into between the parties on 18 November 2011 (the maintenance
agreement). Clause 2.1 of the maintenance
agreement provided:
‘
The services
shall be performed in accordance with the Component Owner / Operator
specifications and approved Maintenance Technical
Documentation.
Major technical problems will be rectified after consultation with
the Component Owner / Operator.’
Clause
11 thereof provided,
inter alia
, as follows:
‘
Should
AviSys maintenance not comply with the regulations of the relevant
Civil Aviation Authority, this Agreement terminates forthwith.’
[6]
The regulations of the relevant Civil Aviation Authority are the
Civil Aviation Regulations published by Government Notice R1219
of 20
September 1977. Regulation 43.02.3 provides
inter alia
that
any person who carries out maintenance on an aircraft or aircraft
component shall use methods, techniques and practices which
are
prescribed in the current manufacturer’s maintenance manual and
in accordance with ‘Document SA-CATS-GMR’.
Paragraph 2(1)
of Part 43.02.5 of this document provides:
‘
Overhauls:
General
(1) Any overhaul
must be carried out in accordance with the manufacturer’s
current overhaul manuals. Mandatory Airworthiness
Directives, Service
Bulletins, Service Letters and Service Instructions must be embodied
as directed.’
[7]
The parties are in agreement that in terms of these provisions, the
overhaul of the components had to be performed in accordance
with the
Boeing Component Maintenance Manual (CMM). The CMM makes reference to
the applicable provisions of the Boeing Standard
Overhaul Practices
Manual (SOPM). Two sections of chapter 32 of the CMM are of
particular relevance and the parties placed the
then current versions
thereof before the court a quo. They are section 32-00-05 and section
32-11-11.
[8]
Section 32-00-05 is headed ‘REPAIR OF HIGH-STRENGTH STEEL
LANDING GEAR PARTS’. The section commences with the following:
‘
1
Description
And Operation
A The procedures in this subject are
for alloy steel landing gear parts heat-treated 180 ksi or above.
B The data is general. It is not about
specific parts or installations. Use this data as a guide to help you
write minimum standards.
C These procedures refer to the more
general procedures in the Standard Overhaul Practices Manual (Chapter
20), document D6-51702.
If the procedures in this subject do not
agree with those in the Standard Overhaul Practices Manual, use the
procedures in this
subject.
D These procedures start with parts
which are removed from the airplane and disassembled for overhaul,
but not yet put through shop
processes such as stress relief, finish
removal or material removal. Refer to the applicable overhaul
instructions for the details
about specific repairs or refinish for a
part. If the procedures in this subject do not agree with those in
the overhaul instructions
use the procedures in the overhaul
instructions.
E These procedures are typical for all
parts. The repair instructions for the specific part will tell you
when to use these procedures.’
It
is undisputed that the steel parts of the components fell within para
1A above. Cadmium plating is prescribed for parts heated
to 180-220
ksi (kilopounds per square inch) tensile strength and
cadmium-titanium plating for parts heated to 220-300 ksi.
[9]
This is followed by a diagrammatic flow chart setting out a sequence
of basic repair procedures. The first step prescribed by
the flow
chart is to disassemble and clean component parts. The second step is
‘REMOVE ENAMEL, PRIMER, CADMIUM PLATING OR
CADMIUM-TITANIUM
PLATING, (SOPM 20-30-02)’. SOPM 20-30-02 deals with how the
stripping of protective finishes should be done.
[10]
After prescribing a number of steps, including procedures pertaining
to analysis of surface defects found, the flow chart provides
for the
re-application of cadmium plating or cadmium-titanium plating,
depending on which is applicable. This is followed, interspersed
with
other procedures, by instructions to apply a primer and an enamel
topcoat. Predictably the last step of the flow chart is
to
re-assemble components.
[11]
Section 32-11-11 is headed ‘MAIN GEAR SHOCK STRUT ASSEMBLY’.
The left and right shock strut assemblies are the
major components of
the main landing gear. Each shock strut assembly in turn consists of
a shock strut and various subsidiary parts.
The components included
the shock struts and, although this is not very clear from the
evidence, at least the upper and lower torsion
links of both shock
strut assemblies.
[12]
This section provides step by step for detailed procedures for the
overhaul of a shock strut assembly. Section 32-11-11 contains
no
procedure pertaining to the cadmium plating on the high-strength
steel parts of the landing gear. However, under the heading
‘Reference’, section 32-11-11 makes specific reference to
section 32-00-05 and under the heading ‘General’
it
states: ‘Refer to SOPM 20-10-01 and CMM 32-00-05 for repair and
refinish of high strength steel parts’.
[13]
As I shall show, the appellant also relied on a Boeing Service Letter
dated 23 April 2002 (the service letter). The service
letter
described three instances where the fracture of main landing gear
parts had occurred. The service letter explained that
in all three
instances, corrosion pits had initiated cracks which led to the
fractures. It stated that the root cause of the corrosion
pits and
eventual fractures was that cadmium-titanium plating had not been
done according to engineering requirements, that the
plating had been
thin or non-existent and had not been completely stripped during
overhaul. In terms of the service letter, Boeing
concluded as
follows:
‘
Boeing has
concluded that gear overhaul must result in the required cadmium
thickness and post-plate chromate conversion coating.
Otherwise, the
overhaul will not meet Boeing design or overhaul requirements, and
will not provide adequate corrosion protection
for service between
scheduled gear overhauls. Therefore, complete removal and replacement
of the cadmium plating is needed to prevent
finish degradation and
accelerated corrosion in service.’
[14]
The service letter also stated that its purpose was to advise
operators: (a) that the overhaul of any high-strength steel landing
gear component should include complete stripping of cadmium; and (b)
that they should ensure that their overhaul shops or overhaul
agencies completely strip cadmium during overhaul.
[15]
The appellant put forward three alternative grounds for the
contention that the respondent was obliged to remove the cadmium
during the overhaul of the components. Firstly it said that a proper
interpretation of sections 32-00-05 and 32-11-11 of the CMM
established this obligation. Its second ground was that the service
letter had been incorporated into the maintenance agreement
and that
its terms provided for the alleged obligation. Thirdly, the appellant
relied on a tacit or implied term to this effect.
[16]
The respondent denied that an express, tacit or implied term of the
maintenance agreement had obliged it to strip the cadmium
plating. In
particular its case was that as a matter of interpretation of the
CMM, only section 32-11-11 was applicable to the
overhaul of the
components, to the exclusion of section 32-00-05. It pointed out that
it was common cause that the service letter
had not been made
available to the respondent and alleged that it had therefore not
been ‘embodied’ into the maintenance
agreement. The
respondent also took the stance that the service letter, in any
event, only made recommendations and had no binding
effect.
[17]
I therefore turn to the interpretation of sections 32-00-05 and
32-11-11 of the CMM. It is well established that this exercise
entails giving meaning to the words used within the context in which
they were used and in which the contract was concluded.
As
Lewis JA said in
Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd
[2015] ZASCA 111
;
2016 (1) SA 518
(SCA) para 28:
‘
A
court must examine all the facts – the context – in order
to determine what the parties intended. And it must do that
whether
or not the words of the contract are ambiguous or lack clarity. Words
without context mean nothing.’
The
context includes the purpose of the document. And contractual
provisions must be interpreted so as to give them a commercially
sensible meaning. See
North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd
[2013]
ZASCA 76
;
2013 (5) SA 1
(SCA) paras 24-25.
[18]
The take-off and landing of an aeroplane are potentially very
dangerous manoeuvres. Therefore, the main landing gear of an
aircraft
is a critical component thereof. Malfunctioning thereof could have
disastrous consequences. The main landing gear of a
Boeing 737
aircraft is subjected to tremendous stress. It supports the +/- 55
ton aircraft during take-off and during flight it
is subjected to
temperatures as low as minus 55°C. During landing it carries the
full weight of the aircraft and its load at
ground speeds of up to
200 km/h. This also generates high temperatures. All of this may take
place in wet conditions. For these
reasons the landing gear has to be
regularly overhauled to ensure its safe functioning. This is the
purpose of a maintenance and
overhaul manual such as the CMM. Chapter
32 of the CMM must therefore be interpreted in the context of the
need to ensure the safe
functioning of the main landing gear at all
times.
[19]
The service letter illustrated the consequences of defective cadmium
plating. And expert evidence at the trial explained that
the failure
to remove the cadmium plating during the overhaul, may lead to the
non-detection of corrosion pits or cracks caused
by the extreme
stresses that the landing gear is subjected to. Therefore, the
context provides good reasons for the removal of
the cadmium plating
during the overhaul of main landing gear components.
[20]
In my view section 32-00-05 and section 32-11-11 should be read
together. Section 32-00-05 provides for general procedures
to be
followed during the overhaul of all high-strength steel landing gear
parts. This meaning is clear from the provisions of
paras 1A, 1B, 1C
and the first sentences of paras 1D and 1E of section 32-00-05 quoted
in para 8 above. The generally prescribed
procedures are complemented
by sections containing ‘details about specific repairs or
refinish for a part’ (para 1D),
such as section 32-11-11. Only
if such specific procedures differ from the general procedures, will
the specific procedures prevail,
in terms of the last sentence of
para 1D. The last sentence of para 1E must therefore mean what it
says, namely that the specific
sections will tell the operator ‘when’
(not if) the general procedures are to be used.
[21]
There are no contradictions between sections 32-00-05 and 32-11-11 in
respect of cadmium plating. Section 32-11-11 contains
no procedures
in respect of cadmium plating of the high-strength steel parts of a
main gear shock strut assembly. Instead it refers
specifically to
section 32-00-05 in this regard.
[22]
If only section 32-11-11 was applicable, the cadmium plating had to
be ignored during the overhaul of the components. Section
32-11-11
does not even prescribe inspection of the cadmium plating, let alone
procedures to deal with visibly damaged cadmium plating.
Even though
the cadmium plating may conceal corrosion pits and cracks, the
respondent’s interpretation would have it that
nothing had to
be done in respect of the cadmium plating. This is absurd. The
appellant’s interpretation, on the other hand,
makes perfect
sense. By the time that one reaches section 32-11-11, the cadmium
plating would have been removed in terms of the
flow chart in section
32-00-05 and the steel would be exposed for proper inspection.
[23]
To summarise, the respondent’s interpretation violates the
language of these sections, does not fit into the context
and leads
to an insensible result. I find that the respondent was obliged to
remove and re-apply the cadmium plating on the components.
In the
result the respondent’s protestation that it did not include
the costs hereof in its quotation, is to no avail. It
follows that
the appellant was entitled to cancellation of the agreement and
refund of the amount of R460 000.
[24]
For these reasons the court a quo should have granted judgment for
the appellant on claim A with costs and should have dismissed
the
counterclaim with costs. It follows that it is not necessary to
consider the appellant’s aforesaid second and third grounds.
[25]
It remains to deal with claim B. The circumstances of this matter
again illustrate why careful thought should be given to the
formulation of a separation of issues under Uniform rule 33(4). The
failure to do so may cause the leading of unnecessary evidence
or the
duplication of evidence, with resultant waste of costs and scarce
judicial resources. More often than not such failure will
result in
unnecessary delay of the finalisation of the matter, contrary to the
interests of justice.
[26]
In para 25 of its particulars of claim the appellant alleged that at
the time of the conclusion of the maintenance agreement,
it was in
the contemplation of the parties that the appellant would suffer
damages in the event of breach of the maintenance agreement
by the
respondent or the failure by the respondent to render the maintenance
services to the appellant in terms thereof. (This
allegation did not,
of course, go far enough. The appellant had to allege that the
special damages that it claimed were within
the contemplation of the
parties at the time. See
Shatz
Investments (Pty) Ltd v Kalovyrnas
1976
(2) SA 545
(A).) In para 26 the appellant pleaded that as a result of
the respondent’s breach of the maintenance agreement, the
appellant
was unable to ‘. . . utilise the aircraft for its
intended commercial purposes, i.e. it was not able to hire out the
aircraft’.
Paragraph 27 set out the calculation of the alleged
damages, namely a loss of profit of US$7 200 per day for a period of
90 days.
Paragraph 29 merely stated that despite demand, the
respondent failed to make payment of this amount to the appellant.
[27]
Clause 8 of the maintenance agreement inter alia provided that the
respondent would not be liable for any consequential damages.
In an
attempt to avoid the consequences of this term, the appellant averred
five grounds upon which clause 8 was supposedly ‘.
. .
unenforceable,
contra
bones mores
and against public policy’. These grounds were contained in
para 28 of the particulars of claim. Paragraph 28.5 alleged that
‘[i]t is unconscionable that the defendant can avoid liability
in the light of all the circumstances’.
[28]
The parties agreed that paras 27, 28.5 and 29 stand over for later
determination. As a result, the court a quo was called upon
to decide
the factual issues in paras 25 and 26 of the particulars of claim,
and some of the reasons for the alleged unenforceability
of clause 8,
despite the fact that upon the postponed final determination of the
validity of clause 8 it could have been found
to preclude claim B.
This resulted in the potential of unnecessary evidence and the wholly
undesirable piecemeal determination
of the enforceability of a
contractual provision.
[29]
That these consequences did not eventuate, was fortuitous and not the
design of the parties. Claim B had to fail for the simple
reason that
the appellant did not prove para 26 of the particulars of claim. The
sole member of the appellant testified that the
main landing gear of
another aircraft had been fitted to the aeroplane in question,
allowing the latter to continue flying.
[30]
Despite the failure of claim B, the appellant is entitled to its
costs in the court a quo and on appeal.
[31]
In the result the following order is issued:
1 The appeal is upheld
with costs.
2 The order of the court
a quo is set aside and replaced with the following:
‘
(a)
Judgment is granted against the defendant for payment of the amount
of R460 000, interest thereon calculated at the prescribed
rate
a
tempore morae
and costs.
(b) Claim B is dismissed.
(c) The counterclaim is
dismissed with costs.’
________________________
C
H G van der Merwe
Judge
of Appeal
APPEARANCES
For
Appellant: P van der Berg SC
Instructed
by:
Ramsay
Webber Inc, Illovo
Webbers
Attorneys, Bloemfontein
For
Respondent: J H Möller
Instructed
by:
Möller
& Pienaar Attorneys, Pretoria
Van
der Merwe & Sorour, Bloemfontein