Esso Standard SA (Pty) Ltd v Katz)

• Jurisdiction: South Africa
• Judge: Trollip JA, Kotzé JA, Diemont JA, Viljoen JA and Van Winsen AJA
• Judgment Date: 28 March 1980
• Citation: 1981 (1) SA 964 (A)
• Hearing Date: 14 March 1980
• Court: Appellate Division

Diemont JA:

This is an action for damages for loss of petrol from a storage tank. The plaintiff in the trial Court (now respondent), David Simon Katz, owns a small garage and filling station known as the Brakfontein Garage, which is situated near Leslie in the Eastern Transvaal. The defendant (now appellant), Esso Standard South Africa (Pty) Ltd, is an oil company and a supplier of petrol and petroleum products.

Diemont JA

Plaintiff issued summons on 29 March 1977. In the particulars of claim annexed to the summons, plaintiff stated that he had since 1969 operated the Brakfontein garage, that the defendant had at all times supplied him A with petrol and petroleum products for resale to the public and that he was required to pay cash for each delivery of petrol. He stated further that:

"4 (a)

The underground tanks, pipes, pumps and other equipment at the Brakfontein Garage, used in the supply of petrol to the general public, are the property of the defendant.

(b)

B In terms of an oral agreement entered into between the parties at the time when the defendant started to supply petrol for cash to the plaintiff, the defendant agreed to -

(i)

provide and install their own tanks, pipes, pumps and equipment; and

(iii)

C maintain the said tanks, pipes, pumps and equipment in good working order and condition.

(c)

At the time of the conclusion of the aforesaid agreement, it was within the contemplation of the parties that, should the defendant D not install and keep its tanks, pipes, pumps and other equipment in good order and condition, petrol would leak out, causing the plaintiff to suffer damages."

Plaintiff alleged that petrol had leaked out of the tanks and/or the pipes and/or the pumps and that on 7 March 1975,

"... after repeated attempts, the defendant then excavated the ground around the tank and the pipe, whereupon it was found that the E joint of the two inch pipe which runs from the tanks to the pump, was open underneath and kept together by about 20 percent of its thread. Through this opening, petrol had leaked out of the system."

The defendant thereupon installed new pipes, threads and joints at its own cost, but not before a quantity of petrol belonging to the plaintiff had F leaked out of the system.

Plaintiff alleged further in paras 6 and 7 of the particulars of claim that:

"6.

As a result of the aforesaid leak, a quantity in excess of 50 000 litres of petrol belonging to the plaintiff, leaked out of the said system.

7 (a)

G During or about March 1975 to May 1976, the defendant through its servants agreed with the plaintiff that the quantity of petrol which had leaked out amounted to 23 000 litres and which had to be calculated at 19,97 cents per litre.

(b)

Accordingly, the plaintiff has suffered damages in the amount H of R4 593,10 which amount represents 23 000 litres at 19,97 cents per litre."

Plaintiff accordingly claimed payment of the sum of R4 593,10 together with interest and costs of suit.

In due course, on 30 June 1977, a plea was filed by the defendant oil company in which it admitted no more than the supply of petrol and petroleum products to plaintiff for cash and that it owned the underground tanks, pipes, pumps and other equipment. All other allegations were denied and, in particular, the defendant denied that it had agreed

Diemont JA

to maintain or was responsible for the maintenance of the underground tanks, pipes and other equipment.

A Thereafter, on 3 February 1978, plaintiff filed a reply to a request for further particulars for trial in which he stated that he could not recall the exact date when he discovered the defect in the tanks or pumps but said that it was approximately 1970. Nor could he recall the exact date when he discovered the leakage of petrol but averred that it was approximately 1971 as was also the date when he notified defendant of the B leakage. Plaintiff was unable to state the exact quantity of petrol lost as a result of the leakage "but stated that it was in excess of 50 000 litres". In reply to a question relating to the stock of petrol on hand as at the date on which the leakage was discovered and the stock (quantity) of petrol on hand on the date on which the alleged leakage defect was repaired, the plaintiff said:

C "Since the exact date of the discovery of the leakage is unknown, the plaintiff is unable to supply the particulars requested. However, the plaintiff says that these particulars are irrelevant in view of the plaintiff's allegations that the defendant admitted to the plaintiff that, as a result of the leakage, plaintiff had lost a minimum of 23 000 litres of petrol."

D On 7 April 1978 plaintiff filed further and better particulars for the purpose of trial. This document reads as follows:

"The plaintiff hereunder sets out all the litres of petrol purchased by it from defendant, the litres of petrol sold, the shortages of E litres as a result of the loss of the petrol leaked out, the cost price per litre, the total shortages at cost price and the total shortages at selling price during the period alleged, marked annexure 'A'.

The plaintiff hereby reduces the total shortages at selling price to R4 F 593,10, which sum is claimed by plaintiff in the action."

This schedule, annexure "A", played an important role in the evidence and indeed was the basis on which damages were calculated by FRANKLIN J in the trial Court. It is accordingly necessary to quote it in full:

"Annexure 'A'
Date of purchase	Quantity of litres purchased	Quantity of litres sold	Shortages on litres	Cost price per litre	Total shortages at cost price	Total shortages at selling price
13.10.71
to	30 683	27 460	3 223	9,03	291,04	350,98
22.7.72
15.7.72
to	18 161	18 107	54	9,33	5,03	6,04
20.11.72
7.12.72
to	9 088	5 000	4 088	9,43	385,50	454,17
19.12.72
9.1.73
to	17 989	20 369	(2 380)	9,73	(231,57)	(275,84)
26.3.73
4.4.73
to	54 336	50 672	3 664	9,53	349,18	407,43
19.10.73

Diemont JA

5.11.73
to	19 469	19 776	(307)	11,03	(33,86)	(39,57)
1.2.74
11.2.74
to	103 886	90 698	13 188	13,53	1 784,33	2 029,63
30.11.74
5.12.74
to	52 659	41 955	10 704	14,43	1 544,59	1 743,68
27.3.75
	306 271	274 037			R4 094,24	R4 676,52"

B The trial commenced on 7 August 1978, some seven years or more after the defect in the tanks and pipes was alleged to have been noticed. But before referring to the evidence led at the trial it is necessary to record that the pleadings were amended shortly before the plaintiff closed C his case. Plaintiff's counsel asked for the deletion in para 6 of the particulars of claim of the words "in excess of 50 000 litres..." and the substitution of the words "a quantity" and further for the deletion of para 7 (a) and the amendment of para 7 (b) so as to read:

"7 (b)

As a result the plaintiff has suffered damages in the amount of R4 094,24."

D The amendments were granted without objection and plaintiff accordingly reduced his claim to payment of the sum of R4 094,24 together with interest at the rate of 11 per cent per annum as from the date of judgment and costs of suit.

[The learned Judge then dealt with the evidence and proceeded.]

E The learned Judge in the trial Court decided that, although the evidence adduced by the plaintiff was

"not entirely of a conclusive character, it was the best evidence available"

to him. He accordingly came to the conclusion that the plaintiff had proved his damages calculated on the basis of the schedule (annexure "A"), F that is at the reduced sum of R4 094,24, representing the cost price to him of the premium petrol alleged to have been lost. It followed that judgment for plaintiff was given in the sum of R4 094,24 with interest at 11 per cent from date of judgment and costs.

Mr Kuper who appeared for the defendant company on appeal, attacked the judgment on two grounds. He contended:

(a)

That plaintiff was in a position to lead evidence to show the G quantum of damages with precision, that he chose not to do so, and that annexure "A" was unreliable and incomplete and the Court a quo should have granted absolution from the instance.

(b)

In the alternative that, if the Court could properly have estimated the quantum of damage, then such estimate should not H have been based upon an uncritical acceptance of the figures shown in annexure "A".

Before considering these contentions it is necessary to make some reference to the principles applicable to the assessment of damages in this type of case.

These principles have been conveniently summarized by DE VILLIERS J in Lazarus v Rand Steam Laundries (1946) (Pty) Ltd 1952 (3) SA 49 (T). It has long been accepted that...