Hall - Thermotank Natal (Pty) Ltd v Hardman

• Jurisdiction: South Africa
• Judge: Henning J
• Judgment Date: 19 September 1968
• Court: Durban and Coast Local Division

Henning, J.:

This matter came before me by way of exceptions to a plea and a claim in reconvention. I shall refer to the excipient as the plaintiff and to the respondent as the defendant.

The plaintiff, which carries on business as refrigeration and air A conditioning engineers and contractors, claims from the defendant payment of the sum of R5,535.35 for services rendered and material supplied. It is happily not necessary to refer at any length to the contents of the pleadings which, together with the exceptions, comprise some 130 foolscap pages. The amount sued for is made up of five separate B claims, less a sum of R2,000 paid by the defendant. The main claim arises out of a contract entered into by the parties in April, 1965, in terms of which the plaintiff undertook to supply and to erect in a fishing vessel owned by the defendant, named The Lobster, a refrigeration plant, and to insulate the hold of the vessel, for a consideration of R5,500, plus the cost of extras. The remaining four C claims are, according to the allegations in the declaration, for additional work and materials supplied from time to time in terms of a subsequent oral agreement. In the alternative, as far as the main claim is concerned, the plaintiff claims that the defendant has been unjustly enriched at its expense to the extent of R5,857 less the sum of R2,000 paid by the defendant, the sum first mentioned including R357 for extras.

D The defendant in his plea admits the contract on which the main claim is based, but avers that, in addition to the terms alleged by the plaintiff, the contract included further terms which are set forth in the plea. With regard to the other four claims, in so far as he admits that material was supplied and services were rendered, the defendant E avers that all this was done in pursuance of the main contract. In certain instances he raises this as an alternative defence to a denial that material was supplied and services were rendered. For the purpose of deciding the exceptions the allegations of fact contained in the plea, as supplemented by further particulars, must be accepted as F correct. The same applies to the claim in reconvention. In both instances it must be taken that there was only one contract and that its terms were as alleged by the defendant.

In the plea the defendant avers that the plaintiff purported to supply and erect a refrigeration plant and purported to insulate the hold of the vessel in terms of the contract, but that neither the supply and G erection of the plant nor the insulation of the hold was in terms of the contract. He then sets forth the respects in which he alleges the plaintiff committed material breaches of the contract. In further particulars to the plea the defendant alleges that the refrigeration plant would not function at all and could not be made to function by the plaintiff. The defendant avers that by reason of the said breaches he is H entitled to cancel the contract, and he says he does cancel it. In the alternative he alleges that he has the right to cancel the contract because he was induced to enter into it by fraudulent misrepresentations made by the plaintiff. The defendant denies that he accepted the plant as having been duly installed and the insulation as having been duly done, and also denies that he received any benefit from work performed or materials supplied by the plaintiff. He states that the amount of R2,000 which he paid represents progress payments, and avers that he is

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entitled to a refund thereof. He tenders the return to the plaintiff in their present condition of certain items supplied by the plaintiff, and avers that he is unable to tender the return of the balance of materials supplied, such materials having got lost at sea when The Lobster sunk A during a gale. (It is common cause that the sinking of the vessel was a casus fortuitus). The defendant alleges that the value of the material lost is R1,350, which he tenders to pay to the plaintiff by way of setoff against the R2,000 which he claims the plaintiff is obliged to refund to him. In the result he prays for judgment in his favour with costs.

Relying upon the alleged breaches of contract and in the alternative B on the fraudulent misrepresentation as set forth in the plea, the defendant claims in reconvention payment of the sum of R650 (the difference between the aforesaid amounts of R2,000 and R1,350), and of the sum of R87,634.13 representing consequential damages which he alleges he has suffered.

C The first exception in convention is to the defences pleaded that the defendant is not liable to the plaintiff because of the latter's material breaches of contract, alternatively because of fraudulent misrepresentations. The exception is based:

'on the grounds that each of the said defences pleaded as aforesaid lacks averments which are necessary to sustain a valid defence in law, in that

(a)

the contract admitted by the defendant in . . . the plea, was D for the supply of materials and the rendering of services, and the defendant, whilst alleging that he cancels the contract, has not tendered to, and is unable to make restitution to the plaintiff as required in law in respect of certain materials supplied and in respect of services rendered by the plaintiff; and

(b)

a payment of money, alternatively, the payment tendered in lieu of the restitution of those materials supplied by the plaintiff in respect of which the defendant is unable to make restitution, E would not, in law, constitute a valid or adequate restitution'.

The second exception is also directed at the defence pleaded that the defendant is not liable to pay to the plaintiff the contract price or any part thereof because of the plaintiff's alleged breaches of the contract. The exception is taken on the ground that the defence pleaded F lacks averments which are necessary to sustain a valid defence in law, in that:

'in terms of the contract admitted by the defendant in . . . the plea, the plaintiff's liability caused by any defective workmanship or material is limited to the replacement or repair, free of charge, of any part failing due to such causes'.

The first two exceptions to the claim in reconvention are in substance the same as those to the plea. The third exception attacks the claim in reconvention for consequential loss on the ground that:

G 'in terms of the contract admitted by the defendant in the claim in reconvention, it was agreed that the plaintiff's liability caused by any defective workmanship or material would not extend to any consequential loss or damage due to any cause or causes whatsoever'.

The term of the contract which is relevant to the second exception to the plea and the second and third exceptions to the claim in H reconvention is as follows:

'5.

Guarantee and liability: The equipment, if operated in accordance with the tenderer's instructions, is guaranteed for a period of 12 months from the date of starting up thereof, against defective workmanship and material. Any part failing due to such causes will be replaced or repaired, free of charge. The tenderer's liability shall be limited to such replacements or repair and shall not extend to any consequential and/or damage due to any cause, or causes, whatsoever. In the case of a part or section of an installation which, for the convenience of the purchaser, may be set by the tenderers into operation before completion of the contract, the

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guarantee in respect of that part or section shall date from the time of its being put into operation as aforesaid.'

Counsel rightly agreed that the term should be read as if the word 'loss' appears after 'consequential' in the second sentence.

A The contract pleaded by the defendant is a locatio conductio operis. His defence to the plaintiff's claim for payment is a rescission of the contract, coupled with a tender to make partial restitution. The claim for rescission is founded upon alleged material breaches in the performance of the contract by the plaintiff, alternatively upon fraudulent misrepresentation. The basis of the claim in reconvention is the same.

B Whilst Mr. Feetham, who appeared for the plaintiff, conceded that rescission coupled with restitution is allowed in certain contracts of locatio operis, he submitted in his main argument that the remedy is not available in this case, because (a) by the very nature of the contract C there could not be restitution of the labour performed by the plaintiff, and (b) the materials lost at sea could not be restored.

I propose firstly to consider the first exception to the plea and the first exception to the claim in reconvention. Counsel on both sides referred to many decided cases and other authorities. I have read them all, but I intend to refer only to some of them.

D Restitutio in integrum in the law of contract applies where (a) a purchaser redhibits, and (b) where a contracting party rescinds upon any of the various grounds recognised by law. It is convenient first to consider some of the authorities dealing with redhibition.

In S.A. Oil & Fat Industries, Ltd v Park Rynie Whaling Co. Ltd., 1916 E A.D. 400 at p. 412, INNES, C.J., stated that re-delivery is a condition precedent to redhibitory relief. Commenting on this statement, Mackeurtan in The Law of Sale of Goods, 3rd ed., p. 314, has this to say:

'but in the circumstances of the case he clearly only intended to convey by the expression that where a purchaser was unable to return the article through having used it, he was limited to the action for damages; and the case was, in fact, decided on those lines'.

F See also the criticism by de Wet and Yeats, Kontraktereg en Handelsreg, 3rd ed., p. 157, footnote (e).

PRICE, J., in African Organic Fertilizers and Associated Industries Ltd v Sieling, 1949 (2) SA 131 (W) at p. 135, observed with reference to...