Lavery & Co Ltd v Jungheinrich

• Jurisdiction: South Africa
• Citation: 1931 AD 156

Lavery & Co Ltd Appellants v Jungheinrich Respondent
1931 AD 156

1931 AD p156

Citation	1931 AD 156
Court	Appellate Division
Judge	De Villiers CJ, Wessels JA, Curlewis JA, Stratford JA and Roos JA
Heard	March 10, 1931
Judgment	March 31, 1931

Flynote : Sleutelwoorde

Damages — Breach of contract — Pleading — Special damage — Remoteness of damage — Loss of business reputation.

Headnote : Kopnota

As a general rule of pleading if special damage is claimed, it must be stated with particularity in the pleading.

The question whether damage claimed in an action for breach of contract is or is not too remote depends on whether, at the time when the contract was made, such damage can fairly be said to have been in the contemplation of the parties or may reasonably be supposed to have been in their contemplation as a probable consequence of a breach of the contract.

Though loss of trade (as distinct from loss of profit on resale) or injury to business reputation is not usually in the contemplation of the parties as the probable consequence of a breach of a contract; it may be possible to lay facts before a Court to show that such probable consequence was or may reasonably be supposed to have been within the contemplation of the parties at the time of making the contract.

Where the plaintiff in his declaration claimed damages for loss of business reputation arising out of a supply by the defendant, a manufacturer, of certain defective steel shafts resold by the plaintiff to its customers.

1931 AD p157

Held, on appeal, that on the form of the pleadings an exception that the declaration disclosed no cause of action had rightly been allowed.

The decision of the Natal Provincial Division in Lavery & Co., Ltd. v Tungheinrich, confirmed.

Case Information

Appeal from a decision of the Natal Provincial Division (TATHAM, J.; CARTER, J., and GRINDLEY-FERRIS, J.). The facts and pleadings were set out as follows in the judgment of CURLEWIS, J.A.:

Appellant company sued respondent in the Natal Provincial Division for the sum of £5,621 12s. 5d., being the total of eleven different claims for damages. The declaration setting out there claims consists of 85 paragraphs, and is unusually long and complicated. Certain particulars were furnished by plaintiff at the request of defendant. To the declaration as amplified by the particulars defendant took six exceptions. The first exception was not argued in the court below, and it was therefore not dealt with. The fourth and fifth exceptions were admitted to be good, and these were upheld. The exceptions which were the subject of argument in the court below were the second, third and sixth. The second exception was dismissed, but the court allowed the third and sixth exceptions with costs. The appeal is against the order allowing the third and sixth exceptions and against the order of costs. There was no appearance before us for the respondent, who sent a cable from Hamburg to the Registrar objecting to the jurisdiction of this Court to hear the appeal.

The third and sixth exceptions were taken to paras. 23 and 76, respectively, of the declaration. Para. 23 of the declaration reads as follows: -

In consequence of the supply by the plaintiff to its customers of defective scaling shafts as aforesaid plaintiff's business reputation has suffered severely and plaintiff has lost its market for scaling shafts, and has further lost much profitable business, in that many customers who had previously been in the habit of placing annual orders with plaintiff for scaling shafts and other machinery thereafter refused and still refuse to have business dealings with plaintiff. In consequence of these things plaintiff has suffered loss and damage in the sum of £750, for which defendant is liable to the plaintiff."

On a request for particulars the plaintiff replied:

The figure of £750 represents the diminished profits derived from this class of business for the year ending 30th June, 1929,

1931 AD p158

as compared with those of the year ending 30th June, 1928, consequent upon the reduced turnover attributable to the factors referred to in the said paragraph.

To appreciate the claim set out in this paragraph we have to consider the preceding paragraphs of the declaration. After setting out that plaintiff is a limited liability company carrying on business in Natal as engineers and general dealers, and that defendant is a merchant of Hamburg, Germany, and the sole proprietor of a business carried on at Hamburg Under the name of H. Jungheinrich & Co., Engineers, Merchants and Exporters, and also of a business carried on in Durban under the name of H. Jungheinrich & Co., which latter business represented the defendant's Hamburg business, and solicited and received orders for execution thereby, the declaration reads as follows (as far as relevant for the purpose of this judgment) :

"3. The plaintiff entered into contracts with the defendant through the said business of H. Jungheinrich & Co. of Hamburg in accordance with indents dated respectively as set out in column 1 of annexure A, and numbered as set out in column 2, for the supply by defendant to the plaintiff of scaling shafts to the number and of the length set out in column 3 of the said annexure.

"4. The said contracts were entered into and were to be performed in Durban.

"5. To the knowledge of defendant plaintiff required and purchased the said scaling shafts for the purpose of resale at a profit, more especially to sugar milling concerns, for use in the cleaning of tubes and pipes in sugar milling machinery.

"6. The said shafts were sold and bought as aforesaid as shafts suitable to be used either with scaling machines supplied by F. Gillman (B.S.T.) Ltd of Smethwick, England, or with scaling machines manufactured by Bader & Halbig of Halle, Germany, and it was a condition of the said contracts that the shafting should be similar in all respects to the shafting supplied by Gillman (B.S.T.) Ltd., which the plaintiff had up to that time stocked and supplied to his customers: on or about 21st June, 1927, the plaintiff supplied a sample of Gillman's shafting to the defendant's representative in Durban, one B. Seligmann, for transmission to Germany, which sample was to represent the standard of shafting required by plaintiff in subsequent contracts for scaling apparatus to be entered into between the parties from time to time.

"7. Defendant in due course delivered shafts to plaintiff in purported pursuance of the contracts aforesaid, and plaintiff duly paid therefor, in the manner required by the said contracts.

"8. From the shafts so purchased by plaintiff from defendant, plaintiff resold shafts as set out in annexure B hereto to the parties named in column 1 at the price set out in column 2 and of the number and length set out in column 3: plaintiff duly delivered the shafts to the said purchasers for use by them.

"9. In each and every instance when the shafts were put into use they proved to be faulty and defective and not in accordance with the contracts aforesaid, in that (a) they were not fit for the purpose for which they were sold and bought because they were unsuitable for use with the scaling machines supplied by Gill

1931 AD p159

man Ltd or leader & Halbig because they broke down under the load in each case within the first working hour; (b) they were not similar in all respects to the shafting supplied by Gillman (B.S.T.) Ltd.; (c) they were not of the standard represented by the sample shaft referred to in paragraph 6 hereof, nor did they possess the properties thereof.

"10. In consequence of these things plaintiff's customers repudiated the purchase of the said defective shafts and declined to pay plaintiff unless and until the defective shafts were replaced by plaintiff with good shafts, and plaintiff did provide replacements at a cost to it set out in column 4 of annexure B.

"11. In the instances indicated in column 5 of annexure B, the replacements provided by plaintiff from shafts purchased by plaintiff from defendant themselves proved to be faulty and defective as aforesaid.

"12. At some time during the month of October, 1927, the exact date not now being with the plaintiff's recollection, by arrangement with the plaintiff, one F. Jungheinrich, a son of the defendant who was then in South Africa upon defendant's business, accompanied Lavery, the plaintiff's managing director, to certain sugar mills on the North Coast of Natal for the purpose of seeing at work the shafting alleged by plaintiff to be faulty and defective as aforesaid.

"13. The said Jungheinrich then and there orally acknowledged to the plaintiff's said managing director that the shafting was faulty and defective in the respects aforesaid and incapable of performing the work for which it was required, and be orally requested plaintiff to return to H. Jungheinrich & Co. of Hamburg two of the defective shafts for inspection by defendant's engineers, and then and there orally undertook and promised, that the defective shafting should be replaced free of charge by defendant.

"14. Plaintiff thereupon duly returned two of the defective shafts to H. Jungheinrich & Co., Hamburg, as requested, but defendant never at any time replaced the defective shafting as aforesaid.

"15. In consequence of defendant's breaches of contract aforesaid plaintiff has suffered and sustained damage and loss to the extent set out in column 6 of annexure B totalling the sum of 2235 15s and incurred expenses and loss in the further sum of M in extra railage on replacements, travelling expenses and cables: plaintiff therefore claims from defendant the sum of £293 15s."

Par. 84 of the declaration reads: "All the goods and things purchased, or contracted to be purchased from the defendant by the plaintiff's and/or Lavery respectively, as hereinbefore set out were to the knowledge of the...