Murray & Roberts Construction Ltd v Finat Properties (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Hoexter JA, E M Grosskopf JA, Nestadt JA, Kumleben JA, Nienaber JA
• Judgment Date: 09 November 1990
• Citation: 1991 (1) SA 508 (A)
• Hearing Date: 21 August 1990
• Court: Appellate Division

Hoexter JA:

In the Cape of Good Hope Provincial Division the respondent company ('Finat') was the plaintiff in an action against Murray and F Roberts Construction Ltd ('MRC') as the defendant. In its action Finat claimed damages in the sum of nearly R8,5m for alleged breach of contract. MRC excepted to Finat's particulars of claim on the ground that they lacked averments necessary to sustain Finat's cause of action. Before the exception was heard Finat amended its particulars of claim and MRC amended its notice of exception. After hearing argument upon the exception Friedman J (in whose judgment Foxcroft J concurred) held G against MRC. The following order was made by the Court a quo :

'Save that the plaintiff is ordered to pay any wasted costs occasioned by the amendment to the particulars of claim as well as the costs, if any, of the exception relative to paras 9 to 11 thereof, the exception is dismissed with costs.'

H With leave of the Court below MRC appeals against the whole of the judgment given against it.

In what follows I shall refer to Finat's particulars of claim simply as 'the claim'. In para 3 of the claim certain averments are made by way of background. It is recorded (in para 3.1) that during 1987 the I Development Board of the House of Representatives ('the Board') negotiated with the Murray and Roberts Group of companies ('Murray and Roberts') with a view to granting to Murray and Roberts the exclusive right to service and develop certain townships in an area known as Blue Downs; and to market and 'alienate' developed erven within such J townships. Paras 3.2 and 3.3 of the claim read as follows:

Hoexter JA

'3.2

in Terms of the Proposed Agreement, Murray & Roberts Was To

(a)

prepare and execute in phases the layout and development of townships, including site clearance, landscaping and installation of all services;

(b)

develop the said townships in phases by erecting, inter alia, housing in terms of approved layouts;

(c)

B market and alienate such erven to qualified purchasers for and on behalf of the Board on terms and conditions to be agreed upon by the Board and Murray & Roberts.

3.3

In and during the latter half of 1987, plaintiff entered into negotiations with Murray & Roberts with a view to obtaining the right to erect residential houses on certain erven in the phases C to be developed by Murray & Roberts and to market such houses on terms to be agreed upon between the parties.'

It is necessary to quote in full para 4 of the claim.

'The agreement

4.1

D In and during November 1987, and at Cape Town, plaintiff represented by Messrs Aiello and Le Tournier, entered into a provisional oral agreement with defendant, represented by Mr P du Pont, the terms of which were summarised in a letter, dated 23 November 1987, addressed by plaintiff to defendant.

E A copy of the letter is hereunto annexed, marked "PCI".

The salient terms of the agreement were the following:

(a)

Plaintiff was to be allocated 400 erven on which residential houses were to be built by plaintiff. Plaintiff was to market the said houses to qualified purchasers.

(b)

F The price payable to the Board on the sale of the houses to such purchasers, was to be between R11 500 and R12000 per erf.

(c)

Possession of serviced erven was to be given to plaintiff by about May 1988 so as to allow plaintiff to commence work at approximately the beginning of June 1988.

(d)

G Erven in each of the phases were to be allocated to plaintiff on a pro rata basis.

(e)

The erven allocated to plaintiff were to be made available over a maximum period of three years.

(f)

Erven were to be fully serviced when handed over to plaintiff.

(g)

H Plaintiff was to clear marketing arrangements with defendant.

(h)

The design of the classes of houses to be built had to meet the approval of defendant.

4.2

On or about 10 December 1987, and at Cape Town, it was orally agreed between plaintiff, represented by Mr Aiello, and defendant, represented by Mr Du Pont, that the terms of the provisional agreement as summarised in annexure "PCI" were in I order and the agreement was finalised on those terms.'

In para 5 of the claim it is alleged that by way of a letter dated 14 June 1988 MRC repudiated the agreement. Paragraph 6 of the claim, which is particularised in an annexure to the claim, sets forth the J computation of the damages claimed.

Hoexter JA

A One of the grounds of exception was that whereas Finat sought to recover special damages, its claim failed to allege that it had been within the contemplation of the parties that, upon a breach by MRC of the alleged agreement, special damages would be suffered by Finat. The amendment of the claim already mentioned cured this admitted defect and in consequence this particular ground of objection fell away. The B remaining grounds of exception upon which MRC relied fell under two headings and may be summarised as follows:

First ground

(A)

Main contention (see paras 4 - 6 of notice of exception)

The agreement relied upon by Finat was for the sale of immovable C property by the Board to Finat. The claim avers neither that a fixed nor certain price for the sale was agreed. Accordingly the alleged agreement was inchoate or void for vagueness.

(B)

Alternative contention (see para 6bis of notice of exception)

If the alleged agreement were not an agreement of sale it was D nevertheless incomplete, or void for vagueness. In support of contention (B) the following grounds are detailed in the notice of exception:

(1)

paras 6bis (1) and (2)

The sum to be paid to the Board upon the sale of the houses was a material term of the agreement between the parties.

E According to the letter PCI -

(a)

an agreement in respect of the said sum 'has to be reached';

(b)

the sum would 'be approximately R11 500 - R12000';

(c)

the sum would, in the future, be finalised between MRC and the Board.

(2)

F para 6bis (3)

The...