Tropical (Commercial and Industrial) Ltd v Plywood Products Ltd

• Jurisdiction: South Africa
• Court: Appellate Division
• Judge: Centlivres CJ, Hoexter JA, Steyn JA, De Villiers JA and Brink JA
• Judgment Date: 17 November 1955
• Citation: 1956 (1) SA 339 (A)

Centlivres, C.J.:

The appellant, to which I shall refer as the defendant, was sued by the respondent (plaintiff) in the High Court of Southern Rhodesia for damages arising from an alleged failure to deliver timber in terms of a contract between the parties. The defendant denied A that it had broken its contract. On the second day of the trial the following entry was made on the record:

'Parties' counsel agreed as follows: In the event of the plaintiff satisfying the Court that there has been a breach of contract by the defendant, the Court proposes, in terms of sec. 24 (c) of the Arbitration Act, Chap. 13, to order that the following issues of fact be tried before an arbitrator:

(a)

The cost to the plaintiff of manufacturing, for the purpose of B sale to the public, plywood and plywood products from the quantity of peeler logs which the Court finds has been short-delivered to the plaintiff in terms of the contract; for the purpose of determining such costs the contract price of the logs shall be included;

(b)

the probable price that the plaintiff would have realised on the sale of the products processed from such peeler logs; and

(c)

any other matter which the Court, at the conclusion of the trial, may deem to be relevant in determining the quantum of damages.

C Mr. Lloyd (counsel for defendant) asked the Court to decide on whether or not any damage was suffered.

The Court stated that it was not prepared to do so, and that it could not do so without itself deciding (a) and (b) of the above terms of reference to arbitration.'

The trial Court delivered a judgment in which it held that the defendant D had committed a breach of contract; that there was a possibility that the plaintiff had suffered damage; that such damage should be estimated on the basis of loss of profits and that the plaintiff was not entitled to claim in addition thereto damages on the ground that it had to maintain its factory operations during the term of the contract in spite of having no timber with which to manufacture Plywood and Plywood E products. Having delivered this judgment, the Court adjourned in order to give the parties an opportunity of agreeing upon the terms of reference to arbitration under sec. 24 (c) of the Arbitration Act (Chap. 13). The parties agreed to the terms of reference which were embodied in an order of Court whereby it was ordered:

'1.

That the question as to what damage, if any, was sustained by F the plaintiff Company as the result of the defendant Company's failure to deliver timber in terms of the contract between the parties be tried before an arbitrator.

2.

That in trying such issue:

(a)

The said arbitrator will accept -

(i)

That regular deliveries under the contract commenced on 19th April, 1952,

(ii)

G That the defendant Company's breach of contract consisted in its failure to deliver 18 truck loads of 1,100 cubic feet each . . .

(b)

The said arbitrator will attempt to ascertain:

(i)

What the cost would have been to the plaintiff Company of producing plywood and plywood products from the said timber had such timber been delivered in accordance with the contract. In ascertaining what such cost would have been the arbitrator will take proper account of all overhead expenditure including overheads of a constant nature, which H would have been incurred in relation to the said timber under the contract, as well as any other matter which the arbitrator may consider pertinent.

(ii)

The prices at which the plaintiff would have sold such plywood and plywood products manufactured from the said timber. In ascertaining such prices the arbitrator will take proper account of the availability of markets to the plaintiff for such products.

3. (a)

That the said arbitrator shall have all the powers of an arbitrator acting pursuant to a submission.

Centlivres CJ

(b)

That the said arbitrator shall report back to this Court within three months or within such extended time as the parties may agree to or as the Court may allow.

(c)

That the costs of this reference be costs in the cause.'

After referring the matter to arbitration, the learned trial Judge went on to say:

A 'The findings of the arbitrator will be referred back to me and then final judgment will be delivered . . . Counsel will be afforded an opportunity of addressing me again . . . on the general issue of damages . . . The matter will therefore now stand down pending the receipt of the arbitrator's report.'

After the order of Court was issued, it was ordered by the trial Judge that

B 'special leave to appeal and cross-appeal be and is hereby granted in terms of sec. 5 (c) of the Administration of Justice (Appeals) Act (Chap. 10).'

When the appeal was called Mr. Pollak, who appeared for the plaintiff, submitted that the appeal should be struck off the roll on the ground that there was no judgment or order of the High Court of Southern Rhodesia within the meaning of sec. 2 of Act 18 of 1931 which C corresponds to sec. 5 of the Administration of Justice (Appeals) Act of Southern Rhodesia. That section provides that in civil matters appeals shall be heard by the Appellate Division:

(a)

from any judgment or order of the High Court (not being a judgment or order...