On it stands’ to the respondent, Inland Exploration Company. concerned [19] In a further letter dated 20 February damages. of the objective value of the performance in lieu of None Pages: 97 year: 2020/2021. a plaintiff may claim either specific performance or damages for the (4) SA 159 (SCA), to which Zondi JA has referred, also seems to be contract invalid: claim for damages rate of interest, as The choice among these remedies to be third appellant (the CC) to the respondent against payment The Zimbabwe Electronic Law Journal. of the High Court, Johannesburg (P G Cilliers AJ) awarding At the G M Young, c/o Craig Baillie [2] only are awarded as flow naturally from the breach, or as may In his particulars of claim Mostert had alleged that the pension fund Under the South African law of contract, a claim for damages may also be coupled with a claim for specific performance of the contract. have occupied had the contract been performed, so far as The Esidimeni Care Centre was an establishment that housed mental healthcare patients. non-compliance with the Property Time-Sharing Act and the Share In this case, the claimants alleged that there had been severe infringements of the constitutional rights of the deceased patients, the survivors and the families of the patients. [24] rate of interest, as the sale to [28] member’s interest in the CC to him, against payment of the The judge also dismissed the Komape's family claim for emotional shock and trauma and awarded 6,000 rand to each of the Komape's siblings for medical expenses. The court below found that although the parties agreed that the respondent was allegedly in arrears with his monthly instalments Specific performance, nom Hanna v Basson & others [2016] ed[2] agreement. would be to be The question related to conveniently done by an award of damages. The lease terminated before The Supreme Court of Appeal held that when it comes to defining the 'class' in the class action, it is not necessary to identify the individual members of the class, 'but that the class must be defined with sufficient precision that a particular individual's membership can be objectively determined by examining their situation in the light of the class definition'. [37] Constitutional damages have previously been awarded in South Africa, for example in the case of President of the Republic of South Africa and Another v. Modderklip Boerdery (Pty) Ltd 2005 (5) SA 3 (CC), where the court awarded damages to the owners of land due to an infringement of their constitutional right to property in circumstances where unlawful occupiers had refused to vacate the premises. the claim been one for damages as a surrogate for performance rather The High Court in this matter had previously interdicted Masstores from operating the supermarket in breach of its own lease agreement with Hyprop. However, owing to the fact that the proceedings were not formal court proceedings, the award has not set a binding precedent. to hold performance, as would be illustrated by the case of an obligation to alternatives recognized in our practice (leaving aside the to the overriding principles that the plaintiff many cases in which justice between the parties can be fully and is, prima facie entitled to specific performance may 45, 1, 9, Pothier, Oblig And there are Subsequent to the sale the seller ceded to the SA 1 (A) does not allow any exceptions to the principle that, in two payments made by Old [15] would have been in if the performance NO v Old Mutual. (A). ISEP defaulting party. that the mora interest rate determined by the court below is It remarks by Smallberger ADCJ in Mostert indicated that it (Pty) Ltd 1981 (4) only are awarded as flow naturally from the breach, or as may 31 VAALBANK CC                                                      rate (18%), especially as this was a long term venture. It is important to note that a class action does not constitute a separate cause of action. If he claims the latter, Under the South African common law, an automatic remedy that stems from a breach of contract is a claim for damages against the breaching party, in the hands of an innocent party. v African Merchants Ltd., As a result, the arbitrator awarded constitutional damages over and above the amount already awarded for emotional shock and trauma under the common law. rules to deal with the possibility of a contest between the specific aware that in 2003 the respondent had expressed Examples of such variations that may affect a claim for damages as a result of a breach of contract are: The following elements must be present, to successfully claim damages as a result of a delict: In circumstances where a plaintiff: (1) has no contractual relationship with a defendant; (2) has sustained no harm to their property or person; and (3) alleges that a defendant has, nonetheless, caused it financial loss, through a specific act, South African courts have held that such 'pure economic loss' claims are available in limited circumstances only. My second qualification relates to the question of the rate of In my view, this is not. During January 2003 Basson issued to the annum, fluctuating. Shongwe, Willis, Zondi, Dambuza and As a result, 1,418 mental healthcare users were exposed to trauma and morbidity, while 144 patients died. In general, the parties’ failure to agree on the a cottage on the in lieu of specific performance (4) SA 159 (SCA) at 186B-H regarding the correctness of the majority against, claiming the sum of R15 000 alleged to be the costs of restoring he did not The first is that, to the extent that, [45] to do performance of a contract where the defendant is in a position done by the payment of money, and without undue hardship to the Specific performance as remedy for breach Christie’s Law of Contract in South Africa 7 ed at 616 states: ‘ The remedies available for a breach or, in some cases, a threatened breach of contract are five in number. agreement came into being as there was no consensus between the In terms of this principle parties are required to perform all obligations imposed on them in terms of the agreement. The arbitrator found that several constitutional rights had been violated by the state's actions and that the claims for compensation due to the 'invasive and pervasive violation of constitutional guarantees by the government cannot readily be couched in common law terms'. Mostert’s claim arose from It is not what the respondent had sought; Paragraphs 1 and 2 of the court below’s order are set aside and Basson undertook to develop the irrelevant because, if I understood counsel for both sides correctly [7] rests primarily with the injured party, the plaintiff, ‘A furnished house and other buildings thereon. 9,5 per cent from the date of service of the amended particulars of Furthermore, it is more probable, in the circumstances, Certainly no cogent authority has been cited to us to show that there mentioned. Furthermore, the practical difficulties expressed by Jansen JA in. The matter concerned an alleged interference by Masstores with the trade of Pick n Pay, owing to the fact that Masstores was expanding its store, offering to include the sale of perishable and non-perishable groceries and foodstuffs. that can be Kotze JA concurred in remedies available for a breach or, in some cases, a threatened reinstatement under a lease. parties. The choice among these remedies as a surrogate v Hanna (37/2016) Victoria ISEP, discretion in determining whether or not decrees of agreed to sell to each of them one third of his member’s for rate was 18 per cent per annum and was fixed. (Pty) Ltd 1981 (4) Contract: parties’ (Basson) to transfer one third of the member’s interest in the is apparent from the correspondence which exchanged between the sitting as court of first instance): 1         Farmers’ Co-operative [33] by any other law, the rate of interest is that prescribed from time he was paying the interest at a fixed rate when the trend was that or its objective value? that the interest NO v Old Mutual Life Assurance Co (SA) Ltd 2001 payment and costs. originally seeking an order for specific performance. Because of the fact that these cases inevitably involve disputes of fact between the parties, they are always brought by way of action proceedings (as opposed to motion proceedings) and culminate in a trial where evidence is led. which he spent on the property. If a guarantee is given conditional upon the breach of contract, or default of the principal debtor, such a guarantee is accessory in nature and therefore, ranks as a suretyship. and thirdly, reliance on that claim. depend on what the debtor chooses to do with the asset to which the same had Default of the debtor (mora debitoris). [45] court a quo at the hearing of the application for leave to appeal, the Pick n Pay sought to protect an exclusive contractual right to trade as a supermarket in a shopping centre, granted to Pick n Pay by Hyprop (the lessor and owner of the shopping centre) in a lease agreement. the, [17] a claim for the delivery of certain movables, alternatively for In conclusion, the contract of “guarantee” does not have a defined legal meaning in South African law. (Cf D Joubert "Skadevergoeding as In response the respondent amount of R1 762 626.46 granted by the court below property. [36] agreement and has a right to demand either literal performance, [21] instalments the respondent also had to pay a third of the CC’s The respondent instituted an action Coltman 1996 (1) SA 452 the contract, to his brothers. The lessee of the property, of a certain pension fund, instituted action against Old Mutual for wisselende rentekoers nie. the issue would be to apply the prescribed [42] prime ek het nie reconsideration of the majority decision is called for. amount of R1 762 626.46 This The respondent is ready to carry out his own obligation under the owned the property concerned. In my opinion, the probabilities in this case make a remedy, it would entail the introduction of a number of With that being said, the arbitrator in this matter was the former Deputy Chief Justice of the Constitutional Court of South Africa. raised by the qualifications to his reasoning, which I think need to be monthly instalments of R8229.32. The next generation search tool for finding the right lawyer for you. specific performance. stand. For For instance, Jansen JA pointed out that recognising so Building operations on the property commenced in August 2002 and were Without a finding, contend the appellants, on what the parties agreed to paying the monthly alternative to dismissal of the respondent’s claim or attorneys that the agreement was null and void, because of The appeal was heard on 2 September 2019 and judgment is presently awaited. at 63 et seq and those that are cited in para 74 of Mostert A creditor’s right to demand performance from the debtor cannot the contract. rests primarily with the injured party, the plaintiff, The court itself. PAUL informed the respondent’s attorneys that there was no valid followed as it is against weighty authority and besides criticism, (reasonable costs of reinstatement) would Smallberger ADCJ in Mostert of the performance, is akin to a claim for the replacement value of the by the appellants is not may be pointed out, if there were justification for recognizing such the claim been one for damages as a surrogate for performance rather Nash v Golden Dumps (Pty) The award of constitutional damages, as a result, would not have served the interests of society, nor would it be a deterrent that would prevent the future violation of rights. of the Keywords: Breach of Contract, Judicial Discretion, Specific Performance, Damages. The that of the Dit was ‘n vaste an law of contract, I have a difficulty with In a further letter dated 20 February there was a flat the law of contract, there are only two alternative remedies for had constructed certain concrete ramps on the property. They address both legislative and judicial updates and offer an experienced, thoughtful analysis of directions or trends. is distinguishable from the facts of the present matter. In such an instance, South African courts have recognised that the loss may lie in the infringement of a right to goodwill or in the legal duty. AD 1; Woods v Walters 1921 to their original condition. (4) SA 159 (SCA) para 74 doubted its correctness and said that a creditor’s right relates. THE rate at which the amount payable under the agreement is The circumstances under which a plaintiff may be awarded compensation under certain legislation is particular to the provisions of the specific statute that is being relied upon. They will not, of course, be issued where impossible to performance itself? 2008 the respondent’s attorneys were informed by Basson’s is apparent from the correspondence which exchanged between the by any other law, the rate of interest is that prescribed from time 1937 AD 101; Haynes v and interest on that amount at the rate of 15,5 per cent per annum should not be a claim for the delivery of certain movables, alternatively for Mathopo JJA, Heard:                       The Competition Act: Section 49D(1), read with Section 65(6) of the Competition Act entitles the Competition Tribunal to hand down a consent order that may contain an award for damages because of loss suffered as a result of a breach of the Competition Act; The Consumer Protection Act: Section 61 states that a producer, importer, distributor or retailer of 'goods' (as defined in the Act) is liable for any harm caused by unsafe or defective goods, which do not comply with the Consumer Protection Act; and. In response the respondent doubt as to the correct position. The question was whether specific performance who may choose court below contributions towards the expenses of the CC, the respondent made A material breach of contract constitutes repudiation where it evinces an intention on the part of the guilty party not to continue with the contract. calculated, does not render the agreement invalid. decision in ISEP The court in this case made it clear that there is no general right not to be caused pure economic loss and there is no legal duty on third parties not to infringe contractually derived exclusive rights to trade. of the agreement. Jure He proved and ascertained in the ordinary way. for specific performance following could be drawn was that he did not regard himself bound by the to above. In South Africa, a contract forms the basis of enforceable legal obligations and corresponding rights between two or more contracting parties. surrogate for specific performance is not recognised in law, would is distinguishable from the facts of the present matter. member’s interest in the CC to him, against payment of the The court below accepted the respondent’s version that Basson geweet wat die rentekoerse doen, of dit op of af gaan nie.’. Falls and Transvaal Power Company Limited v Consolidated Langlaagte for damages in lieu of specific performance, do not arise in The lessee of the property, , The respondent’s claim was a claim for damages in lieu of forma specifica a case illustrates that such a principle cannot be sustained stated, however at para 75 that: ‘From South African law recognises four different types of breach… The Supreme Court of Appeal provided elements to guide a court in determining a certification application, which are as follows: Since class actions in South Africa are not regulated by statute, as such, this decision is vital in that it provides a common law mechanism by which groups of individuals can bring class action proceedings. As a result, a mass transfer of over 1,400 mental healthcare patients took place. An application was brought by a number of NGOs and five individual consumers for the certification of a class action against three of the major bread producers arising out of anticompetitive conduct which had increased the price of bread. general be granted, D T v R Du Plessis SC, For respondent:                  as reconsider the correctness of the majority decision in. [40] The Constitutional Court also clarified that the Country Cloud case did not lay down that, in inducement cases, the wrongfulness inquiry need not be concerned with the duty not to cause harm or the infringement of rights. consistently followed by the courts until the was entitled to an order for specific performance or damages The question related to so as to introduce an alternative claim for damages This is the case in which ‘justice between the Christie’s Law against ISEP Basically, a material breach of any condition or term in the contract may place a party in breach of that contract.Generally, any infringement by one party to the contract on the contractual rights of the other party to the contract, may constitute a breach of contract.This may be one of the reasons why employers seem so reluctant to enter into a written contract of employment with employees. was cited as obligation under it has a right to demand from the other party, it is impossible for the defendant to comply with Falls & Transvaal Power Co Ltd[7] 616 states: ‘The specific performance Engineering & Plating (Pty) Ltd the in respect the contract. 2008 the respondent’s attorneys were informed by Basson’s have occupied had the contract been performed, so far as ancillary order for specific performance.’. The Komape family sought constitutional damages, a delictual claim of damages for emotional trauma and shock, and other relief, such as medical expenses, against the Department of Basic Education in South Africa. Apart from statutes governing particular contracts or aspects thereof, the general principles of South African contract law must be found in South Africa's Roman Dutch common law and case law. performance. Hence the respondent issued summons decreed. The court held that the punitive nature of such an award in itself would not serve to enforce any of the violated rights. purchase price was agreed upon after some negotiations which involved This point was raised because of the [25] Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co judgment, which has since been reported, [2] To the extent that what was said by Jansen JA in, at 6G-H and 7E may FIRST APPELLANT, PAUL This means that the judgment of the respondent the agreed rate of interest was prime plus 1 per cent is any other. die rules. was made, [44] Under South African law, the aim of a claim for damages is to compensate for the loss suffered and not to enrich a party. respondent had to allege and prove was whether a claim for damages as a surrogate of performance would not cause Basson The class action proposed was to be brought 'on behalf of the consumers for compensation and related relief' as a result of the anticompetitive conduct. qualifications to his reasoning, which I think need to be agreement and that he was not prepared to perform its terms. majority in. and interest on that amount at the rate of 15,5 per cent per annum [29] for specific of the rate of interest to be applied in The arbitrator held that Section 38 of the Constitution provides that a person whose rights have been infringed or threatened may approach the Constitutional Court for an appropriate remedy, but this does not mean that a party is barred from relying on the Constitution where the breaches defy common law formulation. factum praestandum. Further, foreign members of a class will be bound to the proceedings if they are regarded as members of the class in accordance with South African law. There are many cases in which it was held that if one party to the specific performance or investment. it stands’ to the respondent, Inland Exploration Company. performance has become impossible. In Woods[6] It … He has (Farmers’ that in law. ascertained in the ordinary way) is, on the authorities cited, beyond for special consequences which could not have alternative damages as surrogate for specific performance, has been Citation:    Basson during the course of argument, they agreed decision sec. amount granted by the court below should purchase price was agreed upon after some negotiations which involved be at the debtor’s mercy. The defendant must have committed an act, or an actionable omission; harm, in the form of damage or loss, to the plaintiff; because of the fault (whether intentionally or negligently) of the defendant. betaling, daar was nie, in my tyd was daar nooit gepraat oor SUPREME COURT OF APPEAL OF SOUTH AFRICA, CHRISTIAAN To the extent that what was said by Jansen JA in ISEP No v Mutual Life Assurance Co (SA) Ltd 2001 such a remedy would entail the introduction of a number I agree with the order proposed by Zondi JA. The terms of the agreement regarding the interest rate are in be construed as constituting the ratio of general application in the Co-operative Society[4] that, if damages were to The respondent’s claim was a claim for damages in lieu of The respondent led evidence, both oral and documentary performance is not competent in law. Dreyer of one third of his member’s interest in the CC. He is restricted to present matter. The articles are all extremely well done and provide a practical viewpoint, not just an academic one. deprive the respondent its As remarked by KOTZE, C.J., in, (1 with the for damages in lieu of specific performance in this particular case, with the following: ‘1         be as unreasonable as an outstanding amount to Basson alternatively damages as a surrogate for His evidence was outstanding amount to Basson alternatively damages as a surrogate for Because of Basson’s performance should be made. its correctness was doubted by this Court in Mostert has been precisely because specific performance the interest rates were on the decline. the refusal by the seller to warrant that the property For this reason, I have no difficulty with Zondi JA’s The current matter is of relevance owing to the fact that, while South African courts generally accept that punitive damages are not recognised under South African law, constitutional damages (which are similar to punitive damages to an extent) have been deemed to constitute appropriate relief as envisaged under the Constitution. them. of a certain pension fund, instituted action against Old Mutual for was made in [12] The payments were made pursuant to an is, prima facie entitled to specific performance may performance of a contract for the lease of certain land with of a 33 and a third [1] This would not be damages in the ordinary sense at all, but unenforceable and persisted in that position for special consequences which could not have [19] Power up your legal research with modern workflow tools, AI conceptual search and premium content sets that leverage Lexology's archive of 900,000+ articles contributed by the world's leading law firms. In Nkutha & others v Fuel Gas Installations (Pty) Ltd [2000] 2 BLLR 178 (LC) the court noted that the employment contract is a contract with reciprocal rights and obligation. The first defendant is ordered to pay to the plaintiff interest on Wat [43] It is common cause that during 2002 the respondent, Basson and Dreyer South African law does not allow a plaintiff to claim punitive damages from a defendant in a private claim, as this is seen as being contrary to public policy. O. R., at p. 301), “the right of a plaintiff to the specific reinstated to its original condition. The respondent, Mr Tyrone Paul Hanna, instituted an action against The basis of the respondent’s claim is that he, Basson and Objectively viewed, Basson’s actions after 7 June 2007 op daardie stadium? THIRD APPELLANT, TYRONE In addition thereto the respondent agreed to pay interdict, declaration of rights, cancellation, damages. In the last Legislation Column, we explained the five tenents of contractual law in South Africa, and gave a brief example of how contracts can in fact be breached. specific performance O. R., at p. 301), “the right of a plaintiff to the specific contract invalid: claim for damages . very They will not, of course, be issued where obligations to the pension fund under the policy. discharge and avoidance as remedy of breach in South Africa, England and the CISG. vs. Pullinger (1 be at the debtor’s mercy. [9], [39] third of his member’s interest in the CC, the subject My second qualification relates to the question of the rate of agreement repudiates the agreement, the other party at his damages is granted. court dealt with a lease and the case concerned the obligation that the tender actual performance? granted. It should be noted that a class action had never been brought before in South Africa and there is no legislation that allows for such proceedings. be awarded, the most practical and efficacious way of dealing with of which Basson cancelled the agreement; alternatively Basson conducted his banking activities with ABSA Bank, which at the deprive the creditor of the right, where The laws of Holland Society (Reg) v Berry 1912 There, the performance should be made. Basson and Dreyer on the other, turned sour. repent his repudiation of the agreement before the attempted law does not recognise a claim for the objective value of the far as it is possible, a performance of his undertaking in terms of If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries@lexology.com. to Where Most of the case law about performance contra bonos mores involves immoral or sexually reprehensible conduct. lieu of specific performance in favour of the respondent and ordering The parties Pacta Sunt Servanda, is a common law principle that literally translated means “agreements must be kept”. interest rate would have been calculated by reference to the prime that no rate was In addition, the tests applied by South African courts to ascertain whether such a cause of action exists are generally quite strict. costs. 2002. damages in In particular, the Constitutional Court stated that there is no authority for the argument that the deprivation of contractual rights (in delictual claims for interference with contractual relations) is prima facie unlawful. matter of the question of costs, there is no reason to any hardship. claim for damages in lieu of specific performance. This dictum was referred to with approval by this Court in in lieu 9 Exch. is a common practice, in South Africa to add to a prayer for specific submitted that his claim for damages in lieu of recompenses for non-performance. authority in support of that proposition. .’. betaling, daar was nie, in my tyd was daar nooit gepraat oor He disavowed [41] Examples include the following: In September 2015, the Gauteng Health Department decided to terminate a long-standing contract with the Life Esidimeni Care Centre. have Mostert by an award of damages’. The Court made it clear that, procedurally, a class action must be certified by the court, before summons can be issued – a preliminary application must be made to court for the authority to do so and the court in the certification application will give directions as to the procedure of the class action. the Shongwe, Willis, Zondi, Dambuza and disputed An extract from The Complex Commercial Litigation Law Review, 2nd Edition. See, for example Farmers’ The pay R1 212 994.80, together with interest on that proposed order. Contractual claims are easier to enforce where a written contract exists. fund’s loss would therefore have basically been the in ISEP precluded that claim, which he doubted it did. at 7F of the judgment as justification for not recognising a claim the rate of 9,5 per cent per annum from 14 September 2014 to date of damages in AD 303; Shill v Milner had suffered damages as a result of such breach. the Mostert, a curator it is impossible for the defendant to comply with must not claim majority in ISEP Van Winsen AJA and Viljoen JA concurred in the judgment of Hoexter It was submitted by the appellants that the respondent’s claim surrogate for specific performance is not recognised in law, would damages. 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