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/SG

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

DATE: 21/10/2005

CASE NO: 28427/2004

UNREPORTABLE

In the matter between:

DADELVLAK BOERDERY PLAINTIFF

And

BOSCHRAND PROPERTY

HOLDINGS (PTY) LTD 1^ST DEFENDANT

WILLE DAVID COLLINS 2^ND DEFENDANT

JUDGMENT

PATEL, J

[1] The plaintiff is suing the defendant for damages arising from an alleged breach and repudiation of an agreement of settlement to repair a dam wall. The plaintiff accepted the repudiation and cancelled the agreement.

[2] The defendant raises certain objections to the plaintiff’s particulars of claim. The first two are exceptions in terms of rule 23(1) and the third is that the particulars of claim fall to be set aside, in terms of rule 30(1), as an irregular proceeding.

[3] In excepting to the plaintiff’s particulars of claim, the defendants contend that the particulars are vague and embarrassing because they do not provide sufficient detail to enable them to determine whether the plaintiff has a claim for damages if the allegations it makes are proven and if so how such damages are to be quantified. They also contend that the particulars fail to disclose a cause of action because the claim, while framed as an action for damages for breach of an agreement, is ostensibly a claim for costs of performance of the alleged agreement and the law does not recognise such a claim. Furthermore, the defendants contend that the particulars constitute an irregular proceeding since they lack the particularity required by rule 18 because they do not contain a clear and concise statement of the material facts upon which the plaintiff relies for its claim with sufficient particularity to enable them to reply alternatively do not set out the damages in a manner to enable them reasonably to assess the quantum.

[4] Mr Chaskalson, for the defendants argued, that the plaintiff’s claim purports to be a claim for damages for breach of an agreement but in essence the claim is quantified with reference to the cost of performance of the argument. Clause 2 of the agreement states:

“Tweede verweerder onderneem om die dam wat die onderwerp van die aksie vorm te herstel volgens die ontwerp en spesifikasies soos uiteengesit in aanhangsel ‘A’ hiertoe.”

The costing of the work together with specifications is enumerated in annexure “A” and represents a total of R1 162 429.00.

[5] However, the plaintiff pleaded an alleged breach and repudiation of the agreement. It alleges in paragraph 18 of the amended particulars of claim that:

“As gevolg van die Eerste Verweerder se kontrakbreuk en repudiasie van die skikkingsooreenkoms deur die Eerste Verweerder het die Eiser skade gely in die bedrag van R1 162 429.00 (uitgesluit belasting op toegevoegde waarde) synde die redelike en billike koste vir die herstel van die Dadevlakdam, soos uiteengesit in Aanhangsel ‘E’ hiertoe.”

[6] Although annexure “E” is headed “SCHEDULES OF QUANTITIES” but the work to be done and the specifications in every respect is identical in detail what appears in to annexure “A”. There is no material difference whatsoever in information contained in both the annexures. Mr Chaskelson submitted that the formulation of the plaintiff’s claim as an action for damages is in tension with the way in which damages are quantified in the claim as costs of performance. This critical ambiguity in the claim renders it vague and embarrassing.

[7] For the plaintiff, Mr Cilliers contended that the plaintiff’s claim is for damages flowing from the breach and repudiation of the agreement and the cancellation subsequent to that by the plaintiff. Counsel submitted that in a claim for damages by a plaintiff where the breach of an agreement was committed by the defendant, the damages are measured by way of comparing the position he is in to the position in which he would have been had the agreement been fulfilled by the defendant. In support of this submission Mr Cilliers referred to the following dictum by INNES CJ in Victoria Falls & Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd 1915 AD 1 at 22:

“The sufferer by such a breach should be placed in the position he would have occupied had the contract been performed, so far as it can be done by the payment of money, and without hardship to the defaulting party.”

[8] But the dam is an immovable object and it attaches to the land on which it is constructed. The plaintiff is not the owner of the farm Dadevlak. It asserts its claim to damages for the costs of repairing the dam on the basis of its incorporeal interest by alleging that:

“Te alle tye relevant hiertoe, het die Eiser die risiko van wins en verlies in die Dadevlakdam gehad.“

[9] It is manifestly apparent that the plaintiff bases its claim for damages exclusively on its incorporeal interest and not on ownership of the dam. It must show how the alleged breach in repudiation on which it found its claim affects the value of its incorporeal interest. Mr Cilliers submitted that since the plaintiff is not the owner, it only carries the risk of profit and loss and concomitantly must assume that it is damages of the costs of performance. This submission is flawed since it is precisely because the plaintiff is not the owner and that one cannot simply assume that it is damages of the costs of performance. In Swart v Van der Vyver 1970 1 SA 633 (AD) it was pointed out the problems of regarding the costs of performance as an indicator of contractual damages and in ISEP Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co (Pty) Ltd 1981 4 SA 1 (AD), the Appellate Division drew a clear distinction between a claim for damages and a claim for costs of performance and the two cannot be equated.

[10] Assuming that it is a claim for damages then it is manifestly deficient in particularity. The plaintiff sues on the basis of an alleged repudiation or breach of a contract for the repair of the dam. It quantifies its claim exclusively with reference to the costs of repair of the dam as particularized in the contract itself. It does not allege that it is or was the owner of the dam. There are no allegations as to who owns the immovable property on which the dam is situated, what the risk of profit and loss in the dam embraced, the basis upon which the plaintiff came to acquire this risk of profit and loss from the owner of the dam. The nature of the plaintiff’s interest in the property determines whether it has an action for damages for the alleged failure of the first defendant to repair the dam, and if so, how the quantum of such damages is to be established. Thus, while an owner of property may be entitled to sue for the cost of repairs as his damages, the same is not true of a fiduciary or a tenant. [Swart v Van der Vyver, supra; ISEP Structural Engineering and Plating (Pty) Ltd v Inland Exploration Co (Pty) Ltd, supra]. Without the relevant particularity of the source of the plaintiff’s interest in the risk of profit and loss in the dam, what this risk of profit and loss embraced, and how the alleged failure of the defendants to repair the dam affected this risk of profit and loss, the defendants cannot reasonably assess whether the plaintiff has a claim for damages for the alleged breach by the first defendant, and how any such claim should be quantified. The particulars of claim lack any allegations from which the defendant can assess how the patrimony of the plaintiff has been affected by the alleged failure of the defendant to repair the dam. Without such particularity, the particulars fail to meet the requirements of rule 18(10).

[11] Moreover, if the plaintiff acquired this risk of profit and loss in the dam pursuant to contract, then it was obliged in terms of rule 18(6) to provide details of the parties to the contract and the date and place on which such a contract was concluded, to state whether it was a written or oral contract and to attach a copy of thereof to the particulars of claim if it was a written contract. This the plaintiff has failed to do. [See rule 18(6); SAR & H v Deal Enterprises (Pty) Ltd 1975 3 SA 944 (W); Blom and others v Anglo American and others (unreported judgment of, WLD case no 18267/04, 24 June 2005). Similarly, if the plaintiff acquired the risk of profit and loss from the owner of the dam otherwise than pursuant to contract, then by virtue of the general particularity requirements of rule 18(4) the plaintiff is required to provide details of any non contractual basis upon which it may have acquired this risk of profit and loss.

[12] However, Mr Cilliers relied upon the decision in Schmidt Plant Hire (Pty) Ltd v Pedrelli 1990 1 SA 398 (D&CLD), where a dam wall had to be repaired and it broke. An action for damages was instituted and the damages were formulated in these alternative ways. The second alternative formulation of the claim in reconvention was one for damages alleged to have been suffered as a result of the collapse of the dam wall which the plaintiff had contracted to build for the defendant. FINDLAY AJ in awarding to the defendant the costs of repairing the dam wall, stated, at 419C/D-G, that:

“Considerable logical support is also to be found in English cases where reinstatement cost as damages has been allowed on the footing that, if there is no substitute available and no reasonable alternative can be provided, a plaintiff should be entitled to the cost of repair even if this might exceed the diminution in value of the property, particularly since a building or structure is not an article of property which might be easily replaced as is the case with a second hand motor vehicle (Hollebone v Midhurst and Fernhurst Builders Ltd [1968] 1 L1 LR 38; Harbutt’s Plasticine Ltd v Wayne Tank and Pump Co Ltd [1970] 1 All ER 225 (CA); Ward v Cannock Chase District Council [1985] 3 All ER 537 (Ch).

Such an approach supports application of the existing rule inasmuch as the principle is to ensure that the innocent party obtains what he bargained for (albeit that this may be translated into a monetary equivalent as damages). The fact that the costs of remedial work might exceed the diminution in value or even the whole value may well be due to increase in costs occasioned by the passage of time (resulting from escalation in cost or the eroding of the real value of money). This does not necessarily, in my view, do violence thereto because a contract such as the present involves the erection and creation of a substantial immovable structure which, if defective, cannot simply be replaced by a readily obtainable substitute in the open market.”

Suffice to say, I am not persuaded that that decision is correct because the law does not recognise a claim for the costs of performance [ISEP Structural Engineering and Planting (Pty) Ltd v Inland Exploration Co (Pty) Ltd, supra.]

[13] Assuming the claim is not a claim for damages, but it is a claim for the cost of performance of the contract, then it is sufficiently particularized but that does not assist the plaintiff since it does not disclose a cause of action by virtue of the fact that the law does not recognize a claim for the cost of performance.

[14] In conclusion, the plaintiff’s claim is not only vague and embarrassing, but it certainly fails to disclose a cause of action. In the circumstances, the following order is made:

(a) The exception to the plaintiff’s particulars of claim is upheld with costs.

(b) The plaintiff’s particulars of claim are set aside and the plaintiff is given leave to file amended particulars of claim within thirty days from the date of this order, failing which its action will be dismissed with costs;

E M PATEL

JUDGE OF THE HIGH COURT

28427/2004

HEARD ON: 17/08/2005

FOR THE PLAINTIFF: ADV CILLIERS

INSTRUCTED BY: MESSRS DE SWARDT VÖGEL MAHLAFONYA

FOR THE DEFENDANTS: ADV CHASKALSEN

INSTRUCTED BY: MESSRS NICHOLLS CAMBANIS & ASS

DATE OF JUDGMENT: 21/10/2005

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