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625/87 IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION) In the matter between:
ALLAN CULVERWELL First Appellant
CULVERWELL KNYSNA PROPERTIES (PTY) LTD Second Appellant
and
CLAUDIUS HENRY BROWN Respondent
CORAM: CORBETT, CJ, HEFER, VIVIER, EKSTEEN, JJA, NICHOLAS AJA HEARD: 11 May 1989 DELIVERED: 7 September 1989

JUDGMENT HEFER, JA

I have had the privilege of reading the judgment prepared by my brother NICHOLAS. For the reasons stated in the judgment I agree that the claim in reconvention was rightly dismissed. However, since I am unable to support my brother's

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finding that the plaintiff did not prove the damages to which the claim in convention related, I propose stating my own view in this regard.
The claim arose, it will be recalled, from second defendant's repudiation on 6 December 1984 of the agreement of sale. Having resold the property on 15 March 1985 the plaintiff advised the defendants on 18 March 1985 of the acceptance of the repudiation. The evidence is to the effect that the market started falling towards the beginning of 1985 with the result that, when the property was resold, it fetched R30 000 less than the price at which it had been sold to the defendants. In this court defendants' counsel did not challenge the evidence that the price fetched on resale was somewhat higher than the value of the property at the time; nor did he challenge the trial court's finding that there was no undue delay on the plaintiff's part in accepting the repudiation or in reselling the property.
The damages claimed in the claim in convention represent the difference (subject to adjustments not presently

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relevant) between the amount of R210 000 at which the property had been sold to the defendants and the amount of R180 000 at which it was resold. My brother NICHOLAS has come to the conclusion that the trial court should have dismissed the claim in convention since the plaintiff's damages should have been assessed in relation to the value of the property at the time of the repudiation during December 1984 and since there is no evidence of its value at that time. I agree that its value during December 1984 has not been proved but I respectfully disagree with my colleague's view that the damages are to be assessed in relation to the time of the repudiation.
The problem arises, as my brother has indicated, from the fact that the time for performance (ie the passing of transfer) has not been fixed in the agreement. Although the decision in Novick v Benjamin 1972(2) SA 842 (AD) is accordingly not in point I wish to draw attention to certain matters raised in the judgments in that case which do have a bearing on the present question. Firstly, there is the

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fundamental principle referred to in both judgments that the

injured party should be placed, by an award of damages, as far
as possible in the position he would have occupied had the
agreement been fulfilled. Secondly, there is TROLLIP JA's
reference at 860 E-H to the "original" rule that damages for
breach of contract are assessêd in relation to the time of the
breach, and his explanation that the original rule

"was, in effect, saying the same thing as 'at the time of performance', since the two then invariably coincided, it being considered that no such breach could legally occur before the time for performance had arrived."

TROLLIP JA indicated that this is no longer the case since the
concept of an anticipatory breach has become established. I
mention this in view of the statement in many reported judgments
and in textbooks (especially the older ones) that damages for
breach of contract are as a rule calculated in relation to the

time of the breach. Expressing the time element in the

calculation of damages in this manner is not necessarily

incorrect but it does tend to obscure the fact that the

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appropriate time is really the time for performance. Finally I draw attention to TROLLIP JA's observation at 860 C-D that the adverse difference between the contract price and the market value of the res vendita at the time of performance which is usually awarded to the injured party in the case of the breach of a contract of sale, represents the loss that the parties themselves normally contemplated as likely to ensue on such a breach. On this ground TROLLIP JA at 861 C-F rejected MacKeurtan's view that damages should ordinarily be measured at the time of the anticipatory breach.
Having mentioned Novick v Benjamin something should also be said about the cases referred to by the court a quo at 476 F-H of its reported judgment. I do not find the decisions in any of these cases of particular assistance to the solution of the present problem.
Bester v Visser 1957(1) SA 628 (T) and De Lange v Deeb 1970(1) SA 561 (0) were claims for damages arising from the cancellation of an agreement by one of the parties on account of

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the other's non-performance of his obligations. These cases were presumably referred to by the court a quo by reason of the resemblance between an actual breach of contract and a repudiation, in so far as the injured party's election to terminate the agreement is concerned. That there is this resemblance cannot be denied and any discussion of the appropriate time for the assessment of damages in the one type of case may therefore be of assistance in the solution of problems relating to the other type. But there is no discussion either in Bester v Visser or in De Lange v Deeb and the bald statements made therein do not take the matter any further. Equally unhelpful are judgments actually dealing with repudiation but in which the appropriate time for the assessment of damages was not properly considered. Markus & Co v Louw 1930 CPD 123, Serman & Co v Brown and Others 1939 TPD 244, Moyes & McKenzie v Frenkel & Co 1912 NPD 282 and Cooper v Kohn's Produce Aqency Ltd 1917 TPD 184 fall in this category. There are statements in the judgments in these cases to the effect that damages are to be

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assessed "as at the time of the breach" or "on the date of the
repudiation", which sometimes leave one wondering at the precise
meaning of the expression used (of the remark in Novick v
Benjamin (supra) at 862 A-B in regard to Moyes & McKenzie v
Frenkel & Co). Statements like these contribute little to the
inquiry and can hardly be regarded as authoritative
pronouncements on the subject.

Celliers v Papenfus and Rooth 1904 TS 73, as my brother

NICHOLAS has indicated, is another case concerning a seller's
non-performance. Although in this case a reasoned judgment was
delivered the issue was whether the buyer was entitled by way of
damages for non-delivery to the difference between the contract

price and the highest price at which the property could have been

sold between the date of the contract and the date on which it
was cancelled. It is with this in mind that INNES CJ said at 84:

"In the present contract there has been no time fixed for delivery, and I think in such cases that the proper rule is that the buyer should take some action to fix the date at which his damages are to be calculated. He cannot lie by indefinitly, and then, after the lapse

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of a long period of time, go back to the high-water mark of the fluctuation in the value of the property in the interim ... As a general rule it appears to me that the general damage must be calculated at the date when the buyer elects to treat the contract as at an end."

In Whitfield v Phillips and Another 1957(3) SA 318 (AD)

the seller repudiated an agreement for the sale of a pineapple
farm to the plaintiffs who accepted the repudiation and sued the
seller for damages in respect of (1) the loss of crops and (2)
the value of the farm in excess of the purchase price. The

trial court awarded damages under (1). In a minority judgment
on appeal to this court , HOEXTER JA came to the conclusion that
no award under (1) should have been made. The ratio of the
judgment was that the plaintiffs would have been adequately
compensated for their loss of crops on the basis that the spes
of future crops formed part of the value of the farm but that,

since its value had not been proved, the claim under (1) should
have been dismissed. At 324 opposite the letter H the learned

judge said:

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"As a rule the damages for non-delivery of land, in a case in which the buyer has rescinded the sale, are to be measured by the excess of the value of the land over the contract price at the time of rescission."

(From the reference both before and after this passage to
Celliers v Papenfus and Rooth it is clear that it is based on the
decision in that case.) At 325 G-H HOEXTER JA added:

"In my opinion the parties contemplated that, if the defendant failed to deliver Thorn Park to the plaintiffs the latter would exercise their right of electing to enforce or to rescind the contract. If they elected to rescind, as they did in the present case, the parties contemplated that the plaintiffs would be entitled to the true or market value of the farm as at the date of the rescission."
Although these passages clearly support the

respondent's argument in the instant case HOEXTER JA's
observations were not made in the context of the present problem.
The question of the appropriate time for the assessment of
damages did not arise; the issue was whether the plaintiffs were
entitled to be compensated for the loss of crops and the way in
which HOEXTER JA dealt with the issue has already been described.

It is interesting to note that the learned judge related the

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measure of damages (as TROLLIP JA later did in Novick v Beniamin (supra) to the date that the parties themselves had contemplated.
Stephens v Liepner 1938 WLD 95 is the last case mentioned in the judgment of the court a quo. In this case the plaintiff claimed damages arising from the defendant's repudiation of an agreement in terms of which the latter, without fixing a date for performance, had donated shares in a company to the plaintiff. It was alleged in the declaration that the plaintiff had accepted the repudiation and that the damages represented the value of the shares at the date of the acceptance. On exception to the declaration SOLOMON J ruled that the date of the repudiation (not the date of the acceptance thereof) was the correct date for the assessment of the damages and upheld the exception. It must be pointed out, however, that there was an allegation in the declaration that the donee had demanded delivery of the shares and that the demand had been refused by the donor who had at the same time repudiated his

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obligation. This being the case SOLOMON J said at 96:

"In this case demand was made and refused. Thus the breach of contract by the defendant need not be looked for: it is apparent."

The donor had been placed in mora by the demand and the case was
decided on the basis of an actual breach. In an obiter dictum
at 98 SOLOMON J said:

"Indeed the reasoning in (Celliers v Papenfus and Rooth) is strongly against the contention of the present respondent that, after repudiation of the contract by the excipient on August 20th, he had the right to withhold his acceptance of the repudiation for over two months, thereby perhaps substantially increasing the amount of his claim for damages. There is abundant authority that the court will not allow such a proceeding."
Presumably because it found itself unable to decide the

present case on authority the court a quo decided it on
principle. For convenience I quote the relevant passage from
FRIEDMAN J's judgment at 477 A-D. Itvreads as follows:

"The purchaser's wrongful repudiation does not per se bring the contract to an end. The seller is not obliged to accept it immediately; he has an election and may take a reasonable period of time in order to

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decide whether to accept the purchaser's repudiation. During that time i e until he has exercised his election, it is open to the purchaser to retract his repudiation and tender performance of his obligations. It is only when the seller has exercised his election to accept the repudiation that the contract is cancelled. Only when the date of cancellation has been crystallised can any question of damages arise. It would be entirely artificial in a case such as this to assess the plaintiff's damages by reference to an anterior date, viz the date of repudiation, on which date the contract was still alive and no claim for damages had yet arisen. It seems, moreover, that those cases in which it has been held that the decisive date is the date of repudiation have proceeded on the unwarranted basis that the innocent party is obliged to accept the repudiation immediately, which is clearly not so."
No fault can be found with FRIEDMAN J's exposition of

the law relating to repudiation. A repudiation, as was once
said, is "a thing writ in water" (per ASQUITH LJ in Howard v
Pickford Co Ltd (1951) 1 KB 417 at 421; see also HMBMP Properties

(Pty) Ltd v King 1981(1) SA 906 (N) at 910 B-D). It merely
affords the injured party an election to terminate the agreement
by accepting the repudiation (Nash v Golden Dumps (Pty) Ltd

1985(3) SA 1 (AD) at 22 D-F), and unless and until that happens

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the repudiator's obligation to perform and the other party's right to receive performance remain wholly unaffected. The latter is not obliged to decide whether to accept the repudiation immediately but is allowed a reasonable period of time to consider and exercise his election (Seqal v Mazzur 1920 CPD 634 at 644, Potgieter and Another v Van der Merwe 1949(1) SA 361 (AD) at 372; Mahabeer v Sharma NO and Another 1985(3) SA 729 (AD) at 736 E-H).
These principles are trite and it will be noticed that my brother NICHOLAS does not question any of them. What he does question, is their relevance to the determination of the appropriate date for the assessment of damages. There is not necessarily a connection, he says, between the date of cancellation of a contract and the measure of damages for the breach of it. Moreover, immediately upon repudiation, the injured party's cause of action for damages is complete; he may immediately issue summons since the summons itself may be a binding announcement of his election to accept the repudiation.

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Although there is force in my colleaque's reasoning I am, with respect, not prepared to adopt it. It is correct that there is not necessarily a connection between the date of the cancellation of an agreement and the measure of damages for its breach. But it does not follow that the date of cancellation is irrelevant to the enquiry when in a case where a time for per-formance has not been stipulated, the appropriate date for the assessment of damages is being sought. In such a case two dates suggest themselves for consideration - the date of the repudiation and the date of the acceptance. The court a quo preferred the latter, as I understand the judgment, not simply because that is the date on which the agreement was terminated or because the date of termination is necessarily the appropriate date, but because it would be entirely artificial to relate the assessment to a time when the agreement was still in existence and a claim for damages had not yet arisen. I agree with this view. The real thrust of the argument is the artificiality of an assessment with reference to a time when a claim for damages

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has not arisen. That such a claim does not arise at the time of repudiation is plain. After all, the injured party may elect to ignore the repudiation and to press for performance at the appropriate time. In that event a claim for damages can obviously not be maintained, except as an alternative to a claim for specific performance, and then only in the event of the repudiator's failure to comply with an order for performance (Custom Credit Corporation (Pty) Ltd v Shembe 1972(3) SA 462 (AD) at 469 F - 471 E). My brother NICHOLAS says that the injured party's cause of action is complete immediately upon repudiation since, although his decision to accept the repudiation is wanting at that stage, the summons itself may be an announcement of his election. There is authority for this proposition (although cer-tan dicta in Magnet Motor Co v Bernstein 1929 TPD 431 at 434 seem to point the other way) and for the sake of the present argument I am prepared to accept it. But, even on this approach, the injured party's election is still required. It cannot be gainsaid that, as a matter of principle, a claim for damages does

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not arise until the repudiation is accepted.
The artificiality of an assessment which relates the damages to the time of repudiation is manifest; Indeed, bearing in mind the effect of a repudiation as described above and particularly that it does not by itself give rise to a claim for damages, it is difficult to see what relevance it has to the measure of damages. The application of the principle that the injured party is to be placed in the position he would have occupied had the agreement been fulfilled, entails a comparison between that notional position and the actual position ensuing on its non-fulfilment. What the position is immediately upon repudiation seems to be entirely irrelevant since that is not the position in which the injured party may finally find himself. His final position depends upon the way in which he exercises his election and can only be determined once he has elected to accept the repudiation. That this is so becomes plain once it is realized that the reasonable period of time that the injured party must be allowed to consider his election, may turn out to

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be of quite considerable duration and that substantial fluctuations in the value of the subject matter of the contract may occur in the interval between the repudiation and the acceptance. This is what happened in the present case and what may also happen in a case where the seller is the repudiator and the market is rising. Considering that the injured party's position may change dramatically after the repudiation it appears, therefore, that the comparison cannot properly be made until his final position can be assessed.
That the injured party is allowed a reasonable period of time to consider his election seems to have been overlooked in the obiter dictum in Stephens v Liepner referred to earlier. In his unpublished thesis Anticipatory repudiation in English and South African Law of Contract at 551 Dr P M Nienaber (now NIENABER J) comments as follows on the view expressed in that case:

"Indeed, to maintain that on acceptance of the

repudiation the damages are to be fixed retrospectively to the date of repudiation really amounts to this that

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the innocent party is deprived of any, let alone a reasonable time, to make up his mind whether or not to accept the repudiation because every moment he delays may prejudice him in the amount of damages recoverable."

This is indeed so. My brother NICHOLAS accepts that the injured
party may temporise for a reasonable period but says that he
cannot do so at the risk of the other party. But, with respect,

I fail to see how effect can be given to the right to delay the
decision unless the defaulting party is to bear the risk; and,
even if it were possible to do so, I fail to see why the injured
party should temporize at his own risk. My colleaque's objection

is to the injured party being at liberty to speculate at the risk
of the other party. I do not regard reasonable delay in taking
a decision whilst considering the position as speculation. The

injured party does not normally delay his decision with a view

to await possible fluctuations in the market or to select the
best possible date for accepting the repudiation; what is

normally considered, is not the time of the acceptance but
whether the repudiation should be accepted at all.

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A further objection raised by my colleaque is that the

date of acceptance is an arbitrary one within the sole control
of the injured party. I agree that this is so, but the same
reasoning applies to the date of repudiation which is an equally
arbitrary one within the sole control of the repudiator. Dr
Nienaber says appositely in his thesis (supra) at 551 about the
decision in Stephens v Liepner:

"In view of the Court's reluctance to afford the innocent party the opportunity of choosing the most propitious moment for assessing the damages, it does strike one as strange that the Court adopted the date of the repudiation, since in effect this permits the guilty party in a fluctuating market to dictate the time for the fixing of the damages."
Having carefully considered my colleague's criticism

of the judgment in the court a quo and the argument addressed to
us on the defendants' behalf I have not been persuaded that
anything said in the passage at 477 A-D quoted above can be
faulted. It seems to me that the application of the ordinary
rules relating to repudiation and the acceptance thereof, coupled
with the fundamental principle that the innocent party is to be

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placed as far as possible in the position he would have occupied had the agreement been fulfilled, inevitably leads to the conclusion that the damages cannot, in a case like the present one, be appropriately assessed in relation to the time of the repudiation.
It does not follow, however, that the assessment should in all cases of an accepted repudiation be made in relation to the time of the acceptance. In cases eg where the res vendita is resold or similar goods repurchased it would often be inappropriate to do so. In such cases the resale or the repurchase itself may, of course, be regarded as a tacit acceptance but cases do occur where it is preceded by an express acceptance. In that event, provided there is no undue delay either in the acceptance or in the resale or repurchase, it is the price fetched on resale or paid for similar goods in the market that has to be taken into account. This principle has been established in a long line of cases. It was stated as follows by DE VILLIERS CJ in Wolff & Co v Bruce, Mavers & Co

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(1889) 7 SC 133 at 135:

"If the purchaser repudiates the sale, the seller is in the position of an ordinary party to a contract which has been broken by the other party, and he may sue for damages for the breach. It would be a nugatory act for the seller to tender the thing sold after the purchaser has repudiated the sale altogether. What then is the seller to do? If he keeps the thing sold until the purchaser is willing to take it, the thing may deteriorate in quality or in price and the purchaser may become insolvent. In self-protection, therefore, he re-sells the thing in order to avert the risk of loss from deterioration, fall in the market, or insolvency. Such.a re-sale cannot debar him from recovering damages which he has sustained through the purchaser's breach of contract. If the nett price realised by the sale exceeds the original price, he, of course, sustains no damage, but, if it be less, the difference represents the loss sustained by him, and the difference he is, in my opinion, entitled to recover. After crediting the purchaser with the proceeds of the re-sale, the seller really recovers no more than the purchase price, but he recovers it by way of damages for breach of a contract which the seller has repudiated."

There are many other cases in which the injured party's right to resell or to buy similar goods was recognised. (See eg Dennill v Atkins & Co 1905 TS 282 at 289, Oellermann v Natal Indian Traders Ltd 1913 NPD 337, Chapman v Dwor 1921 CPD 433,

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Bremmer v Ayob Mahomed & Co 1920 TPD 303 at 305,306,307, Kaplan & Co v Basel Bros 1931 CPD 457 at 463, Central Produce Co v Hirschowitz 1938 TPD 350 at 357 to mention only a few of the better known ones.) From all these cases the principle can be extracted that the difference between the contract price and the price ruling on the date that the property is resold or similar property is bought, can be recovered by way of damages provided that there is no undue delay in reselling ór repurchasing. This principle is so firmly established that it was said in Cooper v Kohn's Produce Agency Ltd (supra) at 186 that

"... the rule is that the damages are assessed according to the price ruling at the earliest date on which they could be sold."

(See also Serman & Co v Brown and Others (supra)) at 248-249).

In the present case the plaintiff resold the property and is seeking to recover the adverse difference between the contract price and the price fetched on resale. There was no

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undue delay on the plaintiff's part in reselling and the property was resold at a price in excess of its current market value. It is clear, in my view, that his claim was rightly allowed. The appeal is accordingly dismissed with costs.

J J F HEFER, JA

CORBETT CJ ) VIVIER JA ) Concur EKSTEEN JA )

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