---

REPUBLIC OF SOUTH AFRICA
IN THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
In the matter between:
GRAND MINES (PTY) LTD    APPELLANT
and
TREVOR GIDDEY NO         RESPONDENT
CORAM: SMALBERGER, NIENABER, HOWIE,
SCHUTZ JJA et NGOEPE AJA
HEARD: 3 NOVEMBER 1998
DELIVERED: 23 NOVEMBER 1998
JUDGMENT
2 SMALBERGER JA:
("Bercon"), a company carrying on mining activities, addressed a letter
to the appellant ("Grand Mines"), the owner of a colliery, the relevant
portions of which read:
"OPENCAST PIT MINING AT YOUR NORTHFIELD COLLIERY - BRONKHORSTSPRUIT
We thank you for the opportunity to tender for the
abovementioned contract and submit our offer as follows: 1. RATE:
The rate is R14,00 per R.O.M. ton delivered
to stockpile at your screening plant on the
mine.
The above rate was calculated as follows:
a)       Ratio of not more than 2:1 (2M3 overburden to 1 ton of coal).
b)       Drill and blast of not more than 50% of overburden.
The above rate includes: 1) Removal of hard and soft overburden to reclaim area.

2. MEASUREMENT:
This will be as follows:
a)       Ground levels on top of hard rock.
c)       Ground levels on top of coal.
5 PAYMENT:
5 due to Bercon by Grand Mines for coal mined and delivered. Various
defences to the action were raised. The matter eventually came before
McArthur J. At the pre-trial conference the quantum of the respondent's
claim was settled. It was agreed that the value of the coal delivered by
Bercon to Grand Mines in terms of the agreement which remained
unpaid amounted to R290 000.00. At the conclusion of the trial the
learned judge found for the respondent in that sum plus interest and
costs. Grand Mines was subsequently granted leave to appeal to this
Court.
Before dealing with the issues on appeal something needs to be
said about opencast mining and what it entails. As the name implies, it
takes place in open pits, the size of which can vary in terms of length,
width and depth. There was evidence of a previous pit at the colliery in

6 question being about 400 metres long, 80 metres wide and 20 metres
deep. Mining commences, according to the evidence, with a cut which
is initiated by the removal of the topsoil. The topsoil is put aside for
later use when the rehabilitation process in respect of the cut is
completed. Rehabilitation is a normal concomitant of mining. To
rehabilitate in this sense is "to restore to a previous condition; to set up
again in proper condition" (Shorter Oxford English Dictionary, Vol II,
p 1784, s.v. "rehabilitate"). More will be said on this topic later. The
next step is the removal of the overburden in order to reach the coal
seams. The coal is then taken out and delivered to the screening plant.
When all the coal in that particular cut has been mined, a new cut is
opened. The overburden of the new cut is placed in the hole left by the
previous cut in order to fill it up, and the topsoil of the previous cut

7 replaced to complete the rehabilitation of the area filled in. In this way
mining proceeds cut after cut. When the mining of the final cut has been
completed the overburden from the original or first cut should be
available for filling up the last hole.
Clause 1(3) of the agreement provided that Hereon would effect
"reclamation of pit mined by ourselves". The parties are agreed that the
word "reclamation" is synonymous with "rehabilitation". The obligation
to rehabilitate, which primarily rested upon Grand Mines as the colliery
owner, was therefore contractually undertaken by Bercon. In terms of
sec 68(2) of the Minerals Act 50 of 1991, regulations made under the
Mines and Works Act 27 of 1956 remain in force until amended or
repealed. Chapter 5 of the mining regulations current at the time of the
agreement (see Government Notice R 537 of 21 March 1980) provided

8 in respect of rehabilitation:

It is common cause that the rehabilitation Bercon undertook and was
obliged to do had to be done, inter alia, in accordance with the
requirements of the then applicable mining regulations. It therefore had
to be done "as far as is practicable" (which I take it to mean "as far as is
reasonably practicable") concurrently with the mining operations that

9 were being carried out.
The agreement was one of unspecified duration. According to the
evidence it had the potential, at the time of its conclusion, to extend for
a period of up to twenty years. Rehabilitation is an ongoing process
which was intended to continue over the currency of the agreement. In
the nature of things rehabilitation of a particular area cannot take place
while coal is still being removed from that area. Rehabilitation of a pit
can only be completed once the mining of the pit has ceased. There
must inevitably be a lapse of time between the mining and delivery of
coal to the screening plant and the rehabilitation of the affected area.
The period involved would depend upon factors such as the size of the
coal seam being worked and the quantity of coal to be removed. It is
conceivable that weeks could go by without rehabilitation being

10 possible. Rehabilitation might also be subject to certain priorities. For
example, in the winter months, as the evidence establishes, the emphasis
would be placed on the mining of coal to satisfy increased demand rather
than rehabilitation, with the result that rehabilitation would (at least
temporarily) fall behind. In addition there was no programme of
rehabilitation, either agreed between the parties or laid down by the
Inspector of Mines, in terms of which Bercon was required to operate.
In the absence of such a programme, while rehabilitation remained a
contractual obligation, the performance of such obligation permitted of
considerable flexibility and latitude. The parties, because of their active
involvement in the mining industry, would have been alive to these
considerations, or would have anticipated them, when the agreement was
entered into.

12 The mere non-performance of an obligation would not per se permit of
the exceptio; it is only justified where the obligation is reciprocal to the
performance required from the other party. The exceptio therefore
presupposes the existence of mutual obligations which are intended to
be performed reciprocally, the one being the intended exchange for the
other (Wynns Car Care Products (Pty) Ltd v First National Industrial
Bank 1991(2) SA 754 (A) at 757 E - F; ESE Financial Services (Pty)
Ltd v Cramer 1973(2) SA 805 (C) at 809 D - E). Furthermore, for the
exceptio to succeed the plaintiff's performance must have fallen due
prior to or simultaneously with that demanded from the defendant
(M rsner v Len 1992(3) SA 626 (A) at 633 J). Whether or not
obligations in terms of a contract satisfy these requirements and are
reciprocal in the above sense (being the strict sense in which the word

13 is used in this judgment) is ultimately a matter of interpretation.
Provided the requirements for the exceptio are met, it may equally be
invoked in a contract where provision is made for periodic performance
or performance in instalments (Motor Racing Enterprises (Pty) Ltd (in
liquidation) v NPS (Electronics) Ltd 1996(4) SA 950 (A) at 961I - 962
A).
Counsel for the parties were agreed that only two issues fell to be
determined on appeal. The first, broadly stated, is whether Grand
Mines's obligation to pay for coal delivered by Bercon was reciprocal
to Bercon's obligation to rehabilitate. If it was, the accepted finding of
the court a quo that Bercon was in breach of its obligation to rehabilitate
would defeat Bercon's claim. The second related to whether it was a
tacit term of the contract between the parties that in the mining process

14 no "pillars of coal" were to be left behind by Bercon and, if so, whether
the performance of Bercon's obligation in this regard was reciprocal to
the obligation of Grand Mines to pay for coal delivered. I shall deal
with each of these in turn.
The resolution of the first issue depends upon the proper
interpretation of the agreement. As its terms reveal, it is a contract of
letting and hiring (locatio conductio operis). The principle of
reciprocity would normally apply to such a contract unless there are
indications to the contrary (BK Tooling (Edms) Bpk v Scope Precision
Engineering (Edms) Bpk 1979(1) SA 391 (A) at 418 B - C). The
overriding consideration is the intention of the parties. Whether in the
present matter the performance of the respective obligations of Grand
Mines and Bercon, or some of them, was reciprocal, therefore depends

15 upon their intention as evident from the terms of their agreement seen in
conjunction with the relevant background circumstances (Rich and
Others v Lagerwey 1974(4) SA 748 (A) at 761 E - 762 A; van Rensburg
en Andere v Taute en Andere 1975(1) SA 279 (A) at 303 C - E.)
Clause 1 of the agreement provided that the quoted rate (R14,00
per R.O.M. ton) for coal delivered by Bercon to the screening plant at
the colliery included (1) the removal of hard and soft overburden, (2) the
removal of coal seams and the delivery of the extracted coal (the
performance of both these obligations being clearly reciprocal to Grand
Mines's obligation to make payment) and (3) rehabilitation of any pit
mined by Bercon. The rate, being a composite one, must be taken to
have made provision for the anticipated cost to Bercon of rehabilitation.
The evidence provides no basis on which the cost of such rehabilitation

can be calculated separately or as a percentage of the overall rate. In this
17 month".
The effect of the agreement was that Grand Mines was obliged, on
the 25^th of each month, and on presentation of an invoice, to pay, at the
stipulated rate, for all coal mined, measured and delivered by the 25^th of
the preceding month. Its obligation to pay was fixed both in relation to
a date and a formula, and the amount payable by it was readily
ascertainable. Payment due was calculated according to the tonnage of
coal delivered - the extent to which rehabilitation had taken place did not
enter into the equation in determining payment. By contrast,
rehabilitation was an ongoing process permitting of a degree of
flexibility and latitude, to be conducted in phases, with no dates,
schedules or any other specific criteria laid down for or regulating its
performance. The circumstances of opencast mining are such that, to the

18 knowledge of the parties, rehabilitation of the area in respect of which
coal was removed and delivered, and payment called for, could not
always have preceded or occurred simultaneously with the time fixed for
payment. Furthermore, given the nature and requirements of
rehabilitation, practical difficulties could be anticipated in attempting to
establish from month-end to month-end (as defined) whether
rehabilitation was up to date. In short, while there was an agreed
formula correlating mining and delivery of coal with payment there was
no corresponding formula governing the relationship between
rehabilitation and payment suggesting that the performance of the one
was intended to be in return for the other. Having regard to these
considerations I am of the view that the parties, notwithstanding the
bilateral nature of their contract and the degree of inter-dependence

between payment and rehabilitation, could not have intended that they
agreement to have required Bercon, on threat of cancellation, to carry
It follows that the appeal in relation to the first issue fails.
21 Bercon's mining operations, the purpose of such a wall was to reduce
water seepage into a cut. Whether or not that is so, the wall was the
consequence of the mining technique employed by Bercon. The work
performed by Bercon in terms of the agreement had previously been
done for Grand Mines by Master Diggers (Pty) Ltd (a company
effectively controlled and run by McGee). It is common cause that
Master Diggers had operated in exactly the same way, also leaving walls
of coal. Bercon simply carried on where Master Diggers had left off.
Grand Mines had not previously objected to this method of mining.
While it may have been inappropriate, it was not an impermissible
method of mining. It was clearly in Bercon's own interests to mine in
a manner designed to produce as much coal as possible.
A tacit term is an unexpressed provision of a contract which

22 derives from the common intention of the parties, as inferred by the
court (Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial
Administration 1974(3) SA 506 (A) at 531). If walls of coal were a
cause for concern to Grand Mines, one would have expected them to
insist upon an express term in the agreement prohibiting such walls
being left, all the more so because the mining procedures of the past
were likely to be repeated in the future. The absence of an express term
in the circumstances tends to negate any suggestion that Grand Mines
required such a term, or had such a term in mind. Significantly, in the
letter of demand dated 21 May 1993 no reference is made to any such
term, or that it had been breached. But even if it may have been
reasonable from Grand Mines's point of view to have required such a
term, it cannot confidently be said that the term was one which Bercon

23 would have agreed to had the matter been raised by the officious
bystander, bearing in mind the way Bercon went about its mining
business. Nor would such a term have been necessary to give business
efficacy to the agreement. The evidence establishes that some coal
wastage was inevitable; and, as I have pointed out, it was in Bercon's
interest to minimise any coal loss. In the result a tacit term as contended
for by the appellant cannot be inferred, and the appeal must fail on the
second issue as well.
There remains for consideration a disputed item of costs. The
parties were represented at the trial by junior counsel only. On appeal
senior and junior counsel appeared on behalf of the respondent, and he
seeks the costs of two counsel. New counsel, a senior, appeared for the
appellant, but without a junior. The respondent acts in a representative

24 and fiduciary capacity. Once leave to appeal was granted it was
probably a wise precaution to engage the services of a senior counsel.
A substantial amount is at stake. The matter was not free from
difficulty, as evidenced by the fact that this Court has been unable to
reach unanimity on the outcome of the appeal. In the result the
employment of two counsel was justified.
The appeal is dismissed, with costs, such costs to include the costs
of two counsel.

NIENABER JA ) HOWIE JA )concur NGOEPE AJA )

REPUBLIC OF SOUTH AFRICA
CASE NO.183/97
IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
In the matter between
GRAND MINES (PTY) LTD    APPELLANT
AND
TREVOR GIDDEY NO         RESPONDENT
BEFORE: SMALBERGER, NIENABER, HOWIE, SCHUTZ JJA
and NGOEPE AJA
HEARD:   3 NOVEMBER 1998
DELIVERED: 23 NOVEMBER 1998
2 JUDGMENT
SCHUTZ JA:
3 background factors are the ground itself, opencast coal mining practices, and the
mining legislation. The relevant regulation reads:
"5.12.2 Rehabilitation of the surface at any opencast mine shall form an intergral part of the mining operations and shall, as far as
and, where applicable, in accordance with a programme laid down by the Inspector of Mines . ..." (Own emphasis).
4 description.
After the area for the first cut had been selected, the topsoil would be
removed and placed separately on one side. Then the remaining overburden
would be removed. In the case only of the first cut this also would be put on one
side, to be retained to fill the very last cut at the end of mining operations. The
next step would be to mine and remove the coal. In all subsequent cuts the topsoil
would again be put on one side, but the next layer of overburden would be slid or
dozed or carried into the cavity left by the previous cut. This step, together with
the dumping into the cavity of the rejects from the coal grading plant, would
largely constitute the reclamation. All that remained was to bring back the topsoil
and level it. Coal would then be mined from the second cut. And so mining and
reclamation would proceed, as required by the regulations, "concurrently." It is
all simple enough. Moreover, had this system been properly applied, I fail to see
that there would have been great difficulty in judging whether reclamation was

5 keeping pace with mining or, if it was falling behind, in estimating the extent of
the shortfall with some accuracy upon the deficit becoming apparent.
Bercon did not consistently mine in the manner explained. Montano
described Bercon's conduct thus, "because they did not follow the right mining
procedure, they were actually moving sand all over the place, they were mining
like chickens, scratching all over a particular pit." He went on to describe how
their methods entailed moving material back and forth unnecessarily. One of the
things that he criticised particularly was their practice of filling a cut with
material obtained elsewhere than from the next cut, thus frustrating the orderly
progression from cut to cut with a minimum of shoving and hauling. On the
evidence it was the adoption of these measures by Bercon, unmitigated by decisive
corrective steps, that led to a mounting backlog of reclamation, which in the end
assumed such proportions that Montano considered that it would be necessary to
call in a surveyor to measure the extent of it.

6 The first question is whether at least a part of Bereon's obligation to reclaim
had become due by May 1993, when the payment of the price claimed in this
litigation became due in terms of clause 5 of the agreement, due subject, of course,
to the availability of the appellant's defence. I say at least a part because a part
would be sufficient. That is so because a plaintiff faced by the exceptio cannot
escape it otherwise then by full performance: BK Tooling (Edms) Bpk v Scope
Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A) at 419 G. Unlike the
payment of the price, no express date has been specified for performance of
reclamation works. But they must be performed as an integral part of and
concurrently with mining. How this should be done has been explained. It
follows from that explanation that there is no immediate correspondence in time
between the delivery of a particular load of coal and the restoration of the surface
that once lay above it. In fact there is an interval, at times probably a considerable
interval. But once the bed of coal in a particular cut has been removed, it will not

7 be long afterwards that it begins to be filled with overburden from the next cut.
And once this step has been completed, the demands of concurrency require that
not long after that, the topsoil should be restored. The result of all this is that
shortly after all the coal from a cut has been removed the obligation to commence
restoration of the cavity from which it has been taken arises. Within a further time
of no long duration reclamation will have to be completed. This means that the
dates for reclamation march in step a few paces behind the dates on which coal is
delivered. The calculation of the payment dates is based on these latter dates. The
further result is, therefore, that there is a link in time between payment dates for
particular coal, which come first, and reclamation dates for the space from which
that coal was mined.
I realize that I have used imprecise terms in describing the duration of the
intervals of time involved. But I do not think that that imprecision matters in the
circumstances of this case. The court a quo held that on the probabilities Bercon

8 was not up to date with rehabilitation. On appeal Mr van Blerk, for Bereon,
conceded that the court was not wrong in its finding of fact in this regard. Apart
from this concession, I think that it emerged from the evidence clearly that by May
1993 there was a large amount of reclamation that had not been done. This
appears from Mrs Hancock's failure even to attempt to take issue with Montano's
statement to her on 17 May 1993 that she (meaning Bercon) owed him (meaning
the appellant) half a million rands for rehabilitation. The conclusion is further
confirmed by the refrain of Bercon's witnesses that rehabilitation could wait, and
that Bercon was allowed to perform at a time convenient to itself, even if long
after an area had been mined.
The conclusion I reach on the probabilities is that by May 1993 Bercon was
in mora with regard to its obligation to reclaim, and this on an extensive scale.
The mora I have in mind is mora ex re. The contract required concurrent
reclamation. When the contract is applied to the ground, it is apparent that

9 numerous dates for reclamation had passed by May 1993. That is enough for the
application of the exceptio, on the facts of this case. Had an argument arisen on
the 25^th of a month when payment was claimed, whether certain reclamation work
which had not been done was already overdue, the ascertainment of the due date
for reclamation might have been crucial to whether payment was due. But in the
circumstances of this case I do not think that exact dates now matter. Whenever
they were, they were past by May 1993.

sides are prima facie reciprocal, unless a contrary intention clearly appears from
12 returned, but they didn't do so, presumably because such a course would have cost
more than it was worth. It is to be noticed that the measurement of overburden for
the purpose of establishing ratios is expressed in terms of volume, not mass (" 2
m³ overburden to 1 ton of coal"). Estimating or calculating volume would have
been easier and cheaper than carting a weighbridge round the mine to twice weigh
waste. But the fact that the parties did not provide a machinery for weighing
materials produced by excavation or used for reclamation for purposes of payment
for those processes separate from the payment for coal at R14 per ton, in no wise
detracts from the fact that the R 14 per ton was intended to pay for these
operations as well. The contract says as much - "The above rate includes . . .".
Accordingly I consider that the provision of a single rate for all the work is a
strong indication of reciprocity.
An even stronger indication is that the rate itself may vary, depending not
at all on the tonnage of coal delivered, but upon the quantity of overburden

encountered when compared to coal, and its hardness (i e does it have to be blasted
or can it be dozed, is it "hard" or "soft"?). Clause 2 of the agreement (already mentioned), which is headed "Measurement," needs to be quoted in full. It reads;
"This will be as follows:
(a)      Ground levels taken before commencement of work.
(b)      Ground levels on top of hard rock.
(c)      Ground levels on top of coal.
(d)      Tons of coal over weigh bridge.
The effect of this clause is that in the circumstance stated (variation by
more than 10 per cent) the price payable will depend upon quantities of
overburden. The price is not as directly related as is the case with coal, in the
sense that a slippage of 10 per cent is allowed, but the fact remains that payment
is dependent also on overburden volumes and types. If overburden falls within the
range of estimates the price is R14 per ton of coal. If it varies by more than 10 per

14 cent the price will be either more or less. In my opinion this clearly establishes
reciprocity.

15 performed, and the provisions for measurement already mentioned. I can see no
reason for supposing that estimates or measurements sufficient to allow the
contract to proceed could not have been made.
These alleged difficulties lead on to Bercon's next argument, that the parties
did not intend that the exceptio could be raised, but left the appellant to resort to
claiming and proving damage, with or without cancellation. To my mind these
difficulties would have to be real indeed before they could persuade me that the
appellant was deprived of this most elemental, if least spectacular defence, and
had cast upon him the onus of proving not merely the fact of late performance, but
the exact extent of it and the cost of putting it right. In the meantime, absent the
defence, he would have to continue paying, unless he cancelled; a remedy he
might not desire to use, and which would entail proof of not merely a breach, but
a breach going to the root (see Christie The Law of Contract in SA 3 ed 469). That
the parties did not regard these difficulties as real is established by the contract

16 itself. As already mentioned, in order to find out whether the ratio between coal

But then there is a suggestion that because with the onset of winter the

17 appellant's representatives said that more emphasis should be placed on retrieving
coal, with reclamation for the moment to take second place, the appellant had
waived, or somehow lost its right to refuse payment until reclamation had been
brought up to date. A little sensible give and take does not easily translate into
waiver. On the evidence the backlog in reclamation was serious and it was
mounting. The attitude of Bercon's representatives was, what is nowadays, I
believe, called cool. It could wait. There was lots of time ahead. There were 20
years to go. One may imagine the reaction of the Inspector of Mines had the
appellant adopted such a stance. If practical effect is to be given to the contract,
Bercon's obligations with regard to reclamation can be no less than those of the
appellant.
The appellant's representatives claimed that they complained constantly.
Those of Bercon deny that complaints were made. To my mind there is a strong
probability that there were complaints. The appellant (which remained liable for

compliance with the mining regulations) was faced with a rising liability, and its
19 of flexibility and latitude that has been contended for. To have consented to such
I agree with the majority that the appellant has not established the tacit term

20 concerning "pillars". As I am of the opinion that the appellant should succeed for
the reasons already given, there is no need for me to say more on the subject. I
also agree with the majority that if the respondent is entitled to succeed, he is
entitled to the costs of two counsel provided for in the majority judgment.
I would allow the appeal with costs and would replace the order below with
one dismissing Bercon's claim with costs.

---