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CUSTOM CREDIT CORPORATION (PTY.) LTD. v. SHEMBE.

(DURBAN AND COAST LOCAL DIVISION.)

 

1971. July 7; September 24.  MULLER, J.

 

Sale.-Hire-purchase agreement.-Order obtained for performance or alternatively return of the merx.-Seller cannot thereafter in­ stitute a separate action for damages.

 

If the seller under a hire-purchase agreement has obtained judgment for per­ formance of the contract or alternatively cancellation of the agreement and return of the merx, with forfeiture of that ,part of the purchase price already paid, he cannot thereafter institute a separate action for damages. All the relief which flows from one cause of action (including damages) must be claimed and recovered 'in one action.

 

Stated case. The nature of the Jeg,al question appears from the judgment.

A. Findlay, for the plaintiff.

G. /. Raftesath, for the defendant.

 

Cur. adv. vult.

Postea (September 24th).

 

MULLER, J.: This matter has been placed before the Court by the parties persuant to the provisions of Rule of Court 33 (1). The es­ sential facts agreed upon, form the basis of a special plea which would terminate the matter should judgment be given in defendant's favour.

 

The basic facts are briefly the following :

Plaintiff is the cessionary of the rights of a trading company which sold ,a motor-truck to the defendant. The truck was sold for R13 700 in terms of a written common law hire-purchase contract. Of this amount R2 000 represents "financing charges" which probably .includes interest on the balance of the purchase price. A deposit of R3 700 was paid on signature. Thereafter several instalments were paid. A total of R6 633,50 was thus paid. Defendant then failed to effect timeous or regular payment of installments. Plaintiff consequently, as he was en­ titled to do, claimed the following relief in one action and obtained judgment in his favour against defendant in this Court:

"(a) Payment of the sum of,, R7 066,50 (being the unpaid part of the purchase once)......................

(iii) An order declaring the defendant to have forfeited the sum of R6 633,50 (being the part of the purchase price already paid); "...................................................................................................... "

 

This form of alternative order is valid (See Sunjeevi v. Wood, (1909) 30 N.L.R. 76).

The reason being that this type of order does not prejudice the defendant and leaves him the final choice of either complying with his obligation to pay the purchase price in full or returning the merx, thus forfeiting that part of the purchase price already paid. The practical ad­ vantages of avoiding double costs and finalising possible disputes by way of.a judgment :also favour an alternative order of this nature. It should nevertheless be borne in mind that the first order merely en­ forces the duty of complying with the contract. The alternative order results from the cancelations of the contract, naturalny entai1ing new obligations to the effect that the parties should return what they.have respectively received.and that the party who has been at fault should pay damages, if damage has been suffered. In the present case the con­ tract contained an enforceable lex commissoria. For this reason the amount already paid was declared forfeited.

 

Apart from this one should bear in mind •that an order cancelling the contract may at times be superfluous, despite the fact that it may serve as protection to the seller. The contract is cancelled by the in­ nocent party and not by the Court. Prior to the commencement of the first action (or at least not later than the time of service of summons) the seller made his choice, but left the purchaser with the final decision between fulfilment or cancelations. The fact nevertheless remains that the seller exercised a choice and that the duty to pay damages (in case of cancellation) then already arose. This may be a conditional duty depending on the purchaser's capability or willingness to pay the purchase price in full, but it nevertheless remains the seller's decision to cancel should the purchase price not be paid in full. This decision he cannot change. (See Sonia (Pty.) Ltd. v. Wheeler, 1958 (1) S.A. 555 (A.D.); Lebedina v. Schechter and Haskell, 1931 W.L.D. 247).

 

The Court's order of cancellation merely amounts to an official im­ primatur concerning the cancellation effected by the innocent party.

 

What happened ln this case was that two separate claims arising from two separate causes of action were enforced by a single action and judgment. It would therefore have been quite in order for the innocent party to have enforced these two different claims by way of two sepa­ rate actions, obtaining separate judgments in respect of each.

 

In the present case the problem which forms the basis of the special plea relates to the following circumstances :

 

The Sheriff attached the truck (because of the failure to comply with the Court's order) and returned it to the plaintiff. He estimates its vanue at R3 000. He now claims in this later and new action pay­ ment of a further amount of R3 248 representing lucrum cessans. Against this it was specially pleaded that plaintiff had exhausted his legal remedies in the previous action. According to the defendant he cannot now claim any further amount of damages : this he should have claimed in the previous action (so it was contended).

 

The defendant here relies on the weH-known maxim of our law: ne bis in idem. Mr. Raftesath contended on behalf of the defendant that all the usual considerations of public policy forming the basis of this principle, were present in this case. He argued that any claim for damages should have formed part of the alternative claim embodied in the Court's order. He contended that the liability to pay damages arose at the time when the last fact completing plaintiff's cause of action, occurred : in this case the cancellation of the contract prior to the previous action. The fact that the• final choice is left to the purchaser in terms of the Court's order, makes no difference according to him. The summons usually merely serves as a notice of cancellation where no such notice had previously been given. (See Swart v. Vosloo, 1965 (1)

S.A. 100 (AD.)).

 

Mr. Findlay contended on behalf of the plaintiff that the cause of action giving rise to the present claim for damages, was not the pre­ ceding cancellation of the contract, but the failure to comply with the Court's order. According to him the cancellation only comes into ef­ fect if (and when) defendant fails to comply with the Court's order on being served with it.

 

In de iding upon this issue no case directly in point could be found. The problem must therefore be soilved by applying the general prin­ ciples of our law.

For the sake of completeness I should adso point out that clause 9 of the contract in question provided that should the purchaser commit a breach of contract, the seller (plaintiff) would be entitled to claim the purchase price in fl.1!11, or to claim canceHation coupled with for­ feiture of instalments. paid. It was further expressly provided that the seller had all these rights :

 

This lex commissoria as well as the claim for damages are enforce­ able: this, however, takes the case no further, because the basic ques­ tion remains whether damages may later be claimed in a separate ac­ tion.

 

The problem is in my opinion confused by the fact that the two se­ parate claims have been enforced in the alternative in one action. The form and wording of the Court's order apparently supports Mr. Find­ lay's contention. I have adready indicated above why these separate claims are allowed to be joined in one action. The legal position must, however, in principle remain the same where one, instead of two, separate actions is instituted.

 

It is trite law that alil the relief which flows from one cause of action must be claimed and recovered in one action. (See Cape Town Coun­ cil v. Jacobs, 1917 AD.  615 at p. 620; Green v. Coetzer, 1958 (2)

S.A 697 (W); Schnellen v. Randalia Assurance Corporation, 1969 (1)

S.A 517 (W)).

 

This cause of action is exhausted by way of judicial novation and substituted by the new obligation arising from the judgment.

These principles apply with equail force where damages are claimed, regardless of the question whether the claim is based on breach of con­ tract or on delict. (See Oslo Land Co. Ltd. v. Union Government, 1938 AD.  584; Slomowitz v. Vereeniging Town Council, 1966 (3)

S.A 317 (AD.) at pp. 330-333).

Reserving the right to claim damages (in clause 9) creates no inde­ pendent right to cllaim damages in a separate action.

 

To be sure, damages for breach of contract and for delict are not measured and calculated in the same way. Nevertheless the same prin­ ciple applies: all the relief which flows from one cause of action (in­cluding damages) must be claimed and recovered in one action: ne bis in idem! And this irrespective of whether the damage has already been suffered or will be suffered in future. It amounts to res judicata

.

It may welll be so that the seller as plaintiff may experience practical difficulties in formulating his claim for damages. He does not have pos-session of the vehicle at the time he institutes his action. It is difficult for him to ·assess the value of the vehicle. This he should know before he is in the position to calculate and formulate his claim for damages accurately. Nevertheless I am of the opinion that Mr. Raftesath's con­ tention is the correct one. Any alaim for damages should have been.included in the ailternative claim.

 

These practical difficulties are, however, inferior to the legal prin­ ciples I have enunciated above. The procedural solution possibly is to claim a fictitious or estimated amount as damages. After return of the merx a suitable amendment may be applied for. The defendant coulld then hardly complain about a plus petitio. It would serve no purpose to philosophise here further about the procedural problems or their possible solutions.

 

The special plea is therefore upheld. Judgment is given for the de­ fendant with costs.

 

Plaintiff's Attorneys : M. C. Smithers & Co. Defendant's Attorneys:

Cowley &Cowley.

 

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