The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The appeal stemmed from the denial of the appellant's right to defend on merits due to the lower court’s grant of an Order 14 summary judgement in favor of the respondent, without properly engaging with the merits of the matter.
Substantively, the court held that in a summary judgement application the plaintiff must bring a prima facie case for the claim, which includes showing the basis of the claim, before the burden shifts to the defendant to defend. However, a complete defence is not required but rather the defendant only needs to show that he has a reasonable defence to the claim and his defence is not a sham or intended to delay payment.
Since the respondent’s claim had been based on an agreement and an alleged assignment, the court reasoned that on assessment of the evidence the argument of assignment lacked the element of intent and thus could not stand. Further, the argument that the respondent was a beneficiary of the agreement in question was unfounded. The trial court therefore erred in its decision to grant summary judgment as the very basis of the claim was reasonably challenged on the facts.
The court thus concluded that the appellant had been unjustifiably been shut out of trial. It thus allowed the appeal setting aside the summary judgement.
The parties entered into a business transaction for the supply and installation of a saw-mill. However, the transaction was not covered by a properly drawn up contract. Furthermore, it became apparent that the plaintiff provided the defendant with a plant which was defective and not fit for the purpose it was intended.
This case considered whether the Court of Appeal had misdirected itself to the defects contained in the machinery, whether there was a breach of a fundamental obligation and whether the goods sold were fit for the purpose which they were intended to be used.
The court considered the Sale of Goods Act, 137 of 1962 (the act) and found that the breach of a promise under the act depends on the category of promise; either a fundamental obligation, condition or a warranty. Breach of a fundamental obligation or a condition entitles the party not in default to repudiate the contract of sale and if it is the seller who is in breach, the buyer can reject the goods. The breach of a warranty cannot lead to a repudiation or rejection of the goods but will entitle the party not in breach to damages. However, a party entitled to repudiation and rejection may waive their right and opt for damages.
The court considered whether the goods were fit for the purpose that they were provided for. The plaintiff sold the machinery in the course of its business on condition that it will be fit for the purpose of saw milling. A machine is fit for purpose if it is able to perform the task for which it was acquired, safely and for a reasonable period, before defects appear. The court found that a saw mill should not break down after 11 days of operation and therefore did not meet the standard of the purpose for which it was intended. The court found that as a result of the defect, the defendant was entitled to general damages as a result of the failure of the saw mill being fit for purpose.
The plaintiff/appellant unsuccessfully sued the defendant/respondent for breach of contract following the latter’s refusal to accept delivery of the relevant goods. Curtailing the appellant’s sizeable claim for special damages, the High Court awarded only nominal damages – an order later confirmed by the Court of Appeal.
At the Supreme Court, the scope of section 48 of the Sale of Goods Act (the act) was elucidated: the computation of damages thereunder may be either general or special depending on the circumstances of each case. General damages refer to those which are foreseeable without proving that special circumstances were brought to the breaching party’s attention. Special damages are those which are foreseeable by the parties at the time of contracting because certain circumstances have been highlighted which render the damages within the realm of the signatories’ reasonable contemplation. These must be pleaded and proved at trial.
The plaintiff’s claim for special damages for the losses suffered by the breach was not proven before the High Court and were subsequently abandoned. The Supreme Court thus took the plaintiff to be entitled only to general damages under section 48 of the act. To this end, the plaintiff did not lead any evidence on the multipliers which would entitle the court to award enhanced damages. Section 48 caters to the contract price/market price differential and not to a computation of lost profits. The plaintiffs failed to adduce sufficient evidence to merit the proposed determination of damages and so the nominal award made by High Court in terms of s 48 was adequate.
The appeal was dismissed.