Examples of 'pure economic loss' claims that have been held to be actionable include the claim of 'interference in contractual relations' and 'negligent misstatements'. The government argued that once someone has been compensated under the common law, they may not rely on the Constitution to obtain additional compensation. The diverse terminology used by legal professionals has only served to exacerbate the uncertainty. The Esidimeni Care Centre was an establishment that housed mental healthcare patients. In this arbitration, the amounts claimed for emotional shock and trauma far exceeded the limit that one can claim under the common law, and as a result the arbitrator awarded constitutional damages to compensate for the deficit. The extent of your damages will be the amount that it will cost you to have the cracks repaired.) Under South African law, claims for damages are financial claims that are brought to compensate a plaintiff as a result of a loss-causing event that occurred because of the fault of the defendant. Please contact email@example.com, An extract from The Global Damages Review - 2nd edition. 8 Visser et al Law of Damages 137; Evins v Shield Insurance Co Ltd 1980 2 SA 814 (A There is a difference between the way in which damages are determined in a case of breach of contract and in a case of a delict being committed. the existence of a class identifiable by objective criteria; there is a cause of action raising a triable issue; the right to relief depends upon the determination of issues of fact, or law, or both, common to all members of the class; the relief sought, or damages claimed, flow from the cause of action and are ascertainable and capable of determination; where the claim is for damages, there is an appropriate procedure for allocating the damages to the members of the class; the proposed representative is suitable and is permitted to conduct the action and represent the class; and. However, owing to the fact that the proceedings were not formal court proceedings, the award has not set a binding precedent. Therefore, heâs in breach.). Reaching a fair amount as compensation for general damages is not an easy task. Limitation clauses: Parties may agree that any claim for damages, because of a breach of contract, is limited to a specific amount (such as the amount of the contract price). There has been some confusion within the South African legal profession in relation to the concepts of direct and consequential damages. In addition, it was held that the only way to vindicate the claimants' constitutional rights was to grant an order awarding constitutional damages over and above the amount already awarded for emotional shock and trauma. Keep a step ahead of your key competitors and benchmark against them. Basic Definition of Damages In more recent years, the original concept of damages has been expanded to include punitive damages, to punish the wrongdoer. The individuals in question were transferred to non-governmental organisations (NGOs). The Court made it clear that, procedurally, a class action must be certified by the court, before summons can be issued – a preliminary application must be made to court for the authority to do so and the court in the certification application will give directions as to the procedure of the class action. Practice Area (s): Shipping & Logistics. Â§Â That you suffered damages as a direct result of the breach of contract. Each of these causes of action require that certain elements must be proven. The innocent party need only prove that the particular damage was of the kind that flows naturally and generally from the type of breach in question. Abduction consists in unlawfully taking a minor out of the control of his or her custodian with the intention of enabling someone to marry or have sexual intercourse with that minor. These types of damages are more difficult to … Why list these supposed different types of liability at all, if all damages regardless of the cause of action are excluded? You must therefore prove that you and the other party, at the time of concluding the contract, had foreseen that a breach would result in this kind of damage. The majority of these organisations operated with invalid licences and lacked the experience and capacity to care for these patients. However, this does not mean that unlawful competition cases are not actionable in South Africa. A quote from a builder for repairing the cracks will prove the extent. The class action proposed was to be brought 'on behalf of the consumers for compensation and related relief' as a result of the anticompetitive conduct. The matter concerned an alleged interference by Masstores with the trade of Pick n Pay, owing to the fact that Masstores was expanding its store, offering to include the sale of perishable and non-perishable groceries and foodstuffs. Penalty clauses: Parties may also agree that a liquidated (pre-calculated) amount of damages or an agreed penalty amount may become payable in the event of a breach of contract. You are therefore allowed to claim any expenses from the wrongdoer that you incur in taking reasonable steps to minimise your damage. '3 The following sections provide a cursory over- This is particularly because of that fact that the elements of a delict (as set out above) must still be satisfied when 'pure economic loss' claim is brought. "The law of damages is that part of the law which indicates how the existence and extent of damage as well as the proper amount of damages or satisfaction are to be determined in the case of delict, breach of contract or other legal principles providing for the payment of damages." In Lavery and Co. Ltd v Jungheinrich, 1931 AD 156, the courts distinguished between: “general damages” as damages that flow naturally and generally from a breach of contract and which the law presumes that the parties thought would result from such a breach of contract; and The matter was referred for determination to a public arbitration. The court, instead, decided on an award of a 'structural interdict'. The judge also dismissed the Komape's family claim for emotional shock and trauma and awarded 6,000 rand to each of the Komape's siblings for medical expenses. For example, letâs say you had a contract with a plumber to fix a pipe in your house, and he committed a breach by not fixing it properly, and water is streaming everywhere. The court in this case made it clear that there is no general right not to be caused pure economic loss and there is no legal duty on third parties not to infringe contractually derived exclusive rights to trade. You cannot sit back, do nothing, and later claim for damage to your house. South African courts have accepted that this relief may include a form of compensatory damages known as 'constitutional damages'. The defendant must have committed an act, or an actionable omission; harm, in the form of damage or loss, to the plaintiff; because of the fault (whether intentionally or negligently) of the defendant. Damages arising out of natural and probable consequences of breach of contract are also considered an ordinary damage. Constitutional damages have previously been awarded in South Africa, for example in the case of President of the Republic of South Africa and Another v. Modderklip Boerdery (Pty) Ltd 2005 (5) SA 3 (CC), where the court awarded damages to the owners of land due to an infringement of their constitutional right to property in circumstances where unlawful occupiers had refused to vacate the premises. In addition, the Constitutional Court held that there is no legal duty on third parties not to infringe contractually derived exclusive rights to trade, because exclusive trading rights make the competitive field uneven. The Supreme Court of Appeal held that when it comes to defining the 'class' in the class action, it is not necessary to identify the individual members of the class, 'but that the class must be defined with sufficient precision that a particular individual's membership can be objectively determined by examining their situation in the light of the class definition'. General damages is the broad term given to non-pecuniary loss such as pain and suffering, loss of amenities, emotional harm, etc and is awarded to a plaintiff as part of a compensatory damages to cover all those losses which are not easily quantified as opposed to percuniary damages, ie damages for harm to one's personality and physical integrity. The Supreme Court of Appeal confirmed this finding by relying on the Constitutional Court judgment of Country Cloud Trading CC v. MEC, Department of Infrastructure Development, Gauteng (CCT 185/13)  ZACC 28 as authority that this kind of prevention of contractual performance constituted wrongful conduct, actionable in delict under South African law. You will then have a contractual claim for the amount of damages that youâve suffered â the amount that it will cost to repair the walls. The reality is that itâs a little harder to get something for nothing than you may think. (d) Finally, having regard to the current South African consumer credit legislation and the common law position applicable to contracts, recommendations will be made where necessary in order to address shortcomings and problems with the National Credit Act. It is up to the other party (in this case, the incompetent plumber) to prove that you could and should have reduced your loss. The Supreme Court of Appeal provided elements to guide a court in determining a certification application, which are as follows: Since class actions in South Africa are not regulated by statute, as such, this decision is vital in that it provides a common law mechanism by which groups of individuals can bring class action proceedings. (You hired the building contractor to build walls without any cracks in it. Questions? Claims for medical expenses are chief among these, but you may also claim damages for lost wages or diminished employment opportunities, pain and suffering, or loss of affection (also called "loss of consortium"). The focus in that publication was to survey the codified rules and common law principles underpinning the analysis and presentation of damages. Introducing PRO ComplianceThe essential resource for in-house professionals. With that being said, the arbitrator in this matter was the former Deputy Chief Justice of the Constitutional Court of South Africa. Compensatory damages are the most common remedy in cases of breach of contract. Or better still, accidentally slipping on some fabric softener in a supermarket and ensuring yourself a very comfortable retirement on Clifton Beach. Poor workmanship usually results in a financial loss when someone else must then repair the defect. Hereâs how it works. On the other hand, ânegative interestâ is the proper measure when one determines the amount of damages youâre entitled to in the case of a delict. The court held that the punitive nature of such an award in itself would not serve to enforce any of the violated rights. Home » BLOG » Litigation Articles » Damages Claims. Their claims for damages were based on the breaches of constitutional law rights by the government of South Africa (i.e., they were constitutional damages); however, they had already been awarded common law damages for pain and suffering. Law of Contract 202  (JLCV202) Book title The Law of Contract in South Africa; Author. Perhaps youâve dreamed of suing that old lady who runs the corner shop and keeps telling you how healthy youâre looking and then asks how much weight youâve gained. ", © Copyright 2006 - 2020 Law Business Research. Damages awarded for actual loss, to place the plaintiff in a position that she would have been in had she not suffered the wrong complained of. However, should the walls of your house crack after an earthquake hits your town, it is very unlikely that you will be able to claim damages from the builder, as your damage was caused by the earthquake and not by the builderâs breach of contract. The High Court in this matter had previously interdicted Masstores from operating the supermarket in breach of its own lease agreement with Hyprop. Under South African law, the aim of a claim for damages is to compensate for the loss suffered and not to enrich a party. The Constitutional Court also clarified that the Country Cloud case did not lay down that, in inducement cases, the wrongfulness inquiry need not be concerned with the duty not to cause harm or the infringement of rights. Damages in delict are divided into: patrimonial/special damages (including medical costs, loss of income and the cost of repairs); non-patrimonial damages/general damages (including pain and suffering, disfigurement, loss of amenities and … It has a significant effect on the supply of goods and services. Some cases, by their very nature, require the use of expert testimony. The decision is relevant insofar as it pertains to the manner in which South African courts approach the cause of action known as 'damages due to interference in contractual relations'. concerning the law of contract in the South African courts. You must either prove that you have a contractual claim against that person because of breach of contract on his or her part; or that you have a civil claim against that person, because of a delict being committed against you. This looks at the difference between your present financial state after a breach of contract has occurred, and the financial state in which you would have been if the contract had been carried out properly. An example of a contractual claim for damages would be a case in which you hire a building contractor to make alterations to your house, but later the walls crack as a result of poor workmanship. First-step analysis: mining in South Africa, Mining duties, royalties and taxes in South Africa, Compensation for loss arising from protected strikes: some thoughts on an employer’s options, A thumbnail guide to licensing in South Africa. The claimants contended that the nature of the violations, as well as the failure of the government to provide proper sanitation facilities in rural schools, meant that an award for constitutional damages was the most appropriate way to vindicate the violation of constitutional rights. You can recover this expense (the cost of the second plumber) along with your claim for damages against the first plumber. Pick n Pay sought to protect an exclusive contractual right to trade as a supermarket in a shopping centre, granted to Pick n Pay by Hyprop (the lessor and owner of the shopping centre) in a lease agreement. D Collier-Reed and K Lehmann (ed) Basic Principles of Business Law (2006) LexisNexis: South Africa. Is there even such a thing as punitive damages in South African law? Become your target audience’s go-to resource for today’s hottest topics. Examples of general damages will include the loss of interest resulting from a failure to pay a sum of money; damages that result from the use of a product for its normal purpose; and regulatory fines imposed in the event of the breach of a … money) that you are entitled to. This matter involved the assessment of wrongfulness in delict, which raises matters of policy, infused by constitutional values. 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