Law of Damages - Factual Scenario 2018 Semester 1 (Delictual Damages)

A black Range Rover (with registration numbers and letters TMP 088 GP) transporting the Tshwane Mayor from Soshanguve township was speeding recklessly on the R80 highway between the Pretoria CBD and Wonderpark in Pretoria North. The driver of the black Range Rover, Simon Mapanga (a 32 year old driver of 11 Maunde Street Atteridgeville), was irritated by a slow moving vehicle in front of him and intentionally bumped the vehicle with the Range Rover from behind. Because of the speed at which Simon was driving and the size of his vehicle, the collision from behind caused Pieter van der Linde, the driver of the smaller and slower Toyota Tazz (with registration numbers and letters ZPV 377 GP), to lose control of his vehicle. The Toyota Tazz crashed into a concrete pillar of a bridge crossing the highway and as a result was damaged beyond repair.

After the accident the driver of the black Range Rover, Simon, pulled up next to the Toyota Tazz to see if the driver and passengers were okay. One of the bystanders at the scene of the accident, Sphelele Nkosi, saw how the accident happened recorded the entire incident with his cell phone. Simon was angered by Sphelele’s actions and demanded that he (Sphelele) hand over his cell phone to him (Simon) or face assault. When Sphelele refused to hand over his phone, Simon hit him with his fists in the face and grabbed Sphelele’s phone from him. Simon threw Siphele’s expensive iPhone X on the tar road under the passing motor vehicle. The phone was crushed beyond recognition while Sphelele had to be treated for facial injuries at the medi-clinic after this incident.

After the accident, the Van der Lindes were conveyed by ambulance to the Louis Pasteur Private Hospital. Pieter (a 55 year old electrician of unit 102 Wonderpark Estates, Pretoria), the driver of the Toyota Tazz, was unconscious after the accident and remained in a coma due to severe head injuries, which were partially aggravated by him not wearing a safety belt at the time of the accident. He eventually died 6 months after the accident without ever regaining consciousness. Magdel van der Linde (a 26 year old receptionist at the Tshwane City Council), Pieter’s pregnant wife, was a passenger in the Toyota Tazz and suffered a whiplash injury and a few minor scratches to the face. The trauma of the accident induced Magdel into early labour. Baby Jese was born with deformities and will need medical assistance for the rest of his life. Magdel was discharged from hospital after 30 days and baby Jese was treated in hospital for a further ten (10) weeks. 

Seventy five (75) year old grandfather John and his fifteen (15) year old grandchild Tess, Pieter’s daughter from a previous marriage, were sitting at the back seat of the Toyota Tazz. Grandfather John had back problems before the accident, but after the accident his back deteriorated to such an extent that he had to undergo an operation. The operation was not successful and he has now been confined to a wheelchair. Grandfather John spent 6 weeks in hospital. John had a safety belt on during the accident, as did his grandchild Tess. Tess was traumatized by the accident and had to receive psychiatric counseling for 12 months after the accident. Tess broke her left leg in the accident and also suffered from severe head injuries. She was hospitalized for 3 months and her grades in school dropped after the accident. This drop in grades severely affects her pre-accident ambitions of studying towards a law degree at the University of South Africa.

Pieter was 55 years old at the time of the accident and earned a yearly salary of R480 000. Magdel was the beneficiary of Pieter’s life insurance policy to the value of R2 million and also received a lump sum of R2.5 million from Pieter’s employment pension fund after his death. Pieter’s Toyota Tazz was fully insured with a reputable insurance company. Magdel is earning a salary of R7 000 per month and was away from the office for the 30 days she was hospitalized and took unpaid leave for  three months post the statutory maternity leave. Grandfather John owns his own business and after the accident he could no longer be involved in the day-to-day business of his company. He had to appoint a manager, Steven, to attend to his business interests. Pieter and his family were members of the ABC medical aid fund, but grandfather John had no personal medical insurance.

Law of Damages - Factual Scenario 2017 Semester 2 (Delictual Damages)

On the morning of Friday the 19^th May 2017 Shaun McFeast (of 12 Bergrivier drive, Kempton Park) assaulted his fiancé Ursula McLeod (of 72 Oranjerivier drive, Kempton Park) out of jealousy with the intent to cause her grievous bodily harm. He slapped her across the face and pushed her down the stairs. Ursula broke her arm and seriously injured her back. Shaun left her in pain and rushed out of her apartment into the parking lot of the complex. He jumped into his modified Fast and Furious Ford Ranger Wild-track and took off like a man in a hurry.  

Still seething from the anger of what he termed inappropriate conduct by her fiancé, Shaun’s mind was not on the wheel. This is so because he drove through a red robot at the corner of Kwartel Road and Mooifontein road and crashed into James Brown’s small Kia Picanto on the left hand side. Shaun’s negligent driving was the sole cause of the accident. Shaun’s 4x4 only had minor damage, but James’s vehicle was a complete write off due to the impact. Both motor vehicles were insured against damage.

At the time of impact, James had his safety belt on and as a result only suffered minor bruises. He was hospitalized at the Arwyp private hospital and was treated for shock and the minor bruises. James was released from hospital on the morning of Sunday the 21^st May 2017.

James’s pregnant wife, Tiffany, and their 5-year-old daughter, Angelique, both sitting on the left hand side in the vehicle, were seriously injured in the motor vehicle accident. Tiffany, 8 months into her pregnancy, was also wearing a safety belt and went into labour due to the accident. Young Matilda was born a few hours later, but her mother sadly died on Saturday morning, 20 May 2017, due to severe loss of blood. Matilda was born with deformities due to the motor vehicle accident and will need special care for the rest of her life.

At the time of impact, Angelique, who usually sits in her little baby seat at the back, had just loosed her safety belt to pick up some sweets that fell on the car seat. Unfortunately, she broke her left leg and her right shoulder in the accident. She had to undergo three operations to correct the fracture in her left leg. She will walk with difficulty for the rest of her life and her mobility has been affected by her injuries.

A month on from the tragic accident that claimed his wife’s life and left his two daughters with physical hardships, James suffered post-traumatic stress and had to receive psychiatric treatment for 12 months.

James had indemnity insurance to cover the damage to his vehicle, but because he was retrenched 3 months before the accident, he decided to cancel his full medical aid insurance and only had a hospital plan to cover the family at the time of the accident. Tiffany was a partner in a successful architect firm and James was the beneficiary of life insurance cover over her life (Tiffany) to the value of R10m. James sold the shares Tiffany held in the architect firm for R5m.   

Volks v Robinson 2005 (5) BCLR 446 (CC)

Volks v Robinson 2005 (5) BCLR 446 (CC)

Facts

The case of Volks v Robinson arose from a dispute over the interpretation of the Maintenance of Surviving Spouses Act, 1990 (the Act). The Act provides for the maintenance of surviving spouses and children of deceased persons. In this case, the surviving partner of a deceased person claimed maintenance under the Act, but her claim was denied on the grounds that the Act did not apply to same-sex partnerships.

Issues

The main issue in the case was whether the Act should be interpreted to include same-sex partnerships.

Reasons

The Constitutional Court (CC) held that the Act should be interpreted to include same-sex partnerships. The CC reasoned that the Act was passed to protect the financial security of surviving spouses and children and that this protection should be extended to all spouses and children, regardless of the sexual orientation of the deceased person. The CC also held that the Act should be interpreted in a way that is consistent with the Constitution, which guarantees equality to all people, regardless of their sexual orientation.

Conclusion

The CC allowed the appeal and held that the Act applies to same-sex partnerships. This means that surviving partners in same-sex relationships are entitled to claim maintenance under the Act.

Summary

The case of Volks v Robinson is a landmark case in South African law. It is the first case in which the CC has considered the rights of same-sex couples in the context of the Act.

The CC's decision in Volks v Robinson is based on the following principles:

• The Act should be interpreted in a way that protects the financial security of all surviving spouses and children, regardless of the sexual orientation of the deceased person.
• The Act should be interpreted in a way that is consistent with the Constitution, which guarantees equality to all people, regardless of their sexual orientation.

The CC's decision in Volks v Robinson has a number of implications. First, it means that same-sex couples now have the same rights to maintenance under the Act as heterosexual couples. Second, the decision means that the Social Security Agency (SASSA), which administers the Act, will now need to pay out more money in maintenance to same-sex couples. Third, the decision may have implications for other areas of law, such as family law and inheritance law.

The decision has been welcomed by LGBTQ+ rights activists and legal experts. However, some commentators have criticized the decision, arguing that it will place an undue burden on SASSA and that it will lead to an increase in litigation.

Overall, the decision in Volks v Robinson is a significant case in South African law. It is likely to have a lasting impact on the rights of same-sex couples and on the way that SASSA administers the Act.

Du Plessis v Road Accident Fund 2004 (1) SA 359 (SCA)

Du Plessis v Road Accident Fund 2004 (1) SA 359 (SCA)

Facts

Mr. Du Plessis was a passenger in a motor vehicle accident caused by the negligence of another driver. Mr. Du Plessis was seriously injured in the accident and sustained quadriplegia. He was unable to work and required lifelong care and assistance.

Mr. Du Plessis claimed damages from the Road Accident Fund (RAF) for his loss of earnings, medical expenses, and pain and suffering. The RAF admitted liability for the accident but disputed the quantum of damages.

Issues

The main issue in the case was whether Mr. Du Plessis was entitled to claim damages from the RAF for the loss of support from his partner, Mr. Erasmus. Mr. Erasmus and Mr. Du Plessis had been in a same-sex relationship for a number of years and had entered into a contract with each other in which they agreed to support each other financially and emotionally.

Reasons

The Supreme Court of Appeal (SCA) held that Mr. Du Plessis was entitled to claim damages from the RAF for the loss of support from his partner, Mr. Erasmus. The court reasoned that the RAF Act does not exclude same-sex partners from claiming damages for the loss of support. The court also held that it would be discriminatory to deny same-sex partners the right to claim damages for the loss of support, as this would violate their right to equality enshrined in the South African Constitution.

The court further held that the contract between Mr. Du Plessis and Mr. Erasmus was enforceable and that it created a legal duty of support between them. The court therefore found that Mr. Du Plessis had suffered a loss of support as a result of the accident and that he was entitled to claim damages from the RAF for this loss.

Conclusion

The SCA allowed Mr. Du Plessis's appeal and awarded him damages for the loss of support from his partner, Mr. Erasmus.

Summary

The case of Du Plessis v Road Accident Fund is a landmark case in South African law. It is the first case in which the SCA has considered whether same-sex partners are entitled to claim damages from the RAF for the loss of support.

The SCA's decision in Du Plessis v Road Accident Fund is based on the following principles:

• The RAF Act does not exclude same-sex partners from claiming damages for the loss of support.
• It would be discriminatory to deny same-sex partners the right to claim damages for the loss of support, as this would violate their right to equality enshrined in the South African Constitution.
• A contract between two people can create a legal duty of support between them.
• If a person suffers a loss of support as a result of an accident caused by the negligence of another person, they may be entitled to claim damages from that person.

The SCA's decision in Du Plessis v Road Accident Fund has a number of implications. First, it means that same-sex partners are now entitled to claim damages from the RAF for the loss of support. This is a significant victory for LGBTQ+ rights in South Africa. Second, the decision means that the RAF will now need to pay out more money in damages. Third, the decision may have implications for other areas of law, such as family law and employment law.

Amod v Multilateral Motor Vehicle Accidents Fund 1999 (4) SA 1319 (SCA)

Amod v Multilateral Motor Vehicle Accidents Fund 1999 (4) SA 1319 (SCA)

Facts

Ms. Amod's husband was killed in a road accident caused by the negligence of another driver. Ms. Amod and her two minor children were financially dependent on her husband. Ms. Amod claimed damages from the Multilateral Motor Vehicle Accidents Fund (MMF) for the loss of support she and her children had suffered.

The MMF denied liability on the grounds that Ms. Amod's marriage was not recognized by South African law. Ms. Amod and her husband had been married in a Muslim ceremony, but they had not registered their marriage with the civil authorities.

Issues

The main issue in the case was whether Ms. Amod was entitled to claim damages from the MMF for the loss of support she and her children had suffered, even though her marriage was not recognized by South African law.

Reasons

The Supreme Court of Appeal (SCA) held that Ms. Amod was entitled to claim damages from the MMF for the loss of support she and her children had suffered. The court reasoned that the MMF Act does not exclude spouses from claiming damages for the loss of support simply because their marriage is not recognized by South African law. The court also held that it would be discriminatory to deny spouses the right to claim damages for the loss of support on the basis of the status of their marriage.

The court further held that Ms. Amod and her husband had entered into a valid customary marriage under Muslim law. The court found that the custom of polygamy was not repugnant to South African law and that Ms. Amod was therefore the lawful wife of her husband.

Conclusion

The SCA allowed Ms. Amod's appeal and awarded her damages for the loss of support she and her children had suffered.

Summary

The case of Amod v Multilateral Motor Vehicle Accidents Fund is a landmark case in South African law. It is the first case in which the SCA has considered whether spouses married in a customary marriage are entitled to claim damages from the MMF for the loss of support.

The SCA's decision in Amod v Multilateral Motor Vehicle Accidents Fund is based on the following principles:

• The MMF Act does not exclude spouses from claiming damages for the loss of support simply because their marriage is not recognized by South African law.
• It would be discriminatory to deny spouses the right to claim damages for the loss of support on the basis of the status of their marriage.
• A customary marriage is a valid marriage under South African law, even if it is not registered with the civil authorities.

The SCA's decision in Amod v Multilateral Motor Vehicle Accidents Fund has a number of implications. First, it means that spouses married in customary marriages are now entitled to claim damages from the MMF for the loss of support. This is a significant victory for the rights of women and children in customary marriages. Second, the decision means that the MMF will now need to pay out more money in damages. Third, the decision may have implications for other areas of law, such as family law and inheritance law.

Santam Bpk v Henery 1999 (3) SA 421 (A)

Santam Bpk v Henery 1999 (3) SA 421 (A)

Facts

Mr. Henery was killed in a road accident caused by the negligence of another driver. Mr. Henery's wife and three minor children were financially dependent on him. Mrs. Henery and her children claimed damages from Santam Bpk (Santam), Mr. Henery's insurance company, for the loss of support they had suffered.

Santam admitted liability for the accident but disputed the quantum of damages. Santam argued that Mrs. Henery and her children were not entitled to claim damages for the loss of support because Mr. Henery had a moral duty, rather than a legal duty, to support them.

Issues

The main issue in the case was whether Mrs. Henery and her children were entitled to claim damages from Santam for the loss of support they had suffered, even though Mr. Henery had only a moral duty to support them.

Reasons

The Supreme Court of Appeal (SCA) held that Mrs. Henery and her children were entitled to claim damages from Santam for the loss of support they had suffered. The court reasoned that the law of delict protects the right to support, regardless of whether the duty to support is legal or moral. The court also held that it would be discriminatory to deny dependents the right to claim damages for the loss of support on the basis of the status of their relationship with the deceased.

The court further held that the dependents of a deceased person are entitled to claim damages for the loss of support even if the deceased person was not the sole provider for the family. The court found that the dependents' loss of support is not limited to the amount of financial assistance they received from the deceased person, but also includes the loss of the deceased person's love, care, and guidance.

Conclusion

The SCA allowed Mrs. Henery and her children's appeal and awarded them damages for the loss of support they had suffered.

Summary

The case of Santam Bpk v Henery is a landmark case in South African law. It is the first case in which the SCA has considered whether dependents are entitled to claim damages for the loss of support from the insurance company of a deceased person who had only a moral duty to support them.

The SCA's decision in Santam Bpk v Henery is based on the following principles:

• The law of delict protects the right to support, regardless of whether the duty to support is legal or moral.
• It would be discriminatory to deny dependents the right to claim damages for the loss of support on the basis of the status of their relationship with the deceased.
• The dependents of a deceased person are entitled to claim damages for the loss of support even if the deceased person was not the sole provider for the family.
• The dependents' loss of support is not limited to the amount of financial assistance they received from the deceased person but also includes the loss of the deceased person's love, care, and guidance.

The SCA's decision in Santam Bpk v Henery has a number of implications. First, it means that dependents are now more likely to be able to claim damages for the loss of support from the insurance company of a deceased person who had only a moral duty to support them. This is a significant victory for the rights of dependents, particularly children and unmarried partners. Second, the decision means that insurance companies will now need to pay out more money in damages. Third, the decision may have implications for other areas of law, such as family law and inheritance law.

Guardian National Ins Co Ltd v Van Gool 1992 (4) SA 61 (A)

Guardian National Ins Co Ltd v Van Gool 1992 (4) SA 61 (A)

Facts

Mr. Van Gool's two-year-old daughter, Catherine, was seriously injured in a road accident caused by the negligence of another driver. Mr. Van Gool's daughter was insured by Guardian National Insurance Company (Guardian National).

Mr. Van Gool claimed damages from Guardian National for the future medical and hospital expenses that Catherine would need as a result of the accident. Guardian National admitted liability for the accident but disputed the quantum of damages. Guardian National argued that Mr. Van Gool was not entitled to claim damages for future medical and hospital expenses because he had a legal duty to support his daughter and to pay her medical expenses.

Issues

The main issue in the case was whether Mr. Van Gool was entitled to claim damages from Guardian National for the future medical and hospital expenses that Catherine would need as a result of the accident, even though he had a legal duty to support her and to pay her medical expenses.

Reasons

The Supreme Court of Appeal (SCA) held that Mr. Van Gool was entitled to claim damages from Guardian National for the future medical and hospital expenses that Catherine would need as a result of the accident. The court reasoned that Mr. Van Gool's legal duty to support his daughter did not prevent him from claiming damages from Guardian National. The court also held that it would be unfair to deprive Mr. Van Gool of his right to claim damages simply because he was Catherine's father.

The court further held that Mr. Van Gool's claim for damages was not limited to the amount of money he would have to spend on Catherine's medical expenses. The court found that Mr. Van Gool was also entitled to claim damages for the loss of his parental rights and duties, such as the loss of the right to make decisions about Catherine's medical care.

Conclusion

The SCA allowed Mr. Van Gool's appeal and awarded him damages for the future medical and hospital expenses that Catherine would need as a result of the accident, as well as damages for the loss of his parental rights and duties.

Summary

The case of Guardian National Ins Co Ltd v Van Gool is a landmark case in South African law. It is the first case in which the SCA has considered whether a parent is entitled to claim damages from an insurance company for the future medical and hospital expenses of their child, even though the parent has a legal duty to support the child and to pay their medical expenses.

The SCA's decision in Guardian National Ins Co Ltd v Van Gool is based on the following principles:

• A parent's legal duty to support their child does not prevent the parent from claiming damages from an insurance company for the future medical and hospital expenses of the child, if the child has been injured in an accident caused by the negligence of another person.
• It is unfair to deprive a parent of their right to claim damages simply because they are the parent of the injured child.
• A parent's claim for damages is not limited to the amount of money they will have to spend on the child's medical expenses. The parent is also entitled to claim damages for the loss of their parental rights and duties, such as the loss of the right to make decisions about the child's medical care.

The SCA's decision in Guardian National Ins Co Ltd v Van Gool has a number of implications. First, it means that parents are now more likely to be able to claim damages from insurance companies for the future medical and hospital expenses of their children who have been injured in accidents caused by the negligence of other people. Second, the decision means that insurance companies will now need to pay out more money in damages. Third, the decision may have implications for other areas of law, such as family law and delict.

Road Accident Fund v Mtati 2005 (6) SA 215 (SCA)

Road Accident Fund v Mtati 2005 (6) SA 215 (SCA)

Facts

Ms. Mtati was pregnant when she was involved in a road accident caused by the negligence of another driver. Ms. Mtati's unborn child was injured in the accident and was born with brain damage. Ms. Mtati's child, Zukhanye, sued the Road Accident Fund (RAF) for the damages she had suffered as a result of the accident.

The RAF denied liability on the grounds that Zukhanye was not a "person" entitled to compensation under the Road Accident Fund Act. The RAF argued that Zukhanye was only a fetus at the time of the accident and that she had not yet been born.

Issues

The main issue in the case was whether Zukhanye, who was an unborn child at the time of the accident, was a "person" entitled to compensation under the Road Accident Fund Act.

Reasons

The Supreme Court of Appeal (SCA) held that Zukhanye was a "person" entitled to compensation under the Road Accident Fund Act. The court reasoned that the Road Accident Fund Act should be interpreted in a way that protects the rights of all victims of road accidents, including unborn children. The court also held that it would be unfair to deny Zukhanye compensation simply because she was not yet born at the time of the accident.

The court further held that the RAF had a duty to compensate Zukhanye for all of the damages she had suffered as a result of the accident, including the cost of her medical treatment, the loss of her future earning capacity, and the pain and suffering she had experienced.

Conclusion

The SCA allowed Zukhanye's appeal and awarded her damages for the injuries she had suffered as a result of the accident.

Summary

The case of Road Accident Fund v Mtati is a landmark case in South African law. It is the first case in which the SCA has considered whether an unborn child is a "person" entitled to compensation under the Road Accident Fund Act.

The SCA's decision in Road Accident Fund v Mtati is based on the following principles:

• The Road Accident Fund Act should be interpreted in a way that protects the rights of all victims of road accidents, including unborn children.
• It would be unfair to deny an unborn child compensation simply because they were not yet born at the time of the accident.
• The RAF has a duty to compensate all victims of road accidents for all of the damages they have suffered, including the cost of their medical treatment, the loss of their future earning capacity, and the pain and suffering they have experienced.

The SCA's decision in Road Accident Fund v Mtati has a number of implications. First, it means that unborn children are now entitled to compensation from the RAF if they are injured in road accidents caused by the negligence of other people. Second, the decision means that the RAF will now need to pay out more money in damages. Third, the decision may have implications for other areas of law, such as family law and delict.

H v Fetal Assessment Centre [2014] ZACC 34

H v Fetal Assessment Centre [2014] ZACC 34

Facts

Ms. H was pregnant when she went to the Fetal Assessment Centre (FAC) for a prenatal check-up. The FAC negligently failed to diagnose that Ms. H's unborn child had Down syndrome. Ms. H gave birth to a baby with Down syndrome, and she and her child sued the FAC for damages.

Issues

The main issues in the case were whether:

• Ms. H's child had a claim for wrongful life; and
• If so, whether the child's claim was barred by the principle of ex turpi causa non oritur actio (i.e., an action does not arise from a wrongful cause).

Reasons

The Constitutional Court held that:

• Ms. H's child did have a claim for wrongful life; and
• The child's claim was not barred by the principle of ex turpi causa non oritur actio.

Wrongful life

The court held that a child born with a disability as a result of prenatal negligence has a claim for wrongful life against the negligent party. The court reasoned that the child has a right to be born healthy, and that a breach of that right gives rise to a claim for damages.

Ex turpi causa non oritur actio

The court held that the principle of ex turpi causa non oritur actio does not bar a child's claim for wrongful life against a negligent medical professional. The court reasoned that the child is not responsible for the negligence of the medical professional, and that it would be unfair to deprive the child of compensation simply because the medical professional was negligent.

Conclusion

The court allowed the child's claim for wrongful life and remitted the matter to the High Court to determine the quantum of damages.

Summary

The case of H v Fetal Assessment Centre is a landmark case in South African law. It is the first case in which the Constitutional Court has considered the issue of wrongful life.

The court's decision that a child born with a disability as a result of prenatal negligence has a claim for wrongful life is a significant victory for the rights of children with disabilities. The decision means that children with disabilities will now be able to claim compensation from negligent medical professionals for the losses they have suffered.

The court's decision that the principle of ex turpi causa non oritur actio does not bar a child's claim for wrongful life is also significant. The decision means that children with disabilities will not be deprived of compensation simply because the medical professional who negligently caused their disability was engaged in wrongful conduct.

The decision in H v Fetal Assessment Centre is likely to have a lasting impact on the law of delict in South Africa. The court's broad interpretation of the law of delict and its willingness to recognize new rights of action is likely to lead to changes in other areas of law.

Standard Chartered Bank of Canada v Nedperm Bank Ltd 1994 (4) SA 747 (A)

Standard Chartered Bank of Canada v Nedperm Bank Ltd 1994 (4) SA 747 (A)

Facts

Standard Chartered Bank of Canada (SCBC) and Nedperm Bank Ltd (Nedperm) entered into a loan agreement in terms of which Nedperm agreed to lend SCBC US$100 million. The loan agreement was secured by a mortgage bond over certain of SCBC's assets.

Nedperm failed to comply with certain of its obligations under the loan agreement, and SCBC terminated the agreement and claimed repayment of the loan. Nedperm refused to repay the loan, arguing that SCBC had breached the agreement by failing to provide certain information to Nedperm.

Issues

The main issues in the case were whether:

• Nedperm was entitled to terminate the loan agreement on the basis of SCBC's breach; and
• Nedperm was liable to repay the loan, even though it had terminated the agreement.

Reasons

The Supreme Court of Appeal (SCA) held that:

• Nedperm was not entitled to terminate the loan agreement on the basis of SCBC's breach; and
• Nedperm was liable to repay the loan, even though it had terminated the agreement.

Termination of the loan agreement

The SCA held that Nedperm was not entitled to terminate the loan agreement on the basis of SCBC's breach. The court reasoned that SCBC's breach was not material and did not go to the root of the agreement.

The court explained that, in order to justify termination of a contract, a breach must be material. This means that the breach must be so serious that it goes to the root of the contract and makes it impossible for the innocent party to perform their obligations under the contract.

In the present case, the court found that SCBC's breach was not material. The court reasoned that SCBC's failure to provide certain information to Nedperm did not prevent Nedperm from performing its obligations under the loan agreement.

Liability to repay the loan

The SCA held that Nedperm was liable to repay the loan, even though it had terminated the agreement. The court reasoned that Nedperm had repudiated the agreement by refusing to repay the loan.

The court explained that, when a party to a contract repudiates the contract, the innocent party has two choices: they can either accept the repudiation and sue for damages, or they can keep the contract alive and enforce the other party's obligations under the contract.

In the present case, the court found that SCBC had chosen to keep the contract alive. The court reasoned that SCBC had continued to demand repayment of the loan, even though Nedperm had repudiated the agreement.

Conclusion

The SCA allowed SCBC's appeal and ordered Nedperm to repay the loan.

Summary

The case of Standard Chartered Bank of Canada v Nedperm Bank Ltd (1994 (4) SA 747 (A)) is a landmark case in South African contract law. The case is particularly important for its analysis of the principles of material breach and repudiation.

The SCA's decision that Nedperm was not entitled to terminate the loan agreement on the basis of SCBC's breach is significant. The decision means that a party to a contract cannot terminate the contract simply because the other party has breached a term of the contract. The breach must be material, meaning that it goes to the root of the agreement.

The SCA's decision that Nedperm was liable to repay the loan, even though it had terminated the agreement, is also significant. The decision means that a party to a contract cannot repudiate the contract and then avoid liability for their obligations under the contract. If a party repudiates a contract, the other party may accept the repudiation and sue for damages, or they may keep the contract alive and enforce the other party's obligations under the contract.

The decision in Standard Chartered Bank of Canada v Nedperm Bank Ltd has had a lasting impact on the law of contract in South Africa. The decision is cited in subsequent cases, and it is likely to be cited in many more cases in the future.