33

10.

BREACH OF CONTRACT

Breach of contract is non fulfilment of contractual promises and undertakings, where there is no
acceptable excuse or justification in law for this. It is not breach if non fulfilment can be exonerated
under the law, for example, due to operative mistake or a supervening event rendering fulfilment
impossible. Common examples of breach include attempted fulfilment outside agreed time limits,
(mora); purposeful or intentional non fulfilment, (repudiation); and poor or unsatisfactory fulfilment,
(positive malperformance).
10.1

Mora debitoris

[1]

GOLDSTEIN AND WOLFF v MAISON BLANC (PTY) LTD 1948 (4) SA 446
(Cape Provincial Division, South Africa, 24 September 1948)

In November 1944, the defendant Company, Maison Blanc (Pty.) Ltd., placed an order in Cape Town
with the plaintiffs, Messrs. Goldstein and Wolff of Johannesburg, manufacturers of ladies clothing,
for 9 frocks of a total value of 52 13s. The order also stated under the words Forwarding
Instructions: January/February 1945 F.O.R. Johannesburg. As the goods were railed from
Johannesburg only on the 16th April 1945, the defendant refused to accept delivery. The plaintiff
brought action in a Magistrates Court to recover the purchase price, and tendered redelivery of the
goods. The defendant pleaded that as time was of essence, and the plaintiff had failed to deliver
timeously, it was entitled to reject the goods and repudiate the contract. During the trial, the
defendant pleaded in the alternative that delay in the delivery of the goods was unreasonable, and this
was proper justification for repudiation of the contract. The Magistrate found for the defendant on the
alternative plea, but deprived it of costs for late filing of the plea. The Divisional Court held on
appeal that judgment should have been entered for the defendant on the original plea and, in that
event, there would have been no legal justification for depriving it of its costs.
HERBSTEIN, J.:
[452] I address myself therefore, in the first place, to a consideration of the natural and
grammatical meaning of the words Forwarding Instructions . . . Johannesburg. In my opinion, they
mean exactly what they say, namely, that the instructions for forwarding are that the goods shall be
forwarded by being dispatched from Johannesburg 'F.O.R.' during the months of January or February.
Mr. Lang suggested that they meant that defendant would give forwarding instructions during January
or February. This reading is not only farfetched, but it gives no effect to the words 'F.O.R.
Johannesburg'. It seems to me that if the parties had intended that the defendant should be obliged to
give 'Forwarding Instructions', the phrase would have been worded very differently. It should also be
noted that, in fact, no forwarding instructions were ever given and that plaintiff has at no time
suggested that the delay in forwarding was due to the absence of instructions. It is without hesitation
that I reject the reading suggested by Mr. Lang.
No evidence was given justifying a departure from the natural and grammatical meaning of
the words of the contract. Le Roith, however, stated that the plaintiffs had the right to forward after
the end of February. This appears to have been an assertion of a legal conclusion unrelated to any
agreement that a special or peculiar meaning attached, or should attach, to the words. But even if it
were such an attempt, it could not have succeeded, for the evidence to that effect was neither clear nor
consistent, nor sufficient to prove any agreement or a usage in the trade.
The next question that arises is whether, if the contract be read as obliging the plaintiffs to
forward the goods in the months of January or February, failure to do so entitled the defendant to
reject the goods. Mr. Lang contended that time was not of the essence of this contract, and that
consequently defendant had no right to refuse acceptance of the goods when they were tendered
towards the end of April.
Our law is clear - stipulations as to time are not regarded as of the essence of the contract
unless they are made so by express terms or it appears from the nature of the contract, or from [453]

34
the surrounding circumstances, that that was the intention of the parties. ( Mitchell v Howard Farrar
& Co . (5 E.D.C. 131 at p. 140); Bernard v Sanderson (1916 TPD 673); Mayne v Wattle Extract Co .
(1920 NPD 89), and many other decisions).
Having regard to the magistrate's finding, I will assume in plaintiff's favour that there was no
express term making it essential for the goods to be forwarded by the end of February. There is,
however, a strong presumption that time is of the essence in a mercantile transaction proper ( Reuter v
Sala (1879, 4 C.P. at p. 249); Durr v Buxton White Lime Co . (1909, T.S. 876 at p. 879); Concrete
Products Co. (Pty.) Ltd v Natal Leather Industries (1946 NPD 377 at p. 380); Mackeurtan (2nd Ed., p.
289)). The contract in this case was one between a manufacturer and a retail dealer and clearly
constituted a mercantile transaction. Furthermore it related to fashion goods which to the knowledge
of both parties were purchased for re-sale during a season which admittedly was limited in time though there was a serious dispute as to the exact extent of the period of profitable sales of such
goods. It was admitted by Le Roith that delivery in February was specially asked for; and, therefore,
he at least knew that defendant attached some importance on the time it would receive the goods. All
these considerations lead to the conclusion that in this contract the stipulation as to the date of
delivery was of the essence of the contract. If that be so, delivery some 6 to 7 weeks later was clearly
not a compliance with the contract. There was no obligation on the defendant, as alleged in the
replication, to intimate at the end of February that it no longer required the goods. It was entitled to
wait until delivery was tendered and then to repudiate ( Federal Tobacco Works v Barron & Co .
(1904, T.S. 483); Strachan & Co. Ltd v Natal Milling Co. (Pty.) Ltd. , (1936 NPD 327)).
I come to the conclusion that the magistrate should have upheld the main plea. It follows on
this view that the appeal fails.
It thus becomes unnecessary to deal with the alternative plea, and I refrain from expressing
any view thereon, except to remark that the fact that it was filed late caused only a negligible increase
in the costs. Attention must now be directed to the cross-appeal.

[454] I have already pointed out that the magistrate deprived the successful party of its costs on
the ground that an alternative plea on which it succeeded was filed late. The magistrate, however,
refrained from deciding the validity of the main plea, on which I have held the defendant was entitled
to succeed. That a great deal of the evidence led on the main plea would in any event have been
necessary and material had the alternative plea been part of the main plea, seems to have escaped the
magistrate's notice. The circumstance that the alternative plea was filed late was therefore no ground
for depriving defendant of its costs; it could only afford such ground if it were held that the main plea
was bad. Consequently the justification, if any, for the magistrate's order as to costs must rest upon his
finding that the witnesses for defendant gave false evidence.
[455] It seems clear to me that there was no deliberate attempt on the part of Mrs. Lee or Miss
Visser to mislead the Court; they were deposing to something which had happened two years
previously, and may well have been honestly mistaken. This explanation does not appear to have
occurred to the magistrate. In these circumstances I do not think that the mere fact that they deposed
to a version which proved unacceptable regarding the relatively minor question - which was never a
direct issue - of who was present when the typed order was signed, justified the magistrate in
depriving the defendant of its costs.
The other point on which the defendant's witnesses were disbelieved was whether it was made
an express term of the order that if the goods were not delivered in February they would be of no use
to defendant and would not be accepted by defendant. The magistrate accepted Le Roith's evidence
that no such express agreement was made. I can see no reason for rejecting this finding of the
magistrate. But here again the record of the evidence does not satisfy me that this was a deliberate
attempt to mislead the Court. It is admitted by Le Roith that Mr. Lee and Mrs. Lee both asked for
delivery in February; the order specifically mentions January or February as the date of delivery.
The defendant did not in para. 2 of its plea set up the case that it had been expressly agreed
that upon failure to deliver in January or February the contract would fall away. The witnesses for the
defence, being business people, may well however have believed that such a result was the natural
corollary of the obligation to deliver January/February: and I am inclined to think that many passages
in the defence evidence which literally appear to assert an express agreement that the contract should

35
fall away upon failure to deliver January/February are in truth referable to the expression of such a
belief by the witnesses, rather than to any attempt deliberately to mislead the Court.
The magistrate did not reject the whole of the defendant's evidence; on several points he
accepted it in preference to that [456] of Le Roith. In all the circumstances of the case I do not think
that the rejection of the defendant's evidence on one point justified the Court in depriving it of all its
costs. Where a Court has acted on a wrong view of the facts it cannot be said to have exercised its
discretion judicially. One of the main grounds - the late filing of the alternative plea - falls away
entirely; the other is greatly minimised with the result that the basis of the award largely disappears.
The appeal is dismissed with costs, and the cross-appeal allowed with costs.
OGILVIE THOMPSON, A.J.concurred.
NOTES
1.
Although not specifically mentioned anywhere in the judgment, this case is authority for at
least two propositions on mora debitoris. This is delayed performance by the debtor, or any party
liable to perform under the contract. The first is that failure to perform timeously may not justify
repudiation of the contract unless time is of essence of the contract. The second proposition is that
time may be made of the essence of the contract by an express stipulation, or it may appear to be so
from the nature of the contract or the surrounding circumstances.
2.
The third proposition is that where time initially is not of essence, expressly or impliedly, it
may still be made of essence through a due demand. A contract therefore may be repudiated or
cancelled for delayed performance if the debtor does not perform after being given a reasonable
period within which to perform. What is a reasonable period of time obviously will depend on the
circumstances of each case. In Nel v Cloete1972 (2) SA 150 the English translation of the

summary of the case reports that the appellant agreed to purchase a house from the
respondent on 3 October 1968, and paid an amount of R1 750 as a deposit. The balance of the
purchase price was to be paid by means of a building society bond. Transfer dragged on
because the title deeds could not be found. The respondent's attorney eventually decided to
apply for a copy. Before this application was ready, on 13th June 1969, the appellant's
attorney sent a letter of demand to the respondent demanding that transfer should be effected
within two months, i.e. on 12th August, 1969, otherwise the appellant would resile from the
contract and demand repayment of the deposit and damages. The respondent replied that the
title deeds had not yet been found. On 12th August transfer had not yet been effected. When
the appellant learnt on 22nd August that the building society had decided to withdraw the
loan because of the delay, he wrote to the respondent on 26th August that the sale must be
regarded as cancelled. An action for repayment of the deposit, damages, etc., was dismissed
by a Provincial Division on the ground that the period of two months was unreasonable. The
Appellate Division reversed this decision on appeal. It held that period of two months
allowed in the demand for performance was reasonable, if delay due to the fact that
respondent's deed of transfer could not be found was not taken into account - the more so if
the considerable period which elapsed before the date of demand was also taken into account.
It further held that the alleged impossibility of complying within the reasonable time fixed by
the demand was due to respondent's own fault. The respondent, therefore, had been in mora
on the termination of the period of two months, and was still in mora when appellant
exercised his right to withdraw on 26th August, 1969.
3.
The importance of a due demand prior to cancellation of contract in which time of
performance was not expressly or impliedly made of essence was underscored by the High
Court of Botswana in at least two cases. In Abes Canteen (Pty) Ltd and Others v Chouhan

36

and Others, 1993 BLR 382 the respondents purported to cancel the sale and transfer of shares in
Abes Canteen to the applicants and to reinstate themselves as shareholders and directors upon being
dissatisfied with implementation by the applicants of other aspects of the agreement. The High Court
held that this was unlawful as the respondents had caused the company to meet and to pass the
resolution at a time when they were no longer shareholders in the company. Martin Horwitz Ag. J.
said at pp 389 -390:
In any event, in my analysis of the contract, time was not of the essence and the
purported cancellation is therefore of no effect. (See Microutiscos and Another v.
Swart 1949 (3) SA 715(A) where the Appellate Division of South Africa held at p. 730
that:
Where a time for the performance of a vital term in a contract has been stipulated for
and one party is in mora by reason of his failure to perform it within that time, but
"time is not of the essence of the contract", the other party can make it so by giving
notice that if the obligation is not [390] complied with by a certain date, allowing a
reasonable time, he will regard the contract as at an end.
It was submitted by Mr. Matswetu that the letter of 9 November 1992 had the effect of
putting the applicants in mora. This of course is not so because they had cancelled the
agreement before the letter annexure L was written and it was merely to inform the
applicants that the agreement had in fact been cancelled. Under the circumstances
therefore, I find that the cancellation of the agreement between the parties is of no
effect. This does not mean that the respondents might not have a cause of complaint.
I make no comment or pass any opinion on that matter. My conclusion is that the
respondents' conduct in cancelling the agreement and taking transfer of the shares was
wrongful and of no effect.
In Standard Chartered Bank of Botswana v. Setlhake [2001] 2 BLR 286, a loan
agreement incorporated an acceleration clause, stipulating that in the event of default by the
debtor in payment of one or more of the monthly instalments provided for, the whole of the
amount outstanding , together with interest thereon, would become due and payable on
demand. In an application for summary judgement, the applicant did not specifically plead
that a demand had been made. The Court held that it would be unsafe to grant summary
judgment, as the debtor would have a legitimate defence at trial.
10.2

Mora creditoris

[2]

RANCH INTERNATIONAL PIPELINES (TRANSVAAL) (PTY) LTD v LMG

CONSTRUCTION (CITY) (PTY) LTD; LMG CONSTRUCTION (CITY)
(PTY) LTD v RANCH INTERNATIONAL PIPELINES (TRANSVAAL) (PTY)
LTD AND OTHERS 1984 (3) SA 861
(Witwatersrand Local Division, South Africa, 17 April 1984)

Ranch International was awarded a contract for the construction of a pipeline. It subcontracted with
LMG Construction for excavation of the trench and backfilling. Ranch International later launched an
application seeking an order that LMG vacate the construction site and be restrained from entering on
it. Ranch International alleged that the relationship LMG had broken down, making coordination of
the contract works difficult. It terminated the subcontract and engaged another subcontractor to
continue with the work. It contended that such contracts were subject to an implied term that an
employer could unilaterally terminate the contract and stop a builder from continuing with the work.
The builders remedy would be to recover damages for any loss suffered. LMG denied the existence
of such an implied term, and insisted on continuing with the contract. It alleged that damages in the

37
circumstances would not be an adequate recompense. It further alleged that lack of cooperation by
Ranch International was the main cause for alleged breakdown in the relationship between the
contractor and subcontractor. It in turn sought at an order interdicting the replacement subcontractor
from performing under the subcontract. The Court held that there was no implied or tacit term giving
an employer in such contracts the right to unilaterally terminate a construction or building contract. It
was not necessary for the purpose of giving efficacy to imply such a term into such contracts. The
matter could be resolved by applying the principle of mora creditoris. An employer or creditor who
does not cooperate or fulfil his obligations so that the debtor or builder may perform is in mora. The
employer may be compelled in forma specifica to cooperate with the builder and comply with the
contract. There is no fundamental difficulty in granting such an order under South African law.
COETZEE J:
[876] Coming to the contract in casu , there is no reason to regard it in a different light. Ranch
must persuade me that the tacit term exists. In making the allegation, which was denied, no special
facts or circumstances were relied on to suggest that in this particular contract such a [877] tacit term
was probably agreed to. Nor is there any particular feature of the terms of the contract which might
point in this direction and I therefore cannot find that this suggested tacit term has been proved by
Ranch.
How then is this type of problem dealt with by our common law? I mentioned to Mr Schutz in
argument that it seemed to me to be a case of mora creditoris and that its principles should be applied.
Counsel however eschewed this legal concept and still persisted therein at the stage of the application
for leave to appeal. He dealt with it as if it were an invention of De Wet and Yeats. This makes it
necessary that I deal briefly with this concept, which is an important and valuable doctrine in our law.

The essence of mora creditoris is contained in the [passage in De Wet and Yeats at 163 - 175
of the fourth edition of their well-known work]. Many legal problems can arise from the failure of
the creditor to co-operate with the debtor which prejudices him in his efforts to perform his bargain.
The rights and remedies of the debtor in such a case are to be found under this rubric. In casu , the
creditor operis (Ranch) refuses to co-operate with the debitor operis (LMG). If Ranch is thus in
mora creditoris, it remains to investigate the remedies allowed to the debitor in such event. The
problem is then resolved systematically (as it is in English law) instead of casuistically.

[878] An Appellate Division decision which leaves no doubt about the duty of co-operation on
the part of the creditor is Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration
1974 (3) SA 506 (A). One of the contractor's complaints was that the builder's agent, the engineer,
failed to provide drawings timeously and it relied on a tacit term as framed by it in its pleadings. The
Court a quo held that such a term as framed was not established. On appeal the majority of the Court
agreed with the Court a quo in this respect. JANSEN JA and CORBETT AJA, whilst also agreeing,
were of the opinion, however, that the appellant should be allowed to rely on a different form from
that in which it had cast the suggested term and actually framed the term which they believe the
appellant ought to have relied on. What is important for present purposes is that both these Judges
refer to the duty of co-operation which is so much of the essence of mora creditoris.

The remedy which is sought in casu is, indirectly, specific performance. [879]
[The learned judge then referred to several authorities, including a thesis by AB De Villiers, Ch 4; De
Wet and Yeats; Gokal v Moti and Another 1941 AD 304; Haynes v Kingwilliamstown Municipality,
1951 (2) SA 371; and National Union of Textile Workers and Others v Stag Packings (Pty) Ltd and
Another 1982 (4) SA 151, and continued:]
The law is clear. This is a remedy to which a party is entitled as of right. It cannot be
withheld arbitrarily or capriciously. This is another of the important differences between our law and
English law which starts off on the premise that a building contract is not specifically enforceable
unless [certain conditions] are satisfied. The right of an ordinary servant who had been dismissed

38
to enforce his contract, was in issue in the National Union Textile Workers case. The contention that
the Court would not order the reinstatement of the servant as this would amount to an order for
specific performance of an employment contract involving the rendering of personal services was
rejected. At 156E of the report, the case of Industrial and Mercantile Corporation v Anastassiou
Brothers 1973 (2) SA 601 (W) is cited with approval.
This case is very interesting as it provides a typical example of mora creditoris where the
creditor was compelled in forma specifica to cooperate with the debtor (see 610H) without the learned
Judge apparently realising that he was applying one of the principles of this doctrine. [880] See at
607E - G, from which it appears that the learned Judge had great difficulty because he
considered many authorities, both South African and English and found none which
exactly matches this situation.
He therefore proposed to mention authorities
which are in some way apt to this case and seek to apply them in what seems to me to
be a practical manner.
If, with respect, the learned Judge had been apprised of the systematic approach of our
common law to mora creditoris, his problem would have disappeared. The correct solution which he
nevertheless found (in "a practical manner") would surely have come more easily. As far as specific
performance is concerned, particularly in a case where it is a matter of forcing the creditor to cooperate so as to make it possible for the debtor to perform his contract, the learned Judge said the
following, at 609A, with which I find myself in complete agreement:
It seems to me that a Court should avoid becoming supine and spineless in dealing
with the offending contract breaker, by giving him the benefit of paying damages
rather than being compelled to perform that which he had undertaken to perform and
which, when he was called upon to perform by summons, and he chose to defy the
claim of the plaintiff. He went to the extent of engaging another person to supply the
same services for him, almost immediately. This is to my mind not a case where it can
be said to be impossible to perform either at the time when the summons was issued,
when he engaged the other supplier to install his equipment or even at the later stages,
during the trial of the action. That it would be inconvenient for him is likely, that he
will suffer some financial loss is likely, but that he has brought on himself by an
arrogant denial of his commitments and I do not believe he should earn particular
sympathy for that.
And at 610A:
There is no reason by way of evidence to assume that the seller and the supplier of
this equipment will not perform his part adequately. It is his business to install
equipment and I would assume that, in the ordinary course of events, he would do so
properly in order to earn his money. I do not contemplate, with any degree of anxiety,
the prospect of a plaintiff who has obtained a decree of specific performance in his
favour, but who has to perform his part of the contract, in order to bring about
payment, would do otherwise than perform properly.
In the process of deciding whether specific performance should be refused in casu as
contended by Ranch, a few general observations about building contracts may first be made. The
Court's difficulty of supervising the performance is traditionally in the forefront of the objection to
such an order. Cf the judgment of MAHON J supra.
I wonder if this so-called difficulty is not grossly over-emphasised. Is it not imaginary rather
than real? I could not find a case on record where such a difficulty actually arose in practice and
which had to be dealt with by the Court after an order to perform a building contract had been made.

39
Why should there be any difficulty? What is the need of supervision anyway? Does the Court ever
supervise the execution of its judgments? Surely not. Orders ad factum praestandum are made all the
time. There is no supervision thereof and no intervention by the Sheriff. If there is an intentional
refusal to perform, contempt proceedings may follow. Why should different considerations then
apply to building contracts? Accurate performance of them with the requisite skill or workmanship is
irrelevant in this context. As it is in the [881] case of every other order ad factum praestandum. The
judgment creditor will surely cancel the contract when it is unintentionally incorrectly performed.
The judgment does not replace the contract. After all, this risk, as well as that of not succeeding in
contempt proceedings, the owner took when he asked the Court for this order. It is his affair. If the
owner has elected to claim this remedy and he is prepared to take these risks, why, one may ask,
should it lie, as a matter of logic, in the mouth of the defaulting builder to advance any reason
connected with the quality of his performance or his general unwillingness, as a basis for avoiding an
order compelling him to perform his bargain?
In the instant case where the builder claims his right to perform and seeks only the employers
co-operation to make this possible, in the sense of allowing him to perform, these considerations
apply with much greater force. The interdict which enforces this duty is negative in form as it simply
prohibits Ranch from interfering with LMG. Prohibitory interdicts abound in our law and practice.
They are frequently the only practical remedies and their enforcement seldom raises problems. This
is simply another one. If LMG commits any breach of contract which entitles Ranch to resile, it is
still free to do so at any time in the future and, thereupon, to take appropriate action. The so-called
impasse on which Ranch relies is unimpressive. If it does not pay LMG, as is threatened, that is the
latter's problem to deal with in its own way. If it refuses to give LMG instructions, also as is
threatened, without having a locus paenitentiae, it will leave itself open to an action for damages by
both LMG and Fluor. If it consciously seeks to achieve this result, that is its affair. This kind of dog in
the manger attitude however strikes me as childish and not worthy of serious consideration as a socalled impasse.
I have therefore come to the conclusion that there is no reason why Ranch's duty to co-operate
should not be enforced in forma specifica. The appropriate method in this case is by prohibitory
interdict. I decided however not to make a final order but to issue a rule nisi operating as an interim
interdict. This will make it possible for Ranch still to contend, and prove, on the return day, that it
was for some valid legal reason entitled to resile from the contract.

[The learned judge then considered the application for leave to appeal against this order, and came to
the conclusion that it must be refused with costs.]
10.3

Repudiation

10.3.1 Proof of repudiation

[3]

MOLEBATSI v. MOLEBATSI [1989] BLR 1

(High Court, Lobatse, Botswana, 2 February 1989)

The plaintiff purchased from the defendant a vehicle that had been procured for her from South
Africa. The agreed price was R4 200. She paid P2 500 as an initial payment, and agreed that the
balance of R1 700 would be paid by monthly installments of R100. She experienced problems with
the vehicle. When the defendant returned from one of his many trips to South Africa, the plaintiff
allegedly informed him that as the vehicle had been giving her problems, she would not be able to pay
the balance of R1 700. The defendant was annoyed and aggressively demanded the return of the
vehicle. The keys and documents relating to the vehicle were apparently given to him by a little girl,
without permission. He drove the vehicle away and thereafter began to use it for personal purposes.
The plaintiff sued for the return of the part payment she had made for the vehicle. The defendant
alleged in response that when he demanded from the plaintiff payment of the balance of R1 700, she
intimated that she no longer wanted the vehicle and demanded a refund of her money. He contended
that it was the plaintiff who had repudiated the agreement and authorized the young girl to fetch and

40
handover the keys and documents for the vehicle. Preferring the plaintiffs testimony and evidence,
the Court held that the defendant had repudiated the contract. He could have taken other action to
enforce payment of the balance of the purchase price. By demanding the return of the vehicle, the
keys, the documents, and driving the vehicle away and using it for his own purposes, he exhibited a
deliberate and unequivocal intention no longer to be bound by the agreement. This was repudiation of
the agreement. The plaintiff, having accepted the repudiation, was entitled to recover as damages the
P2 500 initially paid for the vehicle.
LIVESEY LUKE, CJ:
[3]

The main issues for determination therefore are:

(i)
(ii)
(iii)
(iv)

what were the terms of the agreement between the parties?

was there a repudiation of the agreement?
who repudiated the agreement, and did the other party accept the repudiation?
if there was repudiation of the agreement, and acceptance thereof, what is the liability
of the guilty party?

[ After establishing the terms of the agreement as summarized above, the Chief Justice continued:]

[5]
Was there a repudiation of the agreement?
Each party alleged in his or her pleading that the other party has repudiated the agreement.
Repudiation occurs where a party envinces an intention, by word or conduct, of repudiating his
obligations under the contract. See Halsbury's Laws of England (4th ed.), vol. 9, para. 546. It may
occur either expressly, as where a party states in so many words that he will not discharge the
obligations he has undertaken, or impliedly, as where by his own act a party disables himself from
performance, or makes it impossible for the other party to render performance. See Weeramantry, The
Law of Contracts, vol. II, para. 920. Put in another way, the test as to whether conduct amounts to
such a repudiation is whether fairly interpreted it exhibits a deliberate and unequivocal intention no
longer to be bound. See Street v. Dublin 1961 (2) S.A. 4 per Williamson J. at p. 10. It must be
established that the defaulting party has made his intention clear beyond reasonable doubt no longer
to perform his side of the bargain. The innocent party has an option either to accept the repudiation or
to regard the contract as still subsisting.
In the instant case, the subject matter of the contract (i.e. the vehicle) is no longer in the possession of
the plaintiff. According to the evidence, the vehicle changed possession from the plaintiff to the
defendant in March 1986. It is also not in dispute that the plaintiff failed to pay the monthly
instalments to the defendant. Each party has claimed in his or her pleadings that the other party has
repudiated the agreement. On the basis of the evidence and of the pleadings, I hold that the agreement
has been repudiated. This leads me to the next question.
[6]

Who repudiated the agreement?

This is the most crucial question, and the answer to it will determine liability for the repudiation.
The plaintiff impressed me as a truthful witness. I believe her evidence that in March 1986
the defendant demanded the keys and documents from her in an aggressive manner. I also believe
that the girl handed the keys and documents to the defendant without the permission of the plaintiff.
The father (the plaintiff's third witness) was an impressive witness. I sensed that he did not find any
pleasure in giving evidence in a dispute involving two of his [7] children. Indeed he had made efforts
to settle the dispute within the family circle but without success. In my opinion he was a truthful
witness. I believe his evidence.
With regard to the evidence of the defendant I do not believe his evidence on this issue. He
admitted that he was annoyed at the time and spoke aggressively. I believe that it was in that mood
that he demanded the return of the vehicle, the keys and the documents. I find that by demanding the

41
return of the vehicle and driving it away and using it for his own purposes, he exhibited a deliberate
and unequivocal intention no longer to be bound by the agreement. He thereby by his conduct
evinced an intention to repudiate his obligations under the agreement. I also find that the plaintiff
accepted the repudiation.
But even if the keys and documents relating to the vehicle were handed to the defendant with
the permission or on the instructions of the plaintiff (which I do not believe), the defendant was not
obliged to take possession of the vehicle. He had his remedy if the plaintiff failed to pay the
instalments. He could have sued the plaintiff for the balance of the purchase price. Instead of
pursuing his remedy, he took possession of the vehicle, used it for his own purposes and boasted that
the plaintiff would lose both the vehicle and her money. That boast was another manifestation of the
unreasonableness and high-handedness that the defendant displayed when he demanded the return of
the vehicle.
What is the liability of the guilty party?
The defendant took possession of the vehicle for which the plaintiff had given him P2 500 as partpayment of the purchase price. The result is that the plaintiff has lost the vehicle and the defendant
has refused to refund the P2 500 or any part thereof to her.
The legal position is that an aggrieved person who has accepted the repudiation of a contract
is entitled to damages and may sue at once. The measure of damages is the loss suffered as a direct
consequence of the breach. See Gibson, South African Merchantile and Company Law (6th ed.) at p.
11. As a result of the repudiation of the agreement, the plaintiff has lost the P2 500 she paid to the
defendant. In my opinion she is entitled to that amount. A similar situation arose in Trytsman v.
Dohne 1951 (1) S.A. 736 a case which went on appeal to the Natal Provincial Division. In that case
the defendant sold and delivered a car to the plaintiff for 150. The plaintiff paid 70 down, and the
balance was to be paid by instalments. The plaintiff became aware of defects in the car two days after
the sale. Thereafter he spent 30 shillings on repairs, bought a new tyre for 8, drove the vehicle for a
total distance of 44 miles and paid an instalment of 10 on account of the price. About five weeks
after the sale the plaintiff repudiated the sale, and four days thereafter he returned the car to the
defendant. It was held that the prior conduct of the plaintiff (i.e. in exercising acts of ownership over
the car) did not preclude him from repudiating the contract. Judgment was given for the plaintiff for,
inter alia, the re-payment of the sum of 80 (i.e. the 70 down payment and the 10 instalment).
The plaintiff testified that she bought a spare wheel, spark plugs and clutch plate for the
vehicle. She made no claim for those items, nor was any evidence adduced as to the purchase price of
any of them. I therefore make no award in respect of those purchases. It is not in dispute that the
plaintiff used the vehicle for her own purposes on a few occasions between December 1985, and
March 1986. But the defendant did not counterclaim to be compensated for such use.
[8]
The defendant said that after he took possession of the vehicle from the plaintiff he paid R700
to respray it and R500 for another engine. He counterclaimed for the total amount, i.e. R1 200. The
defendant did not produce any receipt for either of the payments. If indeed he sprayed the vehicle, he
did so, in my view, for his own purposes and convenience. In any case I do not believe that he
expended R700 to respray the vehicle. I also do not believe that he bought another engine for the
vehicle. In the circumstances, the counterclaim has not been proved, and it accordingly fails.
In the result, the plaintiff's claim succeeds. I accordingly give judgment for the plaintiff for
the refund of P2 500. The counterclaim is dismissed. Costs of the claim and the counterclaim to the
plaintiff.
Judgment for the plaintiff.
[4]

KUBU INVESTMENTS (PTY) LTD v. CAPITAL GROWTH (PTY) LTD,

[2001] 1 BLR 213
(Court of Appeal, Lobatse, Botswana, 31 January 2001)

42
On 12 Septemeber 1999 Kubu Investments (Pty) Ltd agreed to sell its property, Lot 1276, Gaborone,
to Capital Growth (Pty) Ltd for P1.6 million. Parts of the property had been let to tenants, but in
clause 6.3 of the agreement the seller warranted that there are no lease agreements for the tenants and
that they occupied the premises on a monthly basis. The purchaser therefore undertook either to
formalise the tenancy or to give them one month notice to vacate. In clause 5.2 of the agreement, the
purchaser undertook that its conveyancers will arrange to transfer the property within a reasonable
period, and the purchaser would within 14 days after request furnish the seller with an acceptable
bank guarantee for the payment. Clause 9 gave the seller the right to cancel the sale if the purchaser
failed to fulfill on the due date all the terms and conditions of the deed of sale. When the seller and
the purchaser wrote jointly to the tenants advising them about the sale of the property and of the fact
that they were on a month to month tenancy, at least two tenants produced copies of their written
fixed-term lease agreements. The purchaser indicated that he wished the seller would sort out the
matter quickly. Before the matter could be sorted out, the sellers attorney, in a letter dated 15
September 1999, called on the purchaser to pay the full consideration within three days, stating that
failure to do so would be regarded as unreasonable and a breach of the agreement. On 16 September
1999, the purchasers attorney, in response, reiterated that the seller should sort out the problem of
tenants with written lease agreements, and as soon as that was done, a bankers guarantee for the
payment would be available. On 22 September 1999, the sellers attorney wrote stating that purchaser
was in breach of the agreement, and in terms of clause 9 of the agreement, the seller was cancelling
the contract. The purchaser successfully instituted action in the High Court to declare the contract
valid and enforceable. On appeal, the seller contended that contract had been repudiated by the
purchasers letter of 16 September of 1999. The court agreed that whether the letter amounted to
repudiation must be assessed objectively, but a careful reading of that letter, in the context of the letter
written on 15 September and the deed of sale indicated that it was not repudiatory in nature. It
required fulfillment of the contract by the seller. It was the sellers letter of 22 September that
purported to cancel the agreement.
SIR JOHN BLOFELD JA:
[216] The appellant's attorney is Mr Du Plessis. He wrote the letters of 15 September and 22
September. He submitted before this court that the sale was repudiated by the purchaser's attorney in
their letter of 16 September 1999. His submissions were in broad terms the same as those he put
before Collins Ag. J. at trial. He submitted that it is necessary to consider repudiation objectively. He
submitted that once the purchaser accepted rents from the tenants he exercised his right of ownership
of the property and that by so doing he was liable to pay the full purchase price within a reasonable
period. He conceded that three days might be too short a period. He further submitted that it was
immaterial what the intention of the writer of this letter was. The proper test was to consider
objectively if the letter amounted to repudiation. He submits that this letter is a clear repudiation of
the contract. He further submits that clause 6.3 which relates to the tenancies was a collateral
warranty only and that in any event it is so worded that there was no breach of this clause by the seller
as the wording is ambiguous.
I accept that the proper test for repudiation is an objective one. But apart from that I find the
appellants submissions untenable. A careful reading of the letter of 16 September read in context
with the sale agreement and the letter from the seller of 15 September convinces me that far from
being a letter of repudiation, looked at objectively, this was a letter requiring fulfillment of the
contract by the seller. The purported cancellation came from the seller alone in that letter of 22
September.
Mr Du Plessis, for the appellant at all times in his submission conceded that if he failed to
persuade the court that that letter is a letter of repudiation then his whole case collapses. He has failed
to persuade me. I find that his case has totally collapsed.
I also find that, contrary to his submission, clause 6.3 was not a collateral warranty. I further
find that the seller was in clear breach of this warranty. [217]
I note that Mr Thipe gave an explanation for his actions in relation to this fixed-term lease
which was carefully considered by Collins Ag. J. Like the trial judge I would reject his explanation.

43
The fact that there were undoubtedly written fixed-term agreements with tenants was a clear and
obvious breach of this warranty.
In my view this is enough to dispose of this matter. This appeal is dismissed with costs.
KUMLEBEN J.A. and LORD WEIR J.A. agreed
NOTES
1.
In Sweet v Ragerguhara, 1978 (1) SA 131, summarised and reproduced below, failure the
seller to give vacant possession of immovable property was in the circumstances of the case regarded
as an example of breach by defective performance, not repudiation.
2.
A more recent, and perhaps clearer illustration of repudiation of a contract for the sale or
disposal of rights in immovable property is the unreported Botswana Francistown High Court
decision in Access Holdings (Pty) Ltd v Setuke and Another (MISCA F256/2002). On 24 June 2002,
the respondent sold to the applicant under a written agreement his lease rights over Farm Q0 45,
Pandamatenga, for a purchase consideration of P80 000. The price was payable upon transfer by the
Chobe Land Board of the rights to the applicant. On 29 June 2002 the respondent informed the
applicant by telephone hat he was cancelling the agreement. This was confirmed in a letter of 9 th July
2002 written by the respondents attorneys. The applicant refused to accept the cancellation, and
applied for orders confirming that the contract was binding and enforceable, and the purported
cancellation of no force or effect. The respondent alleged in his Court papers that he cancelled the
contract because his daughter would not let him sell the farm; and that as the contract was conditional
upon approval by the Chobe land board, it could be cancelled by either party before such approval had
been granted. The Court regarded these arguments as untenable and held that the applicant was
entitled to specific performance of the contract. From pp 7 9 of the typed transcript of the
judgment, Marumo, J. said:

It is clear to me that the refusal by the first respondent to go ahead with the terms
of the agreement constitute a breach of the same. It is settled law that a breach of the
nature with which this Court is presently concerned does not necessarily terminate the
contract. The innocent party is entitled, subject to the overriding discretion of the Court,
to elect whether to accept the cancellation and claim damages, or to keep the contract
alive and enforce it. (See Myers v Abramson 1952 (3) S.A 121). The innocent partys
entitlement to specific performance of the contract is settled and comes out clearly in
the following passage by Innes J. in Farmers' Co-op Society (Reg) v Berry 1912 AD
343 at 350.
Prima facie every party to a binding agreement who is ready to carry out his
own obligation under it has a right to demand from the other party, so far as it
is possible, performance of his undertaking in terms of the contract. As
remarked by Kotze CJ in Thompson v Pullinger (1894), OR at p301, the right
of a plaintiff to the specific performance of a contract where the defendant is in
a position to do so is beyond all doubt. It is true that Courts will exercise a
discretion in determining whether or not decrees of specific performance will
be made. They will not, of course, be issued where it is impossible for the
defendant to comply with them. And there are many cases in which justice
between the parties can be fully and conveniently done by an award of
damages. But that is a different thing from saying that a defendant who has
broken his undertaking has the option to purge his default by the payment of
money. For in the words of Storey (Equity Jurisprudence, sec 717 [8] (a)) it is
against conscience that a party should have a right of election whether he would

44
perform his contract or only pay damages for the breach of it. The election is rather
with the injured party, subject to the discretion of the Court.
The applicant has demonstrated its readiness to perform its obligations by paying the
purchase price into the Trust Account of the first respondents erstwhile attorneys. It also wants
the process of transferring the rights to be commenced before the second respondent. On the
other hand the first respondent cannot simply be permitted to evade his contractual obligations
because his daughter wants him to, nor can he do so by making the unfounded claim that the
agreement is conditional and that material conditions of it have not been met. It is not. And
there are no circumstances rendering the performance of his obligations impossible.
In the light of the above factors justice would be served by the Court exercising its
discretion in favour of the enforcement of the agreement. The application consequently
succeeds.
10.3.2 Constructive repudiation
[5]

BOTSWANA HOUSING CORPORATION v. LEMPADI, [1998] BLR 131

(Court of Appeal, Lobatse, Botswana, 30 January 1998)

The respondent was employed as an accounts assistant by the appellant on 1 September 1976. While
holding the position of credit controller, his employment was terminated on 17 January 1991, in the
corporations interest and with immediate effect. He was paid one months salary in lieu of notice.
The High Court held that he had been wrongfully dismissed; that he had not been given an adequate
opportunity to answer allegations against him that finally led to his dismissal, contrary to the audi
alteram partem rule, and that the corporation had not followed its own procedures when the decision
was taken to dismiss him. On appeal, the Court considered that he had numerous disputes and
disagreements with his employers throughout his period of employment, extending over 14 years. At
the end of his six months probation, for example, he challenged the assessment of his efficiency and
the need to extend the probation by 3 months. When the corporation refused to accede to his requests
for promotion, on account of poor appraisals and lack of professional qualifications, he accused his
supervisors of malice. In 1985, he refused to cooperate with a properly and legitimately conceived
job rotation scheme, regarding it as a ploy to demote him and deny him promotion. He alleged
victimization, sought intervention of the Minister of Local Government and Lands, and instructed his
lawyers. This was contrary to clearly laid out procedures requiring such complaints to be routed
through his superiors in the corporation. In 1990, he refused to be transferred to another post in his
department, which did not involve any change in salary or terms and conditions of service. Again,
contrary to grievance procedures, he sought intervention of the Permanent Secretary, Ministry of
Local Government and lands, alleging victimisation by his superiors. He was suspended from duty
for 15 days without pay. When he took up the post after the suspension, his service was poor and he
generally refused to cooperate with his colleagues and supervisors. On 17 January 1991, he was
summoned to a staff committee meeting and advised to take early retirement with full benefits, or face
dismissal. On 18 January 1991, he indicated that he would not resign, and he was served with a letter
dated 17 January 1991, terminating his employment in the manner described above. The Court of
Appeal held that the respondents conduct and attitude throughout the period of employment had
undermined the confidence and trust on which the contract of employment is founded, and the
appellant was in the circumstances entitled to terminate the employment. The employee by his
conduct had effectively caused repudiation of his contract. The Court further held that the respondent
had been given every opportunity to make his own submissions, which he summarily rejected. The
appellant was therefore not in breach of the audi alteram partem rule
LORD ALLANBRIDGE JA:
[133] When Mr. Spilg for the appellant appeared before this court he did not attempt to argue
that the respondent had been dismissed in accordance with the provisions of the appellant's

45
disciplinary code. He adopted, for the first time in this case, the radical and fundamental approach that
the respondents conduct so undermined and damaged the working relationship between himself and
his employer that the latter was entitled to cancel the contract without more ado and dismiss him.
The authority for this approach is to be found in the recent case of Council for Scientific and
Industrial Research v. Fijen (1996) 17 ILJ 18 (A). (The Fijen case). I will return to this case later
when I come to consider the law on this topic in greater detail. For present purposes it is sufficient to
note that the Fijen case now establishes that in certain circumstances the conduct and attitude of an
employee can be such as so to damage the relationship of trust and confidence required on both sides
of a contract of employment, that the employer is entitled in law to dismiss the employee. If such a
situation did arise in the present case there will then be no necessity for this court to consider further
the nature of the alleged procedural irregularities. Such matters would be irrelevant if the respondent
had effectively repudiated his contract of employment in such a way as to entitle his employer to
dismiss [134] him, always provided that it was a fair dismissal. Keeping that possible situation in
view I will now consider what the conduct of this respondent was as revealed in the evidence
presented in the court a quo.

[After considering the conduct of the respondent as revealed by the evidence presented in the Court a
quo and the summary of it by the judge a quo, Lord Allanbrigdge JA continued:]
[150] The legal question now arises whether the appellant was entitled to treat the respondents
conduct as amounting to a repudiation by him of his contract of employment with the appellant. Mr.
Mawere said he did not dispute the law as set out in the Fijen case. His submission was that the
respondents conduct did not constitute such a material breach of contract as to be considered a
repudiation of it. In any event, he said that this case was clearly one where the employer had
dismissed the respondent for disciplinary reasons but had failed to follow the proper procedure for
such dismissal as decided by the judge a quo.
At long last, in this somewhat lengthy judgment, I am now in a position to consider the ratio
of Fijen's case and then decide whether it can be applied to the facts of this case.
The case of Fijen was decided in the South African Court of Appeal in November 1995. The
respondent employee in that case faced a disciplinary inquiry on a charge of misconduct. He was a
marine pollution engineer who had allegedly offered to do private work for remuneration without the
consent of the appellant employer. He was charged along with a co-worker, Mr. Botes, with
misconduct under the employers disciplinary code that forms part of the conditions of service. He
and Botes both refused to testify at the disciplinary hearing and both were found not guilty on the
basis that the charges had not been found proved beyond reasonable doubt. However, there followed
correspondence which indicated that in view of what had happened, the respondent wrote that he had
completely lost faith in his immediate supervisor and his divisional director and that their working
relationship was totally and permanently damaged.
In the Industrial Court and the Labour Appeal Court it was held in this case that the letters did
not amount to a repudiation of the contract. That was because in these letters the respondent made it
clear that he wished to remain in the employ of the appellant. In these circumstances the lower courts
took the view that he did not evince a clear and unambiguous intention not to go on with his contract
of employment. This view did not [151] find favour in the Court of Appeal who indicated it was too
narrow an approach. The correct approach, as set out by Harms J.A. at page 25 H-I, was:
The correct question to ask appears to me to be whether the respondent's attitude
constituted a material breach of his contract (repudiation in the wide sense), a breach
that entitled the appellant to cancel it.
The learned judge said at a later stage in his judgment, at p. 26D-G:
It is well established that the relationship between employer and employee is in
essence one of trust and confidence and that, at common law, conduct clearly
inconsistent therewith entitles the innocent party to cancel the agreement. (Angehrn
& Piel v. Federal Cold Storage Co. Ltd 1908 TS 761 at 777-8). On that basis it

46
appears to me that our law has to be the same as that of English law and also that a
reciprocal duty as suggested by counsel rests upon the employee. There are some
judgments in the LAC to this effect (for example, Humphries & Jewel (Pty)Ltd v.
Federal Council of Retail and Allied Workers Union & others (1991) 12 ILJ 1032
(LAC) at 1037G.) I may add that this much was not placed in issue for the respondent
by Mr. Scholtz. It does seem to me that, in our law, it is not necessary to work with
the concept of an implied term. The duties referred to simply flow from naturalia
contractus.
I gratefully accept and agree with these quotations from the learned judge who gave the
leading judgment in this case. It was concurred in by three of the other judges of appeal, although the
remaining judge gave a dissenting judgment.
In these circumstances I am of the view that the courts of Botswana should be prepared,
where appropriate, to follow the ratio of the majority decision of the South African Court of Appeal in
the Fijen case. Thus the test to be applied in cases of this nature is whether the attitude of either the
employer or employee constituted such a material breach of the employees contract of employment
that the innocent party was entitled to cancel it. Having applied this test it is, of course, necessary to
go on to consider whether the method of cancellation adopted by the innocent party was a fair
dismissal and was in accordance with the audi alteram partem rule.
Applying this test to the somewhat exceptional circumstances of the present case I am more
than satisfied that the respondents attitude throughout the period of his employment, and especially
during the latter stage of it, was one which finally resulted in a complete destruction of the very
foundation of the relationship between himself and the appellant, based as it must be on trust and
confidence between the parties. It is unnecessary to repeat the outline of the appellants conduct,
which demonstrated such an attitude, as it has already been fully and very carefully outlined by the
judge a quo as shown in the extracts I have narrated from his judgment. The final recommendations
made by the Divisional Accountant, the Finance Manager [152] and the General Manager all
demonstrate that by January 1991 the conduct of the respondent was such that it could no longer be
tolerated in his own and the corporations interests. Their respective memoranda bear eloquent
testimony to the fact that the substratum of the respondents contract of employment had been so
undermined by his attitude and conduct that the appellant was entitled to cancel it and dismiss the
respondent.
Were the circumstances of that dismissal fair? I have no doubt that they were. The appellant
corporation did not rush to judgment. The Divisional Accountant and the Finance Manager both
recommended, on 12 November 1990, the dismissal of the respondent in their respective memoranda
forwarded to the General Manager. He did not write his own memoranda recommending the
respondents dismissal until 16 January 1991. The following day was an eventful one. The
respondent was summoned to the General Managers office at 8.30 a.m. He was told of the intention
of the General Manager to submit a full report to board members, to whom the respondent had
previously complained directly. The General Manager asked the respondent if he had any comments
on such a proposed course of action. The respondent replied he had nothing to say.
Half an hour later at 9 a.m., the General Manager attended a meeting of the board members to
whom he had circulated his own memorandum. After a lengthy discussion, the members came to the
conclusion that:
In view of the above (the General Managerss Memorandum) and in consideration of
his age and length of service with the corporation, the Committee resolved that
Lempadi be asked to retire with full benefits. Failure to accept this proposal he should
be dismissed.
The General Manager again saw the respondent at 2.30 p.m that same afternoon and told him
of the board's decision. The two Deputy General Managers present pleaded with Mr. Lempadi to
accept the first option. Even at this stage the respondents superiors were prepared to be reasonable
and give him the opportunity to depart on the most favourable financial terms. The respondent was
not persuaded at that stage to accept such a reasonably generous offer and asked for and was given the

47
right to sleep on it. However, the next day at 8.15 a.m. the respondent refused to accept the
opportunity of premature retirement and, true to his character and attitude which had been
demonstrated so often in the past, he refused to resign and said that he had again placed matters in the
hands of his lawyers.
In such a situation I am of the view that not only did the appellant corporation act reasonably
but, out of genuine concern for the welfare of the respondent, went further than the normal employer
could be expected to go in terms of patience towards, and concern for, an undeserving employee.
They acted with a compassion which was spurned by the respondent. They dismissed him in a
reasonable manner. After giving the respondent every opportunity to make his own submissions to
them which he summarily rejected, they were clearly not in breach of the audi alteram partem rule.
One last matter remains. The respondent was dismissed by having his services with the
corporation terminated in the corporations interest. Whilst the situation in this case did not require the
disciplinary procedure laid out in paragraph 16 of the revised General Conditions of Contract, as
[153] this was a case where the Fijen ratio applied, he was dismissed with a period of only one
months notice. By virtue of the terms of paragraph 21.4 of these General Conditions which relates to
a Termination of Employment with Notice, he was entitled to two months notice. He was
dismissed in terms of 24 .4.5 which covers any other reasons in the interest of the corporations
operation. He had more than 10 years service and in terms of paragraph 21.3 he was entitled to
two calendar months notice. As he only received one months notice he is accordingly entitled to a
further months salary calculated on his monthly earnings at the time. This, however, is a very
marginal amount and will not affect the award of costs in favour of the appellant.
I would therefore allow this appeal, with costs. I would also make an order for payment to the
respondent by the appellant of an additional one month's salary in lieu of notice.
TEBBUTT J.A. and HOEXTER J.A. agreed
10.3.3 Anticipatory repudiation or breach
[6]

TUCKERS LAND AND DEVELOPMENT CORPORATION (PTY) LTD v

HOVIS, 1980 (1) SA 645
(Appellate Division, South Africa, 19 November 1979)

The respondent bought two erven from the appellant, a township developer, in a proposed
township, Klippoortjie Residential Township. The contract incorporated a suspensive
condition. It was subject to the due proclamation of the township, but the respondent was
required to pay R2 639, 19 prior to the proclamation of the township. The appellant
experienced difficulties in obtaining the proclamation, and as a result thereof a new plan had
to be prepared and submitted. On this plan the respondents erven disappeared and were
superceded by a school site. The respondent successfully sued in the Witwatersrand Local
Division for the return of the sum he had paid. The appellant contended on appeal that the
respondent was not entitled to claim a return of the monies before, at the earliest, approval by
the Township Board of the new plan. The Court held that as soon as the new plan was
submitted, a reasonable person would conclude that the appellant did not intend to fulfill its
part of the bargain. The contract had been repudiated. This was anticipatory breach, a
doctrine that was part and parcel of South African law. The respondent was entitled to
rescind and claim back what he had paid under the contract.
JANSEN JA:

48

[650] The issue involves the so-called doctrine of anticipatory breach. It originated in
England and has been received by us; it has also spread inter alia to the United States - but
not without the expression of certain reservations by Prof Williston. Its true basis has been
contentious, but at least in its country of origin, or so it seems, the view is now favoured that
the anticipatory breach is a violation of not a future, but an existing obligation (Furmston
Cheshire and Fifoot's Law of Contract 9th ed at 569 - 70). In a review in the Law Quarterly
Review 1973 465 - 469 at 467 the author, D Tiplady, says:
The better view would therefore seem to be that anticipatory breach so called
is the actual breach of an implied obligation of present performance. The nature
of the obligation thus imposed will depend on the circumstances of the
particular case, but, generally speaking, a promisor will be liable if he evinces
an intention not to be bound by the contract.
[651] There can be little doubt that, in grafting the doctrine of anticipatory breach upon our
law, the view that such a breach is the breach of an existing obligation would be consonant
with our law. It could be taken as an obligation ex lege, ie implied by law [T]here appears
to be no real difficulty in ascribing such an obligation to flow, by operation of C law, from
the bona fides underlying contractual relations in our law. All our contracts are said to be
bonae fidei (cf Wessels Law of Contract paras 1976, 1997).

[652] It could be said that it is now, and has been for some time, felt in our domain, no
doubt under the influence of the English law, that in all fairness there should be a duty upon a
promisor not to commit an anticipatory breach of contract, and such a duty has in fact often
been enforced by our Courts. It would be consonant with the history of our law, and also
legal principle, to construe this as an application of the wide jurisdiction to imply terms
conferred upon a court by the Roman law in respect of the judicia bonae fidei. It would not
then be inapt to say, elliptically, that the duty flows from the requirement of bona fides to
which our contracts are subject, and that such duty is implied in law and not in fact. It is
interesting to note that according to Williston Law of Contracts 3rd ed para 1337A the
German law has developed along somewhat similar lines (and cf De Wet and Van Wyk ( op cit
at 152 - 3)).
It should therefore be accepted that in our law an anticipatory breach is constituted by
the violation of an obligation ex lege , flowing from the requirement of bona fides which
underlies our law of contract. It would also be desirable, in order to obtain clarity of thought,
to jettison the terminology of offer and acceptance in this regard, and to denote a creditors
decision to act upon an anticipatory breach not as an acceptance but as an election. (Cf Kerr
Law of Contract 2nd ed at 289 - 90.) Once the existence by operation of law of an obligation
not to commit an anticipatory breach is accepted, the question remains as to how that
obligation can be violated. The answer generally given is: by repudiation. Tiplady, however,
supra at 468, mentions that
one would welcome the release of the doctrine of anticipatory breach from the
confines of repudiation, and its trammels of 'intention.
On the previous page he points out that
an anticipatory breach may arise even though the promisor cannot be said to
have repudiated the contract.

49

There is much to be said for a wider view of anticipatory breach and to recognise a
classification of the modes of violation along the lines [653] suggested by Nienaber ( supra at
36). However, for present purposes, the inquiry may be directed at repudiation, as a well
recognised form of anticipatory breach. The question to be answered may then be posed as
follows: did the appellant repudiate his contract with the respondent?
He certainly did not do so explicitly. It is, however, generally accepted that a promisor
may do so by conduct. The question in the present case is therefore whether, by drawing up a
new plan for submission to the authorities, and therein allocating the respondents erven to a
school site, the appellant has repudiated the contract.
What the proper test is to be applied to the promisors conduct is not obvious, as there
are, what appear to be, conflicting dicta in this regard. This Court, however, seems to have
gravitated in the direction of an objective test based upon the reasonable expectation of the
promisee. In Ponisamy and Another v Versailles Estates (Pty) Ltd 1973 (1) SA 372 (A) at
387B the following passage from the judgment of DEVLIN J in Universal D Cargo Carriers
Corporation v Citati (1957) 2 QB 401 at 436 is cited with approval:
A renunciation can be made either by words or by conduct, provided it is
clearly made. It is often put that the party renunciating must evince an
intention not to go on with the contract. The intention can be evinced either by
words or by conduct. The test of whether an intention is sufficiently evinced by
conduct is whether the party renunciating has acted in such a way as to lead a
reasonable person to the conclusion that he does not intend to fulfil his part of
the contract.
The test here propounded is both practicable and fair, and this is the test which I propose to
apply in the present case.
The question is therefore: has the appellant acted in such a way as to lead a reasonable
person to the conclusion that he does not intend to fulfil his part of the contract? Obviously,
the reasonable person must be placed in the position of the respondent. Would he, in that
position, have inferred that the appellant no longer intended to deliver erven 95 and 97? In
my view, it would have been obvious to him that, in an attempt to obtain proclamation of the
township by submitting the new plan for approval, the appellant was sacrificing his rights to
transfer of the erven. It follows that the appellant did commit an anticipatory breach of the
contract. As it related to the whole of the contract, the respondent was entitled to rescind and
to claim back what he had paid.

[654] The appeal is dismissed with costs.

MULLER JA, KOTZ JA, JOUBERT JA and VILJOEN AJA concurred.
10.4

Defective performance

[7]

SWEET v RAGERGUHARA, NO, AND OTHERS 1978 (1) SA 131

(Durban and Coast Local Division, South Africa, 9 September 1977)

The applicant purchased from respondents immovable property described in the deed of sale as Lot 4
Glen Anil Township for the sum of R160 000. A sum R10 000 was payable at the conclusion of the
sale, and a guarantee was to be furnished for the balance of the purchase price on or before 10
December 1976. The agreement stipulated that vacant occupation of the property will be given on 1
January 1977. Vacant occupation was not given on that date. By a letter dated 7 March 1977, the

50
applicants attorney gave respondents a notice of intended rescission, which called upon them to give
vacant occupation of the property within 30 days. At the expiration of this period, one person was
still in occupation of one of two buildings on the property. The applicant applied in motion
proceedings for an order declaring that the agreement had been lawfully cancelled. The respondents
contested the legality or effectiveness of the notice of rescission for what may or may not have been a
material breach of the contract. The Court held that failure by the respondents to give the applicant
vacant occupation by 1 January 1977 was a breach of the agreement. Whether it was a material
breach could only be decided upon by viva voce evidence. The Court distinguished between breach
through mora and defective performance. It held that the case involved the latter form of breach. The
notice of rescission required for this form of breach had to relate to the materiality of the breach, an
issue to be resolved through viva voce evidence. The notice of rescission was also ineffective because
it was equivocal. It was not clear whether the contract had been cancelled or it would remain in force
if vacant occupation would be given within the time set.
KUMLEBEN, J.:
138] Mora is the failure without lawful excuse to perform a promise timeously; mora is, in
essence, a breach of the time factor of a promise". ( Mulligan, op. cit ., p. 283). As Voet , 22.1.24, puts
it: Mora est solutionis faciendae vel accipiendae frustratoria dilatio. Our common law did not
recognise any general right to resile when a debtor was in mora [Nel v Cloete 1972 (2) SA 150
(AD) at p. 170G.] Hence the introduction of such a right in certain circumstances by notice of
rescission. [Microutsicos and Another v. Swart 1949 (3) SA 715 (AD) at pp. 729 730.]
Defective performance, on the other hand, relates to timeous performance not in accordance
with the terms of the agreement [cf. De Wet and Yeats,Kontraktereg, 3rd ed at p. 123]. In such a
case, a right to cancel, when such performance is materially defective has always been recognised
in our law without any preceding notice of rescission. If, however, the defective performance is not of
that order no right to cancel exists. The rights of the innocent party are then limited to other forms of
relief. Cf. Mulligan, "Damages for Breach", vol. 74, S.A. Law Journal , p. 61; Aucamp v Morton,
[ 1949 (3) SA 611 (AD) at p. 611. ]
Thus it clearly emerges that these two forms of breach of contract are different in character
and that different rules relating to the right to cancel apply to each. This is recognised and
emphasised in Cloete's case. (See pp. 170 and 173.)
It may appear to be somewhat anomalous that a party to a contract, who fails to carry out a
vital term of a contract, is better placed than one whose timeous performance is materially defective.
In the former case the defaulting party must receive a notice of rescission before a right to resile
accrues. The explanation for this, however, appears to lie in the fact that in the latter case the breach
is construed - no doubt in some cases somewhat artificially or constructively - as
one which evinces an intention on the part of the defaulter no longer to be bound by
the terms of the contract for the future
( Aucamp v Morton, supra at p. 619). On the other hand, the mere failure to carry out such an
obligation on time, which in certain instances may be due to an oversight, is not viewed in the same
light.
In the present case we are in fact dealing with defective performance and not with a mora
situation. It follows, if the above reasoning is correct, that both counsel were wrong in submitting with different objectives in view - that, on the facts of this case, the notice of rescission has any
relevance at all.
In the light of this conclusion it is not necessary to deal with the various submissions, which
questioned the validity of the notice of rescission. I [139] shall, however, briefly discuss one of the
arguments advanced by Mr. Raftesath in this regard, which was directed at the form of the notice of
rescission in the instant case.
As one would expect, one of the requirements relating to such a notice is that
the party giving the notice must be able, ready and willing to proceed to completion.

51

This is a quotation from Stonham, The Law of Vendor and Purchaser , cited with approval in Cloete's
case, supra at p. 171E - F. A notice will normally either expressly or impliedly signify such ability
and willingness and, if it has not been preceded by any communication of cancellation, no problem is
likely to arise. If, however, the innocent party has purported to cancel, two situations may exist. If
the agreement has in fact been cancelled the agreement is at an end and cannot be unilaterally revived.
(See Chesterfield Investments (Pty.) Ltd. v Venter, 1972 (2) SA 19 (W) at p. 26). In such a case the
notice must, expressly or impliedly, contain an offer of waiver or abandonment of such cancellation
or, positively viewed, an offer to reinstate the agreement. An acceptance by performance on the part
of the defaulting party in accordance with the terms of such a notice would then revive it. (Cf.
Neethling v Klopper en Andere , 1967 (4) SA 459 (AD).) In the present case the applicant has
purported to cancel but whether this has had the effect of bringing the agreement to an end is still to
be determined by viva voce evidence. This, however, is to my mind a distinction of no consequence.
Even if the agreement is in fact not validly cancelled, he remains under duty to retract his act of
cancellation, expressly or impliedly, and thereby evince a willingness to perform. In such a case the
duty, if anything, is a higher one since an unlawful cancellation is in itself a repudiation of the
agreement (cf. De Wet and Yeats, supra at p. 117; Amod Bayat v Doherty , 1919 NPD 44).
In this regard, and generally, a notice of rescission ought to be clear and unequivocal. (Cf.
Ponisammy and Another v Versailles Estates (Pty.) F Ltd ., 1973 (1) SA 372 (AD) at p. 385). A
defaulting party is entitled to know that, should he respond to the notice (which may involve him in
expense and inconvenience), the agreement will be acknowledged by the other contracting party and
that he will carry out his obligations under it. As already stated, a notice requiring performance will,
in the ordinary course, imply such acknowledgment of willingness to perform. Even if it is somewhat
ambiguous, the maxim interpretatio charterum begnigne facienda est ut res magis valeat quam pereat
would no doubt be applied.
However, the notice of rescission sent in this case appears to be equivocal, if not wholly
inconsistent. The fourth paragraph thereof, which is the relevant one, reads as follows:
However, without in any way conceding that the agreement between the parties has
not been validly cancelled our client hereby calls upon your client to give vacant
occupation of the property to our client within 30 days from date hereof
It will be seen that on the face of it there is no clear indication that the applicant, whatever the reaction
of the respondents might be, will not still rely on his cancellation. In fact he expressly persists in his
attitude that the agreement has been validly cancelled.
It is possible that other admissible evidence, at this stage not before me, may reveal the letter
in a different light or establish that due notice of [140] rescission was given. For this reason I refrain
from any final pronouncement on this question. However, ex facie the notice as contained in the letter,
in my opinion there is much to be said for the view that it was not a valid notice.
In the result the appropriate order is the one to which counsel agreed, namely, that the matter
be referred for the hearing of oral evidence on the disputed issues and that the costs of the application
be reserved for decision at such hearing.
10.5

Impossibility of performance

[8]

PETERS, FLAMMAN AND CO. V. KOKSTAD MUNICIP ALITYI1Y 1919 A.D. 427
(Appellate Division, South Africa, 8 August 1919)

In 1906, the Kokstad Municipality contracted with a partnership for the lighting of the streets of
Kokstad with acetylene gas for a period of 20 years. The contract was ceded to the defendants,
another firm, in 1910. In 1915 partners in the firm were declared enemy subjects and interned by the
Minister of Finance. In 1916 a Treasury Order restricted the business of the partnership and a
Controller was appointed to supervise and carry out its terms. A further Order for the winding up of

52
the business was made in 1917. With nearly 10 years of the contract to run, the Municipality initiated
action in the Cape Provincial Division claiming 20 000 damages for breach of contract, and
forfeiture of plant and machinery erected and installed by the firm in pursuance of the contract. The
Court granted absolution from the instance on the claim for damages, but gave judgement for the
plaintiff on the second claim. The Appellate Division granted judgement for the defendant on both
counts, and ordered the plaintiff to pay costs. It held that the forfeiture clause in the contract was in
the nature of a penalty for breach contract. As an Act of State had rendered the contract impossible of
performance, the contract had expired. There could be no breach if it could not be performed, and if
there was no breach, there was no basis for invoking the forfeiture order.
SOLOMON, A.C.J.:
[434] It will be convenient to deal first with the cross-appeal of the plaintiff against the judgment of
absolution from the instance on the claim for damages for breach of contract. The learned Judge held
that, inasmuch as the defendants had been deprived by the action and authority of the State of the
power of carrying out their contract, this was a good answer to the claim for damages. In my opinion
that was a perfectly right decision. By the order of the 18th May, 1911, under Act 39 of 1916, the
business of the first defendants was ordered by the Treasury to be wound-up, they themselves having
been previously interned as enemy subjects, and the second defendant was appointed to carry out the
order. In these circumstances it is clear that by virtue of this Act of State it became impossible for the
first defendants to perform their obligations under the contract. Nor was the second defendant in any
better position. For his authority under Transvaal Act 31 of 1909 was limited to carrying on the
business of the partnership only in so far as might be necessary for the beneficial winding up thereof,
and his evidence was clear that it was not necessary to carryon the working of the plant for the
purpose of winding up the estate. Thereafter in accordance with his duty as controller he
proceeded to realize the property of the partnership, and paid over to the Custodian of Enemy property
the sum of 31,114. The position therefore, was that by the order of the Treasury winding up the
business of the partnership it became impossible for the defendants to carry out the contract with the
plaintiff, and the question is whether in these circumstances they can be held liable for damages for
breach of contract.
By the Civil Law a contract is void if at the time of its inception its performance is
impossible: impossibilium nulla obligatio (D. 50.17.185). So also where a contract has become
impossible of performance after it had been entered into the general rule was that the position is then
the same as if it had been impossible from the beginning: etsi placeat extingui obligationem si in eum
casum incideret a quo incipere non potest: (D. 45.1.140, 2). [435] It is true that there are
exceptions to the general rule laid down in the lex of the Digest cited above, which concludes thus:
Non tamen hoc in omnibus verum est. For the purposes of this appeal, however, it is not necessary
to discuss the exceptions, as there is no suggestion that the present case falls within any of them. Nor
is it necessary to consider generally what are the circumstances in which it can be said that a contract
has become impossible of performance. For the authorities are clear that if a person is prevented from
performing his contract by vis major or casus fortuitus, under which would be included such an Act of
State as we are concerned with in this appeal, he is discharged from liability.
Unfortunately the rules of the Civil Law appear to have been ignored in several cases on this
subject which have come before our Courts, which have been guided entirely by the decisions of the
English Courts. Thus in Hay v. Divisional Council of King Williams Town (1 E.D.C. 100). SMITH,
J., quoted with approval the law as laid down in Paradine v. Jane (Aleyn 26) and in Nicol, v.
Marshland (L.R. 2 Exchequer Div. 4), where the Appeal Court stated the ordinary rule of law to be
that when the law creates a duty and the party is disabled from performing it without any default of
his own by the Act of God or the Kings enemies, the law will excuse him: but where a party by his
own contract creates a duty he is bound to make it good notwithstanding an accident by inevitable
necessity. Later on, however, the learned Judge says: I wish to guard myself against being
supposed to imply that a party who has imposed upon himself to charge by his own contract is under
the Roman -Dutch law bound in every case to make it good, notwithstanding the contingency that has
arisen was caused by vis major or actus Dei, as it is called [436] in the law books.

53
[ The learned Acting Chief Justice then referred to restatements of the law in other cases such as
Norden v. Shaw (2 M. 150); Coombs v. Muller (1913, E.D.J...D, 433); and Morgan and Ramsay v.
Cornelius and Hollis (31 N.P.D. 458), and continued thus:]
This rule, however, as laid down in Paradine v. Jane, is not consistent with the principles of the Civil
Law, and indeed it has been considerably modified by later English decisions. Thus in Horlock v.
Beal (1916, 1 A.C. 525), LORD WRENBURY said: Where a contract has been entered into and by a
supervening cause beyond the control o:f either party its performance has become impossible, I take
the law to be as follows, - a party has expressly contracted to do a lawful act come what may - if in
other words he has taken upon himself the risk of such a supervening cause - he is liable if it occurs
because by the very hypothesis he has contracted to be liable. But if he has not expressly so
contracted and from the nature of the contract it appears that the parties from the first must have
known that its fulfilment would become impossible if such a supervening cause occurred, then upon
such a cause occurring both parties are excused from performance. In that case a condition is implied
that, if performance becomes impossible, the contract shall not remain binding. And in Tamplin
Steamship Co. v. Anglo- Metrican Petroleum Products Co., Ltd. (L.R. 1916, 2 A.C. 422), [437] LORD
PARKER said: My Lords in considering the question arising on this appeal it is, I think, important to
bear in mind the principle which really underlies all cases in which a contract has been held to
determine upon the happening of some event which renders its performance impossible. This
principle is one of contract law depending upon some term or condition to be implied in the contract
itself and not on something entirely dehors the contract which brings the contract to an end. And
LORD LOREBURN said: An examination of the decisions confirms me in the view that, when our
Courts have held innocent parties absolved from further performance of their promises, it has been
upon the ground that there was an implied term in the contract which entitled them to be absolved.
Sometimes it is put that performance has become impossible and that the party concerned did not
promise to perform an impossibility. Sometimes it is put that the parties contemplated a certain state
of things which fell out otherwise. It will be seen, therefore, that although the English law looks at
the subject from a different point of view from ours, in the result the difference between the two
systems is not very great. And indeed, if this case had been tried in an English Court of Justice, I am
disposed to think that the defendant would have been held to have been discharged from their
obligations under the contract. But, however that may be, it seems clear that by our law, which is
based upon the Civil Law, the contract was extinguished so soon as it became impossible for the
defendants to carry it on owing to the order of the Treasury winding up their business. And if the
contract had come to an end, there could be no further breach of it, and consequently no action would
lie for damages for breach of contract.
It follows, therefore, that the cross-appeal of the plaintiffs against the judgment of absolution
from the instance on the claim for damages fails.
It remains then to consider the appeal of the first defendants against the declaration of
forfeiture of their plant under clause 46 of the contract. That clause stipulates that should the
contractor fail to provide street lighting for a period of 6 months the said contractors will and do
hereby agree to forfeit their entire rights and interest in the said plant to the said Municipality. Now
it is clear that this was a provision for a penalty in case of [438] breach of contract by the defendants
of their obligation to light the streets of the Municipality. If there was no breach of contract, however,
it follows that no penalty had been incurred, and as has been already pointed out, a contract which has
come to an end cannot be broken. In his judgment the learned Judge discusses at some length the
question whether the penalty clause was a reasonable one or not. He comes to the conclusion that it
was, and that it was not inequitable that the plant should be declared forfeited. That question,
however, would arise only if the contract had been still alive: as, however, it had expired, there could
be no breach and therefore no forfeiture.
That part of the judgment, therefore, which declared a forfeiture of the plant cannot stand.
The result is that the appeal is allowed, and the cross-appeal is dismissed, with costs against the
respondent. As regards the form of the judgment in the court below absolution was granted on the
claim for damages, but it would have been better to have given judgment for the defendants. The
order will therefore be altered to read as follows: the Court grants judgment for the defendants on
both claims, the plaintiff to pay the costs of the action.

54

C. G. MAASDORP, J.A and DE VILLIERS, A.J.A., concurred.

[9]

BENJAMIN V MEYERS 1946 CPD 655

(Cape Provincial Division, South Africa, 23 September 1946)

The respondent, as plaintiff, sued in a Magistrates Court for cancellation of a lease of certain
premises in Port Elizabeth, and for the ejectment of the lessee. The premises were let out for a garage
business. In Clause 12 of the lease, the lessee undertook that he would have at all times for sale
sufficient supplies of such brands of petrol and oils as he was permitted to stock and sale. Clause 13
provided for cancellation of the lease in the event of breach of any of its conditions. The plaintiff
alleged that contrary to clause 12, the lessee at a certain time failed to have for sale on the premises
sufficient or any supplies of petrol. The lessee was in 1945 convicted of a contravention of Petrol
Control Regulations, in consequence of which the supply of petrol to the lessee as a reseller was
prohibited for an indefinite period. The Magistrate gave judgement for the plaintiff with costs. The
lessee contended on appeal that failure to stock petrol on the premises was due to an act of state. The
Court dismissed the appeal, holding that the doctrine of impossibility of performance may not be
invoked where performance was made impossible as a direct result of a partys own wrongful
conduct.
HERBSTEIN, A.J.:
[660] The onus of establishing a breach of a condition of the lease which would justify a
cancellation was on the plaintiff. I am satisfied that he discharged such onus for the evidence showed
that on the 16th November 1944 there was no petrol available for sale and that from that date
onwards, defendant could not, and [661] did not, receive any further supplies from the oil companies.
That he may have received supplies from another source is a possibility but not a probability in view
of the provisions of Reg 11 (5) of War Measure 53 of 1943 as amended by War Measure 108 of 1943.
Prima facie, therefore, the cancellation by plaintiff was justified and entitled him to eject the
defendant. But Mr. Gordon for the defendant argued that the evidence led for the plaintiff established
that the defendants failure to have available sufficient supplies was due to an Act of State which
made it impossible for him to perform this term of the contract and that, therefore, plaintiff was
debarred from cancelling the contract unless and until he proved that the impossibility had been
created by defendant. He submitted that the plaintiff did not discharge this onus is inasmuch as there
was nothing to show that the act of the Controller in prohibiting further supplies to defendant was the
direct result of the defendants conviction.
For the moment I shall assume, without deciding the point, hat the onus was on the plaintiff to
show that the impossibility of having sufficient petrol available for sale was due to the act of the
defendant.
Plaintiff proved that defendant had been convicted of a contravention of Reg. 18 (4) of 'War
Measure 53 of 1943 which as originally promulgated read: Any person who buys, sells, barters or
offers to buy, sell or barter any petrol ration coupon or special petrol permit shall be guilty of an
offence.
By War Measure 110 of 1943, Reg. 11 of War Measure 53 of 1943 was deleted and a new
regulation substituted. Sub sec 2 thereof is as follows: Where a reseller is convicted of a
contravention of these regulations and the Controller is satisfied that such reseller has in the conduct
of his business been wilfully disregarding the provisions of these regulations in that he has not been
taking
all reasonably practicable measures to ensure that the provisions of these regulations are observed in
the conduct of his business the Controller may prohibit the supply of petrol to such reseller for such
period as he may deem fit or for an indefinite period.

55
Provided that before prohibiting the supply of petrol to any reseller under this sub-regulation
the Controller shall give such reseller not less than 14 days notice of the grounds upon which such
prohibition is contemplated and shall consider any representations made or information or evidence
submitted to him by such reseller within that period.
[662] This is the only regulation which gives the Controller of Petrol power to issue a prohibition
order.
I must presume that an official like the Controller of Petrol did carry out the routine laid down
by this regulation (Cape Coast Exploration Ltd. v. Scholtz (1933, A.D. at p. 76).
The defendant must, therefore, be presumed to have had notice of the grounds upon which the
Controller intended to act, namely, that the defendant either had wilfully disregarded the provisions of
the regulations or was not taking all reasonably practicable measures to ensure that the regulations
were observed in his business.
The controller may have acted on either of these grounds; it does not seem to matter upon
which he acted, for, in either event, he must have acted because of the conduct of the defendant.
When one takes all these facts into account, and remembers that in a civil case a
preponderance of probability is a sufficient basis for decision (West Rand Estates v. New Zealand
Insurance Co. (1925, A.D. at p. 262)) one is driven to the conclusion that the prohibition order was
issued because (a) the defendants conviction and (b) his conduct on one or other of the grounds set
out in Reg. 11 (2). If this be so, the further conclusion becomes inevitable, that the plaintiff did
establish that the impossibility relied upon by defendant was one created by himself.
Defendant cannot rely upon a self-created impossibility (Wessels on Contract (Vol. 1, secs
2669, 2680))2630)).
It will be noticed that I have come to the above conclusion without out any reference to the
letter from the Controller to the defendant. I do not deem it necessary to express any opinion on the
correctness or otherwise of the magistrates decision admitting the letter.
In my opinion the magistrate was correct in holding that the performance of the contract was
made impossible as a direct result of defendants own wrongful act. On this ground alone, the appeal
should be dismissed.
It seems to me, however, that the judgment in the Court below can be justified on another on
another ground.
In Hirji Hulji v. Cheong Yuo Steamship Co. (1926, A.C. 497 at 507) LORD SUMNER said: An event
occurs, not contemplated by the parties and, therefore, not expressly dealt with in their contract which,
when it happens, frustrates their object. Evidently it is their common object that has to be frustrated
not merely the individual advantage which one party or the other might have [663]
gained from
the contract. If so, what the law provides must be a common relief from this common disappointment
and an immediate termination of the obligations as regards future performance. This is necessary
because otherwise the parties would be bound to a contract which is one they did not really make. If
it were not so, a doctrine designed to avert unintended led burdens would operate to enable one party
to profit by the event and to hold the other, if he chose, to a new obligation.
It seems to me that exactly describes what the defendant is attempting to do in this case; he
desires to invoke the doctrine of impossibility of performance not in order to put an end to the whole
contract but to excuse himself from the performance of one term thereof, and thus to hold the plaintiff
to a different contract.
That he is not entitled to do so seems to me to flow from the rule that where one party proves
that a contract has become impossible of performance the whole contract comes to an end ( Peters,
Flamman & Co. v. Kokstad Municipality (1919, A.D. at p. 434)). As was said by LORD ATKIN in
Reilly v The King (1934, A.C. 176): The present case, appears to their Lordships to be determined by
the elementary proposition that if further performance of a contract becomes impossible by legislation
having that effect the contract is discharged. So far as the rights and obligations rested on contract,
further performance has been made by statute impossible and the contract is discharged. It is
unnecessary to add that discharged means put an end to and does not mean broken.
In my view the defendant cannot be heard to say that the contract has become impossible of
performance and at the same time claim that the contract should remain in existence so as to enable
him to carry on under it in a truncated form.
For the above reasons the appeal is dismissed with costs.

56

NEWTON THOMPSON, J., concurred.

[10]

BOTSWANA MEAT INDUSTRY

COMMISSION [2005] 2 BLR 397

WORKERS

UNION

BOTSWANA

MEAT

(High Court, Lobatse, Botswana, 27 October 2005)

The respondent operates abattoirs and other meat processing facilities in various parts of the country.
Following outbreaks of foot and mouth disease in the Francistown area, it closed the Francistown
abattoir. Some employees were temporarily reassigned to a different abattoir. Employees with
accrued leave were required to proceed on leave. Other employees were told to go on unpaid leave,
and were given salary advances or loans, eventually to be deducted in the usual manner from their
monthly wages. The applicants sought orders from the High Court declaring that it was unlawful to
force employees to go on unpaid leave during the closure of the abattoir, and not to pay their wages
when they were ready and available to work. It was also unlawful to force them to repay salary
advances or loans when the employer had not paid salaries that should have been paid during the
period of closure of the abattoir. The respondent contended that foot and mouth disease had been an
unforeseeable event which excused it from its employment obligations towards its employees. The
Court rejected this contention and granted the application. It held that the outbreak of foot and mouth
disease was a foreseeable event. It was only the timing which could not be foreseen or predicted. The
closure of the abattoir notwithstanding, the respondent was in the circumstances liable to provide
work to its employees and to pay wages for work provided or not provided. The respondent was in
the circumstances not entitled to plead vis major or casus fortuitous as justification for non fulfillment
of its contractual or legal obligations towards its employees.
SARKODIE-MENSAH AJ:
[399]

The issues for determination arising out of the [case] are:

(i)

Whether the outbreak of foot and mouth disease in 2002 and 2003 can be described as vis
major or casus fortuitous entitling the respondent to escape its obligations to the applicants
under their contract of employment.

(ii)

Whether the fact that the abattoir had to be closed as a result of which the respondent could
not temporarily provide work to the applicants relieved the respondent from paying the
applicants their salaries or wages.

(iii)

Whether the amounts paid to the employees during that period are loans or salary advances
which must be recovered by the respondent.

(iv)

Whether the employees who were temporarily deployed to Lobatse were entitled to be paid
their usual allowances and other benefits for the period that they were in Lobatse.

Vis major is often referred to as an act of God. It is however not merely that act of God but an
occurrence which could not have been foreseen or guarded against. It is an extraordinary occurrence
which could not or its effects could not have been guarded against, particularly the person seeking to
be excused from its effects could possibly not have anticipated it and with reasonable care and
foresight could not have avoided its devastating effects or at the minimum reduced its effects and thus
entitle him to escape of his liabilities.
Casus fortuitous is also described as a species of vis major and it includes all direct acts of
nature the effects of which could not reasonably have been foreseen or guarded against.
The sole nature of the respondents business is slaughtering cattle, packing and canning same
and other activities that are ancillary or automatically flow therefrom. The respondent relies on cattle

57
brought to it by farmers. On its own, as rightly pointed out by the respondents counsel, it does not
keep and rear cattle. It is subject to stringent regulations. It is common cause that if the farmers it
relies on do not have cattle to bring or for some other reason such as disease, cattle cannot be brought
to slaughter, it cannot operate.
Can such occurrences then, no cattle to slaughter, diseased cattle, ever be [400] anticipated by
the respondent and could such occurrences and their effects be avoided, or minimized by the
respondent? Every operation has its peculiar risks. That there will be disease outbreak among cattle,
be it foot and mouth, lung disease or others is inevitable. The respondent in its own affidavit and in
court stated that this was not the first time it had been faced with disease among cattle causing a
disruption and closure of its abattoir and of course consequent losses to its operations.
A previous incident, concerning lung disease, occurred in Maun. Then came the present
incidents, the most recent outbreaks, the subject matter of these proceedings which occurred on two
occasions, one after the other. The first outbreak was in the Matsiloje area. The announcement by the
Department of Animal Health was made by way of press release on 9 February 2002, and stated that
as a result both the Francistown and Lobatse abattoirs would be closed with immediate effect.
On the first occasion, February 2002, the Francistown abattoir was closed for five and a half
months. The second outbreak occurred within a period of just about 12 months after the first outbreak.
This time at Matopi, also in the Francistown area. The press release to this effect is dated 7 February
2003. The acting chief executive of the respondent reported that reopening would not happen until
May 2003. They were negotiating with South Africa, and if negotiations were successful, the abattoir
would start slaughtering at the end of April 2003, but a review of the situation would be made in
March 2003.
The question is, are these acts vis major which could not have been guarded against with good
planning and foresight? It looks to me that an occurrence which happens regularly cannot be said to
be a vis major. Even if the respondent could argue that 2002 was vis major, and totally unexpected, it
cannot by any principle of law be [heard to] argue that the 2003 outbreak was also vis major. This
was almost conceded to by the defence counsel who found it difficult to stick to his assertion when
the question was put to him.
There is no doubt that the respondent was aware and could have anticipated such
eventualities. It however did nothing about damage control or disaster management in the event of
such eventuality. It was easy to proceed on the let us sit and wait attitude because after all the
damage and inconvenience was going to be passed on to the employees.
As stated already, for casus fortuitous to be applicable there must be both the elements of
unforeseeability and inevitability. I have come to the conclusion that the outbreak of foot and mouth
disease is a foreseeable event. It is only the timing which cannot be foreseen or predicted. The lack
of preparedness and foresight on the part of the respondent cannot be relied on for them to plead vis
major or casus fortuitous to the prejudice of its employees.
[401] Did the fact of the closure of the abattoir absolve the respondent from meeting its
contractual obligations with its employees, principally that of paying them their wages, salaries and
other entitlements? What is apparent is that at no time did the employees fail or refuse to go work.
They at all times stood ready and willing to go to work.

[The Court then referred to Sections 16 (1) and (2), and Sections 17 (2) and 21 (1) of the
Employment Act (Cap 47:01) on the duties and responsibilities of an employer to provide work, and
to pay for the work provided or not provided, and continued:]
In the present case, the applicants (the employees) have not broken their contract of
employment. The first part of s 16(1) is therefore not applicable. Was the inability of the employees to
perform due to the default of the employer?
Has the employer failed to provide work? The answer is yes. Having thus failed is he obliged
to pay wages? Section 17(2) implies that unless the [402] contract is terminated, it shall continue to
run. That follows that the contract of employment between the plaintiff and the defendants, continued
to run. In the case of Johannesburg Municipality v O'Sullivan 1923 AD 201, a train driver claimed his
wages for the period in which he had reported for work but had done nothing because the service was
hit by a strike. The municipality argued that his right to remuneration depended on his actually doing
work. The Appellate Division found for the driver holding that as a proper construction of contract,

58
the consideration for the payment of wages was the mere tender by the train driver to work. What is
important is the tender for service, which is what the applicants did. They tendered their services,
stood ready to work, but were forced to take leave.
There was also uncertainty as to how long the closure would endure, thus making it
impossible for the applicants to mitigate their burden by looking for temporary employment as was
suggested in the To whom it may concern letter from the respondents human resources manager
dated 11 April 2002 marked annex AA13. It is pertinent to note that that letter was written over two
months after the closure of the abattoir. It is stated that closure is until further notice with no certainty
in the circular of 20 February 2002. The respondent also stated that we are looking at a minimum of
(3) months. The situation will be reviewed at the end of March 2002. There was no certainty as to
when the abattoir would re-open. Things remained quite fluid.
The applicants did not cease to be employees of the respondent. They tendered their
services, their contracts were not terminated, the respondent was obliged to pay the applicants their
agreed wages in terms of their contracts of employment. The non-payment is in breach of s 21(1) of
the Employment Act.
In the English case of Turner v Goldsmith [1891] 1 QB 544, the defendant, a shirt
manufacturer, had a five year contract with the plaintiff. One of the things the plaintiff was to do was
to sell the various goods manufactured or sold by the defendant. The defendants manufacturing
facility burnt down and so the defendant did not continue to employ the plaintiff. The plaintiff sued
for damages for breach of contract. On appeal the Court of Appeal allowed the appeal holding that the
plaintiff was entitled to substantial damages and that the defendant was not excused from fulfilling his
agreement [403] by virtue of the destruction of his manufacturing facility by fire. His plea of vis
major failed, and the court made reference to another case Taylor v Caldwell (1863) 3 B & S 826 at p
833 where the court held:
There seems no doubt that, where there is a positive contract to do a thing not in itself
unlawful, the contractor must perform it or pay damages for not doing it although in
consequence of unforeseen accident, the performance of his contract has become
unexpectedly burdensome, or even impossible.
Even though these decisions may not be binding, I find them nevertheless persuasive and
offering the correct legal position. The rule is to apply when the contract is positive and absolute, and
not subject to any conditions express or implied. The applicants contract with the respondent is
positive and absolute. I have not been told of any conditions express or implied, such as that the
applicants will not be paid in the event of disease outbreak resulting in the closure of the abattoir. This
could have been a matter of agreement in the contract which once agreed and specified would have
been binding on the parties and these proceedings would never have commenced.
I thus find that the applicants were entitled to be paid their regular wages or salaries during
the closure of the abattoir in 2002 and in 2003.
Having so found, the question of salary advances or loans can be decided without much
difficulty. During the period of closure of the abattoir, the applicants were told to do two things by the
respondent:
1.
Those who had leave were to proceed on leave.
2.
Those who did not have leave were to proceed on unpaid leave.
By implication, they remained employees of the respondent.
This is contained in the minutes of 19 February 2002. The following day (20 February) a
circular was addressed to the applicants stating, The Botswana Meat Commission will therefore not
be able to pay salaries and wages of employees. Flowing from this decision, any staff member who
needed money was to apply for a salary advance or loan, this being equivalent to the staff members
gross monthly salary less deductions such as income tax, union dues, funeral policy and others. The
applicants were then required to pay back this loan or salary advance upon resumption of duties over a
period of 24 months.
Could these payments be termed loans which must be repaid? The respondents [404]
attorney submits that this was at the instance of the applicants in terms of the minutes of 25 February
2002 which reads, Union asked if employees could be given advance. Management agreed to salary

59
advances. Mr Boko for the applicants submitted that at that stage the applicants had no choice but to
survive. I agree. Five days prior to this meeting of 25 February 2002 they had been told they would
not be paid salaries. How else were the employees and their families to survive? I would hasten to
ask if this affected managerial and other high ranking officials or were the applicants denied salaries
so that managers and bosses would be paid? I do not have an answer to this question and I will not
seek one now.
The decision is unlawful and immoral. The only reason put forward by the respondent was
that they were having financial problems, their overdraft had escalated and they had made huge
losses. By implication, the applicants were being called upon to bear the brunt of such losses and
provide the necessary cushion for same. Was that their creation?
Additionally, if the payments were advances, why the deductions for tax and others? If the
applicants were not on duty and thus not being paid salaries, why should they be made to pay tax and
the other deductions? Income tax is paid out if income earned and not out of loans. The payments
made to the applicants during the closure were salaries and wages to which they were properly
entitled. In consequence, their being made to repay it back is improper and unlawful.

[405] For those who were deployed temporarily to Lobatse, they remained regular employees
entitled to remuneration and allowances. They did not have to forego their entitlements such as
accommodation because BMC had no money and because they had no option to refuse. They needed
to survive, they were in a panic situation. Non-payment by the respondent of these entitlements is
equally unlawful.
I have thus come to the conclusion that the applicants must succeed in all respects. I therefore make
the following declaratory orders:
1.
That the decision by the respondent to send off its employees at its Francistown
abattoir on forced unpaid leave and forced leave during the outbreak of the foot and mouth disease in
February 2002 and February 2003 was unlawful.
2.
That the respondents failure to pay its employees wages during the closure of the
Francistown abattoir in 2002 and 2003 as a result of the outbreak of foot and mouth disease in the
Francistown areas was equally unlawful.
It is therefore ordered that:
1.
All amounts paid to the applicants and treated as either loans or advances are not
loans or advances but salaries. In consequence all deductions made from the salaries of the affected
are to be repaid with immediate effect, and all further deductions should cease forthwith.
2.
That all unpaid salaries and wages for the said periods are to be paid to the affected
applicants with immediate effect.
3.
That all unpaid allowances and benefits due to those employees who were deployed
to Lobatse temporarily be paid with immediate effect.
4.
All payments due in terms of this order shall not bear interest, and shall be made not
later than 21 days from the date of this order.
5.
The respondent is to pay the applicant's costs on the ordinary scale.
Application granted.