Country Cloud Trading cc v MEC: Department of Infrastructure Development (751/12) [2013] ZASCA 161; 2014 (2) SA 214 (SCA); [2014] 1 All SA 267 (SCA) (26 November 2013)

Country Cloud Trading cc v MEC: Department of Infrastructure Development (751/12) [2013] ZASCA 161; 2014 (2) SA 214 (SCA); [2014] 1 All SA 267 (SCA) (26 November 2013)

The Supreme Court of Appeal held that, although the Department's accounting officer may have intentionally cancelled the completion contract without lawful grounds, this alone does not justify the imposition of delictual liability for pure economic loss suffered by a stranger to the contract. The court found that extending Aquilian liability to such circumstances would expose contracting parties to indeterminate liability, as multiple parties could claim damages arising from the same repudiation. Furthermore, Country Cloud was not vulnerable to risk, as it had alternative remedies available, such as claiming repayment from Ilima or taking cession of Ilima's claim against the Department....

Citation
[2013] ZASCA 161
Parties
Appellant: Country Cloud Trading CC; Respondent: MEC, Department of Infrastructure Development
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 November 2013
Case Number
751/12
Procedural Posture
Civil Appeal / Appeal From South Gauteng High Court, Johannesburg
Outcome
Appeal dismissed with costs, including the costs of two counsel.
Judges
Brand, Leach, Tshiqi, Theron, Saldulker
Legal Topics
Pure Economic Loss, Wrongfulness, Intentional Repudiation, Public Policy Limitation, Contractual Liability, Vulnerability to Risk
Delict Civil Procedure Commercial and Corporate Pure Economic Loss Wrongfulness Intentional Repudiation Public Policy Limitation Contractual Liability +1 more

Case Brief

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Parties

Country Cloud Trading CC

Appellant

MEC, Department of Infrastructure Development

Respondent

Procedural Posture

Civil Appeal / Appeal From South Gauteng High Court, Johannesburg

Legal Issues

  1. 1 Whether the Department can be held delictually liable to a stranger to the contract for pure economic loss resulting from intentional repudiation of the contract.
  2. 2 Whether the award of the completion contract to Ilima was valid and lawful.
  3. 3 Whether the contract was validly cancelled based on the alleged invalidity of the tax clearance certificate.

Ratio Decidendi

The Supreme Court of Appeal held that, although the Department's accounting officer may have intentionally cancelled the completion contract without lawful grounds, this alone does not justify the imposition of delictual liability for pure economic loss suffered by a stranger to the contract. The court found that extending Aquilian liability to such circumstances would expose contracting parties to indeterminate liability, as multiple parties could claim damages arising from the same repudiation. Furthermore, Country Cloud was not vulnerable to risk, as it had alternative remedies available, such as claiming repayment from Ilima or taking cession of Ilima's claim against the Department....

Court Disposition

Appeal dismissed with costs, including the costs of two counsel.

Orders

  • The appeal is dismissed with costs including the costs of two counsel.