Goldfields Security Ltd. v Ermelo Mine Services (Pty) Ltd. (531/87) [1989] ZASCA 25 (23 March 1989)

Goldfields Security Ltd. v Ermelo Mine Services (Pty) Ltd. (531/87) [1989] ZASCA 25 (23 March 1989)

The Supreme Court of Appeal held that Goldfields Security Limited undertook to provide an efficient and effective security service to Ermelo Mine Services (Pty) Ltd, which included the duty to exercise due care in the selection and screening of personnel. The failure to properly screen Ben Mabuza, who had a criminal record and was instrumental in the theft, constituted a breach of contract. The loss suffered by EMS was a direct and foreseeable consequence of this breach, and the damages were not too remote. Although EMS was not the beneficial owner of the stolen money, it was the possessor and operator, and thus entitled to claim damages from Goldfields. The appeal was dismissed with costs.

Citation
[1989] ZASCA 25
Parties
Appellant: Goldfields Security Limited; Respondent: Ermelo Mine Services (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
23 March 1989
Case Number
531/87
Procedural Posture
Civil Appeal / Appeal From Judgment of Witwatersrand Local Division
Outcome
Appeal dismissed with costs.
Judges
Hoexter, Nestadt, Milne, Kumleben, Nicholas
Legal Topics
Breach of Contract, Remoteness of Damage, Causation in Contract, Screening of Employees
Commercial and Corporate Civil Procedure Breach of Contract Remoteness of Damage Causation in Contract Screening of Employees

Case Brief

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Parties

Goldfields Security Limited

Appellant

Ermelo Mine Services (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Witwatersrand Local Division

Legal Issues

  1. 1 Whether Goldfields Security Limited breached its contractual obligations to Ermelo Mine Services (Pty) Ltd by failing to exercise due care, skill and diligence in preventing theft at the mine.
  2. 2 Whether Goldfields Security Limited failed to properly screen and select personnel, specifically by employing a person with a criminal record.
  3. 3 Whether the damages claimed by Ermelo Mine Services (Pty) Ltd were too remote to be recoverable under the contract.

Ratio Decidendi

The Supreme Court of Appeal held that Goldfields Security Limited undertook to provide an efficient and effective security service to Ermelo Mine Services (Pty) Ltd, which included the duty to exercise due care in the selection and screening of personnel. The failure to properly screen Ben Mabuza, who had a criminal record and was instrumental in the theft, constituted a breach of contract. The loss suffered by EMS was a direct and foreseeable consequence of this breach, and the damages were not too remote. Although EMS was not the beneficial owner of the stolen money, it was the possessor and operator, and thus entitled to claim damages from Goldfields. The appeal was dismissed with costs.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.