Kudu Granite Operations (Pty) Ltd v Caterna Ltd (100/02) [2003] ZASCA 64; [2003] 3 All SA 1 (SCA); 2003 (5) SA 193 (SCA) (30 May 2003)

Kudu Granite Operations (Pty) Ltd v Caterna Ltd (100/02) [2003] ZASCA 64; [2003] 3 All SA 1 (SCA); 2003 (5) SA 193 (SCA) (30 May 2003)

The Supreme Court of Appeal held that when a contract fails due to impossibility without fault of either party, the appropriate remedy is an enrichment action, specifically the condictio ob causam finitam. The court found that Kudu was enriched by receipt of the granite blocks and Caterna was impoverished by procuring their delivery. The enrichment was at Caterna's expense and unjustified. The correct measure of Caterna's entitlement was the agreed contractual value of the blocks, not their market value. The court set aside the trial court's order and substituted it with judgment for the agreed sum, interest from the date of summons, and half the costs. The court also clarified that...

Citation
[2003] ZASCA 64
Parties
Appellant: Kudu Granite Operations (Pty) Ltd; Respondent: Caterna Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 May 2003
Case Number
100/02
Procedural Posture
Civil Appeal / Appeal From Judgment of Transvaal Provincial Division
Outcome
Appeal succeeds in part; trial court's order set aside and replaced with judgment for agreed sum, interest, and half costs.
Judges
Harms, Farlam, Navsa, Heher, Shongwe
Legal Topics
Unjust Enrichment, Condictio Ob Causam Finitam, Contract Frustration, Restitution, Quantification of Enrichment, Interest on Unliquidated Debt
Commercial and Corporate Civil Procedure Unjust Enrichment Condictio Ob Causam Finitam Contract Frustration Restitution Quantification of Enrichment Interest on Unliquidated Debt

Case Brief

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Parties

Kudu Granite Operations (Pty) Ltd

Appellant

Caterna Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Transvaal Provincial Division

Legal Issues

  1. 1 Whether a party who has performed under a contract that fails due to impossibility is entitled to restitution or enrichment relief.
  2. 2 Whether the elements of an enrichment claim were established by Caterna.
  3. 3 What is the correct measure of Caterna's entitlement: market value or agreed contractual value of granite blocks.

Ratio Decidendi

The Supreme Court of Appeal held that when a contract fails due to impossibility without fault of either party, the appropriate remedy is an enrichment action, specifically the condictio ob causam finitam. The court found that Kudu was enriched by receipt of the granite blocks and Caterna was impoverished by procuring their delivery. The enrichment was at Caterna's expense and unjustified. The correct measure of Caterna's entitlement was the agreed contractual value of the blocks, not their market value. The court set aside the trial court's order and substituted it with judgment for the agreed sum, interest from the date of summons, and half the costs. The court also clarified that...

Court Disposition

Appeal succeeds in part; trial court's order set aside and replaced with judgment for agreed sum, interest, and half costs.

Orders

  • Judgment granted in favour of Caterna for payment of R933 405.68.
  • Interest on R933 405.68 at 15.5% per annum from 6 January 1999 until date of payment.