Mercedez Benz South Africa (Pty) Ltd v Buffalo City Municipality (EL 1123/11, ECD 1956/11) [2012] ZAECELLC 19 (27 September 2012)

Mercedez Benz South Africa (Pty) Ltd v Buffalo City Municipality (EL 1123/11, ECD 1956/11) [2012] ZAECELLC 19 (27 September 2012)

The court found that clause 5.3 of the electricity supply agreement is not capable of rectification, as there was no evidentiary basis for the defendant's contention that the parties intended to include the word 'or' between 'voltage' and 'frequency'. The indemnity clause, as it stands, indemnifies the defendant...

Source-derived case information.

Citation
[2012] ZAECELLC 19
Parties
Plaintiff: Mercedez Benz South Africa (Pty) Ltd; Defendant: Buffalo City Municipality
Court
Eastern Cape High Court, East London Local Court
Jurisdiction
South Africa
Judgment Date
27 September 2012
Case Number
EL 1123/11, ECD 1956/11
Procedural Posture
Civil Trial / Separation of Issues Under Rule 33(4); Determination of Preliminary Legal Questions
Outcome
The court declared that clause 5.3 of the agreement remains as it stands and indemnifies the defendant from contractual liability. The plaintiff is not precluded from relying on special damages or the duty of care, nor from claiming in delict as an alternative. Costs incurred thus far, except for the separation...
Judges
E Revelas
Legal Topics
Indemnity Clause, Contractual Liability, Special Damages, Concurrent Delictual Claim, Public Policy, Rectification of Contract
Commercial and Corporate Land and Property Delict Indemnity Clause Contractual Liability Special Damages Concurrent Delictual Claim Public Policy +1 more

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Summary, issues, holding and outcome

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Parties

Mercedez Benz South Africa (Pty) Ltd

Plaintiff

Buffalo City Municipality

Defendant

Procedural Posture

Civil Trial / Separation of Issues Under Rule 33(4); Determination of Preliminary Legal Questions

Legal Issues

  1. 1 Whether clause 5.3 of the electricity supply agreement is capable of rectification to widen the defendant's indemnity.
  2. 2 Whether the indemnity clause precludes the plaintiff from claiming damages for breach of contract.
  3. 3 Whether the plaintiff is precluded from relying on special damages and the duty of care due to the non-variation clause and parol evidence rule.

Ratio Decidendi

The court found that clause 5.3 of the electricity supply agreement is not capable of rectification, as there was no evidentiary basis for the defendant's contention that the parties intended to include the word 'or' between 'voltage' and 'frequency'. The indemnity clause, as it stands, indemnifies the defendant from liability for damages flowing from the agreement, and the plaintiff is not entitled to contractual damages for breaches covered by this clause. However, the plaintiff's reliance on special damages and the duty of care is not precluded by the non-variation clause or the parol evidence rule, as the damages were reasonably contemplated by both parties at the time of contracting....

Court Disposition

The court declared that clause 5.3 of the agreement remains as it stands and indemnifies the defendant from contractual liability. The plaintiff is not precluded from relying on special damages or the duty of care, nor from claiming in delict as an alternative. Costs incurred thus far, except for the separation...

Orders

  • Clause 5.3 of the agreement remains as it stands and indemnifies the defendant from liability flowing from the agreement.
  • Paragraph 5 of the plaintiff's particulars of claim does not constitute a variation of the agreement nor is it inadmissible by virtue of the parol evidence rule.