Primat Construction CC v Nelson Mandela Bay Metropolitan Municipality (1075/2016) [2017] ZASCA 73; 2017 (5) SA 420 (SCA) (1 June 2017)

Primat Construction CC v Nelson Mandela Bay Metropolitan Municipality (1075/2016) [2017] ZASCA 73; 2017 (5) SA 420 (SCA) (1 June 2017)

The Supreme Court of Appeal held that the requirement for a new and independent act of repudiation before an aggrieved party may change its election is not supported by South African contract law authorities. The court found that the Municipality's persistent conduct—refusing Primat access to the site, appointing new contractors, and maintaining that the contract was terminated—objectively demonstrated an unequivocal intention not to be bound by the contract. Primat, having given the Municipality opportunities to repent, was entitled to reasonably perceive that the Municipality would not perform and to change its election from enforcing the contract to cancelling it and claiming damages....

Citation
[2017] ZASCA 73
Parties
Appellant: Primat Construction CC; Respondent: Nelson Mandela Bay Metropolitan Municipality
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 June 2017
Case Number
1075/2016
Procedural Posture
Civil Appeal / Appeal From Full Court of Eastern Cape Division
Outcome
Appeal upheld; order of the full court set aside and replaced with the trial court's order.
Judges
Lewis, Tshiqi, Saldulker, Swain, Molemela
Legal Topics
Repudiation of Contract, Doctrine of Election, Specific Performance, Cancellation and Damages
Commercial and Corporate Civil Procedure Repudiation of Contract Doctrine of Election Specific Performance Cancellation and Damages

Case Brief

Summary, issues, holding and outcome

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Parties

Primat Construction CC

Appellant

Nelson Mandela Bay Metropolitan Municipality

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Court of Eastern Cape Division

Legal Issues

  1. 1 Whether an aggrieved party who has elected not to accept a repudiation of contract may later change its election and cancel the contract and claim damages.
  2. 2 Whether a further act of repudiation is required before the aggrieved party may change its election.
  3. 3 Whether the Municipality's conduct amounted to persistent repudiation justifying cancellation and damages.

Ratio Decidendi

The Supreme Court of Appeal held that the requirement for a new and independent act of repudiation before an aggrieved party may change its election is not supported by South African contract law authorities. The court found that the Municipality's persistent conduct—refusing Primat access to the site, appointing new contractors, and maintaining that the contract was terminated—objectively demonstrated an unequivocal intention not to be bound by the contract. Primat, having given the Municipality opportunities to repent, was entitled to reasonably perceive that the Municipality would not perform and to change its election from enforcing the contract to cancelling it and claiming damages....

Court Disposition

Appeal upheld; order of the full court set aside and replaced with the trial court's order.

Orders

  • The appeal is upheld with costs including those of two counsel where so employed.
  • The order of the full court is set aside and replaced with: 'The appeal is dismissed with costs including those of two counsel where so employed.'