Topic 13: concurrent action in delict and contract

Chapter 10:Liability in contract excluding action in delict

Introduction

 Both delict and contract can lead to recovering compensation and have existed side by side
 Particularly relevant when it involves liability for negligent performance of professional services
- implied duty to act with reasonable car and skill

Why does concurrence matter

 Practical importance because of the following NB differences

 Purpose of remedy in BoC is to enforce the contract or to obtain compensation for non-
fulfilment of terms whereas the purpose of compensation in delict is to make right an
infringement of a right or a breach of a duty
 In delict = non-patrimonial and patrimonial
But contract NO non-patrimonial remedy
 Liability in contract NOT based on fault but it is a requirement in delict
 No apportionment of damages in contract

Thoroughbred Breeders v PWH

 Contractual liability of auditors for negligently failing to discover theft

 Company itself was careless in failing to supervise and knowing that the employee had a
history of theft
 Both forms of negligence thus contributed to the loss but the court held that PWH was fully
liable because the apportionment of damages does not apply in contract

 Time of calculating damages may be different to when time of harm occurred

 Both are subject to jurisdiction requirements
 Vicarious liability (and the extent) differs
 Different rules of private international law
 Onus of proving negligence may differ depending on which action is used
 Difference in the underlying values underpinning delict and contract
 Contract: people should be free to agree on the terms of their agreement, including
undertaking risk
 Delict: imposes liability based on the standards imposed by the operation of law. Focus
on the general standard of reasonableness whereas contract deals largely with voluntary
assumption of obligation

Exclusively delictual actions arising from a contractual relationship

 In some cases contract can give rise to delictual action

 Eg pre-contractual liability in delict can arise if the person negligently misrepresents
himself which induces the other party to contract
 Not a true concurrence though because it is not an ALTERNATIVE in this case, unless
the representation is enforced in the form of a contractual warranty
  Bayer v Frost
 Negligent misstatement that results in contract can give rise to delictual claim
 In this case the P bought a new type of herbicide spray to use on his vineyard
 Agent recommended he use a helicopter and undertook to supervise the spraying
operations
 During spraying the herbicide drifted to and destroyed his other crops
 The seller was liable in delict for negligent misstatement
 AD held that a negligent misstatement, which can arise in a contractual relationship,
gives rise to a delictual claim

 In cases where pure delictual actions are recognised, concurrence is not a problem

When is there concurrence and when does liability in contract EXCLUDE liability in delict?

 In some cases the P can choose

(mostly in cases of property damage or bodily harm but sometimes even pure economic loss
where there is a duty to prevent loss)
 Contract between lessor and lessee
 Doctor and patient when negligent performance of professional services caused
harm
 Attorney and client
 Owner and builder
 Negligent misstatement of a bank manager
 Gross negligent advice of a financial services company
 An employer owes a common law duty to its employees to take reasonable care of
their safety. This includes psychological harm caused by sexual – harassment from
co-workers. If the employee is negligent in protecting employees, may be liable for
compensation. The fact that there is a contractual relationship does not alter his
liability in delict (Media 24 Ltd v Grobler)
 In some cases, however, contract relationship trumps action in delict
i) Refused to recognise delictual action in Lillicrap
 Questions of policy considerations for the extension of the Aquilian action
arose
 There was no need for such extension
 The parties had chosen to govern their relationship by means of contract. By
allowing an action in delict would create a trap for the unwary and would
create uncertaintly relating to the standard of care that would be required
 Considered the fact that the case did NOT involve an infringement of a right
of property or person and merely a failure to perform an obligation with due
diligence
 There was also no INDEPENDENT duty which
 Therefore, generally, where pure economic loss reults from negligent
performance of a contractual duty then CONTRACTUAL avenues apply
ii) Trustees, Two Oceans Aquarium v Kantley and Templer
  Court held that negligently causing pure economic loss was wrongful and
therefore actionable, only where the D had a duty NOT to act negligently
 Public and legal policy in determining legal duty
 Whether policy considerations ought to provide the extension of delictual
action
 No need to extend because i) it was intended from the onset that the
relationship would be governed by contract and ii) it was foreseen that the
trust could not possibly suffer damages through the negligent conduct of the
respondent before the contract was concluded
 The trust could have protected itself against the risk of harm through
contractual stipulations but failed to do so
 Following conclusions can be drawn from these cases:
 Concurrence is allowed when harm is to body or property
 Question of whether there is a legal duty is one of wrongfulness – policy
considerations apply
 Important policy consideration is whether an alternative delictual action is required
in the contractual setting
 Courts will not grant delictual action if it would lead to avoidance of contractual
obligations
 Will not grant if would result in uncertainty regarding the required standard of care
 Will not grant unless there is an independent legal duty
- This does not mean we ignore the existence of the contractual relationship but
rather that we infer the duty without relying on the specific term of the contract. In
the Holthousen case the court interpreted Lillicrap in the following way” no claim in
delict is maintainable where the negligence relied upon consists of the breach of
contract
 Court must be satisfied that the P could not have regulated the risk by way of
contract. However, we cannot apply this consideration too widely


 Cases
Administrator, Natal v Edouard 1990 3 SA 581 (A)

o Two independent actions are involved, each with its own requirements and purpose, they may
coexist and be instituted simultaneously.
o It was this view adopted in this case.
o The AD decided in this case that the failure of a provincial hospital to sterilise a married
woman for socio-eco reasons in terms of a contract, constituted a breach of contract.
o The Court said that this omission founded an action for damages for the loss she and her
husband suffered as a result of the maintenance of a child that was born because of the
omission.

o In this case compensation for pain and suffering not allowed under contractual remedy (non-
patrimonial)
o For this purpose the delictual action for P&S must be employed.

Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd

FACTS

o There would appear to be no authority in our law for the proposition that a breach of a
contractual duty to perform specific professional work with due diligence is per se a wrongful
act for the purposes of Aquilian liability (with the corollary that, if the breach were
accompanied by culpa , damages could be claimed ex delicto ).
o The examples in our common law of a concursus actionum are all cases where the defendant
satisfied the independent requirements of both a contractual and an Aquilian action.
o In general, contracting parties contemplate that their contract should lay down the ambit of
their reciprocal rights and obligations.
o If the Aquilian action were generally available for defective performance of contractual
obligations, a party's performance would presumably have to be tested not only against the
definition of his duties in the contract, but also by applying the standard of the bonus
paterfamilias , with untenable results.
o If it were, on the one hand, to be argued that the bonus paterfamilias would always comply
with the standards laid down by the contract to which he is a party, one would in effect be
saying that the law of delict can be invoked to reinforce the law of contract, and there is no
policy consideration which would justify such a conclusion.
o If, on the other hand, the standard imposed by law differed in theory from the contractual
one, the result must be that the parties agreed to be bound by a particular standard of care
and thereby excluded any standard other than the contractual one.

o The appellant, a firm of consulting and structural engineers, undertook to perform

professional services in connection with the planning and construction of a glass plant for the
respondent.
o After such services had been performed in part, the parties agreed that the agreement was to
be assigned to a third party, the assignment having the consequence that the appellant's
status changed from that of a contractor to a subcontractor vis-à-vis the respondent.
o In an action for damages arising from alleged deficiencies in the siting, design and construction
of the plant, the respondent contended that the appellant had owed it a duty of care, both
before and after the assignment of the contract, to carry out properly and with professional
skill and care the various tasks which it purported to perform.
o However, so the respondent alleged, the appellant, in breach of the said duty of care, failed to
carry out these tasks properly and with the necessary professional skill and care, thereby
causing respondent damages.
o It was common cause that the respondent's case was based on delict and, more particularly,
the (extended) actio legis Aquiliae .
o Before the Court a quo , the appellant unsuccessfully excepted to respondent's particulars of
claim as, inter alia , not H disclosing that appellant's conduct was wrongful for the purposes of
Aquilian liability, particularly in view of the contract between the parties and the subsequent
assignment thereof.

o It was held in the case that it would be undesirable to extend the Aquilian action to the duties
subsisting between the parties to a contract of professional service like the one in issue.
o These considerations did not fall away in view of the assignment of the contract: the same
arguments which militated against a delictual duty where the parties were in a direct
contractual relationship, applied where the relationship was tripartite, namely that a delictual
remedy was unnecessary and that the parties should not be denied their reasonable
expectation that their reciprocal rights and obligations would be regulated by their contractual
arrangements and would not be circumvented by delict.

o Held , accordingly, allowing the appeal, that the exception had to be allowed with costs,
respondent being given leave to amend its particulars of claim.

RELEVANT SECTION

o This case only permitted such an extension if it is justified by policy considerations:

o SA law approaches the matter in a more cautious way….and does not extend the scope of the
Aquilian action to new situations unless there are positive policy considerations which favour
such an extension.