Holmdene Brickworks v Roberts Construction
Encyclopedia
Holmdene Brickworks Ltd v Roberts Construction Co Ltd, decided by Corbett CJ, is a leading case in South African contract law
, specifically in the area of breach
.
The respondent, a building and engineering company in need of brick
s for certain walls of a building it was constructing, entered into a supply contract
with the appellant. Shortly after construction was completed, Holmdene's bricks "were beginning to crumble and decompose," manifesting a condition known as "efflorescence
," which threatened the stability of the entire edifice. The affected walls had to be demolished, and Roberts sued for consequential damages arising from the breach of contract.
On July 2, 1975
, in the Transvaal Provincial Division, judgment was granted in Roberts's favour. No interest had been claimed, and naturally none was awarded. When Holmdene appealed, however, Roberts applied, by way of amendment, for
Only the first of these was opposed.
Among the questions, then, was whether or not Holmdene was liable for consequential damages; whether or not efflorescence constitutes a latent defect
and how to determine this; and whether liability for the damages was founded on breach or on delict. The court held on the evidence that Holmdene's bricks did indeed contain a latent defect, and that the demolition of the walls was a natural and foreseeable consequence of this breach. Roberts had acted therefore reasonably in carrying out the demolition. The decision of the court a quo was therefore confirmed.
The court held, further, that to allow the applications for the payment of interest would be effectively to vary the order of the court to the detriment of the appellant. In the absence of a cross-appeal, the court could not do this. Furthermore, because the Act had come into operation on July 16, 1976
,—that is, after the judgment in the court a quo—the relevant provision was inapplicable. The application, accordingly, was refused.
The question of what constitutes a latent defect went unresolved, as did the matter of whether liability for consequential damages has its foundations on breach or on delict.
One of the judgment's most important contributions to the law of contract in South Africa
is its classic statement on special damages:
South African contract law
South African contract law is "essentially a modernised version of the Roman-Dutch law of contract," which is itself rooted in Roman law. In the broadest definition, a contract is an agreement entered into by two or more parties with the serious intention of creating a legal obligation...
, specifically in the area of breach
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
.
The respondent, a building and engineering company in need of brick
Brick
A brick is a block of ceramic material used in masonry construction, usually laid using various kinds of mortar. It has been regarded as one of the longest lasting and strongest building materials used throughout history.-History:...
s for certain walls of a building it was constructing, entered into a supply contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
with the appellant. Shortly after construction was completed, Holmdene's bricks "were beginning to crumble and decompose," manifesting a condition known as "efflorescence
Efflorescence
In chemistry, efflorescence is the loss of water of crystallization from a hydrated or solvated salt to the atmosphere on exposure to air.-Examples:...
," which threatened the stability of the entire edifice. The affected walls had to be demolished, and Roberts sued for consequential damages arising from the breach of contract.
On July 2, 1975
1975 in South Africa
-March:* 15 March - Ian Smith, the Rhodesian Prime Minister, and senior Ministers visit South Africa for talks* 19 March - The Labour Party wins the second elections to the Coloured Persons' Representative Council...
, in the Transvaal Provincial Division, judgment was granted in Roberts's favour. No interest had been claimed, and naturally none was awarded. When Holmdene appealed, however, Roberts applied, by way of amendment, for
- interest at six per cent from the date of judgment by the court a quo; and
- interest at eleven per cent from date of judgment in the Appeal Court in terms of the Prescribed Rate of Interest Act.
Only the first of these was opposed.
Among the questions, then, was whether or not Holmdene was liable for consequential damages; whether or not efflorescence constitutes a latent defect
Latent defect
In the law of the sale of property a latent defect is a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale....
and how to determine this; and whether liability for the damages was founded on breach or on delict. The court held on the evidence that Holmdene's bricks did indeed contain a latent defect, and that the demolition of the walls was a natural and foreseeable consequence of this breach. Roberts had acted therefore reasonably in carrying out the demolition. The decision of the court a quo was therefore confirmed.
The court held, further, that to allow the applications for the payment of interest would be effectively to vary the order of the court to the detriment of the appellant. In the absence of a cross-appeal, the court could not do this. Furthermore, because the Act had come into operation on July 16, 1976
1976 in South Africa
-January:* 5 January - SABC begins country's first television service-March:* 27 March - The South African Defence Force withdraw from Angola and end Operation Savannah-May:* 29 May - Eskom announces that it will order two nuclear power stations from France...
,—that is, after the judgment in the court a quo—the relevant provision was inapplicable. The application, accordingly, was refused.
The question of what constitutes a latent defect went unresolved, as did the matter of whether liability for consequential damages has its foundations on breach or on delict.
One of the judgment's most important contributions to the law of contract in South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
is its classic statement on special damages:
To ensure that undue hardship is not imposed on the defaulting party [...] the defaulting party's liability is limited in terms of broad principles of causation and remoteness, to (a) those damages that flow naturally and generally from the kind of breach of contract in question and which the law presumes the parties contemplated as a probable result of the breach, and (b) those damages that, although caused by the breach of contract, are ordinarily regarded in law as being too remote to be recoverable unless, in the special circumstances attending the conclusion of the contract, the parties actually or presumptively contemplated that they would probably result from its breach.