THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No:  466/07
In the matter between

MUTUAL CONSTRUCTION COMPANY (TVL)
(PTY) LTD                                                                          APPELLANT

and

KOMATI DAM JOINT VENTURE                                    RESPONDENT

Neutral citation: Mutual Construction v Komati Dam (466/2007) [2008] ZASCA
107 (23 September 2008).

Coram:
SCOTT, CAMERON, LEWIS JJA, LEACH AJA and MHLANTLA AJA
Heard:
4 September 2008
Delivered:
23 September 2008

Summary:
Contract for the hire of a truck and its operator for use on a building
site – operator remaining the employee of the truck’s owner but
operating on site under the supervision and control of the hirer –
operator’s negligence on site causing damage  to truck– hirer liable
to owner for damages.

_________________________________________________________________
ORDER
_________________________________________________________________

On appeal from: High Court, Johannesburg (Van Oosten J sitting as court of first
instance).

(1)
The appeal succeeds with costs.
(2)
The order of the court a quo is set aside and is replaced with the following:

‘(a)  The defendant is directed to make payment to the plaintiff of an amount
equal to the damages which the parties may agree or which the plaintiff may
prove.
(b)   The defendant is to pay the costs of the proceedings determining liability.’

_______________________________________________________
JUDGMENT
________________________________________________________________

LEACH AJA (SCOTT, CAMERON, LEWIS JJA and MHLANTLA AJA concurring):

[1] During June 2000 the parties entered into an agreement in terms of which
the appellant let to the respondent a CAT 769 articulated dump truck (‘the truck’),
together with the services of an operator. The respondent, a partnership between
a number of major civil engineering companies, was engaged in the construction
of the Maguga Dam in Swaziland and used the truck and its operator in the
course of its operations at that site. In the early hours of 5 October 2000, the
operator fell asleep while driving the truck along a haul road at the site, allowing
the truck to leave the road and collide with an embankment. For convenience, I
shall refer to this as ‘the accident’.

[2]   The truck was extensively damaged in the accident and, in due course, the
appellant instituted an action for damages in the Johannesburg High Court,
claiming payment by the respondent of both the cost of repairing the truck as well
as an amount in respect of loss of income because it was out of operation for
several weeks until it was repaired. The respondent denied liability and the
matter proceeded to trial.

[3]   Although the precise terms of the agreement under which the truck had been
let to the respondent were an issue on the pleadings, this aspect of the case was
initially dealt with as a separate issue under rule 33(4), with Goldblatt J
concluding that a written agreement, a copy of which had been attached to the
particulars of claim as annexure ‘A’, contained the terms of the contract between
the parties. His finding was accepted by both sides and the terms of the contract
can be regarded as finally determined.

[4] The dispute as to the terms of the agreement having been resolved, the
matter was set down for trial before Van Oosten J for adjudication of the
remaining issues. By the date of the hearing the parties had reached agreement
on the cost of repairing the damage to the truck.  Although it was agreed that
very little evidence would be required to determine the quantum of the claim for
loss of income, the learned judge ordered the question of liability to be
determined as a separate issue at the outset with the outstanding issues relevant
to damages to stand over yet again.  After hearing evidence, he concluded that
the operator of the truck had negligently fallen asleep as he had failed to rest,
despite the respondent offering him the opportunity to do so, a failure which he
considered fell beyond the respondent’s power of control, and that in these
circumstances policy and fairness dictated that the respondent not be held liable
for the operator’s negligence.

[5]   The high court therefore dismissed the appellant’s claim. An application for
leave to appeal was similarly unsuccessful but, with leave obtained from this
court, the appellant now appeals against the dismissal of its claim.

[6]    It is a trite principle of our law that the hirer of an article is obliged to return it
in the same condition in which it had been at the outset of the period of hire, fair
wear and tear excluded. Accordingly, in the absence of agreement to the
contrary, all the owner of a hired article has to allege and prove is that it was in a
damaged state when returned and it will then be up to the hirer to show that this
is due to no negligence on the part of himself or others under his control for
whose acts he would be liable.1 In the present case, the parties are agreed that
the damage was due to the operator's negligence in driving when he was so tired
that he fell asleep. The hirer’s liability is thus entirely dependent on the parties’
contract.

[7]   The material provisions of the contract are:
‘10.  Owner 's operator.
If the plant is supplied with the owner's operator, then while on site the operator shall
be under the sole and absolute control of the hirer who/which warrants and
undertakes that he/it will give to the operator clear and specific instructions and
directions regarding the nature and the manner of all work to be performed by the
operator and the plant on site, the hirer shall be obliged and warrants that he/it will
during the hours that the hirer requires the plant to operate provide responsible
supervision for the operator while the plant is on the site during the period of hire.
Notwithstanding anything to the contrary hereinbefore contained, the owner shall
remain the general employer of the operator and no obligation shall be placed upon
the hirer to observe the provisions of any statutory laws regulating the relationship
between the owner and the operator ….

12. Indemnity.

1 See eg Eensaam Syndicate v Moore 1920 AD 457 at 458 and Manley van Niekerk v Assegaai
Safari and Film Productions (Pty) Ltd 1977 (2) SA 416 (A) at 422G-423B.

Anything to the contrary herein contained notwithstanding while the plant is on site,
the owner shall not be responsible or liable to the hirer or any other person for any
damages of any nature whatsoever (consequential or otherwise) arising out of the
plant being faulty or in a defective state of repair or for any acts or omissions on the
part of the owner's operator while such operator is carrying out the instructions of the
hirer or any acts or omissions on the part of the hirer's operator or for any loss or
damage (consequential or otherwise) whatsoever occasioned to the hirer or any
other person, property or thing and the hirer indemnifies and holds harmless the
owner against all claims of any nature whatsoever for any loss or damage aforesaid
including all costs relating to such claims.

21. Care of plant.
Subject to clause 10 & 12 above the hirer shall be responsible for all expenses
arising from the breakdown, loss or damage to the plant occurring through the hirer's
negligence, misdirection or misuse, or for any theft of the plant or parts thereof, and
shall include the travelling time and costs of the owner and his/its nominee and time
lost and expenses incurred through the plant being immobilised or bogged in wet
ground, rockfall, subsistence, inundation or the like.  The hirer undertakes at all times
to exercise adequate security and care in respect of the plant.

22. Self propelled plant.
Where the plant is self propelled and is required to travel under its own power then
save as is provided below, the hire period shall be deemed to commence from the
time it commences to move on despatch from the owner's depot or site nominated by
the owner, whichever is the nearer to the site where it is required by the hirer.  In
such event, the risk shall be with the hirer for the entire period.  When the plant,
being self propelled, is required to travel under its own power with an operator
supplied by the owner, the risk of loss of or damage to the plant shall pass to the
hirer when the plant is delivered or presented for delivery to the hirer's site specified
overleaf and shall revert to the owner when the plant commences to move on its
return to the owner's depot or site nominated by the owner.’

[8]   It will be observed that under clause 21 the respondent (as hirer) became
responsible for all expenses arising from the truck breaking down or being

damaged through ‘the hirer's negligence, misdirection or misuse’ until such time
as it was restored to the appellant. The issue that arose for determination in this
appeal was therefore whether the negligence of the operator who, under clause
10, was to work on site under the respondent's ‘sole and absolute control’, was to
be construed as negligence for which the respondent bound itself to be liable
under clause 21.  This question is to be answered with reference to the contract
and not to the principles of vicarious liability in delict, which appears to have been
the approach of the high court.

[9]   In dealing with this issue, there are certain basic principles which arise.
Firstly, any ‘negligence, misdirection or misuse’ envisaged by the agreement
had to be conduct on the part of a natural person as a partnership between
several juristic persons can only act through natural persons doing so on its
behalf.  Secondly, a term in a contract is to be read not in isolation but in its
context.

[10]   Accordingly, in construing clause 21 it is important to bear in mind that
although clause 10 provides for the operator to remain in the employ of the
appellant, he was at all times to be under the respondent’s ‘sole and absolute
control’ while on site and that the respondent undertook to ‘provide responsible
supervision’ and to give ‘clear and specific instructions and directions regarding
the nature and the manner of all work to be performed by the operator and the
(truck) on site’.

[11]   Importantly, clause 12 also provides for the appellant not to be ‘. . .
responsible or liable to the (respondent) or any other person for damages of any
nature whatsoever . . . arising out of . . . acts or omissions on the part of  the . . .
operator while such operator is carrying out the instructions of the (respondent)
or . . . for any loss or damage . . . occasioned to the (respondent) or any other
person, property or thing . . . .’  The indemnity given in this clause, which
excuses the appellant from liability for damage caused by negligence on the part

of the operator while working under the respondent’s instructions on site,
amounts to an acceptance by the respondent of liability in those circumstances.

[12]   It is clear from this that despite the operator remaining within the employ of
the appellant, he at all times acted for and on behalf of the respondent and under
its control while working on site.  The respondent, in turn, accepted both the risk
of damage to the truck as well as liability for the operator’s negligence while
under its supervision on site. To all intents and purposes, the operator while on
site was therefore envisaged in the agreement as being a functionary of the
respondent, akin to an employee.

[13]   In my view, these considerations all point towards negligence on the part of
the operator while on site and under the respondent’s supervision and control,
being construed as ‘the hirer's negligence‘ as envisaged by clause 21.

[14]   This court reached a similar conclusion in RH Johnson Crane Hire (Pty) Ltd
v SA Iron & Steel Industrial Corporation Ltd.2 In that matter, the defendant had
hired a crane and its operator from the plaintiff under a written agreement which
contained clauses identical to clauses 10, 12 and 21 of the present contract.  The
crane collapsed and was damaged when the operator, acting at the time under
the supervision of the defendant’s rigger, attempted to lift a heavy load that was
beyond its capabilities.  The plaintiff sued the defendant for the cost of repairing
the crane and for loss of income while the repairs were carried out.  Two
judgments were delivered, each holding the defendant liable to the plaintiff.  In
the minority judgment3 it was held that the crane had been damaged because the
defendant's rigger had been negligent, rendering the defendant liable under the
provisions of the contract.  On the other hand, in the majority judgment4 it was
held that the evidence had been insufficient to determine negligence on the part
of the rigger. But as it was common cause that the damage to the crane must

2 Unreported; case no 207/85 delivered on 31 March 1987.
3 Viljoen JA, Smalberger J concurring.
4 Botha JA ,with whom Vivier JA and Kumleben AJA concurred.

have been due to negligence on the part of either the rigger or the operator, the
majority reasoned that the failure to prove that the rigger had not been negligent
placed the defendant on the horns of a dilemma. On the one hand, its failure in
that regard did not allow it to escape liability under the common law which placed
a burden on it to prove that there had been no negligence on the part of its
servants or those for whose acts it would be liable while, on the other hand, it
was unable to escape liability by seeking to contend that the operator had been
negligent as ‘. . . in terms of the conditions of contract the defendant was liable
for his acts.’ The defendant was therefore found to be liable without the majority
having to decide whether the operator had been negligent.

[15]   In the light of the above, I conclude that negligence on the part of the
operator while driving the truck on site and under the respondent's supervision
and control is to be construed as negligence on the part of the respondent as
envisaged in clause 21 of the agreement, rendering the respondent liable to the
appellant for damages suffered as a result.

[16]   Counsel for the respondent sought to avoid the result of that construction
by arguing that as the operator had commenced his shift at a time when he was
exhausted on returning to site after a long weekend during which he had not
properly rested, his negligence which caused him to fall asleep had been at a
time when he was off site and not under the respondent's supervision and
control.

[17]   This argument cannot be upheld.  The cardinal point is that the operator
was negligent in driving the truck at a time when he was over-tired, which led to
his falling asleep and the truck leaving the road.  This occurred on site and at a
time when he was driving under the respondent's supervision and control.  The
respondent is accordingly liable under the contract for the damage the appellant
suffered as a result.

[18]   The appeal must accordingly succeed, with costs.  In regard to the order
which should be made in substitution of that of the court a quo, I intend to use the
terms suggested by appellant's counsel in his heads of argument to which the
respondent offered no objection.

[19]    The following order is made:

(1) The appeal succeeds, with costs.

(2)  The order of the court a quo is set aside and is replaced with the following:

‘(a)  The defendant is directed to make payment to the plaintiff of an amount
equal to the damages which the parties may agree or which the plaintiff may
prove.
(b)   The defendant is to pay the costs of the proceedings determining
liability.’

__________________________

L E LEACH

ACTING JUDGE OF APPEAL

Appearances:

For Appellant:
R Stockwell SC

Instructed by

Knowles Husain Lindsay Inc, Sandton

McIntyre & Van Der Post, Bloemfontein.

For Respondent:   DA Smith SC
M T Shepherd

Instructed by
Roodt Incorporated, Sandhurst

Naudes Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
23 September 2008

Status: Immediate

Please note that the media summary is intended for the benefit of the media and does not form
part of the judgment of the Supreme Court of Appeal

MUTUTAL CONSTRUCTION  COMPANY (PTY) LTD

v

KOMATI DAM JOINT VENTURE

The Supreme Court of Appeal today reversed a decision of the Johannesburg High Court which
had dismissed the appellant’s claim for damages against the respondent.

The appellant had let a dump-truck to the respondent for use on a construction site. The truck had
been let together with the services of an operator employed by the appellant. While working on site
and under the respondent’s control, the operator negligently fell asleep, allowing the truck to leave
the road and collide with an embankment. The appellant sued the respondent for the cost of
repairing the truck as well as for loss of income derived from the truck until it was repaired. The
claim failed in the high court which found that policy and fairness dictated that the respondent not
be held liable for the negligence of the appellant’s operator.

On appeal, the Supreme Court of Appeal held that on a proper construction of the parties’ written
agreement the operator’s negligence on site was to be construed as negligence on the part of the
respondent for which the respondent had bound itself to be liable under the contract. The
respondent should therefore have been held liable to the appellant for its damages. The appeal
succeeded and the order of the trial court altered to hold the respondent liable for whatever loss
the appellant may have suffered.