THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable

Case No: 781/2016

In the matter between:

TRANSALLOYS (PTY) LTD
APPELLANT

and

MINERAL-LOY (PTY) LTD
RESPONDENT

Neutral Citation: Transalloys v Mineral-Loy (781/2016) [2017] ZASCA 95
(15 June 2017)

Coram:
Navsa, Theron, Wallis, Petse and Zondi JJA
Heard:
11 May 2017
Delivered:
15 June 2017
Summary: Requirements for res judicata and issue estoppel: When
appropriate to separate issues.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from Gauteng Division, Pretoria, of the High Court, (Janse van
Nieuwenhuizen J sitting as court of first instance):
The order of the high court is set aside and replaced with the following
order:
„1
The replication of res judicata is upheld and paras 9.2 to 9.4, 17.2 and
22.2.1 of the amended plea are struck out.
The second defendant is ordered to pay costs of the separate
determination of the issues raised by the replication.‟

The appeal is otherwise dismissed with costs, such costs to include
those consequent upon the employment of two counsel.
______________________________________________________________

JUDGMENT
______________________________________________________________

Zondi JA (Navsa, Theron, Wallis and Petse JJA concurring):
Introduction
[1] The respondent, Mineral-Loy (Pty) Ltd, instituted an action against
Highveld Steel and Vanadium Corporation Limited (Highveld) and the
appellant, Transalloys (Pty) Ltd, as first and second defendants respectively,
in the Gauteng Division, Pretoria, of the High Court, claiming payment of
commission due to it for services rendered on behalf of the appellant pursuant
to a distribution and service agreement allegedly concluded by the parties.
The respondent based its claim on two invoices for August 2008 and
September 2008. It also claimed damages for the loss of profit allegedly
resulting from the repudiation of the distribution and service agreement.
Highveld and the appellant disputed liability. When the matter came before
Fabricius J on 14 March 2013 in the court below, the parties sought and
obtained an order that 27 issues, inter alia, relating to the existence of the

agreement, its precise terms and conditions and its repudiation be determined
separately before any other issues.

[2] In due course Bertelsmann J heard the separated issues and on 3
June 2013 delivered a judgment and determined them in favour of the
respondent. Following upon Bertelsmann J‟s judgment the respondent
amended its particulars of claim, inter alia, by relying on new breaches of the
distribution and service agreement and by increasing the quantum of its claim
for damages.

[3] In turn, the appellant amended its plea by pleading that on or about 21
December 2006 the parties varied the terms of the agreement. The appellant
alleged that in terms of the agreement as varied the respondent had to meet
certain contractual prerequisites to qualify for the payment of commission.
The appellant contended further that the respondent failed to meet those
prerequisites and that it was therefore not entitled to be paid commission. In
the alternative, the appellant alleged that the respondent had waived its rights
under the agreement and was therefore not entitled to be paid any
commission.

[4] The respondent replicated and pleaded that the issues sought to be
introduced by means of the amended plea were res judicata. It contended that
the appellant should be precluded from raising and relying on those issues.

[5] At the hearing of this matter we were advised by counsel that Janse
van Nieuwenhuizen J had on 14 July 2016, and by agreement between the
parties, granted an order that the special plea of res judicata be adjudicated
separately, before any other issues. Janse van Nieuwenhuizen J made no
formal ruling to that effect, but the matter proceeded in accordance with the
agreement and ultimately, she upheld the respondent‟s special plea of res
judicata with costs. The appellant appeals against that judgment with leave of
the court below.

[6] Before dealing with the merits of the appeal, it is necessary to make a
few remarks about separating issues. The purpose of rule 33(4) of the
Uniform Rules of Court - entitling a court to try issues separately in
appropriate circumstances - is to facilitate the convenient and expeditious
disposal of litigation. But that result is not always achieved. It may not be
appropriate to deal with the matter on separated basis where the issues are
inextricably linked and not discrete. This court in Denel (Edms) Bpk v Vorster
2004 (4) SA 481 (SCA) para 3 held that even where the issues are discrete,
the expeditious disposal of the litigation is often best achieved by ventilating
all the issues at one hearing, particularly where there is more than one issue
that might be readily dispositive of the proceedings. In other words, careful
thought must be given to the anticipated course of the litigation as a whole,
before a decision to separate the issues is taken. The trial court must be
satisfied that it is proper to order a separation as it has a duty to ensure that
the issues to be tried are clearly circumscribed with clarity and precision, so
as to avoid confusion. These guiding principles were not observed when a
separation order was sought and obtained in this matter.

[7] Careful thought was not given to the anticipated course of litigation as
a whole before on each occasion a decision to separate the issues was taken.
The issues have been adjudicated on a separated basis twice in this matter
resulting in a delay in the determination of the real issues. The history of
litigation in this matter makes it clear that separation was ordered without first
ensuring that the issues to be tried were clearly circumscribed. That was
particularly the case with the separation order on the first occasion, which
purported to state 27 separate issues for determination and led Bertelsmann J
to issue an order declaring that: „Plaintiff succeeds against the second
defendant on every issue identified in [the separation order]‟. The
indeterminate nature of that order led to much of the confusion in the present
proceedings.

[8] Back to the merits of this appeal, the question is whether a replication
of res judicata was rightly upheld. In other words, the broad question is
whether all the issues raised in the appellant‟s amended plea are the same as

those that were before and finally adjudicated by Bertelsmann J on 3 June
2013. In this regard the pleadings and the judgment of Bertelsmann J must be
carefully analysed.

Original claim
[9] The dispute between the parties has its genesis in the distribution
agreement the respondent concluded with Highveld, the appellant‟s
predecessor, in October 1985 and amended in October 1994. A dispute arose
between the parties regarding payments allegedly due to the respondent
under the agreement. That led to the institution of the action against Highveld.

[10] The respondent‟s original claim had two components; one for the
payment of two invoices issued in August 2008 and September 2008 for
commissions in the amount of R168 712.56 and R114 316.69 respectively
(invoice claims). The other was for damages in the sum of R1 195 403.76
representing the respondent‟s loss of profit for a 12 month period as a result
of Highveld‟s repudiation of the agreement and alleged failure to give
reasonable notice of termination (damages claim).

[11] The respondent‟s cause of action was based on the terms and
conditions of the distribution agreement and the assignment of that agreement
by Highveld to the appellant. It pleaded as follows:
11.1. The respondent alleged that it was appointed by Highveld as its sole
distributor of ferromanganese, and later silico-manganese, in the Republic of
South Africa and would purchase such products from Highveld and on-sell the
products at a profit to various customers.
11.2. Certain customers were excluded and Highveld would supply such
excluded customers directly with the products. The respondent alleged that it
was expected to visit the excluded customers and do market surveys and
other services for Highveld in respect of such excluded customers and that
Highveld agreed to pay the respondent a commission on all Highveld‟s sales
to them.
11.3. Highveld would on a monthly basis furnish the respondent with values
of sales of ferromanganese by Highveld to excluded customers and of

commission payable to the respondent to enable the respondent to invoice
Highveld.
11.4. The respondent further alleged that it invoiced the appellant for
commission on sales effected in August 2008 and September 2008 and that
the appellant refused to pay such invoices.
11.5. Highveld sold the business in question to the appellant and assigned
its rights and obligations under the agreement to the appellant with effect from
either 1 July 2007 or April 2008, after which latter date the respondent
invoiced the appellant for its commission.
11.6. As regards the claim for damages for loss of profit, the respondent
alleged that after the agreement was assigned to the appellant, the appellant
in repudiation of the agreement refused to furnish the respondent with
monthly values of sales of the products sold by the appellant or of the amount
of commission payable to the respondent.

[12] Highveld and the appellant defended the action. Not only did they deny
liability to the respondent, but they disputed the terms of the agreement as
pleaded by the respondent. When the matter came before Fabricius J in the
court below, the parties agreed on the 27 issues upon which the court hearing
the matter would be required to adjudicate. In the main, the separated issues
related to the existence of the agreement on which the respondent relied; its
precise terms; whether during the months of May to September 2008 the
respondent rendered the distribution and support services in accordance with
the agreement; whether the appellant failed to make payment of the
commission for the months of August and September 2008; whether it was
repudiated and whether the rights and obligations of Highveld under and in
terms of the agreement were assigned to the appellant.

[13] The separated issues went on trial before Bertelsmann J and he
determined them in favour of the respondent. In short, the effect of the
findings on the separated issues was that the appellant had assumed the
obligations of Highveld in terms of the 1985 agreement as amended in 1994;
and its refusal to provide calculations to determine commission due and to
make payment, constituted repudiation.

[14] The respondent and Highveld subsequently concluded a settlement
agreement and the respondent withdrew its claims against Highveld. With that
Highveld fell out of the picture.

The amended claim
[15] During the trial before Bertelsmann J it became apparent to the
respondent that the appellant and/or Highveld had sold the relevant products
to customers who were not excluded customers in terms of the distribution
agreement and to whom only the respondent was entitled to sell such
products. Furthermore the respondent became aware that the appellant
and/or Highveld had during the period July 2007 to 30 September 2008
effected sales to customers on the excluded list without disclosing the values
of those sales and the amount of commission payable to the respondent.
Arising from these facts, the respondent amended its particulars of claim.

[16] In the amended particulars of claim the respondent retained its claim
for payment of the commission on the two invoices it issued to the appellant in
August 2008 and September 2008. What was amended was the following:
16.1. The amount claimed for damages consequent upon the repudiation of
the distribution agreement was increased from R1 195 403.76 to R5 237 121
on the basis that the average amount of the monthly invoices issued by the
respondent during the 12 month period preceding the repudiation was
R436 426.75 and not R99 616.98 as initially averred.
16.2. Two further claims for damages due to the breach of the distribution
agreement were introduced, namely:
16.2.1
A claim for damages for loss of profit in the amount of
R15 071 485.04 arising from sales of the relevant products to Afro Mineral
Trading AG (AMT); a non-excluded customer, in terms of the tolling
agreement (AMT claim); and
16.2.2
A claim for damages for loss of profit of 5 per cent on sales and
distribution by the appellant of silico-manganese and ferro-manganese to non-
excluded customers during the period July 2007 to 30 September 2008 and a
claim of 2 per cent commission on sales and distribution of ferro-manganese

effected by the appellant to customers on the excluded list (undisclosed
sales). The amount claimed was R5 093 663.

Appellant’s amended plea
[17] In response to the respondent‟s amended particulars of claim the
appellant amended its plea by pleading in para 9.2 that the distribution
agreement was varied in terms of a memorandum of 21 December 2006
(variation defence), alternatively that the respondent waived its rights under
the distribution agreement (waiver defence). The appellant contended in para
17 of its amended plea that the respondent was not entitled to be paid
commission on the ground that in breach of its obligations in terms of the
agreement as varied, it inter alia, failed to submit valid claims for commission
in respect of the excluded customers; procure orders with a referral number
issued by Highveld and/or the appellant; and submit monthly visitation reports.
This defence related only to the claim on the two invoices and not to the
original damages claim based on the repudiation of the distribution
agreement.

[18] The allegations underlying the appellant‟s variation defence are
pleaded in para 9.3 of its amended plea as follows:
18.1. The respondent was appointed as Highveld‟s agent for local sales;
18.2. Highveld would pay to the respondent a commission of 2 per cent for
sales to the excluded customers;
18.3. Any clients of Highveld visited by the respondent would be issued with
a referral number to be used when the client concerned placed an order with
Highveld;
18.4. Orders placed with Highveld without a referral number would not be
included for commission payable to the respondent;
18.5. The respondent was obliged to submit a monthly visitation report to
Highveld and/or the appellant detailing the clients visited during the month
with the relevant referral number that had been issued;
18.6. For market development, the respondent would consult with Highveld
prior to visiting a new client to ensure that the client was not already a direct
client of Highveld and the appellant.

[19] As regards the respondent‟s AMT claim, the appellant in para 22 of its
amended plea denied that the respondent was entitled to be paid the
commission for the sales to AMT. In addition, the appellant alleged that AMT
was registered in Switzerland, that sales to it would have been foreign sales
and that it was not a potential customer that the respondent would have
approached.

[20] The appellant‟s waiver defence, which is in the alternative to what is
pleaded in paras 9.2 and 9.3, is set out in para 9.4 of its amended plea. The
appellant contended that, whilst fully aware of its rights under the distribution
agreement, as amended in December 2006 and at all times thereafter, the
respondent waived its rights to obligations by Highveld and/or the appellant in
terms of the distribution agreement, inter alia, by:
20.1. receiving the memorandum;
20.2. not challenging and/or disputing the contents of the memorandum; and
20.3. conducting itself in a manner that was consistent only with having
accepted the terms and obligations as contained in the memorandum.

[21] This gave rise to a replication by the respondent that in light of the
earlier judgment by Bertelsmann J, the appellant was precluded from relying
on variation, alternatively waiver, by the exceptio rei judicata. As alluded to
above, this contention was upheld by Janse van Nieuwenhuizen J. The issue
on appeal is whether Janse van Nieuwenhuizen J was correct. The parties
agreed that the matter concerns the application of the extended res judicata in
the form of issue estoppel.

[22] For res judicata to operate it must be shown that the earlier judgment
relied upon was a final judgment, and that there must be identity of parties
and of the subject-matter in the former and in the present litigation. This court
in Prinsloo NO & others v Goldex 15 (Pty) Ltd & another [2012] ZASCA 28;
2014 (5) SA 297 (SCA) described the res judicata and the issue estoppel as
follows:

„[10]
The expression “res iudicata” literally means that the matter has already been
decided. The gist of the plea is that the matter or question raised by the other side
had been finally adjudicated upon in proceedings between the parties and that it
therefore cannot be raised again. According to Voet 42.1.1, the exceptio was
available at common law if it were shown that the judgment in the earlier case was
given in a dispute between the same parties, for the same relief on the same ground
or on the same cause (idem actor, idem res et eadem causa petendi) (see
eg National Sorghum Breweries Ltd (t/a Vivo African Breweries) v International
Liquor Distributors (Pty) Ltd 2001 (2) SA 232 (SCA) ([2001] 1 All SA 417) at 239F – H
and the cases there cited). In time the requirements were, however, relaxed in
situations which gave rise to what became known as issue estoppel. This is
explained as follows by Scott JA in Smith v Porritt and Others 2008 (6) SA 303
(SCA) para 10:
“Following the decision in Boshoff v Union Government 1932 TPD 345 the ambit of
the exceptio res iudicata has over the years been extended by the relaxation in
appropriate cases of the common-law requirements that the relief claimed and the
cause of action be the same (eadem res and eadem petendi causa) in both the case
in question and the earlier judgment. Where the circumstances justify the relaxation
of these requirements those that remain are that the parties must be the same (idem
actor) and that the same issue (eadem quaestio) must arise. Broadly stated, the
latter involves an inquiry whether an issue of fact or law was an essential element of
the judgment on which reliance is placed. Where the plea of res iudicata is raised in
the absence of a commonality of cause of action and relief claimed it has become
commonplace to adopt the terminology of English law and to speak of issue estoppel.
But, as was stressed by Botha JA in Kommissaris van Binnelandse Inkomste v Absa
Bank Bpk 1995 (1) SA 653 (A) at 669D, 667J – 671B, this is not to be construed as
implying an abandonment of the principles of the common-law in favour of those of
English law; the defence remains one of res iudicata. The recognition of the defence
in such cases will however require careful scrutiny. Each case will depend on its own
facts and any extension of the defence will be on a case-by-case basis (Kommissaris
van Binnelandse Inkomste v Absa (supra) at 670E – F). Relevant considerations will
include questions of equity and fairness, not only to the parties themselves but also
to others. . . .”‟
(See also Caesarstone Sdot-Yam Ltd v World of Marble and Granite 2000 CC
& others [2013] ZASCA 129; 2013 (6) SA 499 (SCA) paras 21 and 22.)

[23] The main thrust of the appellant‟s argument was that in the
circumstances of the matter, where the respondent has introduced new
causes of action for further breaches of the same agreement between the
parties (which breaches were only discovered during the course of evidence
in the first hearing), it would be inequitable and unfair to prevent the appellant
from relying on a variation of the agreement, alternatively a waiver of certain
rights therein as a defence to the new claims by the application of issue
estoppel and that the appellant did not have a duty to rely on the variation or
waiver in the first hearing.

[24] In contrast, the respondent‟s contention was that it was incumbent
upon the appellant to have pleaded such defences to the claims as they
existed on the pleadings at the first hearing. It argued that insofar as the
variation of the agreement would give rise to defences to its initial claims –
something that is not wholly apparent on a reading of the memorandum and
the pleaded terms of the variation – those defences should have been raised
to the initial claims.

[25] It is clear that the issues now raised by the appellant form part of the
issues that Bertelsmann J was called upon to determine, namely whether the
respondent and Highveld (the appellant‟s predecessor) had concluded the
agreement; what were the precise terms and conditions of the agreement and
whether the parties had concluded the amendment of the agreement so that it
covered sales of silico-manganese. As I have pointed out by way of
introduction, Bertelsmann J finally determined those issues in favour of the
respondent. It is therefore not open to the appellant to seek to avoid liability
under the distribution agreement by contending that the agreement was
varied in the respects now alleged, alternatively that respondent waived its
rights to obligations by the appellant. The „once and for all rule‟ requires that
all claims generated by the same cause of action, be instituted in one action.1
Similarly, once the merits of a claim have been finally determined in favour of

1 African Farms and Townships Ltd v Cape Town Municipality 1963 (2) SA 555 (A); National
Sorghum Breweries Ltd (t/a Vivo African Breweries) v International Liquor Distributors (Pty)
Ltd 2001 (2) SA 232 (SCA) para 10; Custom Credit Corporation (Pty) Ltd v Shembe 1972 (3)
SA 462 (A) at 472A-D

a party it is not permissible for the defendant to seek to raise fresh defences
not raised initially. What is sauce for the plaintiff goose, is also sauce for the
defendant gander. It was therefore incumbent upon the appellant to have
pleaded the variation and waiver defences to the original claims as they
existed on the pleadings at the first hearing in so far as they constituted
defences to those claims.

[26] The object of the defence of res judicata is based on two grounds: the
one public policy, that is to say, it is in the interest of justice that there should
be an end to litigation, and the other, the hardship to a litigant, that he should
not be vexed twice for the same cause.2 To allow the appellant‟s new
defences in relation to the respondent‟s claims for payment of the two unpaid
invoices and the claim for damages arising from repudiation would defeat the
whole object of the defence of res judicata. The two defences which are now
sought to be advanced would require reconsideration of the findings of
Bertelsmann J on issues that were before him. Bertelsmann J concluded that
an agreement on the terms and conditions alleged by the respondent had
been established and that the appellant had repudiated the agreement. These
findings will have to be revisited and will be disturbed were the issues sought
to be introduced by the appellant to be allowed. The appellant had a fair
opportunity to participate in the initial litigation, where the issues relating to the
existence of the agreement, its precise terms and conditions and whether it
was breached, were fully ventilated and decided. The amounts claimed by the
respondent in the initial litigation in respect of the commission and for
damages were not so insignificant to justify his failure to raise these two
defences in the initial litigation.

[27] In relation to the respondent‟s claim for commission on the two invoices
and the claim for damages the appellant‟s defences of variation and waiver
are res judicata and the appellant is therefore precluded from raising them
again. In the circumstances the replication of res judicata in relation to para
17.2, read with paras 9.2; 9.3 and 9.4, of the amended plea, was correctly

2 Carl-Zeiss-Stiftung v Rayner and Keeler Ltd & others (No 2) [1966] 2 All ER 536 at 549.

upheld, but the order requires amendment by striking out the offending
paragraphs.

[28] The AMT claim, however, stands on a different footing. I agree with the
appellant‟s submission that the court below erred in finding that the issue
relating to the AMT claim was considered by Bertelsmann J and is therefore
res judicata. Bertelsmann J, in para 61 of his judgment, made it clear that the
AMT agreement fell outside the issues he was called upon to decide and
therefore it was not necessary for him to deal with it. The fact that the
appellant had concluded a tolling agreement with AMT, in terms of which the
appellant would sell its entire ore production to AMT, arose during the cross-
examination of Mr Duff by the appellant‟s counsel in the proceedings before
Bertelsmann J. But other than that it never enjoyed any further attention in the
initial proceedings. It featured for the first time when the respondent amended
its particulars of claim during 2015 to introduce a fresh claim of some R15
million.

[29] Although the AMT agreement was referred to in the appellant‟s
amended plea and counterclaim, but not as giving rise to a separate claim,
the parties did not want it to form part of the issues in respect of which a
separation order was granted. That this is the approach adopted by the
parties finds support in para 36 of Bertelsmann J‟s judgment in which the
following is stated:
„Prior to the commencement of the hearing the parties argued a proposed limitation
of the issues for decision by this court. Fabricius J issued an order limiting the
present disputes for decision to all those relating to the merits of the disputes as set
out above, but excluding any consideration of what would constitute a reasonable
notice period for the termination of plaintiff‟s agreement with the first defendant, (if
any), and any potential damages suffered by plaintiff if its factual averments were to
be accepted. Any reference to the tolling agreement was also excluded.‟

[30] If the alleged amendment or waiver pleaded in para 9 of the amended
plea constituted a defence to the AMT claim, this would have posed a
dilemma. The appellant would be facing a fresh claim in excess of R15 million

to which it had not been required to respond during the hearing before
Bertelsmann J and it would be precluded from raising that defence by the fact
that it could and should have raised this in relation to a claim of less than R1
million on the invoices. In those circumstances it would have been necessary
for us to consider whether this would give rise to injustice. However, although
the amended plea to the AMT claim purports to incorporate a reference to the
amendment of the agreement, nothing in the amendment impinges on the
defence actually pleaded as summarised in para 19 above. The reference to
the amendment is simply surplsage. In the circumstances, the allegation in
this regard in para 22.2.1 of the amended plea can be struck out, without
affecting the defence actually raised that AMT was a foreign company and the
respondent would not have sought to make sales to it.

The order
[31] In the result the following order is made:
The order of the high court is set aside and replaced with the following
order:
„1
The replication of res judicata is upheld and paras 9.2 to 9.4, 17.2 and
22.2.1 of the amended plea are struck out.
The second defendant is ordered to pay costs of the separate
determination of the issues raised by the replication.‟

The appeal is otherwise dismissed with costs, such costs to include
those consequent upon the employment of two counsel.

________________
D H Zondi
Judge of Appeal

Appearances
For the Appellant:
J Daniels (with him C T Vetter)

Instructed by:

Mervyn Taback Inc, Parktown

Webbers Attorneys, Bloemfontein

For the Respondent:
G Kairinos SC (with him A Schluep)

Instructed by:
Andrew Duff Attorneys, Bryanston

Bezuidenhout Inc, Bloemfontein