Introduction

Conduct or words that mislead a

person to act to his/her detriment
(Administrateur, Natal v Trust Bank van
Afrika Bpk)
Conduct: omission or commission
Possibility to claim for any kind of loss
based on any of the 3 Delictual actions
- as specific form of damnum iniuria
datum PEL only


Introduction (continued)
Initially, only intentional
misrepresentation was actionable
Roman and Roman-Dutch law: actio doli
English Law: Intentional misrepresentation
Administrateur, Natal v Trust Bank van
Afrika Bpk 832: Confirms --Aquilian
action available for negligent
misrepresentation
Requirements/Elements
(continued)
Existence of Misrepresentation question
of fact based on circumstances of case
Standard Bank of SA Ltd v OK Bazaars (1929)
Ltd: Element of conduct
(misrepresentation/misstatement) includes
1. Statement, which is
2. False;
3. Misstatement was material (influence to act);
4. Defendant intended plaintiff/person in
plaintiffs position to act upon misstatement;
5. Plaintiff in fact relied on misstatement.
Important
Considerations
Basis for liability
Defendant has legal duty to provide correct
info
Plaintiff has a right to correct info
Eg contractual relationship; public office etc
(see factors under Wrongfulness below)
Conduct vs Words
Cautious approach to (verbal) statements
[words] take effect in combination with
innumerable facts and other words ~
Hedley case
Elements mainly in issue-
Wrongfulness
Fault (Negligence)
Causation
Wrongfulness
Negligent misrepresentation that causes
pure economic harm is not prima facie
wrongful
Usually breach of legal duty
Reasonableness and boni mores as criteria
Judicial value-judgment (Dersley case)
Guidelines from case law (not numerus
clausus)
General Rule: In principle, no legal duty where
info given informally (but improper motive may
render misrepresentation prima facie unlawful) --
Except where the following factors are present
Wrongfulness (continued)
Exceptions to General Rule that indicate the
existence of a legal duty:
1. Statutory Duty
2. Contractual undertaking to give correct
information
3. Contractual relationship duty inter partes in
terms of matters relating to contract
4. Pre-contractual negotiations
5. Public office
6. Information in exclusive possession of person
in particular occupation
7. By reason of occupation, claims to have
professional knowledge
Wrongfulness (continued)
Above factors indicate wrongfulness,
but
Liability doesnt ensue just because
one/more of these are present: must prove
that legal duty owed to particular plaintiff
Defendant subjectively foresaw plaintiff as
person/category of persons who would rely on
the (incorrect) information
Even if all these factors are present courts
can still deny existence of legal duty due to
policy considerations (EG Electric case p706)
Negligence
Reasonable person test and principles of
reasonable foreseeability and
preventability
Mukheiber v Raath; Standard Bank of SA v
OK Bazaars
Contributory fault of plaintiff?
Causation
Factual causal nexus between
misrepresentation, misunderstanding
and harm (Administrateur, Natal v Trust
Bank 833):
Plaintiff misled by misrepresentation
(subjectively believed)
Plaintiff acted to his/her detriment as a result
of the misrepresentation
Causation (continued)
Legal causation: factors/requirements
that indicate sufficiently close link
Plaintiff him-/herself acted to own detriment
due to misrepresentation
Statutory duty on auditors and public
accountants: duty wider than common law
reasonable foreseeability requirement
Bayer South Africa (Pty) Ltd v Frost 1991 4
SA 559 (A): liability for negligent
misrepresentation that induces a contract
Causation (continued)
Legal causation: Factors (continued)

Concurrence of delictual and contractual
claim based on PEL? Preference to
contractual claim (Lillicrap case)
Negligent performance of professional
(contractual) service contractual claim due to
contractual duty (Cf Chapter 10, Textbook)
INTERFERENCE WITH A
CONTRACTUAL RELATIONSHIP
Introduction
Plaintiff not able to obtain performance ito contract
due to 3
rd
partys conduct
OR
Plaintiffs contractual obligations are increased due to
3
rd
partys conduct

3
rd
partys conduct: Intentional and without lawful
justification (Atlas Organic Fertilizers (Pty) Ltd v
Pikkewyn Ghwano (Pty) Ltd) 202F-H);
Intentional Infringement
Union Government v Ocean Accident and
Guarantee Corporation Ltd: In general no liability for
negligent infringement of contractual relationship
Dantex I nvestment Holdings (Pty) Ltd v Brenner
Meaning of intentional and wrongful
Knowledge of harm to plaintiff?
Lanco Engineering CC v Aris Box Manufacturers (Pty)
Ltd
Uncertainty as to whether negligence sufficient?
Thus -- No liability beyond historically justified
cases: E.g.:
Action of Dependants; Possessor of property ito contract
with owner; Seller as owner of damaged property
Intentional Infringement (continued)
Aquilian action for any intentional conduct which
causes infringement of contractual personal right /
increase of contractual obligation
Same approach to wrongfulness as in PEL cases
Interference must be contra bonos mores or unreasonable
Lanco Engineering CC v Aris Box Manufacturers
(Pty) Ltd
Not a requirement that wrongful & culpable interference
result in breach of contract or inducement to breach
contract (but can serve as important factors to determine
wrongfulness)

Instances of intentional interference
recognised in Case Law
1. Incitement to commit breach of contract
Atlas Organic Fertilizers v Pikkewyn Ghwano
2. Contracting party does not obtain performance to
which he/she is entitled ex contractu, but without
breach of contract/enticement
Dantex I nvestment Holdings (Pty) Ltd v Brenner
3. Inducement to lawfully terminate contract
Atlas Organic Fertilizers v Pikkewyn Ghwano
Lanco Engineering CC v Aris Box Manufacturers
(Pty) Ltd
4. Increasing contracting partys contractual
obligations
Shell and BP SA Petroleum Refineries (Pty) Ltd v
Osborne Panama SA
Instances recognised in Case Law
(continued)
General principles of Lex Aquiliae applicable
Particular importance (and difficulty): element of
wrongfulness
Right to goodwill of enterprise (Cf Caterham Car Sales &
Coachworks Ltd v Birkin Cars (Pty) Ltd)
Infringement of right to goodwill entails:
Factual disturbance + violation of legal norm contrary to
the spirit of capitalism / free competition
Norm of honesty and fairness in trade and competition
+ general wrongfulness criterion
Tolgaz Southern Africa v Solgas (Pty0 Ltd & another;
Easygas (Pty) Ltd v Solgas (Pty) Ltd & another 2009
(4) SA 37 (W): (see para 44-45)
Elements of Unlawful Competition; wrongfulness
requirements
FACTORS TO TAKE INTO ACCOUNT WHEN DETERMINING
WRONGFULNESS (Tolgaz case):
Fair-play / Honesty and fairness of relevant conduct
(statements included Atlas case)
Business ethics of particular sector
Existing positive law regulation / protection
Principles and importance of free market and strong
competition
Are the parties competitors?
Conventions with other countries?
Motive
Yardstick to concretise the abstract, vague
boni mores criterion where competitors
interests conflict
Van Heerden: Performance / Merit based
Competition Competitor who delivers
best & fairest performance
Same performance at better price / Better
performance at same price
Conduct not based on merit / performance =
wrongful
Competition is in principle lawful
(performance competition)
Unlawful competition = Wrongdoer uses
own goodwill in unreasonable manner to
infringe on goodwill of a competitor
Unreasonable?
Weigh interests of competitors based on factors
of honesty & fairness in trade, competition
principle:
Unjustified imbalance between benefit to one
competitor and prejudice to the other?
IMPORTANT FORMS:
1. Misleading public - ordinary client test
(misrepresentation regarding quality, character, price,
extent of own performance; does not necessarily
constitute passing off)
2. Passing off (trade name / -mark, get-up) probability of
misleading clients. Prove 2 things:
a) Plaintiffs distinguished sign gained reputation
b) Defendants copy creates probability of misleading
clients: -- Klimax Manufacturing Ltd & another v Van
Rensburg & another 2005 (40 SA 445 (O)
likely to deceive
general appearance while looking casually at the
product; imperfect recollection of consumers
3. Leaning on: Use of advertising signs (trade
mark/service mark) (made like / similar to)
Cf Stellenbosch Wine Trust Ltd v Oude Meester Group
Ltd
Cf Lorimar Productions Inc v Sterling Clothing
Manufacturers (Pty) Ltd
4. Undue influencing of public with regard to
own performance
5. Misappropriation of trade secrets /
confidential business information of
competitor:
STT Sales (Pty) Ltd v Fourie 2010 (6) SA 272 (GSJ)
Atlas case

7. Misappropriation of a competitors
performance (direct copying of performance)
Cf Schultz v Butt
8. Interference with contractual relationship
of competitor (commercial bribery?)
Atlas case
Woodlands Dairy (Pty) Ltd v Parmalat SA (Pty)
Ltd
9. Competition in breach of statutory duty
Netstar (Pty) Ltd & others v Competition
Commission of South Africa & another 2011 (3)
SA 171 (CAC)
Direct attack on a competitor
No question of performance / merit competition
rather an act to prevent competitors
performance from gaining reputation
In principle wrongful
Defences: private defence, necessity, public
interest
IMPORTANT EXAMPLES:
1. Disparaging statements regarding competitors
undertaking, products, services in a false or truthful
manner
Woodlands Dairy (Pty) Ltd v Parmalat (SA) (Pty) Ltd
2. Instigating a boycott against a competitor
Cf Deneys Reitz v SA Commercial, Catering and Allied
Workers Union
3. Physical / Psychological pressure on potential
clients, employees, suppliers
4. Direct attack that infringes subjective right of
competitor
Context of industrialised provision of
commodities
Constant risk of harm due to defective products
Complexity regarding mechanisation of
manufacturing process
Until recently based on Aquilian action NOW
legislation that imposes STRICT liability
Relatively new field in SA law comparative
law important (A Gibb & Son : USA and UK
jurisprudence)
INTRODUCTION
Wagener and Cuttings v Pharmacare (2003)
Questions raised with regard to a shift towards
strict liability
The role of the legislature in law reform as
paramount
The Consumer Protection Act 68 of 2008:
Came into operation in October 2010
STRICT LIABILITY
Factors to Justify shift towards strict liability:
Manufacturing of defective products creates
unusual high risk for consumers
Such risk often unavoidable
Difficulty of proving fault on part of manufacturer
Constitutional rights of physical-mental well-being
dictates highest standards in manufacturing goods
Marketing inspires confidence that products are
safe
Incentive to manufacturer to take utmost care
Economic perspective: manufacturer most
capable of absorbing and spreading risk of
damage by price increases and insurance
STRICT LIABILITY (CONTINUED)
Application of the Act
s5(1): General application
s5(2): Exemptions
s5(5): goods supplied in terms of exempted
transaction - s60 and s61 still apply to goods,
importer or producer, distributer or retailer
s6: Monetary threshold applicable to sizes of
juristic persons (read with s5(2)(b))
Sections particularly relevant for Delict:
Part H: ss53-61
s53: Definitions
s54: Consumers right to demand quality service
s55: Consumers right to good, quality goods
S56-57: Implied warranty of quality on new and
repaired goods
s58: Warning concerning fact and nature of risk
s59: Waste management
s60: Safety monitoring and recall
s61: Liability for damage caused by goods


Who is liable? s61(1)
Producer; Importer; Distributor; Supplier/Retailer
(defined in s 1)
Supplier/supply: Wide meaning (sell, rent,
exchange, hire ordinary course of particular
business)
Services: Sell, perform/cause to perform/provide
product; grant access to premises, event, activity,
facility
Incl: leasing, hire-purchasing, land transactions ito legal
interest in property other than interest covered by
definition of service (e.g. Liability for structural design
defects; hazards that occur on land)
Also: damages to product (land/buildings)
Problem: well-established principles in contract and
property law far-reaching and unforeseen effects...?

Nature of Liability: Strict - s 61(1)
action against producer, importer, distributor,
retailer without proof of negligence;
consumer can be purchaser or user;
action not limited by ambit of warranty given for
product
Why strict liability?
Issues of fairness, difficulty in proving negligence,
economic efficiency, deterrence, etc (see
factors lsited above).
Efficiency argument: burden of harm resulting
from defective product should fall on producer

Consumer: s 1
Person to whom goods are marketed in
ordinary course of suppliers business
Person who has entered into transaction
with supplier (subject to s5(2) and (3))
If context permits user, recipient,
beneficiary not necessarily party to
transaction
Franchisee, subject to ambit provided for
in s5(6)(b)-(e)
Goods for purposes of strict liability: s1
When are goods defective? s 53(1)(a)
Any material imperfection in
manufacture/goods/components/performance
of services that renders goods/results less
acceptable than would generally be
reasonably expected in the circumstances
Any characteristic of goods/components that
renders goods less useful/ practicable/ safe
than what could reasonably be expected in the
circumstances
THE CONSUMER PROTECTION ACT (CONTINUED)
Defect adequately defined? (Reference in
act to unsafe, failure in product,
hazardous...)
Inadequate instructions/warnings regarding any
hazard
Incorrect information:
Appears to be no distinction between incorrect
instructions and incorrect information from product (e.g.
medical equipment; books) issue of limitless liability
where information products are concerned
Standard of reasonable consumers
expectations: does this have same effect as
fault-based liability?
THE CONSUMER PROTECTION ACT (CONTINUED)
Liability for what kind of harm? s 61(5)
Death, injury, illness of natural person
Any loss of, or physical damage to, any
property (movable, immovable, defective
product itself)
Any economic loss resultant from the above
(e.g. Loss of profit)
THUS: Act allows for damages over and above
contractual remedies. Issue of limitless liability?
THE CONSUMER PROTECTION ACT (CONTINUED)
Introduction
General Principle: Loss suffered due to death or injury
of another person is NOT recoverable
Deviation from general principle: is there a duty to
support / be supported?
INSTANCES WHERE LOSS NOT RECOVERABLE: (i.e. no legal
duty recognised)
(1) Parents & Employers cannot recover loss suffered
due to injury to child or employee: Union Government
v Ocean Accident and Guarantee Corporation Ltd
(2) Contracting parties and the effect of injury or death
on the contractual relations: Union Government v
Ocean Accident and Guarantee Corporation Ltd
(3) Heirs & Legatees Reduced inheritance:
Lockhats Estate v North British and Mercantile Insurance
Co Ltd
Is this situation different from that of a disappointed
beneficiary?
Introduction
(continued)
INSTANCES WHERE RECOVERABLE:
(1) Heirs and Immediate family can recover funeral
expenses
Claim based on duty to bury / cremate (actio funeraria)
Critique?
(2) Executor:
In certain circumstances can claim o.b.o. estate
against wrongdoer:
Medical expenses to treat eventual fatal injuries;
loss of income from time of injury to time of death
only; (NOT future loss of income)
funeral costs;
Introduction
(continued)
(3) Persons with duty to support: (Action of
dependants)
Action is based on breach of legal duty
towards dependant.
E.g.: Argument that, in principle, breadwinner
can claim for monetary loss for e.g.
hospitalisation due to injury to child, but claim
not based on duty to support?
Neethling et al: unacceptable Legal duty not
to increase scope of duty to support?
Cf Apportionment of Damages Act: Dependant
as joint wrongdoer ( breadwinner claims for
delict committed against him/herself )

Action of Dependants

Death of Breadwinner: Legal Insurance Co
Ltd v Botes
Roman-Dutch law recognised this as compensation for loss
of maintenance (actio utilis) (Likely of Germanic origin:
revenge money divided among deceaseds children,
parents, blood relatives)
Purpose to place dependants in position they would have
been in, had breadwinner not died.
Different from normal Aquilian action?
Delict against breadwinner gives rise to independent claim
for benefit of dependants: separate cause of action (Evins
v Shield Insurance Co Ltd 837E-838C)
Nature of Action of Dependants
Direct action: Jamesons Minors v Central
South African Railway
Dependants claim based on infringement of
personal right of support from breadwinner
Pactum de non petendo concluded by support-
provider ineffective to prohibit action of
dependants
Support-provider / dependant as joint wrongdoer:
s2(1B), Apportionment of Damages Act
Evins v Shield Insurance Co Ltd: Determine fault
& wrongfulness with regard to death of support-
giver AND consequent harm suffered by
dependants
Requirements to Claim for Loss
of support
2 Requirements (Brooks v Minister of Safety &
Security; Santam Bpk v Henery; Amod v MMVA
Fund; Du Plessis v RAF)
1. Deceased had a duty to support dependant/claimant,
provided that
Legally recognised duty
Dependant in need of support
Breadwinner capable to provide the support
2. Dependant had a right to such support
Legally protected right
Existence of such right determined according to boni
mores criterion of wrongfulness: Amod case at 1326;
Henery case.
Legally Recognised sources of right /
duty to support: Basis in Family Law
1. Marriage or Similar Relationship
Amod v Multilateral Motor Vehicle
Accidents Fund: emphasis on flexibility of
the remedy
Customary Unions; Civil Unions Act
Union Government (Minister of Railways &
Harbours) v Warneke
Legally Recognised sources of right /
duty to support: Basis in Family Law
2. Blood Relation
(Biological / Adopted) Children (minor or
major) has right of support from both parents
(Du Plessis v Road Accident Fund)
Brooks v Minister of Safety and Security
Indigent Parents have right of support from
children (minor or major)
Grandparents have a right to support from
their grandchildren if children not able:
Barnes v Union and SWA Insurance Co

Damages
Patrimonial Harm = Loss of support only
Dependants should be placed in position they would
have been in, had the support-provider not died (Legal
Insurance Co Ltd v Botes)
Lambrakis v Santam Ltd: if estate of deceased support-
provider generates support as before the death No
loss suffered
Support-providers prospective income: Calculated on
annuity basis with the purpose to provide periodic
income for remainder of dependency
No loss recoverable if support-provider earned illegally
Possibility of lawful earnings in future?
Flexible approach necessary in order not to punish dependants for
actions of support-provider?
Injury to the Support-giver
In principle no distinction between action of
dependants for death / injury Abbot v Bergman;
Erdman v Santam Insurance Co Ltd
However, De Vaal v Messing: Injured breadwinner
must institute claim for loss of earnings/future
income which should be utilised as support for
dependants
Points to Ponder:
If dependants can prove loss, Apportionment of
Damages Act allows wrongdoer and (injured)
breadwinner to be joint wrongdoers
Should not any loss proved be recoverable, provided
that wrongdoer does not pay double?