Can you sue for mental distress and disappointment following breach of contract?

November 1st, 2020
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In a post-industrial society, consumer goods and services are in abundance. Certainly, present day consumers enjoy the benefit of an increasing range of goods and services, and modern goods often afford a level of comfort and convenience which is often taken for granted. Whereas, for example, many years ago a motor vehicle was considered a ‘luxury’, it is now regarded as a necessity for many people. What follows when a new product disappoints a consumer by failing to perform may result, to use the words of Rougier J in Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, in a day ‘well and truly ruined’. Can a consumer in South African law claim damages for mental distress and disappointment for a defective product or substandard services?

Firstly, one should note the manner in which the concepts relating to the matter under discussion have been used. In England and Wales, the courts use the words ‘mental distress’, ‘vexation’ and ‘disappointment’ interchangeably as encompassing a single head of damage (see Michael Furmston (Ed) Common law Series: The Law of Contract 6ed (London: LexisNexis 2017) at 8.60). In South Africa (SA), there is a difference between, on the one hand, physical inconvenience, for which damages are formerly recoverable on the authority of Jockie v Meyer 1945 AD 354 and, on the other hand, mental distress and disappointment (see AJ Kerr ‘Mitigation Expenses and Charges, and Inconvenience and Mental Distress in Contract’ (1977) 94 SALJ 132 at 135). This discussion does not seek to answer the question of wasted expenses and costs following breach of contract.

England and Wales case law

The courts in England and Wales award damages for vexation and mental distress in breach of contract matters. In the case of Bernstein the plaintiff had bought a new motor vehicle from the defendant, which had a latent defect. After travelling for over 100 miles, the car started to make some unusual noises while on the highway. The plaintiff stopped the car on the hard shoulder and switched off the engine. Attempting to carry on with his journey, the car would not start again and the plaintiff’s trip was frustrated. The defect turned out to be that a piece of sealant had possibly dropped off into the engine during assembly, which had cut off the flow of engine oil. The plaintiff then sent a letter to the defendant purporting to reject the car and cancel the contract. The plaintiff was also partly motivated by fear that there could well be other problems looming with the car. The court awarded the plaintiff damages for, inter alia, ‘a totally spoilt day, comprising nothing but vexation’.

In Yearworth and Others v North Bristol NHS Trust [2009] EWCA Civ 37 the Court of Appeal, insofar as a contract of bailment was breached, awarded damages for, inter alia, mental distress. In discussing the law in England and Wales, it was noted that the courts had successively expanded the types of contracts in respect of which such awards were made to also encompass those contracts, which are not purely commercial, but which have as their object the provision of enjoyment, comfort, peace of mind, or other non-pecuniary personal or family benefits (see Johnson v Unisys Ltd [2001] UKHL 13). As it turns out, a significant number of consumer contracts tend to have these attributes.

South African law

In SA, a significant number of goods are sold with product warranty. This entails that should a product turn out to be defective, the consumer will be entitled to return the product to the manufacturer for repairs or replacement, according to the terms of the warranty. In SA, the Consumer Protection Act 68 of 2008 provides in ss 55 and 56 for a somewhat broad implied warranty of the quality of goods, which includes that the product is reasonably suitable for the purposes for which it is generally intended, and that it is of good quality, in good working order and free of any defects. Perhaps barring special cases, when a consumer has bought a product that later turns out to have defects, they are most likely to go back to the trader and simply ask to repair it (as happened in Vousvoukis v Queen Ace CC t/a Ace Motors 2016 (3) SA 188 (ECG)) or replace it, before looking at any legal steps they may take. This may result in the initial contract of sale being affirmed rather than being cancelled. However, should the consumer claim damages, the measure of damages is well-known – the consumer has to be placed in the position they would have occupied had the contract been properly performed – so far as this can be done by the payment of money without undue hardship to the party in breach (Rens v Coltman 1996 (1) SA 452 (A)). These are known as general damages because they arise naturally according to the usual course of things from the breach itself (see Lavery & Co Ltd v Jungheinrich 1931 AD 156). Special damages, on the other hand, are those which may reasonably be supposed to have been within the contemplation of the contracting parties as likely to flow from the breach (see Lavery & Co Ltd at 169)).

The case of Jockie involved a claim for damages for inconvenience and mental suffering against a hotel proprietor following breach of contract. The inconvenience comprised of the fact that the appellant had to walk long distances each day from the alternative accommodation, which he ultimately secured, in order to reach the ship where he worked, as compared to the distance he would have had to travel from the respondent’s hotel, which was located nearer to the ship. Tindall JA upheld the judgment of the court below awarding damages for inconvenience. With regard to mental suffering, the court held that damages under this head, cannot be recovered in an action founded on breach of contract. This decision was seen as creating a dichotomy between physical inconvenience and mental distress (see Kerr (op cit) at 135).

There are hurdles in South African law to any claim for non-pecuniary loss arising out of breach of contract. Damages for mental distress, inconvenience or disappointment would be typified as non-pecuniary loss. In Administrator, Natal v Edouard 1990 (3) SA 581 (A) the Appellate Division departed from the Jockie case. After reviewing earlier case law and old authorities on the point, the court held that under Roman-Dutch law intangible loss could not be recovered in a contractual action. This decision was followed in subsequent cases. In First National Bank of South Africa Ltd v Budree 1996 (1) SA 971 (N), the court had to decide on exception as the respondent, in a claim in reconvention, alleged that she had suffered damages to her good name, and business and professional reputation when a cheque she had drawn on the bank was dishonoured despite there being sufficient funds in her account. As a result of the dishonoured cheque, the holder of the cheque had commenced proceedings against her and had lodged a complaint at the Natal Law Society. The respondent’s claim was not for patrimonial loss (ie, that her credit was injured by the dishonour). Relying on the case of Administrator, Natal, Page J held that no damages can be recovered for injured feelings or humiliation suffered as a result of a breach of contract.

In Tweedie and Another v Park Travel Agency (Pty) Ltd t/a Park Tours 1998 (4) SA 802 (W) the appellants had purchased a travel package from the respondent, which included airline tickets to London, as well as tickets to be provided once there to watch a Rugby World Cup match. The respondent then failed to fully perform its side of the bargain by not affording the appellants the relevant tickets for admission to the stadium. Although there was no claim for damages for mental distress and inconvenience, the court stated that inconvenience occasioned to the appellants in their travelling halfway around the world to see a rugby match on television, which they could just as well have done in the comfort of their own home, was irrelevant. The court stated that, in line with Administrator, Natal, contractual damages must be confined strictly to patrimonial loss.

The second hurdle is based on the assumption that a plaintiff will frame their claim as special damages or what has also been referred to as consequential loss. These are damages that do not naturally flow from the breach of contract, but arise on account of some special circumstances of the innocent party. As a litigant would have to prove special circumstances in order for a claim for special damages to be successful, such a claim is likely to be met by the argument that the loss is too remote. In other words, the defendant is likely to advance the argument that the loss could not reasonably be supposed to have been within the contemplation of the contracting parties as likely to flow from a breach of the contract. In the case of Jockie, Tindall JA at 363 characterised the inconvenience as amounting to special damages.

Furthermore, in South African law, there are prevailing attitudes which hold that a court should not over-compensate the innocent party to the contract (see GB Bradfield Christie’s Law of Contract in South Africa 7ed (Durban: LexisNexis 2016) at 616), nor should it cause undue hardship to the other party in coming to a decision whether to award damages.

Conclusion

In SA, the idea of awarding damages for mental distress and vexation seems to fall foul of the general principles relating to the award of damages for breach of contract. These include the principles that the innocent party should not be over-compensated, that damages that are too remote are not recoverable, and that generally intangible loss occasioned by a breach of contract is non-compensable.

To return to the question posed earlier, due to the legal and policy context of our legal system, South African courts are unlikely to award damages for mental distress and disappointment in consumer contracts of sale or the provision of services.

Stephens Molekwa LLB (cum laude) (UNISA) LLM (UKZN) is a legal practitioner in Johannesburg.

This article was first published in De Rebus in 2020 (Nov) DR 28.