Sutherland v Drake Flemmer & Orsmond Inc (1576/2015) [2015] ZAECPEHC 65 (24 November 2015) per Revelas J.
The High Court refused to uphold the attorneys’ argument that the plaintiff can only claim damages by referring to the date of the breach of contract being the date when the plaintiff accepted the Fund’s offer, i.e. 21 December 1999, acting on the advice of the attorney. The plaintiff’s truncated future employment was not investigated and he was not examined by any medical expert to fully determine the nature and extent of the injuries. His claim was not properly quantified and he later realised that he had been badly advised to accept the settlement offer. A second attorney failed to institute an action for damages against the first attorney based on professional negligence and breach of contract, but that claim prescribed with the result that the plaintiff instituted action against both attorneys. The only two issues remaining for determination at the trial are causation and quantum.
Excerpts [footnotes omitted]
Applicable Principles
[13] The liability of an attorney towards his or her client for damages resulting from that attorney’s negligence, is based on a breach of contract between the parties.
“It is a term of the mandate that the attorney will exercise the skill adequate knowledge and diligence expected of an average practicing attorney. An attorney may be held liable for negligence even if he or she committed an error of judgment on matters of discretion, if the attorney failed to exercise the required skill, knowledge and diligence.”
[14] The defendants, emphasized the difference between contract and delict in the context of awarding damages, and in this regard relied on the following passage from the judgment in Trotman & Another v Edwick:
“A litigant who sues on contract sues on contract sues to have his bargain or its equivalent in money or in money and kind. The litigant who sues on delict sues to recover the loss which he has sustained because of the wrongful conduct of another, in other words that the amount by which his patrimony has been diminished by such conduct should be restored to him.”
[15] The defendants further relied on the judgment in Fourie v Ronald Bobroff and Partners Incorporated [2015] 2 All SA 210 (GJ). In that matter the plaintiff (Fourie), as in the present case, sued her former attorneys for their alleged negligent breach of their mandate to institute and pursue her claim against the Fund with the standard of diligence, care and skill reasonably expected of attorneys. Fourie’s case similarly arose out of an alleged under-settled claim against the Fund. In summing up the relevant legal principles applicable to the liability of an attorney for negligence, Weiner J referred to JR Midgley: Lawyers’ Professional Liability, where the learned author deals with the liability in the context where a lawyer (or an attorney) is alleged to have under-settled the matter, resulting in a loss for his client.
These are:
“a. Where a plaintiff alleges that he/she has suffered a loss because a settlement was too low, he/she needs to prove that the amount recovered is less than the amount which would have been determined by a properly negotiated settlement or that which a Court would have ordered. The award will be the difference between the two amounts (page 172).
b. Every lawyer has a duty to establish the facts and evidence which can best assist his client. Where the settlement figure, as a result of his failure to investigate properly was too low, an attorney will be held liable.
c. Damages suffered by a client as a result of breach of the mandate should be assessed at the time when the agreement was concluded containing the alleged under-settlement. It is then when the loss is crystallised. The Court dealing with a second action to claim the damages suffered as a result of the under-settlement will thus have to establish the amount which would have been recovered on a balance of probabilities at the time of the under-settlement and with the information then available (page 68).” (Emphasis added)
[16] In Fourie, Weiner accepted as trite that in order to assess whether the defendant was negligent, that one has to look at the situation as it was at the date on which the alleged under-settlement occurred. As a general proposition, that view is correct.
[17] However, the judgment in Fourie does not constitute authority for the defendants’ proposition in this matter, i.e. that a court may not look at any evidence (in this case, reports relating to quantum), obtained after 21 December 1999. Weiner J had to determine, inter alia, whether negligence was established or not, and clearly, in that context she had to have regard at the situation at the time of the breach. In the present matter, negligence has been conceded. Fourie’s case concerned a claim for loss of support (one of the claims) which could be computed with far more certainty and reference to fixed dates, than a claim for loss of future and past income and certain items under general damages. In the determination of quantum in these type of cases, the date of breach may be relevant but, is not necessarily a “cut-off” point beyond which no evidence can be led. The aforesaid question was in any event not raised in Fourie.
[18] In Rens v Coltman the following was said in relation to the rule that damages are generally assessed as at the date of breach:
“The application of this rule will ordinarily require in many cases, and typically the case of a breach of a contract of sale by the purchaser, that the date for the assessment of damages be the date of performance, or as it has often been expressed, the date of the breach. But even in contracts of this nature, there is no hard and fast rule (cf Culverwell and Another v Brown 1990 (1) SA 7 (A) at 30G – 31H) and in each case the appropriate date may vary depending upon the circumstances and the proper application of the fundamental rule that the injured party is to be placed in the position he would have occupied had the agreement been fulfilled.
The position is the same in England. In Miliangos v George Frank (Textiles) Ltd [1975] 3 All ER 801 (HL) Lord Wilberforce (at 813) recognised that
”as a general rule in English law damages for tort or for breach of contract are assessed as at the date of the breach” but in the same passage emphasised that the general rule did not preclude the Courts in particular cases from determining damages as at some later date.”
[19] In cases such as the present matter, involving professional negligence of attorneys, the distinction between claiming damages arising from a breach of contract and claiming damages arising in delict, is not as clear as the defendants would have it. In JR Midgley’s work (referred to above), reference was made (in relation to the aforesaid), to the case of Esso Petroleum Co v Mardon, where Lord Denning MR observed that in the case of a professional person:
“[d]amages should be, and are, the same, whether he is sued in contract or in tort.”
The aforesaid proposition stands to reason. The type of action in question involves by its very nature, questions of contract (the breach thereof) and negligence in the form of an omission.