A A Alloy Foundry (Pty) Limited v Titaco Projects (Pty) Limited

Titaco Projects (Pty) Ltd was contracted by Purity Ferrochrome (Pty) Ltd to design and supply a smelter, including contact shoes for furnaces. Titaco subcontracted A A Alloy Foundry (Pty) Ltd to manufacture 48 brass contact shoes. The shoes were required, according to the quotation and accompanying quality control plan, to comply with British Standard BS 2870/1980 CZ103, limiting lead content to 0.05%. The shoes supplied contained excessive lead, leading to operational problems. Titaco rejected the shoes and claimed damages. After Purity sold its business to Consolidated Metallurgical Industries Ltd (CMI), Titaco settled with CMI by supplying alternative copper shoes and making payments. Titaco sued A A Alloy Foundry for damages arising from breach of contract, including replacement costs and loss of management time.

The appeal was upheld only in respect of costs: the trial court’s order was amended to award costs on a party-and-party scale. The appeal was otherwise dismissed, with the appellant ordered to pay the respondent’s costs of appeal, including the costs of two counsel.

The case clarifies that documents accompanying a quotation, such as quality control plans, may be incorporated into a contract where they define the nature and description of goods. It affirms that collateral payments by third parties do not reduce damages suffered by a plaintiff, recognises loss of management time as a recoverable head of damages in contract, and provides guidance on when punitive costs orders are appropriate.