Masstores (Pty) Ltd v Murray & Roberts Construction (Pty) Ltd

Masstores (Pty) Ltd engaged Murray & Roberts Construction (Pty) Ltd under a standard JBCC building contract to effect alterations and additions to an existing Makro warehouse at Strubens Valley, Roodepoort. During construction, employees of a subcontractor were cutting the roof of the existing structure with an angle grinder when a fire broke out, destroying the warehouse and its contents. Masstores sued Murray & Roberts for breach of contract, alleging negligent and grossly negligent failures to comply with laws and safety regulations and to ensure safe execution of the works, and claimed damages of approximately R169 million. Murray & Roberts raised an exception to the particulars of claim, relying on clause 9.2.7 of the contract, which indemnified the contractor against physical loss or damage to an existing structure and its contents in respect of which the agreement was for alteration or addition.

The appeal was dismissed with costs, including the costs of two counsel.

The case is a leading authority on the interpretation of indemnity and exemption clauses in South African construction contracts, particularly standard-form JBCC contracts. It affirms that such clauses must be interpreted contextually, with due regard to the contract’s overall allocation of risk, and confirms that broadly worded indemnities can exclude liability for negligent and even grossly negligent breach of contract without an express reference to negligence.