In December 1994, the appellant and respondent entered into three written agreements whereby the appellant 'sold' distribution rights for its product in defined areas to the respondent for R50,000 per agreement (R150,000 total). The respondent later instituted action in the magistrate's court claiming repayment of the R150,000 on the basis that it had cancelled the agreements due to the appellant's material breach of contract. The appellant did not defend the action and default judgment for R150,000 was granted and paid. The respondent did not claim damages in that first action. On 26 April 1996, the respondent instituted a second action in the Transvaal Provincial Division claiming damages of approximately R4 million based on the same alleged breach and cancellation. The damages claim consisted of expenses incurred in fulfilling obligations under the agreements and loss of income. The appellant filed a special plea arguing that the action was not competent due to res judicata, and alternatively that having elected to cancel and claim R150,000, the respondent was estopped from seeking further relief.
The appeal was upheld with costs. The order of the court a quo dismissing the special plea was set aside.
The binding legal principles established are: (1) The 'once and for all' rule requires a party with a single cause of action to claim in one action all remedies the law accords on such cause. (2) This rule is an application or manifestation of the exceptio rei judicatae vel litis finitae, involving a relaxation of the third requirement for res judicata (that the same relief must be sought). (3) Where a plaintiff has claimed restitution based on cancellation of a contract in one action, a subsequent action for damages based on the same cancellation is barred by res judicata through application of the 'once and for all' rule. (4) Claims for restitution and damages, though technically different, are sufficiently related remedies arising from the same broad cause of action (cancellation) to trigger the application of this rule. (5) A plea of res judicata encompasses the 'once and for all' rule and a party need not specifically label or etiquette the legal consequences of the facts pleaded. (6) Default judgment does not preclude the operation of res judicata in a subsequent action.
Van Heerden AJO made several obiter observations: (1) He noted that the 'once and for all' rule might not apply in exceptional circumstances, and if such circumstances exist, the plaintiff would need to plead them by way of replication or otherwise. (2) He observed that what was said about actions applies equally to motion proceedings. (3) He noted in passing that it was not permissible for the respondent to claim both positive and negative interest in the second action, but this was not relevant for purposes of the appeal. (4) He commented on the principle that a party need not etiquette the legal consequences of facts set out in pleadings. (5) He discussed the historical development of the res judicata requirements, noting that Voet identified exceptions where requirement (iii) need not be literally applied, such as where only part of a whole is claimed in a second action, or in the case of aedilitian actions.
This case is significant in South African law for clarifying and applying the 'once and for all' rule as a manifestation of res judicata in the context of contract cancellation. It establishes that where a plaintiff claims restitution based on cancellation of a contract in one action, they cannot subsequently bring a second action claiming damages based on the same cancellation. The judgment clarifies that the 'once and for all' rule is not a separate doctrine but rather an application of the exceptio rei judicatae involving a relaxation of the requirement that the same relief must be sought. It confirms and applies the principles from the leading case of Custom Credit Corporation v Shembe. The case is important for contract law and civil procedure, particularly regarding election of remedies and the finality of litigation.