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2023
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[2023] ZAECQBHC 57
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Meyers N.O. and Others v Nelson Mandela Bay Metropolitan Municipality and Another - Exception (2923/2021) [2023] ZAECQBHC 57 (7 September 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA)
CASE
NO. 2923/2021
NOT
REPORTABLE
In
the matter between:
GARY
DAVID MEYERS N.O.
First
Plaintiff
HILTON
SAVEN N.O.
Second
Plaintiff
JACK
MEYERS N.O.
Third
Plaintiff
and
NELSON
MANDELA BAY
METROPOLITAN
MUNICIPALITY
First
Defendant
THE
BUILDING CONTROL OFFICER
OF
THE FIRST DEFENDANT
Second
Defendant
JUDGMENT
IN RESPECT OF EXCEPTION
HARTLE
J
[1]
In
this matter the defendants
[1]
persisted
with an exception taken to the plaintiffs’ amended particulars
of claim on the sole remaining basis that they lack
averments
necessary to sustain a cause of action.
[2]
The plaintiffs’ purported claim is
one in delict for damages (pure economic loss) alleged to have been
suffered as a direct
and consequent result of the conduct referred to
below.
[3]
The
plaintiffs have sued the defendants in their capacities as the
trustees of the Meyprop Trust (“the trust”). The
trust is
the registered owner of immovable property situated in Swartkops,
Gqeberha, (“the property”) which resorts
within the
municipal area of jurisdiction of the first defendant. The second
defendant is the “
building
control officer”
of the municipality appointed by the first defendant in accordance
with the provisions of the National
Building
Regulations and Building Standards Act, No. 103 of 1977 (“the
Act”),
[2]
as
read together with the Regulations promulgated in terms of the Act
(“the Regulations”). It is under the ambit or
in the
context of this legislation (“the empowering provisions”)
that the harm causing conduct described in the particulars
of claim
is said to have occurred.
[4]
The conduct essentially entails a failure
on the part of the municipality’s functionaries - on two
occasions in the course
of considering and approving plans submitted
to it under the empowering provisions, to have ascertained and drawn
the trust’s
attention to existing municipal services of which
it ought to have been reasonably aware, which failures, in turn, led
directly
to the losses sustained by the trust.
[5]
The
following factual averments set forth in the amended particulars of
claim (which I must for purposes of deciding the exception
assume to
be correct)
[3]
are
relevant to the trust’s contention that the defendants’
conduct in the peculiar circumstances of the matter attracts
liability for its economic losses in delict.
[6]
In August 2018 the trust, in accordance
with the relevant provisions of the Act and Regulations, applied for
the approval of a site
development plan and building plans
respectively with a view to the proposed development of its property.
On 11 and 14 December
2018 respectively, these received the go ahead
by the first defendant acting through its relevant functionaries,
including the
second defendant, who approved the building plans.
[7]
The
trust says that it complied with all conditions of approval, as
imposed by the “
defendant”
[4]
and
that it commenced with the construction and development at the
property in accordance with these plans, which commenced during
or
about late December 2018.
[8]
During
February 2019 the trust’s building contractors discovered, to
the surprise of its trustees since its existence was
not given
recognition on the approved site development plan and/or building
plans, a 450 mm effluent pipeline (“the pipe”)
under the
surface of the property, which extended underneath the newly
constructed warehouse on its property. The pipe extends
from the
western to the eastern boundary, and approximately 4 metres from the
northern boundary of the property.
[5]
[9]
The plaintiffs plead that the officers of
the first defendant, including the second defendant, did not advise
the trust (who was
entirely nescient) of the pipe’s existence
notwithstanding the fact that they knew or ought
reasonably to have known thereof.
[10]
The
trust avers further, in the context of the defendant’s failure
to have informed it of the pipe’s existence, additionally
that:
“
By
approving the SDP and/or Building Plans, the defendants represented
that no Municipal services, such as the 450 mm Pipe, would
be
adversely affected by the construction and development at the
property.”
[6]
[11]
The trust asserts that the defendant had a
“
duty of care”
to draw the fact of the pipe’s existence and position of its
current services (including the pipe) to its attention when
approving
the development of the trust’s property. Such duty arises from
the obligation on it to record and be aware of the
existing municipal
services, particularly those which traverse property owned by the
trust, and to have drawn attention to their
existence and position
prior to or at the time of approval of the plans. Concerning
their alleged negligence, the defendant
was said to have been in
possession of drawings showing the existence of the pipe in
accordance with the obligation on it to record
and be aware of the
existing municipal services at the time of approving the plans
(particularly those which also traverse the
property owned by the
trust) and therefore ought reasonably to have known of the pipe’s
existence so as to have drawn this
adverse effect by the proposed
development to its attention, which it failed to do.
[12]
The trust concludes that the defendant was
therefore both negligent and acted wrongfully in having failed to
draw the trust’s
attention to the existence and position of
current services, including the pipe, when approving the site
development and building
plans.
[13]
The consequence that would have been
averted had the trust been so advised at the relevant time is that it
“
would have made adjustments to
the SDP and Building Plans so as to avoid the additional costs
occasioned by accommodating such existing
services.”
[14]
On
12 June 2019 (by way of a circuitous route first to compel it to take
such steps and evidently upon the compunction of a court
order)
[7]
the
first defendant approved plans and drawings submitted by the trust
which allowed for the diversion of the pipe on the property
(“the
diversion approval”) which conditions it pleads it also
complied with.
[15]
On 28 June 2019 the first defendant
approved the trust's request for the relocation of the pipe (“the
relocation approval”).
Pursuant to this approval, on 16 October
2019 (“the October submission”), the trust through its
consulting engineers
submitted plans and drawings for approval by the
defendant of the design for the relocation of the pipe, for leave to
commence
with construction relating to the relocation of the pipe,
and for comment on all other municipal services that may or may not
be
affected by the proposed construction.
[16]
The
defendants required certain amendments to the plans and drawing
forming the subject matter of the October submission which the
trust’s engineers complied with and upon which they resubmitted
certain amended plans and drawings to the defendants for
approval
(“the December submission”). In resubmitting, they
repeated the same requests alluded to in paragraph 15 above
which
significantly called for “
comment”
on all other municipal services that may or may not be affected by
the proposed construction.
[8]
[17]
On
10 December 2019 the first defendant gave the trust its approval in
respect of the design relative to the relocation of the pipe
(“the
design approval”). In terms of this approval the trust was
required to relocate the pipe to a municipal servitude
area (i.e., a
servitude registered in favour of the first defendant) located to the
north of the boundary wall of its property
(“the servitude
area”).
[9]
[18]
Significantly, from the trust’s
perspective, the defendants did not advise the trust or its
engineers, of any existing municipal
services that may be affected by
the design or the design approval (despite a request for comment in
this regard), and it accordingly
put the work out to tender to attend
to the relocation of the pipe in accordance with the relocation and
design approvals.
[19]
After having awarded a tender to it,
Mawethu Civils (Pty) Ltd (“Mawethu”) commenced
construction work at the property
at the behest of the trust pursuant
to the design approval on 2 March 2020 when it discovered the
existence of nine high voltage
electrical cables within the servitude
area, with the result that the pipe could not be installed in the
servitude area, as per
the design approval.
[20]
The trust pleads that this has rendered the
design approval completely unusable and inoperable, with the result
that it must incur
further costs in having a new design prepared and
submitted for approval.
[21]
The trust avers that the defendant was
negligent in this respect too and acted wrongfully
.
Firstly, it is under obligation to record and be aware of the
existence of the existing municipal services and had been
specifically
asked on two occasions to comment on all other municipal
services that may or may not be affected by the proposed diversion or
relocation of the pipe so when it approved the design therefor, it
owed it a duty of care to have drawn its attention to the existence
of the high voltage cables. Secondly, since it was at the time of
approving the design in possession of original drawings showing
the
existence of the cables, it acted negligently in not ascertaining the
existence and position of the cables and in not informing
the trust
of same before or at the time of approving the design.
[22]
It pleads that had it been so informed at
the relevant time two consequences would have been averted. The first
is that Mawethu
would not have been instructed to commence work at
the property and, secondly, they would have adjusted the design so as
to avoid
the additional costs occasioned by accommodating the cables.
[23]
In
the result it claims damages in the sum of R1 312 621.00 made up
of various fees incurred as a result of the defendants’
negligence on the two occasions outlined above.
[10]
[24]
The
nature of the trust’s claim for the losses it claims to have
suffered is clearly one framed in the private law of delict.
[11]
[25]
The
first principle of the law of delict is that everyone has to bear the
loss that he or she suffers.
[12]
And,
in contrast to instances of physical harm, conduct causing pure
economic loss
[13]
is
not
prima
facie
wrongful. Accordingly, a plaintiff suing for the recovery of such
loss is in no position to rely on an inference of wrongfulness
such
as would flow naturally from an allegation of physical damage to
property (or injury to person) because the negligent causation
of
pure economic loss is
prima
facie
not wrongful in the delictual sense and does not give rise to
liability for damages, that is at least not unless policy
considerations
require that the plaintiff should be recompensed by
the defendant for the loss suffered thus rendering the conduct relied
upon
to be wrongful in the Aquilian sense.
[14]
(It
is on the basis of such policy considerations applied to the unique
factual situation that pertains in this matter that the
trust hopes
to recover its losses.)
[26]
The
plaintiff must allege facts from which the wrongfulness can be
inferred. If the element can be implied from the allegation that
the
defendant negligently caused the plaintiff’s damage, it is not
customary to allege separately that the act or omission
was
wrongful. This is the usual case, for example, where physical
damage was caused. If on the other hand wrongfulness cannot
naturally
be inferred from the nature of the loss, which will certainly be the
case where the plaintiff claims for a loss resulting
from an omission
or for pure economic loss (both of which apply in the present
scenario), the defendant’s legal duty towards
the plaintiff
must be “defined” and the “breach”
alleged.
[15]
[27]
Wrongfulness
can manifest itself in different ways, for example, as the breach of
a common law right, particular statutory duty,
or duty of care that
may arise for example from the provisions of the Bill of Rights. For
instance, the state has a positive duty
to protect individuals from
violence, and it’s failure to do so may give rise to
liability.
[16]
The
more specific the breach of a duty of care relied upon, obviously the
more information is required to be pleaded to give a context
to the
nature thereof and to provide a premise for why the court should
determine its existence, and breach, compensable by way
of a claim in
delict.
[28]
In
restating the common law test for determining whether particular
conduct is wrongful, policy considerations must dictate that
the
plaintiff should be entitled to be recompensed by the defendant for
the loss suffered.
[17]
In
Telematrix
(Pty) Ltd T/A Matrix Vehicle Tracking v Advertising Standards
Authority SA,
the
court held in this respect that:
[18]
“…
conduct
is wrongful if public policy considerations demand that in the
circumstances the plaintiff has to be compensated for the
loss caused
by the negligent act or omission of the defendant.
[19]
It is then that it can be said that the legal convictions of society
regard the conduct as wrongful,
[20]
something akin to and perhaps derived from the modern Dutch test
"in
strijd . . . met hetgeen volgens ongeschreven recht in het
maatschappelijk verkeer betaamt"
(contrary to what is acceptable in social relations according to
unwritten law).”
[21]
[29]
In
Knop
v Johannesburg City Council
,
[22]
an
appeal
against
a judgment upholding an exception by the respondent to the
particulars of claim of the appellant in an action for damages
brought by the latter, the basis of who’s claim was to be found
in allegations that that municipality’s officials owed
certain
duties to him in connection with the exercise of their statutory
powers in the course of a wrongful approval as it were
of an
application for subdivision under the Johannesburg Town Planning
Scheme and that the municipality negligently failed
to comply
with such duties in certain respects,
[23]
the court referred to this as a “legal duty”. It noted as
follows in this respect:
“
In
the phraseology of our law the “policy-based or notional duty
of care” is more appropriately expressed as a “legal
duty”, in consonance with the requirement of wrongfulness as an
element of delictual liability and the underlying concept
of legal
reprehensibility in respect of the causing of pure economic loss. As
is evident from the passage quoted from
Millner
, and from
the clear distinction in our law between fault and unlawfulness
referred to by CORBETT CJ in the
Simon’s Town
Municipality
case
supra
at 196F, the
enquiry into the existence of a legal duty is discrete from the
enquiry into negligence. Nor can the mere allegation
in the
particulars of claim that the Council was under a duty to take steps
to prevent loss being caused to the plaintiff carry
the day for him.
The existence of the legal duty to prevent loss is a conclusion of
law depending on a consideration of all the
circumstances of the
case. The general nature of the enquiry is stated in the well-known
passage in Fleming,
The Law of Torts
(4th edition),
quoted in the
Administrateur, Natal
case
supra
at
833
in fine –
834 A:
“
In
short, recognition of a duty of care is the outcome of a value
judgment, that the plaintiffs invaded interest is deemed worthy
of
legal protection against negligent interference by conduct of the
kind alleged against the defendant. In the decision whether
or not
there is a duty, many factors interplay; the hand of history, our
ideas of morals and justice, the convenience of administering
the
rule and our social ideas as to where the loss should fall. Hence,
the incidence and extent of duties are liable to adjustment
in the
light of the constant shifts and changes in community attitudes.”
[24]
The
enquiry encompasses the application of the general criterion of
reasonableness, having regard to the legal convictions of the
community as assessed by the Court (see, e.g.
Minister van
Polisie v Ewels
1975 (3) S A 590
(A) at 596 H – 597 F
and
Lillicrap’s
case
supra
at
498G-H).”
[30]
It
is to be noted from the excerpt above that the observation of the
court that the mere allegation that a defendant is under a
duty of
care to take steps to prevent the loss is insufficient has less to do
with a direction to a plaintiff as to how to
plead his cause of
action than on pointing out that the enquiry envisaged in order to
get to the conclusion that a legal duty exists
and that the conduct
in question is pursuant to the outcome a value judgement wrongful is
discrete from the enquiry into negligence
and cannot be morphed into
being by merely stating in one’s particulars of claim that a
duty of care not to cause harm exists.
Instead, the existence of a
duty of care to prevent loss is a conclusion of law
dependent
on all the circumstances of the case
.
[25]
It
begs the question, when all is in the pan, whether the defendant owes
a legal duty to the plaintiff.
[31]
It
is evident therefore that “
more”
is needed to justify a case that delictual liability should be
imputed in any particular set of circumstance.
[26]
Wrongfulness,
an element distinct from that of negligence
[27]
and
which lies in a failure to fulfil a different, legal duty, to prevent
harm to others,
[28]
must
be positively established
[29]
and,
so it was submitted on behalf of the municipality, a basis to justify
the conclusion sought to be drawn that its conduct in
this instance
should be determined to be wrongful, ought to be pleaded.
[32]
The last submission is an important one in
the context of the test upon exception. The issue before this court
is whether
the allegations of fact in
the particulars of claim, if assumed to be proved, are susceptible in
law of sustaining a finding that
the municipality in this
instance was under a legal duty to the trust, by exercising care, to
avoid the loss it seeks to recover
in the action which it says was
caused to it under the peculiar circumstances. If they are not, the
trust will be unable at the
trial to discharge the
onus
of
proving that the municipality’s conduct (committed through its
officials) was wrongful, and the exception would be well
founded.
[33]
As an aside the municipality initially also
objected to the trust’s particulars of claim on the basis that
they are vague
and embarrassing more particularly because they
contain no averments as to which portions of the empowering
provisions create a
duty of care by the municipality to the trust,
but this aspect of the exception was not pursued before me. Despite
this, submissions
were made at the hearing that the particulars of
claim are “fatally defective”, and that the municipality
does not
know what case to meet. In my view all of this relates
to a misconception created by taking the observation in
Knop
that “
Nor can the mere
allegation in the particulars of claim that the Council was under a
duty to take steps to prevent loss being caused
to the plaintiff
carry the day for him
”
out
of context or rather reading it in isolation without the next
important statement that: “
The
existence of the legal duty to prevent loss is a conclusion of law
depending on a consideration of all the circumstances of
the case.”
I have already stated in paragraph
[30] above that the first comment cannot be taken to mean what
counsel for the municipality contended
for.
[34]
The
enquiry into wrongfulness is evidently an
after-the-fact
objective assessment of whether conduct which
prima
facie
may not be wrongful should be regarded as attracting legal
sanction.
[30]
[35]
However, I do espouse the view that the
enquiry must at least precede from a “factual theory of the
case” premise that
suggests that it is fair and reasonable that
a duty should arise in the circumstances.
This,
as I will demonstrate below, the trust has sought in its particulars
of claim to do. For the rest all the essential
averments for
the delictual claim have been pleaded by it and it is quite clear
that it wishes to prevail on the trial court to
assess whether the
conduct it relies on is wrongful for the purposes of Aquilian
liability or not.
[36]
A
final word on this issue is to note the caution expressed by the
court in
Telematrix
that exceptions should firstly be dealt with sensibly,
[31]
and
that it is not true in all cases that it is appropriate to decide
issues of wrongfulness on exception where the issues are “fact
bound”.
[32]
Here
the trust hopes to be allowed the benefit of leading evidence
concerning the circumstances surrounding the various submissions
of
site development plans and building plans to the municipality. The
numerous annexures filed in support of averments portend
the
comprehensive evidence to come. They give an indication that
there may be relevant evidence that “can throw light”
on
the issue of wrongfulness.
[33]
It
would therefore be counterintuitive to decide the question of
wrongfulness without a detailed factual matrix that is reasonably
anticipated from the averments pleaded, read together with the
annexures and documentation provided in the trust’s statement
of case.
[34]
[37]
To
return to the theme that “more’ is needed to underpin the
after-the-fact objective assessment of wrongfulness, this
is
particularly so in the administrative law context which
naturally implicates the constitutional right to fair and just
administrative action under the provisions of the promotion of
Administrative Justice Act, No. 3 of 2000 (“PAJA”) that
provides for its own unique remedies and or consequences of any
unfair or unjust administrative action.
[35]
In
such a setting the element of wrongfulness similarly cannot be
assumed to exist in the presence of illegality or unlawfulness.
An
administrator may be liable in delict for damages caused during or as
a result of the performance of their statutory functions
but would
escape liability by showing that their actions were authorized by
statute (it is obvious that an action authorized by
statute cannot be
wrongful even if it infringes rights or causes other harm), or on the
basis that they were otherwise lawful.
[36]
[38]
The
breach of a constitutional or statutory provision (generally
applicable to the performance of an administrative function) does
not,
without
more
,
give rise to a delictual claim. It may however do so in either of two
circumstances. The first is when, on a proper construction,
the
breach of the empowering provision imposes an obligation to pay
damages for loss caused by the breach.
[37]
The
second is when the statutory provision, taken together with all the
relevant facts, and salient constitutional norms, mandates
the
conclusion that a common law duty, actionable in delict, exists.
[38]
[39]
These
two enquiries have been said to overlap.
[39]
If,
on a proper construction, a statutory or constitutional provision
provides that a litigant is not entitled to recover damages
for its
breach, then a common law claim for damages ought also not to arise.
The reason suggested for this is that to allow for
a damages claim
would subvert the statutory or constitutional scheme applicable in a
particular factual matrix, but this does not
necessarily follow. In
Steenkamp
CC
Langa CJ and O’Regan J penned a minority judgment in which they
disagreed with the proposition that if no conclusion as to
whether
liability should arise can be drawn from the relevant statute that it
is unlikely that policy considerations could weigh
in favour of
granting a common law remedy, this with reference to the approach
adopted by Cameron JA in
Olitzki
Property
Holdings v State Tender Board & another
(in
effect endorsed by both the SCA and CC in
Steenkamp
)
to the effect that where a common law duty is at issue :
“…
the
answer now depends less on the application of formulaic approaches to
statutory construction than on a broad assessment by the
court
whether it is “just and reasonable” that a civil claim
for damages should be accorded. “The conduct
is wrongful,
not because of the breach of the statutory duty per se, but because
it is reasonable in the circumstances to compensate
the plaintiff for
the infringement of his legal right”. The determination of
reasonableness here in turn depends on whether
affording the
plaintiff a remedy is congruent with the court’s appreciation
of the sense of justice of the community. This
appreciation must
unavoidably include the application of broad considerations of public
policy determined also in the light of
the Constitution and the
impact upon them that the grant or refusal of the remedy the
plaintiff seeks will entail.”
[40]
The proper construction of the empowering
provision (such as is applicable to the peculiar circumstances of
each matter) is thus
relevant to both enquiries and requires a
consideration of:
“
whether
the operative statute anticipates, directly or by inference,
compensation of damages for the aggrieved party; whether
there
are alternative remedies such as an interdict, review or appeal;
whether the object of the statutory scheme is mainly to
protect
individuals or advance public good; whether the statutory power
conferred grants the public functionary a discretion in
decision-making; whether an imposition of liability for damages
is likely to have a “chilling effect” on performance
of
administrative or statutory function; whether the party bearing the
loss is the author of its misfortune; whether the harm that
ensued
was foreseeable.”
[40]
[41]
As
can be seen above the trust has attempted to go into considerable
detail in pleading the necessary facts that give a context
and
background to the matter
[41]
to
illuminate the “
something
more”
that is required to hold the municipality liable for its pleaded
failures/omissions (or negligent misstatement) and going to the
element of wrongfulness.
[42]
In
Steenkamp
NO v Provincial Tender Board, Eastern Cape (“Steenkamp
SCA”)
[42]
the
court alluded to this “
something
more”
that is necessary to be established in laying down the
general approach to delictual liability for pure economic loss caused
by administrative breaches as follows:
“
Subject
to the duty of courts to develop the common law in accordance with
constitutional principles, the general approach of our
law towards
the extension of the boundaries of delictual liability remains
conservative. This is especially the case when dealing
with liability
for pure economic losses. And although organs of State and
administrators have no delictual immunity, "something
more"
than a mere negligent statutory breach and consequent economic loss
is required to hold them delictually liable for
the improper
performance of an administrative function. Administrative law
is a system that over centuries has developed
its own remedies and,
in general, delictual liability will not be imposed for a breach of
its rules unless convincing policy considerations
point in another
direction.”
[43]
[43]
In
Steenkamp
(CC)
the court considered whether a successful tenderer, whose award was
subsequently set aside, could recover in delict the out-of-pocket
expenses it incurred in reliance on the award. The court held that it
could not and, further, that “[c]
ompelling
public considerations require that adjudicators of disputes, as of
competing tenders, are immune from damages claims in
respect of their
incorrect or negligent but honest decisions
”.
[44]
[44]
The court however left open the question
whether an administrative decision tainted by other conduct having
its origin in the administrative
domain might yet attract delictual
liability. It held that “
if an
administrative or statutory decision is made in bad faith or under
corrupt circumstances or completely outside the legitimate
scope of
the empowering provision, different public policy considerations may
well apply.”
[45]
As
was pointed out by Mr. Buchanan who appeared on behalf of the trust,
Steenkamp
CC
does not postulate an absolute rule that there can never be such a
delictual claim unless one can establish
mala
fides
,
corruption or the like. It simply means that one has to
persuade the court that a legal duty exists to prevent loss to a
plaintiff in any instance of financial loss caused by improper
performance of a statutory or administrative function “
where
called for by policy considerations of fairness and
reasonableness.
”
[45]
[46]
Therefore,
notionally, any other “
misconduct”
(or
improper performance of a statutory or administrative function, or
misfeasance), that is other than merely incorrect or negligent
but
honest decisions,
[46]
might
for policy reasons require the Aquilian law of delict to be extended
to permit the recovery of a pure economic loss occasioned
by such
conduct but each case will in my view stand on its own merits and be
context specific.
[47]
In
this instance the particulars of claim allege actual knowledge of
existing services on the part of the relevant officials, including
the second defendant, and furthermore allege that the officials were
expressly requested to consider and investigate the presence
of
existing services which are self-evidently under their control.
[47]
Notwithstanding
such knowledge (which it must be accepted for present purposes the
trust could not have had absent the registration
of a servitude over
its own property concerning the pipe, or of the high voltage cables
on the neighboring erf), and notwithstanding
such request on more
than one occasion regarding the failure to identify the presence of
not one but several high voltage cables,
the officials of the
municipality simply failed to advise the trust of the presence of
such services, which failure, in turn, led
directly to the loss
sustained by it. It additionally relies on a negligent misstatement
which is a class of a claim on its own.
[48]
[48]
Against
this background the municipality’s complaint that the trust’s
amended particulars of claim lack averments to
sustain a cause of
action ring particularly hollow. I agree with Mr. Buchanan that this
is not a case where the process was free
of innocent errors or where
the kind of situation is one made provision for by exemptions in the
Act and regulations at least concerning
the process for the approval
of site development and building plans. The wrongful approval
of the plans which serves to demonstrate
that the municipal officials
(specialists in the engineering and land survey fields) are not on
top of their obligation to record
and be aware of their own services,
even when pressed for comment and assurance, is also particularly
reprehensible
[49]
and
provides a novel set of circumstances that deserve to be
assessed and put through the wringer of the indicated value judgment
required to establish if the trust’s invaded interests are
deemed worthy of legal protection by a private law remedy.
[49]
Finally,
on the issue of an appropriate public law remedy, the municipality’s
submissions were amplified after oral argument
when on 13 November
2022 the Constitutional Court in
Esorfranki
[50]
handed
down its judgment in which it was confirmed that the appropriate
avenue for a claim for compensation for loss sustained as
a result of
a breach of the precepts of administrative action is PAJA.
[51]
(Sic)
In my view the facts in
Esorfranki
are entirely distinguishable from the facts in the present matter and
the court’s pronouncement that it was both constitutionally
impermissible and unnecessary for it to extend the common law was
qualified to relate to the applicant’s unique claim.
Indeed, that matter related to the issue of whether delictual
liability attaches to an intentional breach of sections 33 and 217
of
the Constitution whereas the trust in this instance seems to eschew
any direct administrative law relationship. Though
the
judgement may influence how policy considerations evolve in the
future in the domain of administrative law, my conclusion is
that it
does not render the trust’s claim any less susceptible to a
finding that the conduct relied upon will be established
to be
wrongful in all the circumstances.
[50]
In
the premises the municipality has not met the onus on it to show that
the trust’s amended particulars of claim are excipiable
[52]
or
that that upon every interpretation which the pleading can reasonably
bear, no cause of action is disclosed.
[53]
[51]
As for the question of costs there is no
reason why these should not follow the result. Mr. Ronaasen who
appeared for the municipality
suggested that these courts should be
determined by the trial court depending how that might go for the
trust. He added that his
client may be criticized at the end of the
trial for not have taken the exception, but such overcaution must be
for its own account.
[52]
In the result I issue the following order:
1.
The exception is dismissed, with costs.
B
HARTLE
JUDGE
OF THE HIGH COURT
DATE
OF HEARING:
10
November 2022
DATE
OF PLAINTIFF’S
FURTHER
REPRESENTATIONS:
12
January 2023
DATE
OF DEFENDANTS’
FURTHER
REPRESENTATIONS:
19
January 2023
DATE
OF JUDGMENT:
7
September 2023
Appearances:
For
the Plaintiffs
:
Adv. R Buchanan SC instructed by STBB |
Smith Tabata
Buchanan Boyes c/o Pagdens, Gqeberha (ref. J Eksteen).
For
the Defendants
:
Adv. O Ronaasen SC together with Adv N L Nsepe instructed by Maci
Incorporated, Gqeberha (ref. SM/N0019/21/os).
[1]
I
intend to refer to the parties as they are cited in the main action.
In this instance the defendants are the excipients.
[2]
Section
5.
[3]
Voget
v Kleinhans
2003
(2) SA 148
(C) at 151.
[4]
The
first and second defendants are collectively referred to as “the
Defendant/s” in the particulars of claim, which
nomenclature I
will retain for purposes of referencing this pleading.
[5]
According
to the trust’s official demand addressed to the municipality,
included as an annexure to the particulars of claim,
the title deed
in respect of the property does not contain any reference to a
servitude. The evidence thereby portended
is that
sans
registration the trust could not been expected to have known of the
servitude. Also portended by correspondence attached
to the
particulars of claim and alleged in the pleading itself is the fact
that prior to the approval requests the municipality
was in
possession of original sepia service drawings that reflected the
water services traversing the trust’s property.
(The same
applies in respect of the second set of approvals. In this regard
the municipality was in possession of original service
drawings
recording the presence of high voltage cables in the servitude area
of a neighbouring property over which the trust
hoped by its second
application to relocate the pipe to instead of accommodating them
underneath its newly constructed warehouse.)
[6]
One
gets the impression (confirmed by the demand letter) that the
trust’s claim is also based on negligent misstatement
in this
respect. The notice heralded that it would also rely on a negligent
misstatement concerning the absence of any high voltage
cables in
the servitude area on the neighboring property that was supposedly
available for the relocation of the pipe, but this
was not carried
over in the particulars of claim.
[7]
A substantive application was launched under case number 1396/2019
to compel the municipality’s functionaries to consider
and
approve plans and drawings the trust submitted to it for the
diversion of the storm water pipeline on the property, and to
take a
decision on certain proposals that had been made by it to resolve
the conundrum that had been posed by the revelation
of the existence
of the pipe traversing its property. Although the municipality
filed a notice to oppose the application
it did not put up answering
papers and the court granted an order in the trust’s favour.
[8]
Possibly
the request was made in terms of section A3 (1) of the Regulations,
but the trust gives no further context to its request
for such
comments except to state that the defendant failed to respond.
In the trust’s official letter of demand
to the defendant it
appears (as I have stated elsewhere) that it possibly also relies
for the harm causing conduct on negligent
misstatement causing it
harm, if not on omissions. The first was its misrepresentation
(implicit in the approval of the
plans in the first place) that the
pipe did not exist, and the second, (again implicit in both the
relocation approval and the
failure to comment) that the high
voltage cables did not exist and that the servitude area in question
was available for the
purpose of relocating the pipe. I
understood the thrust of the trust’s argument to be that it
was the (mis)representations
made in this matter (
inter
alia
)
that gave it the edge over the kind of situation arising in the
Steenkamp
judgment which I refer to above, where the subject of the
administrative conduct in question in that matter concerned
negligent
but
bona
fide
errors made in the course of a tender board carrying out its
administrative functions.
[9]
It appears from annexures supplied that the servitude area is on a
neighbouring property.
[10]
It
would have been helpful to plead more specifically how each fee
arose to understand how the harm is causally connected to the
negligent conduct in each instance but the gist of it is there. One
of the factors that goes to wrongfulness is whether the harm
that
ensued was foreseeable. In
Steenkamp
NO v The Provincial Tender Board of the Eastern Cape
2007
(3) SA 121 (CC)
at
par [42] (“
Steenkamp
CC”)
we
are reminded that in the determination of wrongfulness
foreseeability of harm, although ordinarily a standard for
negligence,
is not irrelevant. The circumstances of this matter are
quite novel. From a property law point of view the pipe servitude on
the trust’s property (albeit not registered) could not be
wished away and had to be engaged with by the trust who it seems
as
a means of solving the problem offered to bear the costs of a
diversion subject to the reservation of its right to reclaim
such
costs down the line. An application to compel ensued, there was a
counteroffer, a plan and a revised plan etc. The
point sought
to be made is that it becomes hard to see what in the fees that were
invoiced are directly related to the claimed
negligence of the
municipality to have ascertained and advised the trust of the
presence and existence of the pipe and high voltage
cables, or to
the misstatement(s) relied upon concerning their presence and
existence respectively.
[11]
The
actio
legis Aquiliae
enables
a plaintiff to recover patrimonial loss, including pure economic
loss, suffered through a wrongful and negligent act of
the
defendant. Liability depends on the wrongfulness of the act or
omission of the defendant.
[12]
Telematrix
(Pty) Ltd T/A Matrix Vehicle Tracking v Advertising Standards
Authority SA
2006
(1) SA 461
SCA at [12]:
Steenkamp
NO v Provincial Tender Board, Eastern Cape
[12]
(“Steenkamp
SCA”)
at [1];
Min
of Fin v Gore NO
2007 (1) SA 111
(SCA) at [82];
Steenkamp
CC
at
[69].
[13]
Pure
economic loss in this context connotes loss that does not arise
directly from damage to the plaintiff’s person or property
but
rather in consequence of the negligent act itself, such as a loss of
property, being put to extra expenses, or the diminution
in the
value of the property. See
Telematrix
at [1].
[14]
Home
Talk Development (Pty) Ltd & Others v Ekurhuleni Metropolitan
Municipality
[2017]
3 All SA 382
(SCA) at [1].
[15]
See the requirements postulated in
Amler’s
Precedents of Pleadings
for
claims under the mantle of
Lex
Aquilia
and the cases cited therein.
[16]
Amler’s, and the cases cited therein.
[17]
Telematrix
at
[13].
Steenkamp
CC
at [39].
[18]
Telematrix
at
[13].
[19]
Minister
van Polisie v Ewels
1975 (3) SA 590 (A)
at 597A–B;
Olitzki
Property
Holdings v State Tender Board & another
2001 (3) SA 1247 (SCA)
para [12];
Pretorius
en andere v McCallum
2002 (2) SA 423 (C)
at 427E.
[20]
Minister
van Polisie v Ewels
),
Supra
,
at 597A–B.
[21]
Asser
Handleiding
tot de beoefening van het Nederlands Burgerlijk
Recht
:
Verbintenissenrecht
(9 ed)
(1994) Part III at 36–37.
[22]
1995 (2) SA 1 (A).
[23]
The
facts of that matter bear some similarity to those in the present
matter.
[24]
At
page 30.
[25]
Knop
at
page 27.
[26]
Telematrix
at
[13];
BOE
Bank Ltd v Ries
2002 (2) SA 39
(SCA) at [12] – [13]. The “more”
here envisaged is that the court must be persuaded that the legal
convictions
of the community demand that the conduct ought to be
regarded as unlawful. What will go into the pan, on the back
of the
allegation of wrongfulness, will in my view begin with a
theory of the case with a focus on all the relevant facts and
background,
an examination of the statutory context (if applicable)
and the nature of the statutory duty and end with a normative
analysis
and balancing of these involving legal policy.
[27]
Telematrix
at
[12].
[28]
Steenkamp
CC, at
[39] – [42];
Telematrix
at
[14]. See also
Knop
at
pages 26-27.
[29]
Country
Cloud Trading CC v MEC, Department of Infrastructure Development,
Gauteng
2014
(12) BCLR 1397
(CC) at paragraph
at
[23];
Esorfranki
Pipelines (Pty) Ltd v Mopani District
Municipality
2023 (2) BCLR 149
(CC) at [29].
[30]
Steenkamp
CC
at
[41].
[31]
Telematrix
at
[3].
[32]
At
[2].
[33]
At
[2].
[34]
At
[3].
[35]
See
Esorfranki
at
[32] and [43] in which the court noted the unique position
where the breach of a statutory provision giving rise to the
harm is
a constitutional one that additionally requires the court (in
determining the substantive issue of wrongfulness) to add
to its
list of considerations the norms of accountability by government
agencies and the constitutional principle of subsidiarity
that leads
one back to the all-encompassing provisions of PAJA which is
constitutionally mandated legislation designed to give
effect to
section 33 of the Constitution in both substantive and remedial
terms.
[36]
C
Hoexter and G Penfold, Administrative Law in South Africa, 3
rd
Edition at 704-9.
[37]
See
Knop
at page 31 where the court notes that the enquiry into the intention
of the legislature serves the purpose of determining whether
a
defendant owes a legal duty to the administrative subject to
exercise care in exercising the powers conferred upon it in relation
to his or her application, in that instance for subdivision
approval. In other words, did the legislature intend that such
an applicant should have a claim for damages in respect of loss
caused by the administrator’s negligence.
[38]
Esorfranki
at
[30].
[39]
At [31].
[40]
Esorfranki
Supra
at
[31].
[41]
The
trust has also extensively referenced official documentation
attached as annexures that portend what the evidence will be.
As
suggested in
Telematrix
at [2] the allegations are “
fleshed
out by means of annexures that tell a story
.”
[42]
2006 (3) SA 151
(SCA).
[43]
at [27].
[44]
In
the present scenario we are not concerned with the exercise of a
discretion.
[45]
See
in this regard Moseneke DCJ’s amplification of his judgement
in
Steenkamp
articulated
in
“All Rise A judicial Memoir”
at 184 to such effect.
[46]
Policy has already been formed through the sentiment expressed in
Logbro
Properties CC v Bedderson NO and Others
2003 (2) SA 460
(SCA) at [17] for example that administrative
subjects are “
..not
entitled to a perfect process, free of innocent errors, and the
administrative subject could not expect to be immunised
from all
prejudicial consequences flowing from such errors.”
Telematrix
at
[26] also puts the decisions of adjudicators beyond the pale and as
being immune to damages claims in respect of their incorrect
and
negligent (but not made in bad faith) by reason of public policy
considerations, the overriding consideration being that,
by the very
nature of the adjudication process, rights will be affected and that
the process will bog down unless decisions can
be made without fear
of damages claims, something that must impact on the independence of
the adjudicator. An example on the
other side of the coin, where the
court has felt compelled by policy considerations to permit a
private law remedy is that of
Minister
of Finance v Gore
2007 (1) SA 111
(SCA) in which the loss of a contract (in a tender
process) had been brought about by dishonesty or fraud on the part
of the
public officials concerned. In
Olitzki
,
where the defendant’s conduct was found to be deliberate and
dishonest, the court noted that these factors “strongly”
suggested a basis for liability to following damages even where a
public tender is being awarded.
[47]
Section
116
of the
Local Government: Municipal Systems Act, No. 32 of 2000
provides that public servitudes are under the control of the
municipality which must protect and enforce the rights of the local
community arising from these servitudes. Local authorities also have
obligations with regard to maintaining the accuracy of details
required pursuant to the
Land Survey Act, No 8 of 1997
. In this
instance there is also the suggestion of evidence that will
establish that the municipality is in possession of original
service
plans that reflect the existence and presence of the pipe and high
voltage cables that are the subject of the trust’s
claims.
[48]
This
presupposes an already established category of claim for pure
economic loss where the plaintiff can show a right or legally
recognized interest the defendant has infringed without having to
extend the law of delict. See
Country
Cloud Trading CC v MEC, Department of Infrastructure Development,
Gauteng
2014 (12) BCLR 1397
(CC) at paragraph [23] in which the court refers
to the classic example in
Mukheiber
v Raath and others
1999 (3) SA 1065 (SCA).
I imagine though that it would have to be relooked at through the
prism of public
policy considerations applicable to an
administrative law setting.
[49]
See
Esorfrank
i
at [42] where the court held that the intensity of the defendant’s
fault is also relevant to the wrongful enquiry.
[50]
Supra.
[51]
At
paragraph [47].
[52]
South
African National Parks v Ras
2002
(2) SA 537
(C) at 541ff.
[53]
Herbstein
and Van Winsen, Supra
,
at 639 and the authorities set out in footnote 50.