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[1988] ZASCA 43
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Sandton Town Council v Erf 89 Sandown Extension 2 (Pty) Ltd. (93/87) [1988] ZASCA 43 (31 March 1988)
SANDTON TOWN COUNCIL
Appellant
(Defendant/Excipient
a quo
)
and
ERF 89 SANDOWN EXTENSION 2
Respondent
(PROPRIETARY) LIMITED
(Plaintiff
a quo)
Case No.. 93/87
mp
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE
DIVISION)
In the matter between:
SANDTON TOWN COUNCIL
Appellant
(Defendant/Excipient
a quo)
and
ERF 89 SANDOWN EXTENSION 2
Respondent
(PROPRIETARY)
LIMITED
(Plaintiff
a quo)
CORAM:
HOEXTER, NESTADT, VIVIER, KUMLEBEN, JJA
et VILJOEN, AJA
HEARD:
10 March 1988
DELIVERED
: 31 March 1988
JUDGMENT
HOEXTER, JA
2.
HOEXTER,
JA,
The respondent is a private
company which is the registered owner of an erf ("erf 89") in Sandown Extension
2 Township. The appellant
is a local authority constituted in terms of the Local
Government Ordinance 17 of 1939 (T), as amended ("the Ordinance"). In terms
of
sec 134(b) of the Ordinance the appellant gave the respondent notice of
the former's intention to lay stormwater pipes across erf
89 by the taking of
the right to do so. The provisions of sec 134 of the Ordinance empower the
appellant to carry out sewerage and
drainage work. For purposes of the present
appeal the relevant provisions of sec 134 are the following:-
"For the purpose of carrying out any
drainage works the council may
-
(a) cause such ... drains, and pipes
to be
made, laid and maintained either
within, or outside the municipality
as may be necessary for effectually
draining the municipality
or
any portion thereof
(b) carry such drains or pipes
through,
across, or under any public road, street, square,or open space, or any place
laid out as or intended for a public road,
street
3
street, square, or open place either within or outside the municipality, without
paying compensation and, after giving reasonable
notice in writing to the owner
or occupier of their intention, perform the same acts in respect of any land
within or outside the municipality
on making compensation for any damage done
, the amount whereof, if not
mutually agreed upon, being determined by arbitra= tion, provided that, in
determining any compensation
payable by the council hereunder the existence of
ahy sanitary passage through or over which the council has a right of access to
any private land or building for the purpose of sanitary service and which right
the council may be willing to surrender, shall be
taken into account;" (My
underlining)
Considering that the
presence of the stormwater pipes on
erf 89 would reduce the value of the
property, the respondent
claimed payment of R205,200 as damages form the
appellant.
The appellant refused to pay damages on the basis claimed
by
the respondent. In the Witwatersrand Local
Division the respondent instituted
an action against
the appellant. In terms of sec 134(b) of the
Ordinance read with sec 26(4)
and sec 21(1)(b) of the
Expropriation . .
4. Expropriation Act 63 of 1975,it claimed compensation
in the sum of R205 200,00 "as and for actual financial loss". The appellant
excepted to the respondent's claim. Having heard argument thereon,LE GRANGE, J
dismissed the exception with costs, including the
costs consequent upon the
employment by the respondent of two counsel. With leave of this Court the
appellant appeals against the
whole of the order made by the Court below. The
judgment appealed against has been reported: 1986(4) SA 576(W).
From the respondent's particulars of claim as amplified by the annexures
thereto it appears that the case pleaded by the respondent
is the following. Erf
89 is zoned for business rights. The respondent computes the loss in value of
erf 89 flowing from the laying
of the stormwater pipes across it as follows. It
says that if an office building be erected upon erf 89 the presence of the
storm=
water pipes will permit of 76 fewer parking bays being accommodated in
the basement of the building than would
otherwise
5.
otherwise have been the case. The appellant excepted to the respondent's
claim on the ground that it failed to disclose a cause of
action. The basis of
the exception was that upon a proper interpretation of sec 134(b) of the
Ordinance compensation was claimable
in respect only of direct physical damage
to the land itself.
In this Court the submissions advanced on behalf of the appellant by Mr
Heher
may be outlined somewhat as follows. He allowed that the carrying
of stormwater pipes across erf 89 necessarily involved an interference
with the
physical state of the land; and that such interference no doubt created a
correlative legal duty upon the appellant to fill
all excavations made in the
course of laying the pipes and to make good and restore the ground surface to
the condition wherein it
had been before the execution of the works. ït was
then said that the damage for which compen= sation was payable was confined
to
reparation for any
failure
6.
failure on the part of the appellant to make good and restore the
surface of the land upon completion of the works. What the meaning
of the phrase
"on making compensation for any damage done" did, however, not include was
pecuniary loss to the owner of erf 89 due
to a diminution of the value of the
land caused by the presence of the pipes.
The argument addressed to us in support of these broad submissions falls into
two parts. While recognising the strong presumption
in our law against con=
fiscation of rights, and although in general conceding what he described as "the
liberal approach" governing
the matter of compensation in the interpretation of
expropriation legislation, the first contention raised by Mr
Heher
was
that the Court below had failed to appreciate that in truth the appellant's
exercise of its power under sec 134(b) in the present
case was not in character
kindred to expropria= tion; that pursuant thereto no transmission of any right
by
the
7. the respondent to the appellant and no enrichment of the
latter at the expense of the former had taken place; and
that on this
account "compensation for any damage done"
should be restrictively
interpreted and confined to mere
physical damage. As a corollary to this
argument it was
also urged that a narrow construction upon the phrase
was
here warranted because any ensuing restraint upon the
respondent's
property rights in respect of erf 89 was simply
the result of a "control
measure" applied by the appellant
in order to promote public health and
convenience.
In my opinion the first contention must fail. Ownership of land connotes the
existence of an aggregate of distinct and valuable rights
inhering in the owner.
These include not only the right to exclusive possession and the right of
disposal,but also the right to the
use and enjoyment of the land for all lawful
purposes. Accepting then (as for purposes of the exception the Court
a
quo
correctly accepted)
the
8. the averments of fact made by the respondent, the following
situation emerges. The respondent may lawfully use erf 89
and turn it to
account by erecting an office building thereon.
The economic exploitation of
an office building on erf 89
entails the provision of a certain number of
parking bays
in the basement of such building. The presence of
the
stormwater pipes laid across erf 89 precludes the provision
of the
required number of parking bays. In the result the
exploitation of the
business rights attaching to erf 89 has
become less profitable to the
respondent; the presence of
the pipes inhibits the use to which erf 89 may
lawfully be
put and has therefore reduced its value. These facts afford,
I
think, a useful example of an owner of land being partially
divested, without
his consent, of one of his rights to owner=
ship. It is to be noticed,
moreover, that in terms of sec
135(1) of the Ordinance all pipes for the
disposal of drainage
constructed by the appellant vest in the latter. In all
these
circumstances it is tolerably clear, in my opinion, that the
right
9.
right taken by the respondent is a taking akin to expro=
priation. I
agree, with respect, with the observation made
by JANSEN, J (as he then was)
in
Pretoria City Council v
Blom and Another
1966(2) SA 139(T)
at 144A in relation to
sec 84(b) of the Ordinance (which empowers a council
to lay
pipes and wires for the conveyance of electric current, gas
and
water) that -
"This power to override private rights appears to be in many respects analogous
to a form of expropriation."
The second
contention advanced by Mr
Heher
, if I understood him correctly, amounted
to the following: With reference to decisions of this Court such as
Johannesburg Municipality v African Realty Trust Ltd
1927 AD 163
and
Breede River (Robertson) Irrigation Board v Brink
1936 AD 359
, counsel
for the appellant pointed out that the exercise of a statutory power whose
effect may be injurious to the rights of the
subject does not necessarily create
a
legal
10.
legal obligation to pay compensation for the injury on the part of the
public body exercising the power. Counsel urged upon us that
such decisions were
founded upon a recognition of the principle that the financial resources of
public bodies clothed with statutory
authority for the discharge of public
functions should not lightly be exposed to undue depletion. From this it
followed, so ran the
argument, that where in the context of the exercise of
statutory permissive powers the legislature had in fact provided for payment
of
compensation for damage thereby occasioned, any ambiguity in a provision for
compensation should be resolved by the adoption of
a restrictive construction
adverse to the injured subject.
In my judgment the second contention is
also
unsound. Whatever
co
nsiderations may impel a court to
conclude, in a case where the
legislation is silent as to
compensation for ensuing damage, that what has
been sanctioned
is
11.
is the invasion of private rights without compensation, it is
difficult to see how such considerations can in any wise be relevant
to an
appraisal of the very different situation in which express provision has been
made for compensation for damage to the subject;
and in which the sole inquiry
is confined to an interpretation of the true ambit of such
compehsation. To
the extent that the phrase in sec 134(b) "compensation for any damage done",
when viewed in its contextual setting,
yields ambiguity, I am unable to agree
that a court should be disposed to approach the problem of interpreting it
restrictively and
adversely to the party entitled to claim compensation. Here
relevant is the canon of construction succinctly stated in
Minister of
Railways and Harbours of the Union of South Africa v Simmer and Jack Proprietary
Mines, Limited
1918 AC 591
(PC). Dealing with a Raadsbesluit passed by the
Legislature in derogation of the rights of the subject
LORD
12-LORD SUMNER remarked in the course of his opinion
(at p 603) :-
"Under these circumstances their Lordships think that the construction ought to
be in favour of the subject, in the sense that general
or ambiguous words should
not be used to take away legitimate and valuable rights from the
subject without compensation, if they
are reasonably capable of being
construed
so as to avoid such a result consistently
with the general
purpose of the
transaction "
(See
further in this connection the decisions to which
reference is made at 579F/G
of the judgment by the learned
Judge in the Court below.)
The word "damage" in various and differing contexts has often been the
subject of judicial debate and decision. I do not think that
the many
authorities thereanent cited in the appellant's heads of argument lend much
assistance in the present case. While the phrase
"compensation for any damage
done" is at least susceptible
of
13.
of the narrow meaning which counsel for the appellant would
assign to it, one must bear in mind that the word "damage" is one of wide
and
general import. I find myself in complete agreement with the following remarks
contained (at 580 B/C) in the judgment of LE GRANGE,
J:-
"If the word 'damage' is used in its ordinary sense, the meaning of the phrase
'compensation for and damage done' is, in my view,
wide enough to include within
its scope not only compensation for any 'physical damage' occasioned by the
execution of the defendant's
drainage works, but also for any pecuniary loss
caused to the plaintiff by the impairment of the 'value or usefulness' of the
land
in question."
Counsel for the
appellant submitted that the use in sec 134(b) of the verb "done" in association
with the word "damage" tended to
signify mere physical damage rather than damage
comprising also consequential pecuniary loss. I am unable thus to read these two
words. So linked to the word "damage" the verb "done", in its natural and
ordinary
meaning
14. meaning, conveys, I consider, nothing more or less than
"caused". It is noteworthy that in the Afrikaans text
of sec 134(b) the phrase in question is rendered as:-
" teen vergoeding vir enige skade
veroorsaak"
(My underlining)
I proceed to consider whether in other parts of the Ordinance there are to be
gleaned helpful indications of a legislative intent
reinforcing either the
scanter compensation urged by the appellant or the ampler recompense suggested
by the respondent. Counsel
for the appellant sought to derive support for his
construction by contras= ting "compensation for any damage done" with certain
provisions in sec 67 of the Ordinance. This section empowers a council to close
streets permanently or to divert them. In terms of
sec 67(4)(a) provision is
made for the payment of -
" compensation for any
damage or loss
sustained
" (My underlining)
BY
15. by a person whose interests are adversely affected by the closing
or diversion of a street. Dealing first with the use in this
subsection of the
verb "sustained", there seems to me to be no substantial notional difference
between "damage done" and "damage
sustained". The verb "sustained" is more
fittingly employed in the context of sec 67(4)(a) because the "damage or loss"
is here related
to a "person" adversely affected. Dealing next with the words
"damage or loss", this phrase at first blush might seem to connote
a rather
broader concept than the single word "damage" used in sec 134(b); but this
initial impression is counter= balanced, I think,
by the consideration that
"loss" is a synonym for "damage"; and that both words readily convey the meaning
of "injury" or "impairment".
Such assistance as
Mr Heher
is able to
derive from the wording of sec 67(4)(a) appears to me to be rather meagre.
As a feature sustaining the broader construc= tion of the phrase in question
Mr Wulfsohn
pwith
Mr Pincus)
appeared
16.
appeared for the respondent, called our attention to the
provisions
of subsection (1) of sec 135 ("Vesting of sewers
in council and rights of
access thereto"). This subsection
gives a council the right of access to
private property for
the purpose of inspection and maintenance of sewers
and
pipes. To this end it empowers a council to uncover and
expose sewers
and pipes, but subject to a stipulation in the
following terms:-
"....provided that the couhcil shall repair all damage caused by such entry
and inspection."
In the light of the above counsel for the respondent urged
that had the
legislature in sec 134(b) intended the narrow
construction for which the
appellant contends, a more
appropriate wording for the compensatory provision
would
have been:-
"....on making compensation for any failure on the part of the council to
repair all damage caused by the carrying out of the drainage
works."
While
17. While there may be some force in this point made by Mr
Wulfsohn
, it is not,I think, a very cogent one,
Taking a broad view of these (and other) provisions in the Ordinance to which
we were referred by counsel on both sides, it seems
to me that beyond the
provisions of sec 134(b) itself there is little which affords material
assistance in the resolution of the
problem of construction whereon the result
of this appeal hinges. At all events I find no definite and clear language
anywhere else
in the Ordinance to bolster up the construction for which the
appellant contends. Accepting (as I have already found) that the power
exercised
by the appellant in taking the right. in question is akin to expropriation, and
further accepting (as for purposes of the
exception one must) that the value of
erf 89 has been substantially reduced by the taking of the right, what operates
decisively
in the case is the presumption against the taking or extinguishment
of a valuable right to property without compensation. In my
opinion
18. opinion the Court below rightly construed sec 134(b) in
favour of the respondent; and it properly dismissed the appellant's
exception.
The appeal is dismissed with costs, including the costs consequent upon the
employment of two counsel.
G G HOEXTER, JA
NESTADT, JA )
VIVIER, JA )
Concur KUMLEBEN, JA )
VILJOEN, AJA )