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[1994] ZASCA 159
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Knop v Johannesburg City Council (669/92) [1994] ZASCA 159; 1995 (2) SA 1 (AD); [1995] 1 All SA 673 (A) (18 November 1994)
Case No: 669/92 IN THE SUPREME COURT OF SOUTH AFRICA
In the matter between
P J KNOP Appellant
and
CITY COUNCIL OF JOHANNESBURG Respondent
CORAM:
BOTHA, HEFER, VIVIER, NIENABER et HOWIE JJA
Heard:
23 September 1994
Delivered:
18 November 1994
J U D G M E N T
BOTHA JA:-
2 This is an appeal, with the leave of the Court
a quo,
against a
judgment
upholding with costs an exception by the
respondent to the particulars of claim
of the appellant in an action
for damages brought by the latter against the
former in the Witwatersrand Local Division. I shall refer to the
appellant as
" the plaintiff" and to the respondent as "the Council".
For the purposes of paraphrasing the particulars of claim the
plaintiffs
allegations can be divided into three parts,
as pertaining respectively to the
introductory facts, the basis of the claim, and the damages claimed.
The
introductory facts alleged are as follows:
1
The Council is a
local authority constituted under Ordinance 17 of
1939.
2
On 16 August 1988 the
plaintiff applied to the Council for the subdivision of Erf 1793, Triomf ("the
property"), in terms of clause
36 of the Johannesburg Town Planning scheme ("the
Scheme").
3 The application was made by the
plaintiff for the purposes of
developing a cluster housing complex ("the project"). 4 The application
for subdivision was approved by the Council on 5
3 December 1988.
5 The Council notified the plaintiff of the approval of the application, and
as a result the plaintiff took certain steps with a view
to developing the
project,
inter alia
by procuring financing, incurring expense, entering
into sales of the units and proceeding with building operations.
6 On 27 April 1990 the Council notified the plaintiff, by means of a letter
addressed to the land surveyors who had been appointed
by the plaintiff, that
approval of the subdivision had been granted in error, contrary to the
provisions of clause 36(2) (b) of the
Scheme, in that the subdivision as
approved allowed erven of a minimum size of 200 square metres, whereas the said
clause laid down
a minimum size of 250 square metres. (In the letter, which is
annexed to the particulars of claim, the Council offered to procure
an amendment
of the Scheme by rezoning the property so as to allow a density of one dwelling
per 200 square metres.)
7 The Council in acting as set
out in paragraphs 4,5 and 6 above, was represented by officials who acted within
the scope of their
employment
4 and in the performance of their duties on behalf of the
Council.
8 The officials were empowered to approve the
application in terms of
section 92 of the Town-planning and Townships Ordinance 15 of 1986
("the Ordinance").
The basis of the plaintiffs claim
is to be found in allegations that the Council's officials owed certain duties
to the plaintiff
in connection with the exercise of their statutory powers and
that they negligently failed to comply with such duties in certain
respects. The
alleged duties are as follows: (i) not to exercise their statutory powers in an
unreasonable manner,
alternatively, when exercising their powers, to take reasonable steps
to
prevent loss being caused to the plaintiff; (ii) in terms of section
92(5) of the Ordinance, to take all reasonable steps
to ensure that the exercise of their powers would not bring about
a
result which would be in conflict with a provision of the Scheme; (iii)
in exercising their powers, to give proper attention to and
use
reasonable care in the consideration of the application; and (iv) not to
make a misstatement to the plaintiff to the effect that the
5
application was not in conflict with the Scheme, if that were not so.
It is alleged that the officials were negligent in the following
respects:
(i) they failed to exercise their statutory powers in a reasonable manner,
alternatively, they failed to take all reasonable steps
to prevent the loss
actually suffered by the plaintiff;
(ii) contrary to section 92(5), they failed to take all reasonable steps to
ensure that the approval was not in conflict with the
Scheme;
(iii) they failed to give proper attention and to use reasonable care in the
consideration of the application;
(iv) they made a
misrepresentation to the plaintiff to the effect that the application for 200
square metres per unit was in accordance
with the Scheme, whilst that was not
the case, and the plaintiff, relying on the representation, took the steps
referred to in paragraph
5 above;
(v) they refused for a period of 10 months to allow the plaintiff to
proceed with the project, after which it was decided to rezone
the property in
terms of section 55 read with section 29 of the
6
Ordinance and to prepare an amended Scheme in order
to
provide for an erf size of 200 square metres per unit; and (vi) the said
refusal was an unreasonable exercise of the
officials'
powers in terms of the Ordinance, alternatively, the
refusal
amounted to a failure
to take all reasonable steps to prevent the
loss actually suffered
by the plaintiff.
As to damages, the plaintiff alleges that as a
result of the negligent
conduct of the officials he was unable to
proceed with the development of the
project for a period of ten
months, during which the development came to a
standstill; he was
unable to give transfer of erven already sold and could not
sell
further erven; he was obliged to continue paying interest on the money
he
had borrowed to finance the project; he was obliged to incur
legal expenses
in resisting creditors' claims arising from cash flow
problems; building costs
and the costs of supplying an electricity
network escalated; and he suffered a
loss of business reputation. In
consequence of all this the plaintiff alleges that
he suffered loss
in an amount of R552 904,73, which is itemized in some detail
under
various headings, in each of which, with the exception of the claim for
7 loss of business reputation, the calculation is made with express or
implied
reference to the period of ten months during which the development of
the
project was delayed.
It will be seen that the plaintiffs allegations concerning the duties
and
the negligence of the Council's officials are
related to three distinct aspects of
their conduct: the approval of the application, the misrepresentation
that the
subdivision would not be in conflict with the Scheme, and the refusal to
allow
the development of the project for a period of ten months. The
particulars of
claim can thus be said to embody three notional causes of action, which
can be
summarized briefly as follows:
A The Council failed in its duty to exercise reasonable care in
considering
the application and to prevent loss being caused to the plaintiff,
by
negligently failing to ensure that the subdivision would not be
in
conflict with the provisions of the Scheme.
B The Council breached its duty not to make a misrepresentation to
the
plaintiff that the subdivision would not be in conflict with the
Scheme,
by negligently making such a misrepresentation concerning the
8 minimum sizes of erven permissible.
C The Council
refused for ten months to allow the development of the
project to proceed, pending the amendment of the Scheme, thus
exercising its powers unreasonably and failing negligently to
prevent
loss to the plaintiff.
In argument before this Court it was common cause that the
allegations
referred to in A and B above fell to be
considered separately, on the footing
that the particulars of claim postulated two causes of action, each
independent
of the other. Counsel for the plaintiff suggested that the allegations in
C should
also be seen as a separate and independently averred cause of action.
That
suggestion will be considered later.
In the Council's notice of exception it is contended on a number
of
grounds that the particulars of claim do not disclose a cause of action.
It is not
necessary, however, to traverse the terms of the notice, for in this
Court counsel
for the Council reformulated the grounds of exception, condensing them
into
three, and counsel for the plaintiff declared that he was content to join
battle
on the grounds as reformulated. They are as follows:
9
(a) The law confers an immunity from claims for
negligence in respect of
the decision taken by the local
authority.
(b)
There
was, in any event, no duty of care owed to the
plaintiff.
(c) The decision complained of was a nullity in respect of which the
plaintiff should have formed his own conclusions and the mere
making of such a
decision does not imply a representation as to legal validity upon which the
plaintiff was entitled to rely.
In the Court
a
quo
MACARTHUR J upheld the exception for reasons which fall within the
purview of ground (a) above. In his judgment the learned Judge
dealt only with
the alleged cause of action reflected in A above; no mention was made of the
allegations referred to in B (or C)
above. It seems that in the Court below A
was, if not the only, at least the main bone of contention. I shall deal with it
first.
MACARTHUR J's reasoning was premised on the distinction between a
quasi-judicial and an administrative act. He found, on a consideration
of the
provisions of section 95 of the Ordinance, read with section 19, and with
section 35 of the regulations promulgated in terms
of the Ordinance, that
a
10 local authority was required to weigh up many facts in deciding
upon an
application for subdivision; that it did not have an absolute or
unfettered
discretion, but that its discretion had to be exercised
in the best interests of all
concerned, taking into account
inter
alia
the convenience and general welfare
of the area as well as considerations of efficiency and the economy;
and
accordingly that a local authority was vested with a quasi-judicial
discretion in
excerising its powers under section 95. The learned Judge went on to say
that
judicial officers were exempt from liability for loss caused by mistakes
when
they carried out their duties, and that this principle was extended to
persons
exercising quasi-judicial functions, such as local authorities. In this
regard he
quoted the observation of OGILVIE THOMPSON J in
Hoffman v
Meyer
1956(2) SA 752 (C) at 756 B that
". .. it is clear that our law recognises that a person acting in a
judicial
or quasi-judicial capacity is not liable for negligence ..."
In the result, MACARTHUR J held that in the present case the Council had
exercised a quasi-judicial discretion and that consequently
it was not liable
for negligence.
11
Counsel for the plaintiffs main line of attack
against the judgment of the Court
a quo
was that it had erred in its
finding that the Council had exercised a quasi-judicial discretion; the
Council's function, it was argued,
was purely administrative. Before this
argument can be considered, however, it is necessary to examine the validity of
using the
distinction between quasi-judicial decisions and purely administrative
decisions as a test for determining the issue of liability
for negligence in a
case such as the present.
A convenient starting-point for the discussion is the passing reference
in the judgment of the Court
a quo
to the Council's duty to act in
accordance with the rules of natural justice and the reviewability of its
decision if it failed to
do so. This is, of course, not the issue raised by the
particulars of claim and the exception to it, but the distinction between
quasi-judicial and purely administrative functions is a more familiar concept in
that context than in the present one, and it is
instructive to consider the
present status of the distinction in its customary setting. With regard to a
public authority's duty
in decisionmaking to act in accordance with the
requirements of natural justice, Le to act fairly, it was pointed out by CORBETT
CJ in
Administrator. Transvaal, and
12
Others v Traub and Others
1989(4) SA 731
(A) at 759 A-C and 762 F-H that
the distinction between
quasi-judicial and purely administrative decisions
appears to have been derived from English law, but that in modern English
administrative law it no longer seems to have any relevance.
The learned CHIEF
JUSTICE, quoting from a number of judgments given in this Court, pointed out
also (at 762 H-763 E) that our Courts
have warned against a too-ready adoption
of this classification as a solution for a particular legal problem; he observed
further
(at 763 E-I) that one of the difficulties in applying the classification
is to determine exactly what is meant by the terms "quasi-judicial"
and "purely
administrative"; and he concluded (at 763 I-J) that the quasi-judicial/purely
administrative classification was not of
any material assistance in solving the
problem before the Court in that case (extending the scope of judicial review to
include cases
of legitimate expectation).
If the distinction between quasi-judicial and purely administrative
decisions is of little use in solving problems in the context
of the
justiciability of a decision on the ground of a failure to act fairly, it is
equally of little value, in my opinion, in resolving
the issue whether
negligence in the making of the
13
decision gives rise to liability for damages in
delict. One is still faced with the
difficulty of determining the
precise meaning of the terms, a difficulty which was highlighted in the course
of the argument, when
counsel for the plaintiff, while critizing the Court
a
quo's
finding that the Council had exercised a quasi-judicial discretion,
was constrained to concede that the Council did have a discretion,
but then went
on to argue that it was purely administrative. It is apparent that this kind of
debate, based as it is on phrases incapable
of exact definition, does not
contribute to clarity in resolving the issue.
It is of more than passing interest that in the English law of today the
distinction under discussion seems to have no relevance also
in contexts
comparable to that of the present case. In recent years the English Courts have
grappled with problems arising from claims
for damages against local authorities
based on negligence in the exercise of statutory powers relating to the approval
of building
plans and the inspection of buildings under construction. The
application of the concept of a duty of care to such claims gave rise
to
differences of opinion. In
Anns and Others v Merton London Borough
Council
[1978] A C 728
(H L) at 751-2 LORD WILBERFORCE '
14
formulated a two-stage approach for determining the existence of a duty
of
care, in a passage which was quoted and commented upon in
Lillicrap.
Wassenaarand Partners v Pilkington Brothers
(SA) (Pty) Ltd
1985 (1) SA 475
(A) at 504 A-G. LORD WILBERFORCE'S approach has since fallen
into
disfavour in England; the decision in
Anns's
case was eventually
overruled in
Murphy v Brentwood District Council
[1991] UKHL 2
;
[1991] 1 AC 398
(H L). For
present
purposes, however, the point to be made about the English cases is that
in none
of the judgments that I have seen was any attempt made to categorize
the
powers and functions of the local authority as quasi-judicial or
administrative
for the purpose of determining liability. Instead, the Courts have sought
to
resolve the question of liability in each case by adopting a flexible
approach to
the application of the test of a duty of care. This approach is
exemplified in
the speech of LORD KEITH OF KINKEL in
Governors of the
Peabody
Donation Fund v Sir Lindsay Parkinson & Co Ltd and Others
[1985] AC 210
(H L ). Expressing the unanimous opinion of the House he declined to
apply
LORD WILBERFORCE'S approach and said (at 240 F-G):
"The true question in each case is whether the particular
defendant
15
owed to the particular plaintiff a duty of care having the scope which is
contended for, and whether he was in breach of that duty
with consequent loss to
the plaintiff. A relationship of proximity in Lord Atkin's sense must exist
before any duty of care can arise,
but the scope of the duty must depend on all
the circumstances of the case."
LORD KEITH went on to
quote (at 240 H-241 B) the following passage from
Home Office v Dorset Yacht
Co. Ltd.
[1970] A.C. 1004
, (HL) at 1039:
"Apart from this I would conclude that, in the situation stipulated in the
present case, it would not only be fair and reasonable
that a duty of care
should exist but that it would be contrary to the fitness of things were it not
so. I doubt whether it is necessary
to say, in cases where the court is asked
whether in a particular situation a duty existed, that the court is called upon
to make
a decision as to policy. Policy need not be invoked where reason and
good sense will at once point the way. If the test as to whether
in some
particular situation a duty of care arises may in some cases have to be whether
it is fair and reasonable that it should
so arise, the court must not shrink for
being the arbiter. As Lord Radcliffe said in his speech in
Davis Contractors
Ltd v Fareham Urban District Council
[1956] A C 696
, 728, the court is 'the
spokesman of the fair and reasonable man.'"
LORD KEITH
concluded (at 241 C):
"So in determining whether or not a duty of care of particular scope was
incumbent upon a defendant it is material to take into consideration
whether it
is just and reasonable that it should be so."
Before I leave
Peabody's
case, it is instructive, with a view to
what is to follow
later in this judgment, to see how the test of what is just and
reasonable was
16
applied to the facts of that case. The local
authority had approved plans for the
construction of a drainage
system of a certain design. The drains actually
constructed were of
a different design. The departure from the approved design
came to
the knowledge of the local authority's drainage inspector while the
installation was in progress, but he took no action to enforce compliance
with
the approved plans, although the local authority was empowered to do so
in
terms of para 15 of Part IE of Schedule 9 to the London Government Act
1963.
Two years later it was found that the drains were unsatisfactory and they
had
to be reconstructed, causing loss to the building owner. It was held that
the
local authority was not liable for the owner's loss. LORD KEITH said, at
241
F-G and 242 E-F, referring to the local authority as Lambeth and to
the
building owner as Peabody:
" The purpose for which the powers contained in paragraph 15 of Part III
of Schedule 9 have been conferred on Lambeth is not to safeguard
building
developers against economic loss resulting from their failure to comply with
approved plans. It is in my opinion to safeguard
the occupiers of houses built
in the local authority's area, and also members of the public generally, against
dangers to their health
which may arise from defective drainage installations.
The provisions are public health measures."
17
"It is sufficient to hold that Lambeth owed no duty to Peabody
to
activate their paragraph 15 powers, notwithstanding that they
might '
reasonably have foreseen that failure to do so would result in
economic
loss to Peabody, because the purpose of avoiding such loss was not
one
of the purposes for which these powers were vested in them."
In our law there is no justification, in my view, for treating
the
distinction between quasi-judicial and purely
administrative functions as the touchstone for determining a public authority's
liability
for loss caused by the negligent exercise of statutory powers. The
statement in
Hoffman v Meyer supra
that a person acting in a judicial or
quasi-judicial capacity is not liable for negligence was based primarily on
passages in the
judgment in
Matthews and Others v Young
1922 A D 492
at
508-9. To place those passages in proper perspective requires an analysis of the
judgment as a whole, an exercise which will be
rewarding because it will point
to the true criterion for determining liability in a case such as the
present.
The facts in
Matthews and Others v Young
were as follows. The
plaintiff was a member of a trade union of which the defendants were the
council. The rules of the union empowered
the council to exclude a member from
the union after giving him notice of the intention to proceed against
him
18 and of the grounds upon which his exclusion was to be
considered. The
defendants, purporting to act in terms of the rules, excluded the
plaintiff from
the union, but did so without giving him notice. As a
result of his expulsion
he was dismissed from his service with the
municipality. In previous
proceedings the plaintiff had applied for and obtained an order
re-instating him
as a member. He then brought an action for damages against the
defendants.
On appeal, it was held that the defendants were not liable in
damages.
The judgment of the Court was delivered by DE VILLIERS JA. The
reasoning in the judgment which is relevant for present purposes
concluded
with the following passage (at 509-510):
"In my opinion, therefore, in considering plaintiffs conduct and in
taking the resolution they took, the council purported to act
under the rules of
the society, and as in so doing they were performing functions analogous to
those performed by a judge, they were
acting in a quasi-judicial capacity, and
are, therefore, under our law (Groenewegen,
de Leg. Abr. Ad.
1.4.5.1;
Voet
5.1.58
in fine),
as also, I understand, under the English
law, not liable for any damage provided they acted
bona fide
and in the
honest discharge of their duties. When once it is established that the
defendants were acting in such a capacity under
the rules of the society, to
which the plaintiff as a member must be taken to have given his full assent, the
onus would be upon
him to prove that, in taking the resolution and in the
further steps they took, they did so not in pursuance of the duty devolving
upon
them as such council, but
19 were actuated by some indirect or improper
motive."
Earlier, the learned Judge had said (at
508):
"In my opinion, where, under the rules of an association, there is a duty
imposed upon a body of persons under certain circumstances
to consider the
conduct of a member and in their discretion to take appropriate action, such
persons are not liable so long as they,
in good faith, act or purport to act
under the rules of the association in the interests of the association but
through
imperitia
err in following the rules or in their proper
application. To put the duty higher is neither warranted in principle nor would
it
be in the interests of such associations themselves. I am fortified in this
view by the decision in the case of
Partridge v General Council of Medical
Education
(25 Q B 90)
, where the plaintiff's name had been removed from the
dentists' register without his being afforded an opportunity of being heard.
The
defendants were held not liable, in the absence of
mala fides,
as, it was
said, their duties were discretionary and not merely ministerial. The remarks
which in that case were made by Lord ESHER,
M.R.: 'I think the defendants were
intending, in what they did, to do what they were entitled to do' -exactly
describe the position
of the defendants in the present case. It has been pointed
out that the duty was a statutory one, but in our law, where the duty
has been
imposed by consent, it is equally binding, at all events as between members
inter se
."
It is clear from these passages that
the Court considered it to be reason
for non-suiting the plaintiff that the defendants had acted in a
quasi-judicial
capacity and that their duties had been discretionary and not merely
ministerial.
However, when regard is had to the reasoning which preceded these
passages,
20
it becomes apparent that there was another, more
fundamental ground,
underlying the reasons stated in the passages
quoted, for dismissing the
plaintiff's claim. DE VILLIERS J A
commenced this reasoning by saying at
502 that the parties were in
agreement that the plaintiff's action was founded
on tort and, on the assumption that that was so, proceeded to examine at
some
length (at 503-5) the requirements for the
actio injuriarum
and
the
actio legis
Aquiliae.
concluding as follows:
"The action is, therefore, an Aquilian action for patrimonial loss based
upon
dolus,
an intentional violation of plaintiff's legal rights, as a
member, to all the benefits of the society, directly resulting in dismissal
from
the service of the municipality."
Turning to the judgment of the Court
a quo
in that case, DE
VILLIERS J A
(at 506) pointed out that, in allowing the plaintiff's claim, it had
relied on an
American case, cited as
Brennan v United Hatters of NA.
(9 L. R.
A. (N.S.)
254). The facts in that case resembled those being considered by
DE
VILLIERS JA. The Court (per PITNEY J) had held that, as the
committee
which had expelled the plaintiff had not followed the rules of the
association
and the principles of natural justice, it must be taken to have acted
without
21
jurisdiction. DE VILLIERS JA proceeded to reason as follows (at
506-7):
"PITNEY, J., strongly relies upon what was said by Lord Justice BOWEN in
Mogul S.S. Co. v McGregor
(L.R. 23 Q B D 598
, at 613):
'Intentionally to do that which is calculated in the ordinary course of
events to damage and which does in fact damage another in
that other person's
property or trade is actionable if done without just cause or excuse.' But I
must point out, with great respect
to so eminent a judge, that there is no
onus
upon a defendant until the plaintiff has proved that a legal right
of his has been infringed. Under the
lex Aquilia
there is only an action
for
damnum injuria datum
- for pecuniary loss inflicted through a legal
injury, and the defendant is not called upon to answer the plaintiffs case
before
the plaintiff has proved both the pecuniary loss and that it directly
results from what is, in the eye of the law, an
injuria
.
The Court in
Brennan's
case
proceeded upon the assumption that he had a legal right to pursue his trade as a
hatter without any unwarranted interference
on the part of others. In other
words, it held that it was a wrongful act, an
injuria,
which rendered the
delinquents liable in damages, to interfere with another in his trade without
justification or excuse. And as
the defendants had not proceeded strictly in
accordance with the rules of the society, it was considered that they had no
jurisdiction
to expel the plaintiff, and, therefore, there was no justification
or excuse for their action. Now it may be readily confessed the
defendants had
no jurisdiction, under the circumstances, to take the action they did, but to
ignore the fact that they purported
to act as the properly constituted tribunal
under the rules of the association is to disregard a material fact in the case
for the
defendants which can hardly be considered irrelevant. A judge who
purports to try a case in which he has no jurisdiction would not
on that account
be liable.
In the absence of special legal restrictions a person is without doubt
entitled to the free exercise of his trade, profession or calling,
unless he has
bound himself to the contrary. But he cannot claim an
22
absolute right to do so without interference from another. Competition often
brings about interference in one way or another about
which rivals cannot
legitimately complain. But the competition and indeed all activity must itself
remain within lawful bounds. All
a person can, therefore, claim is the right to
exercise his calling without unlawful interference from others. Such an
interference
would constitute an
injuria
for which an action under the
lex Aquilia
lies if it has directly resulted in
loss."
It is plain from these passages that DE VILLIERS
JA was emphasizing
wrongfulness as an element of delictual liability
in our law. The defendants could not be held liable for the loss their act had
caused
the plaintiff, unless it were shown that the act had been wrongful.
Against that background, the purport of the learned Judge's ensuing
remarks
about the nature of the defendants' duties and the capacity in which they had
acted, becomes clear. He was stating the reasons
why the defendants' conduct was
considered not to have been wrongful. In my view, therefore, the fundamental
ground for rejecting
the plaintiff's claim, and hence the true
ratio
decidendi
of the judgment, was that the defendants had not been proved to
have acted wrongfully. The observations that the defendants had performed
discretionary and not merely ministerial duties and had acted in a
quasi-judicial capacity constituted steps in the
23
reasoning yielding that result, it is true, but
they cannot be elevated into
propositions of law embodying
self-contained criteria for determining liability. In the circumstances of that
case they were considered
to be decisive on the issue of the wrongfulness of the
defendants' conduct.
Non constat
that such a classification of duties or
capacity will have the same effect in all other circumstances.
In the present case, if it is assumed that the Council was negligent in
exercising its statutory functions, the question whether it
is liable in damages
to the plaintiff must depend on the answer to the question whether its conduct
was wrongful. In considering
this question the nature of the Council's functions
will certainly require close scrutiny. But in view of what has been said above,
two observations must immediately be added. The first is that the nature of the
functions is but one of the circumstances calling
for consideration in this
case; as always, to determine the issue of wrongfulness, all the circumstances
of the case fall to be considered.
The second is that, to determine the issue of
wrongfulness, there is no point in straining to categorize the functions as
either
quasi-judicial or purely administrative. In this regard I consider
particularly
24
apposite the following remarks made in
Mutual Life & Citizens'
Assurance Co
Ltd and Another v Evatt
[1971] 1 All E R 150
at 162, and quoted by RUMPFF
C J in
Administrates. Natal v Trust
Bank van Afrika Bpk
1979 (3) S A 824
(A) at 834 B:
"In our judgment it is not possible to lay down hard and fast rules as to
when a duty of care arises in this or in any other class
of case where
negligence is alleged. When in the past Judges have attempted to lay down rigid
rules or classifications or categories
they have later had to be
abandoned."
The reference in the passage just quoted to
a duty of care leads to the
next topic for discussion, which I shall introduce by considering the
opening
argument addressed to us by counsel for the plaintiff. It was based on
a
passage in the judgment of CORBETT CJ in
Simon's Town Municipality
v
Dews and Another
1993 (1) S A 191
(A) at 196 B-E. Counsel set
great store
by what was said in this passage, urging us to find that it established
that the
allegations contained in the plaintiffs particulars of claim disclosed a
perfectly
valid cause of action. The passage reads as follows:
"A further important principle is that, even where the statute does
authorise interference with the rights of others, the person or
authority vested
with the power is under a duty, when exercising the power, to
25
use due care and to take all reasonable
precautions to avoid or minimise injury to others. Failure to carry out this
duty has been
described as 'negligence', but, as pointed out by Prof J C van der
Walt in Joubert (ed)
Law of South Africa
vol 8 para 30, in this context
the word is used in a special sense; and
'(t)he presence of "negligence" in this special sense in the exercise of a
statutory power is, however, a conclusive indication that
the defendant has
exceeded the bounds of his authority and has therefore acted
wrongfully.'
See also Neethling, Potgieter and Visser
The Law of Delict
at 91-2;
Van der Merwe en Olivier
Die Onregmatige Daad in die Suid-Afrikaanse Reg
6th ed at 105-6; Boberg
The Law of Delict
vol 1 at 771-3. In my view,
these writers all correctly state that jurisprudentially the consequences of the
repository of the statutory
power having exercised it without due care and
without having taken reasonable precautions to avoid or minimise injury to
others,
are that the repository must be taken to have exceeded the limits of his
authority and accordingly to have acted unlawfully."
An examination of the context in which this passage occurs reveals
that
it can have no bearing on the facts of the present
case. The learned CHIEF
JUSTICE was dealing with a totally different
kind of situation. The appellant's
employees had allowed a fire on
the appellant's property to get out of control
and to spread to the respondents' property, where it caused damage.
The
respondents, alleging that the employees had been negligent, had sued
the
appellant for damages. The appellant had raised as a defence that it
was
26
absolved from liability by section 87 of the
Forestry Act 122 of 1984, which
provided that no person was liable
in respect of anything done in good faith in
the exercise of a power or the carrying out of a duty conferred or
imposed by
or under the Act. The appellant contended that the section created a
legal
immunity in favour of a person who in good faith exercised a power
conferred
by or under the Act (as the appellant was alleged to have done, the fire
in
question having been made for the purpose of clearing a fire belt), even
where
the person concerned was negligent in having failed to take
reasonable
precautions to eliminate or minimise the risk of injury to others. It was
this
contention that was being considered by the learned CHIEF
JUSTICE.
Immediately before the passage quoted above, he said (at 195H -
196B):
"As I see it, s 87 is reasonably clear, but it does not mean what
appellant contends that it does. It must be interpreted against
the general
background of the law relating to statutory authority as a defence to a
delictual claim. Conduct which would otherwise
give rise to delictual liability
may be justified and rendered lawful by the fact that it consists of the
exercise of a statutory
power. Whether a particular statutory enactment in fact
authorises interference with or the infringement of the rights or interests
of
another depends upon the intention of the Legislature, which is determined in
accordance with the usual canons of statutory interpretation.
Of especial
significance in this connection is whether the statutory provision is directory
or permissive
27
in character. Most of the decisions from which these general principles are
derived were referred to by Hoexter JA in the recent case
of
East London
Western Districts Farmers' Association and Others v Minister of Education and
Development Aid and Others
1989 (2) S A 63
(A)."
Then, having referred to the views of the writers as reflected in
the
passage relied on by counsel, the learned CHIEF
JUSTICE went on to remark
on the absence of specific judicial
pronouncement to that effect, and proceeded
to say this (at 196
F-G):
"I am nevertheless satisfied that the analysis is sound and that it accords
with modem distinctions in our law of delict between fault
and unlawfulness. The
principle of statutory authority renders lawful what would otherwise have been
unlawful; and if the implied
limits of the statutory authority are not observed
the repository of the power acts without authority, or in excess of his
authority,
and consequently unlawfully."
The point of
distinction between the situation dealt with in that case and
the issue in the present one is this. In that case the negligent causing
of a fire
to spread to and damage the respondents' properties would undoubtedly
have
been found to have been wrongful, but for the possibility of a defence
under
section 87 of the Forestry Act being successfully invoked.
Prima
facie
wrongfulness was manifest in the physical impact the appellant's conduct
had
28
on the corporeal property of the respondents. Similar features were
present in
all the decisions where a defence of statutory authority
was considered and
which are referred to in the case mentioned by
the CHIEF JUSTICE, the
East
London Western District
Farmers' Association
case
supra
(see also
Diepsloot
Residents'and Landowners' Association and
Anotherv Administrator. Transvaal
[1994] ZASCA 24
;
1994 (3) S A 336
(A) at 345C -
346J). In the present case there is no such
feature. The plaintiff
is suing for the recovery of pure economic loss. He is
in no
position to rely on an inference of wrongfulness flowing from
an
allegation of physical damage to property (or injury to person).
His counsel
stressed that for the purposes of deciding the exception
all the allegations in the
particulars of claim must be assumed to
be true, pointing to the allegations
pertaining to the Council's
negligence, particularly in regard to its breach of the
duty to
prevent loss being caused to the plaintiff, and argued that it was for
the
Council to put up a defence to the claim thus
prima facie
made out. But these
contentions miss the real issue raised by the
exception. To explain why, it is
necessary first to have a closer
look at the concept of a duty of care.
In the extract from the
Mutual Life & Citizens' Assurance Co
case
29
supra,
quoted above, the reference to a
duty of care was a reference to that
concept in the second sense in
which it is used in English Law, as explained
by Millner,
Negligence in Modem Law
(1967) at 26, in a passage
quoted in
Administrates, Natal v Trust Bank van Afrika Bpk supra
at 833 D-H.
The
phrase was used in this second sense, too, in the line of the English
cases
exemplified by
Peabody's
case
supra.
And it is used in the
same sense in
paragraph (b) of the grounds of the Council's exception in this case,
as
paraphrased earlier. For present purposes, with a view to counsel's
argument,
the difference between the two elements of a duty of care is perhaps more
aptly
described by
Millner
in another passage of his work, at
230:
"The duty concept in negligence operates at two levels. At one level it
is fact-based, at another it is policy-based. The fact-based
duty of care forms
part of the enquiry whether the defendant's behaviour was negligent in the
circumstances. The whole enquiry is
governed by the foreeseeability test, and
'duty of care' in this sense is a convenient but dispensable concept.
On the other hand, the policy-based or notional duty of care is an
organic part of the tort; it is basic to the development and growth
of
negligence and determines its scope, that is to say, the range of relationships
and interests protected by it. Here is a concept
entirely divorced from
foreseeability and governed by the policy of the law. 'Duty' in this sense is
logically antecedent to 'duty'
in the fact-determined sense. Until the law
acknowledges that a particular interest
30
or relationship is capable in principle of supporting a negligence claim,
enquiries as to what was reasonably foreseeable are
premature."
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
196 F, 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:
31
"In short, recognition of a duty of care is the
outcome of a value judgment, that the plaintiff's 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."
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 498
G-H).
The issue raise by paragraph (b) of the grounds of exception
is
accordingly whether, having regard to the
considerations mentioned above, the
allegations of fact in the particulars of claim, if assumed to be proved,
are
susceptible in law of sustaining a finding that the Council was under a
legal
duty to the plaintiff, by exercising care, to avoid loss being caused to
the
plaintiff. If they are not, the plaintiff will be unable at the trial to
discharge the
onus of proving that the Council's conduct was wrongful (see the extracts
from
the judgment in
Matthews and Others v Young supra
quoted earlier),
and the
32
exception would be well founded.
Against this background I
turn to the facts. The essence of the plaintiffs claim is that the Council
caused him loss by the negligent
exercise of a statutory power. The source of
the power being statutory, it is necessary to examine the legislation by which
it was
brought into being, for it is self-evident that the intention of the
legislature is an important, and may possibly be a decisive,
feature of the
circumstances material to the determination of whether or not a legal duty
existed. The legislative intention is to
be ascertained with reference to the
nature of the powers conferred, the nature of the duties involved in their
exercise, the procedures
prescribed for their exercise and for persons aggrieved
by it to obtain redress, and the objects sought to be achieved by the
legislature.
I proceed to consider the relevant provisions of the Ordinance and
the regulations made thereunder.
Section 19 of the Ordinance reads as follows:
"The general purpose of a town-planning scheme shall be the co-ordinated
and harmonious development of the area to which it relates
in such a way as will
most effectively tend to promote the health, safety, good order, amenity,
convenience and general welfare of
such area as well as efficiency and economy
in the process of such
33
development."
Section 92
provides:
"92. (1) An owner of-
(a) an erf in an approved township who wishes to subdivide
that
erf;
(b) two or more erven in an approved township who wishes
to
consolidate those erven,
may apply in writing to the local authority within whose area of
jurisdiction the township is situated and at the same time lodge
a plan setting
out the proposed subdivision or consolidation, and such an application shall be
accompanied by such fees as may be
prescribed.
(2) (a)
On the receipt of an application in terms of subsection (1)
the
local authority shall consider the application and it may
approve or
refuse it.
(b) The local authority shall without delay and in writing notify the
applicant referred to in paragraph (a) of its decision and in
writing furnish,
at the written request of such applicant and on payment of the prescribed fees,
the reasons for its decision. (c)
....
(3)
....
(4)
....
(5) A
local authority shall not exercise any power conferred by
subsection
(2), (3) or (4) if it will bring about a result which is
in conflict
with-
(a) any condition set out in the schedule contemplated
in
section 79 on which the township concerned was declared
an
approved township;
(b)
a condition of
title imposed in terms of any
law;
(c)
a provision of an
interim or approved scheme applicable
to
34 the erf or erven concerned."
Section 139 lays down the procedure for an appeal against a
local
authority's decision to the Townships Board. In
terms of subsection (1):
"An applicant or objector who is aggrieved by
-
(a) a decision of a local authority -
(i) .....
(ii) on any application in terms of
-
(aa) any provision of this
Ordinance;
(bb) any town-planning scheme,
may, within a period of 28 days from the date he
has
been notified in writing by such local authority of
the
decision, . . .
(b) ....
appeal through the Director to the Board by
lodging with the Director a notice of appeal setting out the grounds of appeal,
and he
shall at the same time provide the local authority with a copy of the
notice."
Subsection (4) requires the Board to determine a time and place for the
hearing
of the appeal and to give notice thereof to the parties concerned,
including the
local authority. In terms of subsection (5) each party and the local
authority
may state his or its case and adduce evidence in support thereof.
Subsection
(6) empowers the Board to confirm, amend or set aside the decision of
the
local authority. Subsections (7) and (8) provide for orders for the
payment of
35
expenses and costs. '
In the regulations, section 35 requires a great deal of
detailed
information to accompany an application in
terms of section 92 (1) (a) of the
Ordinance; particularly as set out in subparagraphs (i) to (xv) of
paragraph (a).
I do not propose to quote all of this, but shall merely select some
random
examples to show the general nature of what is prescribed. Thus
truncated,
section 35 reads as follows:
"An application for the subdivision of an erf in terms of section 92 (1)
(a) of the Ordinance shall be accompanied by -
(a) so many legible copies as the local authority may require of a sketch
plan of the erf concerned and the cadastral information
of such erf and each
adjoining property, drawn in black on a white background, signed by the
applicant and indicating the following:
(i) the name of the township in which the erf
to
be
subdivided is situated and the delineation of the proposed subdivided
portions accurately drawn to a scale -
(vii) the situation of each building on the erf to be subdivided and the
approximate distance between the street boundary and every
other boundary of the
erf and the nearest wall of the building nearest to such boundary as well as the
approximate distance between
the proposed subdivisional line and the nearest
wall of the building nearest to such line;
36
(xi) The approximate location of an existing conductor on the erf to be
subdivided used for telephonic or electrical purposes or any
transformer,
structure or other obstruction relating thereto as well as any tree, fire
hydrant or bus shelter on the street reserve
adjoining the street frontage of
such erf;
(xiv) any natural water course which traverses the erf to be
subdivided;
(b) a statement indicating the use and density zoning of the erf to be
subdivided in terms of the relevant approved town-planning
scheme;
(c) a statement motivating
(i) the need and
desirability of the subdivision; (ii) the layout of the purposed
subdivision;
(d) a typewritten certified copy or clear and legible photo-copy
of
the title deed under which the erf to be subdivided is
held."
In addition, section 36 of the
regulations provides that no application shall be
approved unless
the local authority is satisfied that each proposed
subdivided
portion has satisfactory vehicular access to a public
street.
The regulations make it clear that the legislature intended the
local
authority to be placed in possession of the full
facts relevant to a decision on
the desirability of the subdivision. The Court
a quo
was right in
its view that
it is the duty of the local authority to weigh up many facts and to
consider all
the circumstances. Much of the information referred to in paragraph (a)
of
37
section 35 can be said to relate to the technical
aspects of the subdivision.
Paragraph (c), however, points to the
broader aspects of policy involved, by requiring a motivation to be supplied of
the need and
the desirability of the subdivision. There can be no doubt that the
local authority is obliged, when it is considering an application,
to take into
account the general principles governing the administration of the town-planning
scheme as laid down in section 19 of
the Ordinance. Its duty is to ensure that
there shall be no deviation from the requirements of the "general purpose" of
the scheme
as circumscribed in section 19.
In the local authority's consideration of an application there arc
potentially conflicting interests at stake: those of the applicant
owner who
wishes to use his property to his own best advantage; those of neighbouring
owners in the locality who may be adversely
affected by the subdivision; and
those of the local authority itself, which is charged with the supervision of
the orderly, harmonious
and effective (economically and otherwise) development
of the area, "to promote the health, safety, good order, amenity, convenience
and general welfare of such area." In coming to a decision on the
application,
38 the local authority must weigh up the conflicting
interests involved. In doing
so, it must exercise a value judgement. Linguistically and conceptually
it can
be said that the Council is fulfilling a quasi-judicial
function and exercising a
quasi-judicial discretion.
The Ordinance does not, however, provide for any hearing to take
place
before the local authority decides on an
application. It will have only the
application and accompanying documents before it. Beyond that, it is
not
obliged to afford an applicant any opportunity to be heard or to
make
representations. Counsel for the plaintiff relied heavily on the absence
of any
provision for a hearing in support of his theme that the local
authority's
function was purely administrative. He contrasted the position under
section
92 with that under section 139, in which the legislative intent to
provide for a
hearing before the Townships Board is clearly expressed. Under section
92, he
said, the local authority need not inform the applicant of any objections
it might
have to the approval of the application, nor of any objections raised by
any
other interested parties. Section 139, by contrast, provides for a full
hearing at
which the opposing contentions of all those interested are to be put
forward and
39
adjudicated upon. The inference must be, counsel
argued, that the legislature
intended the powers conferred on a local authority under section 92 to
be i
"purely regulative" (the phrase was used by VAN DEN HEEVER JA in
Estate
Breet v Peri-Urban Areas Health Board
1955 (3) S A 523
(A) at 533
A) and
that a quasi-judicial procedure would commence only with the hearing of
an
appeal before the Townships Board. For this view of the two stages of
the
procedure counsel sought to find support in the remarks of LORD
GREENE
MR in
B Johnson & Co (Builders), Ltd v Minister of Health
[1947] 2 All
E R 395 (C A) at 398 G - 399 H, and in the judgment of MURRAY J in
South
African Broadcasting Corporation v Transvaal Townships Board and
Others
1953 (4) S A 169
(T) at 175 E-176 G.
In my view this argument does not advance the case for the
plaintiff,
because it loses sight altogether of the purpose of the enquiry upon
which we
are engaged. The enquiry into the intention of the legislature has as its
object
to determine whether a local authority owes a legal duty to an applicant
to
exercise care in exercising the powers conferred upon it by section 92 so
as to
avoid causing loss to the applicant. The existence of such a duty will
entail a
40
right in the applicant to sue for damages upon
its breach. The fundamental |
question, therefore, is this: did the legislature intend that an
applicant should
have a claim for damages in respect of loss caused by the negligence of
the
local authority? To find the answer to this question it simply does not
help to
say that section 92 does not provide for a hearing, nor does it assist to
hang
labels such as "purely administrative" and "purely regulative" around the
local
authority's powers and functions. The two cases relied on by counsel do
not
bring us any closer to the answer either, because they were concerned
with
wholly different questions.
The answer to the fundamental question posed above is to be found,
in
my opinion, in the appeal procedure laid down in section 139.
Ironically,
however, I consider the effect of that section to be exactly the opposite
of that
contended for by counsel for the plaintiff. Leaving the particular facts
of this
case aside for the moment, the usual and obvious way in which an
applicant for
subdivision can be adversely affected by the exercise of the local
authority's
powers under section 92, is by the refusal of the application. If the
application
is refused, the applicant is entitled in terms of section 139 (1) (a) to
appeal to
D
41 the Townships Board within a period of 28
days. He thus has available and at
his disposal the procedure of an appeal in terms of subsections (4) and
(5) and
the opportunity of a full hearing for the consideration of
any representations he
might wish to make. In my judgment it could
not have been in the
contemplation of the legislature that, apart from the appeal procedure,
the
refusal of the application was to be regarded as a wrong to the
applicant
entitling him to bring ah action for damages against the local
authority.
In comparable circumstances the Courts in England, applying the
approach adopted in
Peabody's
case
supra,
have treated the
existence of a
statutory right of appeal against the decision of a statutory functionary
as
negativing the existence of a common law duty of care (in the second
sense)
owed by the functionary to the person aggrieved by the decision. This is
well
illustrated by the case of
Jones v Department of Employment
[1989]
Q B 1
(C
A). The plaintiff was entitled to unemployment benefit in terms of the
Social
Security Act 1975. In terms of the regulations made under the Act the
plaintiff
was required to submit his claim to an adjudicating officer employed by
the
defendant. The officer was empowered to decide the claim. In the case of
a
42 decision adverse to the claimant the regulations provided for a
right of appeal
to a social security appeal tribunal. The plaintiff had submitted his
claim to an
adjudication officer, who had disallowed it. In an
appeal to the tribunal, the
decision had been reversed and the claim
allowed. The plaintiff then brought
an action for damages against the defendant, alleging that the
adjudicating
officer had been negligent in disallowing the claim. The Court of
Appeal
ordered the plaintiffs particulars of claim to be struck out as
disclosing no
reasonable cause of action. In the main judgment GLIDEWELL LJ,
after
quoting from the speech of LORD KEITH OF KINKEL in
Peabody's
case
supra,
said the following (at 22 B-D):
"The question thus is whether, taking all these circumstances into
account, it is just and reasonable that the adjudication officer
should be under
a duty of care at common law to the claimant to benefit. Having regard to the
non-judicial nature of the adjudication
officer's responsibilities, and in
particular to the fact that the statutory framework provides a right of appeal
which, if a point
of law arises, can eventually bring the matter to this court,
it is my view that the adjudication officer is not under any common
law duty of
care. In other words, I agree with Mr Laws that his decision is not susceptible
of challenge at common law unless it
be shown that he is guilty of misfeasance.
Indeed, in my view, it is a general principle that, if a government department
or officer,
charged with the making of decisions whether certain payments should
be made, is subject to a statutory right of
43
appeal against his decisions, he owes no duty of care in private law.
Misfeasance apart, he is only susceptible in public law to judicial
review or to
the right of appeal provided by the statute under which he makes his
decision."
In his concurring judgment SLADE LJ (at 25
C-F) gave two reasons for
considering that it would not be just and
reasonable that the alleged duty of
care should be held to exist.
The first was that
". . .the appeal procedure provided for by the Act of 1975 and the Act of
1980 itself for practical purposes provides a disappointed
claimant
with a perfectly adequate remedy for recovery
of unemployment benefit properly due to him ..."
The second reason was expressed as follows:
"... one logically inevitable consequence of holding that a common law
duty of care existed would be this. Immediately following an
arguably negligent
and erroneous decision of an adjudication officer, a claimant would have the
right to pursue an action in negligence
against the adjudication officer and/or
the department without even pursuing his statutory rights of appeal (albeit at
the risk of
having any award of damages reduced, though not necessarily
eliminated, on the grounds that he had not mitigated his damage by appealing).
In the context of this legislation, under which there are likely to be many
thousands of citizens who rightly or wrongly consider
themselves aggrieved, it
would seem to me to make no sense to hold that it is open to a disappointed
citizen to challenge the decision
in this particular manner."
Stating his agreement with both the other judgments, CAULFIELD J remarked
as follows ( at 26 A-B):
44
"... I conclude that it cannot be right in law that the isolated
adjudicating officer should have so many hundreds, possibly thousands,
of
neighbours to whom the common law says he owes a duty of care when Parliament
has provided a whole scheme of legislation to protect
the so-called neighbours
against a mistake by the adjudicating officer."
In my opinion the reasoning reflected in the above passages can
be
applied to the legislation under consideration in the
present case, in-conformity
with the criteria in our law for
determining whether or not the local authority
owes a legal duty to
an applicant for subdivision in respect of pure economic
loss. As to the intention of the legislature, the fact that it has
prescribed a
particular form of procedure by which an aggrieved applicant can obtain
relief
against the refusal of his application shows by necessary implication
that it did
not intend a negligently incorrect refusal to give rise to an action for
damages.
As to the broader considerations of policy, on the one hand an
aggrieved
applicant does not need an action for damages to protect his interests;
he has
readily at hand the appeal procedure provided within the legislative
framework.
On the other hand, considerations of convenience militate strongly
against
allowing an action for damages; the threat of such an action would
unduly
hamper the expeditious consideration and disposal of applications by the
local
45
authority in the first instance. That is not to
say that the local authority need
not exercise due care in dealing
with applications; of course it must, but the
point is that it would
be contrary to the objective criterion of reasonableness to
hold the
local authority liable for damages if it should turn out that it acted
negligently in refusing an application, when the applicant has a
convenient
remedy at hand to obtain the approval he is seeking. To allow an action
for
damages in these circumstances would, I am convinced, offend the
legal
convictions of the community. (Cf
Minister of Law and Order v
Kadir.
unreported judgment of this Court, delivered on 29 September 1994, at pp
11-
12 and 17).
In my judgment, therefore, the refusal of an application, through an
error due to negligence, is not a wrongful act giving rise to
a delictual claim
for damages.
That being so, I turn once again to the facts alleged in the plaintiff's
particulars of claim. A curious feature of them is that the
plaintiff is not
complaining about a refusal of his application by the Council. His complaint is
that the Council negligently granted
it. In effect, his case is that the
Council
46
committed a wrongful act by giving him what he
was asking for. The answer
to this somewhat startling proposition would seem to be quite simply
this: if the Council would not have been liable to the plaintiff
if it had
wrongly refused the application (as I have been at pains to show), it is
inconceivable that it could be held liable for
having incorrectly allowed it.
Nevertheless counsel for the plaintiff sought to justify the alleged cause of
action on a twofold
basis. He argued, firstly, that the plaintiff could not have
availed himself of the appeal procedure of section 139 in order to recover
the
kind of loss alleged to have been sustained by him; and, secondly, that the
Council had breached its duty to the plaintiff, arising
by virtue of section 92
(5), to ensure that the proposed subdivision was not in conflict with the
provisions of the Scheme. The argument's
first part may be accepted, but it
breaks down on the second part. Section 92 (5), it will be recalled, prohibits a
local authority
from exercising its powers under section 92 (2) if it will bring
about a result which is in conflict with a provision of a scheme
applicable to
the erf concerned. The section no doubt imposes a duty on the local authority to
ensure that the proposed subdivision
will not fall foul of the provisions of the
scheme in
47 question, but it is not a duty owed by the local
authority to the applicant for
subdivision. The object of the provision is certainly not to protect an
applicant
against economic loss. Its object is to promote public
order by ensuring that
township development takes place in accordance with the applicable
scheme,
in the interests of the inhabitants of the area as a whole and in the
furtherance
of the precepts governing the general purpose of the scheme as set out
in
section 19.
An analogous situation can once again be found in an English case.
In
Investors in Industry Commercial Properties Ltd v South Bedfordshire
District
Council
[1986] 0 B 1034 (CA) the facts were briefly as follows.
The
plaintiff, a building owner, had submitted drawings and plans of the
foundations
for a structure to be erected to a local authority, which had approved
them.
During the course of installation inspectors employed by the local
authority had
inspected and approved the foundation bases. It later transpired that
the
relevant building regulations had not been complied with. The plaintiff
sued
for damages, alleging that the local authrity had been negligent in
respect of the
statutory duties imposed on it by the Public Health Acts 1936 and
1961.
48
SLADE LJ, delivering the unanimous judgment of
the Court of Appeal, after
an extensive analysis of
Peabody's
case
supra,
said (at
1061 F/G);
". . . in deciding whether or not the alleged duly of care exists in the
present case, we are, on the authority of the
Peabody
case
[1985] A C
210
, entitled and bound to take into considertion whether it is just and
reasonable that it should exist. We feel no doubt that it is
not just and
reasonable."
The reasons given for this view include the
folowing (at 1062 C-D and F-G,
and 1063 F-G):
"The purpose for which the legislature has conferred the supervisory
powers over building operations on local authorities is to protect
the occupiers
of buildings built in the local authority's area and also members of the public
generally against dangers to health
or personal safety. It is not to safeguard
the building developer himself against economic loss incurred in the course of a
building
project, or indeed anyone else against purely economic loss."
"On the basis of the
Peabody
case
[1985] A C 210
, however, a local
authority, in exercising these supervisory powers, will normally owe no duly to
an original building owner, because
it is normally incumbent on the building
owner himself to ensure that the building is erected in accordance with the
relevant building
regulations, and it cannot have been the intention of the
legislature that, save perhaps in exceptional circumstances, a local authority
could owe a duty to a person who is in such breach."
"We are firmly of the view that the legislature, in imposing on
local
authorities for the general protection of the public the relevant
statutory
49
obligations under section 64 of the Public Health Act, cannot have
been
intending to protect a building developer such as the plaintiffs
against
damage which they themselves may suffer through their failure to
comply with the relevant building regulations - or to entitle them to
an
indemnity from their fellow ratepayers against the consequences of
any
such failure."
By like reasoning, the plaintiff in
the present case himself failed to ensure that his proposed subdivision complied
with the provisions
of the Scheme. The purpose of the supervisory powers
conferred on the Council by section 92 (5) is to promote orderly township
development
in the public interest, and not to safeguard the plaintiff against
pure economic loss flowing from the approval of a subdivision
which is in
conflict with the Scheme. The Council's approval of the defective application
was not in breach of any legal duty owed
by it to the plaintiff. It did not act
wrongfully.
In the result, the Court
a quo
was correct in upholding the
exception in so far as it related to the cause of action summarized under A
earlier in this judgment.
It remains to deal with the causes of action reflected under B and C
above. In view of what has already been said in this judgment,
they can
be
50
disposed of in a few words.
As to B,
the misstatement relied upon was stated by counsel for the plaintiff in argument
to have been implied in the Council's notification
to the plaintiff that the
application had been approved. It is thus inextricably intertwined with the
approval itself. From the finding
that the approval was not wrongful it must
necessarily follow, in my opinion, that the communication of the fact of the
approval
was not wrongful either. If there was no breach of a legal duty in the
one instance, these was none in the other. The tests are the
same, and their
application leads to the same answer. In the context of the alleged misstatement
I would just add these observations.
The plaintiff had access to the Scheme, and
it could reasonably be expected of him to consult its provisions, either
personally or
through his professional or technical advisers, when preparing the
application before its submission for approval. The plaintiff
himself did not
heed the Scheme and neglected to comply with its requirements. In these
circumstances it would not accord with the
sense of justice of the community to
hold the Council liable in damages to the plaintiff for the negligent
misstatement that the
subdivision would not be in conflict
51
with the Scheme.
As to C, I mentioned
earlier that it was suggested on the plaintiffs behalf that this was intended to
be an independent cause of action.
I doubt whether the particulars of claim arc
susceptible of such an interpretation, but it is not necessary now, in view
again of
what has already been said, to dwell on the point. Viewed
independently, the allegations summarized under C are incapable of sustaining
a
valid cause of action, for reasons corresponding to those stated in regard to A
and B. I would merely add that the Council's approval
of the application, having
been in violation of the prohibition of section 92(5) and hence beyond it
powers, was a nullity. Consequently
it could not have acted in breach of any
legal duty to the plaintiff by refusing to allow him to proceed with the
development of
the project.
In the final result, the appeal is dismissed with costs, including the
costs of two counsel.
A S BOTHA
JUDGE OF APPEAL
HEFER JA }
VIVIER JA }
CONCUR
NIENABER JA }
HOWIE JA }