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[2015] ZAWCHC 35
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Really Useful Investments NO 219 (Pty) Ltd v City of Cape Town and Others (8102/2014) [2015] ZAWCHC 35 (27 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
Case
No: 8102/2014
DATE:
27 MARCH 2015
In
the matter between:
REALLY
USEFUL INVESTMENTS NO 219
(PTY)
LTD
....................................................................................................................................
Plaintiff
And
CITY
OF CAPE
TOWN
.................................................................................................
First
Defendant
MINISTER
OF WATER AND ENVIRONMENTAL
AFFAIRS
......................................................................................................................
Second
Defendant
MINISTER
OF LOCAL GOVERNMENT,
ENVIRONMENTAL
AFFAIRS AND DEVELOPMENT
PLANNING,
WESTERN
CAPE
..................................................................................
Third
Defendant
Date
of hearing: 4 March 2015
Date
of judgment: 27 March 2015
Judgment
SAVAGE
J:
Introduction
[1] The first
defendant, the City of Cape Town (‘the City’), raised an
exception to the plaintiff’s particulars
of claim on the basis
that no cause of action had been disclosed. A plea on similar grounds
raised by the second and third defendants
was separated for
determination under rule 33(4). Both the exception and plea are now
before this Court for determination.
[2] The plaintiff,
Really Useful Investments No 219 (Pty) Ltd, instituted action during
May 2014 against the City, the Minister
of Water and Environmental
Affairs, as second defendant and the MEC of Local Government,
Environmental Affairs and Development
Planning (Western Cape), as
third defendant, each in the alternative, for payment of compensation
under s 34 of the Environment
Conservation Act 73 of 1989 (‘the
ECA’) in an amount of R16 750 846 plus VAT, alternatively R2
818 422 plus VAT, and
ancillary relief.
[3] The plaintiff is
the owner of 39 immovable properties in a security estate in Hout
Bay, Cape Town known as the Hout Bay Beach
Club, situated west of the
Disa River and between Princess Street and the seashore. Development
plans were approved by the City’s
predecessors-in-law and the
plaintiff commenced developing the properties until receipt of a
directive dated 10 May 2011 made in
terms of s 31A(1) and (2) of the
ECA (‘the directive’). This directive was designed to
protect a wetland that covered
part of the properties and placed
limitations on the purposes for which the plaintiff may use and/or on
activities which may be
undertaken on the properties. As a
consequence, the plaintiff claims to have suffered actual loss in the
form of the diminution
in the market value of the properties which it
seeks to recover under s 34 of the ECA from the City, alternatively
the second defendant,
further alternatively the third defendant. In
the further alternative, the plaintiff claims that if it fails to
provide for a claim
for limitations imposed by a local authority or
government institution, s 34 is unconstitutional and invalid and must
be declared
so in terms of s 176(1)(a) of the Constitution.
Applicable
statutory provisions
[4] Section 31A of
the ECA provides that:
(1)
If, in the opinion of the Minister or the competent authority,
local authority or government institution concerned, any person
performs
any activity or fails to perform any activity as a result of
which the environment is or may be seriously damaged, endangered or
detrimentally affected, the Minister, competent authority, local
authority or government institution, as the case may be, may in
writing direct such person –
(a)
to cease such activity; or
(b)
to take such steps as the Minister, competent authority, local
authority or government institution, as the case may be, may deem
fit,
within
the period specified in the direction, with a view to eliminating,
reducing or preventing the damage, danger or detrimental
effect.
(2)
The Minister or the competent authority, local authority or
government institution concerned may direct the person referred to in
subsection (1) to perform any activity or function at the expense of
such person with a view to rehabilitating any damage caused
to the
environment as a result of the activity or failure referred to in
subsection (1), to the satisfaction of the Minister, competent
authority, local authority or government institution, as the case may
be…
’
[5] Section 34 of
the ECA creates a right to recover compensation in certain
circumstances:
‘
34.
Compensation for loss
(1)
If in terms of the provisions of this Act limitations are placed on
the purposes for which land may be used or on activities
which may be
undertaken on the land, the owner of, and the holder of a real right
in, such land shall have a right to recover compensation
from the
Minister or competent authority concerned in respect of actual loss
suffered by him consequent upon the application of
such limitations.
(2)
The amount so recoverable shall be determined by agreement entered
into between such owner or holder of the real right and the
Minister
or competent authority, as the case may be, with the concurrence of
the Minister of State Expenditure.
(3)
In the absence of such agreement the amount so to be paid shall be
determined by a court referred to in section 14 of the Expropriation
Act, 1975 (Act 63 of 1975), and the provisions of that section and
section 15 of that Act shall mutatis mutandis apply in determining
such amount.’
[6] Section 37 of
the ECA provides further that:
‘
No person,
including the State, shall be liable in respect of anything done in
good faith in the exercise of a power or the performance
of a duty
conferred or imposed in terms of this Act.’
[7] In terms of s 24
of the Constitution:
‘
Everyone
has the right –
…
(b)
to have the environment protected, for the benefit of present and
future generations, through reasonable legislative and other
measures
that –
(i)
prevent pollution an ecological degradation;
(ii)
promote conservation; and
(iii)
secure ecologically sustainable development and use of natural
resources while promoting justifiable economic and social
development
.’
[8] The National
Environmental Management Act 107 of 1998 (as amended) (‘NEMA’)
falls within the ambit of the legislation
envisaged by the
‘
reasonable legislative
’ measures referred to in s
24 of the Constitution. S 49 of NEMA provides that:
‘
Neither
the State nor any other person is liable for any damage or loss
caused by-
(a)
the exercise of any power or the performance of any duty under
this Act or any specific environmental management Act; or
(b)
the failure to exercise any power, or perform any duty under
this Act or any specific environmental management Act,
unless
the exercise of or failure to exercise the power, or performance of
failure to perform the duty was unlawful, negligent or
in bad faith.’
[9]
As of
1 May 2005, s 49 of NEMA was amended to extend its application to any
‘
specific
environmental management Act
’
defined in s1(1) of NEMA to include the ECA.
[1]
Evaluation
[10] Section 34(1)
provides a right to recover compensation from the ‘
Minister
or competent authority
’ for actual loss suffered for
limitations ‘
placed on the purposes for which land may be
used or on activities which may be undertaken on the land’.
This is a statutory entitlement to recover compensation where actual
loss has been caused as a result of a limitation placed on
property
rights and is distinct from a delictual claim for damages. As a
statutory right to recover compensation, s 34(1) operates
similarly
to a compensation provision in circumstances of an expropriation,
with the right arising in the circumstances contemplated
in the
provision and not limited to instances in which wrongfulness,
negligence or unlawfulness exist.
[11]
The
fact that s 34 and s 37 of the ECA came into force contemporaneously
and were not amended when s 31A was inserted into the ECA,
[2]
or when the later amendments to the ECA and NEMA were promulgated,
evidences a legislative intent to keep the statutory right embodied
in s 34 alive. It does not follow that the right to compensation
contained in s 34 is limited by s 37 of the ECA, or by s 49 of
NEMA,
given the distinct nature and purpose of the provisions.
[12]
If s
49 of NEMA applies as the operative limitation of liability provision
to the ECA (which the plaintiff for current purposes
accepts and is a
conclusion that the maxim
lex
posterior priori derogate
[3]
supports), it is material
that s 49 does not limit other statutory rights to compensation such
as that provided in s 36 of NEMA
in cases of expropriation. This is
clearly so given the imperative contained in s 25(2) of the
Constitution that compensation be
paid where there is an
expropriation and there can be no doubt that compensation under s 36
is therefore not limited to circumstances
in which wrongfulness,
unlawfulness or bad faith exists. Furthermore, the reference in
s 34(3) of the ECA to the court referred
to in s 14 of the
Expropriation Act 63 of 1975 determining the amount of compensation
payable in the absence of an agreement between
the parties provides
further support for the conclusion that the s 34 right is intended to
be dealt with in a similar manner to
the statutory right to
compensation for expropriation.
[13]
Section
34 contemplates the lawful exercise of public power. Given that the
exercise of public power is only legitimate where it
is lawful,
[4]
a right to compensation under s 34 could not have been intended to
arise only when public power has been exercised unlawfully in
that
the exercise of the power would in such cases be illegitimate by
virtue of its unlawfulness. The same applies to negligence
given that
the functionary exercising statutory power is under a duty to use due
care and to take all reasonable precautions to
avoid or minimise
injury to others, and the failure to do so renders the conduct of the
repository of the statutory power unlawful.
[5]
[14]
In
Arun
Property Development (Pty) Ltd v City of Cape Town
[6]
Moseneke DCJ distinguished between a statutory right to compensation
and a delictual claim, stating that:
‘…
a party that has
a statutory right to compensation is in a very different position to
a plaintiff trying to establish a novel delictual
claim. That party
is entitled to rely on this right, which is statutorily entrenched,
regardless of any alternative remedies available.
The right to
compensation… does not flow from the delictual claim for
damages
.’
[15]
In
Johannesburg
Municipality v African Realty Trust Ltd
[7]
Innes CJ stated that:
‘
Whenever
the exercise of statutory powers is alleged to have resulted in
injury to another the enquiry must always be - what was
the intention
of the Legislature? Did it intend that immunity from consequences
should accompany the grant of authority, or did
it intend that the
authority should either not be exercised at all to the legal
prejudice of others, or that if so exercised there
should be an
accompanying liability to make good any consequential damage?...
Certain general considerations may be useful, but
are not necessarily
decisive. For instance, the Legislature is not presumed to intend an
interference with private rights where
no provision is made for
compensation….’
[16]
McNaughton
LJ in the Privy Council decision of
Mayor
of Freemantle v Annois
[8]
said:
‘
If
persons in the position of the appellants, acting in the execution of
a public trust, and for the public benefit, do an act which
they are
authorised by law to do, and to do it in a proper manner, the
individual injured cannot maintain an action. He is without
a remedy,
unless a remedy is provided by the statute
.’
[17] A statutory
right to compensation under s 34 is precisely such a remedy.
[18]
Numerous
examples of provisions limiting liability exist in our law,
[9]
the purpose of which is to provide a defence in circumstances where a
delictual claim would ordinarily be available to a claimant
who has
suffered damages or loss as a result of unlawful conduct. Such a
defence is specifically directed at the wrongfulness element
of
delictual liability.
[10]
It is
not a defence to a statutory entitlement to recover compensation such
as provided in s 34. In
Minister
of Constitutional Development v X
[11]
Fourie AJA stated that:
‘
To
my way of thinking s 42 of the NPA Act seeks to introduce a ground of
justification for conduct which is prima facie wrongful.
Therefore,
wrongful conduct that would otherwise give rise to delictual
liability may be justified and rendered lawful by virtue
of the
statutory immunity conferred in terms of s 42 of the NPA Act. It is a
defence specifically directed at the wrongfulness
element of
delictual liability. It is trite that in the case of a defence of
this nature the onus rests on the defendant…
to plead and
prove the defence
…’.
[19]
Corbett
CJ in
Simon’s
Town Municipality v Dews
[12]
in
considering the meaning and effect of s 87 of the now repealed Forest
Act 122 of 1984,
[13]
which
limited liability where a power had been exercised or a duty
performed in good faith, stated that such a provision should
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
.’
[14]
[20]
That
the environment is held in public trust for beneficial use in the
public interest and that it must be protected is embodied
in s 24 of
the Constitution and the provisions of NEMA. However, legislative
prescripts which protect the environment from unlawful
activity and
hold responsible those who harm it cannot be construed to limit or
restrict other statutory entitlements, such as
provided in s 34,
unless this is apparent from the language of the statute read in
context.
[21]
In
interpreting a statute, courts must have regard to the text, context
and purpose of the legislation, cautious of an interpretation
that
‘…
leads
to impractical, unbusinesslike or oppressive consequences or that
will stultify the broader operation of the legislation or
contract
under consideration’.
[15]
Furthermore:
‘…
Judges
must be alert to, and guard against, the temptation to substitute
what they regard as reasonable, sensible or businesslike
for the
words actually used. To do so in regard to a statute or statutory
instrument is to cross the divide between interpretation
and
legislation...The ‘inevitable point of departure is the
language of the provision itself’, read in context and
having
regard to the purpose of the provision and the background to the
preparation and production of the document’.
[16]
[22]
A
statutory right to recover compensation is clearly provided in s 34
and is one neither limited nor restricted by s 37 or s 49
which are
provisions whose purpose it is to provide a defence to a claim in
delict. To find differently would be to strain at an
interpretation
that does not accord with the language of the provision read in
context and the statute as a whole. It follows that
the plaintiff’s
particulars of claim as it stands discloses a cause of action and
does not lack averments which are necessary
to sustain an action
within the contemplation of rule 23(1).
[17]
[23] For these
reasons both the exception raised by the first defendant and the
defence put up in paragraph 15.3 of second and third
defendants’
plea, separated under rule 33(4), must fail. There is no reason as to
why costs should not follow the result,
which costs are to include
the costs of two counsel.
Order
[24] In the result,
the following order is made:
1. The first
defendant’s exception to the plaintiff’s particulars of
claim is dismissed with costs.
2. Paragraph 15.3 of
the second and third defendants’ pleas to the plaintiff’s
particulars of claim is struck out with
costs.
3.
The defendants are to pay the plaintiff’s costs related to the
hearing of the matter, including the costs of two counsel,
which
costs are to be paid jointly and severally, the one paying the other
to be absolved.
K
M SAVAGE
Judge
of the High Court
Appearances
:
Plaintiff: A M
Breitenbach SC with A E Erasmus and A Christians
Instructed by
Du Plessis Hofmeyr Malan Inc.
First
Defendant: G Budlender SC with Ms S van Zyl
Instructed by
Smith Ndlovu Summers Attorneys
Second
Defendant: P Farlam, M Bishop and N Pakade
Instructed
are by the State Attorney
[1]
National Environmental Management Amendment Act 46 of 2003
which
came into force on 1 May 2005
[2]
By s 19 of the Environmental Conservation Amendment Act 79 of 1992
[3]
New
Modderdam Gold Mining Co v Transvaal Provincial Administration
1919 AD 367
at 397;
Government
of the Republic of South Africa and another v Government of KwaZulu
and another
1983 (1) SA 164
(A) at 201 F-G. The maxim
generalia
specialibus non derogant
may
also find application.
[4]
Fedsure
Life Assurance v Greater Johannesburg Transitional Metropolitan
Council
[1998] ZACC 17
;
1999
(1) SA 374
(CC) at para 56
[5]
Simon’s
Town Municipality v Dews (supra)
at 196B-E;
Minister
of Justice and Constitutional Development v X (supra)
at
para 47
[6]
2015 (3) BCLR 243
(CC) at para 69
[7]
1927 AD 163
at 171-2
[8]
1902 AC 213
referred to in
African
Realty
at 176
[9]
Such as
s 42
of the
National Prosecuting Authority Act 32 of 1998
which provides that: ‘
No
person
shall be liable in respect of anything done in good faith under this
Act
’
[10]
Minister
of Justice and Constitutional Development v X (supra)
at para 46
[11]
2015 (1) SA 25
(SCA) at para 41
[12]
1993 (1) SA 191 (A)
[13]
Section 87 provided that: ‘
No
person, including the State, shall be 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 under this Act’
[14]
At 195I-J;
Minister
of Constitutional Development v X
2015 (1) SA 25
(SCA) at para 46
[15]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at para 26
[16]
At para 18
[17]
Minister
of Safety and Security v Hamilton
2001 (3) SA 50
(SCA) at 52G-H;
Burger
v Rand Water Board
2007 (1) SA 30
(SCA) at 32 D-E;
First
National Bank v Perry NO
[2001] 3 All SA 331
(A)