Determination of constitutional nature of contractual and delictual claims - strict contractual liability of security company - vicarious liability of security company for wrongful and negligent conduct of employee Loureiro and Others v iMvula Quality Protection (Pty) Ltd 2014 3 SA 394 (SCA) : recent case law

• Date: 01 January 2014
• DOI: 10.10520/EJC166183
• Author: T.J. Scott
• Published date: 01 January 2014
• Pages: 374-392

374 2014 De Jure

Loureiro and Others v iMvula Quality Protection

(Pty) Ltd

2014 3 SA 394 (SCA)

Determination of constitutional nature of contractual and delictual claims –

strict contractual liability of security company – vicarious liability of security

company for wrongful and negligent conduct of employee

1Introduction

The case under discussion is of general interest to those interested in the

law of contract and delict, and of particular interest to practitioners in the

private security industry field. It also provides a sterling example of the

risks involved in modern litigation in South African courts: Here the

plaintiffs who had succeeded fairly easily in the High Court and

subsequently had to bear the disappointment of seeing their judgment

overturned on appeal by a majority of the Supreme Court of Appeal,

finally won the day when the Constitutional Court granted them leave to

appeal and finally upheld their appeal against the judgment of the

Supreme Court of Appeal, in effect reinstating the judgment of the High

Court.

In this case note the focus will fall on certain aspects of the law

pertaining to breach of contract as well as on the application of the

principles of the law of delict dealing with wrongfulness and negligence

in the context of causing pure economic loss. The set of facts that

confronted the court would ordinarily be interpreted as an instance of

pure economic loss, seeing that the actions of third parties (robbers)

causing the damage in casu was made possible by the preceding conduct

of one of the defendant’s employees, which conduct was therefore

indirectly causally linked to the plaintiffs’ harm.

Van der Westhuizen J (with Moseneke ACJ, Skweyija ADCJ, Cameron

J, Dambuza AJ, Froneman J, Jafta J, Madlanga J, Nkabinde J and Zondo J

Onlangse regspraak/Recent case law 375

concurring) provided an interesting introduction to the judgment,

highlighting the growing importance of the private security industry in

contemporary South Africa. He referred to the high incidence of crime

and provided startling recent statistics of serious offences such as murder

and armed robbery and then remarked:

“The South African Police Service is not always perceived to be capable of

meeting its constitutional mandate. Hence, the private security industry is a

large and powerful feature of South Africa’s crime-control terrain. While it

should and could not be a substitute for state services, it fulfils functions that

once fell within the exclusive domain of the police” (398A).

The court attributed this tendency to historical factors, pointing out

that it began developing since the late 1970s as one of the consequences

of the apartheid regime’s focus on state security and political control,

which caused a strain on the availability of members of the police to

perform their ordinary protective duties. The court continued to sketch a

scene where security officers in the private security industry nowadays

even outnumber the members of the South African Police Service (398B-

C). It is suggested that this phenomenon in particular should kindle the

interest in this judgment of anybody involved or associated within the

mechanisms – public as well as private – by means of which public safety

and security are maintained in our country.

2Facts and Judgment

The respondent, iMvula (defendant in the South Gauteng High Court

and appellant in the Supreme Court of Appeal), is a private security

company who was contracted to provide an armed guarding service for

the protection of the home of the appellants, Mr and Mrs Loureiro and

their two minor sons (plaintiffs in the South Gauteng High Court and

respondents in the Supreme Court of Appeal), on a 24-hour basis seven

days a week. In addition, Mr Loureiro had an extensive security system

installed at the property (electric fences, perimeter beams, multiple

alarm systems, a guard house with bulletproof windows, an intercom

system and closed-circuit television). Access to the property could be

gained through two entrances, namely an armoured pedestrian gate and

a driveway gate. Both gates could be observed from the guard house.

In terms of their agreement iMvula initially undertook, inter alia, to

take all reasonable steps to prevent persons gaining unauthorised access

and/or entry to the premises, to take all reasonable steps to protect the

appellants and their property and to take all reasonable steps to ensure

that no persons gained unlawful access to the premises. (These terms

were not put in writing and their content was reflected in clauses 6.5.1 –

6.5.2 and 6.5 7 of Mr Loureiro’s heads of argument presented to the High

Court.) As a result of a lapse of security due to one of the guard’s allowing

someone to enter the premises through the main gate without obtaining

Mr Loureiro’s prior approval, the latter had the intercom system partially

disabled to prevent the guards from opening and closing the main gate.

This arrangement unfortunately affected the movement of the armed