Faircape Property Developers (Pty) Ltd v Premier, Western Cape

• Jurisdiction: South Africa
• Judge: Davis J
• Judgment Date: 29 September 1999
• Citation: 2000 (2) SA 54 (C)
• Docket Number: 16017/95
• Hearing Date: 12 August 1999
• Counsel: S P Rosenberg for the plaintiff. J van der Westhuizen SC (with him A de V la Grange) for the defendant.
• Court: Cape Provincial Division

Davis J:

Introduction

On 19 May 1995 the then owner of erf 1483, Vredehoek, Mr E Diekmann, submitted an application for the removal of certain title C deed conditions burdening the property which, inter alia, included that 'the erf not be subdivided; that no more than one dwelling together with the necessary outbuildings and appurtenances be erected on the erf and that no more than half the area of the erf to be built upon'. In terms of the relevant provisions of the Removal of Restrictions Act 84 of 1967 (the Act) the stated purpose of the D application (the first application) was to enable townhouses to be erected on the property.

On 1 November 1995 plaintiff offered to purchase the property, which offer was duly accepted by Diekmann on 21 November 1995 subject, inter alia, to the first application being approved. On 15 November 1995 the Urban Planning Committee of the City of Cape Town considered the application and on 20 November E 1995 recommended to the relevant directorate of the Provincial Administration of the Province of the Western Cape (Provincial Administration) that the first application be approved. During February 1996, at the request of the Provincial Administration certain plans F which had been prepared on behalf of plaintiff were submitted to the Provincial Administration. These plans were for the construction of a block of flats which plaintiff intended to erect on the property. On 21 March 1996 the Minister of Agriculture, Planning and Tourism of the Western Cape (the Minister) approved this first application. Some three months later plaintiff took transfer of the property and G commenced the necessary preliminary work on the property for the construction of the flats.

On 11 October 1996 plaintiff was interdicted from proceeding with the construction of the flats pending a final determination of an application to review and set aside the Minister's decision to approve this first application. See Beck and Others v Premier, Western H Cape, and Others 1998 (3) SA 487 (C), in which Rose Innes J ordered on 12 December 1996 that the decision of the Minister to approve the first application be set aside.

Plaintiff reapplied for the removal of these title deed restrictions. The application met with success on 12 May 1998 enabling construction of the flats to resume. I

Plaintiff now claims the sum of R1 054 407 which it alleges was the loss suffered by it as a consequence of the Minister's having breached the duty of care to plaintiff to apply his mind properly to the first application. In short plaintiff submits that the Minister breached this duty of care J

Davis J

when considering the first application in that he failed A to apply his mind properly to the application and to arrive at his decision with due care and without negligence.

Defendant has excepted to the plaintiff's particulars of claim on the following grounds: 'The claim against the defendant is alleged (in paras 14 and 15 of the particulars of claim) to be based on a breach of duty of care which the Minister owed to the plaintiff. It is alleged that this duty entailed that the Minister had to apply his mind properly to the first application and to arrive at his decision by the exercise of due care and without negligence (the duty). The aforesaid duty is said to arise due to the fact that:

5.1

the administration of the Act was assigned by the President, in terms of the Constitution of the Republic of South Africa Act 200 of 1993, to competent authorities within the jurisdiction of the government of the provinces mentioned in s 124(1) of the Constitution, who had been designated by the Premier of the provinces concerned; and D

5.2

the defendant had assigned the administration of the Act, within the province of the Western Cape, to the Minister.

To the extent that the plaintiff seeks to rely on an alleged duty of care, the particulars of claim do not disclose a cause of action, alternatively purport to disclose an action which is bad in law: E

6.1

the law confers an indemnity from claims for negligence in respect of the decision taken by the Minister, acting pursuant to the powers conferred upon him in terms of s 2(1) of the Act; and

6.2.1

there was no duty of care owed by the Minister to the owner of the property in question, nor the plaintiff, who in any event F allegedly possessed no more than a contingent right in the property at the time of the Minister considering the first application;

6.2.2

the Minister, acting pursuant to the powers conferred upon him by the provisions of s 2(1) of the Act, as he did in this case, would not have been liable to the plaintiff if he had wrongly refused G the first application and in the premises cannot in law be liable for having incorrectly allowed it;

6.2.3

s 2(1)(a) of the Act imposes a duty on the Minister to ensure that restrictions or obligations which are binding upon owners of land by virtue of restrictive conditions or servitudes registered against the title deeds of their land be H preserved or removed in the interest of the area where the property is situated or in the interest of the public in general;

6.2.4

s 2(1)(a) of the Act:

(a)

does not create a duty owed by the Minister to an applicant for removal of a restriction; I

(b)

does not create a duty owed by the Minister to the owner of the property concerned, nor any person possessing a contingent right therein (such as the plaintiff);

6.2.5

the object of the Act is not to protect the owner of the property and/or the plaintiff against economic loss. The object of the Act J

Davis J

is the promotion of public order by ensuring that restrictive A conditions registered against title deeds of the land in question are removed (or retained) in the interest of the area where the land is situated and in the interest of the public in general; and/or

6.2.6

the legislator did not intend that an applicant for the removal of a restriction should have a claim for damages for loss caused by the negligence of the Minister.' B

In essence the exception raises the question of liability for the negligent exercise of statutory powers and, further, whether the law confers an immunity from claims of negligence in respect of decisions taken by a competent authority pursuant to the provisions of the Act. C

The legal basis for the exception

In Lewis v Oneanate (Pty) Ltd and Another 1992 (4) SA 811 (A) at 817F Nicholas AJA stated:

'Since these are proceedings on exception, it must be borne in mind that the appellant has the duty as excipient to persuade the Court D that upon every interpretation which the particulars of claim . . . can reasonably bear, no cause of action is disclosed.'

Mr Van der Westhuizen, who appeared together with Mr La Grange on behalf of the defendants, relied upon the decision of the Appellate Division in Knop v Johannesburg City Council 1995 (2) SA 1 (A) to make two essential submissions in support of the general argument that on the basis of our law no cause E of action had been disclosed. The first was based upon a passage of the judgment of Botha JA in Knop's case supra at 33G, namely:

'In effect, his case is that the Council committed a wrongful act by giving him what he was asking for. The answer to this somewhat F 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 have been held liable for having incorrectly allowed it.'

In short, if there was no cause of action in the case of a negligent dismissal of an application, there was certainly no such cause of G action in a case where there had been a negligent approval of an application.

Secondly Mr Van der Westhuizen submitted that the Act's purpose was to promote orderly township development in the public interest and had nothing to do with safeguarding an individual such as the plaintiff against pure economic loss flowing from an approval of a subdivision which was in conflict with the Act. H

Given the similarity between the facts of the present case and those in Knop (supra), it is necessary to canvass Knop's case in some detail. Plaintiff had applied to the defendant for a subdivision of an erf in terms of clause 36 of the Johannesburg Town Planning Scheme. The application was made by plaintiff for the purposes of developing a cluster-housing complex and I was approved by defendant on 5 December 1998. As a result of being notified of this approval plaintiff took certain steps with a view to developing the project, inter alia...