First National Bank of South Africa Ltd v Duvenhage
Jurisdiction | South Africa |
Judge | Harms JA, Cameron JA, Navsa JA, Brand JA and Nugent JA |
Judgment Date | 30 March 2006 |
Citation | 2006 (5) SA 319 (SCA) |
Docket Number | 188/05 |
Hearing Date | 17 March 2006 |
Counsel | J A Ploos van Amstel SC for the appellant. A J Dickson SC for the respondent. |
Court | Supreme Court of Appeal |
Nugent JA:
[1] Of the three elements that combine to constitute a delict founded on negligence - a legal duty in the circumstances to conform with the standard of the reasonable person, [1] conduct that falls short of that F standard, [2] and loss consequent upon that conduct - the last often receives the least attention. Yet it is as essential as the others, for without it there is no delictual liability. Indeed, in a recent illuminating note J C Knobel suggests, on doctrinal grounds, that loss, and its causal connection, might even be the proper starting point for the enquiry. [3] G
[2] But whatever sequence doctrinal logic dictates, [4] the human mind is
Nugent JA
sufficiently flexible to be capable of enquiring into each element separately, in A any order, with appropriate assumptions being made in relation to the others, and that is often done in practice to avoid prolonging litigation, [5] for though the elements are naturally interrelated, each involves a distinct enquiry. The first element (in the sequence I have described) is directed to whether, in the circumstances, the law should recognise an action for the recovery of loss caused negligently. That is a question of legal policy in B relation to which, in the oft-quoted words of Fleming The Law of Torts, [6] 'the hand of history, our ideals of morals and justice, the convenience of administering the rule and our social ideas as to where the loss should fall', interplay, and is often capable of being disposed of on exception. [7] The second is directed to whether the defendant's conduct conforms C with the standard expected of the reasonable person in the circumstances, [8] which (and this is often overlooked) might not require the defendant to have taken any steps at all. [9] That question is quite capable of being asked on the assumption that the defendant was legally bound to conform with that standard. And the third is directed to whether there D were causally connected consequences, which is a factual enquiry initially (though the outcome will sometimes need to be tempered so as to contain liability within reasonable bounds) [10] that is also capable of being asked on the assumption that the conduct that is complained of was both wrongful and negligent. E
[3] The present appeal demonstrates why, in practice, it is useful at times to consider whether the loss for which damages are claimed is causally connected to the allegedly unlawful conduct before addressing the more abstract normative questions. It concerns a farming venture that was embarked upon by Mrs Duvenhage and her husband, which they intended conducting through the medium of a close corporation in F which they had the sole interest. (It is not necessary, for present purposes, to determine which of those parties was properly vested with the claim.)
[4] The Duvenhages hired a farm in the KwaZulu-Natal midlands, G intending to cultivate cash crops. They soon discovered, in about the middle of 1996, that two permits had been issued in terms of s 7(2) of the Forest Act 122 of 1984 for the afforestation of 288 hectares of the farm. [11] After making enquiries, they also established that SAPPI (a H
Nugent JA
company with timber interests) would be willing to provide financial assistance - free seedlings A and a loan of up to R1 200 per hectare - to establish plantations on the farm.
[5] The Duvenhages decided to embark upon that venture but time was against them. The two permits (one permitting the afforestation of 200 hectares and the other 88 hectares) were due to expire on 15 May 1997 and 28 August 1997, respectively, and enquiries they made B of the forestry department revealed that it was unlikely that the periods would be extended. But planting is possible only during the summer rainfall months, commencing in about September or October and ending in February. There was no prospect of preparing the land and completing the planting before the season ended in February 1997. But C what was required, at least, as the Duvenhages understood the terms of the permits, was that the land should be prepared before the permits expired, whereupon planting would then be permissible during the next season. D
[6] The owner of the farm was willing to extend the period of the lease for the period required for the timber to mature. The Duvenhages commenced immediately to prepare the land so as to complete the preparation before the permits expired, financing the work with money advanced to Mrs Duvenhage on overdraft by the appellant bank. In the course of preparing the land, they also planted a relatively small E number of seedlings that they obtained from SAPPI on credit.
[7] In about November 1996, the owner of the farm offered to sell it to the Duvenhages on favourable terms. At that time, the Land Bank held a mortgage bond over the farm as security for a loan that had been advanced to the owner. Mr Duvenhage enquired of the Land Bank F whether it would be willing to transfer the loan, which would enable the Duvenhages to acquire the farm, but the Land Bank was unwilling to do so. The Land Bank suggested instead that the...
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