Fourway Haulage SA (Pty) Ltd v SA National Roads Agency Ltd

• Jurisdiction: South Africa
• Citation: 2009 (2) SA 150 (SCA)

Fourway Haulage SA (Pty) Ltd v SA National Roads Agency Ltd
2009 (2) SA 150 (SCA)

2009 (2) SA p150

Citation	2009 (2) SA 150 (SCA)
Case No	653/07
Court	Supreme Court of Appeal
Judge	Scott JA, Farlam JA, Brand JA, Lewis JA and Jafta JA
Heard	November 5, 2008
Judgment	November 26, 2008
Counsel	JH Dreyer SC (with JA du Plessis) for the appellant.; AC Ferreira SC (with I Ellis) for the respondent.

Flynote : Sleutelwoorde G

H Delict — Pure economic loss — Wrongfulness — Causation of pure economic loss not prima facie wrongful — Wrongfulness function of public and legal policy considerations.

Delict — Pure economic loss — Policy considerations determining liability examined I and explained.

Headnote : Kopnota

Following a motor accident a toll road had to be closed for 24 hours to facilitate the clean-up of spilt asbestos, which caused the toll company to lose revenue for the duration of the clean-up. The toll company instituted action in the High Court in which it claimed its loss in toll revenue from the haulier J which operated the asbestos truck. After a separation of issues, the High

2009 (2) SA p151

Court determined that the haulier was liable in damages to the toll A company for its loss. In arriving at that conclusion, the court found: (i) that the loss was not a pure economic loss and (ii) that the question of a legal duty therefore did not arise; and (iii) that the loss was not too remote for it to be considered to have been caused (legally) by the negligent driving of the haulier's employee. The haulier appealed against those findings, and the decision of the High Court, to the Supreme Court of Appeal. B

Held, as to (i), that 'pure economic loss' connoted loss that did not arise directly from damage to the plaintiff's person or property but which arose, rather, in consequence of the negligent act itself, such as loss of profit, additional expenses or diminution in the value of property. (Paragraph [10] at 156A - B.)

Held, further, that, thus understood, the respondent's claim fell squarely within C the ambit of 'pure economic loss'. (Paragraph [11] at 156D.)

Held, further, as to (ii), that the principles applicable to the element of wrongfulness were trite. They proceeded from the premise that negligent conduct which manifested itself in the form of a positive act causing physical damage to the property or person of another was prima facie wrongful. By contrast, negligent causation of pure economic loss was not D regarded as prima facie wrongful. Its wrongfulness depended on the existence of a legal duty. The imposition of that legal duty was a matter for judicial determination involving criteria of public or legal policy consistent with constitutional norms. In the result, conduct causing pure economic loss would only be regarded as wrongful and therefore actionable if public or legal policy considerations required that such conduct, if negligent, E should attract legal liability for the resulting damages. (Paragraph [12] at 156F - I.)

Held, further, that, in a case like the present where the claim for pure economic loss fell outside the ambit of any recognised category of liability, the first step was to identify the considerations of policy that were of relevance. (Paragraph [22] at 161C - D.) F

Held, that the first policy consideration was the avoidance of imposing liability in an indeterminate amount for an indeterminate time to an indeterminate class. (Paragraph [23] at 161F/G.)

Held, further, that, following this consideration was the question whether the imposition of liability would bring in its train a multiplicity of actions. The court would more readily impose liability where, as in the present case, the G loss claimed was suffered by a single plaintiff and was finite in extent, than where it would open the door to a multiplicity of actions. (Paragraph [24] at 161H.)

Held, further, that also a consideration was whether the plaintiff had been in a position to protect himself against the risk by contractual means. The court was more likely to impose liability where the plaintiff was 'vulnerable to risk' H because he was unable to protect himself against the risk of the particular loss by other means. In the present case, the respondent was 'vulnerable' to the risk of the loss that eventuated because it could not readily protect itself against that risk by concluding a contract with every user of the toll road. (Paragraph [25] at 162A - D.)

Held, further, that another policy consideration was whether imposition of I liability would place an additional, unwarranted burden on the defendant. In the present case, where the appellant's driver was already under an obligation towards other users of the road to drive with reasonable care, holding him - and his employer - liable for economic loss resulting from his negligent driving would not foist any additional burden upon him at all. (Paragraph [26] at 162E - H.) J

2009 (2) SA p152

A Held, further, that on each of those policy considerations the appellant ought to be held liable. In other words, the negligence of the appellant's employee was wrongful. (Paragraphs [28] - [29] at 163A - G.)

Held, further, as to (iii), that the test for determining remoteness of damage (under the rubric of legal causation) was a flexible one. That meant that the existing criteria of foreseeability, directness, et cetera, should not be applied B dogmatically, but in a flexible manner so as to avoid a result which was so unfair or unjust that it was regarded as untenable. (Paragraphs [33] and [34] at 164E - H and 165B.)

Held, further, that each of the various criteria led to the conclusion that the loss suffered by the respondent was not too remote. Furthermore, the conclusion that the appellant should be held liable was not untenable. (Paragraph C [35] at 165C - E.)

Held, accordingly, that the appeal was dismissed. (Paragraph [36] at 165F.)

Cases Considered

Annotations

Reported cases

Southern African cases

Administrateur, Natal v Trust Bank van Afrika Bpk1979 (3) SA 824 (A): referred to D

Bayer South Africa (Pty) Ltd v Frost1991 (4) SA 559 (A): referred to

Brisley v Drotsky2002 (4) SA 1 (SCA) (2002 (12) BCLR 1229): referred to

Collen v Rietfontein Engineering Works1948 (1) SA 413 (A): dictum at 433 E applied

Coronation Brick (Pty) Ltd v Strachan Construction Co (Pty) Ltd1982 (4) SA 371 (D): referred to

Gouda Boerdery BK v Transnet2005 (5) SA 490 (SCA) ([2004] 4 All SA 500): dictum in para [12] applied

Indac Electronics (Pty) Ltd v Volkskas Bank Ltd1992 (1) SA 783 (A): referred to

International Shipping Co (Pty) Ltd v Bentley1990 (1) SA 680 (A): dicta at 700E - G and 701A - F applied F

Kern Trust (Edms) Bpk v Hurter1981 (3) SA 607 (C): referred to

Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd1985 (1) SA 475 (A): dictum at 497I - 498H applied

Minister of Law and Order v Kadir1995 (1) SA 303 (A): dictum at 321C - J G applied

Minister of Safety and Security v Van Duivenboden2002 (6) SA 431 (SCA) ([2002] 3 All SA 741): dicta in paras [12] and [22] applied

OK Bazaars (1929) Ltd v Standard Bank of South Africa Ltd2002 (3) SA 688 (SCA): dictum in para [23] applied

Road Accident Fund v Shabangu and Another2005 (1) SA 265 (SCA) ([2004] 2 All SA 356): dictum in para [18] applied H

Robinson v Randfontein Estates Gold Mining Co Ltd1925 AD 173: dictum at 198 applied

S v Mokgethi en Andere1990 (1) SA 32 (A): dictum at 40I - 41D applied

Shell and BP South African Petroleum Refineries (Pty) Ltd and Others v Osborne Panama SA1980 (3) SA 653 (D): referred to

Shill v Milner1937 AD 101: dictum at 105 applied I

Smit v Abrahams1994 (4) SA 1 (A): dictum at 15E - G applied

South African Forestry Co Ltd v York Timbers Ltd2005 (3) SA 323 (SCA) ([2004] 4 All SA 168): referred to

Stead v Conradie en Andere1995 (2) SA 111 (A): dictum at 122A - H applied

Steenkamp NO v Provincial Tender Board, Eastern Cape J 2006 (3) SA 151 (SCA) ([2006] 1 All SA 478): dictum in paras [37] - [40] applied

2009 (2) SA p153

Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards A Authority SA2006 (1) SA 461 (SCA) ([2006] 1 All SA 6): dicta in paras [1] and [13] - [14] applied

Trope v South African Reserve Bank and Another and Two Other Cases1992 (3) SA 208 (T): referred to

Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd2006 (3) SA 138 (SCA) ([2007] 1 All SA 240): dicta in paras [10] - [12], [14], [20] and [24] B applied.

Foreign cases

Anns v Merton London Borough Council[1978] AC 728 [HL]: referred to

Barrett v Enfield London Borough Council[2001] 2 AC 550 (HL): referred to C

Canadian National Railway Co v Norsk Pacific Steamship Co Ltd (1992) 91 DLR (4th) 289 ([1992] 1 SCR 1021): referred to

Caparo Industries plc v Dickman[1990] 2 AC 605 (HL) ([1990] 1 All ER 568): referred to

Cooper v Hobart (2001) 206 DLR (4th) 193 ([2001] 3 SCR 537): referred to

D v East Berkshire Community Health NHS Trust D [2005] 2 AC 373 (HL) ([2005] UKHL 23): referred to

Lagden v O'Connor[2004] 1 AC 1067 (HL): referred to

Murphy v Brentwood District Council[1991] 1 AC 398 (HL) ([1990] 2 All ER 908): referred to

Perre v Apand Pty Ltd(1999) 198 CLR 180 (HC of A): applied E

Sutradhar v Natural Environment Research Council[2006] 4 All ER 490 (HL) ([2006] UKHL 33): referred to

Woolcock Street Investments (Pty) Ltd v CDG (Pty) Ltd[2004] HCA 16: dictum in para [80] applied

X and Others (minors) v Bedfordshire County Council; M (a minor) and Another v Newham London Borough Council and Others; E (a minor) v F Dorset County Council and Other Appeals[1995] 2 AC 633 (HL) ([1995] 3 All ER 353): dictum at 750 applied.

Case Information

Appeal from a decision in the Transvaal Provincial Division (Rabie J). The facts appear...