Knop v Johannesburg City Council

• Jurisdiction: South Africa
• Judge: Botha JA, Hefer JA, Vivier JA, Nienaber JA, Howie JA
• Judgment Date: 18 November 1994
• Docket Number: 669/92
• Hearing Date: 23 September 1994
• Court: Appellate Division

Botha JA:

This is an appeal, with the leave of the Court a quo, against a judgment upholding with costs an exception by the respondent to the E particulars of claim of the appellant in an action for damages brought by the latter against the former in the Witwatersrand Local Division. I shall refer to the appellant as 'the plaintiff' and to the respondent as 'the Council'.

For the purposes of paraphrasing the particulars of claim the plaintiff's F allegations can be divided into three parts, as pertaining respectively to the introductory facts, the basis of the claim, and the damages claimed. The introductory facts alleged are as follows:

1.

The Council is a local authority constituted under the Local Government Ordinance 17 of 1939 (T).

2.

G On 16 August 1988 the plaintiff applied to the Council for the subdivision of erf 1793, Triomf ('the property'), in terms of clause 36 of the Johannesburg Town Planning Scheme ('the Scheme').

3.

The application was made by the plaintiff for the purposes of developing a cluster housing complex ('the project').

4.

The application for subdivision was approved by the Council on 5 December 1988.

5.

H The Council notified the plaintiff of the approval of the application, and as a result the plaintiff took certain steps with a view to developing the project, inter alia by procuring financing, incurring expense, entering into sales of the units and proceeding with building operations.

6.

I On 27 April 1990 the Council notified the plaintiff, by means of a letter addressed to the land surveyors who had been appointed by the plaintiff, that approval of the subdivision had been granted in error, contrary to the provisions of clause 36(2)(b) of the Scheme, in that the subdivision as approved allowed erven of a minimum size J of 200 square metres, whereas the said clause laid down a minimum

Botha JA

A size of 250 square metres. (In the letter, which is annexed to the particulars of claim, the Council offered to procure an amendment of the Scheme by rezoning the property so as to allow a density of one dwelling per 200 square metres.)

7.

The Council, in acting as set out in paras 4, 5 and 6 above, was represented by officials who acted within the scope of their B employment and in the performance of their duties on behalf of the Council.

8.

The officials were empowered to approve the application in terms of s 92 of the Town-planning and Townships Ordinance 15 of 1986 (T) ('the ordinance').

C The basis of the plaintiff's claim is to be found in allegations that the Council's officials owed certain duties to the plaintiff in connection with the exercise of their statutory powers and that they negligently failed to comply with such duties in certain respects. The alleged duties are as follows:

(i)

D not to exercise their statutory powers in an unreasonable manner, alternatively, when exercising their powers, to take reasonable steps to prevent loss being caused to the plaintiff;

(ii)

in terms of s 92(5) of the ordinance, to take all reasonable steps to ensure that the exercise of their powers would not bring about a result which would be in conflict with a provision of the Scheme;

(iii)

E in exercising their powers, to give proper attention to and use reasonable care in the consideration of the application; and

(iv)

not to make a misstatement to the plaintiff to the effect that the application was not in conflict with the Scheme, if that were not so.

It is alleged that the officials were negligent in the following respects:

(i)

F they failed to exercise their statutory powers in a reasonable manner, alternatively they failed to take all reasonable steps to prevent the loss actually suffered by the plaintiff;

(ii)

contrary to s 92(5), they failed to take all reasonable steps to ensure that the approval was not in conflict with the Scheme;

(iii)

G they failed to give proper attention and to use reasonable care in the consideration of the application;

(iv)

they made a misrepresentation to the plaintiff to the effect that the application for 200 square metres per unit was in accordance with the Scheme, whilst that was not the case, and the plaintiff, relying on the representation, took the steps referred to in para 5 above;

(v)

H they refused for a period of 10 months to allow the plaintiff to proceed with the project, after which it was decided to rezone the property in terms of s 55 read with s 29 of the ordinance and to prepare an amended Scheme in order to provide for an erf size of 200 square metres per unit; and

(vi)

I the said refusal was an unreasonable exercise of the officials' powers in terms of the ordinance, alternatively the refusal amounted to a failure to take all reasonable steps to prevent the loss actually suffered by the plaintiff.

As to damages, the plaintiff alleges that as a result of the negligent J conduct of the officials he was unable to proceed with the development of

Botha JA

A the project for a period of 10 months, during which the development came to a standstill; he was unable to give transfer of erven already sold and could not sell further erven; he was obliged to continue paying interest on the money he had borrowed to finance the project; he was obliged to incur legal expenses in resisting creditors' claims arising from cash flow B problems; building costs and the cost of supplying an electricity network escalated; and he suffered a loss of business reputation. In consequence of all this the plaintiff alleges that he suffered loss in an amount of R552 904,73, which is itemised in some detail under various headings, in each of which, with the exception of the claim for loss of business reputation, the calculation is made with express or implied reference to C the period of 10 months during which the development of the project was delayed.

It will be seen that the plaintiff's allegations concerning the duties and the negligence of the Council's officials are related to three distinct aspects of their conduct: the approval of the application, the D misrepresentation that the subdivision would not be in conflict with the Scheme, and the refusal to allow the development of the project for a period of 10 months. The particulars of claim can thus be said to embody three notional causes of action, which can be summarised briefly as follows:

A.

E The Council failed in its duty to exercise reasonable care in considering the application and to prevent loss being caused to the plaintiff by negligently failing to ensure that the subdivision would not be in conflict with the provisions of the Scheme.

B.

The Council breached its duty not to make a misrepresentation to the plaintiff that the subdivision would not be in conflict with the F Scheme by negligently making such a misrepresentation concerning the minimum sizes of erven permissible.

C.

The Council refused for 10 months to allow the development of the project to proceed, pending the amendment of the Scheme, thus exercising its powers unreasonably and failing negligently to prevent loss to the plaintiff.

G In argument before this Court it was common cause that the allegations referred to in A and B above fell to be considered separately, on the footing that the particulars of claim postulated two causes of action, each independent of the other. Counsel for the plaintiff suggested that the allegations in C should also be seen as a separate and independently H averred cause of action. That suggestion will be considered later.

In the Council's notice of exception it is contended on a number of grounds that the particulars of claim do not disclose a cause of action. It is not necessary, however, to traverse the terms of the notice, for in I this Court counsel for the Council reformulated the grounds of exception, condensing them into three, and counsel for the plaintiff declared that he was content to join battle on the grounds as reformulated. They are as follows:

(a)

The law confers an immunity from claims for negligence in respect of the decision taken by the local authority.

(b)

J There was, in any event, no duty of care owed to the plaintiff.

Botha JA

(c)

A The decision complained of was a nullity in respect of which the plaintiff should have formed his own conclusions and the mere making of such a decision does not imply a representation as to legal validity upon which the plaintiff was entitled to rely.

In the Court a quo MacArthur J upheld the exception for reasons which fall B within the purview of ground (a) above. In his judgment the learned Judge dealt only with the alleged cause of action reflected in A above; no mention was made of the allegations referred to in B (or C) above. It seems that in the Court below A was, if not the only, at least the main bone of contention. I shall deal with it first.

MacArthur J's reasoning was premised on the distinction between a C quasi-judicial and an administrative act. He found, on a consideration of the provisions of s 95 of the ordinance, read with s 19, and with s 35 of the regulations promulgated in terms of the ordinance, that a local authority was required to weigh up many facts in deciding upon an application for subdivision; that it did not have an absolute or unfettered discretion, but that its discretion had to be exercised in the D best interests of all concerned, taking into account, inter alia, the convenience and general welfare of the area as well as considerations of efficiency and the economy; and accordingly that a local authority was vested with a quasi-judicial discretion in exercising its powers under s 95. The learned Judge went on to say that judicial officers were exempt E from liability for loss caused by mistakes...