Sandton Town Council v Erf 89 Sandown Extension 2 (Pty) Ltd

• Jurisdiction: South Africa

Sandton Town Council v Erf 89 Sandown Extension 2 (Pty) Ltd
1988 (3) SA 122 (A)

1988 (3) SA p122

Citation	1988 (3) SA 122 (A)
Court	Appellate Division
Judge	Hoexter JA, Nestadt JA, Vivier JA, Kumleben JA and Viljoen AJA
Heard	March 10, 1988
Judgment	March 31, 1988

Flynote : Sleutelwoorde

Local authority — Municipality — Land — Compensation payable by municipality in terms of s 134 (b) of Local Government Ordinance 17 of 1939 (T) for installation of drainage system over owner's land — C Whether phrase 'compensation for any damage done' in s 134 (b) includes compensation for owner's pecuniary loss due to impairment of value of land or restricts such compensation to actual physical damage caused by execution of drainage works — Court a quo upholding former interpretation — Court holding further that presence of drainage system D (laid by appellant over respondent's land) reducing value of the land concerned and that respondent, as owner, had been partially divested of one of his rights of ownership without his consent — Right taken by appellant therefore a taking akin to expropriation — Court also rejecting appellant's contention that where Legislature providing for payment of compensation for damages caused by exercise of statutory E permissive powers, any ambiguity in such provision should be resolved by restrictive interpretation adverse to injured subject as financial resources of public bodies should not be unduly depleted — Court should not be disposed to approach interpretation of this kind of provision F restrictively and adversely to party entitled to claim compensation — No definite and clear language in ordinance to bolster such restrictive construction — Presumption against taking or extinguishment of valuable right to property without compensation operating decisively in present case — Court a quo properly construing s 134 (b) in favour of respondent G — Appeal dismissed.

Headnote : Kopnota

The respondent had claimed compensation from the appellant in terms of s 134(b) of the Local Government Ordinance 17 of 1939 (T), after the appellant had laid stormwater pipes over a certain erf 89 belonging to the respondent. Section 134(b) entitled an owner of property, over or on which a drainage system was installed by the municipal council, to claim H compensation 'for any damage done'. It was contended by the appellant, in its exception to respondent's claim, that upon a proper construction of the relevant provisions only direct physical damage to the land caused by the execution of the drainage works could be the subject of compensation, and that the council was not obliged to make compensation for consequential losses, such as a diminution of the value of the land sustained as a result of such acts. The respondent had claimed an I additional amount of compensation as it alleged that the value of its land had been diminished by 35% by the installation of the drainage system. The Court a quo dismissed the exception. On appeal, it was contended by appellant that the Court a quo had failed to appreciate that the appellant's exercise of its power under s 134(b) was not in character kindred to expropriation; that pursuant thereto no transmission of any right by respondent to the appellant and no enrichment of the latter at the expense of the former had taken place; and that therefore 'compensation for any damage done' should be confined J to mere physical damage.

1988 (3) SA p123

A Held, that, as the presence of the pipes had caused the exploitation of the business rights attaching to erf 89 to become less profitable to the respondent and had, therefore, reduced its value; that the respondent, as owner, had been partially divested without his consent of one of respondent's rights to ownership, and that it was clear that the right taken by the appellant was a taking akin to expropriation.

It was further contended by the appellant that, in recognition of the principle that the financial resources of public bodies clothed with statutory authority for the discharge of public functions should not B lightly be exposed to undue depletion, that where the legislature had provided for payment of compensation for damages caused by the exercise of statutory permissive powers, any ambiguity in such a provision should be resolved by the adoption of a restrictive construction adverse to the injured subject.

Held, applying the dictum in Minister of Railways and Harbours of the Union of South Africa v Simmer and Jack Proprietary Mines Ltd 1918 AC C 591 (PC) at 603, that a court should not be disposed to approach the problem of interpreting this kind of provision restrictively and adversely to the party entitled to claim compensation.

Held, further, that there was no definite and clear language anywhere in the ordinance to bolster the construction for which the appellant contended and that what operated decisively in the present case was the presumption against the taking or extinguishment of a valuable right to property without compensation.

Held, therefore, that the Court a quo had rightly construed s 134(b) in D favour of the respondent. Appeal dismissed.

The decision in the Witwatersrand Local Division in Sandton Town Council v Erf 89 Sandown Extension 2 (Pty) Ltd 1986 (4) SA 576 confirmed.

Case Information

Appeal from a decision in the Witwatersrand Local Division (Le Grange E J), reported at 1986 (4) SA 576. The facts appear from the judgment of Hoexter JA.

J A Heher SC for the appellant: That 'damage' may be limited to physical injury or may also embrace loss or detriment affecting an estate condition or circumstance appears from the definition of that word in the Oxford English Dictionary (cited with approval in Arendse v F Badroodien 1971 (2) SA 16 (C) at 17E - H). Cf the comments of Viljoen J (as he then was) in Administrator, Transvaal v Kildrummy Holdings (Pty) Ltd and Another 1983 (4) SA 960 (T) at 973F. 'Damage' is a word which has required frequent judicial consideration. The breadth of meaning which the Courts have accorded to it has depended largely upon the G context in which it arose. In some cases it has been restricted to pure physical damage (excluding consequential loss). Examples of such cases are Vernon v St James, Westminster 16 ChD 473; Crofts v Haldane (1867) LR 2 QB 194; R v Whiteman 23 LJMC 120; East End Dwellings Co v Finsbury Borough Council 1952 AC 109; and Fothergill v Monarch Airlines [1977] 3 WLR 885. In the East End Dwellings case, Lord Porter said (at 122): H 'Damage is, in its ordinary meaning, a physical thing. It is the building and not the position of the owner which has to be restored.' Cases in which the wider meaning of 'damage' has been found to be appropriate include Greg v Planque [1936] 1 KB 669; Goulandris Bros v B Goldmann & Sons [1958] 1 QB 74 at 105; and Nippon Yusen Kaisha v Acme Shipping Corporation [1972] 1 WLR 74 at 78 - 80. The purpose and context I of the powers conferred by s 134(b) justifies the narrower application of the concept of damage. Upon that interpretation, financial loss flowing from a reduction in the development potential of land is not physical damage and does not qualify for compensation. What was said of similar powers in Johannesburg Municipality v African Realty Trust Ltd J 1927 AD 163 at 174 - 5 applies

1988 (3) SA p124

A equally to the power to lay pipes across private property conferred by s 134(b). See also Breede River (Robertson) Irrigation Board v Brink 1936 AD 359 (per De Villiers JA) and Reddy and Others v Durban Corporation 1939 AD 293 at 299. The exercise of such a power does not, in the absence of express provision for payment of compensation, necessarily create a corresponding obligation to compensate the individual B concerned: Feun v Pretoria City Council 1949 (1) SA 331 (T) at 342; Cape Town Municipality v Abdulla 1976 (2) SA 370 (C) at 375 - 6; L C Steyn Uitleg van Wette 5th ed. Moreover, in general, no action lies for doing that which the Legislature has authorised, if it be done without negligence: Geddis v Proprietors of the Bann Reservoir 1878 AC 430 (HL) C at 455 - 6; Union Government v Sykes 1913 AD 156 at 159. The power conferred by s 134(b) is one which necessarily contemplates interference with private rights in the interest of carrying out public works. Were it not for the express compensatory provisions, the owner who wished to claim would have to show that the local authority had been negligent in the sense that it had not adopted reasonably practicable measures to D avoid or (perhaps) lessen the injury to him: Bloemfontein Town Council v Richter 1938 AD 195 at 230 - 1; Germiston City Council v Chubb & Sons Lock & Safe Co Ltd 1957 (1) SA 312 (A) at 322. Thus, where a public body is empowered to carry out works for the public weal, the approach of the Courts has been to construe the legislative intention as one desirous of E restricting the circumstances in which compensation is payable so as not to inhibit the ability of the body in question. This is to be contrasted with the liberal approach to the question of compensation adopted when construing expropriation legislation: Oosthuizen v SAR & H 1928 WLD 52 at 62; Krause v SAS & H 1948 (4) SA 554 (O) at 562; Malherbe v Van F Rensburg 1970 (4) SA 78 (C) at 82; Belinco v Bellville Municipality 1970 (4) SA 589 (A) at 597C. The fact that the Legislature has, in the context of an exercise of permissive statutory powers, made provision for the payment of compensation, does not remove the case from the ambit of the restrictive approach. Where there is any ambiguity in the compensatory provisions the interpretation should still be that which G will least inhibit the exercise of the statutory powers. As pointed out above, such an ambiguity is inherent in the concept of 'damage'. A S van der Spuy in an article published in (1977)...