Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2006 (3) SA 138 (SCA)

Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd
2006 (3) SA 138 (SCA)

2006 (3) SA p138

Citation	2006 (3) SA 138 (SCA)
Case No	545/04
Court	Supreme Court of Appeal
Judge	Howie P, Brand JA, Nugent JA, Jafta JA and Maya AJA
Heard	November 3, 2005
Judgment	November 25, 2005
Counsel	M J Fitzgerald SC (with S P Rosenberg SC) for the appellants.; W R E Duminy SC (with G S Myburgh SC) for the respondent.

Flynote : Sleutelwoorde B

Delict — Pure economic loss — General principles restated — Wrongfulness — Public policy — Whether requiring imposition of liability — Public policy not requiring extension of Aquilian action to rescue plaintiff who was in position to avoid risk of harm by contractual means but failed to do so. C

Delict — Pure economic loss — Delictual liability of structural engineers for pure economic loss suffered as result of negligent design of aquarium — Aquarium leased and operated by trust — Defendant's negligence arising prior to conclusion of contract between trust and defendant — Whether defendant under legal duty not to act negligently — Whether public policy requiring existence of such duty. D

Headnote : Kopnota

The appellants were trustees of a trust which leased and operated an aquarium. They claimed damages in delict for pure economic loss resulting from the negligent design by the respondent structural engineers of the exhibit tanks at the aquarium. They alleged that the respondent's negligence arose prior to the conclusion of a contract between them, but that, even at that stage, the E respondent was under a legal duty to act without negligence in deciding upon an appropriate design for the tanks. The respondent excepted to the appellants' particuars of claim on the basis that the facts pleaded failed to establish the existence of the legal duty alleged. The facts pleaded were that prior to the formation of the trust a joint venture agreement had been concluded by two potential investors in the aquarium project with the object of investigating the F feasibility of the project; that it was contemplated by all concerned, including the joint venture and the respondent; that the aquarium would be developed and operated by a trust which was yet to be formed; and that the respondent agreed to assist in investigating the feasibility of the project with a view to its formal appointment in the event of the project's going ahead. The Court a quo upheld the exception and dismissed the appellants' claim. In an appeal to the G Supreme Court of Appeal,

Held, that negligent omissions and negligently caused pure economic loss were wrongful, and therefore actionable, only where the defendant had been under a legal duty not to act negligently. The existence or otherwise of such a legal duty was determined upon consideration of relevant public or legal policy that was consistent with constitutional norms. (Paragraph [10] at 143J - 144C.) H

Held, further, that the appellants were asking the Court to accept the existence of a legal duty not hitherto recognised by our law and were therefore in reality asking the Court to extend the limits of delictual liability. Whether or not the Court would oblige depended upon whether there existed any considerations of public or legal policy which required that extension. (Paragraph [12] at 145C.) I

Held, further, that the approach of our courts was not to extend the scope of the Aquilian action to new situations unless there were positive policy considerations that favoured the extension. (Paragraph [20] at 147G - I.)

Held, further, that in the present case, however, there was no need for the extension sought because (1) it was intended from the outset that if the J

2006 (3) SA p139

project proceeded at all, it would be governed by a contractual relationship that would be created once the trust was A formed; and (2) it was foreseen from the outset that the trust could not possibly suffer any damages through the negligent conduct of the respondent prior to the conclusion of that contract. (Paragraph [21] at 147J - 148C.)

Held, further, that the trust could have protected itself against the risk of harm caused to it by the respondent's negligent conduct by inserting, either in the agreement between the B joint venture and the respondent or in the contract of formal appointment of the respondent, appropriate contractual stipulations covering even conduct that occurred prior to the formation of the trust. (Paragraph [23] at 148G - H.)

Held, further, that there was in general no reason to extend the Aquilian action to rescue a plaintiff who was in the position to avoid the risk of harm by contractual means, but who failed to do so. C (Paragraph [24] at 149A.)

Held, further, that it followed that the exception was rightly upheld. Appeal upheld. (Paragraph [28] at 150E.)

The decision in the Cape Provincial Division in Trustees for the Time Being of Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd confirmed.

Cases Considered

Annotations

Reported cases D

Administrateur, Natal v Trust Bank van Afrika Bpk 1979 (3) SA 824 (A): dictum at 833A applied

Gouda Boerdery BK v Transnet 2005 (5) SA 490 (SCA) ([2004] 4 All SA 500): dictum in para [12] applied E

Government of the Republic of South Africa v Basdeo and Another 1996 (1) SA 355 (A): referred to

Knop v Johannesburg City Council 1995 (2) SA 1 (A): referred to

Lillicrap, Wassenaar and Partners v Pilkington Brothers (Pty) Ltd 1985 (1) SA 475 (A): dicta at 500G - 501G and 504D - H applied

Local Transitional Council of Delmas v Boshoff 2005 (5) SA 514 (SCA): referred to F

McCullogh v Fernwood Estate Ltd 1920 AD 204: referred to

Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) ([2002] 3 All SA 741): dicta in paras [21] and [22] applied

Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 (1) SA 461 (SCA): dicta in paras [6] & [14] applied. G

Foreign cases

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

Bryan v Maloney (1995) 128 ALR 163: referred to

D & F Estates Ltd and Others v Church Commissioners for England and Others [1988] 2 All ER 992 (HL): referred to H

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

Winnipeg Condominium Corp No 36 v Bird Construction & Co (1995) 121 DLR (4th) 193: referred to

Woolcock Street Investments Pty Ltd v CDG Pty Ltd (formerly Cardno & Davies Australia Pty Ltd) [2004] HCA 16: referred to.

Case Information

Appeal from a decision in the Cape Provincial Division (Veldhuizen J and Hockey AJ). The facts appear from the judgment of I Brand JA.

M J Fitzgerald SC (with S P Rosenberg SC) for the appellants.

W R E Duminy SC (with G S Myburgh SC) for the respondent.

In addition to the authorities cited in the judgment of the Court, counsel for the parties referred to the following: J

2006 (3) SA p140

Alfa Laval Agri (Pty) Ltd en Andere v Ferreira en Andere NNO 2004 (2) SA 68 (O) A

Amalgamated Footwear & Leather Industries v Jordan & Co Ltd 1948 (2) SA 891 (C)

Aucamp and Others v University of Stellenbosch 2002 (4) SA 544 (C) at 567 - 9

Bayer South Africa (Pty) Ltd v Frost 1991 (4) SA 559 (A) at 570B - D B

Bloom's Woollens (Pty) Ltd v Taylor 1962 (2) SA 532 (A) at 538H

BOE Bank Ltd v Ries 2002 (2) SA 39 (SCA) ([2004] 1 All SA 481)

Bowen v Paramount Builders (Hamilton) Ltd [1975] 2 NZLR 546 (CA)

Callender-Easby and Another v Grahamstown Municipality and Others 1981 (2) SA 810 (E) at 812H - 813A C

Canadian National Railway Co v Norsk Pacific Steamship Co (1992) 91 DLR (4th) 193 at 365

Cape Town Municipality v Bakkerud 2000 (3) SA 1049 (SCA) ([2000] 3 All SA 171)

Cape Town Municipality v Payne 1923 AD 207 D

Cathkin Park Hotel and Others v J D Makesch Architects and Others 1993 (2) SA 98 (W) at 100H - I

Colonial Industries Ltd v Provincial Insurance Co Ltd 1920 CPD 627 at 630

Dharumpal Transport (Pty) Ltd v Dharumpal 1956 (1) SA 700 (A) at 706E E

Dutton v Bognor Regis United Building Co Ltd [1972] 1 All ER 462 (CA)

Erasmus v Inch and Another 1997 (4) SA 584 (W) at 592G - 593C

Government of the Republic of South Africa v Basdeo and Another 1996 (1) SA 355 (A) at 367E - E F

Hedley Byrne & Co v Heller & Partners Ltd [1963] 2 All ER 506

Invercargill City Council v Hamlin [1996] 1 All ER 756 (PC) at 766 - 7

Klerck NO v Van Zyl and Maritz NNO and Another and Related Cases 1989 (4) SA 263 (SE) at 288E - G

Kotsopoulos v Bilardi 1970 (2) SA 391 (C) at 395D - E G

Miller and Others v Bellville Municipality 1971 (4) SA 544 (C) at 546

Pinshaw v Nexus Securities (Pty) Ltd & Another 2002 (2) SA 510 (C) ([2001] 2 All SA 569)

Schultz v Butt 1986 (3) SA 667 (A) at 679

S M Goldstein & Co (Pty) Ltd v Cathkin Park Hotel (Pty) Ltd and Another 2000 (4) SA 1019 (SCA) H ([2000] 4 All SA 407) at 1024F (SA)

South African National Parks v Ras 2002 (2) SA 537 (C) ([2001] 4 All SA 380) at 541J - 542A

Tsimatakopoulos v Hemmington, Isaacs & Coetzee CC and Another 1993 (4) SA 428 (C) at 435H

Ultramares Corp v Touche 174 NE 441 at 444 (NY 1931) I

Universiteit van Pretoria v Tommie Meyer Films (Edms) Bpk 1977 (4) SA 376 (T) at 387

Boberg The Law of Delict 1 ed (1984) vol 1

Hutchison and Van Heerden 'At the Tort/Contract Divide seen from the SA Perspective' 1997 Acta Juridica at 97 J

2006 (3) SA p141

Joubert (ed) The Law of South Africa vol 2 part 1 (1st reissue) at para 186 A

Midgley 'Concurrence of Actions' (1998) 115 SALJ at 274 - 5

Neethling, Potgieter and Visser The Law of Delict 4 ed at 41 fnts 24 and 25

Van der Walt and Midgley Delict: Principles and Cases 2 ed (1997) vol 1 at para 64. B

Cur adv vult.

Postea (November 25). C

Judgment

Brand JA:

[1] This appeal raises questions of liability in delict for so-called pure economic loss resulting...