---

SANDTON TOWN COUNCIL Appellant

(Defendant/Excipient a quo)

and

ERF 89 SANDOWN EXTENSION 2 Respondent (PROPRIETARY) LIMITED (Plaintiff a quo)

Case No.. 93/87

mp

IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)

In the matter between:

SANDTON TOWN COUNCIL Appellant

(Defendant/Excipient a quo)

and

ERF 89 SANDOWN EXTENSION 2 Respondent (PROPRIETARY) LIMITED (Plaintiff a quo)

CORAM: HOEXTER, NESTADT, VIVIER, KUMLEBEN, JJA

et VILJOEN, AJA

HEARD: 10 March 1988 DELIVERED: 31 March 1988

JUDGMENT

HOEXTER, JA
2. HOEXTER, JA,
The respondent is a private company which is the registered owner of an erf ("erf 89") in Sandown Extension 2 Township. The appellant is a local authority constituted in terms of the Local Government Ordinance 17 of 1939 (T), as amended ("the Ordinance"). In terms of
sec 134(b) of the Ordinance the appellant gave the respondent notice of the former's intention to lay stormwater pipes across erf 89 by the taking of the right to do so. The provisions of sec 134 of the Ordinance empower the appellant to carry out sewerage and drainage work. For purposes of the present appeal the relevant provisions of sec 134 are the following:-

"For the purpose of carrying out any
drainage works the council may -

(a) cause such ... drains, and pipes to be

made, laid and maintained either
within, or outside the municipality
as may be necessary for effectually

draining the municipality or

any portion thereof

(b) carry such drains or pipes through,

across, or under any public road, street, square,or open space, or any place laid out as or intended for a public road,

street

3
street, square, or open place either within or outside the municipality, without paying compensation and, after giving reasonable notice in writing to the owner or occupier of their intention, perform the same acts in respect of any land
within or outside the municipality
on making compensation for any damage done, the amount whereof, if not mutually agreed upon, being determined by arbitra= tion, provided that, in determining any compensation payable by the council hereunder the existence of ahy sanitary passage through or over which the council has a right of access to any private land or building for the purpose of sanitary service and which right the council may be willing to surrender, shall be taken into account;" (My underlining)

Considering that the presence of the stormwater pipes on
erf 89 would reduce the value of the property, the respondent
claimed payment of R205,200 as damages form the appellant.
The appellant refused to pay damages on the basis claimed
by the respondent. In the Witwatersrand Local
Division the respondent instituted an action against

the appellant. In terms of sec 134(b) of the
Ordinance read with sec 26(4) and sec 21(1)(b) of the

Expropriation . .
4. Expropriation Act 63 of 1975,it claimed compensation in the sum of R205 200,00 "as and for actual financial loss". The appellant excepted to the respondent's claim. Having heard argument thereon,LE GRANGE, J dismissed the exception with costs, including the costs consequent upon the employment by the respondent of two counsel. With leave of this Court the appellant appeals against the whole of the order made by the Court below. The judgment appealed against has been reported: 1986(4) SA 576(W).

From the respondent's particulars of claim as amplified by the annexures thereto it appears that the case pleaded by the respondent is the following. Erf 89 is zoned for business rights. The respondent computes the loss in value of erf 89 flowing from the laying of the stormwater pipes across it as follows. It says that if an office building be erected upon erf 89 the presence of the storm= water pipes will permit of 76 fewer parking bays being accommodated in the basement of the building than would

otherwise

5.

otherwise have been the case. The appellant excepted to the respondent's claim on the ground that it failed to disclose a cause of action. The basis of the exception was that upon a proper interpretation of sec 134(b) of the Ordinance compensation was claimable in respect only of direct physical damage to the land itself.

In this Court the submissions advanced on behalf of the appellant by Mr Heher may be outlined somewhat as follows. He allowed that the carrying of stormwater pipes across erf 89 necessarily involved an interference with the physical state of the land; and that such interference no doubt created a correlative legal duty upon the appellant to fill all excavations made in the course of laying the pipes and to make good and restore the ground surface to the condition wherein it had been before the execution of the works. ït was then said that the damage for which compen= sation was payable was confined to reparation for any

failure

6.
failure on the part of the appellant to make good and restore the surface of the land upon completion of the works. What the meaning of the phrase "on making compensation for any damage done" did, however, not include was pecuniary loss to the owner of erf 89 due to a diminution of the value of the land caused by the presence of the pipes.

The argument addressed to us in support of these broad submissions falls into two parts. While recognising the strong presumption in our law against con= fiscation of rights, and although in general conceding what he described as "the liberal approach" governing the matter of compensation in the interpretation of expropriation legislation, the first contention raised by Mr Heher was that the Court below had failed to appreciate that in truth the appellant's exercise of its power under sec 134(b) in the present case was not in character kindred to expropria= tion; that pursuant thereto no transmission of any right by

the
7. the respondent to the appellant and no enrichment of the

latter at the expense of the former had taken place; and
that on this account "compensation for any damage done"
should be restrictively interpreted and confined to mere
physical damage. As a corollary to this argument it was
also urged that a narrow construction upon the phrase was
here warranted because any ensuing restraint upon the
respondent's property rights in respect of erf 89 was simply
the result of a "control measure" applied by the appellant
in order to promote public health and convenience.

In my opinion the first contention must fail. Ownership of land connotes the existence of an aggregate of distinct and valuable rights inhering in the owner. These include not only the right to exclusive possession and the right of disposal,but also the right to the use and enjoyment of the land for all lawful purposes. Accepting then (as for purposes of the exception the Court a quo correctly accepted)

the

8. the averments of fact made by the respondent, the following

situation emerges. The respondent may lawfully use erf 89
and turn it to account by erecting an office building thereon.
The economic exploitation of an office building on erf 89
entails the provision of a certain number of parking bays
in the basement of such building. The presence of the
stormwater pipes laid across erf 89 precludes the provision
of the required number of parking bays. In the result the
exploitation of the business rights attaching to erf 89 has
become less profitable to the respondent; the presence of
the pipes inhibits the use to which erf 89 may lawfully be
put and has therefore reduced its value. These facts afford,
I think, a useful example of an owner of land being partially
divested, without his consent, of one of his rights to owner=
ship. It is to be noticed, moreover, that in terms of sec
135(1) of the Ordinance all pipes for the disposal of drainage
constructed by the appellant vest in the latter. In all these
circumstances it is tolerably clear, in my opinion, that the

right

9.

right taken by the respondent is a taking akin to expro=
priation. I agree, with respect, with the observation made
by JANSEN, J (as he then was) in Pretoria City Council v
Blom and Another 1966(2) SA 139(T) at 144A in relation to
sec 84(b) of the Ordinance (which empowers a council to lay
pipes and wires for the conveyance of electric current, gas
and water) that -

"This power to override private rights appears to be in many respects analogous to a form of expropriation."

The second contention advanced by Mr Heher, if I understood him correctly, amounted to the following: With reference to decisions of this Court such as Johannesburg Municipality v African Realty Trust Ltd 1927 AD 163 and Breede River (Robertson) Irrigation Board v Brink 1936 AD 359, counsel for the appellant pointed out that the exercise of a statutory power whose effect may be injurious to the rights of the subject does not necessarily create a

legal

10.
legal obligation to pay compensation for the injury on the part of the public body exercising the power. Counsel urged upon us that such decisions were founded upon a recognition of the principle that the financial resources of public bodies clothed with statutory authority for the discharge of public functions should not lightly be exposed to undue depletion. From this it followed, so ran the argument, that where in the context of the exercise of statutory permissive powers the legislature had in fact provided for payment of compensation for damage thereby occasioned, any ambiguity in a provision for compensation should be resolved by the adoption of a restrictive construction adverse to the injured subject.

In my judgment the second contention is also

unsound. Whatever considerations may impel a court to
conclude, in a case where the legislation is silent as to
compensation for ensuing damage, that what has been sanctioned

is

11.

is the invasion of private rights without compensation, it is difficult to see how such considerations can in any wise be relevant to an appraisal of the very different situation in which express provision has been made for compensation for damage to the subject; and in which the sole inquiry is confined to an interpretation of the true ambit of such
compehsation. To the extent that the phrase in sec 134(b) "compensation for any damage done", when viewed in its contextual setting, yields ambiguity, I am unable to agree that a court should be disposed to approach the problem of interpreting it restrictively and adversely to the party entitled to claim compensation. Here relevant is the canon of construction succinctly stated in Minister of Railways and Harbours of the Union of South Africa v Simmer and Jack Proprietary Mines, Limited 1918 AC 591 (PC). Dealing with a Raadsbesluit passed by the Legislature in derogation of the rights of the subject

LORD
12-LORD SUMNER remarked in the course of his opinion

(at p 603) :-

"Under these circumstances their Lordships think that the construction ought to be in favour of the subject, in the sense that general or ambiguous words should not be used to take away legitimate and valuable rights from the
subject without compensation, if they
are reasonably capable of being construed
so as to avoid such a result consistently
with the general purpose of the
transaction "

(See further in this connection the decisions to which
reference is made at 579F/G of the judgment by the learned
Judge in the Court below.)

The word "damage" in various and differing contexts has often been the subject of judicial debate and decision. I do not think that the many authorities thereanent cited in the appellant's heads of argument lend much assistance in the present case. While the phrase "compensation for any damage done" is at least susceptible

of

13.

of the narrow meaning which counsel for the appellant would assign to it, one must bear in mind that the word "damage" is one of wide and general import. I find myself in complete agreement with the following remarks contained (at 580 B/C) in the judgment of LE GRANGE, J:-

"If the word 'damage' is used in its ordinary sense, the meaning of the phrase 'compensation for and damage done' is, in my view, wide enough to include within its scope not only compensation for any 'physical damage' occasioned by the execution of the defendant's drainage works, but also for any pecuniary loss caused to the plaintiff by the impairment of the 'value or usefulness' of the land in question."

Counsel for the appellant submitted that the use in sec 134(b) of the verb "done" in association with the word "damage" tended to signify mere physical damage rather than damage comprising also consequential pecuniary loss. I am unable thus to read these two words. So linked to the word "damage" the verb "done", in its natural and ordinary

meaning
14. meaning, conveys, I consider, nothing more or less than

"caused". It is noteworthy that in the Afrikaans text

of sec 134(b) the phrase in question is rendered as:-

" teen vergoeding vir enige skade

veroorsaak" (My underlining)

I proceed to consider whether in other parts of the Ordinance there are to be gleaned helpful indications of a legislative intent reinforcing either the scanter compensation urged by the appellant or the ampler recompense suggested by the respondent. Counsel for the appellant sought to derive support for his construction by contras= ting "compensation for any damage done" with certain provisions in sec 67 of the Ordinance. This section empowers a council to close streets permanently or to divert them. In terms of sec 67(4)(a) provision is made for the payment of -

" compensation for any damage or loss

sustained" (My underlining)

BY
15. by a person whose interests are adversely affected by the closing or diversion of a street. Dealing first with the use in this subsection of the verb "sustained", there seems to me to be no substantial notional difference between "damage done" and "damage sustained". The verb "sustained" is more fittingly employed in the context of sec 67(4)(a) because the "damage or loss" is here related to a "person" adversely affected. Dealing next with the words "damage or loss", this phrase at first blush might seem to connote a rather broader concept than the single word "damage" used in sec 134(b); but this initial impression is counter= balanced, I think, by the consideration that "loss" is a synonym for "damage"; and that both words readily convey the meaning of "injury" or "impairment". Such assistance as Mr Heher is able to derive from the wording of sec 67(4)(a) appears to me to be rather meagre.

As a feature sustaining the broader construc= tion of the phrase in question Mr Wulfsohn pwith Mr Pincus)

appeared

16.
appeared for the respondent, called our attention to the
provisions of subsection (1) of sec 135 ("Vesting of sewers
in council and rights of access thereto"). This subsection
gives a council the right of access to private property for
the purpose of inspection and maintenance of sewers and
pipes. To this end it empowers a council to uncover and
expose sewers and pipes, but subject to a stipulation in the
following terms:-

"....provided that the couhcil shall repair all damage caused by such entry and inspection."

In the light of the above counsel for the respondent urged
that had the legislature in sec 134(b) intended the narrow
construction for which the appellant contends, a more
appropriate wording for the compensatory provision would
have been:-

"....on making compensation for any failure on the part of the council to repair all damage caused by the carrying out of the drainage works."

While
17. While there may be some force in this point made by Mr Wulfsohn, it is not,I think, a very cogent one,

Taking a broad view of these (and other) provisions in the Ordinance to which we were referred by counsel on both sides, it seems to me that beyond the provisions of sec 134(b) itself there is little which affords material assistance in the resolution of the problem of construction whereon the result of this appeal hinges. At all events I find no definite and clear language anywhere else in the Ordinance to bolster up the construction for which the appellant contends. Accepting (as I have already found) that the power exercised by the appellant in taking the right. in question is akin to expropriation, and further accepting (as for purposes of the exception one must) that the value of erf 89 has been substantially reduced by the taking of the right, what operates decisively in the case is the presumption against the taking or extinguishment of a valuable right to property without compensation. In my

opinion
18. opinion the Court below rightly construed sec 134(b) in favour of the respondent; and it properly dismissed the appellant's exception.

The appeal is dismissed with costs, including the costs consequent upon the employment of two counsel.

G G HOEXTER, JA

NESTADT, JA )

VIVIER, JA )
Concur KUMLEBEN, JA )

VILJOEN, AJA )

---