THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case number: 653/07

In the matter between:

FOURWAY HAULAGE SA (PTY) LTD

APPELLANT

and

SA NATIONAL ROADS AGENCY LTD
RESPONDENT

Neutral citation:
Fourway Haulage v SA National Roads Agency (653/07)
[2008] ZASCA 134 (26 November 2008)

CORAM:

SCOTT, FARLAM, BRAND, LEWIS ET JAFTA JJA

HEARD:

5 November 2008

DELIVERED:
26 November 2008

CORRECTED:

SUMMARY:
Delict – pure economic loss – meaning of – policy
considerations relevant in determining wrongfulness –
remoteness of damage – application of flexible test

ORDER

On appeal from:
High Court, Pretoria (Rabie J sitting as court of first
instance)

The appeal is dismissed with costs

JUDGMENT

BRAND JA (Scott, Farlam, Lewis et Jafta JJA concurring)

[1] The appellant ('Fourway') is a long distance haulier. The respondent
('the Agency') owes its existence to the South African National Roads Agency
Limited and National Roads Act 7 of 1998 ('the Act'). The dispute between
them originates from an accident which occurred in the early evening of 26
September 2003 on the N1 national road between Polokwane and Mokopane
in the Limpopo province. The two vehicles involved were an articulated truck
and a light delivery van. The articulated truck was driven at the time by an
employee of Fourway who was acting in the course and scope of his
employment.

[2] The articulated truck was on its way from an asbestos mine in
Zimbabwe to Durban harbour carrying about 34 tonnes of chrysolite asbestos,
destined for export. As a result of the collision, the truck overturned and
spilled its cargo onto practically the entire surface of a portion of the national
road and its surroundings. Because of the hazardous nature of asbestos
powder, the spillage required an extensive cleaning-up and decontamination
operation.

[3] To facilitate the cleaning-up and decontamination process, the traffic
authorities closed the section of the national road involved and diverted the

traffic in both directions onto an alternative road. This lasted for about 24
hours. The section of the national road which was closed forms part of a toll
road. The alternative route was not subject to toll. As a result of the closure,
two toll plazas – as defined in the Act – could not collect toll fees. Based on
these facts, the agency as the entity authorised by s 27 of the Act to levy and
collect toll fees on toll roads, instituted an action in delict against Fourway for
the damages it allegedly suffered in the form of loss of toll revenue in an
amount of R105 996.67.

[4] At the commencement of the trial, the parties asked the court a quo
(Rabie J) to order a separation of issues. In terms of the separation order, the
issues relating to the liability of Fourway were to be decided first, while the
quantum of the Agency's alleged damages stood over for later determination.
The preliminary issues were decided in favour of the agency. Hence the court
declared Fourway liable for such damages as the Agency may prove in
respect of the lost revenue it would have collected at the two toll plazas
involved, but for the closure of the road. It also ordered Fourway to pay the
costs of the preliminary proceedings. Fourway's appeal against that judgment
is with the leave of the court a quo.

[5] Part of the controversy on appeal was brought about by a shift in the
focus of the defence advanced by Fourway and the resulting mutation of the
issues involved. A convenient starting point for an account of the mutation is
the opening address by counsel for the Agency, as plaintiff, at the beginning
of the trial. With reference to the pleadings, counsel at that stage defined the
issues between the parties as follows:
(a)
Whether or not the respondent had the necessary authority to collect
toll fees on that portion of the toll road which was closed as a result of the
collision.
(b)
Whether the collision occurred as a result of the negligence of the
driver employed by Fourway.
(c)
Whether
the
occurrence
of
the
collision
necessitated
the
decontamination operation and the closure of the road.

[6] Counsel for Fourway did not react to this definition of the issues.
During the trial, Fourway formally conceded the issue referred to in (a) and
the evidence led by the parties therefore dealt exclusively with the issues in
(b) and (c). But in argument at the end of the trial, Fourway's counsel, for the
first time, raised two further contentions. First he submitted that the Agency's
claim was for the recovery of pure economic loss which required the existence
of a legal duty on the part of Fourway and that the Agency had failed to plead
or establish the existence of such a legal duty. Secondly he submitted that the
Agency had failed to establish the requirement of legal causation with
reference to the loss which formed the basis of its claim.

[7] As we know from the result, the court a quo dismissed all defences
relied on by Fourway, including those originally raised under what I
categorised as (b) and (c), as well as the two new ones advanced for the first
time in argument at the end of the trial. As to (b) and (c) the court found on the
evidence presented that the negligence of Fourway's employee was the
cause of the collision which necessitated both the decontamination process
and the closure of the road. With regard to the defence based on the concept
of pure economic loss, the court essentially held that the damage suffered by
the agency did not amount to pure economic loss and that the question
regarding the existence of a legal duty therefore did not arise. Finally the court
held that the damages claimed could not be classified as too remote and that
the requirement of legal causation had thus been satisfied.

[8] On appeal, it was conceded on behalf of Fourway that the court a quo
was correct in deciding the issues under (b) and (c) against it. In
consequence, the only issues on appeal turned on the contentions that were
raised for the first time in argument at the end of the trial. They can be
summarised thus:
(a)
Whether the court a quo correctly came to the conclusion that the
Agency's claim is not a claim for pure economic loss.
(b)
If not, how the issue of wrongfulness should have been dealt with in the
light of the fact that it was not pertinently raised in the pleadings.

(c)
Whether the court a quo correctly came to the conclusion that the
damages claim by the Agency cannot be regarded as too remote.

[9] The court a quo's finding that the damages claimed did not result from
pure economic loss clearly emanated from its understanding of that concept.
That understanding appears from the following statements in the judgment:
'The economic loss in this sense comprises patrimonial loss that does not result from a direct
invasion of a subjective right of the person who suffered the loss.'
And that
'the aforesaid rights of the plaintiff. . . [ie the Agency's statutory rights to operate a toll road
and to collect toll fees] were clearly subjective rights worthy of protection and which the
plaintiff could enforce against other people.'
And that
'[c]onsequently, the loss suffered by the plaintiff is not a so-called pure economic loss, but the
direct result of a direct infringement of subjective rights which was as such unlawful.'

[10] I do not share the court a quo's understanding of what is meant by
'pure economic loss' in the present context. I believe its meaning to be far less
metaphysical. As explained by Harms JA in Telematrix (Pty) Ltd v Advertising
Standards Authority SA 2006 (1) SA 461 (SCA) para 1, it means simply this:
'"Pure economic loss" in this context connotes loss that does not arise directly from damage
to the plaintiff's person or property but rather in consequence of the negligent act itself, such
as loss of profit, being put to extra expenses or the diminution in the value of property.'
(See also Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty)
Ltd 1985 (1) SA 475 (A) 497I-498H; Trustees, Two Oceans Aquarium Trust v
Kantey & Templer (Pty) Ltd 2006 (3) SA 138 (SCA) para 14; Wille's Principles
of South African Law 9 ed, (General editor: Francois du Bois) sv 'Delict' by
Daniel Visser, 1105; Neethling, Potgieter & Visser, Law of Delict, 5 ed 268 et
seq).

[11] Thus understood, the Agency's claim, in my view, falls squarely within
the ambit of pure economic loss. As formulated, its claim was for loss of
revenue in the form of toll fees resulting from the closure of the road. The
Agency did not allege, nor did it set out to prove in evidence, that it was the
owner of the road; that the road was physically damaged by the collision; or

that the closure of the road resulted from any physical damage to the road.
The Agency's argument on appeal, that in terms of s 7 of the Act it was in fact
the owner of the road on which the collision occurred, is of no consequence
and misses the point. For present purposes the question is not whether the
Agency is in fact the owner of the road. The point is that it did not rely on such
ownership to support its claim.

[12] Recognition that we are dealing with a claim for pure economic loss
brings in its wake a different approach to the element of wrongfulness. This
results from the principles which have been formulated by this court so many
times in the recent past that I believe they can by now be regarded as trite.
These principles proceed from the premise that negligent conduct which
manifests itself in the form of a positive act causing physical damage to the
property or person of another is prima facie wrongful. By contrast, negligent
causation of pure economic loss is not regarded as prima facie wrongful. Its
wrongfulness depends on the existence of a legal duty. The imposition of this
legal duty is a matter for judicial determination involving criteria of public or
legal policy consistent with constitutional norms. In the result, conduct causing
pure economic loss will only be regarded as wrongful and therefore actionable
if public or legal policy considerations require that such conduct, if negligent,
should attract legal liability for the resulting damages (see eg Minister of
Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) paras 12 and
22; Gouda Boerdery BK v Transnet 2005 (5) SA 490 (SCA) para 12;
Telematrix (supra) paras 13-14; Trustees, Two Oceans Aquarium Trust
(supra) paras 10-12).

[13] In this light, so Fourway contended on appeal, the Agency was obliged
to allege in its pleadings not only that the negligent conduct relied upon was
wrongful, but that it also had to allege and prove the facts relied upon to
substantiate the considerations of policy giving rise to a legal duty on the part
of Fourway's employee. As a result of the Agency's failure to adhere to these
rules of litigation, so the argument went, neither the policy considerations
relevant to the question of wrongfulness, nor the factual basis underlying such
policy considerations, were identified and investigated during the trial. In

consequence, so the argument concluded, it would be prejudiced if the issue
of wrongfulness were to be summarily disposed of at the appeal. Fourway
therefore suggested that, unless this court upholds its contention that the
damages claimed are too remote – to which I shall presently return – the
issue of wrongfulness should be postponed and decided with the rest of the
issues concerning the quantum of the Agency's damages, which are standing
over in any event.

[14] The proposition that a plaintiff claiming pure economic loss must allege
wrongfulness, and plead the facts relied upon to support that essential
allegation, is in principle well founded. In fact, the absence of such allegations
may render the particulars of claim exipiable on the basis that no cause of
action had been disclosed (see eg Trope v SA Reserve Bank 1992 (3) SA 208
(T) at 214A-G; Indac Electronics (Pty) Ltd v Volkskas Bank Ltd 1992 (1) SA
783 (A) 797E; Telematrix (supra) para 2). But, as we know, Fourway did not
file an exception. The trial proceeded without any objection on its part. In the
circumstances it would be futile to investigate whether an exception, if
properly and timeously taken, would have been successful. As I see it, the
question is rather whether, despite the lack of necessary allegations in the
Agency's pleadings, Fourway had sufficient opportunity to produce the facts it
would seek to rely on for the determination of the policy considerations
pertaining to wrongfulness in its favour. Conversely stated, the question is
whether Fourway has shown prejudice, in the sense that it would have
conducted its case in a materially different way if the Agency's claim for pure
economic loss had been properly pleaded. (See eg Shill v Milner 1937 AD
101 at 105; Robinson v Randfontein Estates GM Co Ltd 1925 AD 173 at 198;
Collen v Rietfontein Engineering Works 1948 (1) SA 413 (A) at 433; Stead v
Conradie 1995 (2) SA 111 (A) at 122A-H.)

[15] As I see it, the proposal by Fourway that the issue of wrongfulness be
referred back for determination by the trial court therefore depends on the
outcome of two discrete enquiries. First, can this court, on the basis of the
facts available, decide that, as a matter of policy, Fourway should be held
liable for the loss of revenue claimed by the Agency? If not, that would be the

end of the matter. The Agency would have failed to make out a case. A
decision on the other hand that the issue of wrongfulness should on the facts
available be determined in favour of the Agency will lead to the next enquiry.
The question is: can it be said that, if the issue of wrongfulness had been
properly pleaded by the Agency, Fourway would have conducted its case any
differently? If not, the Agency is entitled to succeed. It is therefore only a
finding of potential prejudice on the part of Fourway that can justify a referral
back to the trial court.

[16] The enquiry, whether as a matter of policy Fourway should be held
liable for the pure economic loss suffered by the Agency, raises a question
which is logically anterior: what are the considerations of policy that should be
taken into account for purposes of the enquiry? In accordance with what
criteria should the relevant considerations of policy be identified? Must we
accept that policy considerations are by their very nature incapable of pre-
determination and that the identification of the policy considerations that
should find application in a particular case are to be left to the discretion of the
individual judge? Does this mean that in the context of pure economic loss the
imposition of liability will depend on what every individual judge regards as fair
and reasonable? I believe the answer to the last two questions must be 'no'.
Liability cannot depend on the idiosyncratic views of an individual judge. That
would cloud the outcome of every case in uncertainty. In matters of contract,
for example, this court has turned its face against the notion that judges can
refuse to enforce a contractual provision purely on the basis that it offends
their personal sense of fairness and equity. Because, so it was said, that
notion will give rise to legal and commercial uncertainty (see eg Brisley v
Drosky 2002 (4) SA 1 (SCA) paras 21-25; South African Forestry Co Ltd v
York Timbers Ltd 2005 (3) SA 323 (SCA) para 27). I can see no reason why
the same principle should not apply with equal force in matters of delict. A
legal system in which the outcome of litigation cannot be predicted with some
measure of certainty would fail in its purpose. As pointed out by Lord Scott of
Foscote in Lagden v O'Conner [2004] 1 AC 1067 (HL) para 86:
'One of the main functions of the law of obligations, contractual or tortious, is to provide, or
attempt to provide, a set of yardsticks for determining whether a legal injury has been inflicted

on a person (the claimant) by another person (the defendant) and, if so, for determining the
amount of the damages that the defendant must pay by way of reparation. If the two parties
are unable to agree, an answer can be found by recourse to litigation. But the cost of
litigation, often excessive both in absolute terms and in relation to the amount in dispute, and
the inevitable delay, worry and anxiety that accompany court proceedings provide impelling
reasons why the yardsticks by means of which legal liability is to be measured should be kept
as simple and uncomplicated as practicable.'

[17] We therefore strive for certainty. The question is, how can that be
achieved in an area directed by considerations of public or legal policy? I
believe we must accept at the outset that absolute certainty is unattainable.
The moment this court took the first tier policy decision – in Administrateur,
Natal v Trust Bank van Afrika Bpk 1979 (3) SA 824 (A) – to abolish the
absolute exclusion of liability for pure economic loss, it abandoned the bright
line of absolute certainty. The second tier policy decision as to when liability
should be imposed must of necessity be accompanied by some degree of
uncertainty, at least at the early stages of development in this area of the law.
That much was recognised and predicted by Rumpff CJ in Administrateur,
Natal itself (see 831B). This measure of resulting uncertainty also seems to
be an experience shared by those jurisdictions where the same first tier policy
decision has been taken. Thus it was stated, for example, by Gaudron J in the
Australian High Court, in Perre v Apand (Pty) Ltd 1999 198 CLR 180 (HC of
A) para 25:
'The law as to liability for economic loss is a "comparatively new and developing area of the
law of negligence". It has not yet developed to a stage where there has been enunciated a
governing principle applicable in all cases. Perhaps it never will.'
And by McLachlin J in the Canadian Supreme Court in Canadian National
Railway Co v Norsk Pacific Steamship Co Ltd (1992) 91 DLR (4th) 289 at 366:
'Judges seem able to pick out deserving cases when they see them. The difficulty lies in
formulating a rule which explains why judges allow recovery of economic loss in some cases
and not in others.'
(Compare also K Zweigert & H Kötz An Introduction to Comparative Law 3 ed
625 et seq; B S Markesinis The German Law of Torts, A Comparative
Introduction 3 ed 42 et seq; Daniel Visser & Niall Whitty The Structure of the
Law of Delict in Kenneth Reid and Reinhard Zimmermann A History of Private
Law in Scotland Vol II Obligations 461 et seq.)

[18] What is more, it seems that in those jurisdictions where attempts have
been made to obtain certainty by formulating new bright line rules – in lieu of
the old rule excluding all liability for pure economic loss – there was little
success in achieving this goal. In England, for example, the first such attempt
was made in Anns v Merton London Borough Council [1978] AC 728 [HL].
Under the Anns test the court will find wrongfulness – or in English legal
parlance, the existence of a duty of care – if the harm was foreseeable and
there is no policy reason for negating liability. In a number of subsequent
judgments of the House of Lords, there was, however, a retreat from Anns
because of its expansionist tendencies. Eventually Anns was expressly
overruled in Murphy v Brentwood District Council [1991] 1 AC 438 (HL) at
457.

[19] Another attempt at a bright line rule is often referred to as 'the three-
stage test' which is attributed to a passage in the speech of Lord Bridge of
Harwich in Caparo Industries PLC v Dickman [1990] 2 AC 605 (HL) at 617-
618. (See eg D v East Berkshire Community Health NHS Trust [2005] 2 AC
373 (HL) para 2 where reference is made to 'the familiar test laid down in
Caparo'. See also Sutradhar v Natural Environment Research Council [2006]
4 All ER 490 (HL) para 32.) According to this test a plaintiff can establish
wrongfulness (in the South African sense) only when it can prove three things:
first, that the causing of damage was reasonably foreseeable; secondly, that a
relationship of 'proximity' or 'neighbourhood' existed between the parties;
thirdly, that in all the circumstances of the case, it is fair, just and reasonable
to impose liability on the defendant. Somewhat ironically, however, Lord
Bridge never claimed to create a bright line rule. He did not even profess to
formulate a 'test'. That, I think, is apparent from the very passage in his
speech usually relied upon in support of the 'three-stage test'. After Lord
Bridge referred to the ingredients of foreseeability, proximity and the situation
in which the court considers it fair, just and reasonable to impose liability, he
continued (at 618A-B):
'[T]he concepts of proximity and fairness . . .  are not susceptible of any precise definition as
would be necessary to give them utility as practical tests, but amount in effect to little more

than convenient labels to attach to features of different specific situations which . . . the law
recognises pragmatically as giving rise to a duty of care . . ..'
And in the same case Lord Oliver of Aylmerton said (at 633F):
'I think that it has to be recognised that to search for any single formula which will serve as a
general test of liability is to pursue a will-o'-the-wisp.'

[20] In some decisions of the House of Lords it is explicitly recognised that
the question whether the required relationship of proximity exists is dependent
on policy factors (see eg in Barrett v Enfield Borough Council [2001] 2 AC 550
(HL) at 559). And in Cooper v Hobart (2002) 206 DLR (4th) 193 para 37 the
Supreme Court of Canada also recognised that, whatever the test formulated,
the imposition of liability ultimately depends on 'residual policy considerations'.
Proceeding from this premise, academic authors have engaged in the
constructive exercise of identifying the relevant considerations of policy that
can find application in determining whether, in a particular case, the negligent
conduct of the defendant can sustain a claim for the plaintiff's pure economic
loss (see eg John Hartshorne 'Confusion, Contradiction and Chaos within the
House of Lords post Caparo v Dickman (2008) 16 Tort Law Review 8 et seq;
Jonathan Burchell 'The Odyssey of Pure Economic Loss' in T J Scott & Daniel
Visser Developing Delict – first published as Acta Juridica 2000 – 99 et seq).

[21] Does this mean we are back to the proposition that, in the field of pure
economic loss, liability depends on the idiosyncratic views of the individual
judge as to what is reasonable and fair? Fortunately, I think the answer must
again be 'no'. In the first instance some degree of certainty is established by
the identification of categories where liability will be imposed. In Telematrix
(para 15) one such category was recognised, by way of example, with
reference to the liability of collecting banks. Another example is to be found in
Perre v Apand (paras 28-30) where liability for the failure to provide accurate
information or advice – ie for negligent misstatements – was recognised as a
category of liability for pure economic loss in the context of Australian law.
(For the South African law on the topic of negligent misstatements, see eg
Kern Trust (Edms) Bpk v Hurter 1981 (3) SA 607 (C); Bayer South Africa (Pty)
Ltd v Frost 1991 (4) SA 559 (A) at 568B-D; OK Bazaars (1929) Ltd v Standard

Bank of South Africa Ltd 2002 (3) SA 688 (SCA) 695G-I.) I believe it can be
predicted with confidence that in time further categories will become
discernible and so the law will develop in an incremental way.

[22] Further insurance against uncertainty and unpredictability derives from
the principle which was formulated as follows by Nugent JA in Minister of
Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) para 21:
'When determining whether the law should recognise the existence of a legal duty in any
particular circumstances what is called for is not an intuitive reaction to a collection of arbitrary
factors but rather a balancing against one another of identifiable norms.'
(See also eg Telematrix paras 15-16). In a case like the present where the
claim for pure economic loss falls outside the ambit of any recognised
category of liability, the first step is therefore to identify the considerations of
policy that are of relevance. As part of the identification process assistance
can of course be gained from previous decisions, both at home and abroad,
as well as from the helpful analysis by academic authors such as those to
which I have already referred.

[23] The policy consideration that immediately comes to mind is directly
linked to the initial doubt as to whether pure economic loss should be
actionable at all. That reason was referred to by Rumpff CJ in Administrateur,
Natal v Trust Bank van Afrika Bpk (supra) – where this court eventually
decided to cut the Gordian knot – (at 833A) as 'die vrees van die sogenaamde
oewerlose aanspreeklikheid' (ie the fear of so-called boundless liability). In the
light of this fear the relevant consideration is succinctly stated as follows by
Gaudron J in Perre v Arpand (supra) para 32:
'The first policy consideration is the law's concern to avoid the imposition of liability in an
indeterminate amount for an indeterminate time to an indeterminate class.'
(See also eg Canadian National Railway Co v Norsk Pacific Steamship Co
(1992) 91 DLR (4th) 289 at 359; M M Corbett 'The Role of Policy in the
Evolution of our Common Law' 1987 SALJ 52 at 59.)

[24] From this consideration it follows, in my view, that liability will more
readily be imposed for a single loss of a single identifiable plaintiff occurring

but once and which is unlikely to bring in its train a multiplicity of actions. That
is the reason why liability was imposed, for example, in Coronation Brick (Pty)
Ltd v Strachan Construction Co (Pty) Ltd 1982 (4) SA 371 (D) 386D-H and not
in Shell and BP South African Petroleum Refineries (Pty) Ltd v Osborne
Panama SA 1980 (3) SA 653 (D) at 659G-H. The present case self-evidently
falls in the same class as Coronation Brick and not in the class of Shell and
BP. The loss claimed was suffered by a single plaintiff and is finite in its
extent. To illustrate the point: the position could very well be different if the
plaintiff was a businessman who claimed for the loss he suffered because of a
missed flight to London, being the loss of a lucrative business opportunity,
owing to the closure of the road.

[25] But the absence of indeterminate liability itself will not automatically
give rise to the imposition of liability. That much was expressly held in
Trustees, Two Oceans Aquarium Trust para 20. The reason why this court
refused to come to the aid of the plaintiff in that case, despite the absence of
indeterminate liability, was that the plaintiff was in a position to avoid the risk
of the loss claimed by contractual means (see para 24). Conversely, the
plaintiff's inability to protect itself by contract was one of the policy reasons
why this court decided in Indac Electronics (Pty) Ltd v Volkskas Bank Ltd
1992 (1) SA 783 (A) at 799H-J to impose liability on a collecting bank. Support
for the same consideration is to be found in Australian cases where delictual
liability was extended to plaintiffs who were said to be 'vulnerable to risk'
because they were unable to protect themselves against the risk of the
particular loss by other means (see eg Woolcock Street Investments (Pty) Ltd
v CDG (Pty) Ltd (formerly Cardno & Davies Australia (Pty) Ltd) [2004] HCA 16
(para 80); Perre v Apand (supra) para 11 (Gleeson CJ) and para 50
(McHugh J). In the present case the Agency can, in my view, be said to be
'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.

[26] Another policy reason why the extension of delictual liability is
sometimes refused is that it would impose an additional burden on the

defendant which would be unwarranted or which would constitute an
unjustified limitation of the defendant's activities (see eg Minister of Law and
Order v Kadir 1995 (1) SA 303 (A) at 321C-J; Steenkamp NO v Provincial
Tender Board, Eastern Cape 2006 (3) SA 151 (SCA) paras 37-40; Road
Accident Fund v Shabangu 2005 (1) SA 265 (SCA) para 18; X (Minors) v
Bedfordshire County Council; [1995] 2 AC 633 (HL) at 750). The converse of
this consideration appears from the statement by McHugh J in Perre v Apand
(supra) para 50 that the imposition of liability would not 'unreasonably interfere
with Apand's commercial freedom because it was already under a duty to [a
third party] to take reasonable care'. That, I believe, is also the position in this
case. Fourway's driver was already under an obligation towards other users of
the road to drive with reasonable care. Imposing liability on him – and his
employer – for economic loss resulting from his negligent driving would thus
not foist any additional burden upon him at all.

[27] The only policy consideration relied upon by Fourway as to why it
should not be saddled with the Agency's loss was that it would be more
appropriate to spread the burden by increasing toll fees in order to
accommodate losses of this kind. I do not agree with this argument. On the
contrary, I can see no reason why innocent users of the toll road should
effectively be held responsible for the negligent conduct of Fourway's
employee. The fact that the loss would be spread more widely may alleviate
the burden imposed upon the individual innocent motorist, but it does not
detract from the principle that it would be a choice to the prejudice of the
innocent in favour of the negligent driver.

[28] During argument the issue was raised as to the relevance of the
consideration that Fourway's employee was transporting chrysolite asbestos
which can, by all accounts, be described as dangerous cargo. Is this another
policy consideration for imposing liability on Fourway for the Agency's loss, or
not? My view is that it is not. As I see it, it would make no difference in
principle in the determination of wrongfulness whether the cargo consisted of
asbestos or of an innocuous substance like sand. I have given the policy
reasons why Fourway should, in my view, be held liable. I cannot see that it

would have any effect on any of them if the cargo was not asbestos, but sand.
If the Agency lost revenue because the toll road had to be closed in
consequence of the negligence of Fourway's employee, Fourway should, in
my view, in principle be liable, whether the closure was necessitated by the
spillage of asbestos, sand or cement. Where the dangerous nature of the
cargo could have a bearing is on the issue of foreseeability of damage. I think
it is more readily foreseeable that the closure of the toll road will be
necessitated by a spillage of asbestos than a spillage of sand. But by the
same token I believe that the issue of foreseeability should more appropriately
be considered under the rubric of legal causation and not as part of
determining wrongfulness.

[29] Now that I have decided the issue of wrongfulness in favour of the
Agency, the further question arises as to whether it can be said that Fourway
had been prejudiced by the Agency's failure to specifically raise the issue of
wrongfulness in its particulars of claim. I think not. The policy considerations
that should, in my view, be taken into account all appear from the allegations
in the pleadings supported by the evidence which was led at the trial. In
argument, counsel for Fourway could not think of a single policy consideration
in favour of their client that could have been supported by evidence led on its
behalf if the Agency had specifically referred to the issue of wrongfulness in
its pleadings. In short, despite an express invitation to that effect, counsel for
Fourway were unable to submit that their client's case would have been
presented any differently if the Agency's pleadings were in perfect order.

[30] That brings me to causation. In this regard it has by now become well-
settled that, in the law of delict, causation involves two distinct enquiries. First,
there is the enquiry into factual causation which is generally conducted by
applying the 'but-for' test, as described by Corbett CJ in International Shipping
Co (Pty) Ltd v Bentley 1990 (1) SA 680 (A) at 700E-G. The facts that are
common cause on appeal leave no doubt that, but for the collision caused by
the negligence of Fourway's driver, the Agency would not have suffered the
loss. Factual causation is therefore not in issue. The dispute turns on the
second enquiry, under the rubric of causation, namely whether the negligent

conduct of Fourway's driver is linked sufficiently closely or directly to the loss
suffered by the Agency for legal liability to ensue, or whether the loss is too
remote. This issue is referred to by some as remoteness of damage and by
others as legal causation.

[31] In the final analysis, the issue of remoteness is again determined by
considerations of policy. Broadly speaking, wrongfulness – in the case of
omissions and pure economic loss – on the one hand, and remoteness on the
other, perform the same function. They are both measures of control. They
both serve as a 'longstop' where most right-minded people, including judges,
will regard the imposition of liability in a particular case as untenable, despite
the presence of all other elements of delictual liability.

[32] Since wrongfulness – in the context of omissions and pure economic
loss – and remoteness are both determined by considerations of policy, a
certain degree of overlapping is inevitable. However, wrongfulness and
remoteness are not the same. They involve two different enquiries in respect
of two different elements of delict, each with its own characteristics and
content (see eg LAWSA, 2ed Vol 8 (1) sv 'Delict' by J R Midgley and JC van
der Walt, para 132). Even where negligent conduct resulting in pure economic
loss is for reasons of policy found to be wrongful, the loss may therefore, for
other reasons of policy, be found to be too remote and therefore not
recoverable. An example of a case where this happened is to be found in a
decision of this court in International Shipping Co (Pty) Ltd v Bentley (supra).

[33] The question therefore remains: is the loss claimed by the Agency too
remote? With regard to this question it has been held that the test in our law
for determining remoteness is a flexible one (see eg International Shipping Co
(Pty) Ltd v Bentley (supra) 701A-F; Smit v Abrahams 1994 (4) SA 1 (A) at
15E-G; OK Bazaars (1929) Ltd v Standard Bank of South Africa Ltd (supra)
para 23). According to the 'flexible' test, (also referred to as the 'supple' test),
so Fourway submitted, remoteness is determined by considerations of
reasonableness, fairness and justice. As support for this submission it sought
to rely on the judgment of Botha JA in Smit v Abrahams (supra) at 14F-15G. I

do not agree with this submission and I do not believe it derives support from
what Botha JA said. Considerations of fairness and equity must inevitably
depend on the view of the individual judge. In considering the appropriate
approach to wrongfulness, I said that any yardstick which renders the
outcome of a dispute dependent on the idiosyncratic view of individual judges
is unacceptable. The same principle must, in my view, apply with reference to
remoteness. That is why I believe we should resist the temptation of a
response that remoteness depends on what the judge regards as fair,
reasonable and just in all the circumstances of that particular case. Though it
presents itself as a criterion of general validity, it is, in reality, no criterion at
all. In essence I agree with the following statement by McHugh J in Perre v
Arpand (supra) para 80:
'But attractive as concepts of fairness and justice may be in appellate courts, in law reform
commissions, in the academy and among legislators, in many cases they are of little use, if
they are of any use at all, to the practitioners and trial judges who must apply the law to
concrete facts arising from real life activities.'

[34] As to the dicta of Botha JA in Smit v Abrahams (supra) it is apparent
that they are founded largely on the judgment of Van Heerden JA in S v
Mokgethi 1990 (1) SA 32 (A) at 40I-41D. What Van Heerden JA said in that
case is not that the 'flexible' or 'supple' test supersedes all other tests such as
foreseeability, proximity or direct consequences, which were suggested and
applied in the past, but merely that none of these tests can be used
exclusively and dogmatically as a measure of limitation in all types of factual
situations. Stated somewhat differently: the existing criteria of foreseeability,
directness, et cetera, should not be applied dogmatically, but in a flexible
manner so as to avoid a result which is so unfair or unjust that it is regarded
as untenable. If the foreseeability test, for example, leads to a result which will
be acceptable to most right-minded people, that is the end of the matter (see
eg LAWSA (supra) para 132).

[35] In this case it can, in my view, be accepted with confidence that any of
the various criteria will lead to the conclusion that the loss suffered by the
Agency is not too remote. If, for example, the direct consequences criterion is

applied, it is clear that the loss followed directly from the wrongful and
negligent conduct of Fourway's driver; there was no so-called novus actus
interveniens that broke the chain of events. If, on the other hand, one applies
the foreseeability test, it was in my view reasonably foreseeable that a
collision could cause spillage and that, because of the dangerous nature of
the cargo, spillage could result in the closure of the toll road which could lead
to a revenue loss by the Agency. What is more, I do not find the conclusion
that Fourway should be held liable for the loss in any way untenable.
Consequently, considerations of fairness and equity do not arise. In any
event, the only consideration of fairness advanced by Fourway was that it
would be fairer to spread the loss amongst users of the toll road by way of an
increase in toll fees. As I have indicated earlier under the heading of
wrongfulness, I cannot see the fairness of this proposal at all.

[36] For these reasons the appeal is dismissed with costs, including the
costs of two counsel.

……………………..
F D J BRAND
JUDGE OF APPEAL

APPEARANCES:

FOR APPELLANT:
J H DREYER SC

J A DU PLESSIS

INSTRUCTED BY:
MACGREGOR STANFORD KRUGER INC,
PRETORIA

CORRESPONDENTS:
E G COOPER ATTORNEYS, BLOEMFONTEIN

FOR RESPONDENT:
A C FERREIRA SC

I ELLIS

INSTRUCTED BY:
FRIEDLAND HART INC, PRETORIA

CORRESPONDENTS:
ISRAEL SACKSTEIN MATSEPES INC,
BLOEMFONTEIN

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
26 November 2005
Status:
Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal

RE:

FOURWAY HAULAGE SA (PTY) LTD

APPELLANT
and
SA NATIONAL ROADS AGENCY LTD

RESPONDENT

On 26 November 2008 the Supreme Court of Appeal dismissed the appeal of
Fourway Haulage SA (Pty) Ltd ('Fourway') against the judgment of the Pretoria High
Court in favour of the SA National Road Agency Ltd ('the Agency'). Fourway is a
long distance haulier. The Agency is the entity authorised by statute to levy and
collect toll fees on toll roads.

The dispute between the parties which gave rise to the appeal originates from an
accident which occurred on 26 September 2003 on the N1 between Polokwane and
Mokopane in the Limpopo province. The two vehicles involved were an articulated
truck and a light delivery van. The articulated truck was driven at the time by an
employee of Fourway who was acting in the course and scope of his employment.

The articulated truck was on its way from an asbestos mine in Zimbabwe to the
Durban harbour and carried about 34 tonnes of chrysolite asbestos, destined for
export. As a result of the collision, the truck overturned and spilled its cargo onto a
portion of the national road and its surroundings. Because of the hazardous nature
of the asbestos powder, the spillage required an extensive cleaning-up operation of
the polluted area. To facilitate the cleaning-up process, the traffic authorities closed
the section of the national road involved and diverted the traffic in both directions
onto an alternative road. This lasted for about 24 hours. The section of the national
road which was closed forms part of a toll road. The alternative route was not
subject to toll. As a result of the closure, two toll plazas could not collect toll fees.
Based on these facts, the agency instituted an action against Fourway for the
damages it allegedly suffered in the form of loss of toll revenue.

In the Pretoria High Court Fourway was held liable in principle for the damages.

On appeal it was not in dispute that the collision had been caused by the negligence
of Fourway's driver or that it necessitated the closure of the toll road which in turn
caused the Agency to suffer a loss in toll income. In consequence the dispute turned
on the enquiry whether as a matter of legal policy, liability should be imposed on
Fourway for the Agency's so-called pure economic loss, ie loss not resulting from
physical damage to its property.

Underlying to the dispute was the principle of our law that, unlike damages arising
from physical damage to the plaintiff's property or person, so-called pure economic
loss does not normally attract liability. The reason for the reluctance to extend
liability to the latter kind of loss is essentially to be found in the fear of indeterminate
liability. What gives rise to this fear can, in the present context, be illustrated by the
example of a businessman who wishes to claim damages suffered because he
missed a flight to London with the resulting loss of a lucrative business opportunity,
owing to the closure of the road.

In this case, however, so the Supreme Court of Appeal found, there was no prospect
of indeterminate liability. The loss claimed was suffered by a single plaintiff and is
finite in its extent.

Other policy considerations in favour of imposing liability on Fourway, so the SCA
held, were that:
a)
The Agency could not readily protect itself against the risk of such loss by
concluding a contract with every user of the toll road.
b)
The extension of liability for the Agency's loss would not impose an additional
burden on the driver of Fourway – for whose negligence it was held responsible – in
that the driver was already under an obligation towards other users of the road to
drive with reasonable care.
c)
If toll fees were to be increased in order to accommodate losses of this kind, it
would mean that innocent users of the toll road would effectively be held responsible
for the negligent conduct of Fourway's employee.

That, in short, is why the SCA agreed with the High Court's decision to hold Fourway
liable for the Agency's loss.