WRONGFULNESS AND LEGAL CAUSATION AS SEPARATE ELEMENTS OF A DELICT

889
disregard some of the most fundamental principles of the law of contract, the
consequences for those who rely on the sanctity of contracts to conduct their day to
day business can be equally catastrophic. Far from providing clarity on the question
of contractual liability where a security service provider had apparently failed to
protect its client, the judgments in the Loureiro case both in the court a quo and the
supreme court of appeal have muddied the water. It is unfortunate that the courts
got caught up in the facts that appeared identical for the various claims and failed to
recognise that the case involved different claims that were fundamentally different
– a claim for breach of contract on the one hand, and claims in delict on the other.
As a result the two distinct causes of action were confused and delictual principles
were applied in deciding the contractual claim. At least in so far as the claim for
breach of contract is concerned, what should have been a simple question of whether
a party to a contract had failed to fulfil its obligations and had thereby caused loss
to the other party became an in-depth analysis of the conduct of a third party who
was not privy to the contract.
In the end, the constitutional court, as the guardian of human rights, also turned
out to be the guardian of the law of contract and effectively the guardian of the
guardians. By allowing the appeal from the supreme court of appeal the constitutional
court kept a watchful eye on the supreme court of appeal to ensure that the law was
applied correctly and fairly and that no ulterior factors influenced the outcome of the
case. By recognising that the case involved different claims that were fundamentally
different and dealing with the various claims as distinct actions, the constitutional
court did not get caught up in the facts that appeared identical for the various claims,
but stayed true to the fundamental principles of the law of contract. In the end, the
constitutional court provided much-needed clarity on the question of contractual
liability where a security service provider fails to protect its client and prevented
a flawed judgment of the supreme court of appeal from setting some dangerous
precedents. And because of that, we can all sleep a little better at night.

STEVE CORNELIUS
University of Pretoria

WRONGFULNESS AND LEGAL CAUSATION AS SEPARATE ELEMENTS

OF A DELICT: CONFUSION REIGNS

eBotswana (Pty) Ltd v Sentech (Pty) Ltd 2013 6 SA 327 (GSJ)

Cape Empowerment Trust Limited v Fisher Hoffman Sithole 2013 5 SA 183 (SCA)

1 Introduction
A delict is a complex juristic fact which is traditionally divided into a number of
different elements: the act, wrongfulness, fault, causation and damage (see Neethling
and Potgieter Neethling-Potgieter-Visser Law of Delict (2010) 4; Telematrix (Pty)
Ltd t/a Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 1 SA
461 (SCA) 468; Van Eeden v Minister of Safety and Security (Women’s Legal Centre

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Trust, as amicus curiae) 2003 1 SA 389 (SCA) 395; Truter v Deysel 2006 4 SA 168
(SCA) 174; Mntambo v Road Accident Fund 2008 1 SA 313 (W) 318; First National
Bank of South Africa Ltd v Duvenhage 2006 5 SA 319 (SCA) 320-321; Black v Joffe
2007 3 SA 171 (C) 183; McCarthy Ltd t/a Budget Rent A Car v Sunset Beach Trading
300 CC t/a Harvey World Travel 2012 6 SA 551 (GNP) 556 559; Road Accident Fund
v Krawa 2012 2 SA 346 (ECG) 363). These elements should be clearly distinguished
as far as is realistic and possible, since their classification is based on considerations
of fairness, efficacy and logic, which should not be dis­regarded lightly. If, for
example, a component of wrongfulness is dragged into legal causation without due
consideration, one could be caught up in a confusing net of ideas (see Potgieter and
Van Rensburg “Die toerekening van gevolge aan ’n delikspleger” 1977 THRHR 379
382). This danger applies particularly to wrongfulness and legal causation and has
been brought to the fore in the two cases under discussion.
In essence, wrongfulness lies in the infringement of a legally protected interest
(or an interest worthy of protection) in a legally unacceptable way (see Neethling
and Potgieter 33; Van der Walt and Midgley Principles of Delict (2005) 70; Premier,
Western Cape v Faircape Property Developers (Pty) Ltd 2003 6 SA 13 (SCA) 31-32;
cf also Loubser and Midgley (eds) The Law of Delict in South Africa (2012) 140;
Millner Negligence in Modern Law (1967) 24 ff 26; Fleming The Law of Torts
(1971) 139 (Fleming was cited inter alia in Lillicrap, Wassenaar and Partners v
Pilkington Brothers (SA) (Pty) Ltd 1985 1 SA 475 (A) 498-499, Administrateur, Natal
v Trust Bank van Afrika Bpk 1979 3 SA 824 (A) 833-834, Knop v Johannesburg City
Council 1995 2 SA 1 (A) 27 and the eBotswana case 340, while Millner was cited
in eg the Trust Bank case 833 and the Knop case 27).) (The European Group on Tort
Law Principles of European Tort Law: Text and Commentary (2005) 29 ff 75 ff
also submits that “wrongfulness” is established with reference to the infringement
of protected interests and the violation of the required standard of conduct, namely
that of the reasonable person in the circumstances (a 2:102, read with a 4:102 of the
principles.) The assessment of whether an interest is worthy of protection as well as
whether the infringement thereof is legally unacceptable is determined by the legal
convictions of the community or the boni mores criterion (see as to the former, eg
Paixão v Road Accident Fund 2012 6 SA 377 (SCA) 381 385). This approach was
recently confirmed by the constitutional court in Lee v Minister for Correctional
Services (2013 2 SA 144 (CC) 167; see also eg the eBotswana case 339; Neethling
and Potgieter 36 ff):
“In [Minister van Polisie v] Ewels [1975 3 SA 590 (A) 597] it was held that our law had reached the
stage of development where an omission is regarded as unlawful conduct when the circumstances of
the case are of such a nature that the legal convictions of the community demand that the omission
should be considered wrongful. This open-ended general criterion has since evolved into the general
criterion for establishing wrongfulness in all cases, not only omission cases. The imposition of
wrongfulness under this enquiry is determined with reference to considerations of public and legal
policy, consistent with constitutional norms.”

On the other hand, legal causation determines for which harmful consequences
caused by the wrongdoer’s wrongful, culpable act he should be liable – in other
words, which consequences should be imputed to him. The wrongdoer is not liable
for harm which is “too remote”, hence the term “remoteness of damage” for legal
causation (see eg Tuck v Commissioner for Inland Revenue 1988 3 SA 819 (A) 832-
833; Fourway Haulage SA (Pty) Ltd v SA National Roads Agency Ltd 2009 2 SA
150 (SCA) 163-164; International Shipping Co (Pty) Ltd v Bentley 1990 1 SA 680
(A) 700-702; Road Accident Fund v Sauls 2002 2 SA 55 (SCA) 61; OK Bazaars

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(1929) Ltd v Standard Bank of South Africa Ltd 2002 3 SA 688 (SCA) 697 699; S v
Mokgethi 1990 1 SA 32 (A) 39 ff; Smit v Abrahams 1994 4 SA 1 (A) 14 ff; Standard
Chartered Bank of Canada v Nedperm Bank Ltd 1994 4 SA 747 (A) 763 ff; Napier v
Collett 1995 3 SA 140 (A) 143 ff; Siman and Co (Pty) Ltd v Barclays National Bank
Ltd 1984 2 SA 888 (A) 914; see also Neethling and Potgieter 187 ff; Loubser and
Midgley 89 ff). To ascertain whether legal causation is present, a flexible approach
is followed. The basic question is whether there is a close enough relationship
between the wrongdoer’s conduct and its consequence for such consequence to be
imputed to the wrongdoer in view of policy considerations based on reasonableness,
fairness and justice. However, the existing criteria for legal causation (such as
direct consequences and reasonable foreseeability) may play a subsidiary role in
determining legal causation within the framework of this elastic approach (see
the Mokgethi case 40-41 and the cases referred to above; see also Neethling and
Potgieter 190-193; Loubser and Midgley 91-94).
From this it appears that the nature and function of legal causation are
fundamentally different from that of wrongfulness, and that one should be careful
not to confuse these two delictual elements despite the fact that, as will be apparent
from the discussion of the two cases below, some of the factors which may co-
determine wrongfulness, such as foreseeability, may also be relevant in establishing
legal causation. Nevertheless, the different functions of these two elements should
not be disregarded.
Against this background, the eBotswana and Cape Empowerment Trust cases
will be discussed.

2 The eBotswana case

In this case Sentech, which inter alia provides satellite transmission by which a
broadcaster’s content is transmitted to a viewer’s satellite dish and thence to the
viewer’s decoder and television, used a satellite which spilt encrypted signals into
the most populated area of Botswana. This allowed viewers there, by lawfully
buying cheap decoders coupled to a dish, to decrypt the signals and consequently to
view the content carried by Sentech for the South African Broadcasting Corporation
(SABC). However, the SABC had no licence to broadcast in Botswana, and Sentech
had no right to make satellite transmissions into that country. There were three
licensed broadcasters in Botswana, amongst others eBotswana, which was free.
eBotswana launched motion proceedings with regard to Sentech’s failure to prevent
pirate viewing based on the actio legis Aquiliae. It alleged that Sentech had a duty
to take all reasonable steps necessary to prevent pirate viewing in Botswana of the
SABC1, SABC2 and SABC3 signals carried on its satellite platform. eBotswana
claimed that it was entitled to declaratory orders that Sentech’s failure to take the
necessary steps to prevent the pirate viewing was unlawful and in breach of the duty
allegedly owed to eBotswana, and which rendered Sentech liable to it for damages.
The losses were alleged to be caused by the SABC’s free channels drawing viewers
away from eBotswana’s free channels. This decline in viewers equated to a loss in
revenue where viewership figures determined advertising revenue.
Since each element of the Aquilian action had been put in issue by Sentech, in
order to succeed the applicant had to satisfy the court on motion that the alleged
omission was wrongful, that Sentech was at fault and that its negligent conduct
factually and legally caused the damage (332B-338A).
Spilg J dealt with these delictual elements seriatim (338I-342B). As regards
wrongful conduct in the case of an omission and the causing of pure economic

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 892 NEETHLING AND POTGIETER

loss (as in the present case), he stated that there must be a duty of care owed in the
circumstances, and whether such a duty arises is determined by the boni mores of
society, which are also informed by the bill of rights. The following factors may
influence the boni mores of our society in casu: our relationship with fellow nation
states whose territorial sovereignty we respect; both the actual harm and the manner
in which it occurred must be foreseeable, that is, it must not be too remote; “the hand
of history, our ideas of morals and justice, the convenience of administering the rule
and our social ideas as to where the loss should fall” (the Lillicrap case 498-499, citing
Fleming 139); general considerations of reasonableness based on the convictions
of the community as determined by the court; Sentech’s declared willingness to
remedy the problem, while fully aware of the alleged cost implications, indicated
a recognition of some responsibility to do so; Sentech’s general responsibility to
provide secure encryption of its signals, which it accepted as part of its manifesto;
South Africa’s international obligations in respect of satellite broadcasting and the
prevention of its reception in another country; Sentech’s creation of the situation
where its signals went beyond our national borders; Sentech’s acknowledgement of
the reality of hacking into an encrypted system as a risk of inadequate encryption;
the fact that Sentech had already planned to provide a more secure encryption
system; and the fact that the class of potential claimants was small. In view of all
these factors, Spilg J concluded that Sentech owed it to persons in the position
of eBotswana that hold valid television broadcast licences in Botswana to secure
the encryption of the SABC television signals. Accordingly, its failure to do so,
knowing that large numbers of cheap decoders have been able to receive the signals
in viewable form, was wrongful.
As to fault, Spilg J, applying the test of a reasonable person exercising the
general level of skill and diligence required of someone engaged with Sentech’s
responsibilities, held that Sentech had been negligent. A reasonable person in the
position of Sentech would have foreseen that the signal broadcast into Botswana
would be decrypted by means of decoders, causing the resultant harm to the
broadcaster in Botswana, and the reasonable person would have taken steps to limit
the area of transmission within the borders of South Africa or to otherwise prevent
the signal from being decoded within the borders of Botswana (342C-343D).
Spilg J held that factual and legal causation had also been established. In the
latter regard, the purchase of a cheap decoder that could enable a viewer to watch a
decrypted transmission did not constitute a novus actus interveniens, because such
conduct was anticipated and therefore foreseeable (343D-F).
As far as damage was concerned, the court held that it was axiomatic that loss
of advertising revenue would arise given the broadcasters’ dependency on such
revenue, which is affected by viewership figures, whether pursuant to dedicated
market research or assumed (343G-I).
In conclusion, Spilg J declared that Sentech was liable in delict, directed Sentech to
take all reasonable steps necessary to ensure that viewers in Botswana are prevented
from private viewing of the SABC channels concerned, and declared Sentech to be
liable to eBotswana for the damage suffered. With regard to the quantification of
damages for the loss, Spilg J, with reference to Cadac (Pty) Ltd v Weber-Stephen
Products Co (2011 3 SA 570 (SCA) par 10-15), ordered that an inquiry into damages
should be conducted.
Whilst we agree with the outcome of the decision, the following comments are
apposite. It is heartening that the court applied the boni mores as the basic test
for wrongfulness without referring to the controversial new formulation of the
test for wrongfulness as the reasonableness of holding the defendant liable (see in

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the latter regard Neethling and Potgieter 78-81; see also infra). Further, as regards
wrongfulness, Spilg J stated as follows:
“If that is so then wrongfulness, as one of the requirements of delictual liability, is established
provided that it is not too remote. But see Boberg The Law of Delict (vol 1) at 104-5, 276, 381-2 and
447-8. See also Sea Harvest [Corporation (Pty) Ltd v Duncan Dock Cold Storage (Pty) Ltd 2000 1
SA 827 (SCA)] at 839D-E. The present methodology adopted places ‘remoteness’ as an element of
legal causation. Boberg’s approach appears the more cautious overall and is effectively adopted in
cases such as Indac Electronics (Pty) Ltd v Volkskas Bank Ltd 1992 (1) SA 783 (A) (at 798D) and
Fourway (at para 24). In the present case both formulations will yield the same result but I would
prefer to consider it under the question of wrongfulness in the sense of foreseeability of both the
actual harm and of the manner in which it occurred. The issue of culpability will still involve
(see Boberg at 381) an enquiry into whether Sentech ought to have foreseen harm of the kind that
actually occurred to eBotswana” (340C-E).

First of all, Spilg J’s use of the term “too remote” in connection with wrongfulness
is problematic. As he stated, the present methodology rather places “remoteness”
as an element of legal causation (see Neethling and Potgieter 188). However,
the policy consideration to which both the Indac Electronics case (798) and the
Fourway Haulage case (161-162) referred, namely that where a situation could lead
to indeterminate liability or is one fraught with an overwhelming potential liability
the plaintiff does not have a legal duty to prevent the pure economic loss, is part
and parcel of the element of wrongfulness (see Neethling and Potgieter 295) and is
thus in line with Spilg J’s preference to consider remoteness under wrongfulness. In
contradistinction, Van Aswegen (“Policy considerations in the law of delict” 1993
THRHR 171 192-193) convincingly argues that the present factor is not relevant
with regard to wrongfulness, but should rather be utilised in connection with legal
causation which is directly concerned with the extent of liability.
Spilg J’s preference for considering foreseeability of both the actual harm and the
manner in which it occurred under wrongfulness must also receive attention, since,
notwithstanding opposing views, quite a number of cases support this approach
(see eg Hirschowitz Flionis v Bartlett 2006 3 SA 575 (SCA) 589; the Telematrix
case 468; Steenkamp NO v Provincial Tender Board, Eastern Cape 2006 3 SA 151
(SCA) 159-160; Gouda Boerdery BK v Transnet 2005 5 SA 490 (SCA) 498-499; cf
Minister of Safety and Security v Carmichele 2004 3 SA 305 (SCA) 324; see also
Neethling and Potgieter 38 294). In contradistinction, as was emphasised in the
Trust Bank case 833E, citing Millner 26, the “duty issue” (ie wrongfulness) “is not
at all concerned with reasonable foresight; it is to do with the range of interests
which the law sees fit to protect against negligent violation” (see also the Knop
case 27; Saaiman v Minister of Safety and Security 2003 3 SA 496 (O) 504-505). In
similar vein, Fleming (139), to which Spilg J referred (340F), stated that “[i]n short,
recognition of a duty of care is the outcome of a value judgment that the plaintiff’s
invaded interest is deemed worthy of legal protection against negligent interference
by conduct of the kind alleged against the defendant”. Be that as it may, since it
is generally accepted by our courts as well as in English law (see eg Lunney and
Oliphant Tort Law: Text and Materials (2000) 100-113) that reasonable foresight
may play a role in ascertaining the existence of a legal duty, it is necessary to spell
out exactly what the role of foreseeability with regard to wrongfulness is or should
be. Harms JA explained the role of foreseeability in the context of wrongfulness as
follows in the Steenkamp case:
“The role of foreseeability in the context of wrongfulness must be seen in its correct perspective.
It might, depending on the circumstances, be a factor that can be taken into account but it is not a

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requirement of wrongfulness and it can never be decisive of the issue. Otherwise there would not
have been any reason to distinguish between wrongfulness and negligence and since foreseeability
also plays a role in determining legal causation, it would lead to the temptation to make liability
dependent on the foreseeability of harm without anything more, which would be undesirable”
(160A-B).

In similar vein, Loubser and Midgley (151) conclude that foreseeability can be part
of both wrongfulness and negligence. While it is a factor that can be considered in
the wrongfulness enquiry, it is one of two core factors to consider in determining
negligence (the other being preventability). Foreseeability of harm is thus a
requirement for negligence, but although it may add weight to the wrongfulness
decision, it may not be decisive in the latter regard, since other factors may override
it. Van der Walt and Midgley (81-82) add that the criterion of reasonable foresight
for the determination of the existence of a duty in the context of wrongfulness is
in reality used as a device to control the range of liability, which is more often than
not founded on considerations of reason and policy. In this regard, the foreseeability
test is concerned with the question of whether, in the particular circumstances, the
interest of the plaintiff is in principle entitled to legal protection (cf also Loubser and
Midgley 148-151).
In light of the foregoing it should be emphasised that although foreseeability
may be a factor in determining wrongfulness, care should be taken not to elevate
it to the determining factor for wrongfulness, since this will confuse wrongfulness
with negligence and “lead to the absorption of the English law tort of negligence
into our law, thereby distorting it” (see the Telematrix case 468). An example of
such an unfortunate application of foreseeability is the judgment of the appeal
court in Government of the Republic of South Africa v Basdeo (1996 1 SA 355
(A) (see Neethling “Onregmatigheid, nalatigheid; regsplig, ‘duty of care’; en die rol
van redelike voorsienbaarheid – praat die appèlhof uit twee monde?” 1996 THRHR
682 ff).
Thus far our remarks have focused on the role of foreseeability with regard to
wrongfulness and negligence. It is also necessary to discuss the role of foreseeability
in the context of legal causation. Since the introduction of the flexible test for legal
causation (see par 1 above), two viewpoints on the role of foreseeability have
emerged. First, foreseeability may play a subsidiary (but not necessarily a decisive)
role in determining legal causation within the framework of the flexible test; the
flexible test, which is based on considerations of policy, reasonableness and fairness,
remains the dominant test (see eg the Mokgethi case 40-41; Smit v Abrahams 18;
Neethling and Potgieter 192 n 106). Second, foreseeability does not merely play
a subsidiary role but remains an independent test which should not be applied
dogmatically but in a flexible manner. According to this approach, the flexible test
is not an independent criterion that can be applied in the absence of traditional
criteria such as foreseeability and direct consequences (the Fourway Haulage case
164-165; Freddy Hirsch Group (Pty) Ltd v Chickenland (Pty) Ltd 2011 4 SA 276
(SCA) 297-298; but see the discussion of the Cape Empowerment Trust case 198A-B
below; for criticism of the latter approach, see Neethling and Potgieter 192 n 106;
Potgieter “Verkeer die soepel maatstaf vir juridiese kousaliteit in gevaar?” 2010
Obiter 746 ff; Neethling “Suiwer ekonomiese verlies: onregmatigheid en juridiese
kousaliteit onder die soeklig” 2010 TSAR 169 173-175). Whichever approach is
followed, it is clear that as in the case of wrongfulness, foreseeability is a factor to
be taken into account when ascertaining legal causation. Seen in this light, Brand
JA’s remark in the Fourway Haulage case (163) that “the issue of foreseeability

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should more appropriately be considered under the rubric of legal causation and not
as part of determining wrongfulness” should probably be approached with caution.
This applies even more in light of his emphatic statement in the Cape Empowerment
Trust case 197J-198A that “foreseeability … [does] not play a role in establishing
wrongfulness”.
Finally, a few remarks can be made about the court’s use of certain terminology.
First, throughout the judgment Spilg J used the term “duty of care” instead of “legal
duty” with reference to wrongfulness. As has been repeatedly pointed out by the
supreme court of appeal (see eg McIntosh v Premier, KwaZulu-Natal 2008 6 SA 1
(SCA) 8-9; Local Transitional Council of Delmas v Boshoff 2005 5 SA 514 (SCA)
522; the Telematrix case 468; Trustees, Two Oceans Aquarium Trust v Kantey &
Templer (Pty) Ltd 2006 3 SA 138 (SCA) 144; Hawekwa Youth Camp v Byrne 2010
6 SA 83 (SCA) 90), such use should be avoided, because it may cause confusion
between negligence and wrongfulness as delictual elements (see also Neethling and
Potgieter 152-154). In the Steenkamp case (159H) Harms JA stated that “[t]he constant
use of the phrase ‘duty of care’ is unfortunate. It is a term that in our legal setting
is inherently misleading and its use may have led the trial court somewhat astray”.
Apparently, although Spilg J did not adhere to this warning, he was fortunately
not led astray by its use, since he clearly distinguished between wrongfulness and
negligence. Second, Spilg J (342I) once referred to the test for negligence as that of
“a reasonable man”, while the politically correct term is the “reasonable person”,
as was used by the judge himself earlier in his decision (342E). Third, the judge
throughout mistakenly referred to damage (loss or harm, “skade”) as “damages”
(compensation, “skadevergoeding”).

3 The Cape Empowerment Trust case

In this case the appellant (CET) sued the respondent (FHS), a firm of auditors, for
delictual damages comprising wasted expenses incurred as a result of having been
induced to enter a disadvantageous business deal based on a negligent misstatement
by one of the partners of FHS. In the court a quo Binns-Ward AJ addressed only
the merits (as a result of a separation of issues) and found substantially in favour of
CET. He held that, subject to CET establishing legal causation in the second stage
of the trial, FHS would be liable for 70% of the financial loss proven by CET. In the
latter stage of the trial, Davis J assumed, without deciding, that CET had succeeded
in establishing legal causation, but dismissed the claim on the basis that CET had
failed to prove that it had suffered any loss as a result of the negligent misstatement.
CET appealed to the supreme court of appeal and FHS cross-appealed against the
judgment of Binns-Ward AJ.
According to the facts, CET had entered into an agreement with a third party
for the purchase of a business from the latter. The agreement included a profit
warranty by the seller. Upon CET’s request, an auditor of FHS issued a profit
certificate that the gross profits of the business were not less than R10 million. This
certificate, which proved to be wholly untrue, later matured into the fons et origo
of the litigation leading up to this appeal. In the supreme court of appeal, Brand
JA agreed with Binns-Ward AJ’s finding that the auditor was grossly negligent in
issuing the certificate (188C-H). Despite this, CET did not immediately latch onto
the opportunity to extricate itself from the sale agreement, but instead opted to re-
affirm the contract. This notwithstanding, CET brought the delictual claim against
FHS, as it still wished to recover its losses (cf also NSC Carriers & Forwarding
CC v Hyprop Investments Ltd 2013 1 SA 340 (GSJ)). (In passing, it is unclear

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why, in the courts below as well as the supreme court of appeal, the determination
of the liability of the auditor in question was based on the common law without
considering the possible applicability of section 46(3) of the Auditing Profession Act
26 of 2005, which makes provision for statutory liability of auditors for negligent
misrepresentation: see Neethling and Potgieter 304-305.)
Brand JA first dealt with the judgment of Binns-Ward AJ, which focused on
three of the elements of Aquilian liability, namely wrongfulness, fault and factual
causation. Fault (gross negligence) and factual causation were found to be present
(191I-192D). In dealing with wrongfulness, the judge reaffirmed that public and
legal policy dictate whether FHS should be held legally liable for the pure economic
loss. He held that auditors are not liable as a matter of course but that the policy-
based determination of whether legal liability should be imposed on an auditor for
loss resulting from the negligent statement must be determined with reference to
the facts and circumstances of the particular case. However, he did not agree with
Binns-Ward AJ’s view that the auditor’s gross negligence weighed heavily in favour
of imposing liability, since it demonstrated a confusion between negligence and
wrongfulness. According to him, this could have been avoided by applying the
new formulation of the test for wrongfulness and its difference from the test for
negligence. Brand JA continued, with reference to his judgment in Le Roux v Dey
(Freedom of Expression Institute and Restorative Justice Centre as amici curiae)
(2011 3 SA 274 (CC) 315)
“that in the context of the law of delict: (a) the criterion of wrongfulness ultimately depends on
a judicial determination of whether – assuming all the other elements of delictual liability to be
present – it would be reasonable to impose liability on a defendant for the damages [damage?]
flowing from specific conduct; and (b) that the judicial determination of that reasonableness would
in turn depend on considerations of public and legal policy in accordance with constitutional norms.
Incidentally, to avoid confusion it should be borne in mind that, what is meant by reasonableness
in the context of wrongfulness has nothing to do with reasonableness of the defendant’s conduct
[which is part of the element of negligence], but it concerns the reasonableness of imposing liability
on the defendant for the harm resulting from that conduct” (193D-F).

Accordingly, Binns-Ward AJ should not have accorded any weight to negligence

in imposing liability on FHS (192D-193G). Brand JA explained that confusing
wrongfulness and negligence not only offends the sensitivities of the legal purists
but has practical consequences. According to him, the element of wrongfulness
introduces a measure of control, since
“[i]t serves to exclude liability in situations where most right-minded people, including judges, will
regard the imposition of liability as untenable, despite the presence of all other elements of Aquilian
liability. If the test for negligence and wrongfulness is telescoped into one, the function of the latter
element as a measure of control is lost completely” (193G-I; see also Roux v Hattingh 2012 6 SA
428 (SCA) 439-440).

(For criticism of the formulation of the test for wrongfulness as the reasonableness
of holding the defendant liable, as well as of the view that the reasonableness of
the defendant’s conduct has nothing to do with wrongfulness, see Neethling and
Potgieter 78-82; Neethling and Potgieter “Wrongfulness in delict: a response to
Brand JA” 2014 THRHR 116 ff.)
In the court’s opinion, the following two considerations were relevant in
determining wrongfulness in the context of negligent misstatements (194B-195B).
The first consideration, which seemed to indicate the imposition of liability, was that
the auditor would have realised that the information was sought in a business context

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and in response to a serious request. On the other hand the second consideration,
which appeared to be a contra-indication for liability, was that the correct information
was available to CET from another source, namely its own auditors. However,
the consideration which according to Brand JA weighed most heavily against the
imposition of liability was CET’s “vulnerability to risk”, meaning that CET could
reasonably have avoided the harm by other means – a finding of non-vulnerability
on the part of a plaintiff is an important indicator against the imposition of delictual
liability on the defendant (195A-G). After considering the facts of the case, Brand
JA held that it would be unreasonable to impose liability for a loss to which CET had
exposed itself by allowing the agreement to lapse and by reinstating the agreement,
thereby rendering itself vulnerable. He therefore disagreed with the finding of
Binns-Ward AJ that CET had succeeded in establishing wrongfulness, and held that
the cross-appeal should therefore succeed (196H-197C).
The court proceeded to deal with the judgment of Davis J, who assumed that legal
causation was present (197C ff). Brand JA stated:
“It has by now become quite well settled that, in the same way as the element of wrongfulness, legal
causation is also determined by considerations of legal and public policy. This is so because broadly
speaking wrongfulness – in the case of omissions and pure economic loss – on the one hand, and
legal causation on the other, perform the same function. They both serve as safety valves preventing
the imposition of liability in a particular situation which most right-minded people will regard as
untenable, despite the presence of all other elements of delictual liability … Since wrongfulness
and remoteness are both determined by considerations of policy, a certain degree of overlapping is
inevitable. It follows that, in my view, most of the considerations that served to exclude a finding of
wrongfulness in this case will also rule out a finding of legal causation. So, for instance, I think it
could be found with equal validity that because CET’s loss ultimately resulted from its own failure
to extricate itself from the transactions which gave rise to the loss when it had the opportunity to
do so, not only was wrongfulness not established, but neither was legal causation. Incidentally, I
believe that this overlapping militates against the separation of issues in a case such as this. Having
said that, it is equally apparent, on the other hand, that wrongfulness and remoteness are not the
same in all respects. They involve two different elements of the law of delict, each with its own
characteristics and content. Even where negligent conduct resulting from 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 … Determination of remoteness also requires
application of yardsticks such as foreseeability and direct consequences which do not play a role
in establishing wrongfulness … What has also become generally accepted is that these yardsticks
should not be applied dogmatically but, rather, in a flexible manner. This means that if the application
of any or all of the known criteria should lead to a result which is untenable, legal causation will not
be found …” (197E-198C).

Applying the foreseeability and direct consequences approaches to legal causation,

Brand JA found that legal causation had not been established (198C-I). In the result,
he agreed with the ultimate conclusion arrived at by Davis J, albeit for different
reasons. Consequently the appeal was dismissed and the cross-appeal upheld (198I-
199B).
We have the following comments. It is interesting to note that Brand JA is clearly
opposed to the utilisation of the boni mores as a criterion for wrongfulness (Brand
“The contribution of Louis Harms in the sphere of Aquilian liability for pure
economic loss” 2013 THRHR 57 63 65; but see Neethling and Potgieter 2014 THRHR
117-118), in contrast to various of his colleagues in the constitutional court, the
supreme court of appeal and the high courts who employ this concept. As indicated
above (par 1), for example in the Lee case 167 the constitutional court described
it as “[t]his open-ended general criterion [that] has since evolved into the general

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 898 NEETHLING AND POTGIETER

criterion for establishing wrongfulness in all cases” (see also eg the Paixão case
381 385; the eBotswana case 339). Be that as it may, Brand JA stated in the Cape
Empowerment Trust case 197F that both wrongfulness and legal causation “serve
as safety valves preventing the imposition of liability in a particular situation which
most right-minded people [‘including judges’ – 193G-H] will regard as untenable,
despite the presence of all other elements of delictual liability” (our emphasis; cf
also the Roux case 439-440). It is difficult to grasp the difference between the test
of the legal convictions of the community (boni mores) as determined by, inter alia,
judges (cf Schultz v Butt 1986 3 SA 667 (A) 679), which he opposes, and the opinion
of “most right-minded people, including judges” which he favours. If these concepts
are indeed similar, then Brand JA appears to be applying the legal convictions of the
community also to determine legal causation – an unacceptable state of affairs!
To our mind, the boni mores criterion could have been applied fruitfully in the
examination of wrongfulness in the present case, without having to resort to the
criterion of reasonableness of holding the defendant liable (for criticism of this
controversial criterion, see Neethling and Potgieter 78-82; Neethling and Potgieter
2014 THRHR 116 ff). The policy considerations to which the court referred could
equally have been accommodated under the boni mores criterion and would have
led to the same result (cf Neethling and Potgieter “Die regsoortuigings van die
gemeenskap as selfstandige onregmatigheidskriterium” 2006 TSAR 609 ff for a
discussion of the Telematrix case in this regard).
We have already referred (par 2 above) to Brand JA’s negation of the flexible
approach to legal causation as an independent criterion which can be applied even in
the absence of the traditional criteria, such as foreseeability and direct consequences.
In his view, the traditional criteria “should not be applied dogmatically but in a
flexible manner so as to avoid a result which is so unjust or unfair that it can be
regarded as untenable” (the Fourway Haulage case 165). However, in the Cape
Empowerment Trust case he appeared to understand flexibility to also have the
effect that “if the application of any or all of the known criteria should lead to a
result which is untenable, legal causation will not be found” (198A-B). This seems
to mean that even where a consequence is found to be foreseeable and a direct
consequence of the act, flexibility could enable a court to deny liability, should the
result appear to be so unjust or unfair that it can be regarded as untenable. Possibly
this viewpoint could be interpreted as amounting to a recognition of the flexible
approach as an independent and even decisive test for legal causation.
Further, the formulation of the wrongfulness test by the court as “the
reasonableness of imposing liability on the defendant” to a large extent resembles
the formulation of the test for legal causation (remoteness), which is concerned with
whether it would be reasonable to impute a consequence to the defendant and hold
him liable for it (cf Neethling and Potgieter 191-192; par 1 above). By implication,
this overlap was admitted by Brand JA where he stated that both wrongfulness
and legal causation are determined by considerations of legal and public policy.
They perform the same function and most of the considerations that serve to
exclude a finding of wrongfulness will also rule out a finding of legal causation.
But he did acknowledge that wrongfulness and remoteness are not the same in all
respects and indicated that yardsticks for legal causation such as foreseeability and
direct consequences do not play a role in establishing wrongfulness (197E-198C).
Although, as indicated above (par 2) Brand JA in the Fourway Haulage case 163
was hesitant to recognise foreseeability as a factor co-determining wrongfulness,
various decisions of the supreme court of appeal clearly favour the opposite approach.
Leaving direct consequences aside (see Neethling and Potgieter 196-197)), it thus

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appears that the tests for wrongfulness and legal causation as utilised by Brand JA
in the Cape Empowerment Trust case appear essentially similar. This conclusion is
strengthened by his utilisation of the concept of the opinion of “right-minded people”
with regard to both wrongfulness and legal causation. In the final analysis, this
unfortunate overlap can mainly be ascribed to the formulation and application of the
controversial new variation of the test for wrongfulness, which, as indicated, echoes
the test for legal causation. This is clear from an example from English law (Weller
& Co v Food-and-Mouth Disease Research Institute 1966 1 QB 569 cited by Visser
in Du Bois (ed) Wille’s Principles of South African Law (2007) 1099). In that case
a tort action was instituted after the food-and-mouth virus escaped from a research
institute in the English Midlands. Not only the farmers suffered loss because their
livestock had been culled, but also the companies usually transporting the meat
had lost business owing to the quarantine necessitated by the escape of the virus.
According to Visser, the act of allowing the virus to escape was clearly unreasonable
but nevertheless not wrongful, because it would have been unreasonable to hold
the alleged wrongdoer liable; its liability would have extended too far. This view
cannot be supported. In our opinion, the dismissal of liability in that case did not
turn on the wrongfulness issue. Due to the clear unreasonableness of the conduct,
wrongfulness was undoubtedly present. However, it would nevertheless have been
unreasonable to hold the alleged wrongdoer liable on account of the absence of legal
causation, because this element is directly relevant to the extent of a wrongdoer’s
liability that must not exceed the “boundaries of reasonableness, fairness and
justice” (Neethling and Potgieter 190-191). Visser’s interpretation of the role of
wrongfulness in this case results in wrongfulness usurping the functions of legal
causation, which could breed confusion, as pointed out by Knobel (“Thoughts on the
functions and application of the elements of a delict” 2008 THRHR 650 652). This
consequence of the formulation of the new test for wrongfulness and its obvious
overlap with legal causation in the Cape Empowerment Trust case may eventually
have the unfortunate and unacceptable result of legal causation becoming redundant
as a separate element of a delict, and will inevitably lead to an attenuation of this
field of the law. Such a development will also be in conflict with the recognition and
development of legal causation as an essential separate element of delict in many
foreign jurisdictions (see European Group on Tort Law Principles 59 ff par 3.201;
Spier (ed) Unification of Tort Law: Causation (2000) 130 ff).

4 Conclusion
Traditionally, and for good reason, our law makes a clear distinction between
wrongfulness as the infringement of a legally protected interest in a legally
unacceptable way, and legal causation which indicates that a wrongdoer should be
held liable for a consequence caused by his wrongful, culpable act. Wrongfulness
is determined by the boni mores (as was done in the eBotswana case), while
legal causation is determined by policy considerations based on reasonableness,
fairness and justice in finding a close enough relationship between the conduct
and a consequence for liability to be imputed. This distinction does not prevent the
utilisation of similar factors, such as foreseeability, with regard to both elements, as
long as the essential nature and function of the two elements are not violated. But a
factor which is clearly directed at limiting liability, such as the fear for indeterminate
liability, should not be used in establishing wrongfulness, but rather legal causation.
Moreover, the boni mores criterion should not be utilised for determining legal
causation – not even in the form of the opinion of “most right-minded people,

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 900 RAUTENBACH

including judges” – since this can only cause confusion between wrongfulness and
legal causation. Confusion will also be created if the role of foreseeability with
regard to wrongfulness, which has become generally accepted, is denied without
rational explanation.
But in the final analysis the clouding of the distinction between wrongfulness
and legal causation can be ascribed to the introduction of the controversial new
formulation of the test for wrongfulness as “the reasonableness of holding the
defendant liable”, since the test for legal causation is in essence similar, namely
whether it would be reasonable to impute a consequence on the defendant and hold
him liable for this. If this trend continues, legal causation as a separate element of
delict may regrettably and unacceptably become redundant. It is therefore strongly
advisable that the pendulum in the supreme court of appeal should swing back to
the traditional approach to wrongfulness and legal causation as separate elements
of a delict.

J NEETHLING
University of the Free State

JM POTGIETER
University of South Africa

RASIONALITEIT, REDELIKHEID EN GEBEURLIKHEIDSGELDE-

OOREENKOMSTE

Ronald Bobroff and Partners Inc v De La Guerre 2014 4 BCLR 430 (KH)

1 Inleiding
In Bobroff and Partners Inc v De La Guerre was die geldigheid ter sprake van
gebeurlikheidsgelde-ooreenkomste tussen regspraktisyns en hulle kliënte wat nie
voldoen het aan die vereistes van die Wet op Gebeurlikheidsgelde 66 van 1997 nie. Die
konstitusionele hof het ’n aansoek van die hand gewys vir verlof tot appèl teen twee
beslissings van dieselfde volbank van die Gauteng afdeling van die hooggeregshof,
Pretoria (South African Association of Personal Injury Lawyers v Minister of Justice
and Constitutional Development 2013 2 SA 583 (GSJ) en De La Guerre v Bobroff
and Partners Inc 2013 ZAGPPHC 33 (13 Febr 2013) (ongerapporteer)). In hierdie
bespreking word na die uitspraak van die konstitusionele hof verwys as die Bobroff-
saak, en na die twee ander uitsprake as die Personal Injury Lawyers-saak en die
De La Guerre-saak. Die aansoek is van die hand gewys omdat daar geen redelike
gronde vir ’n suksesvolle appèl was nie (die Bobroff-saak par 5).
Die konstitusionele hof het in ’n kort uitspraak die beslissings van die Pretoria
volbank onderskryf (die Bobroff-saak par 5). Die hof het nie die beredenering
van die volbank herhaal nie, maar die appellante se argumente uit ’n ander hoek
benader, naamlik aan die hand van ’n onderskeid tussen rasionaliteit en redelikheid
(die Bobroff-saak par 6-12). Hierdie deel van die uitspraak word in paragraaf 3
bespreek.

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