Esorfranki Pipelines (Pty) Ltd v Mopani District Municipality (CCT 222/21) [2022] ZACC 41; 2023 (2) BCLR 149 (CC); 2023 (2) SA 31 (CC) (30 November 2022)

Esorfranki Pipelines (Pty) Ltd v Mopani District Municipality (CCT 222/21) [2022] ZACC 41; 2023 (2) BCLR 149 (CC); 2023 (2) SA 31 (CC) (30 November 2022)

The Constitutional Court held that economic loss sustained as a result of a breach of section 217 of the Constitution, whether or not the breach is intentional, is not recoverable in delict. The principle of subsidiarity and the scheme of the Promotion of Administrative Justice Act (PAJA) require that claims for compensation for administrative injustice be pursued under PAJA, which provides for just and equitable relief, including compensation in exceptional cases. Extending the common law to allow delictual claims for such loss would subvert the legislative framework and create parallel systems of law. The applicant failed to establish wrongfulness, as the appropriate remedy lies within...

Citation
[2022] ZACC 41
Parties
Applicant: Esorfranki Pipelines (Pty) Ltd; Respondent: Mopani District Municipality
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
30 November 2022
Case Number
CCT 222/21
Procedural Posture
Leave to Appeal / Constitutional Court Appeal From Supreme Court of Appeal
Outcome
Leave to appeal granted; appeal dismissed; costs awarded against respondent; judgment referred to Special Investigating Unit.
Judges
Madlanga, Majiedt, Mathopo, Mhlantla, Mlambo, Theron, Tshiqi, Unterhalter
Legal Topics
Promotion of Administrative Justice Act, Constitutional Procurement, Loss of Profit, Wrongfulness, Public Policy, Subsidiarity
Administrative Law Delict Civil Procedure Promotion of Administrative Justice Act Constitutional Procurement Loss of Profit Wrongfulness Public Policy +1 more

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Parties

Esorfranki Pipelines (Pty) Ltd

Applicant

Mopani District Municipality

Respondent

Procedural Posture

Leave to Appeal / Constitutional Court Appeal From Supreme Court of Appeal

Legal Issues

  1. 1 Whether a tenderer deprived of success by the state's intentional misconduct can claim delictual damages for loss of profit from the state.
  2. 2 Whether the respondent's conduct was intentional and the factual and legal cause of the applicant's alleged loss.
  3. 3 Whether the principle of subsidiarity and the scheme of PAJA preclude a delictual claim for economic loss arising from breach of section 217 of the Constitution.

Ratio Decidendi

The Constitutional Court held that economic loss sustained as a result of a breach of section 217 of the Constitution, whether or not the breach is intentional, is not recoverable in delict. The principle of subsidiarity and the scheme of the Promotion of Administrative Justice Act (PAJA) require that claims for compensation for administrative injustice be pursued under PAJA, which provides for just and equitable relief, including compensation in exceptional cases. Extending the common law to allow delictual claims for such loss would subvert the legislative framework and create parallel systems of law. The applicant failed to establish wrongfulness, as the appropriate remedy lies within...

Court Disposition

Leave to appeal granted; appeal dismissed; costs awarded against respondent; judgment referred to Special Investigating Unit.

Orders

  • Leave to appeal is granted.
  • The appeal is dismissed.