In Loureiro and Others v Imvula Quality Protection (Pty) Ltd [2014] ZACC 4, the Constitutional Court overturned a decision of the Supreme Court of Appeal (SCA) which upheld an appeal from the South Gauteng High Court. The latter held Imvula Quality Protection (Pty) Ltd (Imvula) liable for losses suffered by Licinio Loureiro (Loureiro) and members of his family arising out of an armed robbery.

Factual Background

On 25 November 2008, Loureiro and his family moved into a house in Johannesburg. Loureiro arranged a 24-hour service of armed guards, provided by Imvula, to be placed at the house.

In early December 2008, out of concern about guards allowing access to visitors without prior authorisation, Loureiro instructed that the intercom in the guard house be partially disabled, so that the guards would not be able to open and close the main gate. This arrangement affected the movement of the guards during their shift change. To alleviate this problem, Loureiro provided the guards with a key to open the pedestrian gate during shift change only. He expressly prohibited them from using the key to open the gate to allow anyone access onto the premises without prior authorisation.

On 22 January 2009, individuals driving a white BMW with a flashing blue "police" light parked partially on the driveway near the guard house. A passenger alighted from the front seat; wearing dark blue clothing, a reflective vest marked "Police", and a police cap. He walked towards the glass of the guard house and showed a police identity card to July Mahlangu (Mahlangu), the guard on duty.

Mahlangu did not have sufficient opportunity to inspect the card. He was, however, adamant that the card was a valid police identity card as it had the police emblem on it. After trying, without success, to speak to the man whom he believed to be a policeman, and using the intercom, Mahlangu opened the pedestrian gate to speak to the man to find out what he wanted.

As soon as Mahlangu had opened the gate, the man pointed a gun at him. Accomplices then emerged from the car and forced Mahlangu into the guard house. After this, the intruders were able to enter the house, where they accosted the household staff and children, holding them captive whilst the robbery took place. When Loureiro and his wife returned, they were also robbed. The man and his accomplices stole belongings allegedly worth ZAR 11 million.

High Court

In April 2009, Loureiro, his wife and children subsequently instituted action against Imvula for damages arising from breach of contract and delict for the loss they suffered during the robbery and theft. The High Court found Imvula liable for the damages suffered by the Loureiros. This led to an appeal to the SCA.

The SCA

The majority (per Mhlantla JA with whom Mthiyane DP, Bosielo JA and Mbha AJA concurred) found that the reasonableness of Mahlangu's conduct was pivotal to both claims. On the contractual question, the SCA held that the prohibition against allowing people into Loureiro's premises without prior authorisation cannot be read in isolation. Understood against the backdrop of the agreement between the parties as a whole, which includes clauses requiring that reasonable steps be taken, it did not impose strict liability. It had to be read as being subject to the tacit term excluding the police from the group of people who were not allowed access to the premises. The appeal was upheld and the High Court decision was set aside.

In his dissenting judgment, Cloete JA held that Mahlangu breached the agreement between Loureiro and Imvula because he opened the pedestrian gate without authorisation to do so. If the man who accosted Mahlangu had been a policeman, Mahlangu would have been obliged to open the pedestrian gate irrespective of the express term to only use the key to the pedestrian gate to facilitate shift change. However, if the demand was not made by a policeman, Mahlangu would not be entitled to open the gate and thus opening the gate would result in breach of contract.

The findings on appeal to the Constitutional Court

The Loureiros took the decision of the SCA on appeal to the Constitutional Court, where the decision of the SCA was overturned in its entirety. In a unanimous judgment, the Constitutional Court found that:

• The Loureiros have raised issues, being the negligence of Mahlangu and the interpretation of the contract, that are connected to a constitutional issue, being the question of whether Mahalngu's conduct was wrongful.
• The substantial differences between the majority and minority judgments in the SCA provide a further reason for it being in the interest of justice for the Constitutional Court to address the issues.
• Mahlangu used the key to open the pedestrian gate for the imposters, without authorisation. This amounts to a breach of contract. Whether or not he was negligent is irrelevant.
• Mahlangu was not compelled by law to allow the imposters access to the premises, because he was only under an obligation to obey a lawful demand by a police officer. The demand was not lawfully made by a police officer.
• The community expects security guards not to give criminals access to guarded property. It is wrongful to do so.
• If private security companies are insulated from claims for these harms, because of mistakes on their side, they would have little incentive to conduct themselves in a way that avoids causing harm.
• A reasonable security guard in Mahlangu's position would have foreseen the possibility that the man at the gate was an imposter. The robbers drove up in an unmarked car. While the car had a flashing blue light, the light was fixed to the dashboard of the car, not to its roof.
• A reasonable security guard in Mahlangu's position would have attempted to make contact with the main house or his employer to find out if the police were expected.
• When one is tasked with protecting a property against intruders, it is simply not reasonable to open a door for a stranger without adequately verifying who that person is or finding out what he or she wants.

Implications and conclusion

It is clear from the decision of the Constitutional Court that there are ample public-policy reasons in favour of imposing liabilities in claims of this nature. The constitutional rights to personal safety and protection from theft of or damage to one's property are compelling normative considerations.

The decision will undoubtedly result in far-reaching changes in the private security industry, especially in light of the fact that instances where imposters posing as police appear to be on the rise. Security companies may have to introduce additional training to their staff and safeguards to guard against risks of this nature.

However, the ultimate finding of the Constitutional Court raises an interesting consideration. Whilst the Constitutional Court correctly found, in our view, that the issue of wrongfulness raises a constitutional issue, Imvula's liability was in reality founded on the traditional common law principles applicable to contract and delict. This judgment highlights, once again, the Constitutional Court's preparedness to descend into the arena that was once the domain of the SCA. Further, the judgment is an example of the Constitutional Court moving away from its once held principle that for a constitutional issue to be raised, this issue must be raised on the pleadings at the outset and not raised as an afterthought after an adverse finding in the SCA.

This article was authored by Rashad Ismail (Partner) and Raynold Tlhavani (Senior Associate), Webber Wentzel