IN THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG REPUBLIC OF SOUTH AFRICA CASE NO. 4387/08

Transcription

1 1 IN THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG REPUBLIC OF SOUTH AFRICA CASE NO. 4387/08 In the matter between : J.R HARVEY APPLICANT and UMHLATUZE MUNICIPALITY FIRST RESPONDENT CRYSTAL LAGOON INVESTMENTS 44 CC SECOND RESPONDENT REGISTRAR OF DEEDS : KWAZULU NATAL THIRD RESPONDENT JUDGMENT MOODLEY AJ. The Issue in the Case.

2 2 [1] This is a unique case. It raises the novel question of whether a previous owner of immovable property from whom his property was expropriated by an Organ of State for a specific public purpose against payment of compensation, has the right to reclaim such property when the public purpose could not be realized and whereafter the Organ of State decides to change the purpose in relation to its use. Insofar as it could be established there appears to be no precedent on the issue in South African law. The case involves both legal and constitutional questions which require to be considered in the context of the facts of the present case. The parties and the relief claimed [2] The applicant is John Rex Harvey, a 65 year old male and a councillor of the Umhlatuze Municipality which is the first respondent. The first respondent is a duly established municipality in terms of the Local Government: Municipal Structures Act No. 117 of 1998 and Local Government: Municipal Systems Act No. 32 of 2000 ( MSA ). The applicant is a member of its executive committee. The second respondent is Crystal Lagoon Investments

3 3 44 CC, a duly established close corporation. The third respondent is the Registrar of Deeds of KwaZulu Natal who has been cited as an interested party and against whom no relief is being claimed. [3] The applicant was the previous owner of certain immovable properties more fully described as Lot 32, Richards Bay (Extension 1) in extent m² and Lot 33, Richards Bay (Extension 1) in extent m². Lots 32 and 33 were expropriated from the applicant by the first respondent s predecessor-in-title. The first respondent s predecessor-in-title expropriated the applicant s properties with the objective of using them together with certain other properties for a public purpose. (For convenience, I shall hereinafter refer to the first respondent s predecessor-in-title, as the first respondent). However, the public purpose initially intended by the first respondent could not be achieved on the properties and it accordingly changed the use for which it had expropriated them. It did so by re-zoning the properties, consolidating them with certain other properties in the area which together became known as Portion 1 of the Ridge ( The Ridge ). The development and related sale of The Ridge was put out to public tender to private

4 4 developers. The second respondent participated in the tender process and was the successful tenderer to purchase The Ridge which included Lots 32 and 33. [4] The Ridge is an area located in the Meerensee suburb of Richard s Bay and is the only elevated area in Richards Bay with a combined sea and harbour view. The site comprises a portion of Erven 15, 20, 21, Erven 22 33, 36, 67, 7732, 11500, 11499, 11502, a Portion of the Remainder of Erf 35 and Erf 2627; and a Portion of the Remainder of Erf 2627 all of the Lower Umfolozi. [5] The present application was brought by the applicant to review and set aside the resolution of the first respondent at the meeting of its executive committee held on 20 March 2007, alternatively the resolution of the first respondent on 5 December 2006, to sell by public tender, Lots 32 and 33, as part of the proposed consolidated lot as The Ridge, zoned General Residential 2. The applicant also sought to review and set aside the decision of the first respondent s appeal committee, delivered on 20 September 2007, endorsing the decisions of the first

5 5 respondent taken on 20 March 2007, alternatively on 5 December 2006 as referred to above. In the alternative, applicant seeks to review and set aside the decision of the first respondent to award by public tender to the second respondent, a contract to buy and develop The Ridge zoned General Residential 2, insofar as it affects the properties, Lots 32 and 33. [6] The applicant also sought and obtained on an urgent basis an interim order interdicting and restraining the first respondent from : (a) consolidating or permitting the consolidating of Lots 32 and 33 with any other immovable property; (b) causing or permitting any township to be established on Lots 32 and 33; (c) transferring title in and to the immovable properties to the second respondent; (d) alienating or otherwise encumbering the immovable properties in any manner or form; and (e) causing or permitting the development of the immovable properties in any manner or form. That order was granted by Madondo J pending the outcome of this application. [7] The second respondent did not file any opposition to the application.

6 6 [8] The applicant was represented by Ms. Gabriel and the first respondent was represented by Mr. Rall S.C. assisted by Mr Blomkamp. After both counsel presented argument on the matter and by agreement between themselves they sought leave from the court to file further supplementary Heads of Argument. Thereafter, supplementary Heads of Argument on behalf of the first respondent were filed on 27 January 2010 and on behalf of the applicant on 26 March The salient facts [9] The applicant purchased Lots 32 and 33 in 1978, erected his home thereon and has lived there with his family ever since. At the time the applicant purchased Lots 32 and 33 they were zoned residential. Prior to the adoption of the Richard s Bay Town Planning Scheme (in 1983) the area known as the Ridge which included the Applicant s properties was re-zoned as public open space. During or about August 1992, the first respondent expropriated Lots 32 and 33 from the applicant. The expropriation

7 7 was carried out in compliance with the first respondent s obligations in terms of Section 67 of the Town Planning Ordinance 27 of The first respondent intended to use Lots 32 and 33 together with a number of adjacent properties all of which together formed The Ridge, to form a public open space which could be used by the public as a passive recreational open space and a conservation area. [10] The applicant did not object to the expropriation of his properties but requested an increase in the compensation than that which was offered to him. In fact, he instituted legal proceedings against the first respondent in which he claimed additional compensation but these proceedings were settled in terms of a settlement agreement. In terms of this settlement agreement the applicant confirmed that he was satisfied with the amount of the consideration paid to him in respect of the expropriated properties and accepted such payment in full and final settlement of all and any claims which he may have had against the first respondent in respect of the said expropriation.

8 8 [11] After the expropriation of the applicant s properties, the first respondent took transfer of them and the applicant s continued occupation of the house on those properties, was as a tenant. The applicant s occupation was in terms of short term leases entered into with the first respondent. It was a condition of these leases that their period was to be negotiated with the programming of the development of The Ridge. [12] The history of the town planning resolutions in respect of The Ridge is set out in a report prepared by the planning department of the first respondent which was prepared for consideration by the respondent s council, its executive committee and its planning and sustainable development committee. This document records the history behind the expropriation, the planning to develop The Ridge into a public recreational open space area, the eventual rezoning of The Ridge to General Residential 2, and all the resolutions taken by first respondent in these matters. [13] This report records that after having devoted a great deal of thought to devising ways of ensuring the satisfactory development

9 9 of The Ridge, the first respondent eventually came to the conclusion that The Ridge could only be developed in a manner worthy of importance and potential if the development scheme was designed as one architectural composition. This could only have been done if the properties along The Ridge were reserved for use as a public open space. [14] The report goes on to record that the first respondent was involved since the early 1970 s in negotiations with the owners of properties on The Ridge with a view to entering into agreements with such owners in respect of their properties in terms of which their properties would be exchanged for other properties with equal value or on the basis of an outright sale. It initiated the expropriation as early as 1973 and with a notice dated 7 May 1992 it expropriated the properties on The Ridge with an effective date on 1 August [15] As far as the planning of The Ridge to be used as a public open recreational space is concerned, the first respondent approved several proposals over the years for its development. In

10 the first respondent approved in principle the development of the Ridge under a project known as the Richards Bay Coastal Dunes and Beachfront Master Plan (resolution 2334). This resolution also determined the criteria for the development of The Ridge, all with a view to achieving its land use as a public open space. Between 1995 and 1996 further proposals were made for the development of the Ridge which included combinations of tea gardens, museums, arts and crafts workshops, information and exhibition centres. These proposals were from time to time referred back by the first respondent for the proponents further consideration with specific reference to possible new town planning proposals. Although the proponents were offered an opportunity of putting together a detailed proposal through the means of a consortium of developers, these efforts failed to produce any meaningful results. As a consequence the properties remained undeveloped for the purpose originally intended by first respondent. [16] Since the original purpose for The Ridge could not be achieved by 1996, the first respondent resolved to appoint a consultant to undertake a reassessment of the existing town

11 11 planning proposals for The Ridge. This resolution was later rescinded on 25 February 1997 when it was decided to call for proposals for the development of The Ridge. This eventually led to the appointment of consultants who made certain proposals and eventually first respondent resolved on 27 October 1998 to accept the proposal of the consultants in principle (resolution 1495). [17] Finally, by resolution 2061, which was proposed by one of first respondent s councilors and seconded by the applicant it was resolved on 21 September 1999 to accept the final report of the consultants. This proposal entailed medium density residential development together with associated private parking, garden areas and communal facilities for residents. [18] On the 21 August 2001 the council of the first respondent resolved to re-zone the properties forming The Ridge in accordance with the new development plans for the land. At the time it passed this resolution the first respondent was in possession of a legal opinion from Truter James de Ridder Attorneys dated March Subsequently during September 2001 the first

12 12 respondent was furnished with a second legal opinion from attorneys, Shepstone & Wylie. I shall in due course deal with these two opinions. After obtaining the second legal opinion the first respondent resolved on 26 February 2002 to reaffirm its resolution of 21 st August 2001 to proceed with the re-zoning. The latter resolution was taken after reviewing whether certain properties which were leased including those of the applicant should be included or excluded and it was resolved to include these areas as part of the re-zoning. The first respondent subsequently followed the procedure prescribed by the Town Planning Ordinance for the re-zoning of the land. The re-zoning of the properties on The Ridge were advertised and two objections were received but none of these were from the applicant. Subsequently by resolutions taken by the first respondent both these objections were dismissed. The re-zoning of the properties was eventually approved by the Provincial Planning and Development Commission on 27 November [19] I revert to deal with the two legal opinions referred to above. The first opinion advised on two issues namely:

13 13 (a) Whether the first respondent could lawfully reverse (withdraw) the expropriation of the properties; (b) If the first respondent were to re-zone The Ridge to provide for a more commercially orientated usage, to what extent would first respondent be exposed to claims from its previous owners? [20] The first issue raised was answered in the negative and first respondent was advised against withdrawing or reversing the expropriation. A decisive answer was not given to the second issue. The opinion expressed was that all the negotiations between the first respondent and the former owners of properties on The Ridge, including the expropriation of the applicant s properties were done on the basis of the first respondent s development policy to make the relevant area available for public open space purposes. It went on to state that some of the previous owners of properties on The Ridge fairly readily agreed to exchange or sell their properties to the first respondent with a view

14 14 to such properties being used for the first respondent s declared purposes. It stated further that it was conceivable that they might not have agreed so readily, or not at all, had the first respondent s intention at the time been to utilize The Ridge for commercially orientated purposes. It expressed the view that it was clear that the first respondent did not at the time of acquiring The Ridge properties intend to use them for any other purposes than those declared and therefore it could be argued that the first respondent acquired the properties under false pretenses. The prima facie view expressed was that the first respondent would not be exposed to any successful claims from previous owners were it to decide to re-zone the area for more commercially orientated purposes but that should this course be followed, it was to be expected that there would be accusations against the first respondent s morality and credibility. [21] The second opinion was sought on the propriety, in a legal sense, of the proposed recommendation of the first respondent to advertise and implement the rezoning of the properties on The Ridge for special residential purposes. This opinion writer was of

15 15 the view that there was no impropriety or bad faith on the part of the first respondent when it expropriated the properties from the former owners. It stated that there was ample evidence that the intentions of the first respondent at all times prior to and incorporating the expropriation of the properties, and the re-zoning by means of their reservation of the land for public and semi-public purposes was a bona fide initiative by the first respondent. It stated further that there was no suggestion in the documents that anyone within the first respondent s sphere of influence held any intention of permitting the first respondent to profit from the re-zoning initiatives or the expropriation of the properties. However, the writer was of the view that the applicant s occupation of one of the properties in terms of a lease from the first respondent would present the first respondent with a problem should he decide to repurchase the property. The view was also expressed that should the first respondent permit the applicant to re-purchase his property then other property owners will feel equally entitled to be permitted to re-purchase their own properties. The conclusion reached was that to avoid accusations of discriminatory treatment which, under the Constitution might be valid, first respondent was advised to

16 16 decide to deal with the sale of the properties, once the re-zoning back to Special Residential had been completed, on one or two possible bases, namely : (a) To sell the properties back to the former owners at their fair market value and to auction off those properties where the owners had indicated that they are not interested in a re-purchase; (b) To submit all properties to public auction on the basis that the first respondent is not obliged to accept any bids and the bids are to be subject to confirmation within fourteen days and are also to be subject to a right of first refusal on the part of any previous owner of specific properties. It was felt by the writer that on this basis first respondent could not be accused of having acted in an unfairly, discriminatory or in an administratively unjust manner.

17 17 [22] On 5 December 2006, the first respondent s council resolved to consolidate the properties, comprising one block zoned General Residential 2 and another block zoned Hotel and to sell the property by public tender so it could be developed in accordance with the new zoning. At this stage the first respondent s council had the abovementioned two opinions in its possession. [23] The first respondent was also given an opinion on 12 December 2006 which was obtained by the applicant. The issue raised in this opinion was whether it was within the power of the first respondent, having expropriated the property for a specific stated purpose, to use it for another purpose entirely unrelated to the motivation upon which reliance was placed for the original expropriation. The opinion expressed was that the first respondent could hardly ignore the ostensible basis on which it acquired the properties from the owners as this would amount to unjust administrative action. It was stated further that to render the administrative decision to sell the properties as being a just and equitable one, the first respondent would first have to negotiate with the previous owners to restore the status quo ante. This, so it was

18 18 advised, would entail a re-transfer of the properties to the previous owners against repayment of the compensation they had received from the first respondent. Only if the previous owners were to decline such an offer or to waive their right to a return of the properties would the first respondent be at liberty to proceed as it wished to. The opinion concluded that to proceed otherwise would not be just and equitable conduct in terms of the Constitution of the Republic of South Africa Act No. 108 of 1996 ( the Constitution ) and the Promotion of Administrative Justice Act No. 3 of 2000 ( PAJA ) [24] The above opinion was accompanied by a letter addressed by the applicant to the first respondent. In this letter the applicant stated that he was applying for his properties to be re-instated to him as they were wrongfully expropriated by the previous Richard s Bay Council. He also recorded in this letter that his property may qualify for heritage status and would therefore be exempt from demolition without permission being obtained from the relevant authority.

19 19 [25] On 20 March 2007, the executive committee of the first respondent, which by that time had all three of the abovementioned legal opinions, and the abovementioned letter recording a possible heritage status to applicant s property, re-confirmed the first respondent s council s resolution of 5 December 2006 but appended thereto the following three conditions namely : (a) That previous owners and current lessees including the applicant be informed that due to the fact that many attempts to establish museums and ancillary facilities were unsuccessful after expropriation, such facilities were excluded from the planning framework of The Ridge ; (b) That the public tender include a condition requiring the status of the existing buildings situated on The Ridge in terms of the KwaZulu Natal Heritage Act 109 of 1997 be investigated and a proposal as to the way forward needs to be submitted by the successful tenderer;

20 20 (c) That previous owners and current lessees, including the applicant be informed in writing that their request to reverse the expropriation was denied. [26] On 3 April 2007 the full council of the first respondent reconfirmed its resolution of the 5 December 2006 and in addition incorporated in this resolution the matters referred to in paragraphs (a), (b) and (c) mentioned in the preceding paragraph. In other words the full council passed a resolution in identical terms to the resolution passed by the executive committee on 20 March [27] On 4 May 2007 the applicant lodged an appeal to the appeal committee of the first respondent in respect of the decisions taken recently by the executive Committee and / or Council of the first respondent. The appeal which was heard on 12 September 2007, was dismissed. The applicant was notified of the appeal committee s decision on 20 September The applicant

21 21 requested reasons for the decision and these were furnished on 19 October [28] During January 2008 the applicant became aware that the properties on The Ridge had been advertised for sale by public tender under tender number 8/2/1/244. In this tender document, a description of the situation of the properties comprising The Ridge was given and it thereafter went on to state as follows : A.3. The area is zoned in terms of the Richards Bay Town Planning Scheme into two portions, namely Portion 1 to the extent of Hectares to General Residential 2 and Portion 2 to the extent of Hectares to Hotel. A.4. The township establishment, i.e. the consolidation for the above erven into the two proposed portions has not been formalized.

22 22 [29] The remainder of the relevant portions of the tender document indicate what is required of any proposed developer. This included a declaration of a development layout and footprint to be submitted for the establishment of a township on the General Residential 2 properties, an investigation of the status of the existing buildings in terms of the KwaZulu Natal Heritage Act No. 109 of 1997 and for those buildings to be dealt with accordingly, if necessary, and the successful tenderer was required to undertake all land survey, environmental approval processes, town planning and other related work required for the township establishment of the development in terms of any law. [30] Eventually and on or about 15 January 2008 the Bid Adjudication Committee awarded the tender to the second respondent. When this came to the attention of the applicant, he caused his attorneys to address a letter dated 5 February 2008 which called upon the first respondent to refrain from concluding any agreements or proceeding further in any way with regard to the applicant s properties which formed a part of the tender that had

23 23 been awarded. He further indicated that the applicant intended bringing review proceedings. Proceedings before the Appeal Committee [31] As mentioned, the applicant lodged an appeal against the decisions of the executive committee and the council of first respondent and sought to reclaim Lots 32 and 33 by tendering to pay their market related values. The applicant was given a hearing in terms of s 62 of the MSA. Before the first respondent s appeal committee, applicant argued that his properties presented a special case. The applicant argued the following matters before the appeal committee : (a) The properties which he had purchased and which were expropriated from him had been his place of residence for many years. The first respondent accepted this fact and permitted his continued occupation of his home for a lengthy period of time. He continued to reside on the property with his wife and children prior to their

24 24 departure from their parental home. (b) He did not wish to lose his home and pointed out that his home as well as the buildings on a neighbouring property might qualify for special protection in terms of the KwaZulu Natal Heritage Act No. 109 of 1997, given that the buildings were older than 60 years. That Act he stated would effectively prevent his home from being demolished, as well as the buildings on the lot adjoining his. He argued that although the first respondent had resolved to combine General Residential 2 lots and to sell them together, it was clear that this was subject to any purchaser investigating the positions of Lots 32 and 33 in regard to their alleged heritage status and reporting thereon. He argued that there did not appear to have been any planning consideration given to the feasibility of combining Lots 32 and 33 with General Residential 2 plots if it later turned out to be subject to protection through the KwaZulu Natal Heritage Act, which was binding on the municipality as it was

25 25 provincial legislation. (c) He argued further that Lots 32 and 33 appears at the end of the block of properties that the first respondent wanted to consolidate and sell off as General Residential 2. He stated that they ought to have been no difficulty in simply excising Lots 32 and 33 from the block of General Residential 2 properties. (d) He argued that notwithstanding the provisions of the Municipal Finance Management Act No. 56 of 2003 ( MFM ), the first respondent could re-sell the properties to him by virtue of the provisions of Section 233 of the Local Authorities (Natal) Ordinance No. 25 of (e) The first respondent, as a sphere of government, was obliged to engage in administrative action in a lawful

26 26 reasonable and procedurally fair manner in compliance with Section 33 of the Constitution read with PAJA. (f) The first respondent was obliged to give special consideration to the following facts : (i) It expropriated his land and his home originally for a public purpose, when it would have otherwise not been able to deprive him of his property; (ii) With the consent of the first respondent, he continued to reside there for many years after the expropriation in recognition of the fact by the first respondent that his home was on the property. (iii) His home may qualify for special protection in terms of the KwaZulu Natal Heritage Act which the municipal planning exercise appeared to have ignored or overlooked or made insufficient provision therefor.

27 27 (iv) It was only him and no other formerly expropriated owner who wished to re-acquire his properties which meant that first respondent would not face a flood of claims as suggested in a report to it and in the first opinion obtained by the first respondent. (v) He ought to be entitled to re-purchase his properties on the basis that the first respondent no longer wished to proceed with the original intention behind the expropriation (ie. to hold the property for the benefit of the public). The decision to sell the properties was and remains opposed to the original intention and is for commercial revenue driven aims. (vi) That section 7(2) of the Constitution requires all spheres of government including the first respondent to respect, protect, promote and fulfill

28 28 the rights in the Bill of Rights and that one of those rights is the right contained in Section 26 which protects the right of access to housing. [32] The applicant s appeal was unsuccessful. The applicant sought reasons from the appeal committee of the first respondent. The first respondent provided the following reasons for the dismissal of the appeal : 1. the process of expropriation was finalized and agreed upon by means of an agreement entered into between Council and the appellant on 16 April although Council had intended to rezone the property to public open space. However, circumstances changed over time and as the owner of land Council has the authority to decide otherwise. 3. council also has the authority and an obligation in terms of Section 14 of the MFMA to dispose of land in a fair and competitive manner and the appellant himself can tender for the property during the tender process.

29 29 4. the appeal against the Council s decision of 20 March 2007 was an exercise in futility as it re-affirmed a decision taken by council on 5 December [33] The first respondent did not dispute that the aforementioned arguments were made by the applicant before its appeal committee. In these proceedings the first respondent contended as follows : (a) The applicant had no standing in law to bring this application because none of his rights were affected by any of the decisions which he objects to. (b) Applicant should be denied the relief sought for on the basis that he had delayed too long in seeking the relief in question. (c) After the applicant s properties had been expropriated and re-zoned by the first respondent, anything the first

30 30 respondent did in respect of those properties was in respect of properties owned by the first respondent, and the fact that the properties previously belonged to the applicant was no longer relevant. (d) As an organ of State, funded by and responsible to the public, the first respondent was obliged to take into account the interest of the municipality and its residents as a whole in deciding what to do with the properties which it decided to sell and could not have regard to the applicant s personal circumstances. (e) Although the first respondent had sympathy for the applicant it maintains that legally it was not entitled to accommodate the applicant s position as to have done so would have amounted to impermissible preferential treatment. It acted in accordance with the law, including the Constitution in disposing of the properties in the way that it did.

31 31 (f) Once the aforementioned settlement agreement between the first respondent and the applicant had been concluded, the applicant s right to object to what happened to Lots 32 and 33 (aside from his rights as the tenant) was based not on his status as a previous owner of the properties, but as a resident of the municipality. The applicant in effect seeks a reversal of the original decision to expropriate the properties. (g) After the expropriation and acquisition by the first respondent of the properties, it was obliged to deal with them, as far as town planning matters and the disposal of them are concerned, as with any other properties owned by it, taking into account the interest of the municipality and all relevant, including changed circumstances. (h) The applicant only appealed against the decision taken by the Council on or about the 19 th April 2007.

32 32 However, what he in fact appealed against was the decision of the executive committee of the first respondent of 20 March The appeal against the decision of the executive committee reaffirming that decision, was an exercise in futility, as was argued at the appeal and as found to be the case by the appeal committee. (i) It denied that the applicant s case was a special one. (j) It denied that the buildings in question qualified for protection in terms of the KwaZulu Natal Heritage Act and averred that this was mere speculation on the applicant s part. It asserted that the properties were in any event sold subject to the purchaser taking the risk that the properties were protected. It pointed out further that if the buildings on the properties were protected, the properties would be far less marketable on their own rather than as a part of a large consolidated property.

33 33 (k) The provisions of Section 14 and of Chapter 11 of the MFM and hence the Supply Chain Management Policy take precedence over section 233 of the Ordinance by virtue of the provisions of section 3(2) of the MFM and that the appeal committee found quite correctly that the council was obliged to comply with section 14 of the MFM. In any event it denied that the interest of the municipality would be better served by a private sale or that the applicant s circumstances were circumstances which could properly be taken into account in terms of section 238 of the Ordinance. (l) It acted in a lawful reasonable and procedurally fair manner. (m) It denied that the decision of the first respondent s council to sell the properties in any way breached the provisions of the Constitution. The applicant is a

34 34 tenant on the properties and the decision to sell the properties did not affect his tenancy. His tenancy would have to be determined in terms of the law and if necessary the applicant would have to be evicted in terms of the law. Challenge to locus standi [34] The first respondent contended that the applicant has no standing in law to bring this application. It seems that the challenge to applicant s locus standi was made on the basis that the applicant is currently a tenant and the decision to sell the properties did not affect his rights as tenant which are terminable in law and on the basis of the lease agreement. [35] Although the first respondent s challenge to the applicant s locus standi was raised in the pleadings, it was not pertinently dealt with in the first respondent s heads of argument. Indeed, Mr Rall, did not press the challenge to applicant s locus standi during his

35 35 argument before me. I think that was a wise decision in view of the wide net in which the applicant cast a possible infringement or threat to his rights or at the very least his legitimate expectations in the Bill of Rights. [36] In terms of s 38 (a) of the Constitution, anyone acting in their own interest has the right to approach a competent court, alleging that a right in the Bill of Rights has been infringed or threatened, and the court may grant appropriate relief which includes a declaration of rights. It is settled law that those who assert infringements or threats to fundamental rights in the Bill of Rights are afforded a generous and expanded form of locus standi to approach a court for just and equitable relief. A legitimate expectation is sufficient to justify a hearing. 1 [37] It is to be observed that at the heart of this application is the applicant s assertion of an infringement of his right to re-claim and re-purchase his properties once the first respondent decided to 1 Ferreira v Levin & Others 1996 (1) SA 984 (CC) at paras ; Walele v City of Cape Town & Others 2008 (6) SA 129 (CC) at para 42 (See also Grey s Marine Hout Bay (Pty) Ltd v Minister of Public Works 2005 (6) SA 313 (SCA) at paras

36 36 change the purpose for which the properties were originally expropriated from him. The applicant therefore has at least a vested interest in the decisions taken by the first respondent with respect to their administration of the properties. [38] In Ferreira, the then Honourable President of the Constitutional Court, Chaskalson P stated that he could see no good reason for adopting a narrow approach to the issue of standing in constitutional cases. He expressed the view that we should rather adopt a broad approach to standing as this would be consistent with the mandate given to courts to uphold the Constitution to ensure that constitutional rights enjoy the full measure of the protection to which they are entitled. 2 In the same case O Regan J stated that the harm alleged may often be quite diffuse or amorphous and that no bright line can be drawn between private litigation and litigation of a public or constitutional nature. She stated at paragraph 230 as follows : and Bullock N.O. v Provincial Government, North West Province 2004 (5) SA 262 (SCA) at paras 3 4 and 22 23) 2 Ferreira : See fn1, para 165

37 37 [230] Section 7(4) is a recognition too of the particular role played by the courts in a constitutional democracy. As the arm of government which is entrusted primarily with the interpretation and enforcement of constitutional rights, it carries a particular democratic responsibility to ensure that those rights are honoured in our society. This rule requires that access to the courts in constitutional matters should not be precluded by rules of standing developed in a different constitutional environment in which a different model of adjudication pre-dominated. In particular, it is important that it is not only those with vested interests who should be afforded standing in constitutional challenges where remedies may have a wide impact. [39] Ms. Gabriel submitted that in these proceedings, the applicant s right to housing (section 26), duties on the State to respect, protect, promote and fulfill the rights in the Bill of Rights (section 7), his rights to just administrative action (section 33) and those contained in PAJA as well as the corresponding duties and obligations placed on the first respondent, given the historical

38 38 expropriation of his property, including the subsequent change in purpose for the expropriation, were asserted. [40] I am of the view that the alleged infringement of the rights asserted set against the backdrop of the facts pleaded by the applicant and the jurisprudential principles applicable to each of them require consideration by this court and any failure to do so by non-suiting the applicant on the basis of a lack of locus standi in the circumstances of this case would amount to a failure of justice. I am therefore satisfied that the applicant has established his locus standi to approach the court for the relief which he seeks. The hearing and decision of the Appeal Committee [41] I have set out above the relevant facts relating to the applicant s appeal, the arguments raised and the reasons given for the dismissal of such appeal.

39 39 [42] The applicant s appeal was noted in the form of a letter by his attorneys on 4 May The second paragraph of this letter reads : We are instructed to note an Appeal in terms of the abovementioned section of the act to the Council s Appeal Committee in respect of the decisions taken recently by the executive Committee and / or Council. We mention in this regard that the decision in question is one which was taken at a meeting held on or about 19 April We also mention that although that decision directly affects our client, he has not yet been notified of the impact thereof. Consequently, our client is anticipating, rather than complying with, the time limit referred to in s 62(1) of the said act. S 62 (1) was a reference to the MSA. The letter then goes on to set out the historical background to the matter and the grounds on which the appeal was based. [43] However, no decision had been taken either by the executive committee or the council of the first respondent on 19 April 2007.

40 40 As mentioned, the only decisions taken were : the decision of the first respondent s council taken on 5 December 2006, the decision of the executive committee of the first respondent acting under delegated authority on 20 March 2007 which reconfirmed the resolution taken by the council on 5 December 2006 and appended thereon the three conditions referred to above and the decision of the full council of the first respondent taken on 3 April 2007 which was in identical terms to the resolution taken by its executive committee on 20 March [44] In terms of s 62 of the MSA an appeal lies only against the decision taken by persons or structures to whom powers have been delegated. It provides as follows : 62 Appeals (1) A person whose rights are affected by a decision taken by a political office bearer, councilor or staff member of a municipality in terms of a power or duty delegated or sub-delegated by a delegating authority in the political structure, political office bearer, councilor or staff member, may appeal against that decision by giving written notice of the appeal and reasons to the

41 41 municipal manager within 21 days of the date of the notification of the decision. (2). (3). (4) When the appeal is against a decision taken by (a) (b) (c)..;..; or a political structure or political office bearer, or a councilor- (i) the municipal council is the appeal authority where the council comprises less than 15 councillors; or (ii) a committee of councilors who were not involved in the decision and appointed by the municipal council for this purpose is the appeal authority where the council comprises more than 14 councillors. [45] In s 1 of the MSA delegated authority is defined : (a) In relation to a delegation of power or duty by a municipal council, means the municipal council; or (b) In relation to a sub-delegation of a power or duty by another political structure, or a political office bearer, councilor or staff

42 42 member of a municipality, means that political structure, political office bearer, councilor or staff member and political structure in relation to a municipality, means the council of the municipality or any committee or any collective structure of a municipality, elected, designated or appointed in terms of a specific provision of the Municipal Structures Act. [46] Section 62 of the MSA does not make provision for an appeal against a decision of the full council of the first respondent. This is apparent from the wording of s 62 (4). This makes sense since it can hardly be expected that the first respondent would sit on appeal in judgment of its own decision. 3 As such, any appeal that the applicant may have intended against the decisions of the full council of the first respondent would have been incompetent. The appeal then could only have been considered as being against the decision taken on 20 March 2007 by the executive committee of the first respondent. 3 Thompson t/a Maharaj & Sons v Chief Constable Durban 1965 (4) SA 662; De Freitas v Somerset West Municipality 1997 (3) 1080 at 1082; Baxter : Administrative Law 1984, p 372

43 43 [47] The main thrust of the appeal committee s reason for dismissing the appeal was that it was an exercise in futility although other reasons were also furnished. This is indicative that the focus of the appeal committee was directed at the decision taken by the executive committee of the first respondent since it would not have had the power to adjudicate an appeal on the decision taken by the full council. As mentioned, the decision of the first respondent s executive committee of the 20 March 2007 reaffirmed the decision of the full council taken on 5 December 2006 after incorporating therein the three conditions referred to above. In these circumstances even if the latter decision was set aside, the council s decision would still stand. The decision by the full council on 3 April 2007 was in identical terms to the decision taken by the executive committee and likewise even if the latter decision was set aside the full council s decision would still stand. Hence the conclusion reached by the appeal committee that the appeal was an exercise in futility. [48] The above reasoning relating to the appeal being an exercise in futility was in all probability considered by the appeal committee

44 44 in the light of what was contained in the heads of argument filed on behalf of the first respondent which heads were before the appeal committee and which were argued by Mr. Rall. [49] In these proceedings Mr. Rall submitted that to set aside the decision of the executive committee of the first respondent would be pointless because the full council has passed resolutions to the same effect and accordingly it would serve no useful purpose to consider the decision of the appeal committee. Whilst that may be so, it does not detract from the fact that the appeal committee was charged with the duty to properly adjudicate the applicant s appeal against the decision taken by the executive committee of the first respondent and when requested, was obliged to provide the applicant with its reasons for the dismissal of the appeal. [50] As I have set out above, the applicant presented the appeal committee with facts which he considered amounted to a special case and in the context of those facts he asserted an infringement of important rights in the Bill of Rights and PAJA which warranted consideration by the appeal committee in relation to the decision

45 45 taken by the executive committee of the first respondent. This was to be so notwithstanding the fact that the decisions of the full council of the first respondent were in place and no matter which way the appeal was decided. [51] S 33 of the Constitution provides : 33(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair; (2) Everyone whose rights have been adversely affected by administrative action has the right to be given reasons. [52] PAJA which is the national legislation enacted to give effect to the rights in s 33 of the Constitution requires the administrative tribunal to furnish reasons where a person s rights or interests have been materially and adversely affected. In terms of section 5 (3) of PAJA, if an administrator fails to furnish adequate reasons for an administrative action, it must, subject to ss 4 and in the absence of proof to the contrary, be presumed in any proceedings for judicial review that the administrative action was taken without good

46 46 reason. SS 4 (a) states that there may be a departure from the requirement to furnish adequate reasons if it is reasonable and justifiable in the circumstances and subsection 4 (b) sets out the factors which must be taken into account when such a departure is made. 4 [53] The principal purpose of requiring an administrator to furnish reasons is to justify the administrative action that had been taken. 5 The underlying purpose or need for reasons to be furnished is to enable the person affected by the decision to know why it was taken. Lawrence Baxter encapsulates the importance of furnishing reasons for a decision as follows: 4 Subsection 4 provides: (a) An administrator may depart from the requirement to furnish adequate reasons if it is reasonable and justifiable in the circumstances, and must forthwith inform the person making the request for such departure. (b) In determining whether a departure as contemplated in paragraph (a) is reasonable and justifiable, an administrator must take into account all relevant factors, including (i) the objects of the empowering provision; (ii) the nature, purpose and likely effect of the administrative action concerned; (iii) the nature and extent of the departure; (iv) the relation between the departure and its purpose; (v) the importance of the purpose of the departure; and (vi) the need to promote an efficient administrative and good governance. 5 Bell Porto School Governing Body v Premier of the Western Cape Province 2002 (3) SA 265 (CC) para 159; See also : The Bill of Rights Handbook : Ian Currie and Johan De Waal : 5 th edition, s29.7, p 679

47 47 In the first place, a duty to give reasons entails a duty to rationalize the decision. Reasons therefore help to structure the exercise of discretion, and the necessity of explaining why a decision is reached requires one to address one s mind to the decisional referents which ought to be taken into account. Secondly furnishing reasons satisfies an important desire on the part of the affected individual to know why a decision was reached. This is not only fair : it is also conducive to public confidence in the administrative decision-making process. Thirdly and probably a major reason for the importance to give reasons rational criticism of a decision may only be made when the reasons for it are known. This subjects the administration to public scrutiny and it also provides an important basis for appeal or review. Finally reasons may serve a genuine educative purpose, for example where an applicant has been refused on grounds which he is able to correct for the purpose of future applications. 6 [54] The decision maker is required to explain his decision in a way which will enable a person affected by it to decide whether he agrees with it or if not why the decision was given against him and to decide whether the decision was incorrect on fact or on law and

48 48 to decide whether it is worth challenging. This requires the decision maker to set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions. 7 [55] The reasons given by the appeal committee for its decision have been mentioned above. Since all the decisions including the decision of the full council of the first respondent fall to be scrutinized in this application, I consider it expedient to deal with the adequacy or otherwise of those reasons in conjunction with the other reasons advanced by the first respondent for its decision in this application. Suffice it to mention that I do not think that the fact that the appeal against the decision of the executive committee of the first respondent may have been an exercise in futility because of the resolutions which had been passed by the full council of first defendant that this fact served as a bar to the applicant s right to 6 Baxter : Administrative Law (1984), p228 7 Federal Court of Australia : Ansette Transport Industries (Operations) (Pty) Ltd & Another v Wraith & Others (1983) 48 ALR 500 at 507 (lines 23 41) referred to with approval in Minister of Environmental Affairs & Tourism & Others v Phambili Fisheries (Pty) Ltd; Minister of Environmental Affairs and Tourism & Others v Bat Star Fishing (Pty) Ltd 2003 (6) SA 407 (SCA) para 40

49 49 be furnished with adequate reasons for the appeal committee s decision to uphold the decision taken by the executive committee of the first respondent and to dismiss the applicant s appeal. Whether the decision of the council of first respondent was administrative action [56] The first respondent initially contended that the decision of its council to dispose of the properties was not administrative action as contemplated by PAJA but the exercising of executive power of the council and therefore the decision was not reviewable. In supplementary heads of argument filed on behalf of the first respondent, Mr. Rall, having regard to the principles enunciated in Grey s Marine 8, conceded that the conduct complained of fell within the purview of administrative action as set out in s 33 of the Constitution and PAJA. He however, submitted that the applicant must show that his rights had been affected by the administrative 8 Grey s Marine Hout Bay (Pty) Ltd v Minister of Public Works 2005 (6) SA 313 (SCA)