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[2016] ZAWCHC 69
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Tre Donne Homeowners Association and Another v Bergwater Plase CC (A476/14) [2016] ZAWCHC 69 (9 June 2016)

IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO: A476/14
DATE:
09 JUNE 2016
In
the matter between:
TRE
DONNE HOMEOWNERS’
ASSOCIATION
.......................................................
First
Appellant
CITY
OF CAPE
TOWN
..............................................................................................
Second
Appellant
And
BERGWATER
PLASE
CC
...................................................................................................
Respondent
Coram:
Dlodlo, J et Henney J et Salie-Hlophe J
Dates
of Hearing: 13 May 2016
Date
of Judgment: 09 June 2016
JUDGMENT
DLODLO,
J
INTRODUCTION
[1]
The Respondent was the developer of the luxury estate known as Tre
Donne situated near Sir Lowry’s Pass Western Cape Province.

There were conditions of the coming into being of the estate. For
instance one of such conditions of establishment of the estate
in
terms of the Land Use Planning Ordinance 15 of 1985 was that the
developer must establish a homeowners association. It was the

responsibility of the developer to draft the constitution. This it
did. The Appellant is the Homeowners’ Association which
the
developer brought into being by crafting the constitution thereof
pursuance to the conditions imposed on the developer in terms
of the
Land Use Planning Ordinance. The conditions of subdivision were
imposed by the City of Cape Town. The constitution drafted
by the
developer had to be approved and was in fact approved by the City of
Cape Town. Contained in the said constitution are two
clauses which
form the subject of this appeal. These are clause 6.3 which reads as
follows:
“
The
developer or representative of the developer will be an Excom member
in perpetuity”; and clause 10.4 which reads as follows:
“
The
developer will not be liable to pay any levies with regard to any
unsold properties within the development.”
[2]
The Appellant describes these aforementioned clauses as unusual. I
hasten to mention that in the answering papers an expert
witness Mr.
Maree stated the following:
“
In
my experience with regard to a development of this nature, the
developer of such community scheme is sometimes, in terms of special

conditions asserted in its constitution by a developer, exempted from
paying levies to the homeowners association in respect of
unsold and
undeveloped properties in the development for the duration of a
specific development period.”
It
is of importance that paragraph 15.3 of the Constitution in its
original form stated the following pertaining to the clauses

complained of by the Appellant:
“
Paragraphs
6.3 and 10.4 of this constitution cannot be amended.”
The
above is described by the Appellant as an entrenchment clause.
[3]
The developer reportedly owns eight unsold erven and two of the
biggest and most valuable erven are inhabited by the developer’s

members and employees and no levies are paid in respect of these
erven. In contravention of paragraph 15.3 of the constitution
in its
original form and on 13 May 2010 at an annual general meeting, the
Appellant removed clauses 6.3, 10.4 and 15.3 from the
constitution of
the Appellant. In response the Respondent launched an application
which is the subject-matter of this appeal in
terms of which it
sought a declaratory in terms of which the decision taken by the
Appellant to remove clauses 6.3, 10.4 and 15.3
from the Constitution
are declared unlawful. In the alternative (as per an amendment of the
Notice of Motion) the Respondent sought
an order in terms of which
the decision by the Appellant is reviewed and set aside. On 27 May
2015 my brother Smit AJ granted the
relief as prayed for in
paragraphs (a), (b), (c) and (d) of the Notice of Motion. This appeal
concerns the findings and an order
made by Smit AJ.
BACKGROUND FACTS
[4]
It has been mentioned in the introductory portion of this judgment
that the Respondent is the developer of the Tre Donne Estate.
It must
also be added that the estate concerned is a residential development
which originally comprised 81 erven and reportedly
it now comprises
87 erven. At the time that the subdivision was approved by the then
Helderberg Municipality (subsequently inherited
by the City of Cape
Town) a condition of subdivision was that the constitution be
prepared for a homeowners’ association
which would manage the
estate and that the then local authority had to approve the said
constitution. This as we now know eventuated.
[5]
The lands on which the roads are situated within the development were
transferred to the Appellant and the latter is thus responsible
for
the maintenance thereof as well as the maintenance of the storm water
and sewerage service on the property (as well as the
water supply to
the individual owners and refuse removal). In order to enable the
Appellant to properly function the Appellant
(Homeowners’
Association) is entitled to raise a monthly levy against each and
every property in the development.
[6]
From the year 2000, when the Constitution in its original form was
approved by the City certain amendments were made to the
constitution
over a period of time (for an example in 2002). Thereafter and from
September 2011, the Appellant started rendering
levy statements to
the developer (the Respondent in these proceedings) for monthly
levies in relation to the unsold properties
within the development.
In response to these levy statements received a letter was addressed
to the estate manager pointing out
that the developer is not indebted
to the Appellant because the latter had no entitlement to raised
levies against the former in
terms of the constitution.
[7]
A meeting was subsequently held and a decision was arrived at in
terms of which what was perceived to be the offending clauses
in the
constitution were removed in their entirety. On 10 March 2011 the
City of Cape Town approved the amendments only insofar
as it
addresses the requirements in Section 29 (2) (b) (ii) and (c) of
Ordinance 15 of 1985 commonly referred to as LUPO. The contention

advanced on behalf of the developer is that by removing clauses 6.3,
10.4 and 15.3 from the original constitution of the Tre Donne

Homeowners’ Association, the Appellant did not address any
requirements as set out in Section 29 (2) (b) (i) and (ii) and
(c) of
LUPO and that therefore the City of Cape Town did not approve of
these amendments. On behalf of the Appellant it is contended

differently.
GENERAL
DISCUSSION AND OBSERVATIONS
[8]
The Appellant’s case on appeal, according to Mr. Bridgman, is
based on two main points, namely the principle of legality
and that
the developer followed an incorrect procedure. As far as the
principle of legality is concerned we were referred to
City of
Tshwane Metropolitan Municipality v RPM Bricks
2008 (3) SA 1
(SCA) at para 24 of the judgment. I set out paragraph [24] of the
latter judgment:
“
[24]
With respect to Boruchowitz J, what he postulates is, in my view, the
antithesis of that demanded by the constitution. Section
173 of the
Constitution enjoins Courts to develop the common law by taking into
account the interests of justice. The approach
advocated by the
learned Judge, if endorsed, would have the effect of exempting Courts
from showing due deference to broad legislative
authority, permitting
illegality to trump legality and rendering the ultra vires doctrine
mitigatory. None of that would be in
the interests of justice. Nor,
can it be said, would any of that be sanctioned by the Constitution,
which is based on the rule
of law, and at the heart of which lies the
principle of legality.”
We
were also referred to
Fedsure Life
Assurance Ltd v Greater Johannesburg Transitional Metropolitan
Council
[1998] ZACC 17
;
1999 (1) SA 374
(CC) where the
Constitutional Court made the following observation:
“
The
rule of law-to the extent at least that it expresses this principle
of legality – is generally understood to be a fundamental

principle of constitutional law.”
[9]
In Mr. Bridgman’s contention not only does clause 10.4 of the
Constitution of Tre Donne Home Owners’ Association
(in its
original form) offends against Section 29 of Lupo but the attempt to
entrench it by clause 15.3 offends against the Constitution
itself in
particular Section 151 (4) providing that the National or a
Provincial Government may not compromise or impede a municipality’s

ability or right to exercise its powers or perform its functions. In
Mr. Bridgman’s submission the entrenchment clause seeks

explicitly to compromise and impede the municipality’s ability
to exercise its powers and perform its functions. I do not
share the
view that the entrenchment clause 15.3 of the Appellant’s
Constitution in its original form trumps the Constitution
of the
Republic of South Africa. It is true that the Court
a
quo
expressed a view in an
obiter
dictum
that the provisions of clauses
10.4 and 15.3 may very well be
ultra
vires
the provisions of the enabling
subsection 29 (2) (c) of LUPO. But the Court
a
quo
also stated “
but
this does not mean that the Respondents may simply erase those
provisions from the Constitution.”
The
views expressed by the trial Judge in an
obiter
dictum
hardly benefits the Appellant
herein. The Appellant did not file a counter application for any such
conceivable declaration in
the court
a
quo.
The second leg of Mr. Bridgman’s
argument is that a wrong procedure was followed by the developer in
dealing with the problem
it faced brought about by the removal of the
offending clauses. It is argued that an appeal in terms of
Section 62
of the
Local Government Municipal Systems Act 32 of 2000
could have
been a better option for the developer. It is contended that the
decision of the City of Cape Town could also have been
appealed
against in terms of
Section 44
(1) (a) of LUPO. Failing the two
options in Mr Bridgman’s contention the developer should have
brought a review application
in terms of Section 7 of the Promotion
of Administrative Justice Act 3 of 2000 (PAJA).
[10]
Perhaps in order to facilitate this discussion it is of importance to
refer specifically to relevant Sections of LUPO. Section
41 (1) of
LUPO provides as follows:
“
When
the administrator or council grants authorisation, any application or
adjudicates upon an appeal under this Ordinance, he may
do so subject
to such conditions as he may think fit”.
Section
29 (1) of LUPO reads as follows:
“
Either
the administrator or the council concerned, as the case may be, may
impose conditions under section 42 as the granting of
an application
for subdivision in terms of section 25(1), in relation to the
compulsory establishment by the applicant for the
subdivision of a
homeowners’ association”.
Section
29 (2) (b) reads as follows:
“
(b)
shall have a constitution which-
(i)
has as its object the control over
and the maintenance of buildings, services and amenities arising from
the subdivision concerned;
(ii)
provides for the implementation of
the provisions of paragraph (c), and
(iii)
has been approved by the council
concerned in order to ensure that the provisions of subparagraphs (i)
and (ii) are being complied
with, and
(c)
shall have as its members the owners of land units arising from the
subdivision concerned who shall be jointly liable for the
expenditure
incurred in connection with the association”.
THE CONSTITUTION
OF THE APPELLANT
AND THE APPROVAL
OF AMENDMENTS
THERETO
BY THE CITY OF CAPE TOWN
[11]
As pointed out earlier the City of Cape Town approved the proposed
amendments to the Constitution of the Appellant “
only
insofar as it pertains to Section 29 of the Ordinance”.
Obviously reference to Section 29 hereinabove contained is reference
to Section 29 (2) (b) because that is the Section relevant
herein. In
other words, as Mr. Heunis pointed out, the City only approved the
amendment insofar as it related to: (a) the control
over and the
maintenance of buildings, services and amenities; (b) the
implementation of paragraph (c) thereof which relates to
the
liability of the landowners with regard to the expenditure incurred
by the Homeowners’ Association. The City did not
grant consent
to any amendments to the Constitution other than the ones referred to
above.
[12]
One needs to bear in mind that a local authority (which the City is)
does not have the authority to review and set aside its
own decision
in the sense that it approved the original Constitution which
entrenched the rights of the developer in relation to
unsold erven.
Seemingly the biggest fear on the part of the Appellant is that the
right of the developer shall endure in
perpetuity. It, however,
needs to be borne in mind that as soon as the last erven is sold, the
clauses complained of shall find
no application. Consequently the
City of Cape Town does not have the authority to consent to an
amendment that will remove these
rights or that will disentitle the
developer to these rights. That is the reason why, probably, the City
chose to abide and is
not participating in these proceedings. Regard
being had to the qualification the City attached to the so-called
approval, it is
abundantly clear that indeed the City was fully aware
of this truth. It must have been well advised not to take sides.
[13]
Generally Constitutions of governing groups or cluster housing (as
the Appellant herein) differ widely on varying practices.
Thus the
absence of uniformity simply means that the provisions of each new
Constitution of a homeowners’ association must
be studied in
order to solve any conceivable management issues. See in this regard
LAWSA
2
nd
edition, Volume 24 para 295. In terms of the conditions of
subdivision in terms of LUPO as well as in terms of the Appellant’s

Constitution in its original form all the individual owners of
properties within the development called Tre Donne are members of
the
Homeowners’ Association (the Appellant herein). The developer
(the Respondent in these proceedings) holds title of the
unsold
properties in terms of the original title deed of the undivided
property (Farm 854 Gardenia).
[14]
The fact of the matter is that all the individual owners hold title
in terms of new title deeds created when transfer was effected
of the
individual plots from the old mother deed (in terms of which the
developer holds title) to the individual owners’
properties
within  the development. Clause 6.3 and 10.4 of the Appellant’s
Constitution in its original form were certainly
entrenched in the
Constitution with the consent of the City of Cape Town and the sole
purpose thereof was to provide protection
to the developer. Even Mr.
Abraham Tertius Maree (one of the deponents in the answering papers)
stated it categorically that:
“
12.
The rationale behind such a condition is that a developer normally
bears the bulk of the expenses of providing services, roads
and other
infrastructure during the development period and should not be
burdened with levies in respect of his unsold, unimproved
erven in
addition to such expenditure during that period”.
I
am in full agreement with the observations made by Mr. Maree. It
makes business sense that the developer protects itself in the
manner
it was done in the instant case. Accordingly the Appellant did not
and does not have the authority and entitlement to resort
to removing
these clauses from the Constitution. The decision taken by the
Appellant to remove these clauses was certainly
ultra
vires
and should have been correctly
perceived to be an impossible one to take. See in this regard
Eastern
Cape Provincial Government and Others v Contractprops 25
(Pty)
Limited
2001 (4) SA 142
(SCA).
IS THE
CONSTITUTION A CONTRACT?
[15]
It is important to note that the Appellant is a voluntary association
constituted in terms of the conditions of subdivision.
Members of the
Appellant are all registered owners of properties in the estate. They
became members of the Appellant voluntarily
upon purchasing
properties within the estate subject to the Constitution in its
original form ie including the clauses complained
of and which are
under discussion. See
Dainfern Valley
Homeowners’ Association v Falkner and others
2010 (JOL) 2060 at 6 (GSJ). Those clauses could not be varied by the
Appellant. In my view the Constitution in its original form

constitutes a contract between the members which can only be amended
in terms of that same contract. That this resembles a non-variation

clause in commercial contract is beyond question. A pertinent
question was put to Mr. Bridgman in this regard. But the response

sought to water down the contractual nature of this establishment.
Mr. Bridgman argued that even if it was a contract with a
non-variation
clause his submissions will remain the same. He
referred us to a paper apparently delivered in August 2015 by
Professor Dale Hutchinson
in which the latter concluded that the
non-variation clause as such is not cast in stone. The Professor
enumerates five reasons
why he contends the non-variation clause is
not cast in stone. These are: “
(i)
can be trumped by countervailing public policy; (ii) especially if
constitutional value is implicated;
(iii)
expect arguments in future that enforcement of the nvc would be
offensive to public policy in the circumstances of the case;
(iv)
public policy does not take into account considerations of fairness
and reasonableness”.
[16]
I do not intend to take issue with the Professor. It suffices to
mention thought that our law as it stands recognises non-variation

clause in a contract as meaning exactly what it says. Non-variation
clauses are part and parcel of virtually all contracts concluded
by
persons engaged in business enterprise. The same must be said of
restraint of trade clauses in an employment agreement. The
advent of
the constitutional era did not outlaw clauses like non-variation and
restraint of trade. Of course these when inserted
in a contract
and/or an employment agreement (as the case may be) must not be
contra bones mores
.
The restraint of trade must not prevent a person from being
economically active in keeping with the prescripts of the
constitution.
[17]
Perhaps in the interest of completeness one needs to mention that the
homeowners’ association is established (as it were)
by an
application for subdivision as a body corporate must have a
constitution which has as its object control over and the maintenance

of buildings, services and amenities arising from the subdivision,
and to provide for the limitation of the provisions relating
to the
expenditure set out below and which has to be approved by the
municipality (the then Helderberg Municipality). See
LAWSA
2
nd
Edition, Volume 28, para 471. It is indeed correct as submitted by
Mr. Heunis that by approving the constitution submitted to it
by the
developer at a time of subdivision, the City of Cape Town performed
an administrative function. Our law is that administrative
decisions
stand until they are set aside by a Court. See
Club Mykonos
Langebaan Limited v Langebaan Country Estate Joint Venture and Others
2009 (3) SA 546
(C). In
Oudekraal Estates (Pty) Ltd v City of Cape
Town and Others
2004 (6) SA 222
(SCA) also reported as
[2004] 3
ALL SA 1
;
[2004] ZASCA 48
it was found that certain permission
granted by the administrator was unlawful and invalid from inception
but then the Supreme
Court of Appeal proceeded to hold as follows in
paragraph 26:
‘
Is
the permission that was granted by the Administrator simply to be
disregarded as if it had never existed? In other words, was
the Cape
Metropolitan Council entitled to disregard the Administrator’s
approval and all its consequences merely because
it believed that
they were invalid provided that its belief was correct? In our view,
it was not. Until the Administrator’s
approval (and thus also
the consequences of the approval) is set aside by a court in
proceedings for judicial review it exists
in fact and it has legal
consequences that cannot simply be overlooked…No doubt it is
for this reason that our law has always
recognised that even an
unlawful administrative act is capable of producing legally valid
consequences for so long as the unlawful
act is not set aside.’
The
above has come to be known as the Oudekraal principle. In simple
language this says the consequences of those actions remain

regardless of whether they were correct or not.
[18]
I would be slow in accepting that the drafting of the constitution of
the Appellant herein must be regarded as a unilateral
act. I do not
accept that Section 42 (3) (a) of LUPO specifically allows for the
amendment of conditions such as those contained
in the Appellant’s
constitution. Sections 42 (1) and 42 (3) quoted and referred to
supra
make it apparent that these provisions seemingly have no
relevance herein. The constitution ( and in particular the clause
that
stipulates that the developer does not have to pay levies in
relation to unsold erven) does not dictate terms in perpetuity. At

the risk of being repetitive, as soon as the last erf is sold this
clause clearly has no further consequences for the Appellant.
It is
contended on behalf of the Appellant that the Constitution of the
Appellant is a form of delegated legislation. Mr. Bridgman
relied on
Administrative Law
by Professor Yvonne Burn for the
aforementioned contention concerning subordinate legislation. At page
195 the Professor states
the following:
“
The
characteristics of subordinate legislation, which is generally
directed towards implementing social policies intended to advance
the
public interest, rather than resolving individual disputes, are the
following:
(1)
Subordinate legislation creates,
terminates, or varies general relationships and the same legislative
form must be applied consistently
whether a relationship is created,
terminated or varied. Therefore, a general relationship cannot be
regulated by way of resolution.
(2)
Specific rules of administrative law
govern the repeal, amendment, promulgation and tabling of subordinate
legislation. Legislative
administrative actions need not be tabled in
order to be valid. If the action is invalid tabling will not cure its
invalidity.
(3)
The sub-delegation of an
administrative power will be accepted only where there is express
authority to delegate, or the delegation
is strongly implicit in the
wording of the enabling statute. The reason behind this prohibition
is obvious –legislative administrative
actions create general
rules which have general application and effect and the enabling Act
determines who should exercise the
specific power.
(4)
Subordinate legislation must fall
within the scope of the Constitution, and the enabling Act. It may
not conflict with either the
Constitution or the empowering statute
or restrict the provisions of a statute. Further, being subordinate
legislation, it may
not be vague. In other words the public must know
what is expected of them, or what they are prohibited from doing or
allowed to
do in terms of the legislative instrument in question.”
[19]
In my view there is no need to compound issues in the instant case.
Brought to its bare minimum, the issue is simply that the

Constitution as approved by the City of Cape Town governs the
internal workings of the homeowners’ association (the Appellant

in
casu
) in relation to property owned by the Appellant itself
and the services rendered by it to the members of the association.
Therefore
clause 15.3 of the Constitution in its original form does
not offend against the constitutional mandate contained in Section
151
(3) of the Constitution of the Republic of South Africa. Perhaps
one needs to underline that all the members of the Appellant became

voluntary members of it subject to the Constitution (as approved by
the City of Cape Town) when they purchased properties within
the
estate. I fully agree with Mr. Heunis that the City of Cape Town is
functus officio
in relation to the decision previously taken
in terms of Section 29 of LUPO. In
De Freitas v Somerset West
Municipality
1997 (3) SA 1080
CPD the Court reasoned as follows
inter alia
:
“
It
follows that the application should be granted unless Mr. Roux was
not functus officio and was entitled to withdraw his approval
once he
realised that his assumption about the designed system’s
ability to cope with a 1:50 year flood was incorrect or
unless
respondent’s counter-application for an order setting aside the
approval should succeed. (I pause here to say, in
parenthesis, that I
am not sure that Mr. Roux would have been entitled to impose as a
condition the requirement that the system
had to be able to cope with
a flow of 5.4 cubic metres of water a second (5.4 cumecs), which the
parties appear to accept as a
1:50 year flood, because included in
the figure of 5,4 cumecs is runoff from higher lying developed land
which cannot be regarded
as natural flow which respondent, as owner
of the land immediately to the north of erf 4698, is entitled to
discharge upon applicant’s
land. In view of the conclusion to
which I have come on the other parts of the case, however, it is not
necessary for me to express
an opinion thereon.)
Was
Mr. Roux functus officio when he purported to withdraw his approval?
In
my view, the answer to that question is clearly in the affirmative.
That that is so appears clearly from the authorities to which
Mr.
Tockar, who appeared for the applicant, referred me, viz Thompson,
trading as Maharaj & Sons v Chief Constable, Durban
1965 (4) SA
663
(D) (where Henning J said:
‘
Generally
speaking, a person to whom, a statutory power is entrusted is functus
officio once he has exercised it, and he cannot
himself call his own
decision in question’)
and
Baxter Administrative Law at 375, as well as Wiechers Administrative
Law at 169 (it being clear that Mr. Roux’s decision
in this
case to approve the plans is what Professor Wiechers calls a
‘beneficial disposition’).
Should
Mr. Roux’s decision be set aside?”
Indeed
where the functionary had the power to decide and it applied its mind
(as the City did when approving the original Constitution)
the
decision can as a general rule not be set aside, altered or varied
even if on the merits it was ‘wrong’ and in
making it the
functionary concerned made an error of fact. See
De
Freitas v Someset West Municipality
supra
. In
fact in the latter case it was categorically held that “to hold
otherwise would be to turn basic principles of administrative
law
relating to discretionary decisions on their heads”. I agree
with the above reasoning.
IS
THE PROCEDURE ADOPTED
BY
THE DEVELOPER CORRECT?
[20]
In terms of Section 7 of the Promotion of Administrative Justice Act
3 of 2000 (“PAJA”):
“
(a)
only an administrative action can be reviewed in terms of said Act;
and
(b)
administrative action is defined as follows:
‘
administrative
action means any decision taken, or any failure to take a decision,
by –
(a)
An organ of State, when –
(i)
Exercising a power in terms of the
Constitution or Provincial Constitution; or
(ii)
Exercising a public power or
performing a public function in terms of any legislation: or
(b)
A natural or juristic person, other than
an organ of state, when exercising a public power or performing a
public function in terms
of an empowering provision”.
See
Promotion of
Administrative Justice Act: A
Commentary
(2
nd
Edition by Ian Curry page 43).
Regard
being had to the aforegoing decision by the Appellant to amend the
Constitution contrary to the stipulations (entrenchment
clause)
contained therein cannot in my view be classified as an
administrative action in terms of PAJA. If I am correct in this

regard this certainly means the review process was not at all
available as a remedy to the Respondent, the developer.
[21]
In the Court a
quo
the developer sought a declaratory. This is
the remedy also resorted to in the case
Club Mykonos Langebaan v
Langebaan Country Est Joint Venture
2009 (3) SA 546
(C). The
following observation made by the Court in
Club Mykonos
supra
is of importance:
“
The
primary relief sought was declaratory in nature, and the court could
only make a finding about the second enforcement issue
once it had
determined the first declaratory issue. In Luzon Investments (Pty)
Limited v Strand Municipality and Another
1999 (1) SA 215
(C) at
230(a) the full bench quoted with approval from the decision of the
Supreme Court of Canada in Solosky v The Queen 1979
(105) DLR (3D)
745 at 745 where it was held that ‘declarator relief is a
remedy neither constrained by form nor bounded by
substantive
content, which avails persons sharing a legal relationship, in
respect of which a real issue considering the relative
interests of
each has been raised and falls to be determined”.
In
Luzon Investments, where a live and real issue between the parties
have been fully canvassed in the evidence and in argument
it was
found to be appropriate to make an order which has settled the
dispute between the parties being made in terms of the prayer
for
alternative relief”.
I
am of the view that it is pointless for purposes of this judgment to
spend too much time on the allegation (for instance) that
the
Constitution of the Appellant is not a recording of an agreement.
This aspect was correctly put to rest in the following formulation
of
the Court in the same
Club Mykonos
case
supra:
“
It
must be born in mind in the Coopers & Lybrand matter that the
court was concerned with the interpretation of the document

evidencing a bilateral juristic act, namely an agreement to receive
book debts. The imposition by the council of conditions in
question
was not the recording of an agreement but the unilateral
administrative act. There are, of course aspects in the approval

process which resemble the process of concluding a contract. Thus in
Estate Breed v Perry-Urban Areas Health Board
1955 (3) SA 523
at
431C-U it was said that ‘there is authority and reason for
holding that steps by which a township is established ….involve

mutual consent between the administrator and the applicant as to the
township conditions and the administrator may be regarded,
not
inappropriately, as making an offer to the applicant which latter
must accept if a township is to be brought into the existence’.

Once they are imposed the conditions acquire a force of law because
section 39 of LUPO compels both the local authority and all
other
persons to comply with them”.
Therefore
one can safely assume that the City of Cape Town in imposing the
condition that the Respondent had to present the Constitution
to it
for its approval made an offer which was accepted by the Respondent
and once approved the terms and conditions of the Constitution
of the
Appellant formed the base (as it were) of the contract between
firstly the Respondent (developer) and the City of Cape Town
and
secondly between the Respondent and the individual members of the
homeowners’ association (the Appellant herein).
[22]
The Appellant’s argument that the initial application that
served before my brother Smit AJ should have been by way of
review in
terms of Rule 53 of the Uniform Rules of Court is in my view not
correct. In
Johannesburg Stock Exchange
and Another v Witwatersrand Nige Limited and Another
1988 (3) SA 132
(A) at 152 Corbett JA (as he then was) stated the
following:
“
Broadly,
in order to establish review grounds, it must be shown that the
president failed to apply his mind to the relevant issues
in
accordance with the ‘behests of the statute and the tenets of
natural justice’.
Such
failure may be shown by proof, inter alia, that the decision was
arrived at arbitrarily and capriciously or mala fide or as
a result
of unwarranted adherence to a fixed principle or in order to further
an ulterior or improper purpose; or that the president
misconceived
the nature of the discretion conferred upon him and took into account
irrelevant considerations or ignored relevant
ones; or that the
decision of the president was so grossly unreasonable as to warrant
the inference that he had failed to apply
his mind to the matter in
the manner afore stated (some of these grounds tend to overlap)”.
In
the first place the decision by the Appellant to remove what it
perceived to be offending clauses in the Constitution could never

have been made because to do so would be unlawful as a result of the
clause in the same Constitution which barred the amendment
or the
removal of the applicable clauses from the Constitution.
[23]
It is argued on behalf of the Appellant that the Respondent should
(in the alternative) have appealed in terms of
Section 62
of the
Local Government Municipal Systems Act 32 of 2000
by giving written
notice of such appeal as per invitation to do so in a letter of 10
March 2011. In the first place the letter
of 10 March 2011 is
addressed to the chairperson of the Appellant and not the Respondent,
the developer. The same argument is brought
to the fore and is based
on the letter from the City dated 21 April 2011. It is being argued
that the Respondent should have appealed
against decision removing
the clauses under discussion in terms of
Section 44
(1) (a) of LUPO.
It is needless to mention that the letter of 21 April 2011 was also
addressed to the chairperson of the Appellant
and not the Respondent
who is the developer. Moreover, the decision was not taken by the
City of Cape Town but it was taken by
the Appellant itself. The point
is that it is not the City of Cape Town that amended the Constitution
– the Appellant did
that. All what the City did ultimately was
merely to rubber stamp the amendment. The City was not empowered to
do what it did.
This appeal has no merits and it must be dismissed.
ORDER
[24]
In the circumstances I make the following order:
(a)
The appeal is dismissed with costs.
D
V Dlodlo
Judge
of the High Court
R
C Henney
Judge
of the High Court
I
agree and it is so ordered.
G
Salie-Hlophe
Judge
of the High Court