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[2016] ZAWCHC 149
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Atlantic Beach Home Owners Association NPC v City of Cape Town and Another (23868/2015) [2016] ZAWCHC 149; [2017] 1 All SA 99 (WCC) (28 October 2016)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 23868/2015
In
the matter between:
ATLANTIC
BEACH HOME OWNERS ASSOCIATION
NPC
Applicant
and
CITY
OF CAPE TOWN
First
Respondent
ATLANTIC
BEACH MANAGEMENT (PTY) LTD
Second
Respondent
Court
:
Justice J Cloete
Heard
:
14 June 2016 and 29 August 2016
Delivered
:
Friday 28 October 2016
JUDGMENT
CLOETE
J
:
Introduction
[1]
The
applicant (HOA) asks for final interdictory relief against the second
respondent (ABM) to restrain it from conducting certain
activities
(detailed in the amended notice of motion) from the latter’s
golf club house situated in the Atlantic Beach Golf
Estate at
Melkbosstrand
outside Cape Town. At all material times Mr Allen Usher has been the
directing mind of ABM. He is also the deponent
to ABM’s
affidavits. According to HOA both Mr Usher and another shareholder of
ABM, a Mr Bill Taylor, are also homeowners
in the estate. Mr Usher
describes himself as a businessman, entrepreneur and estate agent.
[2]
ABM
in turn counter-applies for a similar order against HOA in respect of
certain activities (detailed in the notice of counter-application)
conducted by it since about 2011 through appointed contractors from
its leisure centre which was erroneously built on the same
land as
the clubhouse. It is not in dispute that the activities which HOA and
ABM respectively complain of are indeed conducted.
[3]
HOA
premises its relief on two bases. The first is a restrictive title
deed condition imposed in its favour in a title deed registered
in
the Deeds Office on 14 October 1999. The second is the City of
Cape Town Municipal Planning By-law 2015 (the planning by-law).
HOA
contends that ABM’s activities are in breach of both. ABM on
the other hand only relies on the planning by-law in support
of its
counter-application, given that the title deed restriction does not
operate in its favour.
[4]
HOA
initially also sought relief against the first respondent (the City).
The latter is the owner of the land which it leases to
ABM in terms
of a notarial lease concluded on 13 July 1999 between its
predecessor, the Melkbosstrand local council (which
for convenience I
will also refer to as the City) and the developer of the golf estate,
Johnnic Property Developments Limited and
later Skeena Trading
Company (Pty) Ltd (the developer). The notarial lease was ceded and
assigned to ABM by the developer on about
30 August 2004. The
City is also of course the entity responsible for regulating its own
zoning scheme in relation to the
land under the planning by-law.
[5]
On
26 February 2016 the City agreed to take all reasonable measure to
enforce compliance with clause 5.4 of the notarial lease which
stipulates that the lessee shall at all times observe the conditions
of title of the land concerned. It also agreed to enforce
the
planning by-law. This agreement was made an order of court on the
same date. The order also records that HOA would not proceed
further
against the City.
[6]
In
its counter-application ABM seeks an order against HOA only (and not
the City as well). The City has however filed affidavits
for the
assistance of the court explaining its attitude towards the zoning
issue. These affidavits were filed at the behest of
ABM and HOA
consented to their admission.
[7]
There
is also a separate application by HOA to strike out certain
paragraphs of ABM’s answering affidavit in the main
application.
I will deal with this later.
Relevant
factual background
[8]
Given
the history of this matter and the nature of the defences raised by
ABM it is necessary to set out the relevant factual background
in
some detail. The Atlantic Beach Golf Estate comprises 860 residential
erven plus another 3 erven – namely 3656, 3822 and
3828
Melkbosch Strand – which make up the golf course land. It is
the golf course land which forms the subject matter of
the dispute.
It is this land which is owned by the City and leased to ABM in terms
of the notarial lease which terminates on 31
December 2048, subject
to ABM’s right to renew the lease for a further 49 years.
[9]
Back
in 1998 the City granted approval to the developer in terms of
s 25(1) of the Land Use Planning Ordinance 15 of 1985 (LUPO)
for
the rezoning, subdivision and development of the land on which the
estate is situated, subject to certain conditions. One of
the
conditions was that once the development of the golf course had been
completed, the golf course land was to be subdivided from
the rest of
the development and transferred back to the City. This occurred, as
did the conclusion of the notarial lease.
[10]
The
golf club house is situated on Erf 3822. It is owned and operated by
ABM. The leisure centre is also erroneously situated on
Erf 3822, on
a portion which ABM sub-leases to HOA. The leisure centre is owned
and operated by HOA through independent contractors.
The latter is in
the process of procuring subdivision of ‘
its’
portion of Erf 3822 as a preliminary step towards taking transfer of
that portion.
[11]
The
leisure centre has a swimming pool, indoor gym, tennis courts, a
cafeteria and a function room which it uses to host weddings,
birthday parties, conferences, corporate gatherings and the like.
[12]
ABM
uses its clubhouse to also host functions such as weddings, gala
dinners, cocktail parties and conferences. It has hosted these
functions since the clubhouse opened in 2000, at an average of
approximately 20 such functions per year. These have been hosted
for
members of the public, as well as members of the HOA.
[13]
Although
HOA has been aware of these activities since 2000 (it was
incorporated on 6 January 1999) it is fair to say that HOA
has
only been in a position to do something about them since 2005 for the
following reasons. First, the development phase was only
completed
during about September 2005, and until that date the developer
enjoyed the right to host golf tournaments ‘
or
other events’
in terms of clause 3.8.3 of the HOA’s memorandum of
incorporation. Second, during the development phase the developer, as
it was entitled, appointed the directors of HOA (then referred to as
trustees) and also appointed ABM to manage the estate and
to run HOA
until completion of the development. It was only at the end of the
development phase that HOA could appoint its own
directors and became
entitled to cancel ABM’s management contract. As previously
stated, the notarial lease was only ceded
and assigned to ABM during
August 2004.
[14]
On
the ground floor of the clubhouse there are three boardrooms or
meeting rooms and a spa (the beauty salon). Upstairs there is
a
banqueting room (which can accommodate 150 people and which can be
used as a conference facility) and a restaurant (which can
accommodate 70 people). According to ABM the clubhouse was designed
and planned with the intention to use these features and facilities.
Construction was completed shortly before it opened its doors in
2000. The beauty salon has operated from the clubhouse since 2002.
It
is rented out to a private entity which has no connection with the
estate.
[15]
The
relevant title deed restriction contained in the deed of transfer in
terms of which the developer transferred the golf course
land back to
the City (then known as the Blaauwberg Municipality) provides that:
‘
The
[erven]
herein
transferred shall be used for a golf course and golf club facilities
only.’
[16]
There
is no dispute that this title deed restriction was imposed in HOA’s
favour, nor that ABM was not a party to the agreement
underpinning
it. The words ‘
golf
club facilities’
are not defined. However HOA’s memorandum of incorporation
defines the golf club as ‘
the
communal buildings serving the golf course’.
Clause 4.2 of the Executive Summary annexed to the deeds of sale of
the individual residential erven (whose purchasers thus became
members of the HOA) records that:
‘
In terms
of the title conditions of the erven upon which the Club is located,
the property may not be used for any purpose other
than a golf
course.
[17]
Clauses
5.4 and 7 of the notarial lease stipulate that:
‘
5.4
The lessee shall at all times observe the conditions of title of the
property…
7.
The leased premises shall only be used for the purpose of a golf
course, club
house and other ancillary uses relating thereto, as from
time to time may be determined by the lessee.’
[18]
The
words ‘
other
ancillary uses relating thereto’
are not defined. Clause 5.1.2 of the notarial lease places an
obligation on the lessee to construct and maintain ‘
an
appropriate clubhouse and other facilities and amenities considered
by the lessee to be appropriate’
;
‘
the
facilities’
are defined as ‘
all
improvements and amenities to be erected on the property including
the clubhouse, restaurant and other amenities’
;
and ‘
club’
is defined as ‘
the
club operations to be conducted on the property by the lessee or its
nominee as provided in this notarial lease’.
[19]
Clauses
5.3 and 5.5, and their positioning in relation to clause 5.4, are
also relevant. Clause 5.3 provides that the lessee ‘
shall
conduct the activities for which the leased premises are let in
accordance with generally accepted good practices and will
promote,
encourage and foster the game of golf’
for those ‘
entitled
to play golf on the golf course’
.
Clause 5.4 then deals with the obligation of the lessee to ‘
at
all times observe the conditions of title of the property’.
Thereafter clause 5.5 obliges the lessee to ‘
procure
the formation of a licenced club on the leased premises’
for those ‘
entitled
to play golf on the golf course’.
[20]
As
previously stated the development phase of the estate came to an end
during about September 2005. From approximately that time
ABM’s
use of the clubhouse facilities became controversial.
[21]
Although
not clear exactly when the dispute arose, arbitration proceedings
commenced in December 2006 in relation to ABM’s
use of a
portion of the clubhouse for an estate agency operated by Mr Usher
(Usher Realtors (Pty) Ltd). HOA sought to enforce the
title deed
restriction concerned against ABM amongst others. As is apparent from
the arbitration award ABM did not take issue with
its conduct (the
estate agency) falling foul of the title deed restriction.
[22]
Instead
it contended that HOA had waived its right to rely thereon by virtue
of its signature of an agreement and consent to the
operation of a
sales office on the golf course land. This agreement had in fact been
signed by Mr Usher on HOA’s behalf in
his capacity as director
or trustee of HOA before the end of the development period. The
arbitrator not only found that the operation
of an estate agency was
in breach of the title deed restriction but also that there had been
no waiver on the part of HOA.
[23]
In
May 2006 another dispute arose. HOA contended that Mr Usher had
failed to carry out his fiduciary duties as a director of HOA
when
his trust acquired shares in the developer instead of procuring
control of the golf course lease for the HOA. The HOA sought
to have
the relevant transactions set aside and for the shares to be
transferred to it. HOA and ABM, together with the Allen Usher
Trust,
agreed however that in the event that the arbitrator awarded in HOA’s
favour, then ABM would cede and assign the golf
course lease to HOA
which in turn would sub-lease it back to ABM.
[24]
An
arbitration agreement was concluded. That became the subject of
further arbitration proceedings, principally it would seem in
relation to whether or not HOA was obliged to make payment of 25% of
its levy income on a monthly basis to ABM in accordance with
its
articles of association. On 19 November 2008 the arbitrator concerned
found in favour of ABM.
[25]
Thereafter
over the period 2009 to 2011 HOA attempted to facilitate a purchase
of the notarial lease from ABM in order to obtain
control over the
operation of the golf course and clubhouse facility. To this end a
separate company was formed by HOA. Agreements
were concluded in
terms of which the new company would pay ABM a purchase price for the
lease, payable over a period, while the
company would operate the
golf course and clubhouse facilities. The company would be funded by
debentures issued primarily to HOA’s
members.
[26]
However
due to non-fulfilment of various unspecified conditions in the
agreements, and after the new company had managed the golf
course for
a period in 2010/2011, management thereof was returned to ABM which
once again proceeded to operate it. (It should be
mentioned that
although reference is made in HOA’s papers only to management
of the golf course, it would seem that this
reference was intended to
include the clubhouse as well, if regard is had to the explanation
provided by HOA).
[27]
The
deponent to HOA’s affidavits, Mr Harry White, became its chief
executive officer in October 2012. In December 2012 a new
board was
elected. Mr White states that the main objective at the time was ‘
to
get the estate back on track as the infighting and attempted purchase
of the golf course lease led to
[HOA]
being
dumped into financial and operational difficulties in 2011’.
[28]
In
early 2012 on Mr White’s recommendation the board established a
working group to ‘
examine
all the rights and matters pertaining to the golf course and land
belonging to
[HOA]
as
well as other land within the boundaries of the estate belonging to
the City’.
[29]
In
April 2012 the working group reported that although the title deed
restriction precluded ABM from conducting non-golfing activities
from
the clubhouse (a significant portion of ABM’s income), instead
of renewing conflict with ABM an attempt should rather
be made to
acquire the golf course land from the City ‘
and
in that manner obtain some better control over the conduct’
of ABM. This was conveyed to Messrs Usher and Taylor at a
presentation held on 19 June 2012.
[30]
A
copy of this presentation is included in the papers. It reflects
inter
alia
that conflict between HOA and ABM had been ongoing; the existence of
the title deed restriction limiting the use of the land to
a golf
course and golf club facilities only; and that ‘
the
historical animosity between the HOA and ABM is well known,
indicating that other golf operators would be unlikely to invest
substantially to acquire the golf club lease’.
[31]
Under
the heading ‘
The
main aggravating factors causing the conflict’
it was recorded that:
‘
1.
The 860 home owners do not have any say over the Golf Club and Course
as this land,
around which their homes are situated, belongs to the
City of Cape Town. The lease over this land has been awarded to an
independent
company (ABM) for a 99 year period. ABM operates a
business on this land for the gain of two shareholders that are
property owners
on the estate.
2.
The
[HOA]
currently
has no control over the financial or operational affairs of ABM, yet
as a result of regulation 8.9 of its Articles of
Association, is
obliged to contribute 25% or R3.2 million p/a of levies collected
from the residents, to ABM.’
[32]
The
proposal made to ABM at the presentation was that HOA acquire the
rights to the golf course land from the City, thereby ‘
effectively
becoming a partner of ABM for the remainder of the lease period’.
The activities that were being conducted by ABM were not themselves
criticised other than in the context of the prohibition by
the title
deed restriction. The presentation suggests that a ‘
win-win’
situation would be to effectively permit at least some of these
activities to continue (and others to be considered as well) but
on
the basis that HOA would also benefit financially, and would have
control over any such activities.
[33]
Thereafter
on 26 June 2012 ABM made its own presentation to HOA. It did not
address the title deed restriction. On Mr White’s
unchallenged
version, ABM in essence proposed that HOA take over the notarial
lease for an exorbitant amount. This proposal was
rejected.
[34]
In
August 2012 HOA gave ABM a draft proposal which it intended
submitting to the City to obtain transfer of the golf course land.
The proposal was then submitted to the City in September 2012. During
2013 HOA concentrated its efforts on resolving the issue
with both
ABM and the City. The latter indicated that ‘
it
would have to resolve some issues’
with ABM before it could engage with HOA and consider its proposals.
[35]
On
21 January 2014 HOA received a request from ABM to permit a
Woolworths store to be operated from the clubhouse. Mr Usher wrote:
‘
Before
we go ahead and apply to the City Council we wish to first seek the
permission from the
[HOA]
in
terms of our Title Deed condition to use a portion of the clubhouse
buildings as a convenience store.
We trust that
our application will meet with the favourable consideration of the
[HOA]
.’
[36]
HOA
refused this request on 29 January 2014. In his email Mr White again
referred to the title deed restriction. He also confirmed
that as a
consequence of further discussions with ABM during November 2013, the
latter was to have made a revised proposal but
that this had not been
forthcoming. He wrote:
‘
In the
absence of any such acceptable proposal having been forwarded, the
Board finds it impossible to support any ad hoc action,
such as a
waiver of the title deed conditions in favour of an independent
commercial venture, as no direct, long-term benefit to
the
Association is apparent or formally secured.’
[37]
Mr
Usher responded on 5 February 2014 merely by noting this
communication. He did not take issue with any of its contents.
Thereafter
in March 2014 another dispute arose between HOA and ABM
pertaining to ABM’s removal of post and rail fences along the
outside
edges of the golf course playing area. According to Mr White
it then became clear that an amicable resolution of the conflict
between
these parties in relation to the golf course land would not
be possible. This is not disputed by Mr Usher.
[38]
Mr White
also states that during 2013 and 2014 ABM leased a portion of the
clubhouse to a telecommunications business and displayed
an
advertisement for an estate agency to operate from the premises.
Later in 2014 yet another dispute arose. According to Mr White
ABM embarked on an aggressive marketing and advertising campaign to
widely promote the restaurant (including a delicatessen) at
the
clubhouse for use by the public, as well as various other uses of the
clubhouse. This included ABM advertising the clubhouse
as a
conference and event facility able to host ‘
just
about any event’.
This specific allegation is not disputed by Mr Usher, although
he maintains that nothing intrinsically changed in the golf
club’s
operations other than a rebranding of the restaurant and fresh
marketing efforts.
[39]
HOA
then finally decided to formally complain to the City. Various
communications between HOA and the City followed over the ensuing
months. However the City failed to take active steps against ABM and
eventually this application was launched in December 2015.
[40]
It
is common cause that the golf course land is zoned ‘
Open
Space 3 – Special Open Spaces’
in accordance with schedule 3 of the City of Cape Town Municipal
Development Management Scheme (DMS) contained in the planning
by-law.
‘
Open
Space’
is defined as ‘
land
not designated as public open space or not deemed to be an ancillary
use, which is used primarily as a site for outdoor sports,
play, rest
and recreation, or as a park or nature area; and includes ancillary
buildings, infrastructure and uses, but excludes
shops, restaurants
and gymnasiums’.
[41]
The
relevant extract from the DMS (item 104) provides that:
‘
The
OS 3 zoning is appropriate for relatively large areas where open
space has special characteristics that require a separate zoning
to
ensure that the purpose and function of the open space is maintained.
Many other zonings allow for open spaces as primary, consent
or
ancillary uses and such open spaces do not need to be zoned as OS 3.
However some land uses such as golf courses, parklands
and landscape
areas can benefit from this zoning which provides limitations on
development, but also allows a range of consent
uses to cater for
leisure needs and uses compatible with open spaces.’
[42]
The
consent uses which the City may grant on application include use as a
‘
place
of assembly’
and ‘
place
of entertainment’
.
In its answering affidavit ABM contended that the City had given its
consent, or was deemed to have done so, to the use of the
golf
clubhouse as a place of entertainment and assembly via conclusion of
the notarial lease. Implicit in this contention was the
acknowledgement by ABM that the activities which it conducts from the
clubhouse, in the absence of such consent, fall foul of the
applicable zoning of the land.
[43]
In
its explanatory affidavit filed at a later stage the City’s
deponent, Mr Dewaldt Smit, who is the District Manager,
Blaauwberg District: Planning and Building Development Management,
set out the history of the zoning scheme. He explained that
utilisation of the land as a golf course is permitted as a primary
use of open space. The clubhouse is an ancillary use and permitted.
However a range of purposes for which the clubhouse and leisure
centre are allegedly used, if correct, are either not permitted
at
all under the zoning scheme, alternatively, are permitted only as a
consent use. At the time of deposing to his affidavit on
17 August
2016, no consent uses had been granted, or for that matter applied
for, and were not and could not have been granted
via conclusion of
the notarial lease as alleged by ABM.
[44]
In
particular, Mr Smit confirmed that the uses not permitted are a
beauty salon, restaurant or conferencing and events facility.
Use of
the clubhouse for wedding functions, motivational seminars and
training, corporate launches, teambuilding events, gala dinner
banquets, cocktail parties, year-end functions, birthday parties,
conferences, private parties, auctions and annual general meetings
are not permitted
unless
linked to the use of the golf course or clubhouse.
[45]
In
respect of ABM’s allegations that the clubhouse was
specifically designed to accommodate these facilities, and the plans
were approved on that basis, Mr Smit states that they did not
(and in any event could not) have allowed for uses not permitted
by
the zoning of the property including the conducting of a restaurant.
Mr Colin Lovember (the City’s principal planning
officer
in the same branch as Mr Smit) deposed to a confirmatory
affidavit.
[46]
Mr
Usher then deposed to a further affidavit in which Mr Lovember was
alleged to have recently advised him that because these uses
were
reflected on the approved building plans, they were lawful under
s 39(2) of LUPO. This in turn was denied by Mr Lovember
in
yet another affidavit. He also stated that the building plans as
approved do not include a restaurant. HOA also referred to
the
conditions of approval of the building plans, one of which is that
the owner of the building must nonetheless comply with any
applicable
title deed condition or other legal provision in relation to the
land.
[47]
During
argument on 29 August 2016 the court was informed from the bar by
counsel for ABM that it had just made application to the
City for a
consent use in the preceding few days. Although no further
information was provided in this regard by ABM, it is accordingly
fair to accept that, whatever its stance might have been in the past
on the zoning issue, ABM now acknowledges that the activities
which
it conducts as listed by Mr Smit are unlawful because they are
not permitted by the zoning provisions applicable to
the golf course
land.
[48]
HOA
in turn accepts that some of its activities conducted at the leisure
centre are also prohibited by the zoning scheme. There
is no evidence
of any prior demand having been made by ABM or the City for HOA to
cease such activities. The first indication of
ABM’s complaint
was the counter-application. In response HOA undertook to halt these
activities (and consented to an appropriate
order to that effect)
until such time as transfer of ‘
its’
portion of the land has occurred, or formal consent has been obtained
from the City. This undertaking was contained in Mr White’s
replying affidavit deposed to on 23 March 2016.
[49]
During
argument counsel for HOA contended that ABM had failed to exhaust its
alternative remedy (i.e. approaching the City to take
steps against
HOA), despite the earlier unequivocal undertaking contained in
Mr White’s replying affidavit.
The
defences raised by ABM
[50]
It
is against this background that the defences raised by ABM in its
papers fall to be considered. They are that the title deed
restriction, properly interpreted, permits the activities complained
of to be conducted. Alternatively, if ABM is incorrect in
this regard
then ‘
the
HOA has for fifteen years acquiesced in ABM’s having conducted
the relevant activities’
and has thus waived the benefit of the title deed restriction, or is
estopped from enforcing it. It was also alleged that it ‘
would
be inequitable to permit the HOA to enforce it against ABM in the
circumstances…’.
[51]
During
argument counsel for ABM clarified what it had meant to convey in
relation to the alternative defence. He made it clear that
this
defence turns squarely on tacit waiver and not either estoppel (for
which ABM had in any event not made out a case) or acquiescence
in
the strict legal sense. He thus rightly submitted that the test to be
applied against the facts is that set out in
Road
Accident Fund v Mothupi
2000 (4) SA 30
(SCA), also reported at 2000 [3] All SA 181 (A).
[52]
I
will first consider the main defence, to which the principles of
interpretation set out in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) of course apply. As previously stated, ABM contends
that the title deed restriction, properly interpreted, permits use of
the golf club house for the activities complained of. It essentially
advances two arguments in this regard.
[53]
First,
the kinds of activities which it conducts are alleged to be a
widely-practised, acceptable means by which golf clubs supplement
their income. That being so, it is submitted, this is a factor which
the court can and should take into account in interpreting
the title
deed restriction so as to give it a reasonable, sensible and
businesslike meaning. Second, the notarial lease concluded
around the
time when the title deed restriction was imposed is relevant to the
context of its imposition. It is submitted that
the parties to that
lease (i.e. the City and the developer) intended that the lessee be
permitted to use the clubhouse for ancillary
uses which include the
activities complained of.
[54]
In
support of its first argument ABM relied on evidence in the form of a
‘
survey’
which its attorneys informally conducted among 12 golf clubs in Cape
Town and surrounding towns. The ‘
results’
of this survey were not confirmed under oath by any of the club
officials interviewed. Moreover, no information was provided
concerning
the basis upon which the clubs were conducting these
activities lawfully, such as the existence or otherwise of any title
deed
restrictions, zoning provisions or consent uses granted. It was
for these reasons that HOA applied to have these portions of the
answering affidavit struck. The evidence presented by ABM in this
regard is not only hearsay. It is also, in the circumstances,
irrelevant to the issue at hand. It follows that the striking out
application must succeed and this dispenses with the first argument.
[55]
As
far as the second argument is concerned, I accept that the notarial
lease does provide some context to the circumstances in which
the
title deed restriction was imposed. However in my view this weakens
rather than strengthens the interpretation which ABM seeks
to place
on the restriction.
[56]
The
notarial lease expressly stipulates that the lessee must at all times
observe the conditions of title of the golf course land.
It provides
that the leased premises shall only be used for the purpose of a golf
course, clubhouse and other ancillary uses relating
thereto. The
Oxford Dictionary defines ‘
ancillary’
as ‘
providing
the necessary support to the primary activities of an operation or
organisation’
,
and the Merriam-Webster’s Dictionary gives the simple
definition of the word as ‘
providing
something additional to a main part or function’
.
The memorandum of incorporation of HOA defines ‘
clubhouse’
as ‘
the
communal buildings serving the golf course’.
[57]
The
title deed restriction itself stipulates that the golf course land is
to be used for a golf course and golf club facilities
only. The deeds
of sale of the residential erven refer expressly to the title deed
restriction and that in terms thereof the golf
course land may not be
used for any purpose other than a golf course. One of the conditions
of approval of the club house plans
was that the owner of the
building is not absolved from compliance with any title deed
condition or other legal provision applicable
to the land.
[58]
Clause
5.3 of the notarial lease obliges the lessee to promote, encourage
and foster the game of golf. Clause 5.5 obliges the lessee
to procure
the formation of a licenced club on the golf course land for those
entitled to play golf on the golf course.
[59]
Moreover
the applicable zoning provisions do not permit the activities
complained of without the City’s consent, which has
not been
furnished. According to Mr Smit one of the preconditions for
consent to be granted is that, at the very least, the
activity
proposed must be linked to the use of the golf course or club house.
[60]
I
accept that in terms of the notarial lease ancillary uses of the club
house are those as may from time to time be determined by
the lessee.
However the thread running throughout the historical agreements,
approvals and other relevant documentation is that
such ancillary
uses should relate only to the primary function and purpose of the
land, namely promoting and supporting the sport
of golf.
[61]
This
being the case, and having regard to what is set out above, I
conclude that the only reasonable interpretation to be placed
on the
title deed restriction is that the club house facilities similarly
fall squarely into the same category, and that the restriction
does
not permit any activity or use which does not achieve these purposes.
It follows that the main defence fails.
[62]
Turning
now to the alternative defence of tacit or inferred waiver of the
title deed restriction by HOA. In
Mothupi
the relevant test was set out at paras [15] – [19] as follows:
‘
Inferred
waiver
[15]
Waiver is first and foremost a matter of intention. Whether it is the
waiver of a right or a
remedy, a privilege or power, an interest or
benefit, and whether in unilateral or bilateral form, the starting
point invariably
is the will of the party said to have waived it. The
right in question in the instant case is the statutory provision
specifically
accorded to the Fund to avert claims which are out of
time.
“
It is a
well-established principle of our law that a statutory provision
enacted for the special benefit of any individual or body
may be
waived by that individual or body, provided that no public interests
are involved. It makes no difference that the provision
is couched in
peremptory terms”
(SA
Eagle Insurance Co Ltd v Bavuma
1985
(3) SA 42
(A) at 49G-H).
[16]
The test to determine intention to waive has been said to be
objective (cf
Palmer
v Poulter
1983
(4) SA 11
(T) at 20C-21A;
Multilateral
Motor Vehicle Accidents Fund v Meyerowitz
1995
(1) SA 23
(C) at 26H-27G;
Bekazaku
Properties (Pty) Ltd v Pam Golding Properties (Pty) Ltd
1996
(2) SA 537
(C) at 543A-544D). That means, first, that intention to
waive, like intention generally, is adjudged by its outward
manifestations
(cf
Traub
v Barclays National Bank Ltd
1983
(3) SA 619
(A) at 634H-635D;
Botha
(now Griessel) and another v Finanscredit (Pty) Ltd
1989
(3) SA 773
(A) at 792B-E); secondly, that mental reservations, not
communicated, are of no legal consequence (
Mutual
Life Insurance Co of New York v Ingle
1910
TS 540
at 550); and thirdly, that the outward manifestations of
intention are adjudged from the perspective of the other party
concerned,
that is to say, from the perspective of the latter’s
notional
alter
ego
,
the reasonable person standing in his shoes.
[17]
The third aspect has not yet been finally settled by this Court, or
so it would seem (cf
Thomas
v Henry and another
1985
(3) SA 889
(A) at 896G-898C). What the one party now says he then
intended and what his opposite number now says he then believed, may
still
be relevant (
Thomas
v Henry and another
(
supra
)
898A-C) although not necessarily conclusive. The knowledge and
appreciation of the party alleged to have waived is furthermore
an
axiomatic aspect of waiver (
Martin
v De Kock
1948
(2) SA 719
(A) at 732-733. With those two qualifications I propose,
in this judgment, to apply the test of the notional
alter
ego
.
[18]
The outward manifestations can consist of words; of some other form
of conduct from which the
intention to waive is inferred; or even of
inaction or silence where a duty to act or speak exists. A
complication may arise where
a person’s outward manifestations
of intention are intrinsically contradictory, as for instance where
one telefax indicates
an intention to waive and another, perhaps as a
result of a typographical error, does not. That problem does not
arise in this
case and consequently need not be discussed (cf
Mahabeer
v Sharma NO and another
1985
(3) SA 729
(A) at 737 D-E). Nor is it necessary to consider some of
the other problems relating to waiver which do not arise in this
case,
such as whether the manifestation of an intention to waive must
of necessity be communicated to the other side, and, if so, whether
by some means or another it must always be “accepted” or
acted upon by the other party (cf
Traub
v Barclays National Bank Ltd
(
supra
)
at 634H;
Botha
(now Griessel) v Finanscredit (Pty) Ltd
(
supra
)
at 792B-E;
Segal
and another v Segil
1992
(3) SA 136
(C) at 144J-146J; 155B-156J;
Southern Witwatersrand Exploration Co Ltd v Bisichi Mining Plc and
others
[1997]
3 All SA 691
(W) at 700c-702d).
[19]
Because no-one is presumed to waive his rights (cf
Ellis
and others v Laubscher
1956
(4) SA 692
(A) at 702E-F, one, the onus is on the party alleging it
and, two, clear proof is required of an intention to do so (
Hepner
v Roodepoort-Mardisburg Town Council
1962
(4) SA 772
(A) at 776D-779A;
Bortslap
v Spangenberg en andere
1974
(3) SA 695
(A) at 704 F-H). The conduct from which waiver is
inferred, so it has frequently been stated, must be unequivocal, that
is to say,
consistent with no other hypothesis.’
[63]
For
the reasons already given, I will only deal with HOA’s actions
(and inaction) since it was placed in a position to enforce
the title
deed restriction in 2005. The factual background detailed above
reveals that, although HOA did not take formal, positive
steps in
relation to the specific activities now complained of until 2014,
ABM’s use of the club house has been the subject
of ongoing
conflict and controversy between these parties since as early as
2006.
[64]
First,
there were the arbitration proceedings in respect of ABM’s use
of a portion thereof as an estate agency. Second, there
was the
dispute about Mr Usher’s failure to procure control of the
golf course lease for the HOA and the further arbitration
in relation
thereto. These disputes spanned the period 2006 to 2008. From 2009
until 2011 HOA tried unsuccessfully to wrest control
over the golf
course and clubhouse from ABM. In 2012 HOA established a working
group to explore ways in which it could obtain better
control over
these facilities and ABM’s conduct in relation thereto. ABM’s
representatives were informed during the
same year that this was what
HOA intended. To the extent that Mr Usher might at that stage
have been under the impression
that HOA had historically tolerated at
least some of ABM’s activities, he must have been under no
illusion, after HOA’s
presentation in June 2012, that HOA knew
that such activities were prohibited by the title deed restriction
and did not unconditionally
condone them.
[65]
It
is however necessary to deal at this juncture with HOA’s
proposal to ABM at that presentation, given that it effectively
suggested becoming a ‘
partner’
of ABM for the remainder of the lease period on the basis that at
least some of the activities would continue to be permitted (and
others would be considered), provided however that HOA also derived
financial benefit therefrom and exercised control thereover.
This
could be construed as the type of complication referred to in
Mothupi
,
namely ‘
where
a person’s outward manifestations of intention are
intrinsically contradictory’.
[66]
To
my mind, viewed in its proper context, the proposal did not amount to
an unequivocal manifestation of an intention on the part
of HOA to
waive the title deed condition for the following reasons. First, the
crux of HOA’s complaint was that the activities
conducted by
ABM were prohibited by the title deed restriction. Second, to the
extent that HOA was willing to permit at least some
of these
activities to continue, and to consider others, it was on the basis
that it would have a meaningful say therein and would
derive
meaningful financial benefit therefrom. Accordingly, at most, the
proposal amounted to an intention to waive provided that
certain
conditions were met by ABM.
[67]
Moreover
it appears that ABM understood the proposal as such. In his email
requesting permission for the operation of a Woolworths
store in
early 2014, Mr Usher also wrote that:
‘
I
noted with interest that one of the “Nice to Haves”
that was listed
in your recent survey was a Woolworths…’
[68]
He
then proceeded to ask for permission from HOA for the operation of
such a store before approaching the City for formal consent.
When
this request was rejected because any ad hoc waiver of the title deed
restriction would not secure a long-term benefit for
HOA, Mr Usher
simply accepted this. He did not complain that ABM had been lulled
into a false sense of security because HOA
had already tacitly waived
the title deed restriction in any way or had manifested a clear
intention to do so. Moreover, it cannot
be ignored that tacit waiver
was only advanced as a defence in the alternative. ABM’s
primary stance throughout this litigation
has been that the
activities conducted are permitted by the title deed restriction.
[69]
From
2014 the parties remained at loggerheads about the principal issue,
namely use of the golf clubhouse facilities. Although HOA
can be
criticised for not taking proactive steps at an earlier stage, I do
not understand
Mothupi
to mean that this in itself is determinative of the issue. Moreover,
the City’s inaction from at least 2014 cannot fairly
be laid at
HOA’s door. See also
New
Media Publishing (Pty) Ltd v Eating Out Web Services CC
[2005] ZAWCHC 20
;
2005 (5) SA 388
(C) at 406E-H.
[70]
Having
regard to the aforegoing I am unable to find that HOA’s conduct
over the years since 2005 is consistent with no other
hypothesis than
that it tacitly waived the title deed restriction. It follows that
the alternative defence must also fail.
Suspension
of the operation of the interdicts
[71]
HOA
has established the first 2 requirements for a final interdict,
namely a clear right and an injury actually committed or reasonably
apprehended. It has also established the absence of any other
adequate remedy, given that the City (despite the order of
26 February
2016) has not as a fact yet taken action against
ABM. Nor has the City voiced any objection to the relief which HOA
seeks. On the
contrary, when regard is had to the affidavits of
Messrs Smit and Lovember, the City appears to support such relief.
[72]
In
respect of the counter-application, ABM has established the first 2
requirements. Moreover HOA has consented to an interdict
and I do not
think that any purpose will be served by embarking on a determination
of whether there is an adequate alternative
remedy, as was only
raised on HOA’s behalf in argument, save to state that the
absence of a prior demand, the immediately
furnished undertaking and
ABM’s failure to even approach the City for assistance in the
first instance (let alone seek any
order against it) can be dealt
with by way of an appropriate costs order.
[73]
ABM
has asked that, in the event of HOA succeeding in the main
application, the court should suspend the operation of the interdict
until the City has considered and adjudicated on its consent use
application.
[74]
The
reason for this request is that if ABM is immediately interdicted
from using the golf course land for its unlawful activities
it will,
amongst other things, have to immediately close the restaurant and
cease holding its scheduled functions. It will have
to retrench 17
staff members (for many of whom this is their sole source of income).
It will also have to cancel its bookings (the
schedule annexed to the
answering affidavit deposed to on 24 February 2016 lists 15 of
these, of which 12 would since have
taken place, although I will
assume in ABM’s favour that others have since been booked,
given the forthcoming summer season
which is popular for weddings and
end of year functions).
[75]
On
the other hand HOA submits that a suspension of the interdict is not
warranted. It sought to demonstrate that the City cannot
grant
consent in respect of certain uses and that it is unlikely that
consent will be granted in respect of others, having regard
to the
applicable zoning provisions. HOA thus argued that a suspension would
be a futile exercise.
[76]
It
also submitted, on the basis of
Lester
v Ndlambe Municipality and another
2015
(6) SA 283
(SCA) that this court has no discretion to suspend the
operation of the interdict because this would amount to countenancing
an
ongoing illegality which is also a criminal offence (under s 133
of the planning by-law). The latter submission, as I understand
it,
was premised on the basis that HOA is effectively enforcing the
applicable provisions of the planning by-law and not any common
law
right, and that therefore the court has no discretion to ‘
deny’
HOA its public law remedy.
[77]
Counsel
for ABM in turn pointed out that in
Lester
the Supreme Court of Appeal was dealing with a building erected
contrary to the National Building Regulations and Building Standards
Act 103 of 1977 (the NBSA). One of the issues before the court was
the interpretation of s 21 of the NBSA. It held that, once the
jurisdictional fact that the building was erected contrary to the
NBSA had been established, it was obliged to order complete
demolition and had no discretion in this regard. Counsel thus
cautioned against interpreting
Lester
in as wide a manner as that contended for by HOA.
[78]
In
the more recent decision of
BSB
International Link CC v Readam South Africa (Pty) Ltd and Another
(279/2015)
[2016] ZASCA 58
(13 April 2016) it was stated at para
[27], albeit obiter, that a court has a broad general discretion
under the common law and
that:
‘
Judicial
oversight without a judicial discretion seems, on the face of it, to
be a contradiction in terms…’
[79]
There
is also an established line of authority in this division that a
court has the power to suspend an interdict against a party
operating
in breach of land use laws to allow that party a period of time to
redress the unlawfulness:
Inter
Cape Ferreira Mainliner v Minister of Home Affairs
2010 (5) SA 367
(WCC) at para [184];
410
Voortrekker Road Property v Minister of Home Affairs
[2010]
All SA 414
(WCC) at paras [43] – [59];
Booth
NNO v Minister of Local Government
2013
(4) SA 519
(WCC) at para [65];
King
Country Investment (Pty) Ltd v Cape Town Ziplines (Pty) Ltd and
Others
(6661/16) [2016] ZAWCHC (23 September 2016). Cf
Bitou
Local Municipality v Timber Two Processors CC and Another
2009 (5) SA 618
(C) at paras [32] – [33].
[80]
The
discretion must be exercised after giving due consideration to all
the relevant circumstances:
BSB
International Link CC
at
para [29]. I intend to suspend the operation of both interdicts for a
limited period for the following reasons. First, the length
of time
that the activities have been conducted. Second, the consequences to
employees, contractors and those individuals and corporate
entities
who have already made bookings for some of these facilities in good
faith. Third, relief was understandably sought by
neither party on an
urgent basis. Fourth, both parties have initiated steps with the City
to attempt to redress the unlawfulness
of their respective
activities. Fifth, it would be inappropriate for me to pre-judge what
the City may or may not approve and on
what basis (the City is far
better placed than this court to do so).
[81]
The
City has not given any indication as to how long the processes under
way will take (I mean no criticism in this regard, given
that, at
least in respect of ABM, the consent use application was made at the
11
th
hour). Counsel for ABM suggested that suspension for a period of 6
months would be reasonable. Counsel for HOA submitted that,
were the
interdict to be suspended in respect of ABM, the same should apply in
respect of HOA, for similar reasons. In the circumstances,
I will
live with the suggestion of 6 months, subject however to the period
of suspension being linked to any intervening approval
or rejection
by the City.
Conclusion
[82]
In
the result I make the following order:
1.
The
second respondent is interdicted and restrained from contravening or
permitting the contravention of the title deed restriction
imposed in
favour of the applicant under title deed number 82956/99, which
restricts the use of Erven 3656, 3822 and 3828 Melkbosch
Strand,
situate in the Blaauwberg Municipality, Cape Division, Province of
the Western Cape (‘
the
premises’
)
to use as a golf course and golf club facilities only.
2.
The
second respondent is interdicted and restrained from contravening or
permitting the contravention of the City of Cape Town Municipal
Planning By-Law 2015 applicable in respect of Open Space 3: “Special
Open Spaces” which restricts the use of the premises.
3.
The
second respondent is interdicted and restrained from conducting or
permitting the conduct of the business of a beauty salon,
restaurant
or conferencing and event facility on the premises.
4.
The
second respondent is interdicted and restrained from marketing,
offering and conducting or permitting the conduct of the following
events at the premises: wedding functions, motivational seminars and
training, corporate launches, team building events, gala dinner
banquets, cocktail parties, year-end functions, birthday parties,
conferences, private parties, auctions and annual general meetings
(other than those of the applicant or the first respondent).
5.
The
applicant is interdicted and restrained from conducting or operating
or permitting the conduct or operation of a restaurant
and gymnasium,
and from marketing, offering and conducting or permitting the conduct
of functions (including wedding functions,
cocktail parties,
conferences and corporate functions) at the applicant’s leisure
centre, situated on Erf 3822, Melkbosch
Strand.
6.
The
operation of the interdicts referred to in paragraphs 1 to 5 above
shall be suspended for a period of SIX (6) MONTHS from date
of this
order, or approval or rejection by the first respondent of any
application to redress, or effectively redress, the unlawfulness
of
the activities conducted at the premises, whichever occurs first.
7.
Paragraphs
39.6 – 39.9 of the second respondent’s answering
affidavit in the main application are struck out with costs.
8.
The
second respondent shall pay the costs of the main application.
9.
In
respect of the counter-application there shall be no order as to
costs.
________________________
J I CLOETE