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[2012] ZASCA 40
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City of Johannesburg and Another v Ad Outpost (Pty) Ltd (55/11) [2012] ZASCA 40; 2012 (4) SA 325 (SCA) (29 March 2012)
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THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
JUDGMENT
Case No: 55/11
Reportable
In
the matter between:
CITY OF JOHANNESBURG
…..............................................................
First
Appellant
CITY
MANAGER OF THE CITY OF JOHANNESBURG
…..............
Second
Appellant
and
AD
OUTPOST (PTY) LTD
…......................................................................
Respondent
Neutral
citation:
City of Johannesburg v Ad Outpost
(55/11)
[2012]
ZASCA 40
(29 March 2012)
Coram:
Farlam, Van Heerden, Mhlantla and Leach JJA and Ndita AJA
Heard:
27 February 2012
Delivered:
29 March 2012
Summary:
Applicant
applying under by-laws for permission to advertise alongside highways
─ application wrongly refused but by-laws
repealed and fresh
by-laws promulgated ─ application to be reconsidered under new
by-laws
___________________________________________________________________
O R D E R
___________________________________________________________________
On appeal from:
South Gauteng High Court, Johannesburg (Matlapeng AJ sitting as court
of first instance):
1. The appeal succeeds
with costs, such costs to include the costs of two counsel.
2. The order of the high
court is set aside and is substituted with the following:
‘
(a)
The decisions taken by the first respondent, the City of
Johannesburg, on 29 August 2007, to refuse the applicant’s
applications
for approval of the two outdoor advertising billboards
known as the Sandown billboard and the Kelvin View billboard, as well
as
the decisions by the third respondent, the city manager, to
dismiss the applicant’s appeals against the aforementioned
decisions
of the first respondent, are reviewed and set aside.
(b) The applicant is to
pay the respondents’ costs, such costs to include the costs of
two counsel.’
___________________________________________________________________
J U D G M E N T
___________________________________________________________________
LEACH JA (FARLAM, VAN
HEERDEN AND MHLANTLA JJA AND NDITA AJA concurring)
[1] As its name suggests,
the respondent, Ad Outpost (Pty) Limited, is a company carrying on
business in the advertising industry.
At the heart of the present
dispute are two billboards situated alongside roadways in Gauteng
which the respondent has used in
the course of its business for more
than ten years. As is more fully set out below, the original
authority which the respondent
was granted in 2001 lapsed in the
fullness of time, and led to the respondent applying to the City of
Johannesburg (the first appellant)
for a renewal of permission to use
the billboards for a further five years. Its application was refused
and an appeal to the City
Manager (the second appellant, but the
third respondent in the high court) brought under the relevant
by-law, was similarly dismissed.
[2] Disenchanted by this,
the respondent proceeded to apply to the South Gauteng High Court for
an order reviewing and setting aside
the decisions of both appellants
and seeking, in their stead, the court’s authority to use the
billboards in question for
a period of five years. The high court
granted relief in those terms, its permission being antedated to 29
August 2007, being the
date when the first appellant had refused
permission. With leave of the high court, the appellants now appeal
against that order
[3]
The
billboards in question, referred to in the papers as the ‘Sandown
billboard’ and the ‘Kelvin View billboard’,
are both situated in the
immediate vicinity of major public motorways in greater Johannesburg.
The Sandown billboard is a 7.5m x
5m single-sided billboard located
near an overhead traffic sign on Grayston Drive which gives warning
of a nearby off-ramp leading
to Katherine Street. The Kelvin View
billboard, a 4.5m x 18m double-sided billboard with an overall height
of 17m, is situated
to the east of the M1 South Highway, near what is
known as the Marlboro off-ramp. In 2001 the respondent applied for
the necessary
approval to use both billboards under the relevant
by-laws in force at the time
1
(which I intend for
convenience merely to refer to as ‘the 1999 by-laws’),
clause 39(3)(d) of which provided that:
‘
Billboards
will not be permitted within specified distances of on and off-ramps
of motorways and overhead traffic directional signs
– see
Figure 2 . . . except where a curve in the road renders the billboard
not to interfere with a clear and undistracted
view of the
directional traffic sign
.
’
[4]
Figure
2 referred to in this section contained a diagrammatic illustration
of both an off-ramp and an on-ramp and the situation
of a so-called
‘prohibited area’ immediately adjacent thereto, as well
as an illustration of a prohibited area adjacent
to an overhead
traffic sign. It is common cause that the two billboards in question
stand within prohibited areas as so determined
and in which
billboards were not to be permitted, subject of course to the
exception envisaged by clause 39(3)(d). From the photographs
of the
billboards in question included in the papers, they appear unlikely
to interfere with a clear and undistracted view of any
directional
traffic signs and, presumably due to this, the respondent’s
applications were granted: on 4 May 2001 in regard
to the Sandown
billboard and on 22 August 2001 in regard to the Kelvin View
billboard.
[5] In both instances the
approval was granted for a period of three years with further
approval to be renegotiated three months
prior to expiry of that
period. No extension was ever negotiated and the authority to use the
billboards therefore lapsed in 2004.
This notwithstanding, the
respondent continued to use both billboards without objection from
the appellants until 13 November 2006
when the first appellant
eventually wrote to the respondent about the Kelvin View billboard.
It drew attention to the lapse of
the original authority and stated
that,
as the billboard lacked the necessary
approval,
it should be removed within 21 days –
although it went on to advise that if the respondent wished to
‘legalise’
the billboard it should submit a new
application for consideration. Subsequently, on 29 November 2006, the
first appellant addressed
a letter in similar terms to the respondent
in regard to the Sandown billboard. Consequently,
in
March 2007,
the respondent applied to the first
appellant for permission to use the billboards for advertising
purposes for a period of five
years. The application for each
application was marked as being an application for a ‘renewal’
and indicated that the
billboard was ‘existing’. I shall
refer to them as the ‘renewal applications’.
[6]
By
this time, the 1999 by-laws had been repealed and replaced by the
Advertising Signs And Hoardings By-laws
2
which came into effect on
1 December 2001 (‘the 2001 by-laws’).
Similar to clause
39(3)(d) of the 1999 by-laws, but couched in more permissive terms,
clause 24(6)(d) of the 2001 by-laws contained
the following safety
condition :
‘
Prohibited
areas on motorways –
Billboards may be permitted within
specified distances of on-
and
off-ramps of motorways and overhead traffic directional signs where a
curve in the road renders the billboard not to interfere
with a clear
and undistracted view of the directional traffic sign.’
[7]
Of
course, this implies that billboards would not be permitted within
specified distances of ramps and signs if they interfered
with a
‘clear and undistracted’ view of the directional traffic
signs. But despite the reference to ‘specified
distances’
in the clause set out above, there appears to have been a lacuna in
the by-laws as, in contradistinction to those
of 1999, they neither
prescribed any such specified distances nor defined any prohibited
areas – and in this regard there
was no diagram similar to
figure 2 of the 1999 by-laws defining prohibited areas at on and
off-ramps and near overhead signs.
However
the first appellant still enjoyed a discretion to approve the use of
the billboards for advertising
3
and, in considering
whether to do so, was enjoined to take into account, inter-alia,
whether a billboard ‘will in any way
impair the visibility of
any road traffic sign or affect the safety of motorists or
pedestrians’.
4
[8]
After
having lodged its renewal applications in March 2007, correspondence
passed between the respondent and the first appellant
which
culminated in the first appellant writing to the respondent on 3
September 2007, informing it that both applications had
been refused.
The reason given for the decision in each case was that under ‘the
safety standards set by the Johannesburg
Roads Agency in terms of
clause 24(6)(d) of the [2001 by-laws], signs should be at least 200m
away from an overhead traffic sign.’
[9]
Aggrieved by this the
respondent, relying on a provision in the 2001 by-laws, appealed to
the second appellant contending, in particular,
that the by-laws
neither contained a 200m prohibition nor empowered the Johannesburg
Roads Agency to prescribe conditions for the
approval of billboards.
However,
on
31 March 2008,
the
respondent received a letter
5
from the second appellant
dismissing the appeals on the ground that:
‘
The
Johannesburg Roads Agency as the custodians of road traffic safety in
Johannesburg has determined certain areas close to overhead
traffic
signs as restricted areas for the purposes of traffic safety. No
advertising signs are permitted within such restricted
areas. Your
proposed application is within such restricted area. See also section
24(6)(d) of the said by-laws. This traffic safety
precaution has been
consistently applied by the City
.
’
[10]
Unhappy that the second
appellant had also taken into account considerations which it felt
were irrelevant and improper, the respondent
applied to the high
court to review and set aside the decisions of both the first and
second appellants. As both those decisions
had been predicated upon
an erroneous view that the billboards in question were located in
‘prohibited areas’ as envisaged
by the 2001 by-laws and
that there was an absolute prohibition which precluded any discretion
to grant permission for advertising
signs in those areas,
the appellants correctly
conceded in their answering affidavits that their decisions had not
been validly taken. But by the time
the review was launched in
September 2008, the 2001 by-laws had been repealed and replaced by
the Outdoor Advertising By-laws
6
which came into operation
on 1 July 2008 (‘the 2008 by-laws’).
These
once more prescribed prohibited areas at on and off-ramps and
overhead traffic signs,
and
re-introduced a diagrammatic illustration thereof in schedule 2. This
was essentially the same as figure 2 in the 1999 by-laws.
As the
respondent’s billboards are situated within prohibited areas as
so defined, the appellants adopted the standpoint
that to set their
decisions aside and to ask them to reconsider the renewal
applications would be a meaningless exercise, arguing
that the 2008
by-laws contained an absolute prohibition against advertising in
prohibited areas which precluded the respondent
from being granted
the permission it sought. The respondent, on the other hand, argued
that its applications would have to be reconsidered
not under the
2008 by-laws but those of 2001,
under
which the permission it sought could be granted.
[11]
The
high court rejected the appellant’s argument, holding that the
2001 by-laws would apply to a reconsideration of the respondent’s
applications. As the appellants had neither suggested that the
billboards contravened clause 24(6)(d) of the 2001 by-laws
7
nor alleged that the
billboards in any way interfered with traffic or been the subject of
any complaint, and in the light of its
further conclusion that the
appellants had acted incompetently in assessing the respondent’s
applications, the high court
decided not to refer the matter back for
reconsideration by the appellants as it felt that to do so would
cause the respondent
to suffer ‘unjustifiable prejudice’.
It therefore set aside the decisions of both appellants and replaced
them with
its own decision granting the respondent permission to use
the billboards for five years, ante-dating that authority as
mentioned
at the outset.
[12]
In
this court, the appellants conceded that in order to give effect to
the principle of legality their invalid decisions should
be set
aside. However, as in the high court, the principal issue argued was
whether in that event the respondent’s applications
would fall
to be reconsidered under the 2001 or 2008 by-laws. In the
alternative, counsel for the respondent argued that even if
the 2008
by-laws were applicable, the prohibition they contained against
advertising in prohibited areas was not absolute and the
appellants
could still grant the requisite permission. However, at the close of
argument it transpired that in fact the 2008 by-laws
had been
repealed on 18 December 2009 when a fresh set of by-laws (‘the
2009 by-laws’)
8
were published by the
second appellant under
s 13(a)
of the
Local Government: Municipal
Systems Act 32 of 2000
. This had occurred even before the respondent
had filed its replying affidavit in the high court, and the 2008
by-laws are therefore
wholly irrelevant to the issues debated both in
the high court as well as this court. This is a lamentable state of
affairs which
made it necessary for this court to afford the parties
the opportunity to file written argument after the hearing dealing
with
the 2009 by-laws.
[13] In her subsequent
written argument, counsel for the respondents submitted that, for the
reasons she had advanced in respect
of the 2008 by-laws, the first
appellant had still retained a residual discretion to allow
advertising signs in prohibited areas.
This was founded on the
provisions of clause 4 of the 2009 by-laws which, so the argument
went, provide an over-arching discretion
to the first appellant to
grant the permission sought. Inter alia, that clause provides :
‘
4 (1) In
considering an application submitted in terms of
section 3(3)
, the
Council must, in addition to any other relevant factor, legislation,
policy and by-laws of the Council, have due regard to
the following:
(a) . . . .
(b) Whether the proposed advertising
sign will ─
(i) . . . .
(ii) constitute a danger to any person
or property or to motorists or pedestrians or obstruct vehicular or
pedestrian traffic;
(iii) in any way impair the visibility
of any road traffic sign’.
[14]
However,
the 2009 by-laws also contain a prohibition against advertising signs
near on-
and off-ramps and overhead traffic signs
on freeways and major highways. These are diagrammatically
illustrated in schedule 2, which
is identical to the corresponding
schedule to the 2008 by-laws. Relating thereto, clause 6(2) provides:
‘
Any
advertising sign on a public street or facing a public street,
including advertising signs facing a Provincial Road, must comply
with the following requirements:
(a) . . . .
(b) no advertising sign may be located
inside a prohibited area at any on- and off-ramp of a motorway,
whether local, provincial
or national and in relation to overhead
road traffic signs, as depicted in Figure 1 of Schedule 2.
’
[15] The prohibition in
clause 6(2), as read with schedule 2, is then incorporated by
reference into clause 9 which details a number
of instances ‘(i)n
addition to any other prohibition . . . in these By-laws’ in
which ‘no person may erect, maintain
or display any advertising
sign’. As clause 3(6)(b) goes on to provide in peremptory terms
that the first appellant ‘must
refuse to accept an application’
which relates to an advertising sign prohibited by clause 9, the
by-laws clearly fall to
be interpreted as providing an absolute
prohibition against advertising signs falling within prohibited areas
in schedule 2, and
the discretion provided by clause 4 (accepting for
present purposes that there is one) can only relate to applications
which the
first appellant can accept ie those not prohibited by
clause 9. As it is common cause that the respondent’s renewal
applications
relate to billboards that are in prohibited areas which
are referred to by reference in clause 9, if the 2009 by-laws are
applicable
to the reconsideration of the renewal applications, the
first appellant has no discretion to grant the approval the
respondent
seeks.
[16] Consequently the
cardinal issue to consider is the respondent’s contention that
the 2001 by-laws would be applicable
to a reconsideration of its
renewal applications. The immediate difficulty that I have with this
argument is to be found in the
terms of the subsequent by-laws.
Clause 39(3) of the 2008 by-laws provided for any application brought
under the repealed 2001
by-laws that was ‘pending’ before
the first appellant at the date of the commencement of the 2008
by-laws to be dealt
with in terms of the latter by-laws. Similarly,
clause 39(3) of the 2009 by-laws provides that any application
brought under the
terms of the 2008 by-laws ‘pending before the
(first appellant) at the date of commencement of these By-laws must
be dealt
with in terms of these By-laws’.
[17]
Both
in the court a quo, and initially in this court, the parties accepted
that the respondent’s renewal applications had
finally come to
an end on 31 March 2008 when the second appellant dismissed the
respondent’s appeals. They therefore further
accepted that the
renewal applications could not be construed as ‘pending’
when the 2008 by-laws commenced on 1 July
2008 (and nor, for that
matter, when the 2009 by-laws commenced on 18 December 2009). In
their further written argument submitted
after the appeal had been
heard, the appellants retreated from this position to argue that the
effect of the high court setting
aside their invalid actions on 13
October 2010 was retrospectively to visit those decisions with
nullity; with the result that
the first appellant must be considered
as not having taken any decision on the renewal applications before
the 2009 by-laws commenced,
and that such applications were therefore
‘pending’ at that time.
[18]
As
was correctly observed in
Noah
,
9
precisely when a matter
may be said to be ‘pending’ is an issue that has to be
determined in the context in which the
word is used. However, the
general meaning of the word is ‘awaiting decision or
settlement’
10
and there can be no doubt
that,
once
the respondents had lodged their renewal applications with the first
appellant,
they
were thereafter ‘pending’ until such time as they had
been dealt with. The issue is whether the renewal applications
were
so pending when the 2009 by-laws came into operation.
[19] Counsel for the
respondent correctly pointed out that this court had held in
Oudekraal
11
that an invalid
administrative decision stands and has effect until it is set aside.
On the strength of this authority, she argued
that as the declaration
of invalidity was only made by the high court after the 2009 by-laws
had come into operation and,
as
at that time a final decision had been taken by the appellants which
had not yet been set aside,
the
renewal applications could not be construed as having been pending at
that time.
[20] However, as this
court has regularly stressed, an administrative decision declared to
have been invalid is to be retrospectively
regarded as if it had
never been made.
12
Accordingly, if the
decisions of the appellants are to be set aside, as all parties are
agreed should occur, the matter is to be
considered on the basis that
no valid decisions in respect of the respondent’s renewal
applications were ever taken. Those
applications must therefore still
be regarded as still awaiting a decision and, that being so, they are
clearly pending ─
and have been since they were lodged in March
2007. They were therefore pending when the 2009 by-laws came into
effect and, by
reason of clause 39(3) of such by-laws, must be dealt
with in terms of those by-laws rather than the 2001 by-laws.
[21] This conclusion
renders it unnecessary to consider the respondent’s argument
based on s 12(2)(c) of the Interpretation
Act 33 of 1957
13
that, if clause 39(3) is
of no application, it had acquired the right to have its renewal
applications considered under the 2001
by-laws before they were
repealed. Suffice it to say in the light of the decisions of this
court in
Gunn
,
14
Volkswagen
15
and
Edcon
16
─
the reasoning of
which is supported by various judgments in foreign jurisdictions
17
─
the respondent
had no more than a hope or expectation of acquiring a right under the
2001 by-laws which fell short of its enjoying
a right which had
accrued to it to have its application decided under those by-laws.
For that reason,
the
2001 by-laws would in any event have been of no application even had
clause 39(3) not been included in the 2009 by-laws.
[22] However, for the
reasons given, the 2009 by-laws are clearly of application to the
renewal applications and there is an absolute
prohibition under those
by-laws in respect of advertising signs being placed in the position
in which the two billboards in question
are situated. Thus not only
did the high court err both in finding that the 2001 by-laws would be
applicable to the reconsideration
of the renewal applications but
also in exercising a discretion on behalf of the first appellant
which the latter did not have.
Accordingly,
not
only can the order granting permission to the respondents to use the
billboards not stand,
but
there would be no point in directing the first appellant to
reconsider the renewal applications which it is obliged to refuse.
In
these circumstances, the high court ought merely to have made an
order setting aside the decisions of the two appellants. That
will be
reflected in this court’s order.
[23] Turning to the
question of costs, as the appellants have achieved substantial
success on appeal they are entitled to their
costs of appeal. In
regard to the costs in the high court, the attitude of the appellants
throughout has been that their decisions
were indefensible. In truth,
the proceedings in the high court concerned whether the respondent
should be granted permission to
use the billboards. The order the
court a quo made in that regard should not have been granted. In
these circumstances it seems
to me that the respondent should bear
the costs in the high court as well. It is not suggested that costs
of two counsel would
be inappropriate.
[24] The following order
is therefore made:
1. The appeal succeeds
with costs, such costs to include the costs of two counsel.
2. The order of the high
court is set aside and is substituted with the following:
‘
(a)
The decisions taken by the first respondent, the City of
Johannesburg, on 29 August 2007, to refuse the applicant’s
applications
for approval of the two outdoor advertising billboards
known as the Sandown billboard and the Kelvin View billboard, as well
as
the decisions by the third respondent, the city manager, to
dismiss the applicant’s appeals against the aforementioned
decisions
of the first respondent, are reviewed and set aside.
(b) The applicant is to
pay the respondents’ costs, such costs to include the costs of
two counsel.’
______________________
L E Leach
Judge of Appeal
APPEARANCES:
For Appellant: J Both SC
(with him A W Pullinger)
Instructed by:
Moodie & Robertson,
Johannesburg
Claude Reid Inc,
Bloemfontein
For Respondent: K Hofmeyr
Instructed by:
Pagel Schulenberg Inc,
Johannesburg
Symington & De Kok,
Bloemfontein
1
The
Eastern Metropolitan Local Council Advertising Signs And Hoardings
By-Laws 1999.
2
Published
in GN 7170 of 2001 in Gauteng
Provincial Gazette Extraordinary
234 of 28 November 2001.
3
Clause
2(7) as read with clause 41 of the 2001 by-laws.
4
Clause
2(6)(a)(vi) of the 2001 by-laws.
5
Dated
21 January 2008.
6
Promulgated
in the Gauteng
Provincial Gazette Extraordinary
150 of 13
June 2008.
7
Quoted
in para 6 above.
8
The
City of Johannesburg: Outdoor Advertising By-Laws published in
Gauteng
Provincial Gazette
Extraordinary
277 of 18 December 2009.
9
Noah
v Union National South British Insurance Co Ltd
1979 (1) SA 330
(T) at 332B-333C.
10
Concise
Oxford English Dictionary
12 ed (2011).
11
Oudekraal
Estates (Pty) Ltd v City of Cape Town & others
2004 (6) SA
222
(SCA) paras 27-31.
12
See
eg
Eskom Holdings Ltd & another v New Reclamation Group (Pty)
Ltd
2009 (4) SA 628
(SCA) para 9 and
Seale v Van Rooyen NO &
others: Provincial Government, North West Province v Van Rooyen NO &
others
2008 (4) SA 43
(SCA) paras 13 and 14.
13
It
reads as follows: ‘Where a law repeals any other law, then
unless the contrary intention appears, the repeal shall not
─
. . .
(c)
affect any right, privilege, obligation or
liability acquired, accrued or incurred under any law so repealed.’
14
Gunn
& another NNO v Barclays Bank DCO
1962 (3) SA 678
(A) at
684B-D.
15
Chairman,
Board on Tariffs and Trade v Volkswagen of South Africa (Pty) Ltd &
another
[2000] ZASCA 84
;
2001 (2) SA 372
(SCA).
16
Edcon
Pension Fund v Financial Services Board of Appeal & another
[2008] ZASCA 65
;
2008
(5) SA 511
(SCA).
17
Eg
Odelola v Secretary of State for the Home Department
[2009]
UKHL 25:[2009]
3 All ER 1061
(HL);
Chief Adjudication Officer v
Maguire
[1999] 2 All ER 589
,
[1999] 1 WLR 1778
;
Foodstuffs
(Auckland) Ltd v Commerce Commission
[2002] 1 NZLR 353
(CA) and
Attorney-General for the State of Queensland v Australian
Industrial Relations Commission & other
s;
Minister for
Employment and Workplace Relations of the Commonwealth of Australia
v Australian Industrial Relations Commission
and others
[2002]
HCA 42:
[2002] 213 CLR 485
at para 101.