About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Durban
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Durban
>>
2021
>>
[2021] ZAKZDHC 16
|
|
Rinaldo Investments (Pty) Ltd v Minister of Public Works and Others (D2213/2019) [2021] ZAKZDHC 16; [2021] 2 All SA 541 (KZD) (9 March 2021)
IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL LOCAL DIVISION, DURBAN
Case No: D2213/2019
In the matter
between:
RINALDO
INVESTMENTS (PTY) LTD
APPLICANT
and
MINISTER
OF PUBLIC WORKS
FIRST
RESPONDENT
MINISTER
OF DEFENCE
SECOND RESPONDENT
MINISTER
OF FINANCE
THIRD
RESPONDENT
THE
MUNICIPAL MANAGER:
ETHEKWINI
MUNICIPALITY
FOURTH
RESPONDENT
REGISTRAR
OF DEEDS, PIETERMARITZBURG
FIFTH
RESPONDENT
This
judgment was handed down electronically by circulation to the
parties’ representatives by email, and released to SAFLII.
The
date and time for hand down is deemed to be 10h00 on
9 March 2021
ORDER
1.
It is declared that the Special Conditions contained in the Deed of
Transfer
No. T565/1937, for the property described as Remainder of
Erf 11543 Durban and in Deed of Transfer No. T9182/1962 for the
property
described as Erf 11545 Durban, and known as the Natal
Command Property, for the retransfer of those properties to the
eThekwini
Municipality, have been met.
2.
The Minister of Public Works, is ordered to take all steps necessary
to effect
the transfer the Natal Command Property to the eThekwini
Municipality within 30 (thirty) days of this order.
3.
This order constitutes the necessary authorisation on behalf of the
first, second
and third respondents for the transfer of the property
from the Department of Public Works to the eThekwini Municipality.
4.
The eThekwini Municipality be and is hereby directed, within a period
of 10 (ten)
days after service on it of this Order, to appoint a
conveyancer to attend to the preparation and registration of the
transfer
of the Natal Command Property into its name.
5.
The first respondent be and is hereby directed, within a period of 14
(fourteen)
days after receipt by him from the conveyancer of the
documentation necessary to give transfer of the Natal Command
Property to
the eThekwini Municipality, to sign and return same to
the conveyancer.
6.
The costs relating to the transfer shall be paid by the first
respondent, who
shall pay the conveyancer's
pro forma
account
on presentation.
7.
In the event of the first respondent failing to comply with
paragraphs (2), (4),
(5) and (6) above, the Sheriff of this Court is
directed and authorised to sign all the necessary documents on behalf
of the first
respondent.
8.
That the eThekwini Municipality be and is hereby directed after
receiving transfer
of the Natal Command Property from the Department
of Public Works, to transfer such property to the applicant, in
accordance with
the agreement of sale concluded between these parties
on 12 December 2003, and as amended thereafter on 6 May 2005.
9.
The second respondent is ordered to pay the costs of the applicant
and the fourth
respondent on a party and party scale, including the
costs of two counsel where so employed, such costs to include all
costs reserved
and those attendant upon the interlocutory
applications.
JUDGMENT
Chetty
J
[1]
The fate of the decision by the eThekwini Municipality (‘the
municipality’),
represented in these proceedings by the fourth
respondent as the present municipal manager, to sell a property on
the Durban beachfront,
known as the Natal Command Property (‘the
property’), to the applicant, Rinaldo Investments (Pty) Ltd
(‘Rinaldo’
or ‘the applicant’), has been
drawn through the courts for more than a decade. Originally, the sale
was met with objection
by Giant Concerts CC (‘Giant’), an
entity in the business of hosting live concerts. The property
was sold to
Rinaldo on the basis that the property would be developed
as a film studio.
[2]
In the KwaZulu-Natal High Court, Pietermaritzburg, Giant’s
objection
was upheld and the sale of the property to Rinaldo was set
aside.
[1]
This in turn led to an appeal to the Supreme Court of Appeal which
was upheld, with the court concluding that Giant did not have
the
necessary standing to challenge the contract concluded between the
municipality and Rinaldo.
[2]
[3] Undeterred,
Giant applied for leave to appeal to the Constitutional Court.
That decision is reported sub nom
Giant Concerts CC v Rinaldo
Investments (Pty) Ltd
& others
2013 (3) BCLR 251
(CC). The Constitutional Court found that ‘Giant never
demonstrated that it had any serious commercial interest in
the
site’
[3]
and accordingly dismissed the appeal. For the purposes of the
present application it is necessary to clarify at the outset
that the
challenge to the lawfulness of the sale was dismissed on the basis of
Giant’s lack of standing, and the Constitutional
Court did not
consider the merits of the matter. Cameron J, writing for the
court, said the following:
‘
This conclusion makes it
unnecessary to address the merits of Giant's challenges to the
transaction, since it has established no
legal interest in their
adjudication. When a party has no standing, it is not necessary to
consider the merits, unless there is
at least a strong indication of
fraud or other gross irregularity in the conduct of a public body.
The full record of the dispute
was before us, and we heard full
argument on all of Giant's complaints. On the papers before us, we
are unable to find that there
is fraud or gross irregularity. I will,
therefore, say nothing about the merits.’
[4]
[4]
The second respondent (‘the Minister of Defence’) took
issue
with the applicant’s citing of the introductory
paragraphs in the Supreme Court of Appeal judgment and that of the
Constitutional
Court, to which I have referred to above, as being
‘common cause’. While it is correctly pointed out
that the
Constitutional Court did not deal with the merits of the
lawfulness of the contract of sale, both courts had before them the
historical
basis on which the property was entrusted to the
Department of Defence and the grounds stipulated for its return. The
interpretation
by both courts of that background is binding on this
court. I therefore do not understand the basis for the
objection to
these facts being regarded as ‘common cause’.
[5]
The facts of the matter, historically, and as
both the Supreme Court of Appeal
[5]
and the Constitutional Court
[6]
interpreted them at the time was that the land at issue described as
the Remaining Extent of Erf 11543 and Erf 11545 Durban, commonly
known as the Natal Command Property, constitutes about 21 hectares in
extent, and is prime property on the Durban beachfront. The
bulk of
it housed the headquarters of the Natal Command of the South African
National Defence Force (‘SANDF’), as well
as including
certain adjoining municipal land. The former Corporation of the City
of Durban (‘the Corporation’), now
the municipality,
acquired the SANDF portion in 1855, but it donated the land to the
central government in 1937 for military purposes.
This donation was
subject to an express condition that the Government was to use the
property for defence purposes only, and in
the event of it not being
used or required for such purposes, the land would revert to and
again become the absolute the property
of the Corporation. As the
terms of the donation are vital to the outcome of this application, I
set them out in full below:
‘
The
land shall be used for defence purposes only, and in the event of its
not being so required or used, it shall revert to and
become the
absolute property of the Corporation without any liability to pay
compensation of any kind whatsoever in respect thereof,
and the
Government undertakes to sign and complete any documents necessary to
re-transfer the said land to the Corporation as aforesaid,
and to
hand over the land in a proper and undamaged condition. The expenses
of and relative to the said re-transfer to the Corporation
shall be
paid by the Government. The Government, however, shall be entitled to
remove any buildings that may be standing upon the
land or to make
over all or any of such buildings to the Corporation upon a valuation
or upon such terms and conditions as may
be being mutually agreed
upon. All buildings not so removed or made over at the end of six
months from the date upon which the
City Council notifies the
Government that the land is to be re-transferred, shall become the
property of the Corporation without
the necessity of any compensation
being paid therefor.’
[7]
[6]
In 1962 a portion of the property was
transferred back to the Corporation, which in turn donated an
adjoining property to the Government.
This property forms part of the
Natal Command Property. This transfer was subject to a similar
condition as the 1937 transfer,
and provided that
‘. . .
the said land shall be used for Defence purposes only, and in the
event of it not being so required or used, it shall
revert to the
City Council of the City of Durban’.
[8]
These conditions will be referred to herein as the ‘special
conditions’.
[7]
By 2003, the SANDF had decided to move its
defence headquarters elsewhere in the port area of Durban, and to
vacate the property.
Once this decision became known, the
applicant approached the municipality with a proposal to purchase the
property on the basis
that it would develop it into a film studio.
[8]
The notion of establishing a film studio was
something that aligned with the municipality’s Integrated
Development Plan, which
recognised the film industry as important for
the economic development of the municipality and KwaZulu-Natal as a
whole.
[9]
In October 2009 the SANDF, in keeping with its
plans to relocate its headquarters elsewhere, vacated the Natal
Command Property.
In December 2015, the first respondent (‘the
Minister of Public Works’) approved the transfer of the
property back
to the municipality (‘the December 2015
authorisation’). In April 2017, almost 14 years after
deciding that it
would relocate its headquarters to another area in
Durban and eight years after vacating the property, the Department of
Defence,
through the Director-General of Public Works, indicated that
it still required the property ‘for defence purposes moving
forward’.
[10]
It is not in dispute that the sale of the
property to the applicant was subject to a suspensive condition that
the municipality
first acquire the property from the Department of
Defence. The Minister of Defence, which is the only respondent
opposing the relief
sought by the applicant, contends that as the
suspensive condition was never fulfilled, no rights could flow from
the agreement
concluded between the municipality and the applicant.
[11]
The
position at present, more than a decade after the Army marched off
the property, is that the property lies vacant and nearly
all the
buildings have been demolished. Only a shell remains as a
façade of the headquarters’ building, together
with the
walls of a church. Both of these structures appear to be
protected in terms of the heritage legislation. As a result
of the
position adopted by the Department of Defence, borne from its stance
that it still requires the property for defence purposes
at some
stage in the future and that it intends to use the property when it
has the necessary funds to do so, the municipality
has been unable to
take transfer of the property and consequently unable to honour its
contractual obligations to the applicant
in terms of the contract of
sale.
[12]
As a result of, what by all accounts, has been
an inordinate delay in securing the transfer of the property, the
applicant launched
this application in June 2019, in which it is
supported by the municipality, in respect of the following relief
:
‘
1.
It is declared that the Special Conditions contained in the Deed of
Transfer No. T565/1937, for the property described as Remainder
of
Erf 11543 Durban and in Deed of Transfer No. T9182/1962 for the
property described as Erf 11545 Durban, and known as the Natal
Command Property, for the retransfer of those properties to the
eThekwini Municipality, have been met.
2.
It is declared that the Minister
of Public Works, as the custodian of all land vesting in the National
Government of the Republic
of South Africa, is obliged to transfer
the Natal Command Property to the eThekwini Municipality.
3.
It is directed that this Court
Order shall constitute the authorisation on behalf of the First,
Second and Third Respondents for
the transfer of the Natal Command
Property from the Department of Public Works to the eThekwini
municipality.
4.
That the eThekwini Municipality
be and is hereby directed, within a period of 10 (ten) days after
service on it of this Order, to
appoint a conveyancer to attend to
the preparation and registration of the transfer of the Natal Command
Property into its name.
5.
That the First Respondent be and
he is hereby directed, within a period of 14 (fourteen) days after
receipt by him from the conveyancer
of the documentation necessary to
give transfer of the Natal Command Property to the eThekwini
Municipality, to sign and return
same to the conveyancer.
6.
It is directed that the costs
relating to the transfer shall be paid by the First Respondent who
shall pay the conveyancer's pro
forma account on presentation.
7.
That the Sheriff of this Court
is directed and authorised to sign and complete any conveyancing
documentation necessary to transfer
the Natal Command Property, from
the Minister or Department of Public Works to the eThekwini
Municipality in the event that the
First Respondent fails timeously
to sign all such documentation delivered to him by the conveyancer in
terms of paragraph 5 of
this Order to give transfer of the Natal
Command Property to the Applicant.
8.
That the eThekwini Municipality
be and is hereby directed after receiving transfer of the Natal
Command Property, from the Department
of Public Works, to transfer
such property to the Applicant, in accordance with the agreement of
sale concluded between these parties
on 12 December 2003 and as
amended thereafter on 6 May 2005.
9.
Directing the Minister of
Defence and the Minister of Public Works to pay the costs of this
application jointly and severally, if
they oppose this application,
with such costs to be paid:
(a)
on
the attorney and client scale;
(b)
including
the costs of two counsel where so employed; and
(c)
which costs are to be paid
jointly and severally with any other respondent opposing this
application.’
[13]
In a nutshell, the applicant seeks relief which will result in the
property being transferred
back to the municipality, with the result
that the suspensive condition in the sale agreement between the
applicant and the municipality
will be fulfilled, allowing the
property to be transferred to the applicant.
Prior to the sale
agreement being concluded, the Department of Defence, on its own
version in earlier litigation, accepted that
the Department of Public
Works was the ‘custodian’ of the property and the
Department of Defence was the ‘user’.
When the objection
by Giant to the sale of the property to the applicant came before the
KwaZulu-Natal High Court, Pietermaritzburg
[9]
an affidavit was deposed by Ms Ntsoaki Kunene who, in November 2008,
was the Head of Property Management at the Durban office of
the
Department of Public Works. Ms Kunene pointed out that at the
time of deposing to her affidavit, the property was still
being used
by the Department of Defence and no sale agreement regarding the
property had been concluded with any purchaser. The
deponent further
states in her affidavit that:
‘
.
. . prior to and subsequent to 2003 the Fifth Respondent [Minister of
Defence] had indicated its intention to relocate its activities
at
Natal Command to Salisbury Island and/or other suitable sites but
this would be dependent on various logistical and cost factors
as
well as Ministerial approval. I annex hereto marked “B” a
copy of a letter directed to the Second Respondent [eThekwini
Municipality] concerning the proposed relocation. Various aspects
concerning a proposed relocation of the Fifth Respondent [Minister
of
Defence] have still not been resolved as at the time of the
conclusion of the Sale Agreement dated 12 December 2003 and concluded
between the 2
nd
and 3
rd
Respondents [eThekwini
Municipality and Rinaldo Investments (Pty) Ltd] and I annex hereto
marked “C” a letter from the
Second Respondent dated 12
December 2003 to the National Department of Public Works regarding
the relocation of the Fifth Respondent.’
[14]
The high-water mark of the Minister of Defence’s
response to Ms Kunene’s affidavit is that she does not say that
the
Department of Defence will not require the property at some time
in the future and her acknowledgement that the transfer was
contingent
on ‘Ministerial approval’.
[15]
Consistent with the views expressed by Ms Kunene in the
previous paragraphs, the applicant substantiated its contention that
the
military had moved off the property with reference to an article
in a local newspaper, The Natal Mercury, dated 29 March 2007 entitled
‘Marching Orders for Army base after many years’.
The
article notes that the closure of the military’s general
support base occurred after a controversial sale of the property
by
the municipality to the applicant, headed by Durban filmmaker, Mr
Anant Singh. The article goes on to state that:
‘
The
closure of the unit was marked by the handing over of the base flag
by the last commanding officer, Col Peter Kobbie, to Maj-Gen
Robert
Madita. “This move was necessary to meet the needs of a
dynamically changing South African National Defence Force,
and the
South African Army’s 2020 vision of repositioning itself within
the SANDF as a self-supportive force preparation
organisation,”
said Kobbie.’
[16]
In response, Lt. General Mbuli, who deposed to the opposing
affidavit on behalf of the Minister of Defence (absent any proof of
his authority to do so despite his assertion to the contrary),
[10]
does not deny the accuracy of the newspaper article, which he refers
to somewhat disparagingly as a ‘tabloid’.
[11]
He however acknowledges that Col. Kobbie was the last Commanding
Officer of the Army’s Support Base at Battery Beach (ie
the
property), and who currently works under his Command in the Logistics
Division. No attempt was made to have Col. Kobbie clarify,
through a
supporting affidavit, the circumstances leading to the Army’s
departure from the property in 2007 and any reasons
for such
decision. As the Commanding Officer of the base, one would
assume that he had intricate knowledge of these decisions.
In any
event, Lt. General Mbuli submits that where he relies on hearsay
evidence, this should be admitted in terms of
s 3(1)
of the
Law of
Evidence Amendment Act 45 of 1988
. The Constitutional Court in
S v
Molimi
[2008] ZACC 2
;
2008 (3) SA 608
(CC) para 35, cited with approval the
statement in
S v Shaik & others
[2006] ZASCA 105
;
2007 (1) SA 240
(SCA) para
170 that a court making a determination whether it is in the
interests of justice to admit hearsay evidence must:
‘
.
. . have regard to every factor that should be taken into account,
more specifically, to have regard to the factors mentioned
in
s
3(1)(c).
Only if, having regard to all these factors cumulatively, it
would be in the interests of justice to admit the hearsay evidence,
should it be admitted.’
[17]
Support for the contention of the applicant that the
Department of Defence intended to vacate the property and no longer
required
its use is evidenced in a letter dated 8 October 2009 from
the General Officer Commanding, Department of Defence Logistic
Support
Formation, signed by Mr Hornby, and addressed to the regional
office of the Department of Public Works, Durban where the following
is said:
‘
SANDF Establishments:
Withdrawal from Battery Beach
1.
Notice is hereby given that the
tentative date to vacate Battery Beach is Friday, 16 October 2009.
2.
This date or alternate
arrangement will be confirmed by Col van der Lingen on his return to
duty on Monday 12 October 2009.
3.
Kindly make the necessary
arrangements for the electricity and water meter readings to be done.
4.
It is suggested that it would be
prudent to advise Durban Metro of this tentative arrangement in order
for them to plan for the
handing over of the property. 5. Your
assistance in this regard will be appreciated.’
[18]
The response of Lt. General Mbuli to this letter is that it was
written by Mr Hornby, who
is not a Major-General in the SANDF, that
he appeared to have signed the letter on behalf of the General
Officer Commanding and
that Mr Hornby did not have the authority to
assert that the Minister of Defence no longer required the property
for defence purposes.
Accordingly, Lt. General Mbuli submits
that this letter cannot be relied on as proof that the Minister of
Defence returned the
property to the municipality. This
response in my view is shallow and an attempt to distance the
Minister of Defence from
a letter written by a member of the SANDF,
on which the applicant, the municipality and the Department of Public
Works were entitled
to place reliance. Moreover, the letter
when viewed as part of the overall mosaic of correspondence and
factual occurrences
spanning more than a decade, is consistent with
the submission of the applicant that the Minister of Defence gave
notice of his/her
intention at the time to move off the property and
relocate the Army headquarters elsewhere in Durban. It is also
deeply
ironic that while Lt. General Mbuli accuses Mr Hornby of not
having authority to write a letter and of not being a Major-General
at the time, he himself as not put up any authority to make the
allegations he does on behalf of the Minister of Defence.
It is
the Minister of Defence herself who is the second respondent and who
must depose to an affidavit under oath, not a functionary
who only
describes himself as being in the employ of the SANDF.
[19]
I accordingly find no merit in the argument advanced by Lt. General
Mbuli and find that
the statement by Mr Hornby could not have been
unauthorised, and that it was consistent with the proved facts.
In my view,
the only reason for Lt. General Mbuli raising an obstacle
in the way of such correspondence being admitted is that when it is
viewed
as part of the pieces of the jigsaw, over a period of more
than a decade, the letters written by officials in the municipality,
the Department of Public Works and the SANDF give credence to the
version that the municipality and the applicant have all along
espoused – that the Army gave the municipality the assurance it
was vacating the property and the municipality believed that
it was
entitled to act on the basis of that undertaking. That
conclusion is damning for the case of the Minister of Defence.
[20]
The approach of Lt. General Mbuli to the correspondence written by Mr
Hornby should not
be seen in insolation. A similar theme is
played out in his answering affidavit, an extract of which appears
below:
‘
However
by 5 March 2008 Brigadier General Navratil, the Director Facilities
in the Logistics Division, reacted to the concerns about
the
breakdown in security at Battery Beach [the property]. He indicated
that the Chief of the Army had confirmed that he was supporting
the
efforts to vacate the various occupants from Battery Beach and in
line with a commitment given to the Chief of the South African
National Defence Force which set out 30 June 2008 as the final date
for relocation.
He also confirmed that a
concerted effort was being made to relocate from Battery Beach
but
he did not indicate in the letter that the SANDF had no future
defence purpose for the property in question.
’
(my
emphasis).
[21]
Lt. General Mbuli appears to operate from the premise that
notwithstanding any statement
from the SANDF that it was vacating the
property, this must be interpreted as a temporal decision, as there
is no statement that
the decision to vacate excluded the possibility
of a return, at whatever time in the future. I can only assume that
this strategy
has been embarked on out of desperation to bolster what
are otherwise flimsy grounds of opposition.
[22]
On 16 October 2009 a letter was addressed by the Director-General of
the Department of
Public Works to the Head: Real Estate at the
municipality stating the following:
‘
HANDOVER
OF BATTERY BEACH
MILITARY BASE TO
THE
eTHEKWINI
MUNICIPALITY
The
Natal Command Military base situated at Battery Beach, Durban
consisted initially of Rem of Erf 11543, Erf 11545 and Rem of
Erf
11546 Durban. Portion of Rem of Erf 11543 and Rem of Erf 11546
(on the western side of the M4) were vacated by the Military
some
time ago already and have been handed back to the Municipality.
Recently a portion of the Military Base on the eastern side
of the M4
was released to the Municipality to enable contractors to take
occupation.
Today,
16 October 2009, what remains of the Military Base is being handed
over to your Municipality (i.e. Erf 11545 and Rem of Erf
11543
Durban) This handover is in compliance with the condition on which
the land was donated to the State by the Municipality
in 1937, which
requires that ownership be returned to the Municipality if the land
is no longer required for Military purposes.
Effective
16 October 2009, the eThekwini Municipality accepts ownership of the
property at Battery Beach and will assume all benefits,
risks and
responsibilities attached thereto, including payment of rates and
services. The transfer of the properties to the
Municipality
will be effected by the State Attorney and the costs thereof will be
paid by the State.
I
request that special thanks be conveyed to the Municipal Council for
their generosity in making this land available to the Military
over
this prolonged period. . .’.
[23]
In line with his stance to the letter by Mr Hornby, Lt. General Mbuli
contends that the
author of the letter, whom he surmises to be a Mr
Young from the Department of Public Works, is unable to make
assertions that
bind the Minister of Defence, particularly concerning
the view expressed in the letter that the ‘land is no longer
required
for Military purposes’. Lt. General Mbuli suggests
that the applicant is attempting to ‘derive mileage’ out
of
the exchange of correspondence between the Department of Public
Works and the municipality, for the obvious reason that if such
communication is accepted by the court, it is indicative of the
position as all role players interpreted it at the time, save for
the
Minister of Defence, who only uttered her objection almost ten years
after the fact. Lt. General Mbuli submits that if
the letters
are a correct reflection of the position then it was incumbent on the
municipality to have brought an application or
action for an order
declaring that the property vests in it and that it is entitled to
pass transfer. Instead, it is contended
that the municipality hopes
to secure the same result through a circuitous procedure of the
applicant seeking a declaratory order.
[24]
The vexed question of the sale of the property was raised in the
National Council of Provinces.
The response of the Minister of
Defence and Military Veterans as recorded in an official transcript
is as follows:
‘
The
property referred to is commonly known as the Natal Command Site and
was leased by the national Department of Public Works for
the South
African National Defence Force on a 99 year lease from the erstwhile
Durban Corporation, now known as the Ethekwini Municipality.
As a
result of the consolidation the facilities (sic) footprint in Durban,
the facility became superfluous and the South African
National
Defence Force had handed the facility back to the national Department
of Public Works and the Ethekwini Municipality on
16 October 2009.’
[25]
The response of the Minister of Defence to the reliance by the
applicant on what is contained
in the transcript is that the response
does not indicate that the Minister of Defence ‘does not have a
defence purpose for
the property’. As I understand this ground
of opposition, which appears to be a central theme running through
the Minister
of Defence’s (or Lt. General Mbuli’s)
affidavit is that even if the property is no longer presently
required for defence
purposes, there is no unequivocal statement from
the Minister of Defence that the property will never be required, at
any time
in the future, for defence purposes. For that reason,
unless there is an indication to permanently terminate the Army’s
use of the base, the court and the municipality must construe the
marching off the base as a ‘temporary
cessation
of activities’. I will consider this ground of opposition
in further detail below when it is examined in the
context of the
terms of the donation of the site.
[26]
Although Lt. General Mbuli submits that the factual position of the
property is irrelevant
to the issue in dispute, I take a different
view. The factual position (which the Minister of Defence is unable
to refute) is that
since the Army marched off the property on 16
October 2009, it has no longer been in occupation of the property.
As stated
earlier, the former Army headquarters is now a shell with
only two heritage components of the former structures surviving.
Acting
on the basis that Department of Defence had relinquished its
use and possession of the property and returned it in accordance with
the Deed of Transfer, the municipality entered into the agreement of
sale with the applicant. This view is supported by the
contents
of a letter from the Army dated 25 November 2016 in which it
requested permission from the municipality to lease the property
for
a short period in February 2017 during which it was to host the Armed
Forces Day, 2017.
[27]
While Lt. General Mbuli insists that above-mentioned letter was
written by a Brigadier
General HJ Stroebel without the necessary
authorisation and that no monies were ultimately paid to the
municipality in terms of
the lease of the property, the ineluctable
conclusion is that the Minister of Defence would have had no need to
ask permission
to use the property if the Department of Defence had
never ceased control, possession or occupation of it in the first
place.
The common refrain of Lt. General Mbuli is to suggest
that where an author of a document contradicts the Minister of
Defence’s
current position, such document is unauthorized.
There was no attempt by him to obtain an affidavit from Brigadier
General
Stroebel despite the latter still being in the Army and Lt.
General Mbuli and his counsel consulting with him on this issue in
preparing the opposing affidavit in this matter. This court is
not prepared to allow the continuous reference to hearsay evidence
in
circumstances where the persons with personal knowledge of the facts
could have confirmed these. Moreover, Lt. General
Mbuli fails
to indicate what steps, if any, he took against Brigadier General
Stroebel for engaging in what he terms a ‘farce’.
He does not say whether the Army did in fact proceed to use the
property for the Armed Forces Day in 2017. Lt. General Mbuli
further contends that only he had the authority to have entered into
such an agreement with the municipality as the Chief of Logistics.
He fails to indicate the specific authority under which he would have
acted, and why he would have been in any different a position
to
Brigadier General Stroebel.
[28]
On 18 January 2016, Ms. Hlengwa, the Acting Director of Property
Management at the Department
of Public Works, wrote to the
municipality, recording that the transfer had been approved by the
Minister of Public Works on 22
December 2015, and that she would be
contacting the transferring attorneys. A subsequent letter from Ms.
Hlengwa, dated 25 January
2016, which was addressed to the
conveyancers appointed by the municipality to effect the transfer,
attaches as proof of the necessary
authority for the transfer, a
document referred to as a ‘Route Form’ as well as a
detailed internal memorandum.
The internal memorandum, authored
by the Acting Director-General of the Real Estate Investment
Management department of the Department
of Public Works, is addressed
to the Minister of Public Works, in terms of which the history of the
property and the basis on which
it is being returned to the
municipality, is set out (‘the memorandum’). The last
page of the memorandum reflects what
the applicant and the
municipality contend to be the approval by the Minister of Public
Works for the transfer of the property
to the municipality (‘the
2015 ministerial authorisation’), and the Route Form, being
signed by all the relevant role
players in the Department of Public
Works (save for the Deputy Minister Cronin), reflects the internal
approvals necessary for
such transfer.
[29]
While the memorandum does not refer to an express instruction or
consent by the user of
the property, being the Department of Defence,
regarding the transfer of the property, it refers in some detail to
the Army vacating
the property and the Department of Public Works
returning the property to the municipality on 16 October 2009.
This is consistent
with the applicant’s version of events as
set out in its founding papers. What emerges from the
memorandum is the non-responsive
attitude of the Department of
Defence to the various documents sent to it by the Department of
Public Works. What is abundantly
clear is that at no stage
prior to the decision to transfer the property had the Department of
Defence uttered a word in protest
against the decision made by
another government department. The memorandum recommends the handing
back of the property to the municipality
in accordance with the Deeds
of Transfer.
[30] Lt. General Mbuli takes
issue with the memorandum and submits that the
Department
of Public Works cannot bind the Department of Defence to any
agreement to which the Minister of Defence was not party.
Much
is made of the absence of the signature of the Deputy Minister from
the memorandum. I see no reason why the absence
of the Deputy
Minister’s signature invalidates the agreement to transfer the
property to the municipality. In any event,
no legal argument
has been advanced as to why this would be so and I cannot conceive of
one. Again, the contents of the memorandum
are consistent with the
factual matrix as set out by the applicant.
[31]
By letter dated 5 April 2017 the Director-General of the Department
of Public Works wrote
to the Acting City Manager of the municipality
regarding the proposed transfer of the property. Importantly, the
letter recorded
that the donation of the property was subject to the
following conditions: ‘(a) that the land shall be used for
defence purposes
only, and (b) in the event of it not being so
required or used, it shall revert to and become the absolute property
of the corporation
(Municipality)’.
The letter went on to note the following:
‘
Whilst
there have been numerous discussions in recent years on the possible
return of the properties to the Municipality, you are
advised that
the Department of Defence has reaffirmed its need to retain the use
of the above-mentioned properties for Defence
purposes moving
forwards. For this reason, the Department cannot accede to the
request for the return of the subject properties.’
[32]
It is noteworthy that neither the Minister of Defence nor Lt. General
Mbuli questioned
the authority of the author of the above letter, or
whether the letter was written with the concurrence of the Minister
of Public
Works. What is equally revealing is that the author
of the letter was also a signatory to
the 2015
ministerial authorisation, approving
the transfer of the
property to the municipality. It is therefore not surprising that Lt.
General Mbuli and/or the Minister of
Defence have sprung to the
defence of the Director-General of Public Works in conveying his
decision that his department is unable
to authorise the transfer of
the property in light of the position adopted by the Department of
Defence.
[33]
As a consequence of the decision of the Department of Defence,
conveyed via the Department
of Public Works in the letter dated 5
April 2017, the municipality is unable to pass transfer of the
properties in question to
the applicant, despite its willingness to
do so.
[34]
The applicant has set out in detail the prejudice that it has
suffered as a result of the
delay in obtaining transfer of the
property since the dismissal of the appeal by Giant in the
Constitutional Court in November
2012.
[12]
The delay over that long a period is manifest and it can hardly be in
the interests of both the municipality and the province of
KwaZulu-Natal for a valuable tract of land to lie vacant without
generating any revenue either for the applicant in terms of the
proposed Durban Film City, or for the municipality in the form of
revenue collection. To enhance its point as regards the prejudice
suffered, the applicant points to another development which commenced
around the same time it concluded the agreement of sale of
the Natal
Command property. That development, known as the Pearls, was
constructed at a cost of approximately R3.5 billion, securing
a
revenue generation for the municipality of almost R40 million per
annum. These submissions by the applicant of the prejudice
it has
suffered are uncontested.
[35]
The applicant contends that it is unfathomable that the Department of
Defence, having vacated
the property in October 2009, to assert eight
years later that it still requires the property ‘for defence
purposes moving
forward’. It is equally true that since the
period when the agreement of sale was signed and the decision was
taken by the
Minister of Public Works to authorise the transfer, new
Ministers may have taken over the portfolios that are relevant to the
present
dispute. However, the applicant submits that to the extent
that the transfer of the property was authorised by the Minister of
Public Works in terms of the
2015 ministerial
authorisation
, the Minister of Defence is bound thereby until
that decision is set aside by a competent court. Where any dispute
exists between
the Minister of Public Works and the Minister of
Defence as to whether the
2015 ministerial
authorisation
was valid and enforceable, s 41 of the
Constitution provides a mechanism for the resolution of such
inter-departmental disputes,
obliging the cooperation of the
respective spheres of government in order to provide effective,
transparent and accountable government,
and to ensure that state
departments exercise their powers in a way that does not encroach on
the functional or institutional integrity
of other arms of
government, in this case the municipality.
[36]
The municipality has filed a notice to abide and has delivered an
explanatory affidavit
in order that the court may arrive at a just
and proper decision. Mr
Nxusani SC
, who appeared
together with Mr
Kadungure
on behalf of the Minister of
Defence, took issue with the municipality’s position in the
matter, contending that while the
municipality enters the fray as a
neutral party, it is ‘partisan’ in its approach to the
matter. To the extent
that the municipality filed a late
replying affidavit, I am not persuaded that the Minister of Defence
is prejudiced in any manner.
Moreover, counsel for the Minister
of Defence was late in filing its heads of argument, and the joint
statement was prepared without
the participation of the Minister of
Defence. That apart, I see no reason for the objection to the
participation of the municipality
and the stance that it has adopted,
namely that the Ministers of Public Works and Defence are bound by
the
2015 ministerial authorisation
as an
administrative act which may not simply be ignored by the Minister of
Defence. In any event, the municipality has a
direct interest
in the matter as it is a party to the sale agreement concluded with
the applicant. Like the applicant, the
municipality too has
lost revenue on the site as it has been unable to collect taxes on
the property for more than a decade.
[13]
[37]
I now turn to deal with the Minister of Defence’s challenge to
the locus standi of
the applicant to bring these proceedings in which
it seeks a declaration of rights. The contention is that the
applicant does not
have a direct and substantial legal interest in
regard to whether the special conditions in the Deeds of Transfer
have been ‘breached’.
[14]
The applicant relies on the decision in the Constitutional Court
judgment of
Giant Concerts CC v Rinaldo Investments
[15]
for its submission that the applicant has established locus standi.
Giant based its standing, albeit unsuccessfully, on s 33 and
38(
a
)
of the Constitution. Although the issue before the Constitutional
Court concerned a challenge to the lawfulness of the municipality’s
decision to conclude the contract of sale with Rinaldo, Giant’s
interest was based on its assertion that it wished to develop
its own
film studio on the property, and it offered to pay more for the
property than Rinaldo. Giant was, however, unable to substantiate
its
assertion and it also refused to disclose how much it was willing to
pay. It was due to this lack of detail that the Constitutional
Court
found that Giant lacked standing, holding that it was unable to
demonstrate how its interests ‘were capable of being
directly
affected’.
[16]
The court stated that:
‘
To
establish own interest standing under the Constitution a litigant
need not show the same “sufficient, personal and direct
interest” that the common law requires,
but must still show that
a contested law or decision directly affects his or her rights or
interests, or potential rights or interests.
. . .
Each
case depends on its own facts. There can be no general rule covering
all cases. In each case, an applicant must show that he
or she has
the necessary interest in an infringement or a threatened
infringement. And here a measure of pragmatism is needed.’
[17]
[38]
The court concluded that ‘a commercial interest in the subject
matter of the transaction
will be sufficient to establish
own-interest standing to challenge it’,
[18]
however Giant had not even established that it had a commercial
interest, which led the court to conclude that it did not meet
the
‘minimal own-interest threshold’
[19]
requirement.
[39]
By way of contrast, the applicant in the present matter contends
that, in addition to approaching
this court in order to assert its
private law contractual interest in terms of its plans to develop a
film studio on the property,
its challenge is also based on public
law constitutional and administrative law grounds.
[40]
In this regard, the applicant submits that the application is
underpinned by holding the
Department of Defence to the principles of
accountability, certainty and rationality in honouring its obligation
to agree to transfer
of the property back to the municipality,
thereby paving the way for the applicant to acquire its long overdue
ownership.
In doing so, as I understood the argument, the
applicant submits that the application has both private and public
law implications,
and relied on
Economic Freedom Fighters v
Speaker, National Assembly & others
2016 (3) SA 580
(CC) para
75 where the court stated that:
‘
Our
foundational value of the rule of law demands of us, as law-abiding
people, to obey decisions made by those clothed with the
legal
authority to make them or else to approach courts of law to set them
aside, so we may validly escape their binding force.’
[41]
To the extent that there may be some doubt that the applicant has
identified a particular
right in the Bill of Rights that has been
infringed, or that its rights have not been directly infringed, the
decision in
Kruger v President of Republic of South Africa &
others
[2008] ZACC 17
;
2009 (1) SA 417)
(CC) demonstrates that ‘a generous
approach to standing’
[20]
should be adopted in Constitutional litigation, even where s 38 of
the Constitution is not directly applicable. The court held
that an
‘expanded understanding of what constitutes a direct and
personal interest should be adopted in this case.’
[21]
In the present matter, if the applicant is successful in its relief
which triggers the suspensive condition in the agreement of
sale, it
sets in motion of series of events, both in the private and public
sphere. It is not necessary for the purposes of the
present
litigation to make any finding as to whether the litigation was
embarked on in the public interest.
[42]
It was further contended that the principles of reliance,
accountability and rationality,
as referred to in
Pretorius &
another v Transport Pension Fund & others
2019 (2) SA 37
(CC)
favour the duty of the Department of Defence not doing anything to
retard the re-transfer of the property to the municipality.
In
KwaZuluNatal Joint Liaison Committee v MEC for Education,
KwaZulu-Natal & others
2013 (4) SA 262
(CC) the applicant
‘brought proceedings to enforce what it said were the
“promises”’
[22]
in a notice which specified the subsidies that would be paid to
independent schools. The applicant relied on that notice as
constituting
an enforceable obligation to pay. The court found that
the ‘undertaking’ to pay did not amount to a contractual
agreement
to pay, however, that it was nevertheless enforceable. The
court held in relation to the duty to act rationally that:
‘
Government officials
must, in dealing with those who act in reliance on their
undertakings, act rationally. . . But it is impossible
to tailor
behaviour and expectations to a promise made in relation to a period
that has already passed. Revoking a promise when
the time for its
fulfilment has already expired does not constitute rational treatment
of those affected by it.’
[23]
[43]
The applicant’s case, which is supported by the municipality,
is essentially that
the Department of Defence must be held to the
promise which it made when it vacated the property in 2009, and which
later received
the legislative authorisation in terms of the 2015
ministerial authorisation. By way of analogy, the court in
KwaZulu-Natal Joint Liaison Committee
recognised that the
State department’s ‘promise’ to pay subsidies to
independent schools was legally enforceable
because the promise was a
part of the department’s constitutional duty, and impacted on
the Constitutional right to basic
education. In
Pretorius
,
a ‘promise’ had been made by the State that its
employees’ pension benefits would remain the same when a new
commercial entity took over, and this promise was endorsed by the
Transport Minister. The promise was broken a decade later and
in a
challenge mounted against the decision, it was contended that the
conduct was ‘unconscionable when measured against
the
constitutional standards of reliance, accountability and
rationality’.
[24]
[44]
When the applicant’s relief, inter alia, for an order that the
Department of Defence
is obliged to sign and complete any documents
necessary to re-transfer the said land to the municipality is
measured against
KwaZulu-Natal Joint Liaison Committee
and
Pretorius
the difference is that in those cases the ‘promise’
was rooted in the constitutional rights of education and social
security, respectively. The applicant’s case, by contrast, is
contained in the fulfilment of the special conditions in the
Deeds of
Transfer. Mr
Nxusani
for the Minister of Defence questioned
the need for a declaratory order (albeit for other reasons) given the
facts of the case.
In addition, counsel raised the issue that locus
standi is lacking in respect of the applicant because it ‘has
not brought
a constitutional challenge. It has brought a
declarator.’
[45]
In dealing with this aspect, the issue arises whether the applicant
is obliged, in seeking
a declaratory order, to source its right in
something additional to the Department of Defence’s obligation
to give effect
to the principles of ‘reliance, accountability
and rationality’? The applicant has not brought an application
based
on administrative action (s 33 of the Constitution), nor has it
isolated another constitutional right. The answer in my view
lies in the contention on behalf of the municipality that the stance
adopted by the Department of Defence is unlawful, not only
because it
ignores the valid and extant 2015 ministerial authorisation, but also
because its refusal is inconsistent with the objects
of GIAMA (in s
3(b)) to ‘ensure effective immovable asset management within
government’. The municipality submitted
that the Department of
Defence’s ‘defiant stance has resulted in the property
sitting vacant and unused, and in a state
of dereliction.’
[46]
I am satisfied that the applicant has established a sufficiently
broad factual and legal
basis for the assertion of its right to a
declarator, a critical component of which is holding government
departments accountable
for their conduct, through which citizens
order their lives and the basis on which juristic persons make
business decisions that
impact on their viability, and on which
municipalities plan for the orderly development of their cities and
districts. These values
find expression in
MEC for Health, Eastern
Cape & another v Kirland Investments (Pty) Limited t/a Eye and
Lazer Institute
2014 (3) SA 481
(CC) (‘
Kirland’
),
para 103, where the court explained that:
‘
The
fundamental notion — that official conduct that is vulnerable
to challenge may have legal consequences and may not be
ignored until
properly set aside — springs deeply from the rule of law.
The courts alone, and not public officials,
are the arbiters of
legality.’
[47]
In endorsing
Kirland
and
Oudekraal Estates (Pty) Ltd v City
of Cape Town & others
2004 (6) SA 222
(SCA), the court in
Merafong City v AngloGold Ashanti Ltd
2017 (2) SA 211
(CC),
paras 41-42, emphasised that government officials cannot simply
ignore an invalid administrative decision. It stated the
following:
‘
[41]
The import of
Oudekraal
and
Kirland
was that government cannot
simply ignore an apparently binding ruling or decision on the basis
that it is invalid. The validity
of the decision has to be tested in
appropriate proceedings. And the sole power to pronounce that the
decision is defective, and
therefore invalid, lies with the courts.
Government itself has no authority to invalidate or ignore the
decision. It remains legally
effective until properly set aside.
[42] The underlying principles
are that the courts' role in determining legality is pre-eminent and
exclusive; government officials,
or anyone else for that matter, may
not usurp that role by themselves pronouncing on whether decisions
are unlawful, and then ignoring
them; and, unless set aside, a
decision erroneously taken may well continue to have lawful
consequences.’
[48]
In any event, although the municipality is cited as a respondent, it
is in fact, not. It has a direct and substantial
interest in
the outcome of the litigation. It cannot pass transfer of the
properties to the applicant because of the decision
taken by the
Ministers of Public Works and Defence. To the extent that it
presents argument in advancement of a decision
that is just and
proper, its position is similar to that of an amicus – not in
the usual sense of the word – but possibly
in the sense of what
the Constitutional Court had in mind in
AmaBhungane Centre for
Investigative
Journalism
NPC & another v Minister of Justice and Correctional Services &
others; Minister of Police v AmaBhungane Centre
for Investigative
Journalism NPC & others
(CCT 278/19)
[2021] ZACC 3
(4
February 2021), paras 111-112, where it said the following:
‘
[110]
Essentially, the third amicu
s
is lodging its own appeal.
Ordinarily (and I use this word guardedly), an amicus participates in
proceedings to raise “new
contentions which
may
be useful to the Court
”
.
This same idea was captured by this Court in
In
re Certain Amicus Curiae Applications
where
it held that “the special duty” of an amicus to the court
“
is
to provide cogent and helpful submissions that
assist
the court
”
. .
. A court’s task is to determine the dispute presented to
it by the parties. It stands to reason then that
assistance to
it must relate to the determination of that dispute. Adding a
different dispute
–
like an additional appeal –
not litigated by the parties is not assistance with the dispute
before the court. If anything,
that amounts to burdening the
Court with something else to determine. That is not what rule
10 and the
In re
Certain Amicus Curiae Applications
statement
of law envisage.
[111]
Therefore, it seems to me that it is not in the interests of justice
to entertain the issue raised by the third amicus.
That said, I
will not categorically decide the question whether an amicu
s
may lodge an appeal outside of the application or appeal being
litigated by the parties. That is not necessary here.
I
limit what I say to a conclusion that is based on the interests of
justice in the circumstances of this case; interests of justice
do
not dictate that the additional appeal of the third amicus be
entertained. It is so that in our age of mass data
surveillance,
private actors arguably pose a comparable threat to
privacy as does the state. So, one cannot make light of the
issues raised
in the appeal by the third amicus. Although the
arguments of the third amicus on the issues are compelling, they were
not
adequately ventilated by the parties. That is
understandable because they do not relate to the issues in dispute
between
the parties.’
In
the result, I am satisfied that the criticism of the stance taken by
the municipality was unwarranted.
[49]
In their explanatory affidavit, the municipality explain that they
consider the development
of the property into a film studio as a
‘catalytic project’ in terms of the overall planning for
the city, one which
would generate a significant impact and
contribution to the overall vision for the city, and consistent with
its long-term development
plans as incorporated into its Integrated
Development Plan. The context of the sale between the applicant and
the municipality
should also not be overlooked. It was always
recognised that before the municipality could sell the property to
anyone, it
first had to take transfer. This is consistent with
the Deeds of Transfer. At the time when the sale agreement was
concluded between the municipality and the applicant, the Army had
already marched off the premises and it was left vacant.
[25]
On the basis of these uncontroverted facts, the Minister of Public
Works agreed to the transfer of the properties to the
municipality.
A careful perusal of the memorandum, and the basis of which the
Minister of Public Works granted his approval,
indicates the
following:
‘
3.17
DOD did not respond within the requested timeframe. An email
with attachments indicating a draft DOD submission to retain
the
property for their continued use was only received on 11 December
2015. Despite follow up, it is not known whether this
will
receive the support of the Executive Authority and the Accounting
officer of the DOD.
3.18
In the face of mounting pressure from the Local and Provincial
Authorities, and in light of the insufficient response
from DOD to
date, it is recommended that the Department hand the property back to
the eThekwini Municipality.’
[50]
The memorandum to the Minister of Public Works indicates that not
only were the views of
the Department of Defence solicited, but that
despite its views, the Minister decided to proceed with the transfer.
It bears noting
that a period of six years had elapsed between the
time when the Army vacated the property to the date when the Minister
of Public
Works granted approval for the transfer back to the
municipality. During all of that time, the Department of
Defence made
no mention of the property still being required ‘for
defence purposes moving forward’.
[51]
It was recommended to the Minister of Public Works that he grant
approval in terms of s
2 the
State Land Disposal Act, 48 of 1961
for
the transfer of the property subject to certain conditions, which are
not the subject of any debate in this application. The
approval for
the transfer was therefore made by a public official in terms of a
public law duty in accordance with a national statute.
On this
basis, it was submitted by Mr
du Plessis SC,
who appeared
together with Ms
Palmer
for the municipality, that the
decision of the Minister of Public Works constituted an
administrative act as clearly set out in
Grey’s Marine Hout
Bay (Pty) Ltd & others v Minister of Public Works & others
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) para 27, where the court said the following
with regard to disposal of property:
‘
In
Bullock
NO and Others v Provincial Government, North West Province and
Another
it
was held by this Court that the disposal of a right in State property
(the right in that case was a servitude) constituted administrative
action for purposes of s 33 of the Constitution (as it then read).
It was submitted on behalf of the Minister that
Bullock’s
case
is distinguishable because in that case the rights were alienated in
the belief that the provincial government was obliged
to do so,
whereas in the present case the impugned decision “amounts to a
policy decision” (the words are taken from
the heads of
argument). There will be few administrative acts that are devoid of
underlying policy – indeed, administrative
action is most often
the implementation of policy that has been given legal effect –
but the execution of policy is not equivalent
to its formulation. The
decision in the present case was not one of policy formulation but of
execution. No matter that the motivation
for making the decision
differed from that in
Bullock,
I
do not think that the decisions in each case are materially
distinguishable.’ (footnotes omitted)
[52]
The contention of the municipality is that the decision to transfer
the property, as evinced
by the 2015 ministerial authorisation, has
the effect of the transfer being a
fait accompli
. What remains
is the implementation of that decision by other departments of the
state. The subsequent change of attitude
by the Department of
Defence, it was submitted, cannot automatically result in the
decision of the Minister of Public Works being
expunged, and
particularly where the decision has not been revoked or set aside in
court.
[26]
This principle was first enunciated in
Oudekraal Estates (Pty) Ltd
v City of Cape Town & others
2004 (6) SA 222
(SCA), para 26
where the court stated:
‘
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. The
proper functioning of
a modern State would be considerably
compromised if all administrative acts could be given effect to or
ignored depending upon
the view the subject takes of the validity of
the act in question.’
It is an additional
hurdle for the Minister of Defence that, even if an application were
now made to review and set
aside the 2015 ministerial authorisation,
the failure to do so timeously may well be an absolute bar to the
successful granting
of that relief.
[27]
[53] Only as a consequence of the
Department of Defence’s stance has the National Treasury
held
back its approval for the transfer. As the Department of
Public
Works recognised, it has been caught in an ‘awkward position’
of having authorized the transfer, and, not having
taken any steps to
have the decision reversed, is bound by it. By all accounts,
the undisputed obstructionist in the transfer
is the Department of
Defence.
[54] It is also necessary to have
regard to the consequences which the Minister of Public Works’
decision has had for other role players in the matter. As a
starting point, if one recognizes that the Minister’s decision
was lawful, and there is nothing to suggest otherwise, then rights
accrue as a result. In this regard, both the applicant and the
municipality, having relied in good faith on the Minister’s
decision that the transfer had been approved, entered into an
agreement of sale with the municipality believing that the sale would
be aligned to its strategic plans to develop the city in
accordance
with its Integrated Development Plan. It also believed that it
was entitled to rely on the decision of a government
department as
having been rationally made. On the contrary, the Department of
Defence has refused to recognize the decision
of another department
of state, which the municipality contends undermines the rule of
law.
[55] It was only on 5 April 2017,
when the Director-General of the Department of
Public
Works wrote to the municipality advising that the Department of
Defence had ‘reaffirmed its need to retain the use
of . . .
[the property] for Defence purposes moving forwards’ that the
ground of opposition by the Department of Defence
become known.
In an email from Ms. Pooe of the Department of Public Works to Mr
Angelos of the municipality dated 28 June
2018, the Department of
Public Works appears to backtrack from the 2015 ministerial
authorisation granted almost two and half years
earlier. The
email reads, in part:
‘
.
. . [t]he Department was informed this morning by DOD that [there]
are planned engagements with their Minister regarding the disposal
of
the subject property.
The
Municipality is requested to note that, the Government Immovable
Asset Management Act compels custodians to engage user department
on
disposal of properties, and in fact, it is the user that is supposed
to render the property superfluous to its use prior to
any disposal
being undertaken by the custodian, hence we need to engage our DOD.
To
address the issue of the handing back [of] the property by Defence
and DPW in 2009, the Municipality should further note that,
both
officials of the Departments did not have authority or delegations to
take such decisions. The handing back of a property
is governed by
the
State Land Disposal Act, and
in line with this Act, only the
Minister of Public Works has the authority to approve such decisions.
And from the DOD side, the
power to approve that [the] properties be
handed back to DPW for disposal sits with the Minister and the
Secretary of Defence.
It
is however regrettable that these errors happened, and that they have
created a challenge for the Municipality, but the Department
cannot
contravene the law (GIAMA and PFMA) by processing this transfer
without righting the wrongs that were done in 2009. . .’.
[56]
Mr
du Plessis
correctly submitted that the correspondence from
the Department of Public Works above overlooks and ignores the
fundamental issue
of the Minister of Public Works having issued a
written authorisation for the transfer of the property on 22 December
2015. If
in hindsight the Minister of Public Works was of the view
that 2015 ministerial authorisation granting approval for the
transfer,
was wrong in law, the Minister should have approached a
court to have that decision reviewed and set aside. This has not
happened
to date. That authorisation, as stated earlier, was granted
while the Minister was cognisant of the provisions of the
State Land
Disposal Act 48 of 1961
, as well as the provisions of Government
Immovable Asset Management Act, 19 of 2007 (‘GIAMA’). In
addition, the memorandum,
which formed the basis for the Minister’s
decision, clearly indicates that no response had been forthcoming
from the Department
of Defence to the correspondence which had been
sent to it. In resisting the transfer, much has been made of the
Minister of Defence
and the Secretary of Defence not having
sanctioned the transfer of the property. Following on that course of
resistance, National
Treasury also withholds its consent.
However, if one has careful regard to the provisions of GIAMA it will
be noted that
in s 1, the term ‘
custodian
’ is
defined as a national or provincial department as referred to in s
4. The term ‘
Minister
’ means the Minister
responsible for Public Works. Section 4(2) of GIAMA reads as
follows :
‘
(2) A custodian—
(a)
acts
as the caretaker in relation to an immovable asset of which it is the
custodian;
(b)
may—
(i)
in the case of a national department, acquire and manage an immovable
asset as contemplated in section 13 and, subject to the
State Land
Disposal Act, 1961 (Act No. 48 of 1961), or any other Act regulating
the disposal of state land, dispose of that immovable
asset.’
[57]
Section 4 of GIAMA does not permit of any interpretation that before
an immovable asset,
like the Natal Command property, could be
transferred back to the municipality, the Minister of Public Works
has to obtain the
consent of the user, being the Department of
Defence. As pointed out earlier, the Minister of Public Works
was presented
with the memorandum setting out in great detail the
basis on which it was recommended that transfer of the property be
authorised.
The memorandum also noted the objection raised by the
Department of Defence. Having considered the contents of the
memorandum,
the Minister of Public Works granted the 2015 ministerial
authorisation. That decision remains extant.
[58]
In light of the approach taken by the Department of Defence, and the
reneging of reliance
on the 2015 ministerial authorisation, counsel
for the municipality described the Department of Defence’s
conduct as being
‘the opposite of good constitutional
citizenship’, borrowing from
Merafong City v AngloGold
Ashanti Ltd
2017 (2) SA 211
(CC), paras 59-60, where Cameron J
pointed out:
‘
.
. .
First,
as a matter of practice, and good constitutional citizenship, it is
undoubtedly so that Merafong should have gone to court
to set aside
the Minister’s ruling. As a state organ, Merafong had the
resources, and the responsibility, to obtain
judicial clarity in its
dispute with AngloGold about the ruling. Instead of doing so,
it threatened to cut off AngloGold’s
water. That was not
nice. Worse, it was not good constitutional citizenship. . .
As
a good constitutional citizen, Merafong should either have accepted
the Minister’s ruling as valid, or gone to court to
challenge
it head-on. . .’
[59]
Even assuming that the Department of Defence wished to challenge the
basis on which the
2015 ministerial authorisation was taken, it had a
remedy provided for in s 4(4) of GIAMA which provides that ‘[a]
custodian
and user must settle any dispute between them in the manner
contemplated in the
Intergovernmental
Relations Framework Act, 2005 (Act No. 13 of 2005).’
[60]
There is no evidence of the Minister of Defence having resorted to a
remedy easily available
to her in GIAMA, let alone a judicial review.
Accordingly, the Department of Defence is bound by the decision of
the Minister of
Public Works.
This much has been authoritatively stated by the Constitutional Court
in
MEC for
Health,
Eastern Cape & another v Kirland Investments (Pty) Limited t/a
Eye and Lazer Institute
2014 (3) SA 481
(CC), paras 102-103,
where the court held:
‘
[102]
. . . In doing so, the court acted in accordance with the stature
Oudekraal
has
acquired over the last decade. It has been consistently applied by
the Supreme Court of Appeal, as well as by this court. The
underlying
principle, that public officials may not take the law into their own
hands when seeking to override conduct with which
they disagree, has
also been given effect in three cases involving schools’
policies on admission of learners.
[103]
The fundamental notion – that official conduct that is
vulnerable to challenge may have legal consequences and may not
be
ignored until properly set aside – springs deeply from the rule
of law. The courts alone, and not public officials, are
the arbiters
of legality. As Khampepe J stated in
Welkom
– “(t)he
rule of law does not permit an organ of state to reach what may turn
out to be a correct outcome by any means.
On the contrary, the rule
of law obliges an organ of state to use the correct legal process.”
For a public official to ignore
irregular administrative action on
the basis that it is a nullity amounts to self-help. And it invites a
vortex of uncertainty,
unpredictability and irrationality. The
clarity and certainty of governmental conduct, on which we all rely
in organising our lives,
would be imperilled if irregular or invalid
administrative acts could be ignored because officials consider them
invalid.’
(footnotes omitted)
[61]
The principles discussed in
Kirland
and
Oudekraal Estates
(Pty) Ltd v City of Cape Town & others
2004 (6) SA 222
(SCA)
have been restated by the Constitutional Court in subsequent
decisions including
Cape Town City v Aurecon SA (Pty) Ltd
2017
(4) SA 223
(CC),
State Information Technology Agency SOC Ltd v
Gijima Holdings (Pty) Ltd
2018 (2) SA 23
(CC) and
Buffalo City
Metropolitan Municipality v Asla Construction (Pty) Ltd
2019 (4)
SA 331
(CC).
[62]
I turn now to analyse the position of the Department of Defence,
based on its submission
that it needs the property at some time in
the future, and that the Minister of Public Works could not have
unilaterally taken
a decision to transfer the property back to the
municipality. The Department of Defence’s position is captured
in the following
extract from its answering affidavit:
‘
The
SANDF intends to utilize the property in question for defence
purposes. This has always been the intention even though the SA
Army
vacated the premises in question and they have been so vacant.
The
special conditions registered in the Deeds Office, and which
constitutes the contract of donation
do not specify
that the
SANDF
must have an ongoing military presence
at the facility.
The special conditions also
do not impose a time
for the
recommencement of the defensive use of the property in question.’
(emphasis in original).
It
contends that the Minister of Public Works was bound in terms of s
4(2) of GIAMA to have consulted first with the Department
of Defence
and the Secretary of Defence. Section 14(2) of GIAMA provides that
‘[t]he accounting officer of a user must surrender
a surplus
immovable asset under its control to the relevant custodian.’
It is common cause that the Department of Defence
was the ‘user’
of the property and the ‘custodian’ was the Department of
Public Works. According
to Lt.
General
Mbuli he conducted a thorough search of the department’s files
and was unable to find a decision by either the Minister
of Defence,
or the Secretary of Defence, agreeing to the transfer.
[63]
The Minister of Defence contends, correctly so, that there is no time
period stipulated
within which to use the property for a defensive
purpose. On that ground, the Minister of Defence submits that
it is illogical
to suggest that the time period the applicant selects
has triggered the special conditions. In other words, it cannot be
interpreted
to mean that because the property has not been
used
for a defence purpose, no regard must be had to whether the property
is
required
for a defensive purpose. As I understand the
position of the Department of Defence, even though the property is
vacant, with all
buildings having disappeared from the property, save
for two heritage structures, it still intends to use the land at some
time
in the future. The argument advanced is that it is
sufficient that the property is
required
for defence purposes
- it is not a condition that it must be
continuously used
for
such a purpose.
[64]
Mr
Nxusani
submitted in his heads of argument that if the
probable explanation for the Corporation donating the property was to
bolster the
union government between the period of the First and the
Second World War, it must perforce have been within the contemplation
of the parties that the property may not be actually used for a long
period during times of peace or when there is no money to carry
out
the defence activity. If one accepts that to be a correct
interpretation it would mean that for so long as there remains a
prospect of the world breaking out into a war, the property (even if
it is derelict and abandoned for decades) could not revert
to the
municipality despite it no longer being in use. I am not
persuaded by this argument and the Minister of Defence’s
reliance on
Benoni Town Council v Minister of Agricultural Credit
and Land Tenure
1978 (1) AD 978
[28]
does not assist as it is not, in my view, authority for the
submission that the words ‘
so required’
in the
special conditions mean that it is sufficient for the Minister of
Defence to merely allege that it still requires the property
for use
some time in the unspecified future.
[65] It is undisputed that the
Department of Defence marched off the property in October 2009.
The rationale for that decision is stated in Lt General Mbuli’s
‘founding’ affidavit to be:
‘
.
. . because of the transformation within the SANDF and the downsizing
of the naval facility at Salisbury Island. This meant that
it did not
make economic sense to maintain military personnel at the facility
but it is not the same as a conclusion that the SANDF
no longer
requires the property in question for a defence purpose...
. . .
The
SANDF intends to utilize the property in question for defence
purposes. This has always been the intention even though
the SA
Army vacated the premises in question and they have been so vacant.’
[66]
The current position of the Department of Defence flies in the face
of the stated reason
why the Department of Defence vacated the
property the first place; it offends against a common sense
interpretation as to why
an entity would march off an Army base in
March 2007, hand over the ownership, risk and control thereof in
October 2009, not use
it for over a decade, but yet contend that it
hopes to do so at some time in the future. On that basis, and
for no matter
how long the Army ponders on what to do with the site,
or if ever to use it at some distant point in the future, it should
lay
vacant until the Minister of Defence and the Secretary of Defence
decide otherwise. Taken to the extreme, it would be the equivalent
of
someone not standing trial but, when apprehended, contending that
they always had the intention to stand trial, whenever that
may be in
the future.
[67]
The contention advanced by Lt. General Mbuli is also inconsistent
with the reply proffered
by the Minister of Defence in Parliament
where she reported that the property had become superfluous to the
use of the Army and
that it would be handed back to the municipality.
The averments by Lt. General Mbuli are also inconsistent with the
position of
the Minister of Public Works as well as the Officer
Commanding at the property at the time when the property was
vacated.
All of those persons are consistent in their view that
it was the intention of the Army to transfer the property to the
municipality.
The only contrary interpretation is the
ex
post facto
assertion by Lt. General Mbuli based on the Army
wishing to use the property at some time in the future.
[68]
The view expressed by Lt. General Mbuli of wanting to hold onto the
property for some uncertain
event that would enable the SANDF to use
the site again operates on a false premise as GIAMA regulates the
basis on which immovable
property registered in the name of the State
should be disposed. It is not disputed that the site no longer
has any of its
former structures which housed the headquarters of the
Army. Section 5 of GIAMA, dealing with the principles of
immovable
asset management provides:
‘
(1)
The following are principles of
immovable asset management:
(a) An immovable asset
must be used efficiently and becomes surplus to a user if it does
not support its service delivery objectives at an efficient
level
and if it cannot be upgraded to that level.
………
.
(d)
immovable assets that are currently used must be
kept operational
to function
in a manner that supports efficient service
delivery;. . .’ (my emphasis).
GIAMA
contemplates that an asset becomes ‘surplus’ if it does
not support its service delivery objectives. The
Minister of
Defence is yet to demonstrate how holding on to a barren piece of
land, which the Army vacated over a decade ago, enhances
the
efficiency of the SANDF or advances its objectives.
[69]
The next issue is the rationality of the proposition advanced by the
Department of Defence
that it may require the property going
forward. The starting point must be the wording of the
contract. In this case
both Deeds of Transfer provide that
‘[t]he land shall be
used
for defence purposes
only
,
and in the event of its not being
so
required or used,
it shall revert’.
Ms
Gabriel
SC
,
who appeared with Ms
Olsen
for the applicant, submitted that a proper interpretation of this
crucial aspect of the contract must mean that the pro
perty
must not only be ‘
required
’ for defence purposes,
but also that it must be so ‘
used
’ for such
purposes. For example, if the SANDF applied to use the property as a
convention centre, this would be a use contrary
to that contemplated
by the Deeds of Transfer. When
either
of these
conditions of it not being used or required exists, the property must
be transferred back to the Municipality. Mr
Nxusani
made the
following submission in his heads of argument, citing
Natal Joint
Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) (‘
Endumeni
’) as authority for his view:
‘
The
word “and” separated by the comma after the word “only”
is used conjunctively. It places a restriction
on the usage of the
property and is not used disjunctively to create two separate
conditions. Interpreted in this way the clause
gives the language
their ordinary grammatical meaning and in their proper syntax. In
this way, a well-formed sentence is derived
and it gives rise to a
sensible meaning as opposed to an insensible or unbusinesslike result
or one that undermines the apparent
purpose of the document.’
[70]
The conditions and wording contained in the Deeds of Transfer are
unambiguous. The
special conditions are structured in such a
way that they stipulate first that the ‘land shall be used for
defence purposes
only’. Thereafter, it is stated that, if the
land it is not ‘so required or used’ then it shall
‘revert’.
Thus, what is triggered is a negative state of
affairs of the land ‘
not
being so required or used’.
The phrase ‘
so required or used’
requires closer
consideration and must be read in the context of the special
conditions as a whole. In my view, the first part
of the special
conditions function to specify what
purposes
the property may
be used for (defence purposes only) and the second part functions to
specify in what
event
the property will revert (not being
used, or not required).
[71]
As stated above, the applicant’s interpretation requires the
word ‘or’
to be interpreted disjunctively, in accordance
with its ordinary meaning. As stated in
Preddy & another v
Health Professions Council of South Africa
2008 (4) SA 434
(SCA),
paras 10-11:
‘
[10]
There is no doubt that there are cases where the word “or”
has been read as “and”, but this occurs
in cases where to
give the word “or” its natural meaning would give rise to
an interpretation that is unreasonable,
inconsistent or unjust. (See
Gorman v Knight
Central GM Co Ltd
.)
. . . .
[11]
Reading “or” as “and” has been described as a
violent expedient which ought not to be adopted, except
in the last
resort, for the simple reason that “or” does not mean
“and”, and when the legislature uses
“or” it
must prima facie at all events be taken to mean “or” and
not “and” (
Colonial Treasurer v Great Eastern
Collieries Ltd
1904 TS 716
at 719).’
[72]
The words, in my view, and having regard to the dictum in
Endumeni
,
do not permit an interpretation that only if the property is not used
and
not required, does it revert to the Municipality. As
stated earlier, such an interpretation as suggested by Lt. General
Mbuli
would mean that the Army could vacate prime real estate on the
Durban beachfront, allow the property to become derelict and leave
it
unattended, only to contend that although it has no current use for
it, this may change sometime in the future. It is
doubtful that
that was the intention of the drafters of the special conditions in
the Deeds of Transfer at the time when the municipality
entrusted a
strategic site on the coastline to the Army. I am not persuaded
by the argument that it is sufficient for the
Department of Defence
to say that it needs the property for defence purposes, without
continuously putting it to use for such purpose.
A sensible
interpretation of the special conditions must mean that when the
property, being a strategic site on the coastline,
is no longer being
used for its intended purpose, it should revert to the
municipality.
[73]
I accordingly am not persuaded by the Department of Defence’s
submission that the
interpretation relied on by the applicant pays
lip service to the dictum in
Endumeni
. Contrary to the
contention of the Department of Defence, I am of the view that the
interpretation relied on by the applicant and
the municipality is
more consistent with the context of the document, read as a whole.
The drafters of the document used the words
‘
required or
used
’. A court interpreting the words must do so
objectively.
Endumeni
, para 18, stated:
‘
Whatever
the nature of the document, consideration must be given to the
language used in the light of the ordinary rules of grammar
and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material known to
those
responsible for its production. . . The process is objective, not
subjective.’
[74]
During the course of the hearing I informed counsel that I had come
across the decision
of the Supreme Court of Appeal in
Municipality
of Mossel Bay v Evangelical Lutheran Church
2013 JDR 1053 (SCA)
which none of the counsel had referred to in their heads. I
granted all parties an opportunity to make
written submissions to me,
post the hearing, on the dictum. In
Mossel Bay
the court
was asked to interpret certain ‘restrictive conditions’
in title deeds that are remarkably similar to the
conditions in the
present matter. The facts in that matter were that a church was
the registered owner of certain property
in Mossel Bay however the
title deeds in respect of the property had certain restrictive
conditions in favour of the municipality.
The conditions provided
that the land had to be used ‘
solely for church or
educational purposes
’ and that if ‘
at any time it
ceases to be used for such purpose, or is no longer required for such
purpose’
it would ‘
revert to the Council’
.
[29]
It was common cause that the property had not been used as a school
since 2006 and the buildings were vacant, and derelict. The
municipality sought an order retransferring the properties on the
basis of non-compliance by the church of the restrictive conditions.
The church’s defence was set out to be the following:
‘.
. .
it has always used and
intends to continue using the properties for church or educational
purposes and its temporary cessation of
schooling activities there is
purely as a consequence of its temporary impecuniosity. It expressed
a firm belief that it would,
with time, succeed in obtaining adequate
financial assistance to overcome its difficulties and to recommence
schooling on the properties
.’
[30]
[75] In interpreting the
restrictive condition, the Supreme Court of Appeal criticised the
court a quo’s interpretation of the restrictive condition as
follows:
‘
[11]
The court below misconstrued the restrictive conditions, in
particular the words “. . . or is no longer required for
such
purpose”. It is not proper for a court to excise from a clause
containing restrictive conditions one part thereof and
to use the
excised portion to interpret the entire clause. The conditions had to
be viewed holistically by the court a quo in determining
their
meaning. The words in the relevant restrictive conditions are clear
and unambiguous. It is by now well-established that,
in interpreting
these conditions, the words must be given their ordinary grammatical
meaning unless this would lead to absurdity,
repugnancy or
inconsistency with the rest of the title deeds' conditions. . .
[12] The court below completely
ignored the first part of the condition . . . namely “(i)f at
any time it [the land] ceases
to be used for such purpose [i.e.
church or educational purposes] . . .” and chose to restrict
its enquiry to the latter
part of the condition, namely “. . .
or is no longer required for such purpose”. As stated, the
court below held that
the church's stated intent (which the court
accepted) was that it planned to recommence schooling once its
finances permitted it
to do so and the church consequently still
required the land for such (educational) purpose. Apart from the
problem with the impermissible
excision, pointed out above, the court
below also misconstrued the use of the word “or” in the
condition. That word
is plainly used as a disjunctive, ie signifying
a substitution or an alternative. It is trite that “or”
is to be construed
as a conjunctive, ie reading it as “and”,
in only the most exceptional of cases where the context demands
it.’
[31]
[76] The Supreme Court of Appeal concluded as
follows:
‘
When
the restrictive conditions are holistically interpreted by giving the
words therein their ordinary grammatical meaning, in
their contextual
setting, the church is plainly in contravention of the restrictions,
it being common cause (for the reasons expounded
above) that the
properties
are no
longer used
for
educational or church purposes.
Whatever
the stated intent of the church as to its future usage may be, this
cannot and does not salvage its breach.
The
court below erred in finding to the contrary and the appeal ought
therefore to succeed.’ (my emphasis).
[32]
[77]
Thus, in
Mossel Bay
, the court interpreted the word ‘or’
in the restrictive condition disjunctively, with the result that it
was irrelevant
what the church intended to do on the property in the
future. Notably, the church in that matter gave a similar reason to
the Department
of Defence in the present matter, as to why it was not
using the property, which was its lack of funds. In this regard, it
is contended
by Lt. General Mbuli in the opposing affidavit that
while ‘it did not make
economic
sense
to maintain
military personnel at the facility. . . this is not the same as a
conclusion that the SANDF no longer requires the
property in question
for a defence purpose.’ (my emphasis).
[78]
There is no reason why this court should not follow the same approach
of the Supreme Court
of Appeal in
Mossel Bay
when interpreting
the special conditions in the Deeds of Transfer. The factual scenario
in
Mossel Bay
mirrors that in the present matter. Applying the
ratio of
Mossel Bay
, if the property is not being
used
for the designated purpose, it is irrelevant if the beneficiary
intends to use the property at some time in the future. On
that
basis, the condition for the return of the property has been
fulfilled. On this interpretative analysis alone, the applicant
must
succeed.
[79]
For the sake of completeness and as this was an important component
of the submissions
at the hearing, it is necessary that I consider
the reliance by the
Minister
of Defence on the Defence Force’s User Immovable Asset
Management Plans (‘UAMPs’). The reliance
on the
UAMPs is rooted in s 14(2) of GIAMA to which I have already referred,
but in the context of consultation prior to the disposal
of immovable
property. Apart from the issue of consultation, the Minister of
Defence contends that s 14(2) provides that
only
the
accounting officer of the South
African
Defence Force, which is the Secretary of Defence, has the authority
to ‘
surrender a surplus immovable asset under its control
’
to the relevant custodian being the Minister of Public Works.
[80]
Following upon the Minister of Defence’s answering affidavit,
the applicant proceeded
with an application in terms of Uniform rule
30A to compel the Minister of Defence to disclose various documents
referred to in
its answering affidavit. Among these documents
were the UAMPs as contemplated by GIAMA. One of the defences
raised
by the Minister of Defence is that the applicant cannot be
entitled to an order permitting the transfer of the property on the
basis that it still remains on the Department of Defence’s
asset register, and has never been removed therefrom. In
addition, it is contended that the Minister of Defence has never made
any statement to the effect that the property was not intended
to be
used at any time in the future for defence purposes.
[81]
In brief, GIAMA regulates the relationship between the Minister of
Public Works as the
custodian of state assets and the users, being
the various state departments. Section 5 of GIAMA requires that
immovable
property belonging to the State must be used efficiently
and it ‘becomes surplus to a user if it does not support its
service
delivery objectives. . .’. Importantly for analysing
one of the defences raised by the Minister of Defence is the
existence
of a UAMP referred to in s 6 of GIAMA, which the Minister
of Defence, as a user, was obliged to prepare on a yearly basis. The
UAMP must contain the details of all the immovable property used by
the respective state department. The UAMPs must also include
the
details of any assets the department intends to surrender. The
UAMPs, which are considered a strategic planning instrument,
in terms
of s 10 of GIAMA, inform all decisions taken by the user, and chart a
course that the relevant department is obliged to
follow.
[82]
In seeking to disprove the contention of the Department of Defence
that no indication had
been given by it to the Department of Public
Works referencing an intention to surrender the property (also
referred to interchangeably
in the UAMPs as the ‘Battery Beach’
or ‘Snell Parade’ property) the applicant went through a
vigorous exercise
of analysing all of the UAMPs dating back to the
date on which it alleges the Department of Defence and the SANDF
first gave notice
of their intention to vacate the property. In doing
so, the applicant sought to prove that the vacation of the property
was properly
authorised; that the property was properly surrendered
in the 2015 UAMPs, and despite a belated suggestion that the Army
intends
to use the property at some time in the future for a hotel,
there are no plans nor budget allocated for these aspirations.
[83]
I do not intend to recite all of the relevant entries, save for two
that illustrate the
point. The 2008/2009 UAMP, filed during
March 2009 (which date is significant bearing in mind that the
property was formally
handed over by the Army at the parade on 16
October 2009) contains a consolidated listing of all immovable
property under the control
and use of the Department of Defence.
The list contains a description of the strategic status of property
ranked according
to colour with red denoting a site that cannot be
alienated or moved; yellow reflecting a strategic site whose
relocation could
be negotiated depending on the availability of land
and building; and black which is designated as a non-strategic site
being in
the process of closure or relocation. The document
lists the Battery Beach Military Base on Snell Parade, Durban (ie the
property) as being coded in ‘black’ with the word
‘
agreement
’ in the column alongside. The
entry also makes reference to ‘RFMI’ which I was informed
by counsel for
the applicant to refer to ‘Regional Facilities
Integration Manager’. There is the further notation of
‘
closing down unit
’.
[84]
It is significant that the Department of Defence’s own UAMP,
which is binding as
a legislative instrument in terms of GIAMA,
indicates that the property is
not
a strategically important
site and furthermore that the site is closing down. These
entries, it was submitted, are relevant
in disproving the contentions
relied on by the Department of Defence, because they show that the
property was in fact surrendered
in terms of s 14(2) of GIAMA,
because it was surplus. The significance of an asset becoming surplus
in terms of GIAMA is explained
by the court in
Adonisi &
others v Minister for Transport and Public Works Western Cape &
others; Minister of Human Settlements and Others
v Premier of the
Western Cape Province & Others
(7908/2017; 12327/2017)
[2020]
ZAWCHC 87
(31 August 2020), para 125-127:
‘
[125] . . . once an
immovable asset becomes ‘surplus’ it should be
surrendered to the custodian, which becomes its caretaker,
and is
required to manage it in accordance with its C-AMP [custodian asset
management plans]. A custodian may dispose of
a surplus
immovable asset, either to another user or, alternatively, to a
private entity, but before a disposal to a private entity
can take
place, a two-stage decision-making process is involved.
[126]
Firstly, the user of the asset
must decide whether the asset is ‘surplus’, i.e. that it
does not support its service
delivery objectives at an efficient
level and cannot be upgraded to that level. This decision must be
made in terms of the U-AMP,
which is the principal immovable asset
strategic planning instrument and is binding on the user. GIAMA
states explicitly
that users must conduct immovable asset management
in a manner consistent with the Act and their U-AMPs.
[127]
Thereafter, the custodian must
decide, in terms of its C-AMP, whether the surplus asset can be
allocated to another user or jointly
to different users, having
regard to government’s social development initiatives and
socio-economic objectives, including
land reform.’
[85]
To the extent that the regional office of the Minister of Defence,
through officers like
Mr Hornby and others, had no authority to make
statements that bound the Department of Defence, it is clear that the
regional office
was delegated to deal with the closure or surrender
of the property. From the UAMPs discovered in terms of Uniform rule
30, I have
been unable to find any reference to the Minister of
Defence or the Secretary of Defence indicating an intention to hold
onto the
property on the basis of any plans for the future or any
budget allocations, save for reference in the UAMP for 2013 to the
Natal
Command site (the property) being listed on Template 10 of the
Surrender Plan 2014. The explanation for items on this Template is
stated in the Narrative to the UAMP to be the following:
‘
Template
10 lists immovable assets identified by the DOD, that no longer
support the service delivery of the DOD and that should
be
surrendered for re-allocation or disposal, including possible
demolition, as approved by the custodian with an estimated value
of
R1 421 220.00 of buildings and several leases that should be
terminated. . . ’.
The
Department of Defence has not reflected the property in the UAMPs
since 2015.
[86]
The Department of Defence avers in its answering affidavit that it
intends to establish
accommodation and hotel facilities for the
Department of Defence on the property in light of piracy and other
criminal conduct
taking place in the Mozambican channel. This
statement is vague and unsubstantiated by any evidence of the need or
budget
for such a project. As if to justify the vague
assertion, the Minister of Defence’s affidavit contends that it
is not
necessary to explain in any detail what its plans for the
property are and further that there is no time bar contained in the
special
conditions and therefor it is sufficient for it to state that
it simply has the intention to use the property for defence purposes,
sometime in the future.
[87]
To the extent that the Department of Defence maintained that there
existed no ministerial
approval for the transfer of the property to
the municipality, it was submitted by counsel for the applicant that
a letter from
the Chief of the SA Army, signed by Brigadier General
Fredericks and dated 25 February 2008, supports the contention of the
applicant
that the closure of the site was done with ministerial
approval. The letter reads as follows:
‘
Closure of ASB Durban:
Migration of offices
1.
DOD Administrative Instruction
04/06 dated 03 October 2006 and Ministerial Authority for closure of
ASB [army support base] Durban
dated 28 August 2006 refers.
2.
The facilities at Battery Beach
ASB Durban had to be vacated by 1 April 2007 according to the closing
plan as accepted by all relevant
role players as approved by the Army
Council.
3.
Unfortunately the premises have
not yet been vacated and has a negative impact on the security and
maintenance of personnel and
equipment.
4.
A visit by the SA Army, D M&RS
[maintenance and repair services] will be undertaken on 12 March 2006
at Battery Beach OCs office
to move all members to other facilities
from Battery Beach facilities.
5.
GOC SA Army Sup. Fmm gave his
consent to intervene in this unsatisfactory situation 20 February
2006.
6.
OC Closure ASB Durban to forward
a plan to this Directorate for distribution and debate. Target
date for final vacation of
Battery Beach 16 March 2008.’
[88]
The response of Lt. General Mbuli on behalf of the Minister of
Defence is that he
has not seen the documents referred to in the
above letter, and if such documents were written, they would have
been destroyed
in a flooding of the archives of the Army headquarters
in Pretoria. Although the author of the letter is stated to be
retired,
there is no reason why he could not have filed an affidavit
clarifying his interpretation of the events at the time. The
authorisation given by the Minister of Defence to Lt. General Mbuli
allows him to enlist the assistance of any other member of the
Department of Defence. He fails to do so not only in regard to
Brigadier General Fredericks, but numerous others. As a consequence,
the applicant submitted that it is prejudiced, particularly where
documents discovered portray a different picture from that painted
by
the deponent with regard to the decision to hand back the property.
It cannot be in the interests of justice to condone such
an approach
by a litigant especially where no reasons are tendered for why no
confirmatory affidavits are produced. That apart,
I agree with the
submission by the applicant that even if the ministerial authority of
August 2006 was destroyed in a flooding,
this does not negate its
existence, which appears manifest from the letter on behalf of the
Chief of the SA Army, which explicitly
makes reference to ministerial
authority and approval for the closure of the Battery Beach site.
[89]
To the extent that both the applicant and the municipality contend
that the 2015 ministerial
authorisation remains extant, the Minister
of Defence argues that it does not need to review or set it aside
because it was made
subject
to
the terms and conditions
specified therein and subject to Regulation 21.3 of the Treasury
Regulations
[33]
which have not been complied with. The Minister of Defence
contends that no application has been made to compel the National
Treasury to revoke its decision. As National Treasury did not give
its approval for the gratis transfer of the property, the Minister
of
Defence submits that the 2015 ministerial authorisation has
accordingly ‘lapsed’.
[90]
The applicant argues that the contention that the 2015 ministerial
authorisation has lapsed,
is without foundation. It is clear
from the correspondence that the only apparent reason why National
Treasury did not give
its approval is because the Department of
Defence informed the Department of Public Works and the National
Treasury that it still
requires the property for defence purposes. If
the Department of Defence made an about-turn and announced that it no
longer required
the property for defence purposes, the way would be
clear for Treasury to grant its approval. In the event of this court
granting
the relief sought in the notice of motion, National Treasury
would be obliged to give effect to that order. The argument that such
an order would infringe the separation of powers is simply a
red-herring.
[91]
In conclusion, the interpretation argued for by the applicant and the
municipality is that
that the word ‘
or
’ in the
special conditions must be interpreted disjunctively, meaning if
either one of the events occur (either the land
is not ‘
used
’,
or not ‘
required
’), the reversionary special
conditions in the Deeds of Transfer are triggered. The Minister of
Defence’s interpretation
is that
both
events must occur
for the special conditions to be triggered. However, even on this
interpretation, it must still be shown that
the Department of Defence
does
in fact
require the property, and its unsubstantiated
claim that a hotel may be built, is not sufficient. The Department of
Defence has
been unable to mount a credible argument as to why the
interpretation by the Supreme Court of Appeal on a similar
reversionary
condition in
Mossel Bay
is not correct and should
not be followed. That decision is binding on this court. Over
and above the interpretative exercise
is the issue of accountability
and government departments being held to their word. The statement by
Cameron J, in
Kirland
, para 64, frames the issue eloquently,
as follows:
‘
Can
a decision by a state official, communicated to the subject, and in
reliance on which it acts, be set aside by a court even
when
government has not applied (or counter-applied) for the court to do
so? Differently put, can a court exempt government from
the burdens
and duties of a proper review application, and deprive the subject of
the protections these provide, when it seeks
to disregard one of its
own officials' decisions? That is the question the judgment of Jafta
J (main judgment) answers. The answer
it gives is Yes. I disagree.
Even where the decision is defective — as the evidence here
suggests — government should
generally not be exempt from the
forms and processes of review. It should be held to the pain and duty
of proper process. It must
apply formally for a court to set aside
the defective decision, so that the court can properly consider its
effects on those subject
to it.’
[92]
The applicant entered into a contract with the municipality in 2003
to develop the property
into a world-class film studio. The
applicant and the municipality have extoled the benefits of their
plans. If is not for
the Minister of Defence to question those
ambitions in these proceedings. The Department of Defence,
after a slumber of almost
decade after it publically announced its
intentions to walk away from the Natal Command site in October 2009,
changed its stance
and refused to allow the transfer of the property
to the municipality in order that the latter would in turn pass on
ownership
to the applicant. The Department of Defence has been
the proverbial fly in the ointment, to the prejudice of both the
municipality
and the applicant.
[93]
After considering all of the arguments raised, I am unable to sustain
a single one of those
contended for by the Minister of Defence.
Section 172(1)(
b
) of the Constitution empowers the court to
grant any relief which is just and equitable in order to do justice
between the parties.
Despite the contention of the second respondent
that the applicant has not advanced an argument based on an
infringement of its
constitutional rights, I am satisfied that the
relief sought is an appropriate remedy in the circumstances.
[34]
In the result, I see no reason why the applicant should not be
entitled to the relief it seeks in the notice of motion, and in
so
doing, bring this saga of almost two decades to finality and permit
all parties concerned the benefit of certainty as to their
respective
interests.
[94]
In so far as costs are concerned, I can find no reason to depart from
the usual order that
costs should follow the result. In this
case the applicant was left with little option, all attempts at a
negotiated settlement
failing, but to institute action to secure the
fruits of a long standing contract.
[35]
The Department of Defence could have resorted to the dispute
resolution mechanisms in GIAMA to the extent that it contested
the
2015 ministerial authorisation. It chose not to. Ms
Gabriel
submitted that in light of the Department of Defence’s
obstructionist conduct, its disregard for lawful decisions taken at
ministerial level, as well as its disregard for compliance with
orders of this court with regard to time frames, an adverse cost
order is warranted in respect of the main application and the
interlocutory applications which were warranted because of the
Minister
of Defence’s refusal to furnish the documents referred
to in its answering affidavit. In support of the award of an
adverse cost order, Ms
Gabriel
referred to
Kirland
,
para 82:
‘
[T]here
is a higher duty on the state to respect the law, to fulfil
procedural requirements and to tread respectfully when dealing
with
rights. Government is not an indigent or bewildered litigant, adrift
on a sea of litigious uncertainty, to whom the courts
must extend a
procedure-circumventing lifeline. It is the Constitution's primary
agent. It must do right, and it must do it properly.
’
[95]
Much has been said about whether the applicant came to court to
assert its right in terms
of a contractual entitlement or whether
there was a tinge of public law character and public importance to
the matter. I
am satisfied that this application has straddled
both legs. The applicant’s contractual interests cannot
be said to
be higher than that of the municipality, who has also been
prejudiced as a result of the stagnation of the development on the
property.
If one adopts a narrow perspective, then the dominant
victor is the applicant. However, it is not disputed with any
seriousness
on the papers that the people of eThekwini and the
province of KwaZulu-Natal will also benefit from the overall spin-off
that such
a development will entail – jobs, added tourism to
the city’s coffers and perhaps more importantly, added revenue
through
property rates. This litigation does have a wider
public importance as O’ Regan J noted in
Ferreira v Levin NO
& others; Vryenhoek & others v Powell NO &
others
1996 (1) SA 984
(CC), para 229, ‘no bright line can be
drawn between private litigation and litigation of a public or
constitutional nature.’
[96]
Mr
du Plessis
also contended that the Minister of Defence, as
the only of the respondents who opposed this application, which the
municipality
supported, should be obliged to pay not only the costs
of the applicant but also that of the municipality, whose litigation
costs
are ultimately borne by the residents of eThekwini. The
municipality, despite offering an ‘explanatory affidavit’,
actively participated in the litigation. As stated earlier, I find
nothing objectionable about the municipality’s participation.
If the Minister of Defence had succeeded, the municipality would have
been ordered to share with the applicant in the costs burden.
I
see no reason why the Minister of Defence should be exempted from
paying the costs of another sphere of government, more particularly
because those costs of the municipality are funded by its own revenue
base, not the national fiscus as in the case of a government
department.
[97]
The relief sought by the applicant is largely consistent with that
granted by the Supreme
Court of Appeal in
Mossel Bay
.
Despite the approach of the Minister of Defence in this litigation, I
am unable to conclude that she acted in bad faith
or for ulterior
purpose. The papers do not reveal a motive for its stance.
Government departments often act on poor advice.
This may be one such
case. I do not think that this is an instance where attorney
and client costs are warranted.
[98] In the result, I make the
following order:
1.
It is declared that the Special Conditions contained in the
Deed of
Transfer No. T565/1937, for the property described as Remainder of
Erf 11543 Durban and in Deed of Transfer No. T9182/1962
for the
property described as Erf 11545 Durban, and known as the Natal
Command Property, for the retransfer of those properties
to the
eThekwini Municipality, have been met.
2.
The Minister of Public Works, is ordered to take all steps necessary
to effect the transfer the Natal Command Property to the eThekwini
Municipality within 30 (thirty) days of this order.
3.
This order constitutes the necessary authorisation on behalf
of the
first, second and third respondents for the transfer of the property
from the Department of Public Works to the eThekwini
Municipality.
4.
The eThekwini Municipality be and is hereby directed, within
a period
of 10 (ten) days after service on it of this Order, to appoint a
conveyancer to attend to the preparation and registration
of the
transfer of the Natal Command Property into its name.
5.
The first respondent be and is hereby directed, within a period
of 14
(fourteen) days after receipt by him from the conveyancer of the
documentation necessary to give transfer of the Natal Command
Property to the eThekwini Municipality, to sign and return same to
the conveyancer.
6.
The costs relating to the transfer shall be paid by the first
respondent, who shall pay the conveyancer's
pro forma
account
on presentation.
7.
In the event of the first respondent failing to comply with
paragraphs (2), (4), (5) and (6) above, the Sheriff of this Court is
directed and authorised to sign all the necessary documents
on behalf
of the first respondent.
8.
That the eThekwini Municipality be and is hereby directed after
receiving transfer of the Natal Command Property from the Department
of Public Works, to transfer such property to the applicant,
in
accordance with the agreement of sale concluded between these parties
on 12 December 2003, and as amended thereafter on 6 May
2005.
9.
The second respondent is ordered to pay the costs of the applicant
and the fourth respondent on a party and party scale, including the
costs of two counsel where so employed, such costs to include
all
costs reserved and those attendant upon the interlocutory
applications.
M R CHETTY
APPEARANCES
:
For Appellant:
Adv AA Gabriel SC, with Adv LK Olsen
Instructed
by:
NSG Attorneys, Durban
Reference
david@nsg.co.za
For Second Respondent:
Adv J Nxusani SC with Adv T Kadungure
Instructed
by:
State Attorney, KwaZulu-Natal
Refence
PaMoodley@justice.co.za
For Fourth Respondent:
Adv M du Plessis SC, with Adv T Palmer
Instructed by:
Venns Attorneys, Westville
Reference
hiresen@venns.co.za
Date
of hearing
17 & 18 September 2020
Post
hearing submissions 2
October 2020
Date
of Judgment
9 March 2021
.
[1]
Giant Concerts CC v Minister of Local Government, Housing and
Traditional Affairs, KwaZulu-Natal & others
2011 (4) SA 164
(KZP).
[2]
Rinaldo Investments
(
Pty
)
Ltd v Giant Concerts CC &
others
[2012] 3 All SA 57 (SCA).
[3]
Giant Concerts CC v Rinaldo Investments (Pty) Ltd
&
others
2013 (3) BCLR 251
(CC), para 51.
[4]
Ibid, para 58.
[5]
Rinaldo Investments
(supra fn 2) paras 2-9.
[6]
Giant Concerts CC v Rinaldo Investments
(supra fn 3), paras
2-14.
[7]
Deed of Transfer No. T565/1937, p. 40 of the indexed papers.
[8]
Deed of Transfer T9182/1962, p. 52 of the indexed papers.
[9]
Giant Concerts CC
(supra fn 1).
[10]
The Minister of Defence signed a letter bearing the SANDF emblem in
which she indicated her awareness of the present litigation
and
authorised Lt. General Mbuli and ‘any other Department
official, as may be necessary’ to depose to court papers
as
may be required. The letter indicates that the designation of
Lt General Mbuli is that of Chief of Logistics.
[11]
The Natal Mercury was first issued in 1852.
[12]
Giant Concerts CC v Rinaldo Investments
(supra fn 3).
[13]
According to the applicant, the film studio would generate an
estimated R100 million per annum when completed.
[14]
The Minister of Defence contends that the applicant lacks locus
standi because (a) the applicant is not a party to the original
contract of donation in 1937, in respect of the property, (b) the
sale agreement the applicant concluded with the municipality
is
subject to a suspensive condition, requiring the municipality to
acquire the property, and thus it is the municipality, not
the
applicant, who ought to have brought this application, and that
applicant does not have a direct and substantial interest
as to
whether the conditions stipulated in the Deeds of Transfer have been
‘breached’, thus entitling the municipality
to transfer
of the property into its name.
[15]
Giant Concerts CC v Rinaldo Investments
(supra fn 3).
[16]
Ibid, para 51.
[17]
Ibid, para 41(
a
) and (
f
).
[18]
Ibid, para 51.
[19]
Ibid, para 53.
[20]
Kruger v President of Republic of South Africa & others
[2008] ZACC 17
;
2009
(1) SA 417)
(CC), para 23.
[21]
Ibid, para 24.
[22]
KwaZulu-Natal Joint Liaison Committee v MEC for Education,
Kwazulu-Natal & others
2013 (4) SA 262
(CC), para 8.
[23]
Ibid para 65.
[24]
Pretorius & another v Transport Pension Fund & others
2019 (2) SA 37
(CC), para 30.
[25]
The property was vacated formally on 16 October 2009 although the
applicant contends that this began in 2007.
[26]
Department of Transport & others v Tasima (Pty) Ltd
2017
(2) SA 622
(CC);
Economic Freedom Fighters v Speaker, National
Assembly & others
2016 (3) SA 580 (CC).
[27]
See
Associated Institutions Pension Fund & others v Van Zyl &
others
[2004] 4 All SA 133
(SCA), paras 49 to 51;
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Ltd
2018 (2) SA 23
(CC), para 44.
[28]
The issue in
Benoni Town Council v Minister of Agricultural
Credit and Land Tenure
1978 (1) AD 978
was prescription –
that is, whether the claim for reversion of certain land had
prescribed. The court found that, since
there was no time period
specified for the performance of the
modus
which was in the
form of a negative obligation (ie that certain land only be used for
educational purposes) that prescription
only began to run once the
debtor had been placed in
mora
.
[29]
Municipality of Mossel Bay v Evangelical Lutheran Church
2013
JDR 1053 (SCA) para 2.
[30]
Ibid, para 8
[31]
Ibid, paras 11-12.
[32]
Ibid, para 13.
[33]
Treasury Regulations, GN R225,
GG
27388, 15 March 2005.
[34]
In
Fose v Minister of Safety & Security
[1997] ZACC 6
;
1997 (3) SA 786
(CC), para 69 the court held:
‘
I
have no doubt that this Court has a particular duty to ensure that,
within the bounds of the Constitution, effective relief
be granted
for the infringement of any of the rights entrenched in it. In our
context an appropriate remedy must mean an effective
remedy, for
without effective remedies for breach, the values underlying and the
right entrenched in the Constitution cannot
properly be upheld or
enhanced. Particularly in a country where so few have the means to
enforce their rights through the courts,
it is essential that on
those occasions when the legal process does establish that an
infringement of an entrenched right has
occurred, it be effectively
vindicated. The courts have a particular responsibility in this
regard and are obliged to “forge
new tools” and shape
innovative remedies, if needs be, to achieve this goal.’
See
also
Head of Department, Mpumalanga Department of Education &
another v Hoërskool Ermelo & another
2010 (2) SA 415
(CC) para 97 where the court elaborated on the ambit of relief
granted in terms of s172(1)(b):
‘
It
is clear that s 172(1)
(b)
confers
wide remedial powers on a competent court adjudicating a
constitutional matter. The remedial power envisaged in s 172(1)
(b)
is not only available when a court makes an order of
constitutional invalidity of a law or conduct under s 172(1)
(a)
.
A just and equitable order may be made even in instances where the
outcome of a constitutional dispute does not hinge on constitutional
invalidity of legislation or conduct. This ample and flexible
remedial jurisdiction in constitutional disputes permits a court
to
forge an order that would place substance above mere form by
identifying the actual underlying dispute between the parties
and by
requiring the parties to take steps directed at resolving the
dispute in a manner consistent with constitutional requirements.
In
several cases this court has found it fair to fashion orders to
facilitate a substantive resolution of the underlying dispute
between the parties. Sometimes orders of this class have taken the
form of structural interdicts or supervisory orders. This
approach
is valuable and advances constitutional justice, particularly by
ensuring that the parties themselves become part of
the solution’.
[35]
It bears noting that in
Municipality
of Mossel Bay
(supra fn 29), para 9, Majiedt
JA said the following of the municipality, which launched the
application:
‘
When
all else failed, it launched its application in the court below
during February 2010, by which time the properties had been
in
disuse for over four years already. It was incumbent upon the
municipality to act in the interest of its residents, in order
to
fulfil its constitutional mandate towards them, as set out in s 152
of the Constitution. The municipality can certainly not
be faulted
for approaching the court as a last resort, when all its
compassionate efforts towards attaining an extracurial solution
came
to nought.’
That
predicament was similar to that faced by the applicant in the
present matter.