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[2012] ZASCA 96
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King Sabata Dalindyebo Municipality and Others v KwaLindile Community and Others (537/2011) [2012] ZASCA 96; [2012] 3 All SA 479 (SCA) (1 June 2012)
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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no
:537/2011
Reportable
In the
matter between:
KING SABATA DALINDYEBO MUNICIPALITY
….......................................
First
Appellant
CAPE GANNET PROPERTIES 118 (PTY) LTD
…..................................
Second
Appellant
WHIRLPROPS 46 (PTY) LTD
…..................................................................
Third
Appellant
and
KWALINDILE COMMUNITY
….................................................................
First
Respondent
ZIMBANE COMMUNITY
…..................................................................
Second
Respondent
BATHEMBU COMMUNITY
…..................................................................
Third
Respondent
MINISTER OF AGRICULTURE AND LAND AFFAIRS
…....................
Fourth Respondent
REGIONAL LAND CLAIMS COMMISSIONER:
EASTERN CAPE
…...................................................................................
Fifth
Respondent
LANDMARK MTHATHA (PTY) LTD
…....................................................
Sixth
Respondent
PROUD HERITAGE PROPERTIES 119 (PTY) LTD
…......................
Seventh
Respondent
UWP CONSULTING (PTY) LTD
…........................................................
Eighth
Respondent
Neutral citation:
King Sabata Dalindyebo Municipality v
KwaLindile Community
(537/2011)
[2012] ZASCA 96
(1 June 2012)
Coram:
Mpati P, Cloete, Van Heerden and Mhlantla JJA and Kroon AJA
Heard:
3 May 2012
Delivered:
1 June 2012
Summary:
Restitution of Land Rights Act 22 of 1994
–
order by Land Claims Court in terms of
s 34(5)
that certain land
within a municipality not be restored to any claimant or prospective
claimant – order qualified by further
directions –
revision of orders on appeal – review of publication in terms
of
s 11
by regional land claims commissioner of claim to municipal
land lodged in terms of the Act – costs on appeal.
________________________________________________________________________
ORDER
On appeal from: Land Claims Court (Bam JP, sitting as a court of
first instance):
The appeals are upheld with costs, including the costs of three
counsel, where applicable, the costs to be paid by the fifth
respondent.
Paragraphs (i) to (v) of the order of the court below are set aside
and for them are substituted the following:
‘
(i) In terms of
section 34(5)(
b
)
of the
Restitution of Land Rights Act 22 of 1994
it is ordered that
when claims in terms of the Act in respect of any land situate in the
town of Mthatha, including the Remainder
of Erf 912 Mthatha (the
land), are finally determined, the rights in the land or any portion
thereof shall not be restored to any
successful claimant.
(ii) No order is made in respect of the application for the review of
the publication by the fifth respondent of claims lodged
in terms of
the Act to land situate within the municipality of Mthatha.’
3. The cross-appeals are dismissed.
4. The costs of the respondents in the cross-appeal, including the
costs of three counsel, where applicable, will be paid by the
fifth
respondent.
_____________________________________________________________________
JUDGMENT
______________________________________________________________________
KROON AJA (MPATI P, CLOETE, VAN HEERDEN and MHLANTLA JJA concurring):
[1] This judgment concerns two appeals and three cross-appeals
against orders granted by Bam JP, sitting in the Land Claims Court
(the LCC), in terms of s 34(5) of the Restitution of Land Rights Act
22 of 1994 (the Act). The appeals and cross-appeals are with
the
leave of Bam JP.
The parties
[2] The first appellant is the King Sabata Dalindyebo Municipality
(the municipality), the legal successor to the former Mthatha
Municipality, previously Umtata Municipality. The municipal area of
the municipality includes the land situate in the town of Mthatha,
which in turn includes the land known as the Remainder of Erf 912
Mthatha, and the municipality owns land within the municipal
area.
The municipality is accordingly a local government body as envisaged
in s 34(1) of the Act.
1
It was the applicant in the proceedings before the LCC. Its appeal in
the present proceedings is the first appeal against part
of the order
issued by the LCC.
[3] The second appellant is Cape Gannet Properties 118 (Pty) Ltd
(Cape Gannet). It was the seventh respondent cited in the proceedings
before the LCC. The third appellant is Whirlprops 46 (Pty) Ltd
(Whirlprops). It was not cited as a respondent in the proceedings
before the LCC, but intervened in those proceedings as an interested
party and, as the tenth respondent, filed papers therein,
such
intervention being with the leave of the LCC. It is a joint appellant
with the second appellant in the second appeal in the
present
proceedings.
[4] The first respondent is the KwaLindile Community (KwaLindile) a
community as defined in the Act, of the KwaLindile Trust Farms,
an
area in the vicinity of the town of Mthatha. It was the first
respondent cited in the proceedings before the LCC. It is the
appellant in the first cross-appeal in the proceedings against part
of the order issued by the LCC.
[5] The second respondent is the Zimbane Community (Zimbane), a
community as defined in the Act, of the Zimbane Administrative
Area,
an area in the vicinity of the town of Mthatha. It was the second
respondent cited in the proceedings before the LCC. It
is the
appellant in the second cross-appeal in the present proceedings
against part of the order issued by the LCC.
[6] The third respondent is the Bathembu Community (Bathembu), a
community as defined in the Act, of an area in and around Mthatha.
It
was the third respondent cited in the proceedings before the LCC.
Bathembu did not however participate in those proceedings
or in the
present appeal proceedings.
[7] The fourth respondent is the Minister of Rural Development and
Land Reform (formerly the Minister of Agriculture and Land Affairs,
and cited as such in the proceedings in the LCC as the fourth
respondent) (the Minister). The Minister was joined in the
proceedings
as the Minister responsible in terms of the Act, as a
possible interested party. The fifth respondent is the Regional Land
Claims
Commissioner, Eastern Cape (the regional commissioner, the
fifth respondent in the LCC). The Minister and the regional
commissioner
are the joint appellants in the third cross-appeal
against part of the order issued by the LCC.
[8] The sixth and eighth respondents are Landmark Mthatha (Pty) Ltd
and UWP Consulting (Pty) Ltd (respectively, the sixth and ninth
respondents in the LCC). They filed papers in the proceedings in the
LCC in support of the municipality’s prayer for an order
in
terms of s 34 of the Act (as to which, see below), but in the result
abided the decision of the court. Neither participated
in the appeal
proceedings.
[9] The seventh respondent is Proud Heritage Properties 119 (Pty) Ltd
(eighth respondent in the LCC). It did not participate in
the
proceedings in the LCC or in the present appeal proceedings.
Legislative Framework
[10] The long heading to the Act records that its core purpose is ‘to
provide for the restitution of rights in land to persons
or
communities dispossessed of such rights after 19 June 1913 as a
result of past racially discriminatory laws or practices’
.
The Act has its genesis in s 25(7) of the Constitution (Act 108 of
1996) which provides that -
‘
A
person or community dispossessed of property after 19 June 1913 as a
result of past racially discriminatory laws or practices
is entitled,
to the extent provided by an Act of Parliament, either to restitution
of that property or to equitable redress.’
[11] Section 1 of the Act provides inter alia that:
‘ “
restitution
of a right in land”
means –
the restoration of a right in
land; or
equitable redress;
“
restoration
of a right in land
”
means the return of a right in land or a portion of land dispossessed
after 19 June 1913 as a result of past racially discriminatory
laws
or practices;
“
equitable
redress”
means any equitable redress, other than the restoration of a right in
land, arising from the dispossession of a right in land after
19 June
1913 as a result of past racially discriminatory laws or practices,
including –
the granting of an appropriate
right in alternative state-owned land;
the payment of compensation.’
[12] Section 4 of the Act established the Commission on Restitution
of Land Rights and provided inter alia for the appointment
of a Chief
Land Claims Commissioner and various regional land claims
commissioners. Section 22 established the LCC, referred to
in the Act
as ‘the Court’.
[13] Section 6(3) provides that where the relevant regional
commissioner (or an interested party) has reason to believe that
certain
dealings (eg the sale, development or rezoning) relating to
land which may be the subject of an order of the LCC or in respect of
which there is an entitlement to claim restitution of a right in
land, he or she may, after lodgement of a claim in respect of
such
land and on reasonable notice to interested parties, apply to the LCC
for an interdict against such dealings. The LCC may
grant such
interdict, subject to such terms and conditions and for such period
as it may determine, or make any other order it
deems fit.
[14] Section 11 prescribes the requirements for the acceptance by the
relevant regional commissioner of the lodgement of a land
claim, and
provides, in subsection (1), that on such acceptance the regional
commissioner shall cause notice of the claim to be
published in the
Gazette
and take steps to make it known in the district in
which the land in question is situated. Subsection (6) enjoins the
regional
commissioner, immediately after publishing the notice, to
give notice in writing advising the owner of the land and any other
party
who, in his or her opinion, might have an interest in the
claim, of the publication of the notice and of the provisions of
subsection
(7). The latter subsection provides that after publication
of a notice in respect of any land no dealings, as envisaged, in the
land may be undertaken by any person without his or her having given
the regional commissioner one month’s written notice
of his or
her intention to do so. Absent such written notice, and good faith,
the LCC may make a variety of orders relating to
the dealings
undertaken. Further, after publication of the notice in respect of
the land, qualified prohibitions will operate against
eviction of
certain occupiers of the land, certain dealings with improvements on
the land and entry upon or occupation of the land
without the
permission of the owner or lawful occupier of the land.
[15] Section 33 provides that in considering its decision in any
particular matter the court must have regard to a number of factors
listed in the section.
[16] Section 34 provides as follows:
‘
(1)
Any national, provincial or local government body may, in respect of
land which is owned by it or falls within its area of jurisdiction,
make application to the Court for an order that the land in question
or any rights in it shall not be restored to any claimant
or
prospective claimant.
. . .
(5) After hearing an application
contemplated in subsection (1), the Court may –
(
a
) dismiss the
application;
(
b
) order that when any
claim in respect of the land in question is finally determined, the
rights in the land in question, or in
part of the land, or certain
rights in the land, shall not be restored to any claimant;
(
c
) make any other order
it deems fit.
(6) The Court shall not make an
order in terms of subsection (5)(
b
) unless it is satisfied
that –
(
a
) it is in the public
interest that the rights in question should not be restored to any
claimant; and
(
b
) the public or any
substantial part thereof will suffer substantial prejudice unless an
order is made in terms of subsection (5)(
b
) before the final
determination of any claim.
. . .
(8) Any order made in terms of
subsection (5)(
b
)
shall be binding on all claimants to the rights in question, whether
such claim is lodged before or after the making of the order.
(9) Unless the Court orders
otherwise, the applicant shall not be entitled to any order for costs
against any other party.’
[17] Section 35 empowers the LCC to make orders in respect of the
restoration of land or rights therein or alternative redress
(in a
variety of forms, including the award of alternative state-owned land
or monetary compensation) in favour of a claimant,
and further orders
ancillary thereto.
Delegations by the Minister to the Eastern Cape Government
concerning, and donation by the latter to the municipality of,
relevant
land
[18] On 1 April 1997 the then Minister (designated the Minister of
Land Affairs) signed a delegation in favour of the Member of
the
Executive Council for Housing and Local Government in the Provincial
Government of the Eastern Cape (the MEC), or his successors
in
office, of the statutory power and authority held by the Minister to
dispose of certain state-owned land, subject to certain
conditions.
[19] The land, which thereby vested in the Province of the Eastern
Cape (and was so registered in the relevant register of deeds),
was
described as:
‘
REMAINDER
of ERF 912 (formerly known as Umtata Town Commonage West and Umtata
Town Commonage East together representing Umtata Town
Commonage),
Municipality of Umtata, District of Umtata, Province of the Eastern
Cape.’
[20] One of the stipulated conditions read as follows:
‘
. . .
where a portion of the properties, formerly known as Municipal
Commonages, is to be used for housing/township development
or for any
other development, the said MEC or Local Authority or any other
competent authority, . . . must satisfy themselves beforehand
that
such development will not result in the dispossession of people’s
rights (formal or informal) granted on or over such
commonage land
and in the event people’s rights are affected, it is a
prerequisite that other arrangements satisfactory to
those people
have been made, in consultation with the Department of Land Affairs
and in accordance with the provisions and/or conditions
stated in the
Policy and Procedures on Municipal Commonage document by the said
Department.’
[21] The delegation referred to was confirmed in a second delegation
dated 22 December 1997 in which the wording was substantially
the
same as in the earlier delegation save that:
a clause was inserted providing that when properties were to be
transferred by the provincial government to a municipal council,
the
transfer was to be subject to the conditions set out in the
delegation, which were to apply
mutatis mutandis
to such
municipal council;
in clause 4, headed ‘Protection of Existing Land Rights’,
the relevant wording of the first delegation was altered
to read
that in the event that people’s rights were affected ‘it
is a prerequisite that a Social Compact Agreement
with the affected
community be concluded to the satisfaction of those people . . .’,
and a further proviso was added that
the development in question was
only to commence after such agreement had been concluded with the
affected community.
[22] By letter, apparently dated 14 October 1997, the MEC advised the
municipality that a series of erven in Mthatha, being state-owned
land, was being donated to it by the Provincial Government of the
Eastern Cape, acting in terms of delegated authority from the
Minister. The donations were inter alia subject to the specific
conditions relating to alienation of municipal commonage, where
applicable, set out in the Ministerial delegation. One of the erven
donated was described as follows:
‘
Remainder
of Erf No 912 (formerly known as Umtata Town Commonage West and
Umtata Town Commonage East together representing Umtata
Town
Commonage).’
[23] By deed of transfer dated 29 January 1999, and pursuant to the
donation thereof, the Remainder of Erf 912 Mthatha was transferred
by
the Province of the Eastern Cape to the municipality. However, no
conditions relating to the alienation of municipal commonage
land
were endorsed on the title deed.
Land claims by KwaLindile, Zimbane and Bathembu
[24] During 1998 the office of the regional commissioner received a
number of land claims, including claims by KwaLindile, Zimbane
and
Bathembu. All of the claim forms submitted included claims in respect
of land within the town of Mthatha, some of the land
falling within
the area known as the Remainder of Erf 912 Mthatha.
[25] The answering affidavit of the regional commissioner filed in
the proceedings in the LCC, recorded that the various claims
received
consideration, and whilst this process was still in progress in
respect of some of the claims, two of the claims were
published by
the regional commissioner as provided for in the Act. One of these
claims was that made by KwaLindile. (As will be
set out later, the
publication of this latter claim was the subject of part of the
relief sought by the municipality in the LCC).
[26] It was the case of the municipality that history revealed that
none of the first three respondents had previously been dispossessed
of land which now fell within the boundaries of the town of Mthatha.
Accordingly, to the extent that the land claims lodged by
KwaLindile,
Zimbane and Bathembu embraced claims in respect of portions of land
within that area, the claims were invalid. The
contrary allegations
contained in the papers filed by KwaLindile and Zimbane had therefore
to be rejected. However, as set out
below, this court is not seized
with the resolution of these issues.
Commercial agreements between the municipality and other parties
[27] During 2004 to 2006 the municipality entered into various
agreements with Cape Gannet, Whirlprops and the sixth, seventh and
eighth respondents relating to the lease and substantial development
of various properties situate in the town of Mthatha, being
either
erven in Mthatha or proposed sub-divisions of the area known as the
Remainder of Erf 912 Mthatha.
The current situation in Mthatha
[28] The evidence tendered on behalf of the municipality, which was
not seriously disputed, disclosed inter alia the following.
The city
of Mthatha is completely urbanised. It comprises many suburbs,
consisting of thousands of erven privately owned and developed.
In
addition to residential erven, it has schools, hostels, hotels, guest
houses, conference centres, hospitals, medical clinics,
taxi ranks,
shopping centres, stores, railway lines, pump stations, a police
station, courts of law, private and governmental offices,
banks and a
variety of public facilities such as a golf course and recreational
park. The central business district and the industrial
areas are
thriving. The N2 national road, linking the Eastern Cape with
KwaZulu-Natal, passes through the city. This is a major
arterial road
making a substantial contribution to the advancement of the welfare
of the city and the region as a whole. There
are also tracts of
undeveloped land, including state-owned land. The municipality is
continually engaged in the development of
the city in various
directions. It has to ensure that it continues to be in a position to
undertake the provision of services to
its various communities in a
sustainable manner and to play its part in maintaining its vibrant
economy, which contributes to the
economy of the whole region and
reduction of unemployment, both in the city and the surrounding rural
areas. The municipality has
the necessary infrastructure to sustain
the above-mentioned activities, which are in the interests of the
whole region and the
public at large, and to found further
development to meet the ever increasing demand for the contribution
it can make. The commercial
agreements concluded by the municipality
with other parties referred to in paragraph 27 above are integral
parts of the continual
developments the municipality is undertaking.
Interdict proceedings instituted by the regional commissioner
[29] The regional commissioner alleged that the municipality was made
aware of the various land claims lodged with her, which embraced
claims in respect of land within the town of Mthatha, including the
area known as Remainder of Erf 912 Mthatha. That notwithstanding,
the
municipality proceeded, in terms of the commercial agreements in
question, to make the affected land available for development.
This,
so it was contended, was in violation of the Act as well as the
conditions contained in the delegations by the Minister,
to which
reference has been made above. In doing so, the municipality had
acted in bad faith, and had been guilty of misrepresentation
in
failing to advise the other contracting parties of the land claims in
question.
[30] The municipality recorded that, pursuant to the agreements
referred to in paragraph 27 above, development of the sites in
question in fact commenced during February 2007, and in some
instances construction was also commenced.
[31] The regional commissioner however approached the LCC to seek,
and was granted, an interdict against the developments in progress
‘pending serious and consultative negotiations,’ in case
no. 66/2007. The negotiations were undertaken, but proved
to be
unsuccessful and were aborted in January 2008. Each side placed the
blame for the failure of the negotiations at the door
of the other
side. This, too, is not an issue with which this court need concern
itself. The municipality was given leave, in the
event of an impasse
being reached, to launch an application in terms of s 34 of the Act.
The present litigation
[32] On 8 October 2008 the municipality invoked s 34 of the Act and
launched the present litigation.
(a) Para 4 of the municipality’s amended notice of motion
sought an order in the following terms:
‘
that
when the claims of the first, second and third respondents in respect
of any land situate in the town of Mthatha, including
the Remainder
of Erf 912 Mthatha (the land), are finally determined, the rights in
the land or any portions of the land shall not
be restored to any
successful claimant.’
(b) Para 5 sought, in the alternative, a declarator that,
notwithstanding the claims lodged in respect of the land, the
municipality
was entitled to develop the land.
(c) Para 6 sought a review, and the setting aside as unlawful, of the
decision of the regional commissioner to publish a notice
that a
claim had been lodged in terms of the Act by KwaLindile, insofar as
it related to the Remainder of Erf 912 Mthatha and various
other
erven in Mthatha. Paras 7 and 8 sought orders ancillary to that
sought in para 6.
(d) Para 9 sought an order for costs against any respondent who
opposed the municipality’s application.
[33] In their respective answering affidavits KwaLindile and Zimbane
opposed the relief sought by the municipality and prayed for
an order
dismissing the application with costs. Inter alia, reliance was
placed on the papers filed by the regional commissioner.
The Minister
and the regional commissioner filed a joint answering affidavit,
deposed to by the regional commissioner, which dealt
at length with
the allegations of the municipality, and sought the dismissal of the
application with costs.
[34] In substance, the sixth respondent and Cape Gannet supported the
main relief sought by the municipality. The ninth respondent
also
associated itself with the relief sought by the municipality.
Whirlprops supported the main relief sought by the municipality,
as
well as the prayers relating to the review of the regional
commissioner’s decision to publish the claims lodged by
KwaLindile.
It also prayed for an order for costs against the
regional commissioner.
Order issued in the LCC
[35] The order granted by Bam JP read as follows:
‘
The
following order is made in terms of section 34(5)(
c
)
of the Act.
The Remainder of Erf 912
Mthatha shall not be restored to any claimant or prospective
claimant.
All the prayers seeking the
withdrawal, review and the setting aside of publication of notices
in the Daily Despatch and the Government
Gazette by the 5
th
respondent are dismissed.
The resumption and the
initiation of all development projects upon any portion of the
Remainder of Erf 912 Mthatha by the applicant
shall only proceed
with the full transparent and exhaustive consultation with the 4
th
,
5
th
and present and prospective claimant respondents.
Developers and prospective
developers must ensure that whatever agreements [are] reached with
the applicant in respect of Remainder
of Erf 912 Mthatha are in
compliance with paragraph (iii) of this order and should revise and
re-structure such agreements accordingly.
They must also ensure
compliance with the spirit and letter of the Delegation, the
Constitution and the Act on the part of the
applicant and the 4
th
and 5
th
Respondents.
The applicant and the 4
th
and 5
th
Respondents are ordered and are expected to take
their responsibilities to the public seriously and take the
initiative in reaching
consensus. They should jointly research
projects and lay down the criteria for the advertising and
acceptance of tenders for
developments on the Remainder of Erf 912
Mthatha.
There is no order as to costs.’
Attacks on appeal
[36] There was no attack on the order of Bam JP in para (vi) that no
party be awarded costs in respect of the proceedings before
him. No
doubt the learned judge was swayed, correctly, by the fact that at
issue in the court a quo were rights contemplated in
the Act as well
as the Constitution, and considered in the circumstances that, as
envisaged in s 34(9) of the Act,
2
it would not be proper for any party to be mulcted in costs. As will
be shown below however different considerations apply in respect
of
the costs on appeal.
[37] The municipality sought to assail the order in para (i) insofar
as the LCC restricted the relief granted to an order only
in respect
of the Remainder of Erf 912 Mthatha, in contradisdinction to the
whole of the town of Mthatha. It further attacked the
imposition of
the riders set out in paras (iii) to (v) to the order in para (i),
and the dismissal in para (ii) of the prayers
in the review
application.
[38] Cape Gannet and Whirlprops jointly appealed against the order in
para (iv) to the extent that the order had a bearing on the
existing
lease agreements concluded between them and the municipality.
[39] The cross-appeal of KwaLindile was against the grant of the
order in para (i), as well as against the orders in paras (iii)
to
(v). The cross-appeal of Zimbane and the joint cross-appeal of the
Minister and the regional commissioner were in similar terms.
The judgment of the LCC
[40] The first issue that arises relates to the restricted reference
in para (i) of Bam JP’s order (as well as in paras (iv)
and
(v)) only to the Remainder of Erf 912 Mthatha in contradistinction to
a reference to the whole town Mthatha, including the
Remainder of Erf
912 Mthatha. It appears that the restriction found its origin in the
following statement in the judgment: ‘The
land in question is
described in the Notice of Motion as the “Remainder of Erf 912
Mthatha”’.
[41] The statement reflects a misreading of the notice of motion. As
set out in para 32(a) above, the reference in para 4 of the
notice of
motion was in fact to ‘any land situate in the town of Mthatha,
including the Remainder of Erf 912 Mthatha (the
land)’. (The
correct reference was in fact quoted in an earlier passage in the
judgment of Bam JP). The judgment does not
reflect that, for the
purposes of the orders to be made, Bam JP sought to draw any
distinction between the Remainder of Erf 912
Mthatha and the rest of
the town of Mthatha; no argument along such lines was presented upon
behalf of any of the parties; and
in fact no such distinction is to
be drawn. The learned judge accordingly erred in restricting the
operation of the order he granted.
I will revert to this aspect later
when I consider the attacks on para (i) of Bam JP’s order.
[42] The second issue was also
a
one of land
identification namely of the land that is embraced in the land claims
lodged with the regional commissioner. Bam JP
correctly commented
that it was not clear from the papers which specific areas of Mthatha
were encompassed in the Remainder of
Erf 912 Mthatha. Nor was there
exact clarity on the precise land that was the subject of the various
claims. (In fact, during argument
in this court counsel for Zimbane
at one stage intimated that Zimbane’s claim related to the
whole of Mthatha and counsel
for KwaLindile recorded that it was no
longer pursuing certain portions of its claim to land within the town
of Mthatha). A related
issue was the contention of the municipality
that the claims of Kwalindile, Zimbane and Bathembu were invalid
claims in that, whatever
the allegations of the three claimants, they
had in fact not been dispossessed of any land situate in Mthatha,
including the Remainder
of Erf 912 Mthatha.
[43] It is however not necessary that this court concern itself with
these issues, and the conclusion to be reached in the present
proceedings is not affected thereby. These issues would properly fall
to be resolved by the LCC when it hears and determines the
land
claims in question.
[44] The learned judge noted that, as provided for in s 34(6) of the
Act, the issues for decision were whether it was in the public
interest that the rights in question should not be restored to any
claimant and whether the public or any substantial part thereof
would
suffer prejudice unless an order in terms of ss (5)(
b
) were
issued before the final determination of any claim.
[45] As to the concept of ‘public interest’ the learned
judge stated –
‘
. . .
the starting point . . . is simply that “public interest”
is that which is in
the
interest and benefit of the community or communities served by
applicant municipality on the land in question.
The
claimant respondents are included in this group irrespective of the
validity of their claims. Should their claims be successful
they
will, of course, still be entitled to “just and equitable
redress” if the “public interest” supercedes
their
constitutional right to restitution.’ (Original emphasis).
[46] On one ground the learned judge found that the above test of
public interest was not satisfied, namely with respect to the
commercial agreements concluded by the municipality and certain of
the respondents (described by him as ‘unilateral agreements’
concluded by these parties). In their
present formats,
so it
was found, the developments in question ‘
were
designed primarily to promote entrepreneurial pursuits of a few with
minimal or peripheral outcomes to the communities served
by the
applicant particularly those with present and prospective claims to
the land such as the First and Second Respondent’.
The
learned judge therefore did not agree with the contention of the
municipality that the setting up of a retail complex, a casino
and
upper class suburb (one of the developments) was ‘significantly’
in the public interest, having particular regard
to the shareholding
in the developments.
[47] On the other hand, it was held that a strong argument in favour
of the public interest test was reflected in what was referred
to as
the ‘reality’ recognised in
Nkomazi
3
in the following passage:
’
Then
there is the reality that restoration of land within the towns could
well require, as envisaged by the ninth respondent, towns
people to
be expropriated of their houses, the expropriation of schools,
churches, parks and other facilities, as could occur also
in respect
of the numerous business industries and other economic activities in
the town. Major social disruption, the avoiding
whereof is advocated
in s 33(d) of the Restitution Act, would be inevitable.’
[48] The judgment of the court a quo continued as follows:
‘
Indeed,
it appears to me that the intention of the legislature in enacting
section 34 preventing restitution is, among others, precisely
to
avert the chaos that would follow were established cities and
settlements suddenly carved up piecemeal into as many separate
and
disparate pieces and portions as there were claims.’
[49] The learned judge accepted the submission on the behalf of
KwaLindile that a significant facet of public interest, a land
claim,
provided for in the Constitution and the Act, could not be left out
of the equation. However, he held that the curtailment
of the
claimants’ rights to restitution consequent upon the grant of
an order in terms of s 34(5)(
b
), would not entail their claims
not being dealt with as contemplated in the Act: they would still be
entitled to equitable redress,
in effect the reverse side of the coin
of a finding that the tests of public interest and prejudice have
been answered in favour
of the municipality.
[50] The learned judge noted that the stance of Zimbane was, firstly,
that it was not seeking restoration to itself of what was
referred to
as ‘any land in the city of Mthatha or land in private hands,’
but would instead in due course seek an
award of what was described
as participatory benefits in any developments and projects in respect
of portions of the subject land,
in compliance, so it was put, with
inter alia the tenets provided for in the Act, the Constitution and
also the ministerial delegations
that sanctioned the donation of the
land to the municipality. The second contention of Zimbane was that
it was entitled to restoration
of those portions of land within the
Remainder of Erf 912 Mthatha which were undeveloped (and unserviced).
[51] It was further recorded that, in the view of the learned judge,
it was clear that the opposition of Zimbane to the relief
sought by
the municipality (in the form of an order in terms of s 34(5)(
b
)
of the Act) was born of suspicions about the municipality’s
propensity ‘to go it alone’ when it came to reaping
the
fruits of development. Hence, Zimbane inter alia sought the
restoration of undeveloped land to itself so that it could
independently
be a party to the development thereof. It was intimated
by Bam JP that, in the orders to be made, he would attempt to address
these
particular concerns of Zimbane.
[52] It was however made clear in the judgment that the learned judge
remained of the view that an order in terms of s 34(5)(
b
) was
justified by reason of the satisfaction of the ‘public
interest’ test. I will revert to this aspect later.
[53] The opposition of the Minister and the regional commissioner to
an order in terms of the section was stamped by Bam JP as
being ‘the
most serious and damaging’. It was pointed out that apart from
the filing of their joint answering affidavit,
the regional
commissioner had been statutorily enjoined by s 34(2) to investigate,
and submit a report to the court on, the desirability
of an order
that the land in question not be restored. Instead, so it was put,
‘she submitted a report emphatically on the
undesirability of
making such an order’. The gravamen of her opposing argument
was that the claimants were entitled to the
restoration of those
parts of the Remainder of Erf 912 Mthatha which had not yet been
developed. It was further submitted that
‘feasibility’
was not a bar to the restoration of such portions and, accordingly,
in terms of the case law and the
Constitution, the primacy of
restitution required to be recognised, notwithstanding the other
forms of equitable redress that were
available. Reliance had been
placed on a dictum in
Khosis
4
.
[54] The counter to these arguments by Mr Mbenenge (who appeared for
the municipality in the court a quo), so Bam JP recorded,
replicated
the submissions that had won the day in
Khosis
and
Nkomazi
:
5
‘
. .
.
even
the partial restoration of portions of an established metropolitan
city such as Mthatha would seriously disrupt and disintegrate
the
city’s stability and development. The converse argument that
follows is that the “public interest” would
be served by
granting the order for non-restoration.’
Bam JP recorded that he was entirely in agreement with ‘this
logic’.
[
55] The learned judge’s
conclusion on the issue of public interest was couched as follows:
‘
Consequently,
I find that it would be in the “public interest” not to
restore to any claimants any portion of the land
within the
jurisdiction of the applicant and constituting Remainder of Erf 912
Mthatha. I find that it would, indeed, not be in
the “public
interest” to restore or even reserve or excise any portion of
the city as that could lead to chaos and
possible upheaval resulting
from competing claims to the city. The overlapping of claims might
lead to serious problems causing
inter-community tensions and
strife.’
[56] In respect of the second threshold requirement provided for in s
34(5)(
b
), substantial prejudice to the public or a substantial
part thereof were an order in terms of s 34(5)(
b
) not to be
made before the final determination of any claim, the judgment of the
LCC read as follows:
‘
This
requirement is, in this case, the corollary to the “public
interest” threshold in that what has been shown to be
in the
“public interest” will be prejudicial to that public if
not granted. I accept the applicant’s submissions
that failure
to grant the order could stifle or slow down development within the
subject land due to uncertainty in the outcome
of claims to the
detriment of its entire communities. Financial institutions will be
reluctant to provide any financial assistance,
even where claimants
consent to such development, to the detriment or substantial
prejudice of many including the 1
st
and
2
nd
respondents.
It is, furthermore, common knowledge that the finalisation of land
claims is often a very long process. I am satisfied
that the public,
or any substantial part thereof, will suffer substantial prejudice
unless the order is granted. Accordingly, the
section 34 application
is to be granted.’
[57] Bam JP then reverted to the reasons why he granted the orders
set out in paras (iii) to (v), and he amplified his earlier
comments
6
by adding the following paras:
‘
[27]
However, given the poor track record of the applicant in complying
with the spirit and letter of the delegations, the Constitution
and
the Act in the unilateral awarding of tenders to the 6
th
–
10
th
Respondents,
the application will be granted subject to the conditions to be set
out presently.
[28] The conditions to be laid
down seek to address particularly the concerns convincingly
articulated in the opposing affidavits
on behalf of the 1
st
,
2
nd
and
5
th
Respondents. In addition, this
court has,
mero motu,
taken judicial notice
of the high levels of corruption, factionalism and greed that have
assailed our national and local government
structures such as might
lead to chaos and social upheaval if not subjected to scrutiny and
transparency.’
[58] Bam JP finally recorded that it was unnecessary to deal with the
review application, save to point out that disputes concerning
the
validity of land claims as published fell to be adjudicated by the
LCC in due course once it became seized of such proceedings.
Assessment
[59] On the premise that the issue of an order in terms of s 34(5)(
b
)
would be proper in this matter (as to which, see below) I propose
first to consider the propriety of the orders contained in paras
(iii) to (v) of the order issued by Bam JP. Mr Mbenenge (who with
Messrs Havenga and Da Silva, appeared for the municipality in
this
court), subjected the issue of the orders in question to trenchant
criticism. Mr Pammenter, for Cape Gannet and Whirlprops,
associated
himself with the argument.
[60] I agree with the submission that the comments by Bam JP,
firstly, that the developments envisaged in the commercial agreements
concluded between the municipality and the other relevant parties had
as primary purpose the promotion of entrepreneurial pursuits,
and,
secondly, that the agreements evinced that the municipality had a
poor track record in the matter of compliance with the spirit
and
letter of the delegation, the Constitution and the Act, did not enjoy
persuasive foundation in the evidence. Moreover, the
learned judge
incorrectly sought to stress the position of present and prospective
land claimants (an approach which opposing counsel
sought to support
during argument).
[61] In the first place, it needs no argument that developments of
the nature of those that are in issue advance the weal of the
broader
public, both of Mthatha and of the surrounding region. As intimated
in para 28 above such developments are integral facets
of the growth
of the city, with its concomitant benefits to the community as a
whole. Second, the suggestion that to meet the requirement
of public
interest, ‘shareholding’ in the developments should now
be made available to persons who at this stage are
no more than
claimants, or would-be claimants, has only to be stated to be
rejected. For development of a city to stand still and
await the
determination of which persons have valid land claims, would of
necessity bring in its train manifest disadvantages to
the community
as a whole.
[62] In seeking to advance a contrary approach, Mr Benningfield (for
Zimbane) laid stress on the terms of the delegation by the
Minister
to the MEC, in respect of which he supported the apparent approach of
Bam JP that same were binding on the municipality.
Thus, he contended
that the municipality was not entitled to proceed with any
development until the Social Compact Agreement referred
to in clause
4 of the delegation,
7
had been concluded. To complete his argument he contended that by
reason of the land claim lodged by it Zimbane qualified as ‘people
whose rights were affected’.
[63] Even on the premise that the terms of the delegation are binding
on the municipality (which this court is not required to
find), the
argument cannot be upheld. The relevant section in the delegation
refers, in terms, to
existing land rights,
in
contradistinction to
claimed rights
. This issue engaged the
attention of Petse J in
No-Italy Phindiwe Mtirara v Landmark
Mthatha (Pty) Limited
(unreported, case no 607/2007 ZAECM, 1 June
2007). Explaining the emphasis he placed on the words ‘existing
rights’
in clause 4 of the delegation the learned judge stated:
‘
There
can be no doubt that this clause cannot be construed to encompass
someone who has lodged a claim with the Land Claims Commissioner
for
the restitution of land of which the claimant was dispossessed after
1913 as a result of past discriminatory laws or practices
as provided
for in the
Restitution of Land Rights Act because
in my view the mere
lodgement of a land claim with the Lands Claim Commissioner is by
itself an acceptance by the claimant that
he/she does not have
existing rights in the land in respect of which a claim is made
having been dispossessed thereof “
as
a result of past discriminatory laws or practices”. . .
hence
the claim . . . .’
(Emphasis
in the original. )
I align myself with this approach.
[64] I further cannot endorse the preparedness of the learned judge
in the court a quo to take judicial notice of the ‘high
levels
of corruption’ etc,
8
as part of the foundation for the making of the orders in question.
Whatever the manifestation of corrupt practices etc in other
governmental circles, it was not permissible in this case to visit
the municipality with same, without any evidential foundation
therefor and to craft an order against the municipality on that
score.
[65] Two further submissions were made by counsel. First, the content
of the orders in question sought to clothe the Minister and
the
regional commissioner with more powers than those envisaged in the
Act; in short, the right in effect to veto the terms of
a contract
concluded by the municipality, apparently with a view to securing
equitable redress for a claimant. However, so counsel
argued, the
role of the regional commissioner in respect of claims under the Act
is investigative, facilitative and mediatory,
not adjudicative,
9
and the orders were
pro tanto
impermissible. The submission
was valid.
[66] Second, the orders were void for vagueness and uncertainty, and
were accordingly not capable of implementation or enforcement.
Suffice it to say that an analysis of the orders demonstrates the
validity of this submission.
[67] As to the two threshold requirements posed in s 34(6), the
following principles are applicable:
(a) While s 34(5)(
b
) provides for an extraordinary
ante
omnia
order (ie prior to the determination of claims),
10
once the court is satisfied that the two jurisdictional requirements
have been met, the court does not have a further overriding
discretion in terms of the section not to grant an order.
11
(b) The decision on both requirements involves the exercise of a
value judgment, based on the facts found to be proven. On this
latter
score the court has to take into account the various factors listed
in s 33 to the extent that a particular factor is of
application in
any given case, and is also entitled to have regard to a number of
disparate and incommensurable factors, in the
result exercising a
wide discretion.
12
(c) On appeal, the appellate tribunal is obliged to accord deference
to the findings of the lower court, more especially where
the latter
court is a specialist court called upon to make value judgments.
13
[68] The reasoning of Bam JP in arriving at the conclusion that it
would be in the public interest for an order in terms of s 34(5)(
b
)
of the Act to be issued appears from paras 47-55 above. I align
myself with this reasoning (subject to my earlier comments bearing
on
the orders in paras (iii)-(v) of the order of Bam JP). Specifically,
the learned judge’s references to ‘the reality’,
‘the chaos’ and the established nature of the city of
Mthatha satisfactorily echo the references in s 33 of the Act
to
‘feasibility of restoration’, ‘social upheavel’
and ‘current use’ (said in
Khosis
14
to bear closely on public interest considerations), to which may be
added the element of forward planning adverted to in para 28
above.
These considerations are of no less application to land which at the
present moment is as yet undeveloped. It may also be
mentioned that
in this matter there is no suggestion of an ancestral umbilical cord
between the land claimed and any of the claimants.
I agree therefore
that it is in the public interest for an order in terms of s 34(5)(
b
)
to issue.
[69] As to the second requirement of ‘substantial public
prejudice’ I again align myself with the approach of Bam JP
as
reflected in para 56 above. Depending on the evidence, the reverse
side of the coin of a finding of public interest in the grant
of an
order is generally a finding of public prejudice should the order be
refused. In addition to the features listed by the court
a quo
emphasis may be laid on the fact that it is not in the public
interest, and would therefore be prejudicial to the public,
to have
trials (re
restoration
of rights in land) which have no
realistic prospects of success in the light of the finding in respect
of the first jurisdictional
requirement.
15
Similarly, it may be emphasised that cognisable public prejudice
would follow on a refusal of an order in terms of s 34(5)(
b
)
having the result, as it would in the present matter, of hampering
the municipality in its efforts in striving after a contribution
to
the welfare of the broader community of Mthatha and the surrounding
region. I accordingly agree that the second threshold requirement
for
the grant of an order was met.
[70] For the reasons detailed in paras 40 and 41 above it is
necessary for the order in para (i) made by Bam JP to be amended to
include a reference to the whole town of Mthatha, instead of merely
the Remainder of Erf 912 Mthatha. Further, in the light of
the
provision in s 34(8) that an order in terms of s 34(5)(
b
) is
binding on all claimants, present and future, it would be appropriate
for the references in the notice of motion to the first
three
respondents, as claimants, not to be included in the order made.
These aspects will be reflected in the order set out at
the end of
this judgment.
[71] The final substantive issue relates to the application of the
municipality for the review and setting aside of the regional
commissioner’s publication of the land claims lodged with her
by KwaLindile. It is however unnecessary and undesirable for
any
order to be made in respect of the prayers in question. It is
unnecessary because the relief sought in the prayers does not
have a
bearing on the main relief which the municipality has secured, ie an
order in terms of 34(5)(
b
). The publication itself will also
not affect the decision of the LCC in due course when it is seized
with a determination of the
claims and the relief (excluding
restoration
of any land or rights therein) to be granted in
respect of any valid claims. At this stage the only effect of
publication of the
claims is that, as provided for in s 11(7) of the
Act,
16
one month’s written notice of the intention to engage in
dealings in the land must be given to the regional commissioner,
and
the latter, if so advised, is also entitled in terms of s 6(3) of the
Act
17
to approach the LCC for interdictory relief against dealings in any
relevant land. And it is undesirable to deal with the review
application because this would involve a consideration of the ambit
of the claims made by KwaLindile, a question properly to be
considered by the LCC.
Costs
[72] The remaining issue relates to the costs of the appeal
proceedings. The submission that costs should follow the result can
only be upheld to a limited extent. In
Biowatch
18
a number of principles were enunciated as being applicable to a costs
award in constitutional litigation. Applying those principles
to the
present matter the following conclusions are appropriate:
(a) The municipality and Cape Gannet and Whirlprops, although being
the successful parties, are not entitled to, nor did they seek,
a
costs order against KwaLindile and Zimbane, who were private parties
seeking to assert a constitutional right against a government
body
(the municipality).
(b) The regional commissioner, representing the state, was the prime
mover in resisting the relief sought, initially in the LCC
by the
municipality, and on appeal by the municipality and Cape Gannet and
Whirlprops. She launched the interdict proceedings referred
to
earlier. Her statutory report in terms of s 34(2)
19
unequivocally took up the cudgels on behalf of the claimants insofar
as undeveloped land in Mthatha was concerned and propounded
the view
that the claimants were entitled to the
restoration
of such
land, notwithstanding the factor of ‘feasibility’. She
remained adamant in that stance in the answering affidavit
to which
she was the deponent. Reliance was placed on her stance by the other
unsuccessful respondents. She was in short the driving
force behind
the litigation. Accordingly, Cape Gannet and Whirlprops, private
litigants who achieved success in constitutional
litigation against a
government agency, the regional commissioner, are entitled to an
order that she bear their costs on appeal.
Notwithstanding that the
municipality is a government body, its budget vote is separate from
that of the Department of Rural Development
and Land Reform; it is
therefore to be equated with a private litigant who achieved success
against a government body, and it is
accordingly entitled to a costs
order against the regional commissioner. KwaLindile and Zimbane did
not seek any cost order (and,
so we were advised from the Bar, they
were in any event being sponsored in the litigation by the Minister
and the regional commissioner).
[73] In view of the importance and complexity of the matter, the
municipality was justified in engaging the services of three counsel.
Order
[74] The following order is made:
1. The appeals are upheld with costs, including the costs of three
counsel, where applicable, the costs to be paid by the fifth
respondent.
2. Paragraphs (i) to (v) of the order of the court below are set
aside and for them are substituted the following:
‘
(i) In terms of section 34(5)(
b
)
of the
Restitution of Land Rights Act 22 of 1994
it is ordered that
when claims in terms of the Act in respect of any land situate in the
town of Mthatha, including the Remainder
of Erf 912 Mthatha (the
land), are finally determined, the rights in the land or any portion
thereof shall not be restored to any
successful claimant.
(ii) No order is made in respect of the application for the review of
the publication by the fifth respondent of claims lodged
in terms of
the Act to land situate within the municipality of Mthatha.’
3. The cross-appeals are dismissed.
4. The costs of the respondents in the cross-appeal, including the
costs of three counsel, where applicable, will be paid by the
fifth
respondent.
________________________
F KROON
ACTING JUDGE OF APPEAL
APPEARANCES:
FOR FIRST APPELLANT: S Mbenenge SC
H Havenga SC
A Da Silva
Instructed by:
Dayimani Sakhela Inc, Mthatha
Bokwa Attorneys, Bloemfontein
FOR SECOND AND THIRD
APPELLANTS: CJ Pammenter SC
Instructed by:
Cox Yeats Attorneys, Durban
McIntyre & Van der Post, Bloemfontein
FOR FIRST RESPONDENT: LB Broster SC
AA Gabriel SC
Instructed by:
M Magigaba Inc, Mthatha
Matsepes Inc, Bloemfontein
FOR SECOND RESPONDENT: PG Benningfield
Instructed by:
Nongogo Nuku Inc, East London
EG Cooper Majiedt Attorneys, Bloemfontein
FOR FOURTH AND FIFTH
RESPONDENTS: N Dukada SC
T Seneke
Instructed by:
State Attorney, Mthatha
State Attorney, Bloemfontein
1
Para
16 below.
2
Para
16 above.
3
Nkomazi
Municipality v Ngomane of Lugedlane Community and other
s
[2010]
3 All SA 563
(LCC) para 29.
4
Khosis
Community, Lohatla, and others v Minister of Defence and others
2004
(5) SA 494
(SCA) para 30: ‘In considering its decision in this
regard a court has to take into account the factors listed in s 33.
All of them are not necessarily applicable in any given case.
However, in a case such as the present the general approach ought
to
be that the dispossessed community is entitled to restoration of the
land unless restoration is trumped by public interest
considerations.’
See
too
Mphela and Others v Engelbrecht and others
[2005] 2 All
SA 135
(LCC) at 184;
Mphela v Haakdoornbult Boerdery CC
[2008] ZACC 5
;
2008
(4) SA 488
(CC) para 32.
5
See
n 3 above.
6
Paras
46, 50 and 51
above.
7
Para
23(b) above.
8
8
Para 57 above.
9
See
eg
Farjas
(Pty) Ltd and another v Regional Land Claims
Commissioner, KwaZulu-Natal
1998 (2) SA 900
(LCC) para 19 (of
the judgment of Bam P) and para 41 (of the judgment of Dodson J).
10
Nkomazi
n 3 above, para 8.
11
Nkomazi
para 12;
Khosis
n
4 above, para 7.
12
Nkomazi
para 9;
Khosis
paras 8, 30 and 33.
13
Khosis
para 11.
14
See
n 4 above, para 33.
15
Khosi
n 4 above, para 42;
Nkomazi
n 3 above, para 9.
16
Para
14 above.
17
Para
13 above.
18
Biowatch
Trust v Registrar, Genetic Resources, and others
2009
(6) SA 232
(CC).
19
Para
53 above.