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[2012] ZASCA 206
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Saldanha Bay Municipality v Britannia Beach Estate (Pty) Ltd (769/11) [2012] ZASCA 206 (30 November 2012)
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IN
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
CASE
NO: 796/11
Reportable
In
the matter between:
SALDANHA
BAY MUNICIPALITY
.......................................................
APPELLANT
and
BRITANNIA
BEACH ESTATE (PTY) LTD
.............................
FIRST
RESPONDENT
BRITANNIA
BAY DEVELOPERS (PTY) LTD
..................
SECOND
RESPONDENT
SANDY
POINT BEACH PROPERTIES (PTY) LTD
...............
THIRD RESPONDENT
WEST
COAST MIRACLES (PTY) LTD
..............................
FOURTH
RESPONDENT
Neutral Citation:
Saldanha Bay Municipality v Britannia Beach Estate (Pty) Ltd
(796/11)
[2012] ZASCA 206
(30 November 2012)
Coram:
CLOETE and
TSHIQI JJA and ERASMUS, SWAIN and MBHA AJJA
Heard: 20 November
2012
Delivered: 30 November
2012
Summary: Municipal law
– local government – the enforceability of conditions in
respect of ‘capital contributions’
imposed in terms of s
42 of the Land Use Planning Ordinance 15 of 1985 and the various
tariffs underlying such conditions.
______________________________________________________________
ORDER
______________________________________________________________
On
appeal from
: Western Cape High Court, Cape Town (Cloete AJ
sitting as court of first instance):
The appeal is upheld
with costs, including the costs of two counsel.
The order of the court a
quo is set aside and substituted with the
following:
‘
The application is
dismissed with costs.’
______________________________________________________________
JUDGMENT
______________________________________________________________
ERASMUS AJA (CLOETE and
TSHIQI JJA and SWAIN and MBHA AJJA concurring):
[1] This appeal arises
from an order of the Western Cape High Court, Cape Town, declaring
the tariff for the calculation of bulk
infrastructure development
contribution levies, set out in resolutions of the appellant’s
council, to be of no force and
effect; ordering the appellant to
account to the respondents in respect of moneys levied by the
appellant and paid by the respondents
as contribution levies
calculated in accordance with the impugned tariff; and ordering the
appellant to pay the respondents’
costs. The appeal is with
leave of this court, the high court having dismissed the appellant’s
application for leave to appeal.
[2] The appellant is a
municipality established in terms of the
Local Government: Municipal
Structures Act 117 of 1998
. Its area of jurisdiction extends over a
number of sea-side towns on the west coast, Western Cape. The
respondents are related
companies and are all property developers in
the jurisdiction of the appellant.
[3] Property developers
in the Western Cape province regularly require the rezoning and
sub-division of properties acquired by them,
and make application to
the relevant local authority for such rezoning and sub-division in
terms of ss 16 and 25 of the Land Use
Planning Ordinance 15 of 1985
(Cape) (LUPO). It has been held that the granting of approvals of
this nature impose a financial
burden on local authorities.
1
To alleviate this burden
s 42 of LUPO provides that when granting applications of this nature,
the council of a municipality may
impose conditions ‘[it] may
think fit’.
[4] Sections 42(1) and
(2) of LUPO provide as follows:
’
42(1) When the Administrator or
a council grants authorization, exemption or an application or
adjudicates upon an appeal under
this Ordinance, he may do so subject
to such conditions as he may think fit.
Such conditions may, having regard
to-
(a) the community needs and public
expenditure which in his or its opinion may arise
from the authorization, exemption,
application or appeal concerned and the public expenditure incurred
in the past which in his
or its opinion facilitates the said
authorization, exemption, application or appeal; and
(b) the various rates and levies paid
in the past or to be paid in the future by the owner of the land
concerned,
include conditions in relation to the
cession of land or the payment of money which is directly related to
requirements resulting
from the said authorization, exemption,
application or appeal in respect of the provision of necessary
services or amenities to
the land concerned.’
[5] Section 42(3) of LUPO
prescribes a strict procedure to which there must be adherence before
any condition imposed in terms of
42(1) can be amended.
2
The relevant part of that
section reads as follows:
‘
Subject to the provisions of
the Removal of Restrictions Act, 1967 (Act 84 of 1967), . . . a
council, . . . may, in relation to
a condition imposed under
subsection (1), after consideration of objections received in
consequence of an advertisement in term
of subsection (4) and after
consultation with the owner of the land concerned . . .
(a) . . . amend any condition, and
(b) impose additional conditions of
the kind contemplated in subsection (1), which additional conditions
shall be deemed to have
been imposed in terms of that subsection.’
[6] The tariff for the
calculation of capital contributions, ie the sums of money payable
under conditions imposed in terms of s
42 of LUPO, is determined by
the council by resolution. On 23 September 1997, the council of the
appellant’s predecessor
determined the tariff by way of
resolution R55/9–97 (R55).
[7] Resolution 55 reads
as follows:
‘
FINANSIES : KAPITAALBYDRAES
: AANPASSING : BELEID VIR BEREKENING VAN BYDRAES VIR INSTALLERING VAN
INGENIEURS DIENSTE TYDENS AANSOEK
OM DORPSTIGTING, HERSONERING EN
ONDERVERDELING
(Verslag van die stadsingeneur)
(6/6/2/1; 6/6/2/2; 6/6/2/4)
BESLUIT
. . . ;
dat die beleid vir die berekening van
bydraes vir die installering van ingenieursdienste tydens aansoek om
dorpstigting, hersonering
en onderverdeling soos vervat in bylae “A”
as die raad se beleid met ingang 1 Oktober 1997 aanvaar word;
. . . ;
dat hierdie tariewe elke jaar op 1
Augustus, met die indeks van siviele ingenieurswerke, soos op 31
Mei, eskaleer . . . .’
[8] This was the tariff
applicable at the time the respondents lodged the six applications
relevant to this matter. The approvals
for the first three
applications were granted prior to 1 July 2007, when the tariff in
resolution R55 was still applicable. These
approvals were granted on
29 April 2003, 29 July 2005 and 5 May 2006 respectively. Payment of
capital contributions calculated
in terms of this tariff was made a
condition of all the approvals, which conditions were accepted by the
respondents. The conditions
read:
‘
(q) dat kapitaalbydraes per
erf/eenheid plus BTW vir water, riool en paaie, ingevolge
raadsbesluit 55/9-97 van 23 September 1997,
betaalbaar is by die
indiening van bouplanne of by aansoek vir uitklaring welke ookal die
vroegste is,
[Hierdie kapitaalbydraes eskaleer
jaarliks op 1 Augustus ooreenkomstig die indeks op Siviele Dienste
(Projekte) soos op 31 Mei]
. . .
U word gewys op u reg tot appèl,
ingevolgde Artikel 44(1) van die Ordonnansie op
Grondgebruikbeplanning, Nr 15 van 1985,
saamgelees met Regulasies 17
tot 25 uitgevaardig ingevolge Artikel 47(1) van genoemde Ordonnansie,
en dat welke appèl binne
dertig (30) dae na datum van
registrasie van hierdie skrywe, by beide die Premier per adres Die
Direkteur, Departement Omgewingsake
en Ontwikkelingsbeplanning,
Privaatsak X9086, Kaapstad, 8000 en die Munisipale Bestuurder,
Munisipaliteit Saldanhabaai, Privaatsak
X12, Vredenburg, 7380, moet
indien.’
Both the local authority
and the relevant applicant is bound to comply with the conditions
offered and accepted.
3
[9] After the approval of
the first three applications and whilst the remaining applications
were pending, the council adopted resolution
R35/6-07 (R35) on 26
June 2007. Resolution 35 reads as follows:
‘
FINANSIES : KAPITAALBYDRAES
: AANPASSING : BELEID VIR BEREKENING VAN BYDRAES VIR INSTALLERING VAN
INGENIEURSDIENSTE TYDENS AANSOEK
OM DORPSTIGTING, HERSONERING EN
ONDERVERDELING
FINANCES : CAPITAL BUDGET :
ADJUSTMENT : POLICY FOR CALCULATION OF CONTRIBUTIONS FOR INSTALLATION
OF ENGINEER’S SERVICES DURING
APPLICATION FOR TOWN
ESTABLISHMENT, REZONING ANS SUB-DIVISION
(Verslag van die Munisipale Ingenieur
: Siviele Dienste)
(6/6/2/1; 6/6/2/2, 6/6/2/4)
BESLUIT /
RESOLVED
[i] . . . ;
[ii] dat die raad se beleid gewysig
word om ook kapitaalbydraes vir die hantering van vaste afval in te
sluit;
[iii] dat die kapitaal bydrae soos
vervat in Bylaes “A” en “B” van die verslag
van toepassing sal wees
vanaf
1 Julie 2007;
[iv] dat die kapitaal bydrae elke jaar
op 1 Julie eskaleer.
[v] dat die raad se
kapitaalbydraesbeleid in ‘n omvattende dokument vervat word.’
(My underlining.)
[10] It is therefore
clear that the tariff in terms of R35 was to come into effect with
effect from 1 July 2007. On 12 July 2007,
the appellant published a
notice relating to the council’s decision in respect of R35,
which notice, it was stated, was given
in terms of the provisions of
s 75A(3) of the Local Government: Municipal Systems Act 32 of 2000
(the Systems Act). The notice
stated that objections to the
resolution should be directed to the appellant’s then municipal
manager. The municipal manager
received two objections. However,
neither was an appeal in terms of the Systems Act nor was any review
in respect of the resolution
launched.
[11] On 3 August 2007 the
first of the last three applications at issue was approved. One of
the conditions related to payment of
capital contributions calculated
in terms of the tariff in R35. It further included the following
paragraphs:
‘
. . . that the applicant
confirm in writing that he accepts the conditions of approval and if
not, that the prescribed procedure
be followed in order to appeal
against the conditions.
Please note that although it has been
resolved to approve the application, you and the objectors have the
right to appeal against
the conditions of approval to the Municipal
Manager of Saldanha Bay Municipality in terms of Section 62 of the
Municipal Systems
Act No 32 of 2000.
If an appeal is lodged the decision of
the Mayoral Committee, is suspended until the outcome of the appeal
process in terms of the
Municipal Systems Act No 32 of 2000, where
upon the right to appeal against the decision of the Local Authority
to the Premier
of the Western Cape in terms of Section 44(1)
(a)
of
the Land Use Planning Ordinance, No 15 of 1985 and paragraph 22 of
the Regulations set out in Provincial Notice PN1050/1988,
will be
given.
Should you wish to exercise your right
of appeal, the following procedures should be adhered to (failure to
adhere to the below
mentioned procedures may render an appeal
invalid)
the appeal must be in writing,
the appeal in terms of the Municipal
Systems Act No 32 of 2000 must be addressed to :
The Municipal
Manager, Private Bag X12, Vredenburg, 7380,
by registered post,
the appeal in terms of Section
44(1)
(a)
of the Land Use Planning Ordinance, No 15 of 1985
should be addressed to : the
Department of Environmental Affairs
and Development Planning, Private Bag X9086, Cape Town, 8000
by
registered post
, a copy of which must be submitted to this
Council at the above mentioned address
, within the mentioned
period.
the appeal must be accompanied by all
relevant documentation,
the appeal must set out the grounds
on which it is based;
the right of appeal must be lodged
within 21 days
of the date of registration of this letter.
Council will regard your acting on the right of appeal to be the
date on which your
appeal is received by the administrative offices
of Council.’
[12] In July 2007 the
municipal manager reported to the council that, in his view, it was
unclear whether the new tariff provided
for in R35 was applicable to
all approvals, including those granted prior to its adoption.
Resolution 50/8-07 was then adopted
whereby it was confirmed that R55
applied to all applications approved before 1 July 2007 (the date
from which R35 came into effect).
This ultimately led to the adoption
of resolution R43/12-07 the relevant part of which provides:
‘
FINANCES: CAPITAL
CONTRIBUTIONS : POLICY FOR CALCULATION OF CONTRIBUTIONS FOR THE
INSTALLATION OF ENGINEERING SERVICES DURING APPLICATION
FOR TOWN
ESTABLISHMENT, REZONING AND SUBDIVISION
(Report by the Municipal Engineer :
Civil Services) (5/6/1/R)
RESOLVED
‘
. . .
that the capital contributions,
contained as Annexure “B” and “C” to the
report, with the inclusion of
solid waste, as calculated and
submitted to Council
per item R35/6-07 dated 26 June 2007 be
reconfirmed
to be applicable on
all developments approved as
from 1 July 2007
. . .
[vi] that a discount of 25 % on the
tariffs contained in Annexure “B” and “C” to
the report, rounded off
to nearest R10, be made applicable on all
developments approved prior to 1 July 2007, which discount will be
terminated as from
1 July 2008;
. . . ‘
[13] The respondents
objected to resolution R43. The parties exchanged correspondence with
a view to settling the matter, which
proved unfruitful. The
respondents then instituted action in the Western Cape High Court to
review and set aside the council’s
decision relating to R43.
The appellant initially opposed the application but later abandoned
its opposition and, by way of resolution
R105/8-07, resolved to
withdraw R43 and then, by resolution R107/3-10, resolved to adopt an
interim policy on development contributions.
[14] Before the
revocation of R43 and the interim policy was introduced, the last two
of the six applications were approved with
conditions similar to the
application approved on 3 August 2007 that referred to R35. No
appeal, either in terms of LUPO or the
Systems Act, was lodged and
the respondents accepted the conditions.
[15] Resolution 105 to
which I have already referred was adopted on the 2 February 2010.
Further correspondence followed between
the parties until 2 July
2010, when the respondents launched the application in the high
court.
[16] To sum up:
Three applications were
approved before 1 July 2007,incorporating obligations to pay capital
contributions in accordance with R55.
Three applications were
approved thereafter incorporating obligations to pay capital
contributions in accordance with R35. In all
six cases the conditions
were imposed in terms of s 42 of LUPO and accepted by the applicants.
[17] The court below
found that there had been an implied revocation of the tariff set out
in R35. It therefore held that ‘the
new tariff [was] . . . of
no force and effect’. I pause to note that the respondents also
sought, in the alternative, relief
reviewing and setting aside R35,
which the court below found unnecessary to deal with in the light of
its findings in respect of
R43 and the implied revocation of R35.
Furthermore, the respondents claimed that by the unlawful levying of
the capital contributions
in terms of resolution 35 they had overpaid
the appellant and were therefore entitled to an accounting in respect
of the overpayments
made. Based on a ‘fiduciary relationship’
between the parties the court below ordered the appellant to account
to the
respondents in respect of those overpayments.
[18] The appellant in
this court argued that there was no basis for the court a quo to make
any order in respect of R43 as it was
rescinded by the appellant
council on 2 February 2010 by R105. The appellant further argued –
and this is the crux of its
case - that the court a quo failed to
draw a clear distinction between, on the one hand, the adoption of a
policy reflecting a
tariff to be applied to conditions imposed in
terms of s 42 of LUPO, and on the other, the actual imposition of the
conditions
under LUPO. Lastly, the appellant argued that there is no
factual or legal basis for an order that the appellant account to the
respondents in respect of sums allegedly ‘unlawfully levied by
the appellant’ and ‘overpaid’ by the respondents
as
capital contributions. In any event, the appellant argued, the
application in the court a quo should have been refused on the
basis
of the respondents’ unreasonable delay, having regard to the
prejudice suffered by the appellant as a result thereof.
[19] The main issue on
appeal is whether the court a quo could grant the relief it did to
the respondents on the basis that the
council impliedly revoked
resolution R35 and the tariff set out therein when it revoked
resolution R43 and, in particular, whether
the appellant was entitled
to enforce conditions relating to payment of capital contributions
calculated in terms of that tariff.
[20] The reasoning of the
high court is reflected in the finding that the ‘new tariff’s
only right of existence thus
flowed from R43’. This reasoning
is flawed. The payment of contributions was an enforceable condition
of each approval. That
these conditions were validly imposed in terms
of s 42 of LUPO is uncontested. The amount payable is determined with
reference
to a tariff. The tariff, with reference to R55 or R35, was
set out in the approvals themselves and cannot owe its right of
existence
to anything else.
4
The changes in the
council’s policy from time to time are for that reason
irrelevant.
[21] The conditions
agreed to and set cannot be unilaterally amended by any of the
parties. They remain binding unless set aside
in review proceedings
or otherwise.
5
These incorporate
specific tariffs. It is common cause that the procedure prescribed in
s 42(3) of LUPO was not followed. That is
the end of the matter and
the appeal must accordingly succeed.
[22] The last issue
concerns whether the appellant should be ordered to account to the
respondents. In view of the conclusions that
I have reached, it is
not necessary for me to deal with this question. I would nevertheless
say this. The respondents did not allege
that there was any
contractual or statutory obligation on the appellant to account
6
to them. The court below
ordered the appellant to ‘account’ to the respondents on
the basis of the ‘fiduciary
relationship’ between the
parties. It relied on
Kempton
Park/Tembisa Metropolitan Substructure v Kelder
2000
(2) SA 980
(SCA) in doing so. That case is no authority for the
propostion that a fiduciary duty exists between a local authority and
a property
developer obliging the former to account to the later for
overpayments allegedly made. As this court said in
Kempton
Park/Thembisa Metropolitan Substructure v Kelder:
‘
. . . That there is in a broad
sense a fiduciary relationship between the council and its ratepayers
is plainly correct As Feetham
AJA explained in
Sinovich
v Hercules Municipal Council
1946 AD 783
at 820
“
(i)t may, I think, be safely
affirmed that the main object of establishing municipal councils and
similar bodies for purposes of
municipal government, as understood
and carried on in the Union of South Africa . . ., is to enable
representatives of the inhabitants
of given areas to administer,
subject to some degree of control by a central authority, the local
affairs of those areas in the
general interest of their respective
communities; and, in order to make such administration adequate and
effective, it has now
become a common practice to give to each
municipal council wide powers to decide according to its discretion,
subject to certain
checks and safeguards, what measures will or will
not serve ‘a useful civic or municipal purpose’ in its
own area”.
That local government should be
representative of the inhabitants of its area of jurisdiction and
that its actions should be open
and transparent can certainly not be
doubted. No one would, in this day and age, question these
propositions. But I do not subscribe
to the attribution to the
council of private law duties derived from the law of trusts. The
council, as has been stated, owes its
existence to the provisions of
the
Local Government Transition Act 209 of 1993
and the proclamations
made in terms thereof. Its powers and duties are conferred by the
Constitution, by other statutes and the
relevant principles of public
and administrative law. To impose upon it additional duties in
accordance with the principles of
private law seems to me to negate
its function as an organ of State and a branch of government.’
[23] For these reasons I
am of the view that the appeal must be upheld. The parties are in
agreement that costs should include the
costs of two counsel.
[24] The following order
is made:
1. The appeal is upheld
with costs, including the costs of two counsel.
2. The order of the court
a quo is set aside and substituted with the following:
‘
The application is
dismissed with costs.’
____________________
N ERASMUS
ACTING JUDGE OF APPEAL
APPEARANCES:
FOR
APPELLANT: JA Newdigate SC (with him M.L. Sher)
Instructed
by:
Swemmer
& Levin Inc., Cape Town
Matsepes
Inc., Bloemfontein
FOR
RESPONDENT: SP Rosenberg SC (with him P.S. van Zyl)
Instructed
by
Werksmans
Inc. J S de Villiers, Cape Town
McIntyre
& van der Post, Bloemfontein
1
See
Permanent Estate and Finance Co Ltd v
Johannesburg City Council
1952 (4) SA
249
(W) at 258A–F, recently applied by this court in
Municipality of Stellenbosch v
Shelf-line 104 (Pty) Ltd
2012 (1) SA
599
(SCA) para 28.
2
See,
in this regard,
Municipality of
Stellenbosch v Shelf-Line 104 (Pty) Ltd
(supra)
paras 31-33.
3
Municipality
of Stellenbosch
(supra) paras 21 and
31,
Estate Breet v Perry Urban-Areas
Health Board
1955 (3) SA 525(A)
at
531C–D.
4
See,
in this regard,
Municipality of
Stellenbosch v Shelf-Line 104 (Pty) Ltd
(supra)
paras 20-22; para 28.
5
See,
in this regard,
City of Cape Town v
Helderberg Park Development (Pty) Ltd
2008
(6) SA 12
(SCA) paras 7-11.
6
See
ABSA Bank Bpk v Janse van Rensburg
2002 (3) SA 701
(SCA) para
15
; Rectifier and Communication Systems (Pty) Ltd v Harrison &
others
1981 (2) SA 283
(C) at 289H.