Brief Summary

Municipal Law — Occupancy Certificate — Review of decision to issue occupancy certificate — Applicant sought to set aside occupancy certificate for Mangaung Intermodal Transport Facility, alleging health hazards due to insufficient ventilation and noxious gas emissions — Respondent contended that the application was moot as the facility had not been operational since 2011 and that the attorney lacked authority to settle the dispute — Court found no reasonable interpretation of the correspondence indicated a compromise of the dispute and dismissed the application to set aside the occupancy certificate.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an application for judicial review of an administrative act under the Promotion of Administrative Justice Act 3 of 2000 (PAJA), directed at the respondent municipality’s decision to issue an occupancy certificate for a public transport facility in Bloemfontein. In addition, the applicant sought (as main relief) enforcement of an alleged settlement arrangement, alternatively a declarator that the underlying dispute had been compromised.

The parties were Ejalk CC (applicant), a close corporation operating in financial intermediation, insurance, real estate and business services, and Mangaung Metropolitan Municipality (respondent), the local authority responsible for the building and for issuing the occupancy certificate.

The application was originally issued in September 2017. The applicant initially sought an extension of time to bring the review and an order reviewing and setting aside the occupancy certificate issued on 31 October 2011. In August 2021, the applicant amended its notice of motion: the review relief became alternative relief, while the primary relief became an order making an alleged agreement between the parties an order of court under Uniform Rule of Court 41(4), alternatively a declarator that the dispute was compromised on the terms set out in the amended notice of motion.

The dispute concerned the lawfulness and validity of the occupancy certificate issued for the Mangaung Intermodal Transport Facility in the Bloemfontein CBD, with the applicant alleging that inadequate ventilation would allow harmful vehicle emissions (particularly carbon monoxide) to reach unsafe levels, rendering occupation dangerous and the issuing of the certificate unlawful.

2. Material Facts

The facility (also described as the “building” or “intermodal transport facility”) was built as a public transport hub intended for public transport vehicles to park, load and unload passengers, and to replace the existing taxi rank in the Bloemfontein CBD. After completion, the respondent issued an occupancy certificate on 31 October 2011 in respect of the building situated at Erf 26753, Bloemfontein. The certificate was issued under section 14 of the National Building Standards Act 103 of 1977, read with the National Building Regulations and Directives made under the Act.

The applicant alleged it had a direct and substantial interest because it was a tenant of the premises under a lease agreement concluded with the respondent on 28 November 2008, and it sublet portions to entities including a doctor, dentist, pharmacy and optometrist. The applicant’s case, as relied upon by the court for purposes of identifying the dispute, was that the building posed a health threat to the public because of allegedly inadequate ventilation and the potential accumulation of noxious gases from idling vehicles.

A significant factual dispute existed regarding whether the building’s ventilation was adequate and compliant. The applicant relied on expert reports, including a report by Mr BJP Rossouw (a mechanical engineer) concluding the ventilation was inadequate and posed a health threat, and a report by Dr Y Swart (a medical doctor with public health qualifications) addressing health risks associated with exposure to emissions and concluding the occupancy certificate should be withdrawn. The respondent disputed these conclusions and relied on confirmatory affidavits from members of the professional team involved in the building’s design, including evidence that the facility was designed for natural ventilation through openings compliant with SANS 10400-1990, and that mechanical extract fans were intended for smoke removal in a fire situation, not ordinary ventilation.

There was also a dispute relating to the status and effect of correspondence about conducting tests. The applicant relied on a “tender” recorded in the replying affidavit (attested on 19 February 2018) proposing that the applicant would fund tests to determine whether noxious gases exceeded safe limits and whether ventilation was sufficient, with costs consequences depending on the result. The applicant later relied on correspondence: its attorneys wrote on 29 June 2018 proposing testing (identifying Dr DJ van den Heever as an expert), followed by reminders on 27 July and 15 August 2018. The respondent’s then attorneys replied on 27 August 2018, indicating instructions had been received that the tests could proceed and confirming the applicant would be responsible for the costs of the tests and associated costs, and enquiring when the tests could be conducted. The applicant contended this amounted to acceptance of its proposal and a compromise of the dispute; the respondent denied any settlement or compromise and contended, in any event, that the correspondence could not be interpreted as settling the review dispute.

The respondent raised, as part of its opposition relevant to the court’s procedural approach, that the application was brought late under PAJA and that the facility had not been operating for its intended taxi-rank purpose since 2011 (save for a “test run” in 2012), contending the review was moot or academic. The applicant alleged it had not previously known the certificate was unlawful and referred to incidents such as people fainting and unpleasant conditions in the building, stating it only appreciated the unlawfulness after consulting experts.

3. Legal Issues

The court was required to determine, first, whether the applicant had established an enforceable settlement agreement or compromise on the terms set out in the amended notice of motion, such that it could be made an order of court under Uniform Rule 41(4) or declared to have compromised the dispute.

Second, the court had to decide whether the PAJA 180-day time period for launching the review should be extended (condonation), which required an evaluative determination in the interests of justice, including consideration of the explanation for delay and the public interest implications.

Third, the court had to decide how to deal procedurally with the merits of the review—namely the challenge to the lawfulness of issuing the occupancy certificate—given that the relief sought (review and setting aside) was final in nature and the papers disclosed material factual disputes concerning ventilation adequacy and health risks. This raised questions of application of law to contested facts and the appropriate procedural mechanism (final relief on affidavit, dismissal under the motion proceedings approach, or referral to trial), particularly in light of recent Constitutional Court guidance.

4. Court’s Reasoning

On the alleged settlement/compromise, the court examined the correspondence relied on by the applicant and concluded that, on a reasonable interpretation, it did not amount to a compromise of the dispute. The court accepted the respondent’s contention that the correspondence did not reflect an agreement resolving what would happen if the tests supported the applicant’s version. In particular, the court found no basis to infer that the respondent agreed—depending on the outcome of testing—that the occupancy certificate would be withdrawn or set aside. The reply of 27 August 2018 was interpreted as permitting tests to proceed and dealing with responsibility for the costs of testing, rather than as an agreement settling the review dispute. The court therefore dismissed the main relief seeking to enforce the alleged agreement or declare a compromise.

Although the respondent disputed its attorney’s authority to settle, the court stated it was unnecessary to decide that question given the conclusion that no settlement had been established on the content of the correspondence. The court nonetheless indicated that, had it been necessary, it would “in all probability” have found the attorney had authority, referring to Hlobo v Multilateral Motor Vehicles Accident Fund 2001 (2) SA 59 (SCA).

On the PAJA delay, the court approached the question with reference to authority recognising that a litigant cannot necessarily be expected to rush to court without investigating whether there is a case to bring. The court referred to Joubert Galpin Searle v Road Accident Fund 2014 (4) SA 148 (ECP), including the proposition that antecedent investigations may take time and that attempts to settle disputes may delay litigation. The court also referenced South African National Roads Agency Ltd v City of Cape Town 2017 (1) SA 468 (SCA) as an example where a delay was condoned in the interests of justice.

The court then framed the issue in public-law terms by adopting the principle that public bodies may act only when justified by positive law, citing R v Somerset County Council, ex parte Fewings and Others [1995] 1 All ER 513 (QB). The court emphasised the respondent’s role as a public body responsible for public safety. It reasoned that refusing condonation or dismissing the case purely because of the time lapse could fail to address potential prejudice to the public and could create the perception that any building shortcomings were effectively condoned by the court. Because the matter concerned a facility intended for public use, and because the true facts about safety needed adjudication, the court exercised its discretion to extend the time period for bringing the review to the date on which service of the application was effected.

On the merits of the review and the presence of factual disputes, the court recognised that the relief sought (review and setting aside) was final in effect and invoked the well-known motion proceedings approach from Plascon-Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A). It noted that final relief may be granted on affidavit only if the admitted facts together with the respondent’s version justify the order, unless the respondent’s denials are so untenable that they can be rejected on the papers.

However, the court considered the Constitutional Court’s recent guidance in Mamadi and Another v Premier of Limpopo Province and Others [2022] ZACC 26 regarding review proceedings, stating that it is inappropriate simply to dismiss a review application on the basis of Plascon-Evans where disputes of fact cannot easily be resolved on the papers. The court connected this to the section 34 constitutional right to have disputes decided in a fair public hearing.

Applying these principles, the court held that the disputes in this matter fell within the category where a final determination could not responsibly be made on the papers, but also should not simply be dismissed. The court regarded a referral to trial as the appropriate procedural outcome on the remaining question, namely the validity of the issuing of the occupancy certificate. The court explained that trial procedures would allow experts to inspect and investigate in a way facilitated by the rules, to reach joint conclusions where possible, narrow the expert disputes, and permit a trial court to resolve the issues after hearing evidence.

On costs, the court treated costs as discretionary and considered it appropriate that costs should stand over for determination at the eventual trial.

5. Outcome and Relief

The court dismissed the applicant’s main relief based on the alleged agreement/compromise and the request to make it an order of court.

The court granted an extension of time for bringing the PAJA review, extending the period for applying to review and set aside the decision to issue the occupancy certificate to the date on which service of the application was effected.

The court referred the decision to issue the occupancy certificate dated 31 October 2011 to trial. It directed that the applicant’s founding affidavit would stand as a combined summons and that the respondent’s answering affidavit would stand as the plea, after which the Uniform Rules relating to further pleadings would apply.

The court ordered that costs stand over for later adjudication at the trial.

Cases Cited

Hlobo v Multilateral Motor Vehicles Accident Fund 2001 (2) SA 59 (SCA)

Joubert Galpin Searle v Road Accident Fund 2014 (4) SA 148 (ECP)

Scott and Others v Hanekom and Others 1980 (3) SA 1182 (C)

South African National Roads Agency Ltd v City of Cape Town 2017 (1) SA 468 (SCA)

R v Somerset County Council, ex parte Fewings and Others [1995] 1 All ER 513 (QB)

Plascon-Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A)

Mamadi and Another v Premier of Limpopo Province and Others [2022] ZACC 26

Legislation Cited

National Building Standards Act 103 of 1977, section 14

Promotion of Administrative Justice Act 3 of 2000

Constitution of the Republic of South Africa, 1996, section 34

Rules of Court Cited

Uniform Rules of Court, Rule 41(4)

Uniform Rules of Court, Rule 53

Held

The court held that the correspondence relied upon by the applicant did not constitute a settlement agreement or compromise of the dispute, and therefore the relief seeking to have such an agreement made an order of court (or declared a compromise) was not established and had to be dismissed.

The court held that, notwithstanding the lapse of time since the issuing of the occupancy certificate, it was in the interests of justice—particularly given the public-safety implications and the respondent’s role as a public body—to extend the period for bringing the PAJA review to the date of service of the application.

The court held that the review could not properly be finally determined on the papers due to material disputes of fact, and that it would be inappropriate simply to dismiss the review on motion proceedings principles. The validity of the issuance of the occupancy certificate was therefore referred to trial, with affidavits standing as pleadings and costs reserved.

LEGAL PRINCIPLES

A public body may exercise powers only where justified by positive law, reflecting a foundational distinction between the legal position of public authorities and private persons. This principle informed the court’s approach to a challenge directed at a municipality’s decision concerning public safety and regulatory compliance.

In a PAJA review, the statutory time bar is not applied mechanically; a court may extend the period where the interests of justice require it, particularly where the dispute implicates significant public concerns and where refusal would risk leaving potentially unlawful administrative action effectively unexamined.

Where final relief is sought on affidavit and material disputes of fact exist, the Plascon-Evans approach ordinarily governs whether final relief can be granted on the papers. However, in review proceedings, and especially where disputes of fact cannot fairly or readily be resolved on affidavit, a court is not confined to either granting or dismissing the application; consistent with constitutional fair-hearing requirements (section 34) and recent Constitutional Court guidance, the court may adopt a procedural course such as referral to trial to ensure proper adjudication on evidence.

Costs remain within the court’s discretion, and where a matter is referred to trial because merits cannot be decided on affidavit, it may be appropriate for costs to stand over for determination by the trial court.

Ejalk CC v Mangaung Metropolitan Municipality (5073/2017) [2022] ZAFSHC 189 (3 August 2022)