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[2016] ZAKZPHC 24
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Hibiscus Coast Municipality v Margate Amusement Park (Pty) Ltd and Another (AR215/2015) [2016] ZAKZPHC 24 (25 February 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: AR215/2015
KZN/DBN
CASE NO: 5461/2007
DATE:
25 FEBRUARY 2016
In
the matter between:
HIBISCUS
COAST
MUNICIPALITY
.............................................................................
APPELLANT
And
MARGATE
AMUSEMENT PARK (PTY)
LTD
...................................................
1
ST
RESPONDENT
MINISTER
OF PUBLIC
WORKS
........................................................................
2
ND
RESPONDENT
Coram
: Jappie JP, van Zyl et Henriques JJ
Heard
: 3 February 2016
Delivered
: 25 February 2016
ORDER
On
appeal to the full court of appeal from the KwaZulu-Natal Division of
the High Court, Durban (Radebe J, sitting as a court of
first
instance):
Condonation
Application
1.
The late filing of the notice of appeal by the appellant is condoned.
2.
The appellant is directed to pay the costs occasioned by the
application for condonation.
Appeal
1. The appeal is
upheld with costs, including that of the applications for leave to
appeal and the costs of two counsel where employed.
2. The whole of
the judgment and orders of Radebe J granted on 28 February 2012 are
set aside.
3. The first
respondent is directed to vacate by 29 February 2016, the premises
currently utilized as the Margate Amusement Park
and more fully
described as a portion of the seashore, in extent [4.........] meters
square, which is situate to the south of the
lagoon adjacent to Lot
[3......], in the Township of [M........], City of [A.......],
Province of KwaZulu-Natal.
4. The First
Respondent is directed to pay the costs of the proceedings in the
court
a quo
, including all reserved costs, save for the costs
in the main application up to 11 October 2010, which costs remain as
per paragraph
5 of the order of Ndlovu J.
JUDGMENT
HENRIQUES J:
Introduction
[1]
This is an appeal against the entire judgment and orders granted by
Radebe J on 28 February 2012 in which she dismissed
the application
for the eviction of the first respondent and granted orders upholding
the first respondent’s counter application
and directed the
appellant to pay the first respondent’s costs of the counter
application including the reserved costs of
11 October 2010.
[2]
A preliminary matter which requires attention is the application for
condonation for the late filing of the appellant’s
Notice of
Appeal. A formal application for condonation has been made and
the appellant has, on an affidavit, explained the
reasons for the
delay in filing the notice of appeal. Having considered this
explanation and the appellant’s prospects
of success in the
appeal, we are satisfied that the application for condonation ought
to be granted.
[3]
The first respondent’s legal representatives have, by way of a
letter dated 15 December 2015, informed the court it will
not oppose
the appeal, is aware of the date for the hearing of the appeal and
has indicated it will abide the decision of this
court.
[4]
I do not propose to traverse in detail the judgment of the court
a
quo
and deal with all the misdirections and grounds of appeal
relied on by the appellant as these are a matter of record. I
propose
to deal only with two findings of the court
a quo
which, in my view, are decisive of the appeal.
Issues
decisive of the appeal
[5]
The issues which in my view are decisive of the appeal are the
following:-
[5.1] Was the
appellant entitled to an order for the eviction of the first
respondent when the matter served before Radebe J.
Of relevance
to the determination of this issue is the effect of the orders of
Ndlovu J of 11 October 2010, the court
a quo
finding that the
appellant had abandoned its original claim for the eviction of the
first respondent and had through its conduct
negotiated a new lease.
[5.2] Whether
the appellant’s decision to terminate the first respondent’s
sub-lease and the notice to vacate, amounted
to administrative action
requiring compliance with PAJA.
[6]
Before dealing with these issues, it is useful to set out the events
which occurred prior to the matter serving before Radebe
J.
[7]
In May 2007, the appellant instituted an application for the eviction
of the first respondent from the premises utilized as
the Margate
Amusement Park (the premises) as a consequence of the contract of
sub-lease terminating. Such proceedings were
opposed by the
first respondent who filed a counter application. In such
counter application the first respondent submitted
that the decision
to terminate the sub-lease and effect the closure of the premises be
set aside. This was because such decision
constituted administrative
action as defined in the Promotion of Administrative Justice Act 3 of
2000 (PAJA) and there had been
procedural non-compliance with the
provisions of s3 of PAJA. In addition it sought to declare
invalid the notice by the appellant
to the first respondent dated 5
October 2005 directing it to vacate the premises.
[8]
The application served before Ndlovu J on 11 October 2010 on the
opposed motion court roll. Ndlovu J issued the following
order:
“
1.
That a declaratory be and hereby issued that the lease between the
Applicant and the first Respondent pertaining to the premises
referred to in paragraph 1 of the Notice of Motion shall terminate on
31
st
October 2010.
2.
That the Notice of Motion be amended by adding the relief in
paragraph (1) above as paragraph 5 of the Order sought.
3.
That the Applicant be given leave to approach the Court on ten (10)
days’ notice to the 1
st
Respondent on the same Court
papers duly supplemented as far is necessary for an order ejecting
the 1
st
Respondent from the said premises.
4.
That the 1
st
Respondent’s Counter-application and
Interim application in terms of Rule 30 (A) are adjourned
sine
die.
5.
That each party is to bear its own costs in respect of the main
application.
6.
That the costs of the 1
st
Respondent’s
Counter-application and Interlocutory application in terms of Rule 30
(A) are reserved.”
[9]
The parties were at idem that paragraph 7 as reflected in the order
of 11 October 2010 was not granted by Ndlovu J
[1]
.
[10]
Subsequent to Ndlovu J’s order being granted, the first
respondent through its legal representative initiated
discussions.
The request on compassionate grounds was for the first respondent to
be allowed an additional time to vacate
the premises. The
appellant agreed to an extension in effect allowing the first
respondent to continue to occupy the property
until 31 January 2011
in order to trade over the Christmas period. With effect from 1
February 2011 the first respondent would
cease all trading activities
and dismantle and remove all equipment and hand over vacant
possession of the property to the appellant
on 1 March 2011. A
resolution of the Council of the appellant was obtained confirming
the eviction application could be resolved
on this basis and the
first respondent granted an extension of time within which to vacate.
[11]
In addition the appellant’s attorney prepared a settlement
agreement as well as a confession to judgment in terms
of rule
31(1). The first respondent did not sign the settlement
agreement or the confession to judgment and failed to vacate
the
premises. Numerous written requests were addressed to the first
respondent requesting it to vacate. On 2 March 2011,
the first
respondent intimated that it had no intention of vacating the
premises despite the settlement discussions.
[12]
The appellant in compliance with paragraph 3 of Ndlovu J’s
order, approached court and filed supplementary
affidavits for an
order seeking to evict the first respondent from the premises.
In addition it sought an order dismissing
the first respondent’s
counter application and an order for the first respondent to pay the
costs thereof. This is
what served before Radebe J.
[13]
In dismissing the application for the eviction of the first
respondent, the court
a quo
found that a ‘new’
lease agreement had been negotiated and concluded between the
parties. This ‘new’
lease was sanctioned by the
Council of the appellant and in addition the appellant demanded and
was paid rental for the period
of the new lease. As a
consequence, the original claim was abandoned and the appellant could
not now supplement its papers
claiming the eviction of the first
respondent.
[14]
These findings of the court
a
quo
are incorrect and in my view ignore the effect of the order of Ndlovu
J. The effect of the declaratory order issued by Ndlovu
J was
to resolve the issue in the eviction application namely whether the
first respondent’s sub-lease had terminated and
when. The
appellant would be entitled on the basis of that order to evict the
first respondent had it remained in occupation
of the premises after
31 October 2010. It could approach the court, on ten days
notice to the first respondent once it had
supplemented its papers in
the original application for its eviction as the first respondent’s
right to occupy terminated
when the contract of sub-lease ended.
[2]
This issue was
res
judicata
[3]
and could not be revisited by Radebe J.
[15]
The discussions which occurred after Ndlovu J‘s order and which
resulted in the extension of the time period within
which the first
respondent had to vacate, did not result in a new cause of action.
This was an indulgence granted by the
appellant to the first
respondent and merely afforded the first respondent more time within
which to vacate the premises.
The payments for its continued
occupation constituted the equivalent of occupational damages.
The resolution of the Council
of the appellant to afford the first
respondent additional time to vacate was clearly necessary as Ndlovu
J’s order meant
that the first respondent’s sub-lease had
expired with the effluxion of time on 31 October 2010 and it was
seeking an indulgence
which had to be sanctioned by the Council.
It constituted no more than an extension of the time period within
which it had
to vacate.
[4]
[16]
Properly interpreted,
[5]
paragraph 3 of the order of Ndlovu J merely entitled the appellant to
approach the court as a consequence of non-compliance with
the
declaratory order and not the original
lis
between
the parties.
[6]
[17]
In upholding the counter application, the court
a quo
in
essence found that the decision to evict the first respondent was an
administrative decision and had to follow the requirements
of PAJA as
it was for the benefit of the ‘public’ and the decision
was taken by the appellant exercising a public power.
It was of the
view that the appellant “was required to act fairly when
exercising powers derived from a contract”.
[18]
At paragraph 35 of the judgment the court
a quo
concluded “
The Applicant’s decision to terminate the lease constitutes
administrative action. It follows that it is reviewable in
terms of PAJA. It cannot be dealt with in terms of the
principles of the law of contract. The decision of the
Applicant
to effect the closure of the amusement park situate on the
premises is reviewable in terms of PAJA and stands to be set aside,
for the reasons of failure to comply with requirement for procedural
fairness; for the reasons that it fails to meet the test of
objective
rationality; is taken on reliance on wrong principles, namely those
of the law of contract; had been influenced by unsubstantiated
considerations of an alleged state of disrepair of the amusement
park; and, the applicant’s state of dissatisfaction with
the
condition of the amusement park was based on a notion of subjectivity
rather to that of reasonableness.
”
[19]
In my view the court
a
quo
erred in this finding. As already mentioned the first respondent
occupied the premises by virtue of a contract of sub-lease.
The
issue became
res
judicata
once the declaratory order had been issued by Ndlovu J. It is now
settled law that the decision by the appellant to terminate its
contract with the first respondent does not amount to administrative
action. Such decision of the appellant to terminate the contract
of
the first respondent, although made by an organ of State, does not
constitute administrative action and thus PAJA does not apply.
[7]
[20]
It was thus not open to the court
a quo
to find that the
appellant had to act in a ‘procedurally fair’ manner when
terminating the contract of sub-lease. Similarly,
the notice to the
first respondent requiring it to vacate the premises is not invalid
as it does not constitute administrative
action envisaged in PAJA.
[21]
It follows that the court
a quo
’s findings in this
regard were incorrect and the appeal must succeed. In the premises
the appellant is entitled to orders
upholding the appeal and setting
aside the entire judgment and orders of Radebe J of 28 February 2010.
[22]
There is also no reason why the appellant ought not to be awarded the
costs of the appeal and the costs reserved on 11
October 2010 by
Ndlovu J in respect of the counter-application and the interlocutory
application.
[23]
In the premises the following orders are made:
Condonation
Application
1. The late
filing of the notice of appeal by the appellant is condoned.
2. The appellant
is directed to pay the costs occasioned by the application for
condonation.
Appeal
5. The appeal is
upheld with costs, including that of the applications for leave to
appeal and the costs of two counsel where employed.
6. The whole of
the judgment and orders of Radebe J granted on 28 February 2012 are
set aside.
7. The first
respondent is directed to vacate by 29 February 2016, the premises
currently utilized as the Margate Amusement Park
and more fully
described as a portion of the seashore, in extent [4......] meters
square, which is situate to the south of the
lagoon adjacent to Lot
[3.......], in the Township of [M.......], City of [A......],
Province of KwaZulu-Natal.
8. The First
Respondent is directed to pay the costs of the proceedings in the
court
a quo
, including all reserved costs, save for the costs
in the main application up to 11 October 2010, which costs remain as
per paragraph
5 of the order of Ndlovu J.
JAPPIE
JPI agree
VAN
ZYL J
Date of
Hearing : 3 February 2016
Date of
Judgment : 25 February 2016
Counsel for
Appellant : K J Kemp SC (assisted by S I Humphrey)
Instructed by
: Seethal Attorneys
c/o Stowell &
Co.
295
Pietermaritz Street, Pietermaritzburg
Ref:
G J Campbell/SEE9/0018/CW
[1]
The
word “order” appears to have been omitted from paragraph
1 of the order.
[2]
Premier,
Eastern Cape and Another v Sekeleni
2003(4) SA 369 SCA
[3]
Eke
v Parsons
[2015] ZACC 30
para 31
[4]
Barnard
v Thelander
1977
(3) CPD 933
at 940
[5]
Eke
supra para 29;
Ansafon
(Pty) Ltd v The Master, Northern Cape Division
[2014]
ZASCA 170
(14 November 2014) para 9,
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) para 18
[6]
Eke
supra para [36]
[7]
Government
of the Republic of South Africa v Thabiso Chemicals (Pty) Ltd
[2008] ZASCA 112
;
2009
(1) SA 163
SCA para 18;
City
of Tshwane v Nambiti Technologies (Pty) Ltd
2015 ZASCA 167
(26 November 2015) para 34