About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2011
>>
[2011] ZAKZPHC 49
|
|
Steyn's Funworld CC v Ethekwini Municipality (AR21/11) [2011] ZAKZPHC 49 (26 August 2011)
IN THE KWAZULU-NATAL HIGH COURT,
PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA
Case
No: AR21/11
In
the matter between:
STEYN’S
FUNWORLD CC
…............................................................................
Appellant
and
ETHEKWINI
MUNICIPALITY
….....................................................................
Respondent
JUDGMENT
SEEGOBIN
J
[1] This is an appeal, with leave of
the trial court (Norman AJ), against the whole of her judgment
delivered on 13 May 2010.
[2] The preliminary question to be
decided in this appeal is whether it should be entertained at all. As
appears from what follows
the factual background against which this
question arises can be stated quite simply.
[3] The undisputed facts are: The
appellant had leased certain land owned by the respondent along the
Durban beach front. The lease
in question was a long lease (twenty
five (25) years) which commenced on 1 May 1992 and is due to expire
on 30 April 2019 without
any right of renewal. A Notarial Deed of
Lease (“the lease agreement”) to this effect was
registered on 31 March 1994.
The main purpose of the lease agreement
was to allow the appellant to operate an amusement park and all other
activities associated
therewith on the land concerned.
[4] In preparation for the 2010 FIFA
World Cup Tournament which was due to commence on 11 June 2010, the
respondent embarked on
a project known as the “
Dairy Beach
Node Redevelopment
”. The Dairy Beach was an area identified
by the respondent as requiring substantial attention to meet public
demand for secure,
neat and attractive recreational amenities and
access to the Durban beachfront. This redevelopment would of
necessity involve a
portion of the leased property which is located
in Dairy Beach between O.R. Tambo Parade (formerly Marine Parade) and
the beachfront.
[5] One of the objectives sought to be
achieved by the redevelopment was to provide covered stalls to
accommodate twenty one (21)
traders who were trading opposite the
Protea Edward hotel on O.R. Tambo Parade. The overall aim of the
respondent was to ensure
that by the time the redevelopment was
completed, all two hundred and fifty two (252) traders on the
beachfront would be suitably
accommodated with the twenty one (21)
traders referred to above occupying a portion of the land leased to
the appellant. The respondent
also envisaged that if these
improvements were completed timeously, this would contribute greatly
to the city’s economic
growth and benefit everyone including
the business of the appellant.
[6] With these aims and objections in
mind, the respondent commenced as early as February 2008, advising
the appellant of the proposed
redevelopment and invited the appellant
to discuss the actual area to be excised from the leased portion for
this purpose. The
appellant was also provided with the plans which
depicted the area to be excised. Some time in February 2010 the
appellant recorded
its attitude to the redevelopment and the negative
impact this would have on its business. It accordingly requested an
amount of
R1.5 million from the respondent as financial assistance
due to the proposed redevelopment. It seems that at some stage it
even
approached the respondent for a reduction of rental due to the
loss of income it would allegedly suffer as a result of the
redevelopment.
[7] By March 2010 it was clear that
the appellant was not prepared to allow the respondent the right to
excise a portion of the
leased property in order to give effect to
its redevelopment plans. With the World Cup looming, the respondent
decided to invoke
the provisions of Clause 26 of the lease agreement
by issuing a notice on 17 March 2010 in terms of which it,
inter
alia
, notified the appellant that it intends partially cancelling
the lease in respect of six hundred and seventy six square meters
(676m²) of the property for public purposes. It is this notice
which triggered an urgent application by the appellant on 25
March
2010 in terms of which the appellant sought an interim order which,
inter alia
, interdicted the respondent from interfering with
the appellants use and enjoyment of the leased premises and staying
“
all expropriation proceedings
” pending the
finalisation of the matter.
[8] An interim order was obtained by
consent of the parties with the return date being 7 April 2010. On 6
April 2010, and on an
urgent basis, the respondent brought a
counter-application in which it sought,
inter alia
, a
discharge of the rule
nisi
granted on 25 March 2010, an order
directing the appellant to vacate the excised portions of the leased
property, an order for
cancellation of the lease insofar as the
excised portions were concerned and an order allowing the appellant
to exercise its right
to claim compensation from the respondent in
terms of Clause 26 of the lease agreement.
[9] The matter came before Norman AJ
on 13 May 2010. After hearing argument the learned acting judge
granted an order in favour
of the respondent in terms of paragraphs
(a), (b), (c), (e) and (f) of its counter-application and indicated
that she would provide
reasons for the said order before the end of
that week. Her full reasons were duly delivered on 21 May 2010.
[10] The primary dispute in the court
a quo
turned on the correct interpretation to be placed on the
provisions of Clause 26 of the lease agreement. To place matters in
perspective
it is perhaps necessary to set out the full text of
Clause 26 which reads:
“
26.
Expropriation
In
the event of the land hereby demised, or any portion thereof, being
required for any purpose in respect of which the City Council
is
vested under any Law or Ordinance with powers of expropriation, the
City Council may cancel this lease, entirely or in respect
of the
required portion thereof, upon notice in writing, to the Lessee and
shall pay to the Lessee as compensation such amount
representing the
value of all fixed assets erected by or on behalf of the Lessee which
cannot be readily removed, as may be determined
by mutual agreement,
or failing mutual agreement by arbitration in terms of the
Arbitration Act 1965 (Act 42 of 1965)
.”
[11] The respondent’s notice
dated 17 March 2010, the validity of which was placed in issue by the
appellant in the court
a quo
, read as follows:
“
You
are hereby notified that the Municipality intends partially canceling
your lease under Notarial Deed of Lease K264/94L as amended
to the
extent indicated under and as depicted on the attached Plan SJ4582/10
–
All
your rights of use and enjoyment in and to 575m² of Lease 66 on
Erf 12281, Durban.
All
your rights of use and enjoyment in and to Lease 66 on Erf 12881,
Durban above 5.25 meters msl in extent 320m². Your
lease of the
staff change rooms and ablutions located below ground level will not
be affected.
The
cancellation of the lease rights will take effect on 23 March 2010
from which date the Municipality will assume occupation of
the
cancelled lease areas.
Your
lease of the areas of land in question is cancelled in terms of
Clause 26 of the Notarial Deed of Lease K264/94L, as amended,
for
public purposes.
Please
be advised that the perimeter fence will be relocated to the new
boundary identified as E,F,G,H,L,M,N,P,Q,R,S,U,V,W,X,Y,Z,A1,B1
on the
attached SJ Plan, and the emergency exit from the change rooms will
be realigned to ensure that this is located entirely
within the
remaining lease area. This work will be undertaken at the cost of the
Municipality.”
[12] The appellant’s case both
in the court
a quo
and in this court was that the respondent’s
notice was intended to be a notice of expropriation in which case the
respondent
was obliged strictly to invoke the procedures set forth in
the Expropriation Act No.63 of 1975. The respondent’s case on
the other hand was that Clause 26 was nothing more than a reservation
of its rights to reclaim the entire property or to excise
a portion
thereof in terms of the agreement at any time prior to its
termination by effluxion of time for certain defined reasons.
It
contended that the notice of 17 March 2010 constituted a notice of
partial cancellation of the lease agreement and not an expropriation
notice as required in terms of the Expropriation Act.
[13] Having considered the arguments
advanced by the respective parties on the construction to be placed
on the provisions of both
Clause 26 of the lease agreement as well as
the respondent’s notice dated 17 March 2010, the learned Judge
a quo
concluded that the notice was nothing more than a notice
of cancellation which the respondent was entitled to deliver in terms
of Clause 26. It was not a notice of expropriation. From her judgment
it appears that this finding was essentially based on the
following
considerations. First, the provisions of Clause 26 were agreed to by
the parties when the lease agreement was concluded.
Second, Clause 26
authorised the respondent to cancel the lease agreement in its
entirety or in respect of a portion thereof for
“
any
purpose
”. Third, the clause entitled the respondent to
act as it did without first having to obtain the consent of the
appellant
or having to comply with the procedural requirements set
out in the Expropriation Act. Fourth, the respondent had proved that
the
purpose for which a portion of the land was required was for a
public purpose and/or in the public interest.
[14] Shortly prior to the appeal being
heard on 10 August 2011, the parties were requested to make
submissions in terms of section
21A(1) of the Supreme Court Act 59 of
1959 (“the Act”). Section 21A(1) of the Act reads:
“
(1)
When at the hearing of any civil appeal to the Appellate Division
[Supreme Court of Appeal] or any Provincial or Local Division
of the
Supreme Court [High Court] the issues are of such a nature that the
judgment or order sought will have no practical effect
or result, the
appeal may be dismissed on this ground alone.
”
[15] It is well established that where
the relief sought on appeal is moot and would be of academic interest
only, the merits of
the appeal will not be entertained and the appeal
will be dismissed on that ground alone.
1
Section 21A however confers a
discretion on this court to deal with the merits of the appeal. This
would be done where an appeal
involves a question of law and which is
likely to arise again.
2
[16] The essential question for
determination in considering the provisions of section 21A(1) is
whether or not the appeal has any
practical effect.
3
It is accordingly necessary to
consider the context of the matter as it was at the time when the
application and counter-application
were instituted and subsequent
thereto.
[17] In supplementary heads filed on
behalf of the respondent, counsel for the respondent took the point
that the disputes which
arose between the parties and which resulted
in urgent applications being brought by both sides, were now of
academic interest
only and as such the appeal fell to be dismissed.
She further drew attention to the following facts which were common
cause in
the court
a quo,
viz: (a) the dispute had
arisen pursuant to a project to conduct extensive improvements at the
Dairy Beach Node; (b) the respondent
was obliged to undertake and
complete the work before the commencement of the 2010 FIFA World Cup
Tournament in June 2010, and
(c) there was a need to accommodate
twenty one (21) street vendors who required shelter. She further
submitted that in determining
the present issue, it was important to
have regard to what transpired after the decision of the court
a
quo
. It seems that
subsequent to the determination of the applications by the court
a
quo
but prior to the
application for leave to appeal and the commencement of the 2010 FIFA
World Cup, the parties agreed that some of
the work could be
undertaken and as such there would be no need for an application to
suspend the orders in terms of Rule 49(11)
of the Uniform Rules.
Thereafter the appellant permitted the respondent to occupy certain
portions of the disputed property and
to effect improvements thereto.
It was pointed out that to some extent these works were substantially
completed, in others they
were suspended due to these proceedings and
the rest is currently in progress. The shelters in particular have
been completed.
More importantly the 2010 FIFA World Cup Tournament,
the event giving rise to the need to redevelop the Dairy Beach Node
has passed.
In light of all this, it was submitted that the need to
properly interpret the provisions of Clause 26 and related issues of
urgency
in the counter-application were resolved which renders the
present appeal as having no practical effect.
[18] In supplementary heads of
argument filed on behalf of the appellant, the main contention
advanced was that “
the
appellant and public in general would want affirmation whether the
respondent’s conduct as alerted to should in general
be
sanctioned and/or scrutinized
”
.
It was further submitted,
inter
alia
, that “
the
appellant is desirous of having the expropriated portion returned to
it (this would follow were the above Honourable Court to
find in
favour of the appellant) and if the appeal fails; the respondent will
insist on the remaining portion being transferred/delivered
to it
.”
[19] The view I take of this matter is
that the practical result of the agreement [para.17
supra
]
concluded between the parties after the determination of the
applications by the court
a
quo
appears to be that they
have effectively resolved all their differences. The agreement
allowing the respondent to proceed with the
redevelopment on the
disputed portion of land was concluded before the commencement of the
2010 FIFA World Cup Tournament and certainly
before the appellant’s
application for leave to appeal was heard. In my view, there is
accordingly no longer any dispute
or
lis
between them. The circumstances giving
rise to the respondent’s plans to redevelop the Dairy Beach
Node no longer exist. The
appellant’s contention that the
merits of the appeal should be determined and if found to be in it’s
finding, would
allow the appellant to have the “
expropriated
”
portion returned to it, loses sight of
the fact that substantial changes have and continue to be effected to
the disputed portion.
[20] In my view, as matters presently
stand, there is no live issue which exists between the parties that
require resolution. The
appellant has not provided any evidence to
establish that a similar dispute, based on similar facts, will arise
in the future.
Whether or not the respondent will again in future
enforce its rights in terms of Clause 26 of the lease agreement is at
best speculative.
It is a known fact that “
courts
of appeal often have to deal with congested court rolls. They do not
give advice gratuitously. They decide real disputes
and do not
speculate or theorise ..”.
4
[21] In
National
Coalition for Gay and Lesbian Equality & Others v Minister of
Home Affairs & Others,
5
Ackerman J, referring to
JT
Publishing (Pty) Ltd & Another v Minister of Safety and Security
& Others
6
said the following at paragraph 21
(footnote 18):
“
A
case is moot and therefore not justiciable if it no longer presents
an existing or live controversy which should exist if the
Court is to
avoid giving advisory opinions on abstract propositions of law
.”
[22] I accordingly find that the
issues which were raised in the court
a quo
have now become
academic. The matter is clearly moot and no factual basis exists for
the exercise of this court’s discretion
to entertain the
appeal. It follows therefore that the appeal falls to be dismissed.
ORDER
[23] I accordingly make the following
order:
The appeal is dismissed with costs.
___________
___________
JAPPIE J
I agree
___________
KRUGER J
I agree
Date
of Hearing : 10 August 2011
Date
of Judgment : 26 August 2011
Counsel
for Applicant : Advocate U Lennard
Instructed
by : MP Lutge Inc.
c/o
Bhamjee Attorneys
Counsel
for Respondent : S Mahabeer
Instructed
by : Naidoo Maharaj Inc.
c/o Siva Chetty & Company
1
See:
Ethekwini Municipality v Combined Transport Services (115/10)
[2010]
ZASCA 158
(1
December 2010);
also: Port Elizabeth Municipality v Smit 2002(4) SA 241
(SCA); Radio Pretoria v Chairman, Independent Communications
Authority
of South Africa and Another 2005(1) SA 47 (SCA)
2
See:
Land & Landbouontwikkelingsbank van Suid Africa v Conradie
2005(4) S 506 (SCA)
3
See:
Premier, Provinsie Mpumulanga v Groblersdalie Staderaad
1998 (2) SA
1136
(SCA) at 1141 D-E
4
See:
Radio Pretoria v Chairman, Independent Communications Authority of
South Africa and Another,
supra
, at para. [41]
also
EThekwini Municipality v Combined Transport,
supra
, para.
[15]
5
2000(2)
SA 1 (CC)
6
1997(3)
SA 514 (CC)