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[1993] ZASCA 141
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Stands 5/1 Wierda Valley (Pty) Ltd and Another v Town Council of Sandton (126/1992) [1993] ZASCA 141; 1994 (1) SA 333 (AD); [1994] 1 All SA 411 (A) (27 September 1993)
LL
Case No 126/1992
IN THE SUPREME COURT OF SOUTH AFRICA APPELLATE DIVISION
In the matter between:
STANDS 5/1 WIERDA VALLEY
(PTY) LTD
First Appellant
STANDS 6/1 WIERDA VALLEY
(PTY) LTD
Second Appellant
and
THE TOWN COUNCIL OF SANDTON
Respondent
CORAM:
JOUBERT, VAN HEERDEN, NESTADT,
GOLDSTONE JJA et HOWIE AJA
HEARD
: 13
SEPTEMBER 1993
DELIVERED
: 27 SEPTEMBER 1993
JUDGMENT
VAN HEERDEN JA
:
2
During 1987 a private company and a close corporation (hereinafter
collectively referred to as the companies) were each the owner
of a property
situated within the municipal area of the respondent. Those properties were held
subject to certain restrictive conditions
and were zoned "Residential 1" in
terms of the Sandton Town Planning Scheme ("the scheme"). Towards the end of
1987 the companies
applied to the Administrator of the Transvaal for the removal
of the restrictive conditions as well as an amendment of the scheme
by a
rezoning of the properties to "Business 4" as defined in the scheme. The
application was made under s 2(1) of the Removal of
Restrictions Act 84 of 1967
("the Act") by one Jaspan on behalf of the companies. He was a partner of the
firm of Rosmarin and Associates
which specialised in town and regional
planning.
During 1989 one of the properties was sold
3
and transferred by the private company to the first
appellant, and the
other by the close corporation to
the second appellant. Subsequently the companies'
application was granted under s 2(1) of the Act.
Notice to this effect was
given in the Provincial
Gazette of 20 December 1989.
On 19 January 1990 the respondent sent two
registered letters to Rosmarin and Associates. For
present purposes the
letters are identical and I
therefore quote only the one relating to the property
then registered in the name of the first appellant:
"
SANDTON AMENDMENT SCHEME NO. 1181 : PORTION 5 OF ERF 1 WIERDA
VALLEY
Your application dated 11 November 1987 in the above regard refers.
As provided for in section 63 of the Town-planning and Townships Ordinance, 1986
the Owner is hereby requested to pay the following
contributions towards
external engineering services the particulars whereof are as
follows:
Water R6 137-82
Sewerage R4 163-25
Roads R38 064-00
4
Please note that the rights under this amendment scheme cannot be utilised until
the above amounts have been paid in full."
The
letters were received by the firm on 21 January 1990. Jaspan subsequently sent
the letters to the companies and copies thereof
to the appellants' holding
company. The appellants, through their attorney, then took up the stance that
neither of them was liable
to pay to the respondent the sum of R48 365,07.
However, in order to proceed with the development of the properties each
appellant
paid that amount under protest.
In March 1991 the appellants initiated motion proceedings against the
respondent in the Transvaal Provincial Division. They sought
an order declaring
that the respondent was not entitled to any contribution as provided for in s 63
of the Town-Planning and Townships
Ordinance 15 of 1986 (Transvaal) in
consequence of the amendment of the scheme;
5
alternatively an order that the directives contained
in the respondent's letters did not comply with the
requirements of s 63.
They also sought repayment of
the amounts paid under protest, interest
thereon and
costs. That application, which was opposed by the
respondent, was dismissed with costs by Hartzenberg J
who subsequently
granted the appellants leave to
appeal to this court.
S 2(3) of the Act, as it read in 1989,
provided as follows:
"When a restriction or obligation which is binding on the owner of any land by
virtue of a town-planning scheme is altered in terms
of subsection (1), the
provisions of any law on town-planning which is in force in the province in
which the land is situate and
which relates to the payment of a development
contribution, as contemplated in that law, shall apply as if such alteration
were an
alteration of the town-planning scheme in terms of that
law."
In so far as it is material s 63
of the
1986 Ordinance reads:
6
"(1) Where an amendment scheme which is an approved scheme came into operation
in terms of section 58(1), the authorized local authority
may, within a period
of 30 days from the date of the commencement of the scheme, by registered letter
direct the owner of land to
which the scheme relates to pay a contribution to it
in respect of the provision of
-
(a)
the engineering services contemplated in Chapter V where it will be
necessary to enhance or improve such services as a result of the
commencement of
the amendment scheme;
(b)
open spaces or parks
where the commencement of the amendment scheme will bring about a higher
residential density,
and it shall state in that letter -
(i) the amount
of the contribution; (ii) particulars of the manner in which the amount of the
contribution was determined; and (iii)
the purpose for which the contribution is
required."
The appellants' main contention, both in
the court a
quo
and in this court, was that the
phrase "development
contribution as contemplated in
that law" in s 2(3) of the Act does not
include a
7 contribution as provided for in s 63(1) (a) of the 1986
Ordinance. The main thrust of this contention was that the expression
"development
contribution" relates to a tax imposed by a law on townplanning,
and not to a contribution payable under such law for actual expenditure
which
will be incurred by a local authority because of the amendment of a townplanning
scheme.
At the time of the passing of the Act s 51 of the Town-planning and
Townships Ordinance 25 of 1965 (Transvaal) (since repealed) made
provision for
payment of a "development contribution". It prescribed that in the case of an
amendment, of a town-planning scheme
such a contribution was payable by the
owner of the property and that the contribution had to be levied by the local
authority concerned.
The amount of the contribution was initially 50% of the
difference between two appraisements or such
8 lesser percentage as the
Administrator might determine. The appraisements had to reflect the value of the
property immediately before
and after the day on which an amendment scheme was
approved by the Administrator (s 51(1), (2), (3) and (4)).
Reference should
also be made to some other provisions of the 1965 Ordinance. In terms of s 50
any expenditure incurred by a local
authority in connection with a townplanning
scheme could be met from
inter alia
a development contribution and a
townplanning fund referred to in section 52. 5 51(10) provided that a
development contribution could,
at the local authority's discretion, be used to
defray expenditure contemplated in s 50, or for such other purposes as the
Administrator
might approve, or might be credited to a townplanning fund. S 52
in turn empowered a local authority to establish such a fund and
to pay into it
the whole or any
9
portion of a development contribution (s 52(1) and (2)). That fund had to be
applied towards the preparation and implementation of
a townplanning
scheme.
Natal Ordinance 27 of 1949 made provision in s 62(1) for the recovery
of "betterment" by a "responsible authority". It prescribed
that where by the
coming into operation of any provision in a townplanning scheme (which would
have included a provision of an amended
scheme) any property was increased in
value, the "responsible authority" could recover from the owner of the property
an amount not
exceeding 75% of the extent of such increase. The expression
"development contribution" did not appear in s 62, but s 70 provided
that all
sums received by a responsible authority by way of betterment had to be applied
towards the discharge of any debt of that
authority or for any purpose for which
capital money
10 could be applied. The word "betterment" clearly denoted an
amount payable under s 62(1).
When the Act was passed the Free State
Ordinance relating to township and townplanning did not provide for the payment
of a contribution
as a result of the amendment of a townplanning scheme. But s
50 of the Townships Ordinance 33 of 1934 (Cape) stipulated for such
a payment
"[w]here by the coming into operation of any provision contained in a scheme . .
. any property is increased in value ..."
In such a case the local authority
concerned was empowered to levy an amount not exceeding fifty percent of the
amount of the increase
in value. The 1934 Ordinance did not, however, make
provision for an amendment of a townplanning scheme at the instance of the owner
of a property governed by the scheme. In terms of s 45 an application for such
an amendment had to be made by a local authority.
(A new s 35
ter
was
inserted
11
into the 1934 Ordinance by s 4 of Ordinance 25 of 1969, but the former
Ordinance was repealed by Ordinance 15 of 1985. For present
purposes it suffices
to say that the expression "development contribution" was introduced in the 1934
Ordinance only in 1969 but
has not been incorporated in the 1985
Ordinance.)
It was common cause that the expression "development
contribution" must be accorded the meaning it bore in 19 67 when the Act was
passed:
Finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein
1985 (4) SA 773
(A) 804D. At that date the expression occurred in only the 1965
Transvaal Ordinance. Since s 2(3) of the Act was clearly intended
to apply to
provisions regarding townplan-ning which were, or in the future might be, in
force in any of the provinces, there is
no justification for according the
expression in the Act the meaning it bore in the 1965 Transvaal Ordinance
merely
12
because the expression used in that Ordinance was repeated in the Act. That
much was conceded by counsel for the appellant. However,
he drew the following
distinctions between, on the one hand, a development contribution and betterment
as respectively provided for
in the 1965 Transvaal and the Natal Ordinances and,
on the other, the contribution ("engineering contribution") payable under the
1986 Transvaal Ordinance:
(1) A development contribution and betterment were
related to an increase in value of the property concerned as a result of amended
zoning rights, and not to an additional financial burden which might be incurred
by a local authority pursuant to an exercise of
those rights. An engineering
contribution, however, is not levied in the interest of development generally,
but represents the actual
costs which the local authority will have to
defray
13
when the amended rights are exploited.
(2)
A development contribution
and betterment did not have to be applied to defray such costs; the amounts
concerned were on the contrary
payable for the general weal of a townplanning
scheme. By contrast the 1986 Ordinance by necessary implication provides that an
engineering
contribution must be used to meet those
costs.
(3)
In terms of s 63(2) of the 1986
Ordinance an owner, who wishes to avoid the payment of an engineering
contribution levied by a local
authority, may request the local authority to
repeal the amendment scheme. Neither the 1965 Transvaal nor the Natal Ordinance,
however,
provided for an avoidance of payment of a development contribution or
betterment.
In view of these distinctions counsel
concluded that in contrast to an engineering contri-
14 bution a development
contribution and betterment possessed all the characteristics of a tax. Hence
the expression "development
contribution" in s 2(3) of the Act must be construed
as a contribution imposed by way of a tax or something analogous to a
tax.
That expression does not have a technical legal meaning. For that
matter, standing alone, it does not have an ordinary grammatical
meaning. In the
context in which it appears in s 2(3) of the Act, however, it relates
prima
facie
to
any
contribution in relation to development which would have
been payable in terms of a provincial law on townplanning if the amendment
of a
scheme had been effected under such a law.
I am prepared to assume that
counsel for the appellant correctly contrasted a development contribution and
betterment, payable under
the 1965
15 Transvaal Ordinance and the Natal
Ordinance, with an engineering contribution. I am also prepared to assume that
the former were
imposed by way of a tax. It does not follow, however, that the
expression in s 2(3) of the Act should be restrictively construed
so as to
exclude an engineering contribution.
Generally the aim of an application for
an amendment of a townplanning scheme is to develop the property in a manner not
permitted
by the existing scheme. Any such development may, of course, involve
the local authority in additional expenditure relating to
inter alia
services to be provided for the development. Whilst it is true that
contributions payable under the 1965 Transvaal Ordinance and
the Natal Ordinance
did not necessarily have to be applied so as to defray the cost of provision of
such services, the provincial
legislatures must have contemplated that as a rule
the contributions (or
16 part thereof) would have been so applied. The reason
why that was not prescribed was no doubt because it was realised that the
amount
of a contribution could exceed that cost. I therefore agree with the following
dictum
of Van Winsen J in
Davies v Administrator, Cape Province
1973 (3) SA 804
(C) 812B-D (pertaining to s 35
ter
of the 1934 Cape
Ordinance):
"Although Ord. 33 of 1934 contains no definition of 'development contribution'
it would seem clear from the context of sec. 35
ter
that it was intended
to represent a sum of money to be paid by the owner of property beneficially
affected, in this case by a re-zoning
of his property, to the local authority in
whose area the property was situate in order to alleviate in some measure the
costs to
be incurred by such authority in the supply of services to the property
and other similarly advantaged."
It
was no doubt because it was appreciated
that the payment of a development contribution under
the 1965 Transvaal Ordinance could prejudicially
affect either the owner of the property or the local
17 authority
concerned - because it could be more or less than the actual cost of
inter
alia
the provision of additional services - that the relevant provisions of
that Ordinance were not re-enacted in the 1986 Ordinance.
What was the
underlying purpose of those provisions therefore became the only purpose of the
corresponding provisions of the latter
Ordinance.
I agree with the court a
quo
that the object of the enactment of s 2(3) of the Act plainly was to
prevent the situation where payment of a contribution could
be avoided by an
amendment of a townplanning scheme under the Act whereas it would have been
payable had the application been granted
under a provincial law. When adopting
the expression in question the legislature therefore had in mind any
contribution relating
to development which would have to be made e g if a
rezoning had taken place under a provincial law, no matter how that contribution
falls
18 to be assessed. And since the 1986 Transvaal Ordinance does provide
that such a contribution may be exacted after a rezoning has
been granted, it
quite clearly constitutes a development contribution for the purposes of s 2(3)
of the Act. It would indeed be anomalous
if in terms of that subsection a
contribution could be exacted under the Natal and 1934 Cape Ordinances, as well
as the 1965 Transvaal
Ordinance, but not under the more equitable provisions of
the 1986 Transvaal and 1985 Cape Ordinances.
In conclusion, on this aspect of
the appeal, I should say that the legislative intent appears to me to be so
clear that it is not
permissible to have regard to an amendment of s 2(3) of the
Act brought about by s 2 of Act 84 of 1991.
I consequently conclude that by
virtue of s 2(3) of the Act an engineering contribution could be levied upon the
appellants, and now
turn to the
19 two grounds on which, in the appellants'
submission, the respondent's directives of 19 January 1990 did not comply with
the provisions
of s 63(1) of the 1986 Transvaal Ordinance.
The first ground
is that the directives were not sent to the appellants who at the relevant time
were the owners of the properties,
but to Rosmarin and Associates which firm was
not authorised by the appellants to receive such directives on their
behalf.
Now, should a local authority decide to levy an engineering
contribution under the 1986 Ordinance, s 63(1) does, of course, enjoin
that
authority to direct the owner of the property concerned by registered letter to
pay the contribution. The question therefore
is whether the sending of the
present directives to Rosmarin and Associates constituted compliance with that
subsection.
20
Counsel for the appellants submitted that the phrase "the owner of land to
which the scheme relates" in s 63(1) denotes the owner
at the time when an
amendment scheme comes into operation (either under s 58 of the Ordinance or
under s 2(1) of the Act), whilst
counsel for the respondent contended that the
phrase has reference to the owner who submitted the application for amendment of
the
scheme. In support of his submission counsel for the appellant argued that
on the day of coming into operation of the amended scheme
an obligation to pay
an engineering contribution arises, although it may only be quantified at a
later stage, and that it is consequently
the owner of the property at that stage
who incurs that obligation. Hence, so it was also argued, the provincial
legislature must
have intended that in terms of s 63(1) a directive should be
sent to the owner who became saddled with that liability.
21
This submission is unacceptable for the simple reason that no obligation
arises when an amendment scheme comes into operation. It
can only arise if the
local authority decides to levy an engineering contribution
and
if a
registered directive giving effect to that decision is posted within a period of
30 days from the date of commencement of such
a scheme. Thus, no obligation will
be incurred if the local authority decides not to - or forgets to - exact a
contribution, or if
for one reason or another fails to post the directive
timeously.
There is accordingly merit in the view that the oft-mentioned phrase pertains
to the. person who is the owner of the property when
the directive is sent off
by registered post. I find it unnecessary, however, to express a firm opinion on
this point. For if the
contention of the respondent should prevail, then it
clearly complied with the requirement
22
of s 63(1) under discussion. And if the above view
is correct, there was,
for the reasons that follow, also compliance with that requirement. I shall
therefore assume, in favour of
the appellant, that the "owner" for the purposes
of s 63(1) is the owner at the time when the registered directive is
posted.
S 63 does not provide that the owner of the property must be named in
the registered letter or that it must be sent to a specified
address. On the
contrary, the local authority is merely enjoined to direct the owner -
whomsoever he may be - to pay an engineering
contribution (that is, if it
decides to exact such a contribution). It is therefore not necessary to identify
the owner in the letter
- as was not done in the present case. The letter must,
of course, be sent to an address. An application for a rezoning under either
the
Act or the 1986 Ordinance will in the nature of things emanate from the
address
23
of either the owner of the property at that stage or his agent. Any letters
pertaining to the application will thus also be sent by
the local authority to
that address unless it has been notified of a change of address. So, for
instance, if a local authority wishes
to obtain information from an owner under
s 56(8)(b), or to consult with him under s 56(9)(a), it will as a matter of
course send
communications to the original or changed address. The provincial
legislature must consequently have envisaged that, in the absence
of such
notification, the registered letter required by s 63(1) would be sent to the
address from which the application emanated.
(It may be that if a local
authority has knowledge of a change of ownership of the property not derived
from notice of a changed
address, the registered letter may be sent to the new
owner's address. It is, however, unnecessary to express a view on this
24
hypothesis.)
I am therefore of the opinion that unless a local authority
has been notified of a change in address, and possibly unless it knows
that a
change of ownership has occurred, the directive required by s 63(1) may be sent
to the address of the owner or his agent appearing
in the application for
rezoning. That this is the only sensible interpretation of the subsection is
illustrated by the following.
Unless some or other form of notification is
received by the local authority, its townplanning (or engineering) department
will as
a rule be unaware of any change of ownership after the date of a
rezoning application. That department will therefore naturally cause
the
registered letter to be sent to the only address of the "owner" known to it; i e
the address appearing in the application.
Counsel for the appellant contended, how-
25 ever, that a local authority would have no difficulty in ascertaining the
name and address of the owner of the property at the
date of approval of the
rezoning or of the posting of the registered directive. Such information, it was
argued, could be gleaned
from the local authority's rates records since under s
50(1) of the Local Government Ordinance 17 of 1939 (Transvaal) a clearance
certificate must be obtained before transfer of property within a municipal area
can be effected. There are at least two answers
to this argument. Firstly, when
applying for a clearance certificate an owner is not obliged to - and in
practice probably will not
- furnish the local authority with the name and
address of the intended transferee. And even if he does, for one reason or
another
- such as cancellation of the underlying contract - transfer may never
be given, or may only be given later than originally anticipated.
Second-
26
ly, registration can take place between the date of approval of the rezoning
and that of the decision to exact a contribution, or
of the posting of the
registered directive. The letter may even be sent off on the very day, and
conceivably at the very moment,
of registration of transfer. In some cases even
a search in the deeds registry would therefore be of no practical assistance in
determining
who the registered owner of the property is when the directive is
drafted or posted.
Counsel also contended that neither the Act nor the 1986
Ordinance provides that an application for rezoning must contain the address
of
the owner or his agent. That is true, but it is so highly unlikely that such an
application would not emanate from a stated address
that the legislature must
have taken for granted that an applicant will supply an address.
27 In
casu
the applications were made by Jaspan on behalf of the then owners of
the properties . They bore the address of the firm of which
he was a partner.
The directives were sent by registered letters to that address. In them the
unnamed owners of the properties were
directed to pay engineering contributions
to the respondent. There is no suggestion that the respondent was aware of the
fact that
the properties had some time before been transferred to the
appellants. In my view the respondent therefore did comply with the provision
under discussion.
I come to the second ground upon which it was contended
that the directive did not comply with s 63(1). It will be recalled that in
a
directive a local authority must state the amount of the contribution,
particulars of the manner in which it was determined and
the purpose for which
it is required.
28
It will also be recalled that in each registered-letter the following
information was given:
"Water R6 137-82
Sewerage R4 163-25
Roads R38 064-00"
Counsel for the appellant submitted that that
information was insufficient. A similar argument was raised in the appellant's
heads
of argument in the court a
quo
but not put forward during the oral
address of counsel for the appellants.
Counsel for the respondent rightly
pointed out that in their founding affidavit the appellants did not advance
non-particularity as
a ground for the invalidity of the directives. He therefore
contended that the appellants were precluded from relying on that ground
either
in the court a
quo
or on appeal.
In my view this contention is
well-founded. It is, of course, trite that an applicant may argue a point of law
not raised in his papers
but only if
29
its consideration does not involve unfairness to the respondent. Such
unfairness will be absent if the point is one of pure law; i
e a point in no way
related to factual material which may not be contained in an applicant's or, for
that matter, a respondent's
papers. Now, particularity generally is a question
of degree. Hence, unless one knows precisely how the amounts stated in the
directives
were made up, it may not be possible to ascertain whether the
directives contained sufficient particularity of the manner in which
those
amounts were determined. Had the appellants relied upon a lack of particularity,
the respondent would therefore have been entitled
to show that it would have
been quite impractical to incorporate in the directive something in the nature
of a detailed bill of quantities,
and that anything short of that would not have
been of material assistance to the appellants. In sum, the
30 respondent may
well have furnished information having a bearing on the meaning of "particulars"
in s 63(1)(a)(i).
Counsel for the appellants countered, however, by
contending that the point in question is indeed one of pure law. He argued that
the directives were defective not because they contained insufficient
particulars, but since no particulars whatsoever were stated.
That being so, the
directives, as a matter of law, were fatally defective.
I cannot agree. In
each letter the respondent stated, albeit not explicitly, the amount of the
contribution (R48 365,07) and the purposes
for which it was required, viz,
water, sewerage and roads. In breaking down the amount of R48 365,07 and
allocating a portion thereof
to each of the three purposes, the respondent in my
view did to some extent at least give particulars of the manner in which that
amount
31
was determined. This conclusion renders it unnecessary to consider whether
the provision in question is peremptory or merely directory.
The appeal is dismissed with costs.
H J O VAN HEERDEN JA
JOUBERT JA
NESTADT JA
CONCUR
GOLDSTONE JA
HOWIE AJA