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[2013] ZACC 30
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Britannia Beach Estate (Pty) Ltd and Others v Saldanha Bay Municipality (CCT11/13) [2013] ZACC 30; 2013 (11) BCLR 1217 (CC) (5 September 2013)
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CONSTITUTIONAL COURT OF SOUTH AFRICA
CCT Case 11/13
[2013] ZACC 30
In the matter between:
BRITANNIA BEACH ESTATE (PTY) LTD
.........................................
First
Applicant
BRITANNIA BAY DEVELOPERS (PTY) LTD
...............................
Second
Applicant
SANDY POINT BEACH PROPERTIES (PTY) LTD
..........................
Third
Applicant
WEST COAST MIRACLES (PTY) LTD
............................................
Fourth
Applicant
and
SALDANHA BAY MUNICIPALITY
.........................................................
Respondent
Heard on : 28 May 2013
Decided on : 5 September 2013
JUDGMENT
FRONEMAN J (Bosielo AJ, Jafta J, Khampepe J, Mhlantla AJ, Nkabinde J,
Skweyiya J and Zondo J concurring):
Introduction
The
applicants are property developers on the west coast. During a
period from April 2003 to August 2008 they made six applications
(development applications) to the Saldanha Bay Municipality
(Municipality) for the rezoning and subdivision of properties
acquired
by them. These applications were granted by the
Municipality, subject to certain conditions for the payment of
contributions
in respect of the provision of services and amenities
to the land. Although these contributions also relate to non-capital
expenditure,
they have been referred to by all as “capital
contributions” and I will, for ease of reference, do the same.
The
applicants approached the Western Cape High Court, Cape Town
(High Court) for declaratory orders that the tariff upon
which
the Municipality levied the capital contributions was, for various
reasons, unlawful, and for an order directing the Municipality
to
account to them for overpayments allegedly made in respect of the
capital contributions. They largely succeeded in the High
Court but,
on appeal to the Supreme Court of Appeal, the High Court orders were
set aside. The applicants now seek leave to appeal
to this Court,
but only on the narrow basis that the Supreme Court of Appeal failed
to deal with the constitutional issue relating
to the Municipality’s
alleged duty to account for the alleged overpayments. They accept
that the Supreme Court of Appeal’s
analysis of the legal basis
upon which the capital contributions were levied is correct, and
that their initial attack on the
unlawfulness of the determination
of the tariff does not affect the validity of the conditions imposed
in relation to the payment
of the capital contributions.
1
In
view of this, it is not necessary to traverse the factual and legal
basis upon which the tariff was attacked in the High Court
in
particular detail. What needs to be determined is whether a material
constitutional issue nevertheless remains and, if so,
whether it is
in the interests of justice for this Court to determine that issue.
For
the reasons that follow leave to appeal must be refused.
I
will first deal with condonation, then briefly with the factual and
legal basis upon which the applicants approached the High
Court,
before summarising the legal basis of the Supreme Court of Appeal’s
rejection of that approach. Then I will examine
what remains of the
essential dispute between the parties in the light of the acceptance
of the correctness of the Supreme Court
of Appeal’s findings.
Finally, I will turn to whether a material constitutional issue
still remains to be determined.
Condonation
The
applicants sought condonation for bringing the application for leave
to appeal late, by 25 days. The explanation was that
the delay
occurred over the December holiday period and that the Municipality
was not prejudiced by the delay. The explanation
is satisfactory and
there is no prejudice. Condonation must be granted.
High Court
The
applicants sought to impugn certain resolutions of the Municipal
council upon which they alleged the tariff for the calculation
of
the capital contributions was based. The first resolution in this
regard was taken in September 1997 (R55 tariff). It remained
applicable until 1 July 2007. The first three development
applications were granted during this period. While the remaining
three applications were still pending the council of the
Municipality resolved to amend the tariff as from 1 July 2007
(R35 tariff).
The first of the remaining three applications was
granted on 3 August 2007.
Some
uncertainty about the extent to which the R35 tariff was applicable
led to the adoption of a resolution confirming that the
R55 tariff
would continue to apply to development applications approved before
1 July 2007. Another resolution (R43) then reconfirmed
that the R35
tariff was applicable to all developments approved after 1 July 2007
and that a discount was applicable to developments
approved prior to
this date. The applicants objected to R43 and it was then revoked by
the Municipality. Prior to its revocation
the last two of the
applicants’ six development applications were approved. The
capital contributions, imposed as conditions
when the development
proposals were granted, were thus to be calculated in accordance
with the R55 tariff for the first three
applications and according
to the R35 tariff for the last three.
In
the High Court the applicants contended that the revocation of R43
also implied that the R35 tariff was rescinded. This found
favour
with the High Court. It declared R43, read with the R35 tariff for
the calculation of capital contributions set out in
council
resolutions, to be of no force and effect; ordered the Municipality
to account to the applicants for capital contributions
levied and
paid in accordance with the impugned tariffs; and ordered the
Municipality to pay the applicants’ costs.
Supreme
Court of Appeal
In
the Supreme Court of Appeal the attention turned from the lawfulness
of the policies adopted by the Saldanha Bay Municipal
Council
(Municipal council) for the imposition of tariffs, to the lawfulness
of the conditions imposed when the development applications
were
granted. The imposition of these conditions was done in accordance
with the provisions of section 42 of Land Use Planning
Ordinance
(LUPO).
2
Section 42(3) of LUPO prescribes a strict procedure that must be
adhered to before any condition imposed in terms of section
42(1)
can be amended. It was common cause that the applicants did not at
any stage attempt to utilise the provisions of section
42(3) of LUPO
to amend the conditions imposed when the six development
applications were granted.
The
Supreme Court of Appeal found that this disposed of the matter:
“
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 section 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. The changes in
the council’s policy from time to time are for that reason
irrelevant.
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. These
incorporate specific tariffs. It is common cause that the procedure
prescribed in section 42(3)
of LUPO was not followed. That is the end
of the matter and the appeal must accordingly succeed.”
3
(Footnotes omitted.)
This
reasoning was based on two previous decisions of the Supreme Court of
Appeal,
Municipality of Stellenbosch v Shelf-Line 104 (Pty) Ltd
4
and
City of Cape Town v Helderberg Park Development (Pty) Ltd
.
5
What remains?
As
stated above, the applicants now accept that the Supreme Court of
Appeal’s reasoning in relation to the lawfulness of
the
conditions imposing the capital contributions is correct. That is
not an issue before us. They nevertheless maintain that
they have
paid the Municipality too much in respect of these contributions. It
is on the basis of this overpayment that the applicants
assert a
constitutional duty on the part of the Municipality to account.
What
is thus left at this stage is a dispute about money: whether the
applicants have overpaid the Municipality in respect of
the validly
imposed conditions requiring the payment of capital contributions.
It is also, however, common cause that the applicants
have
instituted a separate action in the High Court for repayment of the
amounts they allege they have overpaid.
A
constitutional duty to account?
Despite
the fact that what remains is also the subject-matter of a pending
action in the High Court, the applicants maintain that
they are
entitled to an order that the Municipality account to them for the
alleged overpayments. This independent right, they
contend, accrues
to them – and the corresponding obligation falls on the
Municipality – by virtue of the provisions
of section 195 of
the Constitution. There are a number of reasons why this argument
cannot succeed.
One
of the fundamental values of the Constitution is a multi-party
system of democratic government to ensure accountability,
responsiveness and openness.
6
In relevant part section 195 provides:
“
(1)
Public administration must be governed by the democratic values and
principles enshrined in the Constitution, including the
following
principles:
. . .
(f) Public administration must
be accountable;
(g) Transparency must be
fostered by providing the public with timely, accessible and accurate
information.”
This
Court has on a number of occasions stated that although these values
underlie our Constitution they do not give rise to independent
rights outside those set out in the Bill of Rights. In
Chirwa
7
the position was summarised thus:
“
Even
if the applicant was permitted to bypass the specialised framework of
the LRA in the attempt to challenge her dismissal, the
reliance on
section 195 is misplaced. This is illustrated by the reasoning in
Institute
for Democracy in South Africa and Others v African National Congress
and Others
(
IDASA
).
The Court in that case relied on the decision in
Minister
of Home Affairs v National Institute for Crime Prevention and the
Reintegration of Offenders (NICRO) and Others
,
where it was held:
‘
The
values enunciated in section 1 of the Constitution are of fundamental
importance. They inform and give substance to all the
provisions of
the Constitution. They do not, however, give rise to discrete and
enforceable rights in themselves. This is clear
not only from the
language of section 1 itself, but also from the way the Constitution
is structured and in particular the provisions
of chapter 2 which
contains the Bill of Rights.’
Consequently, the court in
IDASA
held that—
‘
. . .
the same considerations apply to the other sections of the
Constitution . . . [including] 195(1). These sections all have
reference to government and the duties of government, inter alia, to
be accountable and transparent. . . . In any event, these
sections do
not confer upon the applicants any justiciable rights that they can
exercise or protect by means of access to the respondents’
donations records. The language and syntax of these provisions are
not couched in the form of rights, especially when compared
with the
clear provisions of chapter 2. Reliance upon the sections in question
for purposes of demonstrating a right is therefore
inapposite.’
Therefore although section 195
of the Constitution provides valuable interpretive assistance it does
not found a right to bring
an action.”
8
(Footnotes omitted.)
Democratic
accountability as a fundamental value of the Constitution does not
therefore generally provide the basis for fashioning
individual
rights outside those specifically enumerated in the Constitution and
other relevant legislation. In the present case
the so-called ‘duty
to account’ does not fit comfortably with the constitutional
demand of democratic accountability.
There are other rights and
remedies in the Constitution, legislation and court procedure that
more than adequately ensure not
only democratic accountability, but
also that the applicants will not be prejudiced in their claim for
the alleged overpayment
of capital contributions.
The
applicants originally relied on the existence of a fiduciary
relationship between themselves and the Municipality to justify
the
Municipality’s ‘duty to account’. The reference to
a fiduciary relationship that brings with it a duty
to account stems
from the private law where in certain legal relationships –
trusts
9
and partnerships
10
for example – the close relationship between persons in
positions of trust gives rise to a legal obligation to account
for
moneys entrusted to them for the benefit of others. This is a far
cry from constitutional democratic accountability. The
purpose of an
obligation to account in private legal relationships is to make
known to beneficiaries what has happened to moneys
in which they
have a material interest.
In
the present case there are statutory provisions that oblige
municipalities to account for the money they levy and spend,
11
as well as for the participation of the citizenry in the processes
where policies determining rates, taxes and the like are
determined.
12
These general provisions seek to give effect to the Constitution’s
fundamental values of accountability, responsiveness
and openness.
The applicants have failed to locate their claim for a duty to
account within any existing legislative framework.
There
are also more specific remedies available to the applicants to
ensure that the information they seek is made available to
them.
Section 32(1)(a) of the Constitution
13
provides that everyone has the right of access to information held
by the state and the Promotion of Access to Information Act
14
seeks to give expression to this fundamental right. Once litigation
is instituted this right of access to information is regulated
by
the rules of court, to be applied flexibly and purposively to ensure
the right of access to information.
15
The applicants failed to explain why they could not explore these
options, which they should have done before attempting to assert
an
independent constitutional right. As members of a local community
the applicants are required to pursue their remedies through
mechanisms and in accordance with processes provided for in the
Systems Act
16
and other applicable legislation.
Lastly,
on the facts the tariffs (R55 and R35) for the calculation of the
capital contributions are contained in the conditions
of approval of
the six development applications. There is nothing that prevents the
applicants from making those calculations
and claiming any alleged
overpayments from the Municipality. They have indeed done so.
Conclusion
The
scope for an independent constitutional right to require a ‘duty
to account’ from the Municipality does not exist
here. One of
the requirements for leave to appeal to this Court is the reasonable
prospect of success on a cognisable constitutional
issue. That
requirement has not been met. Even if there was some prospect of
success it would not have been in the interests
of justice to grant
leave because on the facts there is nothing that prevents the
applicants from claiming the alleged overpayments
from the
Municipality in the normal course. All the information they need is
already available to them or can be obtained in
normal civil
proceedings.
Costs
Despite
the effort to clothe this matter in constitutional garb, this
remains an essentially commercial matter. There is no reason
why the
applicants should not bear the costs.
17
Order
[24] The
following order is made:
1.
Condonation is granted.
2.
Leave to appeal is refused with costs including the costs of two
counsel.
For
the Applicant: Advocate SP Rosenberg SC and Advocate PS Van Zyl
instructed by Werksmans Inc.
For
the Respondent: Advocate JA Newdigate SC and Advocate ML Sher
instructed by Swemmer & Levin Inc.
1
The
applicants persisted in seeking declaratory relief, but now on the
basis that it was justified in relation to future applications.
2
Land
Use Planning Ordinance 15 of 1985 (Cape). Section 42 provides:
“
(1) When the Administrator or
a council grants authorisation, 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.
(2) Such conditions may, having regard to—
(a) the community needs and public expenditure which in
his or its opinion may arise from the authorisation, exemption,
application
or appeal concerned and the public expenditure incurred
in the past which in his or its opinion facilitates the said
authorisation,
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 authorisation, exemption, application or
appeal in respect of the provision of necessary services or
amenities
to the land concerned.
(3) Subject to the provisions of the Removal of
Restrictions Act, 1967 (Act 84 of 1967), either the Administrator or
a council,
as the case may be, may, in relation to a condition
imposed under subsection (1), after consideration of objections
received
in consequence of an advertisement in terms of subsection
(4) and after consultation with the owner of the land concerned and,
in the case of the Administrator, with the local authority
concerned—
(a) waive or 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.
(4) The director, where the Administrator may act under
subsection (3), or the town clerk or secretary, where a council may
so
act, as the case may be, shall, if he is of the opinion that the
waiver or amendment of conditions or the imposition of additional
conditions under subsection (3) adversely affects the interest that
any person has in land, advertise the proposed waiver or
amendment
of conditions or imposition of additional conditions.”
3
Saldanha
Bay Municipality v Britannia Beach Estate (Pty) Ltd
[2012] ZASCA
206
at paras 20-1.
4
[2011]
ZASCA 190
;
2012 (1) SA 599
(SCA) at paras 20-1 and 28.
5
[2006]
ZASCA 91
;
2008 (6) SA 12
(SCA) at paras 7-11.
6
Section
1(d) of the Constitution.
7
Chirwa
v Transnet Limited and Others
[2007] ZACC 23
;
2008 (4) SA 367
(CC);
2008 (3) BCLR 251
(CC).
8
Id
at paras 74-6.
9
Administrators
Estate Richards v Nichol and Another
[1998] ZASCA 82
;
1999 (1) SA 551
(SCA) at
563.
10
Doyle
and Another v Fleet Motors PE
(Pty) Ltd
1971 (3) SA 760
(AD) at 762F-763D.
11
Public
Finance Management Act 1 of 1999
and local government equivalents,
for example, Local Government Municipal Systems Act 32 of 2000
(Systems Act).
12
Id.
13
Section
32 provides:
“
(1) Ever
yone
has the right of access to―
(a) any information held by the state; and
(b) any information that is held by another person and
that is required for the exercise or protection of any rights.
(2) National legislation must be enacted to give effect
to this right, and may provide for reasonable measures to alleviate
the
administrative and financial burden on the state.”
14
Promotion
of Access to Information Act 2 of 2000
.
15
PFE
International Inc (BVI) and Others v Industrial Development
Corporation of South Africa
Ltd
[2012] ZACC 21
;
2013 (1)
SA 1
(CC);
2013 (1) BCLR 55
(CC) (
PFE International)
at para
21 and 31.
16
Systems
Act quoted above n 11.
17
PFE
International
above n 15 at para 33.