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[2013] ZAWCHC 178
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De Jong and Others v The Trustees of the Simcha Trust and Another (22197/12, 24076/12) [2013] ZAWCHC 178; 2014 (4) SA 73 (WCC) (22 November 2013)
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH
COURT)
Cases 22197/12 & 24076/12
In the matter between:
MADELENE
DE JONG
.................................................................
1
st
Applicant
GREGORY
NIGEL JOSEPH WHITE
...........................................
2
nd
Applicant
MARTHINUS
JOHANNES ELS
...................................................
3
rd
Applicant
MARGARET
JEAN WOUTERS
...................................................
4
th
Applicant
JOSHUE
SAMUEL JOHNSON SOUTH
.......................................
5
th
Applicant
NICOLE
GENEVIEVE KYTE
........................................................
6
th
Applicant
JACQUES
SCHMIDT
...................................................................
7
th
Applicant
SUZANNE
WEHMEYER (SCHMIDT)
...........................................
8
th
Applicant
EXCLUSIVE
ACCESS TRADING 585
.........................................
9th
Applicant
EMANUEL
FEGUERA DE ABREU
............................................
10
th
Applicant
SHIRAAZ
JOOSUB
....................................................................
11
th
Applicant
BARRISTER
INVESTMENTS (PTY) LTD
..................................
12
th
Applicant
AMBER
VAN DER WALT
..........................................................
13
th
Applicant
SARAH
ELIZABETH HALLAS
..................................................
14th
Applicant
JOAO
JOSE RIBEIRO DE CRUZ
..............................................
15
th
Applicant
SKYE
MIDDELTON
....................................................................
16
th
Applicant
RICHARD
DANIEL KYTE
...........................................................
17
th
Applicant
And
THE
TRUSTEES OF THE SIMCHA TRUST
...........................
1
st
Respondent
THE
CITY OF CAPE TOWN
...................................................
2
nd
Respondent
Coram
: ROGERS J
Heard: 11 NOVEMBER 2013
Delivered: 22 NOVEMBER 2013
______________________________________________________________
JUDGMENT
______________________________________________________________
ROGERS J:
Introduction
The applicants are owners of units in the Four Seasons
sectional title scheme situated at 43-47 Buitenkant Street Cape
Town. The
first respondent, the Simcha Trust (‘Simcha’),
is the owner of an adjoining property, erf 5284 Cape Town situated
at 41 Buitenkant Street. The second respondent is the City of Cape
Town (‘the City’). The proceedings before me are
the
fall-out from proceedings successfully brought by the applicants for
an interim interdict to prevent Simcha from continuing
with building
work on erf 5284 pending a review and for the reviewing and
setting aside of the City’s approval of
Simcha’s
building plans. Simcha opposed the application for interim relief;
the City did not. The interim interdict was
granted with costs to
stand over for later determination. The subsequent review was
granted without opposition, and the applicants
did not seek costs.
Simcha contends, as to costs, that the City should pay the costs of
the applicants and Simcha in the interdict
proceedings,
alternatively that the applicants should bear their own costs of the
interdict proceedings. Simcha also contends
that the City should pay
it compensation in terms of s 8(1)(c)(ii)(bb) of the Promotion
of Administrative Justice Act 3
of 2000 (‘PAJA’).
The Four Seasons building was erected over the period
2005 to 2007. During October 2006 Simcha purchased erf 5284 and took
transfer
in February 2007. There existed on erf 5284 a four-storey
face brick building dating back to the 1970s. Simcha had in mind to
undertake a substantial redevelopment. In October 2007 Simcha
submitted its building plans to the City for pre-scrutiny, with
formal submission taking place on 23 January 2008. On 17 October
2008 the City approved Simcha’s building plans in terms
of
s 7(1) of the National Building Regulations and Building
Standards Act 103 of 1977 (‘the NBA’).
On 13 June 2008, about four months prior to the City’s
approval of Simcha’s building plans, the Constitutional Court
delivered judgment in
Walele v City of Cape Town & Others
[2008] ZACC 11
;
2008 (6) SA 129
(CC). The majority in
Walele
held that
the recommendation of the building control officer (‘BCO’)
contemplated in s 7(1) of the NBA as read
with s 6(1)(a)
was intended by the statute to be the proper means by which the
decision-maker in s 7(1) was to be informed
of the factors
relevant to the s 7(1) assessment. A mere endorsement and
signature by the BCO to the effect that he recommended
the plans for
approval did not suffice. The BCO had to ensure that adequate
information was placed before the decision-maker
so that the latter
could consider applications for approval of building plans properly
and in a balanced way (paras 64-72).
Despite this judgment (in litigation to which the City
was a party), the City continued for more than six months to approve
building
plans in accordance with the procedure which
Walele
had
found to be inadequate. Between 19 000 and 20 000 building
plans were approved during that period. Among these were
Simcha’s
building plans. The City explained in affidavits in the present
proceedings that the import of the
Walele
judgment and the
manner in which it should be implemented were matters debated
internally within the City and on which counsel’s
advice was
subsequently taken. It was only in January 2009 that the City
finalised and issued guidelines for BCOs to follow when
making
recommendations.
Simcha undertook certain demolition and preliminary
construction works in 2008 but decided towards the end of 2008 to
cease work
in view of the global financial crisis. Work resumed more
than three years later on 14 May 2012. The trustees of the body
corporate
of the neighbouring Four Seasons building obtained a copy
of Simcha’s building plans on 24 May 2012. A number of unit
owners
were concerned that Simcha’s proposed building,
particularly at its 7
th
and 8
th
levels, was to
be built on the common boundary in such a way that the structure
would loom up against the windows of the Four
Seasons building on
that side and thus be offensive and block out light. The trustees
obtained a report from a town planner on
28 June 2012. The body
corporate decided on 3 October 2012 that further expenditure in
opposing the adjacent development could
not be justified but that
individual owners were free to pursue objections. The next day the
first applicant consulted with attorneys
and began the process of
assembling the individual owners who were to join her in opposing
Simcha’s development. Her initial
attorneys withdrew due to a
conflict of interest and other attorneys were engaged. Unsuccessful
attempts at settlement between
the applicants and Simcha took place
in November 2012.
On 21 November 2012 the applicants launched their
application for an interdict pending review proceedings. There were
two main
grounds for the proposed review. The first ground concerned
the location of the dividing line on erf 5284 between that
property’s
C4 and C5 split-zoning. On the applicants’
view, Simcha and the City had located the dividing line in the wrong
place,
thus allowing a greater part of the building to benefit from
the more generous C5 height restriction. The second ground was that
Simcha’s building would probably derogate from the value of
the units in the Four Seasons building and that the BCO and
decision-maker could not properly have reached a contrary view. The
founding papers in the interdict proceedings did not allege
that the
BCO had failed to present to the decision-maker a reasoned
recommendation as contemplated in
Walele
though the issue was
flagged in paragraphs 75 and 76 where deponent said that the BCO was
obliged to provide a fully motivated
reason for concluding that
Simcha’s building would probably not derogate from the value
of the applicants’ properties;
that it was inconceivable in
the light of the evidence that such a conclusion could have been
reached in a manner that would
not be open to serious attack; and
that the applicants were not in possession of the BCO’s report
but fully expected that
the report would reveal that the BCO did not
properly apply his mind to the matter.
Simcha filed opposing papers on 1 December 2012. Simcha
complained that the applicants had unreasonably delayed in launching
the
proceedings. On the merits, Simcha denied the applicants’
contentions regarding the split-zoning issue and the derogation
point. Simcha’s deponent said that paragraphs 75 and 76 of the
founding affidavit would be dealt with in an accompanying
affidavit
of Mr CJ Moir (‘Moir’), who had been the City’s
BCO when Simcha’s plans were approved in 2008.
In his
accompanying affidavit Moir said that he had properly applied his
mind to the factors mentioned in s 7(1) when making
his
recommendation. He did not say that he had prepared a reasoned
report for the benefit of the decision-maker (who, it later
transpired, was a Mr J Theron (‘Theron’), the City’s
Section Head: Building Development Management). On 3 December
2013
the applicants’ attorney telephoned Moir to enquire whether he
had prepared a report for the benefit of the decision-maker.
Moir
said that he had not, and that Simcha’s plans had been
approved prior to the implementation of the new procedures
adopted
by the City following the
Walele
judgment. Based on this
information, the applicants in the replying papers in the interdict
stated that they intended to rely
on non-compliance with
Walele
as a further ground of review.
The interdict application was argued before Dolamo AJ
(as he then was) on 7 December 2012. On 12 December 2012 Dolamo J
granted
the interim interdict. In his judgment he set out the
contentions of the parties on the various points. He rejected the
delay
complaint. On the merits of the matter (ie in regard to the
applicants’ alleged
prima facie
right), he based his
decision on the
Walele
point, expressing no opinion on the
two original grounds of review.
The applicants launched the review application on 19
December 2012. The review grounds were the derogation-from-value
issue, the
split-zoning issue and the absence of a recommendation
complying with
Walele
. Simcha filed a notice of opposition on
5 January 2013. Very belatedly the City filed its record in terms of
rule 53 on 12 April
2013. On 25 April 2013 the City filed a notice
to abide together with an explanatory affidavit by Theron. In his
affidavit Theron
explained why in his view the City had correctly
determined the dividing line relevant to the split-zoning issue. In
regard to
the
Walele
point, Theron said that Simcha’s
plans had been approved shortly after the handing down of the
Walele
judgment. He said that the City had needed guidance and direction in
relation to the implications and implementation of the judgment.
In
particular the City had to [a] obtain legal advice on the
impact of
Walele
, ‘particularly in relation to the onus
as to what additional factors had to be taken into account by the
decision-maker
in considering whether or not to approve building
plans’; [b] create new precedent documents for use in the
City;
and [c] formulate new policy concerning the processing
and approval of building plans, in order to comply with the
requirements
of the judgment. All of this had taken more than four
months.
Thereafter an arrangement was reached between the
applicants and Simcha that the applicants would not supplement their
founding
papers in the review with reference to the City’s
record until Simcha had decided whether or not to persist with its
opposition
to the review. Simcha in due course concluded that it
could not successfully oppose the review on its merits but contended
that
the City should pay the costs of Simcha and the applicants
relating to the interdict proceedings and that the City should
refund
to Simcha the scrutiny fee of R82 327,60 which the
latter had paid in 2008 in order to have its plans assessed. The
City
rejected these claims in correspondence.
On 7 August 2013 and by agreement an order was granted
in the review setting aside the City’s approval of Simcha’s
building plans. The order did not in express terms state that
Simcha’s application for approval of its building plans was
remitted to the City for reconsideration. The following issues
relating to costs were to stand over for later determination,
namely: [a] the liability of the City for Simcha’s review
costs; and [b] the liability of Simcha and the City
for the
applicants’ costs in the interdict proceedings. It appears
that, due to an oversight by the parties, the order
failed to
mention that Simcha also wished to reserve its alleged right to
claim compensation from the City in terms of s 8(1)(c)(ii)(bb).
In argument before me counsel were in agreement that the form of the
order granted in the review did not preclude a consideration
of the
compensation claim.
On 19 August 2013 Simcha filed affidavits in the review
proceedings relating to costs and compensation. Simcha’s
attitude
in these papers was that the only review ground with merit
was the
Walele
point, and that in the absence of evidence
that Moir had provided Theron with a reasoned recommendation Simcha
had felt bound
to concede the review. Simcha alleged that prior to
the launching of the interdict proceedings, or at least on receipt
of the
interdict application, the City ought frankly to have
disclosed to Simcha that its plans had been approved in violation of
the
Walele
judgment. Had the City done so, Simcha would
probably not have opposed the interdict. For this reason the City
should be ordered
to pay the costs of the applicants and Simcha in
the interdict proceedings. Simcha also alleged that the City’s
disregard
of
Walele
when approving Simcha’s plans in
October 2008 had been so reckless or grossly negligent that this was
an ‘exceptional
case’ in which it would be appropriate,
in terms of s 8(1)(c)(ii)(bb) of PAJA, to order the City to
make compensation
by refunding the scrutiny fee of R82 327,60
and by paying the out-of-pocket expenses incurred by Simcha in
ceasing work
following the granting of the interdict in December
2008.
The City responded to these contentions in papers filed
on 16 October 2013. The City’s deponent, Ms CD Walters
(‘Walters’),
elaborated upon the explanation given by
Theron regarding the delay in the City’s implementation of
Walele
. She also said that Simcha had consulted with Moir
when preparing its answering papers in the interdict proceedings and
knew
that he had not prepared a reasoned recommendation. Simcha’s
opposition to the interdict proceedings was thus not due to
a
misapprehension that a reasoned recommendation existed. Certain
procedural objections were also taken (that Simcha, as a respondent,
could not seek relief against a co-respondent; and that the review
court was
functus officio
except in regard to the reserved
costs and that compensation could thus not be ordered) but these
were not pressed in argument.
The parties were in agreement that, if the compensation
claim succeeded in principle, its quantification would need to be
referred
to oral evidence.
Compensation
Simcha has based its claim for
compensation exclusively on s 8(1)(c)(ii)(bb) of PAJA; there is
no claim in delict nor for
constitutional damages directly in terms
of s 38 of the Constitution. The starting point must thus be
the proper interpretation
of the relevant provisions of PAJA.
Section 8(1) of PAJA reads thus (I underline certain words relevant
to the arguments):
‘
(1) The
court or tribunal, in proceedings for judicial review in terms of
section 6(1), may grant any order that is
just
and equitable
,
including orders –
(a) directing the
administrator –
(i) to give reasons; or
(ii) to act in the manner
the court or tribunal requires;
(b) prohibiting the
administrator from acting in a particular manner;
(c) setting aside the
administrative action
and
–
(i) remitting the matter
for reconsideration by the administrator, with or without directions;
or
(ii)
in exceptional
cases
–
(aa) substituting or
varying the administrative action or correcting a defect resulting
from the administrative action;
or
(bb) directing the
administrator or any other party to the proceedings to pay
compensation;
(d) declaring the rights of
the parties in respect of any matter to which the administrative
action relates;
(e) granting a temporary
interdict or other temporary relief; or
(f) as to costs.
Mr Hodes SC, who appeared for Simcha together with Mr
de Waal, submitted that the City’s disregard for
Walele
in
2008 when approving Simcha’s plans was so reckless or grossly
negligent as to render the present matter an ‘exceptional
case’ justifying the granting of compensation to Simcha in
terms of s 8(1)(c)(ii)(bb).
Mr Rosenberg SC, who appeared for the City together
with Ms van Huyssteen, resisted the claim for compensation on the
basis of
the three inter-related contentions regarding the
interpretation and scope of s 8(1)(c)(ii)(bb):
[a] Firstly, he submitted that compensation cannot
be granted where the court has set aside the administrative action
and remitted
the matter for reconsideration by the decision-maker. He
said that in the present case the legal effect of the order granted
by
agreement on 7 August 2013 was to remit to the City for
reconsideration Simcha’s application for approval of its
building
plans, even though the order did not say so in terms. Mr
Rosenberg argued that, this being the case, the alternative remedies
set
out in sub-paragraph (ii) were not available.
[b] Second, Mr Rosenberg argued that the
circumstances which render a case ‘exceptional’ within
the meaning
of s 8(1)(c)(ii) are concerned not (as Mr Hodes’
argument assumed) with the egregiousness of the impugned conduct of
the administrator but with the appropriateness of departing from the
usual remedy of remittal.
[c] Third, Mr Rosenberg argued that
s 8(1)(c)(ii)(bb) can be invoked only by the aggrieved
applicant, not by a respondent.
In addition to these three contentions, Mr Rosenberg
contended, as a fall-back position, that the City’s conduct in
approving
Simcha’s plans was not so unreasonable or egregious
as to elevate its conduct to an ‘exceptional case’. In
this latter context, he urged me to interpret the phrase ‘in
exceptional cases’ in a manner consistent with the
jurisprudence
of our highest courts in relation to the delictual
liability of public bodies for the improper performance of their
duties.
Mr Rosenberg’s argument on the three legal points
I have foreshadowed was the following. The usual review remedy is
the
setting aside of the unlawful action and remittal of the matter
to the decision-maker for reconsideration. This primary remedy
is
contained in s 8(1)(c)(i). In certain circumstances, which the
lawmaker required to be ‘exceptional’, a remittal
of the
matter for reconsideration by the administrator would not be
practical or achieve justice. In those exceptional cases
only, the
court may grant one or other of the alternative remedies specified
in s 8(1)(c)(ii). Those alternative remedies,
confined to
‘exceptional cases’, provide a substitute for the usual
remedy, the substitute being either [a] a
decision by the court
itself on the relevant administrative application or
[b] compensation in lieu of a decision on the
administrative
application. Although Mr Rosenberg did not quite put it this way,
the two alternative substitute remedies would
be reserved for the
exceptional cases where [a] it is appropriate for there to be a
decision on the administrative application
but where it would be
unjust or inequitable to remit this to the original decision-maker
or [b] it is inappropriate for
any further decision to be taken
on the administrative application but nevertheless just and
equitable that the aggrieved applicant
should be compensated for the
original decision-maker’s unlawful conduct.
I accept the first two legs of Mr Rosenberg’s
argument as summarised earlier but prefer to leave the third leg
open. The
first two legs of the argument accord, in my view, with
the structure of s 8(1)(c). The use of the word ‘and’
at the end of the introductory part of paragraph (c) followed by the
separation of sub-paragraphs (i) and (ii) with the word
‘or’
is a strong syntactical pointer in favour of the view that the
remedies in sub-paragraphs (i) and (ii) are true
(ie mutually
exclusive) alternatives. Sub-paragraph (ii) is qualified by the
phrase ‘in exceptional cases’, indicating
that the
remedies in sub-paragraph (ii) apply in circumstances different to
those in sub-paragraph (i). It is clear, furthermore,
that at least
in the case of item (aa) of sub-paragraph (ii) the remedy can only
ever be a true alternative to the remedy in
sub-paragraph (i) –
a court could not remit a matter for reconsideration by the
administrator and also substitute or vary
the administrative action.
On this view, which I regard as correct, a court cannot
grant either of the remedies in sub-paragraph (ii) if it has granted
the
usual remedy contemplated in sub-paragraph (i). A further
implication of this interpretation of s 8(1)(c) is that the
phrase
‘in exceptional cases’ in sub-paragraph (ii) is
not concerned with whether the administrator’s decision was a
conspicuously bad one but with whether there are unusual
circumstances which make it appropriate to grant the exceptional
remedy
in item (aa) or (bb) rather than the usual remedy of remittal
(cf
Gauteng Gambling Board v Silver Star Development Ltd &
Others
2005 (4) SA 67
(SCA) para 28). Of course, the manner in
which the decision-maker went about his business may bear on the
question whether, exceptionally,
the matter should be decided by the
court rather than be remitted to the decision-maker but
exceptionality is concerned with
the choice of remedy, not the
quality of the administrator’s decision in the abstract. In
many cases involving very poor
decisions a setting aside and
remittal will remain appropriate.
If the phrase ‘in exceptional cases’ is
intended to qualify the circumstances in which a court may grant one
or other
of the substitute remedies in sub-paragraph (ii) in lieu of
the usual remedy in para (i), it seems to me that the remedy of
compensation
must have been intended by the lawmaker as a remedy for
the benefit of an aggrieved party in the review proceedings, granted
because such party will enjoy neither a reconsideration of his
administrative application by the original administrator nor obtain
the benefit of a substituted administrative decision by the court. I
do not say that an aggrieved party in review proceedings
is entitled
to compensation merely because there has been neither a remittal nor
a substitute decision by the court but I do
hold that compensation
is not available as a remedy if the usual remedy of remittal has
been granted or if exceptionally the
court has substituted its own
decision for that of the administrator.
It does not necessarily follow from an acceptance of
these two legs of the argument that compensation can only be awarded
to the
applicant for review and not to a respondent. As this case
shows, there may be persons other than the applicant for review who
have suffered harm in consequence of unlawful administrative action
and who would thus be aggrieved. Once the court has determined
that
the administrative action was irregular and should be set aside, all
the persons interested in the matter and cited as parties
are
arguably entitled to be heard as to the appropriate relief to be
granted. Often the party most keenly interested in receiving
a
favourable decision on an administrative application will (as here)
be a respondent, not an applicant. If an earlier favourable
administrative decision is set aside on review, such a respondent
should not be precluded from contending, for example, that
the
matter should be determined by the court in terms of
s 8(1)(c)(ii)(aa) rather than being remitted. If that is so,
and if it should emerge that neither a remittal nor a substituted
decision is feasible, why should such a respondent not be entitled
to the further alternative remedy of compensation? Item (bb) of the
sub-paragraph does not in terms limit the range of persons
to whom
the administrator can be ordered to pay compensation. It is however
unnecessary for me in this case to express a final
opinion on
whether the compensation remedy is available to a respondent.
In summary, I consider, firstly, that on a proper
interpretation of s 8(1)(c) the remedies of remittal
(sub-paragraph (i))
and of a substituted decision or compensation
(sub-paragraph (ii)(aa) and (bb)) are mutually exclusive so that if
the usual remedy
of remittal is granted compensation may not be
awarded; and second, that exceptionality in sub-paragraph (ii) has
to do with
the circumstances which exceptionally justify the
granting of one or other of the unusual remedies in sub-paragraph
(ii) in lieu
of the usual remedy of remittal in sub-paragraph (i)
rather than with circumstances which render the administrative
decision
exceptionally bad.
It is true that on this interpretation affected parties
will often be precluded from obtaining compensation under PAJA in
respect
of loss suffered as a result of very bad administrative
decisions, because often in such cases the remedy of remittal will
remain
appropriate or there may be scope for a substituted
administrative decision by the court. I do not regard this as a
justification
for departing from what seems to me to be the clear
meaning of s 8(1)(c). It must be remembered that the law of
delict and
perhaps s 38 of the Constitution remain to provide
redress in the form of damages in cases not covered by
s 8(1)(c)(ii)(bb).
I am aware that our courts have been
cautious in imposing liability on public bodies for the negligent
exercise of their powers.
This caution reflects what is regarded as
a proper balancing of the policy considerations relevant to a
determination as to whether
a public body has acted wrongfully (in
the delictual sense) when performing an administrative function. In
Steenkamp NO v Provincial Tender Board, Eastern Cape
2007 (3)
SA 121
(CC) Moseneke DCJ, writing for the majority, reviewed the
leading cases (paras 38-56) and concluded that a successful tenderer
did not have a claim for out-of-pocket expenses in circumstances
where the tender was later set aside at the instance of an
unsuccessful tenderer. He considered that there was nothing in the
governing legislation which explicitly or by implication
contemplated that an improper but honest exercise of the discretion
of the tender board might attract a delictual right of action
in
favour of a disappointed tenderer (para 47). He proceeded to
consider a submission by the successful tenderer that there were
no
alternative remedies. Moseneke DCJ pointed out that in circumstances
such as those in
Steenkamp
there was in principle the
alternative remedy of a renewed opportunity to tender pursuant to
the setting aside of the invalid
decision (paras 49-51). In
South
African Post Office v De Lacy & Another
2009 (5) SA 255
(SCA) the Supreme Court of Appeal said, with reference to
Steenkamp
and other cases, that [a] irregularities falling short of
dishonesty, [b] incompetence on the part of those who evaluated the
tender; and [c] even conduct that amounts to negligence, will
not found a claim for damages at the hands of an unsuccessful
tenderer – a claim will lie only if it is established that the
award of the contract to the rival was brought about by
dishonest or
fraudulent conduct (para 14). I express no view as to whether Simcha
could successfully sue the City in delict;
there might be grounds on
which Simcha could distinguish its position from those of the
claimants in leading reported judgments.
However, and if it be
assumed that a delictual action would fail, that is not a reason to
extend the scope of s 8(1)(c)(ii)(bb)
beyond what I regard as
its proper boundaries, namely an exceptional grant of compensation
in review proceedings where an applicant
(or perhaps a respondent)
is unable to obtain a reconsideration of his administrative
application or a substituted decision by
the court. If anything, to
interpret s 8(1)(c)(ii)(bb) in the way for which Simcha argues,
ie as a remedy available to an
aggrieved party even where the
invalid decision has been set aside and can be reconsidered by the
administrator, would run contrary
to one of the important policy
considerations which has impelled our courts to refrain from
imposing delictual liability.
The only case to which I was referred dealing
specifically with a claim for compensation in terms of
s 8(1)(c)(ii)(bb) of
PAJA is the judgment of Selekowitz J in
Darson Construction (Pty) Ltd v City of Cape Town & Another
2007 (4) SA 488
(C). In that case the applicant for review was an
unsuccessful tenderer for a civil engineering contract. The court
found that
the decision to award the tender to the second respondent
was invalid because it had been taken by the wrong official. The
learned
judge said that s 8(1)(c) reflected ‘the
common-law’s position where the preferred order is one of
setting aside
the invalid decision and sending the matter back to
the relevant administrator rather than the Court substituting its
own decision’
(at 501H-I). He said that on the facts of the
case before him there was no question of remitting the decision to
the proper authority
for reconsideration, particularly because the
period of the civil engineering contract which had been put out to
tender had already
run its course (502F-G). He also found that there
was no basis for the court to substitute its own decision for that
of the relevant
administrator (502J-503F). It was against that
background that Selekowitz J proceeded to consider the claim for
compensation.
After referring to various leading cases on
constitutional and delictual damages for malperformance of statutory
functions (504F-509E),
he concluded that it would not be just and
equitable to award the applicant its alleged loss of profit
(509E-510D) but that the
applicant was entitled to some compensation
for the manner in which the City had breached the applicant’s
right to administrative
justice, such compensation to be computed
with reference to the applicant’s out-of-pocket expenses in
connection with the
unsuccessful tender (510E-G). Selekowitz J did
not analyse the structure of s 8(1)(c) and make the specific
legal findings
I have made regarding its scope. As a fact, though,
the party to whom compensation was awarded in that case was the
aggrieved
applicant, and compensation was awarded because neither
the remedy of remittal nor a substituted decision was feasible or
appropriate.
Another case to which I should refer is
Minister of
Defence & Others v Dunn
2007 (6) SA 52
(SCA), which received
a passing reference in a footnote to Simcha’s heads of
argument. The court
a quo
found that the Department’s
decision to promote another official rather than Dunn was reviewable
but that it would not
be in the interests of justice to order the
appointment of the rival candidate to be set aside. Instead, and as
compensation
in terms of s 8(1)(c)(ii)(bb), the Department was
directed to ensure that Dunn received the same benefits as if he had
been
promoted. The Supreme Court of Appeal found that the
Department’s promotion decision was not vitiated by any
irregularities.
Lewis AJA said that it was nevertheless appropriate
to consider whether, on the finding made by the court
a quo
on the merits, compensation in terms of PAJA should have been
awarded. She emphasised that the supposed irregularities in the
appointment decision were errors in process, and that it could not
be said that Dunn would necessarily have obtained the promotion
if a
proper process had been followed. Dunn had thus not proved any loss
for which compensation could be awarded.
The court
a quo
and the Supreme Court of Appeal
in
Dunn
did not consider the precise arguments addressed to
me regarding the construction and scope of s 8(1)(c) of PAJA.
However,
the question of compensation arose in circumstances where
neither a remittal nor a substituted decision by the court were
considered
feasible. I do not find anything in the judgment of the
Supreme Court of Appeal which is inconsistent with the view I take
of
the matter.
Simcha’s claim for compensation thus cannot
succeed. Although the order of 7 August 2013 did not expressly
provide for a
remittal to the City of Simcha’s application for
the approval of its building plans, that was in my view its legal
effect.
The review court did not find, and was not asked to find,
that Simcha’s application for building plan approval in 2008
was a defective or invalid application. Since the order on review
was granted by agreement, no reasons for the order were given,
but
it is perfectly clear from the history of the matter that nobody
understood the order as finally determining that the building
plans
submitted by Simcha in 2008 were not able to be approved. All that
was set aside was the approval of the application. The
review court
did not substitute for that approval a refusal of the building plan
application. The legal position, upon the granting
of the review
order, was that the 2008 application for building plan approval
remained before the City and Simcha was entitled
to a decision on
that application. That being the obvious purport of the order, it is
not open to the review court to grant either
of the exceptional
alternative remedies in para (ii) of sub-section 8(c). (The fact
that Simcha is or was entitled to a decision
on its application for
building plan approval would naturally not preclude the City, in the
process of reconsideration, from
following pre-approval procedures
which it did not follow before, including a process of public
participation.)
In any event, and given my interpretation of s 8(1)(c),
the present case is not an ‘exceptional’ one within the
meaning of sub-section (ii). For my part, I think the City’s
approval of Simcha’s building plans and those of thousands
of
other applicants during the second half of 2008 in violation of the
Walele
judgment was a serious dereliction of duty. The City
should, in my view, either have placed a moratorium on the approval
of building
plans or at least put in place a provisional procedure
for complying with
Walele
until final guidelines could be
formulated. The one thing the City must have known would not pass
muster was the perpetuation
of the procedure which was found in
Walele
to be unlawful. In abstract, therefore, I agree with
Mr Hodes that the City’s decision to approve Simcha’s
building
plans was a conspicuously bad one. However, and as I have
said, exceptionality in the context of s 8(1)(c)(ii) is
concerned
with circumstances justifying a departure from the usual
remedy of setting aside the administrative action and remitting the
matter for reconsideration. The review application in the current
matter did not present any exceptional circumstances justifying
a
departure from the usual remedy of remittal (even if that remedy was
not expressly sought). Since January 2009 the City has
had in place
appropriate procedures for complying with
Walele
. Nobody
claims that the City’s officials are incapable of competently
reconsidering Simcha’s building plans or that
there is any
other reason why the application for building plan approval should
not be reconsidered. (As a fact, the City is
currently considering
Simcha’s building plans. I do not know whether those building
plans are the same, or substantially
the same, as those submitted
for consideration in 2007/2008. Although the City is following a
fresh process in considering these
plans, it is not altogether clear
whether Simcha has made a new application for plan approval. Mr
Rosenberg for the City informed
me from the bar that the City would
not levy a new scrutiny fee if the plans were the same as those
previously considered by
the City.)
If these difficulties had not stood in Simcha’s
way, a further question would have arisen – as it did in
Dunn
– as to whether the losses which Simcha claims to have
suffered were caused by the City’s defective approval of
Simcha’s building plans. As to the scrutiny fee, it seems to
me that if Simcha now merely requires the City properly to
consider
and adjudicate upon the application for the approval of the building
plans submitted in 2007/2008, no further scrutiny
fee should be
payable. The payment of the original scrutiny fee in 2008 would thus
not have been a wasted expense. As to the
costs which Simcha
occurred in late 2012 in shutting down the building operations which
it had resumed in May 2012, the question
may arise whether these
costs would not in any event have been incurred. This would require
an assessment as to what would have
happened if Moir in 2008 had
prepared a recommendation in accordance with
Walele
(this
being the only respect in which Simcha alleges the City to have
acted in a conspicuously bad way). Given the evidence of
Moir and
Theron as to the consideration they gave to the relevant issues in
approving the plans in 2008, one might infer that
the preparation of
a reasoned report in accordance with
Walele
would not have
led to a different result, ie the plans would still have been
approved. Events would then have unfolded as they
did, and the
applicants would have issued the same interdict proceedings, based
on the two original review grounds mentioned
in the founding papers.
If the court hearing the interdict proceedings had granted an
interim interdict based on one or other
of those grounds, Simcha
would have incurred the same shut-down costs as it now claims from
the City. Simcha’s contention
in the proceedings before me was
that those other two grounds were wholly without merit, and that the
interdict was granted and
the review conceded only because of the
Walele
point. In view of the conclusion I have reached on
other issues, I fortunately do not need to go into the question as
to whether
Simcha has shown that an interim interdict would probably
not have been granted on either the split-zoning issue or on the
derogation-from-value
issue.
Costs of the review
Mr Hodes accepted that the costs in the review
application turned on the outcome of the compensation claim. Because
the compensation
claim fails, Simcha must pay the City’s costs
in the review application. I should emphasise that the costs in
question
are those arising out of the affidavits filed in connection
with compensation together with the appearance on 11 November 2013
to the extent that such appearance related to the claim for
compensation. No costs are payable by any of the parties in
connection
with the review relief granted by agreement on 7 August
2013, because the applicants did not seek costs and because Simcha
did
not, apart from its claim for compensation, incur any costs in
relation to the review application for which the City could
notionally
be held liable.
Costs in the interdict
The applicants were represented at the hearing before
me by Mr Dickerson SC leading Mr Baguley. Their only concern at the
hearing
related to the costs of the interdict application. In the
interdict application the applicants sought costs against Simcha
only.
Mr Dickerson submitted that Simcha should indeed pay the costs
though he added that it would be a matter of indifference to the
applicants whether their costs in the interdict were paid by Simcha
or by the City. In other words, I understood him to say that
if I
were persuaded by Simcha that the City should pay the applicants’
interdict costs, the applicants would not object
to that outcome but
it was not open to them specifically to seek or support such an
order.
The court has a wide discretion in regard to costs. The
nub of the matter here is whether Simcha’s initial or
continued
opposition to the interdict application was caused by a
reprehensible failure on the part of the City to disclose to Simcha
that
the City’s failure to comply with
Walele
in the
approval of Simcha’s building plans would give the applicants
an unbeatable case. I do not think there is a sufficient
basis for
such a finding. Simcha, for perhaps understandable commercial
reasons, was reluctant to stop the building work which
it had
resumed in May 2012. By way of letters dated 23 October 2012 both
Simcha and the City were informed of the essential basis
of the
review proceedings which the applicants intended to launch. The fact
that building plan approval needed to be informed
by a report from
the BCO was highlighted in these letters in the context of a
contention by the applicants that the City could
not properly have
applied its mind to the criteria stipulated in s 7(1) of the
NBA. From that point onwards, Simcha was
in a position to
investigate the merits of the proposed review, including the cogency
and rationality of any report which the
BCO had prepared in
compliance with
Walele
. There is no allegation by Simcha that
the City was not willing to provide information to Simcha upon
enquiry.
After the interdict application was launched, Simcha’s
legal representatives consulted with Moir (who by that stage was no
longer employed by the City). The affidavit which was prepared for
his signature was conspicuous in not addressing the question
whether
he had prepared a reasoned report for Theron in compliance with
Walele
. It is true that the
Walele
point was not taken
in the founding papers but that was because the applicants
themselves did not know whether a reasoned report
had been prepared;
they had been told by the City on 13 November 2012 that they could
only have access to the Simcha documentation
pursuant to a request
in terms of the
Promotion of Access to Information Act 2 of 2000
.
However, paragraphs 75 and 76 of their founding papers were a clear
warning signal that the
Walele
point might come into play,
because there the applicants pointed out that building plans could
only be approved after the preparation
of a fully motivated report
by the BCO and they expressed the view that the BCO’s report
in the present case would inevitably
reflect that he had not applied
his mind properly to the matter. I find it inconceivable that
Simcha’s legal representatives
would not have asked Moir
whether he had prepared a fully motivated report. Although he said
in his affidavit of 1 December 2012
that he had not had time to
analyse the documentation regarding his recommendation to Theron, he
was able to confirm to the applicants’
attorney on 3 December
2012 that his recommendation had been made by ticking a box (as in
Walele
) and not by way of a reasoned written report.
Simcha also filed in the interdict proceedings an
affidavit by Mr DR Saunders, a town planning expert. He made this
affidavit
on 30 November 2012. He said that he had inspected the
approved plans ‘and all supporting documentation with regard
to
Erf 5284..’. He expressed the view that the City had
followed due legal process in scrutinising and approving the plans
and that there was no evidence that the City had overlooked any
prescribed procedural action or not taken into account any
applicable
law. The level of detail in this affidavit makes it
likely that Saunders began his research into the City’s files
on Erf
5284 and on the Four Seasons building before the interdict
application was launched on 21 November 2012. It appears probable
that such research began around the time of Simcha’s
attorneys’ letter to the applicants’ attorneys dated 30
October 2012 (see in particular para 23 thereof). In their letter of
13 November 2012 Simcha’s attorneys referred to opinions
on
the split-zoning issue from three senior counsel and from three town
planners which were on the City’s file relating
to the Four
Seasons building; these same opinions were mentioned by Saunders in
his affidavit, and it seems probable that Saunders’
inspection
of the files was the source of the information in the letter of 13
November 2012. It thus appears that by the time
the interdict
application was launched Simcha knew that the City’s files did
not include a reasoned BCO report complying
with
Walele
. (It
is common cause that when the City eventually produced its record in
terms of
rule 53
no such report was included.)
Even after the filing of the replying papers (which
disclosed the content of the discussion between the applicants’
attorney
and Moir on 3 December 2012), Simcha continued with its
opposition. Simcha contended at the interdict hearing on 7 December
2012
that it was not permissible for the applicants to take the
Walele
point in reply and that the applicants should in any
event be non-suited by reason of delay. In the circumstances, I
cannot find
that Simcha would have conceded the interdict if the
City had disclosed to Simcha, shortly before the launching of the
interdict,
that the BCO had not furnished a reasoned report in
accordance with
Walele
. Indeed, I think it likely, for the
reasons I have given, that Simcha knew prior to the institution of
proceedings that no such
report existed.
Mr de Waal’s alternative contention was that the
applicants should bear their own costs in the interdict. This
argument
was based on the alleged delay on the part of the
applicants between May and November 2012. I do not think that this
is a proper
basis to deny the applicants their costs. The alleged
unreasonable delay was a matter which could have been raised, and
was raised,
in opposition to the interdict. Dolamo AJ rejected the
delay defence (see paras 23 and 24 of his judgment). That being so,
I
do not think it can be resurrected simply for the purposes of
punishing the applicants on costs.
I therefore consider that the interdict costs should
follow the result, ie that Simcha should pay the applicants’
interdict
costs and that the City should not be ordered to pay the
costs of either Simcha or the applicants.
Conclusion
I make the following order:
[a] The first respondent’s claim against the
second respondent for compensation in terms of
s 8(1)(c)(ii)(bb)
of the
Promotion of Administrative Justice Act 3 of 2000
is
dismissed.
[b] The first respondent is directed to pay the
second respondent’s costs in relation to the said claim for
compensation,
including the costs of two counsel.
[c] In regard to the costs in case 22197/12
reserved by this court’s judgment of 12 December 2012, the
first respondent
is directed to pay the applicants’ costs,
including the costs of two counsel.
______________________
ROGERS J
APPEARANCES
For Applicants: Mr J Dickerson SC & Mr D Baguley
Instructed by:
Slabbert Venter Yanoutsos Inc
65 Constantia Main Road
Wynberg
For 1
st
Respondent: Mr PB Hodes SC & Mr
J. de Waal
Instructed by:
Brink de Beer and Potgieter Attorneys
Tyger Valley Chambers 1
27 Willie van Schoor Drive
Tygervalley
For 2
nd
Respondent: Mr S Rosenberg & Ms E
van Huysteen
Instructed by:
Webber Wentzel Attorneys
15
th
Floor. Convention Tower
Heerengracht
Foreshore
Cape Town