Harvey v Umhlatuze Municipality and Others

• Jurisdiction: South Africa
• Judge: YN Moodley AJ
• Judgment Date: 29 November 2010
• Citation: 2011 (1) SA 601 (KZP)
• Docket Number: 4387/08
• Hearing Date: 03 December 2010
• Court: KwaZulu-Natal High Court, Pietermaritzburg
• Counsel: AA Gabriel for the applicant. AJ Rall SC (with P Blomkamp) for the first respondent.

YN Moodley AJ: E

The issue in the case.

[1] This is a unique case. It raises the novel question of whether a F previous owner of immovable property, from whom his property was expropriated by an organ of State for a specific public purpose against payment of compensation, has the right to reclaim such property when the public purpose could not be realised, and whereafter the organ of State decides to change the purpose in relation to its use. Insofar as it could be established there appears to be no precedent on the issue in G South African law. The case involves both legal and constitutional questions which require to be considered in the context of the facts of the present case.

The parties and the relief claimed

H [2] The applicant is John Rex Harvey, a 65-year-old male, and a councillor of the Umhlatuze Municipality, which is the first respondent. The first respondent is a duly established municipality in terms of the Local Government: Municipal Structures Act 117 of 1998, and the Local Government: Municipal Systems Act 32 of 2000 (MSA). The I applicant is a member of its executive committee. The second respondent is Crystal Lagoon Investments 44 CC, a duly established close corporation. The third respondent is the Registrar of Deeds of KwaZulu-Natal, who has been cited as an interested party and against whom no relief is being claimed.

[3] The applicant was the previous owner of certain immovable properties, J more fully described as Lot 32, Richards Bay (Extension 1), in extent 1450 m2;

YN Moodley AJ

and Lot 33, Richards Bay (Extension 1), in extent 1425 m2. A Lots 32 and 33 were expropriated from the applicant by the first respondent's predecessor-in-title. The first respondent's predecessor-in-title expropriated the applicant's properties with the objective of using them, together with certain other properties, for a public purpose. (For convenience, I shall hereinafter refer to the first respondent's B predecessor-in-title as the first respondent). However, the public purpose initially intended by the first respondent could not be achieved on the properties, and it accordingly changed the use for which it had expropriated them. It did so by rezoning the properties, and consolidating them with certain other properties in the area, which together became known as Portion 1 of the Ridge (The Ridge). The development and C related sale of The Ridge was put out to public tender to private developers. The second respondent participated in the tender process, and was the successful tenderer to purchase The Ridge, which included Lots 32 and 33.

[4] The Ridge is an area located in the Meerensee suburb of Richards Bay D and is the only elevated area in Richards Bay with a combined sea and harbour view. The site comprises a portion of Erven 15, 20, 21; Erven 22 – 33, 36, 67, 7732, 11500, 11499, 11502; a portion of the Remainder of Erf 35 and Erf 2627; and a portion of the Remainder of Erf 2627 all of the Lower Umfolozi. E

[5] The present application was brought by the applicant to review and set aside the resolution of the first respondent, at the meeting of its executive committee held on 20 March 2007, alternatively the resolution of the first respondent on 5 December 2006, to sell, by public tender, Lots 32 and 33, as part of the proposed consolidated lot as 'The Ridge F zoned General Residential 2'. The applicant also sought to review and set aside the decision of the first respondent's appeal committee, delivered on 20 September 2007, endorsing the decisions of the first respondent taken on 20 March 2007, alternatively, on 5 December 2006, as referred to above. In the alternative, applicant seeks to review and set aside the decision of the first respondent to award by public G tender, to the second respondent, a contract to buy and develop The Ridge, zoned General Residential 2, insofar as it affects the properties, Lots 32 and 33.

[6] The applicant also sought, and obtained, on an urgent basis, an interim order interdicting and restraining the first respondent from: (a) H consolidating or permitting the consolidating of Lots 32 and 33 with any other immovable property; (b) causing or permitting any township to be established on Lots 32 and 33; (c) transferring title in and to the immovable properties to the second respondent; (d) alienating or otherwise encumbering the immovable properties in any manner or form; and (e) causing or permitting the development of the immovable I properties in any manner or form. That order was granted by Madondo J, pending the outcome of this application.

[7] The second respondent did not file any opposition to the application.

[8] The applicant was represented by Ms Gabriel, and the first respondent was represented by Mr Rall SC, assisted by Mr Blomkamp. After both J

YN Moodley AJ

A counsel presented argument on the matter, and by agreement between themselves, they sought leave from the court to file further supplementary heads of argument. Thereafter, supplementary heads of argument on behalf of the first respondent were filed on 27 January 2010, and on behalf of the applicant on 26 March 2010.

The salient facts B

[9] The applicant purchased Lots 32 and 33 in 1978, erected his home thereon, and has lived there with his family ever since. At the time the applicant purchased Lots 32 and 33 they were zoned 'residential'. Prior C to the adoption of the Richards Bay Town Planning Scheme (in 1983) the area known as The Ridge, which included the applicant's properties, was rezoned as 'public open space'. During or about August 1992 the first respondent expropriated Lots 32 and 33 from the applicant. The expropriation was carried out in compliance with the first respondent's obligations in terms of s 67 of the Town Planning Ordinance 27 of 1949. D The first respondent intended to use Lots 32 and 33, together with a number of adjacent properties, all of which together formed The Ridge, to form a public open space, which could be used by the public as a passive recreational open space and a conservation area.

E [10] The applicant did not object to the expropriation of his properties, but requested an increase in the compensation that was offered to him. In fact, he instituted legal proceedings against the first respondent, in which he claimed additional compensation, but these proceedings were settled in terms of a settlement agreement. In terms of this settlement agreement the applicant confirmed that he was satisfied with the amount F of the consideration paid to him in respect of the expropriated properties, and accepted such payment in full and final settlement of all and any claims that he may have had against the first respondent in respect of the said expropriation.

[11] After the expropriation of the applicant's properties, the first G respondent took transfer of them, and the applicant's continued occupation of the house on those properties was as a tenant. The applicant's occupation was in terms of short-term leases entered into with the first respondent. It was a condition of these leases that their period was to be negotiated with the programming of the development of The Ridge.

H [12] The history of the town-planning resolutions in respect of The Ridge is set out in a report prepared by the planning department of the first respondent, which was prepared for consideration by the respondent's council, its executive committee, and its planning and sustainable- development committee. This document records the history behind the expropriation, the planning to develop The Ridge into a public recreational I open-space area, the eventual rezoning of The Ridge to General Residential 2, and all the resolutions taken by first respondent in these matters.

[13] This report records that, after having devoted a great deal of thought to devising ways of ensuring the satisfactory development of J The Ridge, the first respondent eventually came to the conclusion that

YN Moodley AJ

The Ridge could only be developed in a manner worthy of importance A and potential if the development scheme was designed as one architectural composition. This could only have been done if the properties along The Ridge were reserved for use as a public open space.

[14] The report goes on to record that the first respondent was involved, B since the early 1970s, in negotiations with the owners of properties on The Ridge, with a view to entering into agreements with such owners in respect of their properties, in terms of which their properties would be exchanged for other properties with equal value, or on the basis of an outright sale. It initiated the expropriation as early as 1973, and, with a notice dated 7 May 1992, it expropriated the properties on The Ridge, C with an effective date of 1 August 1992.

[15] As far as the planning of The Ridge to be used as a public open recreational space is concerned, the first respondent approved several proposals over the years for its development. In 1992 the first respondent approved in principle the development of The Ridge under a project D known as the Richards Bay Coastal Dunes and Beachfront Master Plan (resolution 2334). This resolution also determined the criteria for the development of The Ridge, all with a view to achieving its land use as a public open space. Between 1995 and 1996 further proposals were made for the development of The Ridge, which included combinations of tea gardens, museums, arts-and-crafts workshops, and information and E exhibition centres. These proposals were from time to time referred back by the first respondent, for the proponents' further consideration, with specific reference to possible new town-planning proposals. Although the proponents were offered an opportunity of putting together a detailed proposal, through the means of a...