DB Property Development Company (Pty) Ltd v Executive Mayor Stellenbosch Municipality and others
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Cloete J |
| Judgment Date | 10 August 2023 |
| Citation | 2023 JDR 2974 (WCC) |
| Docket Number | 15274/2021 |
Cloete J:
Introduction
The applicant (“DB”) is a property development company. In its final amended relief DB seeks the review and setting aside of a decision taken by the first
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respondent (“Executive Mayor”) on 24 May 2023 dismissing an appeal against two conditions of the land use approval decision of the second respondent (“Director”) of 22 June 2021. In the event it is successful, DB asks that the appeal be referred back to the Executive Mayor for reconsideration. The respondents agree that if the review succeeds a referral back (or remittal) is the appropriate remedy, but differ from DB in respect of the direction it seeks as part of that remittal.
DB’s attack on the lawfulness of certain provisions in the 2020/21 Development Charges Policy (“MDC Policy”) of the third respondent (“Municipality”) has fallen away, since it was premised on a finding by the court that the MDC Policy is a binding legislative instrument. In light of the Supreme Court of Appeal decision in Sasol, [1] cited with approval by the Constitutional Court in Rivonia Primary School, [2] there is no longer any dispute that ‘a policy serves as a guide to decision-making and cannot bind the decision-maker inflexibly’.
The two disputed conditions
These relate to development charges imposed on the approval of DB’s land development application. DB accepts that its planned development will have an impact on municipal bulk infrastructure and that it is obliged to contribute
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towards that infrastructure, which includes water, sewerage, stormwater, solid-waste, roads and community services.
The first condition challenged is the amount imposed as a development charge for municipal road infrastructure. It is common cause that DB’s property, Portion 43 of Farm No.65, Stellenbosch Division (“the Property”) is situated in the Koelenhof area of the Municipality approximately 7km northwest of Stellenbosch Town. The surrounding road network, namely Bottelary Road (M23) and the R304, are provincial roads in which the development is embedded. As determined by DB’s road engineers, it will effectively be a secondary user of the municipal (as opposed to the provincial) road infrastructure. In a nutshell, DB takes issue with the conclusion by the Director, and subsequently by the Executive Mayor, that all the trips to be generated by its development will distribute to the Stellenbosch Town (municipal) impact zone.
DB’s main contention is that contrary to the applicable statutory framework, what it is being asked to pay as a development charge for municipal roads has not properly taken into account the demand (or impact) which its proposed development will have on the municipal road infrastructure, given the development’s location within the provincial road infrastructure. DB contends that the MDC Policy and Municipality’s Development Charges Tariff Tables, which together determine the approach and quantification of development charges, constitute a policy and a guideline, not a rigid statutory framework to be applied inflexibly.
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It submits that when making their decisions at first instance and on appeal, both decision-makers however fettered their discretion, and mechanically calculated the development charges for municipal roads according to the approved land uses by using the tariff tables for the Stellenbosch Town impact zone, which includes Koelenhof, despite the development’s traffic only having a secondary impact on the municipal road infrastructure. DB submits that in doing so, the decision-makers failed to apply their minds properly to its reduced utilisation of municipal roads, which required them to deviate from the MDC Policy and adjust the development charge accordingly.
In the answering affidavit the respondents contended that the MDC Policy has the status of subordinate legislation and cannot be deviated from by decision-makers without violating the principle of legality (as mentioned above they no longer maintain this stance). The respondents however persist in their contention that neither decision-maker had an “unfettered” discretion to circumvent the formula prescribed by the MDC Policy; and that to the extent the aforementioned policy does ‘impose’ a discretion on them, it is limited and in the particular circumstances such discretion ‘was not activated’.
The second condition challenged is that in the approval the Municipality made a very substantial reduction in the amount of the development charges credit granted to DB as a condition of a previous approval (“the 2018 approval”) from R25 490 015.44 (15% of the total development charges imposed pursuant to the 2018 approval) to R1 447 158.39 (2% of the total development charges of R81 708 331.11 imposed). DB maintains that the Municipality’s previously
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granted credit remains valid until set aside, and the current credit should have been calculated inclusive of DB’s vested rights. The respondents dispute the previously granted credit should have been taken into account.
The statutory context of development charges
The approval of a land development application ordinarily results in new development that increases the demand on municipal external engineering services. An applicant for land development is responsible for the provision and installation of internal engineering services whereas a municipality is responsible for the provision of external engineering services such as water, sewerage, electricity and municipal roads. Development charges are a once-off capital contribution an applicant pays to a municipality towards the capital costs of the municipal external engineering services needed to service an applicant’s increased demand on these services.
The Spatial Planning and Land Use Management Act [3] (“SPLUMA”) authorises the promulgation of provincial legislation to regulate the provision of engineering services and the imposition of development charges including the calculation thereof. In turn s 40 of the provincial legislation, namely the Western Cape Land Use Planning Act [4] (“LUPA”) provides for the imposition of conditions on approvals, the following provisions being relevant to the matter at hand:
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Conditions
When a municipality approves a land use application subject to conditions, the conditions must be reasonable conditions and must arise from the approval of the proposed utilisation of land.
Conditions imposed in accordance with subsection (1) may include, but are not limited to, conditions relating to-
(a)
the provision of engineering services and infrastructure;
(b)
the . . . payment of money;. . .
Subject to subsection (12), a condition contemplated in subsection (2)(b) may require a proportional contribution to municipal public expenditure according to the normal need therefor arising from the approval, as determined by the municipality in accordance with norms and standards as may be prescribed. . .
When determining the contribution contemplated in subsection. . . (3). . ., a municipality must have regard to at least-
(a)
the municipal service infrastructure and amenities for the land concerned that are needed for...
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