True Motives 84 (Pty) Ltd v Mahdi and Another

• Jurisdiction: South Africa
• Citation: 2009 (4) SA 153 (SCA)

True Motives 84 (Pty) Ltd v Mahdi and Another
2009 (4) SA 153 (SCA)

2009 (4) SA p153

Citation	2009 (4) SA 153 (SCA)
Case No	543/07
Court	Supreme Court of Appeal
Judge	Scott JA, Cameron JA, Heher JA, Jafta JA and Combrinck JA
Heard	August 28, 2008
Judgment	March 3, 2009
Counsel	PM Kennedy SC for the appellant.; No appearance for the first respondent.; AE Franklin SC (with DL Wood) for the second respondent.; PJ Olsen SC (with AA Gabriel) for the amicus curiae.

Flynote : Sleutelwoorde B

Court — Precedent and stare decisis — Decision of Constitutional Court — Whether binding on Supreme Court of Appeal — Interpretation of Act of Parliament — SCA declining to follow CC dictum on interpretation of Act on ground that it was clearly wrong and in any event obiter. C

Local authority — Buildings — Building plans — Approval — Derogation from value of adjoining properties — Duties of decision-maker — Must satisfy himself that none of statutory disqualifying factors triggered by erection of building in question — Decision-maker obliged to refuse approval where satisfied that building to be erected in such manner or will be of such D nature or appearance that it will probably, or in fact, derogate from value of adjoining or neighbouring properties — National Building Regulations and Building Standards Act 103 of 1977, s 7(1)(b)(ii)(aa)(ccc).

Local authority — Buildings — Building plans — Approval — Derogation from value of adjoining properties — Duties of decision-maker — Obliged to E refuse approval where satisfied that building to be erected in such manner or will be of such nature or appearance that it will probably, or in fact, derogate from value of adjoining or neighbouring properties — National Building Regulations and Building Standards Act 103 of 1977, s 7(1)(b)(ii)(aa)(ccc).

Local authority — Buildings — Building plans — Approval — Derogation from F value of adjoining properties — Value meaning market value — Hypothetical informed willing buyer and seller building inherent advantages and disadvantages flowing from lawful exercise of rights into market price — Derogation from market value commencing only when influence of such aspects exceeding contemplation of hypothetical informed parties — G National Building Regulations and Building Standards Act 103 of 1977, s 7(1)(b)(ii)(aa)(ccc).

Local authority — Buildings — Building plans — Approval — Procedure — Refusal mandatory where local authority satisfied that plans not complying with statutory requirements, or where it doubts that requirements satisfied — H Local authority required to be positively satisfied that statutory parameters met — National Building Regulations and Building Standards Act 103 of 1977, s 7(1)(a).

Headnote : Kopnota

Section 7 of the National Building Regulations and Building Standards Act 103 of 1977 (the NBR Act) provides as follows: I

'(1) If a local authority, having considered a recommendation referred to in section 6(1)(a) -

(a)

is satisfied that the application in question complies with the requirements of this Act and any other applicable law, it shall grant its approval in respect thereof;

(b) (i)

is not so satisfied; or J

2009 (4) SA p154

(i)

A is satisfied that the building to which the application in question relates -

(aa)

is to be erected in such manner or will be of such nature or appearance that -

(aaa)

the area in which it is to be erected will probably or in fact be disfigured thereby;

(bbb)

it will probably or in fact be unsightly or objectionable;

(ccc)

it will probably or in fact derogate from the value of adjoining or neighbouring properties;

(bb)

B will probably or in fact be dangerous to life or property,

such local authority shall refuse to grant its approval in respect thereof and give written reasons for such refusal .'

Headnote : Kopnota

C The second respondent, a local authority, had approved certain building plans submitted to it by the first respondent. The plans outlined proposed alterations to his home. The plans were approved under s 4(1) (which requires local authority approval for buildings and alterations requiring the submission of building plans), read with the above-quoted s 7(1), of the NBR Act. The appellant, the owner of the adjoining erf, unhappy with the D look and extent of the alterations being done to the first respondent's home, asked the High Court for a declaratory order to the effect that the second respondent had failed to lawfully approve the building plans as intended in s 6 (which regulates the functions of building control officers) and s 7 of the Act, alternatively for an order setting aside the second respondent's decision to approve the plans. The High Court dismissed the application E and granted the appellant leave to appeal to the Supreme Court of Appeal (SCA) on the issue of whether or not the second respondent's decision fell to be set aside in the light of a proper interpretation and application of s 7. The appellant's principal submissions were:

(i)

That s 7 required a local authority to be satisfied that its approval of a building plan did not result in a building that would diminish (derogate F from) the value of a neighbouring property. In this regard the appellant relied on a dictum in para 23 of Paola v Jeeva NO and Others 2004 (1) SA 396 (SCA) ([2003] 4 All SA 433), stating that once it was clear that the execution of proposed plans would diminish the value of adjoining property, s 7(1)(b)(ii)(aa)(ccc) would prohibit their approval. (This dictum was quoted with approval by the majority in para 32 of Walele G v The City of Cape Town and Others 2008 (6) SA 129 (CC).) The appellant also relied on a statement in para 55 of Walele to the effect that any approval of plans facilitating the erection of a building that devalued neighbouring properties was liable to be set aside on review.

(ii)

That the building control officer who had approved the plans had either not applied his mind to derogation of value, or had done so in a H superficial manner that fell short of achieving the 'satisfaction' that s 7(1)(b)(ii) required of him.

Held, as to (i), that a refusal under s 7(1)(a) was mandatory not only when the local authority was satisfied that the plans did not comply with the Act and any other applicable law, but also when the local authority remained in doubt. The test imposed by s 7(1)(a) for the approval of plans required the local I authority to be positively satisfied that the parameters of the test laid down had been met. (Paragraph [19] at 162C - E.)

Held, further, that the requirements of s 7(1)(b)(ii) were the following: (a) if the local authority was satisfied (ie as with s 7(1)(a), was capable of reaching a positive conclusion) that the building would, for instance, disfigure the area (s 7(1)(b)(ii)(aa)(aaa)), it had to refuse its approval. That involved being J satisfied that the particular undesirable outcome was certain; (b) if the local

2009 (4) SA p155

authority was satisfied that the building would probably have a detrimental A effect specified in subpara (aa) or (bb) of s 7(1)(b)(ii), for example, derogate from the value of neighbouring property (s 7(1)(b)(ii)(aa)(ccc)), it had to refuse its approval. The decision-maker's judgment would determine whether the statutory level of satisfaction (that the approval would probably result in derogation of value) had been reached or not; and (c) if the local authority was not satisfied on either of the aforegoing, then the refusal of the B building plans was not mandated, or indeed allowed, by s 7(1)(b)(ii). The decision-maker then had to act on its positive finding with respect to the requirements of s 7(1)(a) of the Act. (Paragraphs [22] and[31] at 162I - 163B and 166B - D.)

Held, further, that, contrary to the appellant's contentions, Paola was not C authority for the propositions (a) that the approval of a plan for a building, the erection of which would result in a derogation in value, was per se invalid; or (b) that the question of what the local authority was satisfied about (or not satisfied about) was not a relevant consideration and the court's own determination of the issue as to whether a building would derogate from value justified the setting-aside of a local authority's approval D of a plan; (c) a local authority had to be satisfied that none of the undesirable outcomes set out in s 7(1)(b)(ii) would be a consequence of the erection of the building concerned. (Paragraph[29] at 164G - H.)

Held, further, that another aspect of s 7(1)(b)(ii) that needed clarification was the reference to a reduction in 'market value'. 'Market value' was the price that an informed willing buyer would pay to an informed willing seller for the E property. The hypothetical informed buyer and seller would always be aware of inherent advantages and disadvantages flowing from the lawful exercise of rights and would build them into market price according to how they assessed the likelihood that they would occur. Derogation from market value only commenced when the influence of such aspects exceeded the contemplation of the hypothetical informed parties. F (Paragraph [30] at 164I - 165G.)

Held, further, that the dicta in paras 32 and 63 of Walele relied on by the appellant were not supported by Paola v Jeeva, and wrong, although delivered obiter. (Paragraph [35] at 167H.)

Held, further, that the dictum in para 55 of Walele wrongly created the impression G that a right of appeal lay to a court when an objector contended that the erection of a building according to an approved building plan would as a matter of fact derogate from the value of his or her property. The existence of such a right was in conflict with the appeal procedure laid down in s 9 of the Act, ignored the nature of...