---

IN THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA

CASE NO. 4387/08

In the matter between :

J.R HARVEY …....................................................................................................APPLICANT

and

UMHLATUZE MUNICIPALITY …................................................FIRST RESPONDENT

CRYSTAL LAGOON INVESTMENTS

44 CC …........................................................................................SECOND RESPONDENT

REGISTRAR OF DEEDS :

KWAZULU NATAL ….....................................................................THIRD RESPONDENT

JUDGMENT

MOODLEY AJ.

The Issue in the Case.

[1] This is a unique case. It raises the novel question of whether a 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 realized 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 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

[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 No. 117 of 1998 and Local Government: Municipal Systems Act No. 32 of 2000 ("MSA"). The 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 more fully described as Lot 32, Richards Bay (Extension 1) in extent 1 450 m² and Lot 33, Richards Bay (Extension 1) in extent 1 425 m2. 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 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 re-zoning the properties, consolidating them with certain other properties in the area which together became known as Portion 1 of the Ridge ('The Ridge'). The development and 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 Richard's Bay 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.

[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', 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 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) 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 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 S.C. assisted by Mr Blomkamp. After both 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

[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 to the adoption of the Richard's Bay Town Planning Scheme (in 1983) the area known as 'the Ridge' which included the Applicant's properties was re-zoned 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 Section 67 of the Town Planning Ordinance 27 of 1949. 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.

[10] The applicant did not object to the expropriation of his properties but requested an increase in the compensation than that which 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 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 which 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 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'.

[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 open space area, the eventual re-zoning 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 'The Ridge', the first respondent eventually came to the conclusion that 'The Ridge' could only be developed in a manner worthy of importance 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 since the early 1970's 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' with an effective date on 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 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, information and 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 consortium of developers, these efforts failed to produce any meaningful results. As a consequence the properties remained undeveloped for the purpose originally intended by first respondent.

[16] Since the original purpose for 'The Ridge' could not be achieved by 1996, the first respondent resolved to appoint a consultant to undertake a reassessment of the existing town planning proposals for 'The Ridge'. This resolution was later rescinded on 25 February 1997 when it was decided to call for proposals for the development of 'The Ridge'. This eventually led to the appointment of consultants who made certain proposals and eventually first respondent resolved on 27 October 1998 to accept the proposal of the consultants in principle (resolution 1495).

[17] Finally, by resolution 2061, which was proposed by one of first respondent's councilors and seconded by the applicant it was resolved on 21 September 1999 to accept the final report of the consultants. This proposal entailed medium density residential development together with associated private parking, garden areas and communal facilities for residents.

[18] On the 21 August 2001 the council of the first respondent resolved to re-zone the properties forming 'The Ridge' in accordance with the new development plans for the land. At the time it passed this resolution the first respondent was in possession of a legal opinion from Truter James de Ridder Attorneys dated March 1996. Subsequently during September 2001 the first respondent was furnished with a second legal opinion from attorneys, Shepstone & Wylie. I shall in due course deal with these two opinions. After obtaining the second legal opinion the first respondent resolved on 26 February 2002 to reaffirm its resolution of 21^st August 2001 to proceed with the re-zoning. The latter resolution was taken after reviewing whether certain properties which were leased including those of the applicant should be included or excluded and it was resolved to include these areas as part of the re-zoning. The first respondent subsequently followed the procedure prescribed by the Town Planning Ordinance for the re-zoning of the land. The re-zoning of the properties on 'The Ridge' were advertised and two objections were received but none of these were from the applicant. Subsequently by resolutions taken by the first respondent both these objections were dismissed. The re-zoning of the properties was eventually approved by the Provincial Planning and Development Commission on 27 November 2006.

[19] I revert to deal with the two legal opinions referred to above. The first opinion advised on two issues namely:

(a) Whether the first respondent could lawfully reverse (withdraw) the expropriation of the properties;

(b) If the first respondent were to re-zone 'The Ridge' to provide for a more commercially orientated usage, to what extent would first respondent be exposed to claims from its previous owners?

[20] The first issue raised was answered in the negative and first respondent was advised against withdrawing or reversing the expropriation. A decisive answer was not given to the second issue. The opinion expressed was that all the negotiations between the first respondent and the former owners of properties on 'The Ridge', including the expropriation of the applicant's properties were done on the basis of the first respondent's development policy to make the relevant area available for public open space purposes. It went on to state that some of the previous owners of properties on 'The Ridge' fairly readily agreed to exchange or sell their properties to the first respondent with a view to such properties being used for the first respondent's declared purposes. It stated further that it was conceivable that they might not have agreed so readily, or not at all, had the first respondent's intention at the time been to utilize 'The Ridge' for commercially orientated purposes. It expressed the view that it was clear that the first respondent did not at the time of acquiring 'The Ridge' properties intend to use them for any other purposes than those declared and therefore it could be argued that the first respondent acquired the properties under false pretenses. The prima facie view expressed was that the first respondent would not be exposed to any successful claims from previous owners were it to decide to re-zone the area for more commercially orientated purposes but that should this course be followed, it was to be expected that there would be accusations against the first respondent's morality and credibility.

[21] The second opinion was sought on the propriety, in a legal sense, of the proposed recommendation of the first respondent to advertise and implement the rezoning of the properties on 'The Ridge' for special residential purposes. This opinion writer was of the view that there was no impropriety or bad faith on the part of the first respondent when it expropriated the properties from the former owners. It stated that there was ample evidence that the intentions of the first respondent at all times prior to and incorporating the expropriation of the properties, and the re-zoning by means of their reservation of the land for public and semi-public purposes was a bona fide initiative by the first respondent. It stated further that there was no suggestion in the documents that anyone within the first respondent's sphere of influence held any intention of permitting the first respondent to profit from the re-zoning initiatives or the expropriation of the properties. However, the writer was of the view that the applicant's occupation of one of the properties in terms of a lease from the first respondent would present the first respondent with a problem should he decide to re­purchase the property. The view was also expressed that should the first respondent permit the applicant to re-purchase his property then other property owners will feel equally entitled to be permitted to re-purchase their own properties. The conclusion reached was that to avoid accusations of discriminatory treatment which, under the Constitution might be valid, first respondent was advised to decide to deal with the sale of the properties, once the re-zoning back to 'Special Residential' had been completed, on one or two possible bases, namely :

(a) To sell the properties back to the former owners at their fair market value and to auction off those properties where the owners had indicated that they are not interested in a re-purchase;

(b) To submit all properties to public auction on the basis that the first respondent is not obliged to accept any bids and the bids are to be subject to confirmation within fourteen days and are also to be subject to a right of first refusal on the part of any previous owner of specific properties.

It was felt by the writer that on this basis first respondent could not be accused of having acted in an unfairly, discriminatory or in an administratively unjust manner.

[22] On 5 December 2006, the first respondent's council resolved to consolidate the properties, comprising one block zoned General Residential 2 and another block zoned Hotel and to sell the property by public tender so it could be developed in accordance with the new zoning. At this stage the first respondent's council had the abovementioned two opinions in its possession.

[23] The first respondent was also given an opinion on 12 December 2006 which was obtained by the applicant. The issue raised in this opinion was whether it was within the power of the first respondent, having expropriated the property for a specific stated purpose, to use it for another purpose entirely unrelated to the motivation upon which reliance was placed for the original expropriation. The opinion expressed was that the first respondent could hardly ignore the ostensible basis on which it acquired the properties from the owners as this would amount to unjust administrative action. It was stated further that to render the administrative decision to sell the properties as being a just and equitable one, the first respondent would first have to negotiate with the previous owners to restore the status quo ante. This, so it was advised, would entail a re-transfer of the properties to the previous owners against repayment of the compensation they had received from the first respondent. Only if the previous owners were to decline such an offer or to waive their right to a return of the properties would the first respondent be at liberty to proceed as it wished to. The opinion concluded that to proceed otherwise would not be just and equitable conduct in terms of the Constitution of the Republic of South Africa Act No. 108 of 1996 ("the Constitution") and the Promotion of Administrative Justice Act No. 3 of 2000 ("PAJA")

[24] The above opinion was accompanied by a letter addressed by the applicant to the first respondent. In this letter the applicant stated that he was applying for his properties to be re-instated to him as they were wrongfully expropriated by the previous Richard's Bay Council. He also recorded in this letter that his property may qualify for heritage status and would therefore be exempt from demolition without permission being obtained from the relevant authority.

[25] On 20 March 2007, the executive committee of the first respondent, which by that time had all three of the abovementioned legal opinions, and the abovementioned letter recording a possible heritage status to applicant's property, re-confirmed the first respondent's council's resolution of 5 December 2006 but appended thereto the following three conditions namely :

(a) That previous owners and current lessees including the applicant be informed that due to the fact that many attempts to establish museums and ancillary facilities were unsuccessful after expropriation, such facilities were excluded from the planning framework of 'The Ridge';

(b) That the public tender include a condition requiring the status of the existing buildings situated on 'The Ridge' in terms of the KwaZulu Natal Heritage Act 109 of 1997 be investigated and a proposal as to the way forward needs to be submitted by the successful tenderer;

(c) That previous owners and current lessees, including the applicant be informed in writing that their request to reverse the expropriation was denied.

[26] On 3 April 2007 the full council of the first respondent reconfirmed its resolution of the 5 December 2006 and in addition incorporated in this resolution the matters referred to in paragraphs (a), (b) and (c) mentioned in the preceding paragraph. In other words the full council passed a resolution in identical terms to the resolution passed by the executive committee on 20 March 2007.

[27] On 4 May 2007 the applicant lodged an appeal to the appeal committee of the first respondent in respect of the "decisions taken recently by the executive Committee and / or Council" of the first respondent. The appeal which was heard on 12 September 2007, was dismissed. The applicant was notified of the appeal committee's decision on 20 September 2007. The applicant requested reasons for the decision and these were furnished on 19

October 2007.

[28] During January 2008 the applicant became aware that the properties on 'The Ridge' had been advertised for sale by public tender under tender number 8/2/1/244. In this tender document, a description of the situation of the properties comprising 'The Ridge' was given and it thereafter went on to state as follows :

"A.3. The area is zoned in terms of the Richards Bay Town Planning Scheme into two portions, namely Portion 1 to the extent of 3.7042 Hectares to "General Residential 2" and Portion 2 to the extent of 1.5503 Hectares to "Hotel".

A.4. The township establishment, i.e. the consolidation for the above erven into the two proposed portions has not been formalized."

[29] The remainder of the relevant portions of the tender document indicate what is required of any proposed developer. This included a declaration of a development layout and footprint to be submitted for the establishment of a township on the General Residential 2 properties, an investigation of the status of the existing buildings in terms of the KwaZulu Natal Heritage Act No. 109 of 1997 and for those buildings to be dealt with accordingly, if necessary, and the successful tenderer was required to undertake all land survey, environmental approval processes, town planning and other related work required for the township establishment of the development in terms of any law.

[30] Eventually and on or about 15 January 2008 the Bid Adjudication Committee awarded the tender to the second respondent. When this came to the attention of the applicant, he caused his attorneys to address a letter dated 5 February 2008 which called upon the first respondent to refrain from concluding any agreements or proceeding further in any way with regard to the applicant's properties which formed a part of the tender that had been awarded. He further indicated that the applicant intended bringing review proceedings.

Proceedings before the Appeal Committee

[31] As mentioned, the applicant lodged an appeal against the decisions of the executive committee and the council of first respondent and sought to reclaim Lots 32 and 33 by tendering to pay their market related values. The applicant was given a hearing in terms of s 62 of the MSA. Before the first respondent's appeal committee, applicant argued that his properties presented a special case. The applicant argued the following matters before the appeal committee :

(a) The properties which he had purchased and which were expropriated from him had been his place of residence for many years. The first respondent accepted this fact and permitted his continued occupation of his home for a lengthy period of time. He continued to reside on the property with his wife and children prior to their departure from their parental home.

(b) He did not wish to lose his home and pointed out that his home as well as the buildings on a neighbouring property might qualify for special protection in terms of the KwaZulu Natal Heritage Act No. 109 of 1997, given that the buildings were older than 60 years. That Act he stated would effectively prevent his home from being demolished, as well as the buildings on the lot adjoining his. He argued that although the first respondent had resolved to combine 'General Residential 2' lots and to sell them together, it was clear that this was subject to any purchaser investigating the positions of Lots 32 and 33 in regard to their alleged heritage status and reporting thereon. He argued that there did not appear to have been any planning consideration given to the feasibility of combining Lots 32 and 33 with 'General Residential 2' plots if it later turned out to be subject to protection through the KwaZulu Natal Heritage Act, which was binding on the municipality as it was provincial legislation.

(c) He argued further that Lots 32 and 33 appears at the end of the block of properties that the first respondent wanted to consolidate and sell off as 'General Residential 2'. He stated that they ought to have been no difficulty in simply excising Lots 32 and 33 from the block of 'General Residential 2' properties.

(d) He argued that notwithstanding the provisions of the Municipal Finance Management Act No. 56 of 2003 ("MFM"), the first respondent could re-sell the properties to him by virtue of the provisions of Section 233 of the Local Authorities (Natal) Ordinance No. 25 of 1974.

(e) The first respondent, as a sphere of government, was obliged to engage in administrative action in a lawful reasonable and procedurally fair manner in compliance with Section 33 of the Constitution read with PAJA.

(f) The first respondent was obliged to give special consideration to the following facts :

(i) It expropriated his land and his home originally for a public purpose, when it would have otherwise not been able to deprive him of his property;

(ii) With the consent of the first respondent, he continued to reside there for many years after the expropriation in recognition of the fact by the first respondent that his home was on the property.

(iii) His home may qualify for special protection in terms of the KwaZulu Natal Heritage Act which the municipal planning exercise appeared to have ignored or overlooked or made insufficient provision therefor.

(iv) It was only him and no other formerly expropriated owner who wished to re-acquire his properties which meant that first respondent would not face a flood of claims as suggested in a report to it and in the first opinion obtained by the first respondent.

(v) He ought to be entitled to re-purchase his properties on the basis that the first respondent no longer wished to proceed with the original intention behind the expropriation (ie. to hold the property for the benefit of the public). The decision to sell the properties was and remains opposed to the original intention and is for commercial revenue driven aims.

(vi) That section 7(2) of the Constitution requires all spheres of government including the first respondent to respect, protect, promote and fulfill the rights in the Bill of Rights and that one of those rights is the right contained in Section 26 which protects the right of access to housing.

[32] The applicant's appeal was unsuccessful. The applicant sought reasons from the appeal committee of the first respondent. The first respondent provided the following reasons for the dismissal of the appeal :

"1. the process of expropriation was finalized and agreed upon by means of an agreement entered into between Council and the appellant on 16 April 1997.

2. although Council had intended to rezone the property to public open space. However, circumstances changed over time and as the owner of land Council has the authority to decide otherwise.

3. council also has the authority and an obligation in terms of Section 14 of the MFMA to dispose of land in a fair and competitive manner and the appellant himself can tender for the property during the tender process.

4. the appeal against the Council's decision of 20 March 2007 was an exercise in futility as it re-affirmed a decision taken by council on 5 December 2006."

[33] The first respondent did not dispute that the aforementioned arguments were made by the applicant before its appeal committee. In these proceedings the first respondent contended as follows :

(a) The applicant had no standing in law to bring this application because none of his rights were affected by any of the decisions which he objects to.

(b) Applicant should be denied the relief sought for on the basis that he had delayed too long in seeking the relief in question.

(c) After the applicant's properties had been expropriated and re-zoned by the first respondent, anything the first respondent did in respect of those properties was in respect of properties owned by the first respondent, and the fact that the properties previously belonged to the applicant was no longer relevant.

(d) As an organ of State, funded by and responsible to the public, the first respondent was obliged to take into account the interest of the municipality and its residents as a whole in deciding what to do with the properties which it decided to sell and could not have regard to the applicant's personal circumstances.

(e) Although the first respondent had sympathy for the applicant it maintains that legally it was not entitled to accommodate the applicant's position as to have done so would have amounted to impermissible preferential treatment. It acted in accordance with the law, including the Constitution in disposing of the properties in the way

that it did.

(f) Once the aforementioned settlement agreement between the first respondent and the applicant had been concluded, the applicant's right to object to what happened to Lots 32 and 33 (aside from his rights as the tenant) was based not on his status as a previous owner of the properties, but as a resident of the municipality. The applicant in effect seeks a reversal of the original decision to expropriate the properties.

(g) After the expropriation and acquisition by the first respondent of the properties, it was obliged to deal with them, as far as town planning matters and the disposal of them are concerned, as with any other properties owned by it, taking into account the interest of the municipality and all relevant, including changed circumstances.

(h) The applicant only appealed against the decision taken
by the Council "on or about the 19^th April 2007". However, what he in fact appealed against was the decision of the executive committee of the first respondent of 20 March 2007. The appeal against the decision of the executive committee reaffirming that decision, was an exercise in futility, as was argued at the appeal and as found to be the case by the appeal committee.

(i) It denied that the applicant's case was a special one.

(j) It denied that the buildings in question qualified for protection in terms of the KwaZulu Natal Heritage Act and averred that this was mere speculation on the applicant's part. It asserted that the properties were in any event sold subject to the purchaser taking the risk that the properties were protected. It pointed out further that if the buildings on the properties were protected, the properties would be far less marketable on their own rather than as a part of a large consolidated property.

(k) The provisions of Section 14 and of Chapter 11 of the MFM and hence the Supply Chain Management Policy take precedence over section 233 of the Ordinance by virtue of the provisions of section 3(2) of the MFM and that the appeal committee found quite correctly that the council was obliged to comply with section 14 of the MFM. In any event it denied that the interest of the municipality would be better served by a private sale or that the applicant's circumstances were circumstances which could properly be taken into account in terms of section 238 of the Ordinance.

(l) It acted in a lawful reasonable and procedurally fair manner.

(m) It denied that the decision of the first respondent's council to sell the properties in any way breached the provisions of the Constitution. The applicant is a tenant on the properties and the decision to sell the properties did not affect his tenancy. His tenancy would have to be determined in terms of the law and if necessary the applicant would have to be evicted in terms of the law.

Challenge to locus standi

[34] The first respondent contended that the applicant has no standing in law to bring this application. It seems that the challenge to applicant's locus standi was made on the basis that the applicant is currently a tenant and the decision to sell the properties did not affect his rights as tenant which are terminable in law and on the basis of the lease agreement.

[35] Although the first respondent's challenge to the applicant's locus standi was raised in the pleadings, it was not pertinently dealt with in the first respondent's heads of argument. Indeed, Mr Rall, did not press the challenge to applicant's locus standi during his argument before me. I think that was a wise decision in view of the wide net in which the applicant cast a possible infringement or threat to his rights or at the very least his legitimate expectations in the Bill of Rights.

[36] In terms of s 38 (a) of the Constitution, anyone acting in their own interest has the right to approach a competent court, alleging that a right in the Bill of Rights has been infringed or threatened, and the court may grant appropriate relief which includes a declaration of rights. It is settled law that those who assert infringements or threats to fundamental rights in the Bill of Rights are afforded a generous and expanded form of locus standi to approach a court for just and equitable relief. A legitimate expectation is sufficient to justify a hearing. ¹

[37] It is to be observed that at the heart of this application is the applicant's assertion of an infringement of his right to re-claim and re-purchase his properties once the first respondent decided tochange the purpose for which the properties were originally expropriated from him. The applicant therefore has at least a vested interest in the decisions taken by the first respondent with respect to their administration of the properties.

[38] In Ferreira, the then Honourable President of the Constitutional Court, Chaskalson P stated that he could see no good reason for adopting a narrow approach to the issue of standing in constitutional cases. He expressed the view that we should rather adopt a broad approach to standing as this would be consistent with the mandate given to courts to uphold the Constitution to ensure that constitutional rights enjoy the full measure of the protection to which they are entitled.² In the same case O' Regan J stated that 'the harm alleged may often be quite diffuse or amorphous' and that 'no bright line can be drawn between private litigation and litigation of a public or constitutional nature'. She stated at paragraph 230 as follows :

"[230] Section 7(4) is a recognition too of the particular role played by the courts in a constitutional democracy. As the arm of government which is entrusted primarily with the interpretation and enforcement of constitutional rights, it carries a particular democratic responsibility to ensure that those rights are honoured in our society. This rule requires that access to the courts in constitutional matters should not be precluded by rules of standing developed in a different constitutional environment in which a different model of adjudication pre-dominated. In particular, it is important that it is not only those with vested interests who should be afforded standing in constitutional challenges where remedies may have a wide impact'.

[39] Ms. Gabriel submitted that in these proceedings, the applicant's right to housing (section 26), duties on the State to respect, protect, promote and fulfill the rights in the Bill of Rights (section 7), his rights to just administrative action (section 33) and those contained in PAJA as well as the corresponding duties and obligations placed on the first respondent, given the historical expropriation of his property, including the subsequent change in purpose for the expropriation, were asserted.

[40] I am of the view that the alleged infringement of the rights asserted set against the backdrop of the facts pleaded by the applicant and the jurisprudential principles applicable to each of them require consideration by this court and any failure to do so by non-suiting the applicant on the basis of a lack of locus standi in the circumstances of this case would amount to a failure of justice. I am therefore satisfied that the applicant has established his locus standi to approach the court for the relief which he seeks.

The hearing and decision of the Appeal Committee

[41] I have set out above the relevant facts relating to the applicant's appeal, the arguments raised and the reasons given for the dismissal of such appeal.

[42] The applicant's appeal was noted in the form of a letter by his attorneys on 4 May 2007. The second paragraph of this letter reads :

"We are instructed to note an Appeal in terms of the abovementioned section of the act to the Council's Appeal Committee in respect of the decisions taken recently by the executive Committee and / or Council. We mention in this regard that the decision in question is one which was taken at a meeting held on or about 19 April 2007. We also mention that although that decision directly affects our client, he has not yet been notified of the impact thereof. Consequently, our client is anticipating, rather than complying with, the time limit referred to in s 62(1) of the said act."

S 62 (1) was a reference to the MSA. The letter then goes on to set out the historical background to the matter and the grounds on which the appeal was based.

[43] However, no decision had been taken either by the executive committee or the council of the first respondent on 19 April 2007.

As mentioned, the only decisions taken were : the decision of the first respondent's council taken on 5 December 2006, the decision of the executive committee of the first respondent acting under delegated authority on 20 March 2007 which reconfirmed the resolution taken by the council on 5 December 2006 and appended thereon the three conditions referred to above and the decision of the full council of the first respondent taken on 3 April 2007 which was in identical terms to the resolution taken by its executive committee on 20 March 2007.

[44] In terms of s 62 of the MSA an appeal lies only against the decision taken by persons or structures to whom powers have been delegated. It provides as follows :

"62 Appeals

(1) A person whose rights are affected by a decision taken by a political office bearer, councilor or staff member of a municipality in terms of a power or duty delegated or sub-delegated by a delegating authority in the political structure, political office bearer, councilor or staff member, may appeal against that decision by giving written notice of the appeal and reasons to the municipal manager within 21 days of the date of the notification of the decision.

2.....

3.......

4. When the appeal is against a decision taken by -

a ;

b ; or

(c) a political structure or political office bearer, or a councilor-

(i) the municipal council is the appeal authority where the council comprises less than 15 councillors; or

(ii) a committee of councilors who were not involved in the decision and appointed by the municipal council for this purpose is the appeal authority where the council comprises more than 14 councillors".

[45] In s 1 of the MSA 'delegated authority' is defined :

"(a) In relation to a delegation of power or duty by a municipal council, means the municipal council; or

(b) In relation to a sub-delegation of a power or duty by another political structure , or a political office bearer, councilor or staff member of a municipality, means that political structure, political office bearer, councilor or staff member" and

" 'political structure' in relation to a municipality, means the council of the municipality or any committee or any collective structure of a municipality, elected, designated or appointed in terms of a specific provision of the Municipal Structures Act".

[46] Section 62 of the MSA does not make provision for an appeal against a decision of the full council of the first respondent. This is apparent from the wording of s 62 (4). This makes sense since it can hardly be expected that the first respondent would sit on appeal in judgment of its own decision.³ As such, any appeal that the applicant may have intended against the decisions of the full council of the first respondent would have been incompetent. The appeal then could only have been considered as being against the decision taken on 20 March 2007 by the executive committee of the first respondent.

[47] The main thrust of the appeal committee's reason for dismissing the appeal was that it was an exercise in futility although other reasons were also furnished. This is indicative that the focus of the appeal committee was directed at the decision taken by the executive committee of the first respondent since it would not have had the power to adjudicate an appeal on the decision taken by the full council. As mentioned, the decision of the first respondent's executive committee of the 20 March 2007 reaffirmed the decision of the full council taken on 5 December 2006 after incorporating therein the three conditions referred to above. In these circumstances even if the latter decision was set aside, the council's decision would still stand. The decision by the full council on 3 April 2007 was in identical terms to the decision taken by the executive committee and likewise even if the latter decision was set aside the full council's decision would still stand. Hence the conclusion reached by the appeal committee that the appeal was an exercise in futility.

[48] The above reasoning relating to the appeal being an exercise in futility was in all probability considered by the appeal committee in the light of what was contained in the heads of argument filed on behalf of the first respondent which heads were before the appeal committee and which were argued by Mr. Rall.

[49] In these proceedings Mr. Rall submitted that to set aside the decision of the executive committee of the first respondent would be pointless because the full council has passed resolutions to the same effect and accordingly it would serve no useful purpose to consider the decision of the appeal committee. Whilst that may be so, it does not detract from the fact that the appeal committee was charged with the duty to properly adjudicate the applicant's appeal against the decision taken by the executive committee of the first respondent and when requested, was obliged to provide the applicant with its reasons for the dismissal of the appeal.

[50] As I have set out above, the applicant presented the appeal committee with facts which he considered amounted to a special case and in the context of those facts he asserted an infringement of important rights in the Bill of Rights and PAJA which warranted consideration by the appeal committee in relation to the decision taken by the executive committee of the first respondent. This was to be so notwithstanding the fact that the decisions of the full council of the first respondent were in place and no matter which way the appeal was decided.

[51] S 33 of the Constitution provides :

"33(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair;

(2) Everyone whose rights have been adversely affected by administrative action has the right to be given reasons".

[52] PAJA which is the national legislation enacted to give effect to the rights in s 33 of the Constitution requires the administrative tribunal to furnish reasons where a person's rights or interests have been materially and adversely affected. In terms of section 5 (3) of PAJA, if an administrator fails to furnish adequate reasons for an administrative action, it must, subject to ss 4 and in the absence of proof to the contrary, be presumed in any proceedings for judicial review that the administrative action was taken without good reason. SS 4 (a) states that there may be a departure from the requirement to furnish adequate reasons if it is reasonable and justifiable in the circumstances and subsection 4 (b) sets out the factors which must be taken into account when such a departure is made. ⁴

[53] The principal purpose of requiring an administrator to furnish reasons is to justify the administrative action that had been taken.⁵ The underlying purpose or need for reasons to be furnished is to enable the person affected by the decision to know why it was taken. Lawrence Baxter encapsulates the importance of furnishing reasons for a decision as follows:

"In the first place, a duty to give reasons entails a duty to rationalize the

decision. Reasons therefore help to structure the exercise of discretion, and the necessity of explaining why a decision is reached requires one to address one's mind to the decisional referents which ought to be taken into account. Secondly furnishing reasons satisfies an important desire on the part of the affected individual to know why a decision was reached. This is not only fair : it is also conducive to public confidence in the administrative decision-making process. Thirdly - and probably a major reason for the importance to give reasons - rational criticism of a decision may only be made when the reasons for it are known. This subjects the administration to public scrutiny and it also provides an important basis for appeal or review. Finally reasons may serve a genuine educative purpose, for example where an applicant has been refused on grounds which he is able to correct for the purpose of future applications".⁶

[54] The decision maker is required to explain his decision in a way which will enable a person affected by it to decide whether he agrees with it or if not why the decision was given against him and to decide whether the decision was incorrect on fact or on law and to decide whether it is worth challenging. This requires the decision maker to set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions.⁷

[55] The reasons given by the appeal committee for its decision have been mentioned above. Since all the decisions including the decision of the full council of the first respondent fall to be scrutinized in this application, I consider it expedient to deal with the adequacy or otherwise of those reasons in conjunction with the other reasons advanced by the first respondent for its decision in this application. Suffice it to mention that I do not think that the fact that the appeal against the decision of the executive committee of the first respondent may have been an exercise in futility because of the resolutions which had been passed by the full council of first defendant - that this fact served as a bar to the applicant's right to be furnished with adequate reasons for the appeal committee's decision to uphold the decision taken by the executive committee of the first respondent and to dismiss the applicant's appeal.

Whether the decision of the council of first respondent was administrative action

[56] The first respondent initially contended that the decision of its council to dispose of the properties was not administrative action as contemplated by PAJA but the exercising of executive power of the council and therefore the decision was not reviewable. In supplementary heads of argument filed on behalf of the first respondent, Mr. Rall, having regard to the principles enunciated in Grey's Marine⁸, conceded that the conduct complained of fell within the purview of administrative action as set out in s 33 of the Constitution and PAJA. He however, submitted that the applicant must show that his rights had been affected by the administrative action before he was entitled to have the action set aside. The concession was in my view, correctly made.

[57] In Grey's Marine⁹ Nugent JA referring to various principles enunciated in the cases of S.A Rugby Football Union¹⁰, Fedsure¹¹ and Nel¹² dealt with the nature of administrative action and had the following to say :

"[24] Whether particular conduct constitutes administrative action depends primarily on the nature of the power that is being exercised rather than upon the identity of the person who does so. Features of administrative action (conduct of 'an administrative nature) that have emerged from the construction that has been placed on section 33 of the Constitution are that it does not extend to the exercise of legislative powers by deliberate elective legislative bodies, nor to the ordinary exercise of judicial powers, nor to the formulation of policy or the initiation of legislation by the executive, nor to the exercise of original powers conferred upon the President as head of State. Administrative action is rather, in general terms, the conduct of the bureaucracy (whoever the bureaucratic functionary might be) in carrying out the daily functions of the State, which necessarily involves the application of policy, usually after its translation into law, with direct and immediate consequences for individuals or groups of individuals.

[25] The law reports are replete with examples of conduct of that kind but the exercise of public power generally occurs as a continuum with no bright line marking the translation from one form to another and it is in that translation area in particular that :

'(d)ifficult boundaries may have to be drawn in deciding what should and what should not be characterized as administrative action for the purposes of section 33'.

In making that determination :

'(a) series of considerations may be relevant in deciding on which side of the line a particular action falls. The source of the power, though not necessarily decisive, is a relevant factor, so, too, is the nature of the power, its subject-matter, whether it involves the exercise of a public duty and how closely it is related on the one hand to policy matters, which are not administrative, and on the other to implementation of legislation, which is. While the subject matter of a power is not relevant to determine whether constitutional review is appropriate, it is relevant to determine whether the exercise of the power constitutes administrative action for the purposes of section 33.'

It has also been emphasized that the difficult boundaries :

'will need to be drawn carefully in light of the provisions of the Constitution and the overall constitutional purpose of an efficient, equitable and ethical public administration. This can best be done on a case by case basis.' [footnotes omitted]"

[58] The initial challenge against the decisions taken by the council of the first respondent to declassify it as 'administrative action' was made on two fronts. Firstly, it had been submitted that when making a decision about the disposal of an asset, a municipal council is performing an executive function. Such a decision, so it had been submitted, fell within the ambit of 'the executive powers or functions of a municipal council' and was thus excluded from the field of administrative action. Secondly, it had been submitted that to qualify as 'administrative action' the decision in question would have had to be one which 'adversely affects the rights of any person and which has a direct, external legal effect'. It had been submitted that applicant had not shown a right which was affected by the decision. In my view, neither of the two submissions have any merit in determining whether the decisions of the first respondent constituted administrative action.

[59] In casu, the applicant, as a previous owner of Lots 32 and 33 asserts a right to reclaim and repurchase those properties on the basis that the purpose for which they were originally expropriated from him by the first respondent, had changed. Aligned with this assertion was the fact that the applicant had built his house on the properties and continued to live there ever since up until the present time. As mentioned, 'The Ridge' was in terms of the

Richard's Bay Town Planning Scheme (in 1983), proclaimed as 'public open space. This included the applicant's properties. The first respondent acquired its ownership to the properties through expropriation. The reason given for the expropriation was that the first respondent intended to use the properties comprising 'The Ridge' as a public recreational open space and conservation area. To that extent at least, its ownership with respect to the use of the properties was qualified. In other words for so long as the restriction on the use of the properties (ie. for a public purpose) was in place, the first respondent was obliged to exercise its rights of ownership in accordance with that purpose.

[60] When the circumstances changed and the purpose was no longer realizable and the first respondent decided to change the purpose for which the properties were originally intended and to dispose of them in the manner in which it sought to do, it was doing so in terms of newly acquired rights in respect of the use of the properties. The latter rights in my view were to be implemented within the framework of the Constitution.¹³

[61] In Bullock¹⁴ the Supreme Court of Appeal held that a disposal of a servitude by the provincial government constituted administrative action for purposes of section 33 of the Constitution (as it then read).¹⁵ In Grey's Marine, Nugent JA in considering an argument which sought to distinguish Bullock's case from the one that he was dealing with on the basis that in the former the rights were alienated in the belief that the provincial government was obliged to do so, whereas in the latter the impugned decision amounted to a policy decision, stated as follows :

"[27]...There will be few administrative acts that are devoid of underlying policy - indeed, administrative action is most often the implementation of policy that has been given legal effect - but the execution of policy is not equivalent to its formulation. The decision in the present case was not one of policy formulation but of execution. No matter that the motivation for making the decision differed from that in Bullock, I do not think that the decisions in each case are materially distinguishable.

[28] Nor do I think there are grounds for distinguishing administrative action as contemplated by section 3 of the Constitution from administrative action envisaged by PAJA (at least within the context of the decision that is now in issue). If the qualifications in PAJA's definition purport to exclude from its ambit some acts that would otherwise constitute administrative action for purposes of section 33, none of them is material to the case that is before us. The Minister's decision was made in the exercise of a public power conferred by legislation, in the ordinary course of administering the property of the State, and with immediate and direct legal consequences (at least for Bluefin) and I see no reason to differ from the conclusion in Bullock that it constituted administrative action."¹⁶

[62] I am in respectful agreement with the reasoning of the learned Judge as set out above in Grey's Marine and I can see no reason to depart from it on the facts of the present case. The first respondent's decision to use the properties for a purpose different from that for which they were originally expropriated, and its decisions to consolidate the properties and dispose of them en bloc in terms of its Finance Management Chain Policy were, in my view, made in the exercise of its public power in the ordinary course of administering the properties and with immediate and direct legal consequences for the applicant who contends that once the purpose for which the properties were expropriated changed, he acquired a right to re-claim and re-purchase the properties.

[63] Considered then against the backdrop of the manner in which the first respondent acquired ownership in the properties (ie. expropriation for a public purpose), the facts and circumstances which led to the first respondent changing the purpose for which the properties were originally intended, its decision to re-zone and consolidate the properties en bloc and to implement those decisions and the alleged infringements of the rights asserted by the applicant, I hold the view that the conduct of the first respondent constituted administrative action as contemplated in section 33 of the Constitution and PAJA.

The delay in bringing the proceedings

[64] The first respondent contended that the applicant should be denied the relief claimed in these proceedings on the basis that he delayed too long in seeking such relief. It contended further that the applicant, as a councillor of the first respondent was fully aware of all the decisions and yet had waited for 15 months to challenge the decision of the 5 December 2006, almost a year to challenge the decision of 20 March 2007 by its executive committee and over five months to challenge the decision of the appeal committee.

[65] First respondent alleged that the applicant had given no explanation for this delay and contended that it was prejudiced by the delay because since taking the decision on 5 December 2006, it had taken a number of steps towards implementing that decision, including the tender process which the applicant now attacks. It was alleged further that a considerable amount of time and money had been spent on these processes and first respondent would be prejudiced were the relief to be now granted.

[66] In his replying affidavit the applicant denies that he unreasonably delayed in bringing these proceedings and referred the court to the history of the matter as demonstrated in his founding and supplementary papers. That history has been encapsulated in the salient facts mentioned in this judgment.

[67] It was submitted on behalf of the first respondent that if this review was regulated by PAJA, then in terms of s 7(1)(c) these proceedings should have been brought within 180 days of 5 December 2006 unless an extension was granted in terms of s 9 of that Act¹⁷ . It was submitted that in this case no application for an extension had been made for a review in respect of the decision of 5 December 2006 and as the applicant waited for over fifteen months before launching the application, he forfeited his right to claim relief.

[68] It was further submitted on behalf of the first respondent that if the review was not regulated by PAJA, then it was required to be brought within a reasonable time and that the common law position was that where no specific time limit had been laid down within which the review proceedings were to be brought they had to be instituted within a reasonable time.¹⁸

[69] The applicant on the other hand submitted that the complaint concerning the unreasonable delay was without merit given that the review application was instituted within six months of the appeal committee's reasons being furnished and that it did not assist the first respondent to attempt to reclassify that hearing as an incompetent administrative process because it extended the hearing to the applicant in terms of s 62(1) of the MSA. In these circumstances it was contended that the applicant could not reasonably have acted any sooner in bringing these proceedings. It was further submitted that the first respondent would not have suffered prejudice given that its planning processes and visions remained inchoate for approximately twenty years.

[70] It is trite that an applicant who fails to bring a review application within a reasonable time may forfeit his right to have the administrative action complained of reviewed and set aside, unless the delay is satisfactorily explained.¹⁹ When the defence of unreasonable delay is raised in review proceedings a court must embark on a two-fold enquiry. The first is whether a reasonable time has elapsed from the time the decision was taken and against which the review proceedings are brought. In deciding whether a reasonable time has elapsed, a court does not have a discretion. The enquiry is purely a factual one. The question to be posed is whether the period that has elapsed, in the light of all relevant circumstances of the particular case, is reasonable or unreasonable. If the court finds that the delay was reasonable the enquiry ends there and it need not be taken any further. If it is found that the delay was unreasonable, the court has to embark on the second enquiry namely, whether the unreasonable delay should be condoned. During this enquiry, the court exercises a discretion.²⁰

[71] I proceed then on this enquiry with reference to the facts that are before me. Despite the fact that the first respondent pertinently raised the question of the delay in bringing these proceedings especially against its decisions of its full council taken on the 5 December 2006 and the 3 April 2007, the applicant, save for denying that he delayed unreasonably and referring the court to the history of the matter as contained in his founding and supplementary papers, did not directly deal with the issue of his delay in bringing these proceedings.

[72] The applicant was not only a councilor but also a member of first respondent's executive committee. He does not dispute that he was aware of the decisions taken nor does he explain why he had not sought to review the decisions taken by the council of the first respondent earlier than he did. One would have expected that as a councilor and as a member of the executive committee of first respondent, he would have known that there were certain time limits within which review proceedings were to be brought. Viewed in isolation of other considerations to which I shall allude hereunder the elapse of some fifteen months prior to the launching of these proceedings against the decision taken by the full council of the first respondent on 5 December 2006, is in my view inordinately long. It is well outside the time limits of the 180 days prescribed in terms of s 7(1) of PAJA and cannot in my view be construed as a reasonable time under our common law. In these circumstances I am not satisfied that the applicant has passed the first leg of the enquiry.

[73] The next question that arises is whether the applicant's delay should nonetheless be condoned. The applicant's notice of appeal was received by the first respondent on 8 May 2007 ie. some five months after the decision taken on 5 December 2007. It appears from the notice of appeal that it was directed at 'the decisions taken recently by the executive Committee and / or Council'. Pursuant to that notice the applicant was given a hearing before the appeal committee of the first respondent. That hearing was afforded to him in terms of s 62 of the MSA.

[74] It is not readily apparent from the record whether the right of appeal which was extended to the applicant was confined only to the decision taken by the executive committee of the first respondent. Although an appeal against the decisions taken by the full council on 5 December 2006 and 3 April 2007 were incompetent for reasons already mentioned, it is conceivable that the applicant was under the misapprehension that he was being allowed to present his case on all fronts in relation to all the decisions which were taken including those of first respondent's full council. Indeed that is what applicant sought to do when one has regard to the content of the notice of appeal especially paragraphs D - H thereof which stated as follows :

"D. On or about 4^th June 2004, and pursuant to a resolution Council advertised its intention in terms of s.47 bis of the Town Planning Ordinance, 1949 to re-zone inter alia, the affected properties from public open space (and certain incidental uses impacting on certain of the Ridge properties) to GR2 and Hotel purposes (the Conservation Amenity Reservation mentioned in the proposal relates to a portion of the Ridge properties not impacting on the affected properties and has been omitted for the purposes of the appeal);

E. The rezoning was carried through to completion with the result that the affected properties now carry a GR2 zoning;

F. Pursuant to this re-zoning, and after some delay, a further resolution was recommended to the Council on or about 20^th March 2007 but was referred back for further discussion;

G. Ultimately, the aforesaid recommendation was approved on or about 19^th April 2007;

H. The substance of the resolution mentioned in G was that the Council should pursue its plans for re-development of the Ridge properties for Hotel and GR purposes and that accordingly, the properties be advertised for tender on the basis of their recently acquired zoning status."

[75] Having regard to what was sought to be appealed against as contained in the notice of appeal and the apparent unqualified right of appeal which was granted to the applicant, it is conceivable that he may have been lulled into the belief that no further action was required to be taken by him until the outcome of his appeal.

[76] The appeal was heard on 12 September 2007 and applicant's attorneys were advised of the decision by letter dated 20 September 2007. On the same date applicant's attorneys requested reasons for the appeal committee's decision and pointed out that in terms of s 5 of PAJA, the appeal committee had ninety days to furnish those reasons. The appeal committee's reasons were furnished on 19 October 2007. These proceedings were brought on 10 March 2008. The time that had elapsed from the date on which the appeal committee's reasons were furnished until these proceedings were instituted was therefore under five months. If the matter was to be approached from this angle (which need not necessarily be correct), the review would have been brought within the compass of time provided for in s 7(1) of PAJA and in the circumstances outlined would not be unduly long under our common law.

[77] In Brummer²¹ the Constitutional Court stated that the period of 180 days must be calculated from the date when the requester receives notification of the decision on internal appeal. I think that this must be taken to mean the 180 days should commence running from the date on which the requestor receives reasons for the decision. In addition, the court held that the time limit of 180 days must be flexible so as to allow a court, when the interests of justice demand to extend or condone non-compliance with the period of 180 days.

[78] For the above reasons and in exercising my discretion in the context of what I consider may have been a misapprehension on the part of the applicant as referred to above, I am prepared to condone the applicant's delay in bringing these proceedings.

The thrust of the applicant's case in the context of the prevailing law on expropriation

[79] In these proceedings, but for the further attack on the manner in which the appeal committee dealt with his appeal, the applicant, relying on the facts mentioned in paragraph 31 above raised substantially the same arguments as were made before the appeal committee. These arguments were articulated within the framework of the jurisprudence on expropriation of property as it exists under our law and especially under our Constitution and further with reference to certain commentaries made in relation to the law on expropriation in certain foreign jurisdictions, all in the context of certain rights asserted by the applicant in the Bill of Rights.

[80] The thrust of the applicant's case is that when the first respondent ceased its plan to use the properties for the original purpose for which they had been expropriated, the first respondent was duty bound to permit the applicant to restitution of his properties against payment by him of their market related value. In support of this contention the applicant placed heavy reliance on the mandatory stipulation both in terms of our statute law and Constitution that property can only be expropriated for a public purpose or in the public interest so that conversely, so it was submitted, if the public purpose ceased to exist or was abandoned by the expropriator, the expropriation was no longer legally and constitutionally sustainable in the face of a claim to the property by the original owner. The applicant relies further on s 7(2), 25(1), 26 and 33 of the Constitution. Before dealing with these rights and the respective contentions made in relation to them by the parties, I think it would be apposite at this stage to make some general observations on the law of expropriation both in this country and in some foreign jurisdictions.

Expropriation in South Africa

[81] The State has no general common-law power to expropriate.²² The power to expropriate is derived from various statutes dealing with the expropriation of property by governmental institutions for specific purposes. The right to expropriate, granted under statute, for example the Expropriation Act 63 of 1975, whichis sometimes referred to as the right of eminent domain, empowers the expropriator to expropriate the property for a public purpose against payment of compensation. ²³

[82] The two prerequisites for an expropriation in terms of the Expropriation Act are firstly that the expropriation must be for public purposes and secondly there must be payment of compensation to the property owner. Whilst both these pre­requisites are sacrosanct for an expropriation under the Act, the justification for the expropriation lies not in the payment of compensation but in the purpose for which the property is expropriated. In other words the payment of compensation by itself cannot justify an expropriation. It is merely the result of an expropriation which is directed at a particular purpose ²⁴. In terms of the Act 'public purposes' includes any purposes connected with the administration of the provisions of any law by an Organ of State. This gives the expropriator a wide power to expropriate theproperty and in the pre-constitutional era the term 'public purposes' also included purposes aimed at social engineering for example by implementing the then government's racially discriminatory policies such as for instance the Group Areas legislation. ²⁵ In the present constitutional order an expropriation for improper purposes which do not meet the minimum thresholds set in the Constitution are unlikely to be endorsed favourably by our courts.

[83] In terms of s 8 (1) of the Expropriation Act the ownership of property expropriated shall, subject to the provisions of s 3 (3) ²⁶ and on the date of expropriation, vest in the State, released from all mortgage bonds (if any) but if such property is land, it shall remain subject to all registered rights (except mortgage bonds) in favour of third parties with which it is burdened, unless or until such rights have been expropriated from the owner thereof in accordance with the provisions of the Act.

[84] In the present constitutional era the law relating to expropriation in terms of the Expropriation Act or indeed any other statutory legislation permitting expropriation of property must pass constitutional muster. Property rights are protected under s 25 of the Constitution.

[85] In terms of s 25 (1) of the Constitution no one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property. S 25 (2) provides that property may be expropriated for a public purpose or in the public interest and subject to the payment of compensation. The requirements of a public purpose or in the public interest affords constitutional protection to ensure that :

"....expropriations are strictly necessary and to prevent frivolous or arbitrary use of the state's power of eminent domain. These requirements have two related effects : to prevent or stop expropriations of private property for improper, unlawful purposes; and to control legitimate exercises of the power to expropriate". ²⁷

[86] The power to expropriate in s 25 (2) of the Constitution has been recognized as something less than the power to deprive a person of property which is prohibited in s 25 (1) of the Bill of Rights. In First National Bank²⁸ the distinction was drawn between the term 'deprived' or 'deprivation' from the term 'expropriation' in the sense that the term 'deprivation' encompassed any interference with the use, enjoyment or exploitation of private property as against the person having title or right to or in the property concerned whereas 'expropriation' would apply only to a narrow species of interference and are treated as a "subset of deprivations".

[87] S 25 (1) deals with all 'property' and all deprivations (including expropriations). If the deprivation infringes (limits) s 25 (1) and cannot be justified under s 36 the provision is unconstitutional. If, however, the deprivation passes scrutiny under s 25 (1) (i.e it does not infringe s 25(1) or, if it does, is a justified limitation) the question that arises is whether it is an expropriation. If the deprivation amounts to an expropriation then it must pass scrutiny under s 25(2)(a) and make provision for compensation under s 25(2)(b)²⁹. It follows that deprivation of property by the State is permissible provided that it is not arbitrary and is carried out in terms of a law of general application. A person has no right to compensation unless a deprivation of property also amounts to an expropriation of that property.

Expropriation in foreign jurisdictions

[88] A useful insight into the law of expropriation of certain foreign jurisdictions can be found in a compilation of certain core papers which were presented at the conference of the United Kingdom National Committee of Comparative Law at the University of Oxford in August 1990.³⁰ A synopsis of the nature of the acquisition power with respect to some of these foreign jurisdictions is mentioned hereunder.

United Kingdom

[89] In England, Wales and Scotland in the exercise of a sovereign power, private property can be taken or expropriated for the public good. The power to take property however is inextricably linked to the payment of compensation. ³¹ In the United Kingdom when parliament passes legislation authorizing the compulsory purchase of property, it is presumed to be for the public good.³²

[90] Compulsory acquisition in English law involves the taking of the whole of the owner's interest in the land, for as long as that interest subsists. If the public authority no longer requires the land for the particular purpose for which it was required, it is obliged (by administrative rules) to give the former owner or his descendants the first opportunity to purchase the land at current market value.³³

France

[91] In France the law of expropriation is underpinned by two texts to be found in the French Declaration of Human & Civil Rights of 1789 which prescribes that "[p]roperty being an inviolable and sacred right, no one can be deprived of it, except when the public necessity, legally established, requires this and on condition of a fair and previous indemnity" and Paragraph 545 of the 1804 Napoleonic "Code Civil" which provides that "[n]o one can be required to surrender his property except in the case of public purpose, and on condition of a fair and previous indemnity".³⁴

[92] The present position in France is that the expropriation power is governed by and subject to parliamentary acts and governmental relations. However, a number of important rules have been added to statute by the cases and these have been integrated into the

Code. ³⁵ The exercise of power to take private property is subject to the condition that it promotes a purpose of public interest. This concept has become wider and wider and it seems that this requirement would be met so long as any purpose approved by the legislature as being upheld as public in nature, even if the empowering act has not precisely foreseen the circumstances involved. The proviso however, is that the purpose must be of public interest. ³⁶ However, the courts monitor these aspects and if the drawbacks of an expropriation significantly outweigh the advantages, the court may overrule the administrative order. ³⁷

[93] The property which is expropriated must be assigned effectively to the public purpose for which it was acquired. If it is not so assigned for a period of five years or if it ceases to be so used the previous owner or other interest holders may, within thirty years require retrocession, unless a new declaration of public purpose has been requested. If the property was agricultural and the expropriator subsequently decided to lease it out, the expropriatees have priority in leasing it. If and when the expropriator decides to sell the land, the former owner has priority in purchasing it.³⁸

Germany

[94] The foundations of German law of expropriation are found in its Constitution. Article 14 guarantees private property and sets forth in Paragraph 3 as follows :

"Expropriation shall be permitted only in the public interest. It may be effected only by or pursuant to a law which shall provide for the nature and extent of the compensation. Such compensation shall be determined by establishing a fair balance between the public interest and the interest of those affected. Incase of dispute regarding the amount of compensation, recourse may be had to the ordinary courts." ³⁹

[95] Historically the power to expropriate private property arose from the State's dominium eminens. However, the present position is that the power is derived from statutes enacted by parliament. ⁴⁰ Generally expropriation is regarded as a 'taking' by a public agency, aiming at the complete or partial deprivation of substantial private property rights in order to accomplish a specific public purpose. It can cover real property (including rights less than full ownership), movable property and other private rights in rem e.g lease rights, copy rights and so forth which fall within the meaning of 'property' as is used in Article 14 of the Constitution. ⁴¹

[96] Although the legislature is responsible for defining what constitutes a public purpose, it does not have an unfettered discretion to consider any purpose as a public purpose justifying expropriation. Instead, to be public in nature, the purpose must satisfy certain requirements as to severity and importance.

[97] Some expropriation statutes address the question of 're-expropriation' whereby the former owner can require that the expropriated property be returned to him if it has not been used during a period fixed by statute for the purpose that was specified at the time of its expropriation. This is analogous to 'restitution' and is motivated more by 'public policy' than by 'public interest'. The former owner has to pay compensation and although such compensation is determined as at the date of re-expropriation, it may not exceed the market value at the time of the first expropriation. Where statutes do not explicitly provide for re-expropriation, the courts have held that this nevertheless follows impliedly from the constitutional guarantee of private property rights in Article 14, Paragraph 1 of the Constitution.⁴²

Italy

[98] The nature of the power to expropriate in Italian law is co­extensive with its articulation in statute. The applicable legislation must clearly state the extent of the power to expropriate, and any limitations upon it and must indicate the type of property that must be expropriated, who acquires ownership, what interest (public or "general") is served, and what procedures are to be followed. As a general requirement, compensation characterizes all expropriations. ⁴³

[99] It is essential in all "takings that the public use is legally established either directly by an Act of the legislature, or indirectly by an administrative act authorized by law. The public nature of the proposed use must also be legally established within a prescribed period. Consequently, if the property has not been "used" effectively by the specified date, an expropriated owner has a right to recover the property. The property must also have been "used"for the specific purpose for which it was initially required. If these requirements are not satisfied, or if the period on which the property must be "used" for its intended purpose has not been previously determined the expropriator does not have the 'right to take' the property in question. ⁴⁴

Sweden

[100] The Constitution of Sweden contains no express provision protecting private property nor any express provision conferring on public authorities the power to take private property. However, the institution of private property, and the State's power to expropriate, are implied in the Constitution for it establishes a right to compensation when private property is taken. The Constitution also provides that rules and procedures for expropriation must be laid down by law, and duly enacted by parliament. ⁴⁵

[101] The Expropriation Act of 1973 is the principal statute on expropriation. It contains provisions concerning the permitted purposes of expropriation, the formula for compensation, administrative and court procedure and procedures for payment and taking possession.

[102] In order to obtain an expropriation under the Expropriation Act certain requirements have to be met such as the project must advance one of the purposes specified in the act; there must be a sufficiently detailed statement about the (positive) need for the expropriation and it must be clear that there is no reasonable possibility of solving the problem in another way, without invoking the expropriation power. Central to the specified purposes for which the property is to be expropriated is the element of public use.⁴⁶

[103] In Swedish law expropriation should always be a procedure of last resort. The expropriator must generally have conducted negotiations with the land owner or other interested parties prior toapplying for an expropriation order. Private homes are treated with deference under Swedish law, even if the formal requisites for an expropriation have been satisfied. ⁴⁷

United States of America

[104] Historically, the law of eminent domain in the United States was fashioned out of two competing interests namely "public use" and "just compensation".

[105] The power of eminent domain is based on the sovereignty of the State which requires no constitutional mandate. However, constitutional restraints were imposed upon this exercise as embodied in the Just Compensation, Public Use and Due Process Clauses of the Fifth Amendment. Each of the three branches of the Federal Government - legislative, executive and judicial - is involved in the exercise of the eminent domain power. One branch cannot abdicate its eminent domain function to another, as thatwould compromise the constitutional system of checks and balances under the federal doctrine of separation of powers. The power itself is vested in the legislative branch, its implementation is the responsibility of the executive branch, and the actions of both these branches are subject to review by the judiciary. ⁴⁸

[106] Exercise of the eminent domain power is subject to three types of review by the courts namely :

(1) Is the taking for a public use?;

(2) Has the legislature constitutionally delegated responsibility? and

(3) Is the executive branch acting within the scope and terms of its delegation? ⁴⁹

[107] The courts have been liberal in their interpretation of the concept "public use" and have considered it as being synonymous with a use in aid of any of the federal government's constitutional activities as long as the exercise of the power of eminent domain isrationally related to a conceivable public purpose. ⁵⁰ However, in later decisions and particularly in regard to land use regulations the court set a new standard of review by not trying the "rational relationship" test and laid down the principle that in order to pass muster under the Just Compensation Clause, a regulation must now bear a "substantial relationship" to a legitimate stated purpose.⁵¹

Australia

[108] In Australia the federal or state governments do not have any prerogative powers of expropriation (resumption in land as it is termed there). These powers are based exclusively on statute. The powers of resumption fall into two broad statutory categories : first there is a general power to take private property for public purposes and second there is a power to take for a specific purpose. The Land Acquisition Act of 1989 contains specific provisions but the concept of "public purpose" has been retained.

There it is defined as a purpose in respect of which the federal parliament has power to make laws. Although the courts normally interpret 'public purpose' broadly there are limits. ⁵² Persons who are affected by a notice of resumption of their land may apply to administrative tribunals to set aside or vary the notice. The grounds for review include issues such as unsuitability of the land for purposes for which it is being resumed, and whether there is some other means of accommodating the acquiring authority's needs.⁵³

Canada

[109] In Canada the power to expropriate is exercised pursuant to general statutory codes which prescribe the procedure, the basis of compensation and the method by which disputed compensation claims are resolved.⁵⁴ The power to expropriate is not expressly provided for in the Constitution but is assumed to be rooted in the concept of sovereignity and the prerogative of the State or the province. Each province has a general power to expropriate within its area of jurisdiction, by virtue of its legislative power over "property and civil rights in the province". The federal power is limited to expropriation for a purpose falling within some specific head of legislative authority, for example national railways, harbours and airports.⁵⁵

[110] In Canada there is no constitutional guarantee of compensation for expropriated property rights. Whether or not compensation is provided "is a matter of policy rather than legislative power".⁵⁶ Although compensation claims are statutory and depend on statutory provisions, the courts, in the absence of legislation specifically providing for compensation, apply the principle of statutory interpretation which raises a presumption in favour of the payment of full compensation. ⁵⁷

[111] Legislation provides in general terms that the owner of an expropriated interest in land may claim compensation. The terms "owner", "expropriate" and "land" are variously defined. Usually an owner is any person having an estate, interest, right or title in or to the expropriated land or interest, including a mortgagor, mortgagee, landlord, tenant, execution or judgment creditor and a lien - holder, but not a bare licencee. Land may include a legal or equitable estate, term, easement, right or interest, and may also include mines, minerals and quarries.⁵⁸

[112] Legislation defines "owner" either specifically or in general terms so as to include a tenant, and some statutes expressly provide that a tenant "includes a lessee or occupant occupying premises under any tenancy whether written, oral or implied"⁵⁹ . Under Canadian law, in most cases a tenant is entitled to compensation both in respect of the value of the lease and what is referred to as 'disturbance damage'⁶⁰

[113] Under the Canada Act, the Minister of Public Works may expropriate any interest in land which in his opinion is "required by the Crown for a public work or other public purpose.⁶¹ Where the Minister abandons the expropriated interest either in whole or in part by serving a notice of intention to abandon, the previous owner may either reject the abandonment and require the expropriation to proceed, in which case, he recovers full compensation, or accepts the abandonment, in which case the property re-vests in him and he can claim compensation for consequential damages. Some provincial statutes have similar abandonment provisions.⁶²

[114] It will be observed from the above that the right of eminent domain in the various jurisdictions referred to above does not carry with it an unfettered and untrammeled power on the part of the State or its institutions to expropriate private property at their whim or will. Instead the right is subject to constraints set either in the Constitutions or the legislation or both whichever is applicable to each of the jurisdictions mentioned above with varying degrees of restraint on the power and in most cases subject to the right of review by the Courts. In virtually all the jurisdictions referred to above, the raison d'etre for the expropriation is for some public purpose, use, interest, benefit or necessity. The recurrent leitmotif is that the expropriation has to serve some greater good of the public as opposed to any self-serving interest of the State or its institutions. It will also be observed that in many of the jurisdictions specific provision is made in statutory legislation and in administrative rules for expropriated property to be returned to the original owner if it is not used for the purpose for which it was expropriated or if such purpose is abandoned.

[115] The applicant contends that he was forced to give up ownership of his properties when they had been expropriated from him by the first respondent for the public purpose originally intended and asserts that now that that purpose changed he is entitled to restitution of his properties against payment by him of their market related value. He contextualizes this claim within the framework of the rights contained in s 7 (2), s 25 (1), s 26 and s 33 of the Constitution and relies on the commentaries of certain writers who, on the basis of certain jurisprudential principles applicable to the law of expropriation in foreign jurisdictions, notably Germany, postulate the view that property that was expropriated for a public purpose that was never realized has to be returned to the original owner, even if compensation was paid for it.

[116] S 7 (2) of the Constitution imposes a duty on the State and its institutions to "respect, protect, promote and fulfill the rights in the Bill of Rights". To "respect rights" means to pay heed to them and not to infringe them. The rights guaranteed in the Bill of Rights can be limited by the State only in accordance with the limitation clauses in s 36 of the Constitution.⁶³ To "protect rights" means to guard them and defend them against infringement by the State or private individuals. To "promote and fulfill rights" means to advance and facilitate the exercise of rights by providing the means for their exercise and attainment.

[117] The starting point in the present case therefore is to analyse the rights the applicant lays claim to under the Constitution in order to establish whether he is entitled to the respect, protection, promotion and fulfillment of those rights as contemplated in s 7 (2) of the Constitution. In what follows I deal with each of those rights relied upon by the applicant and the context in which he raises them.

The right in terms of section 25

[118] I have already dealt briefly with expropriation and deprivation of property under s 25 of the Constitution. The relevant provisions of s 25 are :

"25.[1] No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.

[2] Property may be expropriated only in terms of law of general application -

(a) for a public purpose or in the public interest; and

(b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.

[3] The amount of compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interest of those affected, having regard to all relevant circumstances, including -

(a) the current use of the property;

(b) the history of the acquisition and use of the property;

(c) the market value of the property;

(d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

(e) the purpose of the expropriation.

[4] For the purposes of this section -

(a) the public interest includes the nation's commitment to land reform, and to reforms to bring about equitable access to all South Africa's natural resources; and

(b) property is not limited to land."

[119] Subsections 5 to 9 of s 25 are not directly relevant to the present case but as cautioned by the Constitutional Court in First National Bank the relevant subsections must not be construed in isolation, but in the context of the other provisions of s 25 in their historical context, and indeed in the context of the Constitution as a whole.⁶⁴

[120] S 25 embodies a negative protection of property and does not expressly guarantee the right to acquire, hold and dispose ofproperty. As pointed out in First National Bank, this was one of the major objections raised against the section and rejected by the Constitutional Court in the First Certification case. ⁶⁵ The court, after having considered the variety of formulations of the right to property in the Constitutions and Bills of Rights in the various recognized democracies concluded that there was no universally recognized formulation of the right to property and held that the '[p]rotection for the holding of property is implicit in [s] 25'. ⁶⁶

[121] It has been submitted on behalf of the applicant that "property in the context of s 25 includes more than immovable property and will include in the context of deprivation of property, rights of "ownership, mortgage, lease, servitude, mineral rights, [and] liens'. In support of this proposition, applicant relies on the commentary made by the learned authors De Waal et al. ⁶⁷ In First National Bank it was pointed out that "[a]t this stage of our constitutional jurisprudence it is, practically impossible to furnish - and judicially unwise to attempt - a comprehensive definition of property for purposes of s 25." In light of these remarks I do not propose attempting any such definition but accept, without deciding for purposes of this case, that the applicant's lease of the properties in question is encompassed by the word 'property' as used in s 25. Needless to mention "ownership" of immovable property lies "at the heart of our constitutional concept of property, both as regards the nature of the right involved as well as the object of the right and must therefore, in principal, enjoy the protection of s 25".⁶⁸

[122] The applicant at present does not have any right of ownership in the properties. That right was divested from him when the properties where expropriated from him by the first respondent in 1992. Ownership of the properties vests in the first respondent. Moreover, the expropriation was for a legitimate public purpose, was not arbitrary and the applicant had been paid compensation in terms of a settlement agreement which he had reached with the first respondent. In these circumstances, I do not think it is open to the applicant to rely on any present right of ownership to the properties and to claim an infringement of such right in respect of the manner in which the first respondent administered and dealt with the properties. Indeed, I do not think that the applicant pitches his case at that level. Instead, what the applicant seeks to do is to bring his case within the purview of s 25 (1), not on the basis of any present right of ownership of the properties, but rather on the basis that once the purpose for which the properties were expropriated changed, he as the previous owner of the properties had a right to re-obtain them. In support of this right he relies on the conclusion reached in the First National Bank case where the court found that the concept of arbitrary deprivation of property (prohibited in s 25 (1) of the Constitution contains both a procedural and a substantive component. ⁶⁹ In First National Bank the court concluded that:

"a deprivation of property is 'arbitrary' as meant by s 25 when the 'law referred to in s 25 (1) does not provide sufficient reason for the particular deprivation in question or is procedurally unfair. Sufficient reason is to be established as follows:

(a) It is to be determined by evaluating the relationship between means employed namely, the deprivation in question and ends sought to be achieved, namely, the purpose of the law in question.

(b) A complexity of relationships has to be considered.

(c) In evaluating the deprivation in question, regard must be had to the relationship between the purpose for the deprivation and the person whose property is affected.

(d) In addition, regard must be had to the relationship between the purpose of the deprivation and the nature of the property as well as the extent of the deprivation in respect of such property.

(e) Generally speaking, where the property in question is ownership of land or a corporeal moveable, a more compelling purpose will have to be established in order for the depriving law to constitute sufficient reason for the deprivation than in the case when the property is something different and the property right something less extensive. This judgment is not concerned at all with incorporeal property.

(f) Generally speaking, when the deprivation in question embraces all the incidents of ownership, the purpose for the deprivation will have to be more compelling than when the deprivation embraces only some incidents of ownership and those incidents only partially.

---