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Republic of South Africa

IN THE HIGH COURT OF SOUTH AFRICA

(Cape of Good Hope Provincial Division)

Case No: 10891/04

In the matter between

Victoria & Alfred Waterfront (Pty) Ltd First Applicant

V & A Waterfront Properties (Pty) Ltd Ltd Second Applicant

V & A Waterfront Marina (Pty) Ltd Third Applicant

and

The City of Cape Town First Respondent

Transnet Limited Second Respondent

The Minister of Environmental Affairs and

Developmental Planning, Western Cape Third Respondent

Devonshire Body Corporate First Third Party

Cape Castle Hotel Body Corporate Second Third Party

Pelin Investments CC Third Third Party

Nassau Property Investments (Pty) Ltd Fourth Third Party

The Pelin Investment Trust Fifth Third Party

James Mark Deane Sixth Third Party

Laurie Baker Fialkov Seventh Third Party

Judy Elvia Rogers Eighth Third Party

Catharina Snyman Ninth Third Party

John Hercules Du Plessis Tenth Third Party

Johannes Cornelius Jakobus Nel Eleventh Third Party

Brian Smith Twelfth Third Party

Claire Smith Thirteenth Third Party

Bella Bertha Greenberg Fourteenth Third Party

Anthony Baggot Fifteenth Third Party

JUDGMENT DELIVERED ON FRIDAY 16 SEPTEMBER 2005

DESAI J:

This matter relates to the continued application of the current zoning regime which applies to the Victoria and Alfred Waterfront (“the Waterfront”) in Cape Town. Since 1993 the Waterfront has been developed in accordance with that zoning and it is a patent commercial success, with sixty percent of its overall development already completed. The first respondent, the City of Cape Town, has now stopped further development approvals and is refusing to deal with plans submitted in terms of the abovementioned zoning provisions. It contends that the zoning agreement concluded by it, as well as the recordal of the zoning reflected in the agreement, are invalid. It denies being unfriendly to capital development and maintains that it is constitutionally bound to act in accordance with the principle of legality and is unable to behave selectively in its compliance with the law to accommodate the commercial exigencies of the applicants. In the circumstances, the applicants seek appropriate declaratory relief.

The first applicant is the developer and managing agent of the Waterfront. The second and third applicants are the registered owners of the property constituting the development area.

The first respondent is the successor in law to the Municipality of the City of Cape Town, and to the Metropolitan Substructure of Cape Town. Transnet Limited is the second respondent. It will be more convenient to refer to the first respondent and the second respondent as “the City” and “Transnet” respectively. Transnet’s joinder application succeeded despite opposition from some of the parties. It was permitted to participate in these proceedings on the basis that it has a sufficient interest in the subject matter of this application. The City also sought the joinder of the Minister of Environmental Affairs and Development Planning of the Province of the Western Cape. The Minister did not oppose her joinder. She has filed an affidavit in which she notes an initial concern that the right to just administration as envisaged in section 33 of the Constitution of the Republic of South Africa, 1996 may be implicated in this case. However, as the applicants have acknowledged that the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) may be applicable and also concede that PAJA potentially applies to applications made in terms of the zoning provisions contained in the agreement, the Minister abides by the decision of the court.

There are several Third Parties herein. They are largely the owners of sectional title units in buildings situated in Green Point and overlooking a portion of the Waterfront still to be developed. The complaints from the Third Parties appear to have precipitated the City’s decision to stop development approvals in terms of the zoning agreement. They contend that there is a real prospect of their sea views being lost or substantially interfered with should the planning approval process take its present course. It seems that they do not wish to have their views obstructed by buildings to be built in the area known as “the tank farm” in the old harbour area. Green Point borders on a section of the said area which contained large tanks in which fuel was stored. These tanks were removed as part of the development of the Waterfront. The applicants maintain that the Third Parties opportunistically wish to protect their views of the Waterfront which arose as a result of the removal of the storage tanks. In any event, the Third Parties oppose the relief sought by the applicants. They argue that the planning process for the Waterfront does not take proper account of their interests and they broadly align themselves with the basis upon which the City resists the relief sought by the applicants.

In a counter-application the City seeks relief which is directed at implementing what it contends are the appropriate steps to be taken in terms of its understanding of the applicable planning regime governing the Waterfront land.

The material facts which underpin the issues requiring adjudication are not in dispute. The relevant statutory provisions are common cause. The current dispute relates largely to the parties ultimately adopting differing positions on the proper construction and application of section 13 of the Legal Succession to the South African Transport Services Act, No.9 of 1989 (“the Legal Succession Act”). I refer briefly to the history and background of the Waterfront in order to place the section and Act in its proper context.

During the 1980’s the Waterfront area was used for railway and harbour purposes. It had a working harbour, several derelict stores and the aforementioned oil storage tanks. It was owned by the South African government, in the form of the South African Transport Services (“SATS”), and its use was regulated by the South African Transport Services Act, No.65 of 1981. Although a portion of the land apparently fell within the municipal boundaries, the land was not zoned in terms of the City’s town planning scheme prepared under the Townships Ordinance, No 33 of 1934.

In 1985 the then Minister of Transport and Environmental Affairs established an inter-departmental commission of inquiry, known as the Burggraaf Committee, for the purposes of determining the potential for greater public use of South Africa’s harbours. It reported in 1987 that SATS should release land for leisure, recreational, commercial and residential purposes. Specific recommendations were made with regard to the docklands around the Victoria and Alfred basins (the Waterfront area) in Cape Town. It proposed that a working harbour be maintained and that the docklands around it be re-developed as a mixed use area, focussing on tourism, commercial and residential development.

A year later the first applicant was incorporated. It’s principal asset was a long lease over 123 hectares of the old harbour area. Its mandate was to redevelop the docklands around the Victoria and Alfred basins in accordance with the report of the Burggraaf Committee.

With the exception of certain chapters thereof, the Legal Succession Act came into operation on 6 October 1989. The government gave effect to the recommendations of the Burggraaf Committee in section 13 of this Act. Because of the importance of this section to the determination of the present matter, it is convenient to set out its provisions in full. The section reads as follows:

“13. Property Development

1. Subject to the provisions of subsection (2), the Company shall be entitled, up to a date three years after the date referred to in section 3(1), to develop, cause to be developed, to use and to let its immovable property for any purpose, including the construction and exploitation of buildings and structures for commercial purposes, notwithstanding the fact that the immovable property concerned is either not zoned or is zoned or intended for other purposes in terms of an applicable township construction or development scheme, guide plan or statutory provision.

2. Immovable property may be developed in terms of subsection (1) only –

   1. after an agreement has been reached with the local authority concerned; or

   2. should such agreement not be reached, in terms of permission granted by the Administrator of the province concerned subject to such conditions as he may consider appropriate; or

   3. should the development be in conflict with an approved guide plan, with the approval of the Administrator referred to in Section 6A(12) of the Physical Planning Act, 1967.

3. The local authority –

   1. with which an agreement is reached in terms of subsection (2) or with which an agreement was reached in terms of section 9 (26) of the South African Transport Services Act, 1981, prior to the operative date of this Act; or

   2. which exercises jurisdiction over property in respect of which permission or approval is obtained in terms of subsection (2) from the Administrator concerned,

shall record, in connection with the use of the immovable property agreed upon or in respect of which permission or approval is obtained in terms of subsection (2), a suitable zoning for such immovable property, whereafter such zoning shall be regarded as the zoning of the property for all purposes.”

Section 13(1) was amended in 1993 to increase the three year period referred to therein to five years. In 1995 a new section 13 was substituted as the agreements contemplated in section 13 could not be completed timeously. I shall refer to the new section 13 in due course.

The second respondent, Transnet, was the company formed in terms of section 2(1) of the Legal Succession Act. It became the successor to SATS and pursuant to section 3(2) of the said act the Waterfront land was transferred to Transnet on 1 March 1990.

Transnet, the City and the first applicant thereafter entered into negotiations to redevelop the Waterfront area. Their negotiations culminated in the parties signing certain heads of agreement on 6 December 1991. The heads recorded a number of principles of agreement. The parties adopted the goals, objectives, policies and physical structure contained in an earlier report of the first applicant which was dated September 1989 and referred to as “the development framework”.

The principles of agreement also recorded that the City approved the development rights recorded in the development framework. Furthermore, the first applicant was to review and update the development framework and submit its updated development framework reports to the City at five-yearly intervals. The parties adopted a “package of plans” approach which meant that plans would be prepared and presented to the City for its consent in successive stages, dealing initially with more general matters contained in precinct plans and progressing ultimately by stages to particular building plans.

On 31 March 1993 the so-called zoning agreement was concluded. First applicant, the City and Transnet were the parties to this agreement. Its preamble records the following:

[a] “AND WHEREAS the parties are desirous of entering into an agreement as contemplated by section 13 of the ACT (the Legal Succession Act) entrenching the aforesaid principles and recording an appropriate zoning as envisaged by the aforesaid section.”

The zoning is contained in clause 2 of the agreement which reads as follows:

[b] “For the purposes of section 13 of the ACT it is recorded that the zoning applicable in respect of that portion of the PROPERTY which falls within the MUNICIPALITY’S area of jurisdiction is that of DEVELOPMENT ZONE in terms of which property so zoned may be developed or used –

(a) as of right, by TRANSNET for the exercise of any of its statutory rights, powers, duties and obligations;

(b) with the consent of the MUNICIPALITY, for any other purpose.”

Clause 3 contains the consent of the Municipality (first respondent):

“It is further recorded that the MUNICIPALITY has, in terms of the above zoning, consented subject to the conditions contained in Annexure “Z” hereto, to the development and use of that portion of the PROPERTY which falls within the MUNICIPALITY’S area of jurisdiction for the purposes contained in such Annexure.”

The purposes for which the property may be developed and used are set out in clause 2 of annexure “Z”. It provides as follows:

“2.1 The PROPERTY may be developed and used for a compatible mix of industrial, recreational, cultural, educational, residential, retail and office purposes.

2. In addition to the above, portions of the property may be reserved and/or developed for Street Purposes.”

Annexure “Z” also sets out the conditions applicable to the development and use of the property, for instance the approval of the City for precinct and site development plans.

During 2000 a portion of the Waterfront land known as the Marina land was sold and transferred to the third applicant. The remaining Waterfront properties were sold and transferred to the second applicant. The second and third applicants are accordingly the registered owners of all the property forming part of the development area which is subject to the zoning agreement.

Since 1990 the development of the Waterfront has proceeded in a fairly systematic manner. The development has been extensive with its current total asset value being estimated at 2.8 billion rand. The zoning agreement, as stated above, was concluded in 1993 and since then the development has taken place in terms of the said agreement. All the applications for the consent or approval of the City have been submitted to the City in terms of the zoning agreement and the City has dealt with it in terms of the said agreement. The development has now reached a stage where other property owners are contending that they could be adversely affected by certain aspects of such development. They have raised concerns, inter alia, relating to public participation in connection with applications for the amendment of Precinct Plans and the approval of amendments to Site Development Plans. It appears that the development of the Marina land, in particular, has a potentially more direct impact upon property owners and occupiers in the Green Point area. These concerns have resulted in the City reconsidering its established practices in respect of planning permission for the development of the Waterfront land. Both the City and the applicants sought legal advice on unclear aspects of the planning regime. The respective opinions obtained by them differ in material respects and result in the present dispute.

The issue of views being lost has already been canvassed to a limited extent in this court. In Mouton and Ano v the V & A Waterfront Marina (Pty) Ltd (Case No.7421/2004 – Cape High Court) (“the Mouton application”), Foxcroft J, on 23 September 2004, dismissed with costs an application to halt construction of a building in the Marina residential development, pending an appeal or review proceedings. Mouton had contended that the building under construction interfered with his views overlooking the harbour. Unfortunately the legislative history of the Legal Succession Act and in particular the provisions of section 13 prior to the 1995 amendment thereof, were not drawn to the Court’s attention. Mouton as well as the present applicants accepted in that matter that section 13(6) of the Legal Succession Act, as amended in 1995, was the applicable section. The correct sub-section of section 13 was also not pointed out to the Court by the City. In any event, the parties herein are in agreement that the Mouton application is not of any direct assistance in deciding this matter.

It was argued on behalf of the City that the planning regime for which the applicants contend results in all owners of Waterfront property being released from the constraints of the planning development framework which governs all other property owners within the City’s municipal boundaries and in certain respects would release them from some of the provisions of the Land Use Planning Ordinance No.15 of 1985 (“LUPO”). They argue that there is no rational basis for this differentiation nor is there any basis to adopt a construction of the Legal Succession Act favouring such an outcome. This, they say, runs counter not only to the integration purpose of section 13, but also offends the constitutional value of equality.

The aforementioned allegations are disputed by the applicants who contend that the zoning and development of the Waterfront are governed by section 13 of the Legal Succession Act. They maintain that the zoning agreement was validly concluded in terms of section 13(2)(a) of the Act (before the amendment in 1995). The parties, they say, are bound by the agreement in terms of which the zoning of the Waterfront is “Development Zone”. The zoning and its recordal took place in terms of section 13(3) of the said Act and the consequence thereof is that the zoning was regarded “as the zoning of the property for all purposes.” With the amendment of section 13 in 1995, and the new sub-section 13(5)(b), the said zoning was “deemed to be a zoning of such land for all purposes.” While conceding that “Development Zone” is not a development category in the City’s zoning scheme, the applicants aver that the “suitable zoning” envisaged in section 13 is not in any way circumscribed by a local authority’s existing scheme. Where the consent or approval of the City is required, it must be sought and obtained in terms of the zoning agreement. LUPO is only applicable where the agreements are silent.

Transnet was entitled to develop its immovable property “for any purpose”, notwithstanding the fact that the immovable property was either not zoned or was zoned or intended for other purposes. Section 13(1) of the Legal Succession Act contains a provision to that effect. However, Transnet was only entitled to act in accordance with section 13(1) if, and after, an agreement had been concluded with the local authority in terms of section 13(2)(a). That happened in this instance. A zoning agreement was concluded with the City. The conditions of the development and use of the property were agreed upon by the parties and are contained in Annexure “Z”. The recordal of the zoning was not specific or limited to Transnet, but applied “for all purposes”. This deeming provision is perpetuated in section 13(5)(b) of section 13, as amended in 1995.

Various arguments were advanced by the City and the Third Parties in support of their case.

It was initially argued on their behalf that the zoning agreement, and the recordal of a suitable zoning by the City, are ultra vires section 13 in that only a “suitable zoning” catered for in the City’s zoning scheme could have been recorded in terms of section 13(3). If the “zoning” did not appear in the zoning scheme, it would have to be amended appropriately.

As Mr W G Burger, SC, who appeared with Mr J A Newdigate, SC and Ms K Pillay for the applicants correctly contended, there are several problems with the latter argument. Firstly, it ignores the wording of the section. The type of limitation which the City now seeks is not provided for in that section. What is required in terms of the section is that the zoning recordal should be a “suitable zoning for such immovable property”. If the City was obliged to choose a zoning which already appears in its zoning scheme, the section would have been worded differently. Instead, there is the deeming provision in terms of which the zoning is regarded “as the zoning of the property for all purposes”. Where the legislature intends limiting the choice of a zoning, it states so in so many terms. Section 13(4)(c) of the amended section 13, for instance, provides for a zoning “in terms of the land use zones provided for in terms of the applicable zoning scheme.” Words to the aforementioned effect are not contained either in the old section 13(3) or in the new section 13(5).

Where the property concerned has not been zoned in a manner which would have permitted development, section 13(1) contemplates the development of the property by Transnet once an appropriate agreement has been reached in terms of sub-section 13(2)(a). It is clearly not a requirement for the development of the property by Transnet that it be zoned in terms of existing scheme regulations. Section 13 would not have been applicable if the property had already been zoned in terms of the said zoning scheme. Section 13(1) in express terms envisages Transnet developing its property “for any purpose”. Such development may lead to Transnet, as the developer, selling and transferring portions of the land to third parties. The recordal of a suitable zoning “for all purposes” in section 13(3) results in subsequent owners not being faced with the situation of his or her use of the property being regarded as unlawful because it did not accord with a zoning in terms of the City’s existing zoning scheme.

At some stage it was contended on behalf of the City that parts of the areas fell outside the municipal area of the City when the zoning agreement was concluded. This meant that it was not the relevant “local authority” for the purposes of section 13(2)(a) of the Legal Succession Act. This aspect was not referred to in argument by the City’s counsel. It appears that this situation was recognised and expressly dealt with in clause 4 of the zoning agreement. Such property was to be regarded as if located in the City’s area of jurisdiction. Furthermore, it is apparent from the affidavits filed by the parties that by virtue of a re-delimitation of the City’s boundaries, the entire area now falls within the City’s area of jurisdiction.

Both the City and the Third Parties advanced the argument that when Transnet ceased to be the owner of the Waterfront, the zoning agreement no longer applied. In other words, Transnet’s rights could not be transferred to a subsequent owner. The applicants do not in fact rely upon any transfer of rights in section 13(3) provided that the zoning would be regarded as the zoning of the property “for all purposes”. This deeming provision is perpetuated in section 13(5)(b), as subsequently amended. The recordal of the zoning is of general application and of necessity applicable to subsequent owners of the land.

The City also relied to some extent upon the judgment of this court in Hesbro Property Investments (Pty) Ltd v The City of Cape Town and Ano. (Case No.9490/02 – Cape High Court) delivered by Traverso DJP on 13 December 2004. The Hesbro matter dealt with circumstances where the City had concluded an agreement in respect of property with Transnet during 1993, and had recorded a zoning of the property as “Development Zone” in a document similar to the zoning agreement herein. Hesbro sought to extricate itself from the consequences by suggesting a different zoning as the suitable zoning. I may mention that the City did not in fact suggest that the agreement was ultra vires in any way.

In the course of her judgment Traverso DJP noted “… the purpose of the zoning determination (in terms of section 13(3) of the Legal Succession Act) is to bring the land which formerly fell outside the pertinent zoning or town planning scheme under the auspices of the zoning scheme of the local authority.” This remark was made obiter dictum and did not deal with a point in issue in the Hesbro matter. The City now seeks to use it in support of its present contentions. The remark quoted, in any event, when read in context does not in fact support the City’s argument.

The principal argument advanced on behalf of the City - and also to some extent by the Third Parties – relates to the alleged lack of sufficient particularity in the zoning agreement. It was argued that the identification of the uses to which the land could be put and the nature of the development permitted thereon were not determined with “sufficient particularity” to enable the recordal of a suitable zoning as contemplated in section 13(3) of the Legal Succession Act. The zoning agreement, they say, provides a broad procedural framework for the future development of the Waterfront. While this approach, and in particular the package of plans system agreed upon by parties, has evident practical advantages in the context of a development project such as the Waterfront, it is at odds with what is contemplated by section 13(1) and 13(3) of the Legal Succession Act and the City’s zoning scheme.

What section 13(1) of the Legal Succession Act prior to its amendment actually says, is of some significance in this regard. It contains three fundamental elements. In the first instance, it creates an entitlement or a right on the part of Transnet. The nature of the right is clearly set out. Transnet was entitled to develop its property “for any purpose”. Secondly, Transnet’s entitlement to develop is amplified as follows:

“… notwithstanding the fact that the immovable property concerned is either not zoned or is zoned or intended for other purposes in terms of an applicable townships construction or development scheme, guide plan or statutory provision.”

In effect, Transnet had the right or entitlement to develop the property even though what it would be doing would otherwise be illegal. It would be illegal because it contemplates the absence of appropriate zoning. The third important aspect emerges from the words at the commencement of the section:

“(1) Subject to the provisions of subsection (2), the company …”

The aforementioned subsection relates to an agreement having been reached with the local authority concerned. In other words, the section in clear and unequivocal terms provides that Transnet is entitled to develop its property for any purpose subject to an agreement being concluded as contemplated in subsection 2. It seems that Transnet was required to obtain the agreement of the local authority precisely because the land had not been zoned for development as contemplated in section 13(1).

The agreement of the local authority is accordingly required for the development to take place. If there is such an agreement, Transnet may then develop its property in terms of section 13(1). The factual query which follows is whether there was an agreement as envisaged in section 13(2). In the light of the agreement referred to herein as “the zoning agreement” the answer to this query must be in the affirmative. It is apparent from clause 1 of the agreement. It reads:

“Now therefore, it is agreed between the parties as follows:

1. Transnet, whether itself or through another, shall be entitled to develop and use that portion of the property which falls within the municipality’s area of jurisdiction for the purposes and in accordance with the conditions contained in Annexure Z hereto.”

Clause 1 refers directly to Annexure Z and that annexure sets out what may be done. Another section, clause 3.7, refers to the heads of agreement being incorporated and reflected as an annexure. The development framework is attached to the latter document. Section 13(2) refers to the agreement. The recordal of a zoning is referred to in section 13(3). Once it is accepted that an agreement has been concluded, the debate shifts to whether the local authority has recorded a suitable zoning in terms of section 13(3). If it has not, it is still obliged to do so in terms of section 13(5)(4) of the amended section 13.

In arguing that the agreement must afford sufficient particulars about the intended development to enable the local authority to record a suitable zoning, counsel for City, it seems, conflate section 13(2), the agreement, and section 13(3), the recordal of the zoning. This approach is inconsistent with the wording of the section. The agreement contemplated in section 13(2) is not made dependent on the zoning in section 13(3). It works the other way around. The agreement precedes the recordal of a zoning. Furthermore, section 13(2) refers simply to an agreement. It does not say that the agreement must contain all the detail which a local authority might require in order to record a suitable zoning in due course. Following the ordinary meaning of the words in section 13(1) or (2), it is apparent that the first applicant, the City and Transnet concluded a valid and binding written agreement as contemplated in the said sections.

Pursuant to the conclusion of the agreement, the City became obliged in terms of section 13(3) to record a suitable zoning. This obligation was imposed by statute on the City. The City did not require the agreement of any other party to perform its obligations in this regard.

Mr A G Binns-Ward, SC, who appeared with Mr S P Rosenberg, SC, for the City, argued that if the City’s express recordal of a zoning is not a reflection of its own zoning scheme, then it is not a recordal as contemplated in section 13(3). They argued, in effect, that the only type of recordal which could take place is one reflecting the zoning scheme. This argument appears to be wrong. Section 13(3) provides for the recordal of a suitable zoning for immovable property which “is not zoned or is zoned or intended for other purposes in terms of an applicable statutory provision.” In other words, it is a recordal which relates to the uses of immovable property which is not appropriately zoned. The legal result of the zoning is that it is then “regarded as the zoning of the property for all purposes.” Section 13 relates to property which is not zoned appropriately. The situation is legalised by the recordal of a suitable zoning which results in the deeming provision in section 13(3). What is recorded is deemed to reflect the zoning for all purposes, even though the property is not so zoned. The restriction counsel for the City seek is not to be found in section 13(3) and it is also inconsistent with what the section in fact does – it deems the recordal to be the zoning for all purposes. It was argued that the meaning of a deeming provision must be taken from the context. That must be so. However, in this instance there is a deeming provision as there has been no zoning in terms of a town planning scheme.

Land which was previously owned by the government in the form of SATS and then by Transnet had to be brought into a situation where it could be controlled. Control, however, does not imply that it had to be in terms of an existing scheme regulation or zoning scheme of a local authority. Section 13(3) does not limit the local authority to choosing a zoning from its own zoning scheme. Such a restriction is inconsistent with the wording of section 13(3), with its logic and with the context in which it was drafted.

The next attack by the City and the Third Parties on the City’s recordal of the zoning is equally unconvincing. The City attacks its own recordal of the zoning. They say that what they have done is not detailed enough – it lacks sufficient particularity and is accordingly not detailed enough either to be a zoning at all or to be a suitable zoning.

The legislative context is of some importance in this regard. The statutory obligation to record a zoning arises immediately on the conclusion of the agreement. The recordal of a zoning is not dependent upon how things unfold or how the development progresses. The suitability of the zoning must take this into account. In the particular factual context it was appropriate and suitable for the City to record this zoning. The Waterfront was then a large patch of land containing stores and storage tanks of fuel. It was to be developed over several years. In these circumstances it was thought appropriate to have a flexible recordal of zoning.

Furthermore, the section itself refers to a suitable zoning. It does not seek to prescribe what that must contain. This aspect is left to the local authority.

The argument with regard to the lack of particularity also ignores or seeks to play down the considerable detail in the recordal itself. As already indicated, one finds in clause 1 the agreement with Transnet. The recordal of a development zone is contained in the next clause and clause 3, on any interpretation, brings in Annexure “Z” and its reference both to the heads of agreement as well as the development framework as part of the zoning.

Annexure “Z” is effectively the restriction. It is the framework which applies to the recordal of the zoning. That is the context which cannot be ignored. The property may be developed and used “for a compatible mix” of industrial and other uses (see 2.1 of Annexure “Z”). Bulk is defined. A specific figure is given in respect thereof and the distribution of such bulk is subject to the approval of the City (see 3.1 of Annexure”Z”). The said annexure sets out the approach to development. There is a hierarchy of plans starting with the precinct plans contemplated in the heads of agreement and culminating with building plans. The City is permitted control at every stage of the development. Once the site development plans have been approved by the City, the building plans are to be submitted to it for its approval. It does not do so contractually. The City has a discretion and in the exercise of that discretion it fulfils a public law function. That function must be exercised in accordance with the applicable principles of administrative law.

The rights and duties arising from Annexure “Z” are to be utilised with due regard “to the principles, policies and objectives contained in the heads of agreement.” (See 3.7 of Annexure “Z”). The heads include the development framework. It sets out the various precincts and the development that is to take place thereon. The individual precinct plans identify the land and water uses in a more site specific manner. Changes to the primary land-use may only occur within the framework of goals and policies identified (see 4.4 of the Development Framework). The detail in the framework includes a Traffic and Transport policy, a movement network which relates to public transport routes and pedestrian movement, land use policy and proposals, and a public open space policy. Of some importance in this application is the Views and Vistas policy which endeavours to retain existing views overlooking the harbour, the sea, Table Mountain and Signal Hill. (See 4.9 of the Development Framework). Furthermore, the Waterfront was to be developed in phases and in the manner specified.

I refer briefly to the City’s own zoning scheme (Zoning Scheme: Scheme Regulations (dated 29 June 1990, official gazette 4649). Section 15 thereof is a central provision of the City’s zoning scheme. It sets out the various uses of land and buildings. For example, a zoning of General Commercial permits a wide range of activities varying from blocks of flats and residential buildings to shops and restaurants. Where the zoning per se does not allow the owner to do something, he or she may still do so with the consent of the municipality. Zoning permits on this scenario a huge range of activities. It seems that the concept of zoning put up by the City and the Third Parties is not only inconsistent with the ordinary meaning of the word but is also inconsistent with the City’s own scheme regulations. The specific nature and use of a building is determined when an application is submitted to the City for a building plan to be passed. The argument that if you stop at section 15 the proposed zoning is not a zoning at all, is not a proposition which can be reasonably advanced. Section 15 is the key aspect of the City’s own scheme regulations and it permits in certain venues several diverse activities.

It was also argued that because provision is made in the City’s scheme for a particular topic which is not found in this recordal, it is no longer to be regarded as a suitable zoning. Reference was made, inter alia, to bulk, parking, heights and setbacks. As I have already indicated herein the issue of bulk was expressly dealt with. Figure 4.1 of the development framework indicates three areas intended for parking. The narrative states that parking will be provided in the designated areas as the need arises. The suggestion that a recordal of a zoning was either not suitable or was not a zoning at all because heights and setbacks were not decided at the outset, lacks cogency. The recordal of zoning makes it clear that the whole process involves control by the City. The spatial distribution depends on the approval of the City. The precinct plans, the site development plans and the building plans are all controlled by the City. It was argued that what one will normally find in a precinct plan, is what would be dealt with by means of zoning. It is simply incorrect to suggest that at the zoning stage one has to have the degree of particularity which is then going to be contained on the basis of this recordal in a precinct plan. The development framework indicates very clearly what the purposes are of the particular development. It may be that at the time when the zoning agreement was concluded the finest detail was not known. It is a long term project over a very large piece of land. The possibility that market conditions may change could not be excluded. The complaint about the fact that there is flexibility is somewhat misguided. The lack of detail or particularity argument is accordingly without foundation. What was required was a suitable zoning. In the circumstances of this case, the zoning was suitable and its suitability has been demonstrated by its use over ten years.

LUPO is invoked by the City and the Third Parties in different ways. It was suggested that what the applicants are attempting to do is to escape the provisions of LUPO.

It was submitted on behalf of the City that the nature of any restrictions can only be determined from agreements to be concluded with the City in the future. The agreements will confer planning and development rights which would not be subject to the prescriptions of LUPO. The example given is the following. Potential owners of immovable property in areas surrounding the Waterfront and which could be materially affected by the Waterfront development, would have no way of determining the nature of, and limitations on, future Waterfront developments. Nor would they have any right of appeal in terms of section 44(1) against zoning rights given in terms of the agreement with the City. They suggest that the nature of the zoning recordal renders LUPO inapplicable for all effective purposes.

The Third Parties submit in this regard that members of the public are entitled to hearing rights as a matter of course in terms of LUPO in all matters where a decision will affect the use of rights. They submit further that the “package of plans” approach circumvents the entire LUPO scheme permitting subdivision of precincts without recourse to the LUPO protection. The Third Parties contend that where the zoning agreement does not confer hearing rights on the public, it is contrary to public policy and unenforceable.

The recordal of a suitable zoning by the City in terms of section 13(3) of the Legal Succession Act does not exempt the particular properties from the provisions of LUPO. Neither section 13 nor the particular zoning of Development Zone excludes the application of LUPO, where it is relevant. As counsel for the applicants have pointed out for instance, an application for a departure from such zoning would take place in terms of section 15 of LUPO; any rezoning of such land would take place in terms of section 16, 17 or 18; subdivision of the particular land would take place in terms of section 22 or 23. The appeals procedure (now to the Premier) would also be applicable in terms of section 44 of LUPO. As the zoning recorded by the City makes provision for the approval or consent of the City to be obtained, applications for such consent or approval must be made in terms of the zoning agreement and not in terms of LUPO. The public are clearly not deprived of the right to participate in any decision as provided for in LUPO. Where a particular section of LUPO finds application to the facts in question, all of the provisions of LUPO in relation to public participation will likewise apply.

Section 13(3) is a recordal of the zoning for all purposes. It brings the particular recordal of zoning into LUPO. It says for all purposes. One of those purposes must be for the purposes of LUPO. The result is that all of the other substantive provisions of LUPO apply fully. It was at some stage suggested that LUPO would probably never apply as a departure or rezoning would not occur.

It is clearly not correct to say that LUPO will never apply. The Waterfront is a long term project and will probably exist for many years. Once the development is substantially complete, the appropriate authority may elect to zone the area differently, maybe with a great more detail. LUPO, however, does not apply to the consent of the City in terms of the zoning recordal itself. That is done by the zoning recordal.

Applicants’ counsel concede that PAJA potentially applies to applications made in terms of the zoning provisions. Where the rights of any person or the public are adversely affected by any such application, section 3 or 4 of PAJA would apply. It gives full recognition and content to the interests of the public, or any individual, and forms the cornerstone of administrative law in South Africa since its promulgation. There are, however, certain inherent limitations to the application of sections 3 and 4 of PAJA. Mr Binns-Ward argued that there is no reason why, as far as the Waterfront land is concerned, interested parties should be denied the procedural safeguards and administrative justice mechanisms of LUPO. He did not argue that PAJA does not apply. Instead he sought to downplay the effectiveness of PAJA, particularly in comparison with the provisions of LUPO. The comparison is not really relevant. In the present context, they do not operate in conflict with each other. If an application is made in terms of the provisions of LUPO, it applies together with all of its provisions relating to public participation. Where the application falls outside LUPO and is to be dealt with in terms of the zoning provisions, PAJA applies. The difference in practical terms is that PAJA is a more flexible instrument. It requires the public authority to have regard to the particular circumstances of the case and to see what degree of public or individual participation is required. LUPO is more prescriptive. For instance, the definition of “advertise” says exactly what must happen. In any event, where LUPO applies full recognition must be given to its provisions relating to public participation.

Any person aggrieved by a decision of the City, for example in relation to a precinct plan or a building plan, has certain remedies at his or her disposal. Besides internal remedies, there are also the provisions of PAJA relating to judicial review. This was the basis upon which the Mouton matter was brought to this court. In that case it was argued that the City had not acted properly in passing a building plan without taking into account the question of views. The application did not succeed because the City’s officials indicated that there was no question of due recognition not having been given to the question of views. The Mouton case illustrates the types of remedies that are available to people aggrieved by decisions taken by the City. They cannot, however, seek to set aside the whole zoning of the Waterfront to achieve such objectives.

In its counter-application the City seeks orders premised upon its contentions as to the legislative provisions applicable to the Waterfront. This court is not at liberty to zone the relevant property in terms of section 14(1) of LUPO. Section 14 does not purport to apply to the circumstances which arise in the present matter and, in any event, the City has already recorded a zoning. The alternative prayer relating to the classification of the property in terms of the land use zones provided for in the City’s zoning scheme in terms of section 13(4)(1) of the Legal Succession Act, is also not applicable. The land is no longer owned by Transnet – the said section specifically relates to land owned by the company – and further, sections 13(2) to (4) are expressly excluded by section 13(5)(a). The final alternative prayer asks for an order directing the recordal of a suitable zoning in terms of the City’s zoning scheme. As indicated herein, the City has already recorded a zoning and it is therefore unnecessary for it to do so again. I must accordingly dismiss the counter-application.

The applicants as the successful party are clearly entitled to their costs, including the costs of two counsel. Transnet aligned itself with the winning side. Their role in the outcome of this matter was, however, unsubstantial and it would be fairer to require them to pay their own costs. On the other hand, the Third Parties found themselves on the losing side. Though they were ultimately protecting their own proprietary interests, they were also representing the public interest in a matter of some importance. I would accordingly not mulct them in costs.

In the result it is ordered that:

1. A valid and binding written agreement was concluded between the First Applicant, the Municipality of the City of Cape Town and Transnet Limited on or about 31 March 1993, and amended by the addendum thereto concluded between the same parties on or about 27 July 1993 (which written agreement and addendum are hereinafter referred to as “the Zoning Agreement”) pursuant to section 13 of the Legal Succession to the South African Transport Services Act, No.9 of 1989;

2. The immovable properties owned by the Second and Third Applicants, as described in paragraphs 8 and 9 of the Applicants’ founding affidavit, are zoned as Development Zone in accordance with the provisions of clauses 2 and 3, read together with annexure “Z” of the Zoning Agreement, and as contemplated in section 13(5)(b) of the Legal Succession Act;

3. All applications for the consent or the approval of the First Respondent, as contemplated in clauses 2 and 3 and annexure “Z” of the Zoning Agreement, are to be dealt with by the Respondent in terms of the Zoning Agreement;

4. The First Respondent be directed to consider forthwith, in terms of and pursuant to the abovementioned Zoning Agreement, the applications described in paragraph 92 of the Applicants’ founding affidavit.

5. The counter-application is dismissed.

6. The First Respondent pay the Applicants’ costs of suit, including those of two counsel. The other parties are to pay their own costs.

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DESAI J

I agree.

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LOUW J

I agree.

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KNOLL J

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