By Duncan Wild 12 April 2014

This matter pertains to the validity of section 44 of the Land Use and Planning Ordinance (“LUPO“) in so far as it allows the provincial government of the Western Cape, through the applicant, the Minister of Local Government, Environmental Affairs and Development Planning, Western Cape (“Minister“), to hear appeals from the decisions municipalities on certain land use planning decisions.  The key question in the matter is the constitutional inter-relationship between the provincial and municipal spheres of government and their powers in relation to land use planning.  The potential importance of the Constitutional Court’s decision in this matter lies in the fact that in the relationship between provincial and municipal power.

The Constitutional Court, in an unanimous decision authored by Cameron J, confirmed the High Court’s finding of invalidity of section 44, however, but not in its entirety. We set out the background to the matter and the High Court’s decision below.

The Western Cape Division of High Court of South Africa, in Cape Town (“the High Court“) decided two cases on the same issue together. The one matter relates to a development known as the Suikerbossie Estate, near Gordon’s Bay. The developer, Gordonia Mount Properties (Pty) Ltd had applied for environmental approval for the development, as well as an application for planning approval under LUPO. The Minister granted the environmental approval in early 2009, and also decided an appeal against the municipality’s refusal of the planning permission under section 44 of LUPO, and granted the approval, which included a rezoning and subdivision of the land. This decision was initially challenged by the Gordon’s Bay Ratepayers Association. The developer initially opposed the relief sought, but later abandoned its opposition.

The second matter relates to a proposed development proposed by the owner of property, the Gera Investment Trust (“Gera“), between Bree, Waterkant and Strand Streets in Cape Town which would affect various 18th century buildings on the property. As the area is historically significant, special permission was required for the development, the City refused the permission, but on appeal under section 44 of LUPO, the Minister approved the development, and then later, after input from the City, placed certain conditions on the development. This decision was initially challenged by the Habitat Council, which was opposed to the development.

By the time the matters were heard, the parties, including the Minister, had agreed that section 44 of LUPO was unconstitutional and had agreed a draft order. The court nevertheless conducted an evaluation of the Constitutionality of the section.

In terms of section 156(1)(a) of the Constitution, read with Part B of Schedule 4, a municipality has executive authority to administer ‘municipal planning’, and, in terms of section 104(1)(b), read with schedules 4 and 5, a provincial government has the power to pass legislation relating to ‘regional planning and development’ as well as ‘provincial planning’.

The High Court found that section 44 of LUPO allowed an appeal of certain decisions taken by local government in relation to municipal planning to the provincial government, and the question that arose was whether this was permissible under the Constitution. The High Court found that schedules 4 and 5 of the Constitution which divide various powers between local, provincial and national government must be interpreted so as give distinct meaning to the powers allocated to the local and provincial governments. Therefore, “municipal planning” and “provincial planning” must be given distinct meanings. In particular, whilst planning decisions that had provincial implications could genuinely be appealed to the provincial government, those decisions with only inter-municipal implications, i.e. only having an effect within the municipality, would fall within the exclusive competence of local government.

The High Court therefore found that to the extent section 44 of LUPO allowed decisions of an inter-municipal nature to be appealed to the provincial government, and to allow the provincial government to take decisions on these issues it was unconstitutional.

The Constitutional Court agreed with this aspect of the order and confirmed the declaration of invalidity, and also agreed that the declaration of invalidity would not apply retrospectively and would not apply to pending appeal. .

Although the decisions by the Provincial Minister that were under review in the present matter would be set aside in order to ensure the parties had effective relief. In the Habital Council matter related to the De Waterkant development, the Court, as agreed by the parties, allowed an appeal to the City Council by Gera under section 62 the Local Government: Municipal Systems Act 32 of 2000 to the City Council or a committee of City councilors. Prior to this decision this route was available as an alternative to the LUPO appeal to the Provincial Minister.

The provincial government was given, by the High Court, a period of 24 months to rectify the legislation, and in the interim period the section would be read with wording that would only allow only decisions which fell with the provincial competence to be taken on appeal.

The Constitutional Court, however, refused to confirm these aspects, finding that it could not allow a wholly unconstitutional regime, including the system of appeals, to continue in the interim period.

Download the judgment here.