IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case no: 26165/2010

v

MEC FOR LOCAL GOVERNMENT

JUDGMENT

[3] In addition the Minister applies for an order striking out certain paragraphs of the replying affidavit of the applicant's Mr Verdonk on the basis that the allegations contained therein constitute a new ground of review which the applicant impermissibly seeks to advance in reply. In the alternative the Minister seeks leave to admit certain supplementary affidavits which deal with the substance of the "new matter" raised. The application to strike out is opposed by the applicant.

Background

[4] The applicant conducts business as a property developer and is the holder of development rights on the property, which is situated within the jurisdictional area of the Municipality some 4km north-east of the Plettenberg Bay central business district and in close proximity to the N2 national highway. It is about 9.8 hectares in extent and according to the applicant consists mainly of paddock areas with alien grasses and sparsely distributed exotic tree species. The surrounding area consists of properties used for mixed residential, commercial and other purposes.

[6] The applicant wishes to develop the property by the establishment of a retirement village comprising 173 units. The existing dwelling and outbuildings are to serve as a service centre to the planned complex.

[8] In terms of the provisions of s 27 of the PPA the rezoning of the property, which was a prerequisite for its development as contemplated by the applicant, could not be effected unless the designation of the property in the structure plan was amended to correspond with the proposed new zoning thereof. In the Western Cape applications for the amendment of structure plans are dealt with as if they are applications for the amendment of local structure plans in terms of s 4(7) of LUPO. This is consequent upon a directive issued by the Minister's department on 13 June 1996. The Minister is empowered to determine these applications and is also vested with the original power in terms of LUPO to determine applications for rezoning and subdivision. The latter power has however been delegated to the Municipality which in the ordinary course determines such applications within its jurisdictional area.

11.1. on the basis of the Garden Route fine-scale conservation map 2009 the natural vegetation on the site included Garden Route shale fynbos which had to be conserved; moreover a portion at the western end of the property and a section along the northeastern boundary thereof were categorised as a critical biodiversity area with a designated ecological corridor linking the Diep River to the Bitou River. Cape Nature Conservation did not support the application as it was concerned about urban sprawl as well as the availability of water to the area and the management of the additional sewerage load. (These may be referred to as the biophysical and environmental factors.)
11.2. extending the urban edge to incorporate the proposed development would over-extend the Municipality's service provision and the applicant's proposal did not give enough information associated with storm water management, sewerage servitude alignment and traffic. A retirement village should rather be located within the urban edge and close to amenities in order to obviate the need for excessive travel, expensive servicing costs, intensive resource consumption, intrusion into the scenic beauty of the area, and the destruction of agricultural land and biodiversity. The "leap frogging" of the development outside of the urban edge did not promote the aim of integration between the existing town and the previously disadvantaged community on its outskirts. The Department of Agriculture did not support the application. (These may be referred to as municipal planning considerations.)

11.3 the so-called "no-go" alternative (in other words, if no development occurred) would allow the property to retain a natural and rural setting. The proposed planning layout for the development represented urban cramming without consideration of the environmental attributes or visual sensitivity of the property. It would set a negative precedent for further development outside the urban edge as it did not constitute infill development.

[12] The department also remarked on the public participation process and the authorities that had been consulted, although no objections had been received to the applicant's proposed development insofar as the ECA authorisation was concerned.

[13] On 18 December 2009 the applicant submitted an appeal against the refusal of the ECA authorisation on the following grounds:
13.1. the department had failed to consider the socio-economic impact of the proposed development, in particular a specialist report provided by the applicant on potential employment opportunities to be created thereby.
13.2. the department had placed too much reliance on the Garden Route fine-scale conservation map 2009 which is not a tool to identify, evaluate and assess specific environmental impacts. The applicant's conservation specialist pointed out that no part of the property could be classified as a critical biodiversity area and that there was no functional ecological corridor crossing it.
13.3. the department had ignored the structure plan amendment approving the establishment of a retirement village on the property and that it in fact fell within the urban edge as delineated by the Municipality. Moreover the Department of Agriculture did not after all object to the proposed development (subject to certain conditions which the Municipality might impose concerning rezoning and subdivision).
13.4. there were no feasible site alternatives and the department had not requested a layout alternative. In any event "continued" agricultural use of the property would hardly contribute to the preservation of the fynbos said to be present thereat.
13.5. the issues raised by the department regarding sewerage capacity, servitude alignment, storm water management, the traffic impact assessment and the alleged lack of information in this regard had never previously been identified by the department as shortcomings.

[14] The appeal was dismissed by the Minister on 28 April 2010 and the reasons for his decision were furnished on 26 August 2010. They were in summary the following:
14.1. the department had sufficient information at its disposal to make a decision and was correct in reaching its decision on the basis of such information.
14.2. the Garden Route fine-scale conservation map is indeed a tool used to indicate broader conservation planning initiatives and although the applicant's conservation specialist had contradicted the map, that specialist's views had not been made available to interested and affected parties or authorities for verification. Many indigenous plant species occur on the north-eastern end of the property which in the department's view forms part of an ecological corridor. The applicant's specialist's view as to the functioning of a "corridor" was misleading and out of date as a corridor does not have to be entirely pristine in order to connect different areas within a critical biodiversity area.
14.3. the conclusion of the department as to the "no-go" alternative resulting in the preservation of the natural and rural setting of the property and its surrounds was supported. The applicant had not considered any alternative to mitigate the impact of the proposed development.
14.4. the development would constitute "leap-frogging" into agriculturally zoned land with low density habitation as it would be situated outside of the urban edge. Moreover there was no indication from the Municipality as regards the availability of adequate water and sewerage services.
14.5. the approval by the Minister's predecessor Mr Uys of the amendment to the structure plan was irrelevant since that approval constituted a separate process from the approval process under the ECA.

The grounds of review

[15] The applicant contends that in dismissing the appeal the Minister acted unlawfully on various grounds. Although they overlap to a certain extent, as I understand it, they essentially boil down to the following:
15.1 he failed to consider relevant considerations and took irrelevant considerations into account (s 6(2)(e)(iii) of PAJA). The relevant considerations which the Minister failed to take into account are: (a) the surrounding land usages and recent structure plan amendments; (b) the Municipality's determination of the urban edge; and (c) the impact of the proposed development on the natural environment.
15.2. he intruded into a local government competence, namely that of municipal planning and his decision was therefore taken for reasons not authorised by the empowering legislation (s 6(2)(e)(i) of PAJA). His decision was thus materially influenced by an error of law (s 6(2)(d) of PAJA).

[16]   Each of these will be considered in turn.

The failure to consider relevant considerations and the taking into account of irrelevant considerations

[17] The applicant contends that the Minister's refusal of the application on the basis of development being undesirable in the area within which the property is situated is inconsistent with the recent development history on adjacent properties and the concomitant structure plan amendments that allowed such properties to be developed.

[18] The land surrounding the property is a mixture of residential, commercial and other uses. The properties in the area with strong "recreational elements" (to use the Minister's words) have been developed primarily for commercial purposes, including the polo fields to the north; the Stone Fields Polo Estate to the west; and the NH Hotel (with 42 suites) and The Meadows residential development (with 13 residential units) to the south. To the east of the property across the N2 national road is the Goose Valley golf estate comprising 272 residential units. Goose Valley is neighboured by Fairway Close (with 13 residential units) and Turtle Creek (with 62 residential units). The Tides residential development is adjacent to Turtle Creek and consists of 36 residential units held under shareblock title. On the western side of the N2 highway and to the north of the property are located a building supplies store, a cash store, an industrial laundromat, a batching plant and the Denron Quarry. Various of the other properties in the area are in fact used for residential purposes, despite being zoned for agricultural use and/or designated in the structure plan for recreational use.

[19] The applicant's allegations concerning the use of the land surrounding the property are not disputed by the Minister. He claims however that most of these are "resorts" that have strong recreational elements and can thus be justified in a rural landscape. He says that the NH Hotel does not consist of 42 suites but 38 rooms and 3 suites. He says that the development of the Stone Fields Polo Estate commenced unlawfully and that action is being taken. Other than that he appears to accept the applicant's version.

[21] The applicant thus contends that the decision to amend the structure plan in relation to its property was entirely consistent with the development trend in the area and is equally consistent with the spatial development frameworks which have been adopted by the Municipality from time to time.

[22] The Minister's answer is that in each case apart from the "Old Nick" property, had he been the competent authority at the time of the relevant applications, he would - for various reasons set out in his affidavit - not have exercised his discretion in favour of the applicants concerned. As regards the "Old Nick" property the Minister says that the proposed development is regarded as an intensification of the existing village facility, an established tourism node in the Plettenberg Bay area. As such the proposed "tourism-related" uses are compatible with and would strengthen the existing tourism uses and tourism value of the site.

[23] However, as correctly pointed out by the applicant, the Minister's views as to whether the applications should or should not have been granted by his predecessors are irrelevant. The applications were approved and were not taken on review by the Minister or any other person. As a result the properties that formed the subject of the approvals are now developed and are included in the township development area of Plettenberg Bay. The Minister's contention that the applicant's ECA authorisation would set a precedent was incorrect, given that the various approvals granted from time to time by the Minister's predecessors had already set a precedent for the future development of the area. The development trend in the area has for some years been away from purely agricultural and recreational use. The general principle of planning in the area is thus to accommodate expansion in that area. The approval of the applicant's ECA authorisation would have been consistent with the pattern of development in recent years and would not have created a new node.

[24] What the Minister did in effect was to disregard these adjacent approvals on the basis that in his view they should not have been granted. In so doing he misdirected himself by failing to take into account relevant considerations and by failing to apply his mind to the planning position in the area as reflected in the structure plan. He appears to have approached the matter on the basis that he would not have granted these approvals - an entirely irrelevant consideration in the context of the ECA authorisation sought by the applicant. The Minister was faced with the consequences of a clear set of structure plan amendments in the area which he ignored. The structure plan reflects the property as being appropriate for township development and in particular the development of a retirement village. Had the Minister had proper regard to the nature and character of the surrounding properties he could not rationally have concluded that the applicant's property should be retained solely for agricultural zoning and use.

[25] Further, and as pointed out by the applicant, the Minister effectively ignored the recent structure plan amendment in relation to the applicant's property, despite the fact that the departmental guidelines themselves state that the approval of structure plan amendments should inform the context within which such decisions are made.

[26] These guidelines are to be found in Circular 3 of 2008 which was issued by the Minister's department to all municipal managers in the Western Cape on 5 November

'Under the interim Constitution an order of invalidity could be ordered to be retrospective, but if nothing was said it would, in the case of pre-Constitution legislation such as the section, operate prospectively only.
That position has been reversed under the 1996 Constitution. The current position is that the Constitution assumes the full retrospective effect of constitutional invalidation and empowers the Court declaring the invalidation to limit its retrospective effect. Section 172(1) of the Constitution provides as follows:

"(1) When deciding a constitutional matter within its power, a court -
a)	must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency; and
b)	may make any order that is just and equitable, including -

Because the order of the High Court declaring the section invalid as well as the confirmatory order of this Court were silent on the question of limiting the retrospective effect of the declaration, the declaration was retrospective to the moment the Constitution came into effect. That is when the inconsistency arose. As a matter of law the provision has been a nullity since that date.'

[33] It is on this basis that the Minister (while not conceding the factual correctness of the applicant's argument) now contends that he was in any event not obliged to have had regard to the structure plan (and its amendments) - and by implication, its factual consequences - when reaching his decision, nor would any purpose be served by effectively forcing him, by way of review, to have regard thereto.

"...an invalid administrative act may, notwithstanding its non-existence [in law], serve as the basis for another perfectly valid decision. Its factual existence, rather than its invalidity, is the cause of the subsequent act, but that act is valid since the legal existence of the first act is not a precondition for the second."

It follows that

"(t)here is no need to have any recourse to a concept of voidability or a presumption of effectiveness to explain what has happened [when legal effect is given to an invalid act]. The distinction between fact and law is enough."

The author concludes as follows:

[35] Having regard to the aforegoing I find myself unable to agree with the Minister. In my view, irrespective of the constitutional validity of the structure plan, the Minister was obliged to consider the factual consequences thereof as evidenced by the land usage surrounding the applicant's property. He did not do so because he had already formed the view that the structure plan amendments should not have been granted in the first place and he would for that reason disregard their factual consequences. In so doing he failed to consider a relevant consideration and his decision thus falls to be reviewed.

[36] I now turn to the issue relating to the Municipality's determination of the urban edge, the purpose of which is to restrict the outward growth of urban settlements until specified average growth densities are achieved.

[37] The Minister says that the property falls outside of the interim urban edge delineated by the PSDF which, as I understand it, is a provincial planning instrument. The PSDF document itself provides that:

[Emphasis supplied.]

[39]   According to the Municipality it had prepared its SDF during 2004/2005 before the
PSDF was approved in 2009. At the time the Municipality took all of the available provincial guidelines of the Provincial Government (including the Draft PSDF and the Draft Urban Edge Guidelines) into account as required by s 32 (2)(a)(ii) of the Systems Act and applied them through a process of proper local consultation to the unique circumstances of Plettenberg Bay and its surroundings. This resulted in the determination of an urban edge by consultants Visi-Africa which was approved (as part of the SDF approval) by the mayoral committee of the Municipality on 14 December 2005. On 12 April 2006 the Municipality thereafter determined a "wide" urban edge which resulted in the applicant's property falling within that edge. On 19 July 2006, as part of its IDP, and thereafter annually, the Municipality formally submitted the wide urban edge to the Minister, as required by the Systems Act.

[40] To date, almost 6 years later, the Municipality has not received any formal response thereto from the department. At no stage since the adoption of the SDF and submission thereof to the provincial government (initially on 19 July 2006 and thereafter annually as part of the IDP) has the Minister (or his predecessors) requested the Municipality to adjust the SDF as a component of the IDP to reflect a different urban edge for purposes of s 32(2) of the Systems Act which provides as follows:

(2) The MEC for local government in the province may, within 30 days of receiving a copy of an integrated development plan or an amendment to the plan, or within such reasonable longer period as may be approved by the Minister, request the relevant municipal council -
(a)       to adjust the plan or the amendment in accordance with the MEC's proposals, if the plan or amendment-

(b) to comply with the process referred to in section 29, or with a specific provision of this Act relating to the process of drafting or amending integrated development plans if the municipality has failed to comply with that process or provision, and to adjust the plan or the amendment if that becomes necessary after such compliance.'

[41] The Municipality says that as the Minister failed to act in accordance with s 32(2) there was no need for the implementation of ss 32(3), 32(4) or 33 of the Systems Act. The aforementioned sections provide that: (a) a municipal council must consider the Minister's proposals and respond within 30 days of request; and (b) if the Municipality disagrees with the Minister's proposals it must object and a specific procedure is to be followed in dealing with that objection.

[42] In addition and in the event of the Minister failing to act in accordance with s 32(2) the IDP adopted by the Municipality (in accordance with ss 35 and 36 of the Systems Act): (a) becomes the principal planning instrument which guides and informs all planning and development, and all decisions with regard to planning, management and development, in the Municipality; (b) binds the Municipality in the exercise of its executive authority save to the extent of any inconsistency with national or provincial legislation; and (c) obliges the Municipality to give effect thereto and conduct its affairs in a manner which is consistent therewith. The Municipality's urban edge is consequently a valid urban edge to which the Minister was obliged to have regard in assessing the ECA authorisation.

[45] To compound the confusion the minutes of the meeting of the Municipality of 12 April 2006, approving the wide urban edge, refer to the Visi-Africa urban edge but the map attached thereto reflects the wide urban edge.

[46] Irrespective of this however the Municipality did not comply with s 32(1 )(a) of the Systems Act which requires that the IDP must be submitted within 10 days of approval by the Municipality to the Minister. The IDP was only submitted about 3 months later (on 19 July 2006) and was addressed to the department and not the Minister. Accordingly the Minister was not obliged to have regard thereto when reaching his decision on the ECA authorisation.

[49]   I now turn to the impact of the proposed development on the natural environment.

[50] The applicant submits that the environmental basis for the decision of the Minister was insubstantial. Careful scrutiny of the papers appears to support this.

The Minister's intrusion into a municipal competence

[55] The applicant argues that in any event, if regard is had to the reasons furnished by the Minister for his decision, it is clear that they addressed quintessential^ municipal planning issues and that he failed to appreciate that the powers conferred upon him by the ECA did not entitle him to abrogate to himself municipal planning powers.

[57] What is in issue is whether the Minister could permissibly take into account municipal planning considerations (or, put differently, the spatial context of the applicant's land) in reaching his decision.

[59] At paras 90 to 93 Rogers AJ dealt with the considerations mandated by the applicable legislation. He found that the PPA imposes no restrictions on the matters which the relevant authority may take into account in formulating a structure plan provided that the considerations are directed at the orderly physical development of the area for the benefit of all of its inhabitants. At para 94 he said:

[60] At para 100, and dealing with the practical implications of the applicant's argument that the Minister could not take municipal planning considerations into account, Rogers AJ said:

[63] On 16 August 2011 the Minister brought an application to strike out the affidavit deposed to by Mr Gericke of the Municipality, which had been delivered by the Municipality on 20 June 2011.

[64] Dlodlo J dismissed the application on 22 September 2011 on the basis that the Minister had been unable to indicate that he had suffered any prejudice as a result of the delivery of that affidavit. The Minister was however given the opportunity to deliver a supplementary answering affidavit to answer the allegations contained in the Municipality's affidavit.

[65] On 9 November 2011 the Minister launched a further application, this time to strike out paragraphs 142 to 148 of the applicant's replying affidavit on the basis that the allegations contained therein constituted a new ground of review which the applicant impermissibly sought to advance in reply. In the alternative the Minister sought leave to file certain supplementary answering affidavits.

[66] The paragraphs complained of deal with what the applicant perceives to be the Minister's inability to have come to an independent decision given the close prior involvement of various departmental officials in the matter on whose advice the Minister clearly relied. Three reasons were advanced by the applicant for why a formal independent review should have been undertaken before any decision was made by the Minister in respect of the appeal. I will deal with them below.

[67] The Minister relies on the trite principle that all of the essential averments must appear in an applicant's founding affidavit to enable a respondent to know what case he has to meet unless the court, in the exercise of its discretion to cater for special or exceptional circumstances, permits the new matter to remain and affords the respondent the opportunity to deal therewith.

[68] The Minister says that there are no special or exceptional circumstances which should cause me to exercise my discretion in favour of the applicant. On the contrary, the applicant had two opportunities to make out its case. First, in its founding papers and second, under rule 53(4) of the uniform rules of court pursuant to the delivery by the Minister of the record of the ECA authorisation proceedings to the registrar. The applicant did not avail itself of those opportunities.

[69] The applicant on the other hand contends that the issues raised in the paragraphs complained of go hand in hand with reservations already expressed in its founding affidavit in the face of telling comments made by the department's Mr Rabie at the meeting of 7 August 2009 to which I have already referred. The applicant also argues that in any event the Minister has again failed to indicate any prejudice suffered as a result of the offending paragraphs. On delivery of the replying affidavit on 13 May 2011 the Minister was expressly invited to answer thereto. He did not avail himself of this opportunity but rather delivered the application to strike out two weeks before the matter was originally due to be heard (on 1 December 2011) accompanied by an affidavit answering to the applicant's allegations as a fall-back position.

[70] While the applicant may be criticised for failing to avail itself of the provisions of rule 53(4) regarding certain allegations made by it in reply, I am of the view that the provisions of that rule would not have assisted the applicant in various material respects having regard to the content of the Minister's answering affidavit. The attitude expressed by the Minister therein concerning the decision of Mr Uys (his predecessor) to approve the structure plan amendment was made known to the applicant for the first time in that affidavit; so too was the extent of the reliance placed by the Minister on the report of the departmental official who previously recommended to Mr Uys that the applicant's application for the structure plan amendment should be refused.
[71] Further, both parties have now had the opportunity of setting out the facts that they regard as relevant in respect of the issues raised in the offending paragraphs. The Minister knows the case that he is required to meet and he has dealt with it by way of affidavit. In the circumstances I exercise my discretion in favour of the applicant in the interests of fully ventilating the disputes between the parties. It follows that I will also have regard to the supplementary affidavits filed by the Minister in relation to the paragraphs complained of.

[75] I return to the three considerations which the applicant claims existed at the time when the Minister made his decision which dictated that a formal independent review should have been undertaken prior to such decision.

[76] First, the department's director was the official directly responsible for the preparation and submission of the report dated 13 March 2009 regarding the applicant's proposed structure plan amendment and recommended therein that it be refused. As we know that recommendation was not accepted by the then Minister, Mr Uys. On 30 November 2009 (some 8 months later), the same official effectively had a second bite at the cherry when he, as a delegated authority and in the context of a different application, had to consider the applicant's ECA authorisation. That application was refused. It is the applicant's perception that it is unlikely in these circumstances that the director, irrespective of how professional or competent he may be, could have been completely objective, and that his decision to refuse the ECA authorisation would to some extent have been influenced by his previous opinion and recommendation regarding the same development project, albeit in the context of a different application.

[79] Although not apparent from the reports themselves, the Minister says that the official who took the first-instance decision refusing the ECA authorisation (Mr Mohamed) happened to be one of the officials in the chain who had considered and approved the department's memorandum to Mr Uys concerning the earlier application by the applicant for the amendment of the structure plan. According to the Minister, this did not disqualify Mr Mohamed, nor did it have the result that he failed to consider the application for the environmental authorisation on its merits. In any event, his decision was susceptible to an appeal to the Minister.

[80] The Minister also says that the official who prepared the departmental memorandum on the appeal against Mr Mohamed's refusal of the ECA authorisation, namely Mr Atwaru, happened to be one of the officials in the chain who had considered and approved the draft record of decision prepared for consideration by Mr Mohamed prior to the latter's decision on the ECA authorisation. There is nothing wrong with departmental officials commenting on the appeal with a view to assisting the Minister in reaching a decision thereon, as long as the final decision is taken by the Minister himself, which it was.

[81] Further, according to the Minister, the relevant officials are capable of considering applications of this sort objectively and on their own merits. An independent review which the applicant contends was necessary is an exceptional step which is called for where there is a controversy about an environmental impact assessment or specialist report submitted in connection with an application. It was not considered necessary by the Minister in this case.

[82] In my view, the Minister's contentions do not address the central question which requires to be answered, namely whether in the particular circumstances of this matter the applicant's suspicion of bias is reasonably apprehended.

[83] It is at this stage of the enquiry that the third reason advanced by the applicant is of particular relevance. This is that the Minister himself - on his own version in his answering affidavit - had independently decided that he did not agree with the decision of his predecessor, Mr Uys, to approve the structure plan amendment. He said:

“

[Emphasis supplied.]

The appointment of external reviewers

Costs

[86] Both parties employed the services of two counsel. As the applicant has been substantially successful in the relief sought there is no reason why it should not be entitled to its costs.

[87]   In the result I make the following order:

2. The first respondent shall effect payment of the costs of this application and the costs of the application to strike out, including the costs of two counsel.

 J I CLOETE