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Minister of Local Government, Environmental Affairs and Development Planning of the Western Cape v Lagoonbay Lifestyle Estates (Pty) Ltd and others

20 November 2013

Constitutional Court

Case number citation: (CCT 41/13) [2013] ZACC 39 (20 November 2013)

Date of judgment: 20 November 2013

Judges: Mhlantla AJ (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Nkabinde J, Skweyiya J, Van Der Westhuizen J and Zondo J concurring)

Type of application: Review application and declarator

Legislation considered: Land Use Planning Ordinance, 1985

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Media summary:

Today the Constitutional Court handed down judgment in a matter regarding municipal and provincial responsibilities in relation to land-use approvals.

Lagoonbay Lifestyle Estate (Pty) Ltd (Lagoonbay) applied to the George Municipality and to the Minister of Local Government, Environmental Affairs and Development Planning, Western Cape Provincial Government (Provincial Minister) for certain land-use approvals in order to undertake a large-scale property development in the Southern Cape. Acting in terms of its powers under the Cape Land Use Planning Ordinance (LUPO), the George Municipal Council granted Lagoonbay approval for the subdivision and rezoning of the land. It then referred the approvals to the Provincial Minister for further authorisation. The Provincial Minister refused both applications.

Lagoonbay challenged the Provincial Minister’s refusals in the Western Cape High Court, Cape Town (High Court). It argued that the Provincial Minister did not have the power to involve himself in rezoning and subdivision decisions, and that, in any event, the refusals failed to meet the standard for just administrative action prescribed by the Promotion of Administrative Justice Act (PAJA). The High Court dismissed Lagoonbay’s arguments, reasoning that the scale of land use contemplated by the intended development had such significant effects on the surrounding region that any approval implicated not only municipal planning functions, but also regional and provincial planning as contemplated in Schedules 4 and 5 of the Constitution. The High Court dismissed the PAJA challenges.

On appeal, the Supreme Court of Appeal overturned the High Court’s decision and held that, the Constitution precluded the Provincial Minister from making rezoning decisions. The Court concluded that the approval by the Municipal Council was the final authorisation required by Lagoonbay.

In a unanimous judgment authored by Mhlantla AJ, the Constitutional Court held that, under LUPO, the Municipality was not the competent authority to decide the rezoning application. While the Municipality was the competent authority to decide the subdivision application, it could only do so after the necessary rezoning approvals had been granted. The Constitutional Court did not decide the issue of whether the Constitution conferred the competence to decide on the rezoning and subdivision of land to provincial or municipal authorities. This was because the issue was not properly pleaded in this Court. Finally, the Court dismissed the challenges brought in terms of PAJA, finding that the Provincial Minister had a broad discretion to grant or refuse Lagoonbay’s applications on the basis of their “desirability”. Accordingly, the Constitutional Court dismissed the challenge to the Provincial Minister’s rezoning decision and remitted Lagoonbay’s subdivision application to the Municipality for reconsideration.

Supreme Court of Appeal

Case Number/Citation: 320/12 [2013] ZASCA 13

Date of Judgement: 15 March 2013


Type of Application: Appeal

Legislation Considered: Land Use and Planning Ordinance 15 of 1985 (LUPO), Environment Conservation Act 73 of 1989 (ECA) and the National Environmental Management Act 107 of 1998 (NEMA)

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Media summary:

Today the Supreme Court of Appeal (SCA) upheld an appeal by Lagoonbay Lifestyle Estate (Pty) Ltd (Lagoonbay), the proposed developer of a rather ambitious development project in George. The development envisages a gated community spanning some 655 hectares, which will consist, inter alia, of two golf courses, single residential houses, fractional title lodges, a wellness centre, spa and clubhouse precinct, a commercial centre, conference centre and private nature reserve. R5 billion is the projected cost of the development. Given its vast scale, Lagoonbay required approval for the project in four different phases – two of which, namely, an amendment to the George and Environs Structure Plan and a rezoning and subdivision application were relevant for the purposes of the appeal. When Lagoonbay’s application for the amendment of the structure plan came before the then Minister for Local Government, Environmental Affairs and Development Planning of the Western Cape (the Minister), she provisionally approved the application. In doing so she made it a condition of her approval that Lagoonbay’s future zoning application shall be subject to approval by provincial government. Thereafter Lagoonbay’s rezoning and subdivision application was approved by the George Municipality. But, acting in accordance with the condition imposed by the Minister, the Municipality then forwarded the application to the present Minister, who refused to approve it. Aggrieved by that refusal, Lagoonbay applied to the Western Cape High Court for various declaratory orders. It cited the Minister as the first respondent, the George Municipality as the second and the Cape Windlass Environmental Action Group, an environmental organisation committed to the protection of the environmental integrity of the Garden Route (or Cape Windlass as it is known), as the third. The George Municipality took no part in the proceedings. The high court dismissed Lagoonbay’s application with costs, but granted leave to it to appeal to the SCA.
In upholding the appeal, the SCA held that the rezoning application was a matter for the George Municipality, not provincial government. Thus, according to the SCA, the Minister had usurped for herself and her departmental officials a power that had been reserved for the Municipality when she made her approval of Lagoonbay’s application for the amendment of the structure plan conditional upon the provincial government’s approval of the zoning application. As such, the decision by the
Minister to refuse the amendment of the rezoning and subdivision application could not stand and it accordingly fell to be set aside. The SCA confirmed that the George Municipality was the competent authority to consider and determine Lagoonbay’s application for rezoning and subdivision in respect ofthe proposed development and its decision to approve that application was accordingly confirmed. The SCA further held that as Lagoonbay’s application for the amendment of structure plan had not
been approved by the Minister it had to be remitted to him for reconsideration. It accordingly upheld the appeal and ordered the Minister and the Cape Windlass Environmental Action Group to pay Lagoonbay’s costs.

Western Cape High Court

Case number or citation: 10751/2011
Date of judgement: 18 and 19 August 2011
Judge: Griesel J
Type of application: Declarator
Legislation considered: Land Use Planning Ordinance, 1985 and Development Facilitation Act, 1995

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