In May 2023, a full bench of the Western Cape High Court found in favour of a developer, Cape Estate Properties (‘the Appellant’), in its appeal against a decision of the George Local Municipality concerning the determination of the zoning of its sawmill operation on the eastern border of the city. In the context of land use planning, the judgment holds particular significance for developers.
In March 2001, following a meeting between the Appellant’s predecessor and DELplan Town and Regional Planners (‘DELplan’) about the subdivision of the site of the sawmill from the remainder of Kraaibosch 195/1, which was under pine plantations, DELplan applied for a zoning certificate to determine the zoning of the property as ‘Industrial Zone I’ in terms of section 14(1) of the Land Use Planning Ordinance (‘LUPO’). In May 2001, the Municipality issued a report confirming that the application be granted, subject to the conditions that the applicant submit a site plan and that the remainder of the property be zoned as ‘Agricultural Zone I’ (‘RA5’).
In January 2002, the subdivision of Kraaibosch 195/1 was also approved. The site of the sawmill – proposed portion A measuring 17.3 ha in extent – was confirmed as being zoned as ‘Industrial Zone I’ pursuant to the industrial activities on the property. In 2008, following the N2 reserve road alignment, the property was subsequently reduced to approximately 11 ha, which is known as Erf X.
In August 2017, the George Municipal Council implemented a new zoning scheme map which split zoned the extent of Erf X into two categories, that is ‘Industrial Zone II’ (measuring 4.1 ha) and ‘Agricultural Zone I’ (measuring 7.1 ha). Naturally, the developer contested the nature and extent of the zoning allocated to Erf X and applied to the Municipality to rectify what it argued was a clerical error on the new zoning map. The Municipality refused and directed the Appellant to submit a new land use application.
After exhausting all internal avenues, the Appellant approached the courts for relief. Finding that the 2017 split zoning was not an error, a single judge of the Western Cape High Court dismissed the application for review and refused leave to appeal the judgment. Thereafter, the Appellant successfully approached the Supreme Court of Appeal for leave to appeal.
On appeal, the Municipality denied that the split zoning of Erf X was an error by arguing that RA5, which determined the zoning of Kraaibosch 195/1 as ‘Industrial Zone I’, was simply a recommendation by the Planning Committee to Council, being the decision-making authority. Instead, it averred that the Council’s decision is reflected in a Municipal Manager’s letter to DELplan in 2001, which stipulated that only the existing sawmill be zoned Industrial Zone I (‘RA6’).
The court vehemently rejected this view. Assessing all evidence, it held that RA5 was a resolution taken by the Planning Committee meeting, and thus clearly constituted the decision of the Council. Accordingly, the Municipality was attempting to escape the consequences of its 2001 decision by relying on a technicality. On this basis, the court concluded that Erf X was improperly split zoned.
In light of the above, the court considered whether the Municipality had the power to limit the industrial use of Erf X to sawmill activities only when it determined zoning in 2001. Reiterating that RA5 constituted Council’s decision, the court held that the power to determine zoning under section 14 of LUPO is a ‘quintessential function’ of Council and not an administrator. Hence, the municipal manager could only notify DELplan of Council’s decision but lacked the authority to restrict the industrial activities conducted on the property. For that reason, the court agreed with the Appellant that the restriction contained in RA6 was a clerical error. Erf X was thus entirely zoned as industrial by Council, which is further supported by the approved subdivision plan.
Noting that the objective of section 14(1) of LUPO is to establish the purpose and manner of factual land use, the court remarked that the Municipality disregarded clear evidence which established that the property had been utilised for industrial purposes since 1943. In this respect, it acted arbitrarily and capriciously in relying on irrelevant evidence which lead to its refusal to rectify the split zoning of Erf X. As such, the court set aside the decision of the Appeal Authority of the George Local Municipality, and declared that the entire extent of Erf X is zoned ‘Industrial Zone II’, and which zoning is not restricted to the use of the property for sawmill activities only.
With the conclusion of this protracted legal battle, the Municipality’s refusal to rectify the error resulted in a substantial costs order of approximately R6 million – an expense ultimately borne by ratepayers.
