JDJ Properties CC and Another v Umngeni Local Municipality and Another

The second respondent (Triumph Brokers) purchased erf 848 in Howick from the first respondent (Umngeni Municipality) to develop a commercial shopping complex. The first respondent relaxed parking requirements (allowing payment to a parking fund instead of providing 82 parking bays) and relaxed the side space requirement (allowing the building to abut the neighbouring property). The first respondent then approved Triumph Brokers' building plans in June 2010. The appellants - JDJ Properties CC (owner of two properties across the road) and Double Diamond CC (lessee operating a retail business from those properties) - challenged the approval of the building plans, arguing that the relaxations were unlawfully granted. The General Manager: Planning and Development Services (Simpson) had relaxed the side space requirement without requiring an application for special consent as required by the Howick Town Planning Scheme. The appellants sought review and setting aside of the relaxation decisions and the approval of the building plans.

• Whether the decision to approve building plans constitutes administrative action as defined in s 1 of the Promotion of Administrative Justice Act (PAJA)
• Whether the appellants have standing as nearby landowner and lessee to review the decisions
• Whether internal appeal remedies existed under s 62 of the Local Government: Municipal Systems Act or s 9 of the National Building Regulations and Building Standards Act that had to be exhausted before approaching the court
• Whether the relaxation of the side space requirement was lawfully granted without special consent
• Whether the approval of the building plans was valid given the allegedly unlawful relaxations

By majority, the appeal was upheld with costs. The decision to relax the side space requirement was set aside. The decision to approve the building plans was set aside. The respondents were ordered to pay the applicants' costs jointly and severally, including costs of the application for interim relief.

The binding legal principles established are: (1) Decisions by municipalities to approve building plans constitute administrative action under PAJA as they exercise public power with the capacity to affect legal rights and have direct impact on persons in the area. (2) Owners and lessees of property in the immediate vicinity of a development, within the same use zone, have standing to enforce compliance with town planning schemes as they fall within the class of persons in whose interest the scheme operates. (3) Town planning schemes are hybrid legislative instruments (created by municipal resolution and provincial proclamation) distinct from regulations and by-laws, and therefore not subject to internal appeals under s 9 of the National Building Regulations and Building Standards Act. (4) Where a town planning scheme requires special consent for relaxation of requirements (such as side space), the procedures for obtaining such consent are mandatory and must be complied with. (5) Under s 7(1)(a) of the Building Regulations Act, a municipality must be positively satisfied that building plans comply with all applicable law (including town planning schemes) before approval can be granted; absence of such satisfaction renders approval invalid.

Plasket AJA observed that even if the decision were not administrative action under PAJA, it would be reviewable under the principle of legality and rationality sourced in s 1(c) of the Constitution, and the gateway to review would make no difference to the result where the attack is based on lack of authority and irrationality. The judge also questioned the wisdom of a democratically elected municipal council delegating vast powers to a single unelected official, though did not decide on the validity of such delegation. Heher JA (dissenting) observed that if only the owner of the adjoining property has a direct interest in the side space provision, the council's failure to follow special consent procedures may not have been unlawful since the adjoining owner had consented. Theron JA (dissenting) noted that the abandonment of relief seeking demolition raised questions about the purpose of the appeal and might have rendered it academic, and that it would be unjust to grant relief against decisions already acted upon by a party acting lawfully within its perceived rights.

This case is significant for clarifying: (1) that approval of building plans by municipalities constitutes administrative action reviewable under PAJA; (2) the broad approach to standing for owners and lessees in the vicinity of developments to enforce town planning schemes; (3) that town planning schemes are distinct legislative instruments (neither regulations nor by-laws) not subject to the internal appeal in s 9 of the Building Regulations Act; (4) the mandatory nature of special consent procedures in town planning schemes; and (5) the requirement that municipalities must be positively satisfied of compliance with all applicable law (including town planning schemes) before approving building plans. The case emphasizes purposive interpretation of PAJA consistent with the constitutional right to just administrative action in s 33.