City of Cape Town v Arun Property Developments (Pty) Ltd

Arun Property Developments (Pty) Ltd owned land in Durbanville intended for township development. In applying for subdivision approval under the Land Use Planning Ordinance 15 of 1985 (LUPO), the approved plans made provision for public streets and road reserves in accordance with existing structure and transport plans. Upon confirmation of the subdivision, ownership of the land designated as public streets vested in the City of Cape Town in terms of s 28 of LUPO. Arun contended that portions of these streets were in excess of the normal needs arising from the subdivision and claimed compensation for the so-called excess land. The Western Cape High Court held that such excess land vested in the City and that Arun was entitled to compensation calculated under the Expropriation Act 63 of 1975. The City appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order declaring that Arun Property Developments (Pty) Ltd is not entitled to compensation in terms of s 28 of LUPO and directing Arun to pay the City of Cape Town’s costs.

This case confirms and reinforces the Supreme Court of Appeal’s interpretation of s 28 of LUPO as not creating a right to compensation and not constituting expropriation. It underscores that vesting of public streets upon subdivision approval is a regulatory consequence of land-use planning, not a compensable deprivation of property. The judgment also strongly affirms the doctrine of precedent and the obligation of lower courts to follow binding decisions of higher courts, contributing to legal certainty in South African land-use and administrative law.