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

Arun Property Development (Pty) Ltd acquired land in Durbanville, Western Cape, for a large residential township development. Approval for rezoning and subdivision under the Land Use Planning Ordinance 15 of 1985 (LUPO) required Arun to make provision on its subdivision plans for higher-order public roads envisaged in a provincial structure plan. Portions of the land reserved for these roads exceeded the normal needs of the residential development and were intended to serve the broader regional road network. Ownership of these road portions vested in the City of Cape Town by operation of section 28 of LUPO. Arun claimed compensation for this ‘excess land’, arguing that it was not required by the normal needs of the subdivision. The High Court upheld Arun’s claim, the Supreme Court of Appeal reversed that decision, and Arun appealed to the Constitutional Court.

The appeal was upheld. The order of the Supreme Court of Appeal was set aside and the High Court’s order reinstated with amendments. The excess land vested in the City of Cape Town in terms of section 28 of LUPO, Arun Property Development (Pty) Ltd was entitled to compensation for that land, compensation was to be calculated under the Expropriation Act 63 of 1975, and the City was ordered to pay Arun’s costs in all courts.

This judgment is a leading authority on the interpretation of section 28 of LUPO and clarifies the constitutional limits of land vesting in the land-use planning context. It affirms that municipalities may not acquire land free of compensation where it exceeds the normal needs of a development, reinforcing constitutional property protections under section 25. The case has enduring importance for land-use planning, developer contributions, and the distinction between deprivation and expropriation in South African law.