City of Cape Town v Helderberg Park Development (Pty) Ltd

Helderberg Park Development (Pty) Ltd, as successor in title to a developer, owned land in Strand, Western Cape. Its predecessor applied for rezoning and subdivision under the Land Use Planning Ordinance 15 of 1985 (LUPO). The local authority approved the rezoning subject to a condition requiring the cession, free of charge, of a 32‑metre-wide road reserve (Broadway extension). The developer proceeded with the subdivision, complied with the condition, and upon confirmation of the subdivision ownership of the road reserve vested in the City of Cape Town in terms of s 28 of LUPO. The developer did not appeal internally under s 44 of LUPO nor successfully review the condition, although it later withdrew a review application. It then sued the City for compensation, alleging that the width of the road exceeded the ‘normal need’ arising from the subdivision and that s 28 of LUPO (and alternatively s 25 of the Constitution) entitled it to compensation.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order upholding the City’s first special plea and dismissing the action with costs.

The case is important for clarifying that s 28 of LUPO does not itself create a freestanding right to compensation and that compensation claims cannot be used as a substitute for appealing or reviewing unlawful administrative decisions. It reinforces the principle that administrative acts are binding until set aside and that parties cannot accept the benefits of an unlawful decision while avoiding its burdens. The judgment aligns town‑planning law with broader administrative‑law principles developed in cases such as Knop, Oudekraal, and Steenkamp.