Trustees of the Simcha Trust v Da Cruz and Others; City of Cape Town v Da Cruz and Others

The Trustees of the Simcha Trust owned erf 5284 on Buitenkant Street, Cape Town. The adjacent property, Four Seasons (a sectional title scheme), constructed a 17-storey building with balconies abutting the boundary of the Trust's property from 2005 to 2007. In October 2007, the Trust submitted a development application to build four additional stories to its existing four-storey building, up to the boundary. The City of Cape Town (Municipality) approved this in September 2008, but the approval was later set aside by agreement in August 2013 on the basis it was improperly granted. In June 2014, the Trust submitted new plans, which were approved by the Municipality's head of the Building Development Management Section, Mr Henshall-Howard, on the same day as the building control officer's recommendation. Mr Da Cruz and Four Seasons sought judicial review under PAJA. Binns-Ward J set aside the approval, finding that the decision maker misunderstood the requirements of section 7(1) of the National Building Regulations and Building Standards Act and failed to consider whether the disqualifying factors in that section were triggered from the perspective of neighboring properties. The Trust and Municipality appealed to the Full Court, which dismissed the appeal on the basis that the decision makers applied an incorrect test when considering the disqualifying factors, incorrectly assumed compliance with zoning regulations precluded refusal on disqualifying grounds, and failed to take the impact on neighboring properties into account.

• What is the proper test for establishing the disqualifying factors in section 7(1)(b)(ii)(aa)(aaa)-(ccc) of the National Building Regulations and Building Standards Act?
• Does the legitimate expectations test applied in the context of derogation in value also apply to the other disqualifying factors (disfigurement of area, unsightliness, and objectionability)?
• Did the decision makers apply the correct legal test when determining whether to approve the Trust's building application?
• Whether the decision makers correctly interpreted the relationship between compliance with zoning regulations and the disqualifying factors in section 7(1) of the Act?

In both CCT 125/18 and CCT 128/18: (1) Leave to appeal granted; (2) The application for condonation granted (in CCT 128/18); (3) Appeals dismissed; (4) The applicants (the Trust in CCT 125/18 and the Municipality in CCT 128/18) must pay the costs of the respondents in the Constitutional Court, including where applicable the costs of two counsel.

The legitimate expectations test applies to all disqualifying factors in section 7(1)(b)(ii)(aa)(aaa)-(ccc) of the National Building Regulations and Building Standards Act, not only to the derogation in value factor. When exercising discretion under section 7(1)(b)(ii)(aa), decision makers must be positively satisfied that the proposed building will not be so disfiguring of the area, objectionable or unsightly that it would exceed the legitimate expectations of a hypothetical owner of a neighboring property. This is an objective factual inquiry based on relevant facts available to the decision maker. The test infuses the exercise of discretionary power with the constitutionally mandated requirements of reasonableness, lawfulness and procedural fairness, informed by the contextual approach required by the Act. The disqualifying factors must be considered separately from compliance with other requirements of the Act, including zoning regulations. Decision makers must consider the impact of proposed developments on surrounding areas and particularly on neighbors, as local authorities are caretakers of the community interest in relation to building applications.

The Court clarified that the legitimate expectations test as used in Camps Bay differs from the concept of legitimate expectation in administrative law. In the building regulations context, it does not refer to an independent procedural right to be heard, but rather to an objective factual inquiry into what a hypothetical purchaser of neighboring property would expect. The Court noted that the phrase "neighboring property" in the context of the disqualifying factors should be used flexibly and its scope will vary depending on all circumstances of the case. The Court emphasized that the test does not impose additional consultation duties on municipalities beyond existing legal requirements, and is not subjective or based on the whims of sensitive neighbors. The Court declined to make findings on the remaining grounds of appeal as it was unnecessary to do so, having found the appeal must fail because the decision makers applied the wrong test. The Court noted that the purpose of the Act, as established in Odendaal and affirmed in Walele, is to ensure harmonious, safe and efficient development of urban areas.

This judgment clarifies the proper interpretation and application of the disqualifying factors in section 7(1)(b)(ii)(aa) of the National Building Regulations and Building Standards Act. It establishes that the legitimate expectations test, previously applied only in the context of derogation in value, applies to all disqualifying factors including disfigurement of an area and whether a building is unsightly or objectionable. The decision is significant because it provides local authorities with clear guidance on how to exercise their discretion when considering building applications, requiring them to consider the impact on neighboring properties from the perspective of a hypothetical neighbor. The judgment reinforces the constitutional requirements of lawful, reasonable and procedurally fair administrative action in the context of building approvals. It balances the property rights of landowners with the rights of owners of neighboring properties and the broader community interest in harmonious urban development. The case also clarifies that compliance with zoning regulations does not automatically mean approval must be granted—the disqualifying factors must be considered separately.