THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case No: 55/11
Reportable
In the matter between:

CITY OF JOHANNESBURG

First Appellant
CITY MANAGER OF THE CITY OF JOHANNESBURG
Second Appellant

and

AD OUTPOST (PTY) LTD

Respondent

Neutral citation:
City of Johannesburg v Ad Outpost (55/11) [2012] ZASCA 40
(29 March 2012)

Coram:
Farlam, Van Heerden, Mhlantla and Leach JJA and Ndita AJA
Heard:
27 February 2012
Delivered:
29 March 2012
Summary:
Applicant applying under by-laws for permission to advertise alongside
highways ─ application wrongly refused but by-laws repealed and fresh by-laws
promulgated ─ application to be reconsidered under new by-laws

___________________________________________________________________
O R D E R
___________________________________________________________________

On appeal from:
South Gauteng High Court, Johannesburg (Matlapeng AJ  sitting
as court of first instance):
1.
The appeal succeeds with costs, such costs to include the costs of two
counsel.
2.
The order of the high court is set aside and is substituted with the following:
‘(a)
The decisions taken by the first respondent, the City of Johannesburg, on 29
August 2007, to refuse the applicant’s applications for approval of the two outdoor
advertising billboards known as the Sandown billboard and the Kelvin View billboard,
as well as the decisions by the third respondent, the city manager, to dismiss the
applicant’s appeals against the aforementioned decisions of the first respondent, are
reviewed and set aside.
(b)
The applicant is to pay the respondents’ costs, such costs to include the costs
of two counsel.’
___________________________________________________________________

J U D G M E N T
___________________________________________________________________

LEACH JA (FARLAM, VAN HEERDEN AND MHLANTLA JJA AND NDITA AJA
concurring)

[1] As its name suggests, the respondent, Ad Outpost (Pty) Limited, is a
company carrying on business in the advertising industry. At the heart of the present
dispute are two billboards situated alongside roadways in Gauteng which the
respondent has used in the course of its business for more than ten years.  As is
more fully set out below, the original authority which the respondent was granted in
2001 lapsed in the fullness of time, and led to the respondent applying to the City of
Johannesburg (the first appellant) for a renewal of permission to use the billboards
for a further five years. Its application was refused and an appeal to the City

Manager (the second appellant, but the third respondent in the high court) brought
under the relevant by-law, was similarly dismissed.

[2] Disenchanted by this, the respondent proceeded to apply to the South
Gauteng High Court for an order reviewing and setting aside the decisions of both
appellants and seeking, in their stead, the court’s authority to use the billboards in
question for a period of five years. The high court granted relief in those terms, its
permission being antedated to 29 August 2007, being the date when the first
appellant had refused permission. With leave of the high court, the appellants now
appeal against that order

[3] The billboards in question, referred to in the papers as the ‘Sandown billboard’
and the ‘Kelvin View billboard’, are both situated in the immediate vicinity of major
public motorways in greater Johannesburg. The Sandown billboard is a 7.5m x 5m
single-sided billboard located near an overhead traffic sign on Grayston Drive which
gives warning of a nearby off-ramp leading to Katherine Street. The Kelvin View
billboard, a 4.5m x 18m double-sided billboard with an overall height of 17m, is
situated to the east of the M1 South Highway, near what is known as the Marlboro
off-ramp. In 2001 the respondent applied for the necessary approval to use both
billboards under the relevant by-laws in force at the time 1  (which I intend for
convenience merely to refer to as ‘the 1999 by-laws’), clause 39(3)(d) of which
provided that:
‘Billboards will not be permitted within specified distances of on and off-ramps of motorways
and overhead traffic directional signs – see Figure 2 . . . except where a curve in the road
renders the billboard not to interfere with a clear and undistracted view of the directional
traffic sign.’

[4] Figure 2 referred to in this section contained a diagrammatic illustration of
both an off-ramp and an on-ramp and the situation of a so-called ‘prohibited area’
immediately adjacent thereto, as well as an illustration of a prohibited area adjacent
to an overhead traffic sign. It is common cause that the two billboards in question
stand within prohibited areas as so determined and in which billboards were not to

1 The Eastern Metropolitan Local Council Advertising Signs And Hoardings By-Laws 1999.

be permitted, subject of course to the exception envisaged by clause 39(3)(d). From
the photographs of the billboards in question included in the papers, they appear
unlikely to interfere with a clear and undistracted view of any directional traffic signs
and, presumably due to this, the respondent’s applications were granted: on 4 May
2001 in regard to the Sandown billboard and on 22 August 2001 in regard to the
Kelvin View billboard.

[5]    In both instances the approval was granted for a period of three years with
further approval to be renegotiated three months prior to expiry of that period. No
extension was ever negotiated and the authority to use the billboards therefore
lapsed in 2004. This notwithstanding, the respondent continued to use both
billboards without objection from the appellants until 13 November 2006 when the
first appellant eventually wrote to the respondent about the Kelvin View billboard. It
drew attention to the lapse of the original authority and stated that, as the billboard
lacked the necessary approval, it  should be removed within 21 days – although it
went on to advise that if the respondent wished to ‘legalise’ the billboard it should
submit a new application for consideration. Subsequently, on 29 November 2006,
the first appellant addressed a letter in similar terms to the respondent in regard to
the Sandown billboard. Consequently, in March 2007, the respondent applied to the
first appellant for permission to use the billboards for advertising purposes for a
period of five years. The application for each application was marked as being an
application for a ‘renewal’ and indicated that the billboard was ‘existing’. I shall refer
to them as the ‘renewal applications’.

[6] By this time, the 1999 by-laws had been repealed and replaced by the
Advertising Signs And Hoardings By-laws2 which came into effect on 1 December
2001 (‘the 2001 by-laws’). Similar to clause 39(3)(d) of the 1999 by-laws, but
couched in more permissive terms, clause 24(6)(d) of the 2001 by-laws contained
the following safety condition :
‘Prohibited areas on motorways –

2 Published in GN 7170 of 2001 in Gauteng Provincial Gazette Extraordinary 234 of 28 November
2001.

Billboards may be permitted within specified distances of on- and off-ramps of motorways
and overhead traffic directional signs where a curve in the road renders the billboard not to
interfere with a clear and undistracted view of the directional traffic sign.’

[7] Of course, this implies that billboards would not be permitted within specified
distances of ramps and signs if they interfered with a ‘clear and undistracted’ view of
the directional traffic signs. But despite the reference to ‘specified distances’ in the
clause set out above, there appears to have been a lacuna in the by-laws as, in
contradistinction to those of 1999, they neither prescribed any such specified
distances nor defined any prohibited areas – and in this regard there was no diagram
similar to figure 2 of the 1999 by-laws defining prohibited areas at on and off-ramps
and near overhead signs. However the first appellant still enjoyed a discretion to
approve the use of the billboards for advertising3 and, in considering whether to do
so, was enjoined to take into account, inter-alia, whether a billboard ‘will in any way
impair the visibility of any road traffic sign or affect the safety of motorists or
pedestrians’.4

[8] After having lodged its renewal applications in March 2007, correspondence
passed between the respondent and the first appellant which culminated in the first
appellant writing to the respondent on 3 September 2007, informing it that both
applications had been refused. The reason given for the decision in each case was
that under ‘the safety standards set by the Johannesburg Roads Agency in terms of
clause 24(6)(d) of the [2001 by-laws], signs should be at least 200m away from an
overhead traffic sign.’

[9] Aggrieved by this the respondent, relying on a provision in the 2001 by-laws,
appealed to the second appellant contending, in particular, that the by-laws neither
contained a 200m prohibition nor empowered the Johannesburg Roads Agency to
prescribe conditions for the approval of billboards. However, on 31 March 2008, the
respondent received a letter5 from the second appellant dismissing the appeals on
the ground that:

3 Clause 2(7) as read with clause 41 of the 2001 by-laws.
4 Clause 2(6)(a)(vi) of the 2001 by-laws.
5 Dated 21 January 2008.

‘The Johannesburg Roads Agency as the custodians of road traffic safety in Johannesburg
has determined certain areas close to overhead traffic signs as restricted areas for the
purposes of traffic safety. No advertising signs are permitted within such restricted areas.
Your proposed application is within such restricted area. See also section 24(6)(d) of the
said by-laws. This traffic safety precaution has been consistently applied by the City.’

[10] Unhappy that the second appellant had also taken into account
considerations which it felt were irrelevant and improper, the respondent applied to
the high court to review and set aside the decisions of both the first and second
appellants. As both those decisions had been predicated upon an erroneous view
that the billboards in question were located in ‘prohibited areas’ as envisaged by the
2001 by-laws and that there was an absolute prohibition which precluded any
discretion to grant permission for advertising signs in those areas, the appellants
correctly conceded in their answering affidavits that their decisions had not been
validly taken. But by the time the review was launched in September 2008, the 2001
by-laws had been repealed and replaced by the Outdoor Advertising By-laws6 which
came into operation on 1 July 2008 (‘the 2008 by-laws’). These once more
prescribed prohibited areas at on and off-ramps and overhead traffic signs, and re-
introduced a diagrammatic illustration thereof in schedule 2. This was essentially the
same as figure 2 in the 1999 by-laws.  As the respondent’s billboards are situated
within prohibited areas as so defined, the appellants adopted the standpoint that to
set their decisions aside and to ask them to reconsider the renewal applications
would be a meaningless exercise, arguing that the 2008 by-laws contained an
absolute prohibition against advertising in prohibited areas which precluded the
respondent from being granted the permission it sought. The respondent, on the
other hand, argued that its applications would have to be reconsidered not under the
2008 by-laws but those of 2001, under which the permission it sought could be
granted.

[11] The high court rejected the appellant’s argument, holding that the 2001 by-
laws would apply to a reconsideration of the respondent’s applications. As the
appellants had neither suggested that the billboards contravened clause 24(6)(d) of

6 Promulgated in the Gauteng Provincial Gazette Extraordinary 150 of 13 June 2008.

the 2001 by-laws7 nor alleged that the billboards in any way interfered with traffic or
been the subject of any complaint, and in the light of its further conclusion that the
appellants had acted incompetently in assessing the respondent’s applications, the
high court decided not to refer the matter back for reconsideration by the appellants
as it felt that to do so would cause the respondent to suffer ‘unjustifiable prejudice’. It
therefore set aside the decisions of both appellants and replaced them with its own
decision granting the respondent permission to use the billboards for five years,
ante-dating that authority as mentioned at the outset.

[12] In this court, the appellants conceded that in order to give effect to the
principle of legality their invalid decisions should be set aside. However, as in the
high court, the principal issue argued was whether in that event the respondent’s
applications would fall to be reconsidered under the 2001 or 2008 by-laws. In the
alternative, counsel for the respondent argued that even if the 2008 by-laws were
applicable, the prohibition they contained against advertising in prohibited areas was
not absolute and the appellants could still grant the requisite permission.  However,
at the close of argument it transpired that in fact the 2008 by-laws had been repealed
on 18 December 2009 when a fresh set of by-laws (‘the 2009 by-laws’) 8 were
published by the second appellant under s 13(a) of the Local Government: Municipal
Systems Act 32 of 2000. This had occurred even before the respondent had filed its
replying affidavit in the high court, and the 2008 by-laws are therefore wholly
irrelevant to the issues debated both in the high court as well as this court. This is a
lamentable state of affairs which made it necessary for this court to afford the parties
the opportunity to file written argument after the hearing dealing with the 2009 by-
laws.

[13] In her subsequent written argument, counsel for the respondents submitted
that, for the reasons she had advanced in respect of the 2008 by-laws, the first
appellant had still retained a residual discretion to allow advertising signs in
prohibited areas. This was founded on the provisions of clause 4 of the 2009 by-laws

7 Quoted in para 6 above.
8 The City of Johannesburg: Outdoor Advertising By-Laws published in Gauteng Provincial Gazette
Extraordinary  277 of 18 December 2009.

which, so the argument went, provide an over-arching discretion to the first appellant
to grant the permission sought. Inter alia, that clause provides :
‘ 4 (1) In considering an application submitted in terms of section 3(3), the Council must, in
addition to any other relevant factor, legislation, policy and by-laws of the Council, have due
regard to the following:
(a)
. . . .
(b)
Whether the proposed advertising sign will ─
(i)
. . . .
(ii)
constitute a danger to any person or property or to motorists or pedestrians or
obstruct vehicular or pedestrian traffic;
(iii)
in any way impair the visibility of any road traffic sign’.

[14] However, the 2009 by-laws also contain a prohibition against advertising
signs near on- and off-ramps and overhead traffic signs on freeways and major
highways. These are diagrammatically illustrated in schedule 2, which is identical to
the corresponding schedule to the 2008 by-laws. Relating thereto, clause 6(2)
provides:
‘Any advertising sign on a public street or facing a public street, including advertising signs
facing a Provincial Road, must comply with the following requirements:
(a) . . . .
(b) no advertising sign may be located inside a prohibited area at any on- and off-ramp of a
motorway, whether local, provincial or national and in relation to overhead road traffic signs,
as depicted in Figure 1 of Schedule 2.’

[15] The prohibition in clause 6(2), as read with schedule 2, is then incorporated
by reference into clause 9 which details a number of instances ‘(i)n addition to any
other prohibition . . . in these By-laws’ in which ‘no person may erect, maintain or
display any advertising sign’. As clause 3(6)(b) goes on to provide in peremptory
terms that the first appellant  ‘must refuse to accept an application’ which relates to
an advertising sign prohibited by clause 9, the by-laws clearly fall to be interpreted as

providing an absolute prohibition against advertising signs falling within prohibited
areas in schedule 2, and the discretion provided by clause 4 (accepting for present
purposes that there is one) can only relate to applications which the first appellant
can accept ie those not prohibited by clause 9. As it is common cause that the
respondent’s renewal applications relate to billboards that are in prohibited areas
which are referred to by reference in clause 9, if the 2009 by-laws are applicable to
the reconsideration of the renewal applications, the first appellant has no discretion
to grant the approval the respondent seeks.

[16] Consequently the cardinal issue to consider is the respondent’s contention
that the 2001 by-laws would be applicable to a reconsideration of its renewal
applications. The immediate difficulty that I have with this argument is to be found in
the terms of the subsequent by-laws. Clause 39(3) of the 2008 by-laws provided for
any application brought under the repealed 2001 by-laws that was ‘pending’ before
the first appellant at the date of the commencement of the 2008 by-laws to be dealt
with in terms of the latter by-laws. Similarly, clause 39(3) of the 2009 by-laws
provides that any application brought under the terms of the 2008 by-laws ‘pending
before the (first appellant) at the date of commencement of these By-laws must be
dealt with in terms of these By-laws’.

[17] Both in the court a quo, and initially in this court, the parties accepted that the
respondent’s renewal applications had finally come to an end on 31 March 2008
when the second appellant dismissed the respondent’s appeals. They therefore
further accepted that the renewal applications could not be construed as ‘pending’
when the 2008 by-laws commenced on 1 July 2008 (and nor, for that matter, when
the 2009 by-laws commenced on 18 December 2009). In their further written
argument submitted after the appeal had been heard, the appellants retreated from
this position to argue that the effect of the high court setting aside their invalid
actions on 13 October 2010 was retrospectively to visit those decisions with nullity;
with the result that the first appellant must be considered as not having taken any
decision on the renewal applications before the 2009 by-laws commenced, and that
such applications were therefore ‘pending’ at that time.

[18] As was correctly observed in Noah,9 precisely when a matter may be said to
be ‘pending’ is an issue that has to be determined in the context in which the word is
used. However, the general meaning of the word is ‘awaiting decision or
settlement’10 and there can be no doubt that, once the respondents had lodged their
renewal applications with the first appellant, they were thereafter ‘pending’ until such
time as they had been dealt with. The issue is whether the renewal applications were
so pending when the 2009 by-laws came into operation.

[19] Counsel for the respondent correctly pointed out that this court had held in
Oudekraal11 that an invalid administrative decision stands and has effect until it is set
aside. On the strength of this authority, she argued that as the declaration of
invalidity was only made by the high court after the 2009 by-laws had come into
operation and, as at that time a final decision had been taken by the appellants
which had not yet been set aside, the renewal applications could not be construed as
having been pending at that time.

[20]   However, as this court has regularly stressed, an administrative decision
declared to have been invalid is to be retrospectively regarded as if it had never
been made.12  Accordingly, if the decisions of the appellants are to be set aside, as
all parties are agreed should occur, the matter is to be considered on the basis that
no valid decisions in respect of the respondent’s renewal applications were ever
taken. Those applications must therefore still be regarded as still awaiting a decision
and, that being so, they are clearly pending ─ and have been since they were lodged
in March 2007. They were therefore pending when the 2009 by-laws came into effect
and, by reason of clause 39(3) of such by-laws, must be dealt with in terms of those
by-laws rather than the 2001 by-laws.

9 Noah v Union National South British Insurance Co Ltd 1979 (1) SA 330 (T) at 332B-333C.
10 Concise Oxford English Dictionary 12 ed (2011).
11 Oudekraal Estates (Pty) Ltd v City of Cape Town & others 2004 (6) SA 222 (SCA) paras 27-31.
12 See eg Eskom Holdings Ltd & another v New Reclamation Group (Pty) Ltd 2009 (4) SA 628 (SCA)
para 9 and Seale v Van Rooyen NO & others: Provincial Government, North West Province v Van
Rooyen NO & others 2008 (4) SA 43 (SCA) paras 13 and 14.

[21] This conclusion renders it unnecessary to consider the respondent’s
argument based on s 12(2)(c) of the Interpretation Act 33 of 195713 that, if clause
39(3) is of no application, it had acquired the right to have its renewal applications
considered under the 2001 by-laws before they were repealed. Suffice it to say in the
light of the decisions of this court in Gunn, 14 Volkswagen 15 and Edcon 16 ─ the
reasoning of which is supported by various judgments in foreign jurisdictions17 ─ the
respondent had no more than a hope or expectation of acquiring a right under the
2001 by-laws which fell short of its enjoying a right which had accrued to it to have its
application decided under those by-laws. For that reason, the 2001 by-laws would in
any event have been of no application even had clause 39(3) not been included in
the 2009 by-laws.

[22] However, for the reasons given, the 2009 by-laws are clearly of application to
the renewal applications and there is an absolute prohibition under those by-laws in
respect of advertising signs being placed in the position in which the two billboards in
question are situated. Thus not only did the high court err both in finding that the
2001 by-laws would be applicable to the reconsideration of the renewal applications
but also in exercising a discretion on behalf of the first appellant which the latter did
not have. Accordingly, not only can the order granting permission to the respondents
to use the billboards not stand, but there would be no point in directing the first
appellant to reconsider the renewal applications which it is obliged to refuse.  In
these circumstances, the high court ought merely to have made an order setting
aside the decisions of the two appellants.  That will be reflected in this court’s order.

13 It reads as follows: ‘Where a law repeals any other law, then unless the contrary intention appears,
the repeal shall not ─ . . . (c) affect any right, privilege, obligation or liability acquired, accrued or
incurred under any law so repealed.’
14 Gunn & another NNO v Barclays Bank DCO 1962 (3) SA 678 (A) at 684B-D.
15 Chairman, Board on Tariffs and Trade v Volkswagen of South Africa (Pty) Ltd & another 2001 (2)
SA 372 (SCA).
16 Edcon Pension Fund v Financial Services Board of Appeal & another 2008 (5) SA 511 (SCA).
17 Eg Odelola v Secretary of State for the Home Department [2009] UKHL 25:[2009] 3 All ER 1061
(HL); Chief Adjudication Officer v Maguire [1999] 2 All ER 589, [1999] 1 WLR 1778; Foodstuffs
(Auckland) Ltd v Commerce Commission [2002] 1 NZLR 353 (CA) and Attorney-General for the State
of Queensland v Australian Industrial Relations Commission & others; Minister for Employment and
Workplace Relations of the Commonwealth of Australia v Australian Industrial Relations Commission
and others [2002] HCA 42: [2002] 213 CLR 485 at para 101.

[23] Turning to the question of costs, as the appellants have achieved substantial
success on appeal they are entitled to their costs of appeal. In regard to the costs in
the high court, the attitude of the appellants throughout has been that their decisions
were indefensible. In truth, the proceedings in the high court concerned whether the
respondent should be granted permission to use the billboards. The order the court a
quo made in that regard should not have been granted. In these circumstances it
seems to me that the respondent should bear the costs in the high court as well. It is
not suggested that costs of two counsel would be inappropriate.

[24] The following order is therefore made:
1.
The appeal succeeds with costs, such costs to include the costs of two
counsel.
2.
The order of the high court is set aside and is substituted with the following:
‘(a)
The decisions taken by the first respondent, the City of Johannesburg, on 29
August 2007, to refuse the applicant’s applications for approval of the two outdoor
advertising billboards known as the Sandown billboard and the Kelvin View billboard,
as well as the decisions by the third respondent, the city manager, to dismiss the
applicant’s appeals against the aforementioned decisions of the first respondent, are
reviewed and set aside.
(b)
The applicant is to pay the respondents’ costs, such costs to include the costs
of two counsel.’

______________________
L E Leach
Judge of Appeal

APPEARANCES:

For Appellant:

J Both SC (with him A W Pullinger)

Instructed by:

Moodie & Robertson, Johannesburg

Claude Reid Inc, Bloemfontein

For Respondent:

K Hofmeyr

Instructed by:
Pagel Schulenberg Inc, Johannesburg

Symington & De Kok, Bloemfontein

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:  The Registrar, Supreme Court of Appeal
Date:  29 March 2012
Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

Neutral citation: City of Johannesburg v Ad Outpost (55/11) [2012] ZASCA 40 (29 March
2012)

The respondent, an advertising agency that does business placing advertisements on
billboards alongside major roadways in Johannesburg, had obtained permission to use two
billboards for that purpose: one in Sandown and the other in Kelvin View, Johannesburg. The
original authority granted to the respondent in this regard had lapsed in 2004. Despite this,
the respondent continued to use the billboards without seeking permission from the City of
Johannesburg to do so. Eventually the City insisted upon the respondent once more applying
for permission to use the billboards. It did so in March 2007, but such permission was
refused. The respondent appealed to the City Manager against this decision, but that appeal
too was dismissed.

The respondent then approached the South Gauteng High Court for an order authorising it to
use the billboards for a period of five years, contending that the decisions taken by the City
and the City Manager were invalid. The City and the City Manager conceded that the
decisions they had taken were of no force and effect but alleged that as there had been a
change of municipal by-laws, and as there was no longer any discretion on their part to allow

advertising on the billboards in question due to their locality (both were situated in areas in
which advertising was prohibited) it would be meaningless to set aside their decisions.

The high court, however, concluded that the by-laws which were in place when the
respondent had applied for permission in 2007 (and which had been repealed before the
matter reached the high court) conferred a discretion to grant permission for advertising in
the prohibited areas, and would be applicable when the applications for permission were
reconsidered. It also concluded that it should grant the respondent such permission rather
than to refer the applications back to the City.

This decision was today set aside by the Supreme Court of Appeal which ruled that the
subsequent by-laws, promulgated in 2009, which were of application when the high court set
aside the decisions taken by the City and the City Manager, were the by-laws under which
the applications for permission would have to be reconsidered. Under those by-laws,
advertising was absolutely prohibited where the two billboards in question are located. It
therefore set aside the permission granted to the respondents by the high court to use the
billboard for five years.

---ends---