THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable
Case no: 320/12

In the matter between:

LAGOONBAY LIFESTYLE ESTATE (PTY) LTD
Appellant

and

THE MINISTER FOR LOCAL GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
PLANNING OF THE WESTERN CAPE
First Respondent

THE GEORGE MUNICIPALITY
Second Respondent

CAPE WINDLASS ENVIRONMENTAL ACTION
GROUP AND 24 OTHERS
Third Respondent

Neutral citation:  Lagoonbay Lifestyle Estate (Pty) Ltd v The Minister

for Local Government, Environmental Affairs and

Development Planning of the Western Cape &

others (320/12) [2013] ZASCA 13 (15 March 2013)

Bench:

NUGENT, PONNAN, TSHIQI and MAJIEDT JJA and

SALDULKER AJA

Heard:

25 FEBRUARY 2013
Delivered:
15 MARCH 2013

Summary:
Land use – regulation of - regional structure plan and
zoning and subdivision – applications to amend.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from:
Western Cape High Court (Cape Town) (Griesel J sitting as court of
first instance):

1.
The appeal is upheld with costs, such costs to include those consequent upon
the employment of two counsel to be paid jointly and severally by the respondents.

2.
The order of the court below dismissing the application with costs is set aside
and in its stead is substituted the following:
‘(a)
It is declared that the purported decision by the first respondent dated 28 April
2011 refusing the applicant's application for rezoning and subdivision in respect of the
proposed Lagoonbay development is unlawful and is accordingly set aside.
(b)
It is declared that the second respondent is the competent authority to consider
and determine the applicant's application for rezoning and subdivision in respect of the
proposed Lagoonbay development and its decision to approve that application on 17
July 2010 is confirmed.
(c)
The applicant’s application for the amendment of the George and Environs Urban
Structure Plan from agriculture/forestry to township development in respect of the farm
Hoogekraal 238 is remitted to the first respondent for reconsideration.
(d)
The respondents are ordered to pay the costs of the application jointly and
severally such costs to include those of two counsel.’

___________________________________________________________________

JUDGMENT
___________________________________________________________________

PONNAN JA (NUGENT, PONNAN, TSHIQI and MAJIEDT JJA and SALDULKER AJA
concurring):

[1] At the heart of the dispute in this matter is a proposed development on the farm
Hoogekraal 238, which is situated within the George Municipality in the Southern Cape.
The development, which is being promoted by the appellant, the Lagoonbay Lifestyle
Estate (Pty) Ltd (Lagoonbay), envisages a gated community spanning some 655
hectares. It includes: two 18-hole golf courses; 895 single residential houses; 320 single
and fractional title lodges; 150 single and fractional title apartments; a hotel, wellness
centre, spa and clubhouse precinct; a commercial area; conference centre and private
nature reserve. It is by all accounts a fairly ambitious and expensive project - R5 billion
is its projected cost.

[2] Given its vast scale as also the fact that the land on which the proposed
development is to be undertaken is zoned ‘agriculture/forestry’, Lagoonbay had to
secure approval for the project in four different phases. The first related to an
amendment of the George and Environs Urban Structure Plan (1982) (the structure
plan) in terms of s 4(7) of the Land Use and Planning Ordinance 15 of 1985 (LUPO).
The second - to an environmental impact assessment process (EIA) in terms of the
Environment Conservation Act 73 of 1989 (ECA) and the National Environmental
Management Act 107 of 1998 (NEMA). The third - to the rezoning and subdivision of the
property in terms of ss 16(1) and 25(1) of LUPO. And, the fourth and final phase - to the
approval of building plans under the National Building Regulations and Building

Standards Act 103 of 1977. For the purposes of this appeal only the first and third
phases are relevant.

[3] On 17 July 2007 and in response to an application by Lagoonbay for an
amendment to the structure plan the then Minister for Local Government, Environmental
Affairs and Development Planning of the Western Cape (the Minister), Ms Tasneem
Essop, wrote to the municipal manager of the George Municipality:
'1.
The Competent Authority for the administration of [LUPO] has decided that the
application for the amendment of the Urban Structure Plan, from "Agriculture / Forestry"
to "Township Development", on the combined properties known as Hoogekraal 238 in
order to allow for a development be approved in terms of section 4(7) [LUPO] subject to
the following conditions:
1.1
The applicant must investigate the viability of alternative land-uses which should take
into account a triple-bottom line approach, i.e. a principle that must be considered in a
balanced manner and within a regional context.
1.2
The current development proposal as it stands should not be regarded as approved. The
details of a possible development alternative on the land in question as well as the detail
and extent should be resolved during the integrated environment process and planning
processes.
1.3
The associated future zoning application in respect of the land concerned shall be
subject to approval by the Provincial Government as the location and impact of the
proposed development constitutes "Regional and Provincial Planning."'.

[4] On 14 June 2010 the Council of the George Municipality adopted the following
resolution:
'"That the rezoning and subdivision of portion of Hoogekraal no. 238, George (Lagoon Bay
Lifestyle Estate) be approved subject to the conclusion of a detailed services agreement and as
per the conditions laid down by the administration."
. . .
In terms of condition 1.3 of the letter of approval dated 17 July 2007 regarding the amendment
of the Regional Structure Plan received from the Department of Environmental Affairs and
Development Planning, the rezoning application in respect of the land concerned is subject to
approval by the Provincial Government.'

[5] That decision was communicated to the current Minister, Mr Anton Bredell, who
after having considered the matter, wrote to Lagoonbay on 28 April 2011:
'1.
Your application dated 4 August 2009, referred to me (in terms of condition 1.3 of the
approval of the George and Environs Urban Structure Plan, from "Agriculture/Forestry"
to "Township Development", dated 17 July 2007), by the George Municipality on 14 July
2010, refers.

2.
I, as the Competent authority for the administration of [LUPO], have decided that the
applications for:

2.1
the subdivision of Portions . . . of the Farm Hoogekraal No. 238, George, be refused, in
terms of section 25 of [LUPO];

2.2
the rezoning of the consolidated project site consisting of Portions . . . of Hoogekraal . . .
George, from "Agricultural Zone 1" to "Subdivisional Area" to allow the following land
uses:

. . .

be refused, in terms of section 16 of [LUPO]; and

2.3
the subdivision of the consolidated project site into . . . be refused, in terms of section
25 of [LUPO].'

[6] Aggrieved by that decision of the Minister, Lagoonbay launched an application in
the Cape High Court. It cited the Minister as the first respondent, the George
Municipality as the second and the Cape Windlass Environmental Action Group, an
environmental organisation committed to the protection of the environmental integrity of
the Garden Route (also known as the Cape Windlass) and the rural character of the
high plateau between George and Mossel Bay, as the third. To the extent here relevant
the Notice of Motion read:
'3.
It is declared that the decision by the First Respondent dated 28 April 2011, in terms of
which Applicant's application for the rezoning and subdivision relating to the proposed Lagoon
Bay development, was refused, is constitutionally unlawful and a nullity;

. . .
5.
It is declared that the decision taken by the Second Respondent on 17 July 2010, in
terms of which the Applicant's application for the rezoning and subdivision in respect of the
proposed Lagoon Bay development, was approved, was a decision taken by the correct
designated functionary and constitutes the required approval under the Land Use Planning
Ordinance, 15 of 1985, as read with the Constitution.’

That application failed before Griesel J, who dismissed it with costs including those of
two counsel, but granted leave to Lagoonbay to appeal to this court.

[7] As Nugent JA observed in Johannesburg Municipality v Gauteng Development
Tribunal & Others 2010 (2) SA 554 (SCA) para 15: 'The Constitution establishes
government at three levels. At national level, legislative authority vests in Parliament and
executive authority vests in the President (who exercises it together with other members of the
Cabinet). At provincial level, legislative authority vests in the provincial legislatures and
executive authority vests in the provincial Premiers (who exercise that authority together with
other members of the executive councils). At local level, government comprises municipalities,
which must be established for the whole of the territory of the Republic, and the legislative and
executive authority of a municipality vests in its municipal council.'

[8] What occupies our attention in this case is the interrelationship between the
second and third of those three spheres of government. South Africa consists of wall-to-
wall municipalities. Municipalities make up regions. And regions, in turn, constitute
provinces. A use right in relation to land is a right to utilise that land in accordance with
a category of directions setting out the purpose for which the land may be used. The
authority to regulate the use of land within a municipal area is conferred upon a
municipality, whilst the authority to regulate the use of land within a particular region is a
provincial competence. Different considerations will obviously weigh with each in the
exercise of those powers. Decisions as to the uses that a municipality will allow will
necessarily be influenced by local considerations including its capacity to provide the
necessary infrastructure and services within the constraints of its budget (Johannesburg

Municipality para 9). Regional planning, on the other hand, is informed by broader
interests and objectives. In terms of LUPO, the principal tools for the regulation of land
use is through the introduction and enforcement of structure plans at a regional level
and zoning schemes at a municipal level. The general purpose of a structure plan is to
lay down guidelines for the future spatial development of the area to which it relates in
such a way as will most effectively promote the order of the area and the general
welfare of the community concerned (s 5). And the general purpose of a zoning scheme
is to determine use rights and to provide for control over use rights and over the
utilisation of the land in the area of jurisdiction of a local authority (s 11). Thus while a
comprehensive land-use regime calls for integrated and coordinated interaction on the
part of provincial and municipal government, it goes without saying that the one may not
usurp the powers of the other.

[9] Here there is no attack on the structure plan. Nor on the Minister’s powers to
amend it. Lagoonbay’s case is that the Minister’s decision constituted a final approval of
its application to amend the structure plan. I cannot agree. It seems to me that had the
Minister not been satisfied with Lagoonbay’s application, it would have been open to her
to have refused the amendment. Instead she chose to defer her decision. I cannot
comprehend why she was not entitled to say: ‘I will not amend the structure plan until I
know exactly what is envisaged’, or ‘I will let you have a provisional approval subject to
the relevant officials in my department being satisfied as to what the final development
will look like’. For, I daresay, she could hardly have approved the amendment whilst
being indifferent to what the development would in due course look like. The logical
corollary of that is that she reserved for herself the right to say no after she had been
apprised of the detail. It is thus plain that, properly construed, what the Minister did, did
not amount to an unconditional approval of Lagoonbay’s application.

[10] The Minister’s approval was subject to what I, for convenience, shall refer to as
three conditions. Those are set out in paragraphs 1.1 to 1.3 of her letter of 17 July 2007
to the George Municipality. Only the third, which provides ‘the associated future zoning
application in respect of the land concerned shall be subject to approval by the

Provincial Government . . .’, merits consideration. Zoning, as I have endeavoured to
illustrate, was a municipal competence. The rezoning application was thus a matter for
the George Municipality, not provincial government. It follows that the Minister usurped
for herself and her departmental officials a power that had been reserved for the George
Municipality. Accordingly, the condition upon which the Minister’s approval was
dependent was incapable of fulfilment. And, in consequence, her final decision, which
had been deferred, has become impossible of performance. It follows that the structure
plan remains unamended and the application for its amendment falls to be considered
afresh by the provincial authorities. The upshot of all of this is that the development
cannot go ahead until such time as the Minister approves the application to amend the
structure plan.

[11] That leaves the rezoning application: The George Municipality resolved to
approve Lagoonbay’s rezoning and subdivision application. That decision has not been
assailed. The municipality thereafter and in the erroneous belief that that application
was subject to approval by the provincial government as per condition 1.3 of the
Minister’s letter of approval, referred it to the present incumbent of that office, Mr
Bredell, who, without an appreciation that his predecessor had misconceived her
powers, proceeded to deal with the matter. That he lacked the authority to do, for it was
a matter that was reserved for the administration of the municipality (Johannesburg
Municipality para 30). It must follow that his decision in that regard cannot stand and it
accordingly falls to be set aside.

[12] In the result the appeal succeeds and it is upheld with costs, such costs to
include those consequent upon the employment of two counsel to be paid jointly and
severally by the respondents. The order of the court below dismissing the application is
set aside and in its stead is substituted the following:
‘(a)
It is declared that the purported decision by the first respondent dated 28 April
2011 refusing the applicant's application for rezoning and subdivision in respect of the
proposed Lagoonbay development is unlawful and is accordingly set aside.

(b)
It is declared that the second respondent is the competent authority to consider
and determine the applicant's application for rezoning and subdivision in respect of the
proposed Lagoonbay development and its decision to approve that application on 17
July 2010 is confirmed.
(c)
The applicant’s application for the amendment of the George and Environs Urban
Structure Plan from agriculture/forestry to township development in respect of the farm
Hoogekraal 238 is remitted to the first respondent for reconsideration.
(d)
The respondents are ordered to pay the costs of the application jointly and
severally such costs to include those of two counsel.’

_________________
V M PONNAN
JUDGE OF APPEAL

APPEARANCES:

For Appellant:

M C Maritz (with him H J de Waal)

Instructed by:

Werksmans Attorneys, Cape Townd

Phatsoane Henney Attorneys, Bloemfontein

For First Respondent:

S Rosenberg SC (with him D Borgstrom)

Instructed by:

The State Attorney, Cape Town

The State Attorney, Bloemfontein

For Third Respondent:

I D Potgieter (with him E v d Horst (Ms)

Instructed by:

Chennels Albertyn, Rondebosch

Honey Attorneys Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

15 March 2013

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Lagoonbay Lifestyle Estate (Pty) Ltd
v
The Minister  for Local Government, Environmental Affairs and  Development Planning of the
Western Cape &  others
(320/12) [2013] ZASCA 13 (15 March 2013)

Media Statement

Today the Supreme Court of Appeal (SCA) upheld an appeal by Lagoonbay Lifestyle Estate (Pty) Ltd
(Lagoonbay), the proposed developer of a rather ambitious development project in George. The
development envisages a gated community spanning some 655 hectares, which will consist, inter
alia, of two golf courses, single residential houses, fractional title lodges, a wellness centre, spa and
clubhouse precinct, a commercial centre, conference centre and private nature reserve. R5 billion is
the projected cost of the development. Given its vast scale, Lagoonbay required approval for the
project in four different phases – two of which, namely, an amendment to the George and Environs
Structure Plan and a rezoning and subdivision application were relevant for the purposes of the
appeal. When Laggonbay’s application for the amendment of the structure plan came before the then
Minister for Local Government, Environmental Affairs and Development Planning of the Western
Cape (the Minister), she provisionally approved the application. In doing so she made it a condition of
her approval that Lagoonbay’s future zoning application shall be subject to approval by provincial
government. Thereafter Lagoonbay’s rezoning and subdivision application was approved by the
George Municipality. But, acting in accordance with the condition imposed by the Minister, the
Municipality then forwarded the application to the present Minister, who refused to approve it.
Aggrieved by that refusal, Lagoonbay applied to the Western Cape High Court for various declaratory
orders. It cited the Minister as the first respondent, the George Municipality as the second and the
Cape Windlass Environmental Action Group, an environmental organisation committed to the

protection of the environmental integrity of the Garden Route (or Cape Windlass as it is known), as
the third.  The George Municipality took no part in the proceedings. The high court dismissed
Lagoonbay’s application with costs, but granted leave to it to appeal to the SCA.

In upholding the appeal, the SCA held that the rezoning application was a matter for the George
Municipality, not provincial government. Thus, according to the SCA, the Minister had usurped for
herself and her departmental officials a power that had been reserved for the Municipality when she
made her approval of Lagoonbay’s application for the amendment of the structure plan conditional
upon the provincial government’s approval of the zoning application. As such, the decision by the
Minister to refuse the amendment of the rezoning and subdivision application could not stand and it
accordingly fell to be set aside. The SCA confirmed that the George Municipality was the competent
authority to consider and determine Lagoonbay's application for rezoning and subdivision in respect of
the proposed development and its decision to approve that application was accordingly confirmed.
The SCA further held that as Lagoonbay’s application for the amendment of structure plan had not
been approved by the Minister it had to be remitted to him for reconsideration. It accordingly upheld
the appeal and ordered the Minister and the Cape Windlass Environmental Action Group to pay
Lagoonbay’s costs.

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