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  • IN THE HIGH COURT OF SOUTH AFRICA

    (WESTERN CAPE DIVISION, CAPE TOWN)

    CASE NO: A476/14

    In the matter between:

    TRE DONNE HOMEOWNERS ASSOCIATION First Appellant

    CITY OF CAPE TOWN Second Appellant

    and

    BERGWATER PLASE CC

    Respondent

    Coram: Dlodlo, J et Henney J et Salie-Hlophe J

    Dates of Hearing: 13 May 2016

    Date of Judgment: 09 June 2016

    JUDGMENT

  • 2

    DLODLO, J

    INTRODUCTION

    [1] The Respondent was the developer of the luxury estate known as Tre

    Donne situated near Sir Lowrys Pass Western Cape Province. There

    were conditions of the coming into being of the estate. For instance

    one of such conditions of establishment of the estate in terms of the

    Land Use Planning Ordinance 15 of 1985 was that the developer

    must establish a homeowners association. It was the responsibility of

    the developer to draft the constitution. This it did. The Appellant is the

    Homeowners Association which the developer brought into being by

    crafting the constitution thereof pursuance to the conditions imposed

    on the developer in terms of the Land Use Planning Ordinance. The

    conditions of subdivision were imposed by the City of Cape Town.

    The constitution drafted by the developer had to be approved and

    was in fact approved by the City of Cape Town. Contained in the said

    constitution are two clauses which form the subject of this appeal.

    These are clause 6.3 which reads as follows:

    The developer or representative of the developer will be an

    Excom member in perpetuity; and clause 10.4 which reads as

    follows:

  • 3

    The developer will not be liable to pay any levies with regard to

    any unsold properties within the development.

    [2] The Appellant describes these aforementioned clauses as unusual. I

    hasten to mention that in the answering papers an expert witness Mr.

    Maree stated the following:

    In my experience with regard to a development of this nature,

    the developer of such community scheme is sometimes, in

    terms of special conditions asserted in its constitution by a

    developer, exempted from paying levies to the homeowners

    association in respect of unsold and undeveloped properties in

    the development for the duration of a specific development

    period.

    It is of importance that paragraph 15.3 of the Constitution in its

    original form stated the following pertaining to the clauses complained

    of by the Appellant:

    Paragraphs 6.3 and 10.4 of this constitution cannot be

    amended.

    The above is described by the Appellant as an entrenchment clause.

    [3] The developer reportedly owns eight unsold erven and two of the

    biggest and most valuable erven are inhabited by the developers

  • 4

    members and employees and no levies are paid in respect of these

    erven. In contravention of paragraph 15.3 of the constitution in its

    original form and on 13 May 2010 at an annual general meeting, the

    Appellant removed clauses 6.3, 10.4 and 15.3 from the constitution of

    the Appellant. In response the Respondent launched an application

    which is the subject-matter of this appeal in terms of which it sought a

    declaratory in terms of which the decision taken by the Appellant to

    remove clauses 6.3, 10.4 and 15.3 from the Constitution are declared

    unlawful. In the alternative (as per an amendment of the Notice of

    Motion) the Respondent sought an order in terms of which the

    decision by the Appellant is reviewed and set aside. On 27 May 2015

    my brother Smit AJ granted the relief as prayed for in paragraphs (a),

    (b), (c) and (d) of the Notice of Motion. This appeal concerns the

    findings and an order made by Smit AJ.

    BACKGROUND FACTS

    [4] It has been mentioned in the introductory portion of this judgment that

    the Respondent is the developer of the Tre Donne Estate. It must

    also be added that the estate concerned is a residential development

    which originally comprised 81 erven and reportedly it now comprises

  • 5

    87 erven. At the time that the subdivision was approved by the then

    Helderberg Municipality (subsequently inherited by the City of Cape

    Town) a condition of subdivision was that the constitution be

    prepared for a homeowners association which would manage the

    estate and that the then local authority had to approve the said

    constitution. This as we now know eventuated.

    [5] The lands on which the roads are situated within the development

    were transferred to the Appellant and the latter is thus responsible for

    the maintenance thereof as well as the maintenance of the storm

    water and sewerage service on the property (as well as the water

    supply to the individual owners and refuse removal). In order to

    enable the Appellant to properly function the Appellant (Homeowners

    Association) is entitled to raise a monthly levy against each and every

    property in the development.

    [6] From the year 2000, when the Constitution in its original form was

    approved by the City certain amendments were made to the

    constitution over a period of time (for an example in 2002). Thereafter

    and from September 2011, the Appellant started rendering levy

  • 6

    statements to the developer (the Respondent in these proceedings)

    for monthly levies in relation to the unsold properties within the

    development. In response to these levy statements received a letter

    was addressed to the estate manager pointing out that the developer

    is not indebted to the Appellant because the latter had no entitlement

    to raised levies against the former in terms of the constitution.

    [7] A meeting was subsequently held and a decision was arrived at in

    terms of which what was perceived to be the offending clauses in the

    constitution were removed in their entirety. On 10 March 2011 the

    City of Cape Town approved the amendments only insofar as it

    addresses the requirements in Section 29 (2) (b) (ii) and (c) of

    Ordinance 15 of 1985 commonly referred to as LUPO. The contention

    advanced on behalf of the developer is that by removing clauses 6.3,

    10.4 and 15.3 from the original constitution of the Tre Donne

    Homeowners Association, the Appellant did not address any

    requirements as set out in Section 29 (2) (b) (i) and (ii) and (c) of

    LUPO and that therefore the City of Cape Town did not approve of

    these amendments. On behalf of the Appellant it is contended

    differently.

  • 7

    GENERAL DISCUSSION AND OBSERVATIONS

    [8] The Appellants case on appeal, according to Mr. Bridgman, is based

    on two main points, namely the principle of legality and that the

    developer followed an incorrect procedure. As far as the principle of

    legality is concerned we were referred to City of Tshwane

    Metropolitan Municipality v RPM Bricks 2008 (3) SA 1 (SCA) at

    para 24 of the judgment. I set out paragraph [24] of the latter

    judgment:

    [24] With respect to Boruchowitz J, what he postulates is, in

    my view, the antithesis of that demanded by the constitution.

    Section 173 of the Constitution enjoins Courts to develop the

    common law by taking into account the interests of justice. The

    approach advocated by the learned Judge, if endorsed, would

    have the effect of exempting Courts from showing due

    deference to broad legislative authority, permitting illegality to

    trump legality and rendering the ultra vires doctrine mitigatory.

    None of that would be in the interests of justice. Nor, can it be

    said, would any of that be sanctioned by the Constitution, which

    is based on the rule of law, and at the heart of which lies the

    principle of legality.

    We were also referred to Fedsure Life Assurance Ltd v Greater

    Johannesburg Transitional Metropolitan Council 1999 (1) SA 374

    (CC) where the Constitutional Court made the following observation:

  • 8

    The rule of law-to the extent at least that it expresses this

    principle of legality is generally understood to be a

    fundamental principle of constitutional law.

    [9] In Mr. Bridgmans contention not only does clause 10.4 of the

    Constitution of Tre Donne Home Owners Association (in its original

    form) offends against Section 29 of Lupo but the attempt to entrench

    it by clause 15.3 offends against the Constitution itself in particular

    Section 151 (4) providing that the National or a Provincial

    Government may not compromise or impede a municipalitys ability or

    right to exercise its powers or perform its functions. In Mr. Bridgmans

    submission the entrenchment clause seeks explicitly to compromise

    and impede the municipalitys ability to exercise its powers and

    perform its functions. I do not share the view that the entrenchment

    clause 15.3 of the Appellants Constitution in its original form trumps

    the Constitution of the Republic of South Africa. It is true that the

    Court a quo expressed a view in an obiter dictum that the provisions

    of clauses 10.4 and 15.3 may very well be ultra vires the provisions of

    the enabling subsection 29 (2) (c) of LUPO. But the Court a quo also

    stated but this does not mean that the Respondents may simply

    erase those provisions from the Constitution. The

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