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Kenya Law / Blog / Case Summary: The legitimate expectations of an objective, hypothetical neighbour should be considered by a local authority when considering a proposed building in assessing all disqualifying factors of the possibility of derogation of value of adjacent properties, disfigurement and unsightliness of the area.

The legitimate expectations of an objective, hypothetical neighbour should be considered by a local authority when considering a proposed building in assessing all disqualifying factors of the possibility of derogation of value of adjacent properties, disfigurement and unsightliness of the area.

Trustees of the Simcha Trust v Da Cruz and 3 Others; City of Cape Town v Da Cruz and 3 Others [2018]

Constitutional Court of South Africa

CCT 125/18 and CCT 128/18

Mogoeng CJ, Cameron, Froneman, Khampepe, Mhlantla, Theron JJ and Basson, Dlodlo, Goliath, Petse AJJ

February 19, 2019

Reported by Faith Wanjiku

Download the Decision

Infrastructure Law-buildings-erection of buildings-building regulations and standards-approval by local authorities-disqualifying factors against approval-test to be applied in assessing disqualifying factors-whether the legitimate expectations of an objective, hypothetical neighbour had to be considered by a local authority when assessing all disqualifying factors of the possibility of derogation of value of adjacent properties, disfigurement and unsightliness of the area when considering a proposed building -National Building Regulations and Building Standards Act No 103 of 1977, section 7(1) (b) (ii)(aa)

Constitutional Law-Bill of Rights- right to just and fair administrative action-review of administrative action by a court-whether the appeals raised a constitutional issue which could grant the Constitutional Court jurisdiction to grant leave to appeal-Constitution of the Republic of South Africa, 1996, section 33

Brief Facts:

In 2005, the City of Cape Town (Municipality) approved a development application by the Four Seasons sectional title scheme. The building plan entailed building balconies up to the boundary of the Four Seasons’ property. Adjacent to the Four Seasons’ property was a property owned by the Simcha Trust. Between 2005 and 2007, Four Seasons erected a 17-storey building with balconies leaning into the Simcha Trust’s property. In 2007, the Simcha Trust submitted a building application. It sought to build an additional four storeys to the existing structure on its property. All storeys were to be built up to the boundary of the property. If implemented, the top three storeys of the new building would touch the existing balconies on the eighth, ninth and tenth floors of the Four Seasons’ building.The Municipality approved the Simcha Trust’s application in September 2008 and construction commenced.

In December 2012, Four Seasons instituted an application in the High Court in which it sought an order that the Trust suspend construction pending a review of the approval of the development. The Municipality conceded that the approval it had granted to the Trust should be set aside as it had been improperly granted. The approval was set aside by agreement between the parties and the High Court made an order to that effect. The Trust submitted new plans to the Municipality in June 2014. The application process was more rigorous that time. The building control officer recommended that the plans be approved.

Four Seasons instituted a review in the High Court with regard to the Municipality’s decision to approve the Simcha Trust’s plans. The High Court set aside the development approval on two grounds: first, that the City’s official, in approving the plans, was materially influenced by an error of law; and, second, that the official failed to take into account a relevant consideration, namely whether the proposed development gave rise to any disqualifying factors when viewed from the perspective of the neighbouring Four Seasons’ building.

The Simcha Trust and the City appealed to the Full Court. The Full Court held that the City’s decision-makers had committed errors of law, first by applying the incorrect test when considering whether any of the disqualifying factors were present, and, second, by failing to take into account the impact of the building plans on the neighbouring properties. The Full Court dismissed the appeal and a petition for special leave to appeal to the Supreme Court of Appeal was unsuccessful. The Trust and the Municipality then filed separate applications for leave to appeal in the Constitutional Court as applicants respectivelyclaiming that the legitimate expectations test was suited to application in the context of derogation in value from a particular property, rather than disfigurement of an entire area.

Issues

i. Whether the legitimate expectations of an objective, hypothetical neighbour had to be considered by a local authority when assessing all disqualifying factors of the possibility of derogation of value of adjacent properties, disfigurement and unsightliness of the area when considering a proposed building.

i. Whether the appeals raised a constitutional issue which could grant the Constitutional Court jurisdiction to grant leave to appeal.

Relevant Provisions of the Law

National Building Regulations and Building Standards Act, No. 103 of 1977

Section 7 -Approval by local authorities in respect of erection of buildings

(1) If a local authority, having considered a recommendation referred to in section 6 (l) (a)-

(b) (ii) is satisfied that the building to which the application in question relates..,-

(aa) is to be erected in such manner or will be of such nature or appearance that-

(aaa) the area in which it is to be erected will probably or in fact be disfigured thereby;

(bbb) it will probably or in fact be unsightly or objectionable;

(ccc) it will probably or in fact derogate from the value of adjoining or neighbouring properties;

such local authority shall within 30 days after the receipt of such application refuse to grant its approval in respect thereof and give reasons for such refusal

Held:

  1. The instant Court would grant leave to appeal where the application raised a constitutional issue and where it was in the interests of justice to grant leave to appeal. The Court had jurisdiction to consider the appeal because all Promotion of Administrative Justice Act (PAJA) reviews concerned the right to just and fair administrative action under section 33 of the Constitution of the Republic of South Africa, 1996 (the Constitution). They were constitutional matters. While prospects of success were important in determining whether leave to appeal should be granted, they were not determinative. There were no prospects of success in the matter yet there was a narrow question of law which the Court should pronounce upon. It was therefore in the interests of justice to grant leave to appeal.
  2. The legitimate expectations test was the means by which a decision maker determined whether there would be derogation in value sufficient to disqualify a building application under the National Building Regulations and Building Standards Act (the Act). In terms of section 7(1) (b) (ii) (aa) of the Act, the local authority had to be satisfied that none of the disqualifying factors were present. Discretionary power was an essential tool in the administration and the legal system that governed it. The latitude of discretionary power varied with context. Section 7(1) (b) (ii) (aa) conferred a broad discretion on the local authority to consider a range of factors. However, that discretion was not untrammelled. All administrative action had to be lawful, reasonable and procedurally fair. The legitimate expectations test correctly circumscribed the discretion of the decision maker with the constitutionally mandated requirements of lawfulness, reasonableness and procedural fairness.
  3. The concept of legitimate expectation found its origins in administrative law. But even where a person claiming some benefit or privilege had no legal right to it, as a matter of private law, he could have a legitimate expectation of receiving the benefit or privilege, and, if so, the courts would protect his expectation by judicial review as a matter of public law. Legitimate, or reasonable, expectation could arise either from an express promise given on behalf of a public authority or from the existence of a regular practice which the claimant could reasonably expect to continue.
  4. The reference to legitimate expectations was a reference to the hypothetical range of future possibilities which the parties to a notional sale would, as a legal construct, be considered to have had in the forefront of their minds, at the time. It was not to be confused with the concept of a legitimate expectation as it had been established in law, in order to protect a party, by way of a procedural remedy, from the adverse consequences of a decision being taken by another without a prior opportunity to be heard.
  5. The language of legitimate expectations in the context of derogation from value did not refer to an independent right held on behalf of a neighbour to have their opinion heard by the decision maker. The phrase referred to an objective factual inquiry into the legitimate expectations of a party to a hypothetical sale of a neighbouring property. In the context of derogation in value, the decision maker had to be positively satisfied that a hypothetical purchaser of a neighbouring property would not harbour legitimate expectations that the proposed development application would be denied because it was so unattractive or intrusive.
  6. The purpose of the Act coloured the way in which the constitutional requirements of reasonableness, lawfulness and procedural fairness applied to administrative action taken under the Act. The purpose of the Act was to ensure the harmonious, safe and efficient development of urban areas. Local authorities had to exercise powers conferred on them under the Act in pursuit of that purpose. They were the caretakers of the community interest in relation to building applications. That impelled them to consider the impact of a building proposal on the surrounding area and particularly the neighbours.
  7. When applied to each of the disqualifying factors in section 7(1) (b)(ii)(aa), the legitimate expectations test was an accurate translation of the duties of local authorities under the Act and the Constitution. It required the decision maker to consider the impact of the proposed development on neighbouring properties, from the perspective of a hypothetical neighbour. That infused the exercise of the discretionary power under section 7(1) (b) (ii) (aa) with the constitutionally mandated requirements of reasonableness, lawfulness and procedural fairness, informed by the contextual approach mandated by the Act. The test was consistent with the objects of the Act and the constitutional requirement of just administrative action.
  8. The Municipality expressed considerable concern in its submissions about the administrative burden which the legitimate expectations test would impose on it. The test did not impose any additional duty on the Municipality to consult with the public above and beyond the existing requirements of the law. The legitimate expectations test was not a subjective test determined by the whim of a sensitive neighbour. The test was objective and based on relevant facts, which would, in the ordinary course, be placed at the disposal of the decision maker.
  9. The legitimate expectations test applied to the disqualifying factors in section 7(1) (b) (ii) (aa)(aaa)-(ccc). In contrast to the disqualifying factor in subsection (ccc), the disqualifying factors in subsections (aaa)-(bbb) made no mention of neighbouring or adjoining properties. The phrase neighbouring property was used flexibly and its scope would vary in light of all of the circumstances of the case. The decision maker should consider whether the proposed building would probably, or in fact, be so disfiguring of the area, objectionable or unsightly that it would exceed the legitimate expectations of a hypothetical owner of a neighbouring property.
  10. The decision maker had to be positively satisfied as to the existence of the disqualifying factors and that the disqualifying factors had to be considered separately from compliance with the other requirements of the Act. The legitimate expectations test was the appropriate means through which to establish the existence of the disqualifying factors in section 7(1)(b)(ii)(aa)(aaa)-(ccc) of the Act.

Appeal dismissed.

Orders:

Under CCT 125/18 (Trustees of the Simcha Trust v Da Cruz and Others):

i Leave to appeal to the Constitutional Court by the applicants was granted.

ii The appeal at the Constitutional Court was dismissed.

iii The applicants to pay the costs of the respondents in the Court, including where applicable the costs of two counsel.

Under CCT 128/18 (City of Cape Town v Da Cruz and Others):

i Leave to appeal to the Constitutional Court by the applicants was granted.

ii The appeal at the Constitutional Court was dismissed.

iii The applicants to pay the costs of the respondents in the Court, including where applicable the costs of two counsel.

Relevance to the Kenyan Situation

The Constitution of Kenya, 2010 provides in article 42 that every person has the right to a clean and healthy environment. Article 66 provides for regulation of land use and property in stating that the State could regulate the use of any land, or any interest in or right over any land, in the interest of defence, public safety, public order, public morality, public health, or land use planning.

There is also the National Construction Authority Act No. 41 of 2011. Under section 5 (1) the object for which the Authority was established is to oversee the construction industry and coordinate its development.Regulation 17 (1) of the National Construction Authority Regulations 2014 provides that all construction works, contracts or projects either in the public or private sector shall be registered with the Authority in accordance with the Act.

The Environmental Management and Coordination Act No. 8 of 1999 establishes the National Environment Management Authority under section 7 whose main objective is general supervision and co-ordination over all matters relating to the environment and to be the principal instrument of Government in the implementation of all policies relating to the environment.

The Environmental (Impact Assessment and Audit) Regulations, 2003 provide in regulation 4 (1) that no proponent shall implement a project likely to have a negative environmental impact or for which an EIA is required under the Act or the Regulations, unless an EIA has been concluded and approved in accordance with the Regulations.

Regulation 16 provides that an EIA study prepared under the Regulations shall take into account environmental, social, cultural, economic, and legal considerations.

In Douglas Onyancha Omboga & 3 others v Joseph Karanja Wamugi & 4 others [2019] eKLR it was the petitioners’ case that they signed a petition objecting to the construction of the telecommunication mast on the suit land because they had not been consulted and that they were not involved in any Environmental Impact Assessments or other approvals for the said project. The petitioners averred that the telecommunication tower stood at 30 meters and did not meet the specifications stated in the Environmental Impact Assessment Project Report and that the base of the tower affected and limited the user of the other adjoining parcels of land. The Court held that the procedural rights by individuals who were likely to be affected by a project which was out of character with its surrounding were critical in realizing the right to a clean and healthy environment. Indeed, the failure to involve the public in environmental decisions or to provide access to environmental information was a violation of environmental rights of individuals.

In Tim Busienei & 2 Others v Director General, National Environment Management Authority & Another, Tribunal Case No. 10 of 2006 [2007] eKLR, the National Environmental Tribunal stated that the purpose of an EIA licensing process prescribed by Part VI of EMCA and the regulations made thereunder was to assess the likely significant impact of a proposed development project on the environment. In deciding on the nature of likely impacts, account had to be taken of the status of the environment within which the proposed project would be undertaken as well as the negative impacts that the proposed project were likely to have on the environment. In that regard, existing air quality, traffic, noise, aesthetic and other features of the environment in the area in which the development was proposed to be carried out, as well as the likely impacts of the project on the environment media were relevant considerations. The status of the environment was not determined by the fact alone that an area was designated as a residential area, a high class residential area or even as an area of low population density.

In Ken Kasinga v David Kiplagat & 5 others, Petition No. 50 of 2013 the Court held that where there was non-compliance of the procedure for protecting the environment, then an assumption ought to be drawn that the project was one that violated the right to a clean and healthy environment.

The Constitutional Court case is of significance to Kenya as it develops jurisprudence in this era of rampant real estate developments by laying out plainly and in statute the disqualifying factors for one not to be given approval for erection of a proposed building by a local authority and the correct test of legitimate expectations of an objective, hypothetical neighbor that should be applied in determining the same.

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