The applicant, Arun Property Development, seeks compensation for the portion of land used through a government provincial structure plan approved and applied in the City of Cape Town.
Arun completed a residential property development near Cape Town.
For this purpose, the developer obtained various planning approvals from the city in accordance with the Land Use and Planning Ordinance 15 of 1985 (LUPO).
However, before Arun purchased the property or began its development, a provincial structure plan was approved.
The plan envisioned roads to serve the area, some of which traversed Arun’s property.
As part of the planning approvals for Arun’s development, land was reserved for public roads.
Arun is seeking compensation for the portion of the land used for the roads, which exceeded the normal needs for public streets and public places in the area where the development took place.
In September 2001 Arun instituted action against the city in the Western Cape High Court in terms of section 28 of the LUPO, claiming compensation for the excess land. The court ruled in Arun’s favour.
It held that the excess land was vested in the city and that Arun was entitled to compensation in respect thereof.
The court further held that such compensation was to be calculated according to the Expropriation Act 36 of 1975.
The city appealed at the Supreme Court of Appeal (SCA), and submitted that the excess was vested in the city and that Arun was not entitled to compensation for it. The appeal was thus upheld and the decision of the high court overturned.
In the Constitutional Court, Arun submits that the only logical interpretation of section 28 of the LUPO is one which provides that the vesting of public places and streets beyond the normal need arising from a particular subdivision will give rise to a claim for compensation.
Arun seeks that the appeal be upheld and the order of the high court be reinstated.
The city submits that Arun is not entitled to compensation because the reservation of land for public roads amounts to a mere deprivation, and not expropriation, as envisaged in section 25 of the Constitution.
The city submits that the provincial structure plan is a policy for the purposes of section 28.
Therefore, compensation for excess land which is vested in the local authority is not payable to the owner upon granting an application for subdivision.