Land sale nullified

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High court rules against sale of Pascoe Crescent land

erf-361A MUNICIPAL land deal made nearly 15 years ago has been reviewed and set aside by the Grahamstown High Court.

The case of erf 361 and 642 in Pascoe Crescent has had a convoluted history since Ndlambe Municipality made a deal with Transnet to sell their respective portions to Pegasus Khotso, a company with a proposal to develop the land for mixed use, incorporating both shops and apartments.

The deal was originally contested in court by a group of Port Alfred ratepayers known as the “Pascoe Six”, on the grounds that due process had not been followed and because of the environmental sensitivity of the property which is next to a wetland.

In the meantime the developer had also changed from Pegasus Khotso to the PA River Development Company, which did not exist at the time Pegasus submitted its proposal to Ndlambe.

A high court judgment a few years later found there had been “sleight of hand” in the way the deal had been conducted by the municipality, that land had not been properly rezoned and ordered the developer to begin an environmental impact assessment from scratch.

The process was started afresh, but then abandoned when the developer changed environmental consultants and sought to commence with development based on provisions of the Development Facilitation Act. They obtained approval from the Eastern Cape Development Tribunal in 2013.

Subsequently, the land deal was contested in court by Pick and Pay owners Mark Shelton and Jon Campbell, who both own property and live in Port Alfred.

They sought to have the Pascoe land deal reviewed and set aside. The PA River Development Company opposed their application. The municipality said it would abide by the decision of the court and Transnet said it did not oppose Shelton and Campbell’s suit. Fourth respondent, Pegasus, did not join the fray.

In addition to the earlier reasons that ratepayers opposed the land deal, Shelton and Campbell took issue with Ndlambe accepting the offer by Pegasus, which is now a non-existent entity, and yet selling the land to PA River Development Company. They also said the consent of the minister of public enterprises to sell the Transnet portion (erf 642) was not obtained as required.

Shelton and Campbell also asked the court to strike out parts of affidavits submitted by the respondents which they said were either “vexatious, scandalous, attack credibility, argumentative or amount to hearsay”.

The application to strike out was not opposed and were struck out by Judge NG Beshe.

The PA River Development Company director Nicolaas Louw opposed the relief sought by Shelton and Campbell on the basis they had not met a deadline prescribed by the Promotion of Administrative Justice Act (PAJA), had not exhausted internal remedies available to them in terms of the Local Government Municipal Systems Act, and that he had already obtained approval for development from provincial authorities.

He also said he had incurred considerable expenditure on the project.

Judge Beshe accepted the argument by Shelton and Campbell that they launched the application within 180 days “after they became aware of the impugned actions” and thus complied with PAJA.

He said his task was made easy by the telling concessions that had been made by Transnet in its submissions to court, including that “towards the end of the process and selection of the successful bidder [Pegasus], the transaction was suddenly changed to one of outright sale. Clearly this decision was in violation of the provisions of section 217 of the Constitution” and that the PA River Development Company was not party to the submission made by Pegasus, so Ndlambe and Transnet could not conclude a sale agreement with the PA River Development Company.

Judge Beshe ordered that the Ndlambe management committee decision to market its property jointly with Transnet’s property, the resolutions by council to accept the proposal by Pegasus and approve a deed of sale, and the decision by Transnet to approve the sale of erf 642, be reviewed and set aside.

He declared the agreements of sale that Ndlambe and Transnet made with the PA River Development Company were unlawful and void.

Ndlambe and the PA River Development Company were ordered to pay the costs of the striking out application and the PA River Development Company has to pay for Shelton and Campbell’s costs.

 

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