ConCourt dismisses land contract appeal involving eThekwini

Constitutional Court. (Gallo)

Constitutional Court. (Gallo)

The court found that Giant Concerts, which had brought the application, had no standing and the appeal was dismissed with costs.

The Constitutional Court had previously heard argument on whether a non-ratepayer could challenge the validity of a land contract between a municipality and a third party.

Giant Concerts filed an application for leave to appeal a decision by the Supreme Court of Appeal (SCA), which ruled that it failed to establish its legal standing to challenge a decision by the eThekwini municipality.

In 2003, the eThekwini municipality sold beachfront land to Rinaldo Investments in an attempt to develop Durban's film industry. This was done through a private sale instead of public tender.

Giant Concerts, which is the property holding company of Videovision Entertainment, objected to the proposed sale and instituted legal action in the Pietermaritzburg High Court to have it reviewed.

It claimed that its right to just administrative action had been infringed upon by the municipality's non-compliance with a provincial ordinance.

The court ruled in favour of Giant Concerts and found that the municipality's decision was unlawful. It declared the agreement between the municipality and Rinaldo void.

Rinaldo appealed in the SCA, which overturned the high court's judgment.

No legal standing
It found that Giant Concerts had failed to establish a legal standing to challenge the municipality's decision to sell the land, as it had not shown sufficient interest in the subject matter of the dispute.

In its appeal to the Constitutional Court, Giant Concerts argued that the SCA's approach to legal standing was "too narrow".

It asked that the court take a more relaxed approach to safeguarding the principles of transparency, competitiveness, fairness, political participation, and legality, as enshrined in the Constitution.

Giant Concerts wanted the contract deemed void and the decision to sell the property to Rinaldo deemed "unlawful, procedurally unfair, and unreasonable".

Rinaldo contended that even if Giant Concerts could show standing, the contract was lawful and valid.

On Thursday, Judge Edwin Cameron noted that Giant Concerts did not claim to act in the public interest or on behalf of a group, association or anyone who was not able to bring proceedings themselves.It therefore had to show standing on the basis of its own interest.

The court affirmed that constitutional own-interest standing was broader than traditional common law standing.

The court found that even on a broad approach to standing, Giant Concerts did not show that it had interests that were capable of being directly affected.

This was because Giant Concerts never demonstrated that it had any serious commercial interest in the venture.

The court said it failed to establish anything more than a hypothetical or academic interest.

The court found that Giant Concerts had no legal standing and held that when a party did not have standing, it was not necessary to consider the substance of the dispute, unless there was a strong indication of fraud or gross irregularity in the conduct of a public body.
– Sapa

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