THE Municipal Employees Pension Fund (MEPF) is challenging the City of Johannesburg’s decision to rezone a property next to its R1.15 billion Nicolway shopping centre in Bryanston without notifying the fund.
The MEPF bought the shopping centre in the upmarket suburb in 2021 from Erf 82 Bryanston for R1.148bn at a time when the fund had launched a challenge to the municipality’s approval of the rezoning of certain land adjacent to the Nicolway shopping centre owned by Nordic Light Properties.
Erf 82 complained that it had not been given proper notification of Nordic Light Properties’ application for rezoning as required in terms of the applicable legislation and that the approval by the City of Joburg was done without its knowledge, which violated the audi alteram partem (let the other side be heard) principle.
The MEPF added that the approval of the rezoning application could impact directly on the rights of Erf 82, the tenants of the shopping centre and visitors as Nordic Light Properties intended to construct a 10-storey building with various commercial and residential land use rights.
Erf 82 had also indicated that such a development had the capacity of prejudicing it in the conduct of its letting enterprise, which the City of Joburg denied.
The fund explained that the City of Joburg’s approval of the rezoning application was prejudicial to it as it was to the previous owner and for the same reasons relied on by Erf 82.
During litigation in the South Gauteng High Court, Erf 82 discovered that the rezoning application had lapsed and in terms of the law it was deemed to have been refused and was therefore incapable of being approved.
The City of Joburg accepted that the rezoning application had lapsed but claimed Nordic Light Properties had reinstated it
In February last year, Judge Marcus Senyatsi dismissed the MEPF’s application for a declaratory order, finding that the fund had no locus standi (standing) to seek the order, alternatively, the reviewing and setting aside of the City of Joburg’s decision
The Supreme Court of Appeal also refused the MEPF’s application for leave to appeal Judge Senyatsi’s ruling in September last year.
The MEPF now wants the Constitutional Court to determine whether a purchaser of an immovable property, after registration of transfer of the property into its name, is permitted to continue, in its name, with litigation relating directly to the property and arising from the seller’s status as the owner of the property and which was instituted by the seller prior to the sale and transfer of the property.
According to the fund, the sale agreement expressly transfers the seller’s rights and interests in the outcome of the pending litigation to the purchaser upon substitution by a court order of the purchaser as the applicant in the place of the seller.
In addition, the MEPF stated that the substitution order was made litis contestatio (which means contested issues in the matter are submitted before the judicial officer to examine facts and decide before proceeding) before the pending litigation.
South Gauteng High Court Deputy Judge President Roland Sutherland granted the order to substitute Erf 82 with the MEPF.
In the pending litigation, the previous owner of the property (the seller – Erf 82 Bryanston) sought declaratory relief relating to the invalidity of, alternatively an order reviewing and setting aside, a constitutionally invalid decision by the local authority to approve the rezoning of a neighbouring property, which rezoning had the capacity to prejudice the rights of the seller as the owner of the property and, in the same way and on precisely the same basis, the rights of the purchaser of the property as the new owner of the property.
In its response, the City of Joburg states that the MEPF’s reliance on novation, cession and acquisition of Erf 82’s rights in the review application is misplaced and would result in a legally untenable situation.
”It is also worth mentioning, we submit, that as a result of the deed of transfer and the sale of the Nicolway shopping centre by Erf 82 in favour of the applicant (MEPF), Erf 82 has completely divested itself of any rights and/or interest in the claim,” the municipality told the Constitutional Court.
Nordic Light Properties, according to its court papers, said the MEPF is motivated by nothing more than its claim that the development of the adjacent property in accordance with the rights granted in the rezoning would disrupt traffic and cause congestion in the vicinity of the Nicolway shopping centre to the fund’s detriment.
“When the approval was given it obviously affected the rights of Erf 82 as owner of the shopping centre, or at least had the potential to do so, but the same cannot be said of the fund because it had no interest in the shopping centre when the city’s approval was given,” the company maintained.
The MEPF, which has nearly 30 000 members, is administered by Akani Retirement Fund Administrators, whose group chairperson is Zamani Letjane.
The apex court will hear oral arguments in the matter on November 18.