Bay Centre Investments (Pty) Ltd v The Town Council of Borough of Richards Bay

Supreme Court of Appeal -477/2003 Hearing date: 15 February 2005
Judgment date: 23 March 2005
Interpretation of an agreement - meaning and effect of the phrase 'from the date of completion' and of the words 'maintenance' and 'full liability' - whether obligation assumed by a Town Council towards a developer entailed maintenance in perpetuity and whether it related to the specific parking bays constructed by the developer on Town Council land in terms of the agreement.

Media Summary of Judgment

(1) The Supreme Court of Appeal today (23 March 2005) held that the Richards Bay Town Council was not obliged to rebuild certain parking bays it had destroyed to make way for a water feature pursuant to a town planning scheme.

(2) The SCA dismissed an appeal by a developer (Bay Centre) from the decision of the Natal Provincial Division of the High Court before Combrink J sitting with McClaren J and Hurt J. Originally, Bay Centre had obtained an order in the Durban High Court (before Levinsohn J) interdicting the Richards Bay Town Council (the Town Council) from destroying certain parking bays which Bay Centre had constructed on Town Council land pursuant to an agreement of sale between the parties. In terms of the sale, the Town Council sold a property to Bay Centre which the latter developed into a shopping centre. The agreement provided that the Town Council would be liable to maintain the parking bays constructed by Bay Centre in terms of the agreement.

(3) The dispute between the parties revolved around whether the obligation undertaken by the Town Council was to maintain the very same parking bays so constructed or whether it was only obliged to maintain the same number of parking bays constructed on council land. The dispute arose when the Town Council destroyed some of the bays so constructed in order to make way for a water feature and indicated its intention to destroy more of these bays for the same purpose.

(4) The SCA interpreted the agreement sale to mean that the Town Council was not obliged to maintain the same bays, but only the same number of bays. It also found that Bay Centre had failed to establish that the town council had breached the agreement thus construed. Consequently it agreed with the Natal Provincial Division that the interdict against the Town Council should be set aside. In the result, the appeal against the latter decision was dismissed with costs.