Uncertainty on future of DFA

 Since 1995 with its inception, the Development Facilitation Act (DFA) has become an important mechanism in the hands of Planners and the wider development community. Due to its peculiar procedures it was a major departure from the procedures of the different provincial Ordinances. Particularly the streamlined processes and set milestones made it a favourite amongst developers and consultants alike, in view of potentially quicker decisions. The most favoured feature however, was the ability to suspend the requirements of a host of other legislation, in the event of such procedures having a dilatory effect on the application for approval.

Not everybody took too kindly with the DFA and particularly Municipalities, who enjoyed great independence in decision making under the Ordinances, discovered that they have been reduced by the DFA to a mere supporting role player, while applications were processed by a provincially appointed Designated Officer and decided by an independent Development Tribunal. In this process the Municipalities could only provide comments, but after a decision was handed down, were forced to implement the decision regardless of its sentiments on the matter.

This potential conflict has since resulted in the DFA running into troubled waters, with the prospect of the Act being reduced to a part of history. It came in the form of the formal throwing down of the gauntlet by the City of Johannesburg Metro Municipality (CJMM), when on 16 August 2005 they declared that they will no longer recognise any decision taken by the Gauteng Development Tribunal (GDT) in terms of the Act, nor implement or process any such decision. With immediate effect the CJMM then withdrew from all DFA processes, did not comment on applications, did not attend hearings, did not give effect to decisions or recognised any Site Development Plans or building plans submitted pursuant to a GDT approval.

As one can imagine, this situation impacted severely on the actions by developers and consultants who had applications pending, following the expending of vast resources to lodge such application. Furthermore the action of CJMM was regarded by the industry as renegade and in conflict with national legislation and various voices went up to challenge the matter in court. According to Mr Ivan Pauw of Ivan Pauw & Partners, his client at the time gave him instruction to apply in the High Court for an order to compel the CJMM to comply with the relevant decision of the GDT. The matter was heard by the Transvaal High Court in October 2005, with the CJMM in opposition on the basis that the DFA has deprived the Municipality of their autonomy in decision making bestowed by Ordinance 15 of 1986 and the National Constitution. The finding of Judge J Rabie was that the DFA did confer appropriate powers upon the GDT to decide on these matters and that it was not unconstitutional. This finding was followed in February 2008 by a comprehensive and similar judgement by Judge J Gildenhuys of the High Court.

Following the last-mentioned judgement the CJMM noted an appeal to the Supreme Court of Appeal, on which Judge J A Nugent delivered a judgement in September 2009. The judgement that was handed down partly upheld the CJMM appeal and further determined that Chapters V and VI of the DFA are unconstitutional. However, this declaration was suspended for 18 months from the date upon which the Constitutional Court confirms the decision. An important proviso was that all decisions taken by the GDT until the Constitutional Court has confirmed (or rejected) the ruling will be valid and enforceable. The future of the DFA thus hinges on the final decision of the Constitutional Court on whether the legislation is indeed depriving municipalities of their autonomy.

Since the Constitution in Section 172(d) confers a right upon any person with sufficient interests, to appeal against an order of any other court, as could be expected, the property development industry rallied to oppose the matter in the Constitutional Court. This also included the Development Tribunals of most provinces, some metro municipalities, the DLA, SAPOA and various professional societies. On 24 and 25 February 2010 the Constitutional Court heard the case, but unfortunately time did not allow the matter to be concluded. The case was postponed to a future date when the hearing will resume, which has yet to be established.

The big question currently is: Where does all this now leave the property development community pending a final decision by the Constitutional Court?
• All applications before any Development Tribunal can proceed to be considered and if approved, must be executed by the relevant local authority;
• Even the CJMM is compelled to give execution to approved cases in their jurisdiction area;
• Any Designated Officer is obliged to accept new applications that are lodged and must proceed to process same and arrange for hearing dates;
• However, any application that is not finally decided by a Development Tribunal by the time that the matter is finally decided, will, in the event of the DFA being declared unconstitutional, be at risk.

In view of the above we cannot recommend to any client to use the DFA as planning mechanism from afresh, since no Development Tribunal can practically achieve a final decision within 6 months and it is quite conceivable that the matter could be heard and decided by the Constitutional Court before this time. We will further report on this matter as the saga unfolds. (This article is done with acknowledgement of Mr Ivan Pauw of Ivan Pauw & Partners, Attorneys & Conveyancers).