Durban Point developer sues water sports clubs for millions in damages

2017-10-06 20:32
Durban. (Duncan Alfreds, News24)

Durban. (Duncan Alfreds, News24)

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Durban - The Durban Point Development Company (DPDC), which has gone to court to evict two water sports clubs accusing them of standing in the way of a R35bn upgrade of the harbour-mouth area near Vetch's beach, has turned up the legal heat and issued a summons for "special" damages of more than R12m from the clubs.

On top of this, the company is also seeking an order that the clubs - the Point Yacht Club and the Durban Paddle Ski Club - collectively pay it about R9m a month from January next year if the eviction matter drags on. 

The summons was issued out of the Durban High Court this week.

In it, the company says it is the owner of the property on which the two clubs are situated.

"The said occupation has been, and is, against the will of the company….their occupation without a legal right ... is a wrongful act which entitles us to claim damages."

The summons says the two clubs know that the company wants to proceed with the Point development and with the extension of the beachfront promenade "which is a vital initiating component" of the further extension of the area.

"The occupied portions are situated within the development area and vacant possession is required.

"Any delay will cause the company special damages in at least the amounts equivalent to the inflationary increases in construction costs."

The summons notes that the company has applied for the eviction of the two clubs but they are opposing this and the matter is expected to be argued in the Durban High Court at the end of this month.

"Having regard to this date and allowing a reasonable time for the delivery of a judgment and the advent of builders holidays from about December 15 to about January 15 2018 (assuming that the clubs vacate the property during that period), the delay, already occasioned by their actions, will be from when construction was due to start on August 30, 2017 until at least January 15, 2018.

Sticking to a 'memorandum of understanding'

"In the event that they do not vacate - by reason of any pending appeal - then special damages will extend beyond such date until the date they actually do vacate."

The clubs have 10 days to file notices of opposition.

In its eviction application, the company - which is half owned by the eThekwini Municipality and half by a Malaysian Consortium - says the refusal by the two clubs to leave the premises would cost R37m a year - or about R100 000 a day.

On top of that, the roll-out of the entire 15-year R35bn project would be delayed, eroding investor confidence.

Project manager Soban Gangaraju said the promenade development would include accommodation for the water sports clubs, but only two - the Durban Undersea Club and the Durban Ski Boat Club - agreed to move into temporary premises while it was being constructed.

The dispute has a long history which is now coming to a head through the legal action, behind-the-scenes negotiations and arbitration through which the four clubs are seeking to resolve their differences over how their clubs will function in future.

The clubs claim they are not anti-development, but want the company to stick to a "memorandum of understanding" which promised them autonomy and a new clubhouse in terms of a freehold agreement.

'Committed to finding a solution'

A source, who did not wish to be named, said there were ongoing negotiations between all parties which, if successful, would mean all the litigation would fall away.

Attorney Andrew Donnelly, who acts for the Point Yacht Club, said the background is that in 2008 a formal written agreement was reached with the developer on the Point Precinct in terms of which all the water sports clubs would relocate and would acquire a title for a new combined clubhouse.

"However, the developer no longer recognises this agreement and seeks to relocate the clubs to a new venue and to charge them in addition, commercial lease rates.

"The club does not believe that this is a fair outcome or that [the] 2008 agreement is invalid. It resists its eviction on this basis. All issues are to be determined in a court hearing set for 26th and 27th October."

With regards to the summons, he said the attitude of the club is that there is no legal basis for the claim. 

"The club is entitled and is exercising its legal rights to uphold a written agreement between the parties. The claim will therefore be opposed. The club remains committed to finding a solution that is fair to its members and the developer, and takes into account the 2008 agreement."

Attorney Ewan Cameron for the Paddle Ski Club, said there were three matters pending before the high court.

"We are of the view that the summons received cannot be dealt with in isolation and independently from these actions. Our clients deny any wrongdoing or unlawful activity on their part."

Read more on:    durban  |  courts

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