Durban - The operators of the Ark shelter in Durban are suing eThekwini Municipality for more than R500 million in damages, claiming it failed to find them an alternative location for its church and facility for the homeless.
The Ark occupants were evicted in May 2004 to make way for commercial, entertainment and residential development in the Point precinct.
However, the empty building is still standing 10 years later.
The municipality is opposing the claim for damages and denies that it breached its contract with the non-profit organisation.
The city argues that the Ark was not entitled to the R500m, the additional R10.8m set-up costs and the accumulated interest.
The matter is to be set down for trial in the Durban High Court.
According to court papers, the Ark had entered into an agreement with the city in 1999 which stated that the city would identify, secure and provide an alternative building and site suitable for the organisation’s relocation.
This was apparently supposed to be done in consultation with the Ark and within a “reasonable” period because the city had plans to develop the area.
According to its court papers, the Ark had to undergo an accreditation process by what is now the KwaZulu-Natal Department of Human Settlements.
This was to establish whether the Ark Christian Ministries Church was capable of meeting the immediate and future needs of the homeless, sick and unemployed as well as the necessary infrastructure.
The process was also to determine whether the Ark was eligible for public grant funding from the department of more than R10.8m.
According to the Ark, the accreditation process was approved in 2001.
This funding was for the relocation and establishment costs of the infrastructure that was necessary to provide for all the needs of the trustees, management, staff, volunteers and 900 homeless and socially excluded people who would be relocated once a suitable site had been identified.
The Ark claimed that the grant due to it was paid by the department into the municipality’s housing account in May 2001, and would be released to them with accrued interest when suitable premises were identified.
The city and the organisation could not agree on the premises and the Ark claims that the cause of the delay was the inactions of the municipality.
It felt the city was not committed to the relocation process and was “misleading” the organisation.
These “inactions”, it claimed, were a breach of contract and had caused damage to the organisation.
The damages due to the municipality’s “neglect to obtain a suitable property” amounted to R500m, it said, and was calculated “bearing in mind the availability of suitable premises to be obtained at present reasonable and fair prices and the current value of property in the eThekwini municipal region and specifically in the area of the Durban harbour and the Point”.
The Ark also wants damages “due to the neglect of the (city) to make provision for the timeous and appropriate release” of the R10.8m due plus interest - more than R28.3m.
In response, the municipality has called for the claim to be dismissed. It argues that the Ark failed to institute legal proceedings to enforce this obligation within the three-year prescribed period. The claim had therefore lapsed.
The municipality said the Ark and the department had entered into an agreement for the provision of funding to buy alternative accommodation.
It said the department had: appointed the city as its agent to facilitate the location of suitable premises; instructed parties to assist the Ark in finding possible sites for relocation; and for receipt of funding to be released to the Ark.
It contended that when the Ark signed a purchase and sale agreement, it would release the funds to the organisation.
The municipality denied all the allegations against it and argued that the Ark was not entitled to the amounts claimed. The city also tried unsuccessfully to come to an out-of-court settlement with the non-profit organisation.
Daily News