On appeal from the Superior Court, Appellate Division.
For affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For reversal -- None. The opinion of the Court was delivered by Garibaldi, J.
[99 NJ Page 439] The issue here is whether a municipality may correct a defective ordinance by retroactively enacting another ordinance
that by its terms, interferes with contract rights established during the period between the defective and retroactive ordinances. The Appellate Division held that since there was no rational public purpose to support the retroactive provisions of the ordinance, it was invalid and of no force and effect. Based upon a dissent in the Appellate Division, the municipality appealed to this Court as a matter of right pursuant to Rule 2:2-1(a)(2).
South Hamilton Associates (South Hamilton) is the owner of a multi-family apartment building comprised of sixty-eight residential apartment units, located in Morristown, New Jersey. The Town Council of the Town of Morristown (Council) is the governing body of Morristown, organized and existing pursuant to the provisions of Title 40 of the New Jersey Statutes.
Three ordinances are involved in this case. Ordinance No. 0-33-81 (first ordinance) was adopted by the Council on November 24, 1981.*fn1 This vacancy decontrol ordinance provided that upon the voluntary vacation of a residential apartment, the apartment, subject to the landlord's application to and approval by the Division of Rent Leveling, would be exempt from rent control for the new tenant's initial term. All the Council members except Councilman Barber voted for the adoption of the first ordinance.
On March 25, 1982 the Council attempted to repeal the first ordinance by adopting Ordinance No. 0-4-82 (second ordinance).*fn2 Pursuant to the second ordinance, Morristown would
no longer have had vacancy decontrol. The effective date of the second ordinance was March 12, 1982, one day after its first reading.
The entire Council was present for the first reading of the second ordinance.*fn3 At the second reading, only five of the seven Council members were present. Three voted for the ordinance, one voted against it, and one abstained.*fn4 The Council incorrectly believed and represented that the second ordinance had been duly adopted, and it caused the ordinance to be published.
Morristown is a Faulkner Act, Plan F Municipality (N.J.S.A. 40:69A-74) and as such is governed by N.J.S.A. 40:69A-180(a), which provides
Council shall determine its own rules of procedure, not inconsistent with ordinance or statute. A majority of the whole number of members of the council shall constitute a quorum, but no ordinance shall be adopted by the council without the affirmative vote of a majority of all the members of the council. [Emphasis added.]
Since a majority of the members of the Council did not vote for the adoption of the second ordinance, the Council now concedes that the March 25, 1982 vote resulted in the defeat of the second ordinance and the continued effectiveness of the first ordinance. Thus, there is no issue before us as to the invalidity of the second ordinance.
On October 14, 1982, the Council successfully repealed the first ordinance (the vacancy decontrol ordinance) by adopting Ordinance No. 0-25-82 (third ordinance), which provides in pertinent part:
WHEREAS, Ordinance No. 0-33-81 was adopted by the Town Council on the 24th day of November, 1981, and took effect December 3, 1981, and under the present circumstances it is in the best interests of all the citizens of the Town of Morristown to repeal vacancy [rental] decontrol.
BE IT ORDAINED by the Council of the Town of Morristown . . . that Ordinance 0-33-81 is repealed effective as of March 12, 1982.
SECTION I. Chapter 164, Section 3 of the Code of the Town of Morristown shall be amended by the deletion of the following:
SECTION II. Upon taking effect, this ordinance shall be retroactive to March 12, 1982. The allowable rent for any apartment becoming vacant on or after March 12, 1982, shall be the rent permitted pursuant to Chapter 164 of the Code of the Town of Morristown [i.e., the general rent control ordinance] excluding § 164-3C thereof dealing ...