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[2016] ZASCA 117
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Breakers Share Block Limited v Ethekwini Municipality (804/2015) [2016] ZASCA 117 (14 September 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case
No: 804/2015
In
the matter between:
BREAKERS
SHARE BLOCK LIMITED
APPELLANT
and
THE
eTHEKWINI
MUNICIPALITY
RESPONDENT
Neutral
citation
:
Breakers
Share Block Limited v Ethekwini Municipality
(804/2015)
[2016] ZASCA 117
(14
September 2016)
Coram
:
Mpati
AP, Shongwe, Swain and Mocumie JJA and Potterill AJA
Heard
:
31 August 2016
Delivered:
14
September 2016
Summary:
Local
Government: Municipal Property Rates Act 6 of 2004
:
Sections 49
and
78
(2): adequacy of notice of supplementary valuation: notice
substantively compliant with Act.
ORDER
On
appeal from:
KwaZulu-Natal
Local Division, Durban
(Nkosi
AJ sitting as court of first instance).
The
appeal is dismissed with costs, such costs to include the costs of
two counsel where employed.
JUDGMENT
Swain
JA
(Mpati
AP, Shongwe and Mocumie JJA and Potterill AJA concurring):
[1]
The
appellant, Breakers Share Block Limited, leases an immovable property
described as Erf 1066 of Umhlanga Rocks, from the respondent,
the
Ethekwini Municipality. The appellant erected an apartment block on
the property, comprising apartments used in conjunction
with a
conventional share block scheme and others in terms of a time share
scheme. In terms of the long term lease the appellant
is obliged to
pay the respondent the rates levied by the respondent, in respect of
the property, in terms of the Local Government:
Municipal Property
Rates Act 6 of 2004 (the Rates Act).
[2]
A
dispute arose between the parties when the respondent determined that
for the purpose of calculating the rates payable on the
property by
the appellant, it should fall within the category ‘business and
commercial’ as defined in the respondent’s
rates policy
which was effective for the respondent’s 2013/2014 financial
year. In previous years the property had been categorised
as
‘residential’.
[3]
By
virtue of the fact that business and commercial properties are rated
by the respondent at a greater amount per rand of valuation
than
residential properties, the result was that the amount of the rates
payable by the appellant, almost doubled.
[4]
Aggrieved
at this outcome the appellant launched an application before the
KwaZulu-Natal Local Division, Durban (Nkosi AJ) in which
a
declaratory order was sought, that the property fell within the
residential category of properties, as defined in terms of the
respondent’s rates policy. A further order, sought in the
alternative, was that the notice dated 19 September 2013 addressed
by
the respondent to the appellant in terms of s 49(1)
(a)
read
with s 78(2) of the Rates Act, to notify the appellant of the
re-categorisation of the property, was invalid and of no force
and
effect.
[5]
The
court a quo decided the matter on the basis of a point in limine
raised by the respondent, namely that the appellant had failed
to
exhaust the internal remedies available to it in terms of the Rates
Act, before launching the application. The respondent alleged
that
the appellant was entitled to lodge an objection in terms of s
50(1)
(c)
of
the Rates Act with the Municipal Manager of the respondent, against
the changed categorisation of the property. If dissatisfied
with the
outcome of this procedure, the appellant was entitled to appeal to
the Valuation Appeals Board, in terms of s 54 of the
Rates Act. The
court a quo accordingly dismissed the application with costs and
thereafter granted leave to the appellant to appeal
to this court.
[6]
On
appeal before us the appellant, however, restricted its challenge
solely to the alternative relief claimed, namely that the notice
in
question did not comply with the requirements of s 49(1)
(a)
read
with s 78(2) of the Rates Act. It was submitted that the notice was
invalid, of no force and effect and the respondent was
precluded from
demanding increased rates based upon it.
[7]
Section
49 of the Rates Act provides as follows:
‘
(1)
The valuer of a municipality must submit the certified valuation roll
to the municipal manager, and the municipal manager must
within 21
days of receipt of the roll –
(a)
publish
in the prescribed form in the
Provincial
Gazette
,
and once a week for two consecutive weeks advertise in the media, a
notice -
(i)
stating that the roll is open for public inspection for a period
stated in the notice, which may not be less than 30 days from
the
date of publication of the last notice; and
(ii)
inviting every person who wishes to lodge an objection in respect of
any matter in, or omitted from, the roll to do so in the
prescribed
manner within the stated period;
(b)
disseminate
the substance of the notice referred to in paragraph
(a)
to
the local community in terms of Chapter 4 of the Municipal Systems
Act; and
(c)
serve,
by ordinary mail or, if appropriate in accordance with section 115 of
the Municipal Systems Act, on every owner of property
listed in the
valuation roll a copy of the notice referred to in paragraph
(a)
together
with an extract of the valuation roll pertaining to that owner’s
property.
(2)
If the municipality has an official website or another website
available to it, the notice and the valuation roll must also
be
published on that website.’
[8]
The
relevant provisions of s 78(2) of the Rates Act provide that in the
case of a supplementary valuation (as in the present case)
the
provisions of s 49 inter alia are applicable ‘read with the
necessary changes as the context may require’.
[9]
The
notice in question read as follows:
‘
Section
49 Notice in respect of the Municipal Property Rates Act of 2004:
35760104
Dear
Property Owner
This
notice is served to you under the requirements of Section 49 of the
Municipal Property Rates Act of 2004. The purpose of this
notice is
to advise you of the valuation placed on the above mentioned property
as at 01 July 2012 as determined during the FIFTH
Supplementary
Valuation conducted under the provisions of the Municipal Property
Rates Act of 2004.The details of this, as per
the Valuation Roll, are
as follows:
Property
Description
ERF
1066 of UMHLANGA ROCKS
Address
88
LAGOON DRIVE, UMHLANGA
Usage
23
– Furnished Accommodation
Category
5
– Business & Commercial
Extent
(m²)
13903.00
Rate
Number
35760104
Subcode
000
Market
Value
238,900,000.00
Exemptions
Rebates
Phasing
In
Exclusions
Set
out below is a copy of the notice which was published on 20
th
September 2013.
“
Notice
is hereby given in terms of Section 49(1)(a)(i) read together with
section 78(2) of the Local Government: Municipal Property
Rates Act,
2004 (Act No. 6 of 2004), hereinafter referred to as the “Act”,
that the Fifth Supplementary Valuation roll
(GV 2012) for the
financial years 01 July 2012 to 30 June 2016 is open for public
inspection at the office of the Municipal Manager,
Valuation Roll,
13th Floor, 75 Dr Langalibalele Dube (Winder Street), Durban and the
Sizakala Customer Centres during office hours
07:30 to 16:00 from 20
September 2013 to 31 October 2013.
In
addition the General Valuation Roll is available at website:-
www.durban.gov.za
.
An
invitation is hereby made in terms of section 49(1)(a)(ii) read
together with section 78(2) of the Act that any owner of property
or
other person who so desires may lodge an objection with the municipal
manager in respect of any matter reflected in, or omitted
from, the
Fifth Supplementary Valuation Roll within the abovementioned period.
Attention is specifically drawn to the fact that
in terms of section
50(2) of the Act an objection must be in relation to a specific
individual property and not against the valuation
roll as such. The
form for lodging of an objection is obtainable at the following
address:-Valuation Roll, Real Estate Unit, 13th
Floor, 75 Winder
Street, Durban or the Sizakala Customer Centres and Website:-
www.durban.gov.za
The
completed forms must be returned to the following address: The
Municipal Manager, eThekwini Municipality, Valuation Roll, 13th
Floor, 75 Dr. Langalibalele Dube Street (Winder Street), Durban,
4000. Completed forms can also be handed in at The Sizakala Customer
Centres where they will be captured “on-line”.’
[10]
It
is quite clear that the notice contains what is required in terms of
s 49(1)
(c)
of
the Rates Act. A copy of the notice referred to in s 49(1)
(a)
is
also included, stating that the valuation roll is open for public
inspection, as well as the details of when and where it may
be
inspected. An invitation is also extended to any person who wishes to
lodge an objection, together with how and where to do
so. In
addition, the notice contains an extract of the valuation roll
pertaining to the appellant’s property.
[11]
Counsel
for the appellant, however, submitted that because the introductory
paragraph to the notice stated that the ‘purpose
of this notice
is to advise you of the valuation placed on the above mentioned
property as at 1 July 2012’, the reader’s
attention was
only drawn to the market value of the property, reflected in the
table. It is, however, quite clear that the ‘category’
of
the property is described as ‘5 – Business &
Commercial’ and ‘Usage’ is described as ‘23
–
Furnished Accommodation’. Both aspects are displayed with equal
prominence to that of ‘market value’
in the table.
[12]
When
regard is had to the fact that the whole basis for the appellant’s
complaint was that the category into which the property
was placed
should have been ‘residential’ (as had previously been
the case) and not ‘business and commercial’,
there is no
basis for the submission that the notice did not clearly and
adequately convey to the appellant, this change. Counsel
for the
appellant submitted that the change in the categorisation of the
property should have been expressly drawn to the appellant’s
attention. The enquiry, however, is whether the notice substantively
complied with the requirements of s 49. In my view, it did.
[13]
An
additional submission made by counsel for the appellant was that the
provision in s 78(2) of the Rates Act, that the same notice
requirements in the case of a supplementary valuation, as in the
original valuation had to be adhered to ‘with the necessary
changes as the context may require’ meant that a change in any
aspect of the valuation of the property, had to be expressly
brought
to the attention of the ratepayer. The ‘necessary changes’
in context, simply means those changes which are
necessary to
indicate that what is being published is a supplementary valuation.
[14]
In
the result the appeal must accordingly fail. The following order is
made:
The
appeal is dismissed with costs, such costs to include the costs of
two counsel where employed.
K G
B Swain
Judge
of Appeal
Appearances:
For
the Appellant:
C J Pammenter SC (with M B
Pitman)
Instructed
by:
Tomlinson
Mnguni James, Umhlanga
Claude
Reid Inc, Bloemfontein
For the
Respondents:
V I Gajoo SC (with G D Goddard SC)
Instructed
by:
Gcolotela
& Peter Inc, Durban
Lovius
Block, Bloemfontein