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[2014] ZAGPJHC 388
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Wynand N.O and Another v MEC for the Dept of Local Government And Housing of the Gauteng Province and Another (20291/2013) [2014] ZAGPJHC 388 (19 December 2014)
REPUBLIC
OF SOUTH AFRICA
GAUTENG
HIGH COURT
Johannesburg
Local Division
CASE
NO: 20291/2013
DATE:
19 DECEMBER 2014
In
the matter between:
Spies,
Ronald Wynand
N.O
......................................................................
1
st
Applicant
Lourens
Mathys Stephanus
N.O
.............................................................
2
ND
Applicant
The
Persons/Entities listed in Annexure “A” 3
RD
to
142 Applicants
And
The
MEC for the Dept of Local Government
And
Housing of the Gauteng
Province
...............................................
1
st
Respondent
The
City of
Johannesburg
.................................................................
2
nd
Respondent
JUDGMENT
Introduction
1.
Section
80 of the Local Government: Municipality Property Rates Act, 6 of
2004 (MPRA) provides:
“
(1)
The MEC for local government in a province may, on good cause shown,
and on such conditions as the MEC may impose, condone any
non-compliance with a provision of this Act requiring any act to be
done within a specified period or permitting any act to be
done only
within a specified period.
(2)
Non-compliance with section 21, 31 or 32 may not be condoned in terms
of subsection(1).
(3)
The powers conferred in terms of this section on an MEC for local
government may only be exercised within a framework
as may be
prescribed.
”
2.
The
Municipal Property Rates Regulations (the Regulations) were published
in Government Gazette No R1036 of 18 October 2006, where
the
framework referred to in s 80(3) of the MPRA was spelt out. It
provides,
inter
alia
:
“
(1)
An MEC for Local Government may, within the framework set out
hereunder, condone the non-compliance with a provision of the
Act
requiring any act to be done within a specified period or permitting
any act to be done only within a specified period, having
regard to:
(a)
The
fair and effective administration of the Act (good governance);
(b)
The
merits of each case (reasonableness);
(c)
The
institutional, financial and other matters having a bearing on the
capacity of the municipality to discharge its duties in relation
to
the implementation of the Act;
(d)
Whether
the municipality is progressively making improvements on matters of
compliance related to the meeting of timeframe in terms
of the Act,
including where applicable, the fulfilment of previously imposed
conditions by the MEC; or
(e)
Any
other matter that is considered relevant and is not inconsistent with
the provisions of the Act.”
3.
The
applicants invoked s 80 of the MPRA after failing to lodge an appeal
timeously in accordance with s 54(2) of the MPRA against
a decision
of the second respondent (the City) to place certain values on their
immovable property. In terms of s 54(2) of the
MPRA any person
affected by a decision of a municipal valuer may appeal against the
decision within thirty (3) days of receiving
written notice of the
decision, or within twenty-one (21) days after receiving reasons for
the municipal valuer’s decision
if the reasons were sought and
provided. The applicants failed to lodge their appeal within these
time-periods. They applied
to the MEC to condone this failing
of theirs. He decided not to accede to their request. They now seek
to have his refusal of their
application reviewed and set aside. They
also seek costs from any of the respondents that oppose the
application.
Background
facts
4.
The
applicants are all owners of nine erven and of the units constructed
on the erven. Ownership of the units has been divided amongst
them in
terms of a sectional title scheme they devised and registered. They
concluded an agreement with a hotel wherein they have
let their units
to the hotel, who in turn let it out to guests on a daily basis, and
pay them a share of the income it receives
from the guests. They are
thus lessors while the hotel is the lessee of the units and the
erven. The hotel conducts its business
under the name and style of
the Protea Hotel Parktonian All Suite (the hotel). It is part of the
Protea Hotel Group, which is a
well established brand operating
nationally.
5.
In
2008 the City issued a valuation roll (the valuation roll) in terms
of s 10 of the MPRA, which provides for the levying of rates
on
property in sectional title schemes. It placed certain values on each
of the units. The valuation roll was open for inspection
from 27
February 2008 to 27 May 2008. The valuations reflected on the roll
took effect on 1
July
2008 (the 2008 roll). The values attached to each are to a large
extent determinative of the rates that are payable in terms
of that
unit. The larger units comprising of 55m
2
were
valued at R530 000.00 and the smaller units comprising 51m
2
were valued at R500 000.00
6.
Objections
to the values placed on all the properties listed on the valuation
roll had to be lodged by 27 May 2008. None were received
with regard
to the valuations of the units.
7.
In
2009 the City issued a supplementary valuation roll (the
supplementary) in terms of s 77 (a) of the MPRA. This roll, too,
covered
the units. It placed certain values on each of the units. The
supplementary roll was open for inspection from 8 April 2009 to 27
May 2009. Objections to the values reflected on the supplementary
roll had to be lodged by 22 May 2009. The valuations reflected
on the
supplementary roll took effect on 1
May
2009 (the 2009 valuations).
8.
The
hotel, which it will be recalled is the tenant, was dissatisfied with
the valuations and on behalf of the applicants engaged
a firm of
professional valuers, Venter and Associates (Venter), on 12 February
2009 to value the units as well as lodge objections
to the 2008
valuations. These objections should have been lodged by 27 May 2008.
Venter lodged objections to the 2008 valuations
only on 22 May 2009.
Even then his objections did not differentiate between large and
small units. The objections were almost one
year late. However, it
was on the last day of the period allowed for the lodging of
objections for the 2009 valuations, i.e. in
terms of the
supplementary roll. Ten months later, on 31 March 2010, the City gave
notice to the hotel that its objections were
rejected. In the notice
the City informed the hotel that the objections were considered to be
against 2009 roll (i.e. the supplementary
roll). The notice further
informed the hotel that it had thirty (30) days from the date of the
notice to lodge an appeal in terms
of s 54(1) of the MPRA. The
applicants make great weight of the fact that the City read the
objections to be against the 2009 roll
and not against the 2008 roll
as they understood the case that Venter was supposed to have made,
though they concede that Venter
had not indicated that the objections
were against the 2008 roll.
9.
The
accountant of the hotel who deposed to the founding affidavit in this
matter avers that he telephonically instructed Venter
to lodge an
appeal against the notice. He claims that this telephonic instruction
was given within the thirty (30) day period allowed
for the lodging
of the appeal, but does not say exactly when this instruction was
given. Venter, he claims, did not execute this
instruction.
10.
In
about February 2012 the hotel decided to instruct its present
attorneys of record to “
expedite
the conclusion of the appeal
”.
The attorney only made contact with Venter two months later on 23
April 2012. Venter is said to have told him that he no
longer had the
file in his possession, but that he could try to obtain a copy of the
file from a Mr Minnaar (Minnaar) of the City.
The attorney was only
able to make contact with Minnaar on 21 June 2012. The attorney
contacted counsel on 2 August 2012, presumably
to get advice.
However, nothing was done until 12 December 2012 when by way of a
letter an application for condonation was made
to the MEC. In effect,
applicants allowed two years to pass before they realised that their
appeal had not been lodged by Venter
and that their attorney had
taken another year before he brought the application for condonation.
The
application to the MEC for condonation for failing to timeously file
their appeal
11.
The
letter sets out the history of the matter, (which is captured in the
paragraphs hereinbefore). It quotes sections of the MPRA
and claims
that the municipal valuer had valued the properties at R406 000.00,
and that the hotel had on 28 March 2012 engaged
a professional
valuer, Mr William Hewitt (Hewitt), who had placed a value of R350
000.00 on the large unit and a value of R330
000.00 on the small unit
as at 1 July 2007. On these bases the attorney claimed that the
hotel had good prospects of succeeding
with the appeal. Thus the
applicants claim that they have shown good cause and should therefore
succeed in their application for
condonation. They say, further, that
the factors identified in the framework
[1]
within
which the MEC should take her decision are not relevant to this
matter.
The
decision of the MEC
12.
On
30 May 2013 the MEC responded in writing to the application for
condonation. The MEC refused the application. The MEC deposed
to the
answering affidavit wherein she detailed her reasons for refusing the
application. She pointed out that she had examined
the reasons
furnished for failing to comply with the thirty (3) day time period,
and was concerned at the fact that the applicants
failed to explain
why it took them so long to find out that Venter was delinquent in
his duties towards them. She pointed out that
they did not furnish
any details as to why they failed to “follow up with Venter”,
either to check that the appeals
were lodged or to enquire as to the
progress of the appeals. Had they done this they would have
discovered soon enough that he
failed them. They took two years to
discover this basic fact, and given their failure to explain why they
themselves did not engage
with Venter all that time, she found their
explanation for the delay to be unreasonable. In this regards, she
reminded them that
during that period they would have been receiving
statements of account from the City and they would, or rather should,
have realised
that they were being charged rates calculated on the
amounts reflected on the 2008 roll. They paid these rates in that
time. The
MEC further pointed out that they failed to furnish her
with an explanation as to why it took them a further eight months
after
realising that no appeal had been lodged by Venter before they
sought condonation from herself. These no doubt are legitimate
concerns.
The MEC was certainly correct to raise them when
considering their application. In this regard she said that she found
their explanation
for such a lengthy delay to be unreasonable, and
that was one of the reasons why she refused the application.
13.
The
MEC went on to consider the prospects of the applicants succeeding in
their appeal should she grant their application for condonation.
She
examined each of the grounds they advanced for objecting to the
valuations placed on each of the units. Thus, she scrutinised
their
complaint that the units were categorised as “
business
”
when they should be categorised as “
residential
”,
and found that such categorisation did not affect the valuation as
reflected on the 2008 roll. She further considered their
complaint
that the valuation on that roll included the Value Added Tax (VAT)
and was, therefore, inflated by at least fourteen
percent (14%) and
found that the complaint lacked merit, since they concede in their
application for condonation that this ground
of objection was
incorrectly raised by Venter.
14.
The
MEC also filed an affidavit from a Mr Cornelius Minnaar, who is
employed by the City and who was asked by the MEC to respond
to the
allegations contained in the application for condonation. He
responded by furnishing the MEC with a note which, in essence,
spelt
out how the valuations of R500 000.00 and R530 000.00 as reflected on
the 2008 roll were arrived at. The note he provided
contained tables
of sales of similar units that took place during the 2005, 2006 and
2007 years. In the note provided, he also
indicated that other issues
were taken into account during the valuation process::
“
The
matter of VAT was not taken into consideration and it was admitted
that VAT was set at a zero rate.
It
was alleged that the units were refurbished and that each purchaser
paid R70,000 for refurbishment and that the movable property
(such as
furniture) belonged to the tenants. I therefore had a look at deeds
records where units were purchased through funding
from financial
institutions by way of bonds. In most cases the bond amount was equal
to the purchase price. This was the case with
unit 2305 which was
sold in May 2008 for R560,000 (bond amount R560,000 at ABSA bank),
unit 1815 (purchased June 2007 for R525,000
– bond R525,000
Standard Bank), unit 903 (purchased May 2008 for R530,000 –
bond R533,055 Nedbank), unit 1209 (purchased
February 2008 for
R535,000 – bond R602,969 Nedbank) and so on.
It
is a well-known fact that financial institutions only grant a bond
for the purchase of fixed property, and not to cover costs
for
moveable property. It is therefore safe to assume that the financial
institutions at that stage granted 100% bonds over these
units
because their bond originators and valuers were of the opinion that
the bond amount was equal to the market value of those
units, and
that the bank would be able to recover the loan amount in the event
that the unit had to be repossessed.
”
15.
The
MEC carefully considered the submission of Minnaar and came to the
conclusion that there was no prospect of the applicants succeeding
in
their appeal. Thus, upon finding that the delay of the applicants was
unreasonable and that the applicants have failed to demonstrate
that
they had any prospect of succeeding with their appeal, she refused
the application for condonation.
The
grounds for review raised by the applicant
16.
To
secure the relief they seek, the applicants rely upon and draw
specific reference to ss 6(2)(g) and 6(2)(h) of the
Promotion
of Administrative Justice Act, No 3 of 2000
(PAJA). Their reliance on PAJA is correct as it is the legislation
that gives effect to s 33 of the Constitution, which guarantees
that
all administrative action shall be treated lawfully, reasonably and
in a manner that is procedurally fair.
[2]
The
relevant sub-sections of PAJA read:
“
6(2)
A court or tribunal has the power to judicially review an
administrative action if-
...
(g)
the action concerned consists of a failure to take a decision
(h) exercise of the
power or the performance of the function authorised by the empowering
provision, in pursuance of which the
administrative action was
purportedly taken, is so unreasonable that no reasonable person could
have so exercised the power or
performed the function;
...”
17.
The
ground of review based on s 6(2)(g) of PAJA has fallen away as the
MEC had taken a decision. The only ground that is relied
upon then is
that the decision is “
so
unreasonable that no reasonable person
”
exercising the power to condone their late filing of their appeal
could have taken the decision the MEC took, which was
to refuse it.
18.
Section
80 of the MPRA confers upon the MEC a discretion to grant or refuse
an application for condonation. Read with s 6(2)(h)
of PAJA, which
has been invoked by the applicants on this matter, this discretion
has to be exercised reasonably.
19.
The
MEC’s conclusion that the delay was lengthy and the explanation
furnished for it was unreasonable is really unassailable.
The MEC was
not wrong to look into the length of the delay as well as the
explanation provided therefore. That she found the explanation
to be
lacking in substance is borne out by the evidence before her. The
framework impels the MEC to have regard to “
the
fair and effect administration of the Act
”
as well as “
the
institutional, financial and other matters having a bearing on the
capacity of the municipality
(the
City)
to
discharge its duties in relation to the implementation of the Act
(the
MPRA)
.
”
By scrutinising the delay caused by the applicants in prosecuting
their appeal, the MEC has, albeit not explicitly, effectively
carried
out her mandate as per the framework. A delay of such length as has
appeared in this case certainly impacts negatively
on the City’s
capacity to discharge its duties in relation to the implementation of
the MPRA, which includes its duty to
provide “
services
to communities in a sustainable manner.
”
[3]
Thus,
the delay is prejudicial to the City. There is a further
consideration which is of significance: which is that “
there
is a public interest element in the finality of administrative
decisions and the exercise of administrative functions.
”
[4]
To
recapulate: the MEC’s decision that the extensive delay and the
inadequate explanation for it “
was
unreasonable
”
is neither irrational, nor unreasonable.
20.
The
MEC’s rejection of the complaint that the 2008 roll incorrectly
categorised the units as business when they should
be
categorised as residential on the basis that it had no material
effect on the valuation is, too, neither irrational, nor
unreasonable.
The categorisation did not affect the valuation of the
units. The units were valued according to the price they could
command on
the open market as of the date of valuation. The
categorisation was merely descriptive. That is what the evidence
before the MEC
demonstrated. As for the valuations of the units as
reflected on the 2008 roll she was of the view, based on Minnaar’s
submission,
that they were not significantly outside the range of the
prices paid on the open market by some of the unit holders. The MEC’s
conclusion is supported by the evidence placed before her.
21.
Finally,
focus must not be lost of the fact that this is an application to
review the decision of the MEC. It is not an appeal against
her
decision. The test for review while significantly expanded over the
years is, nevertheless, narrower than that of an appeal.
An appellate
court or tribunal is concerned with the correctness of the decision
that forms the subject of its proceedings. A court
sitting in review,
on the other hand, is not concerned with the correctness of the
decision, but with its reasonableness. A review
court does not have
to share the conclusion arrived at by the body whose decision is
being impugned, but would, nevertheless, not
interfere with it if it
was a decision that a reasonable person in the position of the
decision maker would take. While examining
the question of
reasonableness of the decision it is important to scrutinise the
evidence placed before the decision maker, but
focus must not be lost
of the fact that the court is sitting in review and not in an appeal
of the decision.
[5]
Consequently,
I need not find that the decision of the MEC was correct, though in
this case I think it was, only that it was one
that no reasonable
person considering the application for condonation would have taken.
22.
For
these reasons, I conclude that the applicants have not demonstrated
that there is a reason for me to interfere with the MEC’s
decision.
Conclusion
and Costs
23.
The
application stands to be dismissed.
24.
Both
parties agreed that costs should follow the result.
The
order
25.
The
following order is made:
1
The
application is dismissed.
2
The
applicants are jointly and severally liable for the costs of the
application.
Vally
J
Gauteng
High Court, Johannesburg Local Division
Appearances:
For
the applicants : Adv H B Marais SC with Adv D S Hodge
Instructed
by : Shapiro-Aarons Inc
For
the respondents : Adv B Makola
Instructed
by : State Attorney
Dates
of hearing : 18 November 2014
Date
of judgment : 19 December 2014
[1]
See
para 2 above
[2]
Minister
of Health v New Clicks SA (Pty) Ltd and Others (Treatment Action
Campaign and Another as Amici Curiae)
2006
(2) SA 311
(CC) at [95]
[3]
Section
152(1)(c) of the Constitution. In fact the whole of s 152 of the
Constitution is relevant to a matter such as the present
as it
spells out what the objects of Municipalities, (like the City) are.
The MPRA is meant to and, in my view, does aim to,
give effect to
these objects.
[4]
Khumalo
and Another v Member of the Executive Council for Education: KwaZulu
Natal
2014
(3) BCLR 333
(CC) at [46].Compare:
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978 (1) SA 13
(A) at 41B.
[5]
See:
Carephone
(Pty) Ltd v Marcus NO and others
1999 (3) SA 304
(LAC) at [36];
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at
[44]
-
[45]