THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 517/2022
In the matter between:
THE MUNICIPAL MANAGER:
THE CITY OF JOHANNESBURG
METROPOLITAN MUNICIPALITY FIRST APPELLANT
THE CITY OF JOHANNESBURG
METROPOLITAN MUNICIPALITY SECOND APPELLANT
JOHANNESBURG WATER (SOC) LIMITED THIRD APPELLANT
and
SAN RIDGE HEIGHTS RENTAL
PROPERTY (PTY) LTD RESPONDENT
Neutral citation: The Municipal Manager: The City of Johannesburg
Metropolitan Municipality and Others v San Ridge Heights
Rental Property (Pty) Ltd (517/2022) [20 23] ZASCA 109
(11 July 2023)
2
Coram: NICHOLLS, CARELSE, MABINDLA-BOQWANA, WEINER and
MOLEFE JJA
Heard: 11 May 2023
Delivered: This judgment was handed down electronically by circulation to the
parties’ legal representatives by email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is deemed to be at
11h00 on 11 July 2023.
Summary: Administrative action – review of the decision to classify property in
terms of s 74(1) of the Local Government: Municipal Systems Act 32 of 2000 as a
multi dwelling for sewer and sanitation purposes under the Promotion of
Administrative Justice Act 3 of 2000 (PAJA) – no reasons provided for
administrator’s decision in terms of s 5 of PAJ A – remittal of decision for
reconsideration.
3
ORDER
On appeal from: Gauteng Division of the High Court, Johannesburg (Strydom J,
sitting as a court of first instance):
1 The appeal is upheld, to the limited extent indicated below.
2 Paragraph 2 of the order of the court a quo is set aside and replaced with the
following:
‘The matter is remitted to the second and /or third respondents to
reconsider their classification of Erf 827 Erand Gardens, Ext 36 Township,
held by Certificate of Consolidated Title T1100883/2016, in terms of the
second respondent’s tariff policy under s 74(1) of Act 32 of 2000.’
3 Each party is to pay its own costs in the appeal.
JUDGMENT
Carelse JA ( Nicholls, Mabindla -Boqwana, Weiner and Molefe JJA
concurring):
[1] This appeal is against the judgment and order of the Gauteng Division of the
High Court, Johannesburg, per Strydom J (the high court), in terms of which the high
court granted an order in the following terms:
4
‘1. The decision of the second and/or third respondent to classify Erf 827 Erard (sic) Gardens,
Ext 36 Township, held by Certificate of Consolidated Title T1100883/2016, (“the property”) as a
“multiple dwelling”, taken in terms of the second respondent’s tariff policy under section 74(1) of
Act 32 of 2000 (“the Act”) and/or the second respondent’s tariff resolution under section 75(a)(ii)
of the Act is reviewed, declared invalid and set aside.
2. The decision in paragraph 1 is substituted with a decision that the property is classified as
“blocks of flats” in terms of the second respondent’s tariff policy and/or tariff resolution referred
to above.
3. The respondents are ordered to pay the applicant’s costs, including the costs of two counsel
where so employed.’
[2] The Municipal Man ager of the City of Johannesburg Me tropolitan
Municipality is the f irst appellant (the municipal manager ). The City of
Johannesburg Metropolitan Municipality is the second appellant (the City ).
Johannesburg Water (SOC) Limited (Johannesburg Water), the third appellant, is
the agency responsible for providing water and sanitation services to the residen ts
of Johannesburg and collecting charges on behalf of the City). The respondent, San
Ridge Heights Rental Property (Pty) Ltd (San Ridge) is the owner of immovable
property described as Erf 827, Erand Gardens in Gauteng measuring 5,2929
hectares, known as San Ridge Heights. The property was purchased from Zotec
Developments (Pty) Ltd (Zotec), a property development company.
[3] The facts are lar gely common cause. San Ridge Heights consists of 42
buildings on a single erf (erf 827). Each of the 42 buildings is a multi-storey building
with eight separate flats. In total, there are 470 flats on the erf. Each block has its
own communal entrance, except the ground floor units which have direct access to
the ground level.
5
[4] The City and/or Johannesburg Water provide both sewerage and sanitation
services to San Ridge Heights. The City and /or Johannesburg Water charge San
Ridge for sewerage and sanitation services in terms of its tariff policy , which is
adjusted annually. The tariff policy sets out the charges payable by property owners
for sewerage and sanitation services for different categories of property. The tariff
policy distinguishes between different categories/classification of property, namely,
a dwelling unit,1 a multi dwelling,2 and a flat.3 The charges a property owner pays
for sewerage and sanitation services is based on the category/classification that the
property is assigned.
[5] The City and/or Johannesburg Water classified San Ridge Heights under the
category ‘multi dwelling’, which attracts a tari ff of R41 6.47 per month , per unit
effective 1 July 2019. Zotec, the previous owner of San Ridge Heights, lodged an
internal appeal, in terms of s 62 of the Local Government: Municipal Systems Act
32 of 20004 (Municipal Systems Act) against the City and/or Johannesburg Water’s
1 Dwelling unit is defined in the tariff policy as ‘one or more rooms including a kitchen/s designed as a unit for
occupancy for the purpose of cooking, living and sleeping which includes nearby outbuildings, sheds and granny flats
within the curtilage of the property excluding multi dwellings and flats’.
2 Multi dwelling is defined as ‘any arrangement of premises that comprises more than one dwelling unit including
semi-detached houses, simplex units, townhouses and any other arrangement of residential premises excluding a block
of flats’.
3 Flat is defined as ‘a dwelling unit set aside in a single multi-storey building on a single erf with a communal entrance
to the building, which building comprises more than one dwelling unit; and where the rates valuation does not exceed
R700,000.00’.
4 Section 62 of the Municipal Systems Act provides:
‘(1) A person whose rights are affected by a decision taken by a political structure, political office bearer, councillor
or staff member of a municipality in terms of a power or duty delegated or sub-delegated by a delegating authority to
the political structure, political office bearer, councillor or staff member, may appeal against that decision by giving
written notice of the appeal and reasons to the municipal manager within 21 days of the date of the notification of the
decision.
(2) The municipal manager must promptly submit the appeal to the appropriate appeal authority mentioned in
subsection (4).
(3) The appeal authority must consider the appeal, and confirm, vary or revoke the decision, but no such variation or
revocation of a decision may detract from any rights that may have accrued as a result of the decision.
(4) When the appeal is against a decision taken by-
(a) a staff member other than the municipal manager, the municipal manager is the appeal authority;
(b) the municipal manager, the executive committee or executive mayor is the appeal authority, or, if the municipality
does not have an executive committee or executive mayor, the council of the municipality is the appeal authori ty; or
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decision to classify San Ridge Heights as a ‘multi dwelling’. The notice of appeal
and a subsequent follow-up letter to the City and/or Johannesburg Water was simply
ignored. Dissatisfied with this classification, San Ridge contends that its property
should fall under the category/classification of ‘blocks of flats’ and the tariff should
be R250.00 per month, per unit.5
[6] In a letter dated 17 October 2019, Zotec informed the City and/or
Johannesburg Water that if it did not receive a response to its notice of appeal it ‘will
be forced to assume that [its] appeal has be en unsuccessful’. As a result of the
incorrect tariff, it has suffered a loss of R 950 876. 64 per year and its ability to
provide low cost rental-housing has been adversely affected. To date, San Ridge has
not received a response from the City and/or Johannesburg Water.
[7] On 18 May 2020, San Ridge instituted review proceedings in terms of the
Promotion of Administrative Ju stice Act 3 of 2000 (PAJA), a lternatively on the
grounds of legality. It submitted that the City and/or Johannesburg Water did not
comply with s 5 of PAJA to the extent that it did not provide reasons for its decision
to classify San Ridge Heights as a ‘multi dwelling’ . San Ridge relied on the
following grounds of review: ss 6(2)(c), 6(2)(e)(iii), 6(2)(e)(vi) and 6(2)(i) of PAJA.6
(c) a political structure or political office bearer, or a councillor-
(i) the municipal council is the appeal authority where the council comprises less than 15 councillors; or
(ii) a committee of councillors who were not involved in the decision and appointed by the municipal council for
this purpose is the appeal authority where the council comprises more than 14 councillors.
(5) An appeal authority must commence with an appeal within six weeks and decide the appeal within a reasonable
period.
(6) The provisions of this section do not detract from any appropriate appeal procedure provided for in any other
applicable law.’
5 See clause 2 (sewerage and sanitation charges) of the draft rates and tariffs issued by the Council of the City of
Johannesburg Metropolitan Municipality (1 July 2019 – 30 June 2020).
6 Sections 6(2)(c), 6(2)(e)(iii), 6(2) (e)(vi) and 6(2)(i) of PAJA provide that ‘[a] court or tribunal has the power to
judicially review an administrative action if . . . the action was procedurally unfair’; ‘the action was taken . . . because
irrelevant considerations were taken into account or relevant considerations were not considered; . . . or arbitrarily or
capriciously’; or ‘the action is otherwise unconstitutional or unlawful’.
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[8] On 22 June 2020, the Municipal Manager, the City and Johannesburg Water
filed t heir notice of int ention to oppose . They only filed the rule 53 record on
26 August 2020. On 18 May 2022, the high court found in favour of San Ridge in
terms of the order mentioned above . Leave to appeal to this Court was granted by
the high court.
[9] The record consisted of documents of the mayoral committee dated 6 March
2019, the planning scheme, the Land Use Scheme, the property rates policy for the
period 2018/2019, 2019/2020, the Local Government: Municipal Systems Act 32 of
2000 and Local Government: Municipal Property Rates Act 6 of 20 04. The City
and/or Johannesburg Water do not deny that the record filed does not relate to the
decision and/or reasons to classify San Ridge Heights as a ‘multi dwelling’.
[10] It is common cause that the decision by the City and/or Johannesburg Water
amounts to administrative action and is subject to review un der PAJA. The City
and/or Johannesburg Water concede that San Ridge’s case is not an attack on the
validity of the tariff policy, but on its decision to classify the property as a ‘multi
dwelling’. In sum, San Ridge’s review challenge is premised on the implementation
of the City’s tariff policy and not the tariff policy itself.7
[11] Section 7 of PAJA provides:
7 See Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others [2005] ZASCA 43; [2005]
3 All SA 33 (SCA); 2005 (6) SA 313 (SCA) para 24, which reads:
‘Whether particular conduct constitutes administrative action depends primarily on the nature of the power that is
being exercised rather than upon the identity of the person who does so. Features of administrative action (conduct of
“an administrative nature”) that have emerged from the construction that has been placed on s 33 of the Const itution
are that it does not extend to the exercise of legislative powers by deliberative elected legislative bodies, nor to the
ordinary exercise of judicial powers, nor to the formulation of policy or the initiation of legislation by the executive,
nor to the exercise of original powers conferred upon the President as head of state. Administrative action is rather, in
general terms, the conduct of the bureaucracy (whoever the bureaucratic functionary might be) in carrying out the
daily functions of the State which necessarily involves the application of policy, usually after its translation into law,
with direct and immediate consequences for individuals or groups of individuals.’
8
‘(1) Any proceedings for judicial review in terms of section 6(1) must be instituted without
unreasonable delay and not later than 180 days after the date-
(a) subject to subsection (2) (c), on which any proceedings instituted in terms of internal
remedies as contemplated in subsection (2)(a) have been concluded; or
(b) where no such remedies exist, on which the person concerned was informed of the
administrative action, became aware of the action and the reasons for it or might reasonably have
been expected to have become aware of the action and the reasons.
(2)(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms
of this Act unless any internal remedy provided for in any other law has first been exhausted.
(b) Subject to paragraph (c), a court or tribunal must, if it is not satisfied that an y internal
remedy referred to in paragraph (a) has been exhausted, direct that the person concerned must first
exhaust such remedy before instituting proceedings in a court or tribunal for judicial review in
terms of this Act.
(c) A court or tribunal may, in exceptional circumstances and on application by the person
concerned, exempt such person from the obligation to exhaust any internal remedy if the court or
tribunal deems it in the interest of justice.
(3) The Rules Board for Courts of Law established by section 2 of the Rules Board for Courts
of Law Act, 1985 (Act 107 of 1985), must, before 28 February 2009, subject to the approval of the
Minister, make rules of procedure for judicial review.
(4) Until the rules of procedure referred to in subsection (3 ) come into operation, all
proceedings for judicial review under this Act must be instituted in a High Court or another court
having jurisdiction.
(5) Any rule made under subsection (3) must, before publication in the Gazette, be approved
by Parliament.’
[12] The following facts are not disputed: Zotec and San Ridge exhausted all
internal remedies before launching the review application (this allegation is met with
a bald denial); and the review application was launched timeously. More
importantly, after both Zotec and San Ridge had sent numerous letters to the City
and/or Johannesburg Water, and even after the launch of an internal appeal, they did
9
not provide any reasons for their decision to classify San Ridge Heights as a
‘multi dwelling.’ To put it bluntly, the City and /or Johannesburg Water have simply
ignored all attempts by San Ridge to obtain reasons for their decision.
[13] Section 33(2) of the Constitution8 imposes a duty on public administrators to
give written reasons to those whose rights have been adversely affected by
administrative action. This constitutional obligation is given effect in PAJA, which
sets out that any person whose rights have been materially and adversely affected by
administrative action and who has not been given reasons for the decision, is entitled
to demand reasons for the administrator’s decision.9
8 Section 33(2) of the Constitution provides that ‘[e]veryone whose rights h ave been adversely affected by
administrative action has the right to be given written reasons’.
9 Section 5 of PAJA provides:
‘(1) Any person whose rights have been materially and adversely affected by administrative action and who has not
been given reasons for the action may, within 90 days after the date on which that person became aware of the action
or might reasonably have been expected to have become aware of the action, request that the administrator concerned
furnish written reasons for the action.
(2) The administrator to whom the request is made must, within 90 days after receiving the request, give that person
adequate reasons in writing for the administrative action.
(3) If an administrator fails to furnish adequate reasons for an administrat ive action it must, subject to subsection (4)
and in the absence of proof to the contrary, be presumed in any proceedings for judicial review that the administrative
action was taken without good reason.
(4)(a) An administrator may depart from the requirement to furnish adequate reasons if it is reasonable and justifiable
in the circumstances, and must forthwith inform the person making the request of such departure.
(b) In determining whether a departure as contemplated in paragraph (a) is reasonable and justifiable, an administrator
must take into account all relevant factors, including-
(i) the objects of the empowering provision;
(ii) the nature, purpose and likely effect of the administrative action concerned;
(iii) the nature and the extent of the departure;
(iv) the relation between the departure and its purpose;
(v) the importance of the purpose of the departure; and
(vi) the need to promote an efficient administration and good governance.
(5) Where an administrator is empowered by any empowering pro vision to follow a procedure which is fair but
different from the provisions of subsection (2), the administrator may act in accordance with that different procedure.
(6)(a) In order to promote an efficient administration, the Minister may, at the request of an administrator, by notice
in the Gazette publish a list specifying any administrative action or a group or class of administrative actions in respect
of which the administrator concerned will automatically furnish reasons to a person whose rights are adversely affected
by such actions, without such person having to request reasons in terms of this section.
(b) The Minister must, within 14 days after the receipt of a request referred to in paragraph (a) and at the cost of the
relevant administrator, publish such list, as contemplated in that paragraph.’
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[14] In this case, San Ridge was not provided with any reasons by the City and /or
Johannesburg Water for their decision to classify San Ridge Heights as a
‘multi dwelling,’ which San Ridge submits has adversely and materially affected its
rights. Section 5(3) of PAJA makes it clear that, and in the absence of proof to the
contrary, the failure to provide reasons can lead to the presumption that the
administrative action was taken without good reason or in bad faith. When a request
for reasons is refused , the administrator must provide reasons for such refusal
because it is likely that the administrator’s decision will have a material and adverse
effect on the rights of the affected person , although, there may be exceptions (see
s 5(4) of PAJA).
[15] The City and/or Johannesburg Water have taken an ill-considered view that
the classification of San Ridge Heights as a ‘multi dwelling,’ which is defined in the
City and/or Johannesburg Water’s tariff policy, was self-explanatory and the reasons
for the various classifications are embedded in the document itself. However, the
tariff policy does no more than to define the different categories of residential
property in Johannesburg. The City and /or Johannesburg Water do not explain what
factors they took into account when they classified San Ridge Heights as a
‘multi dwelling.’ There may well b e instances where what is contained in a
document may be sufficient to formulate an objection.10 In any event, none of these
submissions by the City and/or Johannesburg Water are set out in their answering
affidavit.
[16] The failure to give reasons by the City and /or Johannesburg Water in this case
is fatal and dispositive of the matter. It is not necessary to deal with the other grounds
10 Commissioner for the South African Revenue Service v Sprigg Investment 117 CC t/a Global Investment [2010]
ZASCA 172; 2011 (4) SA 551 (SCA); [2011] 3 All SA 18 (SCA) para 17.
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relied upon by San Ridge. This, however, is not the end of the matter. This Court
must consider the appropriateness of the high court substituting its decision for that
of the administrator.
[17] Section 8 of PAJA gives the courts a wide discretion to make any ‘just and
equitable’ order to remedy the violation of the right to just administrative action.11
This includes, in exceptional circumstances, the court substituting or varying the
administrative action with a decision in terms of the court’s order (s 8(1)(c)(ii)(aa)).
Substitution, however, is an extraordinary remedy.12
[18] The Constitutional Court in Trencon Construction (Pty) Limited v Industrial
Development Corporation of South Africa Limited and Another 13 clarified the test
for exceptional circumstances where a substitution order is sought. It suffices to state
11 Section 8 of PAJA provides:
‘(1) The court or tribunal, in proceedings for judicial review in terms of section 6(1), may grant any order that is just
and equitable, including orders-
(a) directing the administrator-
(i) to give reasons; or
(ii) to act in the manner the court or tribunal requires;
(b) prohibiting the administrator from acting in a particular manner;
(c) setting aside the administrative action and-
(i) remitting the matter for reconsideration by the administrator, with or without directions; or
(ii) in exceptional cases-
(aa) substituting or varying the administrative action or correcting a defect resulting from the administrative
action; or
(bb) directing the administrator or any other party to the proceedings to pay compensation;
(d) declaring the rights of the parties in respect of any matter to which the administrative action relates;
(e) granting a temporary interdict or other temporary relief; or
(f) as to costs.
(2) The court or tribunal, in procee dings for judicial review in terms of section 6(3), may grant any order that is just
and equitable, including orders-
(a) directing the taking of the decision;
(b) declaring the rights of the parties in relation to the taking of the decision;
(c) directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the
doing, of which the court or tribunal considers necessary to do justice between the parties; or
(d) as to costs.’
12 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited and Another
[2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC) para 42.
13 Ibid para 32.
12
that remittal is almost always the prudent and proper course. Appropriate deference
ought to be afforded to the administrator. Whether a court was in as good a position
as the administrator to make the decision and whether the decisio n was a foregone
conclusion are two factors that had to be considered cumulatively. Other relevant
factors include delay, bias or incompetence on the part of the administrator.14
[19] The high court substituted its decision, that San Ridge Heights be classified
as ‘blocks of flats’ in terms of the tariff policy for that of the City and /or
Johannesburg Water’s decision to classify the property as a ‘multi dwelling’. In light
of the above mentioned test, the high court erred in this regard for the following
reasons.
[20] It is common cause that there were no rates valuations15 of the individual flats
attached to either San Ridge’s or to the City and/or Johannesburg Water’s affidavit.
The high court req uired this information before making a determination as to
whether or not San Ridge Heights is a ‘multi dwelling’ or not. As it did not have this
information before it, it was not competent to substitute its decision for that of the
administrator. Similarly, this Court does not have sufficient facts before it to
substitute the administrator’s decision. As a result of the City and/or Johannesburg
Water’s failure to provide reasons for their decisi on, the matter should be remitted
to the decision-maker for reconsideration. In light of these findings, the appeal must
succeed, although, only to the extent as provided for in the order below. Neither
party has been fully successful and each should pay their own costs.
[21] In the result, the following is made:
14 Ibid paras 43-54.
15 See fn 3.
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1 The appeal is upheld, to the limited extent indicated below.
2 Paragraph 2 of the order of the court a quo is set aside and replaced with the
following:
‘The matter is remitted to the second and /or third respondents to
reconsider their classification of Erf 827 Erand Gardens, Ext 36 Township,
held by Certificate of Consolidated Title T1100883/2016, in terms of the
second respondent’s tariff policy under s 74(1) of Act 32 of 2000.’
3 Each party is to pay its own costs in the appeal.
_____________________
Z CARELSE
JUDGE OF APPEAL
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Appearances
For the appellants: S Ogunronbi
Instructed by: Prince Mudau & Associates, Midrand
Webbers Attorneys, Bloemfontein
For the respondent: F J Erasmus SC (with H van Eetveldt)
Instructed by: JDB Attorneys Incorporated, Pretoria
Honey Attorneys, Bloemfontein