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[2014] ZASCA 90
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Kalil N.O. and Others v Mangaung Metropolitan Municipality and Others (210/2014) [2014] ZASCA 90; [2014] 3 All SA 291 (SCA); 2014 (5) SA 123 (SCA) (4 June 2014)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case
No:
210/2014
In
the matter between:
PAUL
ANTHONY KALIL
NO
.............................................................................
FIRST
APPELLANT
WILHELMINA
CECILIA KALIL
NO
.........................................................
SECOND
APPELLANT
STEPHANUS
ABRAHAM CLOETE
BEZUIDENHOUT
NO
.......................................................................................
THIRD
APPELLANT
BROLL
PROPERTY GROUP (PTY)
LTD
...................................................
FOURTH
APPELLANT
and
MANGAUNG
METROPOLITAN
MUNICIPALITY
..............................................................................................
FIRST
RESPONDENT
MEMBER
OF THE EXECUTIVE COUNCIL
FOR
LOCAL GOVERNMENT FOR THE
FREE
STATE
PROVINCE
..........................................................................
SECOND
RESPONDENT
EXECUTIVE
MAYOR OF THE CITY OF
MANGAUNG
METROPOLITAN
MUNICIPALITY
.............................................................................................
THIRD
RESPONDENT
THE
MUNICIPAL MANAGER OF THE CITY
OF
MANGAUNG METROPOLITAN
MUNICIPALITY
..........................................................................................
FOURTH
RESPONDENT
Neutral
citation:
Kalil v Mangaung
Metropolitan Municipality
(210/2014)
[2014] ZASCA 90
(4 June 2014)
Coram:
Mpati P, Brand, Bosielo, Leach and
Wallis JJA
Heard:
4 June 2014
Delivered:
4 June 2014
Summary:
Municipal rates - public participation
in budget process - whether proper notice of rates increase given -
municipality empowered
to levy higher rates on business properties
than on residential properties - duties of municipal officials in
public interest litigation.
ORDER
On
appeal from:
Free State Division,
Bloemfontein (Mhlambi AJ sitting as court of first instance):
(a) The order of the
court below as to costs is set aside and replaced with the
following:
‘
The
first respondent is ordered to pay the applicant’s costs.’
(b) Subject to (a)
the appeal is dismissed with no order as to costs.
REASONS
FOR JUDGMENT
Leach
JA
(Mpati P, Brand, Bosielo and Wallis
JJA concurring)
[1]
This appeal relates to a resolution taken by the first respondent,
the Mangaung Metropolitan Municipality (the Municipality)
at a
council meeting on 30 May 2013 in which it approved municipal rates
for the budget year of 2013/2014. Shortly before that
meeting was
scheduled to be held the appellants, who are or represent municipal
ratepayers, launched urgent motion proceedings
in the high court
seeking an order prohibiting the Municipality from adopting the
resolution, as well as certain declaratory relief.
In addition to the
Municipality, its executive mayor, municipal manager and the MEC for
local government were cited as respondents
but the latter played no
part in the proceedings and abided the decision of the court.
[2]
The application came before Mhlambi AJ who, on 29 May 2013, dismissed
it with costs. Leave to appeal to this court was subsequently
granted
by Naidoo J on 20 March 2014. The appeal was heard as a matter of
urgency on 4 June 2014 as the municipal budget of 2014/2015
was due
to be considered by the Municipality a few days later. After hearing
argument we issued an order in which, save for altering
the order as
to costs of the court below, the appeal was dismissed for truncated
reasons. In doing so we indicated that our full
reasons would follow
in due course. These are those reasons.
[3]
The resolution that the appellants sought to prohibit the
Municipality from adopting on 30 May 2013 (but which was in fact
passed after the application was dismissed in the court below)
involved the approval of an increased rate to be applied on
commercial
properties in the municipal area. Both in this court as
well as in the court below, the Municipality relied upon the
Constitutional
Court’s warning that courts are to be conscious
of the ‘vital limits on judicial authority and the
Constitution’s
design to leave certain matters to other
branches of government’ and should not interfere ‘in the
processes of other
branches of government unless to do so is mandated
by the Constitution’.
[1]
I
accept that principle unhesitatingly, but
it
is now axiomatic that the exercise of all public power must comply
with the Constitution and the doctrine of legality.
[2]
And
where
those in government, whether national, provincial or municipal, act
beyond the constraints of the law a court should not hesitate
to
declare their actions illegal, thereby controlling and regulating
public power.
[3]
As the decision
the appellants sought to impugn was not administrative in nature
[4]
it could not be assailed on the grounds of non-compliance with the
Promotion
of Administrative Justice Act 3 of 2000
. Consequently, in
seeking
relief, they relied solely upon the legality principle. The matter
thus turned on whether the Municipality’
s 2013/14
budget could
lawfully be adopted.
[4]
The appellants raised a three-pronged argument in contending that the
adoption of the budget would be unlawful. First,
they contended
that since the
levying of property rates was an integral part of the budget process
in terms of the
Local Government:
Municipal Property Rates Act 6 of 2004 (the
Rates
Act), the Local Government: Municipal Finance Management Act 56 of
2003 (the Finance Act) and the Local Government: Municipal
Systems
Act 32 of 2000 (the Systems Act), the decision to increase the rates
on business properties required community participation
which had not
occurred.
Second, they argued that
the ratio between the proposed rate for commercial properties and
that on residential properties exceeded the permissible ratio
prescribed under s 19(1)(
b
) of
the Rates Act as read with the regulations promulgated thereunder.
The third and final thrust of the appellant’s
case was that the
implementation of the proposed rates would materially and
unreasonably prejudice national economic policies,
economic
activities across municipal boundaries, or the national mobility of
goods, services, capital or labour, contrary to s
229 of the
Constitution.
[5]
The allegations relevant to this third contention were fleetingly
made, and the appellant did not persist in its argument on
this
issue, either in the court below or in this court. Consequently, no
more need be said about it and I turn to consider the
first two
issues, upon which the appellants continued to rely.
[6]
Sections 152(1)(
b
)
and (2) of the Constitution oblige municipalities to provide services
to their communities in a sustainable manner. In order
to do
so, a municipality is empowered by s 229 of the Constitution to raise
funds by imposing rates on property in a process regulated
by
national legislation – the applicable legislation being the
Systems Act, the Finance Act and the Rates Act. The preamble
to the
latter records that local government should have a ‘sufficient
and buoyant source of revenue necessary to fulfil its
development
responsibilities’ and that income ‘from property rates is
a critical source of revenue for municipalities
to achieve their
constitutional objectives’.
[7]
In
South
African Property Owners Association v Johannesburg Metropolitan
Municipality
[5]
(a decision now commonly known as
SAPOA
)
this court held that the process of levying rates was an integral
part of a municipality’s budget process. The statutory
matrix applicable to the assessment of rates and the approval of a
municipality’s budget was exhaustively set out and analysed
in
SAPOA
and it would be superfluous to repeat that exercise here.
[6]
Suffice it to mention for present purposes that s 16(1)(
a
)(iv)
of the Rates Act requires a municipality to ‘encourage, and
create conditions for, the local community to participate
in . . .
the preparation of its budget’ and that, when the annual
municipal budget is tabled, the municipal council is obliged
under s
23(1) of the Finance Act to consider the views of the local
community. In order to facilitate that process, chapter 4 of
the
Systems Act provides in detail for community participation and the
necessity for the community to be effectively informed of
all matters
requiring its participation. Inter alia, s 21A(1) of the Systems Act
requires all documents which must be ‘made
public’
by
a municipality to be conveyed to the local community:
‘
(a)
by displaying the documents at the
municipality's head and satellite offices and libraries;
(b)
by
displaying the documents on the municipality's official website, if
the municipality has a website . . .; and
(c)
by notifying the
local community . . . of the place, including the website address,
where detailed particulars concerning the documents
can be obtained.’
[8]
Section 17(3) of the Finance Act details numerous documents that are
to accompany an annual budget when it is tabled,
[7]
including draft resolutions approving the budget and imposing any
municipal tax, and a projection of cash flow by revenue source.
Under
s 22 of the Finance Act, after the annual budget is tabled in a
municipal council the accounting officer must ‘make
public’
the budget and the documents referred to in s 17(3) which must
therefore be conveyed to the local community in the
manner required
by s 21A of the Systems Act.
[9]
Whether
the Municipality complied with its statutory obligations in regard to
publication and community participation before adopting
its budget
was a matter of dispute in the court below. As held by this court in
Democratic
Alliance v Ethekwini Minicipality
,
[8]
whether a municipality has satisfied the requirement of public
participation is an issue to be determined by the yardstick of
reasonableness in the given circumstances of each particular case. I
turn thus to the relevant facts.
[10]The
appellants’ founding affidavit was deposed to by the second
appellant, Mr Paul Kalil, a trustee of a trust which owns
a number of
immovable properties within the municipal area. The material facts
upon which he relied are, unfortunately, somewhat
tersely set out,
probably as a result of the urgent situation in which the appellants’
papers were prepared. In any event,
he alleged that at some stage
municipal officials were asked to provide the formula which the
Municipality intended to use to calculate
rates in the 2013/2014
budget. Who these persons were and when, in what manner and terms
they were requested to provide the information
the appellants sought,
does not appear from the record. Be that as it may, Mr Kalil alleged
that although it was mentioned that
the ratio of residential to
commercial properties for purposes of rates would be 1:3.8 (ie that
the rates payable on a commercial
property would be 3.8 times more
than a residential property of the same value) no reliable
information was forthcoming and led
to the appellants seeking an
urgent meeting with the mayor. According to Mr Kalil, it took a
month, until 23 May 2013, before the
appellants were able to meet
with the executive mayor, municipal manager and other officials of
the Municipality. He further alleged
that the appellants’
concern regarding the formula to be applied to calculate the rates on
commercial property was discussed
at this meeting, and the proposal
that the ratio be increased to 1:3.8 was confirmed. At the request of
the mayor and his officials,
the appellants placed their submissions
in regard to the proposed increase in rates in writing, their letter
having been delivered
to the Municipality on 27 May 2013.
[11]
The legality of the Municipality's conduct was impugned not upon a
failure to take note of the appellant’s representations
but,
pertinently, upon its alleged failure to properly publish the
proposed budget and related documents to the local community.
In this
regard it was alleged that the appellants ‘could not find any
publication in the media, printed and broadcast, informing
the public
of the formula to be applied for commercial properties’. All
they chanced upon were articles published in ‘Ons
Stad’
and ‘Die Rosestad’ on 23 May 2013, mentioning that a
decision was due to be taken on the budget a week
later. In
response, the respondents relied upon the publication of a notice on
13 February 2013 in a newspaper entitled ‘Courant’,
calling for public comment in relation to a new set of policies and
bylaws regarding, inter-alia, the Municipality's property rates
policy as well as notices in two other newspapers in regard to a
‘Budget Conference’ to be held at the Bloemfontein
City
Hall on 17 May 2013. None of these notices contained any reference to
the proposed budget.
[12]The
court below held that the Municipality had complied with its
statutory obligations by publishing these notices. The simple
answer
to this is, of course, that the proposed budget and related documents
envisaged by s 17(3) of the Finance Act were not published
for
comment by way of these notices and the requirements in that regard
were thus not met.
This
does not mean that the adoption of the budget resolution is
necessarily to be vitiated. In
African
Christian Democratic Party v Electoral Commission and Others
[9]
the Constitutional Court, in the context of municipal electoral
legislation, held that a narrow textual and legalistic approach
should be avoided.
[10]
Applying this rule in the later case of
Liebenberg
NO v Bergrivier Municipality
,
[11]
that court concluded that the enquiry should be as to ‘
whether
the steps taken by the local authority are effective when measured
against the object of the legislature, which is ascertained
from the
language, scope and purpose of the enactment as a whole and the
statutory requirement in particular’
[13]
However, leading counsel for the respondents, Mr Moerane SC,
correctly conceded that on the allegations contained in the papers
he
could not argue that there had been an effective consultation with
the local community – although, as he pointed out,
given the
skimpy answers of the respondents, it may well be that as a matter of
fact further relevant information in regard to
the issue was for some
reason not disclosed. That may well be so, but it would be idle to
speculate thereon. On the papers as they
stand, the court below erred
in reaching the conclusion it did on this issue, as Mr Moerane
further correctly conceded. It ought
instead to have found that there
had not been proper public participation in the Municipality's
budgeting process, and granted
appropriate relief.
[14]
Of course that does not necessarily mean that this court, a year
later, should set aside the budget resolution of 30 May 2013.
[12]
A great deal of water has flowed under the bridge and the
Municipality is now considering its next annual budget. Counsel for
the appellants correctly conceded that at this stage he could not ask
for the budget to be set aside solely by reason of the lack
of proper
public participation, and that the outcome of the appeal, in truth,
hinged upon a decision on the appellants’ principal
point,
namely, that the determination of a rates ratio of 1:3.8 between
residential and commercial properties offended the principle
of
legality.
[15]
As set out specifically in its founding papers, the appellants’
case on this latter issue was based squarely on the conclusion
of
Southwood AJA in
SAPOA
[13]
that s 19(1)(
b
)
of the Rates Act, as read with the regulations promulgated pursuant
to s 19(2), prohibits the imposition of a rate on any category
of
non-residential property higher than the rate levied on residential
property. The learned judge accordingly held that levying
a rate on
business properties that is 3.5 times the rate on residential
properties would be unlawful. Relying upon this, and the
allegation
that the rate levied by the Municipality in respect of business
properties in the present matter was 3.8 times the rate
to be levied
in respect of residential properties, the appellants alleged that the
Municipality was prohibited from determining
such a rate in the
budget and that, at most, no more than the same rate it intended to
apply to residential properties could legally
be imposed on
commercial properties.
[16]
The court a quo evaded the issue, finding there to be no factual
basis for the allegation that the proposed ratio of residential
to
business properties was 1:3.8. The simple answer to this is that the
allegation in the founding papers that this was the proposed
ratio
was not disputed by the respondents’ in their answering papers.
Accordingly, far from there being no factual basis
laid for the
allegation, the proposed ratio was common cause (indeed, as pointed
out by the appellant before this court, the actual
rate between
residential and business properties approved by the first respondent
on 30 May 2013 and published in the
Provincial
Gazette
on
25 October 2013 under s 14(2) of the Rates Act resulted in a higher
ratio of 1:4.5).
[14]
Consequently it becomes necessary to consider whether Southwood AJA
was correct in his conclusion in respect of the effect of s
19(1)(
b
)
of the Rates Act and the regulations promulgated thereunder.
[17]
But before doing so, it is necessary to make a few introductory
comments relevant to his conclusion. At the outset, it must
be
recorded that it formed no part of the
ratio
decidendi
of his judgment. Although the other members of this court dissented
in regard to the order that should issue, they were unanimous
that
the municipality, in amending its budget to increase the rates, had
failed to comply with the statutory obligations relating
to community
consultation and participation. They were also unanimous in their
finding that the decision to impose the increased
rate on business
properties had no rational basis. For these two reasons it was held
that the appellant was entitled to relief.
In respect of the
appellants attack upon the impugned decision under s 19(1)(
b
)
of the Rates Act, however, Southwood AJA spoke alone and his views on
the issue were not endorsed by the majority (there was no
comment on
the issue in the majority judgement, presumably because it was felt
unnecessary). Thus not only was his the sole voice
on the issue but,
as he himself said, it was not necessary to decide whether the
proposed increase in respect of business property
rates was
prohibited by s 19(1)(
b
)
to determine the appeal.
[15]
In addition, appellant had abandoned any reliance on the point which
had therefore not been argued. In these circumstances, the
conclusion
of the learned judge on the issue was obiter dictum on an issue in
respect of which he had not enjoyed the benefit of
full argument and
which was not supported by any other members of the court. It
therefore is of limited persuasive value. And in
any event, for the
reasons that follow, it was clearly wrong.
[18]
Section 11(1)(
a
)
of the Rates Act provides that a rate levied by a municipality on
property must be an amount in Rand on the market value of the
property. Section 19(1)(
b
)
goes on to provide that a municipality may not levy a rate on
non-residential properties that exceeds a prescribed ratio to the
rate on residential properties (but not that a rate levied on
non-residential properties may not exceed that imposed on residential
properties). On 27 March 2009 the Minister for Provincial and Local
Government promulgated regulations under the Rates Act.
[16]
Blessed with the so-called short title ‘the Municipal Property
Rates Regulations on the Rate Ratio between Residential and
Non-Residential Properties’, it was these regulations that were
before the court in
SAPOA.
They were subsequently amended on 12 March 2010 by the ‘Amended
Municipal Property Rates Regulations on the Rate Ratios between
Residential and Non-Residential Properties’.
[17]
In this amended form, the regulations read as follows:
‘
INTERPRETATION
Definitions
1.
In these regulations, a word or expression to
which a meaning has been assigned in the Act, has that meaning, and
unless the context
indicates otherwise, -
“
agricultural
property
” means property
envisaged in section 8(2)(d)(i), (e) and (f)(i) of the Act;
“
public
benefit organisation property
”
means property owned by public benefit organisations and used for any
specified public benefit activity listed in item 1
(welfare and
humanitarian), item 2 (health care), and item 4 (education and
development) of part 1 of the Ninth Schedule to the
Income Tax Act.
REGULATIONS ON
THE RATE RATIO BETWEEN THE RESIDENTIAL AND NON-RESIDENTIAL CATEGORIES
OF PROPERTY
Rates ratios to
be applied
2.
The rate on the categories of non-residential
property listed in the first column of the table below may not exceed
the ratio to
the rate on residential properties listed in the second
column of the table below, where,
(a)
the first number in the second column of the table
represents the ratio to the rate on residential properties;
(b)
the second number in the second column
of the table represents the maximum ratio to the rate on residential
property that may be
imposed on the non-residential properties listed
in the first column of the table:
Categories
Ratio
in relation to
residential
property
Residential
property
1:1
Agricultural
property
1:0.25
Public
service infrastructure property
1:0.25
Public
benefit organisation property
1:0.25
Commencement
3.
The provisions of regulation 2, as far as they
apply to –
(a)
Agricultural and public service infrastructure
property are deemed to have taken effect from 1 July
2009.
(b)
Public benefit organisation property takes effect
on 1 July 2010.
Short
title
4.
These regulations shall be called the Amended
Municipal Property Rates Regulations on the Rate Ratios between
Residential and Non-Residential
Properties.’
The
only material difference between these amended regulations and the
regulations in their original form is the addition to the
table in
regulation 2 of the final category ‘Public benefit organisation
property’ in the first column and its ratio
to residential
property set out in the second column.
[19]
These regulations are certainly clumsily and inelegantly drawn. It
was the listing of residential properties at the head of
the first
column above other non-residential properties that Southwood AJA
found created confusion. He therefore reasoned:
‘
This
obviously should have been "non-residential properties", as
that is how the properties in that column are described.
The maximum
ratio of the rate on residential property to the rate on
non-residential property would therefore be 1:1 – the
rates
(the months in the rand) on the two categories of property may be the
same, but the rate on non-residential property must
not exceed the
rate on residential property.
’
[20]
As a starting point in considering this approach, although it may of
course at times be necessary to correct an apparent error
in the
language used in a statute or regulation in order to avoid an
identified absurdity,
[18]
courts should be slow to alter the words actually used
[19]
and must guard against ‘the temptation to substitute what they
regard as reasonable, sensible or businesslike for the words
actually
used’,
[20]
thereby
legislating rather than interpreting. With due respect, it is in this
latter respect that I feel Southwood AJA erred.
[21]
The first column in regulation 2 is headed ‘Categories’
and not ‘Categories of non-residential property’.
And
whilst, at the commencement of regulation 2, mention is made of the
rate on the categories of the non-residential property
‘listed
in the first column of the table below’ it does not follow that
only non-residential property will appear in
that column. Had it been
intended to be a list solely of non-residential properties, it may
have been absurd for residential properties
to have appeared in that
column, particularly if the ratio reflected in the second column had
not been 1:1 but some other ratio.
But that is the ratio listed, and
the ratio between residential properties and residential properties
is of course 1:1. The first
entry relating to residential property
can easily be regarded as being no more than a superfluous
illustration of the operation
of the ratio formula outlined
immediately above the two columns.
[22]
Moreover the words used must be interpreted in their context, both
statutory and historical. There is nothing in the Rates
Act or its
related legislation that indicates that the maximum permitted rate on
property would be that imposed in respect of residential
properties.
Significantly, s 8(1) of the Rates Act provides that a municipality
may in terms of the criteria contained in its rates
policy levy
different rates for different categories of property. These may
include categories determined according to the use
of the property,
the permitted use thereof or the geographical area in which the
property is situated. Section 8(2) goes on to
provide for a host of
categories that may be so determined, including residential
properties, industrial properties and business
and commercial
properties. This list is neither exhaustive nor prescriptive and it
is competent for a municipality to determine
a category not mentioned
in the section.
[21]
But
despite all these detailed provisions, none point to the necessity to
apply the highest level of rates to residential property.
And, as I
have already mentioned, s 19(1)(
b
)
provides that a municipality may not levy a rate on non-residential
properties that exceeds a prescribed ratio to the rate on
residential
properties; not that a rate on non-residential properties may not
exceed that imposed on residential properties.
[23]
Importantly, as a general rule, higher rates have historically been
levied against commercial, industrial and business properties
than
those classified as residential. This is evident from the appellants’
papers which include a memorandum from ‘a
well-known economist
and financial expert in national finance and economics’, Mr
Dawie Roodt, who points out that the rates
ratio between residential
and business properties was at the time 1:3.5 in the City of
Johannesburg, 1:2.267 in Ethekwini Municipality
and 1:2 in the City
of Cape Town. This is also apparent from the websites of the major
municipalities and from the jurisprudence
of this court. For example,
in
City
of Johannesburg Metropolitan Municipality v Chairman of the Valuation
Appeal Board for the City of Johannesburg & another
,
[22]
the debate centred upon whether a municipality had been entitled to
levy a higher rate imposed in respect of business properties
when
most of the property was being used for residential purposes which
attracted a lower rate.
[24]
The reason for imposing a higher rate on certain properties than on
others by reason of their uses is in many cases self-evident.
Land
used for agricultural purposes has been rated lower than residential
properties
[23]
to
encourage the agricultural sector to produce for the benefit of the
public good. On the other hand, vacant or undeveloped
land is
generally rated substantially higher than residential land in order
to encourage landowners to develop their properties.
The use to which
land is put is of cardinal importance in determining the rate to be
levied. Commercial, industrial and business
properties are used to
generate income while residential properties provide a home and
shelter to the domestic ratepayer, many
of whom are financially
hard-pressed. In these circumstances it is understandable that
business, commercial and industrial properties
historically have been
rated at a higher level than residential properties. As
explained in
Municipal
Law in the Province of the Cape of Good Hope South Africa
:
[24]
‘
The
motivation is that industry and commerce can absorb additional rating
burdens by passing them on in the prices of commodities
and charges
for services they provide ─ thus spreading the load more evenly
over all the citizens.
’
[25]
This motivation applies even more forcefully today in our
constitutional democracy in which the right to access to housing
[25]
and the necessity to respond to people’s needs
[26]
are enshrined. Placing residential properties in the highest rates
category would tend to frustrate, rather than encourage, the
ownership of housing. In these circumstances, any intention to alter
the well-established position of commercial, industrial and
business
properties being rated at a higher level than residential properties
seems improbable. It is not without significance
that in
SAPOA
the view of the Department of Finance was that the initial
regulations had not prescribed a ratio between the rates on
residential
and business properties (in other words, that a ratio had
been prescribed only in respect of the few categories of
non-residential
properties mentioned in the regulation).
[27]
[26]
It seems to me that this must be correct. There is no reason to read
‘residential property’ in the first column
in regulation
2 as meaning ‘non-residential property’. The regulation
must be construed as providing solely for a ratio
in respect of
residential property and the other categories of non-residential
property mentioned, namely, agricultural property,
public service
infrastructure property, and public benefit organisation property.
Consequently a ratio between residential property
and business or
commercial property has not been prescribed by the regulations, and
the rates to be levied in respect of the latter
property is a matter
to be determined by municipalities; subject, of course, to the
limitations imposed in Part 3 of the Rates
Act – including s
16(1) which provides that rates may not be levied that would
materially and unreasonably prejudice national
economic policies,
economic activities or the national mobility of goods, services,
capital and labour.
[27]
Accordingly, in my respectful view, the conclusion of Southwood AJA
in
SAPOA
that
s 19(1)(
b
)
of the Rates Act, as read with the regulations, prohibited the
imposition of a rate on business or commercial properties higher
than
that imposed on residential properties, was incorrect and the
appellant’s reliance thereon was misplaced. As a result,
the
rate which the Municipality sought to impose in respect of business
properties in its budget of 30 May 2013 has not been shown
to have
offended the principle of legality.
[28]To
sum up, the high court erred in not finding in favour of the
appellants in respect of the issue of public participation but
was
correct, albeit for the wrong reasons, in not holding the proposed
rate for business properties to be unlawful. However, for
the reasons
already mentioned, it is by now too late for any meaningful
declaratory relief to be granted to the appellants.
[29]
That brings me to the question of costs. As the appellants ought to
have achieved substantial success in the high court, the
order of
costs granted against them cannot be allowed to stand. It is only to
that limited extent that the order of the high court
needs to be
altered, and the appeal must otherwise be dismissed. That is of
course relevant to the question of costs in this court.
Also relevant
is the fact that the appellants have failed in their argument
relating to the unlawfulness of the rate to be imposed
on business
properties, which was their principal concern in instigating this
litigation.
[30]
That having been said, the manner in which the Municipality
approached the appellants’ application militates against
a
costs order in its favour. This is public interest litigation in the
sense that it examines the lawfulness of the exercise by
public
officials of the obligations imposed upon them by the Constitution
and national legislation. The function of public servants
and
government officials at national, provincial and municipal levels is
to serve the public, and the community at large has the
right to
insist upon them acting lawfully and within the bounds of their
authority. Thus where, as here, the legality of
their actions
is at stake, it is crucial for public servants to neither be coy nor
to play fast and loose with the truth. On the
contrary, it is their
duty to take the court into their confidence and fully explain the
facts so that an informed decision can
be taken in the interests of
the public and good governance. As this court stressed in
Gauteng
Gambling Board and another v MEC for Economic Development,
Gauteng,
[28]
our present constitutional order imposes a duty upon state officials
not to frustrate the enforcement by courts of constitutional
rights.
[31]
It is bitter to record that the Municipality’s officials who
deposed to affidavits in the present matter failed to comply
with
this duty. The first respondent's answering affidavit was deposed to
by Mr Willem Boshoff, the acting city manager, who obstructively
sought to deny the locus standi of certain of the appellants, a point
later abandoned. More importantly, he denied ‘as if
specifically traversed’ (whatever that might mean) the
allegations made by Mr Kalil in regard to the initial meeting with
municipal officials when the appellants were first informed of the
proposed rates ratio for commercial properties, without in any
way
advancing the factual basis relied on to support that denial. If Mr
Boshoff was unaware of the meeting, or if he felt he was
unable to
meaningfully deal with Mr Kalil’s allegations as they were too
vague, he should have said so. The recent comments
of this court in
The
Director-General: The Department of Home Affairs and others v
Dekoba
[29]
are
pertinent. In that matter a chief control immigration officer who had
no personal dealings with or knowledge of the facts
in a particular
case made repeated denials without advancing any facts justifying
them. This was deprecated by this court which
said:
‘
There
was no appreciation on his part that a deponent, who denies the facts
deposed to on oath by witnesses for the other party,
accuses those
witnesses of lying and lying on oath is a serious criminal offence.
One expects greater care on the part of a senior
government official
when deposing to an affidavit.’
[32]
The unsatisfactory aspects of Mr Boshoff’s affidavit did not
stop there. He also denied the allegation that it had taken
a month
to arrange a meeting with the mayor but, once again, he failed to
advance the factual basis for his denial. Instead he
referred to the
so-called ‘confirmatory affidavits’ of the mayor and his
personal assistant. They, in turn, each merely
referred to Boshoff’s
affidavit and confirmed ‘its contents as true and correct in so
far as it relates to me.’
Confirmatory affidavits at times may
have their place but, by and large, constitute a slothful means of
placing evidence before
a court which is entitled to expect that the
actual witnesses to an event depose to the facts. Be that as it may,
when no facts
are alleged, either in a respondent’s answering
affidavit or in a supporting confirmatory affidavit, to substantiate
a denial
of the version alleged by an applicant, the denial can be
disregarded.
[33]
Then there is Mr Boshoff’s denial of the appellants’
version of the meeting with the mayor when it was eventually
held. He
denied that the formula to be applied to calculate the rates to be
payable on commercial property was discussed. In the
light of the
fact that the meeting had been requested for that very purpose and
that almost immediately thereafter the appellants
addressed the
letter of 27 May 2013 to the Municipality concerning the issue of
commercial rates, this further unsubstantiated
denial can be rejected
as spurious.
[34]
In short, the manner in which the Municipality presented its case in
its affidavits is to be deprecated, and fell far short
of what was
expected from an organ of state, the legality of whose actions was in
dispute. This is a meaningful factor relevant
to the exercise of
discretion as to costs and, in the light thereof, counsel for the
respondents, again quite correctly, did not
ask for a costs order in
their favour. In these circumstances, although the appeal had to
fail, save for the costs order in the
high court, it is just for
there to be no order in regard to the costs of the appeal.
[35]
For these reasons the following order was made:
(a) The order of the
court below as to costs is set aside and replaced with the
following:
‘
The
first respondent is ordered to pay the applicant’s costs.’
(b) Subject to (a)
the appeal is dismissed with no order as to costs.
L
E Leach
Judge
of Appeal
Appearances:
For
the Appellant: J Y Claasen SC
Instructed
by:
Matsepes
Inc, Bloemfontein
For
the Respondent: MTK Moerane SC (with him T L Manye)
Instructed
by:
Attorneys
for the First, Third and
Fourth
Respondents: Moroka Attorneys, Bloemfontein
For
the Second Respondent: The State Attorney, Bloemfontein
[1]
See
Glenister
v President of the Republic of South Africa &others
[2008] ZACC 19
;
2009
(1) SA 287
(CC) para 34 and the authority there cited.
[2]
Per
Ngcobo CJ in
Albutt
v Centre for the Study of Violence and Reconciliation &
others
2010
(3) SA 293
(CC)
para 49. See further
Gauteng
Gambling Board & another v MEC for Economic Development, Gauteng
2013
(5) SA 24
(SCA) para 1.
[3]
See
eg
Affordable
Medicines Trust & others v Minister of Health & others
[2005] ZACC 3
;
2006
(3) SA 247
(CC) paras 48 and 49.
[4]
Fedsure
Life Assurance Ltd & others v Greater Johannesburg Transitional
Metropolitan Council & others
[1998] ZACC 17
;
1999
(1) SA 374
(CC) par
a
45 .
[5]
South
African Property Owners Association v Johannesburg Metropolitan
Municipality and others
2013
(1) SA 420 (SCA).
[6]
A
summary of the statutory requirements is set out in
SAPOA
para
15.
[7]
Under
s 16(3) of the Finance Act the budget is to be tabled at least
ninety days before the start of the budget year.
[8]
Democratic
Alliance v Ethekwini Minicipality
2012 (2) SA 151
(SCA) para 24.
[9]
African
Christian Democratic Party v Electoral Commission and Others
[2006] ZACC 1
;
2006
(3) SA 305
(CC)
.
[10]
Para
25.
[11]
Liebenberg
NO v Bergrivier Municipality
2013
(5) SA 246
(CC)
para 25
[12]
See
SAPOA
paras
69-75
.
[13]
See
paras 52-57.
[14]
PG
60 25 October 2013, Title No. 2: Council Rates Resolution.
[15]
Para
52.
[16]
GN
R363 in GG 32061 of 27 March 2009.
[17]
GN
R195 in GG 33016 of 12 March 2010.
[18]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) para 25.
[19]
Summit
Industrial Corporation v Claimants Against the Fund Comprising the
Proceeds of the Sale of the MV Jade Transporter
1987
(2) SA 583
(SCA) at 597A-B.
[20]
Natal
Joint Municipal Pension Fund
(supra)
para 18.
[21]
City
of Tshwane v Marius Blom & GC Germishuizen Inc & another
2014
(1) SA 341 (SCA).
[22]
City
of Johannesburg Metropolitan Municipality v Chairman of the
Valuation Appeal Board for the City of Johannesburg & another
[2014] 2 All SA 363 (SCA).
[23]
See
eg
Mosowitz
v Johannesburg City Council
1957
(4) SA 569 (T).
[24]
Randell
and Bax
Municipal
Law in the Province of the Cape of Good Hope South Africa
4
th
ed at 97.
[25]
Section
26 of the Constitution.
[26]
Section
95(1)(
c
)
of the Constitution.
[27]
SAPOA
para
3.
[28]
Gauteng
Gambling Board and another v MEC for Economic Development, Gauteng
2013
(5) SA 24
(SCA) para 52.
[29]
The
Director-General: The Department of Home Affairs and others v Dekoba
(224/2013)
[2014] ZASCA 71
(28 May 2014) para 6.