Summary of Judgment

1. Introduction

This judgment concerned an opposed application for leave to appeal brought by the respondents against an earlier judgment delivered on 1 March 2022. The earlier judgment reviewed and set aside an administrative decision relating to the tariff classification of the applicant’s residential premises for sewerage service charges.

The applicant in the main proceedings was San Ridge Rental Property (Pty) Ltd. The respondents were the Municipal Manager: City of Johannesburg Metropolitan Municipality (first respondent), the City of Johannesburg Metropolitan Municipality (second respondent), and Johannesburg Water (SOC) (third respondent). In the leave to appeal proceedings, the respondents were the applicants for leave, and San Ridge Rental Property (Pty) Ltd opposed the application.

The dispute arose from the respondents’ tariff policy, which created different categories of dwellings. The category into which a property was placed determined the tariffs levied. The main application challenged the classification of the applicant’s dwellings as a “multiple dwelling” (also referred to in the judgment as “multi-dwelling”), which attracted a different tariff than the category “flat”. The earlier judgment granted review relief and made an order with the effect that the applicant’s premises should not be treated as a “multiple dwelling” for tariff purposes. The present judgment addressed whether the respondents should be granted leave to appeal that outcome to the Supreme Court of Appeal.

2. Material Facts

The respondents’ tariff policy contained defined categories of dwellings, and the applicable sewerage tariffs depended on the category into which a property fell. For the purposes of the dispute, the relevant categories were “multi-dwelling” and “flat”, and the policy also referred to a “block of flats” as an exclusion within the definition of “multi-dwelling”.

An unknown official in the first respondent’s administration made a decision classifying the applicant’s dwellings on its premises as a “multiple dwelling” for purposes of levying sewerage charges. The earlier judgment reviewed and set aside that classification decision.

A significant feature of the record, as treated by the court, was that the respondents did not provide evidence identifying who took the classification decision and why it was taken. The opposition to the main application proceeded on legal argument addressed to the facts placed before the court by the applicant.

In the earlier judgment, the court accepted that the applicant’s premises fell within the exclusion contained in the definition of “multi-dwelling”, namely that a “block of flats” was excluded from the “multi-dwelling” category. The earlier judgment further treated the plural concept (“blocks of flats”) as falling within the exclusion by reference to section 6 of the Interpretation Act 33 of 1957, which provides for the singular and plural.

In the leave to appeal proceedings, the respondents advanced grounds contending, among other things, that the court had impermissibly interfered with legislative authority, that the court had effectively created a new category (“block(s) of flats”), that the exclusion should be read narrowly (including by treating “block of flats” as singular), and that the applicant’s premises did not satisfy the definition of “flat” because the premises allegedly had more than one communal entrance. The respondents also challenged the earlier court’s granting of a substitution order, arguing that the matter should have been remitted.

3. Legal Issues

The principal question in the leave to appeal proceedings was whether there existed a reasonable possibility that another court may come to a different conclusion from the earlier judgment, warranting leave to appeal to the Supreme Court of Appeal.

That inquiry turned materially on questions of law and application of law to fact, in particular the interpretation and application of the tariff policy’s definitions and exclusions, including whether the applicant’s premises fell within the exclusion for a “block of flats” and therefore outside the “multi-dwelling” category.

A further legal issue concerned remedial discretion under administrative law, namely whether, assuming reviewability, the earlier court was correct to grant a substitution order or whether the matter should have been remitted to the administrator. This raised an evaluative question concerning the threshold for substitution, referenced to section 8(1)(c)(ii) of PAJA and whether the case was “exceptional”.

Finally, the court treated the presence of potentially conflicting approaches within the same division, arising from a recent judgment on similar tariff provisions, as relevant to whether leave to appeal should be granted in order to promote legal certainty.

4. Court’s Reasoning

The court located the dispute within the respondents’ established competence to determine dwelling categories and tariffs, and rejected as without merit the grounds suggesting that the earlier judgment improperly interfered with the respondents’ legislative authority. The earlier review was framed as a challenge to an administrative classification decision made by an unidentified official, rather than an attempt to invalidate or rewrite the tariff policy itself.

On the contention that the earlier order created a non-existent category such as “block of flats” or “blocks of flats”, the court reasoned that the tariff policy already contained only two relevant defined categories, namely “multi-dwelling” and “flat”, and that “block of flats” appeared in the policy not as a separate category but as an exclusion from the “multi-dwelling” definition. The earlier determination was therefore characterised not as creating a new category, but as deciding whether the applicant’s premises fell outside the “multi-dwelling” definition because they satisfied the exclusion, with the consequence that the tariff for “flat” would apply.

The court accepted that the respondents had not laid a factual foundation for the classification decision (including the identity of the decision-maker and the reasons). However, in considering prospects of appeal, it took the view that legal argument could nonetheless be advanced by the respondents on the facts presented by the applicant, particularly through competing interpretations of the definitions and exclusions. The court regarded it as plausible that another court might adopt a different interpretation on whether the exclusion for “block of flats” should operate as the earlier judgment had concluded.

In assessing prospects, the court placed significant weight on a judgment delivered shortly before the earlier decision, namely Park More Body Corporate v The City of Johannesburg Metropolitan Municipality (Case number: 2021/21592) (Wright J), which addressed interpretation of the same tariff policy and definitions. While noting that the two matters were distinguishable to some extent, the court treated the reasoning in Park More as illustrating a materially different approach. In particular, Wright J was described as taking the view that even where there is a communal entrance, if certain occupants could access their units without using it, the dwelling would not be a “flat” as defined, but rather a “multi-dwelling”. The court contrasted this with its own earlier approach, which treated “blocks of flats”, each having a communal entrance, as falling within the exclusion from “multi-dwelling”.

The court also considered the remedial challenge to the earlier substitution order. It recorded the respondents’ argument that substitution was not justified because the matter was not “exceptional” as contemplated by section 8(1)(c)(ii) of PAJA, and that remittal for reconsideration should have occurred. The court concluded that there was a reasonable possibility that another court might find that the tariff policy’s relevant provision (referred to as paragraph 2.2) created jurisdictional facts for the levying decision and might therefore reach a different conclusion regarding substitution and the proper remedy.

The court ultimately treated the existence of differing judgments within the same division as an additional factor supporting leave to appeal, emphasising the need for legal certainty on the interpretation and application of the tariff policy.

5. Outcome and Relief

The court granted leave to appeal to the Supreme Court of Appeal against the whole of its earlier judgment, including the cost order made in the main application.

It ordered that the costs of the leave to appeal application would be costs in the appeal.

Cases Cited

Park More Body Corporate v The City of Johannesburg Metropolitan Municipality (Case number: 2021/21592).

Legislation Cited

Interpretation Act 33 of 1957 (section 6).

Promotion of Administrative Justice Act 3 of 2000 (section 8(1)(c)(ii)).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that there existed a reasonable possibility that another court could reach a different conclusion on the interpretation and application of the respondents’ tariff policy definitions and exclusions, including whether the applicant’s premises fell within the exclusion for a “block of flats” and whether the “flat” tariff should apply.

The court further held that there was a reasonable possibility that another court could differ on the appropriateness of a substitution order under section 8(1)(c)(ii) of PAJA, including whether the matter ought rather to have been remitted to the administrator.

In light of these prospects, and having regard to the need for legal certainty given differing approaches within the division, leave to appeal to the Supreme Court of Appeal was granted, with costs to stand over for determination in the appeal.

LEGAL PRINCIPLES

The judgment applied the principle that leave to appeal may be granted where there is a reasonable possibility that another court may come to a different conclusion, including on questions of statutory or policy interpretation and the remedial consequences in administrative-law review.

In interpreting policy language that uses a singular term in an exclusion, the judgment referenced the interpretive approach in section 6 of the Interpretation Act 33 of 1957, under which the singular may include the plural, as relevant to whether “block of flats” could encompass “blocks of flats”.

The judgment proceeded on the administrative-law principle that a court may review and set aside an administrative classification decision where it is challenged as unreasonable or arbitrary, while recognising that the municipal authority retains the power to create tariff categories and determine tariffs.

In relation to remedies, the judgment treated substitution under section 8(1)(c)(ii) of PAJA as a remedy that is contested and potentially confined to exceptional cases, and accepted that there was a realistic prospect that another court might prefer remittal depending on the interpretation of the tariff policy and the nature of the decision-making discretion involved.