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[2021] ZAKZDHC 27
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Alicante Investments (Pty) Ltd v Ethekwini Municipality (D4967/2019) [2021] ZAKZDHC 27 (23 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: D4967/2019
In
the matter between:
ALICANTE
INVESTMENTS (PTY)
LTD APPLICANT
and
ETHEKWINI
MUNICIPALITY RESPONDENT
JUDGMENT
Delivered
on.
CHILI.
J
[1]
The
applicant (Alicante Investments (Pty) Ltd) is a company whose
registered office is situated at 8 Sinembe Crescent, La Lucia
Ridge
in Durban. The deponent to both the founding and replying affidavits,
Mr Rajan Naidoo, is the applicant's sole director.
At all material
times the applicant was the registered owner of the immovable
property described as erf 10107 Durban, Province
of KwaZulu-Natal in
the total extent of 2023 square meters, situated at 326/330 Mahatma
Ghandi Road in Durban. The said property
was leased to a church in
terms of a lease agreement between the church and the applicant,
concluded in March of 2013. Section
3 of the Local Government
Municipality Property Rates Act
[1]
empowers Ethekwini Municipality (the respondent) to levy a rate on
property within its area of jurisdiction, and this includes
the
immovable property described hereinbefore ("the property").
[2] The
current dispute between the applicant and the respondent occurred as
a result of the church's occupation
of the applicant's property.
Prior to occupation, the property was categorized by the respondent
as commercial/business. During
September of 2016, the respondent
received a complaint from members of the community (represented by a
DA official) to the effect
that the property was being used for large
church gatherings resulting in noise and traffic disturbances. A
follow up inspection
by the respondent's employee revealed that the
property was indeed being used as a place of worship in contravention
of regulation
A25 (1) of the National Building Regulations
promulgated under the National Building Regulations and Building
Standards Act no.103
of 1977 (hereinafter "the Act"). The
inspection further revealed that an alteration had been effected to
the property
without prior approval of the local authority in
contravention of s4 (1) of the Act.
[3] As
a result of the above contraventions, in particular the usage of the
property as a place of worship, the
respondent took a decision that
the property be re-categorised from business/commercial to
unauthorized/illegal use. The respondent
further resolved that the
rates charged on the property be increased owing to the fact that the
property was being used for the
purpose it was not intended for. It
is this decision together with the subsequent rate amount charged on
the property with effect
from September 2017 thorough to July 2018,
that are a subject of dispute in the present application. Following
on representations
made by Zimanga Urban and Rural Design Consultants
[hereinafter "Zimanga Consultants"] in August of 2017 (on
behalf of
the applicant) the respondent resolved to reverse its
earlier decision and subsequently changed the category of the
property back
to business/commercial usage, effective November 2018.
It is common cause that when this decision was made, the church that
operated
the property as a place of worship, had since vacated the
property.
The
Notices
[4] An
issue was made regarding the notices that the respondent was obliged
by law to serve on the applicant when
deciding to re-categorise the
premises from business/commercial use to unauthorized/illegal use and
to charge rates accordingly.
Following on investigation into a
complaint referred to herenabove, the respondent issued two notices
dated the 22
nd
of September 2016. The first notice was
issued in terms of s79 of the KwaZulu-Natal Planning and Development
Act no.6 of 2008 (hereinafter
"Act 6 of 2008"). This
section obliges the respondent to serve a contravention notice on a
person suspected on reasonable
grounds, to be guilty of an offence
contemplated in s75 (a) to (h) of Act 6 of 2008 [unless the
Municipality has elected to serve
an urgent prevention order on that
person]. The contravention charged in this regard related to an
alteration to the building described
by the respondent as 'an opening
on the side of the building'.
[5] The
second notice related to usage of the property for the purpose other
than that shown on approved plans,
in contravention of regulation A25
(1) of the Act. Regulations A25(1) and (2) provide:
"(1) No
person shall use any building or cause or permit any building to be
used for a purpose other than
the purpose shown on the approved plans
of such building, or for a purpose which causes a change in the class
of occupancy as contemplated
in these regulations, whether such plans
were approved in terms of the act or in terms of any law inforce at
any time before the
date of the commencement of the act, unless such
building is suitable, having regards to the requirements of these
regulations,
for such first mentioned purpose or for such class of
occupancy.
(2) Any
person who contravenes a provision of subregulation (1) shall be
guilty of an offence,
and the local authority may serve a notice
on such person calling upon him forthwith to seize such
contravention
." My underlining.
[6] On
17 November 2016 the respondent issued a contravention notice in
terms of s79 (1) of Act 6 of 2008, on the
basis that the applicant
allowed the property to be used as a place of worship in
contravention of s75 (1) (6) of Act 6 of 2008.
I deal first with the
question whether it was sufficiently established, that the property
was used as a place of worship in contravention
of regulation A25(1)
of the Act. In my view, that question should be answered in the
affirmative for the following reasons. In
paragraph 6.3 of the
applicant's founding affidavit, the deponent (Mr Naidoo) stated:
"6.3 Unbeknown
to the applicant, the church's occupation constituted an unlawful
usage of the property which
led to the respondent re-categorising the
applicant's property usage from business/commercial to
unauthorized/illegal development
use"
When
responding to the contravention notice dated the 17
th
of
November 2016 together with the notice for change of category from
business/commercial to unauthorized/illegal use, the applicant's
attorneys, acting on behalf of the applicant, stated in their letter:
"5. We
are instructed that our client's tenant, a church, has vacated the
property.
As such there is no basis for continuing to debit our
client with rates calculated in accordance with the
unauthorized/illegal development
tariff. and for the property
category to remain as illegal development/use
. My underlining.
6. In
the circumstances, this letter serves to notify you that the property
is not being used as a place of worship,
and is a request for your
senior Technical Planner, Thandiwe Mchunu, to immediately:-
6.1 Inspect
the property and confirm that it is not being used as a place of
worship,
6.2 Change
the property category from illegal development/use back to business/
commercial alternatively immediately
instruct the department
responsible for effecting change to the property category."
From
the above one thing is clear, that the applicant posed no challenge
to the correctness of a decision to re-categorise the property
from
business/commercial to unauthorized/illegal use and to charge rates
on the property accordingly. It is undoubtedly clear,
that the
applicant accepted that the respondent's decision was correct, hence
a request to reverse same based on the church's vacation
of the
property.
[7] The
issue that remains therefore, is whether the respondent complied with
the second part of the proviso (subregulation
(2)), namely, service
of contravention notice on the respondent. Ms Olsen argued on behalf
of the applicant that the respondent
failed to serve a notice on the
applicant as required by regulation A25(2) of the Act. I do not
agree. There are two contravention
notices that were issued by the
respondent dated the 17
th
November 2016 and 27 December
2017, respectively. When the applicant responded to the respondent's
second contravention notice
(dated the 27
th
December
2017), it acknowledged being in receipt of the first contravention
notice (dated the 17
th
November 2016). In particular, it
stated in paragraph 1:
"1. Following
receipt of contravention notice dated 17
th
November 2016,
a response was forwarded requesting an extension of time for an
application to be made. The request referred to
in this paragraph
relates to the special consent application which was received by the
respondent on 18 August 2017."
Common
sense dictates that the special consent request referred to in the
letter, would only have been made if the applicant was
in possession
of the notices. It is the respondent's case that these notices were
hand-delivered at 247 Cowey road Morningside,
Durban. That, according
to the respondent, was the applicant's last known address at the
time. In reply the applicant sought to
suggest that it would not have
received notices that were served at Cowey Road because it was no
longer operating from that address.
That cannot be correct given the
fact in the special consent application dated August 2017, the
applicant's address is cited as
'247 Cowey road Morningside'
[2]
.
How the applicant would have given an address that was no longer in
use is beyond comprehension. Further on in its reply, the
applicant
conceded having received the notices that were served at Cowey road
but was unable to specify how and when these notices
ultimately
landed in its possession.
[8] It
was submitted on behalf of the respondent, both in argument and in
the answering affidavit, that at some
stage a company search was
conducted which revealed that, the applicant had (without the
knowledge of the respondent) changed its
postal address to 8 Sinembe
Park La Lucia in Durban. From then on, all contravention notices and
utility bills were forwarded to
the said address by ordinary mail. It
is worthy to be noted that it is not disputed that all utility bills
that were forwarded
to the La Lucia address were received by the
applicant. It is only the contested notices that appear to have not
found their way
to the applicant, through that address. That I find
to be convenient. In light of the above, I am satisfied that it was
sufficiently
established that notices informing the applicant of the
contravention of Regulations 25 (1) of the Act and the respondent's
intention
to re-categorise usage of the property, were delivered to
applicant. All that was expected of the respondent was to establish
that
the contravention notices were forwarded to the applicant by
ordinary mail and that it did.
The
applicability of PAJA
[9]
This
application was brought in terms of
s6
(1) of the
Promotion of
Administrative Justice Act 3 of 2000
["PAJA"]. In the
founding affidavit the applicant submitted, that the decision taken
by the respondent to unilaterally
change the category of the
applicant's property from business/commercial to unauthorized/illegal
development use, is administrative
and that it should be reviewed and
set aside in terms of PAJA. I seriously doubt the correctness of that
submission. When dealing
with the legislature's power to raise taxis
or rates, whether nationally or locally, the Constitutional Court in
Fedsure
Life Assurance
[3]
had the following to say:
"... It does not
seem to us that such action of the municipal legislatures, in
resolving to set the rates, to levy the contribution
and to pay a
subsidy out of public funds, can be classified as administrative
action as contemplated by s24 of the Interim Constitution.
In the
past, of course, the action of a municipal council in setting rates
was considered to be an action that was subject to judicial
review on
the principles of administrative law, but the principles upon which
that jurisprudence was based are no longer applicable
as we have
outlined above. It follows that the imposition of the rates and the
levies and the payment of the subsidies did not
constitute
'administrative action' under s24 of the interim constitution."
The
Constitutional Court concluded that the municipality's power to
charge rates is constitutionally vested in the legislature and
that
the exercise thereof is not administrative action
[4]
.
[10] The
averment made by the applicant in paragraph 48 of its founding
affidavit is somewhat confusing. It is
stated;
"This application is
brought in terms of
s6
of the
Promotion of Administrative Justice Act
3 of 2000
but the decision taken by the respondent in any event
does not comply with the general principle of legality.
" My
emphasis.
Immediately
thereafter a submission is again made that the respondent's decision
to re-categorise the rates category of the applicant's
property to
illegal use, constitutes unlawful administrative action in that it
was procedurally unfair, irrational, arbitrary and
in bad faith
[5]
.
This averment is re-iterated in the applicant's supplementary
affidavit.
[6]
The applicant
further alleged that the respondent failed to comply with the
provisions of
s6
(e) (iii) of PAJA when considering the impugned
decision. As already pointed out hereinbefore, charging rates
constitutes legislative,
not administrative action. The applicant's
reliance on PAJA is therefore misplaced. Even if it were not, the
application should
be dismissed solely on the basis of the
applicant's failure to comply with the provisions of
s7
(1) of PAJA,
a peremptory provision requiring
s6(1)
judiciary review to be
instituted without unreasonable delay and within a period of 180 days
from the date during which an affected
person was alerted to the
impugned decision.
[11]
The
present application was, without doubt, brought way out of time. The
applicant had been receiving tax invoices reflecting
re-categorisation
of the property from business/commercial to
illegal/unauthorized use, together with inflated rate charges, with
effect from 15
September 2017 thorough to July of 2018
[7]
.
On this alone, it can safely be concluded that the applicant became
aware of the impugned decision as at September 2017. In paragraph
13.1 of the applicant's founding affidavit the deponent stated: 'upon
receipt of its July 2018 utility invoice, the applicant instructed
its attorneys to make enquires with the respondent in respect of
unknown charge and substantial increase in monthly rates'. It
is
clear, on this version, that the applicant waited for 10 months (from
September 2017 to July 2018) to enquire about the respondent's
decision to change the category of the property from
business/commercial to illegal/unauthorized use. When Zimanga made
representations
on behalf of the applicant in August of 2018 (as
aforesaid), the applicant had already been alerted to the
respondent's decision.
By that time a period of 180 days had already
lapsed. It is common cause that the application papers were only
lodged on the 10
th
of September 2020. There is no explanation on the papers for such a
lengthy delay in bringing the application. There is no request
either
for condonation for late filing. On that alone, the applicant's
application falls to be dismissed.
[12]
In
one line and without more, the applicant sought to suggest in its
founding affidavit, that if the application fails for failure
to
comply with PAJA, then it should be considered as a legality review.
It seems to me that this approach was founded on the remarks
made by
the Supreme Court of Appeal in
National
Director of Public Prosecutions and Others v Freedom Under Law
[8]
where the court stated:
"The legality
principle has now become well established in our law as an
alternative path way to judicial review where PAJA
finds no
application".
But,
as it was held in
SITA
v Gijima Holdings
,
[9]
even if legality review proceedings were instituted, it remained for
the applicant to show, that proceedings were instituted within
a
reasonable time, failing which, that there were nevertheless good
reasons for the court to entertain the application and overlook
the
fact of the unreasonable delay in bringing the application, given the
circumstances of the present case. As already pointed
out, the
dies
for
challenging the impugned decision lapsed in March of 2018. The
applicant advanced no reason whatsoever, why it had to wait till
the
10
th
of September 2021 to set the matter down. In
Buffalo
City v Asla Construction
[10]
the Constitutional Court (per Theron J writing for the majority)
remarked:
"The approach to
undue delay within the context of a legality challenge necessarily
involves the exercise of a broader discretion
than that traditionally
applied to
s7
of PAJA. The 180 – day bar in PAJA does not play
a pronounced role in the context of legality.
Rather, the question
is first one of reasonableness, and then (if the delay is found to be
unreasonable whether the interest of
justice require an overlooking
of that unreasonable delay."
(Emphasis added).
I
have little or no doubt, that a delay for a period in excess of 2
years is unreasonable in the prevailing circumstances. I am
not at
all persuaded that the interest of justice demand that such delay be
overlooked. In any event, no such case is made out
in the application
papers.
[13] I
therefore make the following order.
Order
The
application is dismissed with costs.
Chili
J
Appearances
Counsel
for the applicant: Adv.
AK Olsen
Instructed
by: NCA
Attorneys
8
Sinembe Crescent
La
Lucia Ridge Office Estate
Tel:
031 566 5271
Ref:
T Naidoo/A206L
Email:
theveena@nca-attorneys.co.za
C/O
Messenger King
Suite
706
7
th
Floor, Esplanade Garage
127
Margaret Mncadi Street
Counsel
for the respondent: Adv. AJ
Boulle
Instructed
by: Luthuli
Sithole Attorneys
56
Henwood Road
Durban,
4001
Tel:
031 312 2327
Fax:
031 312 7634
Ref:
E00495/TS/BM
Email:
siphesihle@luthulisithole.co.za
candice@luthulisithole.co.za
Date
of hearing: 21 May 2021
Date
of judgment: 23 August 2021
[1]
Section 3 of the Local Government: Municipality Property Rates Act
No.6 of 2004 provides:
"(3)
A municipality must exercise its powers to ley a rate on property
subject to -
(a) section
229 and any other applicable provisions of the constitution;
(b) the
provisions of this Act; and
(c) the
rates policy it must adopt in terms of section 3."
[2]
See annexure RN 8 (a) at page 56 of applicant's founding affidavit.
[3]
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999
(1) SA 374
at 396 para 45.
[4]
See also
City
of Cape Town and Another v Robertson and Another
[2004] ZACC 21
;
2005
(2) SA 323
(CC)
(2005 (3) BCLR 199
para 62;
Kungwini
Local Municipality v Silver Lakes Home Owners Association
2008
(6) 187 at 194 para 14.
[5]
See para 49 pages 32 and 33 of the index bundle.
[6]
See para 11 of the applicant's supplementary affidavit at page 90 of
the indexed bundle.
[7]
See annexures RN4, RN5 and RN6 at pages at pages 42 through 50 of
the indexed papers.
[8]
National
Director of Public Prosecutions and Others v Freedom Under Law
2014
(4) SA 298
(SCA) para 28.
[9]
State
Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd
2017
(2) SA 63
at 72 para 40.
[10]
Buffalo
City Metropolitan Municipality v Asia Construction (Pty) Ltd
2019
(4) SA 331
at 345 para 50.