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[2012] ZASCA 104
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Ingonyama Trust v Ethekwini Municipality (149/2011) [2012] ZASCA 104; 2013 (1) SA 564 (SCA) (1 June 2012)
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 149/2011
In the
matter between:
INGONYAMA
TRUST
…...................................................................................
APPELLANT
and
ETHEKWINI
MUNICIPALITY
…....................................................................
RESPONDENT
Neutral
citation:
Ingonyama Trust v Ethekwini Municipality
(149/2011)
[2012] ZASCA 104
(1 June 2012)
Bench: Mthiyane DP, Ponnan, Bosielo and Theron JJA and Petse AJA
Heard: 8 November 2011
Delivered: 1 June 2012
Corrected:
Summary:
Rating of State Property Act 79 of 1984 - whether property vesting in
Ingonyama Trust in the Ethekwini Municipality exempt
from rates in
terms of s 3(3)(
a
).
______________________________________________________________________
ORDER
______________________________________________________________________
On appeal from:
KwaZulu-Natal High Court, Durban (Gyanda J
sitting as court of first instance):
1 The appeal is upheld with costs.
2 The order of the court below is set aside to be substituted with:
‘
The application is dismissed with costs.'
______________________________________________________________________
JUDGMENT
______________________________________________________________________
PONNAN JA (Mthiyane DP, Bosielo and Theron JJA and Petse AJA
concurring):
[1] This appeal raises the question whether the property of the
appellant, the Ingonyama Trust (the Trust), is exempt from rates
pursuant to the provisions of s 3(3)
(a)
of the Rating of State
Property Act 79 of 1984 (the Rating Act). The high court (per Gyanda
J) held that it was not. It accordingly
granted an order in favour of
the respondent, the Ethekwini Municipality (the Municipality),
declaring that all immovable property
owned by the Trust, within the
area of the Municipality was rateable by it for certain defined
periods.
[2] It appears to be undisputed on the papers that the Trust's
property was held by the State (Government of KwaZulu) prior to
1994.
1
The Trust is a statutory Trust. It was established by the KwaZulu
Ingonyama Trust Act 3KZ of 1994, an Act of the KwaZulu Legislative
Assembly (the KwaZulu Act). The KwaZulu Act established a corporate
body to be called the Ingonyama Trust (s 2(1)) with the Ingonyama
as
the only trustee of the trust (s 2(3)). In due course the KwaZulu Act
was extensively amended by the KwaZulu Ingonyama Trust
Amendment Act
9 of 1997 (the Amendment Act) - a National Act. In what follows I
shall refer to the KwaZulu Act as amended by the
Amendment Act as the
Trust Act. Section 2A of the Trust Act established a board to be
known as the KwaZulu-Natal Ingonyama Trust
Board (the Board) to
administer the affairs of the Trust and the Trust’s land. The
Board consists of the Ingonyama or his
nominee who shall be the
chairperson of the Board and eight members appointed by the Minister
for Agriculture and Land Affairs
of the National Government (the
Minister) after consultation with various stakeholders including the
Ingonyama, the Premier of
the Province and the Chairperson of the
House of Traditional Leaders of KwaZulu-Natal (s 2A(3)).
[3] The Rating Act repealed various laws that formerly exempted State
property from rates levied by local authorities. Section
3(1) of the
Rating Act provides generally for the rateability of State property
by a local authority. And s 3(3)
(a),
which lies at the heart
of this appeal, provides:
'No rates shall by virtue of
subsection (1) or otherwise be levied by a local authority on the
value of S
tate
property―
(a
) held by the State in
trust for the inhabitants of the area of jurisdiction of a local
authority or of a local authority to be
established.'
The exemption envisaged in s 3(3)
(a)
thus applies if the
property is held:
(i) by the State (ie State property); and
(ii) in trust for the inhabitants of the area of jurisdiction of a
local authority.
It may be convenient to dispose of the second issue first in order to
clear the way for a consideration of the first, which I consider
to
be the substantive issue in this appeal. I shall do so briefly.
[4] For the purposes of this enquiry I shall assume (without
deciding), in favour of the Municipality, that the Trust’s
property does indeed fall within the area of jurisdiction of the
Municipality. Section 2(2) of the KwaZulu Act provided that: 'The
Trust shall ... be administered for the benefit, material welfare and
social well-being of the tribes and communities as [referred
to in
the Schedule] . . .'. That provision is replicated in the Trust Act
(s 2(2)), as are various other provisions including those:
directing
that the said land be dealt with in accordance with Zulu indigenous
law (s 2(4)); restricting the right of the Trust
to encumber,
alienate, pledge etc. the said land unless the written consent of the
traditional authority or community authority
has first been obtained
(s 2(5)); and exempting the Ingonyama from furnishing any form of
security and directing that the Trust
Property Control Act 57 of 1988
shall not apply to the Trust (s 2(6)). Section 3 of the Trust Act
headed ‘Transfer of land
to the Ingonyama in trust’
provides:
'(1) Notwithstanding the
provisions of section 2 of the KwaZulu Land Affairs Act, 1992 (Act
No.
11
of 1992), or any other law―
(a)
any
land or real right therein of which the ownership immediately prior
to the date of commencement of this Act vested in or had
been
acquired by the Government of KwaZulu shall hereby vest in and be
transferred to and shall be held in trust by the Ingonyama
as trustee
of the Ingonyama Trust referred to in section 2(1) for and on behalf
of the members of the tribes and communities and
the residents
referred to in section 2(2).'
In my view the Trust Act, makes it plain that the property of the
former Government of KwaZulu was transferred to the Trust to
be held
by it in trust for the benefit of the ‘tribes and communities
and the residents’ as specified in the Schedule
to the Act. I
accordingly hold that the second requirement has indeed been
satisfied by the Trust.
[5] Turning to the first requirement: State property is defined in
the Rating Act as:
‘
immovable
property within the area of jurisdiction of a local authority ―
(a)
the
ownership of which vests in the State or a governmental institution
and is registered in the name or in favour of the State
or the
governmental institution.'
The definition of ‘State’ is said to include ‘the
Department of Posts and Telecommunications and . . . a provincial
administration’. Although the definition is not particularly
helpful, the use of the word ‘includes’ suggests
that it
is not a closed list.
[6] In
Holeni v Land and Agricultural Development Bank of South
Africa
2009 (4) SA 437
(SCA) para 11, Navsa JA put it thus:
'The State as a concept does not
have a universal meaning. Its precise meaning always depends on the
context within which it is
used. Courts have consistently refused to
accord it any inherent characteristics and have relied, in any
particular case, on practical
considerations to determine its scope.
In a plethora of legislation, no consistency in meaning has been
maintained.'
And in
Greater Johannesburg Transitional Metropolitan Council v
Eskom
2000 (1) SA 866
(SCA) paras 14 and 15, Melunsky AJA had
this to say:
'I turn to consider what is
meant by the expression "the State". In " 'The State'
and Other Basic Terms in Public
Law" (1982) 99
SALJ
212 at 225-6 L G Baxter suggests
that, as a rough description, "the State" appears to be
used as a collective noun for:
"
(a)
the collective
wealth ('estate') and liabilities of the sovereign territory known as
the 'Republic of South Africa' which are not
owned or owed by private
individuals or corporations; and
(b)
the conglomeration of
organs, instruments and institutions which have as their common
purpose the 'management' of the public affairs,
in the public
interest, of the residents of the Republic of South Africa as well as
those of her citizens abroad in their relations
with the South
African 'Government'."
In
The
Shorter Oxford
English Dictionary
vol II at 2112 "State" is defined to
mean,
inter alia
:
"IV. 1 . . .
2. A particular form of
government;
3. The State: the body politic
as organised for supreme civil rule and government; the political
organisation which is the basis
of civil government; hence the
supreme civil power and government vested in a country or nation."
Some of these definitions
describe what is meant by "the State" for the purposes of
international law. These are irrelevant
for the purposes of this
appeal. In its ordinary meaning for the purposes of domestic law the
word is frequently used to include
all institutions which are
collectively concerned with the management of public affairs unless
the contrary intention appears.'
[7] Our Constitution has no definition of ‘State’.
Rather, reference is made to ‘organ of state’, which
s
239 of the Constitution, defines as:
'
(a)
any department of
state or administration in the national, provincial or local sphere
of government; or
(b)
any other functionary
or institu
tion―
(i) exercising a power or
performing a function in terms of the Constitution or a provincial
constitution; or
(ii) exercising a public power
or performing a public function in terms of any legislation, but does
not include a court or a judicial
officer.'
[8] The gist of the submission on behalf of the Trust is that it is
the ‘State’ in one of its guises. Whether that
is indeed
so is what I now turn my attention to. It is noteworthy that here,
eight of the nine Trustees are appointed to their
positions by
central government through the relevant cabinet Minister albeit in
consultation with certain specified stakeholders.
Significantly, in
terms of s 4 of the Trust Act, the Department of Land Affairs is to
bear the cost of the administration of the
Board. Moreover, s 2A(7)
empowers the Minister to make Regulations as to various matters
pertaining to the functioning of the Board
of Trustees of the Trust.
The Minister has promulgated both Financial and Administrative
Regulations.
2
Amongst the various measures prescribed by the Minister, regulation
20 of the Financial Regulations require the financial statements
and
records of the Trust to be audited by the Auditor-General, who
thereafter must submit a report to amongst others the KwaZulu-Natal
Provincial Legislature, National Parliament, the House of Traditional
Leaders of KwaZulu-Natal, the Premier of KwaZulu-Natal and
the
Minister, whilst in terms of regulation 21, the accounting authority
of the Trust is required to report annually in writing
to the
Minister within the period set by the latter on the activities of the
Trust during the financial year.
[9] Section 2(7) of the Trust Act provides that any national land
reform programme shall apply to the Trust’s land. In a
similar
vein s 2 of the KwaZulu Land Affairs Act 11 of 1992 states that the
Premier or the Minister as the case may be, may, subject
to the
provisions of that Act and the Trust Act, sell, exchange, donate,
lease or otherwise dispose of any government land which
vests in the
provincial or national government respectively. One can hardly
imagine the State reserving to itself the right to
apply its land
reform programme to land that it considers it has truly divested
itself of. Similar considerations arise in respect
of the KwaZulu
Land Affairs Act. Its purpose, as that Act itself makes plain, is to
provide for the disposal of government land.
That being so, why it
must be asked, if the Trust’s land was not considered to be
government land, would mention be made
in that Act of the Trust. To
those considerations must also be added sections 3(3) and 3(4) of the
Trust Act. The former provides
that ‘all land and real rights’
shall be transferred from the Government of KwaZulu to the Trust
without the payment
of transfer duty, stamp duty or any other fee or
charge, and the latter that the Registrar of Deeds shall make the
necessary entries
in his or her registers and endorsements on the
relevant title deed, which shall serve ‘as proof of the title
of the Ingonyama
in trust to the said land’.
[10] One, in addition, finds many pointers in related pieces of
legislation that serve as an aid to resolving the present enquiry.
Thus
s 2
(a)
(i) of the
National Forests Act 84 of 1998
defines
'State land' to mean:
‘
land
which vests in the national or a provincial government
―
-
(a)
including
―
(i) land held in trust by the
Minister of Land Affairs or the Ingonyama referred to in the KwaZulu
Ingonyama Trust Act, 1994 (KwaZulu
Act 3 of 1994).'
A similar definition is to be found in s 2(
a)
of the National
Veld and Forest Fire Act 101 of 1998, which provides:
'"State land"
means land which vests in the
national or a provincial government
―
(a)
including land held
in trust by the Minister of Land Affairs or the Ingonyama referred to
in the KwaZulu Ingonyama Trust Act (KwaZulu
Act 3 of 1994).'
And
s 13
of the
South African Schools Act 84 of 1996
headed ‘Public
schools on State property’ reads in subsection 1:
‘
In
this section, immovable property owned by the State includes
immovable property
held in trust on
behalf of a tribe by a trust created by statute.'
Moreover, the Trust is reflected as a National Public Entity in
Schedule 3 of the
Public Finance Management Act 1 of 1999
. The
primary purpose of that Act is to regulate financial management in
the national government and provincial governments. The
significance
of the Trust being reflected as a scheduled public entity for the
purposes of that Act is that the financial and asset
controls
applicable to National and Provincial Governments are applicable to
it as well.
[11] It seems to me that although the meaning of the words ‘State
property’ can be ascertained from the section itself
and also
from the other provisions of the Rating Act, read together with the
provisions of the Trust Act, without resort to other
statutes, the
view that I take of the matter is fortified when regard is had to the
related statutes to which I have alluded. Tellingly,
the legislature
itself, has there defined the ‘Trust’s land’ as
‘State land’. As Melunsky AJA put
it in
Greater
Johannesburg Transitional Metropolitan Council v Eskom
para 20:
'Counsel for the respondent
argued that no regard may be had to the way in which a particular
word is interpreted or defined in
an Act other than the one under
consideration. This proposition seems to go too far. In Edgar
Craies on Statute Law
7
th
ed it is pointed out that in
construing a word in an Act caution is necessary in adopting the
meaning ascribed to the same word
in other Acts. The reason is
obvious but that is not to say that in an appropriate case regard
cannot be had to a common construction
placed on the same word in
other statutes.'
I accordingly conclude that the Trust’s property is indeed
State property as envisaged in s 3(3) of the Rating Act.
[12] It follows that the appeal must succeed. The following order
issues.
1 The appeal is upheld with costs.
2 The order of the court below is set aside to be substituted with:
‘
The application is dismissed with costs.'
________________
V PONNAN
JUDGE OF APPEAL
APPEARANCES
For Appellant: AJ Dickson SC
Instructed by: Mason Inc, Pietermaritzburg
Webbers, Bloemfontein
For Respondent: DJ Shaw QC (with him HS Gani)
Instructed by: Linda Mazibuko & Associates, Durban
Matsepes Inc, Bloemfontein
1
See
generally
MEC for Local Government and
Finance, KwaZulu-Natal v North Central & South Central Local
Councils, Durban & others
[1999] 3
All SA 5
(N);
Greater Johannesburg Transitional
Metropolitan Council v Eskom
2000 (1) SA 866
(SCA)
.
2
GNR
1236 and 1237, 2 October 1998.