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[2010] ZASCA 128
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Nokeng Tsa Taemane Local Municipality v Dinokeng Property Owners Association and Others (518/09) [2010] ZASCA 128; [2011] 2 All SA 46 (SCA) (30 September 2010)
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THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 518/09
In
the matter between
NOKENG TSA
TAEMANE LOCAL MUNICIPALITY
...............
Appellant
and
DINOKENG PROPERTY
OWNERS ASSOCIATION
................
First
Respondent
MINISTER
OF FINANCE: NATIONAL
......................................
Second
Respondent
GOVENMENT
MEC
FOR FINANCE: PROVINCIAL GOVERNMENT,
...........
Third
Respondent
GAUTENG
MEC
FOR LOCAL GOVERNMENT, PROVINCIAL
...............
Fourth
Respondent
GOVERNMENT,
GAUTENG
Neutral citation:
Nokeng Tsa Taemane Local Municipality v Dinokeng Property Owners
Association
(518/09)
[2010] ZASCA 128
(30 September
2010)
Coram:
Harms DP, Heher, Bosielo, Shongwe and Tshiqi JJA
Heard: 27 August
2010
Delivered: 30
September 2010
Summary:
Local
Municipality – Authority of local municipality to levy property
rates – whether local municipality complied with
the relevant
statutes – Effect of
s 10G(7)
of the
Local Government
Transition Act 209 of 1993
on the validity of the council’s
resolutions to levy and recover taxes in respect of immovable
property falling within its
jurisdiction.
ORDER
On appeal from
:
North Gauteng High Court (Pretoria), (Webster J sitting as a court of
first instance):
The appeal is
upheld with costs, including the costs of two counsel.
The order of the
court below is set aside and replaced with the following: ‘The
application is dismissed with costs.”
__________________________________________________________________
JUDGMENT
__________________________________________________________________
BOSIELO JA (HARMS
DP, HEHER, SHONGWE and TSHIQI JJA concurring):
INTRODUCTION
[1] This appeal
concerns the validity of the operating and capital budgets, which
included assessment rate tariffs for properties
within the municipal
area, of the appellant, the Nokeng Tsa Taemane Local Municipality,
for two financial years, namely 2003/2004
and 2004/2005 respectively.
Their validity depends on the provisions of the Constitution and the
terms of s 10G(7) of the Local
Government Transition Act 209 of 1993
(LGTA). The Act (but not the section) was repealed by
s 179(1)
of the
Local Government: Municipal Finance Management Act 56 of 2003
.
[2] The municipality
is a local authority established in accordance with the Local
Government: Municipal Structures Act 117 of 1998.
The area of
jurisdiction of the municipality includes various communities,
amongst which are urban areas such as Rayton and Cullinan,
rural
residential areas such as Roodeplaat, agricultural land and
conservancies, and traditionally Black townships like Refilwe.
[3] The first
respondent, the Dinokeng Property Owners Association, is a voluntary
association representing landowners and residents
within the
municipality’s municipal boundaries. (Second, third and fourth
respondents did not participate in the appeal proceedings
and nothing
need be said about them.) The association was formed on 12 May 2005,
long after the 2003/2004 financial year and a
month or so before the
end of the 2004/2005 year.
[4] Notwithstanding
opposition against the implementation of the assessment rate tariffs,
the municipality proceeded to implement
them. Aggrieved long after
the event by the municipality’s conduct, the association
approached the North Gauteng High Court
on notice of motion dated 16
November 2005 for an order declaring the assessment tariffs approved
by the municipality null and
void and for setting them aside,
together with related ancillary relief. The delay from the assessment
of the tariffs until the
launch of the application was approximately
29 months in respect of the 2003/2004 financial year (which was
implemented with effect
from 1 July 2003) and approximately 17 months
for the 2004/2005 financial year (which was implemented with effect
from 7 July 2004).
The association sought to justify the delay
because it allegedly had serious problems in collating the relevant
information and
in particular in obtaining the evidence of their
expert Professor de la Rey (which was in any event irrelevant). This
may be one
reason why the association did not rely on the provisions
of the
Promotion of Administrative Justice Act 3 of 2000
.
[5] On 18 March 2009
the court below (Webster J) granted the declaratory orders sought by
the association. The municipality is appealing
against that order
with the leave of the court below.
THE STATUTORY REGIME
APPLICABLE
[6] Section
229(1)(a) of the Constitution provides that
a
municipality may impose rates on property and surcharges on fees for
services provided by or on behalf of the municipality. The
function
belongs to the municipal council and it may not delegate the approval
of budgets or the imposition of rates and other
taxes, levies and
duties (s 160(2)). The power to impose rates and the like is subject
to s 229(2)(a), which states, inter alia,
that the power may not be
exercised in a way that materially and unreasonably prejudices
national economic policies.
[7] It would appear
that if a municipality has delegated its power to impose rates, its
conduct might be declared invalid in terms
of s 172(1)(a) of the
Constitution. See
Islamic Unity Convention v Independent
Broadcasting Authority
[2002] ZACC 3
;
2002 (4) SA 294
(CC) paras 10-11;
City
of Cape Town v Robertson
[2004] ZACC 21
;
2005 (2) SA 323
(CC). But that is not
the end of the matter. A court is still duty bound to exercise its
discretion by making an order that is
just and equitable and it may
limit the retrospective effect of the declaration of invalidity (s
172(1)(b).)
[8] The obligation
of a municipality not materially and unreasonably to prejudice
national economic policies by its rates is juridically
of the same
kind as two other provisions on which the association relied, namely
s 152(1)(c) and s 195(1)(b). The first provides
that an object of
local government is to promote social and economic development and
the second deals with the basic value of public
administration which
requires that the efficient, economic and effective use of resources
must be promoted. These provisions are,
as submitted by the
municipality, not justiciable by courts. (I should note that counsel
for the association did not suggest otherwise
during argument.) The
same view was expressed by this court (per Cameron JA) who echoed the
misgivings of Froneman J in (
CDA Boerdery (Edms) Bpk v Nelson
Mandela Metropolitan Municipality
[2007] ZASCA 1
;
2007 (4) SA 276
(SCA) paras
45-46). These provisions concern political and inter-governmental
issues, evidently specialist areas involving policy
issues and a
consideration of a host of other issues in respect whereof the court
does not have the necessary expertise. It would
be wrong for the
courts to usurp the powers of municipalities and determine rates and
taxes for them. The best course for a court
is to show judicial
deference to the decisions taken by democratically elected municipal
councils.
[9] In
Doctors
for Life International v Speaker of the National Assembly &
others
[2006] ZACC 11
;
2006 (6) SA 416
(CC) Ngcobo J stated in this regard that
(at para 37):
‘
Courts
must be conscious of the vital limits on judicial authority and the
Constitution’s design to leave certain matters
to other
branches of government. They too must observe the constitutional
limits of their authority. This means that the judiciary
should not
interfere in the other branches of government unless to do so is
mandated by the Constitution.’
[10] In view of this
conclusion it will be unnecessary to revert to the contention on
behalf of the association that the new tariffs
offended s 229(2)(a)
of the Constitution in that they unreasonably prejudiced national
economic policies.
[11] The procedure a
municipality must follow in imposing property rates was set out in s
10G(7) of the LGTA. It provided that the
levying of property rates on
immovable property in the area of jurisdiction of a municipality must
be by way of a council resolution
and in
determining
property rates a municipality may differentiate between different
categories of users or property on such grounds as
it may deem
reasonable. (The provisions concerning the levying of rates in
relation to services are not germane to this case.)
[12] After such a
resolution has been passed,
‘
the
chief executive officer of the municipality shall forthwith cause to
be conspicuously displayed at a place installed for this
purpose at
the offices of the municipality as well as at such other places
within the area of jurisdiction of the municipality
as may be
determined by the chief executive officer, a notice stating–
(i) the general purport of the
resolution;
(ii) the date on which the
determination or amendment shall come into operation;
the date on which the notice is
first displayed; and
that any person who desires to
object to such determination or amendment shall
do so in writing within 14 days
after the date on which the notice is first displayed.
(Section 10G(7)(c).)
[13] Where an
objection is lodged within the 14 day period
‘
the
municipality shall consider every objection and may amend or withdraw
the determination . . ..’
(Section 10G(7)(d).)
[14] It is important
to mention that the mere failure to comply with one or other
administrative provision does not mean that the
whole procedure is
necessarily void. It depends in the first instance on whether the Act
contemplated that the relevant failure
should be visited with nullity
and in the second instance on its materiality (see in general
Nkisimane v Santam Insurance Co Ltd
1978 (2) SA 430
(A)
433H-434E). To nullify the revenue stream of a local authority merely
because of an administrative hiccup appears to me to
be so drastic a
result that it is unlikely that the Legislature could have intended
it. Furthermore, declaratory orders are also
discretionary.
[15] To illustrate
the problem: In terms of s 152(1) of the Constitution, provision of
services to communities in an effective and
sustainable manner
remains one of the fundamental objectives of every local government.
Undoubtedly this is a constitutional mandate.
It is a known fact that
rates and taxes are important sources of revenue for municipalities
which enable municipalities to meet
their obligations to the
communities they serve. Self-evidently any refusal by ratepayers to
pay their rates and taxes is likely
to have grave consequences for
any municipality. The assessment of rates for 2003/2004 was approved
and implemented on 1 July 2003
whilst that for 2004/2005 was
implemented on 7 July 2004. The municipality required these monies to
meet its budgetary requirements.
The application to have them set
aside was only launched on 16 November 2005. This has had the effect
of suspending the implementation
of the resolutions. This impasse is
still continuing. There is no doubt herein that the delay herein is
so inordinate that, irrespective
or the merits, it would be
impractical to reverse the entire process. Manifestly, the effect of
such a reversal would be disastrous
for the municipality. Suffice to
state that it is in the interests of justice that people who intend
to impugn decisions taken
by municipalities should do so as
expeditiously as possible to avoid any possible disruption of the
provision of essential services.
See
Gqwetha v Transkei
Development Corporation Ltd
2006 (2) SA 603
(SCA) at 612E-J.
ATTACK ON THE
RESOLUTIONS
[16] The assessment
rate tariffs that were to apply to households were, in terms of both
resolutions, described with reference to
two categories. The first
was for ‘urban areas and surrounding properties’ at one
rate and the other, at a lower rate,
for ‘rural areas
(previously known as Pienaarsrivier, Elandsrivier, and Roodeplaat
respectively).’
[17] It was
submitted on behalf of the association that the use of the phrase
‘surrounding properties’ made the notices
vague and
thereby void because ratepayers would have been unable to determine
the areas referred to in the notices. There is no
merit in the
submission. All properties within the municipal area of jurisdiction
are subject to property rates. This means that
all properties within
the municipality have to fall within one or other of the two classes.
‘Surrounding properties’
must, accordingly refer to those
properties that are not urban or rural (as defined).
THE ATTACK ON THE
NOTICES: THE OBJECTION PERIOD
[18] On 28 May 2003,
the municipality issued a notice, giving notice in terms of s
10G(7)(c) of the LGTA that its council had resolved
on 26 May 2003 to
adopt the operating and capital budget for the 2003/2004 financial
year and further that tariffs determined in
the same budget would be
implemented with effect from 1 July 2003. As its terms are in issue,
I deem it necessary to reproduce
the notice hereunder–
‘
LOCAL
AUTHORITY NOTICE NOKENG TSA TAEMANE LOCAL MUNICIPALITY
NOTICE OF APPROVAL OF THE BUDGET
AND TARIFF AMENDMENTS
Notice is hereby given in terms
of the provisions of
Section 10G(7)(c)
of the
Local Government
Transition Act, Second
Amendment Act, 1996, read with Section 75A of
the Municipal Systems Act, 2000 (Act 32 of 2000) that on 26 May 2003,
Council resolved
to adopt the Operating and Capital budget for the
2003/2004 financial year, and that the tariffs determined in the
budget will
be implemented with effect from 1 July 2003.
The said Council resolution is
available for inspection at the Council offices in Rayton, Refilwe,
Roodeplaat, Onverwacht and the
library in De Wagensdrift, during
normal office hours, 08:00 to 16:15 from Monday to Friday.
Any person who desires to object
to the determination should do so in writing within 14 days of the
date hereof. Objections are
to be addressed to the Municipal Manager,
P O Box 204 Rayton 1001.
A J BOSHOFF: MUNICIPAL MANAGER’
[19] On 8 June 2004,
the municipality issued a similarly worded notice in relation to the
2004/2005 financial year, save for the
date of the resolution, which
was 7 June 2004, and the date for implementation, which was 7 July
2004.
[20] It is not in
dispute that the two notices were conspicuously displayed on the
dates and at the places mentioned in the notices
as required by s
10G(7)(c) of LGTA. The complaint set out in the founding affidavit
related to the fact that the municipality had
published the notices
in a number of newspapers without having stated the date on which the
objection period commenced. In other
words, the dates from which the
14 days for objections were supposed to run did not appear in the
advertisements. This complaint
can be disposed of summarily. The
association’s case was built on non-compliance of the
provisions of the Act but the Act
does not require newspaper
advertisements. To the extent that the association might have sought
to rely on the fact that members
of the public might have been
misled, there is no evidence that anyone was prejudiced by the
omission in the advertisements. In
any event, the association did not
event exist when the advertisements were published.
ATTACK ON THE
NOTICES: THE GENERAL PURPORT
[21] The second
attack on the notices was that they were flawed because they did not
set out the ‘general purport’ of
the resolutions as
required by s 10G(7)(c)(i). It was submitted that they should have
given clear, full and specific details of
the resolutions and their
nature and effect, and that it was not sufficient to have stated
simply that the budget had been adopted
and that it contained the new
property rates and to invite the public to inspect the detail at the
municipality’s offices.
[22] It is clear
that the section does not require details of the resolution and
assessment to be published. Contrary to the submission
by the
association that the notice must set out, amongst others, the rates,
areas affected, rebates applicable and the real and
true effect of
the increases of the rates, I hold the view that this does not accord
with the ordinary grammatical meaning of the
phrase ‘general
purport.’
[23] It is true that
there is some uncertainty regarding the meaning of this phrase. The
definition in
Webster’s New Twentieth Century Abridged
Dictionary
(2 ed) is apposite. Webster defines the noun “purport”
to also mean ‘concerned with the main or overall features;
lacking details, not specific; as if these are the general
characteristics’ and ‘vague; not precise; as, he spoke in
general terms.’ And ‘general’, according to the
Concise Oxford English Dictionary
(10 ed revised) also means
‘involving only the main features or element and disregarding
exceptions; overall.’
[24] The adjective
‘general’ qualifies the noun ‘purport.’ The
conjunction was not accidental but deliberately
intended to make
clear that specific details are not required. In this case the
requirement was satisfied because interested parties
were advised
that the resolutions were available for inspection. This accords with
what Alexander J stated about this phrase in
Rampersad v Tongaat
Town Board
1990(4) SA 32 (D) at 37G:
‘…
.
“general purport” then involves an intimation that what
follows broadly covers a specific topic. If I may expand the
notion
it would be tantamount to the Board having to say this: We are not
providing you with all the details in this Notice but
they relate to
a rezoning of the La Mercy Township….’
The learned judge
proceeded (at 37I-J) to elucidate in terms pertinent to the notices
with which this case is concerned:
‘
I think
the point is made because the section specifically adopts the more
practical course of directing inquiries to the Town Offices.
In this
sense the actual mechanics of the proposed scheme, if I may so
describe it, are not to be specified in the Notice, but
can be
scrutinised at close range elsewhere. The section thus interpreted
would support the meaning advanced by the applicants:
Let the Notice
give us some indication that we are the ones affected by the
proposals and then it is up to us to take a closer
look at them.’
[25] This
interpretation is sound, practical and accords with common sense and
logic. It follows that the association’s submission
that the
two notices were defective in that they did not contain sufficient
details to adequately inform ratepayers of what they
were about is
without merit.
THE FAILURE TO
CONSIDER OBJECTIONS
[26] The association
also argued that members of the public had registered objections
against the determination of the tariffs but
that the municipal
council had failed to consider them as required by s 10G(7)(d)(ii) of
the LGTA.
[27] It is clear
from various letters written by other interested parties that there
was some serious discontent with the new tariffs
fixed by the
municipality to a point where the municipality was threatened with a
boycott by ratepayers. An acrimonious dispute
ensued between the
municipality and the association. Notwithstanding this impasse the
municipality proceeded to implement the tariffs.
Confronted by
ratepayers who withheld their payments, the municipality threatened
legal action.
[28] In analysing
this matter, Webster J found that ‘the only issue of relevance
is whether the adjudication, if indeed there
was one, by the
executive committee on the merits, or otherwise of the objections
lodged and received by the association was adequate
in the
circumstances.’ The learned judge found that that the record
showed that the objections were ‘noted’ by
the executive
committee and not considered by the council. This was, first, in
conflict with the clear prohibition embodied in
s 160(2) of the
Constitution against a municipal council delegating this function,
and second, ‘noting’ the objections
implied that the
objections had not been considered. Based on this the learned judge
concluded that ‘the failure to address
such objections
constitutes a fundamental violation of the rights of the applicants’
and that ‘the applicant has succeeded
in proving that the
approval of the levying of rates for 2003/2004 year was patently
flawed and therefore lacked legal validity
to enable association to
levy taxes in accordance with the provisions of the budget.’
[29] Concerning the
assessment for 2004/2005 financial year, Webster J found that
objections lodged with the municipality were never
considered, not
even by the executive committee. Relying on
Kungwini Local
Municipality v Silver Lakes Homeowners Association
[2008] ZASCA 83
;
2008 (6) SA
187
(SCA) para 36, he found that there was no compliance, strict or
substantial, with the relevant statutory provisions. Accordingly
he
granted the relief sought by the association.
[30] Mr Sutherland
for the municipality confined his submissions in this court to a
two-pronged attack against the judgment of the
court below. Firstly,
he submitted that the alleged objections lodged did not qualify as
‘objections’ contemplated
by s 10G(7)(c)(iv). He
contended that for an objection to qualify as an objection in terms
of this section, it had to be lodged
in writing within 14 days after
the date on which the notice was first published. He submitted that
none of the objections relied
upon had been lodged within the
stipulated 14-day period. Concerning the objections lodged in respect
of the 2004/2005 assessment,
he contended that all the letters
received by the municipality contained complaints as opposed to
objections. Furthermore, he pointed
out that all the letters
pre-dated the relevant resolution and were sent before the
publication of the second notice on 7 June
2003, hence they did not
meet the requirements of s 10G (7) (c) (iv) which required lodging
within 14 days from the date of publication
of the notice. These
submissions were factually correct and the association’s
counsel had no answer to them.
[31] Counsel’s
second argument was that the allegation that the objections lodged
were considered not by the council but by
the executive committee
contrary to s 10G(7)(d)(ii) was never part of the association’s
case. It was raised for the first
time in the association’s
replying affidavit in an oblique manner without having applied for
condonation to raise it. This
is in conflict with well-established
procedures in motion proceedings (
Director of Hospital Services v
Mistry
1979 (1) SA 626
(A)). It would moreover be unfair to
consider this point, more so that the municipality never had an
opportunity to deal with it.
In any event, the presumption
omnia
praesumuntur rite esse acta
requires of a court to assume in the
absence of evidence to the contrary that the correct procedures were
followed.
CONCLUSION
[32] It is clear
that the relationship of the municipality and the association is
frosty. Sadly the record reveals a disruptive
and obstructive
attitude by the association. The association used every conceivable
legal stratagem to avoid the legal obligations
to pay rates and
taxes. By its conduct it has involved the municipality in a long
drawn out and expensive litigation. It is trite
that municipalities
are assigned the difficult task to govern and administer their own
areas. Importantly municipalities have a
constitutional mandate to
spend their resources in an efficient and cost effective manner for
the benefit of their communities
and in promoting social and economic
development. It is inexcusable that municipalities should be forced
to waste their scarce
resources in defending frivolous and spurious
claims in our courts instead of using same to provide essential
services to the ratepayers
and thereby improving the lives of the
people. Despite the submissions to the contrary by the association’s
counsel there
is no reason why costs should not follow the result.
[33] The following
order is made:
The appeal is
upheld with costs, including the costs of two counsel.
The order of the
court below is set aside and replaced with the following: ‘The
application is dismissed with costs.”
________________
L O Bosielo
Judge of Appeal
APPEARANCES:
For
Appellant: R Sutherland SC
G
I Hulley
Instructed
by:
Maserumule
Inc.: Johannesburg
Honey
Attorneys: Bloemfontein
For
Respondent: R du Plessis SC
WJ
Botha
Instructed
by:
Grutter
& Grobbelaar: Pretoria
Bezuidenhouts
Inc.: Bloemfontein