THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 737/2021
In the matter between:
THE THABA CHWEU RURAL FORUM First Appellant
APPELLANTS LISTED IN ANNEXURE “A”
TO THE NOTICE OF APPEAL Second and Further Appellants
and
THE THABA CHWEU LOCAL MUNICIPALITY First Respondent
THE SPEAKER OF THE MUNICIPAL COUNCIL
OF THE THABA CHWEU LOCAL MUNICIPALITY Second Respondent
THE MUNICIPAL MANAGER OF
THE THABA CHWEU LOCAL MUNICIPALITY Third Respondent
Neutral Citation: The Thaba Chweu Rural Forum & Others v The Thaba
Chweu Local Municipality and others (737/2021) [202 3]
ZASCA 25 (14 March 2023)
Coram: MOLEMELA, NICHOLLS and MOTHLE JJA and MALI
and SIWENDU AJJA
Heard: 15 November 2022
Delivered: 14 March 2023
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Summary: Constitutional Law – local government – Municipal Property
Rates Act 6 of 2004 – whether the impugned rates notices ought to be
declared invalid – what appropriate order should be made in terms of
s 172(1)(b) of the Constitution – whether the appellants were entitled to the
interdictory relief claimed.
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______________________________________________________________
ORDER
______________________________________________________________
On appeal from: Mpumalanga Division of the High Court, Mbombela (Legodi
JP with Sigogo and Greyling -Coetzer AJJ concurring, sittin g as a court of
appeal):
1. The appeal succeeds.
2. The order of the Full Court of the Mpumalanga Division of the
High Court is set aside and substituted by the following order:
‘2.1 The rate notices published by the respondents in terms of
s 14(2) of the Local Government: Municipal Property Rates Act 6 of
2004 in the Mpu malanga Pro vincial Gazette of 10 July 2009, 9 July
2010; 27 May 2011, 29 August 2012; 19 August 2013, 22 July 2015;
22 July 2016; 25 August 2017 and 6 October 2018, as well as the
further rates notice published by the respondents dated July 2014 in
respect of the 2014/2015 financial year, including the resolutions of the
municipal council on which all such rates notices were based, where
applicable, are hereby declared unlawful and invalid to the extent that
they relate to agricultural properties used or pe rmitted to be used for
crop and/or animal farming (agricultural property);
2.2 The respondents may recover from the members of
the appellants, only the amounts of the agricultural property rates
calculated based on the Local Government: Municipal Property Rates
Act 6 of 2004 and the Regulations promulgated in terms thereof , less
any amount in excess of the legally permissible limit, in respect of each
financial year from 2009 to 2018;
2.3 The respondents are further liable to credit the accounts of the
appellants’ members who were levied and paid municipal rates, only to
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the extent of the amounts in excess of the legally permissible limit of
the rate s chargeable to the agricultural properties in its municipal
jurisdiction in respect of each financial year from 2009 to 2018; and
2.4 On recovery of arrear municipal rates due, t he respondents may
charge the rate of interest as published in terms of section 96 read with
section 97(1)(e) of the Local Government: Municipal Systems Act 32 of
2000 in respect of each financial year from 2009 to 2018.
3. The respondents are ordered in future not to levy property rates on any
agricultural property in its municipal jurisdiction at a rate that exceeds
that legally prescribed and, such rate must be determined in terms of
the procedures prescribed by law.
4. The first respondent is ordered to pay the appellants the costs of the
appeal, including costs of two counsel, but excluding the costs of
delivering the heads of argument after the hearing of the appeal. The
costs against the first respondent shall include the costs in the
high court and those on appeal in the full court of the Mpumalanga
Division of the High Court.
JUDGMENT
______________________________________________________________
Mothle JA (Molemela and Nicholls JJA and Ma li and Siwendu AJJA
concurring)
[1] At the heart of the dispute that triggered the litigation which resulted in
this appeal , is a challenge by the first, second and further appellants to the
lawfulness and validity of the municipal rates imposed on their prop erties,
through resolutions and notice s published by the Thaba Chweu Local
Municipality, cited as the first respondent , (the municipality). The municipality
was established for the area of Lydenburg/Mashishing in Mpumalanga. The
municipal rates at issue in this appeal were levied on farm properties, (as
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opposed to urban or residential properties) during the period 1 July 2009 to
1 June 2017.
[2] The factual background is briefly that prior to the advent of Constitutional
democracy in South Africa in 1994, farms in general were excluded from the
rateable properties within the jurisdiction of municipalities. Consequently, the
farm owners were not levied municipal rates for their properties. In
establishing the local sphere of government, the Constitution1 put paid to that
arrangement. Section 151(1) of the Consti tution provides that ‘The local
sphere of government consists of municipalities which must be established for
the whole of the territory of the Republic .’ As a result, every patch of land in
the Republic, including farms, fell under one or other municipality. For the first
time, the farm owners became liable for payment of municipal r ates levied on
their properties, as a source of revenue for the municipality.
[3] This development , compounded by the fact th at the levying of the
municipal rates was unlawfully implemented by the municipality, caused
discontent on the part of the farmers whose properties fell under its
jurisdiction. In 2008, and in anticipation of the municipal rates being levied, the
farm owners resolved to establish a voluntary association named the Thaba
Chweu Rural Forum (the appellants). The appellants’ purpose was, amongst
others, to represent the farmers in their engagement with the municipality,
mainly on the issue of levying of municipa l rates. Some of the farmers have
been refusing to pay the rates levied since inception in July 2009.
[4] The legal framework for the le vying of municipal rates has its genesis in
s 229 of the Constitution, which empowers a municipa lity to impose rates on
property and surcharges on fees for services provided by or on behalf of the
municipality and, if authorised by national legislation , other taxes, levies and
duties appropriate to local government . T he national legislation is the Local
Government: Municipal Property Rates Act 6 of 2004 (the Rates Act). Sectio n
1 The Constitution of the Republic of South Africa, 1996.
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3 of the Rates Act provides that a municipality must exercise its powers to
levy rates , subject to the other sections of the same statute , including the
Regulations promulgated by the Minister for Provincial and Local Government
(Minister) in terms of s 19 of the Rates Act , as well as the policy resolutions
adopted by the municipal council in terms of s 14 of the Rates Act.
[5] Section 8 of the Rates Act authorises the municipality to levy different
rates f or different categories of properties. The categorie s of properties for
levying rates are determined according to the actual or permitted use of that
property and its location within the municipality. The Regulations as published
by the Minister in terms o f s 19 of the Rates Act, determined that the effecti ve
rate to be levied on agricultural properties conducting crop and/or animal
farming, may not exceed 25% of the effective rate levied on residential
properties. The rates are generally determined as th e amount in a Rand,
calculated on the market value of the property, which market value is in turn
determined by a valuer appointed by a municipality. The valuation of the
properties are published in the valuation roll in terms of sections 30; 33(1) and
49(1) of the Rates Act.
[6] The appellants allege that betwe en 2009 and 2017, the respondents
failed to meaningfully comply with the provisions of the Rates Act , the
Regulations and the municipal councils’ policy concerning the levying of
property rates and granting of rebates . The appellants further contended that
in determining the rates payable, the respondents failed to consult with the
population in the area, as prescribed by law. Each financial year, they levied
excessive rates above the 25% prescribed r atio for agricultural properties and
failed to comply with the process allowing objections to the valuations in terms
of s 49 of the Rates Act, specifically in respect of the compilation of the
2014/2015 second valuation roll. As a result, there are recorded ex amples of
farm properties that experienced sudden massive increases in market value,
such as a company known as Moon Cloud 25 (Pty) Ltd, whose property’s
market value appreciated from R1 170 000 since the 2009 initial valuation, to
R12 180 000 in the 2014/2015 second valuation roll. That increase in market
value of the property translated in the levied rates of that property escalating
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from R1 432.08 levied in the 2013/2014 financial year to R149 448.60 levied
from the 2014/2015 and subsequent financial years.
[7] For each of the years between 2009 and 2017, the appellants attempted,
without success, to persuade the respondents to enable public par ticipation in
the process . In 2017 , the appellants turned to the Gauteng Division of the
High C ourt Pretoria, fu nctioning as the Mpumalanga Circuit Court in
Mbombela, Mpumalanga (the high court), for appropriate relief.
[8] The following is a brief trajectory of the litigation that ensued, resulting in
the appeal before this Court. On 7 June 2017, the appellants launched an
application in t he high court which had two parts: A and B. In part A, they
essentially sought relief against the municipality, the Speaker of the Municipal
Council (the second respondent) and the Municipal Manager of the
municipality (the third respondent), (in this judgment collectively referred to a s
‘the respondents ’). The respondents include the previous officials of the
municipality as the predecessors who were in office at the time the impugned
rates were levied. The relief sought against the r espondents was that they be
ordered to deliver to the appellants, their members’ property rates accounts
for the period 1 July 2009 to 1 June 2017 , including the notices published and
resolutions adopted by the municipal council concerning the determinatio n of
the rates, as well as copies of minutes of meeti ngs held concerning the rates,
and ancillary relief.
[9] The relief sought in part A was granted by Basson J on 20 August 2018.
After receiving some of the documents from the respondents, it became
evident that not all the appellants’ members were conducting agricultural
farming in crops and/or animals as defined, and therefore some of them did
not qualify for the rates determined for that category of properties. Some of
these excluded members’ farms fell under categories of properties conducting
business in game-farming, hospitality and residence. These categories were
not levied the rates which are the subject of the review in this case.
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[10] Part B of the application, which became opposed by the respondents as
successors in title of the erstwh ile municipal office bearers, was placed under
case management. On 2 October 2018, the Judge President of the high court ,
following a case management meeting, decided on a truncated period of
exchanging affidavits and documents between the parties , and scheduled the
date of hearing as 10 June 2019. In part B the appellants sought relief, in
essence that the rates published annually in the Mpumalanga Provincial
Gazette in terms of s 14(2) and (3) the Rates Act, as well as publication of
further rates notices in newspapers and the resolutions of the municipality’s
council, authorising the publication of such rates notices, be declared unlawful
and be set aside. Further, that the municipality be directed not to levy property
rates on any farm or agricultural property in its muni cipal area at a rate
exceeding the prescribed ratio of 1:0 25, i.e. 25% of the effective rate
applicable to the residential property, as contemplated in s 8 of the Act, unless
the Regulations providing for the effective rates are repealed or amended by
the Minister in terms of s 83 read with s 19(1)(b) of the Rates Act.
[11] The respondents in their answering affidavit conceded that at all
relevant times mentioned in the founding affidavit, the levying of pr operty
rates on agricultural farms , the adoption of resolutions by the municipal
council concerning the rates as well as the published notices concerning the
impugned rates, were inconsistent with the Rates Act, and therefore unlawful
and invalid . The records of the municipal council including notices and
minutes of meetings evidencing the determination of the second valuation roll
for the 2014/2015 and subsequent years, went missing. The significance of
these missing documents means that there is no evidence in support of the
determination of the municipalit y’s second valuation roll. It is this second
evaluation roll adopted in the 2014/2015 financial year, which caused massive
increases in property values , resulting in the determination and levying of
inflated municipal rates.
[12] All these factual allegations were not disputed. In fact, the respondents
concede that much. However, though the respondents do not dispute that
their predecessors acted unlawfully, they remain opposed to the order sought
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by the appellants to have the impugned property rates set aside. The basis of
opposing the relief is that the appellants delayed instituting the litigation . The
respondents further contend that consequent to such delay, a retrospective
invalidation of the rates levi ed will impact on the budgets approved in the
previous years, resulting in prejudice to the municipality. The prejudice lies in
the fact that the subsequent budgets, of which the municipal rates were an
integral part, were determined and are reliant on the basis of the budgets of
the preceding financial year s. As such, it will not be feasible to turn the clock
back, as it were.
[13] The judgment of the high court on part B was delivere d by Jansen van
Rensburg AJ on 4 July 2020. The high court declined to grant an order
declaring the conduct of the respondents un lawful and therefore invalid, and
also declined to set aside the impugned rates, as a consequence of the
invalidity. The court essentially ordered the respondents that in future , they
must comply with th e statutory prescripts applicable to Local Government in
regard to tabling , amending and publication of future budgets , and awarded
costs against the respondents.
[14] The appellants, aggrieved by the failure of the high court to order a
declaration of constitutional invalidity and setting aside of the impugned rates,
turned to the Full Court of the Mpumalanga Division of the High Court (the full
court). The respondents lodged a cross -appeal, also contending that the
high court erred in failing to issue a decl aration of invalidity, but requested the
full court, for reasons stated in para 11 of this judgment, not to grant an order
setting aside the unlawful and invalid conduct of the respondents. The
respondent also challenged the order of the high court awarding costs to the
appellants.
[15] The full court ’s judgment was delivered by Legodi JP on
26 March 2020. Although the full court judgment accepted that the high court
had erred in not declaring the unlawful actions of the municipality invalid, the
full court refrained from granting any order setting aside the inva lid conduct of
the respondents, mainly because the appellants had delayed in approaching
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the high court. The full court, as had the high court, included an order to the
respondents, in a form of what was no more than an admonition to the effect
that in future, the respondents should comply with the legal prescripts.
[16] The appellants, still aggriev ed that the f ull court did not set aside the
unlawful conduct of the respondents , successfully approached thi s Court on
petition. Initially in their papers, the appellants sought relief in this Court that
the unlawful and invalid municipal rates be set aside. At the commencement
of the hearing of the appeal, the appellants’ counsel indicated that the
appellants who are yet to pay the municipal rates, are willing to pay the
amount owing minus the portion which exceeded the prescribed ratio of 1:025
of the effective rate applicable to the residential property, as contemplated in
s 8(2)(b) of the Rates Act. The appellants no longer pressed for the relief from
the Court setting aside the impugned conduct. The respondents declined that
offer and insisted on their demand to recover the full amount of the impugned
rates levied, including the rates unlawfully imposed in exce ss of the legally
prescribed limit for agricultural properties.
[17] The appellants’ contention is based on s 172(1) of the Constitution
which provides:
‘When deciding a constitutional matter within its power, a court—
(a) must declare that any law or conduct th at is inconsistent with the Constitution is
invalid to the extent of its inconsistency; and
(b) may make any order that is just and equitable, including-
(i) an order limiting the retrospective effect of the declaration of invalidity;
and
(ii) an order suspending the declaration of invalidity for any period and on
any conditions, to allow the competent authority to correct the defect.’
[18] The respondents having conceded the appellants’ request for the
declaration of invalidity in terms of s 172(1) (a) of the Constitution, the crisp
issue in this appeal is therefore, whether this Court should grant an order that
is just and equitable in terms of s 172(1) (b) of the Constitution . This form of
relief is discretionary. The Court may, for reason s of equity and in the interest
11
of justice, invoke such relief where circumstances of the case cry out for
justice to be served.
[19] The judgment of the full court relied on this Court’s majority decision in
South African Property Owners Association v Johannesburg Metropolitan
Municipality and others2 (SAPOA). In SAPOA, the members of the property-
owners association, who were business property owners in Johannesburg,
applied to have the court review and set aside, alternatively to declare null
and void, the 2009/2010 budget determined on the property rate of 1,54 cents
in the R and, levied by the Johannesburg Metropolitan Municipality in
contravention of s 19 of the Rates Act. The high court had found that the
levying of property rates is not an integral part of the budget process .
Consequently, the high court concluded thus: ‘. . . the grant of t he relief sought
by SAPOA was not in the public interest because it would probably bankrupt the City
and, as a result, the City would not be able to perform its constitutional duties. ’ As a
result, SAPOA ’s contention that the City of Johannesburg failed to comply
with the prescribed statutory requirements and procedures in imposing the
impugned rates, was dismissed. SAPOA turned to this Court on appeal.
[20] The majority3 in this Court upheld the appeal . In d oing so, the Court ,
contrary to the high court, declared that the City of Johannesburg in fact and
in law, failed to comply with the prescribed statutory requirements and
procedures in imposing the impugned rates . The impugned rates were ,
however, not set aside. Instead, this Court further declared that in f uture, the
first respondent was obliged to comply with the provisions of the Rates Act
and other listed legal prescripts. Further and contrary to the finding by the
high court, t he majority in this Court also concluded that the municipal rates
are an integral part of the budget process . The majority reasoned in para 71
and 72 as follows:
2 South African Property Owners Association v Johannesburg Met ropolitan Municipality and
others [2012] ZASCA 157; 2013 (1) SA 420 (SCA).
3 The honourable Mr. Justice Southwood AJA, dissented as to the order only.
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’Although counsel on behalf of SAPOA persisted in having the rate improperly
imposed set aside, he advisedly recognised the difficulties of a court even attempting
to set a side the 2009/2010 budget , two budgetary periods thereafter. Successive
budgets are based on surpluses or deficits from prior periods. One is built on the
outcome of the other. This, in modern language, is called a knock -on effect. The
legality of the budg ets for the successive periods has not been challenged.
Considering the knock-on effect it must be so that any subsequent increase in rates
would have owed its genesis to and be en premised on the rate pr esently sought to
be impugned.
Another factor milita ting against the setting aside of the 2009/2010 budget is that,
given the historical over -recovery from the commercial sector, the lapse of
time – three years hence – will have a harsh impact on struggl ing individual
home-owners who would not in the inte rvening years have made provision for
dealing with the effects of the setting-aside of the budget.’
[21] The full court in the present appeal declined to set aside the unlawful
rates levied by the respondents or grant some form of just and equitable relief
to the appellants. Likewise, it grounded its reasonin g on the delay by the
appellants in launching the litigation against the respondents. It is common
cause that the appellants made their objections and d isapproval on the
unlawfulness of the imposition of t he rates known to the respondents’
predecessors since 2009 , with the view to achieve meaningful participation
and consultation as prescribed by law. I will return to this aspect later in this
judgment. For the record, the impugned rates were levied from the 2009/2010
financial year . I turn to deal with the full court’s finding that the appellant s
delayed instituting the litigation against the respondents.
[22] In the case of a review which is based on the gr ounds stated in s 6 of
the Promotion of Administrativ e Justice Act 3 of 2000 (PAJA), s 7(1) thereof,
prescribes the period within which such review has to be instituted, which is
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180 days. 4 The subject of delay when instituting a review becomes more
complex where the grounds of review are based on the princi ple of legality or
rationality, as in such instance, there is no statutorily prescribed period within
which a party may institute a review challenge.
[23] The appellants’ application was launched in 2017, at tacking the rates
imposed from 2009/2010 financial ye ar. The respondents in this Court, as
before in the full court, argued on authority of SAPOA, that the delay by
appellants instituting litigation would have ‘a knock-on effect’ and result in the
retrospective invalidation of the municipal ity’s previous annual budgets. Such
invalidation was expressed metaphorically as an exercise similar to
‘unscrambling an egg’. The subject of delay in instituting proceedings has
been considered by our courts over the yea rs. The approach in deal ing with
the delay in review applications has somewhat crystallised.
[24] In Khumalo and Another v MEC for Education, KwaZulu -Natal5
(Khumalo), the Constitutional Court considering the significance of delay in
instituting proceedings, wrote:
‘(A) court should be slow to allow procedural o bstacles to prevent it from looking into
a challenge to the lawfulness of an exercise of public power. But that does not mean
that the Constitution has dispensed with the basic procedural requirement that review
proceedings are to be brought without undue delay or with a court’s discretion to
overlook a delay.’
[25] In 2017, the same Court in Merafong City v AngloGold Ashanti Ltd 6
(Merafong), addressing the question of delay when instituting review
proceedings, stated thus:
‘The rule against delay in institutin g review exists for a good reason: to curb the
potential prejudice that would ensue if the lawfulness of the decision remains
4 Aurecon South Africa (Pty) Ltd v Cape Town City [2015] ZASCA 209; 2016 (2) SA 199
(SCA).
5 Khumalo and another v MEC for Education, KwaZulu-Natal 2014 (5) SA 579 (CC) (2014) (3)
BCLR 333; [2013] ZACC 49 para 45.
6 Merafong City v AngloGold Ashanti Ltd [2016] ZACC 35; 2017 (2) SA 211 (CC).
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uncertain. Protracted delays could give rise to calamitous effects. Not just for those
who rely upon the decision but also for the efficient functioning of the decision-
making body itself.’7
[26] In State Information Technology Agency S oc Ltd v Gijima Holdings
(Pty) Ltd8 (Gijima), the Constitutional Court wrote:
‘The reason for requiri ng reviews to be instituted without undue delay is th us to
ensure certainty and promote legality: time is of outmost importance.’ and
‘… Here it must count for quite a lot that S ITA has delayed for just under 22 months
before seeking to have the decision r eviewed. Also, from the outset, Gijima was
concerned whether the award of the contract complied with legal prescripts. As a
result, it raised the issue with Sita repeatedly. Sita assured it that a proper
procurement process had been followed.’
[27] Gijima was followed by Buffalo City Metropolitan Municipality v Asla
Construction (Pty) Ltd 9 (Buffalo City ), where the Constitutional Court,
formulating an approach on the question of delay in bringing a legality review,
was, firstly, to examine whether the delay wa s reasonable. This was to be
answered by considering the explanation proffered. If, indeed, the delay was
reasonable, the matter could be heard. But , if the delay was unreasonable,
the second enquiry was whether the interests of justice required it to be
overlooked, and the matter be heard. That would be decided by considering
four factors: ( a) the consequences of setting the decision side; ( b) the
decision and the challenge to it (the asserted illegality); ( c) the applicant’s
conduct; and (d) the court’s d uty to declare the unlawful decision invalid. The
Court found that the explanation for the delay was insufficient to declare it
reasonable but supported overlooking the delay due to the clear illegality of
the decision.
7 Ibid para 73.
8 State Information Technology Agency Soc Ltd v Gijim a Holdings (Pty) Ltd [2017] ZACC 40
(CC); 2018 (2) SA 23 (CC) (Gijima) paras 44 and 53
9 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd [2019] ZACC 15; 2019
(6) BCLR 661 (CC) (Buffalo City) paras 43 to 66.
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[28] In May 2018, this Court in the City of Tshwane Metropolitan
Municipality v Lombardy De velopment (Pty) Ltd & others 10 (Lombardy), was
seized with the issue of a municipality which failed to comply with s 49 of the
Rates Act, in compiling a supplementary valuation roll. Lombardy instituted
litigation some 22 months late. The Court accepted the delay as reasonable
due to the extent of illegality in the manner the supplementary valuation roll
was determined by the City of Tshwane . The Court upheld the high court’s
order invalidating and setting aside the supplementary roll of 2012 , the effect
of the order being that until the causes of invalidity are addressed by the City,
the subsequent valuation rolls are consequentially invalid. Thus, the
impediment to granting a just a nd equitable relief res ulting in a possible
‘knock-on effect on the budget ’ as stated in SAPOA, was not followed in
Lombardy. In any event, nothing in SAPOA suggests that in all such matters ,
any just and equitable relief would be untenable. SAPOA’s order was
considered and fashioned on the relief in the form of an attack on the b udget.
The relief sought in this appeal is to have the rates set aside. (Own emphasis)
[29] The period of delay in instituting litigation in SAPOA was three years,
while in Lombardy the delay was about 22 mo nths, as in Gijima. In this
appeal, the appellants delayed for a period of about 7 (seven) years. Applying
the approach in Buffalo City, the first inquiry is to determine whether the delay
was reasonable or unreasonable. If it was reasonable, this Court wi ll consider
the merits forthwith. If the delay was un reasonable, the second inquiry to be
conducted will be whether the interest of justice requires the delay to be
overlooked. This latter phase of the inquiry has to consider the four factors
referred to in Buffalo City.
[30] The conspectus of the evidence in t his appeal , succinctly stated,
reveals the following objective facts:
10 City of Tshwane Metropolit an Municipality v Lombardy Development (Pty) Ltd & Others
[2018] ZASCA 77; [2018] 3 All SA 605 (SCA) (Lombardy).
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(a) The respondents, being a local sphere of government, blatantly and
repeatedly flouted the applicable legal provisions, specifically by non-
compliance with the provisions of the Rates Ac t in regard to public
participation. In levying some rates and determining the second valuation roll
there is no evidence of public participation on record. This conduct deprived
aggrieved ratepayers the right to raise objections, should they elect to do s o
as provided in s 49 of the Rates Act. Further, the respondents disregarded the
Regulations when determining the rates of various categories of properties, in
particular, that of the agricultural farming;
(b) As distinct from other cases, here the respondents contravened the law
not as a once off event such as unlawful awarding of a tender , but were
engaged in unlawful conduct repeatedly in every financial year from 2009 to
2017, for the duration of the del ay. The unlawful conduct continued, even
when the appellants, as in Gijima, were vociferous in consistently questioning
the illegality of the respondents’ conduct. The warnings were ignored;
(c) The language of the applicable legislative instruments was
unambiguous. There was thus no question of legal uncertain ties which
required to be cleared through litigation. The respondents simply refused to
implement the clear letter of the law. There is no explanation for this conduct.
As in Lombardy, the respondents of fered no alternative relief to correct the
excessive municipal rates they imposed on the appellants.
(d) Some members of the appellants have, since 2009, misguidedly
refused to pay any r ebates, including what they, on their own, determined to
be the correct applicable rate. At the time of the hearing of this a ppeal, some
were still withholding payment, regardless of the decision of the full court;
(e) Apart from the fact that the appellants had continuously made
representations to the respondents in an attempt t o resolve the excessive
levying of rates, there was n o explanation on the papers as to the cause of
the delay in instituting this litigation; and
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(f) Should this Court grant any order setting the impugned rates aside, the
consequence of such relief would be a retrospective invalidation of the
budgets of the pre vious financial years , on which the current budgets are
reliant. It is not disputed that the r ates levied in a particular financial year are
an integral part of the budget of that financial year.
[31] There are two reasons which stand out from the objective facts above,
which militate against a finding that the delay was reasonable. First, the
appellants have not provided cogent reasons or some explanation for the
delay in instituting this litigation . Second, the seven-year delay was inordinate
and, as a result , the retrospective setting aside of the impugned rates will
render void the approved and finalised budgets for the previous financial
years. For these two reasons, I conclude that the delay by appellants in
commencing with this litigation was unreasonable . However, that is not the
end of the matter. The second inquiry as formulated in Buffalo City has to be
conducted. That is, whether the interest of justice dictate that the delay be
overlooked.
[32] Before considering the second phase of the inquiry, it is a pposite to
address the argument that by refusing to pay, the appellants initially set out to
defy the authority of the municipality to levy rates on their properties . This
argument is, in my view, irrelevant to the determination of the issues in this
appeal. For starters, and assuming that the appellants had such motive
initially, which must be said, seriously borders on sedition, the futility of such a
misguided stance became evident and was wisely aband oned in this Court.
Not only ha ve some of the appellants’ members since decided to pay the
rates as levied , those still holding out have also, through their counsel i n this
Court, indicated their intention to pay. It needs to be said, however , that
whatever motive that caused the appellants’ initial resolve not to pay, such
motive does not justify or confer any authority on the respondents to levy
municipal rates in excess of the legally prescribed limit, as some form of
retribution. This contention by the respondents concerning the appellants’
initial intent not to pay municipal rates, is not relevant to the determination of
the issues in this appeal.
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[33] Returning to the issue of the unreasonable delay in instituting this
litigation, this appeal is in two ins tances distinguishable from other cases
where the con duct of the municipality is under review. First, that the conduct
of the respondents in over -charging the municipal rates was not a once off
contravention of the law, but was repeated over successive financial years for
the duration of the delay , in spite of objections from appellants. Second, the
respondents are yet to recover from some of the appellants’ members, the
municipality’s unpaid rates for the duration of the delay . These unpaid rates
for agricultural properties from the previous financial years, would be reflected
in the current municipality budget as book debts.
[34] The appellants’ members have indicated their preparedness to pay the
rates due. That would remedy the default of having created a shortfall on the
budgets of the municipality. However , the municipality cannot seriously argue
that it is entitled to claim the spoils of unlawfully overcharging the ratepayers.
A balance must be struck between the two. The recovery of such municipal
rates due for the past financial years, has to be limited to the rate chargeable
in terms of the law that was applicable during that financial year. Conversely,
those members of the appellants who have paid rates levied by the
municipality in excess of the limi t imposed by law , should be credited the
amount that was in exces s of the rate permissible by law, in each financial
year. The scales of justice and equity must be balanced , and the principle of
legality must be vindicated. It is thus in the interest of ju stice that the
unreasonableness of the delay , under t hese circumstances, must be
overlooked.
[35] The practical difficulties attendant upon retrospectively setting aside of
the municipal rates and by implication , the annual budgets, was considered
and acknowl edged by this Court in SAPOA. However, in this appeal , such
difficulties do not impede the consideration of any order that would be just and
equitable for the appellants. This would be so because the favourable
municipal rate determined for the category of agricultural properties , serves
the public interest, in that it is intended to ensure the continuous supply of
food, a factor vital for the nation’s food security. Therefore the delay in
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instituting litigation in this case cannot impede the consideration of just and
equitable relief for the appellants, which subject I turn to deal with.
[36] In Gijima the Constitutional Court held 11: ‘However, under s 172(1) (b) of
the Constitution, a court deciding a constitutional matter has a wide remedial power.
It is empowered to make “any order that is just and equitable”. S o wide is that power
that it is bounded only by considerations of justice and equity. ’… In fashioning
appropriate just and equitable relief, the approach in Lombardy finds
application whereby this Court has to weigh the consequences of
retrospectively inva lidating the impugned municipality rates against the
imperative to vindicate the principle of legality. Should matters be left as they
are, the respondents stand to unjustif iably claim the unlawfully imp osed
excessive portion of the municipal rates, levied on the agricultural properties
of the ratepayers. The scale of justice will be tilted.
[37] It is important to bear in mind that in the fabric of our Constitution, the
first respondent is a sphere of govern ment and the second and third
respondents are organs of state. Our constitutional democracy is based on
the rule of law. As stated by this Court in Kalil N.O. and Others v Mangaung
Metropolitan Municipality and Others:12 ' . . . the function of public servants . . . is
to serve the public, and the community a t large has the right to insist upon them to
act lawfully and within the bounds of their authority . . . '.13 The municipalities are
thus expected not only to be conversant with the law applicable to their
sphere of government, but also to conduct their affa irs within the conf ines of
the law. Should they fail to do so, the courts should not be impeded from
considering and granting an appropriate order that would have the effect of
vindicating the principle of legality. A trend should not develop, or precedent
established, where there would be no consequences when municipalities
11 Ibid para 53
12 Kalil N.O. and Others v Mangaung Metropolit an Municipality and others [2014] ZASCA 90;
2014 (5) SA 123 (SCA).
13 Ibid para 30.
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function outside the parameters of the law. In Lombardy, this Court cautioned
against the implications of such practice when it commented as follows:
‘It cannot plausibly be so that the City proceeded to arrange its affairs in the confident
expectation that ratepayers would not challenge its conduct. Indeed, the City does
not even attempt to suggest what other remedy might be preferab le from the
standpoint of Justice and equity other than that the Court should decline to set aside
the 2012 valuation roll.’
[38] In order to mitigate the impact of the recovery of unpai d rates on the
appellants and also the respondents crediting the accounts of the appellants
who paid in excess of the legal limit, the parties may agree to reciprocally
arrange the payments to be effected over a reasonable period, concurrent
with the payment of the current rates, or make other suitable arrangements.
Just as the process of agricultural food production by the taxpayers has to be
protected, the inflow of revenue for the municipality must also not be
disrupted.
[39] After hearing argument from counsel in Court, a request was directed
to the parties to deliver supplementary heads of argument specifically on
Lombardy and its implication to the question of the relief in terms of s 172 of
the Constitution in this appeal. The counsel for both parties delivered the
supplementary heads of arg ument. Regrettably, the submissions a s regards
Lombardy were scant and unhelpful. The part ies took the opportunity to
instead rehash the arguments as presented in Court. I am of the view that the
supplementary heads of argument should be excluded from any costs to be
awarded. The costs shall follow the result.
[40] I accordingly make the following order:
1. The Appeal succeeds.
2. The order of the Full Court of the Mpumalanga Division of the High
Court is set aside and substituted by the following order:
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2.1 ‘The rate notices published by the respond ents in terms of
s 14(2) of the Local Government : Municipal Property Rates Act 6 of
2004 i n the Mpumalanga Provincial Gazette of 10 July 2009, 9 July
2010; 27 May 2011, 29 August 2012; 19 August 2013, 22 July 2015; 22
July 2016; 25 August 2017 and 6 October 2018, as well as the further
rates notice published by the respondents dated July 2014 in respect of
the 2014/2015 financial year, including resolutions of the municipal
council on which all such rates notices were based, where applicable,
are hereby declared unlawful and invalid to the extent that they relate
to agricultural properties u sed or permitted to be used for crop and/or
animal farming (agricultural property);
2.2 The respondents may recover from the members of
the appellants, only the amou nts of the agricultural property rates
calculated based on the Local Government: Municipal Property Rates
Act 6 of 2004 and the Regulatio ns promulgated in terms thereof , less
any amount in excess of the legally permissible limit, in respect of each
financial year from 2009 to 2018;
2.3 The respondents are further liable to credit the accounts of the
appellants’ members who were levied and paid municipal rates, only to
the extent of the amounts in excess of the legally permissible limit of
the rate s chargeable to the agricultural properties in respect of each
financial year from 2009 to 2018; and
2.4 On recovery of arrear municipal rates due, t he respondents may
charge the rate of interest as published in terms of section 96 read with
section 97(1)(e) of the Local Government: Municipal Systems Act 32 of
2000 in respect of each financial year from 2009 to 2018.
3. The respondents are ordered in future not to levy propert y rates on any
agricultural property in its municipal jurisdiction at a rate that exceeds
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that legally prescribed and, such rate must be determined in terms of
the procedures prescribed by law.’
4. The first respondent is ordered to pay to the appellant s the costs of the
appeal, including costs of two counsel, but excluding the costs of
delivering the heads of argument after the hearing of the appeal. The
costs against the first respondent shall include the costs in the
high court and those on appeal in the ful l court of the Mpumalanga
Division of the High Court.
__________________________
SP MOTHLE
JUDGE OF APPEAL
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APPEARANCES:
For appellants: J A van der Westhuizen
(with G J Bensch)
Instructed by: Du-Toit Smuts & Partners, Nelspruit
Phatshoane Henney, Bloemfontein
For respondents: E van As (with V Mabuza)
Instructed by: Len Dekker Attorneys Inc, Pretoria
Rosendorff Reitz Barry, Bloemfontein