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1992
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[1992] ZASCA 192
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City Council of Johannesburg v Norven Investments (Pty) Ltd. (386/91) [1992] ZASCA 192; [1993] 1 All SA 338 (A) (12 November 1992)
CASE NO 386/91
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
CITY COUNCIL OF JOHANNESBURG Appellant
and
NORVEN INVESTMENTS (PTY) LIMITED Respondent
CORAM: EM GROSSKOPF, EKSTEEN, NIENABER JJA,
HOWIE et VAN COLLER AJJA
DATE HEARD:
24 SEPTEMBER 1992
DATE DELIVERED:
12 NOVEMBER 1992
1
NIENABER JA:
The appellant is a local authority duly constituted as
such in terms of the Local Government Ordinance, 17 of 1939 (Transvaal). At
the
times relevant to these proceedings the Township and Town Planning Ordinance, 25
of 1965 (Transvaal) ("the Ordinance"), since
repealed, applied to it. The
Ordinance, s 51 in particular, made provision for the levying by a local
authority of a monetary contribution
termed "a development contribution" (s
51(1)) in respect of properties within its municipal jurisdiction. A development
contribution
is in essence a tax (Johannesburg City Council v Victteren Towers
(Pty) Ltd
1975 (4) SA 334
(W) at 337A). It is employed by the local authority,
in the first instance, to defray expenditure in connection with a town planning
scheme in operation (s 51(10) read with s 50). The overall purpose of a town
planning scheme is the co-ordinated and harmonious development
of land under the
control and jurisdiction of a local authority (s 17). Whenever an interim scheme
(a draft town planning scheme
adopted by a local authority) which is
2
an amendment scheme (the amendment, extension or substitution of a scheme in
operation) becomes an approved scheme (one approved and
put into operation by
the Administrator), the local authority is enjoined to set in motion the process
for the determination of the
development contribution which is to be levied in
respect of the properties affected thereby (s 51(2) and (3)). A valuator is
appointed
to make two appraisements of the market value of every property
included in the amendment scheme, the first one of the market value
of the
property after the amendment scheme has come into operation and the second one
of the market value of the property upon the
notional rejection of the amendment
scheme by the Administrator. The difference between the two valuations
represents the extent
to which the market value of the affected property has
been enhanced as a result of the approval and coming into operation of the
amendment scheme (cf Stadsraad van Randburg v Ludorf NO en Andere
1984 (3) SA
469
(W) at 474G-474I). The development contribution is calculated as one-third
of this difference. It is owed to the local authority
by the person who, at the
designated time, is the
3
registered owner of the property concerned (s 51(4) (a) and (b)).
The crisp issue in these proceedings is when such development contribution is
to be paid - when the betterment is assessed by the
local authority or when it
'is exploited by the owner.
That issue was tested in the Witwatersrand Local Division when the
respondent, as defendant, excepted to the claims of the appellant,
as plaintiff,
for the payment of certain development contributions. The appellant's
particulars of claim stated broadly that certain
amendments were effected to the
Johannesburg Town Planning scheme at the instance of the respondent; that
development contributions,
determined in accordance with the provisions of s
51(2) and (3) of the Ordinance accordingly became recoverable in respect of
certain
properties owned by the respondent; and that these were "due and
payable" in terms of s 51(4)(a). Payment was claimed of the balance
owing
together with mora interest and costs. The nub of the exceptions was that the
particulars of claim lacked averments of fact
which were essential to render
such payments "due" in
4
the sense of being recoverable forthwith. The exceptions were upheld by Eloff
JP with costs. The court a quo subsequently granted
an application for leave to
appeal to this court. Hence this appeal.
At its hearing the appellant alone was represented by "counsel, but it was
agreed between the parties, so we were informed from the
bar, that no order for
costs would be sought, whatever the outcome of the appeal, either in the court
below or in this one. This,
evidently, is a test case.
The appellant's particulars of claim encompass
four claims.
They are, minor details apart, in
identical terms. They concern the levying
of
development contributions in terms of s 51 of the
Ordinance due to the
coming into operation, as approved
schemes, of various amendment schemes,
namely amendment
scheme No 1/410 which came into operation on 3
November
1971 relating to stands 2594, 2596 and 2598,
Johannesburg;
amendment scheme No 1/638 which came into
operation on 24 April 1974 relating
to stands 2594,
2596 and 2598, Johannesburg; amendment scheme No
1/771
which came into operation on 16 June 1976 relating to
5
stands 2593, 2595, 2597 and 2599, Johannesburg; and
amendment scheme No
162 which came into operation on 18 November 1981, relating to stands 2593,
2595, 2597, 2599 and 4693, Johannesburg.
All of these stands, so it was alleged,
were registered in the name of the respondent.
S 51 of the Ordinance governs the payment of development contributions. It
is, I fear, necessary to quote it in full:
"
Development contribution
.
51. (1) Notwithstanding anything to the contrary in this Ordinance, other
than the provisions of section 89, or in any other law contained,
a local
authority shall, in accordance with the provisions hereinafter in this section
enacted and in the general interests of any
development within its area, levy a
monetary contribution, to be known as a development contribution.
(2) As soon as possible after the date upon which an interim scheme, which is
an amendment scheme or a scheme referred to in section
46 (7) (k), comes into
operation as an approved scheme in terms of section 37 (1), the local authority
concerned shall appoint a
person who is a member of the South African Institute
of Valuers for the purpose of making an appraisement of the market value as
at
such date of every portion of land, excluding any improvements thereon, included
in such scheme or instruct a valuer referred
to in section 7 (1) of the Local
Authorities Rating Ordinance, 1977, to in to make a like appraisement: Provided
that the foregoing
6
provisions shall not apply where the local authority concerned
is satisfied that any such portion included in such scheme will not
be enhanced
in value to any appreciable extent as a result of such scheme.
(3) Immediately after the conclusion of the
appraisement of any portion of
land in terms of
the provisions of sub-section (2), a further
appraisement as contemplated in that sub-section shall likewise be made to
determine what the market value of every such portion,
excluding any
improvements thereon, would have been on the assumption that the said scheme had
been rejected by the Administrator.
(4) The development contributions shall be
determined at one-third of the
amount by which the
appraisement of any portion of land in terms of
the
provisions of sub-section (2) exceeds the
appraisement of the same portion in
terms of the
provisions of sub-section (3) and shall be
payable -
(a) in the case of an amendment scheme referred
to in section 46 (7)(k),
by the person who was
the registered owner of the portion of
land
concerned on the date of the coming into
operation of such amendment
scheme; or
(b) in the case of any amendment scheme prepared
by a local authority, by
the person who was the
registered owner of the portion of land
concerned
on the date upon which the exercise of
any new right conferred by such
amendment
scheme, is commenced:
Provided that no development contribution shall be payable in respect of any
portion of land included in such amendment scheme where
such portion may be used
only -
(i) for purposes of special residential or
7
residential 1 as defined in that scheme;
or
(ii) for any purpose contemplated in section
5 (1) (d) (v), (vi), (vii)
or (viii) of the
Local Authorities Rating Ordinance, 1977.
(5) The local
authority shall as soon as the
development contribution has been determined
in
respect of any portion of land, inform the person
who was the
registered owner of such portion on
the date of the coming into operation of
the
amendment scheme, at his last known postal address
by registered
letter of the amounts of the
appraisements referred to in sub-sections (2)
and
(3) as well as the amount of such development
contribution and shall
at the same time draw his
attention to the provisions of this section.
(6) (a) An owner referred to in sub-section (5) may, if dissatisfied with any
appraisement made in terms of the provisions of sub-section
(2) or (3), lodge an
objection thereto in writing with the local authority concerned within a period
of 60 days after receiving the
registered letter referred to in sub-section
(5).
(b) A local authority which is dissatisfied
with any such appraisement,
may, in the registered
letter referred to in sub-section (5), state
that
it objects to such appraisement.
(c) Any objection referred to in -
(1) paragraph (a) shall be submitted by the local authority concerned within
a period of sixty days after receiving such objection;
or (ii) paragraph (b)
shall be submitted by the local authority concerned within a period of sixty
days after the date upon which
the registered letter referred to in sub-section
(5) was posted, to the valuation board constituted for such local authority in
terms
of section 14 (1) of the Local
8
Authorities Rating Ordinance, 1977, or in the case of the board
as defined in section 1 of the Transvaal Board for the Development
of Peri-Urban
Areas Ordinance, 1943 (Ordinance 20 of 1943), to such valuation board as the
board may determine, and such valuation
board shall proceed forthwith to
consider every such objection, and for this purpose the provisions of Chapters
111 and 1V of that
Ordinance shall, subject to the succeeding provisions of this
section, apply mutatis mutandis.
(d) The secretary of the valuation board
shall at least twenty-one days
prior to the
sitting of such board to consider any objection
submitted to
it, inform the owner and local
authority concerned of the date, place and
time of
such sitting.
(e) Any such valuation board may increase or
decrease any appraisement
which is the subject of
an objection in terms of the provisions of
this
sub-section and its decision shall be final or, in
the case of an
appeal to the appropriate valuation
appeal board, the decision of such appeal
board
shall be final.
(f) The secretary of any such valuation board
or valuation appeal board
shall within seven days
of the decision given in terms of the
provisions
of paragraph (e) or, where an appeal is withdrawn,
within seven
days of such withdrawal coming to the
notice of the secretary of the
valuation board,
inform the owner and the local authority
concerned
thereof by registered letter.
(g) Pending the decision of a valuation board
or valuation appeal board in
terms of the
provisions of paragraph (e), the payment of any
development
contribution shall, except where
otherwise provided in this section, be
suspended.
9
(h) Where as a result of an objection, an appraisement referred
to in sub-section (2) or (3) is increased or decreased by a valuation
board or
valuation appeal board, the local authority concerned shall forthwith
re-determine the amount of the development contribution
and, if payment has
already been made in respect thereof, such local authority shall collect or
refund, as the case may be, the difference
between the amount of such payment
and the amount so re-determined.
(7) (a) If a development contribution is payable in respect of any portion of
land and any owner referred to in sub-section (4) (a)
desires to avoid the
payment of such contribution or to reduce the amount thereof, he shall proceed
in accordance with the provisions
hereinafter in this sub-section enacted.
(b) Where an owner has decided to avoid payment of a development contribution
as contemplated in paragraph (a) he may, within a period
of 60 days from the
date of the letter referred to in sub-section (C) or, in the event of an
objection having been made in terms
of the provisions of sub-section (6), the
date on which the letter referred to in sub-section (6) (f) is posted, request
the Administrator,
through the Director to repeal the approved scheme concerned
and shall notify the local authority concerned in writing thereof.
(c) Where the Administrator has received a
request in terms of the
provisions of paragraph
(b), he shall, after consultation with the
Board
and the local authority concerned, either grant or
refuse such
request.
(d) In the event of a request being granted
in terms of the provisions of
paragraph (c), the
Administrator shall publish a notice to that
10
effect in the Provincial Gazette.
(e) In lieu of a request
referred to in
paragraph (b), an owner who has decided to avoid
payment
of, or to reduce the amount of a
development contribution as contemplated
in
paragraph (a), may, in accordance with the
provisions of section 46,
apply for a further
amendment to the approved scheme, which gave rise
to such contribution, within a period of 60 days from the date referred to in
paragraph (b).
(f) Whenever an approved scheme, which is an
amendment scheme, has been
repealed by a notice
referred to in section 48 (4) or paragraph (d),
the
obligation to pay any development contribution
in respect of such scheme,
shall lapse, and any
such development contribution which has already
been
paid, shall be refunded.
(g) Whenever an approved scheme, which is an
amendment scheme, is amended
as contemplated in
section 48 (5) or paragraph (e) by a further
amendment
scheme, the obligation to pay any
development contribution in respect of
such
first-mentioned amendment scheme shall lapse and
any such development
contribution which has
already been paid shall be refunded and
to
determine the development contribution payable in
terms of the
provisions of sub-sections (2), (3)
and (4) in respect of such further
amendment
scheme, such first-mentioned amendment scheme
shall be deemed to
have been rejected by the
Administrator.
(8) If -
(a) any appraisement as contemplated in sub-section (2) or (3) is not made
within 6 months of the date upon which the relevant amendment
scheme came into
operation as an approved scheme in terms
11
of the provisions of section 37 (1); or (b) the local
authority concerned fails to comply with the provisions of sub-section (5)
within
9 months of the date upon which the relevant amendment scheme came into
operation as an approved scheme in terms of section 37 (1),
no development
contribution shall be payable.
(9) Subject to the provisions of sub-section (8), the development
contribution in respect of any portion of land shall be paid -
(a) before a written statement contemplated
in section 50 of the Local
Government
Ordinance, 1939, in respect of such portion
is given, and the
local authority is hereby
empowered to withhold such statement until
the
development contribution in respect of
such portion shall have been
paid;
(b) before any building plan is approved in
respect of
any proposed alteration to any
existing building on such portion or for
any
new building to be erected on such portion,
where any such plan would
not have been
approved if the relevant amendment scheme
referred to in
sub-section (2) had not come
into operation; or
(c) before such portion is used in a manner
or for a purpose which, but
for the coming
into operation of the relevant amendment
scheme referred to
in sub-section (2), would
have been in contravention of the
town-planning
scheme in operation:
Provided that -
(i) where the amendment scheme has been prepared by the local authority as
contemplated in sub-section (4) (b) and
12
such local authority has been furnished with an undertaking by
a prospective transferee of such portion that such transferee accepts
liability
for the payment of the development contribution in the event of his exercising
any new right conferred on that portion
by the amendment scheme and such
undertaking is satisfactory to such local authority, such local authority may,
or shall, where such
portion has been received by such transferee as a
beneficiary in a deceased estate, give the written statement referred to in
paragraph
(a) before such development contribution has been paid,
(ii) in the
circumstances referred to in paragraph (b) or (c), the local authority may
permit, on such conditions as it may decide,
payment of the development
contribution in instalments over a period not exceeding 3 years; and (iii) the
local authority may in
any event on such conditions as it may decide, allow
payment of the development contribution to be postponed for a period not
exceeding
3 years if security for such payment has been given to the
satisfaction of the local authority. (10) Any development contribution
levied in
terms of the provisions of this section, shall, at the discretion of the local
authority concerned, be used to defray the
expenditure contemplated in section
50 or for such other purpose as the Administrator may approve, or may be
credited to a Town-planning
Fund established in terms of the provisions of
section 52.
13
(11)
Notwithstanding the foregoing provisions of this section, a local
authority may, in lieu of any development contribution or portion
thereof,
accept land which, in its opinion, is of an equivalent
value.
(12)
The provisions of this section
shall not apply in respect of a scheme submitted on or before the first day of
May, 1965, to the
Administrator in terms of the provisions of section 39 (1) of the Townships and
Town-planning Ordinance, 1931."
The section creates an entirely
new obligation - to pay a development contribution - and identifies the debtor
who is to pay it. What
it does not do, at least not in express terms, is to
determine precisely when it is to be paid.
A debt, once established, is, as a rule, recoverable forthwith and as such is
"due and payable", unless its enforceability has been
deferred by a suspensive
time clause (dies certus an ac quando or dies certus an, incertus quando) or a
suspensive condition (dies
incertus an, certus quando or dies incertus an,
incertus quando) (Nel v CToete
1972 (2) SA 150
(A) at 159E, 169D-170B; De Wet
and Van Wyk Kontraktereg en Handelsreg 5th ed 146; 5 Lawsa par 204; Kerr The
Principles of the Law
of Contract 4th ed 394).
14
But even where the debt, whatever its source, is thus recoverable the better
view is that a debtor will only be in mora, in the absence
of a time fixed for
performance, if he fails to perform after having been placed on terms to do so
by a demand which, in the circumstances,
is reasonable (Nel v CToete supra
159E-160C; 164B-166H; Alfred McATpine & Son (Pty) Ltd v Transvaal Provincial
Administration
1977 (4) SA 310
(T) at 348D-F; Ver Elst v Sabena Belgian World
Airlines
1983 (3) SA 637
(A) at 644A-B, 647H-648B; De Wet and Van Wyk op cit 160
et seq; 5 Lawsa par 205, 206).
The crux of this case is whether the payment by the respondent of the
development contributions which admittedly became payable in
respect of its
stands mentioned, had been deferred.
In several of its sub-sections, section 51 uses the word "payable" (e.g. s
51(4), 51(7) and 51(8)). Elsewhere it speaks of "payment"
(s 51(6)(g)). In S 51
(7)(f) and (g) mention is made of the "obligation to pay the development
contribution" but it is only in s
51(9) that the wording is used "the
development contribution ... shall be paid". Not surprisingly it
15
was on this sub-section that the attention of the court a quo was mainly
focussed.
S 51(9) differentiates between three separate eventualities, namely
(a) when the owner requires a written statement as contemplated in s 50 of
the Local Government Ordinance, 1939 (Transvaal). Such
a clearance certificate
is a prerequisite for the registration of transfer of land within a
municipality. It is meant to show that
all amounts owing to the local authority
in respect of sanitary services or rates or water, electricity and similar
charges have
been paid;
(b) when the local authority's approval is sought
for building plans which
would not have been approved
if the amendment scheme had not come into
operation;
(c) when the owner proposes to use land in a
manner or for a purpose
which, but for the amendment
scheme, would have been contrary to the town
planning
scheme then in operation.
In terms of the sub-section the development contribution "shall be paid"
before
any of these eventualities occur. In the earlier version of
the
16
sub-section the terminology used, as elsewhere in s 51, was "payable -
before". The current Afrikaans version, curiously enough, still
employs the
phrase "betaalbaar - voordat". (The English text, incidentally, was the one
signed.) I shall revert to this modification
in terminology a little later in
this judgment.
Because the owner benefits from the amendment scheme in each of the three
instances mentioned, the court a quo regarded s 51(9) as
a strong indication
that payment of a development contribution was deferred until the owner in fact
derived the tangible advantage
of selling the land at its increased value or of
putting up a building in accordance with the new right accorded to the property
or of using it in a manner formerly prohibited but now permitted by the
amendment scheme. According to the court a quo s 51(9) was
the only sub-section
"which appears in plain terms to fix a date when payment of a development
contribution is due". Sub-section
9, so it was declared,
"in the context of the ordinance as a whole, reflects the policy of the law
that the development contribution is payable when the
owner actually plucks the
fruits of the rezoning leading
17
to a higher valuation by, for example, putting it to use in
the manner authorised by the amending scheme. Until the owner actually
puts up
the building which he could not have put up before the amendment, or uses it in
the manner previously declared impermissible,
or sells it at the higher price
which it now commands, he does not actually experience the benefit. I also agree
that the rationale
of s 51 is that the development contribution should be
paid:
(a) by reason of the benefit derived by the
owner from the rezoning of the
land and the
resultant appreciation in value; and
(b) by reason of the burden on the local
authority's infrastructure. (Cf
Venter v
Randburg Town Council
1968 4 SA 302
(W) at
page
308B-E.)
It is important that the benefit conferred on the owner is in general not
actually experienced, nor is the local authority burdened,
until the right is
exploited".
I am, with respect, unable to agree with this line of
reasoning.
First, as a matter of language, it distorts the wording of the
sub-section. The provision that a development contribution is to be
paid
"before" is interpreted in the judgment to mean "if and when", enfin,
"
not
before". As such, both liability and exigibility would be suspended
until any one of the three eventualities occurs: the obligation
to pay the
18
development contribution is thus deemed to be subject to a suspensive
condition. On that approach a development contribution is not
even "payable"
until one of the named events takes place. Far from being in conformity with
"the context of the ordinance as a whole"
this interpretation creates disharmony
in the section itself: what is stated, in s 51 (7)(a), for example, to be
"payable" is now
said to be "not payable" (compare, also, s 51(7)(f) and
(g)).
Second, the use of the word "before" is inappropriate if the intention of the
legislature was to fix a precise time for payment. It
is an inherently imprecise
concept, even if used in the sense of "at latest". How, for instance, is one to
pinpoint the moment when
an owner uses his land in a manner or for a purpose
which, but for the amendment scheme, would not have been sanctioned? If a day
certain had been intended, the legislature could readily have used an
unambiguous term such as "when" or "as soon as" or "after"
or "not before".
Third, the approach of the court a quo ignores the fundamental distinction
which exists between the two
19
disparate situations specified in sub-sections 51(4)(a) and (b) respectively.
Section 51(4)(b) deals with the situation where it is
the local authority itself
which initiates an amendment scheme. S 51(4)(a) refers to the situation where
the owner of a piece of
land does so in terms of s 46(7)(k), which is the
section in the Ordinance providing for an application by an owner for the
amendment
of a town planning scheme in operation.
In the first of these two situations the emphasis will be on the general
interests of development within the local authority's area.
A particular owner
of a particular piece of land within it may not derive a direct or immediate
advantage from the consequent enhancement
in value of his property. For him it
may be a purely speculative advantage, which he neither sought nor desired and
which was foisted
upon him without his concurrence or co-operation. To burden
him with the payment of what may be a not inconsiderable sum, may not
be fair.
One can therefore understand why the obligation to pay the development
contribution was not imposed on the current owner
of the land in question but on
the person who happened to be the owner
20
"on the date upon which the exercise of any new right conferred by such
amendment scheme is commenced" (s 51(4)(b)). The owner who
is to derive the
benefit is the one who is to make the payment. Payment of the development
contribution is thus by implication deferred
until a future event which may
never occur.
S 51(4)(a) deals with a different situation and with different
considerations. Here it is the owner who, for reasons of his own, takes
the
initiative to have an amendment scheme proclaimed. The amendment relates to his
property. Although it is to remain subject to
the overriding consideration that
it is to be in the interests of development in the area as a whole (s 51(1)),
the primary objective
of the rezoning is to benefit him. He is the one who is
likely to reap an immediate benefit from the amendment scheme, either by
the
direct exploitation of the change in circumstance or as a result of the
enhancement in the value of his property. If a development
contribution is
accordingly to be paid he is the obvious party who should do so. There is, in
his case, no need for deferment.
21
The purpose of s 51(4) is to identify the party liable to pay the development
contribution and not to determine the time for its payment.
But by identifying
the debtor in sub-section (4)(b) with reference to a future event, the time for
payment is by the same token deferred.
No such delay is implicit in sub-section
(4)(a). The debtor contemplated in sub-section (4)(a) is defined with reference
to the date
of the coming into operation of the amendment scheme, although the
extent of the debt (the development contribution) is only to be
determined with
reference to events which are yet to take place, more particularly the two
appraisements. What is significant, at
least for present purposes, is that the
identification of the debtor in sub-section (4)(b) is directly linked to the
exploitation
by the then owner of the benefits wrought by the amendment scheme.
By contrast, the identification of the debtor contemplated in
sub-section (4)
(a) is not so linked. In his case, unlike the other, there is no implication
that payment is delayed until he derives
a benefit from it. On the contrary, the
implication is that the development
22
contribution is immediately payable, subject of course
to the procedures providing for objection (s 51(5), (6)
and (7)). The present case is one falling within
sub-section (4)(a) and not (4)(b). Deferment is not
inferred. Consequently s 51(4) tends to contradict,
rattier than to support, the reasoning of the court a
quo.
A fourth reason for disagreeing with the approach
of the court a quo is its misplaced reliance on the
dictum of Nicholas J in Venter v Randburg Town Council
1968 (4) 5A 302 (W) at 308B-E. The dictum reads:
"In terms of sub-sees. (2), (3) and (4) of sec. 51 of Ord. 25 of 1965, the
amount of the development contribution is related to the
increase in value of a
property consequent upon the approval by the Administrator of "an amendment
scheme". This increase in value
is in no way related to the deserts of the owner
concerned, except only in so far as he may have made application for the
amendment,
but is the direct consequence of the amendment of the town-planning
scheme concerned. And as the amendment increases the rights of
the owner and the
value of his property, so it is likely to impose additional burdens on the local
authority: for example, it is
apparent that a change from residential to
business use of land may require more expensive roads, parking facilities and an
increased
Bantu population; and a change from "special residential" to "general
residential" may bring about an increase in
23
population, with increased demands on the facilities provided by the local
authority."
An amendment scheme introduced at the instance of the
owner himself (s 51(4)(a)), may well involve the local authority in the sort
of
general expenditure to which the dictum refers. It would be an immediate burden,
contrary to what was stated by the court a quo
in the last sentence of the
passage quoted from its judgment. As such it ought to be instantly redeemable
even if the development
contribution were to be deposited into a general fund (s
51(10)). That consideration, it is true, applies with equal force where
the
local authority caused the amendment scheme to be introduced (s 51(4)(b)): but
in that event it would most likely be a wider-ranging
scheme, affecting a
greater number of properties and owners, and generating a broader source of
revenue from which to recoup the
increased expenditure.
Fifthly, there is the scheme and wording of s 51(6)(g), a topic which was not
expressly mentioned in the judgment of the court a quo.
Pending the decision of
the Valuation Board or the Valuation Appeal
24
Board the payment of the development contribution is suspended by an
objection lodged against the amendment scheme except where otherwise
provided in
the section.
Suspension of payment on objection presupposes a payment which would
otherwise have been due i.e. if no objection had been lodged
against the
amendment scheme; and the "exception" to the suspension in turn presupposes that
the payment will remain due notwithstanding
the objection.
Arguing in reverse one can, it seems to me, extract the following
propositions from the wording of s 51 (6) (g), read in the context
of the
section as a whole:
(a) An owner (whether he is an owner referred to in s 51 (4) (a) or an owner
referred to in s 51 (4) (b)) who takes advantage of the
amendment scheme is
obliged to pay the development contribution i.e. if he commences to transfer the
property or to build on it or
to use it for a purpose that was prohibited before
but has now been sanctioned (s 51(9)). That is so regardless of whether an
objection
has been lodged against the amendment scheme (s 51(6)(g)). (If an
25
objection had been lodged and has succeeded any payment he made is refunded
to him in terms of s 51(6)(h) or (7)(f)).
(b) In cases
not
falling in category (a) (i.e.
where
the owner concerned has not yet commenced to take
advantage of the amendment
scheme), payment is
suspended if an objection to the scheme is lodged
(s
51(6)(g)).
(c) Conversely, if no objection is lodged,
payment in cases
not
falling in category (a) is not
suspended (s 51(6)(g)). The implication of
the
sub-section is, therefore, that payment is due even if
the owner
concerned has not commenced to take advantage
of the amendment scheme. (The
proposition is only true
for an owner referred to in s 51(4)(a) since an
owner
referred to in s 51(4)(b) is in any event only liable
to pay a
development contribution once he has commenced
to exercise the new
right.)
The sub-section, thus analysed, contemplates that an owner referred to in s
51(4)(a) must pay the development contribution even before
he has commenced to
take advantage of the scheme in one or more of the
26
ways referred to in s 51(9). And if that is so it is
of course in conflict with the conclusion reached by
the court a quo.
Counsel for the appellant argued, in conclusion,
that s 51(9) was
conceived to benefit the local
authority rather than the owner. It was designed, so
it was submitted, not to fix the time for payment but
to enable the local authority to withhold its
co-operation, whenever an owner endeavoured to exploit
his property in conformity with the amendment scheme,
until the development contribution had been paid. In
this sense it provided the local authority with
additional leverage to exact payment of the development
contribution. In the words of Curlewis J in Cohen's
Trustees v Johannesburg Municipality
1909 TH 134
at
137, referred to with approval in Stadsraad van
Pretoria v Letabakop Farming Operations (Pty) Ltd 1981
(4) SA 911 (T) at 917H:
"The effect of this section is to give the council an embargo or hold on
property in respect of which rates have been imposed..."
The impression that s 51(9) is an embargo section is strengthened on the one
hand by the deliberate
27
change in wording from "payable" (in the precursor to the sub-section) to
"shall be paid" (in the current sub-section); but weakened,
on the other, by the
consideration that in the eventuality referred to in s 51(9)(c) no prior
co-operation from the local authority
is required: there is nothing that the
local authority can legitimately withhold in order to impel the owner to pay.
But s 51(9)(c)
in my opinion fulfils a function different from s 51(9) (a) and
(b), one to which I have alluded earlier: it decrees that an owner
(whether he
is an owner referred to in s 51 (4) (a) or one referred to in s 51(4)(b))
remains liable for payment of the designated
development contribution if he
commences to take advantage of an amendment scheme even if an objection against
it has been lodged
(s 51(6)(g)). S 51(9)(c) accordingly does not necessarily
detract from the characterisation, with which I agree, of s 51(9)(a) and
(b) as
being embargo provisions.
S 51(9) is anything but a model of limpid draughtsmanship and there is some
merit in holding, as the court a quo did, that a tax provision
such as the
28
present one, if ambiguous, should be interpreted benevolently in favour of
the taxpayer (cf Johannesburg City Council v Victteren
Towers (Pty) Ltd supra at
337A). But that is only so when matters are otherwise more or less evenly
balanced "for in a matter of
doubt, we- are bound to invoke the rule of
interpretation contra fiscum" (Estate Reynolds and Others v Commissioner for
Inland Revenue
1937 AD 57
at 70. See, too, Israelsohn v Commissioner for Inland
Revenue 1952 (3) 5A 529 (A) at 540F-H; Commissioner for Inland Revenue v Widan
1955 (1) SA 226
(A) at 235B-C; Glen Anil Development Corporation Ltd v Secretary
for Inland Revenue
1975 (4) SA 715
(A) at 727F-G; Willis Faber Enthoven (Pty)
Ltd v Receiver of Revenue and Another
[1991] ZASCA 163
;
1992 (4) SA 202
(A) at 216C-D; Steyn Die
Uitleg van Wette 5th ed 111). Here the indications in the section, discussed
above, outweigh this consideration.
For all these reasons I have been persuaded that the court a quo erred in
holding that the duty to pay a development contribution
in the present case only
arose if, and thus was deferred until, the owner in some way or other sought to
profit from the amendment
scheme.
29
In my opinion s 51(9) does not defer the payment
of a
development contribution which has become payable
in terms of section
51(4)(a). That means that a
development contribution can be recovered from an
owner
referred to in s 51(4)(a) even if none of the events
referred to in
s 51(9) has yet taken place. The
failure to aver that such an event had
occurred
accordingly does not render the particulars of claim
excipiable.
The exceptions, in short, should not have
succeeded. As for the costs, the
parties, as stated
earlier, had subsequently agreed that no order
for
costs would be sought, either in this court or in the
court below.
The appeal is upheld. The order of the court a quo is altered to read: "The
exceptions to the particulars of claim are dismissed."
P M Nienaber Judge of Appeal
EM GROSSKOPF JA] EKSTEEN JA ] CONCUR
HOWIE AJA ] VAN COLLER AJA ]