Liebenberg NO and Others v Bergrivier Municipality (CCT 104/12) [2013] ZACC 16; 2013 (5) SA 246 (CC); 2013 (8) BCLR 863 (CC) (6 June 2013)

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Liebenberg NO and Others v Bergrivier Municipality (CCT 104/12) [2013] ZACC 16; 2013 (5) SA 246 (CC); 2013 (8) BCLR 863 (CC) (6 June 2013)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 104/12
[2013] ZACC 16
In the matter between:
JACOBUS JOHANNES LIEBENBERG N.O.
AND 84 OTHERS
...............................................................................................
Applicants
and
BERGRIVIER MUNICIPALITY
......................................................................
Respondent
and
MINISTER FOR LOCAL GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND
DEVELOPMENT PLANNING, WESTERN CAPE
................................
Intervening
Party
Heard on : 12 March 2013
Decided on : 6 June 2013
JUDGMENT
MHLANTLA AJ (Mogoeng CJ, Moseneke DCJ, Froneman J, Nkabinde J,
Skweyiya J and Zondo J concurring):
Introduction
[1] This application was brought by 85 landowners (applicants) who
farm within the area of jurisdiction of the Bergrivier Municipality

(Municipality). The applicants are all members of the Bergrivier
Belastingbetalers-vereniging (BBV), a ratepayers’ association.
[2] The
respondent, the Municipality, was established on 5 December 2000 as a
category B local municipality. Its areas of jurisdiction
include the
towns of Piketberg, Porterville, Velddrif and other smaller towns. A
significant proportion of the areas are rural
and nearly 40% of the
population lives in rural areas.
[3] The
intervening party is the Minister for Local Government, Environmental
Affairs and Development Planning, Western Cape, who
was admitted by
this Court and allowed to make submissions limited to the issue of
appropriate redress.
[4] The
applicants have brought their application to this Court for leave to
appeal against a decision of the Supreme Court of Appeal
in terms of
which that Court dismissed their appeal against a judgment of the
Western Cape High Court, Cape Town (High Court),
and upheld a
cross-appeal by the Municipality.
1
At issue is the validity of certain municipal rates, which the
applicants have refused to pay for a period of some eight years.
Background
[5] Prior to the adoption of the interim Constitution, rural
landowners were not required to pay municipal rates.
2
That position changed with the transition to democracy. The new
dispensation, built up through a variety of constitutionally mandated

legislative instruments, established a framework ensuring that all
land, including the rural tracts belonging to the applicants,
became
subject to the authority of municipalities to impose rates on
property.
3
[6] After
5 December 2000, the Municipality began to impose levies and rates in
respect of the applicants’ rural land in terms
of the Local
Government Transition Act
4
(Transition Act) and the Local Government: Municipal Finance
Management Act
5
(Finance Act). As from 2001, the applicants refused to pay certain of
the levies and rates imposed. They did not approach a court
to
adjudicate their dispute with the Municipality.
[7]
Starting from 2005, the Municipality launched enforcement proceedings
in the Piketberg Magistrate’s Court against various
landowners
to collect outstanding levies and rates. The applicants resisted the
enforcement proceedings by disputing the lawfulness
and validity of
the imposts. Since the Magistrate’s Court did not have
jurisdiction to determine the validity of such levies
and rates, the
Municipality eventually agreed that it would abandon the enforcement
proceedings in the Magistrate’s Court
and would seek
declaratory orders in the High Court with regard to the validity of
the levies and rates.
6
High
Court
[8] In
2010, the Municipality sought declaratory orders from the High Court
that the levies and rates imposed by it in the financial
years from
2001/2002 to 2008/2009 were lawful and valid.
7
To the extent that the relevant imposts may have been declared valid,
the Municipality sought an order against the applicants for
the
enforcement and payment of the outstanding debts. The applicants
opposed the granting of the declaratory order.
[9] The
High Court (per Binns-Ward J) concluded that the levies imposed in
the 2001/2002 and 2002/2003 financial years were not
lawfully
imposed, but the rates imposed in the 2003/2004, 2004/2005 and
2005/2006 years were recoverable. The Court also concluded
that the
Municipality had not complied with statutory requirements when it
imposed the property rates during the 2006/2007, 2007/2008
and
2008/2009 financial years and that these could not be recovered. The
High Court granted the applicants leave to appeal in respect
of the
2004/2005 and 2005/2006 years, whilst the Municipality was allowed to
cross-appeal in respect of the other years.
Supreme
Court of Appeal
[10] By
the time the matter reached the Supreme Court of Appeal, the rates
imposed in respect of the 2001/2002 and 2003/2004 financial
years
were no longer in issue.
8
The Supreme Court of Appeal (per Lewis JA) rejected all the
applicants’ challenges. It consequently dismissed the
applicants’
appeal and upheld the Municipality’s
cross-appeal with costs.
[11] I
will engage in a more detailed discussion of the reasoning of both
the High Court and Supreme Court of Appeal as I deal with
the merits
of the appeal before us.
Issues
[12] The
applicants contend that the Municipality failed to act in accordance
with the strictures of the Constitution and statutory
prescripts when
imposing certain rates and levies. According to the applicants, the
Municipality acted
ultra vires
9
the governing legislation and the rates were accordingly invalid.
Considering the multiple grounds raised in respect of different

financial years, it is useful to outline the issues before this
Court, which are as follows:
(a) Leave to appeal.
(b) Condonation.
(c) The approach to assessing a municipality’s compliance with
statutory prescripts.
(d) The interpretation and application of the relevant statutory
provisions relating to rates imposed in the financial years 2006/2007

to 2008/2009.
(e) Other challenges raised in respect of each of the financial years
under consideration.
Leave
to appeal
[13] As
previously indicated, the applicants approach this Court for leave to
appeal against the decision of the Supreme Court of
Appeal. The
applicants submit that their challenges are rooted in the principle
of legality and, as such, are constitutional matters.
They
argue that leave to appeal should be granted as the issues raised are
important not only to the present litigants, but also
to ratepayers
and local government generally. They contend that it is in the public
interest that this Court pronounce on these
issues since the legality
of property rates has been challenged in a number of other cases.
[14] Opposing the granting of leave to appeal, the Municipality
emphasises that our constitutional framework establishes reciprocal

rights and duties between the political structures of the
Municipality and members of the local community.
10
Relying on
Pretoria City Council v Walker
,
11
the Municipality characterises the conduct of the applicants as
impermissible self-help. The Municipality has suffered a significant

reduction in its income as a result of the unlawful conduct on the
part of the farm owners, and it is therefore not able to meet
its
constitutional obligations to the local community effectively.
Further, there is no contention that the Municipality failed
to
comply with its obligation to provide services, from which the
applicants benefitted. The Municipality submits that it would
not be
in the interests of justice for the current state of affairs to be
permitted to continue.
[15] In my
view, the matter raises important constitutional issues relating to
the principle of legality as well as the interpretation
and
application of a variety of statutes regulating local government.
These issues, which are related to the core aspects of the
powers and
duties of municipalities, impact not only on the parties before us,
but on other ratepayers as well. It is accordingly
in the public
interest that this Court pronounces on these issues.
[16] It is
also significant that the parties agreed that the Municipality would
approach the High Court for a declaratory order
on the validity of
the relevant imposts rather than direct enforcement proceedings. It
was within that context – in opposition
to the declaratory
order – that the applicants raised their challenges and it is
those proceedings that are before us now.
This is not an instance,
therefore, where the Court has to determine whether the applicants
have brought a so-called collateral
challenge and their entitlement
to do so. For these reasons it is in the interests of justice to
grant leave to appeal.
Condonation
[17] The
applicants were due to file the record in this matter on 10 January
2013. On 20 December 2012 they filed a letter requesting
an extension
of the filing date to 30 January 2013. The applicants
eventually filed the record on 5 February 2013.
The
explanation offered is that they faced unforeseen logistical and
financial constraints in preparation of the record. They submit
that
the explanation for the delay is reasonable and that minimal
prejudice has been suffered by the respondent. In my view, even

though this Court had to issue directions to nudge the applicants to
comply with relevant timelines, the logistics and costs issues
were
real and beyond the applicants’ immediate control and it is in
the interests of justice to grant condonation.
[18] The
applicants also failed to meet the deadline for the filing of their
written submissions which were due to be filed on 5 February 2013.

These were lodged on 8 February 2013. The applicants
explain that the delay was caused by an email error as well as
transport difficulties. The delay in the filing of the written
submissions was only three days and the explanation offered is
adequate.
There has been no opposition to the condonation sought and
it appears that the Municipality did not suffer any substantial
prejudice
as it was granted an extension for the lodging of its
written submissions. It is therefore in the interests of justice to
grant
condonation for the late filing of the written submissions.
[19] The
applicants have, correctly in my view, tendered costs in respect of
the condonation applications. A costs order to that
effect will be
made.
Merits
[20] I
turn now to consider the main grounds of the challenge to the
Municipality’s actions. The applicants contend that the

Municipality acted
ultra vires
the governing legislation and
the rates were accordingly invalid. A number of grounds were raised
in respect of the rates for each
financial year.
[21]
First, I will outline the broad approach a court should adopt when
assessing alleged non-compliance of a municipality with
statutory
prescripts. Second, I will address the applicants’ challenges
relating to whether the Municipality relied on the
incorrect
legislation when imposing the rates for the financial years from
2006/2007 to 2008/2009. As will be seen, the proper
interpretation of
the applicable statutory framework regulating local government lies
at the heart of much of the applicants’
case. Thereafter, I
will discuss the merits of the specific challenges raised in respect
of each of the financial years under consideration.
Approach
to assessing a municipality’s compliance with statutory
prescripts
[22] The
applicants contend that the Municipality failed to comply with
various statutory prescripts in respect of the rural levies
and
property rates imposed. The Municipality submits that should this
Court conclude that there were instances of such non-compliance
on
its part, then this should not necessarily result in the invalidity
of the rates imposed. Rather, the test should be whether
there has
been compliance with the relevant prescripts in such a manner that
the objects of the statutory instruments concerned
have been
achieved.
[23] In
Unlawful Occupiers
,
School Site v City of Johannesburg
,
12
the Supreme Court of Appeal stated:
“
[I]t
is clear from the authorities that even where the formalities
required by statute are peremptory it is not every deviation
from the
literal prescription that is fatal. Even in that event, the question
remains whether, in spite of the defects, the object
of the statutory
provision had been achieved”.
13
[24] This was amplified by the Supreme Court of Appeal in
Nokeng
Tsa Taemane Local Municipality v Dinokeng Property Owners Association
& Others
14
where it was stated:
“
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. . . . 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.”
15
[25] In
African Christian Democratic Party v Electoral Commission
and Others
,
16
this Court, in the context of assessing a local authority’s
compliance with municipal electoral legislation, held that “[a]

narrowly textual and legalistic approach is to be avoided”.
17
Rather, the question is whether the steps taken by the local
authority are effective when measured against the object of the
Legislature,
which is ascertained from the language, scope and
purpose of the enactment as a whole and the statutory requirement in
particular.
18
[26]
Therefore, a failure by a municipality to comply with relevant
statutory provisions does not necessarily lead to the actions
under
scrutiny being rendered invalid. The question is whether there has
been substantial compliance, taking into account the relevant

statutory provisions in particular and the legislative scheme as a
whole.
The applicable statutory framework for the financial years from
2006/2007 to 2008/2009
[27] The
Municipality imposed rates for all of the relevant financial years in
terms of section 10G(7) of the Transition Act.
19
It is common cause that this was the source of the Municipality’s
power to impose rates before the 2006/2007 financial year.
However,
there is a dispute between the parties as to the proper legislation
to be applied for that year and the years that followed.
[28] In
this regard, the applicants contend that section 10G(7) could not
have been the lawful source of the power to impose rates
over the
2006/2007 to 2008/2009 periods. They submit that this is because that
section was repealed by section 179 of the Finance
Act with effect
from 2 July 2005. The Municipality, on the other hand,
contends that the life of section 10G(7) was extended
by the
transitional provisions of the Local Government: Municipal Property
Rates Act
20
(Rates Act). One of the key differences between the parties,
therefore, is whether
section 10G(7) survived the
enactment of the Rates Act as a result of these transitional
provisions.
[29]
Section 179 of the Finance Act, which came into operation from 1 July
2005, provides in relevant part as follows:
“
Repeal
and amendment of legislation
(1) The legislation referred to
in the second column of the Schedule is hereby amended or repealed to
the extent indicated in the
third column of the Schedule [including
section 10G].
(2)
Despite the repeal of
section 10G of the Local Government Transition Act, 1993
(Act 209
of 1993), by subsection (1) of this section,
the provisions
contained in subsections (6), (6A) and (7) of section 10G remain in
force until the legislation envisaged in section
229(2)(b) of the
Constitution is enacted
.” (Emphasis added.)
[30]
Section 179 states that legislation appearing in the second column of
the Schedule to the Finance Act is amended or repealed
to the extent
indicated in the third column of the Schedule. This Schedule reflects
three Acts in the second column (including
the Transition Act). In
the third column, it states: “The repeal of section 10G.”
Section 179(2), however, delays
the coming into force of the
repeal of certain parts of section 10G – more
specifically, section 10G(6), (6A) and (7)
– until the
legislation envisaged in section 229(2)(b) of the Constitution is
enacted.
21
[31] The
literal meaning of section 179 is that the provisions of section
10G were, save for section 10G(6), (6A) and (7),
repealed with
immediate effect. Those three subsections would remain in force until
the enactment of legislation in terms of section 229(2)(b)
of
the Constitution. This legislation later turned out to be the Rates
Act, which came into force on 2 July 2005.
[32] The
Rates Act includes various transitional provisions. Amongst these are
sections 88 and 89, which provide in relevant
part as follows:
“
88.
Transitional
arrangement: Valuation and rating under prior legislation.
(1) Municipal valuations and
property rating conducted before the commencement of this Act by a
municipality in an area
in terms of legislation repealed by this
Act, may, despite such repeal, continue to be conducted in terms of
that legislation
until the date on which the valuation roll
covering that area prepared in terms of this Act takes effect in
terms of section 32(1).
(Emphasis added.)
. . .
89. Transitional arrangement:
Use of existing valuation rolls and supplementary valuation rolls.
(1) Until it prepares a
valuation roll in terms of this Act, a municipality may—
(a) continue to use a valuation
roll and supplementary valuation roll that was in force in its area
before the commencement of this
Act; and
(b) levy rates against property
values as shown on that roll or supplementary roll.
(2) If a municipality uses
valuation rolls and supplementary valuation rolls in terms of
subsection (1) that were prepared by different
predecessor
municipalities, the municipality may impose different rates based on
different rolls, so that the amount payable on
similarly situated
properties is more or less similar.
(3) The operation of this
section lapses six years from the date of commencement of this Act,
and from that date any valuation roll
or supplementary valuation roll
that was in force before the commencement of this Act may not be
used.”
22
[33] The
High Court upheld the argument of the applicants that when the Rates
Act came into operation, the plain meaning of section
179 of the
Finance Act meant that section 10G(7) ceased to apply and the
Municipality was required to levy rates in terms of the
Rates Act.
[34] The
Supreme Court of Appeal disagreed and reversed the decision of the
High Court. It noted that the transitional provisions
of the four
statutes on municipal governance were “complex and confusing”.
23
Nonetheless, the Supreme Court of Appeal held that these statutes
showed a clear purpose to empower rating in every municipality

through a variety of mechanisms until uniform and permanent systems
were put in place. The Court held that the transitional provisions
of
both the Finance Act and the Rates Act kept the empowering provisions
of section 10G(7) alive until the period referred to in
section 89(3)
had expired and that throughout that period section 10G(7) empowered
the Municipality to impose rates. The Court
concluded that the
interpretation by the High Court would lead to the absurd result that
the bridging mechanism in sections 88
and 89 of the Rates Act would
be available to municipalities that relied on old-order rating
legislation (for example, old-order
provincial Ordinances) but it
would not avail municipalities which were using section 10G(7).
[35] In
this Court, the applicants submit that section 179 of the Finance Act
repealed section 10G(7) on 2 July 2005 and the Municipality
ought to
have complied with the provisions of the Finance Act and the Rates
Act when imposing rates in respect of the 2006/2007,
2007/2008 and
2008/2009 financial years respectively.
[36] The
Municipality, on the other hand, urges us to adopt the view of the
Supreme Court of Appeal. The Municipality argues that
the Court
correctly interpreted the various statutes which facilitated the
transition from the old-order provincial Ordinances
to the current
rating legislation. It further contends that a purposive approach to
interpretation supports reading the phrase
“legislation
repealed by this Act” in section 88(1) of the Rates Act as not
only including legislation specified in
the Schedule of repealed
legislation, but also referring to legislation repealed by the Rates
Act by virtue of the fact of its
commencement ‒ such as section
10G(7).
[37] The
argument advanced by the applicants cannot be sustained. I recognise
that the term “repealed by this Act” could
be construed
narrowly to mean “in terms of this Act”, and this narrow
interpretation might have us turn our attention
to legislation
specifically repealed in terms of the relevant Act.
24
Indeed, had the phrase “in terms of this Act” in fact
been used by the Legislature, we may well be straining the text
too
far to suggest that there could be any other reasonable construction.
However, that is not the wording that we are presented
with here.
[38]
Rather, the ordinary meaning of the phrase “repealed by this
Act” does not preclude the possibility of a broader

construction as referring to legislation “repealed by the
coming into effect of this Act” or “repealed as a result

of this Act”. Further as I explain below, the narrower
interpretation potentially results in absurdity whereas the broader

interpretation better meets the purposes of the legislative scheme.
It is
established that the ordinary meaning of the words in a statute must
be determined in the context of the statute (including
its purpose)
read in its entirety.
25
It is important when considering the legislative purpose of the
Rates Act not only to have regard to the provisions of that Act
but
also to take into account the broader context within which it was
passed and the relationship between the various statutory
enactments
that have sought to restructure local government.
A
municipality’s authority to impose rates and levies is derived
from section 229 of the Constitution.
26
The purpose of a municipality’s revenue-raising powers is to
finance a municipality’s performance of its constitutional
and
statutory objects and duties as set out in sections 152(1) and 153
of the Constitution. These include the provision of services
to
communities in a sustainable manner, promoting social and economic
development and providing for the basic needs of the community.

These objects are integral in the task of constructing society in
the functional areas of local government.
27
The
statutory framework for the transition to democratic local
government envisaged a staggered process implemented over several

years. The first step in this process was the adoption of the
Transition Act. This Court stated in
Executive Council,
Western Cape Legislature, and Others v President of the Republic
of South Africa and Others
:
28
“
The Transition Act was
intended and drafted to govern the reconstruction of local government
from A to Z. . . . Its principles and
terms were separately
negotiated. It was then passed by the ‘old’ Parliament as
part of the statutory scaffolding agreed
upon by the negotiating
parties as necessary before, during and after the transition of
national and provincial government.”
29
In
1996, a number of provisions were inserted into the Transition Act
by the
Local Government Transition Act Second
Amendment Act.
30
In particular, section 10G(6) and (7) were introduced to regulate
the powers of local government to impose rates and levies and

conferred a freestanding rate-levying competence on municipalities.
The primary purpose of these subsections was “to ensure
that
every municipality conducts its financial affairs in an effective,
economical and efficient manner, with a view to optimising
the use
of its resources in addressing the needs of the community.”
31
The
Transition Act was due to lapse on 30 April 1999. However, the life
of its financial provisions was extended on at least two
occasions.
The first instance was in 1998, by means of a constitutional
amendment,
32
which extended the life of the whole of the Transition Act for a
limited period. The second was by an amendment to the Structures

Act, which kept in place section 10G for an indefinite period.
33
During this period, the old-order legislation in terms of which
municipalities could levy rates on property remained in force.
34
The
extension of the life of section 10G demonstrates a recognition that
municipalities would need time to develop systems and
processes
required by the new legislative framework and an intention to assist
municipalities with the transition to the new
regime. The
legislative scheme has been directed at ensuring a facilitated
rating mechanism for municipalities until uniform
and consistent
rating systems have been put in place. As the final step in that
process, the Rates Act recognises that it still
needs to accommodate
for transitional adjustment. It does so through its transitional
arrangements relating to valuation and
rating
35
and the use of existing valuation rolls.
36
It is
significant that section 179(2) of the Finance Act does not simply
provide a date on which the legal force of the repeal
would be
effected. Rather, the Legislature specifically built a scheme where
the legislative trigger for the repeal would lie
in one statute
(Finance Act), but it would only be the coming to life of another
legislative enactment (Rates Act) that would
give final legal force
to the repeal. Viewed in this manner, it must be accepted that but
for the enactment of the Rates Act,
the repeal of section 10G(7)
would never have taken effect.
Counsel
for the applicants persisted with the submission that if the purpose
of section 88 of the Rates Act were to keep alive
section 10G(7)
then its language would have made this clear by listing section
10G(7) under the Schedule to the Act. This, however,
misses the
point. The Legislature did not have to refer back specifically to
section 10G(7) or to the Finance Act, since the
very scheme of the
transitional legislation already contemplates that they work
hand-in-hand. In this unique legislative suite,
it is necessary to
read the Rates Act and the Finance Act in tandem and to recognise
that the various provisions in the different
statutes work together
in a coordinated scheme.
This principle is aptly captured in
Rates Action Group v City
of Cape Town
:
37
“where a particular statute forms part of a suite of statutes,
then it is logical to analyse that suite as a whole in order
to
determine what the overall legislative scheme is.”
38
The
applicants sought to rely on
Rates Action Group
39
as authority for the view that section 10G(7) was meant to play no
further role once the Rates Act came into effect. I see it

differently. It is true that in that case the suggestion was made
that the relevant provisions of the Transition Act would no
longer
serve any purpose once the Rates Act came into operation. But one
has to recognise that the transitional provisions of
the Rates Act ‒
in particular section 88 ‒ were not under consideration there.
And therefore the extent to which
the Rates Act itself provided for
the continuation of the life of section 10G(7), amongst other
provisions, was not within
that Court’s sights.
The
recognition that it is only once “the [Rates Act] has been
enacted, [that] the relevant provisions of the [Transition
Act] will
finally fall away”
40
drives home the point that the repeal of section 10G(7) was provided
for not only through the Finance Act, but also through the
coming
into force of the Rates Act. The purpose of the legislative scheme
and the Rates Act has been to provide for a facilitated
rating
mechanism and consistency in the rating process by local government.
As the final step in that process, the Rates Act
recognises that it
still needs to accommodate for transitional adjustment. And it does
so through its transitional arrangements
relating to valuation and
rating, and the use of existing valuation rolls.
I
therefore agree with the Supreme Court of Appeal that it is
difficult to comprehend why the Legislature would have intended
to
allow valuation and rating to continue under the old-order
legislation, but to exclude municipalities that were operating
under
the Transition Act from that benefit. As counsel for the
Municipality argued before us, this would be at odds with the

broader objectives of trying to help, rather than hinder, the
ability of municipalities finally to come into line with the Rates

Act. It would also sit uncomfortably with the provisions allowing
for the continued use of old valuation rolls by municipalities
that
had been imposing rates in terms of the Transition Act.
To
conclude on this point: on a proper interpretation, section 179(2)
of the Finance Act suspended the legal operation of the
repeal of
section 10G(7) and provided for its continued existence alongside
the Finance Act. The repeal of section 10G(7) depended
on the
enactment of the Rates Act and was subject to the transitional
provisions of section 88 of that Act. It follows that
section
10G(7) applied throughout the period covering the contested imposts
and the applicants’ attack on the validity
of the rates on the
ground described above fails.
I
have read the dissenting judgments of my brother Jafta J as well as
my sister Khampepe J. Both would conclude that section 10G(7)
was
repealed by the Finance Act and did not survive the coming into
effect of the Rates Act. However, they hold different views
as to
the construction and effect of the word “enacted” used
in section 179(2). While respectfully differing from
Khampepe J on
her final conclusion relating to the survival of section 10G(7), I
would align myself with the approach she adopts
to the
interpretation of “enacted” as used in section 179(2) ‒
it cannot have been intended that for 13 months
there should be no
regulation of the rating of rural properties by municipalities.
The
next leg for consideration is whether the Municipality complied with
statutory prescripts when it imposed the property rates
during the
relevant financial years. I consider each challenge in chronological
order.
Challenges in respect of each financial year
(a) Unauthorised amendment of rates in the 2002/2003 financial
year
On 13
June 2002, the Municipality’s Council (Council) approved the
budget for the 2002/2003 financial year. It approved
a rural levy
for properties calculated by means of a sliding scale,
41
as opposed to a calculation based on a valuation roll. This was done
because the rural properties had not yet been valuated.
On 21 June
2002, the Municipality published notices of its budget, rates and
tariffs for the 2002/2003 financial year, including
the
sliding-scale rural levy, and indicated that written objections must
be lodged within 14 days.
On 29
July 2002, after receiving objections, the Municipality confirmed
the sliding-scale determinations but also resolved to
obtain a
provisional valuation of all properties. This valuation exercise was
completed during 2002 and the Municipality published
notices in
local newspapers advising that a general valuation roll was open for
inspection and invited objections in terms of
the relevant
provincial property valuation ordinance.
42
On 26 May 2003, before the end of the financial year and in
accordance with the general valuation, the Council resolved that

rural properties would be subject to a property rate of 0.2474c in
the Rand for the 2002/2003 year rather than the sliding-scale
levy.
The amounts paid in terms of the sliding-scale levy would be set off
against the payment of the rate in accordance with
the valuation
roll.
Before
turning to an assessment of the complaints raised by the applicants,
it is useful to set out the scheme of section 10G(7)
insofar as it
is relevant to this discussion. Section 10G(7)(a)(i) empowers a
municipality to impose, by resolution, property
rates in respect of
certain immovable property. Section 10G(7)(a)(ii) empowers a
municipality, by resolution, to impose levies,
fees, taxes and
tariffs in respect of any function or service of the municipality.
Section 10G(7)(c) provides that, after a resolution
as contemplated
in sections 10G(7)(a)(i) or 10G(7)(a)(ii) is passed, a notice must
be displayed stating the general purport of
the resolution, the date
on which the resolution shall come into operation, the date on which
the notice is first displayed,
and inviting objections within 14
days after the date on which the notice is first displayed. Section
10G(7)(b)(ii) allows a
municipality to amend or withdraw a
determination in respect of imposts other than property rates and
determine the commencement
date of the resolution, which must be at
least 30 days after the date on which the resolution was taken.
Section 10G(7)(d)(ii)
provides that where an objection is lodged,
the municipality must consider the objection and may withdraw or
amend the determination.
It may also determine a date other than
that provided for in section 10G(7)(b)(ii) on which the
determination or amendment shall
come into operation, whereupon a
notice must be displayed stating the general purport of the
resolution.
The
High Court and the Supreme Court of Appeal agreed with the
applicants’ contention that the sliding-scale levy determined

by the Municipality on 29 July 2002 was not in fact a levy, but an
unlawfully imposed rate. This is because a levy could only
be
determined in respect of “any function or service of the
municipality.” The sliding-scale ‘levy’ imposed
by
the Municipality was not based on any such service or function, but
rather was based on property ownership. It was therefore
truly a
property rate.
43
It
has been the applicants’ position that the 26 May 2003
resolution amounted to an amendment of the earlier property ‘rate’.

They argue that—
section
10G(7)(b)(ii) confines the power of amendment to charges other than
property rates, and therefore the 26 May 2003 resolution
amounted to
an unauthorised amendment of an earlier property rate and was
accordingly
ultra vires
;
the
Municipality failed to publicly give notice of its 26 May 2003
resolution in terms of section 10G(7)(d)(ii); and
the
resolution purported to take effect immediately (ie on 26 May 2003),
whereas section 10G(7)(b)(ii) required that it had to
determine a
date 30 days or more after the date of the resolution on which it
would come into operation.
44
The Supreme Court of Appeal rejected the applicants’ first
argument. It held that the applicants could not, on the one
hand,
argue that the levy was invalid as it was in truth a rate and, on
the other hand, complain that “when it was replaced
by a
lawful rate, that it should have been amended as if it were a
levy.”
45
I agree. The applicants cannot have it both ways and their
contention on this score must fail. The Supreme Court of Appeal did

not deal with the other complaints of the applicants in respect of
this financial year. I do, however, find it necessary to address
the
other contentions.
The
High Court found in favour of the applicants that the 26 May 2003
resolution was an amendment of the earlier resolution, and
was not
authorised by section 10G(7). The High Court’s reasoning
focused on the concern that the Municipality did not,
after amending
its determination in the light of objections received and valuations
process undertaken, display a notice “stating
the general
purport of the resolution” as required by section
10G(7)(d)(ii) read with section 10G(7)(c)(i) of the Transition
Act.
The High Court held that this constituted material non-compliance
with the requirements of section 10G(7).
In my
view, the High Court failed to properly assess whether the steps
taken by the Municipality in relation to that financial
year’s
imposts were, ultimately, substantially effective when measured
against the purpose of the relevant provisions and
the scheme as a
whole. It is true that the Municipality did not display any notice
regarding the resolution of 26 May 2003. However,
the Legislature
could not have envisaged that this non-compliance should void the
whole process in circumstances where the Municipality
had in fact
engaged in a public participation process and was responsive
thereto. After receiving objections to the notification
of the
sliding-scale levy, the Municipality engaged with the public and
undertook to complete the valuations process, which it
did. It
issued notices regarding that valuation and made an amendment in
line with the outcome thereof. In line with the approach
set out
earlier, the measures taken by the Municipality were substantially
effective in achieving the objects of section 10G(7)
in particular
and the legislative scheme as a whole.
In
respect of the third contention by the applicants, once again their
complaint relies exclusively on provisions relating to
the amendment
of imposts other than rates (ie section 10G(7)(b)(ii)). For the
reasons set out above,
46
it is not open to the applicants to argue both that the levy was
invalid as it was in truth a rate and then also complain that
it
should have been amended as if it were a levy.
(b) Failure to call for objections before the date of commencement
of rates for the 2004/2005 financial year
The notice of the resolution levying rates for the 2004/2005
financial year was published in local newspapers on 8 July 2004.
The
date of commencement of the rates was 1 July 2004. The notice
provided for objections by 30 July 2004. It further stated
that
payment for rates had to be made on or before 30 September 2004 or
in 12 monthly payments payable before or on the 25
th
day
of each month.
The applicants contend that the fact that the rates had become due
before the commencement of the 14-day objection period provided
for
by section 10G(7)(c)(iv) was a fatal flaw and effectively amounted
to a retrospective imposition of rates. They rely on the
minority
reasoning in
Kungwini Local Municipality v Silver Lakes Home
Owners Association and Another
47
and argue that they were faced with an accomplished fact and, as a
result, were in a weaker position to object.
48
The
High Court and the Supreme Court of Appeal rejected the minority
opinion in
Kungwini
, concluding that the resolution remained
open for amendment and that there was therefore a valid purpose in
calling for objections.
I agree. The ratepayers were not required to
make payment on 1 July 2004. The period afforded for payment allowed
sufficient
time for reconsideration of the rate in the light of any
objections received to the notice and the relevant resolutions could
be amended where necessary. There was therefore substantial
compliance with the statutory requirements and a meaningful purpose

to the objections process. The attack accordingly fails.
(c) The
general purport requirement of the rating resolution notices in the
2004/2005 to 2008/2009 financial years
The
chief executive officer of the municipality is, in terms of section
10G(7)(c)(i), obliged to cause a notice to be displayed
stating the
“general purport” of a rates resolution after it has
been passed.
The
applicants challenge the validity of the notices published by the
Municipality in respect of the rates for the 2004/2005 to
2008/2009
financial years, inclusive, in that these notices failed to specify
the general rural rebate (that is, the general
rebate on ordinary
residential rates applying to all farm properties). By failing to
specify the general rebate in the notice
itself, the applicants
submit that the notices did not indicate the general purport of the
resolution. The applicants rely on
Kungwini
, where the
Supreme Court of Appeal stated that the object of the general
purport requirement is that ratepayers “should
know what rates
they would have to pay, and from when those rates would be
payable.”
49
The
High Court and the Supreme Court of Appeal held that the notices
adequately reflected the general purport of the resolution
since
interested parties were advised that the resolutions were available
for inspection.
I
agree that the argument on behalf of the applicants is flawed. Their
reliance on
Kungwini
is misplaced as the facts of that case
are distinguishable.
Kungwini
was concerned with a notice
that itself had contradictory content and which could mislead
ratepayers.
50
That is not the situation here. The notices in this case indicated
that the rates referred to all rateable properties, although
it did
not refer to rural properties and mention the rural rebates in
particular. It did, however, state that rebates would be
applied to
certain properties and that the detail of the resolutions was
available for inspection. It follows that the information
was
readily available. Therefore, there was due compliance with the
general purport requirement.
51
(d) Levying rates in terms of the procedures set out in the
Finance Act for the 2005/2006 to 2008/2009 financial years
As previously stated, most of the provisions of the Finance Act came
into operation on 1 July 2004. For the financial years following
the
commencement of the Finance Act, the Municipality continued to
impose rates on the basis of section 10G(7). There were instances,

however, where the Municipality only complied with the requirements
of the Finance Act in the manner that it levied the rates.
The
applicants contend that, to the extent that the Municipality relied
on section 10G(7) as the source of its power, it
should have
complied with the procedures therein. In this regard the applicants
argue that the notices published in respect of
the rating
resolutions for these years omitted to state that objections could
be lodged within 14 days after the date on which
the notice is first
displayed
, which is a requirement set out in
section 10G(7)(c)(iv).
The
applicants submit that the Finance Act process is not inconsistent
with the Transition Act. The former allows for a notice
and comment
procedure before the resolution imposing property rates is passed
whilst the latter regulates the process after the
passing of such
resolution. Therefore both should be followed.
This
argument is fallacious and I agree with the High Court and the
Supreme Court of Appeal. The High Court as well as the Supreme
Court
of Appeal held that the Municipality was not required to comply with
both statutes (Finance Act and Transition Act) at
the same time. The
Courts stated that Chapter 4 of the Finance Act regulated the manner
of levying rates from the date of commencement.
The Finance Act
imposed requirements inconsistent with the Transition Act and, to
the extent that this was so, the provisions
of the Finance Act
prevailed.
In my
view, it would be absurd for the Legislature to have intended the
Municipality to perform the notice and comment exercise
twice (both
before and after the final budget had been adopted). That would
place an undue administrative burden on local government.
In the
result, the Municipality complied with the requirements of the
Finance Act and, in any event, substantially complied with
the
objects of the requirements in section 10G(7). This is because the
requisite notices were published, they stated that the
documents
were available for public inspection, and they called for objections
from the public.
(e) Failure to promulgate rates resolutions for the 2006/2007 to
2008/2009 financial years
The applicants submit that the Municipality was obliged, in terms of
section 14(2) of the Rates Act, to promulgate resolutions
levying
rates by publishing the resolution in the
Provincial Gazette
.
Furthermore, they contend that the Municipality’s failure to
promulgate the resolutions for the rates imposed in the years

2006/2007 to 2008/2009 is inconsistent with the rule of law and
therefore fatal to those rates. This argument was premised on
the
contention that section 10G(7) was repealed by section 179 of the
Finance Act and the Rates Act therefore applied to the
levying of
rates after 2005.
The
High Court upheld the argument of the applicants. The Supreme Court
of Appeal disagreed and held that it was not necessary
for the
Municipality to comply with the Rates Act since section 10G(7) was
still in operation by virtue of the transitional provisions
in the
Rates Act. It was therefore not necessary to comply with the Rates
Act.
I
have already dealt with the interpretation of the relevant statutory
provisions and have concluded that section 10G(7) survived
the
commencement of the Rates Act. It follows that the Municipality was
not obliged to comply with section 14(2) of the Rates Act.
The
applicants’ argument on this issue must therefore fail.
As
has become clear from the above, I find that the applicants’
challenges have no merit. The appeal therefore falls to
be
dismissed. Before proceeding to the order, however, there is one
final issue that I find necessary to address.
In
the light of the nature of the issues raised in this matter, it is
opportune to recall the sentiment of this Court expressed
by Langa
DP in
Walker
:
“
Local
government is as important a tier of public administration as any.
It has to continue functioning for the common good; it,
however,
cannot do so efficiently and effectively if every person who has a
grievance about the conduct of a public official
or a governmental
structure were to take the law into his or her own hands or resort
to self-help by withholding payment for
services rendered. That
conduct carries with it the potential for chaos and anarchy and can
therefore not be appropriate. The
kind of society envisaged in the
Constitution implies also the exercise of responsibility towards the
systems and structures
of society. A culture of self-help in which
people refuse to pay for services they have received is not
acceptable. It is pre-eminently
for the courts to grant appropriate
relief against any public official, institution or government when
there are grievances.
It is not for the disgruntled individual to
decide what the appropriate relief should be and to combine with
others or take it
upon himself or herself to punish the government
structure by withholding payment which is due.”
52
Effective
cooperation between citizens and government at local level is a
foundational building block of our democracy. The
State must of
course uphold the rule of law and ensure its obligations are
discharged. But, at the same time the culture of
non-payment for
municipal services has, as this Court has said before, “no
place in a constitutional State in which the
rights of all persons
are guaranteed and all have access to the courts to protect their
rights.”
53
Order
In
the result, the following order is made:
Condonation
is granted.
The
applicants are ordered to pay the costs of both condonation
applications.
Leave
to appeal is granted.
The
appeal is dismissed.
There
is no order as to costs in the appeal.
JAFTA J:
I
have read the judgments prepared by Mhlantla AJ (the main judgment)
and Khampepe J. I agree that leave to appeal and condonation
should
be granted. However, I disagree with the main judgment that the
appeal should be dismissed. The difference between us
lies in the
construction of the word “enacted” used in section
179(2) of the Finance Act and the interpretation
of section 88 read
with section 95 of the Rates Act.
The
main judgment construes section 88 of the Rates Act as preserving
and extending the operation of section 10G of the Transition
Act to
2 July 2011. I read the Rates Act differently and conclude that the
remnants of section 10G were repealed before the
Rates Act came
into force.
The
main judgment interprets the word “enact” in section
179(2) of the Finance Act to mean the date on which the
Rates Act
came into force. Proceeding from this premise, the main judgment
holds that the phrase “repealed by this Act”
in section
88 of the Rates Act must be accorded a broader construction which
includes “repealed by the coming into effect
of this Act”.
54
I am unable to agree. In the first place, there
is no link, in my view, between section 88 of the Rates Act and
section 10G
of the Transition Act. As illustrated in this judgment,
section 10G was repealed a year before the Rates Act came into
operation.
As
to the meaning of “enacted”, I demonstrate in this
judgment that this word has been read and understood by this
Court
to mean the signing of a Bill into law by the President. Therefore,
the date on which a statute is enacted is the date
on which the
Bill is assented to and signed into law by the President. It is
not, in my view, the date on which the statute
comes into effect.
Having given this summary, it is now convenient to set out in
detail my reasons for reaching a conclusion
different to the one
arrived at in the main judgment.
Litigation background
The
Municipality instituted these proceedings in the High Court for an
order declaring that the rural levies it imposed on properties

falling within its area of jurisdiction for the financial years
2001/2002 and 2002/2003 were lawful and valid. The properties
in
respect of which the levies were imposed belong to the applicants
(landowners). In addition, the Municipality sought an
order
declaring that the rates imposed in respect of the same properties
for the financial years commencing in July 2003 to
June 2009 were
lawful and valid. A financial year of a municipality starts on 1
July of each year and ends on 30 June of the
following year.
The
landowners opposed the application on various grounds, including
legality and non-compliance with procedural requirements
of a
number of statutes. But before the hearing in the High Court, the
landowners conceded that rates for the 2003/2004 financial
year
were lawfully imposed. For its part, the Municipality conceded that
levies for the 2001/2002 financial year were not lawfully
imposed.
This meant that there was no longer a
lis
between the
parties in respect of these financial years.
The
“levies” for the financial year 2002/2003 were still in
dispute. As were the rates for the years 2004/2005,
2005/2006,
2006/2007, 2007/2008 and 2008/2009. The High Court found that the
levies for the 2001/2002 financial year and the
rates for the
2002/2003 financial year were not lawfully imposed. This finding
was reached despite the fact that the Municipality
had conceded
unlawfulness in respect of the 2001/2002 financial year. The High
Court found that the rates for the 2004/2005
and 2005/2006 years
were lawfully imposed and ordered the landowners to pay them. In
respect of the years 2006/2007, 2007/2008
and 2008/2009, the High
Court held that the rates were not lawfully imposed because
statutory requirements were not followed
in imposing them.
55
The
High Court granted parties on both sides leave to appeal to the
Supreme Court of Appeal. The Supreme Court of Appeal dismissed
the
appeal by the landowners and upheld the cross-appeal by the
Municipality. The Supreme Court of Appeal declared that the
rates
for 2002/2003 and the other financial years were lawfully imposed
and ordered the landowners to pay them.
In
this Court the landowners seek leave to appeal against the order of
the Supreme Court of Appeal. There can be no doubt that
the matter
raises constitutional issues. It involves the exercise of public
power, and legality was raised as a defence against
the exercise of
such power. The interests of justice also favour the granting of
leave because there are prospects of success.
Issues
The
first issue for determination is the question of legality. I
consider this to be the main issue because, on my construction,
it
covers five of the seven financial years in dispute. These are the
2004/2005, 2005/2006, 2006/2007, 2007/2008 and 2008/2009
financial
years. The issue is whether the Municipality was empowered by
section 10G(7) to impose the impugned rates. The second
issue is
whether the rates imposed for the 2002/2003 financial year were
invalid because they were not authorised by legislation.
Legality
At
the outset it is important to define the content of the legality
point raised. The landowners’ argument is not that
the
Municipality had no authority to impose the rates in question.
Indeed in respect of the period after 2 July 2005,
the
Rates Act authorised municipalities to impose rates on rural
immovable property. Rather the question is whether the impugned

rates were unlawful because the provision on which the Municipality
relied for imposing them was no longer in force. In other
words,
whether the authority for imposing the rates in question existed
elsewhere, other than in the provision relied on. It
is common
cause that the Municipality relied on section 10G(7) as the source
of its authority to impose rates for the entire
period. Therefore,
the issue is whether section 10G(7) was in force at the relevant
time.
Before
addressing the question, it is useful to make one observation. In
our law, administrative functions performed in terms
of incorrect
provisions are invalid, even if the functionary is empowered to
perform the function concerned by another provision.
56
In accordance with this principle, where a
functionary deliberately chooses a provision in terms of which it
performs an administrative
function but it turns out that the
chosen provision does not provide authority, the function cannot be
saved from invalidity
by the existence of authority in a different
provision.
This
general rule admits of only one exception. This is where it is
clear from the facts that the functionary had elected to
rely on
the correct provision but mistakenly referred to an incorrect
provision.
57
The
general principle was affirmed by this Court in
Minister
of Education v Harris.
58
In issuing a notice preventing children from
commencing schooling before the year in which they turned seven,
the Minister of
Education invoked a provision which did not empower
him to issue the notice. Having realised the error, the Minister
sought
to rely on the right provision. This Court rejected the
argument that the reliance on the wrong provision was immaterial
because
the power was conferred on the Minister by another
provision. The Court held that the notice was invalid because the
provision
in terms of which it was issued did not empower the
Minister to issue the notice.
As
mentioned earlier, in this case the Municipality deliberately
relied on section 10G(7) as authority for imposing the
rates.
This is the footing on which the case was pursued in the High Court
and the Supreme Court of Appeal. If it turns out
that
section 10G(7) was no longer in force, it follows that the
imposition of the rates must be invalid. The reason being
that it
was not authorised and consequently amounted to a breach of the
principle of legality.
Relying on section 10G
The
landowners argued in the other courts and in this Court, that
section 10G(7) was repealed on 2 July 2005 when the Rates
Act
came into operation. They submitted that the rates imposed after
that date were invalid because the provision on which
the
Municipality relied was no longer in force. As appears below the
submission is not accurate insofar as it refers to the
date on
which section 10G(7) was repealed. That section was repealed on the
date on which the Rates Act was enacted.
Relying
on section 89 of the Rates Act, the Supreme Court of Appeal
rejected the argument advanced by the landowners. It held
that the
construction that says section 10G(7) ceased to operate when
the Rates Act came into force fails to give meaning
to section 89
of the Rates Act. The Court said:
“
That
interpretation fails, in my view, to give meaning to section 89:
that section specifically states that a municipality may,
until it
prepares a valuation roll in terms of the Rates Act, continue to use
a valuation roll in force before the commencement
of the Act, and to
levy rates against property values as shown on that roll. The clear
implication of this is that the Municipality
could continue to levy
rates in terms of section 10G(7) of the Transition Act and to use
the valuation roll prepared pursuant
to that section. The rating
provisions of the Transition Act were thus in force until 2 July
2005: and the Transition Act
was designed for the very purpose of
bridging the period between the operation of the provincial
ordinances and the enactment
of the legislation envisaged in the
Constitution. Moreover, section 10G was introduced to ensure that
municipalities conducted
their affairs in an effective fashion,
using the rating provisions to ensure their financial resources, and
to meet their developmental
obligations. It would be most odd if its
provisions fell away in 2005 whereas those of the Ordinances
remained in place. It would
be particularly odd as its effect would
be to remove the legislation introduced in part to enable rating of
rural properties
that had fallen outside the rating ordinances,
thereby once more excluding those properties from rating. There is
nothing to
indicate that it had been decided to exclude rural
properties from rating and that this was the purpose of this
provision.”
59
My
first difficulty with the statement by the Supreme Court of Appeal
is that the Court read section 89 of the Rates Act
60
as authorising the levying of rates when this is
not the position. The heading of section 89 makes it plain that the
section
is concerned with a transitional arrangement relating to
the continued use of existing valuation rolls and supplementary
valuation
rolls. The section authorised municipalities to use
existing valuation rolls until one of two events occurred. The one
event
was until a valuation roll is prepared in terms of the Rates
Act and the other was until section 89 lapsed, which occurred on
2
July 2011.
The
words “levy rates against property values as shown on that
roll or supplementary roll” must be read in the context
of
the section. That context is the use of existing valuation rolls.
Read in this context those words did not empower municipalities
to
levy rates but indicated the restricted use to which the existing
rolls could be put. They could be used for levying rates
only and
nothing else. It will be recalled that rates may be imposed only on
immovable property reflected on a valuation roll.
And for a
valuation roll to be used in terms of section 89, it must have been
in force immediately before the commencement
of the Rates Act.
Section
88 is the provision that permitted the continued use of legislation
which applied before the Rates Act came into force.
61
I return to this section when dealing with
differences between this judgment and the main judgment.
The second difficulty I have with the passage
quoted above from the judgment of the Supreme Court of Appeal is
that it holds
that the Transition Act was “designed for the
very purpose of bridging the period between the operation of the
provincial
ordinances and the enactment of the legislation
envisaged in the Constitution.”
62
This is inaccurate and section 179 of the
Finance Act
illustrates this point. In
terms of that section, the Transition Act was repealed but the
provincial ordinances were left intact.
These ordinances were
repealed a year later by the Rates Act.
The
Supreme Court of Appeal found it odd that section 10G would have
ceased to operate in 2005 whereas the ordinances were kept
in
operation by the transitional provisions of the Rates Act.
Proceeding from this premise the Court said:
“
To
hold thus that the Ordinances were operative before 2 July 2005, and
were repealed on that date by the coming into operation
of the Rates
Act, but that their operation continued because of the transitional
provisions, whereas section 10G was not covered
by the transitional
provisions, does give rise to an absurdity. In my view, the
transitional provisions of both the Finance Act
and the Rates Act
clearly kept the empowering provisions of section 10G alive until
the period referred to in section 89(3) had
expired. Throughout the
period in issue, therefore, section 10G(7) empowered the
Municipality to impose rates. However, when
the Finance Act came
into operation it determined the procedures to be followed in the
municipal budgetary process including
rating.”
63
The
finding by the Supreme Court of Appeal in this passage, to the
effect that section 10G(7) empowered municipalities to levy
rates
throughout the period in issue, contradicts the Court’s
earlier finding. As mentioned before, the Court held that

section 89 of the Rates Act empowered municipalities to charge
rates. I do not share the absurdity noted by the Supreme
Court of
Appeal in the construction of the transitional provisions of the
Rates Act that says the ordinances remain in force
in circumstances
where section 10G(7) is no longer in operation. As is apparent
below, section 10G(7) was repealed a year before
the Rates Act came
into force. Therefore, its operation could not be extended by the
Rates Act, no matter how absurd this may
be perceived to be.
Accordingly I find that none of the bases on which the Supreme
Court of Appeal relied, for holding that
section 10G(7) applied for
the entire period, is valid.
The
main judgment holds that section 88 must be interpreted to mean
that section 10G(7) continued to apply after the Rates
Act had
come into force. I have two difficulties with this interpretation.
The first is that section 88 extends the operation
of legislation
repealed by the Rates Act only. An inquiry into whether the Rates
Act repealed section 10G(7) reveals that it
did not. The second
difficulty is that when the Rates Act came into operation, section
10G(7) was no longer in force. I elaborate
on each of these below.
Did section 88 of the Rates Act keep section 10G(7) in operation?
The
answer to this question lies in the interpretation of section 88(1)
read with section 95 of and the Schedule to the Rates
Act.
64
Section 88(1) provides:
“
Municipal
valuations and property rating conducted before the commencement of
this Act by a municipality in an area in terms of
legislation
repealed by this Act, may, despite such repeal, continue to be
conducted in terms of that legislation until the date
on which the
valuation roll covering that area prepared in terms of this Act
takes effect in terms of section 32(1).”
The
plain reading of this section shows that it retains the use of
previous legislation in the valuation of property and also
in
imposing rates. The section states that municipal valuations may
continue to be conducted in terms of the previous legislation.
It
adds that the rating of property may continue to be conducted in
terms of such legislation subject to two conditions. The
first
condition is that the legislation must have been used to conduct
the valuations and rating before the commencement of
the Rates Act.
The second condition is that the legislation in question must have
been repealed by the Rates Act.
[108]
Both conditions must be met before section 88(1) may be invoked.
This is so because the section merely preserves the use
of
legislation that was applied before the Rates Act came into
operation, provided that such legislation was repealed by the
Rates
Act. In other words the two conditions are jurisdictional facts
which must be present before section 88 can be applied.
In this
case, the Municipality has not established that it had previously
used section 10G(7) to valuate and charge rates on
rural immovable
property. It was certainly its first attempt to impose rates on the
properties which is the subject matter of
these proceedings.
Initially and for the first two financial years (2001/2002 and
2002/2003), the Municipality imposed levies
on the properties in
question and not rates. Yet, section 88 specifically retains the
charging of rates under the previous legislation.
However, the High
Court found that the impost for 2002/2003 constituted a rate and not
a levy.
[109]
Section 229 of the Constitution
65
distinguishes rates from other levies. In its ordinary meaning the
word rates does not include levies.
66
Therefore, the use of section 10G(7) in charging a levy for the
first financial year cannot be taken as proof of the use
of the
section for purposes of imposing rates before the Rates Act came
into operation.
[110]
Even if the first requirement were established, the Municipality
would still be required to show that section 10G(7) was
repealed by
the Rates Act. To determine this issue, regard must be had to
section 95 of the Rates Act together with the relevant
Schedule.
Differently put, one must look within the four corners of the Rates
Act when determining which legislation it repeals.
Section 95 is the
only provision in the Rates Act which repeals other legislation.
[111]
Section 95 of the Rates Act indicates legislation it repeals by
referring to the relevant Schedule where the lists of repealed

legislation are contained. An examination of this Schedule reveals
that section 10G(7) is not one of the pieces of legislation
repealed
by section 95. The Schedule does not refer to section 10G(7) at all.
And since there is no other provision in the Rates
Act which repeals
legislation, there can be no basis for holding that the Rates Act
repeals legislation that falls outside the
list in the Schedule. Nor
is there justification for examining other statutes for purposes of
determining which legislation is
repealed by the Rates Act.
[112]
Accordingly, both conditions for applying section 88 of the Rates
Act have not been established. This does not, however,
show that the
Municipality was not empowered by section 10G(7) to impose the
impugned rates. Instead, what this finding means
is that section 88
cannot be invoked.
Did section 10G(7) empower the Municipality to impose the
impugned rates?
[113] The
answer to this question depends on the interpretation of section 179
of the Finance Act. It provides in relevant part:
“
(1)
The legislation referred to in the second column of the Schedule is
hereby amended or repealed to the extent indicated in
the third
column of the Schedule.
(2) Despite the repeal of
section 10G
of the
Local Government Transition Act, 1993
. . . by
subsection (1) of this section, the provisions contained in
subsections (6), (6A) and (7) of
section 10G
remain in force until
the legislation envisaged in section 229(2)(b) of the Constitution
is
enacted
.” (Emphasis added.)
[114] As
at the time the Finance Act came into effect in July 2004, only
section 10G of the Transition Act was still in operation.
Therefore,
the proposition that it would be absurd to interpret the Rates Act
as keeping alive the ordinances but not the Transition
Act lacks
merit. When the Rates Act came into operation, no provision of the
Transition Act was still in force. The entire Act
had been repealed.
[115]
Section 179(1) of the Finance Act repeals one full statute, the
Municipal Accountants Act,
67
and two single sections of other statutes. These include
section 10G. However, section 179(3) delays the coming into
operation
of the repeal of the Municipal Accountants Act to a date
to be determined by the Minister of Finance and published in the
Government Gazette
.
[116]
Similarly section 179(2) holds in abeyance the repeal of three
subsections of section 10G. It lists the saved subsections
as
subsections (6), (6A) and (7). Section 179(2) stipulates that
these subsections would remain in force until a specified
event
occurred. This event was the enactment of “legislation
envisaged in section 229(2)(b) of the Constitution”.
[117]
What remains to be determined is the date on which the relevant
legislation was enacted. The word “enacted”
is crucial
to this enquiry. But before interpreting this word in the context in
which it has been used, it is necessary to point
out that it is
common cause that the Rates Act amounts to legislation referred to
in section 179(2) of the Finance Act. Consequently,
it is essential
to determine the exact date on which the Rates Act was enacted.
[118] The
word “enact” is commonly used in our jurisprudence with
reference to the process of passing legislation.
It is employed to
denote the process of transforming a Bill passed by Parliament into
an Act. That transformation occurs when
the President assents to and
signs a Bill into law. When that happens it is usually said that
legislation has been enacted. In
Khosa
,
68
this Court remarked that a Bill that was passed by Parliament and
signed into law by the President constitutes “a duly
enacted
Act of Parliament”.
69
This was stated in circumstances where the Act had not been put into
operation. This Court could not have made this statement
if the date
of enacting was the date on which the Act came into effect.
[119] The
principle that when the President assents to and signs a Bill, it
becomes an enacted Act of Parliament, was later affirmed
by this
Court in
Doctors for Life International v Speaker of the National
Assembly and Others.
70
In that case this Court pointed out that a law is enacted when the
President signs a Bill into law, but before such law comes
into
operation. The Court said:
“
There
are three identifiable stages in the law-making process, and these
are foreshadowed in the questions on which the parties
were called
upon to submit argument: first, the deliberative stage, when
Parliament is deliberating on a Bill before passing
it; second, the
Presidential stage, that is, after the Bill has been passed by
Parliament but while it is under consideration
by the President; and
third, the period after the President has signed the Bill into law
but before the enacted law comes into
force.”
71
[120]
Consistent with the decisions of this Court in
Khosa
and
Doctors for Life
, the Supreme Court of Appeal in
Howick
District Landowners Association
held:
“
In
2004 Parliament enacted the final piece of legislation in the set of
statutes that gave effect to local government reform,
the Local
Government: Municipal Property Rates Act 6 of 2004 (the Rates Act).
The Constitution gave Parliament power to regulate
by statute a
municipality’s constitutional authority to impose property
rates.
It
was common cause that the Rates Act is such legislation. The statute
was assented to on 11 May 2004 and was brought into operation
on 2
July 2005. It makes express provision for a category of ‘newly
rateable properties’, on which rates were not
levied before.
It requires that rates on these properties must be phased in over
three financial years (section 21(1)(a)) and
provides for rebates
for
bona
fide
farmers on agricultural properties (section 15(2)(f)). The statute
also regulates the transition between its commencement (with
repeal
of the relevant provisions of the Ordinance) and the eventual
implementation of the rating system it embodies (section
88
ff
).”
72
(Footnotes omitted.)
[121]
Since the Rates Act was assented to and signed by the President on
11 May 2004, it follows that the Rates Act
was enacted on
that day. This means that section 10G(7) was repealed with effect
from 11 May 2004. This was more than a year
before the Rates Act
came into force. As a result and as mentioned earlier, the Rates Act
cannot be construed as repealing section
10G(7) because the section
was no longer in operation when the Rates Act came into force. This
is the reason why the relevant
part of the Rates Act does not even
mention section 10G when listing legislation repealed by it.
[122]
Accordingly, the repealed section 10G(7) did not empower the
Municipality to charge rates for the financial years commencing
in
July 2004 to June 2009. This covers five financial years. Since the
Municipality relied solely on section 10G(7) in imposing
the
impugned rates, the declarations it sought for those five financial
years must fail.
[123]
During argument, it was submitted that the legality ground did not
cover the 2004/2005 and 2005/2006 financial years, on
the assumption
that the Rates Act was enacted on 2 July 2005, when it came into
effect. The assumption was based on two mistaken
premises. The first
is that the Rates Act was enacted in July 2005. It was in fact
enacted in May 2004. The second is that when
the Municipality took
the resolution to charge the impugned rates, section 10G(7) was
still in force. It was not. But even if
it was in operation when the
notice in respect of the 2004/2005 financial year was issued, its
repeal with effect from 11 May
2004 would have been fatal to the
exercise of the power it conferred, if done after that date or
implementing a decision taken
on its authority after the date in
question. A functionary cannot extend the operation of a statutory
provision by taking the
necessary decision whilst it is in force,
for the decision to take effect after the provision has been
repealed. Once repealed,
a provision cannot be invoked as authority
unless there is a transitional provision preserving its continued
operation.
Validity of rates for 2002/2003
[124] The
resolution in terms of which the rates for the 2002/2003 financial
year were imposed, was challenged on, among others,
the ground that
section 10G(7)(b)(ii) did not authorise the levying of rates. It was
contended that the section dealt with amendment
or withdrawal of
levies and other charges. In essence the challenge was, because the
Municipality had described this impost as
a levy and had originally
attempted to impose it in terms of section 10G(7)(b)(ii), it could
not amend it into a rate, following
objections that it was not a
levy but a rate. The Supreme Court of Appeal rejected the challenge
for the reason that the landowners
could not raise an objection that
it was not a levy but in truth a rate and, when it was replaced with
a rate, they argue that
it should have been amended as a levy.
[125] I
am not persuaded that the challenge was wrongly rejected by the
Supreme Court of Appeal. But that is not the end of the
matter
because the applicants challenged the validity of the rates of the
relevant year on a further ground. They contended that
when imposing
the amended rates, the Municipality failed to comply with statutory
provisions requiring the facilitation of public
participation in
processes such as the imposition of rates. Therefore the Supreme
Court of Appeal was mistaken in holding that
the landowners raised a
single ground in challenging the validity of these rates. In its
judgment the High Court correctly pointed
out that the present
challenge was based on a number of grounds, including the failure to
give proper notice of the amending
resolutions taken by the
Municipal Council on 29 July 2002 and 26 May 2003.
[126] In
upholding the applicants’ contention, the High Court said:
“
The
respondents challenged the legality of the council’s impost in
respect of the 2002/3 budget year on a number of grounds.
In view of
the conclusion that I have reached it is only necessary to treat
with one of them;
viz.
the municipality’s failure to publish a notice of its
determination made on 29 July 2002 in the context of its
reconsideration
of the size related sliding scale impost, as
required in terms of section 10G(7)(d)(ii) of the [Transition
Act].”
73
[127] I
agree with this finding. In passing a resolution that imposes rates,
a municipal council does not perform an administrative
function but
a legislative one.
74
Facilitation of public participation is fundamental to a legislative
process in all spheres of government. In respect of the
national and
provincial legislatures, this requirement is entrenched in the
Constitution.
75
In respect of local government, section 152 of the Constitution
requires municipalities to “encourage the involvement of

communities and community organisations in the matters of local
government.”
76
[128] The
constitutional obligation to facilitate public participation is
given effect to in a number of related statutes. First,
the Local
Government: Municipal Systems Act
77
(Systems Act) prescribes the manner in which a municipality must
communicate with the local community. Whenever a municipality
is
required to notify the local community of something, section 21 of
the Systems Act proclaims that it must be done—
“
(a)
in the local newspaper or newspapers of its area;
(b) in a newspaper or
newspapers circulating in its area and determined by the council as
a newspaper of record; or
(c) by means of radio
broadcasts covering the area of the municipality.”
[129] In
addition, the section requires notification in official languages
determined by the municipality in accordance with language

preferences and usages within the area.
78
More importantly, the invitation for the local community to submit
representations or written comments must state that those
who cannot
write may come to the offices of the Municipality where a staff
member named in the invitation will assist in reducing
their
representations to writing.
79
This makes it clear that a municipality must facilitate
participation of even disadvantaged members of the local community.
[130]
Section 10G(7), in terms of which the Municipality passed the
relevant resolutions, obliged its chief executive officer
to display
the notice at a designated spot in the offices of the Municipality.
The notice was required to state—
“
(i)
the general purport of the resolution;
(ii) the date on which the
determination or amendment shall come into operation;
(iii) the date on which the
notice is first displayed; and
(iv) 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.”
80
[131] The
primary purpose of this notice was to facilitate participation of
the local community in the process of imposing rates.
This was
consistent with the constitutional obligation to involve the local
community in the affairs of the Municipality. Notably,
since the
process of imposing rates constitutes a legislative process, a
failure to comply with the relevant statutory requirements
was fatal
to the validity of the rates imposed because the relevant provisions
were obligatory.
[132]
Moreover, the failure to make the requisite invitation did not only
breach the relevant provisions but it also violated
the
Municipality’s constitutional obligation to facilitate public
participation in this legislative process. The importance
of public
participation in a democratic system such as ours which places a
premium on the principle of participatory democracy
was underscored
by this Court in
Doctors for Life.
There the Court said:
“
Therefore
our democracy includes, as one of its basic and fundamental
principles, the principle of participatory democracy. The
democratic
government that is contemplated is partly representative and partly
participatory, is accountable, responsive and
transparent, and makes
provision for public participation in the law-making processes.
Parliament must therefore function in
accordance with the principles
of our participatory democracy.”
81
[133]
Recently in
South African Property Owners Association v
Johannesburg Metropolitan Municipality and Others
82
the Supreme Court of Appeal held that the imposition of rates in
circumstances similar to the present was invalid for failure
to
comply with the public participation requirement. The Court further
declared that in the future the Johannesburg Metropolitan

Municipality must comply with the relevant provisions when it amends
a proposed budget after it has been advertised for public
comment.
In that case the dispute was about the amendment of the rates
imposed without complying with the provisions requiring
facilitation
of public participation. The original rates imposed and which were
advertised for public comment contained a 10%
increase. But when the
Municipality realised that there was going to be a shortfall in
revenue collection, it amended the rates
and imposed an additional
increase of 18% on the rates charged.
[134] The
judgment of the Supreme Court of Appeal in
SAPOA
is at
variance with its judgment in the present case. Here, although the
Supreme Court of Appeal did not deal with the relevant
attack
because it mistakenly held that only one ground was raised, that
Court nonetheless upheld the substantial compliance principle
in
respect of a similar challenge. But it must be emphasised that the
challenge in question related to the inadequacy of the
notice
issued. Had the Supreme Court of Appeal in the present case
considered the failure to issue notices in respect of the
amending
resolutions of 29 July 2002 and 26 May 2003, it probably
would have declared the 2002/2003 rates invalid.
I say this because
the author of the Supreme Court of Appeal judgment in the present
matter was part of the panel which held
in
SAPOA
that the
failure to give notice, for public comment, of a resolution amending
rates was fatal to the rates imposed.
[135] In
the present case the landowners’ complaint is that the
Municipality failed to give notice of not one but two amendments
of
rates. The first was effected in terms of a resolution of 29 July
2002 and the second was contained in the resolution of 26 May 2003.

In these circumstances I agree with the High Court that the rates
imposed for the 2002/2003 financial year were ineffectual.
It
follows that the declarator sought by the Municipality in this
regard must also fail.
[136] For
these reasons, save for the imposition of rates for 2003/2004 which
was not contested, I would uphold the appeal with
costs.
KHAMPEPE J:
Introduction
[137] I
have had the benefit of reading the judgments prepared by my sister
Mhlantla AJ (main judgment) and my brother Jafta J.
I agree that
both leave to appeal and condonation should be granted. I share my
sister Mhlantla AJ’s view that the challenges
to the imposts
for the years 2004/2005 and 2005/2006 should fail. However, I am
unable to agree with the conclusion reached in
the main judgment
that the appeal should be dismissed in its entirety. For the reasons
he sets out, I agree with my brother Jafta
J that the challenge to
the imposts for 2002/2003 should succeed. Like him I also disagree
with the interpretation of the various
legislative provisions put
forward in the main judgment regarding the date of repeal of section
10G(7) of the Transition Act.
However, I disagree with the main
judgment for somewhat different reasons to those of my brother Jafta
J, hence this judgment.
On the basis of my understanding of the date
and effect of the repeal of section 10G(7), I would uphold the
applicants’
legality challenges in relation to the imposts for
the years 2006/2007 to 2008/2009.
The statutory regime: the repeal of section 10G(7) and the coming
into effect of the Rates Act
[138] For
the reasons put forward by my brother Jafta J,
83
I am of the opinion that section 10G(7) – the provision
that initially authorised the Municipality to impose rates
on the
applicants’ land
84
– did not survive the coming into effect of the Rates Act. To
my mind it is clear, upon consideration of section 179 of
the
Finance Act
85
read with the Schedule to that Act,
86
that the Finance Act repealed section 10G(7). Furthermore, section
10G(7) of the Transition Act was
not
repealed by the Rates
Act – neither section 95 of the latter statute nor the
Schedule thereto (which, read together,
identify the individual
items of legislation to be repealed or amended by the Rates Act)
makes any mention of section 10G(7).
I therefore cannot agree with
the interpretation of sections 88 and 89 of the Rates Act
advanced by the Municipality and
accepted in the main judgment,
87
at least to the extent that the interpretation is used to support
the contention that the Rates Act repealed section 10G(7) of
the
Transition Act.
[139]
This notwithstanding, I disagree with my brother Jafta J that
section 10G(7) of the Transition Act was repealed with effect
from
11 May 2004. He reaches that conclusion because section 179(2) of
the Finance Act states that section 10G(7) would remain
in force
until the enactment of the Rates Act, and the Rates Act was assented
to and signed by the President (and therefore enacted)
on 11 May
2004.
88
While Jafta J’s exposition on the meaning of the word “enact”
is correct, in my view that is not the only relevant
consideration
for present purposes.
[140]
Section 180 of the Finance Act empowers the Minister of Finance to
determine the date on which the provisions of the Finance
Act will
take effect, and allows for the possibility of different provisions
of that Act having different effective dates.
89
Pursuant to a notice published in the
Government Gazette
,
90
the Minister of Finance duly exercised his power under section 180
and determined that section 179 of the Finance Act would take
effect
on 1 July 2005. Because section 179 of the Finance Act only became
effective law on 1 July 2005, and because that
section is the
statutory provision that repealed section 10G(7), I am of the
opinion that the repeal of section 10G(7) only took
effect on 1 July
2005.
Indeed there would have been no reason for
suspending the coming into effect of section 179 of the Finance Act
other than to delay
the repeal of section 10G(7) (and the other
legislation referred to in the Schedule) until an appropriate date
as determined
by the Minister. Thus in
Howick
District Landowners Association v uMngeni Municipality and Others
91
Cameron JA held as follows:
“
The
landowners’ main argument was based on s
179 of the [Finance Act]. This repealed s 10G of the [Transition
Act], but
provided that that section’s principal provisions
would remain in force ‘until the legislation envisaged in s
229(2)(b)
of
the Constitution is enacted’. . . . [T]he landowners contended
that the legislation in question (the Rates Act) was ‘enacted’

in terms of
s
179
as soon as it received assent and was published on 11 May
2004 – and not only on the date it was brought into operation

on 2 July 2005: with the result that when the council met in
December 2004, s 10G had already been repealed. . . .
[T]he
argument proceeded from the mistaken premise that s
179 was in operation when the council met in December 2004. This
was
not so.  Most of the provisions of the [Finance Act] were
brought into operation on 1 July 2004, but the repealing

provision took effect only on 1 July 2005.  So, when the
council passed the resolutions now contested, s 10G was still in

force
.”
92
(Emphasis
added; footnotes omitted.)
[141] I
do not think that the purpose of the Finance Act was to impose the
repeal envisaged in section 179 with retroactive
effect. No
rational or legitimate purpose would be served by – and only
undesirable consequences would flow from –
retroactively
invalidating municipalities’ conduct
in
imposing rates and levies over the 13-month period between the date
of enactment of the Rates Act and the date on which section
179 came
into force. This conclusion regarding the date of repeal accords
with the “strong presumption” in our law
that new
legislation is not meant to “[invalidate] what was previously
valid”.
93
[142] Accordingly, in my view, the Municipality was authorised by
the Transition Act to impose rates and levies until 30 June
2005.
94
This authorisation was, of course, supplementary to the
Municipality’s original power, granted by the Constitution, to

levy rates on land within its area of jurisdiction.
95
[143] The President assented to the Rates Act on 11 May 2004.
Following a notice published in the
Government Gazette
,
96
the whole of the Act took effect on 2 July 2005. From that date
onwards the exercise by any municipality of its rate-levying
powers
under section 229 of the Constitution had to be discharged pursuant
to the requirements of the Rates Act, including those
set out in
section 14:
“
Promulgation
of resolutions levying rates
(1) A rate is levied by a
municipality by resolution passed by the municipal council with a
supporting vote of a majority of its
members.
(2) A resolution levying rates
in a municipality must be promulgated by publishing the resolution
in the
Provincial
Gazette
.
(3) Whenever a municipality
passes a resolution in terms of subsection (1), the municipal
manager must, without delay
¾
(a) conspicuously display the
resolution for a period of at least 30 days
¾
(i) at the municipality’s
head and satellite offices and libraries; and
(ii) if the municipality has an
official website or a website available to it as envisaged in
section 21B of the Municipal Systems
Act, on that website; and
(b) advertise in the media a
notice stating that
¾
(i) a resolution levying a rate
on property has been passed by the council; and
(ii) the resolution is
available at the municipality’s head and satellite offices and
libraries for public inspection during
office hours and, if the
municipality has an official website or a website available to it,
that the resolution is also available
on that website.”
[145]
Thus, from 2 July 2005 onwards, in order for the Municipality to
impose rates validly, it had to (a) do so pursuant to a
resolution
passed by a majority of the members of the Municipal Council; (b)
promulgate the resolution by publication in the
Provincial
Gazette
; and (c) undertake the public information and
advertising process stipulated in section 14(3).
97
Did the Municipality comply with its obligations in terms of
section 14(2) of the Rates Act for the years 2006/2007 to 2008/2009?
[145] It
was not contended that the Municipality promulgated rates
resolutions for the years 2006/2007, 2007/2008 and 2008/2009
in the
Provincial Gazette
. Put differently, it was not argued that
the Municipality complied with the letter of section 14(2) of the
Rates Act.
[146]
Nevertheless, with regard to the 2006/2007 year, the Municipality
contended that it substantially complied with section
14(2) because:
(a) it published a notice in a local newspaper regarding its draft
budget in April 2006, which budget presumably
included some
information regarding the proposed rates for the forthcoming year;
(b) it undertook a public participation process
regarding the draft
budget, including inviting comments from the public and holding
public meetings; and (c) in June 2006 it
published a second notice
in the same local newspaper regarding the rates for the forthcoming
year. The Municipality contended
that because it had complied
substantially with the prescripts of section 14(2) of the Rates Act,
the relevant statutory objects
had been achieved and therefore the
impugned imposts were validly imposed. The Municipality reiterated
this argument in relation
to the years 2007/2008 and 2008/2009, as
in those years it also undertook an advertising and participation
campaign similar to
the one just described. For the reasons set out
below I am of the opinion that the substantial compliance argument
proffered
by the Municipality must fail.
The promulgation of laws
[147] The Constitution empowers municipalities to exercise original
legislative powers, including the power of taxation. As explained
in
Fedsure Life Assurance Ltd and Others v Greater Johannesburg
Transitional Metropolitan Council and Others
:
98
“
Under
the interim Constitution (and the 1996 Constitution) a local
government is no longer a public body exercising delegated
powers.
Its council is a deliberative legislative assembly with legislative
and executive powers recognised in the Constitution
itself
.
. . .
The
constitutional status of a local government is thus materially
different to what it was when Parliament was supreme, when
not only
the powers but the very existence of local government depended
entirely on superior legislatures. The institution of
elected local
government could then have been terminated at any time and its
functions entrusted to administrators appointed
by the central or
provincial governments. That is no longer the position. Local
governments have a place in the constitutional
order, have to be
established by the competent authority, and are entitled to certain
powers, including the power to make by-laws
and impose rates. . . .
It seems plain that when a legislature, whether national, provincial
or local, exercises the power to
raise taxes or rates . . . it is
exercising a power that under our Constitution is a power peculiar
to elected legislative bodies.
It is a power that is exercised by
democratically elected representatives after due deliberation.
”
99
[148] The
power of a municipality to impose rates is an exercise of an
original legislative power. Legislative acts depend for
their legal
efficacy on due promulgation. This is an incident of the rule of law
that has long been part of South African jurisprudence,
as
illustrated by the review of a few relevant cases in which I shall
now engage.
[149] In
Ismail Amod v Pietersburg Municipality
100
the Transvaal Supreme Court was faced with an appellant who had been
found guilty of contravening certain provisions of a municipal

by-law. The appellant challenged his conviction on the basis that
the relevant by-law, although it had gone through a
public-notification
process and had been assented to by the
Lieutenant-Governor, was not effective law as it had not been duly
promulgated by publication
in the
Gazette
. Innes CJ noted
that the by-laws under consideration were intended to regulate an
important aspect of public life, but was constrained
to uphold the
appeal. He thus held that, after there had been a proper
public-notification process and the Lieutenant-Governor
had approved
the relevant by-laws
¾
“
[the]
due
publication or promulgation [of the by-laws] is necessary before
they can have the force of law. Even if the statute had contained
no
such provision, the common law would have required some publication
of such bye-laws. By the Roman-Dutch law, as indeed by
any civilised
system of jurisprudence, a law before it can take effect requires to
be promulgated. The expression of the will
of the legislative
authority does not acquire the force of law unless and until it has
been promulgated in due form for the information
of those whom it is
to affect. . . . In my opinion there has been no due promulgation of
these bye-laws, and on that ground the
appeal must be allowed. I
regret to have to come to this conclusion, because the appellant has
contravened a very useful provision
for the protection of the public
health. But proper steps were not taken to legalise that provision,
and the Court has therefore
no option in the matter. This decision
may have wide results, for apparently the same procedure has been
followed in a great
many other cases. But that is a thing which the
Court cannot remedy.
”
101
[150]
Some years later the position in
Amod
was restated by Innes
CJ – by then Chief Justice of a territorially unified South
Africa – in
R v Gluck
,
102
namely that “[a]
law
must be promulgated before it can come into operation. That is a
principle well established in our practice and no authority
is
needed to support it. But it is the enacting instrument, the decree
of the law-giver which needs to be promulgated.
”
103
[151] In
Byers v Chinn and Another
104
the Appellate Division had to determine whether certain resolutions
and regulations adopted by a Village Management Board under
a
particular statute needed to be promulgated in order to be
effective. The following principles were enunciated by the Court.

First, any law, regulation or by-law intended to have the force of
law must generally be promulgated, and this promulgation should

occur by way of publication in the
Government Gazette
.
105
Second, it is usually “not enough that an individual may have
knowledge in some other way of the alleged law, regulations
or order
. . . there must be promulgation”.
106
Third, there are two exceptions to the promulgation requirement: (i)
where the statute provides for an alternative to publication
in the
Government Gazette
and (ii) where the instrument concerned is
“not a ‘law’ within the meaning of the rule
requiring promulgation
of a law.”
107
The Court held that promulgation via publication in the
Gazette
was not required in the circumstances of that case because the
relevant statute contemplated no publication process of the Village

Management Board’s decisions, because the decisions would only
affect a very small number of people and because the decisions
would
be taken “upon the spot” in the presence of those
affected.
108
In other words, the decisions could be seen as instruments falling
outside the category of laws requiring promulgation.
109
[152] In
R v Busa en Andere
110
the Appellate Division considered the distinction between formal
promulgation requirements and procedural notice-and-comment
or
public-participation obligations. The Court found that while
requirements regarding formal promulgation (such as publication
in
the
Gazette
) are peremptory such that non-compliance will
lead to the law in question never acquiring legal force, a
requirement to ensure
that the public is informed about its legal
obligations may be directory and non-compliance therewith may not
affect the legal
efficacy of the statute under consideration.
111
[153]
From the above, the position at common law is clear: statutory laws
– whether they be Acts of Parliament or municipal
by-laws –
must be duly promulgated in order to have legal force, and this
promulgation occurs by way of publication in
the relevant
Gazette
.
Of course, Parliament may allow for alternative forms of
promulgation, and may impose additional publicity requirements.
Courts
and organs of state should, however, be wary of any approach
to enacting legislation that detracts from the general principle of

gazetting statutes as a prerequisite for the legal force thereof.
[154] The Interpretation Act preserves the common-law position and
gives it statutory force.
112
Section 13(1) thus provides that a law has legal effect on “the
day when the law was first published in the
Gazette
as a
law.”
113
Ordinarily, therefore, all that is required for a law to come into
operation is
publication in the appropriate
Gazette
.
114
[155] The
position has not changed since the advent of the Constitution.
Section 162(1) of the Constitution, for example, provides
that a
“municipal by-law may be enforced only after it has been
published in the official gazette of the relevant province.”
115
This promulgation requirement is in addition to and separate from
the obligations regarding a public-comment procedure set out
in
section 160(4) of the Constitution.
116
The Constitution thus enshrines both the promulgation requirement
and the importance of due publication with regard to the legal

efficacy of legislative acts. The common-law and statutory position
set out above is, in my view, wholly consistent with section
162(1)
of the Constitution.
117
[156] In
National Police Service Union and Others v Minister of
Safety and Security and Others
118
the Supreme Court of Appeal had to determine whether a certain
scheme for the rationalisation of various police forces (in terms
of
the interim Constitution) had to be promulgated by publication in
the
Government Gazette
in order to have legal force.
Smalberger JA confirmed the continued applicability under our
constitutional dispensation of the
common-law and statutory position
set out above:
“
It
is a requirement of both the common law and statute that subordinate
legislation, even if it has been validly enacted, is not
of binding
force and effect in law until it has been promulgated. The
requirement is subject to qualification
”
.
119
[157] The
qualifications referred to are those expressed in
Byers
.
120
In
NPSU
the Supreme Court of Appeal ultimately determined
that promulgation was not required in the circumstances of the case
because
the determination of the scheme was administrative rather
than legislative in nature.
121
[158] What the above discussion establishes is that in South Africa,
as a matter of common law and statutory law, and further
in terms of
the Constitution, legislative enactments must be duly promulgated by
publication in the relevant
Gazette
in order to have the
force of law. Parliament may impose additional requirements for
promulgation, and, in exceptional circumstances,
an alternative form
of promulgation may be used. Accordingly, close attention must be
paid to the applicable statutory regime
in order to determine the
effects of non-compliance with obligations regarding the publication
of a law. While there may be less
stringent requirements for the
effectiveness of administrative acts, the prescribed validity
requirements for legislative enactments
must be strictly observed.
Did
the Municipality lawfully impose the rates during the years
2006/2007 to 2008/2009?
[159] The
Municipality claims that it imposed the rates lawfully for the years
2006/2007 to 2008/2009 because it published notices
of the relevant
rates in local newspapers and therefore substantially complied with
the requirements of section 14(2) of the
Rates Act. Put differently,
the Municipality contends that an organ of state need only
substantially comply with its statutory
obligations regarding the
promulgation of taxes in order for the imposition of those taxes to
be lawful. While I accept that
the doctrine of substantial
compliance as described by my sister Mhlantla AJ
122
has its place in determining the general effects of non-compliance
with statutory obligations, in the circumstances of this case
I
cannot agree with the Municipality’s defence, in the light of
both the applicable statutory scheme and the relevant general

principles. I shall deal with the statutory scheme first, and
thereafter consider the general principles.
[160]
Section 14 of the Rates Act clearly imposes, in peremptory terms,
three distinct requirements for the proper promulgation
of rates.
Subsection (1) functions to ensure that rating decisions are
democratically made by elected representatives. This gives
effect to
section 160(2)(c) of the Constitution.
123
Subsection (2) is aimed at ensuring that the constitutive act of
legality – promulgation by means of publication in the
Provincial Gazette
– is undertaken, in order to give
effect to the rates resolution as a source of law for the relevant
period. This reflects
the general principle of our law that
legislative enactments must be duly promulgated by publication in
the
Gazette
in order to have the force of law. Finally,
subsection (3) sets out a municipality’s obligations with
regard to informing
the public of its rates obligations for the
forthcoming year. This, of course, ensures that members of the
public are not expected
to comply with laws of which they might not
ordinarily have knowledge.
[161] In
accordance with the jurisprudence set out above, strict compliance
with formal promulgation prescripts is required and
“substantial
compliance” can offer the Municipality no defence. There is,
furthermore, no indication in the Rates
Act that section 14(2)
is merely directory in nature – the requirement it contains is
stated in unambiguous and mandatory
terms. Publication in a local
newspaper was therefore insufficient to discharge the Municipality’s
obligation to promulgate
the rates resolutions by publication in the
Provincial Gazette
.
[162]
Moreover, section 14 clearly imposes discrete and peremptory
obligations. Discharge of one such obligation cannot, on its
own,
constitute discharge of another. Whilst publication in a local
newspaper may suffice to satisfy the requirements of
section 14(3)(b),
124
it certainly cannot discharge the obligation set out in section
14(2). Similarly, just as notifying the public of rates for the

forthcoming year could not satisfy the obligation set out in section
14(1) of the Rates Act,
125
neither could it satisfy the obligation set out in section 14(2).
Holding otherwise would contravene the very clear prescripts
of the
Rates Act.
[163] In
addition, even if one were to adopt a “substantial compliance”
approach in relation to the section 14(2)
obligation, the
Municipality’s conduct would still be found wanting. The
object of that provision is not to inform the
public for
participation purposes, but to ensure that the rates for a
particular year are formally constituted as legislative
enactments.
Accordingly, publication in a local newspaper would not achieve the
purpose of section 14(2) because such a
newspaper is not the
official and authoritative record of the conduct of the State.
[164] I
now turn to consider the general principles that inform my rejection
of the Municipality’s defence.
Where the
State purports to extract taxes from its citizens – conduct
which goes to the very heart of the social contract
between a
government and its people – that extraction must be done in a
lawful manner. Where a local authority purports
to impose rates,
that imposition must be done in accordance with the constraints that
Parliament has imposed. If we are to give
cognisance to the fact
that the Constitution now empowers municipalities to exercise
original legislative powers, we must also
accept that municipal
authorities may no longer adopt an informal approach to the exercise
of their powers. Similarly, it cannot
be the case that
municipalities are empowered to extract taxes pursuant to “laws”
that they devise, when citizens
are unable to find those laws
anywhere in the statute books. That is wholly inconsistent with a
State founded on the principle
of legality. The High Court captured
the point well:
“
It
seems to me that the provisions of s 14(2) of the [Rates Act]
were enacted acknowledging the enhanced executive and legislative

status of municipal councils under the new constitutional order.
Whereas a less formal approach might have historically characterised

the approach to publication of municipal bylaws under the old order,
its continuation finds no justification under the current

constitutional framework.
”
126
(Footnotes
omitted.)
[165]
Indeed, with the principle of legality lying at the heart of our
modern constitutional dispensation,
127
I fail to see how we could or should adopt a less exacting standard
for the legality of legislative acts than the standard observed
in
the Transvaal in 1904 and in the Union in 1922.
[166]
In the light of the above it is my view that, because the
resolutions in terms of which the Municipality purported to levy

rates for the years 2006/2007, 2007/2008 and 2008/2009 were not duly
promulgated by publication in the
Provincial
Gazette
as required by section 14(2)
of the Rates Act, those rates were unlawfully imposed and the
Municipality has no entitlement thereto.
I would accordingly uphold
the legality challenges against the imposts for those years.
For
the Applicants: Advocate A Breitenbach SC and Advocate M Schreuder
instructed by Malan Lourens Lemmer Viljoen Inc.
For
the Respondent: Advocate J Heunis SC and Advocate E Van
Huyssteen instructed by De Klerk & Van Gend Inc.
For
the Intervening Party: Advocate G Budlender SC and Advocate M Bishop
instructed by the State Attorney.
1
Liebenberg
NO and Others v Bergrivier Municipality
[2012] ZASCA 153
;
[2012]
4 All SA 626
(SCA) (Supreme Court of Appeal judgment).
2
This
was because rural properties were not part of the rateable areas
within the area of jurisdiction of municipalities.
3
Section
151 of the Constitution introduced the notion of “wall-to-wall”
local government. See
Johannesburg Metropolitan Municipality v
Gauteng Development Tribunal and Others
[2010] ZACC 11
;
2010 (6)
SA 182
(CC);
2010 (9) BCLR 859
(CC) at para 79;
City of Cape Town
and Another v Robertson and Another
[2004] ZACC 21
;
2005 (2) SA
323
(CC) (
Robertson
) at para 39; and
African National
Congress and Another v Minister of Local Government and Housing,
KwaZulu-Natal, and Others
[1998] ZACC 2
;
1998 (3) SA 1
(CC);
1998 (4) BCLR 399
(CC) at para 9.
4
209
of 1993.
5
56
of 2003. Most of the provisions of the Finance Act, excluding
section 179, commenced on 1 July 2004. Section 179 came into

operation on 1 July 2005.
6
This
agreement was reached between the Municipality and the BBV.
7
The
Municipality’s financial year runs from 1 July to 30 June.
8
The
Municipality had, by this time, conceded that the levies it had
sought to impose in the 2001/2002 financial year were not
lawfully
imposed and the applicants conceded that the rates imposed in the
2003/2004 financial year were good in law.
9
Acted
beyond the powers in the governing legislation.
10
The
Municipality has a constitutional right and duty to raise revenue,
inter alia
, by imposing levies and rates on property within
its area of jurisdiction, in order to enable it to provide services
to the local
community. In turn, the members of the community have
the right, amongst others, to access municipal services and the duty
to
pay promptly service fees, rates on property and other taxes,
levies and duties imposed by the Municipality.
11
[1998]
ZACC 1
;
1998 (2) SA 363
(CC);
1998 (3) BCLR 257
(CC) (
Walker
).
12
2005
(4) SA 199
(SCA).
13
Id
at para 22. See also further case law as referred to by this Court:
Weenen Transitional
Local Council v Van Dyk
2002 (4)
SA 653
(SCA) (
Weenen
) at para 13 and
Nkisimane and Others
v Santam Insurance Co Ltd
1978 (2) SA 430
(A) at 433H –
434B.
14
[2010]
ZASCA 128
;
[2011] 2 All SA 46
(SCA) (
Nokeng
).
15
Id
at para 14.
16
[2006]
ZACC 1
;
2006 (3) SA 305
(CC);
2006 (5) BCLR 579
(CC).
17
Id
at para 25.
18
Id
citing
Weenen
above n 13 with approval.
19
Section
10G(7) provides in relevant part as follows:
“
(a) (i) A local council,
metropolitan local council and rural council may by resolution,
levy and recover property rates in respect of immovable
property in the area of jurisdiction of the council concerned:
Provided
that a common rating system as determined by the
metropolitan council shall be applicable within the area of
jurisdiction of
that metropolitan council: Provided further that the
council concerned shall in levying rates take into account the levy
referred
to in item 1(c) of Schedule 2: Provided further that this
subparagraph shall apply to a district council in so far as such
council
is responsible for the levying and recovery of property
rates in respect of immovable property within a remaining area or in

the area of jurisdiction of a representative council.
(ii) A municipality may by resolution supported by a
majority of the members of the council levy and recover levies,
fees, taxes
and tariffs in respect of any function or service of the
municipality.
(b) In determining property rates, levies, fees, taxes
and tariffs (hereinafter referred to as charges) under paragraph
(a), a
municipality may—
(i) differentiate between different categories of users
or property on such grounds as it may deem reasonable;
(ii) in respect of charges referred to in paragraph
(a)(ii), from time to time by resolution amend or withdraw such
determination
and determine a date, not earlier than 30 days from
the date of the resolution, on which such determination, amendment
or withdrawal
shall come into operation; and
(iii) recover any charges so determined or amended,
including interest on any outstanding amount.
(c) After a resolution as contemplated in paragraph (a)
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;
(iii) the date on which the notice is first displayed;
and
(iv) 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.
(d) Where—
(i) no objection is lodged within
the period referred to in paragraph (c)(iv), the determination or
amendment shall come into
operation as contemplated in paragraph
(b)(ii);
(ii) an objection is lodged within
the period referred to in paragraph (c)(iv), the municipality shall
consider every objection
and may amend or withdraw the determination
or amendment and may determine a date other than the date
contemplated in paragraph
(b)(ii) on which the determination or
amendment shall come into operation, whereupon paragraph (c)(i)
shall with the necessary
changes apply.”
20
6
of 2004.
21
Section
229(2) of the Constitution provides as follows:
“
The power of a municipality
to impose rates on property, surcharges on fees for services
provided by or on behalf of the municipality,
or other taxes, levies
or duties—
(a) may not be exercised in a way that materially and
unreasonably prejudices national economic policies, economic
activities
across municipal boundaries, or the national mobility of
goods, services, capital or labour; and
(b) may be regulated by national legislation.”
22
The
combined effect of these provisions was that a municipality could,
in terms of legislation repealed by the Rates Act, continue
to
conduct property rating based on a valuation roll in force before 2
July 2005 until it had prepared a valuation roll in terms
of the
Rates Act (which had to be prepared by 30 June 2011).
23
The
four relevant statutes referred to by the Supreme Court of Appeal
are the: Local Government: Municipal Structures Act 117
of 1998
(Structures Act); Local Government: Municipal Systems Act 32 of
2000; Finance Act; and Rates Act.
24
In
this case, section 95 of the Rates Act read with the Schedule to
that Act.
25
See
Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd and
Another
[2008] ZACC 12
;
2009 (1) SA
337
(CC);
2008 (11) BCLR 1123
(CC) at para 61 and
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
[2004] ZACC 15
; ;
2004 (4)
SA 490
(CC);
2004 (7) BCLR 687
(CC) at para 90.
26
Section
229(1) of the Constitution, under the heading “[m]unicipal
fiscal powers and functions”, provides:
“
Subject to subsections (2),
(3) and (4), a municipality may impose—
(a) rates on property and surcharges on fees for
services provided by or on behalf of the municipality; and
(b) if authorised by national legislation, other taxes,
levies and duties appropriate to local government or to the category
of
local government into which that municipality falls, but no
municipality may impose income tax, value-added tax, general sales

tax or customs duty.”
27
Democratic
Alliance and Another v Masondo NO and Another
[2002] ZACC 28
;
2003 (2) SA 413
(CC);
2003 (2) BCLR 128
(CC) at para 17.
28
[1995]
ZACC 8
;
1995 (4) SA 877
(CC);
1995 (10) BCLR 1289
(CC).
29
Id
at para 162.
30
97
of 1996.
31
Robertson
above n 3 at para 41.
32
Constitution
of the Republic of South Africa Amendment Act 65 of 1998.
33
Local
Government: Municipal Structures Amendment Act 33 of 2000
.
Section
93(4)
was inserted into the Structures Act and provides:
“
Despite anything to the
contrary in any other law and as from the date on which a municipal
council has been declared elected
as contemplated in item 26(1)(a)
of Schedule 6 to the Constitution—
(a) section 10G of the Local Government Transition Act,
1993 (Act No. 209 of 1993), read with the necessary changes, apply
to
such a municipality; and
(b) any regulation made under section 12 of the Local
Government Transition Act, 1993 (Act No. 209 of 1993), and which
relates
to section 10G of that Act, read with the necessary changes,
apply to such a municipality.”
At
the same time as this step was taken, further provisions were
inserted in the Transition Act relating to property valuations
for
the purpose of the imposition of rates.
34
In
this case, the relevant legislation is the Municipal Ordinance
(Cape) 20 of 1974.
35
Section
88 of the Rates Act.
36
Id
section 89.
37
2004
(5) SA 545
(CPD) (
Rates Action Group
). This decision was
confirmed on appeal in
Rates Action Group v City of Cape Town
2006 (1) SA 496
(SCA).
38
Rates
Action Group
above n 37 at para 41; see also paras 39-45 more
generally.
39
Id.
40
Id
at para 46.
41
This
was based on the size of the affected land unit subject to a maximum
imposition of R4500, regardless of the number of land
units of which
the farm might be comprised.
42
Property
Valuation Ordinance, 1993 (Cape).
43
See
Gerber and Others v Member of the Executive Council for
Development Planning and Local Government, Gauteng, and Another
2003 (2) SA 344
(SCA).
44
This
point was not taken in the farm owners’ answering affidavit,
but was raised in argument before the Supreme Court of
Appeal and in
their papers in this Court. The Municipality did not object to the
point being raised.
45
Supreme
Court of Appeal judgment at para 34.
46
See
above.
47
[2008] ZASCA 83
;
2008
(6) SA 187
(SCA) (
Kungwini
).
48
Id
at para 31.
49
Id
at paras 53 and 55.
50
Id
at paras 38 and 55.
51
See
also
Nokeng
above n 14 at para 24.
52
Walker
above n 11 at para 93.
53
Id
at para 92. See also
Chief Lesapo v North West Agricultural Bank
and Another
[1999] ZACC 16
;
2000 (1) SA 409
(CC);
1999 (12) BCLR
1420
(CC) at para 11, where this Court stated that “[n]o one
is entitled to take the law into her or his own hands. Self help,
in
this sense, is inimical to a society in which the rule of law
prevails”.
54
Main
judgment at [38] above.
55
Berg
River Municipality v Liebenberg NO and Others
[2011] ZAWCHC 371
(High Court Judgment).
56
Administrateur,
Transvaal v Quid Pro Quo Eiendomsmaatskappy (Edms.) Bpk.
1977
(4) SA 829
(A) at 841.
57
Howick
District Landowners Association v uMngeni Municipality
2007 (1)
SA 206
(SCA) and
Latib v Administrator, Transvaal
1969 (3) SA
186
(T).
58
[2001]
ZACC 25
;
2001 (4) SA 1297
(CC);
2001 (11) BCLR 1157
(CC).
59
Supreme
Court of Appeal judgment above n 1 at para 18.
60
Section
89 of the Rates Act provides:
“
(1) Until it prepares a
valuation roll in terms of this Act, a municipality may—
(a) continue to use a valuation roll and supplementary
valuation roll that was in force in its area before the commencement
of
this Act; and
(b) levy rates against property values as shown on that
roll or supplementary roll.
(2) If a municipality uses valuation rolls and
supplementary valuation rolls in terms of subsection (1) that were
prepared by
different predecessor municipalities, the municipality
may impose different rates based on the different rolls, so that the
amount
payable on similarly situated properties is more or less
similar.
(3) The operation of this section lapses six years from
the date of commencement of this Act, and from that date any
valuation
roll or supplementary valuation roll that was in force
before the commencement of this Act may not be used.”
61
Section
88(1) is quoted in [106] below.
62
Supreme
Court of Appeal judgment above n 1 at para 18.
63
Id
at para 19.
64
Section
95 provides:
“
The legislation specified in
the Schedule is—
(a) amended to the extent indicated in the third column
of the Schedule; and
(b) repealed to the extent indicated in the third
column of the Schedule.”
65
Section
229 of the Constitution reads:
“
(1) Subject to subsections
(2), (3) and (4), a municipality may impose—
(a) rates on property and surcharges on fees for
services provided by or on behalf of the municipality; and
(b) if authorised by national legislation, other taxes,
levies and duties appropriate to local government or to the category
of
local government into which that municipality falls, but no
municipality may impose income tax, value-added tax, general sales

tax or customs duty.
(2) The power of a municipality to impose rates on
property, surcharges on fees for services provided by or on behalf
of the municipality,
or other taxes, levies or duties—
(a) may not be exercised in a way that materially and
unreasonably prejudices national economic policies, economic
activities
across municipal boundaries, or the national mobility of
goods, services, capital or labour; and
(b) may be regulated by national legislation.
(3) When two municipalities have the same fiscal powers
and functions with regard to the same area, an appropriate division
of
those powers and functions must be made in terms of national
legislation. The division may be made only after taking into account

at least the following criteria:
(a) The need to comply with sound principles of
taxation.
(b) The powers and functions performed by each
municipality.
(c) The fiscal capacity of each municipality.
(d) The effectiveness and efficiency of raising taxes,
levies and duties.
(e) Equity.
(4) Nothing in this section precludes the sharing of
revenue raised in terms of this section between municipalities that
have
fiscal power and functions in the same area.
(5) National legislation envisaged in this section may
be enacted only after organised local government and the Financial
and
Fiscal Commission have been consulted, and any recommendations
of the Commission have been considered.”
66
Gerber
and Others v Member of the Executive Council for Development
Planning and Local Government, Gauteng, and Another
2003 (2) SA
344
(SCA).
67
21
of 1988.
68
Khosa
and Others v Minister of Social Development and Others
,
Mahlahule and Others v Minister of Social Development and Others
[2004] ZACC 11
;
2004 (6) SA 505
(CC);
2004 (6) BCLR 569
(CC)
(
Khosa
).
69
Id
at paras 90-2.
70
[2006]
ZACC 11
;
2006 (6) SA 416
(CC);
2006 (12) BCLR 1399
(CC) (
Doctors
for Life
).
71
Id
at para 40.
72
Howick
District Landowners Association
above n 57 at para 5.
73
High
Court judgment above n 55 at para 26.
74
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
(CC).
75
See
sections 59 and 118 of the Constitution.
76
Section
152 of the Constitution provides:
“
(1) The objects of local
government are—
(a) to provide democratic and accountable government
for local communities;
(b) to ensure the provision of services to communities
in a sustainable manner;
(c) to promote social and economic development;
(d) to promote a safe and healthy environment; and
(e) to encourage the involvement of communities and
community organisations in the matters of local government.
(2) A municipality must strive, within its financial
and administrative capacity, to achieve the objects set out in
subsection
(1).”
77
32
of 2000.
78
Id
section 21(2).
79
Id
section 21(4).
80
Section
10G(7)(a) of the Transition Act.
81
Above
n 70 at para 116.
82
2013
(1) SA 420
(SCA) (
SAPOA
).
83
At
[98] – [107] and [110] – [111] above. For the reasons
set out below, however, we disagree on the effective date
of the
repeal of section 10G(7).
84
The
relevant parts of the provision have been set out in n 19 above.
85
Section
179 reads as follows:
“
Repeal and amendment of
legislation
(1) The legislation referred to in the second column of
the Schedule is hereby amended or repealed to the extent indicated
in
the third column of the Schedule.
(2) Despite the repeal of section 10G of the Local
Government Transition Act, 1993 (Act No. 209 of 1993), by subsection
(1) of
this section, the provisions contained in subsections (6),
(6A) and (7) of section 10G remain in force until the legislation

envisaged in section 229(2)(b) of the Constitution is enacted.
(3) The repeal of the Municipal Accountants Act, 1988
(Act No. 21 of 1988), takes effect on a date determined by the
Minister
by notice in the
Gazette
.”
86
The
Schedule appears as follows:
REPEAL AND AMENDMENT OF LEGISLATION
(Section 179)
No. and year of Act
Short title of Act
Extent of repeal or amendment
Act No. 91 of 1983
Promotion of Local Government Affairs Act, 1983
The repeal of section 17(D).
Act No. 21 of 1988
Municipal Accountants Act, 1988
The repeal of the whole.
Act No. 209 of 1993
Local Government Transition Act, 1993
The repeal of
section 10G.
87
">
87
At
[43] – [51] above.
88
At
[113] – [121] above.
89
Section
180 of the Finance Act reads as follows:
“
Short title and
commencement
(1) This Act is called the
Local Government: Municipal
Finance Management Act, 2003
, and takes effect on a date determined
by the Minister by notice in the
Gazette
.
(2) Different dates may in terms of subsection (1) be
determined for different provisions of the Act.”
90
GN
772 published in
Government Gazette
26510 of 25 June 2004.
91
2007
(1) SA 206
(SCA).
92
Id
at paras 9-10.
93
S
v Mhlungu and Others
[1995] ZACC 4
;
1995 (3) SA 867
(CC);
1995
(7) BCLR 793
(CC) at para 65.
94
As
set out in [140] above, section 179 of the Finance Act came into
force on 1 July 2005. In terms of section 13(2) of the

Interpretation Act 33 of 1957, this means that the repeal of section
10G(7), as contained in section 179, occurred “immediately
on
the expiration of” 30 June 2005.
95
Section
229(1)(a) of the Constitution provides that “a municipality
may impose rates on property”. As is evident from
a reading of
the remaining provisions of section 229, the exercise of this rating
power is not dependent on the enactment of
further legislation by
Parliament – it is an original power vested in municipalities
by the Constitution. However, in terms
of section 229(2)(b), should
Parliament elect to regulate the exercise of that power (as it
subsequently did in the form of the
Rates Act), municipalities would
be obliged to comply with the resultant legislation when levying
rates (as they subsequently
were).
96
Proclamation
R. 28 published in
Government
Gazette
27720 of 29 June 2005.
97
It
should be noted that between the repeal of section 10G(7) and the
coming into effect of the Rates Act (that is to say, on 1 July

2005) the Municipality retained its constitutional power to levy
rates from residents in its area of jurisdiction, pursuant to

section 229(1)(a) of the Constitution. See n
95
above.
98
[1998]
ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
(CC) (
Fedsure
),
per Chaskalson P, Goldstone J and O’Regan J.
99
Id
at paras 26, 38 and 45.
100
1904
TS 321
(
Amod
).
101
Id
at 323-6.
102
1923
AD 149.
103
Id
at 151.
104
1928
AD 322.
105
Id
at 327-9.
106
Id
at
328, quoting Kotze J in
R
v Koenig
1917 CPD 235.
107
Id
at 328 and 330.
108
Id
at 328.
109
Id
at 330.
110
1959
(3) SA 385
(A) (
Busa
).
111
Id
at 389-92.
See also the discussion of
Busa
in the High Court judgment at n 48.
112
See
S v Manelis
1965 (1) SA 748
(AD) at
752G.
113
Section
2 of the Interpretation Act defines a “law” as “
any
law, proclamation, ordinance, Act of Parliament or other enactment
having the force of law”
. It
should
be noted that the Interpretation Act contains an exception to the
general rule set out in section 13(1): section 16A(1)
provides that,
in exceptional circumstances, the President may make rules for the
promulgation of laws other than by way of publication
in the
Gazette
. See Du Plessis
Re-Interpretation of Statutes
(Butterworths, Durban 2002) at 67.
114
Manelis
above n 112 at 753G-H.
As the Court noted: “The mere act of promulgation would
determine the date of commencement. The common
law, and sec.
13(1), by necessary implication, would take care of that.”
115
Section
162, entitled “Publication of municipal by-laws”, reads
as follows:
“
(1) A municipal by-law may be
enforced only after it has been published in the official gazette of
the relevant province.
(2) A provincial official gazette must publish a
municipal by-law upon request by the municipality.
(3) Municipal by-laws must be accessible to the
public.”
116
Section
160(4), contained in the provision entitled “Internal
procedures”, states that “[n]o by-law may be passed
by a
Municipal Council unless all the members of the Council have been
given reasonable notice; and the proposed by-law has been
published
for public comment.”
117
The
applicants put forward no challenge regarding the Municipality’s
failure to promulgate the rates imposed prior to 2 July
2005.
Furthermore, no challenge was raised against section
10G(7)
of the Transition Act on the basis of its inconsistency with section
162(1) of the Constitution or pursuant to a more general
legality
attack. This judgment therefore does not deal with the
Municipality’s failure to promulgate rates resolutions
for the
years 2001/2002 to 2005/2006 (the years during which the imposition
of rates by municipalities was governed by section 10G(7)).
118
[2000] ZASCA 106
;
2000
(3) SA 371
(SCA) (
NPSU
).
119
Id
at para 17. See also
Supreme Gaming CC v Minister of Safety and
Security and Others
2000 (3) SA 608
(SCA).
120
See
[151] above.
121
NPSU
above n 118 at para 20. In the
alternative the Court concluded (at para 22) that promulgation was
not required because the scheme
conferred a benefit rather than
imposed an obligation and because it affected a limited class of
persons who could easily be
made aware of the content of the scheme
by means of a notification procedure other than publication in the
Gazette
.
Thus, as was the case in
Byers
,
the scheme could be seen as an instrument
falling outside the
category of laws requiring promulgation.
122
At
[22] – [26] above.
123
Section
160(2) reads as follows:
“
The following functions may
not be delegated by a Municipal Council:
(a) The passing of by-laws;
(b) the approval of budgets;
(c) the imposition of rates and other taxes, levies and
duties; and
(d) the raising of loans.”
124
As
set out in [143] above, section 14(3)(b) stipulates that a duly
passed rates resolution must be advertised in the media and
the
Municipal Manager must, in the advertisement, inform the public that
a rates resolution has been passed and that it is available
for
inspection at specified locations.
125
As
set out in [143] above, subsection (1) prescribes that a
rate-levying resolution must be “passed by the municipal
council
with a supporting vote of a majority of its members.”
126
High
Court judgment at para 59.
127
See
AAA Investments (Pty) Ltd v Micro Finance Regulatory Council
and Another
[2006] ZACC 9
;
2007 (1) SA 343
(CC);
2006 (11)
BCLR 1255
(CC) at para 68;
President of the Republic of South
Africa and Others v South African Rugby Football Union and Others
[1999] ZACC 11
;
2000 (1) SA 1
(CC);
1999 (10) BCLR 1059
(CC) at para
148; and
Fedsure
above n 98 at paras 56-8.