City of Cape Town v Claremont Union College

• Jurisdiction: South Africa
• Judge: Wessels CJ, Curlewis JA, Stratford JA, Beyers JA and De Villiers JA
• Judgment Date: 04 May 1934
• Citation: 1934 AD 414
• Court: Appellate Division

Wessels, C.J.:

The appellant, as plaintiff in the court below., claimed from the defendant the sum of £780 4s. 10d. with interest at 7 per cent., being arrear rates on certain property belonging to defendant for the years 1924 to 1932 inclusive. This amount plaintiff alleges defendant ought to have paid but has failed to pay. Plaintiff also claimed 978 9s. 7d. in respect of Divisional Council rates for that period. The defendant pleaded that the plaintiff and the Divisional Council exempted the properties from assessment and levy of rates and notified defendants in writing of such exemption, and this exemption and notification debar the plaintiff from making the claim set out above. On this the plaintiff joined issue. The only issue, therefore, before the court below was whether the yearly exemption of the properties by the Council and the notification to the defendant of such exemption constitute a good defence. There is no allegation of error or that the notification was not that of the Council but of an unauthorised person. The case made by the appellant is that the Council has no power to exempt rateable property from paying rates. If property is rateable and is placed on the valuation roll then the owner is obliged to

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pay the rate fixed by the Council. As the owner is in law held to know the valuation of his property and the published rate, the amount due by him is automatically determined and this amount he must pay. The contention for the appellant is that it was ultra vires of the Council to exempt the properties during the years 1924 to 1932, that the exemption was a nullity in law and that therefore the Council can recover the arrear rates due and unpaid, notwithstanding the actual exemption and the notice of exemption.

The respondent contends that the exemption for each year is intra vires of the Council inasmuch as there is a necessary implication that the Legislature intended that the Council should direct its mind each year to the question what property should not be rated for that year notwithstanding the fact that the Ordinances in general terms provide that a rate shall be imposed on all rateable property. The respondents argue that as the act of separating rateable property from non-rateable property in order to fix and levy the rate is intra vires of the Council, therefore it is bound by its determination at any rate when it has notified an owner that for the ensuing year his property is regarded by the Council as being exempt, and he acquiesces in the position. The appellant collects not only its own rates but also the rates for the Divisional Council of the Cape Province, and it is common cause that for the purposes of the present case the two sets of rates are on the same footing. The court below gave absolution from the instance on the ground that no rate had been levied on the defendant. It did not decide whether the exemption or the exemption and notification can be pleaded as a bar to the claim.

The material facts are not in dispute. In 1924 the Council passed a resolution that "the following rates be levied for the year 1924." We are only concerned in this case with the uniform rate applicable to all rateable property. A similar resolution was passed in 1925. During the years 1926 to 1932 inclusive the resolutions were worded thus: "That the following rates be levied on all rateable immovable property situate within the area of the municipality." These resolutions were duly published in terms of Ordinance 10 of 1912. The Claremont Union College owned two properties at Claremont, but the dispute in this case affects only one, which was valued at 94,000 during the years 19241929 and from 1930 onwards at 21,890. The property was used as a college

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in 1915, and on application by the college the Council exempted it from paying rates and notified the college to that effect. During and after 1924 it was no longer used as a college but as a printingworks, where apparently mostly religious books were printed, though some secular books and other matter were also printed there. During the years 1924 to 1931 inclusive the college was notified year by year by the City Treasurer that the properties had been exempted from paying rates. In 1915 the matter of exemption or non-exemption was decided by the Council on the recommendation of the Finance Committee. This continued until 1926. In that year a standing order was adopted and duly published that all claims for exemptions from rates were to be dealt with by the chairman of the General Purposes Committee. After that ail applications for exemption were decided by the chairman in consultation with the City Treasurer. As a matter of practice the Treasurer conducts an investigation and presents a report, and under the rules the chairman of the General Purposes Committee has the power to authorise exemption. The alteration in the practice was adopted because there were so many applications for exemption that it was thought better to vest the power in a single individual.

It is therefore necessary for us to determine what the legal effect is of the final decision of the Council to exempt a particular property from paying rates for a particular year. Is it of no legal effect whatever if in fact it is afterwards shown that the property ought not to have been exempted or is the Council bound by its decision not to rate a particular property during the financial year, and is the effect of that decision to take away from the Council the right, at a later date when it discovers its error, to claim arrear rates?

It is quite clear that there is no provision either in the Cape Ordinance relating to municipalities (No. 10 of 1912) or in the Ordinance for the valuation of land (No. 7 of 1914) which expressly gives to a municipality the right to exempt a rateable property from paying rates during the financial year. Nor is there any provision in the Ordinances that a person whose property is rateable, but exempted from paying rates by the Council, cannot be sued in a subsequent year for the rates which he should have paid. There being no such express provisions, ought the Court to

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imply that the Legislature must necessarily have intended that the Council should have the power to determine every year what properties are rateable and what properties are not rateable for that year, and that when the Council exempts a property it is precluded from suing the owner thereof in a later year for the rates which should have been imposed and paid because as a fact the property was rateable and did not fall under secs. 136 or 137 of Ordinance 10 of 1912?

Now I take it as settled law, as stated by my brother STRATFORD in Johannesburg Municipality v Davies (1925, A.D at p. 402), that what is reasonably incidental to the proper carrying out of an authorised act must be considered as impliedly authorised quando lex aliquid alicui concedit, conceditur et icl sine quo res ipsa esse non potest. Courts of law must consider the matter from the point of view of reasonableness; they must not hold that an act of a Corporation is ultra vires upon a narrow interpretation of the powers conferred on the Corporation by the statute. They must look to all the circumstances, and especially to the consequences of holding the Act to be ultra vires. I fully agree with what was said by LUXMORE, J., in Attorney-General v Leeds Corporation (1929, Ch. D at p. 306) : "In considering the question whether a particular matter is ultra vires you must approach it from a reasonable point of view, and in this connection I would refer to a passage which occurs in the speech of Lord SELBORNE, L.C in the case of Attorney-General v Great Eastern Railway Co. 'I assume that your Lordships will not now recede from anything that was determined in the Ashbury Railway Carriage and Iron Co. v Riche. It appears to me to be important that the doctrine of ultra vires, as it was explained in that case, should be maintained. But I agree with Lord Justice JAMES that this doctrine ought to be reasonably, and not unreasonably, understood and applied, and that whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.'" This rule is especially applicable in the case of municipalities which are necessarily endowed with extensive powers and which are called upon every day to decide details which cannot be specially provided for in the Ordinance which constitutes them. If it is found that in

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practice a municipality cannot carry out its functions in a reasonable manner unless it has a power to decide effectively a certain matter, then the Court must hold that the Legislature intended it to have that power of decision, and the consequence will be that what it decides will be intra vires and will bind the Council or the Municipality. In Abbott on Municipalities, vol. I, sec. 114, p. 201, the rule adopted by courts of law in construing the implied powers of municipalities is thus stated: "The rule of strict construction as given in the preceding section is occasionally modified. The Courts hold that the rule should not be carried to such an extent as to defeat the very purpose for which the power was granted, if proper to be exercised, and that where it is necessary to adopt a more liberal rule of construction of a corporate power to accomplish the result sought by the Legislature, it should be done." He refers to a decision of an American court which laid the rule down in the following, terms: "The strictness then to be observed in giving construction to municipal charters should be such as to carry into effect every power clearly intended to be conferred on the municipality, and every power necessarily implied, in order to the complete exercise of the powers...