City of Johannesburg v Renzon and Sons (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2010 (1) SA 206 (W)

City of Johannesburg v Renzon and Sons (Pty) Ltd
2010 (1) SA 206 (W)

2010 (1) SA p206

Citation	2010 (1) SA 206 (W)
Case No	2003/13591
Court	Witwatersrand Local Division
Judge	Jajbhay J
Heard	May 20, 2005; May 23, 2005
Judgment	June 7, 2005
Counsel	AG Amiradakis for the plaintiff.; N Segal for the defendant.

Flynote : Sleutelwoorde

B Local authority — Municipal service charges — Prescription — Sanitary charges to be regarded as compulsory tax — Accordingly, period of prescription being 30 years — Prescription Act 68 of 1969, s 11(a)(iii).

Headnote : Kopnota

C The plaintiff local authority sued the defendant property owner out of the High Court for, inter alia, its arrear charges for sewerage services (sanitary services), levied in terms of the Local Government Ordinance 17 of 1939 (the Ordinance) and the local authority's Sanitation By-Laws, Drainage By-Laws and Water-Pollution Control By-Laws (the Sewerage D By-Laws) promulgated under the Ordinance. In addition to pleading to the merits of the local authority's claims, the property owner raised the special plea of prescription, contending that the debt had prescribed after three years, in terms of s 11(d) of the Prescription Act 68 of 1969. The local authority replicated that the sanitary charges constituted taxes as contemplated in s 11(a)(iii) of the Prescription Act, and, consequently, in terms of E s 11(a) of the Act, the period of prescription was 30 years. [*]

Held, that, according to the evidence, the sanitary charges were compulsory. An owner of a property did not have a discretion to be linked onto the sewer network. In the event of an owner of a property not utilising the sewer network, he had to pay the availability charges. That made the amounts payable compulsory, which formed the core of the description of a tax. F (At 211H - J.)

Held, further, that the sanitary charges in the present matter constituted neither remuneration nor price. They therefore constituted a compulsory tax levied upon an owner or occupier because the local authority, in the exercise of its discretion and powers as a local government, was authorised to provide the sewer network. (At 215B - D.)

G Held, further, that, consequently, the property owner's special plea of prescription had to be dismissed. (At 215H.)

Held, accordingly, that judgment was given for the local authority and the property was declared to be executable. (At 217A.)

Cases Considered

Annotations:

Reported cases H

Southern Africa

Alberts v Roodepoort-Maraisburg Municipality 1921 TPD 133: dictum at 136 applied

City of Cape Town and Another v Robertson and Another 2005 (2) SA 323 (CC) (2005 (3) BCLR 199): referred to

City Treasurer and Rates Collector, Newcastle Town Council v Shaikjee and Others 1983 (1) SA 506 (N): dictum at 507F - H applied I

Commissioner of Customs and Excise v Tayob and Others 2002 (6) SA 86 (T): referred to

2010 (1) SA p207

Democratic Alliance and Another v Masondo NO and Another 2003 (2) SA 413 (CC) (2003 (2) BCLR 128): A referred to

Fouche v Randfontein Stadsraad en Andere 1964 (2) SA 318 (T): referred to

Gerber and Others v Member of the Executive Council for Development Planning and Local Government, Gauteng, and Another 2003 (2) SA 344 (SCA) ([2002] 4 All SA 518): referred to

Gericke v Sack 1978 (1) SA 821 (A): referred to B

Mkontwana v Nelson Mandela Metropolitan Municipality and Another; Bissett and Others v Buffalo City Municipality and Others; Transfer Rights Action Campaign and Others v MEC, Local Government and Housing, Gauteng, and Others (KwaZulu-Natal Law Society and Msunduzi Municipality as Amici Curiae) 2005 (1) SA 530 (CC) (2005 (2) BCLR 150): referred to

Port Edward Health Committee v SA Polisie Rusoord 1975 (2) SA 720 (D): not followed C

Rates Action Group v City of Cape Town 2004 (5) SA 545 (C) (2004 (12) BCLR 1328; [2004] 3 All SA 368): referred to

The Master v IL Back & Co Ltd and Others 1983 (1) SA 986 (A): referred to

Trust Bank of Africa Ltd v Senekal 1977 (2) SA 587 (W): dictum at 593 applied. D

Foreign

Australia

Leake v Commissioner of Taxes (State) (1934) 36 WALR 66: dictum at 67 applied.

Statutes Considered

Statutes E

The Prescription Act 68 of 1969, ss 11(a), 11(a)(iii) and 11(d): see Juta's Statutes of South Africa 2008/9 vol 1 at 2-873.

Ordinances

Local Government Ordinance 17 of 1939. F

Case Information

Adjudication upon a special plea of prescription. The facts appear from the judgment of Jajbhay J.

AG Amiradakis for the plaintiff.

N Segal for the defendant.

Cur adv vult. G

Postea (June 7).

Judgment

Jajbhay J:

Introduction H

The plaintiff is a metropolitan municipality, established in terms of Provincial Notice 6766 of 1 October 2000, in terms of s 12(1) of the Local Government: Municipal Structures Act 117 of 1998. The defendant is the registered owner of certain immovable property situated within the municipal area under the control and management of the plaintiff, I being 382 Judith's Paarl (the property).

The plaintiff's Sanitation By-Laws, Drainage By-Laws and Water Pollution Control By-Laws (the Sewerage By-Laws) were duly made and promulgated pursuant to and in accordance with the provisions of the Local Government Ordinance 17 of 1939 (the Ordinance). J

2010 (1) SA p208

Jajbhay J

A It was common cause that the property was rateable as referred to in the Local Authorities Rating Ordinance 11 of 1977 (Transvaal) (the Rating Ordinance). According to the plaintiff, assessment rates, duly levied by it, on the property pursuant to and in accordance with the provisions of the Rating Ordinance, were due and payable by the defendant to the B plaintiff on the dates stipulated by the plaintiff. Furthermore, pursuant to and in accordance with the provisions of the Ordinance and Sewerage By-Laws, the plaintiff claimed that it carried out sewerage services (sanitary charges) in respect of the property. The assessment rates and sanitary charges at the property for the period up to and including C 21 May 2003 amounted to R126 347,54.

The plaintiff further contended that, by virtue of the provisions of s 50A of the Ordinance, and by virtue of a resolution of the plaintiff in accordance with s 10G(7)(b)(iii) of the Local Government Transition Act 209 of 1993, and s 229(1) of the Constitution of the Republic of D South Africa, 1996 (the Constitution), the defendant was liable to pay the plaintiff interest on any arrear amounts at the rate of 17% per annum.

The defendant pleaded that prior to February 1999 the defendant made payments of all amounts for which it was liable, to the plaintiff or its E predecessor. Subsequent to this date the defendant furnished payments to the plaintiff towards the assessment rates charged by the plaintiff. According to its plea, the defendant has not made any subsequent payment in respect of sewer charges, VAT or interest, but made payments in respect of assessment rates. It further contended that the plaintiff was F not entitled to levy the charges claimed during or about February 1999.

The summons in the present matter was served on 29 July 2003. The defendant argued that any debt held to be due by the defendant to the plaintiff other than for assessment rates, prescribed within three years, in terms of s 11(d) of the Prescription Act 68 of 1969 (the Prescription G Act).

The plaintiff replicated that the assessment rates and sanitary charges constituted taxes contemplated in s 11(a)(iii) of the Prescription Act. Consequently, by virtue of the provisions of s 11(a) of the Prescription Act, the period of prescription in respect of the assessment rates and H sanitary charges is 30 years.

In terms of s 11(a)(iii) of the Prescription Act -

'(t)he periods of prescription of debts shall be the following:

(a)

thirty years in respect of -

I . . .

(iii)

any debt in respect of any taxation imposed or levied by or under any law. . . .'

And s 11(d) of the Prescription Act provides:

'(S)ave where an Act of Parliament provides otherwise, three years in J respect of any other debt.'

2010 (1) SA p209

Jajbhay J

Plaintiff's case A

The plaintiff relied on a certificate drawn by the municipal manager in terms of s 31 of the Rating Ordinance and s 51 of the Ordinance. The municipal manager certified that the documents relied upon by the plaintiff are contained in the books and records of the City of Johannesburg in accordance with the provisions of the sections referred to. In B terms of s 31 of the Rating Ordinance:

'In any proceedings for the recovery of any amount due for rates as well as in all other proceedings in terms of the provisions of this Ordinance, the provisional valuation roll, valuation roll, provisional supplementary valuation roll, supplementary valuation roll and records of the local C authority and any matter recorded therein and extracts therefrom or a certified copy thereof signed by the town clerk or town treasurer, and also any copy of a newspaper containing any notice necessary to be proved shall, upon production thereof, be prima facie evidence of the levying of such rate and of the contents thereof without producing any evidence that any notice required by or other requirements of this D Ordinance have been complied with.'

In terms of s 51 of the Ordinance:

'The books and records of the council and any extracts therefrom certified by the town clerk or other officer authorised thereto by the council shall in any proceedings for the recovery of sanitary fees or E charges for the supply of gas, water or electricity, or for any other municipal service, be prima facie...