Leopard Creek Share Block Ltd v Valuation Appeal Board for the District of Ehlanzeni and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Mashile J
• Judgment Date: 14 April 2023
• Citation: 2023 JDR 1502 (MN)
• Hearing Date: 14 April 2023
• Docket Number: 3258/2020
• Court: Mpumalanga Division, Mbombela

Mashile J:

INTRODUCTION:

[1]

On an immovable property known as Portion 20 of the Farm Riverside 173, JU, in extent 335.724 hectares, registered in the name of the Applicant as an undivided piece of land ("the subject property"), is situated Leopard Creek residential Golf Resort ("Leopard Creek"). Leopard Creek and the subject property may in some instances in this judgment be used interchangeably. On 15 July 2020, the First Respondent determined the value of the subject property, as on 1 July 2017, at R1 564 500 000.00. The Applicant now seeks, in terms of the provisions of the Promotion of Administrative Justice Act, 3 of 2000 ("PAJA"), to review and set aside the decision of the First Respondent. Of the three Respondents, only the third opposes the application.

[2]

The review of the decision of the First Respondent is premised on sections 6(2)(a)(iii), 6(2)(b), 6(2)(d), 6(2)(e) and 6(2)(f) of PAJA. These provisions of PAJA are the vehicle through which the expressions of Section 33 of the Constitution are manifested. Section 33 of the Constitution lays down in Subsection 3 that National legislation must be enacted to give effect to these rights and must firstly, provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal. Secondly, impose a duty on the State to give effect to the rights in so (1) and (2. Lastly, promote an efficient administration.

[3]

The Applicant is a Share Block Company established in terms of the provisions of the Share Blocks Control Act, 59 of 1980 authorised to issue 112,505 shares apportioned

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between 262 residential Share Blocks and a Country Club Share Block. It is a single farm portion with 111 houses. As a farm, the subject property has not been subdivided and does not comprise distinct stands that can be independently valued and sold. The parties are ad idem that the subject property has inimitable features making it difficult to meaningfully compare it to any other similar property in South Africa. Each of the 262 residential share blocks mentioned under Paragraph 2 supra consists of a varying number of shares. The Country Club Share Block comprises 20 100 shares.

[4]

The subject property comprises:

4.1

335,745 hectares of undivided land;

4.2

251 residential sites divided between 80 residential riverfront sites bordering the Crocodile River overlooking the Kruger National Park and 171 bush or golf course sites;

4.3

Of the 251 residential sites, 113 have been fully developed with 112 houses;

4.4

Approximately 97 of the 251 residential sites, almost 38.8% remain in the form of unsold share blocks being retained by the Developer;

4.5

A Hotel site that formerly housed the Malelane Hotel, which was destroyed by fire;

4.6

An 18-hole Gary Player design golf course;

4.7

A clubhouse complex, measuring approximately 3 600m;

4.8

A recreational centre, measuring approximately 785m developed on the Crocodile River Bank overlooking the Kruger National Park and similarly of high standard, complementing the quality of the development. The facilities include tennis and squash courts, a swimming pool and a gym;

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4.9

2 maintenance workshops, in excess of 2 000m for support services;

4.10

An internal tarred road system with good stormwater management design forming part thereof;

4.11

A bulk Eskom electricity supply facility to which an internal electricity network is connected;

4.12

Water services, including a water extraction plant, purification works, internal water distribution networks and a sewer treatment plant;

4.13

Waste disposal facilities;

4.14

2 houses for management accommodation;

4.15

27 units for staff accommodation; and

4.16

Six 4-bedroom units providing casual overnight accommodation to guests.

TERSE BACKGROUND:

[5]

The Third Respondent ("the Municipality"), acting in terms of Section 2 of the Local Government Municipal Property Rates Act, 6 of 2004 ("MPRA"), intended to levy a rate on the subject property, which is located within its area of jurisdiction. To do so, however, meant that it had to comply with the provisions of Section 30(1) of the MPRA that requires it to carry out a general valuation of the subject property. In an endeavour to do this, the Municipality engaged the services of the First Respondent, which valued the subject property as on 1 July 2017 at R1 300 000 000.00.

[6]

Alleging that the market value of the property as on 1 July 2017 was R450 000 000.00, the Applicant demurred against the valuation and on 26 March 2018

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followed up by lodging a formal objection. On 13 July 2018, the First Respondent, appointed in terms of Section 33 of the MPRA, dismissed the objection raised on behalf of the Applicant. The First Respondent persisted that the value of the property as on 1 July 2017, was R1 300 000 000.00. Disillusioned with the decision upholding the previous valuation amount, the Applicant appealed to the First Respondent contending that the valuation be set aside and substituted for R330 000 000.00. On 15 July 2020, the First Respondent dismissed the appeal and set the value at R1 564 000 000.00.

[7]

The Applicant now wants the decision of the First Respondent, which it is common cause is administrative as contemplated in Section 1 of PAJA, of determining the market value for rates purposes of the subject property on which it is situated Leopard Creek, a Golf Course Resort, reviewed and set aside. The decision of the First Respondent includes:

7.1

Dismissing the appeal of the Applicant against the decision of the Second Respondent, dated 29 June 2018 by which the Second Respondent refused to entertain the objection of the Applicant to the market value of the subject property being set at R1 300 000 000.00 as published in the general valuation roll of the Municipality for the period 1 July 2018 to 30 June 2022;

7.2

Accepting that the valuation method applied by the valuer of the Municipality, Mr Derrick Griffiths, is realistic and suitable;

7.3

Determining the market value of the property to be R1 564 500 000.00 as at 1 July 2017.

[8]

In justification of the review, the Applicant alleges that the First Respondent is said to have gone off course, acted irrationally, failed to comply with a mandatory condition, made errors of law, refused or failed to consider relevant considerations, had regard to irrelevant considerations, acted arbitrarily and/or capriciously, acted unreasonably. All these, asserts the Applicant, could reasonably give rise to a suspicion

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of bias. The situation is exacerbated by the explanatory affidavit delivered during December 2021 by the First Respondent in an attempt to give details of its decision.

[9]

This, says the Applicant, happened in circumstances where no reasons justifying the decision were given in the judgment or when the First Respondent was obliged to do so in the notice of motion. The First Respondent selectively addressed the allegations made by the Applicant. When the Applicant detected that certain answers were not furnished, its Attorneys wrote to the First Respondent remarking that the following documents formed part of the record of decision:

9.1

All correspondence between members of the appeal board with the dates on which they met to deliberate and any emails wherein they expressed their views on the merits of the matter for purposes of coming to the decision;

9.2

All drafts of the decision and the correspondence under cover of which such drafts were circulated as well as all correspondence wherein members of the First Respondent commented thereon;

9.3

All correspondence between members of the First Respondent when the final draft decision was circulated for approval;

9.4

The documents or correspondence wherein each of the members of the First Respondent approved the decision and / or the reasons therefor.

[10]

On 18 May 2021, the chairperson of the First Respondent alerted the Applicant's Attorneys that the record of decision had been delivered. The chairperson proceeded to state that the Board Members did not have any further documents, like personal notes, other than the judgment delivered on 15 July 2022. Hereafter subsequently and in its supplementary founding affidavit, the Applicant slated Mr Singwane for contriving the impugned decision in bad faith to the exclusion of the other members of the First Respondent without conducting a vote and with a clandestine motive.

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[11]

The Applicant then called upon the First Respondent to explain the absence of any record of deliberation and to dispel the inferred allegation with credible evidence. In response, Messrs Singwane and Nkosi, without presentation of evidence by the other board members, stated that Ms Serfontein and Mr Jacobs submitted a memorandum to Mr Singwane on 10 December 2019, wherein comments were made on the valuations undertaken by Messers Norman Griffiths and Derrick Griffiths. The memorandum does not address the evidence by Messrs Hackner, Piek and Nagle. This suggests that their evidence was not considered when the decision was made notwithstanding that the First Respondent had met on 22 June 2020 albeit that there exists no record of any form of the meeting.

[12]

The Applicant states that Mr Singwane prepared a draft judgment which he circulated to the members of the First Respondent on 14 July 2020. The judgment was approved unanimously and published on 15 July 2022. The following evidence in support of these submissions was not produced:

12.1

Any email in which the views of the "legal personnel of the Board" were espoused;

12.2

Any email wherein the draft judgment was circulated; and

12.3

Any email wherein...