Locom Investments (Pty) Ltd and others v Msunduzi Municipality and another

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Mngadi J
• Judgment Date: 15 March 2023
• Docket Number: 5959/21P
• Hearing Date: 10 March 2023
• Court: KwaZulu-Natal Division, Pietermaritzburg

Mngadi J:

[1]

The applicants seek an order reviewing and setting aside the respondents' decisions evaluating their properties for purposes of the levying of municipal rates. The respondents oppose the application.

[2]

The first applicant is Locom Investments (Pty) Ltd a private company incorporated and registered in terms of the company laws of South Africa, conducting trade as a property holding company. The second applicant is Catwalk Investments 295 (Pty) Ltd, a private company incorporated and registered in terms of the company laws of South Africa conducting business as a property holding company under the name and style of Catwalk Investments. The third applicant is S A Mather Ladysmith (Pty) Ltd a private company incorporated and registered in terms of the company laws of South Africa, conducting trade as a property holding company. The fourth applicant is Defacto Investments 95 (Pty) Ltd a private company incorporated and registered in terms of the company laws of South Africa conducting trade as a property holding company under the name and style of Defacto Investments. The fifth applicant is Dwellior Investments (Pty) Ltd a private company incorporated and registered in terms of the company laws of South Africa conducting trade as a property holding company under the name and style of Dwellior Investments. The sixth applicant is 532 Pietermaritz Street (Pty) Ltd a private company incorporated and registered in terms of the company laws of South Africa, conducting trade as a property holding company under the name and style of 532 Pietermaritz Street. The seventh applicant is Ocean Sunset Trading CC a lawfully incorporated and registered close corporation conducting trade as a property holding company under the name and style of Ocean Sunset Trading. The eight applicant is Vintage Express Investments CC a lawfully incorporated and registered close corporation. The ninth applicant is Mahomed Raffi Cassim an adult businessperson. The tenth applicant is Yunus Goga an adult businessperson. The eleventh

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applicant is Corpclo 34 CC a lawfully incorporated and registered close corporation. The twelfth applicant is the trustees for the time being of The Ahmed Goga Family Trust a lawfully constituted and registered trust. The thirteenth applicant is The trustees for the time being of The M R C Amod Family Trust a lawfully constituted and registered trust.

[3]

The first respondent is The Msunduzi Municipality a municipality duly established in terms of the Local Government Municipal Structures Act 117 of 1998 read with Section 2 of the Local Government Municipal Systems Act 32 of 2000. The second respondent is the Msunduzi Municipality Valuation Appeals Board (appeals board) an appeals board established in terms of the law for the Msunduzi Municipality.

[4]

The applicants are owners of properties within the municipal area of the first respondent. The impugned decisions were taken pursuant to the second respondent's powers under s229 of the Constitution of the Republic of South Africa, 1996, read with the Local Government: Municipal Rates Act 6 of 2004('the Rates Act'). It is common cause that the decisions constitute administrative action as contemplated in s1 of the Promotion of Administrative Justice Act 3 of 2000('PAJA').

[5]

Municipalities' are vested with original institutional powers to levy rates on property, which power is regulated by the Local Government Municipal Property Rates Act 6 of 2004 (the Act). Various sections of the Act are referred to herein. Section 11(1) provides that a rate levied by a municipality on property must be an amount in the Rand on the market value of the property. It defines market value as the value of the property determined in accordance with s 46. Section 46 provides: '46 (1) subject to any other applicable provisions of this Act, the market value of the property is the amount the property would have realised if sold on the date of valuation in the open market by a willing seller to a willing buyer.'

[6]

Section 30 provides that a municipality intending to levy a rate in a property must cause a general valuation to be made of all properties and all properties valuated be included in the valuations roll. The general valuation must reflect the market value of properties determined in accordance with market conditions, which applied as at the date of valuation. Section 45 provides that the property must be valued in accordance with generally recognised valuations practices, methods,

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and standards, physical inspections of property to be valued is optional and comparative, analytical and other systems as techniques may be used, including aerial photography and computer – assisted mass appraisal systems or techniques, (taking into account changes in technology and valuations systems and techniques). In s 45(3) it is provided that if the available market–related data of any category of rateable property is not sufficient, such property may be valued in accordance with any mass valuation system or techniques approved by the municipality concerned. The valuation roll remains valid for not more than four financial years in respect of a metropolitan municipality or not more than five financial years in respect of a local municipality which periods may be increased to six and seven years respectively by the MEC for local government in the province. The municipality levies rates annually subject to annual increases subject to limits set by the national Minister responsible for local government.

[7]

The Act provides that after the valuations roll has been prepared, it is published. It provides that persons having interest therein may inspect the valuations roll and lodge objections. The municipal valuer considers and decides on objections. He may adjust or add to the valuation roll. A decision resulting in changing the valuations of the property by more than ten (10) percent must be referred for review by the valuations appeal board, which can either confirm, amend or revoke the decision of the municipal valuer. The objector on request may be furnished with reasons for the decision. The municipal valuer in the case of the applicants requested in order to consider the objections to be furnished with the following; namely; Annexure A –Tenant and Rent Information; Annexure B-Schedule of Expenses, Annexure C –Statement of Income and Expenditure for the previous financial year and Annexure D- Building Sizes. The municipal valuer in the case of the applicants generally stated that the market value was adjusted but information insufficient to adjust the value to the market value claimed. Section 54 of the Act provides that a person effected by the decision taken on objection by the municipal valuer has a right to appeal the decision to the appeal board. The appeal board as its function is to hear and decide appeals against the decision of the municipal valuer concerning objections. In the case of the applicants, the second respondent stated in most cases that it found insufficient information to deviate from the municipal valuations or deviate more that it deviated in the cases wherein it deviated. The applicants with their appeals they supplied detailed information of the local conditions and condition of the property as factors affecting rental income and market value of the property, and a schedule of income and expenses for the previous financial year and financial statements.

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[8]

Section 34 of the Act grants to the municipal valuer the primary function to value properties in the municipality for purposes of preparation of the valuation roll, and to consider and decide on objections to the valuation roll and to attend the meetings of the valuation appeal board when it hears appeals or reviews of the decisions of the municipal valuer. The municipal valuer to enable it to carry out its duties is granted by the Act (ss41 & 42) a right to enter and inspect any property in the municipality and to require to be furnished with information relevant for purposes of valuation of the property. Section 56 of the Act regulates the establishment of the valuation appeal board. The MEC for the local government must by notice in the Provincial Gazette establish as many valuation appeal boards in the province as may be necessary but not fewer than one in each metropolitan municipality. The MEC for local government appoints members of the valuation appeal board. The valuation appeal board consists of a chairperson and no fewer than two members. The chairperson must be a person with legal qualifications and sufficient experience in the administration of justice. The other members are to be persons with sufficient knowledge of or experience in the valuations of property of which at least one must be a professional registered valuer or a professional associated valuer. Section 67 provides that an appeal board may determine its internal procedures to dispose of appeals and reviews subject to any procedures that may be prescribed. Section 75 set out the powers of the valuation appeal board as follows:

'75 (1)

An appeal board may-

(a)

by notice, summon a person to appear before it-

(i)

to give evidence; or

(ii)

to produce a document available to that person and specified in the summons;

(b)

call a person present at a meeting of an appeal board, whether summoned or not-

(i)

to give evidence; or

(ii)

to produce a document in that person's custody;

(c)

administer an oath or solemn affirmation to that person;

(d)

question that person, or have that person questioned; or retain a document produced in terms of paragraph (a) (ii) or (b) (ii) for a reasonable period.

(2)

A person appearing before an appeal board, whether summoned or not, may at his or her own expense be assisted by a legal representative.

(3)...