Margate Hotel (Pty), Ltd v Town Council of the Borough of Margate and Another

• Jurisdiction: South Africa
• Judge: Caney J and Bizzell AJ
• Judgment Date: 30 November 1960
• Citation: 1961 (1) SA 384 (N)
• Hearing Date: 08 November 1960
• Court: Natal Provincial Division

Caney, J.:

This is an application to review the decision of the first

Caney J

respondent sitting as the body to hear valuation appeals for the Borough of Margate. The application relates to values placed on land, being sub-divisions 3 to 8, inclusive, of remainder of lot 400, Margate Township. These sub-divisions were laid off with the approval of the Private Townships Board on the application of the present applicant for A permission to lay out a private township. The applicant was at that time the owner of the undivided property, remainder of lot 400, Margate Township, about five acres in extent, but since the sub-divisions were laid off the applicant has transferred sub-division 3 to South Coast Entertainments (Pty.), Ltd. In the course of laying out the private township, the applicant laid off a road which occupies about half an B acre and which the applicant transferred as a gift to the first respondent for public use.

It appears that the land comprising Margate Township (now within the Borough of Margate) formerly belonged to one Erasmus and that he sold most of it to Margate Estates Limited. He retained, however, remainder C of lot 400. It seems also that Margate Estates Limited, when selling sites in Margate Township, did not as a matter of course transfer to the buyers all those rights incident in ownership which normally would pass on the transfer of land; unless a buyer wished to conduct business on his site, his title restricted him from doing so: if he wished this right, he paid an extra sum of money to Margate Estates Ltd. The amount D he paid depended upon the nature of the business he intended to conduct, being a greater sum if the business was one involving the sale of liquor than if it were an ordinary trading business. If these rights did not pass at the time of transfer of the site, they might nevertheless subsequently be acquired from Margate Estates Ltd. by the buyer or his successor in title.

E Remainder of lot 400, which Erasmus did not transfer to Margate Estates Ltd., was in no way restricted in relation to the uses to which its owner could put it; Erasmus retained full enjoyment of all the rights of an owner, and, when the applicant became the owner, this was the situation also in relation to it. At no time was any sum payable to F Margate Estates Ltd. for the right to enjoy to the full the benefits of ownership. Indeed, for some time the applicant has been conducting the business of a licensed hotel on the property; as a result of the sub-division of the property, this business is now situate on sub-division 8.

The approval of the Private Townships Board to the sub-division of the property was granted on conditions which have placed G limitations on the uses to which the owner may put the respective sub-divisions, other than sub-division 8. Sub-division 3 may not be used

'for any purposes other than that of business or trading; provided however that it shall not be used for the purpose of an hotel, a boarding house, or a block of residential flats or any industry . . .'.

Sub-divisions 4 and 5 may not be used

'for any purpose other than that of business or trading and/or a block H of residential flats',

with a proviso that they are not to be used for any industry without the approval of the Administrator, and with certain further provisos. Trading rights, it seems, include the right to conduct a bottle store business. Sub-divisions 6 and 7 may not be used

'for any purpose other than that of a dwelling house, or a boarding house, or an hotel, or a block of residential flats,'

Caney J

subject to certain provisos. No limitation has been placed on sub-division 8.

Upon the property being laid off in the six sub-divisions to which I have referred, the Borough valuator, who is the second respondent, revalued it by arriving at a valuation for each of the six A sub-divisions, under the provisions of sec. 113 (1) (d) of the Local Government Ordinance, 21 of 1942. Formerly remainder of lot 400 was valued at £60,000 and the annual rates thereon amounted to £1,375. By reason of the re-valuation of each sub-division separately, the total of the valuations by the second respondent amounted to £75,810 and upon B this sum the annual rates would amount to £1,725 6s. 3d. The Town Clerk informed the applicant and South Coast Entertainments (Pty.), Ltd., and also the O'Connor Organisation (which I shall mention later) of the re-valuations by letter dated 24th November, 1959. Against the valuations placed by the second respondent on the six sub-divisions an C appeal was noted under the provisions of sec. 114 (1) of the Ordinance and this, by virtue of sec. 115 (1), was heard by the first respondent. The terms of the notice, stating the nature of the objection or claim in terms of the former section, are not before us, but it appears that the appeal was noted, not by the applicant as the owner of five of the D sub-divisions, nor by South Coast Entertainments (Pty.), Ltd. as the owner of sub-division 3, but by 'The O'Connor Organisation'. It seems that the applicant and South Coast Entertainments (Pty.), Ltd. are associated companies and, along with other concerns, are in a group known in Margate as 'The O'Connor Organisation', of which Mr. Sydney Charles O'Connor is the moving spirit.

E When the appeal came before the first respondent on 1st June, 1960, the case on behalf of the appellant was presented by its attorney who, however, called no evidence but contented himself with addressing the first respondent. The second respondent also addressed the first respondent, which then adjourned the hearing, and thereafter at a resumed hearing, the chairman stated the decision as follows:

'Sub 3—Reduced by £250 to £7,150. F

Sub 4—Reduced by £500 to £6,270.

Sub 5—Reduced by £500 to £6,100

For subs 6, 7 and 8 no reduction were granted. The total reduction was therefore, £1,250.'

It is this decision which is under review.

Sec. 117 of the Ordinance reads as follows:

G 'The decision of the council or the board, as the case may be, upon any appeal shall be final, subject to any rectification which may be made by a competent court of law, and the valuation roll when certified as aforesaid shall be prima facie evidence of the liability of every person named for the payment of rates in respect of the rateable property mentioned, on the basis of the value of such property as shown therein.'

H The Court's powers in relation to a similar provision contained in sec. 97 of the previous Ordinance, 19 of 1924, which also made the Council's decision final

'subject to any rectification which may be made by a competent court of law',

were considered in Van Rooyen and Others v Greytown Town Council, 1933 NPD 21 at pp. 25, 26, where HATHORN, J. (as he then was) with whom GRINDLEY-FERRIS, J., agreed, said

'I have no doubt that the effect of the last section (sec. 97) is to leave the Court with the ordinary and inherent jurisdiction which it possesses to review

Caney J

the proceedings of any administrative body upon grounds which have been defined in such cases as Britten v Pope, 1916 AD 150.'

It is clear that the Court has no appeal powers and HATHORN, J., went on to say

'Nor do I think the fact that the decision of the Council is to be final reduces the jurisdiction of the Court to the level at which it rests in cases where the interference by the Court is specially excluded by the A Legislature, because, although the decision is said to be final, the effect of finality in the sense of excluding the Court's jurisdiction to interfere is removed by the provision that the decision is to be subject to rectification by the Court.'

He then repeated the grounds of jurisdiction as set out in Britten v Pope, supra,

'They are four in number. First, where there is an absence of good faith; second, where there is an absence of due enquiry; third, where B the decision is arbitrary or capricious, and fourth, where the decision is not within the limits of the statute.'

A Full Bench of this Court had occasion to consider the matter again in Durban North Estates Ltd v Durban Corporation and Others, 1935 NPD 558, where, in the head-note, the effect of the Court's decision on this point is set out as follows:

C 'The Court will not interfere with the bona fide exercise by an administrative body of a discretion with which it has been vested, though ordinarily the Court will see that the discretion is exercised, that the statutory bounds of the power conferred upon the body are not exceeded, and that any rules of procedure prescribed are duly complied with; and that a mistake, whether of law or fact, on...