Pietermaritzburg Corporation v South African Breweries Ltd

• Jurisdiction: South Africa
• Judge: Coram Lord De Villiers CJ, Innes J, Maasdorp JP, Laurence J (Acting Ordinary Judge of Appeal) and De Villiers JP
• Judgment Date: 09 October 1911
• Court: Appellate Division, Cape Town - Bloemfontein

Lord De Villiers, C.J.:

The 106th section of the Natal Law 19 of 1872 enacts that, for the purpose of raising the means of carrying into effect the powers given by that Act to the Municipal Council of a borough, such Council shall have the power, as often as shall be deemed necessary, to make and levy rates or assessments upon all or any portion of the immovable property within the borough in such manner as may be determined upon by the Council. The 107th section enacts that for such purpose the Council shall, as often as may be deemed necessary, cause a valuation to be made of all or any part of the rateable property within the borough. The 109th section confers on any person, who shall think himself aggrieved by any such assessment or valuation, the right to appeal against the same to the Resident Magistrate or Mayor having jurisdiction. The present respondents are owners of promises in Pietermaritzburg, known as the Horse Shoe Hotel, and they appealed to the Resident Magistrate against a valuation of the property of £11,900. The mode of valuation adopted by the valuers appears to have been to ascertain the amount at which the building could be erected and the value of the land, and to deduct from ten to fifteen per cent. for depreciation. The Magistrate, having regard to the purposes for which the building could be used, found from the evidence taken before him that it was not worth more than £3,750 in the then market and reduced the valuation accordingly. On appeal, the Provincial Division refused to disturb the Magistrate's finding, holding, in effect, that the market value of the property was the correct basis of valuation. The Corporation has applied for leave to appeal against that judgment, and, by consent of parties, it was arranged that, in case leave to appeal should be granted, this Court would forthwith hear the appeal itself.

Lord De Villiers, C.J.

It is clear that, if there is an appeal at all to this Court, the present case is one in which leave to appeal should be granted. The question as to what should be the basis of valuation is one of great importance to municipal corporations in Natal, and it is impossible to say that the decision sought to be appealed against is so obviously correct that a further appeal against it would be hopeless. The questions have, however, been raised whether the Corporation had the right to appeal to the Provincial Division, and whether, in case there was no such appeal, it would be competent for this Court to give leave to appeal against a judgment confirming the finding of the Magistrate. The 69th section of Act 22 of 1896 confers the right on any party to a civil suit or action, who is dissatisfied with the order or judgment of the Magistrate, to appeal to the Provincial Division, and the question raised was whether the appeal to the Magistrate against a valuation constitutes a civil suit or action. The difficulty arose mainly out of the circumstances that the appeal against the valuation may, under the 109th section of Act 19 of 1872 be made either to the Magistrate or the Mayor, and it was suggested that the Legislature could not have contemplated that, if there was no appeal from the Mayor's decision, there should be an appeal from the Magistrate's decision. This difficulty has, however, been removed by Mr. Kufal, who pointed out that under the 84th and three immediate following sections of the Act the Mayor holds a Court which is a Court of record, and has the jurisdiction of a Resident Magistrate's Court, and is subject to the laws applicable to Resident Magistrate's Courts. It is no strained construction of the Act to hold that, whether the appeal against the valuation be made to the Magistrate or to the Mayor, the proceeding is a civil suit, and that consequently there is an appeal to the Provincial Division. It follows that there is a further right of appeal to this Court against the judgment of the Provincial Division even if it confirms the judgment of the Magistrate or Mayor. The Court, therefore, granted leave to appeal.

In support of the appeal, Mr. Kufal mainly relied upon what he contended to have been the recognized mode

Lord De Villiers, C.J.

of valuation after the decision of the Natal Supreme Court in Corporation of Pietermaritzburg v Owen (13 N.L.R., p. 1) as distinguished from the mode of valuation approved of by the Provincial Division in the present case. In the former case the Court refused to disturb a valuation made "not on the basis of the rental, but having regard solely to the present actual value of the premises as determined by competent and experienced valuers." The Court did not define what it meant by "actual value," and appears to me to have attached too much weight to the decision of the valuers, however competent and experienced they might be. They are appointed by the Corporation itself, and the Legislature, in allowing an appeal against their decision, clearly intended to protect ratepayers against arbitrary modes of valuation. The Court held that actual value should be the basis of valuation, but, until we know what is meant by actual value, we are no nearer a solution of the question. In the present case the Court below held that the market value should be the basis of valuation, and that certainly provides a more definite and satisfactory means of arriving at a proper solution. Against that mode of valuation it has been urged that it is impracticable because, until there has been an actual sale or attempt at a sale, it is impossible to say what the property would realise, but the system has not been found to be impracticable in the Cape of Good Hope Province. The 119th section of the Cape Act 45 of 1882 requires every valuer, before entering on the valuations entrusted to him, to make a solemn declaration that he will conscientiously value the property at and for the full and fair price or sum which such property would, in his judgment, be, likely to realize if brought at the time of valuation to voluntary sale and sold upon the usual terms and conditions. The complaint most frequently made about this mode of valuation is, not that it is impracticable, but that the valuations are too high. Another frequent complaint is that it is not fairly applied all round, but unless perfectly honest, capable and impartial valuers could always be obtained, it is a complaint which would probably arise whatever mode of valuation is

Lord De Villiers, C.J.

adopted. In deciding what the property would be likely to realize, if brought to voluntary sale, the valuers would lie entitled to take into consideration every circumstance which would be likely to affect the minds of intending purchasers. The learned Judge President said, in the Court below, that the valuer was not entitled to consider the value of the property as a going concern or to consider the value of the licence. The value of the licence held by the respondents is stated by one witness to be £1,000 and by another to be £2,000 and clearly that amount could not be taken as part of the value, for the licence was given to the person named therein and consequently the purchaser of the property could not claim, as of right, a transfer of the licence to him. But I am not prepared to hold that the valuer must disregard the fact that the premises are licensed. It is a fact which must influence the minds of purchasers who intend to apply for a transfer of the licence or for a new licence. It shows, at all events, that the premises have been approved of by the Licensing Board, and that, if the purchaser should apply for a fresh licence or for the transfer of the licence, no difficulty need arise on account of the premises being unsuitable. I do not understand, however, that the Magistrate dismissed the fact of there being an existing licence entirely from his consideration. He did not treat the value of that licence as being part of the value of the property, but he had "regard to the purposes for which it could be used," and the main purpose for which the property could be used was that of continuing the business which was being carried on under the existing licence. It would be...