Robertson and Another v City of Cape Town and Another Truman-Baker v City of Cape Town

• Jurisdiction: South Africa
• Judge: Bozalek J
• Judgment Date: 31 May 2004
• Citation: 2004 (5) SA 412 (C)
• Docket Number: 4995/02 and 9507/02
• Counsel: S P Rosenberg for the applicants. A G Binns-Ward SC (with A M Breitenbach) for the first respondent. W H Trengove SC (with P Coppin) for the second respondent. M Donen SC for the applicant. A G Binns-Ward SC (with A M Breitenbach) for the respondent.
• Court: Cape Provincial Division

Bozalek J:

Introduction

[1] These two applications concern the validity of the provisional valuation roll of properties in the area of jurisdiction of the City of Cape Town (the City) and the validity of property rates based on those G valuations levied by the City for the 2002/3 municipal financial year. The applicants, property owners situated in Camps Bay and Bakoven, respectively, are dissatisfied with what they consider to be the exorbitant increase in the rates levied on their properties for the 2002/3 municipal financial year. They attack the rates on the ground that the provisional valuation roll was invalid or inoperative when the H City levied rates based on the roll's valuations.

[2] In late June 2002, the applicants, in what I will term 'the Robertson matter' (and whom I shall, for convenience, also refer to as the Robertsons) brought an urgent application against the I City for an order interdicting and restraining it from levying and recovering property rates on the basis of property valuations contained in the provisional valuation roll which the City opened for inspection and objection on 21 May 2002. The thrust of their case, at that stage, was directed at the City's reliance on the provisions of the Property Valuation Ordinance of 1993 (Cape) J

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(hereinafter the PVO) in establishing the provisional valuation roll and levying rates on A valuations in terms thereof.

[3] The applicants contended that the City was not a local authority as defined in s 1 of the PVO and was therefore not entitled to rely on its provisions. They contended further that the PVO's administration had not been properly assigned to the Province of the Western Cape as required by the provisions of the interim Constitution B and, finally, that there were no legislative provisions in existence which permitted the City to levy and recover property rates based upon valuations contained in a provisional valuation roll. C

[4] The Robertson matter was due to be heard on 11 November 2002. In the interim, however, the City, pursuant to a 'legal audit' which it conducted, had taken steps to seek remedial legislation to correct what it then saw as 'the legal technical defects' in the relevant legislation. At that stage, the City's attitude was that the hearing should be postponed to permit Parliament D to rectify the defects in question. The postponement was duly granted.

[5] On 24 October 2002, the National Assembly passed the Local Government Laws Amendment Bill (the Amendment Bill or the Amendment Act), clause 21 of which dealt with the legal problems E identified by the City's legal audit and contained in a memorandum directed to the National Assembly Portfolio Committee on Provincial and Local Government (the Portfolio Committee). Notwithstanding the fact that the Bill had yet to become legislation, the applicants indicated that they intended impugning its constitutionality. As a result, on F 11 November 2002, an order was granted, by consent, joining the second respondent (the Minister), as sponsor of the Bill, and postponing the matter for later hearing. On 5 December 2002, the Local Government Laws Amendment Act 51 of 2000 was promulgated, the Bill having been assented to by the President the previous day. G

[6] On 29 November 2002, the applicant in the Truman-Baker matter launched proceedings against the City in which she sought a declaration that the City was not entitled to levy or recover property rates on the basis of the valuations in the provisional valuation roll prior to the coming into effect of the aforementioned amending legislation and interdicting the City from H levying or recovering rates based on the aforesaid property valuations prior to the commencement of the Act. The comparatively limited scope of the relief sought in the Truman-Baker matter, with its implicit acceptance of the constitutional validity of the remedial legislation, sets it apart from the Robertson matter in which no such concession is made. During August 2003, all parties I consented to a consolidation of the two matters which were set down for hearing on 22 October 2003.

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Relief sought A

[7] At the hearing, the applicants in both matters amended the relief they sought. The applicants in the Robertson matter sought the following orders:

'1.

Interdicting and restraining the [first] respondent from levying and recovering property rates on the basis of property valuations contained in the provisional valuation roll which the B [first] respondent opened for inspection and objection on 21 May 2002;

alternatively,

2 (a)

Declaring that, in terms of s 172(1)(a) of the Constitution of the Republic of South Africa Act 108 of 1996, s 21 of the Local Government Laws Amendment Act 51 of 2002, is invalid; and C

(b)

Interdicting and restraining the first respondent from levying and recovering property rates on the basis of property valuations contained in the provisional valuation roll which the first respondent opened for inspection on 21 May 2002.'

[8] In the Truman-Baker matter, the relief finally sought was an order: D

'(a)

Interdicting and restraining [first] respondent from levying and recovering property rates from applicant for the financial year 1 July 2002 to 30 June 2003 on the basis of the property valuations contained in the provisional valuation roll which respondent opened for inspection and objection on 21 May 2002.' E

The background to the applications

[9] It is firstly necessary to set out, in some detail, the recent history of local government development in the Cape Town metropolitan area over the last decade. That process, mirrored in similar exercises across the country, was one of transforming racially determined local government into F democratically determined local government. This complex process, involving a pre-interim transitional period, an interim period and a final phase, was described in general terms by the Constitutional Court in Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council, [1] similarly, a case involving a challenge by ratepayers to the levying of increased rates. G

[10] This history, as it applies to the greater Cape Town area, is common cause. The process culminated on 5 December 2001, with the establishment of the City as a municipality in terms of the Local Government: Municipal Structures Act 117 of 1998, (the Structures Act), incorporating six municipal local councils falling within the Cape H Metropolitan Area (the CMA). They were the municipalities of The City of Cape Town, The South Peninsula, Blaauwberg, Oostenberg, Tygerberg and Helderberg. Prior to this, there had been a pre-interim phase running from 2 February 1994, the date of commencement of the Local Government Transition Act 209 of 1993 (the Transition Act), until the first democratic local government elections were held in the CMA, I on

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29 May 1996. Thereafter, followed the interim phase which ended with the establishment of the City of Cape Town as one overall A municipality.

[11] During the interim phase, the then-existing municipalities in the CMA determined that it was necessary to conduct a metropolitan-wide general valuation of properties. They separately resolved to authorise such a valuation in their areas of jurisdiction, the base date of which would be 1 January 2000. Prior thereto, B there existed a variety of different valuation rolls with different base dates within the CMA, some more than twenty years old. The discrepancies between 'rates values' and actual values of properties, coupled with across-the-board uniform property rates increases, led to a perception in some quarters of an unfair distribution of the rates burden and complaints of unfair discrimination. C

[12] In Lotus River, Ottery, Grassy Park Residents Association and Another v South Peninsula Municipality, [2] a ratepayers association in one of the six metropolitan local councils which was later incorporated into the City, challenged a uniform increase in the levy for property rates on the basis that it contravened its members' D constitutional right to equality. It contended that, given the far greater rate of increase in the value of properties in traditionally white-owned suburbs, such uniform increases reinforced existing inequities and impacted differentially upon black property owners in previously disadvantaged areas. The Court dismissed the challenge, holding that, although there was a breach of the applicants' rights to E equality, it was, in the circumstances in which the respondent municipality found itself, justifiable in terms of s 36(1) of the Constitution.

[13] Amongst the circumstances advanced by the respondent municipality in justifying its decision to impose a uniform increase F was that it was working with an outdated valuation roll and a new roll would only be completed in time for the 1999/2000 budget. In the course of its limitation enquiry, the Court made the following remarks:

'Were respondent to breach its undertaking to complete the new valuation roll in time for the 1999/2000 budget, the position could G well be different in that it would be far more difficult to prove that there were not less restrictive means available. In other words, should the Council now delay in its undertaking, its justification would have to be analysed differently.' [3]

It would not be far-fetched to describe these remarks as a warning-shot across the bows of those municipalities soon to be incorporated in the Unicity. H

[14] As part of the process of local government development the Unicity Commission, a multi-party transitional body was established on 25 November 1999 to act as a midwife to the single municipality for the CMA, established pursuant to the municipal...