REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

         ……………………..		………………………...
                   DATE			        SIGNATURE

(NORTH GAUTENG, PRETORIA)

		                                                              CASE NO:63280/11
 
                                			   DATE:  4/4/2014		   

In the matter between:

BLAIR ATHOLL HOMEOWNERS ASSOCIATION		      1st Applicant
(ASSOCIATION INCORPORATED UNDER SECTION21)

WRAYPEX (PTY) LTD						     2nd Applicant

ROBERT SEAN WRAY						      3rd Applicant

and

THE CITY OF TSHWANE METROPOLITAN 			      Respondent
MUNICIPALITY
_____________________________________________________________

JUDGMENT
____________________________________________________________________

MURPHY J

1.	The applicants seek an order that the decision of the City of Tshwane 	Metropolitan Municipality (“the Municipality”), the respondent, to adopt 	a draft rates policy and draft by-laws be set aside “as far as the 	development known as Blair Atholl is concerned”.

2.	The first applicant is Blair Atholl Homeowners Association (“BAHA”); 	the second applicant, Wraypex (Pty) Ltd, (“the developer”), is the 	developer of the Blair Atholl Estate, a residential estate; and the third 	applicant is Mr Robert Wray (“Wray”) a member and director of the 	BAHA and the developer.

3.	The Blair Atholl Estate is an upmarket residential estate with a golf 	course, located about 50 kilometres west of the city of Pretoria. The 	recreational facilities in the estate include a restaurant, swimming pool, 	tennis courts and a wellness centre. The estate is over 600 hectares in 	size and is comprised of 329 individual stands. The developer was 	responsible for the development. It applied for approval of the township 	in terms of the Town Planning and Township Ordinance, 15 of 1986, 	which approval was granted subject to specific conditions.

4.	According to the municipality, when it was called upon to consider the 	developer’s application for the establishment of the Blair Atholl 	township, the relevant area fell outside its priority areas for the 	establishment of new townships and had no available water and 	sewerage services. Accordingly, the approval was granted subject to 	the condition that the developer would install all the necessary internal 	and external services. To this end, the developer and the municipality 	in February 2006 concluded an “Engineering Services Agreement” 	(“ESA”) in which the developer undertook primary responsibility for the 	installation of the proposed services scheme, defined to include: “the 	proposed road, street, stormwater, water, electricity and sewerage 	reticulation services scheme in and to the township consisting of all 	internal and external services”.

5.	Internal services are defined in the ESA as including all the water and 	sewerage networks and associated installations, stormwater and 	drainage systems and road infrastructure within the boundaries of the 	township. While the external services are all road, street, stormwater, 	water and sewerage services whereto the internal services can be 	connected for the provision of such services to the township.

6.	In accordance with the ESA, the developer developed and erected the 	external and internal engineering services to the estate, which services 	are now maintained by the BAHA. The maintenance costs are financed 	by way of a monthly levy from residents, which levy is managed and 	controlled by the BAHA. The estate is unusual in this respect and its 	residents do not benefit directly from the ordinary services provided by 	the municipality, due primarily to the geographical location of the estate 	some 50 kilometres from the municipality’s core residential areas.

7.	Since the completion of the development, several disputes have arisen 	between the BAHA and the municipality with regard to the use of water, 	the municipal rates and payment for the installation of the water 	pipeline to the estate. Some of the issues are spelt out in detail in the 	founding affidavit, but strictly speaking are not directly relevant to the 	present application.

8.	As part of the conditions of approval of the township, the developer 	was obliged to establish the BAHA and the purchasers of erven within 	the township are required to become members of the BAHA. The 	developer is also a member of the BAHA. A number of the erven in the 	township were required to be transferred to the BAHA in order to 	provide essential engineering services to the homeowners. The BAHA 	is restricted from selling the erven on which engineering services have 	been erected and has full responsibility for the functioning and 	maintenance of the erven and the essential services thereon.

9.	The focus of the present dispute between the parties is the adoption of 	the draft rates policy by the council of the municipality on 4 May 2011.

10.	Section 229 of the Constitution governs the fiscal powers and functions 	of municipalities in our country. The provision recognizes various 	revenue raising measures available to municipalities, namely: rates on 	property; surcharges on fees for services provided by the 	municipalities; and other taxes, levies and duties authorized by national 	legislation. The provisions relevant to this matter are sections 229(1) 	and 229(2) which read:

		“(1)	Subject to subsections (2), (3) and (4), a municipality may impose-
(a)   rates on property and surcharges on fees for 			  services  provided by or on behalf of the municipality; 		  and
(b)	  if authorised by national legislation, other 			  taxes, levies and duties appropriate to local 			  government or to the category of local 				  government into which that municipality 			  falls, but no municipality may impose 				  income tax, value added tax, general sales
	  tax or customs duty.

(2)	The power of a municipality to impose rates on property, 	surcharges 	on fees for services provided by or on behalf of the municipality, or 	other taxes, levies or duties - 
(a)	  may not be exercised in a way that 				  materially and unreasonably prejudices 			  national economic policies, economic 				  activities across municipal boundaries, or the 			  national mobility of goods, services, capital or 
	  labour and
(b)	  may be regulated by national legislation.”

11.	The Local Government: Municipal Property Rates Act 6 of 2004 (“the 	Act”) is the relevant legislation. Section 2(1) of the Act provides that a 	metropolitan or local municipality may levy a rate on property in its 	area. Section 2(3) of the Act provides:

“A municipality must exercise its power to levy a rate on property subject to -
	(a)  section 229 and any other applicable provisions of the constitution;
	(b)  the provisions of this Act; and
	(c)  the rates policy it must adopt in terms of section 3.”

12.	The relevant provisions of section 3 of the Act read:

“ (1)	The council of a municipality must adopt a policy consistent with this 		Act on the levying of rates on rateable property in the municipality.

(2)	A rates policy adopted in terms of subsection (1) takes effect on the 		effective date of the first valuation roll prepared by the municipality in 		terms of this Act, and must accompany the municipality’s budget for 		the financial year concerned when the budget is tabled in the 			municipal council in terms of section 16(2) of the Municipal Finance 		Management Act.

		(3)	A rates policy must -

				(a)	treat persons liable for rates equitably;
				(b) 	determine the criteria to be applied by the municipality 					if it -
					(i)	levies different rates for different categories 						of properties;
					(ii)	exempts a specific category of owners of 						properties, or owners of a specific category 						of properties, from payment of a rate on their 						properties;
					(iii)	grants to a specific category of owners of 						properties, or to the owners of a specific 						category of properties, a rebate on or a 							reduction in the rate payable in respect of 						their properties; or
					(iv)	increases rates;
				(c)  	determine, or provide criteria for the determination of -
					(i)	categories of properties for the purpose of 						levying different rates as contemplated in 						paragraph (b)(i); and
					(ii)	categories of owners of properties, or 							categories of properties, for the purpose of 						granting exemptions, rebates and reductions 						as contemplated in paragraph (b)(ii) or (iii);
				(d)  	determine how the municipality’s powers in terms of 					section 9(1) must be exercised in relation to 						properties  used for multiple purposes;
				(e)	identify and quantify in terms of cost to the 						municipality and any benefit to the local community-
(i)	exemptions, rebates and reductions;
(ii)	exclusions referred to in section 17(1)(a), 	(e), (g), (h) and (i); and
(iii)	rates on properties that must be phased in in 	terms of section 21;
				(f)  	take into account the effect of rates on the poor and 					include appropriate measures to alleviate the rates 					burden on them;

				(g)  	take into account the effect of rates on organisations 			                   	conducting specified public benefit activities and   					registered in terms of the Income Tax Act for tax 					reductions because of those activities, in the case of 					property owned and used by such organisations for 					those activities;
				(h)	take into account the effect of rates on public service 					infrastructure;
				(i)	allow the municipality to promote local, social and 					economic development; and
				(j) 	identify, on a basis as may be prescribed, all 						rateable properties in the municipality that are not 					rated in terms of section 7(2)(a).”

13.	Section 3(6) of the Act provides that no municipality may grant relief in 	respect of the payment of a rate to a category of owners of properties 	or to the owners of a category of properties, other than by way of an 	exemption, a rebate or a reduction provided for in its rates policy and 	granted in terms of section 15 of the Act, which section sets out the 	general powers of municipalities to grant exemptions, reductions and 	rebates.

14.	Section 4 of the Act governs community participation in a municipality’s 	adoption of its rates policy. It provides as follows:

		 “ (1)	Before a municipality adopts its rates policy, the municipality must -
			(a)	follow a process of community participation in accordance 				with Chapter 4 of the Municipal Systems Act; and
			(b)	comply with subsection (2).

		     (2)	The municipal manager of the municipality must -
			(a)	conspicuously display the draft rates policy for a period of at 				least 30 days -
				(i)	at the municipality’s head and satellite offices and 					libraries; and
				(ii)	if the municipality has an official website or a website 					available to it as envisaged in section 21B of the 					Municipal Systems Act, on that website; and
			(b)	advertise in the media a notice -
				(i)	stating-
					(aa)	that a draft rates policy has been prepared 						for submission to the council; and
					(bb)	that the draft rates policy is available at the 						municipality’s head and satellite offices and 						libraries for public inspection during office 						hours and, if the municipality has an official 						website or a website available to it, that the 						draft rates policy is also available on that 						website: and
				(ii)	inviting the local community to submit comments and 					representations to the municipality concerned within 					a period specified in the notice which may not be 					less than 30 days.
(3)	A municipal council must take all comments and representations 	made to it or received by it into account when it considers the draft 	rates policy.”

15.	In terms of section 5 of the Act, the council of a municipality must 	annually review, and if necessary amend its rates policy, while in terms 	of section 6 it must adopt by-laws to give effect to the implementation 	of its rates policy. When levying rates a municipality must levy rates on 	all rateable property in its area, but this does not prevent a municipality 	from granting exemptions, rebates or reductions in terms of section 15 	(section 7(2)(b) of the Act).

16.	On 1 April 2011, the municipality published a notice in a local 	newspaper, the Pretoria News, whereby it invited the community to 	public consultation meetings on its Medium Term Revenue and 	Expenditure Framework (“MTREF”), its budget, as well as upon its draft 	property rates policy. The notice informed the public that all written 	comments and submissions on the draft rates policy had to be 	submitted by 30 April 2011. Comments and submissions in relation to 	the MTREF had to be received by 10 April 2011. Details for accessing 	the relevant documents were provided in the notice, and a schedule of 	the public consultation meetings was set out in the notice.

17.	The applicants obtained a copy of the draft rates policy on 6 April 2011. 	Their representatives attended one of the public consultation meetings 	on 7 April 2011 at which they raised the issue of previous litigation 	between the parties. The applicants responded to the draft rates policy 	on 29 April 2011 in a 32 page memorandum in which they made 	various submissions.

18.	From the memorandum it appears that the essence of the applicants’ 	objection to the rates policy is that the municipality did not take account 	of the unique position of the residents of the Blair Atholl estate. At page 	16 of the memorandum it is stated:

“The purpose of this submission, in respect of the draft Property Rates Policy, references to residential and vacant land categories are relevant. The effect of the aforegoing is that all residential properties throughout the municipal area will attract the same rate and all vacant properties throughout the municipal area will attract the same rate.”

19.	The memorandum goes on to point out that the developer (and now 	presumably the BAHA) provides services to the estate which are 	normally the duty of the municipality and sets out the details of the 	services, which are the extensive array of external and internal 	engineering services as provided in the ESA. The memorandum 	argued that as the municipality did not provide the usual services, it 	had a duty to determine the Blair Atholl estate as a distinct category of 	rateable property. Section 8(1) of the Act provides that a municipality 	may in terms of the criteria set out in its rates policy levy different rates 	for different categories of rateable property, which may include 	categories determined according to the use of the property; the 	permitted use of the property; or the geographical area in which the 	property is situated. Section 8(2) of the Act extends the categories of 	rateable property that may be determined in terms of section 8(1) by 	identifying specific categories, for example residential properties; 	industrial properties, and business and commercial properties. The 	applicants essentially urged the 	municipality to consider Blair Atholl to 	fall into a category similar to that 	contemplated in section 8(2)(j) of the 	Act, namely “private owned towns serviced by the owner”.

20.	At pages 19-21 of the memorandum, the applicants made the 		following proposal:

“Section 8(2) of the MPRA in determining categories of rateable property anticipated and provided for privately owned towns serviced by the owner. It is not unreasonable to expect of the municipality where such circumstances exist to create a specific category for such purpose as many other local authorities have done….

There are rational reasons why there should be different categories of residential properties and vacant land. It is contended that the erven which were created in the Blair Atholl development should fall within a separate category in order to be rated at a lower level in comparison to conventional residential properties in the municipality’s jurisdiction….”

	The applicants accordingly requested consideration to be given to 	the 	creation of a category “in private developed estates, which are similar 	to the Blair Atholl development, located away from the urban areas 	where no services or limited services are provided by the municipality”. 	They referred to examples in other municipalities where this had been 	done and where an additional rebate varying from 20% to 50% is 	allowed to the estates.

21.	The submission concluded with a plea in relation to the residential 	erven based on equity. At page 22 of the memorandum the applicants 	state:

“The plea to the municipality is to recognize that the services constructed by the developer and now maintained by the Blair Atholl Homeowners Association include expenses which are not recognized in a convential residential township. The Blair Atholl Homeowners Association retains through its contractual obligations with the municipality all responsibilities and liabilities to essential services where the municipality bears the burden in the aforegoing context in convential residential townships. 

In light hereof it is inequitable that equal rates should be payable by property owners who did not have the expense of constructing the services or maintaining same.”

	The applicants then proposed a flat rate capped amount per erf of 	R570 with an annual escalation equivalent to the municipal cost index.

22.	In relation to vacant land within the estate, the applicants sought to 	persuade the municipality that the “concept of vacant land” should be 	excluded within the Blair Atholl township until such time as it is 	transferred by the developer to a first time recipient, who should also 	be given a two year rates holiday until the erf was developed.

23.	On 4 May 2011, the council of the municipality adopted a resolution 	approving the draft property rates policy after taking cognizance of the 	written submissions made to it by various interest groups including the 	BAHA, which were analysed in a report submitted to the council by the 	Financial Services Department in support of the recommendation that 	the policy be approved. The report, Annexure FA13 to the founding 	affidavit, dealt with the applicants’ submissions as follows:

“The demand by Blair Atholl that by the nature of its establishment, the development is a special township that complies with the provisions of section 8(2)(j) of the MPRA, and as such the Municipality should determine the township as a separate category of rateable property in its Rates Policy.

This argument that claims for preferential rates, has been tested on the following grounds, and thus does not succeed in justifying any special consideration of a different category of rateable property that would be eligible for the levying of a different rate as provided for in section 8(2)(j) of the MPRA:

•	Although the MPRA has not provided the definition of “privately owned towns serviced by the owner”, on the basis that the Blair Atholl development is established under the provisions of the Town-planning and Township Ordinance No 15 of 1986, thus disqualifies it as an exclusively privately owned town;

•	In terms of understanding “privately owned town”, it must be seen as a township with a single owner, a self-owned township with all developmental, social, functional and infrastructural services self-approved such as, building plans and other town-planning matters, similar to the mining residential townships. Further to this, the owner must have full jurisdictional powers over the township as own-municipality; and

•	The conditions of the Engineering Services Agreement entered into by the Municipality and the Developer signed in February 2006 spell it out clearly how the development must be levied, and paragraph 6.17 of the said agreement reads as follows:

The Applicant takes notice of the fact that assessment rates as determined in accordance with the policies of the Municipality shall be levied by the municipality on erven in the township as from the date of proclamation of the township. The section 21 Company will become liable upon the proclamation of each separate township (extension).”

	It then concluded:

“It can be concluded that property tax is not payable upon receiving basic services. The taxpayers do not receive direct or measurable benefits from the payment of property tax and the value of the benefit which an individual derives cannot be quantified. It is the responsibility of an individual property owner to pay property tax irrespective of receiving a direct benefit from making use of collective services. The lesser the number of properties, subject to property rates, the smaller becomes the tax base of the municipality. The more exceptions and rebates granted, the greater the tax burden becomes to the property owners whose properties remain subject to non-discounted rates. Exceptions also create precedents and expectations that could not be afforded by the remaining tax payers.”

24.	Though it is clear that the applicants challenge both the substance of 	the decision and the process followed in arriving at it, the grounds of 	review are not clearly formulated in the founding affidavit.

25.	In argument, counsel for the applicants challenged the substance of 	the decision on the grounds of non-compliance with the constitutional 	principle of legality. The decision, he submitted, was both irrational and 	inequitable and hence illegal. Generally, a municipality is obliged to 	provide external services to a developer and a ratepayer. In this 	instance the municipality contracted itself out of this obligation, does 	not provide any services and, so the argument proceeded, is unfairly 	abusing the situation by failing to exempt the applicants from paying 	the same rates as other ratepayers.

26.	To effectively compel the BAHA to collect levies in respect of services 	and at the same time to claim rates (normally claimed for services 	which are not rendered in this case) from the residents, it is contended, 	is inequitable and thus in contravention of section 3(3) of the Act which 	requires a rates policy to treat ratepayers equitably. In so far as 	reliance is placed on the principle of rationality, the submission appears 	to be that there is no rational relationship between the rates policy, the 	purpose of the empowering provisions and the factual context. Rates 	are required in accordance with the law for the provision of municipal 	services. If no services are provided then there is no rational 	justification for the levying of rates.

27.	The imposition of rates does not constitute administrative action as 	defined in section 1 of the Promotion of Administrative Justice Act 3 of 	2000 (“PAJA). The decision of the council to adopt the rates policy is a 	legislative decision. It is that decision which is specifically attacked by 	prayer 1 of the notice of motion. Relief is accordingly not sought in 	the 	form of judicial review under PAJA. Hence, as just mentioned, although 	not clearly formulated in the papers, review is sought under the 	constitutional principle of legality on grounds of irrationality and the 	alleged contravention of section 3 of the Act.

28.	There is no direct challenge in prayer 1 to any decision of the 	municipality, as a corporate entity, refusing to determine a distinct 	category of rateable property and not affording an exemption or rebate 	for that category. The impugned legislative decision was one taken by 	the elected members of the council who were no doubt influenced by 	political considerations for which they are politically accountable to the 	electorate. As stated recently by the SCA in City of Tshwane v Blom 	[433/12] 88 ZA SCA (31 May 2013), rates policies entail, by definition, 	policy choices which lie at the core of municipal autonomy, and as long 	as the rates policy treats ratepayers equitably and is consistent with the 	provisions of the Constitution and the Act, there can be no basis for 	questioning the choices it makes with regard to properties that may be 	differentially rated with respect to different categories of property.

29.	More importantly, as submitted on behalf of the municipality, rates are 	not levied with specific correlation to actual services. The power to levy 	rates is a limited original taxing power conferred on municipalities by 	section 229 of the Constitution, which draws a clear distinction between 	rates and surcharges. The latter may be imposed only in respect of 	fees for services provided by a municipality, while the former is subject 	to no similar constraint. I have been referred to no provision of law, and 	I know of none, that supports the contention that property rates may be 	levied only in relation to property owners who consume municipal 	services. It follows that there is no specific statutory obligation on the 	municipality in the exercise of its discretion to determine categories of 	property to create a special category for estates that have contractually 	agreed with the municipality to erect, install and maintain their own 	external and internal services.

30.	The applicants’ claim that the levying of rates upon them is irrational is 	essentially a contention that there should be a fair relationship between 	the taxed activity or object and the provision of governmental services. 	It is predicated upon the notion that citizens should not pay for benefits 	which they do not receive. In Commonwealth Edison Co v Montana 	453 US 609 (1981), the United States Supreme Court stated in relation 	to this kind of reasoning:

“A tax is not an assessment of benefits. It is, as we have said, a means of distributing the burden of the costs of government. The only benefit to which the taxpayer is constitutionally entitled is that derived from his enjoyment of the privileges of living in an organized society, established and safeguarded by the devotion of taxes to public purposes…”

31.	As regards the complaint that the rates policy treats the applicants and 	the residents of the estate inequitably, similar considerations apply, 	which are reinforced by the peculiar context in which the liability for 	rates has arisen. A statutory duty to treat people liable to pay rates 	equitably imposes an obligation on the municipality to act fairly. In 	deciding whether a body has acted fairly it is necessary to take into 	account all relevant matters surrounding the particular case and to 	evaluate and weigh them in a broader policy framework.

32. 	In the present case, the municipality and the developer entered into a 	contract on the premise that the township fell “totally outside a priority 	area with no water and sewerage services available” and as a 	consequence the municipality was willing to approve the township 	subject to the services being installed and maintained in a particular 	way. Clause 6 of the ESA sets out in detail the obligation of the 	developer to 	establish the BAHA and the functions of the BAHA in 	relation to the maintenance of services. Clause 6.12 stipulates that it 	will be the ongoing responsibility of the BAHA to operate and maintain 	the services “at the cost of every owner”. In recognition of the 	acceptance of responsibility by the BAHA of the duties normally 	performed by the municipality, Clause 16.16 provides that the 	municipality will supply water to the BAHA at the normal rate and will 	not raise a sewerage charge. No similar concessions were made in 	relation to property rates. On the contrary, as the Financial Services 	Department emphasised in its report to the council, clause 6.17 of the 	ESA expressly states that rates will be levied on erven in the township 	as from the date of proclamation of the township.

33.	There is accordingly no basis for any supposition on the part of the 	applicants supporting an equitable claim to exemption from rates in 	exchange for the provision of services by them. The municipality 	approved the township on the understanding that it would not be 	burdened by the increased demand for services while retaining its right 	to levy rates on the residents of the estate.

34.	In the result, there is no merit in the ground of review that the 	municipality acted irrationally, inequitably and hence illegally in 	adopting the rates policy.

35.	The applicants impugn the decision to adopt the rates policy also on 	the ground that the municipality did not follow the required process of 	community participation as contemplated in section 4 of the Act. The 	complaint, inter alia, is that there has not been compliance with section 	4(2)(b)(ii) of the Act which provides that the municipal manager must 	advertise in the media a notice inviting the local community to submit 	comments and representations to the municipality concerned within a 	period specified in the notice which may not be less than 30 days. The 	notice 	published in the Pretoria News on 1 April 2011 required 	submissions 	on the rates policy to be submitted by 30 April 2011. That 	meant the notice gave only 29 days to make submissions. It 	accordingly did not comply with the requirements of section 4. Although 	the applicants have complained about being placed under time 	pressure, they nonetheless were able to submit comprehensive, well-	reasoned submissions in the memorandum they delivered on 29 April 	2011. Their founding affidavit added little of additional substance to the 	argument made in the memorandum. Hence, it cannot be said that they 	were prejudiced by any illegality tainting the notice.

36.	Even though the notice might have been invalid for want of compliance 	with the time period, such procedural invalidity, in the face of 	substantial compliance and no notable prejudice, does not justify a 	declaration of invalidity with retrospective effect. Illegal acts can have 	factual consequences which in all other respects are lawful and have 	no ongoing or prospective illegal effect. Sometimes invalid 	administrative action, in this case the non-compliance with a statutory 	procedure, must be allowed to stand in the interests of finality, 	pragmatism and practicality, especially when non-compliance is not 	material or prejudicial - Chairperson, Standing Tender Committee v 	JFE Sapela Electronics 2008 (2) SA 638 (SCA) para 28. In such 	circumstances, a court in its discretion may decline to set aside the 	invalid action, as I do in this case. I am also satisfied that the 	scheduled meetings which BAHA attended and the submission of 	representations to the council, which although submitted late were 	accepted and placed before the council, constituted sufficient 	compliance with the required process of community participation.

37.	When the applicants filed their supplementary founding affidavit they 	also filed an amended notice of motion seeking additional relief which 	they believe will be justified on the basis of information they acquired 	subsequent to launching the application. In particular, they maintain 	that the council did not consider their comments and recommendations 	in respect of the rates policy which served before it on 4 May 2011. 	They rely in this regard upon a verbatim transcript of the council’s 	meeting. On the assumption that the council did not consider their 	submissions, the applicants submitted that they are entitled to an order 	that the owners of the erven are liable to pay rates in the sum of R500 	per month from 1 July 2011 until the municipality has created or duly 	considered the creation of a special category of rateable properties for 	privately owned townships serviced by the BAHA and the developer. 	To understand this claim it is necessary to refer to the history of the 	dispute between the parties.

38.	During 2008, the BAHA launched two applications in respect of the 	properties, one of which sought review of the municipality’s 2008 rates 	policy decision. At some point the municipality acknowledged that it 	had failed to comply with section 4(3) of the Act by not then taking 	account of the representations made to it when it considered that draft 	rates policy. On 19 April 2010, Tuchten J handed down an order in the 	following terms:

“That all the owners of all properties in the Blair Atholl Township known as Blair Atholl Extensions 1, 2, 3 and 4 are liable to pay property rates in the sum of R500.00 (Five Hundred Rand) per erf per month from 1 July 2008 until the date on which the Applicant’s representations (Annexure “E19” to the founding affidavit) and any further written representations which the Applicants wish to make, have been duly and lawfully considered by the Respondent in terms of the Local Government: Municipal Property Rates Act 6 of 2004. It is recorded that the Respondent would not be entitled to charge interest and penalties on the amount of R500.00 per month during the period 1 July 2008 to date of receipt of correct invoices from the Respondent.

	The applicants reason that because their representations were 	allegedly again not considered by the council on 4 May 2011 this order 	remains effective and they want a declaration to that effect, but one 	which extends its operation until such time as their desired category of 	rateable property has been created.

39.	The applicants maintain that the record shows that when the council 	took its decision on 4 May 2014 not all the members had copies of its 	representations before them, which they believe indicates non-	compliance with the duty of a municipal council to take their 	representations into account.

40.	The applicants’ allegation based on the transcript of the meeting, that 	not all the members of the council had full documentation before them 	when passing the resolution is problematic in more than one respect. 	Firstly, there is no affidavit certifying the transcript as a complete and 	accurate reflection of the proceedings. Secondly, while the transcript 	makes mention that another 100 copies of certain reports were 	required, the reports in question are not identified. Thirdly, the speaker 	adjourned the meeting to afford the members 45 minutes to look at the 	documents. The meeting was re-convened and appears to have 	proceeded with acceptance that the problem regarding 	documentation had been resolved. And finally, perhaps most 	importantly, the allegation made by the municipality in paragraph 55.6 	of its answering affidavit that “a memorandum by the mayoral 	committee was submitted to respondents council together with all of 	the public representations received and considered in finalising the 	memorandum …… served before council on 4 May 2011” has not 	been challenged in the replying affidavit. That memorandum is 	Annexure FA13 to the founding affidavit, being the document prepared 	by the Financial Services Department to which I referred earlier. It 	contains within it a clear, succinct and accurate summary and account 	of the 	BAHA’s submission and the response as set out above. The 	undisputed fact that this document served before the council 	leaves no 	doubt that the representations of the BAHA were taken into account to 	the extent required by section 4(3) of the Act. The council was properly 	apprised of the BAHA’s representations even if not all 	members initially 	had a copy of them.

41.	In the premises there is no legal basis to grant the relief sought by the 	applicants in prayer 6 of the notice of motion in the form of a 	declaration limiting the rates of the individual owners to R500 per 	month until a special category of rateable property is created for them. 	Their representations were lawfully considered by the municipality as 	envisaged in the order of Tuchten J. Their entitlement to the special 	dispensation provided in the court order ended at that time.

42.	In prayers 7 and 8 of the amended notice of motion the applicants seek 	an order compelling the municipality to create a category of rateable 	properties in privately owned townships serviced by the BAHA and the 	developer and a further order compelling the municipality to levy 	differential rates for the properties in the category in the amount of 	R500 per erf per month, which amount will escalate annually in 	accordance with the percentage as determined by the Consumer Price 	Index. The only foundation set out in the supplementary affidavit for 	this far-reaching relief is the applicants’ belief that the municipality is 	acting 	unfairly by refusing to give them a special dispensation on 	account of their providing the internal and external services under the 	ESA. The argument flounders for the same reason as the more general 	proposition that taxpayers are entitled to a fair relationship between the 	taxed 	activity and the provision of services, but more particularly 	because it invites the court inappropriately to assume the legislative 	function of the council solely on the ground that the elected members 	of the council have imposed a tax, in keeping with the original 	conditions of the approval of the township, but which the applicants do 	not like.

43	It is important to note that no case is made out on the papers that the 	proposed imposition of rates constitutes a disproportional infringement 	of the applicants’ constitutional rights of equality or property. As I have 	explained, the poorly formulated grounds of review relied upon are the 	alleged contravention of the principle of legality (rationality) and the 	statutory duty to treat ratepayers equitably. There is no cogent 	evidence that the rates will unduly penalize the applicants or impose an 	unconscionable financial burden in violation of any of the provisions of 	the Bill of Rights.

44.	The municipality’s response to the proposal that the court create a new 	category of rateable property, and impose favourable differential rates 	in respect of it, is as predictable as it is compelling. The creation of 	categories of rateable property and the rate or amount of the tax is a 	legislative power vesting in the council. The exercise of such powers 	are reviewable on restricted grounds. Courts should not readily assume 	that  disputes regarding their exercise are justiciable. Our Constitution 	provides a clear indication, a textually demonstrable commitment, of an 	intention to leave the determination of 	the incident and rates of 	municipal taxation to municipal councils. Absent unjustifiable 	discrimination on proscribed grounds, these 	matters are inherently 	political and non-justiciable questions, ordinarily unamenable to 	resolution by adjudication, practically on account of their attendant 	polycentric consequences, and doctrinally because of their 	constitutional allocation to the political organs of state. For those 	reasons, I decline to grant the relief sought in prayer 7 and 8 of the 	amended notice of motion.

45.	Finally, in prayer 5 of the amended notice of motion the applicants seek 	an interdict prohibiting and restraining the municipality from claiming 	property rates, as provided for in the Local Authority Rating Ordinance 	of 1977, from the owners of erven in the Blair Atholl townships for the 	period prior to 1 July 2008. The dispute relates to whether the 	individual owners’ properties were properly included on a valuation roll 	for the relevant period between April 2006 and 2008. The issue 	concerns amounts possibly owing as arrear rates by individual owners 	in terms of their rates accounts. The liability to pay rates lies with the 	individual owners. The applicants have no locus standi to intervene in 	the tax relationship between the individual owners and the municipality. 	Nor have they produced evidence of any authority to act on their behalf 	in this regard. To the extent that the developer is itself an individual 	owner and ratepayer, it has not furnished any evidence of the amount 	in which it has been levied for this period and why an interdict is 	necessary to protect it from anticipated harm. Any claim by the 	municipality for rates allegedly owing by the developer can be dealt 	with on an individualised basis and if need be opposed on legitimate 	legal grounds. The facts do not justify the grant of a general prohibitory 	interdict.

46.	The municipality has asked for a costs order on a punitive scale. The 	applicants’ pursuit of the matter was not entirely unreasonable. Their 	position is an unusual one. Their challenge to the equities of the 	situation was legitimate and worthy of judicial consideration. In the 	circumstances their conduct was not unreasonable or vexatious such 	as to warrant a punitive costs order. The complexity of the matter did 	however justify the employment of two counsel.

47.	In the result the following order is made:

		The application in its entirety is dismissed with costs, including 		the costs of two counsel. 

JR MURPHY
JUDGE OF THE HIGH COURT

Representation for the 1st to 3rd ‘Applicants 
Counsel:			Adv S van Nieuwenhuizen SC
				Adv LGF Putter			
Instructed by Attorneys:	Schwartz-North Incorporated			

Representation for Respondent: 
Counsel:			Adv T Strydom SC
				Adv T Mkhwanazi 			
Instructed by Attorneys:	Hugo & Ngwenya