THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable
Case Number  :  526 / 05

In the matter between

CDA BOERDERY (EDMS) BPK
FIRST APPELLANT
WESTERN AREAS PROPERTY AND

RESIDENT ASSOCIATION
SECOND APPELLANT

and

THE NELSON MANDELA METROPOLITAN
MUNICIPALITY
FIRST RESPONDENT
THE SPEAKER OF THE NELSON MANDELA

METROPOLITAN MUNICIPALITY
SECOND RESPONDENT
THE PREMIER OF THE EASTERN CAPE PROVINCE
THIRD RESPONDENT
THE MEC FOR HOUSING AND LOCAL
GOVERNMENT FOR THE EASTERN CAPE
FOURTH RESPONDENT
THE DIRECTOR OF VALUATIONS
FIFTH RESPONDENT

Coram :
MPATI  DP,  CAMERON  JA, MTHIYANE  JA, CONRADIE  JA

et THERON  AJA

Date of hearing :
17 NOVEMBER 2006

Date of delivery :   6 FEBRUARY  2007

SUMMARY

Local government - rating of property by Municipality - ambit of s 10G(6), (6A) and (7) of Local
Government Transition Act - consent of Premier to impose property rate above two cents in
the Rand - whether this provision of Municipal Ordinance 20 of 1974 impliedly repealed  –
Order in para 52

Neutral citation:  This judgment may be referred to as :
CDA Boerdery (Edms) Bpk and Others v The Nelson Mandela Metropolitan
Municipality and Others [2007] SCA 1 (RSA)

___________________________________________________________________

J U D G M E N T
___________________________________________________________________

MINORITY JUDGMENT OF CONRADIE  JA

[1] The first appellant is a landowner and the second an association
representing rural landowners. Each is aggrieved by the imposition by
the local authority of assessment rates on immovable properties that
were not rateable under the old dispensation when they fell within the
jurisdiction of the since disestablished Western District Municipality. I
shall call the first appellant and the members of the second appellant
'the landowners'.

[2] The
first
respondent
is
a
metropolitan
municipality
(the
Municipality). It is the new local authority within whose jurisdiction the
landowners now fall. The other respondents are bodies and persons
who have or were thought to have an interest in the proceedings. Apart
from the second respondent who protested at her joinder, they played no
active part in the proceedings.

[3] The litigation started with an interim application seeking an
interdict against the Municipality to prevent it from prosecuting claims

against the landowners for the recovery of rates and service charges it
maintained were due. Interim relief was granted by consent pending the
disposal of an application that was to be instituted shortly afterwards.
The main application claimed, first, an order declaring service charges
on the landowners' properties to be unlawful. Second, an order was
sought declaring the valuation of their properties to have been unlawful,
and, finally, an order was claimed that the landowners were not liable for
rates in respect of the financial years 2002 - 2003 and 2003 - 2004.  By
the time the application came to be heard by Froneman J in the South
Eastern Cape Local Division, the landowners had abandoned their
objection to the service charges. On the other issues the high court
found in favour of the Municipality, dismissed the application and
discharged the earlier interdict. It granted the landowners leave to
appeal.

[4] When the transition to democracy came, local government had to
be restructured. There were all manner of local authorities in existence
at the time for various population groups that had been established
under the old dispensation. Since the transformation was to be on a
unified country-wide basis, national legislation was required to
accomplish it. Over the coming years national legislation would gradually
give local government a new face.

[5] The validity of pre-constitutional legislation, ‘old order legislation’
as it is called in item 2 of Schedule 6 to the Constitution, is declared to
continue in force subject to amendment or repeal and, naturally,
consistency with the Constitution. In some cases the old order legislation
required adaptation. One instance was the administration of the
provinces of which there were now nine instead of four. Each of the new
provinces would have to adopt, for its own area, provincial ordinances
that had formerly applied over a wider area. So it was that the
administration of the Municipal Ordinance 20 of 1974 was transferred to
the Eastern Cape Province by proclamation 111 published in the
Government gazette of 17 June 1994.

[6] The first statute in the series restructuring local government was
the Local Government Transition Act 209 of 1993 (the Transition Act). It
set up transitional councils for the so-called pre-interim and interim
phases of the restructuring. For those local government bodies that
would not in any event have been subject to provincial legislation it
made special provision in sections 15 and 16. Section 15(4) extended
'the provisions of any law applying to local authorities in the province
concerned' to any body constituted under the Black Local Authorities Act
102 of 1982; s 16(2) did the same with certain transitional councils

established by proclamation. The legislative scheme is clear: existing
provisions would be used until others could be enacted.

[7] Some three years after its commencement on 2 February 1994,
the Transition Act was amended by the introduction in 1996 of a Part
VIA (headed 'Interim Phase') in the statute. It comprised the new
subsecs 10B - 10N of which 10G formed the most extensive component.
The most important provisions, for present purposes, were contained in
s 10G(6), (6A) and (7)(a) and (b):
'(6)  A local council, metropolitan local council and rural council shall, subject to any
other law, ensure that—
(a)
properties within its area of jurisdiction are valued or measured at
intervals prescribed by law;
(b)
a single valuation roll of all properties so valued or measured is
compiled and is open for public inspection;  and
(c)
all procedures prescribed by law regarding the valuation or
measurement of properties are complied with:

Provided that if, in the case of any property or category of properties, it is not feasible
to value or measure such property, the basis on which the property rates thereof
shall be determined shall be as prescribed:  Provided further that the provisions of
this subsection shall be applicable to district councils in so far as such councils are
responsible for the valuation or measurement of property within a remaining area or
within the areas of jurisdiction of representative councils.

(6A) (a)
Despite anything to the contrary in any other law, a municipality must
value
property for purposes of imposing rates on property in accordance with

generally
recognised
valuation
practices,
methods
and
standards.

(b)
For purposes of paragraph (a)—

(i)
physical inspection of the property to be valued, is optional;  and

(ii)
in lieu of valuation by a valuer, or in addition thereto,
comparative,

analytical and other systems or techniques may be
used, including—

(aa)
aerial photography;

(bb)
information technology;

(cc)
computer applications and software; and

(dd)
computer assisted mass appraisal systems or techniques.

(7)    (a)       (i)
A local council, metropolitan local council and rural council may
by resolution, levy and recover property rates in respect of
immovable property in the area of jurisdiction of the council
concerned:  Provided that a common rating system as
determined by the metropolitan council shall be applicable within
the area of jurisdiction of that metropolitan council:  Provided
further that the council concerned shall in levying rates take into
account the levy referred to in item 1 (c) of Schedule 2:
Provided further that this subparagraph shall apply to a district
council in so far as such council is responsible for the levying
and recovery of property rates in respect of immovable property

within a remaining area or in the area of jurisdiction of a
representative council.

(ii)
A municipality may by resolution supported by a majority of the

members of the council levy and recover levies, fees, taxes and
tariffs  in respect of any function or service of the municipality.

(b)
In determining property rates, levies, fees, taxes and tariffs (hereinafter

referred to as charges) under paragraph (a), a municipality may
—

(i)
differentiate between different categories of users or property on
such

grounds as it may deem reasonable;

(ii)
in respect of charges referred to in paragraph (a) (ii), from time
to time by resolution amend or withdraw such determination and
determine a date, not earlier than 30 days from the date of the
resolution, on which such determination, amendment or
withdrawal shall come into operation;  and

(iii)
recover any charges so determined or amended, including
interest on

any outstanding amount.'

[8] Until the introduction of s 10G(6), (6A) and (7) the Transition Act
contained no rating provision. For the first three years after the
implementation of the Transition Act local authorities must have
exercised their rating powers in terms of old order provincial ordinances.
In the case of the Eastern Cape Province, immovable property was rated
under the authority of Part 2 of Chapter VIII of the Municipal Ordinance.
The relevant provision in the Municipal Ordinance is s 82 which provides
in subsec (1) that -

'(1)       Every council shall:

(a)
for every year make and levy on all rateable property within its

municipal area a general rate not exceeding, except with the
approval
of the Administrator, two cents per rand…'

[9] The introduction of s10G(6), (6A) and (7) by Act 97 of 1996 with
effect from 1 July 1996 may have had something to do with the imminent
commencement of the new Constitution from 4 February 1997.  Section
229 of the Constitution provides that -

'(1) . . . a municipality may impose -

(a) rates on property . . . ; 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 . . .

(2)
The power of a municipality to impose rates on property . . . or

other taxes, levies or duties -

(a) . . .;

(b) may be regulated by national legislation.'

[10] Item 26(1)(a) of the Constitution's sixth Schedule preserves the
provisions of the Transition Act in force 'in respect of a Municipal Council
until a Municipal Council replacing that Council has been declared
elected as the result of the first general election of Municipal Councils
after the commencement of the new Constitution.'1

[11] Section 229 is an empowering and not a charging section. National
legislation was envisaged to regulate the considerable complexities
involved in the rating of immovable property. The broad and general
power afforded by s 229 accords with s 164 of the Constitution which
provides:  'Any matter concerning local government not dealt with in the
Constitution may be prescribed by national legislation or by provincial
legislation within the framework of national legislation.'

1 The first general municipal elections after the commencement of the Constitution were held on 5 December
2000.

[12] Section 10G(6), (6A) and (7) on its own is, however,  far from
adequate in serving as an instrument for imposing rates. It prescribes
that valuations are to be undertaken without stating how these are to be
conducted. It states that rates on immovable property are to be imposed
by resolution of a municipal council; it states that differentiation between
categories of property is permissible but it omits the detail of how
properties are to be rated or which properties are to be rated.2 As was
pointed out in Gerber v Member of the Executive Council for
Development Planning and Local Government, Gauteng3, s 229 of the
Constitution uses the expression ‘rates’ in its ordinary sense of a tax
assessed on the value of buildings and land and s 10(G)(7) must be
taken to use the expression in the same sense.

[13] Traditionally, not all property within a municipality was regarded as
rateable, or rather, it could escape being rated if it complied with certain
criteria and the owner applied for an exemption from rates. There were
many properties of this kind listed in s 81 of the Municipal Ordinance.
These included immovable properties owned by religious bodies or used
for public worship or hospitals or sports bodies or the Boy Scouts, the list

2 It for example does not provide which properties are not rateable. It does not state which properties are exempt
from rates. Section 82(1)(a) of the Municipal Ordinance provides that rates are to be levied on rateable
properties. The Municipality, by resolution imposed property rates on 'rateable property', a concept which is not
employed by the Transition Act. It must have had regard to s 82(1)(a) of the Municipal Ordinance.
3 2003 (2) SA 344 (SCA) para 23.

is a long one. It was not suggested that the Municipality was not bound
to consider exemptions in terms of s 81. The point is that s 10G(7) was
not intended as a rating mechanism that was complete in itself and could
be applied without reference to the provisions of the Municipal
Ordinance.

[14] Section 10G(6) of the Transition Act which dealt with valuations,
acknowledged the Municipal Ordinance by providing that a municipality
should, subject to any other law, ensure that properties within its area
were valued or measured at intervals prescribed by law. Moreover, ‘all
procedures prescribed by law regarding the valuation or measurement of
properties’ had to be complied with. In the case of the Eastern Cape this
was the Valuation Ordinance of 1993 or the Valuation Ordinance of
1944. There was a dispute between the parties as to which of these laws
applied but that is unimportant. The point is that s 10G(6) in express
terms envisaged the incorporation of existing provincial laws into the
Transition Act in the sense that they were to be taken into account in the
rating scheme. Section 10G(7) does not have such an express
incorporation provision. It seems to me to have been a legislative
oversight that must be adjusted by interpretation. Valuation of
immovable property is an integral part of rating property: The imposition

of a rate envisages a levy of so many cents in the Rand of the value of
property. Rating without valuation is impossible.

[15] The Municipality, of course, realised the practical complexities of
rating very well. The summonses to recover arrear rates and other
charges that served as the trigger for the urgent application to interdict
the Municipality, were drawn in the realisation that the landowners'
immovable properties could not have been assessed on the strength of s
10G(6), (6A) and (7) alone.  The formulation of the claims (only the rates
claim is still relevant) relied, correctly in my view, on the provisions of s
82(1)(a) of the Municipal Ordinance: Claim 2 demanded payment of
'arrear general municipal rates levied in terms of sect 82 and payable in
terms of sect 87 of the Municipal Ordinance 20 of 1974 for the year
2002/2003 the plaintiff having complied with all the provisions of the said
Ordinance.'

[16] By resolution of the Municipal Council taken on 10 June 2002 the
landowners' properties were assessed to tax for the financial year
commencing 1 July 2002. The council's resolution read as follows:

'That the Council, in terms of Section 30(2) of the Local Structures Act No. 177 of
1998 (as amended) read with Section 10G(7)(a)(i) of the Local Government

Transition Act, Second Amendment Act No. 97 of 1996, and by resolution taken by
majority of its full number, levies the following general rate on all rateable property
within the municipal area for the period 1 July 2002 to 30 June 2003:

Port Elizabeth Unit
5,5843 cents in the Rand
Uitenhage Unit

8,38 cents in the Rand
Despatch Unit

1,85 cents in the Rand

(c)
That the Council, in terms of Section 30(2) of the Local Government :
Municipal Structures Act No.. 117 of 1998 (as amended) read with Section
10G(7)(b)(i) of the Local Government Transition Act, Second Amendment Act No. 97
of 1996, and by resolution taken by majority of its full number, grants the following
rebates for the period 1 July 2002 to 30 June 2003: . . .
. . . .
. . . .
Erstwhile Western District Municipal areas
Properties in the erstwhile WDM areas now valued and rated for the first time:
A rebate of 67% of the general rate on all rateable properties, resulting in the
following rates being levied on the following categories of properties:
All rateable properties rates being 2,3713cents in the Rand.'

[17] The Municipality's contention is that the assessment rates of which
the landowners complain were validly imposed under the authority
conferred on it  '. . . pursuant to Section 229(2)(a) of the Constitution and Section

10G(6) of the Local Government Transition Act No 209 of 1993. Said charges were
in all instances lawfully raised.'
The reference to s 10G(6) of the Transition Act is wrong. There is no
reason to suppose that the proposed resolution was adopted in any but
the terms suggested by the executive mayor, that is to say, in terms and
in reliance on s 10G(7) of the Transition Act.

[18] At the time the rates were imposed the Municipality had become a
fully-fledged Municipality under the provisions of s 12 of the Municipal
Structures Act 117 of 1993 (the Structures Act) which obliged the MEC
for local government in a province, by notice in the Provincial Gazette, to
establish a municipality in each municipal area demarcated by the
Demarcation Board in the province in terms of the Local Government:
Municipal Demarcation Act 27 of 1998. The necessary proclamation by
the MEC establishing the Municipality was published on 2 December
2001. From that date it was, therefore, no longer an interim structure.
The provisions of the transition Act nevertheless continued to apply to it
until 2 December 2000 when the first general municipal elections after
the Constitution were held.4

4 Item 26(1)(a) of the Constitution provides that the provisions of the Transition Act would remain in force until
the first election of a municipal council after the commencement of the Constitution.

[19] Once, however, the Municipality was governed by a council duly
elected as a result of the first general election after the Constitution, it
could no longer lawfully levy assessment rates on landowners within its
jurisdiction in terms of  s 10G(7)(a)(i). The section under which the
Municipality was now entitled to levy rates was s 93(4) of the Structures
Act5 which reads as follows:

'(4)   Despite anything to the contrary in any other law and as from the date on
which a municipal council has been declared elected as contemplated in item
26(1)(a) of Schedule 6 to the Constitution —
(a)
section 10G of the Local Government Transition Act, 1993 (Act 209 of 1993),
read with the necessary changes, apply to such a municipality; and
(b)
any regulation made under section 12 of the Local Government Transition
Act, 1993 (Act 209 of 1993), and which relates to section 10G of that Act, read
with the necessary changes, apply to such a municipality.'

[20] Section 93(4) is framed in such a way that it incorporates the duly
modified provisions of s 10G(6), (6A) and (7) of the Transition Act, but it
is s 93(4) of the Structures Act that henceforth conferred the power to
tax on a duly elected municipality council. I need say no more about it;
the point was not raised on the papers or argued before us on appeal.
The point was evidently not argued in Howick District Landowners

5 The Structures Act came into force on 1 February 1999.

Association v uMngeni Municipality [2006] SCA 107 (RSA) either for it is
not discussed in the judgment.

[21] The high court found that the requirement of permission by the
Premier was incompatible with the  original  powers enjoyed by the new
order municipalities. The learned judge formulated his reasons as
follows:
'Die vereiste van toestemming kom nie in die tersaaklike bepalings van die Grondwet
of die Oorgangswet voor nie. Die begrensing van nuwe munisipale owerhede se
belastingsbevoegdheid in die Grondwet of die Oorgangswet sluit nie beperkings, of
gegradeerde beperkings, op die belastingkoers self in nie. In die konteks van die
vorige bedeling, naamlik dié van gedelegeerde wetgewingsbevoegdhede van
plaaslike regeringsinstansies, was sulke beperkings en toesig deur hoër
regeringsvlakke verstaanbaar en noodsaaklik, maar in die nuwe plaaslike
regeringsbestel
van
oorspronklike
wetgewingsbevoegdhede
is
daar
geen
grondwetlike of wetgewende noodsaak daarvoor nie. Ek kan geen rede vind waarom
die bepalings van vorige provinsiale wetgewing in die vorm van die Munisipale
Ordonnansie voorrang moet geniet bo latere grondwetlike en nasionale wetgewende
bepalings wat op die oog af volledig met die onderwerp handel nie.'

[22] Before us the Municipality, in supporting the findings of the learned
judge a quo, argued that s 82(1)  'offends the scheme of authority
sanctioned inter alia by s 229 of the Constitution and the provisions of

the Local Government Transition Act' and should be treated as pro non
scripto or as impliedly repealed by the later legislation.'

[23] I am unable to agree with these contentions. The argument places
greater emphasis on the concept of 'original powers' than appears to me
to
be
warranted.
The
Constitutional
Court
in
Fedsure
Life
Assurance Ltd v Greater Johannesburg Transitional Metropolitan
Council6 decided no more than that a local authority in resolving to
impose rates exercised an original and not a delegated power with the
consequence that its action was not subject to administrative law review.
It seems to me that the Municipal Ordinance read with whatever
Valuation Ordinance was applicable, formed a coherent construct for the
imposition of rates which had stood the test of time. This legislation was
employed for the first three years of the transition, and it does not seem
to me reasonable to suppose that the Transition Act intended to abolish
their relevant provisions in favour of an incomplete and therefore
unworkable system of rating. Counsel for the Municipality did not support
that outcome. What he did contend was that once municipalities had
been given constitutionally derived power to impose such rates as were
authorised by national legislation, the Premier no longer had the power
to decide whether rates might exceed two cents in the Rand. It is only

6 1999 (1) SA 374 (CC).

this one power of the Premier that was supposed to have been lost in
the transition. Apart from this competence the Premier had several other
powers that were necessary or desirable to the orderly rating of
properties. It was not suggested that they should also be treated as pro
non scripto.

[24] It is more consonant with the gradual and sometimes painful
development of new municipal structures to regard Part 2 of Chapter VIII
of the Municipal Ordinance, including the requirement of the Premier's
approval of a rates level above two cents in the Rand, as
complementary to the rating provisions of the Transition Act. The
alternative would be to treat the requirement of the Premier's consent as
having been impliedly repealed. Implied repeal is not lightly inferred, and
here it seems to me that the necessities of practical administration argue
strongly against it.

[25] If the Premier’s power of approval in s 82(1)(a) of the Municipal
Ordinance were indeed impliedly repealed by the Transition Act (read
with the Constitution) it would mean that from the date of the introduction
of s 10G into the Transition Act in 1996, there would have been no
limitation on the power of a municipality to levy property rates. This
situation would have persisted for almost a decade until the legislature in

2005, through the Local Government: Municipal Property Rates Act 6 of
2004 granted the Minister more extensive control over municipal rating
powers than s 82(a)(i) of the Municipal Ordinance had given to the
Premier, a sure indication that municipalities were never intended to
have unrestricted rating powers.7 The mechanism of property valuations
by independent experts is a mechanism to control a local authority's
power to tax its residents; but if it were empowered to impose unlimited
rates on those valuations, all control would be lost. I do not subscribe to
the notion that the lawgiver envisaged that the original power of local
authorities to levy rates was, since the introduction of s 10G(6), (6A) and
(7), untrammelled by any restrictions other than those set out in
229(2)(a) of the Constitution.

[26] When s 10G was with effect from 1 July 2005 repealed by the
Local Government: Municipal Finance Management Act 56 of 2003 the
provisions of subsecs (6), (6A) and (7) of s 10G (the rating provisions)
were kept in force until the legislation envisaged by s 229(2)(b) of the
Constitution would be enacted. It is significant that Part 2 of Chapter VIII
of the Municipal Ordinance was also not repealed at that time. These
two complementary pieces of legislation, once they had served their
purpose, were repealed together by s 95 of the Local Government:

7 The Local Government: Municipal Property Rates Act 6 of 2004 was brought into force on 2 July 2005.

Municipal Property Rates Act 6 of 2004 which made comprehensive
provision for the valuation and rating of immovable property by
municipalities.

[27] The position taken by the appellants in Howick District Landowners
Association v uMngeni Municipality8 was that the Local Authorities
Ordinance (Natal) 25 of 1974 did not apply to the immovable properties
sought to be rated since they were not located within a ‘borough’. This
court found that the contention was correct and that the Ordinance did
not apply. Although the court a quo in that matter seems to have held
that rating could proceed under the Natal Ordinance and under the
Transition Act - that the two measures were, in other words,
complementary - this finding was not open to the court on appeal. It
therefore held that the properties could have been rated under s
10G(7)(a)(i) of the Transition Act without reference to the Ordinance but
did not say how this might have been done.

[28] In the present case the appellants argue the contrary, namely that
all the provisions of Part 2 of Chapter VIII of the Municipal Ordinance 20
found application. As has been noted above, the counter-argument by
the Municipality is that although the rating provisions of the Municipal

8 [2006] SCA 107 (RSA).

Ordinance did find application, the Premier no longer had any say over
the level of rates imposed. Although, from a theoretical perspective,
there may be something to be said for this argument, I think that the
practical effects of it would be so unpalatable that they could not have
been intended by the legislature. The legislature must be taken to have
incorporated all the rating provisions of the Municipal Ordinance in s
10G(7) of the Transition Act (as indeed it did in s 10G(6)) so as to
establish a workable interim rating system.

[29] It is trite law that statutes imposing a burden on the subject are
construed in such a way that the subject is least burdened. Revenue
statutes fall into this category. The rating provisions in the Transition Act
were revenue measures. If there is the least doubt about their
interpretation, it should be resolved by holding that the Premier's
consent to the imposition of a rate greater than two cents in the Rand on
the ratepayers' properties ought to have been sought by the Municipality.

[30] Since preparing this judgment I have had the benefit of considering
the views of Cameron JA. I agree with most of what he says. The left-
over provision in the Municipal Ordinance for obtaining the Premier's
consent did not fit tidily into the new local government structure.
However, I shrink from the boldness of the leap from untidiness to

implied repeal. I would prefer to find the legislative intention in what the
legislature decrees. I do not consider that a statutory provision loses its
force simply because its derivation can be said to be suspect.  Our
disagreement, it seems to me, involves no more than this: In the process
of constructing the new edifice and before it could stand on its own,
some of the essential transition measures (among them the Premier's
consent provision) were legislatively imperfect. They were makeshifts,
intended to  remain in force, messy as they were, until they were
repealed by the Act that completed the design of the new structure, the
Local Government: Municipal Property Rates Act. But before the
structure was finished, all the provinces in the new South Africa were,
temporarily, intended to make do with what they had inherited from the
provinces in the old South Africa. The enhanced status of municipalities
in the new dispensation was not accompanied by an advance in
administrative or financial acumen that might lead one to think that the
Premier's control over the rating powers of municipalities was
considered not to be necessary for the transition period. In view of this I
am inclined to think that the omission of a limiting provision in s 10G(7)
signifies no more than that the lawgiver felt secure in the knowledge that
the Municipal Ordinance (which, we must not forget, was specifically
introduced into the laws of the Eastern Cape) took care of the situation.

[31] In view of my conclusion, it is not necessary to consider the
appellants' other objections to the rates. The order I would suggest is
that the appeal be upheld with costs and the judgment of the high court
altered accordingly.

J H  CONRADIE
JUDGE OF APPEAL

MAJORITY JUDGMENT OF CAMERON JA:

[32] I am indebted to my colleague Conradie JA for his judgment which
sets out the main statutory provisions and the parties' contentions; but I
am unable to agree with his conclusion that the appellant landowners'
appeal must succeed.  Our main point of difference is whether the Cape
Municipal Ordinance 20 of 1974 obliged the respondent municipality to
obtain the Premier's approval for the new rates it sought to impose on
the landowners.  Conradie JA considers that it did.  I respectfully differ.  I
endorse the reasoning and conclusion of Froneman J in the court below.
The old-order subordination of the local authority's power to levy rates of
more than 2 cents in the Rand to the Administrator's9 [Premier’s]

9 Municipal Ordinance 20 of 1974 (Cape) s 82(1): 'Every council shall – (a) for every financial year make and
levy on all rateable property within its municipal area a general rate not exceeding, except with the approval of
the Administrator, two cents per rand …'.

approval was impliedly repealed when the Constitution took effect.  It did
not survive the transition.  The municipality was therefore free of any
obligation to obtain that approval, and the rates are valid.

[33] In my respectful view my colleague's approach does not afford
sufficient credence to the independent status and power the new
constitutional order accorded to municipalities.  Under the pre-
constitutional dispensation, municipalities owed their existence to and
derived their powers from provincial ordinances.10  Those ordinances
were passed by provincial legislatures which themselves had limited
law-making authority, conferred on them and circumscribed by
Parliamentary legislation.  Parliament's law-making power was
untrammelled,11 and it could determine how much legislative power
provinces exercised.  The provinces in turn could largely determine the
powers and capacities of local authorities.12  Municipalities were
therefore at the bottom of a hierarchy of law-making power:
constitutionally unrecognised and unprotected, they were by their very

10 The South Africa Act of 1909 (a statute of the British Parliament, 9 Edw c 9), which created the Union of
South Africa, entrusted ‘municipal institutions, divisional councils and other local institutions of similar nature’
to provincial councils: see Johan Meyer 'Local Government' in the first edition of WA Joubert (ed) The Law of
South Africa (1981) (LAWSA) vol 15 para 301.
11 Subject only to extremely limited 'entrenched provisions' that are not relevant here.
12 Section 84(1)(f)(i) of the Republic of South Africa Constitution Act 32 of 1961 in terms similar to the South
Africa Act gave provincial councils power to make ordinances in relation to 'municipal institutions, divisional
councils and other local institutions of a similar nature'.

nature 'subordinate members of the government vested with prescribed,
controlled governmental powers'.13

[34] The requirement to which Conradie JA would subject the
municipality's rating power emanated from this general conception of
municipal power.  And the Administrator's role in approving or
disapproving rates must be understood in that specific pre-constitutional
setting.  The Administrator was the presidentially-appointed chief
governmental executive in the province.14  He (and it was always a he)
convened and prorogued the provincial council and participated in its
proceedings.15 Most pertinently, in terms of various provincial
ordinances in the Cape and other provinces he had 'wide-ranging
powers' over local authorities,16 including powers of control, investigation
and intervention over local government administration.17  To a significant
extent, he policed the municipalities and functioned as their overseer.

[35] The provision, embedded as it was in a 1974 Ordinance, when the
1961 Constitution was in force, thus subjected rates assessments over
two cents in the Rand to the province's chief executive official, who

13 LAWSA (1 ed, 1981) vol 15 para 303.
14 Republic of South Africa Constitution Act 32 of 1961, s 66.
15 See Republic of South Africa Constitution Act 32 of 1961, sections 72 and 78.
16 G Carpenter 'Provincial Government' LAWSA vol 21 para 249 and para 252(d), (f) and (i).
17 LAWSA vol 15 paras 514-518.

functioned in a legislature from which the local authority derived its
powers, and to which it was entirely subordinate.  The approval
requirement was a specific product of the old-order constitutional
scheme, tailored to its hierarchy and matched to the Administrator's
supervisory control over municipalities and his executive role in relation
to them.

[36] None of this, or barely any of it, accords with the new constitutional
dispensation.  It is correct, as the landowners emphasised in argument,
that the new Constitution gives provincial government powers in relation
to local government.  Provincial legislation must determine the different
types of municipality to be established in the province, and it is the
responsibility of each provincial government to establish municipalities in
accordance with national legislation.18  Provincial government must also,
by legislative or other measures, provide 'for the monitoring and support
of local government in the province'.19 Subject to the obligation of
national and provincial government not to compromise or impede a
municipality's ability or right to exercise its powers or perform its
functions,20 a municipal by-law that conflicts with national or provincial

18 Constitution s 155(5).
19 Constitution s 155(6)(a).
20 Constitution s 151(4).

legislation is invalid.21  And where a municipality cannot or does not fulfil
an executive obligation in terms of the Constitution or legislation, a
provincial executive may take appropriate steps to intervene.22

[37] But these provisions do not change the fact that the new
constitutional order conferred a radically enhanced status on
municipalities.  Under the interim Constitution, each level of government
(national, provincial and local) derived its powers direct from the
Constitution (though local government's powers were subject to
definition and regulation by either the national or provincial
governments).  The constitutional status of local government was
therefore 'materially different' from the pre-constitutional era.23

[38] The advent of the final Constitution has taken us even further from
the constitutional structure in which the Ordinance was embedded.  The
new Constitution has enhanced, rather than diminished, the status of
local government.  As under the interim Constitution, municipalities are
no longer merely creatures of statute that enjoy only delegated or
subordinate legislative power derived exclusively from ordinances or
parliamentary legislation.  The Constitution has moved away from a

21 Constitution s 156(3).
22 Constitution s 139(1).
23 Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1999 (1) SA 374
(CC) paras 35-38.

hierarchical division of governmental power in favour of a new vision, in
which local government is interdependent, and (subject to permissible
constitutional constraints) inviolable and has latitude to define and
express its unique character.24

[39] Can the Ordinance's requirement that the Administrator (now the
Premier) must approve rates over 2 cents in the Rand survive this
radically different and enhanced realisation of local government powers?
In my view, the answer must be No.  Under the old dispensation, it was
both natural and appropriate that central government’s superior position
over municipalities, and the province's role as the source of local
government's power, should find expression in the power of
government's chief provincial executive official, the Administrator, to
approve rates.

[40] Under the Constitution both the province generally and the Premier
specifically have an entirely different role in relation to local authorities.
Though provincial government has important functions in relation to
municipalities, its role is constitutionally described and circumscribed.
Nothing in the Constitution suggests that the Premier of a province

24 City of Cape Town v Robertson 2005 (2) SA 323 (CC) paras 58-60, endorsing the coordinate statements in
Fedsure.

enjoys special supervisory powers over the exercise of local government
functions, or special duties in relation to the determination of rates.

[41] This case does not require us to decide whether a statute of
Parliament, enacted under power expressly conferred by the
Constitution,25 can permissibly require that the Premier should approve
municipal rates.  And the conclusion that the obligation under the
Ordinance to obtain the Administrator’s approval was impliedly repealed
does not pre-judge the different question whether the enactment of such
a requirement within the new constitutional framework would be
constitutionally valid.  The question before us is much narrower: it is
whether a requirement to approve rates that was embedded in a
dispensation fundamentally different in the position and powers it
accorded local authorities has survived the constitutional transition.  It is
in answering that narrow question that the conspicuous absence of any
special supervisory role for the Premier under the new Constitution takes
on a special significance.26

[42] It is also telling that the curbs on municipalities' rating powers that
Parliament has enacted in the Local Government: Municipal Property

25 Constitution s 229(2)(b) – the power of a municipality to impose rates on property 'may be regulated by
national legislation'.
26 An absence noted by Froneman J in para 11 of the judgment appealed from, and quoted by Conradie JA in par
21 of his judgment.

Rates Act27 bear no relation at all to the Ordinance's requirement that
the Administrator must approve that is sought to be enforced in this
case.

[43] A further indication that the approval requirement in s 82(1)(a) of
the Ordinance was impliedly repealed is that s 10G(6) of the Local
Government Transition Act 209 of 1993 (the LGTA) requires that
municipalities perform valuations of properties ‘subject to any other
law’.28  By contrast, s 10G(7), which empowers municipalities to levy and
recover property rates, has no parallel allusion to ‘any other law’.  This
suggests that s 10G(7) confers a free-standing rate-levying competence
on municipalities.  I therefore respectfully differ from the suggestion in
the judgment of my colleague Conradie JA (para 14) that the omission in
s 10G(7) to subordinate the rate-levying power to requirements in ‘any
other law’ is a legislative oversight that we must adjust by interpretation.
In my view, it is doubtful whether the Ordinance is applicable to s 10G(7)
at all, and this strengthens the conclusion that that portion of the

27 Act 6 of 2004, s 16 (which confers limited and carefully defined powers of supervision and limitation
regarding rates on the Cabinet member responsible for local government).
28 Section 10G(6) was at issue in Howick District Landowners Association v uMngeni Municipality [2006] SCA
107 (RSA) and in City of Cape Town v Robertson 2005 (2) SA 323 (CC).  As Conradie JA points out in para 27
of his judgment, the appellant landowners in Howick expressly contended that the Natal Ordinance there in issue
did not apply at all.  In the light of the particular definitions in the Natal Ordinance (which defined rateable
property as being property within a 'borough', whereas the newly rated properties were by common cause
outside any 'borough'), this Court held that the landowners' contention was correct and that the Natal Ordinance
was entirely inapplicable.  Contrast the position in City of Cape Town v Robertson 2005 (2) SA 323 (CC) para
44, where the Constitutional Court held that in the legislative setting of the Western Cape province a 1993
valuation ordinance constituted 'any other law' subject to which valuations had to be performed.  In contrast to
Howick, the municipality here makes common cause with the landowners that the Cape Ordinance does in
general apply, though it contends that the approval requirement in s 82(1)(a) has suffered implied repeal.

Ordinance was impliedly repealed when the constitutional order was
established. (As Conradie JA points out in para 17 of his judgment,
nothing turns on the municipality's incorrect allusion in its affidavits to s
10G(6) of the LGTA – the provision it invoked in approving the rates was
in fact s 10G(7).)

[44] I therefore conclude that the pre-constitutional requirement that the
Administrator approve rates above 2 cents in the Rand was impliedly
repealed when the constitutional order was established and that it was
thus inoperative when s 10G of the LGTA was enacted after the interim
Constitution took effect (and when s 10G was re-enacted after the
Constitution took effect).29  There is in my respectful view a clear
repugnancy between the scheme of the pre-constitutional distribution of
power, which gave rise to the requirement of the Administrator’s
approval, and the scheme under the Constitution.  That repugnancy
must lead to the conclusion that the requirement was abolished when
the relevant provisions of the LGTA were inserted in 1996.30

The landowners’ other challenges to the new rates

29 The statutory genesis is set out in paras 7 and 19-20 of the judgment of Conradie JA, though I cannot endorse
the significance he attaches in paras 19-20 to the re-enactment of s 10G of the LGTA in s 93(4) of the Structures
Act: in my view s 93(4) extended the life and force of s 10G, without substituting itself for that provision.
30 Only the approval requirement in s 82(1)(a) of the Ordinance was in issue before us, and I consider it
unnecessary (in contrast to Conradie JA in para 23 of his judgment) to express any view on any other provisions
of the Ordinance relating to the Premier.

[45] The landowners complained that the rates sought to be levied
violated       s 229(2)(a) of the Constitution, which prohibits the exercise
of the municipal rating power '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'.  Froneman J31 expressed reservations about whether this
requirement was justiciable: first, because the primary remedy for any
alleged breach of s 229(2)(a) lay in the hands of national and provincial
government, and not in aggrieved litigants taking direct recourse to the
courts; and, second, because the courts are not best placed to decide
the questions of economic policy at issue in the provision.  But he found
in any event that the court could not decide the issue because the
landowners had failed to join the relevant organs of national government
as parties to the litigation.  He also observed that the landowners had
failed to specify which of their rights the alleged breach of s 229(2)(a)
had violated.

[46] In the papers the landowners made some allusion in this context to
arbitrary deprivation of property in violation of s 25 of the Bill of Rights.
But in argument before us, counsel for the landowners expressly
abandoned reliance on this alleged violation.  Instead, the landowners

31 Judgment a quo para 12.

claimed that the expert evidence they included in their affidavits – which
the municipality did not counter with opposing expertise – established
that the rates sought to be imposed violated s 229(2)(a) and that this
entitled them to impugn the rates.  I share Froneman J's reservations
about the justiciability of s 229(2)(a), but like him I find it unnecessary to
express any final view on this issue.  This is because of the palpable
non-joinder.  It would be quite wrong to decide that municipal rates
'materially and unreasonably' prejudice 'national economic policies,
economic activities across municipal boundaries, or the national mobility
of goods, services, capital or labour' without hearing national
government’s view on the issue.  That alone makes it impossible in this
litigation to uphold the landowners' complaint.

[47] The landowners objected also that the rates, as sought to be
imposed, were arbitrary because the Municipality stated that it arrived at
the general rate by ascertaining the total funds required, then dividing
this figure by the total valuation of properties within all areas sought to
be rated ([total funds required] ÷ [total valuation] = [general rate]).  But,
the landowners say, what the Municipality in fact did was to levy rates of
7% and higher in their areas, while in others the rates were much lower.
In some areas, for instance, only the land valuations were taken into
account – without improvements – thus resulting in much lower rates, of

between 2.096% and 3.666%.  This, they contended, constituted
arbitrary conduct.

[48] The Municipality however explained that it inherited a differential
system of rates from its previous local authority components, and that, in
introducing the rates for the first time, it was constrained to make use of
previous interim valuations.  The rates admittedly do differentiate
between landowners, to the benefit of some.  But the municipality’s
explanation in my view establishes that the new rates are not arbitrary.
On the contrary, despite the benefit some landowners reap from the
continuing use of old interim valuations, it was perfectly rational for the
municipality to use those valuations in introducing the rates.

[49] And as Froneman J pointed out, s 10G(7)(b)(i) of the LGTA
licenses differentiation between different categories of property on such
grounds as a municipality may deem reasonable.  In my view it is
impossible to conclude that the municipality’s approach, which for the
reasons proffered gave some landowners temporary relief from the full
7c rate, while exacting it of the appellants, was not reasonable.

[50] Froneman J also found that the complaint of discrimination was
insufficiently evidenced in the landowners' founding papers since the

probability existed that the properties the landowners were comparing in
fact had different uses.  These conclusions seem to me to be clearly
correct.  In my view the complaint of arbitrary and discriminatory conduct
on the part of the Municipality cannot be sustained.

[51] Finally, the landowners complained that, in conflict with the
notification requirements set out in the Valuation Ordinance 26 of 1944
the Municipality had failed to inform them of the rates change.  But the
Municipality asserted in its answering affidavit that it had validly
despatched notices to all affected ratepayers, and undertaken
publication in accordance with all requirements.  In argument counsel for
the landowners conceded that only CDA Boerdery, the first appellant,
had established that it had not received proper notice.  I agree with
counsel for the municipality that the purpose of section 56 of the
Valuation Ordinance 26 of 1944 – which sets out the notice
requirements – was to ensure that persons affected by a valuation and
possible rates assessment are afforded adequate opportunity to object
to such valuation and to have such objection adjudicated by the
valuation court. It is common cause that all the appellants, including
CDA Boerdery, availed themselves of this opportunity and indeed
appeared at the Valuation Court. There is no suggestion on the papers
that CDA Boerdery was not aware of the new valuations and rates

assessments. The proviso to s 56 (inserted by s 4 of Ordinance 13 of
1945) in any event states that 'non-receipt of such a notice shall not
invalidate the valuation roll or the proceedings of the valuation court.'  It
was not in dispute before us that CDA Boerdery participated in the
proceedings of the valuation court.   In my view its non-receipt of the
required notice did not invalidate the new valuation requirement in
respect of it.

Order
[52] The appeal is therefore dismissed with costs.

E CAMERON
JUDGE OF APPEAL

CONCUR:
MPATI  DP
MTHIYANE  JA
THERON  AJA
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA STATEMENT – CASE HEARING IN SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
Wednesday 7 February 2007

Status:
Immediate

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal

On 6 February 2007 in CDA Boerdery (Edms) Bpk v The Nelson Mandela
Metropolitan Municipality [2007] SCA 1 (RSA), the Supreme Court of Appeal
dismissed an appeal by a group of Port Elizabeth-area landowners who had
objected to new rates the Nelson Mandela Metropolitan Municipality imposed for the
financial years 2002–3 and 2003–4.

The landowners failed in their bid before the Grahamstown High Court, where
Froneman J dismissed their application.  Now the SCA has, by a majority, dismissed
their appeal and confirmed the validity of the rates.

The landowners’ principal argument on appeal was that the municipality had failed
to obtain prior approval for the new rates from the Premier of the Eastern Cape
Province.  The requirement that consent be obtained from the Premier’s
predecessor, the Administrator, was contained in Cape Municipal Ordinance 20 of
1974.  The majority of the SCA, in a judgment by Cameron JA (with whom Mpati DP,
Mthiyane JA and Theron AJA concurred) held that the consent requirement was
impliedly repealed when the new constitutional dispensation took effect.  The
majority based its finding on the constitutionally different and enhanced role
municipalities enjoy under the Constitution.  The municipality was therefore not
obliged to seek the approval of the Premier.

In a dissenting judgment, Conradie JA held that the approval requirement still
applied, and that the municipality’s failure to obtain the Premier’s consent
invalidated the rates.

The majority of the SCA, like the Grahamstown High Court, dismissed also the
landowners’ other objections to the rates.  These were that the rates sought to be
levied violated s 229(2)(a) of the Constitution (which prohibits the exercise of the

municipal rating power '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');  that the rates unlawfully
discriminated against them, because some landowners were temporarily exempted
from their full effect; and that proper notice had not been given to them.  The SCA
found that these objections were without substance and could not be upheld.

-- ends --