THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 20789/2014
Reportable
In the matter between:

UNIQON WONINGS (PTY) LTD
APPELLANT
and
CITY OF TSHWANE  METROPOLITAN
MUNICIPALITY
RESPONDENT

Neutral Citation: Uniqon Wonings v City of Tshwane (20789/2014) [2014] ZASCA
182 (30 November 2015)

Coram:
Lewis, Cachalia, Theron, Wallis and Saldulker JJA
Heard:
2 November 2015
Delivered

30 November 2015
Summary: Local Authority – Municipality – Imposition of property rates in terms of
s 10G(7) of the Local Government Transition Act 209 of 1993 – When exercising
its power in terms of s 10G no need to comply with the prescripts of provincial
rating ordinance – Not obliged to determine rates annually - Rates levied during a
specific financial year did not lapse at the end of financial year.

__________________________________________________________________
ORDER
_________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Fabricius J sitting
as court of first instance):
The appeal is dismissed with costs.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
Theron JA (Lewis, Cachalia, Wallis and Saldulker JJA concurring):

[1] The primary question to be determined in this appeal is whether a
municipality was obliged, in terms of s 10G(7)(a)(i) of the Local Government
Transition Act 209 of 1993 (the Transition Act), to determine property rates
annually and whether such rates automatically lapsed at the end of the financial
year during which it was levied. If this question is answered in the affirmative, the
appeal must be upheld.

Factual background
[2] The background facts are largely common cause. At the hearing of this
matter in the high court the parties had compiled a document titled „Common
Cause Background Facts‟ which was handed in by consent. These facts are
included in the summary that follows.

[3] The appellant, Uniqon Wonings (Pty) Ltd, a property developer, bought and
developed farmland into a residential estate, Six Fountains Residential Estate. The
respondent is the City of Tshwane Metropolitan Municipality, a Metropolitan
Municipality created in terms of the Local Government: Municipal Structures Act
117 of 1998 (Structures Act).

[4] The residential estate is situated within the jurisdiction of what used to be
the Kungwini Local Municipality (Kungwini) which was established with effect from

5 December 2000, with its demarcated area including various previously peri-
urban areas, commonly referred to as the Bronberg area. The Bronberg area had
previously formed part of the area of jurisdiction of the Eastern Gauteng Services
Council, a local authority as contemplated in the Constitution and the Transition
Act.1  The Bronberg area, including Silver Lakes, Mooikloof and various
agricultural smallholdings and farms, was not included in the formal valuation roll
of the Eastern Gauteng Services Council. Kungwini was disestablished in 2011
and incorporated into the City of Tshwane Metropolitan Municipality.

[5] Prior to the comprehensive restructuring of Local Government initiated by
the adoption of the interim Constitution and the Structures Act, which created
inclusive Municipal areas, the Bronberg area did not form part of the area of
jurisdiction of any municipality and the owners of property in this area were not
required to pay property rates.

[6] Kungwini commenced with the preparation of a valuation roll which was
applicable from July 2002 in terms of s 10G(6) of the Transition Act. The valuation
process and roll was finalised during February 2003. The first time that Kungwini
levied property rates in the Bronberg area was pursuant to Local Authority Notice
4/2003 dated 19 February 2003 (the notice). The notice was not linked to a
financial year and did not have any specified end time frame of operation. In terms
of the notice, assessment rate tariffs of 0,02 cents per rand value as per the
valuation roll were levied from 1 April 2003. The notice was given in terms of s
10G(7) of the Transition Act read with s 26(2) of the Local Authorities Rating
Ordinance 11 of 1977 (the Ordinance). The notice was not challenged or set aside
by a court. Kungwini published various other notices which, save for the one next
mentioned, are not relevant to this dispute. On 28 July 2004, it published a notice
in terms of which the assessment tariff was increased to 0,054 cents in the rand
for the Bronberg area.

[7] The appellant instituted action against the respondent in which it claimed
repayment of R788 282 paid to the respondent in respect of property rates for the

1 See Gerber & others v Member of the Executive Council for Development Planning and Local
Government, Gauteng & another [2002] ZASCA 128; 2003 (2) SA 344 (SCA) paras 1, 6 and 7.

2004/2005 financial year, on the basis that such payment was not owing and was
made without lawful cause.  It was alleged in the particulars of claim that the
Transvaal Provincial Division (as it then was) had, in Kungwini Local Municipality &
another v Silver Lakes Homeowners Association & others (T) (unreported case no
3908/2005 (29 June 2006)), held that the increase in property rates for Kungwini‟s
2004/2005 financial year to 0,054 cents in the rand was invalid. It was further
alleged that the increased property rates were set aside and no effective rate was
payable for the 2004/2005 financial year. Reference was also made to the fact that
this court had, on appeal to it, confirmed that decision of the court.2

[8] Upon application by the appellant, the court a quo in this matter ruled, in
terms of Uniform Rule 33(4), that the issues be separated and that the following
issue be determined first: „whether the allegation [by the appellant] . . . that no
effective property rate was payable for the 2004/2005 financial year of Kungwini
Local Authority is correct or whether a property tax rate of 0,02 cents in the rand
was applicable‟, as pleaded by the respondent. The court (Fabricius J) found in
favour of the respondent. It is against that judgment that the appellant appeals with
the leave of this court.

Legislative framework
[9] Reforms in the structure of local government began in the mid 1990‟s as a
result of political changes in the country and the transition involved a staggered
process to be implemented over several years.3 The first step in this process was
the enactment of the Transition Act, which according to its preamble, was
intended, inter alia, to provide interim measures to promote the restructuring of
Local Government. The Transition Act was „part of the statutory scaffolding agreed
upon by the negotiating parties as necessary before, during and after the transition
of national and provincial government‟.4

2 Kungwini Local Municipality v Silver Lakes Home Owners Association & another [2008] ZASCA
83; 2008 (6) 187 (SCA).
3 Liebenberg NO & others v Bergrivier Municipality [2013] ZACC 16; 2013 (5) SA 246 (CC) para
41.
4 Executive Council, Western Cape Legislature & others v President of the Republic of South Africa
& others [1995] ZACC 8; 1995 (4) SA 877 (CC) para 162.

[10] The power of municipalities to impose property rates is derived from s 229
of the Constitution and from legislation.5 In terms of this section, municipalities
have direct original legislative capacity. Section 229(1)(a) of the Constitution
provides that a municipality may impose „(a) rates on property and surcharges on
fees for services provided by or on behalf of the municipality‟. In terms of
subsection (b) it may, if authorised by national legislation, impose „other taxes,
levies and duties appropriate to local government‟. Section 229(2)(b) provides that
the power of municipalities to impose rates may be regulated by national
legislation.

[11] During 1996 a number of provisions, including in particular s 10G, which
regulated the financial affairs of municipalities, were inserted into the Transition
Act.6  Section 10G(7)(a)(i)  stipulated that a municipality 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 takes 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.‟

[12] Historically, municipalities in the old Transvaal province derived their rating
powers from the Ordinance. Section 21 of the Ordinance empowered a local
authority to levy a general rate on rateable property listed in the valuation roll for a
financial year to which the roll is applicable.

5 Rates Action Group v City of Cape Town [2005] ZASCA 111; 2006 (1) SA 496 (SCA) para 10.
6 Local Government Transition Act Second Amendment Act No 97 of 1996. Section 10G was
repealed by s 179 of the Local Government: Municipal Finance Management Act 56 of 2003, which
came into operation on 1 July 2005. In terms of s 179(2) of that Act, the repeal of s 10G(6), (6A)
and (7) was delayed until the legislation envisaged in s 229(2)(b) of the Constitution was enacted.
The envisaged legislation is the Local Government: Municipal Property Rates Act 6 of 2004 which
came into operation on 2 July 2005. The Municipal Finance Management Act must be read
together with the Municipal Property Rates Act. In terms of the transitional provisions contained in s
88 of the Municipal Property Rates Act, municipalities were entitled to continue conducting
valuations and property rating in terms of legislation repealed by that Act until the date on which the
new valuation rolls prepared in terms of that Act took effect. See generally Liebenberg NO & others
v Bergvier Municipality [2012] ZASCA 153; [2012] 4 ALL SA 626 (SCA).

Did the respondent, when imposing property rates, have to comply with the
provisions of the Ordinance as well as s 10G of the Transition Act?
[13] According to the appellant, the answer to this question is in the affirmative.
The appellant contended that s 10G of the Transition Act co-existed with the
Ordinance until 2 July 2005, when the Rates Act came into effect. Therefore, so
the argument went, for the 2004/2005 financial year, both the Transition Act and
the Ordinance applied to the levying of property rates and a municipality, in order
to validly impose property rates, had to comply with the provisions of both pieces
of legislation.

[14] In order to correctly answer this question it is necessary to consider the
legislative purpose of the Transition Act and the broader context within which it
was enacted. In Liebenberg NO & Others v Bergrivier Municipality,7 the
Constitutional Court found that the legislative scheme was „directed at ensuring a
facilitated rating mechanism for municipalities until uniform and consistent rating
systems have been put into place‟8 by the Local Government: Municipal Property
Rates Act 6 of 2004 (the Rates Act), and that one of the broader objectives for the
legislative scheme was to „help, rather than hinder, the ability of municipalities
finally to come into line with the Rates Act‟.9 In City of Cape Town & another v
Robertson & another,10 the Constitutional Court held (para 41) that the primary
purpose of s 10G was „to ensure that every municipality conduct[ed] its financial
affairs in an effective, economical and efficient manner, with a view to optimising
the use of its resources in addressing the needs of the community‟.

[15] Howick District Landowners Association v uMngeni Municipality11 and CDA
Boerdery (Edms) Bpk  v Nelson Mandela Metropolitan Municipality12 are pertinent
to the question to be decided in this matter. In Howick, the appellant, representing
landowners whose land had previously fallen outside any municipality and who

7 Liebenberg NO & others v Bergrivier Municipality  [2013] ZACC 16; 2013 (5) SA 246 (CC).
8 Liebenberg para 44.
9 Liebenberg para 50.
10 City of Cape Town & another v Robertson & another  [2004] ZACC 21; 2005 (2) SA 323 (CC).
11 Howick District Landowners Association v uMngeni Municipality & others [2006] ZASCA 53;
2007 (1) SA 206 (SCA).
12 CDA Boerdery (Edms) Bpk & others v Nelson Mandela Metropolitan Municipality & others [2007]
ZASCA 1; 2007 (4) SA 276 (SCA).

had not been required to pay rates, had applied to declare a rates assessment
invalid. Historically, municipalities in KwaZulu-Natal derived their rating powers
from the Local Authorities Ordinance 25 of 1974 (the Natal Ordinance). The
landowners contended, inter alia, that the valuation roll was invalid for want of
compliance with certain time periods contained in the Natal Ordinance. Cameron
JA held that the provisions of the Natal Ordinance were not applicable to the
levying of rates as the council had invoked a power to impose rates derived from
the Transition Act. The learned judge described such power as „self-standing‟ and
added:
‟
. . .  Since the power in question does not derive from the [Natal] Ordinance, I am
of the view that the council, in exercising it, is not obliged to follow the prescripts of the
[Natal] Ordinance, which have no application to the newly rateable properties. It follows, in
my view, that the time periods prescribed in the [Natal] Ordinance were applicable only to
rates assessments of properties falling within a borough as defined “within the operation”
of the Ordinance, and that where the council relied on the powers conferred on it under
the LGTA [Transition Act] to rate newly rateable properties, the Ordinance did not apply.‟13

[16] The main issue in CDA Boerdery, according to Cameron JA, who wrote for
the majority, was whether a requirement in a Provincial Ordinance, which obliged
the municipality to obtain the Premier‟s approval for a decision to levy rates
exceeding two cents in the rand remained valid. He rightly said that this provision
„was embedded in a dispensation fundamentally different in the position and
powers it accorded local authorities has survived the constitutional transition‟.14
Cameron JA found that the provision was impliedly repealed:
„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 the properties “subject to any
other law”. 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 freestanding 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

13 Howick paras 30, 31 and 33.
14 CDA Boerdery para 41.

conclusion that that portion of the ordinance was impliedly repealed when the
constitutional order was established.‟15 (Footnotes omitted. My emphasis.)

[17] The Constitutional Court in Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd
adopted an approach consonant with that of Cameron JA in CDA Boerdery when it
stated that the enhanced status of local government structures „necessarily
includes the competence and capacity on the part of municipalities to administer
land falling within their areas of jurisdiction without executive oversight.‟16

[18] During the transition, the source of a municipality‟s rating power was s 10G
of the Transition Act. Both this court and the Constitutional Court have confirmed
that a municipality‟s power to levy rates was „derived from and exercised‟ in terms
of section 10G(7), which was national legislation, as envisaged by section
229(2)(b) of the Constitution.17 A municipality‟s delegated rating power was
replaced by original and constitutionally entrenched rating power as reflected in
the Transitional Act.18 In Wary Holdings the Constitutional Court explained the
enhanced powers accorded to local government structures in the new
constitutional order:
„They are no longer the pre-constitutional creatures of statute confined to delegated or
subordinate legislation, but have mutated, subject to permissible constitutional constraints,
to inviolable entities with latitude to define and express their unique character, and derive
power direct from the Constitution or from legislation of a competent authority or from their
own laws.‟19 (Footnotes omitted.)

[19] As previously stated the rating power of a municipality has been described
by this court as „self-standing‟.20 In CDA Boerdery, Cameron characterised the
rating power of municipalities, under s 10G(7) as „a freestanding rate-levying

15 CDA Boerdery para 43.
16 Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd & another [2008] ZACC 12; 2009 (1) SA 337 (CC)
para 33.
17 Liebenberg (CC) para 41; Liebenberg (SCA) para 8; Howick para 30.
18 City of Cape Town & another v Robertson & another [2004] ZACC 21; (CC19/04) 2005 (2) SA
323 (CC) para 60; Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd  para 33; CDA Boerdery para 38.
Minister of Local Government, Western Cape v Lagoonbay Lifestyle Estate (Pty) Ltd & others
[2013] ZACC 39;  2014 (1) SA 521 (CC) para 24; Gerber & others v Member of the Executive
Council for Development Planning and Local Government, Gauteng & another [2002] ZASCA 128;
2003 (2) SA 344 (SCA) para 23.
19 Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd para 33.
20 Howick para 30.

competence‟.21  In a similar vein, the Constitutional Court in Liebenberg stated that
ss 10G(6) and (7) conferred „a freestanding rate-levying competence on
municipalities‟.22

[20] This „self-standing‟ or „freestanding‟ rate-levying competence can only
mean that a municipality could levy property rates in terms of the provisions of s
10G(7) without reliance on or reference to the Ordinance. Unlike s 10G(6),23 which
required that municipalities perform valuations „subject to any other law‟, the
exercise of rating power under s 10G(7) was not „subject to any other law‟. Old
order or pre-constitutional legislation continued in force subject to amendment or
repeal and consistency with the Constitution.24 Resort was had to the old order
Provincial Ordinances when necessary and in respect of matters not covered by
the Transition Act.

[21] The applicability of the old order Provincial Ordinances arose from s 10G(6)
of the Transition Act which dealt with valuations. Section 10G(6) provided that a
municipality should, subject to any other law, ensure that properties within its area
were valued or measured at intervals prescribed by law. It further provided that „all
procedures prescribed by law regarding the valuation or measurement of
properties‟ had to be complied with.25 Moseneke J in City of Cape Town v
Robertson,26 confirmed that the exercise of power in terms of s 10G(6) must be „in
accordance with procedures prescribed by any other applicable law‟. He went on
to express the view that „any other law‟ refers to „property valuation legislation

21 Para 43.
22 Para 42.
23 Section 10G(6) of the Transition Act provided:
„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.‟
24 See CDA Boerdery para 5.
25 CDA Boerdery para 14.
26 Robertson para 43.

applicable to the predecessors of the City at the time of its enactment‟.27 The
learned judge recognised that the power to levy property rates may be qualified
but noted that:
„The mere qualification, that the power to impose levies on property must be exercised
subject to the procedural and other prescripts of another law, does not render the power
ineffectual or nugatory. It simply provides for the power to be supplemented and regulated
by another compatible or complementary law.‟28

[22] The court a quo was thus wrong in finding that there were two sources of
rating power which existed side by side and that the municipality had a choice as
to which legislative option it could follow:
„It is in my view therefore clear that if a municipality complies with the relevant provisions
of the Transition Act, one cannot be heard to say that its action is unlawful or invalid if at
the same time it does not also comply with every prescript of the Rating Ordinance.‟29

[23] In reaching this conclusion the court a quo relied on the statement by the
Constitutional Court in Liebenberg, that „the old-order legislation in terms of which
municipalities could levy rates on property remained in force‟.30 But this sentence
was clearly obiter; this was not an issue the Constitutional Court was called upon
to decide. As the Constitutional Court had affirmed that the power to levy rates
arose from the Constitution itself and was embodied in s 10G(7) of the Transition
Act, it cannot have intended to say that there was an alternative source of such
power.  All it meant was that where the constitutional power needed to be
supplemented in order to be effective, the old provincial ordinances could be used
for this purpose.

[24] A municipality is not obliged to apply both national (the Transition Act) and
provincial legislation (the Ordinance). Unless specifically provided by legislation, or
if there is a lacuna in the Transition Act, a municipality is not required to have
regard to the Ordinance.31 In the circumstances, Kungwini, when exercising its
rating power under s 10G(7), was not obliged to comply with the provisions of the

27 Robertson para 44.
28 Robertson para 44.
29 Para 12.
30 Liebenberg para 43.
31 Byrom v uMngeni Municipality  2006 JDR 0442 (N).

Ordinance. The appellant does not contend that Kungwini was obliged to comply
with certain separate obligations in terms of the Ordinance not catered for in the
Transition Act, but rather that s 21(1) of the Ordinance (which provides that
property rates be levied for one financial year) by implication formed part of
s 10G(7)(a)(i). The appellant‟s contention that s 10G(7) and s 21(1) of the
Ordinance should be applied together, cannot be sustained.

Was Kungwini obliged to levy property rates annually?
[25] In terms of the Ordinance rates were required to be determined annually.
As has already been mentioned s 21(1) empowered a local authority to levy a
general rate on rateable property listed in the valuation roll for a financial year to
which the roll is applicable. The appellant contended that the intention was clear
that property rates and taxes would be determined each year and only be
applicable for one financial year and this remained unaltered in the new
dispensation. The appellant argued that s 10G(3)(a)(i) (which obliged a
municipality to annually approve a budget for, inter alia, operating income and
expenditure for the next financial year) must be read together with s 10G(7) and
this reinforced the conclusion that rates were fixed for one year only.

[26] In support of its argument, the appellant also referred to s 12 of the Rates
Act32  which provides that: (i) a municipality must levy a property tax rate for each
financial year and the rate lapses at the end of the financial year for which it was
levied; and (ii) the levying of rates must form part of the municipality‟s annual
budget process. Section 13 provides that rates become payable from the start of
the financial year or when the municipality‟s annual budget is approved. It was
argued that s 12(1) of the Rates Act continued the approach and position that
applied before it was promulgated.

32 Section 12 of the Rates Act provided:
„(1) When levying rates, a municipality must levy the rate for a financial year. A rate lapses at the
end of the financial year for which it was levied.
(2) The levying of rates must form part of a municipality‟s annual budget process as set out in
Chapter 4 of the Municipal Finance Management Act. A municipality must annually at the time of its
budget process review the amount in the Rand of its current rates in line with its annual budget for
the next financial year.
(3) A rate levied for a financial year may be increased during a financial year only as provided for in
section 28(6) of the Municipal Finance Management Act.‟ This section has since been amended.

[27] There is no indication in s 10G of the Transition Act that the fixing of
property rates had to form part of the municipality‟s budgetary process; that it had
to be determined yearly; or that property rates would come into operation at the
commencement of the new financial year, as argued by the appellant. The
obligatory process of approving the budget „on or before the date determined by
law‟ in terms of s 10G(3)(a) was materially different from s 10G(7)(a)(i) which
provides that a council may, by resolution, levy and recover property rates with no
indication as to when the municipality should pass such resolution. In terms of
s 10G(7)(c)(ii) a municipality was obliged to indicate in the relevant notice the date
on which the determination of the property rates would come into operation. This
implied that such determination would not necessarily come into effect on the first
day of the new financial year as does a budget.

[28] In any event, the interpretation contended for by the appellant requires
words to be read into s 10G(7). It suffices to say that this is not something that is
lightly done and then only to avoid absurdity. One can read words in but only in
rare instances.33 Effect can clearly be given to s 10G(7) without requiring that
property rates be levied as part of the municipality‟s budgetary process.

[29] Although municipalities were entitled, in terms of s 10G(7), to fix property
rates separately for each financial year (which happened in many instances),
s 10G(7) did not oblige municipalities to do so and did not provide that any
property rates which had been levied during a specific financial year automatically
lapsed at the end of such financial year. The meaning of s 10G(7) is apparent and
does not produce any absurdity, repugnancy or inconsistency.

[30] There is no corresponding provision in the Transition Act to s 12 of the
Rates Act. The Systems Act, the Local Government: Municipal Finance
Management Act 56 of 2003 (Finance Act), and the Rates Act are the national
legislation envisaged in s 229(2)(b) of the Constitution and they govern the new
system of local government.34 In terms of the Finance Act, the financial year of
municipalities commences on 1 July of each year and ends on 30 June the

33 Barkett v SA National Trust & Assurance Co Ltd 1951 (2) SA 353 (A) at 363 A-F.
34 The Preamble to the Systems Act reads, in relevant part: „Whereas this Act is an integral
part of a suite of legislation that gives effect to the new system of local government‟.

following year.35 The council of a municipality must approve an annual budget for
each financial year before the start of the financial year.36 When an annual budget
is tabled it must be accompanied by, among other documents, draft resolutions
approving the budget of the municipality and imposing any municipal tax and
setting any municipal tariffs as may be required for the financial year.37 It is clear
from these provisions that the budget must contain information about anticipated
revenue from rates. As already mentioned, s 12(2) of the Rates Act provides that
the levying of rates must form part of a municipality‟s annual budget process. In
terms of the new constitutional dispensation, the levying of rates is an integral part
of the budget process.38 During the transitional phase there was no budgetary
process as provided in the Finance Act and the two processes, namely, setting the
annual budget and the fixing of rates, were not inter-related.

[31] It was common cause that Kungwini‟s various attempts to increase property
rates in the Bronberg area during the period 1 April 2003 and 30 June 2005 were
unsuccessful. In Kungwini Local Municipality v Silver Lakes Homeowners
Association,39 this court confirmed the order of the high court setting aside the rate
increases as from 1 August 2004. This court did not find that the rates
promulgated by Kungwini for that year were invalid, as contended by the appellant.

[32] For these reasons, the inescapable conclusion is that a municipality, acting
in terms of s 10G(7), was not obliged to impose property rates annually and the
levied rate  did not lapse at the end of a financial year but continued to apply until
changed. In this matter, the rate of 0,02 cents in the rand applied until changed.

[33] The appeal is dismissed with costs.
____________________
L V Theron
Judge of Appeal

35 See the definition of „financial year‟ in the Finance Act.
36 Section 16(1) of the Finance Act.
37 Section 17(3)(a) of the Finance Act.
38 South African Property Owners Association v Johannesburg Metropolitan Municipality &
others [2012] ZASCA 157; 2013 (1) SA 420 (SCA) para 32.
39 Kungwini Local Municipality v Silver Lakes Home Owners Association & another [2008]
ZASCA 83; 2008 (6) SA 187 (SCA).

APPEARANCES
For Appellant:

R Du Plessis SC (with J Stone)
Instructed by:
Len Dekker & Associates, Pretoria
Rosendorff Reitz Barry, Bloemfontein

For Respondent:

H F Oosthuizen (with J A Motepe)

Instructed by:

De Swardt Vögel Mayambo, Pretoria
Symington De Kok, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
30 November 2015
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.

Uniqon Wonings (Pty) Ltd v City of Tshwane Metropolitan Municipality
(20789/2014) [2014] ZASCA 182 (30 November 2015)

Today the Supreme Court of Appeal (SCA) dismissed an appeal by Uniqon Wonings.

This is an appeal from the Gauteng Division of the High Court, Pretoria (Fabricius J.)

The primary question to be determined in this appeal is whether a municipality was obliged, in terms
of s 10G(7)(a)(i) of the Local Government Transition Act 209 of 1993 (the Transition Act), to
determine property rates annually and whether such rates automatically lapsed at the end of the
financial year during which it was levied.

The appellant, Uniqon Wonings (Pty) Ltd, a property developer, bought and developed farmland
into a residential estate, Six Fountains Residential Estate. The respondent is the City of Tshwane
Metropolitan Municipality, a Metropolitan Municipality created in terms of the Local Government:
Municipal Structures Act 117 of 1998 (Structures Act). The residential estate is situated within the
jurisdiction of what used to be the Kungwini Local Municipality (Kungwini) which has since been
disestablished and and incorporated into the City of Tshwane Metropolitan Municipality.

Prior to the comprehensive restructuring of Local Government, the Bronberg area did not form part
of the area of jurisdiction of any municipality and the owners of property in this area were not
required to pay property rates.   Kungwini commenced with the preparation of a valuation roll which
was applicable from July 2002 in terms of s 10G(6) of the Transition Act. The valuation process and
roll was finalised during February 2003. The first time that Kungwini levied property rates in the
Bronberg area was pursuant to Local Authority Notice 4/2003 dated 19 February 2003 (the notice).
The notice was not linked to a financial year and did not have any specified end time frame of
operation. In terms of the notice, assessment rate tariffs of 0,02 cents per rand value as per the
valuation roll were levied from 1 April 2003. The notice was given in terms of s 10G(7) of the
Transition Act read with s 26(2) of the Local Authorities Rating Ordinance 11 of 1977 (the
Ordinance). The notice was not challenged or set aside by a court. Kungwini published various
other notices which, save for the one next mentioned, are not relevant to this dispute. On 28 July
2004, it published a notice in terms of which the assessment tariff was increased to 0,054 cents in
the rand for the Bronberg area.

This court confirmed an order of the provincial division Kungwini Local Municipality & another v
Silver Lakes Homeowners Association & others (T) (unreported case no 3908/2005 (29 June
2006)), which held that the increase in property rates for Kungwini’s 2004/2005 financial year to
0,054 cents in the rand was invalid.

The appellant instituted action against the respondent, in which it claimed repayment of R788 282
paid to the respondent in respect of property rates for the 2004/2005 financial year, on the basis
that such payment was not owing and was made without lawful cause.  It alleged that the increased
property rates were set aside and no effective rate was payable for the 2004/2005 financial year.

The SCA stated that during the transition, the source of a municipality’s rating power was s 10G of
the Transition Act. Both this court and the Constitutional Court have confirmed that a municipality’s
power to levy rates was ‘derived from and exercised’ in terms of section 10G(7), which was national
legislation, as envisaged by section 229(2)(b) of the Constitution.  A municipality’s delegated rating
power was replaced by original and constitutionally entrenched rating power as reflected in the
Transitional Act.

The court held that a municipality had a ‘self-standing’ or ‘freestanding’ rate-levying competence
which meant that it could levy property rates in terms of the provisions of s 10G(7) without reliance
on or reference to the Ordinance. Unlike s 10G(6),  which required that municipalities perform
valuations ‘subject to any other law’, the exercise of rating power under s 10G(7) was not ‘subject to

any other law’. Old order or pre-constitutional legislation continued in force subject to amendment or
repeal and consistency with the Constitution.  Resort was had to the old order Provincial
Ordinances when necessary and in respect of matters not covered by the Transition Act.

Court further held that a municipality is not obliged to apply both national (the Transition Act) and
provincial legislation (the Ordinance). Unless specifically provided by legislation, or if there is a
lacuna in the Transition Act, a municipality is not required to have regard to the Ordinance.  In the
circumstances, Kungwini, when exercising its rating power under s 10G(7), was not obliged to
comply with the provisions of the Ordinance.

The court found that although municipalities were entitled, in terms of s 10G(7), to fix property rates
separately for each financial year (which happened in many instances), s 10G(7) did not oblige
municipalities to do so and did not provide that any property rates which had been levied during a
specific financial year automatically lapsed at the end of such financial year.