THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

REPORTABLE
Case number:  168/2003

In the matter between:

MSUNDUZI MUNICIPALITY

APPELLANT

and

MEMBER OF THE EXECUTIVE
COUNCIL OF KWAZULU-NATAL
PROVINCE FOR HOUSING

FIRST RESPONDENT

REGISTRAR OF DEEDS KWAZULU-
NATAL

SECOND RESPONDENT

CORAM:

MPATI DP, ZULMAN, BRAND, HEHER JJA and
JONES AJA
HEARD:

5 MARCH 2004
DELIVERED:

23 MARCH 2004

Summary:  Section 3(3)(a) of Act 79 of 1984 – exemption from municipal rates –
State property held in trust– meaning of – whether first respondent succeeded the
South African Development Trust as trustee in respect of property concerned and is
thus exempted from rates.
________________________________

JUDGMENT
_________________________________
BRAND JA/

BRAND JA :
[1] The Premier of the KwaZulu-Natal Province is the registered owner
of an immovable property situated within the municipal jurisdiction of the
appellant (the 'Municipality').  The first respondent ('the MEC') is
responsible for the administration of the property, and, more particularly,
for its development to provide housing for low-income residents of the
Province. This appeal has its origin in a contention by the MEC that the
property is exempt from rates levied by the Municipality by virtue of the
provisions of s 3(3)(a) of the Rating of State Property Act 79 of 1984.
The Municipality did not agree with this contention. Consequently, the
MEC brought an application in the Natal Provincial Division for an order
effectively declaring that his contention be upheld. He cited the
Municipality as a respondent in the application together with the
Registrar of Deeds, KwaZulu-Natal, who is the second respondent in
these proceedings. Though the Registrar of Deeds did not oppose the
application, the Municipality did. Notwithstanding such opposition the
court a quo (Pillay J) granted the declaratory order sought. His judgment
has since been reported as MEC for KwaZulu-Natal Province for
Housing v Msunduzi Municipality [2003] 1 All SA 580 (N). The
Municipality's appeal against that judgment is with the leave of the Court

a quo.

[2] The Rating of State Property Act commenced on 1 July 1988. It
repealed various laws which formerly exempted State property from
rates levied by local authorities. Accordingly, s 3(1) declares all State
property susceptible to such rating (subject to the discounts provided for
in terms of s 4), unless specifically exempted by ministerial notice in the
Government Gazette. To this general declaration of rateability various
exceptions are created in terms of s 3(3). The exception relied upon by
the MEC is the one provided for in subsec 3(a). It reads:
'(3) No rates shall by virtue of subsection (1) or otherwise be levied by a local
authority on the value of State property – (a) held by the State in trust for the
inhabitants of the area of jurisdiction of a local authority or a local authority to be
established.'

[3] The property under consideration is undoubtedly 'State property' as
defined in the Act. As to why it is 'held in trust', as envisaged by s 3(3)(a),
the MEC's contentions were, broadly stated, as follows:
(a)
the property was formerly held in trust by the South African
Development Trust ('the SADT'), which was established in terms of s 4 of
the Development Trust and Land Act 18 of 1936 ('the 1936 Act'), for the
benefit of the Black people of South Africa;

(b)
although the SADT has since been abolished in terms of the
Abolition of Racially Based Land Measures Act 108 of 1991 ('the
Abolition Act'), there is nothing in the Abolition Act or in the various
legislative enactments following upon the demise of the SADT which
caused the property to change its status as trust property;
(c)
that, consequently, he succeeded the SADT as trustee in respect
of the property, and he is giving effect to that trusteeship by developing
the property to provide housing for the homeless and the poor
inhabitants of the area, who are, essentially, the same beneficiaries as
those envisaged by the 1936 Act.

[4] The Municipality, on the other hand, though conceding that the
property was formerly held in trust by the SADT, denied that the notion of
trusteeship survived the abolition of the SADT and, consequently, that
the property can be regarded as being held in trust within the meaning of
subsec 3(3)(a) of the Rating of State Property Act.

[5] The court a quo preferred the MEC's contentions to those
advanced by the Municipality. The evaluation of that preference requires
an examination of the somewhat intricate evolvement of transitional
legislation, affecting the property, since 1992, when the SADT was

abolished, until 1999, when the property eventually came to be
registered in the name of the Premier of the KwaZulu-Natal Province and
also became incorporated into the valuation roll of the Municipality.

[6] Until 1992 the property was registered in the name of the SADT, by
virtue of s 6 of the 1936 Act, to be administered, in terms of s 4(2) of that
Act, 'for the settlement, support, benefit and material and moral welfare
of the Black people of the Republic', as defined with reference to the
Population Registration Act 30 of 1950. In terms of s 18, all land vested
in the SADT was held for the exclusive use and benefit of Blacks. It could
only be sold or let to Black people. If the SADT wished to dispose of the
land to someone who belonged to another racial group, it required
consent to the transaction by both Houses of Parliament. While the
property was registered in the name of the SADT, it did not fall within the
area of any municipality. Instead, it was administered in accordance with
the provisions of Proclamation R163 of 1974 ('the 1974 Proclamation')
which was issued by the then State President in terms of s 30(6) of the
Black Administration Act 38 of 1927. The latter Act was, like the 1936 Act
and the Population Registration Act, one of the mainstays of the
apartheid structure. It entitled the Governor-General and, subsequently,
his successor, the State President, to establish what were referred to as

'black towns'. The 1974 Proclamation essentially provided for the
administration of the area in which the property is situated through a
system of managers and superintendents. Pertinent for present purposes
is para 40 of the 1974 Proclamation. It conferred the power on the
Minister of Bantu Administration and Development, as surrogate local
authority, to impose rates and taxes on property owners in the area, with
the proviso in para 40(7)(a) that 'land which belongs to the Trust, the
State and the South African Railways' would be exempted from such
rates and taxes. According to the definition section of the Proclamation
the term 'Trust' referred to the SADT.

[7] I now turn to the provisions of the Abolition Act which eventually led
to the repeal of the 1936 Act and the termination of the SADT as an
institution. In accordance with the preamble of the Abolition Act, its
stated objects were, inter alia:
'to repeal … certain laws so as to abolish certain restrictions based on race or
membership of a specific population group on the acquisition and utilization of rights
to land',
and
'to provide for the … phasing out of certain racially based institutions and statutory
and regulatory systems'.

Not surprisingly, the 'institution' and the 'measures' created under the
Black Administration Act and by the 1936 Act were among the very first
earmarked to be dismantled in terms of the Abolition Act.  Parliament
obviously realised, however, that the dismantling process would take
some time. Consequently, s 12(1) made it possible for the repeal of
certain sections of the 1936 Act to take effect on different dates
determined by the State President by way of proclamation in the
Government Gazette. Section 12(2) specifically provided that the State
President could, in order to bring about the phasing out of the SADT, by
proclamation in the Government Gazette –
'(a)
transfer any assets (including land) or right acquired and any liability or
obligation incurred by the Trust to an Administrator, a Minister or the State … and the
Administrator, Minister or State shall after such transfer be deemed to have acquired
the asset or right or to have incurred the liability or obligation'.
According to s 12(3):
'Any transfer or assignment referred to in subsection (2) shall be subject to any term,
condition, restriction or direction of the State President as specified in the relevant
proclamation.'

[8] In accordance with Parliament's contemplation in s 12 of the
Abolition Act, the State President issued three proclamations,
Proclamation R26, R27 and R28 of 1992, that were published

simultaneously in the Government Gazette of 31 March 1992, all with
effect from 1 April 1992. In terms of para 2 of Proclamation R28, the
State President repealed all the sections of the 1936 Act that were still in
force, including ss 4 and 18. In para 1(e) of the same proclamation he
transferred the property under consideration to the Minister of Regional
and Land Affairs, on the stated condition that it would be held by him
'subject to any existing right, charge or obligation on or over such land'.
Para 1(h)(ii) expressly provided that 'land … transferred in terms of the
provisions of this Proclamation … shall be deemed to vest in the State
and to be State property…'.

[9] The 1974 Proclamation was not repealed in 1992. On the contrary,
Proclamation R26 (schedule 1 part 3 para 2) designated the then
Administrator of Natal as the authority responsible to administer the area
which included the property concerned, in accordance with the
provisions of the 1974 Proclamation. At the same time, Proclamation
R26 (schedule 3 para E) provided for the amendment of the 1974
Proclamation in certain respects. Of relevance for present purposes are
the amendments (in paras E1 and E5) which brought about the deletion,
firstly, of the definition of the term 'Trust' in para 1 and, secondly, of the
reference to 'the Trust' in para 40(7) of the 1974 Proclamation. It will be

remembered that para 1 of the 1974 Proclamation defined the term
'Trust' as a reference to the SADT while para 40(7) rendered both 'State
property' and 'Trust property', ie SADT property, free from any rates and
taxes imposed by the Minister of Bantu Administration and Development,
as surrogate local authority. The reason for the amendment occasioned
by para E of Proclamation R26 is fairly clear. Since Proclamation R28,
which was published in the same issue of the Government Gazette,
announced the final demise of the SADT, any reference to property
'which belongs to the SADT' would no longer have any meaning. As far
as the exemption from rates and taxes was concerned, the amendment
was, however, purely cosmetic. The amended para 40(7) still rendered
'property which belongs to the State' free from rates and taxes imposed
by the Administrator of Natal as the new surrogate local authority. Since
all properties formerly held by the SADT now became State property, by
virtue of Proclamation R28, they still enjoyed the same immunity from
rates and taxes, but now in the different category of State property.

[10] The 1974 Proclamation, as amended, was eventually repealed in
terms of s 15(4)(a) of the Local Government Transition Act 209 of 1993.
Proclamation LG73 of 1995, issued under that Act, determined that the
property under consideration was to be incorporated into the area of the

Pietermaritzburg-Msunduzi Transitional Local Council, which was the
predecessor of the Municipality. In the interim, liability for rates was
governed by para 12(3) of Proclamation LG 73 of 1995 which provided
that:
'The systems of rating in operation within the area of jurisdiction of the Transitional
Council at the date of effect of this Proclamation [ie 10 February 1995], including any
existing valuations of immovable property and any exemptions from rates, shall …
continue in operation in such areas until such systems and valuations have been
replaced by a system of rating and a valuation roll adopted and prepared for the area
of the Transitional Council as a whole.'
It appears to be common cause that, since no 'system of rating' was in
operation in respect of the property concerned on 10 February 1995, its
immunity from rates was extended, by virtue of the transitional provisions
in para 12(3), until 1 July 1999, when it came to be incorporated into the
valuation roll of the Municipality. Whether the property continues to enjoy
that immunity subsequent to 1 July 1999, is wholly dependent on the
validity of the MEC's contention that it should be regarded as being 'held
in trust' within the meaning of s 3(3)(a) of the Rating of State Property
Act.  If the contention is invalid, the property is susceptible to rates
imposed by the Municipality.

[11] Before considering that crucial issue, it is necessary first to revert
to the facts. As stated in para 7 above, ownership of the property
concerned was transferred from the SADT to the Minister of Regional
and Land Affairs in terms of para 1(e) of Proclamation R28. It appears,
however, that the Minister did not manage the property through his own
department. In 1994 and in 1997, he issued two General Powers of
Attorney designating, first, the then Natal Provincial Administration and,
subsequently, the Department of Housing of the KwaZulu-Natal
Provincial Government under the control of the MEC, as the authority
responsible for the management and development of the property. Since
the General Power of Attorney issued in 1997 appears, for present
purposes, to have superseded the earlier one, I will, for the sake of
convenience, refer to the 1997 document as 'the General Power of
Attorney'. In terms of the General Power of Attorney the delegation of
authority to the Department of the MEC was made subject to the
condition that the property be developed, primarily, for housing projects
which would benefit the homeless residents of the province.

[12] According to the MEC's founding affidavit, the property is utilised in
accordance with the condition imposed by the Minister in the General
Power of Attorney. At present, so the MEC explained, there is a

substantial backlog for low-income housing in the KwaZulu-Natal
Province. The total number of housing units that will become available
through the housing projects on the property, is approximately 8 000
which will accommodate approximately 32 000 beneficiaries.

[13] The reason why the property was transferred to the Premier of the
KwaZulu-Natal Province in 1999, so the MEC explained, was to facilitate
the registration of developed erven on the property in the names of
formerly homeless people for whose benefit the development was taking
place. However, the MEC stated, if the Municipality was entitled to the
substantial rates levied on the property, continuation of the current
housing projects would not be feasible. Moreover, he proceeded, it would
also be impossible to transfer the individual housing units to the
beneficiaries, since the applicable provincial legislation requires a
certificate to the effect that municipal rates had been paid before any
transfer can be effected.

[14] In the answering affidavits filed on behalf of the Municipality, it was
denied that the whole of the property will be utilised for housing
purposes. Some parts of the property, so it was stated, will be used by
the State for other purposes such as schools and public buildings while

other parts will be utilised for commercial and community facilities. In an
attempt to meet this objection, the MEC amended his notice of motion by
excluding 'components of the property used by an organ of State for any
purpose other than housing' from the ambit of the declaratory order
sought. In the event, the exclusion brought about by the amendment was
incorporated as a proviso to the declaratory order granted by the court a
quo.

[15] From the judgment of the court a quo, it appears that its decision in
favour of the MEC is substantially based on the following five
propositions. (For the sake of convenience, the relevant pages of the
court's reported judgment are referred to in parenthesis):
(a)
The stated objective of the 1936 Act (whatever its underlying
motive and political philosophy may have been) was that the land be
held by the SADT in trust and 'administered for the settlement, support,
benefit and material and moral welfare of the Blacks of the Republic' (s
4(2)). The intention of the legislature in abolishing the SADT was to do
away with a racially based institution and not to deprive the beneficiaries
of the trust of existing rights which had accrued to them under the 1936
Act. Consequently, the MEC, as the successor to the SADT, is holding
the land in trust for the inhabitants of the area (590g-591g).

(b)
In terms of para 1(e) of Proclamation R28 of 1992 the property was
transferred by the State President to the successor in title of the SADT
'subject to any existing rights, charge or obligation'. While the use of the
words 'charge or obligation' evinces the intention that the successor in
title should continue to hold the property in trust, the reference to 'rights'
must be understood to perpetuate the exemption from payment of rates
enjoyed by the SADT (591g-592b).
(c)
Further support for the conclusion that the beneficiaries under the
trust created by the 1936 Act did not lose their rights when that Act was
repealed, is to be found in the provisions of s 12(2)(c) of the
Interpretation Act 33 of 1957 (592b-c).
(d)
The General Power of Attorney issued by the Minister of Regional
and Land Affairs, despite not creating a trust in itself, carried through the
obligations of the SADT to administer the property 'for the settlement,
support, benefit and material and moral welfare' of the inhabitants of the
area (592b-d).
(e)
In so far as there is ambiguity and uncertainty about the meaning
of s 3(3)(a) of the Rating of State Property, such ambiguity can be
resolved by invoking the provisions of ss 26, 39(2) and 229 of the
Constitution of the Republic of South Africa, Act 108 of 1996. A proper

consideration of these provisions also favours the conclusion that the
property under consideration is being 'held in trust' as envisaged by s
3(3)(a) (592d-594b).

[16] I shall consider each of these five propositions in turn.  The first
proposition (referred to under (a) in para 15 above) departs from the
premise that the SADT as an institution can be divorced from the regime
of trusteeship in which it played the role of trustee. Though both the
institution and the regime were racially based, so the reasoning goes, the
legislature must be understood to have intended in 1991, when it
adopted the Abolition Act, that, in spite of the fact that the institution was
to be abolished, the regime must remain. I cannot agree with this line of
reasoning. The regime was as racially based as the institution and
common sense dictates that the legislature's intention must have been to
do away with both. In so far as this common sense approach needs any
reinforcement, it is provided by the preamble to the Abolition Act which
declares its central objective to be, not only the abolition of racially based
institutions, but also of racially based 'statutory and regulatory systems'.
Confirmation that the trusteeship regime could not survive the
transformation to the non-racist system contemplated by the Abolition
Act, is that both the court a quo in its judgment and counsel for the MEC

in argument in this court were compelled to transpose the benefits of the
trust from the racist concept of 'Black people' to the non-racist
'inhabitants of the area'. The conclusion is therefore unavoidable that the
trust could only survive the abolition of the 1936 Act if both the trustee
and the beneficiaries of the trust had been replaced by different people.
Moreover, the very terms and conditions which governed the trusteeship
of the SADT were embodied in those sections of the 1936 Act, such as
s 18, that were finally abolished by Proclamation R28. It follows that any
'trust' which survived the abolition of the SADT cannot be one governed
by the extinct provisions of the 1936 Act. It must be a different trust with
a different trustee, different beneficiaries and different governing
provisions. The whole tenor of the court a quo's reasoning, that the MEC
succeeded the SADT as trustee of essentially the same trust, is therefore
untenable. That much was conceded by counsel for the MEC during
argument in this court.

[17] The concession on behalf of the MEC that the 'trust' which forms
the keystone of his case must be a new trust, immediately gave rise to
the question as to when and how this new trust came into existence,
particularly since there is no reference to a 'trust' in any of the transitional
enactments which followed upon the abolition of the SADT. To this

question counsel for the MEC could give no defensible answer and I am
also unable to think of one. Furthermore, since the governing provisions
of the SADT had been repealed, the question arises: what are the
governing provisions of this new trust? In short, what is the MEC as
trustee allowed to do with the trust property? On the MEC's papers, the
answer to this question, which found favour with the court a quo, is that
the MEC is bound by the terms of the trust to utilise the property for the
provision of housing for the homeless and the poor. The problem with
this answer is that, as a fact, some parts of the property are utilised for
other purposes which also happen to be for the benefit of the same
people, but not for housing. It will be remembered that these parts of the
property were excluded from the ambit of the court a quo's order. This
exclusion entails the suggestion, however, that those parts of the
property are no longer held in trust and, consequently that a part of the
property can change its trust character depending on the purpose for
which it is utilised. The result would also be that, in so far as the MEC
has allowed parts of the property to be utilised for other purposes, he has
acted in breach of the conditions of the trust. Since these suggestions
are clearly indefensible, counsel for the MEC was bound to concede that
the distinction drawn between those parts of the property utilised for

housing purposes and those which are not, cannot be sustained. As a
consequence, his further submission was that the MEC is enjoined by
the terms of the trust to utilise the property, not only for housing, but for
the benefit of the people in the area. I think it can be accepted as a
statement of general validity that the MEC is obliged to utilise the
property for that purpose. This does not justify the conclusion, however,
that such obligation was imposed upon the MEC by the provisions of any
trust. It is a governmental obligation which stems from the relationship
between government and its subjects and not from the fiduciary duties of
a trustee (see eg Kinloch v Secretary of State for India in Council (1882)
7 App Cas 619 (HL); Tito & others v Waddell and others (No 2) Tito and
others v Attorney General [1977] 2 All ER 129 (Ch D) 237). If State
property is to be regarded as being held in trust within the meaning of s
3(3)(a) of the Rating of State Property Act solely because the
responsible functionary of State is obliged to utilise the property for the
benefit  of the public, very few State properties will fall outside the ambit
of the section.

[18] This brings me to the second proposition (referred to under (b) in
para 15 above), which relies on the condition imposed by the State
President in para 1(e) of Proclamation R28, that the transfer of the

property from the SADT to the Minister of Regional and Land Affairs was
'subject to any existing right, charge or obligation on or over such land'.
What is significant in my view, is that the State President did not
expressly provide for the continuation of the trust, particularly, since such
a provision would not be an unfamiliar one. It had been used by the
legislature on previous occasions. So, for example, ss 13(1)(b) and 36(3)
of the Self-Governing Territories Constitution Act 21 of 1971 rendered
the transfer of property contemplated in that Act 'subject to any existing
charge, obligation or trust on or over such property' (my emphasis). (Cf
President of the Republic of Bophuthatswana and another v Millsell
Chrome Mines (Pty) Ltd and others 1996 (3) SA 831 (B).) As I have
indicated, the court a quo found that, notwithstanding the absence of any
express reference to 'trust' in para 1(e), the expression 'charge and
obligation' is wide enough to include the obligations of the SADT as
trustee. In support of that finding, counsel for the MEC devoted a
substantial part of his argument in this court to the various possible
meanings which the expression 'charge or obligation' could entail. I find it
unnecessary, however, to embark upon the same investigation. For
present purposes it is, in my view, sufficient to say that I do not agree
with the court a quo's finding that the reference to a 'charge or obligation

over the land' was meant to include the SADT's obligations as trustee. It
should be borne in mind that the SADT's obligations as trustee were
imposed upon it by those provisions of the 1936 Act that were expressly
repealed in para 2 of Proclamation R28. An argument which leads to the
conclusion that the State President must have intended to reintroduce
those very same obligations that he had just repealed by implication and
through the backdoor of para 1(e) can, in my view, not be sustained.
Furthermore, as I have indicated, the SADT's obligations as trustee were
of the very racially based kind that the legislature sought to abolish in
terms of the Abolition Act.

[19] The further argument which found favour with the court a quo, was
that the 'rights' preserved in para 1(e) of Proclamation R28, must have
included the SADT's immunity from rates and taxes. This argument
bears no relation to the facts. Immediately prior to Proclamation R28 the
SADT enjoyed its immunity from rates by virtue of para 40(7) of the 1974
Proclamation. Though para 40(7) was amended by Proclamation R26,
the Minister who succeeded the SADT as owner of the property
continued to enjoy the same immunity, because the property became
State land which remained exempted from rates despite the amendment
to para 40(7) of the 1974 Proclamation. There was therefore no need for

the State President to perpetuate the immunity from rates  previously
enjoyed by the SADT by means of an obscure reference to 'rights' in
para 1(e) of Proclamation R28.

[20] As to the third proposition (referred to under (c) in para 15 above)
which relies on the General Power of Attorney issued by the Minister, it
was recognised by the court a quo that the General Power of Attorney in
itself does not provide, either expressly or by implication, for the creation
of a trust. The true import of the proposition under consideration is
therefore that, because the General Power of Attorney enjoined the MEC
to utilise the property to provide housing for homeless people, it
confirmed the terms and conditions of the trusteeship which the MEC
inherited from the SADT. The answer to this proposition, which flows
from what has already been said, is that since the MEC did not inherit
any trusteeship from the SADT, the obligations imposed by the General
Power of Attorney do not support the inference of any trusteeship at all.

[21] The fourth proposition (referred to under (d) in para 15 above) is
reliant on s 12(2)(c) of the Interpretation Act 33 of 1957 which provides
that:
'12(2) Where a law repeals any other law, then unless the contrary intention appears,

the repeal shall not:
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under
any law so repealed'.
The answer to the proposition that this section is supportive of the MEC's
case is that the operative part of the section is based on the supposition
that the contrary intention does not appear from the repealing legislation.
Once it is recognised that the legislature's intention, in promulgating the
Abolition Act, must have been that the trusteeship of the SADT, together
with the rights and obligations associated with that trusteeship, would not
survive the repeal of the 1936 Act, it becomes apparent that s 12(2)(c) of
the Interpretation Act is of no assistance at all.

[22] The final proposition (referred to under (e) in para 15 above)
presupposes that the dispute between the parties has its origin in some
ambiguity or uncertainty in the provisions of s 3(3)(a) of the Rating of
State Property Act. I do not believe that this is so. The question whether
the property concerned can be said to be held 'in trust' as contemplated
by s 3(3)(a), does not result from any ambiguity in the section itself. It
arises from conflicting contentions regarding the effect of the various
transitional enactments concerned. However, be that as it may, the
essence of the proposition under consideration is that such ambiguity

can be resolved by reference to ss 26, 39(2) and 229 of the Constitution.

[23] Section 39(2) enjoins the court, 'when interpreting any legislation
… [to] promote the spirit, purport and objects of the Bill of Rights'.
However, the only provisions of the Bill of Rights put forward for possible
assistance, were those contained in s 26. In terms of s 26(1), 'everyone
has the right to have access to adequate housing', while s 26(2) provides
that 'the State must take reasonable legislative and other measures,
within its available resources, to achieve the progressive realisation of
this right'. The reasoning based on these provisions seems to be that,
since the property is developed for low-income housing, it should be
exempted from municipal rates. However, for the reasons that I have
already stated, the suggestion that those parts of the property which are
utilised for housing purposes are held in trust while the rest of the
property is not, cannot be sustained. It follows that the question whether
the property should be regarded as being 'held in trust' within the
meaning of s 3(3)(a) of the Rating of State Property Act cannot be
dependent on the purpose for which it is being used. Once this is
appreciated, it becomes apparent that the provisions of s 26 do not
assist.

[24] Lastly, the court a quo found assistance in s 229 of the
Constitution, which provides, inter alia, that 'the power of a municipality
to impose rates on property … may not be exercised in a way that
materially and unreasonably prejudices national mobility of goods,
services or labour'. Since the issue in this matter does not relate to the
way in which the Municipality exercised its power to levy rates, but to
whether it had the power to levy such rates at all, it is not clear what
assistance can be derived from s 229. In so far as it is determinable from
the court a quo's judgment (at 593-594b) its reasoning seems to be that,
because the development of low-income housing is a national goal and
priority, the MEC should not be prejudiced in his efforts to give effect to
this priority by compelling him to pay rates on the property.

[25] However, the function to decide whether the exemption of the
property from rates will be in conflict with national priority is one which
falls outside the province of the court. The court's function is to give
meaning to s 3(3)(a) of the Rating of State Property Act. If that meaning
is considered by the executive to be in conflict with national priority, the
property can be exempted from rates by publication of a ministerial
notice to that effect provided for in s 3(1) of the Act. This result cannot be
attained through implying a trust where none exists.

[26] It remains to be noted, with regard to the matter of costs, that while
the Municipality was represented by two counsel in the court a quo, only
one counsel was instructed to appear on its behalf in this court.

[27] In the result:

(a)
The appeal is upheld with costs.

(b)
The order of the court a quo is set aside and replaced with an

order in the following terms:

'The application is dismissed with costs including the costs

occasioned by the employment of two counsel.'

………………
F D J BRAND
JUDGE OF APPEAL

Concur:

MPATI
DP
ZULMAN  JA
HEHER
JA
JONES
AJA