THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case No: 804/2015

In the matter between:

BREAKERS SHARE BLOCK LIMITED
APPELLANT

and

THE ETHEKWINI MUNICIPALITY
RESPONDENT

Neutral citation:
Breakers Share Block Limited v Ethekwini Municipality
(804/2015) [2016] ZASCA 117 (14 September 2016)

Coram:
Mpati AP, Shongwe, Swain and Mocumie JJA and Potterill AJA

Heard:
31 August 2016

Delivered:
14 September 2016

Summary:  Local Government: Municipal Property Rates Act 6 of 2004: Sections 49
and 78(2): adequacy of notice of supplementary valuation: notice substantively
compliant with Act.

ORDER

On appeal from: KwaZulu-Natal Local Division, Durban (Nkosi AJ sitting as court of
first instance).

The appeal is dismissed with costs, such costs to include the costs of two counsel
where employed.

JUDGMENT

Swain JA (Mpati AP, Shongwe and Mocumie JJA and Potterill AJA concurring):
[1] The appellant, Breakers Share Block Limited, leases an immovable property
described as Erf 1066 of Umhlanga Rocks, from the respondent, the Ethekwini
Municipality. The appellant erected an apartment block on the property, comprising
apartments used in conjunction with a conventional share block scheme and others
in terms of a time share scheme. In terms of the long term lease the appellant is
obliged to pay the respondent the rates levied by the respondent, in respect of the
property, in terms of the Local Government: Municipal Property Rates Act 6 of 2004
(the Rates Act).
[2] A dispute arose between the parties when the respondent determined that
for the purpose of calculating the rates payable on the property by the appellant, it
should fall within the category „business and commercial‟ as defined in the
respondent‟s rates policy which was effective for the respondent‟s 2013/2014
financial year. In previous years the property had been categorised as „residential‟.

[3] By virtue of the fact that business and commercial properties are rated by
the respondent at a greater amount per rand of valuation than residential properties,
the result was that the amount of the rates payable by the appellant, almost doubled.
[4] Aggrieved at this outcome the appellant launched an application before the
KwaZulu-Natal Local Division, Durban (Nkosi AJ) in which a declaratory order was
sought, that the property fell within the residential category of properties, as defined
in terms of the respondent‟s rates policy. A further order, sought in the alternative,
was that the notice dated 19 September 2013 addressed by the respondent to the
appellant in terms of s 49(1)(a) read with s 78(2) of the Rates Act, to notify the
appellant of the re-categorisation of the property, was invalid and of no force and
effect.
[5] The court a quo decided the matter on the basis of a point in limine raised by
the respondent, namely that the appellant had failed to exhaust the internal remedies
available to it in terms of the Rates Act, before launching the application. The
respondent alleged that the appellant was entitled to lodge an objection in terms of s
50(1)(c) of the Rates Act with the Municipal Manager of the respondent, against the
changed categorisation of the property. If dissatisfied with the outcome of this
procedure, the appellant was entitled to appeal to the Valuation Appeals Board, in
terms of s 54 of the Rates Act. The court a quo accordingly dismissed the application
with costs and thereafter granted leave to the appellant to appeal to this court.
[6] On appeal before us the appellant, however, restricted its challenge solely to
the alternative relief claimed, namely that the notice in question did not comply with
the requirements of s 49(1)(a) read with s 78(2) of the Rates Act. It was submitted
that the notice was invalid, of no force and effect and the respondent was precluded
from demanding increased rates based upon it.
[7] Section 49 of the Rates Act provides as follows:
„(1) The valuer of a municipality must submit the certified valuation roll to the municipal
manager, and the municipal manager must within 21 days of receipt of the roll –

(a) publish in the prescribed form in the Provincial Gazette, and once a week for two
consecutive weeks advertise in the media, a notice -
(i) stating that the roll is open for public inspection for a period stated in the notice,
which may not be less than 30 days from the date of publication of the last notice;
and
(ii) inviting every person who wishes to lodge an objection in respect of any matter
in, or omitted from, the roll to do so in the prescribed manner within the stated
period;
(b) disseminate the substance of the notice referred to in paragraph (a) to the local
community in terms of Chapter 4 of the Municipal Systems Act; and
(c) serve, by ordinary mail or, if appropriate in accordance with section 115 of the Municipal
Systems Act, on every owner of property listed in the valuation roll a copy of the notice
referred to in paragraph (a) together with an extract of the valuation roll pertaining to that
owner‟s property.
(2) If the municipality has an official website or another website available to it, the notice and
the valuation roll must also be published on that website.‟
[8] The relevant provisions of s 78(2) of the Rates Act provide that in the case of
a supplementary valuation (as in the present case) the provisions of s 49 inter alia
are applicable „read with the necessary changes as the context may require‟.
[9] The notice in question read as follows:
„Section 49 Notice in respect of the Municipal Property Rates Act of 2004: 35760104
Dear Property Owner
This notice is served to you under the requirements of Section 49 of the Municipal Property
Rates Act of 2004. The purpose of this notice is to advise you of the valuation placed on the
above mentioned property as at 01 July 2012 as determined during the FIFTH
Supplementary Valuation conducted under the provisions of the Municipal Property Rates
Act of 2004.The details of this, as per the Valuation Roll, are as follows:

Property Description
ERF 1066 of UMHLANGA ROCKS
Address
88 LAGOON DRIVE, UMHLANGA
Usage
23 – Furnished Accommodation
Category
5 – Business & Commercial
Extent (m²)
13903.00
Rate Number
35760104
Subcode
Market Value
238,900,000.00
Exemptions

Rebates

Phasing In

Exclusions

Set out below is a copy of the notice which was published on 20th September 2013.
“Notice is hereby given in terms of Section 49(1)(a)(i) read together with section 78(2) of the
Local Government: Municipal Property Rates Act, 2004 (Act No. 6 of 2004), hereinafter
referred to as the “Act”, that the Fifth Supplementary Valuation roll (GV 2012) for the
financial years 01 July 2012 to 30 June 2016 is open for public inspection at the office of the
Municipal Manager, Valuation Roll, 13th Floor, 75 Dr Langalibalele Dube (Winder Street),
Durban and the Sizakala Customer Centres during office hours 07:30 to 16:00 from 20
September 2013 to 31 October 2013.
In addition the General Valuation Roll is available at website:- www.durban.gov.za.
An invitation is hereby made in terms of section 49(1)(a)(ii) read together with section 78(2)
of the Act that any owner of property or other person who so desires may lodge an objection
with the municipal manager in respect of any matter reflected in, or omitted from, the Fifth
Supplementary Valuation Roll within the abovementioned period. Attention is specifically
drawn to the fact that in terms of section 50(2) of the Act an objection must be in relation to a
specific individual property and not against the valuation roll as such. The form for lodging of
an objection is obtainable at the following address:-Valuation Roll, Real Estate Unit, 13th
Floor, 75 Winder Street, Durban or the Sizakala Customer Centres and Website:-
www.durban.gov.za The completed forms must be returned to the following address: The
Municipal Manager, eThekwini Municipality, Valuation Roll, 13th Floor, 75 Dr. Langalibalele

Dube Street (Winder Street), Durban, 4000. Completed forms can also be handed in at The
Sizakala Customer Centres where they will be captured “on-line”.‟
[10] It is quite clear that the notice contains what is required in terms of s 49(1)(c)
of the Rates Act. A copy of the notice referred to in s 49(1)(a) is also included,
stating that the valuation roll is open for public inspection, as well as the details of
when and where it may be inspected. An invitation is also extended to any person
who wishes to lodge an objection, together with how and where to do so. In addition,
the notice contains an extract of the valuation roll pertaining to the appellant‟s
property.
[11] Counsel for the appellant, however, submitted that because the introductory
paragraph to the notice stated that the „purpose of this notice is to advise you of the
valuation placed on the above mentioned property as at 1 July 2012‟, the reader‟s
attention was only drawn to the market value of the property, reflected in the table. It
is, however, quite clear that the „category‟ of the property is described as „5 –
Business & Commercial‟ and „Usage‟ is described as „23 – Furnished
Accommodation‟. Both aspects are displayed with equal prominence to that of
„market value‟ in the table.
[12] When regard is had to the fact that the whole basis for the appellant‟s
complaint was that the category into which the property was placed should have
been „residential‟ (as had previously been the case) and not „business and
commercial‟, there is no basis for the submission that the notice did not clearly and
adequately convey to the appellant, this change. Counsel for the appellant submitted
that the change in the categorisation of the property should have been expressly
drawn to the appellant‟s attention. The enquiry, however, is whether the notice
substantively complied with the requirements of s 49. In my view, it did.
[13] An additional submission made by counsel for the appellant was that the
provision in s 78(2) of the Rates Act, that the same notice requirements in the case
of a supplementary valuation, as in the original valuation had to be adhered to „with
the necessary changes as the context may require‟ meant that a change in any

aspect of the valuation of the property, had to be expressly brought to the attention
of the ratepayer. The „necessary changes‟ in context, simply means those changes
which are necessary to indicate that what is being published is a supplementary
valuation.
[14] In the result the appeal must accordingly fail. The following order is made:
The appeal is dismissed with costs, such costs to include the costs of two counsel
where employed.

K G B Swain

Judge of Appeal

Appearances:
For the Appellant:

C J Pammenter SC (with M B Pitman)

Instructed by:

Tomlinson Mnguni James, Umhlanga

Claude Reid Inc, Bloemfontein

For the Respondents:

V I Gajoo SC (with G D Goddard SC)

Instructed by:

Gcolotela & Peter Inc, Durban

Lovius Block, Bloemfontein