THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case no: 724/2017
In the matter between:

CITY OF TSHWANE METROPOLITAN MUNICIPALITY
APPELLANT

and

LOMBARDY DEVELOPMENT (PTY) LTD
FIRST RESPONDENT
KARIN GELDENHUYS
SECOND RESPONDENT
JOHANNES FREDERIK GELDENHUYS
THIRD RESPONDENT
CECILIA LOOTS
FOURTH RESPONDENT
LISA HOPKINSON
FIFTH RESPONDENT
LYN CHER CALLE
SIXTH RESPONDENT
EMILY MATHILDA BEZUIDENHOUT
SEVENTH RESPONDENT
NICOLAAS WYNAND BEZUIDENHOUT
EIGHTH RESPONDENT
LIZ HAMMAN
NINTH RESPONDENT
HUGH ARUNDEL VAN DER WESTHUIZEN
TENTH RESPONDENT
JOHAN SIEBERT VAN ONSELEN
ELEVENTH RESPONDENT
MARION GRASSINI
TWELFTH RESPONDENT
CARLOS ARTURO GRASSINI
THIRTEENTH RESPONDENT
MARKOS ARTURO GRASSINI
FOURTEENTH RESPONDENT

Neutral citation:  City of Tshwane Metropolitan Municipality v Lombardy Development (Pty)
Ltd & others (724/2017) [2018] ZASCA 77 (31 May 2018)

Bench:
Ponnan, Majiedt and Seriti JJA and Pillay D and Makgoka AJJA

Heard:
11 May 2018

Delivered:
31 May 2018

Summary:
Local Government: Municipal Property Rates Act 6 of 2004 – failure by
Municipality to comply with s 49 in compiling supplementary valuation roll – such roll
invalid – subsequent valuation rolls relying on re-categorisation of properties in earlier
invalid supplementary roll also invalid to the extent of such reliance.
_____________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Gauteng Division, Pretoria (Tuchten J sitting as court of first instance):

Save for setting aside paragraphs 5 and 6 of the order of the court below, the appeal is
dismissed with costs, including the costs of two counsel.
______________________________________________________________________

JUDGMENT
______________________________________________________________________

Ponnan JA (Majiedt and Seriti JJA and Pillay D and Makgoka AJJA concurring):

[1] Municipal property rates are an amount in the Rand levied on the market value of
immovable property (ie land and buildings).1 Section 229 of the Constitution provides
that a municipality may impose rates on property and that this power may be regulated
by national legislation. The Local Government: Municipal Property Rates Act No 6 of
2004 (the MPRA) is the national legislation envisaged by section 229 of the

1 Section 11 of the MPRA.

Constitution.2 In terms of s 3(1) of the MPRA, the council of a municipality must adopt a
policy on the levying of rates on rateable property. Section 8 of the MPRA permits a
municipality to levy different rates for different categories of property and requires it to
specify the rates and the categories in its rates policy. The criteria for levying different
rates for different categories of rateable property is determined according to the actual
use of the property, permitted use of the property or the geographical area in which the
relevant property is located.3 The Act does not specify that a category of ‘vacant land’ is
permissible, but the list in s 8(2) is not exhaustive and it is competent for a municipality
to add categories to that list.4

[2] The power to impose and collect rates from an individual property owner turns on
the existence and the validity of a valuation roll reflecting the market value of that
property. Section 30 of the MPRA provides that a municipality, intending to levy rates on
properties within its jurisdictional area, has to value such properties and prepare a
valuation roll reflecting the valuations. The valuation roll must contain the market value
of the property. In terms of s 33(1) of the MPRA the municipality must, before the date
of valuation, designate a person as municipal valuer. Section 49(1) of the MPRA
provides:
‘(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;

2 MEC for Local Government and Traditional Affairs, KwaZulu-Natal v Botha NO and others [2014]
ZASCA 211; 2015 (2) SA 405 (SCA) para 6.
3 Section 8(1).
4 City of Tshwane v Marius Blom & GC Germishuizen Inc and another [2013] ZASCA 88; 2014 (1) SA 341
(SCA) para 16.

(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.’
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.5 A property owner may
then lodge an objection within the period stipulated in s 49(1)(a)(i) against any matter
reflected in, or omitted from, the valuation roll.

[3] A valuation roll takes effect from the start of the financial year following
completion of the public inspection period required by s 49 and remains valid for that
financial year or for one or more subsequent financial years as the municipality may
decide but in total not for more than four financial years.6 A municipality must cause a
supplementary valuation roll to be prepared in respect of any rateable property which
has come to be included in the municipality after the last general valuation.7 In terms of
s 78(2)(b) of the MPRA the supplementary valuation roll takes effect on the first day of
the month following completion of the public inspection period contemplated by s 49 and
remains valid for the duration of the municipality’s current valuation roll.

[4] The respondents are owners of vacant stands in Lombardy Estate and Health
Spa, a privately owned housing development in the municipal area of the former
Kungwini Local Municipality (Kungwini). With effect from 1 July 2011 Kungwini, together
with the neighbouring Nokeng Tsa Taemane Local Municipality and Metsweding District
Municipality, was disestablished and absorbed into the appellant, the City of Tshwane
Metropolitan Municipality (the City). Despite provision having been made in the policy of
the Kungwini Municipality for a rateable category of ‘vacant land’, the municipality never
applied the category. Whilst under the administration of Kungwini, the respondents’
properties were categorised as ‘residential’. For a year or more following the

5 Section 49(2).
6 Section 32(1)(a) and (b).
7 Section 78(1)(b).

disestablishment of Kungwini, rates were levied on the respondents’ properties at the
rate charged by the City for ‘residential’ properties. The practical effect was that there
were only marginal increases in the respondents’ rates upon incorporation into the City.

[5] About a year later that changed when the respondents began to receive invoices
from the City reflecting massive increases in their liability for rates. Moreover, those
drastic increases were retrospectively imposed to July 2011. By way of example: in May
2012 the property belonging to the Bezuidenhouts (the seventh and eighth
respondents), which was categorised as ‘residential’, was reflected as having a market
value of R1,2 m, being the same value that had been reflected on the corresponding
Kungwini invoices. For the whole of the 2011-12 financial year the rates payable by the
Bezuidenhouts was R753.11 per month after rebates were taken into account, which
compared favourably with the R600 levied by Kungwini during the previous financial
year. For the months of July and August 2012, being the first two months of the 2012-13
financial year, the Bezuidenhouts were invoiced an amount of R843.43 monthly, being
the new increased rate of 1,354 c/R then applicable by the City to a property
categorised as residential. However, in September 2012 the Bezuidenhouts received an
invoice from the City, which reflected a monthly charge for rates of R6014. That
represented an increase of some 700% over the amount previously charged. The
experience of the Bezuidenhouts was not unique to them, but repeated throughout the
Lombardy Estate development and, indeed, the former Kungwinini.

[6] Following receipt of those invoices, many of the respondents sought clarification
from the City as to why their rates had increased so drastically. In response, each
received a standard letter from the City that went thus:
‘A rate levied on this category of property, is determined by the Municipality during its budgeting
process for the financial year concerned. Public participation process for the adoption of the
Medium Term Revenue and Expenditure Framework was undertaken in terms of the relevant
legislation... held at various venues identified by the municipality and the community and
stakeholders were afforded an opportunity to make and submit their representations regarding
the Medium Term Revenue and Expenditure Framework and draft Property Rates Policy. The
venues for public participation were more central to make them accessible to all ratepayers and
stakeholders. The mentioned legislation makes provisions for community consultation/public

participation and not to consult individual ratepayers. It should be noted that not all ratepayers
attended the community participation sessions due to reasons beyond the municipality's control.
The notices for public consultation meetings were published in various newspapers. . . . The
council had considered all comments and presentations submitted to it by the community and
stakeholders during the public participation process. The approved tariffs were published in the
extraordinary Provincial Gazette to afford the community and individual ratepayers the second
opportunity to make final comments and representations to the municipality.’

[7] The uniform experience of the respondents was that the increases took them
completely by surprise. During October 2012 a number of the respondents engaged the
services of Adams & Adams Attorneys. On the 26th of that month Adams and Adams
wrote to the City. After setting out the relevant background, the letter noted that
notwithstanding numerous queries having been lodged with the City, it had failed to
meaningfully engage with their clients and other members of the community. The letter
identified a number of concerns about the legality and enforceability of the rates
increases and requested the City to provide reasons for its decision. The City did not
respond. Nor did it respond to several further letters written by Adams & Adams.

[8] Appreciating that their attempts at engaging with the City had come to naught, on
28 June 2013 the respondents approached the North Gauteng High Court, Pretoria to
review and set aside ‘four decisions’ of the City. It was stated in the founding affidavit: ‘I
have no further information about these decisions. I do not know who took them or
when they were taken. My efforts, and those of other residents, to obtain reasons from
the [City] and an explanation for these decisions have drawn a blank’. The City was also
called upon in terms of Rule 53(1)(b) of the Uniform Rules of Court to despatch to the
Registrar of the high court the record of the decisions sought to be reviewed and set
aside. On 27 August 2013 the City's attorney delivered a copy of the record to the
respondents’ attorney. On 26 September 2013 the latter pointed out that there appeared
to be certain omissions from the record furnished. On 21 November 2013 the former
filed a further bundle of documents described as ‘[City’s] supplementary record: full and
final’.

[9] On 16 July 2014 the respondents filed their replying affidavit. It was there stated
that: (i) for the reasons set out in the founding affidavit they were unable to be specific in
their original notice of motion as to the particular decisions that they sought to impugn;
(ii) the Rule 53 record shed little further light on the matter; and (iii) it was only when the
City set out its case in its answering affidavit that it was possible to establish with the
proper degree of precision the source of the steep increases in rates to which the
respondents had objected. Thus, so stated the respondents, this necessitated an
amendment to their notice of motion. In response, the City intimated that it would
oppose any proposed amendment. The respondents were accordingly obliged to
formally apply to amend their notice of motion.

[10] Both the amendment application and the main application succeeded before
Tuchten J who, on 12 June 2017, issued the following order:
‘1
To the extent necessary, any lateness in bringing these review proceedings is condoned
under s 9(2) of the Promotion of Administrative Justice Act, 3 of 2000 (PAJA) and the
period of 180 days provided for in s 7(1) of PAJA is concomitantly extended.
The respondent’s 2012 supplementary valuation roll is declared invalid and set aside to
the extent that it recategorises as ‟Vacant” properties situated in the municipal area of
the former Kungwini local municipality formerly categorised as ‟Residential” (the affected
properties).
The respondent’s 2013 general valuation roll and all subsequent valuation rolls of the
respondent are declared invalid and set aside to the extent that they categorise the
affected properties as ‟Vacant” unless and until the affected properties are lawfully re-
categorised as such. The imposition by the respondent of the assessment rate
applicable to vacant land on those of the affected properties which belonged to the
applicants on 28 June 2013, the date upon which this review application was instituted,
is declared invalid and set aside.
The imposition by the respondent of the assessment rate applicable to vacant land on
those of the affected properties which belonged to the applicants on 28 June 2013, the
date upon which this review application was instituted, is declared invalid and set aside.
Item 5.1.5(d) of the respondent’s rates policy with effective date 1 July 2011, as
amended (pp784-799 of the record) is declared invalid and set aside.
The respondent is prohibited from further implementing any of the decisions mentioned
above in this order to the extent that they have been set aside.

Pursuant to the applicants’ tender made through counsel, the applicants are directed to
pay rates to the respondent in respect of the affected properties owned by them at the
rate applicable to such properties immediately preceding the coming into operation of
the respondent’s 2012 supplementary valuation roll until the rate applicable to such
properties is changed according to law.
The decision to implement the 2013 general valuation roll is remitted to the respondent
to consider afresh the appropriate categorisation of the affected properties and the rate
which should be levied upon the affected properties, with due regard to the provisions of
the Municipal Property Rates Act, 6 of 2004, to other applicable legislation and to this
judgment.
Except as expressly stated in this order, decisions taken and acts performed under and
pursuant to any of the valuation rolls mentioned in this order are not invalid merely
because of the invalidity of such valuation rolls themselves.
The respondent must pay the applicants’ costs, including the costs consequent upon the
employment of both senior and junior counsel.’
Tuchten J subsequently granted leave to the City to appeal against paragraph 5 of his
order. The appeal against the further orders of the learned judge is with the leave of this
court.

[11] When the application was launched, little was known about the underlying
decisions that had led to the rates increases. Remarkably, almost five years later this
remains the case. This is because the City’s case is characterised by a failure to
provide a frank and comprehensive account of its conduct. It seeks in this appeal to
make a virtue of its silence on matters on which it owes a duty to account.8 The principal
focus of the appeal is thus on the issues of: (a) the lateness of the respondents’
application to the high court; (b) the grant by the high court of the amendment sought by
the respondents; and (c) whether the orders of the high court should have been
confined to the respondents.

8 Kalil NO and others v Mangaung Metropolitan Municipality and others [2014] ZASCA 90; 2014 (5) SA
123 (SCA) para 30 put it thus: ‘the function of public servants . . . is to serve the public, and the
community at large has the right to insist upon them to act lawfully and within the bounds of their
authority. They should neither be coy nor play fast and loose with the truth . . . it is their duty to take the
court into their confidence and fully explain the facts so that an informed decision can be taken in the
interests of the public and good governance’.

[12] The City says that the respondents’ application was too late, in circumstances
where it remains unclear when the relevant decisions were taken, by whom and why.
The application establishes that the City failed to follow the statutory procedures
prescribed by the MPRA when it re-categorised the respondents’ properties in 2012.
The City has however declined to specify the extent to which it omitted to do so. It has
also pointedly declined to say whether it has ever attempted to subsequently cure its
omissions. With effect from July 2012, the City changed the category of the vacant
properties in the disestablished areas from ‘residential’ to ‘vacant’ in a 2012
supplementary valuation roll that was published on 4 July 2012 and took effect on 1
September 2012. It then charged the owners of the re-categorised properties the vacant
land rate (which is some 4.5 times higher than the residential rate) and applied the
higher rate retrospectively to July 2011, resulting in substantial arrear charges. The City
did all of this without complying with the requirements of the MPRA. Those provisions
are intended precisely to avoid a situation such as this, where ratepayers are blindsided
by changes to their rates without notice and consultation. The City now accepts, as it
somewhat euphemistically put it in its heads of argument in the appeal, that it ‘did not
comply fully with the provisions of section 49 [of the MPRA]’. The extent of the non-
compliance is not however specified. It also says that it ‘accepts . . . that the
Respondents did not, contrary to the mandatory provisions thereof, receive notices in
terms of Section 49(1)(c)’.

[13] The City’s belated concession drastically understates the extent of the City’s non-
compliance. The respondents’ case was that the City did not comply with the
requirement to provide individual owners with notice of the re-categorisation of their
properties in terms of section 49(1)(c) of the MPRA. Though this is now an undeniable
fact, the City was initially coy in its response. In its answering affidavit the City asserted
that it ‘is not in a position to demonstrate that its officials complied with the material
requirements for which provision is made in section 49(1)(c) of the Rates Act’. This
implies that all that is lacking is proof of compliance rather than the absence of
compliance. The City describes the absence of proof as an ‘oversight’ that is excusable
because of ‘the enormity of the task given the numbers of owners of property in the area
of the erstwhile Kungwini to whom section 49(1)(c) notices had to be served’ and the

short time within which the absorption of the Kungwini, Nokeng and Metsweding
municipalities had to take place. The City ought not to have prevaricated in that fashion.
The fact that it has not been able to find evidence of service of a single notice, together
with the fact that none of the respondents ever received notice leads inescapably to the
conclusion that the City did not trouble to send any such notices. It ought to have
candidly said so and also said why it chose not to do so.

[14] Moreover, not having satisfied the individual service requirements prescribed by
the MPRA, the City made no real attempt to communicate by any other means to
individual owners. Nor, for that matter, did it take any steps to ensure that owners might
otherwise be made aware of the fact of the re-categorisation of their properties and the
implications that this would carry for their rates liability. There is no hint in the record
that, in the City’s public participation processes concerning its budget, it informed
citizens about its re-categorisation plans and advised them of the fact of the changes
that were to be effected to the supplementary roll and urged them to inspect it and to
exercise their right to object. The omission is particularly egregious given that the City
must have realised the impact that the re-categorisation and the consequent levying of
the vacant land rate would have for affected ratepayers.

[15] The omissions go further. The City alleged that it had substantially complied with
the requirements of s 49 of the MPRA. Precisely how is unclear. The only evidence of
any compliance by the City with the notice requirements of s 49 is the two notices in the
Provincial Gazette that were annexed to the answering affidavit. There is no evidence
that the City published the notice in local newspapers as required by section 49(1)(a). It
asserts that it did so but does not annex proof of such publication. Indeed, there is no
document anywhere in the record proving publication in the media as required by the
MPRA. The notice in the Provincial Gazette omits the most critical fact, namely that the
City had re-categorised the vacant Kungwini properties, thereby defeating the core
purpose of the notice requirement. Such evidence of compliance as may exist is solely
within the City’s knowledge, but it has failed to provide it.9

9 Wightman t/a JW Construction (Pty) Ltd v Headfour (Pty) Ltd and another [2008] ZASCA 6; 2008 (3) SA
371 (SCA) para 13.

[16] The City argues that the application should have been brought within 180 days of
July 2012, which is when some of the respondents received invoices reflecting the
higher charges. The premise of the argument is that the application entails the review of
administrative action. However, the application was aimed at the exercise by the City of
its constitutional powers to impose rates on property in terms of s 229(1) of the
Constitution.10 Arguably, the exercise of such power could perhaps be categorised as
either an executive or legislative function of a municipal council and thus exempted from
PAJA. Given the lack of candour on the part of the City, it remains unclear even at this
stage, which one it is. The City has simply declined to say who (ie which organ of the
City) decided that it was too onerous to follow the prescribed procedures and that, in
consequence, the 2012 supplementary valuation roll would be produced and
implemented without following those procedures. It is thus difficult to properly
characterise the power exercised by the City.

[17] At best for the City, the only function that could perhaps constitute administrative
action is the valuation and categorisation of each property on the roll. This is principally
the function of the municipal valuer. The City denied in its answering affidavit that this is
administrative action.11 The respondents did not challenge the decisions of the
municipal valuer. Their opportunity to do so would have been during the objection
process to the roll, an opportunity that they were denied. The challenge was instead to
the validity of the 2012 supplementary valuation roll on the basis that the requirements
of the MPRA for the preparation of a valid valuation roll were not complied with. The
precise origins of the failure of the City so to comply remain obscure. One imagines that
such a decision could only plausibly have been made at the highest executive or
legislative levels by the City’s policy-making organs or by its Council.

[18] However, it seems to me that I can pass over the characterisation issue, because
on the assumption that some of the decisions impugned in the original notice of motion
might constitute administrative action under the Promotion of Administrative Justice Act

10 City of Cape Town and another v Robertson and another [2004] ZACC 21; 2005 (2) SA 323 (CC) para
62.
11 Gillyfrost 54 (Pty) Ltd v Nelson Mandela Bay Municipality [2015] 4 All SA 58 (ECP).

3 of 2000 (PAJA), the respondents sought an extension of the 180-day time bar to the
extent necessary. The high court took the view that when the application had been
launched by the respondents the City had yet to furnish adequate reasons for its
decisions, hence, the application was not late. And, even were the matter to have been
approached on the basis that the respondents had accumulated sufficient information
by mid-October 2012, it granted condonation for the two or three-month delay in
launching the application. In my view, neither the approach nor the conclusion of the
high court can be faulted. For, while it is correct that some of the affected owners would
have become aware that something had changed when they began receiving drastically
inflated invoices from the beginning of July 2012, there was nothing in those invoices
that would have informed them of the underlying reasons for the change. The City
provided no other form of notification to the ratepayers other than the invoices. Those
invoices themselves provided no explanation. They simply reflected the properties as
having been re-categorised as vacant and reflected the rate payable as the City’s rate
for vacant land and included an ‘adjustment’ reflecting the back-dating of this
categorisation and the associated rate to 1 July 2011.

[19] The core of the City’s case in relation to delay is that the respondents were in
possession of all the relevant facts to enable them to launch the application by October
2012 at the latest, being the date of the letter from Adams & Adams to the City.
However, that letter specifically requested reasons from the City for its decision to apply
the vacant land tariff to the affected properties, a clear indication that as at that date the
respondents were not aware of the underlying reasons for the re-categorisation of their
properties. The letter also requested information regarding the internal remedies
available to the respondents to challenge the re-categorisation; an indicator in itself that
the matter could not have been ripe for a review. The letter further requested a copy of
the record of the decision and attached a Promotion of Access to Information Act 2 of
2000 (PAIA) request in this regard. The respondents thus proceeded to launch their
review application, even though, as the high court found, they had still not been
furnished with any of the requested information. Accordingly, the original notice of
motion was couched in very broad terms. Further, whilst there are generalised
references to the fact that the properties could only have been re-categorised by way of

a supplementary valuation roll (which required proper notice in terms of section 49 of
the MPRA), there was no reference to the 2012 Supplementary Valuation Roll in the
founding affidavit. The information requested was furnished for the first time in rather
elliptical terms in the Rule 53 record dated 22 August 2012. This was the first mention
by the City of the actual cause of the increases, namely that the properties had been
reclassified in the 2012 supplementary valuation roll. The previous correspondence
from the City dealing with requests to explain the drastic increase in rates did not
mention this crucial fact. Properly considered therefore, it is only from that date (22
August 2012) that the ‘clock starts ticking’ in relation to the 180-day period.12

[20] It is for the City to show that in granting the extension in terms of s 9(2) of PAJA
the high court failed to exercise a proper judicial discretion. That the City has failed to
do. In levying, recovering and increasing property rates, a City has to comply (at least
substantially) with the procedures prescribed by national legislation. A failure to do so is
in conflict with the principle of legality.13 This is so, particularly in circumstances in which
the true underlying facts concerning that failure became evident only as a result of the
launch of the application. Although late in coming, the City has finally admitted on
appeal that it did not comply fully with s 49 of the MPRA. It bears emphasis that the City
failed to comply with s 49 of the MPRA almost in its entirety. The purpose of the
publication and notice requirements of s 49 of the MRPA is self-evident. They are
intended to ensure that the persons directly and individually affected by the changes to
the valuation roll are given reasonable notice of the changes and an opportunity to
respond to them by exercising the right of objection provided for in the MPRA.
Notwithstanding its belated admission, the City nonetheless persists in its contention
that the delay should not be condoned. But, once the admitted illegality goes into the
scales it ought to tip it against the City. For, in declining to grant condonation in a case
such as this and thereby not entering into the substantive merits of the matter, a court
would be countenancing a continuing illegality.

12 Opposition to Urban Tolling Alliance v South African National Roads Agency Ltd [2013] 4 All SA 639
(SCA); [2013] ZASCA 148 para 28.
13 Kalil NO (above) 3.

[21] The procedures set out in the MPRA for the compilation of a valuation roll are a
jurisdictional prerequisite for the exercise by the City of its power to collect rates. The
reference in any law to any action or conduct is presumed to be a reference to a lawful
or valid action or conduct.14 If, as here, those procedures were not followed, the result is
that the consequent collection of rates by the City premised on the valuation roll is
invalid. The high court’s declaration of invalidity of the 2012 roll is thus unassailable.
And, as it was put in City of Johannesburg v AD Outpost 2012 (4) SA 325 (SCA) para
20 ‘an administrative decision declared to have been invalid is to be retrospectively
regarded as if it had never been made.’ The City contends however that the roll should
not have been set aside or that some other just and equitable order short of setting
aside the roll should have been made. In that regard it is important to emphasise that a
litigant seeking a just and equitable remedy limiting the impact of the mandatory remedy
of a declaration of invalidity must make out such a case. In particular, facts should be
adduced as to the deleterious consequences for the public interest of setting aside a
decision that has been declared invalid. This is to enable the Court to weigh up those
consequences against the imperative to vindicate the principle of legality.15 No such
case has been made out by the City in its papers. If anything, the City has been aware
of the vociferous objections by its residents since it first implemented the massive rates
increases in July 2012. It could thus hardly be said that the delay between July 2012
and June 2013 has caused any prejudice to it, in the sense that relevant evidence has
been forgotten or proof destroyed. It cannot plausibly be so that the City proceeded to
arrange its affairs in the confident expectation that ratepayers would not challenge its
conduct.  Indeed, the City does not even attempt to suggest what other remedy might
be preferable from the standpoint of justice and equity other than that the court should
decline to set aside the 2012 valuation roII.

[22] The City says that this is a case where ‘effluxion of time, practicalities,
pragmatism and public interest in the finality of administrative decisions’ dictate that the
invalid act should be permitted to stand. It cites Chairperson: Standing Tender

14 S v Mapheele 1963 (2) SA 651 (A) at 655D-E; MTN International (Mauritius) v CSARS [2014] ZASCA
8; 2014 (5) SA 225 (SCA) para 10.
15 Bengwenyama Minerals (Pty) Ltd and others v Genorah Resources and others (Pty) Ltd and others
[2010] ZACC 26; 2011 (4) SA 113 (CC) para 84-85.

Committee and others v JFE Sapela Electronics 2008 (2) SA 638 (SCA) as authority for
this contention. That case was concerned with a tender. And, as is often the case in
matters of that kind, where third parties have in good faith altered their position in
reliance on the conviction that the administrative action is valid, they consequently
would be prejudiced if it were to be set aside. Those considerations have no relevance
in a case where an organ of state itself seeks to avoid the consequences of its unlawful
conduct. Here, the City is not an innocent third party, but the author of the illegality. And,
the City's lack of candour detracts from the perception that it was acting in good faith.
The state of mind of the City or what motivated it to act as it did is simply unknown.
There is moreover no evidence concerning the consequences of setting aside the 2012
valuation roll. The City pertinently declined to give any evidence at all about the
preparation and compilation of its successor, the 2013 general roll.

[23] The City purported to re-categorise the affected properties in 2012. But, as the
high court correctly held, that was invalid and hence ineffective. In order validly to apply
the vacant land rate to the affected properties, those properties had to have been validly
re-categorised by moving them from the residential to the vacant category thereby
complying with the requirements of the MPRA for effecting a valid re-categorisation.
Whilst the 2013 general valuation roll could possibly have accomplished this, it is plain
that it could not have done so if it simply relied on the fact that the re-categorisation had
already been effected by the 2012 supplementary valuation roll. The invalidity and
setting aside of the 2012 roll has the consequence that a subsequent roll that relied on it
for its validity would be invalid to the extent of such reliance (Seale v Van Rooyen NO
2008 (4) SA 43 (SCA) para 13).

[24] This is the basis of paragraph 3 of the high court’s order. The principal complaint
in this appeal against that order is that a challenge to the valuation rolls subsequent to
2012 should not have been allowed to be introduced by way of an amendment to the
notice of motion. The application should have been confined to the original attack on the
2012 roll, so suggests the City, because that is the case that it had to meet and it
confined itself to that case. It was under no obligation, so the suggestion goes, to
adduce evidence to deal with a challenge outside the parameters originally set in the

application and ought not to be prejudiced in that regard. By the date of the filing of the
answering affidavit, the 2012 supplementary roll had been superseded by the 2013
general valuation roll. The City said: ‘The rateable properties, which had previously
been located within the erstwhile Kungwini Municipality, have also accordingly been
included [in] the Respondent’s General Valuation Roll of 2013’. Simply relying on the re-
categorisation in the 2012 valuation, as the basis for the 2013 general valuation roll,
without any steps having been taken to cure the defects in the process of re-
categorisation, rendered the latter vulnerable to invalidity (Seale v Van Rooyen).

[25] The respondents sought to amend their notice of motion and on 25 July 2014
filed a formal notice in terms of Rule 28. The City objected to the amendment. Affidavits
were exchanged and it was agreed between the parties that the amendment would be
heard at the same time as the main application. The high court allowed the amendment.
The City’s contends that it erred in doing so. I am by no means persuaded that the high
court’s order on that score is appealable.16 However, on the assumption in the City’s
favour that it is, it seems to me that, here as well, the approach of the high court cannot
be faulted. The City says that it was prejudiced because it did not have an opportunity to
address the ‘new case’. The City was indeed afforded an opportunity to file a further
affidavit dealing with the challenge to the 2013 general valuation roll. Initially, the City
indicated that it intended to file ‘[a]ffidavits in support of its case regarding the invalidity
of the General Valuation Roll and the prejudice to our client’s application’ and it
requested an indulgence to do so. But, no further affidavit was filed by the City and no
explanation for the failure to do so was provided.

[26] The challenge to the 2013 general valuation roll was a narrow one. It was
expressly confined to the application of the legal principle enunciated in Seale v Van
Rooyen namely, that if a second act depends for its validity on a prior act, the invalidity
of the prior act has the effect that the second act is also invalid. The challenge was also
based on the assumption that the City had not taken any steps to correct its failure to
comply with the notification requirements and had simply issued the 2013 roll on the

16 Webber Wentzel v Batstone and another [1994] 3 All SA 400 (T).

basis of the categorisations in the prior 2012 supplementary valuation roll. That
assumption could easily have been defeated. It would have been a relatively simple
matter for the City to have filed a further affidavit stating that the new rolls were not
based on the re-categorisation in the 2012 roll and what further steps had been taken to
cure the failure to comply with the MPRA in 2012. Had the City done so, that would
have put the matter to bed.

[27] The City had a further opportunity to adduce such evidence when the
amendment application was granted. It could, at that point, have sought a
postponement to allow it to file a further affidavit. This was explicitly dealt with when the
matter was heard. The high court indicates in its judgment that it anticipated such an
application and that it was surprised when none was brought. The inference is thus
inescapable that the City, despite being given every opportunity to do so, never sought
to adduce further evidence as to how it cured the defects in the 2012 roll, simply
because there was no such evidence to adduce. In these circumstances, the City
cannot rely on a complaint that it has been unfairly treated because the issue was not
sufficiently ventilated in the evidence. The City says in argument that the Seale principle
does not apply because the establishment of the 2013 general valuation roll was a
‘hermetically sealed’ and ‘independent” procedure’. That submission is not based on
any evidence. The City deliberately declined to put up any evidence about the
procedure adopted that might have established a basis for the submission. Challenged
to respond to the allegation that it simply relied on the invalid 2012 re-categorisations in
its subsequent valuation rolls and that it had never set about a fresh process, the City
chose to hide behind technical objections to the effect that the rules of civil procedure
did not compel it to say anything.  The City thus cannot complain that it is unfair for the
high court to have drawn the obvious inference from its silence on this issue. The legal
effect of the order of invalidity and setting-aside of the 2012 supplementary roll is that,
until the causes of invalidity are addressed by the City, the subsequent valuation rolls
are consequentially invalid.

[28] The City says that there is no basis for the high court to have made a declaration
of invalidity with general effect and that the judgment of the high court should have been

confined to the respondents. It was the respondents’ case from the outset that the
problems that they experienced were caused by a general failure by the City to comply
with the MPRA and therefore with the principle of legality in respect of all vacant
property in the former Kungwini. Thus, although they did not purport to represent the
public at large, the relief sought and granted by the high court recognised that
proceedings ‘against the state assume a public character which necessarily widens the
reach of orders issued to cover persons who were not privy to a particular litigation’.17
What is more, the City’s complaint misconstrues the nature and effect of the high court’s
judgment. For, whilst a judgment in personam relates only to the rights inter se the
parties before the court and binds only the parties to the proceedings, one in rem fixes
the status of the matter in the litigation. A judgment in rem has effect against the whole
world – inter omnes and not merely as between parties to the litigation before the court.
As the judgment pronounced upon the status of the particular subject-matter of the
litigation in this case, it is one in rem and is conclusive against all persons whether
parties or strangers to the litigation.18

[29] It follows that paragraphs 1 to 4 of the high court’s order cannot be assailed.
Insofar as paragraphs 5 and 6 are concerned, the respondents accepted that those
orders were not strictly necessary and accordingly conceded that they be set aside. The
City says it is difficult to understand and implement paragraphs 8 and 9 of the high
court's order and, as a consequence, they should be set aside on appeal. The high
court's order must be interpreted contextually and not by peering at words in a
paragraph of the order in isolation. The context includes the application papers and the
judgment of the court as a whole. Such an approach solves any ostensible difficulties in
interpreting and implementing paragraph 7 of the order. It is plain from the context that
the respondents’ grievance was not concerned with the particular level of the rate levied
against their properties (in the sense of the rate of cents in the rand made applicable to
vacant property) but with the re-categorisation of those properties as ‘vacant’, thereby
attracting the higher vacant land rate. Until properly re-categorised, the respondents
contend that the City's residential rate should be charged in respect of their properties

17 Mukaddam v Pioneer Foods (Pty) Ltd and others [2013] ZACC 23; 2013 (5) SA 89 (CC) para 40.
18 Tshabalala v Johannesburg City Council 1962 (4) SA 367 (T) at 368H-369A; Pattni v Ali [2007] 2 AC 85
para 21.

and they tendered to pay that rate. That, as the judgment makes clear, is what the high
court means by its order that the ‘rate’ previously applicable must be levied in the former
Kungwini area until the City remedies the defects in its process of re-categorisation. In
other words, the Kungwini vacant properties must be rated at the rate that in terms of
the City’s current rates resolution is applicable to residential properties, whatever that
rate is from time to time.

[30] As to paragraph 8 of the order: Understood contextually, the order requires the
City to undertake a valid process of re-categorisation of the Kungwini vacant properties,
thereby complying with the MPRA. Put another way, if the City wishes to apply its
vacant land rate to those properties it must first properly re-categorise them as vacant.
This does not require the retrospective compiling of a valuation roll. Rather it is for the
City to issue, following the procedures prescribed in the MPRA, a general or
supplementary valuation roll that validly re-categorises the Kungwini properties as
vacant. Once it has done that it would be free to apply the vacant land rate to those
properties. The respondents did not challenge the validity of the rate applicable to
vacant land and it is plain that the high court does not mean by its order that the City
must reconsider this rate or that the rate has been declared invalid.

[31] In the result, save for setting aside paragraphs 5 and 6 of the order of the court
below, the appeal is dismissed with costs, including the costs of two counsel.

_________________
V M Ponnan
Judge of Appeal

APPEARANCES:

For Appellants:

T Strydom SC (with him T Mkhwanazi)

Instructed by:

Ndobela & Lamola Incorporated, Pretoria

Honey Attorneys, Bloemfontein

For Respondent:

GJ Marcus SC (with him JB Currie)

Instructed by:

Adams & Adams, Pretoria

Phatshoane Henney Attorneys, Bloemfontein