In a recent High Court case, The City of Johannesburg Metropolitan Municipality (the City) and its Municipal Valuer sought to review and set aside a decision made by the Valuation Appeal Board on 9 December 2021.
- The decision in question reclassified 24 units in Melrose Square on Oaks from “sectional title business” to “sectional title residential” for rating purposes, effective 1 July 2013.
- The owners of the 24 units had appealed the Valuer’s classification of their properties as “business” in the 2013 supplementary valuation roll, arguing that the units were used solely for residential purposes.
- The Appeal Board agreed with the owners, finding that the Valuer’s classification was “unjustifiable and palpably wrong,” and reclassified the units as “sectional title residential.”
- The City and Valuer challenged this decision under the Promotion of Administrative Justice Act (PAJA), raising seven grounds of review.
Ruling Summary
The High Court dismissed the City’s application to review and set aside the Appeal Board’s decision.
The Court found that:
- The Appeal Board acted within its powers under Section 57 of the Municipal Property Rates Act (MPRA).
- The City’s arguments lacked merit, particularly its reliance on the “highest and best use” principle, which is not supported by either the City’s Rates Policy or the MPRA.
- The Valuer lacked locus standi (legal standing) to bring the review, as he is considered functus officio (his role ends once the valuation roll is completed).
- The City’s locus standi was accepted, albeit on a tenuous basis, as it claimed to act in the public interest.
- The Appeal Board did not declare the City’s Rates Policy unlawful, but rather found that the Valuer misapplied it.
The Court criticized the City and Valuer’s conduct, including the use of public funds to pursue a case that lacked merit and the Valuer’s lack of independence.
Costs were awarded against the applicants (City and Valuer) on a punitive scale (attorney and client), including previously reserved costs.
One Response
Thank you for the article regarding The Oaks. It is interesting to note that in Bloemfontein (Mangaung Metro) that the council rates properties as per their use, whether legal or not. For example a residential house used as a café/shop will be rates as a full business. in Bloemfontein a house on a commercial zone would still be rated as commercial. I would like to suggest that as sectional units are rated individually (the body corporate does not collect rates and taxes for the scheme, this is paid by individual owners directly to Metro), that each individual unit would be individually rated. Thus in the above case, in my opinion, the individual owners should have brought their cases independently, as the body corporate is not responsible for the rates and taxes. I understand why this was done by the body corporate for convenience, but the case could well have been thrown out for this reason.
It would be interesting to point out that multiuse properties such as shopping centres with offices and apartments above could well have different rates for each type of property within the building rather than a single rate for the whole building.