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Last Updated: 11 August 2004
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
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 It repealed various laws which formerly exempted State property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
SAFLII:
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