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HIGH COURT UPHOLDS THE VIEWS OF RATES WATCH




In a judgement handed down by Judge M Tsoka, the opinion held by Rates Watch that a rates policy of a municipality cannot override an act of parliament was upheld. In the matter of 


The City of Johannesburg Metropolitan Municipality -ApplicantAndThe Chairman of the Valuation Appeal Board- Johannesburg - First RespondentAndConnaught Properties (Pty) Ltd - Second Respondent
The appeal by the City of Joburg to have the decision of their own Valuation Appeal Board rescinded was dismissed by the High Court with costs against the City of Joburg.  


Background 

An appeal was lodged on behalf of Connaught Properties by Rates Watch against the incorrect category entry made by the Municipal Valuer of Johannesburg, relating to certain properties owned by Connaught.The appeal was handled by the Ceo of Rates Watch, Clive Massel who presented a very thorough and well researched case in front of the Valuation Appeal Board.The appeal revolved around the incorrect entry by the Municipal Valuer of a property used for multipurpose.The City of Joburg argued that in terms of their rates policy they had created a category called "multipurpose" and accordingly could apply a single rate to a property used for more than one purpose.Mr Massel for Rates Watch submitted that this was the incorrect approach and was in conflict with the provisions the Municipal Property Rates Act.He adopted the view the valuation has to be apportioned between the different uses of the property. There is no discretion.The Valuation Appeal Board upheld this view and endorsed the valuation roll in accordance with the request of Rates Watch.The Municipality took no steps to implement this decision. This then resulted in Rates Watch lodging a formal dispute with the City Manager of Johannesburg.As a result of this dispute the municipality then decided to challenge the decision of the Valuation Appeal Board in the High court. In the alternative the City of Joburg sought that the successful appeal by Rates Watch be referred back to the Valuation Appeal Board for reconsideration on the basis of what is set out in the judgement of the court.Their final alternative was to declare the definition of "zoning" and clause 8(1)(i) of their own rates policy invalid in terms of the constitution! Finally the City of Joburg sought that if the judge ruled against the municipality there should be no retrospective effect and that the order should only take effect two years after the court's decision.This is absurd. The statement concedes that they have no case and are asking the court for relief relating to a blatant error that they made from the beginning of their valuation roll.Judge Tsoka stated that:-
Regarding the issue of zoning, this fell within the power of the municipality."In the event that the policy so adopted is inconsistent with the Act, it is for the Municipality to amend such policy and adopt one which is consistent with the act. It is undesirable for courts to usurp the powers that eminently fall within the powers of another arm of government." Once a category of "multipurpose" has been created the value of the property has to be apportioned in terms of the different uses to which the property is being put and rated according to the various uses.
"In the present matter, the greater use of the property is residential while the lesser use is for business purposes. For the municipality to apportion the rates applicable to the properties as its Municipal Valuer did, in my view, is incorrect"The decision of the Valuation Appeal Board was correct."The Valuation Appeal Board's decision was neither influenced by an error of law, nor contravened the Rates Policy of the applicant, which in any event must be consistent with the provisions of the act. There is nothing unconstitutional or unlawful about the interpretation or the decision"The Judge ruled that.The decision of the Valuation Appeal Board was not susceptible to review.Its decision, to uphold the second respondent's appeal, was in his view correct."The application deserves to be dismissed. It is accordingly dismissed with costs which include costs consequent upon the employment of senior counsel where appropriate."  


Implications. 

As a result of the appeal initiated by Rates Watch, where a municipality has created a category -"multipurpose" it is obliged to apply the provisions of the Municipal Property Rates Act, which compels the Municipal Valuer to apportion the market value into the different uses of the property.The costs are likely to be very substantial.The City of Joburg will have to pay for their own costs as well as the costs of the Valuation Appeal Board and the costs of the second applicant.R300, 000 to R400, 000 maybe?What makes this case more disturbing is that the Municipal Valuer under vigorous cross examination by Clive Massel conceded that he was wrong and that the valuations had to be apportioned.
He even suggested the basis of apportionment.Yet, the Municipality still took this matter on appeal.Certainly a costly blunder by the City of Joburg.Property owners who are of the opinion that their property falls into this category should contact Rates Watch for further assistance. 








Recent National Results of Valuation Objections and Appeals 

 (1st April 2009 to 31st May 2012)

  Reduction
Objections R1.502 Billion!
Appeals R572.0 Million!
Section 78 Applications R965.4 Million!
   
Total reduction in value R3.039 Billion!
Total Rates savings  R151.7 Million!





From Your Rates Watch Team "The country's leading professional Municipal Valuation and Rating Watchdog"