BOE Bank Ltd v City of Tshwane Metropolitan Municipality (240/2003) [2005] ZASCA 21; 2005 (4) SA 336 (SCA) (29 March 2005)

BOE Bank Ltd v City of Tshwane Metropolitan Municipality (240/2003) [2005] ZASCA 21; 2005 (4) SA 336 (SCA) (29 March 2005)

Section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 creates a statutory charge over property for all municipal debts, regardless of when they became due, and this charge enjoys preference over any mortgage bond registered against the property, including those registered prior to the commencement of the Act. The time limit in section 118(1) applies only to the embargo on transfer and does not limit the scope of the statutory charge in section 118(3). Applying section 118(3) to existing mortgage bonds does not amount to retrospective effect, as the extended security operates only from the date of commencement of the Act and does not purport to alter the law prior to...

Citation
[2005] ZASCA 21
Parties
Appellant: BOE Bank Limited; Respondent: City of Tshwane Metropolitan Municipality
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 2005
Case Number
240/2003
Procedural Posture
Civil Appeal / Appeal From the High Court
Outcome
Appeal dismissed with costs.
Judges
Scott, Mthiyane, Brand, Conradie, Ponnan
Legal Topics
Municipal Charges, Statutory Hypothec, Interpretation of Statutes, Retrospectivity, Mortgage Priority
Land and Property Civil Procedure Municipal Charges Statutory Hypothec Interpretation of Statutes Retrospectivity Mortgage Priority

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Parties

BOE Bank Limited

Appellant

City of Tshwane Metropolitan Municipality

Respondent

Procedural Posture

Civil Appeal / Appeal From the High Court

Legal Issues

  1. 1 Does the charge upon property created by section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 include debts older than two years?
  2. 2 Does the preference under section 118(3) apply to mortgage bonds registered prior to the commencement of the Act?
  3. 3 Does applying section 118(3) to existing bonds amount to retrospective effect?

Ratio Decidendi

Section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 creates a statutory charge over property for all municipal debts, regardless of when they became due, and this charge enjoys preference over any mortgage bond registered against the property, including those registered prior to the commencement of the Act. The time limit in section 118(1) applies only to the embargo on transfer and does not limit the scope of the statutory charge in section 118(3). Applying section 118(3) to existing mortgage bonds does not amount to retrospective effect, as the extended security operates only from the date of commencement of the Act and does not purport to alter the law prior to...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.
  • The order of the court a quo confirming the municipality's interpretation of section 118(3) is upheld.