Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd (576/2016) [2017] ZASCA 36; 2017 (4) SA 272 (SCA) (29 March 2017)

Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd (576/2016) [2017] ZASCA 36; 2017 (4) SA 272 (SCA) (29 March 2017)

The Supreme Court of Appeal held that the relevant statutory provisions, when read together, do not entitle a municipality to require payment of property rates for the entire financial year as a condition for issuing a rates clearance certificate. The obligation to pay rates arises within the financial year, and only debts that have become due in the two years preceding the application for the certificate may be demanded. The municipality's policy requiring payment of future rates is ultra vires and invalid. The respondent was only obliged to pay rates up to the date of transfer, and the municipality must refund the overpayment.

Citation
[2017] ZASCA 36
Parties
Appellant: Nelson Mandela Bay Municipality; Respondent: Amber Mountain Investments 3 (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 2017
Case Number
576/2016
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Local Division of the High Court, Port Elizabeth
Outcome
Appeal dismissed with costs.
Judges
Cachalia, Theron, Dambuza, Mocumie, Molemela
Legal Topics
Municipal Property Rates, Rates Clearance Certificate, Statutory Interpretation, Ultra Vires Policy, Local Government Finance, Property Transfer
Land and Property Administrative Law Civil Procedure Municipal Property Rates Rates Clearance Certificate Statutory Interpretation Ultra Vires Policy Local Government Finance +1 more

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Parties

Nelson Mandela Bay Municipality

Appellant

Amber Mountain Investments 3 (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape Local Division of the High Court, Port Elizabeth

Legal Issues

  1. 1 Whether a property owner is liable to pay rates for the entire financial year or only until the date of transfer.
  2. 2 Whether the municipality may require payment of future rates as a condition for issuing a rates clearance certificate.
  3. 3 Whether the municipality's rates policy is ultra vires the governing legislation.

Ratio Decidendi

The Supreme Court of Appeal held that the relevant statutory provisions, when read together, do not entitle a municipality to require payment of property rates for the entire financial year as a condition for issuing a rates clearance certificate. The obligation to pay rates arises within the financial year, and only debts that have become due in the two years preceding the application for the certificate may be demanded. The municipality's policy requiring payment of future rates is ultra vires and invalid. The respondent was only obliged to pay rates up to the date of transfer, and the municipality must refund the overpayment.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.
  • The municipality is ordered to refund the respondent the overpaid amount, including interest.