Nehanda Housing Co-operative Society Limited v Harare City Council (748 of 2022) [2022] ZWHHC 748 (19 October 2022)

1 HH 748-22 HC 2708/21 NEHANDA HOUSING CO-OPERATIVE SOCIETY LIMITED versus HARARE CITY COUNCIL HIGH COURT OF ZIMBABWE BACHI-MZAWAZI J HARARE, 15 September & 19 October 2022 Civil Trial-Stated Case Mr A Mugiya, for the plaintiff Ms CM Mushayi, for the respondent BACHI-MZAWAZI J: This was initially a contested trial which then proceeded as a stated case by mutual consent of the parties after filing a statement of agreed facts. The point of law taken up for argument revolves around the interpretation of s 282(2)(b) of the Urban Councils Act [Chapter 29:15]. The plaintiff a duly registered Co-operative in terms of the laws of Zimbabwe obtained rights to develop and allocate to its members land in what has been once known as Gillingham Township of Gillingham Estate A situated in the District of Salisbury. In turn, they outsourced and contracted Chiswell Investments Private Limited Company to develop the said piece of land in return of three of their registered properties with Deed Numbers 2092/09, 2148/09 and 2021/09 respectively. The defendant is the City of Harare, the city fathers and the authority responsible for the issuing out of State land and all ancillary issues pertaining thereto. When the need to pass transfer of the said properties to the above mentioned third party arose, the plaintiff paid the requisite rates with the defendant to facilitate the issuance of a Rate Clearance Certificate. The defendant refused to grant plaintiff the Rate Clearance Certificate, indicating that, the plaintiff had not complied with certain requirements that would enable them to obtain a certificate of compliance. In that respect, defendant demanded a certificate of compliance as a condition precedent to issuing the Rate Clearance Certificate. From one angle, plaintiff argues that the said statutory provision, sanctions the automatic granting of a rates clearance certificate upon the payment of, or clearing of all outstanding rates and charges. The defendant, on the other, contends that those rates and HH 748-22 HC 2708/21 charges are precedent to the issuance of a rate clearance certificate in terms of the said provision, encompasses the production of a compliance certificate. Consequently, the defendant on 1 June, 2021, instituted these court proceedings by issuing summons commencing action against the defendant praying for the following: a) A declaratur that the refusal of the defendant to issue plaintiff with a Rates Clearance Certificate after the plaintiff had paid the balance of rates is unlawful. b) An order compelling the defendant to issue the plaintiff with a Rates Clearance Certificate within seven days from the date of the order. c) Cost at a legal practitioner and client scale. The defendant subsequently filed both their appearance to defend and plea on the 11 June 2021 and 19 July 2021 respectively, challenging the plaintiff’s move to give stands meant for co-operative members to private companies. In addition, arguing that, as a new strategy they no longer issue Rates Clearance Certificates, to developers without certificates of compliance indicative of their failure to comply with the local authority’s land development permits and processes. These processes include inter alia the payment of endowment fees, assessment of roads, water and sewer connections. Defendant asserted that the plaintiff ‘s failure to avail the said essential document after being requested to do so on numerous occasions has led to the existing interparty stalemate. That being so, they claim that they are entitled to withhold the issuance of the rates clearance certificate until such time the plaintiff produces the certificate of compliance. In response, the plaintiff stated that there was nothing illegal in them engaging a private company to develop the land and paying them for their services with the said stands. They assert that they obtained title to the three properties sometime in 2009, are the registered title holders with paid up rates therefore, they are entitled to their rates clearance certificate. They attest that, s 282(2) (b) of the Urban Councils Act [Chapter 29:15], requires the registered owner of a property to clear rates owed to the local authority and obtain a Certificate of Rate Clearance as proof that they do not owe the Local Council. This certificate, is one of the documents that enables the processes of transfer of ownership of the titled property to another person in terms Deeds Registry Act [Chapter 29:15]. On that note, the issues for determination as captured in the statement of agreed facts referred to earlier are, Whether or not the plaintiff complied with provisions of s 282(2)(b) of the Urban Councils Act [Chapter 29:15], If so whether or not the defendant’s actions in HH 748-22 HC 2708/21 refusing to issue plaintiff with a Rates Clearance Certificates are lawful? Lastly, if not, whether or not defendant should be compelled to issue plaintiff with a Rates Clearance Certificate. Counsel for the plaintiff, opened their case by accentuating that the court is restricted to only to the issue of the issuance of a rates clearance certificate on their titled properties as a certificate of compliance or the general non- compliance with the land development permit requirements are not stipulated requirements in terms of the governing law. They urged the court to confine itself to the requirements for the issuance of a rates clearance certificate as embodied in s 282(2)(b) of the Urban Councils Act [Chapter 29:15]. Plaintiff’s single witness, their administrator, Mr Biggie Machekere, testified that, the original title deeds of the three properties produced as exhibits through him, illustrate and are evidence that, at the time they were issued, the plaintiff had complied with all the requirements of the Local Council, including the production of a certificate of compliance. He however, could not confirm or deny, in his evidence in chief and under cross examination, whether or not the co-operative, as a land developer, had complied with the prerequisites for the obtaining of a certificate of compliance or whether they actual have such a certificate or not. He nevertheless, submitted that all hope is not lost as, the defendant can still exploit other avenues to compel the fulfilment of the land development permit requirements since the plaintiff still has several on-going projects which included untitled and titled stands. The witness, further stated that the lack of a non-compliance certificate should not impinge on their right as title deeds holders to get Rates Clearance Certificates on their properties. The plaintiff closed its case after leading evidence from its single witness. In their opening address the defendant emphasised on the issue of a compliance certificate as a mandatory prerequisite for the issuance of a Rates Clearance Certificate. Their first witness Wonder Mwango, an Error Corrections Officer, within Harare City Council, testified that the rates Clearance Certificates process commences with an application from a person who is either a title deed or a cession holder wanting to effect transfer of property from his name into that of another. One of their roles after receiving such applications is to examine the issue of any outstanding and current rates, as well as any other charges to be paid before granting the certificate. However, he testified that given the rampant non-compliance by most land developers in completing roads, water and sewer connections, they as council, have devised a new tightening of screws strategy of demanding at the forefront the presentation of certificates of compliance by any land developer before the issuance of a Rates Clearance Certificate. HH 748-22 HC 2708/21 Mr Mwango, also submitted that only in rare cases does title pass, as in the case of the three properties in question, to developers before compliance with the requirements of inter alia, reticulation, road servicing and sewer connections. He attested that those exceptional circumstances are when the issuance of title deeds has been done directly by the relevant Ministry. The witness expressed that, even in those unique cases, the relevant Ministry always works hand-in glove with the Local Councils to ensure that all the necessary revenue, income and the standard specified infrastructure mechanisms have been satisfied. The witness reiterated that, the plaintiff up to the date of the trial has failed to produce a compliance certificate resulting in the non-issuance of the rates clearance certificate in contention. When cross examined by the plaintiff’s counsel, the witness failed to provide any laws or authority to support that a certificate of compliance should precede a rates clearance certificate. When further asked to explain, where in s 282(2)(b), was written any other requirement other than the payment of outstanding rates when issuing a Rates Clearance Certificate, he could not do so. Esther Mutemachani, a senior Town Planner, employed by the defendant in the department of works was called as their second witness. She admitted that the plaintiff has Title Deeds, and that the compliance certificate should have been produced at the time they were issued. She also confirmed that there are instances where Title Deeds may be unilaterally issued by the responsible Ministry without the involvement of the local council which complicates the observance of that crucial aspect of a certificate of compliance. That being the case, they as an office have an obligation to ensure that such outstanding compliances are met before issuing any other documents to the defaulting party including the withholding of a Rates Clearance Certificate. The witness could not support her averment with any written policy document or law to the effect that they are entitled to withhold a rates clearance certificate for failure to produce a certificate of non-compliance. On analysis, the issues for determination on the legal points can be narrowed down to one. In my view, the determination of the first issue resolves the rest. The issue of whether or not the plaintiff complied with the provisions of s 282(2)(b) of the Urban Councils Act [Chapter 29:15], can best be answered by firstly, exploring and interrogating the provisions of s 282(2)(b) in relation to Rates Clearance Certificates? Section 282 of the Urban Councils Act [Chapter 29:15] reads: “282 – Certificate required for transfer of property HH 748-22 HC 2708/21 (2) No transfer of land shall be registered in, and no certificate of consolidated or registered title to any land shall be issued by, a Deeds Registry if the law concerned is in a council area or in a local government area administered and controlled by a council or local board, unless there is produced to a Registrar of Deeds a valid certificate issued in terms of this section by the appropriate issuing authority stating – (a) that all rates and charges made and levied in respect of the land during the period of five years immediately preceding the date on which the certificate, in terms of subsection (3), causes to be valid have been paid; or (b) whereas all or any of the ratios and charges levied in respect of the land during the period of five years immediately preceding the date of issue of the certificate have not been paid, that such rates and charges have not been paid and that they are, in the opinion of issuing authority, irrecoverable as the case may be.” In applying the literal rule of interpretation, that is giving the ordinary meaning to the words of the legislature in the above s 282, which are in my opinion, clear and unambiguous. I am of the view that, the section speaks to a certificate that has to be obtained when a person with a Deed of Transfer or registered title wants to transfer his rights in that property to another person. It is a condition precedent to the change of title that, all rates, charges and levies due to the Local Council be paid. Proof of that payment is in the form of a Rates Clearance Certificate. This certificate is one of those integral documents needed by the Deeds Registry in order to facilitate the transfer of ownership from the original owner to the incumbent. See, Zimbabwe Gas (Pvt) Ltd v NR Barber (Pvt) Ltd & Anor SC 3/20. In Tapedza & Ors v Zimbabwe Energy Regulatory Authority & Ors SC 30/20, in the interpretation of statutes, it was highlighted that: “The general principle of interpretation is that the ordinary, plain literal meaning or expression that is popularly understood, is to be adopted, unless that meaning is at variance with the intention as the legislature as shown by the context or otherwise produces an irrational result.” The intention of the legislature as can be construed from the said section, is that once the rates, charges and levies have been cleared then the certificate is issued. See Chegutu Municipality v Manyara 1996 (1) ZLR at 264 D-E. As the name connotes, ‘rates clearance’, speaks to rates, hence, the payment and clearing of any outstanding rates. Section 282(2)(b) is the law governing rates and rates clearance certificates. The definition of charges has been provided for in s 282(1)(b) as “charges” means any charges which are referred to 218, 235(q)(r) s 205, 206 and s 227. I had the occasion of reading through the sections referred to under the definition of charges and I am satisfied that they do not speak to servicing of roads, sewer connections, reticulation or anything to do with a certificate of compliance. They do not relate to a certificate of compliance as a prerequisite to the issuance of a rates clearance certificate. HH 748-22 HC 2708/21 All the witnesses called by the defendant admit that there is no law that dictates that the certificate of compliance is tantamount to a charge or rates in terms of s 282(2)(b). What is of further interest is that, there are already in existence, Title Deeds which were given to the co-operative, the plaintiff herein. The defendant should have taken steps to secure the certificate of compliance required from a land developer before facilitating for the granting of the original rates certificates over the three properties. The defendant’s witnesses testified that even if the issuance of transfer was directly from the relevant ministry there is no way it could have sailed through without satisfying the requirements of the custodian of state land, the local council. At one stage, they alleged without substantiating, that the title deeds may have been fraudulently obtained. What has dawned from the submissions from both sides is that, for one to obtain the initial Title Deed and all the successive changes, of title there must be a rates clearance certificate issued by the local authority where the property is situate. Evidently, the plaintiffs are holders of title to the three properties. It has not been rebutted that they paid their rates in full. It goes without saying that, in terms of the governing section they are entitled to their Rates Clearance Certificate. That is what 282 says. It is the law. Anything done contrary to the law is a legal nullity. The certificate of compliance features nowhere under s 282 of the Urban Councils Act. See, Cerk Enterprises (Private) Limited v Sithole & 3 Ors SC87/20. Understandably, developers are required to service land to the specification of the laws that govern land development, administered by local authorities. The court takes cognisance, that there is a lot of derelict of duty by several developers across the board at the expense of the generality of the public resulting in local councils not issuing certificate of compliances. This results in the delay of passing title to the purchasers or beneficiaries of the stands at the end of the chain. The court has learnt that, for a certificate of compliance to be issued one has to complete all the requirements of servicing roads, reticulation and sewerage needs of the project in question. In this case the demand of a certificate of compliance was supposed to be done or was done, though no evidence to that effect is on record, at the time the three properties were transferred to the plaintiff, the then known contractual land developers. It shows that someone slept on duty at that time. The horse has already bolted. The third party cannot be held to ransom by withholding the rates clearance certificate at this stage, in order to rectify mistakes of the past. More so, if such actions are self-help measures not translated to law. The defendant should have acted within the context of the law as provided for by s 282(2)(b). HH 748-22 HC 2708/21 See, C v C SC 2/2014, Stanley Farms (Pvt) Limited v Chidongo and Ors HH 27/22, Shava v President of the Republic of Zimbabwe HH 23/22. Actions contrary to the law are impermissible. As solace, sight has not been lost that, it is on record that the plaintiff is in- charge of a huge and ongoing land development project within the area in question. The defendants still have an opportunity to pursue their issues pertaining to the certificate of compliance. Though plaintiff does have title over some of the stands therein, there are several others still to be processed. It is my finding that the plaintiff complied with the provisions of s 282(2)(b). Had the legislature intended other charges, actions or requirements, other than those it specifically mentioned it would have included them. See, Tapedza and Ors v Zimbabwe Energy Regulatory above. In that regard the defendant has no right to withhold the plaintiff’s rates clearance certificate in respect to the properties in question. Accordingly: 1. The defendant is ordered to issue the plaintiff with a rate clearance certificate in respect to the properties with Deed of Transfer Numbers 2092/09, 2148/09 and 2021/19 within 21 days of this order. 2. Costs will follow the suit. Mugiya and Muvhami Law Chambers, the plaintiff’s legal practitioners Gambe Law Group, the defendant’s legal practitioners