Rates Action Group v City of Cape Town

Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal.

RATES ACTION GROUP V THE CITY OF CAPE TOWN

The Supreme Court of Appeal today upheld the decision of the Cape High Court (Budlender AJ) that a municipality is permitted, under the Local Government: Municipal Systems Act 32 of 2000 (the ‘Systems Act’), to levy a rate (an amount based on the municipal value of property) as a charge for sewerage services and refuse removal. A group of ratepayers in Cape Town had objected to the levying of a rate, which had the effect in some instances of substantially increasing the charges for these services. They argued that the City was permitted only to charge a tariff, and that before it could do so, it was obliged by sections 74 and 75 of the Systems Act to adopt a tariff policy and pass by-laws regulating the tariff charges. At the time when the charges in question were levied, the City had not adopted a tariff policy nor passed by-laws.

The Supreme Court of Appeal held, however, that there was no provision in any of the relevant legislation that precluded the charging of a rate for services. A number of other objections to the rate levied for services had been raised in the high court, but these were not pursued on appeal. The appeal was dismissed.