Farmers 1, dysfunctional municipality 0
Judge links existence of lower rates and taxes for farmers to importance of food security
The Supreme Court of Appeal (SCA), in a recent ruling on property taxes, has struck a delicate balance between food security and municipal authority.
The outcome also reveals how brazen some local governments can be in ignoring the law and how incompetent some are in managing their affairs.
South Africa’s courts have identified municipalities that can’t pay for bulk electricity and water purchases: Lekwa (Standerton), Maluti-a-Phofung (Harrismith), Kai !Garib (Kakamas), Ngwathe (Parys) and the City of Matlosana (Klerksdorp).
When Matlosana municipality raced to court to stop Eskom from attaching its bank accounts in July last year, acting judge Grace Goedhart was moved to comment: “The facts in this matter constitute yet another chapter in an unedifying history of two dysfunctional state organs.” Unsurprisingly, she ruled for Eskom in the Joburg high court. The municipality owed Eskom R383m at the time.
Recently, the SCA needed to address the dysfunction and illegality of the Thaba Chweu local municipality (Lydenburg). A group of farmers — the Thaba Chweu Rural Forum — whose lands lie in the municipality’s jurisdiction had been fighting the council since 2009, culminating in a judgment on March 14 that revealed how Thaba Chweu had broken the law.
Judge Selewe Mothle ruled that the council had violated the Local Government: Municipal Property Rates Act by setting the rate at which agricultural properties are levied far higher than the law allows. According to the law, the rate for agricultural properties that conduct livestock and crop farming can’t be higher than a quarter of the rate levied on residential property.
In addition, the act allows for property owners to file objections when valuation rolls are reworked every three years. The Thaba Chweu municipality failed to do this. Also, the municipality did not consult property owners before it set new property rates.
“For each of the years between 2009 and 2017, the appellants [the farmers] attempted, without success, to persuade the respondents [the municipality and its officials] to enable public participation in the process,” Mothle said.
“A trend should not develop, or precedent established, where there would be no consequences when municipalities function outside the parameters of the law.”
He declared the rates charged on agricultural properties for 2009 to 2018 to be unlawful. Instead, the farmers could pay the lower rates determined by the act for that period. Farmers who had withheld payment over those years would need to pay interest on the amounts owed.
He also ruled that those farmers who had paid their property taxes be credited by
the municipality.
Evidence of the municipality’s slipshod record-keeping emerged during the hearing. Mothle said the local council could not provide notices and minutes of meetings when the second property valuation roll of 2014/2015 had been determined.
The judge referred to the importance of food security and how the lower rates for farmers exist to ensure this happened: “[It] serves the public interest, in that it is intended to ensure the continuous supply of food, a factor vital for the nation’s food security.”
Thaba
Chweu spokesperson Themba
Sibiya acknowledged receipt of questions from the FM, but hadn’t responded by the time of going to print.
Robert Davel, CEO of Mpumalanga Agri, an umbrella body of farmers in the province, welcomed the judgment: “It’s heartening that somewhere out there is someone who acknowledges the value of agriculture. If a judge can see the value, it is a good thing.”
The Thaba Chweu farmers, some of whom are also members of Mpumalanga Agri, are not the only ones in judicial battles with local municipalities. Davel says Agri Piet Retief, which represents farmers in the province’s southeast, is also litigating for reasons similar to those of the Thaba Chweu group. Its legal target is the Mkhondo local municipality.
“Somewhere the municipalities must surely get the message and stop wasting taxpayers’ money. Somewhere they must stop litigating and apply the law,” he tells the FM.
The municipality did not consult property owners before it set new property rates