IN
THE HIGH COURT OF SWAZILAND
I
V
S
Simelane
& 85 others
v
City
council of Mbabane & others
Case
No 1775/98
and
II
Auspect
Property One (Pty) Ltd.
v
City
Council of Mbabane and others
Case
No 1776/98
JUDGMENT
The
applicants in both these matters have joined in a common claim
against the City Council of Mbabane. They all seek the setting aside
of sales in execution of immovable property. The council, to recover
unpaid rates levied by the Council owing by the applicants on their
respective properties, sold the properties. That the debts to the
city council were owing and long overdue for payment is not in issue.
In many cases the Applicants have tendered payment of their
indebtedness, but only subsequent to the sale of the properties. The
council has however been advised that the properties have been
validly sold, and the transactions cannot be reversed.
It
would be difficult to muster much sympathy for the Applicants, most
if not all
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of
whom, have only themselves to blame for the predicament in which they
find themselves. This case is not however, to be decided on sympathy.
The applicants' conduct could, however be a factor in considering the
question of costs.
The
Rating Act 1995 provides a streamlined procedure for the recovery of
unpaid rates. Section 32 deals with "Legal Proceedings for
recovery of rates"
As
soon as possible after the expiry of two months from the date upon
which the rate became due and payable, the collector of rates, is
obliged to submit a schedule of those properties in respect of which
the rate levied has not been paid, and the names of the registered
owners of such properties, to the local authority, (in this case the
Mbabane city council). The council then may institute legal
proceedings for the recovery of the overdue rates from the defaulters
together with interest and penalties.
Institution
of the proceedings is not to be delayed beyond a period of two years
except in circumstances not here applicable.
The
procedure for the recovery of rates in terms of this section
comprises a number of mandatory steps (Section 32(2)). The issue and
service of a summons is dispensed with. Instead the local authority
is required to file with the clerk of the court a statement certified
by the Treasurer, on oath, setting forth the amount of rates payable
by the owner. The clerk of the court is required on receipt thereof
to enter judgment in favour of the local authority against the owner
of the property.
A
copy of such statement is to be posted by the Treasurer to the owner
on the same day as the statement is filed with the clerk of the
court. This is not an invitation to the owner to defend the action
but is only advice that the step of entering judgment has been taken.
It
is specifically, and, peremptorily provided in Section 32(2)(c) that
the statement referred to shall contain a copy of the provisions of
that sub section and sections 29 30 and 31. The purpose of this is
obviously to draw the attention of the owner to the possible
consequences of his default and what has already been done. To
achieve this and to ensure a proper realization by the owner of the
hazards of further continued default in the payment of rates, the
provisions of the sections mentioned must be brought to his
attention.
With
this provision there has been no compliance. The statement filed with
the
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clerk
of the court and posted to the owners of the properties did not
contain a copy of all the sections mentioned. A copy of one such
certificate appears as annexure "CC2" attached to the
affidavit of Japp Motsa, filed by the First respondent in case
1776/98. That document which is intended as an example of the
certificate generally used by the council for the purposes of
compliance with this section, is I assume the form of certificate
which was sent to all the applicants in both cases. It is patently
fatally defective in that no reference at all is made in it to
sections 29 30 and 31. Indeed in purporting to quote the provisions
of section 32(2), reference to the provisions of 29 30 and 31 appears
to have been deliberately omitted. This failure to comply with the
provisions of Section 32 constitutes an omission of a fundamental
requirement of the procedure prescribed.
The
provisions of the section in this regard are for the reasons
mentioned, mandatory. Like other provisions of the section, the
purpose of the legislature is to ensure that the ratepayer is
repeatedly warned of the possible consequences of persistent default
in the payment of rates. Close attention to, and compliance with, the
provisions of the section are essential not only to the fairness but
to the very validity of action taken to recover arrear rates under
Section 32.
Because
of the failure to quote the portions of the act specified the
certificate filed with the clerk of the court, a copy of which should
have been sent to the defaulting ratepayer, the certificate is
fatally defective. All the steps, which followed thereon, from the
entry of judgment to the final sale of the properties are invalid and
will on this account alone, have to be set aside.
Having
come to that conclusion it is not necessary to base the decision of
these applications on any of the other respects in which the
applicants' point out the Council has failed to follow the procedures
prescribed. As they have been raised, a brief reference thereto is
not out of place to indicate the council's surprising inattention to
the prescribed manner in which rates are to be recovered.
Section
32 (3) provides that if any rate remains unpaid after the end of the
financial year for which it was levied, and for the satisfaction of
which no sufficient execution can be made (my emphasis of the very
words of the relative section) the local authority is obliged to take
the further steps therein described. What is important to
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observe
is that the council may only avail itself of the procedure provided
in Section 32(2) (a) if the rates cannot be recovered by execution on
the movable assets of the defaulting owner.
See
Sandton Finance (Pty) Ltd v Clerk of the Magistrate's Court,
Johannesburg and others. 1992 (1) SA 509. This principle is given
statutory recognition by Section 41 (1) of the Magistrate's Court Act
66/1938
In
Karaland (Pty) Ltd v Durban City Council 1957 (4) SA 672 Holmes J
ruled that words to the effect of those quoted require the creditor
to first exhaust the debtor's movables before seeking to execute on
the debtor's immovable property.
In
the present instances, no execution on movables was attempted. The
council does not dispute this
In
dealing with this point, Dr Fine on behalf of the Respondent, sought
to argue that the provisions of the Section were directory and not
mandatory. He referred to Baxter Administrative Law at page 446 and
450. There is nothing in the texts quoted which justifies the
conclusion which he sought to draw namely, that the requirement of
prior unsuccessful attempted execution on movables can be dispensed
with. This then, is a second reason why the sale of the properties
cannot be maintained. There are others.
Had
the Council properly prepared the way for the succeeding step, it
should then, after the end of the financial year for which the rate
had been levied, and if the rate for which no sufficient execution
could be made, remained unpaid, have caused publication to be made in
the prescribed manner of the information specified in Section
32(3)(a). Such publication would include notice to the defaulting
owner to make payment of the amount stated to be owing within two
months of the date of publication. Such notice, in terms of the
section, would, to comply with the provisions of the section, also
inform the owner that in default of such payment application would be
made to court to order that the property be sold by public auction.
A
notice as contemplated in the section was published, but without
judgment having been validly entered and without any attempt at
execution on movables having been made. The Notice was itself
therefore invalid.
Notwithstanding
this invalidity, the council proceeded to apply to the magistrate for
leave to sell by public auction, the properties of those owners still
in default. No
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notice
of the application was given to the Applicants or for that matter to
mortgagees of the properties. The magistrate should not have
entertained the application, without proof of service of the notice
of application. There is no statutory justification for granting
relief on an ex
parte
basis. This is a grave irregularity, and constitutes a further reason
for setting aside the proceedings.
The
sales by public auction of all the properties were conducted in terms
of the magistrate's order, by someone other than a messenger of the
court. It is very arguable that the magistrate had no jurisdiction to
order such a departure from the rules of the court. The procedure of
the rules of court relative to the sale in execution was not
followed. The propriety of this doubtful. I am not making any finding
that the sales are to be set aside on this account, but local
authorities would be well advised to take professional legal advice
and opinion on these matters before embarking on the recovery of
arrear rates in terms of Section 32.
I
observed at the outset that the applicants find themselves having had
to come to court, through their own fault in persisting in their
default in the payment of rates. I have considered this in relation
to the question of costs. I have decided not to mark disapproval of
their conduct, by depriving them of the order for the payment of
their costs. The respondent was at the outset informed of the many
respects in which the procedure adopted was defective in
non-compliance with the provisions of the act. It chose to defend its
actions and must therefore suffer the consequences of losing the
case.
The
applications succeed with costs. The sale by public auction of each
of the applicants' property is declared invalid and. set aside.
S
W
Sapire
Chief
Justice
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