- A landmark Johannesburg High Court ruling has clipped the wings of the city’s Valuation Appeal Board and found it overstepped its powers when it ignored municipal policy in a high-stakes dispute over property rates.
- The judgment makes clear that only a court, not an administrative board, can decide if city policy is unlawful.
- The board’s decision was scrapped, and the matter will be heard afresh before a new panel
Johannesburg’s Valuation Appeal Board has come under fire after the High Court found it overstepped its powers by refusing to apply municipal policy in a high-profile property rates dispute. The board’s decision was set aside and sent back to a new panel for reconsideration.
The High Court’s judgment made it clear that while the Valuation Appeal Board is tasked with applying policy and law, it has no authority to disregard municipal frameworks simply because it believes they clash with broader legislation. That power is reserved for a court of law.
The City of Johannesburg Metropolitan Municipality and its Municipal Valuer brought the review application against the Valuation Appeal Board, the Talisman Foundation and the Old Apostolic Church of Africa.
The dispute concerns a property owned by the church and used by the Talisman Foundation to operate a mental health care facility. Although the foundation is registered as a public benefit organisation, the property was categorised as educational in the City’s valuation roll effective from 1 July 2018.
The Talisman Foundation challenged that classification, arguing that the property should be recognised as one used for public benefit activities. After the objection process failed, the matter was taken on appeal to the board.
The board ruled in favour of the foundation, reclassifying the property as a public benefit organisation property, applying a reduced rating ratio and backdating the classification to 2018. Central to that outcome was the board’s decision to ignore parts of the City’s Rates Policies, which it considered inconsistent with the governing legislation.
The legal dispute
At the core of the case was whether the board could disregard municipal policy because it believed that the policy conflicted with the law. The City argued that the board’s role is confined to applying the statutory and policy framework and not questioning its validity. It contended that by refusing to apply the Rates Policies, the board exceeded its powers and assumed a function reserved for courts.
The City also challenged the board’s reasoning, particularly its conclusion that the use of the property alone was sufficient to justify classification as a public benefit organisation property even though the user was not the owner.
The board defended its decision by relying on its broad appeal powers and arguing that it was entitled to determine the correct categorisation based on the evidence and to decline to apply policy provisions it regarded as inconsistent with higher law.
Court findings
Acting Judge L Windell found that the board fundamentally misunderstood its role. Judge Windell drew a firm boundary around the board’s powers. The board is a creature of statute and derives its authority solely from the Municipal Property Rates Act, said the judge. The judgment makes clear that those powers do not include testing the legality of policy. It does not enjoy the powers of a court and cannot exercise constitutional review jurisdiction.
The court rejected the board’s attempt to reframe its conduct as a neutral interpretive exercise. Whether framed as a declaration of invalidity or as a refusal to apply, the effect is the same. The effect, the court found, was that the board treated the City’s policy as if it were unlawful and therefore not binding.
Judge Windell reinforced a core principle of administrative law. Administrative action remains valid and binding until set aside by a court of competent jurisdiction.
The judgment emphasised that the board’s task was not to reshape the legal framework but to operate within it. Its function was to determine the correctness of the categorisation by applying the applicable legislative and policy framework and not to pronounce upon the validity of that framework.
By stepping outside that mandate, the board committed a jurisdictional error that tainted the entire decision. The court found that once the policy framework was unlawfully disregarded, everything that followed, including the reclassification and the retrospective application, was legally unsustainable.
Outcome and remedy
The court set aside the board’s decision in full and ordered that the appeal be heard afresh by a differently constituted Valuation Appeal Board.
Judge Windell declined to determine the correct categorisation of the property, recognising that this falls within the specialised domain of the board, provided it acts within the limits of its powers.
No order as to costs was made, with the court noting that the dispute was between organs of state within the same municipal system.
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