THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable

Case No: 20771/2014

In the matter between:

CITY OF TSHWANE METROPOLITAN MUNICIPALITY                       APPELLANT
and
UNIQON WONINGS (PTY) LTD                                                          RESPONDENT

Neutral Citation: City of Tshwane  v  Uniqon Wonings  (20771/2014)  [2015]
ZASCA 162 (20 November 2015)
Coram:
Lewis, Cachalia, Theron, Wallis and Saldulker JJA
Heard:
2 November 2015
Delivered:  20 November 2015
Summary:  Municipal property rates: s 118(1) of the Local Government: Municipal
Systems Act 32 of 2000: rates are payable by a township owner over the remaining
extent of the township as a single entity, and not all the unsold erven separately.
Where a township owner sells an erf in the township, and applies for a clearance
certificate in respect of municipal rates and charges, required before transfer can be
effected, the municipality must determine the rates and charges payable over the
preceding two years in connection with that erf and issue the certificate against
payment of that amount.

___________________________________________________________________

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Ebersohn AJ sitting
as court of first instance).
1 The appeal against the first order of the court a quo is upheld and that order is set
aside.
2 The appeal against the second order is dismissed, but the wording is replaced
with:
'(a)
It is declared that the respondent is obliged to value and enter onto its
valuation roll the entire remaining Township property of Six Fountains Estate and not
the individual erven constituting that property in terms of the provisions of the Local
Government: Municipal Property Rates Act 6 of 2004, and to levy property rates and
taxes in terms of the Act calculated on the value of that property for rating purposes.
(b)
It is declared that the respondent is obliged to issue clearance certificates in
terms of s 118(1) of the Local Government: Municipal Systems Act 32 of 2000 in
respect of any erf to be transferred to a purchaser by the applicant once the rates
and other municipal charges incurred in connection with that erf have been
determined and paid.‘
3 The appeal against the seventh order is upheld and that order is set aside.
4 The appeal against the eighth order is upheld and is replaced with:
‗The costs of the application are to be paid by the respondent.‘

___________________________________________________________________
JUDGMENT

Lewis JA ( Cachalia, Theron, Wallis and Saldulker concurring)
[1] In 2003 Uniqon Wonings (Pty) Ltd (Uniqon), the respondent in this appeal, a
property developer, bought farmland (a portion of a farm in Gauteng) in the area of
jurisdiction of the Kungwini Local Municipality (Kungwini) for the purpose of township
development. On Uniqon‘s application to Kungwini, the farm was converted to a
township of 200 erven in accordance with a general plan approved by the Surveyor-
General on 14 January 2003. On 8 April 2003 Kungwini declared that a township, to
be named the Six Fountains Estate, was approved in terms of s 103 of the Town
Planning and Township Ordinance 15 of 1986 (T). Six Fountains Estate now falls
within the jurisdiction of the appellant, the City of Tshwane Metropolitan Municipality
(the City), under which Kungwini, which was disestablished in 2011, has been
subsumed.

[2] Since the inception of the township, Uniqon has encountered difficulties in
respect of the rates levied against the township property. In June 2012 the City
instituted action against it for payment of arrear rates. In 2013 Uniqon sought three
clearance certificates from the City, required by s 118(1) of the Local Government:
Municipal Systems Act 32 of 2000 (the Systems Act), before transfer of erven to
purchasers can take place. The City refused to issue the certificates on the basis
that Uniqon had first to pay the arrear rates on the entire township property. That
was the reason for Uniqon instituting an urgent application in the Gauteng Division of
the High Court, Pretoria, for an order (amongst others) that the City issue the
clearance certificates against tender of payment of the rates it considered due in
connection with each erf.

[3] The dispute hinges on an interpretation of s 118(1): the section (which I shall
discuss more fully later) provides that before the Registrar of Deeds may register the
transfer of immovable property, the transferor must produce a certificate (known as a
clearance certificate) from the municipality in which the property is situated, certifying
that all amounts due to the municipality in respect of services, rates and taxes on
that property have been paid. Section 118(1), in so far as relevant here, reads:

‗Restraint on transfer of property
(1) A registrar of deeds may not register the transfer of property except on production to that
registrar of deeds of a prescribed certificate—
(a) issued by the municipality . . . in which that property is situated; and
(b) which certifies that all amounts that became due in connection with that property for
municipal service fees, surcharges on fees, property rates and other municipal taxes,
levies and duties during the two years preceding the date of application for the
certificate have been fully paid.
. . .
(3) An amount due for municipal service fees, surcharges on fees, property rates and other
municipal taxes, levies and duties is a charge upon the property in connection with which the
amount is owing and enjoys preference over any mortgage bond registered against the
property.‘ (My emphasis.)

[4] Accordingly, where a township owner sells an erf and wishes to transfer it to
the purchaser, it must pay debts owing in connection with the erf to the municipality
in order to implement the transfer. But how does the municipality determine what is
owed in connection with an erf that has been rated until then as part of the township?
That is the question upon which this appeal turns.

[5] Uniqon‘s application was based in the first instance on the principle that only
outstanding rates in connection with each erf were payable before it could obtain a
clearance certificate.  But before the answering affidavit of the City was filed, a
decision in the same Division was handed down by Prinsloo J (Mooikloof Estates

(Edms) Bpk v Die Stadsraad van Tshwane & another (GP), unreported case no
29998/2013, handed down on 14 June 2013). In that matter the court held that until
an erf is transferred to a purchaser by the township owner it does not come into
existence as a separate entity and is thus not rateable: the township owner was thus
obliged to pay only an administration fee to the City in order to obtain a clearance
certificate, and not the arrear rates which the township owner considered to be
payable in connection with the erf.

[6] Jumping at the opportunity the decision offered, in its replying affidavit,
Uniqon asserted that it was liable to pay only an administration fee to the City in
order to get the clearance certificate required to enable the Registrar of Deeds to
register transfer of an erf to a purchaser. Ebersohn AJ found for Uniqon, granting
some prayers by agreement and several others against which the City appeals, with
the leave of this court.

[7] The orders made by the court a quo, and against which the appeal is directed,
are:
‗1
That the matter be treated as an urgent application and that the respondent
be ordered to issue clearance certificates within 7 (seven) days from the date
of handing down this judgment, to the applicant in respect of Stands No 163,
165 and 172 in the Six Fountains Estate upon payment by the applicant of the
application fee of R50,40 (fifty rand and forty cents) per stand.
A declaratory order is issued that respondent has not been and is not entitled
to levy property rates and taxes on stands not having been sold by the
applicant in the Six Fountains Estate to any purchasers and not having been
transferred to any separate individual purchasers, but is entitled only to levy
property rates and taxes on all remaining stands in the Six Fountains Estate,
still registered under the main Title Deed No. T21949/2003, as one property,
in terms of the Property Rates Act, No. 6 of 2004.
. . .

That pending finalisation of any remaining dispute regarding outstanding
property rates and taxes, as referred to in the paragraphs of this order,
respondent is ordered to issue clearance certificates within 7(seven) days
after any application for such certificate is made, in respect of any stand to be
transferred to any purchaser in the Six Fountains Estate if payment is made of
the application fee applicable in respect of the issuing of a clearance
certificate, which is presently R50,40 per application.
The costs of this application shall be paid by the respondent on the scale of
attorney and client which costs shall include the costs of two counsel and the
heads drawn by counsel.‘

[8] As I have said, Ebersohn AJ found that until erven had been sold and
transferred they did not come into existence. I shall deal with that finding  and its
relevance shortly. But first I shall discuss the statutory framework that governs the
rating of immovable property. And it is important to consider the legal principles
applicable to township rating, before discussing the interpretation of s 118(1) of the
Systems Act, read with ss 46 and 47 of the Deeds Registries Act 47 of 1937. And of
course the Local Government: Municipal Property Rates Act 6 of 2004 (the Rates
Act), that governs the rating of all immovable property, must also be taken into
account.

The rating of township property before all erven are sold and transferred
[9] The general principles applicable to the rating of erven in newly created
townships have been established for many years. The liability to pay rates is that of
the registered owner of the property, but once a township has been laid out and a
township register opened the question may arise whether that refers to the owner of
the township or the owner of the individual lots (who may of course, until lots are
sold, be the same person). In Estate Breet v Peri-Urban Areas Health Board 1955
(3) SA 534 (T) at 537G-539H, Ramsbottom J, in a decision of a full court on appeal,
said that the question who is the township owner depends on who is registered as
such in the Deeds Registry. Before erven in a township are sold and transferred, the

township is registered in the name of the owner whose name appears on the
register, which is a question of fact. Evidence was led in that court that after a
township is proclaimed, and in accordance with the requirements of ss 46 and 47 of
the Deeds Registries Act, the Deeds Office opens a register of the township which is
contained in a separate volume. On the flyleaf of the volume the fact of proclamation
is recorded, as is the name of the applicant for proclamation. There is a folio for each
lot as shown in the general plan of the township. But the register of the township
does not supersede the registration of the land on which the township is laid out in
the Register. The person who is the owner of the township is reflected as the original
owner of what was the land on which the township was proclaimed. (Of course the
procedure is now done electronically but the principles remain the same.)

[10] As and when an individual erf is sold, and is transferred to the purchaser, the
transfer is registered on the individual folio bearing the number of the erf. And the
township register is amended accordingly. The township owner remains the owner of
the remaining extent of the township, and its name still appears on the register. This
is the basis on which townships are rated: it is the township as a whole or what
remains that is valued and in respect of which rates and other charges are payable
to a municipality. Erven are rated individually only after they are sold by the township
owner and transferred to purchasers.

[11] The methods of valuation of the remaining extent of a township after some
erven have been sold and transferred were discussed by Kuper J, also in a full court
appeal, in Florida Hills Township Ltd v Roodepoort-Maraisburg Town Council 1961
(2) SA 386 (T). The court, relying on the judgment of Ramsbottom J in Breet, said (at
391H in fine) that: ‗When the area of the remainder is reduced from time to time by
the sale of individual erven the unit of the remainder retains its own identity and
continues to appear as the ―remainder‖ in the Deeds Registry.‘  The court went on to
determine the different ways in which a valuer may approach the valuation of the
remaining extent of a township.

[12] These principles have been applied consistently for decades. However, in
Heritage Hill Home Owners Association v Heritage Hill Devco (Pty) Ltd 2013 (3) SA
447 (GNP) Kollapen J sought to distinguish Florida Hills and an earlier decision to
the same effect (Rynfield Townships Ltd v Benoni Town Council & another 1950 (4)
SA 717 (T)) on the basis that the decisions related only to municipal valuation,
whereas the court in Heritage Hill was faced with the question whether the township
owner, as owner of all unsold erven, was liable to pay levies to the homeowners‘
association. In that matter, said the court, the liability of the township owner to pay
levies to the association was regulated by contract between all owners in the
township.

[13] The City in this matter relies now on Heritage Hill to argue that Uniqon is
owner not of the remaining extent, as a single unit, but of all the individual erven
comprising the remaining extent, and is thus liable to pay rates in respect of each erf.
The court in Heritage Hill also considered that the decision in Kosmos Ridge
Homeowners’ Association v Cosmos Ridge (Pty) Ltd [2003] JOL 11481 (T), which
had relied on the principles set out in Breet and Florida Hills, was wrongly decided.
Much the same issue had been before the court – whether the township owner was
obliged to pay levies to a homeowners‘ association – and Hartzenberg J, relying on
Florida Hills and Rynfield Townships, held that an erf did not come into existence
until it was sold and transferred to a purchaser: ‗[I]ndividuele erwe nie ontstaan
voordat daar ‗n spesifieke oordrag van ‗n spesifieke erf in die Akteskantoor
geregistreer is nie‘ (para 6).

[14] Kollapen J‘s decision in Heritage Hill was confirmed on appeal to a full court
(Heritage Hill Devco (Pty) Ltd v Heritage Hill Homeowners Association [2015]
ZAGPPHC 310 (24 April 2015)) and was approved by Kruger J in Prospect SA
Investments 42 (Pty) Ltd v Lanarco Home Owner Association [ZAKZPHC] 2014 39.  I
do not think it necessary to consider the correctness of the principles set out in
Heritage Hill. The matter before us does indeed deal with rating and not with
homeowners‘ associations and their rights to levy township owners as owners of
individual erven. And so the distinction sought to be drawn in Heritage Hill  between

that and the rating cases is not relevant to this decision. The City‘s reliance on it
does not assist with the interpretation of s 118(1) of the Systems Act.

The way rates were levied on the Six Fountains Estate
[15] Some history of the way in which Kungwini, and the City subsequently, rated
the township shows the practice of the City in determining the rates for the remaining
extent. Initially Kungwini valued and placed on the valuation roll all unsold erven, and
did not rate the township property. Individual municipal accounts were opened for the
unsold erven and not for the remaining extent of the township. Rates were levied
against the individual erven, and not on the remaining extent, despite the fact that it
remained as such on the register. This was plainly incorrect.

[16] When the City gained jurisdiction in respect of the area formerly under
Kungwini, and following complaints by Uniqon and other developers, it attempted to
remedy the situation and deal with the township property as required by the Rates
Act and the principles of the common law. It averred in the answering affidavit that all
rates and tax accounts in respect of unregistered erven were being closed, and
payments in respect of them would be credited to Uniqon. A proper valuation of the
township property, as commercial property, was commissioned by the City, which
determined the value of the remaining extent, subject to a developer‘s rebate. The
new valuation was published in the City‘s supplementary valuation roll for the period
1 July 2010 to 30 June 2013. It opened a new rates and services account in respect
of the township property.

[17] But,  said the City, clearance certificates in respect of individual erven would
be issued only when all municipal debts in respect of the entire township property
were up to date. That, of course, covered only the two-year period before a
certificate was applied for. The City‘s officials calculated the amount payable on the
value of the township property as reflected in the supplementary valuation roll, and
that was required to be paid before any clearance certificate could be issued. Its

stance in opposing the application originally was thus that all debts to the City in
respect of the entire township, including the erven to be sold, were payable before a
clearance certifcate would be issued.

Section 118(1) of the Systems Act
[18] The argument of the City now, relying on Heritage Hill, that each demarcated
erf can be rated and levied before sale and transfer by the township owner, does not
take into account the wording of s 118(1)(b) of the Systems Act. So too, the decision
of Prinsloo J in Mooikloof, which informed the decision of Ebersohn AJ on appeal
before us, that an erf does not come into existence until sold and transferred, such
that it is not rateable as a separate entity before it is sold and transferred, also does
not take into account the clear meaning of s 118(1)(b) of the Systems Act. That
provides that the clearance certificate must certify that ‗all amounts that became due
in connection with that property for municipal service fees, surcharges on fees,
property rates and other municipal taxes, levies and duties during the two years
preceeding the date of application for the certificate have been fully paid (my
emphasis). ‘

[19] In City of Cape Town v Real People Housing (Pty) Ltd [2009] ZASCA 159;
2010 (5) SA 196 (SCA) Nugent JA pointed out (paras 1 and 2) that municipalities are
obliged by the Systems Act (ss 96 and 97) to collect moneys payable to them for
services and property rates. They are required, to that end, to implement a credit-
control and debt-collection policy and to adopt bylaws to give effect to the policy and
its implementation and enforcement. The purpose of ss 118(1) and (3), he said, is to
assist municipalities in two ways.  ‗First, they are given security for repayment of the
debt, in that it is a charge upon the property concerned [s 118(3)]. And secondly,
municipalities are given the capacity to block the transfer of ownership of property
until debts have been paid in certain circumstances. That is the effect of the
provisions of  s118(1): . . .‘ That capacity to block arises because a registrar of deeds
cannot register a transfer until the municipality issues the clearance certificate
applied for.

[20] The City argued on appeal that the court a quo wrongly held that an erf was
not ‗born‘ until it was transferred and that each erf in the township should be
separately rated, even when still owned by the township owner. It relied, as I have
said, on Heritage Hill, which does not deal with the same issue. And I fail to
understand why the principles in Breet and Florida Hills (which underlay the way in
which the City sought to remedy Kungwini‘s defective rating system) should be
ignored. But Uniqon‘s contention that no rates are payable at all in connection with
erven not yet transferred is equally untenable. The township owner is registered as
such in the Deeds Registry and is liable for all municipal charges including property
rates in respect of the entire property comprising the township.

[21] The question that arises, and which the court a quo did not sufficiently
consider, is what meaning is to be ascribed to ‗in connection with that property‘ in
s 118(1) of the Systems Act. It seems to me to be self-evident that amounts that
became due in connection with that property refer to the property that is to be
transferred. The phrase cannot refer to the remaining extent which is not to be
transferred. ‗In connection with‘ means ‗concerning‘ (see the Concise Oxford English
Dictionary (2011) or ‗in respect of‘. The inevitable conclusion is that only that portion
of the debt due by Uniqon in connection with, concerning or in respect of the erf to
be transferred, owing in respect of the period of two years before the date of
application for a clearance certificate, is payable to the City so that it can issue the
certificate in terms of s 118(1), as it is obliged to do. This means that it is necessary
to determine the share of outstanding rates and other charges due in connection with
the erf to be transferred, and that must be paid before a clearance certificare can be
issued.

[22] Uniqon argued, however, that ‗property‘ is defined in the Systems Act, as well
as in the Rates Act and the other statutes regulating local government, as
‗immovable property registered in the name of a person‘. Until transfer of an erf takes
place, the argument goes, it is not property because it is not itself registered in the
name of a person.

[23] However, the definitions do not circumscribe what is meant by ‗that property‘
in s 118(1): the subsection can mean only the property to be transferred by the
owner of the remaining extent of the township to a purchaser of an erf designated as
such on the township plan, whether or not it appears on the valuation roll, or is
registered as a separate entity. Significantly, the Deeds Registries Act defines an erf
(s 102) as ‗every piece of land registered as an erf, lot, plot or stand in a deeds
registry, and includes every defined portion, not intended to be a public place, of a
piece of land laid out as a township, whether or not it has been formally recognised,
approved or proclaimed as such‘.

[24] The City has, in effect, argued that we must broaden the meaning of ‗that
property‘ so as to read it as referring to remaining extent of the township. That is
contrary to the general principles of construction of statutes that interfere with rights.
Nugent JA, in City of Cape Town (above) said in para 9, referring to Mkontwana v
Nelson Mandela Metropolitan Municipality & others 2005 (1) SA 530 (CC), that
‗statutes that intrude upon established rights ought to be strictly construed‘. He
referred in this regard to Dadoo Ltd & others v Krugersdorp Municipal Council 1920
AD 530 at 552, where Innes CJ said: ‗It is a wholesome rule of our law which
requires a strict construction to be placed on statutory provisions which interfere with
elementary rights.‘ In Mkontwana the Constitutional Court endorsed this principle in
finding that  s 118(1), while intruding on property rights, passed constitutional
muster.  In my view, the broad interpretation advanced by the City is contrary to this
fundamental principle.

[25] As I see it, the question to be asked, in interpreting s 118(1) of the Systems
Act, is not whether an erf has been separated out and has an independent existence
for the purpose of obtaining a clearance certificate. It is rather whether or not the
outstanding rates and other charges in connection with that erf can be determined
before transfer. Although only that which is on the valuation roll can be rated, Uniqon
was able to determine what proportion of the total rates for the township could be
ascribed to each erf separately.  That is why it tendered to pay to the City a different
amount in respect of each erf that it had sold. I see no reason why the City cannot do

the same. It has the plan of the township and is able to calculate what is outstanding
in connection with a particular erf before issuing a clearance certificate for each erf,
based on the valuation roll for the remaining extent.

[26] That is also the only fair and equitable construction. If it were otherwise a
township owner could be prevented from developing the township by the imposition
of charges in respect of the entire township each time it sold an erf and wished to
pass transfer. It would be equally unfair to deprive the City of the revenue it needs to
run the municipality by holding that only an administrative fee is payable for a
certificate. The practical and equitable way to determine rates for an erf before
transfer is to allocate a pro rata share of the rates due in respect of the township as a
whole, and for the township owner to make payment of that amount in order to
comply with the requirements for obtaining a clearance certificate.  In regard to
municipal charges, unless they are capable of allocation to specific erven, they
should be apportioned in the same way.

[27] In this matter, in any event, Uniqon has averred that it has paid all charges in
respect of the remaining extent in the two-year period before applying for the
clearance certificates. Disputed amounts allegedly owed to Kungwini prior to 1 July
2011 are not in issue for the purpose of obtaining any of the clearance certificates.
And we were advised that the clearance certificates demanded by Uniqon have by
now been issued.

[28] The interpretation of s 118(1) remains in dispute, however, and it is important
that it be settled. The correct construction, on the clear wording of s 118(1), is that a
clearance certificate must be applied for in connection with the property (the
designated erf) that the owner wishes to transfer. The City must certify that all
amounts that became due in connection with that property have been fully paid. The
township owner is not obliged to pay all amounts due in respect of the entire
township when applying for a clearance certficate in respect of an erf sold and to be
transferred.

[29] It is the City‘s obligation to determine the rates attributable to each erf. There
is, of course, nothing to preclude township developers, when applying for clearance
certificates, from presenting their own calculations to expedite the process. The
equitable and practical way of assessing what is due in connection with a particular
erf would be that described in para 26.

[30] In the circumstances, the City‘s appeal against the first order made must be
upheld. The appeal against the second order, that the City is not entitled to levy rates
in respect of individual erven that have not yet been sold, must be dismissed, but the
order will be replaced to reflect the findings of this court. The appeal against the
seventh order, that pending the finalization of remaining disputes between Uniqon
and the City, the City must issue clearance certificates against payment of R50.40,
must also be upheld.

[31] And, finally, costs. Ebersohn AJ in the court a quo ordered costs to be paid by
the City on the scale of attorney and client. The court considered that the City acted
unreasonably in opposing the relief sought in the face of the judgment of Prinsloo J
in Mooikloof. I do not consider that a punitive costs order was warranted. The City
was entitled to proceed on the basis that Mooikloof, which flew in the face of settled
law over decades, was wrongly decided and to oppose on that basis alone. Other
criticisms of the City leveled by Uniqon about tardiness in filing papers and being
obstructive do not warrant a punitive costs order in the court below.

[32] As to costs in this court, each party has achieved partial success. In the
circumstances each should bear its own costs. Accordingly:
1 The appeal against the first order of the court a quo is upheld and that order is set
aside.
2 The appeal against the second order is dismissed, but the wording is replaced
with:

'(a)
It is declared that the respondent is obliged to value and enter onto its
valuation roll the entire remaining township property of Six Fountains Estate and not
the individual erven constituting that property in terms of the provisions of the Local
Government: Municipal Property Rates Act 6 of 2004, and to levy property rates and
taxes in terms of the Act calculated on the value of that property for rating purposes.
(b)
It is declared that the respondent is obliged to issue clearance certificates in
terms of s 118(1) of the Local Government: Municipal Systems Act 32 of 2000 in
respect of any erf to be transferred to a purchaser by the applicant once the rates
and other municipal charges incurred in connection with that erf have been
determined and paid.‘
3 The appeal against the seventh order is upheld and that order is set aside.
4 The appeal against the eighth order is upheld and is replaced with:
‗The costs of the application are to be paid by the respondent.‘

_______________________
C H Lewis
Judge of Appeal

APPEARANCES
For Appellant:
T Strydom SC (with him A Vorster)
Instructed by:
Hugo & Ngwenya Incorporated, Centurion
Phatshoane
Henney
Attorneys,
Bloemfontein

For Respondent:

R du Plessis SC (with him J Stone)
Instructed by:
Len Dekker & Associates, Pretoria
Rosendorff Reitz Barry, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

20 November 2015

STATUS

Immediate

City of Tshwane v Uniqon  Wonings [2015] ZASCA 162

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.

The Supreme Court of Appeal today upheld in part and dismissed in part an
appeal brought by the City of Tshwane against a decision of the Gauteng
Division of the High Court that held that when the owner of township property
wishes to transfer an erf to a purchaser, it need not pay outstanding rates in
respect of the erf in order to obtain a clearance certificate. Section 118(1) of
the Local Government: Municipal Systems Act 32 of 2000 provides that the
Registrar of Deeds may not register transfer of property unless a certificate
(known as a clearance certificate) is issued by the municipality where the
property is situate. The owner of property to be transferred must apply to the
municipality for a certificate that all amounts that became due in connection
with the property for municipal service fees and property rates and other
municipal taxes, amongst others, in the two-year period preceding the date of
application, have been paid.

Uniqon, as a township owner, had applied for clearance certificates in
connection with three erven that it had sold. It tendered to the City what it had
calculated was owing in connection with each erf. The City refused to issue
the certificates applied for until the rates on the entire township, still owned by
the township owner, were paid. Uniqon brought an urgent application for an
order that the certificates be issued against tender of the amounts it

considered were owing. The City opposed the application on the basis that it
could levy rates only on that which was on the valuation roll, which was the
remainder of the township after other erven had been transferred.

The court below, following a decision in the same Division, held that until an
erf is transferred by a township owner it does not exist as a separate entity
and is thus not rateable. The SCA held, however, that this view ignored
generally accepted rating principles and the clear wording of s 118(1) of the
Systems Act.

This court held that the City is obliged to determine a pro rata share of the
rates due in respect of the township as a whole, and for the township owner to
make payment of that pro rata amount in order to comply with the
requirements for obtaining a clearance certificate in connection with the
property to be transferred.