Landowners in the Lydenburg area came out victorious against the Thaba Chweu Local Municipality (TCLM) after the Supreme Court of Appeal (SCA) ruled that taxes implemented on their agricultural land, was illegal.

According to Eric Johnson, chairperson of the Thaba Chweu Rural Forum (TCRF), their 170 members are elated about the SCA’s finding.

This case started in 2009 when farmers objected to unfair implementation of property tax for agricultural land by TCLM and papers was served before the Mpumalanga High Court (MHC).

The MHC found that the implementation of the taxes by the council was indeed unlawful.

However, the invalid conduct was not set aside due to the court’s view of the delay by the appellants (TCRF) to institute proceeding against the municipality.

In its judgment, the SCA said the municipality had failed to clearly implement the letter of the law and flouted the principle of legality and sought to profit from amounts unlawfully levied.

“Regulations of the Rates Act says that the effective rate applicable to farms could not exceed 25% of the rate applicable to residential properties.

“However, the applicants (municipality) in each financial year in question, levied excessive rates pertaining to inflated property valuations in excess of the prescribed 25%.”

The SCA upheld the appeal of the TCRF and ordered that the municipality be prohibited from recovering from the appellants amounts greater than the legally permissible limit.

The order of the MHC was also set aside and substituted with and order declaring the rates notices published in the Mpumalanga Provincial Gazette for the 2009 to 2018 financial years, in terms of the Local Government: Municipal Property Rates Act 6 of 2004 (Rates Act), as unlawful and invalid to the extent that it relates to arable or pastoral farming.

The SCA ordered the municipality to credit the accounts of TCRF members from whom amounts in excess were recovered.

“What is very worrying is that for 14 years TCLM fought a clearly unwinnable case using taxpayers’ money. The fact that cost orders were made against the municipality in each and every case before the court, shows the fruitless expenses,” Johnson says.

Although he could not speculate on what the cost of the legal battle was, he did indicate that it could run into millions of rands.