Kalil v Mangaung Metropolitan Municipality

The appellants, who were municipal ratepayers and property owners in the Mangaung Metropolitan Municipality, launched urgent proceedings to interdict the Municipality from adopting its 2013/2014 budget, which included an increased rate on commercial properties. They contended that the Municipality failed to ensure proper public participation in the budget process, that the proposed ratio between residential and business property rates (allegedly 1:3.8) was unlawful under the Municipal Property Rates Act 6 of 2004, and that the increase would prejudice national economic policies. Despite the challenge, the budget resolution was adopted on 30 May 2013 after the High Court dismissed the application with costs. Leave to appeal was granted, and the matter came before the Supreme Court of Appeal as an urgent appeal.

The appeal was dismissed, except that the costs order of the High Court was set aside and replaced with an order that the Municipality pay the appellants’ costs in the court below. No order as to costs was made on appeal.

This case authoritatively clarified that municipalities in South Africa are legally empowered to levy higher rates on business and commercial properties than on residential properties, subject to prescribed ratios. It rejected an interpretation of the Municipal Property Rates Act that would have severely constrained municipal revenue-raising powers and affirmed the proper scope of the principle of legality in municipal budgeting.