Breakers Share Block Limited v Ethekwini Municipality

Breakers Share Block Limited leased immovable property (Erf 1066, Umhlanga Rocks) from the Ethekwini Municipality and was obliged under the lease to pay municipal rates in terms of the Local Government: Municipal Property Rates Act 6 of 2004. The municipality re-categorised the property from 'residential' to 'business and commercial' in a fifth supplementary valuation for the 2013/2014 financial year, which almost doubled the rates payable. The municipality issued a notice in terms of sections 49(1)(a) and 78(2) of the Rates Act informing the appellant of the supplementary valuation. The appellant challenged the validity of the notice, contending that it failed adequately to notify it of the change in categorisation.

The appeal was dismissed with costs, including the costs of two counsel where employed.

The case clarifies the standard of compliance required for notices issued under sections 49 and 78(2) of the Municipal Property Rates Act, confirming that substantive rather than formalistic compliance is sufficient. It provides guidance on municipal obligations when issuing supplementary valuation notices and reinforces the importance of the internal objection process under the Rates Act.