eThekwini Municipality and Another v Independent Schools Association of Southern Africa and Others

The Minister for Cooperative Governance and Traditional Affairs, with the concurrence of the Minister of Finance, promulgated amended regulations in March 2010 under the Local Government: Municipal Property Rates Act 6 of 2004 (MPRA). These regulations capped the rate that municipalities may levy on property owned by public benefit organisations (PBOs), including independent schools, at 25% of the residential property rate. The Independent Schools Association of Southern Africa (ISASA), whose members own PBO properties nationwide, sought to enforce compliance with the regulations against eThekwini Municipality. eThekwini (later joined by Stellenbosch Municipality) refused to apply the cap, arguing that PBO property was not included in its rates policy and challenging the validity and constitutionality of the regulations and section 19(1)(b) of the MPRA. The High Court ruled in favour of ISASA. The municipalities appealed to the Supreme Court of Appeal, and ISASA cross-appealed on limited relief.

The appeal by eThekwini Municipality and Stellenbosch Municipality was dismissed with costs, including the costs of two counsel. The municipalities were held jointly and severally liable for the respondents’ costs. ISASA’s cross-appeal was dismissed with no order as to costs.

This judgment affirms the constitutional authority of national government to regulate municipal property rating powers and clarifies that municipalities are bound by nationally prescribed rate caps under the MPRA. It prevents municipalities from circumventing national regulation by excluding categories of property from their rates policies and strengthens regulatory certainty for public benefit organisations.