The practice of providing reasons for any decision taken has always been considered a fundamental element within the realm of law. This principle is especially crucial when a decision has adverse consequences for individuals. Not only is this practice a common and established one, but it also holds great constitutional significance in South Africa. The Constitution of the Republic of South Africa, 1996 (hereinafter referred to as the Constitution), under Section 33(2), explicitly outlines the right of those adversely affected by an administrative action to be furnished with written reasons for that action. Furthermore, this constitutional obligation finds reinforcement in Section 5 of the Promotion of Administrative Justice Act 3 of 2000 (hereafter referred to as "PAJA"), which mandates that administrators must provide reasons for any administrative action they undertake.
In light of these legal principles, a recent case, The Municipal Manager: The City of Johannesburg Metropolitan Municipality and Others v San Ridge Heights Rental Property (Pty) Ltd, stands as a pertinent example. In 2019, the owner of San Ridge Heights, a property comprising 42 buildings and 470 flats, became aware that the Municipal Manager of the City of Johannesburg Metropolitan Municipality, along with the Municipality itself and Johannesburg Water (SOS) Limited, had decided to classify their property as "multiple dwelling" rather than "Block of Flats" in accordance with the tariff policy. This classification had significant financial implications, resulting in a higher monthly fee per flat instead of the more favourable rate.
Unsatisfied with this decision, San Ridge Heights initiated an internal appeal under Section 62 of the Local Government: Municipal Systems Act 32 of 2000 and sent follow-up letters. Regrettably, all internal processes went unanswered by the City and Johannesburg Water. Faced with this lack of response, the company believed it had exhausted all internal avenues for rectifying the decision and turned to the High Court. They argued that the decision was in violation of Section 5 of PAJA, as the City and Johannesburg Water had failed to provide reasons for their decision. The High Court ruled in favour of San Ridge Heights, classifying the property as a "Block of flats."
Unsatisfied with the High Court's decision, the City and Johannesburg Water appealed the verdict. The Supreme Court of Appeal (SCA) acknowledged that the actions of the City and Johannesburg Water constituted administrative decisions. The SCA also noted that the City and Johannesburg Water were aware of their constitutional obligation to provide reasons to those adversely affected by their decisions.
While the SCA recognised the City and Johannesburg Water's failure to provide reasons, they also examined and considered the High Court's decision to classify San Ridge Heights as a "Block of flats” premature. The SCA found that the High Court had erred because it had not obtained rates valuations of the flats, as supported by affidavits from the rental company and the City and Johannesburg Water.
As a result, the SCA partially upheld the appeal, remitting the matter to the City and Johannesburg Water for a diligent re-evaluation of San Ridge Heights' classification under Section 74(1) of the Municipal Systems Act 32 of 2000.
This decision is significant for addressing concerns regarding high water bills and clarifying those whose rights are affected by similar administrative actions. The judgment handed down by the SCA underscores the importance of providing reasons for administrative actions and upholding transparency and fairness in administrative decisions, as mandated by South Africa's legal framework.
Written by: Chris Nong
Moderated by: Clive Smith