City of Harare v Forrester Holdings (Pvt) Ltd

### Preamble
1
HH 165-18
HC 5836/17
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CITY OF HARARE

versus

FORRESTER HOLDINGS (PVT) LTD

HIGH COURT OF ZIMBABWE

CHAREWA J

HARARE, 14 February & 28 March 2018

Opposed Application – Special Plea

K Kaseke, for the plaintiff

G R Sithole, for the defendant

CHAREWA J: The plaintiff issued summons against the defendants on 28 June 2017 claiming payment of $54 814, 85 being unpaid rates due to plaintiff by defendant in respect of Rates Account Number 211000882000008, interest at 10% per annum from the date of service of summons to the date of payment and costs of suit.

Subsequently, and before service of summons, and on 14 July 2017, the plaintiff amended its claim to $59 600.71. The amended summons and declaration were served on the defendant on 31 July 2017.

In response thereto, the defendant raised the special plea that plaintiffs action was bad at law and should be dismissed as it was instituted without complying with the peremptory requirements of s279 as read with s281 of the Urban Councils Act [Chapter 29:15] which requires that a demand, in writing, must be made and served before legal proceedings can be instituted.

The facts

Plaintiff is a body corporate entitled to levy rates in respect of rateable property within its area of jurisdiction. Defendant is an owner of rateable property upon which it has an obligation to pay rates to, and in accordance with its rates account with, the plaintiff.

As at 28 February 2017, defendant owed plaintiff $54 814, 85 by way of unpaid rates in terms of the statement attached to its original summons filed on 28 June 2017. The total amount due was then adjusted in terms of the amended summons issued on 14 July 2017, such that as at 15 June 2017, the unpaid rates had accumulated to $59 600.71 as shown on the statement attached to the amended summons and declaration.

Official written demand for payment of rates had last been made on 6 September 2016 in the amount of $36 717.97.

Parties’ submissions

The defendant submits that plaintiff is not entitled to issue summons for $54 814.85 or $59 600.71, as no written demand was made therefor and served on it, in terms of s281. Therefore the claim ought to be dismissed as it is contrary to peremptory provisions of the law. Defendant invites the court to insist on the ordinary, literal and grammatical interpretation of s281.

Further, defendant submits that “may” in s279(2) should be read as “shall”, to create a peremptory or imperative obligation, so that, read together, s279 and 281 have the meaning that all legal proceedings can only be instituted after a plaintiff has observed strict compliance with the requirement to issue and serve a written demand.

For its part, plaintiff argues that the initial written demand for $36 717.97 is sufficient to satisfy the requirements of the law as one demand properly made is sufficient to place defendant in mora, thus obviating the need for repeated insistence to induce mora. Since rates are subject to monthly accumulations, plaintiff submits that it could not have been the intention of the legislature to require urban councils to serve a written demand for payment of rates every month.

Further, plaintiff distinguishes s 279 from s 281, arguing that, with regard to an owner of rateable property, the court gives an urban council discretion to issue and serve a written demand by the use of “may” in s 279 (2). Therefore, where an urban council has elected not to issue and serve a written demand for payment in terms of the discretionary power given to it by s 279 (2), then s 281 (a) does not create any obligation to institute legal proceedings after 14 days of service a written demand. Rather, the obligation created in s 281 will only apply where an urban council has elected to issue and serve a written demand in terms of s 279 (2).

The Law

Section 279 provides as follows

“279	Liability to pay rate

The person who is the owner or of any property on the date on which any rate fixed and levied by the council becomes due and payable shall be primarily liable for that rate.

If, on the date on which a rate becomes due and payable, the owner primarily liable has failed to pay the rate, a demand in writing may be served on him requiring him to pay the amount stated therein within fourteen days of the service of the demand.

If the owner primarily liable for a rate fails to comply with the demand referred to in subsection (2), then any person who at any time during the period in respect of which such rate was fixed and levied-

is the occupier of the property concerned shall, if a demand in writing is served on him by the council, be liable for such rate together with any other unpaid rates in respect of such property, not exceeding the amount of any rent in respect of such property due by him but not yet paid at the time of the demand and shall thereafter continue to pay such rents to the council until the amount of such rates has been paid off:

as agent or otherwise, receives any rent in respect of such property, shall, if a demand in writing is served on him by the council, be liable for such rate, together with any other unpaid rates in respect of that property, not exceeding the amount of any such rent paid to him subsequent to that demand, subject to the deduction by the agent of commission due to him for the collection of such rent.” [the emphasis is mine]

For its part, s 281 provides as follows:

“281	Legal proceedings for recovery of rates

No legal proceedings for the recovery of rates shall be instituted against any person referred to-

in subsection (2) of section two hundred and seventy-nine unless the council has complied with that subsection and the owner has failed within fourteen days to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein; or

in subsection (3) of section two hundred and seventy-nine unless he has failed within thirty days to comply with the demand served on him in terms of that subsection requiring him to pay the amount stated therein, subject to the maximum amount provided for in that subsection.” [the emphasis is mine]

Analysis

The ordinary grammatical and literal interpretation of s 279 clearly distinguishes the treatment of an owner from that of an occupier or agent. Section 279(2) unequivocally gives the discretion to an urban council whether or not to issue and serve a written demand to an owner for unpaid rates by allowing that a council may serve a demand in writing requiring the owner to pay within fourteen days.

On the other hand, by use of the phrase, “shall, if a demand in writing is served on him” s 279(3) obliges a council to issue and serve a written demand to an occupier or agent who is not an owner. This distinction is certainly understandable: an owner receives monthly statements of the rates due and knows at any given month what he owes. An occupier or agent does not ordinarily receive the rates statement for the property he occupies or manages and must perforce be given notice thereof. Besides, an occupier or agent has obligations to the owner, which, if he is not given notice in writing, may make it difficult to comply with a demand which is not written and served on adequate notice.

Consequently, because of the distinction made by the legislature between an owner of rateable property and an occupier or agent in s 279(2) and (3), s 281(b) makes it obligatory that legal proceedings against an occupier or agent can only be instituted thirty days after written demand has been served on such occupier or agent.

Therefore, I do not agree with defendant’s submissions that the word “may” in s 279 (2) must be read as “shall” as it seems to me that the legislature clearly intended to create a distinction between the liability of an owner and that of an occupier or agent. The case of Diocesan Trustees for the Diocese of Harare v The Church of the Province of Central Africa SC9-10 is thus distinguishable.

However, the case is apposite in so far as it confirms the legal position that when the legislature uses the word “may” in conferring power on a public office, the intention is to confer a discretion to do or not to do a thing without a commensurate duty to exercise such power. In that respect, I am of the view that s 279 grants an urban council discretion to either serve or not serve a written demand on an owner of rateable property without creating a duty to do so. Rather, it is my opinion that s281 merely qualifies and explains the modus for instituting legal proceedings where there has been breach of the obligation to pay rates in terms of s 279.

In the premises I agree with the submissions by both counsel, that s281 does not contradict s 279.

Further, the judge in Bulawayo City Council v Trishul Properties HB 4-15, which defendant relies on to support its position, did not make any determination whether or not s279(2) should be read as peremptory. His decision was based on an entirely different proposition. The case is thus also distinguishable.

Resultantly, I find that s 279 (2) is not peremptory in so far as a written demand for rates from an owner is concerned. Thus, any interpretation of s 281(a) that makes a demand for rates by an owner peremptory would create a conflict between the two provisions which are otherwise complementary.

However the requirement to serve a demand in terms of s 279(3) is peremptory as against an occupier or agent.

Further, I do not agree with defendant’s submission that s279 and 281 are in pari materia with s6 and 7 of the State Liabilities Act Chapter 8:14 or s196 (1) of the Customs and Excise Act [Chapter 23:01]. The major and obvious difference is that s 279 (2) is permissive, while s6 and 7 of the State Liabilities Act and s196 of the Customs and Excise Act are entirely peremptory. The case law cited in relation thereto is thus distinguishable.

Therefore, the ordinary, literal and grammatical interpretation of s 281(a) is that, where an urban council has elected to make a written demand for payment in terms of s 279(2), then legal proceedings shall not be instituted unless the owner has failed to comply with that demand within fourteen days of its service. The converse, in my view is also true: where a council has elected not to make a written demand for payment, then it is not barred from instituting legal proceedings at any stage. As plaintiff puts it, where an urban council has exercised its discretion not to serve an owner with a written demand, such property owner cannot be said to have failed, within fourteen days, to comply with the demand.

In the premises, I cannot uphold the special plea.

In passing, I note that plaintiff did make written demand for rates which was served on the defendant on 8 September 2016. The defendant failed to comply with that demand within fourteen days, thus making the institution of legal proceedings possible. I do not believe that where a debt is subject to regular accumulations, as in this case, it was the intention of the legislature that written demand should be made every month as that would be absurd. Further, it cannot have been the intention of the legislature to place such an undue burden on an urban council, given that an owner in any case receives a monthly statement of rates due.

Disposition

Consequently, the special plea is dismissed with costs.

Kanokanga and Partners, plaintiff’s legal practitioners

Wintertons, defendant’s legal practitioners