In November 2024, the Supreme Court of Appeal (court) set a precedent for Valuation Appeal Boards (VABs) in South Africa, reaffirming the importance of providing clear and reasoned decisions. The court highlighted that VABs, which are entrusted to adjudicate over valuation appeals in accordance with section 54 of the Local Government: Municipal Property Rates Act, 2004 (Rates Act), must assess all the evidence led during the appeal proceedings, conduct a thorough analysis, and provide reasons for their decisions. In the absence of a properly reasoned decision, such decision is susceptible to judicial review on the grounds of irrationality and unlawfulness.
The court’s dispute emanated from a decision delivered by the VAB for the District of Ehlanzeni, wherein the VAB accepted the valuation method proposed by the valuer for the Nkomazi Local Municipality, without assessing and evaluating the evidence of the ratepayer’s expert witnesses in the appeal proceedings. Additionally, the VAB did not provide reasons for preferring the evidence of the municipality’s expert valuer over that proffered by the ratepayer’s expert witness.
Aggrieved by the decision of the VAB, the ratepayer took the decision of the VAB on judicial review on the basis that the decision by the VAB was (i) influenced by material errors of law, (ii) irrational and (iii) unlawful.
The court was tasked with determining whether:
- the VAB properly assessed and evaluated the evidence of the expert witnesses; and
- the VAB gave reasons for the rejection of the evidence of the ratepayer’s expert witness and preferring the evidence of the municipality’s expert witness.
The court held that:
- The VAB is an administrative decision-making body tasked with an administrative duty to decide appeals before it. In carrying out this duty, it is required to assess and evaluate all evidence brought before it in the appeal proceedings and give reasons for its decision in respect of an appellant’s appeal.
- In terms of section 30(1) of the Rates Act, the municipality is required to carry out a general valuation of the subject property. In order to comply with its duty, the municipality would require the assistance of an expert valuer. Accordingly, the evidence of both the municipality’s and the ratepayer’s expert valuer was of considerable importance in establishing the correct approach to determining the market value of the subject property under appeal.
The court ruled that the VAB was required to assess every piece of evidence, analyse it and provide reasons for its decision. The VAB’s failure to do so rendered its decision irrational and unlawful. Accordingly, the court dismissed the municipality’s appeal.