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Christo Smith Law Blog

Nelspruit CID – the levy saga

Following a default judgment in the Nelspruit Magistrate’s Court against the Nelspruit CID (City Improvement District) for payment of levies, the CID objected to the public statements made by our offices. We have therefore decided to supply the full facts surrounding the matter and to address their possible complaints.

The full facts are as follows :

A claim of the Nelspruit CID for payment of levies was dismissed by default in the Nelspruit Magistrate’s Court on the 10th May 2016. The local attorneys acting as correspondents for the CID’s attorneys in Johannesburg withdrew from the matter by formal notice. We attended court on behalf of the defendant on the 10th May 2016 for purposes of the trial as the Johannesburg attorneys had not withdrawn and it was presumed that the trial would proceed. Due to the absence of attorneys on behalf of the CID the Court granted judgment by default, which judgment reads as follows :

“The Plaintiff’s claim is dismissed with costs.”

Obviously the matter was not dealt with on the merits, however it is true to say that the claim of the CID was dismissed. We must emphasize that our following statement did imply that the matter was not dealt with on the merits : “In a claim against mr Maseko, an owner of a unit in Plaza 10, the CID’s local attorney withdrew from the case and its claim for payment of levies was dismissed with costs.”

We made certain assumptions from the failure of the CID to appear in Court which we contend are reasonable in the circumstances. Their Nelspruit attorneys withdrew – attorneys normally withdraw  mainly for four reasons : either their clients have lost confidence in them, or there is a lack of funding, their clients are not providing instructions or they have lost interest in the matter. We assumed that an organization such as the CID would not have a lack of funds, would not loose confidence in its attorneys (being merely the local correspondents) and would not merely fail to provide instructions. The only remaining reason was the fact that they have lost interest in the matter, which would logically apply to all other matters. This is especially so in view of the lack of action in other matters.

We have since been informed by their Johannesburg attorneys that the CID has not lost interest in the matter and that the CID is unhappy about our posts. We have not received an explanation for the CID’s failure to prosecute the matter in which judgment was granted. We have taken note that the CID has appointed new local attorneys and stated that their intention is to apply for rescission of the judgment. The application is being awaited. In the meantime the default judgment stands.

The CID, through its attorneys, have also complained that the contention that the levies of the CID are illegal, that the services are not rendered and the levies cannot be enforced, is misleading and harms the CID’s reputation. We have been instructed by clients in Plaza 10 to defend all claims for levies. The basis of their defence is as follows :

  • The raising of levies by a private organization is a delegation by a local authority to collect tax which is unconstitutional ;
  • If the CID may not legally raise taxes on behalf of a local authority, its actions are illegal.
  • The CID was created without compliance with the necessary statutory requirements.
  • The required percentage of land owners for establishment of the CID in the district where Plaza 10 is situated, was not obtained.

These are statements made on the court papers which is public knowledge. We do not contend that a court has held the CID to be illegal or that it is illegal in that sense – we state that it is our legal opinion that the CID, in as far as Plaza 10 owners are concerned, is illegal for the reasons as pleaded on the papers. It is obviously alleged illegality.

The CID in return must provide “services” such as security, beautification and the like. Owners complain that the levies are exorbitant and the services are not provided or in many instances are negligible. This, as well as the basis of the defence are allegations made by owners and which they have a democratic right to voice. The CID, through its attorneys have threatened us with court action unless we retract these statements. We contend that it is the right of citizens in a democratic society to voice their concerns and to state their views regarding services and the legality of institutions. This is exactly the same principle that applies to motorists having to pay allegedly illegal e-tolls.  This is just another reason why the delegating of taxation to private organisations should not be permitted.

We stated previously that “all claims by the CID have been defended”. The CID, through its attorneys complain about this statement, stating that many claims were settled. We rephrase : All the claims dealt with by our office have been defended. We at all times meant to refer only to those claims we know about and which are dealt with by our office.  We challenge the CID to provide details of all parties with whom claims in defended actions have been settled.

We assumed that the CID has lost interest in recovering levies for the following reasons : The attorneys for the CID have failed to react to notices requiring discovery, have failed to apply for trial dates and to take steps in advancement of the matter. Apart from the matter of mr Maseko, our office has two other claims that have not been pursued by the CID. A Plaintiff is required by the rules of court to pursue a matter and obtain a trial date. If the judgment stands and is not set aside it may impact on the CID’s right to claim levies as well as the right of owners to reclaim paid levies.

Nelspruit CID – the levy saga