09/06/2026
[In Legalbrief Case Law Briefs]
PARTIES, NOT THE COURT, DEFINE THE ISSUES
In Msunduzi Municipality v Capital City Housing NPC and Others , the SCA held that it is for the parties, not the court, to define the issues and that the KwaZulu-Natal Division of the High Court, Pietermaritzburg was not entitled to mero motu order the relief it had ordered.
Capital City Housing NPC, an accredited social housing institution and an approved PBO, owns three blocks of residential units in the Msunduzi municipal area. The Municipality categorised the properties as residential under s 8(2)(a) of the Rates Act, affording Capital City a rebate of R45 000 in aggregate. Capital City contended that, properly classified as PBO property under s 8(2)(h) of the Rates Act, it would be entitled to a substantially larger rebate. The definition of "specified public benefit activity" in s 1 of the Rates Act and clause 1.32 of the Municipality's rates policy expressly exclude item 3 (land and housing) of Part I of the Ninth Schedule to the Income Tax Act, under which Capital City's activities fall.
Before the high court Capital City sought a declaration of unconstitutionality in respect of those provisions and a textual reading-in of item 3. The high court declined the declaratory relief sought but, mero motu, ordered the Municipality to create a new category of "social housing properties" under s 8(3) of the Rates Act and to recalculate rates accordingly.
On appeal before the SCA, one of the issues for determination was whether the high court was entitled to grant relief not sought by any party. The SCA reaffirmed the principle in Fischer and Another v Ramahlele and Others (SCA) that in adversarial proceedings it is for the parties, not the court, to define the issues. In casu, no party had asked the court to consider s 8(3) of the Rates Act, no evidence had been led on whether such a category would "circumvent" the mandatory s 8(2) categories, and the parties may have had their own reasons for not pursuing that route.
The high court's order was accordingly found incompetent, set aside and replaced with an order dismissing Capital City’s application.
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