Mayisela and Others v MEC for Cooperative Governance and Traditional Affairs: Mpumalanga and Others (3430/2022) [2025] ZAMPMBHC 77 (21 August 2025)

Case Note

Mayisela and Others v Member of the Executive Council for Cooperative Governance and Traditional Affairs, Mpumalanga and Others
(3430/2022) [2025] MPHC (21 August 2025) — Mpumalanga Division, Mbombela

Reportability

This judgment is reportable because it clarifies the circumstances under which a provincial Member of the Executive Council (MEC) may invoke section 106(1)(b) of the Local Government: Municipal Systems Act 32 of 2000. It deals squarely with the jurisdictional facts required before a discretionary forensic investigation may be launched into a municipality, and it delineates when such a decision constitutes “administrative action” reviewable under the Promotion of Administrative Justice Act 3 of 2002. The decision is significant for local-government oversight mechanisms and for private firms contracted to conduct forensic investigations, because it confirms that both the decision to appoint an investigator and the contents of the resultant report can attract judicial review when they produce direct and external legal effect.

Cases Cited

City of Cape Town v Hendricks and Another 2012 (6) SA 492 (SCA)

Legislation Cited

Constitution of the Republic of South Africa, 1996
Local Government: Municipal Systems Act 32 of 2000 — sections 61, 67, 105, 106
Promotion of Administrative Justice Act 3 of 2002 — section 1
Commissions Act 8 of 1947 — sections 2–6
Local Government: Regulations on Appointment and Conditions of Employment of Senior Managers, GN 21 in GG 37245

Rules of Court Cited

No specific Uniform Rules of Court were referenced in the judgment.

HEADNOTE

Summary

The applicants, comprising senior officials of Emalahleni Local Municipality, applied to review and set aside three decisions of the MEC: (i) the designation of Analytical Forensic Investigation Services (Pty) Ltd (AFIS) under section 106(1)(b) of the Municipal Systems Act, (ii) the compilation of the AFIS report, and (iii) the adoption and tabling of that report before the Provincial Executive Council. They contended that the MEC lacked the requisite “reason to believe” jurisdictional facts, that mandatory procedural steps (including section 106(3) reporting to the NCOP) were ignored, and that they were denied audi alteram partem during the investigation. The MEC and AFIS opposed, arguing that the decisions were not administrative action and that the applicants lacked locus standi because the investigation targeted the municipality, not individuals. Mashile J held that the appointment and report had direct, external legal effect, were therefore administrative action, and suffered from material procedural and substantive defects.

Key Issues

• Whether the MEC’s invocation of section 106(1)(b) was ultra vires for want of jurisdictional facts.
• Whether the decisions amounted to “administrative action” subject to PAJA review.
• Compliance with mandatory procedural safeguards in section 106(3).
• Observance of audi alteram partem during the forensic investigation.
• Rationality and legality of the AFIS findings and recommendations.

Held

The court held that the MEC had no lawful basis to appoint AFIS because she already possessed the municipality’s comprehensive response (the ELM Report) and therefore lacked any bona fide “reason to believe” in maladministration or fraud. Her failure to file the required statement with the NCOP breached section 106(3). Both the appointment of AFIS and the resulting report produced direct, external legal consequences, qualifying as administrative action reviewable under PAJA. The investigation was procedurally unfair and tainted by bias, and the AFIS report was riddled with factual and legal errors. All three impugned decisions were reviewed and set aside with costs jointly and severally against the MEC and AFIS.

THE FACTS

The MEC issued a notice in terms of section 106(1)(a) on 30 November 2020 requesting extensive information on alleged financial irregularities, stalled infrastructure projects, and malpractice within Emalahleni Local Municipality. Although the notice was only received on 18 January 2021, the municipality responded on 25 January 2021 with a detailed “ELM Report” addressing every allegation. Six months later, on 3 August 2021, the MEC nevertheless appointed AFIS under section 106(1)(b) to conduct a forensic investigation into precisely the same matters, without indicating any dissatisfaction with the ELM Report.

AFIS demanded 27 categories of municipal documents, conducted closed-door interviews and inspections, and, according to the applicants, refused to apprise them of adverse allegations or permit legal representation. A draft report was leaked on social media in March 2022, prompting the applicants to request confirmation of its status and an opportunity to make representations. The MEC denied knowledge of the leak and insisted that issues would be addressed after finalisation. An urgent interdict failed, partly because the MEC deposed that the report was not yet final. Nevertheless, AFIS delivered a final report to the MEC in April 2022, and on 13 July 2022 the applicants learnt via a media statement that the Provincial Executive Council had adopted the report and mandated its implementation.

The AFIS report contained scathing findings against the applicants, recommending disciplinary and criminal action and recovery of alleged financial losses. The applicants contended that many conclusions ignored documentary proof previously supplied, relied on unsworn hearsay, and misapplied legal requirements governing travel allowances, salary adjustments, and contract management.

THE ISSUES

First, the court had to decide whether the MEC’s designation of AFIS and the consequent report constituted administrative action reviewable under PAJA or were merely preliminary, internal steps immune from review. Second, it had to determine whether the statutory prerequisites for section 106(1)(b) were satisfied, notably the existence of a bona fide “reason to believe” in maladministration or fraud and compliance with section 106(3) reporting obligations. Third, the court examined procedural fairness: whether the applicants were afforded an adequate hearing before adverse findings were reached and whether the investigation observed statutory and constitutional safeguards. Finally, the substantive rationality of AFIS’s findings, in light of the evidence allegedly ignored or misconstrued, required assessment.

ANALYSIS

Mashile J began by distinguishing the present matter from City of Cape Town v Hendricks, holding that the decisions under review were not mere warnings but generated direct legal consequences: the applicants’ reputations were impugned, and implementation steps had already been set in motion. Consequently PAJA applied.

Turning to section 106, the court emphasised that either subsection (1)(a) or (1)(b) may be used, but both are conditioned upon the MEC first forming an honest, reasonable belief that statutory obligations are unmet or serious malpractice exists. The MEC’s own chronology undermined such belief: she had the ELM Report in January 2021 yet claimed in August 2021 that no response had been received. Her failure to provide the mandatory written statement to the NCOP within 14 days further vitiated legality.

The court analysed specific findings in the AFIS report concerning travel allowances, salary adjustments, and two infrastructure projects. In each instance documentary and regulatory material supplied by the applicants (including council resolutions, Labour Court orders, contract-management policies and deviation memoranda) contradicted AFIS’s conclusions. The reality that AFIS either ignored or failed to verify these documents showed a pre-conceived narrative and bias. Moreover, the applicants were denied audi alteram partem: interviews were held in camera, witnesses were unsworn, legal representation was refused, and the applicants were never invited to respond to draft findings.

Collectively, these defects rendered the investigation irrational, procedurally unfair, and tainted by mala fides. The court found that the MEC’s conduct amounted to perjury in asserting that the municipality had not responded and in denying the finality of the leaked report. Such dishonesty confirmed bias and illegality.

REMEDY

The court reviewed and set aside:
1. The MEC’s decision to designate AFIS under section 106(1)(b);
2. The entire AFIS forensic report; and
3. The MEC’s adoption and tabling of that report before the Provincial Executive Council.

Costs were awarded jointly and severally against the MEC and AFIS in favour of the applicants.

LEGAL PRINCIPLES

The judgment affirms that a decision to launch a section 106 investigation, and the resultant forensic report, are administrative actions subject to PAJA where they have direct and external legal effect. A bona fide “reason to believe” in maladministration or fraud is a jurisdictional fact for invoking section 106(1)(b); absence of such belief, or failure to comply with section 106(3) reporting to the NCOP and relevant ministers, renders the decision ultra vires.

Procedural fairness demands that officials potentially implicated in an investigation be notified of adverse allegations, given access to evidence relied upon, and afforded a genuine opportunity to respond before findings are finalised and published. Investigators acting under state mandate are organs of state for PAJA purposes, even if privately contracted. Finally, where bias, mala fides or perjury taint the investigative process, courts will not hesitate to set aside both the appointment of investigators and their reports, and to award punitive costs.