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[2023] ZAKZPHC 97
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Abaqulusi Local Municipality and Another v Premier of the Province of KwaZulu-Natal and Others (3003/2022P) [2023] ZAKZPHC 97 (15 September 2023)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE NO: 3003/2022P
In
the matter between:-
ABAQULUSI
LOCAL MUNICIPALITY
FIRST
APPLICANT
THE
SPEAKER,
ABAQULISI
LOCAL MUNICIPALITY
SECOND APPLICANT
and
THE
PREMIER OF THE PROVINCE OF
KWAZULU-NATAL
FIRST
RESPONDENT
THE
MEMBER OF THE EXECUTIVE COMMITTEE:
CO-OPERATIVE
GOVERNANCE AND
TRADITIONAL
AFFAIRS, KWAZULU-NATAL
SECOND
RESPONDENT
THE
PROVINCIAL EXECUTIVE COUNCIL
THIRD RESPONDENT
MINISTER
OF CO-OPERATIVE GOVERNANCE
AND
TRADITIONAL AFFAIRS
FOURTH RESPONDENT
ORDER
[1]
The decision by the third respondent taken on 26 January 2022 and
conveyed in the second respondent’s
letter dated 2 February
2022 to “retain” the powers of the second respondent in
terms of the provisions of S139(1)(b)
of the Republic of South Africa
Constitution Act 108 of 1996, is declared to be unconstitutional and
invalid and is hereby set
aside.
[2]
The letter dated 2 February 2022, constituting notice given by the
second respondent to the applicants,
purportedly advising the
applicants of the aforesaid decision, is hereby reviewed and set
aside.
[3]
The first, second and third respondents are directed to pay the costs
of the application for review,
jointly and severally, the one paying
the other to be absolved, with such costs to include the costs
incurred consequent upon the
employment of two counsel.
JUDGMENT
R.
SINGH, AJ:
INTRODUCTION
[1]
This is a matter
involving spheres of government at a provincial and local level and
ultimately the citizenry within a municipality
when provincial
government exercises its powers to intervene in terms of S139(1) of
the constitution.
[2]
The first applicant is
a local municipality established in terms of the Local Government:
Municipal Structures Act 117 of 1998 (“the
Municipal Structures
Act”) which is responsible for
inter
alia
the provision
of services for the district of Vryheid which is situate in
KwaZulu-Natal. The second applicant is the speaker of
the said
municipality. I shall collectively refer to the applicants as “the
municipality”.
[3]
The municipality
challenges the decision by the second and/or third respondents being
the Member of the Executive Committee: Co-operative
Governance and
Traditional Affairs for the Province of KwaZulu-Natal and the
Provincial Executive Council, respectively (I shall
collectively
refer to the first, second and third respondents as “the
province”) to “retain” an intervention
in the
affairs of the municipality in terms of the provisions of section
139(1)(b) of the Republic of South Africa Constitution
Act 108 of
1996 (“the constitution”). The application for review by
the municipality is in terms of the provisions
of the Uniform Rule 53
and the principle of legality.
THE
FACTUAL BACKGROUND
[4]
The common cause facts
between the parties were as follows:-
(a)
the municipality was placed under
administration in terms of S139(1)(b) of the constitution by way of a
notice dated 21 February
2019, following a resolution taken by the
third respondent on that day;
(b)
the intervention was “retained”
by a notice dated 17 April 2020, for a period of six months to 31
October 2020, subject
to a review before the expiry of the six month
period and to its amendment by the addition of extra functions. The
resolution in
this regard was passed on 8 April 2020;
(c)
by way of notice on 26 October 2020,
following a resolution taken on 26 August 2020, the intervention was
“retained”
for a further period ending 31 March 2021;
(d)
by way of notice dated 30 March 2021, the
intervention was extended for a further period ending 31 October
2021. This was
by way of a resolution taken on 28 March 2021;
(e)
by way of a letter dated 2 February 2022,
the second respondent purported to “retain” the
intervention subject to a
review thereof, before or soon after 30
April 2022. The letter called upon the municipality to
co-operate with the “Ministerial
Representative”. I shall
refer to this Notice as “the impugned decision”. The
impugned decision was purportedly
taken by the third respondent on 26
January 2022;
(f)
upon receipt of the impugned decision, the
municipality attempted to communicate with province and seek an
undertaking that province
would take steps to review or revoke its
resolution to “retain” the intervention;
(g)
no such undertaking from province was
forthcoming.
[5]
The municipality then
launched the present application as an urgent application where in
Part A of their notice of motion, they
sought an interim order
restraining province from implementing the impugned decision. The
relief was opposed and was heard by my
sister, Henriques J. who
granted an interim order on 8 April 2022 together with an order that
the first, second and third respondents
pay the costs of the interim
application (Part A of the notice of motion). Leave to appeal against
the interim order was refused.
Province then by way of petition
approached the Supreme Court of Appeal for leave to appeal against
the interim order. By the time
the application for review came before
me, the Supreme Court of Appeal dismissed the application for leave
to appeal with costs
on 20 July 2023.
THE
ISSUES
[6]
In my view, the issues
to be determined are whether:-
(a)
the impugned decision to “retain”
the powers of the third respondent in terms of the provisions of
S139(1)(b) of the
constitution after 31 October 2021 is
unconstitutional and invalid and falls to be set aside in terms of
S172(1)(a) of the constitution;
(b)
if the impugned decision is
unconstitutional and invalid, whether justice and equity of the
matter dictates that the declaration
of invalidity is suspended to
allow the intervention to continue;
(c)
the costs in respect of the application for
review.
THE
PRINCIPLE OF LEGALITY
[7]
The
principle of legality dictates that the exercise of executive actions
are subject to the tenets of the constitution. The courts
are
conferred with authority to determine the legality of the
administrative action of various organs of state
[1]
,
[2]
.
The principle requires that:-
(a)
organs
of state only exercise powers conferred upon them by the constitution
or by way of law that is consistent with the constitution
[3]
.
(b)
any
exercise of power by an organ of state must be rational and must be
related to the purpose for which the power is given
[4]
;
(c)
a rational decision;
(d)
the
decision must be substantively and procedurally rational
[5]
;
(e)
any
executive action taken must be in good faith and without material
error of law
[6]
.
THE
RELEVANT PROVISIONS OF THE CONSTITUTION
[8]
S40
of the constitution states that government is constituted of
national, provincial and local spheres and that all such spheres
are
distinct from each other yet interdependent and interrelated
[7]
.
[9]
S151 of the
constitution affirms that the executive authority of a municipality
is vested with the municipal council and that a
municipal council has
the right to run the local affairs of its community. National or
provincial government may not unnecessarily
interfere with the
municipality’s ability to exercise its powers given that a
municipality provides for “grass roots
democracy”.
[10]
S139(1)
of the Constitution allows a provincial executive to intervene in a
municipality when a municipality does not and cannot
fulfil its
executive obligations in terms of the constitution or the relevant
laws. The provisions of this section is framed in
the present tense
and is concerned with a situation where there is ongoing failure on
the part of a municipality to fulfil its
obligations and not a past
failure. Intervention is therefore is not appropriate for any past
failures and meant to offer support
to the municipality
[8]
.
The duty of the provincial executive is to gather sufficient
information using its monitoring powers and to satisfy itself that
there are objective facts
[9]
to justify an intervention.
[11]
In
short, there must be rational connection in implementing the decision
to intervene in terms of S139
[10]
.
The decision to implement an intervention is the exercise of a public
power and must not be made arbitrarily
[11]
.
[12]
It
is clear that an intervention in terms of S139 is invasive and must
be utilized with great circumspection and not in a manner
which
undermines and unnecessarily usurps the functions of other
spheres
[12]
.
An intervention is also not meant to continue
ad
infinitum
.
It
in my view, is meant to be rehabilitative and a mechanism which is
meant to help a government sphere get on its feet and not
“gag”
the relevant government sphere.
[13]
It is also for the
aforegoing reasons that S147 of the Municipal Finance Management Act
56 of 2003 (MFMA) requires that provincial
interventions be regularly
reviewed by the MEC for Local Government or the MEC for Finance in a
province. All of these safeguards
are to ensure that a
municipality which has been democratically elected is able to
regulate its own affairs.
REMEDY
[14]
A
court has no discretion but to declare a decision to be unlawful in
terms of S172(1)(a) of the constitution once it finds that
an
irregularity has been committed. Once such finding is made, the
consequences of such finding must be dealt with by an order
that is
just and equitable
[13]
,
[14]
,
[15]
.
[15]
A
court making a determination in terms of S172(1)(b) has wide remedial
power
[16]
.
THE MUNICIPALITY’S
SUBMISSIONS
[16]
Mr Goddard
SC who appeared with
Ms
Palmer
argued that
each of the grounds of review are on the premise that the
intervention ended on 31 October 2021, following a resolution
which
passed by the third respondent on 28 March 2021 that expressly stated
“ending 31 October 2021”.
[17]
Further, province’s
ministerial representative vacated his office and had taken up
employment as a municipal manager at another
municipality. The said
ministerial representative’s signing authorities in respect of
the municipal bank account also ended
on 31 October 2021. This
effectively meant that province did not have any presence in the
municipality. After a new council was
elected following the elections
on 1 November 2021, municipality’s business affairs were
conducted without intervention.
[18]
The municipality
therefore argued that the impugned decision to “retain”
the intervention was
ultra
vires
and contrary
to the provisions of S139 of the Constitution and the relevant
provisions of MFMA. Province could therefore not “retain”
an intervention which ceased to exist in the first place.
[19]
With regard to the
second ground of review, namely that the decision was substantively
and procedurally irrational, the municipality
argued that the
irrationality arose as the impugned decision was premised on
factually incorrect assumptions, namely that there
was something to
be “retained” when such intervention no longer existed.
[20]
The irrationality
further arose because there was no failure to fulfil an executive
obligation on the part of the municipality anywhere
from the record
and therefore province had failed to satisfy the jurisdictional
threshold envisaged in S139(1)(b). It was submitted
that all the
facts relied upon in the impugned decision were out of date or not
facts at all alternatively, without the true facts
at the
municipality being known.
[21]
The municipality
further argued that province should only intervene and assume
responsibility for municipal function unless really
necessary and
justified by the existence of requisite jurisdictional factors and
after requisite procedures and safeguards had
been observed. Province
had failed to do this and therefore misconstrued its powers in terms
of S139(1).
[22]
It was submitted that
province had taken irrelevant considerations into account and ignored
relevant considerations. Ultimately
it was not permitted to act as it
did therefore rendering the impugned decision contrary to the
principle of legality.
PROVINCE’S
SUBMISSIONS
[23]
Mr
Dickson
SC
who appeared on behalf of province argued that the provisions of S139
does not emphasize merely a discretion to intervene but
also a duty
to intervene where a municipality cannot, or does not, fulfil its
executive obligations. He relied on the case of Premier,
Gauteng and
Others v Democratic Alliance and Others
[17]
which dealt with various principles to be considered when an
intervention is to be made those being, namely that:-
(a)
there must be a failure to fulfil
obligations;
(b)
appropriate steps must be taken in light of
such failure to fulfil obligations;
(c)
responsibility must be taken for the
unfulfilled obligations to the extent that it is necessary.
[24]
In its heads of
argument, province submitted that the steps to be taken are
non-exhaustive and the primary purpose should be to
assist the
municipality bearing in mind that people and their interest comes
first.
[25]
In respect of the
intervention itself, province in its heads of argument stated that
the intervention continued from the initial
decision until March 2021
when it was extended for a further period ending 31 October 2021. The
local government elections took
place on 1 November 2021 and in the
meantime the Minister of Finance on 26 October 2021 wrote to the
first respondent addressing
the issues of interventions which spread
over the elections and directed the first respondent on the
continuation of interventions
(“the letter”). It was
further submitted that this had to be read with the
COGTA/Treasury/SALGA circular (“the
circular”). Province
therefore complied with the letter and circular and at a meeting of
the executive council which took
place on 26 January 2022, it made a
decision on “retaining” the intervention. It also took
into account a “secret”
memorandum to the third
respondent in respect of the municipality (“the secret
memorandum”).
[26]
At this point, I might
mention that the letter identified thirty municipalities under
different modes of intervention. In the absence
of guidance in the
constitution or any other legislation as to what would happen to
municipalities under intervention during the
transition from one term
of municipal councils to the next, the letter was intended to guide
province on what needed to be done
in respect of affected
municipalities. From the secret memorandum, it is clear that the
purpose was to outline the progress made
in the implementation of the
intervention at the municipality following a decision of the third
respondent to extend the intervention
for “a further period
extending to 31 October 2021”. The secret memorandum is
undated and unsigned and is suggestive
of having only considered the
municipality for the period up to and including 31 October 2021 and
not beyond that date.
[27]
With regard to the
issue of “retaining” the intervention, province argued
that the word “retain” is defined
in the Shorter Oxford
English Dictionary as “to keep in custody or under control; to
prevent from departing, issuing or separating;
to hold fixed in some
place or position”. The state of affairs in respect of the
municipality was extant up to 31 October
2021 and three months later
the third respondent directed that it be “retained”.
Province accordingly submitted that
even if the state of intervention
fell away, it was thereafter retained with the effect being of
reinstating the intervention.
APPLICATION
OF THE FACTS TO THE LAW
[28]
In arriving at a
decision it is necessary to consider whether the evidence on record
establishes factual existence of irregularity
and if so, whether such
irregularity is material.
[29]
There is no doubt that
Sections 40 and 151 of the constitution are clear that the different
spheres of government are distinct from
each other and that a
municipal council has the right to run the local affairs of its
committee without undue interference from
national or provincial
government so that such municipality serves the community and
citizenry that voted it into power in the
first place. This right
however is not unfettered and the provisions of S139(1) provide for
intervention under appropriate circumstances.
[30]
Our courts have
recognized that such intervention must however be based on a proper
assessment of objective facts and not on any
past failures on the
part of a municipality to fulfil its executive obligations. I have
mentioned earlier on in this judgment that
the purpose of
intervention is not to “gag” a municipality nor is the
purpose to intervene to be taken arbitrarily.
Further, intervention
is not to be used as a means of penalizing a municipality. For
provincial government to intervene without
taking into consideration
these factors, will result in it acting unconstitutionally,
unlawfully and
ultra
vires
.
[31]
There was nothing on
the papers before me to suggest that province had notified the
municipality on or before 31 October 2021 of
any retention and/or
extension of the intervention. Further the ministerial representative
had vacated his office within the municipality
and his signing
authority in respect of the municipality’s bank account had
also terminated by 31 October 2021. This was
not disputed by province
in its answering and supplementary affidavits on the papers. During
the hearing, I specifically asked
province’s counsel what
province’s submissions were in this regard and it was submitted
that the position was being
in the process of being filled. I am
therefore of the view that as at 31 October 2021, province did not
have presence within the
municipality nor was there evidence of any
checks and balances in place to oversee the running of the
municipality by province
from 1 November 2021 until 2 February 2022
when the impugned decision was communicated to the municipality. The
letter dated 2
February 2022 which purported to retain the
intervention cannot therefore be construed to be reviving or
resuscitating the intervention
when province by 31 October 2021
simply have no presence within the municipality.
[32]
In its opposition to
the application, province placed reliance on the letter dated 26
October 2021 which addressed the issue of
interventions in respect of
municipalities including, Abaqulusi Municipality and recommended that
existing interventions should
be continued. This was the reason why
the intervention in question continued throughout and after the local
elections. Province
went on its papers to state that shortly after
the letter or about the same time, the circular was published dealing
with transitional
measures surrounding local government elections and
provided guidelines for how interventions were to continue. Province
was accordingly
of the view that they had complied with the letter
and the circular.
[33]
Given the invasive
effect of an intervention, I am of the view that province’s
submissions that it was acting on the recommendations
of these two
documents simply cannot pass muster. Provincial government does not
exist to simply act as a rubber stamp to any circular
or document
received by any other governmental spheres. It is incumbent on
province that before it intervenes in local government
affairs to
ensure that any recommendations and guidelines apply specifically to
the local government sphere concerned. In
casu
province failed to do this and merely adopted the approach that any
recommendations from the Minister of Finance and/or SALGA could
be
adopted with a blanket approach. Such an approach is in my view,
unconstitutional, unlawful and falls to be set aside in terms
of
S172(1)(a) of the constitution. I am satisfied that the impugned
decision is therefore unconstitutional, unlawful and must be
set
aside.
[34]
This then brings me to
what a just and equitable remedy is in the face of declaring the
impugned decision to be unconstitutional.
The municipality submitted
that province had not provided any evidence as to what executive
obligations were outstanding by the
municipality despite being
challenged to do so and further any financial reasons for a continued
intervention were based on purported
reasons
ex
post facto.
Continued intervention is not justified and that the correct remedy
would be to set aside the impugned decision. Municipality submitted
that there was insufficient evidence on the papers for me to decide
whether the position in the municipality had improved or deteriorated
and to allow an intervention to continue based on that would be to
undermine the democracy of the people that voted the municipality
into power.
[35]
Mr Dickson
SC submitted on province’s
behalf that even if I declare the impugned decision to be
unconstitutional, S172(1)(b) gave me
a discretion in the interest of
justice to suspend the period of invalidity because the municipality
had failed to fulfil its executive
function and that the expenditure
within the municipality was growing larger. There were also various
breaches of the MFMA and
overall the municipality was delinquent.
[36]
I am of the view that
the letter dated 2 February 2022 constituting notice given by the
second respondent to the municipality advising
the municipality of
its decision to retain the powers of the second respondent in terms
of S139(1)(b) of the constitution falls
to be reviewed and set aside.
It is not in the interest of justice or equity that province be
allowed to continue with an intervention
which had lapsed and in
respect of which there are no objective and up to date facts to
justify further intervention. If province
believes that intervention
is necessary, then it must conduct proper investigations to justify
intervention. I say this because
for nearly three months, province
did not have a presence within the municipality.
COSTS
[37]
Municipality argued
that costs must follow the result and that they are entitled to the
costs of the application in the event that
I grant them the relief in
part B of the notice of motion. Further province had failed to
observe co-operative governance protocol
and ultimately it would be
the ratepayers who would suffer the most if an adequate order for
costs is not made against province.
[38]
Mr
Dickson
relied
on the Biowatch principle
[18]
and submitted that as both parties were organs of state, I ought to
exercise my discretion and order each party to pay its own
costs.
[39]
I am of the view that
costs must follow the result and that the municipality has been
successful in the application for review.
The first, second and third
respondents being the respondents who opposed the application must
pay the costs of the application
jointly and severally the one paying
the other to be absolved including the costs consequent upon the
employment of two counsel.
The municipality in Part B of its notice
of motion sought costs on an attorney and client scale. I am not
satisfied that such a
case is made out and costs are therefore
awarded on a party and party scale.
CONCLUSION
[40]
In the result, I make
the following order:-
(a)
The decision by the third respondent taken
on 26 January 2022 and conveyed in the second respondent’s
letter dated 2 February
2022 to “retain” the powers of
the second respondent in terms of the provisions of S139(1)(b) of the
Republic of South
Africa Constitution Act 108 of 1996, is declared to
be unconstitutional and invalid and is hereby set aside.
(b)
The letter dated 2 February 2022,
constituting notice given by the second respondent to the applicants,
purportedly advising the
applicants of the aforesaid decision, is
hereby reviewed and set aside.
(c)
The first, second and third respondents are
directed to pay the costs of the application for review, jointly and
severally, the
one paying the other to be absolved, with such costs
to include the costs incurred consequent upon the employment of two
counsel.
R. SINGH, AJ
DATE OF HEARING: 11
AUGUST 2023
DATE OF JUDGMENT: 15
SEPTEMBER 2023
Applicants’
Counsel:
Mr
G.D. Goddard SC with Ms T. Palmer instructed by Garlicke Bousfield
Incorporated,
Applicants’
Attorneys, 7 Torsvale Crescent, La Lucia Office Estate, La Lucia
Email:
phila.magwaza@gb.co.za
Ref:
Phila Magwaza/pm/P0330/19
C/o
Stowell and Company Attorneys, 295 Pietermaritz Street,
Pietermaritzburg
Ref:
Ms Sarah Myhill
Counsel
for the First, Second and Third Respondents:
Mr
A.J. Dickson SC instructed by Siva Chetty and Company, 378
Langalibalele Street, Pietermaritzburg
Tel:
033-3429636
Fax:
033-3439639
Email:
sivachetty@mweb.co.za
Ref:
Mr S.N. Chetty/KP/SOG16
[1]
Pharmaceutical Manufacturers Association of South Africa: In Re Ex
Parte President of the Republic of South Africa
[2000] ZACC 1
;
2000 (2) SA 674
(CC)
at paragraph 40;
[2]
Airports
Company South Africa v Tswelokgotso Trading Enterprises CC
(2019)
(1) SA 204
(GJ) at paras 6 and 7
[3]
Fedsure
Life Assurance Limited v Greater Johannesburg Transitional
Metropolitan Council
[1998] ZACC 17
;
1999 (1) SA 374
(CC) at paragraphs 56 to 59
[4]
Pharmaceutical
Manufacturers’ case supra at paragraph 85
[5]
Democratic
Alliance v President of South Africa and Others
2013 (1) SA 248
(CC)
at paragraph 34
[6]
Democratic
Alliance v President of South Africa and Others
2012 (1) SA 417
(SCA) at paragraph 112
[7]
City
of Johannesburg Metropolitan Municipality v Gauteng Development
Tribunal
2010 (6) SA 182
(CC) at paragraphs 43 to 44
[8]
City
of Cape Town v Premier, Western Cape and Others
2008 (6) SA 345
(C)
at paragraphs 79 to 80
[9]
Mnquna
Local Municipality and Another v Premier of the Eastern Cape and
Others
[2012] JOL 283
11 (ECB)
[10]
Premier
Gauteng and Others v Democratic Alliance 2022 (1) SA 16 (CC)
[11]
Merfong Demarcation Forum and Others v President of the Republic of
South Africa and Others
[2008] ZACC 10
;
2008 (5) SA 171
CC at paragraph 62
[12]
City of Johannesburg Metropolitan Municipality v
Gauteng
Development Tribunal and Others
2010 (6) SA 182
CC
[13]
Section
172(1)(b) of the Constitution
[14]
De
Lange v Smut NO and Others
[1998] ZACC 6
;
1998 (7) BCLR 779
(CC) at paragraph 104
[15]
Bengwenyama
Minerals (Pty) Limited and Others v Genorah Resources (Pty) Limited
and Others
2011 (4) SA 113
(CC) at paragraph 81
[16]
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Limited
2018 (2) SA 23
CC at paragraph 53
[17]
2022 (1) SA 16
(CC) at paragraphs 74 to 77
[18]
2009 (6) SA 232
(CC)