Brief Summary

Local Government — Intervention by National Government — Applicants sought intervention under section 139(7) of the Constitution for the dissolution of the Mafube Local Municipality's Council due to failure to meet constitutional obligations — Court found that the Municipality and its officials breached their duties to provide basic services and manage finances effectively — Declared that jurisdictional facts for mandatory national intervention were present and directed national authorities to intervene, implement a Financial Recovery Plan, and report back to the court on progress.

Comprehensive Summary

Summary of Judgment

Introduction

The matter was brought as an application in the Free State Division of the High Court, Bloemfontein, in which the applicants sought wide-ranging constitutional and remedial relief arising from alleged systemic failures in local government in the Mafube area. The litigation was framed as a constitutional challenge directed at compelling governmental intervention measures and obtaining declaratory relief concerning breaches of constitutional and statutory obligations.

The applicants were Mafube Business Forum (a non-profit organisation representing local business interests in Frankfort, Villiers, Tweeling and Cornelia) and AfriForum NPC (a civil-rights non-profit organisation acting on behalf of members within the municipal area). The principal respondents included Mafube Local Municipality and various local office-bearers and structures (including the municipal manager, administrator, executive mayor, municipal council, and the Fezile Dabi District Municipality), as well as provincial executive actors (the Premier, the provincial Executive Council, and relevant MECs) and national executive actors (various Ministers, the National Council of Provinces, and ultimately the President, who was joined later).

The application was issued on 4 May 2021. When initially enrolled on the unopposed roll, a postponement was sought by most respondents to file answering papers; the matter was postponed and thereafter opposed. The applicants amended their notice of motion, including to address a non-joinder point concerning the President. While the application initially contemplated dissolution of the municipal council and national takeover, by the hearing on 27 January 2022 the applicants no longer persisted with the dissolution of the municipal council, and relied primarily on a draft order (“Draft Order C”), with an alternative (“Draft Order D”).

The dispute concerned municipal governance failure, specifically persistent service delivery breakdowns (water, sanitation, refuse, infrastructure), severe financial dysfunction, and the question whether the court could compel national executive intervention under section 139(7) of the Constitution, or whether relief was confined to compelling mandatory provincial intervention under sections 139(4) and 139(5) together with appropriate reporting and remedial steps.

Material Facts

It was materially common cause that Mafube Local Municipality was experiencing serious and persistent operational and financial distress, although the respondents disputed aspects of the extent and current state of certain service-delivery failures. The court treated as significant the long history of repeated breakdowns and the failure of earlier remedial steps to achieve sustained compliance with constitutional and statutory obligations.

Chronologically, the applicants relied on a history of litigation and court orders concerning the municipality’s sewage infrastructure and related environmental harm. The municipality had previously been ordered (2004 and 2008) to repair sewage pumps servicing Namahadi Township, and it was later found in contempt (2014). Further orders followed in 2015 and 2016 concerning sewage spillage and failing sewage works, and a further contempt-related finding occurred in 2017 in relation to non-compliance regarding sewage operations and maintenance.

The applicants also relied on ongoing infrastructure decay and service failures, including poor road conditions and sewage overflow into streets. They attributed these outcomes to chronic municipal dysfunction, compounded by communication failures such as malfunctioning telephone systems and connectivity problems, which impeded complaint reporting and account disputes.

A further major factual theme was the municipality’s electricity-payment defaults to Eskom, which resulted in disconnections that in turn affected the operation of sewage pumps. The applicants pointed to an order granted on 20 January 2017 authorising the first applicant to make direct payments to Eskom to prevent electricity cut-offs that would stop sewage plant pumps.

The financial distress was supported by allegations (largely not placed in substantive dispute as to the existence of distress) of inability to pay salaries during periods including 2014 and 2020, alleged failure to remit pension fund deductions, and resultant legal action. A criminal case relating to alleged fraud in respect of salary deductions not paid to third parties was opened, and on 5 May 2016 an order was granted in favour of the South African Municipal Workers Union Provident Fund (SAMWU) for approximately R16.2 million.

The municipality also experienced labour unrest and strikes, including violent incidents in 2017, with service-delivery effects including a shutdown of water supply from the Villiers treatment plant. The applicants’ case included that requests for provincial assistance yielded acknowledgment but no effective remedial action.

Environmental harm was supported by reliance on a complaint describing the municipality as a major contributor to pollution of the upper Vaal River, and by a Rand Water water quality report for the period July 2019 to December 2020 identifying unacceptable water quality, including high levels of E. coli and faecal coliforms, attributed to towns under Mafube.

In relation to financial governance, the applicants relied on information emerging from a Standing Committee on Public Accounts (SCOPA) process, including recurring adverse Auditor-General outcomes since 2014, allegations of unexplained transactions (including a transfer of R40 million between municipal bank accounts), and a disclaimed audit opinion (July 2020) due to incomplete financial information. The municipality’s annual financial statements for 2018/2019 and 2019/2020 were only submitted in February 2021, notwithstanding external assistance.

The court treated as significant that, notwithstanding some improvements claimed by respondents during a provincial administration period commencing in 2017, the municipality’s financial position had not improved and had worsened. The answering material filed on behalf of the Minister of Finance relied on the handover report and on reporting under section 71 of the MFMA, reflecting the municipality owing creditors an amount stated as approximately R715.954 million.

As to intervention history, it was common cause that on 6 April 2017 the provincial executive announced an intervention under section 139(1)(b). National Treasury’s Municipal Financial Recovery Service prepared a draft financial recovery plan in 2017, but it did not receive progress reports from the municipality, administrators, or provincial executive regarding implementation. The provincial executive resolved in December 2020 to terminate the section 139(1)(b) intervention effective 30 March 2021, with post-intervention support to follow under section 154 of the Constitution.

A key later factual development was the local government elections held on 1 November 2021, which resulted in a newly elected municipal council. The respondents relied on this to argue mootness and legal incompetence of relief aimed at dissolving the council or imposing intrusive measures without evidentiary grounding as to failures of the newly elected council. This later factual change also became relevant to the applicants’ request that the first applicant be authorised to participate in or oversee municipal administration under a stakeholders’ “Compact”.

Legal Issues

The central legal issue concerned the proper interpretation and operation of section 139(7) of the Constitution, and whether the court could compel (and structure) national executive intervention on the basis that the provincial executive “cannot or does not or does not adequately” exercise the powers or perform the functions in section 139(4) or 139(5).

Closely tied to that was the question whether the constitutional scheme permits a “leapfrog” approach, namely national intervention preceding mandatory provincial intervention, on the basis that the province has been ineffective historically or appears likely to be ineffective. The court had to determine whether national intervention is triggered only after the province has invoked and attempted to implement section 139(4) or (5), but then fails, or whether national intervention can be compelled where the province has not yet instituted the mandatory intervention though the jurisdictional facts exist.

The matter also raised issues about the court’s remedial powers in constitutional litigation, including the appropriateness of declaratory relief, whether structural or supervisory relief could be granted, and whether the court could authorise a private civil-society actor to participate in municipal administration functions as contemplated by the applicants’ proposed order.

These questions involved a mixture of law (constitutional interpretation of section 139 and separation-of-powers constraints), application of law to fact (whether jurisdictional facts for mandatory intervention were present, and whether the requirements for section 139(7) were met), and evaluative judgment (whether certain relief had become moot given the elections; whether structural relief was appropriate and in what form; and how to calibrate relief to respect institutional integrity across spheres).

Court’s Reasoning

The court approached the matter within the constitutional architecture of distinctive, interdependent and interrelated spheres of government, emphasising that the scope of intervention by one sphere into another is highly circumscribed and permitted only under defined circumstances and procedures. It drew on constitutional authority recognising local government as having original constitutional status, while also being subject to supervision and support by provincial and national government within constitutional limits.

A preliminary procedural point arose regarding the commissioning of the Minister of Finance’s answering affidavit, which omitted certain attestation particulars. The court held there had been substantial compliance with the regulations under the Justice of the Peace and Commissioners of Oaths Act, accepted the affidavit, and proceeded on that basis.

On the substantive merits, the court found that the applicants established that the municipality was in serious or persistent material breach of its obligations to provide basic services, and also in serious or persistent material breach of its financial commitments, resulting in a crisis in its financial affairs. The court treated the failures in paying Eskom, inability to manage revenue collection and billing, failure to meet statutory and contractual commitments (including employee-related contributions), and the broader record of service-delivery breakdowns as demonstrating the jurisdictional thresholds for mandatory provincial intervention in terms of section 139(4) and section 139(5).

The court then addressed the interpretive dispute about section 139(7). While the applicants argued for a plain-meaning reading that would allow national intervention where the province “cannot” or “does not” or “does not adequately” intervene, even before the province has instituted mandatory intervention, the court accepted the opposing interpretation advanced by Treasury and the President. It reasoned that section 139(7) is framed to apply where a provincial executive “cannot or does not or does not adequately exercise the powers or perform the functions referred to in subsection (4) or (5)”, and that such an assessment cannot be made until the province has been empowered through invocation of the section 139(4) or (5) intervention and then has attempted, but failed adequately, to perform the required functions.

The court placed weight on the institutional respect demanded by section 41(1)(e) of the Constitution and the broader separation-of-powers and cooperative governance framework. It rejected the applicants’ argument insofar as it effectively presupposed inevitable provincial failure. The court characterised judicial resolution compelling national substitution as something that should occur as a last resort, and only when facts demonstrate that the province has in fact been unable or has failed adequately to implement the mandatory intervention once invoked.

Although it declined to order national intervention under section 139(7), the court nevertheless held that the jurisdictional facts for mandatory provincial intervention were present and had been present for some time. It found that the provincial respondents’ conduct in failing effectively to carry out their mandate to intervene and resolve the municipality’s failures was inconsistent with the Constitution, justifying declaratory relief under section 172(1)(a). The court also accepted that structural-type relief was appropriate to ensure that effective steps were taken, given the history of failed undertakings and vague assurances that intervention was “imminent” without concrete implementation.

On the applicants’ request for relief authorising the first applicant to assist and oversee municipal administration pursuant to the stakeholders’ compact, the court declined to grant it. It reasoned that the election of a new municipal council on 1 November 2021 materially changed the factual matrix. The court held that it would be inappropriate and unsustainable to make intrusive orders affecting the newly elected council and municipal governance arrangements without input from the current council, particularly because the new council did not participate in the prior stakeholder meetings that produced the compact. In this respect, the court applied the doctrine of mootness and ripeness, treating the request as no longer grounded in a live controversy showing a concrete and probable threat that the new council would refuse assistance, and indicating that the new council should be afforded a fair opportunity to address inherited problems.

In respect of costs, the court considered that costs should follow the result in relation to the relief granted against the local and provincial respondents, while also applying a Biowatch-based approach in relation to the national respondents and the district municipality, with each party bearing its own costs in respect of the claims against those respondents.

Outcome and Relief

The court granted declaratory relief that Mafube Local Municipality and the identified local respondents were in breach of constitutional, legislative and regulatory obligations to residents, and declared the municipality’s conduct inconsistent with the Constitution and invalid to the extent of inconsistency, with specific reference to failures relating to sustainable service provision, a safe and healthy environment, administrative/budgeting/planning management, prioritisation of basic needs, and promotion of social and economic development.

The court declared that the provincial intervention had failed to ensure that the municipality met obligations to provide basic services and meet financial commitments, and declared the provincial respondents’ conduct in failing effectively to carry out their section 139 mandate inconsistent with the Constitution and invalid to that extent.

The court declared that the jurisdictional facts for mandatory provincial intervention under section 139(4) and section 139(5) were present and had consistently been present. It directed the provincial respondents forthwith to undertake a mandatory provincial intervention by exercising the powers conferred by section 139(4) and (5), read with the relevant provisions of the MFMA. The provincial respondents were specifically directed to approve a temporary budget or revenue-raising measures to give effect to the financial recovery plan; to implement a recovery plan aimed at securing the municipality’s ability to provide basic services and meet financial commitments with due regard to the existing financial recovery plan; and to take immediate action to ensure that pollution of the Vaal River or other water sources by the municipality’s sewage works ceased.

The court did not grant the relief sought that would have compelled national intervention under section 139(7) at that stage, and it refused the requested orders that would have authorised the first applicant to assist and oversee municipal administration under the compact, treating that aspect as impacted by the intervening municipal elections and the need for the newly elected council’s input.

As to costs, the first to tenth respondents were ordered jointly and severally to pay the costs of the application, including the costs of two counsel where applicable. The eleventh to seventeenth respondents and the applicants were ordered to pay their own costs occasioned by the claims against those respondents.

Cases Cited

Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1998 (12) BCLR 1458 (CC).

City of Cape Town v Robertson 2005 (2) SA 323 (CC).

Natal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).

Premier, Western Cape & Others v Overberg District Municipality & Others 2011 (4) SA 441 (SCA).

Premier, Gauteng and Others v Democratic Alliance and Others 2022 (1) SA 16 (CC).

Unemployed People’s Movement v Eastern Cape Premier and Others 2020 (3) SA 562 (ECG).

South African Municipal Workers Union v City of Cape Town and Others 2004 (1) SA 548 (SCA).

Lohrmann v Vaal Ontwikkelingsmaatskappy 1979 All SA 416 (T).

FirstRand Auto Receivables (RF) Ltd v Makgobatlou 2021 ZAGPJHC 420 (8 September 2021).

S v Munn 1973 (3) SA 734 (NC).

Liviero Civils (Pty) Ltd and Another v Amatola Water Boards (2614/2018) [2018] ZAECGHC 117 (20 November 2018).

City of Johannesburg Metropolitan Municipality v Gauteng Development Tribunal and Others [2010] ZACC 11; 2010 (6) SA 182 (CC); 2010 (9) BCLR 859 (CC).

Ngwathe Local Municipality v Eskom Holdings SoC Ltd and Others [2015] ZAFSHC 104 (28 May 2015).

Certification of the Amended Text of the Constitution of the Republic of South Africa, 1996 (CCT37/96) [1996] ZACC 24; 1997 (1) BCLR 1; 1997 (2) SA 97.

Matatiele Municipality v President of the Republic of South Africa (No 2) [2006] ZACC 12; 2007 (6) SA 477 (CC).

National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others 2000 (2) SA 1 (CC).

Oranje Watersport CC v Dawid Kuiper Local Municipality and Others [2018] ZANCHC 42 (6 July 2018).

Afriforum NPC and Others v Eskom Holdings SOC Limited and Others [2017] 3 All SA 663 (GP).

Biowatch Trust v Registrar Genetic Resources and Others 2009 (6) SA 232 (CC).

Legislation Cited

Constitution of the Republic of South Africa, 1996.

Local Government: Municipal Finance Management Act 56 of 2003.

Local Government: Municipal Systems Act 32 of 2000.

Local Government: Municipal Structures Act 117 of 1998.

Justice of the Peace and Commissioners of Oaths Act 16 of 1963.

Constitution Second Amendment Act of 1998.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the municipality was in serious and persistent breach of basic service delivery obligations and in serious financial crisis such that the jurisdictional facts for mandatory provincial intervention under section 139(4) and section 139(5) were present.

The court held that section 139(7) does not permit national intervention to be compelled as a first step merely because the province is alleged to have been ineffective historically or is predicted to be ineffective; rather, national intervention “in the stead of” the province is competent only where the province has invoked and attempted the mandatory intervention powers under section 139(4) or (5) and cannot or does not adequately exercise those powers or perform those functions.

The court held further that the provincial respondents’ failure effectively to fulfil their section 139 mandate justified declaratory constitutional relief, and it granted directive relief compelling the provincial respondents to implement mandatory intervention measures forthwith. The court declined, in light of the post-application municipal elections and the absence of engagement with the newly elected municipal council, to grant relief authorising the first applicant to participate in municipal administration under the stakeholders’ compact.

LEGAL PRINCIPLES

Section 139 interventions must be understood within the constitutional structure of distinctive, interdependent and interrelated spheres of government, and the scope of one sphere’s intervention into another is highly circumscribed, temporary, and procedurally bounded.

Where the jurisdictional facts exist for an intervention under section 139(4) or section 139(5), the provincial executive has a mandatory duty to intervene by taking appropriate steps aimed at achieving the constitutionally specified objectives of the intervention, including (where applicable) approving temporary budgets or revenue-raising measures and implementing a financial recovery plan.

The threshold for mandatory financial intervention under section 139(5) is met where, as a result of a crisis in a municipality’s financial affairs, it is in serious or persistent material breach of obligations to provide basic services or to meet financial commitments, or admits inability to meet those commitments.

Section 139(7) requires that national intervention occurs “in the stead of” the provincial executive only where the province cannot, does not, or does not adequately exercise the powers or perform the functions referred to in section 139(4) or (5). The court accepted that this assessment presupposes that the province has first been in a position to exercise those powers through instituting the mandatory intervention, and has then failed or been unable adequately to implement it.

In constitutional matters, where conduct is inconsistent with the Constitution, a court is required by section 172(1)(a) to declare such conduct invalid to the extent of inconsistency, and may craft just and equitable relief, including directive or supervisory measures, but relief must remain sensitive to constitutional boundaries, including democratic legitimacy at municipal level and separation-of-powers constraints.

Mootness and ripeness principles constrain adjudication where changes in circumstances mean the dispute no longer presents a live controversy grounded in concrete relief, and courts will be reluctant to grant intrusive orders, particularly against newly elected democratic structures, without a current factual foundation and proper engagement.

Mafube Business Forum and Another v Mafube Local Municipality and Others (1969/2021) [2022] ZAFSHC 86 (28 April 2022)