Brief Summary

Local Government — Municipal Manager — Appointment and removal — Applicant, Busa Petrus Molatseli, sought to review and set aside resolutions from a council meeting held on 9 February 2022, which unlawfully appointed a new Acting Municipal Manager and placed him on special leave — Respondents conceded the unlawfulness of the meeting and resolutions — Court held that the Applicant acted mala fide by ensuring the Municipality was unrepresented while seeking costs against it, leading to a denial of costs against the Municipality and punitive costs against the Third and Fifth Respondents personally.

Comprehensive Summary

Summary of Judgment

Introduction

The matter concerned an opposed review application brought in the Free State Division of the High Court, Bloemfontein. The applicant, Mr B P Molatseli, approached the court to review and set aside resolutions taken at a purported meeting of the Dihlabeng Local Municipality’s council held on 9 February 2022 at 12h00.

The respondents were the Speaker of the Dihlabeng Local Municipality (first respondent), the Dihlabeng Local Municipality itself (second respondent), the Executive Mayor (third respondent), the relevant MEC for Cooperative Governance and Traditional Affairs (fourth respondent), and Ms M A B Mosima (fifth respondent), a municipal director who was appointed at the impugned meeting as acting municipal manager.

Procedurally, the litigation unfolded in two stages. On 25 March 2022, the applicant obtained interim interdictory relief on a semi-urgent basis under Part A of the notice of motion, pending the finalisation of the review under Part B. By the time Part B was argued, the respondents had conceded the merits of the review in relation to the lawfulness of the 12h00 meeting and its resolutions. The judgment therefore primarily addressed the reserved and subsequent costs, and whether any costs should be awarded (including whether punitive and personal costs orders were warranted).

The general subject-matter of the dispute concerned municipal governance and authority within the municipal council, specifically the lawfulness of a council meeting convened after the Speaker had adjourned proceedings, and the validity of resolutions taken at that purported reconvened meeting, including decisions affecting the office of the municipal manager.

Material Facts

On 28 January 2022, the Speaker convened a council meeting at which the applicant (as municipal manager) was present. The council dealt with items on the agenda except for an item relating to a report about allegations of fraud and corruption. That outstanding item could not be finalised because certain councillors left the meeting, with the result that quorum was lost. The Speaker then adjourned the meeting to be continued on 9 February 2022.

An agenda was circulated for a continuation meeting scheduled for 9 February 2022. On that date, the meeting commenced at 10h00 under the chairmanship of the Speaker. It was closed and adjourned at 11h10 after the Speaker refused to add an additional item to the agenda, and the Speaker then left.

It was common cause that later the same day, at 12h00, the Executive Mayor purported to reconvene another meeting of the council. At this reconvened meeting, Councillor Nhlapo was appointed as acting Speaker for the day. The council then adopted resolutions including the appointment of the fifth respondent, Ms Mosima, as acting municipal manager, and the placement of the applicant on “special leave”. The dispute arose from the purported convening of this 12h00 meeting and the resolutions adopted there.

In relation to the interim proceedings, the applicant obtained an order on 25 March 2022 pending the review, interdicting the fifth respondent from acting as municipal manager and directing that the applicant be allowed to continue performing the functions of municipal manager. The order also restrained the Mayor from calling or conducting council meetings in the manner described in the interim order. The costs of Part A were reserved for later adjudication in the review.

On the papers and argument in Part B, the respondents conceded that the 12h00 meeting was unlawful and that its resolutions should be set aside. The remaining live dispute was therefore directed to costs, including the applicant’s attempt to obtain costs against the municipality and punitive costs in personal capacities against the Mayor and the fifth respondent.

Facts material to the costs enquiry included that the municipality, the Mayor, and the fifth respondent were initially represented by Peyper Attorneys (Mr Louis Radley), a panel attorney of the municipality. The instruction to oppose the litigation was given by the fifth respondent purportedly acting as acting municipal manager, an appointment made at the unlawful 12h00 meeting. After the interim order, the applicant addressed a letter (on the municipality’s official letterhead and in his capacity as municipal manager) to Peyper Attorneys demanding their withdrawal as attorneys for the municipality on the basis that the fifth respondent could not act for the municipality. Peyper Attorneys thereafter withdrew, with the consequence that the municipality was left without legal representation for the hearing. The court further noted correspondence indicating that the applicant’s own attorney (also a panel attorney), acting on instructions attributed to the applicant, pressed for Peyper Attorneys to withdraw for the municipality. The court treated this conduct as central to whether the applicant, although successful on the merits, should receive a costs order.

Legal Issues

The court was required to determine two principal questions.

The first question, though ultimately not contested, concerned the reviewability and validity of the council meeting held on 9 February 2022 at 12h00, and whether the resolutions adopted there should be reviewed and set aside. This was a question involving the application of legality principles to largely common-cause facts, and the merits were conceded.

The second and decisive question concerned the proper costs order. This involved the court’s discretion in costs, including whether the applicant should be awarded costs against the municipality despite being successful on the merits, and whether the Mayor and the fifth respondent should be ordered to pay punitive costs in their personal capacities. This required an evaluative judgment about litigation conduct, the ethical and institutional implications of the applicant’s actions, and the relevance of statutory protections relating to councillors and municipal proceedings.

A further legal issue arose incidentally in the costs debate: whether it was competent or appropriate to impose personal costs on certain councillors in light of statutory protections and, if personal liability were contemplated, whether there was a material non-joinder of other councillors who participated in the impugned resolutions.

Court’s Reasoning

On the merits of the review, the court proceeded from the fact that the respondents had conceded that the 12h00 meeting convened by the Mayor was unlawful and that resolutions adopted at that meeting were invalid. In those circumstances, the court granted the review and set aside the meeting and its decisions.

The court’s substantive reasoning focused on costs. It reaffirmed the general principle that costs typically follow success, but emphasised that costs are ultimately within the discretion of the court. In doing so, the court relied on the approach articulated in Ferreira v Levin NO and Others: Vryenhoek and Others v Powell NO and Others, which recognises both the general rule favouring costs for the successful party and the flexible circumstances in which a court may deprive a successful party of costs, including the conduct of parties and their legal representatives and the nature of proceedings.

The court considered the applicant’s position and responsibilities as municipal manager, referring to the statutory framework describing the municipal manager’s role as head of administration and accounting officer. Against that background, the court evaluated the applicant’s conduct after obtaining the interim order. It concluded that the applicant was conflicted in relation to the municipality and that he should have informed the council of the interim order and ensured appropriate institutional decision-making regarding ongoing litigation and legal representation, rather than acting unilaterally. The court regarded it as particularly significant that the applicant wrote to the municipality’s attorneys on an official letterhead and in his capacity as municipal manager, instructing or pressuring withdrawal, thereby leaving the municipality unrepresented, while simultaneously continuing to seek a costs order against it.

In the court’s assessment, this conduct effectively ensured that the municipality’s ability to participate was constrained, and it considered the applicant’s insistence on costs against the municipality in these circumstances to be unjustified. The court characterised the applicant’s conduct as mala fide, and held that, notwithstanding his success on the merits, he should be deprived of costs against the municipality.

The court further criticised the conduct of the applicant’s attorney, noting that the attorney was also a panel attorney of the municipality and appeared to have acted on instructions where the applicant purported to operate both as municipal manager (in relation to the municipality’s representation) and in his personal capacity (as litigant). The court found it difficult to accept that the applicant and his attorney could view such duality as ethically and legally permissible, and treated that conduct as reinforcing the conclusion that a costs order in the applicant’s favour against the municipality was not warranted.

As to the applicant’s request for punitive costs against the Mayor and the fifth respondent personally, the court addressed the submission that they did not participate in legitimate council business and should be personally liable. The applicant relied on Swartbooi and Others v Brink and Others, particularly concerning the protection afforded to councillors for participation in legitimate council deliberations and the relationship between costs orders and potential civil liability. The court accepted that the impugned meeting was convened by the Mayor, but emphasised that the resolutions were taken by a collective majority of councillors who attended and voted, and were not decisions of the Mayor and fifth respondent alone. It held that participation in the meeting by the Mayor and the fifth respondent did not, on the facts presented, remove the protection contemplated by the relevant statutory scheme.

The court added that, even if personal liability could theoretically be considered, the applicant had failed to join the other councillors (described as the remaining 30 councillors) who participated and voted. Because those councillors would have a substantial interest in any order imposing civil liability via costs, the failure to join them constituted a serious non-joinder, which was an additional basis undermining the applicant’s attempt to single out only the Mayor and the fifth respondent for personal punitive costs.

Finally, the court highlighted further considerations supporting a no-costs outcome, including the applicant’s role in precipitating the withdrawal of the municipality’s attorneys, the service of a Rule 7(1) notice by the applicant’s attorney, and the practical effect that the municipality remained unrepresented at the hearing while the Mayor and the fifth respondent were compelled to obtain new attorneys primarily to resist adverse costs consequences. It also reasoned that the continuation of Part B might have been unnecessary had the parties reached agreement on costs, and criticised the applicant’s failure to facilitate a council meeting to address representation and the way forward. In the court’s overall evaluation, the interests of justice did not favour mulcting any party with costs.

Outcome and Relief

The court reviewed and set aside the council meeting of 9 February 2022 commencing at 12h00 and all decisions taken at that meeting.

On costs, the court ordered that each party bear its own costs in respect of Part A (the interim proceedings) and the further proceedings pertaining to Part B (the review application), thereby refusing the applicant’s request for costs against the municipality and refusing punitive personal costs against the Mayor and fifth respondent.

Cases Cited

Ferreira v Levin NO and Others: Vryenhoek and Others v Powell NO and Others [1996] ZACC 27; 1996 (2) SA 621 (CC).

Swartbooi and Others v Brink and Others 2006 (1) SA 203 (CC).

Legislation Cited

Constitution of the Republic of South Africa, 1996, section 239.

Local Government: Municipal Structures Act 117 of 1998, section 12(1).

Local Government: Municipal Structures Act 117 of 1998, section 28(1)(b)(i).

Local Government: Municipal Systems Act 32 of 2000, sections 55 and 59, including section 55(1)(m).

Rules of Court Cited

Uniform Rules of Court, Rule 7(1).

Held

The court held that the 9 February 2022 council meeting commencing at 12h00 was unlawful and that the resolutions adopted at that meeting fell to be reviewed and set aside, a conclusion reached on the basis of the respondents’ concession on the merits.

The court further held that, despite the applicant’s success on the merits, the circumstances justified a departure from the usual costs principle. The applicant’s conduct, viewed against his institutional role and the conflict inherent in acting both as municipal manager and litigant, together with the conduct of his legal representative in relation to the municipality’s representation, warranted an order that each party pay its own costs. The court also held that punitive personal costs against the Mayor and the fifth respondent were not justified on the facts, and that, in any event, the absence of joinder of other participating councillors constituted a serious obstacle to such relief.

LEGAL PRINCIPLES

A costs award is primarily discretionary, even though the general rule is that costs follow the result. A court may deprive a successful party of costs where the circumstances justify it, including where the conduct of the successful party or their legal representatives makes such an order equitable, having regard to fairness and the interests of justice.

In disputes involving municipal governance, the statutory functions and duties of the municipal manager as head of administration and accounting officer may be relevant to the court’s evaluation of litigation conduct and institutional propriety, particularly where the municipal manager’s actions affect the municipality’s ability to take decisions or participate in litigation.

Statutory protections relating to municipal councillors, including protection from certain forms of civil liability arising from participation in council deliberations, are relevant when litigants seek personal costs orders against councillors. Where relief sought could implicate multiple councillors who participated in a decision, principles of joinder apply: parties with a direct and substantial interest in potential liability should be joined, and failure to do so may amount to a serious non-joinder.

Molatseli v Speaker: Dihlabeng Local Municipality and Others (1041/2021) [2022] ZAFSHC 277 (10 October 2022)