Ga-segoganya Forum v Ga-segonyana Municipality and Others (906/2007) [2007] ZANCHC 54 (21 September 2007)

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[2007] ZANCHC 54
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Ga-segoganya Forum v Ga-segonyana Municipality and Others (906/2007) [2007] ZANCHC 54 (21 September 2007)

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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern Cape Division)
Case No.:906/2007
Date heard:16/08/2007
Date
delivered:21/09/2007
In
the matter between
GA-SEGONYANA
FORUM
APPLICANT
versus
GA-SEGONYANA
MUNICIPALITY
FIRST RESPONDENT
THE
MANAGER GA-SEGONYANA
SECOND RESPONDENT
MUNICIPALITY
TEB
PROPERTIES CC
THIRD RESPONDENT
JUDGMENT
MOKGOHLOA AJ
The applicant,
Ga-Segonyana Forum Ward 1, instituted proceedings by way of motion
against the Ga-Segonyana Municipality (First Respondent),
the
Municipality Manager of Ga-Segonyana , Mr Eric Atlholang Gaborone
(Second Respondent) and TEB Properties CC (Third Respondent)
for an
order in the following terms:
“
2.
Dat die derde respondent verbied word om enige bouwerk te doen of
voort te sit op Erf
489, Kuruman, solank as wat die bepalings van Wet
56 van 2003 met betrekking tot die vervreemding van gemelde erf nie
voldoen is
nie en solank die erf nie hersoneer is in terme van die
toepaslik wetgewing in daardie verband nie.
3.
Dat die eerste en tweede respondente gelas word om alle moontlike
stappe te doen
ten einde bouwerk op of ontwikkeling van Erf 489,
Kuruman, te verhoed totdat behoorlik voldoen is aan die wetgewing na
verwys in
paragraaf 2 hiervan.
4.
Dat respondente, gesamentlik en afsonderlik, indien die een betaal
die ander pro
tanto kwytgeskeld te wees, gelas word om die applikant
se koste van hierdie geding te betaal op die skaal soos tussen
prokureur en
klient.
5.
Sodanige verdere en/ of alternatiewe regshulp as wat die agbare Hof
mag goed ag.
The
applicant requested further during the hearing of this matter on 16
August 2007 that an order be granted prohibiting the first
respondent from transferring Erf 489, (“the Erf”) Kuruman, to
the third respondent or any other person for as long as the relevant
legislation, particularly the provisions of
The
Municipal Finance Management Act 56
of
2003
,
have not been complied with.
The factual
background of this case is common cause between the parties or at
least not specifically disputed.  The Erf which
is the subject
matter is an open place owned by the first respondent.  On 23
February 2005 the council of the first respondent
passed a
resolution that this Erf shall not be considered to be used for the
creation of business establishment.  It can however
be
considered to be developed into an open space or sold to adjacent
owners to be developed into gardening or parking areas.
On 30 August 2006
council of the first and second respondent resolved to invite
tenders according to the council’s policy for
the sale of the
Erf.  Pursuant thereto and on 29 September 2006 the Erf was
advertised for sale by way of a tender.
Twelve (12)
tenderers responded to the advertisement. The highest bidder was for
R365 232-00 and the lowest was R50 279-13.
The third
respondent also tendered and his tender was R117 000-00 for use of
the Erf for residential purposes.  On 15 December
2006 the bid
adjudication committee resolved that the original resolution of the
23 February 2005 had to be rescinded.  It
was then resolved not
to award the tender but to re-advertise it.
On 26 January
2007 without any resolution taken to that effect, the Erf was
re-advertised for retail purposes.  Tenders were
received, the
highest bidder being R508 716-00.  The third respondent
tendered again and his offer was R217 560-00.
Neither the
first respondent nor the tender committee considered or accepted
this tender and as a result the tender is still open.
On 4 April 2007
the first respondent received a letter from the third respondent
requesting the first respondent to make land available
for him to
erect an office park.  The second respondent and the
adjudication committee convened a meeting on 20 April 2007
and
considered the third respondent’s request as an unsolicited bid.
They then resolved to sell the Erf to the third respondent.
On
7 June 2007 the first respondent, represented by the second
respondent signed the offer to purchase the Erf by the third
respondent,
represented by Mr Thamsanqa Samuel Bokwana, for an
amount of R283 000-00.  The Erf was then sold for purposes of
erecting
an office park for the Department of Local Government.
In the meantime,
and on 14 February 2007, the applicant wrote a letter to the Mayor
of the first respondent enquiring amongst other
things about the
alienation of the Erf and the advertisement in the bulletin on 26
February 2007.  On 15 May 2007 a similar
letter was sent to the
second respondent.  The Mayor only responded on 2 May 2007 and
advised the applicant that a public
meeting will be arranged where
these issues would be clarified.  However that public meeting
never took place.
The second
respondent in his opposing affidavit denies that the provisions of
Act 56 of 2003 were not complied with.  He stated
that a public
meeting as required by section 14 (2) was held on 2 August 2007 and
that it was advertised.  He however failed
to annex to his
papers a copy of the advertisement and/or the minutes of such
meeting.  This clearly shows that the meeting
was never held.
He further denies having received a letter on 15 May 2007 from the
applicant enquiring about the alienation
of the Erf.  The
applicant proved receipt of this letter by the second respondent who
actually acknowledged receipt thereof
by appending his signature.
The second respondent’s response thereof is that he receives many
letters and cannot remember
having received this one in particular.
Section 152
of the
Constitution
of the Republic of South Africa 108 of 1996
provides that the objects of local government are to provide
democratic and accountable government for local communities.
Section
195 (1)
provides that:
“
Public
administration must be governed by the democratic values and
principles enshrined in the Constitution, including the following
principles.
(a)
A high standard of professional ethics must be promoted and
maintained.
(f)
Public administration must be accountable.
(g)
Transparency must be fostered by providing the public with timely,
accessible and accurate information”.
11.
Section
217
of
the Constitution provides that when an organ of the State in the
national, provincial or local sphere of government contracts for
goods or services, it must do so in accordance with a system which is
fair, equitable, transparent, competitive and cost effective.
12.
The
preamble to the
Municipal
Finance Management Act 56 of 2003
(“the Act”) reads as follows:
“
To secure
sound and sustainable management of the financial affairs of
municipalities and other institutions in the local sphere of
government; to establish treasury norms and standards for the local
sphere of government; to provide for matters connected therewith”.
13.
As
far
as
the disposal of the capital assets is concerned,
Section
14
of
the Act provides as follows:
“
(1)
A Municipality may not transfer ownership as a result of a sale or
other transaction or permanently
dispose of a capital asset needed to
provide the minimum level of basic municipal services.
(2)
A municipality may transfer ownership or otherwise dispose of a
capital asset other
than one contemplated in
subsection
(1),
but only after the municipal council, in a
meeting
open to the public
–
(a)
has decided on reasonable grounds that the asset is not needed to
provide the minimum level of basic municipal service; and
(b) has
considered the fair market value of the asset and the economic and
community value to be received in exchange of the asset.
(3)
A decision by a municipal council that a specific capital asset is
not needed to provide
the minimum level of basic municipal service,
may not be reversed by the municipality after that asset has been
sold, transferred
or otherwise disposed of.
(4)
A municipal council may delegate to the accounting officer of the
municipality its power
to make the determination referred to in
subsection
(2) (a) and (b)
in respect of movable capital assets below a value determined by the
council”.
(My
underlining.)
14
It is clear from the facts of this case and the applicable
legislation referred to above that the first
and second respondents
did not follow the correct procedure in disposing and selling the Erf
to the third respondent. Inter alia,
14.1.
The first and second respondent accepted the third respondent’s
offer while the tender of 26 January 2007 was
not yet considered or
awarded, and therefore still pending;
14.2
.
The second respondent failed to exercise its powers vested in it by
section
151 (2) of the Constitution
in authorising the alienation and selling of the Erf;
14.3
.
The first respondent failed to comply with
section
14(1) and (2)
of the
Municipal
Finance Management Act 56 of 2003
in that it disposed of the Erf  without a decision being taken
in an open public meeting to sell and furthermore without
considering
its market value and the economic and community to
be received in exchange of the Erf.
15.
Mr Botha for the first and second respondents argued that, although
the second respondent decided on 23 February
2005 not to sell the
Erf, this decision was going to be reconsidered at the meeting
scheduled for 23 August 2007.  I have already
found at para 8
(supra) that no such meeting was held. Self – evidently the failure
to hold such a meeting prior to the sale is
a fatal defect to the
whole sale. Moreover,
section
14
(2)
of the Act states “a municipality may transfer ownership or
otherwise dispose…but only after…”  It is clear that even
though transfer of this Erf is not yet effected, the Erf has already
been sold to or disposed of in favour of the third respondent
notwithstanding the fact that there was no compliance with
section
14 (2)
of the Act.
16
.
It should be clear from the wording of
section
14 (2)
that
the intention is set out clear and elaborate mechanisms to ensure
that all essential steps leading to the eventual sale and alienation
of capital assets belonging to a municipality are taken in an open,
transparent and fair manner. As the municipality is, in terms
of the
Act obliged to be accountable, it makes even more sense that such an
important legal procedure (sale of municipal capital
assets) must be
preceded by a public meeting for the people who will be affected by
such sale. In my view, such meeting is intended
to give the public an
opportunity to debate, interrogate, approve or object to such a sale.
This is in keeping with the clear dictates
of what is popularly
called participatory democracy. Needless to state that such public
participation is crucial and essential in
any democracy. Regrettably
there was no public meeting held
in
casu
as envisaged by section 14 (2).  In the circumstances and for
the aforegoing reasons I find that the sale and alienation of
the Erf
is unlawful and cannot stand.
17.
Mr Van Niekerk SC for the appellant, asked for costs against the
second respondent de bonis propiis. Notwithstanding
the fact that  I
am of the view that there is a serious neglect of duty on the part of
the second respondent but, I cannot grant
such an order for the
following reasons:
17.1. Section
161 of the Constitution of the Republic of South Africa 108 of 1996
provides that:
“
Provincial
legislation within the framework of national legislation may provide
for privileges and immunities of Municipal Councils
and their
members”
17.2.
Section
28
of the
Local Government Municipal Structures Act 117 of 1998
provides
that:
“
(1)
Provincial legislation in terms of section 161 of the Constitution
must provide at least –
(a)
that councillors have freedom of speech in a municipal council and
its committees, subject
to the relevant council’s rules and orders
as envisaged in section 160 (6) of the Constitution;  and
(b)
that the councillors are not liable to civil or criminal proceedings,
arrest, imprisonment
or damages for –
(i)
anything that they have said in, produced before or submitted to the
council or
any of its committees; or
(ii)
anything revealed as a result of
anything that they have said in, produced before or submitted
to the
council or any of it’s committees.
(2)
Until provincial legislation contemplated in subsection (1) has been
enacted the privileges referred to in paragraphs (a) and (b)
of
subsection (1) will apply to all municipal councils in the province
concerned.”
18.
The wording of
section
28
exempt members of a municipality council from liability for their
participation in deliberations of the council.  See
Swartbooi and Others v Brink and Another (2) 2003 (2) BLCR 502 (CC).
The
third respondent
also
asked for costs against the first and second respondent.
I therefore
make the following order:
1. The third
respondent is prohibited from continuing with the building
construction on Erf 489 Kuruman, until the provisions of Act
56 of
2003 pertaining to the alienation of the Erf had been complied with
and the Erf is rezoned.
2.        The
first and second respondents are ordered to comply with the
requirements of
Act 56 of 2003 and of the Northern Cape Planning and
Development Act 7 of 1998 when alienating the Erf.
3.        The
first respondent is prohibited from transferring Erf 489, Kuruman, to
the third
respondent or any other person for as long as the
provisions of Act 56 of 2003 have not been complied with.
4.  The
first and second respondents are ordered to pay the applicant’s and
third respondent’s costs jointly and severally,
the one paying the
other to be absolved.
_______________
FE MOKGOHLOA
ACTING
JUDGE
HIGH
COURT
NORTHERN
CAPE DIVISION
For the Applicant:
Adv Van Niekerk SC
Instructed by: Duncan & Rothmans
For the 1
st
,
2
nd
Respondents: Adv. Botha
Instructed by: Job Attorneys
For the 3
rd
Respondent: Adv Coetzee
Instructed by:  Haarhoffs Attorneys