Bissett and Others v Buffalo Municipality and Others (CCT 01/04) [2004] ZACC 16 (6 October 2004)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Constitutional Court
SAFLII
>>
Databases
>>
South Africa: Constitutional Court
>>
2004
>>
[2004] ZACC 16
|

|

Bissett and Others v Buffalo Municipality and Others (CCT 01/04) [2004] ZACC 16 (6 October 2004)

Links to summary

CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case
CCT 57/03
NOKUTHULA PHYLLIS MKONTWANA                                                            Â
Applicant
versus
NELSON
MANDELA METROPOLITAN MUNICIPALITY                     First Respondent
MINISTER
OF PROVINCIAL AFFAIRS
AND
CONSTITUTIONAL DEVELOPMENT                                         Second
Respondent
                                                                                                                        Â
Case
CCT 61/03
PETER WILLIAM BISSETT                                                                                    Â
Applicant
ANNA MARIA ELZA VAN DER STRAETEN                                           Second
Applicant
NEDCOR BANK LIMITED                                                                           Â
Third
Applicant
versus
BUFFALO CITY MUNICIPALITY                                                             Â
First
Respondent
MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT         Second
Respondent
MEMBER OF THE EXECUTIVE COUNCIL FOR LOCAL
GOVERNMENT AND HOUSING                                                            Â
Third
Respondent
Case
CCT 1/04
TRANSFER RIGHTS ACTION CAMPAIGN
AND OTHERS                                                                                                         Â
Applicants
versus
MEMBER OF THE EXECUTIVE COUNCIL
FOR LOCAL GOVERNMENT AND HOUSING
IN THE PROVINCE OF GAUTENG AND OTHERS                                         Respondents
Together with
KWAZULU-NATAL LAW SOCIETY                                                    First

Amicus Curiae
MSUNDUZI MUNICIPALITY                                                          Â
Second
Amicus Curiae
Heard on         :           10-11 March
2004
Decided on     :           6 October 2004
JUDGMENT
YACOOB J:
Introduction
[1]
One of the five objects of local government in
our Constitution is to ensure the provision of services to communities in a
sustainable
way.
[1]
  Municipalities supply water and electricity to consumers in their
area subject to the payment of a consumption charge.  In practice
consumers of
water and electricity are occupiers of property.  Some own property they occupy
and others do not.  These three
cases concern the constitutional validity
of laws that in effect burden owners in relation to consumption charges
for water and electricity supplied to other people who occupy
their immovable
property.
[2]
Section 118(1) (section 118(1)) of the Local
Government: Municipal Systems Act
[2]
(the Act) is one of these provisions.
[3]
Â
It places limits on the owner’s power to transfer immovable property.  The
registrar of deeds may not effect transfer of any
property without a
certificate issued by the municipality to the effect that the consumption
charges due during a period of two
years before the date of issue of the
certificate have been paid.
[4]
Â
The section is being challenged principally on the basis that it gives rise to
arbitrary deprivation of property contrary to
section 25(1) of the
Constitution.
[3]
In September last year section 118(1) was
declared to be constitutionally invalid by the South Eastern Cape Local Division
of the
High Court (the High Court) in two cases before it.
[5]
  The High Court held that the
section permitted arbitrary deprivation of property in conflict with section
25(1) of the Constitution
and referred the declaration of invalidity for
confirmation to this Court in terms of section 172(2) of the Constitution.  The

applicants in both these cases
[6]
have applied for confirmation of this order.  The municipalities cited in each
of the two cases
[7]
as well as the Minister responsible for Local Government opposed confirmation
and appealed against the High Court order.
[8]
[4]
There is also before this Court an application
for direct access which came to be made in the following circumstances.  In
December
2002 an application was launched in the Witwatersrand Local Division
of the High Court (the WLD application).  That application
required a
consideration of the meaning and constitutionality of national, provincial and
local government legislation including
section 118(1) that burdened owners in
relation to payment for water and electricity supplied to consumers who
occupied the property.Â
Certain consequential relief was also sought in the
application.  The applicants included an association of persons and are jointly

referred to as the WLD applicants.
[9]
Â
Responsible government entities
[10]
as well as utility companies responsible for the delivery of water
[11]
and electricity
[12]
were joined as respondents in
these proceedings.
[5]
Legislation additional to section 118(1) in
issue in the WLD application may be briefly summarised.  Section 118(3) of the
Act
is to the effect that any consumption charge owing is a “charge upon the
property in connection with which the amount is owing
and enjoys preference
over any mortgage bond registered against the property”.  Sections 49 and
50(1)(a) of a Gauteng Local
Government Ordinance (the Ordinance)
[13]
were also challenged.  Section
49
[14]
in effect renders the owner
and occupier of premises jointly and severally liable to a municipality for the
consumption charges
for water and electricity supplied to that property.  The
section empowers the municipality to sue the owner and occupier jointly
and
severally after written notice to one of them.  It also confers on the owner
and occupier the right to recover from the other
the latter’s share of the
liability discharged by the former.  Section 50(1)(a)
[15]
of the Ordinance has the same
effect as section 118(1) of the Act except that the certificate required by the
Ordinance must cover
debts due for three years before the date of the
certificate.
[6]
The by-laws in issue in the WLD application are
those of the City of Johannesburg Metropolitan Municipality.  They are by-law
4(2)
of the water by-laws
[16]
and by-law 36 of the electricity by-laws.
[17]
Â
The former makes owners and consumers jointly and severally liable in respect
of water charges
[18]
while the latter does the same for electricity charges.
[19]
[7]
In January this year almost all the parties in
the WLD application
[20]
applied for direct access to this Court.  The aim was to have all the issues in
the WLD application heard together with the application
for confirmation and
the appeal.
[21]
Â
The issues to be decided in this appeal can be ascertained only after the fate
of the application for direct access is decided.Â
That application is
considered first.
[8]
Before this is done however it is convenient to
mention that an attack on the constitutionality of sections 118(1) and 118(3)
of
the Act was considered by the KwaZulu-Natal High Court in the case of
Geyser
[22]
(the
Geyser
case) and dismissed some six months before the delivery of the judgment of the
High Court.  It was held there that both subsections
were not inconsistent with
section 25(1) of the Constitution because the deprivation to which they gave
rise was not arbitrary.Â
There were therefore two conflicting judgments in
relation to the constitutionality of section 118(1) by the time the direct
access
application was heard by this Court.
Direct Access
[9]
Applications for direct access are now governed
by rule 18 of the rules of this Court.  In substance, the rule allows for
direct
access to be granted if it is in the interests of justice to do so.
[23]
  The interests of justice is a
broad concept and requires a consideration of many factors.
[24]
[10]
All the parties in the WLD application were
agreed during argument before this Court that direct access should be granted.Â
They
submitted that it would be in the interests of justice for this Court to
hear the case before it had been entertained by any other
court.  They relied
on the saving of time and costs, the importance of the matter, and on a need to
resolve the uncertainty created
by competing judgments in the High Court.  The
application for confirmation and the appeal are concerned only with section
118(1)
of the Act.  We were accordingly urged not to decide the fate of this
section in isolation, but to grant direct access and decide
all the other legal
issues in the light of the more comprehensive factual matrix presented in the
WLD application.
[11]
A useful point at which to start in considering
an application for direct access is to recognise the importance of the
principle
that it is ordinarily not in the interests of justice for this Court
to be a court of first and last instance.
[25]
Â
The Constitution and the rules of this Court do, however, provide for this
Court to be the court of first and final instance,
but only in exceptional
circumstances.
[26]
Â
The saving of time and costs, the importance of the issue or the existence of
conflicting judgments on an issue in a case do
not, without more, constitute
exceptional circumstances and justify this Court being a court of first and
last instance.  Indeed
the importance and complexity of the issues raised would
weigh heavily against this Court being a court of first and final instance.Â
As
a general rule, the more important and complex the issues in a case, the more
compelling the need for this Court to be assisted
by the views of another
court.  Each of the issues in respect of which direct access is sought must be
considered separately.
[12]
It is significant that section 118(1) is already
before this Court in the application for confirmation and leave to appeal.Â
There
are conflicting judgments in relation to the constitutional validity of
section 118(1).  It is also true that the WLD application
canvasses the factual
background on a broader basis than has been done in the
Mkontwana
and
Bissett
cases.  The determination of the application for confirmation and that for
leave to appeal by this Court will result in a final
decision as to the
constitutionality of section 118(1).  No delay is occasioned by hearing the
applicants on section 118(1) in
the light of the new evidence they present.  It
is therefore in the interests of justice to grant direct access to the WLD
applicants,
to consider the evidence placed before the High Court in the WLD
application, and to decide the constitutional validity of section
118(1) by
reference to all the arguments advanced.  In the circumstances, direct access
should be granted in relation to all the
issues raised concerning the
interpretation and constitutionality of section 118(1).
[13]
The position in relation to section 118(3) is
different.  It has been submitted that this Court will not be the court of
first
and last instance when it comes to the determination of the
constitutionality of section 118(3).  It is said that this is because
the High
Court has already considered and dismissed challenges to the constitutional
validity of section 118(3) in the
Geyser
judgment.  However very little
is said in the
Geyser
judgment about the meaning and effect of section
118(3).  Nor in that judgment is the constitutionality of section 118(3)
considered
separately from the constitutionality of section 118(1).  This is
not surprising because section 118(3) was not really a matter
of “live
controversy” in that case.  The municipality had not relied upon section 118(3)
and therefore this section was not
really in issue.  The challenge to section
118(3) in the
Geyser
case can rightly be said to be one bordering on the
abstract.  Section 118(3) has not been used by the municipality in relation
to
any of the applicants in the WLD case either.  The construction of section
118(3) is far from straight forward and the reasoned
judgment of another court
on how the section is to be interpreted is likely to be helpful.  In the
circumstances, it is not in
the interests of justice for this Court to consider
the constitutional validity of section 118(3) at this stage.
[14]
Section 49 of the Ordinance as well as the
by-laws of the City of Johannesburg in issue in the direct access application
can be
dealt with together.  They are important provisions that raise complex
questions concerning the appropriateness of rendering owners
jointly and
severally liable for payment of water and electricity not consumed by them but
by others on their property.  It is
not in the interests of justice for this Court
to be the court of first and last instance on these issues.  Although the
provincial
legislation and by-laws are inter-related with section 118(1), there
are sufficient differences between these provisions to render
it advisable that
another court should decide the issue of the constitutionality of these
provisions before we consider it.
[15]
It has already been pointed out that section
50(1)(a) of the Ordinance is similar to section 118(1), except that an owner
wishing
to sell the property would be able to pass transfer only after all
amounts owing in respect of the property for a period of three
years before the
date of the certificate have been paid.  Arguments advanced by the parties
about the interpretation and constitutionality
of section 50(1)(a) are
virtually the same as those directed at section 118(1).  There is so little
difference between the two
provisions that a decision on the constitutional
validity of section 118(1) by this Court would directly impact on the
constitutionality
of section 50(1)(a).  Indeed, a decision that the former is
unconstitutional might lead to the conclusion that the latter is
unconstitutional
too.  It is therefore in the interests of justice for the
application for direct access to be granted in relation to section 50(1)(a).
[16]
The application for direct access concerning the
interpretation and constitutionality of sections 118(1) and 50(1)(a) must
therefore
be granted.  The application must be refused in all other respects.
Parties before
the Court
[17]
The applicants and the respondents in the WLD
application are therefore before the Court in addition to the applicants and
respondents
in the confirmation proceedings.
[27]
Â
This Court also admitted two parties as amici curiae on their application.Â
Both were parties in the
Geyser
case.  The first amicus,
[28]
contests the constitutionality
of section 118(1) of the Act and the second amicus
[29]
contends for its validity.  There
are therefore broadly two sets of parties.  The applicants in the confirmation
proceedings,
the applicants in the WLD application and the first amicus all of
whom regard the burden placed on owners of property by section
118(1) as
constitutionally objectionable.  Then there are municipalities supported by a
provincial MEC, national minister responsible
for local government and the
second amicus who urge that the section is good.  I will refer to the former
simply as the applicants
and to the latter as respondents.
The factual background
[18]
All the applicants tell us of an escalation of
amounts owing in respect of electricity and water charges without their
knowledge.Â
In many cases, there are disputes between the applicant and the
municipality about whether the municipality acted negligently and
whether the
owner ought to have taken more steps to ensure that amounts were in fact paid.Â
In most cases large amounts of money
have become due.  There are allegations of
illegal reconnection of water and electricity in some of the factual situations
in
the WLD application.
(a) The High Court cases
[19]
In the
Mkontwana
case, Ms Mkontwana bought
a house in Port Elizabeth for R24 560.00 by an agreement that provided for her
to pay the outstanding
consumption charges necessary to obtain the section
118(1) certificate.  She is not well off and was only able to buy the house

with the help of a state housing subsidy of R16 000.00.  When she first applied
to the municipality for a certificate in October
2001, she was informed that
consumption charges in excess of R10 000.00 had been incurred by previous
occupiers and had to be paid
before the certificate could be issued.  Somewhat
curiously, the municipality sought payments of amounts that had become due more

than two years and up to five years before the date of the statement.  The same
municipality later issued a document saying that
the amount required to be paid
was more than R20 000.00.  There followed four statements of account, each
varying in amount, and
all of them unclear, confusing, contradictory and
irreconcilable.  Ultimately in September 2002, after the intervention of
attorneys
and considerable negotiation, the amount was settled at less than
R2500.00.
[20]
In the
Bissett
case, applicants, co-owners
of property in Buffalo City sold it for R110 000.00 in July 2001.  The
municipality issued a document
in August 2001 requiring payment of less than
R2500.00 before the certificate could be issued.  When this amount was paid a
month
later, the sellers were presented with another statement of account
according to which more than R14 000.00 remained owing for consumption
charges
during the relevant two year period.  This document, to the extent that it is
intelligible, lacks the necessary detail
and is contradictory.  An undated
statement of account later produced by the same municipality shows that the
amount owing was
less than R8000.00.
[21]
The same pattern is evident in the dealings between
the second of the applicants who also owned property in the Buffalo City
municipal
area which was sold for R60 000.00.  I need say no more than that
R9219.93 was paid by this applicant to obtain a section 118(1)
certificate
after some negotiation and under protest.  This applicant discovered some
months later that the actual sum owing was
around R2000.00 less than the sum
that had actually been paid.
(b) The WLD application
[22]
Four of the five applicants in the WLD
application are owners of property.  The fifth is an administrator of a
deceased estate
which owns the property in question.  In relation to the cases
of the four applicants who own property, the factual background,
to the extent
that it needs to be recited for the purposes of this case is very similar.Â
Owners had let the property to tenants
in all cases.  Large sums of money had
become outstanding in relation to consumption charges.  The municipalities
concerned had
made unsuccessful efforts to collect the money.  In one case, the
municipality had in fact informed the owner that a substantial
sum of money had
been owing by the tenant and the owner had renewed the lease with the same
tenant after receipt of this information.Â
The municipality’s efforts to secure
payment by the disconnection of electricity and water, resulted, in many
instances, in the
unlawful reconnection of electricity.  There are material disputes
of fact on the papers relating in particular to whether the
predicament that
had ultimately eventuated was the result of inaction by the municipality or of
the lack of reasonable, responsible
conduct on the part of the owners.
[23]
The experience of the administrator of the
deceased estate raises issues similar to those in the High Court.  The property
had
been occupied by tenants pursuant to agreements of lease they had entered
into with the deceased.  The property is worth R95 000.00
according to the
estate account.  The municipality required payment of an outstanding sum
slightly in excess of R1550.00 for the
issue of a section 50(1) certificate and
provided a written document to this effect.  Some months later however the
municipality
indicated that the amount required to be paid exceeded R22
000.00.  Like in the other cases before the WLD, there is a dispute
about the
extent of the municipality’s tardiness in the execution of its debt collection
responsibilities.
Repeal of section 50
[24]
The whole of section 50 was repealed exactly two
weeks before the WLD application was launched.
[30]
Â
It was contended by some of the respondents that the application concerning the
constitutionality of section 50(1)(a) of the
Ordinance is accordingly moot and
ought not to be entertained.  The applicants answer that one of the WLD
applicants has been
prejudiced by the application of the section and that the
Court should accordingly deal with it.  There is in fact a dispute on
the
papers concerning the validity of the section, whether one of the applicants
was obliged to pay certain consumption charges
owing to obtain the certificate
and, if not, whether that applicant is entitled to recover the amounts paid.  A
cause of action
can be moot only if its resolution will have no practical
effect.
[31]
Â
A decision about the validity of section 50(1)(a) will have practical effect.Â
The issue is not moot.
Issues
[25]
Several matters call for our attention.  The
first is whether section 118(1) and section 50(1)(a) can reasonably be
interpreted
so that they apply only if the consumption charges are due by the
owner.  Secondly, if these provisions cannot be so construed,
we must decide
whether they are consistent with section 25 of the Constitution.  Thirdly, if
any of these laws is found to be
unconstitutional, the appropriate remedy must
be considered.  Finally, if the relevant provisions are not struck down for
their
failure to comply with the Constitution it will be necessary to evaluate
contentions made by one of the applicants in the High Court
and which the High
Court found unnecessary to consider.  It is submitted before this Court that
section 118(1) is inconsistent
with sections 9(1), 26 and 34 of the
Constitution.
Application: further evidence
[26]
A few days before the hearing, the municipality
in the
Bissett
case tendered evidence aimed essentially at showing the
amount of consumption charges recovered by it through the section 118(1)

procedure during a three year period.  The explanation for this late tender of evidence
was that the municipality had been alerted
to the need that this additional
information be placed before us by the submission of one of the parties.  This
information had
not been placed before the High Court.  This Court will receive
additional evidence on appeal only if there is compelling reason
to do so.Â
There is none in this case.  The amount of money actually recovered by the use
of the procedure is not particularly
helpful largely because it is impossible
to tell whether the money recovered in consequence of the use of the procedure
would not
in any event have been paid.  More importantly, however, the figure
put up in the evidence does not relate to consumption charges
incurred by
non-owner occupiers.  In the circumstances, the materiality of the evidence is
doubtful.  The application for leave
to introduce further evidence must
accordingly be refused.
Interpretation
[27]
The WLD applicants correctly point out that we
must construe a legislative provision so as to avoid its unconstitutionality if
it
is reasonably capable of being interpreted in that way or, to put it
differently, the construction is not unduly strained.
[32]
  I will address this
contention on the assumption that all these laws will be unconstitutional if
not interpreted in the way suggested
by the WLD applicants.  They contend that
sections 118(1) of the Act and 50(1)(a) of the Ordinance are reasonably capable
of being
so interpreted without attributing an unduly strained meaning to the
language used.
[28]
The submission is that each of these provisions
must be interpreted as if the words “by the owner” or “due by the owner”
had
been inserted at appropriate points in each of the provisions so as to render
it less burdensome.  Each of these sections
is set out in full below.  The
words added by the applicants to demonstrate the reasonable meaning contended
for are in bold.
(a)
Section 118(1) of the Act provides
“A registrar of deeds may not register the
transfer of property except on production to that registrar of deeds of a
prescribed
certificate—
(a)        issued by the municipality or municipalities in which
that property is situated; and
(b)        which certifies that all amounts that became due
[by
the owner]
in connection with that property for municipal service fees,
surcharges on fees, property rates and other municipal taxes, levies
and duties
during the two years preceding the date of application for the certificate have
been fully paid.”
(b) Section 50(1)(a) of the Ordinance reads
“(1) No transfer of any land or of any
right in land as defined in section 1 of the Local Authorities Rating
Ordinance, 1977,
within a municipality shall be registered before any
registration officer until a written statement in the form set out in the Third

Schedule to this Ordinance and signed and certified by the town clerk or other
officer authorised thereto by the council, shall
be produced to such registration
officer, and unless such statement shows—
(a)        that all amounts
[due by the owner]
for a period
of three years immediately preceding the date of such registration due in
respect of such land or right in land for
sanitary services or so due as basic
charges for water or as other costs for water where any water closet system on
the ground
concerned has been installed or so due as basic charges for
electricity in terms of the provisions of this Ordinance or any by-law
or
regulation . . . have been paid to the council . . . .”
[29]
Interpreted in this way, section 118(1) of the
Act and section 50(1)(a) of the Ordinance would require that consumption
charges
due only by the owner for the relevant period must be paid as a
precondition to transfer.  This preferred construction involves
an assumption
that the purpose of enacting the laws in question is limited.  The aim is to
secure only those consumption charges
due by the owner.  In other words the
legislation does not seek to secure municipalities against non-payment of
consumption charges
due by occupiers other than the owner.
[30]
It is highly unlikely that the purpose was so
narrow.  If it was, it is inconceivable that the text would not have said so
expressly.Â
Each of these provisions, on its face, is broadly worded and
secures the payment of all consumption charges “in connection with”
the
property.  The interpretation advanced by the WLD applicants is unreasonable.Â
These laws are not reasonably capable of the
suggested interpretation.
The constitutionality of section
118(1) and section 50(1)(a)
[31]
It is helpful to repeat that section 118(1) of
the Act and section 50(1)(a) of the Ordinance make transfer of immovable
property
subject to the precondition that all consumption charges due “in
connection with” or “in respect of” that property by anyone
have been paid.Â
The applicants submit that these provisions are inconsistent with section 25(1)
of the Constitution because they
amount to an arbitrary deprivation of
property.  Section 25(1) provides:
“No one may be deprived of property
except in terms of law of general application, and no law may permit arbitrary
deprivation
of property.”
[32]
Almost all the parties accepted that these
provisions do bring about a deprivation of property.  There was one submission
however
that they do not, but are merely regulatory provisions.  They do not
prevent transfer altogether, the argument went, but are measures
that merely delay
transfer until a certificate has been obtained.  The contention has no merit.Â
In
First National Bank
[33]
(the
FNB
case) this Court held that the taking away of property is not required for
a deprivation of property to occur.
[34]
  Whether
there has been a deprivation depends on the extent of the interference with or
limitation of use, enjoyment or exploitation.
 It is not necessary in this case
to determine precisely what constitutes deprivation.  No more need be said than
that at the
very least, substantial interference or limitation that goes beyond
the normal restrictions on property use or enjoyment found in
an open and
democratic society would amount to deprivation.
[33]
Alienation of immovable property is ordinarily
completed by transfer to the new owner in the office of the registrar of
deeds.Â
The right to alienate property is an important incident of its use and
enjoyment.  The effect of section 118(1) and section 50(1)(a)
of the Ordinance
is that transfer can take place only if all outstanding consumption charges
have been paid.  It follows that
owners cannot transfer their properties unless
consumption charges due by people other than themselves and for which they are
not
liable have been paid.  It was correctly pointed out that these laws do not
literally require the owner to pay outstanding consumption
charges.  The
reality is, however, that if the person liable for the debt does not or cannot
pay, the owner who wants to effect
transfer must, unless the relevant agreement
provides for a party other than the owner to effect the payment, pay all
outstanding
consumption charges.  The payment must be made regardless of
whether the owner is liable to pay.  The provisions are not merely
procedural.Â
They are a substantive obstacle to alienation and constitute a deprivation of
property within the meaning of section
25(1).  Indeed, it is distinctly
possible that all consumption charges for the two or three year period might be
so high as to
exceed the market value and render a sale uneconomical.  It follows
that I agree with the High Court
[35]
and with the
Geyser
judgment
[36]
that section 118(1) does give rise to deprivation of property.
Is the deprivation arbitrary?
(a) The nature of the section
25(1) analysis
[34]
The meaning of arbitrary in section 25 of the
Constitution was determined in the
FNB
case.  After a thorough analysis
[37]
Ackermann J concluded that a
deprivation of property is arbitrary within the meaning of section 25 of the
Constitution if the law
in issue either fails to provide “sufficient reason”
for the deprivation or is procedurally unfair.
[38]
Â
To determine whether there is sufficient reason for a permitted deprivation, it
is necessary to evaluate the relationship between
the purpose of the law and
the deprivation effected by that law.
[39]
Â
A complexity of relationships must be considered in this assessment including
that between the purpose of the provision on the
one side, and the owner of the
property as well as the property itself on the other.
[40]
  If the purpose of the law
bears no relation to the property and its owner, the provision is arbitrary.Â
The customs law in issue
in the
FNB
case fell into this category.  It
permitted total deprivation of property even when the customs debt bore no
relationship either
to the owner or to the property itself.
[41]
[35]
The
FNB
judgment also sets out the
approach to be adopted if there is a connection between the purpose of the
deprivation and the property
or its owner.
[42]
Â
In these circumstances, there must be sufficient reason for the deprivation
otherwise the deprivation is arbitrary.  The nature
of the relationship between
means and ends that must exist to satisfy the section 25(1) rationality
requirement depends on the
nature of the affected property and the extent of
the deprivation.  A mere rational connection between means and ends could be

sufficient reason for a minimal deprivation.  However, the greater the extent
of the deprivation the more compelling the purpose
and the closer the
relationship between means and ends must be.
(b) The High Court judgment on
arbitrariness
[36]
The High Court was persuaded that there was, in
this case, no connection between the consumption charge and either the property
or its owner.  It was held that there were four significant similarities
between the deprivation permitted in the
FNB
case and that allowed by
section 118(1).
a)
Both laws permitted deprivation absent any
connection between the relevant debt and the owner of the property.
[43]
b)
Section 118(1) permitted a deprivation of
property when “there would be no connection between the owner and the property
on the
one hand and the municipal debt on the other” and was accordingly
similar “to the position in the
FNB
case where there was no connection
between the property and the customs debt”.
[44]
c)
The owner of the property had in neither case
induced the creditor to act to its detriment in relation to “the incurring of
the
debt”.
[45]
d)
The deprivation brought about by section 118(1)
and the customs law in issue in the
FNB
case could both continue
indefinitely until the debt was paid.
[46]
[37]
The High Court concluded, on the basis of these
perceived parallels, that the
FNB
judgment was “powerful and persuasive
authority” for the conclusion that section 118(1) was far-reaching and
therefore arbitrary.
[47]
Â
It was in the circumstances unnecessary for the High Court to decide whether
there was sufficient reason for the deprivation.Â
The applicants supported this
reasoning.
[38]
The High Court saw the purpose of section 118(1)
as being the protection of municipalities and the promotion of the collection of

debts owed to a municipality.
[48]
Â
It is however necessary to examine the purpose more closely.  The purpose of
section 118(1) is to furnish a form of security
to municipalities for the
payment of amounts due in respect of the consumption of water and electricity
(consumption charges).Â
The ultimate effect of the law is that the property in
connection with which the consumption charges have been incurred provides

security for the payment of that consumption charge.  In this sense the law
burdens the owners of property.  Municipalities are
obliged to provide water
and electricity to the residents in their area as a matter of public duty.
[49]
  It is therefore important
that the possibility that municipal debt remains unpaid be reduced by all
legitimate means.  Section
118(1) is concerned amongst other things, with the
question whether the municipality or the owner of property should bear the risk

when non-owner occupiers who are obliged to make these payments in the first
instance fail to do so.  In more specific terms therefore,
the purpose of the
provision is to place this risk on the owner.  The purpose is important,
laudable and has the potential to
encourage regular payments of consumption
charges and thereby to contribute to the effective discharge by municipalities
of their
constitutionally mandated functions.  It also has the potential to
encourage owners of property to discharge their civic responsibility
by doing
what they can to ensure that money payable to a government organ for the
delivery of service is timeously paid.  The
municipality also has
responsibilities in this regard but this aspect is briefly discussed later in
this judgment.  It follows
that the relationship between consumption charges on
the one hand and the owner of property and the property itself on the other

must be examined.
[39]
It is convenient to first discuss the
relationship between the consumption charge and the property.  As I have
already said, the
High Court in effect found that section 118(1) permitted a
deprivation of property when “there would be no connection between
the owner
and the property on the one hand and the municipal debt on the other” and was
accordingly similar “to the position
in the
FNB
case where there was no
connection between the property and the customs debt”.  In my view, however,
the difference between
the nature of the connection between the property and
the debt in the two cases is both fundamental and decisive.  In the
FNB
case, affected property (a motor vehicle in that case) leased by the owner to
the customs debtor could have been sold in execution
even if the vehicle had
nothing whatever to do with the customs debt.  The consequences of section
118(1) do not go that far.Â
Section 118(1) does not permit the deprivation of
property where there is no connection between it and the consumption charges.Â

As the High Court correctly points out the debt giving rise to deprivation is
required to have “become due in connection with
that property”.  The High Court
reasoned however that electricity and water consumed by a non-owner “would,
generally, benefit
neither the owner nor the property”, that the service was
merely being provided at the property and that the property-debt relationship

was therefore similar to that in the
FNB
case.
[40]
It cannot be accepted that electricity and water
are merely consumed at the property.  These amenities are supplied to the
property,
accessed and consumed by the occupier on the property and are enjoyed
by the occupier as part and parcel of the enjoyment of the
occupation of the
property.  What is more, the supply of electricity and water to a property
ordinarily increases its value; the
consumption of electricity and water
enhances its use and enjoyment.  Indeed, the consumption of electricity and
water by the
occupier is integral to the use and enjoyment of the affected
property and to its inherent worth.  There is therefore more than
just a close
relationship between the property and the consumption charge: the property and
the consumption charge are closely
interrelated.
[41]
What of the connection between the consumption
charge and the owner?  The High Court concluded that there was none, on the
basis
that section 118(1) applies in the case of “a vast array of non-owners”
including “tenants, persons exercising rights of habitatio
or exercising rights
of usufruct or fideicommissum, squatters or other mala fide occupiers”.
[50]
  It is self evident that the
exact character of the relationship between the owner and the consumption
charge will vary depending
on whether the property is occupied by the owner, a
tenant, a usufructuary, a fiduciary or an unlawful occupier.  However, there
is
a level at which the owner and the debt are usually connected or related
regardless of the nature of the relationship between
the owner and the occupier
and of whether the property is lawfully occupied.  This is because the owner is
bound to the property
by reason of the fact of ownership which, as I will consider
in more detail later, entails certain rights and responsibilities.Â
Both the
owner and the consumption charge are closely related to the property and the
property is always the link between the owner
on the one hand and the
consumption charge in respect of water and electricity provided by the
municipality on the other.
[42]
The applicants correctly point out that the
deprivation occurs even when there is no contractual relationship between the
owner
and the municipality that obliges the latter to supply water and
electricity to property that belongs to the former.  However,
it does not
follow from the absence of a contractual relationship that there is no
relationship.  In many instances, the owner
benefits from the increase in the
value of the property and the enhanced use and enjoyment of it because
electricity and water
are available there.  In some instances, notably in the
case of the unlawful occupier who has never had the consent of the owner
to
occupy, it is arguable that the supply of electricity and water to the property
for consumption by that occupier is of no benefit
to that owner at all.  It is
however fallacious to require that the owner must benefit from the consumption
charge before it can
be said that there is a relationship between the
consumption charge and the property.  The mere fact that the consumer of water

and electricity supplied to the property is an unlawful occupier cannot break the
strong owner, property and consumption charge
chain.  The High Court was also
incorrect in concluding that the subsection reveals no connection between the
consumption charge
and the owner.
[43]
The High Court wrongly held that the consumption
charge was connected neither to the property nor to the owner.  The charge is
connected to both.  It becomes necessary therefore to examine whether section
118(1) is arbitrary for want of the appropriate relationship
between means and
ends.  In other words, we must decide whether there is sufficient reason for
the deprivation.
(c) Is section 118(1) arbitrary
for want of an appropriate relationship between means and ends?
[44]
There are three interrelated steps to this enquiry.Â
We must determine in turn:
a)
the nature of the property concerned and the
extent of the deprivation;
b)
the nature of the means–ends relationship that
is required in the light of the nature and extent of the deprivation and
c)
whether the relationship between means and ends
accords with what is appropriate in the circumstances and whether it
constitutes
sufficient reason for the section 25(1) deprivation.
[45]
We are concerned in this case with the
deprivation of a single but important incident of ownership in immovable
property namely
the right to pass transfer of property to complete alienation.Â
The owner can continue to occupy the property, let it or do anything
else that
ownership allows.  The deprivation is moreover temporary.  The High Court was
incorrect in finding that, like the deprivation
in the
FNB
case, the
deprivation in the present case “may continue indefinitely”.
[51]
  The deprivation lasts for two
years only.  It is correct that if there are substantial arrears for
consumption charges and all
payments over an extended period are for current
consumption only and are credited to the amount first owing, the substantial
sum
may remain outstanding indefinitely and thereby constitute an obstacle to
transfer.  If, however, no further obligations are incurred
to increase the
existing indebtedness of the same occupier the limit on the power of the owner
to transfer the property will last
no more than two years.  Nevertheless, an
owner could in the purchase and sale agreement delay transfer for a period of
two years
on appropriate conditions.  Moreover there is nothing to make the
subsequent occupier liable for the consumption charge indebtedness
of a
previous occupier.  This means that the owner could, if he is able successfully
to eject a delinquent occupier, either occupy
the property or secure a reliable
tenant or other occupier for a two year period in order to terminate the
deprivation.
[46]
The extent of the deprivation is affected by the
amount of the consumption charge owing.  The larger the amount the greater the

extent of the deprivation.  Indeed, transfer becomes virtually impossible for
two years after the date on which the consumption
charges due exceed the market
value of the property.  It is necessary to emphasise that we are not concerned
in this case with
the deprivation of property consequent upon consumption
charges incurred by and for the benefit of the owner.  All the parties
agreed
that the deprivation that would result from that situation would not be
arbitrary.  We are concerned with the deprivation
of property occasioned by
electricity and water consumption on the part of non-owner occupiers only.
[47]
The basic reason for the accumulation of
consumption charges due in connection with any property occupied by non-owners
is non-payment
by those occupiers.  However, it is ordinarily possible for both
the municipality and the owner to guard against an unreasonable
accumulation of
outstanding consumption charges.  The municipality has a duty to send out
regular accounts, develop a culture
of payment, disconnect the supply of
electricity and water in appropriate circumstances, and take appropriate steps
for the collection
of amounts due.  The owner’s ability to protect her own
interest by ensuring that consumption charges are kept within reasonable
limits
depends to some extent on the nature of the relationship between her and the
occupier.  If that occupier is on the property
with the knowledge and consent
of the owner, the latter can, amongst other things, choose the occupier
carefully and stipulate
that proof of payment in relation to consumption
charges be submitted monthly on pain of some sanction including ejectment.  As

will appear more fully later, where the occupier is a usufructuary, the owner
could compel the occupier to comply with the obligation
to care for the
property and to ensure that all amounts due for the use and occupation of the
property are paid.  The position
is somewhat different where the property was
initially unlawfully occupied without the knowledge and consent of the owner.  It

has been suggested that the owner is completely innocent and utterly powerless
in this situation.  That is, however, not the whole
truth.  The owner has the
responsibility to take reasonable steps to ensure that it is not unlawfully
occupied and to take reasonable
steps to evict the occupier as a matter of
urgency if the circumstances warrant this.  I return to this later.
[48]
The amount of the consumption charges due in
connection with any property at any time would depend on a number of factors.Â
As
the following examples show, arrear consumption charges may accumulate in
circumstances where the owner or the municipality alone
has failed to carry out
the duties appropriate to each effectively or where both the owner and the
municipality have acted reasonably
and the arrear accumulation is due to some
other circumstance which might or might not have been appreciated by the owner,
the
municipality or both.  The owner might fail to take reasonable steps to
ensure that the property was not unlawfully occupied, fail
to take reasonable
steps to ensure the eviction of the unlawful occupier and fail to inform the
municipality of the fact of the
unlawful occupation.  In these circumstances, there
would be no-one to blame but the owner.
[49]
Whether and the way in which the municipality
discharges its duty to take reasonable steps to secure timeous payment could
have
a severe impact on the amount owing.  The municipality might, for example,
send no statement of account, take no steps to recover
amounts owing and
continue to supply water and electricity for a period as long as two years
without question in the case of a
failure of a non-owner occupier to make
payment.  The municipality might have been requested by the owner to be kept
informed
on the status of the account in relation to consumption charges due by
the occupier at reasonable intervals and might have refused
to do so.  The
municipality might know or might have been informed by the owner that the
occupier is on the property without the
owner’s knowledge and consent.  The
municipality might know that there are pending legal proceedings for the
ejectment of an
applicant already considerably in arrear and might continue to
supply electricity and water despite objection from the owner.Â
The owner, on
the other hand, might have taken all reasonable steps required of a responsible
owner, but to no avail.  The applicants
emphasise that a municipality cannot
sit by and allow consumption charges to escalate regardless and in the
knowledge that recovery
will be possible whenever the property falls to be
transferred.  They are right.  The municipality must comply with its duties
and
take reasonable steps to collect amounts that are due.
[50]
But this is not the only possible scenario.  The
municipality might do everything reasonable including the disconnection of
supply.Â
Yet the occupier might (and this is shown to have happened in the
evidence before us) in effect steal electricity and water from
the municipality
without the knowledge either of the municipality or the owner.  The evidence
also reveals the possibility of
successive occupiers put in by the owner who
occupy for relatively short periods each and whose indebtedness cannot be laid
at
the door of any subsequent occupier.  The owner could well be lumbered with
this indebtedness again in circumstances where neither
the owner nor the
municipality were strictly to blame.
[51]
Bearing this immediate context in mind, I now
consider the relationship between means and ends that is appropriate to
constitute
sufficient reason for the deprivation.  As I have said before, the
deprivation we are concerned with here involves a single but
significant
element of ownership and lasts effectively for two years.  It is not an
insubstantial deprivation.  The provision
in effect requires the owner of the property
to bear the risk of non-payment of consumption charges by non-owner occupiers.Â
In
my view, there would be sufficient reason for the deprivation if the
government purpose was both legitimate and compelling and if
it would, in the
circumstances, not be unreasonable to expect the owner to take the risk of
non-payment.  To decide this question
it is necessary to evaluate the
relationship between the consumption charge and the property relative to that
between the consumption
charge and the owner.  The closer the relationship
between the consumption charge and the property, the more tenuous the link
between the consumption charge and the owner can be.  Conversely, the more
tenuous the link between the consumption charge and
the property the closer the
consumption charge must be to the owner to qualify as sufficient reason.
[52]
The importance of the purpose of the provision
has been discussed earlier.
[52]
Â
It is emphasised that municipalities are obliged to provide water and
electricity and that it is therefore important for unpaid
municipal debt to be
reduced by all legitimate means.  It bears repeating that the purpose is
laudable, has the potential to encourage
regular payments of consumption
charges, contributes to the effective discharge by municipalities of their
obligations and encourages
owners of property to fulfil their civic responsibility.
[53]
It is now necessary to consider the position of
each category of occupiers and set of circumstances by reference to which the
constitutionality
of section 118(1) was called into question by the applicants
and by the High Court.
[53]
 I start with tenants.  There is a close interrelatedness between the
consumption charge and the property as well as that between
the consumption
charge and the owner.  It has been pointed out that the supply of electricity
and water enhance the use, enjoyment,
and value of the property.  It has an
impact on the amount of rent payable.  The benefit to the owner and the
property in these
circumstances cannot be gainsaid.  The relationship between
the owner and the consumption charge is so close as to justify a reasonable

expectation that the owner would choose a responsible tenant, monitor payment
by the tenant of consumption charges that are due
and ensure that the agreement
of tenancy is appropriately crafted.  An agreement could provide, for example,
that the consumption
charges must be regularly paid by the tenant, that proof
of payment is given to the owner and that eviction or other consequences
would
follow if there is non-payment.  There is therefore no basis to suggest that it
would be unreasonable for the owner to bear
the risk.  The provisions are
therefore not arbitrary to the extent that they cover consumption charges due
by tenants.
[54]
The section 118(1) certificate must also cover
the consumption charges due in connection with the property by an occupier who
holds
over unlawfully after the termination of a lease or some other legal
relationship that rendered occupation lawful at the time it
began.  Here again,
the relationship between the consumption charge and the property as well as the
owner are sufficiently strong
for the owner to bear the risk.  There are
allegations that tenants and those who hold over reconnect electricity and
water illegally
after the municipality has effected a disconnection consequent
upon the failure by the occupier to pay consumption charges.  The
submission
that it is arbitrary for the owner to bear the risk of non-payment in these
circumstances must also be rejected.  The
relationship between the owner, the
property and the consumption charge remains sufficiently close to expect the
owner to take
the risk.  The owner would have chosen the tenant and would
receive rental where the occupier concerned is a tenant or would be
entitled to
damages for holding over from an unlawful occupier.  The connection is
sufficiently strong.
[55]
Fiduciaries and usufructuaries must be discussed
next.  It is not necessary to discuss the usufruct and fideicommissum in detail

here.  The usufruct is an institution in which the usufructuary has the right
to possess, use and enjoy property belonging to
another in such a way that the
substantial character of the property is preserved and there is a duty to
restore the property to
the owner upon the termination of the usufruct.
[54]
  A fideicommissum is a
disposition of property to a fiduciary who is required to pass the property
onto another beneficiary, the
fideicommissary, on the happening of an event or
on a specified date.
[55]
Â
Both fiduciaries and usufructuaries cannot diminish, alienate or consume the
property.
[56]
Â
Both the fiduciary and the usufructuary can let the property.
[57]
[56]
In a usufruct, the relationship between the
consumption charge and the property is as close as it is in the case of a
tenant.Â
It is true that in the case of a usufruct created by will, the owner
who has been given the property would have no control over
who the usufructuary
would be.  Nevertheless there is some connection between the usufructuary and
the owner in the sense that
the owner has the right to ensure that the
usufructuary cares for the property, does not burden the property unduly by the
use
and enjoyment of it and provides security for the restoration of the
property to the owner in good condition.  The consumption
charge is incurred in
the course of the usufructuary’s use and enjoyment of the property sanctioned
by the very instrument that
resulted in her becoming the owner.  Indeed, the
owner’s right to alienate the property is limited by the rights of the
usufructuary
during the term of the usufruct.  The owner acquires the property
subject to the usufruct.  It cannot therefore be said that it
is unreasonable
to expect the owner to carry the risk of non-payment by the usufructuary as a
necessary incident of the condition
attaching to that ownership.
[57]
In the case of a fideicommissum, the fiduciary
will be hit by the provisions of section 118(1) because she remains the owner
of
the property until and unless the condition that would result in the
property being transferred to the fideicommissary is fulfilled.Â
If the
occupier of property is someone other than the fiduciary, the fiduciary will be
obliged to pay the consumption charges incurred
by that occupier before that
property can be transferred to the eventual beneficiary, the fideicommissary.  When
the fideicommissary
becomes the owner as a result of the fulfilment of the
condition, section 118(1) will apply to her if and when she wishes to alienate

the property.  In other words, the fiduciary is in effect the owner of the
property until the condition is fulfilled and the fideicommissary
becomes the
owner of the property after the condition is fulfilled.  In the circumstances,
the fact that property is subject to
a fideicommissum has no impact upon the
arbitrariness or otherwise of section 118(1).
[58]
Finally, it is necessary to consider whether it
is arbitrary for the owner to be burdened with the risk of paying consumption
charges
for water and electricity supplied to the property and consumed by a
narrow category of unlawful occupiers: occupiers who got on
to the property
without the knowledge or consent of the owner and who remain on the property.Â
To put the question in another
way: Is it unreasonable to expect an owner of
property to pay these charges as a prerequisite to transfer of the property if
the
municipality supplies water or electricity to unlawful occupiers and if
these occupiers do not discharge their indebtedness to the
municipality?  The enquiry
involves a comparison of the position of the municipality and the owner in
relation to the property,
the unlawfulness of the occupation and the
consumption charge.
[59]
This unlawful occupation benefits neither the
property nor the owner and, in most cases, is prejudicial to both.  It is nevertheless

the duty of the owner to safeguard the property, to take reasonable steps to
ensure that it is not unlawfully occupied and, if
it is, to take reasonable
steps to ensure the eviction of the occupier.  If the owner performs these
duties diligently, unlawful
occupiers will not, in the ordinary course, remain
on the property for a long period.  It is ordinarily not the municipality but

the owner who has the power to take steps to resolve a problem arising out of
the unlawful occupation of her property.  It is
accordingly not unreasonable to
expect the owner to bear the risk.
[60]
The relationship between the property and the
consumption charge in these circumstances is strong because the water and
electricity
is supplied to and consumed on the property in the course of its
use and enjoyment.  This relationship compensates for the somewhat
attenuated
connection between the owner and the consumption charge.  It is true that legal
proceedings may be protracted at times
but this does not afford justification
to transfer the risk from the owner of the property to the municipality.  It
may be that
the municipality ought not to have supplied the unlawful occupier
with electricity and water in the circumstances that prevailed.Â
This would
mean simply that the amount cannot be said to be “due” in connection with the
property and any dispute in relation
to this must be resolved by a court.  This
can be done either before transfer or, if the owner pays to obtain the
certificate,
after transfer.  Owners of property have to bear the risk in
relation to many occurrences as an integral incident of the exercise
of the
right of ownership.  They for example bear the risk if the property is damaged
or destroyed or if movables are stolen.Â
There seems to me to be little
difference in principle between the risk borne by the owner in relation to the
theft of movable
property and that borne by an owner of immovable property in
relation to consumption charges incurred as a result of the unlawful
occupation
of that property.  The burden placed on the owner by section 118(1) in
consequence of unlawful occupation does not
render section 118(1) arbitrary.
[61]
The applicants emphasised that the municipality
supplied the service to the occupier and that this local government body had
rightly
been allocated the statutory duty to ensure that all amounts due were
effectively collected from the occupier.  It was also stressed
that the owner
had never asked for the service, did not directly benefit from it and had
little control over consumption.  In
these circumstances, the applicants
strongly resisted what they regarded as a provision that in truth relieved the
municipality
of the obligation to collect amounts due to it and transferred
them to the owner.  This the applicants said rendered the provision
arbitrary.
[62]
Section 118(1) does not relieve the municipality
of its duty.  It must continue to do everything reasonable to ensure
appropriate
collection of its debt.  That municipal debt as a whole has
accumulated to devastating proportions is of considerable concern.Â
So too is
the evidence to the effect that, in relation to many of the applicants before
this Court, large amounts due in relation
to consumption charges have remained
outstanding for a considerable period.  There is disputed evidence before us
concerning the
degree of inefficiency of the municipalities that have been
cited.  No more should be said about this aspect than that if the inefficiency

of the municipality degenerates to the extent where it can be proved to be
negligence that occasioned damage to the owner of the
property concerned,
owners may have a delictual claim for damages against the municipality.  It
must be emphasised that it is
imperative for municipalities to do everything
reasonable to reduce amounts owing.  Otherwise, the sustainability of the
delivery
of municipal services is likely to be in real jeopardy.
[63]
The KwaZulu-Natal Law Society, relied on the
circumstance that there was a great deal of confusion created by the
requirements of
the section and that this had an impact on the speed with which
property was transferred.  Parties to contracts did not understand
the terms of
the impugned provision and the completion of the certificate requirement also
resulted in undue delays.  The fear
was that this would have a serious impact
on the property market.  It has been shown in these cases that some municipalities
have
been less than efficient in the issue of certificates, that the accounts
sent by them have in many instances been unclear and that
there are instances
in which amounts said to be due as a precondition for the issue of a
certificate have reduced considerably
and inexplicably over time.  In the
Geyser
case in which the Society was an applicant the seller was first informed by the
municipality that the amount required to obtain
the section 118(1) certificate
was R125 934.68.  By the time the matter came to be argued in court some months
later however it
became common cause that the sum required was R47 145.29.
[64]
All these are matters of concern but they do not
render the provision arbitrary.  Counsel was inclined to concede that these
difficulties
could well be the result of the fact that this was a new provision
and that these negative consequences would probably diminish
as all the
affected parties gained a greater understanding of the provision and its
implications.  It is necessary for all municipalities
to ensure that they have
reasonably accurate records and that they are able to provide complete,
credible, comprehensible and reasonably
detailed information in relation to
consumption charges that are owing within a reasonable time of being requested
to furnish it.Â
Without this, the transfer process is likely to be unduly
slowed down.  It must be understood by all concerned that municipalities
have
the obligation to furnish this information to all owners intent upon selling
their property.  It must also be understood
that they can be compelled to
provide that information by court proceedings if this should turn out to be
necessary.
Procedural fairness
[65]
It was held in the
FNB
case that the law
that results in a deprivation of property must, in addition to showing an
appropriate relationship between means
and ends, be procedurally fair.
[58]
  Nothing was however said in
that case about what procedural fairness entailed in the context of the
determination of arbitrariness
for purposes of section 25(1) of the
Constitution.  It was contended that section 118(1) was not procedurally fair
principally
because it did not impose any obligation on municipalities to keep
property owners informed of the amounts owing by occupiers at
reasonable
intervals when this is requested by the property owners in writing.  This meant
that owners were often taken by surprise
by the large amounts of consumption
charges owing when certificates were sought in the process of the transfer of
property.  Owners
were accordingly often unable to pay consumption charges due
with the speed required by the exigencies of the situation.  This,
it was said,
was unfair.  This Court has held in contexts other than a section 25(1)
arbitrariness investigation that procedural
fairness is a flexible concept and
that the requirements that must be satisfied to render an action or a law
procedurally fair
depends on all the circumstances.
[59]
  This proposition applies
equally to procedural fairness mandated by section 25(1).
[66]
The circumstances here are that the municipality
has, or ought to have, a running accurate record of the amounts that are due, a

municipality would know if the amounts outstanding are unreasonably high and it
would be theoretically possible for the municipality
to keep the owner
informed.  The practical implications of a municipality assuming a
responsibility of this kind are considerable.Â
Additional resources and
processes need to be put in place.  The other side of this coin is that owners
are, or ought to be, in
a position to care for their property, keep in touch
with occupiers and monitor the occupation and use of their properties.  These

considerations point to a conclusion that a municipality should not be required
to furnish the owner of property with information
on a continuous basis for the
law to be procedurally fair.  Owners also complain however that municipalities
refuse to provide
information even if they are requested to do so.  There is no
basis for this refusal.  The owner has an interest to know how much
is owing
and a municipality is obliged to provide the information if requested to do so.
[67]
Fairness requires a municipality to provide an
owner of property with copies of all accounts if the owner requests them.  The
absence
of this requirement would render the deprivation in this case
procedurally unfair.  However, it is reasonably possible to interpret
the
section to mean that there is a necessary implication that the municipality is indeed
obliged to furnish accounts to the owner
upon request where the property is not
occupied by the owner.  It has been pointed out that the municipalities in this
case disputed
the obligation to furnish the information.  It is important for
there to be certainty in this regard.  It is accordingly appropriate
to declare
that every municipality is obliged to provide copies of monthly accounts in
respect of amounts owing for water and electricity
by occupiers of property
where the owner is not the occupier on the written request of the owner.
Other arguments
[68]
One of the applicants contended that section
118(1) was unconstitutional by reason of its inconsistency with sections 9(1),
26,
and 34 of the Constitution.  Each of these arguments must now be
considered.
[69]
Section 9(1) of the Constitution provides:
“Everyone is equal before the law and has
the right to equal protection and benefit of the law.”
The essence of the applicant’s
argument is that an owner of property occupied by a non-owner is in effect
rendered surety for
the debt owing by the occupier.  As I understand it, the
argument goes that an owner in this category is denied equal protection
of the
law because she is treated differently from the owner who occupies the property
or owns property that is unoccupied.  The
latter, so it is argued, is not
burdened with any suretyship while the former is.  The complaint is that not
all owners of property
are treated alike.  The argument must be rejected.  The
suggestion implied by the argument that owners could be held liable for
debts
of occupiers when there are none is absurd.  It is quite impossible to hold any
owner liable for consumption charges that
do not exist.  There is a fundamental
and obvious difference between the position of the owner of property who
occupies it and
the owner whose property is occupied by others.  A law that
recognises these differences and treats the owner in each category
differently
cannot, for that reason alone, offend the equality principle.
[70]
The argument based on section 26 of the
Constitution
[60]
is that section 118(1) impedes the right of access to adequate housing
guaranteed by subsection (1), and that it is inconsistent
with the government
obligation to take reasonable legislative and other measures to give effect to
this right  in terms of subsection
(2).  It is true that section 118(1) places
restrictions on the transfer of property and that the right of access to
housing could
be affected if the property in question has been bought for the
purposes of housing.  But the obstacles to transfer are not in
reality placed
by the government.  The reason for the difficulty is that consumption charges
due in respect of that property have
not been paid by the previous occupiers.Â
It could not be contended that a law which obliges owners to pay consumption
charges
owing by them to the municipality before the property can be validly
transferred would constitute a breach of the right to housing
or is
inconsistent with the state’s obligations.  The cause of the trouble is the
failure of the owner to pay.  In the same
way, the cause of the obstacle to
transfer where consumption charges are due by the occupier is the failure of
the occupier to
pay.  This argument too, must fail.
[71]
The last argument advanced is that the
certificate requirement unjustifiably limits section 34 of the Constitution.
[61]
  This contention is based on
the fact that a municipality is not obliged to go to court to get any judgment
against the owner
or occupier before the restriction on the right to transfer
becomes operative.  The suggestion is that this case is similar to
the
Lesapo
case in which the creditor was entitled, without approaching a court, to
enter into execution and receive payment of the debt.
[62]
Â
Lesapo’s
case is very
different from this one.  Here, an aspect of the right of property is
restricted.  This judgment holds that the
section 118(1) restriction does not
amount to a limitation of the right of every person not to be deprived of
property arbitrarily,
of the section 9 equality right or of the section 26
right to housing.  Nor is it apparent that the restriction involves the
limitation
of any other rights in our Bill of Rights.  Section 34 does not
extend so far as to prevent the imposition of any restriction on
any right
without the order of a court having first been obtained.  The section gives
everyone the right of access to a court
to have justiciable issues decided
impartially.  A dispute about the amount of the consumption charge that must be
settled before
a section 118(1) certificate can be issued is a justiciable
issue.  There is nothing to prevent any owner or purchaser of property,

including any applicant in this case, from accessing a court to have the
justiciable issue resolved.  The last argument has nothing
to commend it.
Section 50(1)(a)
[72]
It has already been pointed out that section
50(1)(a) has the same effect as section 118(1) save in one respect.  Section
50(1)(a)
requires that the certificate that must be obtained as a necessary
step precedent to transfer must cover consumption charges that
remain owing for
a period of three years before the date of issue of the certificate.  It will
be remembered that the section
118(1) certificate must cover only a two year
period.
[63]
Â
The question that must be answered therefore is whether section 50(1)(a) is
arbitrary by reason of the fact that the period of
three years is unacceptably
long.  There was no argument to this effect.  Nor could there be.  Section
50(1)(a) is accordingly
not arbitrary for the reasons advanced in this judgment
in support of the same conclusion in relation to section 118(1).
The practicalities
[73]
This judgment holds that the owner of property
is, in effect, obliged to ensure that certain consumption charges owing to the
municipality
in connection with a property are paid before that property can be
validly transferred.  The facts of the cases before us show
that there is the
possibility of a whole range of disputes that might arise in the process of the
application of both section 118(1)
and section 50(1)(a).  Some of the disputes
that may arise in connection with the consumption charges alleged by the
municipality
to remain owing in connection with the property may concern the
accuracy of the amount, whether the sum relates to consumption charges
as
contemplated by each of the provisions and whether the amount alleged is
limited to the relevant period of two or three years.Â
In the nature of things,
the resolution of these disputes can take time.  The passage of more than a
reasonable time between the
sale of property and its transfer can be unduly
onerous to both the parties to the sale.  The delay could be considerable if
the
dispute between the parties cannot be resolved without resorting to court
proceedings.  If municipalities keep accurate and full
records and supply
information to owners, the time taken to resolve any disputes that may arise
would be minimal in most cases.Â
It must be pointed out however that the owner
who wishes to effect transfer of property reasonably quickly in circumstances
where
it is not possible to resolve a dispute in connection with the amount of
consumption charges required to be paid to facilitate transfer
is not
necessarily in an impossible position.  It may be possible, in appropriate
cases, for an owner to demonstrate that she
has a clear right to transfer, that
there is a dispute about this and that the balance of convenience justifies the
grant of an
order compelling a municipality to issue a certificate subject to
appropriate conditions pending the final determination of court
proceedings
aimed at resolving the dispute.  A municipality or owner found, at the end of
the day, to have been wrong in the attitude
taken at the time of transfer will
have to face the appropriate consequences.  It is therefore appropriate for all
owners and
municipalities to negotiate meaningfully and in good faith when
disputes around the application of section 118(1) or section 50(1)(a)
arise.
Costs
[74]
The parties who contend for the invalidity of
section 118(1) and section 50(1)(a) have failed.  However, they raised
important
issues and concerns about legislative provisions that intrude upon
the important right of an owner to transfer property.  An order
obliging them
to pay the costs of this application would have a chilling effect on members of
South African society who wish to
approach a court to raise important
constitutional concerns.  In the circumstances, there should be no order as to
costs in relation
to proceedings in this Court or in the High Court.  The WLD
proceedings have not yet been terminated and may continue there in
the light of
this judgment.  It will in the circumstances be inappropriate to make any order
in relation to the costs of the WLD
proceedings.  However, all the parties in
the WLD case must pay their own costs in relation to the proceedings in this
Court.
The Order
[75]
The following order is made:
A.
Case CCT 1/04
Transfer
Rights Action Campaign and Others v Member of the Executive Council for Local
Government and Housing in the Province of
Gauteng and Others
(1)
The application for direct access is granted only to the extent that
it concerns the challenge to the constitutionality of
section 118(1)
of the
Local Government: Municipal Systems Act 32 of 2000
and section 50(1)(a) of the
Provincial Government Ordinance No 17 of 1939 (Gauteng).
(2)
The application for direct access is refused in all other respects.
(3)
The application for the declaration of the constitutional invalidity
of
section 118(1)
of the
Local Government: Municipal Systems Act 32 of 2000
and
section 50(1)(a) of the Provincial Government Ordinance No 17 of 1939 (Gauteng)
is dismissed.
B.
Case CCT 57/03
Nokuthula
Phyllis Mkontwana v Nelson Mandela Metropolitan Municipality and Another
(1)
The appeal succeeds.
(2)
The order of the South Eastern Cape Local Division of the High Court
is accordingly not confirmed.
(3)
The order of the South Eastern Cape Local Division of the High Court
is set aside and replaced by the following order:
(a)
The application is dismissed.
(b)
There is no order as to costs.
C.
Case CCT 61/03
Peter
William Bissett and Others v Buffalo City Municipality and Others
(1)
The application by the Buffalo City Municipality to introduce
further evidence is refused.
(2)
The appeal succeeds.
(3)
The order of the South Eastern Cape Local Division of the High Court
is accordingly not confirmed.
(4)
The order of the South Eastern Cape Local Division of the High Court
is set aside and replaced by the following order:
(a)
The application is dismissed.
(b)
There is no order as to costs.
D.
It is declared that a municipality is obliged to supply copies of
all monthly statements rendered to an occupier of property for
the supply of
water or electricity to that property to an owner of the property who requests
them in writing.
Chaskalson
CJ, Langa DCJ, Madala J, Moseneke J, Ngcobo J, Skweyiya J and Van der
Westhuizen J concur in the judgment of Yacoob J.
O’REGAN J:
[76]
I have read the judgment written by Yacoob J.Â
Although I concur in the order he proposes, the reasoning by which I reach this
conclusion is somewhat different to his.  The crisp issue we need to determine
is whether section 118(1) of the Local Government:
Municipal Systems Act, 32 of
2000 (the Act) is in breach of section 25 of the Constitution. Section 50(1)(a)
of the Gauteng Local
Government Ordinance
[1]
is also under challenge in the case on the same grounds.  It is in similar
terms to section 118(1) and will stand or fall by the
reasoning that applies to
section 118(1).
[77]
Before turning to that question, I note that I
agree with Yacoob J’s reasoning and order concerning the grant of direct
access.Â
I also agree with him that the argument that section 118(1) should be
interpreted to apply only to consumption charges incurred
by the owner is not
sustainable and falls to be rejected for the reasons he gives.  The difference
between this judgment and his
relates only to the approach that should be
adopted to answer the question whether a particular legislative provision
constitutes
a limitation of section 25(1) of the Constitution.
[78]
Section 118(1) of the Act provides as follows:
“A registrar of deeds may not register the
transfer of property except on production to that registrar of deeds of a
prescribed
certificate─
(a)        issued by the municipality or municipalities in which
that property is situated; and
(b)        which certifies that all amounts that became due
Â
in
connection with that property for municipal service fees, surcharges on fees,
property rates and other municipal taxes, levies
and duties during the two
years preceding the date of application for the certificate have been fully
paid.”
The provision requires that a
registrar of deeds may not transfer property unless he or she has received a
certificate from the
relevant municipality that all amounts owing in connection
with the property in respect of rates and service charges in the previous
two
years have been paid.  The issue in this case is whether, to the extent that
service charges for water and electricity have
been incurred by consumers other
than the owner of the property, it is a breach of the owner’s rights to hinder
transfer of the
property in this way.
The approach to section 25 of
the Constitution
[79]
Determining whether a particular statutory
provision constitutes a breach of section 25(1) of the Constitution requires a
contextual
understanding of section 25 of the Constitution which provides that:
“(1)      No one may be deprived of property except in terms of law
of general application, and no law may permit arbitrary
deprivation of
property.
(2)        Property may be expropriated
only in terms of law of general application ─
            (a)        for a public purpose
or in the public interest; and
(b)        subject to compensation, the amount of which and the time
and manner of payment of which have either been agreed
to by those affected or
decided or approved by a court.
(3)        The amount of the compensation and the time and manner of
payment must be just and equitable, reflecting an equitable
balance between the
public interest and the interests of those affected, having regard to all
relevant circumstances, including
─
            (a)        the current use of
the property;
            (b)        the history of the
acquisition and use of the property;
            (c)        the market value of
the property;
(d)        the extent of direct state investment and subsidy in the
acquisition and beneficial capital improvement of the
property; and
            (e)        the purpose of the
expropriation.
(4)        For the purposes of this section
─
(a)        the public interest includes the nation's commitment to
land reform, and to reforms to bring about equitable access
to all South
Africa's natural resources; and
(b)        property
is not limited to land.
(5)        The state must take reasonable legislative and other
measures, within its available resources, to foster conditions
which enable
citizens to gain access to land on an equitable basis.
(6)        A person or community whose tenure of land is legally
insecure as a result of past racially discriminatory laws
or practices is
entitled, to the extent provided by an Act of Parliament, either to tenure
which is legally secure or to comparable
redress.
(7)        A person or community dispossessed of property after 19
June 1913 as a result of past racially discriminatory laws
or practices is
entitled, to the extent provided by an Act of Parliament, either to restitution
of that property or to equitable
redress.
(8)        No provision of this section may impede the state from
taking legislative and other measures to achieve land, water
and related
reform, in order to redress the results of past racial discrimination, provided
that any departure from the provisions
of this section is in accordance with
the provisions of section 36 (1).
(9)        Parliament must enact the
legislation referred to in subsection (6).”
[80]
This Court considered the approach to the
interpretation of section 25 in
First National Bank of SA Ltd t/a Wesbank v
Commissioner, South African Revenue Service and Another; First National Bank of
SA Ltd
t/a Wesbank v Minister of Finance
(“the
First National Bank
case”).
[2]
Â
In that case, the Court held that section 25 had to be understood in the light
of the overall purpose of our Constitution.Â
Ackermann J, for a unanimous
court, reasoned as follows:
“The preamble to the Constitution indicates that one of the
purposes of its adoption was to establish a society based, not only
on ‘democratic
values’ and ‘fundamental human rights’, but also on ‘social justice’.  Moreover
the Bill of Rights
places positive obligations on the State in regard to
various social and economic rights.
[3]
Â
Van der Walt (1997)
[4]
aptly explains the tensions that exist within s 25:
‘[T]he meaning of s 25 has to be
determined, in each specific case, within an interpretative framework that
takes due cognisance
of the inevitable tensions which characterize the
operation of the property clause.  This tension between individual rights and

social responsibilities has to be the guiding principle in terms of which the
section is analysed, interpreted and applied in every
individual case.’
The purpose of s 25 has to be seen both as protecting
existing private property rights as well as serving the public interest, mainly

in the sphere of land reform but not limited thereto, and also as striking a
proportionate balance between these two functions.
”
[5]
[81]
The property clause must therefore be
interpreted in a manner which seeks to establish a balance between the need to
protect private
property, on the one hand, and to ensure that property serves
the public interest, on the other.  This balance will need to be
struck in the
light of our history.  The inclusion in section 25 of the provisions of
subsections (5) to (9) emphasises the importance,
in particular, of the need
for land reform and the importance of security of tenure on land.  These
provisions highlight the inequities
of land distribution in South Africa, as a
result of the processes of colonial and apartheid dispossession.  As this Court
has
emphasised on many occasions, our Constitution is a document committed to
social transformation.
[6]
Â
It insists that the deep injustices of our past characterised by racial
dispossession and exclusion be addressed and reversed.Â
The Constitution’s
commitment to the protection of property rights must be interpreted in a manner
consonant with that vision.
[82]
The history of dispossession in South Africa,
however, has also made it sharply apparent that property, whether land or other
possessions,
is important to individuals and to communities, not only for
material reasons, but for reasons of culture, identity and dignity.Â
We should
be careful in approaching the property clause, not to underestimate the
importance of property in our constitutional
scheme.  Property is valued,
partly at least, because we are acutely conscious of the deep damage inflicted
in the past, particularly
on black South Africans, by the taking of their land
and possessions.  Nevertheless it is also quite clear that the right to
property
is not an absolute one in our constitutional order.  In approaching
the property clause we must therefore recognise the constitutional
value of
property, and the importance of protecting it, while recognising that it is not
absolute.  A balance must be struck between
the need to protect property, on
the one hand, and the recognition that rights in property may be appropriately
limited to facilitate
the achievement of important social purposes, including
social transformation, on the other.
[83]
Each particular subsection in the property
clause needs to be understood in the light of this context and these goals.  In
this
case, as in the
First National Bank
case,
[7]
we are concerned with the
proper interpretation of section 25(1) of the Constitution.  In that case, the
Court, in order to determine
whether the relevant statutory provision
constituted a limitation of section 25(1), held that it is necessary to
determine first,
whether it constitutes a “deprivation” for the purposes of
that section; and, secondly, whether that deprivation is arbitrary.Â
A third
requirement is to consider whether any deprivation is caused by a law of
general application.  It is quite clear that
section 118(1) does constitute a
law of general application and this issue need not trouble us further.
[8]
Does section 118(1) constitute a
deprivation of property?
[84]
The question of what constitutes a deprivation
of property was considered in the
First National Bank
case.
[9]
  In that case, the Court was
concerned with a challenge to section 114 of the Customs and Excise Act, 91 of
1964.  Section 114
permitted the Commissioner of the South African Revenue
Service to detain and sell property to meet customs debt.  The challenge
in the
case related to the categories of property that the Commissioner could attach
which included goods on any premises in the
possession of or under the control
of the customs debtor.  The challenge was brought by a bank that provides
finance for the leasing
of motor vehicles.  Three of its motor vehicles had
been attached by the Commissioner on the premises of a customs debtor and were

to be sold by the Commissioner.
[85]
The Court considered the question of what
constituted a deprivation for the purposes of section 25(1).  It noted that the
phrase
“deprivation of property” can be misleading as it may suggest that
deprivation refers to the taking away of property in its
entirety.  This
understanding of the phrase was rejected by the Court in the light of
international jurisprudence.  The Court
continued as follows:
“In a certain sense any interference with
the use, enjoyment or exploitation of private property involves some
deprivation in
respect of the person having title or right to or in the
property concerned.”
[10]
[86]
The Court did not however conclude that
“deprivation” in section 25(1) should have such a wide ambit.  It was not
necessary
to do so for the purpose of the
First National Bank
case.  In
that case, the effect of the challenged provision was that an owner could be
deprived of all rights in a corporeal movable.Â
Once the property had been
detained by the Commissioner it could be sold to meet the customs debt.  It was
clear, therefore, that
section 114 could result in a loss of ownership and
consequently a loss of the ability to use, enjoy or exploit the property.Â
Loss
of ownership must clearly constitute a deprivation for the purposes of section
25(1) and it was not necessary for the Court
to consider in any great detail
the precise ambit of what would constitute a deprivation for the purposes of
section 25(1) in circumstances
where an interference with property fell short
of a loss of ownership.
[87]
In this case, an owner is not deprived of
ownership by section 118(1) of the Act, but one of the incidents of ownership,
the ability
to alienate immovable property, is impaired.  Accordingly, it is
necessary to consider whether an interference with ownership falling
short of
loss of ownership will fall within the concept of “deprivation” in section
25(1).  Understanding what deprivation
means within section 25(1) requires an
evaluation of the constitutional purpose of that section.
[88]
It could be argued that “deprivation” in section
25(1) relates only to the complete removal of ownership or other real rights
in
property and not to limitations on real rights.  Indeed, Mr Unterhalter argued
that the limitation on property rights of owners
occasioned by section 118(1)
did not constitute a deprivation for the purposes of section 25(1).  In my
view, section 25(1) should
not be interpreted so narrowly.
[89]
There can be no doubt that some deprivations of
property rights, although not depriving an owner of the property in its entirety,

or depriving the holder of a real right of that real right, could nevertheless
constitute a significant impairment in the interest
that the owner or real
right holder has in the property.  The value of the property in material and
non-material terms to the
owner may be significantly harmed by a limitation of
the rights of use or enjoyment of the property.  If one of the purposes of

section 25(1) is to recognise both the material and non-material value of
property to owners, it would defeat that purpose were
“deprivation” to be read
narrowly.
[90]
Moreover, as will be seen later, one of the
considerations relevant to determining whether a deprivation is arbitrary or
not is
the extent of the deprivation itself and the effect on the property
owner.  Establishing whether a “sufficient reason” exists
for the deprivation
will depend on the character of the deprivation.  A minor deprivation will more
easily be held to have a “sufficient
reason” than an invasive deprivation.Â
“Deprivation” in section 25(1), therefore, should not be given too limited a
meaning.Â
It should be emphasised, however, that there may be limitations on
property rights which are either so trivial or are so widely
accepted as
appropriate in open and democratic societies as not to constitute
“deprivations” for the purposes of section 25(1).Â
This is not a matter which I
need to decide for the purposes of this case, and it may be left open for
further consideration in
future.
[91]
The ability to alienate immovable property may
be considerably impaired by section 118(1).  The right to alienate property is
an
important incident of ownership and interference with that right can
significantly impair the enjoyment and benefit an owner derives
from property.Â
The extent of the actual impairment will in most cases depend on the quantum of
the unpaid service charges.Â
The higher that quantum, and the closer to the
overall value of the property, the greater the impairment of the right to alienate

may be.  In some of the individual cases under consideration here, the quantum
of service charges has mounted to a point where
it constitutes a significant
proportion of the overall value of the property.  In such circumstances, the
effect of section 118(1)
may be that the right to alienate the property will be
limited for at least a period of two years.  Such an impairment of the right
to
alienate property is neither trivial, nor is there any suggestion by the
litigants that such limitations are ordinarily imposed
by most open and
democratic societies.  I conclude therefore that section 118(1) does constitute
a deprivation for the purposes
of section 25(1) of the Constitution.
Is the deprivation arbitrary?
[92]
The question of what constitutes an arbitrary
deprivation was also considered in the
First National Bank
case.
[11]
  In that case, the Court
identified the following considerations relevant to determining whether a
deprivation is arbitrary:
“Having regard to what has gone before, it
is concluded that a deprivation of property is ‘arbitrary’ as meant by s 25
when
the ‘law’ referred to in s 25(1) does not provide sufficient reason for
the particular deprivation in question or is procedurally
unfair.  Sufficient
reason is to be established as follows:
(a)        It is to be determined by evaluating the relationship
between means employed, namely the deprivation in question
and ends sought to
be achieved, namely the purpose of the law in question.
(b)        A complexity of relationships
has to be considered.
(c)        In evaluating the deprivation in question, regard must be
had to the relationship between the purpose for the deprivation
and the person
whose property is affected.
(d)        In addition, regard must be had to the relationship
between the purpose of the deprivation and the nature of the
property as well
as the extent of the deprivation in respect of such property.
(e)        Generally speaking, where the property in question is
ownership of land or a corporeal moveable, a more compelling
purpose will have
to be established in order for the depriving law to constitute sufficient
reason for the deprivation than in
the case when the property is something
different and the property right something less extensive.  This judgment is
not concerned
at all with incorporeal property.
(f)        Generally speaking, when the deprivation in question
embraces all the incidents of ownership, the purpose for the
deprivation will
have to be more compelling than when the deprivation embraces only some
incidents of ownership and those incidents
only partially.
(g)        Depending on such interplay between variable means and
ends, the nature of the property in question and the extent
of its deprivation,
there may be circumstances when sufficient reason is established by, in effect,
no more than a mere rational
relationship between means and ends; in others
this might only be established by a proportionality evaluation closer to that
required
by s 36(1) of the Constitution.
(h)        Whether there is sufficient reason to warrant the
deprivation is a matter to be decided on all the relevant facts
of each
particular case, always bearing in mind that the enquiry is concerned with
‘arbitrary’ in relation to the deprivation
of property under s 25.”
[12]
[93]
A deprivation will be arbitrary if it is either
without “sufficient reason” or procedurally unfair.  There can be no doubt that

the requirement of procedural fairness is an important one in evaluating
whether a deprivation is arbitrary or not.  I agree with
the reasoning and
conclusion of Yacoob J that section 118(1) must be understood to require a
municipality to furnish statements
of account when requested to do so in
writing by an owner.  I need say no more about procedural unfairness in this
judgment.
[94]
 The other issue is whether there is sufficient
reason for the deprivation.  The approach established in the
First National Bank
case requires a court to consider the extent of the deprivation, on the one
hand, and evaluate it in the light of the purpose of
the legislation that
occasions the deprivation.  What will constitute sufficient reason will depend,
as we said in the
First National Bank
case, on the extent of the
deprivation,
[13]
the nature of the property concerned
[14]
and all the relevant facts of the particular case,
[15]
one of which would be the
relationship between the purpose for the deprivation and the person whose
property has been affected.
[16]
Â
In my view, the test established by
First National Bank
is one of
“sufficient reason” in each case which must be determined in the light of all
the facts of the case.  I turn now
to consider first the extent of the
deprivation caused by section 118(1) and then to evaluate that deprivation in
the light of
the purpose of section 118(1).
The extent of the deprivation
[95]
In this case, section 118(1) provides that a
registrar of deeds may not transfer immovable property unless he or she has
received
a certificate from the relevant municipality stating that all rates
and service charges incurred in respect of that property for
the two years prior
to the issue of the certificate have been paid.  If that certificate is not
forthcoming, the immovable property
may not be transferred.  An owner who
wishes to alienate the property will not be able to do so unless the necessary
certificate
is acquired.
[96]
Payments made to a municipality, however, may be
allocated to old debt rather than to current charges.  If payments made to meet

current charges are in fact allocated to old debts, current charges will remain
unpaid and the limitation on the right to transfer
may last longer than two
years.  Whether an owner may stipulate the purpose for which payments are made
and require a municipality
to reflect the payments against current debts may
depend on the terms of the service contract between the consumer and the
municipality
and on other legislation.  It is not an issue we can determine in
this case.  We must accept therefore that the period for which
the limitation
may last may be longer than two years and will depend on the circumstances of
each case.
[97]
An important factor relevant to determining the
extent of the limitation on the property right in any particular case will be
the
extent of indebtedness.  Ordinarily, a municipality should require
consumption charges to be paid, and legislation affords municipalities
a range
of tools to ensure that charges are paid.
[17]
Â
However, as the facts of several of the cases before us illustrate,
municipalities have permitted consumption charges to accumulate
to inordinate
amounts.  So, for example, Ms Mkontwana
[18]
who has purchased a home for R24 560 was initially informed that an amount of
R10 728,08 needed to be paid in order for a certificate
to be issued.  This
amount was revised on several occasions by the Council and she was finally
informed that an amount of R2 504,61
needed to be paid.  When Mr Bissett and Mrs
van der Straeten
[19]
sought to transfer their property in East London, having sold it for R110 000,
they were informed that an amount of R14 479,06
needed to be paid before a
certificate could be issued.  Treknet CC
[20]
sold a property for R3,7 million and then found that R137 355,64 needed to be
paid before a section 118(1) certificate could be
issued.  In each of these
cases, the amount of indebtedness construed in the context of the value of the
property concerned was
significant.
[98]
Where no adequate security exists to meet the
outstanding consumption charges, the effect of section 118(1) is that an owner
who
wishes to transfer property to a purchaser will have either to pay the
charges owing or suspend transfer for a period of two years
and install a new
tenant or occupier in the property who must pay all consumption charges.  In
practice, the greater the amount
of consumption charges owing, the greater the
potential deprivation of the rights of an owner.  Where only a trivial amount
of
money is owing, an owner would be able to pay the outstanding amounts and
obtain transfer.  If the amounts owing are trivial, particularly
when viewed in
the light of the market value of the property, the infringement of the owner’s
enjoyment of the property will
not be oppressive.  However, where the amounts
owing are substantial, the effect may be a material limitation on the owner’s

rights.
[99]
In the High Court, Kroon and Leach JJ concluded
that section 118(1) infringed section 25(1).
[21]
Â
A key reason for this conclusion was the fact that section 118(1) operated even
where the consumer of the relevant municipal
services was not the owner of the
property concerned.  The High Court mentioned tenants, persons exercising
rights of habitatio,
usufructuaries, fiduciaries who hold the property subject
to a fideicommissum, squatters and mala fide occupiers and concluded that
there
was no necessary relationship between these classes of consumer of municipal
services and the owner, nor did the owner necessarily
benefit from the
consumption of service charges by these classes of occupier.
[22]
  I shall return to this
reasoning later.  However, what needs to be noted in the context of determining
the scope of the deprivation
is that owners are in a position to minimise the
deprivation in relation to all these classes of occupier.
[100]
First, in relation to tenants, landowners can limit the potential
effect of section 118(1) in several ways through the contractual
arrangements
they reach with tenants.  They could include a provision within the lease
agreement in terms of which tenants must
pay consumption charges, and keep
landowners informed of such payments.  In this case, most of the lease
agreements in question
did contain provisions requiring tenants to pay
municipal service charges, though none of these agreements expressly stipulated

that tenants should keep lessors informed of these payments.  Alternatively,
the same effect could be achieved by drafting the
lease agreement in such a
manner that lessors pay consumption charges and those charges must then be paid
to lessors by tenants.
[101]
Landowners can also reduce their risk in relation to the consumption
of services by tenants and other occupiers (including usufructuaries,
and
unlawful tenants) by requesting municipalities to furnish them with regular
statements of account.  Although some of the municipalities,
in written
argument, suggested that they would not be obliged to furnish such written
statements to landowners, this argument was
expressly abandoned in oral
argument before the Court.  I agree with Yacoob J that municipalities would be
obliged to furnish
landowners with statements of account in relation to consumption
charges due in respect of their properties.
[23]
Â
By keeping a close eye on the extent of the outstanding service charges, owners
can take timely steps to ensure that indebtedness
does not get out of hand.  In
relation to unlawful occupiers, they can take steps to evict the unlawful
occupier and put municipalities
on notice that the occupiers are unlawful.
[102]
A further method whereby landowners could restrict the effect of
section 118(1) would be to install pre-paid electricity meters on
the property
and require occupiers, which would include not only tenants, but
usufructuaries, and also other occupiers, only to
consume electricity on a pre-paid
basis.
[24]
Â
Should owners do so, the possibility of incurring significant consumer charges
in relation to electricity would be avoided.  It
is clear therefore that there
are various steps which landowners may take to limit the risk of the limitation
of their right to
transfer their property.
[103]
Nevertheless, despite the fact that there are steps that may be
taken by responsible landowners to minimise the risk of harm, it
must be
concluded that section 118(1) has the potential to constitute a significant
deprivation of the rights of an owner of property.Â
The fact that it is
possible for this risk to be reduced by responsible action on the part of the
landowner reduces the scope of
the deprivation, but does not eliminate it.
The purpose of the deprivation
[104]
I turn now to consider the purpose of the deprivation.  It is clear
from its provisions that the purpose of section 118(1) is to
encourage the
payment of municipal rates and service charges.  It achieves this purpose by
limiting the rights of owners to transfer
property in circumstances where there
are outstanding debts incurred in connection with that property.  This
limitation, in turn,
has the purpose of encouraging responsible owners to take
steps to ensure that substantial municipal debts are not incurred by occupiers

of their property.
[105]
This purpose needs to be understood in the light of the
constitutional role of municipalities under our new constitutional order,
a
role of great importance.  Section 152 of the Constitution provides that:
“(1)      The objects of local government
are—
(a)        to provide democratic and
accountable government for local communities;
(b)        to ensure the provision of
services to communities in a sustainable manner;
            (c)        to promote social
and economic development;
            (d)        to promote a safe
and healthy environment; and
(e)        to encourage the involvement
of communities and community organisations in the matters of local government.
(2)        A municipality must strive, within its financial and
administrative capacity, to achieve the objects set out in
subsection (1).”
Local government thus bears the
important responsibility of providing services in a sustainable manner to their
communities.  This
task is particularly important given the deep divisions in
our towns, the scars of spatial apartheid which still exist and the fact
that
many poor communities are still without access to basic facilities such as
water, adequate sewerage systems, refuse collection,
electricity and paved
roads.  The ability of local government to carry out its constitutional mandate
depends on its financial
stability.
[106]
It is clear from the record before us that expanding municipal debt
is a significant nation-wide problem.  According to one of the
deponents, the
current national debt in respect of municipal fees for electricity, water,
refuse and sewerage charges is estimated
at R22 billion.  The City of
Johannesburg
[25]
has an outstanding debt in respect of assessment rates, electricity, water, refuse
and sewerage charges of R5,9 billion.  Government
at national, provincial and
local levels have taken a variety of steps to address this problem, of which
section 118(1) is an example.
[107]
The problem of the scale of national municipal debt is an important
consideration in evaluating the purpose of section 118(1).Â
I agree with
Kondile J who, when considering the constitutionality of section 118(1) in
Geyser
and Another v Msunduzi Municipality and Others
,
held that:
“Outstanding debts of this magnitude
seriously threaten the continued supply of basic municipal services and
demonstrate a need
for effective security being put in place in respect of such
service.  This is a legitimate and important legislative purpose,
which is
essential for the economic viability and sustainability of municipalities in
the country and in the interest of all the
inhabitants.”
[26]
Kondile J is quite correct that the
operation of municipalities and the performance of their constitutional
obligations will be
severely compromised if they are not financially viable.
[108]
Another aspect of the purpose of section 118(1) is that it will encourage
owners of property to take steps to avoid the accumulation
of substantial debts
for municipal services provided to their properties.  Owners are ordinarily in
a better position than municipalities
to take steps to avoid the accumulation
of such debt in respect of their own properties.  Because municipalities are
required
to provide services to all occupiers who request services, and because
of the sheer number of consumers to whom they provide services,
they may be
less able to take precautionary steps to avoid municipal debt mounting in
individual cases.
[109]
Owners have a variety of steps they can take to limit the potential
for municipal debt in respect of their properties, and therefore
have some
power to limit the potential deprivation of their rights to transfer their
property.  First, owners can select tenants
carefully with an eye to ensuring
that they meet their financial responsibilities.  Second, owners can include
provisions in lease
agreements which will promote the payment of municipal
charges.  Third, owners can install pre-paid electricity meters on their

premises and require occupiers to pay for the use of electricity in advance,
thus obviating municipal debt.  Fourth, owners can
take steps to evict unlawful
occupiers who are consuming municipal services.
[110]
The purpose of section 118(1) is thus an important one which serves
to assist the recovery of local government charges and to promote
the creation
of a culture of payment of charges.
[111]
At the hearing of the matter, those arguing that section 118(1) was
unconstitutional argued that its effect was minimal because the
amount of money
actually recovered as a result of section 118(1) was insignificant in the light
of the quantum of overall service
charges paid.  Although the money actually
paid pursuant to requests for section 118(1) certificates is a possible measure
of
the effectiveness of section 118(1), it does not seem to me to be a reliable
measure of its effectiveness.  Section 118(1) will
have a direct effect of requiring
moneys to be paid in order that transfers of property can be effected.  Moneys
paid pursuant
to section 118(1) will measure this direct effect.  However, more
importantly, section 118(1) will have an indirect effect in terms
of which
moneys will be paid by tenants or occupiers as they become due because
landowners will monitor and require such payments
to avoid the consequences of
section 118(1).  It is far more difficult to measure this indirect effect of
section 118(1) than
its direct effect.  I am not persuaded therefore that
evidence of amounts actually paid pursuant to section 118(1) is a reliable

measure of the actual impact of its provisions.
Is there sufficient reason for the
deprivation?
[112]
It is now necessary to consider whether the purpose of section
118(1) constitutes sufficient reason for the deprivation it occasions.Â
There
can be no doubt that, to the extent that the certificate relates to rates and
to charges for services consumed by the owner,
there is sufficient reason for
the deprivation of the property right.  In such circumstances, section 118(1)
merely constitutes
a form of security for charges incurred by owner occupiers.
[113]
The key question argued in this case is whether section 118(1) is
arbitrary in that it deprives owners of the right to alienate property
where
tenants have consumed municipal services but have failed to pay consumption
charges.  In considering this, we must bear
in mind that owners are deprived of
only one aspect of their rights in property, and that is the right to alienate
the property;
secondly, that it is not a permanent deprivation, but a
deprivation which is limited in time in that it only relates to charges
for the
two years preceding the certificate; and thirdly, that landowners can regulate
their own relationship with occupiers to
minimise the scope of the deprivation
in a variety of ways.  The deprivation in this case is therefore not extensive
or drastic.Â
On the other hand, the purpose of section 118(1) is an important
one in our current socio-economic context.  It provides a form
of security to
municipalities to recover charges for services actually provided and it
encourages landowners to take steps to regulate
their affairs in a manner which
will induce the payment of service charges by tenants and other occupiers.  I
conclude that in
relation to tenants the provisions of section 118(1) are not
arbitrary within the meaning of section 25(1) of the Constitution.
[114]
I have concluded that there is a sufficient reason for the
deprivation caused by section 118(1) to the extent that the consumption
charges
are incurred by tenants.  The further question that needs consideration is
whether the High Court was correct in concluding
that there was not a sufficient
reason in relation to the other classes of consumer, and in particular
usufructuaries, fiduciaries
and unlawful occupiers.  In my view, the question
to be considered is whether there is a sufficient reason for the deprivation

occasioned by section 25(1).  The question of usufructuaries, fiduciaries and
unlawful occupiers was not thoroughly canvassed
in argument before this Court
but given the reasoning of the High Court, I consider it necessary briefly to
consider the position
of such occupiers.
[115]
In considering these arguments, it is important to bear in mind that
it would be difficult to narrow the scope of section 118(1).Â
Section 118(1) is
a simple procedure which requires that in all cases a registrar of deeds may
not effect the transfer of immovable
property without a certificate from the
municipality confirming that all consumption charges and rates incurred in
respect of that
property in the preceding two years have been paid.  It is
accordingly the municipality that issues the certificate.  It will
not always
be clear to a municipality, from its records, who has actually consumed the
services on that property for the previous
two years, nor will it be clear
whether that person is the owner or a tenant or an unlawful occupier.  Limiting
the terms of the
certificate to consumption charges incurred by only particular
classes of occupier may create substantial difficulties for the efficient

conveyancing of the property, as the municipality may not be in a position to
determine the class of occupier that in fact incurred
the consumption charges.Â
This practical difficulty needs to be borne in mind in determining the
sufficiency of the reason for
the purposes of section 25(1).
[116]
A further consideration to bear in mind is that the purpose and effect
of section 118(1) is to encourage owners to ensure that those
persons who
occupy their property pay the consumption charges they incur.  Were section
118(1) to be more narrowly framed, that
inducement would fall away.  An owner
would no longer seek to ensure that consumption charges were paid in order to
avoid the
consequences of section 118(1).  The municipality would also have no
form of security for the payment of consumption charges and
yet it may have no
knowledge that the security is not available because its records may not
disclose that fact.
[117]
The first category of occupier to consider is unlawful occupiers,
which includes two separate classes of occupier – those who originally
had
permission to occupy, but either because of the termination of the lease or
withdrawal of consent by the owner, no longer have
permission to occupy, as
well as the class of unlawful occupiers who have never had permission to occupy
the property.  In relation
to the first class of occupier, those whose
permission to occupy has been withdrawn, as the owner gave permission to the
occupiers
to be there initially, the owner had a direct connection with the
unlawful occupiers.  Moreover, the owner will be aware of the
identity of the
occupier and of the fact that the person is now occupying the property without
permission and will be able to take
steps to evict the occupier.  In my view,
given the important purpose of the provision, the difficulty of framing it more
narrowly
and the fact that owners will be in a position to take steps to limit
the potential deprivation under the section, section 118(1)
is not an arbitrary
deprivation of the owner’s property in relation to this class of occupier.
[118]
The circumstances are somewhat different in relation to unlawful
occupiers of property who have occupied the property without the
consent of the
owner.  In that case, the owner will not have selected or permitted the
occupier to move into the property at any
stage.  Nevertheless in such
circumstances, it is only the owner that can take the necessary steps to
prevent the unlawful occupation
of his or her premises before it happens.  A
municipality has no power to do so.  An owner may also immediately take steps
to
evict the unlawful occupiers.  A municipality has more limited rights of
eviction.
[27]
Â
Moreover, a municipality cannot know that the occupation is unlawful unless it
is informed by the owner.  These considerations
might not have been sufficient
reason were it not for the difficulty of achieving a narrower scope for section
118(1) without losing
its overall effectiveness and purpose.  The value of
section 118(1) lies in its simplicity and straightforward application.  Those

qualities would be substantially impaired were the certificate not to be
required where the charges had been incurred by unlawful
occupiers.  Such a
situation might lead to significant disputes of fact which would be
counter-productive.  I conclude then that
section 118(1) does not constitute an
arbitrary deprivation in relation to the consumption charges incurred by
unlawful occupiers.
[119]
I turn now to consider the question of usufructuaries.  Occupiers of
this sort enjoy a limited real right to the occupation of the
property but the
right of ownership vests in another person who will obtain (or recover) the
right of occupation upon the termination
of the usufruct.  The effect of a
usufruct on the property also reduces the rights of ownership of the owner who
has no rights
of occupation or use during the period of the usufruct.Â
Moreover, the rights of an owner to alienate the property are diminished.Â
The
bare ownership of the property may not be transferred without the consent of
the usufructuary.
[28]
[120]
In considering the deprivation of property caused by section 118(1)
to the rights of an owner of property over which there is a usufruct,
one must
take into account the fact that the rights of such owners to alienate the
property are already diminished as the property
may not be alienated without
the permission of the usufructuary.  One should also take into account the fact
that a usufructuary
has an obligation to restore the property and may not
consume it, destroy it, or impair its value and the fact that an owner may

require a usufructuary to provide him or her with security that the property
will be restored in proper condition.  Given that
the accumulation of
substantial municipal debt will effectively limit the rights of the owner, it
may well be that an owner would
be entitled to seek security to avoid this
risk. In the circumstances, I am satisfied that section 118(1) does not
constitute arbitrary
deprivation of property in relation to this class of
occupier either.
[121]
Persons who occupy under a right of habitatio, are not in an
identical situation to usufructuaries.
[29]
Â
Nevertheless, habitation constitutes a personal servitude which, if registered,
[30]
limits the real rights of the
owner.  Given the limited rights of the owner, the scope of the deprivation
occasioned by section
118(1), as in the case of usufruct, is less significant
because the owner’s real rights are already diminished by the personal

servitude.  Moreover, the owner of the property is still entitled to take steps
to minimise the accumulation of debts by requesting
accounts from the Council
and also requiring the use of pre-paid electricity.  In the circumstances, and
given the difficulty
of narrowing the purpose of section 118(1) to cater for
rights of habitatio, I am satisfied that section 118(1) is not arbitrary
in
this respect.
[122]
In relation to fiduciaries within the context of a fideicommissum,
it is not clear to me, nor did we have argument upon it, as to
how the
provisions of section 118(1) would operate.  A fiduciary takes ownership of
property subject to a provision that if a
certain condition is fulfilled the
property will be transferred to a further beneficiary (the fideicommissary).
[31]
  A fiduciary who is residing
on the property and incurring consumption charges will be obliged to pay them.Â
The fideicommissary
is not the owner of the property and will not become the
owner of the property unless the stipulated condition is fulfilled at which

stage the rights of the fiduciary to occupy the property will ordinarily be
terminated.  In the circumstances, it does not seem
to me that section 118(1)
constitutes an arbitrary deprivation of property of either the fiduciary or the
fideicommissary.
[123]
For these reasons, I conclude that section 118(1) does not
constitute “arbitrary deprivation of property” within the meaning
of section
25(1) of the Constitution.  In reaching this conclusion, I have taken note of
the warning sounded by Kroon and Leach
JJ that a court must take care not to
“sacrifice the constitutional rights of landowners on the altar of expediency”.
[32]
  In this case the rights of
owners are not drastically impaired.  One aspect of their right of ownership is
limited with the
purpose and effect of encouraging owners to take steps to
avoid the accumulation of substantial municipal debt in connection with
their
property.  I have no doubt that this is a deprivation of property rights.  The
purpose of the deprivation is important
and legitimate.  The scope of the
deprivation itself may be limited by owners themselves taking reasonable but
not onerous precautions
to prevent the accretion of significant municipal debt
by occupiers of their property.  The very steps that owners take to prevent

such accretion will achieve the legitimate government purpose identified.  In
such circumstances, I do not think it can be said
that the interests of owners
have been “sacrificed on the altar of expediency”.  Rather, owners are required
to act responsibly
in their own interest in a manner which will contribute to
the overall benefit of our community.
[124]
One further comment need be made.  There can be no doubt that
municipalities bear an important constitutional obligation and a statutory

responsibility to take appropriate steps to ensure the efficient recovery of
debt.  The facts of some of the cases before this
Court raise concern as to the
efficiency with which municipalities are carrying out these duties.  It does
not seem to me, however,
that the question of whether municipalities carry out
their constitutional duties with due diligence or not can have any direct

bearing on the question of the constitutionality of section 118(1).  Its
constitutionality must be determined objectively in the
light of its terms and
the provisions of the Constitution.
[33]
Â
Should a municipality not perform its statutory or constitutional obligations
properly, appropriate relief should be sought.
[125]
As I have concluded that section 118(1) is not arbitrary in this
case, it is not necessary to consider the question, left open in
the
First
National Bank
case as to whether a deprivation which is arbitrary may
nevertheless be justified in terms of section 36 of the Constitution.Â
That
question can be left for another day.
[126]
I agree with the reasoning and conclusions of Yacoob J in relation
to the challenges based on sections 9(1), 26 and 34 of the Constitution.Â
For
these reasons I concur in the order proposed by Yacoob J.
Mokgoro J concurs in the judgment
of O’Regan J.
SACHS J
[127]
I concur in the judgment of Yacoob J.  The judgment of O’Regan J
applies the same basic test for arbitrariness, namely, viewed
in its specific
context is there sufficient reason for the particular deprivation in question?Â
The one difference of note is
that in applying the test, Yacoob J places
special emphasis on the fact that there is sufficient connection between the
deprivation
and ownership not to make it arbitrary.  O’Regan J, on the other
hand, looks at the matter more broadly.  Evaluating the relationship
between
the means employed, namely, the deprivation in question, and the ends sought to
be achieved, namely, the purpose of the
law being examined, she finds that the
deprivation is not arbitrary.  In my view, the latter approach subsumes the
former.  It
does so in a conceptually helpful manner, and facilitates the
context-specific balancing that the notion of arbitrariness implies.Â
I support
the jurisprudential gloss it adds to the judgment of Yacoob J, and concur in it
as well.
Mkontwana CCT 57/03
For the applicant:                                          A
Beyleveld and R B Laher
instructed by Watson & Tucker.
For the first respondent:                               R G Buchanan
SC instructed by McWilliams &
Elliot.
For the second and third respondents:        R G Buchanan SC and V
Notshe instructed by the State Attorney, Port Elizabeth.
For the first amicus curiae:                          A J Dickson SC
and A A Gabriel instructed by Ganie
& Co.
For the second amicus curiae:                     P A Koen SC
instructed by Bhamjee Attorneys.
Bissett CCT 61/03
For the first to third applicants:                   J T Whitehead
SC and T J M Paterson instructed by Bate Chubb
& Dickson Inc.
For the first respondent:                               R P Quinn SC
and H J de Waal instructed by
Smith Tabata Inc.
For the second and third respondents:        R G Buchanan SC and V
Notshe instructed by the State Attorney, Port Elizabeth.
Transfer Rights Action Campaign CCT
01/04
(Parties are described as represented in
the application before the WLD.)
For the first to fourth applicants:                P Kennedy SC and A
Dodson instructed by Robert J Martindale Attorneys.
For the first and second respondents          G Marcus SC and A
Cockrell instructed
and the seventh and eighth respondents:     by Moodie &
Robertson Attorneys.
For the third and fourth respondents:          D Unterhalter SC and G
G Seleka instructed by the State Attorney, Johannesburg.
[1]
Section 152(1)(b).
[2]
Act 32 of 2000.
[3]
The section is set out in full in para 27(a) of the judgment.Â
Insertions indicate applicants’ preferred interpretation.
[4]
Subsection (1A) provides that the certificate is valid for 120
days.
[5]
Nokuthula Phyllis Mkontwana v Nelson Mandela Municipality and
Others
(SECLD)
Case No
1238/02 and
Peter William Bissett
and Others v Buffalo City Municipality and Others
(SECLD) Case No 903/2002,
13 September 2003, as yet unreported.
[6]
Id, Nokuthula Phyllis Mkontwana in the
Mkontwana
case, and
Peter William Bissett, Anna Marie Elza van der Straeten and NEDCOR Bank Ltd in
the
Bissett
case.
[7]
Nelson Mandela Metropolitan Municipality in the
Mkontwana
case and Buffalo City Municipality in the
Bissett
case.
[8]
All this happened during October 2003.
[9]
Transfer Rights Action Campaign, TREKNET Properties CC, Marion
Cameron NO and Dianna Jennifer Parnell.
[10]
City of Johannesburg Metropolitan Municipality, Ekurhuleni
Metropolitan Municipality, Member of the Executive Council for Local
Government
and Housing in the Province of Gauteng, Minister for Provincial and Local
Government, Minister of Justice and Constitutional
Development, The South
African Local Government Association and The Registrar of Deeds, Johannesburg.
[11]
Johannesburg Water (Pty) Ltd.
[12]
City Power (Pty) Ltd.
[13]
No 17 of 1939, which is also applicable in the provinces of
Mpumulanga, Limpopo and North West.
[14]
Section 49(1) and (2) provide:
“(1) All moneys due for sanitary
services, all moneys due as basic charges for water made in terms of section
81(1), all other
moneys due for water where any water closet system on such
premises has been installed, and all moneys due as basic charges for

electricity made in terms of section 83(1), shall be recoverable from the owner
and occupier jointly and severally of the premises
in respect of which the
services were rendered; provided that the owner shall in the absence of any
agreement to the contrary,
be entitled to recover from the occupier of the said
premises for the time being any such charges paid by him in respect of the

occupation of such occupier.
(2) If any charges due in respect of
any premises for sanitary services, or if basic charges due for water made in
terms of section
81(1), or if other charges due in respect of any premises for
water where any water closet system on such premises has been installed,
or if
basic charges due for electricity made in terms of section 83(1), shall remain unpaid
for a period of six weeks after the
date on which written notice shall have
been given by the council to the owner or occupier of his indebtedness, the
council may
proceed jointly and severally against the owner and occupier for
the time being of such premises for the amount of such charges
or any part
thereof, and may recover the same from such owner or occupier; provided that
every such occupier shall be entitled
to deduct from any rent or other amount
payable by him to the owner of the premises any portion of such charges paid by
or recovered
from him under this sub-section which the owner could not lawfully
have required him to pay and the production of the receipts for
such portion of
such charges so paid or recovered from such occupier shall be a good and
sufficient discharge for the amount so
paid or recovered as payment of rent or
other amount.”
[15]
Quoted in full in para 27(b).  Insertions indicate applicants’
preferred interpretation.
[16]
Standard Water Supply By-laws published in Administrator’s Notice
21 of 5 January 1977.
[17]
Greater Johannesburg Metropolitan Council’s Electricity By-laws
published in the Provincial Gazette No 16 of 17 March 1999.
[18]
Section 4(2) of the water by-laws provides: “The owner and
consumer shall be jointly and severally liable for compliance with every

financial obligation and other requirement imposed upon either of them in terms
of these by-laws.”
[19]
Section 36 of the electricity by-laws provides that: “The owner
and the consumer shall be jointly and severally liable for compliance
with any
financial obligation or other requirement imposed upon them by these by-laws.”
[20]
Except for the MEC for Local Government and Housing in the Province
of Gauteng, The Minister for Provincial and Local Government,
Minister of
Justice and Constitutional Development, The South African Local Government
Association and the Registrar of Deeds,
Johannesburg.
[21]
The application for confirmation and appeal had by this stage been
set down for hearing.
[22]
Geyser and Another v Msunduzi Municipality and Others
2003
(5) SA 18 (N); 2003 (3) BCLR 235 (N).
[23]
Rule 18(2)(a).
[24]
Bruce and Another v Fleecytex Johannesburg CC and Others
[1998] ZACC 3
;
1998 (2) SA 1143
(CC);
1998 (4) BCLR 415
(CC) para 8;
S v
Dlamini; S v Dladla and Others; S v Joubert; S v Schietekat
[1999] ZACC 8
;
1999 (4) SA 623
(CC);
1999 (7) BCLR 771
(CC) para 35;
Moseneke and Others v The Master and Another
[2000] ZACC 27
;
2001 (2) SA 18
(CC);
2001 (2) BCLR 103
(CC) para 19.
[25]
Brink v Kitshoff NO
[1996] ZACC 9
;
1996 (4) SA 197
(CC);
1996 (6) BCLR 752
(CC) para 14;
Transvaal Agricultural Union v Minister of Land Affairs and
Another
[1996] ZACC 22
;
1997 (2) SA 621
(CC);
1996 (12) BCLR 1573
(CC) para 18;
Bruce
and Another v Fleecytex
above n 24;
Member of the Executive Council for
Development Planning and Local Government, Gauteng v Democratic Party and
Others
1998 (4) SA 1157
(CC); 1998 (7) BCLR (CC) 855 para 32;
Christian
Education South Africa v The Minister of Education
1999 (2) SA 83
(CC);
1998 (12) BCLR 1449
(CC) para 12;
Van Der Spuy v General Council of the Bar
of South Africa (Minister of Justice and Constitutional Development, Advocates
for Transformation
and Law Society of South Africa Intervening)
[2002] ZACC 17
;
2002 (5) SA
392
(CC) para 19;
2002 (10) BCLR 1092
(CC) para 18;
National Gambling Board
v Premier, KwaZulu-Natal, and Others
[2001] ZACC 8
;
2002 (2) SA 715
(CC);
2002 (2) BCLR
156
(CC) paras 29 and 38;
Satchwell v President of the Republic of South
Africa and Another
[2003] ZACC 2
;
2003 (4) SA 266
(CC);
2004 (1) BCLR 1
(CC) para 6.
[26]
S v Makwanyane and Another
[1995] ZACC 3
;
1995 (3) SA 391
(CC);
1995 (6)
BCLR 665
(CC) paras 4 and 6;
Dlamini
above n 24;
Moseneke
above n
24;
Minister of Home Affairs v National Institute for Crime Prevention and
the Re-integration of Offenders (NICRO) and Others
[2004] ZACC 10
;
2004 (5) BCLR 445
(CC)
paras 7-8.
[27]
The respondents in the confirmation application also appeal against
the order.
[28]
The KwaZulu-Natal Law Society.
[29]
The Msunduzi Municipality.
[30]
It was repealed by the
Local Government Laws Amendment Act 51 of
2002
on 5 December 2002.  The application was launched on 19 December 2002.
[31]
President, Ordinary Court Martial, and Others v Freedom of Expression
Institute and Others
[1999] ZACC 10
;
1999 (4) SA 682
(CC);
1999 (11) BCLR 1219
(CC) para
8.  See also
JT Publishing (Pty) Ltd and Another v Minister of Safety and
Security and Others
[1996] ZACC 23
;
1997 (3) SA 514
(CC);
1996 (12) BCLR 1599
(CC) para 15;
National Coalition for Gay and Lesbian Equality and Others v Minister of
Home Affairs and Others
[1999] ZACC 17
;
2000 (2) SA 1
(CC);
2000 (1) BCLR 39
(CC) n 18;
Independent
Electoral Commission v Langeberg Municipality
[2001] ZACC 23
;
2001 (3) SA 925
(CC);
2001
(9) BCLR 883
(CC) para 9;
Khosa and Others v Minister of Social Development
and Others; Mahlaule and Another v Minister of Social Development and Others
[2004] ZACC 11
;
2004
(6) BCLR 569
(CC) para 92.
[32]
Bernstein and Others v Bester and Others NNO
[1996] ZACC 2
;
1996 (2) SA 751
(CC);
1996 (4) BCLR 449
(CC) para 59 and the authorities referred to in n 87
thereof;
Nel v Le Roux NO and Others
[1996] ZACC 6
;
1996 (3) SA 562
(CC);
1996 (4) BCLR
592
(CC) para 18;
De Lange v Smuts
NO
and Others
[1998] ZACC 6
;
1998 (3)
SA 785
(CC);
1998 (7) BCLR 779
(CC) para 85;
Investigating Directorate:
Serious Economic Offences and Others v
Hyundai Motor Distributors (Pty)
Ltd and Others: In re Hyundai Motor Distributors (Pty) Ltd and Others v Smit NO
and Others
[2000] ZACC 12
;
2001 (1) SA 545
(CC);
2000 (10) BCLR 1079
(CC) paras 22-26
;
De Beer NO v North-Central Local Council and
South-Central Local Council and Others (Umhlatuzana Civic Association Intervening)
[2001] ZACC 9
;
2002 (1) SA 429
(CC);
2001 (11) BCLR 1109
(CC) paras 24.
[33]
First National Bank
of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and
Another; First National Bank of SA Ltd
t/a Wesbank v Minister of Finance
2002 (4) SA 768 (CC);
2002 (7) BCLR 702 (CC).
[34]
Id para 57.
[35]
Above n 5 para 44.
[36]
Above n 22 at
2003 (5) SA 18
(N) at 37C-D;
2003 (3) BCLR 235
(N) at
250B-C.
[37]
FNB
above n 33
paras 61-99.
[38]
Id para 100.
[39]
Id para 100(a).
[40]
Id paras 100(b), (c) and (d).
[41]
Id para 108(a) and (b).
[42]
Id paras 100(d), (e), (f) and (g).
[43]
Above n 5 para 50(a).
[44]
Id para 50(b).
[45]
Id para 50(c).
[46]
Id para 50(d).
[47]
Id para 51.
[48]
Id paras 34, 58 and 64
.
[49]
Section 27(1)(b) of the Constitution provides:
“Everyone has the right to have
access to—
                . . .
sufficient food and water”.
The relevant parts of section 152 of
the Constitution provide:
“(1)         “The objects of local
government are—
                                (a)           .
. .
(b)           to ensure the provision of services to communities in
a sustainable manner;
                                (c)           to
promote social and economic development;
                                (d)           to
promote a safe and healthy environment;
. . .
(2)           A municipality must
strive, within its financial and administrative capacity, to achieve the
objects set
out in subsection (1).”
Section 153 of the Constitution
provides:
“A municipality must—
(a)           structure and manage
its administration and budgeting and planning processes to give priority to the
basic
needs of the community, and to promote the social and economic
development of the community; and . . . .”
Section 73(1)
of the
Local
Government: Municipal Systems Act 32 of 2000
provides:
“(1) A municipality must give effect
to the provisions of the Constitution and— Â
(a)           give priority to the
basic needs of the local community;
(b)           promote the development
of the local community; and
(c)           ensure that all members of the local community have
access to at least the minimum level of basic municipal
services.”
[50]
Above n 5 para 50(a).
[51]
Id para 50(d).
[52]
Above para 38.
[53]
See above n 50.
[54]
Corbett, Hofmeyr, Kahn
The Law of Succession in South Africa
2 ed (Juta Law, Lansdowne 2001) at 366.
[55]
Id at 260.
[56]
Id at 297 and 380.
[57]
Id at 300 and 381.
[58]
Above n 38.
[59]
Premier, Mpumalanga, and Another v Executive Committee,
Association of State-Aided Schools, Eastern Transvaal
[1998] ZACC 20
;
1999 (2) SA 91
(CC);
1999 (2) BCLR 151
(CC) para 39;
President of the Republic of South Africa
and Others v South African Rugby Football Union and Others
2000 (1) SA 1
(CC);
1999 (10) BCLR 1059
para 216;
Janse Van Rensburg NO and Another v
Minister of Trade and Industry and Another NNO
2001 (1) SA 29
(CC);
2000
(11) BCLR 1235
(CC) para 24;
Permanent Secretary, Department of Education
and Welfare, Eastern Cape, and Another v ED-U-College (PE) (Section 21) Inc
[2000] ZACC 23
;
2001 (2) SA 1
(CC);
2001 (2) BCLR 118
(CC) para 19;
Minister of Public Works
and Others v Kyalami Ridge Environmental Association
and Another
(Mukhwevho
Intervening)
[2001] ZACC 19
;
2001 (3) SA 1151
(CC);
2001 (7) BCLR 652
(CC) para 101.
[60]
Section 26 provides:
“(1) Everyone has the right to have access to adequate
housing.
(2) The state must take reasonable legislative and
other measures, within its available resources, to achieve the progressive
realisation
of this right.
(3) No one may be evicted from their home, or have
their home demolished, without an order of court made after considering all the

relevant circumstances.  No legislation may permit arbitrary evictions.”
[61]
The section
provides:
“Everyone has the right to have any dispute that can
be resolved by the application of law decided in a fair public hearing before
a
court or, where appropriate, another independent and impartial tribunal or
forum.”
[62]
Chief Lesapo v North West Agricultural Bank and Another
[1999] ZACC 16
;
2000
(1) SA 409
(CC);
1999 (12) BCLR 1420
(CC) para 20.
[63]
There is no issue between national and provincial
governments about which law prevails and this judgment must therefore be
understood
as not being concerned with that issue.
[1]
Section 50(1)(a) of the Gauteng Local Government Ordinance, 17 of
1939, which has now been repealed is in similar terms to section
118(1), save
for providing for a period of three years rather than two years.  Its terms are
as follows:
“(1) No
transfer of any land or of any right in land as defined in section 1 of the
Local Authorities Rating Ordinance, 1977,
within a municipality shall be
registered before any registration officer until a written statement in the
form set out in the
Third Schedule to this Ordinance and signed and certified
by the town clerk or other officer authorised thereto by the council,
shall be
produced to such registration officer, and unless such statement shows—
(a)           that all amounts for a period of three years
immediately preceding the date of such registration due in respect
of such land
or right in land for sanitary services or so due as basic charges for water or
as other costs for water where any
water-closet system on the ground concerned
has been installed or so due as basic charges for electricity in terms of the
provisions
of this Ordinance or any by-law or regulation . . . have been paid
to the council.”
[2]
2002 (4) SA 768 (CC); 2002 (7) BCLR 702 (CC).
[3]
See, for example,
sections 24 (in regard to the environment), 26 (housing), 27 (health care,
food, water and social security) and
29 (education).
[4]
The original reference is to Van der Walt
The Constitutional
Property Clause: A Comparative Analysis of Section 25 of the South African
Constitution of 1996
(Juta, 1997) at 15-16.
[5]
Above n 2 at para 50.
[6]
  See, for example, the comments of Mahomed J in
S v Makwanyane
and Another
[1995] ZACC 3
;
1995 (3) SA 391
(CC);
1995 (6) BCLR 665
(CC) at para 262;
Chaskalson P in
Soobramoney v Minister of Health, KwaZulu-Natal
[1997] ZACC 17
;
1998 (1)
SA 765
(CC);
1997 (12) BCLR 1696
(CC) at para 8; Chaskalson CJ in
Van Rooyen
and Others v The State and Others (General Council of the Bar of South Africa
Intervening)
[2002] ZACC 8
;
2002 (5) SA 246
(CC);
2002 (8) BCLR 810
(CC) at para 50;
Ngcobo J in
Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs
and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) at para 73 and
Moseneke J in
Minister of Finance and Another v Van Heerden
CCT 63/03,
29 July 2004, as yet unreported at paras 22-23.
[7]
Above n 2.
[8]
Section 118(1) is a provision in an Act of Parliament which governs
all municipalities in South Africa.  It is clearly a law of
general application
as contemplated by section 36 of the Constitution.
[9]
Above n 2.
[10]
Id at para 57.
[11]
Above n 2.
[12]
Id at para 100.
[13]
Id at para 100(f).
[14]
Id at para 100(d) and (e). Para 100(e) states that “where the
property in question is ownership of land or a corporeal movable,
a more
compelling purpose will have to be established”.
[15]
Id at para 100(b) and (h).
[16]
Id at para 100(c).
[17]
Chapter 9 of the
Local Government: Municipal Systems Act, 32 of
2000
provides the mechanisms which a municipality may use to recover debt.
[18]
The applicant in
Mkontwana v Nelson Mandela Metropolitan
Municipality and Others,
the first of the three applications being
considered together in this matter.
[19]
The first and second applicants respectively in
Bissett and
Others v Buffalo City Municipality and Others
, the second of the three
applications in this matter.
[20]
The second applicant in
Transfer Rights Action Campaign and
Others v City of Johannesburg Metropolitan Municipality and Others
, the
third application under consideration.
[21]
Nokuthula Phyllis Mkontwana v Nelson Mandela Municipality and
Others
(SECLD) Case No 1238/02 and
Peter William Bissett
and Others v Buffalo City Municipality and Others
(SECLD) Case No 903/2002,
13 September 2003, as yet unreported.
[22]
Id at para 50.
[23]
See para 66 of the judgment of Yacoob J.
[24]
The question of whether pre-paid meters for water are available is
not an issue resolved on the papers before us.
[25]
The fifth applicant in
Transfer Rights Action Campaign and
Others v MEC for Local Government and Housing, Gauteng and Others.
[26]
2003 (5) SA 18
(N) at 37H-I;
2003 (3) BCLR 235
(N) at 250 G-H.
[27]
See
section 6(1)(a)
and (b) of the Prevention of Illegal Eviction
from and Unlawful Occupation of Land Act, 19 of 1998 which requires
municipalities
who seek eviction to show that buildings have been erected on
the land without their necessary permission or that the eviction would

otherwise be in the “public interest”.  The question of whether these
requirements were disjunctive or conjunctive was left
open in the decision of
this Court in
Port Elizabeth Municipality v Various Occupiers
CCT 53/03,
1 October 2004, as yet unreported.  See also the discussion of the provisions
of that Act in the judgment.
[28]
See
LAWSA
volume 24 at paras 422ff.
[29]
Id at para 446.  See also Van der Merwe
Sakereg
2 ed
(Butterworths, 1989) at 524.
[30]
Felix en ‘n Ander v Nortier
NO en Andere (1)
1994 (4) SA 498
(SE) at 500.
[31]
See Corbett, Hahlo and Hofmeyr
The Law of Succession
2 ed
(Juta Law, 2001) at 257ff;
LAWSA
volume 31 at paras 319ff.
[32]
Above n 21 at para 53.
[33]
Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO
and Others
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) at paras 26-28;
National
Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs
and Others
[1999] ZACC 17
;
2000 (2) SA 1
(CC);
2000 (1) BCLR 39
(CC) at para 29;
De
Reuck v Director of Public Prosecutions, Witwatersrand Local Division, and Othesr
[2003] ZACC 19
;
2004 (1) SA 406
(CC);
2003 (12) BCLR 1333
(CC) at para 85.  See also
Bernstein and Others v Bester and Others NNO
[1996] ZACC 2
;
1996 (2) SA 751
(CC);
1996
(4) BCLR 449
(CC) at para 52.