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FILING SHEET FOR BISHO HIGH COURT
JUDGMENT
PARTIES
THE MAYOR OF THE MNQUMA LOCAL MUNICIPALITY: MR WEBSTER
MBASA MTONGANA
First Applicant
vs
MNQUMA LOCAL MUNICIPALITY
2nd Applicant
And
THE PREMIER OF THE EASTERN CAPE 1 st
Respondent
THE MEC FOR LOCAL GOVERNMENT AND
TRADITIONAL AFFAIRS
2nd Respondent
THE EXECUTIVE COUNCIL OF THE
EASTERN CAPE PROVINCE
3rd Respondent
Case Number: 90/2009
High Court: Bisho
DATE HEARD: 16 February 2009
JUDGMENT DELIVERED: 17 February 2009
REASONS HANDED DOWN ON: 26 February 2009
ACTING JUDGE : L D KEMP
LEGAL REPRESENTATIVES-
Appearances:
Counsels for the Applicant : Adv J Heunis SC
Adv J Hobbs
Page 2
Attorneys for the Applicant: Smith Tabata Incorporated
King Williams Town
Counsel for the Respondent : Adv Sishuba
Attorneys for the Respondent: The State Attorneys
King
Williams Town
CASE INFORMATION
Nature of proceedings: Application for an interim order.
Topic: Interim order granted.
Key Words:
Page 3
IN THE HIGH COURT OF SOUTH AFRICA
(BISHO)
CASE NO: 90/2009
In the matter between:
THE MAYOR OF THE MNQUMA FIRST APPLICANT
LOCAL MUNICIPALITY: MR
WEBSTER MBASA NTONGANA
MNQUMA LOCAL MUNICIPAL SECOND APPLICANT
COUNCIL
and
THE PREMIER OF THE EASTERN FIRST RESPONDENT
CAPE
THE MEC FOR LOCAL SECOND RESPONDENT
GOVERNMENT AND
TRADITIONAL AFFAIRS
THE EXECUTIVE COUNCIL OF THIRD RESPONDENT
THE EASTERN CAPE PROVINCE
JUDGEMENT
KEMP AJ
[A] Introduction
[1] In terms of section 139(1)(c) of the Constitution 1 , a Provincial
Executive Council may dissolve a municipality and appoint an
administrator. The Applicants in this matter sought an interim
order which would have the effect of suspending such a decision
1
Constitution Of The Republic Of South Africa, 1996
Page 4
to dissolve the Municipal Council of the Mnquma Local
Municipality and appoint an administrator, pending the return
date. For reasons that will become apparent hereunder it is not
clear whether it was the 3rd Respondent who actually took the
impugned decision or the 2nd Respondent who purported to do
so. I shall refer to the 1st and 2nd Applicants as “the Mayor” and
“the Council”, respectively, and to the 2nd and 3rd Respondents
as the MEC and the Executive Council, respectively.
[2] Extremely short notice of the Application was given to the
Respondents and although the matter was opposed, the
Respondents had not had an opportunity to file opposing papers
when I heard the matter. After hearing argument on the 16 th
February 2009, I reserved judgment and handed down an order
granting the relief prayed for on the following day, indicating that
my reasons would follow. These are those reasons.
[3] A letter signed by the MEC advising the Mayor of the decision to
dissolve the municipality was dated the 12th February 2009 and
was served on him at around midnight on the same day. The
present application was then drafted on the afternoon and early
evening of the next day, and although dispatched to the
Respondents legal representative by way of facsimile
transmission, it appears that it only came to their attention on
the morning of the hearing which was Monday the 16 th
February. Mr Sishuba, for the Respondents, had not had time to
read the papers, let alone take instructions and the matter
accordingly stood down for an hour or so to enable him to at
least read the papers. It appears that a letter indicating their
intention to bring the application was served on a staff member
Page 5
of the 2nd Respondent on the 13th February at 14:35. It is not
clear from the return of service who the notice was given to, with
the rather cryptic description:
“LG (OBO MEC), a person older than 16 years of age…” appearing on it.
[4] At the commencement of the hearing Mr Sishuba raised four
points in limine. The first being that the Applicants had no locus
standi to bring the application; secondly, that there was non
compliance with the provisions of section 35 of the General Law
Amendment Act 2 which provides for 72 hours notice where
Government Departments are involved; thirdly, that government
departments, or different arms of government, should only resort
to litigation as a last resort; 3 and fourthly, that the National
Council of Provinces (NCOP) should have been joined as a
respondent.
[B] The Legislative Background
[5] Section 139 (1) (c) of the Constitution provides as follows:
“When a municipality cannot or does not fulfil an executive obligation in terms of the
2
Act 62 of 1955, the full text of which follows:
“Notwithstanding anything to the contrary contained in any law, no court shall issue any rule
nisi operating as an interim interdict against the Government of the Union including the South
African Railways and Harbours Administration or the Administration of any Province, or any
Minister, Premier or other officer of the said Government or Administration in his capacity as such,
unless notice of the intention to apply for such a rule, accompanied by copies of the petition and of
the affidavits which are intended to be used in support of the application, was served upon the said
Government, Administration, Minister, Premier or officer at least seventy-two hours, or such lesser
period as the court may in all the circumstances of the case consider reasonable, before the time
mentioned in the notice for the hearing of the application.” (my emphasis)
3
See section 41, subsections (3) and (4) of the Constitution:
“(3) An organ of state involved in an intergovernmental dispute must make every
reasonable effort to settle the dispute by means of mechanisms and procedures provided for
that purpose, and must exhaust all other remedies before it approaches a court to resolve the
dispute.
(4) If a court is not satisfied that the requirements of subsection (3) have been met, it
may refer a dispute back to the organs of state involved.”
Page 6
Constitution or legislation, the relevant provincial executive may intervene by taking
any appropriate steps to ensure fulfilment of that obligation, including-
(a) issuing a directive to the Municipal Council, describing the extent of the failure
to fulfil its obligations and stating any steps required to meet its obligations;
(b) assuming responsibility for the relevant obligation in that municipality to the
extent necessary to-
(i) maintain essential national standards or meet established minimum
standards for the rendering of a service;
(ii) prevent that Municipal Council from taking unreasonable action that
is prejudicial to the interests of another municipality or to the province as a whole; or
(iii) maintain economic unity; or
(c) dissolving the Municipal Council and appointing an administrator until a newly
elected Municipal Council has been declared, if exceptional circumstances
warrant such a step.” (my emphasis)
[6] Section 139 (3) then further qualifies the power given to the
Executive Council as follows:
“(3) If a Municipal Council is dissolved in terms of subsection (1) (c)-
(a) the provincial executive must immediately submit a written notice of the
dissolution to-
(i) the Cabinet member responsible for local government affairs; and
(ii) the relevant provincial legislature and the National Council of Provinces;
and
(b) the dissolution takes effect 14 days from the date of receipt of the notice by the
Council unless set aside by that Cabinet member or the Council before the
expiry of those 14 days.” (my emphasis)
[7] It was accepted by both Mr Heunis SC for the Applicants, and Mr
Sishuba for the Respondents, that the reference to “the Council”
in sub paragraph (3)(b) is a reference to the NCOP. I agree. It
was also accepted by both parties that notice had in fact been
given to the NCOP. What complicated the matter however, was
that there had been a previous attempt to dissolve the Municipal
Council, which had been abandoned on the very same day that
the current attempt to dissolve the Municipal Council was
launched. One of the questions to be answered is whether the
same notification to the NCOP can be used again,
notwithstanding the 2nd Respondent’s abandonment of her first
Page 7
attempt to dissolve the Municipal Council. The date of the
notification to the NCOP was the 19th January 2009.
[8] On the 6th February 2009 a similar application was launched in
this court. In that matter two additional respondents were cited,
namely the NCOP and the Minister. To a large extent the issues
overlap.
[C] Locus Standi
[9] The Applicant’s legal advisor deposed to the founding affidavit in
the first application, and to a confirmatory affidavit in the
second. He alleged in the first application that he had delegated
powers authorising him to bring the application and annexed
what purported to be a copy of the Council’s delegation of
powers, which provided that the Municipal Manager had inter alia
all the powers delegated to the Directors / Officials of Council,
although the document did not specify what those powers were,
but it also delegated or purported to delegate the power to
institute or defend legal action by or against Council from the
Municipal Manager to the Legal Advisor. It was argued then, and
also in respect of the present matter, that the delegation of the
power to institute or defend legal actions to the Legal Advisor
was void as it did not appear that the Municipal Manager had
that power. Mr Heunis argued that both the present applicants
had made positive averments under oath that they were indeed
clothed with that delegated power and there was nothing before
me to gainsay that. Although the specific delegation to the
Municipal Manager to institute or defend legal actions does not
appear from the document I am inclined to agree with Mr Heunis
that unless it appears to the contrary, that there is nothing to
Page 8
gainsay the positive assertions by the deponents that they were
in fact clothed with the necessary delegated authority.
[10] As far as the Mayor’s locus standi was concerned, Mr Sishuba
argued that as the council had been dissolved, that he therefore
had lost whatever authority he may have had, without conceding
that he would have had the authority in the first place to launch
these proceedings. Possibly anticipating such an objection, the
Applicants had also described themselves as concerned
ratepayers in the papers, arguing that they therefore had a right
to bring the present application. Mr Sishuba countered that if
they were bringing the application as ratepayers that it would
have been in the nature of a class action, and that there were
specific requirement which should have been complied with, and
which they had not complied with. 4 As I have found that the
purported dissolution was invalid, then Mr Sishuba’s argument
falls away. Although Mr Sishuba never conceded that the Mayor
had the authority to institute or defend legal actions, the Mayor
alleges that he had such authority and in the absence of
anything to the contrary I must find that he probably did have
such authority.
[D] Non Joinder
[11] In the first Application, Mr Bluhm submitted that the Council
had cited the NCOP
“by reason of the provisions of section 139(2)(a)(ii)5 of the Constitution.”
4
Froneman J, in Ngxuza And Others V Permanent Secretary, Department Of Welfare, Eastern Cape,
And Another 2001 (2) SA 609 (E), was of the view that “the possibility of unjustified litigation can
be curtailed by making it a procedural requirement that leave must be sought from the High Court to
proceed on a representative basis prior to actually embarking on that road.” (at 624 D)
5
Section 139(2)(a)(ii) provides that if a provincial executive intervenes in a municipality in terms of
subsection (1)(b), which provides for the assumption of the responsibility for certain obligations, that
Page 9
The relevant section was in fact 139(3)(a)(ii). It is strange that he
thought it important to join the NCOP in the first application but not
this one, and unfortunately no argument was addressed to me on
this point by Mr Heunis. In both instances written Notices must be
addressed to the NCOP. In the case of an intervention 6
the
notification must take place within 14 days after the intervention
began, and in the case of a dissolution 7 14 days prior to the
dissolution.
[12] Mr Bluhm justified citing the Minister in the first Application by
reference to his role as set out in section 139(2)(b)(i). Once
again this is a reference to the incorrect section, as it deals with
an intervention, not a dissolution. The correct subsection is
(3)(a)(i), but nothing turns on the incorrect subsection being
mentioned, as the Minister indeed has a role to play in both an
intervention and a dissolution. Once notification is given to the
NCOP and the Minister, either of them can set it aside within the
14 day period before the dissolution takes place.
[13] Both the Minister and the NCOP are quite clearly interested
parties and do not just play a passive role in the proceedings.
Both the NCOP and the Minister have the power to overrule the
decision or recommendations of the executive committee. Mr
Heunis argued that if the decision to dissolve the council was
invalid, that it would not have been necessary to involve either
the NCOP or the Minister, and that their involvement would only
come about once a valid decision had been reached. Although
there appears to be some merit in this argument they are clearly
the Provincial Executive must submit a written notice of the intervention to the MEC as well as to
the provincial legislature and the NCOP within 14 days after the intervention began.
6
In tems of sections 139(1)(b) and 139(2)
7
Sections 139(1)(c) and 139(3)
Page 10
directly involved and should be given the opportunity to
intervene should they so wish. The comments of Mahomed J in
Wholesale Provision Supplies CC V Exim International Cc And
Another, 8
a judgment of the full bench of the Transvaal
Provincial Division, are however apposite.9 I do not believe that
there will be any prejudice suffered by either the Minister of the
NCOP if I grant the interim relief sought. I am of the view that a
greater injustice would be suffered if I were to deny the relief in
order to afford them the opportunity to join in the proceedings
when they both in any event abided the decision of the court in
what was almost a mirror image of these proceedings only one
week ago. They will still have an opportunity to join in the
proceedings.
[E] The Factual Background
[14] On 15 December 2008 the Council received a letter dated 11
8
1995 (1) SA 150 (T)
9
From pp 157 H – 158F
“Does this preclude the Court from granting the relief? In the special circumstances of this
case I believe that it does not. In arguing to the contrary, counsel for the respondent in his heads of
argument relied on the leading case of Amalgamated Engineering Union v Minister of Labour 1949
(3) SA 637 (A) . The judgment of Fagan AJA, as he then was, in that case sets out the policy reasons
which influence a Court when it declines to make an order which might prejudicially affect a third
party which has not been joined in the proceedings. At 649-50 the Court analyses the decision of
Bekker v Meyring, Bekker's Executor 2 Menzies 436, decided in 1844. Certain children had attacked
the will of their deceased father, citing the executor of the estate and a legatee who was not a child of
the deceased, but not joining the other children. No objection was taken to this in the Court a quo,
but on appeal the point was raised for the first time. It was rejected. Fagan AJA at 649 says:
'It is obvious from these facts that the objection, taken for the first time on appeal, was, under
the circumstances, a purely technical one, taken for the purpose of causing delay and trouble and not
from any real concern for the interests of the remaining legatees.'
At 653 of the report of the Amalgamated Engineering Union case Fagan AJA also refers to the
importance of ensuring that a third party, who has not had an opportunity of protecting his interests
because of the failure to join him as a party is not prejudiced by an order given by the Court in
litigation between other parties. This is again emphasised by the learned Judge at 658 and 659 in
dealing with the cases of Collin v Toffie 1944 AD 456 and Home Sites (Pty) Ltd v Senekal 1948 (3)
SA 514 (A) .These observations clearly show, in my view, that the rule which seeks to avoid orders
which might affect third parties in proceedings between other parties is not simply a mechanical or
technical rule which must ritualistically be applied, regardless of the circumstances of the case. For this
reason the Court in Smith v Conelect 1987 (3) SA 689 (W) held that, where the third party has waived
his right to be joined, the failure to join him as a third party was no bar when ordering the proceedings
which might
Page 11
December 2008 from the MEC, purportedly in terms of section
160(1)(a) of the Systems Act. 10 . The relevant portions of the
letter read as follows:
“Please be advised that I have been informed of possible maladministration taking
place at your municipality. I view these allegations very seriously and therefore
invoke Section 106 of the Local government: Municipal Systems Act of 2000, Act No
32 of 2000, which reads as follows.11 I have appointed the Special Investigating Unit
(SIU) to investigate these matters in terms of Section 106(1)(b) of the Act in order to
establish the correctness of the allegations. Due to the seriousness of the allegations
made, I respectfully request you to halt all activities with financial implications until
further notice. I furthermore wish to complete this investigation as quickly as possible
in order to avoid the unnecessary disruption of your municipality and therefore
request the assistance and cooperation of the council and its officials.” (my
emphasis)
[15] On the same date the Council’s attorneys addressed a letter
to the office of the MEC requesting her to identify the alleged
malpractices and pointing out that it would be impossible to halt
all activities with financial implications, as practically everything
the municipality did, had financial implications. No response was
ever received to that letter.
[16] The next communication that the Council received was from
the Department of Local Government and Traditional Affairs (“the
DLGTA”) on Friday the 23rd January 2009 when an employee of
the Municipality received a telephone call from an official of the
DLGTA wanting to arrange a meeting for Monday the 26 th
January, with the Council, section 56 Managers, the Unions and
the Mnqquma Community stakeholders, which would also be
affect him, because he was not prejudiced in these circumstances.” (my emphasis)
10
The Local Government: Municipal Systems Act, No. 32 of 2000
11
The section was then quoted: “(1) If an MEC has reason (sic “to believe” was excluded) that a
municipality in the province cannot or does not fulfill a statutory obligation binding on that
municipality or that maladministration, fraud, corruption or any other serious malpractice has
occurred or is occurring in a municipality in the province, the MEC must – (a) by written notice to
the municipality, request the municipal council or municipal manager to provide the MEC with
information required in the notice; or (b) if the MEC considers it necessary, designate a person or
persons to investigate the matter.”
Page 12
attended by the NCOP. It was quite obviously virtually impossible
to arrange a meeting with all of those stakeholders at such short
notice. The meeting was then cancelled by the DLGTA and
rescheduled for two days later and again cancelled by the
DLGTA. Despite a request for an agenda and information about
the meeting nothing was forthcoming.
[F] The Proclamation
[17] On the 3rd February Mr Bluhm came to learn of the
proclamation of Notice No. 2 (“The Proclamation”) which had
been published in the Provincial Gazette on the 23 rd January.
The Proclamation reads as follows:
“I THOKOZILE KASA, Member of the Executive Council responsible for Local
Government in the Province of the Eastern Cape, duly authorised thereto by the
Provincial Executive Council of the Eastern Cape do invoke on its behalf section
139(1)(c) of the Constitution of the Republic of South Africa Act, 1996 (Act 108 of
1996), as amended, hereby intervene in the affairs of the Mnquma Local
Municipality by dissolving the Municipal Council in terms of section 139(1)(c) of
the said Constitution with effect from a day 14 days from the date of receipt of this
notice by the National Council of Provinces”(my emphasis)
[18] Of critical importance was the date on which the NCOP had
received notice. The Proclamation talks about “this notice” which
would lead one to assume that the 14 day period would begin to
run from the 23rd January. However, it subsequently transpired
that the Statutory Notice to the NCOP was given on the 19 th
January 2009. The Council appears never to have been notified
of the alleged notice to the NCOP dated 19 January 2009.
[19] Paragraph 5 of the Annexure to the Proclamation provided
that:
Page 13
“There are no councillors in Mnquma Local Municipality as this Provincial
Gazette is dissolving the Municipal Council in terms of Section 139(1)(c) of the
Constitution of the Republic of South Africa, 1996 (Act 108 of 1996) as
amended.”(my emphasis)
[20] Quite clearly, paragraph 5 was irreconcilable with that part of
the Proclamation which intended to dissolve the Municipality with
effect from 14 days after the date of receipt of “this notice” by
the NCOP. If “this Notice” was the notice proclaimed in the
Provincial Gazette dated the 23rd January 2009 the dissolution
of the Council could only have taken place on the 6th February
2009. If the notice had been given on the 19th January then the
Council could only have been dissolved on the 2nd February.
[21] Paragraph 7 of the Proclamation provided that the dissolution
of the council:
“shall not in any way impede the operation of the municipality. The staff already under the
employ of Mnquma Local Municipality shall continue to work under the same conditions of
services. (sic).”
[22] The effect of Paragraph 7 seems to be that if the Provincial
Executive dissolves a council that the staff would continue to
work as before and that if they exercised delegated authority
prior to the dissolution that they would continue to do so
afterwards. Therefore, if Mr Bluhm had the delegated authority
prior to the dissolution, assuming that there was a valid
dissolution, that his delegated authority would survive such
dissolution.
[G] Audi Alteram Partem and PAJA12
12
The Promotion of Administrative Justice Act 3 of 2000
Page 14
[23] The Applicants complained that the audi alteram partem rule
had not been applied, that Council was not informed of what it
had supposedly done wrong, nor had it been given an
opportunity to refute any such allegations.
[24] On the 4th February Mr Bluhm tried to establish from the
NCOP whether they had indeed received notification, but neither
he nor his attorney was able to get confirmation from them.
[25] Mr Heunis argued that intervention by way of dissolution is
only warranted in exceptional circumstances and that this is a
factual finding, as it indeed must be. Although it is trite law that
when an administrator makes a factual finding that it must give
the party against whom a factual finding may be found an
opportunity to meet the case against it, executive powers
exercised by a Provincial Executive Council in respect of section
139 of the Constitution are specifically excluded from the
definition of “administrative action” in section 1 of PAJA. The
limitation of the definition of administrative action has been
criticized 13 and the view expounded that it matters not that a
particular action falls foul of the restraints contained in section 1,
as the principle of legality applies in any event to the exercise of
all public power.14 It seems to me in any event that the factual
finding made by the MEC (or for that matter the Executive
Committee) should have been an administratively justifiable
decision, and would not have been the exercise of an executive
power. The executive decision to dissolve the Council would then
13
See Hoexter – Administrative Law in South Africa Juta 2007 at p 217
14
See Hoexter supra at p 219
“This fundamental principle has already developed considerably since it was first identified by
the Constitutional Court, and it is likely to be developed further. While the courts have not always
been sure of its status or willing to make use of it, they now regard it as an essential safety net and
frequently turn to it. It is becoming increasingly common for judges to observe that if their diagnosis
of administrative action turns out to be wrong, it makes no real difference because the principle of
Page 15
have followed after the factual finding and whether or not that
decision would be reviewable under PAJA or at common law,
based on the principles of legality, is not a decision I have to
make.
[26] On the Applicants papers, both in the first and also in the
second application, it is quite clear that they were never afforded
any opportunity to make any representations before any findings
of fact were made. Mr Bluhm disputed the averments contained
in the letter dated 11 December alleging “ possible
maladministration”. In any event “possible maladministration”
would not justify the dissolution of a council. There would have
to be a factual finding of actual maladministration which affected
the administration of that municipality to such an extent that it
could not or did not fulfil an executive obligation. There had
never been any indication of what the alleged maladministration
was or what the executive obligations were that it could allegedly
not fulfil. In any event, the MEC only appears to have appointed
the SIU to investigate the alleged maladministration on or about
the 11th December 2008 so it is unlikely that she would even
have known what evidence there actually was of
maladministration before the SIU had completed its
investigations.
[27] Whether or not the SIU ever commenced or completed its investigation after
the 11th December is not known. In view of the Christmas
holidays and the short time available between the 11th
December 2008 and the date of the Proclamation it is unlikely
that any findings were made. In any event, it does not appear
that any findings were communicated to the Council. Of some
legality makes the same demands as regular administrative law.” (footnote exluded)
Page 16
significance is the fact, as pointed out by the Councils attorneys,
that the letter of the 11th December (received by the Council on
the 15th December) referred to “possible maladministration” and
not to fraud, corruption or serious malpractice” as contemplated
in section 106 of the Systems Act.
[28] The Council’s attorney also deposed to an affidavit in the first
application in which he confirmed that he had addressed a letter
to the MEC on the 4th February 2009 requesting to be advised
whether the NCOP had been notified of the proposed intervention
and if so when such notification had been given, as it was critical
to determine when the 14 day notice period expired, and
threatening to bring an application to court for appropriate relief.
On the following day he received a response to the effect that
the matter was under investigation and requesting that, in
keeping with the principles of co-operative government and
intergovernmental relations as enshrined in Section 41 of the
Constitution, that it would not be appropriate for them to resort
to litigation before the NCOP had managed to respond to them.
Neither then nor in the opposing papers was the Council or its
legal advisors advised that notification had been directed to the
NCOP on the 19th January 2009 and that the Council would
accordingly have been dissolved on the 2nd February 2009. The
subsection only makes provision for dissolution after 14 days,
not thereafter.
[29] The Council’s attorneys responded to the NCOP that as they
had not been informed as to when the NCOP had been notified,
that they would be constrained to approach the court for relief.
[H] The First Application
Page 17
[30] On the next day, the 6th February, the first application was
launched seeking to interdict the current respondents from
proceeding with the dissolution pending a review of the decision.
An order was made on the 6th February 2009 by agreement
between the parties, effectively granting the Applicant the relief
sought.
[31] On the 11th February an opposing affidavit was filed by an
assistant State Attorney on behalf of the current respondents,
not the NCOP or the Minister, both of whom had been cited as
Respondents, and the next day the parties agreed to an order in
terms of which the rule nisi was discharged and the MEC ordered
to pay the costs of the application up to the 6th February 2009.
The Assistant State Attorney made no mention in his affidavit of
a notification having being sent to the NCOP on the 19 th January
2009.
[32] The Assistant State Attorney who deposed to the opposing
affidavit took the view that the main issue complained about was
the publication of the Proclamation, and was of the view that it
was not necessary to traverse all of the allegations made in the
founding papers. The deponent questioned the authority of
Bluhm, felt that the application should fail due to the failure by
the Council to pay heed to the principles of co-operative
governance and inter-governmental relations, and that the issues
falling to be determined were in any event moot.
[33] The deponent indicated that he had established that the
Proclamation dated 23 January 2009, as well as another one of
Page 18
the 5th February 2009 “had come about through inadvertence”.
[34] In paragraph 14 of his affidavit he stated that:
“the issues falling to be determined in this application have become academic with the
result that this Honourable Court should refuse to pronounce thereon. The Department, at the
instance of the MEC, has set in motion a process of reversing the publication which forms the
subject of this application. The notice reversing the impugned one has been published in the
Provincial Gazette of today.15 In this regard, I respectfully reefer (sic) this Honourable Court
to a copy of the relevant gazette, annexed hereto and marked “MM2”” (my emphasis)
15
The Notice published in an Extraordinary Provincial Gazette read as follows:
“I, TOKOZILE XASA, Member of the Executive Council responsible for Local Government
and Traditional Affairs in the Eastern Cape Province hereby reverse / withdraw Provincial Notice
No. 2 published under Provincial Gazette No. 2048 of 23 January 2009 and Provincial Notice No. 4
published under Provincial Gazette No. 2052 of 05 February 2009.”
Page 19
[I] The Second Attempt
[35] It subsequently appeared that the issues had not become
academic. On the same day that the parties had agreed to the
final order above, with the MEC agreeing to pay the costs
thereof, the MEC signed a letter addressed to the Mayor and
arranged to have it served on him. It appears that it was served
on him by members of the South African Police Services around
midnight. The full text of the letter follows:
“1. It has come to the attention of the Provincial Executive that the Council of Mnquma
Local Municipality cannot or does not fulfil the following executive obligations:
(a) Failure to comply with section 64(2)(a) of the MFMA Act no 56 of 2004 in
ensuring that there is an effective revenue management system of the Council.
The municipality has no sound financial management system in place to
ensure that it is financially viable
Revenue management
o Residents do not pay for services rendered to them
o Officials and Councillors owe the municipality and are in arrears by
more than three months without any attempt of implementing credit
control measures being made
o There is poor debt recovery and management on rental debtors
o The collection rate is far below the projected percentage and no
adequate measures are taken to address this crisis
o There is very low spending of MIG funding which is meant for
infrastructure upgrade and development
o There is no evidence to suggest that disciplinary action has been taken
against officials who fail to collect money owing to the municipality
o Municipality is unable to reconcile the valuation roll and revenue
received
(b) Failure to comply with the provisions of section 122(1-3) of the MFMA Act no
56 of 2005
(c) Non-compliance with GRAP and/or GAMAP requirements on the preparation
of financial statements without any prior approval from National Treasury
(d) Failure to comply with section 63(2)(a-c) of the MFMA Act no 56 of 2003
The municipality does not have an asset management policy and strategy
in place
Does not have nor maintain management accounting and information
system that accounts for the assets and liabilities of the municipality
Does not have assets and liabilities that are valued in accordance with
standards of generally recognized accounting practice
Does not have nor maintain a system of internal control of assets and
liabilities register
The current fixed asset register does not even contain sufficient
Page 20
information describing assets as well as the location of such to enable
verification of their existence
Disposals are not even recorded on the register when they occur
(e) Failure to meet the requirements of section 20(1)(a) of the Health Act no 63 of
1977, which requires that every Local Authority to take lawful, necessary and
reasonable practicable measures to maintain its locality at all times in a
hygienic and clean condition
Recent events indicate that the waste management has deteriorated to
unacceptable levels. Some staff members who are involved in the political
conflict are reported to have dumped waste on certain roads,
unnecessarily blocking traffic. One of the staff members have been
suspended as a result of this.
2. Noting the factors set out above, and by the powers invested in me in terms of Section
139(1)(c) of the Constitution, 1996(Act 108 of 1996), the Mnquma Council is hereby
dissolved with effect from 12 February 2009.
3. Kindly facilitate a session with the former councillors and a separate session
with the Administration in order to communicate my decision and introduce the
Administrator. It would be appreciated if these sessions could be convened on Friday
13 February 2009 starting at 08h00 in the municipal offices in Butterworth.” (my
emphasis)
[36] The mayor deposed to the founding affidavit in the Second
Application. He recited the history of the matter as set out above
and confirmed that the letter of the 12th February had been
delivered to him about midnight on the 12th February by the
Sheriff and a number of members of the South African Police
Services.
[37] Mr Heunis argued that the failure by the MEC to inform either
them or the court that they were contemplating a second
dissolution was tantamount to constructive contempt of court.
One would assume that the MEC would have known at the time
when her legal representatives were at court, that she was
intending to issue a fresh notice and that these things are not
decided on the spur of the moment. Equally likely, is that her
legal representatives would have known. The unlikely alternative
is that her legal representatives returned from court and that
they then decided to issue the notice that same day. The
question to be answered is whether the MEC or her
Page 21
representatives had a duty to disclose their intentions to the
Applicants, their attorneys or the court. Quite apart from any
collegial practice between legal practitioners and a duty to be
frank with the court, it appears that the impression was
intentionally created that the dispute was moot whilst this was a
misrepresentation. The dispute was not moot. It appears to be
clear that it was only the question relating to the validity of the
Proclamation that was moot and I would have expected that the
Respondents would argue in due course that this is what they
had in mind when they told the court and the Applicants legal
representatives that the point was moot. However, the
Respondents subsequently withdrew their opposition to the
matter on the 23rd February, and tendered the Applicants costs.
[J] The Status of the 19th January Notification
[38] According to Mr Sishuba, the MEC purported to rely on a
notification to the NCOP dated the 19th January 2009. The MEC
also purported to rely on this notification to justify the January
23 Proclamation. If there was only one notification to the NCOP,
being the 23rd January 2009, and I must accept that there was,
as that is what Mr Sishuba assured me, then the dissolution of
the council should have taken place on the 2nd February and one
would have expected the MEC to notify the Council of that fact
then, and not on the 12th February. It seems to me that there is
merit in Mr Heunis’s argument that either the MEC cannot rely on
the same notification twice, or that it was abandoned. If it was
not abandoned then it would and should have been acted upon.
The MEC would surely not have permitted a situation to prevail
where a municipal council has been dissolved but is not advised
Page 22
of this fact and continues to operate as if still properly
constituted. It is beyond belief to imagine that the MEC would
have permitted the council to go about its business from the 2 nd
February to the 12th February, full knowing that it had been
dissolved. Any expenditure incurred by the Council during this
time period would have been unauthorised and constituted
criminal conduct. It is unlikely that the MEC would have
countenanced such criminal conduct.
[39] The wording of s 139(3)(b) appears to permit no exceptions
and I quote:
“The dissolution takes effect 14 days from the date of receipt of the notice by the Council
unless set aside by that Cabinet member or the Council before the expiry of those 14 days.”
(my emphasis)
[40] The February 12th notification by the MEC also purported to
dissolve the Council:
“by the powers vested in me in terms of Section 139(1)(c) of the Constitution”. (my
emphasis)
There is quite clearly no such power vested in the MEC. That power
is vested in the Provincial Executive. Mr Sishuba argued that the
MEC was acting in terms of delegated power when making that
statement. It is true that her letter dated 12 February 2009 was
prefaced with the words:
“It has come to the attention of the Provincial Executive that the Council of Mnquma
Local Municipality cannot or does not fulfil the following executive
obligations…”(my emphasis)
and that there may accordingly be room for Mr Sishuba to argue
that the MEC had been acting in term of her delegated authority
when she issued the letter dated 12 February. He argued that if she
Page 23
had had an opportunity to respond that he might well have been
able to prove such an averment. The letter does not appear to
support what he argues. She says in the letter that she derives her
power from s 139(1)(c) of the Constitution. In her Proclamation of
the 23rd January she got it right. There she stated that she was
duly authorised by the Provincial Executive Council to invoke the
relevant subsection on its behalf. Whether or not she had such
delegated authority then or now is not known but as I have found
that the notification to the NCOP dated 19 January had either
expired or been abandoned by the time the Notification dated 12
February was issued I do not have to make a finding in that regard.
[41] I am also not going to make a finding in regard to the costs of
the matter. Mr Sishuba is quite correct when he argues that he
was under a tremendous disadvantage in only having sight of the
application an hour or so before being called upon to argue it.
His instructing attorney was in court with him and although she
appeared to be familiar with the underlying facts, and was the
source of the information that the MEC was relying for the
second notification on the same notice dated 19 January 2009, I
do feel that they should be given an opportunity to fully ventilate
the issues and also explain why they felt they should not disclose
to the court and the applicants that they still intended pursuing
the dissolution of the Council, notwithstanding their assurances
to the court that the matter was moot. I make no findings in this
regard. I do feel under the circumstances that the status quo
ante should prevail and that the interim relief should be granted.
[42] If the facts relating to the alleged maladministration alleged
by the MEC are true then there should be no prejudice to any of
the Respondents, the NCOP or the Minister, if the allegations are
put to the Council and they are thereafter engaged in discussion
Page 24
and debate regarding same. It is more than a little ironic that the
Respondents complain that the Applicants have not engaged
them in attempts to resolve this matter whilst it is the
Respondents who appear to have acted in a manner quite at
odds with the duty of co-operative governance. 16 The duty of
co-operative governance envisages exactly that – co-operation
from both parties. On the facts set out by the Applicant there
was virtually no co-operation by the MEC prior to the notices
being issued.
[43] As far as the non joinder is concerned I agree with Mr Sishuba
that both the NCOP and the Minister should have been joined
and my order will make provision for that. I do not believe
though, for the reasons given above, that the failure to join them
at this stage should preclude the applicants from obtaining the
relief they seek.
[44] I am not naïve enough to think that the Council is a shining
example of administrative excellence. I have little doubt that the
complaints that the MEC has put to the Council emanate from
the Auditor General’s annual audit reports. If so, then the Council
is probably no different from the majority of other Local
Municipalities in the Eastern Cape and the MEC could probably
16
Section 41 of the Constitution sets out the principles of co-operative government and
intergovernmental relations, the relevant ones to this case which are as follows:
(1) All spheres of government and all organs of state within each sphere must-
…
(e) respect the constitutional status, institutions, powers and functions of government in
the other spheres;
(g) exercise their powers and perform their functions in a manner that does not encroach
on the geographical, functional or institutional integrity of government in another sphere;
and
(h) co-operate with one another in mutual trust and good faith by-
(i) fostering friendly relations;
(ii) assisting and supporting one another;
(iii) informing one another of, and consulting one another on, matters of common interest;
(iv) co-ordinating their actions and legislation with one another;
(v) adhering to agreed procedures; and
Page 25
quite validly act against any of them. Why she chose to single
out Mnquma municipality for this treatment may well be
explained by her in due course. To put the extent of the
problems experienced with Local Government in the Eastern
Cape in context I quote from a media release by the Auditor
General on the 23rd May 2008, 17 from which it appears that
there are 45 municipalities in the Eastern Cape. An analysis of 40
of their audits by the Auditor General revealed the following:
“…
Of the 40 municipalities, 30 (75 %) received the worst case audit opinions
(adverse and disclaimer);
With the exception of the Cacadu District, where the district municipality
has improved from a disclaimer to a financially unqualified (with other
matters) opinion, no other municipality received a favourable audit opinion
in the province
The widespread areas of qualification, ranging from the balance sheets to
the income statements, are mainly due to a lack of adequate internal
controls, lack of discipline to retain and provide supporting documentation
and a general lack of capacity and skills to fully comply with the prescribed
accounting framework;
With the exception of the Metro, there is a high level of qualifications
relating to expenditure in all categories of municipalities, which poses a
high risk of misappropriation of funds in a number of high (50%),
medium (64%) and low (70%) capacity municipalities
The deliberate plan to defer the valuation of fixed assets was the main
contributing factors for the Nelson Mandela Metro Municipality being
qualified; and
All these observations including the high incidence of material
non-compliance with legislation as well as inefficient governance-related
structures - internal audit and audit committees are also fuelled by the lack
of adequate supervision and monitoring by leadership.”
[45] The problems complained of by the Auditor General appear
largely to reflect the concerns alluded to by the MEC in her letter
dated 12 February 2009 addressed to the Council. If indeed
action should have been taken by the MEC then it is all the more
(vi) avoiding legal proceedings against one another.
17
http://www.agsa.co.za/LinkClick.aspx?fileticket=%2b4hdAacEXCA%3d&tabid=67&
Page 26
regrettable that it appears to have been done in a rushed and
amateurish manner.
[46] Requisites for an interim interdict are trite. 18
The
requirements are: a prima facie right; a well-grounded
apprehension of irreparable harm if the interim relief is not
granted and the ultimate relief is finally granted; that the
balance of convenience favours the applicant for the granting of
the interim interdict; and that the applicant has no other
satisfactory and adequate remedy. In this case the Applicant also
had to show that a departure from the normal 72 hour notice
period required was required. As far as urgency is concerned,
this matter clearly fell within the realms of high priorities. The
purported dissolution of an entire council is an action with
potentially devastating consequences for the ratepayers of the
area. Although no statistics were submitted, it appears from it’s
website19 that there are approximately 297 000 people resident
within the Council’s jurisdiction. Mr Heunis advised me from the
bar that the municipal offices had been locked that morning and
that work at the municipality had effectively come to an end. The
balance of convenience quite clearly lay with the Applicants. A
prima facie right was made out by the Applicants, a prima facie
invasion of those rights had been made out and although I am
alive to the fact that it may well be unfair to expect a
Respondent, especially a government department to come to
court on less than 72 hours notice, in this case virtually ex parte,
it did seem to me that the facts warranted a departure from the
provisions of section 35 of the General Law Amendment Act.
There is no provision for a right of appeal against the dissolution
mid=406 (accessed on 18 February 2009)
18
Joubert (ed) The Law of South Africa (LAWSA) vol 11, first reissue, para 307 et
seq.
Page 27
order and it seems to me that the only way of setting it aside is
by way of review, coupled where appropriate, with an application
for an interdict. The Applicants applied simultaneously with this
relief for a review of the decision, which process will run
independently, initially at least, from this procedure. I must
emphasise finally, that my findings are based mainly on the
Applicants version and that it is possible that once all of the facts
are known, that some of the findings I have made may not be
borne out by the facts. The relief sought is of an interim nature,
and the findings I have made, are similarly, of an interim nature
and are open to correction once all of the relevant facts have
been ventilated.
[47] As indicated above, the Respondents subsequently withdrew
their opposition to the Application and tendered the Applicants
costs on a party and party basis.
Under the circumstances, the following order was made:
1. The uniform rules on form and time periods are dispensed with
and the matter is afforded an urgent hearing. The Applicants are
furthermore permitted to bring this application within a lesser
period than that prescribed by section 35 of the General Law
Amendment Act, No. 62 of 1955;
2. A rule nisi is issued in terms of which the Respondents are called
upon to appear before the above Honourable Court on the 24 th
March 2009 to show cause, if any, why the following order
should not be made final:
2.1 Interdicting and restraining the Respondents, their officials
19
http://www.mnquma.gov.za/ (accessed on 18 February 2009)
Page 28
and any other person(s) purporting to act on their behalf,
from interfering with, impeding or otherwise compromising
the 2nd Applicant’s ability or right to exercise its
constitutional and statutory powers and to perform its
functions pending the outcome of the review application
contemplated in the notice of motion.
2.2 Interdicting and restraining the aforesaid Respondents
from intervening in the 2nd Applicant’s affairs in terms of
section 139(1)(c) of the Constitution and, in particular,
from dissolving the 2nd Applicant and appointing an
administrator in its stead;
2.3 Suspending the effect of the 2nd Respondent’s letter of 12
February 2009 referred to in the founding affidavit in which
she purports to act in terms of section 139(1)(c) of the
Constitution, pending the outcome of the review
application.
2.4 Requiring the Respondents to pay the costs of this
application on an attorney and client scale, including the
costs consequent upon the employment of two counsel,
jointly and severally, the one paying the other to be
absolved.
3. The orders made in terms of paragraphs 2.1 – 2.3 shall serve as
an interim interdict pending the return date of the rule nisi or
any further date to which it is postponed.
4. The Applicants are ordered to serve the papers in this matter on
the National Council of the Provinces (“the NCOP”) as well as the
Page 29
Minister of Provincial and Local Government (“the Minister”) by
the 20th February 2009.
4.1 The Respondents, as well as the NCOP and the Minister,
should they so desire, shall serve and file their answering
papers by the 6th March 2009.
4.2 The Applicants may reply to such responses by the 13 th
March 2009.
______________________________
L D KEMP
ACTING JUDGE OF THE HIGH COURT, BISHO
MATTER HEARD ON : 16 February 2009
Judgment delivered on : 17 February 2009
Reasons handed down on : 26 February 2009
Counsel for the Applicants : Adv J Heunis SC
Adv J Hobbs
Attorneys for the : SMITH TABATA
Applicants INCORPORATED
King William’s Town
Counsel for the Respondents : Adv Sishuba
Attorneys for the : The State Attorneys
Respondents : King William’s Town
