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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, BHISHO

 

Case no: 231/ 2009

 

In the matter between:

 

Mnquma Local Municipality	First Applicant
Webster Mbasa Ntongana	Second Applicant
And
The Premier of the Eastern Cape	First Respondent
The Member of the Executive Council
for Local Government and
Traditional Affairs, Eastern Cape	Second Respondent
The Executive Council of the
Eastern Cape Province	Third Respondent
The National Council of Provinces	Fourth Respondent
The Minister of Local Government	Fifth Respondent
The Provincial Legislature of the
Eastern Cape Province	Sixth Respondent
Thandolwakhe Tubane NO	Seventh Respondent

 

JUDGMENT

 

D. VAN ZYL J:

 

Introduction

 

[1]            This application concerns a decision taken by the Provincial Executive Council of the Eastern Cape Province in terms of the provisions of the Constitution to dissolve the Municipal Council of the Mnquma Local Municipality. The intervention of the Provincial Government in the said municipality was not without its problems. The aforementioned decision, which was taken on 8 April 2008, was preceded by two earlier unsuccessful attempts to dissolve the municipal council. The lead up to the decision which forms the subject matter of the present application was briefly the following: In early December 2008 the Member of the Executive Council of the Eastern Cape Province responsible for Local Government Affairs (the MEC) advised the municipality in writing that she had been “informed of possible maladministration” in the municipality. The municipality was instructed to “halt all activities with financial implications until further notice.” The MEC further informed the municipality in the same letter that she had appointed the Special Investigating Unit[1] to investigate these matters and was doing so in terms of section 106(1)(b) of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act).[2]

The aforementioned letter did not offer any particulars of the nature of the “possible maladministration”. As a result the municipality requested the MEC in writing to identify the malpractice in issue and at the same time advised that it would not be practical to comply with the request to halt all activities with financial implications as it would bring service delivery at every level to a standstill. What followed was the publication of a notice in the provincial gazette on 23 January 2009 dissolving the Mnquma Municipal Council (the council). This gave rise to an application launched on 23 January wherein the municipality sought an interdict, inter alia, restraining the relevant authorities from intervening in the municipality’s affairs and from dissolving the council. An interim order was granted and the relevant respondents were called upon to show cause why it should not be made final. On 9 February this order was supplemented by an order that the said respondents must further show cause why an order requiring the Province to relinquish possession and control of the municipality’s premises should not be made final.

 

[2]            On 12 February the aforementioned rule nisi was discharged by agreement and the respondents were ordered to pay the costs of the application. However, on the same day, and unbeknown to the municipality, the Province initiated a new intervention. A letter was delivered to the mayor of the municipality in the evening of the same day informing the municipality that (a) it was not fulfilling its executive obligations by failing to comply with certain provisions of the Local Government: Municipal Finance Management Act 56 of 2003 (the Municipal Finance Management Act), and (b), that “noting the factors set out above… the Mnquma Council is hereby dissolved with effect from 12 February 2009.”

 

[3]          This prompted the Municipality to lodge a second application. In the notice of motion relief was sought substantially similar to that in the first application. The application was similarly opposed. This Court, per Kemp AJ, after hearing argument, granted the interim relief claimed. However, on 23 February the respondents filed a notice of withdrawal of opposition and tendered to pay the wasted costs. According to the respondents in their answering affidavit filed in the present matter, the reason for the withdrawal of their opposition was that, acting on legal advice, the two decisions to dissolve the council were taken in circumstances that exposed it to a procedural attack.

 

[4]            According to counsel for the respondents the provincial executive, now acting on new legal advice, then adopted a different procedural approach. On 27 February it wrote to the municipality setting out a number of complaints which might form the basis of a decision to dissolve the municipal council. Counsel submitted in their heads of argument that this was done not because any duty was imposed by the empowering provisions in the Constitution, or because there is clear authority to that effect, but by reason of the principle of co-operative governance in sections 40 and 41[3] of the Constitution, and constitutional values which might require the application of the audi alteram partem principle in the implementation of the said provisions.

 

[5]          In the aforementioned letter the executive mayor of the municipality was advised that the provincial executive was considering whether or not to issue a notice dissolving the municipality’s council. This notification offered an opportunity to the council to respond in writing and to advance such submissions and representations as may be appropriate. The council responded to the matters raised in the letter after requesting further information and furnished its representations on 18 March. A memorandum was prepared by the state attorney analysing and summarising the presentations that were received from the council. This memorandum, together with a number of attachments, which included the initial notification, the requests by the municipality for information, the responses given thereto and the council’s representations, were then placed before the provincial executive when it made its decision on 8 April. On that date it was decided to dissolve the council and to appoint an administrator to conduct the functions of the council until a new council was elected. This decision was communicated to the council on 16 April.

 

[6]          On the following day a notice was published in the provincial gazette. It reads:

“I, TOKOZILE XASA, Member of the Executive Council responsible for Local Government and Traditional Affairs in the Eastern Cape Province, duly authorized thereto by the Provincial Executive Council of the Eastern Cape, hereby give notice of the dissolution of the Municipal Council of the Mnquma Local Municpality in terms of section 139(1)(c) of the Constitution of the Republic of South Africa (“the Constitution”).

 

I hereby appoint THANDOLWAKHE TUBANE as administrator of the Mnquma Local Municipality to act until a newly elected Municipal Council has been declared elected. The administrator is hereby vested with all appropriate powers to ensure the fulfilment of the obligations of the Mnquma Local Municipality in terms of the Constitution and legislation.

 

In terms of section 139(3)(b) of the Constitution the dissolution will take effect 14 days from the date of receipt of the notice by the Council unless set aside by the Cabinet member responsible for Local Government affairs or the National Council of Provinces before the date.”

 

Notice of the decision to dissolve the Council was thereafter given to the National Minister, the Provincial Legislature and the National Council of Provinces.

[7]            On 30 April the present application was launched. In the notice of motion the following relief was inter alia sought:

“2.      That a rule nisi be issued in terms of which the First, Second and Third Respondents are called upon to appear before the above Honourable Court at a time and date to be determined by the Honourable Court to show cause, if any, why the following order should not be made final:

2.1      Interdicting   and   restraining  the First, Second   and  Third Respondents, their officials and any other person(s) purporting to act on their behalf, from interfering with, impeding or otherwise compromising the First Applicant’s ability or right to exercise its constitutional and statutory powers and to perform its functions pending the outcome of the review application  which commences herewith.

2.2                  Interdicting and restraining  the   aforesaid  Respondents from intervening in the First Applicant’s affairs in terms of section 139(1)(c) of the Constitution and, in particular, from dissolving the First Applicant and   appointing  an administrator in its  stead  until   a  newly   elected Municipal Council has  been  declared  elected, pending the outcome of the review application which commences herewith.

 

2.3      Suspending the effect of the Second Respondent’s letter of 16 April 2009 referred to  in the founding affidavit in which she gives notice of the Municipal Council’s dissolution in terms of section 139(1)(c) of the   Constitution, pending the outcome of the review application which commences herewith.

 

3.  Reviewing  and  setting aside the Third Respondent’s  attempt to dissolve   

the First Applicant in terms of section 139(1)(c) of the Constitution and to

appoint an administrator to replace it.”

 

[8]            At the first hearing of the matter on 8 May the parties agreed that the matter was to be argued “on a final basis on 15 May” and that “The Second, Third and Seventh Respondents undertake, pending the conclusion of the hearing on Friday 15th May 2009, not in any way to intervene in the conduct of Local Government by the First Applicant. (If need be, it remains open to the Applicants to seek appropriate interim relief arising from the hearing).” This agreement was made an order of Court and the matter was postponed to 15 May. At the hearing of the matter, the same undertaking was made pending the delivery of judgment by this Court.

 

The Parties

 

[9]            The first applicant is the Mnquma Local Municipality (the Mnquma Municipality). It is, a category B municipality as envisaged in section 155(1) of the Constitution, namely a municipality that shares municipal executive and legislative authority with a category C municipality within whose area it falls.[4]

 

[10]      The second applicant is the mayor of the Mnquma Municipality, who is said to also bring this application in his personal capacity as a ratepayer and a registered voter who resides within the municipal area of the first applicant. The reason for this is explained in the founding affidavit as being the fact that the second respondent on a previous occasion in litigation involving an attempt to dissolve the municipal council of the Mnquma municipality took the view that because the municipal council was dissolved, it did not have the capacity to institute legal proceedings. At the hearing of this matter counsel for the respondents informed the Court that it is not an issue which they wish to raise or pursue in their proceedings.

 

[11]        The first respondent is the Premier of the Eastern Cape Province (the Premier) in whom the executive authority of the provincial government vests by virtue of the provisions of section 125(7) of the Constitution. He exercises these powers together with the members of the executive council of the province. This council is cited as the third respondent and is the relevant functionary in terms of section 139 of the Constitution of the Republic of South Africa, 1996 (the Constitution). Members of the executive council are appointed by the Premier who also assigns to them their powers and functions.[5] The member of the executive council tasked or entrusted with local government affairs is the second respondent (the MEC).

 

[12]      The fourth respondent is the National Council of Provinces. Its interest in these proceedings arises from the provisions of section 139 (3)(a)(ii) of the Constitution. That section requires the provincial executive to immediately submit a written notice of the dissolution of a municipal council to the Council. For the same reason the applicants have also cited the National Cabinet Minister for Local Government and the Provincial Legislature of the Eastern Cape Province as the fifth and sixth respondents respectively. The seventh respondent is the person who had been appointed as an administrator of the Mnquma Municipality until such time as elections had been held and a new municipal council declared elected as envisaged in section 139 of the Constitution.

 

[13]      The application is opposed by the first, second and third respondents. (the respondents.)

 

 The Relevant Legislative Provisions

[14]      The decision to dissolve the council of the Mnquma Municipality was taken in terms of section 139 (1) of the Constitution. It reads as follows:

“When a municipality cannot or does not fulfil an executive obligation in terms of the 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 elected, if exceptional circumstances warrant such a step.”

 

[15]        Section 139 was amended by the Constitution of the Republic of South Africa Second Amendment Act 3 of 2003 to the extent that it was substituted with a new section consisting of eight sub-sections as opposed to three as before. Relevant for purposes of the present proceedings is that the term “executive” obligation in sub-section (1) was extended to include executive obligations in terms of the Constitution as opposed to only in terms of legislation. In addition, the word “and” linking paragraphs (a) and (b) was deleted. The most significant amendment was the addition of paragraph (c). As opposed to the word “and”, it is linked to the two preceding paragraphs by the conjunctive “or”. Other important additions were sub-sections (4) and (5). As in the case of paragraph (c) these sub-sections anticipate the dissolution of a municipal council in certain circumstances. Finally the word “supervision” in the heading to section 139 was amended to read “intervention”.

With one exception[6], I have not been referred to any reported decision where sub-section (1) formed the subject matter of the dispute. As will appear more clearly from the submissions made, the meaning to be attributed to the wording of the sub-section is central to a determination of the validity of the decision to dissolve the Mnquma municipal council. It is evident from a reading of sub-section (1) as amended (to be referred to as sub-section (1)) that it deals with a failure by a municipality to fulfil an “executive obligation”. By reason of such a failure the provincial executive is empowered to take appropriate steps to ensure the fulfilment of the obligation. The sub-section falls to be divided into three parts: firstly, a failure to fulfil an executive obligation; secondly, a discretionary power to intervene; and thirdly, the taking of appropriate steps, which steps include the issuing of a directive, the assumption of responsibility for the relevant obligation, or the dissolution of the council. In the event of intervention taking the form of dissolution of the council, there is the added aspect of exceptional circumstances envisaged in paragraph (c).

 

Preliminary Issues

[16]         The respondents raised a number of points in limine that must be dealt with before proceeding to the issues raised on the merits of the application and the submissions made in respect thereof on behalf of the parties. The issues arising therefrom are the following:

(a)           the authority of the firm of attorneys of record to act on behalf of the applicants;

the authority of first applicant’s legal adviser and of the second applicant to institute the proceedings on behalf of the first applicant;

(b)            the locus standi of the second applicant to also bring the application in his personal capacity; and

(c)           whether the exercise of the provincial executive of its power to dissolve the municipal council constitutes executive action and is consequently not reviewable under the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and Rule 53 of the Uniform Rules of Court (the Rules).

 

[17]        In furtherance of these issues notices in terms of Rules 7[7] and 35(12)[8] were filed by the respondents requesting the applicants to produce: (a) a power of attorney authorising the applicants’ attorneys of record to act on behalf the municipal council; (b) a general delegation to represent the municipal council in the application, and (c), a resolution of the municipal council recording its decision to bring the application.

 

[18]      In response to the Rule 7 notice the applicants filed powers of attorney wherein the legal adviser and the Municipal Manager in their respective capacities, and the second applicant in his personal capacity, confirmed their instructions to the firm of attorneys concerned. As a consequence the respondents at the hearing of the matter elected not to pursue their challenge to the authority of the applicant’s attorneys of record to represent the applicants.

 

(a) The authority of the first applicant’s office bearers to institute the proceedings on its behalf

[19]        The application was instituted on behalf of the municipality by its legal adviser and the second applicant in his capacity as its mayor. It is alleged by them in the founding affidavit filed in support of the application that they “have resolved to bring the current application on behalf of the Mnquma Municipality by virtue of the delegated authority vested” in them. In response to the respondents’ challenge to their authority documentation was put up showing a delegation by the municipal council to (i) its Municipal Manager to “… institute, defend, compound and/or settle any Criminal, Labour or Civil matter by or against Council, and to settle any other proceedings by or against Council whether in or out of Court, only in cases where the Legal Advisor refuses to exercise his power, or where the Legal Advisor is not available” and (ii), to its executive mayor to “deal with legal actions and claims on behalf of the Council, including prosecutions of a routine nature, institution of ejectment proceedings, civil collections and proceedings in the Industrial Court”. The respondents’ submission is that despite this delegation, the council, as an artificial legal persona, is still required to take a valid decision whether or not to litigate at all.[9]

 

[20]        In terms of section 2 of the Municipal Systems Act a municipality is an organ of state and has a separate legal personality. It must be accepted that any proceedings instituted by or on behalf of a municipality must be authorised by its council. It is tasked by section 160 (1) of the Constitution to “make all decisions concerning the exercise of all the powers and the performance of all the functions of the municipality”.[10] This is usually done by way of the adoption of a resolution to that effect. However, as in the case of all other artificial legal personae, there is no reason why it should be required to convene a council meeting on each and every occasion that it wishes to institute legal proceedings. It may instead, as in the present matter, choose to delegate its authority to do so to other persons. In dealing with the representation of companies in legal proceedings the Court in Louw v WP Koöperasie Bpk[11] referred with approval to the following passage in Joubert’s The Law of South Africa:

 

“Almost invariably the board of directors has the power to authorise the participation of the company in litigation. This does not mean that each and every law suit must be specifically authorised by a resolution of the board. It would be absurd if the directors were required to summon a meeting whenever the company wished, for instance, to take action for the recovery of a trade debt. Thus it is common practice for boards to delegate authority to other persons, for instance the managing director, the secretary, a manager or other officer of the company”.[12]

 

[21]        The delegation of, what is termed, “appropriate” powers by a municipal council to other political structures, political office bearers, councillors and staff members is also authorised by section 59(1) of the Municipal Systems Act. Further, in terms of section 56 (3)(f) of the Local Government: Municipal Structures Act 117 of 1998 (the Structures Act), the executive manager of a municipality is tasked with the performance of such powers as may have been delegated to him by the council. Section 60(3) of the same Act requires the mayor to exercise such powers and functions that have been designated to him together with members of the mayoral committee.

 

[22]        It was not suggested on behalf of the respondents that the delegation of the authority to institute legal proceedings on behalf of the municipality was not authorised by the relevant provisions in any of the enactments dealing with the powers and functions of local government. On the evidence placed before me and in the absence of anything to the contrary,[13] I am satisfied that the office bearers concerned had authority to initiate proceedings on behalf of the municipality and that the objection to the standing of the municipality should therefore fail.

 

(b) The locus standi of the second applicant

[23]        The objection raised to the standing of the second applicant is based on his election to also seek the relief claimed in his capacity as a “ratepayer” and a “registered voter”. The contention is that the second applicant only has an indirect interest in the proceedings and that as a private litigant he is not prejudiced by what is purely a temporary remedial measure. It is rather, so the submission goes, the municipal council as a body and/or each of its members in that capacity that are most closely affected by the decision.

 

[24]        In my view the objections and the submissions made in support thereof lose sight of two aspects: The first is that in a municipal government that has a mayoral executive system as provided in the Structures Act, the executive leadership of the municipality is vested in the executive mayor.[14] The mayor is however also a councillor. The reason for this is the fact that he is, in terms of section 55(1) of the Structures Act, elected from among the members of the municipal council. Secondly, the term of office of the mayor ends with that of the council. He accordingly suffers the same prejudice as any other member of the council. It is accordingly not correct to draw the distinction which the respondents sought to do.

 

[25]        Further, as will appear more clearly when I deal with the next preliminary issue, the applicants’ challenge to the validity of the decision to dissolve the municipal council raises a constitutional issue based on the doctrine of the rule of law. The second applicant is not only the mayor and a councillor, but he is also as a member of the community whom the Mnquma Municipality serves. According to section 2(c) of the Systems Act a municipality functions in its area in accordance with “the political, statutory and other relationships between its political structures, political office bearers and administration and its community”. This Act also encourages community participation and involvement.[15] Community participation in local government affairs, including the election of office bearers, gives expression, as I will indicate later in this judgment, to the democratic principles and values of our Constitution and the political rights of the individual entrenched in section 19 of the Constitution. In this context it is in my view appropriate to rather adopt a broader approach to standing as contemplated in section 38 of the Constitution. I am accordingly satisfied that the second applicant has locus standi in his personal capacity and that the preliminary objection in this regard should be dismissed.

 

(c) No judicial review of administration action

[26]      The respondents’ complaint under this heading relates to the nature of the relief claimed by the applicants in these proceedings and the procedure adopted in doing so. In their notice of motion the applicants asked that the decision of the provincial executive to dissolve the council should be reviewed and set aside. It is common cause that by virtue of the provisions of PAJA the province’s exercise of its constitutional powers in terms of sub-section (1) constitutes executive action as opposed to administrative action. In terms of section 1(bb) thereof the executive powers or functions of the provincial executive referred to in section 139 are pertinently excluded from the definition of what constitutes administrative action. Consequently, the decision to intervene in the affairs of a municipality in terms of section 139(1) is not justiciable in the sense of being susceptible to review. The respondents’ submission in this regard is that the procedural rules provided in rule 53 do not apply to anything other than administrative action. It was submitted that the applicants had misconceived their remedy and that the only competent relief available to them would have been a declaration of invalidity in terms of section 172(1)(a) of the Constitution. This section reads as follows:

“(1) When deciding a constitutional matter within its power, a court –

(a)            must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency; and may make any order that is just and equitable, including –

(i)              an order limiting the retrospective effect of the declaration of invalidity; and an order suspending the declaration of invalidity for any period and on any conditions, to allow the competent authority to correct the defect.”

 

[27]      The relationship between the individual and public bodies, and the relationship between public bodies such as central and local government, is governed by the principles of public law. Under the common law the courts have developed a body of principles that ensure that public bodies do not exceed or abuse their powers and that they perform their duties. The primary method by which a court exercises its supervisory jurisdiction over public bodies is by way of judicial review. The right to administrative action that is subject to judicial review has now been entrenched in section 33 of the Constitution and was given effect to by the provisions of PAJA. The procedural rules applicable to applications for judicial review are contained in Rule 53 of the Uniform Rules of Court.

 

[28]        Under our new constitutional dispensation the relationship between the individual and public bodies and between public bodies inter se is now also informed by the Constitution. It binds all spheres of government, which are constrained by the principal of legality, sometimes referred to as the rule of law, which arises from the provisions of the Constitution rather than the administrative justice clause in section 33.[16] It demands that any sphere of government may not exercise any power or perform any function beyond those conferred upon them by the Constitution and that the exercise of all public power has to comply with the Constitution. It expresses the idea that the exercise of public power is only legitimate where lawful. With regard to the content of the principle of legality, the Constitutional Court in Fedsure Life Assurance v Greater Metropolitan Council[17] held that the principle of legality implied that an entity exercising public power had to act within the powers lawfully conferred on it. In President of the Republic of South Africa v South African Rugby Football Union[18] it required the holder of power to act in good faith and not to misconstrue his or her powers. In Pharmaceutical Manufacturers Association of South Africa: In Re Ex Parte President of the Republic of South Africa[19], the same Court held that the principle of legality demanded that the exercise of public power should not be arbitrary or irrational. This included the requirement that the decision must be rationally related to the purpose for which the power was given “… otherwise they are in effect arbitrary and inconsistent with this requirement. It follows that in order to pass constitutional scrutiny the exercise of public power by the Executive and other functionaries must, at least comply with this requirement. If it does not, it falls short of the standards determined by our Constitution for such action.”[20]

 

[29]        The constitutional principle of legality is of application even when the action in question is an exercise of public power that does not qualify as administrative action in terms of the right to administrative justice. Legality thus provides a remedy when the action in question is not subject to review in terms of PAJA but nonetheless constitutes action taken in pursuance of public power. It is clear from what has been stated to fall within the ambit of the principle of legality that it overlaps with the principles that are ordinarily applied to the right to administrative justice in section 33 of the Constitution. The application of the principle has in fact been referred to by some as being similar to a review that takes place on limited grounds.[21]

 

[30]      Section 172 of the Constitution referred to by the respondents provides a remedy to a failure to comply with the constitutional imperative of legality. An appropriate remedy is a declaration of invalidity. There is no specific procedure which is prescribed in the Constitution for the enforcement of a remedy as provided for in section 172. It may be enforced either by way of action or by way of motion proceedings. As in all other cases, the decision as to which procedure to follow will be informed by the facts and circumstances of each particular case. In most instances however motion proceedings may prove to be appropriate.

 

[31]      I may add  that none of the cases referred to in paragraph [30] above which deal with the principle of legality include any of the requirements relating to procedural fairness as part of the content of the said principle. This may suggest that it does not extend to procedural requirements such as the audi alteram partem principle.[22] The respondents contended that by reason of the fact that the exercise of the power to dissolve a municipal council does not constitute administrative action as defined in PAJA, there was no duty on the respondents to give the municipality prior notice thereof. However, as stated by Hoexter,[23] the principle of legality:

“… 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 legality makes the same demands as regular administrative law.”[24]

 

 

[32]        That the application of the principle of legality in the context of the provisions of section 139(1) may also demand procedural fairness is in my view not without merit. As I shall attempt to indicate when I deal with the constitutional context of sub-section (1), the power to dissolve a municipal council encroaches on the autonomy of the sphere of local government. Its effect is also prejudicial to the individual members of the council as they are in most instances removed from their positions against their will with adverse financial implications.[25] In addition, section 139, as I will show when I deal with the interpretation of sub-section (1), requires the objective determination of certain precautions before it may be invoked. Accordingly, it may be argued that the relevant authority cannot do so without also receiving evidence from the council itself. However, as the matter can be disposed of on other grounds I shall refrain from making any finding in this regard.

 

[33]        The question is in essence whether the applicant should be non-suited for making use of a procedure designed for the exercise by the High Court of its supervisory jurisdiction over the proceedings and decisions of bodies or persons charged with the performance of administrative acts and duties. The overriding question in this regard is in my view whether the proceedings constitute an abuse of the process of Court. In the present matter an application raises issues of general public importance and it has not been suggested that the respondents had been unjustly or unfairly treated or were in any way prejudiced by the applicants having adopted an incorrect procedure. As indicated, the grounds for contesting the legality of the exercise of public power overlap with the usual grounds of review and a procedure similar to that for the review of administrative action is equally conducive to an effective ventilation of the issues that may arise in proceedings founded on the principle of legality. The principle of legality has been pertinently raised by the applicants on the papers and the grounds upon which the applicants rely have been fully raised and ventilated. For these reasons, notwithstanding any procedural defect that may exist, I am of the view that some flexibility is necessary in the present matter.

 

The principal submissions made on behalf of the parties

[34]        Mr JC Heunis SC appeared, with Mr Osborne and Ms Ferreira, on behalf of the applicants. The applicants’ case largely revolves around the meaning and ambit of sub-section (1). It is in essence that the authority of a provincial executive to act in terms of sub-section (1) is subject to the existence of certain facts or the fulfilment of certain conditions, and that the exercise of such authority in the absence of those facts or without fulfilment of those conditions would render the provincial executive without jurisdiction and as a consequence the decision to intervene would be ultra vires. In their heads of argument and at the hearing of the matter counsel for the applicants focused on the first and third parts of sub-section (1). With regard to the first part thereof, two submissions were made: the first was that since the sub-section is framed in the present tense, it is concerned with an ongoing failure as opposed to a past failure to fulfil an executive obligation. Secondly, the term “executive obligation” has a very specific meaning and must be limited to matters concerning the formulation of policy as opposed to matters such as the delivery of services which would constitute administrative action.

 

[35]         It was further submitted that, having regard to the legislative scheme governing provincial and local government relations, which include the provisions of and the remedies provided in the Municipal Finance Management Act and the Municipal Systems Act, sub-section (1) envisages an incremental series of steps. Accordingly, more intrusive measures, such as the dissolution of a council, are only justified by the manifest failure of the previous intervention. The final submission was that the term “exceptional circumstances” in paragraph (c) must be interpreted restrictively to mean such circumstances that are unusual and would exist if the form of intervention as envisaged in paragraphs (a) and (b) had been unsuccessful due to an unwillingness on the part of the municipality to resolve matters.

 

[36]        Mr J Gauntlett SC, with Mr F Pelser, represented the respondents at the hearing of the application. The submissions made on behalf of the respondents were that the applicants’ interpretation of the jurisdictional facts in sub-section (1) was flawed in that no, what was referred to as a “bright line” distinction, can be drawn between executive and administrative competencies in the context of sub-section (1). It was inter alia contended that the failure of a municipal council to comply with constitutional imperatives or statutory obligations substantially entails executive action. It was argued that while it may be true that it is a feature of administrative action that it does not extend to the formulation of policy or the initiation of legislation by the executive it does not follow conversely that action that extends to the implementation of legislation is per se exclusively administrative in nature.

 

[37]         In response to the applicant’s submissions dealing with the second part of sub-section (1), it was submitted that the construction given thereto by the applicants amounted to the imposition of a “less drastic step” requirement. It was argued that the sub-section must be interpreted with reference to its clear wording and that to give such an interpretation to sub-section (1) would be to inject a requirement into it that simply does not exist.

 

The Constitutional Context

 

[38]      Before examining the provisions of sub-section (1) it is necessary to consider its significance in the scheme of the Constitution. Section 139, as is the position with most of the provisions of the Constitution, cannot be read in isolation but has to be viewed against the background of the constitutional framework which it forms part of. Chapters 3, 5, 6 and 7 of the Constitution are of particular relevance to the present enquiry. These chapters establish a number of, what may be termed, constitutional features or principles that either instruct or inform the manner in which the individual sections that form part thereof are to be interpreted.

 

[39]        Central to this is the fact that Chapters 3 and 5 to 7 provide for a new constitutional dispensation where government authority has been divided amongst three levels of government. Section 40 divides the government into national, provincial and local spheres of government which are distinctive, interdependent and interrelated. The three spheres are obliged to respect the constitutional status, institutions, powers and functions of government in the other spheres,[26] and must exercise their powers and perform their functions in a manner that does not encroach on their functional or institutional integrity.[27] Each has its own budget[28] and the division and allocation of revenue between the different levels is a matter for national legislation.[29]

 

[40]        On a reading of the provisions that deal with this structure of government there are in my mind four features that stand out: the first is the enhanced status of local government. Placed in historical context, local government under the new constitution dispensation enjoys a far more enhanced status compared to what was previously the position. As opposed to being “creatures of statute”, in other words, owing their existence to and deriving their powers from provincial ordinances, municipalities now derive their existence and powers directly from the Constitution.[30] Local government is therefore no longer regarded as a functional area of competence of the provinces. It is a distinctive sphere of government which is “… suggestive of an equality as between the concepts of national, provincial, and local governmental structures, as opposed to the more traditional hierarchical levels of power and importance.”[31] The autonomous nature of municipalities is underlined by section 151. It provides that the executive and legislative authority of a municipality is vested in the Municipal council and it has the right to govern, on its own initiative, the local government affairs of its community.[32] In terms of sub-section (4) of section 151 the national or provincial government may not “compromise or impede a municipality’s ability or right to exercise its powers or perform its functions.” As opposed to only being a service delivery agent, municipalities are now also tasked with developmental duties.[33]

 

[41]        A second aspect is that, while it provides for a governmental structure wherein each sphere of government has its own distinctive status, powers and functions, the constitutional framework establishes a relationship between the different branches of government based on co-operation, which is aimed at the advancement of inter-governmental participation and support. All the spheres of government are tasked to observe the principle of co-operative government and must conduct their activities within the parameters of Chapter 3 of the Constitution.[34] In this context section 155 (6)(b) places a duty on each provincial government to support local governments in their provinces and further to promote the developmental capacity of local governments so as to enable them to perform their functions and duties. Section 154(1) in turn obliges the national and provincial governments to support and strengthen, by legislative and other means, the capacity of municipalities to manage their own affairs and to exercise and perform their functions. The duty to provide support has been extended by the different enactments dealing with local government.[35]

 

[42]        Thirdly, although the constitutional framework seeks to realise a local government structure that is a distinctive and autonomous sphere of government, it is important to recognise that it is not without limitations. Municipalities can perform only such powers and functions that they are legally permitted to perform. Section 151(3) of the Constitution to this extent provides that the right of municipalities to govern is “subject to national and provincial legislation”. The parameters of legislative oversight is determined by the qualification that such legislation is limited to what is provided for in the Constitution. In other words, the areas of legislative competence of national and provincial government in this regard are determined by the Constitution itself.

 

[43]        A limitation that is important in the context of this judgment arises from the concept of co-operative government. Co-operative government not only relates to the provision of support and assistance to local governments, but also involves an aspect of supervision. Section 155(6) of the Constitution in fact pertinently provides that a provincial government must by legislative or other measures provide, not only for the support, but also for the monitoring of local government.[36] In terms of sub-section (7) both the national and provincial governments have legislative and executive authority to “see to the effective performance by municipalities of their functions…” This provision underlines the fact that the autonomy of municipalities is relative. The duty to perform a monitoring function is accompanied by the right to take corrective measures. Intervention is authorised by the subject matter of this judgment, namely section 139 of the Constitution. This, as stated by the Constitutional Court in Ex Parte Chairperson of the Constitutional Assembly: In Re Certification of the Amended Text of the Constitution of the Republic of South Africa 1996 (the Second Certification judgment)[37] “… is conducive to effective public administration”, and that in the constitutional scheme as embodied in the aforementioned chapters, the provincial executive “… is fully entitled, if not obliged, to do what is necessary to ensure that the Constitution and legislation consistent with the Constitution are adhered to.”[38]

 

[44]        A fourth important feature that arises from the structure of government entrenched in section 40 of the Constitution is that it provides a forum for local community participation in the affairs of all levels of government, including local government level. By establishing a local government structure that is distinctive from the other spheres of government, and whose members are democratically elected, it entrenches democracy from the bottom up by providing for, what has been termed, “grass-roots democracy”.[39] Members of a municipal council are now elected by the members of the community which they serve. The elected council is a deliberative assembly with legislative and executive powers expressing the wishes of its constituency. This is in line with the democratisation of our country by the establishment of a constitutional state based on democratic principles and values. The democratic government that is contemplated is a participatory democracy.[40] The preamble of the Constitution declares that it lays “the foundation for a democratic and open society”. Section 1 of the Constitution, which establishes the founding values of the State, includes as part of those values “a multi-party system of democratic government, to ensure accountability, responsiveness and openness”.[41]

 

[45]        Flowing from the fact that the structure of local government allows for community participation based on the principle of democracy is the feature that local government is, as in the case of the other two spheres of government, also part of the political structure of government. Participation in this level of government takes place in a democratic manner by the exercise of the political rights entrenched in section 19 of the Constitution.[42] Community members elect their own representatives on a party political basis and according to the ideology of the party the candidates represent. Local government therefore also creates a forum for the democratic representation of its electorate. That being so, deference must be shown to the choices made by community members in the election of representatives. Added to this is that a council that does not fulfil its functions or the expectations of the electorate should be removed by the normal democratic processes. A voter can be expected to “suffer” his vote for the duration of the term for which the representatives have been elected.

 

[46]        To summarise, local government is a “… sphere of government that is profoundly democratic, enjoys a measure of self-government, is mandated to be developmental and functions in co-operation with and under the supervision of the national and provincial spheres of government.”[43]

 

The Scope and Meaning of Section 139(1)

(a) “When a municipality cannot or does not fulfil an executive obligation”

[47]      It is clear from a reading of the first part of sub-section (1) that the authority or power of the provincial executive to intervene in a manner as provided for therein is subject to the existence of the fact that a municipality “cannot or does not fulfil an executive obligation in terms of the Constitution or legislation”. In the context of sub-section (1), it constitutes a statutory precondition or jurisdictional fact, the existence of which is a necessary prerequisite to the exercise by the relevant provincial executive of its statutory power to intervene.[44] What a jurisdictional fact is was dealt with authoritatively by Corbett J in South African Defence and Aid Fund and Another v Minister of Justice:[45]

“Upon a proper construction of the legislation concerned, a jurisdictional fact may fall into one or other of two broad categories. It may consist of a fact, or state of affairs, which, objectively speaking, must have existed before the statutory power could validly be exercised. In such a case, the objective existence of the jurisdictional fact as a prelude to the exercise of that power in a particular case is justiciable in a Court of law. If the Court finds that objectively the fact did not exist, it may then declare invalid the purported exercise of the power (see eg. Kellerman v Minister of Interior, 1945 TPD 179; Tefu v Minister of Justice and Another, 1953 (2) SA 61 (T)). On the other hand, it may fall into the category comprised by instances where the statute itself has entrusted to the repository of the power the sole and exclusive function of determining whether in its opinion the pre-requisite fact, or state of affairs, existed prior to the exercise of the power. In that event, the jurisdictional fact is, in truth, not whether the prescribed fact, or state of affairs, existed in an objective sense but whether, subjectively speaking, the repository of the power had decided that it did. In cases falling into this category the objective existence of the fact, or state of affairs, is not justiciable in a Court of law. The Court can interfere and declare the exercise of the power invalid on the ground of a non-observance of the jurisdictional fact only where it is shown that the repository of the power, in deciding that the pre-requisite fact or state of affairs existed, acted mala fide or from ulterior motive or failed to apply his mind to the matter. (See eg Minister of the Interior v Bechler and Others, supra; African Commercial and Distributive Workers’ Union v Schoeman, NO and Another, 1951 (4) SA 266 (T) R v Sachs, 1953 (1) SA 392 (AD)).”

 

[48]        The existence of the jurisdictional facts in sub-section (1) is not left to the discretion of the provincial executive but is an objective fact which is independently triable by a Court. Sub-section (1) does not provide that the provincial executive has the power or jurisdiction where it “is of the opinion” or it “is satisfied” of certain matters, or where certain facts “appear” to exist, in which case different considerations arise and the power of the Court to intervene may be more limited. Accordingly, as stated by Corbett J in the The South African Defence and Aid Fund[46] case, considerations relevant to the determination of fact would apply and the duty is on the authority concerned to place sufficient information before the Court to satisfy it that the required factual position did in fact exist. It is therefore open to a Court to determine for itself whether the jurisdictional fact concerned existed, and it may intervene if its conclusion differs from that of the provincial executive.

 

[49]        With regard to the words “cannot or does not fulfil” in sub-section (1), counsel for the applicant referred me to the decision in City of Cape Town v Premier, Western Cape and Others[47] where Swain J said the following:

 

“This section is concerned with an omission or an inaction by the municipality and not positive misconduct. It is also framed in the present tense, being concerned with an ongoing failure and not a past failure. Intervention would not be appropriate where a past omission had already ceased.”[48]

 

In the context of section 100 of the Constitution, the counterpart of section 139, the Constitutional Court in the First Certification judgment stated that the section serves the limited purpose of enabling the national government to take appropriate executive action in circumstances where this is required because a provincial government is “unable or unwilling” to do so itself.[49]

 

[50]        Given their ordinary meaning the words used in sub-section (1) in my view relate to two situations; on the one hand the inability to fulfil an executive obligation, and on the other, the failure to do so. The inability to fulfil an executive obligation should in my view not be unduly limited but should be interpreted so as to include the inability to effectively fulfil an executive obligation. It should accordingly include the situation where a municipality attempted to perform an executive obligation but was unsuccessful. To hold otherwise would defeat the object of sub-section (1). I however do not find it necessary to make any positive finding in this regard as it did not, in the context of the present matter, arise as one of the issues that must be decided.

 

[51]        What was however pertinently raised in argument is that when the provisions of sub-section (1) are invoked, a provincial executive cannot place reliance on an inability or a failure that may have occurred in the past but which has since been rectified or complied with. In support of this construction counsel for the applicants placed reliance on what was said by Swain J in the City of Cape Town[50] judgment quoted earlier. Counsel for the respondents did not attempt to argue otherwise.

 

[52]        More problematic is the requirement that the failure must relate to an “executive obligation”. As to the meaning that should be attributed to the term, counsel for the respective parties expressed different opinions. It was submitted on behalf of the applicants that a restrictive interpretation should be given to the words in the sub-section. It was argued that it does not extend to the implementation of legislation and to matters such as the delivery of services but that it is limited to matter such as the development of policy and the introduction of by-laws. In support of this submission counsel placed reliance on the distinction that has been drawn in the case law between administrative action and executive action. The contention essentially is that the meaning to be attributed to the words “executive obligation” must be consistent with what is understood to constitute “executive action”.

 

[53]        Counsel for the applicants placed reliance on two reported decisions. In the first, a decision of the Constitutional Court in President of the Republic of South Africa and Others v South African Rugby Football Union and Others,[51] one of the issues that arose for determination was whether the appointment of a commission by the President in terms of section 84(2)(f) of the Constitution amounted to administrative action as contemplated in section 33 of the Constitution. In dealing with this issue the Court stated that one of the constitutional responsibilities of the President and cabinet members in the national sphere is to ensure the implementation of legislation.[52] This responsibility, according to the Court, was an administrative one which is justiciable, and will ordinarily constitute “administrative action” within the meaning of section 33. However, members of cabinet also have other constitutional responsibilities and, in particular, the duty to develop policy and to initiate legislation. The Court held that action taken in carrying out this responsibility cannot be construed as being administrative action for the purposes of section 33.[53]

 

[54]        It was argued on behalf of the applicants that, “executive obligation” as contemplated in sub-section (1) must be construed in a similar manner so as to be confined to the obligations of a municipal council to develop policy and to initiate by-laws. I do not agree with the submission that the distinction relied upon can be applied to “executive obligation” in sub-section (1). Precise definitions of what constitutes administrative, executive or legislative functions are not attainable as one class of function tends to shade off into another.[54] The meaning to be attributed to the words “executive” and “administrative” would vary according to the context and the purpose for which the classification is attempted. The purpose of the distinction that was made in the South African Rugby Football Union[55] case was to determine whether the decision by the President to appoint a commission was “administrative action” and therefore the subject matter of Section 33. That section deals with the entrenched right of an individual to just administrative action. Accordingly, the distinction which the applicants sought to apply to the present matter was made in the context of a determination of what administrative action is in respect of the right to fair administrative action in section 33 the Constitution.

 

[55]        The purpose of the distinction in the present matter is, in the context of sub-section (1), to determine whether a jurisdictional fact necessary for the exercise of a constitutional power has been shown to exist, as opposed to whether a decision or action taken by a public body constitutes the exercise of public power which is subject to the supervisory powers of review of the Court. The word “executive” in sub-section (1) is used in the context of an obligation that is imposed on a municipality “in terms of the Constitution or legislation”. Accordingly, what would constitute an executive obligation must be determined with reference to the Constitution and the legislation referred to. While the definitions attributed to the words “administrative” and “executive” where they are used in another context can provide some guidance, it cannot simply and without qualification be transferred to or applied to the search for the meaning of the words “executive obligation” as used in sub-section (1). The distinction and the case law dealing therewith can only be relevant to the extent permitted by the different statutory contexts and the purpose for which the distinction is sought. I am of the view that it is more appropriate to extract a contextual meaning for this term as opposed to simply applying the distinction relied upon thereto. Neither sub-section (1) nor any of the other provisions of chapter 7 pertinently specify the executive obligations of a municipal council. What is clear from a reading of section 139 as a whole is that it does not include an obligation to approve a budget or any revenue raising measures, or a material breach of an obligation to provide basic services, or to meet its financial commitments which is “as a result of a crisis in its financial affairs.” These matters are specifically dealt with in sub-sections (4) and (5). The word “executive” is defined in the as “pertaining to execution; having the function of executing; esp. as concerned with carrying out the laws, decrees, and judicial sentences; opp. To “judicial” and legislative”.[56] Generally speaking the word “executive” in the context of a democracy or a democratic state refers to bodies exercising functions of a public nature, including the head of state, cabinet or individual ministers and government departments. In this context it is to be distinguished from the legislature and the judiciary. The functions performed by the executive are the residue of functions of government after legislative and judicial functions have been taken away. These functions may “… be said to entail the formulation or application of general policy in relation to particular situations or cases, or the making or execution of individual discretionary decisions. More specifically they include the execution of law and policy, the maintenance of public order …. And the provision, regulation, financing or supervision of such services as education, public health, transport and national insurance.”[57]

 

[56]        The meaning to be accorded to this term must in my view rather be found within and against the background of the constitutional framework of the sections dealing with the different spheres of government. As stated earlier, in terms of section 40(1) the government is constituted as national, provincial and local spheres of government. At a national level the executive is headed by the President, assisted by a Deputy President and a cabinet, the members of which are appointed by the President.[58] At a provincial level the executive arm consists of the Premier and an executive council consisting of the Premier as the head of the council, and a number of members appointed by the Premier from amongst the members of the provincial legislature.[59]

 

[57]        On both a national and provincial level legislation is considered and passed by an elected legislature. In terms of sections 85 and 125 of the Constitution the “executive authority” of the central and provincial governments vests in the President and the Premiers of the Provinces respectively. This, according to the two sections, includes the authority to implement and administer legislation, to develop and implement policy, to co-ordinate the functions of state and provincial departments and to prepare and initiate legislation and perform any other executive function provided for in the Constitution or in national legislation or, in the case of a province, any other function assigned to the provincial executive.[60] This quite clearly accords with what is generally understood by the term “executive”.

 

[58]        By contrast, in chapter 7 of the Constitution, which deals with local government, there is no separation of executive and legislative functions. According to section 151 (2) both the executive and legislative authority of the municipality is vested in its council.[61] Section 43 (c) of the Constitution similarly declares the legislative authority of the local sphere of government to vest in municipal councils[62]. By reason of the fact that a municipal council exercises both executive and legislative authority, both of these aspects are dealt with in one section, namely section 156 under the heading “Powers and Functions of Municipalities”. The said section reads as follows:

 

“(1)     A municipality has executive authority in respect of, and has the right to administer –

(a)            the local government matters listed in  Part B of Schedule 4 and Part B of Schedule 5; and

(b)       any other matter assigned to it by national or provincial legislation.

(2)       A municipality may make and administer by-laws for the effective administration of the matters which it has the right to administer.

(3)       Subject to section 151(4), a by-law that conflicts with national or provincial legislation is invalid. If there is a conflict between a by-law and national or provincial legislation that is inoperative because of a conflict referred to in section 149, the  by-law must be regarded as valid for as long as that legislation is inoperative.

(4)       The national government and provincial governments must assign to a municipality, by agreement and subject to any conditions, the administration of a matter listed in Part A of Schedule 4 or Part A of Schedule 5 which necessarily relates to local government, if –

(a)       that matter would most effectively be administered locally; and

(b)            the municipality has the capacity to administer it.

(5)       A municipality has  the  right  to  exercise any  power concerning a

matter reasonably necessary for, or incidental to, the effective performance of its functions”.

 

[59]      The mandate of local governments is to provide government at a local level. At this level of government there exists very little scope for matters such as the formulation of policy and other executive functions that are performed at a higher level of government. The execution of its mandate is concerned rather with the delivery of basic services and the improvement of the well being of the members of the community within

its area as is apparent from what is termed “local government matters” in Part B of Schedule 4 and Part B of schedule 5 in section 156 of the Constitution.[63] In Democratic Alliance v Masondo NO and Another[64] O’ Regan J in her dissenting judgment explained the difference between local government and the other spheres of government with reference to the functions of local government. According to her “They are not the high affairs of state – defence, foreign affairs, justice and security, but matters concerning delivery of services and facilities to local communities: power, water, waste management, parks and recreation and decisions concerning the development and planning of the municipal area. Thus executive decisions of municipal councils will ordinarily be decisions which have direct effect on the lives and opportunities of those living in these areas.”[65]

 

[60]        That the obligation as contemplated in sub-section (1) is also concerned with matters such as the task of providing services is evident from the provisions of the sub-section itself. Paragraph (b)(i) thereof authorises the provincial executive to assume responsibility for the executive obligation of a municipality to the extent that it may be necessary to inter alia “meet established minimum standards for the rendering of a service”. Intervention in this form is clearly aimed at ensuring that the rendering of services with which a municipality has been tasked, is rendered at a certain standard. Section 139 therefore clearly envisages something more than simply the development of policy and initiation of legislation as suggested.

 

[61]        On a reading of sub-section (1), the type of failures that empower the provincial executive to intervene are limited by of sub-section itself. It must be acknowledged that the use of the term “executive obligation” was intentional. In the context of the autonomous position occupied by local government in the constitutional framework, the aim was to limit intervention to a failure to fulfil obligations that are executive in nature. The term must in my view be given a meaning consistent with the ordinary meaning attributed to it in a democratic dispensation and the executive authority of the national and provincial executives in terms of the Constitution. The obligation of local government is to provide government at a local level and to discharge the functions associated therewith. This obligation is exercised within the functional areas referred to above and extends to the obligation to, within those functional areas, implement and administer legislation in relation thereto, provide the services associated therewith, provide an administration to do so, develop policy in relation thereto and initiating by-laws to effectively govern within those functional areas. That this is consistent with what must be understood by the term “executive” is confirmed by section 11(3) of the Municipal Systems Act which reads as follows:

“A municipality exercises it is legislative or executive authority by-

(a)            developing and adopting policies, plans, strategies and programmes, including setting targets for delivery;

 promoting and undertaking development;

establishing and maintaining an administration;

administering and regulating its internal affairs and the local government affairs of the local community;

implementing applicable national and provincial legislation and its by-laws;

providing municipal services to the local community, or appointing appropriate service providers in accordance with the criteria and process set out in section 78;

monitoring and, where appropriate, regulating municipal services where those services are provided by services providers other than the municipality;

preparing, approving and implementing its budgets;

imposing and recovering rates, taxes, levies, duties, service fees and surchages on fees, including setting and implementing tariff, rates and tax and debt collection policies;

monitoring the impact and effectiveness of any services, policies, programmes or plans;

establishing and implementing performance management systems;

promoting a safe and healthy environment;

passing by-laws and taking decisions on any of the above-mentioned matters; and

doing anything else within its legislative and executive competence.”

 

Accordingly, although the ambit of the executive obligations exercised on a local government level is narrower in that it is determined and limited by the functional areas assigned to municipalities by the Constitution and legislation as envisaged in section 156(1)(a) and (b) of the Constitution, there is no reason why it should be given a wider meaning than that applicable to the other two spheres of government.

             

 

[62]        Executive obligations must not be confused with statutory obligations or duties that are aimed at ensuring the effective performance by local government of its executive obligations. In terms of section 105(7) of the Constitution both the national and provincial governments have the legislative and executive authority to see to the effective performance by municipalities of their functions in respect of the matters listed in Schedules 4 and 5, “by regulating the exercise by municipalities of their executive authority referred to in section 156(1)”. These obligations and duties are inter alia contained in legislation such as the Municipal Structures and Systems Acts. Non-compliance with a statutory obligation or duty aimed at ensuring the effective performance of executive obligations would not necessarily result in a failure to fulfil an executive obligation within the meaning referred to in the preceding paragraph. It could never have been the intention, within the framework of the system of government established by the Constitution, that the failure by a mayor to table a time schedule within the prescribed time limit,[66] or the failure to include an annual performance report in the annual report,[67] would on its own constitute an executive obligation that would empower intervention as envisaged by sub-section (1). The failure to comply with statutory provisions of this nature may rather lead to a conclusion that a municipality is failing to comply with an executive obligation such as providing an effective administration to fulfil its constitutional mandate of providing government at a local level. It is a factual question that must be determined by having regard to the conduct or the lack thereof of a municipality on which reliance is placed in any given case. I accordingly do not agree with the respondents’ submission that the term must extend to statutory obligations or duties in the enactments relied upon in the present matter.[68] I also do not agree with the suggestion that the use of the word “obligation”, as opposed to “authority”[69], indicates that the envisaged intervention is only activated by a failure to adhere to peremptory norms in legislation.[70] This argument not only once again equates a statutory obligation with an executive obligation, but the meaning to be attributed to it must rather “ultimately depend upon the proper construction of the statutory provision in question, or, in other words, upon the intention of the lawgiver as ascertained from the language, scope, and purpose of the enactment as a whole and the statutory requirement in particular…”.[71]

 

[63]        The term “executive obligation” would also exclude obligations arising from other sources such as contract. It was for these reasons rather than that it constitutes administrative as opposed to executive action, that the Court in the second decision to which counsel for the applicants referred me to, namely Member of the Executive Council for Local Government, Mpumalanga v Independent Municipal and Allied Workers Union[72] found that the statutory duty of a municipality to pay over an employee’s deducted tax to the Revenue Services, or the contractual obligation to pay bond instalments, are not executive obligations.[73]

 

(b) “The Relevant Provincial Executive may Intervene”

[64]        Once it has been established that a municipality cannot or does not fulfil an executive obligation the relevant provincial executive is given the power to intervene. The power itself is a discretionary one. The use of the word “may” is a clear indication that this is so. Accordingly, even though the jurisdictional fact exists, the provincial executive concerned is not obliged to exercise it. Further, although the exercise of the discretion by the provincial executive to intervene does not constitute administrative action as contemplated in PAJA, the validity of the decision to intervene is subject to compliance with the requirements pertaining to the principle of legality implicit in the Constitution,[74] and a relevant question is, as contended by the applicants, whether there is a rational relationship between the exercise of the power and the purpose for which it was given.[75]

 

(c) “By taking any appropriate steps … including … dissolving the Municipal council… if exceptional circumstances warrant such a step.”

[65]        The last aspect that must be considered is the form or mode of intervention once there has been a failure to fulfil an executive obligation and the provincial executive has exercised its power to intervene. The relevant portion of sub-section (1) authorises the provincial executive to take “any appropriate steps to ensure fulfilment” of the obligation “including” the issuing of a directive, assuming responsibility for the relevant obligation or dissolving the municipal council. The applicants’ once again urged the Court to adopt a restrictive approach to the interpretation of this part of the sub-section. According to the applicants, sub-section (1), as well as the Municipal Finance Management Act, provides for less intrusive measures to be taken and, in light of the constitutional imperative that the functional integrity of local government must be respected, such measures should first be implemented before the more drastic step of dissolving a municipal council is taken.

 

[66]        In support of the submissions made in this regard reliance was placed on the approach adopted by the Constitutional Court in the second certification judgment[76] in dealing with section 100(1) of the Constitution. As stated earlier, section 100(1) is the partner provision of section 139(1) and regulates the relationship between the central and provincial governments. As in the case of sub-section (1), it authorises the national executive to intervene in a province where the province concerned “cannot or does not fulfil an executive obligation in terms of the Constitution or legislation.” Save for the fact that it does not contain the equivalent of paragraph (c) of section 139(1), and that paragraphs (a) and (b) thereof are linked by the conjunctive “and”, the two sub-sections are similarly worded.

 

[67]        In dealing with an objection raised to the wording of section 100 of the amended text of the final Constitution on the ground that its formulation did not comply with the principle of separation of powers, the Constitutional Court held that the use of the word “and” in the section indicates that it deals with a process of successive steps whereby the first step is the issuing of a directive in terms of paragraph (a). “AT [amended text] 100(1) (a) and (b) deal with one process. This follows from the fact that they have not been formulated in the alternative, but are linked by the conjunction ‘and’. The issuing of a directive in terms of AT 100 (1)(a) has no consequences in itself; it only has relevance as part of a process which requires a directive to be issued before the intervention sanctioned by AT 100 (1)(b) takes place. If intervention in terms of AT 100 (1)(b) occurs, the requirements of AT 101 (2) have to be complied with. These successive steps constitute the process referred to in AT 100 (3) which may have to be regulated by legislation”.[77] Consequently, it is only after the province has failed to implement a directive that the national executive can proceed with assumption of the responsibility for the relevant obligation as envisaged in paragraph (b) of section 100 (1).

 

[68]        Counsel for the applicants placed reliance on several authors who are of the view that despite the use of the word “or”, as opposed to “and”, as the position was before the 2003 Constitutional amendment, the approach adopted by the Constitutional Court in the certification judgment to section 100 (1) must stand and should equally be applied to section 139 (1).[78] Dissolution can therefore not be a first step in what must be construed as establishing a “process”. It is the final step in a process of intervention consisting of more than one attempt to resolve the problem that may exist in a municipality. This, it was submitted, is also in accordance with section 34(3)(b) of the Structures Act, which provides that dissolution takes place if an earlier intervention was not successful.

 

[69]        In regard to the latter submission, it must be acknowledged that the Structures Act came into being prior to the constitutional amendment to sub-section (1) in 2003. Accordingly, what is contained in the said Act in this regard must be read subject to the aforementioned amendment. With regard to the first submission it is in my view an incorrect approach to the interpretation of this part of sub-section (1) to simply attribute to it a meaning similar to that given to its counterpart in section 100 at a time when paragraph (c) did not exist. I agree with counsel for the respondents that to read sub-section (1) in its present form as a process comprising a set of sequential steps would be to strain the wording of the sub-section. It must be accepted that the use of the word “or” and its insertion at the end of paragraph (b) and before paragraph (c) was deliberate. This is more appropriate and in accordance with the principle that a Constitution is a legal instrument and that when the language used is clear effect must be given to. The word “or” must therefore rather be given its ordinary meaning so as to provide for an alternative form of intervention as opposed to a step in a process.

 

[70]        The focus of the enquiry should, in my view, rather be on the sub-section in its contextual setting and its present form. The first aspect that arises for consideration from its wording is that the form of intervention must be “appropriate”. What is appropriate is not left to the discretion of the provincial executive. As stated by Harms JA in Pharmaceutical Society of South Africa v Tshabalala-Msimang:[79]

 

“In this regard there is a clear break from the approach adopted in matters such as security legislation during the pre-Constitutional era. There, the jurisdictional fact was quite often the opinion of one or other functionary and, provided the functionary held the opinion, courts were rather hamstrung. Hence the jurisdictional fact is not someone’s opinion but an objective fact… Whether it is appropriate can be tested judicially. If the fee does not pass this threshold requirement, the regulation is pro tanto void because it has no legal basis or justification.”[80]

 

[71]        The word “appropriate” means “specially suitable” or “proper”. In the second certification judgment the Constitutional Court held that the reference to “appropriate steps” in section 100 (1) had to be construed in the context of the Constitution as a whole and the provision that it makes for the distribution of power between the different levels of government. It said the following:

“If regard is had to the CPs [constitutional principles] and the constitutional scheme embodied in the AT[amended text], it would not be appropriate for the National Executive to attempt to intervene in provincial affairs in a manner other than that authorised by the Constitution or by legislation enacted in accordance with the Constitution. ‘Appropriate steps’ would thus include action such as a resort to the procedures established under AT 41(2) for the promotion of intergovernmental relations and the settlement of intergovernmental disputes and the exercise of the treasury control powers under AT 216. It would not, however, include resort to means that would be inconsistent with AT chap 3, and in particular, with the obligation under AT 41 (1)(g) to exercise its powers in a manner that ‘does not encroach on the geographical, functional or institutional integrity’ of provincial governments.

 

[125] On this construction of the clause, AT 100 means-

(a)            when an obligation is not performed by a province the National Executive can intervene through taking appropriate steps;

(b)           ‘appropriate steps’ must be construed to mean steps that are appropriate in the context of the Constitution; and…”[81]

 

 

[72]        In Pharmaceutical Society of South Africa v Tshabalala-Msimang[82] case and in Hoffmann v South African Airways[83] the respective courts had to determine the meaning of the word “appropriate” in the context of “appropriate dispensing fee” and “appropriate relief”. It was held that appropriateness in the context of the Constitution imports the elements of justice and fairness and that “In determining what is appropriate one must consider the conflicting interests of all those involved and affected” and that “One is really dealing with a balancing act implicit in the right of access…”.[84] In the present context I am of the view that “appropriate steps” are to be construed as steps that are such as would be suitable in the sense that it must fit the situation. The form of intervention must accordingly address the particular circumstances of the case. This can only be determined with due regard to the nature of the executive obligation that was not fulfilled, the interests of those affected by the failure to fulfil an executive obligation, and the interests of the municipality concerned with due regard to those features that arise from the constitutional scheme as embodied in chapters 3, 5, 6 and 7 of the Constitution. It requires a balancing of the constitutional imperative to respect the integrity of local government as far as possible against the constitutional requirement of effective government. A further consideration is the purpose of the power to intervene. It is clearly designed as a corrective measure to ensure that such steps are taken that would resolve the problems that may be experienced in a particular municipality. This necessitates the question whether the form of intervention that is contemplated would be effective and commensurate with the nature and/or the extent of the failure to fulfil the obligation concerned.

 

[73]        The next aspect relevant to this part of the enquiry is the meaning that is to be attributed to the phrase “if exceptional circumstances warrant such a step” in paragraph (c). The first observation is that the existence of special circumstances is a prerequisite to the exercise of the power to dissolve a municipal council. It is a jurisdictional fact that must exist before there can be dissolution. As in the case of the two other jurisdictional facts in sub-section (1) dealt with earlier, the existence of exceptional circumstances does not depend upon the exercise of a discretion or an opinion of the provincial executive. It is an aspect that is susceptible to objective proof and is equally an issue for the decision of the Court considering the validity of action taken in terms of sub-section (1)[85]. This means that a duty rests on the provincial executive to satisfy the Court that exceptional circumstances exist.[86]

 

[74]        The term “exceptional circumstances” is not defined in the Constitution and I have not been referred to any decision where it was discussed in the context of sub-section (1). According to the applicants the said term must be restrictively interpreted and the particular circumstances used to justify the intervention must be qualitatively different in kind from the ubiquitous service delivery and other problems commonly dealt with by means of less of intrusive means of support and monitoring. Relying on Steytler,[87] and with reference to the provisions of section 34(3)(b) of the Structures Act, it was submitted that exceptional circumstances would exist if there has been failed intervention as envisaged in paragraphs (a) and (b) of sub-section (1) and such intervention was due to the unwillingness of the municipal council to resolve the problems concerned. It is evident that this construction of what constitutes exceptional circumstances for purposes of paragraph (c) is an extension of the submission that sub-section (1) provides for a process of intervention.

 

[75]        In the decision of Seatrans Maritime v Owners, MV Ais Mamas and Another[88] the Court considered the meaning of the phrase in the context of section 5 (5)(a)(iv) of the Admiralty Jurisdiction Regulation Act 105 of 1983 and concluded that “… it is neither desirable nor, indeed, possible to attempt to lay down precise rules as to what circumstances are to be regarded as exceptional and what are not. Each case must depend on its own facts.”[89] The Court dealt with the dictionary definitions of the words “exceptional” and “exception” and earlier decisions in which the phrase “exceptional circumstances” had been considered and concluded as follows:

“What does emerge from an examination of the authorities, however, seems to me to be the following:

1.               What is ordinarily contemplated by the words ‘exceptional circumstances’ is something out of the ordinary and of an unusual nature; something which is excepted in the sense that the general rule does not apply to it; something uncommon, rare or different; ‘besonder’, seldsaam, ‘uitsonderlik’, or ‘in hoë mate ongewoon’.

To be exceptional the circumstances concerned must arise out of, or be incidental to, the particular case.

Whether or not exceptional circumstances exist is not a decision which depends upon the exercise of a judicial discretion: their existence or otherwise is a matter of fact which the Court must decide accordingly.

Depending on the context in which it is used, the word ‘exceptional’ has two shades of meaning: the primary meaning is unusual or different; the secondary meaning is markedly unusual or specially different.

2.              Where, in a statute, it is directed that a fixed rule shall be departed from only under exceptional circumstances, effect will, generally speaking, best be given to the intention of the Legislature by applying a strict rather than a liberal meaning to the phrase, and by carefully examining any circumstances relied on as allegedly being exceptional.”[90]

 

 

[76]        In the context of sub-section (1) and the constitutional background sketched earlier, it seems to me that the purpose of requiring exceptional circumstances where intervention takes the form of the dissolution of the Municipal council is to ensure that no inroads are made without good reason into the autonomy of another sphere of government. The requirement of exceptional circumstances gives recognition to this aspect and the importance of the role and position of this sphere of government in the new constitutional dispensation. What is also clear from the requirement of exceptional circumstances is that it is recognised that the dissolution of the Municipal council is the more drastic and far-reaching of the three forms of intervention authorised by sub-section (1). Not only must the dissolution be an “appropriate” step to remedy the situation, it can only be resorted to if exceptional circumstances have been found to exist. By reason of these considerations I agree with applicants’ counsel that the phrase must be given a narrow rather than a wide interpretation. Accordingly, to be exceptional within the meaning of the phrase, the circumstances must be “markedly unusual or specially different.”[91]

 

[77]      In my view it would be inappropriate to attempt to give an exhaustive definition of what would constitute such circumstances and to limit it to a situation where there has been a failed intervention as envisaged in paragraphs (a) and (b) due to the unwillingness of the municipal council to resolve the problem. There may be other situations where the willingness or otherwise of a council to co-operate or to comply with a direction may not prove to be decisive of the existence of exceptional circumstances. It is undesirable to anticipate what type of situations may present themselves. Exceptional circumstances may lie in the nature of the problem that may be experienced in a municipality and the fact that any other form of intervention would not be appropriate. What constitutes exceptional circumstances should rather depend on the circumstances of each particular case. It is however a step that should not easily be resorted to and only after careful consideration has been given to the facts and circumstances of each particular case with due regard to the principles that underlie the position of local government in the constitutional framework.

 

[78]      As a general observation, it is clear from a reading of paragraph (c) in the context of sub-section (1) as a whole that the form of intervention authorised by paragraph (c) suggests that the dissolution is only appropriate if the fulfilment of an executive obligation cannot be achieved otherwise than by the dissolution of the existing council and its replacement by an administrator until such time as a new council has been elected. There are three aspects that flow from this: the first is that it presupposes, at the very least, that consideration was given to other forms of intervention that are effective and less intrusive, secondly, that there exists a causal connection between the conduct of the municipal council and the continued failure to comply with an executive obligation, and lastly, as in the case of the other two forms of intervention, the question must be asked whether the municipality would be able to fulfil its obligations after the intervention is over. In other words, as a corrective measure, would it be successful in remedying or resolving the particular problem in the municipality? Dissolution of the council and its replacement with a newly elected council would after all serve no purpose if it would not resolve the problems at hand.

 

[79]      To conclude, the purpose of section 139(1) is to enable a provincial executive to take steps that are necessary to place a municipality in a position to fulfil its executive obligations. The section has both legal and political safeguards built into it, namely, the objective determination of whether there has been a failure to fulfil an executive obligation, to intervene in a manner that is appropriate, and in the case of paragraph (c), the existence of exceptional circumstances are matters which are not left to the discretion of the provincial executive. The existence of these prerequisites are to be determined objectively and the existence thereof may be tested in a court. In addition, on a political level, the Cabinet Minister responsible for Local Government Affairs or the National Council of Provinces are empowered to terminate any form of action taken against a municipality under sub-section (1).

 

Does the decision to intervene and dissolve the Mnquma Municipality Council satisfy the principle of legality?

[80]        The information placed before the provincial executive in support of the recommendation that the Mnquma Municipal Council be dissolved and on which the decision was arrived at, is essentially contained in a letter by the MEC notifying the municipality that consideration was given to the dissolution of the council (letter of notification), the municipality’s written response to the allegations in the notification and a memorandum by the state attorney intended to “summarise and analyse” the said response (the memorandum). Because it formed the basis of the decision to intervene and to dissolve the council, the focus of the present enquiry is on those documents and their contents.

 

[81]      It was submitted on behalf of the applicants that the information contained therein and the reasons for the decision did not warrant dissolution because they:

 

“36.1   have to do largely with administrative, rather than executive, functions;

36.2         are stated in uncertain, tentative language that belies the purportedly exceptional nature of the circumstances;

are so vague and open-ended  as to preclude a meaningful response;

relate to past matters that have, in some cases, already been addressed;

relate to ubiquitous problems experienced in municipalities throughout 

                         South Africa and, particularly, in the Eastern Cape Province; and

36.3         are, in several respects, factually wrong.”

 

 

[82]        The MEC’s letter of notification deals with the matters raised therein under several headings. It lists a number of events and conduct that are said to constitute exceptional circumstances and which “suggest that a decision and notice in terms of section 139((1)(c) of the Constitution may be required.” Under a separate heading, “Institutional incapacity”, a number of reasons are mentioned which are said to demonstrate “what appears to be intractable institutional incapacity” in the municipality. A heading styled, “Further Failure to Fulfil Functions”, then follows and lists, what is referred to as, “further instances of systematic failure and incapacity on the part of the Council to fulfil its executive functions.” Under the latter heading a number of conclusions were drawn, such as that “the prevailing circumstances in the Mnquma Municipality include the existence of a compelling situation which constitutes exceptional circumstances and displays an institutional incapacity on the part of the council.”

 

[83]        In the municipality’s response the events and conduct relied upon in the letter of notification were dealt with on an item by item basis. The factual correctness of the allegations therein were disputed in some instances and in others the municipality attempted to provide clarification. These responses were dealt with in the state attorney’s memorandum assessing the correctness of the municipality’s assertions and whether they should be accepted. This assessment was then followed by a recommendation in respect of each of the matters raised with reference to the particular executive obligation that the municipality was alleged to have failed to fulfil by acting in the manner alleged. In dealing with the issue of exceptional circumstances the memorandum concluded that the “… issues analysed above are multiple and, in their cumulative effect, serious. Even if certain of them had not been established, their cumulative weight is clearly profound. The failures to perform executive obligations across a range of statutory provisions as detailed are fundamental and systemic.” It is clear from this that whereas the existence of exceptional circumstances was limited to the matters raised under that heading in the letter of notification, the recommendation in the memorandum was that exceptional circumstances were to be found in the cumulative effect of all the matters raised in the said notification. That the decision to dissolve the council was made on that basis, was confirmed by the respondents in their answering affidavit.[92]

 

[84]      The first enquiry is whether the conduct or the failures of the municipality, on which the respondents placed reliance for exercising the power to intervene, constitute a failure to fulfil an executive obligation as envisaged in sub-section (1). The approach in the memorandum to this issue was to deal with each of the failures individually. The alleged failures as framed in the memorandum are:

(i)       six mayors, instability and a lack of executive leadership;

(ii)      invalidity of council resolutions;

(iii)     no co-operation with special investigating unit;

(iv)     authorising payment to the Municipal Manager without entitlement;

(v)     reinstating of Mr Mtalo contrary to recommendation by disciplinary tribunal;

(vi)     salary allowances of councillors and staff;

(vii)    in-arrears of serving councillors;

(viii)   suspension of councillor Mbebe;

(ix)     removal from office of councillor Dyani;

(x)      arrest on charges of corruption;

(xi)     reinstatement of the Municipal Manager despite conviction by

disciplinary tribunal;

(xii)    involvement in civil litigation and criminal prosecution;

(xiii)   support grant of R5 million;

(xiv)   lack of financial management system;

(xv)    lack of adequate financial controls;

(xvi)   lack of a proper risk management strategy;

(xvii) rampant maladministration and non-adherence to municipal procedures and systems;

(xviii) report on investigation on misappropriation or fraud against employee;

(xix)   overpayment of two councillors;

(xx)    expenditure in respect of office of the speaker;

(xxi)   highly congested accumulation of litter and raw sewerage spillage contaminating potable water;

(xxii)  concerns relating to revenue management;

(xxiii) compliance with section 15(a) of the MFMA;

(xxiv) failure to submit annual financial statements;

(xxv)  failure to develop proper supply chain management policy;

(xxvi) obligations to commence with budget process;

(xxvii) no reliable data basis of indigent people exists;

(xxviii)           failure to implement an asset management policy and strategy;

(xxix) failure to communicate bank account details to the provincial treasury;

(xxx)  bank overdraft in excess of the permissible overdraft limit;

(xxxi) auditor-general’s disclaimers and adverse opinions;

(xxxii) failure to declare output VAT received for processing of Enatis transactions;

(xxxiii) municipal planning and performance of management regulations;

(xxxiv) failure to appoint a performance audit committee;

(xxxv) apparent failure to include annual performance report in annual report;

(xxxvi) preparation and submission of plan on progress towards implementation of GAAP, GAMAP and GRAP;

(xxxvii)failure by accounting officer to inform the mayor, MEC and auditor-general in writing of unauthorised, irregular or fruitless and wasteful expenditure.

 

[85]        In the memorandum each of the alleged failures were linked to a specific statutory provision that was said to constitute an executive obligation. So for example, the payment of what is alleged to be disproportionate salary allowances to councillors and staff, is stated to amount to a failure to fulfil those executive obligations in terms of sections 41(3) and 152(1) and 21 of the Constitution and section 4(2)(a), (b), (d), (f) and (g) of the Systems Act. Other provisions that have been relied upon as constituting a failure to comply with an executive obligation in the event of non-compliance thereof are sections 43 of the Systems Act and 21(1)(b), 32, 63(2)(b), 65(2)(i), 73, 74, 99(2)(b), 111, 112(1), 115, 131(1), 165(2) and 172(1)(b) of the Municipal Finance Management Act.

 

[86]        Section 152 of the Constitution deals with the objects of local government.[93] In terms of sub-section (2) thereof it is stated that a municipality must strive, within its financial and administrative capacity, to achieve the objects. A similar provision is found in section 19 of the Municipal Structures Act. These are loose statements of the rationale of local government rather than “executive obligations” and to find otherwise would in my view unduly extend the range of possible action or inaction which may constitute an executive obligation beyond what is capable of any precise determination. Such an extended meaning of “executive obligation” militates against what is intended to be a provision that is of limited application in certain specified instances.

 

[87]        The provisions of section 4(2) of the Systems Act relied upon are of a similar nature. The sub-section states that a municipal council “within the municipality’s financial and administrative capacity and having regard to practical considerations” has the duty to:

“(a)     exercise the municipality’s executive and legislative authority and use the resources of the municipality in the best interests of the local community;

  (b)    provide, without favour or prejudice, democratic and accountable government;

  (c)    ….

  (d)    strive to ensure that municipal services are provided to the local community in a financially and environmentally sustainable manner;

(e)     …

give members of the local community equitable access to the municipal services to which they are entitled;

promote and undertake development in the municipality;…”

 

 

[88]        On a reading of the provisions in the Municipal Finance Management Act it becomes clear that many of the failures relied on relate to “statutory obligations” or duties as opposed to “executive obligations”, a distinction dealt with in paragraph [65] above. So for example, sections 21 and 32 respectively deal with the budget preparation process and the recovery of unauthorised, irregular and wasteful expenditure. Sections 63, 65, 73 and 74 deal with the duties of the municipality’s accounting officer, while section 165 deals with the duties and functions of the internal audit unit of municipalities. In section 2 of this Act the object thereof is stated “to secure sound and sustainable management of the fiscal and financial affairs of municipalities.” Its aim is clearly to provide effective performance by municipalities of their functions as envisaged in section 155(7) of the Constitution, as opposed to imposing executive obligations within the meaning of that term. The provincial executive therefore quite clearly misconstrued the meaning of the term “executive obligation” in sub-section (1).

 

[89]        Assuming that the failures relied upon constitute executive obligations the second enquiry is whether there exists sufficient evidence to conclude that the municipality failed in the manner alleged by the respondent. As stated, this is an enquiry where considerations relevant to the determination of fact would apply. The applicants dealt with the failures alleged in the letter of notification in their founding affidavits and in support of their contentions they placed reliance on several documents that were annexed to the said affidavit. In seven of the thirty seven failures originally listed in the letter of notification the recommended decision to the provincial executive in the memorandum was that “no decision in terms of section 139 (1)(c) is recommended in relation to this aspect.”

 

[90]        On a reading of the documentation forming the basis for the decision to intervene a number of difficulties are apparent. The first is that the assessment of whether there was a failure to fulfil what was incorrectly perceived to be an executive obligation was in many instances dealt with on the assumption that the allegations in the letter of notification were factually correct. The approach that was adopted appears to be one where the facts were accepted unless the municipality was able to provide sufficient and convincing evidence to conclude otherwise. This is so despite the fact that many of the failures referred to in the letter of notification were stated in an uncertain or tentative manner. For example, it is stated that council resolutions have “apparently been invalid” or that “it is not apparent” that the provisions of the municipal structures have been complied with. With regard to compliance with section 21 of the Municipal Finance Management Act it is stated that “there is no evidence sufficiently indicating what steps the municipality has taken to fulfil this obligation.” As stated earlier, whether or not there is a failure to comply with an executive obligation is a factual issue that must be determined objectively. The question in each case is therefore whether there is sufficient evidence to conclude that a failure exists. The approach adopted by the provincial executive in certain of the instances was not conducive to such a factual enquiry.

 

[91]        Secondly, it is not clear from the information supplied whether some of the alleged failures relate to past, current or ongoing action or inaction on the part of the municipality. The result of this is that reliance may have been placed on failures that have been addressed. In fact, in some instances it would appear that this was indeed the case. In respect of the failure to declare output value added tax reliance is pertinently placed on past failures to justify a finding that there was a failure to comply with sections 4(2)(a) and (d) of the Systems Act and section 152 of the Constitution. With regard to the alleged failure to comply with obligations to commence with a budget process, reference is made to the fact that on available documentation there was no compliance with the provisions of section 21(1)(b) of the Municipal Finance Management Act “during previous financial years”. In respect of the current financial year, reliance was simply placed on the fact that the council did not state in its representations that it complied with its obligation in terms of the relevant section. With regard to the “apparent” failure to include an annual performance report in the annual report, it is said that while the annual report for 2008 contained performance reports the same cannot be said for the 2007 annual report. In respect of the allegation of political instability, reference is made to documents reflecting the position two years ago, namely a “Report on the Status Quo of the Mnquma Municipality following Local Government Elections”, a letter from the Municipal Manager to the Superintendent-General dated 17 October 2006, and the Municipality’s Annual Report for the year ending 30 June 2007. It would appear that these documents refer to the same “political instability” referred to in a report to the Select Committee on Local Government and Administration. This report was submitted to the Select Committee in January 2008. To make matters worse, none of these reports appear to have been included in the documents placed before the provincial executive.

 

[92]        A third difficulty is that some of the evidence relied upon simply does not justify the conclusion that has been drawn. An example of this is the allegation of political instability that resulted in a “complete lack of executive leadership”. Reliance is in this regard placed on what was said in a letter of the municipal manager that “… the recent developments in the council … signalling the beginning once again of political instability…” What these recent developments are, are not stated and it is consequently not clear upon what facts, what appears to be an opinion, is based. Reference is also made to “a series of consultations … with senior officials with knowledge of the relevant facts … establish that inherent and chronic instability prevails…” Who these officials are and what their knowledge of the facts are is not stated. This evidence clearly falls short of concluding that political instability that occurred in the past still prevails. A further important aspect in this regard is precisely what is understood by the term “political instability”. As stated earlier, municipal councillors are elected on a party political basis and as in any democratic system, what can be referred to as “politicking ” will take place and may influence the manner in which institutions operate, especially where both legislative and executive powers are vested in the same body. The effect of this is that where political instability is relied upon in support of an allegation that there is a failure to comply with an executive obligation, the facts pertaining thereto are to be fully established and carefully analysed in order to ensure that what may otherwise simply be part of a democratic political process is not unjustifiably labelled as constituting political instability.

 

[93]         The investigative process undertaken in the present matter in my view falls short of such an analysis. In terms of section 106 of the Systems Act the MEC has the power to appoint investigators in certain circumstances to investigate the affairs of a municipality. The respondents’ complaint that the investigation undertaken in the present matter was not successful because the municipality failed to assist the investigator appointed, namely the Special Investigating Unit, does not pass scrutiny. The letter from the Unit relied upon in support of the finding that the Mnquma municipality failed to co-operate refers to a certain individual who was requested to assist in obtaining documentation. It is not stated whether this person is employed by the municipality or is a member of the council. Consequently, what role the council, if any, played in the failure to submit the required documentation was not investigated. As has been stated, the duty is on the authority who invokes the power in a statutory provision to place sufficient information before the Court to satisfy it that the required precondition did in fact exist. By reason of the fact that the failure of the provincial executive to appreciate the meaning of the term “executive obligation” influenced the findings arrived at in respect of the appropriateness of the form of intervention and the existence or otherwise of exceptional circumstances, I do not find it necessary to deal in any further detail with the correctness or otherwise of the factual findings made in relation to the alleged failures of the municipality.

 

[94]        The next question that has to be determined is whether it can be said that the dissolution of the municipal council was an “appropriate” form of intervention. It is evident from a reading of the documentation relied upon in support of its decision that the provincial executive did not consider this aspect separately from the requirement of exceptional circumstances. The approach appears to have been that the “issues analysed above are multiple and, in their cumulative effect serious.” The finding is effectively that there were so many failures that the only appropriate form of intervention was the dissolution of the council. The danger with this approach is that a large number of what may constitute failures that are not serious and could easily have been resolved in another manner, are thrown together to justify the dissolution of a municipal council. In the present matter a number of failures relied upon relate to the duties of employees of the municipality, imposed by the Municipal Finance Management Act. Most of these matters appear to be of such a nature that they could have been resolved in another manner so as to ensure that these employees comply with their duties.[94]

 

[95]       Another aspect in this regard is that it appears to have been simply assumed that it was due to a lack of leadership that these employees did not comply with their duties. As stated earlier, when dissolution of a municipal council is considered, one of the aspects that must be accounted for is whether there exists a connection between the conduct of the council and the continued failure to comply with an executive obligation. As the statutory obligations on which the provincial executive placed reliance on in the present matter as constituting executive obligations tend to impose obligations on individual functionaries or municipal officials, such as the mayor, the accounting officer or the internal audit unit rather than on the council as a whole, this is an aspect that required investigation. More importantly, by wrongly treating the failures relied upon individually as constituting executive obligations, these were elevated to a level of seriousness that caused the provincial executive to conclude, by virtue of their sheer number, that dissolution of the council was not only appropriate, but that it satisfied the exceptional circumstances requirement.

 

Conclusion

 

[96]          Having regard to the nature of the conduct or failures relied upon to justify the decision to intervene in terms of sub-section (1) and to dissolve the council, I am of the view that they rather raise the question whether the Mnquma Municipality has complied with its executive obligation to establish and maintain an effective administration to perform its functions. The alleged failures relied upon may instead have been considered as providing evidence of the failure of the municipal council to comply with its executive obligation in that regard. That was however not the approach adopted. Instead each alleged failure was wrongly considered to constitute an executive obligation and on that basis the appropriateness of the intervention and the issue of exceptional circumstances were dealt with. As the focus of the enquiry was skewed and because different considerations would have arisen and the evidence was to be considered in a different context, it is not appropriate to make any finding in these proceedings whether the Mnquma municipality failed to comply with any one of its executive obligations.

 

[97]        For the aforegoing reasons the jurisdictional facts applicable to the exercise of the provincial executive’s power were absent and as a consequence it acted ultra vires in dissolving the municipal council. As the decision to intervene was based on a mistaken belief that the jurisdictional facts did exist, it was also irrational.[95] Accordingly, the decision to dissolve the council does not satisfy the requirements of the constitutional principle of legality. An appropriate order in my view is one declaring the decision invalid in terms of section 132 of the Constitution as being inconsistent with the Constitution.

 

Costs

 

[98]        Turning to the issue of costs, counsel were ad idem that costs should follow the result and should include the costs of two counsel. The costs of 8 May 2009 were reserved. I agree with counsel for the respondents that the applicants should be ordered to pay the wasted costs occasioned by the postponement of the matter. It is evident that the applicants were not in a position to proceed with the application on that day. The seventh respondent had to be joined as a party to the proceedings, the applicants were constrained to amend their notice of motion, and the applicants had failed to comply with the Respondents’ notices issued in terms of Rules 7 and 35(12).

 

[99]      Counsel for the respondents submitted further that an adverse costs order should be made and that the costs of the documentation annexed to the applicants’ founding affidavit should be disallowed. I am not convinced that such an order is justified. The documents in question were annexed in order to refute the respondents’ allegations relating to the municipality’s alleged failures to comply with its executive obligations. As indicated, it is a factual issue that may be tested by a Court. In this context the documentation was indeed relevant to the issues raised.

 

The Order

[100]  In the result the following order is made:

(a)    The decision of the third respondent to intervene in the Mnquma Municipality in terms of section 139(1)(c) of the Constitution and to dissolve the municipal council of the said municipality is declared invalid and is set aside.

 

(b)    The applicants are ordered to pay the wasted costs occasioned by the postponement of the matter on 8 May 2009, jointly and severally, the one paying the other to be absolved.

 

(c)     The first, second and third respondents are ordered to pay the costs of the application, such costs to include the costs occasioned by the employment of two counsel.

 

D. VAN ZYL

JUDGE OF THE HIGH COURT

 

Matter heard on:	05/15/09
Judgment delivered:	08/05/09
Counsel for the Applicant:	JC Heunis SC
	M Osborne
	L Ferreira
Instructed by:	Keightly Incorporated
	Hillcrest House
	No. 60 Cumberland Road
	MTHATHA
	℅ Smith Tabata Incorporated
	No. 126 Alexander Road
	KING WILLIAMSTOWN
Counsel for the Respondents:	J Gauntlett SC
	F Pelser
Instructed by:	The State Attorney
	℅ Shared Legal Services
	No. 32 Alexander Road
	KING WILLIAMSTOWN

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