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This article looks into Govan Mbeki Local Municipality and Another v Glencore Operations South Africa (Pty) Ltd and Others (334/2021; 338/2021) [2022] ZASCA 93 (17 June 2022), and the discussion centres around the powers of local government.

Glencore Operations South Africa, among other companies (“the companies”), wanted to transfer immovable properties situated in the Govan Mbeki Local Municipality and the Emalahleni Local Municipality. However, sections 76 and 86 of those respective municipalities’ by-laws provided that sellers needed to obtain a certificate from those municipalities prior to making an application in the deeds office to register the transfer of their property to a purchaser.

This requirement effectively set out to the registrar of deeds under what circumstances a transfer could take place.

The high court decision

The companies argued in the high court that sections 74 and 76 of the Govan Mbeki municipality’s Spatial Planning and Land Use Management by-law, as well as sections 84 and 86 of the Emalahleni municipality’s by-law on Spatial Planning and Land Use Management, were unconstitutional because they were not authorised by any empowering provisions in national or provincial legislation. They fall outside the scope of powers assigned to local government in terms of s 156 read with Part B of Schedule 4 and Part B of Schedule 5 of the Constitution of the Republic of South Africa (“the Constitution”) and are inconsistent with section 25 of the Constitution, as their application leads to an arbitrary deprivation of property.

The high court agreed with the companies and held that these sections were invalid and unconstitutional on the grounds that they arbitrarily deprived the parties of their property rights in terms of section 25(1) of the Constitution. In addition, the High Court ruled that the by-laws were not permitted in terms of section 156 of the Constitution and conflicted with section 118 of the Municipal Systems of 2000, which regulates the restraint of trade. The high court suspended the declaration of invalidity for six months to allow the municipalities to fix the defects in the by-laws. The Govan Mbeki and Emalahleni municipalities approached the Supreme Court of Appeal (“the SCA”) to appeal the high court’s judgment.

The SCA decision

On appeal, the SCA considered section 156(1)(a) of the Constitution, which gives municipalities the executive authority and the right to administer matters listed in part B of schedules 4 and 5 of the Constitution, together with section 156(2), which grants municipalities the power to enact by-laws on these matters. Through these sections, a municipality has the right to govern, through its own initiative, the functional areas listed in part B of schedules 4 and 5 of the Constitution, which include “municipal planning,” subject to national and provincial legislation.

The SCA held that a local municipality is empowered by the Constitution, the Municipal Systems Act 32 of 2000, and the Spatial Planning Land Use Management Act 16 of 2013 (“SPLUMA”) to promulgate by-laws to regulate and control municipal planning, enforce municipal planning, and enforce an adopted land-use scheme.

However, this power is to be exercised within the parameters prescribed in the legislation. The SCA stated that the relevant provisions of the by-laws in question may only be deemed constitutional if they are necessary or incidental to the effective performance of municipalities’ land-use planning function listed in part B of schedule 4 of the Constitution.

The SCA held that the restriction on the transferability of property – ­viz. imposed by the municipal certificate by Govan Mbeki and Emalahleni municipality’s planning by-laws – is not a necessary power incidental to land use management. The SCA was of the view that these restrictions on transferring property exceeded the scope of municipal planning. The SCA concluded that the by-laws did not relate to municipal planning but to the transfer and registration of property, which is a concurrent competency of the national and provincial governments, as set out in part A of schedule 4 of the Constitution.

Discussion: was the SCA correct in its finding?

Municipalities have the autonomy to govern themselves, legislate on matters listed under part B of schedules 4 and 5 of the Constitution and exercise incidental powers in relation thereto. They may not legislate on anything else other than what is permitted by the Constitution, and national and provincial legislation. Thus, while municipalities are exercising their legislative powers to improve land-use management, this must be done within the ambit of the law. In Vinpro Inpro NPC v President of the Republic of South Africa and Others (1741/2021) [2021], the Court, in dealing with the incidental powers of an organ of state, held that for a matter to be classified as being “reasonably necessary or incidental to the matter,” it has to be shown to be closely connected to or intrinsic to the principal matter. Therefore, if a municipality enforces an incidental power, such enforcement is within their power.

In City of Cape Town and Other v Robertson and Other (CCT 19/04) [2004] ZACC 21, the Court held that a municipality under the Constitution is not a mere creature of statute otherwise moribund save if imbued with power by provincial or national legislation. A municipality enjoys “original” and constitutionally entrenched powers, functions, rights, and duties that may be qualified or constrained by law and only to the extent the Constitution permits.

Therefore, the question posed in light of the SCA decision of the Govan Mbeki Case is how the restrictions created by the local government on the transfer of property are not considered closely connected, or rather “incidental,” to land-use management similar to those already in existence, such as obtaining of the rates clearance certificate. Are they not inextricably linked to the management of how land is used, and thus local government can regulate land-use planning? Furthermore, does the principle of cooperative government not mean that organs of state should assist one another, where possible, to ensure compliance with legally valid obligations?

While that may be the question imposed against the SCA decision in the Govan Mbeki case, one may argue for the judgment and simply state the obvious, that being: although local governments may exercise incidental powers on closely connected matters and organs of state may assist each other to ensure compliance, such powers must still be within their jurisdiction, which is prescribed in part B of schedules 4 and 5 of the Constitution.

The discussion around this case is an ongoing debate that only the constitutional court may put to rest and decide on whether the enforcement of an incidental power by an organ of state, and more specifically local government, is or is not an act of that organ of state’s power.