The City of Ekurhuleni escapes High Court’s “non-consensual” consent order
The order compelled the City to purchase several properties, belonging to Rohlandt Holdings and others, whose residential buildings were unlawfully occupied since November 2017. This order was negotiated and agreed to by the City’s legal representative, without consultation and agreement by the municipal council.
The City sought a reversal of the order (rescission application), arguing that its attorney lacked the authority to consent to it. This was unsuccessful because the High Court ruled that the City’s instruction to its attorney to defend this claim gave him implicit authority, provided he acted in good faith and in the best interests of the City.
In City of Ekurhuleni Metropolitan Municipality In re: Unlawful Occupiers 1 Argyl Street v Rohlandt Holdings CC and Others, the City appealed the High Court’s decision. It argued that its attorney lacked the authority to negotiate and enter into the said agreement on behalf of the City. It further argued that in terms of section 160(3)(a) and (c) of the Constitution, section 79(24) of the Local Government Ordinance (LGO), and section 30(1) and (3) of the Municipal Structures Act of 1998, property purchases by the City required a report to, and resolution of, the council, together with permission from the provincial government. This was absent in this case.
The City also argued that the order bypassed the requirements for equitable, fair, competitive, transparent, and cost-effective procurement in section 217 of the Constitution. Because of the above, the City argued that the High Court was not competent to grant the order as it had failed to establish the requirements needed to grant a settlement agreement as a consent order.
The Constitutional Court addressed a number of issues, including the nature of such an order and its consistency with the Constitution, law, and public policy; the role of the municipal council in the alienation, procurement, or acquisition of land in eviction cases; the impact of the order weighed against section 217 of the Constitution; and the effect of such an order in light of section 26(2) of the Constitution and the municipality’s duty to provide alternative accommodation where people face imminent homelessness.
The Court found that the order did not address disputes that were before the court in the initial PIE applications instituted by the owners, such as the provision of alternative accommodation to the occupiers and restoration of the property back to the property owners. Furthermore, the order also did not relate to the underlying dispute of the application to stay the eviction orders, instituted by the occupiers against the owners. The Court further found that the order did not rely on the relevant local government legislation regulating the disposal and acquisition of property in local government, nor was evidence produced to show the City’s compliance with these laws for purposes of the order.
The Court distinguished this matter from the facts in the HC and SCA judgments in Coppermoon, where the City of Cape Town was ordered by the HC to engage in good faith with affected property owners on the purchase or expropriation of private land that was illegally occupied. Although the City of Cape Town appealed the HC judgment, this allowed the municipal council to apply its mind and provide a council resolution to endorse the option. This was given effect through a settlement agreement by the property owners and the City of Cape Town that was then made a final court order by the SCA, ordering the City to purchase the land now known as Marikana informal settlement.
The Court found that the solution the order attempted to provide was not compliant with the Constitution and law. This diminished any practical or legitimate advantage that could be derived from the order. The Court found in favour of the City of Ekurhuleni and referred the matter to the High Court for reversal of the consent order.
Commentary
The judgment emphasises that the disposal or acquisition of property must be deliberated by and consented to by the municipal council. Regardless of how noble the intentions of the parties negotiating a settlement agreement might be, the council, as the highest decision-making body of a municipality, must be consulted.
Would the order have held a practical or legitimate advantage if it was granted directly by the HC? It is submitted that it would, only if the City is involved in the crafting of such order, as such decisions are regulated by local government law and require the council to apply its mind and pass a resolution to that effect. As was the case in the Coppermoon judgment, a court order for meaningful engagement may be used to oversee the engagement and negotiation process, and will reveal a municipal council’s stance and resolution in the report back to court. Furthermore, the occupiers’ position must be addressed in orders of this nature. Where a consent order only addresses the position of the municipality and property owner, leaving the occupiers vulnerable to possible eviction as was the case here, then the order is unlawful.
Does an order of this nature have any practical or legitimate advantage in comparison to an order for a municipality to seek alternative accommodation in eviction cases? Yes, it does, when considered against the claims that cities often perpetuate apartheid-era spatial planning when providing alternative accommodation in eviction matters and fail to consider locality. Such an order averts the need to evict occupiers and uproot them further from their places of employment, schools, medical services, and economic opportunities; lessens the burden on municipalities to seek or establish alternative accommodation further from the city centre; brings the litigation to an end; and also compensates the property owner for the loss of occupation of their property.
Perhaps it is time for litigants and the courts to craft and use creative orders to dismantle the apartheid-era spatial planning patterns still prevalent in municipalities. Municipalities continue to struggle to address this issue. The fact that municipalities even provide alternative accommodation in cases of evictions and imminent homelessness arose as a result of legal challenges and court judgments.