Mkontwana v Nelson Mandela Metropolitan Municipality
center850008549640April 10, 2018
Student no. 419447Student name: Mkhabela Celiwe1000000
April 10, 2018
Student no. 419447Student name: Mkhabela Celiwe
An analysis of the court’s reasoning in reaching its decision that the Municipal Systems Act did not amount to arbitrary deprivation in terms of section 25…………………….2-3
The efficiency of municipalities with regards to debt management and debt collection..3-4
Whether property owner’s rights to transfer property should be limited in instances where the municipal debt was incurred by unlawful occupiers…………………………………..4
Impact of the decision on Mrs. Mkontwana……………………………………………………5
How the outcome would have differed had the court applied the thick test………………5
Whether Mrs. X would be able to effect a transfer of her house pending municipal charges…5
Mkontwana v Nelson Mandela Metropolitan Municipality; Bisset v Buffalo City Municipality; Transfer Rights Action Campaign v MEC for Local government and Housing, Gauteng 2005(1) SA 530 (CC)
South African courts are reluctant to place too much emphasis on individual rights because the rights in the bill of rights are not absolute and therefore subject to Section 36 limitation clause. The Mkontwana the case clearly demonstrates the reluctance of the courts in interfering with the legislative and administrative functions of the local authorities, further shunning away from placing too much emphasis on the right to property. This paper aims to analyze the reasoning of the court in reaching the decision that the Municipal Systems Act did not amount to arbitrary deprivation, the efficiency of municipalities with regards to debt management and debt collection, whether property owner’s rights to transfer property should be limited in instances where the municipal debt was incurred by unlawful occupiers.
An analysis of the court’s reasoning in reaching its decision that the Municipal Systems Act did not amount to arbitrary deprivation in terms of section 25
Sll8(1) of the Local Government: The Municipal Systems Act placed a limit on the owner’s right to transfer immovable property. It held that the Registrar of Deeds may not effect a transfer of property without obtaining a clearance certificate from the municipality which proves that the consumption charges for the previous two years have been paid. In Mkontwana v Nelson Mandela, the applicants challenged the constitutionality of this Section 118(1) contesting that the section amounts to arbitrary deprivation as per Section 25(1) of the constitution, where the owner is not resident in the property and would be unable to sell the property unless municipal services were paid. The court, in this case, looked at the reasoning of FNB v Commissioner of SARS, in deciding whether S118 of the Act amounted to a deprivation of property as envisaged by S25(1) of the Constitution. It held that S118 placed a limit on the ability of the owner to use, enjoy and transfer his property, and this amounts to a deprivation. The court then looked at whether the deprivation was arbitrary. A deprivation is arbitrary where there is no rational connection between the means and ends.
However, in deciding whether the deprivation was arbitrary, the court applied a thin test by focusing only on rationality instead of correctly applying the thick test of proportionality the way it was applied in the FNB case. In Mkontwana, the court held that the purpose of S118(1) is to provide security to the municipality for debts owed to it in respect of consumption charges. I argue that S118(1) just like S114 of the Customs and Excise Act in FNB casts the net too wide because it deprives the owner to exercise his right to sell and transfer property unless debt owed to the municipality is paid even where there is no relationship between the consumption charges and the owner of the property. I argue that placing a burden on the owner even though he has no connection with debt amounts to arbitrary deprivation especially where the property owes substantial amounts to the municipality, the deprivation could continue indefinitely and could be an obstacle to transfer of the property. This is procedurally unfair and reviewable as it has to do with the implementation of policy.
The efficiency of municipalities with regards to debt management and debt collection
In the Joseph case, the court held that an administrative action which adversely affects the rights and legitimate expectation of any person must be procedurally fair. It is procedurally unfair for the owners to be liable for substantial amounts of debts due to the municipality when the municipality does not have a proper debt management strategy to recover the debts. It is also impractical for owners of properties to have to request municipal account statements in writing from the municipality, the reality of the matter is that there is a lack of accountability from the government towards the public, one can request municipal accounts statement and not get a response.
Why should an owner request municipal account statements when the municipality can send them every month to ensure that owners keep up with their payment towards consumption charges? The Steve Tshwete municipality sends monthly account statements to property owners to effect payments for consumption charges and failure to pay consumption charges from the previous month bars the owner from buying electricity unless the consumption charges for the previous month are paid. Local governments should effectively use their powers to effect payment of municipal services, without placing a lot of limitations on owner’s rights to use, enjoy and alienate their property. The impact of S118(1) of the municipal act on the property owner is unreasonable and should not be justified in open and democratic society.
Whether property owner’s rights to transfer property should be limited in instances where the municipal debt was incurred by unlawful occupiers
The issue of unlawful occupiers is a very difficult one, given the fact that the state still has not found a solution to providing adequate shelter to the homeless. The State itself legislates on the prevention of illegal evictions and unlawful occupation through the PIE Act, which provides guidelines on how to get an eviction order and emphasizes that the private property owner’s rights are not absolute hence an eviction order will not be granted if it would render the unlawful occupiers homeless. This becomes a burden and prejudice to the owner, and the state is likely to compensate the owner by way of constitutional damages. However, I do not see why the state does not offer the same protection to private owners where their rights to property have been infringed by unlawful occupiers, and why they should be liable for debts incurred by them. The eviction process can be very long, and the state may protect the rights of unlawful occupiers more than that of owners. There were several cases in Middelburg, Extension 18, of houses that are occupied unlawfully, and were reported to the municipality for it to disconnect services in those properties. However, the municipality has not been co-operating, and unlawful occupiers still occupy the properties. This is unreasonable and unfair and owners’ rights to transfer property should not be limited due to municipal debts incurred by unlawful occupiers. There needs to be some sort of liability to municipalities because of their negligence in reported cases.
Impact of the decision on Mrs. Mkontwana
I argue that the court’s decision in Mkontwana moves away from holding municipalities accountable as mentioned earlier in implementing effective debt management and collection practices. The state fails to provide adequate access to housing as per S26 of the Constitution while on the other hand where people like Mrs. Mkontwana try to effect their rights under S26, it is the state which also limits it, by placing restrictions on access to housing. This has a huge impact on people like Mrs. Mkontwana who must incur municipal debts which were incurred by previous occupiers, that they do not have a connection with. This largely impacts on both S25 property rights and S26 rights to access to adequate housing, and infringes one’s values to dignity, equality, and freedom which are core values, and should be protected through the Constitution by the courts.
How the outcome would have differed had the court applied the thick test The court through its reasoning found that there was a deprivation of property as envisaged in S25(1) of the Constitution, which interferes with the owner’s right to use, enjoy and alienate his property. The court had to correctly apply the proportionality test to determine whether the deprivation is arbitrary. The court had to at look at the means employed to achieve the end sought.
Though the purpose of the Act was for a good cause, that is to recover municipal debts, this was too much of a restriction to owners who have no connection with the debt and there was or misrepresentation whatsoever. The relationship between the owner and the debt and property was complex especially in cases where the consumers were other persons other than the owner where the owner does not reside on the property. The relationship between the purpose of the deprivation and nature of property, where the right infringed is a property right, the purpose must be more compelling, and a degree of proportionality had to be observed.
The purpose in this case greatly deprived the owner of his right to transfer property pending municipal debt even where he had no connection with the debt and this is not justifiable under S36 of the Constitution and therefore amounts to arbitrary deprivation. This is the decision the court had to reach following a well-established authority of the FNB case. The facts were similar because owners of a property could be held liable for municipal charges they did not actually incur and have not necessarily enjoyed the benefits of the services. The deprivation under S118(1) could continue indefinitely due to a failure of the municipality to adopt, maintain and implement credit control and debt collection procedures.
Whether Mrs. X would be able to effect a transfer of her house pending municipal charges
According to Mkontwana v Nelson Mandela Metropolitan Municipality, the court held that despite S118 of the Act depriving an owner of his rights in relation to his property, it was reasonable and necessary because the municipality does not have the power to take steps to evict a tenant as it does not have a contractual relationship with. Though I would argue that municipalities have powers to disconnect services, especially in cases that were reported. The court in its reasoning also held that it would not be unreasonable to expect the owner to bear the risk as it is accepted in law that that owners of properties must bear the risk in relation to many other occurrences as an integral part of ownership. Mrs. X should pay Municipal charges and sue the Municipality for negligence.
II CONCLUSIONS118(1) is a safety net, preventing municipalities from implementing debt management and collection practices. It also places a heavy burden on property owners to ensure payment of municipal services even where the debt has been incurred by persons other than the owner. It seems to me that this judgment would encourage municipalities to care less about debt collection strategies, knowing that they would recover two years’ worth of unpaid debt from property owners.
South African cases
First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and Another; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC)
Joseph and Others v City of Johannesburg and Others 2010 (4) SA 55 (CC
Mkontwana v Nelson Mandela Municipality; Bisset and 2 others v Buffalo City and 2 others; Transfer Right Action Campaign v Member of the Executive Council for Local Government and Housing in the province of Gauteng
Legislation: South Africa
Constitution of the Republic of South Africa, 1996
The Municipal Systems Act 32 of 2000
Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998