Nelson Mandela Bay Metropolitan Municipality and Another v Premier of the Eastern Cape and Others (1715/2020) [2020] ZAECGHC 111 (22 September 2020)

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO. 1715/2020

Date heard: 10 September 2020

Date delivered 22 September 2020

In the matter between:

NELSON MANDELA BAY MUNICIPALITY

First Applicant

THSONONO BUYEYE

Second Applicant

and

THE PREMIER OF THE EASTERN CAPE

First Respondent

THE MEMBER OF THE EXECUTIVE COUNCIL

FOR CO-OPERATIVE GOVERNANCE AND

TRADITIONAL AFFAIRS EASTERN CAPE Second Respondent

THE EXECUTIVE COUNCIL OF THE

EASTERN CAPE PROVINCE

Third Respondent

THE PROVINCIAL LEGISLATURE OF

THE EASTERN CAPE PROVINCE

Fourth Respondent

THE MINISTER OF CO-OPERATIVE

GOVERNANCE AND TRADITIONAL AFFAIRS

Fifth Respondent

THE NATIONAL COUNCIL OF PROVINCES

Sixth Respondent

JUDGMENT

RUGUNANAN, J

[1] The first applicant is a municipality duly established in accordance with the provisions of the Local Government: Municipal Structures Act, 117 of 1998[1] (“the Structures Act”). The second applicant is the deputy executive mayor of the municipality and presently occupies an acting position as its executive mayor. Only the first, second and third respondents oppose these proceedings. The first respondent is the Premier of the Eastern Cape in whom the executive authority of the provincial government vests by virtue of the provisions of section 125 of the Constitution. He exercises these powers together with members of the executive council of the province. The member of the executive council tasked or entrusted with the affairs of local government is cited as the second respondent. The executive council is cited as the third respondent. Its members are appointed by the Premier who also assigns to them their powers and functions under section 132 read with section 133 of the Constitution.

[2] This application originates from a decision by the second and third respondents to intervene in the affairs of the first applicant (“the municipality”) in terms of section 139(1)(a) of the Constitution by issuing directives for what they assert are executive obligations that the applicants have not complied with.[2] Section 139 sets out a process. Once the provincial executive has decided to intervene under section 139(1), it must follow the steps set out in the section namely, issuance of a directive; assumption of responsibility; and ultimately dissolution of the municipal council if exceptional circumstances warrant such a step.[3]

[3] In Part A of their notice of motion the applicants approach this Court for urgent relief essentially to interdict the implementation of the

decision by the second and third respondents. In Part B the applicants seek relief, at a later stage, for the review and setting aside of that decision.

[4] At the hearing of the matter the respondents did not join issue with the applicants on the question of urgency and acceded to the matter being dispensed with in the interests of good governance.[4] Although it was not clear whether this meant that they consented to the matter being heard in terms of Part A or Part B of the notice of motion, the matter nonetheless proceeded in terms of the interim relief sought in Part A. In argument I was invited by counsel for the applicants to consider the issues relevant to both parts in the context of the case as a whole.

[5] Appearing before me for the applicants were Mr Albertus SC together with Mr Cole and Mr Patel; and for the first, second and third respondents, Mr Heunis SC.

[6] Although the case for the applicants was argued fully by Mr Albertus, Mr Heunis submitted in limine that there is an “obvious point” that is dispositive of the matter in its entirety. This is dealt with hereunder.

LACK OF AUTHORITY:

The Resolution

[7] The municipality’s founding affidavit was deposed to by the second applicant, its deputy executive mayor. In paragraph 3 he states:

“I have been duly authorised to bring this application and to depose to this affidavit on behalf of the First Applicant, by virtue of a resolution adopted by the Chief Operating Officer and Acting City Manager on 18 August 2020, as per copy of the said resolution annexed hereto, marked ‘TB1’ ”.

[8] What this conveys is that the second applicant derived the authority to institute these proceedings from a resolution. To this the

respondents unambiguously contended in their answering affidavit that the resolution does not support the allegation made by the second applicant.[5]

[9] The applicants’ response in the replying affidavit is couched in the following statements:

“16.4 As stated herein above, annexure “TB1” to the founding affidavit, clearly establishes my authority to act herein, in terms of clause 6.2.19 of the Delegation of Powers, since the Chief Operating Officer in consultation with the Municipal Manager has been delegated the powers by Council of the First Applicant to decide on litigation on behalf of the First Applicant.

16.5. I accordingly, reiterate that I am duly authorised to bring this application and to depose to the affidavits in support thereof on behalf of the First Applicant and myself, herein.”

[10] Where the question of authority is challenged, the onus is on the applicant to show on a balance of probabilities that the application has been authorised (Griffiths & Inglis v Southern Cape Blasters 1972 (4) SA 249 (C) at 252F and 254B). In dealing with the representation of an artificial person in legal proceedings brought on notice of motion, it must appear that the deponent to the founding affidavit on behalf of the applicant (the artificial person) is duly authorised by it to do so. Evidence must be placed before the court to show that the applicant has duly resolved to institute the proceedings and that the proceedings are instituted at its instance. The best evidence of the proper authorisation of proceedings would be in the form of an affidavit by an office bearer of the artificial person - to which affidavit a copy of the resolution is attached. This form of proof is not necessary in every case. Each case must be considered on its own merits, and in this regard the court must decide if enough evidence has been placed before it to warrant the conclusion that it is the applicant that litigates and not some unauthorised person. (Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk 1957 (2) SA 347 (CPD) at 351G-352B).

[11] Cognisant of the above, it is necessary to detail the resolution attached to the applicants’ founding affidavit to give context to the analyses that follows. The resolution reads:

“IN A MEETING HELD BETWEEN THE ACTING CITY MANAGER AND THE CHIEF OPERATIONS OFFICER REGARDING THE LETTER RECEIVED BY THE ACTING EXECUTIVE MAYOR, BY THE MEC (COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS), DATED 14 AUGUST 2020, IT HAS BEEN RESOLVED AS FOLLOWS:

________________________________________________________

RESOLUTION PASSED BY THE CHIEF OPERATING OFFICER OF THE NELSON MANDELA BAY METROPOLITAN MUNICIPALITY IN CONSULTATION WITH THE ACTING CITY MANAGER IN TERMS OF SECTION 6.2.19 OF THE SYSTEMS OF DELEGATIONS OF POWERS AT PORT ELIZABETH ON THIS 18th DAY OF AUGUST 2020:

1. THAT the Nelson Mandela Bay Metropolitan Municipality will bring application proceedings, in the form of an interdict and review application and any other process incidental thereto.

2. THAT the acting executive mayor of the Nelson Mandela Bay Metropolitan Municipality be and is herewith authorised to depose to any and all affidavits on behalf of the Nelson Mandela Bay Metropolitan Municipality and the office of the Executive Mayor, as may be required or necessary in order to give effect to paragraph 1 above and until such time as the final determination of such proceedings, including any appeal proceedings pursuant thereto.

3. THAT Kuben Chetty Incorporated, situated at 163 Cape Road, Mill Park, Port Elizabeth, is authorised and mandated to represent the Nelson Mandela Bay Metropolitan Municipality in the abovementioned proceedings and any further proceedings pursuant thereto.”

[12] On the face of it although the resolution somewhat cursorily indicates the nature of the proceedings (interdict and review) to be instituted and makes a transitory reference to the letter of 14 August 2020 as the subject matter of the proceedings, the resolution does not identify any of the respondents except for the second respondent only. Aside from indicating the nature of the proceedings, I think the resolution ought to have sufficiently identified and authorised the institution of proceedings against the remaining respondents, in particular the first and third respondents.[6] Their appellation in the resolution (including the other respondents) would leave no doubt that they are the same entities cited in the notice of motion to answer the claim/s made by the applicants. While these observations may in some instances be regarded as matters of form rather than substance it is nevertheless, and for more compelling reasons to follow, a fait accompli that the resolution is flawed.

[13] Legislation[7] obliges municipalities to develop a system of delegation to inter alia maximise administrative efficiency and to provide for checks and balances, and for the delegation of powers and duties to functionaries within the municipal environment.[8] The preamble to the municipality’s Systems of Delegations of Powers (“the delegations”) specifically states that its purpose -

“is to infuse all relevant specific legislation governing the local government sphere”,

“NMBMM will utilise this document as a single integrated document for their day to day operations and guidance.”

[14] Examination of the delegations indicates that clause 6.2.19 is a sub-clause of clause 6.2. The former clause delegates to the Chief Operating Officer:

“The power to, after due consultation with and on the instruction of the Municipal Manager, institute or defend any legal action to protect the interests of the Municipality.”

[15] The replying affidavit tellingly does not mention that this is a power delegated by the Municipal Manager to the Chief Operating Officer - which in terms of clause 6.2:

“…may be delegated in writing by the Chief Operating Officer to the lowest management levels to maximise administrative operational efficiency.”

[16] Self-evidently, the clause contemplates a vertical but top to bottom delegation of authority in the hierarchy of the municipality. Its composition offers no scope for any other interpretation.[9] As deputy executive mayor or acting executive mayor, the second respondent does not fall within the class of officials in the lowest

management levels. The resolution is affected by an underlying defect which I do not think can be legitimised in favour of the second respondent on the premise of a generous interpretation that advances operational expedience - or more accurately, litigation expedience. Objectively considered,[10] the preamble evidences the binding effect of the delegations. Accordingly, an act contrary to prescripts of the delegations conflicts with their intended purpose.

[17] The applicants’ sought refuge in clause 5(f) of the delegations. The clause provides that:

“5. The executive mayor in performing the duties of office must –

…

(f) perform such duties and exercise such powers as the council may delegate to the executive mayor in terms of section 32.”

[18] Reliance on the clause is undercut by the fact that Section 32 of the Structures Act has been repealed in its entirety.[11] Clause 5(f) of the delegations is rendered nugatory and does not assist the applicants.

[19] Since the resolution has been shown to be defective it is unnecessary to consider the legality of the appointment of the acting city manager - which the respondents in their answering affidavit contended is unlawful. In that respect the applicants’ reliance on Oudekraal Estates (Pty) Ltd v The City of Cape Town and Others 2004 (6) SA 222 (SCA) as authority for the proposition that an invalid administrative action remains valid until it is set aside, does not cure the resolution of its underlying defect.

The Second Applicant’s locus standi

[20] Locus standi for the purpose of instituting legal proceedings is a matter of law. It cannot be disregarded; [12] and it goes further than mere failure to prove authority to depose to an affidavit. In Ganes and Another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA) at 624G-H, it was held that the deponent to an affidavit in motion proceedings need not be authorised by the party concerned to depose to the affidavit; it is the institution of the proceedings and the prosecution thereof which must be authorised.[13] In Gross & Others v Penz, Harms JA pointed out:[14]

“The general rule is 'that it is for the party instituting proceedings to allege and prove that he has locus standi, the onus of establishing that issue rests upon the applicant. It is an onus in the true sense; the overall onus. . .'. (Mars Incorporated v Candy World (Pty) Ltd [1990] ZASCA 149; 1991 (1) SA 567 (A) at 575H-I).”

(my own emphasis is in bold)

The learned judge added:

“I am unaware of a rule of law that allows a court to confer locus standi upon a party, who otherwise has none, on the ground of expediency and to obviate impractical and undesirable procedures.”

[21] Adverting to the issue of standing, the second applicant further states in paragraph 3 of the founding affidavit:

“I am also duly authorised to bring this application and to depose to this affidavit in my capacity as the Deputy Executive Mayor and/or the Acting Executive Mayor on account of my substantial and legal interest in the outcome of these proceedings.”

[22] This claim is categorically denied in the answering affidavit, the respondents asserting, in essence, that the second applicant’s capacity holds no store for any interest in these proceedings.[15] The replying affidavit says no more on the issue, leaving the assertion of a substantial and legal interest entirely unexplained.

[23] It is settled that in order to justify participation in a suit such as the present, a party must show that it has a direct and substantial

interest in its subject matter and in its outcome. What is required is a legal interest in the subject matter of the proceedings that would be prejudicially affected by the judgment of the court.[16]

[24] It stands to reason that the second applicant has not discharged the onus of proving his self-acknowledged substantial and legal interest in the outcome of these proceedings such as would entitle him to participate therein and to seek the relief being claimed.

[25] Given that the resolution for instituting these proceedings is discordant with the delegations, I am reluctant to hold, in the circumstances of this case, that a broader approach to standing should be adopted as contemplated by section 38 of the Constitution (cf. Mnquma Local Municipality and Others v Premier of the Eastern Cape and Others[17]). In any event, this was not pertinently raised in the applicants’ papers.

[26] In the result, the application is dismissed with costs.

____________________________

M. S. RUGUNANAN

JUDGE OF THE HIGH COURT

Appearances:

For the Applicants:

Advocates M.A. Albertus SC, S.H. Cole and

S. Patel

Instructed by:

Kuban Chetty Inc.

c/o Neville Borman & Botha

Attorneys for Applicants

22 Hill Street

Makhanda / Grahamstown

(Ref: Mr Powers)

Tel: 046-622 7200

Email: justin@nbandb.co.za

For the First, Second and

Third Respondents: Mr J.C. Heunis SC

Zilwa Attorneys

High Street

Tel: 046-622 2206

Email: ashley.basson@emlaw.co.za

[1] Act No. 117 of 1998, as amended

[2] On the version of the respondents these obligations are set out in a letter dated 14 August 2020 (Annexure “TB4” to the founding affidavit) and entail (i) the filling of the position of executive mayor, (ii) the filling of vacant posts of executive

directors, (iii) the appointment of an unqualified official to act as municipal manager, and (iv) issues raised by National Treasury

and the impending invocation of section 216(2) of the Constitution.

[3] Democratic Alliance and others v Premier for the Province of Gauteng and others [2020] 2 All SA 793 (GP) at paragraph [92]

[4] Answering affidavit p166 paragraph 58

[5] Answering affidavit p126 paragraph 9.3

[6] cf. Transvaal Associated Hide and Skin Merchants v Price 1958 (3) SA 724 (ECD) which by parity of reasoning dealt with the contents of a power of attorney.

[7] i.e. section 59 of the Local Government: Municipal Systems Act 32 of 2000

[8] See Bekink, Principles of South African Local Government Law, LexisNexis 2006 ed at p259 paragraph 15.2.2.1

[9] See Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at paragraph [18] which sets out the current state of the law with regard to the interpretation of written instruments.

[10] Natal Joint Municipal Pension Fund v Endumeni Municipality supra at paragraph [18]

[11] By section 121 of Act 32 of 2000

[12] Dilley v Changing Tides 17 (Pty) Ltd (47807/2016) [2020] ZAGPPHC 61 (28 February 2020) at paragraph [50]

[13] at 624G-H

[14] [1996] ZASCA 78; 1996 (4) SA 617 (AD) at 632D

[15] Answering affidavit p126 paragraph 9.4

[16] See Polokwane Local and Long Distance Taxi Association v Limpopo Permissions Board and Others (490/2016) [2017] ZASCA 44 (30 March 2017) at paragraph [18] and the cases cited therein.

[17] ECB 231/2009 ([2012] JOL 28311) at paragraph [27] – a decision which found favour with the court in Mogalakwena Municipality v Provincial Executive Council, Limpopo and Others 2016 (4) SA 99 (GP) albeit for different reasons.