South Africa Case Law

Nelson Mandela Bay Municipality v Qaba and Others (3042/2023)

Nelson Mandela Bay Municipality v Qaba and Others (3042/2023) [2024] ZAECQBHC 27 (9 April 2024)

Court

Eastern Cape High Court, Gqeberha

Case number

3042/2023

Judge

J W Eksteen

The court found that the appointment of Mr Qaba as CEO of the MBDA was unlawful and irregular. The board appointed him unconditionally, despite his failure to meet the minimum competency levels prescribed by the MFMA and the competency regulations. The appointment was not subject to the required resolutive condition that his contract would terminate if he failed to attain the necessary competencies within 18 months. The board acted on an error of law, failed to consider relevant information, and awarded Mr Qaba the maximum permissible salary without regard to his lack of qualifications. The I…

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• Promotion Of Administrative Justice Act
• Municipal Entities
• Minimum Competency Levels
• Judicial Review
• Appointment Of Senior Managers
• Remuneration Guidelines

Mandela Bay Development Agency and Others v Nelson Mandela Bay Municipality (3619/2023)

Mandela Bay Development Agency and Others v Nelson Mandela Bay Municipality (3619/2023) [2024] ZAECQBHC 25 (19 March 2024)

Court

Eastern Cape High Court, Gqeberha

Case number

3619/2023

Judge

Eksteen

The court held that the MBDA board was not lawfully removed, ordered the municipality to resume quarterly payments, and rejected objections based on arbitration, joinder, and urgency.

• Municipal Entities
• Removal Of Directors
• Service Delivery Agreement
• Arbitration Clause
• Locus Standi
• Joinder Of Parties

Mogaladi v Tshwane Economic Development Agency SOC Ltd ("TEDA") and Others (54865/20)

Mogaladi v Tshwane Economic Development Agency SOC Ltd ("TEDA") and Others (54865/20) [2022] ZAGPPHC 515 (14 July 2022)

Court

North Gauteng High Court, Pretoria

Case number

54865/20

Judge

Ndlokovane

The High Court held that section 93J of the Municipal Systems Act vests CEO appointment power in a municipal entity’s board, not the municipality.

• Municipal Entities
• Appointment Of Chief Executive Officer
• Principle Of Legality
• Ultra Vires
• Service Delivery Agreement
• Promotion Of Administrative Justice Act

City Power (SOC) Limited v Commissioner for the South African Revenue Service (1147/2019)

City Power (SOC) Limited v Commissioner for the South African Revenue Service (1147/2019) [2020] ZASCA 150; 2022 (1) SA 121 (SCA); 83 SATC 523 (20 November 2020)

Court

Supreme Court of Appeal

Case number

1147/2019

Judges

Ponnan, Saldulker, Makgoka, Matojane, Sutherland

City Power is a state-owned company and not a municipality as defined in the Income Tax Act or the Constitution. The statutory definition of 'municipality' is confined to organs of state exercising legislative and executive authority within a demarcated area, which City Power does not satisfy. The legislative history and explanatory memoranda confirm that only municipalities, not municipal entities or companies owned by municipalities, are exempt from normal tax under section 10(1)(a) and (b). City Power's independent board, commercial operations, and ability to generate profit further distin…

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• Income Tax Exemption
• Municipal Entities
• Interpretation Of Statutes
• Constitutional Spheres Of Government

Municipal Employees Pension Fund and Another v Mantsho and Others (A152/2018)

Municipal Employees Pension Fund and Another v Mantsho and Others (A152/2018) [2020] ZAGPPHC 803 (4 November 2020)

Court

North Gauteng High Court, Pretoria

Case number

A152/2018

Judges

Matsemela, Makhoba, Van der Westhuizen

The High Court upheld an appeal over pension fund rules, holding that Rule 39 barred a withdrawal benefit where the member was re-employed by another Local Authority.

• Pension Fund Rules
• Withdrawal Benefits
• Interpretation Of Contracts
• Dual Membership
• Municipal Entities
• Pension-fund-rules

ABC Limited v Commissioner for the South African Revenue Service (IT14255)

ABC Limited v Commissioner for the South African Revenue Service (IT14255) [2019] ZATC 11 (9 July 2019)

Court

Tax Court

Case number

IT 14255

Judge

Victor

The court held that ABC Limited, although wholly owned by the City and established to provide electricity distribution services, is a private company incorporated under the Companies Act and subject to the Municipal Finance Management Act. The statutory and constitutional framework distinguishes between municipalities, which are exempt from income tax, and municipal entities such as ABC, which are not. The explanatory memoranda and legislative amendments clarify that only municipalities are exempt, and municipal entities are fully taxable. The business and financial arrangements of ABC, inclu…

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• Income Tax Exemption
• Municipal Entities
• Interpretation Of Statutes
• State Owned Enterprises

City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (CCT133/14)

City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (CCT133/14) [2015] ZACC 8; 2015 (6) BCLR 660 (CC); [2015] 8 BLLR 757 (CC); (2015) 36 ILJ 1423 (CC) (20 April 2015)

Court

Constitutional Court

Case number

CCT 133/14

Judges

Mogoeng, Moseneke, Froneman, Khampepe, Leeuw, Madlanga, Nkabinde, Tshiqi, Van der Westhuizen, Zondo

The Constitutional Court held that section 197 of the Labour Relations Act applies to municipal entities such as City Power, unless specifically excluded by agreement under section 197(6). The Municipal Systems Act and the Constitution do not override the operation of section 197 in employment matters, as the LRA expressly prevails in case of conflict. The Court found that the handover of infrastructure, assets, and operations from Grinpal to City Power constituted a transfer of business as a going concern. Consequently, the contracts of employment of Grinpal’s employees were automatically tr…

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• Transfer Of Business As Going Concern
• Automatic Transfer Of Employees
• Municipal Entities
• Section 197 Lra
• Constitutional Conflict
• Municipal Systems Act

Manong & Associates (Pty) Ltd v City Manager, City of Cape Town and Another (9934/2005)

Manong & Associates (Pty) Ltd v City Manager, City of Cape Town and Another (9934/2005) [2008] ZAWCHC 62; 2009 (1) SA 644 (EqC) (12 November 2008)

Court

Western Cape High Court, Cape Town

Case number

9934/2005

Judges

Moosa, M F Dachs, V Chlobo

The court found that the applicant, a wholly black-owned professional engineering firm, was unfairly discriminated against by the first respondent in the allocation of civil engineering contracts in Khayelitsha since June 2003. The evidence established that the procurement policies and practices, while facially legitimate, perpetuated exclusive control by historically advantaged white firms and failed to reasonably accommodate or affirm black professional firms. The court held that the failure to conduct formal performance evaluations and the subjective shortlisting process resulted in the ap…

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• Promotion Of Equality And Prevention Of Unfair Discrimination Act
• Preferential Procurement
• Burden Of Proof
• Municipal Entities
• Retrospectivity Of Statutes
• Legitimate Expectation