IN THE HIGH COURT OF SOUTH AFRICA - SAFLII

IN THE HIGH COURT OF SOUTH AFRICA EASTERN CAPE DIVISION, BHISHO

Case no: 231/ 2009

In the matter between:

Mnquma Local Municipality

Webster Mbasa Ntongana

and

The Premier of the Eastern Cape

The Member of the Executive Council for Local Government and Traditional Affairs, Eastern Cape

First Applicant Second Applicant

First Respondent

Second Respondent

The Executive Council of the Eastern Cape Province

The National Council of Provinces

The Minister of Local Government

The Provincial Legislature of the Eastern Cape Province

Thandolwakhe Tubane NO

Third Respondent Fourth Respondent Fifth Respondent

Sixth Respondent Seventh Respondent

D. VAN ZYL J:

JUDGMENT

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Introduction

[1] This application concerns a decision taken by the Provincial Executive Council of the Eastern Cape Province in terms of the provisions of the Constitution to dissolve the Municipal Council of the Mnquma Local Municipality. The intervention of the Provincial Government in the said municipality was not without its problems. The aforementioned decision, which was taken on 8 April 2008, was preceded by two earlier unsuccessful attempts to dissolve the municipal council. The lead up to the decision which forms the subject matter of the present application was briefly the following: In early December 2008 the Member of the Executive Council of the Eastern Cape Province responsible for Local Government Affairs (the MEC) advised the municipality in writing that she had been "informed of possible maladministration" in the municipality. The municipality was instructed to "halt all activities with financial implications until further notice." The MEC further informed the municipality in the same letter

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that she had appointed the Special Investigating Unit1 to investigate these matters and was doing so in terms of section 106(1)(b) of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act).2 [2] The aforementioned letter did not offer any particulars of the nature of the "possible maladministration". As a result the municipality requested the MEC in writing to identify the malpractice in issue and at the same time advised that it would not be practical to comply with the request to halt all activities with financial implications as it would bring service delivery at every level to a standstill. What followed was the publication of a notice in the provincial gazette on 23 January 2009 dissolving the Mnquma Municipal Council (the council). This gave rise to an application launched on 23 January wherein the municipality sought an interdict, inter alia,

1 A special investigating unit is appointed in terms of section 2 of the Special Investigating Units and Special Tribunals Act 74 of 1996 "to investigate the matter concerned" inter alia on the ground of "serious maladministration in connection with the affairs of any state institution." 2 This section authorises the MEC "who has reason to believe" that inter alia "maladministration, fraud, corruption of any other serious malpractice has occupied" to designate "a person or persons" to investigate the matter.

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restraining the relevant authorities from intervening in the municipality's affairs and from dissolving the council. An interim order was granted and the relevant respondents were called upon to show cause why it should not be made final. On 9 February this order was supplemented by an order that the said respondents must further show cause why an order requiring the Province to relinquish possession and control of the municipality's premises should not be made final.

[3] On 12 February the aforementioned rule nisi was discharged by agreement and the respondents were ordered to pay the costs of the application. However, on the same day, and unbeknown to the municipality, the Province initiated a new intervention. A letter was delivered to the mayor of the municipality in the evening of the same day informing the municipality that (a) it was not fulfilling its executive obligations by failing to comply with certain provisions of the Local Government: Municipal Finance Management Act

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56 of 2003 (the Municipal Finance Management Act), and (b), that "noting the factors set out above...

the Mnquma Council is hereby dissolved with effect from 12 February 2009."

[4] This prompted the Municipality to lodge a second application. In the notice of motion relief was sought substantially similar to that in the first application. The application was similarly opposed. This Court, per Kemp AJ, after hearing argument, granted the interim relief claimed. However, on 23 February the respondents filed a notice of withdrawal of opposition and tendered to pay the wasted costs. According to the respondents in their answering affidavit filed in the present matter, the reason for the withdrawal of their opposition was that, acting on legal advice, the two decisions to dissolve the council were taken in circumstances that exposed it to a procedural attack.

[5] According to counsel for the respondents the provincial executive, now acting on new legal

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