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The road to recognition of the right of local government to pass municipal legislation which may restrict the transfer of property

On Thursday 16 November 2023, the Constitutional Court will hear argument by Ka-Mbonane Cooper on whether municipalities have legislative authority to enact municipal by-laws which impose restrictions on the transfer of property, and whether such restrictions constitute an unlawful embargo on the transfer of property.

The application before the Constitutional Court is an application for leave to appeal against the judgment and order handed down by the Supreme Court of Appeal in the matter of Emalahleni Local Municipality & Others v Glencore Operations South Africa & others. In the judgement, the SCA upheld the order of the High Court sitting in Middelburg, ruling that section 86 of the Emalahleni Municipal By-Law on Spatial Planning and Land Use Management was declared to be inconsistent with the Constitution and consequentially invalid.

Section 86 of the By-law prevents property owners within the municipality’s jurisdiction from transferring their property without first obtaining a certificate from the Municipality declaring that the requirements of section 86(2)(a)-(e) of the By-law have been complied with. Section 86 of the By-law necessitates that property owners provide proof of compliance with the municipality’s land use scheme, By-law and other applicable land use requirements. Section 86 acts as an enforcement mechanism of the municipality which relates to municipal planning and building regulation.

In the hearing convened before the SCA, it was deemed that section 86 of the Bylaw constituted an unlawful embargo on the transfer of property and that the enforcement of the By-law by the municipality could be regarded as acting beyond the scope of its legislative competencies. This finding was made in support of the arguments presented by the Glencore Operations group of companies who wish to transfer certain properties for tax purposes.

Section 156(1) and (2) of the Constitution provide that a municipality has executive authority in respect of local government matters and may make and administer by-laws within their jurisdiction relating to, among other things, municipal planning and building regulations. Therefore, it is evident that municipalities are not creatures of statute and that their autonomy including their legislative, executive and administrative authority is provided for in the Constitution, affording municipalities original powers.

As has been previously maintained by the Constitutional Court, the exercise of the determination of the competence of a piece of legislation is determined subsequent to consideration of the nature and purpose of the legislation as a whole.

At the hearing of the application for leave to appeal, argument will be advanced that the purpose of the Bylaw is the regulation of municipal planning and building regulation matters which falls directly within the competence of the municipality’s authority as empowered by the Constitution.

Ka-Mbonane Cooper anticipates the long-awaited confirmation that municipal bylaws are not subordinate legislation and that any embargo in respect of property rights is not unlawful but rather reasonably necessary and incidental to the effective performance of the functions of the Municipality as contemplated under section 156(5) of the Constitution.

Written by Rashaad Yusuf Dadoo and Natasha Booysen [under supervision of Athisten Cooper and Naadiya Vania]


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