In the recent matter of Govan Mbeki Local Municipality and Another v Glencore Operations South Africa (Pty) Ltd and Others, the Supreme Court of Appeal was required to rule on the legality of certain municipal by-laws in the Emalahleni Local Municipality and Govan Mbeki Local Municipality, which stated that landowners could not apply for the transfer of immovable property without a certificate from the Municipality (“SPLUMA Certificate”).
The municipal by-laws in question, being the Govan Mbeki Spatial Planning and Land Use Management By-law and Emalahleni Municipal By-law on Spatial Planning and Land Use Management (“Municipal By-laws”) were promulgated under the Spatial Planning and Land Use Management Act, 16 of 2013, as amended (“SPLUMA”). Under their respective provisions, the Municipal By-laws stated that a Municipality must not issue a certificate to give effect to the transfer of land unless the owner furnishes the Municipality with, inter alia, a SPLUMA Certificate to show compliance with the requirements for spatial planning, land-use management, and building regulation conditions or approvals in terms of the relevant by-laws.
The matter was first brought before the High Court by Glencore Operations and other interested companies who sought to transfer certain immovable properties within the Govan Mbeki and Emalahleni Municipalities but were blocked due to their failure to obtain the requisite SPLUMA Certificates.
In the High Court, the companies argued that sections 74 and 76 of the Govan Mbeki Municipal By-law, and sections 84 and 86 of the Emalahleni Municipal By-law, were unconstitutional insofar as they sought to create obstacles to the transfer of immovable property. The Municipal By-laws required owners to first obtain a certificate from the Municipality before making an application to the Registrar of Deeds to register the transfer of land, with the practical effect that the Municipalities were dictating the circumstances under which a property transfer could take place. The High Court agreed with the arguments put forward by the companies, concluding that these provisions of the Municipal By-laws were invalid and unconstitutional on the grounds that they arbitrarily deprived the parties of their property rights in terms of section 25(1) of the Constitution. Shortly after the ruling of the High Court, the Municipalities appealed to the SCA.
The SCA followed the line of reasoning of the High Court and examined the powers of local municipalities against the backdrop of the relevant constitutional and legislative provisions. In accordance with section 156(1)(a) of the Constitution, Municipalities hold the executive authority and right to administer matters listed in Schedule 4B and 5B, while section 156(2) grants municipalities the power to enact by-laws on these matters. A municipality, therefore, has the right to govern on its own initiative the affairs of its communities, however, this authority is subject to the restrictions of national and provincial legislation.
Notwithstanding the argument of the Municipalities that the relevant provisions of the By-laws should be considered enforcement mechanisms, the SCA found that the restrictions were not an effective method of preventing the unlawful use of land as contemplated in SPLUMA. The SCA held that the By-laws dictated under what circumstances a transfer may take place to the Registrar of Deeds, thereby preventing the Registrar from carrying out their duties in terms of the Deeds Registries Act, 47 of 1937, as amended. The Court concluded that the Municipal By-laws did not relate to municipal planning, but rather to the transfer and registration of property, which is a concurrent competency of the national and provincial governments, as defined in Schedule 4A of the Constitution.
Despite the SCA’s confirmation of the High Court’s decision, and on 08 July 2022, the Emalahleni Municipality applied to the Constitutional Court for leave to appeal the judgment and order of the SCA, issued under case number CCT191/22, which application is still pending. Accordingly, and in terms of section 18(1) of the Superior Courts Act, 10 of 2013, “the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal”.
In the circumstances, the order of the High Court and SCA are suspended, with the effect that the Municipal By-laws remain in full force and effect. Accordingly and on 23 February 2023, the office of the Mpumalanga Registrar of Deeds, in which the Emalahleni Local Municipality and Govan Mbeki Local Municipality are situated, issued a directive that the lodging of SPLUMA Certificates is still required until further notice. This situation will persist until the conclusion or withdrawal of the Municipalities’ application for leave to appeal.
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