Case Law[2023] ZAWCHC 133South Africa
Member of the Executive Council for Local Government, Environmental Affairs and Development and Development Planning, Western Cape Province v Knysna Municipality and Others (3488/2023; 4884/2023) [2023] ZAWCHC 133; [2023] 3 All SA 531 (WCC) (7 June 2023)
Headnotes
on 14 February 2023, to appoint Sotshede as its acting CFO; and (b)(iii) the Municipality, the Council and the Municipal Manager of Knysna Municipality (‘the Municipal Manager’) did not require the authorisation of the MEC to appoint Sotshede;
Judgment
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## Member of the Executive Council for Local Government, Environmental Affairs and Development and Development Planning, Western Cape Province v Knysna Municipality and Others (3488/2023; 4884/2023) [2023] ZAWCHC 133; [2023] 3 All SA 531 (WCC) (7 June 2023)
Member of the Executive Council for Local Government, Environmental Affairs and Development and Development Planning, Western Cape Province v Knysna Municipality and Others (3488/2023; 4884/2023) [2023] ZAWCHC 133; [2023] 3 All SA 531 (WCC) (7 June 2023)
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# THE
REPUBLIC OF SOUTH AFRICA
THE
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No:
3488/2023
In
the matter between:
MEMBER
OF THE EXECUTIVE COUNCIL FOR LOCAL
GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
AND
DEVELOPMENT PLANNING, WESTERN CAPE PROVINCE
Applicant
and
KNYSNA
MUNICIPALITY
First
Respondent
COUNCIL
OF KNYSNA
MUNICIPALITY
Second
Respondent
MUNICPAL
MANAGER OF KNYSNA MUNICIPALITY
Third
Respondent
LONDIWE
SOTSHEDE
Fourth
Respondent
In
the counter- application:
KNYSNA
MUNICIPALITY
First
Applicant
COUNCIL
OF KNYSNA
MUNICIPALITY
Second
Applicant
MUNICPAL
MANAGER OF KNYSNA MUNICIPALITY
Third
Applicant
LONDIWE
SOTSHEDE
Fourth
Applicant
and
MEMBER
OF THE EXECUTIVE COUNCIL FOR LOCAL
GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
AND
DEVELOPMENT PLANNING, WESTERN CAPE PROVINCE
First
Respondent
THE
MINISTER OF COOPERATIVE GOVERNMENT
AND
TRADITIONAL
AFFAIRS
Second
Respondent
And
in
Case
No:
4884/2023
In
the matter between:
MEMBER
OF THE EXECUTIVE COUNCIL FOR LOCAL
GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
AND
DEVELOPMENT PLANNING, WESTERN CAPE PROVINCE
Applicant
and
KNYSNA
MUNICIPALITY
First
Respondent
COUNCIL
OF KNYSNA MUNICIPALITY
Second
Respondent
MUNICPAL
MANAGER OF KNYSNA MUNICIPALITY
Third
Respondent
LUVUYO
LOLIWE
Fourth
Respondent
In
the counter- application:
KNYSNA
MUNICIPALITY
First
Applicant
COUNCIL
OF KNYSNA
MUNICIPALITY
Second
Applicant
MUNICPAL
MANAGER OF KNYSNA MUNICIPALITY
Third
Applicant
LUVUYO
LOLIWE
Fourth
Applicant
and
MEMBER
OF THE EXECUTIVE COUNCIL FOR LOCAL
GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
AND
DEVELOPMENT PLANNING, WESTERN CAPE PROVINCE
First
Respondent
THE
MINISTER OF COOPERATIVE GOVERNMENT
AND
TRADITIONAL
AFFAIRS
Second
Respondent
This
judgment is handed down electronically by email circulation to the
parties’ legal representatives’ email addresses.
JUDGMENT
SLINGERS
J
Introduction
[1]
In the application instituted under WCHC: 3488/2023, the
Member
of The Executive Council For Local Government, Environmental Affairs
And Development And Development Planning, Western Cape
Province
(‘the MEC’)
seeks
following substantive relief:
(a)
that the resolution taken by the Council of Knysna Municipality on 14
February 2023
to appoint Londiwe Sotshede
(‘Sotshede’)
as the acting chief financial officer
(‘CFO’)
of
the Knysna Municipality is:
(b)(i)
declared to be unlawful,
ultra vires,
and null and void by
virtue of its contravention of section 56(1)(c) of Local Government
Municipal Systems Act, Act 32 of 2000
(‘the Systems Act’)
;
(b)(ii)
declared to be unlawful,
ultra vires
, and null and void by
virtue of its contravention of section 56(1)(b) of the Systems Act;
and
(b)(iii)
reviewed and set aside;
(c)
that the Knysna Municipality
(‘the Municipality’)
is directed to pay the costs of the application which costs are to
include the costs of two counsel.
[2]
In
the counter-application, the respondents
[1]
sought the following substantive relief:
(a)
that the Minister of Co-operative Government and Traditional Affairs
(‘the Minister’
)
be included as a
necessary party to the counter-application in accordance with Rule
10A;
(b)
that to the extent necessary, declaring that:
(b)(i)
section 56(1)(c) of the Systems Act is unconstitutional, unlawful and
invalid;
(b)(ii)
the Council of Knysna Municipality
(‘the Council’)
was entitled, at its meeting held on 14 February 2023, to appoint
Sotshede as its acting CFO; and
(b)(iii)
the Municipality, the Council and the Municipal Manager of Knysna
Municipality
(‘the Municipal Manager’)
did not
require the authorisation of the MEC to appoint Sotshede;
(c)
that to the extent necessary:
(c)(i)
declaring that the Local Government: Regulations on the Appointment
and Conditions of Employment of Senior Managers,
2014, promulgated by
the Minister in Government Gazette number 37245 on 17 January 2014
(‘the Appointment Regulations’)
,
became
unlawful, invalid and ineffective with effect from 9 March 2019;
(c)(ii)
setting aside the 2014 Appointment Regulations with effect from 9
March 2019;
(c)(iii)
declaring that the 2014 Appointment Regulations did not apply in
respect of the appointment of Sotshede as the CFO;
(c)(iv)
in the alternative to (c)(i) to (iii)
(c)(iv)(1)
declaring that Regulation 9 of the 2014 Appointment Regulations, and
annexures A and/or B thereto, became
unlawful, invalid and
ineffective with effect from 9 March 2019;
(c)(iv)(2)
setting aside Regulation 9 of the 2014 Appointment Regulations, and
annexures A and/or B thereto, on the
basis that they became unlawful,
invalid and ineffective from 9 March 2019; and
(c)(iv)(3)
declaring Regulation 9 of the 2014 Appointment Regulations, and
annexures A and/or B thereto, did not apply
to the appointment of the
Sotshede as the CFO;
(d)
insofar as may be necessary, granting condonation for the relief in
paragraph (c) in accordance with section
9 of the Promotion of
Administrative Justice Act, Act 3 of 2000
(‘PAJA’)
;
(e)
in the event of opposition, that such opposing party be liable for
the costs of the counter-application, the
costs whereof are to be
determined by the court.
[3]
On 14 April 2023, the parties took an order by agreement in terms
whereof the
Minister was included as a necessary party in the
counter-application in accordance with Rule 10A. Furthermore, it was
agreed that
both the main and counter-applications would be postponed
to 5 May 2023 for hearing.
[4]
In the application instituted under WCHC: 4884/2023, the MEC seeks
the following
substantive relief:
(a)
that the resolution taken by the Council on 15 March 2023 to appoint
Luvuyo Loliwe
(‘Loliwe’)
as the Acting Director:
Corporate Services
(‘DCS’)
of the Knysna
Municipality-
(b)(i)
be declared unlawful,
ultra vires
, and null and void by virtue
of its contravention of section 56(1)(c) of the Systems Act;
(b)(ii)
be declared to be unlawful,
ultra vires
, and null and void by
virtue of its contravention of regulation 7 of the Municipal
Regulations on Minimum Competency Levels, 2007,
promulgated under the
Local Government: Municipal Finance Management Act, Act 56 of 2003;
and
(b)(iii)
is reviewed and set aside.
(c)
the first respondent is directed to pay the costs of the application,
including the costs of two counsel.
[5]
The following substantive relief is sought in the
counter-application:
(a)
that the Minister be joined as a necessary party to the
counter-application in accordance
with Rule 10A;
(b)
that to the extent necessary, declaring that:
(b)(i)
section 56(1)(c) of the Systems Act is unconstitutional, unlawful and
invalid;
(b)(ii)
the Council was entitled, at its meeting held on 15 March 2023, to
appoint the Loliwe as it Acting DCS;
and
(b)(iii)
the Municipality, the Council and the Municipal Manager did not
require the authorisation of the MEC to appoint
Loliwe; and
(c)
in the event of opposition, that such opposing party be liable for
the costs of the counter-application, the
costs whereof are to be
determined by the court.
[6]
As with the application instituted under WCHC:3488/2023, an order was
taken
by agreement in terms whereof the Minister was included as a
necessary party in the counter-application in accordance with the
provisions of Rule 10A, and both the main and counter-applications
were postponed for hearing to 5 May 2023.
[7]
Prior
to the hearing on 5 May 2023, the MEC brought a formal application to
have the applications instituted under WCHC: 4884/2023
and WCHC:
3488/2023 consolidated. The consolidation was sought as both matters
pertained primarily to the proper interpretation
and application of
section 56(1)(c) of the Systems Act. The only substantive issue not
common to both applications was the Municipality’s
contention
in the Sotshede application
[2]
that the Appointment Regulations fell away, alternatively was
rendered invalid on 9 March 2019 following the Constitutional Court’s
judgment in
SAMWU
v Minister of Cooperative Governance and Traditional Affairs.
[3]
[8]
It was argued that the consolidation of the applications would serve
to avoid
a multiplicity of applications and costs, would contribute
to the efficient use of judicial time and resources and would avoid
the risk of disparate outcomes in the applications if they were heard
separately.
[9]
The application for consolidation was not opposed and was accordingly
granted
by the court. It is these consolidated applications which
serve before me.
[10]
At the stage of filing his replying papers in the Sotshede
application, the MEC sought leave to amend
paragraph 2.2 of his
Notice of Motion by including an alternative ground on which it
attacked the lawfulness of Sotshede’s
appointment.
[11]
In
its unamended form the MEC sought to have Sotshede’s
appointment declared unlawful,
ultra
vires
,
and null and void by virtue ofthe appointment’s contravention
of section 56(1)(b) of the Systems. In its amended form, the
MEC
sought to have Sotshede’s appointment declared unlawful,
ultra
vires
,
and null and void by virtue of its contravention of section 56(1)(b)
of the Systems,
alternatively
(b) its contraventions of Regulation 5 of the Municipal Regulations
on Minimum Competency Levels, 2007, published
under GN R 493 in GG
29967 of 15 June 2007, as amended by GN 1146 in GG 41996 of 26
October 2018.
[4]
[12]
The
parties have filed papers and have presented both written and oral
submissions in this amendment application. I return to this
amendment
application later in the judgment.
[5]
Background
to the Sotshede application
[13]
Sotshede
was first appointed as the acting CFO from 15 August 2022 for a three
month period. Thereafter, she was re-appointed from
16 November 2022
for another three month period. On 14 February 2023, the Council took
a resolution to appoint Sotshede as acting
CFO for a further period
from ‘
16
February 2023 or until such time as the vacant position of Chief
Financial Officer is filled, whichever period comes first.’
[6]
[14]
On 12 October 2022, the MEC was furnished with a copy of the minutes
of a special meeting of Council
of 12 August 2022. At this meeting
the first acting appointment of Sotshede was approved by Council.
[15]
The MEC wrote to the Executive Mayor of the Municipality wherein he
advised that it did not appear
that Sotshede met the requirements
prescribed under Regulation 5 of the Competency Regulations made
under the Municipal Finance
Management Act. In response hereto, the
Executive Mayor advised the MEC that the Council was satisfied with
Sotshede’s performance
and intended to extend her employment
contract until such time that the vacancy had been filled
satisfactorily.
[16]
On 31 January 2023, the MEC was furnished with an excerpt from the
minutes of an ordinary meeting of
the Council held on 27 October
2022. The said minutes recorded that the Council had unanimously
resolved to appoint Sotshede from
16 November 2022 in the position of
acting CFO for a further three month period.
[17]
On 8 February 2023, the MEC addressed letters to
inter alia
the
Executive Mayor and the Municipal Manager in which he noted the
alleged unlawful resolutions to appoint Sotshede. The MEC also
requested urgent undertakings from the Executive Mayor, the Speaker
and the Municipal Manager that pending the finalisation of
an
application which was due to be instituted, the Council would not
make any further resolutions to further extend the acting
appointment
of Sotshede, that no further acting appointment of Sotshede would be
implemented, and that no further employment contract
would be
concluded in terms whereof Sostshede was appointed as an acting CFO.
No undertakings were furnished.
[18]
On 9 February 2023, the MEC instituted urgent application proceedings
wherein he sought an interim
interdict preventing the Municipality
from appointing Sotshede as acting CFO after 15 February. This
application was heard on 14
February 2023 when it was struck from the
roll for lack of urgency.
[19]
Subsequently, Sotshede’s appointment as acting CFO has twice
been extended.
[20]
The MEC also seeks to set aside the appointment of Sotshede for
non-compliance with the provisions
of section 56(1)(b) of the Systems
Act. The MEC argues that an acting CFO is subject to the requirements
prescribed in regulation
5 of the Competency Regulations which
provides that:
‘
The
chief financial officer of a municipality or municipal entity must
comply with the minimum competency levels required for higher
education qualification, work related experience, core managerial and
occupational competencies and be competent in the unit standards
prescribed for financial and supply chain management competency areas
as set out [ in the table ] below.’
[21]
Therefore, the MEC argues, Sotshede as the acting CFO of a
municipality which has an annual budget
of a value equal to or above
R1 billion must have at least a post graduate degree or qualification
in the fields of accounting,
finance or economics registered on the
National Qualifications Framework at NQF level 8 with a minimum of
120 credits or chartered
accountant. These minimum competency
requirements have not been waived by the Minister responsible for
local government and therefore
remain applicable to Sotshede’s
appointment.
[22]
It is not disputed that Sotshede does not meet the minimum competency
requirements prescribed for an
acting CFO. The Municipality argues,
however, that the prescribed minimum competency requirements are not
applicable to the position
of an acting CFO.
Background
to the Loliwe application
[23]
Loliwe was appointed as the Municipality’s acting DCS from 16
September 2022 for a three month
period. On 12 October 2022 the MEC
was furnished with a copy of the minutes of a special meeting of the
Council held on 16 September
2022 where it resolved to appoint Loliwe
as the acting DCS.
[24]
In a letter dated 8 November 2022, the MEC advised the Executive
Mayor of the Municipality that it
appeared as if Loliwe failed to
meet the requirements prescribed under regulation 7 of the Competency
Regulations. The Executive
Mayor was requested to advise the MEC
within 7 days of the steps taken to remedy the situation. In a letter
dated 23 November 2022,
the Executive Mayor advised the MEC that the
Council was satisfied with Loliwe’s performance and that it
intended to extend
his contract until the vacancy has been filled
satisfactorily. Furthermore, the MEC was advised that the
Municipality was in the
process of finalising the permanent
recruitment process for the position which would in all likelihood be
conducted at the end
of February 2023.
[25]
In accordance with regulation 7 of the Competency Regulations, the
MEC avers that Loliwe must have:
(a)
at least a post graduate degree or relevant qualification registered
on the National
Qualifications Framework at NQF level 8 with a
minimum of 120 credits in a field relevant to the senior management
position; and
(b)
a minimum of seven years’ experience at senior and middle
management levels,
of which a minimum of two years must be at senior
management level.
[26]
It is not disputed that Loliwe does not have the required minimum
seven years’ experience. However,
the Municipality disputes
that regulation 7 of the Competency Regulations are applicable to
Loliwe. The MEC also challenges Loliwe’s
appointment on the
basis that it is
ultra vires
, unlawful, and null and void in
terms of section 56(2)(b) of the Systems Act.
[27]
On 7 February 2023, the MEC received an excerpt from the minutes of
an ordinary meeting of the Council
held on 13 December 2022. These
minutes recorded that the Council unanimously resolved to appoint
Loliwe as acting CFO for a further
three month period.
[28]
On 8 February 2023, the MEC addressed letters to
inter alia
the Executive Mayor and the Municipal Manager in which he noted the
unlawful resolutions to appoint Loliwe. The MEC also requested
urgent
undertakings from the Executive Mayor, the Speaker and the Municipal
Manager that pending the finalisation of an application
which was due
to be instituted that the Council would not make any further
resolutions to further extend the acting appointment
of Loliwe, that
no further acting appointment of Loliwe would be implemented, and
that no further employment contract would be
concluded in terms
whereof Loliwe was appointed as an acting DCS.
[29]
In response to the letter of 8 February 2023, the Executive Mayor
advised that the Council has referred
the matter for a legal opinion,
which would be shared with the MEC. NNiether the legal opinion or the
requested undertakings were
furnished.
[30]
The MEC sought urgent interdictory relief wherein he sought to
prevent the Municipality from appointing
Loliwe as acting DCS after
15 February 2023. This application was heard on 14 February 2023 when
it was struck from the roll for
lack of urgency.
[31]
The interpretation of sections 56(1)(c) of the Systems Act is central
to determining the validity of
the appointments of both Sotshede and
Loliwe. On the interpretation favoured by the MEC, the appointments
are invalid, whilst on
the interpretation favoured by the
Municipality, the appointments are valid. In the event that the MEC’s
interpretation is
accepted, the Municipality brought counter
applications wherein it challenges the constitutionality of section
56(1)(c) of the
Systems Act.
[32]
I turn now to the interpretation of section 56(1)(c).
Section
56(1)
[33]
Section 56 reads as:
‘
56
Appointment of managers directly accountable to municipal managers
(1)(a)
A municipal council, after consultation with the municipal manager,
must appoint-
(i)
a manager directly accountable to the municipal manager; or
(ii)
an acting manager directly accountable to the municipal manager under
circumstances and for a period as prescribed.
(b)
A person appointed in terms of paragraph(a)(i) or (ii) must at least
have the skills, expertise, competencies
and qualifications as
prescribed.
(c)
A person appointed in terms of paragraph(a)(ii) may not be appointed
to act for a period that exceeds three
months: Provided that a
municipal council may, in special circumstances and on good cause
shown, apply in writing to the MEC for
local government to extend the
period of appointment contemplated in paragraph(a), for a further
period that does not exceed three
months.
(2)
A decision to appoint a person referred to in subsection (1)(a)(i) or
(ii), and any contract concluded between
the municipal council and
that person in consequence of the decision, is null and void if-
(a)
the person appointed does not have the prescribed skills, expertise,
competencies or qualifications; or
(b)
the appointment was otherwise made in contravention of this Act,
unless
the Minister, in terms of subsection (6), has waived any of the
requirements listed in subsection (1)(b).
(3)
If a post referred to in subsection (1)(a)(i) becomes vacant, the
municipal council must-
(a)
advertise the post nationally to attract a pool of candidates
nationwide; and
(b)
select from the pool of candidates a suitable person who complies
with the prescribed requirements for appointment
to the post.
(4)
The municipal council must re-advertise the post if there is no
suitable candidate who complies with the prescribed
requirements.
(5)(a)
The municipal council must, within 14 days of the date of
appointment, inform the MEC for local government of the appointment
process and outcome, as may be prescribed.
(b)
The MEC for local government must, within 14 days of receipt of the
information referred to in paragraph(a), submit a
copy thereof to the
Minister.
(6)
If a person is appointed to a post referred to in subsection (1)(a)
in contravention of this Act, the MEC
for local government must,
within 14 days of becoming aware of such appointment, take
appropriate steps to enforce compliance by
the municipal council with
this Act, which steps may include an application to a court for a
declaratory order on the validity
of the appointment or any other
legal action against the municipal council.
(7)
A municipal council may, in special circumstances and on good cause
shown, apply in writing to the Minister
to waive any of the
requirements listed in subsection (1)(b) if it is unable to attract
suitable candidates.
(8)
A person appointed in a permanent capacity as a manager directly
accountable to the municipal manager when
this section takes effect,
must be regarded as having been appointed in accordance with this
section.
(9)
A person appointed as an acting manager directly accountable to the
municipal manager when this section takes
effect, must be regarded as
having been appointed in accordance with this section only for the
period of the acting appointment.
(10)
Any pending legal or disciplinary action in connection with an
appointment made before this section took effect, will
not be
affected by this section after it took effect.
[34]
The
approach to be adopted to interpretation is set out in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[7]
.
The starting point to interpreting section 56 would be the plain
words thereof, giving them their ordinary meaning, while cognizant
of
the fact that statutory provisions must always be interpreted
purposively, be properly contextualized and must be interpreted
consistently with the Constitution. In ascertaining the meaning of
section 56, regard may be had to sections and/or chapters thereof
in
which the key word, provision, or expression to be interpreted is
located.
[8]
[35]
The MEC interprets section 56(1)(c) to mean that a person appointed
in accordance with section 56(1)(a)(ii)
may only be appointed for a
single period of three months. This single period of three months may
be extended on a single occasion
for a limited period of three
months. This extension may only occur after the Council, in special
circumstances and on good cause
shown, applied in writing to the MEC
for such extension.
[36]
The Municipality interprets section 56(1)(c) to mean that a person
appointed in terms of section 56(1)(a)(ii)
may be appointed and
re-appointed without any limitation or restriction as long as each
such appointment is for a period of three
months or less. It is only
when an acting appointment exceeds three months, that it is required
to apply in writing to the MEC
for an extension.
[37]
Therefore, the Municipality argues, as both Loliwe and Sotshede were
appointed in three month tranches,
there was no need to apply in
writing for an extension to the MEC.
[38]
The
Municipality argues that its interpretation is constitutionally
compliant as it enables compliance with section 160(1)(d) of
the
Constitution.
[9]
However, in its
view, a limitation of a three-month period would not impede on a
Municipality’s authority to employ personnel
which are
necessary for the effective performance of its functions, nor would
it undermine sections 41, 160(1)(d), 154(1) and 156(5)
of the
Constitution. It would simply limit the period of such appointment.
No cogent argument has been presented to show that by
limiting the
appointment in terms of section 56(1)(c) to a minimum three month
period (or a maximum of six months), the Municipality’s
ability
to appoint personnel necessary for the effective performance of its
functions are impeded.
[39]
Furthermore, the Municipality argued that on the MEC’s
interpretation, the vacant posts for senior
managers had to be filled
within a three to six month period. This could not have been the
intention if regard is had to the lengthy
appointment procedures
prescribed by the Appointment Regulations.
[40]
Regulation 7 of the Appointment Regulations provides that as soon as
the municipal manager received
official notification that the post of
senior manager has become vacant, he/ she must obtain approval from
the municipal council
to fill that post at its next meeting or as
soon as possible.
[41]
Regulation 10(1) of the Appointment Regulations obliges the municipal
manager to, within 14 days of
receipt of the notification that the
post of senior manager has become vacant, to ensure that the vacant
post is advertised. Regulation
10(5) further obliges the municipal
manager to provide the executive committee with monthly progress
reports on the filling of
the vacant senior manager post.
[42]
In
Notyawa v Makana Municipality,
the following was stated:
‘
[11]
… The entire scheme of section 54A is predicated on having
suitably qualified persons appointed as municipal managers.
And
having those appointments made within a short span of time because
municipal managers are vital to the proper administrative
functioning
of municipalities.’
[43]
The appointment of senior managers is similarly vital to the proper
administrative functioning of municipalities.
[44]
A reading of sections 56 and 54A of the Systems Act indicates that
the two sections very closely resemble
each other.
[45]
Therefore, having regard to Regulations 7 and 10(1) of the
Appointment Regulations, the above quoted
excerpt of
Notyawa v
Makana Municipality
and the similarity between sections 56 and
54A of the Systems Act, I am of the view that the appointment of
senior managers, similarly
to that of municipal managers, has to be
made within a short span of time.
[46]
In
any event, the Appointment Regulations should not contextualise the
interpretation of the Systems Act, rather the Systems Act
should
contextualise the interpretation of the Appointment Regulations.
[10]
[47]
In
support of its interpretation of section 56(1)(a)(c), the
Municipality argues that section 56(1)(a)(ii) provides that an acting
appointment is under such circumstances and for the period as
prescribed. The definitions section of the Systems Act defines
‘
prescribe’
as
‘
by
regulation or guidelines in terms of section 120’
.
Therefore,
the Municipality argues, the limits permissible for a continuing
acting appointment must be dealt with in terms of section
120 of the
Systems Act as it would create an impossible situation if section
56(1)(c) was interpreted to grant the very same power
to the MEC as
what is granted to the Minister in terms of section 120 of the
Systems Act. In my view, this argument fails to consider
the
interpretation section fully which explicitly states that ‘
In
this Act,
unless
inconsistent with the context
[11]
...’
.
For the sake of completeness I set out the full definition of
‘
prescribe.’
‘
1.
Definitions
In
this Act, unless inconsistent with the context-
“
prescribe'
means
prescribe by regulation or guidelines in terms of section 120, and
“
prescribed
”has a corresponding
meaning
’.
[48]
Therefore, if the definition of
prescribe
is inconsistent with
the context of section 56(1)(c), it should not be sustained, and the
provisions of section 56(1)(c) should
prevail.
[49]
On
the Municipality’s interpretation, section 56(1)(c) would serve
no purpose and its application could be avoided by simply
limiting
each acting appointment to a period of three months or less. To adopt
and apply such an approach would, in my view, lead
to an insensible
result as it would render section 56(1)(c) superfluous. As was stated
in
Wellworths
Bazaars Ltd v Chandler’s Ltd and Another,
[12]
a
Court should be slow to come to the conclusion that words are
tautologous or superfluous and as was quoted by the Privy Council
in
Dither
v Denison
(11
Moore P.C. 325
, at p.357):
‘
It
is a good general rule in jurisprudence that one who reads a legal
document whether public or private, should not be prompt to
ascribe –
should not, without necessity or some sound reason, impute- to its
language tautology or superfluity, and should
rather at the outset be
inclined to suppose every word intended to have some effect or be
some use.’
[50]
It is clear from section 56(5)(a) of the Systems Act that the
Municipal Council has a statutory duty
to inform the MEC of the
appointment process and outcome in respect of an appointment in terms
of section 56(1)(a). The MEC is
in turn statutorily obliged to inform
the Minster in accordance with the provisions of section 56(5)(b).
This accords with the
monitoring role accorded to the MEC.
[51]
Section 56(6) statutorily obliges the MEC to take appropriate steps
to enforce compliance with the
Systems Act upon learning that a
permanent appointment in terms of section 56(1)(a) was made in
contravention of the Systems Act.
[52]
Therefore, in terms of sections 56(5) and 56(6), the MEC has a
supervisory and enforcement role in
respect of permanent appointments
made in terms of section 156(1)(a) and is not a passive observer to
the appointment process.
[53]
On the Municipality’s interpretation and application of section
56(1)(c), the MEC has no supervisory
and enforcement role in respect
of acting appointments made in terms of section 56(1)(a)(ii).
However, the MEC’s interpretation
of section 56(1)(c) affords
him a similar role to what he has in respect of permanent
appointments in respect of acting appointments
as he would determine
whether or not the period of an acting appointment should be extended
beyond a three month period.
[54]
This supervisory and enforcement role aligns with the purpose of the
Systems Act to establish a framework
for monitoring and standard
setting by other spheres of government to build an efficient,
effective, accountable and transparent
local public administration.
[55]
The MEC’s interpretation of section 56(1)(c) of the Systems Act
is also consistent with the objective
of the Systems Act to give
effect to the principle of co-operative government, with the
objective of achieving an accountable public
administration with
employment and personnel management practices based on
inter alia
ability and fairness and is consistent with the provisions of section
3 and 7 of the Systems Act
[56]
Section 3 of the Systems Act provides as:
‘
(
1)
Municipalities must exercise their executive and legislative
authority within the constitutional system of co-operative government
envisaged in section 41 of the Constitution.
(2)
The national and provincial spheres of government must, within the
constitutional system of co-operative government envisaged
in section
41 of the Constitution, exercise their executive and legislative
authority in a manner that does not compromise or impede
a
municipality's ability or right to exercise its executive and
legislative authority.’
[57]
Section 7 of the Systems Act explicitly provides that the rights and
duties of the municipal councils
are subject to the Constitution.
Section 50 provides that:
‘
(1)
Local public administration is governed by the democratic values and
principles embodied in section 195 (1) of the Constitution
[13]
.
(2)
In administering its affairs, a municipality must strive to achieve
the objects of local government set out in section 152 (1)
[14]
of the Constitution, and comply with the duties set out in sections 4
(2) and 6.’
[58]
This
supervisory and enforcement role of the MEC does not undermine the
ability of the Municipality to regulate its own affairs,
which
includes the appointment of its staff.
[15]
On the contrary, it is consistent with the provisions of section
151(3) of the Constitution, which provides that:
‘
A
municipality has the right to govern, on its own initiative the local
government affairs of its community, subject to national
and
provincial legislation, as provided for in the Constitution.’
[59]
In
Notyawa v Makana Municipality and Others
the Constitutional
Court addressed the interpretation of section 54A. The following are
important excerpts from
Notyawa v Makana Municipality and Others
which are relevant to the matter at hand
:
‘
A
municipal manager is the head of the administration of each
council.’
[16]
‘
...section
lays emphasis on the appointment of suitably qualified municipal
managers owing to the position they hold in the administration
of a
municipality. The role played by the managers is crucial to the
delivery of services to local communities. The section envisages
that
candidates who are best qualified for the job must be recruited.’
[17]
‘
The
MEC must satisfy herself that the appointment complies with the
Systems Act. If she is not satisfied that the Act was followed,
the
MEC is empowered to take appropriate steps to enforce compliance by
the municipal council.’
[18]
‘
It
is quite apparent that Parliament has entrusted the MEC to monitor
compliance with the Systems Act.’
[19]
‘
Section
54A...prescribes short periods within which certain steps are to be
taken in the process of filling in a vacancy for the
post of a
municipal manager. This is the position even in the case of a
stop-gap. The section precludes the appointment of acting
municipal
managers for a period in excess of three months. And where an
extension is granted by the MEC, it may not exceed a further
three
months. This indicated that the section envisages that the
appointment of permanent municipal manager must be done within
six
months.’
[20]
‘
Where
it is not possible, the section affords two options. The first is to
solicit a secondment of a suitably qualified official
from the
MEC.’
[21]
‘
The
entire scheme of section 54A is predicated on having suitably
qualified persons appointed as municipal managers. And having
those
appointments made within a short span of time because municipal
managers are vital to the proper administrative functioning
of
municipalities.’
[22]
[60]
As
seen from the above excerpts, the Constitutional Court determined
that section 54A(2A)(a) and (b) prescribes that a person may
be
appointed for one three month period, which may be extended on a
single occasion, upon written application to the MEC in special
circumstances and on good cause shown.
[23]
[61]
Section 56 speaks to the appointment of managers and acting managers
directly accountable to municipal
managers and section 54A speaks to
the appointment of municipal managers and acting municipal managers.
The two sections are worded
almost identically. A notable exception
is section 54A(6) which provides that the Municipal Council may
request the MEC to second
a suitable person, on such circumstances as
prescribed, to act in the advertised position until such time as a
suitable candidate
is appointed. Section 56 does not have a similar
provision.
[62]
As a result of the similarity of the wording between section 56 and
section 54A, the MEC argues that
it follows that the interpretation
attributed to section 54A(2A) should similarly be attributed to
section 56(1)(c). The Municipality
argues that section 56(1)(c)
cannot have the same interpretation as section 54A(2A). This follows
from the fact that section 54A
allows for the municipal council to
request that the MEC second a suitable person to the position. This
provision acts as a pressure
release mechanism which is absent in
section 56.
[63]
As provided for in section 55 of the Systems Act, a municipal manager
is the head of the administration
and the accounting officer of the
municipality. Therefore, in my view, if the vacancy pertaining to the
position of municipal manager
is not filled within 6 months, a
municipality would be without a head of administration and without
accounting officer with no-one
responsible and accountable for all
municipal income and expenditure, all municipal assets and
liabilities. These factors would
necessitate the need for pressure
release system provided for in section 54A(2A).
[64]
In
Amabhugane
Centre for Investigative Journalism NPC v President of the Republic
of South Africa
[24]
the
Constitutional Court stated that when engaged in an interpretative
exercise, statutory provisions should always be interpreted
purposively and properly contextualised. The context may be
determined by considering other subsections, sections or chapter in
which the key word, provision or expression interpreted is located.
[65]
Both section 54A and section 56 are located in chapter 7 of the
Systems Act which is headed ‘
Local Public Administration and
Human Resources’
. Further, both section 54A and section 56
are located in part 2 of chapter 7, which is headed ‘
political
structures, political office bearers and roles’
.
[66]
Therefore, given the similarity of the wording of section 56 and
section 54A together with the fact
that both provisions are located
within the same part of the same chapter of the Systems Act, it can
be accepted that the same
considerations applicable to the
interpretation of section 54A would be applicable to section 56.
Consequently, the Constitutional
Court’s interpretation of
section 54A(2A) provides support for the interpretation of section
56(1)(c) advanced by the MEC.
[67]
If
section 54A(2A) and section 56(1)(c), which are worded in almost
identical terms, were construed differently it would offend
against
the legal principle which provides that every part of a statute
should be so construed as to be consistent with every other
part of
the statute.
[25]
[68]
After applying the approach to interpretation as set out in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
and
having regard to the
the ordinary meaning of section 56(1)(c),
I am in agreement with the interpretation advanced by the MEC.
[69]
Therefore, in my view, acting appointments made in terms of section
56(1)(a)(ii) is limited to a single
three month period which may, by
application in writing to the MEC and in special circumstances and on
good cause shown be extended
for a further once off period of three
months. This interpretation affords the wording of section 56(1)(c)
its ordinary meaning,
allows for a purposive interpretation thereof,
properly contextualises it, and is consistent with the Constitution.
[70]
In the circumstances:
(i)
the decision of the Council on 14 February 2023 to appoint Sotshede
as the acting CFO contravened
section 56(1)(c) of the Systems Act;
and
(ii)
the decision of the Council on 15 March 2023 to appoint Loliwe as the
acting DCS contravened section
56(1)(c) of the Systems Act.
The
Constitutional Challenge
[71]
In its counter-applications the Municipality sought an order
inter
alia
declaring section 56(1)(c) of the Systems Act
unconstitutional, unlawful and invalid.
[72]
The Municipality alleges that the MEC’s interpretation of
section 56(1)(c) improperly purports
to grant to him the power to
dictate to the Municipality how it may exercise its exclusive
functional competence to appoint members
of its administrative staff.
[73]
Implicit in the Municipality challenge to the MEC’s
interpretation of section 56(1)(c) is that
it is not constitutionally
compliant and that it does not respect the principles of co-operative
governance, intergovernmental
relations and the constitutional
autonomy of local government to regulate its own affairs, including
its staff. The Municipality
argues that its appointment of members of
staff establishments is an exclusive functional competence which is
Constitutionally
granted to municipalities.
[74]
Therefore, the MEC does not have, and cannot be statutorily granted
the powers to interfere in the
Municipality’s function to
appoint members of its staff establishment, including senior managers
whether it be in an acting
or permanent capacity.
[75]
The
MEC’s interpretation of section 56(1)(c), the Municipality
argues, effectively usurps its power to appoint an acting director
of
corporate services as it sees fit. On the MEC’s interpretation,
the Systems Act is effectively given a power to override
the
municipality’s own determination, which amounts to a usurpation
of the municipality’s function to appoint its own
acting senior
managers for the period it deems fit. This would be a contravention
of section 160(1)(d) of the Constitution.
[26]
[76]
Therefore, it is argued that section 56(1)(c) is unlawful to the
extent that it curtails the ability
of the municipality to appoint an
acting director of corporate services for more than two to three
month periods.
[77]
As
the Constitutional Court found in
Notyawa
v Makana Municipality and Others
[27]
,
Parliament
entrusted the MEC to monitor compliance with the Systems Act. This
monitoring power is a necessary component of the relationship
between
local government and other levels of government and is an
acknowledgment that higher levels of government have a duty to
intervene when local government functions in a defective or deficient
manner which compromises its autonomy and integrity.
[28]
[78]
Although
municipal councils have original legislative and executive authority,
such authority has to be exercised subject to the
national and
provincial legislation as provided for in the Constitution.
[29]
[79]
Section 139(1) of the Constitution provides that if a municipality
cannot or does not fulfil an executive
obligation in terms of the
Constitution or legislation, the relevant provincial executive may
intervene by taking appropriate steps
to ensure the discharge of that
obligation.
[80]
Sections 155(6)(b) and 155(7) of the Constitution authorises and
mandates the provincial government
to promote the development of
local government capacity to perform their functions and to manager
its own affairs and to ensure
the effective performance by
municipalities of their functions by regulating the exercise by
municipalities of their executive
authority.
[81]
It
is undeniable that there is an alarming increase in the instances of
maladministration within municipalities. The
Local Government:
Municipal Systems Amendment Act, Act
7 of 2011, which included
section 56(1)(c)
, was introduced to address this situation and to
ensure that the appointment of municipal managers and managers
directly accountable
to municipal managers be governed by
professional qualifications, experience and competence and not by
political party affiliation.
[30]
[82]
The
MEC is not prescribing requirements or criteria for the appointment
of acting senior managers. Furthermore, the MEC is not limiting
or
restricting the Municipality’s power to identify, shortlist and
interview candidates for the acting appointment of senior
managers.
The MEC is simply discharging his monitoring role by ensuring that
persons appointed as acting senior managers do not
act for a longer
period than prescribed by
section 56(1)(c)
and that permanent
appointments are promptly and efficiently made. This would further
the achievement of the Municipality’s
objects set out in
section 152(1)(a) to (c) of the Constitution.
[31]
[83]
The discharge of the MEC’s monitoring role to ensure compliance
with the provisions of section
56(1)(c) does not amount to an
encroachment on the Municipality’s sphere of influence and is
consistent with its Constitutional
duties owed to local government
and the principles of co-operative governance and intergovernmental
relations.
[84]
Therefore, the Municipality’s constitutional challenge to
section 56(1)(c) must fail.
The
Appointment Regulations of 2014
[85]
Competence-based appointments are necessary to enhance the quality of
appointment decisions and ensure
that municipalities perform and
discharge their functions responsibly, competently, and effectively.
The commitment to competence
based appointments is encapsulated in
regulation 6 of the Appointment Regulations which affirms that that
one of the principles
of recruitment, selection and appointment is
that ‘
selection must be competence-based to enhance the
quality of appointment decisions and to ensure the effective
performance by municipalities
of their functions.’
[86]
In accordance with the provisions of section 56(1)(b) of the Systems
Act, a person appointed in terms
of section 56(1)(a)(ii) must have
the prescribed skills, expertise, competencies and qualifications. As
shown above, prescribe
means prescribed by regulation or guidelines
in terms of section 120 of the Systems Act, unless inconsistent with
the context.
The Local Government: Regulations on Appointments and
Conditions of Employment of Senior Managers, 2014 were made in terms
of section
120 of the Systems Act
(‘The 2014 Appointment
Regulations’)
. Regulation 9(2) of the 2014 Appointment
Regulations provides that (a) a person appointed as a senior manager
in terms of the regulations
must have the competencies set out in
annexure A and (b) must comply with the minimum requirements for
higher education qualification,
work experience and knowledge set out
in annexure B.
[87]
Item 5 of annexure B, states that a person appointed as a CFO must
have the higher education qualification,
work-related experience and
other requirements as prescribed under the Local Government:
Municipal Regulations on Minimum Competency
Levels, 2007
(‘the
Competency Regulations’).
In terms hereof a person
appointed as the CFO must have at a post graduate degree or
qualification in the fields of accounting,
finance or economics
registered on the national qualifications framework at NQF level 8
with a minimum of 120 credits or chartered
accountant. The
Municipality does not dispute that Sotshede does not have these
requirements.
[88]
Item 7 of annexure B provides that the DCS must have a bachelor
degree in Public Administration/Management
Sciences/Law; or
equivalent and must have 5 years’ experience at middle
management level and have proven management experience
in
administration.
[89]
The
Municipality contends that the Local Government: Municipal Systems
Amendment Act 7 of 2011 came into force on 5 July 2011
(‘
the
Amendment Act’)
.
Section 11 hereof sought to introduce section 72(1)(gB) into the
Systems Act and that the Appointment Regulations were promulgated
in
accordance with section 72(1)(gB) and 120(1)(a) of the Systems Act.
On 9 March 2017, the Constitutional Court confirmed the
declaration
of invalidity of the Amendment Act by the Gauteng High Court Division
(sitting at Pretoria).
[32]
This declaration of invalidity was suspended for 24 months. On 9
March 2019, the Amendment Act was not valid, and the provisions
it
inserted into the Systems Act, including section 72(1)(gB) fell away.
The Municipality argues that as the Appointment Regulations
were
dependent on the validity of section 72(1)(gB) read with section
120(1)(a), it too fell away on 9 March 2019 and could not
be relied
thereon anytime thereafter.
[90]
In
Member
of the Executive Council Local Government Environmental Affairs and
Development Planning, Western Cape v Prince Albert Municipality
and
Another
[33]
(‘MEC
v Prince Albert’),
a
full bench of this Division found that:
‘
[33]
After applying the approach set out in Natal Joint Municipal Pension
Fund v Endumeni Municipality and Cool Ideas v Hubbard
by objectively
considering the ordinary grammatical meaning of section 72 read
together with section 120 of the Systems Act, it
is clear that the
Minister was clothed with the authority to make the appointment
regulations independent of the Systems Amendment
Act and therefore,
that the validity of the Appointment Regulations remained intact
notwithstanding the declaration of invalidity
of the Systems
Amendment Act.’
[91]
As can be seen from the above paragraph, a Full Bench determined that
the invalidity of the Amendment
Act did not affect the validity of
the appointment regulations.
[92]
In addressing the decision of the court in
MEC v Prince Albert
,
the Municipality argues that that Full Bench was not asked to perform
an audit of the Regulations
in toto
and that the statements in
paragraph 33 of the judgment (quoted above) cannot be taken as
judicial imprimatur that all other provisions
in the Regulations are
also valid.
[93]
There is no merit in this argument. A proper reading of the judgment
in
MEC v Prince Albert
indicates that the court determined
whether or not the appointment regulations remained valid after the
declaration of constitutional
invalidity of the Amendment Act. This
is the same argument presented by the Municipality in this case,
namely that the appointment
regulations did not survive the
declaration of invalidity of the Systems Amendment Act. The decision
of in
MEC v Prince Albert
is dispositive of this argument.
[94]
As
MEC
v Prince Albert
was
a decision of the Full Bench, it is binding on this court.
[34]
The
condonation application: the challenge to the appointment regulations
[95]
The Municipality submits that the promulgation of the Appointment
Regulations was not merely the detailing
of practical issues but was
in fact an exercise of executive power by the Minister. Consequently,
PAJA would not be applicable
in respect of the Municipality’s
challenge to the Appointment Regulations. The Municipality relies on
the principle of legality
to challenge the Appointment Regulations.
[96]
In the event that PAJA does apply to its challenge, the Municipality
acting with an abundance of caution,
sought condonation in terms of
section 9(1) of PAJA.
[97]
In accordance with PAJA, the challenge to the Appointment Regulations
had to have been brought within
a reasonable time and no later than
180 days after the Municipality became aware of the promulgation of
the Appointment Regulations
and the reasons therefor or after it
might reasonably have been expected to have become aware thereof and
the reasons.
[98]
As the Municipality argues that the Appointment Regulations were
invalidated since 9 March 2019, it
should have instituted its
challenge 180 days after 9 March 2019. It is common cause that it did
not do so and that the counter-application
was instituted during
April 2023.
[99]
In support of its condonation application, the Municipality states
that the MEC has not previously
relied upon the Appointment
Regulations to question or to challenge the acting appointment of
senior managers since 9 March 2019.
The MEC relied upon the 2014
Regulations for the first time in the Sotshede application.
[100]
Consequently, the Municipality states that in the circumstances, it
could not have reasonably have been expected to bring
a challenge to
the Appointment Regulations at a previous time as such a challenge
would have been entirely abstract and would not
have related to any
live dispute.
[101]
The Municipality also argues that if it is not permitted to bring a
challenge to the Appointment Regulations, it would result
in the
Appointment Regulations being insulated from judicial scrutiny and
that this would not be in the interests of justice. Furthermore,
it
would be contrary to the principle that unlawful action must be set
aside when the source of that unlawfulness is clear.
[102]
The Minister does not oppose the Municipality’s condonation
application.
[103]
The MEC disputes that these proceedings provided the Municipality
with the earliest occasion to challenge the Appointment
Regulations.
In support of this opposition the MEC states that the validity of the
Appointment Regulations was the very issue which
had to be determined
in
MEC v Prince Albert.
However, the MEC’s reliance on
Prince Albert
is misplaced as the Municipality was not
involved in that case.
[104]
The MEC alleges that the Municipality was afforded an opportunity to
challenge the validity of the Appointment Regulations
when its
efforts to introduce a Scarce Skills and Retention Policy was
resisted and culminated in litigation in 2019 with the Council
passing a resolution not to oppose such litigation in February 2020.
However, this decision to abide arose from concerns that the
underlying resolution pertaining to the Scarce Skills and Retention
Policy was defective.
[105]
It cannot be disputed that the challenge to the Appointment
Regulations raises issues of public importance and could have
wide-ranging consequences. The issues surrounding this challenge have
been fully ventilated.
[106]
The MEC does not allege any particular prejudice should the
condonation application be granted.
[107]
In the circumstances, I am of the view that it would be in the
interests of justice to grant the condonation application for
the
late challenge to the validity of the Appointment Regulations.
[108]
In
its affidavit
[35]
addressing
the relief sought in the counter-application pertaining to the
Appointment Regulations, the Municipality stated that
it sought the
declaratory relief as a collateral, or defensive, challenge to the
MEC’s attempt to exercise coercive powers
relying on the
Appointment Regulations.
[109]
The basis on which it sought the relief was that the Appointment
Regulations became unlawful as the empowering provision (section
72(1)(gB)) fell away. Consequently, the Appointment Regulations
became untethered to any provision in the Systems Act and are ultra
vires.
[110]
As shown above, a Full Bench of this Division found that the
Appointment Regulations remained valid after the Systems Amendment
Act was declared invalid. Furthermore, the Full Bench determined that
the Appointment Regulations were validly made in terms of
section 72
read with section 120 of the Systems Act. This is dispositive of the
declaratory relief sought by the Municipality in
its
counter-application.
Does
the Regulations apply to acting appointments?
[111]
The Municipality argues that the Appointment Regulations do not apply
to acting appointments and that it only applies to permanent
appointments.
[112]
In support of its argument, the Municipality argues that the
Appointment Regulations (which references and renders the Competency
Regulations applicable) are not applicable to acting appointments. If
it were, then the provisions of chapter 3 of the Appointment
Regulations would have to apply to acting appointments and this
cannot as it would entail that an acting appointment could only
be
made after the procedure prescribed in chapter 3 of the Appointment
Regulations have been complied with. Included in this procedure
is
the advertising of the post in a national and provincial newspaper,
the compilation of a selection committee and an interview
process. It
could not have been intended for this detailed procedure to be
applicable to stop gap acting appointments.
[113]
Furthermore, the Municipality references the Municipal Finance
Management Act
(‘MFMA’)
. In the MFMA, it is
only the position of an
accounting officer
which is expressly
defined to include an acting appointment. No other designation or
position includes an acting appointment as
in the case of an
accounting officer. Therefore, the Municipality argues that the
Competency Regulations do not apply to acting
appointments, other
than to that of an accounting officer.
[114]
The Appointment Regulations define ‘
senior manager’
as
‘
a municipal manager or acting manager appointed in terms of
section 54A of the Act, and includes a manager directly accountable
to a municipal manager appointed in terms of section 56 of the Act.’
[115]
Section 56(1) pertains to the appointment of (i) managers directly
accountable to the municipal manager or (ii) an acting
manager who is
directly accountable to the municipal manager.
[116]
Regulation 2 of the Appointment Regulations, which is headed ‘
scope
of application’
states that it applies to municipalities,
municipal entities and senior managers. Regulation 2(2) states that
the Appointment Regulations
must be read in conjunction with any
regulations or guidelines issued in terms of section 120 of the Act
concerning matters listed
in section(s) 54A,56, 57A and 72. Further,
the Appointment Regulations must also be read in conjunction with the
Competency Regulations.
[117]
Regulations 6 of the Appointment Regulations which set out the
principles for recruitment provides that the recruitment, selection
and appointment of senior managers must take place in accordance with
the procedures provided for in section 67 of the Systems
Act and must
be consistent with sections 54A, 56, 57A and 72 of the Act.
[118]
Therefore, in light of:
(i) the
definition of
senior managers
contained in the Appointment
Regulations;
(ii) the
directive that the Appointment Regulations must be read in
conjunction with the
Competency Regulations;
(iii) the
appointment principles set out in regulation 6 that the recruitment,
selection and
appointment of senior managers must take place in
accordance with the procedures provided for in section 67 of the
Systems Act
and must be consistent with sections 54A, 56, 57A and 72
of the Act; and
(iv) the
direct incorporation of the Competency Regulations in respect of the
position of CFO,
I
am of the view that the Appointment Regulations, which includes
reference to and incorporation of the Competency Regulations,
are
applicable to the position of acting senior managers appointed in
terms of section 56 of the Systems Act.
[119]
Paragraph 5 of annexure B of the Appointment Regulations directly
incorporates the Competency Regulations in respect of the
position of
a CFO by providing that: ‘
The higher education
qualification, work-related experience and other requirements for the
position of chief financial officer are
as prescribed under the Local
Government: Municipal Regulations on Minimum Competency Levels, 2007,
issued in terms of the Municipal
Finance Management Act, as published
under Government Notice 493 in Government Gazette 29967 of 15 June
2007.’
[120]
Therefore, Sotshede had to have had the higher education
qualification and work-related experience prescribed by the
Competency
Regulations in order to lawfully have been appointed as
the acting CFO. As Sotshede does not have the prescribed minimum
higher
education qualification, her appointment as the acting CFO
contravenes section 56(1)(b) of the Systems Act.
[121]
The MEC invoked regulation 7 of the Competency Regulations to
challenge the acting appointment of Loliwe. However, regulation
7 of
the Competency Regulations do not set out the prescribed minimum
competencies applicable to Loliwe. The applicable regulation
is
regulation 9 of the Appointment Regulations read with item 7 of
annexure B, which sets out the prescribed minimum higher education
qualification and work-related experience required for an appointment
as the acting DCS.
[122]
As the MEC has failed to show that Loliwe does not meet these
prescribed minimum competency requirements, it cannot be found
that
Loliwe’s appointment contravenes section 56(1)(b) of the
Systems Act.
Does
The MEC Have Standing To Enforce The MFMA Competency Regulations?
[123]
The Municipality argues that the MEC lacks standing to rely on the
MFMA for the relief sought as he expressly brought the
application by
relying on
inter alia
sections 56(6) and 105 of the Systems
Act.
[124]
Section 105 provides for the provincial monitoring of municipalities.
[125]
As seen from section 56(6), the MEC is obliged to take appropriate
steps to enforce compliance with the Systems Act. He has
no
discretion in this regard. This much is clear from the use of the
word ‘
must’
in section 56(6).
[126]
As set out above, the Competency Regulations are applicable to the
appointment of acting CFOs in terms of section 56 of the
Systems Act.
Therefore, if the appointment of an acting CFO in terms of section 56
does not comply with the provisions of the Systems
Act by virtue of
its non-compliance with the Competency Regulations, the MEC is
statutorily obligated to take steps to enforce
compliance with the
Systems Act, and this may include approaching the courts for
declaratory orders.
[127]
Section 139(1) of the Constitution provides that:
‘
When
a municipality cannot or does not fulfil an executive obligation in
terms of the Constitution or legislation, the relevant
provincial
executive may intervene by taking any appropriate steps to ensure
fulfilment of that obligation...’
[128]
Section 139(1) of the Constitution clothes the MEC with the standing
to take
any
appropriate steps to ensure compliance with its
Constitutional duties and legislative obligations such as complying
with the Systems
Act.
[129]
Therefore, I am of the view that the MEC does have standing to
enforce the competency regulations insofar as it is necessary
to
enforce compliance with the Systems Act.
The
applications to amend
[130]
Amendments are governed by Rule 28 of the Uniform Rules of Court.
Rule 28(10) provides that the court may, notwithstanding
anything to
the contrary in Rule 28, at any stage before judgement grant leave to
amend.
[131]
In
Affordable
Medicines Trust and Others v Minister of Health and Others
[36]
the Constitutional Court held that amendments to pleadings and
notices of motion will generally be allowed if to do so would be
in
the interests of justice. It held that amendments will always be
allowed unless the amendment is brought in bad faith or unless
the
amendment will result in an injustice to the other side which cannot
be cured by an appropriate cost’s order, or unless
the parties
cannot be put back for the purposes of justice in same position as
they were when the pleading it sought to amend was
filed.
[37]
[132]
The MEC has brought three applications seeking
leave to amend the relief sought pertaining to Sotshede. In the first
application
the MEC seeks leave to include an alternative ground on
which to have Sotshede’s acting appointment declared invalid
and
unlawful. In terms of this alternative ground, the MEC seeks to
have the appointment set aside for contravening the competency
regulations.
[133]
This application is opposed by the Municipality, which argues that
the application to amend was brought in an effort to ‘
relieve
the pinch of the shoe’
. The MEC argues that the first
application to amend was necessitated by the relief sought in
counter-application brought by the
Municipality.
[134]
In opposing the first application for leave to amend, the
Municipality has made a general averment that it would be prejudiced
if the amendment was granted. However, it has not set out nor
identified any specific prejudice which it would suffer and which
could not be cured by an appropriate costs order if the application
was to be granted.
[135]
The applicability and impact of regulation 5 of the Competency
Regulations on Sotshede’s appointment as acting CFO have
been
fully canvassed by the parties and no prejudice would result from
this amendment.
[136]
Further, as the papers filed on record addressed the issue of
regulation 5 of the Competency Regulations, it cannot be said
the
application to amend was brought in bad faith.
[137]
The second application to amend was brought after the hearing on 5
May 2023. In this application the MEC seeks to amend its
Notice of
Motion by inserting new paragraphs 2A an 2B which provide that:
‘
2A
It is declared that section56(1)(c) of the
Local Government:
Municipal Systems Act 32 of 2000
precludes a municipal council from –
2A.1
appointing a person as an acting manager directly accountable to the
municipal manager for a period that exceed
three months; and
2a.
re-appointing a person as an acting manager directly accountable to
the municipal manager when that person has acted
in the relevant
position for three months, save where the MEC for local government
has extended the appointment for a further period
that does not
exceed three months on written application by the municipal council,
on the basis of special circumstances and good
cause.
2B
It is declared that a person appointed as the acting chief financial
officer of a municipality must comply
with the minimum competency
levels prescribed by regulation 5 of the Municipal Regulations on
Minimum Competency Levels, 2007,
published under GN R493 in GG 29967
of 15 June 2007, as amended by GN 1146 in GG 41996 of 26 October
2018.’
[138]
At the conclusion of the hearing on 5 May 2023, the MEC’s legal
representative requested that judgment be handed down
by the 15 May
2023. However, the parties were advised that judgement would be
reserved and that it could not be guaranteed that
judgment would be
handed down by 15 May 2023.
[139]
This resulted in the MEC bringing the second amendment application as
the impugned acting appointment of Sotshede was due
to come to an end
on 15 May 2023. In light hereof, the second amendment application was
brought to address the contingency that
the relief sought may have
become moot and therefore not capable of determination at the time
the court delivered its judgment.
[140]
The MEC avers that the amended relief it seeks will not prejudice the
respondents as it is sought on the same basis on which
the current
relief was sought and it was fully canvassed on the papers. As
Sotshede has been appointed for a further term, the
Municipality
argues that there is no longer a basis on which to seek the second
amendment.
[141]
In the third application to amend, the MEC seeks leave to broaden the
relief sought in paragraph 2 of its notice of motion
to include the
resolution taken on 11 May 2023.
[142]
The proposed amended relief would read as:
‘
that
the resolution taken by the Council of Knysna Municipality on 14
February 2023
and
/or 11 May 2023
to
appoint the fourth respondent as as the acting chief financial
officer
of
the first respondent is
[38]
:
(b)(i)
declared to be unlawful, ultra vires, and null and void by virtue of
its contravention of section 56(1)(c) of
Local Government Municipal
Systems Act, Act 32 of 2000
(‘the Systems Act’)
;
(b)(ii)
declared to be unlawful, ultra vires, and null and void by virtue of
it contravention of section 56(1)(b) of the Systems
Act,
[alternatively (b) their contravention of Regulation 5 of the
Municipal Regulations on Minimum Competency Levels, 2007, published
under GN r493 in GG 29967 of 15 June 2007, as amended by GN 1146 in
GG 41996 of 26 October 2018]
[39]
;
and
(b)(iii)
reviewed and set aside...’
[143]
The Municipality argues that the third amendment application renders
the second amendment application superfluous.
[144]
A study of the amendment sought in the second amendment application
will show that no new issues are raised thereby. On the
contrary, the
relief sought flow from the interpretation of section 56(1)(c) and
from a finding that the Competency Regulations
are applicable to the
appointment of an acting CFO. These issues were fully ventilated and
canvassed by the parties.
[145]
Furthermore, it is not alleged that the second amendment application
is brought in bad faith or that it would cause an injustice
to the
Municipality which cannot be cured by a costs order.
[146]
Therefore, the second amendment application is granted.
[147]
The third amendment application is not opposed by the Municipality
who argued that it made the second amendment application
superfluous.
The third application to amend seeks to include the resolution taken
by the Council to appoint Sotshede on 11 May
2023 as the acting CFO
in the declaratory relief it seeks. It does not give effect to the
consequences which flow from the interpretation
of section 56(1)(c)
and from the finding that the Competency Regulations are applicable
to the acting appointments of senior managers
made in terms of
section 56 of the Systems Act.
[148]
The Municipality argues that the proposed third amendment renders the
second amendment application superfluous.
[149]
This is not so. The third amendment pertains specifically to the
resolution taken by the Council on a specific date to re-appoint
Sotshede, whereas the second amendment pertains to consequences from
the interpretation of section 56(1)(c) and from the finding
that the
Competency Regulations are applicable to the appointment of an acting
CFO. There may be an overlap between the effect
of the second and
third amendment applications but it cannot be said that the third
amendment application renders the second amendment
application
superfluous.
[150]
As it cannot be said that the third amendment application runs afoul
of the legal principles applicable to amendments, and
as it is
unopposed, there is no reason not to grant same.
[151]
Both the main and counter-applications were brought as urgent
applications. When the matter was argued on 5 May 2023 none
of the
parties took issue with characterising the applications as urgent.
[152]
Furthermore,
in accordance with the provisions of section 56(6) of the Systems
Act, the MEC is statutorily obliged to take appropriate
steps to
challenge an acting appointment made in contravention of the Systems
Act within 14 days after becoming aware thereof.
This speaks to the
inherent urgency of such applications which was recognised in
Western
Cape Provincial Minister of Local Government, Environmental Affairs
and Development Planning v Central Karoo District Municipality
and
Others
.
[40]
[153]
Therefore, it is accepted that the bringing of both the main and
counter-applications were urgent.
[154]
In the circumstances, I make the following order:
(i)
the applications instituted under WCHC: 3488/2023 and WCHC: 4884/2023
are consolidated;
(ii)
the non-compliance with the forms and services provided for in
Uniform Rules
of Court are condoned in respect of the main and
counter-applications instituted under WCHC: 3488/2023 and WCHC:
4884/2023;
(iii)
that the resolution taken by the Council of Knysna Municipality on 14
February 2023 and
on 11 May 2023 to appoint Londiwe Sotshede as the
acting chief financial officer of the Knysna Municipality is:
(iii)(a)
declared to be unlawful,
ultra vires,
and null and void by
virtue of its contravention of section 56(1)(c) of Local Government
Municipal Systems Act, Act 32 of 2000;
(iii)(b)
declared to be unlawful,
ultra vires
, and null and void by
virtue of it contravention of section 56(1)(b) of the Systems Act;
(iii)(c)
declared to be unlawful,
ultra vires
, and null and void by
virtue of its contravention of Regulation 5 of the Municipal
Regulations on Minimum Competency Levels, 2007,
published under GN
R493 in GG 29967 of 15 June 2007, as amended by GN 1146 in GG41996 of
26 October 2018;
is
reviewed and set aside;
(iv)
it is declared that
section 56(1)(c)
of the
Local Government:
Municipal Systems Act 32 of 2000
precludes a municipal council from –
(a)
appointing a person as an acting manager directly accountable to the
municipal manager
for a period that exceeds three months; and
(b)
re-appointing a person as an acting manager directly accountable to
the municipal
manager when that person has acted in the relevant
position for three months, save where the MEC for local government
has extended
the appointment for a further period that does not
exceed three months on written application by the municipal council,
on the
basis of special circumstances and good cause;
(v) It
is declared that a person appointed as the acting chief financial
officer of a municipality
must comply with the minimum competency
levels prescribed by regulation 5 of the Municipal Regulations on
Minimum Competency Levels,
2007, published under GN R493 in GG 29967
of 15 June 2007, as amended by GN 1146 in GG 41996 of 26 October
2018;
(vi) the
Knysna Municipality is directed to pay the costs of the main
application instituted under
WCHC: 3488/2023 , which costs are to
include the costs of two counsel;
(vii)
the MEC’s application to amend paragraph 2.2 of his
notice of motion in WCHC: 3488/2023 to include
the alternative relief
of contravening regulation 5 of the Competency Regulations is
granted;
(viii) the
MEC shall pay the costs occasioned by the amendment application set
out in paragraph (vii) above;
(ix) the
MEC’s application to amend his notice of motion in WCHC:
3488/2023 by adding paragraphs
2A and 2B is granted;
(x) the
MEC shall pay the costs occasioned by the amendment application set
out in paragraph
(ix) above;
(xi) the
MEC’s application to amend his notice of motion in WCHC:
3488/2023 by adding the date
of 11 May 2023 to paragraph 2 thereof is
granted;
(xii)
the
MEC shall pay the costs occasioned by the amendment application set
out in paragraph (xi) above
[41]
;
(xiii) in
the counterclaim instituted under WCHC: 3488/2023 condonation is
granted for the late bringing of the
challenge to the Appointment
Regulations;
(xiv) the
counterclaim is dismissed with costs;
(xv) the
resolution taken by taken by the Council of Knysna Municipality on 15
March 2023 to appoint Luvuyo Loliwe
as the acting director: corporate
services of the Knysna Municipality is declared to be unlawful,
ultra
vires,
and null and void by virtue of its contravention of
section 56(1)(c) of Local Government Municipal Systems Act, Act 32 of
2000 and
is reviewed and set aside;
(xvi) the
Knysna Municipality is directed to pay the costs of the main
application instituted under WCHC: 4884/2023 ,
which costs are to
include the costs of two counsel where so employed; and
(xvii) the
counterclaim instituted under WCHC: 4884/2023 is dismissed with
costs.
Slingers
J
7
June 2023
[1]
The
Municipality, the Council of Knysna Municipality, the Municipal
Manager of Knysna Municipality and Sotshede
[2]
The
application instituted under WCHC: 3488/2023
[3]
2017 (5) BCLR 641
(CC)
[4]
The requested amendment is in italics.
[5]
This is the one of three amendment applications brought by the MEC.
[6]
Paragraph
10 of the founding affidavit in application instituted under WCHC:
3488/2023
[7]
2012 (4) SA 593 (SCA)
[8]
Amabhungane
Centre for Investigative Journalism NPC v President of the Republic
of South Africa
2023 (2) SA 1 (CC)
[9]
A
Municipal Council may employ personnel that are necessary for the
effective performance of its functions.
[10]
National
Commissioner of Police and Another v Gun Owners South Africa
2020 (6) SA 69
(SCA)
[11]
Own
reference
[12]
1947 (2) SA 37
(AD); See also
Case
and Another v Minister of Safety and Security and others; Curtis v
Minister of Safety and Security and Others
[1996] ZACC 7
;
1996
(3) SA 617
(CC) and
Florence
vs Government of The Republic of South Africa
2014 (6) SA 456
(CC)
[13]
Section
195(1) of the Constitution provides that:
‘
Public
administration must be governed by the democratic values and
principles enshrined in the Constitution, including the following
principles:
(a)
A high standard of professional
ethics must be promoted and maintained.
(b)
Efficient, economic and effective
use of resources must be promoted.
(c)
Public administration must be
development-oriented.
(d)
Services must be provided
impartially, fairly, equitably and without bias.
(e)
People’s needs must be
responded to, and the public must be encouraged to participate in
policy-making.
(f)
Public administration must be
accountable.
(g)
Transparency must be fostered by
providing the public with timely, accessible and accurate
information.
(h)
Good human-resource management and
career-development practices, to maximise human potential, must be
cultivated.
(i)
Public administration must be
broadly representative of the South African people, with employment
and personnel management practices
based on ability, objectivity,
fairness, and the need to redress the imbalances of the past to
achieve broad representation.’
[14]
Section
152(1) of the Constitution provides that:
‘
The
objects of local government are –
(a)
to provide democratic and
accountable government for local communities;
(b)
to ensure the provisions of service
to communities in a sustainable manner;
(c)
to promote social and economic
development;
(d)
to promote a safe and healthy
environment; and
(e)
to encourage the involvement of
communities and community organizations in the matter of local
government.
[15]
Notyawa
v Makana Municipality and Others
(CCT115/2019)
ZACC 43
[16]
Paragraph
2
[17]
Paragraph
4
[18]
Paragraph
6
[19]
Paragraph
8
[20]
Paragraph
9
[21]
Paragraph
10
[22]
Paragraph
11
[23]
Section
54A(2A)(a) and (b) provides that:
‘
(a)
A person appointed in terms of subsection (1)(b) may not be
appointed to act for a period that exceeds three months.
(b)
A municipal council may, in special circumstances and on good cause
shown, apply in writing to the MEC for local government
to extend
the period of appointment contemplated in paragraph (a), for a
further period that does not exceed three months.’
[24]
2023
(2) SA 1 (CC)
[25]
Chotabhai
v Union Government (Minister of Justice) and Registrar of Asiatics
1911
AD 13
at [24] and cited in
National
Commissioner of Correctional Services and Another v Democratic
Alliance and Others
2023 (2) SA 530 (SCA)
[26]
Section
160(1)(d) reads as: ‘
A
Municipal Council may employ personnel that are necessary for the
effective performance of its functions.’
[27]
(CCT115/18)
[2019] ZACC 43
; 2020(2) BCLR 136 (CC)
[28]
Ex
Parte Chairperson of The Constitutional Assembly: In Re
Certification of the Constitution of the Republic of South Africa,
[1996] ZACC 26
;
1996
1996(4)
SA 744 (CC) at para 373
[29]
Section
151(3) of the Constitution. See also
City
of Cape Town and Another v Robertson and Another
[2004] ZACC 21
;
2005
(2) SA 323
(CC) at para 59.
[30]
SAMWU
v Minister of Co-Operative Governance & Traditional Affairs and
Others
(CCT 54/16)
[2017] ZACC 7
;
2017 (5) BCLR 641
(CC) (9 March 2017) at
para [4]
[31]
Section
152(1) of the Constitution provides that: ‘
The
objects of local government are-
(a)
to provide democratic and
accountable government for local communities;
(b)
to ensure the provision of services
to communities in a sustainable manner;
(c)
to promote social and economic
development.’
[32]
SAMWU
v Minister of Co-Operative Governance and Traditional Affairs
2017
(5) BCLR 641
(CC);
[2017] ZACC 7
(9 March 2017)
[33]
WCC:
A231/2020. The matter was heard on 23 July 2021 and judgment
was handed down on 21 September 2021.
[34]
Turnbull-Jackson
v Hibiscus Court Municipality and Others
2014
(6) SA 592
(CC)
[35]
The
affidavit served as the answering affidavit in the main application
as the founding affidavit in the counter-application.
[36]
2006
(3) SA 247 (CC)
[37]
At
para [9].
[38]
The
proposed amendment sought in the third amendment application is in
bold.
[39]
The
alternative relief in [ ] is the proposed amended relief sought in
the first amendment application.
[40]
(4835/2023)[2023]
ZAWCHC 66 (3 April 2023) at para [1]
[41]
A
copy of the amended notice of motion is attached hereto as “A”.
sino noindex
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