In a significant judgement delivered by the Supreme Court of Appeal (SCA), City of Tshwane Metropolitan Municipality and Another v Summer Season Trading 63 (Pty) Ltd, the Court has provided much needed clarity on the interplay between private property rights, unlawful occupation, and municipal expropriation powers.
For compliance officers, municipal legal advisors, property developers, and landowners, this judgement serves as a timely reminder of the strict procedural and substantive requirements that govern expropriation and the non-negotiable obligation of organs of state to comply with court orders.
Background of the Dispute
The case concerned a long-standing informal settlement known as Kanana Village on private land owned by Summer Season Trading 63 (Pty) Ltd (“Summer Season Trading”). The occupation began around 2003. Despite earlier court orders restraining the occupation, the settlement grew substantially with the apparent acquiescence of the local authority at the time.
In 2013, the Gauteng Division of the High Court, Pretoria granted an eviction order in favour of the landowner and directed the City of Tshwane (“The City”) to provide alternative accommodation to the occupiers. Appeals against this order, were unsuccessful, rendering it final and binding.
Instead of fully implementing the relocation order, the City attempted to expropriate the property in 2015 and again in 2018, ostensibly for public purposes to permanently settle the occupiers. The landowner challenged both expropriation notices on review. The matters were heard together, leading to the High Court setting aside the expropriations and enforcing the eviction. The City and occupiers appealed to the SCA.
The SCA’s Key Findings
The SCA dismissed the appeal (with minor amendments to the High Court order) and delivered several important rulings:
- Invalidity of the Expropriation Notices
The Court held that the City failed to follow the prescribed procedures under the Expropriation Act 63 of 1975. Notably, the withdrawal of the 2015 notice was invalid as it occurred outside the statutory three-month window without the owner’s written consent. The subsequent 2018 notice was tainted by this defect.
- Lack of Proper Statutory Authority
Section 79(24)(a)(i) of the old Local Government Ordinance, read with Section 5 of the Expropriation Act, did not provide standalone authority for the expropriation in these circumstances. Where the purpose relates to housing development, municipalities must comply with the specific provisions of the Housing Act 107 of 1997 (including MEC approval and publication requirements). General powers cannot be used as a workaround.
- Unlawful Purpose
The expropriation was found to have been pursued for an impermissible ulterior motive, being to circumvent the existing and binding eviction order. Expropriation powers may only be exercised for authorised public purposes and in accordance with the law.
- Sanctity of Court Orders and Rule of Law
The SCA strongly emphasised that organs of state are constitutionally bound to comply with court orders. Attempts to frustrate or supersede a final eviction order through expropriation were rejected. The Court declined to grant the occupiers just and equitable relief that would effectively nullify the eviction order.
The City was ordered to complete the relocation of the occupiers within one year of the SCA judgement and to pay the costs of the appeal.
Compliance Implications for Municipalities and Property Owners
This judgement has far-reaching consequences for local government compliance programs:
- Expropriation Risk Management: Municipalities need to ensure that any expropriation is grounded in clear statutory authority and follows every procedural step meticulously. Reliance on general clauses without satisfying specific enabling legislation (such as the Housing Act) is highly risky.
- Court Order Compliance: State entities cannot ignore or creatively bypass binding court orders. Failure to do so exposes municipalities to contempt proceedings, adverse cost orders (including punitive costs), and reputational damage.
- Land Invasion and Informal Settlement Management: Municipalities should proactively manage unlawful occupations rather than allowing them to become entrenched. Tolerating or facilitating such occupations can complicate future eviction and relocation processes.
- Property Owners and Developers: The judgment affirms that private property rights under Section 25 of the Constitution are protected against arbitrary state action. Landowners facing unlawful occupation should act decisively and seek judicial enforcement where necessary.
Practical Takeaways
- Review internal expropriation protocols and standard operating procedures against the requirements of the Expropriation Act and sector-specific legislation.
- Implement robust training for officials involved in land acquisition, housing, and legal compliance.
- Ensure that any intended expropriation is supported by a clear public purpose, proper authorisations, and documented decision-making processes.
- Maintain detailed records of all interactions with court orders and statutory timelines.
As South Africa continues to grapple with housing shortages and land reform imperatives, this judgment strikes an important balance between acknowledging the need for orderly development while upholding the rule of law and procedural fairness.