Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others

Following the restructuring of local government in the greater Johannesburg area under the interim Constitution and the Local Government Transition Act, the Greater Johannesburg Transitional Metropolitan Council (TMC) and its four metropolitan substructures adopted a joint budgeting policy for the 1996/1997 financial year. A uniform general property rate of 6.45 cents in the Rand was imposed across all substructures. This resulted in significant surpluses in some substructures, including the Eastern Metropolitan Substructure (EMS), and deficits in others. The TMC levied contributions from surplus substructures and used them to subsidise deficit substructures and its own budget shortfall. Ten ratepayers in the EMS challenged the lawfulness of the increased rates and related levies, arguing that the TMC and EMS acted beyond their powers and in breach of section 178(2) of the interim Constitution.

The appeal was dismissed. The resolutions of the TMC and EMS imposing levies and property rates were upheld as lawful.

This case is a leading authority on the distinction between legislative and administrative action in South African constitutional law. It clarified that budgetary and rate-setting decisions by elected local government bodies are legislative in nature and not subject to administrative-law review. The judgment also affirmed the constitutionality of redistributive fiscal measures within metropolitan local government during the transition period.