Member of the Executive Council Responsible for Local Government, Western Cape v Matzikama Local Municipality and Others

In September 2019, eight complaints alleging misconduct within the Matzikama Local Municipality were brought to the attention of the MEC for Local Government, Western Cape. These included allegations of maladministration such as irregular appointments, nepotism, irregular payments, and the alleged theft of R320 000 of municipal funds. After requesting information and considering the municipality’s explanations, the MEC decided under s 106(1) of the Local Government: Municipal Systems Act 32 of 2000 to appoint investigators to probe six of the allegations, including the theft allegation. The municipality launched urgent proceedings to interdict the investigation and alternatively to review and set aside the MEC’s decision. The High Court upheld most of the MEC’s decision but set aside the referral of the theft allegation, holding that s 106(1) did not empower the MEC to investigate criminal conduct other than fraud or corruption. The MEC appealed to the Supreme Court of Appeal.

The appeal was upheld. The High Court’s order excluding the theft allegation from the investigation and its costs order were set aside. The municipality’s application was dismissed with costs, including the costs of two counsel, and the municipality was directed to pay the MEC’s costs relating to the applications to amend and to strike out.

This judgment clarifies and expands the scope of provincial oversight over municipalities by confirming that s 106(1) investigations may encompass serious criminal conduct beyond fraud and corruption, including theft. It expressly departs from and overrules the restrictive interpretation adopted in City of Cape Town v Premier, Western Cape on this point, strengthening accountability mechanisms in local government and reinforcing a purposive, constitutional approach to statutory interpretation.