Polokwane Local Municipality v Granor Passi (Pty) Ltd and Another

In 1988 the Pietersburg Municipality (predecessor of Polokwane Local Municipality) sold an immovable property (Erf 5665, Pietersburg Extension 12) to Granor Passi (Pty) Ltd for R181 000, payable by a 20% deposit and the balance in 60 monthly instalments with interest. Granor took possession, constructed approved industrial buildings worth approximately R22 million, and paid municipal rates for many years on the basis that it was the owner. Although Granor alleged that it paid the full purchase price by 1994, transfer of the property was never effected. In 2011 it was discovered that the property was still registered in the municipality’s name. After Granor requested transfer and provided documentary proof of payment, the municipal council resolved in February 2015 that Granor’s proof of payment was insufficient, refused to consent to transfer, and proposed instead that lease negotiations be entered into. Granor applied to review and set aside this resolution.

The appeal was dismissed with costs. The High Court’s order setting aside the municipal council’s resolution and remitting the matter for reconsideration by the municipality remained in force.

The case affirms that decisions by municipalities relating to the implementation of land sale agreements constitute administrative action reviewable under PAJA. It reinforces material error of fact as a ground of review where facts are objectively verifiable and uncontentious, and clarifies the distinction between public-law review and private-law claims for specific performance in disputes involving organs of state.