Changing Tides 74 (Pty) Ltd v The City of Johannesburg

Changing Tides 74 (Pty) Ltd owned a building at 191 Jeppe Street, Johannesburg (Chung Hua Mansions), which was unlawfully occupied by approximately 249 people. On 14 June 2012, Claassen J granted an eviction order directing the City of Johannesburg to provide temporary shelter to the occupiers by no later than 30 January 2013, with eviction to follow by 15 February 2013. The City of Johannesburg failed to comply with this order despite subsequent enforcement orders by Lamont J (6 February 2013) and Satchwell J (3 April 2013), and unsuccessful appeals to the Supreme Court of Appeal and Constitutional Court. The City only provided temporary emergency accommodation in January 2016, three years after the deadline. During this period, Changing Tides could not renovate the building and rent it out as student accommodation. Changing Tides sued for delictual damages, claiming economic loss for the period it was deprived of possession and income.

• Whether the City of Johannesburg's failure to comply with the court order to provide temporary emergency accommodation to unlawful occupiers was wrongful conduct constituting delict
• Whether the City's non-compliance infringed the occupiers' right to adequate housing under section 26(1) of the Constitution
• Whether the City's conduct deprived Changing Tides of its property rights in contravention of section 25(1) of the Constitution
• Whether the City's failure to comply with court orders violated sections 34 and 165(4) of the Constitution regarding access to justice and the rule of law
• Whether the City acted negligently or recklessly in failing to comply with court orders
• The quantum and period of damages to which Changing Tides was entitled

1. The defendant must pay the plaintiff damages in the amount of R12,374,993.00 together with mora interest of 11.75% per annum from the date of summons to the date of final payment. 2. The defendant must pay the costs of the action on the scale as between attorney and own client, including the costs of two counsel (one senior counsel), including costs of preparation and attendance at the 10-day trial between 2-13 September 2024. 3. The defendant must pay the qualifying fees and expenses of the plaintiff's expert, Mr. Paul Koski.

The binding legal principles established are: (1) A municipality's failure to comply with a specific court order to provide temporary emergency accommodation to unlawful occupiers, where such order was agreed to or not appealed, constitutes wrongful conduct giving rise to delictual liability, notwithstanding claims of budgetary constraints or lack of resources. (2) The section 26(2) limitation regarding 'available resources' does not apply to specific court orders compelling provision of accommodation in particular circumstances; such orders must be complied with regardless of financial position. (3) Prolonged deprivation of an owner's access to and use of property due to a municipality's failure to comply with eviction-related court orders constitutes deprivation of property in contravention of section 25(1) of the Constitution. (4) Non-compliance with court orders undermines the rule of law protected by sections 34 and 165(4) of the Constitution and constitutes wrongful conduct. (5) Where a municipality agrees to a court-ordered deadline with full knowledge of relevant factors but fails to comply, such conduct is at minimum grossly reckless, establishing the fault element for delictual liability. (6) In assessing damages for deprivation of property use, the comparative method applies, comparing the plaintiff's actual position with the hypothetical position absent the wrongful conduct, and the plaintiff is entitled to compensation for the full period of lost income resulting from the defendant's breach.

The Court made several non-binding observations: (1) The Court noted that the City of Johannesburg's business of renovating 'hijacked buildings' and renting them as student accommodation provides 'significant upliftment to the inner City of Johannesburg and meeting an important need to house students,' suggesting judicial approval of such private sector interventions in urban regeneration. (2) The Court commented that the City only managed to provide accommodation when its officials faced contempt proceedings, suggesting that threat of personal consequences may be necessary to ensure municipal compliance with constitutional obligations. (3) The Court observed that if circumstances changed after a court order was granted, the proper course was to apply for variation of the order rather than simply failing to comply - this reinforces proper litigation conduct. (4) The Court's characterization of the City's litigation approach as 'Stalingrad tactics' (persistent, drawn-out resistance) serves as a warning about inappropriate litigation strategies by organs of state. (5) The Court's decision to award punitive costs on an attorney-own client scale reflects judicial disapproval of the City's overall conduct in the litigation, potentially setting a standard for similar cases of persistent non-compliance by state entities.

This case is significant in South African jurisprudence as it: (1) establishes that municipalities can be held delictually liable for failing to comply with court orders to provide temporary emergency accommodation to unlawful occupiers, even where they claim lack of financial resources; (2) demonstrates that non-compliance with eviction-related court orders can constitute wrongful deprivation of property rights under section 25(1); (3) reinforces that municipalities cannot rely on budgetary constraints as a defence to non-compliance with specific court orders (as opposed to the progressive realization obligations under section 26(2)); (4) affirms that failure to comply with court orders undermines the rule of law protected by sections 34 and 165(4) of the Constitution; (5) provides guidance on assessment of damages in cases involving deprivation of property use, applying the comparative method over an extended period; and (6) warns that persistent non-compliance with court orders (a 'Stalingrad approach') will attract punitive costs orders. The case is particularly important in the context of urban housing disputes and 'hijacked buildings' in South African cities, establishing clear consequences for municipal non-compliance with constitutional and court-ordered obligations.