Emalahleni Local Municipality & another v Propark Association & another

Emalahleni Local Municipality (first appellant) identified Stand 2243 Witbank Extension 10, a public open space (park) of 10,385m², as a potential site for religious organizations. The Witbank Muslim Jamaat (second appellant) expressed interest in acquiring the property to build a mosque. On 25 October 2007, the municipality resolved to invite tenders for the alienation and development of the property. Two proposals were received, and the second appellant's tender of R1,076,000 was accepted on 31 January 2008. A deed of sale was signed on 8 February 2008, subject to suspensive conditions including rezoning, subdivision, permanent closure of the property, and compliance with statutory provisions. On 28 March 2008, notice was published of the municipality's intention to permanently close the property. The Propark Association (first respondent) objected. The municipality resolved to permanently close the property on 25 November 2008. The respondent's appeal against this decision was dismissed on 14 October 2009. The property was transferred to the second appellant on 18 December 2009. The respondent launched a review application in March 2010 under the Promotion of Administrative Justice Act 3 of 2000 (PAJA), alleging that the municipality failed to comply with section 79(18) of the Local Government Ordinance 17 of 1939 (LGO) and section 14 of the Local Government: Municipal Finance Management Act 56 of 2003 (MFMA) before alienating the property, and sections 68 and 67 of the LGO before closing it.

• Whether the municipality complied with section 79(18) of the Local Government Ordinance 17 of 1939 (Transvaal) before alienating the public open space
• Whether the municipality complied with section 14 of the Local Government: Municipal Finance Management Act 56 of 2003 before alienating the public open space
• Whether the municipality complied with sections 68 and 67 of the Local Government Ordinance before deciding to permanently close the public open space
• At what stage must the municipality comply with the statutory requirements for alienation of immovable property
• Whether the respondent had locus standi to bring the review application
• Whether the respondent brought the review application within the prescribed time period under PAJA

The appeal was partially upheld. Orders 1-3: Set aside the high court's orders reviewing the resolutions of 25 October 2007 and 31 January 2008, and declaring the deed of sale of 8 February 2008 invalid ab initio. Order 4: Save as above, the appeal is dismissed (meaning the order reviewing the resolution to permanently close the property and the order to restore the status quo ante regarding the transfer remain in place). The first respondent was ordered to pay the appellants' costs of appeal, including costs of two counsel for the second appellant.

Section 79(18) of the Local Government Ordinance is triggered when a council forms a settled intention to alienate immovable property, but compliance with the notice and objection procedures must occur before the actual alienation (transfer of ownership) takes place, not before preparatory acts such as resolutions to invite tenders, acceptance of tenders, or entering into conditional contracts of sale. Non-compliance with section 79(18)(b) and (c) of the LGO means the jurisdictional fact necessary for exercise of the alienation power is absent, rendering the alienation ab initio invalid. Section 14 of the MFMA requires that before a municipality transfers ownership or permanently disposes of a capital asset (other than one needed for minimum municipal services), the municipal council must, at a meeting open to the public: (a) decide on reasonable grounds that the asset is not needed for minimum services; and (b) consider the fair market value and the economic and community value to be received in exchange. Compliance with these requirements is mandatory before transfer of ownership occurs. Section 68 read with section 67 of the LGO prescribes detailed procedural requirements for permanently closing public open spaces, including proper notice in the Provincial Gazette and newspapers, service on abutting property owners, conspicuous posting at the site, opportunity for objections and compensation claims, and consideration of all objections. Non-compliance with these provisions renders the decision to close the property unlawful.

The court noted that the first appellant's municipal manager allegedly instructed the identification of sites not needed for basic municipal services (a section 14(2) MFMA requirement), but observed that there was no documentary evidence supporting this allegation, stating that in the absence of such evidence the bald allegations could not be accepted. The court also observed that there was no allegation or evidence that at a meeting open to the public the council considered the 'community value' to be received in exchange for the stand, as required by section 14(2)(b) of the MFMA. The court noted that the first appellant's counsel conceded that the municipality would comply with the relevant provisions before the deed of sale develops into a completed contract and the property is transferred again. The court made brief comments about Lawyers for Human Rights' failure to file an affidavit before the hearing or comply with Rule 16, and that LHR's counsel made no submissions regarding infringement of constitutional rights to freedom of religion, so these matters did not require consideration. The court noted that the appellants' argument regarding locus standi had no substance and required no further consideration, as it was not pursued with conviction on appeal.

This case clarifies the timing and nature of compliance with statutory requirements for the alienation of municipal property. It establishes that section 79(18) of the LGO and section 14 of the MFMA must be complied with before the actual alienation (transfer) occurs, not necessarily before preliminary steps such as calling for tenders or entering into conditional agreements of sale. The judgment distinguishes between preparatory acts and the consummation of alienation. It also emphasizes the strict procedural requirements for closing public open spaces under the LGO, underscoring the importance of proper public participation in decisions affecting community assets. The case is significant for its interpretation of when statutory compliance is required in multi-stage municipal transactions and reinforces the principle that municipal property held in trust for residents cannot be disposed of without proper procedure and public participation.