Strata International (Pty) Ltd and Another v Ekurhuleni Metropolitan Municipality

The Ekurhuleni Metropolitan Municipality owned an undeveloped township, Selcourt Extension 4. Following an unsolicited proposal by Mr Johnson to develop the land as an industrial park, the municipality’s Corporate Affairs Committee passed resolutions in January and August 2004 approving, in principle and then finally, a Land Availability and Services Agreement that effectively disposed of the property to a private developer. The statutory requirements for public notice, transparency and public participation under s 79(18) of the Local Government Ordinance 17 of 1939 and s 14(2) of the Municipal Finance Management Act 56 of 2003 were not complied with. The agreement was later abandoned by the municipality after allegations of irregular land disposals emerged. The appellants conceded that the agreement itself was invalid, but contended that the municipal resolutions nevertheless created enforceable public-law rights obliging the municipality to complete outstanding statutory steps and give effect to the resolutions.

The appeal was dismissed with costs, including the costs of two counsel.

The case affirms that unlawful municipal decisions to dispose of public assets, taken without transparency, public participation and compliance with statutory prescripts, cannot create enforceable rights. It underscores the constitutional obligations of municipalities in asset disposal processes and rejects attempts to salvage invalid transactions through ex post facto compliance or reliance on public-law expectations.